Enemy of Debt http://www.enemyofdebt.com Motivational Money Management Wed, 01 Oct 2014 07:34:43 +0000 en-US hourly 1 The Power Of A Support System http://www.enemyofdebt.com/the-power-of-a-support-system/ http://www.enemyofdebt.com/the-power-of-a-support-system/#comments Mon, 29 Sep 2014 13:00:37 +0000 http://www.enemyofdebt.com/?p=15273 Enemy of Debt - The Power Of A Support System

“Why does part of my brain keep wondering if I’m really going to be able to finish next week?” I asked my wife. At 8:00am on this coming Sunday the starting gun will fire, and I’ll begin a 26.2 mile run that is the Twin Cities Marathon. I’ve been training hard for the last 9 months, but a little piece of my consciousness seems to want to focus on how hard the last couple of long runs have been.   Then I think about how much further I have to run to complete the marathon and wonder if I’ll really be […]

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Enemy of Debt - The Power Of A Support System

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“Why does part of my brain keep wondering if I’m really going to be able to finish next week?” I asked my wife.

At 8:00am on this coming Sunday the starting gun will fire, and I’ll begin a 26.2 mile run that is the Twin Cities Marathon. I’ve been training hard for the last 9 months, but a little piece of my consciousness seems to want to focus on how hard the last couple of long runs have been.   Then I think about how much further I have to run to complete the marathon and wonder if I’ll really be able to do it.

“I don’t know either,” she stated bluntly. “I’m in awe of what you’ve done in your training. This isn’t the first time you’ve done this, and you said yourself that your training has gone very well. You’re going to ROCK this marathon!”

A little tear formed in the corner of my eye.

I know she’s right. My training HAS gone well. I HAVE done this before and know exactly what to expect. But hearing her words of support at that moment meant the world to me. In the days leading up to the race I spend a few minutes each day giving myself positive reinforcement, going over my hydration and fueling plan, and visualizing crossing that finish line. Ever since that conversation, I replay her words in my head.   They’ll also likely echo in my head as I run the actual marathon, maybe even as I cross the finish line.

Completing a marathon requires a runner to physically exert themselves a high level for several hours. It’s a task that’s not only hard from a physical perspective, but a mental one as well. I can tell you from personal experience that hearing words of encouragement from strangers is invaluable. Seeing a loved one on the side of the street along the way feels like a shot of energy right to your core.

Words of support are that powerful.

Getting out from under the rock of crushing debt is a mentally and physically grueling task in its own right. Hearing words of encouragement along the way makes it just a little easier to keep moving along the path towards your goal.

Here are some of the examples of the countless pushes of encouragement I received in the 55 months Vonnie and I were paying off $109,000 of credit card debt:

Friends: We only told a select few of our friends about our situation. But, those that did know were extremely supportive. They did not judge us, and cheered us all the way to the finish line.

Family: Again, there were only a few family members to whom we disclosed all the details of what we were going through. But when we needed someone to lean on, our family was there. We even needed to swallow our pride and ask for financial help a few times from family members when an unexpected expense popped up that we did not have the funds to take care of on our own.

Readers: I was fortunate enough to find blogging as a part-time career as we fought our way out of debt. As I shared our struggles and successes through various blogs, readers were a pillar of support and encouragement.

We were very selective in whom we told about our debt when we began our journey out of debt. But as time went on we felt more confident in what we were doing, and the progress being made. We began to expand our circle of support, and the crowd of people cheering us on became larger and larger. By the time our final payment approached in January of 2014, there was a sea of people lining the streets, yelling wildly, pushing us towards the finish line.

We couldn’t have made it without them.

