Saving & Investing
Life events and unexpected financial consequences
March 05, 2014
Amy Chain: Okay, so let's start with a question from Steve from Spring City, Pennsylvania. Steve, you're our neighbor. Thanks for tuning in today. Steve asks, "What life events are most likely to surprise us with unexpected financial consequences?"
Chuck Riley: Well, Amy, truthfully, any life event—getting married, losing a job, having a baby—any life event can lead to unexpected financial consequences.
Just, for example, my wife and I just bought a house last summer, and as many times as I've had to shovel the driveway with this winter that we've had in Pennsylvania and New Jersey, I am seriously considering buying a snowblower. That was not in the budget when we were putting together our finances for buying this home.
Amy Chain: We'd all love if you did because it would guarantee no more snow for us.
Chuck Riley: That would be great, exactly. That's exactly what happens. Yeah, and I'm not a snowblower guy. I like to shovel and everything, but it's really, it's been that bad.
But seriously, the event that really causes the biggest financial and the biggest unexpected consequences is the event that you don't prepare for. And that's the great thing about financial planning. That's one of the things that I love about it is that you can plan for what you think is likely or could occur, or will occur. You might not know the exact day and time that an event might occur. But you can have a pretty good idea of what will occur and take steps to prepare for that ahead of time.
Amy Chain: So short of not having the money for something unexpected, what are some of the other consequences that might come up that people might need to think forward about?
Chuck Riley: Well, I think it's really having a plan and taking a step back when you're not in that kind of crisis situation, whatever the unexpected event was. Kind of taking a step back ahead of time and coming up with a plan. Being intentional I think is the biggest thing that folks can do to be prepared.
We all know things we can prepare for such as retirement and college, but you really have to take some time to come up with a plan, determine what path you're on, where you want to go, and then have a plan to get there.
Amy Chain: That's great, thank you. I'm going to stay on that topic. We have a question from Dimple in St. Louis. Dimple asks, "What is the single most important thing we should do to make sure that we ensure our financial well-being?"
I think you already alluded to it.
Chuck Riley: Yeah, I did, yeah. It's really having that plan. I mean there are certainly a lot of different things about whether you're living below your means, watching your expenses, investing in an investment portfolio that you're comfortable with. But it all starts with trying to figure out where you're going and where you're headed and how's the best way to get there before those things occur.
Mary Ryan: And it's hard to say, but if you have one thing in specific that you would do, there's so many things that, again, it's, as you were saying, a number of different topics that you could look at and make sure you're covering.
Chuck Riley: Yeah, and it depends on the individual.
Mary Ryan: Like insurance.
Chuck Riley: Sure, absolutely, absolutely.
Mary Ryan: Yeah, all of that. Estate planning.
All investing is subject to risk, including the possible loss of the money you invest.
Vanguard Asset Management Services are provided by Vanguard National Trust Company, which is a federally chartered, limited-purpose trust company operated under the supervision of the Office of the Comptroller of the Currency.
Advice services are provided by Vanguard Advisers, Inc., a registered investment advisor.
This webcast is for educational purposes only. We recommend that you consult a financial or tax advisor about your individual situation.
© 2014 The Vanguard Group, Inc. All rights reserved. Vanguard Marketing Corporation, Distributor.
Anticipate the unknown with prudent financial planning
How can you try to remove the "un" from "unexpected"? Chuck Riley from Vanguard Advice Services™ and Mary Ryan of Vanguard Asset Management Services™ say a flexible, well-prepared financial plan with an eye to the future is a good place to start.
Other excerpts from this webcast:
- All investing is subject to risk, including the possible loss of the money you invest.
- Vanguard Asset Management Services are provided by Vanguard National Trust Company, which is a federally chartered, limited-purpose trust company operated under the supervision of the Office of the Comptroller of the Currency.
- Advice services are provided by Vanguard Advisers, Inc., a registered investment advisor.
- This webcast is for educational purposes only. We recommend that you consult a financial or tax advisor about your individual situation.