insurance http://www.wisebread.com/taxonomy/term/3139/all en-US The 9 Most Important Lessons I Learned About Money When I Became a Landlord http://www.wisebread.com/the-9-most-important-lessons-i-learned-about-money-when-i-became-a-landlord <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-9-most-important-lessons-i-learned-about-money-when-i-became-a-landlord" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_landlord_apartments_000065988327.jpg" alt="Man learning important lessons about money as a landlord" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>With 30 years under my toolbelt as a landlord, I've had my share of lessons learned &mdash; so I thought it was about time I put some of those learnings down on paper. Previously, I've written about key considerations when <a href="http://www.wisebread.com/when-location-isnt-king-how-to-choose-income-rental-property">shopping for a rental property</a>. Here, I focus on money lessons learned <em>after</em> closing the deal and actually managing the property.</p> <p>The real estate properties that form the basis of my experiences are a two-family property my wife and I have owned and managed for 30 years, and a rental condo we managed for 20 years then sold. Now on to those lessons...</p> <h2>1. Learn to Be Handy</h2> <p>Owning rental properties is all about building &quot;sweat equity.&quot; The less you pay others to do maintenance and make repairs, the more you keep for yourself. But when you make the repairs, <em>do</em> buy items of higher quality that will last longer. Having to return over and over to make the same repair gets old quickly and winds up costing you more in the end.</p> <h2>2. Be Respectful and Responsible</h2> <p>Remember that both landlord and tenant have responsibilities. I try to put my best foot forward with a new tenant by making sure the unit is in excellent move-in condition, and by responding promptly when they reach out to me. More often than not, they return the favor by taking better care of the property. In other words, &quot;What goes around comes around.&quot;</p> <h2>3. Get a Good Lease (From a Lawyer)</h2> <p>Your lease is a legally binding contract. Make sure you read, understand, and agree to every word. Who is responsible for lawn care? Who shovels the snow? Does it require tenants to be responsible for small repairs (say, under $20) and basic maintenance such as replacement of light bulbs? How much notice do tenants need to give you that they are leaving? (I suggest at least one month.)</p> <p>Consider the lease a flexible document that can be improved over time to address lessons learned. For example, we've found a month-to-month lease works better for us than an annual term, because it provides more flexibility for tenant changes.</p> <h2>4. No Pets! No Exceptions</h2> <p>It took a double-whammy for us to learn this lesson. The downstairs unit of our two-family has very nice Andersen casement windows with stained wooden sills. The upstairs has wall-to-wall carpeting to cushion sounds between the floors. Our very first choice of tenants to occupy the downstairs unit had two cats. Even today, if I close my eyes, I can clearly see images of the deep gouges in those (previously) beautiful sills, and the rips in the Anderson screens.</p> <p>Upstairs, the culprit was a dog. He used the carpeting as an opportunity to mark his territory &mdash; and he did a thorough job, extending into the hardwood flooring underneath. After spending thousands of dollars to repair the windows, replace the carpets, and sand and refinish the wood flooring, it has now become very easy to answer the question we've since been asked many times: &quot;Do you allow pets?&quot; Without hesitation, the answer is always the same: &quot;NO!&quot; I take pride in even sticking to my guns when a recent prospect offered to add $300 per month to the rent if we allowed him to keep a pet piglet.</p> <h2>5. Check Tenant References &mdash; And Their Car</h2> <p>Banks and other lenders often use the &quot;5 C's of Credit&quot; to determine whether or not a borrower qualifies for a loan. One of those &quot;C's&quot; is Character. You want to rent to someone of strong character, who is responsible and honest. So ask for and check both employer and personal references. Do Google, Facebook, and LinkedIn searches while you're at it. Look for other clues, as well. For example, when meeting a prospective tenant, I always look at their car to see how clean they keep it on the outside, and how cluttered it is on the inside. Unlike a banker, you're not just lending money; you're lending someone your house.</p> <h2>6. Check Tenant Finances: Trust but Verify!</h2> <p>Another of the &quot;5 C's&quot; is &quot;Capacity.&quot; Capacity answers the question, &quot;Do they have enough income to afford the rent?&quot; As a general rule of thumb, your rent plus utilities should be no more than 30% of your gross monthly income. Ask for their most recent pay stub, and call their employer to verify their employment. It's human nature to want to trust other people, but in this case you need to back it up by verifying.</p> <h2>7. Wait for the Right Tenant</h2> <p>This one falls under the &quot;Pay me now or pay me later&quot; category. I do admit, it's easy to yield to the taunts of the devil on one shoulder (&quot;Live for the moment and take the money now!&quot;) rather than heeding advice from the angel on the other shoulder (&quot;Wait for a better candidate!&quot;). Trust me, it's much more costly &mdash; not just financially, but also in time and aggravation &mdash; to remove a bad tenant than to forego one or two months' rent in order to find a good one. Do yourself a favor and take the advice of your better angels.</p> <h2>8. Get an Umbrella Insurance Policy</h2> <p>Being a landlord elevates your risk of being sued. It only takes one lawsuit &mdash; perhaps involving a tenant falling down stairs or slipping on driveway ice &mdash; and you could face hundreds of thousands of dollars in damages. So take out a general liability, or umbrella, insurance policy. Don't risk getting wiped out. Paying $50 per month for umbrella insurance is a small price in exchange for sleeping soundly at night.</p> <h2>9. Take an Honest Look in the Mirror</h2> <p>Do you have the people skills to deal constructively with tenants? Are you willing to be on call 24/7 to respond to complaints big and small, or to drop everything for the repair of a furnace, toilet, or hot water heater? At times these things are a true test of patience and perseverance.</p> <p>Self-awareness is key. If you have a spouse or partner, and if the demands of property management begin to weigh more and more heavily on either or both or you over time, it could drive a wedge in your relationship. No amount of rental income is worth that price.</p> <p>So, taken as a whole, has our experience been worth the effort? Yes. The two-family has worked out better, and we still have it. It generates a regular monthly stream of positive cash flow (over $1,000 per month after all expenses). Granted, it requires time and attention (isn't everything in life a tradeoff?), but in return we've received the equivalent of a modest monthly pension payment since our early 40s. Not many other investments can do that.</p> <p><em>Do you own rental property? Any of these lessons sound familiar? And if you rent, how's it look from the other side?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/keith-whelan">Keith Whelan</a> of <a href="http://www.wisebread.com/the-9-most-important-lessons-i-learned-about-money-when-i-became-a-landlord">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/self-employed-heres-how-to-get-your-apartment-application-approved">Self-Employed? Here&#039;s How to Get Your Apartment Application Approved</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-smart-ways-to-get-your-apartment-deposit-back">7 Smart Ways to Get Your Apartment Deposit Back</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/14-things-insurance-agents-dont-want-you-to-know">14 Things Insurance Agents Don&#039;t Want You to Know</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-ways-to-rent-an-apartment-with-bad-credit">7 Ways to Rent An Apartment With Bad Credit</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-location-isnt-king-how-to-choose-income-rental-property">When Location Isn&#039;t King: How to Choose Income Rental Property</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing insurance landlords leasing money lessons rental properties Tue, 09 Feb 2016 14:00:06 +0000 Keith Whelan 1650518 at http://www.wisebread.com 6 Ways the Sandwich Generation Can Get Ahead http://www.wisebread.com/6-ways-the-sandwich-generation-can-get-ahead <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-ways-the-sandwich-generation-can-get-ahead" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_mom_grandmother_000065344773.jpg" alt="Young woman learning how the sandwich generation can get ahead" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The Sandwich Generation &mdash; those caught caring for aging parents while still supporting children &mdash; face daunting financial challenges. How can they live up to their responsibilities, while still reaching their own financial goals? (See also: <a href="http://www.wisebread.com/10-money-goals-all-30-somethings-should-have?ref=seealso">10 Money Goals All 30-Somethings Should Have</a>)</p> <h2>1. Set Boundaries</h2> <p>Simultaneously caring for a minor and parent is taxing on your &quot;me time.&quot; All told, 42% of Gen Xers and 33% of Baby Boomers are <a href="http://www.pewsocialtrends.org/files/2013/01/Sandwich_Generation_Report_FINAL_1-29.pdf">living this scenario</a> &mdash; and feeling the squeeze in places other than just their wallets. So, how to make time and energy for oneself when so many others are depending on you?</p> <p>One way is to set boundaries. Maybe you need one or two days away from catering to the needs of others. Set up a schedule with other members of your family so that a spouse or brother or cousin is available to relieve you from in-home care duties on certain days. Perhaps common errands like lawn mowing and grocery shopping are becoming difficult to juggle. If you have a mature and capable child, consider delegating out some of these chores.</p> <p>Setting boundaries might be as simple as carving out a two-hour block each day during which you engage in whatever activities &mdash; napping, exercising, reading &mdash; benefit you. The key, of course, is sticking to it. Honor that time you've created for yourself and know that it's helping not only you, but those who depend on you, too.</p> <h2>2. Consider Long-Term Care Insurance</h2> <p>If you're caring for an ailing parent, you may want to mandate that Mom or Dad invest in long-term care insurance. If they're resistant, explain that it's for you as much as it is for them. After all, you don't want to go bankrupt, and your parent doesn't want that for you either. Long-term care insurance policies reimburse policyholders a daily amount for services to assist with the cost of daily activities such as bathing, dressing, or eating. The cost of a long-term care policy is determined by factors such as how old the policyholder is when he or she buys in, and the predetermined maximum amount that the policy will pay per day.</p> <h2>3. Invite Mom and Dad to Move In</h2> <p>If your parents move in with you, you can all save money in property taxes &mdash; up to tens of thousands of dollars, depending on where you reside. Not to mention, the average annual cost of a <a href="https://www.metlife.com/mmi/research/2012-market-survey-long-term-care-costs.html#keyfindings">private nursing home</a> room is about $91,000, while the the cost of assisted living falls around $43,000.</p> <p>Multigenerational housing eliminates such expenses and grants you the peace of mind that Mom and Dad are being well-cared for by yourself and other members of the family. Establishing a multigenerational household may seem daunting, but don't discount the many social benefits. Your children will have a better shot at developing a meaningful relationship with their grandparents if they're all living under one roof. Same goes for you and your parents.</p> <h2>4. Collect Rent From Grown Kids Who Move Back Home</h2> <p>At one time, it was embarrassing for a young adult to move back in with his or her parents. But today, that simply isn't so. In fact, thanks to The Great Recession, there are so many young adults moving back in with Mom and Dad that the stigma is practically non-existent.</p> <p>Living at home eases the burden of student debt while helping young adults save for their education, a car, and a place of their own. But remember that all of these benefits are still well in play when you charge your son or daughter a fair rent. And you should. Young adults who pay to live at home are more likely to feel motivated to get a good job, establish a career, improve their education, and put their degree to good use. You needn't charge the amount it would cost to rent an apartment in your city or town. A couple hundred dollars a month is typically enough to keep your son or daughter edging to better themselves.