Last week we discussed common money mistakes women make in their romantic relationships. This week, we’re going to cover common mistakes couples make together with regard to their finances – then, on Facebook this week and next, we’ll share more about what you can do to avoid them.

As you’ll likely notice, every mistake we’re sharing today comes down to a single underlying theme (which just happens to be the first big mistake): Lack of Communication. Just remember that you don’t have to go it alone. Having a financial planner you both trust is just one way to safely open the conversation.

Mistake #1: Not Talking About Money

Talking about money can bring up all kinds of fears and anxieties for both partners. Identifying each partner’s spending/saving styles and addressing conflict areas can take you and your partner a long way toward taking control of your finances. If you want, you can use the mistakes we’ve outlined in this article to start the discussion! If you and your partner have serious conflicts over money, a few sessions with a counselor might be all you need to calm the battle field and find new ways of relating about this “hot” topic.

Mistake #2: Not Telling the Truth

If you hide purchases from your partner – or vice versa – you are not alone. In fact, many of us do this out of guilt, shame, fear – or simply because we don’t want to feel like a child. It’s important to realize that keeping money secrets is a form of financial infidelity and we all need to take a good, hard look at the level of integrity we want to bring to our partnerships.

Mistake #3: Not Carving Your Wishes in Stone

This mistake takes us to the foundation of our protection topic – wills and other legal documents. If you and your partner neglect to spell everything out (from what your personal wishes are to who’s name is on what account), problems can arise. Should one partner die or should the two of you should decide to divorce, you need instructional documents in place to ease the stress and simplify the process for everyone involved. Taking the time to make sure your financial legal life is in order is priority for creating a financial foundation in general, and it’s even more important when two people’s finances are intertwined.

Mistake #4: Not Monitoring Your Money Together – and Monthly

With this mistake, we’re back to budgeting – and by now you know how much we love that topic! Budgets are a great way for couples to get on the same page financially, as well as a great way to open the channels of communication on a regular basis. When you and your partner budget together, you are both equally involved in decision-making and you stay apprised of each other’s financial life. As we like to say, nothing bonds better than a budget.

Again, we invite you to use this article to start the money discussion in your household. And don’t forget to join us on Facebook this week and next as we share more about how you and your partner can avoid common financial mistakes and get closer as a couple.

To getting wiser!

FACEBOOK: http://www.facebook.com/WomenGettingWiseOnWealth

 

A note to our diverse audience: We use the word “marriage” because it’s easy short hand for a long-term, committed relationship. But the scenarios we describe can happen in any type of partnership in which banks accounts have mingled and/or one partner has gone MIA on their money management responsibilities.

When we fall in love, most of us tend to trust our partner quite naturally. In fact, we can offer more trust than is either prudent or required. Especially, when it comes to our finances.

Our desire to believe that the person we love would never do us financial harm, and our inclination to act on that belief by handing over control of our money, has gotten plenty of women in a heap of trouble (and men, too!).

Our trust coupled with our gender’s long history of role conditioning related to taking a back seat to the “man of the house;” along with the fact that even though times have changed, change is hard; and combined with our culture’s almost universal habit of marrying our money along with our persons, makes it almost understandable how we could find ourselves in a devastating situation despite the fact that it’s actually quite easy to protect ourselves from possible financial hardship should we find ourselves getting a divorce.

This is why we include this discussion about marriage and money in the protection step toward creating your Fearless Financial Foundation.

In looking at all the financial mistakes married women can make, there is one central theme that triggers every further mistep: Handing over financial decision making to a partner. Here are the top five financial mistakes married women make – and what you can do to avoid them:

Marriage & Money Mistake #1: Losing Your Financial Identity

Even if you take your spouse’s name, do not give up your own credit card for a shared card or put your own checking account into a joint account. The risk is losing your good credit score – something that can prevent you from obtaining credit in the future should you divorce. Keep using your own credit card to build and sustain your personal credit report throughout your marriage, and keep and grow your individual savings and investment accounts, too.

Marriage & Money Mistake #2: Losing Your Career

You might welcome the chance to stay at home with your children when you marry, but the longer you stay away from your career, the more difficult it is to get it back should you need to. It’s better to adopt the perspective that you might someday return to the workforce for any number of reasons and, therefore, need to stay up to date on your industry and job skills. Certainly, there is nothing wrong with staying home if it fulfills you, just don’t lose touch with your ability to earn money. Consulting, networking and even charity work can help you keep your foot in the door and still afford you the flexibility you need to stay at home.

