Car insurance is a legal requirement, and if you don’t have it or make a Statutory Off-Road Notification (SORN) declaration then you could be faced with anything from a fine to imprisonment.  But that’s not the main reason that people buy car insurance – we normally buy it because the cost of having an accident and having to pay for repairs is often very expensive, and if someone is injured and seeks compensation then the cost would increase exponentially.

Yes, we buy car insurance in case we have an accident, and then fervently hope that we’ll never have to claim against it.  But you could have a policy in place but inadvertently make it invalid by making a silly mistake – and wouldn’t it be gutting to pay for your car insurance and then not be able to claim against your policy?

If your policy is invalid for any reason, then not only will your policy not cover the costs of any accident you might experience, you would also be classed as not having car insurance and face criminal penalties.

There are a few different ways that you could invalidate your car insurance without intending to.  Take note of them and make sure your insurance remains valid!

First up are the obvious ones: driving around without an MOT, and driving whilst under the influence of drink or drugs.  It’s illegal to drive a car without an MOT; an MOT is proof that your car is roadworthy, and without that proof neither the police nor your insurers would have any reason to believe that your car was indeed roadworthy at the time of any accident.   If you drink or take drugs and drive, your insurance would normally pay out for damage caused to someone else’s property or for any personal injury they suffered (on the basis that it would be morally wrong for that innocent person to go without compensation just because of your actions).  However, your insurance is very unlikely to pay for damage to you or your car if you were drunk or on drugs at the time of the accident.

Then there are other things that can cause your insurance to become invalid.  You know that pre-recorded information they play when you’re on hold to an insurer whilst you’re waiting to speak to someone to take out a policy?  Or those online ‘terms and conditions’ that you’re supposed to read before taking out a policy?  Well, somewhere in there they tell you that if you don’t tell the insurer the truth about your circumstances or if you don’t mention something relevant, your insurance won’t be valid.  Then when they ask you the standard questions about past convictions, past motoring offences and so on, they record your answers.

If you tell them that you have a clean licence and then they later discover that that wasn’t true, your policy will be null and void, even if that particular fib has nothing to do with the accident.    That’s because your premium is calculated on the basis of the risk you pose to the insurer (i.e. how likely you are to claim) and if you lie or omit information that could affect that premium, they won’t cover you at all because technically you haven’t been paying the correct premium.

Finally, if you take out a new policy rather than renew your existing one, you will be specifically asked whether your car has any modifications or alterations.  If you simply renew your existing insurance, you may forget that you’ve installed a new stereo or added spoilers, and if you have to make a claim you could find that your policy is invalid because that information hasn’t been factored in when calculating your premium.

 

 

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I’ve talked before about how my family will never be a one car family. Given that, we have to do whatever we can to keep our car payments and car maintenance expenditures down. It’s not an easy thing to do considering my husband drives about 50 miles round trip for work every day, and if we want to visit family we have no choice but to drive. All of that puts a lot of extra wear and tear on the care.

However, because we’re on a pretty tight budget nowadays, there are some strategies we’ve started to employ to keep that budget in check:

• Regular maintenance, particularly on my husband’s car. Since he drives so much, it’s important to keep his car in excellent working condition. We just recently replaced all the tires and spent a large sum of money to repair a few other parts that were getting worn down (like brakes. OMG is that man hard on brakes). For my car, which is driven substantially less, the maintenance costs are substantially lower (although I do need to get better about remembering to get it done as well or it will not be lower). When we had different cars, we also kept costs down by doing certain routine maintenance ourselves, as well as used some good tips we’ve read.
• Combining errands, trips, etc. This really isn’t a new concept. Every personal finance writer talks about how this is a great way to save on gas and wear and tear. The reason we all talk about it is due to the fact that it really does work. Now that I’m home, I have a loop that I drive pretty much every day. Included in that loop are all of the stores that I need to go to. Yes, it’s annoying to stop and start the car (which, incidentally can burn more gas, particularly if you’re using the air conditioner. Which I do. Especially in 100 degree weather) but in the long run it saves time and having to fill your tank frequently.
• Having a car emergency fund. If there‘s anything having a 16 year old car taught us, it’s that cars breakdown even when you don’t want them to. It just happens. To prevent having to constantly dip into our emergency fund in those situations, we’ve established a separate fund just for the cars. This fund covers regular maintenance like oil changes and it’s there in case we need new tires (which we have), new brakes (which we have) and even need to replace a windshield or two. It’s a nice peace of mind knowing that those expenses are covered and we don’t have to fret about the money.
• Buying used. Two years ago, we celebrated because we were free from car payments. Unfortunately, that celebration lasted one whole month because the car my husband was driving was costing more to fix than the car was worth (before you get all upset, the car was 16 years old and needed to be replaced anyway). We opted to buy a used car for several reasons, including the fact that it was less expensive than buying new. Sites like Evans Halshaw Used Cars came in handy when we were attempting to get examples of what cars we could get on our budget.

There are others ways we’re able to save on our car expenses and fuel costs: taking advantage of days when the gas station has reduced prices, knowing which gas stations have the cheapest gas, filling up before the car gets to “E”…all the stuff that you already know. It’s worked for us thus far.

I just hope it continues to do so.

The following is provided content. 