</p> <h2>5. Claim a Parent as a Dependent</h2> <p>If you're caring for a parent who has a gross income of no more than $3,950 &mdash; this number excludes Social Security and disability &mdash; you can <a href="http://www.elderlawanswers.com/claiming-a-parent-as-a-dependent-3657">claim them as a dependent</a> when you file your taxes.</p> <h2>6. Write Off Your Parent's Medical Expenses</h2> <p>The IRS understands the strain of paying for a parent's medical tab. If you footed the bill for a parent's medical care, you may be able to <a href="https://www.irs.gov/publications/p502/ar02.html#en_US_2015_publink1000178856">deduct those expenses</a> when you file your taxes. To quality, total medical expenses, including the cost of prescription drugs, hospital care, and doctor's visits, must exceed 10% of your adjusted gross income.</p> <p><em>Are you part of the Sandwich Generation? How are you coping?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/brittany-lyte">Brittany Lyte</a> of <a href="http://www.wisebread.com/6-ways-the-sandwich-generation-can-get-ahead">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/does-your-kid-need-an-ira">Does Your Kid Need an IRA?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-much-should-your-kids-know-about-your-finances">How Much Should Your Kids Know About Your Finances?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/24-tips-for-having-a-baby-without-going-broke">24 Tips for Having a Baby Without Going Broke</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-things-your-boomer-parents-could-afford-that-you-cant">8 Things Your Boomer Parents Could Afford That You Can&#039;t</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-apps-every-dad-needs">6 Apps Every Dad Needs</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Family Lifestyle baby boomers dependents gen x insurance parents sandwich generation taxes Mon, 01 Feb 2016 12:00:03 +0000 Brittany Lyte 1646408 at http://www.wisebread.com 4 Ways the 50% Rule Can Save You Money http://www.wisebread.com/4-ways-the-50-rule-can-save-you-money <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-ways-the-50-rule-can-save-you-money" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_holding_cash_000040930446.jpg" alt="Woman learning ways 50% rule can save her money" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The 50% rule is a simple guideline that can help you determine whether it's time to replace an appliance, adjust your budget, and lots more. Here's how it can help you save real money.</p> <h2>1. Appliances</h2> <p>When a household appliance has an issue, it may be difficult to determine whether you should schedule a repair or replace the machine altogether.</p> <p>To easily determine if it's worth keeping, use the 50% rule. If the appliance has used up more than 50% of its useful life and the cost of the repair is more than 50% of the cost of a new appliance, then you should replace it.</p> <p>If you have a warranty on your appliance, find out if any of the repairs are still covered. Most appliance warranties cover labor and parts for one to two years. Some small repairs can also be completed as DIY projects.</p> <p>On the other hand, Consumer Reports recommends that if an item has already <a href="http://www.consumerreports.org/cro/magazine/2014/02/repair-or-replace/index.htm">broken down once before</a>, it might make sense just to replace it. Keep in mind that if you decide to keep your original appliance, there will be extra costs like additional maintenance and possibly a &quot;trip charge&quot; from the service contractors you hire.</p> <h3>What You'll Need</h3> <p>You can easily compare the costs of repair versus replacement to determine what's a better value. In order to get the most accurate estimate possible, there are several pieces of information you will need:</p> <ul> <li>The appliance's expected useful life: Knowing how long your appliance is expected to last will help you determine if it's worth keeping. (See also: <a href="http://www.wisebread.com/this-is-how-long-these-6-appliances-should-last?ref=seealso">This Is How Long These 6 Appliances Should Last</a>)<br /> &nbsp;</li> <li>The original purchase price of the appliance.<br /> &nbsp;</li> <li>The average cost to repair your type of appliance: If your service contractor will offer a free estimate, this will help you make a more informed decision.<br /> &nbsp;</li> <li>The cost of a new appliance.</li> </ul> <h3>Benefits of Replacing</h3> <p>You may also want to consider the benefits of replacing the appliance to a newer, more updated version. These benefits could include:</p> <ul> <li>Improved energy efficiency, which may mean lower electricity bills, lower insurance, or tax deductions.<br /> &nbsp;</li> <li>More features that will improve your life.<br /> &nbsp;</li> <li>Less chance of repairs in the near future.</li> </ul> <h2>2. Real Estate</h2> <p>In real estate, the 50% rule states that operating expenses and vacancy account for about 50% of the rent. This means that if a property rents for $1,000 per month, about $500 will be spent on expenses and vacancies. The remaining 50% would be devoted towards mortgage principal and interest, with the leftovers serving as cash flow.</p> <p>This can serve as a general guideline to help you determine if a particular real estate investment will be worth it in the long run. If you are considering a long term buy and hold, then the 50% rule can help save you money by preventing any purchases that won't pay off.</p> <h2>3. Insurance Claims and Disaster Recovery</h2> <p>After a natural disaster, if the damages do not exceed 50% of the cost of replacing the building, then it will be deemed repairable. The Federal Emergency Management Agency <a href="https://www.fema.gov/pdf/floodplain/nfip_sg_unit_8.pdf">uses a 50% rule</a> to determine if something is considered to have heavy damage or needs substantial improvement. The rule states that if the repair costs are 50% or more of the building's value, then the building must be elevated and brought into compliance.</p> <p>Another application of the 50% rule states that when a building is to be renovated, if the total costs of improvement are 50% or more of the building's value, it will have to be brought into compliance. This is a hidden cost that most don't know about. Being aware of what's to come can help save you time, money, and frustration.</p> <h2>4. Budget</h2> <p>If you've heard of the <a href="http://www.wisebread.com/build-a-better-budget-in-5-minutes-flat">50/20/30 budget</a>, it relies on the 50% rule. It specifies that 50% of your budget should be dedicated to essential expenses (like housing, food, and transportation), 20% to financial obligations (like debt repayment, retirement, and emergency savings), and 30% to personal expenses (like entertainment, dining out, and phone, cable, and Internet expenses). By following this guideline, you can create a workable budget that alerts you when you are spending too much, saving you money over time.</p> <p>Keep in mind that the 50% rule is a <em>guideline</em> and won't always work perfectly. It's best to make adjustments to the numbers so that you can get a better estimate and make a more informed decision.</p> <p><em>Have you ever applied the 50% rule to your life? Please share your thoughts in the comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/andrea-cannon">Andrea Cannon</a> of <a href="http://www.wisebread.com/4-ways-the-50-rule-can-save-you-money">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/flashback-friday-the-95-best-ways-to-get-fit-for-free">Flashback Friday: The 95 Best Ways to Get Fit for Free</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-ways-to-save-and-make-money-while-traveling">12 Ways to Save and Make Money While Traveling</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/flashback-friday-the-60-best-ways-to-use-food-other-than-eating-it">Flashback Friday: The 60 Best Ways to Use Food Other Than Eating It</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/flashback-friday-the-76-best-life-lessons-you-should-learn-by-30">Flashback Friday: The 76 Best Life Lessons You Should Learn by 30</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-money-goals-all-30-somethings-should-have">10 Money Goals All 30-Somethings Should Have</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting 50% rule appliances guidelines insurance real estate saving money Fri, 29 Jan 2016 12:00:04 +0000 Andrea Cannon 1646405 at http://www.wisebread.com 6 Retirement Products That Aren't Worth Your Money http://www.wisebread.com/6-retirement-products-that-arent-worth-your-money <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-retirement-products-that-arent-worth-your-money" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/financial_nest_egg_000061502802.jpg" alt="Finding out which retirement products aren&#039;t worth your money" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Saving for retirement is actually quite simple. But there are many products out there that make it seem more complicated than it actually is. Others simply cost more than they're worth.</p> <p>As you approach retirement age, you may hear about all kinds of ways to ensure that you have enough money to continue to live comfortably. But steering clear of the following products may ultimately help you keep more money in your pocket.</p> <h2>1. Variable Annuities</h2> <p>A variable annuity might make sense for those approaching retirement, but generally doesn't for those who are already retired. That's because the idea behind a variable annuity is that you invest a sum of money and get a stream of income at a future date. Try to access your money early, and you might pay a penalty. Current retirees are better off with an immediate payout annuity, which requires you to pay an up-front lump sum, and then provides regular payments immediately. It's worth noting that variable annuities can have fees of as much as 3.5%, according to Kiplinger.</p> <h2>2. Reverse Mortgages</h2> <p>We've all seen the ads on television, and the concept seems simple enough: You use the equity in your home to help fund your retirement via a guaranteed income stream. Reverse mortgages are a legitimate retirement product, but there are downsides, including high closing costs and fees. Plus, the equity in your house won't last forever, and by tapping it, you leave less for your heirs when they inherit the home. (See also:&nbsp;<a href="http://www.wisebread.com/5-downsides-of-a-reverse-mortgage">5 Downsides of a Reverse Mortgage</a>)</p> <h2>3. Long-Term Care Insurance</h2> <p>It's daunting to think about the costs of your care as you age. Assisted living and nursing home care can cost anywhere from $40,000 to $90,000 a year. A long stay in a nursing home might mean you'll outlast your savings and leave very little to your family.</p> <p>An insurance policy for long-term care might seem like a good investment, but it's important to know that the premiums can run upwards of $2,000 annually for a healthy couple at age 60. If your golden years are healthy and more independent than you expected, you may pay more in premiums than what your care would cost. Retirees are likely better off investing well and trying to save as much as possible for their retirement &mdash; unless they have good reason to believe they'll make use of long-term care facilities or services.</p> <h2>4. Whole Life Insurance</h2> <p>On the surface, whole life insurance seems like a swell product: You get life insurance along with some tax-free growth. But whole life insurance is generally more expensive than term life insurance, and the investment returns are usually less than what you might find elsewhere.</p> <h2>5. Junk Bonds</h2> <p>It certainly makes sense for retirees to have bonds in their portfolios, but they should steer clear of these types of high-yield bonds, which don't perform particularly well unless the economy is doing great. And if the economy is doing poorly, they could be crushed. If you're close to retirement and still looking for yield, take a look at stable dividend stocks instead. If you want safety, go with lower-risk bonds or cash.</p> <h2>6. Non-Traded REITs</h2> <p>Real estate investment trusts (REITS) can be great investments for retirees, because they offer high dividend income with low volatility. However, there are some REITs that are public, but not traded on any public exchange. The Financial Industry Regulatory Authority has issued a warning about these products, because upfront fees are high, and they are often difficult to sell. If you want real estate in your portfolio, look to some of the larger REITs like Simon Property Group or Boston Properties, or find a good REIT mutual fund or ETF.</p> <p><em>Where are you keeping your retirement funds?