The 1-2-3 Money Plan Part 7

1. Make Freezer Meals.

We've all done it. Dinnertime sneaks up on us, we don't have anything planned and don't feel like cooking. The easiest solution is takeout, delivery, or schlepping to the nearest chain restaurant.

The simple solution is freezer meals. It's different from simple leftovers in the fridge. With freezer meals, you make double and triple batches when you cook-hamburgers, meatloaf, ca.s.serole, whatever. Then on those harried evenings, you're only microwave minutes away from a quicker, more healthful, and less-expensive entree than you probably would get dining out. Whip up a few quick sides, and presto! A meal.

A little meal planning goes a long way toward saving money-and not just on dinner. Taking lunch to work instead of buying is, admittedly, obvious and tired advice. But do you brown-bag it every day? Ask yourself why not. And what about that morning latte from Starbucks that every money advice-giver wants to cut from your morning routine? Well, that's up to you, of course. Just make sure it's truly how you want to spend your money. You might have seen the math before, but I'll repeat it here: Cut a $4 coffee and $7 lunch each workday, and you save $2,750 a year. If nearly three grand is no big deal to you and you don't need to spend it on something else, then eat out.

2. Use Coupons and Discounts.

Granted, if a man is on a first date, he might not want to whip out coupons when the bill comes, unless he knows his date is of like-minded frugality. But coupons and discounts can save significant money on dining out.

One secret method keeps anyone from knowing you're getting a discount. Sign up at RewardsNetwork.com. Tell them what credit cards and debit cards you use to pay for meals, and if you dine at a partic.i.p.ating restaurant, you get a discount automatically credited to your credit or debit account. You do nothing-no coupons or gift certificates. Discounts are typically 5 percent to 10 percent.

Also check out Restaurant.com, OpenTable.com, and the ubiquitous Entertainment book from Entertainment.com. If you're looking for a cheap way to take the kids out, look for special deals at KidsMealDeals.com.

3. Skimp on What You Don't Care About.

Sometimes, we're on autopilot at a restaurant, ordering a soft drink, appetizer, entree, and dessert. Then we wonder why we're so uncomfortably full when we leave. Cut out what you don't care about.

Do you like free water just as well as a $3 soft drink? Can you wait until you get home for a beer or gla.s.s of wine? Can you skip the appetizer or eat an appetizer and skip the entree? Are the portions big enough to share an entree? What about skipping the tempting dessert and coming back some other time for dessert only?

This isn't rocket science, but it does take discipline and a willingness to break your routine. Listen to your body about how hungry you actually are and order less. And look for reasonable subst.i.tutions that will cut your tab without cutting your enjoyment.

Insurance.

Insurance is a wide-ranging topic, and some people have unique insurance needs. But here are three things almost everybody can do to save money.

Insurance, 1-2-3.

1. Say no to extended warranties and other junk insurance.

2. Refinance your term life insurance.

3. Raise deductibles on home and auto insurance.

1. Say No to Extended Warranties and Other Junk Insurance.

Keep things simple and don't outsmart yourself. There's a lot of junk insurance out there that is way too expensive for the risk it covers.

Extended warranties are at the top of the list. Just don't buy them. How's that for simple? Don't buy them on electronics, computers, cars, appliances, or anything else. Does anybody really think a $40 extended warranty on a $200 camera is a good deal?

Are there examples of extended warranties paying off? Of course. And there are examples at a casino roulette wheel, when the ball falls into the number 8 slot. There's also a chance you might die from a snake bite this year. It's just not very likely. The point is, almost all extended warranties are a lousy bet.

Similarly, don't sign up for a home warranty, or service contract, which is essentially insurance on your appliances and major operating systems, like a furnace.

You can skip many of these insurances if you maintain an emergency fund to pay for repairs. Here's a simple concept: When stuff breaks, pay to repair it. Don't make it more complicated than that. You'll save money in the end.

Here's an idea-self insure. Whenever you're tempted to buy an extended warranty, say no. Then put the money you would have spent on the warranty into a separate bank account. That will act as your repair fund. Chances are that over time, you'll put far more into the account than you spend on repairs.

I'm not necessarily saying you should check your brain at the door and blindly reject every offer. But you'll do well to make "no" your default answer and set a high hurdle for saying "yes."

2. Refinance Your Term Life Insurance.

Term life insurance premiums have been plummeting for years. So, if you have an old policy, it's time to get a new one, and then cancel the old one. In all likelihood, you can either save a lot of money or get a lot more coverage for the same money, even though you're older than when you first took out the policy.

I call this "refinancing" because it's so similar to refinancing your house mortgage to a better interest rate, only replacing your life insurance is better because the switch is free. It's a no-brainer.

You can save literally hundreds of dollars a year, which compounded over the life of a 15-year or 20-year policy amounts to thousands in savings.

What exactly is life insurance? A life insurance company pays your beneficiaries a lump sum of money if you die while the policy is in place.

A quick rule of thumb on whether you need life insurance: If anyone depends on your income, you need life insurance. So, single, childless people probably don't need it. An example of an exception is a stay-at-home mom. If a surviving working dad would have to hire childcare and other services the stay-at-home mom performed, you might want a small policy on her.

