Insurance – Matt About Money Simple. Meaningful. Success. Wed, 16 Oct 2019 15:38:49 -0400 en-US hourly 1 9092505 Profitable Ideas: Reaching Maximum Frugality, Five Things to Never Buy New, and More Fri, 18 Oct 2019 13:30:12 +0000

Weekly roundup of some of the best personal finance articles from around the web.

When frugality bottoms out (The Simple Dollar). What to do when you’ve maximized savings in all areas.

How to teach your kids about money and help them be financially responsible adults (Money). Solid advice, especially for younger kids—and especially “Let them learn by doing.”

Buying less is better than buying green — for the planet and your happiness ( After all, if you’re buying environmentally friendly stuff, you’re still buying.

The asymptote of joy and woe (The Aleph Blog). A fancy way of saying, “You need some money in reserve!”

If personal finance feels like punishment, you’re doing it wrong (She Picks Up Pennies). There’s a difference between spending wisely and living a life of deprivation.

Five things you never need to buy new (CNBC). What types of things do you refuse to buy new?

Is customer loyalty costing you money? (The Evidence-Based Investor). If it’s been a while since you’ve shopped your insurance, you might be spending too much.

Dragging out a college degree is a drag on finances (Real $martica). If you have college-bound kids, the more you can prep them for what they really want to study (and what they really want to do for a living), the better. I know, easier said than done, but still..

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Profitable Ideas: Learning From Your Financial Mistakes, Cutting the Financial Umbilical Cord, and More Fri, 04 Oct 2019 13:30:30 +0000

Weekly roundup of some of the best personal finance articles from around the web.

Biggest financial regrets (The Big Picture). Another way to look at this: 10 years from now, what financial moves are you likely to regret doing or not doing?

The curious economics of being ripped off on holiday (Tim Harford). Don’t let the relaxed mode of being on vacation cause you to let your guard down. Always push back (politely) on crazy fees.

College health insurance costs vary widely. But there are plenty of options (LA Times). How do you plan to insure your college-bound kid?

Face it, we are all expendable: Financial viability countermeasures that matter (Leisure Freak). We shouldn’t live in fear, but neither should we take things for granted. Ideas on playing a good game of defense.

Match your spending with your values (The Evidence-Based Investor). Our unique design drives much of our financial behavior, but that doesn’t mean we have to live at the effect of our not-so-helpful tendencies.

10 reasons people regret buying whole life insurance (The White Coat Investor). There’s a place for whole life, but there are also lots of strikes against it.

How much economic outpatient care is too much? (ESI Money). How to cut the financial umbilical cord.

Why we should stop celebrating consumerism (Forbes). Authentic success is admirable. Owning stuff? Not so much.

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If You’re Single or Don’t Have Kids, Do You Need Life Insurance? Tue, 24 Sep 2019 13:30:31 +0000

The prudent see danger and take refuge, but the simple keep going and pay the penalty. – Proverbs 22:3

About 37 million U.S. households have no life insurance, according to industry trade group LIMRA. For many, the cost of coverage stands in the way. But there may be some, such as singles and married couples with no kids, who don’t have insurance because they think they don’t need it.

How to Know Whether You Need Life Insurance

The easiest way to determine whether you need life insurance is to consider whether anyone would suffer financially if you died. You may not need life insurance if you’re married, both you and your spouse are working full-time, and neither of you have children from a previous marriage. If one of you died today, the other may be able to handle his or her financial obligations.

Still, there are some reasons why a single person or a couple with no kids should consider buying life insurance.

If you don’t have much money in savings. You may want enough life insurance to cover funeral and other final expenses.

If you want to protect against the possibility that you or your spouse could become medically uninsurable in the future. If you developed some type of illness while you did not have life insurance, you may not be able to get a policy. Buying a policy while you’re healthy guards against that scenario.

If you want to lock in the lowest rates. Premiums for life insurance will typically go up as you get older. Buy a policy now, and you’ll lock in the lower cost.

