In a way, what he said was kind of flattering. He obviously thought his wife would have no trouble finding his replacement.
The reality, though, is that middle-aged women with kids aren’t often a hot commodity on the dating market. And even if she were the suburban version of Angelina Jolie, the underlying message was disturbing. He was putting his wife in the position of having to remarry for money. If she couldn’t find someone suitable, she’d face a lifetime of reduced financial circumstances.
That’s a hell of a legacy to leave behind, particularly when term life insurance is so cheap and easy for most people to buy.
Tips for Paying Off Debt in 2014
Starting the new year off on the right foot.
Can PayPal Hurt Your Credit?
Conversely, could bad credit prevent you from getting a PayPal account?
Where to Find the Cheapest Holiday Gifts
Presents that won’t lead you to the poor house.
Have a Happier Thanksgiving by Dodging These Spending Pitfalls
The bourbon in the pecan pie doesn’t have to be top shelf.
The greatest, most underused credit card perk
Two words: price match.
Today’s top story: The dangers lurking behind Black Friday shopping. Also in the news: How to resist splurging during the holidays, the pros and cons of tech warranties, and what you need to know before signing up for a store credit card.
5 Dangers of Black Friday Shopping
One of the favorite days of identity thieves everywhere!
7 Ways To Resist The Urge To Splurge During The Holidays
Just because it’s on sale doesn’t mean you have to buy it.
Spending: What you need to know about tech warranties
Protecting your latest bright and shiny gadget.
5 Things to Know Before Signing Up for a Store Credit Card
Too many store cards can damage your credit.
4 Tips to Begin the Estate-Planning Process
Having a thorough plan is an essential.
A few weeks ago I asked my Facebook followers if they had enough life insurance and, if not, what was preventing them from getting more.
Only two people mentioned cost. Many of the rest weren’t sure how much they needed or where they could turn for objective, unbiased help. A few were pretty confident they had enough insurance…although in reality they may have needed more.
The two most important questions to ask about life insurance are, “Do I need it? And if so, how much do I need?” The answers to those questions trump all other considerations—regardless of what your friendly insurance agent might be trying to sell you.
Here’s what you need to know:
If you have financial dependents, you need life insurance. Minor children are financial dependents. So is a spouse or partner who needs your income to pay the mortgage. Stay-at-home parents need coverage, too, since a surviving parent would likely have to hire childcare help. Some people have elderly parents who rely on them for income or caregiving or both; those people need coverage as well.
If you need life insurance, you probably need a lot. As in five to 10 times your income. The amount will vary according to your earnings, your savings and estimated future expenses, so it’s worth taking the time to get a more personalized estimate. MSN has a life insurance needs calculator here. Bankrate has one here.
Social Security survivors benefits probably won’t be enough. Social Security can provide checks to your survivors, but they won’t replace your income and they have limits. Social Security survivor benefits end at 18 or 19 for the child, while parental benefits (the check a surviving parent gets for caring for a covered child) end when child is 16. Widow’s or widower’s benefits typically don’t start until age 60. You can see what your estimated survivor benefits are at http://www.ssa.gov/estimator/
Insurance you buy through work usually isn’t portable. Many employers provide a life insurance benefit equal to your annual salary, and some allow you to buy more coverage. This may be the most economical way to buy life insurance if you have health issues or other risk factors, but the big downside is that the policy is tied to the job. Lose your job, lose your coverage. If you can, it often makes sense to buy at least some coverage independently.
Permanent insurance is for permanent needs, which most people don’t have. Term insurance covers you for a certain time period, usually 10, 20 or 30 years. Permanent insurance is meant to provide you coverage for life. Insurance agents love to sell permanent insurance, which often has some pretty cool features. The problem is that the premiums can be 10 times what an equivalent amount of term insurance costs. Remember, if you need life insurance, you need to get enough life insurance. Settling for too little coverage could leave your family in a real hole. If you do have a permanent need for insurance—you have a special needs child or an estate-planning issue that requires it—talk to a fee-only financial planner about your options. Otherwise, shop for term insurance at places like Accuquote or Insure.com.
Today’s top story: Preparing your home for the winter. Also in the news: Understanding the “kiddie tax”, why your chances of retiring early could be determined by your personality, and how to defeat the urge to binge shop.
Tips for Preparing Your Home for Winter
Don’t let your money go up in chimney smoke.
Understanding the ‘Kiddie Tax’
Those generous gifts could be generating taxable income.
Retiring Early May Come Down to Your “Financial Personality”
Are you a “protector” or a “pleaser”?
