Financial Fitness Challenge October—Assess Your Insurance Coverage/ October 1st, 2007
So many financial decisions hang on "what if." What if you lose your job? What if you get a big raise? What if you become seriously ill? What if you win the lottery? What if you lose the overtime you've come to rely on? All this year, the Financial Fitness Challenge has tried to help you be prepared no matter "what if." Insurance is a broad personal finance category that's all about "what if":
- What if your roof sustains serious hail damage?
- What if a careless driver broadsides your car?
- What if you die, leaving a young family?
- What if a burglar makes off with a special heirloom?
Monthly maintenanceThis month's basic maintenance task harks back to April's Challenge, when we set up sunny and rainy day funds. Tally all your insurance policy deductibles and then see if your rainy day fund could handle several deductible hits. Call it your Murphy's Law fund—assume that what can go wrong will go wrong. Some insurers are switching to a deductible based on a percentage of the value of your home—usually between 1% and 5%, and maybe higher in earthquake zones. This replaces the flat-dollar deductible where you pay the first $500 or $1,000 of damages. If your insurer uses the percentage deductible, keep in mind that your deductible will increase as your home value appreciates. And there's another insurance-related use for your rainy day fund—to regularly set aside small amounts all year so that you can pay your insurance premiums when they come due. The Budget Blueprint calculator can help you figure those amounts. That's the beauty of building your rainy day fund. Because you're using direct deposit and automatic savings transfers to continually build savings, you're prepared for whatever comes your way.
Together We're BetterInternational Credit Union Day, is a big deal for credit unions and their 172 million members all around the world. That's when you and your credit union join more than 46,000 credit unions in 97 countries "to celebrate our accomplished history, our shared values, and our bright future," in the words of this year's organizers. This year's catchphrase, Together We're Better, expresses the benefits accruing to all credit union member-owners. Congratulations, everyone. ST
Susan Tiffany, CCUFC