Archive for September, 2008

Comparing Auto Insurance Rates

By: Green Panda | Date posted: September 16, 2008 (6:24 am)

Photo Credit:  ChicagoEye

Hunting for a Deal on Car Insurance

We’re in the process of comparing auto insurance rates. We’re currently with Progressive auto insurance and have been with them for almost 2 years. We got a letter and email informing us of an increase of our monthly premium from $105 to $117. I called and asked about the rate increase and I was told it was due ti increasing cost of medical coverage in the entire state.

Renewal time always reminds me to keep checking our rates to see if they are still competitive.

Side by Side Comparision of Coverage and Costs

The Progressive premium for six months is $697.48. The coverage includes:

  • $50,000/$100,000               Bodily Injury
  • $50,000 Property Damage Liability
  • $50,000/$100,000 Uninsured & Underinsured Motorist
  • $500 deductible                  Comprehensive *just for my VW*
  • $1,000 deductible                Collision
  • No deductible Emergency Roadside Service *just for my VW*
  • $30/day, $900 max/claim      Rental Reimbursement *just for my VW*

The Geico premium for six months is  $321.58. The coverage includes:

  • $100,000/$100,000              Bodily Injury
  • $100,000 Property Damage Liability
  • $50,000/$100,000 Uninsured & Underinsured Motorist
  • $500 deductible                  Comprehensive *just for my VW*
  • $500 deductible                  Collision
  • No deductible Emergency Roadside Service *just for my VW*
  • $30/day, $900 max/claim      Rental Reimbursement *just for my VW*

I went to AllState‘s site to see what they offered and here is the ball park break down for insurance coverage:

I tried several times to get an estimate from State Farm, but their site keeps going down. I also went to “the General’s” site to compare different insurance, but I got Geico again.

We’ll discuss it this week if we want to switch to another insurance company or not. While Geico looks like it’s the cheapest, my concern is over their customer service. I know a few people personally that had Geico, got into an accident, and switched due to their cheap service.*Sighs* Another bill to think over. While we do have a budget, I want to have a good company behind us.

Which insurance company do you use? Are you happy with the customer service? Conversely, do you know of a company to avoid, why?

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Bank of America to Buy Merrill Lynch

By: Green Panda | Date posted: September 15, 2008 (7:37 am)

Photo Credit: geishaboy500

Just saw this on ABCNEWS.com before I get ready to leave:

Bank of America on Monday began adding another slice to its growing financial services empire, buying Merrill Lynch in a $50 billion deal that would create a bank offering everything from fixed-income trading to credit card lending.

The deal values Merrill at $29 a share. That represents a 70 percent premium over the brokerage’s Friday closing price of $17.05, but well below what Merrill was worth at its peak in early 2007, when its shares traded above $98.

Also big news in finances:

Lehman Brothers, burdened by $60 billion in soured real-estate holdings, filed a Chapter 11 bankruptcy petition in U.S. Bankruptcy Court after attempts to rescue the 158-year-old firm failed.

If I learn more, I’ll pass it on.

Update @ 12:45pm EST: BoingBoing has some great reader commentary on the financial news and CNBC has Wilbur Ross sharing his thoughts on possible opportunities for larger banks to pick up smaller regional banks .

Weekly Round Up: Baby Shower Edition

By: Green Panda | Date posted: September 12, 2008 (8:23 am)

Photo Credit: safetypinheart

We’re going to visit friends and family this weekend. Friends of mine are going to have their first kid (a boy!) next month. Our plan is to go to the shower, see my aunt and cousin, visit his family, and share a dinner with friends. Our weekend is packed and we won’t have much time for anything else.

Thanks!

Living Almost Large hosted the Money Hacks Carnival #29: Food Heaven and my post Put Tuition Refund in a High Yield Savings Account as an Emergency Fund was included.

Top 10 Personal Finance Posts This Week

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I also wanted to mention that IChapters.com is doing a tree planting drive.

The first iChapters Plant a Tree Drive was a huge success, with more than 57,000 trees planted, so this time, we’re setting the bar even higher, and have a goal of planting more than 100,000 trees. Buying digital textbooks in the form of eBooks and eChapters from iChapters.com is a great way to protect the environment by keeping carbon hungry trees in the ground rather then sending them to the paper mills.

If you’re a college student and you need to grab some books, save money, and plant a tree, perhaps you should look into ichapters. I’m not getting paid, this is my personal vouch for them.

Have a great weekend!

