Money Management

Auto accidents can lead to expensive injuries. See why drivers who don’t have much insurance could be on the hook for out-of-pocket costs personally. 

Car accidents can be extremely expensive. In fact, according to the National Safety Council, the average economic costs of a fatal crash were close to $1.78 million, while the average costs associated with a disabling car accident were $155,000.

Despite these huge potential costs, drivers aren’t required to buy nearly that much insurance. In fact, depending on the state, drivers may be able to get away with having just $15,000 per person and $30,000 per incident in bodily injury liability coverage.

With such low auto insurance limits, it’s very possible a motorist could cause an accident and do much more damage than insurance will cover. The big question then is, what happens if a motorist causes an accident and is being sued for more than the insurance policy’s maximum limits?

Drivers could be sued personally for any extra losses insurance won’t cover

If a driver is sued for more than the limits of their liability insurance policy, their auto insurer will only cover legal fees and damages up to the amount required based on the policy terms. So a driver who caused $155,000 in disabling injuries to someone and who had $15,000 in bodily injury liability coverage would see their insurer pay just $15,000 — leaving $140,000 in uncompensated losses for the crash victims.

These losses don’t just go away, and in some cases, victims will decide to pursue a lawsuit against the at-fault driver personally. In other words, they will go to court and try to get a judgment that the driver would have to pay out of their own bank account. And, depending on the circumstances, courts could potentially enforce that judgment by ordering the at-fault driver’s wages be garnished (a portion of them is taken) or by putting a lien on the at-fault driver’s property (asserting an ownership claim to their home or other assets).

Because of the risk to personal assets, having only the minimum auto insurance coverage is a huge risk.

Be sure to buy the right auto insurance coverage

Drivers should think very carefully about whether they will end up regretting purchasing only minimum coverage insurance. It’s true that it is cheaper not to buy a ton of liability protection, but that’s only if nothing goes wrong.

Switching from a car insurance policy with a $10,000 per person and $20,000 per accident limit to a policy with a $250,000 per person and $500,000 per accident limit raises premiums by around $47 per month for a 40-year-old female SUV driver in Florida with a clean record purchasing coverage from a major insurer. That’s a significant bump, but it’s a lot less than getting stuck with a personal lawsuit that ends up costing tens or even hundreds of thousands or millions of dollars.

Being sued personally after an accident and not having enough insurance could be a really devastating, frightening experience, and the only way to prevent this from happening is to have the right insurance in place before this occurs. Drivers should review their policies today to make sure they aren’t at risk of huge losses if a crash occurs. Those who find they don’t have enough coverage to protect their assets may want to act quickly by increasing their insurance coverage ASAP.

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 

CD rates have surpassed a two-decade high. But will CDs help you reach your savings goals? Find out the hard truth of CDs here. 

If you’ve been in the hunt for a house or borrowed money on a loan or credit card in 2023, then high interest rates have likely frustrated you. On the contrary, if you entered 2023 with savings and no debt, this has likely been a fun, fun year to save money.

The Federal Reserve’s federal funds rate, which sets the pace for the savings rate offered by banks, has reached a range of 5.25% and 5.50%. Likewise, today’s top-paying CDs have hit a range of 5% to 5.7%. Many of these CDs have short terms, like six months, which reflects the expectation that the Fed will start lowering rates in the near future. But, if you have extra savings, these short-term CDs could offer you a high rate that you might not find next year.

However, before you start locking money up into CDs, it’s best to take a step back and ask if it’s the smartest place for your money. If you’re saving for something that’s still a year or so away, like a vacation, a short-term CD could give you a little extra. But for bigger goals, like saving for retirement, I hate to break it to you, but — CDs just aren’t going to cut it.

Why high-paying CDs might not be worth it

Truth is, for most Americans, earning 5% isn’t going to change their personal finances significantly. In fact, it could work against them. Locking your money up for a guaranteed rate of return could mean missing out on opportunities to generate more wealth, like potential gains in the stock market.

Hands down, stocks and funds offer investors greater upside potential. You don’t even need to be risky: an ETF that tracks the S&P 500 could be sufficient to out-earn a CD. The S&P 500 has already appreciated by roughly 19% this year — far more than what any 12-month CD could have earned.

The stock market does have risks, but for investors with long time horizons, the S&P 500’s worst days are often more than made up for with the good ones. All in all, the total return of the S&P 500 since 1928 is 9.7% (this includes reinvested dividends). Factoring in inflation, that percentage comes down to 6.5%, which is still higher than today’s top-paying CDs, and even higher if we factor in inflation for CD rates.

What a CD offers that the S&P 500 can’t

Of course, it’s difficult to depend on figures derived from annualized rates of return, as the S&P 500’s yearly performances can vary significantly. For example, the S&P 500 dropped about 18% in 2022, while it had gained almost 29% the previous year in 2021. If you had started investing in 2021, you might still be feeling the pain from the bear market last year.

