Now, that I am beginning to get my savings built up once again, I am looking at changing my insurance payments. Currently I pay my premiums quarterly. That means I pay an installment fee of $4 four times a year. However, now that I am beginning to get a savings built, I think I can now afford to start paying semi-annually. Thus saving me $4 ($8 annually) over the quarterly rate.
I will be going by the credit union today, and will make a final decision at that time.
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go ahead share your thoughts with me now.
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Offsetting the $8 saving will be whatever interest you could receive if you kept the installment money in your online savings account for the extra 3 months. The exact amount to offset (the 'opportunity cost') will depend on what interest rate you get on your savings, how big the installments are, and the period (3 months).
ReplyDeleteThat is, you may end up only saving $5-$6 rather than the entire $8pa.
However, as long as you have a large enough of a savings buffer to cover any emergencies that might come up just after you've made the larger, bi-annual payment, it should be an easy way to cut a few dollars off your expenses each year.
less paperwork yearly.
ReplyDelete