Frugal For a Season

We’ve posted extensively about our reasons for being “frugal,” or not maximizing our expenses. We want to live purposefully and generously. We want to invest time and money into our family, friends, and community now and as our financial flexibility increases. However, I use quotations around frugal and even hesitate to quote my own blog title anymore, because our thriftiest days are behind us.

I’ve already chronicled my fall from homemade-yogurt-making diva to grocery delivery slacker. Blame it on the third kid, middle age, or financial frivolity, but I simply don’t have time for my semi-crunchy lifestyle of yore. (I did recently make granola for the first time in years, but only because I was on one of my dreaded anti-sugar crusades.)

I’m not even sure what to call our former “frugality” because much of what is today deemed extreme frugality was standard fare a generation ago. My mom hung laundry, cloth diapered, composted, thrifted, and side-hustled without seeming to think twice about it. Not to mention Neil’s grandparents raising 5 kids in a small bungalow with a postage stamp yard, because that was normal.

And then there’s us. Third kid, we buy a minivan and a bigger house with a bigger yard. Spend $$$ on gymnastics, etc. (but so did my frugal mom for me; it comes full circle). I hung my once frugal head in shame while ordering extra Christmas gifts for the third kid so she won’t steal the middle child’s presents.

Looking back over 16 years of adulting (read: marriage), we were frugal for a season. And for a reason: we paid off student debt and our first home. We got the investment snowball rolling. Started college funds. Travelled. Gave to charities. All of which would have been much harder to do one income had we taken on car payments, consumer debt, or a huge mortgage.

Now I’m left searching for a new term to label our lifestyle. The phrase financially efficient comes to mind. This is, like our title, both subjective and tongue-in-cheek, since there’s absolutely nothing efficient about having three children, and in many ways, this choice was the end of all efficiency for us (See “We Hate Money, or We’re Having a Third Kid“). But our growing responsibilities and expenses led us to re-evaluate what is worth saving our pennies over, and what is not.

Now, as the stock market and time have been working their magic on investments, and as our income has grown, and as we’re pulled in more directions than ever, saving dollars in my old crunchy ways seems less worthwhile. A decade ago we were newly settled into our first home, had recently paid off our student loans, and were enjoying our first Christmas with an infant (hello, college fund). Now we’re discussing the details of Roth conversion ladders because a period of more flexibility is not so very far away.

A few thoughts come to mind as I look over our financial journey, and the many personal finance articles I’ve read over seven years of blogging. On the debate between growing income versus cutting spending: it’s more about your values and priorities than numbers. I.e., what do you want and need to focus on? How much did hanging laundry and cloth diapering speed our progress? Only slightly. But having chosen to stay home with the babes, I wanted to do what I could. And it’s better for the earth (says person who now buys the 300 pack of paper plates).

What did help was buying a home we could afford, putting 20% down, and paying it off early. Paying our student loans off early as well. Avoiding car payments and other consumer debt. And with the cushion provided by no debt except a smaller mortgage, we got those investments rolling, because the first $100,000 really is the hardest. Many smaller things like cooking at home, camping for some vacations, and buying secondhand didn’t hurt, either.

I’d also point out that the posts you see about extreme frugality or no-buy challenges usually reflect a very limited period–a season. Sure, many people could live on a limited income for a year or two. You defer home upgrades & large purchases, and use your stash of clothes and cosmetics for a couple years. There is a real value in breaking needless shopping habits, learning contentment, and rethinking how you consume. Considering how we’re inundated with ads and influencers suggesting we need to constantly “improve” ourselves and our lifestyle, these frugal challenges have their place. And funds directed toward bigger goals have a lasting impact. Just don’t feel bad if your average spending doesn’t match up to an catchy headline.

More important than the number you spend, save, or even give, is the why behind what you do. Do you have financial goals? Are you happy with how you’re spending? These are topics we like to revisit near the beginning of the year as we look at our budget and plan for the future.

How has your approach to personal finance changed over time? What are your goals this year?

DIY Diary: Basement Remodel

After almost a year in our new house, we decided to finish the basement. This project was always on the list, but we chose to prioritize it over the many other updates the place could use. Because: kids.

