Mortgage market: Is it a good time to refinance?
Mortgage market can change, and homeowners' personal circumstances can, too. After marriage, is it a good idea to refinance a mortgage to include both spouses regardless of the mortgage market? Look to question No. 1 in the reader mailbag.
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Q9: Insurance deductibles question
I am a SAHM of a toddler and a preschooler. My husband works and we barely scrape by. We have not used a credit card since our son was born three years ago. We are trying to pay down our debts but it is a slow process. We have two cars, one paid for and one paid for by a loan from our parents (we make monthly payments to them). We currently have liability only on both of them in order to have lower monthly payments. We also have a high-ish deductible on our home owner’s policy – $1000. We try to keep $1000 in our emergency fund and last week our emergency hit. We had some storm damage that ripped out our electrical wires, leaving us with a $958 bill. Our emergency fund was at $950, so we are wiped out. I’m wondering if it would be smart to lower our deductibles and maybe get more than just liability on our car with the loan since we have nothing to cover ourselves if another emergency comes up. In all likelihood our emergency fund will not be replenished until tax time next year.
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I have a feeling you’ll suggest getting that fund back up to $1000 asap, and we plan to do that. But we are living about as frugally as possible. We have sold things we own, rarely eat out, budget everything, and our food budget for our family of four is only $200 per month. (I was shocked when you said yours was $770! That sounds like a dream to me!)
Yes, the first step is to rebuild your emergency fund. That’s what you should do first and foremost.
After that, though, the real question is what it would cost you in premiums to lower your deductibles. You’ll need to get some new insurance quotes so that you can decide if the higher premiums are worth the reduction in deductible. My guess is that it won’t be, as tiny deductibles usually mean big premiums.
In my own experience, I found that lowering a deductible wasn’t worth it unless I was having damage that exceeded that lowered deductible more than once every two years. If that’s happening, I’d be concerned about other factors in your life (like the climate you’re in and the structure of your house) more so than the insurance.
Q10: Enjoying baseball inexpensively
I’ve been a baseball fan all my life. Recently, though, I’ve really been put off by the high price of tickets. It’s just so expensive to go to a ball game. What do you suggest for a baseball fan who doesn’t want to bankrupt himself?
I agree with you completely about the cost of the baseball experience, which is why I don’t go to many major league games any more. The tickets and the food add up to too much to make it a regular experience for me.
Instead, I leave such trips fully in the “splurge” camp. I go once a year and, because of that limited nature, such trips feel very special to me. They’re memorable and more enjoyable than going multiple times a month.
I then follow my team (the Cubs) via the radio and the internet, mostly.
Got any questions? Email them to me or leave them in the comments and I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive hundreds of questions per week, so I may not necessarily be able to answer yours.
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