Storm-proof your finances

After typhoons or tsunamis hit land, some houses survive while others are destroyed.

The builders of the surviving houses chose to use concrete, reinforced steel, and other sturdier materials. The builders of the destroyed houses didn't plan on hurricane-force winds. Their houses were made of wood or cheaper materials.

The wise person prepares for possible disaster before it happens. As the old saying goes, "The best time to fix the leak in the roof is while the sun is still shining."

Economic storms will happen at some time for most of us. The best time to apply wise financial principles – spending less than you earn, minimizing debt, having emergency savings, investing long term and giving generously– is before the financial storms come.

You may be thinking, "Well, it's too late for that. I'm in the midst of a financial crisis. The storm is all around me. Now what do I do?" Here's hope. You start with the same principles.

Perhaps your financial crisis has already happened. You're now picking up the pieces and trying to rebuild. What do you do? Same answer. You start with these principles. You can take great comfort that applying the same principles that apply before, during, and after the crisis.

People often ask, "Now that _____________ is happening…" Then you can fill in the blank with just about anything: oil prices increasing or decreasing, losing a job, inflation increasing, the stock market declining, interest rates rising, or the price of eggs in China changing. I give the same advice: follow these five principles. If you spend less than your income, if you eliminate debt, if you have available savings, if you set long-term goals and invest accordingly, if you continue to give generously, then you'll be as prepared as possible.

Aim to be not just a builder of a good financial portfolio, but building a life on the whole.

– By Jeremy L. White