Renting an apartment or home might be a rite of passage in college, but as the housing market continues to go up and down and homeownership seems impossible for some, renting a home is the way to go. But, just like homeowners, you still can and need to protect your things, and renters insurance shouldn't be one of those items on your to-do list that goes on the back burner.
Renters insurance should be the least of our concerns as college students, but the hard truth is that things happen and we should be prepared. Just like you would save your term papers after every other word in hopes of not losing all that work, just as effortless is insuring your possessions.
Jeni Bowen of Tuscaloosa, Ala. rents a home and leases a building for her business. She says renters insurance is a must-have these days. "I wanted to get renters insurance to eliminate any sort of catastrophic liability," she says. "We did not have to list specific items and were able to get $100,000 (coverage) on the business and $75,000 on our home, at just a fraction of what our lease amounts are. It's really rather inexpensive."
Most larger insurance companies offer renters insurance that protect your stuff from fire, smoke damage, water damage, theft, building collapse, and even plumbing or air conditioning repair. You can even add a policy that provides coverage in the event of identity theft.
As we've seen through the countless Flo/Progressive commercials, some insurance companies offer discounts if you have multi-lines of insurance through them. So, whoever insures your car might offer you a discount for opening a renters insurance line with them as well.
Still think renters insurance isn't for you? Well, think about this. Your hard-partying upstairs neighbor comes home after a night out and either leaves the shower running or the toilet overflows -- only their apartment isn't the only one flooded. You wake up the next morning to find your electronics and clothes have been soaked through and ruined. Without renters insurance, it's up to you to replace all of these items out of your own pocket. Good luck getting any help from the landlord or your neighbor, because, guess what, they're not liable. You could try to take them to court, but simply having renters insurance is a lot easier and cheaper.
Craig Wiggins, an Allstate agency owner in Huntsville, Ala. believes this type of insurance is one of the most overlooked. "Many people who rent underestimate the importance of renters insurance," he says. "Many people think they don't have enough contents to insure, which most of the time is incorrect."
Another plus with having renters insurance is that you can also cover individuals, not just your things. So you can have all of your bases covered should someone fall down your stairs and break an arm or leg… and coverage won't cost you and an arm and a leg. "Renters insurance is very inexpensive and can be a life changer for someone who, many times, does not have a lot of savings to fall back on," Wiggins adds.
Renters insurance will you give you that peace of mind, so you can just worry about the tough semester you're having, finding a great job, or the project at work. You might even impress mom and dad (and your spouse) with your responsibility.
You may be able to save on car insurance in 15 minutes, or even in seven minutes, if you are willing to change insurance companies. What if you like the service you currently receive but just want to pay less? There always seems to be an excuse every renewal period why your premium went up a few dollars more a month. For the frugal-minded, like myself, I think about how those few dollars would be better left in my favorite high-yielding savings account. There are ways you can combat those renewal increases without changing your current coverage.
Get a quote online.
Pretend you are a new customer and get an online quote at your current carrier's website. Compare the quote with your renewal rate. I filled out their questionnaire and received a quote reference number with a lower rate. With that reference number, I called my carrier and asked why the quote is significant lower than my renewal rate. If your carrier doesn't have the disclaimer "only for new customers" associated with the online quote, they must give you that lower rate.
Telecommute? Less liability means more money in your pocket.
If you drive your car less than average, you should get a break on your rate. For example, I work remotely one day a week. Since my yearly mileage decreased, my carrier decreased my rate.
Check your discounts every renewal period.
Don't assume your car insurance company has applied all discounts to your account. It is your responsibility to ensure all applicable discounts are applied. Every renewal period, give your insurance carrier a list of all your memberships. Both my alumni association and professional organization provides discounts with my carrier. I make sure if I can only have one discount, they apply the largest one out of the two.
Clean record? Show me the money!
Every car insurance company has a good driver discount. Every year of no claims, you should be rewarded. Make sure they apply that discount every renewal period.
