Archive for Guest Posts

How Cheap Will A Car Be To Insure?

If you’re interested in buying a car, or are looking for insurance for your car that won’t cost a ton in the long run, there are several things you may want to consider, including the make, year, and size of your car, and how much horsepower it has.

I) How Much Horsepower Does a Car Have

Of course it’s common sense that cars with higher horsepower will require more money to insure, because these cars are favored by drivers who like to drive fast and may be inclined towards reckless behavior and prone to accidents.

2) How Common is the Make and Model of a Car

Even though it may seem that nondescript, dependable cars might be quite cheap to insure, this is not always the case. There are some very common, very safe-seeming cars, such as some Honda and Toyota models made in the 90’s, that might cause insurance premiums go up simply because their parts are widely used and durable, making them more likely to be stolen than other cars. The 1995 Honda Civic, for instance, which is a popular, durable model and has sold year after year, has many parts that can be harvested and sold to car owners looking for repairs, and has repeatedly topped lists of “most stolen cars” in recent years.

3) Is Old Cheaper than New

Many people believe that newer cars will be more expensive to insure than older cars, but this is not necessarily the case. Some older cars may lack such basic safety features as crumple zones and anti-lock brakes, which will make a make the health costs of a crash much riskier for an insurance company.

4) Is Smaller Better

Although many believe that smaller cars are likely to cost less because they are more maneuverable, many smaller models might not actually cost you less in insurance. Smaller cars are not only at risk for sustaining more damage during a crash, and thus requiring more repair costs, but smaller, more maneuverable cars are more often involved in crashes than bigger cars simply because they are going faster. A mid-sized car, such as a small van or sedan is often the best size for a low rate. Remember to take into account what type of person (and their habits) usually buys a certain size of car. The driver of a minivan is most likely going to be more cautious, slow, and thus cost less money sports-car drivers.

You should also take into account other details, such as location and weather when you’re buying a car. Although some location factors will up your premium no matter what, such as the likelihood of icy roads in northern states or the likelihood of damage from hurricanes or other storms, some cars might do better in some places than others. A car with four wheel drive might get better insurance if you live in the mountains or a snowy area, while a car that has sophisticated anti-theft protection might cost less in a bigger city or in Texas or California, where cars are often stolen to be sold across the border.

The best approach is to thoroughly research the car you are considering buying, and its strength and weaknesses. How will the insurance company view such a car? Are there known flaws that they will want to compensate for? Also consider your location and weather conditions. Finally, remember to drive safely and responsibly – your personal record is by far the most defining aspect of your car insurance costs.

Mark McCrell is an auto aficionado who loves to drive his 1974 Buick LaSabre around town and write about all things auto. He currently blogs for the website AutoInsuranceQuotes, which specializes in auto insurance tips.

Life Insurance For Newlyweds

As newlyweds committed to a permanent relationship, you’ve started the long downhill slide into finally becoming your parents.  And as part of your new commitment to stability and permanence, perhaps even as part of your first home purchase together, you may be considering life insurance.

The first question you’ll want to answer is, how much life insurance do newlyweds need? The answer it turns out, is ‘it depends’.  It depends on a few factors, including your debt load and mortgage, as well as your attitude towards what you want to have happen financially should you die.

Life insurance is intended to provide a lump sum death benefit when you die.  For it to actually be ‘insurance’ and not a lottery, you, or more specifically your beneficiaries, need to suffer a catastrophic financial loss.  The loss for most of us upon our death is our paycheck – our beneficiaries lose our income when we die.

If you have kids, then most of us would agree that the kids have suffered an unrecoverable financial loss.  They’re entirely dependent on you financially, so if you’re gone, life insurance is the perfect replacement for your income.

However if we assume a stereotypical newlywed couple, we’re looking at two adults with no kids yet.  If one of you should die early, is the surviving spouse dependent upon your income for their future?  And that’s where the ‘it depends’ part comes in.

You’ll need to determine how much, if any, your surviving spouse is dependent on your income.  That answer can vary anywhere from none to 100%.  In addition you’ll need to answer how long they would be dependent on that portion of your income.  If your answer is that they’re not dependent on your income, then you need no life insurance from this perspective.  Alternatively you may decide your spouse will need 30% of your income for 10 years.  In that case simply take 30% of your income and multiply it by 15, and you’ll have a starting point.

The second factor that you may consider life insurance for is if you have a mortgage. Many newlyweds with new homes will need enough life insurance to cover their mortgage as the lender may require it.  This is a fairly straightforward determination – how big is your mortgage?

And finally, some couples seek life insurance just for final expenses and to cover any other debts they may have up to that point.  However bearing in mind that we normally want insurance to cover a catastrophic loss, you’ll need to determine if you in fact see these expenses as catastrophic.  If you determine that burial costs and any outstanding debts can be paid for by the surviving spouse then this would minimize the need for coverage as well.

