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Your Children's Future Career Choices and their Impact on Insurances.

Posted on 25 July, 2018 at 15:45 Comments comments (1)

Children’s Future Career Choices and their Impact on Insurances.


A few weeks back I helped a client in their mid-twenties apply for $600,000 of life insurance at a monthly premium of just under $30 a month.


This client is a licensed pilot, but currently doesn’t have all that many flying hours and is currently not working for a reputable company.


When the insurance company contacted us with their decision, my client was given two options:


He could continue with the $30 premiums but aviation would be excluded from the policy. This, of course, meant if he passed away while flying the insurance company would not pay the $600,000 benefit.


His other other option was that he could include the aviation benefit in the policy but his monthly premium would increase from $30 to over $200. Yes, you are reading that right - a rate nearly 7 times higher than initially applied for.


This is just one example of an occupation that hugely impacts peoples ability to get good life insurance coverage to protect themselves and their families well. Roofers, Farmers, Construction Workers,Truck Drivers, Firefighters, and Police Officers are just a few of the people with occupations that can cause premium increases or there may be exclusions on their insurance policies.


Many of us teach our kids that they can do whatever they want to, become whatever they want to become. The reality is some of these career decisions can have a major impact building a healthy financial plan and protecting our families when life doesn’t go as planned.

 

There are many great reasons to insure your children and the ability for your children to choose any career they want, become whatever they want to become, without it impacting their ability to get insurance is one of them. By insuring your children you have ensured that they have insurance coverage for life at a monthly premium that will not increase, giving them the ability to pursue any career opportunity that interests them without it impacting their ability to take care of their future families, if something unfortunate happens.


When your children become adults, you can transfer the insurance policy over to them and they become responsible for the policy. This way you do not have to worry about the policy any longer but you’ve ensured that no matter what your children choose to do with their life, they are insured, and taking care of the ones they love.


If you’d like to learn about the many benefits of insuring your children, We’d love to talk to you.

What Motherhood Has Taught Me About Money.

Posted on 29 June, 2018 at 9:55 Comments comments (0)

So, your wondering what got in to us to post an article about mothering and money! We're definitely not speaking from experience but thought it was a good article. I hope you enjoy it.


What Motherhood Has Taught Me About Money.

I never realized just how much disposable income I had until I gave birth to my first kid.

Before my daughter was born, it was so easy to throw money around. Weekend getaway? Sure, let’s go! Get my hair highlighted for $200? Yes, please!


Now every penny that we have that isn’t socked away for the future is accounted for—and the vast majority of it goes towards our family.

If you’re looking for a lesson in personal finance, all you have to do is get pregnant. Parents learn so many life lessons, in such a short time, that they form a special club of their own. I’ve found that, when you’re a mom, you just get it.


Here are six things I learned about money after I became a mom. If you’re a mother, you may know what I mean. If not, well, here’s what you have to look forward to:


1. Going out for lunch is a luxury — diapers aren’t.

When you become a mom, your priorities change. Drastically. Enough said.


2. You won’t believe how fast kids grow.

A pair of tennis shoes for a 4-year-old can cost as much as $50! So your best bet is to often shop consignment stores for the wee ones because kids grow so fast that second-hand clothes are basically brand new. If you shop carefully, you’ll likely find expensive brands that you may not be able to purchase new. The same goes for you: Gently worn clothing is a great way to save on items that you won’t wear often—like maternity clothes!


3. If you grocery shop without a list, you’ll spend double.

When you have a family, planning ahead for meals and snacks reduces your food budget significantly. Additionally, before you make an impulse buy, think seriously about the trade-off between time and money. For example, some moms will advise you to forgo the bag of pre-cut baby carrots, but I think my time is worth more–it’s a fast, healthy snack kids love that you don’t have to prepare


4. Rainy days happen (and umbrellas are important).

Even a few dollars saved every month can build a significant nest egg–or an emergency fund. Should you or your spouse get laid off, that cushion can see you through tough times. Or if one of your children suffers a significant illness, you won’t have to worry so much about paying for treatments. Being a mom means being prepared for everything … even the worst-case scenario.


5. Don’t feel guilty about spending on yourself.

Okay, spending your monthly mortgage payment on a spa weekend isn’t smart, but a good haircut or a new dress every now and then makes for a happier mom. Here’s why splurges are important and how to splurge wisely as a mother. For example, check out local deals site for coupons for a massage. You’ll feel even better because you got pampered for a steal.


