3 Ways I Save on Car Insurance

by Miranda Marquit · 0 comments

Many of us don’t like the idea of paying insurance premiums. However, the reality is that insurance can be a good way to protect your assets.

I recently moved across the country, and my state switch means that I’ve been making the rounds purchasing new insurance policies. From health insurance as a self-employed person to car insurance, I’ve been re-doing all of my policies.

When it comes to car insurance, it’s fairly easy to find discounts and savings. In fact, here are 3 ways that I save on car insurance:

1. Good Driving Record

The best way to save on car insurance is to have a good driving record. I haven’t received a traffic ticket in 14 years. Even though I was involved in an accident a couple of years ago, I wasn’t the at-fault party, and so it didn’t “count” against me for insurance purposes.

My good driving record means that I am eligible for lower premiums. (It also helps that I am female and over the age of 25.) Defensive driving is one way to ensure that you keep your car insurance costs low. I rarely speed, I am careful to observe traffic laws and I do my best to avoid dangerous practices. This conscientiousness might be boring, but it’s helped me avoid paying for tickets — and it’s helped me avoid higher premiums.

2. Multi-Line Discount

Many car insurance companies also offer other policy options. When you get additional coverage with the same company, you can usually get a discount on everything. My renters insurance is through the same company as my car insurance, and so is my term life policy.

Because I have multiple policies with my insurer, I get a discount on my car insurance. At some point, my son will drive and I will also receive a multi-car discount — although that might be offset by the fact that teenagers are notoriously expensive to insure.

If you have your policies spread out across different insurers, run the numbers. See if you can do a little consolidating and get a break on your car insurance premium. You might even get discounts on your other policies as well.

3. Good Credit

Finally, I save on car insurance by having good credit. Not all states allow insurers to use your credit history when determining your insurance premium, but I have been fortunate to see discounts on my car insurance just because I have good credit.

Some insurers view a good credit reputation as an indicator that you are generally responsible in multiple aspects of your life. This can translate to lower costs for insurance in some cases. I find it’s helped me, and it’s something that I am lucky enough to be able to control.

There are other ways to get discounts from your insurance provider. As you shop around for car insurance, find out what discounts are available, and what you can do to reduce your costs. From healthy living (for health insurance) to a lack of claims to the way you manage money, you might be surprised at the ways you can lower your costs while still protecting your assets.

Running a Home Business? Don’t Miss Out on These Tax Deductions!

by Miranda Marquit · 0 comments

One of the great things about running a home business can be the low overhead costs. Depending on what you’re doing for income from home, you can usually get away with small expenses. Even better is the fact that there are tax deductions available to you when you have a home business:

Business Use of Your Home

First of all, if you have a dedicated area for your home business, you can deduct its cost. This can be a percentage of your mortgage payment or rent payment. You can even deduct a percentage of your utilities. New rules for deducting your home office on your taxes make it even easier, offering a flat rate deduction. You can consult with a tax professional to decide whether to figure your deduction based on a percentage or based on the flat rate.

Office Supplies and Equipment

You can also deduct the office supplies and equipment that you buy for your home business. It’s important to understand that you need to keep good records, as well as make sure that you use the supplies and equipment only for your business. You aren’t supposed to deduct items that you use for personal purposes as well. Your business tax deductions should be based on what you use in your business.

Insurance Costs

If you are paying for your own insurance as a result of being self-employed, you can deduct some of those costs. I am able to deduct a portion of my health insurance since I pay for that as a result of running my own business. There might be other insurance costs that you can deduct as well. Check with your accountant or other tax professional to determine what costs are tax-deductible.

Trade Association Memberships

Joining a trade association or professional organization can provide you with networking opportunities and other business benefits. If you join an organization related to your business, you might be able to deduct the cost of the membership. Local membership in town that can help you advance your business, such as a membership to the Chamber of Commerce, might also be tax-deductible.

