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Could Your Finances Survive a BP Oil Spill?

By David Bakke

The oil currently gushing out of the Earth into the Gulf of Mexico is a tragedy of epic proportions. While I was watching the updates on television, I began to think if my finances and my family could survive such a catastrophe. What I mean by that is, If I died tomorrow, or were suddenly unable to work for an extended period of time, how would my wife and son be able to get along without my income? The thoughts were many and sobering to say the least. If I were not married and had a small son, I guess a lot of these points would be moot. But in my situation, I realized that there are a lot of things that I can do now, or look into now, that would make that time more tenable for my loved ones.

What I came up with is two lists. One list is of things that I myself can do, and the second list is of things that I need to communicate to someone. Neither list is comprehensive and as I like to do with a lot of my posts, I would like to call on our readers and visitors to add ideas to my list that they feel are relevant.

Things to Do

  1. Create a Last Will and Testament. Here is some advice on creating a will
  2. Create a Living Will (communicates your wishes regarding life prolonging medical treatments)
  3. Seriously consider short term and long-term disability insurance
  4. Life insurance policy review

Things I Need to Communicate

  1. Location of all medical records
  2. Location of all financial records
  3. List of computer passwords and pass codes for all online accounts
  4. Location of all insurance policies
  5. Burial wishes

Some quick notes on my “Things to Do”

You can read more about the options regarding a will on one of my recent posts through the link above. A living will is a simple document that you can print off the internet and fill out yourself for free, and you should definitely review your coverage regarding health insurance. If you don’t already have short-term and long-term disability, I would seriously consider it. With life insurance, review your benefits and make sure you have enough. Generally, eight to ten times the amount of your current income is an adequate policy coverage amount.

The second list is just as important. In my household, I am in charge of all things financial. I can’t even begin to imagine what my wife would do if she had to look for my medical records, my financial records, and my insurance policies. Also, I can barely remember all of my online passwords, for her it would be a nightmare. I would suggest putting all of these on one sheet of paper and storing it in a safe place inside your home and tell your spouse where it is.

Some may consider this entire topic to be morbid, but if you really care about your family, you should address it. Making sure your family will be sufficiently cared for in the event of your death or incapacitation is something that you owe to them. Doing what you can to ease this time of pain is a responsibility. God forbid if something were to happen to me tomorrow, I think there would be more than enough emotional trauma to go around. It is our duty to make sure that there isn’t a load of financial trauma as well.

(photo credit: 19378856@NO4)

David Bakke
David started his own personal finance blog, YourFinances101, in June of 2009 and published his first book on ways to save more and spend less called "Don't Be A Mule..." Since then he has been a regular contributor for Money Crashers. He lives just outside Atlanta, GA and most all of his free time is taken up by his amazing three year old son, Nicholas.

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  • http://www.castocreationsjewelry.blogspot.com megscole64

    Another thing to think about…even if you are young and not married you are able to get a much better rate on things like life insurance and disability. And at a younger age you have less health issues that will knock you out. If you have future plans for a family then it might be a good idea to invest the premiums earlier when the rates are lower.

    I can’t even qualify right now for the life insurance that my own company offers because of pre-existing health issues. But I already have a couple other policies that I am still paying a low amount because I started when I was in my 20s.

  • david

    Meg

    Great point–I never even thought of that. Just goes to show you that its never too early to think about your finances, or your future.

    Great comment!

  • http://www.firstbiggestcrime.blogspot.com/ Efcug

    The Rehabilitation Act of 1973, Americans With Disabilities Act, and prior Supreme Court cases, require that the new fund set up to compensate Plaintiff Steering Committee? attorneys, that withhold 6% of settlements, as ordered by Judge Barbier, BE JUSTIFICATION for these attorneys to provide extended representation to disabled claimants! Please bring this to the attention of US Senator Richard Shelby and others

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