Category: Uncategorized

Shhh…Don’t Tell My Dad!

 

Ok, I know I shouldn’t, but I’m throwing my dad under the bus here!  I live in Denver, while my parents live in South Florida.  On occasion, I get the call that goes like this:  “Hi, how are you, what else… well, I gotta tell ya, I’m tired of being broke!”  Sound familiar?

As a financial planner by trade, I go into the “I can fix this” mode.  Admittedly, I’ve made plenty of money mistakes in my life, but you live and learn.  What I have learned is that you need to be a consummate shopper!  Shop everything, not just clipping coupons for deals at the grocery store, but examples like where do I fill up my car, should I buy online vs. a local retailer…the list goes on and on.

All of this brings me to my specific example here:  the TV bill.  I mean, wow!  Having perused the recent bill, it looks like my parents spend on average $280 per month.  By comparison, I use another provider, and my average bill is just under $100 per month.  I’m not intending to knock on satellite company #1 or make an endorsement for #2, just an observation on how someone could save a bunch of money without really giving up something of great significance.  Perhaps he watches more pay-per-view movies than I do, but $180 difference per month is significant!

Let’s dig into the math a bit here:  If my dad were to make a change of TV providers, he’s still getting entertainment value, but would have an extra $180 per month to put somewhere, let’s say he invests it.  As he approaches the end of his working career and nears retirement, certainly this savings would be useful?

180 * 12 = $2160 per year.  He just turned 70, so let’s say he realizes these savings over the next ten years.   $2160 * 10 = $21,600.  I did not even factor in interest!  If he were to invest the monthly savings of $180 at a compounded rate of 2% annually, the future sum would approach $24000.

My point here is that we can all be wiser consumers with almost any goods and services we utilize.  When it comes to insurance, the story is the same!  Whether it’s the big companies with wide marketing budgets that have something to do with “farm” or the lizard peddling cheap auto rates, there are savings to be had somewhere.

Do your homework, weigh the advantages of consuming the big name, big ticket product for a lesser known that may be of equal or higher value.

When Water Goes Where It Shouldn’t

 

Even a small leak can become a major problem, so knowing what you’re covered for and how to prevent water damage are equally important.  The below tips should help uncover any potential water problems down the road and keep your property dry.

Check appliance hoses.  Standard hoses are not as durable as they used to be.  Replace rubber hoses with steel braided hoses. In Denver and Colorado, this can be an issue since it is a dry climate.  It is a low-cost fix that can save thousands in water damage.

Broken tiles in the shower can allow water to leak into the walls or on the floor. Replace cracked tiles and re-grout when needed.

Run dishwasher and washing machine only when you are home.  If a leak occurs, you can turn the appliance off right away.

When on vacation, turn off the main water supply to your house.  I always thought my wife was crazy for doing this, but in an old house, like mine in Wash Park, this could prevent a disaster.

Keep storm drains near your house clear of leaves.

Install a gutter guard.  Guards can prevent a rooftop disaster caused by drain clogs, and also prevents flooding by water that doesn’t flow away from the house.

Install a water pressure gauge.  An inexpensive gauge can prevent damage caused by water pressure that’s too high.  Pressure should be between 60 and 80 PSI.

Savings Choices

Making Smart Savings Choices

In today’s unsettled economy, many people are looking for ways to stretch their money—but sometimes this includes altering insurance coverages to dangerously low levels or eliminating coverage entirely. If you’re thinking about changing your coverage to save money, consider these key issues below — and give us a call. We can help make sure you’ve got the right protection at a price you can afford.

  • Make sure you’re getting the appropriate discounts and credits: Most insurers offer a variety of policy credits and account discounts that can translate into significant savings — without endangering the level of protection you need for your home, autos and other valuable property. And often, if you purchase multiple policies through the same insurance company, you’ll receive further discounts. People who own motorcycles or boats and who complete approved safety courses can qualify for discounts and families with teen drivers who earn good grades in school may qualify for auto policy discounts.
  • Increase deductibles for cost savings: Only a small percentage of homeowners have claims in any given year, so you might consider increasing your deductible.
  • Specialty lines coverage options: Own a classic car or RV?  If their use is seasonal, you can typically reduce your coverage to liability only during the off-season, then add full coverage only when you are actually using the vehicle
  • Full payment on policy: Depending on your financial circumstances, you may be able to make lump-sum payments instead of partial premium payments, such as monthly or quarterly. Partial payments often include small transaction fees, so paying the full amount can eliminate those extra costs.

Some decisions to avoid

It is just as important to understand what not to do as you look for cost savings. Here are some scenarios you should avoid:

  • It may be unwise to carry only the minimum state-required amount of uninsured/underinsured motorist coverage on auto policies, or to cancel it entirely if it is not required in your state: According to the Insurance Research Council (IRC)*, the correlation between the percentage of uninsured motorists and the unemployment rate is high — when the economy is struggling, more people go without insurance. You want to make sure you’re protected in this instance.
  • Ignoring renters insurance: This coverage is often overlooked no matter what shape the economy is in. Landlords’ policies generally only cover the structure, not the individual renters’ contents. Imagine having to replace furniture, clothing and other personal property out of pocket because you excluded this essential, affordable coverage and then suffered a devastating loss from a burglary or other covered event.

Saving money is important, but so is making sure that what you’ve got is protected. If you’re looking for ways to save or want to review your coverages, give us a call!

*Insurance Research Council, January 21, 2009