Insurance Bills
Insurance column may seem very easy at first, but has some very important “Do” and “Don’t” factors that have to be considered before anything is entered into the final budget.
Like gasoline, this column may seem deceptively easy at first. This section also has some very important “Do” and “Don’t” factors that have to be considered before anything is entered into the final budget. Knowing what to add and what not to add is important if you want your budget to be realistic and actually assist you with your debt management.
Insurance that is already paid at work should not be included in this column. More often than not this insurance will be deducted from your paycheck in order to cover the premium of any work-related or supplemental insurance policies that you get at work. If the money has already been deducted and the premium has already been paid than the amount does not belong here in this column.
If your automobile insurance is included in your car payment, than it does not belong here. Most people will be using a third-party insurance agent in order to get their car insurance. However, as prices become more competitive, some people are getting auto insurance included in their financing charges.
If the insurance payment is included in another payment that you are already making anyhow and which is already listed here on the budget elsewhere, it does not need to be here separately and in more than one place. Writing any bill down more than once will only add to the confusion and the difficulty of budgeting your money and will make getting any actual and helpful figures almost impossible. The whole concept of a budget is to make life easier and not to make things more complicated or more difficult.
Likewise, any homeowner’s policy or other insurance policy that you have to supplement your homeowner’s insurance policy that is already included in any other bill that is already listed on your budget should not be included here. Many people will have additional life insurance policies which are included as part of their homeowner’s policy or even sometimes, policies which are actually financed, paid and maintained by monies included in the cost of the actual mortgage payment.
While these policies should be listed as assets in any comprehensive financial plan, they should not be included in the monthly budget as monies which need to be paid out. Since the bills are already included in a more complete bill and are already being paid and listed elsewhere in the budget, it is important not to include them here.
The only insurance policies which do need to be included here are those for which a separate and unique bill must be paid. If there is one automobile insurance policy which covers everyone in the household, that should not be listed separately for each individual but only as one bill that needs to be paid. If the insurance for the home must be paid to a third party with a separate bill and separate accounting, than that policy should also be included here.
In short, any bill that has to be paid independently of other bills, even among relevant items, should be included here. Any bill that is being paid as part of another bill which is already listed in a separate column should not be listed here. This is a very common factor with many insurance payments and care should be taken that they are maintained and listed individually only in so far as they have to be paid separately.
