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How Midlife Affects Your Insurance Needs…Are You Covered?

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You’ve no doubt heard of a midlife crisis: the time in life where you realize that you aren’t going to live forever. As a chance to take stock of the plans you had in your youth and square them up with where you stand now, midlife can be a time of great strife for some people who haven’t achieved their goals.

The good news is that by definition “midlife” means that you are only halfway through. That means you have just as much time left to change your situation as you had getting into it. That also means that there is still plenty of time to turn your financial ship around. If finances are an area where you have not lived up to your plans, dreams, and goals, now is the time to take the bull by the horns.

One critical way to tackle your midlife financial goals is by doing an insurance audit to make sure that you are not only managing your union bank credit card rates and wealth but also that you are protecting your assets along with growing them. Reviewing your insurance plans to ensure that you are fully protected and safe is a good place to start gaining financial control.

The insurance audit should cover all of those things that you use insurance to protect:

Health Insurance

It is not uncommon to develop chronic conditions in your 50s and 60s, which is why it is so important to choose your healthcare plan well. Make sure that you have the proper out-of-pocket caps and deductibles to fit your overall health needs. Having a small deductible is nice, but you also want to ensure that if things go terribly wrong, you have reasonable out-of-pocket costs.

Your risk for serious health conditions increases as your age does, so taking a good look at the structure of your health plan can help you to cut costs and ensure that you are getting the right coverage for any prescription, rehabilitation, or therapy needs.

Midlife means that you have to take a better overall look at your health needs and anticipate what they might be going forward. It may also be a time when you will have to make decisions about the transition between your health insurance and Medicare. Don’t make the assumption that things will be covered. If you need to purchase supplemental insurance, make sure you know exactly what will and will not be covered before the transition occurs.

Life Insurance

When you have young children, a house, and other dependents, it’s a good idea to have a hefty life insurance policy. But it isn’t inexpensive. As you get older, the price of life insurance will continue to increase unless you have a set policy. If you are paying a lot for health insurance and you aren’t supporting anyone but yourself, it really doesn’t make any sense to overpay. Unless you have someone depending on you, reevaluate your life insurance needs.

Disability Insurance

If something should happen to your income, then having disability insurance is a must. The average policy will cover about 60 percent of the income you are earning. Short-term policies will cover your costs for up to two years post-disability. Long-term policies will typically cover you until you turn 65 and you can start to collect Social Security. You can reduce your premium by shortening your benefit period if you are closer to 65.

Auto Insurance

If it has been a while since you compared rates for your car insurance, it is definitely something to investigate. Most insurance carriers consider older individuals lower-risk and will reduce premiums. Also, things like your credit score can reduce your auto insurance payments. It is worth it to call around and talk to several insurance companies to ensure that you are getting all the discounts you can. Go the extra mile to phone the carriers directly to get the discounts you deserve.

Midlife can be a difficult time emotionally for people, but it doesn’t have to be one, financially. Making sure to initiate sound changes to maximize your insurance coverage by minimizing the costs is the best way to protect your assets while still growing them.


New Job and a New Outlook

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I am slowing shedding the feeling of shame I’ve been carrying for the last couple of years since we moved out of our home and into the apartment.  For the first time in a LONG time, things are really looking up!  It has been a really rough time, especially since December when everything changed so suddenly.

As I mentioned in the comments of my last post…I GOT THE JOB!!!

It’s full time, full benefits, work in an office…real life job!  And the way it happened could not be any more providential!  Here’s a little back story.

When we began our Christmas visit with my grandmother, I spent a great deal of time applying for jobs…everywhere, all over the world.  Well, I had been through this before, know the holidays were not a good time to be in the job hunt, but I continued to persist.  The job I got is one of those jobs.

Then while we were in Texas visiting my immediate family over Christmas, I got a text from our ‘landlord’ that the camper we were living in had been damaged and was no longer liveable.  Can you say full panic mode!?!  Up until that point, I had planned on us living in the camper until April when we could 1) wrap up the school year and 2) finish Gymnast competition season at Regionals.  Then was planning to move to GA to my grandmothers or travel for a bit.

With nowhere to live any longer, the timeline moved up for the GA move, but I was able to secure temporary housing in VA for a month while Gymnast finished his regular season meet. And to give us time to pack up and get things into storage and so on.  My grandmother graciously let us move in with her with first week of February.