Use one carrier for all your insurance needs.
You need insurance for your car and house or apartment. Why not bundle? I get a discount just by having multiple items covered by the same company. They want your business, so negotiate a great rate for all your insurance needs.
Cash talks! Pay upfront and save in the long run.
If you had cash to buy a car, you can negotiate a much better deal than sticker price. Car insurance is the same. When you pay monthly, you are paying a service charge to process each payment. Save that money and pay yearly or every six months.
I save hundreds of dollars every renewal period. A great company will want to keep you. If none of these methods work for your car insurance carrier, it may be time to save hundreds on your car insurance by switching.
It may seem counterintuitive, but you can save money on your wedding by having a destination event. My fiancé and I learned this when we chose to have our wedding in Maui in September. How? These five steps can help you keep the budget lower than a hometown celebration:
- Pare down the guest list. This is easier to do at an out-of-town wedding, because you can explain to others that you want an intimate celebration with just close family and friends. With a traditional wedding, you may feel obligated to invite acquaintances you see often, co-workers, distant relatives, parents' friends, and significant others of guests. With a hometown wedding, 20% of invited guests won't be able to make it, according to Martha Stewart Weddings, but The Knot Guide to Destination Weddings says that for a destination event that number surges to 50%.
- Focus on the big picture. A perk of destination weddings can be a picturesque setting. Let the backdrop be the decor. No one will remember the place cards when you have waves crashing on a beach or the splendor of a canyon behind you during the ceremony. Also, Hawaii beach weddings often don't have a venue fee other than the cost of a permit, which is generally less than $50. Many national parks allow weddings for the cost of a permit as well. In our case, we initially chose a beach wedding but ultimately decided to use a private lawn overlooking the ocean, which cost us just $325, including the rental of white chairs.
- Get a package. Research coordinators at your destination who can offer packages containing the necessary vendors for a price within your budget. We selected a collection priced at $2,295 before tax, which covers the officiate, a coordinator the day of the wedding, two toasting flutes, a musician for the ceremony, photography and 30 prints, videography, marriage license appointment setup, a bouquet, leis for the bride and groom, a boutonniere, in-room hair and makeup, limo transportation for two hours, a keepsake wedding certificate, and a written copy of our vows. Our package allowed us to take items off the package if not necessary, such as we did with the limo (which reduced our cost by $175). The great thing about packages like this is that a coordinator will direct the vendors on the day of your wedding, so you don't have to worry. Had we chosen to have the wedding at home, we would have had to shop for each vendor separately and without the coordinator's discounts.
- Have a dinner-only reception. Make reservations at a nice local restaurant, rather than reserve a venue. Eateries often have private dining areas that can accommodate wedding parties. Our wedding dinner venue has three semi-private and private areas and had several menus to choose from. We'd considered having the wedding at Heritage Square in Phoenix. The site rental fee alone would have cost $3,500. That's in addition to catering costs and rentals. Our dinner will cost much less, at about $1,000 including the cost of the cake for less than 20 people.
- Travel in the off-season and ask for group rates on lodging, airfare, and car rentals. Our wedding is in September, the tourism off-season in Maui, so hotel rates when we booked were much lower. One of our hotels was $195, compared to more than $270 in the regular season. This trip will also be our honeymoon, so there are no extra costs for travel.
While a destination wedding isn't cheap, a hometown wedding would have cost us a lot more. Consider whether your situation will allow a more intimate, hassle-free celebration for less. It can be worth it to create vacation memories with the ones you love most.
Business Insider estimated at the end of 2013 one in every five people in the world owned a smartphone and one in every 17 owned a tablet. With that kind of technology so widely available, it seems like there's an app for everyone and everything. Managing your personal finances from your smartphone or tablet couldn't be easier with the help of an abundance of budgeting bill-paying apps out there – and most of them are free. But are they all they're cracked up to be? Let's look at some facts, and then you can decide for yourself.
