“Go to the ant, you sluggard; consider its ways and be wise! It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest.” – Proverbs 6:6-8
Anticipating the unexpected is never easy. Certain economic events are beyond our control. We can’t fully predict them nor prepare for them. Yet, if we pay close attention to God’s word, it encourages us to observe and anticipate certain “life changes” and then to prepare accordingly.
The ant is a great example for us to follow. It recognizes that cycles of plenty and lack occur, therefore it stores its provision during the season of plenty, knowing that it will have to tap into those resources during the winter season of life.
So what unexpected, yet probable, economic life events should we prepare for?
- Job loss: if your household currently has two incomes, could you make adjustments to live on one salary and save the other?
- Complete income loss: start a 6-month living expense fund you could tap into in case you experience a complete income loss.
- Health issues: medical insurance, although great, will rarely cover 100% of your medical expenses. Taking advantage of the Health FSA option at work is a great way to create that extra pre-tax protection. Just make sure that you don’t overestimate those needs since with FSA, if you don’t use it during the year, you’ll lose whatever you have left over.
- Transportation: cars do break and wear out. Set aside a monthly amount towards your car replacement fund. Once its time for a major repair or a complete replacement, you’ll have cash set-aside specifically for that purpose.
“True commitment will always be tested by the unexpected. No matter how well you plan, something unexpected will inevitably arise.” - Steve Smith, Finicity
If you lost 100% of your income, would you be able to survive for a period of 3-6 months? If the answer is no, take a look at your budget and make adjustmnents in order to start building your 3-6 month emergency fund .
"Failing to plan is planning to fail. "