MY NEXT DOOR neighbor had her home burglarized. The thieves stole some expensive electronic equipment and jewelry. In the aftermath, I thought I should make a list of my valuable possessions and take a photo of each one, in case I ever have to file an insurance claim.
Here’s my list of valuables:
1. Fender Telecaster guitar.
Yes, that’s my complete list. I really don’t own anything of value, other than that guitar, which my parents gave me in 1968 for my 17th birthday. I don’t own any expensive jewelry or electronic equipment. My television is about 10 years old. I own an iPhone 5 worth $25 on a trade-in for a new phone. My other possessions are of no real value.
I do own some watches and a ring that belonged to my father, which I keep in a safe deposit box. But their value is mostly sentimental. My list of valuable possessions also includes a small one-bedroom condominium and a 2010 Ford Fusion.
Looking at that list, you might think I live a spartan life, but I feel it’s full and comfortable. I don’t hesitate to spend on things I value. Whenever I can get away, I like to travel. I enjoy dinning out with friends. I subscribe to a Major League Baseball cable package that allows me to watch my favorite team. I have satellite radio in my car, so I can listen to my favorite music. I subscribe to HBO, Showtime, Cinemax and Amazon Prime to satisfy my desire for a good movie.
You know what I like about my list of valuables? It makes me feel safe and secure. I know that, in a financial emergency, I can lower my fixed expenses. I can always travel less, eat at home and drop my various subscriptions. My condominium and car are paid for. As a result, in a financial emergency, my fixed expenses would consist primarily of utilities, insurance, property taxes, food and homeowner’s association fees. I think of my low fixed expenses as a wall protecting me from financial disaster. Reducing expenses can be a first responder that saves you in a financial emergency.
If your list of valuables, however, includes a payment on a luxury car, diamond necklaces or a Rolex watch, life can get stressful during hard times. Even if your expensive valuables are paid for, you have to ask yourself, would I have been better off putting that money into my retirement savings plan or a six-month emergency fund? It might feel good driving that luxury car. It won’t feel so good when a financial emergency hits—and you don’t have the resources to deal with it.