Apps are sunny because:
- They're convenient. Your accounts are available 24/7, right at your fingertips, and easily accessible if you go out of town.
- There are apps that will alert you about paying bills on time. BillMinder (available for iOS at $1.99 and Android at $2.99) will send you push notifications. Some apps like Check (free for iOS and Android) will even help you set up automatic payments.
- Apps can help you with budgeting. Level Money helps track cash flow and is available for free for iOS and Android.
- You don't have to make a phone call or be physically present every time you want to transfer money between accounts.
- It's easier to see a general overview of your accounts and make sure everything looks okay, and it's easier than ever to spot fraudulent activity. A general overview of your accounts is also handy to get a feel for where you're spending the most money.
- It can be easy to see if you've been paid, a check has cleared, or money has deposited into your account.
- With less people balancing a physical checkbook these days, it's easy to forget when and what you've spent your money on. Fortunately, there's even a check register app called Balance My Checkbook, which you can download free for iOS.
- Many personal financing apps can be used to locate ATMs.
But they're not always lemon drops and roses:
- There's a chance an app you really want to try isn't available for your device. Since most apps come from tiny startups, it's a struggle (both monetarily and physically) to make the same app for multiple platforms. If an app was originally developed for iOS but is also available for Android, its Android counterpart most likely won't have all the same features because Android apps are harder to develop.
- If you're in an area without cell phone service or a wireless connection, there's a good chance you won't be able to access your accounts, which makes the app kind of useless.
- Most finance-managing apps will log you out after 10 minutes of inactivity, which can be either helpful or frustrating, depending on if you're still using the app.
- Trust and security can be a concern – especially about using secure network locations or finding fraudulent activity on your accounts. Mobile devices don't really have the same levels of traditional security that computers do, such as encryption and firewalls.
- People have a tendency to not log out of apps or have an app save their username and password, and if their device is lost or stolen, it could be problematic down the line. Even if your app logs you out after 10 minutes, a lot can happen in such a short amount of time.
- New apps can be buggy and often take some time to fix, so it's important to take into consideration the customer feedback of an app before downloading it. If it doesn't have a high rating, it's probably not worth the download.
It seems like the pros outweigh the cons, but ultimately, each person is different in what they want in personal finance management. Get out there and test out a few to see if one or more will help you out.
I'd always dreamed of driving an SUV, a sleek, black 4x4 with runners and navigation. I saved my down payment, and I trekked down to the local dealership. I knew I could afford the payments for a newer model, and I knew what kind of interest rate I'd be eligible for, because my credit score was pretty good. What I failed to calculate was my insurance payment. At the time, I had no idea that the make, model, year, and even the color of the vehicle I chose could effect my insurance payments.
I made it to the dealership, and the SUV I thought I could afford was a little more than I wanted to pay. They had an older model that I could afford, but I thought I'd take a look at a sedan as well. I was between a 2009 sedan and a 2006 SUV. I chose the sedan. Though happy with my choice, I wasn't very happy when I found out I would have lowered my insurance payment with the SUV. I figured the sedan would be less because it was a newer vehicle, had better safety features and, well, it was a car instead of an SUV. I tried multiple insurance agencies and ended up with the same result. For the same coverage, I would have paid about $78 monthly for the SUV, but instead, I was paying $113 for the sedan. Now let's say I was looking at the same vehicles, but this time, the same year. In this case, I'd pay more for the SUV – an increase of about $60 per month.
This is not the only factor that affects the amount you shell out for insurance, however. Most of the time, it's advantageous to save up six months' worth of payments. Insurance companies will give you a monthly quote, and a "paid in full" quote. If you pay in full, you'll nearly always save some money. For example for that sedan of mine, I was quoted $88.66 per month for six months. If I chose the "pay in full option," my total cost would have been $453.82, a savings of $83.01. Other factors (while potentially uncontrollable depending on where you are in life when you buy that car) like marital status and occupation can affect your insurance premiums as well.
