6 Ways to Cut Your Insurance Costs

There is nothing that makes your wallet squeal louder today than pulling into the gas station and dropping $50. Gasoline prices have risen more than 12 percent over the past 12 months, and some experts are predicting they’ll reach $5 per gallon in the next six months.

The average household now spends $50 per month more on gasoline than last year, notes financial planner Rick Rodgers, author of The New Three-Legged Stool: A Tax Efficient Approach To Retirement Planning(www.TheNewThreeLeggedStool.com).

“But that’s not the whole picture,” Rodgers says. “Higher fuel prices affect a lot of other expenses in the family budget, from heating to food. The government estimates the average household is spending $150 per month more this year because of higher oil prices.”

You can try to ease the pain at the pump by using your car less, but you should also look for other places to offset that extra $150. Car insurance is a good place to start.
According to the Insurance Information Institute, the national average auto insurance premium is $850 per year. Can you reduce that? Rodgers says you probably can. He offers six ways:

• Shop around regularly. Your insurance agent doesn’t have a lot of incentive to reduce your premiums.  I recently met a consumer who told me he had been with the same agent for 15 years. After he shopped his insurance with another agent, he saved $1,600 on his premiums for all his coverage. The internet makes it easy compare costs for the same coverage, or you can get an independent insurance agent to shop for you. Contact the Independent Agents Association at (800) 221-7917. (Be sure the company you go with has a good credit rating and claims-paying history.)

• Bundle your coverage. Bundling is combining different types of policies (auto, homeowners, liability, etc.) with the same company. The theory is that the company will discount the premiums if they have all of your business. The most common combination is packaging your auto insurance and homeowner’s policies together.  Or, find companies that will bundle auto insurance with renter’s or tenant’s insurance.  Bundled packages usually result in a 10 to 15 percent savings.

• Ask for discounts. You may qualify for discounts, but you won’t know until you ask. They’re commonly offered for good driving records, anti-theft devices, vehicle safety features (anti-lock brakes, air bags, automatic seatbelts), low annual mileage and insuring more than one car. The spunky Flo from Progressive claims discounts are also available for buying your policy online, paying in full up front, and being a loyal customer.

• Take a defensive driving class. Even if you’ve been driving for years, you can learn a lot from driver education and most insurance companies recognize the value of a refresher course, which can help you avoid accidents. The amount of discount varies by insurance company and from state to state, although most insurers offer a 10 percent discount on your premium for three years.  AARP offers a driver safety program for those over age 50, and it’s available online.

• Increase your deductible. Do your auto and homeowners policies have low deductibles?  If so, you may be able to reduce your premiums 15 to 30 percent by raising the deductible on your collision and comprehensive coverage.  Make sure you have an emergency fund set aside to cover the cost of repairs before you make the change. But your homeowners policy may be the first place to consider raising the deductible, since statistics show the average homeowner files a claim only once every nine years. Be sure to check with your mortgage holder first; some specify maximums.

• Change Cars. This is probably the most difficult savings tip to implement but may have the largest impact on your premium.  Used cars are cheaper to insure than new ones (excluding antiques); sports cars are more expensive to insure than minivans. Insurance companies like cars with safety features and low repair costs.  Insure.com surveyed 900 vehicles in the 2012 model year and lists the rankings from the most expensive to least expensive on their website.  Six of the 10 cheapest were minivans.  

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10 Ways to Save on Pet Care

According to a recent article in USA Today, Americans spent approximately $50.8 billion on their pets last year, up from $10.1 billion just four years earlier. That’s a lot of money for Max or Fluffy, but still nothing compared to the unconditional love they shell out for you every day.

As the proud owner of two Labrador-Australian Shepard mixes, I’m no stranger to the rising cost of pet care. In addition to frequent exercise and annual check-ups, my husband and I save hundreds of dollars on pet care by adopting the following savvy strategies.

1. Create an Emergency Fund
There are at least nine reasons for an emergency fund, according to Kiplinger, including the ability to offset a costly vet bill should your beloved animal need expensive treatment. When my dogs were just 12 months old, one choked the other during aggressive play and — $1,700 later — we had a very tired but recovering puppy. Our savings account kept this traumatic experience from creating a financial hardship.

