In the world of long-distance hiking, a “shakedown hike” is a short test run where hikers assess their gear, fitness, and preparedness before committing to a full thru-hike. It helps identify what’s essential, what can be left behind, and what needs improvement—ultimately reducing the hiker’s risk and improving their success on the trail.
Financial planning works much the same way. Life is its own long-distance journey, filled with expected milestones and unpredictable terrain. Just like a shakedown hike prepares hikers for the challenges ahead, smart financial planning prepares individuals and families for life’s inevitable bumps: unexpected expenses, job loss, divorce, market downturns, or even premature death.
For example, consider an emergency fund. It’s the financial equivalent of extra food or first aid on a hike—it might feel unnecessary until you’re stranded without it. A well-stocked emergency fund can cushion sudden expenses like car repairs, medical bills, or temporary unemployment, ensuring you stay on your path without derailing long-term goals.
Insurance—life, health, disability—is like quality hiking gear. You hope not to use your rain jacket in the desert, but when the storm hits, you’ll be glad it’s there. Adequate insurance coverage protects you and your loved ones from financial devastation in the event of death, illness, or divorce.
Investment diversification mirrors packing smart and light. Carrying too much of one type of gear—or investing too heavily in one asset class—can slow you down or even lead to failure. A well-balanced portfolio, like a well-balanced pack, helps you weather the inevitable ups and downs of the market with less stress and more stability.
And just like a hiker consults maps and makes contingency plans, financial planning involves having a roadmap. A will, estate plan, and financial goals act as your navigation system, ensuring that even when life veers off course, your long-term direction remains clear.
In hiking, a shakedown is about more than the gear—it’s about confidence and readiness. The same is true in financial planning. By testing your preparedness and addressing weak spots before crisis hits, you equip yourself to move forward with peace of mind. Whether you’re on a trail in the wilderness or navigating life’s winding roads, preparation is key to resilience.
This blog is the first installment of our “Lessons from the Trail” series. Our own April Busby, CPA, CFP® is currently hiking the Appalachian Trail.