We’ve always hoped for our home to be a hub for kids. And while we don’t really need more space for our family, we do want to have a large, open space (with a door we can shut) where the kids and their friends can hang out. In our home group-based fellowship, it’s always good to have a meeting space for Bible studies, youth group, or classes. It’s also ideal for kids’ parties and sleepovers. Did I mention there is a door? Shutting the door when KidzBop is blaring is my favorite.

After considering several configurations, we decided to build a small office/guest bedroom next to the small unfinished utility room.

Before (picture from listing)
Before storage (picture from listing)

Neil worked hard in his “spare time,” which is usually a few hours on Sundays. His brother has helped a lot, and some friends lent a hand as well. Thanks guys!

Before doing anything, Neil replaced the 30-year-old sump pump. They he took down the old drywall, besides the part splitting the two smaller rooms. He and his brother installed insulation, which instantly raised the room temp by 6-8 degrees, and made the whole house feel warmer. They capped a pipe from the old utility sink, framed the utility room and office, installed lots of outlets and lighting, and drywalled over 1000 square feet. It seemed like he would be mudding for the rest of our lives.

Framing the utility room & office

This is the part where I reached a breaking point. The long summer days of parenting were wearing me down. I was co-teaching a class. Neil was squeezing in basement work in between all his other responsibilities of work, family, and volunteering. We weren’t getting enough time together as a couple. The project began in February and we hoped to finished by August.

After a few days (years? decades?) of feeling crazy, I blurted out a unplanned rant to Neil outlining our dilemma and the only solution I could see: we needed to hire people. We didn’t want to cut back on time with our kids, our friends, and our volunteering responsibilities. But we could hire someone to finish drywall. And get babysitters for dates and extra study time for the class.

We found a babysitter and a drywaller. $500 later, Neil saved himself about a month of Sundays.

Next, Neil and his brother installed sub-floor that improves the comfort while also protecting the carpet from water damage. Then they installed doors and trim, following by priming, painting, and more painting. Neil said he never wants to paint anything Accessible Beige again. Carpet went in mid-August. We’ve furnished it with Facebook Marketplace furniture, and decorating is up next.

Before carpet

The total project cost around $12,000. Thanks, stimulus checks! While that is A LOT of money, it’s by far the cheapest way to increase the size our house by 50%. Neil and his brother did a very nice job. Whereas before our “rec” area was painted cinder blocks and thin carpet on the cement in an awkward long rectangle, we now have a fully insulated, fully finished, comfortable space. This should be a perk whenever we do sell our house. (Although it might need to be entirely remodeled by the time the kids are done with it!

More importantly, it will make our home more useful and useable. The day after carpet was installed, Neil moved his office out of our bedroom. Thank God! The following week, my son’s friends at his birthday sleepover had 800 square feet to run around! My friends and I also retreated down there when the bugs were getting bad while hanging out outside last week. The kids love playing board games, Pop a Shot, laser tag, and video games downstairs. And blaring KidzBop.

We bought too many chairs!

FYI we decided to leave part of the ceiling unfinished since we will need to replace kitchen and bathrooms in the future.

This was by far the most expensive home project we’ve ever done, mainly because the sheer size of the room. It’s been the perfect meeting spot for the intermediate-grades Bible study we started this fall. Soon we’ll have an art night where they can make some art for the walls! (Plus some to take home with them.) I’m also holding a women’s dance class next week 🙂

Where did all our junk go after deleting our storage space? Good question! We do have two shelves squeezed into the furnace room, and Neil put decking in the attic space above our garage. We did get rid of a respectable amount, but aren’t really at a minimalist moment in our lives right now. Like, we NEED 12 obsolete video game systems. Because: fun.

I’m so grateful for Neil’s DIY skills, his brother’s endless helpfulness, and the resources to complete the project. And I look forward to lots of fun times in our new space.

What’s the biggest home improvement project you’ve ever done?

Still Pretending?

Celebrating 1 year! House pic from listing.

