What type of insurance should I have?

Here is a direct quote out of an email a friend sent me this week "I received an offer in the mail for WHOLE life insurance thru the credit union.  I do need to get life insurance, as I had a small policy thru work, but it will go away with the job.  Is whole life a good thing?  I have never understood life insurance….ugh".


Well, truth be told, I don't think she needs WHOLE life insurance at this point in her life.  And knowing what I know of her health, it will be pretty costly.  That is not to say I am not a proponent of whole life insurance. Quite the opposite.  I think there is a place for it in a portfolio.

Let's back up though...first I am sure you are wondering why in the world she would ask ME about life insurance. Well, I used to sell it.  I sold a lot of whole life insurance at that.

But before we move on let's talk about the different types of life insurance that you will encounter.  One type is whole life (don't let your eyes glaze over...this is important stuff!!).  It is a fixed premium (in other words the amount you pay doesn't go up...ever) insurance that lasts for your whole life.  It doesn't end.  Well, it might, when or if you turn 100, but the chances of that are slim and the life insurance is banking you die way before then.  This type of insurance is pretty expensive when you are younger when compared to other types of insurance.  All kinds of people will talk you out of buying whole life insurance for that very reason.  A feature of a whole life policy is the cash value that builds in it over time.  Some people try to sell the cash value as savings account.  Don't be fooled.  It is not a savings account.  If you want to "borrow" the money you may, but if you don't pay it back then the value of the policy upon your death is less the amount still owed.  (are you still with me?)

Then there is term insurance.  Everyone touts this type of insurance.  It is much less expensive compared to whole life.  But as its name implies, it is only for a "term"....whatever that term is.  For example, you can have a 1 year renewable, 3 year renewable, 5 year renewable, or 30 year renewable term policy.  After the "term" you are either without insurance or you need to renew your policy at your new age. And you need to pray you are still insurable.

The reason so many people say you should stick with term is because of the cost. They think you can get a better "deal" with your money if you invest the difference between the cost of term and the cost of whole life.  There are a couple of issues with this thinking.  The first issue is that most people will NOT invest the difference.  Yeah, they'll say they will, but the majority will not be diligent enough. The other issue is regarding insurability.  You're healthy, right?  So what's the problem?  Well, a myriad of things could make you uninsurable, or increase your premium.

We use to have whole life insurance.  A lot of it in fact.  I sold it, remember?  Well, when I started investing and managing our portfolio on my own, I decided that I would "invest the rest."  There aren't very many people who follow through.  Plus, I found a company that locked in a 30 year term.  Our life insurance will not increase or terminate before I am 70.  I am okay with that.  The only issue that came up was when I disclosed my gestational diabetes with my 3rd child.  I pay double what my husband pays.  That sucks, but I would rather disclose the information than not and have the insurance company fight a future claim.  And we still do have some whole life...all the kids have policies.  I like the fact that they have guaranteed insurability options for later in life.  If they choose not to keep it then that is on them.  We have done our part.

Back to my friend who wrote and why I don't think she needs whole life insurance.  She is a woman in her mid-forties with no spouse or children.  She doesn't have any considerable assets to protect.  I think, in my humble opinion, she is better off getting a small term policy.

Remember, every person and family is different.  There is no one-size fits all with life insurance.  And I only touched on the 2 main types of insurance. There are a few more.  I wanted to you to still be awake by the end of this post.

You ARE smarter than you think!

My girlfriends tell me all the time that they are just not smart enough to "do what you do."  What I "do" is trade/invest actively, read stock charts, follow business news, etc.  They tell me that their husbands do the long term investing and they handle the day-to-day budgeting.  

Well, I disagree.  Strongly.  You may not LIKE what I do, but you are definitely smart enough.  

I am never sure why women feel it is in their best interest to abdicate their financial futures to someone else.  At least learn the basics so you know where your money is and what you are invested in.  When I sold mutual funds and life insurance, years ago, I had many women who wouldn't join in the conversation and their husbands were fine with that.  The only time a women chimed in was when a recommendation to increase their savings or investing was introduced.  If it meant cutting into the hear and now budget then the women I counseled were unwilling to agree.

