We’d all love to have more spending money each month, and we’re all familiar with that sinking feeling when those debit orders come off and your salary seems to disappear before your eyes! If you want to cut back on expenses, then reassessing which of those monthly debits you really need, which you can reduce, and which to do away with entirely is a good idea.
But it’s just as important to know which bills you really do need to keep paying. Accidents and emergencies do happen, and in some instances you’ll end up losing a lot more financially than you’ve saved by cancelling your medical plan or insurance. Let’s take a look at what you need to consider when deciding where you can cut back.
Medical aid or hospital cover:
This is a prime example of the kind of bill that people get stressed about paying, and equally stressed about not paying! A comprehensive medical aid or insurance plan comes with a very hefty price tag – but if the worst happens and you require emergency medical care or are diagnosed with a dread disease, you’re going to be very glad it’s there!
The solution is going to be different for each individual, and you need to take an honest look at your own scenario. If you’re young and healthy, it’s tempting to dismiss the need for a medical plan – and in truth, the chances of you needing comprehensive cover are lower. But that doesn’t mean you can dismiss the possibility of being injured in an accident or even contracting a particularly nasty flu!
Instead of cancelling your medical cover entirely, do your homework and research some alternatives. A hospital plan which covers you in the event of an emergency is one of the options, and many medical plans offer different schemes which you can ‘downgrade’ to without losing your cover altogether.
Vehicle service plans:
Having to fork out a lump sum to get your car serviced once the warranty has expired is one of those dreaded expenses. And unfortunately, when cash is tight, many people are tempted to delay getting their vehicle serviced – often at the cost of increased risk to them and their passengers. If you really depend on your car or have friends and family that you transport regularly, vehicle service plans can actually be a big money saver – especially if you battle to save up on your own! As an added benefit, many providers offer free roadside assistance and optional benefits like tire insurance, dent and scratch repair and engine warranties that you can take or leave depending on what you feel you can afford.
Household and car insurance
Even if you decide to forgo household contents insurance, it’s a good exercise to put together a list of all the items you’d have to replace if you lost everything to a fire or burglar – and what it would cost to do so. If money is tight, then consider just insuring those items that you would need to replace immediately – your laptop, phone etc. While it may suck to have your TV stolen, you’re not going to die if you can’t afford to replace it right away – so this is an area where you can shave off on your monthly bills.
An increasing number of countries are making car insurance compulsory, so you might not have a choice with this one! However, if you spend a bit of time comparing quotes and coverage options there’s always the possibility you could find a better deal – so keep your eyes peeled! Some firms offer cash back bonuses after a designated period of claim-free years, so if you’re a careful driver you might even be in for a pleasant surprise.
Life insurance and funeral cover
This is a deeply personal issue, and let’s be honest – it’s not a lot of fun to think about, but it’s necessary to do so. If you have family or dependents who rely on you financially, the last thing you want is for them to be left destitute should something happen to you. Even if you live alone, somebody will have to cover your funeral expenses should tragedy strike – and no-one wants their final act to be one of a becoming a financial burden to their grieving family.
The good news is, once you’ve signed up and resigned yourself to that monthly payment – you can stop worrying about it! The same thing goes for many of those monthly accounts; and at the end of the day, it’s about weighing the cost against the peace of mind it offers – and that’s for you to decide.