When shopping for a car, don't forget to do your research on the insurance. If you want to stick with a budget, it's best to get quotes from multiple companies, and consider factors like make and model before choosing a vehicle. That hybrid might start looking better and better.
If you live in a place where public transportation is virtually non-existent, you probably either own a car or are looking into buying one pronto. But if you're a city dweller, you may want to think twice before jumping into car ownership – especially when you have the option to rent.
Sure, owning a vehicle can be tempting. When you own a car, you don't have to worry about reserving one in advance, and you can pick up and go as you please. But if you're dealing with limited funds (and really, who isn't these days?), renting may be the smarter choice.
Vehicle usage. Do you drive to work or take public transportation? Do you need access to a car on a weekly basis? Or is your need for a car limited to big shopping trips and occasional weekend excursions? Some costs associated with vehicle ownership – like insurance and monthly or yearly parking fees – are a given, even if you don’t use your car very often. If you don't drive on a consistent basis, renting might make more sense.
Vehicle storage. In big cities, parking can be a hassle, and the cost of a monthly parking garage can easily top the $300-mark depending where you live. By renting a car as needed, you'll avoid the parking wars and headache.
Finances. Do you have the money for a down payment? Can you swing a monthly payment? And don't forget the cost of car insurance and maintenance. Sure, daily car rental rates might seem expensive at first glance, but consider the aggregate cost of owning versus renting when you're not using that car all the time.
Suppose you typically need a car one day per month. Zipcar, the world's leading car sharing network, charges $79 a day for a vehicle in major U.S. cities, and that includes gas, insurance, and 180 miles of usage. Membership involves a meager $25 application fee and can cost as little as $6 per month. If you rent a car once a month over the course of a year, you'll spend just over $1,000 all-in. Need a car twice a month, or 24 times a year? With Zipcar, you can swing it for just under $2,000.
Now let's assume you opt to buy a car instead of renting. In a major city, you can easily pay $2,000 or more in yearly insurance costs alone. Then there’s routine maintenance. According to 2010 data from the US Bureau of Labor Statistics, the average yearly cost of maintenance and repairs was close to $800. Even if you cut that in half to account for decreased usage, you’re still looking at $400 annually. Oh yeah – and then there's that whole matter of a car payment, which can be anywhere from $250 to $500 a month depending on the type of vehicle you buy, the amount you put down, and your financing terms.
The bottom line: If you have access to public transportation and don't need a car for everyday use, renting is likely the most cost-effective option. Before you buy, think about the logistics of vehicle ownership and crunch some numbers. You may be surprised by how much more convenient and affordable it is to rent.
Holding onto money is no simple task. Between student loans, car payments, late-night pizza cravings, and of course your Netflix account, it may feel like your hard-earned dollars disappear. However, you may not know it, but you have a secret weapon when it comes to saving money, and it may be in your back pocket: your smartphone. Check out these FREE apps that save money, available with the iPhone and Android.
Nobody likes paying more for gas than they have to. GasBuddy helps you locate the least expensive gas station in your area, taking the guess-work out finding the least expensive pump.
This app helps find the lowest price on items you're thinking about buying. If you're at a store contemplating a purchase but aren't sure if you're getting the best deal, simply scan the item's barcode with your smartphone using the RedLaser. Once you've scanned the item, RedLaser will do the research and alert you if another store sells your item for cheaper.
If you always dread the checkout line at the supermarket but can't bring yourself to start clipping coupons, you need this app in your money-saving arsenal. Grocery IQ makes grocery shopping a lot less painful by saving you time and money. This app not only saves your virtual shopping list in its database, but it can even organize the list by aisle. Best of all, this app helps you make sure you're getting the best deals possible by comparing prices at grocery stores and finding you coupons for the items on your list.
Perfect for anyone who loves to shop online, this app helps to make sure you're paying less for your purchases. Downloading RetailMeNot gives you access to coupons from hundreds of retailers. This app also lets you save your favorite stores and will alert you with every new deal and discount. RetailMeNot isn't just for virtual shopping, however, and you can search for coupons redeemable in stores and show your phone at checkout to get a great deal.
