Everyone is looking for ways to save money these days, and sometimes you can find big savings in places you never considered. One of the hidden gems is your auto insurance policy. Many people go for years without comparing rates or adjusting their policies, which often leads to overpaying. Here are five easy ways that you can reduce your auto insurance rates:
1) Bundle your insurance. Many insurers give big discounts to customers that bundle their auto insurance with either their homeowners or renters insurance policy. Some offer rates up to 20% lower when combined, while others only 5%. If your current insurer doesn’t have a bundled rate, call an agent or do some quick online quotes to see if a competitor can do better. You’ll also see very low rate increases on a second (or third) car on a single policy, so check that any vehicles you are insuring are together in one policy for added savings.
2) Drive a safe car. Not necessarily a boring car, but one that is considered safe by the insurance industry. Check with the Insurance Institute for Highway Safety (http://IIHS.org), who do crash testing and safety ratings specifically for the insurance companies. Sometimes you’ll be surprised by the results, so when shopping for a car, it’s a great place to start.
3) Take a class. This goes for young drivers and more experienced drivers alike. Driver training courses are a great way to get your auto insurance rate reduced and are available all over the country, and for every skill level. Programs for young drivers are often offered by schools or local communities at very low cost.
4) Pay for the whole year. I know that it’s sometimes difficult to pay the large sum of your auto insurance up front, but you can save a bundle over the year if you do. Most insurers have long-term payment options, but push for monthly payments that can add $5 or $10 fees per payment. Doesn’t sound like much, but by the end of the year it’ll be nice to have that $60-$120 in your pocket instead of theirs.
5) Remove distractions. We’re all guilty of driving distracted these days, but do what you can to reduce distractions in the car. Talking on the phone and texting alone cause about 30% of traffic accidents, and some studies show distracted driving to be responsible for up to 80% of all crashes in the US. There’s no easier way to reduce rates than keeping a clean driving record!
With these few tips, you should be well on your way to saving some money on your car insurance policy.
One thing I have noticed about successful people, or just people who have their finances in order, is that they usually have great time management skills. They know how to prioritize and get things done that need to get done. They also do whatever they can to avoid “wasted” time.
I’m a planner. I like to know what I want to accomplish and then get it done so that I can maximize my time. I hate not knowing what I want to get done or wasting time doing something I do not truly enjoy. That is one reason I am nearly obsessive about time management.
There will always be things that we should do that we don’t. We sometimes make excuses such as “there is no time!” or “I’m way too busy!” In reality the issue usually comes down to how we manage our time and prioritize what we do. There are many individuals and couples who do not have their financial house in order and often it is due to a lack of planning. It’s not the easiest or most fun task and it usually gets put on the backburner whenever possible. If we make time for things that should be a priority – like proper financial management – we would all benefit.
I thought I would offer up three tips that have helped me and continue to help me (I’m a work in progress!) manage my time, and in turn my finances, more effectively.
3 Ways to Improve your Time Management Skills
1) Write things down – If you are able to write things down as they come to you instead of trying to remember them later on, you will both save time and energy. The useful stuff you will have for quick reference and the junk you can just cross out.
2) Figure out your goals and, in turn, your priorities – With time management the key is to figure out what you really care about. If you care about having more time to spend with those you love, living a more frugal life could be something you prioritize. If you care more about having higher quality things, or just a bigger safety net you may want to look for some side work or figure out how to maximize your current income. Priorities should be tied to your goals.
3) Make lists – I’m a little biased: I make lists every single day. It helps me see what I want to accomplish as well as weed out the important tasks that need to be done soon as well as the tasks that I can shelve. Even if it is a task I may not end up doing for a week, it is still on my radar because it has a presence on my to-do list. If you don’t already make lists I would recommend that you at least give it a try – who knows, it might be an activity that really benefits you.
I hope this post was helpful. If you have additional tips to offer I would love to hear them!
I used to rip on the whole frugal lifestyle, and the constant coupon-cutting and bargain-hunting by those who adhere to the frugal code of conduct.
But here I am eating my own words because today I want to share with you a new (to me at least!) website that I think will become a normal part of my life: Groupon.com.
I first heard about them a few days ago. A friend at work asked if I wanted to go bowling because he had a free hour of bowling (with free shoe rental) for up to six people for an hour….every day of the summer. I couldn’t understand how he got such a great deal!
