Are You Standing Financially Naked When It Comes to Your Personal Finances?


Simple Financial Lifestyle - Standing Financially naked

If you want to simplify your personal finances make sure your covered. What I mean by this is you want to make sure you have the appropriate amount of insurance coverage. You do not want to be left standing naked when a medical, natural disaster, or other financial situation occurs which can place a significant financial burden on you.

Often times we may cut corners or look for cheapest insurance coverage.  This results in not have  proper insurance coverage because we say hey its not going to happen to me. But you never know its always better to be prepared for the situation than unprepared. Think of it this way can you afford to rebuild your home if it was significantly damaged without having adequate insurance coverage? Probably not. So why put your financial future at risk to save a few extra bucks each month.

Here are a few steps for you to take to make sure you are not left standing financially naked:

Annually review your insurance policies

Dust off that old policy to determine the amount of coverage you have as well as determine what is covered.  Have you purchased an insurance policies and never reviewed the policy until you needed to place a claim and then find out what you thought was covered is not covered.  Often you may have established your policy several years ago and your financial situation was different than it is today. So remember to review your policies to understand your coverage and make sure you have adequate coverage.

Review your deductible

Know your deductible amount and make sure it is adequate. An easy way to lower your lower insurance bill is to increase your deductible or reduce the amount of coverage you carry on the policy. Before you decide to increase your deductible consider the impact this can have on your financial situation. Yes it can lower your monthly or annual payment but what will happen when you need to file a claim will you have the funds to cover the repairs. For example, you may be able save money by increasing your deductible from $1,000 to $2,000 but do you have the additional funds saved in your emergency fund if something does occur. Look at the worse case and if your able to cover yourself without putting yourself in a significant financial burden if something does occur go for it. Just think before you do something just to save a few bucks each month.  If you do decide to increase your deductible to save each month consider put the additional saving in your emergency fund. The long-term consequences can be more damaging than the short-term relieve you will receive.

Financial stability of insurance company

How stable is your insurance company will the company be able to cover your claims. From year to year the financial stability of your insurance company can change which may impact their ability to pay your claims. What you don’t want to happen is your insurance company to go out of business when you need them. Trust me it does happen. Luckily, my claims were paid. So check on your insurance company’s rating to find out their financial situation.

Adequate coverage

Review your current financial situation and determine your appropriate coverage. For example, has your home increased in value and you may need to increase the coverage. Have you made improvements or additions to your home which were not originally covered. Do you have significant cash or emergency fund to cover a higher deductible or do you need to lower your deductible due to lack of cash reserves. Do you have additional drivers in your household and need to review your current auto insurance.  You have a new addition to the family and you need to review your medical coverage. Make sure you are covered for your current situation. What was sufficient last year or several years ago may not be sufficient coverage today.  Make sure you coverage meets your current needs.

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Pay your premium on time

One of the worse feelings is finding out your insurance has been dropped because you did not pay your premium on time. Most insurance policy premiums have 30 day grace periods, which allows you to pay your premium within 30 days of its due date. However, if you forget to pay it within those 30 days you could be dropped and it is possible you may have to wait 30 days or longer to be reinstated. This means you will not be covered during this period so you may want to cross your fingers and hope nothing happens during that time. An easy solution to this is to set up an automatic debit from your bank account to pay the premium or have the premium automatically charged to your credit card.

Here are six insurance policies depending on your situation you should consider so you are not left standing financially naked:

1) Homeowner’s / renter’s insurance
2) Medical insurance
3) Car insurance
4) Natural disaster insurance
5) Life insurance
6) Disability insurance

If you want to live a simple financial lifestyle take action now by reviewing your existing insurance coverage to make sure your adequately covered so your not left standing financially naked wondering what to do now or how am I going to pay for

When was the last time you reviewed your insurance policies to make sure your coverage is adequate for your current financial situation?

Til next time take it one step at a time to simplify your finances.

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Ask Before You Make a Switch

SFL Ask Before Switch


In my recent post  Is Rate the Only Thing That Matters, I discussed how if you are looking to simplify your finances you can not just look at the rate you will receive.  You have to ask yourself a few questions before you open the new account.  If you open a new account just to receive a better rate you may end up with more accounts then you really need.  This could lead to your finances getting out of control because you have more accounts than you can realistically manage.

Every so often I will receive offers from various service providers that offer services at a lower rate than I am currently paying.  I am sure you receive these offers as well.  When you receive a better rate from another provider why not do a little comparison shopping to see if the services are similar to what you are currently receiving.  Instead of going through the hassle to make the switch to another provider reach out to your current bank, credit card company, mortgage company or other provider to see if they are willing to match or improve the offer you received from competitor.  Its unlikely that your current provider would reach out to you to inform you about a better rate or offer they are currently offering.  Since you are a current customer there is no incentive for them to improve or change your current pricing or offering.  But if you reach out to inform them you have received a better offer, they now have an incentive and reason to possibly match or improve your rate or services.  They may not want to lose you as a customer.  If they are willing to match the rate or improve your current service, it will save you the hassle of changing providers as well as saves you some money.

I recently experienced this when I changed internet and security system providers to save money.  I checked with former providers prior to switching services and they gave me their standard pricing.  However when I called to  cancel my services both were willing to offer better or matching deals.  However, it was to late then the new company had already installed the new equipment and was providing service.  Pricing was not my only reason for changing the services.  I also was looking to consolidate providers which means instead of two bills to pay and keep track only have one now.  I was also able to save on my monthly bill and upgrade my services by doing this.