If you have financial obligations that require both of your incomes. I don’t recommend buying a house that requires two incomes (Read How Much Should I Spend on a House?), but if you’re in that situation, you may want to have enough life insurance to be able to pay off the mortgage or pay it down so it could be refinanced and afforded by the surviving spouse.

Credit card debt held in one spouse’s name does not necessarily absolve the other from the responsibility for that debt. In a community property state, a spouse’s debts incurred after getting married may be the responsibility of the other spouse as well; state laws vary.

In states not governed by community property law, many creditors will write off the debts of a deceased person when he or she held the debt in his or her name only, but not always. In some states, if the debt was accrued through purchases of items that benefited the family, a surviving spouse may be held responsible for those debts.

If you have student loans. Check the terms of your loan. It’s possible that the loan would be discharged upon your death. However, if you live in a community property state and you took out the loan after getting married, your spouse may be liable for the debt upon your death. And if someone co-signed your loan (something I encourage people to avoid), your co-signer will probably be responsible for the debt upon your death.

Again, if someone else would suffer financially from your death, carrying life insurance would be the responsible thing to do.

Once you have children, the question quickly shifts from “Do we need life insurance?” to “How much life insurance do we need?

If you are single or married without children, do have life insurance?  Why or why not?

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Profitable Ideas: Whether Your College Kid Needs a Credit Card, The Market Will Crash, and More Fri, 20 Sep 2019 13:30:05 +0000

Weekly roundup of some of the best personal finance articles from around the web.

Can your college kid handle a credit card? (Independent Advisors). Be sure to teach them the rules of the road for wise credit card use.

My biggest FI demon — status anxiety (Monevator). Great article that expresses what so many of us experience as we try to manage money wisely and counter-culturally.

The only benchmark that matters (Reirement Field Guide). Why comparing your investment returns to “the market” can be a mistake.

Why did my car insurance go up? (Clark Howard). Did you know that using roadside assistance can count against you?

Yes, the stock market is going to crash (A Wealth of Common Sense). It’s just what the market does every now and then.

Financially supporting your adult children? Don’t let it jeopardize your retirement (Kiplinger). For parents of young kids, this is why to give them increasing levels of financial responsibility. 

Here’s when buying in bulk is really worth it (US News). I’m not sold on the “benefits” of warehouse clubs? How about you?

Can you get cancer from tap water? New study says even ‘safe’ drinking water poses risk (USA TODAY). Oh, man. There goes one frugal solution down the drain.

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Shoring Up Your Walls of Protection Tue, 03 Sep 2019 13:30:02 +0000

A prudent person foresees danger and takes precautions. The simpleton goes blindly on and suffers the consequences. – Proverbs 22:3

With Hurricane Dorian churning in the Atlantic, I’ve been praying for loved ones who may be in its path, and I’ve been thinking about our homeowner’s insurance coverage.

I still get a feeling of dread in the pit of my stomach every time there’s a severe thunderstorm or tornado warning in our area. It’s been that way ever since the summer of 2010 when we were living in the Chicago area and experienced one of the worst storms our community had ever seen.

It was dinnertime when the skies turned an ominous color and the winds started howling. I flipped on the radio just in time to hear that a tornado had been spotted nearby, so we took shelter in the basement. Since the news reports said the storm was moving quickly, I figured we’d be back upstairs soon enough.

But then I heard a disturbing sound coming from our basement bathroom, the sound of water gurgling. It was coming up through the drain in our bathtub. That prompted me to check our laundry room, where to my horror I saw water flowing quickly into our basement from a floor drain.

After asking my wife to take our three young children into the stairwell, I started frantically pulling what I could off the floor. Within a very short time, we had at least three inches of water covering our entire basement. When I took a minute to glance out our front window, I saw that our street was completely flooded. With the storm drains overwhelmed, the water had no where to go but up into the drains in people’s basements.

