Sometimes procrastination can be expensive. I discovered recently that I had become complacent about some things in my finances.
I told you last week that I had bought a new (to me) car and had used financing available through the dealership that was not my best deal. I knew when I bought the car that I was going to refinance the loan at a lower rate with my credit union. But I bought the car in May and didn’t get around to handling the refinance until November. Now that it’s done, I’m paying $8 more per month, but for 6 months less than it would have been had I not refinanced. Ultimately this is saving me more than $900 in interest. If I had done it sooner it would have been a lot more. But I procrastinated.
My husband used to drive for Uber. If you’ve ever been picked up by a really big guy in a little black Prius, that was him. But he decided to give up the driving business after spring semester. I should have called my insurance company immediately to let them know that our vehicle usage had changed. But I procrastinated. I finally reached out to my insurance company last week, and now I’m going to be paying about $30 per month less for my car insurance. Procrastination cost me $150.
I’ve long been a fan of online savings accounts. The interest rates are always a lot higher because they don’t have the overhead expenses that bricks and mortar banks do. I jumped onto the online banking train nearly 15 years ago with ING. A couple of years ago ING folded and all of a sudden my accounts were with Capital One 360. I’ve never loved Capital One, but I didn’t really think about it at the time. No banks were paying much in interest at the time, so I just rolled with it. But savings rates have been creeping up for the last year or so. I decided to take a look to see where things were with Capital One 360 and was surprised to see things were not so great. Their rates are comparable to other online banks, but only if you carry a balance of $10,000 or more. Since I don’t have anywhere near that, I was only earning about half of what I could have been on my meager savings. So I started shopping. Now I have a brand new online savings account with Ally Bank (one of three options I decided were worthwhile—Discover and Amex also have great rates and good reviews). I’ll be earning almost twice the interest I was before, and I no longer have to deal with a bank I never wanted to choose in the first place.
Finances are definitely a participation sport. You have to put in some effort to get the best results. If you don’t….you end up missing out. Procrastination can be expensive. Have you been putting the necessary work into your money? If not, it’s time to think about it!
For me auto insurance has always been one of those things that I’ve had on auto-pilot. I pay for it, hope I never need it, and I forget about it. Until last Wednesday. That’s the day that PA-322 emerged victorious in the battle of Prius versus snow covered roads. And, after thankfully escaping unharmed and driving the damaged car away from the scene of the accident, that’s the night I started paying a lot closer attention to my auto insurance policy.
When you set up your car insurance, there are a lot of things you need to pay attention to:
- How much is your deductible? The lower your deductible, the more you’ll pay each year for your insurance,but the less you’ll pay in case of a claim. I opted to keep my deductible low, so now I only have to come up with $250. My insurance company is going to cover all of the rest of the bill to repair the car.
- Do you need comprehensive insurance? If you carry only the state minimum insurance, that covers only liability and possibly collision. Collision actually would have been enough for my accident. But on that very same snowy day a friend of mine hit a deer. And he was not carrying comprehensive insurance. His accident was not covered. At all. Comprehensive covers you against things like theft (of either the vehicle or property within), glass breakage, damage resulting from something other than a collision (such as fire or falling objects) and damage from hitting an animal. There’s a reasonably good chance that one of these things (especially the deer situation) could happen in central Pennsylvania, so if you are not carrying comprehensive insurance, it might be worth adding it.
- Do you need a replacement vehicle during repairs? I do pay a little extra to cover the cost of a rental car during the time my car is being repaired. It turns out I didn’t really need it this time, so I’m saving myself a little money (my insurance covers only 80% of rental car expense) and living as part of a one-car family until my Prius is repaired in a week or so. (I’m grateful that my friends were willing to cart me around for a day until we sorted out the details of how to make that work!) But if you can’t get by without your car, rental replacement is coverage you should consider.
- How much work do you have to do up front after an accident? I’m feeling very fortunate that my insurance company has been wonderful through this process. They have a deal with several area auto repair shops where I can take my car without having to have an insurance person come view the car and without having to get multiple estimates. As long as I stick with the preferred shops (and the one I would have chosen anyway was on the list!), then I just take it in and forget it. The insurance company will accept their estimate without comparing it to others. And the insurance company will make payment directly to the auto shop. I just have to wait for the repairs to be complete then pay my deductible to the auto shop when the work is done. Amazingly easy. And that’s a really big deal. How does it work with your insurance company?
No one ever wants to think about using their auto insurance. But the day is likely to come when you’ll need to. Do you have enough coverage? Can you afford your deductible? Will your insurance company be easy to work with after an accident? It’s definitely better to think about these things BEFORE you find yourself losing a battle against a snowy road or a wayward deer.