The Georgia Christian Coalition
Serving Christ and The Citizens of Georgia
Practical Advice and Tools to Help Your Family weather the tough times
Money Saving Revelations
Distinguish between Wants and Needs:You will save a ton of money if you don't mistake wants for needs. Needs are pretty simple to identify--those items that are necessary to sustain: Shelter, food, clothing, transportation. Wants are those things that enhance or possibly improve our family life. A car is a need. Unless necessary for your business, a $40,000 Sport Utility Vehicle is a want, even if a lot of people don't see it that way. Have you ever heard (or said) "I absolutely need...?" when the actual meaning was "I really want?" This is not to suggest that you shouldn't be able to have the things you want--only that to delude yourself into believing that a want is a need--and busting your budget in the process--is a recipe for financial disaster.
Is less better?Perhaps it was due to the booming economy, perhaps "keeping up with the Joneses", maybe its ego, but for many of us, we often seem to insist on the biggest and the best, no matter what the cost. When a $15,000 new car may be more than acceptable, we stretch the seams of our budget to afford a $25,000 vehicle. We buy $25 shirts with $35 designer labels attached. We opt for the $100 dinner at the trendy restaurant when a $20 meal would have been just as delicious. Think about where you are spending the family money--and how--to see if there couldn't be savings found with minor changes in habits.
Try before you Buy:This goes a long way in helping to avoid the silly purchases of things you rarely or never use. Before you buy something, especially items with big price tags, borrow one, rent one or try one out before you plunk down the cash. If you are bored with it, or determine that it truly is not something you need before you buy it (and you will be on a certain percentage of items) you will definitely be bored with it, or find it not that necessary, after! Example: You feel that you absolutely must have a new Jet-Ski, at a cost of $4500 (and that is before financing and taxes). You go to the lake, rent one, and 45 minutes into a one hour rental you are saying, "geez, this is a long hour." Saved: More than $4500 (perhaps a year of college fees for the kid!)
Tough Questions to Ask Before You Buy Another Car
For most families, the next biggest expense is their car(s). Mistakes made here can often be as costly (on a monthly basis) as mortgage miscues. Take a look at the vehicle(s) you presently own. Do you own too much vehicle for your needs? Do you have equity in a car that you no longer use frequently? Could you downsize and save money, not only in monthly payments but also in maintenance, insurance and operating expenses? With the vehicles that you do own, are you getting the best deal on your repairs, maintenance and insurance?
Insurance Q&A with Georgia's Insurance and Fire Safety Commissioner, John Oxendine
Question:Commissioner Oxendine, When I applied for a loan to buy a new car, the loan officer said I would need to get full coverage on the vehicle until the loan was paid off. However, my agent says there is really no such thing as "full coverage". What types of coverage do I need, and what is the proper terminology?
Answer:In Georgia, you are required by law to have a certain amount of liability insurance, which is intended to pay for any damages or injuries caused by you in the event of an accident. The legal minimum is referred to as 25, 50 and 25, which stands for $25,000 to pay for medical and related costs of anyone injured by you, a maximum of $50,000 per accident, and $25,000 for property damage. Note that none of these coverages pays you, the policyholder; they are designed to pay medical or car repair costs of anyone you hit if the accident is your fault.
Your bank is concerned with getting that loan paid off. That's why they want you to have what they refer to as "full coverage." What they mean is optional collision and comprehensive coverage. Collision, just as the name implies, covers the cost of repairing your car, less your out-of-pocket amount (the deductible you choose), when you've been in a collision with another vehicle or object, regardless of who is at fault. Comprehensive (frequently referred to as "other than collision") coverage insures against loss caused by such things as fire, theft, vandalism, etc. The bank or loan company wants some type of assurance that if there is a loss, the vehicle (which is the loan collateral) will be repaired, or if declared a total loss, some payment will be made toward the outstanding balance of your loan.
If you purchase liability, comp and collision, you still won't have "full coverage." Your policy would not include towing and labor, rental, medical expense or uninsured motorist coverages, which are among some of the additional coverages you many include in your automobile insurance policy.
Question:What are some things I can do to lower the cost of my car insurance?
Answer:Auto insurance rates can vary between companies. Your premium will depend on the types of coverage you decide to carry, the type of car you drive, how you use it and where you live.