Instead of waiting for an offer consider doing a little research on your own to improve pricing or services.  Here are a few providers that may consider matching an offer from another provider:

Insurance Provider

Maybe month or two before your home and car insurance policies come up for annual renewal why not reach out to one or two other providers to obtain quote for similar coverage.  This way when you receive your renewal notice you will know what other providers are quoting for a similar coverage.  If the renewal is higher than what you have received from other providers, you can always go back to current provider to see if they would match the rate you received from other insurance agencies. Being a little proactive is always good.



If you are considering buying a new home or refinancing existing mortgage, call other mortgage companies to receive a few mortgage quotes.  Then you can reach out to your current mortgage company to see if their rates are in line with the other companies are offering.  They probably would not want to lose the mortgage so why not see if they can improve rate on a new mortgage or refinance.

Here are a few other providers who may consider matching a competitors rate if you ask:

  • Phone services
  • Cable
  • Electric
  • Security system
  • Internet provider
  • Gym membership

Can you think of any other providers that may consider matching the rate of another provider?

Asking current provider to match competitors rate or offer is great way you can simplify.  Instead of spending time making the change you can ask for match and receive it then your existing provider must make the adjustment to the bill.  You only have to make sure the adjustment was made.  If you have to switch you probably have to complete new paperwork, schedule time for service to be installed.  It never hurts to ask.  You never know they may say yes but you have to take action by asking.

Til next time take one step at a time to simplify your finances.

Copyright: iqoncept / 123RF Stock Photo

Do you have a Emergency Financial File to simplify your personal finances?

Do you are your spouse manage all of your financial matters? If so what happens to your personal finances if the other is hospitalized or unexpectedly passes away? Would the non-CFO of the house know what to do to manage the family finances? In my post Financially Prepare your Spouse in order to Simplify I explain what the non-spouse needs to know in order to manage the family finances. Now its time to take it a step further. In order to make it even easier for the non-CFO spouse, you must create a file to explain what needs to be done to manage the family finances. I would label this file Emergency Financial File. This file should be filed with all of your other financial documents or in a location your spouse has access to and can quickly put their hands on it when needed. I would even purchase a red folder so it stands out from all of your other files.

This file should contain the following information:

Passwords and Login IDs
If you are truly trying to simplify your personal finances most of your personal financial information should be accessible online. You want to leave a listing of all of your passwords and log in information in the file. Make sure you are updating the file when you change any of your passwords.

Account Numbers
You want to leave a listing of all account numbers. This should include deposit accounts numbers, credit card account numbers, investment account numbers, retirement account numbers and any other financial related account number. If you have multiple banking relationships be sure to identify each bank as well. You don’t want them guessing what account number goes with what bank. A simple way to do this would be to make a copy of the first page of each account statement at least once a year and place the copy in the file.

Contact Names
You want to make a list of all financial contacts and place them in the file. These contacts should include all insurance contacts, accountants, attorney, investment advisors, and bank contacts. Many of these contact names should be on your account statements.

Location of assets
By keeping a copy of the statements this will help identify the location of assets but don’t forget those assets that you may hold in a safe deposit box or in personal home safe. Many individuals hold important financial documents, wills, jewelry and stock and bond certificates in deposit box or safe. You want to identify where those assets and documents are held. NOTE: If you hold assets or documents in safe deposit box make sure your spouse has access to the box and knows where the key is located.

Listing of all expenses
Create a list of all expenses and due dates so if your spouse had to step in and take over the finances. They would be aware of what needs to be paid and when it is due. Yes a bill may come in the mail but its better to provide them a list so they know what needs to be paid and when.

Begin gathering all of the information discussed above so you can create your Emergency Financial File immediately. You just never know when it will be needed. The more information you provide the easier it will be on your spouse or whoever is left to manage your personal finances.

Remember take one step at a time to simplify your personal finances.

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How shopping helped me save over $500 on insurance

Save Money - Green Button

A great way to simplify your personal finances as well as save you some money is to do a little shopping. I am not talking about going to the mall to shop for clothes. I am talking about just picking up the phone to do some comparison shopping.

I recently received my annual renewal for my homeowner’s insurance. Upon reviewing the renewal notice, I was a little shocked at the cost of my renewal. What even shocked me more was the fact that my coverage was not increased. I had been insured with this company the past four years and I never had a claim. So I called my agent to ask why such a large increase in premium. They stated due to recent natural disasters their cost has increased so everyone was seeing a significant increase in their premium. With that said, I decided it was time to do a little shopping just to see if other companies had increased their premiums also. If that was the case I was ok but I wanted to see before I renewed my policy.

I called three different companies to provide me quotes based on my existing coverage. All three companies came back with quotes lower than my new premium. So I decided it was worth my time to review these quotes in more detail as well as review the company as well. I did not want to change insurance providers just to lower my premium but receive less than satisfactory customer service or the insurance company not be there when you need them. After that review I was able to eliminate one of the three companies. This left me with two companies with very similar quotes. However, one company decide to provide me with a quote based on having my car insurance with them as well. When they applied the car insurance it lower the homeowner’s policy even lower and was able to reduce my existing car insurance also. So by combining my home owner’s insurance with my car insurance, I was able to save a little over $800 annually. Not only did I save but I also have more homeowner’s coverage than I had previously.

With a few phone calls and a little research, I started this year off with a $800 savings. Its a great way to start off the new year.

Here are some steps to help you do the same thing but I can not guarantee you will save as much:

  1. Question your rate increase?  Ask the reason for the increase.
  2. Call other insurance companies for quotes on a similar coverage
  3. Perform due diligence on the companies you receive quotes from
  4. Ask for quotes on homeowner’s and car insurance you may receive an additional savings.
  5. Don’t make decision based solely on price make sure coverage is same or better.  You don’t want to save by having less coverage.

Take Action

When you receive your next renewal notice in the mail, do a little insurance shopping before you send your payment.

Not only did I save some money but I also simplified my finances by consolidating my insurance carrier.

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