Sleep Better with Safety Nets

May 9, 2014 · 0 comments

Through the years, one of the best things I’ve done to help me sleep well at night is to build a series of what I call “safety nets” beneath me, my family, my business, and our assets.

pantry_photoHere’s a personal question: Do you, as a head of your household, ever feel anxious or nervous that you might make some type of bad decision or overlook some threat to your family or business that will cause a big financial loss or put them in harm’s way? Do you ever feel the weight and burden of managing so many multiple priorities — and sometimes stress out a little — when you wonder “what if I forget something, or what if I make a bad decision?”

Well, I think like that sometimes, and I’ve discovered I can find peace from those kinds of thoughts by building safety nets underneath every potential “weak spot” I can identify. Here are some examples of safety nets, both big and small, that I’ve used to help create a sense of security in my business and for my family:

  • Insurance
  • Having an external power generator for my home
  • Having an external power generator for my business
  • Emergency fund savings accounts for 3 months of business and/or personal living expenses
  • Backup sump pumps
  • Inventorying and managing backup consumable supplies at the business and at home
  • Having a directory of every repairman, service person, vendor, and supplier we use
  • Escrow accounts for state and federal taxes, real estate taxes, and medical expenses
  • Having a food pantry that is well-stocked with essentials
  • Essential clothing, cash at home, and a last will and testament

These are just examples of my safety nets. Yours might be entirely different. But I will say this: As you begin to build a foundation of safety nets, you’ll find yourself sleeping better because of the increased security you feel… and you’ll win the respect and admiration of your employees and family because they’ll see your ability to plan ahead for unexpected contingencies.

I know in many ways this information about safety nets seems a little bit simplistic and sort of obvious. But… are you actually doing these things? Have you ever purposefully taken the time to think about where you could eliminate risk in your life by implementing your own personalized list of safety nets?

Can I share a very personal mini-disaster that recently happened to me, in hopes that it might motivate you to re-think the relevancy of your safety nets?

For many years, my CPA and I carefully pre-planned my business and personal income taxes. I hate surprises on April 15th, and my preference is to pre-pay 100% of my estimated income taxes in advance. If I overpay a little, that’s A-OK with me, because I’d rather get a refund than have a big amount due to the IRS on April 15th. For the last 14-15 years, I always had prepaid enough on my quarterly estimates, so that I didn’t have a “tax due” balance to the IRS on April 15th — until this year. Something went wrong, and neither my CPA nor I realized that my quarterly estimated payments would fall far short of the actual income tax I owed.

This year, I was presented with a tax bill of over $40,000.00!! Well, after I picked myself up off the floor, I remembered that although it was a painful amount of money I would soon be parting with, the good news was that I had more than enough cash in my escrow savings account that was set aside and maintained just for income taxes. It had been years since I’d had to dip into that escrow account, but knowing that it was there when I needed it was a real blessing. My escrow account was an important safety net that I had planned for, long in advance.

And that’s how safety nets work best. For many years, I had regularly added money to my income tax escrow “safety net” savings account, and I never needed it. But then… after 15 years of saving, an unexpected tax bill arrived, and my safety net was there to bail me out — and boy was I ever happy I had it.

I hope this article will result in you pausing to think about how a simple-to-implement system called “safety nets” might save you some grief and help you sleep better at night.

My name is Mike Stevens, and I am a printer.

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