Posts Tagged ‘Insurance’
A couple weeks ago I wrote about the strange place I found inspiration for my 2013 goals. This week, I’d like to address New Year’s Resolutions head-on. Every year millions of people write out a fresh list of goals in the hopes of making the next twelve months better than the previous dozen. We creative people are no exception: in our world, it’s often the well-disciplined artist who ends up on the road to loftier goals, while the dreamer without clear, concise milestones spends another year chasing the same first-tier plans (and never can figure out why he doesn’t achieve anything….). You know the ones; they’re the artists with grand ideas, fantastic plans, and nothing to show for it except a series of excuses.
One mistake that even big businesspeople make, is that they set professional goals, but forget about the fuel to get them there. It might not be the most glamorous activity, but remember your financial goals; don’t just focus on your art. By making sure that your financial picture is healthy, you’re bound to have the fuel ready to have a wonderful 2013 in your craft. By placing well-executed goals, you’ll get where you want to go faster, and with less bumps along the road.
Some Financial Goals to Act On
Emergency Fund – If you don’t have a cash reserve, now’s the time to start one. Anything can happen…and probably will….in 2013, so you’ll want the protection to know that when bad news occurs, you’ve got the money in the bank to easily get through it.
What’s a good reserve? Generally, I recommend having at least three months expenses in a safe place away from market fluctuation (like a bank account). (more…)
4 Year End Financial Moves To End 2012 With a Bang!
I can’t believe it’s almost that time of year again! We’re saying goodbye to 2012….and it seems like we just said goodbye to 2011. This can be a crazy time for creatives. We’re busy building, sculpting, performing. But don’t forget that the end of the year is also a time to close the books on your financial life so you can begin 2013 fresh. Here are some of my favorite year end moves:
Paperwork & Technology Moves
This is a great time to shred unnecessary papers from the year and delete unnecessary emails. Set up your systems to ensure you roll easily into 2013.
- If you haven’t yet, create a series of email folders to funnel important financial documents. I also like the free financial tool Dropbox to store important papers in “the cloud” so they’re available from any computer.
- Adjust your budget. Automate budget tracking if you have a smart phone or computer using programs such as Mint. Last week I went over my grocery budget and before I’d unloaded the groceries into my car, Mint had already emailed me a warning.
- Create times to plan. Take out your 2013 calendar (or purchase one!) and lay out non-negotiable times to review your overall financial picture. You might want a quick once-a-week to review your budget, pay bills and review any new investment correspondence. More important is a twice-yearly “where am I” session. (more…)
I know Halloween was last week, but let’s keep the fun alive with some financial horror stories. Didn’t you love horror stories as a kid? I liked them…until I tried to sleep. Then, more often then not, I spent the night staring at the ceiling, sure that at any minute some disconfigured arm would grab me from under the bed.
The bad news is that we all have friends who have real life financial horror stories. Their money problems make it difficult to sleep. Maybe you have those issues. There’s good news: many of these horrible stories we can fix simply by turning on the lights: if we know they’re out there, we can avoid them or find ways for them to vanish:
Horrible Story #1) There once was a man who paid an annual fee on his credit card! There’s no reason to pay annual fees for cards unless you’re a high-powered user. Too many cards are available with no fees that still give you a low interest rate and reward points. Only pay fees if you find a card which you are certain will be justified by the rewards that are unavailable from a non-fee card.
Tip: Use online comparison sites to determine which card best meets your needs without paying a fee. (more…)
For most creatives, we’re comfortable working without a net. Many of us have gone months or maybe even years without a stable income. Some are amazingly agile at finding just the right resource at the perfect time. Like a trapeze artist on the high wire, we find a way to make it work.
That’s why the concept of insurance is so foreign to most of us. When you’re a high wire artist, your first thought probably is, “Why waste the money?”
Unfortunately, just because you’re comfortable on the high-financial-wire, those around you may not be. Today’s column is too short to go over ALL of the things you need to know about insurance, but we can cover the basics that most people should know:
Car Insurance: You must have it if you’re driving. If rates are a problem, look online. Many times companies such as Amica, Geico or Progressive will beat traditional insurance firms while keeping the quality of your coverage high.
Tip: Ask for a full list of available discounts. You may qualify for multi-policy, association and safe driver discounts, among others. A friend’s child has good grades in school, so Progressive awarded him a discount when he began driving. (more…)
We promised more basics on insurance…so here it is!
There is so much written about life insurance these days: policies are bad, policies are good, “you should never” this and “you should always” that.
For most of us we end an insurance discussion with this thought: I don’t like it and I’m not going to think about it.
That’s exactly the wrong answer.
There are some truths about life insurance you should know before dismissing it:
- If you have a family, insurance will help them with your final expenses (burial or cremation, cost of a rock & roll band, etc.)
