So far, the SMC Book Club has read books that covered some of our favorite topics- money, career, lifestyle, and female empowerment. Well, ladies, our next book selection is slated to give us all of… More
Today is the last weekend of 2017 and my last check-in for the She Makes Cents 52 Week BINGO Money Challenge for the year. In fact, this past Friday marked 104 consecutive weeks of doing this money challenge successfully. In the past two years, I have eliminated my credit card debt altogether as well as shaved YEARS off my student loan repayment term. More importantly, I have cultivated a habit of saving money. Personal finance is 80% behavior and 20% head knowledge according to the financial writer, Dave Ramsey. To be successful doing this money challenge I had to change my behavior and put saving for my money goals above fleeting things and experiences. That was something that took a few failed attempts to learn. Yes, a few years ago I would start the challenge, hit a mini goal, and fall off. Then two years ago, I realized that I had to do something different if I wanted different results… and so I did.
What is the 52 Week BINGO Money Challenge?
The BINGO Money Challenge is a variation of the popular 52 Week Money Challenge that I created back in 2013. The original challenge called for people to save money according to the number of weeks of the year. For example, on week one you would save $1.00 and on week 52 you would save $52.00. At that time in my career, I had a base salary and I worked on commission so my checks were never consistent. I attempted the challenge and failed. Hey, it happens. I then thought to myself, girlfriend…. you should make a “bingo” version… So I created my first bingo money card and started saving because the original version did not work for me. I needed something that would set me up for success. The thing is, it doesn’t matter if you cross off $52 dollars on the 52nd week of the year, all that matters is that you cross off a box on the money card every week. Either way, you end up saving the same amount of money and you have the ability to save more or less based off how your current financial situation for each week. Since then, the BINGO Money Challenge has evolved into a money challenge with unlimited savings potential.
Who is the SMC Money Tribe?
The support from She Makes Cents readers started to pour in when I began sharing my progress on the 52 Week BINGO Money Challenge. At the time, my money goals were top of mind but also was the new realization that I had to report my progress to people who were invested in my success. I started to get emails and social media shout outs from readers who started the bingo version of the challenge themselves. Before I knew it, I had accountability partners that I have never met who shared their progress. We supported the BIG wins and the days were all anyone could afford to save was $1.00. We were on this money-saving journey together and friendships started. Now, the SMC Money Tribe is an uplifting community of women from all over the world that supports each other’s financial journey and savings endeavors. Every year people contact me for the latest version of the SMC Bingo Money Card and I found that the most successful people had one major thing in common. In fact, people were 79% more likely to complete the challenge if they are active in the SMC Money Tribe. It makes sense when you think about it because you have accountability partners there to lift you up when the challenge gets hard to keep up with.
How to Join the 2018 SMC Money Tribe
The new 2018 SMC Money Tribe Facebook group will serve as a “home base” for the #SMCmoneytribe. There you will be directed to fill out a quick registration form and download the money card. This is a space for active members and as a member of the SMCmoneytribe, you will gain exclusive content, motivation, and financial tips and tricks that will help you whether you are saving to pay down debt like me or saving to take a fabulous trip or two in the new year (also me). This year, you will have the option to do your weekly check-ins on Friday and/or Saturday on all of our social media handles to make it easily accessible to people who are only active on certain platforms.
Here is how you get started…
- Join the SMC Money Tribe Facebook Group
- Complete the registration form to select your weekly check-in date
- Follow She Makes Cents on Instagram, Twitter, Facebook
- Pick a savings goal & get ready to save some $$$$ in the New Year
A few weeks ago, a company called HealthIQ that celebrates health-conscious people with social and financial rewards, contacted me to create a quiz about millennials and life insurance. Yes, I can now add professional quiz writer to my resume! Since then, I have been reflecting on what happens to our loved ones financially when we pass on. This also came around the time a classmate of mine from high school passed away suddenly from a random heart complication leaving his fiancé and young daughter to pick up the pieces. One day you are living life and YOLOing and the next moment….well, you know how that goes. I am no longer in the headspace of thinking I am invincible, which means it is time for me to get a plan for my family in case the worst happens. Apparently, that means I’m growing up. While doing my research for my quiz, which you can take here, I realized there are several benefits to buying life insurance at an early age and right now millennials are in the best position to take advantage. While it is not a cheerful conversation to have, it is a necessary one and one that can protect those who depend on you and your income should the worst-case scenario happen. Since many millennials are delaying marriage and children, it is easy to say that there is no benefit of buying life insurance; however, that is not the case. Other dependents such as parents who co-signed a loan or business partners for the millennial entrepreneurs out there also depend on you and your income and will be left with a great financial burden of debt, your funeral expenses, and trouble covering living expenses if proper measures are not in place.
