How to Save Money On Insurance

Finding ways to save money each month doesn’t have to be difficult, especially when you try to save money on insurance! If you are an adult and drive a car, rent a house, or own a home, you know all about having to pay for insurance every month. But that doesn’t mean you always have to pay full price. 

No matter what you need insurance for, there are ways for you to find lower payments and save a lot of cash! Here are some great tips on how to save money on insurance. 

A Good History

Having a good history can mean a lot of things. It could mean having a solid driving history, it could mean being on time with your home owner’s insurance, it could even mean having a good credit score. All of these things can influence how much you pay or save on your insurance. 

So whether you’re looking to find the best home insurance for a veteran, or the cheapest car insurance for males under 25, you definitely need a good history. Find ways to improve your credit score, maintain a good driving record, and pay all of your insurance on time. That way you can save more money in the long run! 

Not only that, but if you have a good history with your insurance provider, you can also save money. This can mean not having multiple claims filed each year, or even having some sort of long term loyalty. It never hurts to ask about your history with your provider to see if you can save money. 

Discounted Monthly Rates

The amount of discounted rates out there is actually quite staggering. Most people don’t realize they can simply ask for discounts in order to save money on insurance. Though you can’t demand a lower monthly rate, there are definitely things you may not have thought about that could get you a discount. 

Here are a few reasons why you can find discounted rates:

  • You are a senior citizen
  • Active military status
  • Veteran for the Military
  • Customer Loyalty programs
  • Company and Employer Programs
  • Government employee
  • Family bundle discounts

Of course, these aren’t the only reasons why you could get a discount on your insurance costs. Be certain to check with your insurance provider for loyalty programs and all of the discounts that are available to you and your family. 

You Can Shop for Insurance

Just like you can shop for a new coat, or look at multiple dealerships for a car, you can definitely shop around for insurance. You don’t necessarily have to go with the insurance your company provides, or the one that was the easiest to set up online.

You can use insurance calculators to find the best rates for you and your loved ones. Compare prices, find a provider that will give you the coverage you need for a price you can afford, and you’re on your way to getting amazing coverage and being able to save money on insurance every month. 

Save Money On Insurance and Still Be Covered

One thing that most people fear when trying to save money on insurance is losing valuable coverage. Don’t fret. If an insurance company can give you a discounted rate for the same coverage, you aren’t loosing your safety net for your home or car! You are still getting amazing insurance, but you just get to save a few bucks along the way. 

When it comes to being able to save money on insurance, there are lots of steps you can take to lower your monthly payment. Whether you shop around, find discounted rates for services you already have, or simply have an amazing credit history, you can find a rate that works for your budget. 


7 Tips for Saving Money on Big Purchases

When it comes to saving money on big purchases, there is a lot of misinformation out there. However, there are ways to cut costs on big ticket items that are easy to understand. Here are some tips for saving money on big purchases that will help you get the most out of your buying experience. 

Do Your Research

One of the most important factors about saving money on big purchases is to be well-informed. You can’t just walk into a car dealership and say “eh… what have you got?”. You definitely need to come prepared. 

Here are a few things you should look into before you even leave your house: 

  • Your budget
  • Possible costs of your big item
  • Brands, Companies, and Dealerships with a good reputation
  • Seek expert advice
  • Monthly/yearly fees and taxes
  • Insurance needed

The more you know about your big purchase, the more money you can save. So whether you have to earn about how to do a VIN check to find insurance rates for a car, or the price history on a house you love, you need to know everything you can!

Shop Around

Though some places are going to be better than others for large money items, it’s best to shop around. If you’re looking for a car, go to more than one dealership. If you’re shopping for a home, talk to more than one realtor. Just because it’s the first place you go to, or the best place you’ve heard about, doesn’t mean they will have the best price. 

Haggle Your Price

Saving money on big purchases means knowing how low you can go. When you did your research for your big ticket item, you probably saw a wide range of prices. This information gives you an advantage for haggling. 

