How Going Greener Saved One Woman $21,950 a Year

from Huffington Post, by Maria Pesantez, as told to Alden Wicker

People have a lot of opinions about money.

In our “Money Mic” series, we hand over the podium to someone with a strong opinion on a financial topic. These are their views, not ours, but we welcome your responses.

Today, in honor of Earth Day, Maria Pesantez tells us how her radical experiment in earth-friendly living resulting in savings of $21,590 a year-without sacrificing her quality of life.

Three years ago, I was happy with my lifestyle.

I was 28, living in Houston with my husband and 8-year-old daughter. I recycled, bought organic food for my family, and had 100% wind power for our home. I thought I was leading a model environmental life.

But I was about to learn that environmentalism is like your career, giving to charity or managing your finances — there is always room for improvement.

And in the process, I would also learn that planet conservation leads to cash conservation.

In the three years since, I’ve saved thousands that I’ve shuttled toward my savings account (and a little luxury for myself), improved my health, grown closer with my family and, of course, lessened my impact on the earth. I’ll show you how I did it.

The Movie That Changed Everything

In 2009 I was a new member of the Houston chapter of U.S. Green Building Council Emerging Professionals, whose members were slowly introducing me to green habits. But it was their screening of No Impact Man that changed everything. This film (and the book by the same name) follows author Colin Beavan and his family around for a year while he tries to have, quite literally, no impact on the planet.

He makes no trash, buys nothing new, shuts off his electricity, uses only self-powered transportation, eats locally and gives back to the community … and discovers that living with less doesn’t mean a life of deprivation, but one of simple happiness. He also did all of this while living in New York City — not in a cave somewhere.

When I saw this movie, I was floored. Yes, it was extreme. But there were also many ideas for how I could improve without compromising my quality of life. This movie showed me how I could be healthier and feel more connected to my family. It was full of joy instead of environmental gloom and doom.

The one scene I keep remembering is where the three of them — Colin, his wife and his little girl-were playing cars in candlelight, giggling and having a good time. I wanted that sort of connection to my family for myself.

My No Impact Week

I wasn’t the only one who was affected so strongly. The movie was so successful that Colin created the No Impact Project, which encourages people to try out the No Impact Experiment for a week — and since 2009, over 40,000 people around the globe have. Each day you focus on a different aspect of your life and try to “green” it. After the week is over, you keep doing the things you like and let go of the things you don’t.

I was so inspired, I went home and started the challenge the very next day.

Sunday: Consumption
Before the challenge, I made regular trips to the mall for household items, clothing and shoes. My credit card statements used to be close to $2,400 each month. Not only was this bad for my finances, it pushed up carbon emissions, wasted resources and helped trash our environment. Each cheap blouse I bought was often fabricated from petroleum products in another country, then shipped across the world to me where I would wear it until it fell apart, and then donate it.

Starting on Sunday, I wasn’t allowed to buy anything new. Instead I had to try to get it used, borrow it, use something I already had or just go without. That’s how I discovered thrifting.

After the challenge, thrifting turned out to be one of my favorite eco-friendly activities. It allows me to try out many brands and styles in one trip and powers up the local economy. And what can be more fun than finding a BCBG Max Azria dress for $25? I still get everything I need (and some things I want). But because I now buy as much as I can used rather than new, and have gotten into the habit of pausing before buying anything new to ask myself if I really need it, my credit card statements are now closer to $1,200.

Total savings: $14,400 a year

Monday: Trash
Before the challenge, we recycled as much as we could, but we didn’t even think about reducing our trash. I brought home plastic bags and takeout containers, paper towels and napkins and racks of bottled water, which would all be quickly used and sent to the landfill or recycled.

Starting on Monday, I chose items that came in less packaging, traded disposables for reusables (bye plastic grocery bags!) and finally started composting like I had been thinking about doing — I just hadn’t had the push I needed to get started. I also broke up with bottled water. Aside from having toxic chemicals that leach from the plastic and contaminate our rivers, it costs 10,000 times more than tap water. All I needed was a good water filter and a stainless steel bottle that costs less than $0.001 to refill. This change alone saves me over $600 a year!

Of course, Colin Beaven and his family stopped using toilet paper too, rigging up a bidet. We didn’t go there.

After the challenge, we ditched bottled water and disposables almost completely and continued to compost. We haven’t used any paper towels or paper napkins for three years. Instead, we have a little pile of all-purpose rags and cloth napkins that we use and wash in hot water. This saves us about $30 a month.

