The last few days we’ve gotten a lot of rain here in Central Florida and according to the local weather forecast, it looks like we will be getting a lot more rain soon. We’re spending the weekend getting our hurricane supplies in order just in case we need them. We’re keeping our fingers crossed that Fay will head elsewhere….

From the Frugal Blog Network this past week:

Tight Fisted Mister is having a charity drive. Frugal Babe is working on some rainy weekend projects. Almost Frugal writes about five frugal toys using food. Antishay Ventenne was taking a break this past week.

We participated in the Carnival of Personal Finance this past week which was hosted on No Debt Plan and in the Festival of Frugality which was hosted at MoneyNing.

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Everyone wishes they had a crystal ball and could tell when disaster is going to strike. Wouldn’t you love being able to tell when something unpleasant is about to happen? You could protect your family and belongings; you could also adapt your schedule to make time for dealing with the aftermath of the disaster.

Unfortunately, no one has the ability to plan and schedule the natural disasters that seem to strike when we’re at our absolute weakest. That inability to predict calamities is exactly why you need to have financial stopgaps in place to help you recover from these types of events. The various types of insurance available to individuals and families are the perfect place to begin building your emergency recovery plan.

Flood Insurance – For families who live in a designated flood plain, flood insurance is as much a part of life as auto insurance and taxes. If you’re a homeowner who is still paying off a mortgage, you’re probably going to be required to have it as a part of your homeowner’s insurance. Even if you’re renting, however, you will want to add this important coverage to your renter’s insurance to protect your personal property.

Homeowners who don’t live in a flood plain should also think carefully before deciding whether or not they need this coverage. Flood damage is often specifically excluded from the standard homeowner’s policy. You’ll need to weigh the likelihood of your having to deal with flood damage to decide if you need this type of insurance.

Hurricane Insurance – Much of the damage that comes from hurricanes is already covered by your standard homeowner’s policy. The damage that is done to the exterior of your home by the force of the hurricane’s wind is typically a covered by your standard homeowner’s policy. Pay careful attention, however, to your policies disclosed exclusions. If your policy specifically doesn’t cover hurricanes and you live in a hurricane-prone area, you’ll want to purchase coverage for this type of event.

You should also note that a great deal of the interior damage that is associated with hurricanes isn’t actually considered hurricane damage. Water damage resulting from the flooding that often follows a hurricane is classified as flood damage. Bear this fact in mind when you’re evaluating your need for flood insurance.

Wind Damage Insurance – Wind damage insurance is often a part of your standard insurance coverage. However, you will still want to read the fine print of your policy to make sure your home is protected. Some areas of the country that are particularly prone to strong wind-based storms will require the purchase of additional coverage to provide benefits for damage to your home or property from these types of storms.

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One of the hardest parts of learning to being fiscally responsible is breaking free from the payment mentality. Becoming mired down in monthly payments creates a cycle seems almost impossible to break free from. Because you always have a payment to make, you are never able to save up enough money to pay cash for your next big purchase. Then, when the time comes that you have to make a large purchase, you are forced to finance it and begin the whole cycle again.

How many times have you decided if you could afford something based solely upon whether or not you could afford its monthly payment? You didn’t stop and evaluate whether or not you could afford to spend $2,000 on a new television. Instead you considered the $50 payment. “I can do that,” you thought to yourself. Never mind the fact that you’ll be making that $50 payment for the next four or five years.

To help you learn to get away from the payments mentality here are a few things you should consider before you finance any purchase:

You should never finance something for a longer length of time than you will use it. If you typically like to change cars every four or five years, you shouldn’t take out an auto loan that extends into six years. Likewise, you shouldn’t finance the purchase of a new computer in a way that will make the payment stick around longer than the computer’s technology.

Determine how much you can afford to pay for an item without regard to the cost of its monthly payment. Everything sounds affordable when you break it up into tiny monthly payments. When shopping for a large purchase, don’t be tempted by the payment amount. Know how much you can afford to pay for the item and resolve to stay under that amount.

Financing yet another item will require you to wait even longer to rid yourself of those pesky payments. Imagine this scenario for a moment. After struggling for a year to pay off all of your debt, you’ve finally made some progress. You only have one monthly payment left. Then, in a moment of weakness, you succumb to temptation and finance the purchase of a new range. You could have bought a slightly less flashy model and paid cash, but you decided to go all out and buy the latest and greatest version of range. Now, you’re locked into another three years of payments. You’ve just derailed an entire year’s hard work.

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