Enjoying the Journey by Having a Plan

My husband will be the first to tell you it’s not uncommon for me to spend an evening obsessing over excel files with my multiple levels of backup plans, specifically different levels of budget spending. In 2009 I was laid off for the first time, and while I was able to bounce back in 2011 and land a solid paying job, I’ve watched as many other hard working friends and coworkers struggle through layoffs. In 2009, I saw friends with house payments, car payments and credit cards they now struggled to pay off. What I learned early, is that you can work your butt off, but unfortunately that doesn’t prevent us from being impacted by an unseen event such as losing a job, medical expenses, car repairs, home repairs, and the like which can quickly add stress into our lives when unplanned. I’ve been able to navigate the last decade without a significant event depleting my savings, and I’m appreciative for the lesson I learned so early in my career.

2020 has been especially challenging, so maybe you can sleep better at night if you have a plan. Maybe you’re going through a challenging period right now and need to create that plan to keep focused and optimistic that you will get through this and be stronger on the other side. When I was laid off in 2009, it gave me the opportunity to get involved with a volunteer organization that provided me the skills and education I otherwise would never have gotten for free. That opportunity helped me come back that much stronger and ready to excel in my career and I will forever be grateful for that experience, although it was difficult to see that at the time.

What Could Go Wrong?

Bare with me while I channel through my engineering brain for a moment. When designing a new product or service, we typically will create what we call an FMEA (Failure Mode & Effects Analysis). Simply put, we thinking about all the things that could break and rate them by how likely it is to occur and how bad it would be if it did. So if we were to apply a similar but simplified concept to life, we may find ourselves creating a chart similar to the one below.

I assume that you may categorize these events differently depending on your own unique situation. For example, one of my friends who recently started a podcast talks about his experience being laid off from seasonal jobs. If that sounds familiar, your likelihood of being laid off could be much higher. Depending on how much savings you have or how dependent your lifestyle is on your paycheck, you may change the severity of losing your job. If you have a side income for example, that would lower the impact of being laid off since you have alternative income streams. Maybe you’re the solo earner for your household, and your family is depending on your paycheck for dinner on the table.

Challenge yourself to add the opportunities to this chart as well. Is there a chance you might move to a new city for a promotion, but the cost of living is higher in that new location? Or maybe that new job might result in a longer work commute, increasing your transportation costs, require different clothing, or the need for childcare that you previously didn’t have.

What Do We Do About It?

Ok, so you’ve created your chart and understand what potential “failure modes” there are to maintaining your lifestyle and relationships. Now it’s time to create a plan for each of those events, starting with the ones with high likelihood and high severity. You’ll notice in the chart that I created a color coding to highlight the areas I choose to focus on first. You may apply a different priority, or may decide to go deeper and assign a 1-10 score for occurrence likelihood and a 1-10 on severity. After multiplying the two scores together, you may decide anything above a score of 50 requires you to have an action plan. Check out the excel template at the end of my post to make your own.

Your plan will ultimately be unique to you, but you may decide to include ways to develop new skills, create additional income streams, reduce your expenses, or recognize the need to appreciate your friends and family more. Referencing my high likelihood and high impact category, you’ll notice that multiple items can be covered through an emergency fund (ex: unexpected bills such as home repair, medical, or vet). I also anticipate that with the pandemic, there is a high likelihood that I’ll need to increase my transportation costs when I start commuting again and that before we have a vaccine available for children, access to childcare is at risk.

Examples of Action Plans

Emergency Fund: Plan to have 3-6 months of expenses available to you so that if an unexpected expense comes up or you happen to lose your job, this will ideally help cover you until you can get back on your feet and avoid using a credit card to cover short term expenses. If you’re just starting off, save $25 or $50 a month and gradually increase as you are able to. As for access to your emergency funds, it may be beneficial to keep this easily accessible versus invested in higher risk opportunities, potentially forcing you to sell at a loss to access your funds. Personally, I keep half of my emergency fund in a high yield savings account, and the other half invested in bonds to keep up with inflation.

Child Care: Even before the pandemic, our first day care center closed only a few months after my son started attending. Unfortunately, the building needed repairs beyond what the business owners were willing or able to cover, and we were scrambling to find help in a small town along with many others. Maybe you have a close friend or family that can help you. If not, are you or your spouse willing to stay home until a solution is available? Maybe you can negotiate a work from home condition with your employer if you don’t already have one. Working from home with kids is no easy task, so what will that look like for your family? Talk about the alternatives with your spouse ahead of time to make the transition smoother if you need to take action.

Increased Transportation Costs: During the pandemic, I’ve been commuting much less. I’ve been able to take this allocation of my budget and save what I’m not spending on fuel and car maintenance. However, if you’re not tracking your spending, you may get into a habit of spending this money on other items or may even sign up for a commitment like a car or house payment that requires you to have those funds available. Reflect on these potential changes and ensure that you have the budget to cover when life changes. You may find that your transportation methods fluctuate in price, such as increased fuel prices, and may want a plan for alternatives if you don’t want to absorb the additional cost. For example, you may drive a fuel efficient car, or live within walking distance of work so increased fuel prices have less of an impact. From when I graduated high school in 2005 to being laid off in 2009, gas prices almost tripped, so I’m especially sensitive to this one.