On our trip to GA with our final load of belongings, I got the call. They were interested in my varied skill set for a brand new position, but I lived in VA. Oh, how funny, I’m was actually driving down to GA with our last load of belongings to complete a move to a town, that is literally one town over from the corporate base of this company.  They headquarters are 12 miles from my grandmothers home, 12 miles!

Our first three weeks in GA were filled with in person interviews, personality test, reference checks and phone follow ups, and our last Friday night there (before we returned to VA for a week) they called at 4:12pm and offered me the job, met my salary requirements and I start NEXT WEEK!!!!!

The timing of the call, the timing of the interview process and the start date…after over a year and a half of searching, I can only say that God had a hand in this.  But there is more, this company gives back to foster/adoptive charities (hello, near and dear to my heart,) the owners actually know some of my extended family (small town but wow,) and one of their goals is to empower women/moms.  Holy cow, can it be any more perfect!

Granted, this will be a BIG adjustment for my little family.  I will be going to an office for the first time in 13 years. My grandmother has insisted we remain with her for at minimum another month while we adjust to the new life and she will help with the kids.  She’s watched us homeschool all these months we’ve visited her over the past couple of years, and is comfortable with keeping the kids on track to finish out the year.  We will have school on Sunday evenings where I will give assignments for the week and then we will meet a couple more times during the week to make sure we are on track.  It’s not going to be easy, but I am confident we can adjust.

I am keeping both my part time jobs for the time being both for security and to help me get back on solid financial ground more quickly.  All jobs are aware of the situation as far as me working them all.

And just a small financial win…okay two wins. Maybe three.

  1. I was able to replace the tires on my car, yes, I waited until it was dire, but I paid in cash!
  2. The kids have all received a small stipend for some summer clothes and are looking forward to getting to shop. (They have had a couple of weeks to make lists and think through needs and wants, etc.)  This is especially crucial for the two youngest since they hit major growth spurts this year, so nothing old fits.
  3. I have almost $500 in an emergency fund, consistently saving 10% of any monies received.

I am so grateful for this community and the constant encouragement. I’ve still got a wait until I get my first paycheck and see how all the deductions and so on work out before planning a budget and starting to look for housing.

Keep us in your thoughts and prayers this week as Gymnast will compete at his state meet this week, his last with his current team…it is bittersweet and he is really struggling with the move the most because of it.  And then we will return to GA to start our “new life.”

 

 


Well Crap

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It’s been a long time since we’ve had a major financial set-back. A really long time.

In fact, everything has been going rather smooth over the course of the past year or so. Income is up, outflow is down, we just hit the half-way point in our debt reduction journey. Life is good!

Until…..tax time.

We met with a CPA on Friday. Turns out we didn’t have all our sh-t together so we have to round up the last of our documents and get them over to the office early next week. So we don’t have official numbers, but it’s looking like it’s gonna be bad. Like….possibly in the 5-digits level of “bad.” Yeah. We may owe the IRS to the tune of over $10,000. How the f do we owe so much? I don’t even know where to begin.  I  thought my payments through my full-time job would help offset things more than they did. Clearly.

We have a LOT of deductions to claim. We also have tax credits we can claim. We’re not out of hope.

But it felt like I’d been punched in the gut after our CPA meeting. We don’t have $10,000. Not in cash. To owe that much would officially move us BACKWARD in our debt progression. The first backward movement since we started our debt payoff process nearly 3 years ago. We’ve had months of stagnation, but we’ve never gone BACKWARD. Never ADDED to our debt (mortgage not included). But my plan (to have cash or put it on a credit card to buy us an extra month) isn’t going to work if we’re talking about that much money.

We’re scrambling to think of a plan so we can pay with cash and not have to set up a payment plan (accompanied by penalties and interest) with the IRS.