Travel

Even travel can be tax-deductible, as long as you are traveling for business purposes. When you travel to meet with a client or a vendor, or if you travel to attend an industry conference, you can deduct many of your costs. Airfare, hotel costs and even ground transportation costs can be deducted from your business income. It’s even possible to deduct a portion of your meals. In order to make these deductions, you should be sure that you are clearly traveling for business purposes and that you keep the receipts and other records.

You can deduct a portion of business meals that you eat with clients and partners as well. However, it makes sense to keep the receipt and make a record of who you met with and what was discussed. You need to show the IRS that you really have been benefiting your business with your choices.

In the end, it’s possible to deduct quite a bit when it comes to your home business. But, when in doubt, double-check and make sure you have good records.

Confession: The Debts I Continue to Carry

by Miranda Marquit · 0 comments

In the world of personal finance bloggers, I’m something of an anomaly. While I think that paying down most debt as quickly as possible is a good idea, there are some debts that I refuse to get rid of early. There are types of debt that I think are worth carrying, rather than using my resources to pay them off ahead of time.

Low-Interest Rate Environment

To the chagrin of many savers, we are currently in a low-rate environment. This means that money is cheap. For savers, that means it’s harder to find a good yield. For borrowers, though, it means that it’s possible to get what you want for less.

Some of the loans that cost less right now are mortgages and car loans. (Paradoxically, student loans cost more now than they did before the financial crisis.) I currently have a car loan with a rate of 1.9%. I was also fortunate to consolidate my student loans and lock in an interest rate of 1.9% before the financial crisis. Because I have these low, low rates on my loans, I am in no hurry to pay them back. The student loan has the extra benefit of being tax-deductible, so it costs me even less.

Another loan that might not be worth paying off early is your mortgage. Many mortgage rates are at near-historic lows, below 4%. That’s pretty good, and if you itemize (like I did when I had a mortgage), you can benefit from a tax deduction.

These loans with super-low rates might not be worth paying off when you consider what else you can do with the money.

Investing Instead of Paying Down Debt

Rather than putting my resources into repaying loans (a guaranteed return of 1.9%), I put the money I would have used to pay off that debt early into investments. Most of my investments are modest, offering 6% or 7% annualized return. But, as you can see, that still beats the interest I’m paying on my debt plus average annual inflation. It’s true that there are going to be down years for my investments, but averaged out over a long period of time, I’m likely to come out ahead. It’s a risk I’m willing to take for the better chance of a higher return on my money.

It’s important to note that this thinking won’t work with high-rate debt. If you have high-interest credit card debt, it’s almost always much better to pay it down as fast as possible. It’s reasonable for me to expect a 6% annualized return on my index fund investments. It’s not reasonable to expect a sustainable 17.99% return that will beat what you pay on your credit cards. In fact, if you have one of the more expensive student loans and are paying 6% or more, it can make sense to retire those loans as quickly as possible.

Finally, don’t forget to factor in peace of mind. I’m comfortable carrying low-rate debt for my car and education. Some people just like the freedom of being debt-free, and there’s nothing wrong with that. That’s something you can’t put a price on, so it makes sense to pay off debt — even low-rate debt — quickly if it helps you sleep better at night.

Using Taxable Investment Accounts to Save for Goals

by Miranda Marquit · 0 comments

One of the difficulties of being a saver in a low interest rate environment is the fact that you don’t receive a good yield for the money in your account. In many cases, the money you are saving for use during emergencies or for short term goals like travel or a down payment on a home isn’t meant to provide you with a good yield. The priorities for such money are usually liquidity, accessibility and safety.

However, if you can stomach the risk involved, you can increase your chance of a higher yield by keeping money for such goals in a taxable investment account.

