Week 6 of Budget 101

Part 6: Save on the Special Things

Vacations.  Birthdays.  Holidays.  We know they’re coming, and yet it is so easy to blow our budgets just because “it’s a special occasion.”  If you’re still with me after all this time, you should be starting to feel pretty good about your budget.  After all, you’ve been able to make a distinction between your wants and needs, you’ve set a budget for yourself, and hopefully found ways to save some money on the big things (like housing & insurance), the necessary things (like utilities & groceries), & even the fun things (like shoes and wine!)

(NOTE: Before we go any further, if you are new to my blog or missed out on the last five weeks, you might want to start at Week 1 of Budget 101 before starting this week’s assignment!)

If there is no leeway in your budget for those things that only come up once in a while, you may find yourself seriously strapped for cash when the time comes.  Since holidays, birthdays, & vacations are terrible times to be worried about money, it is best to plan ahead.

This week’s assignment:

Keeping your online buying hidden

1. Set a Special Occasions Budget.

Sitting down and actually writing down how much you can afford to spend is a giant step towards saving money in this area.  Too often we get caught up in wanting to “splurge” for something special, but those splurges can catch up with us!  After all, there are a LOT of special occasions throughout the year!  By looking at them as a whole, rather than a once-in-a-while thing, it is easer to see the big picture.  It is also easier to set limits for ourselves when we are not caught up in the moment!

2. Find ways to save throughout the year.

I realized during my college years that coupons DO work. The key to saving lots of money with coupons is to buy things when they are at their rock bottom price, then stock up for when you need them.  This method of shopping has easily been carried over to the rest of my life, and has saved me a lot of money in the long run.

The more you plan ahead & buy things when they are cheapest, and not when they are most convenient, the better off you will be.  Stock up on items for the next year in the post-holiday clearance sales or buy toys & other gifts in bulk when you find a great special.

You can also keep in your purse or wallet, a list of people or occasions you know you will need to buy gifts for in the next year. Make sure it includes how much you have budgeted to spend.

3.  Be on the lookout for good deals!

Once again, this is more of an ongoing assignment, and once again keep in mind there are always going to be more bargains available than you can afford to spend. Stick to the list and to your budget. Last week I listed several of my favorite places to score great deals; those same places apply here.

4.  Shop around & compare prices

This almost goes without saying, but is especially important when you are booking vacation travel!  Because prices fluctuate so much, there are no hard, and fast rules about where to find the best travel deal.  The only constant is that prices change a LOT, so shop around!

If you are traveling to a specific destination, be sure to price out all your different options, and to check a variety of travel sites before you book.  Don’t assume that package prices will be cheaper–sometimes they will and sometimes they won’t– be sure to check smaller, independent airlines in addition to larger travel sites when booking flights.

On the other hand, if you just want to get a great deal on a vacation but aren’t too particular about where you go, you may want to check out some of the daily deal sites like Groupon, Eversave, Totsy, & Living Social that offer vacation deals.  Additionally, Jet Setter is a daily deal site that exclusively offers high end vacation deals for a fraction of the normal price.

5.  Start Working On Handmade Gifts

Consider handmade gifts for as many people as possible.  With more time to plan, you also have more time to put together something really special.  Even better, those gifts will probably mean a lot more–it truly is the THOUGHT that counts!
Even if you’re not that creative on your own, the internet is full of amazing handmade gift ideas.
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And that’s all for this week!!!!! Stay tuned for next week’s saving challenge next Sunday.

9 Smart Ways to Save on Car Insurance

Understanding Auto Insurance Basics Liability Collision Comprehensive

Much like having to pay for utilities or car repairs, paying for car insurance is one of those annoying expenses that we all have bear, even if we don’t really want to. But while purchasing auto insurance may be unavoidable, paying too much to insure our vehicles are something to watch out for.

Although most of the time we simply just pay the bill without really thinking about it, there are actually some clever ways most of us can decrease our car insurance rates, at least a little.

Don’t believe me? Here are nine smart ways to save on car insurance that are well worth reviewing. Even if you’ve heard some of them before, taking the time to make sure you are following them could save you hundreds with just a phone call or two:

1. Review Your Policy Annually

Like with home insurance, it is important to be vigilant about reviewing your auto insurance policy on an annual basis to make ensure you are getting the best rate and to find out if there are any new or additional discounts available. Your insurance agent will not do this for you, at least not without you asking him to. Instead, you must be your own best advocate when it comes to paying less for insurance.

2. Shop Around

While it is easy to get attached to a particular agent or agency, particularly one who has served your family for years, it always pays to shop around.  Even if you decide to stick with your current provider, comparing prices and getting multiple quotes will give you a much clearer idea of what you could or should be paying, and will also give you more leverage for negotiating rates.

