The Free Financial Advisor

You are here: Home / Archives for Lists

5 Secrets Auto Insurance Agents Won’t Share

by 4 Comments

5 Secrets Auto Insurance Agents Won't ShareCar insurance agents, for quite awhile, have been the butt of finance-related jokes. Lately though, with hard-hitting advertisements from big firms like State Farm and Allstate, agents are fighting back. People are beginning to understand that while you may pay less with an online auto insurance service, there’s a ton of value attached to having an insurer who’s there when you need them.

But that doesn’t make agents little angels, either, does it?

Insurance agents have a few tricks up their sleeves, and the more you know about those tricks, the easier it’ll be to navigate meetings and phone calls in the future.

Here are my favorite 5:

1)   Auto insurance is a loss-leader. Maybe the insurance company makes money on auto insurance, but the agent doesn’t. Auto insurance pays so little that it’s very difficult for an agent to survive. Therefore, the agent will sell you an auto policy as a way in to your heart. Most agents have a full line of far more lucrative products, ranging from life insurance to annuities, that they’d love to sell to you.

2)   If you don’t ask about the discount, I might not tell. This isn’t universal, but agents hoping to make a few extra bucks might try and steer clear from discussions about discounts. Because the agent is paid a commission based on the amount you pay, it’s in their interest for you to pay more.

Of course, agents who are after the “bigger picture” will try to give you as large a discount as they can find. That way, when you’re looking for help in other areas, you’ll come running back to them for advice.

3)   That multi-line discount, while giving you a little off the premium, might not be your cheapest option. For years, I’ve had my auto coverage through a different insurer than my homeowners. Yet, agents always ask me if I have a multi-line discount. I’ve found that by forgetting this discount and paying  a little more, I still save in the aggregate by purchasing from separate insurers.

Why doesn’t the agent share this one? That’s easy. Wouldn’t you rather have a client who thinks they’re getting a discount AND who owns two of your products instead of only one? You betcha.

…by forgetting this discount and paying  a little more, I still save in the aggregate by purchasing from separate insurers.

4)   I’m not going to monitor your policy. I remember people getting angry because their insurance agent never called them except when she wanted to sell something else. They never asked about bithdays or new discounts that might apply to the client. Simply put: agents don’t have time to waste on these small issues. With several hundred (or thousands) of clients, there simply isn’t enough time in the day for those personal calls. It’s up to you to take care of your own needs. Call your agent periodically to review your policy for discount opportunities and new rates based on any changes in your life.

5)   My assistant knows a ton more about you than I do. In most offices, the assistant handles 85% of the day-to-day “low commission” business. I always told my clients that for routine business calls, ask for the assistant, not the agent. While the agent might take two days to return your call, the assistant may be available right now to take care of address changes, premium payment changes, or small policy questions.

That doesn’t mean you should ask the assistant if you really need that permanent life policy. If you think your question is at all technical, talk to the agent for your best answer.

4 Factors to Weigh When Choosing a College

by 5 Comments

college search 4 factors choose collegeCollege students in America are facing a financial crisis.

According to the Center for American Progress, more than 13 percent of students who started loan repayment in 2009 wound up in default by September 2012. Another 26 percent of those borrowers were delinquent.

Ouch.

Many experts argue that the causes for these epidemic rates are systemic: College is getting more expensive, forcing students to borrow more, but the rising cost of college degrees is not being met by increasing value of those educations.

Many students who began loan repayment in 2009 entered into an economy that struggled to create new jobs for the youngest generation, resulting in an employment crunch where college education was not rewarded with the employment they merited. With horror stories running rampant, today’s prospective college student is increasingly weighing the cost of college against its supposed value. If you’re facing a similar situation, here are some financial considerations to keep in mind:

Consider the Total Costs

For many students, college is expensive. But there are other costs associated with college that are worth considering when weighing the total cost. For example, if you go to a school where you need to own a car, you’ll have to pay for the up-front cost of the vehicle plus maintenance, gas and insurance while you’re in school. That could easily up the price of college by thousands of dollars per year, depending on the vehicle.

