Amazingly -- after all the fuss about 2012 -- the year actually didn't turn out that bad for our family. Sure, there were challenges, a couple major car repairs, a new set of tires, buying a home, having a baby, and the likes. However, overall the year went pretty smoothly for the family finances.
This doesn't mean that we're not on the lookout for issues when it comes to 2013 though. Part of our preparations for the new year come by way of our family budget, and we've found ourselves pushing our budget higher in certain areas.
Our health insurance premiums have been surging over the past few years, and heading into 2013 it's no different. According to a recent MSN Money article about 12 things that will cost more in 2012, "…employee health care premiums are expected to rise an average of 6% in 2013, according to Aon Hewitt, a human resource consulting firm."
Those statistics are all well and good, but our insurance coverage went up by about 30 percent from 2011 to 2012 and is set to go up another 25 percent in 2013 coming in at over $7,000 a year for our family.
We're really good at finding deals, cutting food costs, buying in bulk, keeping waste to a minimum, and eating leftovers, which keeps our food costs really low. However, according to a recent piece in the NY Times, "Come Jan. 1, there is a threat that milk prices could rise to $6 to $8 a gallon if Congress does not pass a new farm bill that amends farm policy dating back to the Truman presidency." And unfortunately for our family, with a baby who is looking to be taking bottles of Vitamin D milk soon, we'll unfortunately be ready to put more money toward the dairy category of our food budget.
With the new year almost upon us, I decided to review the insurance coverage for our condo and was surprised to find that our personal property coverage was too low. It's not that we have a lot of priceless antiques or expensive furniture or anything like that, but when I started going through all the things we would have to replace due to fire or smoke damaged, the cost was well over the amount of coverage on our policy.
While the amount we had to pay to double our coverage was minimal (about $40 for an extra 25k in personal property coverage), it's yet another budget cost item will be higher in 2013.
I have little faith that our governmental leaders will stop acting like five-year-olds (actually I'd have more faith in my five-year-old son acting more mature) and getting things straightened out when it comes to taxes and the fiscal cliff. And as a self-employed person, taxes (especially employment taxes since I pay both sides) are a significant aspect of my life. Without some agreement between the two parties on Capitol Hill, this aspect could add hundreds of extra dollars to our regular income tax bills and result in the cutting of things like the child tax credit, which could further increase our family tax rate and push our budget even higher in 2013.
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The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.
Heller, Laura. MSN Money. "12 things that will cost more in 2013". December 20, 2012. http://money.msn.com/how-to-budget/article.aspx?post=660267b2-6b01-4a8c-a6c2-d39cedab323a. December 22, 2012.
Nixon, Ron. NY Times. "With Farm Bill Stalled, Consumers May Face Soaring Milk Prices". December 20, 2012. http://www.nytimes.com/2012/12/21/us/milk-prices-could-double-as-farm-bill-stalls.html?hp&_r=2&. December 23, 2012.
- Budget, Tax & Economy