Marriage & Money Mistake #3: Losing Your Future

Too many married women don’t prioritize saving for retirement – or they trust their spouse to save enough for both partner’s retirement years and their partner drops the ball. Women in long-term, committed partnerships need to put their own retirement savings on the top of their to-do lists with the mindset that saving for retirement is far more than simple to-do. It’s one of the most empowering and control-confirming habits a woman can develop. Putting money away in a retirement account is literally financing your future dreams and goals.  

Marriage & Money Mistake #4: Losing Your Perspective

During a divorce, women often put all of their focus on gaining custody of their children. So much so that they lose sight of their bigger financial picture. As a result, they may also fight for the house to avoiding uprooting the kids, without realizing that they won’t have the cash flow to cover the mortgage or maintenance or both. Women also tend to see a 50/50 split of assets as the ideal because it’s “fair.” The question is fair to whom? Should you and your partner divorce, seek an agreement that considers your future financial potential, rather than trying to retain real property or material wealth. Keep your perspective forward focused on what you’ll need later, and not what you can have now.

Marriage & Money Mistake #5: Losing Your Way

Women who divorce must determine how they will pay their bills and reach their long-term goals on their own. They must reclaim sole financial responsibility for themselves (if they made the mistake of giving responsibility to their partner during the marriage). But the fifth biggest mistake women make in taking back control is thinking that sole responsibility actually means doing it alone. We all need expert support around the issues related to divorce, retirement plans and protecting ourselves. Sure, there are DIY paths to everything, but part of empowering yourself is empowering yourself the resources you need to make smart decisions and get things done. When you view getting guidance in this light, you have nothing to lose and everything to gain.

To getting wiser!

 

Now that we’ve covered most of the major wealth protection vehicles – auto, homeowner’s, disability income, long-term care and life insurance, as well as the primary legal documents you need to have in place, including a will, living will and power of attorney, it’s time to do two things:

1.    Get into action by reviewing and purchasing the protective policies you require based on your unique situation, and creating the legal documents you need.
2.    Look at another aspect of protection – your wealth as its influenced by your romantic relationship.

So, first things first, getting into action!

We know that the information we’ve presented over the past few weeks can be overwhelming. Our goal was to give you just enough to get started and to encourage you to talk to your financial planner from there.

Even more, we wanted to stress that NOW really is the time to get a financial planner if you don’t already have one.

Obviously, we’d love to work with you ourselves – so feel free to give us a call. After all, it costs you nothing to talk to with us. But if not us, then PLEASE talk to another expert.

There’s a good reason protection seems so overwhelming. It’s because IT IS!

Protection is a complicated area and, for most men and women, it requires outside guidance. It’s when we don’t get support, or when we think we have to figure it all out ourselves, that we get into trouble. So, whether it’s us or another firm – just take that next step and before you know it you’ll be in action.

Once you take the first step, everything will fall into place.

Okay! That said, let’s move onto the next part of protection (which, as a reminder, is Step 3 in creating your Fearless Financial Foundation).

The reason we divide protection into two parts is that the first part is all about protection vehicles – the policies and documents you must have in place to protect your wealth, yourself and the people you love.

The second part of protection is all about developing protective emotions and behaviors that will ensure your financial safety when other people get involved – namely, your significant other and your children.

If we do not have children, and before we enter romantic relationships with others (whether it’s a dating, committed, civil union or married relationship), we are financially responsible for ourselves only. Additionally, no one is responsible for us and no one has legal access to our finances – except through the protection vehicles we’ve put in place, and in those cases, only in the event of our death or serious health crisis.

Once we are in a romantic relationship, though, everything changes. All of sudden, there’s a second income, they’re may be shared bank accounts and, even more, we likely begin to feel responsible for taking care of someone else.

The point is that love-based relationships have a serious impact on our financial lives. Because of that impact, there’s much we need to do to protect ourselves – no matter how deeply we love the other person or how certain we are that the relationship will last.

Over the next few weeks we’re going to dive into love, marriage and money – specifically, we’ll cover the mistakes women in relationships tend to make, marriage and money myths, how to raise a money-wise child and even a special article just for women in relationships who also have their own businesses.

