Welcome to part 2 of the preparedness series. In this post we will look at step one of the preparedness planning and that risk determination. Most people plan for zombies, because if you have planned for zombies, you have planned for everything. This is of course total bullshit.
So the first thing we should do is determine what is a risk. My definition of a risk is something that can affect the outcome of your life in a negative manner. For instance there is a risk in crossing the road. We may get hit by a truck and we mitigate this risk by looking both ways before we cross.
So what risks do i have?
I expect I have many of the same risks that you have, but to make this easier, lets break them down into categories:
- Do you have a job (Employment)?
- What does your health look like (Health)?
- Where do you live (Location)?
The other thing to consider is that you have limited resources, and cannot prepare of absolutely everything. No one person can and this is one of the functions of government; to provide resources and resource management in times of crisis. So don’t get bent out of shape because you don’t have enough money to purchase a plane and a tank.
Employment
Loss of employment is one of the highest risks we face and yet it is given the least amount of thought. Most people are 1-3 paychecks away from starving or homelessness or both. The recent global pandemic has highlighted this like never before and yet most people still don’t consider it a problem that they need to plan for, its just a part of life and government will bail them out. Well no, government won’t bail you out as I believe we have all recently discovered.
So how do we plan for loss of employment? There needs to be an understanding of your financial position, and a plan to improve it. That plan my include eliminating debt, and building an emergency fund, and then some more long term savings. Frankly this is something that everyone should do, but few people do. Tell your co workers that you have no debt and watch their heads explode.
In our case, the wife and I eliminated our debt a few years ago. In addition we keep a small amount of money in savings for emergencies, and keep about 6 months of expenses in an investment account. This should (and did) cushion us against disaster if one of us lost our employment.
Another important aspect is to be aware of how your benefits work because loss of benefits can be an issue, especially if you have health issues. Being able to pivot from your benefits to your spouse’s benefits by working with HR is valuable and you should be able to do this. Interruption in medical coverage is a thing that can come back to bite you.
If you want to understand more about how to get financial affairs in order, I would recommend checking out folks like Mr Money Mustache and the Millennial Revolution folks. You may find some of the things they have to say unpalatable, but I can assure you, they know their shit and they live it. If you want someone a little gentler, then try Dave Ramsey.
Health
This is the second highest and more long term risk that we face. Health issues can really screw us if we are not careful. The first thing to do is an honest assessment of your health. Are you healthy? Are you taking drugs for a chronic condition? Do you keep fit?
You don’t have to be special forces fit or anything like that but can walk a few miles without suffering painfully? Can you carry a bag or backpack with 30lbs of weight for any distance? If the answer is no, then we have to make a plan to get you there.
The first thing I would suggest is regular doctor and dentist visits. Preventative maintenance beats emergencies any day of the week. I can tell you from first hand experience that a colonoscopy can prevent colon cancer. I might not be here today if it was not for a colonoscopy. It cost be about $1k for the procedure, but I guarantee that not spending that money would have cost me 100x that and my most likely my life.
Get fit, and get off as many drugs and you can. I suffer from three chronic conditions that require drugs and for the past few years I have been working at getting off them and getting healthier. It is a slow process but the process is working. However, you also need to plan to cover any drugs you do need in an emergency.
Location
This is the factor that most people consider when prepping, but it is the lowest on my list of risks, with employment and health as my highest risks. The first and most obvious risk is access to your home - do you rent or do you own? If you rent, can your home be sold out from under you? This happens to people quite often, and is in essence a financial problem - do you have the means to find another home, and move within a month? This could be covered by the emergency fund we discussed above, but if you are living paycheck to paycheck, this will be much harder that it should be.
Once you have considered access to your home, what about your immediate environment? Are you close to man made hazards or natural hazards? Man made might be manufacturing facilities, or refineries, chemical plants, railway lines and the like.
Natural hazards might be woodland that can catch fire (California for instance) or areas prone to flooding (New Orleans), earthquakes, mud slides, and so on. Any cursory search of news articles over the 100 years will provide plenty of examples.
For me, I live in the heart of a major city, very close to a railway line, and major road. My risks will therefore include civil unrest, hazardous cargo burning or spilling and bad weather - it can snow a lot here. We also live in an apartment so we need to plan for the loss of our home or a move if required.
No comments:
Post a Comment