Simone's Blog: Money Magnet

As the Director of Affiliate Relations at HomeFree-USA, I’ve always been fascinated with how people handle their money. Like everyone else, I’ve had my financial ups and downs. In fact, it took me 32 months to pay off $32,000 in credit card bills and build up a six-month emergency fund. While that was a very difficult period, I am grateful – and wiser -- for the experience.

Through my personal experiences and working at HomeFree-USA, I’ve gained a ton of insight that I feel compelled to share. You’ll find those lessons here. Feel free to take the thoughts and ideas that resonate with you most and put aside the rest for later. I look forward to sharing my journey.

To buy or not to buy travel insurance, that is the question

Summer is the biggest vacation season of the year, so I'm sure you've seen all the suggestions (or fear tactics) for protecting your trip with travel insurance. Before you opt in, here's what you need to know.

What it is: There are two types of travel insurance. Trip cancellation reimburses you for the cost of the trip (check the fine print to determine if you'll receive all or a portion of your money back), and medical insurance, which pays for health care costs overseas.

How much does it cost: Varies, but typically 4-10% of the total cost of your trip. Not cheap.

When is it worth it: When you're taking an expensive vacation and cannot afford to lose the money should life go awry. Ex. If you make $55,000 a year and are taking an $8,000 cruise, that's a large amount to lose.

Also, if the trip is 6 or more months away. Although circumstances beyond your control can happen anytime, the further out the trip the more time there is for life to take a turn (note: the timing is still less important than the cost of the trip).

You may already be covered: 1/3 of credit cards automatically offer trip cancellation insurance, with an average $3,200 in coverage. Nearly 40% offer lost luggage insurance, and 1/4 offer delayed luggage insurance.

The medical coverage: Valuable if you're headed overseas (where your health insurance may not be valid), or somewhere remote in which getting to a hospital may require air evacuation.

What to pay attention to: How vast the coverage is. Some cover cancellation for any reason (most expensive) whereas many only cover a limited range of events and scenarios. Even the broad coverage policies may not be enforceable based on the reasoning for the cancellation.

When should you completely ignore travel insurance: Most domestic and low-budget trips. Depending on the airline, and the way in which you book your hotel, you may be able to change or cancel with no charge (hello, Southwest Airlines).

Happy vacationing!

And so it is.