After we had our dog for about a year, I had to arrange for dog care while we were out of town on a family vacation. This was a whole new deal for me because I grew up in a close-knit community with loads of family around. When we’d travel, we just had neighbors or my grandparents take care of our pets. So I was calling around like a crazy woman (I didn’t realize you had to book more than a week out) and was lucky to find a kennel that would keep Sasha. However, taking her there just about broke my heart. She was fearful, stressed-out, and confused, and I felt like a massive jerk leaving her there. Even though the kennel was clean and the caregivers kind, I decided I would never do that again. So I started looking for another option.
After some digging, I did find an alternative. I could have her stay in a person’s home. She’d still be scared and confused, but somehow I imagine that being in a home with people and lots of petting would be a lot less stressful than being in a kennel, even a nice one. And besides overnight care, you can also offer dog walking or drop-in visits.
The best parts of pet sitting as a side job
Income
If you love pets, pet sitting could be a side job that would add $1500 or more to your monthly income. Rates for overnight care (per dog) in Indiana ranged from $20-55 in a small town, and $28-55 in a large metro area for normal dates. Sumiko, a dog sitter I spoke with, said that with work to build up your clientele, pet sitting could realistically add $1000 or more to your monthly income. That’s no small change for doing something that you enjoy anyway!
Flexibility
While you will want to accept as large of a variety of pets as possible, you can set some parameters as far as size, breed, and number. You can also block out dates that you aren’t available, so you don’t have to forego your own vacations or visits to family. (Of course, the more dates you are available, the more you will make. That’s only common sense.) Finally, you set your own price. If you have a lot of experience with dogs, you can charge higher rates. Many of the online pet sitter sites also allow you to list reviews, so as you gain more positive comments and review, you can also adjust your rates upward.
Meaning
As teachers, we know that giving back sometimes matters just as much as the money you bring in. (Boy, do we know it!) If you really love animals, offering a loving home or a fun walk is a way to serve animals and their owners.
Ease of start up
While anything that has a realistic chance of being a good money maker is going to take some commitment, thiWhat’s more, it is a low-commitment gig. You don’t have to have a ton of money up front, just a love of animals. Finally, there are nWhile ow websites available, so you don’t have to do it all on your own (although putting the word out there to family and friends is probably a very good idea). And if you use rover.com
Of course, there are some cons, too. It’s hard to know how other people’s animals are going to act. Sumiko had been hosting with Rover.com for over a year when I talked to her, and she says that sometimes her yard has gotten pretty torn up by energetic dogs, especially when it’s pretty muddy out already. A second down side is that the high-demand times (when you would make the majority of your money) are also the times when you might want to travel or have houseguests – holidays and weekends. Finally, if you use a portal like rover.com, they take 20% of your fees, so be sure to figure that in.
Sumiko has really enjoyed her time pet sitting. She told me, “The best part of hosting is getting to sample every breed imaginable as your pet, the companionship/ playtime, and income. We’ve had some challenges with high energy dogs such as muddying the yard when it’s rained a while, dogs hopping baby gates in the house…but it’s not constant and you can restrict breeds, size…” She estimates that people who commit to building their clientele and really treat it like a business could make $1000 a month or more. Of course, it will take some time to get to that level, but it’s one of the few businesses you can start right away with very little investment of time or money.
In a recent post, I mentioned cutting expenses by adding one frugal habit every month or so. The example I gave was reducing Starbucks trips from daily to once or twice a week. The more I thought about it, the more I realized there was something else there important enough to write about. It’s the idea of making your “splurges” special.
This sounds kind of weird because splurges, by definition, are special. They are a special treat we give ourselves. Originally, the meaning was something a little over the top, something luxurious or costly. The trouble is that for whatever reason, whether it is advertising that encourages us to indulge more often, or the stress of daily life, many of us have “splurge-spread.” What should be a special treat has become something that we do almost every day. We still tell ourselves it’s our little splurge. But it has become a part of our routine.
That’s what happened to me with my Diet Dr. Pepper habit. When I was little I rarely drank soft drinks, even though I loved them. Then when I was out on my own, I started to have my beloved Diet Dr. Pepper more and more often. I wasn’t a coffee drinker, so I’d drink a DDP for my morning caffeine fix. At first, it was just when I hadn’t slept well and needed a pick-me-up. But pretty soon, it was a daily thing. If I forgot my DDP, my day wasn’t going to be a good one. Then, I started having one in the afternoon. I realized I was headed for a two-a-day habit. And it wasn’t something special. It was normal.
