How to Plan for When Life Happens

Put a plan in place for the unforeseen

Life happens; and sometimes that means things don't go our way. When it comes to finances, preparing for the worst is not only prudent, it's crucial. Experiencing a financial loss due to a market sell-off or any personal emergency can be catastrophic. Suddenly, you don't have enough money to fund your goals, let alone your needs. Not being able to help fund sending a child to college because you needed to liquidate their 529 college savings plan to cover your cost of living is a situation that no one wants to find themselves in.

I've learned the hard way, from experience. 

My wife went through a difficult pregnancy with our son about 30 years ago. At the same time, we didn't realize how bad our health insurance was and were faced with sizable medical bills. We failed to put a plan in place for the unforeseen. More recently, our family again faced a number of serious health issues, but this time we were able to weather the financial storm, thanks to a ot of forethought and preparation.


Planning ahead can help you reduce risk as much as possible. Good financial planning starts with consideration of your needs, wants and goals. Wealth advisors can help you think about your big picture and how that should match up to a savings and investment plan that works best for you. An effective wealth planning strategy takes into account numerous variables, including financial support for loved ones and children, retirement age and Social Security, travel, etc. Wealth advisors can help you prioritize what’s most important to you while simultaneously monitoring market activity to organize a unique investment strategy and financial plan to best suit you.

Here are some of the more critical components of any good financial plan that I emphasize with my clients:


Financial emergencies happen but without an emergency fund, a credit card is usually the only other option and that could lead to years of digging out of debt. An emergency fund should be used for genuine trouble and not discretionary spending. An emergency fund should be equal to three to six months of your normal spending.


The associated costs of health care are often a forgotten component of any emergency plan. It can be difficult to predict the future but reviewing your health insurance policy as well as your family’s medical history can help assess how much money you may need to set aside. It’s also prudent to examine and understand your employment benefit package so you know what you might be facing in case of an emergency.


It’s important to make sure your investments are diversified. That way, if one investment loses money, other investments may be able to compensate for those losses. Also, be sure to stay on top of the news; positive and negative issues currently taking place in the world may affect your portfolio and you’ll want to check on your investments regularly to see if there’s a need to rebalance.

By putting together a financial plan, you’ll not only be ready for those unforeseen financial bumps in the road, but ultimately be able to enjoy the rewards of reaching your personal finance and retirement goals.

Rob McAllister is a Financial Advisor with the Global Wealth Management Division of Morgan Stanley in Boulder. He can be reached at 720-562-6220 or

Categories: Finance