In the meantime, we’ll be having another meeting (or two) with the CPA to figure out exact numbers and the best course of action. I’ve also suspended all non-essential debt-payments so we can pile up some cash. Unfortunately, given my recent agreement with the medical bill place, I’m committed to minimum sized payments of $1215/month through April. That, in addition to my minimum student loan payments, puts us at a minimum of about $2000/month. We’ve only been budgeting $3,000/month toward debt and having a minimum payment of $2000 only leaves us about $1,000/month of “wiggle room” to try to stockpile cash for our upcoming IRS debt payment. It’s not nearly enough. Particularly if we owe in the tens of thousands of dollars. omg. Just saying it makes me sick to my stomach. I hope to God it doesn’t turn out that bad. But, as the saying goes, hope for the best and plan for the worst. So all non-essential spending is DONE. In the meantime, we will hoard and stockpile money as best as we can. We do have an EF ($5,500) and a couple various savings accounts. Though it’s a bit like stealing from Peter to pay Paul. It’s certainly not ideal. But neither is the thought of acquiring more debt. It gives me a headache to even consider the thought.

Many of you had warned that we should beef up our EF now that we’re homeowners. This wasn’t the intended purpose (most commenters were thinking more in-line with needing to repair/replace an old roof or HVAC, etc.)….but now that we’re in this situation, it’s sure making me think about how great it would be to have a full $10,000 EF. This IRS tax problem would be solved (and then the “problem” of re-stocking the EF is much easier and less stressful).

So that’s my “well crap” update. I will bring you a February debt-update (which, as mentioned, is lower than the originally planned $3,000 due to the need to save all non-essential payments for our upcoming tax bill). In the meantime, I’ll just keep putting one foot in front of the other. Hoping for the best. Preparing for the worst. Ugh!


Finance Management in Your Forties: 5 Important Factors

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Many people consider their career high to be somewhere in their forties. Combining the ambition and excitement of their earlier years with the experience that comes with time, your 40s could be a time where you have made the right decisions and are enjoying a certain stability in your life. It could also be the most important time to start some serious planning about your family’s future and to think about slowly easing into retirement.

Here are some tips to manage your finances in one of the most crucial junctures of your life. These can make a significant difference in your life 10-20 years from now. That may not be the most compelling case for a look at your financial profile now, but it is certainly something you will come to appreciate at a later point.

Asset Allocation

Your risk profile should and will change with age, and it’s important that you adjust your investment portfolio accordingly. Make sure it suits both your short-term and long-term goals. Investment in equity may be a great plan for when you retire, but it be would less suitable if you have financial requirements that are coming up sooner – maybe your kids are graduating in a few years and you need to plan for their tuition; maybe you are expanding your family and plan to buy a bigger house. Your plans must fit into your investment portfolio. Make sure they are well-diversified and that there is no allocation overlap.

Invest in Profitable Assets

If you have been fortunate enough to have a stable income in your 40s, you should look into making well-thought-out investments in solid assets, but you have to be careful as to what that “asset” might be. Investing in a second car might sound like a convenient idea, but it wouldn’t count as an asset because the capital cost would be depreciating down the line. Ideally, you should look into income potential for capital growth, short-term capital gains and the risk involved before you decide about investing in an asset.

Maintain an Emergency Fund

By this time in your life, you must have a decent emergency fund. If that is not the case, it is important to start now. You will find that your emergency funds will be tested more and more in your forties. Be it health troubles or your child’s education, health or even wedding expenses, it can hit you from any direction even though you might have insurance Winnipeg coverage to offset some. Make sure you maintain an appropriate-sized emergency fund and keep replenishing it as necessary. Also, it might be a good idea to reinvest it in some other taxable investment account so that it can grow, especially if you feel like you have less use for it. Withdrawing it can come with some penalties, but you’ll have a higher chance of making a sizeable growth over time.

Insurance

Making sure you have appropriate insurance coverage is one of the most important factors to take into account. Your insurance needs at 40 may differ greatly from your 30s, especially in relation to your health. Even if your employee package covers this, it would be prudent to review it now and then. Do you need a long-term care package? Would taking out disability insurance be appropriate? It could be a lifesaver in the event of income loss due to unforeseen emergencies. Have you renewed your term insurance package? Have you reviewed your claim beneficiaries in the event you’ve had some major life changes, like a divorce? If you have large assets, consider an umbrella policy that covers life, health, auto and home insurance all in one with good coverage so you don’t have to manage separate policies.

Retirement

Are you earning more now in your 40s than you were when you last upgraded your retirement account? Perhaps it is time you review your investments in that area now that you are getting closer to retirement. Many people make the mistake of siphoning off excess income into an inflated lifestyle, the net gain of which is zero. Consider boosting your retirement contribution. This could take the shape of adding to your 401K, or if you aren’t satisfied with the matching contribution you are getting, you could roll it into an IRA that you control.

