Save more, spend smarter, and make your money go further
Do you remember what it’s like being a kid with no financial responsibilities? Neither do I. It seems like we have been adulting forever. If life insurance isn’t quintessential adulthood, I don’t know what is. As you are reading and researching life insurance, one of the biggest questions you ask yourself is “Do I even need life insurance?”
Ask yourself this question: Does someone rely on me financially? If the answer is yes, then you likely need life insurance. Let’s discuss a few different types of people and their need for life insurance.
Single? You probably don’t need it.
If you are single and have no children, you probably don’t need life insurance. However, if you’re an ultra-planner or want to have a family sooner rather than later, locking in those low rates while you’re young and healthy can be a wise move.
Here are a few situations in which buying life insurance would be recommended even if you’re single:
Co-signed loans
Maybe your grandparents are co-signers on your private student loans or your parents co-signed on your mortgage. If you die before the balance is paid, the creditors can go after your co-signers. Life insurance can pay for these debts.
Caring for relatives
If you are caring for siblings or aging relatives you should consider life insurance to ensure that your loved ones are still provided for even if you are no longer around.
Have dependent children? You definitely need it.
Those with children have the greatest need for life insurance. Children rely on you for food, clothing, shelter, medicine, and everything else. If you die, life insurance can continue to fund these things, and it can also pay for hopes and dreams such as college tuition or a wedding.
Let’s take a closer look at specific parental situations:
Dual income families
If your household has two incomes contributing to standard of living, the sudden loss of a parent can cause financial upheaval if there is no life insurance to replace the lost income. One parent is now responsible to provide what two incomes previously did. For example, the proceeds from a life insurance policy can pay off the mortgage ensuring the children do not have to be uprooted from their home or school district.
Single parents
Let’s face it, the loss of a single parent to a child would be devastating. When married couples purchase life insurance, they often plan with the possibility that one spouse will remain to care for the children. Single parents do not have this luxury and absolutely need life insurance.
Stay-at-home parents
When you think of life insurance, you may only think a breadwinner needs coverage and not a stay-at-home parent – this could not be further from the truth. Imagine everything a stay-at-home parent does: babysits, cleans, cooks, transports, grocery shops… the list goes on. According to Salary.com, a stay-at-home mom is worth approximately $112,962. If the stay-at-home parent were to die unexpectedly, life insurance can pay for someone to help with these tasks.
Married? You most likely need it.
You don’t need to have children to rely on your significant other’s income. You’re building a life together and doing so requires money. You are likely both contributing to rent or a mortgage, car payments, utilities, and credit card bills. What happens if one of you were to die prematurely? The death benefit from a term life insurance policy can help pay for those expenses and cover the cost of a funeral.
It’s not uncommon today for couples to be in a committed relationship but postpone marriage. While it’s a little easier to own life insurance on your significant other if you are married, non-married couples can still purchase life insurance on one another as long as they can prove insurable interest.
Insurable interest is when a person can expect to suffer financial loss upon the death of another specific person. Having both names on a mortgage loan, both named on a lease, or owning a business together are just a few examples of how you can prove insurable interest.
The two types of life insurance
There are two main types of life insurance: term life insurance and permanent life insurance.
Term insurance:
Basic, inexpensive life insurance
Temporary – lasts a certain length of time (typically 10, 20, or 30 years)
Ideal for most people
Permanent insurance:
Lasts a lifetime
Accumulates cash value
Much more costly than term insurance
Not necessary for most people
For most individuals, term life insurance is suitable coverage. It is designed to last only during the years in which you have the greatest need for it. Permanent life insurance can be beneficial for more complicated situations such as managing wealth for large estates.
The key benefits
Buying life insurance means you hand over some of your hard earned dollars to an insurance company – so what do you get in return?
Your life insurance policy will provide significant funds to your loved ones when they need it most, allowing them to grieve without the added financial stress.
The death benefit is typically considerably greater than the premiums you paid.
The proceeds are generally safe from creditors. Even if you die with debt, creditors cannot go after the life insurance proceeds paid.
Life insurance proceeds are typically not taxed by the federal government.
Peace of mind in knowing your loved ones will be financially protected if you are taken from them too soon.
Natasha Cornelius is the content manager and editor for Quotacy. She has worked in the life insurance industry since 2010 and has been making life insurance easier to understand with her writing since 2014. A long-time Mint user, Natasha lives in Bozeman, Montana where she loves to garden, DIY anything she can, and explore beautiful Big Sky country. Connect with her on LinkedIn.
Save more, spend smarter, and make your money go further
Next Post
How Do I Fit Life Insurance into My Budget?
Save more, spend smarter, and make your money go further
Budgeting for life insurance might not be as exciting as budgeting for a new car or a fun trip, but it is much easier. Many people think about life insurance, but then decide to put it on the back burner because they think it’s expensive. Well guess what? Life insurance is actually very affordable.
Life insurance is really about protecting your loved ones from financial disaster if you should pass away. Think of it as income replacement.
Plan for what you need
Most people overestimate the cost of life insurance by 3-4 times. Life insurance is less expensive than you think. On average, you can get a $500,000 policy for $50 per month! We recommend getting coverage that is at least 5-10 times your income, but most importantly you should buy what you can comfortably afford. Having $100,000 in coverage is a million times better than having nothing at all.
