5 Things to Do/Have/Buy/Arrange For If You Want to be a Grown Up
Well, it’s Monday again, so it’s time for a list, and I had a little trouble coming up with an idea this week. I felt like I needed to talk about insurance again, but an in-depth discussion of insurance doesn’t lend itself nicely to a list. So then I thought, hey, when I was getting out of debt and trying to get my financial life in order, I felt like I needed a checklist of things to get done/taken care of so that I could officially move into the grown up category. You know, like the stuff responsible people just automatically already know, but somehow I missed? So yeah, I thought maybe that could be our list this week.
- Renter’s Insurance/Homeowner’s Insurance. If you own a home, you probably already have this since I don’t think you can have a mortgage these days without a homeowner’s policy. But I know there are a bunch of you renters out there who do not have renter’s insurance, and this is just to let you know that you need to look into it–it is generally not very expensive, and even if you live in a place where there aren’t hurricanes, there are probably fires and earthquakes nearby or, say, airplanes that randomly crash into houses. You need to insure the contents of your apartment so that replacing everything will not totally max out your emergency fund in the event of a disaster. Now, you may be thinking, “None of my stuff is valuable!” and that may be the case, but just think about having to buy a new bed, TV, clothes, etc.–these things are going to add up fast. So go get a policy now, kid.
- “Gap” Insurance for People Who Have Homeowner’s Policies Through an HOA. If you have a Homeowner’s Association, you might pay for the bulk of your homeowner’s policy through your HOA fees. That’s fine, but you need to check the numbers and details on these policies just to make sure you understand your coverage. For example, some HOA homeowner’s policies cover the rebuilding of the structure, but everything on the inside of the home/condo/apartment is not covered–including things like faucets, toilets, lights–so that if you don’t have another policy, you’ll find yourself with a rebuilt home that’s totally uninhabitable. You can get additional coverage by talking to your own insurance agent–they will call it earthquake insurance or contents insurance, or something similar–just make sure to explain the situation to them so that they can recommend the best policy to meet your needs.
- Advance Directive for Health Crises Everyone remember Terry Schivo? You need to make sure you have instructions on what to do if you have a major health catastrophe and someone else has to decide what to do with you. There are a couple of ways to do this: 1) go to a lawyer, or 2) ask your insurance company for a form. I have not looked into this, but I believe you could do this kind of thing with one of those legal forms place like Legal Zoom or We the People. Personally, I would opt for the checking with your insurance company first, though, since there is no reason to pay for this.
- Burial Instructions and Life Insurance to Cover Burial Costs. I discussed this in my article on life insurance, but provided you do not have kids yet (or other dependents), you only need enough life insurance to cover your own burial. Along with this, you will want to have instructions and a will, if you have sufficient assets to require instructions for their disbursement.
- Emergency fund. I’ve already discussed this, but as a grown up you should aim for always having an emergency fund of 3-6 months of expenses in place. If you lose your job or have some kind of crisis, this will help you avoid going into debt. If you’re in the middle of doing your debt snowball, then you can have a smaller emergency fund, but it should always be in place, regardless of your other financial circumstances.
OK, how about you people? Anything to add to the grown up list?