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Habits of a Savvy Saving Family

Habits of a Savvy Saving Family

Apr 2021

When people warn you that having kids is expensive, it’s no joke. From diapers to food, braces to sports activities the costs add up quick. For a middle-income family in the U.S. raising a child up until age 18, costs an estimated average of $245,340 (or $304,480, adjusted for projected inflation), according to the 2013 “Cost of Raising a Child” report from the U.S. Department of Agriculture. Of course, this number fluctuates dependent on where you live and your living habits. Saving money as a family may be more complex than budgeting as a single adult, but it can be done successfully and save you loads for retirement, saving accounts, long vacations, and mean more readily available investment capital.

Yet, saving money doesn’t have to mean drastic reductions, rather small, targeted steps as an entire family can mean substantial savings. No matter the size of your family, use these tips to increase your family’s frugality and reduce the constant feeling of financial squeeze:

First and foremost, hold family budgeting meetings. Like any good business that needs a stable budget to be profitable, your family will thrive with a clearly defined and agreed upon budget.Include your spouse and older children (kids feel great about contributing to “adult” decisions), at a regular decided upon time—for example, the first Sunday of the month after dinner. (This helps to establish it as a habit.) Use an organizing tool like a spreadsheet, app, or budgeting binder that can be easily edited. And, you want to focus in on four main topics:

  1. Review past spending and compare this to the set budget. (There are some great budgeting apps like Wally, Mint, and GoodBudget that can help you easily visualize the breakdown of what categories you spend the most on.)
  2. Establish spending for the coming budget period and define in what categories.
  3. Identify any current problems and potential issues with the budget and brainstorm solutions
  4. Define any goals and track progress on current goals like paying off your eldest son’s braces or putting away a certain amount toward college.

Take a staycation

When every one of your kids’ friends are bragging about their upcoming spring break trips to Disneyland, the beach in Florida, or skiing in the Rocky Mountains, it’s hard to tell your kids that they’re staying home for their week off. But, that’s precisely what you should do. There is plenty to be explored in your own community and nearby metro areas. Take some days off of work and between free museum days, outdoor activities like hiking or bike riding, and movie theater matinees, a staycation will still be filled with memories and quality time together.

Embrace energy efficiency.

We all know turning off the lights after you leave the room, using energy-smart appliances, and taking shorter baths/showers is good for the environment. But, it’s also good for your monthly bills. Even if you don’t have the resources right now to install new, appliances that use less water and energy, the entire family can still conserve energy and thus, money. Make it a game to turn off the TV when done watching, unplug electronics, and turn the faucet off when brushing teeth. Start with a couple energy-saving techniques and then add a new one to focus on every couple of weeks.

Meal plan like a boss.

After a long day at work for you and school for the kids, the easiest diner option—a pizza, fast food, Chinese takeout—can feel like the perfect, simple solution. But it’s going to end up costing you more in the long run in both money and nutrition. Meal planning may feel time consuming at first, but after a few weeks you’ll have it down to a science. Over the weekend—Sunday perhaps—plan out what your family’s going to eat for the week. Make meals ahead and stick them in the freezer or do some shopping to get ingredients for the week, or at least the first few meals of the week in advance. Buy in bulk whenever possible. Luckily there are some apps to help with this process like Plan to Eat, Cook Smarts, and even Pinterest could be used to your advantage.

It’s okay to say ‘no.’

Anyone with children will tell you a trip to any store—grocery, drug store, mall—is incomplete without multiple asks of “Can I get this?” followed by a temper tantrum. Or, things like sugared cereal and toys are just placed in the cart when your back is turned. All of these little extra add-ons can add up over the course of the month with little to show except a kid sometimes amped up on candy with another stuffed animal in the toy box. Once your kids are old enough to understand, have them help you make a list of what you’re going to buy and then check it off while shopping. If they fuss about something explain it’s not on the list and so it’s not the time purchase it…unless they can and want to do so with their allowance.

