Snakes and Ladders: The Game of Life

- By Darren Smith

One of the real joys in life for me is spending time with my grandchildren. The two boys, aged 7 and 5, really enjoy playing games, particularly board games. One that we regularly play is an extra-large version of Snakes and Ladders. To watch their faces as they roll the dice and hope to land on a ladder that takes them forward rather than a snake that takes them backwards is interesting to watch.

Life can sometimes seem like a game of Snakes and Ladders. Each day, you roll the dice and you move forward, or at least that is the plan. With each move comes both risk and opportunity. Our goal is to roll a number that gets us to the next safe place, or if we are lucky, we land on a ladder that fast-tracks our progress.

In life, this is about putting ourselves and our families in the best possible position to maximise opportunities as they arise. Of course, in the game of Snakes and Ladders there are several snakes that we don’t want to land on as it can really knock us for six and send us back several rolls. Of course, in life many things can happen to us that can do the same. Some of which we have control and influence over such as our health, and others such as accidents from being in the wrong place at the wrong time that we cannot control.

As human beings, we have an overarching desire for certainty and being a position where we are in control. This is not always possible, so we need to set up ourselves and our families as best we can for those unexpected events. Preparing for such events and having shock absorbers can significantly lessen the stress.

When it comes to our finances, the small to medium shocks can be lessened by having a rainy-day fund or buffer that can absorb the bumps. Don’t get me wrong, it still hurts at the time, but at least we have lessened the financial stress and worry, which can allow us to deal with the actual issue. In the case of our health, we can take out protection such as insurance, which again, at the time of event can soften the blow of the finances and allow us to focus on the healing and other emotional strains. We can also try and maintain a healthy lifestyle along the way.

Many Australians don’t have a rainy-day buffer, with one in three working Australians living pay cheque to pay cheque. When the unexpected happen, which they quite often do, it can have a significant impact on the wellness/mental health of our family. Take a moment to think of five recent unexpected things that have happened to you that have impacted your finances (not all will be negative, but the positive are easier to deal with). Unfortunately, many people, as they are not prepared for the good surprises, can waste the opportunity that comes from them. An example would be a lotto win or redundancy where you get a reasonable payout. If not prepared, this can be whittled away by today’s desires rather than the things that are important to us.

What are some of the negative things? A major repair on the car or house can be ones that come up infrequently. Health can, for many, appear to be very sudden but can have a significant impact on us and those around us at the time. Many have experienced the larger than expected dental bills. The things that impact today’s lifestyle can be frustrating. Unlike the game Snakes and Ladders, we don’t have all events laid out on the board.

If you are going through a situation you have not been through before, it can be even more stressful, which is why we encourage you to think and work through a number of possible scenarios. Working through practical examples and hypotheticals can better prepare you for the real deal. It is no different than elite athletes training for a whole range of conditions and situations so they can best adapt to the game day situation. This ensures that if the unexpected occurs, they do not get overwhelmed by the situation. They have been conditioned to be more resilient and to adapt to the conditions of the day.

Just because we adapt and are better prepared doesn’t mean it is stress-free, rather it ensures this stress is more manageable. Unfortunately, we often have the tendency to believe that the unexpected will not happen to us. It is one of the common things that we tell ourselves so we can avoid thinking about the uncertainties that exist. A common example is estate planning, where the vast majority don’t prepare for a future event that is certain in terms of outcome but not timing. We avoid facing this reality. The sad news is it does happen, and when it does, it can have a devastating impact on our financial wellness and emotional wellbeing.

Below are some strategies that can be useful to keep in mind when dealing with unexpected event:

  1. Build up resilience through a healthier lifestyle

  2. Practice for different scenarios

  3. Educate yourself and develop a plan

  4. Review your insurance options

  5. Understand what buffers you have financially and in the form of accrued leave

  6. Utilise the support structure that you have around you

  7. Understand which of your budget items – income and expenses can be varied in different situations

One of the common ways to deal with the unexpected is through insurance and the protection it can offer. There are so many ways to use insurance, but it does require you to determine what are the risks that you are prepared to bare versus the ones you want to outsource to someone else to give you the increased certainty that you desire.

Insurance can play such an important role in transferring the burden or risk when the unimaginable or unexpected does happen. There are very few of us who would deliberately put our families or loved ones in a position of hardship, yet that can be the reality for those who are uninsured or underinsured.

Like many things to do with our finances, we need to review the common things we tell ourselves that become barriers to taking appropriate action such as:

  1. It won’t happen to me

  2. It will be right, we will work our way through it

  3. I’m a very lucky person – not me

  4. I can’t justify the cost of the premiums

Despite our best efforts to convince ourselves that it won’t happen to us, the statistics don’t lie. Your passage through life will be filled with twists and turns, and you cannot always see what lies ahead. But you can ease the journey by preparing yourself for the unexpected.

In the financial wellness workshops we run with organisations, we explore a framework that will assist in dealing with some of the common unexpected events.

Thinking in advance and preparing for some of the common situations that may occur puts you in a stronger position to build a buffer and implement strategies to reduce the level of stress that comes with that change.