6 Reasons Why You Should Never Purchase an Extended Warranty (US News). Consumer Reports agrees that extended warranties are usually not worth the cost.  The one possible exception has to do with products made by Apple, which provides a relatively stingy manufacturer’s warranty.

What’s a Credit Score? Really (Main Street).  A comprehensive look at an important topic that many people find confusing.

Sometimes We Cheat On Our Partners About Money, Survey Shows (MSNBC).  Is it any wonder why money is such a common source of tension in relationships?  Unfortunately, as I’ve written before, the suggested remedies often only make matters worse.

Grave Robbing: 2.5 Million Dead People Get Their Identities Stolen Every Year (Time).  Some good advice for anyone caring for an elderly loved one.

Credit Counselors Answer Questions About Credit and Debt (USA TODAY).  Great guidance from people who spend their days helping those struggling with debt.

And from the blogosphere…

6 Ways to Lower the Cost of Owning a Smartphone (Money Crashers).  Do you let your kids play games on your phone?  Better check the settings.

How to Save Money, Time, and Reduce Stress While Moving (Gen X Finance).  A good week-by-week guide to easing some of the headaches (and wallet aches) of moving.

Contentment (The Simple Dollar).  A great reminder that wise money management is only partly a matter of action steps.  It’s also a matter of the heart.

Frugal Ways to Help Your Child Get the Best Education (Wise Bread).  Whatever schooling option you’ve chose for your kids, here are some great additional learning materials you might want to consider.  And the price is right.

Be a Budget Traveler in Your Own Town (Get Rich Slowly).  Some of the best vacation options may be right in your backyard, or just down the road.

Got a question or a response to any of the above?  Be sure to leave a comment.

As mentioned in the post, My Biggest Announcement in 7 Years, you’ll soon start seeing my articles via the Sound Mind Investing blog.

The Upside to Not Saving for Your Child’s College Education (MSNBC).  A new study finds that students who pay for at least a portion of their college costs do better than those whose parents foot the entire bill.

What Broke Athletes and Celebrities Can Teach Retirees (Forbes).  Being excellent in one field doesn’t necessarily translate into being excellent in another, like money management.

Why New College Grads Should Aim High (CNNMoney).  Encouragement to stick with your passions even in a tough job market.  There’s more on this topic below.

Cheap Ways to Improve Curb Appeal (Kiplinger).  Putting your house on the market this year, like we are?  Here are some inexpensive ways to make a good first impression.  And here are a few more ideas from Bankrate.com.

Should We Stop Referring to People as “Consumers”? (Time).  I’ve been encouraging all of us to rethink our financial identity for a long time.  Good to see more people championing the cause.

And from the blogosphere…

10 Alternative Online Job Search Sites (PT Money).  Job search sites for teens, seniors, and lots of people in between.

Borrow Stuff You’ll Only Use Once or Twice (The Simple Dollar).  Great advice.  Does everyone on the block really need to own a snow blower?  Sharing can save money and build community.

What’s Your 10-Point Manifesto? (The Happiness Project). I’ve done something similar with my financial philosophy, although I have 11 essentials for simple meaningful success. Do you have a manifesto or mission statement for your finances?  Your family?  Your business?

Study Shows Following Your Passion Leads to Greater Success (One Money Design).  It can be scary to pursue your passions instead of what seems practical.  This study may give you encouragement to venture out onto the skinny branches.

Clear Out That Clutter: 15 Places to Sell Your Stuff (Wise Bread).  Just in time for spring cleaning.

Got a question or a response to any of the above?  Be sure to leave a comment.

If you haven’t done so already, you can subscribe to this blog by clicking here.  Two or three times a week, you’ll receive ideas and encouragement for using money well.  Also, as announced in the post, My Biggest Announcement in 7 Years, you’ll soon start seeing my articles via the Sound Mind Investing blog.

How to Do Really Tricky Product Price Comparisons (USA TODAY).  Think you saw the same product for less in another store?  You probably did.  Here’s how to see if similar products are actually the same.