Interestingly, according to the Allstate policy specialist I spoke with, choosing the cheaper premium may not always be the best route to take. He suggested determining what coverage you need or expect to require as well as researching claims procedures (such as time to respond, special benefits, etc.), and then determining what type of relationship you want (face-to-face, web only, etc.) Once you’ve researched all these factors, and created a list of companies that offer what you are looking for you will have a much better way of comparing cost to value.

3. Combine Insurance Policies

While shopping around is important, it can also payoff big time to carry all your various insurance policies with the same carrier to take advantage of a multiple-policy discount.  Furthermore, bundling policies can not only cost you less money, it can also make life easier by giving you one reliable contact (your agent) for your insurance needs and questions.

4. Be a Safe Driver

One of the most effective ways to pay less for insurance is to be a safe and conscientious driver, as the best premiums and rates are offered to those without speeding tickets or accidents tarnishing their records. On top of that, many insurance companies give bonuses and credits for every additional year of safe driving.

But what if your record is already tarnished? Is there any way to redeem yourself once you’ve made a mistake?

Surprisingly, yes. While you can’t magically erase a bad driving record, you can vow to become a better driver from now on, and the longer you can go without any driving infractions, the more likely you will be to get a discount. Turn off your cell phone before getting in the car, eliminate other distractions as much as possible, and obey the speed limit and other traffic signs. Furthermore, it is sometimes possible to go to traffic or driving school to keep tickets from appearing on your driving record. Be sure to inquire if this is a possibility in your area!

5. Increase Your Deductible

Increasing your deductible is a quick and easy way to get a lower rate. Yes, your deductible will cost more if you ever need to file a claim, but as a good driver you may never need to. Even increasing your deductible by just a few hundred dollars can save you thousands over the long run. Of course, as our Allstate policy expert reminds us, just make sure it’s still an amount you can afford in case there comes a time that you do have to make a claim. Remember too that changes you make don’t have to be permanent—if the deductible feels too high you can always lower it again later on.

6. Drive an Older or Safer Vehicle

Insurance is often the last thing we think about when shopping for a new vehicle. We become distracted by all the beautiful colors and the shiny bells and whistles, and it isn’t until we actually have to write that first insurance check that we consider how much our pretty new car is really going to cost us.

Thus, before purchasing a new or used vehicle it is important to do a little research in order to factor in the cost of insurance. Older vehicles are generally much cheaper to insure than new vehicles because their value is greatly reduced. But, according to our Allstate analyst, age and value are not the only factors that come into play: The type of car could impact your insurance rates. For example, safety aspects of certain vehicles may end up costing less, while an expensive car could cost more to insure because it can cost more to replace. You also may be eligible for discounts if your vehicle includes certain safety features or is deemed an economical car.

7. Drive Less

Most auto insurance companies will offer discounts for vehicles that incur low annual mileage, which means that if you own a car that doesn’t get driven much or if you can find a way to drive less, you can save a bundle. There are many ways to do this, including carpooling to work (which can also provide additional carpool discounts), moving closer to work, walking, bicycling, or taking public transit when possible, or becoming more efficient with your errands by bundling them as much as possible. The added benefits of driving less include less wear and tear on your vehicle, significant gas savings, and less risk of accidents. 

8. Install Safety Features

While most newer vehicles come pre-equipped with standard safety features, installing additional safety features to older cars can help greatly decrease your insurance premium. Vehicles equipped with safety features such as automatic seat belts, running lights, an alarm system or anti-lock braking system can all save you money on your policy.

If your car doesn’t already have ABS installed in it, check to see if it would be worth the cost of installation. Insurers love the anti-lock braking system because its been tested thoroughly as a safety device and has a track record for effectiveness. Anti-lock brakes are highly effective in driving conditions where you may need to brake hard. You can keep control of the vehicle better especially when it comes to stopping on ice in a pinch.

Likewise, installing an anti-theft device may also help reduce your premium. Check with your insurance agent to be sure.

9. Take Advantage of Special Discounts

In addition to safe driver discounts, most insurance companies offer a variety of other discounts on auto insurance. While these do vary by state and company, just a few of the discounts that you may be able to take advantage of include Good Student Discounts, Senior Discounts, Retired Discounts, and Resident Student Discounts. At Allstate, Teen drivers can even take a TeenSmart driving class to lower their premiums.   There can also be significant discounts available for paying early, paying in full, or paying through automatic withdrawal.