What Is Life Insurance?
If you ask my new insurance agent, he would tell you that life insurance is a “love policy”. I, however, prefer the explanation from Fidelity, which explains that, a life insurance policy as “a contract with an insurance company. In exchange for premium payments, the insurance company provides a lump-sum payment, known as a death benefit, to beneficiaries upon the insured’s death”. To bring it to terms that we can all understand, it is what GoFundMe has become when loved ones pass. I have to say this, but GoFundMe should not be your go-to plan to cover the funeral expenses of a loved one or to cover the financial burden that you may leave to your family.
Do Millennials Need Life Insurance?
Yes and yes. It will be easier to understand once you break things down into life stages. Millennials make up the awesome generation of people who are born between 1982-2002 which means that older millennials could be in the home buying, marriage, and kids stage while younger millennials are in the college life and first real job stage. So do all millennials need life insurance? The answer to that will depend on whom you ask. I believe everyone should have life insurance that at least covers one’s funeral expenses. Now in terms of a larger payout, known as a death benefit, I think that depends on who relies your income. To determine if you need life insurance, financial expert, Suze Orman, presents this question for you to ask yourself: “If I were to die today (or if my spouse/partner were to die today), will those I/we support be able to take care of themselves? If the answer is no, then you need life insurance”. Let’s be honest here, the subject of life insurance is morbid, boring, and a bit off-putting, but it is a necessary conversation that needs to be had by all.
5 Things Every Millennial Should Know About Life Insurance
If Your Parent Is a Cosigner On Your Student Loans. A few years back, I remembered hearing a story about a grieving father who was struggling to pay his dead son’s student loan debt. During the height of his grief and after paying for funeral expenses, debt collectors began to harass him regarding his son’s missed student loan payment. That was the first time I remember learning that your debts don’t always go away when you pass. I thought about that Dad and then I thought about my own. So what happens to your student loan debt if you pass away? If you have Federal student loans, your loans will be discharged and your family will not be responsible for your debt. Parents with Parent PLUS loan borrowers are also eligible loans to have their loans discharged in the event of the student’s death since it is also a Federal loan. To receive the discharge, the surviving cosigner must submit a copy of the death certificate to their loan provider. However, if you have private loans, your family may inherit your debt, which for the class of 2016 is an estimated $37,172 and growing. According to this article from CNBC, “Even if your spouse doesn’t co-sign for you, he or she can also be held liable for a private student loan if you borrow while married and you reside in a community property state”.
If You Are a Single Parent.
While millennials are delaying getting married, a recent poll from Gallup reveals that almost half of surveyed millennials age 34 have children although they have never been married. Because of their single status, many parents elect their minor children to receive the death benefit to financial protect their children if something were to happen. Making a minor a beneficiary will cause major problems since life insurance companies do not payouts to children under the age of 18 or their guardians. If you are a single parent, you should consider setting up a trust to benefit the child and naming that trust as the beneficiary. This way, you can avoid costly court fees and you can have things managed based on the directions you have left in your trust.
If You Have Life Insurance Through Your Employer.
Congratulations, you have a real job with real benefits! I am so proud of you. Now it is time to go through and fully understand the scope of your benefits package. Many employers offer life insurance as a part of their benefits package, but is that enough? Something else, I would like you to consider is how long you plan to stay with your current company. According to a Gallup report, 21% of millennials have changed jobs within the past year. Employee life insurance is provided as a group life plan and when you leave your job, you are no longer a member of the “group”. Your former employer is no longer obligated to pay the premium; therefore, your coverage is terminated unless you convert your policy to an individual plan, often at a higher rate. Your best bet is to get an individual term policy in addition to your employer-based policy so that you will be covered.
