Money Saving Tips

It’s easier to hold on to money than to make more of it. When individuals or families discover that their bank accounts are insufficient, the first response is often to look for ways to earn more money. The best alternative, however, is to save the money that comes in and spend wisely what needs to go out for basic expenses.

Here are some money-saving ideas:

homeowners insurance

Homeowner’s insurance is an essential component of responsible homeownership. Protects you from losses sustained in fire, storms, theft, and other events specifically described in any policy. As with any expense, it is wise to buy the best value at the lowest price.

To understand coverage so that 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 like furniture, appliances, and clothing that are damaged, destroyed, or stolen from your home.

· Home 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 owner’s property, the owner is also covered if their dog bites someone, even if the bite occurs elsewhere.

Liability is paid when you are found liable for a personal injury or when another person’s property is damaged. For example, if a dead tree in his yard falls on a neighbor’s house and he is deemed negligent because he did not remove the tree, his policy covers him.

· 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 cover. Find out about deductibles and any special provisions, such as the exclusion of damage types endemic to a particular area, such as earthquakes in California’s 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 will have to pay before the insurance company kicks 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 rate, which indicates its willingness to pay your justified claims in a timely manner. You can get this information from your state’s Department of Insurance Companies. 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 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?

Renters have an interest in 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 the contents of your home.

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 payments are for value or replacement cost.

Although it may cost a little more, replacement value covers the expense of replacing the items with comparable new ones in today’s market. Some policies only pay for the current value of an item, in addition to 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 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 paycheck

Most people find that each paycheck with a raise disappears just as quickly as the paycheck they received before the raise or cost of living. It is peculiar that no matter how much money one makes, it all seems to be spent. To counteract 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 as well. 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 aside that money for emergencies or to save for a long-term purchasing goal. It’s easy to think that you ‘just have 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 hopefully you won’t be tempted to spend it.

Another paycheck bonus is that fifth week of the month that you get an extra paycheck. If you are paid weekly or biweekly, that extra check should be set aside as savings. Your monthly rent doesn’t increase with 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 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’ll appreciate its value by evaluating the neighborhood the home is in and the quality of workmanship on the home itself. Plus, the savings can be built into the mortgage or added to as they become feasible.

Of course, you negotiate the best possible purchase price for a home, but the haggling doesn’t stop there. Now connect online or by phone with mortgage lenders. Shop for the lowest interest rate possible. You can often get a better interest deal 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 deposit even more money, sometimes the mortgage company will allow you to pay the points on the loan or give you a lower interest rate.

If you don’t have that much 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 well 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 over half the life of the loan, but increases the monthly payment by only a couple 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, rather than 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 the first and again on the 15th. Make each payment half of what the monthly payment totals. If you do this over time, you will save the amount of interest you would have paid for that part of the payment that was made earlier.

It’s also worth making at least one or two additional 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 extra house payment.

This truth should be obvious, it’s easier to save money than you have to make more of it. So save what you can and spend what you owe wisely.