College Students Are Credit Card Dunces (Time).  The headline may sound harsh, but this article points to the importance of teaching kids about plastic before they leave home.

A New Way to Compare College Costs Online (NY Times).  Could price transparency be coming to a “product” with one of the highest inflation rates around?  Not quite, but this is a step in the right direction.

Is Your Body Language Costing You a Promotion? (MSNBC).  You show up on time and work hard, but has your slouch kept you on the slow track?

Parents: Stop Being So Awkward With Money (US News).  Home is a kid’s most influential classroom, but in too many homes money is a key topic that’s missing from the syllabus.

And from the blogosphere…

How to Find Vacation Homes to Rent Via Homeaway (Christian PF).   A great first-hand account of one blogger’s good experience renting someone else’s home.

Zenni Optical Review (Bargaineering).  An option for less expensive specs.

My Favorite Online Productivity Tools (One Money Design).  Efficiency can be a great money-saver and a great money-maker.

6 Awesome Reasons to Shop at Aldi (Wise Bread).  We’ve found several items at Aldi that are identical to those sold at Trader Joe’s, which is owned by Aldi.  The only difference is that Aldi sells them for less.

5 Ways to Save at Disneyland and Walt Disney Word Theme Parks (Money Crashers).  It still takes a big wallet to enjoy Disney’s “Small World,” but here are a few ways to save.

Got a question or a response to any of the above?  Be sure to leave a comment.

If you haven’t done so already, you can subscribe to this blog by clicking here.  Two or three times a week, you’ll receive ideas and encouragement for using money well.  Also, as announced in the post, My Biggest Announcement in 7 Years, you’ll soon start seeing my articles via the Sound Mind Investing blog.

Along the way, Jude and I have done our best to hold this work with open hands, eager to do what God asks of us and to have the greatest possible impact.

Last summer, we started sensing that God may be redirecting our path.  At the end of the year, clarity came in the form of some conversations with Sound Mind Investing (SMI) Executive Editor Mark Biller, which ultimately led to our decision to have me join SMI’s staff.  My first official day was April 2^nd.

Who Is Sound Mind Investing?

Sound Mind Investing was founded by Austin Pryor in 1990 to help Christians make biblically informed financial decisions that enable them to provide for their families and generously support God’s work.

The core work of Sound Mind Investing involves publishing a monthly investment newsletter that provides specific investment advice as well as articles about biblical money management, various practical personal finance topics, and Christian living.  SMI also publishes two blogs – a Member’s Blog for paid newsletter subscribers and a Visitor’s Blog.

Austin is also the author of The Sound Mind Investing Handbook, one of the best books I’ve read on biblical money management.  It has sold over 100,000 copies and is now in its fifth edition.

I have known about Austin for most of the 20-plus years that I’ve been involved in stewardship ministry, and I’ve always held him in the highest regard.

Austin was a good friend of the late Larry Burkett.  In fact, it was Larry who suggested that Austin begin publishing a financial newsletter for Christians.

I finally met Austin a couple of months ago when he invited Jude and me to come to Louisville for a visit.  We were inspired by our time with Austin and his wife, Susie.  The depth of their faith and their commitment to make a difference in other people’s lives were very obvious.  As we got to know them, along with other members of the staff team, we sensed that a far greater impact could be made by having me join SMI than I could have writing and speaking on my own.

I am very excited about and feel truly honored to be joining SMI.

What Will This Mean For MattAboutMoney.com?

I will continue posting new content on MattAboutMoney.com through the end of this month.  Then I plan to discontinue the blog, although all of the existing content will remain accessible probably for another couple of months.

Beginning May 1^st, I plan to import all Matt About Money subscribers into the subscription list for the Sound Mind Investing Visitor’s Blog where I will be writing articles similar to what I’ve been writing.  In addition, the SMI Visitor’s Blog will continue carrying articles from Austin, Mark Biller, and others.

You can easily opt out.  However, I believe you’ll find plenty of reasons to stick around and I hope you will.

Some Prayer Requests

The decision to join SMI will come with changes that go beyond my daily work.  We plan to move to Louisville as soon as we can sell our house in the Chicago area.

