Get financially healthy before a crisis hits
Healthy finances - June 2005
Saturday, May 21, 2005
When I started this column in December, my editors named it Healthy Finances. My job was to share my personal experience and professional advice about money. My specific task was to help you teach your children to use money wisely.
I thought I would write an occasional column about adult money issues—for example, what parents might consider when it comes to preparing for that huge looming college bill everybody talks about.
So I was hard at work on some family financial planning columns in January when I was diagnosed with stage 1b cervical cancer, an early stage of this scary disease. It quickly became clear that having healthy finances plays an essential—if not critical—role in every family’s ability to ride out a crisis. Including mine.
Money is not necessarily one of the first things you think about when faced with a troubling diagnosis. It certainly was not my first thought. But after the initial test results were in and I was sure of what I was up against, I quickly flipped a page in my mind to insurance. Did I have enough? What would this cost?
My husband, Michael, and I were at a dinner party a few days after the diagnosis. A woman there was sharing the sky-high costs of her own treatment for cystic fibrosis. “But that’s nothing compared to the cost of chemotherapy,” she said. Michael and I blanched.
The next day, we sat down to look at our insurance. We were relieved to see it would carry us through. More soberingly, we also had enough life insurance to provide for my family if needed.
We didn’t, however, have a living will, a document that would put in writing our medical wishes in the event we weren’t able to speak for ourselves. The day before I went in for my radical hysterectomy, we executed these final papers, had our signatures witnessed and felt we had done all the necessary paperwork.
We put in one last call to our financial advisor just to check. It gave us a small sense of relief that at least in our financial life we were “healthy.”
Our financial advisor is a man we have worked with for many years and who knows our family finances well. We had worked on a financial plan during the good times when our heads were clear. That way, we could focus solely on our financial goals, unfettered by the sometimes difficult realities of life—such as cancer.
It has been several months since I was diagnosed. Each day’s mail brings another medical bill. Inevitably, another envelope will follow from my insurance company, saying we are responsible only for a small portion. Our financial plans are still solid, thanks to good health insurance.
As you read this column today, healthy and happy, promise me you will do the following:
n Find a financial advisor. Your financial advisor is no less important than your pediatrician or internist. But it takes time to establish a relationship. Start looking now.
n Get the best health insurance you can. It should be solid, reputable and flexible. It can be expensive, I know. But pay the premium, and be glad to know you have a safety net in place.
n Buy life insurance. Fortunately, I didn’t need it. But knowing I had life insurance in place gave me some peace of mind as I faced this crisis.
n Do your estate plan. This is the road map to your financial future. It is an all-encompassing plan that links all of your other plans—disability insurance, wills, trusts, retirement savings and everything else—into one coherent document. We are all reluctant to write the big check for this (it can cost a couple thousand dollars), but it is worth the investment.
But how do you find the right financial advisor, health insurance plan, life insurance policy, attorney and so on? You do it the old-fashioned way—by word of mouth.
Then go online and check out the referrals. A handy site is www.cfp-board.org. It will tell you if your candidate has earned the certified financial planner designation and whether he or she has faced disciplinary action.
The same goes for finding good health and life insurance. Your friends and family may have done some of the legwork for you already. So use them. Ask your financial advisor for advice. Financial advisors work with service providers daily and will be able to give you some names to check out.
This is not a lot of work. It is a few simple conversations with a few trusted friends and family. This should lead you to a financial advisor, who can help guide you through this entire process.
Weathering any crisis is easier when you feel prepared. I am grateful Michael did not have to deal with a less-than-healthy financial situation while helping support me and our girls and run our family business.
Having healthy finances gave us all time to focus on the important stuff, the gifts of day-to-day life and healing. Susan Beacham is founder and CEO of Money Savvy Generation, a financial education company that provides innovative products and services to help parents and educators teach children the skills of basic personal finance (www.MoneySavvyGeneration.com). E-mail her at Susan@MSGen.com.