Here’s what you need to cover:
Personal debt (car, student loans, credit cards)
Mortgage
Funeral expenses
Monthly income your family will need (future college tuition for children, groceries, monthly bills)
How to save money on life insurance
There is no such thing as a coupon for discounts on life insurance, but there are other ways you can save money.
Buy term. Term life insurance is the most affordable coverage you can own. Permanent insurance can cost 10 times more than term life insurance.
Pay annually. Insurance companies add fees for the extra administrative work needed to provide you that convenience of paying monthly or quarterly. Paying annually typically saves you around 5%.
Compare quotes. Life insurance pricing isn’t the same across the board with insurance companies. Different carriers evaluate your application on their specific guidelines, so you may save money by choosing a company that is more lenient toward your health situation. When you compare quotes using a tool like Quotacy, you are provided with competitive prices from all the top life insurance carriers.
Take another look. You may be overpaying especially if you purchased life insurance directly through an agent that only represents one insurance company. Chances are you may be able to get a lower rate just by comparison shopping different companies.
Unbundle your coverage. Bundling your life insurance with home and auto insurance is typically more expensive.
Put the cost of life insurance into perspective
We insure our health, cars, home, valuables, and even our phones, but most of us don’t realize that life insurance is cheaper to insure than most of these. In life we face financial challenges. We budget for daycare, student loans, phone bills, car payments and much more. Life insurance may not feel like a necessity when we are on a tight budget, but when you realize that you can get your family covered for pennies on the dollar, it’s easy to make that decision. If you feel the financial struggle now, what happens to your family if you die? Make sure your family is protected.
Fitting life insurance into a budget
Let’s look at three easy changes that you can make to fit life insurance into your budget. I’ve even made them myself!
1: Practice BYO (Bring Your Own)
Do you go through the Starbucks drive-thru or out to lunch on a daily basis? What about those happy hours and brunching on the weekend? I get it. It may take baby steps to start making your own coffee, packing your own lunch, and cutting back on eating out in general. But you’ll be surprised at how quickly the savings adds up.
My girlfriends and I alternate between throwing our own happy hours or brunches on the weekends. There’s no pressure to get all dolled up, and we make it easy by having everyone pitch in and bring their favorite drink or dish. Sure, I still go out and have fun, I just do it a little less often.
2: Conduct a subscription audit
These days with all the apps we have our fingertips and that fine line between need and want, it’s easy to let the number of subscriptions we have get out of hand. So many of these subscriptions are auto withdrawn, so when you look at your bank account it’s hard to decipher what you are even paying for anymore. Chances are you don’t need to pay for Hulu, cable, and Netflix, or Pandora, Spotify, and iTunes Radio. Give up a few and your bank account will thank you.
I’m the queen of subscriptions. But after my budget boyfriend became my budget husband, I was encouraged to give up a few subscriptions in order to save for our future. I thought $10 per month was no big deal, but when I added everything up, it became a real chunk of change. I encourage you to go through your subscriptions and decide what you really need.
3: Get creative with date nights
Going out for a date night gets expensive. Even if you just go out for dinner and a movie, that night adds up quickly. A dinner for two can quickly reach $50 or more, especially when you add in drinks. Have you been to a movie lately? Evening tickets are averaging $12-$14 each! And of course you want that delicious, buttery popcorn to go along with that show. It’s easy to spend $100 for a simple night out.
I’m a lover of date nights, but when my husband and I made it a weekly thing, it became a large monthly expense. While we enjoy a dinner and a movie, sometimes we make it a daytime activity. A lunch and a matinee can cost almost half the price of an evening out. Or, we choose a movie on Netflix and make a dinner at home.
We also decided to spice things up by finding activities we both enjoy and took up tennis lessons. Now we love taking our dates to the tennis court and loser has to make dinner at home. Fortunately my game is better than his, so I rarely have to cook. Not only do we save money by not going out, we also get a good sweat session in.
How to shop around for life insurance coverage
Admittedly, you’ll be shopping for the lowest price. Make sure the prices you see are from well-known brands with high financial strength ratings (A rated or better). These companies have been around a century or more and will be here for a long time to come.
Let’s say you’re looking for a $500,000, 20 year term policy. To stay competitive, insurance companies all have around the same price for the same policy, maybe just within a few cents of each other, so at first look they all appear to be about the same. Starting prices are based on your gender, your age, what state you live in, and whether or not you smoke cigarettes.
From there, pricing starts to change based on specific niches that insurance carriers have created for certain medical conditions and lifestyle habits. For instance, if you enjoy an occasional cigar during your monthly golf game, many carriers will consider you to be a smoker at a higher price, while a few companies see that as less of a big deal and will classify you a non-smoker at lower prices.
Here’s another example. Even if you are the epitome of health, but one of your parents wasn’t, prices can be higher because of the genetic risk they passed onto you. Let’s say your father died of cancer before we was 50. Your low rate won’t be affected with one or two carriers, but with all the rest your price will be higher.
A good place to start your shopping is at Quotacy. When you use Quotacy’s life insurance quoting tool you’ll see how easy it is to find and compare prices between the top carriers. You’ll be able to find the right price for you.