This is where a CD derives its greatest perk. You’re getting a guaranteed rate of return. When you lock into a 5% APY on a 12-month CD, you know you’re earning 5% for 12 months, assuming you don’t break your contract and wind up paying an early withdrawal penalty. It’s not as lucrative as stocks and funds, but it’s also not as gut-wrenching either.

Additionally, many of today’s CD rates are above the rate of inflation. Even though you have to factor in taxes on your CD earnings, many CDs can prevent your money from losing value, something stocks can target but can’t guarantee.

All of this is to say — there’s greater opportunity outside of CDs. But, inside them, there’s more certainty. Reflect on what you want your savings to accomplish, but don’t be afraid to say “no” to security if what you really need is a long-term investment. Today’s CD rates compared to last year’s may seem like a great deal. But when compared with a long-term investment, like stocks or ETFs, they could be a loss in opportunity costs.

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 

Putting a little effort into some of these ideas could help boost your income. Read on to find out which ones have the most income-earning potential. 

While inflation is cooling, its impact has already done a lot of damage to people’s personal finances. According to the latest data from the U.S. Bureau of Labor Statistics (BLS), the average amount Americans spend on necessities each month is now $6,081 — an increase of $500 per month compared to 2021.

Higher costs for nearly everything have caused many people to use credit cards to cover everyday expenses. The result is that America’s collective credit card debt is now a record $1.08 trillion.

I mention all this because some people may think they’re the only ones who need extra cash right now. But they’re likely in the same boat as many Americans who are just trying to find a way to earn extra money and stretch their budgets. Here are five ideas to help you do just that.

1. Sign up for gig work

I know, this is always the recommendation when you read an article about earning extra money. But here’s the thing: You can make money from a side hustle.

At the beginning of this year, I signed up for Fiverr and created a few writing gigs on the platform. I signed up specifically for the company’s Fiverr Pro option, which allowed me to get paid more for the gigs I was completing. It hasn’t been perfect, but I’ve earned nearly $5,000 throughout the year from just a handful of steady clients.

You don’t have to be a writer to start a side hustle, there are platforms for gig workers for all sorts of skills.

2. Start a small business

This suggestion may seem overwhelming, but it doesn’t have to be. Sure, if you want to start a small business like a restaurant, you will need substantial capital to get started. But you can approach the process in simpler ways, like opening an online shop.

If you’re good at making jewelry, crafting, or creating things with your hands, then starting an Etsy shop may be a good way to make extra money. How much you make on the e-commerce site can vary depending on what you sell, but with 92 million active buyers on the site, there’s plenty of opportunity to find your niche.

3. Rent out your car

If you work from home or have a second vehicle that doesn’t get a lot of use, consider signing up for a car-sharing site like Turo to rent it out. Turo’s website says the car needs to be at most 12 years old and have less than 130,000 miles on it and, of course, you’ll need car insurance.

You’ll have to spend time keeping your car well-maintained and clean and scheduling the delivery of the vehicle to customers, but it could be the right gig to earn extra cash. Turo says the average annual income of one car listed on its site is $10,516.

4. Tutor students online

There’s no shortage of topics people want to learn more about, and some people are willing to pay good money to have you teach them. While teaching kids is the most common form of tutoring, many adults also need tutors for things like learning a new language.

You can find tutoring gigs on platforms, including Outschool and Wyzant, and many sites allow tutors to set their own hourly rates. Some tutors charge anywhere between $15 per hour and more than $100, depending on their experience level and the topic.

5. Sell digital products online

Many apps make it easy to create products like journals, notebooks, and digital artwork that you can sell online. You can design many of them in Canva or use Adobe’s Creative Cloud suite of apps and then sell the digital prints on Amazon or Etsy.

Some people choose to specialize in creating certain products and are seeing great results. For example, a recent CNBC report highlighted a teacher who creates worksheets for other educators and sells them through the Teachers Pay Teachers marketplace, earning her over $125,000 last year.

While you may not be able to quit your day job with some of these suggestions (unless you sell worksheets to teachers, apparently), trying out one or two of them could go a long way toward earning you additional income in 2024.

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 

When you get paid, it’s a good idea to make a few key moves. Keep reading to learn how to maximize payday. 

When you get paid, you’ll want to do something smart with the money deposited into your checking account. After all, you worked hard for those dollars and you want to make the most of them.

Fortunately, there are just two things you need to do to make sure you’re using your checking account funds wisely. Here’s what they are.

1. Make automatic bill payments

The first thing you should make sure to do on payday is set up automatic payments for your credit cards and other bills like your mortgage or rent and utilities. You can set this up through your bank’s mobile app, or with your creditors by asking them to automatically withdraw payments on the day you get paid.

