Do I Need Life Insurance?

It might be uncomfortable to think about the need for life insurance, but it’s an important part of your family’s financial strategy.

It helps protect your family during the grieving process, gives them time to figure out their next steps, and can provide income to cover normal bills, your mortgage, and other unforeseen expenses.

Here are some guidelines to help you figure out how much is enough to help keep your family’s future safe.

Who needs life insurance? A good rule of thumb is that you should get life insurance if you have financial dependents. That can range from children to spouses to retired parents. It’s worth remembering that you might provide financial support to loved ones in unexpected ways. A stay-at-home parent, for instance, may cover childcare or education costs. Be sure to take careful consideration when deciding who should get coverage!

What does life insurance cover? Life insurance can be used to cover a variety of unexpected expenses. Funeral costs or debts can potentially be financial and emotional strains, as can the loss of a steady income and employer-provided benefits. Think of life insurance as a buffer in these situations. It can give you a line of defense from financial concerns while you process your loss and plan for the future.

How much life insurance do you need? Everyone’s situation is different, so consider who would be financially impacted in your absence and what their needs would be.

If you’re single with no children, you may only need enough insurance to cover funeral costs and pay off any debts.

If you’re married with children, consider how long it might take your spouse to get back on their feet and be able to support your family, how much childcare and living expenses might be, and how much your children would need to attend college and start a life of their own. A rule of thumb is to purchase 10 times as much life insurance as income you would make in a year. For instance, you would probably buy a $500,000 life insurance policy if you make $50,000 a year. (Note: Be sure to talk with a qualified and licensed life insurance professional before you make any decisions.)

An older person with no kids at home may want to leave behind an inheritance for their children and grandchildren, or ensure that their spouse is cared for in their golden years.

A business owner will need a solid strategy for what would happen to the business in the event of their death, as well as enough life insurance to help ensure that employees are paid and the business can either be transferred or closed with costs covered.

Life insurance may not be anyone’s favorite topic, but it can be a lifeline to your family in the event that you are taken from them too soon. With a well thought out life insurance policy for you and your situation, you can rest knowing that your family’s future has been prepared for.

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Should parents give their children an allowance?

It’s a surprisingly difficult question to answer. Teaching your kids how to handle money is important. But how you go about giving them cash can set precedents that last a lifetime. Here are a few different takes on giving your kids money.

Not giving your kids money. There’s a lot to not love about this system at a glance, especially if you’re the kid. It seems like a way to simultaneously prevent your children from having fun and learn nothing about handling money. But it has some silver linings. Not paying your kids to do chores can be a way to teach them about the value of work without tying it to a monetary reward. That’s an important life lesson that can be applied to volunteer work and responsibilities with their future family. You also may be on a tight budget and handing out an allowance is just not part of your financial strategy right now.

Giving your kids an allowance (no work required). This is a system where you give your kids a set amount of money each week or month. This is a straightforward way to get your kids some cash that they can spend, save, and use to learn about money.

But just giving your kids an allowance without requiring something in return, like doing chores, has some potential drawbacks. Most people will eventually have to get a job so they can earn money. Giving cash to your kids without tying it in some way to work may create a sense of entitlement that simply isn’t realistic.

Paying your kids commission. In this system, you pay your kids as they complete tasks. You would set up a job posting with different payments for different chores. Pay your kids when they’ve completed the work. If they get the job done quickly with a good attitude and some extra flourish? Give them a raise! It’s a great way of rewarding excellence and teaching children the monetary value of their time and hard work.

But this system also has flaws. Some of the most rewarding work we do can be for family or friends, or to serve our communities—with no reward other than appreciation and pride in a job well done. Giving the impression that one should only put in hard work or help out with the family for cash isn’t something every parent is comfortable with.

Fortunately, there are many ways to combine each of these systems. You could have non-paying chores that are duties simply because the kids are members of the family and then extra paid jobs. Or maybe offer a base allowance to teach your kids about saving, giving, and spending, and then paid chores added on. These systems can evolve over time as your kids grow. Let the needs of your family and what you want to instill in your children guide you.

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Plenty of people move back in with their parents.

Data found that 37% of Californians and close to 1.9 million people in Canada between 18 and 64 live with their parents (1 & 2). That might not sound ideal, but is it really that bad? Here are some pros and cons to consider before deciding to move back home.

Pros Living with your parents isn’t necessarily the end of the world. For starters, it might be cheaper than renting an apartment or buying a house, depending on the deal your parents offer you. Negotiating rent with your mom is typically easier than wrangling with a landlord! On that note, at home you’ll be surrounded by people who love you. That can be a serious boost to your mental health and give you some footing for your next move. And you can’t forget that free food is awesome. (If that’s part of the deal!)

Cons But moving back in might not necessarily be all rainbows and sunshine. It can be incredibly demoralizing for many people. We tend to estimate our self-worth and how much we’ve accomplished by our independence from our parents. It’s easy to see living with our parents as a step back. Plus, it can encourage laziness. Not having to hustle for food and rent can remove a sense of urgency from your work. Nothing motivates you quite like the imminent threat of bankruptcy!

If you have to move back in with your parents, do it with a plan. Maybe you give yourself six months at home to get your business off the ground. Your goal might be more long-term like caring for a parent. Just remember to take it in stride and don’t let it derail your life!

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A financial strategy is many things.