Jeanna Simonson is a writer and the Ambassador of Buzz at Quotacy. She has been researching and writing educational articles on the importance of life insurance since 2015. When not writing for Quotacy, you can find her scoping out the newest fitness and beauty trends for her own personal blog, traveling and spending time with her husband and fur babies. Connect with her on LinkedIn.
Save more, spend smarter, and make your money go further
Save more, spend smarter, and make your money go further
Understanding your policy’s death benefit.
Q: How long does it take my beneficiaries to get my life insurance death benefit?
Once the death benefit claim form and a copy of the death certificate have been received by the carrier, beneficiaries typically receive the death benefit check in two weeks.
However, if the insured dies within the contest-ability period (which is typically two years) the death benefit may take longer because the life insurance company has the option to investigate the claim if they choose do to so.
Q: How do I know my beneficiaries will get paid the death benefit?
Life insurance companies are not in the business to rip people off. As long as your policy is inforce at the time of your death (in other words, the premiums were paid up-to-date) your beneficiaries will receive the death benefit payout. There are only a few exceptions to this, which we discuss in detail below.
Q: Are there any situations in which my life insurance policy won’t pay out?
There are three instances in which a life insurance company can choose to deny or reduce a term life insurance policy’s death benefit.
One: Contest-ability Period
Life insurance policies include what is called an Incontestability Clause. This clause states that the life insurance company has a specific period of time (typically two years) to dispute the validity of the insured’s statements made on an application. So, if you die within the contest-ability period, the life insurance company has the right to investigate the details of your medical history to ensure you did not misrepresent yourself on the application.
For example, stating that you did not smoke cigarettes when, in fact, you did up until the day you died. In a situation like this, insurance companies have the right to withhold some of the death benefit from your beneficiaries or even deny the claim altogether.
Two: Suicide Clause
Another situation in which the life insurance company has the right to deny a death benefit is if the insured commits suicide within a certain period of time, again typically within two years. In this situation, however, the life insurance company will return all premiums that have been paid to date to the family.
Three: Homicide
The last situation in which an insurance company may not pay a death benefit is if the insured was murdered. If the insured was murdered, the life insurance company will typically call the police department involved and inquire as to whether or not the beneficiary of the policy is a suspect.
If the beneficiary is a suspect, the life insurance company will hold payment until the charges are dropped or the beneficiary is deemed not guilty of the crime.
Q: Will my term life insurance death benefit payout be taxed?
Term life insurance is the least complicated type of life insurance and in most cases your beneficiaries will not have to pay federal or state income taxes on the death benefit they receive. Since the policy premiums are paid using after-tax dollars, Uncle Sam already got his cut.
There are two main exceptions to this rule:
Estate taxes
Gift taxes
If you own your own policy, the death benefit proceeds become part of your taxable estate. If your estate exceeds the exclusion amount, which is over $5 million dollars, it can get taxed. For most people, this isn’t an issue.
The second exception is what is known as “The Goodman Triangle.” If the policy owner, insured, and beneficiary are three different people, the death benefit could count as a taxable gift to the beneficiary.
Q: How can I be sure my policy’s life insurance carrier will still be around when I die?
All major life insurance companies have financial strength ratings. There are multiple agencies each with their own rating scales and standards that assess the long-term financial stability of these insurance companies. These ratings typically follow the school-like A through F scale. The higher the rating, the more stable the company is and the more likely the company will be able to pay future claims.
When you are looking to purchase life insurance, whatever means you are using to buy it through should tell you the insurance company’s rating. Any company with an A rating or better is considered financially stable and you should not worry about any future claims not being paid out.
Natasha Cornelius is the content manager and editor for Quotacy. She has worked in the life insurance industry since 2010 and has been making life insurance easier to understand with her writing since 2014. A long-time Mint user, Natasha lives in Bozeman, Montana where she loves to garden, DIY anything she can, and explore beautiful Big Sky country. Connect with her on LinkedIn.
Save more, spend smarter, and make your money go further
Previous Post
How to Buy Term Life Coverage Online
Next Post
Part 2 of 3: Life Insurance Buyers’ Common Q&As
Save more, spend smarter, and make your money go further
If you want to buy term life insurance, you’ve got a few options. You could work with an agent in your area if you’d prefer a face-to-face interaction, or you can buy online if you prefer the convenience of an electronic process.
However, not all online life insurance agencies are created equal. If you’re shopping around for term life quotes, it’s important to understand what to look for to help you get the best value.
What to expect when you’re applying for coverage
Anyone who has gone through a life insurance application in the past could tell you that life insurance carriers are some of the most thorough and careful companies in the world. This is because life insurance policies are priced based on the applicant’s risk of death.
However, the process of applying has come a long way, and it’s actually gotten pretty simple – especially online. Nowadays, most of the heavy lifting is done behind the scenes.
If you add a good agency into the mix, applying for life insurance is practically painless, since it will handle almost everything that doesn’t require your signature or further clarification from you.
Generally, buying a life insurance policy will take between two and six weeks, and the process tends to follow a consistent format.