If You Think Life Insurance is a Financial Investment.
Life insurance is NOT a financial investment. Let me say that again. Life insurance is NOT a financial investment But what about cash value life insurance, you ask?
That’s not what your agent told you, is it? The good folks over at Investopedia define cash life insurance as “a type of life insurance policy that pays out upon the policyholder’s death, and also accumulates value during the policyholder’s lifetime”. Sounds good, right?
Well not so fast… The idea of investing is appealing… even sexy to most millennials (or is that just me?) but insurance as an investment is a terrible idea that yields a very low return. If you are looking to invest your money or save your money, there are much better options out there like mutual funds, Roth IRAs, stocks, and bonds. Suze Orman maintains, “Under no circumstances do you want ‘cash-value insurance’ no matter how fabulous the agent makes it sound”. My financial guru, Dave Ramsey, agrees. Ramsey argues, “It is a horrible product that makes insurance companies the most money, which means insurance salespeople get the best commission on this trash”. I am inclined to agree with them both. Insurance is insurance and your investments are investments. Does life insurance provide financial protection for your family? Yes. Is the “investment” component of a cash life policy, also referred to as whole life, universal life, and variable life, a good investment? Absolutely not. If you have this type of policy, you should cancel it and thank me later.
If You Don’t Know Where to Start.
Many people know the importance of life insurance but have not taken the plunge. For the millennials out there, you will never be as young as you are right now in this moment. Why not take advantage of the financial benefits of buying life insurance while you are young and in presumably good health. Millennials with a clean bill of health will find qualifying for coverage easier and more affordable, think less than $300.00 for the year for a $500,000 policy. So what type of policy do you recommend? Millennials looking to buy into a life insurance policy should consider a term insurance policy because the policy length can be tailored to your needs, it’s affordable, and you can lock in your rate while you are young. The maximum term for a life insurance policy is generally 30 years. Since premiums never get cheaper, millennials can get an upper hand on their finances by locking in a lower rate for the maximum term.
I recently read something from Dave Ramsey that completely changed how I think of all of this… adulting. “The death rate for human beings is 100 percent. You are going to dies someday! None of us know when that’s going to happen, but that doesn’t mean it should catch us totally unprepared”. Yes, you can still enjoy your youth while protecting your future. That’s why I have recently jumped on the life insurance bandwagon and you should too. Last week the Mr. and I met our agent in person to talk about our options and I encourage you to do the same. In fact, through a collaboration with Health IQ, I am now able to offer readers of She Makes Cents and exclusive discounted rate for life insurance (for more information, click here).
It starts with a question that leads to a ring, which ends up as a picture on Instagram, and is shared on Facebook. Yep, he asked and she said yes! Weeks later, you find a charming note in your mailbox asking you to stand beside her on the most important day of her life. You, my dear, are a chosen one… also known as a bridesmaid. Since 2010, I have been in seven weddings and I witnessed at least twenty of my girlfriends walk down the aisle toward wedded bliss. In fact, when the Mr. and I got married in 2015, we were the 13th wedding that year of our friend group. Like many of you, I have taken off work and flown clear across the country in support of LOVE. Too bad that the support of LOVE often comes at a hefty price tag.
She Said Yes, But Should You?
It is truly an honor to be asked to be in someone’s wedding, but before you say “yes”, you need to understand what you are getting yourself into before you make that commitment. Just like in a romantic relationship, money can throw a major wrench into your friendship if you are not honest with yourself and the bride about your financial situation. As a bridesmaid, I have paid for gowns, shoes, hair, mani/pedi, makeup packages, jewelry, liquor, plane tickets, hotels, car service, chipped in for engagement parties, hosted bridal showers, lingerie parties (apparently that is different from the bridal shower and the bachelorette party), oh yeah…bachelorette parties, bridal teas and even décor elements for the actual wedding. Nowadays, you have to add the matching bride tribe outfits for the bridal party photoshoot to the list of expenses you have to think about when saying yes. Did I even mention the wedding gift…eek? Once you accept the invitation to become a member of the bridal party, you are committing to this experience for richer or poorer.