But for right now, we want to share one very serious mistake some women make – mixing up their money with their partner’s too soon.

When is the right time in a relationship to combine your finances? While we can’t answer that with any certainty, and while it is different for each couple, we can tell you when the absolute wrong time is:

When it’s TOO SOON – which means before you are truly committed and before you’ve had a chance to test the strength of that commitment.

For most of us this is a no-brainer. But you’d be surprised how many women have fallen prey to partners who profess love and then steal their savings, or convince them to invest in a business or, even more commonly, simply mismanage the money. In this last case, it doesn’t have to have a deep, dark meaning. It could be that the new partner is just bad at managing their own money and so, naturally, can’t manage the collective money either.

We can’t stress enough that we all need to know a lot about our partners before we become willing to hand over financial information, give access to accounts or throw our cash into the same pool.

Setting up a joint account to which you both contribute is one great way to test the waters as the relationship becomes more serious, but before you even do that give the relationship a good long while to grow – without the pressures of combined finances.

For many of us, a romantic relationship provides an opportunity to take a truly empowered stance around money. If we have the courage and conviction to do it, it’s darn fantastic proof that we’ve truly taken control.

Life insurance pays monetary compensation to a person of your choosing in the event of your death. The primary purpose of life insurance is to protect those left behind from both financial and emotional hardship, but supplying money that can be used to cover everything from funeral arrangements to living expenses.

Women often do not think this form of protection is essential for them – thanks to life insurance’s long association with men who were assumed to be the sole provider for the family. But today, every adult, whether their income supports others or not, needs to consider life insurance as protection for those they love.

Because there are many forms of life insurance available, this is a topic that should be discussed face-to-face with your financial advisor. In the meantime, here’s a primer on the basics of term life insurance, whole life insurance and universal life insurance:

Term Life Insurance

Term insurance provides protection for a specified period of time and pays a benefit only if you die during the “term.” Term periods typically range from one year to 30 years. Yearly Renewable Term insurance may be for a lifetime, but premiums typically increase each year.

One of the biggest advantages of term insurance is its lower initial cost. Because with term insurance, you’re generally just paying for the insurance protection or the death benefit, which is the lump sum payment your beneficiaries will receive if you die during the term of the policy. By contrast, premiums for most permanent policies help fund both the death benefit and can accumulate cash value on a tax-deferred basis.

Term insurance is often the initial choice for many people. Term insurance allows high levels of protection to be maintained until sufficient resources can be identified to convert to a permanent product.

Therefore, an important provision to consider when purchasing Term insurance is convertibility. This valuable feature is usually available in the first few years of the policy, and allows you to convert your term policy to a permanent policy (e.g., whole life insurance) without submitting evidence of insurability. Being able to convert to a permanent policy is a necessary option due to the fact that circumstances in life will continue to change, but the need or value of life insurance protection never really goes away. That’s why when purchasing a term policy, it’s essential to know what permanent policies are offered by the term-life carrier you are considering. Some companies may only have strong term insurance products, while others may have very competitive products in both categories.

We suggest you ask these questions when considering term insurance:

• How long is the term period?
• How long does the conversion period last?
• If premiums can increase in the future, then ask: When and by how much?

Whole Life Insurance

Whole Life is an insurance policy that provides lifetime insurance protection with significant guarantees and tax benefits for the policy owner. When actuaries design a whole life policy, they begin by determining what rates are going to be guaranteed. The three guaranteed rates are:

• The guaranteed interest rate
• The guaranteed mortality rate
• The guaranteed expense factor

Once the guaranteed rates have been set, they are used to determine policy premiums and values. Guaranteed rates and values are based on conservative assumptions. Whole life insurance provides the policy owner three guarantees:

• A guaranteed level premium – The annual premium is contractually guaranteed to never change.
• A guaranteed death benefit – The level death benefit is contractually guaranteed never to go down.
• A guaranteed cash value – The contractually guaranteed cash value grows each year until it is equal to the face amount of the policy at a specified age, usually age 121.

Whole Life insurance offers the ability to provide value in excess of its guarantees through dividends. Dividends are paid to the policyholders if declared by the Board of Directors.
Universal Life Insurance

Universal life is a flexible-premium, adjustable-benefit life policy with an account value that accumulates on a tax-deferred basis. This type of policy is designed to give the policyholder flexibility to change the premium and death benefit of the policy while retaining the tax benefits of life insurance.

