Money Management

Paying bills is viewed negatively, but they aren’t always a bad thing. Learn why I’m happy to pay for my housing costs and medical care for my elderly dog. [[{“value”:”

Most people don’t think of paying bills as something that’s very fun to do. After all, money coming out of your checking account to send off to necessities means you have less cash left over for fun stuff.

But while there are some bills I don’t love paying (like taxes), there are others that make me really happy, as odd as that sounds. Here are two bills I’m really delighted to pay each month because of the huge benefits the money brings to my life.

1. My monthly mortgage payment

My monthly mortgage payment is one of the bills I’m most glad to pay. I’m happy to spend the money because it means I have my beautiful house that I love, where I’ve set down roots and where my kids are making memories.

I also know that the money I’m sending off is helping me build home equity, which will increase my wealth over time. According to findings from the National Association of Realtors, homeowners have 40 times the wealth of renters. While some of that is because people who are more financially stable in the first place are more likely to buy a house, owning a property may help you build wealth. Your mortgage payment serves as a kind of forced savings and your house will (ideally) go up in value over time.

I’ve also made sure to keep my mortgage payment below 30% of my income, so it doesn’t cause me financial stress. If you’re thinking about buying a house of your own, make sure you stick to this limit, too. Consider practicing making a mortgage payment by putting aside any extra money in savings that your mortgage costs above and beyond your current housing expenses.

If you make certain your loan is affordable, you can also hopefully be happy and grateful each month when you pay your mortgage, since you can easily cover the costs and you get your own home in exchange for your cash.

2. Vet bills for my elderly dog

I’m also extremely happy to pay vet costs for my elderly dog. While I do wish I’d bought a pet insurance policy when she was younger so I wouldn’t have to pay for everything out of pocket, I’m still delighted when I get to give her vet money every few months. Paying her vet bills means she’s still here with me, enjoying life at 17. I’m hoping for many more years of paying these bills!

Now, one of the reasons I’m so happy to cover these costs is because I have a dedicated savings account earmarked for her care. If I had to borrow or worry about whether I could afford her bills, I would be a lot less pleased.

So, if you have a pet, be sure you consider pet insurance and also think about putting aside a set amount of money each month for their care, since pet insurance doesn’t cover everything. Ideally, your pet will live a long and healthy life and you’ll have the money to maximize the chances of that happening.

The bottom line is, bills do not have to be a bad thing for your personal finances — they can buy you important stuff that you value more than money. But even these good expenses could be stressful if you aren’t prepared for them. So before you take on any obligations — like getting a pet or buying a home or committing to a big vacation — be sure you have worked it into your budget and can comfortably afford the bills.

If you do that, you might also be happy when you make those payments each month!

Alert: our top-rated cash back card now has 0% intro APR until 2025

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

“}]] Read More 

When buying auto insurance, it’s important not to set the policy limits too low. Learn about this and other big errors it’s crucial to avoid. [[{“value”:”

Buying auto insurance isn’t really a fun purchase like shopping for shoes or a new video game system. But it is one of the most important purchases any person can make, because getting the right coverage provides crucial protection for assets. Without the proper insurance in place, an accident or other incident could leave drivers with an empty bank account.

Unfortunately, many people make big mistakes when getting covered. In fact, here are four huge errors it’s critical to avoid when buying auto insurance.

1. Setting the policy limits too low

Every auto insurance policy has a maximum coverage limit. For example, an insurance policy may cap payments for injuries caused to others at $20,000 per person and $40,000 per accident, or at $50,000 per person and $100,000 per accident.

Drivers get to choose how high their coverage limits are, although states typically require a certain minimum amount of liability coverage to make sure drivers can pay if they harm others. Some drivers opt to just buy the minimum coverage their state requires in order to keep premiums low.

Unfortunately, a policy limit that is too low could mean there’s not actually enough money to pay for all the losses that occur in a crash. That could lead to disaster, as a driver who harms others could be sued and required to personally pay for any injury-related damages an insurer won’t pay for.

Drivers who don’t want to find themselves facing court judgments they have to pay on their own should be sure to get much more than just the minimum coverage. It’s a good idea to set policy limits no lower than $100,000 per person and $300,000 per accident — or more for those who have a substantial amount of assets to protect.

2. Skipping out on coverage that’s important to have

Drivers also get a choice of what kinds of coverage to buy beyond what’s required by their state. Unfortunately, those who don’t opt to purchase certain kinds of optional coverage could come to regret it.

Specifically, most people should be sure to get collision insurance and comprehensive insurance. Optional collision coverage will pay for crash-related losses to the policyholder’s own vehicle when another driver wasn’t at fault. And comprehensive coverage will pay for any losses not from a car accident, such as damage due to a hail storm.

