Safety is also a word often used to imply security. And many times we feel secure because there is no information to tell us otherwise. That doesn’t mean that we can’t be more secure. Lately, I’ve been thinking about steps and actions that might improve my security, or my safety when it comes to finances. Some are the ones I have been using myself, and others are only more recently coming to mind.

1. Account security. Online banking is great. But how secure is your account? Do you change passwords regularly? Do you use easy to determine passwords? Do you use a common password for most of your accounts or logins? I have had some sort of palm or smartphone device for years, and when I lost one in an airport, I had to set about changing all my passwords, because there was an outside chance someone could crack my password file, and thus get all my passwords. I realized then how weak my plan was. Now I still keep a file on my phone, but it has a password that you couldn’t guess before the file auto-destructs. And all my financial accounts not only have tough passwords, but they have different user names.  Overall, I feel pretty secure.
2. Auto financing. Most people understand that they typical new car loses value when you drive it off the lot. Depending on how much you put down on a car, you may owe more on the car than its re-sale value for the first  two to three years of ownership.  I have a Ford Focus philosophy about cars. What is the least I can spend on a car that is sufficient for my commuting and traveling needs? Keep it maintained, and plan to drive it for 10 years (or longer), and you end of with a pretty good value. I can afford a much nicer car, at least in terms of current cash flow, but every extra dollar I spend now is one I am not saving for retirement.
3. Every extra dollar I spend now is one I am not saving for retirement. Yeah, I know I just said that, but when I consider the implications on my various monthly services – internet, cable, phone, wireless, lawn care, heat, electricity, water, trash removal – I am sure that I could pare those down a bit, and maybe work one or two months less than if I spend at the level I do today.  Spending less now equals more financial security – if I do the right thing with my saved money.
4. Consider the size of your house and mortgage. For me, these two have been increasing through 6 moves over many years. Thirty years of home ownership, and I currently have 24 years left on my mortgage. It doesn’t have to be that way. Its an old paradigm. My wife hit me with this one last week with one question: Why did we buy the house we live in today? I knew the answers, and every one of those answers no longer matter. We have fewer people in the house, we have no interest in the schools, and we have more rooms than we need. Yes, I can continue to live here and pay the mortgage and build equity, or we can find a smaller house that fits our current need, go to a mortgage that is half the size of the current one, and be paid off in 7 years. Not as much equity, but now I can save the money I was paying each month, and not one dollar of that goes to someone’s interest earnings on the money they loaned me.
5. Diversify. We all hear this, and it makes sense, but you need to pay attention to it carefully. Not all savings in one bank, not all investments in one stock. Life expectancy is increasing, spending power of dollars weakens over time, and social security just might not be accurately named – at least the “security” part.
6. Prepare for college, or raise your children to know exactly how they can get college paid for. Here in Georgia, my youngest is benefiting from the lottery in the form of a college scholarship. That means he can use what he and we saved for graduate school, which he will likely consider. There are all kinds of approaches today from 529 plans to pre-paid tuition. Understand the options, and don’t wait too long to decide what your approach as a parent will be.
7. Kick the gadget habit. “I don’t need an iPad, I don’t need an iPad…..”

There are many other important purchases and income opportunities that help define our financial safety. You are in control, every day. Do you have a particularly smart strategy for improving your financial security and safety?

Thanks, and let’s be careful out there.

Anna at abdpbt is responsible for the effort to Fight Listless Mondays. Find other list links on her blog. Her lists and the others linked there always give you something to think about, and may even make you smile!

It became such an important issue for me that later in my career, when I had a team of about 80 people, I didn’t let a meeting go by without some discussion about safety and the importance of challenging each other over potentially unsafe behavior. One day I began talking about the cost of an accident and one of my people told me he thought that maybe that’s what I was concerned about, saving money. I replied that regardless of what you think of my intent, I offer every employee the opportunity to stop doing work they consider unsafe until we can mutually resolve the issue. How can that be a bad thing?

So at the risk of being all about the money, I recognize that sometimes saving a few bucks is a good motivator for folks. Here are a few ways in which safety can save you money!