Furthermore, while some occupations are not at all favored by insurance companies, others may qualify for discounts. You can end up with a higher rate of insurance for jobs in such fields as journalism, real estate agents, sales representatives and even entertainers, but giving your insurer information that is as specific as possible can help lower your rate. A journalist for example may get a high premium but if she is listed as an editor then she can get a lower premium. In any case do NOT be dishonest about your occupation or you may hurt your chances of qualifying for future claims. The occupation you state has to be reasonably close to what you do for a living.

While taking the time to review your auto insurance policy may not be the most enjoyable hour of your life, the thrill of saving a couple of hundred dollars should more than make up for a few minutes of tedium. These nine smart discounts are certainly a great place to start, but always remember be your own advocate and to seek out the best possible rate no matter what.

What Every Mom Needs to Know About Insurance

As parents, it’s our responsibility to make sure our kids are cared for. We go out of our way to keep our kids safe, from buying bicycle helmets to Band-Aids to winter coats, right down to holding their hand when they cross the street.

Most of us worry endlessly about our kids’ well-being. I know I do! But as much as we worry about the little things, it’s sometimes easy to let the big things, those risks and dangers that are a little more intangible—slip by ignored or unattended to.

A big part of protecting our kids, as well as securing financial peace, is making sure our families are covered for the big things including natural disasters, an injury or illness, job loss, or worse. Even so, it can sometimes be hard to determine exactly what coverage you need, especially when it seems like most insurance salesmen only want to play on your emotions.

When money is tight, you certainly don’t want to overspend on coverage that you don’t need, but you need be protected from major catastrophe. The best approach is to do your research ahead of time and be aware of the state of your family’s finances before you get a sales pitch.

It is important to remember that it’s not the insurance agency’s role to make sure you’re getting the best deal on insurance. It is up to you to be your own advocate and to get the best rate. Insurance isn’t something you can put on the back burner and just pay each month.

To get the best rates, you must continuously (at least once a year) revisit your insurance policies and do some comparison shopping. Plans and offers are constantly changing to meet the needs of the market. Rates can fluctuate as your family’s needs and situation change as well. Adding another driver, building on an addition to your home, changing your security system, or bringing a new member of your family into the world can all raise insurance questions and call for a little guidance.

There are seven types of insurance that you NEED: Homeowners/Renters, Auto, Health, Disability, Long-Term Care, Identity Theft, and Life.

Other insurances you should consider is also boat, farm and travel.

resizedimage600583-Home-Insurance-Icons

Home

If you’re paying a mortgage, the lender requires homeowner’s coverage, but even if you’re lucky enough to own your home outright, you want to be sure that you’re protected.

For renters, insurance protects your possessions in case of fire, theft and, in some cases, flood. Renters insurance is often thought of as optional, but as a parent, you must cover yourself in case of tragedy. Renters insurance is often really quite inexpensive (less than $20/month!) and it’s very important if you have big-ticket items that might be difficult to replace, such as audio equipment, collectables, exercise gear, televisions and appliances. Take inventory of your household and make a list of those larger items that could be damaged or stolen, and would result in major financial hardship if you’d have to replace them.

There are several ways to save on homeowner and renter’s insurance. You can raise your deductible, combine policies and do some home improvements and emergency preparations to raise the protection level on your home. Improvements to home security can also help you save, as can new windows, doors, and extreme weather protection.

Auto

 When we think insurance, auto insurance is often the first thing that comes to mind. Driving is possibly the highest risk activity that any of us do almost every day, and we all know the importance of having liability coverage. In many states, it’s now illegal to operate a vehicle without liability insurance or proof of financial responsibility.

In our litigious society, unfortunately, coverage is mandatory to protect yourself from financial ruin in case of an accident or driving mistake. One moment can change your life and the life of another driver forever. Trust me, your mind will be at ease when you know you’re protected.

When it comes to auto insurance, the value of your vehicle is important when you’re determining the amount of coverage and type of insurance you need. If your car is in its twilight years, you may feel comfortable with less coverage or just liability. If you have a newer car (or if you’re paying off a car loan), you need to have full coverage to keep your investment safe.

There are several other ways to save on car insurance. Shop around, compare rates, and don’t become too loyal to just one agency or provider. There are good driver discounts, multiple car discounts, and even good grade programs for driving teens and students. Installing safety upgrades or attending defensive driving courses can also help lower your monthly payments and save you when it comes to paying for coverage.

family health insurance coverage

Health

Health insurance is so important. As parents, we know we must take children to the doctor for regular checkups. We also know that serious health issues can come out of nowhere, and without coverage they can leave households financially devastated. For the many of us just surviving in todays middleclass, we make enough to pay all our bills, not enough for the extras, and too much for any assistance such as government plan health insurance such as Medicaid, family health plus and their attached HMO plans.