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How to Get Ahead if You’re Living Paycheck to Paycheck http://www.enemyofdebt.com/how-to-get-ahead-living-paycheck-to-paycheck/ http://www.enemyofdebt.com/how-to-get-ahead-living-paycheck-to-paycheck/#comments Sun, 28 Sep 2014 21:10:19 +0000 http://www.enemyofdebt.com/?p=15269 Enemy of Debt - How to Get Ahead if You’re Living Paycheck to Paycheck

Some recent studies showed that more than two thirds of people are living paycheck to paycheck at least some of the time. That’s pretty incredible! It seems to be getting harder and harder to keep your head above water financially, and there is no lack of reasons why that’s happening. Some of it is because our attitudes about money have changed over the years.  Some of it is also because of the changing economy, and some of it is probably due to the fact that the world is rapidly changing, and some are getting left behind because they refuse to […]

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Enemy of Debt - How to Get Ahead if You’re Living Paycheck to Paycheck

Some recent studies showed that more than two thirds of people are living paycheck to paycheck at least some of the time.

That’s pretty incredible!

It seems to be getting harder and harder to keep your head above water financially, and there is no lack of reasons why that’s happening.

Some of it is because our attitudes about money have changed over the years.  Some of it is also because of the changing economy, and some of it is probably due to the fact that the world is rapidly changing, and some are getting left behind because they refuse to change.

But this isn’t necessary a recent problem.  It’s been happening even since ancient times, as evidenced in the Bible in Haggai 1:6, where it says:

You have planted much, but harvested little. You eat, but never have enough. You drink, but never have your fill. You put on clothes, but are not warm. You earn wages, only to put them in a purse with holes in it.”

But just because there are plenty of reasons why it’s harder to make ends meet doesn’t mean that you can’t still become financially successful.

There is always hope.

 

Getting Rid of the Paycheck to Paycheck Mindset

Any time you’re trying to bring about change in your life, you have to start with the conscious decision that no matter what, you’re going to make that change happen.

So when you’re living paycheck to paycheck and it seems there is just no way to get ahead, the first step you have to take is to get your mind right.

It’s so easy to believe that living paycheck to paycheck is just the way your life will always be.

But it doesn’t have to be.

Once you get your mind right, there are several steps you can take to get off the paycheck to paycheck treadmill and overcome the mindset that comes with it.

Read below to discover exactly how you can get it done.

 

Understand Why You’re Living Paycheck to Paycheck

Now that you have achieved the right mindset and made the decision that you’re never going back, then you have to figure out how you got there in the first place.

Here are some of the common reasons that come to mind:

  • Luxuries Have Turned Into Needs- Eating out several times a week, Cable TV, and a lot of other things that used to be extras have become “necessities”.  But seriously, these are not needs, they are wants.  You can add them back once you fix your finances.
  • You’re Overspending- Like most people, you spend more than you make. You need to gain more control over your spending.  This usually happens because you don’t have a plan.
  • You Decided That Debt is Just a Part of Life- It doesn’t have to be.  You have to decide to be different, because being normal means you’re broke.  Car payments and credit cards DO NOT have to be a part of your life.
  • It’s Too Easy to Spend Money- Credit cards don’t feel like real money.  When you swipe and sign it doesn’t hurt the same as when you’re using cash.  The result is that you end up overspending before you even realize what you’ve done.
  • You’re Not Making Enough Money- You may be underemployed. Or maybe you’re just being average at your work and need to kick it up a notch to achieve the raises and opportunities that come with being awesome at work.
  • You Don’t Have a Plan For Your Money- You don’t really keep track of your money and you just keep spending until the money runs out.  Then you get your next paycheck and do it all over again.  You don’t have the slightest clue where all your money goes.  This is the number one reason most people end up living paycheck to paycheck.
  • You Have a Serious Spending Problem- You may have a lack of self control that you need to address, such as a shopping addiction.
  • The Job Market is Changing- Businesses have been changing the way they hire and compensate employees.  It’s very important that you learn to change with the times and understand how to overcome the challenges that come with the changing business environment.

There is a great book by Dan Miller titled “48 Days to the Work You Love- Preparing for the New Normal” that can help you with that. (affiliate link)

 

Be Brutally Honest With Yourself

It’s time to be brutally honest with yourself if you want to figure out what is truly causing your financial problems.

It might be painful to confront your issues, but lying to yourself is never going to help you move forward in life.

Once you start to understand some of the main reasons why you’re living paycheck to paycheck, then you can start taking concrete steps to totally overcome them.

