How Many Lives Do You Touch?

Josh at Becoming Minimalist had a very thought-provoking post earlier this week about influence and how people are constantly striving to have more of it. The main idea of his post is that each of us already has a ton of influence.

Doubting Our Influence
It’s easy to fall for the belief that we are all just one little gear in the machine of life. It’s easy to believe that our individual actions do not have an impact on the world around us. With more than six billion people on the planet, that belief is certainly understandable. Maybe it’s just the lazy way out, but we often downplay our importance and use this to rationalize our decision to not be that positive, uplifting presence.

You Touch More People Than You Think
However, using the analogy of being a gear in the machine, you don’t have to actually touch every other gear to have an influence on them. Think about it. If you greet the person at the coffee shop with a smile and ask how their morning is going, if you hold the door open for someone at work, if you come home and give an encouraging word to your spouse, help your child do their homework or learn a new concept, and send a friend an encouraging message on Facebook (or even better, on the phone), that adds up to five influential actions. That’s five other gears that you’ve put into motion. And who knows how many other gears each of those will touch and put into motion, all as a result of your actions. There’s a new television show on Fox called “Touch” that does a pretty good job at illustrating this concept. One action done at the right time can trigger a series of events and have a positive influence on a whole chain of people.

The Ultimate Influence
Our little boy is now just over a year old. At this point in his life, virtually everything he learns is from my wife and me. As parents, we have a tremendous influence on our children. Consequently, we have a (smaller) influence on every single person our children will come into contact with. When you think about it that way, it’s easy to see how important it is to be an example of compassion, responsibility, integrity, and hard work. You may never actually meet the people you end up influencing; just know that you are making a difference.

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Our Parenting Mission Statement

I’ve mentioned on here several times that my wife and I have a little boy who just turned a year old last month. Well, while we were expecting our baby boy’s arrival, I stumbled upon the idea of having a parenting mission statement. Much like a company’s mission statement, our parenting mission statement presents our guiding principles and hopeful results of what we will strive to do and achieve as parents. Any new parent knows that it is an awesome responsibility, and my wife and I take it seriously. Below is our parenting mission statement, which we printed, signed, and have posted on our refrigerator. In full disclosure, I did not write all of this. I found a great example online that I absolutely loved. I couldn’t write a better one, so I just changed bits and pieces here and there.

Our Parenting Mission Statement
We will work together as partners for the best interests of our children. We want them to be functioning, responsible, healthy, respectful, content, and headed towards a purposeful life. We want them to enjoy childhood, full of memories and traditions. We will do whatever we can within our power to provide the environment they need to achieve that: with loving structure, natural and realistic consequences, shelter, stability, nurtured individuality, and an environment that encourages safe learning. We will strive to have an environment with respect and nourishment – physically, mentally, emotionally and spiritually, so that they may experience the fullness of life and their own individual potential.

Though we may not always agree, we will work to present a united front, postponing decisions on discipline until we have time to not only rationalize, but to communicate and reach a mutually acceptable decision.

We will strive to listen to all sides of a conflict, independently and without interruption, so that we may make the best choice for the child involved. We will also work to recognize each child’s personality, their strengths and weaknesses, and how to approach and parent them effectively without letting our own preferences in parenting influence us. Every child is different and responds best to techniques tailored to them.

We will be open to discussing any and all matters regarding our children so that miscommunication and tension are minimized. Each of us will strive to parent the children to the best of our ability and care for them completely. We will not allow ourselves or anyone else (children included) to treat or speak disrespectfully to either of us.

We agree that when we discipline, it will be fair, consistent, and agreed upon. We will also ensure that the child is informed that the discipline a result of the behavior or decision, not because of the child as a person.

We also agree that if a mistake is made, we will first allow the parent who made the mistake to correct it, and then have it gently and positively reinforced by the other parent, to the children. We will both strive to be an understanding, consistent and stable person in our children’s’ lives, and make sure that they know that we will be there for them.

We will not undermine or otherwise create the appearance of division to the children, and if we do, we will strive to reinforce our unity to them as soon as possible.

