Can’t Afford Your Insurance Deductible? Here Are Some Simple Life Changes You Can Make

When deciding on an insurance deductible for your home, life, health, and auto insurance plans, you might be attracted to the lower deductible and the higher premium. The thought process for such a decision: “I don’t make enough to save money. I’ll never come up with $1,500 on my own.”

Most people fail to realize that there are all kinds of life changes they can make to establish a strong emergency fund to cover deductibles and other expenses outside normal coverage. Here are some simple steps you can take today, courtesy Allstate’s Nicole Markle.

Bundling up during the winter.

This tip seemed pertinent since we’re about to enter the last quarter of the year. Markle notes that “lowering your home temperature one degree in cold months can reduce your bill by 1-3 percent” and that “programming your thermostat to lower the temperature 10-15 degrees when you’re at work can bump your savings to 5-15 percent.”

Not falling for your laundry detergent’s measuring cup scam.

If you’re wearing more clothes during the fall and winter, you’re going to be doing more laundry. That means laundry detergent is liable to become more of an expense. However, Markle warns, “the measuring cup is often deceptive,” adding that “53 percent of people use too much detergent, namely because they fill the cup to the brim.” We would add that making your own detergent is worth looking in to as well. This costs a small fraction of what store-bought product does, and it’s relatively simple to make.

No hard accelerating, no hard braking.

Yes, we know, you have places to be. Still, hurried driving never did you or your car any favors. Instead of mashing the accelerator and brake pedal, go easy on them. Markle writes that “hard accelerating and braking can lower your MPG on the highway by up to 33 percent and in the city by 5 percent.” Furthermore, travel lighter. “The USDE … found that every extra 100 pounds increases your gas cost by about $.07 per gallon.”

Buy in bulk.

Places like Costco that sell groceries in bulk at a much cheaper price tag are largely recommended. Membership to these clubs costs around $40 to $50 each year, but the deals are phenomenal. According to one example that Markle used, dish soaps are up to 29 percent cheaper. And again, that’s just one example.

Seal home leaks.

Home leaks can not only lead to frustration and discomfort, they can explode your utility bills. Markle points out that “the average home has so many leaks around windows and doors that the cost adds up to the equivalent of leaving one window open every day of the year,” adding that you should check for leaks once per year and fix them with caulk or sealing strips from your local hardware store.

Markle shares several more recommendations over at the Allstate blog.

One thing we would like to add to this. If you go ahead and opt for the higher deductible, then a very effective way of creating a strong enough emergency fund to handle your deductible is to do the math and place any money saved between the two premiums in a separate account. Think of it like you’re buying the higher deductible. That way, if you make it through the year without needing it, you’ll have an extra nest egg that can roll over into the new year.

In Summary

Deductibles can be challenging to come up with, and they take some discipline in the way that you save money. However, the benefits of a growing nest egg and a smaller monthly premium make simple life changes well worth the consideration.

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