By Matthew Gaude & Shawn McGuire
We can’t see into the future. At best, we can try to predict what’s going to happen based on what’s happened before—but even that approach is flawed. The best we can do is plan for the unexpected based on what we already know: something’s going to happen eventually.
When we don’t plan for unexpected financial risks, it can catch us off guard, delay progress toward our goals, and even lead us to make unwise financial decisions. This article will be from a personal perspective (Matthew) and why one of our goals over the last 12-18 months has been to help you get your estate planning documents completed or updated. These documents include your healthcare directive, last will and testament, power of attorney, and HIPAA disclosure.
My youngest son, Miles, played travel baseball up until this summer when the season ended. He is a senior at West High School and plans on playing baseball his final year. He has played baseball since he was 6 years old. Recently one of my son’s travel baseball coaches, and family friend who helped coach his team in 2016/2017, passed away due to a bacterial infection. He was about my age, 50. Within the past several years, he and his family (his wife, a son Miles’s age, and another younger son) had moved to Colorado. He was healthy, with no known health issues, so when we learned of his death, it was a complete shock! You may know a coworker, family friend, or family member that passed away suddenly. They may have been in good health, exercised, and had no past health issues. Unfortunately, too many people think this could not happen to them and procrastinate on protecting their most valuable asset—their family. As human beings, we are not invincible. We need to plan for the unexpected. It is something we do not like to think about, but inaction could lead to complications with your estate and your beneficiaries.
If you have taken steps to complete or update your estate planning documents, thank you! If not, we have work to do. Following is a quote from a lady who works for a financial services technology company, whose husband underwent brain surgery due to cancer: “No more putting off till tomorrow, because we do not know what tomorrow will be.” I couldn’t agree more!
Life throws us curve balls when we least expect them. Without the safety net of an emergency fund, people often scramble to pay for unplanned expenses. While some events are only minor inconveniences that are easy to recover from, others may have a significant impact on your finances. These unexpected expenses could include the following:
- Urgent plumbing issues
- Having your car towed
- Emergency vet visit for your pet
- Medical emergency visit
- Getting laid off from your job
- Having an unusually slow season in your business
Preparing for these events with an emergency fund may ease some financial distress. Without one, you could end up taking on high-interest loans, accumulating credit card debt, or even liquidating assets to cover the cost.
Establishing an emergency fund is a top priority for families and individuals. The most recent data from Lending Club suggests that the average emergency expense is about $1,400. For more long-term emergencies like job loss, you’ll want to aim for saving three to six months’ worth of living expenses.
By dedicating a portion of your income each month to building a financial cushion, you’ll defend against unforeseen circumstances and safeguard your financial stability when emergencies happen.
Delayed Progress Toward Your Goals
Let’s say you don’t have emergency savings, but you do have a regular savings account where you stash money for your wife’s anniversary gift, your next vacation, or the down payment for a new home.
When the unexpected strikes, you’ll have to pull money away from your goals to cover it. That could significantly delay your timeline or cancel your goal altogether depending on how serious it is.
Instead, you might consider opening a savings account that’s dedicated solely to building an emergency fund. By separating your savings into different purposes, you’ll begin preparing for unplanned costs without delaying the progress toward your goals.
Shield Yourself From Catastrophic Events With Insurance
Medical insurance, life insurance, home insurance, and car insurance are just some of the critical tools you’re likely already using to mitigate your financial risks. If a catastrophic event happens, such as a car accident, basement flooding, or a serious illness occurs, your insurance company helps you cover the costs associated with those major events.
That’s why it’s important to have the appropriate insurance coverage for your needs. Without it, you could be exposed to significant financial burdens. By planning ahead and having your insurance coverage analyzed by a financial advisor, you could avoid the risks associated with any gaps in your policies.
Reviewing your current property and casualty insurance policies as well as your life and disability policies will be an important part of our review and planning meetings with you! All our auto and homeowners insurance premiums we pay have increased over the last year, so we will review to make sure you have the right type of coverage and amounts on your policies. Life insurance is another area where we will confirm you have enough coverage.
Plan for the Unexpected With a Professional
As the old saying goes, “If you fail to plan, you plan to fail.” The fact is, life will happen regardless of whether you’ve set aside the money to cover unexpected expenses or not. The difference is in how you’re able to handle it.
Do you have an emergency fund in place? If not, we at Live Oak Wealth Management invite you to speak with our financial advisors to create a detailed plan on how you can mitigate the risks of unplanned events, taking into account your overall financial picture. Call our office at 770-552-5968 or email [email protected]. Or, if you prefer, you can simply click here to schedule an appointment online.
Matthew Gaude is an *investment advisor representative and the co-founder of Live Oak Wealth Management, a financial services firm in Roswell, Georgia. He serves the planning and investment needs of corporate employees, those approaching or in retirement, and 401(k) plan sponsors. Working first as a commodity broker and then as a Business Development Manager for a national broker-dealer in previous jobs, he has the insight and experience to help clients understand the complexities of the market and implement strategies to minimize risk. To learn more about Matthew, connect with him on LinkedIn or visit www.liveoakwm.com.
Shawn McGuire is a financial advisor and the co-founder of Live Oak Wealth Management, a financial services firm in Roswell, Georgia. He serves the planning and investment needs of corporate employees, those approaching or in retirement, and 401(k) plan sponsors. He has worked in financial services since 2002 in positions ranging from financial advisor to stock broker and portfolio manager. As a CERTIFIED FINANCIAL PLANNER™ professional, he is trained to help clients with virtually all their financial needs. To learn more about Shawn, connect with him on LinkedIn or visit www.liveoakwm.com.
Securities offered through American Portfolios Financial Services, Inc., member FINRA/SIPC. Investment advisory services offered through *American Portfolio Advisors, Inc., a SEC Registered Investment Advisor. Live Oak Wealth Management, LLC is independently owned and not affiliated with APFS or APA.
Any opinions expressed in this forum are not the opinion or view of American Portfolios Financial Services, Inc. (APFS) or American Portfolios Advisors, Inc. (APA) and have not been reviewed by the firm for completeness or accuracy. These opinions are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk, and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. Seek tax advice from a tax professional. Neither APFS nor its Representatives provide tax, legal or accounting advice.