At first, we talked about having me work from home.  However, it quickly became clear that I needed to be in the office in order to build relationships with the rest of the team and have the greatest impact.

The idea of moving was the most challenging aspect of this decision.  We are blessed to live five doors away from Jude’s brother, his wife, and their two children.  Our nephew and niece are similar in age to our three children.  The idea of altering these relationships weighed heavily on us, leading to some sleepless nights, many tears, and a whole lot of prayer.

However, our commitment is to follow God’s call.  And while He doesn’t exactly send e-mails with explicit directions, we strongly sensed that the opportunity to join SMI is part of His plan, and not just for my work.  We trust that it is part of His plan for our family and our extended family as well.

Still, we would appreciate your prayers for this transition – that we would find a great church, great schools, a great neighborhood, and great relationships in Louisville, and that God would comfort all of us in the loss of no longer being able to do life with relatives who are also close friends.

Thank You

With all of the many voices clamoring for attention in our world, I consider it a great honor that you have chosen to subscribe to my blog.  And I would consider it an equal honor if you will stick with me as I make this transition to Sound Mind Investing.

Again, you won’t have to actually do anything in order for that to happen.  I will transfer you to the SMI Visitor’s Blog subscriber list at the end of this month.  So I’ll see you here through the end of this month, and I look forward to seeing you there starting on May 1^st.

“For I know the plans I have for you,” declares the LORD, “plans to prosper you and not to harm you, plans to give you hope and a future.” – Jeremiah 29:11

6 Myths About Saving for Retirement (Time).  At least now people’s expectations are starting to line up with reality.

The New American Household: 3 Generations, 1 Roof (CNNMoney).  A good trend, assuming you like your extended family!

Marriage Maintenance When Money is Tight (NY Times).  Good advice for sticking together during the “…or for poorer” seasons of life.

How to Slay Your Debt Demon: Two Families Share Secrets For Getting Rid of $100,000 (Forbes).  Mostly, it just takes a brutal commitment.

5 Ways to Save During Prom Season (US News).  Does your high schooler really need to take a limo to the dance?

And from the blogosphere…

Do You Need Umbrella Insurance? (Bargaineering).  You can get a lot of coverage for a little cash, but do you need it?

Co-Signing Loans for Others: What the Bible Says (Christian PF).  This one is crystal clear.

How I Cut My Electric Bill by 20% With a $30 Device (20 Something Finance).  It’s like a stethoscope for your wall sockets.

5 Ways to Change a Habit (Pick the Brain).  The author of this blog post literally wrote the book on building good habits.

The Power of the Cross (music video) Keith and Kristyn Getty.  This link has nothing to do with money (or does it?), but it has everything to do with this holy weekend.  Happy Easter everyone.

Got a question or a response to any of the above?  Be sure to leave a comment.

Who else would benefit from this post?  Why not forward a link to my site? And if you haven’t done so already, you can subscribe to this blog by clicking here.  Two or three times a week, you’ll receive ideas and encouragement for using money well.

Putting the principles into practice, including living generously, saving and investing wisely, and enjoying financial breathing space, requires smart spending.  And since we talked about how to Spend Smart on Housing last time, the focus of the final principle is to Spend Smart on Everything Else. 

Here are some of the most important ways to get the most for your money in the major spending categories.  As you read these ideas, keep in mind that they aren’t about obsessive frugality; they’re about spending smart.

Maintenance

Two keys here: First, make sure you actually budget some money for the maintenance and repair your home and car.  Not doing so is one of the most common budgeting mistakes people make.

Second, be willing to spend some money on preventative maintenance.  It’s a lot cheaper to pay for oil changes every 3,000 to 5,000 miles than it is to replace an engine.

Utilities

You’ve heard these tips before, but they work.  Switch to compact fluorescent or LED lights.  Consider going with just a cell phone and eliminating your landline.

Transportation

You’ll see on my Cash Flow Plan that a monthly vehicle payment is not listed under Transportation. An important key to financial success is not having a vehicle payment.

The biggest true transportation cost is insurance.  If you have an adequate emergency fund, consider raising your collision and comprehensive deductibles.  If your car is not worth very much, consider dropping them altogether and only carrying liability insurance.

Taxes

If you’re among the 80 percent of taxpayers that gets a refund each year, you’re in the unfortunate habit of giving Uncle Sam a no-interest loan.  I’m a big fan of generosity, but not toward an organization that can print its own money!

I’d rather see you estimate your taxes (go to the IRS web site and search for the withholding calculator) and have your withholding adjusted accordingly.

Food

You don’t have to be a super couponer to save at the grocery store, but a little couponing with the help of a site like Coupon Mom can go a long way toward helping you save on groceries.  There’s credible research showing that cherry picking is worth our time as well.

Clothing

You can get some great clothing at stores like Marshalls, T.J. Maxx, and especially Nordstrom Rack, although that last one is still a bit of a splurge.  It’s also amazing what people drop off at Goodwill and other second hand stores.

Gifts

A big key here is budgeting a monthly amount for gifts and then letting the money build up in a special savings account for the big gift-giving months like December.

Entertainment

With sites like Groupon and Restaurant.com, you never need to pay full price for entertainment.  Just make sure the availability of so many “deals” doesn’t tempt you to overspend.  Financial death by discount is not a good deal!

Health

At the risk of sounding parental, take care of yourself. It is absolutely the best way to save on healthcare costs.

For a long time, I aspired to be a consistent runner, and strangely enough I think I’ve actually become one. You don’t need to run to maintain good health, but you do need to move.  Walk on a regular basis or ride your bike.

Oh, and eating healthy is a good idea, too.  One of the many blessings my wife brings to our family is her insistence on healthy eating.  She has gone a long way toward taming, or at least counter-balancing, my sweet tooth.

Surf For Savings

For just about anything you need or want to buy these days, there are discounts to be had.  Many times you can even double or triple dip on discounts.

What are some of your favorite ways to spend smart?

Other posts in this series on the 11 principles that lead to simple, meaningful success:

• The Purpose of Money (Principle One: Know Who You Are)
• How to Recession-Proof Your Career (Principle Two: Earn Diligently)
• The Single Most Powerful Personal Finance Tool (Principle Three: Plan to Succeed)
• An Irrational Financial Act (Principle Four: Give Some Away)
• Common Questions About Biblical Generosity (a continuation of Principle Four)
• Pay Yourself Second (Principle Five: Put Some Away)
• The Debt Doctor Will See You Now (Principle Six: Ruthlessly Avoid Debt)
• Practical Steps for Getting Out of Debt (a continuation of Principle Six)
• The Essentials of Investing  (Principle Seven: Patiently Pursue Interest)
• How to Build and Maintain a Strong Credit Score (Principle Eight: Manage Your Number)
• Playing a Great Game of Financial Defense (Principle Nine: Build Walls of Protection)
• Housing: Getting Your Single Largest Expense Right (Principle Ten: Spend Smart on Housing)

Who else would benefit from this post?  Why not forward a link to my site? And if you haven’t done so already, you can subscribe to this blog by clicking here.  Two or three times a week, you’ll receive ideas and encouragement for using money well.

Secrets to Paying for College (MoneyCNN).  Helpful package of stories with ideas about how to save on tuition, room & board, and more.

30 Student Discounts You’ll Love (Main Street).  Being a poor college student does have some advantages, like not having to pay full price at lots of stores.

Red Flags: How to Spoil a Home Description (Bankrate.com).  You’ve de-cluttered and freshened up the paint.  Now make sure you don’t mess up the sale of your house with some poor word choices.

Which Tax Records to Keep and Which to Toss (Kiplinger’s).  Once you’re done with your taxes, it can be tempting to toss all the paperwork.  But there are some documents you need to keep.

Why You Should Launch a Side Gig Now (US News).  Diversification is more than just a good investing principle; it’s a good income principle as well.

And from the blogosphere…

What Happens If You Default on Federal Student Loans – Tips to Avoid It (Money Cashers).  Don’t mess with Uncle Sam.  He has his ways of getting paid.