Step 1: Submit an application
When you find a price you like, you can choose a carrier to submit a formal application with. Choosing a carrier to apply with isn’t a binding decision, and you’re always free to back out of an application to go a different direction.
Step 2: Take a medical exam
Life insurance carriers will require you to take a medical exam see how healthy you are. This is free for you and the examiner will even come to your home or office to make things convenient.
Step 3: Wait for your medical records
The carrier will order a copy of your medical records from your doctor, which could take anywhere between hours and weeks, depending on how well-organized your doctor keeps their records.
Step 4: Tie up loose ends
After the exam is completed, medical records have been received, and any other questions the carrier needs answered are out of the way, your application will be reviewed. Once you get the final OK from the carrier, your policy will be approved, and you’ll be on your way to getting coverage!
Let’s look at each of these steps in a little more detail.
Submitting your application
Starting your life insurance journey will often begin with getting a quote, which will show you prospective prices based on a few key factors, like the amount of coverage you’d need, how long you want it to last, and a few health and lifestyle questions.
Interested? Check out a few prices. Quotacy has an online quoting tool you can use – no commitment required.
Taking the medical exam
After applying for coverage, the life insurance carrier will require you to take a quick medical exam in order to be approved for coverage. Because life insurance pricing is based on your mortality risk, the carrier needs to verify your current medical situation.
The medical exam is a free mini-physical performed by an examiner and scheduled by the carrier. It can happen anywhere, even in your home or office, whenever you can spare half an hour.
Typical exams consist of:
A few questions about your medical history
A list of any medications you’re taking
Height and weight measurements
Pulse and blood pressure check
A urine sample
A blood sample
Preparing for your exam
The measurements that are taken during the exam are extremely important, and being prepared is your best bet to ensure a good outcome. In the time before your exam, you should remember to:
Fast for 6-8 hours – this will reduce your blood sugar. Scheduling your exam in the morning can make this easy if you skip breakfast.
Don’t smoke for at least one hour prior – smoking temporarily raises your blood pressure.
Don’t drink coffee for at least one hour prior – caffeine can increase your blood pressure and raise your pulse.
Avoid alcohol for 8 hours prior – it’s high in calories, and can raise your blood sugar and blood pressure.
Avoid overly salty and sugary foods for one day beforehand – both salt and sugar raise your blood pressure.
Drink lots of water – this hydrates you to help make the blood draw a lot easier and less painful.
No strenuous exercise the night before or the day of your exam – as your body repairs from exercise, your blood pressure and pulse rise slightly.
No sexual activity for one day beforehand (for men, at least) – gettin’ freaky lowers the PSA levels in your blood, which is one of the ways that carriers evaluate your prostate health.
Get a good night’s sleep – being well-rested lowers blood pressure. As an added bonus, if you’re afraid of needles, having a full eight hours can help your body negate the physical effects of your phobia.
Waiting for your medical records
Before your life insurance application is approved, insurance carriers order copies of your medical and driving records to help them get a better idea of any insurability risks you might have. Just like with the medical exam, the carrier orders these records behind the scenes on their own dime.
Because the laws protecting a patient’s medical records are extremely strict, you will need to sign a form authorizing your doctor to release your records to the insurance company and agency you’re working with.
At this point, all you’ll need to do is sit and wait for the records to arrive. Depending on how efficient your doctor is at sending them along, waiting for this step to be completed can either happen overnight or take a few weeks.
Answeringadditional questions
In addition to everything else that happens during your application, the carrier will sometimes have follow-up questions for you which will help them get to know you a bit better. These questions can be about anything from medical conditions to your hobbies to your travel plans.
A lot of the time, the questions a carrier asks can be pretty scary to someone trying to protect their family. Many clients see a questionnaire about their sleep apnea, or their diabetes, or their battle with cancer, and assume that the carrier will decline them on the spot.
It’s important to keep in mind that even though there are many factors that can affect your rate during this time, you’ll likely be able to get coverage. The whole reason that insurance carriers have flexible prices is because they want to offer coverage to as many people as possible, regardless of the circumstances.
Here’s a quick list of example questions you could see during an application, depending on your circumstances.
If you have a medical condition:
How severe is it?
How is it being treated?
Is the treatment effective?
If you have a risky hobby, like hang gliding or rock climbing:
What level of experience or certification do you have?
How often do you participate in your hobby?
How much time have you dedicated to your hobby?
This isn’t a comprehensive list, by any means, but hopefully it will give you an idea of what the carrier is looking for.
Waiting for approval
Once the carrier has everything they need, your application will enter the approval process. This is when the carrier’s underwriters will review everything they’ve collected as a whole, and evaluate where the final price of your insurance policy should be set.
If you’re approved for coverage, you’ll be sent a packet containing your policy itself as well as a few documents that you’ll need to sign and return so the carrier can finalize your coverage. This step is also when the carrier will collect your payment information so that they can set up your billing on their end.
Depending on the carrier you apply with, you will either be sent digital forms or a physical policy booklet. Regardless of the format, you should store your policy securely and have a plan in place to help your family find it in the event of your death, so they can claim your death benefit.
