Castles and Moats by Brian Carden

Author:Brian Carden
Language: eng
Format: epub
Publisher: Forefront Books
Published: 2022-03-08T00:00:00+00:00

CHAPTER 17 WHERE DO YOU FIND THIS “SAVED” MONEY?

FOR THIS CHAPTER, WE’RE GOING to look at your budget. Remember, you shouldn’t even be reading this chapter until you’ve completed your budget! One of the greatest feelings in the world is when you have margin working in your life. Margin to me is having the ability to not feel financially and emotionally squeezed by our life decisions. Margin gives us room to make better decisions with our money, our time, our emotions, and so many other areas of our lives. Regarding money, we can’t find margin in your cash flow if we don’t know where it’s actually flowing.

When working with clients, there are a few places I look to find potential savings. After all, the less you’re spending each month, the more room you can create for saving. The first place I check is their deductibles on auto, home, and health insurances. We talked about this a bit in the Moats section of the book, but let’s review: The lower the deductible, the higher the annual premium. That means you’re paying more each month/year for your insurance. What do you get for that extra money? If you have an accident and have to file a claim, you’ll spend less out of pocket. Does that make sense to you? Because it doesn’t to me! What we’re saying here is that you’re choosing to definitely spend more money today to avoid the chance of paying more money later. People jump into low-deductible plans without considering this basic fact. And, as a result, they usually end up paying far too much for their insurance than is necessary.

For example, say you’ve been carrying $100 comprehensive and $100 collision deductibles for the last ten years on your auto policy (meaning your out-of-pocket expense if you file a claim will only be $100), and the annual premium is $1,500. Let’s assume you have not filed a claim for the entire ten-year period. Hypothetically, if you changed your deductibles to $1,000 comprehensive and $1,000 collision, the new premium might drop to around $900 per year. Guess what? We’ve just found $600 that comes back into your life. Multiply that amount by 10 years, and that’s $6,000 of found money by one simple strategy. What could you do with those new dollars? Save or invest them? Purchase more protection to build a stronger moat? Pay off debt? Once you give it to an insurance company, in most cases, you never get it back!

Another place I look for potential savings is someone’s entertainment and dining out budget. I get it. We all do it, we all enjoy it, and we are entitled to some fun after a hard week’s work. But do you honestly have any idea how much you’re spending on restaurants, bar tabs, movies, concerts, and coffee dates? If you’ve been living without a budget, my guess is this is going to be a major shock to you when you finally start tracking your expenses and planning ahead.

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