Guest Post

Slice Your Insurance Costs – Dice Your Fixed Expenses

As households continue to struggle with a tighter budget caused by unemployment and underemployment, many people are wondering how they can cut their expenses to have money to pay all their bills while still having some left over to put away for the future. One of the best ways to free up money in your fixed budget is by cutting down on insurance costs and fixed expenses.

Car Insurance

Although increases in the cost of car insurance have slowed down in recent years, the trend still indicates higher costs over time. If you want to pay less for your car insurance, look at your current policy to see what kind of coverage you have. You may be paying for optional coverage that you do not need, or you may have low deductibles in categories that you can afford to raise your deductible amount on and therefore lower your car insurance premium.

Are you a safe driver? If you have not been in any accidents that were your fault in the past, consider asking your car insurance company about a discount. Many insurers are willing to give a safe driver discount, but sometimes you have to specifically ask about the discount to receive it.

Homeowners may save money on both their car and home insurance policies if they choose the same insurer for both policies and ask for a bundling discount. To save even more, pay these policies in full once per year rather than paying a monthly fee towards your policy. Most insurance companies charge a convenience fee for the ability to make payments on the policy rather than paying it off all at once.

Mortgage Costs

You may think that your monthly mortgage payment is something that you cannot adjust to be more affordable. However, there are a few ways that you can lower your mortgage payment.

The most common way to lower your mortgage payment is through refinancing. This is only beneficial if current mortgage rates are low and the fees you will need to pay to refinance are not excessive. Talk to a mortgage broker to discuss how much you will need to pay to refinance your mortgage. If the amount you save through refinancing is less than the fees it will cost you to refinance, refinancing is not worth it.

If you are truly having trouble paying your mortgage and you are afraid that you will not be able to keep up with payments, consider asking your lender to add time to the term of your mortgage. This will mean you pay more interest on your mortgage over time, but you will save money on your monthly payments to make them more affordable. This is a last resort option only to be used if you really cannot afford your payments.

Your total mortgage payment includes taxes and insurance fees. While you cannot lower the taxes you owe on your mortgage, you may be able to find a better rate on home insurance. Contact several insurance companies and ask for a quote to see if you are paying too much for insurance. If you find a significantly lower rate, switch your insurance to lower your monthly payment.

Debt Payments

With the average household debt excluding mortgages edging near $26,000, many families have an overwhelming amount of debt payments to make every month. If you are one of these families, it is possible to lower these payments.

Obtaining a debt consolidation loan may lower monthly payments and make it easier to pay your bills. To decide if debt consolidation will help you, list your current household debts and the interest rate on each debt. If the interest of a debt consolidation loan is less than the average interest you are currently paying on your debts, you will save money by consolidating. You will also only have one monthly debt payment rather than several payments, making it easier to pay your debt and less likely that you will forget to make a payment.

Even if you are not having trouble paying your monthly fixed expenses, finding a way to slash your costs by researching lower interest rates and discounts will free up more money to put towards savings. While it is possible to lower your monthly payments on your mortgage and debts, be sure that you are really saving money in the long run. Fees and longer terms may mean that you pay more over time, so research is important.

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