In my next post, I’ll give you specific strategies to help you leave the paycheck to paycheck life for good, so you can move ahead financially,

Until next time…

Question:  Have you struggled with any of the problems in the bullet points above?

Leave a comment and tell me which one you struggle with the most.

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I Love You Like A Blogger Roundup – 9/26 http://www.enemyofdebt.com/i-love-you-like-a-blogger-roundup-926/ http://www.enemyofdebt.com/i-love-you-like-a-blogger-roundup-926/#comments Fri, 26 Sep 2014 12:07:33 +0000 http://www.enemyofdebt.com/?p=15256 Enemy of Debt - I Love You Like A Blogger Roundup – 9/26

Who has two thumbs and is taking the day off today?  >>>> THIS GUY <<<< The kids are off to school, and Vonnie and I are off to the Renaissance Festival in Shakopee, MN for the day.  It’ll be a fun day of shows, comedy and eating.  Although I *need* to be relatively mindful of my eating as I am trying to keep the right kinds of fuel in me with my marathon just over a week away. Speaking of the marathon, I’m mentally preparing for it each and every day.  I’m anxious.  I’m excited.  I can’t wait.  Did I […]

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Enemy of Debt - I Love You Like A Blogger Roundup – 9/26

Who has two thumbs and is taking the day off today?  >>>> THIS GUY <<<<

The kids are off to school, and Vonnie and I are off to the Renaissance Festival in Shakopee, MN for the day.  It’ll be a fun day of shows, comedy and eating.  Although I *need* to be relatively mindful of my eating as I am trying to keep the right kinds of fuel in me with my marathon just over a week away.

Speaking of the marathon, I’m mentally preparing for it each and every day.  I’m anxious.  I’m excited.  I can’t wait.  Did I mention it was just over a week away?  Fist pump!

Posts That Make Me Fist Pump

Shameless Self Promotion

Other fist-pumping posts I wrote, or appeared in this week from around the personal finance blogosphere:

 

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Credit Cards Are Officially NOT For Me http://www.enemyofdebt.com/credit-cards-are-not-for-me/ http://www.enemyofdebt.com/credit-cards-are-not-for-me/#comments Mon, 22 Sep 2014 12:33:58 +0000 http://www.enemyofdebt.com/?p=15237 Enemy of Debt - Credit Cards Are Officially NOT For Me

Some use credit cards for as many of their day to day expenses as possible in order to rack up reward program points. Some even go through a process called credit card churning to earn points for signing up for a new accounts in exchange for cash, airline miles, or travel accommodations.  I know people that have taken their entire family on a free, or nearly free, trip by using such methods. Good for them, as long as they’re using their cards responsibly. But this kind of “beat the system” mentality is not for everyone. Not everyone has the internal […]

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Enemy of Debt - Credit Cards Are Officially NOT For Me

CClock

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Some use credit cards for as many of their day to day expenses as possible in order to rack up reward program points. Some even go through a process called credit card churning to earn points for signing up for a new accounts in exchange for cash, airline miles, or travel accommodations.  I know people that have taken their entire family on a free, or nearly free, trip by using such methods.

Good for them, as long as they’re using their cards responsibly.

But this kind of “beat the system” mentality is not for everyone. Not everyone has the internal self-discipline to use credit cards for their benefit, while avoiding the potential pitfalls of essentially playing with other people’s money.   It’s just too easy to think of a credit card as just another resource to get what you want, and not a loan that you will pay interest on.

So how do you know if you should stay clear of credit cards?

Purchase Justification Part 1: You use an introductory interest rate to give yourself permission to buy something you don’t have the money for right now. You tell yourself that you’ll definitely pay it off before the 0% introductory rate expires.

Reality: If you don’t have the money right now, chances are you won’t have the money to pay for the credit card bill when it comes in the future either.

Purchase Justification Part 2: You use rewards programs to permit yourself to go over budget. Sure, you may be spending a bit more, but you’re earning rewards points or getting cash back!

Reality: Getting 2% cash back on purchases that put your weekly spending 10% over budget is a net LOSS for your personal finance balance sheet.