Total savings: $960 a year

Tuesday: Transportation
Before the challenge, we used our car for everything. We paid $2,000 a year for gas, $1,200 for maintenance and $1,500 a year for parking at my work at the nearby university, contributing to air pollution and carbon emissions. Meanwhile, I would get on my bike on the weekends for fun.

Starting on Tuesday, I had to get to work and around town by “self-propelled means,” so I started biking the two miles to work every day. It wasn’t always easy. I have an addiction to high-heels and cute outfits, so I took a big backpack full of clothes and rented a locker at the gym at my work for $10 a month. And if I wanted to get to the other side of vast Houston, trying to get there using public transportation sometimes requires three or four bus changes!

After the challenge, we didn’t keep moving around everywhere without the car. Some days are too hot; others are too cold or rainy. The transportation and bike lanes in Houston aren’t so great, so we often have no choice. But I kept biking to work, and a cool morning breeze and chirping birds are part of my daily routine. My car spends most of its time in the garage, and most of the $4,700 car budget stays in my pocket. The challenge cemented our preference of living in the city, where we can walk or bike to restaurants and I have easy access to work.

Total Savings: $4,580 a year

Wednesday: Food
Before the challenge, we ate nutritiously but bought all our food at the grocery store, which has more packaging, is more likely to be processed and is shipped from thousands of miles away. I had no awareness of farmers’ markets whatsoever.

Starting on Wednesday, we had to buy all our food locally-ideally produced within 100 miles. It was a lot more work, involving a trip to the farmers’ market, then another one to the grocery store to get anything you still needed. I had to cook every day instead of getting prepared food, and was limited to just the vegetables that were in season.

After the challenge, we slid back into shopping at Whole Foods the majority of time for convenience, which costs us more. But we cut meat out of our diets, because of the resources it takes to raise it and the way animals are treated at industrial farms. That and cooking at home together lowers our grocery bill. Financially, it’s a wash. But when it comes to my carbon footprint and the amount of pesticides on my food, I feel like I’ve won.

Total savings: $0

Thursday: Energy
Before the challenge, we used to watch a lot of TV, paying $65 a month for cable, and like many Houstonians, we switched on our air conditioning and heat as soon as we got slightly uncomfortable.

Starting on Thursday, we had to unplug completely, using no electricity whatsoever. Instead we spent time with each other instead of our electronics. We also hung our clothing out on the line to dry. It required some adjustment, especially because the clothes didn’t turn out as soft and fluffy as with the dryer and it was more work than throwing everything in the dryer. It was October, so we delayed turning on the heat.

After the challenge, we went right back to using our air conditioner and lights like normal. If you didn’t know, Houston is hot in the summer, and unlike Colin, we like to do things with the lights on at night instead of by candlelight. Yes, I loved the idea of playing with my daughter by candlelight, but it’s so much easier to flick on a switch. And someone is usually on the computer.

But now instead of gathering in front of the TV at night, my husband will get in a workout, my daughter will do her homework, I’ll read a book, and we’ll gather in the kitchen to cook a meal. On weekends we’ll go out for a bike ride or a walk. And now we really like that the clothes hung on the line come off smelling like sunshine and fresh air. I just throw them in the dryer for a couple minutes with a wet rag for humidity to fluff them up. We turn on our heater much later than everyone else, using sweaters and cozy socks instead. (And avoid the drying effect of artificial heat on our hair and skin, too.)

In the last two years, both my electricity and gas bill have gone down, even though the cost of electricity and gas went up where we live during that same time period.

(Use these strategies from a rocket scientist to save on your own bill.)

Total savings: $1,650 a year

Total yearly savings after the experiment: $21,590

Doing It With Joy

The No Impact Project certainly was a challenge, but I never doubted the worth of the experiment. Deep inside of me I knew it was the right way to live. Right now people are competing for what car they drive and who has great clothes, and that is not making anyone happy. So even if changing my habits hadn’t saved me so much money, I would have done this anyway. It was just an enormous perk!

My daughter and husband are also very conscious about the environment and really enjoy participating in all these activities. If it gets too hard, they skip it. And so do I. When I have to take my car, I take my car, without the guilt. This week-long experiment just gives you a window into what is possible, it doesn’t force you to live uncomfortably.

What I Do With The Money I Save

Now that I’m saving so much money, we haven’t started spending more money on, say, more clothes or a better car. Instead, I shuttle that money to my emergency fund. It’s always good to be prepared.

