Life is unpredictable. Even if you’re a super-organizer and financial planner, there are things that will happen that surprise you. Some unexpected occurrences are fun and exciting, like winning a contest, and some quickly pull the rug out from under you, such as a sudden death in the family.

Financial Planning The 5 Ds

There is nothing you can do to prevent surprises, but you can evaluate risks associated with common unexpected events and make plans to manage them if they occur.

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In a world of unexpected occurrences, I am not suggesting you take a day to make a list of 100 random things that could happen and plan for them. That would drive a person crazy. I suggest making it simpler and planning for the 5 Ds – dodge, duck, dip, dive, and dodge… just kidding. The actual 5 Ds I advise you to plan for are the following:

  • Death
  • Divorce
  • Disaster
  • Disability
  • Debt

Sometimes even the best laid financial planning tricks don’t work out. Because of this universal truth, although it’s not always fun to think about the negative “what ifs” in life, it is important to plan for the unexpected.


Nothing hits harder than the unexpected death of a loved one. Like most types of insurance, term life insurance is something you never hope to use, but can be lifesaving if needed.

If there is anyone who relies on your income for survival, this could be a spouse, children, aging parents, etc. then you need life insurance coverage. Term life insurance is often purchased to cover funeral expenses, mortgage and debt payoff, college education costs, and as income replacement. It’s affordable, customizable, and the best way to plan for one of the biggest financial “what ifs” in life.

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Marriage is wonderful. I’m not saying that you should head into your honeymoon thinking you are going to end up divorcing that person. I hope you and your spouse are together forever; however, in the United States about 40-50 percent of marriages end in divorce. Just as you don’t plan on getting into an accident when you get into a car, you don’t plan on filing for divorce as you’re walking down the aisle… but everyone buys car insurance just in case.

Having separate bank accounts, writing a prenuptial agreement, and owning trusts are a few ways you can plan ahead to make the event of a divorce easier, should it ever come to that. Having separate bank accounts ensures both partners remain financially literate and are able to manage money on their own if need be. Documentation of how finances were maintained is always beneficial as well.

A prenuptial agreement isn’t just for celebrities. The main reason for establishing a prenup is for protection. There are many reasons individuals may want to protect themselves: the couple may bring very different amounts of wealth to the union, even if the total is relatively modest.

Or one future spouse may expect to receive a substantial amount through inheritance or a trust distribution. One member of the couple may own all or part of a business, or may anticipate earning a high income once he or she finishes education or training. All of these factors can affect the decision to pursue a premarital contract.

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People can also protect their assets by keeping funds in trusts. Assets placed in a trust established before marriage are typically treated as separate property. Trusts can be very complicated and I highly recommend you work with a financial attorney to set one up.

Lastly, if you believe a divorce is coming be sure to review your life insurance policy. Is your soon-to-be ex-spouse the primary beneficiary? You may want to think about changing that unless your split is amicable and you believe they still have your best interests in mind.


The word “disaster” can mean anything. This could be referring to a natural disaster such as a tornado, or something that has a devastating toll on you personally such as identity theft. The best way to financially plan for any type of disaster is to have an emergency fund.

While different insurance plans, such as home insurance, will definitely help in case of a natural disaster, you are going to need funds you can access immediately. Events like identity theft can cause credit cards to be maxed out and while the credit card companies will work to get your money back, nothing happens instantly.

This is another case in which emergency funds will help tide you over.

You never know when a disaster may strike. Something as simple as your refrigerator breaking while you are on vacation can turn into a disaster. Financial advisors recommend having enough cash in an emergency fund to cover three to six months’ worth of living expenses. This number isn’t feasible for everyone.

Determine how much money you can reasonably set aside each week and have it automatically deposited into your emergency fund account. Many employers allow paychecks to be portioned out into different accounts; if your employer does not offer this, you can likely set up these allocations through your bank online. You’ll rest easier knowing you have some money set aside for those just-in-case situations.

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According to the Council for Disability Awareness, over 1 in 4 of today’s 20-year-olds will become disabled before they retire and over 37 million Americans are currently classified as disabled. If you become disabled and can no longer work, not only does income slow or stop altogether, but expenses may increase due to medical treatments and arising family needs during the recovery period.

You can ease loss of income from a disability with disability insurance. Disability insurance helps provide security. It pays a monthly income to help protect the family home, savings accounts, retirement funds and other assets should you become disabled.


Debt is scary hole Americans find themselves falling into far too often. The best way to avoid debt is to track your finances and create a budget (and stick to it!) Debt starts out small and if you don’t manage it, it can grow uncontrollably.

They say there is good debt and bad debt. Good debt is the kind that helps you eventually generate income and increases your net worth, such as a college education and real estate. Bad debt is described as debts incurred to purchase depreciating assets such as the brand new car you didn’t need and the shopping spree you put on your credit card.

With debt in general, it’s advised to pay off debt with the highest interest rates first. Focus on paying a little more on it each month until it’s paid off. Then do the same with the next debt until you have paid your debts.

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Check out this blog post 7 Habits to Help You Become Financially Successful for some great tips on managing finances.

Risk management may not be fun, but it’s necessary. Start by keeping in mind everything you want to protect – your family, your business, your personal goals – and then think about how the 5 Ds would affect them if any occurred. This should be enough motivation to start financial planning.

(This article originally appeared on

(Natasha Cornelius is the content-writer and social media manager for, an online life insurance agency. Their aim is to make life insurance easy to understand and to help you get life insurance coverage to protect your loved ones. Get a term life insurance quote from No personal information required.)