You Carry A Balance: If you carry any kind of a revolving balance, you are paying interest. You’ve essentially taken out a loan to purchase whatever you’ve purchased.

Reality: Think about this statement: Would you take out a loan to go out to eat, buy groceries, or go to the movies? Sounds silly, but that’s exactly what you’re doing when you use your credit card for these purchases, but don’t pay the balance in full.

I’m talking about this subject today for a very personal reason. Yes, my wife and I racked up $109,000 of credit card debt, and subsequently paid it all off. But that’s not the reason. The reason is because we were on the verge of falling back into the credit card trap.

Earlier this year, we signed up for a store credit card, as well as the Costco American Express credit card, which gives us various amounts of cash back on different types of purchases. After hearing about the success others have had in using credit cards to their advantage, we decided to throw ourselves in the ring and give it a try. After all, we had just paid off a huge amount of credit card debt and had learned our lesson, right? We even came up with a plan to make sure we kept that balance at zero.

Turns out we were completely wrong. We cannot handle using credit cards.

Over the last six months we’ve managed to accumulate a nontrivial balance on that American Express. Luckily, we recognized we were again heading down the wrong path before it got out of hand. We have stopped using and even carrying the card, and then created a plan to pay off the balance. It will only take a few more months, but it will extend past the end of the 0% introductory period. The good news is, according to my calculations, the interest we will pay will not exceed the cash back we have earned.

Most importantly we’ve learned for the second time that credit cards are not for us.

This is just a momentary relapse from all the lessons we learned over the 55 months it took us to dig out of our hell hole of debt. This hole is much shallower, and we’ll recover quickly with no real dollars out of our pocket. Some can handle credit cards, some cannot.   A person has to realize their limitations, and it is now etched forever into our brains that we cannot.

Let’s hope we don’t have to learn this lesson a third time.

Are you able to handle using credit cards to earn rewards, or have you come to the conclusion that you simply should never carry a credit card? Have you ever had to learn a financial lesson more than once?

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I Love You Like a Blogger Roundup – 9/19 http://www.enemyofdebt.com/i-love-you-like-a-blogger-roundup-919/ http://www.enemyofdebt.com/i-love-you-like-a-blogger-roundup-919/#comments Fri, 19 Sep 2014 12:13:09 +0000 http://www.enemyofdebt.com/?p=15230 Enemy of Debt - I Love You Like a Blogger Roundup – 9/19

This weekend the 2014 Financial Blogger Conference is taking place in New Orleans.  It’s the 4th year of the conference, and the first one Vonnie and I are not attending.  The conference has traditionally  been a fantastic shot of motivation to keep my blogger juices flowing.  I’m a bit down that I’m missing it this year, although I am grateful to follow along virtually by reading blog posts of my friends and fellow bloggers attending, as well as through the steady stream of Facebook updates.   Hope to be back at next year’s conference. In the meantime, it’s Friday, which means […]

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Enemy of Debt - I Love You Like a Blogger Roundup – 9/19

This weekend the 2014 Financial Blogger Conference is taking place in New Orleans.  It’s the 4th year of the conference, and the first one Vonnie and I are not attending.  The conference has traditionally  been a fantastic shot of motivation to keep my blogger juices flowing.  I’m a bit down that I’m missing it this year, although I am grateful to follow along virtually by reading blog posts of my friends and fellow bloggers attending, as well as through the steady stream of Facebook updates.   Hope to be back at next year’s conference.

In the meantime, it’s Friday, which means we have some fist pumping to do!

