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April 2009
How to streamline insurance and transportation costs
In
today's shaky economy, many families are finding innovative (and
sometimes not-so-innovative) strategies for trimming household budgets.
Two areas to contemplate: insurance and transportation.
Insurance
By
simply paring down insurance premiums, you can bolster your bank
account without much pain. The bottom line is this: All insurance
companies reward policy holders for reducing risk. If you belong to a
homeowner's association, for example, you're often considered a lower
risk. Why? You belong to a community, and your neighbors are more
likely to keep an eye on your property (reducing the likelihood of
theft and vandalism).
- Or consider car insurance.
If you're a teenager and own a red sports car, look out: higher car
insurance premiums come with the territory. Got speeding tickets?
Insurance companies generally see you as a greater risk than someone
with an unblemished driving record.
- How about life insurance?
Smokers like it or not will often pay higher premiums
because, statistically speaking, they're more likely to develop health
problems than non-smokers. The greater the perceived risk, the higher
the insurance premiums.
- How can you trim those premiums? First
and foremost, reduce your perceived risk by avoiding behaviors your
insurance company considers risky. Second, be proactive. This might
mean installing smoke detectors in your home and anti-theft devices in
your car. Third, increase deductible amounts (assuming you have enough
cash set aside to cover emergencies). With a higher deductible, you as
the policy holder assume more of the risk. Finally, consider bundling
your policies. Many companies will provide discounts if you sign up for
more than one type of insurance with their firm.
Transportation
Reduce
the cost of getting from point A to point B whether to work or
school or the beach and your bank account will benefit. How? Here
are three suggestions.
- Use public transit or share rides. Yes, driving your own car may be more convenient, but think of all the good books you'll read on the trip downtown.
- Turn off the air conditioner.
Studies show that using a car air conditioner increases fuel costs by
over 13%. Not so many years ago, folks opened a window when it got too
hot. Imitate your grandfather's air conditioner once in a while.
- Drive efficiently. Many studies have shown that reducing speed increases fuel economy. So take time to enjoy the scenery.
Take
a few minutes to consider ways you could trim expenses in your
household. It's one way to increase your financial security in these
difficult times. |
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