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Money Management

Mar 02
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Here’s How I Pay Only $60 a Month for Car Insurance

By Money Management No Comments

As gas prices go down, car insurance prices go up. Read on to learn how this author saves a ton on car insurance. [[{“value”:”

Image source: Getty Images

If you’ve never paid as much for car insurance as you do now, you’re not alone. Car insurance rates rose by an astonishing 24% in 2023, according to a report by Insurify, which lifted the average cost of full-coverage insurance from $1,633 in 2022 to $2,019 in 2023.

Despite these trends, my car insurance rate has remained steady and low. I pay less than $720 per year for coverage, or roughly $60 per month. Meanwhile, the average annual cost of car insurance for my state (Oregon) is about $1,475, which means I’m paying about $750 less than the average. While my method isn’t replicable for everyone, here’s how I keep my car insurance payments cheap.

1. I pay by the mile

Currently, I work from home, live in a big city with great public transit, and only occasionally use my car. When I shopped among traditional insurance companies, I was getting quotes ranging from $100 to $140, which seemed a little high for how seldom I drive. So, I decided to go with a pay-per-mile company — Lemonade — and I’m saving big because of it.

With Lemonade, I have a base rate of $48.50 and a per-mile rate of $0.08. On average, I drive about 150 miles per month, which comes out to about $12. That puts my premium at roughly $60 per month.

Of course, sometimes I drive longer distances. For instance, I like to go to the Oregon coast, which is about 178 miles there and back from where I live. But even that only comes out to like $14.24, which still puts my monthly premium below traditional insurance.

Read more: check out our picks for the best car insurance companies

2. I don’t need full coverage

Considering that I’m not driving a lot these days, I don’t need insurance with all the bells and whistles. I don’t have comprehensive or collision (both would add an extra $36 to my monthly rate), and I also don’t have temporary transportation coverage. I maintain liability coverage with limits of $100,000 per person, $300,000 per accident, and $100,000 in property damage per accident (100/300/100), which is what experts recommend.

Notice that I still have high liability coverage. For me, forgoing this is a dealbreaker: Even though I can save $6 monthly by getting the cheapest coverage (25/50/50), I don’t want to be in a situation where my insurance doesn’t cover the full accident. I would rather pay $6 more each month than pay thousands of dollars out of pocket for damages that exceed my minimum coverage.

3. I have a high deductible

Finally, I have my deductible set at $1,000. While lower deductibles would mean I pay less out of pocket when I file a claim, I’m also saving about $120 per year with a higher deductible. I’m fine taking a slightly smaller claims check to save money on my monthly premium.

All in all, finding cheap car insurance is about experimenting with different policies and finding one that matches your driving behavior. Even if you drive more frequently than I do, you might still find a cheaper rate by shopping around and gathering policy quotes. To get started, check out our list of cheap car insurance companies and see if one can offer you a lower rate.

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.

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Mar 02
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5 Costly Tax Return Errors and How to Avoid Them

By Money Management No Comments

With millions of tax returns to process each year, the IRS is trained to look for mistakes. Here are five errors that can cost you time and money. [[{“value”:”

Image source: Getty Images

More than 162 million tax returns were filed in 2023 for the tax year 2022. So it’s fair to assume a similar number will be rolling into the IRS this year for tax year 2023. With millions of returns to process, IRS employees are trained to spot mistakes — large and small. According to the IRS, here are some of the most common errors taxpayers make each year that are completely avoidable, and how you can sidestep these mistakes.

1. Don’t file too early

If you’re expecting a refund this year, it’s natural to want the money in your checking account as soon as possible. However, that enthusiasm could lead to an easy-to-avoid mistake: Filing too early. You should never file late. However, filing before receiving all the documentation you need to complete an accurate return will likely lead to a processing delay.

Read more: we researched free tax software and put together a list of the best options here

If you’re anxious to get your return done, comb through a tax return first to ensure you have everything you need. While it can be tempting to estimate numbers, your best bet is to wait for the documentation you need to get it right.