First, decide how much coverage you need. Liability of 25/50/25 is legally required, and you should consider higher limits if you own your home or have other assets. Liability covers damage you do to other people or their property. If your car is still fairly new, you may need to purchase optional comprehensive and collision coverage to protect your vehicle. Med Pay covers automobile-related medical bills for you and your passengers. Uninsured Motorist Coverage, up to the limit of liability you have selected, is available to protect you from those drivers who may cause an accident and do not have sufficient liability insurance.
Once you decide how much coverage you want, then shop various agents/companies for the best premium.
Other options to keep in mind include:
-- Raising the deductible of your collision and comprehensive coverage will reduce your premium. Deductibles represent the amount of money you pay out of your own pocket on any claim filed with your insurance company.
-- How many miles do you drive per day or week? These numbers affect the premium charged. You might consider car-pooling or other mileage-reducing methods.
-- Ask about premium discounts the company may offer. The two that are mandated by law are Defensive Driving and Good Student. See if you qualify. But the company may offer other discounts including multi-car, or for insuring both your home and your car.
-- A driver education course may qualify you for the "Defensive Driving Credit" if all drivers listed on the policy have been accident and violation free for three years and take a certified Drivers Ed/Defensive Drivers course. This could be a sizable saving for drivers under 25. Drivers Ed may be offered at school, or you can enroll in a certified driver training course. The course should include 30 hours classroom and six hours practical training by an approved school. Drivers over 25 only have to take a six-hour course to qualify for a reduction. Check with your insurance company to see if you qualify, and how much the reduction will be. Some insurance companies may have fewer qualifications for this credit, so ask.
-- If your family owns more than one car and has a teen driver, place the teen on the vehicle that has the lowest premium. He or she will be covered on the other autos as well, as long as they are driven with your permission.
-- A Good Student Discount is available for any unmarried, full-time student under 25 who maintains good grades (B or better) and has a good driving record.
-- If you are an experienced driver with a good driving record, you or your agent should look for a standard market company. Standard companies generally charge lower insurance premiums. Non-standard companies provide insurance for other drivers, generally at a higher cost.
-- When shopping for a car, keep in mind what it may cost to insure it. Performance vehicles and sports-type cars are more expensive to insure than standard sedan-type models. The more expensive a vehicle is to buy, the more it usually costs to repair it, so the comprehensive and collision premiums are usually higher.
Question:Commissioner, I carry comprehensive and collision insurance on my car. Does that cover me if a deer or other animal runs out in front of my car?
Answer:Damage from an animal impact generally is covered by comprehensive insurance. However, some insurance companies will provide that coverage under the collision portion of your policy. Check your policy to learn which is true in your case. If you hit an animal and you do not have the required comprehensive or collision insurance, you will almost certainly have to pay for the damage yourself. Owners of cattle or other domestic animals are generally not considered liable for an animal's being on the road, unless there is a history of negligence on the owner's part.
If you have the required coverage, you will pay the deductible and your auto insurance carrier will pay the rest, up to the full amount if it does not exceed the insured value of that vehicle.
Question:My fiance and I are getting married soon. Do we need to notify our respective auto insurance companies as soon as we marry, or should we wait until it's time to renew our policies?
Answer:Any time you have a major change in living or driving situations, you should notify your insurance agent right away. In your case, the agent will need to know your spouse's name, drivers license number, accident record, and the name of the company insuring the spouse's vehicle. This is important to you and the insurance company from a legal standpoint, since both spouses' insurance companies are assuming an additional liability because of your marriage. It will also give you the opportunity to explore the different options that your change in marital status may bring.
Something to consider when getting married is that each spouse brings to the union his or her driving record. If the records are good ones, both policies may cost the same. However, if either of you has a bad driving record, especially for the last three years, it will probably mean the price of insurance on both cars will be more than it would be otherwise. A bad driving record might include moving vehicle violations such as speeding, automobile accidents that were the fault of the insured, and citations for driving while intoxicated. A married couple should review with an agent of their choice both their policies, and understand the advantages of combining the account. If you decide to insure with the same company, you may qualify for a multi-car discount. Also, young married couples usually enjoy lower rates than young singles.
Before your auto insurance comes due again, each of you should check with your insurance company to learn what your policy will cost when it is renewed, and ask what each company would charge if you insured both cars with that company. Most will give a discount for a second car.
If you are a homeowner and have homeowners insurance, you may receive a discount if you buy that coverage from the company carrying your auto insurance policies.