Universal life has three sets of guaranteed rates but, unlike whole life, the rates are not put into an actuarial formula to determine a guaranteed premium, guaranteed cash value and guaranteed death benefit. The guaranteed rates are:

• The guaranteed interest rate – This rate varies by insurance company and is usually between 2.5% and 4.0% on currently sold policies.
• The guaranteed mortality rate – This guarantee comes out of the 2001 CSO table, a table of guaranteed mortality rates that are required by insurance regulations on currently sold policies.
• Guaranteed expense charges – An allocation for expense.

Each month a calculation is made to determine the current policy account value. The account value increases with premium payments and credited interest and decreases with deductions for mortality cost of insurance charges and policy expense charges. Each month a calculation is performed in which the greater of the current interest rate or the guaranteed interest rate is credited to the outstanding account balance after the mortality charge and expense charges have been deducted. The insurance company can change the mortality and expense charges as prevailing conditions change, but they are subject to a maximum that is specified in the policy.
Universal life has been offered as an insurance option since the early 1980s. The major concern for the policyholder is that the policy will lapse if the cash surrender value falls to zero. This may happen if one or more of the following conditions prevail:

• The policy was inadequately funded with premiums.
• The actual interest credited over the life of the policy was inadequate;.
• The mortality and expense charges were increased, thus dissipating the policy account value.

In order to address the consumer’s concerns about the possible untimely lapsing of a universal life policy, many insurance companies have added a provision to universal life policies called a “Secondary Guaranteed Death Benefit” or a “No Lapse Provision.” This benefit provides a guaranteed death benefit even if the policy value falls to zero. The benefit is secondary because it is in addition to the death benefit guarantee that is provided by the guaranteed interest, mortality and expense charges of the policy. Caution must be used in order to maintain the secondary death benefit guarantee because any one of a number of changes or events during the life of a policy can result in either the loss of no-lapse guaranteed coverage provided by a secondary guaranteed death benefit or in a shortening of the guarantee period.

So, what’s a woman to do?

The most important steps of selecting a life insurance policy are, first, to begin to understand the basic types of policies and the advantages and disadvantages of each, and, second, to discuss your life insurance needs and what type of policy might be best for you with an objective financial advisor. If you discuss insurance with an insurance agent, you are likely going to end up with one of the policies that person is offering. If you speak with your financial planner first, you’re likely to get a better education and, ultimately, make a better choice.

To getting wiser!

Now that we’ve covered various types of insurance-based protection (auto, home, disability income insurance and long-term care), it’s time to work on creating the documents that will ensure your wishes are carried out should anything happen to you or you and your partner.

These documents include:

• Your Will
• Your Living Will or Health Care Proxy
• Your Power of Attorney

 

Commonly, the younger we are, the less we think we need these types of protection documents, but as soon as we begin to collect assets, get into a committed relationship or have children – in other words, get older – the more we realize the need for the assurance they provide. That said, it far easier to create these documents when we are younger – when our lives are simpler – and then expand on them as we get we older, than it is to create them for the first time when we already have a lot of ground to cover.

The point is, the time to create legal documents is when you become of legal age. And, if you don’t have them yet, NOW is the time.

What is a will?

A will is a written declaration by an individual (testator) of his or her intentions for the disposition of assets after death. If the will was prepared and executed in accordance with legally required formalities (which vary by state), and if the testator was competent and not under duress, the probate court will generally order that the testator’s plan be carried out by the executor.

A will usually may not direct the disposition of all of a person’s property. It is limited to what is referred to as “probate property.” Non-probate property does not pass under a will but by type of ownership or by contract. The most common examples of non-probate property are jointly held property and life insurance payable to a named beneficiary. While a will is an essential part of almost any estate plan, it should be viewed as only one part of the total picture.

 What is a living will or health care proxy?

A health care proxy is a document authorized by statutes in all states in which a person appoints someone as his/her proxy or representative to make decisions on maintaining extraordinary life-support if the person becomes too ill, is in a coma, or is certain to die. In most states the basic language has been developed by medical associations or other experts and may provide various choices as to when such maintenance of life can be terminated. The decision must be made in consultation with the patient’s doctor. A living will establishes the wishes and desires of its maker regarding the use of extraordinary medical treatment. The living will permits a terminal patient to die in dignity and protects the physician or hospital from liability for withdrawing or limiting life support.

