Money Management

Getting car insurance quotes takes time and isn’t very exciting. But these five tips can help drivers find the best coverage as quickly as possible. [[{“value”:”

I’ve been writing car insurance reviews for over a decade now, and during that time, I’ve personally obtained thousands of insurance quotes for all types of drivers in every state in the U.S. Yes, it was tedious, even with the online forms most top providers offer today. But it also taught me a lot of valuable things I may not have learned otherwise.

Here are five of my best time- and money-saving tips you can use to find the best deal on your car insurance this year.

1. Shopping around really does make a difference

“Shop around” is the most cliche car insurance shopping advice out there, but there’s a good reason for it. I’ve seen some companies offer a driver a rate of $130 per month while a competitor charged that same driver nearly $370 per month for the same coverage. That’s a difference of $2,880 per year.

If the driver only got a quote from the second company, they might not realize they were getting a really bad deal. That’s why it’s best to get quotes from at least three to five companies before purchasing a policy.

2. Having all the necessary information speeds up the process considerably

Insurance companies generally ask for a lot of the same information. Most people know things like their birth date and their address off the top of their head. But things like their Vehicle Identification Number (VIN) and Social Security number don’t come to mind as easily. Noting these down before beginning the search for auto insurance can help drivers get their quotes a lot faster.

Those with accidents, speeding tickets, DUIs, or other traffic violations on their record will also want to keep the dates of these incidents handy. Typically, insurers want to know about any accidents or infractions that have occurred within the last three to five years.

3. Focus only on companies with the coverage options you want

All auto insurers will provide the coverage legally required to drive in the state. But many drivers prefer to purchase higher limits or additional protections. Knowing which coverage options matter most to a particular driver can help them quickly weed out providers that aren’t for them.

For example, if someone has a lease or loan on their car and they really want gap insurance, it doesn’t make sense to consider providers that don’t offer this. The same goes for those who want ridesharing coverage. Some companies have this and others don’t. Focusing on dealbreakers upfront can reduce the number of quotes a driver has to get.

4. Always save your quotes

The best auto insurers have online quote tools that enable drivers to enter their email and save their quotes after they’ve gotten them. How long they can save their quote varies by provider. But it makes sense to do this for a few reasons.

First, getting car insurance quotes is boring, so it’ll save drivers from entering their information too many times. And second, it’s much easier to compare quotes when you can see them side by side.

5. Higher deductibles are often worth it

Raising a car insurance policy’s deductible typically lowers monthly premiums. This difference varies by provider, but it can be pretty significant. However, it means drivers will have higher out-of-pocket costs in the event of a claim.

One way to handle this is to take the money saved by going with a higher deductible and place that money in an emergency fund, if you don’t already have one. For example, if a premium is $250 per month with a low deductible and $200 per month with a high deductible, save that extra $50 per month until you’ve got enough to cover the higher deductible.

Even using the tips above, finding the best car insurance for you will still take time. But it’s time well spent. Hopefully you won’t need to file any claims, but if you do, you’ll be glad you took the time to seek out the best deal possible.

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Are you interested in investing in crypto, meme stocks, or day trading? See why these popular investment trends can be bad for your personal finances. [[{“value”:”

One popular saying about economics and investing is that “a rising tide lifts all boats.” When the economy grows, companies become more profitable, and people get more prosperous. Ideally, everyone is supposed to end up better off. But in the world of investing, not all boats keep rising. Sometimes, stock prices go down as well as up. Hot new industries or asset categories can go from boom to bust. Can’t-miss investments can’t always last.

The past few years since the start of the pandemic have seen wild swings in the stock market: drawdowns of around 30% in February–March 2020, followed by a meteoric rise through the rest of 2020 and 2021. Then, in 2022, stocks and bonds went down. The volatility of the stock market can be unnerving for many investors who are trying to save for retirement and build their wealth.

Along with the volatility of the stock market, there have been a few popular investment trends in recent years that have gotten more investors interested in buying stocks and other financial assets. While in many ways, it’s good news that more Americans own stocks, there are also some big downsides to these investment trends.

Let’s look at a few popular investment trends — and why they could be risky for your personal finances.

1. Meme stocks

For most of the past 20 years, GameStop Corporation would not be any expert’s pick for a hot stock. The video game retailer had fallen on hard times as people migrated to online gaming platforms instead of buying physical video games. It seemed like GameStop would go the way of Blockbuster Video — an outdated relic of the pre-digital age.

But then, in the winter of 2021, a group of amateur stock investors on a Reddit community called r/WallStreetBets decided to send GameStop stock “to the moon.” Whether it was a nihilistic social media prank or a principled stand to do a short-squeeze against billionaire hedge fund investors, it worked. GameStop became the hot “meme stock” of 2021.