And I love that it frees up money for little splurges. For example, we now have a green company that comes to clean our house once a month. It’s a treat!

Maria J. Pesantez is a financial and grants analyst at the Baylor College of Medicine in Houston, Texas. She lives with her husband and 11-year-old daughter in the city.

The Value of Delayed Gratification

by Beth Kobliner, Huffington Post

“Are we there yet?”

“Is it my turn now?”

“I’m bored!”

Waiting for anything is so hard for kids. Whether it’s for a swing in the park, a trip to the zoo, or saving for a new pack of Gogo’s (my son loves these plastic figurines — anyone else’s kid obsessed?), our children are learning a powerful life lesson: how to delay gratification.

It all began with a marshmallow. In the late 1960s, Stanford professor, Walter Mischel, gave little kids one marshmallow and told them they could eat it now, or wait and be rewarded with another one later. Then, he left them alone for 15 minutes. Some kids caved and ate it, while others waited, even though it was agonizing.

Mischel tracked these kids throughout their lives and his findings were remarkable: The kids who were able to delay gratification had fewer behavior problems, lower stress, stronger friendships, and even higher SAT scores!

In fact, a recent Wall Street Journal essay argues that French parents are superior because they teach their kids to wait. (First, French women don’t get fat and now they’re better moms? Mais non!)

So, how can you raise one of these marshmallow-waiting, money-saving, super-savvy kids? There are lots of tips on waiting and saving in Money as You Grow, a project I am working on as a member of the President’s Advisory Council on Financial Capability. Money as You Grow is a set of 20 age-appropriate financial lessons that kids need to know as they grow, written in simple, down-to-earth language.

Here are some teachable money moments to try, with options for kids of all ages:

For kids age 3 to 5…
You may have to wait before you can buy something you want.

When your child is standing in line for a turn on the swings, or looking forward to her favorite holiday, point out that sometimes we have to wait for things we want.
Find three jars (or cans) and label one for saving, one for spending, and one for sharing.
Suggest that your child put some of the money she gets into the saving jar, so she can buy a toy or treat when she has saved enough.

For kids age 6 to 10…
It’s good to shop around and compare prices before you buy.

With your child, compare prices for a particular toy at various online or brick-and-mortar stores.
Use coupons and discount cards and show your child how much you are saving.
Consider allowing her to keep part of the savings, but only if she helps clip or print out coupons.

For kids age 11 to 13…
You should always try to save at least a dime for every dollar you receive.

Encourage your child to always save 10 percent of the money he gets.
Have your child set a goal to buy something he wants and have him work toward that amount.
To reinforce the savings habit, go to the bank two to three times a year with your child to deposit savings into his account and look at how much bigger the balance is on each visit.
Consider a “matching plan” for your child’s savings: You put in 25 cents for every dollar he saves.

For kids age 14 to 18…
A great place to save and invest money you earn is in a Roth IRA.

If your child has a job, encourage him to open a Roth IRA (Individual Retirement Account).
Explain that a Roth IRA allows the interest you earn to grow tax-free for life.
Experiment with different amounts of savings and interest rates. Use a compound interest calculator at investor.gov.
Use the “Rule of 72″ to estimate how many years it would take to double your money. If you invest in an account that earns 8 percent interest, you’ll double your money in nine years (72 divided by 8 is 9).
Explain to your child that once he starts a job, he may be offered a similar account at work called a 401(k). Some employers even provide matching contributions.

For kids age 18+…
You should use a credit card only if you can pay off the money owed in full each month.

Understand that when a parent cosigns, any late payments you make will also affect their credit history.
Paying bills late can hurt your credit history and affect your chances of getting a job.
Get free credit reports once a year at annualcreditreport.com.
Look for a credit card with a low interest rate and no annual fee.
There may be an emergency expense that you can’t pay off immediately and need to charge. That’s why it’s important not to charge everyday items.
To learn more about the credit card rules, go to federalreserve.gov.

How have you encouraged your kids to wait or save money? Share your stories!

Seven Cures for a Lean Purse

I was listening to a BBC programme 2 days ago and the subject of discussion was whether self-help books are any good. Some listeners said it changed their lives, while an equal fraction commented that these books are utter rubbish and full of crap.

The Richest Man in Babylon by George Classon is not exactly a self-help book but rather one that shares the “secret” of how an ordinary person can become, simply put, rich. Aunty Scroogey recommended me this book donkey years ago. I’ve read it, and listened to it over and over again on audio, and right now, its my daughter’s favourite night time story (I’m totally serious). Here’s an excerpt.