What is power of attorney?

A power of attorney is a written document signed by a person giving another person the power to act in conducting the signer’s business, including signing papers, checks, title documents, contracts, handling bank accounts, and other activities in the name of the person granting the power. The person receiving the power of attorney (the agent) is “attorney in fact” for the person giving the power (the principal), and usually signs documents as “Melinda Hubbard, attorney in fact for Guilda Giver.” There are two types of power of attorney: a) general power of attorney, which covers all activities, and b) special power of attorney, which grants powers limited to specific matters, such as selling a particular piece of real estate, handling certain bank accounts, or executing certain legal documents. A power of attorney may expire on a date stated in the document or upon written cancellation but will terminate upon the death of the principal. Usually the signer acknowledges before a notary public that he/she executed the power, so that it is recordable if necessary, as in a real estate transaction.

What is the risk of not having these documents?

Except for a living will or health proxy, the risk to you personally of not having these documents is nothing. After all, you are gone. But the risk to the people you love is monumental. Without a will, your spouse may only receive 1/3 of your property in certain states; a child with a disability to who you had wanted to leave a large sum, will be given the same amount as your perfectly able children; the very special keepsake you wanted a certain relative or friend to have will be treated as property and could be ordered to be sold in order to divide the estate equally; the people you love may end up paying unnecessary taxes; and even worse, the people you love may end up in a battle with each other simply because your wishes were not clearly stated – and the list goes on.

Taking control of your financial life and protecting yourself includes giving your wishes and desires the power to be carried out even after you are gone.

Let’s face it, we are emotional beings and our assets have value and meaning beyond what they are worth monetarily.

What we leave behind and to who is actually part of our personal legacy – the part of ourselves that lives on.  

To getting wiser,

To explore working with us on protecting your assets, future quality of life and more, give us call at 443-212-1122.

Last week, we discussed disability income insurance. This week, we’re moving on to a completely different type of protection, but one that’s related in that:

• It’s not required, and;
• It’s absolutely essential for protecting your wealth and your quality of life – as well as protecting the wealth of your children, your parents and their quality of life.

 

It’s called long-term care insurance and while it’s been available for quite some time, it’s still not as common as it should be based on what it provides.

Why is long-term care so critical?

In truth, you may never need long-term care. But the statistics are eye opening. For example, in 2002 it was predicted that about seven million men and women over the age of 65 would require services from a nursing home or home or community-based program. By the year 2020, 12 million older Americans will likely require long-term care.¹ The fact is that longer you live, the greater the possibility that you will someday need assistance with the basics of everyday living.

After all, medical science has made a much longer life possible for most of us. But because of that longer life, we are also likely to face many more serious medical issues as we age.

Long-term care insurance can help you relieve the financial and physical burdens your family might otherwise face in caring for you. The ongoing care of a family member can be difficult for your children or spouse, both financially and emotionally. Not to mention that the idea of having a child or spouse assist you with eating, bathing or dressing is very unappealing for many of us.

With an appropriate long-term care policy in place, however, you will not have to rely on your family for these very personal aspects of self-care. You can select a policy that provides ongoing care even if you remain at home, which, for obvious reasons, many of us would prefer to do.

Should you need to leave your home, a long-term care insurance policy can protect your ability to select a facility that meets your needs and standards.

Why can’t I just rely on Medicare or Medicaid for my long-term care needs?

Long-term care can deplete your retirement savings and other assets very quickly, and many people assume they’ll be able take advantage of Medicare or Medicaid in the event they require care beyond what they can afford. However, Medicare pays only approximately 12% of all nursing home costs overall, and only for short-term skilled nursing home stays following hospitalization.² Medicare pays for home care for short-term unstable conditions only, not for the longer-term assistance that long-term care insurance is designed to cover.

To be eligible for Medicaid, you must meet a range of federal and state guidelines regarding your assets and income. This means that you may have to spend most of your own money before qualifying for Medicaid at all (requirements vary by state).

Additionally, once you are dependent on Medicare or Medicaid, you will be paid only for approved charges, and will be limited to approved facilities. Long-term care insurance allows you to control your care and your destiny. With long-term care insurance you have protection and you have choice.

When is the best time to buy long-term care insurance?

