Saturday, April 16, 2011
- Consider consolidation. Some insurance companies offer substantial discounts for insuring both your home and car. See if yours is one.
- Raise your deductibles. The easiest and fastest way to lower insurance bills is to raise deductibles. Going from a $250 to a $1,000 deductible can reduce your home or car coverage cost by 20%, and only takes about three minutes.
- Don’t buy credit life. These are gimmick policies that are basically life insurance that’s tied to specific debts, like a credit card or mortgage. Regular term life insurance is a much less expensive alternative.
- Don’t buy whole life insurance. Whole life, or permanent life insurance, combines a life insurance policy with an investment account. Unless you’re rich and need a permanent policy to help pay estate taxes, it’s generally a better idea to buy cheaper term coverage and do your own investing separately.
- Don’t insure your child’s life. The purpose of life insurance is to replace the earnings of a key breadwinner in the event of untimely death. While the death of a child is certainly a tragedy, it’s rarely a financial calamity. There are better investments you can make for a child.
- Shop your coverage. Whatever type of insurance you have, you should shop it every six months. This is a competitive business, and getting more so all the time. So pull out those policies and make sure you’re getting the best deal!
- Cancel your car coverage! This may seem like a strange idea, but if the cost of your annual comprehensive/collision coverage is more than 10% of the value of your car, you could consider dropping it. (Obviously you should never under any circumstances drive without liability!) For example, if you’re paying $500 in comp/collision premiums to cover a car that’s only worth $5,000, you’re at the 10% threshold. If the potential loss of $5,000 worth of car is worth not spending $500 every year, consider dropping the coverage. This is only an option if you don’t have a loan on the car, since lenders require you to maintain full coverage to protect their collateral.
- Flaunt your good driving record. If you’ve had no accidents or tickets during the last three years, make sure your rates reflect that. Most insurance companies don’t automatically lower your premiums when old citations fall away. You have to call and make them reduce your bill.
- Get what’s coming to you! Keep the following list of possible discounts available and ask for them all when you get car insurance quotes (many might be applicable to homeowners as well.) Accident-free, multiple cars, short mileage (usually less than 7,500 miles per year) good student, absent student (if your kid is away at school without their car, they might reduce your family rate), over 50, graduate of defensive driving course, nonsmoker, airbags, antilock brakes, automatic seatbelts and antitheft devices. Any of these possible discounts could save you money. And when you’re done reciting them to the insurance company, be sure and ask, “Did I leave anything out? Do you have any other ways for me to save money?”
- If you’re changing policies, make sure your new one is in effect before you drop your old one. This applies to every kind of coverage: health, life, homeowners and automotive.
- Get rid of PMI ASAP. Private mortgage insurance (PMI) is normally required if you have less than 20% equity in your home. And it can easily cost $50 a month! As soon as you’re sure you’ve got the magic 20%, whether it’s by appreciation or paying off mortgage principal, call your lender and tell them you want out of PMI. Expect them to make you jump through hoops since they make tons of money from this coverage.
- If you’re going to buy travel insurance, make sure you only get coverages you need, like trip cancellation coverage. Policies insuring your luggage are normally so riddled with exceptions that they’re virtually useless.
- Don’t buy specialty insurance, like cancer coverage. Put your money into a good general health insurance policy instead.
- Keep health insurers honest. If you’re like most people, you pay no attention to your health coverage. So when your insurer messes up, which they frequently do, you don’t know it. For example, many policies have a deductible of $200 per person, $400 per family. But are you keeping track of when you reach those magic numbers? Don’t assume your insurance company is. Read and understand your policies and keep your own tally: you may need it for tax purposes anyway.
- Don’t let your doctor cost you money. If your health insurance provider agrees to pay 80% of covered procedures, that generally means they’ll pay 80% of what they think is reasonable for that procedure, not 80% of whatever it costs. So find out what your insurance company is willing to pay and if your doctor can do it for that amount.
- HMOs are normally the cheapest way to get health coverage. In the world of health, choosing your own doctors is an expensive alternative.
Posted by Frugal Sally at 1:36 PM
First Person: How my family saves $4,000 a year in school expenses - Yahoo! News -Yes, even public schools cost you money.
