This weekend marked the six month anniversary of a day I will never forget. On July 23rd, 2010 a CF-18 Hornet crashed at the Lethbridge County Airport while performing a routine low-speed passing manouevre during a practice run in preparation for the Alberta International Air Show.
As President of the Air Show Association it was my responsibility to ensure our crisis management plan was activated and all emergency procedures were followed. Responding to this type of incident requires a coordinated effort between many individuals and organizations, which is why having a crisis management plan in place is crucial to get you through any emergency.
Crisis Management – You’re Never Fully Prepared
About two months prior to the air show we had a meeting to review our emergency response plan and went through a few exercises involving potential emergency situations that could take place at our event.
Examples ranged from the low level emergency of someone twisting their ankle in a gopher hole or suffering from heat stroke, to a medium level emergency of a missing child, all the way to a high level emergency of a plane crash and potential fatality.
Even though the statistics suggested that there will be a high level emergency at a major air show once every 10 years, we all knocked on wood that there hadn’t been a major incident in our 19 year history.
After the crash many people in our organization did not envy me since I had to deal with the endless media inquiries. But after finding out that the pilot was ok and that we had the military support to continue the event, I honestly didn’t mind speaking to the media.
That was a major part of our crisis management plan, since we needed to alert the media about the incident that occured, and let everyone know that we would still carry on the event as planned. I was just thankful to the volunteers, fire fighters, EMS crew, and military who responded to the incident so quickly and enabled us to continue on with the event.
In the end our crisis management plan was not perfect since you cannot plan for every type of emergency. But because we did have a plan in place and we practiced potential emergency scenarios prior to the event, we were able to communicate with each other effectively in order to successfully respond to the incident. If we did not take crisis management seriously, and if we failed to prepare for any potential disasters to occur, I believe these events could have turned out much differently.
Emergency Essentials For Your Personal Finances
So how does this experience relate to personal finance? While everyone’s situation is different based on their age, income, goals and tolerance for risk, I believe that there are a few emergency essentials that will help protect your finances in case of a crisis. Review these frequently to ensure you’re prepared for any bumps in the road:
- Protect Yourself – A good financial plan means having appropriate life insurance, adequate disability insurance, and an up-to-date will. Review these periodically as your needs can change during different stages of your life, especially if you get married and have children, or if you change careers.
- Expect the Unexpected – Most experts recommend keeping an emergency fund of 3-6 months expenses in a readily accessible account. While I prefer not to keep idle cash lying around, it’s important to have a plan in case you need to access money outside of your normal income streams. I also prepare an annual forecast of my income and expenses to help avoid any unforeseen events throughout the year.
- Set Realistic and Measurable Goals – What gets measured gets managed. Whether you are saving up for a down payment on a house, adjusting to single income living, or you are trying to figure out how much to save for retirement, you need to set realistic and measurable goals in order to achieve the best results.
- Give Yourself a Cushion – Avoid the temptation of lifestyle inflation. Bank your raises, try to live on one salary, and don’t buy more house or car than you can afford. I am currently enjoying the benefits of a variable rate mortgage, but I have my payments set at the five year fixed rate. This way I’m giving myself some extra room to breathe in case interest rates rise, while at the same time decreasing my ammortization with each payment.
I learned a great deal about crisis management during the air show last summer, and I definitely pay more attention now when reading through the emergency plans at work. Having a personal finance emergency plan is often overlooked but can be essential in achieving your overall goals while hopefully averting any financial disasters.
What does a personal finance emergency mean to you and how would you respond?