Several Ounces Of Prevention

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.