How to set up your
Money Management system

Review your insurances

Insurances are a large expenditure for most of us. They’re a necessary evil for most to protect our wealth and assets until we are financially independent.

We recommend setting up a schedule in a spreadsheet with all your insurances so that you can track them. The first thing you could do often is assess the amount you pay each year. This on its own could be a significant motivation to renegotiate some of your policies!

Your framework for the spreadsheet could include the following columns:

  1. Group– (Health, Risk, Property Investment, Home, Car)
  2. Type– (Level of health cover, Income Protection, Life, Building, Landlord, contents, replacement, roadside assist)
  3. Annual cost
  4. Provider (Insurance company) & Policy number
  5. Contact number
  6. Who/and or what it covers (name, address, car)
  7. Expiry date
  8. Deductible (Yes or No)
  9. Coverage (level of cover, and excess)

Extra tips include:

  • General Insurance – Review car and home related insurances yearly and compare to other providers. Insurers will usually offer a sweet deal to get you on board, then sting you in the second year.
  • Building insurance – Is the replacement value appropriate?
  • Annual Review/Expiry date – If you organise the expiry dates to occur at the same time each year, you can save time by reviewing all your insurances in one go. This will minimise multi-tasking which is turning one task into multiple tasks, which science and research conclusively shows is a highly ineffective use of our most precious commodity, time!
  • Landlords insurance – Some companies specialise in this area and have a policy that’s much more robust than many of the other major insurance providers. Plus, their premiums can also be more competitive.
  • Income Protection – Should you increase your waiting period on your income protection from 30 days to a longer period of time.
  • Personal Risk Insurance Indexation – Is it appropriate to permanently cancel indexation which ensures that your premium increase each year is minimised?
  • Life and total permanent disability –Check if these insurances are owned by a superfund? If so, are they paid within an environment with a lower tax rate?

Hitting the phones and negotiating

Now that you’ve created a list of all the recurring bills that you pay each year. Most, if not all will be coming out of your ‘Grow’ account. Why not dedicate some time to renegotiate your bills? You might address one bill a week until you’ve gone through them all or alternatively aim to do one a month. For bills that occur annually, you might choose to review them each year when they are due. A process for this could be as simple as;

1 – Call your existing provider and let them know you’re leaving and ask them what is the best rate or deal they can offer?

2 – Call one or a number of competitors to compare their best offer.

3 – Call your existing provider back and ask them to match the best offer and make a decision to leave or stay.

This all equals more dollars in your pocket!

Contact us today to book in a free confidential property planning, strategic mortgage broking, money management or property select meeting.

Call now – 1300 896 045