It’s been a year since we bought our house. I’ve barely blogged this year, mostly due to distance learning. But there’s also been the nagging question: are we still “pretending” by living on less than we could? If anything, living in our new neighborhood feels like we’re pretending to be rich. Pretending to fit in. Pretending to care about our lawn.

We also left behind our mortgage-free life, lower bills, and the many updates Neil DIYed over the years. Though our new mortgage is quite small, our property taxes are not. And there are no end of projects. I’m confident it will be far less expensive in the long run to DIY updates, but it will require some cash, time, and patience.

I have no regrets about moving. The concerns I had–the expense, the effort, the sheer lack of necessity–evaporated once we were here. The sense of community is definitely stronger. I can scarcely walk around the block without seeing someone I know (and stopping for a chat). Saturday we have 4 neighbor kids from 3 different families playing in our yard. We can still connect with old neighbors since we’re so close, and my kids didn’t even have to switch school buildings.

Having more space, a big beautiful yard, lots of friends in walking distance, and neighborhood amenities like a bike path, playground, and fishing pond are also great. And did I mention we don’t live in a bi-level anymore?

So what does “pretending to be poor” look like when you feel like you’re pretending to be rich? Moving here has simultaneously felt like the end of living on less, and has highlighted the ways we could be spending so much more. We’re surrounded by the lawn care services, newer vehicles, and professional remodeling projects. Moms get their hair done and wear North Face. And I’m not judging any of those expenses. Moving here has shown me more than ever before that everyone has their reasons for their financial choices. I used to wonder, who would want to live in this Edward Scissorhands neighborhood in these oversized houses? Three kids later, I’m living the answer.

When we first moved here, I noticed a swell of insecurity. Did I look too dorky? (How could I not? I’m so nerdy.) Was my décor too tacky? (Yes again. I’m hopeless in this department.) I was torn between two value systems–pretending to be poor, and pretending to be normal, which maybe now meant rich. Quickly I concluded what I always have: I need to be myself. And be a good neighbor. Think more about others than myself, including how my home or I look.

We’ve spent a little on decorating and furnishing our house, trying to make it homey, hospitable, and functional. We needed porch, patio, and family room seating. As always, it’s secondhand furniture. And I rocked the “just moved” excuse, even if just to myself, as long as possible.

We’re still frugal to the core in certain ways. I’m convinced that the #1 best way to build financial flexibility is to avoid car payments if at all possible. That alone provides $250-700 per month we can save, invest, and/or give away.

Second to that is probably DIY home projects and car repairs. Neil’s skills, which I understand are not entirely replicable, have saved us a small fortune. But anyone can apply other principles. Not needing to have our home look like a magazine or Pinterest board helps. And a can of paint or change of hardware goes a long way toward making things look less dated. So far, most changes we’ve made have focused on functionality (gas stove, bigger sink, hood range). Neil is currently finishing the basement–more on that soon.

We keep our food bills reasonable through an aggregate of simple approaches like: limiting restaurant eating and packing lunches (pandemic made this easy!), shopping at inexpensive places like ALDI and Walmart, meal planning, limiting the amount of prepackaged foods we buy, and keeping expensive proteins like steak or seafood as a special treat. Read: we eat a lot of chicken.

Our spending has changed a lot since my first post in 2015. Our season of life with 3 kids is certainly a major factor. Sports, babysitting, food, outings, clothes, bigger house…the list goes on. Babies are cheap. Kids are not. We do “save” on childcare with me staying at home. While there’s a significant cost to not building a career, this decision is not about money. We’ve been able to establish a lifestyle that does not require a second income, and are working toward a point of financial flexibility you could call early retirement.

So are we still pretending? Yes and no. We could spend a lot more. We could spend a lot less. Bottom line: we’re doing our best to live in line with our values, and we’re so grateful for our new home and the community we’re enjoying here. God has truly provided, and we believe He always will.

Do you have a personal finance question you’d like help with? Please help me with inspo and share them here!

The Magical Money-Saving Sweater

It’s a Bird! It’s a Plane! It’s The Magical DIY Sweater!