Most of us need to balance our investments and expenses carefully, and long-term care insurance has to be factored in with many other responsibilities. But it’s important to note that long-term care insurance is generally less expensive for younger buyers. In addition, it’s smart to buy long-term care insurance while you are relatively young and healthy. Unfortunately, once a person’s health declines, he or she may become ineligible for long-term care insurance. The simple answer is this: The right time to buy long-term care insurance is when you can afford it, and before you need it.

Are the benefits of long-term care insurance only important for our later years?

About 40% of the people needing long-term care are adults between ages 18 and 64, who may have had an accident, a stroke, or developed multiple sclerosis or another illness.³ Most people are unprepared for the high ongoing costs of this care, and it can present real difficulties for a younger family. The benefits of long-term care insurance work for a younger person just as they do for a senior.

To getting wiser!

 

¹A Guide to Long-Term Care Insurance, © 2004 America’s Health Insurance Plans.

²A Guide to Long-Term Care Insurance, © 2004 America’s Health Insurance Plans.

³2002 Long-Term Care Planning Handbook, Federal Handbooks, Inc.

 

Last week, we discussed auto and homeowner’s insurance – two protection vehicles with which most of us are very familiar. This week, we’re going to talk about another form of protection. It’s common, too, but it’s also neglected in that many of us have it, but didn’t purchase it ourselves, and don’t take the time to truly examine the coverage it provides. Then, there are those of us who don’t have it at all, for a variety of reasons, or lost the coverage it provides and have not had it replaced.

All of these are rather concerning scenarios since this particular form of protection is also extremely critical for most adults.

Without it, we stand to lose our quality of life in major ways.

It’s called disability income insurance, and here’s why not having adequate coverage can be so damaging:

Disability income insurance protects your wealth by providing monetary compensation to replace income should an event or injury prevent you from performing your job. In other words, disability income insurance actually becomes your monthly income if you are unable to work.

Sounds like a necessity for any woman who depends on her salary, right? Yet, disability income insurance is simply not as high on our radar screens as other forms of protection. One thing to blame for this is the way we typically get this coverage in the first place.

Unlike auto and homeowner’s insurance which we are legally responsible for obtaining ourselves, disability income insurance is not required by law and it’s typically part of our benefits package from our employers.

Once we agree to work for an organization, most of us tend to accept whatever benefits receive without much question. If we’re lucky, our financial advisor finds out we have a new job and asks us about the benefits so that he or she can determine if we need to purchase additional coverage. On our own, though, most of us don’t bring new employment agreements or a change in benefits to the attention of our advisor. We simply don’t know that we should, and the reality is that the amount of disability coverage we receive as part of our benefits may not actually be enough coverage to preserve our wealth and/or our lifestyle should we become disabled.

Additionally, if we lose our job or quit to start our own business, disability income insurance may not even be remembered. We lose our former benefits package, but we don’t immediately run out to purchase a policy – we just don’t think about it. 

Another reason this type of insurance is often neglected is simple denial. As human beings we know we are eventually going to die. This makes buying a protection vehicle like life insurance a logical step. Even though we may not like to think about dying, we accept it and take action.

What we can’t seem to get our heads around is the fact that we are far more likely to become disabled than to die. Studies show that the chances of becoming disabled at 42 years of age, for a 90-day duration or longer, is 3.5 times more likely than death.¹ Yet, we just can’t imagine a disability scenario actually happening – at least not to us. We think that if it does happen, we’ll find a way to earn money somehow.

For women, there’s another reason obtaining and/or assessing our disability income insurance may not perceived as a priority. That reason is grounded in our history as women.

In the past, women worked primarily in the home. Our responsibilities were taking care of the house, the meals and the children, not earning a salary. Therefore, covering our income was a non-issue.

Even as women entered the workforce, there was, for a long time, a pervasive cultural perception that women still needed or wanted a man to “take care of her” and society tended to view the husband’s income as more important.

So, disability income insurance for women remained a non-issue well past the time it actually was. 

Today, women are fast becoming the larger or even sole breadwinners. As a group, we are getting married much later in life, if we marry at all, and, of course, some of us are in long-term relationships with other women. Whatever the circumstances behind it, women simply do not rely on a man’s salary. They rely on their own.

