Reducing expenses is one of the things we continue to work on. There isn’t a day that goes by without brainstorming about what we can cut.

Around July 2018, I had an expense reducing revelation 💡.

The Backstory….
In a previous post we spoke on our 3 stages of budgeting – the past, present and the future. Insurance policies are one of the ways we secure our present and future. These policies protect our home, car, health, and family. It is therefore important that we maintain them; however, we will do so as cost effective as possible.

The Story….
While paying our car insurance premium in July 2018, the representative asked if we were paying the entire annual premium or taking a payment option (usually 3-6 months). Taking payment options normally result in a slight increase in the overall premium, I assume this additional amount was for the convenience 🤷🏾‍♀️.

The Revelation….
Anyhow, this had me thinking about our life insurance policies that we pay monthly.
🤔”Would it be cheaper if we changed our payment mode from monthly to annually?”
🤔”Was it even possible to change it to annually?”
I called our agents and they said “yes!” 🥳🥳.

The Calculation….
Excited about this news, I requested the annual amounts for each policy, did some calculating and it turns out that we will be savings over $300 a year by making this switch.

The Reality….
Making annual payments requires larger amounts of money at once and not the small convenient payments we are used to. We need to ensure that these lump sum payments can be covered without breaking our budget when the time comes.

The Plan….
From January 2020 we will change each policy payment mode from monthly to annually on their anniversary date. We will then divide the payments over 12 months and set up an insurance sinking fund (see highlights for definition). This will ensure that on our anniversary dates the following year, we will have the money saved and available to pay the insurance again.


  • Savings offered for paying annually (over $300)
  • Collect interest monthly because our sinking funds will be saved on an account.

We consider this a win win in our books!!

How do you pay your insurance policies? Do you take advantage of the annual payment mode savings?

How to Save on Insurance Policies

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