I will admit, that years ago I declined the request to be in a friend’s wedding because the costs of being in the wedding would have been a strain on my finances. That bride thankfully understood. I often think, if we didn’t have that conversation and I participated in her bridal party, she could have very easily interpreted my reluctance to spend money as a lack of support and enthusiasm for her big day. Not having that conversation would have cost me more than financial security, it could have cost me our friendship.
How Much Does It Cost To Be A Bridesmaid?
Back in 2011, the Wedding Channel estimated the cost of being a bridesmaid averages around $1695.00. Based on this estimate, I could have very well spent almost $12,000.00 on other people’s weddings. Can you imagine what the average is now? It always makes me wonder how Katherine Heigl’s character in 27 Dresses could afford to be in 27 weddings, plus her own, on a personal assistant’s salary. To pay for my expenses as a bridesmaid, I used the envelope system before I even knew exactly what that meant. I set aside a certain amount of money each check for each bride.
Brides, be nice to your bridesmaids…your “chosen ones”. They are the ones who are holding you down during one of the most beautiful and possibly stressful times of your life. They do far more for you than you realize. Bridesmaids, remember that your bride is a bride only once (fingers crossed) and she has a vision for her day. If you are both honest from the beginning, then you lessen the chance of unrealistic expectations from both sides.
An Individual Retirement Account (IRA) is a savings account where money grows tax-free. Any individual, regardless of age, who has earned income, can contribute to an IRA and the earlier one is able to do so, the better compound interest works in one’s favor. The money used to fund an IRA must come from taxable income, which the IRA explains, “can encompass more than just one’s annual salary. Taxable income can include profits from stocks or real estate sales, winnings from the lottery, betting the dogs or horses, and winnings from any casino (domestic or abroad). Even the cash value of bartered items is considered taxable income”. As of 2017, the maximum individual contribution for an IRA was capped at $5,550.00. However, people 50 years or older, are allowed to save an additional $1,000.00 for a maximum contribution of $6,500.00 as a sort of catch-up contribution since they are closer to retirement age.
The Difference Between Traditional & Roth IRAs
IRAs fall into one of two categories, a Roth IRA and a Traditional IRA, and the opportunity for your money to grow tax-free is one of the most appealing benefits of this type of retirement account. Even with the benefits, Uncle Sam still requires his cut. The most distinct difference between the two types of IRAs, Roth and Traditional, is when you pays taxes on the money. With a Roth IRA, you pay the taxes up front and with a Traditional IRA, you pay the taxes at the time of withdrawal. Regardless of the type of IRA one chooses, a person can access one’s money once they hit 59 ½ years old, without being hit with a 10% tax penalty for early deduction.
Even though Traditional and Roth IRA play by different rules, those differences allow you to select the best account type for you that helps your money grow tax-free until you reach your retirement years. Once you understand the differences between both types of IRAs, it will be easier to understand which account is best for you. Check out this Roth vs. Traditonal IRA infographic from Business Insider that breaks it all down.
Do you remember the story of the tortoise and the hare? Both tortoise and the hare had the same goal…to get to the finish line; although, the strategy for getting there was vastly different. The hare was quick, took a few shortcuts and thrived in moments of instant gratification. He prided himself in how quickly the finish line came into sight, so much so, that he gave himself a moment to stop, even briefly, when he was on the brink of success. But enough about him for now. Let’s chat about the tortoise.
Even though his pace is much slower than the hare, he is consistent . Step by step, no matter how big or small that step is, he kept moving toward his goal. This folks, is where the lesson “slow and steady wins the race” originates. While the hare was sleeping, the tortoise slowly passed him by and reached the finish line first.
In my personal financial journey I have been both the tortoise and the hare. Years ago, I took half of my emergency fund and applied it to my credit card balance because I was impatient and wanted the instance gratification of a zero balance. In that moment, like the hare, that finish line was in sight...literally I had about $600.00 balance that I owed. Instead of paying at the pace that was working for me, I stopped, departed from my financial plan, deviated from Dave Ramsey’s Baby Steps and I cashed out. A week later an actual emergency happened and I couldn’t take care of it in cash. So that very credit card balance that I risked it all to get to a zero balance instantly increased because I had to pay for the emergency on credit. There are times when we know what the best course of action is and we take the “easy” way out. I risked my financial stability and I lost money and time. One thing I did gain, though, was the hard lesson… “slow and steady wins the race”.
