Spring always brings a new wave of motivation! The great hibernation is almost over as people become more active. Maybe winter derailed your New Year’s resolutions or you weren’t as financially prepared as you wanted to be when it came to taxes, insurance, etc… Financial fitness is something you should consider as you dust off your shorts and head into Spring.
What does it mean to be financially fit?
Being financially fit means being prepared now and actively practicing good decision-making that will help you build a stronger financial future.
It isn’t easy to save for things or consider your future if you lack your ideal financial freedom. The key is, the smallest good decisions can make the greatest impacts in the long run. Just like working out a little every week will reap bigger muscles… the important part is to stay consistent. It isn’t easy, but it is worth it.
Why is financial fitness important?
Think of being financially fit as helping you be prepared for uncertainties or risks – when we are healthier, we lessen our risk of illness but there are always unforeseen accidents that may put our health at risk – even though you think you are healthy!
Saving is one of the best first steps towards fitness, think of it as your cardio that helps in the long run. Being able to save is easier said than done, but even the smallest amounts add up. There is more to saving and preparing for your fitness that many people overlook or are simply unaware of. When it comes to creating a financial fitness routine, it is time to talk about insurance.
Insurance at the core of protection
Have you ever heard someone complain about how they were saving too much money? Most likely, no. Insurance is a savings investment that will help you out, should you need it. Think of it as the weights or weight-lifting machines at the gym: you might not need to use weights, but they are useful to help you increase your fitness. You will end up being more financially fit if you add insurance to your life.
Insurance isn’t an easy topic to discuss… no one enjoys talking about what would happen if you would lose your house, car, or a loved one. Some people may be able to shrug off accidents here and there, but in the long run, the money saved on not having insurance may cost you more money.
It is important to take your time to think about what insurance you may need and what type of coverage is important for you. There are endless products to fit your lifestyle. But you may be thinking, if I never get injured, if I never wreck my car, then isn’t insurance a waste? Consider this – how many of us can predict our future? Would you rather be prepared, or would you rather be surprised?
Basics of Insurance
Having insurance is about lessening your risk. No matter what we do, there is always a level of risk in our daily activities. When you are willing to save money into an insurance policy, you are actively making the decision to protect yourself against a level of risk.
For example, imagine yourself on a normal day, headed into work, or meeting up with some friends for lunch. You quickly glance at your phone to change the music or check your directions, and then BAM! The person in front of you slams on their brakes, leaving you to rear-end them. It doesn’t matter if that person didn’t give you any reaction time to possibly avoid the situation, you are now at fault for an accident.
If you don’t have insurance, you might be paying $10K+ in damages for your car, the other vehicle, any potential injuries, plus a possible suspension of license until payment arrangements can be made. Now you are left with a totaled car, an accident to pay for, and no means of personal transportation for the near future. Without insurance, this accident can be marked on your record and make it difficult for you to get a new car, own a home or even get a rental car application approved… $100 a month towards an insurance premium could have saved you this headache and frustration because you would have only needed to pay your deductible.
Would you rather put away money each month for a policy that can help you save more and protect yourself, or would you rather use up all your savings for one accident?
There are many different types of insurance:
Term life insurance
Whole/Universal life insurance
Child life insurance
Identity theft insurance
If you want to learn more about each specific insurance, check out Credit.org.
You can insure just about anything that could cost you to lose savings or income. That is why you have to think of insurance as supplemental savings to decrease your total loss. If financial fitness is important to you, it is time to add some weight and consider insurance protection.