How to Find an Extra $100/Month or More in the Family Budget August 7, 2011
Posted by jimintriglia in Personal Finance.add a comment
The Shrinking Dollar
Irrespective of how Uncle Sam chooses to calculate the rate of inflation, most people know that their dollars are buying less these days, and that the cost of groceries and gasoline are further stretching the family budget.
So, what’s a family CFO to do? If your goal is to cut spending significantly while impacting your family’s lifestyle as little as possible, have a look at the premiums you are presently paying for auto, home, life and liability insurance.
I did a review of the marketplace several weeks ago, when my current life insurer decided to renew my term life insurance rates at double the annual premium. As there was no basis for the increase, other than the company could charge whatever they feel like, I decided to shop for a new insurance company, rather than blithely accept a doubling of my premium for the next ten years. The result: with the help of my local life insurance agent, I was able to acquire a better life insurance policy than I had, at about the same cost as I paid ten years ago.
So, how’s that possible? There’s been quite a bit of competition in the marketplace over the last several years. Companies have grown leaner, especially with all of the layoffs that have taken place in the last decade. Automation has reduced operational and management costs; work that has been traditionally done here in the U.S.A. has been off-shored to countries, where the same work can be done for a lot less money. As a result, insurance companies have grown more competitive price-wise, and also continue to reap profits from people (like me) that continue to pay premiums that reflect the cost of doing business a decade ago.
Fast forward to this past weekend. I completed a detailed analysis of my current automobile insurance policy, including an apples-to-apples price comparison of same-in-class competitors. The result: My new insurance company, State Farm, saved me over $70 per month ($840/year) on a new auto insurance policy. My new policy has better coverage than that of my old policy, with a better customer complaint index, a strong presence in my hometown (for personalized service), and a better balance sheet, reducing the chance of the company going belly-up.
So, if you need some extra cash each month to deal with the rising cost of living, review your current insurance policies and providers. Don’t be surprised if you can save a hundred dollars or so each month, simply by updating your coverage or even changing to a competitor.
If you’d like a copy of the spreadsheet that I created to perform my apples-to-apples comparative analysis of auto insurance policy features/benefits, send me an email at JimIntriglia@me.com.