It’s not just a budget. In fact, a solid financial strategy is not entirely based on numbers at all. Rather, it’s a roadmap for your family’s financial future. It’s a journey on which you’ll need to consider daily needs as well as big-picture items. Having a strategy makes it possible to set aside money now for future goals, and help ensure your family is both comfortable in the present and prepared in the future.

Financial Strategy, Big Picture <br> A good financial strategy covers pretty much everything related to your family’s finances. In addition to a snapshot of your current income, assets, and debt, a strategy should include your savings and goals, a time frame for paying down debt, retirement savings targets, ways to cover taxes and insurance, and in all likelihood some form of end-of-life preparations. How much of your strategy is devoted to each will depend on your age, marital or family status, whether you own your home, and other factors.

Financial Preparation, Financial Independence <br> How do these items factor into your daily budget? Well, having a financial strategy doesn’t necessarily mean sticking to an oppressive budget. In fact, it may actually provide you with more “freedom” to spend. If you’re allocating the right amount of money each month toward both regular and retirement savings, and staying aware of how much you have to spend in any given time frame, you may find you have less daily stress over your dollars and feel better about buying the things you need (and some of the things you want).

Remember Your Goals <br> It can also be helpful to keep the purpose of your hard-earned money in mind. For example, a basic financial strategy may include the amount of savings you need each month to retire at a certain age, but with your family’s lifestyle and circumstances in mind. It might be a little easier to skip dinner out and cook at home instead when you know the reward may eventually be a dinner out in Paris!

Always Meet with a Financial Professional <br> There are many schools of thought as to the best ways to save and invest. Some financial professionals may recommend paying off all debt (except your home mortgage) before saving anything. Others recommend that clients pay off debt while simultaneously saving for retirement, devoting a certain percentage of income to each until the debt is gone and retirement savings can be increased. If you’re just getting started, meet with a qualified and licensed financial professional who can help you figure out which option is for you.

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Life insurance can be confusing.

It sometimes feels like an endless jumble of big words and cryptic abbreviations. Add on top of that how stressful talking about the loss of a loved one can be and you’ve got a topic that can seem unapproachable.

It just so happens to be incredibly important.

Life insurance is an essential line of defense for your family in the case of tragedy. It can give them the time and resources they need to grieve and make a plan for the future. But where should you begin? Here’s a quick guide to weighing and understanding your life insurance options.

Term Life Insurance <br> This option provides coverage for a specified term or period of time (10, 20 to 30 years). It’s just pure life insurance and typically your premiums are lower the younger you are.

Universal Life Insurance (ULI) <br> Universal life insurance is a relatively new insurance product that combines permanent insurance coverage with additional features. If the (ULI) is funded sufficiently, it may provide coverage for the duration of your life and depending on how you’ve structured your policy, there can potentially be a cash value. Keep in mind that if you decide to take out loans or withdrawals there may be fees associated with it.* Be sure to meet with an agent to discuss the specifics of a ULI policy.

Whole Life Insurance <br> These policies include a standard death benefit coverage, and with cash value guaranteed on all premiums paid during an insured’s lifetime.** Critical illness riders may also be offered as part of a whole life insurance policy.

Finding the right life insurance policy can be difficult. Call me, and we can review your options to find Whole Life Insurance that’s a perfect fit for you and your family!

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Many people get life insurance after one of life’s big milestones:

• Getting married
• Buying a house
• Loss of a loved one
• The birth of a baby

And while you can get life insurance after your baby is born or even while the baby is in utero (depending on the provider), the best practice is to go ahead and get life insurance before you begin having children, before they’re even a twinkle in their mother’s eye.

A reason to go ahead and get life insurance before a new addition to the family?
Pregnancies can cause complications for the mother – for both her own health and the initial medical exam for a policy. Red flags for insurance providers include:

• Preeclampsia (occurs in 5-10% of all pregnancies)¹
• Gestational Diabetes Mellitus (affects 9.2% of women)²
• High cholesterol (rises during pregnancy and breastfeeding)³
• A C-section (accounts for 31.9% of all deliveries)⁴

Also, the advantage of youth is a great reason to go ahead and get life insurance – for both the mother and father.
The younger and healthier you are, the easier it is for you to get life insurance with lower premiums. It’s a great way to prepare for a baby: establishing a policy that will keep them shielded from the financial burden of an unexpected and traumatic life event.

Whether you’re a new parent or beginning to consider an addition to your family, contact me today, and we can discuss your options for opening a policy with enough coverage for a soon-to-be-growing family or updating your current one to include your new family member as a beneficiary.

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Life will often seem to present signals about financial moves to make.

Starting your first job babysitting or mowing lawns? Probably a good idea to begin saving some of those earnings. Need to pay for college? You’ll want to apply for scholarships. Have a friend who’s asking you to invest in his latest business scheme? Maybe you’ll pass.

As for life insurance, there are certain events that herald when it’s an appropriate time to think about purchasing a policy.

Following are a few of those key times…

Tying the knot or taking the plunge
Whatever you call it, if you’re getting ready to walk down the aisle, now is a good time to think about life insurance. A life insurance policy will protect your spouse by replacing your income if something were to happen to you. Many couples rely on two incomes to sustain their lifestyle. It’s important to make sure your spouse can continue to pay the bills, make a mortgage payment, and provide for any children you might have, etc.