My older sister is recently divorced.  I asked her some questions about their finances.  She told me that she never knew anything about her husband's bills or income.  They were together for 26 years!!  That's unbelievable to me.  I knew a bit about this situation years ago and tried to get her interested, but she never cared enough.  On the other hand, my mother, who is recently widowed, didn't have any of the bewilderment that some widows have when left all alone.  My mother and her husband shared a checking account. They both knew where the bill files and folders were located.  So when my step-father died, my mother didn't have the additional burden of trying to understand how "it all works."

All I ask of you, my girlfriends, is to have a rudimentary knowledge.  Do you get a yearly physical? Mammogram? Pap?  Do you get your teeth cleaned?  Then you should do the same for your financial health.  Is it a little work? Sure is. The first time you meet with someone it is a long and arduous process.  If it is not then change that someone.  You want someone who wants to know about your life in the present and where you would like to be in the future.

That said, let's discuss, the "who" you should see.  What you want to do, ie evaluate life insurance needs, discuss a budget, start investing, etc, will determine the credentials behind the name.  If you have friends or family that you trust ask for a referral.  Or contact the organizations of the fancy letters to get the name of someone in your area.  And once you meet, use your gut.  If you like the person, then stick with them.  If you feel they behave like a smarmy salesperson, then move on.  The person you choose to work with will get to know your financial details very intimately.  You need to be comfortable to open up about your finances.  And if they do their job correctly, you may even learn things about your personality you didn't know before.

If you need some guidance as to where to look for a reputable advisor just ask in the comments. I will point you to the organizations that can help you find someone.

Penny Wise and Pound Foolish

I am not sure this is the correct expression for what I am thinking about, but it is what comes to mind.  I am thinking about all the things that we get carried away with....such as scraping the peanut butter jar for the last bit, squeezing the toothpaste for every smidge, etc.  Is it really worth it?  Do you know what I am talking about?

And sometimes I just piss money away on dumb stuff...like fast food or some mindless little toy in the $1 bin at Target.  But don't let that little bit of toothpaste go to waste, oh no!

I just bought this awesome $350 carpet cleaner.  $350!  Seriously.  Have I lost my mind?  I know what you are thinking...I do love it.  My carpets are thanking me.  What I am thinking about is how I don't think a thing (okay, I do think about it) about spending that kind of money on a carpet cleaner but I am going to scrape the peanut butter jar or turn the ranch dressing bottle over for every last bit.  Does it matter?

I honestly don't know.  I am perplexed by human behavior at times.

Shout Outs

I decided to get a new carpet cleaner last week.  I had a Hoover a while back and loved it, but when the hose went I decided to try a Bissell.  I HATED it.  I mean hated it.  I like to clean my carpets a minimum of every 6 months.  We have 2 large dogs and 6 humans in our house, plus countless friends and acquaintances traipsing through.  You may think that is a little much, but it's how I roll.

On to the cleaner....I bought a Rug Doctor.  It is not the cheapest machine available, but I have rented them in the past and was pleased with the results.  Let me say that I am loving the results of my new machine.  It is a bit unwieldy though.  It is not as easy to fill up the reservoir or empty it, for that matter.  I am going to justify the inconvenience with my pleasure at the job it does.  

Along those same lines is my Dyson vacuum cleaner.  Yes, I am a little nutty about my floors.  Just the way it is.  My family has accepted it.  I have had the Animal for 7 years.  Yep, 7 years.  I had plenty of other vacuums, but none that have lasted this long or had this amazing customer support either.  

My Dyson was in need of some TLC this year.  The hose sprung a hole.  The website was easy to navigate and the replacement arrived quickly.  2 months later, a plastic piece snapped at the top of the canister.  Again I went to the website.  It looked like I had to replace the whole canister for $75!  I didn't like that option so I called customer service for clarification.  Yep, had to replace the whole thing.  Except....the guy sent it to me for FREE!!  Woo-hoo!!  I was psyched.  It arrived quick also.  And it is like having a whole new machine.  Love it!

