Car insurance

Another thing people skimp on, thinking they are saving a lot more money in the long run is auto insurance. Many Americans stick with the minimum amount of car insurance coverage required in their states but in the case of an accident, the amount they’ll have to shell out to pay for the damages and repairs will be anything but minimum.

“Paying for car insurance isn’t exactly something that people enjoy, but skimping on your policy can really cost you down the road,” warns Neil Richardson, licensed insurance agent and product manager at car insurance comparison marketplace The Zebra. According to Richardson, if your minimum coverage for property damage is $25,000 and end up in an accident that requires you to pay $50,000 in damages for destroying someone’s new car, you’ll probably have to make up for the difference on your own. It’s not exactly peanuts money, is it?

What to do

If your car is not five or six years old, Richardson suggests opting for comprehensive and collision insurance, with the first one providing coverage in case of events outside of your control and the second one covering for damages to your vehicle when you’re at fault for the collision. Uninsured motorist coverage and ample liability coverage are also good options.

If you get multiple insurance policies like auto and home insurance from the same company, you might benefit from various discounts. Other things such as a good driving record can also help you lower your monthly insurance costs.