Why You Need to Consider Future-Proofing Your Finances

Without knowing it, future-proofing had got me here. To a place that I didn’t have to waste precious mental energy on trivial things like the cost of overnight parking or how a few days of takeout would affect our monthly food spending. 

I was able to focus all of my mental energy and strength on what mattered most at that moment. And being sleep-deprived and worried, I was going to need all the strength I could muster. 

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Why Is Future-Proofing Your Finances Important?

Future-proofing is about striking a balance.  Just like businesses can’t be solely focused on immediate issues, or future issues in order to survive, personally, we also need to find a balance between today and tomorrow.

I don’t want to live my life only for today never thinking about the future.  As a parent, that would be highly irresponsible of me. And I would argue it’s also irresponsible for those without kids too.

But I also don’t want to live a life of deprivation now because I’m always worried about the future.

One of the key components of future-proofing is to minimize stress. And while short-term stress can increase the immune system’s response, long-term stress can have detrimental effects on our health. Our longevity depends on our ability to future-proof our lives – whether we realize it or not.

Taking the time to future-proof your finances will decrease your stress levels and help preserve your health.

It can also help you focus your energy on what matters most to you. By having a financial plan that considers and protects you from future events you don’t have to worry about it anymore.  You can trust that you’ve done what you can to be prepared. This lets you focus on what is most important to you right now.

So future-proofing your finances is important in order to decrease your stress levels (and therefore increase your health) and to focus on what’s important to you right now.

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What is Future-Proofing?

Future-proofing is anticipating the future and preparing for it in a way that minimizes stress and helps to ensure long-term success. And although the term often refers to business viability you can also apply it to your finances and other aspects of your personal life.

I can’t predict the future. 

In fact, I often tell my students that if I could predict the future I probably wouldn’t be working as a teacher for various reasons.

But, even though I can’t predict the future (I believe that nobody really can), there are still things I can do now to minimize the stress of future events. 

Enter future-proofing. 

A balance between living for today and being ready for whatever life has in store.  And although you can apply future-proofing to all aspects of your life, I’m going to solely focus on the financial side of things.

Benefits of Future-Proofing

There are obvious health benefits to decreasing your stress levels by future-proofing your life. Here are a few more benefits of future-proofing your life financially that you may or may not have considered.

  • Peace of mind minor children are taken care of – having a contingency plan (a legal will) that includes how your children will be financially taken care of should something happen to you.
  • Sustainability of lifestyle – knowing that you are living below your means and can sustain your lifestyle should something catastrophic happen.
  • Control – there are so many things that are out of our control (case and point – the coronavirus pandemic and its impact), but future-proofing can help you be in control during these unpredictable times.
  • Smoothed out extremes – things are going to happen, both positive and negative. Future-proofing helps to smooth out the ride.

Examples of Financial Future-Proofing

In a way pursuing financial independence is a form of future-proofing. To be independent is to not be reliant on others or other programs for support. That’s important as programs (and jobs) can change and are something we don’t have control over. 

Here are some other examples of future-proofing your life:

This list is not all inclusive, and if you can think of other ways to future-proof your finances leave them in the comments below.

Focusing On What Matters

At that moment all that mattered was making sure my little guy was going to be okay.  He and I were back in the emergency room for the second time in a week. My stress levels were running high and were amplified by a lack of sleep.

The first time, I was told that due to a minor birth defect he would need surgery, just not right away.

But after watching him in pain for a week, I took him back to the emergency room and was fortunate to get him into surgery that day.

Due to his age, surgery meant an overnight stay.

But here is how future-proofing helped prevent my stress levels from escalating even higher:

  • Hubby was on parental leave when everything happened. He was able to stay with our toddler without us having to worry about work or taking time off.
  • Years ago I went back to school to get my teaching degree. During the pandemic, many of my friends who still work in my previous profession lost their jobs.  This would have been my reality had I not gone back to school. Throughout this whole pandemic, I was fortunate enough to not have to worry about my job.
  • When we decided to share parental leave with our second little one we increased our emergency fund.  We didn’t know what surgery would be like, but throughout the whole experience, money was not a concern. 
  • And living below our means has been part of our lifestyle for years. This gives us wiggle room for when unexpected expenses (such as parking fees and takeout) come up. 

Through this whole experience, we were able to focus on the health and safety of our family, while not worrying about our budget or if we would have the money that we would need.  

I can appreciate that this is a very privileged position to be in. And although my personal circumstance comes with a lot of privilege, future-proofing my finances also helps tip the scales in my favour.

Final Thoughts

Just like in business, there needs to be a balance struck between future-proofing and day-to-day operations. 

Don’t fall into the trap of being so focused on the future that you forget (or neglect) to live your life today.  Or the opposite, adopting a YOLO lifestyle without consideration for your future.

If you have not thought about future-proofing your finances before, it may be worth your time now to decrease your stress later. 

14 thoughts on “Why You Need to Consider Future-Proofing Your Finances”

  1. Oh wow, so scary! Sending healing thoughts to your little. The peace of mind that having some money in the bank, some flexibility and not worrying about losing a job is incredibly priceless! Glad you could take care of yourself and focus on your little one through all of this.

    1. Thanks Mel. He is doing so much better now and we are so relieved. Sometimes the benefit of the choices we make today isn’t felt until much later.

    1. Thanks NZ Muse, it was definitely a bit scary for a while. A crisis can really help you realize what your priorities are and future-proofing your finances can help you focus on those priorities.

  2. A little bit of thought today will pay dividends down the road! You’ve shared a lot of good ideas here. One other thing we’ve done is document our important passwords and bank access information so if one of us were to be incapacitated, our better half will be able to easily manage things.

    1. AL – that is a great idea. I’ve created a worksheet just for this purpose and think that it’s so important. You never know when something might happen and its crucial to have access to all your accounts.

    1. Thanks Bella – we are also so relieved. Future-proofing our finances has helped decrease our stress levels so much through this.

  3. Sorry to hear your little guy had to have surgery, glad to hear he is doing well now and he was able to have it earlier. I remember for my first baby the doctor said he might have something called pectus excavatum, I went into a spiral and probably spent about 1 week in anxiety (even more anxiety than usual in post partum) until we saw the pediatrician (he’s okay he doesn’t have it). It’s so interesting how as a parent everything changes when the health of your little one is at stake.

    1. GYM – I completely understand the postpartum spiral – your mind goes in all directions, not all of the pleasant. Just another reason it was nice to not have to worry about our finances at that time.

    1. Dividend Power – Planning for the unexpected definitely helps, that’s also a benefit of an emergency fund. Sometimes we just can’t see things coming.

  4. Future proofing is so important. Especially with the economy the way it is. .It feels harder and harder to do.
    I try my best to both save and plan for the future as well as still have enough to do the things I want today. It’s definitely not an easy struggle and one that keeps me up late at night (especially with the likely recession)

    1. Anwar – you’re right, with everything costing more and more lately future proofing is becoming more difficult. But every little bit helps, so even $20 a month towards an emergency fund or investment account can really start to add up over time. And if there are months were you can contribute more than so be it. Sometimes the habit of the transfer is just as important as the amount. Hopefully this can help you sleep a little better at night.

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