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The Dumbest Way to Save Money

by Shawanda Greene

The other day, I was casually chatting with a family member. She is a financial dunce who repeatedly serves up material for this blog. If you’re a regular reader of You Have More Than You Think, then you already know this particular family member’s name. If you’re not, her name is Larissa, and I will be referring to her as such going forward.

Since I’m a personal finance nutjob, I anxiously await the opportunity to bring up the subject of money in nearly every conversation. Doesn’t matter how inappropriate. If an opportunity doesn’t present itself, I create one. It’s what I do.

So, Larissa and I were talking about eeeeh, something, when I asked her if she had homeowner’s insurance on her paid for home. Her response was a lackadaisical, “Oh, I forgot to renew it.”

My response was, “Are you *expletive* me?!”

Look, this is beyond stupid. Perhaps you were expecting me to drone on about how buying quality goods is frugal. Forget about that cheap watch you got in AnyChinatown, USA that fell apart only days after you bought it. That’s child’s play compared to inadequately insuring your assets.

Your primary residence is one of the most important assets you’ll ever own. If you have a mortgage on your property and you fail to make the payments, you’ll find that the mortgagee (the lender) will pay the homeowner’s insurance for you. Why? Because they know how important it is to protect their asset.

Paying off your mortgage and eliminating the lender’s interest in your property is a wise financial move. However, you must take on the responsibility of making sure your asset is protected at that point.

You’ll likely spend decades paying off your mortgage. Decades! Throughout that time, you’ll probably pay three times the purchase price of the home after factoring in interest. If your home was destroyed while you didn’t have insurance, here are your options:

  1. Renting
  2. Owning….again
  3. Squatting with a loved one
  4. Homelessness

For some reason, I find the first two options to be the most offensive. You’ve already paid for your residence once. And you’ve likely done this over many, many years.

I don’t care if you live in Miami, FL and your homeowner’s insurance policy expires on July 15th. If you have to sell your A/C unit to renew your homeowner’s insurance, then so be it. Sweat it out.

Although far more acceptable, going without health insurance and disability insurance is equally stupid. But I’ll save that for another day.

What are some of the dumb strategies you’ve used to save money?

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{ 8 comments… read them below or add one }

Tia August 27, 2009 at 10:06 PM

I know someone that cancelled their life insurance bc they said they could not afford the 17 a month. They were in their 30s, has 3 kids and a smoker. I’m sure they could have cut expenses elsewhere like phone, cable or cigarettes.

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Carla August 28, 2009 at 12:41 AM

I have gone without health insurance – twice . The first time, I was 19 and just starting a new job. I was no longer in school so I wasnt on my mother’s plan. My new job had a 90-day probation so I didnt have employer paid insurance. I coudlnt get private insurance because I had a pre-exhisting condition. That cost me five figures, but options were slim.

The second time eight years later : $600/mo for COBRA was impossible while unemployed (laid-off without UI) and (even before the MS diagnosis) didn’t qualify for private insurance. I did get catastrophic coverage eventually though.

Looking back, I didn’t go without insurance on a whim, options were slim, but at least I did get catastrophic insurance the second time (I haven’t heard of it the first time).

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Shawanda Greene September 2, 2009 at 12:30 AM

I’ve gone without health insurance before as well. I qualified for COBRA, but it would’ve still cost me over $300 per month. At the time, I didn’t think it was that big of a priority. I’m fortunate I wasn’t stricken with a major injury or illness while I was uncovered.

The important thing is to get the best coverage you can afford. I probably heard about catastrophic insurance a year and a half ago. I know next to nothing about it, but it sounds like an extremely smart way to go if you’re not eligible for medicaid, and you don’t qualify for a more extensive and affordable health care plan.

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Torrey August 29, 2009 at 12:43 AM

I think the dumbest thing I’ve done to save money is not take care of maintenance on a car I had. Instead of paying for routine stuff to keep the car running well, I didn’t and of course the little things I neglected added up to larger repairs.

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Ashley August 31, 2009 at 6:39 PM

I agree with you wholeheartedly! My grandparents neglected to keep their home insurance current after living in their house since 1944. Last year their house caught fire and the entire house had sever smoke damage and had to be gutted. Their children, grandchildren, and great-grandchildren (myself included) suddenly found ourselves responsible for their living arrangements while the house was still damaged and getting the house rebuilt and refurnished. Home insurance would have been sooooo much cheaper!

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Ashley August 31, 2009 at 6:40 PM

Please note that I meant great-grandparents.

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Shawanda Greene September 3, 2009 at 6:43 PM

That’s frightening! I’m going to keep putting the pressure on Larissa.

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One Cent At A Time June 10, 2012 at 9:19 AM

My dumbest one is not fixing radiator on time, now the head basket blew.
My recent post Monthly Blog Update – May 2012

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