Money Management

Driving safely is a smart financial move. Discover how much you could save on car insurance with a clean driving record. 

A clean driving record is one sign that you’re a safe driver. Since car insurance companies value that, drivers with clean records enjoy much lower premiums. Want to find out just how much it can save you? Here’s the latest data, as well as how to clean up your driving record to get better rates.

How much a clean driving record saves you

Drivers with a clean record pay an average premium of $2,706 per year. That’s according to research on how driving records impact car insurance rates by The Motley Fool Ascent.

The overall average is $3,017. A clean record saves you $311 per year (10.3%) compared to the average cost of car insurance.

Savings get even bigger if you compare shopping for insurance with a clean driving record compared to doing so with an accident or driving under the influence (DUI). Here’s how much auto insurance costs with negative items on your driving record, and how much a clean record would save you:

The average premium with an accident is $3,284. A clean record saves you $578 (17.6%).The average premium with a DUI is $4,282. A clean record saves you $1,576 (36.8%).The average premium with a speeding ticket is $2,958. A clean record saves you $252 (8.5%).

Keep in mind that these are averages for the entire country. They all vary by state. Some states punish drivers with accidents, DUIs, and speeding tickets much more than others.

Michigan, which has the highest auto insurance rates in the nation, is a good example. Drivers with clean records pay an average annual premium of $4,664. That goes all the way up to $6,156 with an accident and $11,163 with a DUI.

What’s a clean driving record?

A clean driving record doesn’t have any negative items on it, such as traffic violations or accidents. In most states, driving records only cover a specific period. It generally ranges from the last three to 10 years, depending on the state.

Violations don’t stick around forever. After a certain amount of time has passed, they fall off your record. The amount of time it takes depends on the laws in your state and the type of violation. More severe violations, such as DUIs and reckless driving, stay on your record longer.

How to improve your driving record

If you don’t have a clean driving record, it may be possible to improve it. This is more likely with minor violations and errors that shouldn’t be on your record. With serious violations, you’ll need to wait for them to fall off.

Here’s what to do if you’re hoping to clean up your driving record:

Request your driving record from your state’s department of motor vehicles (DMV). You need to know what’s on your record to see if you can improve it. Fortunately, many state DMVs now let you get yours online. There’s normally a small fee.Enroll in a defensive driving course. You may be able to get minor infractions removed by completing one of these courses. Check with your state’s DMV to see if it allows you to remove infractions this way. Some carriers also offer car insurance discounts for finishing a defensive driving course.Ask if you can get a deferment. If you recently received a traffic violation, deferring it could be an option. You pay a small fee to keep the violation off your record for the deferment period. If you avoid violations during the deferment period, then the original violation stays off your driving record.Check for and dispute errors. Mistakes happen. See if there are violations that should’ve come off your driving record by now or that you don’t recognize. If so, you can dispute them with the DMV.

Considering how much a clean record saves you on insurance, it’s in your best interest to be a defensive driver. It’s sometimes possible to clean up your driving record. But it’s easier to avoid trouble in the first place.

If you’re able to clean up your driving record, make sure to go rate shopping and get new car insurance quotes. This is a good habit to get into at least once a year anyway. It’s especially important after cleaning up your record, because you could score much lower rates.

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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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Racked up holiday debt? Take a look at your game plan for getting rid of it. 

If you’re coming away from the 2023 holiday season with a mountain of credit card debt, you’re not alone. Each year, an estimated one-third of U.S. adults go into debt to pay for holiday expenses, according to NPR.

The problem with holiday debt, though, is that the longer it lingers, the more it might cost you. So it’s in your best interest to knock out that debt as quickly as possible. And you can do so by taking these steps.

Step 1: Consolidate

Juggling balances on different credit cards can be tough. You might forget to make a monthly payment on one of your cards, and keeping tabs on multiple balances can get overwhelming.

That’s why it pays to look at consolidating your debt. Doing so could make it not only more manageable, but potentially less expensive.

One option to consider is a balance transfer to a 0% interest rate credit card. If you can avoid racking up additional interest for a period, you might manage to get ahead of your debt. However, be warned that once your introductory period ends, the rate on your debt could skyrocket.

READ MORE: How Does a Balance Transfer Work?

Another option you can look at is a personal loan. The nice thing about personal loans is that they offer the benefit of fixed interest rates and predictable monthly payments until your balance is paid off in full. Plus, if your credit score is in good shape, you might manage to qualify for a competitive interest rate on a personal loan.

Step 2: Cut some spending

Consolidated debt still needs to be paid off. And in the case of a credit card with a 0% interest rate for a limited time, you may be up against a clock.

Take a look at your current set of expenses and see where there’s room to cut back. You don’t need to commit to permanent cuts. Rather, you just have to free up enough cash to pay off your debt. Once that’s done, you can go back to spending on more of the things you love.

Step 3: Boost your income

Unless you’re making drastic changes to your spending, it might take a big jump in income to be able to pay off your holiday debt quickly. It pays to explore your options for joining the gig economy.

Think about your schedule and how much flexibility you need. If you can’t commit to a preset gig on evenings and weekends, then doing something like grocery delivery may be a good option. If you can commit to a more fixed schedule, then you could do anything from working at a catering hall on weekends to taking on a retail position.

You may also be able to find a side hustle based on the things you love. If you adore animals, consider making a profile on a site like Rover so you can find clients in need of services like pet-sitting and dog walks.

You don’t want holiday debt to drag on for months (or years) on end. Follow these steps to rid yourself of that debt before 2024 comes to an end.

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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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Many people worry about their finances. Check out some steps you can take to help get financial anxieties under control. 

