If your finances seem to be in order, how important is it to have a monthly budget? Is life insurance necessary if you have no kids? What assets should you list on your net worth statements? David answers these questions today!
Following our series on financial resolutions, David received some listener questions about how to best proceed in 2021. From net worth statements to paying off credit card debt, David answers and advises on best next steps.
Jeff is a married 30-year-old with no kids. Does he still need life insurance? If you’re trying to protect your family against catastrophic risk, is this still necessary? David says it’s possible that Jeff doesn’t need life insurance right now. He asks a number of questions in return to determine what the risk is to Jeff’s spouse and what might make a difference on that decision. Once you have a house or kids, there is a much higher risk that you’ll want to account for. You’ll also want to consider the possible life insurance needs for your spouse.
How much life insurance do you need? David recommends looking at Bankrate to use a life insurance calculator to determine how much you’ll want to have. Once you have that recommended amount, look for cheap term life insurance that will meet your needs.
Angie has finally paid off her credit card debt! She has a small emergency fund but doesn’t have a monthly budget because it seems too rigid for her lifestyle. Does she really need to have a budget? David says it has a lot to do with your individual personality. You might need to have a fairly solid budget process if you’re not saving 10 percent of what you make, let’s say in your company 401(k) or if you sometimes run short between paychecks. If that happens, a budget may help you find out why. You want to be able to identify where your money is going. If you have a nice emergency fund, are saving 10 percent per month, and have extra money in your checking account, then you probably don’t have a problem with overspending. When you get to retirement, you still want to pay attention to where your money is going. If you are living well below your means, it’s not necessary to have a strict budgeting process but can be helpful if you can’t make your money last as long as you want.
Karl just calculated his annual net worth statement and it grew a lot from last year. He also bought his fiancée a pretty nice diamond and is getting married next summer! Does that diamond go on his list of assets in his net worth statement? David says to celebrate when your net worth goes up, but realize there will be some years when it goes down. As for listing that asset on the net worth statement, David says that ring is technically hers and for the time-being you have separate net worth statements. But after the wedding, this can be combined into one net worth statement.
Listen to the full episode or skip around to certain topics.
1:28 - Do I need life insurance if I’m young and don’t have kids?
7:24 - Do I have to have a budget?
13:10 - What assets can I list on my net worth statement?
“Either way, if you’re in your 30s or 70s, having a good feel for how money runs through your checkbook is super important to helping you understand whether you are living above or below your needs."
– David Dickens
CONTACT US
OUR LOCATION
10975 Grandview Drive
Building 27, Suite 190
Overland Park, KS 66210
Get Directions
CONTACT US
OUR LOCATION
10975 Grandview Drive
Building 27, Suite 190
Overland Park, KS 66210
Get Directions
We are an independent financial services firm helping individuals create retirement strategies using a variety of investment and insurance products to custom suit their needs and objectives.
Advisory Services offered through CreativeOne Wealth, LLC an Investment Advisor.
Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. None of the information contained on this website shall constitute an offer to sell or solicit any offer to buy a security or any insurance product.
Any references to protection benefits or steady and reliable income streams on this website refer only to fixed insurance products. They do not refer, in any way, to securities or investment advisory products. Annuity guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Annuities are insurance products that may be subject to fees, surrender charges and holding periods which vary by insurance company. Annuities are not FDIC insured. Provided content is for overview and informational purposes only and is not intended and should not be relied upon as individualized tax, legal, fiduciary, or investment advice.
The information and opinions contained in any of the material requested from this website are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. They are given for informational purposes only and are not a solicitation to buy or sell any of the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.