Check out this 20(?) year old chenille sweater of Neil’s. Bits of yarn dangle on all sides. The original color is indiscernible beneath layers of automotive fluids. I’m forbidden from washing it, as is clearly would not survive the process. Most wives would probably sneak this abomination into the garbage, but this sweater saves us tens of thousands of dollars, so it’s staying.

Fortunately Neil has never worn chenille in normal life, but donning this transforms him into superhero alter-ego, DIY Guy. When he walks downstairs wearing that sweater, I know the magic is about to happen.

In this sweater, Neil did a complete kitchen remodel in our first home. He did a head gasket on a 1990 Dodge Shadow. He reframed and sided our house when carpenter ants ate it. And he replaced the timing belt on our van. I could go on…

More recently, the magic sweater helped refresh and upgrade our new kitchen. After much back and forth about whether and when to remodel the kitchen, we decided to upgrade some functionality, but to leave the bigger project of total remodel for later. With no one leaving the house for work or school, and everyone eating at a minimum of every third hour, tearing out the kitchen seems unwise insane.

Neil installed a range hood, including running a vent through the soffits. Quotations from this project include: “The worst soffits I’ve ever seen,” “These soffits are never coming out,” and other statements perhaps not entirely appropriate for a Christian blog.

A new, much bigger sink has solved my dishes woes. A single, 10 inch bowl, it is 4 inches deeper than our old one. We can now eat more than one meal before the sink is overflowing with dirty dishes. This does not mean I’ve stopped buying paper plates 300 at a time. Sorry, Earth. I swear I’ll stop when they go back to school!

One of my top two wish list items for a new house was a pantry. Alas, this 4 bedroom, 2000 square foot house was built without one. I fail to fathom why. But we agreed from the start that Neil could put one in somewhere. After consulting a designer and a remodeler, we decided the best option is to put pantry shelves in our hall closet, which is right next to the kitchen.

Neil’s brother (said remodeler) generously gave us a pantry shelf he was not using, and Neil built it into the closet, installing an outlet and hiding the microwave in there as well. I’m very happy with the extra food storage space and the location.

Gone is the faint pink and not-faint mauve paint in the kitchen and family room, replaced by “accessible” beige, which is more of a greige. I’m lost when it comes to paint colors, but a couple neighbors shared samples and expertise and it looks great with the cabinets, wood trim, and fireplace, none of which are we ready to change.

We also kissed these 90s-fabulous knobs good-bye:

Just. Why?

While the kitchen still has some 90s vibes, it’s much improved, and for much less money, effort, and hassle than a full remodel. I’m perfectly content with it. Okay, it would be nice if the floor wasn’t barf colored. We actually almost missed a spot when cleaning barf off it just last week. (Yes, my kid somehow caught a barf bug even with all our precautions.) But really, the kitchen is great. Spacious, functional, and no longer pink!

The next project for DIY Guy and his magic sweater is insulating and finishing the basement. It’s just too cold down there. Even with a magic sweater.

What DIY magic happened in your home in the past year?

The Privilege of Distance Learning

As another week of distance learning draws to a close, I’m breathing a sigh of relief. I’ve never looked forward to the weekend so much. I don’t need to set 5 timers on my phone to make sure everyone gets to their class meetings. I don’t have to argue with anyone about what a complete sentence is. I don’t have to worry about our toddler popping into Zoom meetings, possibly naked.

I’m also breathing a sigh of relief because three teachers at their school have already been diagnosed with Covid. I hope they recover well and it doesn’t spread much. But I’m also glad I don’t have to worry about exposure, or have my kids adjusting to substitute teachers a couple weeks into the year.

Distance learning is stressful. I can’t get much done around the house OR errands during the day. Keeping the toddler quiet and out of the way is almost a full time job by itself. Let alone helping a first grader log into meetings, type in Google docs, and stay on task. And helping my very math-minded 3rd grader tackle language arts or answer social-emotional screening questions that he just doesn’t connect with.

Overall, I’m very impressed with their teachers. They’ve done a great job of explaining how to use each app, trying to set up a classroom environment virtually, and they have paced ramping up the work pretty well. I do not envy their jobs.