Posted by Frugal Sally at 12:11 AM
Friday, April 15, 2011
Transportation: Repair, Maintenance, etc.
- Always use the lowest octane gas your owner’s manual suggests. While only 15% of cars require premium, 25% of gasoline sold is premium. Why? Probably because some people respond to advertising instead of reading their owner’s manual.
- Keep your car tuned and check your tires. These simple things can easily save you $100/year in gas, not to mention giant increases in your engine and tire life.
- Car pool! Sharing the ride with just one other person will cut your commuting costs in half. You’ll also reduce your stress level by 50%.
- Keep your air and fuel filters clean. Your car will perform better, your mileage will increase and your engine will last longer. Best of all, these items are inexpensive.
- Make it a habit to be a smooth operator. Scan the road ahead and try to anticipate any slowdowns. Try to maintain as constant a speed as possible. That will save gas and make you a safer driver.
- Lighten up. Roof racks hurt mileage by spoiling your aerodynamics. If you don’t use ‘em, lose ‘em. To increase your mileage even more, take the excess weight out of your car.
- Get a good mechanic. The best way to save money on cars is to keep yours as long as possible, and the best way to do that is to have it serviced well and regularly. To find a good mechanic, try calling some classified ads placed by people selling cars similar to yours. They might have a good suggestion. In most cities, you can also check with AAA, even if you’re not a member. At the minimum, find a mechanic that’s certified and experienced with your type of car. Always get estimates in writing before work is done and always get used parts back.
- If they’ll work as well, try used or rebuilt parts. Your mechanic or body shop will know if OEM (Original Equipment Manufacturer) parts are necessary or desirable. If they are, fine. But if they’re not, you can save a bundle.
- Shop rental cars! If you’re going to rent a car, comparison-shop heavily. Prices differ a bunch depending on company, current demand and location. Don’t hesitate to pit companies against each other. And ask as many times as possible about special deals, promotions, coupons, and any source of potential savings such as membership in AARP or AAA. Even while you’re standing at the counter waiting for your reserved car, it’s not too late to ask for a discount or free upgrade. Sometimes a smile and a simple request will do wonders.
- Don’t buy rental car insurance if you can avoid it. These policies rank high among the western world’s great rip-offs. Your regular car insurance or possibly even your gold credit card will often render it unnecessary. Check before you leave home.
- Keep change in your car. How many times have you not fed a parking meter because you couldn’t find any change? Keep some in your car at all times and avoid unnecessary tickets.
- Make travel less taxing. Keep a little notebook in your car so you can record the mileage you log on deductible trips. Trips to the doctor, job-hunting trips, trips for charity: all deductible, which means you could be on the road to lower taxes.
Posted by Frugal Sally at 3:18 AM
Thursday, April 14, 2011
Transportation: Used Cars
- Always buy used. A two-year-old car may have depreciated in price by 50%, but it’s still got 70% of its useful life left. That’s why used cars are nearly always a better deal than new. Plus, the insurance cost is lower.
- Always be pre-approved for a loan before you shop. Like with new-car shopping, you want to have all the loan details worked out before you go shopping. That way when you find what you’re looking for you can pounce before it gets away.
- Do your homework. Check the cost of repairs, maintenance, licensing, fuel and insurance before you decide on a make and model. Then arm yourself with the suggested retail and wholesale prices. You can find them at car websites (see number 26 above), in used car guides at the library or through your credit union or other lender.
- Check with private sellers. Dealers offer the advantage of broader selection and in some situations, warrantees. Private sellers may offer you a better deal, however, and you also get to see who’s been driving the car and how it’s been kept and maintained. But the greatest advantage of private sellers is that you don’t have to feel outclassed sales-wise.
- Make friends with a mechanic or two. Mechanics often hear of people who want out of their car. They cannot only help you find a great car at a great price, but they can sometimes vouch for the condition of the car.
- Don’t think of buying a used car without a thorough inspection. Even if your car of choice was driven only to church on Sundays, have it thoroughly inspected by a qualified mechanic before you think of buying it. This cannot only help you avoid a nightmare, it could also help you negotiate a better price
Posted by Frugal Sally at 4:50 PM
Posted by Frugal Sally at 12:43 AM
Wednesday, April 13, 2011
Budget Friendly Recipes and Low Budget Recipes RecipeLion.com - One of my most favorite sites!!
