What will catch you when you fall?
This is the most important question to ask yourself this week.
I hope that you are doing enough with your life that you will stumble and fall down. Life isn’t easy, and if it is for too long, you aren’t trying hard enough. Failure happens. And failure helps launch us to future growth.
But what happens when you fall and there is no one or nothing to catch you? It’s a lot harder to get back up.
So, in the spirit of doing more hard things, we must ensure we have the right safety nets in place.
Why are Safety Nets Important?
First, why are safety nets so important? As we’ve already established, you can try to fly higher when you have a net to catch you. It’s easier to reach for those hard things when you know they won’t crush you if you fail.
But safety nets are also especially important for women because of a few factors. For the same reasons we discussed when we talked about what every woman needs to know about retirement, divorce is often financially harder on women than men. Women also live longer.
What Safety Nets Do You Need?
In our post about how to assess your financial wellbeing, we went through several different safety nets.
- Health Insurance: Do you have health insurance? What is your maximum lifetime benefit under your current policy?
- Disability Insurance: Are you covered by a disability insurance policy through your employer? If so, how much and for how long will it cover you? If you aren’t covered, should you buy your own policy?
- House/Renters Insurance: Do you have the appropriate amount of home/renters insurance?
- Car Insurance: What are the policy coverage amounts for your car insurance? If your net worth has increased since you first bought the policy, you may want to revisit and purchase more insurance at this time.
- Umbrella Insurance Policy: Umbrella insurance is another good policy to have as your overall net worth grows. An umbrella insurance policy (typically) kicks in when your car or homeowners insurance (for example) policies have reached their max. Umbrella policies are generally pretty cheap, sometimes around $100-$200 for a $1,000,000 policy, so they are worth purchasing.
- Life Insurance: Do you have 10x your salary in a term life insurance policy? If you have dependents, this is the recommendation.
- Health Care Directive/Power of Attorney: Have you set up a health care directive and power of attorney in case anything happens to you?
- Will: Do you have a will that explains what happens to your property when you die?
Emergency Savings Account
You also need an emergency savings account, with between six and 12 months of your minimum household expenses available in cash. Keep it in a high interest savings account so that if you need it, it’s available.
Find Your Community of People
Even the richest, most protected woman in the world will have a tough time weathering a storm if she doesn’t have a caring community of people around her.
Develop friendships. Cultivate ties to your extended family. Find communities of those who enjoy doing the same things as you. (It’s good to have a work community, but make sure you find a community outside your work community as well.)
These communities will help you during the tough times.
Develop Mental Toughness and Good Health
You can have all of the money in the world, but if you can’t cultivate a good attitude or if you have poor baseline health, the tough times will be nearly impossible to get through.
The Bottom Line
When times are good, it’s easy to think they will be good forever. But, we all have tough times. So ensure you are using the time now to build your safety nets.
Whether it’s correct insurance, people, or your own wellbeing, prioritize these things now.