How Much Money Should you Invest in Car Insurance?
Investing in car insurance is pretty expensive. But remember one thing: You always have options. One of those options is to search for an insurer who offers a good number of discounts. Another way is to create a budget that will help you balance your needs and your income. Check the following budget plan and get a free online car insurance quote from our website.
Let’s start designing the budget:
Add up how much money you take home every month. If you’re not working a steady job and your income fluctuates, take an average based on your last six months’ worth of earnings and use that as a benchmark. If you’re not working but are receiving unemployment benefits, write this amount down, but always keep in mind any approaching expiration date.
Add up all of your expenses, including rent or mortgage, car payment, insurance premiums, utilities, cellphone, credit card, medical expenses, gas, and food. Don’t forget to include any additional expenses like child care expenses or alimony. Be as thorough as possible and account for recurring expenses that aren’t necessarily fixed. This total gives you good insight into how much extra money you’re spending that you should be saving instead.
If the sum of your expenses adds up to more than what you’re bringing in, consider some cuts. Go down your list and eliminate any unnecessary expenditure, and leave only those that you absolutely need to pay for the roof over your head, your car and insurance, food, utilities and medical expenses. You can assign a small percentage of your earnings for “fun,” but never let this amount exceed what you can afford. Anything else that you have left over should be put into savings so that you can build up an emergency fund.
Also, some money saving tips:
Pay your entire six-month car insurance premium up front, in one lump sum. Although this sounds counterintuitive if you’re stretched for cash, it can actually save you money. In many cases, opting to spread the coverage out to monthly payments increases the cost by a small but potentially significant amount.
Sign up with your auto insurer for automatic withdrawals of your premiums. If you can’t afford to pay for your car insurance premium in a lump sum, having your insurance auto-deducted from your bank account will ensure that your coverage doesn’t lapse for non-payment if you overlook your bill.
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