Posts That Make Me Fist Pump

Shameless Self Promotion

Other fist-pumping posts I wrote, or appeared in this week from around the personal finance blogosphere:

TeamEOD Was Recently Included In The Following Carnivals

Carnival of Money hosted by Carnival of Money
Carnival of MoneyPros hosted by Money Smart Guides
Yakezie Carnival hosted by The Investing Monk
Carnival of Financial Planning hosted by Financial Nerd

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The Best Mystery Shop EVER http://www.enemyofdebt.com/the-best-mystery-shop-ever/ http://www.enemyofdebt.com/the-best-mystery-shop-ever/#comments Mon, 15 Sep 2014 11:53:36 +0000 http://www.enemyofdebt.com/?p=15205 Enemy of Debt - The Best Mystery Shop EVER

I had heard about mystery shop jobs paying hundreds of dollars, but I had never seen one. Not until last week. I got into mystery shopping as a way to put a little extra breathing room into our budget while my wife and I fought our way through a debt management program paying off $109,000 of credit card debt. The average shop I pick up pays around $15. Nothing spectacular, but if I do three or four of them a month, the extra money is always appreciated. However, the low pay per job is one thing that prevents people from […]

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Enemy of Debt - The Best Mystery Shop EVER

mysteryshopper

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I had heard about mystery shop jobs paying hundreds of dollars, but I had never seen one. Not until last week.

I got into mystery shopping as a way to put a little extra breathing room into our budget while my wife and I fought our way through a debt management program paying off $109,000 of credit card debt. The average shop I pick up pays around $15. Nothing spectacular, but if I do three or four of them a month, the extra money is always appreciated. However, the low pay per job is one thing that prevents people from doing mystery shopping as it doesn’t seem worth their time. There is the occasional visit to a bank to get my credit score that pays $40, or the one time a trip to my local wing place that paid $55 (including a bonus for picking up a shop that had to be done quickly), but those are exceptions.

So when I saw the email that advertised a value of nearly $300 my eyes just about popped out of my head.

The shop was for an optical retailer, and the shopper that performed the job would receive $35 payment plus up to $250 reimbursement for ordering glasses. No optical exam was required, only a optical prescription that was less than a year old. I shook my head at the freak coincidence of the timing of the shop. My optical insurance pays for either contacts or glasses each calendar year. I had used our 2014 insurance coverage for contacts, and was just thinking how nice it would be to give the eyes a rest and wear glasses sometimes when staring at the computer screen.

I quickly applied for the shop, and received confirmation of assignment the next day.

Once assigned the shop, I could see additional details. I was pleasantly surprised to find that I was to play the part of a budget conscious shopper in order to prompt the retail representative to give me options as to how to get the best glasses possible for the least amount of money.

The shop was perfect for me.

I had not ever been to this particular optical retailer before, but it seemed a little more upscale than where my family usually goes to take care of our optical needs. I spent a little over half an hour in the care of one of the retail assistants trying on frames and discussing options. When it was all said and done, I went a little over the total $285 shop payment. That will come out of my pocket, but I’m getting a pair of glasses of exceptional quality for close to nothing.

I spent thirty minutes preparing for the shop by reading the instructions carefully several times. I spent another 35 minutes in the store, and 30 minutes entering my report online. In total, that’s just over an hour and a half of my time for $285 of total value.

It was by far the largest value mystery shop I’ve ever done.

Most mystery shops don’t pay much. But sometimes a shop comes along that not only pays more, but also fulfils a need in your life. Maybe it’s a meal at our favorite pizza place, getting my credit report for free, or a visit to an optical retailer. It’s those kinds of shops that make me keep checking those emails, and proudly telling my kids that I’ll be back later as I walk out the door.

Dad’s got a mystery shop to do.

Do you do mystery shopping? What’s your most memorable, or most valuable shop?

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I Love you Like A Blogger Roundup – 9/12 http://www.enemyofdebt.com/i-love-you-like-a-blogger-roundup-912/ http://www.enemyofdebt.com/i-love-you-like-a-blogger-roundup-912/#comments Fri, 12 Sep 2014 12:31:40 +0000 http://www.enemyofdebt.com/?p=15201 Enemy of Debt - I Love you Like A Blogger Roundup – 9/12

We’ve had some house guests this week, my parents on Tuesday night, and some friends of ours from the Minneapolis/St. Paul area Wednesday and Thursday night.  Since my city, Rochester, MN, is the home of the Mayo Clinic we offer up our home as a place to stay when friends and family are referred there for tests.  While the circumstances for seeing people isn’t always the best, we’re always happy to spend time with loved ones, and take a bit of stress off of their need to come to town. I’ve been enjoying the heck out of the cooler temps […]

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Enemy of Debt - I Love you Like A Blogger Roundup – 9/12

We’ve had some house guests this week, my parents on Tuesday night, and some friends of ours from the Minneapolis/St. Paul area Wednesday and Thursday night.  Since my city, Rochester, MN, is the home of the Mayo Clinic we offer up our home as a place to stay when friends and family are referred there for tests.  While the circumstances for seeing people isn’t always the best, we’re always happy to spend time with loved ones, and take a bit of stress off of their need to come to town.

