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Been In An Accident Lately? Read This

Been In An Accident Lately? Read This

When you’re hurt in some kind of accident, there are a lot of concerns that arise. Will you have enough money to afford the life you’re accustomed to? Can you take care of your family? Will you be forced to go back to work before you’re physically ready because you need the paycheck? Will you ever recover from your injuries and lead a normal life again?

An serious accident can stop you in your tracks. It’s terrifying to think you could lose everything you’ve worked so hard for. You probably know that insurance agencies are not really that excited to give you loads of money for an accident even if you are entitled and really deserve it. It’s good to know what to do to fight against their process so you get what you need to rehabilitate and get back to your life again.

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They put a price on your pain and suffering

It may seem a bit crazy that an accident settlement is determined on the invisible factor of pain and suffering. We all have different pain tolerances and suffering really is subjective. Say you lose a finger, which isn’t worth that much. Your passion in life is to play the piano. Your suffering is going to be far more than someone who doesn’t rely so much on having all 10 fingers. Pain and suffering sits under the legal umbrella of physical, emotion and mental injuries. It’s a measurement of how much less you enjoy your life after your accident.

Of course, this is crazy, but if you want to get what you’re entitled to, you have to accept it and figure out how to make it work for you. Know that insurance adjusters are trying to pay you as little as possible while avoiding a lawsuit. If you don’t feel good about the numbers they’re giving you for pain and suffering, I’d usher out a little “lawsuit” threat and see if they do a bit of recalculating. It’s risky for an insurance company if you file a lawsuit and the case goes to trial. Going to court takes all the control away from them, especially if the judge is sympathetic to your case. All of the calculations of what you’re worth go out the window and you have the upper hand over the insurance agency.

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Insurance companies pay you a little while paying themselves more

Regardless of what you’re entitled to, an insurance adjuster’s job is to pay you out as little as possible. It’s their job to look at the facts and figure out how much the case is worth. They aren’t working for your interests; they’re working for a company. The less they pay you, the more profit the company gains.

Your entitlements include:

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  • Tangible expenses like medical bills and costs. This includes those that have already been incurred and costs necessary in the future.
  • Loss of wages.
  • Damages for pain and suffering.
  • Emotional distress damage.

You may not be able to put all of this information and fight your case on your own. When it comes to emotional distress damage or pain and suffering, your case is stronger when you have an expert opinion. Not only should you be getting a regular check up from your doctor to monitor physical issues, you should also see a psychologist. It could be helpful to talk to someone but you also need a pro to prove you have suffered emotional damage. If you hired a lawyer, this would be a part of their checklist to ensure you get the payment that’s due to you.

You can help measure your pain and suffering by collecting evidence through documentation. Maybe it seems ruthless to have your friends take pictures of you when you’re crying after your accident. To really get what you want, you have to fight fire with fire. Photographs and personal journals can be used to illustrate the amount of physical and emotional pain you’re in. Your friends can also attest to the changes they’ve seen in you since the accident. These are all relevant when it comes to determining how down and out you are.

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Adjusters offer you less even when they know you should get more

Here’s where it gets just plain greedy. It’s the last thing you want to think about getting into an action, that your insurance company would actually try to rip you off, but it’s reality. Adjusters do some number crunching to figure out the maximum you rightfully deserve, then they usually reduce their offer to you by 25 to 50 percent. They do this in order to get a bit of wiggle room during settlement proceedings.

Whatever you do, don’t take the first offer an insurance company offers you. They don’t expect you to anyway so do a little bit of your own tallying of what you should receive. It’s easy to calculate how much you’re spending on medical bills and your doctor has likely eluded to how long your rehabilitation will take. You know more than anyone what your pain and suffering levels are. If you feel depressed or unmotivated, it could take years after the initial accident to live a normal life again.

You don’t need to sell yourself short so don’t pay attention to the explanations and excuses an insurance company throws at you. It’s simply to avoid paying you what you’re owed. The good news is usually the courts are on your side and if you’re not satisfied with settlement offers, you have the option to file a civil lawsuit. This takes the power out of insurance adjuster’s hands in which case, they’ll probably offer you a lot more. You’ll have enough money to take your time getting healthy again and not having to worry about your future.