Buying a home
If you’re in the market for a home, life insurance should also be a consideration. There are particular types of life insurance policies that will pay off the remaining mortgage if something happens to you. This type of life insurance can help provide a safety net for you and your spouse if you are planning on taking on a mortgage.

Someone becomes dependent on you financially
Another life event that signals a need for life insurance is if someone were to become dependent upon you financially. We might think our only dependents would be our children, but there are other situations to consider. Do you have a relative that depends on you for support? It could be a sibling, parent, elderly aunt. It’s prudent to help protect them with a life insurance policy.

You’ve got a business partner
Life insurance can be invaluable if you’re starting a business and have a business partner. A life insurance policy on your partner or the key leaders in your company can help protect the business if something happens to one of the main players. While the payout on a life insurance policy won’t replace the individual, it can help see the company through financial repercussions from the loss.

You have debt that you don’t want to leave behind
If you’re like most Americans – you probably have some debt. There are two problems with carrying debt. One, it costs you money and isn’t good for your financial health. Second, it can be a problem for your loved ones if you pass away unexpectedly. A life insurance policy is helpful to those who are left behind and are taking on the responsibility of your debt and estate.

You have become aware of “the someday”
Sooner or later we all have to consider our last stage of life. A life insurance policy can help you plan for those last days. A life insurance policy can help cover funeral costs and medical bills or other debts you may have at the end of your life. The payout can also help your beneficiary with any final expenses while settling your estate.

You fell in love with a cause
If you are attached to a certain charity or cause, consider a life insurance policy that can offer a payout as a charitable gift when you pass away. If you are unattached or don’t have any children, naming a charity as your life insurance beneficiary is a great way to leave a legacy.

You just got your first “grown-up” job
Cutting your teeth on your first “grown-up” job is a great time to consider your life insurance options. If you have an employer, they may offer you a small life insurance policy as a perk. But you likely will need more coverage than that. Consider purchasing a life insurance policy now. The younger you are, the less you may pay for it.

Life gives us clues about financial moves
If we know what to look for, life seems to give us clues about when to make certain financial moves. If you’re going through any of these times of life, it’s time to consider purchasing a life insurance policy.

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Ever heard of the “Sandwich Generation”?

Unfortunately, it’s not a group of financially secure, middle-aged foodies whose most important mission is hanging out in the kitchens of their paid-off homes, brainstorming ideas about how to make the perfect sandwich. The Sandwich Generation refers to adults who find themselves in the position of financially supporting their grown children and their own parents, all while trying to save for their futures. They’re “sandwiched” between caring for both the older generation and the younger generation.

Can you relate to this? Do you feel like a PB&J that was forgotten at the bottom of a 2nd grader’s backpack?

If you feel like a sandwich, here are 3 tips to help put a wrap on that:

1. Have a plan. In an airplane, the flight attendants instruct us to put on our own oxygen mask before helping someone else put on theirs – this means before anyone, even your children or your elderly parents. Put your own mask on first. This practice is designed to help keep you and everyone else safe. Imagine if half the plane passed out from lack of oxygen because everyone neglected themselves while trying to help other people. When it comes to potentially having to support your kids and your parents, a tailored financial strategy that includes life insurance and contributing to a retirement fund will help you get your own affairs in order first, so that you can help care for your loved ones next.

2. Increase your income. For that sandwich, does it feel like there’s never enough mayonnaise? You’re always trying to scrape that last little bit from the jar. Increasing your income would help stock your pantry (figuratively, and also literally) with an extra jar or two. Options for a 2nd career are everywhere, and many entrepreneurial opportunities let you set your own hours and pace. Working part-time as your own boss while helping to get out of the proverbial panini press? Go for it!

3. Start dreaming again. You may have been in survival mode for so long that you’ve forgotten you once had dreams. What would you love to do for yourself or your family when you have the time and money? Take that vacation to Europe? Build that addition on to the house? Own that luxury car you’ve always wanted? Maybe you’d like to have enough leftover to help others pursue their goals.

It’s never too late to get the ball rolling on any of these steps. When you’re ready, feel free to give me a call. We can work together to quickly prioritize how you can start feeling less like baloney and more like a Monte Cristo.

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There’s never enough time during the holidays is there?

Travelling, shopping, events, and surviving in-laws can seem like full-time jobs, leaving you stressed and frazzled. But that’s not what the holidays are about; they’re supposed to be a special season of taking time to enjoy the things and people you love and care about.

Try out these tips to take control of your time this holiday season. Trust me, your loved ones will thank you!

Write down your priorities and make a schedule <br> Make a list of all the things that you want (and need) to do for the holidays. These might be hosting a big family get-together, decorating the house and yard, attending a community parade or concert, or just enjoying some good food and drinks with friends. Mark them on your calendar and figure out what you need to do in preparation and when you can do it. Organizing a plan for how and when things get done will make you much more efficient and help prevent scrambling at the last minute to buy tickets or make reservations.

Accomplish what you can before the crunch <br> Get as much work out of the way before the holidays get hectic. Maybe that means wrapping up projects or having meetings a few weeks early, or prepping your family holiday cards a month in advance. Space out your work so that you can get the little tasks done before things start to pile up.

Learn to say no <br> This is especially important for extroverts and the super-social. Overbooking yourself during the holidays is one of the easiest ways to increase stress levels and torpedo productivity. Figure out your priorities, make your schedule, and stick with it. Tempting as it may be, saying “yes” to fifteen ugly Christmas sweater parties and eight New Years Eve bashes will whittle away your free time and limit your enjoyment of the season.

