What would happen if...? (Future finances)

matchboxfull · 11 January 2016 at 3:27PM

I don't know if this thread has a natural home on any particular part of the forum, but it's kind of about planning around your family, so I am putting it here.

Basically, I am just being nosey. We're starting to look at being proper grown ups with money and asking ourselves lots of questions. I wanted to know how other families answer these questions. They're all about how you'd cope financially with things going awry. Things like:

a) What would you do if something like a fridge, washing machine, or set of tyres blew up? How would you pay to replace them?

b) What about something more expensive, like a car or a boiler?

c) What would happen, financially, if one of you lost your job through redundancy?

d) And what about long-term ill health?

e) And of course, finally, what would happen - money-wise - if one of you died?

I'll put my answers in the comments. I'd love to hear your answers too, if only to get some gauge on what is normal.

If you haven’t already, join the forum to reply!
[purplesignup][/purplesignup]

heartbreak_star · 11 January 2016 at 3:30PM

matchboxfull wrote: »

I don't know if this thread has a natural home on any particular part of the forum, but it's kind of about planning around your family, so I am putting it here.

Basically, I am just being nosey. We're starting to look at being proper grown ups with money and asking ourselves lots of questions. I wanted to know how other families answer these questions. They're all about how you'd cope financially with things going awry. Things like:

a) What would you do if something like a fridge, washing machine, or set of tyres blew up? How would you pay to replace them?

From savings

b) What about something more expensive, like a car or a boiler?

From savings

c) What would happen, financially, if one of you lost your job through redundancy?

Careful management of redundancy money and straight into a new job if possible (this is me at the moment)

d) And what about long-term ill health?

You manage - not much else you can do really

e) And of course, finally, what would happen - money-wise - if one of you died?

As above, but with (if you're sensible) an insurance policy to cover funeral.

I'll put my answers in the comments. I'd love to hear your answers too, if only to get some gauge on what is normal.

Answers in purple from me

HBS x

matchboxfull · 11 January 2016 at 3:36PM

a) Would come out of small pot of savings/slash monthly budget.

b) No idea! We don't have thousands saved up so, in all honesty, it would have to go on a credit card unless it was something we could reasonably do without while we saved.

c) He has a decent redundancy package and is (hopefully) employable so not too worried about this one.

d) If my OH got ill he'd be on full pay for 6 months followed by half pay until retirement (providing he still couldn't work). We'd also get to draw down a small pension early. This amount of money wouldn't be enough to keep us in our current lifestyle, though, so we might have to down-size and cut back. If I had to care for him I guess I'd get a carers' allowance??

If I were long-term sick I'd probably need some kind of help caring for the children, depending on the illness. We've been thinking about critical illness cover but it's so expensive!

e) We both have reasonable life-insurance. If he died I'd be able to pay off the mortgage (that we're currently applying for) and have enough money to not have to work. I'm insured for less, but enough to help lubricate the childcare costs he'd be left with.

bugslet · 11 January 2016 at 3:43PM

matchboxfull wrote: »

a) What would you do if something like a fridge, washing machine, or set of tyres blew up? How would you pay to replace them?

Savings. I have 3k for emergency stuff in an easy access account.

b) What about something more expensive, like a car or a boiler?

I don't know about a car, I've always had a company one. Boiler, well that's either savings or might put it on a credit card and pay off over a couple of months.

c) What would happen, financially, if one of you lost your job through redundancy?

Work for myself. I'd have whatever the company had left + sale of assets

d) And what about long-term ill health?

Have a payment protection insurance, which would give me a basic income, critical illness, have overpaid the mortgage so I could take a holiday if I wished. And the above applies as well.

e) And of course, finally, what would happen - money-wise - if one of you died?

There's only me. A friend has PoA to deal with any of the finances.
.

Ten letter rule

mai_taylor · 11 January 2016 at 3:47PM

a) What would you do if something like a fridge, washing machine, or set of tyres blew up? How would you pay to replace them?

Savings

b) What about something more expensive, like a car or a boiler?