1. Practicing good methods around the house with knives, ladders, electricity and stairs can almost guarantee a much smaller chance of heading to the emergency room for a related accident. And under no current or emerging health plan would that be an economical chance to take.
2. Keeping things clean and clutter free not only enhances the value of your home, but reduces the chance of injury and again, those same ER visits.
3. Speaking of clutter, those partially used gallons of paint from all the projects you’ve done over the years could be a problem waiting to happen. Every year or so, someone in your area is having a free disposal day for items just like that. No cost to get rid of them, and no extra fuel for fire or explosion.
4. You know that wobbly old step ladder you got from your grandparents’ house when your father helped them move to a smaller place? It might be the most expensive free thing you have in your house. Throw it away and buy a new one. Yes, this is going to cost you, but think of it as cost avoidance.
5. Have a pest problem in your home? Hire a professional to take care of it. Again, this may sound like a cost, but when you start trying to handle this yourself you are starting by treating the symptom. You may not know where the nest or hive or burrow is. I watched a neighbor go after a hornet’s nest with a power washer one summer evening. It was hanging from a second story eave, just out of reach of the stream, so he imrpovised methods of positioning himself higher. He didn’t get stung at all, but he came so close to falling from the fence he was perched on and it would not have been a minor injury. He was lucky.
6. I know you’ve heard this before, but check tire wear and inflation on all your vehicles regularly. Change those tires before they fail. Don’t wait until the day after the big rain storm when you lost control of the vehicle, do it now.

Safety, like quality, is free. Every dollar spent, along with the right discipline, will save you much more in the long run.

Thanks, and let’s be careful out there!

Anna at abdpbt is responsible for the effort to Fight Listless Mondays. Find other list links on her blog. Her lists and the others linked there always give you something to think about, and may even make you smile!

But what insurance should you carry? How much and for what incidents? There are all kinds of sites that will help you understand the ins and outs, and why you should or should not have a particular insurance. And they don’t all agree on very much. There are some that will tell you that for life insurance, only choose term insurance. Whole life policies are a bad investment.  That may be true, depending on your particular circumstances, how you are saving, and how much monthly cash you have available for this purpose.

Just as important is to routinely look at your insurance in light of changes to your pay, your lifestyle, the economy, and even your outlook.  Here are some situations where you might want to consider re-evaluating your insurance purchases.

1. You have established a good emergency fund. Whether or not you are a Dave Ramsey fan, you have tried to save into a rainy day fund. You have likely encountered need for extra cash from time to time. A household emergency fund is for addressing some of the real life things that happen. Your refrigerator fails and you need to buy a new one. You have an accident and have to pay the deductible on your auto insurance. If your emergency fund is getting rich enough, you should consider raising the deductibles on your auto and homeowners policies. You can use the reduction in premiums to increase what you are putting in the fund!
2. A change in any family member’s life status. Sometimes a change means they are no longer covered on your employer-supplied health care plan. My son is only covered until age 23, and only if he remains a full time student in the meantime. We will go off family coverage at that point, but he will have to have his own coverage (or not – but that’s just crazy as he is diabetic).
3. Your cars are getting older. If you carry collision insurance, there comes a time when the cost of the insurance is just not worth it. The insurance company will total the car in a situation like this. Cancel the collision and put the money saved in the new car fund.
4. Age. As my family grows older, I need less life insurance. It’s time to reduce my term coverage as my youngest becomes self-sufficient.
5. Real estate values. Do you have replacement coverage? Does the replacement value automatically escalate each year? Is it enough or are you possibly over-insured? This might be worth looking at.
6. Accumulation of “stuff”. Have you documented the valuables in the house, including jewelry and electronics? Laptops, plasma screen TVs, and high value electronics may all be in the house when the fire hits. Is your coverage good enough?
7. Because you have choices. Why do you think Geico has those creepy eyes looking at you? And when your friendly HR rep reminds you that it is time for annual enrollment, do you look at the new choices or just the bottom line difference for same coverage? Change is hard sometimes, but there may be a value in considering a move from the PPO to the HMO. Of course YMMV.

What other reasons have you had to reconsider your insurance purchase? Please feel free to share you wisdom in the comments.

Thanks, and let’s be careful out there.

Anna at abdpbt is responsible for the effort to Fight Listless Mondays. Find other list links on her blog. Her lists and the others linked there always give you something to think about, and may even make you smile!