2. Don’t rush

A few years ago, OnePoll surveyed 2,000 Americans on behalf of H&R Block. The study found that Americans are so busy they only have four hours and 26 minutes of free time a week. What’s more, 4 out of 10 respondents say they actually have less free time.

If that sounds a lot like you, it would be natural to want to get your tax return finished as quickly as possible so you can get on to other important tasks. According to the IRS, rushing leads to mistakes. Here’s a sample of the errors most commonly flagged:

Misspellings: It’s possible to misspell anything, from your name to the name of your employer.Missing Social Security number (SSN): Forgetting to add your SSN (or the SSN of your spouse and/or children) can put the brakes on processing your return.Checking the wrong filing status: Make sure you understand each filing status and choose the one that fits your situation.Math mistakes: Math mistakes are easy to make, even when you’re not in a hurry. It’s even more common when you’re in a rush.

3. Don’t be afraid to ask questions

For the average American, taxes can be intimidating and confusing. If you’re trying to figure out factors like the Child and Dependent Care Credit, Child Tax Credit, Earned Income Tax Credit, or Recovery Rebate Credit, you don’t have to go it alone. If you’re using tax software, you’ll probably be walked through the process, which can help tremendously.

However, there’s no shame in admitting that you’re still confused, despite the assistance of tax software. If you’re filling out an individual tax return and find yourself searching for answers, IRS representatives are available 24 hours a day, Monday through Friday. To contact a representative, call 1-800-829-1040.

You can also order tax forms and instructions by calling 1-800-829-3676 or find forms, publications, and other helpful information at the IRS website.

If you’re still unsure of what you’re doing, consider paying a tax preparation service to complete your return. AARP Foundation Tax-Aide is available nationwide and offers free tax preparation to adults 50 and older and taxpayers with low to moderate incomes.

4. Check and double-check

The fastest way to receive a tax refund is by choosing direct deposit. If you want your refund deposited directly into your bank account, double-check the routing and account numbers on your return to ensure they’re correct. Being off by even one number can slow the processing time to a crawl.

Before pushing “send” or mailing your return, go through the entire return one last time, looking for any potential spelling errors, missing names, missing SSNs, or lines you forgot to fill in.

5. Collect signatures

Finally, make sure you’ve signed the return and, if you’re filing jointly, your spouse has also signed the return. Unsigned tax returns are not considered valid and will be sent back unprocessed. The only exceptions may apply to taxpayers with a valid power of attorney or members of the armed forces.

The easiest way to avoid this simple mistake is to digitally sign your return and file it electronically.

The moral of the story is that taking your time to file your return is the best way to receive a timely refund.

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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.

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Mar 02
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With Medical Debt Burdening Millions, a Financial Regulator Steps in to Help

By Money Management No Comments

 Crushed under medical debt? This consumer protection group is trying to change that. fizkes / Shutterstock.com

When President Barack Obama signed legislation in 2010 to create the Consumer Financial Protection Bureau, he said the new agency had one priority: “looking out for people, not big banks, not lenders, not investment houses.” Since then, the CFPB has done its share of policing mortgage brokers, student loan companies, and banks. But as the U.S. health care system turns tens of millions of…

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Mar 02
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How Much Should Internet Service Cost?

By Money Management No Comments

 Get the scoop on what goes into internet costs and how find an affordable service. Daniel M Ernst / Shutterstock.com

Internet service isn’t usually cheap. Sure, we know some plans that start at $19.99 per month, but we’ve also seen internet bills as large as $499.95 per month. While the average price for internet is around $50 per month, your costs will vary based on speed, internet technology type, and —of course — internet provider. We’ll walk you through how much you should expect to pay for internet and…

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Mar 02
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41% of Older Americans Flunk This Social Security Quiz

By Money Management No Comments

 Many Americans remain largely ignorant of key aspects of a program that impacts nearly all of our lives. Anatoliy Karlyuk / Shutterstock.com

Nearly 80% of folks nearing retirement know next to nothing about the nation’s Social Security retirement program, a new survey has found. Among those ages 55 to 65 — characterized as “near-retirees” — 78% failed or barely passed a basic knowledge quiz about Social Security retirement benefits, according to the latest MassMutual Social Security consumer poll. The poll surveyed 1,500…

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Mar 02
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Here’s the Average Tax Refund in Every State Last Year

By Money Management No Comments

Last year’s tax season brought significant refunds to taxpayers in all states. Take a look at how yours stacked up to the rest. [[{“value”:”

Image source: Getty Images

The only thing most people like about tax season is getting a refund check they can put toward debt repayment, saving for a long-term goal, or just spending it on something fun. You deserve it after all the dull hours combing through financial records!