Many employers offer health insurance at a cost which also requires deductibles and co-pays, but if yours does not, or if you’re independently employed, private insurance providers are available. Under the Affordable Care Act, you may qualify for low-cost coverage based on your income. Keep in mind though, low-cost means anywhere from $200-$400 per person a month with deductibles and co-pays which is low cost for health insurance.

Consider a Health Savings Account and/or a high deductible plan to save the most. An HSA can save families thousands of tax-free dollars every year, which you can use toward your deductible, so your monthly premium will be lower. You can use your HSA for prescriptions, and depending on the plan, eye exams and preventative care.

Disability

Disability insurance should cover 65% of your income, and most employers offer disability coverage. It’s often something that’s overlooked, but one in seven workers will face a disability before retirement.

You should be sure your disability insurance is long-term. My personal opinion is that you should have 3–6 months of expenses saved up, which would cover your needs in the case of a short-term or minor disability. It’s the long-term scenarios that you should plan for. Most disabilities (90%) are not covered by worker’s comp or social security.

The effects of a disability can financially ruin a family if you’re not properly prepared. Many workers facing disabilities can be out of work for three years or more. Consider what would happen to your family should they face an unforeseen accident or tragedy that leaves you unable to work.

Long-Term Care

As a parent, long-term care is not necessarily something that’s on any of our minds, but it’s a necessity for anyone over age 60. If your parents cannot afford long-term care insurance, this may be something you want to consider.

Consider the scenario of a parent who is facing a condition like dementia, Alzheimer’s or Parkinson’s disease, and requires long-term care. This situation can quickly eat up your parents’ retirement savings and even dip into your own savings and accounts. Those who qualify for Medicaid will receive some assistance, but it often leaves patients with limited options and plans for complete care.

As you near your 60s, long-term care should be on your horizon and part of your post-retirement financial plan. It’s a way to make sure you don’t financially burden your children or spouse and ensures you won’t leave them unable to make ends meet.

Identity Theft

If you’ve never faced the horror in dealing with having your identity stolen, then consider yourself very lucky. With data breaches on the rise among major retailers, it seems like everyone is at risk. Identity theft can cost you big-time in terms of time, money, effort, and just general headaches. In a worst-case scenario, identity theft can damage your credit and make recovery very difficult—even if you’re an innocent victim.

Part of your insurance portfolio should include identity theft protection. You should be sure it includes an identity restoration service that can fix the damage and get your identity restored and safe once again. Teaching your family good identity-safety habits such as limiting your exposure online and protecting your passwords can help protect you as well, but should the worst happen, insurance will be a lifesaver.

Long Island Insurance Company

Life

Life insurance can be a little confusing. The general rule of thumb is you need term, not whole life. Cash value insurance can sound like a great way to invest and save money, but truth be told, it doesn’t offer high returns at all and generally is a poor performing product.

Term life insurance, on the other hand, is a way to cover yourself until you’re debt free and in a position to invest. It offers a way to help your spouse or children settle your estate and survive in relative comfort should something happen to you.

Term life insurance can help you cover burial costs and the costs of paying off your debt, plus further support of your family, particularly if you’re the sole breadwinner.

Facing uncertain scenarios in life is always unsettling, but having the proper insurance coverage can ease your mind and allow you to sleep a little easier at night. Look into the faces of your children and think of all the ways you would love to keep them safe. Insurance is one of the most simple, practical, and logical ways to protect your loved ones. 

Beginners Budget 101

 

My goal for this series is to guide you through a series of assignments intended to put you on sounder financial footing.  Basically it is eight weeks to a better budget. It is my personal guide, a beginners budget 101.

Each week we will tackle one specific area for us to work on, and then complete assignments related to that segment of our financial life. Keep in mind, just as anything you need to do in life, following this series will take some effort & commitment on your part. There are many ways to budget your financial life, and this is the blood, sweat, & tears edition. Okay, well maybe no blood 🙂

Every Sunday will mark a new week towards a better budget. Come join me and save! Click on Budget 101 in the menu scale, and use the drop down to view the series by week.

Disclaimers: 

  • I am not a financial expert or certified financial planner.  I have degrees in business administration, criminal and business law, have studied accounting, and am a certified tax preparer.  I have no credentials whatsoever beyond my own experience to qualify me for teaching anyone about saving money.  There are plenty of money experts out there who could probably explain this stuff far better than me, and some I will even refer you to.  My only goal here is to try to break down the scary world of budgets and saving into manageable bites.  Yes, this is the baby steps guide to saving. This is my personal guide, and its work for me.