The Stigma of Debt Is Gone, But Not The Sting

By: Green Panda | Date posted: September 10, 2008 (12:27 pm)

 

 

 

Browsing across the web, you stumble upon interesting things, some of which are quite informative. Dave Ramsey and others point out that early in the 20th century buying on credit was frowned upon:

History also teaches us that debt wasn’t always a way of life. In fact, three of the biggest lenders today were founded by people who hated debt. Sears now makes more money on credit than on the sale of merchandise. They are not a store; they are a lender with some stuff out front. However, in 1910 the Sears catalog stated, “Buying on Credit is Folly.” J. C. Penney department stores make millions annually on their plastic, but their founder was nicknamed James “Cash” Penney because he detested the use of debt.

Henry Ford thought debt was a lazy man’s method to purchase items, and his philosophy was so ingrained in Ford Motor Company that Ford didn’t offer financing until 10 years after General Motors did. Now, of course, Ford Motor credit is one of the most profitable of Ford Motor’s operations. The old school saw the folly of debt; the new school saw the opportunity to take advantage of the consumer with debt.

Now it seems as many people have debt in their lives and unfortunately it’s the high interest kind. Car payments, credit card debts, 2nd mortgages, and regular mortgages take a chunk of, if not your whole paycheck. It’s a struggle that many deal with, but few are willing to change.

Does that mean that having debt is ok? Not necessarily. Having a mortgage is debt, but it is a way for

USA Today points out the average credit card debt for an American household is $8,565. How does translate to monthly payments?

Using a typical interest rate and the standard minimum payment, here’s how it breaks down:

If you paid the minimum payment every month, it would take you 249 months to pay off your debt and you would pay $7,486.48 in interest.

It will take you 46 months to be rid of your debt if you pay $256/month. In that time, you will pay $3,108.88 in interest.

Source: Bankrate.com

Can you imagine having credit card debt that can take longer than many student loans?! What do you have to show after 249 payments (20 years)? Most likely, nothing that you originally purchased will be around. We live in a consumer society, which can include disposing of things on a regular basis.

Don’t let the ‘normalcy’ of debt convince you to keep the cycle going. Make it your goal to get rid of your high interest debt as soon as possible.

How do you do get rid of debt?

  1. Stop using credit cards. Hide them or perform a plasticomy.
  2. Discover the exact amount of debt you’re in. You can’t come up with a plan until you know what you owe.
  3. Work to see if you can lower your interest rates. If you can’t, you may consider choosing a 0% card to transfer your balance. Balance transfers are a temporary fix and do not address the root problem.
  4. Control your spending and write a simple budget.
  5. Automate your bills and put aside some money for savings.

It’s not easy, but the steps are simple. Here are some articles that can help you plan your escape from debt.

This post was included in the Carnival of Personal Finance #170 @ The Personal Financier.

Photo Credit: aussiegall


What’s a Better Deal, Rebates or a Lower Price?

By: Green Panda | Date posted: September 08, 2008 (4:35 pm)

Photo Credit: richardmasoner

I think having a lower price is a better deal, but sometimes rebates offer huge discounts. When we joined Cingular, they had a great rebate deal on a phone that would make it free. It had the features we wanted and who could beat free?

The problem? We didn’t redeem the rebate. So while we got a decent deal, we left some money on the table. We fell into the trap of rebates: we were too lazy to complete the paperwork.

Why do retailers offer rebates?

  1. Most people are too busy (or lazy) to complete the rebate forms.
  2. It’s a wonderful way to get information on the demographics of their customers.

Here are some tips to work through rebates:

Read the rebate conditions. See if you will get actual money back or a coupon for another of their products. It still happens time to time. You also ant to see how much paperwork is due. Is it simply mailing a form out with receipt or does it involve more legwork?

Send the rebate through certified mail or get a delivery confirmation. You don’t want to do the process more than once. This proves that they did receive the paperwork.

How often do you use rebates? Who has the best rebate programs?

Update: This article was included in the Carnival of Money Stories #77 at My Daily Dollars.

Weekly Round-Up: Paperwork Edition

By: Green Panda | Date posted: September 06, 2008 (11:03 am)

Photo Credit: crowt59

It’s a real shame when you get something accomplished and the only thing not done is mailing in the paperwork. My husband and I finally signed up with Vanguard to rollover his previous job’s 401(k). We got the account information, filled out the application online, and got his online access set up. All that is left is to print the forms and send it to Vanguard.

That was over a week ago.

