Lynda Moore explores the implications for your finances when illness strikes, whether you are a business owner or employee

I may be stating the obvious, but there have certainly been some very nasty bugs going round, and a lot of illness for both children and parents. I’ve had my fair share as well. More on that shortly. 

When you think about it, we spend a lot of time planning for the good things in life. Holidays, renovations, retirement, a new car, perhaps even a few adventures we’ve been promising ourselves for years.

But there’s another part of life that is harder to plan for: what happens when someone becomes unwell.

Not the occasional sniffle or a day on the couch with the flu, but the kind of illness that suddenly changes your plans. You might be unable to work for a while, someone in your family might need your care, or your business might have to carry on without you.

And the tricky thing about illness is that you often don’t know when it’s going to hit and how long it is going to last.

I’ve been going through exactly this in my own business. We are a fully remote team of three, so even if one person is away, it makes a big difference to workflow, client service levels, and then onto cashflow if work can’t be completed and invoiced in a timely fashion.  

It started with my Office Manager who had emergency surgery two weeks ago. There was no carefully planned time off, no convenient date in the diary and no opportunity to gradually hand everything over. Something unexpected happened, and suddenly work and normal life had to stop while she dealt with what was in front of her. She is recovering well thank goodness and will be back on deck soon. Fortunately for the business, her timing wasn’t too bad, month end billing had been done. But I had no idea how to access her emails or do a simple task like put an out of office reply on it.  She did all the techy stuff for me. We had no contingency plan for this. 

When illness strikes the income can stop (or drop), but the bills don’t care, they still need to be paid. 

For an employee, being unwell can mean using sick leave, having reduced income or eventually facing a period without income. For a business owner, it can be even more complicated.

If you are the person who brings in the work, sees the clients, makes the decisions and keeps everything moving, what happens when you can’t do any of those things? 

The mortgage still needs paying. The electricity bill still arrives. The groceries still need buying. Business expenses continue, even when you aren't working.

And then there can be additional costs associated with being unwell. Medical appointments, treatment, travel, medication, help around the house or childcare can all add up.

None of this means that you should spend your life worrying about what might happen. But it does make you realise that financial resilience isn't just about having money for the things you want to do. It is also about having some capacity for the things you didn't plan for.

There is another side to this that we don't always think about. What happens when it is your partner, parent or child who becomes seriously or chronically ill?

You might not be the person with the diagnosis, but your life can still change considerably.

You may need to take time away from work to become a carer. You might reduce your hours, turn down opportunities or stop working altogether for a period of time. At the same time, the household may be dealing with additional expenses and a reduction in income.

That can be a difficult combination. There is the emotional worry about the person you love, and sitting alongside that can be the very practical question of, "How are we going to make this work financially?"

Those two things can feed each other. Financial uncertainty creates stress, and stress makes it harder to think clearly about money.

Mental wellbeing is part of the picture too. Illness isn't always something you can see.

My other team member has been supporting his partner through her cancer treatment for quite a few weeks. He was doing well and managing to juggle work, his own life and being with her.  I was watching him carefully and could see that he was really struggling, and I decided that he needed a week away from work to focus on his mental wellbeing. It was a reminder that sometimes stepping away is exactly what someone needs, even when there isn't an obvious physical illness that everyone can see.

For a business, a week might sound manageable. But when you start adding up one person being away, another person being sick, someone caring for a family member and the owner trying to keep everything together, the disruption can quickly become significant. This is exactly the situation I found myself in, I now have both of my team members away at the same time. Definitely something we had never contemplated or planned for. But it was the right thing to do for their wellbeing. 

The answer isn't that people shouldn't take time off when they need it. Quite the opposite. Sometimes taking the time you need is exactly what you need to do.

The question is whether your personal finances and your business have enough resilience to allow you to do it without everything falling apart.

And then there is the flu. We are seeing plenty of reminders of this right now, with the flu taking people out for a couple of weeks at a time.

For an employee, being sick for two weeks is frustrating.

For a small business, two weeks can be a very different story.

Just as if I didn’t have enough with both team members down, two of my neighbours as well as me, got the sore throat at the same time.  We were comparing home remedies over messenger to see who could recover the fastest. One of my neighbours is also a business owner, and we were both thinking, we can’t take time off, we need to keep working.  After two weeks of short days, lack of energy and brain fog, it became apparent to me, that I also needed to stop, rest and recover.  I had my first sick day last week for a very long time. I resisted the urge to check email, open Xero, and kept the laptop firmly closed.  I did for myself what I did for my team.  I put my wellbeing first for a change. 

Illness can expose the weak spots in a business very quickly. What happens if the owner is the one who is sick? What happens if two or three key team members are off at the same time? Who knows what needs to be done? Who can talk to the clients? Who can access the systems? Who can make the decisions? These are questions my team and I are asking ourselves right now. We need to build the answers into our systems and processes. 

It can also expose the weak spots in our personal money plans. There is the psychological impact of money worries. 

When something unexpected happens, our first instinct isn't always to sit down calmly with a spreadsheet and work out the numbers. Sometimes we avoid looking altogether.

I don't blame people for that. When you are already dealing with illness, uncertainty and worry, opening the bank account or looking at the cash flow can feel like one more thing you simply don't have the energy for.

But avoiding the numbers doesn't make the financial impact disappear. In fact, having some idea of what is coming in, what is going out and how long your available cash might last can remove some of the uncertainty.  My first job when I came back to the office was to look at our cashflow and assess the impact over the coming months of the down time.  It was a bit scary, but now I know, I can plan. 

You don't necessarily need to have every answer. Sometimes just knowing what your options are can make a difficult situation feel a little more manageable.

None of us knows when illness might happen.

You might have a sudden event that takes you completely by surprise. You might find yourself caring for someone you love. Or you might simply realise that you have been pushing yourself too hard for too long and need to stop.

A good money plan needs to allow for real life, and real life doesn't always follow the plan.

That might mean having an emergency fund, appropriate insurance, a business that isn't completely dependent on one person, or simply knowing what would happen financially if your income stopped for a while.

We can't predict illness, and we certainly can't put a dollar value on the emotional impact of having someone we love become unwell.

But we can make sure that money isn't adding another layer of worry when life is already difficult.

Because planning for the unexpected isn't about expecting something bad to happen.

It's about giving yourself a little more room to deal with it when life doesn't go according to plan.

*Lynda Moore is a Money Mentalist coach and New Zealand’s only certified New Money Story® mentor. Lynda helps you understand why you do the things you do with your money, when we all know we should spend less than we earn. You can contact her here.