And if you plan to live off-campus, the local cost-of-living might also factor in. Consider housing prices, food budgeting, and other situational costs that might affect how you consider the overall cost of attending one college over another.

How Does Financial Aid Vary?

Federal financial aid is typically awarded according to your family’s presumed ability to pay for college. This affects the federal grants you qualify for as well as the types of student loans you are eligible to borrow. Additionally, individual schools also have financial aid packages that can feature an array of scholarships and grants. Depending on the school you plan to attend, strong students can sometimes lobby for better financial aid packages.

Because your financial aid is likely to be different at every school, you need to get hard numbers from each institution, and use this aid to reassess your college options. One report by HCM Strategists identified financial aid packages and emerging aid channels as vital tools to make college more affordable. These tools help avoid the worsening student-debt crisis, so don’t ignore how these alternatives might create much-needed economic relief.

You can even receive financial aid if you enroll in an online institution, depending on your overall financial need. Contact your school’s admissions advisor for more information on state loans, personal loans, veterans’ benefits, and tuition reimbursement through your employer. The tuition reimbursement program is a great option for employers who want to invest in their employees and keep them around long-term.

Will You Get Your Money’s Worth?

When it comes to saving money in order to get more bang for your buck, students have a number of options available to them. They may choose to first attend a community college and complete general education requirements while the costs are low. It’s also helpful to keep online college courses in mind, particularly if you’re looking to maintain flexibility while juggling school and a job. Browse a directory of online colleges and programs to educate yourself on all of the options available to you. Scourge the web for all available online college resources you can find, and start comparing and contrasting each resource.

For Some, It May Depend on Your Major

A college education can offer job prospects and income opportunities that vary widely across different majors. According to a report from Georgetown University’s Center on Education and the Workforce, unemployment rates tend to be much higher for some courses of study than for others, as Forbes highlights.

Architecture graduates have the highest current unemployment rate, largely because the stagnant economy has deflated demand for new buildings. Not far behind are Arts, Humanities and Social Sciences, all of which have unemployment rates of 8.9 percent or greater.

Given those numbers, students might find it particularly risky to invest in an expensive education that offers poor income prospects and a high risk of unemployment. Degrees in business and other stable professions, on the other hand, are more likely to deliver a strong return, making it more practical to spend for a more expensive education.

The 5 Dumbest New Year’s Resolutions of All Time

by 2 Comments

New Years.

A time of overeating, watching football or old movies, and resolving to do better, maybe a week or two in the future…..

Are we at that point yet? Is anyone “doing better” yet?

Resolving and actually “doing” better are two totally different things, aren’t they? New Year’s resolutions are usually bound to fail….especially if you try any of these silly tactics:

5 Dumbest New Year’s Resolutions Phrases

1)   Losing weight “on your own”: Yeah, I know. You’re going to lose weight or build savings without any help from your friends. This resolution is like putting a bunch of French fries in front of you and saying you won’t eat them. Of course you’ll eat them….willpower is baloney. Don’t count on any goal that you’ll do “without help.”

Who needs to reinvent the wheel?

 

Better solution: find someone who’s done it before and ask them for help.

 

2)   Joining a gym so you’ll work out. Back when I belonged to a gym (before I began working out with friends), my least favorite time of year was the first two weeks of January. The gym was packed with people I’d never seen before….and wouldn’t see again the rest of the year.

Don’t convince yourself that by joining ANYTHING you’ll actually make the commitment to change. Instead, build systems to change. For workouts, force yourself out of bed at a certain time. Join chat groups on working out.  Read magazines. Track your progress.

Create goals that begin with “How can I learn about this now and then spend money when I prove I’ll stick with it?…..”

 

Better solution: create surround sound environment so you succeed in your goals….and spend money later, once you know you’re serious.

 

5 dumbest resolutions ever_FFA

3)   Deciding to save more every month by “writing a check.” Nobody….and I mean nobody…..writes a check toward their goals. If we want to get all 2010 about it, nobody even presses buttons to transfer money from one account to another. Do you know how the ballers do it? They save automatically. If you have to think for only a minute about your goals, you’re toast.