I just reminded him again to get that done. Once that’s complete, I can publish a post on rolling over retirement accounts. If you don’t see it at least you know why. :P

I decided to do a Top 10 Weekly Round-Up to focus on a few high quality personal finance posts instead of all that I liked. It’s actually harder than you think, as I’m a fan of many bloggers. I hope that this is more helpful for you.

Top 10 Posts From This Week:

I hope your weekend goes well. It’s rainy over here in the Mid-Atlantic, but otherwise ok.

I Can’t Pay All My Bills!

By: Green Panda | Date posted: September 04, 2008 (11:30 pm)

I hope the title didn’t worry you. We’re doing okay with our finances, saving money, paying down debt, etc. I was just reading this week a wave of news stories that had the same theme: how hard it is to pay bills in these difficult times.

Sometimes hard times hit us and we’re left trying to figure out how to pay our bills. I noticed an increase in readers asking for advice on how to pay their bills when their income drops significantly.

It is a mix of circumstances and poor decisions. While we could go for a long debate on making wise financial decisions, I’d thought it be more practical to post some tips on getting finances under control temporarily.

Prioritize Your Expenses

I was reading accounts where people are using their credit cards to pay their bills! That’s insane. It’s not helping the problem, as many cards have high interest rates and will increase your debt load.

The first step is to prioritize your debts, paying the necessities first.

  • Housing: You need a roof over your head. If you have a mortgage, please focus on paying this bill to avoid foreclosure.
  • Food: You need food to survive. Cut out all eating out expenses and stick to grocery foods. Eating sandwiches may not be the popular choice, but it’s the smart one.
  • Utilities: Electric, phone, and water are important utilities. Cancel your cable bills and make sure you’re not paying too much for phone service. You can call and see if you can qualify for assistance or a special payment plan.
  • Car **If you are way over your head with car payments, try selling it to break even. **

Negotiate with Credit Card Companies

Set up a payment plan. If you’re unable to pay the minimum for your credit cards, call them to set up an affordable plan. At the very least, ask them to waive fees and lower your interest rate. Some credit card companies are more willingly to work with you as the economy has hit many families hard. They would rather get some money than no money.

Get the payment plan in writing. It will only add to your headaches if they go back and say they never agreed to the plan.

If they are unwillingly to work with you and bills are mounting, consider transferring to another card with 0% interest. Be care though, as some cards have a fee with transfers. This is a last resort solution, as it’s not getting to the root of the problem, but merely keeping your head above water.

Get a Second Job to Increase Your Income

If you are having extreme difficulty paying your necessities, consider getting a second job, preferably part-time. You don’t want to burn out and lose your main job, but you have to get your finances in gear.These are temporary fixes that can buy you some time to make changes.

While I hope none of my readers have to go through this, the sad reality is it can hit any one of us. We can reduce our chances by reducing debt while we have money. Has anyone been through this? What helped you to survive? Do you have any tips on how to make it work?

Photo Credit:  quaziefoto

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September 2008: Progress Update

By: Green Panda | Date posted: September 02, 2008 (7:47 am)


Summer is over! I’m so sad that it flew by. It’s been eventful for me and I noticed it has been for others. Lynnae is preparing to move to her new home! I’m happy and excited for her family and I hope it goes smoothly.

Let me first review our financial goals for this year:

  • Income: The goal is $70,000 for the year as a family.
  • Spending: I’m going to continue cutting back on eating out to twice a week, including weekends.
  • Investing: I’ll continue to contribute to my Roth IRA.
  • Saving: I will have $2,000 in my emergency fund by September 1, 2008. I would also like to put our income tax return into our house fund toward paying down the car loan.
  • Debt: I would like to pay off my car loan by August December 31, 2008.

Here’s how we’re doing now on our financial goals:

  • Income: I’m going to modify this goal this month. I’m to lower it to $60,000 for the family’s income this year.
  • Spending: I’m doing well with this. I’m also using coupons for the times I do go out. I’m also using smaller meals through the day, so I’m less likely to just want to grab a bite.
  • Investing: I’m going to focus on maintain my IRA. Once I get a steady paycheck, I’ll start my automatic deposits again. My husband has started his 401(k) contributions.
  • Saving: Our joint savings with ING Direct is growing and we’re not expected to touch it. My personal goal is to keep my savings up until I get a regular job.
  • Debt: The car loan balance is now $1,624.53 (I just checked this morning). I enjoy seeing the balance going down.

How are you working on your goals? How have you’ve you coped with unexpected changes?

I’m also happy to say that my post on using your tuition refund to start an emergency fund is included in the Carnival of Personal Finance by One Cave Man’s Financial Journey.

Photo Credit: ivanx

 

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