Some savings but might need to dip into credit card, H's income is set to rise over the next few years so shouldn't be a problem.

c) What would happen, financially, if one of you lost your job through redundancy?

There are always jobs is H's profession, he once lost his job and got another one the next day. If I lost mine I'd just try and get anything for a while (work in a supermarket).

d) And what about long-term ill health?
We have critical illness cover, we haven't really thought further than that other than to try and get some more savings behind us.

e) And of course, finally, what would happen - money-wise - if one of you died?
We have life insurance.

DUTR · 11 January 2016 at 3:48PM

matchboxfull wrote: »

I don't know if this thread has a natural home on any particular part of the forum, but it's kind of about planning around your family, so I am putting it here.

Basically, I am just being nosey. We're starting to look at being proper grown ups with money and asking ourselves lots of questions. I wanted to know how other families answer these questions. They're all about how you'd cope financially with things going awry. Things like:

a) What would you do if something like a fridge, washing machine, or set of tyres blew up? How would you pay to replace them?

Blow up?
repair or replace depending on practicality/price.
b) What about something more expensive, like a car or a boiler?
repair or replace depending on practicality/price.
c) What would happen, financially, if one of you lost your job through redundancy?
Until the party finds another job, buckle up.
d) And what about long-term ill health?
buckle up
e) And of course, finally, what would happen - money-wise - if one of you died?
buckle up until a new partner is found.
I'll put my answers in the comments. I'd love to hear your answers too, if only to get some gauge on what is normal.

It all depends on individual circumstances.

Goldiegirl · 11 January 2016 at 4:08PM

a) What would you do if something like a fridge, washing machine, or set of tyres blew up? How would you pay to replace them?

Savings

b) What about something more expensive, like a car or a boiler?

Savings
c) What would happen, financially, if one of you lost your job through redundancy?

N/a - our income is from pensions
d) And what about long-term ill health?

Same - pensions carry on in ill health as well as good

e) And of course, finally, what would happen - money-wise - if one of you died?

We've done our best to work things out so that the survivor has enough pension and savings to cover living expenses

It all depends what age group you are in

ravilious_fan · 11 January 2016 at 4:17PM

Great thread! Not sure my answers are very good though

a) What would you do if something like a fridge, washing machine, or set of tyres blew up? How would you pay to replace them?

Hopefully OH has enough savings to cover it.. We could possibly get a 0% loan if we were absolutely desperate.

b) What about something more expensive, like a car or a boiler?

Boiler is landlord/housing association's responsiblilty. We don't have a car.

c) What would happen, financially, if one of you lost your job through redundancy?

Rely on state welfare

d) And what about long-term ill health?

NHS..

e) And of course, finally, what would happen - money-wise - if one of you died?

This I don't know. No kids, no 'estate'. Both living in HA property. I do often wonder if I should be trying to save or pre-plan for funeral costs.

fairy_lights · 11 January 2016 at 4:38PM

Emergency savings.

itsanne · 11 January 2016 at 4:46PM

a) What would you do if something like a fridge, washing machine, or set of tyres blew up? How would you pay to replace them?

Savings

b) What about something more expensive, like a car or a boiler?

Savings

c) What would happen, financially, if one of you lost your job through redundancy?

OH and I are both retired now. Previously, we would have found another job but would have managed for a while until that happened.

d) And what about long-term ill health?

Pensions wouldn't change. When we had kids at home, we should have taken out critical illness insurance (but didn't). Doing things over, I would have critical illness cover.

e) And of course, finally, what would happen - money-wise - if one of you died?

We'd both be okay financially. The mortgage is paid off but we could down-size if necessary. When we still had a mortgage, that was covered by life insurance and when we had kids we had enough life insurance to compensate for the loss of an income too - even when money was very tight.

[Deleted User] · 11 January 2016 at 6:10PM

In order financial disasters, I'd be going for:

1, Insurance (kitchen appliances are covered for breakdowns, so is car/most of the house for accidents, my life insurance won't pay off the mortgage but will make a massive dent in it)
2, Savings
3, Loan / Interest free credit card spread over a few years
4, Ask family for help (Super emergency contingency)

What would happen if...? (Future finances)

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