Rick is enjoying his coffee in his spacious kitchen overlooking the backyard garden.
His wife of 10 years, Claire is by his side. He is about to head into the office when he hears the phone ring from the other room. He hollers at Claire that he’ll get it as he steps into the library to retrieve the call…
B: Hey buddy, listen up. I need you to listen to me.
A: Who is this?
B: It’s your future self. I am a few decades older now. I really need you to listen. There is a shot you can change how the future turns out.
A: Ok? Clarify because I am heading to the office after I surprise my wife with her new car.
B: No, don’t do that! Save the cash, invest it, do your research, but definitely, you need to invest it, please! You’re going to need it. Trust me.
A: What the…?
B: Look, I can’t go into all that. Claire. Your wife. Our wife. She leaves you because you wouldn’t pay attention to her. You were too focused making and spending money. It turns out she wasn’t into all the gifts. She just wanted you to love her. Hey, I gotta go. Save and invest that money, ya hear? And no other silly shenanigans.
You may be thinking what the heck was that?
That was a small glimpse of someone else’s future. Will yours be similar?
These days it’s easy to put off the inevitable – getting older, having to make the hard decisions, saving…ya know – adulting? But hey, if you don’t manage your life and finances, who else is going to do it?
Obstacles are only problems if you don’t have a plan for overcoming them.
That being said, let’s take a look at some life-altering circumstances which can happen to anyone, and consider now how you want to approach them.
3 Impactful Reasons To Prioritize Saving Money
#1 – Your Job Is Not Secure.
I’m sorry to break it to you.
You can’t plan your future around what works today. Everything may be good now. Part of being a responsible adult is planning for the future and keeping some considerations in mind that it may not be all rosy.
This applies to all aspects of your life, that’s why you go to work, pay your bills, go to work – you know the cycle.
Why not put a cushion in there, so if the cycle were to deviate from working, that you would still be able to pay the bills?
Let’s take a look at two scenarios in the working environment that you may find some difficulty with in the future.
Let’s say you have a cushy office with a great boss that actually listens to you! Now, fast forward a few years, that boss retires and instead of promoting you, they hire someone younger than you to move into the position.
No problem though, because you didn’t want a managerial role in your career path anyway. What if I told you that your new boss despised you, for no given reason – they just didn’t like you?
Here’s a work-related example of how one person’s world shifted.
An acquaintance of mine, let’s call him Ben, majored in Marketing with a minor in Management. A great communicator who did well interacting with different people. From the get-go, he chose the wrong major for his chosen career path. He wanted to be in Management. Sure, he would get opportunities, but it may be more difficult.
Well, he was in luck, he had friends in high places. His friend put in a good word for him at his workplace and before you knew it he was in a District Manager position managing a region of U.S. stores for a well-known grocer.
This type of position is amazing right out of college – working a high-level managerial position with no real experience. Wowee!
I bet you can imagine what happened about three years into his high-flying role. His boss left the company and was replaced by a woman who did not have a liking for him – AT ALL.
From what he recounted, she reprimanded him on areas that he felt that he was being wrongly disciplined for and eventually he made the decision to leave. He was essentially pushed out of his position for a reason only the woman who sat one level above him would know.
It just so happens that the acquaintance was a big spender with no real savings. His options were very limited as a result, and he resorted to moving in with his buddy in a different state. He was fortunate that this friend also had a few connections, and was able to find him a job inside a grocery store.
Company Or Business Volatility
On the same token, your job may not be secure for a completely different reason. Let’s say, for example, you are working in an industry that is cyclical and every few years there are furloughs or layoffs that occur.
This happens all the time in tech, energy, manufacturing – you name it. You may see it coming, or you may not. It just depends on how open your company is in alerting you to possible cuts in their workforce.
I have seen my fair share of layoffs in 2 out of 3 of my previous big-girl jobs. At my first job, the whole 10-person Accounting department got corralled in a conference room at least once a week to be reminded of the inevitable end to our jobs.
As you can imagine, each time it was uncomfortable. I remember feeling sorry for the people who had dedicated a large part of their lives to the company.
I was in my early 20’s, making probably $12/hour. At the time, the situation did not have a profound effect on me.
I was attending school and just starting out in life, but I can’t speak for the livelihoods of my colleagues. It woke me up to the fact that nothing is guaranteed – not even your job.
- Not one job out there is secure. You are expendable to any company.
- Try to see the bigger picture – your situation is great today, but it may change in the future.
- Be prepared for the decisions you will need to make in case you fall into a situation which dictates that you make a move – career or otherwise.
- Prepare now for hard times. Have the ability to sustain yourself for a period long enough to find the “right” job, not just the “first” job
#2 – Health Is Not Guaranteed.
Each year that passes will inevitably bring along health concerns.
I’m in my early 30’s, but I can tell that I am going to have more issues in the future with my left knee. This is the one that has always given me problems.
Every time I do a controlled bicycle kick for yoga it reminds me that I am in for possible knee surgery. In the grand scheme of age-related health issues, this may seem minor, but it has me thinking about what the future may hold.
In other cases, it may be when you are much older at 50, 60, or 70 that you realize that you have health concerns. This can be a problem if your only cash flow comes from working the 9-to-5, which happens more often than you think.
You may have experience with an elder that can’t retire because they don’t have the funds to do so. Even worse, their health is visibly giving way, yet they have no option but to make that commute and work that job day in and day out.
