Finances

I really want life insurance for my family. What happens if I go Home tomorrow, how will the bills be paid? Emma and Elizabeth could get by for 9 months on our savings, but then what? That does not even account for the cost of the funeral. I hope it is nothing fancy, but I know they would not do the cheapest either.

I've often pondered about this. The problem is that the budget right now is so tight. It always seems to be. But wouldn't it be even tighter for them if I was not making money? I always think that I'm young. I'm only 35, I've got plenty of time. That might be true, but you never know what our Lord has in mind. My time might be up very soon. While I'd love to see Him, I need to make sure my family is not going to be living off the generousity of others.

I've done a little research on life insurance. It is very confusing to me. Term Life, Whole Life, Half Life... All these terms that I don't really understand. I found out that Term Life is where you pay monthly a small amount for a period of time. At the end of that time, the policy ends and you can buy another policy. The only way to get anything from it is to die. Whole Life is a little different. You make payments into it and they are put into a savings account. If you die, then your family gets the protection ammount. However, the ammount in the savings account can accrue interest, and you can get loans from it and use it in various ways that I'm unsure of.

I think that I need a simple term life policy. There is also mortgage protection insurance which is a simplified policy that only pays off your mortgage and a little extra to cover "some final expenses". While this is not really ideal, it might make the cost low enough that it is something we could do now. Then Elizabeth would own the house and would only have to worry about the other needs. Since the mortgage counts for half of our expenses it might be worth it to get mortgage insurance.

Another fact I learned is that one in five people are disabled permanantly before the age of 65 and that half of all bank forclosures are cause by disability. That is staggering. Now, that figure I'm guessing, includes people, like my step-father, who received disability from the military (knee I think) but are still working and functioning like regular members of society, just with something that slows them down. I wonder if my arthritis would count? Anyway, I don't think that this scares me enough to get insurance for it, but there is mortgage disability insurance which would pay off the mortgage if I was disabled. I'm betting it only pays it off if I am disabled and cannot work.

Finding a policy we can afford I think is something we should seriously consider. It is important and would allow Elizabeth a little time to process everything, even if it is not enough to live on for the rest of her life, and send Emma to college as well. We almost got a policy just before I went back to school, but decided the budget was too tight. That was probably the right decicion, because with the higher cost of... everything... we may be struggling to pay it, if we had.

Do you have so much debt you don't know what to do? What can you do when you can dig out from under all those bills threatening to turn you into a slave to the financier?

My advice, of course, is to not get into this place to begin with. Don't use credit cards, have an emergency fund, don't buy more than you need and pay cash for that. I actually do use credit cards, but I pay them in full nearly every month. Knowing that I need to do this, I keep the amount I charge to a minimum. I really only use them at all to get the reward points :D.

I was not always so bright with my spending. When we first got married we charged some new furniture and when we didn't have the money for something, we quickly ended up with $15,000 in credit debt alone. Then my wife got sick and I lost my good job. We had to charge things to keep on living, with her not working and my only working part time. Really, I should have found better work quicker, but non the less, we ended up with $30,000 in credit debt, on top of the car, mortgage and student loans.

Eventually we worked it out. We stopped spending so much, destroyed the credit cards, I got a better job, and we worked hard to pay them all down a little extra every month. After a few years we got it under control enough that we could by a house. A couple years later we had enough equity in the house that we could roll all our debt into the mortgage.

For us, this was the right thing to do. It was honest. We got into the mess and we dug out. It took a long time and was a lot of work. For other Debt Relief counseling may be a better option. I'm not sure how I feel about this. They contact your creditors and get them to lower your debt in order to get their money. They make arrangements for you to pay less overall. It is great, for the debtor. The problem I have is that when people get themselves into high debt, take this road and get their payments reduced, who makes up the difference?

The creditors still need to make a profit. They don't want just a little profit, they are looking for big profits. They are willing to work with their debtors, because they would rather something back than nothing back. But does this kind of activity mean that I might have to pay a higher interest rate? With 20%+ interest rates being very common, I'd say it is probably so.

Of course, if you have a bunch of 20%+ credit cards, and you are having trouble getting them paid, first remember never to take a high interest loan again, second, call them and ask them to lower the rate, third try to get a new loan with lower rates that you can afford. If none of that works, please to call for Debt Relief help. We should not be paying such high rates. The only reason they get away with it is because we let them.

Debt counseling can lower or eliminate your interest, stretch it out for a longer period of time and help you make it work. Debt Relief counseling claims to be able to actually get the banks to take less than what you owe. I was able to manage the hard way, and got the debt worked out. Our home is not much and we still struggle with finances, but we have no credit debt or auto debt. I do feel good about what we did and we are working to build our finances a little so that our daughter can go to college without worrying about loans and we can have a retirement. I sometimes wonder if we should have gotten help at some point.