Redditors and other investors somehow sent GameStop stock skyrocketing, from around $5 per share in December 2020 to a new all-time high of $81.25 on Jan. 29, 2021. Some big Wall Street hedge funds that had been shorting GameStop stock lost billions of dollars; some individual investors from Reddit got rich.

The meme stock craze became one of the biggest financial news stories of 2021. But along with the hilarity and the fun, it’s important to remember that meme stocks can go down as well as up. If you’re taking investment advice from a community of foul-mouthed trash talkers egging each other on with risky stock picks on social media, you might end up losing money even faster than you made it.

2. Crypto

I’m kind of afraid to even type these words because I don’t want a bunch of laser-eyed crypto enthusiasts to fill my inbox with hate mail, but: Cryptocurrency is really risky! Not every new altcoin or digital token or digital asset turns out to have real long-term value. Just because something is scarce doesn’t mean it’s valuable. Yes, some people have made lots of money off of crypto, but other people have lost lots of money. And there’s no guarantee that crypto is the best long-term investment for your financial goals.

I’m not trying to harsh anyone’s vibe here. If you’re a crypto investor, I wish you the best of luck. But crypto can be really risky, and it seems like lots of prominent people in the crypto world, like former FTX CEO Sam Bankman-Fried and Binance founder Changpeng (“CZ”) Zhao, keep getting convicted of federal crimes and sent to prison.

Maybe I’m just an old-fashioned fuddy-duddy, but I try to follow Warren Buffett’s advice to invest in what you understand. And I don’t understand crypto. It doesn’t pay interest like bank accounts do. It doesn’t pay dividends or have fundamental corporate earnings or bond cash flows backing it. With crypto, you’re buying a speculative digital asset because you think it will be worth more in the future than it is today. It’s like digital gold — but I don’t invest in gold, either.

If crypto is a bet that you want to make, then good luck. But I worry that a lot of people are risking money on crypto (real American dollars, not Dogecoin money) that they can’t afford to lose, and that could get a better long-term return on investment from the S&P 500.

3. Day trading

Whenever the stock market is on the upswing, there’s a big increase in day trading. The pandemic caused a huge surge of people signing up for retail brokerage accounts and using their stimulus cash to invest in stocks. On the one hand, this can be a good thing! If more people are making money from the stock market and building wealth for their financial goals, that’s great news.

But too often, people turn investing into gambling. If you think you can time the market, if you think you know better than millions of other analysts, researchers, and sophisticated investors with trillions of dollars to invest, then you’re likely to lose. Very few professional investors can beat the market for long. In fact, most day traders lose money.

Bottom line: Speculative assets like meme stocks and crypto can deliver huge short-term returns, but they can pose big risks. Being a stock picker or day trader can also cause you to lose more money than you gain. Instead of trying to beat the market, most investors are likely better off in the long run by buying S&P 500 index funds.

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Being open about your financial journey and communicating your goals can benefit you and those around you. Find out how being loud can be a win for your wallet. [[{“value”:”

Many people have established financial resolutions for 2024. If you’re working on financial goals this year, don’t be afraid to share them with your friends and family. Communicating your goals and money-related boundaries can benefit you and those around you. Learn how to do this and discover some little-known perks of being loud about your financial goals.

Introducing loud budgeting

Loud budgeting is a trend that has become popular on TikTok. It started as a way to push back against an earlier TikTok trend, quiet luxury, which encourages spending money on quality items that last.

But this year, more people are leaning into loud budgeting. Loud budgeting is when you’re transparent about your money goals and communicate what expenses and experiences fit your budget. The trend encourages more people to speak up about their financial goals.

How can you embrace loud budgeting? One way is to decline an invitation to dinner if it doesn’t fit your budget. Another is explaining how you intend to spend your money differently, like contributing an extra $100 to your IRA account instead of buying a ticket to an event you’re not interested in.

If you’re working to improve your finances in 2024, consider being more honest about your financial situation. Here are some unexpected perks of being loud about your financial goals.

It may encourage your friends to improve their finances

When the people closest to you see you improving your life, it can encourage them to take similar action. Being clear about what does or doesn’t align with your goals may show your friends and family that they can benefit from making some financial changes, too.

You’ll have more money to spend on what matters to you

Being clear about your financial goals can be a win for your bank account. You can save money by reducing your spending. But you can also have more money to spend on the things that are important to you. Following a budget doesn’t have to be restrictive. You work hard for your money, so it’s OK to use some of it in a way that brings you joy.

You can improve your financial knowledge

Being loud about your financial goals can also result in you improving your financial knowledge. As you communicate your money boundaries and share what you’re choosing to do with your money with friends and family, they may share tips and strategies with you.

You may also find other people who feel similarly, which could help you build a stronger support system so you stay motivated throughout your journey. We can all benefit by learning more about essential topics like investing, savings, and debt payoff.

