This Is Not About Whole Life Insurance

This post is an adaptation of YNAB’s fan-favorite newsletter, Loose Change. Sign up for more where this came from.

We eagerly opened up a fat envelope from our financial advisor, Tom. Finally, my wife and I were the kind of people who received fat correspondence from their financial advisors. Our accounts must have become large enough, our holdings so complex, that only a quarter-ream of printer paper would do. 

Alas, no. Tom had sent us two cheaply printed books hawking whole life insurance. 

We were immediately stressed out. The authors certainly seemed successful (if wearing a blazer in a head shot was any indication!). The books told stories of families that had protected their children financially and accumulated wealth through life insurance policies. But there was an infomercial-vibe that made us nervous. Why didn’t more people do it?

Still, the doubts whispered: what if we were missing out?

Like many people compelled to try risky or unusual personal-finance schemes, we could not imagine a conventional route to later life prosperity. We were struggling with the cost of living in New York City and a chronic illness which sapped our finances, year after year. What seemed like a short-term pinch became years of grind. So, of course, someone offering a way to bypass the traditional route of saving and investing was compelling.

Each month, our money ebbed and flowed like an unpredictable tide. We really didn’t know how much money we could safely put toward a policy each month. And we definitely didn’t know what the trade-offs would be of putting the money toward the life insurance payments and not something else. In the end, we felt so unsure that we threw out the books and moved on.

The lesson I came away with isn’t about whole life insurance, but about how hard it is to make wise financial decisions when you aren’t relating with your cash flow. (And with that sentence, my young self died its final death.) 

When you don’t prioritize or make a plan for all the dollars you have, you’re living in a trade-offs-free zone. And it’s less cool than it sounds! 

Life was painful when all spending seemed both vaguely possible and ill-advised. Should we move? Try to buy an apartment? Get takeout tonight? Do all of these, yes! But [small voice] should we?

We lacked the confidence to trust our decisions. Because we were so hands-off with our money, we looked to people like Tom to steer our (tiny, sinking) ship. But no one else is better positioned to have that ongoing conversation between the money you have and the things you want or need to do. It’s not a one-and-done. 

As someone who has long struggled with money (and now writes a newsletter about personal finance 😜), just because you don’t know how to make something happen right now doesn’t mean it’s impossible. But if you’re sitting back until the hypothetical moment when everything changes, you’ll miss the smaller opportunities when they appear—the choices that might incrementally lead to something great.

‍Worried about money? You’re not alone, and you can learn to get good with money. Try YNAB for free for 34 days and never worry about money again.

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Good With Money: A Look at Real YNABers

Meet Alissa! Four years after becoming a single mom, using YNAB has renewed her peace of mind and helped her go from crisis mode to thriving.

‍In 2018 I became a full-time single mom on a public school teacher salary. Due to life circumstances, my ex has not been able to provide any financial support. Prior to our separation, we were borrowing money from my parents monthly to make ends meet, and our savings was nonexistent.

I put off starting YNAB because I was afraid of what I would have to give up. Imagine my surprise when I finally started budgeting with YNAB and saw how much I gained! Fast forward four years: my only debt is my mortgage. Loans from my parents? Paid off! Student loans? Paid off! Car loan? Paid off! Four-month emergency fund? Funded—and I’m budgeting out two months! Retirement fund? On track to retire early!

However, the greatest accomplishment of all has been renewed peace of mind. So far, nothing has happened financially that has caused me stress—including earlier this year when I had to replace my dishwasher, tires, brakes and rotors, and my refrigerator within a span of three months—because I was saving for all of those things a little bit at a time over the last four years. My friends and family (well, maybe strangers, too) are probably sick of hearing me talk about YNAB, but it has quite literally changed my life, and I want everyone to experience the same freedom and peace of mind that I do.
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What is the #1 thing you are saving for right now?
‍Home renovation
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Okay, #2 as well!
‍I want my kids to experience new places and new adventures, so I’m also working to bulk up my vacation fund.

What is your top financial dream?
‍Retiring early while I’m still young enough to enjoy it.

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