Find the free.

Check your community’s calendars of free things to do. Often times you’ll find free story times, music, and outdoor activities—especially for the kids. Oh, and don’t forget the kids eat free or half priced nights at different restaurants. Throw one of these events together with some time at the park and you have yourself a fun-filled, free, child-friendly day!

Plan your purchases

It may seem like commonsense, but most things from winter coats and cable knit sweaters to outdoor grills and inflatable pools are sold seasonally. That means you can usually find the best discounted price on many items right after the season for the use has passed. Buy Halloween costumes for the next year right after Halloween this year. Same goes for holiday décor and swimsuits.

Do date night on the down low.

your partner. That doesn’t always have to mean dinner at a restaurant and a movie, concert or theater performance. While those things are fun, see if family or trusted friends will take the kids for a bit while you and your love have a cozy night in making a nice meal and watching a new movie on the Netflix queue.

Resources

  1. http://www.huffingtonpost.com/2014/08/18/cost-of-raising-a-child_n_5688179.html
  2. http://money.usnews.com/money/personal-finance/slideshows/12-habits-of-phenomenally-frugal-families
  3. http://money.usnews.com/money/personal-finance/slideshows/12-habits-of-phenomenally-frugal-families
  4. http://www.busybudgeter.com/family-budget-meeting-step-step-guide/
  5. https://www.policygenius.com/blog/smart-financially-savvy-mom/
  6. http://shalommama.com/money-saving-tips
  7. http://www.goodfinancialcents.com/simple-money-saving-tips-for-families/

tags: help with budget, retirement

Help with My Budget and Spending

Help with My Budget and Spending

Apr 2021

Saving for retirement is very important, but many people feel that they can’t spare the money to participate in a retirement plan or even create a basic savings account. Retirement plan consultants suggest that the first step is to create a budget. Once you figure out where your money is going, you can look for ways to save more.

Track your spending -

There are a number of ways to create a budget, but one of the easiest ways to get started is to simply record everything you spend. A notebook works just fine, but you can also use your phone or other device. The key is that it needs to be portable, and you need to note every time you spend money, even on cups of coffee or snacks. Many people find this to be an eye-opening experience, since they don’t realize how much spending they actually do. It’s becoming much easier to swipe a card or even use digital payments, so you don’t always have the sensation of handing away your money.

Once you’ve collected at least a month’s worth of information, you can start creating your budget. At this point a spreadsheet or an online budgeting program could be very helpful. Ideally, you should be able to divide your expenses into three categories:

Fixed Expenses -

These are regular payments you make every month, like house or car payments, or electric and utility bills. Make sure you include any subscriptions, like moving streaming services or gym memberships

Flexible Expenses -

These are expenses that vary from month to month, like entertainment,gasoline, groceries, hobbies, or other bills that change every month. Some of these are necessities, like groceries or gas, but you can still control how much you spend on food(groceries versus dining out, for example) or gas (by sharing rides, walking, or biking instead).

Financial Goals

These are expenses that are important for your future. Paying down credit card bills or saving for a down payment on a home are two examples. You should definitely establish an emergency fund for unexpected expenses, like car or home repairs, and start saving for retirement.

Start making changes -

Once you’ve established your baseline budget, you can start looking for ways to trim your flexible and fixed expenses, and use those funds for your financial goals. Can you pack a lunch more often instead of eating out? Can you make your own coffee instead of buying a cup each day? And remember, fixed expenses aren’t always “fixed” – can you eliminate some subscriptions, reduce your utility bills, or make other changes to free up money?

Paying down high-interest debt and establishing an emergency fund are key goals, but remember that you also need to save for retirement. If your employer offers a tax-advantaged retirement plan, like a 401(k), you’ll want to take full advantage of it as soon as possible. Starting now gives your money more time to grow through compounding, and will help put you on the road to a successful retirement.

