Do I Need Disability Insurance?

by Miata on March 30th, 2015

Reader Question: Do I Need Disability Insurance?

Autumn writes: Hi Miata, Our financial advisor is pressuring me to buy disability insurance. I have some through my day job already. Isn’t that enough?

Autumn, you’re right to question your financial advisor… not because disability insurance is unnecessary (I’ll tackle that in a moment), but because you shouldn’t ever feel pressured by your advisors. While advisors may disagree with you about a course of action, their job is to give you the data you need to make good decisions.Disability Insurance

In this case, I do believe that the data supports your advisor’s assessment.

Here’s the hard fact: according to Cornell University, an astonishing twelve percent of Americans reported a disability in 2012. Twelve percent! People wonder why disability costs are so high…it’s because insurance companies think chances are high it’ll happen to you.

For someone like you, working in a day job and then presumably working on your craft as well, having disability coverage is even more important. Why? You’re relying on that day job to support your work. Without adequate income coming in, I’ve found many of my readers would be unable to continue pursuing the art they love.

“But I Have A Policy At Work”

Disability insurance is a complex topic. Most people’s work insurance policy simply isn’t enough. There are a few reasons for this:

1) Workplace insurers are trying to cover the bare minimum, not what you need. You should look through the fine print of your work policy. You’ll probably be surprised to find that there are often caps to the amount of support they’ll provide.2) The amounts of money they’ll offer, even without fine print provisions, are often much lower than what you’ll be able to live on. Start with your budget. Can you live on the amount of your disability income policy? If not, you’ll want more.
3) Workplace policies are often offered pre-tax (this lets the business write off the premium payments). That means you’ll have to take taxes out of the money you receive. For many people, that’s 15 – 25% of the benefit you receive going back to the government. As you can see, you’ll have less than you think.

Costs and Benefits

I’ll warn you…when you hunt for disability insurance, you’ll probably be surprised to find that it’s expensive. Many people decide they don’t want coverage because they “can’t afford it.” Sadly, this is exactly the wrong opinion. Why?

Insurance companies are great at making a profit. Sure, it’s a competitive business, so they have to keep rates in line with others, but they know how to make sure they’ll be able to keep offering insurance tomorrow. They’ve done the math on you and price disability insurance expensively because they think it’ll happen to you. In general, you want to buy insurances that are expensive and avoid ones that are cheap. Pet insurance? Pass. Accidental death and dismemberment? Do you really need double the money if you lose a finger? P

ass (just buy better disability coverage…). By focusing on probabilities of something happening, you’ll only have a few insurances… and they’ll probably be expensive, but worth it.

Ask your insurance company about own occupation protection. I like this disability benefit because it ensures the policy will pay out if you can’t do your job… not just if you can’t work. Imagine that you’re hurt in a fire and can no longer complete your skilled job, but you CAN still get a job in fast food or elsewhere. An insurance company can deny a claim because you’re able to work. With own occupation protection, you’ll receive a benefit if you can no longer complete your stated job.

I also like policies that offer inflation adjustments. The price of bread goes up every year. While hopefully you don’t have a problem for a long time, if you don’t have a policy that offers an increasing benefit, you’ll have to buy more insurance in the future. My goal? I prefer to deal with this stuff once and forget about it. More time to focus on the things you really care about!

Overall Advice

So, here’s what I’d do, Autumn. I’d review your budget and workplace insurance coverage to determine just how much of a disability you’d be able to cover. If there’s an additional need, I’d then hunt for a supplemental policy to cover the rest.

Thanks for your question!

Creatively Controlling Your Money Habit

by Miata on February 24th, 2015

A friend of mine likes to pay for lunch every time we meet. Surprisingly, she also always picks the most expensive places. I love to see her and there’s no reason for her to pay…but she always insists on paying anyway.

Lately, I’ve seen some disconcerting problems. Three weeks ago I could tell she was anxious.

Money Bubble

My friend, we’ll call her Rachel, shared that her husband Mike is now seeing a psychiatrist. “He always feels like he’s about to have a heart attack. After asking three doctors for opinions, he’s starting to realize that it’s in his head.”

“What have they found out?” I asked, worried.

Rachel said, taking a bite from her caprese salad, “They think it’s stress.”

When we parted, Rachel again paid for lunch over my continued objections, and then wrote me a check for some earrings from a mutual friend’s jewelry party.

