09/12/2013 08:32 am ET Updated Nov 12, 2013

Workin' 9 To 5: Two Ways to Protect Your Livin'

In the words of Dolly Parton, "workin' 9 to 5, what a way to make a livin'." This crazy 1980's movie is one of the best comedies about three women and the hijinks that ensue as they attempt to get even with their boss. No matter where you work, I am sure you've had those moments when you would be more than happy to open the highest window, and "suggest" that your boss step out over the ledge. True, work is not always fun, but no one has ever complained about cashing their paycheck on payday!

No, this article is not about two creative ways to take out your boss; rather it's about two ways to protect your most valuable asset, your paycheck. Have you ever taken a moment to think about this? Your most valuable asset is not your car, your home, your expensive shoe collection, etc. It simply is your ability to make money.

Listen, I know, we all take making money for granted. We just assume that we can get up every day and go out and make money. This assumption can get you into a jam, and I've seen it happen too many times. Here are two smart financial ways to safeguard your 9 to 5 paycheck.

Build Your "God Forbid" Fund

Your "God forbid" fund is just that; a place where you stash money that is liquid should you need to borrow from it. Your car breaks down, you get in an accident, you need to buy a new wardrobe for a job, you move, etc. There are far too many uses for the "God forbid" fund to list, but most importantly you need to have one, start one, or build on what you have.

Business Development Manager for Comark Robert (Rob) Chilcoat recently left his old job in search of his new "dream career." A "God forbid" fund was his lifesaver.

"Having saved up a 'doomsday fund' allowed me the flexibility to do something about my need for a career change. Fortune favors both the bold and prepared alike," he said. Rob learned some good lessons along the way that helped make the transition smooth like butter. "Cutting back is hard. Taking a loss on the sale of a car in the short term is far better than a car payment twice the monthly cost of an attractive lease offer on an equally comfortable car. And who doesn't love a new car?"

Rob made some smart decisions:
  1. Saved a healthy cash reserve in savings to cover 6 months of living expenses
  2. Opened a Capital One Interest Savings account to earn .75 percent on his money over the .125 percent he was earning at his bank
  3. Reduced expenses and moved his credit balances to 0 percent credit offers
  4. Sold his car for a short term loss and got a lease he could afford

Rob's motto is a good one; "I told myself I only take steps forward. Uncertainty I can't plan for, so it's onward and upward!"

Paycheck Protection

No one ever likes to talk about insurance. The word alone conjures up images of unethical car salesmen with big glasses and pocket protectors. I myself am probably the most skeptical of insurance companies, and I am a licensed insurance agent. The fact is, some insurance is a must have, and some might not be applicable to your situation. If you are under 50 however, paycheck protection should be top on your list!

Did you know that 1 in 4 of today's 20 year olds would become disabled before they retire (Social Security Administration, March 2011)? That is a staggering statistic. Think about it, count out 4 people around you, and one of them will have disabling injury, one that will indeed stop that paycheck from coming.

Daniel Steenerson, President & CEO of Disability Insurance Specialists, Inc., is one of the masters in the "paycheck protection business." In his words,

I once met a man that was proud of finally paying off the mortgage on his house. I was happy for him. That was until the day I learned that it burned to the ground in a fire. I figured as long as he and his family were safe, he could at least take the fire insurance benefits and build a new, modern home (minus any sentimental items lost in the fire).

But then he said the words that saddened me. "I didn't have fire insurance, once I paid off the mortgage I thought I could save a few dollars and cancelled the policy". I'm sure when he first learned that his house was burning, he wished he had it insured, but it was too late. The lesson I learned was that now is the time to insure your ability to earn an income, don't wait!"

Here are a few statistics to get your attention:

• 65 percent of working Americans say they could not cover normal living expenses even for one year if their employment income was lost (Center for Disability Awareness 2010)

• Approximately 37 percent of disabled men and 60 percent of disabled women in 2011 received SSDI benefits of less than $1,000 a month (2012 Long Term Disability Claims Review)

• 90 percent say they value their ability to earn an income, but almost 40 percent said they haven't thought about how they would protect this all important financial resource (Council for Disability Awareness 2010)

Now that I have your attention, there are a few ways to solve this problem.

One, most big companies offer a "paycheck protection" policy as a group. This is a great cost-effective way to get this coverage. Honestly, something is better than nothing.

Second, if your employer does not offer this, you can get an individual policy. Although this will cost more money, it is usually better coverage and goes with you no matter where you work.

There are all sorts of bells and whistles to these policies, which I won't address; rather I just want you to be aware of the problem and solution.

The next time you, "tumble outta bed and stumble to the kitchen to pour yourself a cup of ambition" in the morning, channel Dolly Parton and remember how important your paycheck is to you!