Benefits and Insurance for People with Disabilities

Benefits and Insurance for People with Disabilities

Apr 2021

If you can't work because you get sick or injured, disability insurance will pay part of your income. You may be able to get insurance through your employer. You can also buy your own policy

Types of Disability Policies

There are two types of disability policies.

  • Short-term policies may pay for up to two years. Most last for a few months to a year.
  • Long-term policies may pay benefits for a few years or until the disability ends.

Employers who offer coverage may provide short-term coverage, long-term coverage, or both. If you plan to buy your own policy, shop around and ask:

  • How is disability defined?
  • When do benefits begin?
  • How long do benefits last?
  • How much money will the policy pay?

Federal Disability ProgramsTwo Social Security Administration programs pay benefits to people with disabilities. Learn about Social Security Disability Insurance (SSDI) and Supplemental Security Insurance (SSI).

Social Security Benefits for People with Disabilities

The Social Security Administration (SSA) has two programs that provide benefits to people with disabilities:

  • Social Security Disability Insurance (SSDI). SSDI is for people who have earned enough Social Security work credits within a certain time period

Definition of Disability

To qualify for either program as a person with a disability, you must meet SSA’s definition of disability, which says:

  • You can’t work, and
  • Your disability is expected to last for at least one year or result in death

Social Security uses a step-by-step process to decide if you have a disability. Partial and shortterm disabilities do not meet SSA’s standard and are not eligible for benefits.

Benefit Eligibility Screening Tool

You can use the Benefit Eligibility Screening Tool to find out quickly whether you may be eligible for SSDI or SSI disability benefits.

Learn More About Social Security Disability Insurance (SSDI)

Work Requirements

When you work and pay Social Security taxes, you earn Social Security “work credits,” up to four a year depending on your income. To be eligible for SSDI, you must have accumulated a certain number of work credits, some of them relatively recently. The number of work credits you need is based on your age when you stopped working due to your disability.

Benefits for Family Members

Your spouse or former spouse and your children may be eligible for benefits when you start receiving SSDI in some situations.

Applying for SSDI

You can apply for benefits online, by phone, or in person.

  • If your application is denied, you can appeal the decision.
  • If your application is approved, you’ll start receiving benefits about six months after your disability began. You’ll automatically be enrolled in Medicare two years after you begin receiving SSDI payments.

Returning to Work

You can generally return to work without losing your SSDI benefits if you earn less than what SSA considers a “substantial” amount. In 2018, average earnings of $1,180 or more per month are usually considered substantial.

Learn More About Supplemental Security Income (SSI)

SSI benefits are for adults and children with a disability who have little income or resources. Seniors 65 and older without a disability may be eligible for benefits if they meet the income limits. People who are eligible to receive SSDI may be eligible for SSI too.

In most states, people who receive SSI also receive Medicaid coverage. Many states also provide supplemental payments to certain SSI recipients.

Defining Disability for SSI

Adults under 65 must meet SSA’s definition of disability.

For a child, disability means:

  • Having a physical or mental impairment that causes marked and severe functional limitations
  • The disability is expected to last for at least one year or result in death

Applying for SSI

Adults can apply for SSI by phone, in person at a local Social Security office, or in some cases online. To apply for SSI for a child, you can start the process online but will need to complete it either in person or by phone.

  • You can appeal if your claim is denied.

Explore this listing of SSI topics to learn more detailed information.

Going to Work

SSI work incentives can help you go to work by lowering the chances that you’ll lose your SSI benefit or Medicaid coverage. You can earn $65 a month without it affecting your cash benefit. Beyond that, your SSI payment will go down $1 for every $2 you earn.

Health Coverage for People With Disabilities

If you have a disability, you have a number of options for health coverage through the government.