With that said, don’t forget to take out some money to invest in yourself. You have worked your way up to this stage, and you deserve to sit back and enjoy some of your hard-earned money. While retirement planning is an important factor that you have to start considering from now on, don’t forget that you only get to live your 40s once.


Rain and Gusting and Ice: How to Drive in Bad Weather

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Picture the ideal day for driving. It’s probably mild and bright without a cloud in the sky. Unfortunately, the weather rarely complies with our driving wants and needs. Most peoples’ first choice would be to stay off the road during inclement weather, but sometimes life beckons. Whether you’re commuting to work or embarking on a road trip when a storm hits, how can you prepare for bouts of bad weather and keep yourself–as well everyone else on the road–safer?

Plan Well Ahead of Time

You can’t control the weather, but you can certainly control your preparedness for any situation you encounter on the road. Before you leave the house, check the weather. Sunny skies could turn to thunderous clouds over the course of a few hours. Look into all possible routes to see if you can avoid the worst of the storm, and leave early so you have enough time to reach your destination without rushing.

Bad weather is not the time to discover that you have a vehicle malfunction. J.D. Power recommends having your vehicle checked more frequently during seasons of bad weather like winter, and making sure that your windshield wipers, headlights, and mirrors are in working order before you pull out of the driveway.

If you live in a cold climate, pack a winter survival kit in case your vehicle gets stuck or disabled in the snow. The basics include, but are not limited to:

  • Windshield scraper and small broom
  • Flashlight and batteries
  • Energy-rich snack foods
  • Warm clothing and blankets
  • Grainy material for traction
  • First aid kit and pocket knife

It’s Raining, It’s Pouring

A little rain never hurt anyone, right? When it comes to driving, wet roads and impaired vision actually increase the likelihood of an accident. Almost everywhere in the U.S. experiences rain at least once a year, and some states can expect steady annual downfall. One of the best preventative measures you can take is increasing the space between you and the vehicle in front of you. Edmunds suggests aiming for a six-second gap to be on the safe side. If wet and humid conditions create fog, use your low beams to maximize visibility.

Hold onto Your Hat

It’s not just obvious tornado and hurricane-induced winds that drivers need to consider. Hurricane winds are considered 74 mph or faster, but the weather service puts out advisories for much lower speeds. In wind-prone states like Florida, the advisory covers sustained winds between 25-39 mph, or gusts at 57 mph. Robert Molleda of the National Weather Service explains some associated risks: “If winds are above 30-35 mph for extended periods of time, it can be an issue for high-profile vehicles on bridges and overpasses. Also, tall objects such as construction cranes can be hazardous in those winds.”

Sounds like a recipe for potential damages, doesn’t it? As for driving in gusty conditions, The Telegraph suggests that drivers should ease off the gas, brake steadily, and hold the steering wheel firmly to maintain control against the onslaught. It goes without saying that windy occasions are not the time to speed or tailgate. Even so, drivers can’t always react in time to others on the road or blowing debris. Drivers need to protect their vehicles and themselves against these weather-associated risks by having adequate insurance coverage, not just the minimum required by law. For example, if you’re in the Sunshine state, legal Florida auto insurance only equates to PIP, or personal injury protection coverage. However, chances are you’d need more coverage than that if you were involved in a weather-related accident.

Ice, Ice Baby

Snow and ice are beautiful from the vantage point of a warm house, but the story is much different from inside a car. Follow these guidelines from the Occupational Safety and Health Administration (OSHA) whenever possible to reduce risk when your tires are on ice or snow:

  • Steer into a skid
  • Stomp on antilock brakes and pump non-antilock brakes
  • Give yourself longer stopping distances
  • Rehearse maneuvers during the daylight in an empty lot
  • Avoid fatigue and rotate drivers when possible

With proper preparation, the right protective measures, and practiced defensive driving skills, you’ll be more ready to take on the elements in your vehicle. It’s preferable to stay home, but if you absolutely have to be out and about, stay safe and slow down.


