The ground beneath my feet trembled with a ferocity as I opened the back door to let the dogs out. Then the walls began to shake, glasses in the cabinets clanged together, and my eyes immediately looked toward the three boys in my living room frozen in the unknown gripping the couch. In the 24 hours between January 12th and 13th, 2024, that wall shaking moment was one of 18 earthquakes measuring 2.0 to 4.3 in magnitude recorded. An earthquake, unexpected and unannounced, had erupted, shattering the laughter of our blended family evening playing games and halted the night to an eerie silence. As quickly as it had come, it ceased, leaving behind a shock in the boys’ eyes I will never forget. Â
Earthquakes are a stark reminder of how life, much like the unpredictable trembling of the earth, can throw us into unforeseen and often financially destabilizing situations. The quake was a metaphor for these unexpected shake-ups, the kind that can leave our finances in disarray when we least anticipate it. I've learned that the key to weathering these metaphorical quakes lies in preparedness and resilience. Â
One month after our blended family wedding in the early summer of 2022, an earthquake unexpectedly shook up our new life together and has ever since shown us a whole new level of preparedness. Suddenly needing a 5th spinal fusion in his lower back, my new husband struggled in extreme pain, suddenly unable to work as he waited months for required surgery. Loss of income, increase in medical costs along with a call the day before surgery requesting a payment of $6000 or the surgery would be canceled devastated our new blended family. Â
Everyone talks about building a $1000 emergency fund, but no one talks about having enough to cover all your out of pocket deductibles. No one talks about ensuring you have months of salary saved up in case you suddenly can not work. 1 out of 4 adults will suffer some type of disability in their lifetime. The American Bar Association reports that 25% of today’s 20 year olds will become disabled for a period of greater than 90 days before they retire. Yet rarely ever do we talk about the possibility of not being able to financially support ourselves. We rarely think about having a 1 in 4 chance of our lives suddenly changing. We rarely discuss the steps to prepare and therefore remain unprepared.
Four key strategies to implement into your Financial Plan:
Disability Insurance:Â This is perhaps the most direct way to protect yourself financially in case of a disability. Disability insurance provides income if you are unable to work due to illness or injury. There are two main types: short-term and long-term disability insurance. Short-term policies typically cover a portion of your salary for a few months to a year, while long-term policies can provide a percentage of your income until retirement age or the policy term ends.
Emergency Fund: An emergency fund is crucial for all unexpected life events, including sudden disability. I recommend having enough savings to cover at least three to six months of living expenses plus any out of pocket health insurance deductible. This money placed in a high yield savings account can help cover immediate costs and expenses during a period when you may not be receiving income or while waiting for insurance benefits to begin.
Health Insurance and Health Savings Account (HSA):Â Adequate health insurance is vital to cover medical bills that can accumulate due to disability. In addition to health insurance, a Health Savings Account (HSA) can be beneficial. An HSA allows you to save money tax-free to be used for medical expenses, which can include disability-related costs.
Diversified Investments and Passive Income Streams:Â Having a diversified investment portfolio can provide additional financial security. Investments can grow over time and can be a source of funds if liquidated. Additionally, developing passive income streams, such as rental income or income from investments, can provide ongoing financial support without the need for active work.
Rarely is Oklahoma associated with Earthquakes. We are known for our high winds and tornados. However if in 24 hours, 18 Earthquakes can suddenly rattle the homes in Oklahoma, who can say that life can not suddenly rattle our ability to provide. Â
After recovering from surgery in February 2023, 8 months after suddenly needing spinal surgery, my husband was able to go back to work part time. Then he passed out in the kitchen in July 2023. It has been six months of referrals, numerous tests, long wait periods for follow-up appointments and thousands of dollars with still no answers for resolve. Unexpected Earthquakes keep rattling our life and our blended family of 6 boys. However, our story is to prepare you. It is a testimony to matter what state you physically live in or what state you believe you have financially achieved, earthquakes can rattle your life unexpectedly.Â
Before the seismic shifts alter your life, plan your overall financial wellness by financially shifting your mindset from taking action someday to today.
Tricia