As frustrating as distance learning is, I have to remind myself what a real privilege it is. I cannot imagine having to manage their learning if I was working from home. If I can barely get the dishes done right now, how would I be productive at work? I’m also grateful that we had the option to distance learn. It was a tough decision, but at least it was a decision. If we were both working outside the home, or even possibly from home, there would have been no choice.

And while parents continue to work or choose to stay home with kids for lots of different reasons, I’m grateful that decisions we’ve made over the last 15 years, as well as many unearned advantages, have paved the way for me to be home right now. I’m so thankful that we’re not having to choose between work and health. I’m glad that the stress of distance learning is not exacerbated by losing a second income.

It’s crazy how even in the best possible circumstances–Neil working from home, no loss of income, no underlying health conditions, me being at home full time–this pandemic is still pretty tough. One thing I’ve noted lately is that I just need to get more creative as we adjust our schedule to this new normal.

I used to exercise during my toddler’s nap time, when the big kids would have screen time or just play. Now I’ve realized if I want to work out, I need to do it in the morning before school. (We’ll see how long this keeps up!).

If Neil and I want to have more than 2-3 waking hours a week of kid-free time together, we need to get babysitters. We’re also trying to enjoy about 20 minutes of conversation after dinner rather than just rushing off to the next activity or chore.

Our social life has to move to after school hours as well. We added a once-weekly after school option for our play group, which is doubling as a social “recess” for the school-age kids. My neighbor and I alternate watching each other’s kids for a couple hours each week for some focused spiritual time. Even loud chores like vacuuming and dishes (I’m so loud no matter how hard I try) have to be scheduled around class meetings.

I could go on, and I’m still figuring things out. I’m trying new ideas for motivating and keeping the kids on task, giving them breaks, and rewarding good attitudes. And I’m learning how to “be a person” even with everyone home most of the time. My most frequent prayer these days is simply for sanity!

How is pandemic schooling going for others? How have you tweaked your schedule due to pandemic life?

5 Ways to Help During the Pandemic

I don’t know about you, but this pandemic has at times tempted me to just hunker down with my family and forget about the outside world. Between moving and crisis schooling, and now facing what feels like an endless summer vacation, it seems there’s little time to think about anyone else.

Yet volunteering and charitable giving are more important than ever as people face unprecedented needs. Even when I fight the urge just focus on myself and my family, the pandemic has changed our ability to serve outside our home. Volunteering in places like schools, nursing homes, churches, and prisons is often not possible, or may look a lot different. Here I’ll share a few creative ways I’ve seen people safely lending a hand.

But to be honest, I’ve hesitated to post this, because I have struggled with making the time. I wish I would have called my family more. I wish I would have been more consistent about involving my kids in service. I have vacillated about how to proceed with the children’s ministry I lead. And I’m never confident I’ve been truly generous when faced with the overwhelming needs in the world.

However, I want to keep fighting the good fight and helping where I can. And I’ve been very encouraged to see how communities have pulled together and shown creativity during this time. So check out these ideas for serving during the crisis, and we’d love to hear the cool ways people are helping out in your community!

Be a Pen Pal

This pandemic is affecting the elderly disproportionately, not just in health outcomes, but in loneliness and isolation as well. We absolutely need to protect the elderly physically, but we also need to look out for their emotional health, because it’s so tied to their overall well-being.

Help the elderly stay connected by becoming a pen pal, phone buddy, or even visiting through a window–all options our church’s nursing home ministry has utilized. If you have young children, draw cards to send to a nursing home.


During our state’s stay at home order, we moved our Bible study online. Sure, online meetings aren’t the same as being face-to-face. But everyone agreed it was far better than nothing. In addition to continuing our study, we were able to enjoy others’ “company” afterward. Whatever type of meeting you might do, meeting online, even if less often, is a great alternative to simply canceling.

The same goes for friends and family. My kids really enjoyed seeing their friends via Facebook Messenger video chat, and my family also enjoyed group Zoom calls when we missed occasions like Easter and my sister’s birthday. At times I felt a real aversion to online meetings, but whenever we did “meet” it seemed to lift everyone’s spirit. Be the one to initiate that positive connecting.

