Have You Budgeted for Death?
Two certainties in life are death and taxes, as the saying goes. Here's how to handle death.
So you think you need an emergency fund in case you lose your job?
That’s smart. But unemployment is not the end of your world. Death is.
I was on the deck of a boat in the middle of Sea of Cortez off of Baja California, watching grey whales, when one of the ship’s crew told me I had a phone call. My heart sank like an anchor dropping to the ocean floor.
I knew instantly what it meant. Someone in my family was dead or dying.
My stepmother told me that my 92-year old dad had been admitted to the hospital. It was all so sudden, as he was in good spirits when I had called him from Los Angeles on my way to Mexico. Now his days were numbered in single digits and I was thousands of miles away.
Death is Expensive
My father was unconscious by the time I broke all speed limits to get to his bedside.
I hate to put it in money terms, but that tearful dash to be with him was expensive.
However, you don’t think about the dollars when a life hangs in the balance.
Years ago, some airlines offered special fares if you had to fly at the last minute due to a family emergency.
If your close relative had already died, you’d fax the airline a copy of the death certificate in order to get some or all of the fare reimbursed. No longer.
These days, it’s unlikely you will find discounted fares for impending or actual death.
Rescheduling my original flight home to Washington, D.C. from Mexico cost $633.16. New round-trip flights from DC to Boca Raton, Florida, where my father lived, cost another $650. Add $150 for a rental car, plus gas and tolls.
My sister and I shared a hotel room that cost a few hundred dollars more. Our family lived on deli sandwiches and takeout food that we took turns paying for while dad spent his final week in hospice. I even had to extend my cat sitter’s services to the tune of $250 or so to take care of my cats back home in DC.
Fortunately, I didn’t suffer a loss of income as my employer provided paid bereavement leave.
My father passed away and I returned home.
Because I was the executor of my dad’s estate, I flew back to Florida a week later to take care of the end of life business. Again, I had to pay for airfare, rental car, meals out, etc.
My credit card bills didn’t die of course and arrived right on schedule.
Here are the three lessons I took away from the whole experience:
You Need At Least One Credit Card
There was virtually no way I could have traveled without charging the flights to a credit card. I suppose I could have used a debit card, but I don’t normally keep thousands of dollars in my checking account. And if I tried to use a debit card for the rental car or hotel, they might have put an expensive hold on funds, limiting my cash flow at a critical time.
You Need An Emergency Fund
What ALL personal finance experts agree on — without exception — is that everyone needs an emergency fund to cover unexpected major expenses.
Fortunately, I had one and tapped into it to help cover the credit card bills. Without that reserve, I might have had to pay interest on the charges.
My father, a frugal man, would have been horrified if I had racked up any debt on account of him.
You Need Travel Insurance for a Long Trip
My expedition to Mexico was a pricey jaunt and I sprung for a $511 policy that included a “cancel for any reason” option. I figured if the unexpected happened (which, as we now know, it did), I wouldn’t want to deal with arguing with the insurance company about whether my father’s condition was or wasn’t terminal.
Without getting too technical, I filed a claim based not on trip cancellation but on travel interruption because I had to change my return routing. I had a long battle (the original claim plus two appeals) with the travel insurance company. My father loved fighting insurance companies. He taught me well.
They finally reimbursed $633.16 for the return flight changes from Mexico. I got the check three months after I had fronted the original charges.
Death Is a Certainty
In total, this emergency cost me somewhere north of $2,500.
It’s virtually guaranteed that as you grow older, someone that you love will become ill or pass away. And you’ll have to drop everything you’re doing and travel.
So keep some cash in reserve in addition to the funds for the more “conventional” purposes of an emergency fund, such as job loss, medical expenses, and repairs.
Death is stressful. Don’t add financial worries by not having the cash to pay for it.