Don’t give up on your goals

If you’re prioritizing your finances, you’re doing a fantastic job. Don’t give up, whether you’re working hard to build an emergency fund, pay off credit card debt, or stop overspending. One strategy you may want to try is being loud about your goals and transparent about how you’re willing to spend your money. For additional tips, check out our personal finance resources.

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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.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

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Some taxpayers are being thrown a bone by the IRS. Read on to learn more. [[{“value”:”

In 2020 and 2021, many Americans were preoccupied with the raging pandemic at hand. Some people got sick and were working on their recovery, or had to grapple with long-haul COVID-19 symptoms. Other people’s finances took a hit, and their energy was largely focused on finding work and coming up with a plan to pay their rent or mortgage.

As such, it’s easy to see how filing taxes might have fallen by the wayside during that time. Unfortunately, failing to submit a tax return on time can have negative financial consequences. So can paying a tax bill late. But now, the IRS is throwing people in the latter category a bit of a bone.

A little tax relief is now available

The IRS recently announced that it would be waiving about $1 billion in late payment penalties for taxpayers with balances of under $100,000 for returns filed in 2020 and 2021. This decision will impact an estimated 4.7 million individual tax filers, businesses, estates, and tax-exempt organizations.

Normally, a late payment penalty costs filers 0.5% of their unpaid tax bill per month or partial months they’re late, up to a total of 25%. Interest can also accrue on any unpaid sum, and that’s different from the late payment penalty, or failure-to-pay penalty, itself.

But now, the IRS is waiving this penalty for 2020 and 2021 due to the circumstances tax filers were facing at the time. Those who already paid the penalty will be issued a tax refund or credit to their account for it. However, the IRS warns that late payment penalties for unpaid balances from 2020 and 2021 will resume on April 1 this year. So while any prior penalties for those years will be waived, if you still owe a balance for those years, pay it now, before penalties start to accrue again.

Penalties aren’t completely off the table

While the IRS is waiving penalties for late payments in 2020 and 2021, it’s not doing the same for the failure-to-file penalty. The failure-to-file penalty applies to tax returns that are submitted late when a balance is due.

When there’s no balance due and a filer is owed a refund, there’s no penalty for being late with a tax return. The way the IRS sees it, anyone in that boat is effectively penalizing themself by delaying their refund, so there’s no need to pile on — not when the agency then gets to keep the money for longer.

But the failure-to-file penalty can be very costly. It’s equal to 5% of an unpaid tax bill per month or partial month a return is late, up to 25%. So if you didn’t file a tax return in 2020 or 2021 and you owe the IRS money, you may want to get moving ASAP.

What’s more, if you’re gearing up for the 2024 tax-filing season, you should make every effort to submit your 2023 return on time if you think there’s a chance you owe the IRS money. Of course, in the opposite scenario, filing on time also means seeing your tax refund hit your bank account sooner, so that’s reason enough to get moving.

But if you think you have a balance due from 2023, make sure to get your tax return submitted by April 15 so you don’t end up with a penalty on your hands. If that’s not possible, request an extension by April 15 to postpone your personal filing deadline by six months. You won’t get extra time to pay your IRS balance in that case. But an extension will give you a six-month reprieve from the failure-to-file penalty if you’re late with your return itself.

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Get paid through Venmo? Read on to see what your reporting obligations are this year for tax-filing purposes. [[{“value”:”

Whether you’re self-employed or run a small business, you may accept payments via apps like Venmo. Venmo and similar payment platforms can make it easier and quicker to get paid. Instead of waiting for a check to arrive in the mail that then needs to clear your bank account, you can instead receive payment on the spot.

Meanwhile, the IRS had previously announced changes to Venmo reporting that would impact 2023 tax returns. Those changes are now delayed another year — but that doesn’t actually change your income-reporting obligation.

You have to report all income you earn

The IRS was originally seeking to change the rules of third-party platform reporting to apply to 2023 returns. The current rules are that platforms like Venmo only have to issue a tax form, called a 1099-K, for users who earn more than $20,000 in a year across more than 200 individual transactions.

The IRS originally wanted to lower that threshold to $600 and remove the 200-transaction requirement for reporting purposes. It still plans to do so, only for 2024 tax returns — not the 2023 tax returns being filed this year.

However, the delay of this new reporting rule shouldn’t change anything for you as far as your income-reporting obligation goes. Any time you earn money, you have to tell the IRS about it — no matter how you’re paid.

So let’s say you were paid $2,000 across 10 Venmo transactions in 2023. You may not get a 1099 form from Venmo, but you still need to report your $2,000 in earnings. The only difference is Venmo’s obligation to send you a tax form.