So I’ve started to cut back on my soft drinks. (My tastes have changed with maturity and now I’m more of a Coke person.) It’s taken me a long time, but now I drink 2-3 a week instead of 1-2 a day. Here’s the thing, though. My Cokes have become special again. Instead of it ruining my day if I don’t get a soft drink, when I DO get one, it’s a splurge. It FEELS special again. I really savor the bubbles and the sweetness. I notice how good it tastes.
Now soft drinks aren’t super expensive, so it’s not really about the money in that case. It’s about my quality of life. And even though it might seem crazy, having fewer splurges has actually improved my happiness. When I have a Coke, it is a choice, not a habit. And oh my gosh, how I enjoy it. Before, I just took it for granted.
But what if part of it IS the money? What if the habit you decide to change can add $20 a week or more to your bottom line, and make you happier in the process? That would be sweet, right?
So give it some thought. Is there a “splurge” in your life that you don’t even notice anymore? Is it something that could either save you money or could become something special again instead of just part of your daily routine? Try reducing – not eliminating – it. And see what happens. You might find that you like it even better when it is truly a splurge.
And whatever you do – or don’t do – on this front, remember I believe in you. You got this!
We all love our families – that’s a given. Usually, everything we do is for them in one way or another. Cook food – yup. Earn money – yup. Go to Disney – yup. Pretty much everything is meant for their benefit, either directly or indirectly. And yet, many of us don’t do the one thing that could prevent their lives from being a living hell in the time when they most need us.
Why? Because it is boring, mundane thing that seems like a useless hassle. I mean, we’re not planning to die. Yes. You read that correctly. This is something that we complete in case we die, in which case, they will be the very last act of love that we can ever do for our kids, or spouse, or whoever we leave behind. And it is indeed boring and a huge hassle. But not nearly as much of a hassle as our family will deal with if we die without it. So let’s take a quick look at the most boring thing you can do to show your family you love them: life insurance
Repeat after me: portable, 10-12 times annual income, guaranteed level term life. OK that’s all you need to know. Next topic.
Portable
Just kidding – kind of. Those three things are literally all you need to know, but you might like a little more detail than that, so here it goes. Your life insurance needs to be portable – in other words, it shouldn’t be tied to your employer. A lot of employers provide some life insurance, and if it’s free, great. But do NOT count on that. There’s a simple reason why.
Let’s say you are seriously ill. Like, sick enough you can’t work anymore and you leave your job. If your only life insurance is through your employer, it is gone, too. “Well, no worries, I’ll just get life insurance someplace else.” But will you? Will you qualify? Will you be able to pay for higher premiums? Or will you be out of luck just when you need life insurance the most?
That is why life insurance needs to be portable. It means more hassle when you get it because you will probably have to get a mini-physical and you’ll have to research it yourself to get the best rate. (Hint: apply with several companies because different insurance companies rate things way differently. Slightly elevated cholesterol numbers might not be a big rate changer with one company, but could jack prices way up with another.)
10-12 times annual income
When buying insurance, you should shoot for 10-12 times your annual income. For example, if you make $50,000/year, you should have between $500,000 and $600,000 in coverage. If you make $150,000/year, you should have between $5 million and $6 million in coverage. It sounds like a lot, doesn’t it? But here is the reason.
You should have enough insurance that you could invest it and the income would replace your income. Usually, 10-12 times your income, if invested well, will do that. That will allow your family to survive without your income, even if your kids are very young. They would never have to worry about the money running out.
Guaranteed level term life insurance
Next up, term life. For people not in the insurance industry or who are not financial geeks like me, (I really get into this stuff!) insurance can seem totally incomprehensible. But there are only two things you really need to know about the type of insurance to buy. First, buy term life insurance. Secondly, your insurance agent is going to give you 500,000 reasons that I’m wrong and you should buy some other kind of insurance. But don’t listen. I’m right. They are making commission. If you are ready to trust me on that, you can quit reading now. If you want a little more information on why I say those things, read on.
Term Life vs. Whole Life
There are basically two types of life insurance – term life and whole life – with some sub-categories. Term life insurance is just that. It is insurance that you buy for a certain period of time, usually a term of 10, 15, 20, or 30 years. If you die during the term, it pays out. If not, it doesn’t.
