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Have you got your finances sorted?(18 Posts)
I have a teeny tiny pension from work (only paid into it for about 8 years), we don't have insurance to cover our mortgage, we don't have life insurance, we don't have a will, we have no contingency plans for if DH loses his job or can't work through illness etc... I'm really worried but very 'head in the sand' about all of this. Has everyone else got everything sorted?
I doubt if many people feel totally 'sorted' financially, especially in the current climate. But I am that you haven't got a will, life insurance etc. Those things are basics. A will doesnt need to cost much at all. You can buy the proforma from places like WHSmith, or download one I imagine. I would get that sorted asap. And life insurance too. I know none of like to think about these things, but imagine if the worst happened. It's about protecting the people you love isnt it.
As for pensions - I do resent the hefty amount I pay into my plan each month as I would far rather spend it now! But tbh, it is money well spent. A lot of people I know, particularly women I have to say, have made virtually no provision. It's probably the easiest thing to ignore, because it's all in the future, but just fast forward mentally, imagine yourself at 65 with maybe 20/25 years ahead of you and no money. Not a nice thought.
Why not talk to a financial advisor?
I have a will - apparently only something like 30% of people actually have one. Probate is not nice without the added addition of no will for your loved ones at a time of grief.
life insurance I just have a simple cover that is index linked and thus the price increases slightly each year - this will cover my life until my youngest is 21. Allowing for the money to be used for her care and uni should she wish to go.
As for insurance cover for not working I am far to cynicla to beleive they would actually pay ot as so many clauses seem to stop this so I put away 4-5 months money as a saftey net - this I add to with a small amount monthly - the same amount that the insurance would cost a small pot that has grown to nearly 5 months cover - of course one day the money will though hopefully be mine to spend!!
Thanks for the replikes!
findtheriver, don't nag me! I know it's important, of course, it's just one of those many things which I can't seem to find time to sort out - at the moment, anything other than surviving the day is all that I have time for. It's not a case of not liking to think about it, it's just that even getting us all fed and in clean clothes for the day seems a mountain to climb. As for a will being a basic, I'd always heard that if you are married it isn't so vital, it's only if you're not married that you need one. I know it's still good to have one, just haven't had time yet. We took out life insurance to cover our mortgage some years ago - just that we haven't updates it since we took on 2 new mortgages, eeek.
I wonder if I actually need life cover? My husband has it through his pension but I bring nothing to the family financially anyway, so if anything happened to me then we wouldn't be any worse off financially anyway. Although I suppose we'd have to pay for childcare, as I'm a SAHM.
You need to define what you mean by "sorted".
We have insurance and pensions and wills and savings and all the rest of the bells and whistles. But we wouldn't manage our current lifestyle if I lost my job (which is all too depressingly possible in the current economic). So not sorted at all really.
We have everything sorted but we used to think we did till I read the small print of life insurance of DH when he was on intensive care and if he would have died I wouldnt have gotten a penny!
Luckily he survived (miracle on its own)and we have sorted everything to the last detail now. It is a bit of a headache to do but such a good feeling when it is done!
Tinkjon - as you say, if the worst happened, you would need life insurance to cover the costs of childcare, so I would definitely have a look. Regarding wills, the general thinking seems to be that it's a good idea to have one, whether married or not. Also to appoint guardians for your children if anything awful happened to you both (not nice to think about I know).
I must admit, I find this kind of thing deadly boring, and tend to rely on DH to check that we have the best deals etc but it's worth an overhaul of your finances every so often.
ftr, I agree it's so boring! Boring and complicated, which is why it keeps getting put to the back of the pile!!
I think you really do know Tinkjon that you have to do it, no matter how boring!
Wills are vital even if you are married. We have had massive problems with this after my mum and her husband died within weeks of one another, with not a will between them.
Many solicitors offer cheap wills every year for WillAid, with some of the money going to charity. I think it's usually October-November they do this.
Life insurance is also vital for both of you. I'm somewhat aghast you haven't got insurance to cover your full mortgage, I must admit.
