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Mar 31, 2014    |       35 comments

I just saved 15% in 15 minutes!

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We’ve all seen the Geico commercials. “You can save 15% in 15 minutes on your car insurance!”

I particularly like the new commercials (from E-surance) poking fun at the old commercials. Their point is you can actually save more money in less time by using online car insurance services.

Well, in my quest to spend less so I can pay off debt faster, I thought car insurance would be a good place to start. We are very loyal customers of Progressive. Although we have good driving history, ourselves, we have both been very impressed with Progressive’s customer service whenever we’ve been in accidents (between the two of us, we’ve been rear-ended 3 times in the past 4 years). In some cases the other guys’ insurance companies have been a hassle to deal with. Progressive is awesome – they front us the money needed for repairs/rental car/etc., and then pursue the other insurance company to be reimbursed. We love it because we don’t have to wait for the “other guys” to approve a claim. Progressive does it automatically and then THEY deal with the headache of getting the other people to pay up. All of this to say, I am not interested in switching car insurance companies at this time. But I AM interested in saving money.

I was reading one of Suze Orman’s books, The Road to Wealth, and there’s a whole section about auto insurance. After reading what she had to say, I went to progressive.com to their online services (SO convenient!). Wouldn’t you know – we were over-insured!!

Exhibit A. Chris’ work truck. Chris drives a 2002 Ford pickup truck. It’s old, beat up, and has high miles….worth approximately $2,000. And for some reason we were paying comprehensive insurance on it! So I dropped the comprehensive/collision insurance.

Exhibit B. Suze Orman says, “those with fewer assets should consider changing their policy coverage to $15,000 for bodily injury per person, $30,000 bodily injury per accident, and $10,000 personal property coverage per accident.” I checked it out and we were insured for WAY more than that. Seeing as we have very few assets (in the unlikely scenario that someone would sue us from an accident), I lowered our coverage. I switched from $100,000 down to $15,000 (bodily injury per person), $300,000 down to $30,000 (bodily injury per accident), and from $50,000 down to $25,000 (personal property per accident). You’ll notice that I still kept our “personal property” coverage a little higher than Suze Orman suggested – mainly because the cost of cars is so expensive that $10,000 felt a little too low.

And guess what…..

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I saved WAY more than 15% in 15 minutes!

 

Our monthly bill was sliced from $128/month down to only $80/month! That’s a savings of $48/month ($576/year), or 37.5% lower than our original bill. And it only took about 5 minutes, if that!

So there you have it! I encourage all of you to check out your policies! I’m sure when I originally signed up for our coverage that I had NO IDEA what I was doing. I think I recall asking the insurance agent (who makes a commission, by the way) what they recommended and just going with that! Ha! I can’t wait to funnel that extra $576 per year toward debt! Wahoo!!!

How much do you pay for car insurance? When’s the last time you checked your policy and assessed your coverage?

Pssst: Check back this afternoon for another big announcement!

Mar 30, 2014    |       34 comments

Question of the Week: Handling Emergencies

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This is our Sunday series where we all respond to reader questions. If you want to submit a question, please go to this post.

Question of the Week

How are you going to handle difficulties and emergencies now that you are in debt reduction mode and will no longer be relying on credit cards and loans? posted by Hot Sauce

Stephannie

 When my husband started with his medical problems they were running all kinds of tests to try and figure out what was wrong.  We had gone to Houston for a major test and before we could sign in they wanted $1,800.00. I completely panicked and all we could do was put it on a credit card. His health problems were the main reason I shelved my business and went back to work for someone else.  We just could not afford all the medical bills plus the debt we had accrued. I went back to work full time, worked my business on the side as much as possible (monogramming) and worked a second job in the evening at my parents business.  Because of this we were able to put some money into an emergency savings account while still paying down our debt. That was a hard time on our family because I was never available for my girls since I was always working. While it was hard, it was so worth it because we now have a little set aside for emergencies. I am now only working at my day job and doing a little bit of my business on the side. But, if we needed it I would do it all again because I don’t ever want that feeling again of knowing we have to pay for something that concerns our health and the only option is to put ourselves more into debt.

 

Jim

That is a real toughie for me.  You see we already live paycheck to paycheck.  This wasn’t always the case… Before I quit my job, to be home with my family, I was making around $4.5k a month and we did have a good savings.  But little by little, the savings got eaten up.  But I do want to build that emergency fund up, because my wife and I have terrible luck.  After the end of this month, I will have a clearer picture of where my money is going and where I can budget everything.  After that, my first priority is to start that emergency fund.  I haven’t really relied on credit cards for a while now (another story), except for the one store credit card.  That is for a clothing store of my wife’s.  She has lost a lot of weight since we have been married.  And I know that she will need clothes for the summer.  Hell everyone will need clothes, except for me hopefully.  The kid’s I try to buy next year’s clothes after the season ended on clearance.  But it is getting harder to find these clothes.  But yard sell season is coming and I am anxiously waiting to find what kind of deals and steals I can get this year.You ever notice that when a real emergency comes up, you somehow find the money?  Whether it is from robbing Peter to pay Paul, or selling stuff?  Somehow you always do, well I hate the fact this happens all the time with us.  So hopefully I won’t have to once I sit down and look at where all my money is being spent 

Hope

I am on the fence about an emergency fund. I know I should have one, especially with four kids. However, I also know that I am really bad about dipping in when I shouldn’t.  I did well last fall and saved $50 per month in an account that I cannot access without going to the bank – no debit card, no online transfer, etc.  That worked. I put the money in when I deposited a check and didn’t think about it.  In addition, I am leaving no cash I can get too, everything is going to bills or to debt.  We are living very lean in trying to do this. But then an emergency struck, my son broke his hand, and I had to rush him to an Urgent Care after bank hours. I had no access to money, none! Thank God, literally that his dad lives 30 minutes away and met me halfway to bring me the money to get him seen.So the answer is, I have no idea.  I am not a panicky person. I have a good support system I could call if needed. And I carry life insurance in case of the worst. I think I would probably fly by the seat of my pants and trust God, karma and my great family and friends would help me for now.  But I am considering starting my inaccessible emergency fund again, maybe.  Would love to hear the communities thoughts on it.

 

Ashley

I think, for me, the biggest change will be a psychological shift. When we experienced our most recent emergency (with my husband’s health crisis – discussed in this post), my immediate reaction was to whip out the credit cards and reserve cash for only the essentials (e.g., rent, utility payments, etc.) In the end, we ended up accruing more debt that was totally 100% avoidable because, in fact, we had an emergency fund that could get us through at least 2.5-3 months (or longer if we really cut down to bare essentials. For some reason the credit cards provided a sense of security. But that’s exactly what an emergency fund is supposed to be for….emergencies!!! I think by shifting my mindset to not viewing CCs as a “safety net” and instead viewing them as the devil (a little dramatic, but you get the idea), and relying on my emergency fund in case of emergency we should be okay. Restocking a month or two of our emergency fund is a much faster/easier process than paying down our monstrous debt that is accumulating daily interest!
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