Inflation Budget Buster – How to Mitigate Rising Costs

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Its 2023 and the 40 year high rate of inflation has everyone’s household budget blown out of the water. Example: My annual homeowners insurance premium here in Minnesota for a 1,700 square foot rambler with a three car garage is now $2,500 per year, with a $1,000 deductible. My wife and I own ZERO jewelry, nor are there any crazy riders on the policy. Last year the policy was around $1,800, up from $1,100 8 years ago. The one year increase from 2022 to 2023 was over $700, in one year. We have had zero claims. I shop and shop, even as an insurance agent I cannot find a rate lower for the coverage I desire for less than $2,500/year.  How you retired guys are living on fixed income is beyond me. I am guessing everyone’s retirement budget is way off. I say don’t beat yourself up, no one could have planned for the Biden shit show we have in the Whitehouse. No one would ever have thought that an election could be stolen. OK, political stumping is over, but again I will say, elections matter, and stolen ones matter more.

To mitigate the rising costs of inflation my guidance is to subscribe to the theory of ‘If something is monitored it is managed.” Simply put, monitor your spend. Monitor your monthly expenditures, especially any and all subscriptions. While the subscriptions to Netflicks, Amazon, CostCo, and even hidden bank fees are small they all add up. How about a club membership in your annual collector car insurance policy? Those run $70 a year. I dare each of you to write down, yes on a piece of paper, ALL of your monthly expenditures. The auto payments you set up in your bank account and on your credit cards. Look for the insurance plan within your cell phone bill. Maybe it is time to revisit that?  Keep your list of monthly spend out in front of you, on paper. Watch it for a few months and revisit. Monitor it and managed it. You will find areas you can cut back on. If you and your spouse have separate checking accounts, well, maybe it is time to combine, so you can watch what is being spent. Yep, it might be time you need to address some spend they have. You might be surprised what you find.  $35-$40 a month on getting her nails done? $120 for a hair cut and a color? WTH? A box/kit of hair dye is $1.79 at the store. Tell her she looks pretty with grey hair. You might even need to put out. If she puts gas in her own car, she can color her own hair. (Full disclosure, my wife colors her own hair as you can imagine and, we have had joint checking accounts for 32 years, however my wife rarely if ever, puts gas in her own car.) Turn about is fair play , so be ready for your spouse to see your expenditures.

To put this concept into car guy speak, thing about how we tune up a car to run better, and or to get better fuel economy. It is not just one thing. It is a combination of many things. Air filter, fuel filter, plugs, wires, clean injectors, tire pressure, a bug deflector, a bed cover on a pickup. Look for the little things.

Shameless plug. I am an insurance agent specializing in collector car coverage. If you have a policy with Hagerty, one of my preferred carries, I urge you to revisit the Drivers Club Membership fee of $70/year. You can call your own tow truck if you break down, and is the color glossy magazine really worth it? Be sure to revisit my blog called Pet Peeve- Towing Coverage. The in-house agents at Hagerty are great, but they will not be objective on the Driver’s Club option. An independent broker, like myself, will review your policy and uncover ancillary fees and costs, that are not true risk mitigators, i.e. loss due to an accident or a perl. Contact me at jake@octaneroad.com to kick things off.

By the way, If you are saying yes to the Hagerty Driver’s Club membership,  then I am guessing your wife spends more that $120 to get her hair done. You have zero reason to complain about the cost of a cup of coffee at the local cafe.

Onward- Jake

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