I am a member of the Money Middletons group on Facebook, which is awesome for middle income earners like myself. I highly recommend you join the group if you also fall into this category (and if you’re reading my blog, chances are pretty high that you do :)). Sometimes, the advice we see regarding personal finance is targeted at high earners. There is no shame in that – I wish I could be categorized as high earning as well, but it does change your approach and ability to pay off debt and become financially independent. If you are making $100,000+ per year, you can probably pretty easily pay off $15,000 in student loan debt in one year. If you are only making $30,000 per year, paying off that much is going to be much more difficult.
One of the moderators of the group creates a thread every Wednesday called “Winning Wednesday” where we can share one money win we had that week, regardless of how small or large it was. I love this idea, because it’s important to celebrate our small wins as we progress through our journey and remind ourselves that every little bit adds up.
Recently, I had a nice small money win with my insurance company. I switched home and auto insurance providers from State Auto to State Farm. I had originally been with State Farm for about eight years and switched to State Auto two years ago when I bought my house. State Farm was significantly more expensive than State Auto. I had always been happy with State Farm but was trying to save a little money wherever I could since I had just made a major purchase. Well, this year, that all changed. My rates from State Auto increased to the point where I was paying $130/month for auto insurance on one vehicle. I’m past the “magic age” of 25 and should have been seeing much more affordable rates, which wasn’t the case. I reached out to other companies to receive quotes, and ended up saving about $10 per month for better coverage through State Farm. Their auto insurance was much less expensive than State Auto’s but their homeowner’s insurance was more; however, I was getting better coverage and still paying less per month overall than I was before.
The most difficult part was motivating myself to reach out to the insurance companies and get the quotes. The rest of the process was smooth and I’m very confident in my decision to switch companies. State Farm has a pretty good reputation and knowing I have better coverage gives me peace of mind, which is really what insurance is all about. I think it’s a good rule of thumb to evaluate your insurance policies every year and get quotes from companies to ensure you are getting the best value. I know it is definitely something I will start implementing on an annual basis.
Another item of importance regarding my insurance is the deductible amount, specifically for my auto insurance. I have only a $500 deductible, which would be very easy for me to come up with should something happen, as I have been maintaining a minimum of $5,000 in my emergency savings fund (which is quickly increasing so I can sustain myself for at least six months with no income). This experienced caused me to reflect on how far I’ve come financially. I remember arranging for my own auto insurance in college. Just to be able to afford the monthly payment, I had to increase my deductible to $2,000. If I had gotten into an accident where my vehicle was severely damaged, I have no idea how I would have come up with that much money to pay; it likely would have been impossible. I am so thankful that I never had a major incident like that occur, especially during that time, because it would have had the potential to completely derail my financial independence aspirations. My parents would not have been able or willing to give me $2,000, so that natural safety net would not have been available to me.
I have no doubt that my financial success thus far in life can mostly be attributed to hard work and wise money management; however, pure luck and circumstance has played a role as well. Again, if any major incident such as a car accident, personal illness, or job loss could have affected me so much that I would still be trying to repair my situation today.
Have you ever switched insurance providers? What was your experience like? Tell me in the comments!