Lately we’ve found safe ways to meet outdoors, and that’s made for a great summer. In fact, we should be outside this much every summer. I think we’ll continue to meet outside with a camp fire in the fall for as long as the weather permits.

Food Bank

As people struggle with unemployment and kids can’t look to schools for meals, now is a great time to serve your local food bank. Whether you give time, money, or food, your donation is sure to make an impact. Try organizing a neighborhood food drive. Even young kids can relate to the importance of food and participate by helping box up food to drop off. Or donate money directly online if you’re more comfortable with that. Lastly, you can contact the food bank about their need for volunteers. Just remember to inquire about their Covid safety measures before you go.

Care Packages

During the “lockdown,” our church organized a care package initiative. The packages were sanitized, personalized, and distributed to neighbors and nursing home residents. They were warmly received; many people expressed their appreciation at the thoughtfulness.

Care packages would be a great way to cheer up just about anyone–a health care worker, other essential workers, a family member, teacher, elderly neighbor, or family with young kids. Snacks, cleaning supplies, hand sanitizer, books, or small activities such as card games, crosswords, coloring books, or bubbles are just a few ideas of items you might include.

International Charities

While serving in the local community is so important, let’s not forget that Covid is ravaging parts of the world with far fewer resources and options for social distancing. We recently learned that the pastor of a church we used to sponsor (they are financially independent now) was diagnosed with Covid. This was shocking since the church is in a very remote mountain area of India. The fact that Covid has already reached such an isolated corner of the globe, and one still deeply affected by poverty, is sobering.

If you’re able to donate financially to a charity that provides for emergency needs, now is the time. Many great organizations have created Covid relief emergency funds. We have long-standing relationships with India Gospel League and Compassion International. \

Now it’s your turn: what creative ways have you seen or found to help out during the pandemic?

New House Pics!

People asked for pics of our new pad. Here they are:

Living Room
We call this the “smart living room”
Yes, I already broke a cabinet.
Dining Room
Our room
Our giant, mauvelous 90s bathroom
Boy’s Room (has never been this clean before or since)
Girl’s room (during rare moment of tidiness)
Kids’ bathroom
3 Seasons Room
Sunset view from the front porch

Any suggestions for our upcoming DIY kitchen remodel?

Mint Mobile Review

About 4 months ago, I decided to switch from my Verizon WiFi only plan to Mint Mobile. I knew Verizon charged more than other companies, and although I’m usually one to seek a better deal, my previous experiences changing cell phone companies was a huge hassle. I also had great cellular service with Verizon and every time I thought about switching I’d hear bad reports from a friend of service elsewhere. But Neil encouraged me to look into it since the cell service space has changed. About time, right?

I knew Verizon charged more than other companies, and although I’m usually one to seek a better deal, my previous experiences changing cell phone companies was a huge hassle. I also had great cellular service with Verizon and every time I thought about switching I’d hear bad reports from a friend of service elsewhere. But Neil encouraged me to look into it since the cell service space has changed. About time, right?

I referenced Clark Howard’s web site and chose Mint Mobile because it was compatible with my existing phone. At $15 a month for 3 GB of data, the price was right. I also read the review on the same site. Mint shares TMobile’s network, which I was a bit nervous about since friends in my area had complained about that service. But I was willing to try it.

The $15/month is an introductory price. All plans are prepaid in 3, 6, or 12 month increments. The longer the period you prepay, the lower the per month price. Mint does offer a 7-day free trial period. I highly recommend making calls during this time to make sure the service works well for you. I did have some dead spots in my home and poorer call quality at times, but once I turned on the Wifi calling setting I’ve had much better results.

Mint Mobile’s web site is extremely user-friendly. and straightforward. The sign up process was so easy. After confirming that you can get service and your phone is compatible, they will send you a SIM card in the mail. It arrived quickly and came with clear instructions. The app is also very easy to use and I love that everything is online and I don’t need to go to a store.

After the 7 day free trial, the 3-month prepaid plan begins. After the 3-month period, I decided to prepay a year’s plan for a total of $180. For 3 months, the price would have been $75 total, and for 6 months it would have been $120. Plans with more data are available, and you can always purchase add-on data if you need.

One AMAZING perk Mint offered from March through June 14 was free data upgrades. This was very in touch with real needs during the pandemic, and we made use of this while staying away for a week after listing our house. A cabin we love doesn’t have Wifi, but the kids were still able to do distance learning for school, and we attended our own Zoom meetings by using my phone as a hot spot. Thank you, Mint! I was also impressed that I was getting any service (data or cell) in a cabin in the middle of the woods.

Long story short, I would recommend Mint to anyone looking to save money on a cell phone plan. I’m paying half of what I was at Verizon and that was with no data! I knew better deals were out there, but hesitated because I didn’t wan’t bad service or a big hassle. Fortunately I’ve experienced neither. And I feel better about using a company that is more straightforward (I had an issue with Verizon customer service not being up front), and that offered real help during an economic crisis.

If you want to switch to Mint, I’d appreciate you using this affiliate link. We’ll both get a $15+ discount if you do. But trust me, I’d never recommend something I didn’t really like! If Mint doesn’t appeal or work in your area, check out more low-cost cell companies at Clark Howard’s site.

Has anyone used Mint? What other good cell deals have you found?

You Need Life Insurance Yesterday

Perhaps it’s a bit obvious to bring this up during a pandemic, but it needs to be asked: do you have the right life insurance? Who needs life insurance? How much life insurance is enough? And where should you get it? Let’s tackle these questions today.

Who Needs Life Insurance?

The purpose of life insurance is simple: to relieve the financial burden of a death. This is especially important when it comes to providing for dependents.

The most basic life insurance covers the cost of end of life services. A simple cremation and funeral service costs several thousand, and a full burial and funeral service runs upwards of $10,000. If you’re young and single with no dependents, covering end of life expenses is all the insurance you probably need. These policies may be called “Final Expense” or “Burial and Funeral” insurance, and are inexpensive. A totally acceptable alternative to such a policy would be to have $10,000 in savings to cover these costs.

However, if you are married and/or have children, you need much more extensive life insurance. You need to not only be able to cover funeral expenses, but also to make up for lost income and/or services.

How much is enough?

A good rule of thumb is to purchase a policy for 10 times your income. So if you earn $50,000 you would want a $500,000 policy. This is paid out to the beneficiary over a set period of time, such as ten years. You can also take into consideration if your expenses are much more or less than your income.

What about stay at home parents? STAP absolutely need life insurance. Stay at home parents provide valuable services like childcare and housework. To replace replace these services would be quite expensive, easily $25 per hour or more. Consider how you’d cover the cost of childcare and household services like cooking, cleaning, and laundry. A common estimate is that it would take $25,000 – $40,000 per year to provide the services a stay at home parent provides.

What type of policy?

Equally important to the amount of insurance is the type of insurance policy. There are two main structures to life insurance policies: whole life or term. Whole life insurance covers you for life. So if you die at age 30 or age 90, you will receive the same benefits. Term life insurance covers your benefits for a certain period of time, often 15-20 years (though longer is available). While it’s tempting to get a policy that will cover you for a lifetime without the price going up, term insurance is the way to go in nearly every case. Here’s why:

Whole life insurance costs a lot more per month–often 10-12 times more. As you can imagine, insuring someone over half a century or more is going to be more expensive. So you’re really overpaying for something you aren’t likely to need for a long time. Additionally, most people don’t need life time coverage. You need coverage for as long as people will be dependent on you, and until you are self-insured (own adequate investments).

That’s why 15-20 years is a good term length. You pay less because you’re not very likely to actually need those benefits during that time period. Additionally, if you have young children, they’ll be grown and most likely independent in that time period. As your children become independent, your expenses should decrease quite a bit as well. However, if you have one or more children who may continue to need your support into adulthood, this is an even more compelling reason to have a strong life insurance policy in place.

Lastly, you can plan to become self-insured over that 15-20 term by investing in retirement accounts. If you’ve invested consistently and wisely over that time period, your accounts should be generating enough interest for a spouse or other dependent to life off of.

