"Money File"-Watch Out For "What If"
Wednesday, September 26, 2007SUZANNE PRATT: In the "money file" tonight, the role of "what if" in your financial planning. Here's Chuck Jaffe, senior columnist at Marketwatch.
CHUCK JAFFE, SENIOR COLUMNIST, MARKETWATCH: Every time the national headlines get excited about some huge lottery jackpot, people get interested and start to play "what if?" They're thinking about how a big chunk of money would change their lives and the things they would do if they were suddenly flush with cash and opportunity. It's fun and it can actually help people prioritize their financial goals.
But the far more frequent news headlines are the much less happy ones. They are the stories about tragedies or day-to-day loss, about everything from natural disasters to recessions and layoffs, the ones which make you say, there but for the grace of God go I. The next time you feel that way about a news story or a tale you hear from a friend or neighbor, go ahead and play "what if" as if divine intervention had not spared you from the bad situation. It's not just that you will be discussing what would happen in the event of a job loss, a health problem or something much worse. It's that you'll be evaluating your ability to withstand such a crisis financially and perhaps you'll find the potholes that could throw you off the road to your financial dreams.
Nobody wants to think of the negative stuff, but it's a lot more likely to happen than that big lottery win and it has the same power to forever change your life. So, have the hard discussions, the ones that aren't just wishful thinking. Being prepared for the bad stuff doesn't make it any more likely to happen. It just makes it less likely to be so bad if it does. I'm Chuck Jaffe.