This is one of my favourite part/chapter of the story:

7 Cures for a Lean Purse

1. One-tenth of what I earn is mine to keep
2. Budget thy expenses
3. Make thy gold multiply
4. Guard thy treasure from loss
5. Own thy dwelling
6. Insure against future income
7. Increase thy ability to earn

This few liners sounds simple but takes discipline to follow through. The philosophy behind these seven cures have been used many times in other finance related self-help books. If you are looking to rearrange your undesirable financial position, look no further.

Multiple Sources of Income

“A horse cannot gain weight if not fed with extra fodder during the night; a man cannot become wealthy without earnings apart from his regular salaries” ~ Chinese proverb

The Auntie prefers public transport to having her own vehicle to travel around. Why so? Because not only do you, NOT have to drive your own car, you actually get to hear / see amazing things on the buses and trains, such as comments like “Whoa!!! I wish I can be Li Kah-shing’s god-son, then I won’t have to worry about the rest of my life.” Yeap, I did hear such a thing before.

Aunty Scroogey can’t think of any ways to turn you into Li Kah-shing’s god-son or god-daughter, but I can breakdown the big picture and explain in laymen terms how people like him get to where they are, and perhaps from there, you could strategize and brainstorm a financial path for yourself to walk. Let’s, for a moment, examine how did Li Kah-shing himself get to the stage where he need not worry about the rest of his life? Well…. he built multiple streams of income. Same goes for people like Wee Cho Yaw and Robert Kuok. What do I mean by that? Quite simply, these people do not just depend on one source of income.

Take Wee Cho Yaw for example, what business do you think he is involved in? Many of you would say banking, being that he is the Chairman of United Overseas Bank and the largest shareholder of the bank. However, the story doesn’t end there. If you dig around a little bit more, you’ll find that the guy also has a substantial stake in and controls property company UOL Group Ltd (in which the Pan Pacific and ParkRoyal hotels are part of), diversified corporation Haw Par Corp Ltd, real estate developer Kheng Leong Co. (Pte) Ltd just to name a few.

What about Robert Kuok? His business interests are wide ranging, stretching from the sugar trade to oil palm production to Shangri-la Hotels to property development to publishing, and the list goes on. As for Li Kah-Shing, the list is almost endless – telecommunications, real estate, port operations, energy, infrastructure, life sciences, retail, etc. And oh, did I forget to mention that he owns Aunty Scroogey’s favourite personal store, Watsons?

How about yourself? Do you only depend on only one source of income? What happens when that source collapse? What do you fall back on? It takes time to see the fruit of your labour, so start thinking of building up alternative sources of income NOW, if you haven’t done so. Afterall, the 3 men mentioned above did not build their various sources of cashflow overnight either. Aunty Scroogey’s role is not to spoon feed you what you should be doing, but rather to get you thinking so that you will start to take some actions. Only you yourself will know what you are good at doing and what suits you best. And most importantly, have fun while you are at it :)

A tale of 2 properties

With all the buzz about property measures these days, where does that leave us in terms of property investment? Auntie Scroogey shall partly answer that question by telling you a tale (it’s a true story by the way) about 2 properties.

I’m sure you must have heard before, from older folks or otherwise, that when it comes to buying property, it’s all about location, location, location. Indeed, at any given point in time in the property cycle, the single largest determinant of property price is its location.

In the 1970s, there were 2 brothers who each bought a property. The older brother bought one in Nassim area, while the younger brother bought one in District 15 East Coast area. Both have roughly about same size living area, both are freehold properties, both were brand new properties at that time and both were bought at around $100,000 (which was rather substantial back then). Fast forward it to 4th quarter in 2010, the Nassim piece is worth circa $6-7 million while the East Coast property is valued at $2.5 million.

Why the drastic difference? That’s because the Nassim area is closer to town (almost in town itself). In land scarce Singapore, a good, strategic spot is almost as valuable as striking gold. In addition, the area has grown much in importance as the country progresses.

In case you’re thinking that the nearer to town it is, the higher the property price, well…… think again. A quick check with records of resale HDB transactions indicate that in 4Q2010, a 3-room HDB flat in Jalan Besar / Veerasamy Road (about 10 mins walk to Bugis MRT) transacts for low $4xx psf while over at Holland Close/Drive, the same size unit transacts at least $5xx psf during the same period, with the higher floors registering $6xx psf. Both HDB units have 2 bedrooms and 2 bathrooms.