Since then, I have taken a tortoise stride to becoming debt free. I set my pace to put money toward my money goal EVERY week using the She Makes Cents 52 Week BINGO Money Challenge. In January of 2017 my balance on my student loans was $19,000K+ and by December 31st the balance was $12,500.00. This part year I saw the largest decrease in the loan balance in the 10 years I have been . This partly because I figured out exactly how my interest accrues. Once I understood that, I was able to break my larger goal down into micro goals.
January Recap: 52 Week BINGO Money Challenge
This year I set an “paid in full” date of October 2019. To reach that I have set a new goal to get my balance down to $10,000.00 by May 1st. With the help of the Mr. we are knocking out debt together. Every week I select a number on the bingo money card and I send that amount to my student loan providers. The pace may seem slow to some people, but it is a pace that ensures that I continue to maintain the habit on constant saving. I started at the year off with a $12,505.00 balance (that extra $5 is because of interest) and I am closing out January at $11,945.62. Based on all of the awesome progress that member of the SMC Money Tribe are sharing in our group, they are also cultivating great habit with an encouraging community of like minded-women.
The future is FEMALE and that future is NOW! In the past year, I have seen an increase of women taking the reigns over their money and careers with a never seen gusto…at least since I have been an adult. Women are investing in themselves, their money, their careers and their lifestyles and are encouraging other like-minded women to do the same. Last week we learned that She Makes Cents, the premier money and career blog for goal-setting millennial women, was selected by Feedspot as one of the Top 40 Women Financial Blogs on the web. The list, which was announced early January of 2018, features a mix of content producers who share similar goals- bringing personal finance to a female audience. She Makes Cents Founder, Danielle YB Vason shared her experience with her #SMCmoneytribe. “I am thrilled to be recognized amongst the list of well-known financial influencers and brands that I both follow and admire,” Vason admits. “As a blogger, it is easy to feel like you are talking to yourself out there on the web, so when you have your hard work recognized, it’s a very humbling feeling”. So where did She Makes Cents rank? Well, we are pleased to announce that She Makes Cents the blog came in the top 20 ranking at #19.
Other bloggers included on the list were some of our favorite reads such as City Girl Savings, My Fab Finance, and the brand Daily Worth, which topped the list at number one. According to Feedspot, “This is the most comprehensive list of best Women Financial blogs on the internet” and the blogs that made the list were reviewed under these criteria of Google reputation/search ranking, influence on social media, quality of posts, and Feedspot’s editorial team and expert review.
A word from our founder
I am so thankful for the SMC Money Tribe for joining me on a shared financial journey. Your stories and questions have helped to shape the content that is created for this blog. When I created She Makes Cents, my goal was to help millennial women become more financially literate. I wanted to inform and inspire readers to use their “cents” to live the fab life. I wanted to encourage the community of goal setting women to define what the fab life means to them. I hope that I have done that and I will continue to do just that… inform, inspire, and encourage. Congratulations to the SMC Money Tribe because this recognition is a reflection of your debt free journey too.
Sometimes unexpected things happen…the past two years have been proof of that. The thing is, we cannot give anything the power to paralyze us in a state of anger, fear, grief, complacency, etc. Today I wanted to share one of my favorite quotes from Dr. Martin Luther King Jr. I like this quote because it reminds us that there will be things in life that will attempt to block your path to greatness. Sometimes we can even block our own blessings. Instead of giving up when there is a roadblock find another way to get to your goals.
If you can’t fly then don’t shrug your shoulders and throw in the towel. It’s so much easier to give up after the first roadblock (See “How To Come Back from A Setback”). Lace up your favorite pair of sneakers and get to running, girlfriend. You might not get to your greatness quickly, but as long as you keep moving forward you are taking the necessary moves to get you one step closer than you were when you realized that flying was not an option.
On the first day of the year, I asked readers to share their 2018 power word that reflects their goals and visions for themselves. The response to that one question, which was posed to all of our social media networks, was both inspiring and eye-opening. It occurred to me that in place of resolutions people are looking to find a purpose that flows into multiple areas of their lives. As people responded with words like happiness, growth, self-care, and consistency, I couldn’t help but think of books I would recommend to inspire people based on their chosen word. The power of choosing a word that you hope will define your year is that it forces you to reflect on areas of your life that you want to be better or that deserve your focus. Once a word is selected and claimed in advance, you prepare yourself to receive all of the good things that come with that word. My inspiration for the next SMC Book Club read comes from the idea of one taking an active step toward applying one’s own word to one’s life.