- If you have a home, insurance can pay the mortgage so your family can take their time waiting for the right buyer instead settling for a quick one who’s trying to underpay.
- If you are interested in making sure your family, artistic or charitable institutions receive a legacy from you (and you don’t yet have money to provide it), insurance can be a cost-effective way of leaving money to others.
Because of these three scenarios, it’s better to understand how insurance works first before dismissing it. (more…)
A friend recently said, “I don’t know how you keep all of this straight…what the Dow Jones is doing, what’s a good rate on a credit card, how a will works, the right type of life insurance. Ouch! It makes my head hurt.”
You may feel the same way about your financial picture. Between your craft, family, friends and obligations, it seems like a huge hassle to remember everything you need to know.
But there’s good news: it’s not that difficult.
I imagine you might be thinking, “Ha! Easy for you to say. You do this every day.”
I understand that it’s a whole new world for many of our readers, but I’m serious: it’s not that difficult.
Sure, you might not understand every point about finalizing a mortgage or how to tell a good mutual fund from a bad one, but like any task, if you organize it correctly, it’s easy to see what you really need to know now and what can wait for later. (more…)
The only important insurance…is the one you’re about to use.
Insurance is an intensely personal issue. People run into trouble because instead of fitting an insurance type to their specific need, they settle for the same rules of thumb used by others.
If there’s one group that can’t afford a one-size-fits-all approach, it’s artists. We have such unique needs that the wrong insurance will cost you time, money and patience (not necessarily in that order).
You don’t have time for something to go wrong, and you may not have the money to fix it later.
How to Shop for Insurances
The key to a successful insurance plan is to begin with your goal. For most of us, there is only one reason to own any insurance: we may need money when disaster strikes. This cash provides a cushion so we’re able to financially emerge from whatever pit we’ve fallen into this particular time. (more…)
I’m single and have no real possessions. Do I need a will?
Although you may not need a will, you should be thinking about your estate plan. Here are some areas you’ll want to consider.
- Investments and cash accounts. Add a TOD (sometimes called POD….”transfer/payable on death”) to your checking, money market and investment accounts. This gives someone your money when you pass away without it being hung up in court. IRA plans and 401k’s allow you to name specific beneficiaries on the account. Check these during open enrollment times to ensure you’ve picked the right people.
- Health care patient advocate. Let’s pretend you have an accident and can’t talk to the doctors. Who will you allow to speak with medical professionals on your behalf? In most states, this person is called your “patient advocate.” Although it’s possible for a court to assign someone later, it’s a better idea to have this prepared in advance by an attorney.
- Workplace life insurance. Even if you don’t have insurance outside of work, most companies give employees free insurance. Pick beneficiaries so this “free money” doesn’t go to waste.
While I’d say a will might be overkill, an estate plan covers all of these areas.
I’m hoping you have some advice on lowering the costs of my insurance. I feel like my insurance bills are killing me!
When I’m working with students in our Artist’s Prosperity Boot Camp – one of my favorite exercises is going through their individual expenses, finding all the places they can save money. Insurance is an expense that many of us assume we can’t change. But in fact, there are two ways to trim insurance costs.
First, shop around. An insurance agent recently mentioned that one auto coverage firm he represents prefers drivers between ages 40 and 60. He assured me that other companies act similarly. Therefore, when your birthday arrives, an insurance company that used to charge high rates may suddenly become the least expensive option available. When applying, ask about discounts. You may belong to an organization that has negotiated lower rates for members. There may also be discounts available based on your driving record, driving distance, auto type, or even school grades.
Second, raise your deductibles. Be careful and thoroughly read my explanation of this tactic before implementing my advice. A deductible is the amount you’ll pay if you file a claim. By raising the deductible, you’re accepting more risk before the insurance company is forced to pay. This lowers your rate. If you don’t have an emergency reserve, don’t raise your deductible! If an accident occurs and you have no resources, you’ll find yourself in debt. Once your reserve is established, you’ll enjoy lower insurance rates and have a cushion to protect you if disaster strikes.
Do I need disability insurance?
This is going to be the subject of a longer blog post in the future, but in short, yes, you need disability insurance. As a community, we’re very dependent on our ability to perform, and although some great artists are disabled, the chance your career might suffer after a disability is also great.
In my opinion, people avoid disability coverage for two reasons:
- It’s too expensive.
- It’s not going to happen to me.
Let’s discuss both of these briefly, because the first is the reason you want coverage and the second is misinformation. Disability coverage is expensive because insurance companies price coverage based on usage. If a policy is seldom used, they’ll make a huge profit while charging little for it. Policies that are often used require huge premium payments for the company to pay out benefits and still turn a profit. Disability costs are incredibly high precisely because the chance you’ll be disabled at some point is high.
I recommend thinking about what expenses you’d need to cover if you’re disabled. Begin shopping for policies to cover these costs.