MoneySmart

For young professionals, an apartment is more than a place to crash at the end of the day.  It’s also a “home base” for what’s important in life: our sense of security, the things we’ve worked hard to buy, and – if you’re the hosting type – social gatherings with friends, workmates, and new acquaintances.  But when an apartment doubles as a place to celebrate, there are risks renters face that can offset their sense of comfort and stability.  In other words, “party fouls” – damaged property, acts of clumsiness, and stolen electronics, to name a few examples. 

Of course, renters insurance is a great way to protect your apartment and valuables from party crashers and lumbering houseguests, but do you know how renter’s insurance works and what it covers?  Check out the following “party foul” scenarios, along with some advice on using renters insurance to protect your stuff and your place:

So you overpaid the U.S. Government and now you have a tax refund.  Maybe you even have a state refund too.  Party time, right?  Not so fast…

Why not first ask yourself: How can I spend that money wisely? The IRS estimates that the size of the average tax refund in 2007 was $2,255.  And whether your refund is higher or lower this year, now is a great time to use at least some of it to improve your financial life.

Here are a few smart ways to spend this year’s refund:

When young professionals decide to rent a place together, the first few weeks of living under one roof can be well… enlightening.  You may be surprised to find your roommate’s definition of “clean” is clothes scattered on the floor and dishes piled in the sink, or perhaps you’ll be caught off guard by his or her penchant for guitar-playing at 3 a.m.  No matter who you are - friends, couples, or strangers who met through the classifieds - some odd habits you’ll just have to accept.  But when it comes to living together, there’s one unknown that roommates simply must address: Managing your finances and spending.

Starting out on your own can be overwhelming, I should know - I did it, and made plenty of mistakes early on. Choosing your first apartment, deciding on a career, settling into your first job, dealing with your first credit card and cable bills … there is a lot going on, and often not a lot of help for you along the way.

You ask, like many, “Where do I start?” Indeed, that is my most popular question, and in this post I answer it once and for all – get insurance!

Why? Well, the first question you need to ask yourself is “What could ruin me or place me in a situation of hardship?” Usually it’s when your monthly bills exceed what you are able to cover. And certainly, out-of-control spending habits will make this deficit larger and larger. But that’s not what we’re talking about here. We’re talking about if something were to happen to you or your place of residence that could cause unplanned expenses – big ones.

What could that be? Well, for starters, healthcare. If you don’t have health insurance, you absolutely must get it. This is non-negotiable if you want to start out on the right foot. If hospital bills come in and you can’t pay them, well, you’ll be moving back home in short order. I know I know, it’s too expensive if your employer doesn’t offer it, right? Wrong! Look into temporary insurance and catastrophe insurance. Neither one is ideal, but it will give you some coverage, until you get a job that offers insurance. And if you get really sick or injured to the point where you can’t work, disability insurance can help protect you.