Last weekend I was visiting with my family in Quebec on the family farm. As is tradition, we always have dessert after supper, and my son had asked for ice cream. When he went to get it out of the freezer, it was a soupy separated mess…the very large, very old (over 50 years old) chest freezer, had finally died at some point that day. Now normally, this wouldn’t be a big deal since my parents have 2 other somewhat large (but old) chest freezers and 3 fridges each with their own freezer compartments, and they would find room in those for the soon to be spoiled food. But harvest season just ended, and the freezers were quite full. It was interesting to watch as a number of family members scrambled to make room in other freezers, even next door in my brother’s freezer, and I started to think about how we just take it for granted that equipment is going to keep working (even when it’s old).
It was the same when my furnace died last winter. Even though it was 25 years old (well past the lifespan of a furnace these days), and needed repair, I took it for granted that I’d get at least one more winter out of it. Not so – I was forced to deal with the expense of a new furnace a year earlier than I had planned. And my dishwasher that died this summer – 15 years old – I hadn’t planned for that, and we’ve resorted to doing dishes by hand.
We do it with our cars, our phones, our
computers, and even our bodies. We take it for granted that things are just going to keep working…we never think that something is going to give out, even when it’s old, and therefore don’t think about or plan for repairing or replacing it. And when that time comes, we typically experience great stress over the hassle and cost of repairs/replacement. One solution is to build a capital replacement reserve in your cash flow plans.
Larger businesses have policies, systems, and processes to track their capital equipment, its expected life, replacement costs and annual operating costs. They also build up reserve funds (capital replacement funds) so that when something breaks or dies, they are prepared – they have a process and the funds to deal with those “unexpected” break-downs. And they have similar processes for when key employees “break-down”, by ensuring that at least one other staff member is properly trained to do the job and can step in if and when needed, at least in the short term.
So what are you taking for granted in your home or business? And what policies, systems, and processes (including financial) can you put in place to give you peace of mind and to deal with “break-downs” with greater ease and grace when they happen?
If you need assistance with your cash flow plans, send me an email…let’s see how I can help 🙂
[author] [author_image timthumb=’on’]http://188.8.131.52/wp-content/uploads/2017/06/Linda-Spencer-Visionspire-cropped.jpg[/author_image] [author_info]Linda Spencer is a CPA, CA, Canadian Tax Specialist and Money Mindfulness Coach. Her mission is to eliminate the stress and anxiety you experience around money and taxes, by empowering you with the know-how and mindsets to improve your business success and financial wellness, so you can have more harmony, joy and abundance in your life.[/author_info] [/author]