4 Expenses You Should Never Skimp On
Saving money to pay off debts or to make a big purchase? It’s easy to want to skimp on some bills when you have more pressing financial goals in mind. However, these expenses will end up costing you more later if you avoid paying for them now.
#1 – INSURANCE
Insurance is one of those expenses that it’s easy to skip. You don’t see any immediate result from paying it and it can feel like you’re just throwing money each money at something you’ll never see a return on investment for. However, insurance is designed to provide financial protection in an emergency or out-of-the-norm situation. You may not see any benefits from insurance for years, but when you do see it, you will be extremely thankful that you had it. Here are the main insurances you should never skimp on:
Did you know that bankruptcies resulting from unpaid medical bills will affect nearly 2 million people this year? That makes health care the number one cause of these types of filings. While you may be able to cover the regular doctor visit or infrequent trip to the emergency room, the costs for serious medical issues such as long-term illnesses, heart-related conditions and cancer can build up pretty quickly. At the very least, it’s best to make sure that you have insurance to avoid a bankruptcy scenario. An insurance plan with a capped deductible can give you peace of mind, knowing that the worst case scenario is that you’ll have to pay the deductible and not an ever-growing astronomical figure.
First, it’s against the law to drive without car insurance. That being said, you’ll also want to make sure you get enough insurance to cover bodily injury. A bodily injury is a medical expense, and you want to take every precaution to keep these types of out-of-pocket expense down.
One of the biggest investments you’ll make is your home. It makes sense to ensure that it’s protected. Every homeowner’s worst nightmare is the thought of losing their home from some type of disaster. Worse yet, is not being protected. Not having the proper insurance to cover your home can result in not only going through the loss of losing your home, but still being liable for the mortgage payment AND having to worry about paying for a new place to live.
No one wants to talk about it, but death is inevitable. Don’t leave your family saddled with the burden of unpaid bills or the expense of a funeral and burial services when they are in grieving. A few extra dollars a month is worth the extra peace of mind knowing that your family will be supported for at least a brief time after you depart.
#2 – DEBTS
If you’re in debt, it’s easy to skip a few more payments when something is already late. However, certain debts are more harmful to your finances than others. Make it a rule to pay as much as possible on your highest interest loans and debts.
#3 – EMERGENCY FUND
Your emergency fund is your everyday life problem protector. It’s amazing how much peace of mind you have when you know you have a few month’s salary tucked away for something unexpected. The last thing you need is to whip out the credit cards if a pipe bursts or your car breaks down. Make it a priority and your finances will thank you later for it.
#4 – RETIREMENT
If you don’t make it a priority to put money toward your retirement, you never will. You can’t work forever. When you’re thinking about spending money on a big ticket item, make sure it’s more important to you than the quality of your life in your later years. You don’t want to have all the fun now and then really pay for it later.