Saturday I learned again the importance of backup plans and the folly of “hoping for the best” and not “planning for the worst”. I spent most of the afternoon and evening waiting to catch a flight overseas that never made it out due to the Super storm that hit Ottawa. I ended up eventually leaving the next day later and it disrupted all plans that I had for meetings and such and has made a busy week now a hectic and possibly unproductive week.
What were my mistakes:
It is winter in Canada until April, if you travel between November and April you must at least think about the possibility that your travel may well be disrupted by bad weather. This kind of disruption can happen any time in the year, but is much more acute in the winter.
- I knew bad weather might be coming, yet I remained optimistic that I might be able to get out of Ottawa. This kind of optimism is naïve, there must be an executable backup plan, or you will be at the mercy of the next issue.
- The Amex Travel emergency response number for travellers who use the Amex Travel bureau never answered. Yes, it was a terrible weekend, yes there was a warning waits might be long, but my colleague and I waited for over 3 hours once and 2 hours another time (on hold) and never spoke to anyone.
- This means we are most likely liable for penalty charges for hotels and travel legs that we could not cancel.
These mistakes seem easy to fix in future travel plans, and I think I am just out of practice.
What does this have to do with Personal Finance?
Without a good backup plan in place how will you deal with a major disruption occurs?
- If you work in a company that is in peril right now, do you have a plan in case you get laid off?
- Are you hoping for the best, when you know you are being too optimistic?
- Do you even know what might happen if you get laid off? Would you get a termination package, or would you get the minimum the company can give you?
- The stock market is going in the crapper (no wait, that’s not a scenario, that is right now)
- Do you have an investment strategy or heuristic that you can live with and that allows you to sleep at night knowing you have a plan?
- Are you relying on a brokers advice, or worse, your friends advice (or you read copious Financial Blogs) to tell you when it is best to buy and sell? Fool hardy is where that goes.
- What if you died tomorrow, what would happen financially? Can your family cope with this? Do you have enough insurance? How do you know what enough is?
These are a few examples of financial or life “storms” that if you are hoping for the best will blow your finances out the door (or pile snow up to the tops of your financial windows).
What to do?
Planning, first and foremost is where you start, and if you don’t, you don’t have anyone to complain to, except yourself.