Why It’s Important to Have Life Insurance

Unexpected accidents can lead to financial ruin for any family that is not prepared for the worst. Outside of that, families who know that death will come with heavy financial burden may not have the means to save in the time frame available. There are many reasons to have life insurance, and all you need is one reason which makes it important to your family.

Workplace Insurance Has Too Many Gaps

Many people, especially if you work in a service or construction-based job, will provide some form of life insurance. The terms of these policies usually provide coverage only under very precise situations. Usually, workplace life insurance will only provide benefits to surviving family members if the death took place while on-the-job. Or, if the death was a result of injuries from the workplace. The likelihood of that happening is extremely rare. Additionally, these policies don’t often cover the entirety of funeral expenses.

Paying Off Debt

Your surviving family members may not be financially responsible for your debt. Some forms of debt, such as credit cards do not pass on to your next of kin. Meanwhile, student loans may qualify for forgiveness in the event of a death; in some circumstances, forgiveness is not available. Debt can follow your family after you pass, even if they’re not legally liable for resolving the outstanding balance. Why? Debt collectors will not stop collection efforts until your family either pays or takes legal action. Having life insurance can prevent your family from dealing with harassing demands for money that isn’t available.

Providing Financial Stability

Life insurance policies are meant to cover expenses that the family otherwise would not be able to pay for. Usually, this will include funeral expenses, outstanding debts, and to cover everyday household expenses. Regardless of your type of life insurance, your family will likely lose a source of income after someone passes. Most adults, even older adults, contribute to the household monetarily. After you pass paying the mortgage, buying groceries, or keeping up on the heating bill may prove difficult.

Additionally, many people choose a life insurance policy that will provide a form of inheritance. This can leave young children a bit of financial stability when they come of age. Or young adult children can benefit from some added financial stability that they would have had if their parent was still around.

It’s Generally Not Expensive

Depending on the type of insurance you get, the extent of the coverage, and your age, insurance may not be expensive at all. Life insurance isn’t expensive when you get quotes and shop around as well. Like any other form of insurance, be sure to contrast and compare rates and policies before committing to anything. Many policies are available for a monthly payment that would not provide the same payout if you had just saved that money. This argument, commonly used against getting life insurance, doesn’t account for the fact that many people won’t save that 30, 50, or 100 dollars every month. Work with an insurance provider that makes you comfortable and has policies that cover everything you care about.

This Should Be Your Monthly Financial To-Do List

For most of us, managing our money is just another chore, like mopping the floors or switching out the air filters. It’s something we dread doing, and if we’re lucky, we only need to check in on our money once a month or so.

Obviously, some things (like paying your bills) should be done more than once a month, but there are some financial to-do’s that you can tackle every four weeks. These tasks will keep you on track without overloading you with daily money chores.

Every 30 days or so, take an hour to address the following list. Trust me: it’ll give you some peace of mind and ensure you’re doing everything you need to in terms of financial security.

Do a Soft Pull on Your Credit Score

Although you don’t want to do a “hard” pull on your credit report too often, it’s smart to use one of your credit card accounts or another app to check your credit score without affecting it. This helps you monitor for unapproved activity and make sure your credit score is staying in good shape. Soft pulls aren’t as accurate as hard pulls, but they’re fairly close and harmless to your score.

If your credit score is lower than you want it to be, this is your chance to respond to negative changes quickly. Missed a payment? Call your credit card company and ask them to waive it. Lost points because you applied for a loan? Freeze your credit so that you’re not tempted to apply for anything else in the near future. By checking your credit score often, you’ll become more adept at making necessary changes to keep it at a healthy number.

Check in on Your Net Worth’s Progress

I’ve talked about the importance of net worth before, but it’s not something that’s worth checking on a daily basis because it typically grows slowly. However, you should take a look at your overall worth at least once a month to ensure it’s progressing the way you want it to. The better understanding you have of your big financial picture, the easier it is to make smart decisions over the course of the next month.

