Car insurance myths busted

Insurance may not be rocket science, but it can be tricky. What you think you know about it could end up costing you a bundle if you’re wrong. The truth behind these commonly held auto insurance myths could save you time, money and frustration.

RED IS BAD

Have you ever purchased a gray over a cherry red car simply to save on insurance? Many people believe the myth that certain car colors, such as red, increase insurance rates. Actually, color is not a factor in determining insurance rates, but other factors are, including:

NO SWEAT, I HAVE FULL COVERAGE

There is no such thing as “full coverage.” In most states, only liability insurance is mandatory. There are a lot of other coverage options out there, so select what you need and can afford based on your personal situation.

BUT I HAVE AN OLD CAR

Many times, drivers with an older car think there’s no need for comprehensive insurance. Actually, older cars are hot targets for thieves because they’re easier to steal, and there’s a strong market for older parts. Check your insurance policy and make sure you still have comprehensive insurance in place on your older vehicle to protect against theft and other unanticipated losses.

CUSTOM MADE

Chances are you’ve invested a pretty penny on the custom parts you’ve added to your vehicle, not to mention a lot of time finding the exact parts you want. Remember, custom parts not only make the vehicle look cooler, they bump up its value. Review your policy to make sure it’s sufficient to cover the value of any customizations.

For a AAA insurance quote, call (877) 222-7095.

Geodie Padgett, AAA Going Places magazine

Budgeting tips for tough economic times

Budgeting and saving can be difficult for many families in a tough economy. However, there are a few simple budgeting tools you can use that are very effective. At the top of the list: know what you spend.

“Good budgeting requires the concurrent use of some type of financial tracking system,” says Steve Martin, president of Martin Wealth Management, a fee-only financial planner based in Fort Collins, Colo. That’s because budgeting is all about comparing what’s coming in with what’s going out, and how closely that tracks to your projected income and expenses.

To help figure it out, Martin suggests using an electronic tracking system such as Microsoft Money, Quicken, Mint.com, or other online budgeting software. Other options include using a paper system or your own spreadsheet. Write it down so you keep track of every cent you spend.

“A budget should encompass an entire income and each category would be assigned a specific dollar amount that can be used,” says Velda Eugenias, founder and chief executive officer of Eugenias Advisory Group in Gadsden, Ala. “If you say you will spend $6,000 [per year] on food then that means each month you can only spend $500 a month on food. So if you splurge one month, you cut back the next month.”

After you’ve tracked your expenses for a while, set up a budget and followed it, you should set aside some of your savings into an emergency fund. Put emergency-fund cash–enough for at least six months–into savings accounts, money market accounts, or certificates of deposit. For information about AAA’s Deposit Program, visit AAA.com/Deposits or call (888) 728-3151.

Winter travel deals

These AAA travel partners have offers that may help you save on winter travel. Remember to inquire about restrictions before making reservations.

10 tips to keep your credit cards safe

Most of us when shopping for holiday gifts will use some form of plastic at the mall or over the Internet. Here are 10 tips to help you make the season bright, as well as safer.