Determining if You Can Afford to Stay Home with Your Kids

One of the big questions many new parents are faced with has to do with deciding whether or not one of the parents should stay home with the child. Obviously, if you’re accustomed to living on dual incomes, the thought of giving up an income may sound like a daunting task. Even so, if you sit down and crunch the numbers, you may find that it might be more doable than you thought.

The True Cost of Working

When you think about it, your job not only provides income, but it likely creates some expenses as well. If you were to decide to continue working with the child, you’ll probably create additional expenses in caring for the child. On the other hand, if you were to stay home, you would also eliminate many work-related expenses. Some of the expenses you may have if you decided to continue working with a child:

• Child care: Depending on the level of care you require, you’re looking at anywhere between $400 and $700 per month per child. It isn’t uncommon to spend upwards of $7,000 each year on full child care during the child’s early years.
  
  
• Food and Beverage: While you can save money by taking your own lunch and drinks to work, most people end up grabbing a coffee or a lunch on the go while working. Even just $5 a day on lunch adds up to about $1,300 each year.
  
  
• Transportation: This varies greatly depending on how far you have to commute and whether or not you have public transportation, but even if you spend just $25 each week for transportation costs (gasoline, bus, subway, etc) you might be spending another $1,300 each year just to get to and from your job.
  
  
• Odds and Ends: If you’re in a profession that requires certain attire, you may need to spend money on clothes or dry cleaning. This can add another few hundred dollars a year. Your job may also require certain licenses, professional fees, or continuing education courses that could tack on additional expenses annually.

As you can see, there is more to that second income than meets the eye. Most people will think of the paycheck that comes with the job and assume that’s the bottom line, but there are many other factors to consider. While giving up that job may result in a loss of income, if you consider the expenses you will also give up, the end result may not be as painful as you had suspected.

The Non-Monetary Benefits

While all of this discussion about money is good, you have to think about the other benefits tied to staying home with your child. Money can’t replace the time spent with your children, and if the bonding aspect of parenting is important to you, this can factor in greatly when determining whether or not you can give up an income. Everyone is different and your priorities may lead towards one direction over the other, but don’t overlook the non-monetary issues when making this important decision.

The Bottom Line

There’s no right or wrong answer, and as you can see, it isn’t as straightforward as deciding whether or not you can live with one less paycheck in your pocket. Depending on the type of job you have, how many hours worked, and how much money you make, you may reach the conclusion that it’s impossible to be able to provide for your family if you give up this income. On the other hand, you may find that after factoring in the expenses related to working and the other benefits of staying home, you’re giving up a lot less than initially thought.

So, take your time and go over your options carefully. The decisions you make will significantly impact your family, so it’s important to take everything into consideration. And if you do find that you can afford to stay at home, you can find plenty of assistance at About.com’s own Stay-at-Home Parents site.

By Jeremy Vohwinkle, About.com

An Investment Guide

Stock Markets Fall - Corporate FDs Rise
May 30, 2009 at 10:19 pm

At a time when stock markets zigzag, what would be the right investment arena? Corporate FDs or equities?

THE sharp fall in the equity markets has changed a lot of things including India Inc's fund raising plans. This, in turn, has changed investment avenues for retail investors. Till about a year ago, the only way for retail investors to participate in a company's growth was to buy equities either in the secondary market or invest in primary issues (IPO) or rights issue.

However, the primary market option currently is almost closed with the virtual drying up of the IPO market. Bearish sentiments and lack of investors' confidence due to wild volatility, on the other hand, has decreased the participation of investors in the secondary market. In such a situation, India Inc is now approaching the potential investors through fixed deposit (FD) schemes.

In fact, FD schemes are not new to India Inc. Earlier, every major company had an FD department and it was considered to be one of the main sources of funding. However, this way of funding decayed slowly as it became easier for companies to raise funds through equity and quasi equity. Besides, equity has no direct servicing cost (except earning and dividends expectations of shareholders), where as interest on FDs is a fixed cost and that has to be paid in all circumstances.

The wheel has now turned a full circle and newspapers are now flooded with advertisements by corporate houses inviting public to entrust their savings with them. To make the deal juicer, most of them are offering interest rates that are significantly higher than bank deposits. But, how attractive are these corporate FD schemes? Do they score over bank deposits or other traditional sources of assured returns only because former offers greater returns? For many investors corporate FDs can be lucrative substitutes for bank deposits. They not only offer higher returns, but many of them also structured similar to a bank FD with facilities, such as premature withdrawal, cumulative accrual of interest, TDS (tax deduction at source) cut up to a certain limit (Rs 5,000) etc.