Look Over Your Spending Habits

I’ll admit that budgeting isn’t effective for every kind of spender, but everyone should know where their money goes each month. Take time to sit down and figure out how you’re distributing your spending. Are you spending an obnoxious amount on eating out? Is your insurance costing you more than a high percentage of your monthly income? Keep an eye on everything so you know when you’re overspending.

Move at Least 10 Percent into a Savings Account

It always blows my mind when I read that 39 percent of Americans have enough savings to cover a $1,000 emergency. About 44 percent can’t even cover a $400 emergency expense! No wonder most of us are incredibly stressed about money.

To prevent yourself from stumbling into debt or panic, try to squirrel away at least 10 percent of your monthly income to prepare for emergencies. Experts recommend that your monthly personal savings should be at least that high, but many people are only saving around 5.6 percent.

Take One Hour to Secure Your Financial Future

Today, roughly 49 percent of Americans are “concerned, anxious, or fearful about their current financial well-being.” If thinking about a monthly financial to-do list makes you queasy, know that you’re not alone.

However, I can assure you that being more aware of your money problems is the best route to take in the long-run. Just take one afternoon each month to sit down and take a hard look at your spending, debt, credit score, and savings. Your sacrifice will pay off for years in the future.

5 Money Moves to Make Before You Quit the Job You Hate

Every Monday morning is a drag. Whether it’s because you can’t stand your boss or you detest your work environment, it’s not uncommon for Americans to dislike their jobs. In fact, a Gallup Poll in 2017 found that roughly 85 percent of people hate their jobs. It’s safe to say that you’re not alone in your sentiments.

Before you call it quits at your current company, think about how the decision will impact you financially. There are a handful of steps you can take to minimize the blow to your savings and leave you in a secure position.

1. Give Yourself a Substantial Emergency Fund

If you’re planning to quit your terrible job without another gig lined up, you’ll need to live off your savings for a bit. That means your savings need to be substantial. According to experts at The Balance, you should have a minimum  of three months’ of living expenses socked away. I personally recommend hoarding six months’ worth of living expenses before exiting.

This will give you the peace of mind you need to choose your next job without desperately leaping at the first paying opportunity you stumble across. Plus, you’ll be equipped to handle any unexpected financial emergencies that pop up in the next few months.

2. Determine What Your Unemployment Budget Will Look Like

When you’re going without a paycheck, you’ll need to live differently than you do now. Don’t wait until you give your two-weeks notice to decide how you’ll survive. Plan ahead; determine what your budget will look like once you’re not employed. What unnecessary expenses can you cut? Where will you need to start saving more?

3. Take Care of Your Medical Needs While You Still Have Insurance

Depending on when you quit, your insurance may cover you for up to a month after you leave the company. Still, you should take care of as many medical procedures and appointments as possible before quitting. Go to the dentist, schedule your annual checkup, and refill your prescriptions. It’s better to be safe than sorry when it comes to medical expenses. 

You may also want to look into your next insurance company if you plan to be unemployed for more than a couple of weeks. You never know when your health can take a turn. Prepare for the worst by doing your research before you’re in a sticky situation.

4. Start a Side Hustle That Can Keep You Afloat

Just because you don’t have another full-time job lined up doesn’t mean you have to go without any income after you quit. Before you officially leave, begin building a side gig that can provide you with a little bit of extra cash each month. That way, when you finally do quit, you’ll know that you can keep yourself afloat with your side hustle until you can find your next source of employment.

5. Tackle Your Outstanding Debt

Unfortunately, if you’re waist-deep in personal debt, quitting right now might not be in the cards for you. People usually acquire more debt, not less, when they’re unemployed. Get your current debt to a manageable place before quitting. If that means suffering through another few months with your current workplace, so be it. You certainly don’t want to jump ship if it’ll cost you your financial security, unless the situation is dire.

The Bottom Line

Even if there’s a part of you that wants to make a scene and quit your job today, think ahead. How will the decision impact your financial future? What can do you do before leaving to soften the blow to your bank account and mental health? These tips will help you establish a bit of a safety net before you enter the unknown world of unemployment.

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