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Whole life insurance is considered as the most basic type of permanent policy. This insurance pays out the death benefit to beneficiaries. Its cash value also accumulates and you can tap into this during your lifetime. However, just like other lifelong forms of coverage, whole life insurance can be quite expensive.

Whole Life Insurance – A Short Definition

Whole life insurance policy offers coverage that can last your entire whole life, as the name suggests, provided that you can continue paying your premiums. These premiums remain the same during the life of your policy so you will know the exact amount you will pay every month.

A whole life insurance policy is different from term life insurance in the sense that this policy earns cash value on the portion of the premium.

How Whole Life Insurance Works

There are two parts to whole life insurance – a savings component and a death benefit. With death benefit being guaranteed, it means that the beneficiaries will receive the payout once the plan holder passes away. On the other hand, the savings component is known as the cash value that you can take advantage of while you are still alive.

The Cost of Whole Life Insurance

Whole life insurance substantially costs more compared to term life because of several reasons.

For starters, term life insurance is only temporary. This doesn’t accumulate cash value. If you think of life insurance as a game of risk, insurers can consider term life to be a good gamble since many people can live longer than their policies. Once this happens, there is no need for insurers to spend cash for the payout of the death benefit.

Whole life insurance provides a guaranteed death benefit and permanent protection. Provided that you keep up with the premiums, the insurer is going to pay the beneficiaries once the plan holder dies. This kind of coverage got cash value as well and guarantee investment return rate on a part of the premium.

This is an investment and this is why the amounts of coverage are also higher.

Benefits and Drawbacks of Whole Life Insurance

Policies for whole life insurance have their own pros and cons:

Benefits

• Usually utilized as mandatory savings
• Peace of mind knowing you have a lifelong protection
• Guaranteed death benefit
• Cash access once circumstances change
• Premium stays the same during the policy’s life
• Possible earnings for dividend that can be withdrawn or come in handy to reduce premiums and increase cash value
• Cash value portion continues to grow every year with guaranteed interest savings
• Could be used for saving money as a retirement fund

Drawbacks

• Coverage is not as flexible
• Higher premiums than term life insurance
• Coverage doesn’t keep pace with inflation that can put beneficiaries at underinsurance risk during the time of the claim
• Poor choice of investment since the interest earned on cash value might be lesser compared to other available alternatives of investment

Whole life insurance policies may also have expiration dates with some policies expiring once the plan holder turns 100 or 121 years old. Even if the policy expires, however, the cash value will remain payable.

Can you confidently say that you can still cover all of your financial responsibilities even if you miss one paycheck? If you can, then, you’re lucky. Unfortunately, most people today cannot say yes because many of them live paycheck to paycheck. In fact, some may even end up homeless if they miss just a single paycheck. Scary, isn’t it?

This is why it is a must to know how you can break from this cycle and be more confident with your finances. Here are a few helpful tips on how to stop living paycheck to paycheck.

Cut Down Your Expenses

Food, clothing, shelter, and transportation are the four key things you need for survival. Everything else is considered a luxury. Asking yourself if you need something to survive is one good way to know whether an expense is really necessary or not.  Even if it happens to fall within the basic necessities, there is no need for you to settle for the most expensive.

Look for cheaper alternatives and buy only those you need. Cutting things out from your budget doesn’t need to be permanent. The sacrifices are only temporary to let you save and pay off your debts to help you entangle yourself from the cycle of living paycheck to paycheck.

Stick to a Budget

Probably the easiest way out of living paycheck to paycheck is learning how to manage your existing funds.  If you cannot manage the money you’ve got, the situation will just get worse once you earn more. The very first step in proper fund management is getting on a budget. When you create a budget, your spending becomes more visible. It gets easier for you to determine the expenses that you can eliminate or reduce so that you don’t spend way beyond your means.

Raise Your Income

After establishing a system and money management habit, you can now start looking for ways to amplify your income. The main point here is to ensure that you have more money to pay off debt, save, and invest. More money doesn’t mean more expenses. In this case, this means you will be working with more.

You can choose from several ways of increasing your income. Things such as part-time jobs are perfect to boost your earnings fast. However, your main goal here is to look for a consistent and sustainable way to earn more cash. Some of these ways include taking on seasonal or part-time jobs, selling unused items, and starting a home-based side hustle, just to name a few.

Pay Off Your Debt

Most strains brought about by living paycheck to paycheck is because of debt burdens. The majority of people’s paycheck goes to paying off car loans, credit card bills, student loan debts, mortgage, all these four, or more. Learning how to get rid of such debts is important to finally cut loose from the tedious cycle.

Changing old habits isn’t easy but with discipline and determination, it is possible to stop living paycheck to paycheck.

A lot of people feel that society looks down on them because of having a poor credit score. Well, it is true. It may be unfair as there are numerous reasons why somebody ended up having a poor credit score.

For instance, loss of a job or medical bills may put somebody in a tough situation. But, the reality is that credit problems do not go away easily and easy to acquire. Typically, they stay on your credit report for a long period of time.

What Poor Credit Score Means?

If your credit score is poor, you have to take action to build up credits if you like to qualify for credit cards, car loans or mortgage. If you don’t have credits, you might like to begin with a secured credit card. Secured cards will require making monetary deposits as security for the card. Lenders will establish your card limit that is based on the money you have on deposit.

If you do not make the required payments on the card, the lender will use your deposit for covering missed payments. Lenders aren’t taking a risk and having secured card may provide somebody with poor credit history the opportunity to have some positive results. Once you have proven yourself, you may apply for unsecured credit cards.

If you have poor credit score, it is essential to take a look at your credit report to ensure that it is accurate. If it is not, begin the process of disputing items that do not belong to you or incorrect. Never forget that you may get your credit report once every year. It is something you must take advantage to ensure that your credit report has updated and accurate information.

