Search Results for: budget

How Much Car Insurance Coverage Do You Need?

December 8, 2012 By Shane Ede 8 Comments

Car insurance, like most insurances, can seem complicated. Deciding just how much car insurance coverage you need is the biggest hurdle. Of course, it’s easy to select the coverage that meets the requirements of your state and the lien holder (of you owe on a loan for the car, you’ve got a lien holder, and it’s likely the bank you borrowed from), but those aren’t the only factors to take into account when deciding on how much coverage you need. Using a free online service can quickly find cheap auto insurance companies and shows multiple competitive policies. In the end, you’ve got to find a coverage that will meet those requirements, and also fit within your budget.

State Requirements

You’ll want to know what the state requires you to have for insurance. Any local insurance provider should be able to tell you, but you’ll want to double check if you’re planning on using an out of state or online provider. If you still owe on your car, the lender on your loan will likely require that you have full coverage, so the state minimums will likely only come into play if you own the car you’ll be insuring.

Lien Holder Requirements

If you owe on your car, you’ve got a lien holder. The lien holder is whomever you borrowed the money from. Most (if not all) lenders will require that you carry full coverage insurance on the car. It has nothing to do with them wanting to make sure you’re safe, and all to do with making sure that should you get in an accident, that they’ll get some of their money for the loan. While most lien holders won’t require a certain level of insurance (over full coverage), it is a good idea to find out what they require just to make sure that you’re getting the coverage that you need.

Deciding on Coverage Levels

Once you know the requirements of the state and any lien holders, you’ve got to decide on the level of car insurance coverage you want. There are two ways to look at this. The first is that you’ve got to find a coverage and provider that is affordable enough to fit into your budget. The second is usually the forgotten way of looking at insurance. The coverage doesn’t just have to fit into your budget, it also needs to cover you against a total loss. If you have full coverage, but it’s only enough to cover a portion of what you owe on the car, you’ll also want to look at something that’s usually called “Gap Insurance”. Gap insurance is aptly named in that it is designed to cover any gap between the value of the car and the remaining loan should the car be totaled before you pay it off. Car insurance can be a combination of three coverages. A liability coverage (usually what States require), Comp & Collision, and personal injury. The exact levels that you need will vary based on your situation, but your insurance provider should be able to make recommendations for you.

How Much Deductible for Car Insurance

One of the easiest ways to lower the monthly cost of your car insurance coverage is to raise the deductible on your policy. This method is a bit of a double-edged sword, however. Raise it too high, and you might not be able to afford to have the car fixed. Or, anything short of a major collision may fall under the amount of the deductible. Again, your insurance provider should be able to help you compare the different deductible levels and help you find one that fits your budget without breaking you if you get in an accident.

The level of coverage that you need is going to be drastically different based on your own individual situation. Do you own your car, or owe on your car? Do you have sufficient savings to cover a higher deductible in an emergency? What are the requirements of your state and any lien holders? Make sure you know all that information before you go looking for car insurance, and remember to double check any suggestions by an insurance provider. We’d all like to think that they are all honest, but not all of them are. Knowing at least a little about what you’re talking about, and the information required to ask informed questions is a huge step towards not getting taken advantage of.

How much do you know about car insurance? How much have you learned since the first time you bought insurance?

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A Review of Dave Ramsey’s Revised Financial Peace University & New Speakers

December 3, 2012 By MelissaB 3 Comments

Dave Ramsey has changed thousands, if not millions, of lives with his Financial Peace University. Now, he is looking to improve on that formula with the newly revised Financial Peace University. While this latest version of Financial Peace University has all of the benefits of the old version, some of the material has been changed, and there are new speakers added to the mix.

The revised Financial Peace University kit includes a workbook; Ramsey’s book, The Complete Guide to Money; a welcome guide that includes a pencil, sharpener, and eraser; an envelope system; a laminated Financial Peace University Progress Chart; a folder for Financial Peace forms; and most importantly, 10 audio CDs containing Ramsey’s lessons.

The 10 audio CDs cover the following topics:

CD #1: Super Saving: Common Sense for Your Dollars and Cents

CD #2: Relating with Money: Nerds and Free Spirits Unite!

CD #3: Cash Flow Planning: the Nuts and Bolts of Budgeting

CD #4: Dumping Debt: Breaking the Chains of Debt

CD #5: Buyer Beware: The Power of Marketing on Your Buying Decisions

CD #6: The Role of Insurance: Protecting Your Health, Family and Finances

CD #7: Retirement and College Planning: Mastering the Alphabet Soup of Investing

CD #8: Real Estate and Mortgages: Keeping the American Dream from Becoming a Nightmare

CD #9: The Great Misunderstanding: Unleashing the Power of Generous Giving

CD #10: Dave’s Story: Learn How Dave Found the Peace He Was Missing

There are three major changes I noticed in the newly revised Financial Peace University.

1. The course has been shortened from 13 weeks to 9 weeks. Some may say that this time frame is too short, but I think it is great. Ramsey is such a motivational speaker, that after hearing him speak for one class people are fired up and ready to get their finances in order. Shortening the course to 9 weeks allows them to make quicker progress and begin working on their financial situation sooner.

