Tag Archives wills

Cover your butt

Someone recently asked me the best advice my mother gave me. She taught me many great things, but there is one particular piece of advice for which I’m eternally grateful: ‘always have your butt covered in case of financial disaster’. This sage advice has motivated me to always remain financially independent, and has meant that during all the ups and downs of life, money has never been a serious issue.


Having your butt covered is more than just being financially independent. It also means being prepared for any eventuality. This might mean having enough cash in the bank to keep you afloat if you were to lose your job, or more importantly, having appropriate insurances in place.

I’m a huge believer in insurance, especially life insurance. This comes from an event I witnessed in my first job at a financial planning practice.

A lovely couple in their early 40s came to us for a financial plan. He was a miner and she was a stay-at-home mum who had never worked. They were mortgaged to the hilt, and part of our advice focussed on debt reduction. We also recommended life insurance for him – at least enough to cover their debt should he pass away. This couple understood the benefits, but being fit and healthy, viewed insurance as just another unnecessary expense. Even so, they agreed to consider the information we had given them.

A few days later he was killed in an accident, leaving his wife uninsured and with no way of repaying their debt. I will always remember the day she came back into our office to ask for help with filling out Centrelink forms. On top of the heartbreak of losing her soulmate, she was left burdened with the stress of whether or not she could pay her bills. Heavy.

It’s one of the main objections, but life insurance need not be an out-of-pocket expense. Many super funds offer it within their fund, with premiums paid from your contributions (or your employer’s). If you have superannuation, you may already have life insurance inside, as employers generally offer a minimum level of cover.

Your fund may also offer TPD (total and permanent disability) and income protection to cover you should you lose your ability to earn an income due to illness and disability. In some cases insurance premiums are tax deductible if you’re self employed.

All of this is worth looking into. Along the same lines, having your will and estate plans in place is crucial.  A good financial adviser can review your situation, recommend proper levels of cover and refer you to the right people to help you get things in place.

No matter your circumstances, it’s best to protect yourself as best you can. You never know what is around the corner.


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