For the next three days I spent hour upon hour pulling things out of the basement, talking to various people at our insurance company, and hiring a company to rip up our laminate flooring and dry the basement with heavy-duty dehumidifiers and fans.

Here are some lessons I learned through that experience that may help you better prepare for a natural disaster.

Do You Have the Right Insurance Coverage?

If you have a basement, see if you have sewer and drain backup coverage on your homeowner’s policy. If not, strongly consider signing up. This is different than flood insurance. Fortunately, we chose to have this coverage. In fact, in reviewing our policy several years ago, I found out that our coverage totaled just $2,500 and did not cover furniture. We increased it to $5,000 and ended up needing every bit of that amount. I have since increased our coverage to $10,000.

During that same policy review, I asked about flood insurance and was encouraged to weigh the cost (about $400 per year) against the likelihood of a flood in our area. You can assess the risk of a flood in your area at (Under “Understand your risk,” click on “Flood Map Service Center,” and then type in your address).

Since we’re not all that close to a river, and because the FloodSmart site described our neighborhood as an “area of minimal flood hazard,” we’re going without the coverage.

Here are some other items to check on your homeowner’s insurance policy.

  • Do we have inflation guard? This adjusts the value of your home as the cost of building materials rise.
  • Do we have building ordinance or law coverage? This covers any added costs of rebuilding associated with new building codes.
  • How much living expense coverage do we have? Find out how long your policy will pay your living expenses if damage to your home would force you to live elsewhere while repairs are made.
  • Are we covered for the replacement cost of our possessions? This covers the full value of what it would cost to replace your possessions, as opposed to cash value, which factors in depreciation.
  • Do we even know what we’ve got? If you lost all that you own, would you know what you lost? Take an inventory, at least of the major items.
  • Do we have proper riders? If you have any pricey jewelry or expensive electronic gear, check to see if it’s fully covered under your standard policy or whether a rider may be needed.

It’s also a good idea to use a video camera to create a visual record of what you own. Just walk through your home, capturing all of your stuff and describing it along with your estimated value as you go. Update your inventory at least every five years.

Some Final Lessons About Preparing for Storm Season

Another lesson we’ve learned is that when storing anything in the basement, use shelves; do not store anything directly on the floor. And store your items in plastic containers, not cardboard boxes.

And one final point: think twice before stepping into a flooded basement. As the water spread throughout our basement, I called a neighbor who actually knows something about electricity and he told me if the water is below the electrical outlets, it’s probably safe.

I risked it, walking through the water to switch off our fuse box until the water drained out of our basement, and I’m still around to write about it. However, all of the advice I’ve read since then says not to set foot in a basement that has taken on water. Instead, you’re supposed to get your electric company to turn off the power from the outside of your house.

Have you learned any lessons about homeowner’s insurance or disaster preparedness that could benefit others?

Profitable Ideas: The Company You Keep, Insuring Against a Disaster, and More Fri, 30 Aug 2019 13:30:28 +0000

Weekly roundup of some of the best personal finance articles from around the web.

Frugal friends: 4 ways your inner circle influences your finances (Money Ning). How much you spend has much to do with the company you keep.

Easy home improvements for under $100 (Real Simple). Not sure about “easy,” but if you’re handy here’s how to change the look of certain rooms inexpensively.

The spy in your wallet: Credit cards have a privacy problem (Washington Post). “Where does it end? Nobody really knows.”

Having “the money talk” with your parents as they get older (Marriage Kids and Money). Good ideas for broaching a tough topic.

Banana Republic joins the clothing rental craze (CNN). “Craze”? Personally, I think this is kind of crazy. How about you?

How to win at money (Becoming Minimalist). Six good suggestions — steps to take, ways to think.

How a decision matrix can help you make big choices with confidence (Gen Y Planning). Faced with a big decision? Break it down into smaller decisions.

Hurricane Dorian: What does insurance cover after a disaster? (USA Today). Also check to see if you have drain backup insurance, which is different than flood insurance. 

