I am financially planned "up the ying yang." It is for financial reasons, of course. But that planning gives me more than just financial benefits. I get more from being insured against this, that and the other* than just the protection of my financial assets. I get more from having several backup layers to my income** than just the provision of secure cash flow. I get more from keeping my baseline expenses well below my income*** than just the creation of a large surplus for discretionary spending.**** What all this planning gives me that cannot be measured in dollars is peace of mind. What I call the chuckle benefit of financial planning. Here is what I mean.
Last week, I took my old blind dog Little Bit (of Trouble!) to the vet for her wellness exam. The doc found a mammary gland tumor that requires surgical removal. So just to know what to expect, I asked about how much. About $700, the vet said. Okay, I said. No sticker shock. No stress. The chuckle benefit at play.
We are having 16 new windows installed at the house. I brought in my handyman guy for an estimate on the installation itself. Between $800 and $1000, he said. I looked at him and nodded. He started to defend his price. I stopped him. You do not see me freaking out, I said. It is okay, I said. No stress, no worries. The chuckle benefit in action.
Last December, I had one of those LifeLine screenings done for no money out of pocket (which is another story). When I showed the results to my doctor, he advised getting a carotid ultrasound test at the hospital. Even though I would be on the hook for 20% of whatever the test costs, I did not even ask how much. Moneywise, when I get the bill that will be just another chuckle.
The financial planning I have set in place shields me from any sort of unexpected expense stress. My discretionary fund will cover Little Bit's surgery. Our home repair fund*** will pay for the window installation. My health expense reserve***** will defray any medical out-of-pocket costs I might have. It has all been covered in advance so that when an unexpected expense crops up all that is left for me to do is to chuckle at yet another curve ball thrown at me by life.
My financial planning makes it possible for me to enjoy one of the great benefits of being wealthy without actually having to be rich. It is not about being able to afford anything I might wish for -- because I cannot. It is about not having to worry about money -- which I do not. And that, as they say, is priceless.
The takeaway: The peace of mind that comes from being in financial balance is well worth striving for. Every new (or even current) major expense or payment commitment needs to be screened through that mental filter. Will I still be in financial balance if I go ahead? Or am I robbing myself of my chance for financial freedom?
* My Stash-Shielding Insurance:
** My Six Lines of Financial Defense:
*** My $18K Annual Baseline Budget:
**** A Discretionary Fund, Not a Discretionary Budget:
***** Taming My Health Care Costs Monster: