- The average US household financial stats
- What these stats say about your economy
- What to do to be better than average
- Motivation to not be financially average
- Quote of the lesson
My wife and I have had a lot of changes in our life this past year. We’ve added a new member to our family, spent some money updating our home, bought a new van, and got a raise in income.
Because of these life events we have been forced in the past year to look at some things in our finances and determine if we need to make any updates. This got me thinking on that others might have these same “problems” or “issues.”
So today we’re going to talk about things we need to review once a year to make sure our coverage or amount saved is enough. They include
- Emergency Fund-We recommend you have 3-6 months’ worth of expense saved after you become debt free. But the problem is that we originally setup an emergency and as the years go by our life changes. We might have more or less expenses now, then we did originally. Life has happened so we might want to consider whether we would want a six month or a three month emergency fund. After determining what your expenses are today you might learn that you have too much or too little in your emergency fund at the moment
- Life Insurance-Life insurance is not a fun topic to discuss, but make no mistake, it is an important one to discuss. Most advice says to have 8 to 12 times your income in life insurance. However what if your income has increased since you originally bought the term policy? Is your coverage still enough? If not you might have to buy an additional second policy or buy a whole new one to insure you have the right coverage.
- Car Insurance-How often do we just buy car insurance and then never compare whether or not we are paying too much? More often then we think. Go ahead and look at quotes on online and see if they can beat your current rates. In addition look to see if you want to lower or raise your deductible or if you need to add or drop certain coverage.
- Investing-Most of us invest in our 401(K)’s at work via a certain percentage each paycheck. However IRA’s are usually deposited by an amount each month. But if your income changes have you updated your IRA contributions to reflect that change?
- Giving-The first four issue make sense to you probably. But why would I need to review my giving you might ask? Because let’s be honest when was the last time we looked at our giving and honestly looked at if we should be doing more in that area.
Now I don’t think we need to review these each month, but annualy or every few years make it a priority to see if you can save some money , cut back, or increase your contributions in a certain area.
If you are like me, you like to do something once, set it up on auto draft and be done with it. But sometimes putting our finances on autopilot can hurt us and actually cost us money. So it’s good to take a minute every once a while and ensure you are still setup properly.
Today's quote of the lesson is brought to you by Audible.com
"80% of what we worry about doesn’t happen.” ~ Unknown
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