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/6-retirement-products-that-arent-worth-your-money">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-know-what-annuities-are-you-might-be-missing-out">Don&#039;t Know What Annuities Are? You Might Be Missing Out</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-unexpected-expenses-for-retirees-and-how-to-manage-them">9 Unexpected Expenses for Retirees — And How to Manage Them</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-retirees-are-using-annuities-instead-of-early-social-security">Why Retirees Are Using Annuities Instead of Early Social Security</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-much-do-i-need-to-retire-how-much-can-i-spend">How much do I need to retire? How much can I spend?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-great-retirement-jobs">6 Great Retirement Jobs</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement annuities insurance junk bonds REITs reverse mortgages Tue, 19 Jan 2016 14:00:03 +0000 Tim Lemke 1638138 at http://www.wisebread.com 10 Money Goals All 30-Somethings Should Have http://www.wisebread.com/10-money-goals-all-30-somethings-should-have <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-money-goals-all-30-somethings-should-have" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/30-somethings_financial_goals.jpg" alt="30-somethings achieving financial goals" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You are not 29 anymore. It's time to start acting like a grown-up. Aside from doing mature things like ironing your clothes and eating more kale, it's also time to get your financial house in order.</p> <p>Take a look at these 10 financial goals that all 30-somethings should have. Do yours line up?</p> <h2>1. Saving for a Comfortable Retirement</h2> <p>You may think that retirement is a long way off, but you're approaching a time when retirement age is closer than your college years. Crazy, but true. Hopefully, you've saved at least a little bit toward retirement up until this point. Now is the time to ramp it up. Try to max out your contributions into retirement accounts, if you can. If you're maxed out on your 401K, open an IRA. The last thing you want is to be sitting there at age 65 unable to retire because your 30-something self didn't plan ahead. (See also: <a href="http://www.wisebread.com/6-financial-mistakes-to-stop-making-by-age-40">6 Financial Mistakes to Stop Making by Age 40</a>)</p> <h2>2. Rebalancing Investments</h2> <p>If you began putting money into your 401K or other retirement plans in your 20s, that's great. But have you looked at them recently? Chances are, the balances of those investments may be out of line with what you intended. You may be too heavily invested in company stock. You may have less exposure to international investments than you planned. You may have too many large-cap investments and not enough small-cap stocks. Consider talking with an investment advisor to find the right investment mix, and get in the habit of rebalancing once each year.</p> <h2>3. Eliminating Credit Card Debt</h2> <p>If you racked up bills due to some irresponsible spending habits when you were younger, it's time to get yourself in line and <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">eliminate that high-interest debt</a>. Start by paying off the card with the highest interest rate and go from there. And then once you that debt paid off, start getting in the habit of paying your credit card bill in full each month. (See also: <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?ref=seealso">When to Use a Balance Transfer to Pay Off Credit Card Debt</a>)</p> <h2>4. Paying Off Student Loans</h2> <p>Student loans were crushing to you in your 20s. But now you're reaching a point when maybe you can see the bottom of that debt pile. If elimination of that debt is within reach, go after it aggressively until it's all gone. You'll be amazed at how liberating it will feel, both financially and psychologically. (See also: <a href="http://www.wisebread.com/should-you-refinance-your-student-loan?ref=seealso">Should You Refinance Your Student Loan?</a>)</p> <h2>5. Earning More Money</h2> <p>Now that you're in your 30s, there's a good chance you have a good sense of what you want to be when you grow up. You have chosen a career path and can gain some income stability. Moreover, you have now been in the workforce for more than a decade, and have experience that you can leverage to go after that new job, that raise, and that promotion.</p> <h2>6. Saving for a Down Payment On a Home</h2> <p>If you are earning more and have your credit card and student loan debt gone, now's the time to stop renting and buy a home. If you plan to settle down, you're doing to want to save as much as you can to afford the house you want. Being saddled with a huge mortgage will only kill you later. Save up, so those monthly mortgage payments are manageable &mdash; or even non existent.</p> <h2>7. Building Up an Emergency Fund</h2> <p>Living on the edge was fun and exciting when you were in your 20s. If you got into a pinch, you could always bum money off your friends or parents. But it's not so cute when you're in your 30s and one major car repair or broken furnace from a financial disaster. It's time to start building up that emergency fund &mdash; at least three months worth of expenses &mdash; so you can easily handle whatever comes your way.</p> <h2>8. Being Properly Insured</h2> <p>When you're young, you may not feel it's necessary to save for your car insurance. You might settle for a low-cost health plan and skimp on some cheap renters' insurance. But you're older now. You have stuff that's worth money. And you're no longer invincible, health-wise. You may even have people in your life who count on you. This means you may need a more robust health insurance plan. You may need better homeowner's insurance. And it may be time to look into some term life insurance plans, so that your loved ones are taken care of if something happens to you. You may not want to think about bad things happening, but it's not like being unprepared for disasters will prevent them from happening.</p> <h2>9. Writing a Will</h2> <p>I'm not suggesting you need to start worrying about death, but you need to at least give some guidance on how your things should be divided up if you pass. And if you have kids, it's especially important to outline a plan for how they'll be cared for. You can get a will completed fairly easily online at websites like LegalZoom.</p> <h2>10. Giving to Charity</h2> <p>You are hopefully at a point in your life when you have a little extra money to give to those less fortunate. If you have some extra cash, consider donating it to a cause that you support. Not only will it be great for the recipient and make you feel good, but you can get a tax deduction as well.</p> <p><em>Do you have your act together, or are your finances still stuck in the previous decade?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/10-money-goals-all-30-somethings-should-have">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-retirement-latte">The Retirement Latte</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/21-things-that-young-adults-absolutely-need-to-know-about-money">21 Things That Young Adults Absolutely Need to Know About Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/15-personal-finance-rules-you-should-be-breaking">15 Personal Finance Rules You Should Be Breaking</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-mistakes-you-need-to-stop-making-by-30">5 Financial Mistakes You Need to Stop Making by 30</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-best-free-financial-learning-tools">9 Best Free Financial Learning Tools</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Life Hacks Budgeting budgeting insurance investing millennials resolutions saving Thu, 14 Jan 2016 12:01:03 +0000 Tim Lemke 1638009 at http://www.wisebread.com Is an FHA Home Loan Right for You? http://www.wisebread.com/is-an-fha-home-loan-right-for-you <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/is-an-fha-home-loan-right-for-you" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/married_couple_house_000023047862.jpg" alt="Couple learning if an FHA home loan is right for them" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You're ready to buy a home, and you know that you can afford the monthly payments that come with a mortgage loan. But there's one challenge: You don't have enough money for a large down payment.</p> <p>Don't despair: An FHA loan can help. These mortgages insured by the U.S. Department of Housing and Urban Development's Federal Housing Administration require more affordable down payments, which could make getting the home of your dreams an easier financial task. And borrowers can qualify for FHA loans even with lower credit scores. FHA loans, though, do come with some additional fees, which might impact the overall cost of the mortgage. (See also:&nbsp;<a href="http://www.wisebread.com/heres-why-your-parents-could-buy-a-home-while-you-still-rent">Here's Why Your Parents Could Buy a Home While You Still Rent</a>)</p> <p>Still interested? Read on to learn whether an FHA loan is for you.</p> <h2>When FHA Loans Make Sense</h2> <p>You can technically qualify for an FHA loan even if your FICO credit score is as low as 500. However, that doesn't mean that you won't struggle to find a lender to work with you. The FHA doesn't actually originate loans &mdash; it only insures them &mdash; so, you'll still have to work with a private lender to get an FHA mortgage. And many of these lenders (despite the willingness of the FHA to insure borrowers with such low scores) won't provide mortgage money to borrowers whose scores are too close to 500.</p> <p>Still, FHA loans are a good option for borrowers with credit scores that are below, say, 700. Today's lenders consider FICO scores of 740 or higher to be ideal. They'll reserve their lowest interest rates for borrowers with strong credit. And if your score is below 640, you'll find that only a smaller number of lenders will be willing to work with you. These lenders might recommend that you apply for an FHA loan if your score is too low.</p> <p>FHA loans aren't just a good option for borrowers with weak credit, though. They're also a good choice for borrowers who don't have a lot of money for a down payment. If your FICO credit score is at least 580, you can qualify for an FHA loan that requires a down payment of just 3.5% of your home's purchase price.</p> <p>For a home costing $180,000, that 3.5% down payment comes out to a manageable $6,300.</p> <p>If your FICO credit score is at least 500, you can technically qualify for an FHA loan that requires a down payment of 10% of your home's final purchase price, which is still better than the 20% down payment that some conventional lenders will require.</p> <h2>The Downsides of an FHA Loan</h2> <p>There is a downside to FHA loans: They come with higher fees than conventional loans.</p> <h3>Extra Up Front Costs</h3> <p>If you take out an FHA loan, you'll have to pay two types of mortgage-insurance premiums. The first is an upfront premium of 1.75% of your total mortgage loan. If you take out a loan for $175,000, that comes out to $3,062.75 (you'll have to pay this premium when you take out the mortgage). You can either do this in one lump sum as a closing cost, or you can include it in your loan amount &mdash; turning, say, that $175,000 loan into $178,062.75 &mdash; and pay it off with each of your monthly payments.</p> <h3>Mortgage Insurance</h3> <p>An FHA loan also comes with an annual mortgage insurance premium that you'll have to pay each year. This annual fee depends on the length of your loan and the size of your down payment.</p> <p>If you are taking out a 15-year loan and you put down less than 10% of your home's purchase price, your annual mortgage insurance premium will be 0.7% of your outstanding loan balance. If you put down 10% or more on a 15-year loan, your annual premium will be 0.45% of your loan balance.</p> <p>If you take out a 30-year loan with a down payment of less than 5%, your annual mortgage insurance premium will be 0.85% of your loan's balance. If you put down more than 5% on a 30-year mortgage, that premium will be 0.8% of your balance.</p> <p>So, if you put down 3.5% initially on a 30-year FHA loan and your loan's outstanding balance is $180,000, you'd pay $1,530 that year in mortgage insurance premiums. Again, you would pay that amount off in small amounts with each monthly mortgage payment.</p> <p>Unlike conventional loans, you'll never be able to cancel the mortgage insurance premium. With conventional mortgages, you can cancel your mortgage insurance payments once your loan's balance is 80% or less than your home's market value.</p> <p>So when you're deciding whether an FHA loan is right for you, you'll have to weigh whether the extra yearly fees are worth the convenience of those low down payments and looser credit requirements. For many borrowers who otherwise can't afford the dream of homeownership, the answer may be yes. But if saving a larger down payment for a traditional mortgage <em>is</em> feasible, it's likely to result in lower overall costs.</p> <p><em>Did you buy a home with an FHA loan? What was the process like for you?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/is-an-fha-home-loan-right-for-you">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-lenders-look-for-in-a-loan-application">5 Things Lenders Look For in a Loan Application</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-terrible-things-foreclosure-does-to-your-credit">3 Terrible Things Foreclosure Does to Your Credit</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-it-makes-sense-to-apply-for-a-mortgage-loan-without-your-spouse">When It Makes Sense to Apply for a Mortgage Loan Without Your Spouse</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-qualify-for-a-mortgage-with-a-small-downpayment">5 Ways to Qualify for a Mortgage With a Small Downpayment</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-money-moves-to-make-for-tomorrows-mortgage">6 Money Moves to Make for Tomorrow&#039;s Mortgage</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing credit scores fha loans fico insurance lenders mortgages Mon, 11 Jan 2016 14:00:03 +0000 Dan Rafter 1634308 at http://www.wisebread.com The 7 Things Every Frugal Person Should Have In Their Wallet http://www.wisebread.com/the-7-things-every-frugal-person-should-have-in-their-wallet <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-7-things-every-frugal-person-should-have-in-their-wallet" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_shopping_purse_000078780735.jpg" alt="Woman learning things every frugal person should have in their wallet" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>I use my wallet not only for spending money, but for <em>saving </em>money as well. Having the right resources in your wallet makes it much more likely that you'll take advantage of money-saving opportunities that come along every day.</p> <p>What should you have in your wallet to help you be a savvy saver?</p> <h2>1. Cash</h2> <p>Carrying cash has several advantages. If you keep a supply of cash on hand, you'll never pay ATM fees. Also, cash is psychologically more painful to spend than using credit cards, so you're likely to be more frugal when having to part with paper.</p> <p>I get even more benefit from carrying cash by using a <a href="http://www.wisebread.com/a-comprehensive-guide-to-the-envelope-system">money envelope system</a> to control spending. In my household, we pay for all food expenses using cash from our envelope, so if I have cash in my wallet, I know I can buy food and still be within budget.</p> <h2>2. Coupons</h2> <p>You can save a lot of money with coupons, but you need to have them with you when you are buying something. I put the best coupons for my favorite stores in my wallet. That way, I am always prepared to take advantage of savings.</p> <h2>3. Store Loyalty Cards</h2> <p>Some grocery stores offer cash discounts and points toward free items if you swipe your loyalty card at checkout. On a recent shopping trip, I was able to get a couple bags of food items for free by cashing in my points. The people in line behind me were amazed!</p> <h2>4. Credit Cards With Rewards and Discounts</h2> <p>If you pay off your credit card balance every month, you might as well take advantage of the rewards. I get <a href="http://www.wisebread.com/the-best-store-credit-card-target-redcard">5% off every purchase</a> at some of my favorite stores. I use the rewards points I get from other purchases to score free items on Amazon. The credit card companies are betting that you will carry a balance and end up generating profit for them. Pay off your balance every month, and you'll get the rewards for free. (See also: <a href="http://www.wisebread.com/5-best-cash-back-credit-cards?ref=seealso">Best Cash Back Rewards Credit Cards</a>)</p> <p>Another reason to carry at least one credit card is to handle emergency situations. If your vehicle breaks down, you may need to pay for towing and repairs at the shop. If you have a medical emergency, you may need to pay at the time of treatment.</p> <h2>5. Health Savings Account Card</h2> <p>I signed up for a program that allows me to contribute on a pre-tax basis to a health savings account (HSA). With the health savings credit card I carry in my wallet, I can use pre-tax dollars to pay for prescription medicine and cover the co-pay for medical services. I save about 35% every time I use my HSA card since I am using money that was not subject to taxes.</p> <p>Your employer may offer an HSA program, but if not, you can start your own account at your bank or credit union and take advantage of big savings on healthcare expenses.</p> <h2>6. Consignment Store Account Numbers</h2> <p>I carry my consignment store account numbers in my wallet to make it as easy as possible to drop things off. You'll also need your account number to pick up your money after your items sell.</p> <h2>7. Insurance Cards</h2> <p>I carry cards in my wallet for medical insurance, prescription medicine insurance, and auto insurance. Make it as easy as possible to quickly access your coverage information.</p> <p><em>What do you carry in your wallet to help you save money?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dr-penny-pincher">Dr Penny Pincher</a> of <a href="http://www.wisebread.com/the-7-things-every-frugal-person-should-have-in-their-wallet">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-old-school-tools-to-help-you-stay-on-budget">6 Old School Tools to Help You Stay on Budget</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/everything-you-need-to-know-about-switching-to-the-cash-only-lifestyle">Everything You Need to Know About Switching to the Cash Only Lifestyle</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-money-goals-all-30-somethings-should-have">10 Money Goals All 30-Somethings Should Have</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/save-100s-next-month-with-these-10-grocery-shopping-tips">Save $100s Next Month With These 10 Grocery Shopping Tips</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/these-5-apps-will-help-you-finally-organize-your-money">These 5 Apps Will Help You Finally Organize Your Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Organization carrying a wallet cash coupons Envelope system HSA insurance Mon, 11 Jan 2016 10:00:03 +0000 Dr Penny Pincher 1634857 at http://www.wisebread.com 4 Phone Calls That Will Save You Big Every Month http://www.wisebread.com/4-phone-calls-that-will-save-you-big-every-month <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-phone-calls-that-will-save-you-big-every-month" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_phone_call_000062926794.jpg" alt="Woman making phone calls that will save her big" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you want to save money, you should call your credit card company, mortgage lender, insurance agent, or cable provider. Ask for everything from a lower interest rate to a less costly cable subscription.</p> <p>Unfortunately, too many consumers simply accept their current rates, fees, and plans when a simple phone call might save them hundreds of dollars a year, says Beverly Harzog, an Atlanta-based credit card expert and author.</p> <p>&quot;If you have a good credit history, if you've always paid your bills on time, you are considered a valuable customer,&quot; Harzog says. &quot;If you call your credit card company and ask for a lower rate, you might get it. The card companies don't want to lose good customers.&quot;</p> <p>Here are four service providers that you should call today.</p> <h2>1. Your Cable Company</h2> <p>Cable companies are under increasing pressure from competing services. A growing number of consumers are turning to streaming services such as Netflix or Hulu. But at the same time, monthly cable bills have been inching ever higher. The Leichtman Research Group reported last year that the average U.S. monthly cable bill has rose 39% since 2010 and now stands at $99.10.</p> <p>You don't have to pay that much. Try calling your cable company today and asking for a lower monthly rate. Make sure that you come armed for success: It helps if you've been given a better offer from a competitor. You can then share that offer and hope that your current company either matches or betters it.</p> <p>You also need to be serious about walking away from your cable provider. If you are considering making the move to 100% streaming, and are willing to cut the cord, your provider might make an offer tempting enough to retain you as a customer.</p> <h2>2. Your Mortgage Lender</h2> <p>Most financial experts expect mortgage interest rates to rise throughout 2016. But as of early December 2015, these rates were still at historic lows. According to Freddie Mac's Primary Mortgage Market Survey, the <a href="http://www.freddiemac.com/pmms/">average interest rate on a 30-year fixed-rate mortgage</a> stood at 4.01% as of Dec. 31. The average interest rate on a 15-year fixed-rate loan was 3.24%.</p> <p>If you haven't refinanced, it might be time to do so. Call a mortgage lender today &mdash; it doesn't have to be the one that is currently servicing your loan &mdash; and ask whether you qualify for a refinance.</p> <p>The savings could be big. If you are paying off a 30-year fixed-rate mortgage of $200,000 at an interest rate of 5%, you're paying about $1,073 a month in principal and interest, not including insurance and property taxes. Say you've paid off $20,000 on that loan. If you refinance the remaining $180,000 into a 30-year fixed-rate mortgage with an interest rate of 3.95%, you'll pay about $854 a month &mdash; again, not including taxes and insurance.</p> <p>That's a savings of about $219 a month, or $2,628 a year. Just remember that refinancing isn't free. You can pay thousands of dollars in closing costs, so make sure that your monthly savings allow you to repay those costs quickly.</p> <h2>3. Your Credit Card Company</h2> <p>Bankrate reported that the average interest rate on cash back credit cards was 15.30% in late December. If you owe too much, your credit card balance could grow significantly each month until you pay down that debt.</p> <p>A lower interest rate could help. Fortunately, many credit card providers are willing to drop your rate. It helps if you've been a good customer. If you frequently pay your credit card bill late, the odds are high that your provider won't grant your request for a lower rate. But if you have a history of paying your bill on time and you've been a customer for more than a year, your credit card company might be willing to lower your interest rate to keep you.</p> <p>As with your cable provider, you might have more success if you've received a better offer from another card. If you tell your provider that you're considering moving your balance to another card, it's more likely that you'll get an offer for a lower interest rate. (See also: <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards?ref=seealso">Best 0% Balance Transfer Credit Cards</a>)</p> <h2>4. Your Insurance Companies</h2> <p>You probably pay a lot each month for homeowners, life, health, and auto insurance.</p> <p>Insure.com reported that the average annual cost of a full-service auto policy in 2015 stood at $1,311. ValuePenguin says that the annual cost of a 20-year term life insurance policy worth $250,000 was about $300 for a 25-year-old who doesn't smoke, and about $1,175 for a 40-year-old who does smoke.</p> <p>You can lower your insurance bills depending on changes in your life. Say you've lost 50 pounds or given up smoking. Your life insurance provider might be willing to lower your monthly bill. Maybe you haven't had a speeding ticket or a car accident in five years. Call your auto insurance provider, you might qualify for a good-driver discount. If you've installed a new home security system, call the company that provides your homeowners insurance. You might qualify for a monthly discount.</p> <p>You'll never know if you don't call.</p> <p><em>Have you called these &mdash; or any other &mdash; service providers and asked for a discount? How much did you save?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/4-phone-calls-that-will-save-you-big-every-month">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-check-if-your-mortgage-statement-is-correct">How to check if your mortgage statement is correct</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-mistakes-you-need-to-stop-making-by-30">5 Financial Mistakes You Need to Stop Making by 30</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-financial-mistakes-to-stop-making-by-age-40">6 Financial Mistakes to Stop Making by Age 40</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/use-the-8020-rule-to-maximize-your-financial-opportunities">Use the 80/20 Rule to Maximize Your Financial Opportunities</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/financial-lessons-from-its-a-wonderful-life">Financial Lessons From &quot;It&#039;s A Wonderful Life&quot;</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance better rates cable company insurance mortgage phone calls Wed, 06 Jan 2016 12:00:03 +0000 Dan Rafter 1632872 at http://www.wisebread.com 9 Unexpected Expenses for Retirees — And How to Manage Them http://www.wisebread.com/9-unexpected-expenses-for-retirees-and-how-to-manage-them <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-unexpected-expenses-for-retirees-and-how-to-manage-them" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/grandparents_with_grandchild_000017586301.jpg" alt="Retiree couple learning how to manage unexpected expenses" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>So you've made the decision to retire. Congratulations! All that hard work and saving has paid off, and now you're ready to relax.</p> <p>If you've worked all your life and were diligent about saving, you may have most of your life expenses covered and funds saved for long-term care as you get older. And for the most part, retirees find that their overall expenses decline as they age. But there still could be unexpected costs that you haven't taken into account.</p> <p>Here are nine things that might hit your wallet harder now that you're retired:</p> <h2>1. Health Insurance</h2> <p>Yes, you may be getting Medicare, but that doesn't cover everything. Many retirees find that to get proper coverage, they will need to pay for a Medicare supplement. And even if you are covered under Medicare Part B, you may have to pay co-payments and deductibles. Older citizens should budget for additional <a href="http://www.wisebread.com/avoid-these-5-costly-health-insurance-mistakes">healthcare costs</a>, even if they believe they are fully covered.</p> <h2>2. Childcare</h2> <p>You thought you were done with childrearing? Think again. According to the Census bureau, about <a href="https://www.census.gov/prod/2013pubs/p70-135.pdf">23% of preschoolers</a> are cared for at least part time by a grandparent. Now that you're retired, you are more available to help with occasional babysitting or even full-time childcare for the grandkids. You're doing it out of love, but you may incur expenses ranging from extra food, kids' clothes, furniture, and kids' activities.</p> <p>If you're worried about the costs, be honest with the children's parents about how much you're spending and ask that they contribute. If the kids have certain favorite foods they like to eat at your house, buy those items in bulk. (My grandmother used to have a seemingly unlimited supply of chicken noodle soup for when I came over.) And don't be afraid to have the kids play with older and used toys, because there's a good chance they won't know the difference.</p> <h2>3. Utilities</h2> <p>When you went to work, there was no need to keep the AC or the furnace going during the day. But now that you're home, you may be adjusting that thermostat to make things more comfortable. (And this is exacerbated by the fact that older people are generally more sensitive to cold.) Plus, you may watch TV, use the computer, and run the appliances more often. All of this can add up to higher utility bills. Consider keeping the house at a slightly warmer temperature in the summer and slightly cooler in winter. You'll get used to it. Also, make the switch to LED light bulbs, and look into finding the most energy-efficient appliances you can buy.</p> <h2>4. Car Insurance</h2> <p>Auto insurance rates generally decline between the ages of 25 and 65, but they increase after that. That's because insurance companies view older drivers as a bigger risk, due to impaired vision, other physical problems, or decline in cognitive function. For older drivers, it pays to shop around for the best rates and even take a driving refresher course to prove you're still good behind the wheel.</p> <h2>5. Car Maintenance and Gas</h2> <p>When you were working, maybe you had a short commute or simply walked to the train station. Now, you're home all day and running to see friends, take care of grandkids, or volunteer. You would be surprised how much more you drive in retired life.</p> <p>To keep these costs in check, buy a small vehicle that suits your needs or even consider an electric or hybrid car. And when you do drive, plan your errands and trips strategically to cut down on excess mileage. Many retirees are also moving back into cities, where they can get around without a car at all. But be careful; moving to the city can be expensive. Speaking of...</p> <h2>6. Urban Living</h2> <p>The Washington Post reported that between 2000 and 2010, more than a million baby boomers moved to within five miles of a city center. Empty nesters no longer have to concern themselves with yard size, school districts, or other factors that keep them in the suburbs. But city living can be expensive. Housing costs more, and there's a temptation to spend money when you're surrounded by great restaurants, theatres, museums, and shopping. You might offset some of this expense with reduced transportation costs, but it you still may want to monitor your spending.</p> <h2>7. Charitable Giving</h2> <p>Older people tend to be very generous, and use some of their retirement savings to give back to causes that they've always wanted to support. According to Morningstar, charitable giving rates are relatively small and steady up until age 60. After that, giving comprises an increasing percentage of a person's annual expenses &mdash; up to 20% for America's oldest citizens. It's great to give, but be sure you can still cover your day-to-day costs and have enough saved for a long life. Consider donating shares of stock instead of cash, as you can avoid capital gains taxes and won't dip into your everyday savings.</p> <h2>8. Lawn Care and Landscaping</h2> <p>You always liked mowing your own lawn and doing your own yard work, but as you've gotten a little older, keeping up with the property isn't as easy as it once once. There's no shame in hiring someone to cut the grass or do some landscaping, but that work isn't free. Getting your lawn mowed might cost you $35&ndash;$40 each time, resulting in hundreds of dollars each month. To save money, do as much yard maintenance as you can on your own as long as you feel you are able. When you need help, seek out a neighbor or grandkid who might do it for free or cheap. (Heck, mowing my grandfather's lawn was the first paid gig I ever had.)</p> <h2>9. More Expensive Travel</h2> <p>You saved all your life to finally take a few big trips in retirement. And that's great, but be sure to take into account some extra expenses you might incur as an older citizen. For one thing, travel insurance is more expensive for older folks, because they are statistically more likely to cancel trips due to health-related problems. And even if you do go on a trip, you may find yourself paying extra for transportation or luggage handling when you may have previously taken care of things yourself. Be sure to factor in these extra costs when booking your next adventure.</p> <p><em>How is retirement costing you more than you expected?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/9-unexpected-expenses-for-retirees-and-how-to-manage-them">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-much-can-you-afford-to-spend-in-retirement">How Much Can You Afford to Spend in Retirement?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-retirement-products-that-arent-worth-your-money">6 Retirement Products That Aren&#039;t Worth Your Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-know-what-annuities-are-you-might-be-missing-out">Don&#039;t Know What Annuities Are? You Might Be Missing Out</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-reasons-why-your-retirement-cost-calculations-may-be-wrong">8 Reasons Why Your Retirement Cost Calculations May Be Wrong</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-despair-over-small-retirement-savings">Don&#039;t Despair Over Small Retirement Savings</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement child care elder care expenses insurance older americans seniors Mon, 30 Nov 2015 14:00:25 +0000 Tim Lemke 1616759 at http://www.wisebread.com 7 Employer Benefits That Can Leave More Spending Money in Your Pockets http://www.wisebread.com/7-employer-benefits-that-can-leave-more-spending-money-in-your-pockets <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-employer-benefits-that-can-leave-more-spending-money-in-your-pockets" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_gazing_piggy_bank_000013170716.jpg" alt="Woman learning of employer benefits that provide spending money" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Looking for a new job? Don't go by salary alone. Look at all the perks that your potential new employer offers.</p> <p>The Society for Human Resource Management reported that 35% of U.S. companies increased the amount of benefits they offered employees in 2015. Some of these companies began offering more vacations or even free health insurance for their workers' cats and dogs.</p> <p>Here is a look at seven of these more unusual employee benefits that could leave you with a fatter wallet each year.</p> <h2>1. Tuition Assistance</h2> <p>The Society for Human Resource Management found that 52% of companies in 2015 offered some form of tuition assistance for employees seeking a graduate degree. This is a valuable perk. Peterson's, a Web portal offering information for current and potential college students, reported in 2015 that the average cost for a master's degree was $30,000 at public universities and $40,000 at private universities. FinAid.org says that the average annual cost for a graduate degree &mdash; depending on what type of degree you are seeking &mdash; ranges from $30,000 to $120,000.</p> <h2>2. Transit Subsidy</h2> <p>The Society for Human Resource Management reported that 13% of companies in 2015 offered transit subsidies to help cover the costs their employees pay to get to and from work. Again, this benefit can add up: In June of 2015, Citi's ThankYou Premier Commuter Index found that workers spent an average of $2,600 to get to and from their jobs.</p> <h2>3. Health Club Memberships</h2> <p>Employers want their workers to remain healthy. Employees who aren't sick can complete more reports, close more sales, and build more widgets. It's not surprising, then, that many offer either full or discounted memberships to local gyms or health clubs. If your employer offers this perk, take advantage of it. IBISWorld reported that in 2014 the average member of a gym paid $41 a month in membership fees. This means that a free membership to your area gym could save you about $490 a year in fees.</p> <h2>4. Vacation Spending Money</h2> <p>A 2014 Forbes story highlighted the vacation spending money that Moz, an SEO and marketing company, was providing to its employees. According to the story, <a href="http://www.forbes.com/sites/kateharrison/2014/02/19/the-most-popular-employee-perks-of-2014/">Moz offered employees $3,000</a> in vacation reimbursement to help cover the costs of their food, lodging, entertainment, and transportation while they vacationed across the globe. This might seem excessive, but some employers worry that their workers aren't taking enough of their vacation days. A vacation voucher might encourage some to unplug from the working world for a week or two, allowing them to return to the office recharged.</p> <h2>5. Pet Health Insurance</h2> <p>Pets can rack up some big medical bills. And insuring pets can be costly. Bloomberg Business cited numbers from the American Pet Health Insurance Association showing that in 2013 it cost an average of $457 a year in annual premiums to <a href="http://www.bloomberg.com/news/articles/2015-02-17/the-rising-costs-of-health-care-for-cats-and-dogs">insure a dog</a> and $290 for a cat. The good news? The Society for Human Resource Management reported that in 2015, 9% of employers offered employees access to free or discounted pet health insurance.</p> <h2>6. House Cleaning Services</h2> <p>Too tired after a long day at work to clean your house? You're not alone. It's why so many people hire professional house cleaning services. These services aren't cheap. Angie's List in 2014 reported that its members paid an average of $100 to $150 every two weeks for a professional house cleaning. In 2015, Payscale.com cited one example of this cash-saving benefit: Tech company Evernote provides its employees with <a href="http://www.payscale.com/career-news/2015/08/incredible-company-perks-top-5-swag-and-service-based-perks">free house-cleaning services</a> two times a month.</p> <h2>7. Free Netflix</h2> <p>Love streaming movies at home? Then maybe you can find an employer that offers free <a href="http://www.wisebread.com/8-alternatives-to-cable-tv-that-will-keep-you-entertained">subscriptions to Netflix</a>. That 2014 Forbes story on unique company benefits said that some employers <a href="http://www.forbes.com/sites/kateharrison/2014/02/19/the-most-popular-employee-perks-of-2014/">offer free subscriptions to Netflix</a> and other streaming services &mdash; in addition to free magazine and newspaper subscriptions. Netflix is now charging new members $8.99 a month. These means that if your employer gives you free access to the streaming service, you'll instantly nab $107.88 a year in extra spending money.</p> <p><em>Does your employer offer any cash-y benefits?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/7-employer-benefits-that-can-leave-more-spending-money-in-your-pockets">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-great-retirement-jobs">6 Great Retirement Jobs</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-smart-way-to-budget-on-a-freelance-income">The Smart Way to Budget on a Freelance Income</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-make-400-a-week-as-a-pet-sitter">How to Make $400+ a Week as a Pet Sitter</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-make-the-most-of-your-morning-commute">6 Ways to Make the Most of Your Morning Commute</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/make-your-hobby-pay-its-way">Make Your Hobby Pay Its Way</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Career and Income Extra Income employer benefits extra money health benefits insurance job perks Wed, 21 Oct 2015 17:18:53 +0000 Dan Rafter 1593840 at http://www.wisebread.com 5 Financial Mistakes You Need to Stop Making by 30 http://www.wisebread.com/5-financial-mistakes-you-need-to-stop-making-by-30 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-financial-mistakes-you-need-to-stop-making-by-30" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_thinking_about_money_000059288760.jpg" alt="Man learning about financial mistakes to stop making by 30" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Managing money is tricky, especially when you're in your 20s and just starting your adult life. Between low starting pay, student loan debt, and the pressure to keep up with your friends materially, your finances are usually anything but perfect.</p> <p>As you learn the financial ropes, it's only natural that you'll make some mistakes along the way. I certainly did &mdash; because nobody's perfect, and our 20s are a time of self-discovery where we learn the dos and don'ts of money management. Alas, while you can get away with a few financial screw ups as a young adult, your 30s are the time to get serious about your money. You can no longer afford rookie mistakes.</p> <p>To help you advance to the big league, here's a look at five <a href="http://www.wisebread.com/4-financial-mistakes-that-limit-your-freedom">financial mistakes</a> to stop making by age 30.</p> <h2>1. Not Getting Serious About Budgeting</h2> <p>As a 20-something adult, you might live at home with your parents or share household expenses with a roommate. As a result, maybe you're able to spend money frivolously and you don't have to pinch pennies. If you get into any financial messiness, you can easily dig yourself out of a hole, leaving you feeling like a budget is unnecessary. Except there's one little problem: You'll eventually be on your own.</p> <p>By age 30, it's time to put impulse buying and bad habits behind you and get serious about managing your money. A budget is one of the best ways to maintain control of your finances. You're able to assess exactly where your money goes, and allocating a certain amount for different spending categories reduces the risk of overspending and ensures there's enough cash for other financial goals (building an emergency fund, saving up to buy a house, paying off debt, etc). You're an adult now, and you need to treat your money like one.</p> <h2>2. Using a Credit Card to Satisfy Your Wants</h2> <p>It's smart to apply for a credit card in your 20s. A credit card jumpstarts your credit history and provides access to funds during an emergency. Unfortunately, some 20-something adults rely too much on credit and accumulate massive debt. (You're not alone; I did it too.) But by the time you hit 30, it's time to give credit cards a rest and live mostly on cash.</p> <p>Using a credit card to satisfy your wants doesn't end well. The more debt you have, the harder it becomes to save for the future, and high minimum payments make it difficult to afford basic living expenses, like a mortgage or utilities. In your 30s, a credit card should be the exception, not the rule. If you use credit, make sure you're paying off the balance every month.</p> <h2>3. Ignoring Your Retirement Savings</h2> <p>Thinking back to my 20s, saving for retirement was the last thing on my mind. Maybe you feel the same way. In your 30s, you can't afford to put off saving for the future. For every year you delay saving for retirement, that might be an extra year you have to work later in life &mdash; and who the heck wants to do that? Talk to your employer about joining the company's 401(k) plan, and consider diversifying your retirement savings with an individual retirement account.</p> <h2>4. Relying Too Much on Your Parents for Support</h2> <p>I know from experience that making it on your own as a 20-something adult can be brutal. Entry-level salaries don't always keep up with the cost of living, and making ends meet might require some financial assistance from your parents. There's no shame in asking for help, but once you're in your 30s, you need to stand on your own two feet.</p> <p>This doesn't mean you'll never need financial help again, but instead of running to your parents every time you hit a financial roadblock, attempt to solve the problem yourself. What would you do if your parents weren't in a position to help? You could possibly sell items you don't need, ask your employer for overtime work, or downsize if you're living above your means.</p> <h2>5. Skipping Health Insurance and Other Insurance Needs</h2> <p>Some 20-something adults remain on a parent's health insurance plan until age 26. But once they're on their own, some feel they don't need insurance because they're healthy and only visit a doctor once a year for a physical, which is free under the Affordable Care Act. But just because you're healthy today doesn't mean you'll be healthy tomorrow. The older you get, the more likely you'll develop health problems, and it only takes one trip to the emergency room to wipe out your savings account. Even if you can't afford the best health insurance plan, some coverage is better than none.</p> <p>You also need to stop ignoring other insurance needs, such as disability insurance in the event you're unable to work for more than two weeks due to an injury or illness, and renter's insurance, which covers the replacement cost of your belongings in the event of fire, theft, or other damage to the property. Life often throws us curveballs when we're least expecting, so it's best to be as prepared as possible.</p> <p><em>Do you have other financial mistakes to add that we should stop making by age 30? Let me know in the comments below.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/5-financial-mistakes-you-need-to-stop-making-by-30">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-9"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-money-goals-all-30-somethings-should-have">10 Money Goals All 30-Somethings Should Have</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-6-biggest-financial-decisions-in-your-20s">The 6 Biggest Financial Decisions in Your 20s</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-best-free-financial-learning-tools">9 Best Free Financial Learning Tools</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/make-these-7-money-moves-now-or-youll-regret-it-in-20-years">Make These 7 Money Moves Now Or You&#039;ll Regret It in 20 Years</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-financial-moves-you-will-always-regret">9 Financial Moves You Will Always Regret</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance 30s budgeting habits insurance millennials money moves retirement Mon, 03 Aug 2015 13:00:09 +0000 Mikey Rox 1507542 at http://www.wisebread.com 5 Important Questions to Ask Before Adding to Your Family http://www.wisebread.com/5-important-questions-to-ask-before-adding-to-your-family <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-important-questions-to-ask-before-adding-to-your-family" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/new_baby_000022503773.jpg" alt="Couple asking important questions before starting a family" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>&quot;Can we even afford one?&quot;</p> <p>This question was the first my husband and I asked ourselves when we had the big baby discussion. Romantic, right? But in reality, finances play an important role in moving from a two-person household to three (or more). So, while a lot of the baby-making process is fun and games, here are some items to consider and situations to plan for before making that jump into parenthood.</p> <h2>1. What Is Your Budget?</h2> <p>Before anything else, we took time to write out our budget in full. After every single last fixed and variable expense was accounted for, we compared that number to our take-home income. You'll find a wide range of figures for how much a <a href="http://www.parenting.com/article/the-cost-of-raising-a-baby">child costs per year</a> ranging from &quot;only your time and love&quot; to $12,000 or more, depending on a number of factors (location, lifestyle, etc.). When we saw what was left over, we got a good idea that adding a child would be doable. We also found areas of our budget that had room to change and free up money for diapers, food, baby gear, and much more. (See also: <a href="http://www.wisebread.com/10-things-you-dont-actually-need-to-buy-for-your-new-baby-plus-5-you-must?ref=seealso">10 Things You Don't Actually Need to Buy For Your New Baby</a>)</p> <h2>2. Who Will Care for the Baby?</h2> <p>Wrapped up in those yearly costs for taking care of your child is daycare. You'll want to take many personal and practical factors into consideration when making the choice. We decided that much of my income would have been sucked up with childcare costs, so I opted to work part-time from home after calculating many scenarios from best to worst case. Some of you might have family willing to help out full or part-time. Others will rely on paid care exclusively.</p> <p>While you're thinking, it's also a good idea to get in touch with your workplace to see how much time off you get after birth, as well as how much of this time is paid versus unpaid. Same goes with your spouse.</p> <h2>3. What Does Insurance Cover?</h2> <p>Health insurance was the next big piece of the pie. How much of my prenatal care would be covered? What about the birth and delivery? And even before all that, what about possible infertility coverage? (We're dealing with this detail the second time around.)</p> <p>We are fortunate to have good insurance that paid for pretty much everything &mdash; ultrasounds (I needed many), blood tests, delivery, and follow-up. Beyond that, you'll be adding a dependent to your coverage, so your monthly premium might go up. Your child will also have well care visits often in the first year. Speak with your HR department or call your insurance company directly to get information on coverage, deductibles, copays, and any other concerns you might have.</p> <h2>4. Do You Have Space?</h2> <p>Take a look around your place. Some of you might be living in three to four bedroom houses. Others, studio apartments. The truth is, you can make most places work with one child using creative solutions from room sharing to compact closet bedrooms. If you don't think you have a good setup or &mdash; alternatively &mdash; would want to move anyway, you'll want to calculate a new rent or mortgage number into your budget to see how it shifts everything.</p> <h2>5. What About Other Stuff?</h2> <p>Beyond baby's first years, the costs can climb. Things like preschool tuition, extracurricular activities, college savings accounts, and even unexpected medical expenses.</p> <p>Our daughter had a medical issue that required major surgery in her second year of life, and no one could have expected or planned for that. Though insurance took care of the heaviest expenses, like a $100,000 hospital bill, we have paid deductibles for countless doctor appointments and follow-ups. (She's doing great now, by the way.) Most situations like these are unusual and likely not to be of concern. At the same time, if your budget or job is shaky, you might want to try and stabilize things before adding another variable to the equation.</p> <p><em>What other questions did you ask before adding to your family?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-marcin">Ashley Marcin</a> of <a href="http://www.wisebread.com/5-important-questions-to-ask-before-adding-to-your-family">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-10"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-unexpected-ways-stay-at-home-parents-save-big">7 Unexpected Ways Stay-at-Home Parents Save Big</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-pitfalls-stay-at-home-parents-should-avoid">5 Financial Pitfalls Stay-at-Home Parents Should Avoid</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-find-a-great-babysitter">How to Find a Great Babysitter</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/does-your-kid-need-an-ira">Does Your Kid Need an IRA?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-unexpected-dog-costs-you-should-prepare-for-now">5 Unexpected Dog Costs You Should Prepare for Now</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Family child care family planning having babies insurance kids Mon, 04 May 2015 15:00:27 +0000 Ashley Marcin 1406710 at http://www.wisebread.com Going Without Health Insurance in 2015? Here's What It'll Cost You http://www.wisebread.com/going-without-health-insurance-in-2015-heres-what-itll-cost-you <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/going-without-health-insurance-in-2015-heres-what-itll-cost-you" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/healthcare-stethoscope-money-Dollarphotoclub_64769213.jpg" alt="stethoscope money" title="stethoscope money" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The ACA. Obamacare. The Affordable Care Act. Whatever you call it, your finances will almost certainly be affected by it, especially if you choose <em>not</em> to be covered by an approved plan in 2015. While many taxpayers are just now starting to feel the pinch of opting out in 2014, the penalties for this year are much stiffer.&nbsp;</p> <p>Here's what you need to know</p> <h2>How Much Are the Fines?</h2> <p>Straight from the <a href="https://www.healthcare.gov/fees-exemptions/fee-for-not-being-covered/">HealthCare.gov website</a>, the penalty or &quot;tax&quot; for 2015 is either:</p> <ul> <li>2% of your yearly household income over the tax filing threshold (usually anything over $10,000 for an individual); or<br /> &nbsp;</li> <li>$235 per adult and $162.50 for each child under 18.</li> </ul> <p>The government wants you to pay the higher of the two amounts, but the maximum for option one can't exceed the &quot;national average premium for a bronze plan.&quot; Just what is that number? For 2014, the average was $204 per person per month or $1020 per month for a family of five or more. The national average for 2015 won't be known until the end of 2015, but the Washington Times states it could&nbsp;<a href="http://www.washingtontimes.com/news/2014/oct/18/obamacare-bronze-plan-premiums-expected-jump-14-20/">increase by as much as 14%</a> in some parts of the country.</p> <p>The maximum for option two can't exceed $975.</p> <h2>How Are the Fines Paid?</h2> <p>Since the healthcare law is enforced strictly through the IRS, it's quite simply a &quot;tax&quot; thing. If you don't make enough to file (under $10,000 in most cases), you wouldn't pay a fine, anyway. If you do file, you'll have a place to indicate your penalty on your return, and that amount will come off your refund (or you'll have to pay in, like any other tax owed). All major tax filing software services have been updated accordingly to help you fill out the right forms and make paying the fine just a part of the tax process.</p> <h2>Can I Get Out of the Fine?</h2> <p>In a word: yes. But it may take some work. People covered by an ACA or another plan that is considered &quot;minimum essential coverage&quot; don't have to pay.</p> <p>Others are exempt from fine if they had coverage for more than nine months of the year, are a member of a federally recognized tribe, have coverage through a health care sharing ministry, or have religious objections to insurance (including Medicare and Social Security). You can also avoid fines if you are in jail during most of the year or aren't in the U.S. lawfully or face certain financial hardships.</p> <h2>What If I Can't Afford Insurance or the Fine?</h2> <p>If the lowest-priced coverage would cost more than 8% of your household income, you can get an exemption. Additional <a href="https://www.healthcare.gov/fees-exemptions/hardship-exemptions/">examples of hardship</a> that may qualify for an exemption include:</p> <p>1. Being homeless;<br /> 2. Eviction or foreclosure;<br /> 3. Facing shut-off from your utility company;<br /> 4. Experiencing domestic violence;<br /> 5. Experience the death of a family member;<br /> 6. Suffering substantial loss due to a fire, flood, or other natural or human-caused disaster;<br /> 7. Filing for bankruptcy;<br /> 8. Being unable to pay medical expenses that resulted in substantial debt;<br /> 9. Experiencing increases in necessary expenses due to caring for an ill, disabled, or aging family member.</p> <p>There are also exemptions that can be granted due to changes in your state's Medicaid and CHIP programs, cancellation of your individual policy, and your difficulty in getting insurance.</p> <p>Note that all of these require you to fill out an application that can take weeks or months to approve. In the meantime, if you fail to get covered and your application is denied, you will still be held liable for any penalties earned during that time. It's is also suggested that you don't wait until the end of 2015 to apply for the exemption if you have proof of hardship now.</p> <h2>Should I Ever Choose to Pay the Fine?</h2> <p>That's really a personal decision, but I will say that there have been instances where you may owe less by simply paying fines. If you are a healthy adult that can get approved for a traditional pre-ACA plan without pre-existing conditions, you may be eligible for a short-term plan. These plans don't offer some of the benefits required by Obamacare, including maternity coverage or certain free preventative services. They are, however, more in line with pre-ACA pricing for premiums, and many have much lower deductibles and premiums than the subsidized plans offered on the exchange. These plans are good for three to 12 months and make you subject to ACA fines, but may still cost less after fines than better plans on the exchange.</p> <p>All of this will change again in 2016, with another increase in fines, so you'll need to stay abreast of developments. With open enrollment ending soon, however, whatever choice you make should be done without delay.</p> <p><em>Will you get insurance or pay the fine this year?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/linsey-knerl">Linsey Knerl</a> of <a href="http://www.wisebread.com/going-without-health-insurance-in-2015-heres-what-itll-cost-you">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/signing-up-for-obamacare-in-2015-heres-whats-new">Signing Up for Obamacare in 2015? Here&#039;s What&#039;s New</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-fall-for-these-common-obamacare-scams">Don&#039;t Fall for These Common Obamacare Scams</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-to-spend-your-last-minute-health-care-fsa-funds">8 Ways to Spend Your Last-Minute Health Care FSA Funds</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-vital-things-to-remember-when-buying-health-insurance">5 Vital Things to Remember When Buying Health Insurance</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-take-advantage-of-obamacare-for-less-financial-risk-and-more-freedom">How to Take Advantage of Obamacare for Less Financial Risk and More Freedom</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Health and Beauty Insurance ACA health care health insurance insurance IRS obamacare taxes Tue, 03 Feb 2015 14:00:07 +0000 Linsey Knerl 1284842 at http://www.wisebread.com How to Survive the 5 Most Common Emergency Situations http://www.wisebread.com/how-to-survive-the-5-most-common-emergency-situations <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-survive-the-5-most-common-emergency-situations" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman-flat-tire-177572755-small.jpg" alt="woman flat tire" title="woman flat tire" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Nuclear fallout, asteroid strikes, and sinkholes are rare. But, yes, emergencies do happen. And while you'd be foolish to spend time preparing for any of <em>those</em> three disasters, it's smart and doubly worthwhile to prep for some of the more common ones. (See also: <a href="http://www.wisebread.com/5-emergency-situations-you-must-prepare-for-and-5-you-can-ignore?ref=seealso">5 Emergency Situations You Must Prepare For</a>)</p> <p>Read on for our round-up of likely red alert scenarios, complete with tips on how to prevent and get out of them.</p> <h2>1. A Bad Case of Frostbite</h2> <p>If you spend time at high altitudes or in sub-zero climes, chances are you've flirted with frostbite. A mild case can mean your skin becomes partially frozen &mdash; and when it warms back up it's going to hurt like heck. But a bad case of <a href="http://www.ncemi.org/cse/cse1104.htm">frostbite can lead to severe blistering</a>, permanent cold sensitivity, and long-term loss of feeling. Not to mention it's a warning sign of life-threatening hypothermia.</p> <p>So if you think you've been exposed to frostbite of this magnitude &mdash; or if you're at all uncertain &mdash; it's important to remove yourself from the elements as quickly as possible and seek professional emergency medical treatment. As you make your way to the medics, keep in mind two important don'ts. Never use friction to warm body parts that have been exposed to frostbite, for this can further damage the tissue. And never rewarm frostbitten skin while you're still out in the elements &mdash; you'll run the risk of refreezing and doubly damaging your skin.</p> <h2>2. Flat Tires And Blowouts</h2> <p>Prior to 2007 when tire pressure monitoring systems were installed in all vehicles, the National Highway Traffic Safety Administration estimated flat tires and blowouts as the cause of 414 fatalities, 10,275 non-fatal injuries, and 78,392 crashes on American roads annually. Tire pressure monitoring systems have made us safer, but <a href="http://www-nrd.nhtsa.dot.gov/Pubs/811617.pdf">tire troubles are still one of the most common problems faced by drivers</a>. That's because the tires are the only part of the car that are in constant contact with the road, making them extremely vulnerable.</p> <p>The best way to prevent a faulty tire situation is to check your air pressure regularly, rotate your tires every time you change the oil, and keep an eye on the treads, making sure to replace any tires that appear worn out. And <a href="http://www.procarcare.com/icarumba/resourcecenter/encyclopedia/icar_resourcecenter_encyclopedia_emergency2.asp#blowouts">if you do hear a tire pop</a> or experience a sudden lack of control in steering while whizzing down the highway, follow these steps: Get a firm grip on the wheel and slowly apply the brakes (sudden braking can propel your car into a spin-out), pull over to the side of the road, and activate your flashers. Once you're safely stopped out of the way of traffic, change the tire yourself or call for help.</p> <h2>3. A Severe Storm Threat</h2> <p>Be it a hurricane, blizzard, or wildfire, Mother Nature can wreak havoc on our lives. Where you live will help determine what kind of storm event you ought to prepare for, but nonetheless most disaster kits contain many of the same key ingredients. These kits should be assembled well in advance of an emergency, and they should contain <a href="http://www.ready.gov/build-a-kit">everything you need to survive for 72 hours</a>.</p> <p>Some of those items include nonperishable food for you and your pets, bottled water, a sleeping bag or warm blanket for everyone in your household, prescription medications, first aid supplies, matches, a flashlight with extra batteries, and a whistle to signal for help. Be sure to keep your kit in a secure location &mdash; and be sure that everyone in the house knows where it is. (See also: <a href="http://www.wisebread.com/10-safest-cities-in-america-from-natural-disasters?ref=seealso">Safest Cities in America From Natural Disasters</a>)</p> <h2>4. Getting The Pink Slip</h2> <p><a href="http://www.gallup.com/poll/168563/job-loss-quickly-lead-hardship.aspx">Four in 10 Americans would feel financial hardship</a> a month from now if they were to lose their job today. Gallup's 2014 Economy and Personal Finance Poll also found that 23% of Americans earning $50,000 or less said they are very or fairly likely to lose their job in the near future. For Americans earning more than $50,000, it's 12%.</p> <p>&quot;With long-term unemployment a serious problem in recent years, many U.S. workers are not in a position financially to go a month, or even a week, without finding a new job if laid off,&quot; the Gallup poll concludes. &quot;That underscores the economic hardship that unemployment of any length can bring on U.S. families, particularly for younger and lower-income workers.&quot;</p> <p>One of the top reasons so many Americans fall into a financial black hole when they lose employment is that they didn't see it coming. So the best way to prevent yourself from falling into this trap is to prepare for the unexpected by creating an emergency savings fund. Paul Golden, spokesman for the National Endowment for Financial Education, recommends setting aside three to six months of living expenses to <a href="http://money.usnews.com/money/personal-finance/articles/2013/12/26/why-you-need-an-emergency-fund-in-the-new-year">offset any future potential job loss</a>. During a recession, that amount should increase to six to nine months of expenses, Golden says.</p> <h2>5. House Fires</h2> <p>Every year there are <a href="http://www.nfpa.org/research/reports-and-statistics/fires-by-property-type/residential/home-fires">more than 360,000 house fires</a>, killing about 2,500 people and causing more than $7 billion in property damage in the U.S. Cooking equipment is the leading cause of house fires, followed by cigarette smoking and faulty heating equipment. And since two of every five house fires starts in the kitchen, one of the best ways to prevent one in your home is to fire-proof the area around your stove by removing anything flammable (think dish towels, anything made of paper or plastic) within three feet of the burners. It's also important to install and <a href="http://www.redcross.org/prepare/location/home-family/prevent-home-fires">test your home smoke alarm</a> to ensure that it's working properly.</p> <p><em>Are you prepared? For what? Please share in comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/brittany-lyte">Brittany Lyte</a> of <a href="http://www.wisebread.com/how-to-survive-the-5-most-common-emergency-situations">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-11"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-weird-ways-to-keep-you-and-your-stuff-safe">7 Weird Ways to Keep You and Your Stuff Safe</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-6-stages-of-dealing-with-financial-disaster">The 6 Stages of Dealing With Financial Disaster</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/51-uses-for-coca-cola-the-ultimate-list">51 Uses for Coca-Cola – the Ultimate List</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-really-easy-ways-to-unclog-drains">10 Really Easy Ways to Unclog Drains</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/15-wonderful-uses-for-witch-hazel">15 Wonderful Uses for Witch Hazel</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> General Tips disasters emergencies insurance preparation Thu, 20 Nov 2014 12:00:07 +0000 Brittany Lyte 1257139 at http://www.wisebread.com Not Insuring These 6 Things Could Bankrupt You http://www.wisebread.com/not-insuring-these-6-things-could-bankrupt-you <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/not-insuring-these-6-things-could-bankrupt-you" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple-budget-468144843-small.jpg" alt="couple budget" title="couple budget" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Getting ahead financially isn't easy. It requires hard work and persistence. So why risk years or even decades of hard work and sacrifice only to lose everything in one unfortunate, very costly event? (See also: <a href="http://www.wisebread.com/marketing-life-insurance-and-behavioral-psychology?ref=seealso">Marketing, Life Insurance, and Behavioral Psychology</a>)</p> <p>&quot;It won't happen to me,&quot; you say? I felt the same way years ago. But life happens. However unfair it may be, over time we all see some of our friends and family members face difficult challenges or even catastrophes. (I'll include a few examples of my own below.) As much as we hope to avoid them, we just can't predict or control all events. But we can at least hedge some of these risks by insuring against them.</p> <h2>What Should I Insure?</h2> <p>Insurance is for the big things. It's to protect you from major events that would cost you more than you can pay for from your short-term financial reserves. In other words, its purpose is to help shield you from serious and potentially devastating financial setbacks.</p> <h2>What Shouldn't I Insure?</h2> <p>As a rule, then, insurance is not for smaller financial risks or expenses you could absorb and pay for in the short term. This is where we often make a mistake &mdash; purchasing insurance or service contracts for goods and services that cost hundreds of dollars or less.</p> <p>Is that to say that you should never consider taking insurance on a cell phone or a computer printer, for example? Maybe not, but be aware of the cumulative opportunity cost of those expenditures. That money could have been used to help you get ahead financially, by paying off an outstanding debt for example. Also, remember that companies that encourage you to buy their service contracts and warranties often make more profit on the warranties than on the actual product or service being insured.</p> <p>So, what are the big things requiring insurance? And what types of insurance can protect you from being wiped out financially? Here are six that cover most if not all of the bases.</p> <h2>1. Health Insurance</h2> <p>By far, the number one cause of bankruptcy in the United States is unpaid medical bills. A <a href="http://finance.yahoo.com/news/pf_article_109143.html">study done at Harvard University</a> identifies medical expenses as a leading cause of 62% of all personal bankruptcies.</p> <p>Even the shortest of hospital visits now costs thousands of dollars. Just a few months ago one of our sons experienced sudden stomach pains, requiring a trip to the emergency room. After a number of tests (isolating the problem as an intestinal disorder) and some antibiotics he was released four or five hours later. The bill? Over $20,000. Thankfully our insurance covered most of the bill and his subsequent treatments. But it's easy to see how a single serious injury or disease, if not adequately covered by health insurance, could deplete your entire savings.</p> <p>And even if you have health insurance, the ever-rising deductibles (sometimes $5,000 or more) can tip you over a financial cliff if they exhaust your short term funds and force you to delay credit card, vehicle, mortgage, and other payments in an attempt to recover.</p> <h2>2. Life Insurance</h2> <p>This one should be a no-brainer. If you have dependents or any unpaid debts or financial obligations that would need to be paid upon your death (not many people can answer &quot;No&quot; to all of those), then you need life insurance. The question is, how much?</p> <p>There are many ways to estimate how much life insurance you need, but I like the following approach:</p> <ol> <li>Determine your household's current TOTAL annual income needs and SUBTRACT income that's available to your spouse/survivor(s) from other existing sources. This will be their NET annual income need.<br /> &nbsp;</li> <li>Multiply this net annual income need TIMES the estimated number of years your beneficiaries will require it.<br /> &nbsp;</li> <li>ADD your total current outstanding debts.<br /> &nbsp;</li> <li>ADD future unfunded expenses (your funeral expense, children's college, etc)</li> </ol> <p>This total should give you a good initial estimate. For a more complete assessment I suggest Tony Steuer's <a href="http://www.amazon.com/gp/product/0984508104/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0984508104&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=ZNPG3SINGOTXRIYR">Questions and Answers on Life Insurance</a> toolbook .</p> <p>My strong preference is term life insurance, not permanent life policies like whole life or universal that include an investment component. As a rough guide, I purchased a $300,000 supplemental term life policy at age 40 for $300 per year, or $25 per month. That premium amount will not change until my mid-60s.</p> <h2>3. Vehicle Insurance</h2> <p>Auto insurance is required by most states. It's actually a collection of policies that protects you from financial loss in three ways:</p> <ol> <li>Property coverage pays for damage to your car, either from a collision or from vandalism, storm damage, or theft (if you have &quot;comprehensive&quot;).<br /> &nbsp;</li> <li>Liability coverage pays legal expenses to others for injury to them or damage to their property in an accident.<br /> &nbsp;</li> <li>Medical coverage pays for the cost of treating accident injuries, and sometimes for lost wages and funeral expenses.</li> </ol> <p>According to <a href="http://www.quickanddirtytips.com/money-girl">Money Girl podcaster Laura Adams</a>, you ought to have &quot;enough auto insurance to cover the total value of all your assets &mdash; such as your home, vehicles, savings accounts, and non-retirement investments &mdash; [in case you are] involved in a lawsuit.&quot;</p> <h2>4. Homeowners Insurance</h2> <p>Like vehicle insurance, homeowners insurance is required when you have a mortgage. It should cover the replacement value of your home and its contents, and it pays for claims associated with fire and certain natural disasters. A liability portion also covers you if someone gets hurt on your property. (See also: <a href="http://www.wisebread.com/8-surprising-things-covered-by-homeowners-insurance?ref=seealso">8 Surprising Things Covered by Homeowners Insurance</a>)</p> <p>If you rent, and the loss of your personal belongings would cause a financial hardship, then you should consider renter's insurance.</p> <h2>5. Disability Insurance</h2> <p>As a young girl my grandmother excelled in school. She loved to read and looked forward to attending college. Her father was a successful stone mason and the family lived comfortably, so paying for college was within their means. Then a work-related accident left him disabled. He never recovered, and he didn't have disability insurance, so his daughter had to quit high school and get a minimum wage job to help the family make ends meet. Needless to say, my grandmother never attended college, and she never had an opportunity to achieve her dreams.</p> <p>This is why having disability insurance is so important.</p> <ul> <li>Approximately one out of four workers entering the workforce today will become disabled for some period of time before they retire.<br /> &nbsp;</li> <li>More than 90% of disabling accidents and illnesses are not work related, which means they aren't covered by worker's compensation insurance.<br /> &nbsp;</li> <li>Social Security is only available after you've been out of work for a year and are completely disabled.<br /> &nbsp;</li> <li>Disability is the leading cause of about 50% of all mortgage foreclosures.</li> </ul> <p>Most employers provide short-term disability insurance to non-contract workers, but they are less likely to offer long-term disability coverage, or if they do it's often less than you need. So look into supplemental disability insurance to make sure your family's needs are covered.</p> <h2>6. General Liability Insurance</h2> <p>Sometimes referred to as umbrella insurance, this is a &quot;miscellaneous&quot; policy. It covers amounts in excess of maximums in other policies, and it provides primary insurance for losses that aren't covered by other policies. Take personal injury lawsuits. However frivolous the claim, defending against a lawsuit can cost thousands. For example, my stepfather works for his local township and he spent over $40,000 clearing himself of an unfounded charge against him by a citizen of the town.</p> <p>Also, have you noticed that insurance companies are narrowing the scope of what they cover in their traditional insurance policies? That same stepfather had storm insurance to cover his primary residence but didn't learn until after last year's Hurricane Sandy that the insurance company wouldn't cover $20,000 in damages to the garage on the same property.</p> <p>Our household has a $1 million umbrella policy that costs about $50 per month. It gives us peace of mind.</p> <h2>Protect What You've Worked Hard For</h2> <p>Joni Mitchell wrote: &quot;Don't it always seem to go that you don't know what you've got till it's gone.&quot; I think that sums it up nicely. It's hard for us to appreciate the consequences of a serious accident or unforeseen event until after it occurs.</p> <p>But bad things do happen &mdash; we see it all around us. So do what doesn't come naturally: protect yourself against your big risks before they happen. Take stock now of your insurance needs and make sure you're covered.</p> <p><em>Have you covered your big risks? How many of these insurance policies do you have? Can you think of any others?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/keith-whelan">Keith Whelan</a> of <a href="http://www.wisebread.com/not-insuring-these-6-things-could-bankrupt-you">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-12"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/going-without-health-insurance-in-2015-heres-what-itll-cost-you">Going Without Health Insurance in 2015? Here&#039;s What It&#039;ll Cost You</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-fall-for-these-common-obamacare-scams">Don&#039;t Fall for These Common Obamacare Scams</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/generic-drug-price-lists-for-six-major-pharmacies">Generic Drug Price Lists For Six Major Pharmacies - Updated</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-reasons-why-life-insurance-isnt-just-for-old-people">5 Reasons Why Life Insurance Isn&#039;t Just for Old People</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-to-spend-your-last-minute-health-care-fsa-funds">8 Ways to Spend Your Last-Minute Health Care FSA Funds</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Insurance bankruptcy health insurance insurance life insurance Fri, 22 Aug 2014 13:00:02 +0000 Keith Whelan 1190088 at http://www.wisebread.com