More Really Good Financial Advice - Protect. Your. Paycheck.



Financial Plan Pyramid

If you rely on your paycheck to make the rent, pay the mortgage, buy food, pay your bills, to live, then you definitely need to seriously consider reading my blog today (not that you shouldn't everyday, right?)...

Today we're going to talk not only about finances, but the importance of a financial plan. I know, I know, BORING! But no, seriously, everyone (even me) knows that financial planners are a dime-a-dozen these days, BUT I guarantee if you take five minutes to read this post, you can make your own financial plan and may not even need the help of a professional if you don't want to deal with the headache.

I like to use symbolism and pictures when I talk about financial planning and today is no different. To the right you see a pyramid and the conversation today revolves around the bottom of the pyramid, which represents the "base" of your financial plan.

As I began saying, if you rely on your paycheck, or your spouse's or partner's paycheck to make it from week-to-week, what's your plan if you, your spouse or partner becomes too sick or hurt to work? Lemme guess...

Worker's Compensation? Alright, fair enough. However, what happens if they get sick or hurt OFF the job?

Savings? Really? How much savings to you have? 3 months? 6 months? A year? Yeah right, I seriously don't believe you. Keep reading.

Have disability coverage through work? OK, that's cool. However, did you know that only covers 60% of your total pay and most likely doesn't include commissions, bonuses or any incentive pay? To boot, it's most likely a taxable benefit if your employer is providing it, so it really comes down to like... 40% of your total pay. Can you live off 40% of your total pay? Probs not.

...So, back to my point, what are you doing to PROTECT YOUR PAYCHECK that funds your friggin' life?!?

As much as we all hate to admit that money is everything, we need it. We're talking about being able to provide for a family, keep a roof over heads, keep food on the table, keep gas in the car, ummm... it sort of is everything, right? (Damn the man!) But, it's true.

Did you know you can protect your paycheck by purchasing your very own disability insurance? (Sidenote: Ahhh! I hate the word insurance, but that's what it is. We can also call it Disability Income Protection- MUCH BETTER.) And best of all, it's reasonably priced. Disability Income Protection protects you and your family if you become too sick or hurt to work and believe it or not, illness is the highest rate of claims, NOT accidents...

Some statistics for you (taken from The Council for Disability Awareness http://www.disabilitycanhappen.org/)...

• 44% of U.S. families spend more than they earn.
• One-third of U.S. families have no retirement savings.
• 60% of adult Americans have NO savings for emergencies.
• About 100 million workers are without private disability income insurance.
• 71% of Americans would find it difficult to meet their current financial obligations if their next paycheck were delayed for one week.

...See why I didn't believe you about that savings BS you said earlier?

People, I don't write today to scare you or cause you to be paranoid about getting cancer or getting in a car accident. I'm simply asking that you take a look at your financial plan - (if you don't have one, I'm seriously shaking my head right now... email me)- and do the following...

1. START A SAVINGS ACCOUNT. Make sure you have at least three months worth of savings put away in case something, anything happens to your income. In fact, I would challenge you to do at least 6 months if you can! If you think you can't save any money, seriously email me and I will help you - that's how much I believe this is SO important, literally tearing up I'm so passionate about this. I'm a dork, I know.
2. MAKE A DISABILITY PLAN. Determine what your or your family's plan is if you or your spouse/partner becomes too sick or hurt to work - I'm talking a short-term plan and a long-term plan because you should have a plan for BOTH. If you do number 1, you should be able to purchase some Disability Insurance (DI) for whoever is working. If it's both of you, and you rely on both your incomes, then you both need a plan. Period. No excuses. Again, I'm so passionate about this because it happens ALL THE TIME. Unpected illness accounts for a huge amount of home foreclosures - true statement - look it up.
3. DON'T JUST READ THIS AND NOT TAKE ACTION. This step speaks for itself.

If you seriously have questions about any of this information, email me. I don't sell this stuff, I advocate for its importance because I am seriously passionate about protecting people from financial catastrophies.

Happy Planning and Happy Hump Day!