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4 key expenses NOT to cut |
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You can also find a payment plan to fit your budget. If you can afford to pay your premium every six months, you might save 10 percent compared to 12 monthly payments. On the other hand, if cash flow is tight, maybe a monthly bill would help you budget, Hollcraft says.
Although teen drivers (and any drivers younger than 25) typically drive up the cost of car insurance, relief is available. Check with your car insurance carrier to see if it's one of the many that offer a good student discount. Other programs for young drivers also are available. For example, State Farm offers a discount program called Steer Clear Safe Driver for parents insuring drivers younger than 25. The drivers must not have had any accidents or moving violations in the past three years, must watch a safety DVD in the agent's office, and must keep a log of their driving experience, says Jeff McCollum, spokesman for State Farm Insurance Co.
7. Home insurance: Cuts that cost you
With a lower appraisal, you may be tempted to save money by reducing the insurance on your home and its contents. Savings will vary by insurance carrier and the value of your home.
Worst case scenario: If you have a home catastrophe, your insurance may not cover everything.
"Even if the value of your home has gone down, the cost to rebuild it has not," Hollcraft says. "The cost of wood and other building materials has not gone down. If you have a loss, you want your insurance to make you whole."
You may also be tempted to look for savings on the liability insurance that covers you if, say, someone trips and falls in your home. Again, your savings will vary. But being without liability insurance can also be troublesome. "In many states, claimants can sue," Hollcraft says. "If you have insurance, the coverage will cover the lawsuit. If not, you'll have to cover the suit by selling assets."
8. Home insurance: Cuts that count
While you can't cut back on everything, you can find savings. If you raise the deductible on your homeowners insurance from $250 or $500 to $1,000, you might save as much as 25 percent, McCollum says. Just make sure you have the difference socked away in savings so you can pay it yourself if disaster strikes.
Finally, if your car, home and other insurance policies aren't with one carrier, look into the savings from consolidating. Most carriers offer a discount to customers who insure multiple cars, their home and other needs.
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