by Kevin Janiec, CFP®
Doesn’t it seem like every time your financial plan starts working for you something unexpected pops up? My wife and I have been continuing to save for a future home renovation, but it feels like whenever we begin to make meaningful progress on our future goals, we find ourselves reacting to an unexpected expense in our current reality.
For example, we just had to replace the compressor in our HVAC system and repair the damaged drain pump on our washer machine. Shortly after those repairs, we learned that the biggest Ash tree on our property was subject to one of those “tree diseases” and likely needs to be cut down. This is all while the monthly costs as a young, social family are significantly inflated. So much for those new white kitchen cabinets and modern countertops that we were envisioning.
Fortunately, we’ve built sufficient flexibility in our plan, so the frustration of these inconvenient expenses will not throw our top priorities off track. For us, financial flexibility at this stage of our lives primarily comes down to these 4 steps:
- Build a cash cushion
- Systematically invest after-tax money into a brokerage account (in addition to retirement savings)
- Have access to timely potential financing
- Routinely discuss and adapt our priorities
We’ll break down each of these steps with greater detail in future posts. In the meantime, what steps have you taken to build flexibility into your financial plan? Oh- and did anybody else know about this Ash tree disease?
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