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When people feel like they have a lot of control over their lives, uncertainty is a mild irritant at worst, and a fun challenge at best.  The uncertainty of what you’re going to do when you wake up in an exotic hotel and your vacation day is completely unplanned is one of life’s joys.  However, the uncertainty of what you would do if you lost your income, or someone got sick, or your expenses suddenly increased is one of life’s great anxiety-inducers.  The global pandemic has both made us more aware of the uncertainties that are always present, as well as introduced a threat to our lives over which we can only have a small amount of control.  Both of those things have increased most people’s anxiety over the past eighteen months.  We haven’t even touched on ever vitriolic political in-fighting, mega droughts in the US and around the world, an ever-warming planet, and fires that can be smelled two thousand miles away for those lucky enough to be that distant, to name just a few.

Our brains have yet to evolve beyond the point where they’re worried less about where the bear is and more about where the blueberries are, so what are we to do, those of us still wired to worry?  What are we to do in times that seem so uncertain, and where the future looks so much less predictable than it used to?  How do we combat the financial anxiety associated with threats to our well-being?


That’s not just a topic header, that’s also the answer to the question.  We know of no better tool for reducing anxiety and combating the effects of uncertain outcomes than financial planning.  There are a lot of stress reduction techniques, and we know there is value in using simple, routine ways to lower your stress levels.  However, if you are not addressing the root cause of your anxiety, then stress reduction techniques can only last so long and go so far.  We would argue that very few of the anxieties that keep us up at night do not have a financial component.  There are some that are not primarily about finances, especially those related to our health, but even those usually have some financial component whether they involve a reduction in income, or an increase in expenses, or both.  When you boil so many of our worries down, they relate to either not enough income or too many expenses.

To reduce and possibly eliminate the stress of financial uncertainty from your life, defining what it is that keeps you up at night, quantifying its possible effects, and then taking action to reduce or eliminate those effects is the best way we know to reduce that uncertainty.  Most financial planning is done during relatively easy moments, where you can focus on maximizing your income to save and invest for your goals while you feel your future is relatively certain; you’re going to have this income, it’s going to increase by X% per year, you’re going to save Y% from it, and those savings are going to grow by Z%, year after year until you retire.  However, financial planning is just as effective in answering the question: “What happens if something goes wrong?”


For example, the obvious worry not only for those not yet retired, but also for many retirees is what would happen if you were to have your income reduced, or outright lost your job or some other major source of income?  Some of the questions going through your head may include:

Could I still maintain my current level of spending, or would I have to reduce it?

  • Which expenses could I reduce or eliminate?
  • Which expenses, if any, would actually increase?

How would it impact my financial goals? 

  • Would I have to delay or eliminate some of them?
  • Which ones?

How much of a cash reserve would I need to survive an income loss of a given amount for a given amount of time?

  • Do I already have that much?
  • How long would it take to build my reserves to that level?

What would happen if I were forced to take a job that paid less?

  • How would that affect my financial goals?
  • What changes would I have to make to still be able to maintain my lifestyle and still achieve my goals?

These are some of the many things that would be considered, and SHOULD be considered, for any type of job loss planning.  Anyone who has ever worried about having their income reduced can relate to all the thoughts that go through your head, all of the imagined hardships and sacrifices.  You can absolutely feel the stress of knowing life is going to change for the worse, but imagine if you knew you didn’t really have to worry at all.  Or imagine that you already had a game plan for this possibility and you knew you would be able to manage it.  Now imagine how much  more sleep you would get by knowing you did not have to worry as much.  Do not underestimate the adverse health effects of prolonged stress and sleeplessness, and do not underestimate the benefit of taking action to reduce or eliminate those potential health effects before they ever happen.


In a lot of ways, increased expenses are the other side of the coin from decreased income.  At the end of the day, they both result in not enough of one and too much of the other.  However, the uncertainties associated with increased expenses can cause anxiety that feels different from the uncertainties around a reduced income.  For example, anyone who is worried someone in their family is going to get sick has both the worry around a loved one’s physical well-being as well as the potential for financial insecurity should healthcare expenses increase.  In this situation, as in many others associated with increased expenses, some potential questions to answer include:

What is the specific situation that could increase my expenses?

  • What are all the expenses that may increase as a result of this situation?
  • By how much could the situation increase my expenses?
  • Could I absorb those increased expenses and still save toward my goals?
  • Which expenses could be reduced and by how much?

What financial goals may be affected?

  • Would the solution be to reduce the financial target associated with the goal, or increase the timeframe I am saving for the goal?

Is it possible the situation leading to the increased expenses could also decrease my income, like if someone has to quit their job to care for someone?

  • By how much would it reduce my or someone else’s income?
  • Which expenses or goals may be affected by a reduction in income?

How much would I need to have saved in order to survive the increase in expenses and possible decrease in income?

  • How much would it cost to transfer some of the financial risk to an insurance company?
  • How much of the cost could be transferred and would I still be able to continue saving toward my goals?

Of course, just like with reduced income, we could go on and on and on with the potential questions to answer to better prepare you for a specific scenario that would cause your expenses to increase.  The process to create a game plan to help you overcome an increasing expenses scenario starts with your defining what it is that would cause your expenses to rise, and then looking at all the areas of life that scenario would impact.  By planning for that possibility ahead of time, you would know the likelihood of your financial security remaining intact should the feared situation arise, and you would know what you could do ahead of time to overcome any adverse financial outcomes related to the specific situation happening.  Despite not knowing the probability of whether or not something WILL happen, we absolutely have the ability to plan for what WOULD or COULD happen.

Nothing reduces anxiety like taking positive action.  Having a Plan B ready to roll should something happen is an extremely comforting situation entirely within our control.  Whether it’s the risks of a large phenomenon like a global pandemic, or a changing climate that affects us all, or something very specific to your individual income source, or the health of a family member, or any other potential thing that could go bump in the night, financial planning can help you be ready for that possibility and provide you the comfort of knowing you are prepared for what you fear.  Addressing the possibility before it arises gives you an invaluable head start should your fears be realized.  Now, we are not suggesting you go out of your way to find something to fear, but we are telling you that we are not just here for you in the good times, but especially in the times you need help, including before you might.

Editor’s Note: This article was originally published in the September 2021 edition of our “Cadence Clips” newsletter.

Important Disclosures

This blog is provided for informational purposes and is not to be considered investment advice or a solicitation to buy or sell securities. Cadence Wealth Management, LLC, a registered investment advisor, may only provide advice after entering into an advisory agreement and obtaining all relevant information from a client. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

Past performance is not indicative of future results. It is not possible to invest directly in an index. Index performance does not reflect charges and expenses and is not based on actual advisory client assets. Index performance does include the reinvestment of dividends and other distributions

The views expressed in the referenced materials are subject to change based on market and other conditions. These documents may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur. Data contained herein from third party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.

Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.