Cars, Homes, Motorcycles, and even cheap auto insurance and home insurance can be negotiated. Whether you call in a discount, or simply know market values, almost any price can be lowered. Even the smallest percentage helps when saving money on big purchases. 

Discounts and Lowered Prices Where You Can

You would be surprised at all the discounts available for bigger items. Let’s say you are looking to buy a house. You can get discounts and lowered rates on inspections, repairs, even the overall cost of your home. 

Though it may not be called a “Discount” everywhere you go, you can always find money saving phrases for big ticket items. Look into things like short sales and foreclosures, as well as dealerships looking to get rid of last year’s products. 

Bigger Down Payment

Paying more up front can actually help you in saving money on big purchases. If you agree to make payments over time, a big down payment will lower the percentage of money you pay each month. Not to mention lower the overall interest earned for the item. This is called a lower loan-to-value ratio, and makes borrowers more willing to work with you. 

So whether you are paying for your home, or a new car, if you can afford a larger down payment, definitely do it! 

Larger Payments Over Time

If you took out a loan to pay for your big ticket item, you need to pay more each month if you can afford it. If you take out a loan for $200,000 for a home, you may actually end up paying closer to 220,000 over time. The larger payments you make now, the less interest is accrued. 

Lower Interest Rates and Fees

You can always negotiate fees and rates for things like insurance and mortgage payments. Not to mention insurance rates for your car or home. Don’t be afraid to ask about discounts in order to save more money in the long run! 

Saving Money On Big Purchases is Easy

Following these seven tips can help you easily save money on big purchases. Don’t be afraid to haggle, or make a bigger down payment. You have done your research, and you’re ready to make this purchase with confidence if you follow these simple steps! 


The True Cost of Living Alone

The cost of living alone can sometimes be daunting. Especially when it comes to the big picture of your finances. There are lots of ways that the little things can add up, but that doesn’t mean it can’t be done. In order to understand the true cost of living alone, let’s breakdown some of the biggest financial burdens of being single. That way, you can handle them like a pro.


Vehicles and vehicle maintenance are a huge undertaking for one person. From monthly payments, to oil changes, having a car can cost a lot. However, that doesn’t mean you can’t be smart about your car expenses alone.

For example, if you don’t make a lot, you probably won’t be investing in a big fancy car. Sure, you can search “Are Ford 150’s expensive to insure?” Or look into nice vehicles, but you shouldn’t go out of the way to have an over the top car. That is, unless you can budget for one, or you make enough money to finance it alone.

Insurance, yearly maintenance, and fuel also make up the majority of your car costs. And unless you’re a millionaire, unlike most of us, this can be a huge undertaking for one person. Be certain to budget out your daily, monthly and yearly car expenses so you can understand the cost of living alone and having a car.

Rent and Mortgages and House Issues

Let’s face it, rent and mortgage payments are astronomical in today’s market. One of the biggest expenses you will pay for is your home. That being said, it is important that you truly grasp how much it costs to live alone in a house or apartment.

Here are just a few things you will have to pay for, apart from your monthly rent/mortgage:

  • Water and Sewage
  • Electricity
  • Gas or Oil
  • Trash
  • Appliance Repairs
  • Insurance
  • Home repairs
  • Internet
  • Phone

When it comes to paying for your home, one of the true costs of living alone is that you will have to pay for all of these things on one income. Not to mention taxes if you own the property. All things considered, your independence is truly the most important thing. But just like buying no-fault insurance for your car, or making a good budget, you need to be honestly prepared.

Food and Fun

Now, living alone can have a lot of pros. You can do what you want when you want, decorate your house however you’d like, and have all the freedoms and comforts you would like. But when it comes to eating good food and having fun, those activities can actually cost a lot.

Food and entertainment can be quite a big expenditure, but when you budget, you can definitely make it work. Be certain to plan groceries for the week, as well as for food out at restaurants. That way you get food and fun all in one go.

