Thursday, May 28, 2009

Hot Diggity! My Cost of Living's Goin' Down!

I got two pieces of mail yesterday that brought some good news -- my cost of living is going down!

Good News #1
In February, my rent went up by $20/month and I'm currently paying $1,275/month on a 6 month lease. I predicted that my rent will probably go up again in August. But lo and behold, my apartment is offering a six or twelve month lease at a monthly rate of $1,175/month for a cool $100/month savings.

The dilemma I face here is whether to sign a 6 month lease or a 12 month lease. With my job situation uncertain, I'm leaning towards the 6 month lease. After all, my biggest asset in a job hunt is that I'm not tied down to a mortgage and I'm completely mobile.

I hate to admit this, but my first thought upon learning about the decreased rent was, "What can I buy with $100/month????" (*Slap myself*) My next thought was to pay off my debts more quickly. Hmmmm... but my EF is under-funded. Hmmmm...

Ultimately, I've decided to put the $100/month into my savings, but not into my EF. I will earmark it into my cost-of-living-adjustment (COLA) fund. As explained previously, my COLA fund was set up to pay for any unexpected or unanticipated increases in my monthly expenses (e.g., increased insurance rates, cell phote rates, etc. etc.) Money from my COLA fund will tide me over until I can re-adjust my budget to the new realities of life. Since my windfall is from an unexpected decrease in my cost of living, it only makes sense to use it to prepare for an unexpected increase, right?

Good News #2
Waaaaaay back when, I purchased an Accidental Death Coverage insurance policy that I've been paying about $7.95/month. It covers me for a cool $1M if I die accidentally as a "fare paying passenger" but only $100,000 as an auto/pedestrian and $50,000 for all other "accidents". I'm not sure why I never cancelled the policy other than I thought I would be "jinxing" myself. (Did I not tell you I'm insane?)

Anyhoo, the credit card that this policy's automatic payment system is linked to was cancelled due to a security breach. I just got word that this bogus policy will lapse unless I call to update my automatic payment to another credit card. Fat chance.

But blogger M is for Money's post titled, "Dying Isn't Cheap", gives me some pause for thought. Rather than banking the $7.95/month premium, perhaps I should instead apply it towards a legitimate term life insurance policy? After all, God forbid I should die accidentally or prematurely, I do not want to saddle my parents or my sister with the cost of cremation, etc.

I guess that will be my next research project - buy myself a cheap term life policy.


Sallie's Niece said...

Congrats on the rent decrease. From what I'm hearing it's a renter's market right now. And please share anything you find about life insurance. I did a calculator online and it said I needed to save a negative amount in case of my death? Maybe because I have so much debt and no assets. Phooey!

Miss M said...

Hey, that's awesome about your rent. It's a sign that the rental market is super soft, they really need you to stay!

Sorry to be so dreary lately, but thanks for the link! The funeral was yesterday, now I'm trying to get back to regular life. I only have life insurance through my job right now, but I know my family could cover these costs if need be. I was surprised how much a very basic funeral cost. I guess it's good we are now thinking of these things, morbid as it is. Thanks for the kind thoughts, I'm glad I got the chance to tell her story.

444 said...

I've never heard of rent going down. Nice score on that one.

Hey, Shtinky... are you the one who asked to see Mr. 444 in action? Check the blog... limited time before I take the link down.

chacha said...

Most full-time jobs offer term-life insurance as part of the benefits package. Every regular W-2 job I've ever had has covered me 2 or 3 times my annual salary in the event of death.

You should check your benefits out before you potentially buy an add'l policy.

MoneyFunk said...

As Dave Ramsey summarized... term life insurance is worthwhile as long as you continue to build your wealth. Because in 20 years you should not need the term life insurance because your wealth will allow you to cover yourself in case of accident or death. Hmmm.... food for thought. ;)

Great job on the rent decrease!

paranoidasteroid said...

Woohoo on the rent! That's fantastic news. I agree, apply it to the COLA savings is a smart move.

Miss M said...

More good news, Mothers cookies are back. I wrote a post the other day, it seems Kellogs bought the recipes and resurrected the brand. Sorry you're so busy, does that mean no layoff??

jpkittie said...

what a great time for a rent decrease!!!

Ms. MoneyChat said...

i can't say that i've heard of many voluntary rent decreases. great foresight on the part of your landlord.

now, i'm still chewing on your money management system (LOL). having a COLA account is pretty new to me. i see that it works for you, keep up the good work chica. oh and yeah, i think putting the money into the COLA account makes sense.