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Reducing your car insurance rates

In a time when we’re all looking to cut expenses, here’s an interesting story about how some people are cutting their car insurance rates.

When Zshavina Meacher of Cleveland traded in her car for a new 2011 Chevy Malibu last summer, her insurance premium jumped to $510 every six months. Her insurer, Progressive Corp., asked her whether she wanted to cut her rate.

If Meacher agreed to install a device in her car that monitors how safely she drives and the results were good, her rates would go down. If the results weren’t so good, her rates would stay the same. She agreed.

During the first few weeks, the device told Meacher that she slammed on her brakes a lot. She stopped the hard braking.

In February, the 23-year-old’s insurance bill dropped by $120 per six months, or 24 percent.
Meacher is happy her rates went down. And Progressive is happy the risk of Meacher getting into an accident went down. Fewer claims will help keep Mayfield-based Progressive profitable.

If you haven’t heard of telematics — a device that monitors your driving — then get ready. While Progressive started dabbling in telematics in the 1990s, it started pushing it in 2010 with its “Snapshot” program, and other insurers have stepped up interest in the last year.

Telematics is changing car insurance, and who knows what else it might change. Of course this raises privacy issues, but for people who need to watch every penny, it can really be a helpful option to lower your car insurance costs.

Top Personal Finance Apps

Although now, in the early summer of 2012, the economy is starting to gain traction, many people, even those with jobs, are struggling to remain financially solvent. One of the main reasons people are struggling is a lack of financial awareness and information. Fortunately, in our modern world where the smart phone reigns supreme, There is, as they say, an app for that. Here are a few of the top personal finance apps.

The Big Picture:

For an excellent look at your big picture financial situation, Mint.com has a free app for iPhones and Androids, which can also be accessed from the Web. Simply hook it up to your various accounts (savings, checking, investments, credit cards ect), and it will give you a good idea of your overall financial health. Unfortunately, because it’s free there are advertisements, which can get slightly frustrating. However, the company does need to make money somehow and the advertisements allow them to offer an amazingly helpful service without it being too good to be true.


(Photo credit: Wikipedia)

Getting the True Price:

Those with weighty credit card balances might want to check out an extremely useful app called “Debt Dog.” With this app you imput the price of the item, and the type of credit card you are using, and it will tell you the true price of purchasing that item when you don’t actually have the money on hand. Although not quite sophisticated enough to allow you to imput late fees, it will raise your awareness of how much credit card interest is costing you in the long run.

Alternative Payment Method:

Use PayPal whenever possible. Although you are probably already familiar with the Website, PayPal now has an app that may make debit cards obsolete. Let’s say you and four friends go out to dinner. You could either pay with five different credit cards and cause your waiter or waitress a great deal of unnecessary trouble, or you could just pay for it with your PayPal app and then have your friends send you their portion of the bill instantly. This service is fast, safe, secure, and (as a new feature) allows you to deposit checks by taking a picture of it with your phone!

And All For Free?

I believe I can guess what you’re thinking. You’re thinking, “that all sounds well and good, but aren’t smart phones expensive? and wouldn’t it be counter intuitive to spend a lot of money on a phone to get my spending under control?” Yes, it would if smart phones had to be expensive. Look into T-mobile free cell phones, many of which are smart phones, when you get a new contract with them. What’s even better about this is T-Mobile’s amazing 4G network, which will allow you to download, and use, your apps more quickly.

Although getting your finances under control may be a daunting task, you can take the first steps with these amazing apps!

The Average Life Expectancy of Fiat Currency

Gold was the original basis for currencies around the world but as the years passed, many countries shyed away from this system in favor of a more stable base for their money. In 1971, the U.S. Dollar was officially no longer based upon the price of gold, instead basing itself purely on market value. This form of money is known as fiat currency and countries around the world have adopted this system. [1, 5]

Fiat Currencies Today

The Canadian dollar, along with the U.S. dollar, the Euro, the British pound, the Australian dollar, and the Japanese Yen, account for over 80% of currencies on the exchange today. [1] On average, fiat currency is expected to live for 27 years, though the money with the shortest life span only managed to survive for a month. [2]

The longest living currency, however, the British Pound Sterling, has managed to stay alive for the past 318 years. Since its inception, the Pound was originally valued purely off of the price of 12 ounces of silver. Today it is 0.5% of its original value, meaning that over the course of its lifetime, it has lost 99.5% of its worth. [2]

In a study of 775 currencies by DollarDaze, 77% of those currencies had failed. In fact, 95 currencies were destroyed as a result of World War II alone. In July of 2008, 71.7 billion dollars of U.S. currency was held as banknotes, though by December of that same year, it had soared to 782.3 billion. The sheer value of banknotes represented 47% of the total U.S. monetary base. [4]

How Do Currencies Lose Value?

Many factors influence the devaluation of a currency, though inflation plays a major role. The countries with lower inflation rates that have currencies with more buying power, are Germany, Japan, Switzerland, and Canada. Central banks also have a great deal of control over the value of a currency by way of interest rates. [3]

By raising the interest rate of a central bank, foreign currency traders are enticed to invest their money, ultimately raising the foreign exchange rate of that specific monetary system. A country’s trade debt will also drag down its currency value if the amount it spends on trading is greater than the money it earns. A system, called the terms of trade, compares the import price to the export price of various goods, either devaluing or improving upon the fiat currency. [3]

Public debt is similarly unattractive to foreign investors and it could scare away those who fear that a country may default on its deficits. Some companies gauge the value of a currency and give it a value, referred to as a country’s debt rating, which may ultimately determine a monetary system’s value. [3]

There are currently only 176 of the aforementioned 775 currencies alive today. [4] The most recent currency death occurred in Zimbabwe when its monetary system fell victim to hyperinflation. At the time of its death in 2009,100-trillion Zimbabwe Dollars was equal to only $1 U.S. Dollar. Now a collector’s item, the 100-trillion-dollar bank note that was printed for a brief time by the Zimbabwean government can be purchased for around $5.

Conclusion

Many economists say that what happened in Zimbabwe stands as a reminder of what hyperinflation can do to a country under the right circumstances. A number of currencies today have outlived the 27 year time span, though many have failed along the way. Perhaps countries can gain from seeing other currencies collapse and correct their flaws. [3]

Courtesy of ServeUCash.ca

[1] http://money.howstuffworks.com/exchange-rate2.htm
[2] http://www.resourceinvestor.com/2011/01/24/is-this-time-different-for-the-dollar
[3] http://www.investopedia.com/articles/basics/04/050704.asp#axzz1urFKAXwA
[4] http://dollardaze.org/blog/?post_id=00405
[5] http://www.investopedia.com/terms/f/fiatmoney.asp#axzz1urFKAXwA

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