We all like to think we’re rational about money. To be fair, for the most part we are. We budget, save, and plan for big-ticket outlays. Yet most of us, through complacency or reluctance to think about it, overlook the question of what would happen with our finances if we suddenly couldn’t make decisions for ourselves. For sure, it’s not a pleasant thought, which is exactly why so many of us push it aside. But the only way to leave the thought aside completely is to really address it.
Why optimism bias costs more than we realise
Psychologists have coined the term “optimism bias” to describe the natural belief that bad things happen to other people. It’s a comforting way of distancing ourselves from having to imagine the worst, but it can be costly. Serious illness, unexpected incapacity, or even a temporary hospital stay can leave our loved ones scrambling to deal with bills, make essential choices or sometimes even pay for groceries. Even a partner or spouse can find themselves locked out of financial accounts and unable to manage practical affairs.
We tend to think of financial preparedness purely in numbers: income, savings, outgoings, insurance. But for true security, there needs to be a way for someone to act on your behalf when you can’t. This is the kind of forethought that can protect not only your assets, but also your family’s stability and peace of mind.
The conversation we avoid – and why we shouldn’t
Talking about incapacity feels awkward, even a little taboo because these are conversations nobody really likes to have. It may help if we frame it as a conversation about care rather than control. Deciding who would handle situations in an emergency isn’t pessimism; it’s a kind of protection, a gesture of compassion. It spares your partner or family the stress of legal delays and uncertainty at a time when they will need stability more than anything.
It is worth viewing these conversations as part of normal financial housekeeping, like updating an insurance policy or moving a bank account. This doesn’t have to be an emotionally wrought moment, it’s simply a way of making finances more resilient.
Foresight begets action
Creating a lasting power of attorney (LPA) is a practical step that makes this preparation real. It’s a recognised way to ensure that if you are ever unable to manage your affairs, the person you trust most to do so can do it confidently and lawfully. Setting one up, ideally with the help of a power of attorney solicitor, is simpler than most people expect. And good guidance can really help set everyone’s mind at rest.
In the end, perhaps real optimism isn’t thinking “it won’t happen to me”. There’s no way you can be sure of that, after all. It’s believing that whatever happens, your family or partner will be secure because you took steps to prepare. True financial confidence isn’t about avoiding life’s uncertainties big and small; it’s about meeting them with foresight, care, and realism.