Better Returns Until the Money is Needed

I actually use taxable investment accounts for my savings goals. I contribute regularly to an account that serves as my emergency fund, as well as to an account that I recently started as a travel fund. These accounts offer the potential for much better returns than what I see when I contribute to the “regular” savings account with a much lower return. (The money contributed to the “regular” account is meant for paying quarterly taxes, so I like it to be readily available with the capital not at risk in any way.)

This allows my money to grow at a better rate until it is used. In the case of the emergency fund, I like that it has the potential to keep growing for years. I continue to add money to it each month, and it grows through investment returns as well. With my travel fund, I expect to use the money a little more regularly, but I will keep replenishing the account with automatic contributions. Once again, I have the potential realize better returns on the money, boosting the amount I have available to use for travel down the road.

The flip side, though, is the risk. With recent volatility in the stock market, it’s easy to see how it can be nerve-wracking to keep money for your goals in an investment account. I try to limit some of the risk by using index funds and ETFs, as well as by using a slightly larger allocation of bond funds than I use in my retirement account.

Tax Deductible Spending

Another reason I like this arrangement is due to the potential for tax deductible spending. The last time I had to use the money in my emergency fund, I had to sell some of my shares at a loss. Because of how much I had in the account, it didn’t significantly deplete my fund, so it didn’t bother me. In fact, I was able to get the capital I needed to for the emergency, and then, because of the loss, I was able to gain a tax deduction for the investment loss. I haven’t used my travel fund yet, but if I have to sell at a loss, I will have another tax deduction. The prospect of being able to cover my costs, and get a tax deduction to boot, helps reduce some of the potential pain involved in selling at a loss.

This method isn’t for everyone; you should carefully consider your risk tolerance and your financial situation before employing such a strategy.

Getting Health Insurance When You’re Self-Employed

by Miranda Marquit · 0 comments

I’ve been self-employed for 10 years. Up until last year, I had to pay for individual health insurance because my husband didn’t have a job that offered benefits. Last year, though, he started a new job with benefits, and I found out what it’s like to have access to employer-subsidized health insurance. It was great.

Now, with my circumstances changing again, it’s back to being responsible for my own health insurance. I’m not looking forward to the process, but I know it’s possible to get good coverage at an affordable cost, especially since my son and I don’t have a lot of health care costs.

Start with the Health Care Exchange

One of the first stops I’m making on my quest for self-employed health insurance is the health care exchange. Even though I’m pretty sure we don’t qualify for subsidies to help cut costs, it’s still worth it to compare costs and coverage and to see what is available to us. This option didn’t exist 10 years ago when I first started buying health insurance for my family, and I’m glad that there is something like this now.

Check with Other Insurance Aggregators

Of course, the health care exchange isn’t the only place to look for health insurance. There are a number of health insurance aggregators out there that will help you find a policy that meets your needs. Enter your basic information and different options with different premium amounts will appear. You can compare those options with what is available on the health care exchange.

Consider a High-Deductible Plan

One of the things I’ve noticed about employer benefits is that they often cut the cost of health insurance by about half. As a self-employed person, any advantage you can find is worth pursuing. In my case, a high-deductible plan and a Health Savings Account makes the most sense. My son and I don’t need a lot of health care services, so a high deductible doesn’t really affect us. We can save money each month on premiums and put the savings into a tax-advantaged HSA. This option doesn’t make sense for everyone, so carefully consider your needs before moving forward.

Don’t Forget the Tax Deduction

If you are paying for health insurance as someone who is self-employed, you should be able to deduct a portion of what you pay in premiums on your taxes. While this won’t completely offset the cost of your coverage, it will take away some of the sting. Don’t forget that your HSA contributions are tax-deductible as well. If you qualify for the HSA, you can benefit a little more.

Having a tax deduction isn’t as great as having an employer subsidize a significant portion of the health care costs, but it’s better than nothing. And, as a self-employed person with no intention of giving up freelancing, the tax deduction is one way to reduce my health care costs.

