Canadian Personal Finance Blog

Archive for January 21st, 2008

So this weekend was a very good for many reasons for me.

I got to watch my daughter’s basketball team play very well and pick up a silver medal at a tournament (so that is always good). I also learned the importance of planning for emergencies and contingencies.

I was on the other side of the 100 car pile up(s) on Highway 400 near Toronto on Sunday. We could not get south to go home (due to roads being closed) we could not go East due to weather thus we were stuck. I had not brought any extra clothes and I had run out of cash, but things ended up fine, and we came home Monday morning in fine weather and with very little traffic.

This got me thinking about how well am I ready for financial emergencies in my life?

• If I got laid off tomorrow (hope not, touch wood), do I have a big enough emergency fund to tide myself over until I can get employed again?
  • Not enough is my suspicion, but I am also hoping for a severance package, which is a dangerous game to play, because what happens if my company simply evaporates and has no money left to pay severance? This has happened to friends in the high tech industry.
• If I am in an accident or have a medical episode that incapacitates me, is my family taken care of financially?
  • I have disability insurance (short and long term) so I think I am in not too bad shape there, but I think it might put my family in a tight bind if I had a permanently incapacitating medical episode (e.g. stroke).
• What if my wife suddenly was incapacitated what would happen then?
  • I would then have to get help at home for my wife and for my young son. That may not be a huge hardship given I do have benefits at work, however, how much is covered, and getting help with my son is a direct cost I would have to pay for.
• If my wife or I pass on what happens?
  • We both have a fair amount of life insurance, however, if we both passed on, what would happen to my children? They will have money, but who will take care of them? My will is not up to date, and I think in dire need of re-visitation.
• If one of my children was incapacitated due to accident or illness, can my finances take care of this?
  • I think so, but then again, let’s hope I don’t have to find out.

How is your emergency plans both financially and for your family? Do not wait until you are stranded in Barrie before you think about this issue, think and act on it now.