Well, turns out before the summer started he saw a Groupon offer where you pay $30 and you get the free bowling deal. I then started asking him more about them and he explained that a lot of the coupons were restaurant related and 95% of the deals he wouldn’t consider buying. The reason he stays on their email list is to get those rare deals that save him a LOT of money over time. He’s gone bowling over fifteen times and has yet to spend a dollar at the alley (he resists the temptation to buy food there). That’s one heck of a deal!
So I signed up for Groupon and the very next day I found a deal that I could see myself buying: $25 for a $50 GAP gift card. Granted I don’t go to GAP super often (probably once a month tho), and you have to use it within a month and a half, but the gift card can be used for any item in the store including my personal favorites: the clearance section.
Now I’m not sure if it will be another day, week, or month until I find another deal that makes sense for me to purchase but I do know that Groupon should save me a decent chunk of change in the long-term.
I’m interested to hear what deals you have found on Groupon, or whether this is the first time you heard of it? Do any of you NOT like them? That would be interesting to hear as well!
-DC
*Side note: NO I was not paid in any way shape or form by Groupon for this post; I didn’t even put my affiliate referral link in the post! I genuinely think it’s an awesome site!*
Even though the decision to buy or lease a car has definite financial implications, it’s not the only factor to take into consideration. Your lifestyle also plays a big part in the decision. What’s right for one person can be totally wrong for another.
Someone who’s a fan of leasing might argue the following eight points:
You have lower and more affordable monthly payments.
You get a brand new vehicle every few years without the hassle of having to worry about trade-in values or haggling with buyers.
You get to drive the latest models with the best safety and comfort features.
You drive a car that’s in great condition without worrying that a major repair will be needed in the future.
Most repairs are covered if your lease term lasts just as long as the manufacturer’s warranty.
If you drive a predictable number of miles and return the car at the end of the lease period with minimal wear-and-tear, you come out ahead.
If you have steady income, it’s unlikely that you’d need to terminate a lease early.
You may pay more in the long run, but all the benefits of leasing are worth it.
On the other hand, a fan of buying could argue these eight points:
You save more money in the long run, so making higher monthly payments is ultimately worth it.
Each payment allows you to build up equity for the future when you decide to sell the car or to trade it in
Once you pay off a car, you can drive it debt-free while saving or investing the equivalent of the old loan payment. Plus the longer you drive it, the less it costs.
Buying allows you to drive as many miles as you want and to use a car or truck without worrying about keeping it in perfect condition.
When you own a vehicle you can customize it any way you like.
The lower cost of ownership makes the risk that major repairs could be needed after the warranty expires, worth it.
You get to take advantage of a huge depreciation discount when you buy a vehicle that’s about two to three years old.
Buying is better if you have an unstable career or may need to relocate out of the country. Ending a lease early means getting stuck with the total payoff in addition to early termination charges.
Know Your Financial Objective
So what do you think? Are you a leaser or a buyer? I always buy used luxury cars and drive them right into their cold, clunky graves.
If long-term cost savings is your primary financial objective then it’s usually best to buy and drive a vehicle until, as they say, “the wheels fall off!” Or drive it at least until the repair costs begin to exceed the cost of replacing it. That’s the best way to save money in the long run (unless you have a really great investment plan for the money you could save by leasing).
But if you like the benefits of leasing make sure you understand what those conveniences will ultimately cost you. The biggest factor that determines the cost of an auto lease is the depreciation that’s expected to happen during the term of the lease. Different makes and models of vehicles depreciate at very different rates. So the best lease deals can potentially be found for those models that have the lowest depreciation rates. You may have the option to buy the vehicle at a price set in the lease. That might be a good idea if the vehicle is worth more than the agreed upon purchase price and a really bad idea if it’s worth less.
Use a Lease vs. Buy Calculator
You can use a Lease vs. Buy Calculator to compare any lease deal with a similar purchase loan. After answering a few questions about the offers you’re considering, the calculator will compare monthly payments and total costs of the deals. (Photo by roberthuffstutter)
Hi Dinks! Ready for another giveaway? Just got this one in the mail and it sure covers a LOT. Not something you read for pure entertainment, but def. worth having around.
Life Insurance is like a parachute, you may only need it once, but when you need it, you really need it. And just as important as your pilot, plane, and training are, your parachute is essential to your well being and needs to be packed correctly. In an emergency situation, Life Insurance will be that necessary element that guides you and your family to safe ground.