Mail-in rebates on in-store purchases can be nothing more than a hassle. However, the Ibotta app changes all of that, helping consumers redeem their rebates in the easiest way possible – with their smartphones. This app uses shoppers' receipts to track what rebates are available, and gives the shopper a rebate after doing a simple task (taking a quiz, watch, a commercial, write a review, etc). Once a total of $5 in rewards has been earned, Ibotta deposits the rebate via PayPal.
Who says your smartphone is only good for sending Snapchats and playing Candy Crush? By downloading the right apps and using them during your daily purchases, you could reduce your spending and keep more money in your wallet. Take advantage of all of the money-saving tools your smartphone has to offer, and watch your savings grow.
After the coldest winter in decades, my house was worse for wear. The frigid temperatures caused my flagstone front porch steps to crumble and my retaining wall to collapse. While a lot of homeowners would have paid for the renovations by adding them to their mortgage, I was able to pay without going into debt.
Establishing an emergency fund
When I woke up one morning and found two inches of water in my basement kitchen, I knew I was going to have to spend a pretty penny on home renovations. Fortunately, I already had an emergency fund with $15,000 set aside.
It's generally recommended you put aside enough emergency funds equal to three to six months' living expenses. Having that much money set aside may seem a little on the high side, but as a single first-time homebuyer I wanted to err on the side of caution. When I purchased my house in August 2012, I decided to stash $15,000 aside in a high-interest savings account for a rainy day. And boy, am I glad I did.
Dealing with contractors
My house repair bills started to pile up in January, smack-dab in the middle of winter. I had no idea how much a new front porch and retaining wall would cost, so I started phoning around for estimates. I phoned five contractors for estimates and received amounts ranging from $3,500 to $18,000 for the same job.
When selecting a contractor, take the time to meet them in person, ask for references and check for complaints online at the Better Business Bureau. Remember, the lowest estimate often isn't the best. You want to avoid fly-by-night contractors who will take your money and run.
Fast-tracking my savings
It was January, and the work couldn't start until early May when the weather was warmer. On top of a new retaining wall and front porch, I decided to get a sidewalk and new eavestroughs. That increased my renovation bill to nearly $25,000, leaving me $10,000 short. That gave me four months to sock away enough money to make up the difference.
I worked my fingers to the bone by working 20 hours extra a week for four months and managed to save an extra $6,000 – that left me $4,000 short. My parents were nice enough to lend me $2,000, and I was able to earn an extra $2,000 by working overtime and part-time during the weekends for two months while the renovations took place.
Repairs and maintenances are a part of homeownership
When you own a home, you should have money set aside for repairs and maintenance. You never know when your roof could start to leak or your chimney could come crashing down. Experts say you should be prepared to spend an average of 3% to 5% of the value of your home on maintenance and repairs each year. For example, if your home is valued at $425,000, you should set aside up to $21,250 each year.
Homeownership isn't for everyone. If you're not prepared to put money aside in an emergency fund, you might be better suited for a condo or an apartment. With my first major renovation under my belt and my property virginity gone, today I truly feel like a homeowner!
Time to buy a new car? It's exciting but daunting, isn't it? Likely, you won't be able to pay off that baby in cash – I know I couldn't, and my new ride was a slick 2003 Toyota Camry. So, like me, you're probably trying to decide whether you should lease or buy the car. For the record, I went with buying.
Both involve monthly payments. Think of leasing as rent – you don't own the car after you finish paying for it – and a loan is, well, a loan like any other (mortgage, student, etc). They both, however, have many differences that may push you to choose one or the other.
When it comes to lower monthly payments, a lease does win. Because you are only making payments on the difference between the start value and residual value of the car rather than the entire price of the car, lease payments will be lower – sometimes up to 60%.