Most importantly, remember why you’re trying to use your time effectively. The goal is to make memories with the people you love by doing things you care about. Use these tips to avoid getting bogged down in the busyness of the season and to prioritize the things that matter most.

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The holidays tend to be a time when we want to reach out and help those who are less fortunate than we are.

But sometimes it can feel like you simply don’t have enough resources (whether it be time or money) to contribute to causes you care about, especially with the usual yuletide expenses—and stress—of travel and buying gifts for friends and family.

Here are a few holiday generosity tips to help get you in the spirit of the season without sacrificing your peace of mind (or your pocketbook)!

Start a Budget <br> Creating and sticking to a budget is a great way to kickstart your giving. There are a couple of factors that might play into this, but it seems likely that having command of your spending will allow you to see how much you can realistically set aside for a worthy cause. You might find that you can accumulate enough throughout the year for a big holiday donation. Also, be open to the possibility of automated donations—it might be easier to regularly contribute a few dollars a week than to save up for a large lump sum contribution.

Get Creative <br> There are plenty of nonfinancial ways to be generous during the holidays. Look into volunteering opportunities with local charities or nonprofits that might need labor. You might be surprised by the diversity of positions that they need filled. Setting aside a Saturday morning to work at a soup kitchen with your family can go a long way towards spreading some holiday cheer and helping those in need.

Give but Verify <br> Don’t donate your time, resources, or energy to organizations that misuse contributions. Do your research—a quick online search may suffice. Nonprofits are required to publish how much they spend on advertising and overhead, so make sure you take a few minutes to verify that your generosity won’t get wasted.

Even if your time and money are tight this year, hopefully these tips will provide some practical insights into how you can support the causes and things you care about—without busting your budget.

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The holidays shouldn’t be a time for worrying about your finances.

But the cost of travel, food, and gifts can add up quickly, making it hard to focus on the things that matter most. Here are some tips to help protect your pocketbook this holiday season so you can focus on sharing old traditions and making new memories with friends and family.

Play secret Santa <br> Secret Santa is an easy way to divvy up gift buying duties, especially if you have a large family or friend group. Have everyone participating put their names in a hat. Everyone then draws a random name out of the hat and must buy a gift for the person they’ve selected. It’s a simple and fun way to limit how many people you need to buy gifts for and control how much you spend on presents. Optional Secret Santa: Only do the gift swap with the kids and skip the adults this year.

Buy gifts with cash when you can <br> Watch out for credit card debt this holiday season. Purchasing presents with credit can be tempting (especially during the Black Friday frenzy), but how much you’re going to owe can quickly add up. Set a budget for yourself and then take that much cash out of the bank. Once it dries up, stop buying gifts! Your future self will be glad come January when you don’t have a whopping credit card bill to pay off.

Take advantage of sales and coupons early <br> Start collecting wishlists a few months before the holidays begin. If Aunt Margaret mentions a new cookware set she has her eye on in August, take note! Shopping early is an easy way of increasing your chances of finding sales and deals before the hardcore holiday shopping ensues. For online shopping, investigate couponing apps and add-ons. They can automatically add discounts to purchases, potentially saving you big money over a few gifts!

The holidays are about remembering what really matters, not worrying about money. The goal of these tips isn’t just to save you some cash, but to help you celebrate the things and people you love, free of financial distractions. Happy Holidays!

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The average cost of a wedding in the U.S. is over $33,000.[i]

That’s an expensive day by any standard!

That amount might be enough for a down payment on a first home or for a well-equipped, late-model minivan to shuttle around your 1.9 kids – assuming your family has an average number of children as a result of your newly wedded bliss.[ii]

If you’re having cold feet about shelling out that much cash for one day’s festivities – or even worse, if you fear you might have to go into debt to pay for it – here are a few ideas on how you can make your wedding day a special day to remember, and still save some money for other things (like that minivan).

Invite Close Friends and Family
Many soon-to-be newlyweds dream of a massive wedding with hundreds of people in attendance to honor their big day. But at some point during any large wedding, the bride or the groom – or maybe both – look around the well-dressed guests and ask themselves, “Who are all these people, anyway?”

You can cut the cost of your wedding dramatically by simply trimming the guest list to a more manageable size. Ask yourself, “Do I really need to invite that kid who used to live next door to our family when I was 6 years old?” Small weddings are a growing trend, with many couples choosing to limit the guest list to just close friends and immediate family. That doesn’t mean you need to have your wedding in the backyard while the neighbor’s dog howls during your vows – although you certainly can. It just means fewer people to provide food and drink for and perhaps a less palatial venue to rent.

Budget According to Priorities
Your wedding is special and you want everything to be perfect. You’ve dreamed of this day your entire life, right? However, by prioritizing your wish list, there’s a better chance to get exactly what you want for certain parts of your wedding, by choosing less expensive – but still acceptable – options for the things that may not matter to you so much. If it’s all about the reception party atmosphere for you, try putting more of your budget toward entertainment and decorations and less toward fancy food. Consider trading the seven-course gourmet dinner with full service for a selection of simpler, buffet-style dishes catered by your favorite restaurant.