However, investors should know that bank deposits are insured up to a maximum of Rs 1 lakh per customer and the way banks are regulated in India, it is difficult for retail customers to lose their money.

In contrast, corporate deposits have no such insurance and the investor is solely at the mercy of the company and its financial fate. Given this, it makes sense to invest in corporate FDs that have high credit ratings and are known for their financial soundness and credible past performance. Though corporate FDs look riskier, they carry higher interest rates.

While most corporate FDs are currently offering pre-tax interest ranging from 7–12%, for 1-3 years tenure, interest rate offered by a bank is between 10.25% and 11% for a three-year period. For one year, banks are offering 8.5-9% and there is no TDS up to an interest income of Rs 10,000 a year.

So, is higher interest rate a tempting one to invest his money in corporate deposits? Or is equity investment in these companies still a preferred route? A comparison of the current dividend yields on the company's stock with post tax return on its FD will give an answer. The sharp fall in stock prices of most companies has led to a spike in the dividend yield, based on the dividend payout last year. Tata Motors, for instance, is available at a dividend yield of over 11% as compared post-tax FD return of 7.6%. Dividends are also tax-free in the hands of the investor. The only catch being that dividends are slave of earnings and they tend to rise and fall in line with profit growth. In the near future, market expects most companies to cut dividend payouts. However, as soon as profit growth resumes, dividends pay out will catch up and the stock prices also will begin to soar. This way, equity investors get the best of both the capital appreciation and cash flows in the form of annual dividends payouts.

But, if equity has its advantages, there are risks, too. The biggest shortcoming here is the market risk associated with equity investments. Equity is a risk capital and returns are a function of external macroeconomic environment.

FDs, on the other hand, are relatively riskfree and, in most cases, post-tax returns from FDs are much higher than the tax-free dividend yields. The risk here, however, is that of creditworthiness of a company. Meanwhile, fear of the company defaulting has become prominent after the Satyam fiasco. But, in such cases, default applies to both debt and equity investment.

Investors are thus advised to go for well known companies that have a strong and credible standing in the market. Unlike a bank FD, where high interest rates usually dominate the investment decision over the choice of bank, the integrity of the company should be given the highest priority in case of corporate FD. A few basis points should not matter, for the assurance that the capital is in safe hands.

Understanding UK Payment Protection Insurance

Understanding Payment Protection Insurance Cover in the UK

On Monday, Building Societies and Banks will no longer be allowed to sell payment protection insurance at the point of sale.
They will also be banned from selling lump sum upfront single premium policies. This article explains the principles of PPI and how best to purchase it given the recent legislation and changes in the UK economy.

If you have ever bought a new car or a large flat screen television the chances are you paid for it with some type of finance plan, credit card or credit facility, or loan. Apart from being offered a breakdown warranty, in the past you may well have been offered an insurance plan to cover the repayments of the credit should something terrible befall you. This is the basis of payment protection insurance or PPI as it is commonly known.

What does PPI cover?
Payment protection is widely available these days to cover all forms of credit or borrowing. Loan protection products are sold that either individually or collectively cover credit cards, bank loans, car finance and all other monthly payments and outgoings. Until recently you may well have been offered this type of cover when you took out the loan or credit card; however this was made illegal in 2009 after a long enquiry by the Competition Committee looking into the restrictive practices of the major high street banks and lenders. Consequently payment insurance premiums and plans have become a lot cheaper now that independent suppliers have entered the market.
If you own a house under a mortgage you can purchase what is known as Mortgage Payment Protection Insurance or MPPI. This type of plan though often cheaper, will only cover the monthly mortgage payments.
Other protection insurance products are available, the most common being those that cover your salary or income often known as Income Payment Protection Insurance or lifestyle cover. With these types of products you are not limited to agreed repayments and can spend the income benefits as you would your salary or wages.

What does PPI cover you against?
All payment protection products cover you against and will pay a monthly sum to protect your payments, in the event of you suffering from one or a combination of accident, sickness or unemployment.
It is possible to buy these as standalone covers, although accident cover is more often than not sold alongside sickness cover. Unemployment Insurance cover, which protects you against sudden redundancy or unemployment is often sold by itself but because of the nature of the risk, commands a much higher premium.