Posted by Frugal Sally at 7:13 AM
TCN Cooking Classes: An Introduction into Cooking Technique, Frugal Recipes and Food Cost WOW! Lots of great cooking "how to's", tips and recipes!! Love it!
Posted by Frugal Sally at 5:40 AM
Transportation: New Cars
- Avoid new cars. Because cars are made better now than they used to be, buying used isn’t as risky as it used to be. Buying a car even two years old can save you from 25% to 40%. But if you are going to buy new…
- Always negotiate price, never payments. Payments can be manipulated so that practically anything is affordable. Salespeople will always try to get you to talk payments. Good negotiators always talk price: the payments will take care of themselves.
- Choose your make and model carefully. You obviously want to buy a car that’s within your price range, but don’t forget to consider other costs, like insurance, gas mileage, maintenance and repair. These numbers are available in new car guides at your library or online at websites like www.kbb.com and www.edmunds.com.
- Get the dealer’s invoice price before you shop. You can find it at many web sites (like the ones above) or in new-car guides at the library. Your objective is to pay no more than 3% over the invoice amount. Don’t forget to also get the dealers invoice price of the options you want on your car and negotiate those too!
- Just say NO to fees. One of the main ways dealers make money on cars is to pad prices with extra fees like “documentation,” “advertising” and all kinds of others. Eliminate the ones you can, understand the ones you can’t, and check the final contract to make sure that eliminated fees don’t magically reappear.
- Always get pre-approved for a loan before you shop. Even if you end up using dealer financing, it’s important to know how much you can borrow and what the rates will be. That makes you a tougher negotiator. You’ll especially need to know this information in order to choose between a rebate and low-interest financing. There are online calculators that will help you decide between a rebate and low-interest financing (do a web search), but generally, the rebate is the best option.
Posted by Frugal Sally at 5:24 AM
Tuesday, April 12, 2011
- Be a bargainer. When you’re buying something expensive, or buying a service, always bargain on price. It never hurts to ask, and if you’re buying something big, like a TV, a refrigerator or a computer, you might save yourself 10 to 20%.
- Cash is king. Again, if you’re buying something expensive, ask for a discount for using cash. Did you know that when you use a credit card, the merchant has to pay two to four percent to the bank? Therefore, when you pay cash (or write a check) you’re saving them that money. Ask for it!
- Don’t buy extended warrantees. Eighty percent are never used, and they’re a major profit item for the vendor. That’s why they push you so hard to buy them!
- Don’t wait till the last minute to shop. Obviously, less time gives you less flexibility. The seasons, the start of school, birthdays, Christmas: nearly everything we shop for is pretty darn predictable.
- The calendar is your friend. Consider the times of the year that retailers love most: holidays! Halloween, Valentines Day, Christmas and Thanksgiving are all great times to save money… if you’re willing to wait a bit. You’ll often see big pre-holiday sales that happen prior to these holiday times, but those savings pale compared to the discounts you’ll get by waiting until the days after the event. Buy next year’s Halloween costume on November 1, your Christmas decorations on January 1, etc. Want to get even better deals? Try outlet malls.
- Always use a list. And don’t buy anything that isn’t on it. Depending on what you’re shopping for, you can easily save 10 to 15% with this tip alone.
- Don’t shop hungry. If you’re shopping for food, it’ll make you buy more. If you’re shopping for anything else, it’ll make you hurry. Also avoid shopping depressed. Buying stuff you don’t need won’t make you feel better, but if you’re not careful you’ll do it anyway.
- Shop alone. Kids and spouses that act like kids will often whine, cajole or otherwise try to influence you into impulse buys. Leave ‘em at home.
- Keep receipts and send in rebate slips. Very few consumers actually return rebate coupons. Which is, of course, exactly what the manufacturers are hoping for. Don’t be a sap… get what you’ve got coming. Keep your receipts and don’t hesitate to return anything that disappoints you in even the slightest way. Keep in mind that many stores will refund the difference if you find an item cheaper elsewhere after you’ve bought it and most will match competitor’s prices.