  • Medicaid provides free or low-cost medical benefits to people with disabilities. Learn about eligibility and how to apply.
  • Medicare provides medical health insurance to people under 65 with certain disabilities and any age with end-stage renal disease (permanent kidney failure requiring dialysis or a kidney transplant). Learn about eligibility, how to apply and coverage.
  • Affordable Care Act Marketplace offers options to people who have a disability, don’t qualify for disability benefits, and need health coverage. Learn about the Marketplace, how to enroll, and use your coverage.

Health Resources for People With Disabilities

Federal, state, and local government agencies and programs can help with your health needs if you have a disability.

  • Explore the Disability and Health section of CDC.gov for articles, programs, tips for healthy living and more
  • Learn more about assistance and benefits for people with disabilities from the Social Security Administration.
  • Contact your local city or county government to find out what medical and health services are available locally for people with disabilities.
  • Your state social service agency can help you locate medical and health programs.
  • Visit USA.gov’s Government Benefits page to learn more about government programs and services that can help you and your family.

https://www.usa.gov/disability-benefits-insurance

tags: disability insurance, disability, insurance, retirement

NFPR-2019-81

Disability Insurance 101

Disability Insurance 101

Apr 2021

Think about it. What would happen if suddenly, due to an illness or injury, you were unable to work?

Without your paycheck, how long would you be able to make your mortgage or rent payment, buy groceries or pay your credit card bills without feeling the pinch? If you’re like most, it wouldn’t be long at all:7 in 10 working Americans couldn’t make it a month before financial difficulties would set in,and one in four would have problems immediately, according to a Life Happens survey.

That’s where disability insurance comes in. Think of it as insurance for your paycheck. It ensures that if you are unable to work because of illness or injury, you will continue to receive an income and make ends meet until you’re able to return to work.

You don’t hesitate to insure your home, car and other valuable possessions, so why wouldn’t you also protect what pays for all those things—your paycheck

Explore this section to learn more about the different sources of disability income protection and ways to get coverage.

Who Needs It?

Simply put, if you have a job, you most likely need disability insurance. The possibility of a disabling illness or injury may seem remote, but statistics say otherwise.

You actually have a three in 10 chance of suffering a disability that keeps you out of work for 90 days or longer at some point during your working career. And keep in mind that 90% of disabilities are caused by illnesses not accidents.

Most of us have some kind of personal debt, such as a mortgage or credit card bills. Would you be able to maintain your standard of living if you were too ill or injured to work for an extended length of time? Plus, a disabling injury or illness could lead to medical bills, modifications to your car or home or other unforeseen needs that can be quite expensive.

You also have to think long term. How much do you earn in a year and what would that be over a lifetime.A 25-year-old worker who makes $50,000 a year and suffers a permanent disability could lose $3.8 million in future earnings.

For all these reasons, almost anyone who works—whether they’re single, married, with children or without—should consider disability insurance.

  1. The Real Risk of Disability in the United States, Milliman Inc., on behalf of the LIFE Foundation, May 2007
  2. The Council for Disability Awareness, Long-Term Disability Claims Review, 2010

What Do You Know About Disability Insurance” survey, Life Happens, 2018

https://lifehappens.org/insurance-overview/disability-insurance/

Insurance Basics

Insurance Basics

Apr 2021

Insurance may be less about if you’ll need it than when you’ll need it. Anyone who started driving at 16 is likely to have had a claim by the time they’re 34. More than 1 in 20 insured properties reported a claim in 2016, according to Insurance Services Office (ISO). And according to the U.S. government, someone who turns 65 this year has an almost 70% chance of needing long-term care services, which are generally not covered by Medicare.

A network of prudent insurance coverage is the foundation of any solid financial plan. A single healthcare crisis, incident of property loss, or other liability can quickly wipe out a lifetime of savings. The types of circumstances that may require the use of insurance may not be a subject we like to think about, but it’s one of the most important issues to address when planning for the financial security of you and your family.

Here are some common types of insurance available and the associated risks they can help address.