With twenty years of experience in the life insurance business, Anthony Steuer delivers a practical, one-of-a-kind resource to guide you through the basics–and the finer points–of life insurance and helps you choose the policy that is just right for you and your family. Using a simple question-and-answer format, Steuer covers everything you need to know about life insurance, including how to:
Differentiate between types of policies
Find and evaluate a policy and company
Hire a trusted agent
Understand the practice of underwriting
Monitor a policy’s performance
Sound interesting? Tell us what you’re grateful for in the comments below, and you’ll be entered to win. We’re giving away TWO copies so your odds of getting one are automatically doubled :) We’ll pick the 2 winners this Saturday night at Midnight – good luck!
——- *Giveaway is now over* Congrats goes out to Tim and Kelli! Check your email for details on how to claim them. Thanks for participating everybody – will be doing more as time goes on :)
For two weeks and change I ventured across the pond to Merry Ole England for travel and a good friend’s wedding. For one night while I was in London, I was to meet the bachelor party at a very hip London nightclub.
It was two hours before arriving that I found out that we were expected to contribute around 200 pounds (around 350 dollars) for each person’s share of table service.
I balked.
Talk about peer pressure.
Two discussions came up when I let the group know there was no way I could afford a 350 dollar tab for one night at a posh club where we might see Rihanna. One such discussion was something I encountered before in comments on my Washington Post piece on haggling. One of the guys said, as I finished explaining that I had budgeted for the trip and was sticking to it, “Hey, you make more than anyone here, so you should be spending it, we’re doing it.” This is a tough situation when you are out with friends, do you stick to your budget or to the group? My assessment was that the night would soon be out of control (money-wise) as the party prowled for women (something that, being married carried little appeal to me).
Later, as the bravado was building in the party, I was taken to task again for my frugal ways. “Big deals happen in places like this man. You’ve got to look like you belong here, so spend some cash.” Stepping back to observe the club, I saw many groups of men positioned in the same similar manner watching the ladies (exceptionally beautiful ladies) dance and gyrate. The only people I saw who looked like they belonged there were the bartenders. The rest were posturing.
When it comes to friends and nights out and money, I find frequently that my frugal, budgeting approach is at odds with a seat-of-the-pants (or something else) financing. It’s difficult to tell your friends “No, I just don’t have the money.” It is ever more difficult when they think you do.
That night, I just stepped back and took some hazing as I sipped on one of two scotch drinks (40 dollars). I did not mind. The groom to be was having a good time. The rest of the part had objectives that were dramatically different than mine. Planning for a night out wasn’t something they considered, whereas I had planned and budgeted my two week trip based on what I knew before going on it (Had I known about the proposed expense of the night a month, rather than two hours in advance, I could have adjusted my budget, but alas. They way those in the party handle money, which I’ll be talking about in an upcoming column, is quite different than mine.
Explaining to friends or loved ones respectfully that “you’re on a budget” is not embarrassing. It may be a little uncomfortable at the time. However, what I do know is that a day or so later, one of the guys told me that he hadn’t wanted to spend so much in the club, but didn’t know how to say no.
Wow! The average interest rate for a 30-year fixed-rate mortgage dropped to 4.74% in June. That historically low rate should pique your interest if you have a mortgage or are thinking about buying a home.
What is a Mortgage Refinance?
Refinancing is when you take out a new loan in order to pay off an existing loan balance. You basically swap out a higher-interest loan for a lower-interest one, which decreases the amount of interest you have to pay. That sounds easy enough, but of course, there’s a cost for doing a refinance. It seems like it takes a village to close a loan and everyone gets their cut. Fees go to the lender or mortgage broker, the property appraiser, the closing agent or attorney, the surveyor, the local government, and maybe more people, depending on where you live.
How to Qualify for a Mortgage Refinance
Each lender has different requirements for doing a refinance. Most will require that you have a certain percentage of equity in your property—typically 20%. Equity is the difference between what your home is worth and what you owe on it. For example, if your home is valued at $225,000 and you have a $200,000 mortgage, you have $25,000 in equity, which is 11% of the value.
Use the Home Affordable Refinance Program (HARP)
However, there’s help if you have too little equity or if you owe more than your home is worth. You may be eligible for the Home Affordable Refinance Program (HARP) if you meet some basic requirements:
1. Your mortgage is owned or guaranteed by Fannie Mae or Freddie Mac 2. You’re current on your payments 3. Your mortgage balance doesn’t exceed 125% of your home’s value
Visit makinghomeaffordable.gov for full details and contact your lender about refinancing under this federal program.