After a bit more processing by the carrier to wrap up any loose ends, you’ll receive a notification that your policy is inforce. That means that everything’s in place on the carrier’s end of things, and your coverage has been activated! All that’s left for you to do is make your premium payments according to your payment plan, and your family will be covered.
Eric Lindholm is a writer for Quotacy, and he’spersonally guided hundreds of people through their own life insurance journeys since joining in 2016. Eric lives in the Twin Cities, Minnesota, where he’s busy paying off his student loans and making the most of his time as a 20-something. You can connect with him and see what he’s up to at EricLindholm.biz.
Save more, spend smarter, and make your money go further
Previous Post
How Do I Fit Life Insurance into My Budget?
Next Post
Part 1 of 3: Life Insurance Buyers’ Common Q&As
I currently have a life insurance policy – could I get a better price elsewhere?
Save more, spend smarter, and make your money go further
The short answer is yes – it is possible to get a better price. The long answer is that it depends on quite a few factors, and there’s no guarantee that your price will drop with a second application.
One of the biggest things to keep in mind is your age. The older you are, the higher your chances of dying naturally, which will slowly increase the baseline price of a policy. Applying for a policy at 45 will be more expensive than applying at 35, all other things being equal.
When in doubt, work with a life insurance agency. They’ll be able to give you some insight into how much your price could drop if you switch to another carrier.
If my health has improved since I got my last policy, can I reapply for a better price?
Depending on how your health has improved and the amount of time that has passed since your previous application, you could see significant price drops.
For example, smoking is one of the priciest things that you can do with regard to a life insurance application, and typically, you need to have kicked the habit at least one year ago before life insurance carriers are willing to look past your tobacco history.
My last agent sold me a policy from the company he worked for. Can I get a better price if I shop around?
If your agent was captive, meaning they only represented one insurance company, the first thing that you should do is get a quote from an independent source that represents many. Because carriers jockey for position to undercut their competitors’ prices in certain situations, it’s possible that another carrier beats your current carrier in price.
Sometimes the difference in price will be pretty obvious from the get-go. If you can’t find a dramatic difference in price, it’s often wise to talk to an independent agent or online company and tell them the facts about your case. An experienced agency can help point you in the right direction by shopping your case around for preliminary price checks with various carriers.
Natasha Cornelius is the content manager and editor for Quotacy. She has worked in the life insurance industry since 2010 and has been making life insurance easier to understand with her writing since 2014. A long-time Mint user, Natasha lives in Bozeman, Montana where she loves to garden, DIY anything she can, and explore beautiful Big Sky country. Connect with her on LinkedIn.
Save more, spend smarter, and make your money go further
Previous Post
Part 2 of 3: Life Insurance Buyers’ Common Q&As
Next Post
How to Shop for and Save Money on Your Life…
Save more, spend smarter, and make your money go further
Earlier this month I had a major #fangirl moment. It was a full #fangirl evening, in fact, when I teamed up with New York Times bestselling author and Girlboss founder Sophia Amoroso to share in a very special money event.
In partnership with Mint, Sophia and I hosted a panel of four trailblazing entrepreneurs to have an “impolite” conversation about money. The audience heard from Mackenzie Barth, founder of Spoon University (which recently got acquired by Scripps Networks), Lisa Price creator of Carol’s Daughter, a multi-million dollar beauty brand, fashion entrepreneur Nina Faulhaber and Wing Yau, acclaimed jewelry designer.
The only rule for the evening was to be brutally honest. So, we went deep. We talked about our financial hang-ups, our money mantras, how we spend and save, as well as our money wins and losses.
While there were many takeaways, as moderator, I picked up on a few common threads – impolite “rules” – that ran through many of the stories shared. Here are my 5 favorites.
The panelists, a row full of successful entrepreneurs who seem to have a great handle on life and work, admitted that money can sometimes make them feel scared or anxious. In some cases it’s because, as business owners, they don’t always earn a consistent paycheck. In other cases they may not know the best way to save or invest. From time to time, they have doubts, insecurities and fears.
The room was full of nodding heads.
We all can get a little (or a lot) emotional over money, right? The topic triggers all sorts of feels, depending on our upbringing and life experiences. And that’s ok. Emotions provide context for how and why we the make decisions we do. On the panel, some grew up wealthier, while others remember living paycheck to paycheck. Each experience left them with a unique set of money emotions.
Rather than keep them bottled up, these women embraced their feelings. They shared them and through that discovered they weren’t alone and received acceptance and support.
To help us jump over our emotional hurdles, we need to arm ourselves with facts.
The panelists talked about how they continuously seek knowledge and answers to guide their decision-making. They need to make informed choices around saving money, using credit, taking on loans and building financially sound businesses. If they don’t know something, they’ll ask experts and advisors to find out. There’s no sense in guessing.
#3 You’re More Money Savvy Than You Think.
The voices in our head may be telling us that we’re not good enough or smart enough with numbers to manage our money well. Ignore the noise and realize it’s not that difficult. You may face a learning curve when it comes to budgeting, investing and expense tracking, but sometimes the only thing getting in the way is a bad mindset.
