Consumer Tips

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How Much Life Insurance Do You Need?

Life insurance in all its types can be very confusing. What kind do you need? How much should you get? Do you even need any life insurance? The tips below may help you answer some of your own questions.

Do you even need life insurance? Generally, if someone is financially dependant on you, that is a sign that some type of life insurance protection may be necessary. Even if no one is dependant on you, if you feel you will need it in the future, it certainly does not hurt to familiarize yourself with the different types of life insurance that are out there.

How much life insurance do you need? One of the most common methods used is the Capital Needs Analysis method, which is calculated by using these three steps:

  1. Add up what your family members would need to meet current and future financial obligations
  2. Add up all your current financial resources (savings, retirement plans, home equity, etc.) that your family could use to satisfy the above obligations (Note: don't forget to add in any benefits such as pension or Social Security payments)
  3. The difference between what you have and what your family will need is the amount of additional life insurance you will need.

Your life insurance needs can change over time. Certain events in your life may cause your life insurance needs to adjust like getting married or having a child, so it is important to constantly monitor your life insurance needs.

Did You Know?

If you are looking to insure your existing mortgage, consider a decreasing term policy. This type of insurance is often less expensive than mortgage insurance.

Social Security provides a one-time payment of $255 that can be made when you die if you have worked long enough. This payment can only be made to your spouse or minor children if they meet certain requirements.

Your employer may provide you with a Group Life Insurance policy. Generally this type of insurance is provided at no cost to you and can typically be 2 times your annual salary.


California Coast Credit Union can help with your life insurance needs. For more information call (877) 495-1600, or visit one of our convenient branch locations.

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Take the "Buy Just What You Need" Challenge

Do you think that for one month, you could you only buy necessities and skip the extras? The point isn't just to save money—it's also a way of examining your relationship with money.

Why would you want to do this?
Especially in today's economy, a month without buying unnecessary items can be a great way to get a budget under control, add to your savings or free up money to pay off debt.

What do you really need? Ask yourself if you spend a lot of money eating in restaurants or buying clothes. Do you take out $40 from an ATM, but can't remember how you spent it? Do you grocery shop with a list and stick to it, or do you make multiple trips to the store that add up to a lot of money? For one month, try focusing on what you need, not what you want.

Follow these tips to cut back on spending:

  • Skip the Saturday night restaurant. Instead, invite friends to a potluck dinner
  • Dine out at lunch instead of dinner. If you want to treat yourself on the weekend, go out to lunch instead of dinner. The daytime menus are always so much less expensive and are almost always a similar menu.
  • Take your lunch to work. Lunches and snacks you take to work are less expensive than eating out all the time, and may help you make healthier choices than you would at a restaurant. Then you can take a walk after eating because you'll have extra time.
  • Pack on-the-go-snacks. Dividing up a large bag of almonds or pita chips into individual baggies is more cost-effective than hitting the vending machine on a daily basis. And bring your own water or get it from the tap.
  • Split the cost of membership at a giant membership store with a friend. Go every few months and load up on basics like toilet paper, coffee and toothpaste. By sharing the items, you get the great deal without having much to store, and you split the annual membership fee.
  • Fill your gas tank for less. A website like Gasbuddy.com allows you to enter your zip code to find the least expensive gas station near you. Prices vary by as much as 55 cents per gallon at different stations.
  • Save on ATM fees. It pays to shop around. If you withdraw from an ATM that's not associated with your financial institution, you'll be charged up to $3. (That's $24 a month if you take out cash twice a week). Save by only going to ATMs affiliated with your financial institution, or use the get-cash-back option at the grocery store when using your debit card. Better yet – join a credit union where you have thousands of surcharge-free ATMs nationwide from the CO-OP network!

Are you ready to take the challenge? Try it with a friend, or get the whole family involved. You'll be surprised at how quickly the money adds up—and goes right into your savings. That's like giving yourself a bonus!

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Seven Smart Savings Tips

Whatever the economic news may bring, you can take certain steps to better manage your personal finances and take some control. Consider some of these savings tips to make good on your desire to start saving more each paycheck, pay off credit cards or put more money toward your retirement. More money in your savings account can lead to better peace of mind, especially in these challenging economic times.

  1. Watch your spending by using a notebook or Excel spreadsheet to track your habits. Think about two people paying $50 a couple for a restaurant meal and $11 per ticket for a movie every week-that's $3744. Just one fewer dinner-and-a-movie date night a month will save you a total of $864 per year.
  2. Make small changes in daily habits--they add up. If you saved $20 each week and invested that money in a federally insured savings account, assuming an annual return of even 0.25% APY, you would have accumulated $1,041 in 10 years; $5233 in 5 years and $10,531 in 10 years.
  3. Take advantage of online Bill Pay services. Using online bill is not only convenient, it helps prevent late charges that can quickly add up when you miss a payment date. Online bill pay is usually free from credit unions, and often has a reminder system to help pay bills on time.
  4. Cut the cost of credit. The best-case scenario is paying off your credit card each month, but that's not always possible. If you tend to carry a monthly credit-card balance, shop around for a credit card with a low interest rate card and no annual fee. Consider the benefits of a rewards card that gives gasoline or travel benefits.
  5. Ask your employer if they offer a flexible spending account to help pay for healthcare-related expenses with pretax dollars. This program is much more flexible than it used to be, and typically includes items such as physician co-payments, prescription and some over-the-counter medications, eyeglasses and braces. Check with your employer and the flex plan administrator for details.
  6. Consider opening an IRA (individual retirement account). An IRA Certificate offers a federally insured account and a guaranteed return. Check with a qualified financial representative and your tax advisor for more information.
  7. Think about using your tax refund to jump start your savings account or pay off debt. Ideally, your short-term savings account should have the equivalent of three months' salary in it for an emergency - like losing your job, healthcare expenses or a major home or car repair. Sometimes using your tax refund is a great way to jumpstart that emergency fund in your savings account. Or, if you want to pay down debt, use the refund as a lump sum to pay down or eliminate a credit card. What a great feeling!

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