I will happily admit that Breaking Bad is one of my favorite television shows of all time. The evolution of Walter White into Heisenberg, and everything that happens along the way, is incredible.
For anyone that hasn’t seen the show, schedule time this winter for binging the show on Netflix. Quick synopsis, a high school chemistry teacher is diagnosed with cancer, becomes worried that he won’t be able to support himself and his family, uses his chemistry skills to begin cooking and selling meth to make extra money, madness ensues.
I love this show so much that it feels like total blasphemy to suggest that the entire premise of the show was completely avoidable. If Walter had the basic blocking and tackling of plan in place there would have been little need for him to become the most infamous drug dealer in television history. A financial planner would have suggested three things:
- Establish an emergency fund
- Stuff happens, and an emergency fund is the thing that helps us manage when it does. An emergency fund is 3+ months of household expenses that you keep in an account completely separate from your checking account. When the unexpected expense inevitably, this is where you draw money from to avoid dipping into retirement savings or building up credit card debt. In Walter’s case, this would have allowed him to cover the out-of-pocket maximum for his health insurance plan until the insurance company became responsible for the cost of treatments
- Take out disability insurance
- Disability insurance is so often overlooked but is a critical coverage, especially when one person is earning all of the income in a household like Walter. We don’t often think of ourselves as an asset, but we should. If you are earning $50,000 and plan to work for another 20 years. Even without raises, your income represents a $1,000,000 asset over the next 20 years. The value of your income typically represents more than your home, car and investments combined. If Walter had taken out a disability insurance policy he could have maintained 90% of his take-home pay if he was out of work, pay the mortgage, and have some money available to cover any of the out-of-pocket costs related to his cancer care. It wouldn’t be perfect, but he could survive
- Take out term life insurance
- Very similar conversation to above. Walter could have considered an affordable term life insurance to cover the basic needs of his family should something happen to him. Nothing crazy, just enough to cover the mortgage, any debts, and some extra to support them in the short-term to make sure no hard choices had to be made right away
That’s it, it would have been a boring short television show but Walter and his family would have been just fine with some simple financial planning.
I acknowledge that not everyone is going to want to save money into an emergency fund or pay for insurance premiums, that’s a choice we all get to make. For me, I definitely don’t have the chemistry chops to pull off what Walter White did and don’t think I would survive as a drug kingpin, so I guess I’m stuck with my boring emergency fund and insurance premiums.