Great work getting this far! By now, you’re past the really hard stuff and are moving on to the best part — getting ready to thrive.

Stage 3: Thrive

Stage 3 is all about thinking long term for the next couple of years, and preparing yourself for the next normal. That next normal might be easier to navigate, like if you land a great job to replace one you lost. But you might also face challenges. The crux is to be prepared for a multitude of scenarios, so that you’re able to navigate whatever may come in the future.

You know you’re in this stage when:

• You’re working your plan to repair your finances, whether by building an emergency fund or paying off debt.
• You could keep doing what you’re doing indefinitely as long as everything stays the same and you don’t experience another big financial change, like unemployment benefits ending or another kind of income loss.

Now, let’s recap where Josh & Ashley were last time we saw them.

Last time, Josh & Ashley had gotten their financial situation to a stable place. They were able to pay their bills for more than one month out, and were able to start working on their plan to build an emergency fund.

In this stage, they’re ready to think about their long term financial health and start planning for their next normal. But they’ve also been a little bogged down by worry. What’s at the top of their minds is Josh’s uncertain job situation. He’s been on the hunt for a new job, but hasn’t landed anything yet. The reality is that his unemployment benefits will eventually end, and they must have a plan in place to navigate through that. While they can’t say for sure what’s going to happen in the next few months, they do know it’s possible to be prepared by thinking ahead and planning. To do that, they’ll sketch out a few scenarios from A to C to help them create a plan.

Working Toward Plan A: Josh earns income similar to his previous job

This is definitely their ideal plan! Now that they have the tools to build a realistic budget and have the skills to help them spend less than they earn, they know they’d be able to get right back on their feet if this were to happen. On top of that, they’d be able to quickly accomplish their goal of building a 3-6 month emergency fund, and then be able to start working on saving up for a down payment on a home.

Here’s what they’re doing to make this plan a reality:

• Josh will keep applying for jobs, and even hopes to amp up his application efforts.
• Since losing his job, Josh has become the primary caregiver of their two kids. That means he’s also been doing a lot more housework and cooking, which limits his ability to apply for jobs. Josh and Ashley decide together that she will put the kids to bed each night so that Josh can focus even more time applying for jobs after dinner. They know they’re in this together and want to support each other during this stressful time.

They’re Defining Plan B: Josh gets a lower-paying job + family reduces expenses moderately

The unemployment benefits Josh is receiving have a deadline. That means they only have so long before Plan A is no longer a viable option. To help them prepare for that, they decide that if Josh isn’t able to find a job by two months before his unemployment benefits ends, he’ll expand his search to include lower paying jobs as well.

However, they know that with the budget they have now, a lower-paying job might not be enough to cover everything they’ve budgeted for. On top of seeking a different job, they must also create a Plan B budget that further reduces some of the expenses they have so they can make ends meet. That means they’ll continue to spend less on Fun and will build up their emergency plan more slowly.

They’re Acknowledging Plan C: Last resort

Josh & Ashley hope this plan won’t become their reality, but they know they should at least acknowledge the possibility that Plans A & B won’t work out. They think about how they’ll navigate things financially if they don’t.

If Josh can’t find a similarly paying job or even a lower-paying (but livable) job, and if moderately reducing expenses isn’t enough, they know they’ll need to take drastic action. For them, that means they’ll need to either (1) use the emergency fund they’ve been working so hard to build, (2) make significant cuts to their budget, or (3) apply for different government benefits.

They don’t think they need to work out all the details for this plan now. While it’s definitely a possibility, there’s still some time before this would come to pass. For now, they decide that if it comes to it, they would be open to renting out a room in their home rather than using up their emergency fund. They leave it at that.

Josh & Ashley might have been overwhelmed at first, but making a plan now means they will have less scrambling to do if Plan A doesn’t work out. Part of thriving means being prepared for anything, and next time, you’ll have the opportunity to start thinking about your ABC plan.