Whole life is life insurance that never expires (as long as you are paying the premiums) with a savings component built into it. It will cover you your entire life, you can borrow against it, and it actually has a savings component, so that its cash value accumulates. “Hold on just a second, Jill,” you may be saying. “That sounds like a WAY better deal. Why on earth would anyone go with a chintzy term life that expires when whole life offers all these benefits?”
What is insurance for?
And the answer to that question lies in what insurance actually does for us. What is life insurance for? Well, it is to ensure that anyone who is depending on us financially isn’t left in a big mess if we die. Kids, spouse, anyone who needs your income – that’s who life insurance is for. And it’s purpose – its SINGLE, SOLITARY PURPOSE is to provide for dependents.
It is not intended to be a savings account, an investment, or a bank to borrow from. It’s just to make sure that your family isn’t totally screwed if you die. And all those other bells and whistles? What do they hurt? Well, they cost money – a LOT of money. And they don’t do any of those extra things well.
Why your insurance agent desperately wants you to choose whole life
Whole life insurance can cost 10 times what term life does. I don’t know about you, but I’m not eager to pay ten times as much for anything that doesn’t provide a super-benefit. And one of the reasons that it costs so much is related to the second thing you need to know: your insurance agent is going to be convinced you are making a huge mistake if you don’t get whole life or some type of insurance other than guaranteed level term life. One of the reasons it costs so much more is that your insurance agent is going to receive a much, much bigger commission if he sells you that.
Now, I’m not dissing on insurance agents. Most of them have been trained to believe that whole life is really the way to go. Their company has a huge incentive to convince them to sell more expensive policies, but that doesn’t mean they are right. However, because they have been trained to believe it, they are going to give you 500,000 reasons that they are right and I am wrong. So no matter what arguments they throw at you, you just pat them on their little head and buy guaranteed term life. Then take the extra money that you WOULD have spent on whole life, and use it to get your financial life in order. Pay down debt, get that emergency fund in place, and invest the extra. If you do those things, it’s almost guaranteed that you will be better off by buying guaranteed level term life. If you take the extra and go to Disney? Well, then I can’t promise you anything.
But my agent says I will lose all my money if I buy term life and don’t die
Not really. Let’s go back to why we are buying insurance and fill in a little more detail. You buy insurance (of any kind) to transfer the financial risk of losing something from us to another entity. What’s the financial risk if your house burns down? You will have to pay for another house. What is the financial risk that is covered by health insurance? The need to pay medical bills if you are sick. What is the financial risk of dying? Your family will lose the benefits of your labor and the money it might have earned.
So when your agent tells you that you will have wasted your money if you buy term life and don’t die, he is referring to the small amount of cash value you would build up if you had whole life. But remember, you are not paying to build up cash value. You are paying to make sure that whether you die or not, your family is financially protected. If you don’t die, your family is protected – by YOU. Your income, your work, your effort. If you do die, however, your family is protected from financial devastation by the insurance. You got what you paid for either way – a family that is financially safe.
Just do it
So those are the only three things you absolutely have to know before buying life insurance. There are a ton of other boring details that geeks like me just love. If you want to know everything about insurance, you can check out any of these links. This one is great to find out if you actually need insurance. But if not, now you know the basics.
PS Do me a favor. If this post moves you toward getting life insurance, please post below letting me know. It would make me really happy to know you have taken the time to make sure that your family will be OK if anything should ever happen to you. If you don’t know where to start, check out this page of independent insurance agents. I don’t make money from you clicking on this link – now or ever. But being an insurance affiliate is big money, so be careful out there. Some web sites prioritize their profit over your best interests.
Whew! This is the point where you are really getting a handle on this whole personal finance thing. You have paid off all debt except your house, so you should have some significant wiggle room between your income and your expenses. You are starting to see yourself as a winner in the money game, and it’s true! Now it’s time for the final step of your financial foundation: 3-6 months worth of expenses in a safe savings account.
Why do you need that much in savings?
Now that you have extra money every month, isn’t it enough to just avoid debt and pay cash for your splurges? Well, having 0 debt does put you miles ahead of the average American, you’re right. But you’re still a few hundred yards away from the short-term financial stability finish-line. So don’t stop running quite yet.
