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lite.cnn.com - on gopher - inofficial
ARTICLE VIEW:
When too much feels out of control, make a just-in-case financial plan
By Jeanne Sahadi, CNN
Updated:
5:00 AM EDT, Tue September 16, 2025
Source: CNN
With so many unsettling things happening beyond your — or any
individual’s — control, it sometimes can help to proactively do
something concrete that would be helpful to you and your family.
Take, as just one example, the state of the US economy. There is no
shortage of and analysis. Is it in a recession, edging towards one, or
on the verge of recovering from one? Or — extra fun — are we in for
a protracted period of ?
Whatever the answers (which may only be confirmed — annoyingly — in
hindsight), you can take steps now to shore up your own personal safety
net to protect yourself and your family against potential headwinds and
unwelcome events.
They all come down to figuring out what is true about your life as it
is today. Here are four suggestions:
No. 1: Get clear about your spending
You may feel a little better if you quit doom scrolling and instead
begin “focusing on your personal economy, not the macroeconomy,”
said Douglas Boneparth, a certified financial planner and founder of
Bone Fide Wealth.
By that he means your household finances.
For starters, Boneparth recommends getting a realistic assessment of
how much your monthly outlay is for essential living expenses (e.g.,
housing, utilities, food, health care, debt payments) versus those
expenses that you could forgo if push came to shove.
The total for your essential expenses is what will give you a reliable
sense of how much you may want to set aside for emergencies like a
layoff — or, if that’s not possible, at least have available to you
(e.g., through a home equity line of credit).
How many months of living expenses you’ll need depends on your
circumstance: For instance, are you the sole breadwinner? Do you have
kids? Are you just starting a new business that won’t generate income
for a while? Are you working in an industry where it’s hard to find a
new job quickly? Are you likely to get some severance?
For most people, the range of living expenses they might want available
just in case might be anywhere from three months to a year.
If you’re a new or soon-to-be retiree, knowing what your essential
expenses are also will help you determine how much to have in a liquid
account that you can draw on for income when the market is down and you
don’t want sell assets and lock in those losses from your investment
portfolio.
No. 2: Review how insured you are
Unwelcome events — like illness, disability or death, or natural
disasters — will happen at some point. But no one can know exactly
when or who will be hit next.
That’s an argument for insuring against the financial fallout from
such events for yourself and those you (someday will) leave behind.
Whether you need a given insurance policy – and if so, how much –
depends in part on where you are today.
Take . It may be essential if your children are young and you still are
carrying a big mortgage or if you bring in the lion’s share of your
family’s income.
But if your kids are launched and your house is paid off — or you
don’t have kids and you only support yourself — you might not need
it at all.
Figure out, too, how much insurance coverage you have if you become
disabled and can’t work for a spell. This coverage is a must for
many, regardless of whether you support others or just yourself. Such
insurance will replace a portion of your salary over a specified period
of time. Often, employers provide some to you as part of your benefits
package, but you may be given the choice to augment it for a monthly
cost if you think you would need more.
Also consider whether your current policy sufficiently insures you
financially in the event of extreme weather events that could destroy
your home or possessions.
No. 3: Revisit how much risk you’re taking
US stocks have been doing very well. Despite plunging in the wake of
the April announcement of the widely criticized Trump tariff regime,
they have more than recovered, with the Dow, S&P 500 and the Nasdaq all
recently.
That trend won’t last, of course. It never does.
And that’s not a bad thing, Boneparth said. “You can’t compound
returns over time without (there being) volatility and down markets.
You have to be willing to go down 35% sometimes to go up 300% over
time.”
That said, how much actual risk you’re taking in your investment
portfolio today — in terms of your exposure to equities and
alternative investments like crypto or real estate — should match
your current ability and willingness to take that risk. “What felt
fine in 2020 might feel reckless in 2025,” he said.
For instance, those in their 50s and 60s are now five years closer to
retirement. You still have decades to be invested, assuming you live
into your 80s. But you don’t have decades to go before having to tap
some of your investments.
Or, whatever your age, you are now five years closer to a specific goal
that once may have seemed far off, like sending your child to college
or buying a house.
In addition to considering your time horizon, Boneparth said, the right
amount of risk to take has to strike a balance between a) how much is
needed for your investments to meet your long-term goals (eg, hiding in
low-yielding cash assets likely won’t cut it); and b) how much risk
you can handle emotionally without panicking when a bear market or
recession hits, or stocks drop like a stone in response to shock
events.
No. 4: Create a roadmap for those who will take care of your affairs
If you want your loved ones to remember you fondly, one thing you can
do now is compile a list of all the locations, passwords and account
numbers for your insurance policies, credit cards, email and social
media accounts, as well as bank, brokerage and retirement accounts.
Also include contact information for the people whom you’ve dealt
with in relation to those accounts and policies.
But keep it all in a secure location.
“I have a letter in our safe called the death note,” Boneparth
said.
The idea isn’t to be morbid. It’s simply to minimize the time and
frustration of someone else having to manage your digital and
non-digital life after you’re gone or if you become too incapacitated
to handle things yourself.
Whatever you do, pace yourself
Reassessing and making changes to anything having to do with your
finances takes energy and time.
The key is not to get overwhelmed and think everything has to be done
all at once.
On the contrary, Boneparth suggests, aim “for progress over
perfection. Give yourself some grace and start with what’s easiest
for you. Get that win. Then (that can help) build momentum.”
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