Updated on 04.02.10

Overcoming Bumps in the Road

Trent Hamm

As much as we’d like to believe it, our lives aren’t a smooth journey from point A to point B. Unexpected things happen all the time – we do our best to overcome them and move on, but sometimes “our best” results in some pretty challenging consequences. We revert to old, bad habits. We put ourselves in debt. We make really poor snap decisions that seem like the best option in the moment, but really aren’t.

How can we create a smoother path over those bumps? Here are five things you can do to smooth your path, no matter where it takes you.

Build an emergency fund
Simply having a cash reserve for emergency situations can be a huge difference maker when something challenging happens. Instead of panicking, selling off items, going into debt, or failing to pay and destroying your credit rating, you can simply go down to the bank, withdraw a little cash, and take care of the situation. Emergency funds help you through car problems, home maintenance emergencies, job losses, and countless other painful situations.

How do I get started? Open a savings account at your bank. Set up an automatic transfer from your checking account to your savings account, transferring some small amount you can afford each week. Try $25 or $50 or $100 – an amount you think you can handle. Then learn to live on what’s left in your checking and forget about the savings until a true emergency comes along.

Envision challenging scenarios
Imagine what would happen if you lost your job. What would happen if your car’s transmission failed? If your hot water heater failed? If your home burnt to the ground? What are your game plans in these situations? Most people don’t even think about it and just play it by ear, but by thinking of those scenarios a bit in advance, you can make a big difference with regards to how they resolve themselves.

How do I get started? Make a big list (twenty or so long) of the “emergencies” you can see happening in your life. Job loss? Check. Health crisis? Check. Home maintenance emergency? Check. Car emergency? Check. Think about each of these scenarios and imagine what happens to your life if they occur.

Solve those scenarios with “if/then” statements
Once you’ve envisioned all of the problems, it’s time to think about solutions – the “then” part of the “if/then” statement. You’re trying to come up not only with solutions for those problems that will eventually happen, but also with things you can start doing now to make those eventual solutions much easier to execute.

How do I get started? Consider each item on your list of crises. Imagine how you would handle that solution if it happened tomorrow. Come up with a plan in your mind for dealing with it. Then, imagine what things would help you solve the problem – an emergency fund, an insurance policy, and so on. Make a plan to implement some of these things in your life.

Profile your worst tendencies
How do you react to a bad situation? Most of us have a “crutch” or two that we rely on in tough situations. For me, it’s usually buying books – I fall into a “crutch” of buying a book to cheer myself up when I feel like the chips are down. For others, it could be a bad, expensive habit like smoking or drinking or overeating. Whatever your crutch is, it’s usually expensive and actually makes the problem worse rather than better.

How do I get started? Figure out what your crutch is, then seek out a replacement for that crutch. For me, the best replacement has been long walks. Instead of going to the bookstore and buying a book to be a balm for the bad feelings, I go on a long walk in my neighborhood, usually a few miles long. On this walk, I can usually calm my mind, think about happier things, and then often come up with a plan for solving whatever the problem is. When I get home, I feel much better and no longer feel like I need a “balm” to improve my mood.

Divest yourself of potentially bad situations
All of us have things in our life that are on the verge of causing problems. Bad relationships. Something that’s in imminent need of repair. A job that’s very tenuous. Those things eat up our minds and our energy and, often, our wallets, too. They’re simply poisonous, and they hold us back even before they have the chance to fall apart.

How do I get started? Figure out the bad situations in your life. Bad habits. Bad friendships that bring you down. Items in need of repair. A tenuous job. Figure out what you need to do to either improve that situation or divest yourself of it. Yes, this may mean ending a friendship or selling a car, but if these things are creating a net negative in your life, why are you keeping them around?

Preparing for the bumps in life makes it much easier to simply ride through them. Good luck.

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  1. Kristen says:

    My husband and I can attest to the value of planning like this, mostly because we DIDN’T do it. A pipe burst in our house, and the entire thing flooded (a 3 story townhouse). We had to gut nearly every room and rebuild. Our homeowner’s policy paid for the repairs, and gave us a tremendous amount of support through the whole process of cleanup, but I wish we had planned ahead a bit more.

    We ended up spending about $12,000 on our credit cards to do some “upgrades” at the same time we were doing the repairs (if you’re taking down the 20-year-old builder-grade kitchen cabinets to replace the wall behind them, it’s too tempting not to replace the kitchen cabinets and countertops).

    But we made some bad decisions along the way. Looking back, I think we should have taken a few days to weigh our options before we hired a contractor to do the job. We decided to accept the recommended company from our insurance company through a program that allowed our insurance company to pay them directly for the work. We ended up with less craftmanship and care in the work than I believe we would have gotten from a contractor who knew they were being paid BY US.

    Trent’s advice is good, not just from a financial standpoint (I still believe the $12,000 in upgrades was worth it), but we would have benefited from having an “emergency plan” ahead of time, one that at least reminded us to sleep on it for 2-3 nights before we committed to anything. Hiring our own contractor with an interior design person on staff would have greatly improved the bang for our buck, so to speak.

  2. Peggy says:

    Many (definitely not all, as Kristen’s story attests) of the things that we commonly think of as emergencies can be anticipated.

    Some online research can tell you when your appliances, roof, etc., can be expected to wear out. Ideally, we’d then divide the estimated replacement cost by the number of months left in each thing’s useful life and start setting that much aside in an “escrow” or “replacement” fund.

    Ideally. I’m not doing it, either. Yet.

  3. kristine says:

    wow Peggy, what a great suggestion! I am not a homeowner yet, but I will definitely do this.

  4. Clayton says:

    I love the escrow idea. It puts into words what I’ve been doing for a while. I take a very educated guess on yearly costs. Car upkeep, vacation, taxes, etc… Things that are a large chunk of money at one time.

    I add it up and have it drafted into a money market account every month and then when I go to fix my car, I just empty the money I need and it’s quick, easy, and painless because I planned ahead.

  5. Shevy says:

    Maybe it varies, depending on where you live, but I’ve been in Kristen’s situation (twice!) and neither time did I have a choice in the restoration company or contracters that were used. The insurance company made that decision.

    I did like the 2nd restoration company better though, and did make a couple of changes in the kitchen cabinets and their layout, and had them use subway tile instead of the cheapest possible 4″ squares. All in all, I think I paid about $600 out of pocket for the changes (including the electrician who moved the plug for the microwave and buying a combination microwave/range hood, plus a custom cabinet about 9″ wide where they were just going to put a blank piece of wood).

  6. David says:

    My wife and I live in a large city. I’m currently employed with the federal government and my wife is a student.

    We rent an apartment and don’t own a car.

    Beyond my getting fired, either of us getting sick, or getting robbed can anyone think of a bump in the road that we should be preparing for? I’ve spent some serious time thinking about it, and just haven’t been able to come up with anything else.

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