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Budgeting with an open mind

By Cathy Moran

Various forms of insurance are often big pieces of my clients’ budget.  The irony is that they often have life insurance and car insurance, but no health insurance.  Yet the consequences of illness would be far more devastating than the risks my clients were protecting against. 

In the past two months I’ve looked at several  budgets that contained disproportionately large insurance expenses: once for car insurance for a single woman with two old, paid for cars, and the other, life insurance  for a single person of retirement age.

If the purpose of insurance is to pay a necessary expense should the named catastrophe occur, then in my view, the cost of the protection  for each of these clients was disproportionate to the risk.  I sent the clients out to reconsider the need for insurance of that magnitude.

It seems that budgets sometimes get on autopilot and no one has considered the necessity of the expense, or its relationship to other budget items.   When there isn’t enough money to go around, all items should be on the table.

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Filed Under: Managing Money

About Cathy Moran

I'm a veteran bankruptcy lawyer and consumer advocate in California's Silicon Valley. I write, teach, and speak in the hopes of expanding understanding of how bankruptcy can make life better in a family's future.

Bankruptcy Basics

About The Soapbox

You’ve arrived at the Bankruptcy Soapbox, a resource of bankruptcy information and consumer law.

Soapbox is a companion site to Bankruptcy in Brief, where I try to be largely explanatory and even handed (Note I said “try”).

Here, I allow myself to tell stories and express strong opinions. We dig deeper into how to consider bankruptcy and navigate a bankruptcy case.

Moran Law Group
Bankruptcy specialists for individuals and small businesses in the San Francisco Bay Area

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