Money Management

Adopting a dog from a rescue is a great thing to do. Read on to see what specific benefit you may want to ask about. [[{“value”:”

When my family adopted our dog, Champ, over three years ago, our first priority was making him feel loved and comfortable in our home. So admittedly, pet insurance fell by the wayside. We’d gotten him over to the vet right away and he checked out fine. So we figured we had time to put insurance in place.

Only we didn’t.

Soon enough, Champ started limping and experiencing joint pain. Roughly $3,000 in diagnostic tests later, which we paid for out of pocket, we found out that his condition was a simple matter of arthritis, and that it was treatable with ongoing medication. But because we had to rule out joint malformations and possible surgery, he had to have a lot of testing. And since we didn’t have pet insurance at the time, we had to dip into our savings to cover it.

These days, we have pet insurance. While it won’t cover Champ’s pre-existing condition, it should cover diagnostics for other issues that might arise. But had we gotten pet insurance right away, we’d have about an extra $3,000 in the bank.

Thankfully, our rescue has since changed its practices with adoptions in a positive way. And because of that change, future adopters may be spared a whopping early expense like the one we had to cover.

When pet insurance is part of the package

Last year, the rescue we adopted Champ from announced that new adopters would be entitled to 30 days of free pet insurance from its partner provider.

This change, frankly, is huge.

Many pet owners don’t manage to secure insurance within 30 days because there’s work involved. It can take time to contact different pet insurance companies, compare coverage, and review rates. But unfortunately, a medical issue with a pet could easily arise within 30 days of bringing them home. So this change will hopefully spare new adopters from having to shell out lots of money early on.

You may want to adopt from a rescue that offers pet insurance

I really love the fact that our rescue now offers a limited period of free pet insurance. If you’re adopting a dog, you may want to seek out a rescue that provides the same benefit.

Remember, it’s hard to shop for pet insurance before you bring home a dog because the rates you’re quoted will hinge on their age (or assumed age), breed, and health. When we were seeking to adopt a dog, we tried researching pet insurance ahead of time but found that it was basically impossible to get a quote in the absence of being able to point to an actual dog we owned.

Since pet insurance is not the sort of thing you can really line up ahead of time, it’s a very good thing to get access to it immediately for a period upon bringing your pet home. So definitely try to work with a rescue that offers it.

Of course, our rescue strongly encourages adopters to maintain pet insurance beyond its 30 days of free coverage. In a Facebook post made last year, it said, “It is highly beneficial that owners have insurance for pets, and we hope that after your 30-day trial, you will continue with your monthly insurance for your pet.”

This doesn’t mean you have to use the same insurer your rescue partners with, if applicable. There’s nothing wrong with going out and shopping for rates. The takeaway, however, is that the sooner you’re able to get insurance for your new pet, the sooner you’re protected financially. And if you’re able to have insurance from day one, even better.

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You may have to write the IRS a check this tax season. Read on to see why. [[{“value”:”

Millions of tax filers received a tax refund from the IRS in 2023. As of the end of the year, the average refund amount was $3,167.

If you typically get a refund when you file your taxes, you may be anticipating a repeat situation this season. But here’s why you may end up having to write the IRS a check instead.

How much interest income did you earn in 2023?

The Fed began raising interest rates in March 2022 to fight high inflation. That rate hike was the first to come through in years. The Fed then proceeded to raise interest rates 10 more times through late 2023 for a total of 11 rate hikes.

Before the Fed’s rate hikes, banks were generally paying minimal interest on savings accounts and CDs. But once those rate hikes took hold, savings account and CD rates began to soar.

That was a good thing for people with money in the bank. But if you earned a lot of money in interest in 2023, you may be in for a rude awakening this tax season.

You may not realize this, but the IRS is entitled to a piece of pretty much any type of income you earn. And that includes interest income in a bank account, whether it’s a savings account or a CD. Not only is the interest a bank pays you taxable, but it’s taxed as ordinary income, which means it’s subject to the highest rate possible based on your tax bracket.