I love my Thirty-One products too.  It helps that I am a consultant hehehehe  But that is WHY I am a consultant.  If I didn't like or believe in the product and vision of the company I couldn't sell the product.  Too many items to list so I will post a couple that I have photos of.  This is a zipper pouch.  It is perfect for holding all the cords 'n stuff you need when traveling.  It holds my Nook too.  So when we are in the car/hotel and the kids ask for their games or chargers I hand them the pouch.  And they put their items back for later use.  They know that if they don't and they lose them I am not responsible for replacement....and once you get to know me you will know I am serious about that lol

This is the Littles Carry-All Caddy.  It sits on the corner of my counter as the collection spot for all electronic devices ie DS consoles and games, iPods, chargers, headphones, etc.  See rule above if they can't find their stuff hehehe

One of my favorite stores is LLBean.  Again, a tad pricey, but worth it in regards to quality and customer service.  I can't even begin to list all the items we have from sheets, comforters, car mats, household mats to our living room couch. The list goes on and on.  I have a towel that has a hole in it.  I don't remember how old it is, but I do remember it wasn't cheap.  I am sending it back for a replacement.  I love that!  Same goes with my new friend Costco.  Anytime I am unhappy I can return something.  Love that!

Love this make and model of vehicle!  This is my third one.

You are probably wondering how I can spend so much on these items, but advocate saving money.  Well, the quality of the product is greatly important as is the customer service. I don't buy "things" very often. In fact, I don't like to shop (except for books...I do have a weakness) so when I do, I need companies that give exceptional customer service and superior products so I don't have to "re-shop" for a replacement.  

I learned years ago that I could buy things on the cheap and save money up front, but I would wind up replacing them faster than if I had just bought the more expensive, quality product in the first place.

That is not to say that all expensive products are high quality.  Quite the contrary.  Before I purchase, I do research. And this is where The Man comes in especially.  He loves to research.

And the other thing we do before we purchase a large ticket item is SAVE for it.  I know, crazy right?  Save to buy something.  Who knew?  Do you or someone you know need help with getting on a spending/savings plan?  Let me know. I would love to help.

Extreme Couponing...Is it worth it?

The Man and I headed off to our local Publix to purchase some goodies for our 9 y.o.'s birthday festivities.  We stood in line behind a woman who was an Extreme Couponer.  Her total bill equaled $33 and change.  Her savings were over $84.  Wow!  

I was grateful for the $1 coupon she gave me for the sparkling grape juice we were purchasing.  And I felt wholly inadequate.  She told us all about which stores accept competitors' coupons and who doubles coupons.  I had no idea.

So here's the question?  Do you?  If so, why?

I have excuses as to why I don't coupon like I use to.  Let me clarify, I have NEVER couponed like that.  I don't extreme coupon because we eat a lot of fresh fruits and vegetables.  I shop at Costco and buy in bulk.  I am lazy.  Yep, that's the truth.  It is work.  The other thing I try really hard not to do if tie up my pantry with lots of processed foods.  This women had boxes of pre-packaged food and lots of sodas and juices. Those items are treats in our house.

Like I said excuses for my laziness, I know, but I do feel justified in the food choices I make for my family.

I asked her what she did with the savings?  She didn't do anything with the savings per se.  She went on about how she sends some of the food to her daughter in college and she contributes to her 401k at work.  She said  the savings help her put gas in the car.  That I can truly appreciate.

I am thinking about something I read recently how women justify savings when they buy something whereas men feel the real savings would be in not buying it.  It reminded me of my niece who posted on FB this morning that she saved $$ at Victoria's Secret.  She was happy. I know how great it feels to get a good deal but the reality is that not spending is the best savings.