Incorporate More Wallet-Friendly Wedding Ideas
A combination of small adjustments in your plan can add up to big savings, allowing you to have a memorable wedding day and still have enough money left over to enjoy your newfound bliss.

• Consider a different day of the week. If you’re planning on getting married on a Saturday in June or September, be prepared to pay more for a venue than you would any other day of the week or time of the year. Saturday is the most expensive day to get married[iii], and June and September are both peak wedding season months.[iv] So if you can have your wedding on, say, a Friday in April or November, this has the potential to trim the cost of the venue.
• Rent a vacation house – or even get married on a boat. The smaller space will prevent the guest list from growing out of control and the experience might be more memorable than at a larger, more typical location. Of course, both options necessitate holding the reception at the same location, saving money once more.
• Watch the booze costs. There’s no need to have a full bar with every conceivable drink concoction and bow-tied bartenders that can perform tricks with the shakers. Odds are good that your guests will be just as happy with a smaller-yet-thoughtfully-chosen selection of beer and wine to choose from.
• Be thrifty. If you really want to trim costs, you can get creative about certain traditional “must-haves,” ranging from skipping the flowers (chances are that nobody will even miss them) to purchasing a gently-used gown. (Yes, people actually do this.) Online outlets may provide beautiful gowns for a fraction of the price of a new gown.

There’s a happy medium between a “royal wedding” and drive-thru nuptials in Vegas. If you’re looking for a memorable day that won’t break the bank, consider some of the tips above to keep things classy, cool – and within your budget.

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Dasher. Dancer. Prancer. Vixen.

Comet. Cupid. Donner. Blitzen. (And Rudolph too, of course.)

This is a holiday roll-call that’s instantly recognizable: the reindeer that pull Santa’s magical sleigh. But what if things got so hectic at the North Pole (not a stretch when you’re in charge of delivering presents to every child on Earth), that when it was time to hitch up the reindeer on Christmas Eve, they were all out of order?

Prancer. Cupid. Dasher. Comet. Dancer. Vixen. Blitzen. Donner.

Hmmm, someone’s missing… what happened to Rudolph? (Looks like he got left behind at the North Pole. In all the hubbub one of Santa’s elves forgot to review the pre-flight checklist.)

Since so much can change during the year from one crazy “Happy Holidays!” to the next, your ducks – or reindeer, that is – may not even be in a row at this point. They could be frolicking unattended in a field somewhere! And who knows where your Rudolph even is.

We can help with that. An annual review of your financial strategy is key to keeping you on track for your unique goals. Lots of things can change over the course of a year, and your strategy could need some reorganizing. I mean, did you hear about everything that changed for Prancer? (What do you call a baby reindeer, anyway?)

Here are some important questions to consider at least once each year (or even more often):

1. Are you on track to meet your savings goals? A well-prepared retirement is a worthy goal. Let’s make sure nothing drove you too far off track this year, and if it did, let’s explore what can be done to get you back on the right path.

2. Do you have the potential for new savings? Did your health improve this year? Did that black mark on your driving record expire? Changes like these have the potential to positively impact your life insurance rate, but we’d need to dig in and find out what kinds of savings might be in store for you.

3. Have your coverage needs increased? Marriage, having a child, or buying a home are all instances in which your life insurance coverage probably should be increased. Have any of these occurred for you over the last year? Have you added the new family member as a beneficiary?

If you haven’t had a chance to review your strategy this year, we can fit one in before Santa shimmies down the chimney. Which of your reindeer do you need to wrangle back into the ranks before the New Year gets going?

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Just saying “thanks” without giving a little thanks back tends to lose its charm when we start to lose our first teeth.

When we’re young, it seems like our parents and older siblings are just relieved that we’re learning some manners to offset our little legs swinging wildly off the chair under the dinner table, narrowly missing people’s shins. (Hey, it’s hard to sit still at big family meals when you’re that little!) All the grown up talk about far away jobs or how much you’ve grown wasn’t as stimulating as the tooth that had started to wiggle ever so slightly when you bit into some turkey… But at least you remembered to say thank you when someone passed the cranberry sauce!

As we got older, though, those conversations became easier to participate in as we shared our own stories, watched our extended family grow and mature, and then tried to wrangle our own kids into saying “thank you” when they were given a gift by a relative they hadn’t seen in a year.

The biggest lesson we learn about being thankful as we get older? It’s important to show the people we love how thankful we are for them – not just say it. We learn more about the responsibility we have to take care of the people we are thankful for. And at this time of year, we can give our thanks to them by making sure they are financially prepared if we suddenly aren’t around anymore.

Here are 3 ways you can give thanks for your loved ones:

1. Consider getting life insurance. Replacing lost income, covering funeral expenses, gaining potential tax advantages, having early access to money – these benefits of life insurance will give your loved ones a bit of financial stability and let them know how thankful you were for them. However, many of these benefits can depend on what type of life insurance you have, so taking the time to find the right type and amount of insurance for your particular needs and goals is important. Which leads us to the second way to give thanks…

2. Get the right type and amount of life insurance. Life insurance policies are not “one size fits all,” so investing your energy into this step is a key way to give thanks for your loved ones. Different types of policies have different kinds of coverage, benefits, and uses. Having the right policy with adequate coverage is the key to protecting your loved ones in the event of a traumatic event – not just the loss of life. Adequate life insurance coverage can help keep you and your loved ones afloat in the case of an unexpected disabling injury, or if you’re in need of long term care. Your life with your loved ones isn’t going to be one size fits all, and your life insurance policy won’t be either.