As Mark Steber, Chief Tax Information Officer at Jackson Hewitt Tax Services, explains, “Despite last-minute changes to who will receive a 1099-K form this tax filing year, it’s likely that if you earned money and received it using Venmo or other third-party payment apps, that it needs to be reported on your federal income tax return. All income is taxable in the year it’s earned and should be reported on a tax return. Just because you don’t receive a 1099-K from Venmo because you don’t meet the current $20,000 threshold doesn’t mean that you don’t have to claim this money on your tax return.”

Don’t worry about Venmo payments that aren’t income

Many people use Venmo for personal transactions that have nothing to do with earning income. You may be in the habit of using Venmo to collect money for teacher gifts at your child’s school. Or you might sometimes use Venmo to split a check with friends at a restaurant.

Do rest assured that these aren’t transactions you have to report, and you won’t be taxed on them. If you and a friend rack up a $60 tab at a cafe and your friend sends you a Venmo payment for their $30 share, the IRS won’t get a piece of that money because it isn’t income.

Rather, you only have to report earnings for work you received via Venmo on your taxes. But again, this holds true no matter what your income-related payments amounted to in 2023. Make sure to follow the rules carefully so you don’t wind up reporting the wrong amount of earnings and getting audited or penalized by the IRS as a result.

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When I left my husband, I gained a lot of bad debt. But it’s not going to get the better of me — I have a plan. Read on to learn more. [[{“value”:”

When I left my marriage four years ago, I knew that there would be certain problems that I’d have to deal with, including a large amount of debt that was collected while my household income was significantly larger than it could ever be on my own. Through the early phases of the COVID-19 pandemic, I struggled to just pay the regular bills, and a lot of other expenses had to wait, but now I’m ready to conquer this summit. I’ve been doing it in phases.

Phase 1: Acknowledge the debt exists

My plan isn’t a difficult one, in fact, I’m positive you can follow each of these steps and do the exact same thing yourself, no matter how much debt or how much money you have. Step one was actually owning my problem.

It came to a head back in September, when I had a pretty major breakdown and confided in a friend about just how deeply in trouble I was. She’s a math teacher, but has always also been a practical sort, so I knew that she was going to have my back.

And she did. Just the simple act of owning the debt that I’d been ignoring made it feel like maybe I could deal with it at all, and unburdening myself of the stress behind it freed up my headspace so I could move forward.

Phase 2: Determining how much I could pay back at once

I have a lot of debts that went south on me when I left my husband. There’s no lie there. It’s what happens sometimes, divorce is absolutely brutal on personal finances. But I had also been tracking my finances for a while, so even if I wasn’t paying off those debts, I knew how much I was paying out and how much I had to work with. Spoiler: It wasn’t much.

Having those figures in front of me, including how much I was paying for housing, utilities, groceries, and medical, made it possible to make a budget for debt repayment. I knew that I could manage a certain amount reliably, and with anything above that, I could pay extra or put into a savings account to hold in case I was short one month.

Phase 3: Contacting debtors

Hooboy, this was the hardest part. I was plain afraid of these collection agents. They were very scary. The good news is that although I was very afraid of them, they were very nice to me, and many had self-service online systems. They just wanted my money, and I wanted to give it to them, so we found a way to come together.

With my budget in hand, and knowing how many accounts I had to pay, I started making deals. $25 a month for this account, $25 a month for that account, and no account more than $100. It’s a long-term sustainable deal and all set-up on autopay, so it’s very hard to mess up as long as there’s enough money in my account at all times.

Phase 4: The long, dark drudgery of the soul

I’ve been paying on these debts for several months now, and have made some substantial progress, but it’s hard to keep going. It gets hard to see the benefit in giving these people money every month, even though I know that I owe the debt and I need to do this for my credit and general human decency.

What I’ve done to combat that is create spreadsheets that not only track my payments so I know each has been made, but so I have a little box I can check every month, from which I get a passing whiff of dopamine. Each month, one of my sheets tells me how many payments are left and how much debt I’ve paid down, which makes it easier to keep going.

These spreadsheets also, as it turns out, helped when one of my accounts was accidentally closed a few weeks ago and the payment didn’t come out as it should have. If I hadn’t known there was an issue, if it hadn’t registered to me that one payment had been missed, this account might be headed to court. But because I was missing my little dopamine burst from that one, I saw it quickly and contacted the collection agency, and after about a week, it was fixed. I made that missing payment today.

Phase 5: The future

Right now, it doesn’t feel as if I’ve got a lot of momentum going with my debt repayment plan, but it’s moving. By the end of this year, I’ll have about 20% of my accounts paid in full, with 60% on track to be paid in full before the end of 2025. Once I pay off some accounts with shorter timelines, I can roll that money I was using into the longer payoff schedules so that they get paid off sooner, too.

And my credit score is gaining, bit by bit. I get regular emails from Credit Karma notifying me that my bad debt is being paid down, and that’s a pretty good feeling. It’s nice to know someone notices the hard work I’ve been doing.

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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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