We will work together to be the head of our household and to allow our children to be children. We will work to create a safe environment for our children, guided by structure and predictability.

Can Buying a Zoo Pass Save Money?

With my wife being a stay-at-home mom, she’s always on the lookout for things to do with Tyler. Now, our little boy is only a year old, so the options for activities are fairly limited. One thing we decided to do this year was to buy a family zoo membership. I remember going to the zoo as a child and watching the animals (I’ve always been a fan of monkeys). It was always fun, and I enjoyed it.

I fully realize that our 1-year-old son isn’t going to totally understand the zoo, but he looks around and watches everything. He sees the animals and starts babbling. Right now, he calls just about anything with four legs “dog”, but in time he’ll learn. Taking your kids to the zoo is one of those things that I believe is under-appreciated today. I mean, the zoo can be an educational wonderland for kids (and without them even realizing it). It engages the kids and encourages curiosity and learning. As Tyler gets older, I’m looking forward to answering all the questions he will have about the animals.

From a financial standpoint, the regular per-visit admission price for an adult is $8 (children under age 3 are free). Our family zoo membership cost $65 and includes my wife and I plus all our dependents under age 18 (just Tyler for now). We also added the option to add one guest pass for $15, bringing the total cost of our zoo membership to $80. But for that $80, we can go the zoo as many times as we want for the entire year. An additional perk is that we get discounted admission to a lot of other zoos throughout the country, which is nice.

For Amanda and I to break even on this, we need to go to the zoo for a total of 10 visits ($80 for the membership divided by the $8 regular per person admission = 10 admissions). Now, this is 10 individual visits and not 10 family visits. So, if I’m only able to go 3 times (say, on weekends), and my wife goes 7 times (on weekends, plus the occasional visit during the week), the membership will be worth it. The thing is that my wife is home taking care of Tyler all week, so I know they will go to the zoo a lot. And with the guest pass, she can even take someone else along on those trips.

So, how much can we expect to save by buying the zoo pass? Our zoo is open from the beginning of April pretty much through Thanksgiving, which comes out to around 35 weeks. Even if we go to the zoo once a month for those eight months, that makes a total of 16 admissions. This would normally cost $128, but with our zoo pass is only $80. Total savings = $48. Realistically for us, that is a pretty low estimate. I think a more accurate estimate is that we’ll all go once a month (16 admissions), but that Amanda will probably go to the zoo during the week with Tyler and a guest (a grandparent, aunt, etc.) at least once every three weeks (another 12 admissions). This makes a total of 28 admissions that would normally cost $224, but with our zoo pass is only $80. Total savings = $144. This doesn’t even include the savings from the guest pass, which would be another $96 (since the guest wouldn’t have to pay for their admission on those 12 trips).

If you live fairly close to a zoo and have children, a family zoo pass can be a huge money saver.

Life Insurance: What, Why, and How Much?

Life insurance is one of those things that we would rather not have to think about. It reminds us that life is finite, and that no matter how careful we are with our driving, our health, our habits, etc. we only have limited control over when we die. It’s a rather sobering thought.

Even more sobering is the thought of leaving your family to deal with the financial aftermath of it all if you don’t have life insurance. Here is where the questions start and what today’s post attempts to answer. Generally, there are four primary questions regarding life insurance:

– Who needs life insurance?
– Why do I need life insurance?
– What kind of life insurance do I need?
– How much life insurance should I have?

Before getting into the answers, it helps to define what exactly life insurance does. Basically, when you purchase a life insurance policy you enter into a contract where you agree to pay a certain dollar amount (called a premium) every month/quarter/year in exchange for a certain dollar amount (called the face value) when you die. Insurance policies generally exclude death due to suicide, acts of war, and other things, but every policy is different. Be sure to read the fine print.

Who needs life insurance?
The purpose of life insurance is to protect against loss of income when a person dies. Depending on your individual life situation, you may or may not need life insurance. For example, a single person with no dependents probably doesn’t need life insurance (or at least only a small amount to cover funeral expenses). In this case, there is no surviving spouse or children that need your income to provide for them. But if you have anyone that relies on your income for support, you need life insurance.