I found out two days later the check bounced. Read the rest of this entry »

Is Fear Keeping You From Financial Success?

by Miata on February 2nd, 2015

Is Fear Keeping You From Financial Success?

I’d like to share a secret about one trait many of us share. We have a fear of the unknown.

When I was a child, I was afraid of the dark. I’d check under my bed before turning out the light (which is funny now, because I never stopped to think that if there WERE bad things under there who cared if it was dark or not?). I’d open my closet door and thoroughly search. Then, even after all of that, I’d still pull the covers tightly around my head some nights, sure that the bogeyman had figured out how to sneak in through a heating vent and come to end my young life. PiggyBankUnderCovers

Luckily, that never happened.

You and I know, it will never happen.

People share this same fear when it comes to our finances. We fear walking into a new bank, opening accounts online, having money automatically deposited, sheltering money in an IRA, buying insurance we might not need, setting up estate documents that might be wrong.

We fear lots of things about money.

So how do we move past fear? It isn’t easy, I know. But if there’s anything that kills fear in your financial plan, it’s momentum. You have to get a running start.

Read the rest of this entry »

5 Creative Ways To Achieve Your Goals In 2015

by Miata on January 19th, 2015

I’m sure by now you’ve heard the acronym SMART when referring to goals. That means that your goals should be:

2015 LeapSpecific

Example: Instead of, I’d love to lose some weight this year, a SMART goal would be: I’ll lose 15 pounds by July 1st.

My Problem With SMART Goals

Really, I don’t have so much of a problem with them….as much as I think simply “SMARTing” your goals doesn’t necessarily fit our community. Don’t SMART goals sound—well, there’s no nice way to say this—boring? And as creatives, we want more than that from our goals, don’t we?

Here are five ways to create better goals in 2015 that’ll motivate you to get up and start moving!

Read the rest of this entry »

2014 Year End Tax Planning: Good Holiday Fun

by Miata on December 22nd, 2014

2014 Year End Tax Planning: Good Holiday Fun
2014 Sunset

Ready for some good times?

I love the holidays. Lights. Friends gathering. Tax planning.

I know what you’re thinking: one of those three doesn’t belong… but tax planning CAN be a whole festival of fun, even for creative people, because it can save you lots (and I mean lots) of money. Just like holiday shopping, though, there’s a clear deadline to tax planning. If you don’t want to miss out on the best tax “deals” you have to move on many of these tasks by December 31st – before the sun sets on 2014! (Okay so maybe I wanted a reason to use this beautiful photo…)

Like anything involving the government or numbers, many of my clients freeze whenever we begin talking about taxes. The first step in this game is to relax! Tax planning, believe it or not, can be easy to understand. Plus, the lessons you’ll learn will last your lifetime. As the government makes changes I’ve found I only have to adjust my thinking slightly.

Here are five tips to help you save some money on taxes: Read the rest of this entry »

Gift Ideas to Teach Finance and Economics!

by Miata on December 8th, 2014

Gift Ideas to Teach Finance and Economics!

Money BoxAs a creative person, don’t you find many holiday gatherings are a little less….creative than they could be? According to the National Retail Federation, more people are giving gift cards this year as presents than ever before. Gift cards? Have we completely run out of entertaining, interesting ideas for our friends?

A friend of mine suggested board games that teach people about money.

What a fantastic idea!

It turns out that each year over a thousand new board game titles are released. If you walked the aisles of Walmart or Target, you’d never know there were many more options than Monopoly, Cranium and Risk.

Most games designed to “teach” people aren’t actually fun. Instead, look for games that help players build a thirst about money, economics or business because they’re having a blast enjoying the topics. Read the rest of this entry »

Looking to Clean Up Your Finances?

by Miata on November 18th, 2014

Looking to Clean Up Your Finances? Copy Successful Health Programs


A brilliant artist friend of mine recently wanted to lose weight. He picked up Tim Ferriss’ book 4 Hour Body and within a few months lost 20 pounds. He and I discussed how he finally was able to take off weight he’d talked about losing for a long time. His answers enveloped many of the themes I’ve covered when I work with people on effective money management. Let’s get creative today and see what lessons about money we can learn from health and weight loss programs!

