Can Swine Flu Affect Your Finances?

With swine flu in full swing throughout Mexico and the United States, a number of my personal finance colleagues have taken it upon themselves to comment about how the flu can affect your personal finances. I also threw out the question in the “Twitterverse” last night and received some good reading in return.

• Philip Brewer writes about the economic effects of a pandemic at Wise Bread (@wisebread). The post points out that the economic impacts of diseases involve mostly fear – of spreading the disease to others or contracting it in a public place. We’ve also learned some lessons from how SARS and the bird flu affected the global economy to make certain assumptions about future outbreaks. But can the economic pressures of the recession force people to go to work, and are store sales already so depressed that fear will not affect shopper numbers?
• The Weakonomist (@The_Weakonomist) has written a post about what swine flu and the recession have in common. The post discusses similarities between the two when it comes to media coverage, public reaction, where they start, and how often they happen.
• Paula Wethington (@MonroeOnABudget) sent me her post on keeping routine illness from blowing your budget. Although not written specifically for the swine flu outbreak, this post is a great guide to handling time off, keeping perscription and over-the-counter costs down, FSAs (Flexible Spending Accounts), changing eating habits that affect your grocery bill, and purchasing cleaning supplies. No one plans to get ill, but read this guide to be prepared.
• If you’re out making some stock market plays due to the rising pandemic fears, read about swine flu stocks at Everyday Finance (@EverydayFinance). Stocks related to swine flu continued their rapid climb on Monday, some gaining 100% or more at the opening bell. Head over to the post for 16 stock ideas and thoughts on other sectors.

My Thoughts and Tips on Swine Flu

Although it looks unlikely that any of us will contract swine flu in the near future, the fear of an outbreak is a stark reminder that we are neither immortal nor prepared for every contingency. It’s a good time to do several things:

• Review your health insurance coverages. Now is the time to make sure you’re protected in case of an extended hospital stay caused by the flu or any other major disease. Even a few-day stay can quickly run through even the largest of emergency funds, so make sure your coverages are in place and adequate to protect you.
• Establish or boost emergency health funds. A sizable health fund in your savings account can help when it comes to paying out deductibles for doctor and hospital visits, as well as prescriptions and over-the-counter medicines. If time off from work exceeds your available vacation hours, this fund can also help to replace some of your missing income.
• Manage your time off from work. Stop using your sick days to head to the beach and save them for when you really can’t get out of bed or are hospitalized. It’s probably a good idea to always keep a few vacation days in the bank as well in case you’re out longer than expected (very likely with a major disease).
• Re-consider making travel plans. If you’re making travel plans right now, consider waiting until the outbreak is contained. If you don’t have a choice, consider purchasing travel insurance that would reimburse your trip costs in case you needed to make a last-minute cancellation because of a major outbreak at your destination.
• If you’re not day trading, stay away from your investments. I mentioned a few posts that discuss swine flu stocks above, but if your goals involve long-term investing and retirement savings, stay as far away from your account as possible and forget about chasing day-trading gains. It’s not worth the risk.

Consider what you can do today to prepare not only for the swine flu, but for any major disease. Follow me on Twitter for my latest thoughts and links.