6. The desire to spoil kids is almost overwhelming.

If we could give them the world, we would. There are lots of reasons not to create your own little Veruca Salt, but saying no all of the time can be a real bore–and not just for your child. No matter how hard you try to shelter them from the massive amount of marketing aimed at kids, they will inevitably want the latest gadget and the hottest toy. At some point, all of us wonder, “Am I spoiling my child?”

Here’s a secret: Although it’s important for kids to hear “no,” timing your gifts responsibly and making sure kids understand the value of a dollar means that you can sometimes indulge them. For example, you can find toys, sporting goods and entertainment for cheap if you shop carefully, and you’ll reap huge rewards in the form of that big smile on your little one’s face.


Amy L. Hatch is a writer and editor, as well as the co-founder of chambanamoms.com. She currently lives in Illinois with her husband and two children.

Your Financial House. Part 1 - The Secure Foundation

Posted on 29 May, 2018 at 14:30 Comments comments (0)

Your Financial House 

Part 1: The Secure Foundation - Insurances


As most of us already know, building a house upon a strong foundation is important. I recently read an article about building a house that read: “A proper foundation does more than just hold a house above ground. It also keeps out moisture, insulates against the cold, and resists movement of the earth around it. Oh, and one more thing: It should last forever.. without a good one, you’re sunk!”


When it comes to our financial houses, the foundation to build our house upon is the personal insurances. These insurances are Life Insurance, Critical Illness Insurance, and Disability Insurance. Just like a proper foundation of a house allows it to stand strong when elements out of its control are happening around it, insurances allow our financial houses to stand strong when things we cannot control happen to us and around us. And as we all know life doesn’t often go as planned and things that we don’t want to happen, happen all the time. If are foundation isn’t built properly - just like a house without a proper foundation - we’ll be financially sunk.


The role of all three insurances is to protect you, your family, your income, your current lifestyle, and offer you financial stability in the midst of hardship. Most people view insurances as an expense but they really are investments in yourself and your family, ensuring financial stability no matter what happens. And the younger you get them cheaper they will be.


Life Insurance is designed to protect your loved ones in the case you pass away. This applies to both the income earner and the stay-at-home parent. The stay at home parent does a lot of work that has ecumenic value, and thus replacing their efforts would cost a significant amount of money. Would the income earner be able to afford those extra costs? The wage earner makes a lot of money in their lifetime. How will the family live without that income for years to come? A good rule of thumb for life insurance is 10 x ones annual salary plus all debts owed. Realistically, the rule of thumb is still not enough to match most peoples economic value.

Term insurance is cheap to start but gets expensive later on in life, however, often we need a lot of insurance when we’re young and this can be a great way to make sure your family is well protected at a affordable cost. Permanent insurance lasts forever - like a strong foundation should - and it grows in value every year if properly set up, so this is can also be a really great option.

Death is mandatory, so ensuring you have a well valued life insurance policy is a good way to start building your strong foundation.


Disability Insurance (DI) is designed to protect you and your loved ones in the case you cannot work due to a disability or critical illness. Stay at home parents unfortunately do not qualify for DI, but it would be very wise of the wage earner to ensure they have a disability policy that covers their income. DI pays 60 - 70% of ones gross monthly income tax free, on a monthly basis. This ensures that ones needs and expenses can be met whether it’s groceries, bills, daycare costs etc. Six months of disability can wipe out 5 to 10 years of retirement savings. Having a monthly income from an insurance company helps protect those savings or prevents going into debt, when your typical paycheque is not available.


Critical Illness Insurance (CI) - just like DI - is designed to protect you and your loved ones in the case you are diagnosed with a critical illness. Cancer, Heart Attack, and Stroke are the 3 major illness but most policies will cover 20 - 25 different illnesses. This pays out a lump sum of money (starting at $25,000) when diagnosed with a critical illness. This lump sum payment allows you and your loved ones to cover the costs of the illness without having to use regular income, retirement savings, or borrow. You can use the money however you choose: pay for medications, for personal care, travel for specialized treatments. It can also allow a loved one to take time off work to support and provide care without having to worry about their own income. A good rule of thumb for CI is 1 to 2 times your annual salary and - if set up properly - CI can last forever, and if you don’t ever use it your family can receive all the premiums back - meaning that in the long run you haven’t lost a penny.


When something unexpected happens insurances provide financial stability, allowing us to continue paying off debt, meeting todays’ needs, and saving for the future. It also allows us to deal with the emotional turmoil of such an occurrence without having the financial stress. When uninsured or under insured, an unexpected illness, disability, or family death can have a tremendously negative and lasting impact on our finances.


Session 1 of our Summer Series Financial Planning for Young Families will dive deeper into all three of these insurances, and more. Check out the Financial Education page for more information and to register.