Poor Credit Score – How Can It Affect You?

Having poor credit score may affect you in various ways and these include the following:

• Difficulty Getting a Small Business Loan

If you have a small business and you need loan, having poor credit score might make it impossible or difficult for you to get one.

• Risk of Being Rejected for a Job

While employers cannot access your credit score, they may ask for your credit report and with negative information, you could be at risk to be rejected for a job. That is the case for the positions that have some financial responsibilities.

• Difficulty Getting Approved for a Cellphone or an Apartment Contract

It comes back to the risk. Some providers do not like to lose money through taking on risky customers.

• Risk of Being Denied Credits

The lenders reject your loan application once you have a record of managing your credit poorly.

• Trouble Getting a Mortgage

A mortgage is a huge loan. Lenders like to be confident that you won’t default on them. While others will charge high interest rates, some might reject your application.

• High Interest Rates

Since lenders see people with poor credit as a high risk, they will charge high interest rates. Having a bad credit score can result to high interest rate on home mortgage that may cost you thousands of dollars.

Poor credit score does not define who you are. You don’t have to be ashamed about it as there are ways on how you can improve it.

A cashless world might sound something out of science fiction. However, what you should know is that the world is already on its way. Some powerful forces are behind the move to cash-free world including big financial services companies and governments. Even the critics of mainstream financial system as well as government-issued currencies favor with cashless world.

Cashless World – What Does It Look Like?

Without cash, all payments will be done electronically. Rather than using coins and paper to exchange value, you authorize fund transfer to another business or person. The logistics are developing, but there are some hints on how cashless world could evolve.

• Cryptocurrencies – They are already being used for money transfers and they introduce innovation and competition that can help keep the costs low. However, they have regulatory hurdles and risks that make them a bit impractical for majority of consumers, so they might be not be good for widespread use.
• Mobile Payment Services – Mobile devices are used for cash-free payments through apps or online services.
• Electronic Payment Apps – These are helpful for the P2P payments. Aside from that, the bill-splitting apps enable friends to split their bills in a fair and easy manner.
• Debit Cards and Credit Cards – These are among the known cash alternatives today. However, cards alone are not enough. The mobile devices will likely be a primary tool for the payments.

Advantages of a Cashless World

• Paper Trails

Financial crimes must dry up. It’s difficult to evade taxes and hide income when there is a record of each payment you get. Money laundering is much harder if the fund’s source is available.

• Less Crimes

With cash, it is much easier to steal money, whether the amount is small or big. Illegal transactions usually take place with cash so there is no transaction record and so the seller may be certain that he or she will get paid.

• No Cash Management

To print coins and bills, it costs money. Businesses have to store money, deposit cash when they have, and get more once they run out. Moving money and protecting a huge amount of cash is now a thing of the past with a cashless world.

Disadvantages of a Cashless World

Depending on one’s perspective, going cashless can be problematic. Some of the disadvantages of a cashless world include the following:

• Hacking

Hackers are muggers and bank robbers of the cashless world. The consequences in a cashless world are higher if someone drains your account because you do not have alternative ways to spend. Even if you are protected under federal law, you might still face some inconveniences after a breach.

• Privacy

Electronic payments may mean less privacy. You might trust organizations that handle your data and you might not have something to hide. However, your payment information might turn up in ways that can be impossible to predict. Cash enables you to spend money and get funds anonymously.

• Fees

If you are forced to select from just some payment methods, a payment processor can just cash in on high volumes. It gets rid of the savings that must come from handling less cash.

Asking your employer for a salary raise can be a bit nerve-wracking. But, what you should keep in mind that there is really nothing wrong with asking for a raise that reflects your hard work. However, there are some best practices and approaches that will always give you better results than others. Even if your manager has data on the hard work you have been doing, you still have to present your case why you are deserving of a salary raise and you have to be ready to negotiate.

Prepare Yourself Before You Negotiate a Salary Raise

You must not ask for a raise on your salary without preparing for the negotiation. Regardless of how great your relationship with your employer, it expects you to prove that you deserve the salary you are asking and you will not favorably respond if it’s like you didn’t prepare.

Before opening the subject to your employer, you must know your worth and build your case. Look back to the periods of time and projects where you went beyond what was provided and expected for your company. Always use particular performance data if possible.

What Should You Say to Get a Salary Raise?

After you prepare your evidence for why a salary raise is what you deserve and choosing the best time to talk to your employer, it is crucial to think of what you will say during your conversation. You do not really need a strict script, but you should be specific and clear in your delivery and it will help you have some phrases up your sleeve to guide the conversation.

• Be Specific

Consider mentioning your preferred salary and outline how you came to this kind of conclusion. Bring your salary estimate. You must be clear when you like your new salary  to be effective and other details that are pertinent to your preferred compensation.

• Be Clear

A simple way to start a raise discussion is saying something like you are looking forward to growing and working with the company.

Ways to Negotiate a Salary Raise at Your Job

Though your employer understands the value you are adding to the company, it does not mean they will offer you a raise. You should prove your case like the way you prove your case to have a high starting salary. Below are some of the ways to negotiate a raise effectively:

• Be Persuasive and Firm When Stating Your Case

Persuasiveness and confidence are important to negotiate a raise.

• Choose Your Moment

You should pick the right time to negotiate for a salary raise if you are serious to get it. A good time to bring up the subject of a raise is when you know your employer is impressed with your performance or she/he is in a good mood.

• Leverage Internal Moves

Having a new role provides a good negotiation opportunity. If you’re considering a new job or promotion with your employer, don’t consider the argument that the hands of management are tied. Try to use market data when laying out what it’d cost the company to hire off the street. You’ll likely find resistance. However, you should be firm.