A quick rule of thumb on how much life insurance to buy: Get 6 to 10 times your income. This is a fuzzy number, like so much in financial planning is. So buy as close to 10 times your income as you can reasonably afford. Or, you can go through some laborious guestimate calculators online at Bankrate.com, Moneycentral.msn.com, Insurance.com, and AccuQuote.com. Be aware you're likely to get wildly different estimates.

How do you refinance your term life insurance? In short: * Find a better price on guaranteed "level" term, which means coverage is guaranteed throughout the policy's term and the premium will not change.

* Sign up and take a physical.

* Cancel your old policy or let it lapse by not paying the premium.

* Save money.

Be sure to get your new policy in place before canceling your old policy. That way, if the medical examination discovers some disease or condition that makes you uninsurable, you can just keep the old policy.

Start by asking your existing life insurance company what current premiums would be for the same coverage. Then go online to life-insurance comparison sites, such as AccuQuote.com, SelectQuote.com, Insure.com, Efinancial.com and Intelliquote.com. Be aware that some sites will give you an instant quote on life insurance, while others simply pa.s.s your name on to insurance brokers who will contact you. The sites listed previously should give you an instant quote.

If you're having trouble deciding on a site, use AccuQuote.com, one of the oldest comparison sites on the Web. It also offers help by telephone, 1-800-442-9899. You get the same rate regardless of whether you get a quote online or with help on the phone.

How do you know if the quote you received is from a good insurance company? Only consider companies rated A-plus or above. Many comparison sites list the ratings along with the price quotes, or you could check them out yourself at such rating sites as standardandpoors.com, ambest.com and fitchratings.com.

QUICK TIP.

Don't buy child life insurance or specific-death insurance. You don't depend on a child's income, so don't buy life insurance for a kid. And if you need life insurance, it doesn't matter how you die-cancer, heart attack, or stepping off the curb and getting hit by the proverbial bus. So don't buy specific-death insurance. Just get regular term insurance.

Don't have term life insurance? Do you have whole life, universal life, variable life, or some other c.o.c.kamamie cash-value life insurance policy with an investment component? You might do better to cash it in and get regular term insurance. It will be far cheaper. Or looked at another way, you could be getting a lot more life insurance for the same money. The problem is that permanent life insurance policies are so complicated, they're difficult to a.n.a.lyze. To help decide whether to dump a cash-value policy, get an a.n.a.lysis of your policy for a relatively small fee at the Consumer Federation of America, at EvaluateLifeInsurance.org. An expert there, James Hunt, a former insurance commissioner of Vermont, will a.n.a.lyze your policy for a reasonable fee, which at this writing was $70 or $80, depending on the type of policy. He'll recommend what you should do with your policy.

Contact information: James H. Hunt, 8 Tahanto St., Concord, NH 03301-3835, [email protected], 603-224-2805. Okay to call on evenings and weekends.

3. Raise Deductibles on Home and Auto Insurance.

Insurance is to protect you from financial disaster, not minor money annoyances. That's partly why you want high deductibles on your home and auto insurance. Another reason is answered with a question: What do you think will happen if you submit an auto insurance claim for a few hundred dollars? That's right. You insurer might fire you as a customer and cancel your insurance. So, if you're not going to make small claims-and you shouldn't-you might as well raise your deductibles. A deductible is the amount you have to pay before insurance starts paying. When you raise deductibles, the insurance company lowers the premium you have to pay.

Consider deductibles of $500 or even $1,000 on auto insurance, and $1,000 to $2,500 on home insurance. You'll save 15 percent to 30 percent off your premiums.

QUICK TIP.

Insurance for home and especially auto can vary dramatically from insurer to insurer. It pays to periodically shop around. Yes, it's a pain. But, yes, it's worth it. Today, you can get quotes online at such sites as www.insurance.com, www.instantquote.com, or www.insweb.com.

Telecommunications.

I'm going to lump several types of services together under telecommunications because more and more, that's how consumers buy them. I'm talking about services for your home phone, wireless phone, pay television, and Internet access.

The big idea with telecommunications is to pay attention. These services are evolving so quickly that new services and new prices are offered all the time. It pays to evaluate all your telecom services at least annually, if not quarterly. When it comes to telecom, paying attention pays off.

Telecommunications, 1-2-3.

1. Cancel your traditional landline phone service.

2. Rightsize your wireless phone plan.

3. Regularly review TV and Internet service.

1. Cancel Your Traditional Landline Phone Service.

"No way! He did not just suggest dumping my house phone line."

Oh, yes, he did.

A dial tone to your home phone has become a commodity. That means it's not special anymore. And it's definitely not worth paying $40 a month for service, plus extra for long-distance calls. Today, unlimited, free long-distance calls are a throw-in feature, like call-waiting or caller ID.

You can get phone service so many ways nowadays that traditional landline phone service from a Ma Bell descendent has become a dinosaur. That's why you should consider dumping your traditional stand-alone landline altogether. Here are a few ideas: * Subscribe to a bundle. Phone and cable companies are fighting over customers for their triple-play services-TV, Internet, and phone. Landline phone service has become such a commodity that it's not even the highlight of the triple play. Bundled phone service often includes unlimited long-distance calls and a wide host of features, such as voice mail, call-waiting, and caller ID. If you already subscribe to pay TV and Internet access, you might save money by moving all your services under one roof and buying a bundle.

* Use wireless only. The ability to place and receive phone calls is no longer necessarily tied to the copper phone wires running throughout your home. That's a mental hurdle to overcome, for sure.