Renter’s insurance: Worth the expense? September 27, 2011

The last 5 years, I was living on the edge.  I was living in an apartment, but I didn’t have renter’s insurance.  Of course our landlord had homeowner’s insurance.  But if our home was ever broken into, or caught on fire, we’d be out of luck.

I never really thought of renter’s insurance as being very important.  I figured I didn’t own enough “stuff” to make it worth it.  Insurance is always a gamble (it’s something you hope you never have to use). But renter’s insurance covers more than “getting your stuff back”.  Yes, most plans help you buy replacement clothes, furniture, and other items lost due to theft or fire.  And that’s definitely important, if all your work clothes are suddenly gone!  But this past winter, a good friend of mine was living in his condo, and one of the other condo owners had a fire that spread to his place.  Between the fire, smoke, and water damage, his place was unlivable.  He had homeowner’s insurance (I’m pretty sure it’s required if you have a mortgage…the bank wants to protect their investment!)  This meant that his place could be repaired.  But it also meant that in the interim, the insurance company would help pay for living expenses.

So, I bought renter’s insurance.  I figured it was better safe than sorry.  If something happened to our place, I’d want to be able to replace things and find a place to stay.  Plus it sounds like they also provide some legal assistance.  I bought it with the company I already have my auto insurance with, so there was a multi-policy discount.  Woo!  The total cost for the year of insurance is $171/year.  Also during that phone call, I negotiated a better car insurance rate.  I switched from a $500 deductible to a $1000 deductible.  Not sure if that was the best choice, but I wanted to bring down my premium.

So, what do you think of renter’s insurance?  A good decision?  Or a bit of a scam?  Is it better to just have an emergency fund for replacing your stuff than paying an insurance company?  Do you have renter’s insurance?  Why or why not?

And do you think I made the right choice in increasing my auto deductible so I could lower my premium?  It could end up being penny-wise pound foolish if I end up filing a claim, since the extra cost would outweigh the discount in premium.  But I guess in this case, I could use emergency fund money to pay for small issues.

Payoff.com: The Foursquare of Personal Finance September 26, 2011

I’m a big fan of trying out personal finance tools (please don’t call me a personal finance tool).

Most of you know about mint.com.  That seems to be one of the top sites among personal finance people (and “normal” people ).  But there are A LOT account aggregators out there that let you import your accounts and track things.  They’re all a little different, and each have their own features and flaws.

Of all those sites, I’ve tried quite a few.  There’s Mint.com, of course.  More recently, I’ve been trying out LearnVest‘s new My Money Center.  And I’m also testing out Adaptu.  I’ll try to fully review those sites at a later time.

So, let’s get to the main topic of this post:  Payoff.com.

Like most of these account aggregators, once you sign up, you can enter your login info for your assorted accounts:  Credit cards, checking/saving accounts, loans (auto, student, mortgage, personal).  Don’t worry, like most other aggregators, they are very serious about security of your data.

A big part of Payoff’s system is setting goals.  You can set any number of goals, big or small.  Then link an account with that goal.   By working towards those goals, and doing other financially smart things, like finding out your credit score and saving up an emergency fun, you earn badges.  And for every badge you earn, you get an entry into their weekly Sur-prize drawing.  It’s a chance to win $15-25, just for being smart with your money!

So, what do I like about Payoff.com?