The latest data shows 84% of Americans are worried about the economy. And some feel more financial anxiety than others. Among Gen Z, 39% rate themselves as “very” or “extremely” stressed about making the wrong choices with their personal finances, according to Ernst & Young.

Here’s what financial anxiety looks like for some people and what you can do if your finances feel too overwhelming.

What is financial anxiety?

Financial anxiety can be any stress or worry related to your financial situation. It may be brought on by a specific situation or the combination of multiple pressures.

Some situations that cause financial anxiety are:

Losing your jobAccumulating too much debtReceiving a pay cutMounting bills or other expensesGeneral worry about the economy

While most people experience some sort of financial stress at some point, financial anxiety may be persistent for others.

Some people deal with stress by overspending or completely ignoring their financial situation.

No matter how you might deal with the anxiety, the good news is that there are ways to improve your situation.

How you can manage your financial anxiety

Half of all adults who are in debt have felt financial anxiety, according to WebMD. And while everyone’s situation is different, you can take some common actions if you’re feeling financially overwhelmed.

Here are some suggestions from the UK’s National Health Service and WebMD:

Stay physically active and spend time with friends and family to help your mental healthGet advice on how to pay off your debtTalk with experts to determine what’s causing your financial stressDevise a budgetBuild an emergency fundCreate a strategy with a financial planner

How to take the first step

Once you’ve determined the source of your financial anxiety, the first step is figuring out what you can do to help improve it.

For example, if you’re worried that you don’t have any money saved for a rainy day, then opening a savings account and building your emergency fund may be the first step.

Or, if you’ve accumulated too much debt, your first step may be to devise a debt payoff plan. For example, using the debt snowball method to pay off your smallest debts first and working up to your largest debts may be a good strategy.

Some people may feel more in control of their finances using a financial literacy app. These apps help you learn financial skills and money management. Topics include debt, saving money, and investing.

And finally, talking to a financial planner can be a great first step for anyone worried about their finances. A financial expert can help you find the best debt payoff strategy, learn the benefits of budgeting, and how to invest your money.

A great place to start is at the National Association of Personal Financial Planners (NAPFA), where you can search for a financial planner that fits your needs. Financial planners can help you understand your situation and make a plan to cope, so you don’t have to figure everything out alone.

Personal finances can be stressful for many of us, but taking steps to get them under control could go a long way toward alleviating financial anxiety.

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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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There are all kinds of places you can put your money. Learn about the best options according to popular financial experts. 

If you’re able to save money, you’ve already taken a big step toward financial success. The next step is figuring out what to do with it.

You have lots of options available, including bank accounts, investments, and paying off debt. Choosing the right ones will depend on your current situation and goals. To give you some ideas, here’s advice from three financial experts on where to put your money.

1. Ramit Sethi: Investments, savings goals, and guilt-free spending

Ramit Sethi is the author of I Will Teach You to Be Rich. It’s a big promise, but he has the advice to back it up.

In terms of where to put your money, Sethi takes a balanced approach. He recommends people follow his conscious spending plan to decide how they want to divide up their income. He says to aim for spending no more than 50% to 60% of your take-home pay on fixed costs, meaning your regular bills. Here’s what he recommends for the rest of your money:

Put 10% in investments. This includes any type of investment account you have: brokerage accounts, a 401(k) plan, and individual retirement accounts (IRAs).Put 5% to 10% toward savings. This includes short-, mid-, and long-term savings goals. You could put money toward any savings goals you have, but common examples include an emergency fund, vacation fund, and a down payment on a home. Use a high-yield savings account with a competitive interest rate.Put 20% to 35% toward guilt-free spending. This is absolutely anything you want, whether that’s a spa day, a designer bag, or going out to restaurants every weekend.

2. Warren Buffett: An S&P 500 index fund

Warren Buffett doesn’t need an introduction; the legendary investor is currently worth $119.2 billion. So, you could do a lot worse for advice on managing money.

He has also consistently pointed out that investing doesn’t need to be complicated. Here’s his advice on how to invest: “Consistently buy an S&P 500 low-cost index fund. Continue buying it through thick and thin, and especially through thin.”

The S&P 500 is an index with 500 of the U.S. stock market’s largest companies. Its returns can vary from year to year. That’s normal with the stock market. But historically, over long periods, it has averaged a 10% yearly return. You can find S&P 500 index funds with just about all the good online stock brokers.

3. Erin Lowry: An emergency fund, debt, and a Roth IRA

Erin Lowry is the author of Broke Millennial. Even though millennials are her target audience, she provides personal finance advice that can benefit anyone.

Lowry recommends that everyone starts with their emergency fund. As she puts it, “You should build an emergency savings fund regardless of your debt burden.” Without this, you’ll need to go into debt for any unexpected emergency. A common rule of thumb with emergency funds is to save enough to cover three to six months of living expenses.

Once you have $1,000 to $1,500 in emergency savings, Lowry says you can start focusing more on paying down debt. So, if you have debt, you can divide your money between that and continuing to build your emergency savings.

Another helpful tip from Lowry is to invest through a retirement account as soon as you can. She recommends Roth IRAs, which let you make tax-free withdrawals in retirement. But if you have a high income now, you may prefer traditional IRAs. Contributions to those are tax-deductible.

Finding the right places to put your money

If you’re starting out with debt and no emergency savings, Lowry’s advice is excellent. Start with $1,000 to $1,500 in emergency savings. Then, focus on paying down debt and saving for your emergency fund.

Sethi’s method of dividing your income between fixed costs, investments, savings, and guilt-free spending is smart, too. It’s simple, it’s easy to follow, and it covers all the bases.

You also need to know what to invest in. While you have no shortage of options, there’s a reason Buffett always recommends S&P 500 index funds. If you put your money there, and keep it there long term, you’re probably going to do well.

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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.Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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