It Starts With a Spark

One point he made that grabbed me was when he said, “I just one day decided I had to do things differently. It was like I flipped a switch. I’d had enough.” That’s true for better money habits, too. Every person I’ve met who decided that today was the day to get their financial house in order didn’t “take it slowly.” Sure, maybe they didn’t try to change ALL of their financial habits in a single day, but with one decision—to be different—they began either cleaning up their credit card debt, building savings, tracking their expenses….whatever.

I can usually tell when someone comes to me whether they’re going to be successful or not based on their attitude. If they simply say, “I’d like to change,” they rarely do. However, when someone can point out all of the reasons they NEED to handle money differently, I know they’re in business.

Read the rest of this entry »

Is a Second “Side Job” the Right Answer?

by Miata on October 27th, 2014


Is a Second “Side” Job the Right Answer?

If you’ve ever thought about earning more money, you might have turned immediately to the idea of taking on a second job. But as artists we know that a side job isn’t JUST about more cash in your pocket… It is important to seriously weigh the consequences on your craft and any other income streams you already have.

The Money Crunch

Everyone’s had a time in their life when there’s more month than paycheck. Maybe for you that’s right now. You see ads all over the place for “help wanted” or “make money online.” It seems simple: you’ll work a little harder. “Put your nose to the grindstone” as my mom says. But should you start searching?

The biggest problem with multiple side jobs is that they sap your number one commodity: energy. They also drain away your second biggest asset: time. You might meet your bills, but you also might lose your motivation to work toward your bigger dreams.

Before you take on an additional side job, ask yourself some questions:

Read the rest of this entry »

Buying a House? Now Might Be The Time

by Miata on October 13th, 2014

I was reading a Yahoo! Finance story this morning about housing prices and saw that for the first time in a long time, prices might be falling. Are you looking for a house? Now might be the perfect time.


What’s happening with the housing market?

Let’s talk first about the market. You definitely don’t want to buy a home when the market is hot….and the trend is in a seller’s favor. But if prices are dipping and the number of people buying is light, you’re more likely to find a steal. However, real estate markets are very much regional, not national, like the stock market. That means that while prices might be tanking in Las Vegas, they could be rising in Miami. It’s important to check with pros in your area to see just how weak your local market is before wandering off into the home buying scene.

A weak market means more desperate sellers, so do brush up on your negotiation skills. A few thoughts on this front:

  • Remember that the seller isn’t your friend. It’s up to them to put their best foot forward and make their best deal.
  • You aren’t trying to “put the screws” to someone when you negotiate. You’re only trying to adequately protect your interest, which means paying as little as possible.
  • Don’t expect your real estate agent to negotiate on your behalf. Studies have also shown that real estate agents prefer not to negotiate (mostly because when you consider how they make money….on the sale price….there’s no real incentive for them to bargain).

Okay, the market might be right, but should I buy?

Read the rest of this entry »

The Case for Cutting Cable

by Miata on September 22nd, 2014

Let’s Cut The Cord But Keep Your Entertainment RetroTV

I’m inspired by quality television. I’m against cutting out dramas or a good comedy from my routine, but I absolutely love saving money and getting the same value.

So, let’s start with $100 per month that you saved on cable and see how much we’ll have to spend of it to replace your favorite shows.

Netflix: For a fraction of the cost of your cable bill, you can stream many great (and some original) content from Netflix. Double the fee and you have access to nearly every DVD on earth. Cost? from $8. ($92 left)

Hulu: I get annoyed by Hulu premium plans because they keep commercials AND make you pay. But, then I think….”I was watching commercials when I had cable, and I was paying a ton!” Great point. Most top shows from all the major networks and more. Cost? $8. ($84 left)

Amazon Prime: The newest kid on the block, Amazon Prime, offers TONS of shows from many different sources, including most of the networks. That’s not all: you also get a music streaming service and access to many book-sharing programs PLUS (of course) free two day shipping on many products. Cost? $100 per year or $8.33 per month. ($75.67 left)

Sports: Missing your favorite sport? Sign up to watch them online. Major League Baseball allows people to watch every out-of-market game for $130 per year. Most major sports have similar packages. Cost? $10.83/mo. ($64.84 left)

Using four sources we just cut out the cable subscription and saved around 2/3 of the fee! Plus, you don’t have to wait….watch shows whenever you want!

Read the rest of this entry »