The Young and Foolish

So I had my whole evening planned out, to include updating my blog, when the phone rang and my older sister called. She never calls.  And I mean never.  I was worried someone died.  Seriously.  Nope, no death.   Thankfully.  We had 2 unexpected deaths over the summer and I am not sure my heart can handle anymore.  Anyway, we wound up chatting for 3 hours.  3 hours!!  To a sister who doesn't call normally.  It was a good conversation.  A lot of it was about her recent divorce.  Divorce will be another topic of discussion here soon.

But earlier in the day, my eldest child and I were having a conversation about one of her friends and the choices she makes.  This young lady is in a masters program, following a dream, when lo and behold enters Prince Charming.  You already see where this is going, don't you?  Prince Charming and the young lady attend the same school currently except now he wants to move to another school.  The young lady is thinking she will forgo her dream and follow his white horse.  My daughter and another good friend have advised against this course of action.  I concur.

I concur because I was that young lady.  I get it.  You are soooo in love.  He swears you will be able to finish your education wherever you are going and you believe him.  He is Prince Charming after all, isn't he?  Well, in my case, Prince Charming wasn't who he said he was.  I didn't finish my education.  Instead I had a baby, no place to live, and a custody fight on my hands.  Not pretty.

What I mentioned in my first post applies here...No man is a plan and SAVE some dang money!  Oh, yeah, and get a viable skill before you settle down in life.  I don't care if my girls go to college.  Seriously, I don't.  But I do care that they have some type of skill that can carry them along in life should they not make good choices.  I will discourage them from chasing Prince Charming to the ends of the earth until they can earn a living for themselves.  

I am not a naysayer about marriage. Quite the contrary.  I love being married and have been for 17+ years.  I don't foresee any "issues" appearing in our union.  What I do know will happen someday is that one of us will die. I know, I know, say it ain't so, but that is how life works.  If he dies sooner rather than later, then I want to be able to either provide for myself and the kids or to be able to have a job to keep me busy once the kids move on.  I am practical in that regard.  Life will go on.

So young girlfriend of mine, stay the course.  If he loves YOU then you will be able to finish your dream.  Don't let the emotions involved cloud your judgement.  You are smart.  You didn't get to this place by accident.  

So that begs the question:  Why do we, mainly women, sabotage our futures?  We are smart.  We should know better.  What do you think?

Life Changes

Seems like a heavy topic to start blogging about, doesn't it?  Well, it is a subject that seems to be coming up a lot lately for my girlfriends and family members.

Let's define Life Changes first....death, unemployment, divorce, empty nest, retirement and moving are just a few that come to mind.  One of the things I can not stress enough to all you, my dear girlfriends, is to save some dang money!!!  Your man is not a plan!!  Things go wrong.  Life happens.  If you don't  have money in the bank then you are at the mercy of whoever and whatever.

Personal experience has shown me that our judicial system tends to favor the person with the most cash.  When I was a young, impressionable twenty-something, I needed to acquire the services of an attorney to help with custody and child support issues involving my oldest daughter.  I could only afford the attorney for one trip to court.  My daughter's father had an advantage in our custody battle because he had more money.  If he hadn't backed off and offered joint custody as an option I wouldn't have raised her.  As the years rolled on, I went back to court to fight for more child support.  I was smarter, wiser, and wealthier.  I understood that money talks.  I could afford an attorney who would do the legal battle I needed to wage.

I have dear friends of mine who have slogged through the divorce process.  It is not easy by any stretch and not having a nest egg compounds the problem.  This is NOT an avenue I advocate at all, but if you find yourself here please start saving before you leave.  Here's a startling set of statistics:

 New data released today by the Census Bureau shows a statistically significant increase in the national poverty rate in 2008. Most adults (18 and over) in poverty are women; 59 percent of adults in poverty are women; and 13 percent of all adult women are in poverty. (http://www.americanprogress.org/issues/2009/09/census_women.html)

If I give all my girlfriends one piece of advice to take from any of this....save, save, save.  I know sometimes it is hard.  Trust me, I get it.  And no one wants to plan for the negative, but even if you stay together forever statistics say you will outlive him.

Okay, enough lecturing for today.  But we forewarned....this subject will be a recurring theme.