Life can be unfair
Posted by Faith, 3 September 2009
One in six of us will die before we turn 65.
We don’t get to choose who this will be. So yes, it could be you and it could be me. The emotional hole you leave in your family’s lives may never be filled, especially when compounded by difficult decisions like:
- Will we have to sell the house to pay the bills?
- Where can we afford to live and will it be near to supportive family and friends?
- What about the children’s education that we had planned for?
What would happen if you had a serious illness such as cancer, heart attack or stroke before age 65?
The statistics say you will recover, but could be out of work for over a year. Would you be able to pay your mortgage for a year or more? You could try and sell your home and then perhaps trade down, or rent instead. In a good market, this could work, but in a depressed market it could take months to sort this out. Some financial institutions now offer you the chance to take a contributions holiday on your mortgage. This allows you to stay in your home without paying the mortgage for awhile. But this can be very costly, as shown by these numbers:
- Assume a $250,000 mortgage with an interest rate of 7.50% per annum.
- No repayments for one year (principal and interest)
- Total additional interest at the end of that year - approximately $19,400
- New mortgage balance in one year - $269,400.
How would you manage if you had an accident or lengthy illness and you couldn’t work for up to 6 months?
What are you prepared to give up in your life for six months because you could no longer afford it? That trip to Fiji you have been longing and saving for? The new kitchen or bathroom which has been planned for years? Simple things like fish and chips with the family on Friday nights? Birthday and Christmas presents for the kids? New tyres on the car to make it safe and to get through the next WOF?
Even those who keep fit might need an operation to replace one or both hips, costing $16,000 per hip.
Typically the public waiting list for a hip replacement is several months, often over a year. Are you prepared to live on painkillers for that long, losing sleep every night because you have to get up three or four times to relieve the cramp? It takes you half an hour to get dressed in the morning, when it used to take ten minutes and someone else has to help you.
Life is unfair. We can’t choose if these things happen to us, but unfortunately they can happen to us. The emotional burden alone is difficult to deal with, but add onto that the financial strain of keeping the household running and you have a recipe for disaster.
You do not have to protect every risk in life, but it is foolish these days to assume it won’t happen and to hope that someone else will pick up the pieces when it does. Consider your risks, insure what you can’t afford to lose and make conscious choices to care for you and your family.
Financial Awareness Week in September (6 to 13th)
Financial Awareness Week is about just that - being more aware and financially responsible. We all work so hard to build a life, so don’t let the unexpected tear it all down.
Protect what you can’t afford to lose and cover the “What ifs” is the 3rd of 6 key steps promoted as part of Financial Awareness Week:
Review your insurance needs this week and if you see a gap, go to www.ifa.org.nz to find an adviser who can help.
The 6 key steps for Financial Awareness Week are:
- Plan your financial life - Ready, Set, Goal!
- Make the most of what you've got - Make it, Save it, Spend it!
- Protect what you can’t afford to lose - Cover the “What ifs”!
- Manage your debt - Swim, Don't Sink!
- Grow your money - Make Dreams Real!
- Secure your retirement - Plan to Work Less (or not at all)!
Find out more how one person made a positive difference with insurance - the story of Sara and her family in Nothing Else Matters.
Next week I’ll be giving you lots of tips for the next step to financial success - Swim Don’t Sink, Managing Debt.
Want more out of your life and money? Then buy my book Keeping the Faith - Travel the World. Beware - it is very powerful! It was awarded a top 5-star rating by the on-line financial bookstore Good Returns, along with the warning: "This book changes lives." Click here to buy Keeping the Faith - Travel the World.
See previous blogs:
Don't sweat the small stuff.
Can you grow a money tree?
What's holding you back?
Money or your life - which has more value?
The seven secret thieves
Five questions to change your life
Find that spark
Switching lives - what would you choose?
Who can I trust to help grow my money?
How to swim in a sea of money
Life can be unfair
The rule of happiness
No way to live
Anyone can be good with money
Best ways to warm up winter
Who wants to be a millionaire?
The secret of wealth
Keeping your money safe
Having it all
Win an all-expenses-paid trip for two to Europe (Part 3)
Win an all-expenses-paid trip for two to Europe (Part 2)
Win an all-expenses-paid trip for two to Europe (Part 1)
Make a change for good
A recipe for a happy Christmas
Nothing else matters
Rage, rage against the dying of the light
Make a wish come true
Buying or Selling a House – Those that care least, usually succeed
When is a good time to buy a house?
Sleepless Nights in a War Zone
Transitions - more life or more of the “same old, same old” boring stuff?