How long does protection insurance cover you for?
The length of time of the cover is dependent upon how long someone wants the benefits to be payable for in the event of a claim. This varies by insurance company and is often only for twelve months although some of the better more flexible providers offer cover for up to 24 months, at a premium. It should be noted that this type of insurance is viewed by the providing companies as an invaluable short term solution to life's difficulties and not the correct type of cover for long term illness or disability, for example.

Purchasing payment protection cover
With so many offerings in the market it is a worthwhile exercise to shop around for cover. Most independent suppliers have online applications that literally only take a few seconds to complete. You normally have to supply you age, and how much benefit you would like each month.
When buying you will need to decide how long you wish to wait after you become sick or unemployed, before you start to receive the monthly benefits. This is known as an excess period and you will normally be offered periods of 30, 60 or even 90 days. Obviously the longer you wait the cheaper the monthly premiums will be! Look out for companies offering back to day one cover which will pay you back to day one of your claim once the excess period has passed.
When comparing payment protection insurance plans it is necessary to find one that will cover all of your monthly outgoings. Many providers have different limits and it is important that you find one that will not leave you with a shortfall for repayments!
As with purchasing all types of insurance, but particularly with payment protection cover, it is very important that you check that you are you eligible for cover and not excluded under the policy conditions, which are often more rigorous than for other types of cover.

When comparing payment protection plans for Mortgage Payment Protection Insurance and Income Protection Insurance it is sensible to visit a large respectable, independent supplier such as PPI Insurer of the Year Burgesses.com for advice and quotes. Burgesses offer a vast array of information and online quotes backed up by a useful helpline of experts.

The Original Article Source and more information about purchasing specialist insurance can be found at: http://EzineArticles.com/?expert=Dave_Healey
http://EzineArticles.com/?Understanding-Payment-Protection-Insurance-Cover&id=2394609

American Heart Association Emphasizes Link Between Diabetes And Heart Disease!

American Heart Association twitter this morning, “80% of sudden cardiac arrest victims collapse at home. Are you ready to save someone you love?” It provided a link to a CPR website.

This Twitter @HeartofDiabetes is all about education on the link between diabetes and heart disease. This is a subject that we have continually talked about, the fact that when a life insurance underwriter looks at obesity and/or type 2 diabetes, they know that without effective management and excellent control other health issues are likely to follow. It’s not like the only thing they have to weigh is the chance of a person with diabetes going into a diabetic coma.

It’s the combination of risk factors and collateral health issues that an underwriter has to weigh when they consider an application. Especially in the overweight population having type 2 diabetes puts them at risk of high blood pressure, stroke, coronary artery disease and kidney damage along with a host of issues that have a lower mortality risk. The key to avoiding the downhill slide into health issues that will change your life and can end your life is taking the situation seriously.

Education, compliance and control should be the mantra. Know about your diabetes. Know what it is, what makes it worse and what makes it better. Know how worse and better are measured. Educate yourself on diet and exercise programs. Learn about the direct correlation between obesity and diabetes. Learn what the hbA1c is and why it’s important to keep it in a controlled range.

Compliance is all about listening to your doctor and following recommendations and prescribed treatment. When you don’t feel like you’re getting the information you need from your doctor, finding a diabetes education forum or a professional diabetes educator to help you take control of your condition and your life.

The good news with life insurance is that a diagnosis of diabetes doesn’t knock you out of the running for competitive, affordable life insurance rates. Given good control and no other risk factors, standard or better rates are not uncommon. If you are over age 60 and diagnosed in the last 5 years you actually have a good shot at preferred plus rates with one of our companies.

Bottom line. Diabetes is a destructive disease if not taken seriously. The diagnosis is a wake up call that you should definitely not be hitting the snooze button on.

Post from: Ed Hinerman On Life Insurance

Debt instruments safer in volatile markets

Here I have tried to lists out some investment options that are relatively safer in volatile market conditions

The stock markets are on a downward trend from the beginning of this year. Volatility in the markets is also quite high. There are many factors that contribute to negative market sentiments. For example, a persistent high inflation rate (especially the core inflation rate that is driven by basic commodities), rising commodity prices in global markets, anticipated slowdown in the global economy etc.

Foreign investors were investing heavily in emerging markets. They are now taking out money, especially from emerging markets. Large foreign investors are bearish on global growth and expect the global economy to deteriorate. They believe that in the era of a global slowdown, emerging markets will under-perform their global peers. Foreign institutional investors (FII) have taken out around $5 billion from the domestic markets so far this year.

