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It’s easier to hang onto the money you have than to make more of it. When individuals or families find their bank accounts low, the first reaction is often to look for ways to make more money. However, the better option is to save the money that comes in and spend it wisely which needs to go out for basic expenses.
Following are some ideas to save money:
homeowners insurance
Homeowners insurance is an essential component of responsible home ownership. It protects you against damages caused by fire, storm, theft, and any other events not specifically mentioned in the policy. As is the case with any expense, it is wise to shop around for the top value over the least amount.
To understand the coverage so that the consumer can compare similar items, it is helpful to understand the terminology used in writing a homeowners insurance policy. There are five basic components to homeowners insurance; Personal property, housing, medical coverage, liability, loss of use.
Personal Property Pays for household items such as furniture, appliances, and clothing that are damaged, destroyed, or stolen from your home.
Home insurance covers the structures themselves. This usually covers the home and any other buildings such as a detached garage or storage buildings on the property.
Medical coverage pays for the medical bills of persons injured on your property. Since the dog is considered the owner’s property, the home owner is also covered if their dog bites someone, even if the bite is in another location.
Liability pays when you are found liable for personal injury or damage to someone else’s property. For example, if a dead tree in your yard falls on a neighbor’s house and you are deemed negligent because you didn’t remove the tree, your policy covers it.
Loss of use often pays up to 20% of the insured value of the home while your home is uninhabitable during repairs.
Make sure when you contact insurance companies that you are clear about what they do and do not cover and the amount they cover. Inquire about deductibles and any special provisions that exclude types of damage endemic to a particular area, such as earthquakes in the California Bay Area, or hail and wind damage on the Gulf Coast.
Before you shop for coverage, determine the highest deductible you can afford. The deductible is the amount you have to pay before the insurance company arrives and pays the rest. Check the company’s financial rating, which is an indicator of its ability to pay your claims, and its complaint index, which indicates its willingness to pay your fair claims in a timely manner. You can get this information from your state’s department of insurance carriers. Insurance is no deal if it does not provide you with the coverage you need or is financially locked out at a critical moment.
The key to saving here is to examine the policy carefully, know what you need and how much you can afford to pay in deductibles.
Tenants need to protect investment
Most people may not think of furniture, appliances and household items as investments, after all, most of them depreciate over time. While it is true that these items depreciate, what would it cost to replace these items, especially all at once?
Tenants have an interest in securing financial protection against loss of their household goods due to fire, flood, or theft. For a small fee, an insurance company, often the same one that insures your vehicle, may provide coverage for your household contents as well.
Talk to several insurance agents and find out what type of coverage their company offers, how much it costs, what the deductible is, and if payments are for replacement cost or value.
Although it may cost a little more, the replacement value covers the cost of replacing the items with new ones in comparison to today’s market. Some policies only pay for the current value of an item, above which you must pay a deductible. In that case, there may be no payment at all.
Get the best coverage with a reputable and stable company that has good reviews on file with the State Board of Insurance. You owe it to yourself to ensure the value of long-term investments like bedroom suites, leather furniture, and appliances designed to serve a family for years.
your salary
Most people find that each paycheck with a pay raise disappears just as quickly as the paycheck they received before the salary or cost of living increase. It is strange that no matter how much money one earns, it all seems to be spent. To counter that trend, many contemporary writers have advised the implementation of various savings schemes.
One way to set aside money is to never accept a raise. When your pay goes up, deposit the difference between the normal amount and the increase. Then with the next raise, deposit at least half of that as well. You don’t remember having what you never had, so it’s a fairly painless way to save money.
What about that tax refund? spend it Help? It certainly makes sense to set aside that cash for emergencies or to go towards savings for a long-term purchase goal. It’s easy to think that you need to buy something with that money when you know it’s coming, but if you have it directly deposited into your savings account, you’ll never see it, and expect it to be spent. There will be no temptation to do it.
Another paycheck bonus is that fifth week of the month where you get an extra paycheck. If you are paid weekly or bi-weekly, that extra check should be set aside in savings. Your monthly rent doesn’t increase in that fifth week, and your car, phone and utility payments are also monthly, so there’s no reason to spend that money on anything other than long-term savings goals. Even paying extra on house note is a good use of money. Or pay off the credit card bill at the highest interest rate, then close that account.
home shopping
Be a smart investor, before buying a home make sure it will appreciate in value by evaluating the home’s neighborhood and the quality of workmanship on the home itself. Also, savings can be built into the mortgage or they can be combined if possible.
Of course you negotiate the best possible purchase price on a home, but the bargaining doesn’t end there. Talk with mortgage lenders online or over the phone now. Shop around for the lowest possible interest rate. You can often get a better deal on interest by paying down the principal with a larger down payment. If you can put 20% down and you have good credit, the terms should be good. If you can put down even more money, sometimes the mortgage company will allow you to pay off points on the loan or give you a lower interest rate.
If you don’t have that much money in savings, you may be able to borrow a small amount from family at a lower interest rate than the mortgage company offers. In that case taking a smaller loan like this would be beneficial in the long run as the interest rate on 80% financing would pay off handsomely in savings.
Another option to save money on a home is to get a loan for 15 years instead of the traditional 30-year mortgage. This saves interest that would have been paid on the balance for half the life of the loan, yet only increases the monthly payment by a few hundred dollars.
What if you don’t have much in savings, you have some blemishes on your credit, or you just can’t afford the higher payments that go with a 15 instead of 30 year mortgage? You can still save a bundle on your home by paying the monthly note in two instalments. Pay twice a month, first once, then on the 15th. Make each payment half of the total monthly payment. If you do this over time, you will save on the amount of interest you would have paid on the portion of the payment that came earlier.
It’s also helpful to have at least one or two extra home payments each year. With the money saved from not buying impulse or unnecessary items, a good sum can be put together to pay for the additional house payments.
The truth should be clear, it is much easier to save the money you have than to make more of it. So save what you can and spend wisely on what you need.
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