Panelist Wing Yau, the founder of WWake, is an artist first and businesswoman second. Like fellow artists, she admitted that she wasn’t exactly hard-wired to know how to analyze a profit and loss statement or manage the financials of her business. Money was an overwhelming topic, at times. But Wing insisted on learning how to manage her company’s books through research and seeking help, as well as trial and error. The process not only left her more educated. It gave her the confidence to fully tackle her business.
You can’t possibly know it all. And you shouldn’t go it alone. Each panelist credited friends, advisors and partners in giving them the support and feedback they need to make smart money moves, as well as business decisions.
Having an accountability partner, someone to keep you motivated and on track, was also critical.
For example, Nina Faulhaber, co-founder of ADAY, an active wear startup, recalls meeting with Sophia Amoruso prior to launching her fashion business to ask a laundry list of questions. Nina was coming from the finance world but knew very little about the fashion industry. Sophia was more than helpful, providing feedback and connecting her with other key people in the clothing world to offer guidance and mentorship.
So now that they’ve established successful businesses, are friends and family coming out of the woodwork asking for money or help? In some cases, yes, the panelists admitted.
But if there is one money rule Lisa Price, founder of the uber successful beauty line Carol’s Daughter, lives by, it is to never lend money. “Only give what you can gift,” she said. In other words, never give money to anyone with the expectation that it will be returned. Instead, offer it as a gift to avoid resentment or disappointment, since, as we know, many personal loans can go awry.
Save more, spend smarter, and make your money go further
Previous Post
Ask Farnoosh: Negotiating Debt Payments
Next Post
Mint Money Audit 6 Month Check-In: Was Ken Able to…
Save more, spend smarter, and make your money go further
We suggest reviewing your life insurance policy once per year to make sure you have enough coverage. Most importantly, you should review it anytime your life and circumstances change.
What should I look for during my policy review?
When reviewing your policy you should look for anything that may need updating. Examples include your name, address, phone number, billing information, and beneficiary.
When should I update my beneficiaries?
Make sure you keep your beneficiary designations up to date. There are certain circumstances that will warrant a beneficiary change. These include:
Marriage or divorce
The birth or adoption of a child
Your designated beneficiary passes away
You are now caring for your elderly parents
When should I apply for a new policy for more coverage?
Just as life is ever changing, so are your life insurance needs. You may have purchased a small insurance policy when you were fresh out of college to cover your student loans. A few years have passed and now your lifestyle has changed. Here are some common circumstances in which you may want to increase your life insurance coverage:
Starting (or adding to) your family
Purchasing a new home
Job promotion with higher income
Natasha Cornelius is the content manager and editor for Quotacy. She has worked in the life insurance industry since 2010 and has been making life insurance easier to understand with her writing since 2014. A long-time Mint user, Natasha lives in Bozeman, Montana where she loves to garden, DIY anything she can, and explore beautiful Big Sky country. Connect with her on LinkedIn.
Save more, spend smarter, and make your money go further
Previous Post
Part 1 of 3: Life Insurance Buyers’ Common Q&As
Next Post
Part 3 of 3: Life Insurance Buyers’ Common Q&As
Save more, spend smarter, and make your money go further
This Independence Day, as with each 4th of July, I’m reminded of the great leap of faith my parents took more than 37 years ago when they bought one-way tickets to the United States. Their move from their embattled Iran granted my brother and me a life of privilege and greater freedoms.
Their journey also encourages me to be a do-gooder and, as nerdy as it sounds, manage my money wisely. Because you can’t exactly say to your immigrant parents, “Hey, thanks for risking everything and moving here to give us a better life, but I have $80,000 in credit card debt and need to move back home.”
I want to be financially free, if for no other reason than to make them proud. That means living a debt-free life and supporting my family’s needs and wants both today and in the future. It means having my financial bases covered to avoid stressing over money. For me, personally, it also means have a little savings cushion for the day my parents might need my help for a change.
The term “financial freedom” signifies different things to different people. I was curious to learn more, so I took to the world of social media to crowd source the many definitions.
On Twitter, I ran a small, unscientific survey and discovered that one in three of us define financial freedom as never having to worry about money. I was surprised to learn that only 3% think making more and having more money is the exclusive path to financial freedom. A majority of us think that it’s a combination of being debt-free, having more money and never having to worry about dollars and cents.
On my Facebook page, feedback came from all over the country and overseas. Financial freedom is an aspiration for many of us, and we define it with terms like, “having choices,” “peace of mind” and “living in abundance.”
[URIS id=66812]
What’s your definition of financial freedom? Share it with us in the comments section below.
Have a question for Farnoosh? You can submit your questions via Twitter @Farnoosh, Facebook or email at [email protected] (please note “Mint Blog” in the subject line).
Farnoosh Torabi is America’s leading personal finance authority hooked on helping Americans live their richest, happiest lives. From her early days reporting for Money Magazine to now hosting a primetime series on CNBC and writing monthly for O, The Oprah Magazine, she’s become our favorite go-to money expert and friend.
Save more, spend smarter, and make your money go further
Previous Post
Mint Money Audit 6 Month Check-In: Was Ken Able to…
Next Post
Part 2 of 3: Life Insurance Buyers’ Common Q&As
Save more, spend smarter, and make your money go further
Aaron Hahn vividly remembers the moment he decided to crush his debt.
