My Journey to Eliminate Debt

I am so glad that I put money aside into an emergency fund. Dad's health is not good and we will be off to hospital again in a couple of weeks. We also have made a difficult decision that it is no longer possible to care for him at home. We were surprised to be offered a bed almost immediately we had made the decision.

He is pleased about the move which certainly makes it much easier. Over the next few weeks we will have a lot of travel and accommodation costs as we get everything arranged and get him to all his medical/specialist appointments. We will have to use the emergency fund. It will be nice not to have to put it on a credit card for a change. It just goes to show that you never know what lies around the corner, despite our best plans.

I thought I might share some of the things that I have learned over the last year or so and pose a few questions for you to think over. Keep in mind these are from an Australian perspective.

First, have an up to date will. Almost 50% of Australians don't have a will. The Australian Will Registry site is an excellent place to learn more. There is some great information here. I personally think this is one area where paying a solicitor to do the job properly is worth it. Check if your will needs updating after major life events, (babies, marriage, divorce etc).

• Do you have a will?
• Is it up to date?
• Does your family know where it is kept?

Thinking about the fact we may not be able to take care of ourselves as we age is not pleasant. We all would like to believe that we will just keep on keeping on. The reality is that ill health and accidents happen to people every day and families are often left struggling to cope. A Power of Attorney can be set up to state who will manage your financial and legal affairs should you be incapable.

An Enduring Guardian can be set up so that someone else can make personal and health decisions should you become incapable of making decisions. My husband and I have both of these set up and ready, just in case. These are very powerful documents so get good legal advice before setting them up.

"Less than 15% of the population have prepared an enduring power of attorney. More than 55% of applications made to the Guardianship Tribunal relate to people aged between 30 and 5o" (Australian Will Registry). So don't think that this only applies to seniors!

• Who do you want to be responsible for your financial, legal and health decisions in the event you are unable to care for yourself?
• Have you discussed this with family?
• Have you had legal advice regarding this?

In Australia we have one of the lowest organ donor rates in the world. It is important that you let your family know of your wishes so they are aware of what you want. Read about organ donation here.

• Do you want to donate your organs after you die?
• Have you discussed this with your family?
• Have you registered?

There are so many types of insurance these days that it makes my head spin thinking about it! If you died suddenly is there enough money for your family to pay off debts and be taken care of until they can get back on their feet. Again I think that thorough consideration of all the options probably requires some good financial advice. We have talked this through with our accountant instead of an insurance agent. We did this because we felt he would be trying to 'sell' us anything. As a result we are now having to review and increase our insurance.

• Do you have life insurance or income protection insurance?
• How much is needed to pay funeral expenses and clear debt?
• Do you have disability insurance?
• Is it enough to pay debt, pay bills and medical expenses?
• Have you discussed life, disability & trauma insurance with your family?
• Have you received financial advice about realistic insurance needs?

Planning and paying for a funeral is another one of those unpleasant tasks we prefer to leave to later. I will do a longer post on this another day but here are a few questions for the moment.

• Is there money set aside to pay for your funeral?
• Do your family know your wishes for burial, cremation etc?
• Do your family know how to access this money? (eg insurance , pre-paid, bond etc)

That is probably enough to think over for one day. It would be easier for us to ignore these issues and just believe that illness and accidents only happen to other people. Unfortunately that can end up hurting the people we care about the most.

The legal and financial mess I took over when my dad became ill was a nightmare. But he had set up a power of attorney and kept an up to date will. Without this it would have been even more difficult and even more stressful.