Mental health issues, which are often poorly supported in health plans (a situation that may be complicated if your kid is out of state) or an accident that requires more PT than your plan allows. Most people don’t find the gaps in the insurance until they need a service that has limited coverage.
Definitely agree about health care and health insurance costs.
Also, one kid has a 20-year-old car and one has an 18-year-old car. They are both out of state for college without their cars. I’m about to get charged $1500 for the next six months for both cars to sit in my driveway and not be used. I have tried to work with the insurance company to find other options and have gotten other quotes but haven’t found a better deal. Ugh!
Can’t you remove everything but fire and theft if they’re not being driven? Honestly for cars that old, I wouldn’t even bother with the fire and theft!
I cannot think you are paying 3K a year for insurance on just 2 worthless cars? I can’t see it working like that. You are insuring your kids to drive all cars in your household, just taking those cars off can’t be 3K a year. How much is your household total? Do you (all/some) have insurance history of note? IME of this discussion, the people that seemed to be getting a discount of what they considered value for their OOS kids on car insurance were already paying over the odds, using a broker, older people. The rest of us get maybe $200 a yr pandering $$ LOL.
The minimum car insurance on an old car is “liability,” It’s in case of an accident where you’re at fault. First thing to go is “comprehensive.” like fire and theft. Depends on any state regs. Also, insuring young males is already expensive.
But I think the OP intention was big expenses or losses, not an extra 1k here or there. Eg, losing a job (and on top of that, the crazy costs for COBRA.) Or a stock market crash. Or major medical expenses (also when they force trips away from home, for care.) And the total devastation of a death.
You can drop liability too if it’s not being driven and is off the road (at least in our state). My parents have a dealers license (mainly because my dad just likes cars). They always have a shed full that are dropped to fire and theft while being stored.
For me it was a totally unexpected divorce – my ex had been carrying on an affair (I had no idea) and I didn’t catch on until it had been going on for almost 2 years. Legal fees related to the divorce and custody as well as me having to pay him because he didn’t work was ugly and really hurt me financially in a lot of ways including the kids educations.
DH got kidney stones, which had to be removed in two separate procedures. Because of his bleeding disorder, we maxed out our OOP amount on our lousy individual policy. Weren’t planning on that!
OMG … I want to faint just thinking of that
For us, the surprise expense of this year was pet hospitalization. It was only one night stay but the bill was $3,000!!!
The kid’s a freshman, and we already had to buy a car. Now we’re just waiting for disaster to strike again.
You may have a rare insurance policy with good mental health coverage, but that one effective therapist your kid really clicks with is out of network or does not accept insurance. This happened to us when both kids were in middle and high school. There was a crisis period of about 6 weeks when our out of pocket psychiatry bills were $900 a WEEK. We are savers and planners, and we are fairly comfortable, but I’m not going to say that didn’t bite. And it was out of the blue.
Planning is something everyone should do, but wealth is not forever, and even the very wealthy could take a huge hit from a market crash, a lawsuit, criminal activity or a catastrophic disease. You go in with the best information you can find, but you cannot predict disaster.
Sick pet cost me about $6,000 in vet bills last year that was not expected.
@itsgettingreal17 Ouch!!! It’s very difficult where to draw the line when it comes to pets. Sigh…
For me it was my divorce. It was a bit unexpected and fast (good and bad). What I was able to do was to carve out D2’s remainder college tuition out of the settlement. I also lost my job about the same time, but I got a good severance and was able to get another job.
Life is unpredictable. Both of my kids went to an expensive private school from K-12. During those years, we’ve lost our jobs with 2 failed businesses, but also with a lot of wins. I always made their tuition payments as my first priority. During of those market down turn, I didn’t have enough cash on hand to pay for their tuitions and didn’t want to liquidate my stocks. It was one time I asked their school to wait for my next bonus payment. The school worked with me on it. Since then, I tried to have their tuitions set aside in cash 3-6 months ahead of payment.
I also prefer to have the next tuition payment liquid at all times. If I want to realize gains from the 529, I pay from there. If not, I pay from the liquid funds. 2008 taught me that my comfort zone is this set up, regardless of any “missed opportunity” from having the next payment liquid. I see no clearer definition of short term money than that next tuition payment.
It is hard to predict what may happen during the college years, and this is why I think college budgeting must include proper insurance coverage.
All your assets should be protected. You should have adequate home and auto coverage. If you live a flood zone, you should have flood insurance. At a certain level of assets and income, you should have an umbrella insurance.
You should have proper health insurance. Ideally should also have dental and vision insurance.
Then I think one should have enough life insurance to cover college expenses for all children because unexpected deaths sadly do happen. I am surprised by the number of fairly young people that have died in my neighborhood due to cancer, heart attack and even the terrorist attacks back in 2001. Finally one should have extensive short and long term disability insurance because the probability of becoming disabled at least for a while is quite high.
Insurance is not cheap but I think it is unwise to stretch financially and cut into coverage to send a child to an expensive college when other options exist.
And finally, because unemployment insurance is not adequate in this country, one should have an emergency fund set aside to offset a potential loss of income for a few months.
Given the age and seniority of many parents here, the size of an emergency fund should be measured in years, not months, of living expenses. Many career paths have “up or out” characteristics, so that someone with high seniority in his/her type of job may not be able to find a comparable job, and may not be considered for midlevel or entry level jobs either because employers perceive him/her as “too expensive”.
We had one kiddo that spent one year more in college than we had planned on and budgeted for, due to some chronic health issues and depression from relative’s death. Fortunately we were able to juggle and pay for that unexpected extra year of private U.
Now, we are supporting her 100% because they still can’t cure her chronic medical condition and she can’t predict how much time she can be functional during any given day—hard to have a job without this basic skill.
Does she have skills to do a job that can be done independently and self-scheduled? E.g. artist can make art, CS graduate can write phone apps, etc… If so, that may be something that can help here, even if it may not provide enough income for full self-support.