Medical Emergencies

A huge cost of living alone is having to deal with medical emergencies on your own. Paying for ambulance rides, hospital visits, and even everyday, run-of-the-mill doctor’s appointments can really add up. Some of the true costs of living alone aren’t things you can plan for in a budget. Be certain to set aside money just in case of health emergencies.

The True Cost of Living Alone Doesn’t Have to Be Too Much

The true cost of living alone doesn’t have to be more than you can afford. There are a lot of wonderful things about being on your own, especially when you understand all of the financial responsibilities. Having a great budget for food, living arrangements, cars, and even the unplanned can be a huge help to relieving your money stressors. Get out there, and do it all on your own.


The Best Ways to Save Money Every Month

Let’s face it, sometimes it is really hard to save money every month. Not only do you have bills to pay and groceries to get, but there are also those pesky unforeseen issues. We have put together a few tips on the best ways to save money every month. To help you avoid missing a mortgage payment, or missing a bill, and find yourself actually SAVING money.

Discounts on Everything

You would be surprised to find that there are ways to save money every month on almost everything in your home. From grocery coupons to month-to-month car insurance, you can find ways to cut corners and get discounts.

First things first, you can find great discounts and savings with your grocery bill. As prices rise, it is harder and harder to save money on food. Most big chain stores now offer apps that will help you take advantage of digital coupons. Not to mention sending you coupons every other week. You can also make a solid weekly menu for your meals so that you aren’t buying unnecessary things at the grocery store.

Finding ways to cut back on monthly bills is easy as well. You can not only watch how much water you use, but you can make sure to turn off each light when you leave a room. This will lower your electric bill and your water bills significantly.

Last, but not least, it never hurts to ask about discounted rates for EVERYTHING. Are you a veteran? Ask for a military discount. Are you a senior? Ask about a senior’s discount. You would be surprised to find that a lot of places you never thought to offer discounted rates will say yes and ring up ten percent-off.

Budget Each Month

One of the best ways to save money every month is to create a budget for yourself and your family members. Your budget should not only include things like your bills, but also all the ways you spend money during the month.

In order to help you get a good idea, here are a few things you NEED to have in your budget:

  • Mortgage/Rent
  • Food
  • Monthly Bills
  • Clothing Allowance
  • Household Necessities (cleaning supplies, toilet paper, etc)
  • Pet Needs
  • One or Two FUN Things
  • Emergency Fund

There are, of course, other things you may need to put on your budget. Your budget is personal to your family needs and how much you make as a household.

The ultimate goal for your budget should be to put away at least 20% of your income into savings. This will help you build wealth and keep six to eight months of emergency funds in your savings at all times.

Avoid Unnecessary Spending

Avoid unnecessary spending if you can. No, this doesn’t mean to not go get your latte every morning if that makes you happy. Especially if you have budgeted for it. Unnecessary spending is more along the lines of big ticket items.

So instead of trying to buy a new smart car and wondering “Do smart cars cost more to insure?“, you should be avoiding buying things you don’t need. Do you need a new bike? Is there really a need for a bigger TV in the house? Those kind of spending habits need to be knocked out, ASAP.

Payments and Fees

A big way to save money that most people don’t consider is avoiding overpayments and fees. For instance, there are lots of fees in selling a house. Not to mention bank fees and hidden taxes. Even your trash payments and energy bills can have hidden fees. If you can find those hidden fees, you can save a lot of money. Simply call your bank, or service provider, and you can actually negotiate those charges. If not, learn how to avoid them all together!

Save Money Every Month with These Tips

Though it may feel daunting at times, you can really easily save money every month with these simple tips. From working out a solid budget, to taking out those sneaky hidden fees, you can find ways to cut corners and start saving now.


Find Your New Financial Normal

Make a few adjustments, and create a new financial normal.

Make a few adjustments, and create a new financial normal.

One thing I’ve noticed over time is that humans are very adaptable creatures.  We conform to our surroundings and can make almost any environment feel routine to us after a while.  Animals do this, as cold weather creatures develop features that can increase survival in even the most harsh of environments.