It happened in March, while visiting his retired aunt and uncle in Arizona.
Their home, with a lush, sprawling golf course as its backdrop, symbolized to him the power of hard work and consistent savings. Not to mention, this was their vacation home, a place where his “snowbird” aunt and uncle enjoyed visiting during the winter months.
“It was my ‘aha’ moment,” says Hahn, who, at the time, had about $42,000 in debt spread across student loans, a car loan and credit cards. “I was like, ‘O.M.G. I want this life.’ I want to do what they’re doing. I want to be financially independent.”
Hahn had also just celebrated his 34th birthday, which served as another wake-up call. “It was a confluence of events…I realized that I just wasn’t taking care of money like I should be, like a grown-ass man,” says Hahn. “I feel like there’s an awakening when you’re in your 30’s.”
His first plan of attack: Obliterate his $11,000 in credit card debt. For Hahn, credit was just a tool to for buying stuff when you didn’t have the cash. “The credit card debt was just something I was misusing,” he admits. “It became another part of my spending arsenal. I used credit for more spending power.”
Since March Hahn, who works in the Navy, has embarked on a diligent plan to reach debt zero across his four credit cards. Using a free personal loan calculator, he’s given himself 12 months to eliminate all balances and has, for the first time ever, begun budgeting. He’s using Mint to stay on track.
Will Hahn cross the finish line in time? I thought it would be interesting (and fun?) to check in from time to time to report on his progress and setbacks. He says he likes having me as an accountability partner.
Here’s how Hahn’s staying focused and handling some setbacks in the first few months.
“Budgeting is Like Yoga”
Hahn’s Mint budget is his first true budget. “It is a behavioral modification. It’s like doing yoga for the first time. There’s pain and discomfort,” he laughs.
To make room for the roughly $900 a month debt payments, he’s had to make some big trade-offs. The greatest challenge has been cutting back on restaurant meals and outings with his girlfriend. “I though you needed to go out and have dates in order for there to be a connection,” Hahn says. “Instead, we’re spending more time at home and realizing that it’s ok. I have her support in that.”
His girlfriend is also helpful in planning and cooking their meals at home. “She makes enough so I have lunch the next day.” This alone, saves him $70 per week, Hahn estimates.
The “Wall of Shame”
While Hahn has a total of $42,000 in debt, he’s zeroing in on the credit card balances first using the snowball method and attacking the card with the greatest interest rate first. All the while, he’s stopped using plastic and sticking to a cash-only diet.
For motivation, he uses visual reminders. “I’ve printed a list of all the individual balances on my fridge. It’s my ‘wall of shame’ and I’m looking forward to crossing them off,” says Hahn.
Simultaneously Saving
It’s been a slow process, but Hahn is also working towards a three to six-month emergency reserve. “That was what my credit cards had been.” So far he’s managed to tuck away $1,000. “I just love the idea that, for the first time in my adult life, I saved $1,000 and didn’t spend it. It’s such a good feeling.” Once the debt’s paid off, he plans to make savings a higher priority and add more to the account.
An “Actual” Emergency
It’s a good thing that he started saving because in May, Hahn emailed me to say that his debt payoff plan had suffered a minor setback. But it was for an important cause: healing his cat.
He wrote: “One of our emergency funds just came in handy. The day after I (quite literally) cut up my credit cards, our cat, Yasmin, became very sick over the weekend, requiring a visit to an emergency veterinary clinic. Between buying a new pet carrier and the vet expenses, this was $550 that neither of us had planned.
Fortunately, Andrea (my partner) has an emergency stash of her own, and between the two of us, we were able to handle this curveball with relative ease. Yasmin is okay (we have a follow-up appointment in two weeks), and we’ve used this event to reinforce just how crucial it is for both of us to set aside significant, liquid savings.
As for my debt repayment plan, this will weaken my attack for the month of May, as I want to stash an additional $500 into an emergency fund for when we run into another inevitable hurdle.”
Following that email, Hahn wrote about another surprise: A bigger car maintenance bill than anticipated.
All said, between the vet and car maintenance costs, he had to fork over $800 in unplanned expenses.
“This is definitely going to slow my debt repayment down by a month. Not very thrilled about this. Feel a bit defeated, honestly,” Hahn wrote.
Still, none of that $800 got charged to a credit card. So, in my book that’s #progress.
How will Hahn fare over the summer months? Will he find a way to get back on track?
Stay tuned to the Mint Blog for more updates on his debt payoff plan.
Have a question for Farnoosh? You can submit your questions via Twitter @Farnoosh, Facebook or email at [email protected] (please note “Mint Blog” in the subject line).
Farnoosh Torabi is America’s leading personal finance authority hooked on helping Americans live their richest, happiest lives. From her early days reporting for Money Magazine to now hosting a primetime series on CNBC and writing monthly for O, The Oprah Magazine, she’s become our favorite go-to money expert and friend.
Save more, spend smarter, and make your money go further
The holidays are time for family. Here are some ideas from our friends at Quotacy on how to make the most of this holiday season with your loved ones.
Save more, spend smarter, and make your money go further
The holiday season is a very hectic time, and if you’re not careful, it can easily sneak up on you. If you’re like me, you’ve entered November without much money set aside for gifts or celebrations and you’re starting to sweat about your budget.
