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5 Hacks to Slash Your Homeowners Insurance Rates

5 Hacks to Slash Your Homeowners Insurance Rates

There are so many additional expenses to owning a home which we never think about until we have one, and homeowners’ insurance is just another one of those payments. The average American pays nearly $1,000 annually on homeowners’ insurance, and home owners in more disaster-prone states such as Florida and Texas can see their costs spike up to $2,000 while states like Idaho and Utah average around $500.

But you do not have to head to the Rockies in order to slash your homeowners’ insurance. A few small steps and due diligence can trim your rates.

  1. Check your coverage

Once you get used to making insurance payments, you may just start sending your check automatically without thinking about what you are paying for. But while under-insuring your home can be catastrophic if disaster hits, over-insuring your home is an easy way to waste money.

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Take the time to go over your policy and see if you are being covered for something you do not have to worry about. For example, cancel earthquake coverage if you live in Boston. One key point which homeowners should check for is to see if your insurance policy covers the loss of any electronics or jewelry which you no longer own or if its value has decreased. If it does, then cancel those policies and pocket the reduced cost.

  1. Bolster your home’s security

A secure home means lesser burglaries aid fires, which means that your home is less of an insurance risk. Most insurance companies will offer a discount if you take measures to protect your home such as smoke detectors, deadbolts, a burglar alarm, or even a sprinkler system. One of the basic security measures you can take to bring down your insurance is to make sure you have good locks on all your doors.

However, a lot of these measures are expensive and can end up costing you more money than you might save with a discounted insurance policy. Before taking the time and money to add new features, talk with your insurance company about what you can do to improve your home and what discounts they will offer.

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  1. Combine your different insurances

Improving your home security is not the only way to get a discount. Many homeowner insurance companies also offer automobile or life insurance. These companies will often offer a small discount if you choose to purchase multiple policies from just them. For example, Allstate proclaims that “you can save up to 25% off your auto premiums and up to 35% off your home premiums” if you purchase both insurances from them, and most major insurance providers advertise similar discounts.

Just like bolstering your home’s security, you should check with the insurance companies to see exactly how much you can save in your situation and whether it is actually cheaper than sticking with your original plan. But this discount compared with the aforementioned security discount could save you quite a bit.

  1. Raise your deductible

The deductible is how much you are liable for in the event of damages. If you suffer damages that are less than your deductible, then you will have to pay for it out of your own pocket.

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Insurance companies obviously do not like to pay for your damages and will offer you a lower rate if you choose to raise your deductibles. This can be a challenging decision and requires you to decide whether the increased risk of a higher deductible is worth the lower rates.

But you do not have to raise your deductible to something catastrophic. Raising the deductible to $1,000 compared to the normal accepted sum of $500 will provide enough of a discount that it will be normally worthwhile. If you have the money saved up for the occasional emergency and take steps to keep your home safe, then it can be worthwhile to go for the higher deductible.

  1. Be careful about small claims

If an insurance company thinks you are more of a risk, they will charge you more. And one of the key ways in which they determine who is a risk is by the amount of claims you file. Even small claims such as a broken window can make insurers more wary about you and end up increasing your premiums.

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Remember that insurance exists to cover catastrophic losses. If you have a smaller loss which you can afford to pay back without too much difficulty, it may be for the best for you to bite the bullet and eat the cost without filing a claim. While you may not like your insurance company, you do want to keep them on your good side so that your rates stay low. Filing a bunch of small claims that do not even exceed your deductible will not keep them happy.

Featured photo credit: State Farm via flickr.com

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Published on November 20, 2018

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The truth is, there are many “money saving guides” online, but most don’t cover the root issue for not saving.

Once I’d discovered a few key factors that allowed me to save 10k in one year, I realized why most articles couldn’t help me. The problem is that even with the right strategies you can still fail to save money. You need to have the right systems in place and the right mindset.

In this guide, I’ll cover the best ways to save money — practical yet powerful steps you can take to start saving more. It won’t be easy but with hard work, I’m confident you’ll be able to save more money–even if you’re an impulsive spender.

Why Your Past Prevents You from Saving Money

Are you constantly thinking about your financial mistakes?

If so, these thoughts are holding you back from saving.

I get it, you wish you could go back in time to avoid your financial downfalls. But dwelling over your past will only rob you from your future. Instead, reflect on your mistakes and ask yourself what lessons you can learn from them.

It wasn’t easy for me to accept that I had accumulated thousands of dollars in credit card debt. Once I did, I started heading in the right direction. Embrace your past failures and use them as an opportunity to set new financial goals.

For example, after accepting that you’re thousands of dollars in debt create a plan to be debt free in a year or two. This way when you’ll be at peace even when you get negative thoughts about your finances. Now you can focus more time on saving and less on your past financial mistakes.

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How to Effortlessly Track Your Spending

Stop manually tracking your spending.

