How to Organize Insurance Expenses

"I am going to present a topic on budgeting. Again with the help of Expert Village, hopefully we'll be able to help people and assist people in terms of developing a budget. We are going to discuss insurance and how that impacts the budget. This is probably one of my favorite things to talk about as a financial advisor. I always talk to clients and make sure that they have enough insurance in terms of if there is a potential loss. Insurance can have a big impact on the budget depending on what you are doing. Again the basic categories of insurance are life insurance and that can be whole life or term. It can be whole life policy or term insurance and the premiums associated with that. Auto insurance would be the other topic to look at and then disability and that is associated with your job in terms of where there is a short term or long term disability. You get injured at work, who is going to replace that income? So that is where that disability insurance plan will come into place. Most people will have some type of a life insurance policy through work but in addition they also need coverage outside of work and normally you'd get that through an insurance agent or a financial advisor and most times that can be anywhere from $50 to $100 a month depending on how much insurance that you are looking to qualify for. For example, $100,000 policy for someone who is age 40, term policy for 20 years, may run between $30 and $35 per month. Again you will need to include that in the budget as a monthly item. Auto insurance; If you drive a car you have auto insurance and again that can be billed monthly, quarterly or semi-annually depending on how you have it set up. Look at your auto insurance policies and find out what you are paying on a monthly basis. In my case we have two automobiles. Our insurance runs about $100 per month in our household. So my monthly budget I have $100 per month entry for the two automobiles that we have. So that needs to be included into your budget. The last thing is disability. Again you may be covered through your job or you may not be. But a disability income will cover you in cases of loss or injury and that may be something you need to put in there. That could be another $20 or $30 per month."