February Book Selection
This is the year to do better and be better and I resolve for our group to be great, supportive, consistent, and a place for goal setting women to come together. The energy in the SMC Book Club during our last book, Boss Women Pray, was so amazing and I want to build on that and I want to inspire you to be successful with your power word or else it will lose all power over your life. For the month of February, we are going to do something a little different. Instead of reading the same book together, let’s take the month of February to read a book that is inspired by the word of the year that you chose yourself. My hope is that each of you follows through and make the time to find a book that relates to YOUR word; a book that inspires you toward your self-mandated purpose to you have selected to help guide you this year. According to U.S. News, 80% of people give up on their resolutions and New Year goals by February. Let’s be the 20% together by starting our new book on February 1, 2018.
How Our Book Club Works
Every other month, we select a new book from a mix of editor and reader’s suggestions. For reader suggestions, we ask that selections embrace subjects such as power women, money, career, and lifestyle that informs and inspires us. We then announce the book selection here on shemakescents.com before the start of the month to give you time to opt-in and get your copy of the book from the She Makes Cents store on Amazon. Discussions for the book take place in our weekly book chats in the SMC Book Club group on Facebook as well as the She Makes Cents Instagram page. Trust me, the dialogue in the group is LIFE!
Since everyone will be reading different books for February, the book chats will be tailored to this unconventional reading experience. If you would like book suggestions based on your power word, let me know. I can be found on social media at the @shemakescents handle.
It’s the first day….better yet, the first Monday of the new year and I couldn’t think of a better time to urge you to choose a power word to reflect your goal of self-improvement for the new year. Around this time, people reflect on the past year and envision the promise for greatness to come. The most successful people write down their goals, thoughts, and ideas to manifest the power of the law of attraction. Oprah explains, “Create the highest, grandest vision possible for your life because you become what you believe”. Back in 2013, I asked readers of She Makes Cents to share one word to reflect their personal goals/resolutions/vision for the year ahead and the response I got was inspiring. Since this, I have asked the same questions to readers every year on the first day of the New Year. With every 365 days that go by, we evolve and our needs, wants, and aspirations change. That being said, it is important to create a foundational vision with a “power word” to help guide the path ahead. Looking back at my earlier words, I remember where I was in my life, what was important, and what I needed to work on. In 2013 my word was balance. Then came focus (2014), passion (2015), bravery (2016), and intention (2017). For 2018, I chose “Declutter” as my power word. By definition, the act of decluttering requires one to simplify or get rid of mess, disorder, and complications. It also requires you to organize and prioritize your commitments and material possessions. The word “declutter” is one that I will apply to every area of my life in a mental, physical, and spiritual sense. I will take this year as an opportunity to declutter my finances, organize my career goals and execute those ideas, and rid my space of disorder. Back in 2011, researchers from the Princeton University Neuroscience Institute studied what happens how the brain processes clutter.
I have never been so excited to apply a power word to my year and this one is all-encompassing to severals areas of my life. I know many people do not do resolutions anymore, but I still do. Now that I have my word of the year, I can create resolutions where I can clarify my goals and visions while ridding and mess and disorder that may negatively impact my money, career, or lifestyle.
Fact. 3 in every 4 US workers live paycheck to paycheck, according to a Harris Poll conducted on behalf of CareerBuilder. It is easy to chalk it up to poor spending habits, but is that the main thing that is keeping so many people counting coins until payday? I would dare say, no. While poor spending habits leave you feeling… well, poor, other factors such as debt, stagnant wages, and a constant increase of living come into play when looking at the stressful reality of living paycheck to paycheck. Yes, this is a financial issue, but for millennial women, it can also be a feminist issue.
The online women’s magazine, Bustle, recently contacted She Makes Cents Founder, Danielle YB Vason, to get her thoughts on the subject.
