Planning for the 6 Life Disasters: Protecting Your Future with Corazón

I once had a client who came to me and had $30,000 of credit card debt on different cards with interest rates ranging from 15 to 24 percent. She’d been stuck in this debt cycle for years—trying to pay it down but getting nowhere.  

Her debt wasn’t a moral failing, it was just a fact of her financial life. And before we could move forward, it was something we needed to address before we could get any further into her financial plan.  

Before I ever talk about wealth building with clients, I talk to them about something far more urgent: How do we protect you and your family from the six disasters that can sabotage your future? Because when it comes down to it, financial planning is just as much about protecting your wealth as it is about building it.  

Debt is just one of the financial disasters, with the others being divorce, downsizing, disasters (natural and otherwise), disabilities, and death.  

In this post, I want to walk you through the Six D’s—the six disasters that can derail even the wealthiest people—and how to prepare to face them in a way that preserves your financial dignity. 

Disaster No. 1: Debt 

A vast majority of people in the United States carry some form of debt, including credit cards, mortgages, auto loans, and student loans. Experian reports that the average consumer debt reached nearly $105,000, but the averages vary drastically between generations. Generation X (those ages 45-60) has the highest amount of average debt at around $158,000, which is down .8 percent from 2024. And Generation Z (those ages 18-28) have the lowest average debt, at around $34,000, but that is up 7.8 percent from 2024. And millennials (those ages 29-44) have an average of about $132,000 in debt, which is up 1.6 percent from 2024.  

Of the different types of debt, credit cards made up the lion’s share of the debt, followed by auto loans, mortgages, and personal loans.  

All that to say is that if you have debt, you are clearly not alone and it’s a disaster that we must plan for.  

How to plan: The truth is that all progress starts by telling the truth. Awareness is you can’t change what you don’t acknowledge. Start by doing your own “obstacle detector”: 

• List every debt—balance, interest rate, and minimum payment that you currently have.  

• Identify the debts that need the most attention now—which are the debts with the highest interest rates and attack those first. 

• Ask yourself, “I know I can’t…but if I could get out of this debt, what would I have to do differently? How would I have to think differently?” 

Maybe that means cutting back spending temporarily, picking up extra income, or talking to a nonprofit credit counselor or Community Development Financial Institution for support. Your job is not to be perfect. Your job is to stop hiding, take your head out of the sand, and take one courageous step forward. 

Disaster No. 2: Downsizing 

You’ve likely seen the headlines about the job markets—companies are downsizing, restructuring, not hiring. We just went though the largest government shutdown in history, during which thousands of federal workers were “RIF’d” or laid off, the legality and finality of which are still being argued in the courts.  

As of this writing, the most recent unemployment rate is around 4.4 percent, which is up from 4.1 percent at the same time last year. And Reuters reports that the U.S. weekly jobless claims saw the largest increase in over four years, likely due to seasonal volatility.  

All of that meaning people are losing their jobs and the job market looks to be cooling. Add to that CNN’s reporting on how the labor market is going the way of the exclusive airline club—reserved for the “haves” who are already in the club, versus the folks who are looking to break in. It’s easier to “stay in the club” than it is to break into it.  

How to plan: You want to start planning for a potential downsizing by looking at your network (or starting to build one if you haven’t already) to see where there might be future opportunities. Given that it’s more likely you’ll get a job if you know somebody, strengthen the bonds with people in your network. Join associations, go to mixers, and get in touch with previous colleagues to see if there are potential opportunities.  

Then, more tangibly and directly, you can:  

• Build an emergency reserve—start with one month of expenses, then grow to three, then six or more. 

• Look at your work life with truth, awareness, responsibility and courage (TARC). Where are you most vulnerable? Where could you upskill, cross-train, or create a side income? 

• Practice work–life integration, not perfection. There will be seasons where you work more to stabilize your future, and seasons where you step back and focus on family. 

• Ask yourself, “If my income were to go down tomorrow, where would I be most vulnerable?” and then address those weak areas.  

You can’t change the jobs market or completely prevent a layoff, but you can make sure that you’re prepared.  

Disaster No. 3: Disability 

This one keeps me up at night. God forbid you were to get injured or hurt and couldn’t provide any income for yourself or your family. The Centers for Disease Control and Prevention reports that nearly 29 percent of adults in the U.S. have some form of disability. 

And while that might seem like a low probability, it’s a risk I’m not willing to take and I encourage my clients not to take either. That’s why I always encourage clients to build emergency reserves—and why disability insurance is so important. You can’t build wealth if your income disappears and your family has no backup plan. And yet this is one of the most avoided conversations in our community. 

I tell clients: Protection is not pessimism. Protection is love. 

How to plan: First, have the “squid conversation” with yourself and your family. Imagine a squid on your face—this pressing problem you keep trying to ignore. If you got hurt tomorrow and couldn’t work, that squid would block everything else: retirement planning, college savings, even basic bills. 

So: 

• Review your employer benefits: Do you have short-term or long-term disability? How much would it actually pay you if something were to happen? 

• If there’s a gap, explore private disability insurance with a trusted professional. 

