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Archive for the ‘Risk Management’ Category

Four Money Mistakes You Might Be Making

Tuesday, July 3rd, 2012

Four years after the economic crisis led many Americans to re-evaluate their financial picture, economic uncertainty is still the norm. While there’s little you can do about the shaky economy, you can help stabilize your own finances over the long term by evaluating what you’re doing right … and wrong. There’s no guarantee, but avoiding these four money mistakes may help you survive and ultimately thrive in any turbulent economy.

Mistake 1: Jumping on the bandwagon

Are you letting economic news–good or bad–control your financial decisions? For example, are you selling gold because you’ve heard that prices are at record highs or buying real estate because you’ve heard that prices are at record lows? Have you decided to pull most of your money out of the stock market because you’ve seen headlines warning of a possible financial crisis? Unless you’re basing your decisions on your own needs and circumstances rather than on the opinions or actions of others, you can’t be sure you’re doing what’s right for you. Instead of jumping on the bandwagon, take a proactive, rather than reactive, approach to your finances, no matter what economic news you’re hearing or what other investors are doing. Revisit your tolerance for risk and your own financial goals, and try to prepare yourself for a variety of scenarios. Avoid basing money decisions on emotion, or you may find yourself facing unanticipated consequences down the road.

Mistake 2: Only saving what’s left over

Do you continue to worry that you’re not saving enough? Do you routinely rely on credit rather than cash to pay for the things you want or need? Rather than blame your financial inertia on your income, look a bit deeper, because the real culprit may be the lack of financial priorities. If you don’t know exactly how you’re spending your money and you haven’t set financial goals, it’s unlikely that you’ll see much financial progress.

Go back to basics by preparing (or reviewing) your budget. If you tend to save only what you have left over every month, you can put yourself on a more disciplined course by having a fixed amount taken out of your paycheck automatically for retirement. Or, you can set up automatic transfers from your checking account to a savings or investment account.

Mistake 3: Not having an emergency fund

One lesson that you may have learned over the past few years is that the job market isn’t stable. That’s a major reason why one of your savings priorities should be an emergency fund. While it isn’t glamorous, this underappreciated workhorse really pulls its weight during hard times. Having cash on hand that you can use for an unexpected expense, or to pay bills if you lose your job, is vital because it can help you avoid having to rely on credit or tap your retirement savings. If you don’t have emergency
savings to fall back on, a minor money shortfall can quickly turn into a major cash crisis.

Mistake 4: Not asking for help

Even if your finances are in good shape right now, you may be overdue for a checkup. Reviewing your finances is especially important during periods of volatility because it can help reveal potential strengths and weaknesses, and identify changes you might need to make to adjust to the current economic climate. And if you’re already in financial trouble, don’t let fear or shame prevent you from asking for help. Facing financial problems early may help you make a full recovery. Many creditors are willing to work with you, but this may be much easier while your credit is still good, and while you still have time to turn things around.

Tips for Lowering Your Auto Insurance Premiums

Wednesday, May 18th, 2011

If you have not reviewed your auto insurance policy within the past two years, you may want to consider the following steps that could help you save money. Although these tips are designed to be helpful, keep in mind that your driving record and the area where your car is domiciled can significantly influence your premium.

  • Ask for a discount. Some insurers offer discounts for policyholders with low mileage and for households that purchase homeowner’s insurance and car insurance from the same carrier. Policies that cover teen drivers may charge less if the teenagers have completed driver education. Note that some carriers that offer many discounts or generous discounts charge higher-than-average rates.
  • Shop around. Several weeks before your existing policy is set to expire, comparison shop among several carriers. When asking for quotes, be sure to make an apples-to-apples comparison on the type of coverage provided.
  • Switch to a higher deductible. Depending on the amount of the increase, you could ultimately save between 15% and 40% on collision and comprehensive coverage. Keep in mind that a higher deductible will mean that you will bear a higher portion of the cost if you have an accident or if your vehicle is stolen or vandalized.
  • Consider dropping certain coverage. For older cars with low market value, consider dropping collision or comprehensive coverage. These types of coverage may no longer be worthwhile because the amount of a claim probably would not exceed the combined value of the premium and the deductible. To determine the value of your car, visit
  • Pay your entire premium up front. Many carriers charge extra when drivers pay in installments.
  • Research the insurance costs of any new or used vehicle you may purchase. The year, make, and model of a vehicle impact insurance rates. Insuring new, expensive, and sporty cars tends to cost more than insuring older and more economical vehicles. In addition, you may pay more to insure a car that has a higher theft rate or that has a record of higher-than-average insurance payouts in accidents. To learn how a particular vehicle compares with others, visit the Web site of the Insurance Institute for Highway Safety at

Although price is important, in the end, remember that the objective of auto insurance is having the coverage you need in the event of accident, theft, or damage.