I generally have a very mellow personality, which has its advantages and disadvantages. I rarely get angry, but I also rarely get very excited. I recently found out that my job responsibilities at work would be changing drastically. I told a good friend about it over lunch.
“How do you feel about that?” he asked me. I told him that I felt mostly neutral and a little bit excited. He responded “So basically the same as you feel about everything.” Then I punched him in the face. Actually, I thought it was pretty funny because there is a lot of truth to it.
When it comes to money, however, I think I have a wider range of emotions. I am very motivated by it, and I worry way too much about having enough of it. This type of thinking can be seriously unhealthy if it’s excessive. All of my family’s needs and most of our wants are met, and yet I often find myself anxious about not having enough. My wife calls this my financial anorexia. That’s a whole separate topic by itself, but I have found a few helpful coping mechanisms.
What’s the worst case scenario?
This is an important question to ask ourselves. For us worriers, we are constantly asking “what if this,” “what if that.” There is an infinite range of “what ifs” that we can ask. What if I don’t get a raise? What if the plumber overcharges us? What if my insurance rates go up? Rather than spend our time asking ourselves these questions, we ought to get to the bottom of it and ask “what is the worst possible thing that could happen?” (financially speaking).
I could die tomorrow
But then my wife becomes a millionaire, so that’s not necessarily the worst financial disaster that could happen.
I could lose my job
We have at least a 6-month emergency fund. We could live comfortably for that long while I look for another job.
A family member could have a serious accident
We have medical insurance. We’d have to pay the 20% coinsurance up to the out-of-pocket maximum, but we could do it.
We could have a surprise pregnancy making my wife extremely sick and have to pay for in-home care
She was very sick for baby #3, and taking care of the 2 we already had only made her worse. If we had another, she wouldn’t try to do it all on her own again. That would cost us mucho dinero for house help which wouldn’t be covered by insurance.
What if all of the above happened?
What if it all of these happened in the same week (except for me dying)? I lose my job, my son gets hit by a car (non fatal), and my wife gets incapacitated with hyperemesis?
While this scenario is unlikely, we could always move closer to family. Both Amanda and I are extremely lucky to have loving and supportive parents who would probably love the opportunity to be closer to their grandkids. If it came to it, we could also probably temporarily move in with them while we took steps to get back on our feet.
What if I don’t save enough for retirement?
What about the worst cast scenario when it comes to retirement? What if for some reason I’m not able to save enough money to support the lifestyle I want to have when I’m older? The worst case scenario is that I’ll have to settle for a lifestyle other than what I was hoping for. But that might not be so bad…
My wife likes to work
I have grand visions of travel, relaxation—and of course—no work. My wife does not share my vision of retirement. She sees it as her time to pursue her dreams. Though she teaches violin to a few students and spends some of her time pursuing what she loves, most of her time is dedicated to her MOM job.
She has so many other ideas about education, child development, and music that she would love to pursue. Once the parental obligations are not as demanding, she plans to pursue her career passions at full speed. I don’t plan to be entirely dependent on her, but knowing she’s going to be happily pursuing her interests and making money helps me relax a little.
I got skillz
Even if my wife weren’t planning to work into retirement, I could always keep working if I had to. As a CPA, I could do taxes and financial consulting, which I enjoy. Having something to fall back on gives me great peace of mind.
We could always move to Nicaragua
Moving abroad to enjoy retirement is becoming a popular option for baby boomers these days. Social Security wages can go a lot further in countries such as Mexico, Panama, & Belize. Both my wife and I speak Spanish, and I think it would be an awesome adventure to do something like this.
It all works out
The bottom line is that somehow we all figure out how to make it work. It may not all go according to how we plan, but that’s life. My mom used to say that “Everything works out. And when it doesn’t, it still works out.”
What’s your worst case financial and retirement scenario? Is it worth the worry?
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