Given the tragic events that have happened following the Earthquake in Japan last week, many folks have been pinned to their TV’s trying to figure out whether the Nuclear Reactors will become another Chernobyl, or simply another Three Mile Island? We are all mesmerized by the horrific and scary news that is coming from this scene of devastation, and we all hope that the people of Japan can recover from this Natural Disaster (and we send our hopes and prayers).
Have you noticed no one is talking much about the Middle East, much? Yes, eventually the news gets to this, but long after you have changed the channel, or it is on page 2 or 3 of the front page, because it is old news. Is this justified? No, the events going on in Libya, Bahrain and other places are no less newsworthy, but due to the terrible events in Japan, they are no longer that important, to the News Media (and to us as consumers of the media stream). Are the folks in the Middle East taking advantage of this Global Distraction? Some might argue that they are, it will be for history to show whether they did or not.
What does this have to do with Personal Finances you may ask (if you have read here enough you know I’ll get there some time)?
This kind of distraction happens in our day to day lives all the time.
Why is the House so Damn Cold?
A classic example was a few years ago, my wife and I were discussing buying a new Television and finishing our basement, then one morning we woke up and the house was 58 degrees Farenheit and cooling off quickly, the furnace had finally packed it in. All our plans for other frivolous things suddenly went out the window, because we had to deal directly with an important issue at hand, replacing our failing furnace.
Paying for the replacement furnace caused a great deal of distraction financially, and we had to figure out where the money came from and what was going to move down in the financial priority queue (given heating the home with small children is easily the highest priority).
How might this distraction have been dealt with differently? Plenty of ways:
- More diligent service of the furnace itself, although we did have it checked a year previously
- Have an Emergency Fund available so that plans do not get re-vectored when disaster strikes
- Have a replacement plan for major appliances, with an estimated shelf life for each. If you assume each major appliance should last about 10 years, and plan on replacing them when they die, you can set up savings systems to have the money ready.
Don’t allow events to distract your financial plan, or your financial day-to-day life. Make sure you have complete concentration on your goals.
You could set up an automatic savings plan of as little as $20 a week for “broken stuff” sort of like a subset of an emergency fund.
Ghadafi must be pumped that he is off the front page of every paper around the world.
Nice tie-in … I DID notice how Egypt, the former “big story,” suddenly disappeared from the headlines.
The best way to not get distracted financially, I think, is to write it down …. that way, no matter what’s on your mind, your “savings prescription” is there on paper! This can help you remember to save for replacing your furnace, even in June.