Money Management

Car insurance is pricey, but there are ways to keep costs down. Here are three things drivers can do to find the best rates now. 

The average car insurance premium in the United States is $2,389 in 2023 — and that’s for good drivers. Add in accidents, speeding tickets, or DUIs and things get a lot more expensive quickly. It’s enough to make some drivers get rid of their cars altogether.

But even then, drivers still need insurance unless they never plan to get behind the wheel of a car again. So it’s important to know how to score the best cheap car insurance. Here are three tips to help drivers get the most coverage at the lowest price.

1. Shop around

Yes, I know it’s cliche advice. But it’s repeated for a reason. Every insurance company has its own proprietary system for assessing risk. They all look at the same factors, more or less, but they weigh these factors differently. That’s why different companies often give the same driver vastly different rates.

The only way to know how much different companies will charge a specific driver is to get quotes from them to compare. Fortunately, most auto insurers make that pretty easy. Online quote tools can give drivers a price estimate in minutes after answering a few questions about the driver and the vehicle. Most sites enable you to save quotes as well so it’s easy to return to them later.

It’s best to get quotes from at least three to five car insurance companies before settling on one, to get a sense of which offers the best deal. Pay attention not only to the premium cost but also to the amount of coverage available for that price.

2. Look for discounts

Most auto insurers automatically apply discounts to a driver’s premium during the quote process. But there are a few exceptions. Many companies now offer driver monitoring programs, for example, but they cannot force drivers to participate. Not everyone wants to, because they’re not comfortable being tracked. But for drivers who don’t mind, this is a great way to save because there’s usually an upfront discount just for enrolling.

It’s important to recognize that qualifying for more discounts with one insurer doesn’t always correlate to a lower rate. However, it doesn’t hurt to check. Those who believe they’ll qualify for special discounts, like savings for electric vehicles or military service, might do better by seeking out insurers who reward drivers with these factors.

3. Choose a higher deductible

Going with a higher deductible reduces insurance premium costs, sometimes significantly. Most insurance companies give drivers a choice between several deductibles, which they can adjust once they get their quote. Changing this will enable them to see the change in premium costs in real time.

Choosing a higher deductible means a driver will have higher out-of-pocket costs in the event of an accident. But this might not be a concern for those who can save up for the deductible in their emergency fund.

Even following the above steps, it might be tough to find affordable auto insurance right now, especially for drivers with negative marks on their records. In that case, it might be necessary to reduce coverage temporarily. But keep shopping around every few months to see what’s out there. Eventually, those dings on your record will fall off and that will open the door to better rates.

Our best car insurance companies for 2022

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 

The start of a new year is a great time to start building new habits. Find out how this writer plans to fund some significant life changes. 

It’s fair to say my 2023 was full of upheavals. I started the year with what seemed like some reasonable financial plans. But, you know what they say about the best laid plans. A combination of health issues, unexpected home repairs, and a broken relationship sent everything off kilter.

That’s OK. We all have days or months or years where things don’t work out. The trick is to learn what lessons we can and then focus on what’s next. As I approach 2024, not only do I need to get back on track financially, I also need to pay for the life changes I want to make. Here are the steps I’ve taken to prepare.

1. I took stock of my finances

My first step in approaching 2024 was to sit down and re-evaluate my budget. I went back through recent bank statements and mapped out all my spending in various categories — even the impulse spending I’d rather not admit to. I use a spreadsheet, but you can use a budgeting app if you prefer.

It took a couple of hours. When I was done, I had a clear picture of:

How much I’d earnedHow much I’d spent (and what I spent it on)What I had in savings and in my emergency fundWhat I had in my retirement/investment accounts

Key takeaway:

It can be difficult to take an honest look at your personal finances, but the knowledge will give you a solid basis to plan and make changes. I didn’t rework my budget when things started to go awry and didn’t curb my spending enough as a result. That meant I dipped into my savings and fell behind with my retirement contributions. Don’t wait for external milestones like the start of a new year — treat your budget as a flexible tool that needs regular adjustments.

