Personal smartness: Make your money work harder for you

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By: Phil Bradford
on 13th Oct,2015

The same holds true in case of personal financial matters. A recent survey by Bankrate.
Personal smartness: Make your money work harder for you


Improvement and development happens, only when you realize your shortcomings, acknowledge them and are willing to overcome those through dedicated action. The same holds true in case of personal financial matters.

A recent survey by Bankrate.com involving 1,000 homeowners, showed that 35 percent of the participants weren't sure about the mortgage rates when asked something that they have been paying over the years. This is one of the most grievous but rampant mistakes committed by the consumers and it is from this basic ignorance related to personal finances which leads to serious consequences, said Greg McBride, Bankrate's senior financial analyst.

Basically, mortgage rates reveal the true cost of borrowing a home loan. When you are aware of your mortgage rates, then you'd be able to identify opportunities to have that refinanced into a better and more affordable home loan. Hence, lack of the necessary information will keep you in the dark and a lucrative mortgage refinance offer might pass you unnoticed.

As per the personal finance experts, there are some more basic personal financial questions to which most of us are ignorant of but need to find out the answers at the earliest. This is not only for our own good but also for our children.

Is my employer paying me fairly?

You and all the others working should have a good idea about their own worth in the job market. If you know what your colleagues and peers in your organization as well as in the same industry are being paid for the same set of skills and responsibilities that you bring on the table, then it'll help you to make some smart moves while job hunting for greener pastures and that you'd know the appropriate amount to ask for from your new employer or even from your current one. You know never how the answers might surprise you.

However, the above statement doesn't justify that you march into your boss's cabin every now and then and ask for a raise right away. The idea that you should take away from this point is that you should be alert and know your worth in order to lead a financially rewarding life that corresponds to your skills and experience. On the contrary, many people like you have been found to believe that they are underpaid but the truth is that, they're not. If this turns out to be true in your case, then you could at least heave a sigh of relief and rather than sulking over wrong notion, you can work toward developing your skills and turn yourself more productive, subsequently become qualified for a greater raise, automatically.

What coverage does my insurance policy provide?

In case of insurance policies, especially when it is homeowner's or renter's, then you should find out the values these would provide with respect to your possessions. The key coverage terms you must ask for are replacement value or cash value, as suggested by the Insurance information Institute's vice president, Loretta Worters, a leading industry group of the country.

As far as cash value is concerned, then it is affordable as it costs less. However, having cash value in your insurance policy will have you reimbursed for the items you presently own, ones that have depreciated in value, in the event of a loss, be it through theft or natural disasters. The amount reimbursed through cash value may not be sufficient, though. For example, a couch now comes with a price tag of $2,000 or $3,000, but after a period of about 10 years or so, you'd only get $100 approx in return, if you want to sell it or have it reimbursed through your insurance policies, since its old.

The price evaluation or valuation is a crucial aspect when drawing a distinction between a range of similar sound insurance policies. Moreover, knowing well of your possessions' true worth will help you to decide on the most opportune time to stake your claim. You could file your claim, either to have a stolen item replaced or get the compensation for your house in case it has been ravaged by fire or a natural calamity.

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