- Your health can cause issues that leave you unable to work
- Some ailments may come slowly or occur as a result of an accident
- Leaving a job to tend to an illness may not be feasible if you are living paycheck-to-paycheck
- When it is time to retire, the proper cash flow is necessary to tend to possible health concerns
#3 – Divorce May Be In The Future.
Whether you are currently married or are still waiting for your prince or princess, this will concern you.
According to APA.org, 40 to 50 percent of married couples in the United States divorce. The divorce rate for subsequent marriages is even higher.
These statistics are not surprising to me because I am sure we can all relate to knowing someone who is a divorcee. I do, and it hits close to home.
Look, it is very plausible that you won’t be a statistic, but keep in mind, that you can only control your actions. Things change, people change – it happens. Of course, I am a proponent of marriage and working to make it a long-lasting relationship.
Here’s an example that is all too common – divorce, in this case in his early 50’s.
An acquaintance of mine, let’s call him Wilbur, married and started a small family. He turns 65 next year with no plans to retire. Would he prefer to retire? Yes. Can he retire? No.How do I know this? I asked him.
You see, he married his sweetheart in Nevada and then moved to the Southwest, where he raised a family and likely thought he would grow old with his wife, Wanda.
That all ended when Wanda decided that she no longer wanted to be married to him. Looking in, you could tell that being opposite is what initially drew them together.
Now, it was driving them apart.
Wanda, a Type-A go-getter had started her own business, while Type-B Wilbur was the muscle working alongside, doing all the grunt work to get the company off the ground.
Well, working relationships can strain the marriage, and that’s what ended up happening here. Love was lost, a friendship took its place, and a divorce occurred. Wilbur had never planned to divorce and was in it for the long haul.
It makes sense why he didn’t plan for his future, as he expected the business they built together to support them both well into their golden years.
But now he found himself alone, with few marketable skills. Wanda paid his credit cards off as a parting gift but he was left with $0 to his name.
He started over in his early 50’s.
He is 64 now, still working full-time, and likely will rely on social security to make ends meet.
Divorce causes an entire frame-shift in how one views and plans for their future. First, nobody hits the ground running once the final form is signed. There is a period of sadness and depression.
Who wants to think about their now-shattered future in this state? There are immediate concerns such as housing, employment, and family. This is why it is important to think about such an event now and at least have a plan in case the worst happens.
After the gavel drops, the unprepared person will suffer serious setbacks and will likely be forced to make uninformed, rash decisions which will impact their financial future.
- Marriages can end abruptly
- Divorce is at an all-time high
- Plan for the future with your mate, but also plan a worse case scenario in case it ends unexpectedly
Areas To Review
Now, I want to liven this discussion up a bit. I probably fully depressed you to the point you’re likely going to want to gorge on a pint of ice cream later.
Don’t worry, it’s looking up from here. You have been faced with these challenges mentally, so you can now prepare to deal with them appropriately should they affect your life.
I wrote the 4-Step Financial Survival Guide using my own experience from my 2nd layoff as a reference. Also included are non-financial considerations, because a job loss will see both financial and emotional disruption. Give this a read PRIOR to a job loss so you can prepare for it as best you can.
If you are currently unemployed and looking for a position, check out Job Search, What To Do Right Away for some tips.
Along with living a healthful lifestyle and maintaining your healthcare coverage, having the proper savings vehicles for an event that may transpire is beneficial.
Just like a job-loss, not every health event comes with a warning. It is important to make sure you have the ability to maintain your lifestyle despite an extended absence from work.
An emergency fund should be able to cover several months of day-to-day bills. Care should also be taken to ensure that expenditures on actual medical care are minimized.
To this end, I do what I can to protect myself against potential obstacles. I have written all about Why I Paid For Health Insurance After It Nearly Doubled. It provides insight on the importance of insuring for current and future health needs.
Additionally, if you have the option of a high-deductible health plan and want to learn more about a savings vehicle for your healthcare – read about the benefits here and consider if it’s the right option for you.
Mutual agreement – Financially, the main ways to hedge against the risk of marriage failure is the use of a pre-nuptial or post-nuptial agreement.
Though not very romantic, this may be a viable option if you are concerned about your current or future marriage.
Non-wage earning spouse – A way to sustain yourself in case your marriage were to fail is to always have options. The risk of a failed marriage is one thing, but not having a “next-step” plan is another.
Maintaining marketable skills and continuing to be active in the job arena will only prove to better your standing in case of a divorce or even an untimely death of a spouse.
Unmarried – If you are unmarried, but see it on the horizon, my suggestion is to set your sights on finding a financially compatible match.
Money is a large component of one’s life and the decisions made with money can translate into other areas that may be undesirable. Of course, this largely varies…
Married – Marriage is the one relationship that needs to be worked on each and every day. It’s easy to go with the status quo and put the happiness of your spouse to the wayside.
It takes work and just like anything in life, there is continued learning that needs to take place. A good read to strengthen and improve your marriage is the “5 Love Languages” by Gary Chapman.
From my experience, it is necessary that both parties read it. Let’s just say if Rick knew what Claire appreciated in their marriage, they may still be together.
Here are more related articles that will help you jumpstart your saving initiatives and money prowess:
- Frugal Living: 14 Practical Tips To Save Money
- 10 Life-Changing Money, Health, And Relationship Habits
- 5 Tools To Manage Your Financial Health
- Want To Budget Like A Boss?
- Real-Life Savings Series
- Sharing Accounts: 4 Considerations
So, you confident person, go out there and make your future self proud!
Read more about my mission HERE.
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Readers, what is the #1 factor that your younger self should have taken seriously in considering the future? Please share your experiences below for people who are reading this and are needing your support!