Accidents, illness and death are unfortunate parts of life. The emotional and physical toll of these events can be debilitating. Unfortunately, many people do not consider the financial impact of the unexpected death, illness or disability.
While these topics are uncomfortable for most people to talk about, these conversations need to happen. If something unfortunate were to happen to you or a family member, having your financial matters in order may not make things better immediately, but it will help alleviate a lot of stress.
Here are a few things you need to do to ensure your family is ready for the unexpected:
Depending on your situation, government assistance through the form of benefits and grants can be of great help – especially if you are on a low income and need help with your budget. With unexpected financial situations getting money can be difficult and some turn to solutions such as payday lenders. Reviewing grants and benefits first may be more beneficial, in addition to government funded benefit loans versus the latter.
Get life insurance
Life insurance is one of the best investments you can make, especially if you have little savings and a family that depends on your income. Term life insurance is the most cost efficient and it is usually a better option for most families. If you do only one thing on this list: get life insurance for both parents in the household, even if mom or dad stays at home. You will need to supplement the cost of childcare if they pass away or are unable to care for the kids.
Do your will
A living will is one of the most dreaded topics for married couples. Some people feel like it is a bad omen to talk about death and some couples simply cannot agree on the terms. Your will should include a breakdown of how your assets will be split, a named guardian for your children and a medical declaration with your decision about organ donation and life support.
This may sound odd, but having a 3 to 6 month supply of food can really take the pressure off in the event that someone loses their job or falls ill and cannot work for an extended amount of time. It is also a good idea to have an emergency kit (72-hour kids) ready to go in the event of a natural disaster. Water, canned goods, flour, sugar and dried foods are good options for storage. Rotate through the canned goods so you do not waste food.
Emergency Savings Fund
An emergency savings fund will help cover the costs of unexpected events like a car break down, illness or accident. Additionally, this money can be used to help cover bills if the breadwinner passes away or is injured an unable to work. Ideally, you should work up to at least a 6-month emergency fund.
Communicate as a couple/family
In many homes, one spouse primarily takes care of the finances. While this can simplify bills and conflicts, it can also cause major problems if the person who manages the money passes away or becomes incapacitated. Work together on a budget every month and make sure each person knows where you store the important documents and financial information.
Pay off debt
Pay off debt as quickly as possible; you’ll have one less bill to take care if money becomes tight.
Planning for unexpected events is uncomfortable, and altogether unpleasant. However, if you take the time to talk about it now, you will not have to worry about it at a more inconvenient time, like when you are faced with a crisis.