Money is tight. The economy is in a slump. How do you get ahead?  Sometimes it’s hard to know where to start.  

When times are hard the 3 areas where you can save money but most often overlook are your insurance, your financials and how to negotiate for a better deal.  Below we discuss in detail some tips on saving money in tough times that everyone ought to know.

3 Money Saving Tips:

Money Saving Tips #1 – Your Insurances:

  • Shop Insurance Premiums.

You should shop your auto and homeowners insurance premiums once a year.   Insurance companies are like every other business entity, they sometimes have to increase their prices.

If you are an automatic payment plan, you may not have noticed the increases; by shopping your insurance premiums on an annual basis, you may save some money there.

You can get comparison quotes online, ask your insurance broker to comparison shop for you or you can call 3 -4 different insurance carriers for comparison quotes.   However you do your comparison shopping, just make sure they are all comparing the exact same coverages.

  • Raise Insurance Deductibles.

You can save money by raising your auto and homeowners insurance deductibles.

Higher deductibles will generally lower your insurance premiums.   Before you make any changes to your deductible,  make sure that in case you ever have to file a claim you will be able to afford the higher deductible.  If you only save a few dollars by doubling your deductible, the savings may not be worth the extra money you will have to pay out-of-pocket at the time of a loss.

Ask your insurance agent for quotes that show a range of deductibles; sometimes the savings is not cost-effective compared to your out-of-pocket costs at the time of a claim.

  • Buy Life Insurance.

Money Saving Tips and Life InsuranceJust in case something tragically, unexpectedly happens to you, you want to protect your loved ones from financial ruin.   If you do not have life insurance to cover all of your debts, that financial burden will be passed onto your loved ones.

In a perfect world you would want enough life insurance coverage to pay off your debt: the mortgage, pay for the children’s college education, pay off your college loans if you have any, pay off any car loans, pay off any credit card debt.     But we don’t live in a perfect world, so buy as much life insurance coverage as you can to cover as much debt as you can.

You can buy a lot of life insurance coverage with a “term” life insurance policy at a relatively low-cost.    You can contact a life insurance agent, check out prices online or ask your auto/home insurance agent for a quote.

Money Saving Tips #2 – Your Financials:

When we talk about financials we are referring to your saving habits, your investing habits and the fees you currently pay.     By reining in your spending you will save money.  By monitoring your fees you will save money and by reviewing your investments you may find adjustments to make that will save you money.

  • Make Extra Mortgage Payments.

Making extra mortgage payments will go a long way towards saving money.   One extra payment a month or every other month will save money on the interest you will pay over the long-term.  If you can’t pay the entire amount of an extra mortgage payment, then maybe pay an extra $50 or $100 each month.

Any extra you can pay will help lower the total interest over the term of your mortgage.    If you get a bonus at work or saved money by switching your insurance deductibles, apply that extra money to your mortgage.

  • Order Credit Reports.

Check your credit reports once a year.

You can order a free credit report from each of the 3 national credit reporting agencies once a year.

The credit reporting agencies do not verify the information they receive from creditors, they just report it; so errors can occur.   It is up to you to find the errors, report them and get them corrected.    Your credit scores have a huge impact on how much you pay for goods and services.

If your credit score is between 300 – 750 you will pay much more in mortgage interest rates, auto and student loan interest rates, credit card interest rates, utility rates, cell phone rates, the list is almost endless.   Start to save money, order your credit reports once a year.

According to the credit reporting agencies, a good credit score is above 750; a perfect credit score is 850.

  • Shop Your Credit Cards.

Find a lower interest credit card.

Credit card companies are always offering deals, just make sure you read the fine print on the length and terms of the contract, you do not want any surprises.     Save money with your credit cards by making your payments on time every month, this will save you money on late fees.

  • Financial Planner.

Consider working with a financial planner to review your portfolio and give you recommendations on possible ways to improve it.

A financial planner can show you how to you rebalance your portfolio.   You should rebalance once a year, it may help to increase your investment returns.

Once a year, the financial planner should review for you the fees charged by the mutual funds you invest in; sometimes, you can save money by changing to a mutual fund with lower fees.    You should also look into getting a will, everyone should have a will drawn up.

Money Saving Tips #3 – Negotiating:

By learning the skill of negotiating you may be able to negotiate the terms on your some of your service contracts.  All the service vendor can do is say no to your request, but you don’t know until you ask.

  • Who To Negotiate With.

Money saving tips and negotiating with service vendorsYou should try to negotiate with your cable/satellite company for a better package; your cell phone company for a better deal.   If you lease your car vs own it, try negotiating with the leasing company for a longer term or lower rates.

Negotiate with your credit card company for lower interest rates if your credit score is above 750 or negotiate to waive late fees if you make a late payment and have never paid late before.

Money is tight. There is no magic bullet that will  get you through the tough times. To get ahead you just need to find ways to use your money wisely.

Three practical suggestions to save money is to watch your insurance premiums and deductibles, negotiate with your service contractors and keep a close eye on your financials. It’s not about how much you make – but how much you keep.

By following the 3 money saving tips that we discussed you will keep more of your money and have an easier time making ends meet in a tough economy.