Insurance

In brief, have insurance. Nowadays you can get insurance for just about anything: cars, houses, paintings, health, you name it. If you have something important to you that's insurable, you should insure it.

Sure, those extra car payments every month are kind of a pain. Car insurance can cost upwards of a couple thousand dollars per year. But how much does it cost to repair your car after some drunk guy smashes into it? How much does it cost for doctors to set your child's leg bone after he or she breaks it while skiing? How much does it cost to fix your house after someone left the stove on and it almost burned to the ground?

Of course, these are dramatic examples, but they illustrate my point. You may go through life (though it's highly unlikely) without getting in a single car accident; you may never get sick or injured; you may never have anything stolen. All of these things are possible, but it's almost impossible that all of them are true for any one person.

You've heard the horror stories from movies like SiCKO about people who don't have insurance, then get in an accident and fall into massive debt. You will probably never be like one of those people, because you're not likely to have a horrible accident. But you are likely to be in accidents, and paying a few thousand dollars each time one happens is going to cost you more than paying for insurance.

"What," you might ask, "should I do if I can't afford insurance?" The answer is that you can afford insurance. Maybe it means you buy the 45" plasma TV instead of the 60", or maybe it means you don't take that trip to Florida until next year. It's worth doing whatever you can do to cut back spending so you can buy insurance.