When It Floods

When it floods, will you be ready? It’s been an unusually wet rainy season in my neck of the woods that sent nearby rivers and creeks out of their banks. For some reason, the builders of several subdivisions like the one pictured here developed neighborhoods near the flood-prone Pearl River in Jackson, Mississippi. Go figure.

In life, it’s just a matter of time until it floods. You can go years with no problems when suddenly an unexpected flood hits. It may be a financial flood, a health flood, a career flood, or a family emergency flood. But rest assured, the flood will hit. It’s not a matter of if, but when.

Do You Have a Plan?

I have a friend who bought flood insurance after the recent flood. His house didn’t get flooded, but the waters came close enough to get his attention. What is your plan for a flood? Do you have a plan? Do you have an emergency savings account? Do you have the right kind of insurance? Studies show that 78 percent of working Americans live paycheck to paycheck.

Do you save money each paycheck? Do you invest money in some sort of interest earning way? Or do you use your credit card for emergencies? I heard a radio commercial recently hawking the services of a credit reduction company. The ad talked about the beauty of a debt-consolidation loan. I’m not sure borrowing money to pay off debt makes good sense. And that’s not the type of plan that works for the long haul.

Don’t Buy Stuff You Can’t Afford

Years ago, a Saturday Night Live skit featuring Steve Martin humorously drove home a simple point: Don’t Buy Stuff You Can’t Afford. The skit was funny, but made a serious point about money. If you don’t have money to buy something, don’t buy it. Save your money so that when the rainy day comes, you’ll be prepared. I’m amazed at people who buy the latest tech products, the latest automobiles, the sharpest clothes, eat out several times a week, and take expensive vacations, all on the credit card. Yet, they complain about being head over their heels in debt. Maybe the latest Apple watch should wait until you actually have the money to buy it.

Rest assured that the flood will come. Have a plan because when it floods, it’s too late to start developing a plan at that point. It had been 37 years since the last flood in our area. It’s easy to get complacent when the last time it flooded is distant memory. But I was ready for this flood. Years ago I moved to an area away from the Pearl River flood plain. I bought our house on a 15 year mortgage and paid it off in 14 years. That brought financial freedom from having to worry about a financial flood.

I’m not rich by any means. But I can assure you that by having a smart financial plan, you don’t have to live in fear of a debt-caused flood. Develop a financial plan today, because the rain will undoubtedly come.

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