Whole life insurance is an investment product that salespeople will make sound very appealing, so it’s important to understand their pitfalls. Here are some drawbacks just in case whole life is still tempting you:

  1. The investment is not diversified like other investment vehicles. This means the entire investment is with a single company and you are completely trusting that company to perform well. You would never be advised to put all your retirement funds in one single company, so why would you want to do this with whole life insurance, which is sold as a retirement product as well?
  2. Whole life insurance returns are not guaranteed. Salespeople will show you optimistic projections of returns, but the guaranteed returns (if any) are actually very low. The returns on whole life policies assume a long period such as 40 years, and perform lower and are less liquid than other investment options. The fees and commissions are much higher than 401ks or IRAs and will further reduce your returns.
  3. Everything about the product is less transparent. From the fees, the sales commission, the so-called guaranteed returns, to many other misleading claims, the product is purposely not well-explained to the consumer. The confusing nature alone is enough to deter me from this financial product, especially when a better option is available. You should NEVER buy a whole life policy without first consulting a trusted fee-only financial advisor, preferably one whom is not pushing that particular policy. Commissions on these policies are 70-100% of the first year’s premium so agents are highly motivated to sell them.

Bottom line: choose term life insurance. Getting a term policy will require some paperwork and a physical. Your exact price will depend on your age and health, as well as how much coverage you are seeking and the length of your term. We use American General (but this is not an affiliate or sponsored post).

While this pandemic is truly sad and sometimes scary, it would be a silver lining if it motivated more of us to prepare for the unexpected. Sometimes it takes something big to get our attention, and now is the time to make sure our loved ones are provided for.

What motivated you to get life insurance? Any questions about the topic?

Hello from our New Home!

After 5 years of tossing around the idea of moving, we’ve finally made the move. At first, we weren’t sure what we wanted. More land? More community? Then I couldn’t fathom moving while I was pregnant or had a baby. Next, I had my moral and logistical hang-ups: why should we go back into debt and pack up allllll our stuff just to move 1.5 miles? Why did we want more space when many people live in closer quarters? I have a real aversion to excess, and moving felt excessive in every way. But I had a light bulb moment in February that it wasn’t wrong to want more space in a family-oriented neighborhood, and when I mentioned this to Neil, his excitement revealed just how much he had wanted this all along.

He was right. Two weeks after our moving day, we haven’t had a moment of regret. Both the house and the neighborhood are great. Having more space is a welcome change, especially right now when everyone is home all the time, and trying to work. It’s much easier to keep the toddler away from the home-schooling. And there are more areas to play, which gives everyone the sense of a change of scenery. Our new yard is also about 30% bigger, if equally muddy. But with a porch, sun room, deck, and patio we have plenty of outdoor options as well.

The neighborhood vibe is also just what we were looking for. It’s very friendly, and although it’s a hard time to build community, we have been able to visit with a few neighborhood friends outdoors. As a bonus, we have a beautiful sunset view. Although we moved just over a mile, it feels like we’re in a different town. Yet moving such a short distance means we can still see our old neighbors any time. The kids don’t even have to switch schools (if they ever go back).

What’s making the whole thing seem like an even better idea is that we close on the sale of our old house today. Buying a new house is exciting, but selling one feels more worthy of celebration. Our proceeds will shrink our new mortgage once we recast our loan. A recast is basically like restarting your mortgage. Because it’s our second mortgage with the same company, one perk they offer is a free recast. It re-starts the amortization schedule, meaning you start paying the initially high ratio of interest to principle, but since we’ll only be a month into the loan, it won’t matter. This will allow us the flexibility of a smaller mortgage compared with applying the proceeds to the initial loan, which would accelerate amortization, but not change our monthly payment.

We originally planned to move first and list later. I’m so glad we didn’t. Though it was stressful to get the house ready while homeschooling, the market in our area has slowed somewhat.

This move has showed me that there are things–even expensive things–that are well worth the money. Our proximity to friends, along with how smoothly both transactions went, certainly seems like God’s hand. We are grateful for the resources and flexibility that afforded us this choice. 

Have you ever made a purchase–big or small–that was unnecessary, but so worth it?