Cross Your Fingers for Me

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Later today I have what I think will be a final interview for a full time job here in GA.  It’s the one I referenced here that called me on our move down.  I’ve been through the first interview, personality test, submitted professional references, so I think this should be the last in person part of the process…

Not counting my chickens before they hatch, been through too much of this in the past year and a half to do that, but I am hopeful. We’ve got one more week here before we return to VA for a week for Gymnast state meet, Princess orthodontist appointment and so on. (Yes, I did let this potential job know about this commitment in the very first phone call and again in the person interview.)

This move has been a BIG change for us all.  While I am really enjoying the lower cost of living (gas and groceries,) we are all filling the pinch of lack of activities for the kids.  We’ve been exploring the surrounding counties to see what their parks and rec departments have to offer.  I know once they get plugged in and make some friends it will be easier on them.

trying on shoes

Princess and I spent Friday night window shopping and trying on shoes just to get out of the house while Gymnast spent the weekend at cousins.

Oh, and Sea Cadet has a job interview as a vet tech tomorrow. I’m not sure how that will work since he has unofficially committed to the same summer camp as last year. If he gets this local job, he will have some decisions to make.


Tax Time!

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It’s that time of year again…TAX TIME!!!!

This year I’ll be responsible for getting the taxes done for two households:  my own and my father’s (side-note: my dad has frontotemporal dementia, as explained here). Last year at tax time, my brother physically went with my Dad to an H&R Block to have his taxes done, at his request. It worked out, but was a whole mess because then my Dad lost all of the tax paperwork after-the-fact and it’s been a huge pain as I am the person who handles all of his finances. I really could use those year-end statements!!!

This year, given another year of progression of his cognitive impairments, my dad no longer cares about his taxes so I can handle them entirely myself without needing to include him (this is always a tricky balance because he cannot be in charge of his own finances, but he still wants to have some oversight and say in how things are handled. It’s totally understandable, but presents a challenge since he doesn’t have the mental capacity to fully think through financial decisions, etc.).

For our own household, we’ve either done our taxes ourselves (in years past) or used H&R Block, too.

This year, I want to do better. I’ve never been a huge fan of the cheap drop-in type of tax places. I want to hire a CPA that we can have an ongoing relationship with. Someone who knows our finances and is knowledgable enough that they can make recommendations (e.g., donate $X or contribute $X to whatever tax-advantaged account, in order to save $x in taxes) and know all the little ins and outs of tax laws. I want to pay what we owe, but also to limit our liability in whatever (legal) ways are possible.

Also, there’s the whole issue that I live in Arizona and my dad lives in Texas. I’m flying back for a couple of days in March to handle some of my Dad’s affairs (I will be scheduling meetings with:  an estate attorney, a CPA, and a financial advisor). I’m assuming my Dad’s CPA needs to be someone physically in Texas, given that state-level tax laws are obviously different state-to-state.

Here’s my issue – I have NO IDEA how to find a reputable CPA. None. So I come to you all, as you are way more knowledgeable about this than I am. How do I find a really good CPA? Where would I even search? Google? Yelp? Help!

And as a side note….I’m pretty nervous about this year’s taxes. Gulp! The past couple years I’d been paying estimated quarterly payments so our tax liability in April was pretty minimal (usually about another $1500ish or so). This year, I haven’t done any estimated payments at all. UGH!!! We have made some hefty tax-credit approved donations so our state tax liability should hopefully be zero (knock on wood). And I’ve had taxes removed from my full-time paycheck so hopefully that will help offset the burden of what we would otherwise owe. But, we’ve had a lot of income that hasn’t had any taxes removed (both hubs’ business income and my part-time contract based job do NOT have taxes removed from checks). Sooooo, pretty sure we’ll end up owing a pretty penny.  I’d like to get our taxes all figured out by mid-March so we have March and April to try to gather up our funds and hopefully pay the IRS in full so we don’t end up having to pay interest and penalties, etc. Worst case scenario, we could pay by the mid-April deadline on a credit card, which would buy us one extra month to pay off everything in full (since purchases made in April wouldn’t be due until May. Note: I NEVER carry a balance on my credit card!! Any purchases made on the card are paid 100% in full by the next month’s due date). That would allow us THREE months to spread the IRS tax bill over. With how high our income is, we should be able to scrape up the funds. But it also depends on how high our tax debt is. NO FUN!!!

Have you done your taxes yet for 2016? Any tips on finding a great CPA?