What accounts for the difference in this case is the appeal of the location. No doubt the former is located closer to town area, it is the latter’s proximity to the upmarket, exclusive Holland estate that allows it to command a higher premium.

So if you were to invest in a property, which area would you choose considering capital gains potential, rental yield and your budget?

How to save $ on grocery shopping

Aunty Scroogey often writes about the “big money”, so I thought it might be a refreshing change to talk about the “small money”. Small money, when accumulated & utilized properly, transforms itself into big money. And I don’t know anyone who doesn’t like big money.

1. Always write down your shopping list, and stick to it. Better still section your grocery list into food, non-food, household needs, toiletries and etc. This way you buy only what you need and save time wondering down the aisles repeatedly.

2. Do your grocery shopping on a weekday. Parking is cheaper, there’s usually no maddening crowds and things are magically easier to find (tried and tested!). A minute saved is a penny gained isn’t it?

3. When reading your daily paper do keep a look out for special deals and promotions. Sometimes savings can really be substantial, especially on frequently purchased essentials like diapers and coffee.

4. Always have your meal before doing your grocery shopping, otherwise be prepared to buy more than you require. Shoppers who go to the supermarket hungry usually end up buying a lot more food (especially junk food) then they really need. <—- the scientists/researchers said this, not me :)

5. You must have heard this one many times. Budget your grocery spendings and stick to it. It is usually a balancing act. If you must have that expensive pate, then buy other items at no frills price. Supermarket house brands are usually just as good as the other established labels because the products are usually from the same source.

6. Cook at home from scratch. Even if you think you can’t, anyone can. Skip the frozen meals aisle and don’t let excuses and your lazy bones tell you otherwise. It doesn’t have to be a fanciful 3 course dinner everyday. A simple pasta bologna serves its purpose of being nutritious, wholesome and cheap. Planning your meals at home in advance also means you will only buy what you need and nothing more.

7. Buy only whole, real foods, and not processed-to-death instant junk. Don’t even think of picking up something that boldly prints “Just add water!”. More likely than not you won’t recognize 1 word from the ingredient list. Not only does this save you money, but more importantly your health too.

8. Buy based on price per gram/pound/kilos, especially if its an essential you need often. That bigger jar of peanut butter is definitely a better buy than it’s smaller counterpart.

9. Avoid disposable packaging as much as possible. Individually packed biscuits definitely cost more than regular family sized bags. Besides you can use your pretty cookie jars. No amount of plastic wrapping can beat that!

10. Go shopping alone or just with your partner. Bringing your tag team and the entire village with you means your supermarket trolley will load up on its own with things that you probably haven’t seen before in your life.

Come share your tips if you have more!

Absolute Value vs Relative Value

Wow! Without realizing it, it has been 1.5 years since Aunty Scroogey’s first post in this blog as a guest columnist. The Aunty hopes that all her readers out there have picked up a thing or two about financial matters from her blog posts. But remember, doing homework on your own is important if you want to make faster progress in your financial education.

Given that it has been 1.5 years of basic training, it is about time that you should start to venture into something more intermediate, starting this year. For a start, as serious investors, you should be looking at relative values instead of absolute values like most laymen do. If you’ve been following my posts since the early days, you would have an idea of relativity in the context of expenses versus spending power. Looking at relative returns as an investor is somewhat similar.

Let me give you an example. Mr & Mrs FPN sold their property, which they bought for $2 million 5 years ago, for $2.3 million. On the other hand, Mr & Mrs SQW sold theirs for $750,000. They had bought the property for $500,000 5 years ago as well. To make matters simple in this illustration, let’s ignore transaction costs. So which couple had a better return? Most laymen will say its Mr & Mrs FPN, as they earned a profit of $300,000 while Mr & Mrs SQW’s profit was only $250,000. Well, these are absolute values. If you are serious about being a serious investor, this is NOT the way you should be assessing your investments.

Assuming both couples made a downpayment of 20% on their respective properties, it worked out to $400,000 for the FPN couple and $100,000 for the SQW couple. Assuming uniform funding costs for both couples, it means that Mr & Mrs FPN registered 75% return on their capital. What about Mr & Mrs SQW? Well, the returns worked out to 2.5 times their capital or a whopping 250%!!! So, who did you think have a better return from an investor’s perspective?