The next and final step for short-term stability is having 3-6 months of expenses in an easily accessible savings account. This is your emergency savings in case life suddenly gets a little too real. I hope that this step is a complete waste of your time. And for a lot of you, it will be. But the truth is that some of us will face an unexpected job loss, a short-term disability, a seriously ill child, or any of a hundred other things that can turn your life upside down. And for those, this will be one of the most important things you can do to make the hardest time of your life a tiny bit easier.
Three to six months’ savings won’t protect you from every tragedy that exists, but it will cover the vast majority of them. And even more important, if the tragedy is even worse, it will give you some time to get your sanity back after the initial shock. It gives you breathing space while you grieve. It allows you to concentrate on the people who need you, instead of “How on earth am I going to pay the bills next week?” Having that buffer savings is a favor that you will NEVER regret doing for yourself if the unthinkable happens.
How do I get my savings to that level?
This should be pretty easy. You have been paying off debt at a rapid rate by really throwing every extra penny at the debt you have. Well, now you can splurge a little to celebrate that accomplishment. (And by splurge, I mean a weekend get-away or a special but smallish new shiny thing – NOT a cruise around the world or a Ferrari!) And after the splurge, that extra money in your budget that you used to send to the credit card company or whatever creditor you were paying off should immediately head toward the nearest savings account. Just take the money that you were already putting toward debt repayment and send it to savings.
Where do I keep my savings?
The big thing here is that this is an EMERGENCY fund. In case of emergency, you don’t want to have to do something super complicated to get your money. So just put it in a money market account or a savings account. “But Jill,” you say, “This is gonna be a chunk of cash. Wouldn’t it be better to earn a little something on it?”
NO. No it wouldn’t.
And this is why. That’s not its purpose This is not money that is intended to earn interest. It’s money that is going to save your butt if something bad happens. You will invest in the next step. You will invest for the rest of your life. The money you invest will make you rich. But this emergency savings is not investment money. It’s “in case of emergency” money.
Don’t be penny wise and pound foolish with this money. Just put it somewhere safe!
What if I’m a spender and don’t trust myself to keep it?
Ahhh, great question. If you are afraid that you will lack discpline to keep that money sacrosanct for a true emergency, then put it at a separate bank from where you keep your checking account. Maybe a bank where you don’t have your electronic login info memorized, so it’s a hassle to use it for an impulse buy. You just want to be able to get to it without TOO much trouble if you you should really need it.
How much savings?
Three months’ expenses? Six months’? Or somewhere in between?
And the answer: it depends. This is based on several parts of your personal situation.
The first issue to get an actual number for your monthly expenses. How much do you realistically spend on non-negotiable in a month? Include housing, utilities, gas, car maintenance, food, and other essentials. However, you can probably skip any frills like lunches out. Just add up what it would cost you to stay afloat for one month, bare bones. Once you have that number, we’ll figure where in the 3-6 month range you should aim.
How much stability do you need?
When I was single and childless, I was a risk-taker. I figured the worst that would happen is that I would move back in with family for a few months. Now that I have a family and live in a different city, I need more stability. It would be a tremendous disruption to pull my kids out of school. That not only means we couldn’t relocate on a whim. It also means I wouldn’t want them to know that we were having financial trouble. My kids are worriers, and it would be important for them to see our lifestyle going on more or less as they were used to before. So stability is a huge need for us at this point in our lives. We wouldn’t even want to cut too far into the extras unless it got pretty bad. This points us to the upper end of the range.
Next question: How stable is your income?
If your income is strongly commission based, or your company has a history of layoffs, you will want to shoot for six months of savings, maybe even more if you have a family. On the other hand, my husband and I are both in incredibly stable jobs. I’m a teacher with great evaluations and many years experience in this district. My husband is a lawyer for the state in which we live. Plus, we could live on either one of our incomes if we absolutely had to. This points us to a lower savings amount.
Last (and most important) question: What is your comfort level?
Don’t discount your own emotions. If having six months’ worth of expenses in savings just makes you feel better, then by all means do it. If the other two questions indicate that you could go with less, and you don’t lie awake at night worrying about it, cut it down to three.
For us, even though our jobs are so stable and we have extra in the budget, I grew up on a farm in the 1980’s. And even though we made it through, losing the only home I had ever known was a very realistic fear for me. So we stick with the 6 months plan.
Ok, so now you’ve got the final step in your foundation. Next week: building on that foundation to create financial independence.
