Fitting Life Insurance into your Budget
Why is creating a budget so important and how can you make room for life insurance? A budget helps you get control of where your money is going. It will help with your financial well being and also give you peace of mind. Budget creation takes time, so set aside a few hours to do this. You want to start with a goal such as paying off debt or maybe it’s a college fund. How about getting yourself some life insurance? Here are some tips on creating a budget that works for you:
1. Gather everything that shows incoming and outgoing funds. This would be bills, bank statements, receipts. You can separate them into two piles: incoming and outgoing.
2. How much income do you have coming in? Keep in mind that your total income is not what you have to spend. It would be the amount you take home after your employer deductions for taxes, flexible spending etc.
3. Total up what is coming in and what is going out!
4. Separate the outgoing funds into two categories: utilities such as electric, water and your mortgage, credit cards, loans and insurances such as, home, auto and life insurance; and then discretionary spending such as lunches, movies, clothes, dinners out and even grocery spending.
5. The discretionary spending is where you can make the most changes. Look for ways to spend less here. Maybe dining out less and cooking at home, or spending less at the grocery store by buying generic brands instead of the name brands. It could be that you make your lunches every day and maybe only buy lunch one day a week. For myself, I used to buy my lunch every day. I was spending at least $5 per day if not more for lunch for an average of $25 a week if not more. By making my own lunch I save about $1300 per year that can be used for other expenses.
6. The money that you are not spending on the discretionary things can go towards paying down debt such as credit cards, loans and if you don’t already have it, maybe some life insurance.
Budgeting is a matter of knowing what you earn, what you owe and where you your money is spent and deciding where you can cut back so that money can be diverted to other bills. Sometimes it’s just little changes that make a difference.
We can help fit life insurance into your budget! Let’s get started…
About the author: Pam Fortier has been in the life insurance business for over 30 years. She also holds both a LUTCF designation and a CISR designation. Pam is adept at helping clients select the coverage they want at the price they can afford. You can contact Pam at 1-800-651-1953 or PFortier@Pivot.com.