It’s possible to obtain health insurance as a self-employed person, and there are some ways to make it more affordable. But you should still be careful as you consider your options and do your homework so that you get the best possible coverage for the lowest possible price.

Could You Streamline Your Finances with Online Banking?

by Miranda Marquit · 0 comments

One of the ways that I manage my money more effectively is to use online banking to help keep on top of my bills, as well as to ensure that I get all the information I need from my financial institutions. According to the 13th Annual Fiserv Consumer Trends Survey, I’m far from the only person to use online banking. About 80 percent of households with Internet access use online banking.

How Online Banking Helps Your Finances

Online banking is great for your finances because it helps streamline the process, and can even help you avoid problems that can come with hard copies in the mail. Here are some of the ways that online banking helps me better manage my money:

Automatic bill pay: Automation is one of my favorite aspects of online banking. I don’t have to worry about remembering to pay my bill because it is done automatically. This is especially helpful when I travel. I don’t have to worry about missing payments when I’m out of town because it’s taken care of.
Online access from anywhere: I also like the ability to check my accounts no matter where I am. It’s possible for me to check my balances, monitor my accounts for fraudulent charges and make needed transfers when I use online banking. While you do need to be careful about using public Wi-Fi and other networks when you are away from home, you can usually find someplace secure to check you accounts and engage in banking.
Electronic statements: I like receiving electronic statements for my bank accounts because it makes it easier to ensure that I receive the information. There is a lot that can go wrong with a hard copy statement delivered to your mailbox. This is especially true when you move. After moving across the country twice in less than a year, it’s nice to know that all of my information comes right to my email inbox, rather than experiencing worries about forwarding and theft. This is also helpful when it comes to bill pay, since I don’t have to worry about missing things when I move.

Keeping everything straight is one of the best features of online banking. It allows me to quickly see where I stand, and make efforts to keep up to date with my bills and other obligations. With online banking, you can also stay on top of payments so that you don’t end up missing payments and seeing your credit score negatively impacted.

Pitfalls to Avoid with Online Banking

The biggest pitfall to avoid comes with automation. What happens when you automate your finances, but your cash flow doesn’t match? Make sure that the money will be in your account when the bills are due. Automating doesn’t mean you ignore your finances.

Another concern is what happens if you switch banks. You will need an accurate list of all the accounts you have so that you can change the payment information. You can run into trouble if you miss a transaction that tries to withdraw from an account you have closed.

Online banking can be a great way to manage your money and stay on top of your finances. As long as you properly plan, it shouldn’t be a problem.

Making Time for What’s Truly Important

by Miranda Marquit · 0 comments

One of the things I’m working on right now is the attempt to make time for what’s truly important in my life. What do I want to do with myself? I’ve had to rethink my entire life, thanks to the circumstances that led to my second cross-country move in a year.

I left a lot of stuff behind when I moved, but I’m also trying to decide what non-tangible things I should leave behind. I’ve got some emotional baggage that probably ought to be unloaded, and there are a number of habits that I think I want to get rid of as well. On top of that, there are some things that I think are really important that I want to work on.

As I’ve lived out of a suitcase for the last six weeks and tried to decide what to do next, I’ve been considering how I can make time for what’s truly important. Then I realized that I probably already have that time available to me. I just haven’t been using it very wisely.

Are Distractions Eating Up Your Time?

After spending time on the road, and being without a schedule, and spending time with family and my son, I realized that there are a lot of distractions eating up my time. Most of these distractions come in the form Internet rabbit holes. I get stuck on Facebook, or I go off on a tangent when I should be researching information for an article for my work. It also became apparent that I was letting entertainment (but not even entertainment I really care for) get in the way.

Plus, I found that I was distracted by obligations I didn’t care about. I spent a lot more time than I needed to worrying about what other people thought, and trying to make things work around others’ schedules. While it is sometimes important to re-arrange my own schedule to help those I care about, sometimes I was doing way too much of this for inadequate reasons.

