Financial Budgeting and Savings on Personal Insurance

By: Mary Thompson, Capstone Brokerage President, February 10, 2016

Creating a financial budget can seem daunting and scary for many Americans. The average American spends more then they earn and often on unnecessary items. With advances in technology, online shopping and the growing use of credit cards, most Americans don’t even know where to begin when it comes to introducing a budget. Last month I discussed easy ways to start saving money every week and the need for an emergency fund. I have now created easy forms to help even the most weary learn to budget.

Recurring Expenses

There are expenses that stay the same or close to the same yearly, quarterly and monthly. I find it easiest to create an annual sheet for these types of expenses. Compile all of your statements to make this an easier process. I promise the first time entering everything will be the hardest; after that, simply staying on top of the spread sheet will take very little time. To make things easier, I have created a trouble-free template to use for these types of expenses.

To enter your information and start using this form, save this Recurring Expense sheet to your computer.

This would include: mortgage payments, automobile loans, health insurance, utilities, life insurance, auto mobile insurance etc. Basically, bills that will remain the same throughout the year are considered recurring expenses.

How to save extra on recurring expenses

Companies frequently offer deals if you pre pay towards things like automobile insurance and homeowners insurance. For example, if you pay you automobile premium quarterly, often times the insurance company will cut you a small break. If you are able to afford it I always recommend this option to my clients. Another way to save on insurance is to bundle coverages. For example, if you have insurance with the same carrier for your cars and home you are often cut additional breaks on premium.

Monthly expenses

There are different needs at different times for every family. Some things remain fairly constant, like groceries. I set a budget every month for groceries and I try really hard to stick to it. I find that meal planning helps to determine grocery needs as well. I have created a form for changing expenses that can be used for specific needs, such as groceries, entertainment, and eating out. Set a budget each month for these expenses based on what is left over after the recurring expenses and try to adhere to it. This easy to use form works well for these types of expenses.

To enter your information and start using this form, save this Monthly Expense Sheet to your computer.

Simply determine the categories specific to your needs and create as many forms as needed to coincide with these categories.

How to save on monthly expenses

Well, there are ways to save even on expenses that change. When it comes to groceries, there are coupons that can drastically cut costs. It is also smart to follow the stores circulars to purchase needed items when they are on sale. For example, if chicken is on sale one week, stock up on it for all your needs for the month. Also take advantage on deals for entertainment and eating out. Often times, restaurants offer deals on slower days or have kids eat free promotions. Utilize these options to help stretch you money. I love to go to the movies, however, for an average family of 4 this can be an expensive hobby. Take advantage of matinee pricing and consider allowing the kids to share one candy. I find it easiest to explain to my kids and grand kids that we are able to go out more often and do more things by simply cutting back a little while we are out.

Planning for the Unknown

My Son-In-Law always says, “Something unexpected comes up every month”. I encourage those wanting to budget to include a budget for these things, such as the recital costume, the need for new shoes, or school expenses. Set a certain amount aside every month that would allow for these costs to be covered. If you end up not needing to carry the money over to the next month, add it to your emergency fund.

Goals

It is helpful to set goals each year, such as saving for a family vacation, paying off credit cards or making the large purchase. Make goals that are attainable, start small, like simply adhering to the savings plan I suggested last month. If you account for these goals in your expenses you will see how easy it is to obtain them.
Insurance comes in many forms; the obvious forms are the ones that are legally required, such as automobile insurance, health insurance and homeowners insurance. I also like to think of insurance on a broader spectrum. Having a financial plan, budget and goals can be like having an insurance policy for your future, stressful financial situations, and ability to take that trip you always dreamed of. Speak to your insurance advisor if you have questions about saving on your insurance or bundling coverage’s.

With all these tools I hope many clients can help insure they are living within their means and saving for the unexpected and their future.