Giving in Marriage: How to Develop Unity in Giving (Money Help For Christians).  Good thoughts on fostering oneness in generosity.

5 Important Money Lessons Your Kids Need (Cash Money Life).  A good reminder that one of the toughest – yet most helpful – words a parent can say is “no.”

Save Money Gardening: 6 Tips for Growing Your Own Food (Christian PF).  Helpful ideas, even if you don’t have your own chicken coop in the backyard.

Focus on Quality Brands That Hold Up Over Time (The Simple Dollar).  Yet another reason why I think frugality can go too far.  It often pays to spend more for quality.

Got a question or a response to any of the above?  Be sure to leave a comment.

Who else would benefit from this post?  Why not forward a link to my site? And if you haven’t done so already, you can subscribe to this blog by clicking here.  Two or three times a week, you’ll receive ideas and encouragement for using money well.

Here’s how to follow the 10^th of my 11 principles for simple, meaningful success: Spend Smart on Housing.

How Much of a Down Payment Should I Make?

It used to be normal for people to make a down payment of at least 20 percent.  That became anything but normal during the run-up to the housing bubble.  Now, it’s coming back into vogue, and I think that’s a good thing.

Putting 20 percent down demonstrates the discipline to save.  Plus, it prevents you from having to pay private mortgage insurance.

How Much Can I Afford to Pay Each Month?

Lenders typically tell people they can afford to devote 28 percent of their monthly gross income to the combination of their mortgage, property taxes, and homeowner’s insurance.  When you include other debts, such as credit card balances, student loans, and vehicles loans, they want all of those monthly payments plus housing to total no more than 36 to 40 percent of your monthly gross income, depending on the lender.

I believe it’s best to spend less.  As I developed Recommended Spending Guidelines and Recommended Housing Guidelines (found at the same link) for households across nine different incomes and four different household sizes, I found that the ideal is to spend no more than 25 percent of your monthly gross income on housing (mortgage, taxes, and insurance), and have no other debt.

In some especially high-cost parts of the country, you may need to stretch that to 30 percent, but that means you’ll have to spend less than my recommended amounts in other categories.

Should I Base the Payment on One Income or Two?

Here’s the kicker.  It’s best to stay within that 25 percent guideline on one income.

What?  That’s impossible, right?  Well, as I like to say in workshops, the common approach to money in our culture is to save too little, carry too much debt, live with too much financial stress, and fight about money too often with the people we love.  Do what’s uncommon and you’ll be able to enjoy uncommon financial success and peace of mind.

Basing housing costs on one income is especially important for young two-income couples that want to have kids one day.  If you want the freedom to have one person step out of the paid workforce while raising those kids, it’s essential.

But it’s important for others as well.  Buying a house that requires two incomes is risky. What happens if one person loses their job?

What If I’m Spending Too Much on Housing?

Please don’t shoot the messenger, but if you’re spending much more than my recommended amounts on housing, your finances are probably going to be a challenge.  It’s going to seem impossible to be generous or to find the money to save or invest.  In that case, you should consider something radical, like moving to a more affordable house.

I know – it sounds crazy, completely unrealistic.  Selling a house, especially in this economy, can be tough.  The whole process of moving is time consuming and disruptive.  But I’ve met people who have done exactly that.  They were living in houses they realized they could not afford and they moved.

One couple put their house up for sale at a time when other homes in their community were sitting on the market for over a year, and yet theirs sold within 30 days and for nearly the full asking price.  The other sold their home and then lived in the basement of the home of some friends.  They stayed there for three years as they saved up enough money for a healthy down payment on a house they could truly afford.

Both couples took tough, counter-cultural action, and they got to a better place financially, emotionally, relationally, and in other ways.

For most people, housing is the expense category that can make you or break you.  Getting it right is essential for those who want to experience uncommon financial success.

What are your thoughts on my housing recommendations?  Please leave a comment below.

