Source: Why I Decided To Protest
This is a post that I needed to share – It was written by a 20 year old college student. I couldn’t have said it better. This country shouldn’t be about sides, but always working together for the better of the country.
Please read and share! Have a blessed week!
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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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!
Would 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
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