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A few months ago I wrote about five tips that you could do to reduce your auto insurance premium. One of those tips I suggested was to pay your insurance in full.  It’s a great way to take advantage of a savings because most insurance companies offer discounts to do so.  The average discount is about a 10% but with some companies it can be more.  If you are paying $1000 for your 6 month auto insurance, you would save $100.  That would be a total of $900 with a $200 savings a year.  If you can get this discount, then why wouldn’t you?   

The problem with paying is full is that most people can’t, or they don’t think they can…at least right now!  I hear it all the time, “I can’t afford to do that right now.”  Which is okay.  I understand.  Insurance is expensive.  The problem is people leave it at that.  Right now they can’t afford to pay in full.  But what if I told you that in 6 months you would be able to pay in full?  What if I told you that you could keep that $200?  Wouldn’t that be great? 

Here’s how you do it and it’s a lot simpler than you might think.  All you have to do is plan ahead.  You have to add it into your budget.  Or create a budget if you haven’t.  It might take a little bit of work, but you can do it.  Some people spend hours clipping coupons to save a dollar.  I’m not suggesting that you search for insurance coupons, there aren’t any trust me, or that you spend hours working on this.  All I am suggesting is that you take a few minutes out of your month and plan for the future. 

There are many tools that can help you do so.  One that I can suggest and that my wife and I personally use is www.youneedabudget.com. It’s great budgeting software for your computer, phones and tablets and it’s been an eye opener.  It has helped us with our budget and it can help you. It’s helped us create goals, let us know where our money was going and more importantly it has helped us to pay in full for our insurance within the first 6 months of use.

Here’s how we were able to do it. Let’s use the example above.  If our insurance is $1000 for 6 months but $900 paid in full, we knew that we would have to set aside an extra $150 a month for insurance along with our scheduled $167 monthly insurance payment.  If we did that for 6 months, it would pay our next 6 month premium in full. After 6 months, our $167 would be freed up, and could be budgeted somewhere else.  What we had to do was put aside a monthly allowance for insurance premiums. It wasn’t easy at first because we had to cut back on some things like Tim Horton’s coffee every morning or Taco Bell every other day for lunch.   But after 6 months, we felt like we were a little bit ahead of the game. You could do the same...all you have to do is plan ahead a little.  

It’s wise to create a budget to pay your insurance in full.  It will save you money in the long run.  Maybe you can’t do that now, but you could at least make the decision today to try. The plan is right in front of you.  All you have to do is make the choice.   
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