How to Defeat the Urge to Binge Shop
You might want to star by leaving your wallet at home.
Is Saving the Key to Happiness?
Money can’t buy you love, but saving it might just make you happy.
Thanksgiving is so late this year that I’ve been drifting along in a lovely bubble of denial. Even my Jewish friends’ preparations for Hanukkah haven’t been enough to alert me that Christmas isn’t far off.
Today a TV crew from a local Chinese-language stopped by to record some tips for enjoying the holidays without creating debt. The key, I said, is planning. So now’s the time to take my own advice.
Holiday season is a busy and expensive time, one that for us includes entertaining, travel, several family birthdays and a bucketload of presents. So here’s what I’ll be doing this weekend to prepare:
Finishing the spreadsheet. I use an Excel spreadsheet to list who will be getting presents and a target spending amount for each person. The spreadsheet also includes an estimate of what we’ll spend on travel (airfare, hotel, gas, food), entertaining (drinks, food, centerpieces), decorations (tree and lights) and holiday tips for the people who make our lives easier (cleaning lady, gardeners, hair stylist and so on). I total everything up, gasp, and start making adjustments so that our spending won’t leave us with huge bills in January.
Going on a treasure hunt. I buy gifts throughout the year and stash them in convenient hidey-holes throughout the house. I’ll dig them out and add them in the appropriate cells on the spreadsheet so I don’t wind up buying duplicate gifts.
Cashing in. I’m not a huge fan of gift cards as gifts, but I love using them to buy real gifts. I also have a rewards credit card program that allows me to use points to get Visa gift cards that, again, can be used to buy gifts or given in lieu of cash as a holiday tip. My daughter and I will also take our coin jar down to the nearest Coinstar to get a fee-free Amazon.com gift card. (Coinstar also offers gift certificates to iTunes, Starbucks and a bunch of other retailers.)
Stocking up. I like to take advantage of holiday sales to buy an extra turkey (to freeze and use later), stock up on baking supplies and lay in a fresh supply of crackers, dips and other nibblies for drop-in guests. This is also a great time of year to double dinner recipes and freeze half for those days that are just too frantic to cook.
I plan to finish this weekend in much better shape for the holidays. How about you? What needs to get done now for you to be ready?
Today’s top story: How to avoid charity scams. Also in the news: Money lessons from retirees, money-saving tips for travelers, and how a grandparents’ gift for college could ruin a student’s financial aid.
4 Ways to Avoid Charity Scams
Protecting your empathy from being preyed upon.
5 Financial Lessons from Retirees
Voices of experience.
3 Smart Money-Saving Tips For Your Travels
More money for souvenirs!
Grandparents’ 529 College Distributions Can Be a Ticking Time Bomb
A loving gesture which could ruin a student’s financial aid.
Laid Off? 5 Tips To Get Back On Your Feet
How not to become complacent during a layoff.
Today’s top story: Saving money while expecting a baby. Also in the news: How to finance your closing costs, teaching your kids about money, and financial tips for adults going back to school.
9 Ways to Save Money When You’re Expecting a Baby
One for every month!
How to Finance Your Mortgage Closing Costs
Little known ways to absorb your closing costs.
5 ways to teach kids about money that work
Letting them make mistakes can be a valuable lesson.
Financial tips for adults returning to college
FAFSA’s aren’t just for kids.
Financial Frenemies: Who Makes You Overspend?
When friends can be bad influences on your wallet.
Dear Liz: I currently have a 401(k) and an IRA, but want something more. A longtime CPA, who is very close to our family, recommended that I buy some stocks, but I’m unsure how to go about this.
Answer: When you’re investing, it’s important to be diversified. That means you should spread your money among different types of investments so you don’t have all your eggs in one basket, so to speak.
You’d need hundreds of thousands of dollars to be properly diversified with individual stocks. When you’re just starting out, it’s a lot smarter to buy mutual funds or exchange-traded funds that invest in a wide variety of stocks. Vanguard Total Stock Market ETF, for example, invests in more than 3,600 companies and has an ultra-low expense ratio of just 0.05%.
The fees you pay for your investments are important, since high expenses can dramatically reduce your total returns. Funds that try to beat the market, rather than match it, often engage in a lot of trading that drives up costs. Funds sold through full-service brokerages can carry high expenses as well.
So look for a discount brokerage that allows you to invest with minimal fees and commissions. Or consider one of the new breed of online advisors, such as Betterment or Wealthfront, that offers a low-cost basket of investments that are selected, monitored and rebalanced using sophisticated technology.