Everything we’ve pointed to thus far explains, in part, why this type is not top of mind for many of us. But, clearly, it’s time to start thinking differently. We all need to bring more consciousness to this form of protection. 

To be blunt, dying without life insurance (damaging as it is) can have significantly fewer financial consequences than becoming disabled without disability income insurance. After all, you may not be able to work, but you still have to live – and that costs money. The reality is that not much can deteriorate your wealth and lifestyle faster than losing your ability to work and not being able to replace your income.

It’s generally clear why protection must be part of the Fearless Financial Foundation we are each working to create. Hopefully, it’s now more obvious why the disability income insurance component of protection needs to move to the top of the list.

If you have coverage through your employer or your own company, it’s time to assess it. If you don’t, or if you’re in between jobs, it’s time to look into purchasing disability income insurance independently. You may never become disabled, but the risk to your wealth of not being ready for this possibility is just too great to ignore.

To getting wiser!

¹ Society of Actuaries, 1985 – 1985 Commissioner’s Individual Disability A Table

Last week, we talked a little more about the benefits of protection. Now, let’s dive in a few of the types of protection – starting with auto insurance, homeowners insurance and the liability that comes with owning a car, a house or both. Plus, our key principle behind insurance-based protection:

Maximizing Your Protection While Minimizing Your Cost

 Protecting yourself is not about finding the cheapest policies. It’s not about finding the best policies. Instead it’s about finding and constructing your auto and home policies in a way that gives you:

• The right coverage
• Enough coverage
• The coverage you actually want

 And, here’s the clincher:

• Coverage that operates as cost efficiently as possible

For auto coverage, maximizing your protection while minimizing your cost means looking carefully at the three aspects of auto coverage very closely:

• Liability Coverage
• Under and Uninsured Motorist cover
• Physical Damage Deductibles

 For homeowner’s coverage, it means looking at:

• Personal Liability Coverage
• Personal Property Coverage
• Homeowner’s Coverage
• Coverage of Other Structures
• Loss of Use Coverage
• Medical Payments Coverage

While your goal in weighing various policies, as we said, is to work toward getting the maximum coverage while minimizing cost, the overarching objective behind the maximize/minimize principle itself is to protect YOUR WEALTH.

This overarching objective is also the reason insurance agents or brokers are typically not the right professionals to help you sort through insurance options.

Purchasing auto and homeowner’s insurance is about more than making sure you’re covered to the legal minimums dictated by your state; it’s about more than saving on your premiums; and it’s about more than the fear that is often used to sell policies. Quite simply, purchasing auto and homeowner’s insurance is about finding the right solution for your total and unique financial picture – what’s best for you, individually. That’s why having a financial advisor with nothing on the line in relation to which policy you select is the wisest choice. For many of us, insurance is just complex and emotional enough to require that objective third party.

 To Getting Wiser!

Auto and Homeowners Insurance are not underwritten or serviced by The Guardian Life Insurance Company of America.

Last week, we invited you to ponder 19 asset and quality of life protection-related questions. Before we move on, we’re eager to know:

 Did pondering the protection questions cause anxiety?

If so, how much?

 Did pondering the protection questions make you feel

more or less in charge of your financial life?

 If you haven’t had a chance to read the questions, click here.

We’d love everyone to share their thoughts. After all, talking about this topic is the best way to make us all feel more in charge!

Now, on to the task for this week – the benefits of protection.

Protection is not a one-size-fits-all proposition. Your answers to our 19 questions and more (especially questions about your total financial picture) will influence your protection plan. Protection must be crafted to address your unique circumstances.

Most importantly, understanding what your answers mean by discussing them with your financial planner – is one of the single most critical actions you will ever take related to your finances.

 Having adequate protection can help you:

• Feel more in charge of your life overall.
• End needless anxiety over “what if’s.”
• Ensure your quality of life, today and for the future.

Also, if you do not have a planner, we can’t stress enough that now is the time.

Even if it is simply to review the list of questions and point you in the right direction, the right financial planner will have the big picture perspective you need to handle your protection in a way that works for you.

To explore working with us on protecting your assets, future quality of life and more, give us call at 443-212-1122.

 To Getting Wiser!

Over the last few weeks, we’ve been discussing Step Two in you Fearless Financial Foundation – Budgeting.  We also gave you a Wise on Wealth Resource – The Wise Women’s Budget Checklist and encouraged you to start creating your budget with your true purpose for money (which was Step One) in mind.