Moving has allowed me to identify the distractions impacting me and my time and think about cutting them out. In fact, I am cutting them out and moving forward.

Putting Purpose First

I also decided that it was time to move forward with purpose. I realized I was treading water for the last two years, and I didn’t really have something to work toward. Sure, I was writing and providing for my family. However, I didn’t have another purpose, and I was just maintaining the status quo. Now I’m in a position to live with a little more intention. I want to be able to develop my talents a little more, and I want to feel as though I’m contributing to my community.

Plus, looking at how my son’s extracurricular activities are sure to pick up has me thinking about making sure to have time to support him — because that’s important to me. Restructuring my life hasn’t been easy, and it’s still a work in progress. But I’m finding time for what really matters in my life, and I feel better about things in general. And that’s something to be happy about.

What Do You Use Coupons For?

by Miranda Marquit · 0 comments

One of the best ways to maintain a frugal lifestyle is to use coupons and discounts in your every day shopping. The good news is that you have more options than ever when it comes to using coupons. Forrester Research recently released a study that indicates that digital coupon use is on the rise, and that different generations are more likely to use coupons for different items.

How Do You Use Your Coupons?

I’m a big fan of using coupons when I go out to eat, and also for things like movie tickets and amusement parks. It wasn’t surprising, then, to discover that younger consumers are more likely to use coupons on travel and entertainment. When I look for discounts, I frequently look for promos related to hotel stays, car rentals and activities like museum admissions.

However, the older generation is more likely to use coupons for food and beverage purchases. They are more likely to see coupons as tools to help them save money when they go to the grocery store. I rarely use coupons at the grocery store. It seems like a lot of effort to spend the time to look through coupons and sales fliers for the hope of saving $5 on groceries.

Digital Coupons and Smart Phones

Another interesting finding of the study indicates that digital coupons are increasingly popular, and many consumers like the idea of being able to store coupons on their smart phones. Digital coupon redemption increased by 141% from 2012 to 2013. I like digital coupons because I am more likely to shop online, so having digital coupons handy to save money makes sense. On top of that, I often book my travel and entertainment (including for movies) online. Digital coupons and promo codes make it easy for me to reap the savings when I am doing my shopping.

I haven’t tried using coupons in my digital wallet, though. While I often store movie tickets and airline boarding passes on my smart phone, I haven’t tried redeeming coupons this way. However, it looks as though there more consumers are using mobile devices as part of their couponing strategies. Apple’s Passbook application, along with Google Wallet, are two places to store coupons so that they can be retrieved at the grocery store.

On top of that, there are mobile apps that help you search for and save mobile coupons on the things that you are most likely to buy. This can be a very convenient way to store and manage coupons. Some apps will even automatically delete expired coupons so that you don’t have to do it yourself. On top of providing coupons, it’s also possible to find apps that will alert you to deals, help you compare prices, and perform a number of other helpful money-saving functions.

While I use digital coupons online, I have yet to use them in conjunction with my smart phone when I go to the store. However, if I can find an app I like, and that makes sense for me, I might start employing this easier (and less time consuming) way to save money.

How to Decide Which Things to Leave Behind

by Miranda Marquit · 0 comments

I’m in the midst of my second cross-country move in less than a year. As a result, I’ve had to, once again, decide which items to leave behind. This process was made a little easier due to the fact that we didn’t buy much while we were living in Pennsylvania, and we had discarded close to 75% of our belongings when moving from Utah.

However, the reality of the situation once again has me considering what to keep and what to leave behind. In our consumer culture, it’s easy to think that we need to keep a lot of what we have — and it’s also easy to keep adding to our belongings. Two moves have taught me that maybe I don’t need as much stuff as I thought. In fact, as I get ready to set up house once again, I’ll be pausing to reflect before replacing some of what I left behind.

Is It Necessary?