The final answer is just the rough sum of these three numbers:

  1. Percentage of your income X a number of years (only if you want/need to provide replacement income) plus
  2. Amount of your mortgage, if any, plus
  3. Other outstanding debts and loans, plus final expenses.  (if you consider these costs to be an insurable need).

It’s not much more scientific than that.  Sum those three numbers and you’ll have a reasonable estimate of your insurance costs.  Because these costs are estimates however I recommend rounding up to the nearest multiple of $100,000 or $250,000.  e.g. If you arrive at mortgage plus other debts to be $185,000, I would recommend rounding up to $250,000.  Having a bit of extra coverage is normally relatively inexpensive and having more is always better than having less should you suffer a claim.

In the end, the amount of coverage many newlyweds go with is either minimal, or enough to cover their mortgage plus some additional coverage for final expenses.

Today’s guest post is from Glenn Cooke who is a life insurance broker and president of Life Insurance Canada.com Inc. I had the pleasure of meeting Glenn a few months back when I was inquiring about increasing our life insurance since we are now newlyweds. I have never met anyone who knows as much about life insurance as Glenn. He is passionate and committed to educating consumers on life insurance. 

How can Identity Fraud Lead to Bankruptcy?

This is a guest post from Andrew who is a debt management consultant at Australian Lending Center. Andrew has met a number of people who have debt issues related to identity fraud, and thought it would be a good idea to share his experiences on my blog. Thanks Andrew!

Identity theft is currently the most common type of credit fraud. Modern thieves have surely discovered a new, creative, and effective way to defraud unsuspecting preys. No one can certainly determine how dangerous such a modern crime is until he falls as one of the victims. It will be ideal to learn from other people’s experiences, especially those who have already been victimised by identity fraud.

Thieves accessing your credit and personal information will surely spell huge trouble. In general, they will use the data to get credit, which will be charged to their victims. Unsurprisingly, identity fraud is blamed not just for financial distress, ruined reputation, and an eroded credit history. Worse, it can lead to possible bankruptcy.

Loss of debit or credit cards

Loss of debit or credit cards is among the most common way identity fraud is committed. In many cases, victims lose their plastic cards and forget to immediately call their credit or debit card issuers about that loss. Who would think that in no time, fraud can be committed especially when the cards get to the hands of professional scammers.

In other cases, credit or debit card accounts are hacked when used online. This is rather easier for modern scammers as they have the technology and expertise to make it happen. If you have fallen as a victim, you will be surprised to see significant transactions in your monthly credit card statement.

It may take some time for the fraud to be recognised and corrected. You may end up having a huge credit card debt that filing for a bankruptcy can be considered an option. Yes, some people file for bankruptcy so as not to be forced to repay debts incurred through fraud. This is a path for people who do not care about the status of their credit records.

Stolen identity
The other type of identity fraud is scarier and more risky. It involves stolen identity. Your important personal information can be used by modern thieves to obtain loans, financing, or other types of credits. This is more dangerous especially when those thieves can get away with it. Imagine how much debt you may have without you knowing it.

Many victims of this type of identity fraud have fallen into bankruptcy with or without their consent. Again, bankruptcy is at times taken as an option to avoid having to repay the debts while long processes of investigations are run by authorities.

Fortunately, many governments from all over the world are launching concerted efforts to fight identity fraud. Many measures are also being established to give assistance to unsuspecting and unknowing victims, who may have the surprise of their lives upon knowing their imminent bankruptcy due to debts they did not incur. As consumers, you could help protect yourself by being more careful when carrying and using your credit, debit, or ATM cards and by not easily divulging personal information to others.

My comments: I rarely use my debit/credit card for this reason. Cash is the way to go to help avoid being a victim of fraud. It’s also not a bad idea to check all of your accounts online or over the phone often, to check for transactions that are not yours. Checking your credit bureau once or twice a year will also help to stay on top of things.

Family Savings Plan: How to Get the Entire Family to Save Money

Today’s guest post is from Allan who is a writer over at Australian Lending Center. For Allan, earning money is almost as important as saving it. Over the last 3 years, he has spent a large amount of time blogging on saving strategies. Allan’s favourite topics include savings account reviews, frugal tips, and budgeting.

Spend wisely and live whole-heartedly!

Making both ends meet in today’s time and age is indeed a hefty task. With a rapid increase in utility, mortgage and educational bills, the support of the whole family is vital to ensure a comfortable and satisfied way of life. To maintain a balanced routine, it is necessary to work two fold by cutting down on unwanted luxuries and reducing everyday expenses. The following are some pointers that can easily be adapted by every member of the family to save hard earned money efficiently. Practicing these methods will not only help you save money as a family, but will also induce a sense of responsibility in your kids.

