DIY, Financial Wellness at Work, Chapter 24

 

Photo Credit: Benold Financial Planning

Recently, I set up a Slack channel at work described thusly:

"An information and learning commons to jointly develop the financial acumen we fear we don't have." 

 I did it because the issue of not knowing where to start had emerged as a theme in both random discussions and on our annual employee survey.  After a lifetime spent managing the financial affairs of small businesses and nonprofits, I figured I've learned enough to lead self-help discussions. I don't think of myself as a financial expert, just a knowledgeable amateur.

Thursday, June 2, 2022 - To Buy or Not to Buy? That is the Question.

Today's rumination: Pet Insurance. Before you roll your eyes and scroll away, consider this: If you have a pet, you  never want to be in the position of having to resort to euthanasia because you can't afford a treatment that could cure what ails her/him. Cold and gruesome? Yes. But also true.I've owned dogs all my adult life. They are always rescues, they are usually hearty--and, over time--they all get old. Sparks, our current furry family member, is 12 now...we got him when he was 9 months old. He's the first animal on which I ever had pet insurance. I always considered pet insurance kind of silly--until my last dog, Jenny, a raggedy bull mastiff, had a difficult to remove cancer tumor. The operation was expensive and it came at a bad time in our financial life.After anguishing for a couple of days, I bit the bullet and went ahead with the surgery because, as our wonderful vet said, "Removing this tumor is beyond my skill, but I can recommend someone. If you don't get her the operation, the cancer will spread and she will die. She's young, healthy, and has a lot of years left.  It's a hard decision, I know, and we will support you whichever way you decide to go."He was right.She lived another 5 or 7 years after the surgery; she had very few health issues until the night before she died. Hard as it was to pay the bill for that operation, I never regretted the decision. (edited) 

3:32

Enter Sparks.A while after we got him, my employer (led by me) negotiated a 10% discount on voluntary, employee-paid pet insurance. I signed Sparks up--he is another singularly healthy animal--for accident and illness insurance.  I passed on routine health maintenance coverage. I picked a deductible  and a level of coverage I could afford and wondered if I was losing my grip in deciding to buy such a frippery.Time has proven the wisdom of that decision.

Today's rumination: Pet Insurance. 

Before you roll your eyes and scroll away, consider this: If you have a pet, you never want to be in the position of having to resort to euthanasia because you can't afford a treatment that could cure what ails her/him. 

Cold and gruesome? Yes. But also true.

I've owned dogs all my adult life. They are always rescues, they are usually hearty--and, over time, they all get old. Sparks, our current furry family member, is 12 now. We got him when he was just 9 months old. He's the first animal on which I have ever had pet insurance.

 I always considered pet insurance kind of silly--until my last dog, Jenny, a raggedy bull mastiff, had a difficult-to-remove malignant tumor. The operation was expensive and it came at a bad time in our financial life. 

After anguishing for a couple of days, I bit the bullet and went ahead with the surgery because our wonderful vet said, "Removing this cancer is beyond my skill, but I can recommend someone. If you don't remove it, the cancer will spread and Jenny will die. She's young, healthy, and has a lot of years left. It's a hard decision, I know... we will support you whichever way you decide to go." 

Doctor Richter was right.

Jenny lived another 5 or 7 years after the surgery. She had very few health issues. Hard as it was to pay the bill for that operation, I never regretted the decision. 

 Enter Sparks.

Several years after he joined the family, my employer (led by me) negotiated a 10% discount on voluntary, employee-paid pet insurance. I enrolled Sparks, another singularly healthy animal, for accident and illness insurance. I passed on routine health maintenance coverage. I picked a deductible and a benefit level I could afford. Privately, I wondered if I was losing my grip in deciding to buy such a frippery.

Time has proven the wisdom of that decision.

Sparks is slowing down now. Just like the rest of us, he's had some health challenges. His issues have been few--but one was a big ticket item, a cancerous mass that needed to be removed. What a different experience it was to make that decision!

Insurance paid 80% of the cost.

That one big health issue occurred a year after I bought the policy. It resulted in my being reimbursed an amount equal to half of all of the premiums I've paid over the life of the policy (5 years).

In the final analysis, insurance--any kind of insurance--is a risk management tool. The choices that you face as your family risk manager are the same as those faced by business managers. You can Accept the Risk, Reduce the Risk, Transfer the Risk, or Avoid the Risk. Buying insurance is one way to transfer the risk--or at least a portion of it. Looking at it from this perspective, pet insurance is no different from car insurance, life insurance, or property insurance. Each of them allows you to offload some amount of risk to a third party.