If you haven’t downloaded your budget checklist, simply: Scroll down the right column of THIS WEBSITE to the Wise on Wealth Resource download link -

But make sure to download it soon, because as of next week we’ll have a new resource for you!

So, now it’s time to dive into Step Three of creating your Fearless Financial Foundation: Protection

Protecting your assets is a foundational step, even over a savings plan or investing, because life is, well, uncertain.  If you’re not protected, even the smallest event or life change, can send you back to square one or worse.

In fact, many clients come to us because an unexpected life event has wrecked havoc on their financial security.  They’re scared, confused and, often, it’s too late.

Even though Raskin Global is know for finding creative and progressive ways to overcome diversity – and we often do prevent clients who are sinking from actually drowning – we’d much prefer to concentrate on protection right from the start and make sure our client’s wealth is safe as it can be from the start.

In fact, that’s the whole point to Step Three and what we’ll be talking with you about over the coming weeks.  Specifically, defining protection, figuring out what protection vehicles you need and creating a protection plan that’s right for you.

Sadly, many people are in denial about protection.  They gamble that nothing bad will happen to them.   But in today’s economy, bad things are happening to very good people every day.  We all need to ascertain how close we really are to disaster with eyes wide open.

So what is protection and how do you ensure you’re protected adequately?  We’re going to tackle this question in multiple parts over the coming weeks – starting with a list of protection-related questions we invite you to ponder.

Pondering Protection – 19 Questions Every Wise Woman Needs to Ask:

1.  If you died or became disabled, would your family be able to meet its monthly financial obligations?

2. If your spouse died or became disabled, would your family be able to meet its monthly financial obligations?

3.  Do you (and your spouse) have legal documents in place that explain your wishes regarding your body, your children, your assets?  Do you have a financial plan and resources for carrying out those wishes?

4.  How many month’s worth of easily accessible living expenses do you have in reserve (money market, savings account)?

5.  Do you have children?  How old?  If adults, what is their financial and life situation should you need support?  If you are single, do you have close relatives?  Have you discussed your situation and future plans with them?

6.  Do you sit on any boards or associations?

7.  Do you own your own business?

8.  Do you work out of your home?

9.  Do clients visit your home or your office?

10.  Are you an independent contractor for any companies outside your full-time job or in addition to your business?

11. If you are self-employed, what are the costs of an unhappy client, a project gone wrong (even by mistake), a possible negligence or other legal suit?

12. Do you own a home or rent?

13. Do you have items of value in your home not itemized SEPARETLY in your home owner’s insurance?

14. Are your insurance premiums and deductibles at the right level for your specific financial situation?

15. Do you own cars, a boat or other item with accident potential?

16. Are you closing in on 40, or are you over, and have not thought about or purchased long-term care insurance?

17. Do you know your expected cost of living at retirement age?

18. Do you know your expected Social Security and other retirement benefits?

19. Are you planning on paying for your child or children’s college education?

You can probably tell where many of these questions are going, but it’s important to ponder the questions BEFORE thinking about protection action steps because its in connecting with the reasonable anxiety that these questions tend to produce that enabled each of us to see the real value of protection – and be willing to invest in it.

The truth is that not all protection action steps are expensive, but they are necessary.  The key is finding the right protection plan for you – protection that fits your life – not simply the statistical norm.

If you follow the statistical norms in constructing your protection plan, you’ll often end up paying much more than you would have if an experienced finanical planner (rather than an insurance broker) analyzed your situation and presented options.   You can end up with coverage you don’t need and options that, if activated at some point, don’t supply the coverage that you need. 

We won’t tell you to have fun with the questions, because we know they stir the pot of fear for most of us.  But we do have a suggestion:

Approach the questions with a proactive mindset.  Your taking charge of your financial future.  In this one area of life, you are stopping yourself from ever having to say “hindsight is 20/20″

For personal support around protecting your assets, assuring future quality of life and more, just give us a call at 443-212-1122.  We’d be happy to put you on the Fearless Financial Foundation Fast Track.

REMINDER: Budgeting for a Bold Future is TONIGHT!

It’s not too late sign up and get in-person support in creating Step Two of your Fearless Financial Foundation.

CLICK HERE to Register for TONIGHT’S Women Getting Wise on Wealth Event Now!

To Getting Wiser!