Toyya Funchess is a conscientious single mother who would do anything to care for her two children. Having served seven years in the Navy Reserves and three years in the National Guard, protecting herself and those she cares about comes naturally. So it’s no surprise that Funchess, 34, would purchase insurance to protect her assets and her family. “In the event that anything happens to me, my kids will be well taken care of,” she says.
But does she really need five life insurance policies? Now working as a material planner at a BMW manufacturing plant in Greer, South Carolina, Funchess’ company provides disability insurance that will pay 100% of her $45,000 salary (plus bonus) for six months and two-thirds of her salary thereafter. The company also provides life insurance, which Funchess has increased to close to $200,000 worth of coverage. In addition, she pays $22 a month for a $200,000 VGLI life insurance policy, $16.50 a month for a $160,000 policy with Met Life, and $37.50 a month on an $81,000 LSW universal life insurance policy that builds cash value at 6.75% interest.
The insurance coverage is Funchess’ way of dealing with risk. “I prefer to put my money into something that’s earning value,” she explains.
She put about $80,000 into a house she bought in May 2000, which she says was recently appraised at $90,000. Funchess’ other assets include more than $13,000 in her 401(k) account, $1,000 in a Roth IRA, $600 in a regular IRA, and $2,500 in a checking/savings account.
Funchess does have a heavy debt load. Her mortgage payment is $631 a month. She recently refinanced $16,000 worth of graduate school loans from 7% down to 5%, on which she pays $71 per month. She has an additional $2,400 in undergraduate student loans on which she pays $50 a month. Funchess admits to having poor shopping habits, which have led her to amass a combined $3,860 in debt on four credit cards. And she also has $700 outstanding on her checking overdraft account and a $4,400 balance on a personal loan.
Since she has an M.B.A. from Webster University in South Carolina and a job she enjoys, Funchess’ concerns mainly involve having enough money to send her 13-year-old daughter, Lauren, and 7-year-old son, T.J., to college. Other than that, “I intend to add an extension to my house — a den and a master suite,” she muses, “then, maybe I can take the kids on a cruise. I just want to make sure I’m on the right track to get my kids to college and to help me retire comfortably.”
To help Funchess rein in her spending and sort out the proper insurance coverage, BLACK ENTERPRISE turned to Sterling Laylock of Sterling Financial Advisors in Atlanta. “Toyya’s insurance protection is good but it could be more efficient and productive,” Laylock says. Overall, he believes Funchess has a handle on her finances. She is a reasonably good saver at $280 a month and has a strong understanding about managing risk. Laylock