April 7th, 2009 
NCN
An ounce of prevention is worth a pound of cure.
-Benjamin Franklin
Moving beyond the day-to-day management of my personal finances, it’s important that I think about strategies which will promote long term financial stability. Lately, I’ve been thinking about insurance, end-of-life documents, and organization. Mundane topics, to be sure, but it pays for me to focus on these areas now, so that I do not need to worry about them in the future.
End-of-Life Documents -
Let’s face it, it’s never fun to think about death – especially our own – but if you have a family, you need a will. My wife and I updated our wills, with the help of our lawyer, back in July. In the state of Georgia, the state recommends an advance directive for health care, which combines provisions of a living will and a durable power of attorney for health care. Both my wife and I have filled out and signed a copy of this form. I have also created a durable power of attorney, as has my wife. We keep our end-of-life documents in a fire-proof safe. We also keep copies of them off-site.
Insurance –
We have health insurance, term life insurance, long term disability insurance, renter’s insurance, automobile insurance, and umbrella insurance. At some point in the future, we will purchase long term care insurance. Our life insurance policies are equal to twelve times our annual salaries. We have renter’s insurance because we live in a home that is provided by my employer. My employer insures the home, we insure its contents. The umbrella insurance is a new policy, and provides for coverage above and beyond our renter’s and automobile policies. The long term disability has a 180 day elimination period and our automobile policy has a very high deductible. We have an emergency fund in place to handle most emergencies. Our insurance is designed to protect us in the face of a catastrophe.
Organization -
I’ve really worked hard to improve my system for organizing documents. I like to sort regular bills by date, and then by year. I keep several years’ worth of bills in a closet, filed away should I need to reference them. Important documents, like our wills, birth certificates, car titles, social security cards, and marriage licence, are stored in our fire-proof safe. Copies are kept off-site. I have three copies of our income tax records. Two copies are here at our house, and another copy is kept off-site. I’ve also digitally copied and stored several important documents. As a precaution against fire or flood, I’ve video-taped the contents of our home, and I keep a copy of that tape off-site.
I’m hoping that some upfront-preparations will prevent down-the-road hassles. I’m trying to take the necessary steps, now, so that I can relax and enjoy the future. There’s no point in working hard to make money, and even harder to save it, if I don’t take the time to protect it.
Posted in 
the other one to consider is prenups… prenups are as much to draw a line in the sand before you get married as to protect the other person from your personal debts (should you have many).
prenups, like wills aren’t fun things to think about or talk about, but you can never say never!
I used to work for a share (stock) registry and the power of paperwork and organisation is very real – we’d consistently see examples of people panicking and losing money just because they didn’t take the few minutes to store and file appropriately.
great post
Good idea to have a copy off site…you never know when that copy might be needed. Video taping your belongings…great idea…I need to do that.
Call me ‘old school’, but I’d never marry someone if I thought I needed a ‘prenup’…
Great for you, but may be worthwhile advice for others. And not only that, but some kind of legal considerations for those cohabitating, either same or opposite gender. States have automatic provisions for those that marry, but should a couple choose not to (or can’t) they need consider their situations when looking at insurance, savings, estate plannings, etc.
Oh man, I’m so glad you brought up organization in this post. It’s awful to think about these things, but it’s one of those relatively painless (I say this, of course, as I have a foot tall pile of old bills STILL need to file) things you can do to make things easier on your loved ones in the event of your passing. Not to mention it’s one of those everyday things you can do to put the power of small to work for you in your life and make your life a whole lot easier. Now if I could just remember to buy those hanging file folders…
Good advice what to do with all these files and papers that everyone of us has at home. Sometimes it is easier to get rid off all thsese stuff, at least unecessary . Do not you think so?
I agree that insurance is designed to protect us in the face of a true catastrophe of the world.
I’m big on catastrophic coverage such as HSAs. I think it is the wave of the next 5-10 years.
I agree with ‘organization’. With organization, you will keep your relationship with other. This is the best prevention. Thanks for sharing this information.
I’m a bit of a fanatic when it comes to organization. I’ve tried to go completely paperless, and have incorporated a file naming system that includes the date, source, etc, which makes files relatively easy to find on my computer.
Organization is the ONLY way I’ve been able to turn things around in my finances.
Thanks for teaching about it!
Seth
Reduce Credit Debt.org
Someone needs to develop an insurance that pays the policy holder in the event of the dollar collapsing. This would be great for people like me who think that we are spending ourselves into economic destruction.