Leverage powerful analytic tools such as Personal Capital and these money management apps to do the work for you. This tool has worked for me and has kept me motivated to why I’m saving in the first place. Once you login to your Personal Capital dashboard, you’re able to view your net worth.

When I’d first signed up with Personal Capital, I had a negative net worth, but this motivated me to save more. With this tool, you can also view your spending patterns, expenses, and how much money you’re saving.

Use your net worth as your north star to saving more. Whenever you experience financial setbacks, view how far you’ve come along. Saving money is only half the battle, being consistent is the other half.

The Truth on Why You Keep Failing

Saving money isn’t sexy. If it was, wouldn’t everyone be doing it?

Some people are natural savers, but most are impulsive spenders. Instead of denying that you’re an impulsive spender, embrace it.

Don’t try to save 60 to 70% of your income if this means you’ll live a miserable life. Saving money isn’t a race but a marathon. You’re saving for retirement and for large purchases.

If you’re currently having a hard time saving, start spending more money on nice things. This may sound counterintuitive but hear me out. Wouldn’t it be better to save $200 each month for 12 months instead of $500 for 3 months?

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Most people run into trouble because they create budgets that set them up for failure. This system won’t work for those who are frugal, but chances are they don’t need help saving. This system is for those who can’t save money and need to be rewarded for their hard work.

Only because you’re buying nice things doesn’t mean that you’ll save less. Here are some rules you should have in place:

  1. Save more than 50% of your available money (after expenses)
  2. Only buy nice things after saving
  3. Automate your savings with automatic bank transfers

These are the same rules that helped me save thousands each year while buying the latest iPhone. Focus only on items that are important to you. Remember, you can afford anything but not everything.

How to Foolproof Yourself out of Debt

Personal finance is a game. On one end, you’re earning money; and on the to other, you’re saving. But what ends up counting in the end isn’t how much you earn but how much you save. Research shows that about 60% of Americans spend more than they save.[1]

So how can you separate yourself from the 60%?

By not accumulating more debt. This way you’ll have more money to save and avoid having more financial obligations. A great way to stop accumulating debt is using cash to pay for all your transactions.

This will be challenging, depending on how reliant you are with your credit card, but it’s worth the effort. Not only will you stop accruing debt, but you’ll also be more conscious with what you buy.

For example, you’ll think twice about purchasing a new $200 headphone despite having the cash to buy them. According to a poll conducted by The CreditCards.com, 5 out of 6 Americans are impulsive spenders.[2]

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Telling yourself that you’ll have the discipline to not buy things won’t cut it. This is equal to having junk food in your fridge while trying to eat healthy–it’s only a matter of time before you slip. By using cash to make your purchases, you’ll spend less and save more.

A Proven Formula to Skyrocket Your Savings

Having proven systems in place to help you save more is important, but they’re not the best way to save money.

You can search for dozens of ways to save money, but there’ll always be a limit. Instead of spending the majority of your effort saving, look for ways to increase your income. The truth is that once you have the right systems in place, saving is easy.

What’s challenging is earning more money. There are many routes you can take to achieve this. For example, you can work long and hard at your current job to earn a raise. But there’s one problem–you’re depending on someone else to give you a raise.

Your company will have to have the budget, and you’ll have to know how to toot your own horn to get this raise. This isn’t to say that earning a raise is impossible, but things are better when you’re in control right? That’s why building a side-hustle is the best way to increase your income.

Think of your side-hustle as a part-time job doing something you enjoy. You can sell items on eBay for a profit, or design websites for small businesses. Building a side-hustle will be on the hardest things you’ll do, be too stubborn to quit.

During the early stages, you won’t be making money and that’s okay. Since you already have a source of income, you won’t be dependent on your side-hustle to pay for your expenses. Depending on how much time you invest in your side-hustle, it can one day replace your current income.

Whatever route you take, focus more on earning and save as much as possible. You have more control than you give yourself credit for.

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Transform Yourself into a Saving Money Machine

Saving money isn’t complicated but it’s one of the hardest things you’ll do.

By learning from your mistakes and rewarding yourself after saving you’ll save more. What would you do with an extra $200 or $500 each month? To some, this is life-changing money that can improve the quality of their lives.

The truth is saving money is an art. Save too much and you’ll quit, but save too little and you’ll pay for the consequences in the future. Saving money takes effort and having the right systems in place.

Imagine if you’d started saving an extra $100 this next month? Or, saved $20K in one year? Although it’s hard to imagine, this can be your reality if you follow the principles covered in this guide.

Take a moment to brainstorm which goals you’d be able to reach if you had extra money each month. Use these goals as motivation to help you stay on track on your journey to saving more. If I was able to save thousands of dollars with little guidance, imagine what you’ll be able to do.

What are you waiting for? Go and start saving money, the sky is your limit.

Featured photo credit: rawpixel via unsplash.com

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