Financially Free Series: Create a Spending Plan
Saving for the future without protecting what you have now is like wearing your bra over your blouse! Completely out of order! This is why you must create a spending plan. You might have a nice savings and some great assets, but if a tornado came through or if you hit a brand new Lexus and a life was lost, you could lose everything you have worked for. So, once you complete Step 1 and get organized let's make sure all your bases are protected.
Create a Spending Plan
This is part 2 of a 5 part series. For this post, we will be talking about step 2, determining if you are protected financially. (Complete Step 1 here)
Start by doing a review of your property and casualty insurance coverage (auto, homeowners, umbrella, boat, etc.). Most people have minimum coverage on their auto insurance and high coverage on their homes, but most accidents and lawsuits happen on the roads. This is where an umbrella policy comes into use because it will add extra coverage over all of your policies. So ask yourself, are your current coverages going to protect everything you have if you were sued? Do you have or need an umbrella policy?
Next, look at your health and disability coverages. Many people don't think that they need disability insurance, but statistics show that 1 out of 4 people will become disabled for some period of time before they retire... so it is definitely worth the money!
Last, make sure your Human Life Value is sufficient on your life insurance policies (do not get this confused with doing a Life Needs Analysis—this way is not an accurate perspective and can totally lead you to the wrong amount). To determine your Human Life Value keep in mind that your death benefit should equal at least three years of your annual income or we can go back into your Living Balance Sheet and get the most accurate calculation.
Determining if your protection is adequate can all be done by a phone call to your insurance agent and scheduling an Insurance Review (if they offer this service) or by using The Living Balance Sheet and their tools. Please feel free to contact me if you would like to setup your personal website or if you have any questions regarding these first two steps.
Teddy Bears And High Heels or email me at [email protected]. Schedule your complementary consultation today (consultations can be held face to face or over the phone if outside of Houston/Katy)
What are you doing to make sure you aren't spending too much money?