2. Content that wasn’t relevant to everyone has been moved to the website. Some content, while useful to those in a particular situation, isn’t applicable to the majority of people. For instance, Ramsey skillfully explained exactly how to deal with harassing bill collectors in the original Financial Peace University, and that information is essential to those in that situation. However, since the majority of FPU participants are not in that desperate situation, that content has been moved to the website.

3. Ramsey has brought in three new speakers–Rachael Cruze (Ramsey’s daughter), Jon Acuff and Chris Hogan. Fans of Ramsey will probably have mixed feelings about these new additions.

Rachael Cruze has the hardest job. Ramsey is a dynamic motivational speaker who makes his job seem effortless. People will naturally expect the same of his child. In reality, Cruze is young and new at this business. She is definitely not as polished as her famous father, though truthfully very few people are. However, she offers the voice of a person who has been raised following Dave Ramsey’s principles and hearing her success is encouraging.

Jon Acuff shares Ramsey’s sense of humor, but his jokes don’t go over quite as well. However, his tips on negotiation are good, and readers can definitely learn from him. A few more years of working with Ramsey, and he will have the natural, relaxed attitude as Ramsey does.

Chris Hogan is the most charismatic new addition. While he is not Dave Ramsey, he is a natural public speaker. He gives important information about buying a home, but his lessons are peppered with humor that naturally engage the listener.

My husband and I both listened to the CDs, and I didn’t mind the addition of the new speakers and know that Ramsey is probably adding them to prepare to eventually hand over his dynasty. However, my husband did not like the new additions and felt that most of the speakers were simply reiterating what Ramsey always says.

Overall, Dave Ramsey’s newly revised Financial Peace University is an improvement on the first version and can inspire participants to pay off debt and improve their financial situation once and for all.

Personal Finance Reassessment

October 16, 2012 By Shane Ede 6 Comments

Occasionally, there comes a time when you have to take a look at your personal finances and do a little personal finance reassessment. While the need may arise to do a complete overhaul once in a while, a simple reassessment can usually suffice. All it takes is a little attention, and some dedicated time to making sure that your finances are in order.

Recently, my wife and I were, more or less, forced to do a little personal finance reassessment. That’s such a nice, delicate way of saying it isn’t it? Truth be told, our finances were (are) in a mess. The ripples from when I quit my job last November are still plenty big, and the new job that I have seems to have come just in time to keep us from completely going under. Combine the drastic decrease in income that event brought about with a couple of people who remained stubborn in their budget, and it was a recipe for disaster.

Luckily, we’re usually pretty good at talking about money with each other. Don’t get me wrong. There’s plenty of room for improvement. But, we’re good about not getting into any heated arguments with each other, and being able to figure out where we’ve gone wrong and correcting it.

So, we sat down and caught up our dreadfully behind budget. And, let me stop here to say something. What kind of idiot doesn’t keep doing the budget when he quits his job and is making a fraction of what he used to? This guy. Dumb. So, yeah, we caught up the budget. About 6 months worth of financial data entry. Some by hand because our bank doesn’t keep history online over 90 days. So, one by one, directly from the statements I printed off. Did I mention how dumb that was?

In case you’re curious, catching up on about 6 months of budgeting takes about 6 hours. 6 HOURS! It’s done though.

One of the things that we discovered, after having done all of that, is that the reason that we were in the pickle that we were in wasn’t because of the loss of income, although that played a part, but more because of how badly we had slipped in the last few months with our spending. July and August in particular were well above what June was. In our defense, those are usually higher spend months because they’re usually the only real summer months we get up here in North Dakota, but it was still way off. And it cost us. The last several weeks have been pretty hairy, financially.

The scary part of all of that is that we haven’t had a bad financial situation like that for over 5 years. And, maybe, in that 5 years, we’ve become a little bit lax in our budgeting, and in our finances in general. No more. We’re taking the control back, and keeping our finances in order. Not doing so could mean disaster. It surely means stress, and that’s something we just don’t need.

During our little reassessment, there were several things that we picked up on. Like the fact that we didn’t have any life insurance on me. In my previous job, my employer kept a policy on me that would have been more than sufficient. For some reason, they decided to cancel that policy when I quit. 😉 So, we’re now budgeting for life insurance policies. Or, the fact that our spending on eating out and groceries had gone way up. A simple attitude adjustment helps with the eating out, and we’re going to start trying to use menu plans to keep our grocery bill down and to spread it out over the month. Another thing that seems to be part of the issue is the timing of some of our bills. Before, I made enough that it wasn’t an issue when the bills came due, we always had at least enough to make it to the next payday. Now, with my lower salary, it’s getting a bit tight right before the 15th (when my wife gets paid), and a few of the bills that come in right before the 15th are adding a little extra stress. I need to call a few of them and try to get them moved to a slightly later due date.

In the end, our personal finance reassessment came just in time. We kept a close enough watch on our finances to see the need arising, and were able to meet the need and keep things from getting any worse. Chalk it up to a lesson learned. The (almost) hard way.

When was the last time you had a personal finance reassessment?

img credit: Matt Mcgee, on Flickr