Serious illness or sudden death can knock your family for a money loop

It’s not the actual planning or organizational tasks themselves. People manage to plan and carry out other complicated tasks. When the event is positive — getting married, having a child, buying a home, inheriting some money — it’s far easier and more exciting to sit down and make plans.

As Reynolds points out, the negative ones such as a bad diagnosis or disability, or some unforeseen disaster, are a punch in the gut.

When things go to pieces, you don’t know what you don’t know. The average person has several financial accounts and different types of coverage, and few people can quickly lay their hands on all that information.

At a minimum, to be prepared for some unforeseen catastrophe, you should have a will, an emergency fund and a simple folder or notebook that holds financial and account information for you and your partner.

More from Invest in You:
What surprises people most about Roth IRAs
Learning to be an adult is like anything else: something you can learn
Five easy ways to save $1,000 in three months

It’s far easier to write down passwords and assemble information on accounts and key phone numbers when life is humming along. Planning simply makes a hard time easier, Reynolds says. What’s more, we do it all the time for a range of events both big and small.

“We back up our computers, we change our furnace filters and the oil in our cars,” Reynolds said. Getting organized for an unseen event is no different.

Don’t feel bad if you don’t have all your plans nailed down. More than half of American adults don’t have a will, according to Lexis Nexis, the legal research company. Fewer than half would be able to come up with $1,000 for an emergency expense. But do scout the possibility that things will not always go smoothly. More than 1 in 4 people age 20 will become disabled before reaching retirement age, according to the Social Security Administration.

The best thing you can do is start today. Work on building a cash cushion. And if you don’t have a will, make one.

Source link

Share with your friends!

Products You May Like

Leave a Reply

Your email address will not be published. Required fields are marked *

Get The Best Financial Tips
Straight to your inbox

Subscribe to our mailing list and get interesting stuff and updates to your email inbox.