And finally, in a nutshell:
Tips for Lowering Your Auto Insurance Premiums
- Shop around and compare prices
- Maintain a good driving record
- Take the highest deductible you can afford and collision and comprehensive coverage
- Before buying a vehicle, determine the cost of insuring it
- On cars with market value less than $1,000, consider carrying only liability coverage
- Try to pay your premium well in advance of due date. No grace period applies to automobile insurance
- Review your policy periodically and update coverage accordinglyAsk about discounts such as:
- Multiple cars on a policy
- Completion of driver education courses
- Good student drivers under age 25
- Mature driver (between 50 and 65 years of age)
- Airbags and other safety equipment
- Anti-theft devices
- Low mileage accident free record
- Auto/home insurance with same company
5 Easy Tips to Eat for Less
Not only do you need to eat food to live, the expense of it for the average family can eat you alive! Since food is a necessary and recurring expense, just saving, for example, $20 a week on your purchases can convert to over $1000 in savings over the course of a year.
- Try to plan in advance. By knowing what you need, you will be able to buy in larger quantities (almost always less expensive) and cut down on convenience food purchases (always more expensive).
- If you use national brands, spend a little time clipping and using coupons. $1.50 invested in the Sunday newspaper could save you $20 or more at the checkout. Organize the coupons by type, so as you develop a shopping list you can make a notation if you have a coupon.
- Consider store brands or generics. You may find the quality is equal to (and sometimes better than) the national brands, and store brands/generics are generally considerably less expensive.
- When it is on sale, stock up. Of course this only applies to those items that you use on a regular basis. Stocking up on an item which you use once a year doesn't make sense (and robs you of spending money, not to mention shelf space).
- Shop at the store that is the cheapest overall. Surveys have shown that there is sometimes as much as 10-15% difference on identical grocery orders at 2 different stores in the same area. If you spend $500 a month on groceries, that can equate to $600 to $900 a year in savings. Don't throw away your money just because it is your habit to shop at a certain store.
Stay Fashionable on a Budget
Although many consumer items have actually reduced in price over the last few years (most notably, computer and electronic items) the cost of clothing has seen a continuing upward spiral. In addition, a purchase price that not too long ago bought a good quality garment now seems to buy virtually "throw away" clothing. With some planning, though, it is possible to maintain clothing purchases that are in line with your family budget.
- Buy separates that coordinate. You can make numerous combinations with a few well matched items. For women, jackets, slacks, skirts and blouses can be mixed and matched to create many different outfits. Plus you can change the look of these outfits with accessories such as jewelry or scarves. Men's clothing offers a wide variety of separates that can be coordinated: blazers, slacks, shirts and ties can all be interchanged to create a versatile wardrobe with a minimum of expense.
- Buy a season ahead. Buy next year's winter clothes at the end of this season and save. The styles won't change that much (if at all) and you will pocket a big difference in the price.
- If you are "hard" on clothes, buy quality. Buying an $80 pair of shoes that will last saves money in the long run instead of having to buy 3 pairs of $35 shoes that don't hold up.
- Stay away from trendy items. Stick with the basics. You can always be sure you clothing styles will last from year to year when you buy perennial stand-bys such as medium length A-line skirts and solid tailored blazers for women or neutral color shirts and tailored to semi-tailored sports coats for men.
Making Smart Shopping Comparisons
It used to be that comparison shopping was a long and drawn out process. Driving from one store to another or making numerous phone calls could be a real time waster. Even if you were able to make an adequate comparison, sometimes it wasn't worth the hours you needed to invest to get the comparison. The Internet has changed much of that. Now you can make quick comparisons on most items, usually within a matter of minutes. What would once have taken hours to accomplish now happens at the click of a mouse, a real time and money saver. Don't forget online resources. For example, a site such as Ebay could save a lot of money for a couple of reasons: First, you can make comparisons among a number of sellers and second, you may be able to find second-hand merchandise which can save you a bundle.
Quick Hit Tips To Save You Cash
Leave your money at home.
You can't spend it if you don't bring it.
Check out 21 other Why-didn't-I-think-of-that easy money tips from moms. Demolish your debt.
They're living on an annual income of just $27,600, but if Keiko Kasai and Mike Hazekamp can make regular monthly payments of $350 on their $8,000 debt, they'll be debt-free in less than two years.
Lease a car.
With a lease, you'll pay less per month than you would repaying a car loan.
Send a snail mail complaint when you get a faulty product.
Your letter is more likely to get a response (and maybe a refund).
Have a yard sale.