How to Know If You Should Refinance
The trick to knowing if you should refinance is to find out from the lender exactly how much a refinance will cost and how long it’ll take you to break even on those costs. In other words, when do you move from being in the red to being in the black on the deal? If you pay for a refinance, but don’t keep the home long enough to cover the costs, you’ll lose money. But if you do keep the property beyond the financial break-even point (BEP), you’ll feel like a genius because you’ll save money in the long run! I’ll give you an example in a moment.
How to Figure a Refinance Break-Even Point
So how do you figure the financial break-even point on a refinance? It can be a little complicated, but don’t worry, there’s a great refinance calculator at dinkytown.com that can help you. Online calculators are not perfect; however, using a refinance calculator will show you how long you’d need to keep the property to recapture all your upfront closing costs, which is usually what most people want to know.
Example of How Much a Refinance Can Save You
Here’s an example of how much doing a refinance could save you. Let’s say you bought a home in June of 2007 when the going rate for a 30-year fixed rate mortgage was 6.5%. Here are the loan details:
Home cost: $225,000 Down payment: $ 25,000 Mortgage: $200,000
Now that you’ve been making payments for three years, your loan balance has decreased to approximately $193,000 and the prevailing mortgage rate has dropped to 4.74%. Let’s say the total closing costs for doing a refinance would be $5,000 and you have the cash to pay them up front:
SCENARIO #1 Mortgage balance: $193,000 Interest rate: 4.74% Term: 30-year fixed rate New Monthly payment: $1,005 (principal and interest only)
Here’s another scenario where you don’t have the cash to pay the refinance closing costs upfront and you roll them into the new loan:
If you rolled the closing costs into the new loan (scenario #2), your savings would be $233 ($1,264 – $1,031) per month, or $2,796 per year. So if you kept the home for two years, you would recoup a savings of $5,592, which is more than enough to offset what the refinance cost you ($5,000).
Or if you were able to pay the closing costs upfront (scenario #1), your savings would be $259 ($1,264 – $1,005) per month, or $3,108 per year, and keeping the property for just a year and a half would allow you to break even on the $5,000 closing costs.
Carefully Weigh Refinance Costs Against Savings
When the interest rate you’re paying is at least 1% higher than the current rate for your type of mortgage and you plan on keeping your home for a few years, it’s time to run the numbers. As I mentioned, it’s as simple as entering some information into an online refinance calculator. Be sure to carefully weigh all the costs of doing a refinance against the savings you expect to receive. A refinance can save you many thousands of dollars in interest over the life of a loan—and that’s money you could save for your emergency fund or invest for your retirement instead.
Hey Dinks! Got another book giveaway for you. We haven’t read it ourselves yet, but we’ll share part of the press release down below so you can get a feel for what you’d be in store for. And we’re giving out THREE of these! Scroll down to see how to enter…
From their press release: In The Fearful Rise of Markets, Authers addresses the risks of a developing “New Bubble,” and provides insights and solutions for the financial markets for 2010 and beyond. Authers also illuminates the multiple roots of the repeated financial crises of the past two decades, including massive shifts in the global balance of economic power; the shift of key decisions from banks to capital markets funded with “other people’s money”; the wholesale financialization of key asset classes that were once closed to most investors; and massive failures of both academic theory and government policy.
John Authers provides both concerned readers and policymakers alike with answers on why financial market bubbles occur more frequently, why this could be happening again right now, and what to do about it. Readers will find in The Fearful Rise of Markets:
An exploration into the inner workings of today’s highly unstable, crisis-prone financial system with an eye to the future potential problems
Prescriptions for reforming global finance – and sound advice for individual
investors in the meantime
A global view with comprehensive context: how we got here, and why we’re still at risk.
In The Fearful Rise of Markets readers will gain the historic perspective of the current financial crisis on a global level that is needed if we are to work out how to prevent a future crisis.
Want a free copy?
Drop a comment with your own theory as to why we had this recent meltdown, and you’ll be entered to win! We’ll pick the 3 winners this Friday night (July 2nd) @ 10pm via Random.org. Good luck!
One thing I have noticed about successful people, or just people who have their finances in order, is that they usually have great time management skills. They know how to prioritize and get things done that need to get done. They also do whatever they can to avoid “wasted” time.