Call it evolution, adaptation or just the way God made us.  The fact is that we can adapt to most situations and environments given enough time and motivation.  Knowing this, we should theoretically be able to improve our financial situation by changing our environment.

We can get by on less

I was accepted into optometry school fairly late into the process, so I had to scramble to find an apartment near the school.  I asked a couple of people I knew if they needed roommates.  No one did.  I started looking for one bedroom apartments in the area but they were way out of my student salary (aka no money).  I was at a loss.

But then I had an idea.  I called back one of my classmates and asked if I could stay in their living room.  He wasn’t planning on bringing any furniture in the living room and neither was his roommate, so he said that would work.  I just got an air mattress and set up shop.  So I had a place to eat and sleep and paid very little rent since we split it 3 ways (I got to pay even less since I didn’t have my own room).

It was tough the first few days.  One bathroom for three guys.  Not much privacy being in the wide open living room.  Not an ideal living situation.

But I made some adjustments to make things easier.  I spent most of my time studying in the library.  Since studying is what I did almost all the time anyway, I just brought some food from home and ate during study breaks.  It became very doable and I made a couple of good friends in the process.  All for hundreds of dollars less per month than if I got my own apartment.

What this experience showed me is that you can get by on less, even if you don’t think you can.  Sometimes we are forced to get by on less because of a job loss or illness.  Those aren’t fun times.  The time to experiment is while you’re healthy and making money.

Cut your cable and see how things go.  Look at some smaller fuel efficient cars when it’s time for a new one.  Try to eat out a little less every week.  Doing things like this will create a new baseline of spending and you may not even notice the difference after a while.

And if you do start feeling the pinch, then you know that particular thing is something you value and can’t live without.  Simply go back to it and try to cut something else.  Not much to lose there.  This process will save you some money for sure but will also simplify your life just a little more.

Create a New Normal

Cutting expenses is all well and good, but how can we use our adaptability to actually save money and supercharge our finances?

The most recent numbers put the US personal savings rate at 5.2%.  The savings rate for the Millennial generation is actually negative!  These are abysmal numbers and unless the average American is making millions of dollars a year, a 5% savings rate is just not going to cut it!  Your working career could end prematurely because of health issues or job loss, so making sure you have enough savings (and insurance) is key.

So what’s the answer?  Move to a cheaper area?  Cut your cable?  Stop drinking lattes?  All of these are viable solutions to keep more of your money, but probably are not the answer for most people.  The answer?

Create a new normal.

If you’ve only been saving 3% of your salary into your 401(k), log into your account and increase it to 6% and try to live on your new slightly less monthly earnings.  You will make less money than before obviously, but through our awesome ability of adaptation, you will most likely get used to it after a few weeks.

You just doubled your savings rate.

After a while, consider increasing your 401(k) deferral again, especially if you get a raise.  You might find increasing it too much is making things a little tight.

That’s okay.  You can back it down a little bit and increase it later when you’re ready.  More than likely you will end up at a much higher savings rate than you started with.

You can apply this to any almost any financial goal.  Want to pay off your student loans quicker?  Increase your payment to principal by $200 every month and see if you can handle it.  Want a larger emergency fund?  Try to set an automatic contribution to take $100 out of your checking account.

After getting used to your new financial reality, you can try to see if you can save some more.  Make it into a game.  And just like a game, you can push reset if things don’t seem to be going so well.

Most of us underestimate our ability to adapt to new and possibly harsh situations.  Try to create a new financial normal for yourself by cutting a service you don’t need or increasing your savings rate.  You’ll be surprised at how easily you can adapt.


Where to Stick Your Bonus Paycheck


What if I told you that if you’re an employee, you most likely get a bonus twice a year?

What if I told you that you get this bonus without doing any extra work?

And what if I told you, that you can use this bonus to take a nice bite out of any debt you may have or just give a little extra padding to your savings?

You would think that I’m crazy to promise such a thing, but all you have to do is look at the calendar.