Now, when you earn money from your job, you’ll typically be paid on a post-tax basis. In other words, your paycheck won’t represent your total wages, but rather, your after-tax wages.

When you earn interest in a bank account, you’re not paying taxes as you go — at least not usually. Some people with a lot of money in the bank may know to make estimated quarterly tax payments on their interest income, the same way self-employed people have to pay estimated taxes on their earnings each quarter. But if you earned a nice amount of interest in 2023 and didn’t pay a portion of it to the IRS along the way, then you may end up owing money when you file your tax return this year.

Work with a professional to avoid unpleasant tax surprises

Learning that you might have to pay the IRS some money this April, as opposed to getting a refund, might constitute a harsh blow. That’s why it could be a smart idea to engage the services of a tax professional — both this season and in general.

Someone who knows the tax code inside and out can help you anticipate a tax bill, such as one that might ensue as a result of having earned a lot of interest income the year before. Just as importantly, in the context of this year’s return, a tax professional might be in a position to help you offset your tax bill from that interest income by helping you identify deductions you weren’t aware you could take. So if you’re now realizing you might owe the IRS a bundle from 2023, you may want to line up some help.

“I almost always recommend people work with a tax professional,” says Mark Steber, Chief Tax Information Officer at Jackson Hewitt Tax Services. These people really do know the tax code in and out because it’s their job. And you may be surprised at how a tax professional can help you legally whittle down your IRS bill and avoid hiccups in the future.

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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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Don’t have life insurance yet to help provide for your loved ones? Read on to see why you’re taking a big risk. [[{“value”:”

The start of a new year is a popular time to commit to financial goals. Ascent research from late 2023 found that two-thirds of Americans planned to make financial resolutions for the new year. And among those, certain popular goals stood out.

The most popular resolution in the aforementioned survey was paying off debt, with 22% of respondents having that goal. Another 16% were looking to save for a big milestone, like buying a home, while 8% were intent on building an emergency fund.

All of these goals are important, and they all have value. But you may want to prioritize another financial move in 2024: getting life insurance.

The most essential thing you can do for your loved ones

Many of the financial goals you may have in mind could do great things for the people you love. If you pay off existing debts, for example, you’ll free up more money you can then use to spend on your family (think fun vacations and the like). And if you can save up for something like buying a new home, well, that gives your loved ones a place to live.

Building an emergency fund is also important. That way, you know you’ll have money in the bank to cover surprise expenses or essential bills if you’re laid off at work. That protection trickles down to the people who depend on you financially.

But while it’s easy to see why you might prioritize things like paying off debt or building emergency savings, you may want to bump buying life insurance to the top of your list this year. The reason? Without life insurance, your loved ones might really suffer financially in your absence.

Imagine if you were to lose your job and you have no emergency savings. At that point, you and your family could be left in a serious lurch for a few months until you’re able to find work.

But what if you were to pass away and leave behind a non-working spouse and two children? At that point, they might get stuck in a seriously bad place for years, not a few months, in the absence of some sort of financial lifeline. So that’s reason enough to put a life insurance policy in place.

Life insurance may be more affordable than expected

When you’re trying to save up an emergency fund or home down payment, parting with money for other expenses can be tough. But it’s worth spending however much money you need to put adequate life insurance coverage in place.

The good news, though, is that you might end up spending less money than anticipated on a life insurance policy, especially if you’re in good health and opt for term life insurance instead of whole life, which is usually far more expensive. Forbes Advisor finds that on average, a 30-year-old male will pay $13 a month for a 20-year, $250,000 term life insurance policy. For a 30-year-old female, the same coverage averages $12 a month.

Of course, this isn’t to say that this is what life insurance will cost you. It’s definitely a good idea to shop around with different insurers and compare quotes.

But all told, you may find a term life insurance policy to be something you can swing financially even as you work toward other important goals. And remember, the younger you are when you apply, the lower your premiums are likely to be, which is all the more reason to prioritize a life insurance purchase this year.

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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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