It’s easier to hold on to money than you have to make more of it. When individuals or families find that their bank accounts are insufficient, the first response is often to find ways to earn more money. The best alternative, however, is to save the money that comes in and spend wisely what you need to go out for basic expenses.
The following are some ideas to save money:
homeowners insurance
Homeowners insurance is an essential component of responsible home ownership. It protects you from losses suffered in fires, storms, thefts and other events specifically described in any policy. As with any expense, it’s wise to buy the best value for the lowest price.
To understand coverage so a consumer can compare similar items, it helps to understand the terminology used when writing homeowners insurance policies. There are five basic components to homeowners insurance; Personal property, housing, medical coverage, civil 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.
· Homeowners insurance covers the structures themselves. This generally covers the house and any other buildings, such as a detached garage or storage buildings on the property.
Medical coverage pays the medical bills of people injured on your property. Since a dog is considered the property of the owner, the owner is also covered in the event that their dog bites someone, even if the bite occurs elsewhere.
Liability is paid when you are found liable for a personal injury or when someone else’s property is damaged. For example, if a dead tree in his yard falls on a neighbor’s house and he is considered negligent because he didn’t remove the tree, his policy covers it.
· Loss of use often pays up to 20% of a home’s insured value while your home is uninhabitable during repairs.
When you contact insurance companies, make sure you are clear about what they do and do not cover and the amounts they do cover. Learn about deductibles and any special provisions, such as the exclusion of 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 looking for coverage, determine the highest deductible you can afford. The deductible is the amount of money you’ll have to pay before the insurance company steps in and pays the rest. Research the company’s financial rating, which is an indicator of its ability to pay your claims, and its complaint rating, which indicates its willingness to pay substantiated claims in a timely manner. You can get this information from the Department of Insurance Carriers in your state. Insurance isn’t a bargain if it doesn’t provide the coverage you need or you fold financially at a critical time.
The key to saving here is to examine the policy carefully, knowing what you need and how much you can afford to pay in deductibles.
Tenants need to protect investments
Most people might not think of furniture, appliances, and household items as an investment, after all, most of them depreciate over time. While it is true that these items do depreciate, how much would it cost to replace them, especially all at once?
Tenants have an interest in obtaining financial protection against the loss of their household assets due to fire, flood, or theft. For a small fee, an insurance company, often the same one that insures your vehicle, can also provide coverage for your home’s contents.
Talk to several insurance agents and find out what type of coverage their company offers, how much it costs, what the deductible is, and whether the payments are for value or replacement cost.
Although it may cost a little more, the replacement value covers the expense of replacing the items with comparable new ones on the market today. Some policies only pay for the current value of an item, on top of which you must pay the deductible. In that case, there may be no payment at all.
Get the best coverage you can afford with a reliable, stable company that has good reviews registered with your state insurance board. He owes it to himself to ensure the value of long-term investments such as bedroom suits, leather furniture, and appliances designed to serve a family for years.
your paycheck
Most people find that each paycheck with a raise disappears just as quickly as the paycheck they received before the salary or cost of living increase. It is peculiar that no matter how much money one earns, it seems that everything is spent. To counter this trend, several contemporary authors have advised the implementation of various savings plans.
One way to save money is to never acknowledge a raise. When your paycheck increases, deposit the difference between the usual amount and the increase. With the next raise after that, deposit at least half of that too. You don’t miss what you never had, so this is a pretty easy way to save money.
What about that tax refund? Spend it? save it? Well, of course it makes sense to set that money aside for emergencies or to save for a long-term purchase goal. It’s easy to think you ‘just have to’ buy something with that money when you know it’s coming, but if you have it deposited directly into your savings account, you’ll never see it and hopefully won’t be tempted to spend it.
Another paycheck bonus is that fifth week of the month you get an extra paycheck. If you get paid weekly or biweekly, that extra check should be set aside as savings. Your monthly rent doesn’t go up with that fifth week, and your car, phone, and utility payments are monthly, too, so there’s no reason to spend that money on anything other than long-term savings goals. Even making an extra payment on the house note is a good use of money. Or pay off the credit card bill with the highest interest rate, and then close that account.
house purchase
Be a smart investor, before you buy a home make sure you will appreciate its value by evaluating the neighborhood the home is in and the quality of the workmanship on the home itself. Plus, the savings can be built into the mortgage or added on as feasible.
Of course, you negotiate the best possible purchase price for a home, but the haggling doesn’t end there. Now connect online or by phone with mortgage lenders. Shop for the lowest interest rate possible. You can often get a better interest rate by paying down the principal with a larger down payment. If you can put down a 20% down payment and have good credit, the terms should be good. If you can put down even more money, sometimes the mortgage company will let you pay the points on the loan or give you a lower interest rate.
If you don’t have that much money saved, you may be able to borrow a small amount from your family at a lower interest rate than the mortgage company can offer. In that case, getting a small loan this way will be beneficial in the long run, as the 80% financing interest rate will pay off in savings.
Another option to save money on a home is to get a 15-year loan instead of a traditional 30-year mortgage. That saves the interest that would have been paid on the balance for half the life of the loan, but increases the monthly payment by only a couple of hundred dollars.
What if you don’t have as much savings, your credit has some blemishes, or you can’t afford the higher payment that comes with a 15-year mortgage instead of a 30-year mortgage? You can still save a lot on your home by paying the monthly note in two installments. Pay twice a month, once on the first and again on the 15th. Make each payment half of the total monthly payment. If you do this over time, you will save the amount of interest you would have paid on that part of the payment that was made earlier.
It’s also worth making at least one or two extra house payments each year. With the money saved by not buying impulsive or unnecessary items, a decent amount of money can be raised to pay for the additional payment on the house.
This truth should be obvious, it is easier to save the money you have than to make more of it. So save what you can and spend what you owe wisely.