Why Waiting 6 Months to Update Your Financial World is a Bad Thing

in Personal Finance, Plan

Thanks to an illness, I let my financial world slide a little (not just this web site).  This all started around November (right after I went to a financial blogging conference). The whole episode has caused a lot of agitation in my life, but I am hoping things are back on track.

I continually harp on the need for a Plan B, and Emergency Plans, yet I really didn’t have one. Luckily, I didn’t have to take too much time off work, but illnesses mess up more than just your job. My home life has suffered but my wife has been very patient with me.

emergency plan

The one thing I really let slide was the day-to-day financial aspects in my life. I hadn’t updated Quicken or any other aspects of my financial tracking system since November, which was a very bad thing. Trying to catch up on 6 months of financial tracking is very frustrating, and painful.

I ran into a few specific issues:

  1. Although I managed to pay most of my bills on time, I did find two credit cards where I had missed a payment and I was paying interest on the balances. I fixed that problem first.
  2. Going back six months to find your financial statements on-line can be a royal pain in the rear. Most on-line sites are OK for this, but you have to dig around to find them.
  3. Trying to catch up using Quicken (Canadian version, not the new version) is an even bigger pain in the arse.

Let me pass on a few conclusions that I have come up with in terms of illnesses and having Plan B’s and emergency plans.

  1. Having an emergency plan for your employment is important.
    • If you have a short-term disability plan at work, are you a member? When does it kick in? Can you top it up, and how much does it pay (rarely does it pay 100% of your salary). This is really important.
    • How about long-term disability? I was lucky my issue was only a short-term problem, but it could have put me out for longer. Long term disability is usually expensive, and will not pay your full salary, but is still a necessary evil.
    • How does your work deal with sick leave? You need to understand this before you need to use the system. Will there be gaps where you don’t get paid if you have a serious illness where you are absent for an extended period of time?
  2. Having an emergency account (most likely in your TFSA) is a very good idea. Do not assume you will have credit available in the situations. You will not be able to live on your credit cards or short-term credit for long, and the mess this may create could be lethal to your finances (in the short and long-term).
  3. Does your spouse or significant other know enough to be able to take over the financial world you have created? At my Church there are countless cases where the spouse was unaware of how the money worked because they just were never told. Ignorance is not a good thing when it comes to your financial life. How will your finances work when you are ill, or worse?
  4. Do you have a Will, and power of attorneys set up? If not, why not? Yes it is a morbid topic, but if you don’t do this, you are giving the government a gold opportunity to make a money grab from your estate. In my case I have a disabled son, so I really need to have specific instructions in place for financial stuff.
    • If we are going to be morbid, does your family or spouse know what you want done should you die? I have been clear that it is up the chimney with me (cremation) after all bits someone could use are gone. As I age I suspect my bits are a lot less useful for other folks. Next, have a lot of drinks afterwards, tell plenty of stories about what an idiot that I was, and then spread my ashes somewhere nice. I have sworn that if any money is wasted on a lavish funeral, I will come back and haunt anybody involved (possibly writing a ghostly blog from the hereafter).
    • What about all of those logins for all those financial sites? Does your spouse know what they are? I am talking about a list in a very safe place, that is kept up to date.
    • What about your on-line persona? How will the Big Cajun Man live on after my death? What about the passwords to the 70 different accounts I use on-line? Interesting thing to think about too. What will happen to this hallowed site?

I am only scratching the surface folks, and remember this is an ongoing process. Keep all of this up to date. Yes, I can be a little obtuse, but this is a short list in terms of things to think about if you get ill.

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{ 5 comments }

{ 5 comments… add one }
  • aB November 14, 2017, 1:24 PM

    [Hope all is well now.]

    This just reminded me about Employer information. Pretty sure my partner doesn’t know how to get in touch with my boss, if I was incapacitated. Will have to remedy that.

    Reply
    • bigcajunman November 14, 2017, 1:28 PM

      Important, especially if you travel a lot too.

      Reply
  • James@marcopolomoney November 13, 2017, 2:25 PM

    This is a great post, that deals with a topic that most of us often just don’t think about. I think that most of us in the Financial Blogosphere who have a spouse, are the ones who are more focused on money. it isn’t that our spouse isn’t interested at all, necessarily, but we have a blog and all, and it is our passion, so why not let us handle it? Right?

    The problem, is as you found, we become sick or worse. Things at the best fall behind, or worse, your spouse is unable to access money or accounts that he/she needs to because they don’t have passwords (this is critical!). This could lead to an even worse scenario, where without a will, assets get locked up in probate for much longer than necessary, adding unneeded.stress i a spouse already dealing with a lot.

    The emergency plan is a necessary evil, yes, but an important one. We just keep a couple of months worth of income in a high interest savings account for that exact purpose. Mind you, my work’s sick time policies are rather liberal, with no limits on use of sick time during one year (time being cumulative over my career) . If I didn’t have that, I would likely have a bit more in my Emergency fund – but everyone is different.

    Thanks for the awesome post.

    Reply
  • Ron Malis November 13, 2017, 10:00 AM

    Really good inventory on preparedness for a shock to your financial life, but you lost me on putting an emergency fund in a TFSA. If your emergency fund is in a savings account earning minimal interest, the amount of tax you would pay on that interest is limited, if any. Why not use the TFSA for investments that will (hopefully) provide greater returns? I guess, if you have TFSA room and you don’t have investments in a non-registered account, using a TFSA to house an emergency fund isn’t a bad idea. It is when I see people with non-registered investments, yet an emergency fund in a savings account inside a TFSA earning next to nothing (or they don’t even have a TFSA), that I see a missed opportunity. Love your blog.

    Reply
    • bigcajunman November 13, 2017, 11:28 AM

      Agreed, the TFSA was more of a “if you aren’t using it for anything else” kind of idea.

      Reply

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