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Profitable Ideas: When a Sale Costs More, New Thinking on the Happiness/Success Equation, and More Fri, 14 Jun 2019 13:30:27 +0000

Weekly roundup of some of the best personal finance articles from around the web.

Who doesn’t love sales? There’s just one problem: they lead us to make dumb choices (Ideas.TED). Unfortunately, many of us have trouble determining how much something is really worth. Marketers know that, and love that.

Tornados, hurricanes and earthquakes: What does home insurance cover after a disaster? (USA Today). Do you know how well you’d be covered?

Most Americans have financial regrets, but some don’t intend to do anything about it (MarketWatch). Learning from other people’s mistakes is a good way to help avoid making some of your own.

What is rational minimalism? (Becoming Minimalist). Minimalism isn’t as radical as you may have feared.

Don’t make these seven car insurance mistakes (The Simple Dollar). Are you paying too much?

What’s your purpose? Finding a sense of meaning in life is linked to health (NPR). This is not just a great starting point for a life lived well, it’s a great starting point for setting financial priorities. 

Happiness doesn’t follow success: It’s the other way around (Aeon). Sure, work on your job skills, but work on your happiness as well. Practicing gratitude is a good place to start.

To get a bigger paycheck after college, start working now (CNBC). Working while in school isn’t just about helping to pay for tuition.

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Profitable Ideas: The Financial Habits You Inherited, Becoming a 401(k) Millionaire, and More Fri, 26 Apr 2019 13:30:29 +0000

Weekly roundup of some of the best personal finance articles from around the web.

Want a good lesson in financial planning? Study how well your parents did or didn’t do (Pete the Planner). Identifying how your parents continue to influence your financial beliefs and behaviors is the first step toward deciding whether you want to retain those lessons.

Handling the financial irresponsibility of family members (The Simple Dollar). You can’t choose your family members, but you can choose how you respond to them.

Not being financially literate could cost you a bundle (CNBC). Just reading a financial blog on a regular basis (ahem) means you’re in the game. Lots of people aren’t.

How hard is it to become a 401(k) millionaire? (A Wealth of Common Sense). A good post that shows just how beneficial it is to get started with investing earlier than later.

How to protect your digital assets (Kiplinger). Your digital life has probably become more valuable than you realize.

What’s not covered by credit card rental car insurance (MarketWatch). It’s good to know what coverage you may need well before you find yourself standing at the rental counter.

3 easy ways to go zero waste and cut your trash by 80% (Going Zero Waste). This one isn’t directly about money, but it is about good stewardship.

Doing this one thing could save you $1,100 or more per year (Considerable). It’s good to develop a healthy dislike of recurring bills.

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Profitable Ideas: The Fifth-Grade Philanthropist, Closing the Bank of Mom and Dad, and More Fri, 08 Feb 2019 14:30:40 +0000

A weekly roundup of some of the best personal finance articles from around the web.

A 5th grader’s boredom while visiting her mom’s job led to $70,000 for the elderly in need (CNN). Inspiring story about the good that a young child can do.

Discipline equals freedom: The difference between deprivation and depriving yourself (Get Rich Slowly). One of them is a good thing—and an important key to getting to a good place with your finances.

Do money apps make us better or worse with our finances? (BBC). While a lot of apps can make life more efficient, some can do financial harm.

4 products on deep discount in February (Consumer Reports). Some fairly expensive items that typically go on sale this month.

House Rules (Humble Dollar). Owning a home can be a good thing—if you understand all that you’re signing up for.

Protection…or Overkill? Five Insurance Policies You May Not Need (The Simple Dollar). Some good advice to make sure you don’t overpay.

Q&A: Joshua Becker on keeping a minimalist home (Washington Post). Wondering what to do with all your books, pictures, and family heirlooms? The master of minimalism has answers.

How to wean grown kids off your payroll (USA Today). Saying “no” to your kids can be tough, but closing the bank of mom and dad will profit them in the long run.

What are your thoughts on any of the above? Let me know by leaving a comment below.

