Is GoFundMe your Financial Plan?
Julie Hupp, CDFA®, CFP®
Just this week, I have seen two Go Fund Me requests for an unexpected death. As a mom, woman, and a citizen, I am sad when I see Go Fund Me requests. I am usually compassionate about the subject, and often feel compelled to give. What an amazing mechanism to help those in real need and suffering.
However, as a Certified Financial Planner™ professional, I am sad and frustrated that a family had to rely on this public mechanism to fund a personal tragedy. Not all families have the means to cover these items, and some of these requests really cannot be planned for, but my comments are intended for those middle-income and above families who do have the ability to make smart choices about their money and protect themselves and their families. Do you really want “Go Fund Me” to be your family’s Financial Plan?
How can families better avoid this situation?
Get Life Insurance
You hear it all the time, but I am amazed how many people are not sufficiently covered. Life Insurance coverage is typically very cheap. (Look at Term coverage) Use your company plan or get outside coverage or do a combination, but get coverage. Get enough coverage! $250,000 is not enough for a 40 year old person to offset the income of a lost spouse, put kids through college and deal with any psychological issues that come with grief. Don’t be cheap here!
If a fatal tragedy should occur to you, would you want to know that your family had to create a “Go Fund Me” account because you did not get the insurance coverage you kept meaning to get? Please call your insurance agent today and get enough coverage. (A good financial plan can calculate what that amount should be).
Create an emergency fund
Saving in your retirement plan should not be your only savings strategy. Put money into a savings account that you do not touch except for real emergencies.
Know where you are spending your money
When you know where you spend your money, you know what is a necessity and what is a “nice to have”. When something requires you to tighten your belt, you will know where this funding can come from.
Before I am criticized for being uncompassionate, please know that I have been through my own personal tragedy and speak from experience. In a one year period of time, my husband lost his job, my son was diagnosed with cancer, my business suffered due to the financial crisis as well as my limited ability to work. While I did have concerns about our finances, they were not as all-consuming as they might have been because we had made smart, disciplined choices about our money. Yes we received some help from friends and family, but most of that help took the form of support and services that gave us more time to spend with our family.
My goal for everyone is just to sleep better at night when tragedy strikes. Removing the financial strain during these periods means your focus can be on yourself and your family. That is the gift that money cannot buy.
Aspire Divorce Solutions