My wife will occasionally make fun of me because I say some of the most random things. Things like “What would you do if we won the lottery…” or “Where would you live if you could pick anywhere in the world to live?” These type of questions aren’t generally tied to a conversation we’re currently having. They’re running through my head, and occasionally they pop out into the real world. To her it seems really random and quite funny.
(And no, we don’t play the lottery. There isn’t one in our state and even if there were we wouldn’t play!)
To me the “What If?” game can be a powerful tool in personal finance. The “What If?” game forces us to think about questions we may have been avoiding. It can help us realize gaps in our financial situation that need resolving. It’s a mental game that can help you test your preparedness.
Playing Financial “What If?”
- one of us lost a job?
- we won a million dollars?
- one of our parents got sick?
- we wanted to go on a European vacation?
- (she)/we were unexpectedly pregnant?
- we paid off the house?
- all of our investments became worthless?
- we only bought things we had saved for?
“What If?” Leads to Deeper Questions
Playing this questioning game leads to deeper questions that help us start to answer the original question.
Original Question: What if one of us lost a job?
Follow up questions: Could we handle that? For how long? What would we do? Do we have a plan? Have we saved up an emergency fund? How many months can it cover?
Original Question: What if one of our parents got sick?
Follow up questions: How would we react? Do we have a plan in place to assist in their health care? Are we emotionally prepared? Have we even thought about it?
Original Question: What if she was pregnant?
Follow up question: Ahhhhhhhhhhh!
Original Question: What if we paid off the house?
Follow up questions: Is that possible? How would we get to that point?
“What If?” Makes You Think Ahead
For me this is a great game for testing out our plans for the future. It doesn’t have to be structured event where we ask ourselves a certain set of questions every day. Sometimes you just have to let things pop into your head.
But to answer many of the above questions you need to have thought things out. If you lost a job, do you have an emergency fund? If you want to pay off the house, are you willing to sacrifice to do that?
In our situation I feel pretty good about most of our potential answers to these questions. But that’s just this set of questions. I’m sure tomorrow I’ll think of something else that I’m not ready for — that’s good, because then we can start to address it.