Since the stock markets are in a sideway movement and not doing very well, equity funds are also not delivering good returns. In fact, most of them delivered negative returns over the last six months and many investors lost their money in equities and equity-based funds. Global stock market analysts' valuations in the domestic markets were overstretched last year. This is why investors witnessed huge corrections this year. Some analysts feel the domestic markets will remain in a sideway movement in the short to medium term (next six months or so) perspective.

Here are some safer investment options in volatile market conditions:

• Tax-saving options

Since the markets are quite volatile and risky for investments, investors can concentrate on completing their tax-saving limit under Section 80C and keep the option open for investments in the stock markets during the later part of year. There are various options available for investors. Provident fund is one. The primary feature of these instruments is to build a fund for long-term needs (retirement). Insurance is another. Investors can look at investing in life and medical insurance in the present time to fulfil their insurance needs. The primary feature of insurance is to provide risk cover to investors against any unforeseen future event.

• Potential equities

Investors with moderate to high risk appetite and a long term investment horizon can look at investing in blue chip stocks of select sectors. Many blue chip stocks are trading at attractive valuations in the market. Investors can invest in these sectors based on a careful analysis.

• Debt mutual funds

Debt mutual funds invest in safe instruments like corporate debt, money market instruments, call money etc. The main objective of debt funds is preservation of principal, accompanied by modest returns. Debt funds are ideal for investors who want to take very little risk, are uncertain about the interest rate scenario or who are uncertain about what they should do with their money in the short term.

• Cash

Investors looking to invest in stock markets should keep some amount of liquidity at their disposal. The valuation of some stocks and sectors will become quite attractive if the market goes through another fall of 5-10 percent. Investors should identify a few stocks and watch them to make investments.

Bank deposits are good for short-term investors. Short term bank fixed deposits yield 6-7 percent returns. Nowadays, many banks offer funds sweep-in and sweep out facility where a balance beyond a certain limit automatically gets converted into a fixed deposit and banks pay fixed deposit interest on it. This type of arrangement can be an option for the short-term horizon.

5/29 Insurance Blog

Consider Repairers When Getting a Classic Car Insurance Quote Online May 28, 2009 at 11:56 am

Dave Healey of our resident classic car insurance specialists panel has warned of the dangers of getting a classic car insurance quote online without taking into account who might be repairing your classic car if you have an accident or claim. Dave points out that not all car insurance companies are the same and you pay for what you get! Does Your Car Require Specialist Car Insurance and Repair Services? By Classic Car Insurance specialist Dave Healey When choosing a car insurance policy it is wise to consider what is offered in the event of a claim. After all, you are only insuring the car to have the potential to make a claim and the cover is only as good as the insuring company's claims department. Although price is most peoples consideration when purchasing car insurance, one of things you should not overlook is who is going to repair your car if it is damaged? Do you own a non-standard car? Surprisingly a large number of vehicles fall into categories that the majority of mainstream insurance companies do not want to cover! Such examples that may struggle to obtain motor insurance at reasonable rates are owners of performance,prestige, expensive, luxury, foreign, sports, convertibles, modified, veteran, collectors and classic cars. More importantly if you are the owner, if something happens and you need to make a claim on your policy, it is important that your car gets fixed by specialist professionals, using the correct parts. More often than not these type of car repairs require unique tools that are only available through specialist engineers and motor repair shops. So it is most important when comparing car insurance to also compare the services that a car insurer offers in the event of a claim, especially those regarding choice of repairer. All specialist car insurers and many insurance companies will offer a choice of repairer - many others will not as they have existing arrangements with so called approved repairers. Trouble arises when an insurance company insists on employing a particular firm to fix the car against the policyholder's wishes, and it is not uncommon for major disputes to arise at this point. For example, the insured may have an expensive Italian sports car bought from an exclusive importer and specialist firm of dealers who added a number of accessories and or modifications to the car at the insured's request at the time of sale; the same firm may have performed all the routine servicing since the sale and the insured may genuinely feel that they 'know' his car better than anyone else could, and that only they, in consequence, should be entrusted to carry out the repairs. If the repair work quoted in an estimate by the specialist firm is substantially higher than that expected from the approved repairer and the car insurance claims department consider that the approved repairers are capable of carrying out the work to the same standard as the specialists , then the only way out of this impasse is usually for the insurance company to suggest that the insured pays the difference! Clearly then it is very important to understand what you are buying with your policy when it comes to claims and repairs. Specialist car insurance policies always offer unique claims repair services and if you own an unusual, expensive, classic car or performance motor, then it would be sensible to opt for a policy that includes these repair services to avoid the above situations. What might look like a cheap policy might turn into fools gold in the event of a claim! Dave Healey is a specialist car insurance expert and UK classic car insurance journalist who writes regularly at the Car Insurance Blog and here at Insurance Blog. You can read the original article and more from dave at : http://EzineArticles.com/?expert=Dave_Healey