2. I worked out what my goals will cost

Next, I wrote down each goal and mapped out what it would cost. Whether it is taking a vacation, buying a new car, learning a new skill, or paying down debt, get it all down on paper.

For example, my goals in 2024 include:

Buying my former partner’s half of our home: Without getting bogged down in the details, I will have to borrow money. My budget helped me work out how much I could afford to pay each month, which makes it easier when comparing rates and shopping for the right loan.Paying to do a financial planning qualification: This is a fixed cost I’ve been saving for, but the chaos of my 2023 meant I didn’t put aside quite enough. I am reluctant to delay the course. Instead I’ll pay for each segment individually rather than one lump sum.Replenishing my emergency fund: I want to have an emergency fund with six months’ worth of living expenses. I had some big unexpected costs last year, so the sooner I can restock my savings account, the better.Getting my retirement savings back on track: I’d love to put extra money into my brokerage account next year to make up for my missed contributions this year. Sadly, that isn’t realistic. With all the other costs, I’ll aim to make regular contributions in 2024 and try to catch up in 2025.

Key takeaway:

If you set goals without working out how you’ll pay for them, it will be very hard to make them happen. Assign dollar amounts and dates for each goal. If you can’t see how it will fit into your budget, you may have to delay some of your ambitions or find a different way to fund them.

3. I worked out how I’ll fund it all

The goals set out above will cost me about $1,300 in extra spending each month. It is a lot, but it isn’t impossible. I plan to cover that with a mix of spending cuts and increases to my income.

I’ll cut my spending

Looking at my budget, I can get my spending down by $400 per month, potentially more if I commit to a very frugal year. For example:

I will reduce my grocery costs by cutting back on meat, using more budget stores, and batch cooking.I will halve my take out and dining expenses. This is my biggest area of overspending and a change in habits will generate big savings.I’ve canceled a number of subscriptions and will curb my internet spending.

The thing about spending is that there’s only so much you can cut. I’m going to need to find ways to bring in more cash if I want to cover the remaining shortfall.

Consider a side hustle

The common advice at this point is to take a side hustle or work extra hours. I’m a freelancer and there are a few ways I can take on more work. However, there’s a limit to how much I can do, especially as I also want to study. I plan to increase my income by $500 a month by working on Saturday mornings.

Passive income

Truly passive income is very hard to come by, no matter what the internet tells you. For example, people talk about writing e-books or creating courses. Both of those involve a lot of work to set up, as well as ongoing effort to market.

What I plan to do instead is to rent out a room in my house. There’s still time involved: I’ll need to look after the tenants and take on extra cleaning and landlady responsibilities. All the same, it is the most achievable way I can bring in the money I need.

Key takeaway:

Cutting your spending and/or increasing your income can help you finance your goals. Either way, try to be realistic. It’s all very well to think you can stay in every night and eat only rice and beans to save money, but that isn’t sustainable.

Similarly, if you want to earn more through a side hustle or so-called passive income, think about how much time will be involved. All of us are capable of incredible things, but we’re not superheroes and there are only so many hours any of us can work productively each day.

Keep it manageable

I put a lot of my plans on hold in 2023 and am ready for big changes next year. By breaking it down into achievable steps and figuring out how I’ll fund each bit, it feels achievable. Even so, I know things probably won’t all go according to plan. I’ve already set a calendar reminder for a monthly check in with my budget. Not only that, but I also plan to sweeten the chore by doing it with ice cream.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

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 

Want to give your savings a giant lift in the new year? Read on for an easy way to make that happen. 

It’s hard to believe that 2023 is rapidly winding down. But pretty soon, you’ll be toasting to the new year and gearing up to tackle 2024 in full force.

You might have some pretty aggressive savings goals for 2024. Maybe you want to sock away another $10,000 for a down payment to buy a home. Maybe your car has seen better days, but you don’t want to finance one while auto loan rates are so high — so you’re trying to save another $15,000 to buy a vehicle outright.

No matter what your savings goals look like, though, there’s one easy step you can take now to make them more attainable. And it’s a move worth making if you’ve struggled to meet your savings goals in the past.

