Saving money can cause a lot of trouble | RecordCourier.com

Saving money can cause a lot of trouble

Reach Gail Davis at RuhenstrothRamblings@yahoo.com

We can all agree that these are tough economic times. It seems that everyone is trying to find ways to stretch their dollars to make ends meet. This usually means looking at items in our budget, choosing the ones that are not essential, and either eliminating them completely or adjusting them to increase our cash flow. As an example, perhaps when gas was in the $2 range per gallon, we might have been able to afford a treat at the local coffee shop several times a week or a few more nights out at the movies or a dinner at your favorite restaurant.

In addition to the rising gas prices, many have lost jobs or had their paychecks reduced. A family going from two incomes to one income is faced with an even greater challenge to eliminate those expenses that are no longer necessary. After we have tackled the most obvious items, we will start to look at hidden expenses. As an example, we might decide to raise the deductible on our insurance policies, reduce coverage limits, or eliminate certain policies. Unfortunately, this type of change may cost you more in the long run.

Recently a friend looked at their car insurance and decided that it had been over seven years since the requirement for a SR-22 rating was placed on their policy. Since the typical time for this to stay in effect is three years, she decided to cancel the rider on the policy to save them $30 per month. What started as a sound decision to stay solvent in these tough financial times created a mountain of paperwork, heavy fines, and the loss of dollars earned due to the cancellation of the driver license of the person on the policy with the SR-22 rating.

If you have the SR-22 rating, you cannot cancel it. You have to contact the Department of Motor Vehicles (DMV) to get a release. If you cancel it without the release, your insurance company is required to notify the DMV. The next thing to happen is that the driver license is suspended and a certified letter is sent to the address on record. Once this nightmare begins you are faced with a ticking time bomb to untangle the mess as your fines and reinstatement fees increase while the wages you are losing sends you deeper into a negative cash flow.

If you have a vehicle on your property that is not being driven and you chose to take it off your policy while it still has current license plates, you may be faced with fines as well. The recommended procedure is to take your plates off the vehicle, go to DMV to turn them in, and get proof from them that the plates are void. With that official cancellation in hand, you can contact your insurance company to remove the vehicle. It looks like the best practice is to contact officials at the local level before making changes that could cost more in the long run than the savings you are trying to secure.

Have a Ramblin good week.