When it comes to finances in a marriage, budget for personal expenses, then don’t ask and don’t tell. This marriage advice will save a lot of arguments and even more marriages.
This is the seventh month in the series where I am writing about my experience with The $1,000 Challenge by Brian J. O’Connor. My goal is to save $1,000 each month on my expenses: $100 savings in each of 10 spending categories.
This month’s category is life insurance. The author picked this category because it was in his family’s top ten expenses. We all know that insurance and legal documents can help your family financially after your passing.
The fact is – we are all going to die. The only question is will we be a financial burden or financial blessing after we’re gone?
Not only did this category include insurance that pays a beneficiary upon your death, it also included disability insurance (accidents, illness, and pregnancy), and estate planning.
Although the $1,000 Challenge is mainly about slashing your budget, I think it’s great to have ideas about protecting your family’s future, even if it costs you money.
This month’s expense review includes policy premiums, disability insurance, and estate planning.
How to Save Money on Life Insurance Premiums
After visiting intelliquote.com to price shop, I discovered that we were receiving the best price possible, as we arranged our coverage through our credit union. (Tip: You don’t have to enter your contact information on the quote, just because the form asks for it. You will still receive a quote without entering it.)
I learned that we could save more by paying the premium quarterly or annually, but it is better for our budget to have the monthly payments drafted from our account.
We chose an amount that would pay off our debts, establish a college fund for our children, and help the surviving spouse recover from the loss of one income.
There are two main types of life insurance: term and whole.
Term insurance “provides coverage at a fixed rate of payments for a limited period of time, the relevant term. After that period expires, coverage at the previous rate of premiums is no longer guaranteed and the client must either forgo coverage or potentially obtain further coverage with different payments or conditions.”
Whole life insurance “is a life insurance policy which is guaranteed to remain in force for the insured’s entire lifetime. Whole life insurance belongs to the cash value category of life insurance, which also includes universal life, variable life, and endowment policies.”
We chose term insurance since it is the least expensive way to purchase a substantial death benefit over a specific period of time.”
According to the website I used, the price of life insurance policies ranged from $32 to $52 for us. That represents a savings of $20/month.
How to Save on Disability Insurance
I have had disability insurance policies in the past and relied on them during both of my pregnancies. I could not have survived financially without disability insurance. It compensated me for about 2/3 of my income while I was on doctor-ordered bedrest for nearly five months, during each pregnancy.
I am looking to add it through AFLAC in the third quarter of this year. I will definitely have it in place if we decide to have more children.
Since we don’t have these type of policies, there were no savings on this expense.
How to Save Money on Estate Planning
You can’t talk about life insurance without considering estate planning. When I worked for a law firm, my husband & I had Wills, Powers of Attorney, and Healthcare Powers of Attorney created.
The author suggested having a list of accounts, passwords, and beneficiaries in your personal files. I made a list of accounts and passwords and posted it by the family computer. A few years ago I created it when I had to be away from home for a couple of weeks and my husband didn’t have any of that info readily accessible.
Since we already have these documents, there were no savings on this expense.
All in all, I am saving $20 a month. That is $240 a year!
While reviewing my monthly transportation expenses in the first month, I was able to make a few small changes that yielded a savings of over $50 each month.
In the second month’s review of my utility expenses, I was able to trim nearly $80 each month by simply changing the way I pay bills.
The third month brought in a savings of $61. The author’s review of work expenses yielded a savings of $90.
Adding personal expenses was $47 and entertainment expenses was $100. That is a grand total saved of $448 each month. That is $5,376 per year!
Come back to see if I was able to trim $100 from my monthly grocery spending. This is another category I’m sure to find LOTS of savings in.
To read this series from the beginning start here: