While doing my finances last weekend, I realized that my monthly auto insurance check hadn’t cleared. I have a frugal friend who works with the local agency, so I dropped her an e-mail to ask what I should do. She volunteered this bit of additional information:

Monthly sucks. You’re paying an extra $36 a year in fees for them to “handle” your account. Also, you have a “month in reserve” that you never get to use. It just sits there keeping you one month ahead, just in case. I would strongly suggest one of two options: go to statefarm.com and suffer through the millions of questions they ask and set it up on autopay. You save on the surcharge and you don’t have to mess with mail. Or….pay every six months.

Little expenses like this deprive you of money better spent on other things. (Before I switched to a credit union last year, I was paying $96 a year for the privilege of having an account at U.S. Bank.) I set up my insurance account to bill monthly when I was a broke college student; it never occurred to me to change it.

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