3. List the right beneficiaries on your policy. This question is particularly important if you haven’t looked at or updated your beneficiaries in a while. Why? Because listing the correct beneficiary will help ensure that any insurance payout will get delivered to the them. You may need to review your policy’s beneficiaries if you have recently married or divorced, had kids, or maybe even met with a cousin over the holidays who you’d like to leave a little something to!

If you can’t say that the 3 ways above are how you’re going to give thanks for your loved ones this year, give me a call. I’d like to give my thanks to you by assisting you with a whole new way to say “thank you” – tailored life insurance!

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It might sound like a bad monster movie title, but the return of consumer debt is a growing concern.

A recent New York Times article details the rise of consumer debt, which has reached a new peak and now exceeds the record-breaking $12.68 trillion of consumer debt we had collectively back in 2008. In 2017, after a sharp decline followed by a rise as consumer sentiment improved, we reached a new peak of $12.73 trillion.[i]

A trillion is a big number. Numbers measured in trillions (that’s 1,000 billion, or 1,000,000 million – yes, that’s correct!) can seem abstract and difficult to relate to in our own individual situations.

While big numbers can be hard to grasp, dates are easy. 2008 is when the economy crashed, due in part to an unmanageable amount of debt.

Good debt and bad debt
Mortgage debt still makes up the majority of consumer debt, currently 68% of the total.[ii] But student loans are a category on the rise, currently more than doubling their percentage of total consumer debt when compared to 2008 figures.[iii] Coupled with a healthier economy, these new levels of consumer debt may not be a strong concern yet, but the impact of debt on individual households is often more palpable than the big-picture view of economists. Debt has a way of creeping up on families.

It’s common to hear references to “good debt”, usually when discussing real estate loans. In most cases, mortgage interest is tax deductible, helping to reduce the effective interest rate. However, if a household has too much debt, none of it feels like good debt. In fact, some people pass on home ownership altogether, investing their surplus income and living in more affordable rented apartments – instead of taking on the fluctuating cost of a house and its seemingly never-ending mortgage payments.

Credit card debt
Assuming that a mortgage and an auto loan are necessary evils for your household to work, and that student loans may pay dividends in the form of higher earning power, credit card debt deserves some closer scrutiny. The average American household owes over $15,000 in credit card debt,[iv] more than a quarter of the median household income. The average interest rate for credit cards varies depending on the type of card (rewards cards can be higher). But overall, American households are paying an average of 14.87% APR for the privilege of borrowing money to spend.[v]

That level of debt requires a sizeable payment each month. Guess what the monthly credit card interest for credit card debt of $15,000 at an interest rate of 15% would be? $187.50! (That number will go down as the balance decreases.) If your monthly payment is on the lower end, your debt won’t go down very quickly though. In fact, at $200 per month paid towards credit cards, the average household would be paying off that credit card debt for nearly 19 years, with a total interest cost of almost $30,000 – all from a $15,000 starting balance! (Hint: You can find financial calculators online to help you figure out how much it really costs to borrow money.)

You may not be trillions in debt (even though it might feel like it), but the first step to getting your debt under control is often to understand what its long-term effects might be on your family’s financial health. Formulating a strategy to tackle debt and sticking to it is the key to defeating your personal debt monsters.

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Well, a few billion things probably separate you and me from Bill Gates, but he has a habit that may have contributed to his success in a big way: Bill Gates is a voracious reader.

He reads about 50 books per year.¹ His reason why: “[R]eading is still the main way that I both learn new things and test my understanding.”

On his blog gatesnotes, Gates recommended Hillbilly Elegy by J.D. Vance, the personal story of a man who worked his way out of poverty in Appalachian Ohio and Kentucky into Yale Law School – and casts a light on the cultural divide in our nation. Gates wrote:

“Melinda and I have been working for several years to learn more about how Americans move up from the lowest rungs of the economic ladder (what experts call mobility from poverty). Even though Hillbilly Elegy doesn’t use a lot of data, I came away with new insights into the multifaceted cultural and family dynamics that contribute to poverty.”²

We all have stories about our unique financial situations and dreams of where we want to go. And none of us want money – or lack thereof – to hold us back.

What things, ideas, or deeply-ingrained habits might be keeping you in the financial situation you’re in? And what can you do to get past them? I have plenty of ideas and strategies that have the potential to make big changes for you.

Contact me today, and together we can review your current financials and work on a strategy to get you where you want to go – including some reading material that can help you in your journey to financial independence.

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Nearly 60% of Americans report that they don’t have savings to turn to in the event of an emergency.*

If something unexpected were to happen, do you have enough savings to get you and your family through it and back to solid ground again?

If you’re not sure you have enough set aside, being blindsided with an emergency might leave you in the awkward position of asking family or friends for a loan to tide you over. Or would you need to rack up credit card debt to get through a crisis? Dealing with a financial emergency can be stressful enough – like an unexpected hospital visit, car repairs, or even a sudden loss of employment. But having an established Emergency Fund in place before something happens can help you focus on what you need to do to get on the other side of it.

