In conversation with a neighbor the other day, I learned that my neighbor had purchased a second home so that the young family could get away for long weekends or nearly every weekend, for that matter. In our discussion, the neighbor mentioned that he found his two large mortgages somewhat burdensome but that it was well worth it to have both places to enjoy. The conversation turned to the situation of another neighbor who had recently lost his high level position with a national firm, with my neighbor saying that he wondered how the jobless neighbor would handle his family’s expenses.
When I asked the obvious next question – what would YOU do if you lost your present employment – my neighbor just looked at me. The next words out of his mouth were “I never thought about that.” Wow.
It is funny how human nature, well aware that things are constantly changing, so often plans for the future based on the assumption that the way things are at this moment will continue. We see it in computer programming that provides fully for the most common case – the path through the middle of the field – but fails to adequately foresee and handle what happens when one steps out of that path. We see it in our consumption patterns, getting what we want the moment we want it, even if we need to borrow to get it and depend on our circumstances remaining the same or improving if we are to pay for it.
When I asked my neighbor what would happen if he were to experience a significant change in circumstances – a job loss, temporary disability, divorce, a lawsuit – he said that he probably could not manage since he was fully leveraged and did not have any room for additional demands. At least he is thinking about it now and perhaps will have a plan in place before something happens to upset his financial apple cart. Even if it doesn't, that plan will let him sleep better at night.