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Thursday, May 29, 2008

Quick, Get Your Hands on $1000

There are a number of authors, columnists, and radio hosts who deal with household budgets. One common theme I've seen in numerous places, perhaps most notable in Dave Ramsey's Total Money Makeover is the idea of finding $1000 quickly. The idea of getting your hands on $1000 when things aren't looking too rosy is to give yourself a mental boost. That pick-me-up can make better budgeting seem manageable.

There are many ways to find $1000. One can work another job to get their hands on some extra money. One can sell stuff around the house that is collecting dust or taking up space. Or, if your budget needs more breathing room, you can look to cut costs. I think normally opt for the latter knowing that a new habit will continue to pay off with often minimal efforts.

Given that food and gas costs are going through the roof, even those with room to breathe could benefit from the exercise of finding $1000. As of today, I'm nearly $600 closer to shaving $1000 off the budget. I decided to do what budgeting experts recommend be done yearly. . . . call insurance carriers and get new quotes.

We were paying just under $1000 a year to ensure two older cars and two drivers. Knowing that friends of ours pay that every six months, I was feeling a bit smug. Now I'm a big embarrassed. I should have got this item on the to do list done a while ago. Today our new agent shaved off $200 a year, bring our auto insurance under $800 a year. One should never feel too smug and do their homework.

The other $400 was from a homeowners insurance policy that we took out while a claim was still on our record. I have learned that just because a claim is 3 years in the past doesn't mean the insurance company automatically makes the adjustment. My call to this insurance agent was prompted by the three year anniversary of our claim.

Glad I called. The effort involved was minimal and even if I don't continue to do my homework, that $600 could easily become $6000.


Ariella said...

It is very important to review your insurance policy upon renewal. I noticed that our auto coverage went up, though as the car's value dwindles, if anything, it should go down. I called to inquire and was told that the company had removed the credit for the defensive driving course I had taken. But it was still valid through the end of this year. So I faxed the copy and had the amount adjusted down before paying. Our savings for that course top $200 a year and the course was just $10 at the library.

qsman said...

Make sure that you are comparing apples to apples with insurance. I shop around every 6 months, and the lower quotes usually come with less coverage.

Biggest example can be found with liability. I carry 300,000/300,00/100,000 coverage, but many places don't even offer those levels - which is why they are cheaper. So carefully compare. Of course this is a non-issue if you are negotiating with the same insurance, I got several hundered lopped off when I called after the 3 years lapsed following my spouses's last accident.

Also, while it may not matter now, a cheaper company may come with lousy service. I'm sticking with my current slighlty higher company since their service has been EXCELLENT, both with claims and customer service.

Anonymous said...

In addition to the limits qsman described, it's also essential to make sure new endorsements aren't being tacked on to your policy that will eliminate coverage for certain types of occurrences.

Charlie Hall said...

I second the points that one should be careful regarding auto insurance. In particular, the minimum liability limits that states require do not provide adequate protection even for accidents in which nobody is injured.

SephardiLady said...

Agreed that one needs to be careful. We carry a $1,000,000umbrella policy and are required to have 500,000/500,000/100,000 coverage on the auto. So I was comparing apples, but thank the readers for adding more pertinent information to this post.


ProfK said...

There is also another way to get that $1000 but it requires strictness in spending. We do not carry any credit card debt but we use the credit card for everything we possibly can. The cards we are holding have cash back features. One company issued separate cards for me and for my husband--each card has a $400 a year cash back feature. A third card has a $500 a year feature. When we use up the cash back on one card we go to the next one. That's $1300 in cash rebate a year. But you truly have to be someone who won't abuse the credit cards and who will pay the balance every month.

Miriam said...

We saved over $2500 a year by switching to a higher deductible health insurance plan. We would pay more out-of-pocket if, G-d forbid, an emergency happens, but basic well-baby and annual check-ups are covered the same. We also have a higher name-brand prescription deductible, but no one here takes name-brand prescriptions regularly.

Anonymous said...

It always takes a little siyata dishmaya to make ends meet, but being in the right place in the right time really can result in significant extra income! A couple of months ago I was approached about doing some professional work from home for a local doctor... it has B"H resulted in a very nice extra check arriving every month, for only 2-4 hours a day. Who can't spare that, to help pay down the debts?