Photo by R. Hyland, accessed through Wikimedia Commons

There’s probably no one who needs a “Plan B” as much as an adventurer who is climbing Mount Everest.

Climbers are encouraged to formulate simple rules that will help them make a decision about when to bail out, even if their thinking skills are impaired by stress, fatigue, and lack of oxygen.  For example, a good rule might be “If you aren’t on the summit by noon, you must turn back.”

It is good to be proactive and to formulate a clear bailout plan before undertaking anything risky with your finances.  That way, when stress or exhaustion interferes with your clarity of thought, you can still make a healthy decision.

Here are some examples:

  • If I lose more than $10,000, I will not participate in this investment any longer.
  • If I can’t find a house that I like that is less than $200,000, I will stop looking at houses for now and rent for another year.
  • If I can’t get $2000 for my car as a trade-in, I will not work with this dealership.
  • If my son/daughter doesn’t get a job, I will no longer pay all of his/her living expenses.

What is one bailout plan that you designed for yourself in the past?