I had brunch with a friend whose husband died unexpectedly during the pandemic (not from Covid), leaving her alone with two teenage daughters. That’s hard enough for anyone to bear under normal circumstances, but two things make this case worse. The first is that when you are suddenly a single parent and there is a major transmissible disease in the midst, suddenly your risk tolerance has changed drastically – just when you are at your loneliest and might need other people the most, you are also the most scared of getting sick and leaving your kids as orphans. Yikes! But that part’s not the subject of this essay. The second thing that makes her story awful is that her husband left her with basically no information whatsoever about their supposedly joint finances.
It all led me to this question: Why do really smart people who are great at their jobs and really on top of things in other aspects of their lives have what I like to think of as “poor financial hygiene?” Is it fear of death? Denial? Procrastination? Just hate having hard conversations? I don’t know, and I don’t really care what the reasons (ahem, excuses) you may have been using are anymore. I want you, and your partner if you have one, to step up to the plate and OWN YOUR FINANCIAL LIFE. For real. Not joking.
If you are a grown-up with any of the following:
- a job
- a lease
- a mortgage
- any person who depends on you financially (child, parent, other relative?)
- a pet you love
It’s time to step up and take care of your basic financial hygiene.
You will want to know the answer to the following questions:
- Where is all your money? If something happened to you, does someone else have this information? If not, what are you going to do about that?
- Do you have enough insurance?
- If you rent you need renter’s insurance
- If you own, you need homeowner’s insurance
- If you drive, you need car insurance
- Health insurance
- Disability insurance
- If you have dependents who rely on your income or caregiving, basic life insurance
- If you are older with sufficient assets, possibly hybrid long-term care insurance
- Also research/discuss/analyze:
- umbrella liability insurance (especially if you have pets, a pool, or teen drivers in your life)
- pet insurance
- If you have kids or a lot of assets, do you have a will/trust/Estate Plan? When was the last time it was reviewed?
- If you are working, are you saving for retirement? If you are working but not saving, why not?
- Freeze your credit.
- Sign up for alerts and/or set a calendar reminder to check your credit report at least once a year.
- Use a password manager on everything and 2FA on anything important or lucrative for thieves.
- Have an emergency fund with 3-12 months of non-discretionary expenses (anything you need to live or could not cancel during that time).
- Create powers of attorney for healthcare and property (this is a good idea for everyone, starting at age 18 when your parents no longer have automatic rights to help you with your affairs).
- If you are older, have you told anyone your final wishes?
- Scan a copy of your driver’s license and passport and save it on a secure cloud drive in case you ever have an issue while traveling.
- Track your expenses (we like Simplifi)
- Store important documents in a safe or fire-resistant box that is built to withstand at least 30 minutes of fire up to 1,550 degrees Fahrenheit.