In general, you probably need life insurance if:
– You are married
– You have children

Why do I need life insurance?
As I mentioned above, life insurance is to protect against loss of income. Using myself as an example, my income is super important to my family. We are a single income household, with my wife staying at home to take care of our son. If I were to die, they would absolutely need to replace my income. We have a mortgage on our house, we have an automobile loan, and we have Tyler’s college to help pay for. And all of these things are beside the fact that it takes money to buy groceries, pay the bills, and have a little fun every so often.

Everyone’s situation is different. Maybe both you and your spouse work, and you have no children. But maybe your mortgage is too large for your spouse to handle with only their income if you were to die. Maybe you’re a single parent with children. Should something happen to you, your life insurance could provide for your children. Or maybe you just want to leave your spouse or children a pile of money if you die. The point is that most people need life insurance to some extent. You may not need enough to replace your entire income for 40 years, but you need something.

What kind of life insurance do I need?
There are two primary types of life insurance: term and whole life. The difference is that term life insurance, as its name implies, is only effective for the term of the policy. You can get terms as short as 5 years to as long as 35 years. So, if you die within your policy term, your beneficiary receives the face value of your insurance policy. If you die after the term expires your beneficiary receives nothing, as the policy is no longer active. Term life insurance generally offers the lowest rates, and is generally the type of insurance most people should have. Whole life insurance is effective until death, so you don’t have to worry about out-living the term of your insurance policy. However, the premiums for whole life insurance are higher than for term life insurance.

Personally, I purchased a 30-year term policy for several reasons. After 30 years, our son (and maybe other children) will have grown into independent adults and will no longer need my income for support. After 30 years of regular contributions, our retirement fund will be sufficient to provide for my wife’s needs.

A lot of insurance agents get paid (at least partially) on commission based on the annual premiums of the policies they sell. As such, there is an incentive to recommend whole life policies that cost more, but that most people don’t really need. Stick to your guns and go with term life insurance.

How much life insurance should I have?
There is no one answer to this question. A lot of times you’ll hear guidelines saying that you need 8 to 10 times your annual salary as life insurance, but that is a VERY general rule. It doesn’t take into account your personal situation, which may indicate that you need either more or less than that. Here are a few steps to figure out how much you really need.

1. Add up all debt you want paid off if you die.
For us as a one-income household, I would want our mortgage and car loan paid off. Having those two monthly payments gone would be a huge help to my wife and son. (Total insurance need: $120,000)

2. If you have children, estimate how much they’ll need for college.
Education is very important to us, and we want to make sure that if something happened to me that Tyler would still be able to afford college. The difficulty here is figuring out how much tuition and housing will be 18 years from now. A good guess is that rates will keep rising around 5% a year. So, if I figure a year’s tuition, housing, and books at a good state university right now is around $20,000, I should plan on just over $200,000 for his four years of college.

3. Figure how much income will need replaced for your spouse/children to live on
This is the most difficult part and can vary widely depending on your situation. In a two-income household, you may not need to replace as much of your income. Personally, our thoughts were that we wanted enough to replace my entire income until our son was in school (when my wife would re-enter the workforce) and then replace half my income from then until Tyler was 18. One thing to point out is that we included retirement savings as an expense in these figures. So, my wife would still be contributing to the retirement fund all this time. (Total insurance need: $500,000)

As a side note, I think very highly of my wife and have no doubt that if I die, it won’t take long for a line of suitors to come after her. And if she re-marries, our life insurance need would be less.

I know that over the 30-year term of this policy, things can change. We could have additional children. Our debts will gradually become lower. The longer I live, the fewer years of income replacement will be necessary. Life insurance is not an exact science. There’s no way to know what your exact needs will be 10 years into the term, but getting a good ballpark figure when you start helps out. If our insurance needs change dramatically in the years ahead, I can purchase an additional policy.