I am definitely a cautious person by nature. I drive the speed limit (basically). I double check that I’ve locked the door and turned off the lights. I wear sunscreen and my seatbelt. I can’t even bring myself to leave my cat at home by herself for a weekend – I mean, what if something happened?
This cautiousness carries over into my financial behaviors, and, frankly, is kind of expensive. For one, I buy lots of cautious-people products. Stuff like vitamins (to prevent illness), all natural cleaning products (who knows what’s in commercial tile cleaner?), and top-of-the-line smoke and carbon monoxide detectors (come on, that could happen!) aren’t cheap. These were just the things that sprang immediately to my mind, but I’m sure that I shell out a truly mind-boggling amount of money on non-essential but just-in-case stuff every year.
Also, there’s the insurance I insist on carrying. Currently, I have:
- Health insurance
- Pet insurance
- Renter’s insurance
- Car insurance
- Long-term disability insurance
That’s a pretty standard list, but if you dig a little deeper my cautiousness definitely becomes apparent. For example, I chose the PPO health insurance over the HMO because it covers more and you never know what could happen. Unfortunately, this costs me $60 extra per month. Also, my car insurance: since my car is paid off, I don’t have to carry collision insurance, but I refuse to get rid of it because what if I have a serious collision? I’d estimate the my collision insurance costs me about $20 per month more in car insurance than it has to. And theoretically, I could get rid of pet insurance, renter’s insurance, and disability insurance altogether, but….well, you get the point.
So all in all, I’d estimate that being a
paranoid cautious person is costing me at least $150 per month. Holy smokes, that’s real money! I should just take a chill pill and cut some of those costs, right?
Wrong. Well, at least for me. People in the personal finance community are constantly talking about how their emergency funds help them sleep well at night. For me, being fully covered by various types of insurance and coughing up the extra money on my “what if” products does the trick. I recognize that I can never be 100% protected from all of life’s vagaries, but it makes me feel calmer knowing I’m doing my best, even if that means spending a little extra.
What about you? Are a Nervous Nelly, too? Or do you roll the dice, hope for the best, and pocket the money saved?