Without these optional kinds of coverage, drivers could find themselves paying personally to repair or replace their entire vehicle — a huge cost most people can’t afford.

3. Not shopping around for auto insurance quotes

Sticking with the same auto insurance company for a long time, or buying the first coverage that a driver comes across, can be another huge error. That’s because there can be huge differences in price from one insurer to another.

It’s important to get multiple different auto insurance quotes from both national insurers and regional insurers. Drivers who shop around can save anywhere from 15% to 40%, and with average insurance premiums coming in at $3,017, that could be as much as $1,206.80 a year in savings for those who manage to knock 40% off their bill by shopping around.

Drivers can get multiple auto insurance quotes online and should do so at least once a year before their policy renews.

4. Choosing an insurer based on price alone

Finally, looking only at price is another major error to avoid. While it’s worth shopping around to get a good deal, it’s important to remember that the purpose of insurance is to be there in case something goes wrong. No one wants to deal with an insurer that denies a legitimate claim or lowballs the amount they’ll pay for a car.

Check J.D. Power rankings and Better Business Bureau reviews to find out if an insurer is bad news before signing up to get covered.

Fortunately, it’s pretty easy for drivers in the know to avoid these insurance mistakes. So, be sure to shop around, look at insurer reviews, and get the right coverage to avoid being left with regrets.

Our best car insurance companies for 2024

Ready to shop for car insurance? Whether you’re focused on price, claims handling, or customer service, we’ve researched insurers nationwide to provide our best-in-class picks for car insurance coverage. Read our free expert review today to get started.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

“}]] Read More 

If you believe these three common Costco misconceptions — including one about the return policy — this misinformation could cost you. Here’s how. [[{“value”:”

If you’re going to shop at Costco, there’s a lot you need to know about how to get the best deals — including the benefits of buying Kirkland brand products to keep your credit card bills down.

There’s also some misinformation out there about the warehouse club that many people believe. You don’t want to fall for these myths, because they could cause you to lose out on deals or make other mistakes that affect your personal finances.

Here’s what you need to know about the realities behind three common Costco myths.

1. Everything is always returnable forever

One of the biggest misconceptions about Costco has to do with its return policy. See, Costco is well known for being generous about letting customers bring back products. Because of that, many people believe anything that you buy at the warehouse club is returnable forever.

The reality is that’s not the case. Costco does have a 100% satisfaction guarantee and most products can be returned for a refund of the purchase price at any point, even a long time after you’ve bought the item. However, there are some important exceptions to know about.

Specifically, here are some of the biggest limitations for Costco returns:

Electronics and major appliances typically must be returned within 90 days of the time you received the item.Cigarettes and alcohol can’t be returned.Diamonds over 1.00 carats can only be returned if you have all of the original paperwork and the diamond must be examined for authenticity by a Costco gemologist within 48 hours.Products that were special ordered can’t be returned unless there’s a warranty claim and they don’t meet specifications.Gold and silver (including bullions, bars, and coins) can’t be returned.Costco Shop cards aren’t refundable.Airline and live performance event tickets aren’t returnable.

If you buy these items and expect you’ll be able to bring them back any time, you’re going to be disappointed. So be sure to test them out within the allowable time frame for returns.

2. Only members can shop at Costco

There’s another common myth that only Costco members can shop there — and that’s also not true.

Anyone can shop at Costco.com regardless of club membership, although there’s a 5% surcharge if you aren’t a warehouse club member. You can also shop at the warehouse club if you’re not a member if you have a Costco Shop Card (Costco’s version of a gift card). So if you can get a member to buy you these cards, you can shop in a store any time.

3. Everything must be bought in bulk

Finally, the last big misconception is that everything must be bought in bulk. While it is true that many grocery and household items do come in large sizes, plenty don’t. For example, you can buy a single rotisserie chicken, which is an extremely popular Costco purchase priced at just $4.99. Many seasonal items are also sold in smaller sizes.

Ultimately, you shouldn’t buy into these Costco myths because they could prevent you from checking out what the store has to offer. Whether you’re interested in snagging an online deal as a non-member or are hesitant about joining the club because you think everything is sized for families of 10, you should learn the truth so you can make a smart choice about your Costco habits based on the facts, rather than Costco legend.

Alert: our top-rated cash back card now has 0% intro APR until 2025

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

“}]] Read More 

Many tax mistakes are minor, but others can cause delays or even audits. Learn about some of the most common. [[{“value”:”

Death may be as inevitable as taxes, but to some folks, it’s not half as scary. Who doesn’t worry about making a mistake and incurring the wrath of Uncle Sam?

Some of the common mistakes we make when filing taxes simply mean a delay in processing. Other mistakes can lead to fines or, in the worst case, a complete audit.

Worried about what you might be missing? Here are some common mistakes to avoid.