“The fact that 54 percent of Millennial women live paycheck-to-paycheck, according to a 2016 Wells Fargo Millennial Survey of over 1,000 U.S. adults between the ages of 22 and 35, sheds light on a perfect storm of issues and realities that young women face. In addition to paying more due to the ‘pink tax’ on everyday items, more Millennial women are graduating college than men, which means that, along with the degree, they get the $30,000+ debt that comes along with it. Then, when the first job comes, women are paid 20 percent less than their male counterparts. It is not just a financial issue, but a feminist one, as well.”
The fact that Bustle is promoting real conversations about money amongst millennial women is changing the way we as a culture think about talking openly about the subject. In the article, millennials from all over the United States share their experiences about what living paycheck to paycheck is really like. Maybe you can relate to their stories or maybe it opens your gaze to experiences of others, either way, it is a starting point to begin real conversations about money (how we spend it, save it, and invest it) and its direct impact on millennial women.
When you hear the term “life insurance”, what comes to mind? Is it your parents’ and grandparents’ generation? Is it a sad thought like death or the process of planning a funeral? Or, is it something that you have on your to-do list to understand when you are “older” because you are not in that headspace right now? For many millennials, life insurance is just not high on their priority list, which is evident from the 2015 study from Life Happens and LIMRA that found that “60% of millennials prioritize mobile phones, internet, and cable over life insurance”. I believe that millennials are not jumping on the life insurance bandwagon because the idea of death seems so far away. More than that, millennials do not understand what life insurance is, what it does, and how we, as a generation, are in the best position to get the most affordable rates. Cell phones, internet, and cable are all elements of one’s day-to-day life whereas the need for life insurance is so far out, right? Wrong. Having life insurance provides a day-to-day safety net that financially protects the people who depend on your income, like family and in some cases friends, in the event that something happens to you.
Of the living generations, millennials are in the best position to take advantage of the best rates on life insurance. That is because insurance companies view millennials as low risk because of their youth and presumably good health. Those “low-risk” statuses are one of the main reasons that millennials save more money and are able to lock in a lower, more affordable rate as compared to older generations. To take the savings potential even further, millennial women, in particular, generally receive the lowest quoted rate. That is because women live longer and are perceived to be less likely to partake in risky hobbies such as skateboarding, skiing, and sky diving – all hobbies that insurance companies consider dangerous, cause premium increases and are often attributed toward experiences men enjoy more by insurance companies. When you think about it in those terms, it should not be so surprising that millennials get the best rates on life insurance.
Why Do Millennials Get the Best Rates for Life Insurance?
The benefits afforded to the “avocado toast” generation and their ability to lock in an affordable rate is evident to Generation X (1965-1981) and the Baby Boomers (1946-1964) and not millennials, according to data collected from this Health IQ quiz. When asked this questions, “Which of the following generations is most likely to get the best rate for life insurance?” the results were eye-opening. Of the generations represented, 80% of Generation X and 62% of Baby Boomers answered correctly, in comparison to only 33% of millennials understood their own savings potential. That’s right, 67% of millennials do not know they are in the best place to lock in the cheapest premiums. The point of life insurance is to protect those people who are financially dependent on you. Traditionally, that includes a spouse or children, both of which represent life stages that millennials are delaying until later in life. However, life insurance also covers parent beneficiaries who may have co-signed on a loan for you and would be held responsible to pay off debts like your student loans should the worst happen.
For a generation with information at their fingertips, who comparison-shops and lives for the deal, it is surprising to find out that we are missing such a great savings opportunity. Life insurance for millennials is affordable because of their presumed good health and youth. It can be even more affordable when you find a life insurance company, like the Health IQ, that celebrates people like runners, cyclists, high-intensity interval training athletes, vegans, and more with exclusive rates. These special rates reward one’s healthy lifestyle with financial gains that leave more money in your wallet. Many millennials are embracing a health-conscious lifestyle anyway, so why not tap into the full benefits that come with it. Life insurance is something that every adult should have, so why not consider one that rewards habits that keep you healthy, and for being a She Makes Cents reader, I am able to offer you this special rate. You will never be as young as you are today, so it is time to lock in a rate now while it is cheaper. Trust me, it is A LOT cheaper than you expect and your future self will thank you for it.
This post was first featured on the Health IQ blog and the Froogal Student.