Long TSA lines, crazy traffic, and more — traveling can be a stressful endeavor!
In between the packing and errands, there are some important financial tasks to prioritize. In the days before taking off for travel, it is recommended to have all personal finances up-to-date, in case of a life-threatening emergency.
As a personal finance expert, father of 4 kids, and founder of Tomorrow, I’m committed to making sure parents have guaranteed their family’s security with a few simple tasks. Getting these financial to-dos out of the way can lead to a restful, safe travel experience, and quality time with those who matter most.
Purchase life insurance
We see thousands of GoFundMe pages: tragic stories of car accidents and unexpected travel-related deaths that leave families without their breadwinner. Having an adequate life insurance plan is one of the most selfless things you can do, especially since you yourself will never use it! At Tomorrow, we make life insurance easy, with digital applications and no medical exams.
Employer-sponsored life insurance is often the simplest solution for you and your family, but it rarely covers everything you might need. Many believe their employer-sponsored plan is enough — but it isn’t. Using your yearly salary as a baseline for determining coverage, you’ll commonly see this matched or doubled through your employer. If you make $80,000 annually, for example, you can usually expect matched ($80,000) or doubled ($160,000) coverage from your job. At first glance, this can seem like quite a bit of money. However, we’ve all heard stories of young people passing away unexpectedly. Supporting your family can be much more expensive than a year’s wages.This tragedy affects not only your partner, but your children, as college costs along can number in the hundreds of thousands. Ideally, a policy should be between 5-10 times one’s annual salary to sufficiently cover family expenses. At the very least, it’s crucial to research the specifics around an individual term life insurance policy and how much it may cost to start. Figure out what makes sense for your family.
Create a will
Six out of ten Americans don’t have a will. Most people see wills as depressing, inaccessible, and expensive. Many think they’re only necessary if you have substantial assets. But if you have kids, a business, or a partner you’re not married to, it’s crucial to acquire a will. And because we want every American to have one — we’ve made it completely free (check it out here!)
When my kids were young, their mother and I were planning our first international vacation without them. My then-wife would not get on a plane with me until we had written up a will and assigned guardianship for our kids. If you’re taking a trip without kids and something happens, having a will in place will ease the burden. For individuals with children, having a guardian in place is the biggest reason to have a will — without this, the courts will decide who will take care of your kids should something happen. Here’s what to think about when choosing a guardian.
If you’re in a committed relationship — but not legally coupled — your partner is entitled to nothing should you pass away. With more and more couples living together before marriage, this is an avoidable problem by having a will.
If you own a business (and I’m assuming you do, because you’re on this site!), not having a will can severely complicate your end-of-life details, leaving your family and friends with a mess on their hands. All business — including your income — could come to a halt, and your assets and property could be held in probate. This is all avoidable with a will.
Check your credit score
Your credit score is your adult GPA and is a great marker for your financial health. Because almost every financial situation revolves around your credit score — everything from renting an apartment to getting a new credit card — it’s important to have a good sense of your credit, especially if that’s something you’ve been avoiding looking at. Checking your score is not only free with tools like Credit Karma, but takes less than a few minutes. A solid score is anything over 700 — if you’re not quite there, let’s talk strategy. Begin with low credit utilization. Applying for a higher line of credit, getting accepted, and then not using the higher line is perfect. And then there is the classic advice: make sure you’re paying bills on time and in full.
Start building an emergency fund
Unfortunately, emergencies happen. But less than 40% of Americans could cover a $1,000 emergency should the need arise. Getting an emergency fund in place should be Americans’ number one savings priority. Rainy day funds will provide the autonomy to make decisions according to what best fits your circumstances. Having to quit a toxic job, pay off a hospital bill, repair your car’s engine, or replace the flooring of your kitchen are all situations to prepare for. You want to aim to save 3-6 months of living expenses in a savings account that you could access immediately. Starting with a goal of saving $1,000 is a great place to start. And yes, this fund is ONLY for emergencies, not that new pair of shoes you’ve been eyeing.
If you consistently travel for work or are a digital nomad, these financial tasks are even more crucial, as your risk is higher for unexpected emergencies. Focusing on these financial priorities will help guarantee your family peace of mind, and that you have a smooth trip.