• Make disability part of your emergency plan: know which bills must be paid first, who you would call for help, and what resources (community, nonprofit, faith-based, CDFI) you could lean on. 

Again, you might feel like, “I know I can’t afford one more thing.” But ask, “If I could protect my income, what would I have to do differently?” That question opens doors. 

Disaster No. 4: Divorce  

I actually just put out a TikTok about this—divorce is so devastating to families—and women are more likely to end up destitute when they go through a divorce, not the men. Women’s household income drops by an average of 41 percent after a divorce, according to the Government Accountability Office. And while the divorce rate has been declining since the 1980s, it’s still quite high—ranging from 40 to 50 percent for first marriages and between 60 and 67 percent for second marriages. Among Latinos, the divorce rate for first marriages is about 46 percent.  

Divorce is one of the greatest financial disasters a family can experience, not because of the legal fees, but because two households cost more than one, and the emotional toll affects every financial decision. 

How to plan: If all couples could have a values conversation before they get married, it might prevent a whole bunch of divorces because money problems are rarely about money. They’re usually about misalignment, silence, resentment, and the “white elephants” couples stop talking about because every conversation becomes a fight when they do. 

I like to help my couple clients bring those elephants into the light by starting with honesty, not with lawyers. When I sit with couples, I’ll often ask: “On a scale of 1 to 10, where is your marriage? One being you’ve already filed for divorce, 10 being the most ideal relationship—where are you?” 

Many times, the husband says a 7 or 8, and the wife says a 4 or 5. That gap is not just emotional—that’s a financial red flag. 

Planning for divorce looks like: 

• Schedule a values conversation about money, family, work, and boundaries. 

• Use what I call a “white elephant spotter” question. For example: “What is it that we’re not telling each other that we stopped talking about because every time we bring it up, it causes an argument?” 

• If needed, use some of the money you would invest in retirement to invest in counseling and healing the relationship first. Otherwise, as I tell clients, you’re not saving money for your retirement, you’re saving it for your divorce.  

• Creating agreed-upon systems: a small fund to help extended family, shared transparency on accounts, and regular check-ins. 

You’re not just planning to avoid divorce. You’re planning to build a life where both of you feel seen, heard, and committed to the same future. 

Disaster No. 5: Disasters (Natural or Personal)  

Fire, floods, earthquakes, theft, a global pandemic—you name it. Disasters don’t discriminate. 

What matters is whether you’ve planned for them. 

Insurance, emergency funds, proper documentation, backup plans—these are not luxuries. These are tools that prevent trauma from turning into lifelong financial loss. 

You cannot stop a disaster, but you can stop a disaster from wiping out your family’s future. 

How to plan: Think of this as building a safety net so that when life shakes you, you don’t break. 

• Make sure you have the basics: renters or homeowners insurance, auto insurance, and, if it applies, flood or earthquake coverage. 

• Keep essential documents—IDs, policies, wills, passwords—organized and backed up. 

• Build that emergency reserve I keep talking about. Even starting with a few hundred dollars gives you breathing room when something breaks or life hits hard. 

• If you’re already in trouble—behind on a mortgage, at risk of losing housing—remember what I tell my clients: your job is to be vulnerable enough to say, “I need help,” so we can bring in community resources, nonprofits, and mission-driven lenders who specialize in crisis situations. 

You can’t avoid every storm, but you can decide not to face it alone or unprepared. 

Disaster No. 6: Death  

We are all going to die. Not one of us is going to make it out of here alive. Yet so many families avoid the estate planning conversation entirely. They have no will. No trust. No beneficiaries updated. No instructions for the people they love most. 

When someone passes without a plan, they leave behind confusion, conflict, and unnecessary financial hardship. 

Estate planning is not about assets—it’s about compassion. It’s about making sure the people you love are cared for, not burdened. 

How to plan: Estate planning is one of the last acts of love for your family. It’s not morbid to plan for your death, it’s merciful.  

• Start with the basics: a will, powers of attorney, health care directives, and, if appropriate, a living trust. A beautiful 150-page estate plan means nothing if you never retitle the house into the trust or update your beneficiaries. Execution matters. 

• Review your life insurance: If something happened to you today, would your spouse or children be okay? Many of my own staff have told me, “If something happens to me, I don’t know what will happen to my wife.” We help them all make sure they know the answer to that question.  

• Have the courageous conversation: Tell your loved ones what you have, where documents are, and what you want for them. Don’t sweep it under the rug and hope for the best.  

Remember: you’re not planning for death; you’re planning for your family’s life after you’re gone. 

Final Words of Wisdom 

There’s something beautiful that we have in our community that can also hurt us: we trust in tomorrow. We say, “I’ll do it mañana. I’ll save tomorrow. I’ll invest tomorrow. I’ll take care of my health tomorrow. I’ll plan for my family tomorrow.”  

But here’s the truth I’ve found over many years of doing what I do: tomorrow never comes unless we bring it into today. Don’t let mañana become next month, next year, or never—especially when it comes to planning for these six disasters. Planning can keep you from letting these financial disasters keep you from building the life of your dreams.   

And if you need help planning for them, get in touch with me at info@louisbarajas.com.