However, when you pay off a loan, your payments stop, and you carry on with your trusty steed. Oh, how glorious it is not to have a car payment anymore. When a lease has ended, you return the car, after which you need a new one, and the payments start all over again with no break in between.
Ownership and equity
When the term of your lease is up, you must give the car back to whomever you leased it from, or you can pay the rest of the amount and own the car, though it's usually more expensive than if you took out a loan upfront. When you loan your car, at the end of your term, you own it, and you now have equity in that vehicle – one of the main reasons I personally loaned my Camry.
Because you're paying for a shorter term when leasing, your car will likely still be under warranty, so you won't have to worry about maintenance costs. With a loan, you have only until the warranty lasts (three to 10 years) before being responsible for any maintenance and repairs. This is one aspect of a loan I'm not fond of, as I now own this 11-year-old gem with an expired warranty, so I'm loathing the day she needs repairs.
When you loan a car, because you're in the process of owning it, you won't have any limitation on your mileage. A lease agreement, however, often stipulates that only a certain amount of miles can be driven – usually 12,000 per year – and if you go over that mile limit, you could end up paying a hefty fine. If you have a lengthy commute, this is something to keep in mind.
Wear and tear
Again, when you finish paying a car loan, you own it, so any wear and tear will be yours – and yours to keep or fix up. With a lease agreement, your car is evaluated for wear and tear, and if an inspector sees any damage that is deemed to be "excessive," you will pay a fine. I was the victim of a hit-and-run, which left me with the one scrape on an otherwise well-maintained car. Excessive? I'd rather not take the chance, especially when it wasn't even my fault.
Keep in mind these five aspects of leasing versus loaning a car when it comes time to make a decision about how to finance your new (or used) Toyota Camry or BMW 740i. You'll be saddled with this decision for the next however many years, so make sure that choice is the right one.
Photo by Matt via cc.
I think I'm a smart person. When I was younger, my dad would say, "You're a really smart kid, so I can't figure out why you would do something so dumb."
How often do we, smart people, find ourselves making dumb decisions, especially with money? Money management would be much simpler if money didn't get in the way. We all know we should save, we should plan for the future, we should spend carefully. Yet, these are the exact things we don't do.
Here're four reasons smart people make dumb spending decisions:
We let emotion dictate our decision-making. Ever had a bad day? Ever bought something to make yourself feel better? That's emotional spending. It feels good to spend money, and that feeling is what gets us in trouble.
Solution: Wait. Give yourself time, especially before major buying decisions. Even if you've saved for months for that new TV, don't buy it after a bad day. Chances are you'll spend more and make a more hurried decision if you let emotion guide you.
We don't know how we are targeted. If you think about the places you shop regularly, you can pinpoint ways they get you spend more money. They arrange their stores in ways to make you spend and water fruits and vegetables you have to pay for by weight. Don't even get me started on free samples!
Solution: Wait. Don't go to the store during peak hours. Wait until later in the evening, or go early in the morning. These non-peak times will allow you to avoid the unnecessary watering and sample choices. Shopping during slow hours will also help you avoid the herd mentality. The idea that "everyone is stocking up on orange juice. I must do the same."
We don't know what we need. The list of our needs is probably a bit more extensive than air, water, food, and shelter, but we still need to be careful to differentiate between our needs and our wants.
Solution: Wait. Take time to consider if the purchase you're holding is a genuine need, or just a very attractive want. Give it a score of 1-10 (1 being an entire chocolate cake, 10 being air). Focus on the highest numbers in your life first. Spend on the things you need, and then save for the things you want.
We have no idea what we're doing. When was the last time you developed a spending plan? Do you sit down before you take a vacation and give yourself a spending limit? Do you do the same before you go to the grocery store? It sounds elementary and boring, but I'd rather be the boring guy retiring in Aspen than the spontaneous guy moving back in with my parents.
Solution: Wait. Did you think there was going to be another solution? Take the time to plan out your decisions. Write out your goals/intentions, and then stick to them. Don't be influenced by keeping up with trends.