their children ($10,000 per child). However, some would argue that life insurance is about income replacement, so it’s not necessary to obtain it for a child. But when tragedy struck—one of Kofi’s daughters was killed in a car accident—they realized that it was a wise decision.
All stepfamilies have to make major adjustments to their lifestyles and to their spending habits. Take the Hales of Long Branch, New Jersey.
When Kim, 37, and William, 39, were married seven years ago, they had six children between them. Since then, they’ve added one foster child from Guatemala, Kim gave birth to another, and one more is on the way. Initially, the family moved into a three-bedroom apartment in Kim’s building because she didn’t want to live in the home that William had rented with his former wife. The newly formed family was a bit cramped, and within a couple of years, the Hales purchased a four-bedroom home.
Largely due to Kim’s influence, the Hales have learned to be frugal in their spending. Concedes William: “I made some bad financial decisions in my first marriage. We were over-spenders. I thought I could work overtime and make it work, but that wasn’t the case.”
In fact, when William and Kim married, he didn’t have a checking or savings account. Kim proved to be a good teacher and he was a willing student. They opened joint accounts and William has learned from her thriftiness. “Saving is hard with a big family,” says Kim, who spends as much as $250 each week on groceries. “I learned from my mom to save on small stuff. When you have a family this size and everybody saves a dollar here and there, it
adds up. I shop with coupons.”
They have also spent considerable time teaching their children to have respect for the value of a dollar. When the children were younger, they received allowances of $5–$10 a week, but now the teens must earn their money—especially since they have developed a taste for FUBU, Sean John, and other designer goodies. The older children have jobs and the Hales require them to fork over 10% of their paycheck as a tithe, another 10% for long-term savings, and the remainder for personal items such as school clothes, cell phones, and leisure activities.
These days, the Hales have been forced to batten down the hatches. Before William lost his job 18 months ago due to a legal complication with his employer and Kim was unable to handle the physical demands of nursing as a result of her pregnancy, their household income was $120,000. Today, their household income has been downsized to $35,000. To make ends meet, William sells health plans for AmeriPlan USA and Kim sells real estate. The two also generate limited income from Pure Word Ministries (William is a licensed and ordained evangelist). Over the past two years, they have tapped William’s entire 401(k) account—roughly $40,000—to maintain living expenses.
The good news, however, is that William will return to the electric company as well as gain