Maintain a Savings Account as a Family
Ask each member of the family to make a list of their WANTS and their NEEDS. Keep a greater focus on the needs of your family, while trying to reduce the wants. This way you will be teaching your kids to save and spend efficiently from a young age.  Encourage your kids to save from their pocket money and collect savings from all the family members in a piggy bank, or a bank account. You can also promise rewards or treats for the most avid saver in your family. This will help to promote good will and encouragement.

Eating at Home
Instead of heading out every now and then for a snack, create yummy dishes at home and bring restaurant quality to your doorstep. Involve the entire family in activities such as cooking, setting the table etc., and try to create a subtle and friendly ambiance at mealtimes. This way you will not only save money, but will also spend quality time with your family.

Pocket Friendly Recreational Activities
Amusement parks and fun galas can be a major burden on your pocket because of the additional charges and expenses involved in these outings. Instead you can go for cheaper yet equally rewarding picnics and outings at the beach or a hillside. Opt for close-to-nature activities like hiking or trekking as they are affordable yet fun, and help in bonding with the family.

Take Advantage of Clearance Sales
Shopping at clearance sales and using discount coupons can help you save a lot of revenue spent on apparel. Instead of buying everything that you can find on the shelf, make a list of what to buy in advance so that you do not end up buying what you do not need. You can also opt for end-of-year sales to get the best deals at an affordable price. Take your kids along with you when you go  shopping so that they can also compare prices offered at various outlets and learn the value of money.

What are some tips you’ve used to save as a family?

My comments: I love the idea of saving as a family. It would be great to see a family save for a family goal, such as a trip to Disney World. Even if the kids aren’t able to save a lot, it gets them into the habit of saving for what they want.

Money & Relationships

This post is a Yakezie blog-swap guest post by Andrea of Nickel by Nickel. Andrea is a 20-something personal finance blogger over at nickelbynickel.com where she covers topics from DIY on a shoestring budget, to saving money and paying off debt: Life, money and everything in between!
Well, I’m a personal finance blogger, I live and breathe finance on an almost-daily basis. I read blog after blog and article after article and spend countless hours balancing and tweaking my budget. (Okay maybe not hours, but you get the point) Finance is something that I manage out of my own free will and not everyone has the same desire to count pennies like I do.

Taking examples from my family and friends there are couples that don’t discuss money, that fight about money, that are completely in sync when it comes to money and then there are couples that know a lot and couples that know a little. Every situation is different which is why I think the single most important point when it comes to relationships and money is communication.

I’m currently single but in my past relationships I have always been the planner, the saver, the geek. I’ve learned that money really can be a breaking point in a relationship. If you don’t handle it well, if you don’t talk about it, if you mismanage it or try to ignore it, it will eventually rear its’ ugly head. I’m certainly no expert on finance or relationships for that matter, but I do have a few ideas of what I think would make things work in a future relationship.

Managing money with open communication

Be clear about your past and current situation before moving in together or getting married. A nasty surprise such as creditors calling when you’ve already moved in together isn’t bound to make a good start to your life together.

I think it is very important to be completely open about finances before making any serious moves. I’ve learned that building a solid and trusting relationship is not just about trusting your partner not to get hot and heavy with the waitress on a boys night out… It’s also about being able to decide where the money goes together and dealing with things such as emergencies and job-loss. If one of you loses their job, how will you manage your money? It’s about trusting the other person to look out for you, not just for your emotional and physical well-being, but also your financial well-being.

Part of open communication is setting aside time to talk about money. Don’t do as I do and bring up money in the middle of a lazy night on the couch with a good movie. Set aside some time to talk about bills that are due and to make plans.

Resolving conflict

Four things couples argue about most: In-laws, religion, children and you guessed it… money. When it comes to handling conflict I realize my own flaws (passive aggressive anyone?)  It takes patience and also maturity to resolve an argument, especially when it is about money.

Patience and kindness will get you much further than stomping out the door angry. Try to understand your partner’s perspective. You were most likely raised differently and were taught different values. Setting and achieving goals together rather than alone is much more satisfying than trying to do it all by yourself.

In short, I think the key to managing your money together and avoiding conflict about money successfully is communication. Don’t try to shoulder the load yourself, there are two people in the relationship and you each have your own goals and dreams, try to find a way to reach those dreams and goals together.

My comments: Scheduling time to talk about money is a great point. Bringing up the topic in the middle of a movie or a football game definitely wouldn’t go over too well. Patience and kindness always works. It’s just trying to remember this when you’re in a heated argument. You can check out my thoughts on this topic right here.

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