One of the first things to ask yourself before keeping something is whether or not it is necessary. I left behind sets of pans because I know that one set of pans is sufficient for what my son and I do in the kitchen. There’s no reason to have duplicates of our well-made pans and other dishes. The same can be said of many of the things that we keep in the house, from bedding to old, unused electronic gadgets.

I also like to consider whether or not something is useful. While some things that I keep are beautiful and perhaps not useful, most of what I like to keep has some purpose. If it’s not something I’m going to use, and if it isn’t part of my emergency supply, I’m more willing to leave it behind. I’m pretty minimalist when it comes to furniture these days, preferring only to keep what I know I’ll use. This has the added advantage of opening my living space and allowing it to feel less cluttered overall.

What About Sentimental Value?

While there are certainly items that might have some sentimental value, the reality is that I don’t actually need to keep these items, and some of them are connected to the same events. If there is something I really enjoy looking at, or that is associated with a treasured memory of a lost loved one, I’m happy to keep it. However, I only need one item to represent many of these memories or people. I can leave the rest behind as I move forward.

Simple Collections

Finally, I like to focus on simple, inexpensive collections that don’t take up space. My son and I began collecting refrigerator magnets because they are inexpensive, easy to transport and can be a fun way to remember a trip without getting crazy. I started getting rid of collections that just took up space and were expensive. Now the things I collect are easy to manage and don’t cost very much, and have been getting rid of everything else.

It can be difficult to decide what to get rid of. However, when you are forced to make choices, you have the chance to reduce your own consumerism and save more money in the future.

Insuring a Teen Driver? Get Ready to Pay

by Miranda Marquit · 0 comments

My son turns 13 this year. As I consider what it means to have a teenager, I’ve also been thinking about what comes next. And, even though the event is still three years away, I’ve been considering the reality that my son will be driving soon.

As children grow, it’s clear that they become more expensive. Extracurricular activities cost more, and they never seem to stop eating, putting strain on your grocery bill. But it’s the car insurance that you might really need to plan for when it comes to budgeting for your growing teen.

According to research from InsuranceQuotes.com, adding a 16-year-old to your policy can result in a 96% spike to premiums. While the impact decreases over time, it’s still only a decrease to 60% by the time your teen reaches age 19. That’s pretty substantial.

Another consideration is the gender of your teen. Because I have a son instead of a daughter, I can expect to see higher rates than otherwise. While there are some states that don’t allow insurers to consider gender, the state I’ll be living in — Idaho — allows insurers to charge more for males than females. As a result, I’m likely to see a higher average increase in my premiums when my son starts driving.

Blunting the High Cost of Insuring Your Teenager

There are ways to reduce the cost of a teen driver when it comes to insurance. First of all, encourage your teen to drive responsibly. Accidents and traffic tickets only mean higher rates down the road. Over time, experience can lead to lower premiums when it doesn’t involve unsafe situations.

Another way to reduce the cost of insurance for a teen driver is to ask for a good student discount. Many insurers offer discounts to students that maintain good grades that average a B or higher. If your student manages to get even better grades, you might be able to see a bigger discount. A good student discount won’t completely offset the higher cost of insuring your teenager, but it can blunt some of the financial pain.

You can also encourage your teenager to take ownership of the situation. Make it clear that any increase to insurance premiums that come as a result of your teen’s behavior when driving has to come out of his or her pocket. So, if your child gets a speeding ticket and the insurance premium goes up by $50, that’s something your teen is responsible for. Many teenagers are more likely to behave responsibly if they know that they will have consequences to their actions — especially if money is involved.

It’s also possible to provide a reward. If your policy offers a good student discount, make it a point to provide your teen with some sort of compensation for helping keep the insurance rates lower. You can split some of the premium savings with him or her. This provides an incentive for your child to maintain good grades as well as make efforts to drive responsibly.

While there is likely no getting around the higher insurance costs of a teen driver, there are some things you can do to reduce the pain and ensure that your budget isn’t completely overwhelmed.

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