- Get 10% to 15% off by opening a department store credit account. Stores often offer you substantial discounts to induce you to sign up for (and get hooked on) their high-interest credit cards. Fine. Take them up on their offer and get your discount. But when the statement comes in, pay the bill in full and cancel the card in writing. Don’t just stop using the card: if you don’t officially cancel the account, it will continue to be reflected on your credit history.
- Don’t pay for extra features that you don’t need. Fancy extras on everything from cars to VCRs are often high-profit-margin items for manufacturers and dealers. Even if it only costs “a little more” why buy things you’ll never use? Fewer gadgets can also mean longer product life with less in repair bills.
- Buy your furniture and appliances pre-scratched. Scratch-and-dent can save you plenty, especially when you bargain down the price even more.
- Open your own temporary store by having a garage/yard sale. You probably have lots of stuff that you don’t want or need, and that’s just money that’s lying around your house. Spend a day going around your home and identifying everything that you haven’t touched in a year. That’s stuff you should probably either sell or donate to charity. If you decide on a yard or garage sale, talk to neighbors first and see if they’ll join you: the more stuff you have and the more people you have, the better off you’ll be. Publicize the sale with signs around the neighborhood (providing they’re legal) and a newspaper ad several days in advance of the sale. List your best items in the ads (e.g., tools and antiques are top draws.) Prepare carefully for the sale. Segregate items by price ($.25 table, $.50 table, etc.) and use colored tags to identify items. Make it simple for shoppers and for you. If you don’t sell everything, that may not be all bad, because in some cases, you might be better donating items to charity anyway. For example, if you’re going to sell a shirt for ten cents, you might be able to donate it to Goodwill and get a $1.00 tax write-off. That could save you more in taxes than you’d have gotten from selling it for cash. When you have a sale, beware of shoplifters. Believe it or not, people will actually steal things that they could buy for a dime!
- Buy at yard and garage sales. This is the smartest shopping you can do, providing you confine your purchases to only what you actually need.
- Share the cost. If you’re going to buy something that is useful to your neighbors and only needed occasionally, start your own “co-op.” Splitting the cost of a ladder, lawn mower, gardening equipment, tools, and many other expensive items will reduce their cost by at least half (depending on how many people are in your co-op) and will barely register on the “inconvenience scale.”
- When clothes shopping, start at home. Many of us go to the store and buy clothes when we already have similar items at home that we’ve forgotten. Do a careful inventory of your clothes before you buy anything, including the ones you have tucked away in the back of your closet or attic. Added bonus: this will also allow you to make money by selling, consigning or donating things you’re not ever going to wear again. Staying in Shape
- Walking or jogging in your neighborhood is free and fresh air is better than the air in a health club.
- Buy inexpensive workout and aerobic videotapes and use them at home with your TV. You could easily get a better workout than you’d get at a health club, and you can own the tapes for $5 to $10 each. Rent them first until you know you like them.
- If you insist on joining a health club, try joining for a month or buying a series of single-day passes first to make sure you’re going to have the time and discipline to stick with it. Avoid long-term membership contracts.
- Avoid buying sports accessories until you know that the activity is a fixed habit. For example, don’t buy a gym bag until you’ve been to the gym 20 times. Don’t buy good inline skates until you’ve racked up 200 miles on the cheap ones. Reward yourself with a Walkman after you’ve jogged 20 miles with only the sound of the wind in your ears. Then buy all that stuff used
Posted by Frugal Sally at 1:03 AM
Monday, April 11, 2011
Part of his Series on Ways to Save Money
- Pay attention to where your money is going. Carry a little memo pad around and keep track of everything you spend. Like magic, the simple act of writing stuff down will often keep you from spending money. It also helps you to look at where your money is going and allows you to make informed decisions about how much money you really need to live the life you want.
- Make a simple spending plan. You wouldn’t think of setting off on a long trip without a map. A spending plan is simply a map to help guide you to where you’re going financially. It allows you to set goals and evaluate your progress. There’s no successful company that doesn’t plan their cash outlays. Why don’t you?
- Make sure everybody’s on the bus. Changing your spending habits is hard to do if everyone else in your life isn’t reading from the same page. Make sure everyone in the family is committed to the trip before you leave the curb.
I will be posting more in this series over the next week or so (Frugal Sally)
Posted by Frugal Sally at 12:55 AM