CVC Patient Billing Specialist Lara Dodd, a certified financial health counselor and debt settlement specialist, outlines how you can use life stages as a guide to plan for your financial future.
It’s hard to make a financial plan. The unknown can be quite scary. Those facing chronic illness often must start planning much sooner than others. Planning for each part of the typical financial life cycle can ease some of the burden when you face difficult decisions or unexpected costs.
Navigating an unexpected financial burden
George Bernard Shaw said, “Life isn’t about finding yourself. Life is about creating yourself.”
This year my parents have me thinking about the life they created, its different stages—and the importance of advance care planning. My father, who is 75, suffers debilitating complications to seven back surgeries. Recovery has been slow, with weekly physical and occupational therapy, doctors appointments, and readjustments to a new normal.
A major complication for the latest surgery was both physical and emotional—his loss of mobility means no more driving and few stairs. He gets around the house with a wheelchair or slowly on his walker. My mother turned their living room into his temporary bedroom and, without notice, became his primary caregiver.
Illness placed a huge burden on my parents financially—from adapting their three-story house to accommodate my father’s needs, to ultimately deciding to leave their house of 34 years and move into a retirement community.
An accelerated timeframe
My mother told me they always had a two-year plan, but they were forced to expedite that by selling their house and moving to an independent living facility within six months.
My sister and I weren’t prepared for the accelerated timeframe in which my parents decided to sell their house. Though my parents also hadn’t imagined such a short timeline, they knew this day would come eventually, and the plans they had made readied them for these unexpected changes. I spent countless weekends packing up my childhood home—filling boxes with Kentucky Derby glasses from my grandparents, cherished photographs, and my father’s beloved gardening and cookbooks.
My family and I just spent our last Christmas in the house where we grew up. I’m not sure anyone was entirely ready for it, but deep down I know it’s the best thing for my parents. I’m so glad that, because of the planning they did throughout their life stages, they were able to mitigate the unexpected costs they faced without sinking into debt. Because of the work I do each day to support individuals facing a chronic illness, I know that many aren’t as prepared as my parents were.
So how can you prepare for the future?
Part of preparing for the future financially is envisioning what you want your future to look like. It’s going to be different for everyone. We all have different goals, realities and things we want to accomplish in life. Think about making a five- or 10-year plan. When you start envisioning it, jot down your goals for your career, your family, and even for retirement.
Remember: You can always come back to them and make changes along the way, but the most important thing is that you take the first steps.
Here are some tips for planning for your future:
1. Career planning
When you’re thinking about your career, ideally you’ll seek something fulfilling that also meets your financial needs. Think about compensation as much as possible, especially what benefits you’ll need to lead a healthy life. Compensation can come in many forms beyond your hourly wage such as bonuses, low-cost insurance benefits, flexible scheduling, robust retirement options, or continuing education reimbursement. In the long-term, you’ll want to consider your financial well-being and the right path to get you there.
2. Debt and savings planning
Debt planning is just that: planning on lessening debt without getting more of it and saving for the future. Goals around debt and savings planning involve putting an adequate portion of your income towards paying off your debts and saving for life’s expenses. You might plan for expenses such as housing repairs or annual tax increases, having children, and “unexpected” emergencies like the cost of a flat tire or travel for a funeral.
Though unexpected in the moment, we all know we are bound to experience some of these things at some point. Your first goals might be to develop a savings plan and create a budget to help you with unexpected expenses and build your nest egg over time.
3. Retirement and investment planning
When you’re thinking about your finances, you should also identify and prioritize your financial goals. If possible, work with a financial advisor to help manage your money, begin investing, and review your plans for retirement. Financial advisors can provide insight into what kind of insurance you should have and any tax implications for your estate (more on that later). Knowing where you want to go and how you’ll get there will help your advisor understand your life and financial goals.
Many free or low-cost financial planning tools exist. Try one of these resources:
- The U.S. Securities and Exchange Commission has a variety of free tools that can help with some of the services offered by an advisor, including sections for seniors and caregivers.
- Marketwatch offers five ways to find free financial advice.
- The Foundation for Financial Planning also collects free financial planning resources.
4. Insurance planning
As mentioned, financial advisors can help you determine what types of insurance you should have (including long-term care, life, health, and others) now and in the future. Adequate insurance will help you during unexpected job changes, a health crisis—whatever curve balls life throws your way. Because certain types of insurance have specific eligibility requirements or can become more expensive over time, this financial planning step is important to consider as early as possible.
5. Estate planning
Planning for your estate should never be overlooked. It may be difficult to talk with your family about what happens after you pass away. But it’s a conversation you’ll need to have as you’re preparing for your future. Speaking with an estate planner will ensure that your wishes are carried out and your possessions will go to who you see fit. Don’t overlook planning for this part of your life. Think about your loved ones now and protecting your family, as well as removing some of the burden from them in the future.
The hardest step
Don’t forget that beginning life cycle planning is the hardest step. Life planning is as important for you now as it is for your future—the sooner you make plans the better. Once you go through the process you’ll see what’s it truly about: giving peace of mind to you and your loved ones.
For me, these past few months have been about an overwhelming sense of happiness, nostalgia, and love when I’m at my parents’ house. As the pictures were taken down, fragile things packed with care, and boxes strewn everywhere, I could see that we created this place we called home—and this life. My childhood home was always there for my family and me and it will be there for another family.
When I take one last look around I’ll remember the memories and know that we’ll be creating more in a new place my parents will call home. And a new home was made possible because they thought about this stage of life in advance.
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