The 6 Financial Disasters That Can Derail Your Future—and How to Prepare for Them

I once worked with a client who came to me carrying more than $30,000 in credit card debt spread across several cards, with interest rates ranging from 15 to 24 percent. She had been making payments for years and working hard, yet the balances barely moved. She felt stuck, frustrated, and ashamed. 

Her debt wasn’t a moral failure. It was simply a fact of her financial life. And before we could talk about investing, retirement, or long-term goals, we had to address what was already putting her future at risk. 

That experience reflects something I’ve learned after years of working with families: before we focus on building wealth, we must focus on protection. Financial planning is just as much about preserving what you have as it is about growing it. 

Debt is only one of the financial disasters people face. Others include downsizing, disability, divorce, disasters, and death. These six events—what I call the Six D’s—can derail even the strongest financial plans if they aren’t anticipated. 

Disaster No. 1: Debt 

About 80 percent of U.S. adults carry some form of debt, and roughly 48 percent of those with credit card debt carry a balance from month to month. In other words, most people are navigating debt in some capacity. 

Debt itself isn’t the problem. The issue is unmanaged, high-interest debt—especially credit cards—that quietly drains your ability to move forward financially. If you have debt, you are not alone. But it is something that must be addressed intentionally. 

Planning for debt starts with honesty. That means listing every balance, interest rate, and minimum payment you have. From there, you can identify which debts are costing you the most and prioritize those first. Just as important is asking a deeper question: if getting out of debt were possible, what would you need to do—or think—differently to make that happen? That mindset shift often becomes the turning point. 

Disaster No. 2: Downsizing 

In 2025, more than 1.1 million U.S. workers were laid off from their jobs—a 54 percent increase from 2024. While we like to believe job markets are cyclical, the current environment has made one thing clear: income stability can change quickly. 

Preparing for a potential layoff is not about pessimism; it’s about resilience. You can’t control the broader labor market, but you can control how prepared you are if your income changes. 

That preparation includes strengthening your professional network before you need it, staying connected to former colleagues, and continuing to build skills that make you adaptable. From a financial standpoint, emergency savings play a critical role. Even starting with one month of expenses provides breathing room, and gradually working toward three to six months creates meaningful stability. 

Disaster No. 3: Disability 

About 29 percent of U.S. adults currently live with a disability, and one in three Americans will experience a disability lasting 90 days or more before the age of 65. The likelihood only increases as we age. 

Disability is one of the most avoided conversations in financial planning, yet it has the power to disrupt everything else if it isn’t addressed. If your income were to disappear suddenly, wealth building would stop immediately. 

This is why I often remind clients that protection is not pessimism. Protection is love. 

Planning for disability starts with understanding what coverage you already have. Employer benefits vary widely, and many people are surprised by how little income they would receive if they couldn’t work. Identifying gaps, exploring additional coverage when appropriate, and incorporating disability planning into your broader emergency strategy can prevent a temporary setback from becoming a permanent financial crisis. 

Disaster No. 4: Divorce 

While divorce rates have declined over time, they remain high—between 40 and 50 percent for first marriages and as high as 60 to 67 percent for second marriages. Divorce is one of the most financially disruptive events a family can experience, not just because of legal costs, but because two households are more expensive than one and emotions often drive financial decisions. 

In my experience, money problems in relationships are rarely about money alone. They’re usually about misalignment, silence, and unresolved tension. 

Planning around divorce often begins by strengthening communication and alignment. Honest conversations about values, expectations, and financial priorities can surface issues early. Sometimes the most important financial investment a couple can make isn’t in a portfolio, but in counseling or guidance that helps preserve the relationship itself. 

Disaster No. 5: Disasters (Natural or Personal) 

As of mid-2025, the United States has experienced nearly 420 natural disasters costing more than $3.1 trillion, and 67 percent of people surveyed say they are not insured for natural disasters. Fires, floods, earthquakes, theft, and other emergencies don’t discriminate. 

While disasters themselves are unpredictable, their financial impact doesn’t have to be devastating. Proper insurance coverage, organized documentation, and emergency reserves act as shock absorbers when life takes an unexpected turn. 

Preparation here means confirming you have appropriate insurance, keeping essential documents secure and accessible, and building savings—even if it starts small. These steps don’t eliminate risk, but they dramatically reduce long-term damage. 

Disaster No. 6: Death 

This statistic is unavoidable: 100 percent of lives end in death. Yet estate planning remains one of the most frequently postponed aspects of financial planning. 

When someone passes away without a plan, they often leave behind confusion, conflict, and unnecessary hardship for the people they love most. Estate planning isn’t about assets or account balances—it’s about clarity, compassion, and care. 

A solid plan typically starts with the basics: a will, powers of attorney, health care directives, and, when appropriate, a trust. It also requires follow-through—ensuring beneficiaries are updated and assets are titled correctly. Open conversations with loved ones about where documents are and what you want for them can make an immeasurable difference during a difficult time. 

Final Words of Wisdom 

Many people put off planning because they trust in tomorrow. They say they’ll deal with it later—next month, next year, someday. But tomorrow doesn’t protect your future. Action does. 

Planning for these six disasters isn’t about fear. It’s about stability, dignity, and love for the people who depend on you. And if you need help thinking through any part of this process, we’re here to guide you.