My wife and I have finally gotten to a point where we are earning a decent amount more than our expenses. We are making responsible choices by paying for life insurance, saving for retirement, giving to those in need, and much more. We finally don’t have to stress about making ends meet. It only took us a few years to get where we are at, but with each new situation in life come new decisions.
Despite our recently-found stability, I have come to an important realization: we wouldn’t last very long if one of us were unable to work. Whether it’s because of an unexpected child or serious illness, we are financially secure right now because both of us work. If something were to happen to us, we would struggle to get by. There would be no extra cushion, no nice vacations, nothing like that. If it were caused by a medical condition, which increased our expenses, we’d have to ask family for help. It would be that bad.
When is Income Protection Necessary?
My wife and I have started to talk about short-term disability and other forms of income protection (like what is offered at Life Broker). Before I paint an inaccurate picture, let me clarify that my wife and I are very much middle class. We’re living in the North East, where cost of living is very high and we are still years away from being able to afford a home of our own.
But, we can afford to own a car, have a dog as companion (it’s getting here in a couple weeks), and many other luxuries. Our expenses aren’t outrageous, but are just above either of our salaries. We cannot afford to be a single income family at this point, but maybe in the future.
This is why we are considering short-term disability: if I or my wife were to get injured, we’d be in a touch financial situation. We’d likely burn through our emergency fund and go backwards pretty fast. Knowing how long it has taken us to get on track, we don’t want to go backwards.
While income protection is not necessary, and likely will result in us paying money that we will never see back, it is nice to have for peace of mind purposes. Since we both have long-term disability, my wife and I will probably forego another income protection options, but it will be something we consider more urgently if we decide to have children or anything of the sort.