Do you want to modify your budget to squeeze the value from every hard-earned dollar? This is an excellent time to find some hacks that will allow you to save as much of your funds as possible and eradicate any wasteful spending.
Evaluating monthly expenses to get familiar with your cash flow is a good first step, but read on for actionable tips that will impact your bottom line.
Identifying Wiggle Room for Savings
A spreadsheet is a great and tangible expense tracking tool. Using an Excel table or paper ledger, quickly charts expenses and income for an accurate overview of your financial status. Lowering any large expenditures can add up quickly to increase your affluence and cancel out wasted spending.
Housing is the largest expense and often represents 33% of the average income, including utilities. Transportation is the second-largest cost at 16%, followed by personal insurance 12%, Utilities at just under 10%, then health care 8%, followed closely by groceries at 7%. With all of that said, let’s dig in!
Income Growth is Miniscule – Now What?
The Cost of Living and income increases are seriously out of balance today. Housing expenses, health insurance, and food costs are all exponentially fluctuating upward. Income growth has in no way kept pace with these increases for young adults or even older wage earners. The hacks that offer wiggle room are often small, such as:
- Giving up your Starbucks coffee cravings for homebrew. This cost adds up quickly
- Dialing down the thermostat and layering warm clothing
- Using LED bulbs to save energy and the planet
- Conserving water usage
- Purchase refurbished technological equipment and energy star appliances
- Use Apps to earn cashback
- Bringing your lunch to work
- Using free music streaming services
- Buying unbranded items
- Shopping for used items on Facebook Marketplace, Letgo, and ThredUP
- Drive the most gas-efficient car you can afford and use unleaded gas
- Purchase foods using store ads for savings, sign up for loyalty programs
All of these hack’s work, and over time, they do increase your bank balance. However, many consider another option, namely raising your auto insurance deductible, and it can make a sizable impact on your budget.
Raising Your Auto Insurance Deductible Hack – Benefits vs. Risk
The 16% bite that transportation takes from your income can be reduced if you hack it by raising your auto insurance deductible. However, you need to determine your “risk tolerance.” The strategies captioned above are low risk. This hack is definitely higher. Now is the perfect time to talk to Freeway Auto Insurance. They can assist you with determining what you must consider before you make any significant changes to your auto insurance deductible.
Consider this; the higher the auto insurance deductible is, the less you will pay for your monthly premium. This can bring significant savings and extremely beneficial. If you increase the deductible amount from $500 to $1000, you could actually expect a savings of up 15% or more. This is a happy reality. Check with your insurance provider to factor in any claims already made and find out if this is the most advantageous way to increase your savings.
The Risk Tolerance Issues
If you are driving less because you work remotely, raising the deductible could be the way to prosper. If you live in a suburb or rural area with low traffic, it could work well for you as fewer cars mean less risk.
To determine what you can easily afford, consider what you would have left in your savings for other emergencies should a claim be filed. Do the math. What dollar amount can you readily afford to payout? What effect would losing a large amount of money due to a traffic accident claim for repairs have on your fiscal well-being?
Could reducing your coverage be a less risky action to take? What does your State require in order for you and your passengers to drive safely? How little is too little insurance coverage? How much does raising the deductible put into your bank account annually? Money makes money. This is one viable way to save in this sluggish economy if the aforementioned questions do not nullify this as an option for you.
More Breathing Room – Less Risk
While you contemplate the savings that an increased deductible would provide, ideate these additional lower risk hacks that might let you ‘ease on down the road’ without sacrificing your lower deductible and still save. What if you:
- Earned deep discounts for signing up for electronic monitoring usage-based insurance that tracks your driving habits over time. This program allows for up to 50% savings on your premiums.
- Do whatever it takes to improve your credit score. Then have your rates reviewed for a discount, based on the higher number.
- Purchase a more “insurance friendly car,” with a low theft rate, which has standard amenities and is not too expensive.
Risk/Reward – You Decide
There are ways to save on your auto insurance. An increased deductible can work and save you money. It is only a risk, based on your ability to pay a large claim, if necessary. Talk to an auto insurance expert. Get the facts.