Featured photo credit: Alexas Fotos via pixabay.com

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Loraine Couturier

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Last Updated on September 2, 2020

How to Set Financial Goals and Actually Meet Them

How to Set Financial Goals and Actually Meet Them

Personal finances can push anyone to the point of extreme anxiety and worry. Easier said than done, planning finances is not an egg meant for everyone’s basket. That’s why most of us are often living pay check to pay check. But did anyone tell you that it is actually not a tough task to meet your financial goals?

In this article, we will explore ways to set financial goals and actually meet them with ease.

4 Steps to Setting Financial Goals

Though setting financial goals might seem to be a daunting task, if one has the will and clarity of thought, it is rather easy. Try using these steps to get you started.

1. Be Clear About the Objectives

Any goal without a clear objective is nothing more than a pipe dream, and this couldn’t be more true for financial matters.

It is often said that savings is nothing but deferred consumption. Therefore, if you are saving today, then you should be crystal clear about what it’s for. It could be anything, including your child’s education, retirement, marriage, that dream vacation, fancy car, etc.

Once the objective is clear, put a monetary value to that objective and the time frame. The important point at this step of goal setting is to list all the objectives that you foresee in the future and put a value to each.

2. Keep Goals Realistic

It’s good to be an optimistic person but being a Pollyanna is not desirable. Similarly, while it might be a good thing to keep your financial goals a bit aggressive, going beyond what you can realistically achieve will definitely hurt your chances of making meaningful progress.

It’s important that you keep your goals realistic, as it will help you stay the course and keep you motivated throughout the journey.

3. Account for Inflation

Ronald Reagan once said: “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hitman.” This quote sums up what inflation could do your financial goals.

Therefore, account for inflation[1] whenever you are putting a monetary value to a financial objective that is far into the future.

For example, if one of your financial goal is your son’s college education, which is 15 years from now, then inflation would increase the monetary burden by more than 50% if inflation is a mere 3%. Always account for this to avoid falling short of your goals.

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4. Short Term Vs Long Term

Just like every calorie is not the same, the approach to achieving every financial goal will not be the same. It’s important to bifurcate goals into short-term and long-term.

As a rule of thumb, any financial goal that is due in next 3 years should be termed as a short-term goal. Any longer duration goals are to be classified as long-term goals. This bifurcation of goals into short-term vs long-term will help in choosing the right investment instrument to achieve them.

By now, you should be ready with your list of financial goals. Now, it’s time to go all out and achieve them.

How to Achieve Your Financial Goals

Whenever we talk about chasing any financial goal, it is usually a two-step process:

  • Ensuring healthy savings
  • Making smart investments

You will need to save enough and invest those savings wisely so that they grow over a period of time to help you achieve goals.

Ensuring Healthy Savings

Self-realization is the best form of realization, and unless you decide what your current financial position is, you aren’t heading anywhere.

This is the focal point from where you start your journey of achieving financial goals.

1. Track Expenses

The first and the foremost thing to be done is to track your spending. Use any of the expense tracking mobile apps to record your expenses. Once you start doing it diligently, you will be surprised by how small expenses add up to a sizable amount.

Also categorize those expenses into different buckets so that you know which bucket is eating most of your pay check. This record keeping will pave the way for cutting down on un-wanted expenses and pumping up your savings rate.

If you’re not sure where to start when tracking expenses, this article may be able to help.

2. Pay Yourself First

Generally, savings come after all the expenses have been taken care of. This is a classic mistake when setting financial goals. We pay ourselves last!

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Ideally, this should be planned upside down. We should be paying ourselves first and then to the world, i.e. we should be taking out the planned saving amount first and manage all the expenses from the rest.

The best way to actually implement this is to put the savings on automatic mode, i.e. money flowing automatically into different financial instruments (mutual funds, retirement accounts, etc) every month.

Taking the automatic route will help release some control and compel us to manage what’s left, increasing the savings rate.