Better solution: Set up a system of saving that doesn’t require you to think.

 

4)   “I’ll try and…..” 

Best. Solution. Ever.: Repeat after Yoda. There is no try. Only do.

5)   I’ll cut back on smoking. Making a change halfway is a sign that you really aren’t commited to the goal. Want to achieve something? You can’t be half pregnant. Go for it. Don’t cut back on smoking: stop completely. Don’t save “a little more” toward your goals: find out what they cost and create a plan. Don’t try and budget this year: set up an account at Mint or Yodlee and track every penny automatically.

 

Better solution: Create automatic systems that will change your behavior completely.

Photo: Jeff_Golden

5 Cardinal Sins That Kill New Businesses – 2GYM 059

by Leave a Comment

Thinking of starting a new business? Listen to this podcast first! OG & Joe tackle five big mistakes that new small business owners make. Most new businesses are doomed before they begin because they fail to remember a few basic rules. Our list of five includes both some of the basics AND some of the tricks that super-successful businesses are able to use to beat the competition.

SHOW NOTES

<> Open

<> Amazon.com – Give yourself a last-minute holiday gift! Head to Amazon.com to score your favorite deals. When you use our handy link you’ll also help the podcast. Thanks for supporting 2 Guys and Your Money!

<> 5 Mistakes Small Businesses Make

 

5 Steps Before Tying the Knot

by Leave a Comment

It’s your big day. Are you prepared financially?

We’ve all heard that statistics: many marriages end up in divorce. The #1 issue couples fight about is finance. Instead of ignoring these stats, why not meet them head on? There are clear steps you can take to ensure that your family will have a chance of succeeding where others fail.

Create a Debt Strategy

These days many people head into “wedded bliss” woefully unprepared for how to handle real life as a married couple.  Quite often, one or both spouses have student loans or other debt that can be a drag on the beginning years of married life.  Before tying the knot, sit down with your future spouse and walk through both of your credit reports.  This will be a refreshing a “financial cleanse” right before the big day.  Together, you can develop a plan to improve your scores (if necessary) before any large purchases.  You can also put together a plan to eliminate debt as quickly as possible. You’ll have a much stronger chance as a couple if both people know the entire playing field before the wedding.

Set Up Your Budget

The budget discussion is one of the most challenging ones a couple can have.  Depending on how long it’s been since college days, money can be tight during the early part of one’s career.  You should both agree to the “family” financial meeting (Joe and I discuss this over and over and over again…) and make it a priority each week.  Then, both of you are caught up on each bill, how you’re doing as a couple working toward your goals, and there are no surprises.

Plan For/Against Kids

Children are expensive.  It’s that simple.  You’ve probably already discussed your feelings with your future spouse about kids – how many, your favorite names, etc. – but it’s unlikely that you’ve had the chat about how much they cost.  To put it in perspective, if a client came to me today and wanted to fully fund a 4-year public university degree for a newborn, they’d have to set aside around $400 per month from day one until the child’s 18th birthday to be close.  That’s a lot of money.  Start now if possible – open a 529 plan in your own name, and then if you have children change the beneficiary to them.

Retirement Planning

Planning for the long-term seems so difficult at the beginning of any relationship, but it’s one that must be considered.  Begin your married life by contributing as much as you can to your retirement plans – at least up to the company match, if offered – and plan to add a small increase each time your pay is increased.  The road to millions of dollars starts at $100 a week into your 401(k) plan.  Get started right away.

Commingling Finances

If you’ve been single for a long time, the thought of having someone else pouring over your bank statements questioning every transaction sounds like death by a thousand paper cuts.  Simplify this by having the “his, hers, and ours” accounts and setting up through your budgeting process a small amount that each of you can spend – no questions asked – out of your own accounts.  By using this approach, combined with budgeting together, your financial lives will be blissfully combined, yet separate as well.

Marriage is a big decision and a life changing one at that.  By spending a few hours before you’re married discussing the financial impacts, you can spend more time enjoying your spouse and less time wondering if their credit score is going to make it impossible to buy a new house.

Photo: epSos.de