There are 52 weeks in the year, which means that people who get paid bi weekly will receive 26 checks throughout the year. But if you divide 26 checks by 12 months, you get 2.167, not 2.

So what this all means is that during 10 months of the year, you get paid twice.  But during the other two months, you get paid thrice!  That’s right, you get an extra paycheck twice a year.

Why is this important?

MINDSET.  When determining their budget or deciding to see if they can afford a service, most people assume they get paid twice a month and calculate from there.  This is just how people are wired nowadays.  This can be a good thing or bad thing depending on how it’s used.

But the purpose of this post is not to discuss the pros and cons of being in a monthly payment mindset.  The point is that if you are in that mindset, you get an extra paycheck twice a year without fail.  But the important thing is to actively decide to DO something with that extra money.

The worst possible thing you can do with that extra paycheck is to just let it sit in your checking account and have absolutely no plan on how to use it.  I’m assuming this is what most people do, because most people have very little awareness of their money is going.

If you just let it sit in your checking account, it will most likely get spent on something you don’t need.  Best case scenario, the money just sits there and doesn’t do anything to further your financial well being.

So what SHOULD you do with this money?  This is something to really think about because this can potentially be a life changing decision.

Here is a little cheat sheet to get you started.  Everyone has different goals and life situations so this may not apply to you word for word, but I feel this is a good way to figure out where to put that extra money:

1.  Pay off family and friends.  Owing people money feels really bad.  But owing family or friends money should feel even worse.  If you borrowed money from a family member and there was no mention of you paying it back, pay them back anyway.  Resentment can build if these debts linger for too long.  These relationships are too valuable to lose and can be difficult to repair.  Use that extra paycheck and take care of that debt once and for all.

2.  Pay off any high interest debt.  No matter what your goals are, keeping around any high interest debt will ensure that you reach those goals as slowly as possible.  Some people don’t feel comfortable with having any debt at all, but I’m okay with having some lower interest debts that don’t stretch you financially.

I classify “high interest debt” as anything with an interest rate above 6%.  So this definitely includes credit card debt and any other type of consumer debt.  It can also include auto loans and student loans depending on your situation.  Make sure the payment goes entirely towards the principal amount.  I’ve dealt with sneaky companies that will apply the payment towards any interest owed first, which does nothing in paying off the balance.

3.  Pad your emergency fund.  I firmly believe that having a healthy emergency fund will help you avoid almost any financial catastrophe.  Some recommend having 3 months of expenses, while others recommend having up to a year’s worth of expenses.  Everyone has different life circumstances and dispositions, but if your emergency fund is not where you would like it to be, just stick your bonus paycheck in your savings account.

While savings accounts don’t generate a whole lot of income, that’s not their purpose anyway.  That money is there in case of an unexpected expense that you can’t cover with your normal cash flow.  Keeping your emergency fund healthy is as important a financial goal as any other.

4.  Increase retirement contributions.  If you don’t have any financial “fires” to put out, it’s time to focus on retirement savings.  Retirement can seem worlds away for most young professionals and millennials, but it is imperative to keep contributing to your retirement accounts because you have time on your side.

Time allows your retirement accounts to grow exponentially, and contributing consistently early on in your career will help provide the foundation for massive growth.  So when you get that extra paycheck, consider increasing your 401(k) contribution or just transfer the money right away to an IRA or brokerage account.  Needless to say, your future self will thank you.

5.  Invest in yourself.  Making an investment in yourself can mean many things.  It could mean taking time out of your day to read or practice a skill.  It could mean networking with influential people in your field.  It can also mean spending some money to buy a product or education that will increase your long term earnings.

Daily improvement should be a a constant goal for everybody, but if that nice little bonus check can cover the cost of tuition or help you buy a product or service that will make you lots of money potentially, then that’s where the money should go.  This is where creativity and consistent hard work come into play in determining how lucrative this investment could be for you.