It’s all about automation

When many people try to save more money, they often tell themselves, “Well, I’ll try to minimize my spending during the month so I’m able to move more money into my savings at the end of the month.”

That doesn’t always work out so well. You might have every intention of consistently saving $250 a month. But if you’re pressured into going to a concert where tickets cost $200, suddenly, there goes the bulk of your savings that month.

That’s why a better bet is really to transfer the money you want to put into savings at the start of the month, before you get a chance to spend it. To put it another way, instead of spending your money and then hoping there’s enough left for your savings at the end of the month, save that money from the start and force yourself to make the most of whatever sum you have left.

Even more importantly, set up an automatic transfer in the coming weeks so that beginning in January, money moves out of your checking account and into your savings account off the bat. That way, forgetting to make a transfer won’t come into play.

Figure out what you can afford

Automating your savings is a good idea in theory. But you can’t leave yourself with inadequate funds to pay your essential bills.

Let’s say you bring home $2,500 a month and absolutely need $2,200 of that to pay your essential expenses. You might really want to save $500 a month in 2024. But it wouldn’t be smart to set up an automatic transfer of $500 at the start of each month knowing that’s going to leave you short. Instead, the maximum amount you should move over automatically is the sum that represents your non-essential expenses — things like leisure spending.

Set yourself up to meet your savings goals

Many people have big goals for 2024. A good 41% of Americans, for example, are aiming to buy a home in the new year, according to Architectural Digest.

Automating your savings is a great way to make your goal happen. But go about the process carefully. You won’t be doing yourself any favors if you keep sending money into your savings only to have to claw it back when you realize you’ve transferred too much and now can’t make rent.

These savings accounts are FDIC insured and could earn you 11x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you 11x the national average savings account rate. Click here to uncover the best-in-class picks that landed a spot on our shortlist of the best savings accounts for 2023.

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 

Hoping to buy in the new year? Read on for some important moves that could help make that happen. 

Buying a home in 2024 may not be such an easy thing. As of late October, there was only a 3.6-month supply of available homes, per the National Association of Realtors. And it can commonly take up to a six-month supply of homes to meet buyer demand in full. As such, those looking to purchase a home in 2024 may be grappling with sluggish inventory. And when inventory is low, it tends to lead to higher home prices.

Plus, mortgages aren’t exactly inexpensive these days. Mortgage lenders are no longer offering up the record-low rates buyers saw in 2020 and 2021. As of early December, the typical 30-year mortgage rate was still above 7%.

If your goal is to become a homeowner in 2024, it might take some careful planning. But if you take these steps in the coming weeks, you may find that you’re able to make that dream a reality.

1. Assess your savings

It’s important to buy a home you can afford comfortably, because taking on too much house could mean struggling financially and, in an extreme situation, running the risk of losing that home. If you want to buy a home in 2024, now’s a good time to assess how much is in your savings account and see what down payment you can afford to make.

Keep in mind, though, that you don’t want to empty your bank account for a down payment. Not even close. You’ll need to leave yourself with ample cash reserves for things like moving costs, repairs, and home-related emergencies.

In fact, what you should really aim to do is leave yourself with enough money in savings to cover three months of essential bills on top of the cost of hiring movers and making repairs. So if you’re sitting on $40,000 in savings, don’t assume you have the leeway to make a $40,000 down payment. You may only be in a position to make a $20,000 down payment.

2. Check up on your credit

The stronger your credit, the more likely you are to not only get approved for a mortgage, but snag a more competitive interest rate on one. At a time when it’s expensive to borrow, that’s important.

Another thing to do ahead of your home search is pull up a free copy of your credit report at AnnualCreditReport.com and review it for errors. You’ll want to work on correcting mistakes before you’re on the cusp of submitting a mortgage application.

In conjunction with checking your credit report, also see what your credit score looks like. Your credit report itself may not give that information. However, these days, it’s common for banks and credit card issuers to give consumers access to that number. If you learn your credit score and see that it needs a lift, you’ll know to spend a few months working on that before diving into your home search.

