Planning Reassurance

Every other week or so, I make some calculations in my composition booklet in which I also write my daily thoughts and feelings, about our financial situation.  I first make sure that I am aware of exactly how much we have in savings even though it changes not from one calculation to another yet it does from one year to the next.  Next, I make sure I record the value of our home if we were to sell it, minus commission.  With that figure in mind, I estimate future income  from sources like cancer insurance and a dwindling Trust given to us by our parents....  all things must eventually come to an end which is the law of entropy at its best...  that states everything must decay over time.

Armed with these calculations, I first determine how much my wife would need each month, each year, each decade if I were to die today and she were to live to 97.  It is financially reassuring to me that if I were to die today, we have enough assets saved to pay her basic bills for the rest of her life, including a 3% increase in expenses each year which is not actually happening.

Once this is done, I calculate the state of our finances estimating the end of the Trust and look at our financial situation if I were to somehow live until I was 97 years old or another 25 years.  Actually, our Trust will end in about 5-6 years and in either scenario, we have enough funds to cover our basic expenses including some unexpected outlays of money which is not going to involve that much since we have a new roof and a new heat pump and 5 year old vehicles with less than 75,000 miles on them.

WHY DO I DO THIS?

To make sure that next year's budget reflects any negative changes in our finances.  For example, if our monthly expenses increase dramatically, our first line of defense is to reduce the amount of money we have budgeted for vacations rather than try to cut back on expenses.

I am trying as best as I can to make sure there are no surprises...  although, life itself is full of surprises.