Many people do not understand the advantages of having a monthly car insurance payment. They see the payment as just an added monthly bill and an inconvenience. This could not be further from the truth.
A budget is very important whether you have a family or you are single. Budgets help you keep track of where your money is going and how much is coming in versus how much you are spending. If more is going out than is being brought in, then you can find yourself in debt. Everyone wants to avoid debt, so it is very important that you keep track of your spending.
Now say that you spend $1200 a year on insurance. This is a simple figure but it will show how easy it is to budget using a monthly insurance payment. Let’s say that you pay your insurance only twice a year. This means that you will have to pay $600 every six months. That is a lot of money for one bill at one time. If you are like many other people, then you end up struggling to come up with that much when it is time to pay your car insurance. You may have had to buy new tires, school supplies, or replace your refrigerator. You may have medical bills or simply the bad luck of having to pay your property taxes at the same time as your car insurance.
Based on this scenario, if you paid monthly for your insurance, then you would only pay $100 a month. Every month when you write down your budget you would simply put in the one hundred dollars for your insurance. You will find several advantages of this. You will not forget the bill so you will not have any nasty surprises down the road. You will be able to have a lower payment each time you pay your car insurance. Even better, you will know exactly where your money is going and how much to budget for when you do have big expenses like property tax.