3. Research home prices in your area

You may have your heart set on moving to a specific neighborhood. But if the typical home price there is $400,000 and you know there’s no way you can go above $300,000, you’ll need to shift gears.

You’re better off learning that now than waiting until the new year. So spend a little time looking at listings. If the numbers in your preferred neighborhood don’t work for you, you’ll have more time to find other areas to move to.

4. Find a great real estate agent

Real estate agents are commonly a bit less busy in the winter than the spring and summer, since winter is a less popular time to buy and list a home. If you’re serious about becoming a homeowner in the new year, spend the next few weeks interviewing agents and try to narrow down your choices.

If you wait until spring, you may find that some of the more seasoned real estate agents in your area are booked solid or harder to reach. Plus, you never know when a great property might get listed during the winter, so having that help in place could make it possible to jump on opportunities as they arise.

Buying a home in 2024 probably won’t be a breeze. But if you make these moves now, you can potentially set yourself up for more success.

Our picks for the best credit cards

Our experts vetted the most popular offers to land on the select picks that are worthy of a spot in your wallet. These best-in-class cards pack in rich perks, such as big sign-up bonuses, long 0% intro APR offers, and robust rewards. Get started today with our recommended credit cards.

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 

Is an AAA membership worth the cost? You must pay a yearly fee for this roadside assistance coverage. One writer shares why she feels the cost is worthwhile. 

Many years ago, my husband received an AAA membership renewal as a yearly birthday gift from his parents. We used the membership a handful of times, and not having to pay the annual fee was a blessing at the time, as we had limited income to spend on extras.

When we moved abroad, we no longer had use for this service, so we canceled his membership. After returning home and restarting our lives in the United States, we started picking up the annual membership tab and became members again. Find out why.

1. It provides peace of mind

Accidents and emergencies can happen even if you’re a good driver and are prepared to handle unexpected situations while on the road. I continue to pay for an AAA membership because it provides peace of mind and gives us comfort, knowing that help is available when needed. Thanks to this coverage, my husband and I feel less anxiety when we’re behind the wheel.

2. One tow could cost me more than a yearly membership

Getting your car towed is not cheap. There is no set universal price, but factors like area, weather, and distance can impact how much you spend. With my membership, I can get towed for up to 100 miles four times yearly at no additional cost.

According to J.D. Power, the national average cost of a tow is $109. But you’ll likely pay much more if you’re being towed a great distance. A 40-mile tow could cost $125 to $275, and a 100-mile tow could cost as much as $600. At those rates, an unexpected tow could negatively impact your personal finances and leave you feeling broke.

AAA membership fees vary by location, plan and the number of drivers covered. I pay around $140 a year total for us both. Since my husband and I take road trips several times a year, there may come a time when we need to call a tow truck. Without this coverage, one incident could cost us more than our yearly AAA membership fee. So, it’s worth it to pay for AAA.

3. I save money on other expenses

As an AAA member, I get access to roadside assistance. But I also get exclusive discounts. This is one of the little-known perks of AAA. I’ve used my membership to get a better deal on hotel stays, for example. As a frequent traveler, I always seek the best deal possible.

In 2024, I hope to be more strategic in using my membership perks to save money on everyday costs beyond travel. AAA provides many savings opportunities. Members can even get a deal on auto insurance and homeowners insurance offered through AAA. Every bit of money saved adds up.

Is an AAA membership worth the cost?

You may wonder if an AAA membership is worth the cost. To me, it’s well worth it and I will continue to budget for this expense. Before joining, you should consider your driving habits, budget, and the benefits offered to determine if it’s a good fit for you. If you decide to join, check for new member rates, as AAA frequently offers discounts to attract new subscribers.

An alternative solution is to purchase roadside assistance another way. Many auto insurers offer this coverage for an affordable fee. But review the details before signing on to pay for it. When I compared the roadside assistance provided through my insurer, it wasn’t as comprehensive as AAA. Your insurer may have better roadside assistance options available at a reasonable rate.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

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