Other posts in this series on the 11 principles that lead to simple, meaningful success:

• The Purpose of Money (Principle One: Know Who You Are)
• How to Recession-Proof Your Career (Principle Two: Earn Diligently)
• The Single Most Powerful Personal Finance Tool (Principle Three: Plan to Succeed)
• An Irrational Financial Act (Principle Four: Give Some Away)
• Common Questions About Biblical Generosity (a continuation of Principle Four)
• Pay Yourself Second (Principle Five: Put Some Away)
• The Debt Doctor Will See You Now (Principle Six: Ruthlessly Avoid Debt)
• Practical Steps for Getting Out of Debt (a continuation of Principle Six)
• The Essentials of Investing  (Principle Seven: Patiently Pursue Interest)
• How to Build and Maintain a Strong Credit Score (Principle Eight: Manage Your Number)
• Playing a Great Game of Financial Defense (Principle Nine: Build Walls of Protection)

Who else would benefit from this post?  Why not forward a link to my site? And if you haven’t done so already, you can subscribe to this blog by clicking here.  Two or three times a week, you’ll receive ideas and encouragement for using money well.

How I Got Hit With An Overdraft Fee After Opting Out of Overdraft Protection (Main Street).  As I’ve written before, I believe it’s best to opt out of overdraft protection.  But this article shows just how cautious you need to be with this confusing service.

Solutions to 9 Puzzling Financial Frustrations (Time).  From flex spending account paperwork overload to having too many bills due at once, here’s your action plan.

Employers Ask Job Seekers For Facebook Passwords (MSNBC).  Think your Facebook profile is private?  If you’re in the market for a new job, maybe not.

6 Financial Nightmare Vacations (Bankrate).  Some cautionary tales that may help your next vacation go well.

Lost Cell Phones Added Up Fast In 2011 (USA TODAY).  Did you contribute to the $30 billion in lost mobile phones last year?  Here’s how to hang onto your phone this year.

And from the blogosphere…

9 Simple Ways to Stop Impulse Buying (Wise Bread).  Retailers seem to know our impulses better than we do.  Here’s how to level the playing field.

Living in a Small House: Does Size Matter? (The Digerati Life).  The examples may be extreme, but this article raises a good question about a common assumption that the bigger the house the better.  There are some more good thoughts on this subject in a great book I’m reading right now called All the Money in the World.

The Dangers of Motivating Kids Through An Allowance (Consumerism Commentary).  The perennial parenting debate continues – to tie allowances to chores or not?  There’s a good discussion in the comments section of this post.

The Definitive Guide: 22 Ways to Get a Discount on Anything (Part 3) (Squawkfox).  Getting a deal often starts with the realization that the sticker price isn’t a fixed price.  Here are lots of ways to take the next step.

Are You Chasing Your Dream or Someone Else’s? (Wealth Informatics).  A great post that’ll make you question some assumptions you may not even realize you have.

Got a question or a response to any of the above?  Be sure to leave a comment.

Who else would benefit from this post?  Why not forward a link to my site? And if you haven’t done so already, you can subscribe to this blog by clicking here.  Two or three times a week, you’ll receive ideas and encouragement for using money well.

Let’s look at some of the most important types of insurance so you can determine how to get the right coverage at the right price.

Life Insurance

Do you need life insurance? The best way to answer that question is to consider whether anyone would suffer financially if you died.  Oftentimes, a couple will buy life insurance when they have their first child.  But there are some other circumstances that may prompt a need for life insurance as well.

If you decide to buy a policy, you’ll need to decide how much life insurance to buy.

Next you’ll need to decide what type of life insurance to buy.  The two main types are term and permanent.

Term life insurance is pure insurance, covers a temporary need, and is the least expensive type of life insurance. By “pure insurance,” I mean you pay for the death benefit and nothing more. Term insurance covers you for a specific period of time, typically ranging from one to thirty years, hence the name term.

Couples often choose term insurance in order to protect against their pre-mature deaths while their kids are younger than eighteen or perhaps until they are done with college. They assume that by that point life insurance won’t be needed any more; they will have been diligent in saving and investing all those years and will have enough assets to provide for the surviving spouse. This philosophy is usually described as “buy term and invest the difference.” You just need to make sure you don’t buy term and spend the difference!

