Smarter money decisions, one cent at a time.
Sometimes, one single event can change the complete trajectory of our life. It could be a marriage divorce, an accident, or the loss of a loved one.
Life can throw curveballs that shake us to the core and make us rethink all our plans. One of the major effects of such events is their impact on your financial stability.
Road accidents in the US present a dismal picture, with the cost of injuries and fatalities running in billions. According to data published on Statista, the annual economic cost of vehicle crashes in 2019 was $340 billion. When this number is updated for inflation, the figure for 2024 touches a staggering $417 billion. Based on these figures, each American pays nearly $1,268 for these crashes.
For victims struggling with injuries and damages after debilitating accidents, the financial stress can be daunting. If you face a catastrophic car accident, rebuilding your finances can be challenging. However, you can regain control of your financial situation with careful planning and strategic actions.
Suffering a serious accident can be devastating, not only for the person injured but also for some people close to them. Life-limiting injuries can cause the injured party to experience extreme physical pain and intense emotional pain as their day-to-day life changes in so many ways.
They can become depressed, stressed, and frustrated. One of the biggest causes of the stress is the financial worry of losing income because they are no longer able to work. Here are 4 ways to cope financially after an accident.
I was going through a recent story about how cancer patients experience the financial worry. As per the report “Four of every five such American patients and their spouses-caregivers in the study said they had concerns about meeting medical costs and suffered “financial stress.” Worries about paying medical costs also were tied to lower mental and physical health, the study found.”
Not only among patients, the financial worry is one of the most common factors behind poor mental health and it’s the biggest reason for crime. In this era of gadgets and increased social interaction (although mostly virtual) people need money in the bank. More than what our parents or their parents needed, we need money. Naturally, financial worry becoming more and more widespread.
A lot of us have made some pretty horrific decisions in the past. Making mistakes is generally thought to be a part of the learning curve; when people make bad decisions, they get a first-hand experience of where they could have acted a bit more prudently. For example, we often find ourselves subscribing for a gym membership when the treadmill at home has been gathering dust for a long time.
That impulsive purchase of the new smartphone with your credit card when you are already struggling to pay the minimum is another example of a bad financial decision. In fact, a relatively new branch of study known as Behavioral Economics is looking at how humans, who in classical economics are termed as rational, end up making such irrational decisions! Well, the good thing about any bad decision is that you can learn from it and vow to not repeat it in future.
Despite burning their hands by making poor financial decisions, some people still end up making one bad decision after another as if their brain has somehow been hardwired to function this way only.
People with corporate jobs are more theoretical. We try to energize workforce with theories of productivity, we try to form tomorrow’s leaders with theories of leadership. One of the top leadership theories is “failures are stepping-stones to success”. It does apply to everything we do in our daily life., finances included. The only thing good about failures is the lessons we learn from them. Make your financial set backs a great learning and don’t repeat the same mistake again. Enjoy this guest post from Natalie.
I like to think of myself as a pretty positive person. I like to count my blessings. I like to say my good affirmations at least once a day. I really try to associate myself with other upbeat people that have good attitude. All these things have been known to contribute to better moods and improved self-worth but sometimes life really knocks us down. These are the situations that challenge us the most. When it comes to finances, it hits you hard!
The emotional pain of divorce can be heartbreaking- the separation of a life together and the struggles of building an independent life can be almost overwhelmingly difficult. Divorce is also one of the factors in people’s financial disaster.
Divorce can be particularly difficult for single income families, where one of the spouses gave up their career and income, and now find themselves struggling to get by, often with added financial obligations, such as the cost of raising children, maintaining a home, and sometimes alimony. How exactly can you pick yourself up and get back on your financial feet after a divorce?
When we start with a project, we make plans, document them and weigh in different plans. Then we select a plan to work with. Then, there, we also have a backup plan for the original one, called as a fall-back option. The backup plan is not documented as detailed as the main plan, though. Still we start with a plan B, partially documented. Your personal finance is just another project, there’s little difference between your work project and a personal finance management.
Applying the same project management method to our personal finances, should we not have a financial backup plan? What if there’s a new family member, what if we lose someone? What if a disaster strikes? Or even what is our plan if another economic meltdown occurs today? To meet with any unavoidable circumstances that may affect our financial life and health, we should be ready with a backup plan, the plan B.
Let’s say you have a goal for mortgage pay off in 10 years, and suddenly due to illness to one of your family members, you need a large chunk of cash even after insurance coverage. In all probability, the money you will either take away from emergency cash or you will break into another investment and do a premature withdrawal (may even be from your retirement saving). Worst case, you will borrow money with interest.
Managing finances is a very sensitive area in marriage. Statistics show that 90% of marriages fail because of failure to manage finances responsibly. Many words have been said, lots of advice have been extended, and various ways were suggested in order to manage money. Yet, the question remains, how should we manage it? And, when one manages it, how can the other one trust the other partner?
Before answering that question, you have to embrace the fact that when you tied the knot, two of you become one. What are yours become your spouse’s possessions too. You cannot divide your properties and limit each other to specific properties that you want to share then keep what you don’t want to share inside your locker.
The following is a guest story, long time back I wrote about safeguarding your money from disasters. The story reminds me of the hurricane damage we faced in 2005, here in south Florida. Here’s what happened in Ireland, there are lessons in the story, enjoy reading!
The Quigley family was enjoying a pleasant November evening when disaster struck. It began when they were distracted by the barking of a stray dog in the backyard. As the family returned to their living room, they realized that a fire in the fireplace had gotten out of control. A loud roaring sound confirmed the presence of a chimney fire.