1. Filing too late

This one might be a bit obvious, but it’s still one that many folks risk every year. One study found that 21% of people plan to wait until April to file their taxes this year, putting them right up against that April 15, 2024 deadline.

If you don’t owe any taxes or are due a refund, there is no penalty for filing late.

However, if you owe taxes, filing late comes with a big penalty: A fee of 5% of the unpaid taxes for each month that the return is late. (This penalty won’t exceed 25% of your unpaid taxes.)

Depending on your circumstances, you may be able to get the penalty waived. The better course of action, though, is to file for an extension as soon as you realize you won’t make the deadline. (Note that if you owe taxes, you will still need to pay by April 15, or risk that penalty — an extension just gives you longer to file your return.)

2. Filing too early

Lots of folks like to get an early start on their taxes — just make sure you aren’t too early. Technically, you can generally start filing your taxes around Jan. 29, but you could risk missing out on vital documents. In some cases, you may not even get your W-2 until February.

Your W-2 (or 1099s if you’re a contractor) is hardly the only document you may need to wait for, either. For example, you’ll also need to wait until you have any relevant documents for retirement and/or investment accounts. Interest-bearing savings accounts may also require a separate tax form.

Many modern institutions will offer you the ability to get copies of important tax forms through your online account. More old-school businesses, banks, and credit unions may make you wait on snail-mail, however.

3. Spelling mistakes

Have you ever had that weird nightmare where you’re taking the SATs and spell your own name wrong? Well, the adult version is screwing up your own name while filing your taxes.

The name you use when filing your taxes should match the name on your Social Security card. Avoid nicknames and abbreviations. You may also want to double — or triple — check that you haven’t mistyped anything before moving on to the next step.

4. Math errors

I do math every day as a part of my job, and I still mess up simple calculations sometimes. It happens. But when it happens while you’re filing your taxes, those mess ups can have costly consequences.

If you’re filing your taxes by hand, make sure any calculations are done at least twice for verification. Better yet, use a tax-filing program that does the math on your behalf. (If you make $79,000 or less, you could file online for free.)

Folks with really complicated taxes may want to pony up for a professional to do the math — and everything else.

5. Wrong filing status

The status you use when filing your taxes can determine how much of a standard deduction you can take. Using the wrong status when you file can mean you’re missing out on tax deductions or that you’re taking too many. (Either case is bad.)

There are five options for filing status:

Single: You’re unmarried, divorced, or legally separated.Married filing jointly: You’re married and filing together.Married filing separately: You’re married, but each person is filing independently.Head of household: You’re unmarried but responsible for at least one dependent.Qualifying widow(er) with dependent child: May apply if your spouse died within the last two years.

If you realize you’ve used the wrong filing status, you can amend your return. You can do this by using Form 1040X. Depending on the tax-filing software you use, you may also be able to amend your return directly through your software provider.

6. Unsigned forms

Paperwork without proper signatures doesn’t get filed. This can cause serious delays in processing your return. Always make super duper sure that you’ve signed or initialed everywhere that’s required before mailing off your paperwork.

(This is another one of those mistakes that’s a lot harder to make when you file using software. The software programs won’t let you submit the return without an e-signature.)

7. Incorrect bank info

Sure, it’s better to have no refund than a large refund. But if you do get a refund, it’s pretty sweet when it shows up in your bank account automatically thanks to direct deposit.

Of course, that can only happen if you enter the correct bank account information when filing your return. Always verify your routing and account numbers are correct to prevent delays in (or, worse, the loss of) your refund.

Haste makes…audits?

A lot of the small mistakes we make on paperwork every day have minor, if any, repercussions. Others are more consequential. Either way, it’s best to avoid them whenever possible.

Take your time while filing your taxes to ensure you aren’t missing (or messing up) any important info. Or ditch the paper and pen entirely for a digital filing experience that helps limit the mistakes you can make.

Alert: our top-rated cash back card now has 0% intro APR until 2025

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

“}]] Read More 

A woman on TikTok recently returned a two-year-old couch to Costco. While the video went viral, it’s important to realize the risk. Learn more here. [[{“value”:”

Recently, a TikTok video went viral after the woman in the video returned a couch to Costco that was over two years old. The woman (named Jackie) indicated that she felt nervous when returning the old sofa and that she no longer had the receipt, but she’d decided she no longer liked it. The store took they couch back after looking up the purchase in the computer system.

Millions of viewers watched the video, with some commenting that this was abuse of the return policy. But others supported the returner since her behavior was technically within Costco’s guidelines.

But while Costco is generous about allowing people to bring back items, the reality is that doing so could sometimes come with consequences — including revocation of a Costco membership.

Costco’s return policy is flexible but there could be a downside to ridiculous returns

It might surprise you to learn that Costco’s return policy technically does allow for customers to return couches because they’ve changed their mind about whether they like them years after charging them on their credit cards.