Just as whether an item is cheap or not is relative to earning power of the person in question, whether you have good returns is relative to the capital that you have to put up to acquire the investment. If you’ve always been looking at absolute values to judge your investments, it is perhaps time to have a change of mindset. What better time to do so than to start doing it in the new year?

Homework: Google and understand the meaning of CAGR, which stands for compound annual growth rate. When and how do you use this ratio?

Tax Planning

As the saying goes, there are 2 things in the whole that’s inevitable. Death and taxes.

Around this time of the year, Aunty Scroogey gets very busy with tax planning. Sometime in March 2011, we would all be doing our tax filing for YA2011. Note that YA2011 is for income earned in 2010. At times, you will hear news about people getting heavy penalties for tax evasion. Aunty Scroogey wonders why they need to evade tax when there are 101 ways to minimise your tax payments LEGALLY.

So what are the tax planning tools that AS uses? For today, I will discuss about 2 of them.

1) CPF cash top-up
(A) If within 2010, you or your employer make a cash top-up to your CPF account, this top up amount qualifies for tax deduction when you are filling returns for YA2011. For example, if you top-up $3,000 in cash, this will shave off $3,000 from your taxable income. The top-up money will go to your Special Account, which earns interest at a rate of 4% p.a. – not bad as a risk free investment and if you were to ask yourself which bank in Singapore will pay you that kind of rate for term deposit. However, the top-up amount is capped at $7,000, which means that even if you make a top-up of $10,000, your tax deduction still stands at $7,000.

(B) Separately, you also qualify for tax deductions if you were to make a cash top-up to the CPF accounts of your family members such as siblings, spouse, parents or grandparents. To qualify for tax relief for cash top-ups for siblings/spouse, the sibling/spouse must have either (i) earned $4,000 or less or (ii) is handicapped.

So, a combination of (A) and (B) above would have helped to shave a total of $14,000 off taxable income, if conditions are met. For details, please refer to the CPF website (www.cpf.gov.sg). In order to effect the top-up, download the relevant form from the CPF website, fill it up and send it in together with your cheque. It’s that simple!

2) Tax deductible donations
The second method is more straightforward and there is no cap. It was announced in Budget 2009 that for all donations which presently qualify for double tax deductions, made in the calendar year 2009, would temporarily qualify for 2.5 times tax deduction. For eg, if you donate $100, then $250 is shaved off from your taxable income that year.

To encourage greater charitable giving in Singapore as the economy recovers, the MInister for Finance has announced in Budget 2010, to extend the tax deduction of 2.5 times for another year for donations made during the period from 1 Jan 2010 to 31 Dec 2010. As to whether it will be further extended, we will need to keep a lookout during Budget 2011, or check the IRAS website from time to time (www.iras.gov.sg). Also, to check specifically what type of cash donations qualify for the tax deduction, check the taxman’s website as well!

Adequately Insured

Up till now, Aunty Scroogey have not really talked much on the subject on insurance, as she is no expert in this area. But what Aunty Scroogey does know is that one needs to be adequately insured and make projections into the future based on worst case scenarios.

There are so many different types of insurance – life policies, endowment plans, fire insurance, motor insurance, maid insurance, mortgage insurance, hospitalisation plans, etc – so how do you make sure that you are adequately insured? Answer: by reviewing your policies on a frequent basis.

If you think that you’ve already bought a policy when you first started working, and that you are properly insured since then, how wrong can you be! And you’re probably not alone in this way of thinking, there are hundreds, if not, thousands of folks who think the same. Our financial and insurance needs change as we go through different parts of our life cycle. Perhaps the last that you bought a policy was after the birth of your eldest daughter, now that you have 3 kids instead of 1, the amount of coverage probably calls for an increase or additional policies.

Or that you could be someone who decided to have an early retirement. Previously, your medical and hospitalisation needs were met by your company’s generous medical budget, but now that these benefits are no longer available to you, you might want to re-look at the hospitalisation plan you’ve purchased 5 years ago and see if it is comprehensive enough given your change in employment status.

Or that you have just bought your dream home together with your spouse. A mortgage insurance is certainly a must, to ensure that your spouse is able to service the remaining mortgage should something happen to you. In the event that your spouse decides to sell the property, having a mortgage insurance also ensures that he/she is able to hold the piece of real estate in a depressed market and wait till property prices recover. In short, he/she would be able to sell by choice and not by forced circumstances.

Not surprisingly, insurance is one of the most neglected issues in most people’s lives. If you are not sure whether you are adequately insured, perhaps it’s time to catch up with your financial planner soon.