Making automatic bill payments is important for two reasons. First, it can help to protect you against the damage a late payment can do. If you previously had great credit and made one card payment 30 or more days past due, this could drop your credit score by 110 points. Even those without perfect credit could see around a 60 to 80 point drop after being a month late. Card issuers could also charge late fees, which could be as high as $30 the first time you’re late and $41 if you fall behind two or more times.

There’s no reason to risk being late and making your future financial life more difficult, so setting up automatic bill payments just makes good sense.

Aside from not accidentally being late, automating your bill payments ensures that you’ll take care of the essentials first before spending extra money. It also takes the stress of remembering to manually make these payments off your plate.

2. Transfer some of your money into savings

The next step you should take is to transfer some of your money into savings on payday. You can arrange to have money moved automatically into a savings account, into a brokerage account, or both.

Ideally, you should be saving around 20% of your income, with some of that going toward retirement savings and some going toward saving for emergencies or large purchases. You can figure out the specifics of exactly how much you should be saving for retirement and other goals by using online calculators like the one at Investor.gov that tells you exactly how much you’ll need to put aside monthly to accomplish your savings goals.

If you set up an automatic transfer of money to your brokerage account and to savings accounts for each goal you have, you’ll make sure that this money is prioritized before doing anything else with your paycheck.

Once you’ve paid the bills and set aside money for savings, you can spend the rest of the money in your checking account without worrying about whether you’re doing the right things with it. Brokerage accounts and savings accounts make setting up automatic transfers easy, so get started with that today. Even if you’re not able to carve out as much to save as you want, you can still put something into these accounts for your future and then slowly work up to your goals.

If your money goes directly where it needs to after hitting your bank on paydays, you are much more likely to find financial success. This is because saving for the future and paying your bills on time will become your new status quo. Give this approach a try for a few months and see if it makes a positive impact in your ability to accomplish your important money goals.

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 

Walmart has some great gifts for men, including a Hillshire Farms meat and cheese trio as well as gifts for golfers and grillers. Read on for some fun options 

Shopping for the holidays is a great opportunity to get meaningful gifts for those you love — but picking out the perfect present isn’t easy. The good news is, if you want to get an awesome gift for the man in your life without ending up in credit card debt to do it, Walmart has tons of great options.

Not sure where to start? Here are four gifts that won’t empty your checking account and that are sure to be enjoyed all year long.

1. An Expert Grill Stainless Steel Soft Grip BBQ Grill Tool Set, 10 Pieces

This 10-piece set comes with tongs, a long fork, a spatula, a basting brush, four skewers, a grill cleaning brush, and a case to hold it all. It’s perfect for the man who takes his grilling responsibilities seriously, and the 4.8 stars the product received in its 780-plus reviews show that the tools really get the job done right.

At just $18.88, this set is a true bargain, especially when you realize that competitors like Amazon sell a similar model (albeit with a hard case) for three times the cost.

2. Hillshire Farm Meat and Cheese Trio Assortment Boxed Holiday Gift Set

If you’re buying for a man who’d rather just enjoy eating some tasty meats instead of cooking them up on the grill, pick up this Hillshire Farm Meat and Cheese Trio for $19.98.

It comes with three summer sausage logs, Swiss and cheddar cheese, and wheat crackers that reviewers have described as “yummy” and bigger than expected — which is good, as maybe if you get lucky the gift recipient will share.

3. Upgraded Wireless Charging Station

For the man with tons of tech in his life, a wireless charging station with a slot for a phone, watch, and airpods can really streamline things and help eliminate that mess of cables that has become so common.

For just $19.99, this wireless charging station is a great bargain — especially as it works with Apple Watch Series models 2 through 8 and SE, as well as iPhone models 11 to 15, AirPods, and Pro, XS, XR, and Samsung devices. It’s a much better price than the $39.99 similar models sell for elsewhere.

4. SAPLIZE Innovative Noise-reducing Golf Practice Net

Practice makes perfect when it comes to golfing, so any man who likes to hit the links will love this high-impact golf practice net that comes with both tees and balls. It’s 10 feet by 7 feet, so it’s large enough to serve its purpose without overwhelming a suburban backyard. And its innovative nylon design means that practice will be quiet enough so as not to disturb the neighbors. It’s also on sale for $79.99, down from its regular price of $109.99.

Each of these gift options can be great ones, depending on the interests of the men you are buying for. Just remember, though, that you don’t want to blow your budget, so be sure to consider all of your options, set spending limits, and stick to them. You’ll get much more joy out of giving holiday gifts when you don’t have to worry about big credit card bills coming due once the festive season is over.

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.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Apple, and Walmart. The Motley Fool has a disclosure policy.

 Read More