The store’s website promises there’s a 100% satisfaction guarantee and says that Costco will refund your purchase price any time. (There are limited exceptions where there’s a tighter timeline, such as for electronics and major appliances. And some items can’t be returned to Costco at all, including alcohol, cigarettes, and event tickets.)

And the store did take back the sofa, and has taken back a number of other items that it may seem ridiculous to provide a refund for. In fact, Reddit threads are full of stories of returns that most people wouldn’t find justified, including old mattresses, empty wine bottles (because the wine gave the drinker a headache), and plants that died.

However, just because the warehouse club does aim to ensure customers are satisfied — and provides a remedy if they aren’t — doesn’t mean anyone can just return everything all the time. That’s because the store also has another important policy worth knowing about.

Costco’s membership conditions make clear that the store can “refuse membership to any applicant, and membership may be terminated at Costco’s discretion and without cause.” And reports indicate that abuse of the return policy is one of the leading reasons for memberships to be terminated and customers to get a ban on renewing.

When does a ridiculous return justify a Costco ban?

There’s no hard-and-fast rule about when you might be banned from Costco for returns that don’t make much sense (like taking back a two-year-old couch). And ultimately, it’s at the discretion of the store managers to determine when abuse of the return policy goes too far and a customer will have their account canceled because of it.

Returning one couch that’s two years old might, by itself, not be enough to get an account shut down. But customers who have a pattern of purchasing and returning lots of expensive items or even the bulk of what they buy are very likely to be flagged in the system and potentially find themselves persona non grata at their Costco warehouse club.

For the most part, it’s better to be safe than sorry and not make a return that seems, on its face, to be an unreasonable one. If you’ve used and enjoyed an item for a while, don’t try to get the money put back into your bank account for it just because you can. Otherwise, you could end up costing your personal finances more later when your membership is canceled and you can’t take advantage of Costco’s deals in the future.

Alert: our top-rated cash back card now has 0% intro APR until 2025

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

“}]] Read More 

Thinking about not getting auto insurance coverage because premiums are costly? Here’s how serious the consequences of this choice could be. [[{“value”:”

The national average annual cost of auto insurance in 2023 was $3,017. That’s a lot of money to spend on something that isn’t fun or exciting. In fact, it’s so much money that some drivers may be tempted to skip auto coverage entirely — or buy only the bare minimum of protection.

For any driver considering opting out of getting auto insurance, it’s worth looking at the potential consequences. The downside of not having the right insurance could be far worse than any possible upside. Here’s why.

Skipping auto insurance could have legal consequences

There are a lot of reasons why it’s bad to skip auto insurance. But the single biggest reason no driver should ever do this is because there are legal consequences for not getting covered.

Every state has some kinds of requirements for car insurance coverage (although the rules do vary by location). And not fulfilling those requirements could lead to criminal penalties. For example, some potential consequences of going without coverage include:

FinesSuspension of a driver’s licenseSuspension of a vehicle registrationImprisonmentImpoundment of a vehicleCommunity service

Basically, it’s not worth going to jail over not having insurance — or covering all of the extra costs that could come from being found without coverage, such as paying to get a car out of impound, re-register the car, and get a license reinstated.

Skipping coverage could also have financial consequences

Some pretty dire financial consequences could result from not having auto insurance — even beyond the fines and expenses associated with delaying the legal violations. Other ways that a driver’s personal finances could be affected include:

Facing more expensive insurance costs later: Insurers generally charge more to provide coverage to someone who has had a gap in insurance coverage.Being personally sued for accident losses: Liability insurance pays for the damage a policyholder causes to others. If a driver doesn’t have enough coverage to pay for all of those damages, the victim could personally sue the driver. This could lead to liens on property, wage garnishment, and other legal means of enforcing a court judgment.Having to pay to repair or replace a vehicle: Drivers aren’t usually required by law to buy comprehensive coverage (which pays for their non-crash losses) or collision coverage (which pays for their crash-related loss not caused by another driver). But going without these coverages would mean having to pay to repair or replace a car out of pocket after something goes wrong.

Most people cannot just pay to get a new car or pay for thousands or even millions in damages they cause if they injure someone. That’s why it is so important to buy insurance in the first place — so the auto insurer is there to pay for these things.

The bottom line is, going without auto insurance is really bad. Drivers should not only make sure they have the coverage required under state law, but should get full coverage — including collision and comprehensive insurance in most cases. This may seem costly, but it’s a lot less expensive than dealing with the fallout of having no insurance when something goes wrong.

Our best car insurance companies for 2024

Ready to shop for car insurance? Whether you’re focused on price, claims handling, or customer service, we’ve researched insurers nationwide to provide our best-in-class picks for car insurance coverage. Read our free expert review today to get started.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

“}]] Read More