Editor's note: Liz Seymour is a stay-at-home mom and author of "Moms and Money," a new ClarkHoward.com series focused on helping moms establish a solid financial plan and better understanding of household finances — all while juggling the endless duties of a stay-at-home parent.
I consider myself a fairly well-educated person. As the stay-at-home mom to three children, and chief caretaker of a hardworking husband, I can multitask with the best of them. When I experience moments of not being appreciated, I occasionally fantasize about my family's coping skills if something tragic were to befall me (don't tell me you haven't indulged in this fantasy, too). A lot of things would fall through the cracks: clean uniforms, balanced lunches, quick access to the next book in the currently favored series — and that's just the tip of the iceberg. Oh, and you can kiss those personalized, hand-decorated birthday cakes goodbye, kiddos!
Thinking about the unthinkable…
But when I turn the tables and force myself to think about the unthinkable — what if something actually did happen to my husband? – it's not so pithy and definitely not pretty. For all of my education, I choose to spend my brain power participating in three book clubs – none of it on family finances. The bills get paid, investments made, insurance policies renewed — and none of it by me. Lovingly frosted birthday cakes may be sweet gestures, but they can't quite compete with the responsibilities of keeping the family fiscally afloat.
It's time to pull your head out of the sand
So call it a New Year's resolution, or simply a long overdue wake-up call, but I am pulling my head out of the sand and facing these fundamentals head on.
And what better place to start than familiarizing myself with the first thing that will come into play if one of us passes on: life insurance. Most employers offer a basic plan, but "basic" is the key word here. It's certainly not going to keep my kids in private school, music, dance, etc. In other words, in order for us to maintain a semblance of the lifestyle to which we've become accustomed, we need a policy that amounts to approximately 10x the annual earnings of my spouse. And that's just his policy.
The importance of another kind of insurance
What about me? I don't earn a paycheck, but unless my husband has my replacement lined up immediately (a worthwhile inquiry), he's going to need to pay someone to cook, clean, chauffeur and everything else. Again, his employer has a very rudimentary policy that pretty much covers my funeral costs and certainly not cake-baking levels of childcare.
Then there's this scary statistic: You are 4x more likely to become disabled during your working lifetime than you are to die during your working lifetime. Yet not many of us invest in disability insurance. I know we have some for my husband, but we're up a creek and begging the grandparents if something happens to me, which is not exactly a sound strategy considering none of the grandparents live in town. Plus there's the possibility that they wouldn't even have the money when we needed it.
Read more: Easy, affordable way to buy life insurance
So where do we start? At the beginning – with some research on choosing the right insurance for your family. With a little digging, and a little guidance, you can get a policy that doesn't break the household budget. And while adding an extra expense is never fun, you'd rather be safe than sorry when it comes to taking care of your family.
So before you start shopping, here's more on how to find the best policy for you and your family.
P.S. We're also working on eating more veggies and fewer cakes around here…
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