You want more money, but saving is hard – especially today. You’re being pulled in a multitude of directions. Everyone has their hand out. With new government regulations touching the health insurance and health care industry, your bank account is going to start feeling even smaller.
It’s demoralizing to check your bank account balance – you have more month than you do money in your account. It doesn’t have to be this way though. Here are some easy ways to start saving money immediately.
Lower Your Car Insurance Costs
Lowering car insurance premiums is something a lot of people overlook. Maybe it’s been over-hyped in recent years, but taking a critical look at what you pay for car insurance could result in a savings of several hundred dollars per month.
For example, your car insurance premium is driven by your deductible, the coverage you carry, the riders you have, and your driving record.
If you change any of these, your premium will be affected. First, your driving record – it’s hard to change bad habits, but it’s worth it. If you have a few speeding tickets, spend some time looking up defensive driving courses in your area. These courses have proven themselves to be valuable again and again for drivers.
Specifically, these safe driving courses result in an instant premium reduction of between 10 and 20 percent. So, for every $100 you spend in premiums, you save between $10 and $20. It’s not much, but it’s a start.
Next, take a look at your coverage. Do you have basic liability or full coverage, including comprehensive? In most states, you’re required to carry liability insurance, but not collision or comprehensive.
If your vehicle is older than five years, or the premiums you pay exceed 10 percent of the salvage value of the vehicle, it’s probably not worth carrying full collision coverage. By law, insurers cannot repair a vehicle if the total damages exceed 70 to 80 percent of the value of the vehicle.
Paint jobs, new bumpers, door skins, and fabrication work plus labor are extremely expensive. Look at the average cost of parts for your vehicle – taking into account the type of work that’s typical for an auto accident.
For example, take a look at what replacement bumpers cost, plus paint, plus labor. Take a look at what new door skins, costs, plus paint, plus labor. It’s most likely that an accident will result in you damaging things like your bumper or your door. If the cost to repair or replace these things is more than the cost of another used vehicle, you’re probably better off dropping collision insurance and banking the difference.
The same can be said of comprehensive coverage, though this won’t result in as much of a savings as dropping collision.
Your deductible should also be scrutinized. If you’re like most people, you have it set way too low. A $200 deductible makes it easy to get your vehicle fixed, but it also keeps your premium very high. Consider raising your deductible. At $500 or even $1,000 will make a substantial difference in your premium. Sure it will make it more “expensive” to fix your vehicle but, combined with the other tweaks to your insurance policy, it won’t be impossible to pay that deductible.
Finally, the riders you add to your policy can make a huge impact on your premium. Ditch the rental car insurance, PIP, towing, and accidental death riders if you want the maximum savings. Rental car insurance covers you when you need to rent a car. Usually, this only becomes an issue when you’re in an accident. Even then, there are cheaper options than carrying this type of coverage – like borrowing a friend’s car.
PIP is “personal injury protection,” which is largely non-essential when you have health insurance (which you will have to have soon anyway). Towing can be really helpful when you’re in an accident. While this can save you a little money, the savings in and of itself aren’t much. Drop this when you have AAA or some other towing service you like – or if you just want to maximize your savings.
Optimize Your Tax Withholding
Most people leave their withholding allowances at the highest amount so they can receive a refund at the end of the year. It’s a false sense of accomplishment, though. The refund means you overpaid on your taxes. If you’re cash-starved, this money comes in handy throughout the year.
The IRS has a withholding calculator that makes it dead-simple to safely adjust the amount of money that is withheld from your paycheck. Stop giving the government a zero-interest loan for 12 months, especially when you can use the extra money right now.
Make A Budget
Making a budget is severely underrated. The simple act of writing down all of your income and expenses makes a huge impact on the money you have left over at the end of the month. You may find that you’re overspending on groceries, for example, because you never make a shopping list – you just “wing it.”
Having a written budget makes things objective. You’re less likely to waste money, and you’ll be able to see where cuts need to be made. You’ll be amazed at how easy saving becomes when you know where your money is going.
Author Bio: Gillian Kearney enjoys sharing her money saving ideas through blogging. She is an insurance consultant. Visit the Monkey for more money saving ideas.
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