I’ve been enjoying the heck out of the cooler temps this week, great running weather.  My weekend long runs are becoming a bit intimidating…..tomorrow I’ll be heading out on a 19 mile run which will take me right around 3 hours.  Only three weeks until Marathon Day!!!

Speaking of marathon day, my runner’s guide came in the mail this week, which had me fist pumping hard!  What’s got your fist in the air this week??

Posts That Make Me Fist Pump

Shameless Self Promotion

Other fist-pumping posts I wrote, or appeared in this week from around the personal finance blogosphere:

TeamEOD Was Recently Included In The Following Carnivals

Carnival of Retirement hosted by The Investing Monk
Carnival of Financial Camaraderie hosted by Broke Girl Rich
Carnival of Money hosted by Carnival of Money
Yakezie Carnival hosted by Mom Makes Cents

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Playing with fire: is life insurance a main course or luxury dessert for you? http://www.enemyofdebt.com/playing-with-fire-is-life-insurance-a-main-course-or-luxury-dessert-for-you/ http://www.enemyofdebt.com/playing-with-fire-is-life-insurance-a-main-course-or-luxury-dessert-for-you/#comments Tue, 09 Sep 2014 09:04:56 +0000 http://www.enemyofdebt.com/?p=15193 Enemy of Debt - Playing with fire: is life insurance a main course or luxury dessert for you?

Do you have life insurance? I do. I have so much life insurance, I joke that if something were to happen to me, John will be a very wealthy man. It is a bad joke, I know. John’s been telling me that since the very first time I mentioned it. It may be a bad joke, but it is the truth. My life is insured for close to $800,000 in two different policies; one of these is part of my pension plan. This is quite a bit less than the amount for which David Beckham’s legs were (are?) insured but […]

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Enemy of Debt - Playing with fire: is life insurance a main course or luxury dessert for you?

life insurance

Do you have life insurance?

I do. I have so much life insurance, I joke that if something were to happen to me, John will be a very wealthy man.

It is a bad joke, I know. John’s been telling me that since the very first time I mentioned it.

It may be a bad joke, but it is the truth. My life is insured for close to $800,000 in two different policies; one of these is part of my pension plan.

This is quite a bit less than the amount for which David Beckham’s legs were (are?) insured but still it’s a decent amount. The way I see it, I’d rather John concentrates on looking after our son if I die in an accident, than worry about money.

And you know what? When we were in $160,000 worth of consumer debt and I was trimming our budget like you trim your roses for the winter – almost to the root – my life insurance was one item I never felt tempted to cut out.

Because, if my labour (my pay-check) was essential for the financial survival of the family I felt it is absolutely vital to ensure my family would be okay if something were to happen to me.

Similarly, we worked out the level of insurance I carry to take into account that we have a young child, that I’m the main breadwinner and that we have some liabilities.

For us, having life insurance was, and still is, as important as having a nutritious, healthy meal – it was absolutely central to our financial survival in case of unexpected and severe crisis.

A recent survey conducted on behalf of State Farm found that 34 percent of Americans think like us and when asked to compare life insurance to parts of a family meal, said it was the “main course” in their financial plan.

Almost one in five, 18 percent, likened it to a nice-to-have dessert that they cannot afford; 16 percent thought of it as an appetizer for when you’re starting out; and 8 percent considered it a good-for-me-but-I’ll-pass vegetable side dish.

These results are interesting in their own right. What they made me think about, however, is that they are even more interesting if seen not as a snapshot of a situation but as a dynamic way to see life insurance.