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How’s Your Financial Health? Tue, 06 Nov 2018 14:30:46 +0000

There’s a new report out that says very few Americans are financially healthy. Working with researchers at the University of Southern California, the Center for Financial Services Innovation (CFSI) developed an eight-question survey that was taken by a representative sample of U.S. adults, leading to what it calls the U.S. Financial Health Pulse. Its results were not encouraging.

According to CFSI’s analysis, just 28% of Americans are “financially healthy,” 55% are “financially coping,” and 17% are “financially vulnerable.”

Survey questions asked how people’s spending compares to their income, whether they pay their bills on time, how long they could live off their savings, how manageable their debt is, and more. For the most part, they were good questions, but the survey seemed somewhat incomplete.

If I were to develop a survey to assess people’s financial condition, I’d include the following 10 topics. As you read each description, rate yourself on a 5-point scale, with 5 being the most positive score.

Biblical financial worldview. How well do you know what the Bible teaches about money and to what degree have you put biblical financial principles into practice?

Income. While there’s no such thing as guaranteed employment, evaluate your employability. Are your skills up to date and in demand? Are you taking steps each year to hone your skills? How’s your network? Unless you’re independently wealthy, your ability to earn income is the foundation of your financial life.

Planning. Do you use a budget to proactively manage your household’s cash flow? Some people say they have a budget, but really what they have is a big picture idea in their head of how much they can spend. What I mean by a budget is a written plan that allocates your income toward giving, saving, investing, and spending.

Giving. Are you giving at least 10% of your monthly gross income to Christ-centered causes? I know some people get uneasy with specific generosity guidelines, but I believe 10% is the biblical starting point.

Saving. Would you be able to live off your savings for three to six months if you lost your job tomorrow? If you’re single and rent an apartment, you’re probably fine with three months’ worth of savings. If you’re married with kids and a house, you have what I call more breakable moving parts and should have at least six months’ worth of essential living expenses in savings. This emergency fund should be in a dedicated savings account, not mingled with your checking account money.

Also, do you save for periodic expenses, such as an annual life insurance premium, Christmas gifts, or other expenses that aren’t paid every month but will need to be paid at some point in the year? And do you save for the replacement of big-ticket items, such as your car?

Debt. Are you debt-free, with the possible exception of a reasonable mortgage—one that requires no more than 25% of monthly gross income for the combination of your mortgage, property taxes, and homeowner’s insurance, and preferably no more than 20%?

Investing. Do you know how much you should be investing to build a nest egg for your later years and are you investing that much? If you have kids, are you investing to help pay at least a portion of their college costs? And are you investing knowledgeably?

Protecting. Do you have adequate insurance—health, vehicle, homeowner’s, life, and possibly disability insurance?

Spending. Are you proactive about controlling your spending, being intentional about managing to the numbers in your budget?

Temperament. Especially if you’re married, knowing your temperament and your spouse’s temperament can be really helpful in managing money as a team. Even if you’re single, understanding how God has wired you up, and the financial tendencies that are associated with your temperament, can help you learn to play to your strengths. So, do you know your temperament and its financial implications?

Since there are 10 topics, there are 50 possible points. How did you score? While this is certainly subjective, I’d say if you got 45 points or higher, you’re in “very good” shape financially, 40-44 points means you’re in “good” shape, 35-39 points means you’re in “fair” shape, 30-34 means money is probably somewhat of a struggle for you, and anything less than 30 means you’ve got some work to do.

I know this list may feel overwhelming, but use it as a diagnostic tool that can help you develop goals for the next 6-12 months. Start with the topics where you gave yourself the lowest scores. Then search for articles about those topics on my site for guidance. Or if you’re part of a church with a stewardship ministry, see what classes are being offered and sign up.

Money is one of those things we never get fully right. We all have room for improvement. Hopefully by honestly assessing where you’re at with the 10 topics above you’ll be able to focus your financial improvement efforts in the right places.