As you begin to save money to build your Emergency Fund, use these 5 rules to grow and protect your “I did not see THAT coming” stash:

1. Separate your Emergency Fund from your primary spending account. How often does the amount of money in your primary spending account fluctuate? Trips to the grocery store, direct deposit, automatic withdrawals, spontaneous splurges – the ebb and flow in your main household account can make it hard to keep track of the actual emergency money you have available. Open a separate account for your Emergency Fund so you can avoid any doubt about whether or not you can replace the water heater that decided to break right before your in-laws are scheduled to arrive.

2. Do NOT touch this account. Even though this is listed here as Rule #2, it’s really Rule #1. Once you begin setting aside money in your Emergency Fund, “fugettaboutit”… unless there actually is an emergency! Best case scenario, that money is going to sit and wait for a long time until it’s needed. However, just because it’s an “out of sight, out of mind” situation, doesn’t mean that there aren’t some important features that need to be considered for your Emergency Fund account:

• You must be able to liquidate these funds easily (i.e., not incur penalties if you make too many withdrawals)
• Funds should be stable (not subject to market shifts)

You definitely don’t want this money to be locked up and/or potentially lose value over time. Although these two qualities might prevent any significant gain to your account, that’s not the goal with these funds. Pressure’s off!

3) Know your number. You may hear a lot about making sure you’re saving enough for retirement and that you should never miss a life insurance premium. Solid advice. But don’t pause either of these important pieces of your financial plan to build your Emergency Fund. Instead, tack building your Emergency Fund onto your existing plan. The same way you know what amount you need to save each month for your retirement and the premium you need to pay for your life insurance policy, know how much you need to set aside regularly so you can build a comfortable Emergency Fund. A goal of at least $1,000 to three months of your income or more is recommended. Three months worth of your salary may sound high, but if you were to lose your job, you’d have at least three full months of breathing room to get back on track.

4) Avoid bank fees. These are Emergency Fund Public Enemy No. 1. Putting extra money aside can be challenging – maybe you’ve finally come to terms with giving up the daily latte from your local coffee shop. But if that precious money you’re sacrificing to save is being whittled away by bank fees – that’s downright tragic! Avoid feeling like you’re paying twice for an emergency (once for the emergency itself and second for the fees) by using an account that doesn’t charge fees and preferably doesn’t have a minimum account balance requirement or has a low one that’s easy to maintain. You should be able to find out what you’re in for on your bank’s website or by talking to an employee.

5) Get started immediately. There’s no better way to grow your Emergency Fund than to get started!

There’s always going to be something. That’s just life. You can avoid that dreaded phone call to your parents (or your children). There’s no need to apply for another credit card (or two). Start growing and protecting your own Emergency Fund today, and give yourself the gift of being prepared for the unexpected.

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Have you ever wondered how someone could actually retire?

The main difference between a strictly unemployed person and a retiree: A retiree has replaced their income somehow. This can be done in a variety of ways including (but not limited to):

• Saving up a lump sum of money and withdrawing from it regularly
• Receiving a pension from the company you worked for or from the government
• Or an annuity you purchased that pays out an amount regularly

For the example below, let’s assume you don’t have a pension from your company nor benefits from the government. In this scenario, your retirement would be 100% dependent on your savings.

The amount you require to successfully retire is dependent on two main factors:

1. The annual income you desire during retirement
2. The length of retirement

To keep things simple, say you want to retire at 65 years old with the same retirement income per year as your pre-retirement income per year – $50,000. According to the World Bank, the average life expectancy in the US is 79 (as of 2015).¹ Let’s split the difference and call it 80 for our example which means we should plan for income for a minimum of 15 years. (For our purposes here we’re going to disregard the impact of inflation and taxes to keep our math simple.) With that in mind, this would be the minimum amount we would need saved up by age 60:

• $50,000 x 15 years = $750,000

There it is: to retire with a $50,000 annual income for 15 years, you’d need to save $750,000. The next challenge is to figure out how to get to that number (if you’re not already there) the most efficient way you can. The more time you have, the easier it can be to get to that number since you have more time for contributions and account growth.

If this number seems daunting to you, you’re not alone. The mean savings amount for American families with members between 56-61 is $163,577² - nearly half a million dollars off our theoretical retirement number. Using these actual savings numbers, even if you decided to live a thriftier lifestyle of $20,000 or $30,000 per year, that would mean you could retire for 8-9 years max!

All of this info may be hard to hear the first time, but it’s the first real step to preparing for your retirement. Knowing your number gives you an idea about where you want to go. After that, it’s figuring out a path to that destination. If retirement is one of the goals you’d like to pursue, let’s get together and figure out a course to get you there – no math degree required!

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These days, most families are two-income households.

That describes 61.9% of U.S. families as of 2017¹ and 69% of Canadian families as of 2015.² If that describes your family (and the odds are good), do you have a strategy in place to cover your financial obligations with just one income if you or your spouse were to unexpectedly pass away?

Wow. That’s a real conversation-opener, isn’t it? It’s not easy to think about what might happen if one income suddenly disappeared. (It might seem like more fun to have a root canal than to think about that.) But having the right coverage “just in case” is worth considering. It’ll give you some reassurance and let you get back to the fun stuff… like not thinking about having a root canal.

If you’re interested in finding out more about Term insurance and how it may help with your family’s financial obligations, read on…

Some Basics about Term Insurance
Many of life’s financial commitments have a set end date. Mortgages are 15 to 30 years. Kids grow up and (eventually) start providing for themselves. Term life insurance may be a great option since you can choose a coverage length that lines up with the length of your ongoing financial commitments. Ideally, the term of the policy will end around the same time those large financial obligations are paid off. Term policies also may be a good choice because in many cases, they may be the most economical solution for getting the protection a family needs.