There aren’t many times you can get “free” money.  But during 2 months out of the year, you can get pretty close by getting an extra bi weekly paycheck.  As with any type of new earnings, try to stretch those dollars are far as they can go in meeting your financial goals.


Bike Your Way to Freedom!

Hello everyone.  Anum of Current on Currency was kind enough to help me out with a guest post as I get my posting schedule back on track.  It’s been a crazy few weeks with job and life changes abound, but I’m getting back on the blogging grind.  Enjoy this informative post by Anum!

How to Improve Your Health, Wealth and Standard of Living

If you could do just one thing today to improve your quality of life, what change would you make? A new diet, perhaps? Take up meditation? Maybe double the amount you’re setting aside in your IRA for retirement?

While each of these is admirable, they only address one aspect of your overall wellbeing. Luckily, there’s something you can do to be healthier, wealthier and raise your overall standard of living in one fell swoop.

You need to bike to work.

If you require some inspiration to make this leap, check out some of the ways that becoming a bicycle commuter can change your life for the better:

Cycling to Work Lets You Skip the Gym Fees

Riding a bike provides the same important cardiovascular benefits traditional gym activities like jogging and swimming do. Instead of hitting the boring treadmill, you can kill your workout and your commute at the same time, giving you more time and money to spend on something else.

Avoiding Traffic Jams Means Less Stress in Your Life

The average American spends 42 hours a year sitting in traffic on their way to work. In addition to wasting your time, commuting can be a major daily stressor. Embrace the calm, quiet trip on your bicycle, though, and you might actually get to work faster than you would have in your car. Even if it takes a little longer, you’ll be more relaxed when you get there.

Cycling Is Much Cheaper Than Driving

Fuel costs, maintenance hassles and insurance requirements all make owning a car incredibly expensive. Every time you bike to a nearby event or store to run an errand, you cut down on the amount you need to spend on your vehicle. Even just cycling on the weekends will have a positive impact on your budget while keeping your annual mileage low.

Bike Sharing Programs Let You Test-Drive Your Commute

If you’re one of those people with a garage full of athletic equipment from past sporting endeavors that you’ve since given up on, no worries. Many cities have bike-sharing programs that allow you to rent a bike to get from one end of town to the other. Take advantage and do a test month on two wheels to see if you like cycling to work — no commitment required.

Biking Beats the Bus Any Day

In addition to helping you burn extra calories, cycling in the fresh air makes you less likely to get sick than taking shared public transportation. Taking the bus is particularly infectious: There are elevated levels of bacteria on public buses, increasing the odds that you’ll get sick. Bacteria on your bike? Practically non-existent.

Cycling Leads to Reduced Healthcare Costs

Because all the exercise from biking is so much healthier than spending hours sitting still in a car, countries with widespread cycling commuting save big bucks on healthcare costs. In bike-friendly Copenhagen, Denmark, healthcare costs are expected to fall by a whopping $60 million thanks to cycling.

Supporting Cycling Helps Build Economies

Cities that have a high percentage of bicycles on the road see money stay in the local economy. In Portland, for example, where 20 percent fewer people drive than other cities, $800 million stays in the local economy. It’s also a whole lot cheaper for cities to invest in bike lanes than in new highways: an urban freeway costs $60 million per mile, while bike lanes top out at just $250,000 per mile.

biking infographic

Whether you take up cycling for your health, your wealth or to do your part to boost the local economy and protect the environment, commuting by bike will make a big impact on the world around you. It’s okay to start with small local trips to build up your skills and your stamina. Soon you’ll want to bike everywhere, and the benefits of cycling will multiply the more you do it. Go ahead and give it a try!

Anum Yoon started and maintains her personal finance blog, Current on Currency. Sign up for her weekly newsletter to read about her financial journey and perspectives on money management, frugal living, and financial trends.


Death by a Thousand Swipes


Surprised it’s not made in China.

Humans are incredibly adaptable creatures, especially when it comes to money.  If we only have a little bit, we can make do and find ways to survive.  The median household income in the United States is about $51,000.  For those in the upper class, it is almost unimaginable to be able to live on that type of income.  But it is being done by thousands of families all over the country, even if they may be living on the edge financially (paycheck to paycheck).

