Another Budget Must-Have is Insurance

Another place to look for savings: insurance.

First of all, some types of insurance are "must-haves":

Health insurance

Homeowner's insurance or renter's insurance

Life insurance (This is a must have if you have dependents or a partner who will be impacted without this insurance. Kids don't need this.)

Disability insurance (if your employer does not pay this for you, you'll want to get it on your own)

This is not a comprehensive list. (If you live near water, flood insurance is a must-have.)

Some of you may be scoffing, thinking, I am covered . Not only do I have the best of all those insurances, I have a policy for my new toaster, my mattress, my kid's glow-in-the-dark yoyo, etc. If this is you, you likely are paying too much for insurance. Not everything needs insurance. If you are paying too much for needs, insurance is a good place to take a close look.

Don't blindly pick the most expensive health insurance plan offered by our employers or the cheapest. Or, in my case, get scared away by the thought of a high-deductible health insurance plan. I thought, "What if something happens? I don't want a bill in the thousands because we had to go to urgent care once!"

After looking at the numbers, I found that sometimes you're paying more than that hefty deductible in monthly premiums with the other healthcare plan. Add up all those costs and see if they don't equal or surpass your high deductible + lower premiums. Remember to subtract the contribution made by your employer from the amount you will have to pay to cover your deductible. Some employers will contribute a couple thousand dollars to your HSA at the start of each year.

It might be worth getting a high deductible plan with a health savings account. Divide your annual deductible by 12, and put that amount into your HSA automatically every month.
Unfortunately, there is no one right choice for every family. Everyone's healthcare needs are different, so there is no replacement for adding up the numbers yourself and seeing if it is worth it.

Last note: Read the fine print about how medications are paid for under your insurance. If you have expensive, monthly meds, choosing a plan that covers those prescriptions for a $10 fee may make a big difference.

For more on insurance and how to save, check out Cashtoons post from February 6th, (Insurance), and March 5th, (Shopping for Insurance).

Come back next week and we'll tackle options if your housing is costing too much.

Sources

All Your Worth: The Ultimate Lifetime Money Plan by Elizabeth Warren and Amelia Warren Tyagi.

https://www.thesimpledollar.com/save-money/trimming-the-fat-forty-ways-to-reduce-your-monthly-required-spending/

https://newsroom.aaa.com/2015/04/annual-cost-operate-vehicle-falls-8698-finds-aaa-archive/