Posted in Budgeting for Everyone, Building Wealth, Financial Freedom, Quick Guide to Insurance, Winning with Your Money, You and Your Money

6 Types of Mandatory Insurance

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In today’s insurance world, there are hundreds of types of insurances available.  This can be overwhelming at times – trying to decide what you should have and what is just a gimmick.  With so many gimmick insurances out there that sound good, I want to help you sort through them so that you have everything you need in case “life” happens to you.  Today, I want to share the 6 types of insurance policies everyone should have.

  1. Home/Renters – If you live on your own, you need some type of insurance to cover your belongings.  Home insurance is obvious and is required by mortgage companies to have.  But renters insurance is just as important.  If you are renting, you don’t need to replace the actual home/unit you live in.  However, your stuff is valuable and you would want something in place to cover if anything happens to it.  Renters insurance is extremely inexpensive.  Just like all insurance, don’t overbuy.  A $10,000 policy is enough in most cases.  Take an inventory and make sure you have enough to cover your valuables.
  2. Auto – Auto insurance is another mandatory insurance if you own a vehicle.  Make sure you have enough to cover the car you own and that you have the right coverage for the age of the vehicle.  Make sure your deductible is in line with your emergency fund.  If you have a good emergency fund, raise your deductible in order to save money.  Going from $500 to $1000 can save you hundreds a year.
  3. Health – At the moment health insurance is mandatory with a penalty if you don’t have it.  But many Americans have chosen to pay the penalty over having the insurance.  I know health insurance is crazy right now, but not having it can cost you way more than having it.  You may be young and healthy, but that can change in a moment.  Our son had his appendix removed a few years ago and without insurance it would have cost over $50,000.  Without some form of health insurance he would have been responsible for that and most 26 year olds don’t have that kind of cash laying around.  Shop around and find some form of health insurance even if the deductible is a little high.  $5,000 is easier to pay off than $50,000.
  4. Life – If you have a spouse, kids, a house, debt, you must have life insurance.  When you die, you don’t want to leave a burden for your spouse or family.  At the very least, get a term policy to cover your income and debt.  Ideal is to get 10 times your income and I highly recommend this, but so many people get no insurance because they think they can’t afford the ideal.  Start somewhere and add to it as you can.  Term is always better than life, but something is better than nothing.
  5. Long Term Care – If you are 60 or older, you need long term care insurance.  People are living longer and the price of elderly care is rising.  The younger you are when you get long term care insurance, the less expensive it is.  And if you all the sudden are diagnosed with something, you may not be able to get it.  Remember, this doesn’t just cover a nursing home – it covers in home care and many other items that health insurance won’t cover.
  6. Long Term Disability – What would happen to your finances if you were disabled or had a long term health condition?  This insurance will help relieve the stress of an already stressful situation.  Again, this is a relatively inexpensive insurance, but can change your world if needed.

There are a few other that may be good to have in your situation – umbrella policy, identity theft insurance, etc.  But you need to understand that many policies seem like a good idea, but are really just gimmick insurances.  2 examples come to mind right away – pet insurance and cancer insurance.  An emergency fund will cover any pet costs and your health insurance and long term disability will cover cancer cost.  If you run the numbers on this policies, you would see that if you take what the policy costs and save it, you will be covered if the emergency happens.

So now that you are ready to get your insurance portfolio up to date, where do you go?  I always recommend an independent agent who can shop the best policy and company for you among hundreds.  Your goal is to get exactly what you need at the best possible price.  You may be saying “I can’t afford all this insurance” but can you really afford to not have it?  Shop around and set a goal to have all six in place as soon as you can.  You won’t regret it!

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Posted in Budgeting for Everyone, Building Wealth, Debt Free, Financial Freedom, Saving for Your Future, Winning with Your Money, You and Your Money

The Biggest Myth About Needs

dd_01_filetWould you describe this steak as a need or a want?  Okay, that one was easy (it’s a want).  But what about a pair of jeans or shoes?  Or even a washing machine?  Or, the best one, a cell phone?

Each of the items listed above is a want.  Yes, a want.  A need is something that you must have to live, to survive.  And nothing I listed above falls under that description.  We actually only need a few things in life.  We need a roof over our head.  We need food in our bellies.  We need clothes on our back.  However, we don’t need a 2,000 square foot home with granite countertops.  We don’t need steak.  And we definitely don’t need multiple pairs of shoes, jeans or tops.