• It’s free!  Always a good start when you’re trying to take control of your finances!  (As with many free sites, they have recommendations of accounts and websites to check out, but you’re not obligated to click on anything.  They’re just suggestions)
• The gamification of personal finance encourages users to be smart with their money and achieve their goals
• There’s a page for every badge.  Each page provides advice and guidance for how you can earn that badge, including next steps and links to related posts on the Payoff Blog.
• The website is very playful and fun:
• It’s fun to earn the badges, and the badges themselves have fun names, descriptions, and icons.    Look how many badges I’ve earned so far!
•  The Sur-prizes are an awesome…well, surprise!  I actually won one a week or so ago!  It felt really good to be rewarded for doing good things with my money!
• When there’s an error message, they show the background image upside down.  And when the site is down for maintenance, they show a night-time version of the background scene, with the message “Ssshhh! We’re taking a nap! Don’t worry. We should be awake and ready to play again in a little bit.”  That being said, I’ve only seen the down for maintenance page once at an ungodly hour when I shouldn’t have been awake.
• They are very responsive to feedback.  I have tweeted @payoff a lot, and they respond really quickly!
• They’ll categorize your expenses for you.  At first, I was wary of this, but so far, they seem to be doing pretty well with it.

So, are there any downsides?

• Because the focus is on building up your savings and paying off your debt, there’s not as much of an emphasis on retirement accounts.  In fact, it looks like they don’t currently support retirement accounts in their account managers (they don’t have companies like Fidelity or Vanguard).
• The expenses categorization isn’t always right.  And there currently isn’t a way to edit the categories (that I know of).
• While it does show where you spend the most money, there aren’t a lot of budgeting tools.

Overall?  I don’t think I’d make it my only account manager.  I like the fuller capabilities of Mint.  But I do find myself more motivated to payoff my loans when I know I could get a badge for it!  And I think that it is really great for people just starting out on their personal finance journey.  It’s a simple site to use, and it provides positive reinforcement!

What about you?  Have you tried out Payoff.com?  What do you think of it?

p.s. I was not compensated for this post.  While I did win a Sur-Prize a few weeks back, that was unrelated to my decision to write about Payoff.com.  In fact, I’d been thinking about writing this for a while, but I wanted to spend some time fully checking it out.

FlyLady: Keeping Me Sane September 5, 2011

If you follow me on twitter, then you may have seen me mention “setting my timer” or using the hashtag #flylady.  I’m trying to create new habits using FlyLady’s methods.

I first heard about FlyLady from my aunt, who sent me a timer from FlyLady’s store that has the message on it “You can do anything for 15 minutes!”.  That same year, my aunt also bought FlyLady’s book, “Sink Reflections“, for my older sister.  I’ll admit, I was keen to try a new technique, so I checked out the website.  I tried to get started on her “baby steps“.  I even started following a new blog, Life With FlyLady, [which has since been deleted ]  which chronicled one woman’s attempts at following FlyLady’s advice.  But I burned out on it pretty quickly from trying to do too much at once.

My older sister, having read the book, was a convert.  She told me how much it was helping her.  So, the next time I saw her, she gave me the book to read.  I finished reading it, and even before I finished, I was already starting to take the “baby steps”.  I’ll acknowledge right now:  this book/way of thinking/style isn’t for everyone.  But personally, the techniques, which include doing a task for 15 minutes (as a way to keep focused and avoid burning out on cleaning), and keeping your sink shining (seeing my clean sink makes me want to work more on the kitchen and beyond) are really helpful starting points.  It’s all about just taking a few minutes of maintaining the clean, instead of waiting until your house is a disaster and then doing a crazy clean.

At this point, I’m signed up for her daily emails (super helpful as reminders on what to do each day).  And I’m trying to do some of her 27-fling boogie (quick decluttering: collecting things to throw away or donate) and we’re trying to run the laundry daily (as she says, A Load A Day Keeps the CHAOS Away–where CHAOS stands for Can’t Have Anyone Over Syndrome!)

Still working on those baby steps.  But I’m trying to develop lasting habits that will help keep our new place beautiful.  And I think in the process of keeping everything manageable, I can start stressing less about the apartment and find more time to relax!  The less clutter in our apartment, the better both of us feel

Do you have techniques to keep your place clean and organized?  Have any of you tried FlyLady’s techniques?  Or are you just one of those “Born Organized” types who never have a problem with clutter?

P.S. I’m just telling you about a technique that is helping me.  I’m not being compensated for this post AT ALL.  Just wanted to assure you all of that!