On the other end of the spectrum, you have athletes and celebrities who make millions upon millions of dollars and still manage to lose it all when the money stops rolling in.  While most people won’t weep at someone who blew millions of dollars, they can have the same condition as a family living on median household income: putting themselves on the financial edge by living a paycheck to paycheck lifestyle.

 Self Inflicted Wounds

So what does death by a thousand swipes have to do with anything?  Death by a thousand cuts refers to a particularly gruesome form of capital punishment practiced in ancient China.  The convicted criminal would be tied to a wooden stake and would have numerous small cuts inflicted upon them until they died.  It was a form of torture/execution that was eventually banned.

Death by a thousand swipes then is when someone slowly and methodically destroys their finances by making many little purchases that add up to their financial demise.  Making one or two purchases doesn’t result in anything serious, but they build up and can eventually kill your financial life.

(Tangent:  With all this new financial technology coming out, what if there was an app that would shock a person every time they swiped their credit card?  I think a cut for each swipe may be a little too much.  But that would definitely keep people from overspending!)

While not as sadistic as the literal from of torture, death by a thousand swipes is equally deadly on your finances.  And it can afflict everybody from the average family of four to the million dollar athlete (Vin Baker for instance).  It can be something as simple as eating out way too much or having one too many Ferraris in the driveway.

The Cure

Financial death by a thousand swipes has a pretty easy fix.  It’s a 2 step process that sounds easy but takes discipline and some life hacking to pull off.

First step is to let the cuts you already have heal up.  This means that you acknowledge that you made some possibly dumb purchases, but you’re not going to make them anymore.  And you might have to trick yourself into doing this.  If your major vice is grabbing coffee twice a day from the local coffee shop on your way to work, take a different route to work.  Overspending is literally an addiction, and after a few days of withdrawal, you should be able to control it.  Whatever it takes to keep you from making those unnecessary purchases and dying a slow and painful financial death.

After you wean yourself off of the mindless spending, the second step is easy.  And that is to pay yourself first and always.  Notice I didn’t say start a budget.  I have nothing against starting a budget, but if you automatically skim 10% of your take home pay off the top and put it in a savings or money market account, budgeting doesn’t become a big deal.  And since you hopefully ended your spending addiction in step 1, there is little chance you will spend more than you need to.

With these two steps, conquering the sources of your unnecessary spending and paying yourself off the top, you can dig yourself out of the paycheck to paycheck lifestyle in no time.  This will open up opportunities to do things that can super charge your journey to financial independence such as paying off debt quickly or increasing your investment contributions.


When a Sale Really Isn’t a Sale

What the recent Amazon sale felt like.

What the recent Amazon sale felt like.

Amazon recently had a “flash” sale on July 15 only for its Prime Members (which is pretty much everybody because who wants to wait more than two days for shipping?).  The company and other news outlets were hyping it up a few weeks before, saying this would be the biggest sale that Amazon users have ever seen etc etc.

I was actually thoroughly excited about it because I’ve had a great experience using Amazon over the years.  For example, my awesome new laptop I currently use was bought from Amazon.  I was originally going to buy it directly from the manufacturer as they had some type of sale going on.  I put in all of my custom specs and was excited to finally buy it, but a thought occurred to me to check if there is anything comparable on Amazon.  Lo and behold, the same model with better specs was available for $200 less than I was about to pay.

I would consider that a steal, but this most recent sale by Amazon, not so much.

If you don’t need it, it’s not a deal

When the big day came, I excitedly clicked on Chrome and typed my way right to Amazon.  As expected, the website was full of fanfare and can’t miss deal banners.  But after browsing for a few minutes, I came to realize that all the excitement was for nothing.