After all, whether you have life insurance – and how much – depends on your personal circumstances. Hence, any decision in this respect depends on asking – and finding the answers to – the following five questions, I believe.

Q1: Do you have dependents?

Q2: Are you the main breadwinner?

Q3: How much are you worth?

Q4: What are your liabilities?

Q5: What is your pension plan?

 

Whether life insurance is a main meal for you, or a tempting dessert you skip on because you can’t afford it depends on your answers.

 

Life insurance as a main course

I believe, that life insurance is – and should be – a main meal in the context of your financial hedging if you:

  • Have dependents. These can be children but equally it can be your elderly parents or you spouse. If you are likely to leave behind someone who will have a problem looking after them-selves without your income you need to carry life insurance.
  • Are the main breadwinner. If you are the main breadwinner you should carry life insurance and a generous one at that. See the point about dependents above.
  • Have net-worth that is low to average. This means that if something happens to you your dependents won’t be able to replace your income.
  • Have liabilities. This is an important point in the decision-making process regarding life insurance and its size. When I was deciding how much insurance to carry I factored in the calculation the debt and the mortgage. After all, you really don’t want your loved ones to have to pay your debt and to find them-selves homeless.
  • Have a pension plan that doesn’t include life insurance and has no provision for pension to dependents. Strange as this may sound today, I have a pension plan that will pay off a generous lump sum to John and my son in the case of my death while employed and will pay pension to my son while he is in full time education. Lucky, I know.

 

Life insurance as a side dish

 

You can see life insurance as a bit of ‘security on the side’ you can take or leave under the following conditions:

  • When you have dependents but are not the main breadwinner, have considerable net-worth and low liabilities and have managed to build (are building) good retirement income (passive income)
  • Another set of conditions under which life insurance can be seen as optional is if you have no dependents and are not the main breadwinner. It matters little how much is your net-worth, whether you have liabilities and what is your pension plan.

 

Life insurance as an appetizer

 

Life insurance can be an appetizer, or worth it when you are starting out, only if you have dependents (children). Otherwise, I believe, it is not very important.

 

Life insurance as a luxury dessert

 

I don’t believe that life insurance is ever a luxury dessert.

 

Finally…

When paying off debt it is tempting to see life insurance as a side dish that you can skip on or as a luxury dessert that you cannot afford.

This is a mistake. When coping with debt (and dealing with debt) life insurance can provide an island of stability in an otherwise turbulent financial time.

 

How do you view life insurance?

 

Disclosure: This blog post was written as part of a sponsored program for State Farm to raise awareness about the importance of life insurance. All views expressed are entirely my own, and were not influenced or directed by State Farm. You can learn more about this blogger program and life insurance at GoodNeighbors.com, PlantingMoneySeeds.com, and by following #StartLiving on Twitter.

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Are You As Financially Savvy As A 7th Grader? http://www.enemyofdebt.com/are-you-as-financially-savvy-than-a-7th-grader/ http://www.enemyofdebt.com/are-you-as-financially-savvy-than-a-7th-grader/#comments Mon, 08 Sep 2014 11:18:06 +0000 http://www.enemyofdebt.com/?p=15182 Enemy of Debt - Are You As Financially Savvy As A 7th Grader?

My daughter and I always have a good time together. We have similar personalities, interests and senses of humor. She was aware of our situation as we fought to pay off over $109,000 of credit card debt, and even shared her perspective on our journey in a guest post here on Enemy of Debt. She apparently also paid close attention to how our view on money and what is important in life changed over the last few years have changed. I found this out through a conversation we had last weekend. We had gone to the mall to buy a […]

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Enemy of Debt - Are You As Financially Savvy As A 7th Grader?

Student

Image courtesy of stockimages at FreeDigitalPhotos.net

My daughter and I always have a good time together. We have similar personalities, interests and senses of humor. She was aware of our situation as we fought to pay off over $109,000 of credit card debt, and even shared her perspective on our journey in a guest post here on Enemy of Debt. She apparently also paid close attention to how our view on money and what is important in life changed over the last few years have changed.

I found this out through a conversation we had last weekend.