If you go the term route, it’s generally best to choose a level premium policy, which means you will pay the same amount every year for the term of the policy. Also, ask whether the policy is convertible. Convertible policies give you the option to switch the policy to a permanent policy without having the take a medical test.

Permanent life insurance, also called whole life, gives you a death benefit and a savings or investment account, provides permanent coverage (assuming you keep up with the premiums), and is much more expensive than term life insurance. Whereas a term policy may cost you roughly $15 to $30 per month per $100,000 of death benefit, a permanent life policy could cost $150 to $300 per month.

Young couples with kids usually need a lot of insurance and have many other expenses. For those reasons, term is often the most viable way to get the coverage you need at a price you can afford. But there are some circumstances where a permanent life insurance policy may make sense.

Medical Insurance

One way to save on health insurance is to opt for your company’s flexible savings account (FSA), if available. With such accounts, you pay various out-of-pocket medical expenses with pre-tax dollars. Many expenses qualify, including co-pays, deductibles, and prescription eyeglasses. But flexible spending account money not used by the end of the year is lost (at some companies there is a short grace period into the next year), so you need to make a good estimate about how much out-of-pocket expense you’re likely to have over the coming year.

Another option may be a health savings account (HSA). Used in conjunction with a high-deductible health insurance plan, this money is saved pre-tax, just like FSA money. However, this money can be carried over from year to year and you can set aside more money in an HSA than you can an FSA.

Disability Insurance

Your ability to earn income is one of your most valuable assets. According to the non-profit Life and Health Insurance Foundation for Education, one in seven workers can expect to be disabled for five or more years before retirement. That’s why disability insurance is so important, yet less than half of employed adults have disability insurance.

The least expensive way to get disability insurance is usually to purchase it through your employer. Should you become disabled, workplace policies typically replace 50 to 60 percent of your income up to a specified limit and until a certain age.  If you don’t have coverage through your employer, purchase a policy on your own.

You’ll find more information about disability insurance, including a needs calculator, on the Life and Health Insurance Foundation for Education’s web site.

Homeowner’s/Renter’s Insurance

If you own your own home, you need homeowner’s insurance to protect your home and your stuff.  Assuming you already have a policy, double-check to make sure you have the right homeowner’s insurance coverage.  If you rent, you’ll need renter’s insurance.

Vehicle Insurance

One more type of essential coverage is vehicle insurance.  A great way to save on this coverage is to manage your collision and comprehensive deductibles.  If you have an adequate emergency fund, you can afford to raise your deductibles, which will lower your premiums.  You just need to be comfortable with the idea that you are responsible for paying the amount of the deductible if you have a claim.

One final note about homeowner’s/renter’s and vehicle insurance is whether to go with a low-cost online provider or to work with a local agent.  It can be tempting to go the absolute lowest-cost route, but I prefer to work with local agents. When I’ve had a claim, there’s something very comforting about being on a first-name basis with an agent.

What other ideas do you have for getting the best insurance coverage for the best price?  Let me know in the comments section.

Other posts in this series on the 11 principles that lead to simple, meaningful success:

• The Purpose of Money (Principle One: Know Who You Are)
• How to Recession-Proof Your Career (Principle Two: Earn Diligently)
• The Single Most Powerful Personal Finance Tool (Principle Three: Plan to Succeed)
• An Irrational Financial Act (Principle Four: Give Some Away)
• Common Questions About Biblical Generosity (a continuation of Principle Four)
• Pay Yourself Second (Principle Five: Put Some Away)
• The Debt Doctor Will See You Now (Principle Six: Ruthlessly Avoid Debt)
• Practical Steps for Getting Out of Debt (a continuation of Principle Six)
• The Essentials of Investing  (Principle Seven: Patiently Pursue Interest)
• How to Build and Maintain a Strong Credit Score (Principle Eight: Manage Your Number)

Who else would benefit from this post?  Why not forward a link to my site? And if you haven’t done so already, you can subscribe to this blog by clicking here.  Two or three times a week, you’ll receive ideas and encouragement for using money well.