But some people get more back than others. And residents in some states get more than others, too. Below, we’ll look at which states had the largest tax refunds last year and what you can do to boost yours.

Read more: we researched free tax software and put together a list of the best options here

How big was your state’s average tax refund last year?

The table below lists the average tax refund for each state and the District of Columbia for the 2022 tax year — that is, taxes filed in 2023.

State Average Tax Refund for the 2022 Tax Year Alabama $1,593.92 Alaska $1,565.92 Arizona $1,495.09 Arkansas $1,529.18 California $1,506.74 Colorado $1,500.52 Connecticut $1,676.48 Delaware $1,529.04 District of Columbia $1,757.25 Florida $1,793.80 Georgia $1,629.44 Hawaii $1,477.69 Idaho $1,114.81 Illinois $1,679.81 Indiana $1,536.28 Iowa $1,495.22 Kansas $1,473.87 Kentucky $1,482.91 Louisiana $1,723.80 Maine $1,377.99 Maryland $1,535.69 Massachusetts $1,617.28 Michigan $1,565.23 Minnesota $1,431.88 Mississippi $1,623.56 Missouri $1,518.51 Montana $1,370.75 Nebraska $1,421.13 Nevada $1,663.16 New Hampshire $1,542.70 New Jersey $1,595.18 New Mexico $1,402.14 New York $1,633.64 North Carolina $1,472.20 North Dakota $1,558.26 Ohio $1,507.76 Oklahoma $1,594.59 Oregon $1,328.82 Pennsylvania $1,563.43 Rhode Island $1,516.79 South Carolina $1,478..38 South Dakota $1,631.41 Tennessee $1,578.75 Texas $1,714.15 Utah $1,432.33 Vermont $1,387.85 Virginia $1,529.94 Washington $1,565.99 West Virginia $1,522.99 Wisconsin $1,452.98 Wyoming $1,719.75
Data source: IRS.gov

The gap isn’t as big as you might expect. Oregonians got the smallest average tax refund at $1,328.82 while Floridians took home the largest average refund at $1,793.80. But that’s only a difference of about $465.

Obviously, there are plenty of individuals in all states that received much higher and lower refunds than these averages. A lot depends on your income during the year and what sorts of tax breaks you qualified for. But getting a big refund isn’t all it’s cracked up to be.

A refund is your own money that the government unnecessarily withheld from you throughout the year. You could’ve had this money much earlier if the government had taken less from each paycheck. So to some, getting a smaller refund is actually something to be happy about. It means they’re getting more of their money as they earn it.

How to maximize your tax refund (legally, of course)

But to most people, getting a big refund check is still something to be excited about, even if they wish they could’ve had that money sooner. If you haven’t filed your taxes yet, there are still some things you can do to ensure you get the largest refund possible, including:

Choose the right tax-filing status: Not everyone has a choice in this, but if you can choose between, say, married filing jointly or filing separately or qualifying widow(er) or head of household, it’s good to check both options to see which rewards you the most.Claim as many tax breaks as you can: Tax credits and deductions can help you reduce how much you owe. Your tax professional or tax-filing software should ask you questions to help you determine which tax breaks you qualify for.Consider funding your IRA or HSA: If you didn’t max out your IRA or HSA contributions last year, you still have time. You could make prior-year contributions to these accounts before the tax deadline and then write these contributions off on your 2023 return. Contact your plan administrator to learn how to do this.

But whatever you do, make sure you take your time and do your taxes correctly. Fudging the numbers to increase your refund will also increase your risk of a tax audit and the penalties that come with lying on your return. If you’re unsure how to approach something, contact a qualified tax professional who can help you navigate it.

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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.

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