It's no fun paying premiums year after  year. But when you need it, the relief that the coverage provides--both to your pocketbook and to your heartstrings--is immeasurable. I thought about that when the vet told us yesterday that Sparks has arthritis. 

The good news? Regular medication could help him stay mobile and active. The other good news? Insurance will cover 80% of the cost.

Here are some pro/con lists for anyone who might want to consider pet insurance as one way to remove the financial element of a life-changing decision with regard to a fur friend: 

• St Georges University
•  Real Simple
  
•  Financial Gym
•  Marketwatch
  

For those ready to take the plunge, here are some rankings of providers: 

• Forbes Advisor, 2022
• U.S. News and World Report 
• Money 

DIY - Financial Wellness At Work, Chapter 4

 

Photo Credit: Benold Financial Planning

Recently, I set up a Slack channel at work described thusly:

"An information and learning commons to jointly develop the financial acumen we fear we don't have." 

 I did it because the issue of not knowing where to start had emerged as a theme in both random discussions and on our annual employee survey.  After a lifetime spent managing the financial affairs of small businesses and nonprofits, I figured I've learned enough to lead self-help discussions. I don't think of myself as a financial expert, just a knowledgeable amateur.

Monday, March 7, 2022 - Rainy Day and Emergency Funds

 Today's subject is actually a post I meant to write last week. I've been doom-scrolling, reading, and listening to the news non-stop since Russia invaded the Ukraine on February 24. By comparison, financial wellness seemed like a pretty low priority. But, as F. Scott Fitzgerald famously said, “The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function. One should, for example, be able to see that things are hopeless yet be determined to make them otherwise.” 

Photo Credit: First Republic Bank

 

So...let's talk about rainy day funds.

First the basics: What is a rainy day fund? Is it the same as an emergency fund?  Surprisingly, it is not. Here is a helpful dive into the definitions, similarities, and differences--delivered in the British accent I don't have. More concise, if considerably less chipper, is the  nuts and bolts overview provided by First Republic.  

 

Enlightening (for me, anyway) was the idea that you should start your rainy day fund before your emergency fund. I would have suggested the opposite. Unsurprising is this advice: Develop clear lines as to what each can be used for and don't deviate.

 

The first rule of thumb for either/both is to establish a separate holding account that is not commingled with your regular operating cash. Otherwise, it's just extra money in your checking account that will dribble away over time. But...once the amount you've set aside reaches any kind of critical mass, shouldn't you be thinking about something other than the bottom of the sock drawer? Yes, you should.

 

 Ann Carns put out a  good overview of the various options and how the imminent rise in interest rates might affect one's thinking about them. From her I learned about  the "I (for inflation) bond. These savings bonds pay interest that combines a base rate that’s fixed for the life of the bond with a variable rate, based on inflation, that resets every six months. Currently, the bonds are paying an overall rate of 7.12 percent." Because they are issued by the U.S. Treasury, they are backed by the full faith and credit of the government.

 

 In troubled times, safety and  how to create it are top of mind for everyone. 

 

I was talking with a friend recently about financial safety nets--how we create them, what the risks of  different vehicles and strategies are (there are always risks), and what steps each of us has taken, wished we had taken, or are afraid to take. One thing we talked about--because we are both fortunate enough to own our homes (or portions of them)--was the advantages of having a Home Equity Line of Credit (HELOC) as a part of our safety net. Thinking about that brought me to this round up of pros and cons. 

 

Should a person, company, or nonprofit count the availability of a line of credit as part of its financial safety net? For me, the answer--both professionally and personally--is yes. In neither case do I ever wish to use the credit, but in each of them, I sleep easier knowing I have it. Perhaps that is because I graduated college in 1974, the same year that the Equal Credit Opportunity Act passed. 

Photo Credit: PYMNTS.com

 

Before that moment, women were routinely denied credit, credit cards, and loans...even if they had had all of the above before they were widowed or divorced.  If a single woman had a bank account, it was routinely joined with her husband's when she married. Until the Supreme Court handed down its decision in Kirchberg v. Feenstra in 1981, husbands were permitted to take out second mortgages on jointly owned homes without even telling their wives. When the Supreme Court ruled on Kirchberg, it struck down the Louisiana Head and Master law. That law gave sole control of marital property to the husband and indicated the husband's dominance over the wife in the marriage.

 

Who led the charge for equal access to credit? A young attorney named Ruth Bader Ginsburg.