Posted by Dave on November 23, 2010
This is a guest post by Dave, is also looking to retire no later than 45, but unlike Tim has no kids and doesn’t want any. Dave is from Ontario and is working towards his CGA certification.
One of my main jobs at home is to manage our household finances. Currently this is a somewhat boring exercise as it amounts to paying off our house as quickly as possible. Once a month I set up the mortgage prepayments and watch the balance decrease slowly but steadily. On a whole, I make the majority of the financial decisions that take place in our house, generally in consultation with my wife. My spouse is not really aware of the exact mechanics of such things as our insurance policies, my company pension, my investment accounts or my various bank accounts.
As of yet, we have not created Wills – this is something we will be doing in December, when I have completed my current accounting course and have time to do something other than study. At this point in our marriage, we really don’t have much in the way of assets to disperse. In a previous discussion with our lawyer it was explained to us that a Will is more useful in dispersion of assets outside of the marriage (family and friends) to meet our wishes.
Besides a Will, I am creating a list of names and numbers for my wife to use in the circumstance that I am unable to provide them. With this list, my spouse will be able to get in touch with all individuals who have assets that she can get at. Over time, as we invest more money, I hope to be able to teach her why these investments are made and the strategy behind this, but for now just getting her access to the funds should be enough.
In an age where money can be placed in a myriad of locations, it is important to leave a trail so that people in your life are able to access your assets. Even outside of your spouse, others noted in your Will should be able to find your assets easily. This can be done via a search of your SIN number, but a regularly updated document would be much easier to update and would provide one place that people involved can easily resolve estate questions.
This isn’t really something that I’m super excited about (which is probably why I don’t have a Will) but it is important. In a situation where I am not necessarily dead, but am unable to provide details to my spouse, I would hate for her to have to hunt for money that is rightfully hers. For the ten minutes it would take, I would know she would be able to find all of our assets quickly and easily.
Perhaps my houses finances are unique because we keep everything completely separate, but I’m wondering if anybody else has created a reference document like this? If so, where do you keep it (we’re thinking fire-proof safe)?
Posted by Dave on November 9, 2010
This is a guest post by Dave, is also looking to retire no later than 45, but unlike Tim has no kids and doesn’t want any. Dave is from Ontario and is working towards his CGA certification.
I don’t particularly enjoy paying for insurance every month (I’m not sure who does). Yet insurance is an expense that makes up a good portion of my overall monthly expenses. I use insurance as a means to reduce, and in some cases eliminate catastrophic financial risk in my life. Most people will have the same or more types of insurance but I thought for this post I would highlight the types of insurance that I have and the reasons that I have them.
Life Insurance:
I have $300,000 in life insurance on myself and my spouse. We chose this amount after we wrote down our major debts and what we’d need to live for a few years as well as allowing for time if we wished to move to another town. We may only need this insurance for 10 to 15 years, but getting a similar type of insurance at an older age would be significantly more expensive. This insurance costs us $45 per month for the two of us.
Car Insurance:
I am the sole driver, and pay $90 per month for car insurance. Right now, I have minimal coverage having removed comprehensive insurance when I felt I could replace my car with cash. When we buy a new car in the spring, I would probably re-instate a high-deductible comprehensive policy, as our savings will be significantly depleted for at least a year or two. There’s not much I can do about this insurance cost, other than try to limit it and keep it low by driving legally and safely. One reason why I wanted my wife to go to driver’s training was the training aspect – hopefully making her a better driver and perhaps limit the chance of collision and higher insurance rates for us.
Content Insurance for our Condominium:
The nature of a condominium means that we don’t actually own the townhouse structure that we live in. Our real estate agent described our ownership as “from the drywall in”, which is a simplistic explanation. This ownership method means that we don’t really need to insure the structure, we just need to insure our “stuff” inside the structure. For $17/month I get the following:
Personal property – $42,000 (Deductible $1,000)
Loss of use of my unit – $21,000 (No deductible)
Unit improvements and betterments – $42,000 (No deductible)
Personal Liability – $1,000,000
CAA:
I classify this as “car-breakdown” insurance. For $114 per year, I am insuring myself from what possibly could be a very expensive tow-ride or somewhat dangerous situation. About twice a month, I drive 500 km (round trip) either to my wife’s family or to one of our friend’s places. A lot of this drive is on major highways and much of it is somewhat desolate. The piece of mind that buying this insurance means a lot to me, and for what works out to $9.50 per month is worth it to me.
A couple of months ago, I was at a red light and attempted to put my car in gear, only to find my clutch slamming to the floor – knowing I could call for a tow to a garage meant that the situation wasn’t as tense as it normally would be, it essentially fixes my annual towing cost if I breakdown, leaving only car repairs to worry about.
Other than minor insurance costs associated with health insurance premiums for work, I self-insure everything else I own. I don’t buy extended warranties on electronics, nor pay for things like phone-replacement insurance from my provider. By having some savings and looking for used models, it would be fairly cheap to replace pretty much everything in my house, eliminating the need to insure.
So, that’s where my insurance dollar goes. It seems like a lot of money every month, but if I were to ever need it, I will be very happy to have paid the approximately $160 per month in insurance costs (around 10 to 15% of our monthly expenses).
How do you decide on what types of insurance to get, and how much? Do you feel over insured?
Posted by Canadian Dream on June 25, 2010
So last night was a nightmare to get home from work. It took me an hour and a half when it is normally 20 minutes. Why? We had such a heavy rainfall most of the underpasses flooded and could not be passed. I’ve lived in Regina for most of my life and I can honestly say I don’t recall this EVER happening before.
Heck, even the creek by my house looks close to overflowing, but the good news is my basement is still dry, but my teleposts need to be adjusted since all this extra water is expanding all the clay in the area and causing my basement floor to heave up a bit more than usual.
Yet what got me thinking about all of this mess was the fact how utterly unprepared most people are for an disaster. What happens when the power goes out and doesn’t come back on? How would you cook something or what would you eat? Do you have any drinking water? Could you keep warm?
In my case I’m not completely screwed. I do have a fireplace to provide some heat in a disaster and I do keep some water set aside along with a camping stove and some fuel. We also have some canned food. Not huge amounts of anything, but enough to get buy for a couple of days if required.
Of course the personal finance side you would also ask: do you know what your insurance will cover? Or won’t cover? In my case I’ve ready to go, mostly, our coverage is up for renewal right away and my premiums are increasing a fair bit to cover the higher value of rebuilding the house if required. I might complain a bit, but in the end I’ll shut up and pay because it’s cheaper than rebuilding my house by myself. Also I do get a claims free discount and I’ve increased my deductible to help keep my yearly cost down.
So how would you do if a disaster strikes? Could you survive the short term? Do you have insurance?