5/29 Ed Hinerman On Life Insurance

You Might Have Dave Ramsey, But It Doesn't Mean You Have It Right! May 28, 2009 at 7:01 pm I will tread carefully with this since the last time I questioned Zander Insurance, well, frankly I kind of over stepped my point and pounded on them a bit. I publicly apologized and we all walked away feeling OK and deciding that while we both believe Dave Ramsey is right on the money, Zander does business a little differently than I do. A friend pointed out to me that Zander’s website had a few errors on it. I looked at it and decided that was no big deal. On one page they quote rates for a company that no longer sells insurance. US Financial hasn’t written business in a few years and it was just their rate on a child rider so really, as I said, no big deal. While I was there though I decided to dig a bit like we all do to each other’s websites (checking out the competition), and I ended up on their tobacco use page. I ran rates on myself as a smoker since Zander stated that “Many of our competitors simply treat all tobacco users the same eliminating any potential savings but we have companies that offer competitive preferred tobacco.” The best rate they showed was Transamerica at $6295.00 annually. I then ran the exact same scenario on our website and found both Liberty Life ($5210.00) and Western Reserve Life ($5375.00), around $1000 a year less. Let me just state for the record that “Many of our competitors simply treat all tobacco users the same eliminating any potential savings, but we have companies that offer competitive preferred tobacco rates.” And these aren’t impossible to get fantasy quotes. Both of these companies have been kicking everyone’s rear end for some time in the preferred tobacco arena. Bottom line. Zander is a fine agency and they made a case the last time we conversed that they don’t do business with some companies for administrative reasons. And I respect their decision. What I don’t respect is them indicating their competition is doing something bad when their accusation should be spoken into a mirror. Personally, administrative reasons or not, I’m thinking Dave would have a problem with the fact that Zander isn’t really offering people the best option for their hard earned dollar. Dave busts his rear getting those dollars freed up after all. Just an aside. I am currently facilitating a Dave Ramsey Financial Peace University, which I’ve been through myself and highly recommend to everyone. Dave admits freely that he doesn’t sell insurance so his opinion isn’t biased and I agree with Dave’s philosophy on the best way to buy and use term insurance. I know I’ll get yelled at for this, but personally I think Dave has placed a little too much trust in Zander in the life insurance arena. So, holler away! Post from: Ed Hinerman On Life Insurance You Might Have Dave Ramsey, But It Doesn’t Mean You Have It Right! CEO's Fly More On Their Own Now! May 28, 2009 at 5:07 pm While the words CEO and flying may cause a little angst among some, the truth is that CEO’s are flying privately more often and whether that is on a corporately owned aircraft, a chartered jet, or their personally owned airplane, it is generally more efficient and cost effective to the company. Life insurance underwriting for the pilot in all three of those scenarios is all over the board, but really that’s true of almost any underwriting topic other than the common cold. But private aviation and how different companies view it is about as diverse as you can get. While one company might give a private pilot preferred plus rates, another company will have them pay a flat extra fee for aviation coverage. Corporate pilots and charter pilots get the same wide variance in offers from best rate class to companies that really don’t want to cover them at all. With the exception of airline pilots, underwriting of pilots really comes down to five primary questions. 1. Age of the pilot 2. Pilot rating - Commercial, private (IFR/VFR), or student 3. Total hours as pilot in command 4. Hours flown annually 5. Type of aircraft Optimally the best rate class would go to someone over 26, IFR, 250+ total hours, 26-250 hours annually flying a proven, certified plane. The truth is that private, student and commercial pilots can get very competitive rates and in most cases have the tough part of life insurance already whipped because they fall into that rare category of people who get regular physicals, so they actually know what their health is and it’s almost always good. Bottom line. With good health being a given, even pilots that don’t meet the optimal criteria above can still get life insurance without paying a flat extra charge. Post from: Ed Hinerman On Life Insurance CEO’s Fly More On Their Own Now!