Divorce or Loss of a Loved One: It goes without saying that no one wants to end the relationship with someone they plan to spend the rest of their life with. Your action plan here may be taking time to discuss your relationship health and show your appreciation to your spouse. Maybe you make a plan to have one night a week where you focus on spending quality time together. In the unfortunately situation where someone may pass away, talk about plans for covering funeral expenses, mortgage payments, child care, etc. If only one person works in your relationship, it will be difficult to suddenly cover child care costs when your spouse previously was at home with the children. Even if you don’t have children, you may find yourself dependent on both paychecks to cover the mortgage which will be difficult for the surviving spouse to take on solo.

Loss of a Job – Control Expenses: My husband and both currently work, however we plan our expenses assuming one of us may need to cover all expenses in the event the other becomes unemployed. This reduces our stress during uncertain times, however so can laying out a plan for how your expenses will change in the event you become unemployed. Personally, I have an emergency fund budget that I would execute in the event of job loss so that I can maximize the length my emergency fund will last regardless of relying on unemployment checks. You may be tempted to consider actions such as selling your car, motorcycle, or boat, however remember that during a period of high unemployment, you may find more sellers of luxury goods than there are buyers, which will reduce how much your item is worth. Set the expectations for how much you’ll spend on groceries, fuel, spending cash, etc. Be familiar with what luxuries you have today that you are willing to immediately put on hold in the event of a job loss.

Loss of a Job- Grow Income: One way to plan for potential unemployment is to control how you would spend you expenses today and during unemployment. However, you could also evaluate opportunities to grow your income streams so you are less dependent on one paycheck to cover your critical bills. You could also consider taking classes or side jobs that challenge you to grow new skills that could be valuable when you need to find a new job or career. Some of my most valuable skills were ones I gained after being laid off and having more time to volunteer. Check out my post about three types of passive incomes to brainstorm some other ideas to could grow your income outside of your day job.

House Fire or Tornado (or another natural disaster): I live in the midwest where having your home wiped out from a tornado is not unheard of. People set up facebook groups to share pictures and belongings they find hundreds of miles away to help get them back to their owners. We’ve been lucky not to be affected by a complete loss of our home, but consider taking pictures of sentimental items or digitizing pictures. Consider investing in a fire proof safe that you can keep key documents in such as birth certificates, social security cards, etc.

Medical Costs or Chronic Illness: We can’t all predict what will happen to us, but we can control a few things like eating well, getting exercise, and sleeping. I continue to push myself to a healthier lifestyle, and my post about daily intentions for happiness talks about what has worked for me. We can also make a choice to invest into HSAs to reduce our medical expenses if they do come up. If you’re not familiar with Health Savings Accounts, I wrote about how valuable they are in saving money and recommend you learn for yourself.

Enjoying the Journey

At the end of the day, you can be a paranoid wreck like me and plan for all the terrible things that can happen, but it’s important to be patient and remember to dance in the rain. We will all have challenges in our lives, and will find our unique ways to work through them. I have often found that some of the best pivot points in life are when we are forced out of our comfort zone by something we can’t control, but we need to keep our head high and stay positive.

Reflect on What is Important: If you have some extra time recently, take a moment to reflect on what you want to experience and how you want to be remembered. You may find that once you have the basics covered, what you want to experience in life comes at a lower cost and suddenly you find less attachment to all of the stuff you were worried about maintaining in your life.

Be Patient with Yourself: You may just be starting off and still paying off debt while building an emergency fund. I lived paycheck to paycheck for years before I made a decision to build up an emergency fund and it took a long time to do it. It started at $50 a month, then $100, and then $200, but it didn’t happen over night. Maybe you just started a new business or learning a new skill. Work hard and give it time – you will eventually see the results as long as you keep investing in yourself.

Don’t Forget to Take Risks: While it is helpful to lay out a plan for all the things that could go wrong, this ideally will challenge you to be comfortable taking risks. Some of the biggest gains in life may come from pushing yourself out of your comfort zone. One of the best decisions I ever made was to pack a suitcase and move half way across the country after high school to pursue opportunities that otherwise I wouldn’t have been able to take advantage of. I had countless things that could have gone wrong, but so much to gain. When we remind ourselves how little we really need, we can take on risks and worst case scenario, we will still be OK.

Enjoy Today: Have a plan for what you can control, and do your best to let go of what you can’t control. You may not be able to control a global pandemic, the people or the job industries impacted by it, but you can control how you react and plan. You can focus on building up an emergency fund and a plan for how you might need to use it. You can make a choice to challenge and grow your skills versus potentially looking at unhealthy alternatives to manage stress. 2020 is filled with countless things outside of our control – pandemic, elections, layoffs, isolation, illness, and more. Let’s focus on what we can control and do our best to enjoy today.

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(I post weekly on financial independence, minimalism, happiness, and being a mom)


Interested in creating your own chart to help you think through the key risks and where to focus on developing an action plan? I created a template you can download similar to the one below:

2 thoughts on “Enjoying the Journey by Having a Plan

  1. The chart will be helpful when planning for the contingencies of retiring early. I am concerned about falling into the trap of working “one more year” when the time comes so I need to try and be as objective as possible and this could help a lot with that.

    Liked by 1 person

    1. Glad this will be helpful for you! It’s easy to let emotions about uncertainty add stress or prevent us from making a change. If we can lay out a plan for high risk/high occurence possibilities, we can sleep better at night or consider making a jump we otherwise may shy away from.


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