Nothing practical was for sale.  We get baby stuff and some household things from Amazon once in a while, and I was expecting to see some decent deals on this stuff but was sorely disappointed.  Most of the sales were for electronics and “services”, which I didn’t even know Amazon had.  Did you know you can order housecleaning services from Amazon?  It is definitely more expensive than finding a housekeeper on your own, but if you can just click and maids magically appear, then why the heck not?

There was even a Kindle on sale for a higher price than when I got it a few months ago!  Not much of a sale after all.  While I was ready and willing to spend some money on things that I needed or even wanted, I didn’t end up buying anything.  And it seemed that only things nobody really needs were the featured items.

Don’t give in to the hype

One thing I’m slowly learning over the years is that despite what the salesman says, this is not the last time a product (car, phone, furniture etc) is going on sale.  This is a classic line that retailers will tell you, increasing the pressure on you to buy now because you may never get a chance later.  This is a bunch of bologna because everything goes on sale again at some point.  Retailers are very good at making us feel that we have a limited time to make a purchase, but if you’re willing to walk away and wait, you will be able to find the same deal, or something even better, later on.

As the recent Amazon “sale” showed, don’t be swayed by pre-sale marketing.  And if you don’t see anything you really need or like, it’s okay to just walk away.


How Your Credit Score Can Affect Auto Insurance Rates


Save 15% or more with a great credit score

There are all sorts of myths and ideas out there about what exactly affects car insurance rates.  There are the obvious things like income, history of speeding tickets and how long you have been driving.  There are also those seemingly unrelated things like the color of your car, where you went to college and who your favorite sports team is.  I made that last one up but I could see how being a New York Knicks fan could make me an angry and distracted driver.

Because state insurance laws vary and insurance companies don’t really reveal how they come up with rates, it’s hard to find out what exactly matters.  But there is one factor that plays a role in how much you will pay for auto insurance, and that is your credit history.  Yes, your auto insurance company cares if you pay your credit card bills on time.

“Credit Based Insurance Score”

According to the National Association of Insurance Commissioners, auto insurance companies use a something called a credit based insurance score as a factor in deciding how much to charge an individual for car insurance.  Because insurance companies are run by vampires who hide in the shadows, it is not known what exactly goes into this score and how much it can affect your insurance rate, but it is safe to assume that your FICO credit score is a big factor.

Now what in the world does your credit score have to do with driving a car?  One can only guess as to why exactly insurance companies value your credit score, but any factor that affects insurance rates usually comes down to one thing: money.  As in the insurance company wants to make as much money as possible while giving you as little as possible.  If you look at it from the insurance companies perspective, a perfect customer is one who pays their bill on time every month and never files a claim.  You could then come to the conclusion that someone who has poor credit is not “responsible” so they will be late on paying their bills and likely be a reckless driver.  It sounds a little far fetched, but insurance companies do lots and lots of research and it’s reasonable to think they have found some research that shows drivers with poor credit make more claims than those with good credit.

Is it unfair?

Some argue that taking into account someone’s credit score to determine auto insurance rates is unfair.  I agree somewhat, because there are many reasons that someone could have poor credit that have nothing to do with irresponsibility or recklessness.  People with egregious medical bills that have no way to pay them are just one example.  Another example is someone who has been a victim of fraud and has had their credit dinged in the process.

Immigrants are also affected unfairly by this.  They usually have little to no credit history when entering the country, so even if they are the most responsible person in the universe, having insufficient credit history can affect them.  Indeed, there are some states (Massachusetts, Hawaii and California) that have banned auto insurance companies from using a credit based insurance score.  So there is some sentiment out there which feels this is an unfair practice, but most states do allow it so I don’t see it going away anytime soon.

Bottom line

If you live in a state which allows this practice, you need to make sure your credit score is pristine.  There are many many reasons to have a great credit score, and this is just one more reason to add to the list.  Having a good credit score gives you a chance to have lower auto insurance rates, an expense every driver will have for the rest of their lives.  Even a savings of $10 a month can have a profound effect on how much you spend on auto insurance over a lifetime.  So do what you can to keep that credit score high because it can help you in more ways than one.