2. Don’t Skimp on Food
Food is likely the most expensive necessity next to vet visits, but that doesn’t mean you should opt for low price over quality. By purchasing healthy food, you’re enhancing your pet’s quality of life and ultimately saving yourself from costly vet bills down the road. Purchase discount gift cards to PetSmart and other stores from sites like GiftCardGranny.com to nab some savings.

3. Consider Pet Insurance
If you’re the type of pet owner who will spare no expense for veterinary care, consider signing up for pet insurance. The number of pet insurance carriers has increased significantly from just ten years ago, and most offer several levels of coverage. Visit PetInsuranceComparison.org for information on available policies, reviews and questions to ask providers.

4. Take Advantage of Clinics
Some veterinary practices offer free clinics one or two times a year, waiving appointment fees that compound the cost of annual visits. My husband and I always schedule check-ups and vaccinations during these times. If your vet doesn’t offer this service, check with your local Humane Society or animal-control unit for recommendations.

5. Research Your Options
When facing a hefty vet bill, you might assume your only option is to throw down a credit card and pay off the expense over time. However, there are other sources for financial aid, including state programs and breed-specific organizations. Consult this article from the Humane Society for more information.

6. Buy Discount
I shop discount retailers like TJMaxx and Ross for clothes and housewares, and always peruse their pet-care aisles for deals. I’ve found great pet beds, bowls and toys for much less than pet-store prices, though I avoid treats and food items since I’m not familiar with the brands. Ultimately, new pet owners can score serious savings by stocking up on discount supplies.

7. Be Loyal
PetSmart and PetCo each have free loyalty programs that offer discounts and, in the case of PetCo, 5-percent cash back on purchases. You should also sign up to receive email notifications about upcoming sales and exclusive discounts, and stock up during these specials to tide you over until the next promotion.

8. Order Meds Online
Most pet owners know medications purchased directly from the vet come with a hefty price tag. Unless it’s an emergency, request the prescription information and shop online at sites like 1800PetMeds.com. I save 34 percent on our dogs’ heart worm medication by ordering online and using the generic alternative.

9. Fix for Less
Neutering or spaying your pet is crucial to avoiding the exponential expense of caring for a litter down the road. The average cost of the service from your local vet is between $200 and $300, but many organizations offer this service for less to curb the number of homeless animals. Consult ASPCA’s Low Cost Spay/Neuter Programs page to find a provider near you.

10. DIY
Though I wouldn’t attempt to clean a cat’s teeth, there are several services you can administer at home to save money. Brushing, ear cleaning and nail clipping are just a few necessities you can likely handle without the assistance of a professional. In fact, your vet will happily share with you the best techniques for at-home care, as they’d much prefer to spend time on more specialized services.

Put Your Grocery Bill on a Diet

This year, we’ll be paying more than ever for dinner. Food prices jumped a whopping 4 to 5 percent in 2011 and are expected to continue rising in 2012, says the U.S. Department of Agriculture.

But you can have your chocolate cake and eat it, too, without breaking the bank, says Toni House, author of Savvy Shopping: How to Reduce Your Weekly Grocery Bill to $85 Per Week – or Less! (www.SaveYourMoneySaveYourFamily.com). A mom with executive-level experience in accounting and the restaurant industry, House pared the monthly grocery bill for her family of four to $250. And nobody complained.

“It takes savvy shopping,” she says. “You can have great everyday meals and special-occasion feasts and trim the household budget with planning, patience and grocery shopping ‘guardrails’ to keep your cart in line.”

House offers these tips:

• Be patient – wait for good deals. Save pricier purchases for double coupon days. If you’re planning for a special occasion or celebration, save now so you can splurge a bit later, The more you rush, the less you save. 

• Be detail-oriented. There is a lot of fine print involved in being a savvy shopper, from expiration dates to special offers to asterisks. Know exactly when a coupon expires, how much it’s for, how much more it will be worth on double coupon days and whether or not it’s worth the price in the first place.

