Wednesday, February 2, 2011

A Penny Saved Is A Penny Earned

This is a painful one, but it's definitely worth your time. If you can't increase your income, then see if you can lower your monthly bills. It might seem obvious, but so many people don't go to the trouble to comparison shop or consolidate loans, and end up costing themselves hundreds if not thousands of dollars a year.

Car insurance, home insurance, life insurance, credit card interest rates, student loan rates, cable, phone and internet bills are all costs that you can save a bundle on if you shop around. When we moved to our new home and I started calling around for our home insurance, I was shocked to find that our car insurance company gave us such a huge discount for going with them that it was around 1/3 of the other quotes we received. Our new state (SC) also has much higher car insurance payments than our previous states (GA and CO), so this month we decided to call around and see if we could get a better deal. We also called our current insurance company and asked if there was anything they could do about it--in about 10 minutes they took $500/yr off of our charges and are reimbursing us for previous costs.

If you haven't consolidated your student loans, it's time to get on it. If you're paying an interest rate on your credit card know how much it is and see if you can get a lower rate. Will you get a discount by bundling your utilities? Set aside an afternoon (or maybe a day) to comparison shop, you may be dreading it but you won't regret it!

The wonderful thing about this is that these are reoccurring bills, so if you spend an hour working on your home insurance and save yourself $50/month, then you have really saved $600 over the next year-you can consider that a $600/hr paycheck!  When you clip coupons you only save the money once, but lowering your monthly bills is the same as increasing your income. Actually, it is even better since you are saving after tax money. In that example of saving $600/yr, we would actually have to make $800 (pre-tax) in order to pay it.

*A quick note here about our car insurance company, we have had Progressive for 6-7 years now and couldn't be happier with them. They have had the lowest rates we have found, I always get super fast service when I call (no automated system) and when we had a weather-related accident they handled it so well and gave us amazing service (and a pretty sweet rental for two weeks) and then didn't even raise our rate! Also, a few years ago we were on vacation in a rental car and got rear-ended at a stop light by a van full of coast guards. The police cited that it was their fault and the rental car company told us it had nothing to do with our insurance so we didn't need to call them, and the coast guard would have to pay for everything. Even though it didn't concern them at all, we still called Progressive to let them know what happened. They were so fantastic, they took over the whole thing for us making sure that the coast guard paid the rental company for all of the repairs, even when they tried to deny responsibility. Then they submitted our receipts for a new car seat and stroller (the stroller was in the trunk and was broken) and got us reimbursed for that as well. I really don't work for Progressive, I promise, I'm just hugely impressed with their company and highly recommend them!

So get organized, get ready to spend the day on the phone and just get it over with already. Give yourself a good motivator-maybe a massage for every $500/yr you save?

1 comment:

  1. Man, saving $500 a year would be awesome! Another great post- thank you!!!