Financial Precautions Tips To Take During COVID-19 Crisis
From wearing a mask to limiting social interactions, many of us are taking precautions to curb our chances of becoming sick with the coronavirus. But how many of us are taking financial precautions to make life easier in case we do get sick?
A few tips from financial planner Sarah Behr to learn how to make sure you’re prepared in the event of a major illness.
1. Save up money if you can: Think about putting together an emergency fund that can cover your fixed expenses for three to six months in case you’re unable to work.
2. Put together these three documents: At the bare minimum, everybody should have a power of attorney, an advanced healthcare directive and a will. There are statutory documents accepted in California that can be printed off, signed and notarized.
Power of Attorney - allows you to designate someone who can access your financial accounts, such as your bank account, your investment accounts and your retirement accounts.
Advanced Healthcare Directive - nominates someone who can make healthcare decisions for you if you’re incapacitated. Someone may feel they can trust their best friend more than their parent who lives out of state. You may want to designate two people if one of them lives out of state and could have difficulty getting to you quickly. Designating two people could also be a good idea if one of them lives with you, in case both of you become ill at the same time.
Will - allows you to have control over who receives your possessions, such as your car and your collection of books, as well as your pets. Depending on the type of work you do, you may have digital assets you created such as photography and writing. Wills also allow you to have control over items of sentimental value. Everybody has something.
3. Update your beneficiaries: Your retirement accounts always need to have a beneficiary. If you’re married in California, by law, it’s your spouse, who can waive that if they choose to. If you have a minor child, the child should not be the beneficiary.
4. Automate your payments: Make sure your rent and utilities are being paid automatically, if possible, and in full.
5. Consolidate your accounts: Do some housekeeping with your bank accounts and investment accounts. Sometimes we end up with an old account from a previous job, and it’s helpful to tidy stuff like that up in case you’re incapacitated and a loved one needs to access your accounts to pay for rent or other expenses.
6. Use a password aggregator: So much of our financial life is online. You should be using a password aggregator, such as Dashlane or LastPass, to protect all of your accounts from identity theft. Password aggregators allow you to designate an emergency contact who can request access to your passwords. For instance, if you were to get really sick, this person may need to turn off services such as Netflix, Hulu and Amazon Prime to save money. A password aggregator enables you to set up a way for them to have access to your accounts to do this.