3. Make a Plan and Vow to Stick With It

Learning to create a budget is the best way to get around the uncertainty that financial plans always pose. Decide in advance how spending has to be organized

Nowadays, several money management apps can help you do this automatically.

At first, you may not be able to stick to your plans completely, but don’t let that become a reason why you stop budgeting entirely.

Make use of technology solutions you like. Explore options and alternatives that let you make use of the available wallet options, and choose the one that suits you the most. In time, you will get accustomed to making use of these solutions.

You will find that they make it simpler for you to follow your plan, which would have been difficult otherwise.

4. Make Savings a Habit and Not a Goal

In the book Nudge, authors Richard Thaler and Cass Sunstein advocate that, in order to achieve any goal, it should be broken down into habits since habits are more intuitive for people to adapt to.

Make savings a habit rather than a goal. While it might seem to be counterintuitive to many, there are some deft ways of doing it. For example:

  • Always eat out (if at all) during weekdays rather than weekends. Weekends are more expensive.
  • If you are a travel buff, try to travel during off-season. You’ll spend significantly less.
  • If you go shopping, always look out for coupons and see where can you get the best deal.

The key point is to imbibe the action that results in savings rather than on the savings itself, which is the outcome. Focusing on the outcome will bring out the feeling of sacrifice, which will be harder to sustain over a period of time.

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5. Talk About It

Sticking to the saving schedule (to achieve financial goals) is not an easy journey. There will be many distractions from those who are not aligned with your mission.

Therefore, in order to stay the course, surround yourself with people who are also on the same bandwagon. Daily discussions with them will keep you motivated to move forward.

6. Maintain a Journal

For some people, writing helps a great deal in making sure that they achieve what they plan.

If you are one of them, maintain a proper journal, where you write down your goals and also jot down the extent to which you managed to meet them. This will help you in reviewing how far you have come and which goals you have met.

When you have a written commitment on paper, you are going to feel more energized to follow the plan and stick to it. Moreover, it is going to be a lot easier for you to track your progress.

Making Smart Investments

Savings by themselves don’t take anyone too far. However, savings, when invested wisely, can do wonders.

1. Consult a Financial Advisor

Investment doesn’t come naturally to most of us, so it’s wise to consult a financial advisor.

Talk to him/her about your financial goals and savings, and then seek advice for the best investment instruments to achieve your goals.

2. Choose Your Investment Instrument Wisely

Though your financial advisor will suggest the best investment instruments, it doesn’t hurt to know a bit about the common ones, like a savings account, Roth IRA, and others.

Just like “no one is born a criminal,” no investment instrument is bad or good. It is the application of that instrument that makes all the difference[2].

As a general rule, for all your short-term financial goals, choose an investment instrument that has debt nature, for example fixed deposits, debt mutual funds, etc. The reason for going for debt instruments is that chances of capital loss is less compared to equity instruments.

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3. Compounding Is the Eighth Wonder

Einstein once remarked about compounding:

“Compound interest is the eighth wonder of the world. He who understands it, earns it… He who doesn’t… Pays it.”

Use compound interest when setting financial goals

    Make friends with this wonder kid. The sooner you become friends with it, the quicker you will reach closer to your financial goals.

    Start saving early so that time is on your side to help you bear the fruits of compounding.

    4. Measure, Measure, Measure

    All of us do good when it comes to earning more per month but fail miserably when it comes to measuring the investments and taking stock of how our investments are doing.

    If we don’t measure progress at the right times, we are shooting in the dark. We won’t know if our saving rate is appropriate or not, whether the financial advisor is doing a decent job, or whether we are moving closer to our target.

    Measure everything. If you can’t measure it all yourself, ask your financial advisor to do it for you. But do it!

    The Bottom Line

    Managing your extra money to achieve your short and long-term financial goals

    and live a debt-free life is doable for anyone who is willing to put in the time and effort. Use the tips above to get you started on your path to setting financial goals.

    More Tips on Financial Goals

    Featured photo credit: Micheile Henderson via unsplash.com

    Reference

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