Financial Peace University: Weeks 5 & 6 Check-In

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Hi everyone!

Welcome back for our Weeks 5 & 6 check-in on our Financial Peace Journey.

Financial Peace University is a weekly course that takes place over the course of 9 weeks; if you’re interested in checking it out, you can go to his website and search for nearby classes. We’re taking ours through our church.

Things got so busy between our jujitsu clinic and Medicare election periods that we missed a week, so we’re doubling up this weekend.

Financial Peace University - Buyer Beware & The Role of Insurance [Weeks 5 & 6 Check-In at High-Heeled Love]

Buyer Beware: The Power of Marketing

This segment was really interesting to me. While I was aware of the concept of product placement, I’d never thought very much about how invasive marketing campaigns can be in our ever day lives. I’ll give you a few examples:

  1. VIP programs & coupons – I love my 5% off everday at White House Black Market for being a gold member with them. In fact, they sent me a $25 “gift” card that expires today, and I’ve been wrestling internally all week about wanting to go use it.
  2. Brand Loyalty– We are very much an Apple family, and generally we’re okay with spending the extra money because we truly believe the products work well and last a long time. Iphones, Macbooks, AppleTV, Ipads – they all live in our house. The Mister pores over the developers conferences and press releases. I’m proud to report though that we’ve both said no to the Apple Watch. As cool as it is, it’s way too expensive for what it does.
  3. Loyalty & Punch cards – I am so in the Starbucks gold card club. I cash in for the free drink every 12 visits. Our favorite restaurant has a loyalty program that gives you $2.50 in credit for every $25 you spend; we use that to pay for special occasion dinners, but it’s rare that we ever have a meal there that totals less than $25.
  4. Blogging – I love our community, but it’s hard to read a review from a blogger I trust and not want to take her recommendation. I’m trying to look these more as research when I’ve decided I am going to purchase a product rather than motivation to purchase something I wouldn’t have bought ordinarily.

Our Progress

Part of the homework for the week was to determine what a “major purchase” is. For us, that’s about $100, excluding clothing.

Since really talking about some of the ways we do fall prey to marketing campaigns, I’ve been a lot more aware of emotional connections to “products.” Catalogues are usually headed straight the recycling bin, and I’ve been waiting 3-4 days to be sure that a purchase isn’t just an impulse based on marketing.

Also, I’ve been recognizing that it’s okay to indulge if there’s a place for it in the budget. That’s why we have pocket money. If I want to try a new lipstick shade or have a cocktail or reload my Starbucks card, that’s why I have a little fun money each month.

The Role of Insurance

As an insurance agent, this was the week I expected to be most controversial for me. There’s a lot of hype out there in my market about his opinions on whole life and other types of insurance.

Honestly, I was surprised when watching the lesson about how much I do agree with him about.

  • I do usually recommend term life insurance for families seeking income replacement (though I think there are times when whole life has a place).
  • My agency was formed to specialize in long term care insurance (but I plan to buy at an earlier age than Dave recommends). 
  • High deductible health plans are what I sold 99% of the time (provided that the consumer understood how important it was to fund the Health Savings Account) before the market changed so much with the ACA changes.

So I was pleasantly surprised that I was in agreement with most of his teachings, though I would have preferred if he had not characterized mosts insurance agents as bottom feeders.

Our Insurance Review

We’re pretty much in line with what Dave Ramsey recommends:

  • Health Insurance – We carry a high deductible health plan and fund a health savings account
  • Life Insurance – We each have term coverage that’s appropriate to our household income
  • Home – We carry the highest limits and have a higher deductible; we also have substantial identity theft protection and separate coverage on my fine jewelry
  • Auto – We have the highest limits the state allows us to carry. The deductibles are a little lower but only because there are enough premium savings to break even on the additional risk.
  • Umbrella Liability – Since we own my business and have assets to protect, we purchased an additional liability policy last year that stacks on top of our home or auto.

In addition to our personal coverages, I also have business property and liability.

The coverage that Dave recommends (and so do I) that we don’t have is disability. Since most of my income in residual, it would be hard to prove a loss of income if I became disabled; the Mister hasn’t been in his field long enough to qualify.

Also, the discussion and insurance review brought to the fore front that we have not yet taken care of our wills and powers of attorney, which needs to be addressed this year.

What marketing campaigns are you susceptible to? Have you reviewed your insurances with your spouse or family lately? Is there anything you’ve been putting off getting taken care of?

Want to catch up on our financial peace journey?

Week 1 Check-in
Week 2 Check-in
Week 3 Check-in
Week 4 Check-in