Health Insurance:

Many people receive health insurance through their employer, while others purchase it independently. Health insurance can cover everything from preventive care, treatment for injuries and disease and mental health treatment, as well as products and equipment necessary to address various medical needs. Your insurance may dictate from whom and in what types of facilities you are eligible to receive treatment. It will also indicat what your responsibilities are for payment in terms of deductibles and any limits to your coverage. It is critically important that you review your health insurance on an annual basis and fully understand your policy.

Auto Insurance:

Your automobile insurance is designed to cover property damage and personal injury in the event of an accident. The amount of coverage for these occurrences can range dramatically from policy to policy. With car insurance, you not only have to be concerned about covering your own liability if you’re at fault — but damage that may be caused by uninsured drivers as well. One in eight drivers are uninsured according to The Insurance Information Institute. Luckily uninsured motorists coverage for both property damage and bodily injury is available, although not all states require it.

Disability Insurance:

This covers loss of income resulting from injury or illness. Many people receive disability insurance from their employer, but not everyone does — so it’s important to understand whether or not you have this benefit. If you do not have disability insurance through your employer, you may wish to buy a private policy. You may elect to purchase short-term disability insurance, long-term disability insurance or both. Many people think they’re automatically covered for disability losses through Social Security disability, otherwise known as SSD. However, SSD which is administered through the Social Security Administration, has stringent requirements:

  • You are unable to perform the work you did before.
  • The SSA determines you are unable to do other work due to your condition(s).
  • The disability is expected to last at least a year or lead to death.

Private disability insurance eligibility requirements are often less strict and no not require a complete inability to work in order to receive benefits. And it is possible to receive SSD and benefits from private disability insurance simultaneously.

Long-term Care Insurance:

This can cover medically necessary assisted living or nursing home care —or if you require help at home to carry out daily activities. Many people mistakenly assume that Medicare pays for such services, but this would be a faulty assumption. With Medicare, coverage is generally limited to rehabilitation from an acute injury or illness where a full recovery is anticipated as opposed to long-term care needed in old age as a result of gradually declining function. This type of care is extremely costly. Here are some averages according to government statistics:

  • $6,844/month for a semi-private room in a nursing home
  • $7,698/month for a private room in a nursing home
  • $3,628/month for care provided in an assisted living facility

Life Insurance:

This coverage pays a death benefit when the insured passes away. It’s particularly important for breadwinners with family members who depend on their income. Life insurance needs often change over time as children grow up and move out of the house. Here’s an article that explains some common types of life insurance (link to previous life insurance blog here). This may be the type of insurance people don’t like to think about the most — but in the event of the unthinkable, it may matter the most.

Property and Casualty Insurance:

P&C can cover your home and possessions as well as provide personal liability protection should you injure someone or damage their property. It’s a broad category of insurance. Here are some common types:

  • Homeowners Insurance:insures your home and possessions in the event of theft or damage. It’s important to know your deductible for different types of losses, and any limitation for certain types of events, such as floods and hurricanes.
  • Renters Insurance:this insurance is specifically designed for renters, who do not own their dwelling. It is substantially less expensive than homeowners insurance, and can cover property and liability as a renter.
  • Condo Insurance: These policies can mitigate risks specific to condominium owners,including portions of the structure they’re responsible for, as well as assessments levied against owners to pay for repairs or improvements to commonly owned elements.
  • Umbrella PolicyAn umbrella can extend the coverage of your auto and homeowners insurance policies. Carriers will generally require insured individuals to have a minimum amount of coverage already in place before they will write an umbrella policy.

Risk is a part of life — there’s no getting around that. But with solid insurance coverage, you just might be able to sleep a little better at night no matter what the future may hold.

Reference:

https://www.iii.org/fact-statistic/facts-statistics-homeowners-and-renters-insurance

https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html

Tags: Baby Boomer, behavioral finance, education, finance, insurance, millennials, retirement planning, risk management


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