Scrambling for cash during the holidays can feel like treading water, but there are lots of opportunities to save money and cut costs if you know where to look.
Make a budget and stick to it
Setting limits on how much you’re willing to spend for each person on your list will help keep you focused on getting the most out of your holiday budget.
Speaking from experience, my family typically sets limits on how much you’re allowed to spend on one another – $50 max for your immediate family, $20 max for any extended family.
In practice, those limits tend to become more like guidelines, but they can help you set a baseline budget to plan for during the holiday months.
Start shopping ASAP
The longer you’re on the hunt for deals, the more likely you are to stumble across them. If you can get started before December actually begins, you can scoop up a few amazing deals during Black Friday and Cyber Monday.
Keeping your eyes peeled early on in the holiday season can give you more time to consider exactly what you want to get for each person. Being alert and keeping an eye on those items will help you pounce on flash deals as they come up.
Automate your savings
If you’ve got a savings account that offers automatic deposits, cranking up the rate at which money goes in can help you grow a holiday budget without even thinking about it.
When I need to save money in the short term, I tend to pump up my weekly contributions to my savings account. This helps me lock my money away until I’m sure I want to spend it.
Cancel a few subscriptions
Even though cold, snowy days are perfect for curling up on the couch and bingeing a show on Netflix or Hulu, taking a month-long break from a few of your subscription services can help give you a bit more breathing room for gifts and events.
Pick one service you absolutely can’t live without to keep you entertained, and use the subscription fees for the rest of them to spruce up your holiday party with a few extra treats. Then, when you come back to them in January, you’ll have a whole new set of shows to power through.
Cut down on trips out
This is an evergreen savings suggestion, but during the holidays, opting to stay in could help you save more than just the price of dinner.
If you’re in an area that gets snow, the increased traffic will make each trip out burn through more fuel. Additionally, bad weather increases your odds of being involved in an accident, so staying in can often mean staying safe.
Check your pockets
If you’re like me, you’ve probably forgotten about some of the things in your wallet. However, taking the time to dig past your go-to cards can reveal some hidden treasures.
First off: Gift cards. Got 5 bucks left at Starbucks? Surprise a family member with a bag of nice coffee. $3 left over at Target? That’s a couple of candy bars to fill a stocking.
If you’ve got rewards points or cash back built up on your cards, the holidays can be a good time to spend them. Performing a self-audit on your wallet can help you discover money that you didn’t know you had.
Combine your orders
Do you ever notice how stores start promoting big purchase sales around the holidays? “Spend over $300 and get 15% off!” This helps them incentivize shoppers to spend more. You can take advantage of this by teaming up with a friend to get both of your holiday shopping done at once.
In addition to saving more on a bulk order, you’ll be able to take full advantage of BOGO deals without having to find somewhere to put the second item.
Who knows, you might catch them eyeing something they want, and be able to take another trip back and cross them off your list.
Look everywhere for coupons and deals
Everyone knows about online coupons these days, but there are many more ways to save if you know where to look.
Digging through your junk mail can be a good way to scoop up deals from local stores. Local businesses will also offer discounts via local newspapers and magazines as well, so popping by a magazine rack can help you track down deals in your area.
Many crafters, artists, and other small creators who own Etsy stores or eBay accounts are also looking to make a bit of last-minute money to spend on their families.
Established creators often put their excess stock on sale in the weeks before the end of the year, and many artists take extra commissions to help them pay for their own celebrations.
Buy (or make) a few cheap “quickie” gifts
Going out and tracking down trinkets for everyone in your office can be time consuming, and it’ll drain your holiday savings, too.
Instead, taking one trip and buying several of the same inexpensive gift at once can help you be sure you aren’t empty handed when a surprise gift-giver catches you off-guard.
For example, you can wrap up cocoa packets, candy canes, and mini marshmallows, then give them out as instant cocoa sets. For bonus points, head to a thrift store and buy a few mugs to include as well.
Turn your holiday parties into pot lucks
Another perennial favorite – pot lucks! If you’re hosting a dinner party, asking your guests to help out with dishes can add variety to the meal, as well as saving you money.
Have your guests bring hot food in crock pots, or let them show up early with food that’s ready to cook. Appetizers and finger food work great for this, and a menu made out of those options often ends up being more fun than a sit-down dinner.
Change up your gift-giving traditions
Instead of spreading yourself thin to get your entire family or office gifts, organizing a secret Santa pool can help you focus on finding something meaningful for one person in particular.
If organizing a secret Santa exchange is too complicated, a white elephant party is a fun way to recycle old gifts you’ve never gotten around to using. Who knows, your secondhand waffle iron might be exactly what someone wants!
Eric Lindholm moved from sales to communications at Quotacy. His writing is informed by his experience guiding hundreds of people through their own life insurance buying journey. Eric lives in Minneapolis, where his coworkers are trying to convince him to start his own podcast, do stand-up, or take his humor into the spotlight. Connect with him on LinkedIn.
Save more, spend smarter, and make your money go further
Previous Post
How To Pick The Best Travel Credit Card For You
Next Post
Let’s #TalkAboutMoney with The Financial Diet