I had trouble with this one.  I would convince myself that I needed everything that I had – that I just couldn’t survive without them.  God taught me this lesson in the form of a washing machine.  One day my washing machine broke down and I had no way to fix it or replace it.  I was just starting my debt free journey so I didn’t have the cash to pay for a new one – or even a used one – and I wasn’t going to use a credit card.  So what was the answer to my conundrum?  I didn’t need a washing machine.  I knew this because my grandmother didn’t have one for many years and she survived just fine.  (She was my example on my journey)  So I hand washed my clothes for several months until I could save up for a new washing machine.  Was it easy?  No.  Was it annoying?  Yes.  But it was worth not mortgaging my future for something I didn’t need.

The biggest myth about needs is what actually defines a need.  You see, you can have anything you want, but you must meet your needs first and then go after your wants.  If you are homeless, you shouldn’t have a cell phone.  If you are behind on your mortgage, you shouldn’t be eating out.  When you understand the concept of needs versus wants, you will prioritize differently and make better financial decisions knowing that you can live without something for a while.  And a side benefit to embracing this new understanding is you will realize how truly blessed you are.  You not only have your needs met, but you have most of your wants as well.  And if you are on your wealth and financial freedom journey now, it will motivate you to make choices that will move you forward even faster.

You can have anything you want, but you can’t have everything.  Life is about priorities and choices.  Make sure your true needs are always met (they are for most of us) and then prioritize your wants based on your finances and future goals and dreams.  And please don’t misunderstand me or the point of this article – I have a cell phone, a washing machine, a nice home, and I eat steak.  But I have also gone through times in my life where I didn’t have those things and I lived just fine.  Never mortgage your present or your future to obtain or do things that fall in the want category.  It’s not worth it.

Have a blessed and prosperous week!  ~Debbi

http://www.debbiking.com

Check out Debbi’s award winning books on Amazon and Barnes and Noble

Posted in Building Wealth, Financial Freedom, Winning with Your Money, You and Your Money

Key to Prosperity

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I love sharing this picture over and over.  People think that they can build wealth and reach financial freedom by spending more than they make or waiting until they are older to begin investing in their future.  And it is simply not true.

Today, however, I don’t want to talk about the math.  I want to talk about the emotions of prosperity.  Personal finance is 10% math and 90% emotion.  We get the math shown above, but how we think and the decisions we make keep us from building wealth.

The biggest obstacle we face is ourselves – believing that we can or even should obtain wealth.  God says in Deuteronomy 8:18 that He has given each and every one of us the ability to obtain wealth.  This means that it doesn’t matter where you were born, what your job is, or what your circumstances are.  It doesn’t matter what others do.  All that matters is that you believe in yourself and that you partner with God to make His will happen.

There are so many people in the world, especially Christians, that believe that God doesn’t want us to be prosperous.  They believe that God wants us to remain poor.  And nothing could be further from the truth.  God wants us to remain humble, always, and to give Him the glory, but He also wants us to be prosperous.

First of all, He not only wants to meet our needs, but to give us the desires of our hearts.  He wants to partner with us to have and do the things that mean the most to us.  This is why what one person may receive is different than what others receive.  For example, my dreams include a lot of travel.  For others, their dream is to have a nice home.  Everyone is different and God works with us each individually to reach those dreams.  He also wants us to be an awesome example out in the world.  How can people see how great God is if all of His people are poor?  And if we remain poor, how can we help those in need and be used by Him to meet the needs of others?

God is a god of love and He wants the best for all of His children.  He wants us to have the career that we want to have.  He wants us to have the things that truly make us happy.  He wants us to give to others knowing that giving is a great contributor to happiness.  God wants us to be happy!  He doesn’t want us “just getting by”.  Jesus came “that we may have and enjoy life and have it in abundance.”  John 10:10 (AMP)  

Stop having a poor person’s mentality.  Stop believing that it is God’s will that you struggle or that you are stressed.  Nothing could be further from the truth.  Start partnering today with God to find your true passion, to lay out all of your dreams (current and future), and to believe that you can have anything you want if you just believe.  “Believe and you shall receive.”

Have a blessed and prosperous week!

Love ~Debbi

http://www.debbiking.com

http://www.lovellministries.org