Once again, a hurricane bore down on the United States. Once again, people in the affected areas were told to evacuate. Once again, hundreds did not, leaving them stranded in their houses as the water rose, or worse, dead. Why is it that this keeps happening? It's not because people don't believe that the storm will hit (for the most part); it's not that they think the storm will be less severe than it's predicted to be, because surveys show most people believe the storm will be worse than forecast. The reason is cognitive bias. We know the storm will be bad, but we don't think it will affect us. None of our neighbors are preparing, so we don't need to. We forget what it was like the last time (which is also another explanation about why women have more than one child after enduring labor and delivery the first time). We focus on the immediate discomfort and decide to put it off. We think if we do one or two things, we have done enough.
In truth, our minds play tricks on us all the time, not just in the face of a natural disaster. When was the last time you checked to make sure your long-term disability policy covered enough of your income? Have you updated your homeowner's insurance policy to account for the increase in the value of the house and its contents? Probably not. In fact, you probably even forgot you had those things except when the renewal notices arrive.
I'm sure you aren't surprised that Here in the Trenches, we come across folks who are unprepared all the time. We have clients who saw the signs that their spouse was cheating or that their spouse was mishandling the finances, and ignored them. We have clients who have been horribly abused, physically and emotionally, who downplay the severity. We have clients who, when faced with overwhelming evidence that their spouse is taking a scorched earth strategy, still believe in an amicable resolution. I'm not talking about stupid people, yet these folks fight us tooth and nail when we try to get them to see what's obvious to us and to take action. Then, when like the hurricane's victims, they are left high and dry, they can't understand how it happened, and somehow it's everyone else's fault.
I know facing reality is hard. I'm human just like everyone else and underplay things that go wrong. I'm not always the fastest at acting to correct the things that should be corrected. I am, however, pretty darn good at protecting myself and I'm really good at protecting my clients - if they let me.
In that light, I have a list of things you can do to protect yourself, even if disaster never strikes. If you do just one of these things, you will better off than the majority of the people I see. If you do them all, then you're golden. Notice, the list is short.
1. Know what you own, where it is and what you owe. You don't have to make a formal spreadsheet but have a good idea of what it is and where the paperwork is (making a copy and keeping it in one place is ideal). I can't tell you the number of spouses who no clue - and that hurts you if you find yourself Here in the Trenches, or if you find yourself widowed.
2. Apply for credit in your own name. I don't care if it's a store credit card with a $200 limit. Have something. I had a friend whose mother became widowed and even though she had significant assets, she had a hard time refinancing the house and buying a car because she had no credit in her name at all.
3. Develop a marketable skill. What if my friend's mother had no assets? She was a housewife for 30 years and had no marketable skills. She would have starved. While you are married and have at least one other source of income is the time to take that word processing class, get a certification, renew your existing certification. Don't leave yourself dependent on the good health and employability of somebody else. Even if you get alimony, that all goes away if the payor gets hit by a bus or dies.
Do one of the above and you're ahead of the pack. Do two, and you're increasing your lead. Do all three, and you win the race. Here in the Trenches.
No comments:
Post a Comment