I know you say you don't contribute financially, but say you died when your children were still youngish. At least insurance would mean your husband would be either to afford childcare if that were needed, or to have a sabbatical from work for a while, or even reduce his working hours. All this would really take the pressure off. And being mortgage-free would also ease some of the strain at such a time.
I have stayed at home with the children for years, but we have actually paid for more life insurance for me than my husband, simply because he is insured for 4-5 times his salary through his employer.
Apart from this work life insurance, we have a joint policy and I also have a single policy just for me, to top my insurance up to what my husband's is. We also have a policy which would pay off the mortgage - this is a declining policy where the amount insured falls every year because our mortgage is decreasing every year. The other policies end when our youngest child is 21.
All our policies include critical-life insurance, so they would pay out not just on death but for many illnesses and conditions.
It really doesn't take long to set up these things and needn't cost all that much either.
Must add though, being 'sorted' is a bit subjective. We would actually be better off financially if one of us died or were critically ill. However, if my husband lost his job things would be a bit different.
We do have unemployment insurance, which would pay the mortgage and utility bills but not cover all our other expenses and maintain our current lifestyle such as it is. Like someone else said, the best way is to build up a savings pot to cover a few months while you get sorted out, and that's what we're trying to do no.
Otherwise, our plan B scenario would be to downsize - we have enough equity now that we could do this and be mortgage-free with only a few compromises. So I suppose that might count as financial planning of a sort!
Even luckier though, it's now going to be every year! But don't use that as an excuse - do it this year!
"It really doesn't take long to set up these things"
Oh but it does though! When you understand nothing about it, it takes HOURS to sift through all the information and to work out what you really need. And when you finally do work out what you need there are countless companies to wade through and see which is cheapest and so on - it takes a mountain of time.
Will sort out a will soon though as I know that's easy enough to arrange.
Life insurance isn't expensive so you could just get that sorted pretty quickly. Through a high st bank if you wanted. You could update the mortgage cover by making a phone call and they'd send out he paperwork. Do one thing a week. Or a fortnight. There are probably lists somewhere of the things that it's recommended that you need. Pensions are harder to work out. See my many threads on the subject.
Thanks, nkf - one thing at a time is a very good idea, I tend to see it all as a big mountain that needs sorting together but I hadn't thought of it as lots of individual little things. The mortgage cover can't be updated because the company we bought it from originally has changed and they won't increase policies and don't even sell that type anymore - they'll only pass us on to a sister company to get a whole new policy.
I have a will, the mortage covered but that's about it. I'm currently looking for another job as this one may not exist next week, which is very unsettling. I think in todays climate everyone should be grateful if they have enough money coming in to cover the bills. Forget all the luxuries for a while and don't plan too far ahead.
We are mostly sorted. I went through money supermarket for our life insurance. It wasn't too bad, although we did have to fill in forms as DH and I had pre-existing conditions (nothing too bad, just a colposcopy for me etc. and the premiums didn't go up). We chose cover with fixed premiums, which is a bit more expensive at first, but will obviously get cheaper as inflation eats away at the real cost.
Wills are also pretty easy to set up, as the solicitor will have done it loads of times before and guide you through.
The only really difficult things are the income protection things. Saving up an emergency fund isn't easy in the current climate and income protection insurance is expensive and complicated (which is why we haven't done it yet).
You may have basic life insurance included with your mortgage that at least pays that off.
We've used a IFA who is lovely simply because he comes round to the house in the evening and fills in all the forms for us, after discussing what we need. They usually get paid on commission (and almost all products give them commission) so there's no upfront fees, but some are moving to flat fees.
I found him on the Guardian money website - he now works for a firm called Positive Solutions so if you're near London I recommend them.
I'm trying to sort out annoying bits of finance before Squirmy gets born - chasing incompetent organisations, mainly, like a travel insurer who hasn't paid out 2 1/2 years on, the people who towed our car unreasonably, my mobile phone provider who have finally terminated the contract but not given me a PAC to move my number, and the county court who haven't given a hearing date in 8 months - not that I expect to see any money from my ex-tenant, but would be nice to resolve the issue. All bits of admin that involve hanging on the phone for ever and make me lose the will to live...
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