As great as term policies can be, here are a couple of things to keep in mind: a term policy won’t help cover financial commitments if you or your spouse simply lose your job. And term policies have a set (level) premium during the length of the initial period. Generally, term policies can be continued after the term expires, but at a much higher rate.

The following are some situations where a Term policy may help.

Pay Final Expenses
Funeral and burial costs can be upwards of $10,000.³ However, many families might not have that amount handy in available cash. Covering basic final expenses can be a real burden, especially if the death of a spouse comes out of the blue. If one income is suddenly gone, it could mean the surviving spouse would need to use credit or liquidate assets to cover final expenses. As you would probably agree, neither of these are attractive options. A term life insurance policy can cover final expenses, leaving one less worry for your family.

Pay Off Debt
The average households in the U.S. and Canada are carrying nearly $140,000⁴ and an average of $22,081⁵ in debt, respectively. For households with a large mortgage balance, the debt figures could be much higher. Couple that with a median household income of under $60,000 in the U.S.⁶ and just over $70,000 in Canada,⁷ and it’s clear that many families would be in trouble if one income is lost.

Term life insurance can be closely matched to the length of your mortgage, which helps to ensure that your family won’t lose their home at an already difficult time.

But what about car payments, credit card balances, and other debt? These other debt obligations that your family is currently meeting with either one or two incomes can be put to bed with a well-planned term life policy.

Income Protection
Even if you’ve planned for final expenses and purchased enough life insurance coverage to pay off your household debt, life can present many other costs of just… living. If you pass unexpectedly, the bills will keep rolling in for anyone you leave behind – especially if you have young children. Those day-to-day living costs and unexpected expenses can seem to multiply in ways that defy mathematical concepts. (You know – like that school field trip to the aquarium that no one mentioned until the night before.) The death benefit of a term life insurance policy may help, for a time, fill in the income gap created by the unfortunate passing of a breadwinner.

But Wait, There’s More… There are term life insurance policies available that can provide other benefits as well, including living benefits that may help keep medical expenses from wreaking havoc on your family’s financial plan if you become critically ill. One note about the living benefits policies, though: If the critical and chronic illness features are used, the face value of the policy is reduced. It’s important to consider whether a reduction in the death benefit would be a good alternative to using savings planned for other purposes.

In some cases, policies with built-in living benefits may cost more than a standard term policy but may still cost less than permanent insurance policies! And because a term policy is in force only during the years when your family needs the most protection, premiums can be lower than for other types of life insurance.

Term life insurance can provide income protection to help keep your family’s financial situation solid, and help things stay as “normal” as they can be after a loss.

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A survivorship life insurance policy is a type of joint insurance policy (a policy built for two).

You may not have thought much about that type of insurance before, or even knew it existed. But joint policies, especially survivorship policies, are important to consider because they can provide for heirs, settle estates, and pay for final expenses after both spouses have passed.

Most joint life insurance policies are what’s known as “first to die” policies. As the unambiguous nickname suggests, a first to die policy is designed to provide for the remaining spouse after the first passes.

A joint life insurance policy is a time-tested way of providing for a remaining spouse. But without careful planning, a typical joint life policy might leave a burden for surviving children or other family members.

A survivorship life insurance policy works differently than a first to die policy. Also called a “last to die” policy, a survivorship policy provides a death benefit only when both insured spouses have passed. A survivorship policy doesn’t pay a death benefit to either spouse but rather to a separate named beneficiary.

You’ll find survivorship life insurance referred to as:

• Joint Survivor Life Insurance
• Second-to-Die Life Insurance
• Variable Survivorship Insurance

Survivorship life insurance policies are sometimes referred to by different names, but the structure is the same in that the policy only pays a benefit after both people insured by the policy have died.

Reasons to Buy Survivorship Life Insurance
We all have our reasons for buying a life insurance policy, and often have someone in mind who we want to protect and provide for. Those reasons often dictate the best type of policy – or the best combination of policies – that can meet our goals.

A survivorship policy is well-suited to any of the following considerations, perhaps in combination with other policies:

• Final expenses
• Estate taxes
• Lingering medical expenses
• Payment of debt
• Transfer of wealth

It’s also most common for a survivorship life insurance policy to be a permanent life insurance policy. This is because the reasons for using a survivorship policy, including transfer of wealth, are usually better served by a permanent life policy than by a term insurance policy. (A term life insurance policy is only in force for a limited time and doesn’t build any cash value.)

Benefits of Survivorship Life Insurance

• A survivorship life policy can be an effective way to transfer wealth as part of a financial strategy.
• Life insurance can be difficult to purchase for individuals with certain health conditions. Because a survivorship life insurance policy is underwriting coverage based on two individuals, it may be possible to purchase coverage for someone who couldn’t easily be insured otherwise.
• As a permanent life insurance policy, a survivorship life policy builds cash value that can be accessed if needed in certain situations.
• Costs can be lower for a survivorship life policy than insuring two spouses individually.

The good news is that life insurance rates are more affordable now than in the past. That’s great! But keep in mind, your life insurance policy – of any type – will probably cost less now than if you wait for another birthday to pass for either spouse insured by the policy.

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