There’s a science to saving money. While financial planning isn’t necessarily fun, budgeting is a clear-cut way to find some of those pennies you didn’t think you had.
With a sound budget and a true commitment to hunting down the best deals out there, anyone – including you – can put a little extra cash aside.
And that’s great, because there are some really important investments you need to make.
Do you have a life insurance plan you can live with?
A little patience can often lead you to a better deal on your purchases than simply buying the first thing you see. Here’s a tip for the grocery store – never buy anything from an end cap.
Saving money when it comes to life insurance, however, can be a little trickier. By definition, life insurance exists to cover expenses at an unknown moment in the future, involving circumstances you may not be able to imagine and – most troubling of all – you won’t even be there. Planning your life insurance coverage without the right tools is like playing The Price is Right with your family’s long-term economic security.
How do I figure out how much life insurance coverage I need?
How much life insurance do you need? What type of policy should you buy? There are a lot of factors you need to consider, like:
- Think about the income your family would lose if you or your partner weren’t around anymore. How much do you make in a year? How much will you be making five, 10 or 20 years from now? What would you family need if that was removed from their budget?
- You also need to do the math on all of the expenses your family has, and will have. And here’s the bad news – even if you sat at your kitchen table for a couple of hours after the kids go to bed every night this week, plugging every expense you can imagine into a spreadsheet, you’re almost certainly going to leave out something.Budgeting for a single year is hard enough with all the uncertainties that come with military life – budgeting for a lifetime is just about impossible.
- Let’s face it – it’s unpleasant to plan for a future that doesn’t include you or your partner. How are you supposed to think about everything your family will need when you’re also thinking about your own mortality? Or life without your partner? It’s emotional, it’s difficult and it’s genuinely sad (we warned this would be a post about not-so-fun financial planning!).And to make matters worse, there are real-life consequences for your family if you decide that you’d rather just not think about it and fail to make a plan.
Life insurance: It’s not all bad news!
Now that we’re all depressed, here is the bright spot: there are tools that ensure you consider every significant expense in your family’s future.
Look up life insurance calculators online to find tools that many life insurance providers offer. It’s important to find one that is geared toward military life because programs like the Survivor Benefit Plan (SBP) and other sources of income and benefits are unique to the Armed Forces.
Calculators from a trusted source like AAFMAA, for example, provide a template for all sources of income for a service member. You’ll also see the common expenses most military families have to consider.
AAFMAA’s life insurance calculator also shows general financial considerations and helps guarantee you don’t undervalue your future earnings.
When it comes down to it, life insurance is financial peace of mind.
It feels good to know how much income your family would need to go on without you. Having that number in mind makes shopping for a life insurance policy easier. You’ll see that purchasing a million-dollar policy, for example, is not as unreasonable as you may once have thought.
Financial planning is all about knowing what you need. Sure, buying life insurance isn’t as much fun as shopping for dirt bikes – but don’t let that lead you to make hasty decisions when it comes to protecting your family.
Remember: a life insurance calculator will help you identify the right life insurance policy.
You’ll have peace of mind knowing that your family is provided for in case something happens to you.
Every family’s financial needs are different, so use a calculator that allows for enough flexibility to let make the most realistic best financial decisions.
Got it? Good. Now go take the kids out for some ice cream. You deserve some fun!
This post was provided by AAFMAA. AAFMAA is a non-profit, membership association that supports the American Armed Forces community with affordable insurance and widow survivor assistance services. AAFMAA also created SpouseLink, a website for Military Spouses that was designed to support, inform and inspire users with a variety of content–anything from pop culture to important Military information.
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