• Plan ahead. Plan a menu for at least three meals in advance; combined with leftovers; that should give you five days or more of meals, depending on the meal. This puts you in control of your shopping list; and not the other way around. Instead of always playing catch-up, replacing what you’ve run out of, you buy only when it’s on the menu. Same goes for cereal, yogurt, bananas, fresh herbs and spices, etc.

• Instead of making expensive foods (meat) the centerpiece of each meal, design menus that use the most expensive foods less often. For instance, from now on at least twice a week, try using meat as more of a filler than a main dish. Instead of making spaghetti with meat balls, or sausage, or chicken breasts, make spaghetti with a meat sauce of ground turkey, ground sausage or ground chicken breakfast sausage.

• At the grocery store, buy ONLY what you can eat. That means no paper plates, toilet paper, plastic cups, Army men, toothbrushes, jar candles, greeting cards. Grocery store prices for non-food items are higher than you’ll pay almost anywhere else, so make a hard-and-fast rule and stick to it.

• Do use coupons, but only for products you actually need. Let’s say you just bought twice as many hot dog buns as you needed last week and now you’ve run across a two-for-one coupon for…more hot dog buns? Do you really have room in your freezer for all those buns?

House’s $85-a-week budget does require tossing out some pricey products your family may have grown accustomed to (brand-name cereals, pre-packaged snack cakes) and changing the way you plan meals. But there are plenty of delicious, often healthier, and less expensive substitutes

“You are the leader of your family unit, not just at home but at the grocery store,” House says. “Your new quest to become a savvy shopper might meet with some…resistance… at first. Take the bull by the horns and lead the family in the right direction.”

The Hard Reality of Saving Money

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The approach to saving money is usually thought of as technical and very quantitative. Just look at how complicated a budget on paper can get. Budgets are even harder to execute and follow, let alone initially understand.

Saving money is more like a workout program. It’s very hard at first, and you feel the pinch in your wallet just like you would the soreness in your muscles. When saving, as in working out, the results don’t come immediately. Patience and conviction is required to keep focus on the ultimate prize and eventually you are slowly rewarded with financial freedom or a Charles Atlas type physique. In working out and saving, a change in lifestyle is of key importance to becoming successful. You can coupon cut all you want, but if your spending habits are not matched to your income, it’s impossible to save money.

Lifestyle changes can be made to help you save more money. Firstly, a focus on minimalism should be embraced. We don’t actually need 90% of what we buy. When it comes to shiny things and electronics, I prefer to save and feel secure rather than have new gadgets. My old TV still works fine, and my budget laptop has done the job so far. By spending excessively on new clothes, dining out, food and shiny things/gadgets, you virtually eliminate your chance to get ahead, especially if you’re on a tight income.

Secondly, many lifestyle problems can be solved by thinking independently. Most decisions that really cost you generally are from the guidance of a friend or relative. I’m sure they mean well, but if your cousin wants to go to the bar 3 nights a week (cash drain) and bugs you to come out, it takes a lot to say no, and decide independently for the better of your future. Call me lame, but I’d prefer to go out once a month and be financially secure, that way you have both. Applying independent thinking in other life situations can help you make slight lifestyle changes to save money.

Lastly, embracing a healthy lifestyle can help you save money in numerous ways. Eating healthier is generally less expensive and can increase the quality of your life. Switching your grocery list from frozen foods, soda and sweets to peanuts, fruit, whole oats, water and vegetables can seriously save you money on groceries, minus the absurd coupon cutting. Embracing a healthy lifestyle requires a conviction to independent thinking. As with most realities, to be successful in anything requires you to think things through and resist the temptation that most normal people easily fall for.

Also using discount cards like Hero$Card will help you develop relationships and discounts with business to save more money on the things you already purchase.

John Laframboise is founder and author at http://www.riseofamillionaire.com, a personal finance Blog that follows his progress to become a millionaire. John has held positions within the Canadian banking industry and has a Bachelor of Commerce from the University of Windsor in Canada.

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