Chapter Seven: When the Unthinkable Happens: How to Make Financial Plans for Unexpected Events

By Jeffrey R. Lewis and Maria Cordone

jlewis@heinzoffice.org and mcordone@iamaw.org.

We’ve all heard stories about the elderly widow, alone and confused about taking care of her finances, losing all her savings to the “nice young man” who offered to help her and turned out to be a scam artist. Or the middle-aged woman who divorced her husband when she discovered he had huge gambling debts. While the divorce got her out of a bad situation, it left her with nothing, having to start over at age 45. Or the 30-year-old woman who lost her home and all her possessions because her spouse was severely injured in an automobile accident, and neither she nor he had insurance to cover the cost of his hospital care. Or the 55-year-old woman who had to take minimum wage, unskilled work to pay the bills because she lost her factory job due to downsizing.

The events that create financial disasters for women are generally not the things we want to think about—the death of a spouse, a divorce, a serious illness, a disabling accident, or loss of a job. While it is easier to assume these things only happen to “other people” and could certainly never happen to us, life-altering events can, and do, happen anywhere, anytime. However, just because these events are surprising or upsetting doesn’t mean they have to be financially crippling. Good planning can help to prevent a personal tragedy from becoming a financial disaster. That’s what this chapter is about—preventing a financial disaster by providing you with some basic information to help you make informed choices as you prepare to protect your future. First, there are six steps you can take to become more financially independent. Then, we discuss some potentially disastrous events—divorce, widowhood, unemployment, and medical emergencies—

and “must dos” that can help you to be prepared should an unthinkable event occur in your life.