The Three I’s of Financial Health: Insurance, Investments, Intelligence

shutterstock_157233458Monetary security for you and your family is about more than a decent-sized nest egg. It’s about comfortably affording your current bills, being able to save for the future, and making the most of what you have. Thinking of your financial picture in terms of the three I’s — insurance, investments, and intelligence — is one way of getting an accurate picture for sound financial planning.

Insurance

The name says it all: a guard against life’s uncertainties. Health, disability, liability, auto, earthquake, homeowners—most people see having all or some combination of these types of insurance as necessary. Insurance means that an injury or illness, car accident, house fire or other disaster doesn’t entirely derail your finances. Here at SelectQuote, we believe the same should be said about term life insurance: it protects the family’s economic security if something happens to a major earner.

Investments

This is the piece of the economic pie that makes that pie bigger. Stocks, IRAs, mutual funds, and other investment strategies all aim to make money for you while that money is set aside. Savings can be considered an investment as well; it’s just more readily available than long-term options (and that’s a good thing). Even modest contributions in these areas will add up and gain interest over time, and as your income grows, your investments should, too.

Intelligence

Being smart about how you divvy up your funds into the other two categories is possibly the best way to create a sound financial plan. Not living beyond your means is a given. Having enough cash on hand to cover three to six months of expenses in the event of a temporary loss of income (such as a layoff) is generally advised. Contributing to an IRA or 401k is necessary for retirement savings. Having not just insurance, but adequate insurance (in all its variations) means the unexpected won’t be financially devastating.

Taking control of your finances starts with understanding all the segments that make up your portfolio. And while Insurance and Investments are absolutely integral to the whole picture, Intelligence in economic management is perhaps even more essential. Practice all three I’s with the help of a trusted and experienced financial planner,and you’ll find that your economic pie is bigger and more secure than it might be without their advice. SelectQuote’s insurance experts are always available to assist you in your decision making, too.

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