If you’re like most people, purchasing a home is the biggest financial commitment you’ll ever make.  For this reason, it’s important not to get caught up in the bells and whistles of home-buying—that beautiful chandelier in the kitchen or built-in pool in the backyard. Instead, focus on the financial aspects of being a new homeowner, such as mortgage rates, taxes, and other expenses. Read this article to learn more about the top 5 considerations you need to make before buying a house:

1) Set Realistic Targets for What You Can Afford

Before you even start your search, you need to take a close look at your personal finances and make a realistic assessment about what you can afford. The best way to do this is to calculate your debt to income ratio, since your total debt should not exceed one-third of your total income. Simply multiply your monthly gross income by 0.33 to find your debt limit, and then subtract any outstanding debts you already have from your debt limit. The amount remaining represents how much you will be able to spend on monthly mortgage payments.

2) Ask for Utility Bills

Inquiring about the average monthly costs of utility bills will help you better gauge whether or not your dream home is worth the investment. For example, you’ll wind up paying a fortune to heat homes with high ceilings and solid walls. Ask for bills from both summer and winter months to get a clear picture of how much you’ll pay.  Consider that high utility bills may also be an indication of outdated appliances, lack of insulation, or leaky air ducts; these defects might mean you’ll end up spending a lot of money on home improvements after you’ve signed the dotted line.

3) Check the Property Taxes

Don’t be blind-sighted by property taxes. Your prospective home may be located in a neighborhood where homes are frequently reappraised at higher tax rates, in turn causing you to pay considerably more than what you expected. Obtain both recent and old tax bills from the seller or search newspaper archives to get an idea of how frequently—and by how much—property taxes are likely to increase.

4) Get a Home Inspection

Your abode-to-be may look stunning on the surface, but chances are it’s far from perfect. Getting a home inspection will reveal any defects your potential new home has so you can negotiate a lower selling point or forego your purchase altogether. Many homes have minor, curable defects that won’t cost you a ton of money. Bigger problems—such as structural defects, old roofs, or poor water control—are costly improvements that could ultimately turn into deal-breakers.

5) Find the Right Mortgage

Of course, the biggest financial consideration you’ll need to make in regard to your new home is your mortgage. Adjustable interest loans may be a good option if you’re only planning to stay in the home a few years, as the interest rates during the adjustment period on these loans are much lower than those of fixed interest loans. However, if you’re planning to stay in your home for a number of years, a fixed interest loan provides you with the most financial stability because your rates will never increase. Thoroughly research mortgage rates before locking yourself into one; making the right decision will help you clear your debt faster.

 

This is a guest post

It’s an interesting time to live in my house. Why? We’re putting it up for sale. Finally.

Selling our house is something we’ve wanted to do for years but haven’t been able to do for a variety of reasons. But we realized we couldn’t keep putting it off. Our neighborhood makes me uncomfortable (well, that kicked in after a neighbor shot and killed her ex-husband after he broke into her house), we’ve outgrown the house, and I’m really tired of townhouse living. So it’s time to move into a single family house. But there’s one nagging question that we keep coming back to: how much can we borrow without overextending ourselves?

There are some…changes that are happening in the next few months (I’m not pregnant. I swear it) and we have to make sure that our mortgage stays at or below our current level. We’re struggling with finding a house in our price range that, with our sad little down payment, will keep our mortgage at that amount. To deal with the situation, we’ve had to drastically change where we’re going to live. It’s not a decision we’ve entered into lightly and, although we haven’t given up on our dream location, we’ve both had to be grown-ups and realize that this new area is, overall, better for us. Especially financially. I refuse to ever be house poor again.

To make sure this doesn’t happen, I’m being very meticulous when it comes to how much we can afford. When we’re looking at houses in the new area, one of the tools we use is that handy mortgage calculator that’s at the end of every MLS listing. It’s nice to be able to plug in our down payment amount and get a rough estimate of what the mortgage will be. I can do some future budgeting and planning based on that and what I know our steady income will be. It’s a relief knowing that, before we get our hopes up about a house, if we can even afford it.

Buying a new house is going to be a long and tedious event for us (and I promise to share it all with you). Even more so this time around since now we know what we’re doing.  But identifying how much house we can afford is the first step in our house hunting process.

The following is a guest post. 

If you’ve heard of mico-financing I won’t bore you, but I for one think that more people need to do it, so let me say this; $25 dollars may not seem like peanuts in today’s economic turmoil, but if you could lend the money to someone in poverty, who could use it to change their life for the better, wouldn’t you want to do that? That’s exactly what the non-profit organisation Kiva helps to make happen.

Kiva started off as a small project to connect people through lending with the aim of alleviating poverty, and now it helps to fund money to thousands of borrowers each week. Each of these borrowers lives in poverty and is seeking a loan to help with a project or small business venture. You and I, can then simply go online at kiva.org and lend money to whichever person or project we wish. The minimum you can lend to any individual or group is $25 and you can review borrowers based on repayment term or project type. It really is a fantastically simple way to help those in poverty do life changing things.

If you run a company, or can influence the person who holds the purse strings, you can also help by either lending money (in the same way an individual might) or by donating money and supporting the organisation. A business that’s recently signed up to do this is Guarantor Loans Company, you can visit their site at guarantorloanscompany.co.uk or even look at their lending page on Kiva. If you choose to lend yourself, you’ll get a similar lending page that can be shared with those you know or who want to follow your lending progress.

Just think, if every business or individual who could afford to, committed themselves to lending regular amounts then the world could be a better place.

When it comes to repayments you can either opt to have the money paid back into your account or you can choose to put the money straight back into Kiva, so it can continue to promote the work it’s doing around the world.

If you’ve got a spare $25, why not start lending today and help people around the world change their lives for the better!