We had gone to the mall to buy a birthday present for her friend. She knew exactly what she wanted to get her friend as we headed directly to a store where she had seen canvas signs with inspirational phrases she thought would be perfect for her friend. She picked out the one she liked the best, as well as some hair ribbons. Exiting the store, she was excited about what she had picked out. She made a comment regarding how it didn’t matter that her gift wasn’t very expensive, because it was a very personal gift she picked out for her friend without even asking her what she wanted for her birthday. She was glad she wasn’t, “That person,” that just gave a gift card.

I smiled, as I remember using this exact reasoning with my wife when we were shopping for holiday gifts last year.

As we were driving out of the mall parking lot, I pointed at a brand new, bright yellow Camaro in the car dealership parking lot across the street and said, “I like that car.” Without looking up from her phone she dropped this on me:

“I don’t understand why people make a big deal about cars. I’m not the kind of person that would spend a whole bunch of money on a car because all it does it get me to places I want to go.”

Not wanting to miss an opportunity to emphasize a couple of important financial concepts, I causally made a couple of points:

  • I commended her for her view point on vehicles. I had her remember the excitement our family had when we purchased a new van a few months ago. Then I asked her if she was still excited about our van. She shook her head and said, “It’s still a nice van, but no, not really.” I told her to remember that the thrill of a new vehicle wears off very quickly.
  • I stated that I would much rather spend my money on great experiences such as family vacations, or running marathons which create memories that will last forever. Memories last a lifetime, while things like a new car will eventually wear out. I went on to tell her that I have great memories from all three marathon’s I’ve run. Testing me a little, she asked me to tell her some of my memories from my very first marathon. Which, of course, I was able to do easily.

Driving the rest of the way home in mostly silence, I summarized to myself the different life lessons my daughter and I talked about:

  • Personalized gifts mean more than expensive gifts
  • Expensive cars are a waste of money because the thrill of a new car is gone quickly
  • Life experiences and memories are better than material things

Those are some fairly advanced, yet important topics to be discussing with my seventh grade daughter. I hope they sink in.

How about you, EOD Nation, have YOU learned these lessons? Are you as financially savvy as a 7th grader?

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I Love You Like a Blogger Roundup – 9/5 http://www.enemyofdebt.com/i-love-you-like-a-blogger-roundup-95/ http://www.enemyofdebt.com/i-love-you-like-a-blogger-roundup-95/#comments Fri, 05 Sep 2014 12:20:52 +0000 http://www.enemyofdebt.com/?p=15177 Enemy of Debt - I Love You Like a Blogger Roundup – 9/5

Yesterday’s high in Rochester, MN was close to 90.  Today it will struggle to get our of the 60’s.  Guess what peoples,  Fall is officially on it’s way.  While I LOVE summer, Fall’s cooler temperatures and lowered humidity makes for great running weather.  There’s also the start of the NFL season (first game kicked off last night!) to soften the transition away from summer. Along with those cooler temperatures comes the turning off of the AC, the opening of windows, and MUCH lower utility bills.   My electric bill literally gets cut in half for the next couple of months, and […]

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Enemy of Debt - I Love You Like a Blogger Roundup – 9/5

Yesterday’s high in Rochester, MN was close to 90.  Today it will struggle to get our of the 60’s.  Guess what peoples,  Fall is officially on it’s way.  While I LOVE summer, Fall’s cooler temperatures and lowered humidity makes for great running weather.  There’s also the start of the NFL season (first game kicked off last night!) to soften the transition away from summer.

Along with those cooler temperatures comes the turning off of the AC, the opening of windows, and MUCH lower utility bills.   My electric bill literally gets cut in half for the next couple of months, and that makes me wanna FIST PUMP!

Posts That Make Me Fist Pump

Shameless Self Promotion

Other fist-pumping posts I wrote, or appeared in this week from around the personal finance blogosphere:

TeamEOD Was Recently Included In The Following Carnivals

Finance Carnival For Young Adults hosted by The Investing Monk
Carnival of Financial Independence hosted by The Smaller Dollar
Carnival of Money hosted by Carnival of Money
Yakezie Carnival hosted by Wealth Gospel

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