Beating Broke

Personal Finance from the Broke Perspective

Adjustments to Make (Price Checking)

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I’m making this post in part to share with you, but also to make a reminder for myself of the things that I need to look into.  One of the mistakes that I and many other people make is not shopping around enough.  While you may have found the best deal when you bought something, if you are still paying for it, you might not be getting the best deal still.

The most obvious place where this could be true is with insurance.  I’ve been with my insurance company for about 10 years.  When I first purchased the insurance, I did a fair amount of shopping around and comparing and bought the insurance that was the best fit.  Since then, many things have changed.  I got married.  We’ve had two children.  We bought a house.  We both turned 25 several years ago.  All of these things could easily cause some drastic changes that really warrant a new comparison.  But, we never did that.  It’s time we did.  Over the next few weeks, I’ll be doing a bit of shopping around for better insurance rates and coverages.  In particular, our home owners insurance seems much higher than it should be, and consequently, I am now in the market to find cheap home insurance cover.

The other thing that I really need to look into (and should have a while ago) is the mortgage on our house.  We managed to buy our house when rates were good.  We’ve since added a second mortgage that is about 25% of the original mortage’s size.  The rate on that is not as favorable.  (9% ish)  So, I need to look into whether refinancing the whole thing and rolling the two together might help us out with a lower overall rate and maybe even a lower payment.

That’s just the two things that came up recently.  I’m sure there are plenty of other things that need to be checked regularly that I and others do not.  What are the things that you check regularly to save money?

My Wife Quit Her Job: The Hits Keep On Rolling

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It would appear that the saga is far from over.  (If you want the full story, you can read part 1 of My Wife Quit Her Job) Just when you think you can’t handle any more of a challenge, a little more gets thrown on top.  Obviously, God knows we can handle more.

Since my wife quit her job, we’ve been paying for Cobra health insurance to continue with the coverage that we had.  It was a bit of an increase since you pay for the company portion as well as what you would have normally paid, but we had already met our deductible and it pays 100% after that.  That full coverage bit helped us justify the extra couple of hundred that we had to pay each month.  But earlier this week, we got a letter from my wife’s former employer that informed us that the cost of the insurance would be going up and that beginning on the 1st of September we would have to pay that.

I probably don’t have to tell you that the increase puts an even deeper kink in our financial situation.  We may have to lose the 100% coverage in exchange for the plan that I get from work.  It’s only marginally cheaper than the original Cobra price, but even more so now that we’ve been hit with this increase.  The only part I haven’t worked out is if we would be better off keeping the Cobra coverage until the end of the year.  Any new deductible that we might have to meet may offset any extra premiums that we would have to pay.  Decisions, Decisions.

On a brighter note, the business that my wife and her friends started is still doing well.  She’s even expecting to get her first paycheck from the new company this month!  Certainly not a full paycheck, but getting closer.

Do You Shop Your Insurance?

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My wife and I are thinking of selling our house and buying something a bit bigger.  The house we are in is a little small for our expanding family.  It could be done, but not very comfortably.  In that process, we started our research by visiting with a loan officer to run some numbers and make sure that we were shopping in a price range that we could afford.

One of the subjects that came up in the process is the subject of home owners insurance.  As we discussed it, I mentioned what we were currently paying.  And then the discussion really started.  Turns out, our loan officer thinks that we are over paying by quite a bit.  By about 40% if the loan officer is even close to correct.  Ouch.

When we bought our house, the insurance was the last thing on my mind.  When the day came to sign all the paperwork, the loan officer that we were using at the time (not the same one we saw the other day) asked for the proof of insurance.  Which I did not have, because I had not gotten the insurance yet.  I didn’t see the purpose in insuring a house that I didn’t technically own yet.  I was wrong.  I couldn’t take ownership without proof of insurance.  Two very quick trips to the insurance agent that has our car insurance account later, I had my home owners insurance, and was able to sign the paperwork and take ownership.

In my haste, I took what I could get and what the agent suggested.  Because our house loan has an escrow account, I never really see the bill for the insurance.  It never really got brought up, and it just continued on it’s merry way.  I fell prey to a common personal financial mistake.  I didn’t shop around.  And I didn’t revisit my policies to check for pricing and coverage.

Committing that mistake may only be costing me a few hundred dollars a year.  I say only, because it could certainly be much worse.  Now, as we begin shopping for a new house, we’ll also be shopping for insurance.  Depending on what we find, we may be changing agents.  We may even change agents for the auto coverage as well since we’ll be shopping that around as well.  It doesn’t hurt to look, right?

I know I’m not the only one to ever fall victim to this error.  If you’d like to share your story, you can in the comments below.