How to Deal with a Financial Emergency When Your Loved One is Sick or Dies

Tags: Financial Emergency,Funeral Finance,Medical Finance,

Dealing with an unexpected illness or a sudden death is incredibly tough. Sadly, for many of us, the shock and heartache of the event itself can be just the start. Often, occurrences like this can put a huge financial strain on individuals and the wider family unit. You can find yourself needing to find thousands of dollars that you hadn’t even dreamed of including in your personal budget. 

When might you find yourself facing a financial emergency such as this? What should you do if you find yourself in such a situation?

Sudden Illnesses

If a spouse, family member, or close friend falls ill, naturally your first – and probably your only – instinct is to dedicate yourself and your time to whatever that person needs. Illness come in many forms. For some people, helping them may mean dedicating yourself to being by their side 24/7, while for others you may simply let them know you’re there if you need them.

However, if treatment is required this can add a whole new slant to the illness. Medical bills can quickly stack up and provide a huge financial strain. Even with private medical insurance in addition to Medicare, treatment can prove expensive. If your loved one is in need of urgent treatment as soon as possible, you may even be in a situation where you need to find the money to cover costs upfront.

Sudden Deaths

The death of a loved one is always a distressing time. If there is any comfort to be taken in a person dying following a long-standing illness, it’s that they and their families have had some time to both come to terms with what is happening as well as to make a start in organising their affairs. Families of those who die suddenly aren’t afforded this opportunity, and as such can often find themselves having to deal with financial uncertainty as well as with their sudden loss.

In 2017, Moneysmart research showed that the average cost of a funeral in Australia can range from $4,000 to as much as $15,000 and even beyond. For some, the $4,000 cost of a simple funeral followed by a cremation can be a lot to bear. If a loved one dies interstate or outside of Australia, bringing them home can be very expensive, before you even think about funeral arrangements and costs. The same is also true for illnesses abroad, particularly if they went on holiday without travel insurance.

Your Pets Get Sick

When we talk about loved ones getting sick, we’re not just talking about humans. Anyone who has ever had a pet will tell you how they quickly become members of the family, and the devastation when they get ill or pass away. Pets becoming ill can be particularly distressing for children, especially if you the child and the pet have grown up together.

Like any other member of our family falling ill, not doing anything to help our pets isn’t an option. However, with Moneysmart putting the price of annual veterinary care – such as check-ups and regular treatment – at $400, emergency costs can escalate far beyond this, and it is not uncommon for those with pet insurance to find themselves with care and treatment bills that run into the thousands of dollars.

So What Should I Do?

Don’t Panic

We know this is much easier said than done, but the most important thing to do when you find yourselves in any of these situations is to stay calm. If you can quickly be at peace with the notion that you might not know where to start, and that there’s no expectation actually on you to know, you will find it much easier to take a deep breath and move forward. This is especially true in the case of a sudden death, when you can find yourself having to assume responsibility for all of the affairs of the deceased.

Take your time. Try to stay calm. Write down a list of what you need to do, and call on friends and relatives to help you.

Gather Everything You Need To

The specific situation you find yourself in will dictate what it is you need to do. For example, if you’re dealing with a sudden death, you may find yourself needing to pay bills, gather assets, and even notifying an employer. Depending on the extent to which a person is ill, you could find yourself doing the same things, while in the case of a pet you will at least be able to focus on them and on raising the cash you need to.

Think about:

  • What you need or want to do to solve the financial element of the sad situation.
  • How much money you need.
  • Whether you can afford to meet the expense.
  • If you can’t afford to meet the expense, whether there is any financial help available.
  • What your options might be for meeting your expense if there isn’t any help available.

Considering Your Options and Making a Decision

Your specific situation will dictate how quickly you need to make a decision. To help you through this process, we’ve listed some of the options you may have available:

  • Use your savings. This is a solution many choose as it’s the one immediately to hand. While we understand why you wouldn’t think twice about using your savings for such an urgent matter, take some time to be sure you’re making the right decision. If you’ve been saving for a dream holiday or moving home, do you have another option for getting the money that will still allow you to use your savings for their original intended purpose?
  • Use a credit card. If you don’t have the cash immediately to hand but have a credit card balance available, this can be another solution that’s available now. Despite the urgency of your situation, you should stop to consider the consequences of using your credit card if you’re unable to repay your balance in a short time. Your interest rate could mean you pay thousands more than the actual cost of the expense.
  • Use a personal loan or a payment plan. This might be an option even if you have savings or are able to make a payment using a credit card. Taking out a payment plan may mean you can use your savings for their desired purpose, while the advantage in comparison to a credit card is that your interest is fixed and you won’t get caught dealing with revolving debt. MacCredit is a medical payment plan specialist and is a great option to consider to help you find an affordable plan in the event of such an emergency.
  • Speak to a financial adviser. If you find yourself at a loss as to what to do and where to begin, a financial adviser may be able to help you. Seek advice from someone who may be able to help you get your affairs in order and assist you in making the best decision for you and your circumstances.

Dealing with Financial Emergencies in Tough Times

Dealing with a financial emergency or a tough personal period is tough in isolation, let alone when one causes the other and you need to deal urgently with both. However, by remaining calm and taking stock of what you need to do, and the options available to help you do it, you will be able to both deal with the financial aspect of the situation while also give your family members – including pets! – the support they need.


Disclaimer:  This article contains general comments and recommendations only. This article has been prepared without taking account of your objectives, financial situation or needs.  Before taking any action you should consider the appropriateness of the comments made in the article, having regard to your objectives, financial situation and needs. If this article relates to the acquisition, or possible acquisition, of a particular credit product you should obtain and consider the relevant disclosure documents before applying for the product.

MacCredit SM