Talk about a two-fer -- you can empty your cluttered garage AND get some cold, hard cash.
Track where each and every one of your dollars goes for 30 days.
It's a pain at first, but it's the best way to figure out what you can do without.
Set some financial goals.
After you've figured out exactly where every dollar is going, look at your budget and see if anything can be trimmed. Aim to cut back with tricks like brown-bagging your lunch, cutting out premium cable and reducing your cell phone service.
The early bird gets the deal.
Start buying your holiday presents before Thanksgiving. Everything's in stock, and you'll feel less pressure to empty your wallet for what's left on the shelves.
Shift your credit card balance.
Moving your balance to a lower-rate credit card can slash your interest payments and reduce the amount of time it takes to get out of debt.
Teach your child charity
Not only do you counter the "gimme" impulse, you'll also give them a boost in self-esteem when they realize they can help others.
Lead by example.
Show your kid how to manage money by explaining which factors go into your decision to purchase.
You'll be surprised at how much they can learn about value and worth.
Don't just tell your kids, "We can't afford that!"
You don't want to send the message that you think your kid is greedy. Explain what's realistic and what's not. They'll get it.
If your child asks, "Are we poor?" or "Are we rich?", the answer is always no.
You don't want your child to think you've got bottomless pockets, but you don't want him to freak out about not having enough money for food.
Help your children develop a simple plan for their allowance.
A good rule of thumb:
60% of the money goes into a savings jar
30% goes into a "quick cash" (spend freely) jar
10% goes into a giving to charity jar
Open up the Bank of Mom.
Improve their allowance skills by teaching basic banking. If they have to write a check to Mom to pull money out, they'll think twice about spending their savings.
If your hours at work have been cut, tell your kids the basic facts of your family's finances -- but spare them the details.
If you approach the changes in an upbeat manner, your kids will too.
Don't give out monetary rewards for good grades.
You'll fail to provide the right motivation for working hard in school: the self-satisfaction that comes from doing your best.
If you lose your job, get a grip on your emotions.
It's frightening for a child to see a parent upset, so vent privately to other adults.
Take your kids to work.
Having a hard time explaining the extra hours you're putting in at work? Show them your office -- it'll help them visualize.
Leave your kids at home when you shop.
They'll avoid temptation; you'll avoid the "But I WANT it!" tantrums.
Consider an Education Savings Account.
They'll help pay for kindergarten-through-12th-grade expenses, as well as college and graduate-school bills.
You may not want to think about it (who does?), but it's the best way to insure your children's future security. These days, you can even do it online.
Spend 15 minutes a week talking with your partner about money.
Money has to be a couple thing, and two heads are always better than one.
Get the right life insurance policy for your family.
Both of you should get insured whether you work or not. If the unthinkable happens, your partner would have to pay for childcare, and there would be less money available for the essentials.
Learn about 529 plans.
Your money can grow tax-free in this state-run investment account for college.
Replace your light bulbs with compact fluorescent light bulbs
They use two-thirds less energy and last ten times longer, and they're only a buck or two more than regular bulbs.
Attach lower-flow faucet aerators.
They're cheap (a couple of bucks each) and can save money on your water bill.
Seek professional help for compulsive shopping.
Take charge of a destructive shopping habit by its possible causes.
You can use paper plates and prepared food so it's less work, and it'll still be cheaper than going out.
Calculate whether you should work or stay at home.
Tabulate the costs -- your childcare savings might offset your lost paycheck.
Reduce surprise expenses.
Sign up for no-cost "even-pay" budget plans with your gas and electric companies. Voila: no more surprise $400 heating bills in the middle of the winter.
Bank what you resist spending.
Every time you talk yourself out of an impulse buy, like a pricey pair of shoes, transfer that amount into your savings account. You'll be amazed at how much you'll have in the bank by the end of the year.
Drive down car payments.
Financial planners say that car payments should be less than 5% of a family's pre-tax income. If you've got two nice cars, consider selling one and replacing it with an older, used car that you can buy outright.
Haggle over a new car.
If you're trading in your old vehicle, don't mention it until you've already settled on a price. Otherwise, the dealer will take that into account when he makes you his "best" offer. Better yet, use the Parenting.com Cars for Moms website to find a great deal.
Leave the stress of work at the office.
With e-mail, phones, Blackberrys, and home computers, it's becoming harder to separate work and family lives. But unless you set boundaries for yourself, you may risk burning out on stress. Fight the frazzle by setting some ground rules on work and home.