Money Management

Ridesharing is one of the most popular side hustles, but it can be costly. Here are five unexpected expenses you need to prepare for. 

When most of us think of side hustles, ridesharing is probably one of the first to come to mind. It can be a great gig — flexible hours, no need to market yourself or find an existing client base — but it also has its challenges.

Below, we’ll look at five financial challenges new rideshare drivers face and how you can overcome them.

1. Vehicle costs

Rideshare companies typically have strict rules about the types of vehicles you can use when working as a rideshare driver. Some of these rules, like ensuring the vehicle has seat belts, are pretty understandable. Others, like ensuring the car has no visible cosmetic damage, might seem unnecessary. But when you’re working for a ridesharing platform, you have to follow its rules.

If you don’t have a vehicle that adheres to current guidelines, you may have to pay to make repairs to yours or even purchase a new vehicle. This can cost a lot of money upfront. If you don’t have enough cash, ridesharing may not be the best side hustle for you right now.

Be sure to review all driver and vehicle requirements for the ridesharing platforms you plan to work for so you don’t run into any problems. If you have any questions, reach out to the company for more information.

2. Fuel costs

This may not qualify as “unexpected” since you probably know that if you’re going to be driving more, you’ll also be spending more on gas. But it’s important not to underestimate these costs when calculating how much you think you’ll make from a ridesharing side hustle.

It’s a little difficult to predict because gas prices vary by location and over time. But try to estimate how much you think you’ll spend based on how many hours you plan to spend ridesharing. Then, decide whether your profits are still worth it to you.

If you decide to go forward with ridesharing, be sure to keep track of how often you drive for the ridesharing provider and hold onto your gas station receipts. You can write off these costs as a business expense on your taxes.

3. Maintenance costs

More miles driven means more wear and tear on your vehicle, and sooner or later, it’s going to need maintenance. And remember those vehicle rules we talked about above? Those still apply, even after you’ve been driving for the company for a while.

If your car starts rusting because you’ve been driving it around a lot more, you can’t just let that go. You need to get it fixed so you’re not in violation of the platform’s rules, or else the company could suspend you.

And it goes without saying that if something happens that makes your vehicle impossible to drive, you won’t be able to work as a rideshare driver until it’s fixed. And you won’t be able to use your car for personal activities either.

Maintenance costs are virtually impossible to predict, so the best thing you can do is save for them in an emergency fund. Keep this cash on hand so you can quickly address vehicle problems as they arise without taking on debt.

4. Insurance costs

Your regular auto insurance policy won’t be enough when you start working as a rideshare driver. You need a special policy that covers ridesharing if you want your insurer to cover accidents while you’re working.

Fortunately, most of the big-name auto insurers offer some sort of ridesharing protection. But you usually have to pay extra for this. This will raise your insurance costs every year you work as a rideshare driver. But shopping around before you purchase a policy can help you pay as little as possible.

5. Taxes

When you work a traditional job, you don’t have to worry about taxes that much until it comes time to file your return. But they’re more of an ever-present concern when you have a side hustle like ridesharing. You’re considered self-employed, so you have to pay estimated taxes throughout the year — in April, June, September, and January of the following year.

Those with regular jobs may not have to worry about this as much as someone who gets most of their income from self-employment. If you believe you’d get a tax refund from your regular job, that extra might be enough to offset what you owe in taxes from ridesharing. But if you don’t pay enough throughout the year, you could face penalties.

Paying quarterly estimated taxes is the safer bet if you’re worried about owing the government. You can use the worksheet in Form 1040-ES to calculate how much you should pay. Keep in mind, you could owe your state government as well.

None of this is intended to discourage you from working as a rideshare driver. It can be a great way for some people to earn extra cash. But like anything, it’s not a great idea to jump in without considering whether the possible benefits outweigh the costs. If any of the things discussed above worry you, you may want to consider other side hustles instead.

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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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Need some holiday gift inspiration for a special man? Keep reading for some top picks from Target. 

It’s really no surprise that Target is such a popular retailer. The store sells everything from groceries to electronics to clothing, and provides many ways to save money, including holiday shopping deals and a holiday price match guarantee. As such, Target should definitely be on your list of stores to check out this holiday shopping season. In particular, you can find lots of great picks for the special men in your life, be they dad, brother, spouse, or best friend.

Let’s take a look at some excellent men’s gift ideas available now on Target’s website, and possibly also at your local store (you can plug in your ZIP code to see).

1. Fujifilm Instax Mini 12 Camera

Gone are the days when the average person had to take camera film to be developed. Instead, most of us always have a camera on us in the form of our smartphones. But if you’ve got a man in your life who longs to take photos and receive a physical photograph to frame or give away, the Fujifilm Instax Mini 12 Camera has you covered. And as of this writing, it’s going for $79.99 online.

This camera is adorable and comes in a range of pastel colors (I’m partial to the mint green, personally). It takes instant 2 inch x 3 inch photos, a la that suburban classic, the Polaroid camera. Pair it with a gift card to cover the cost of those first film purchases for your favorite shutterbug.

2. Apple iPad 10.9″ with Wi-Fi (2022 model)

There’s something so good about a basic iPad — they’re user-friendly, fun, and make a particularly excellent diversion if you’re traveling and waiting around an airport. Right now, you can score the 2022 10.9″ iPad model with 256 GB of memory for $599.99. And yes, this is a pricey gift to be sure — but PC Magazine calls this iPad the best one for most people, and if you need a gift for your significant other, this could be a real winner.

This iPad comes with a wifi connection only, rather than working with a cellphone network. The charging port has been upgraded to USB-C, which means it charges fast. And it even works with the first-generation Apple Pencil.

3. Crockpot On-The-Go Personal Food Warmer

If the special man in your life works out of an office, this gift can spare him the long line to use the microwave at lunchtime. The Crockpot personal food warmer holds 20 ounces of canned soup, oatmeal, or even last night’s dinner leftovers, and you simply plug it in to reheat your food. It comes in four color choices, is dishwasher safe, and can be yours for $29.99 at the time of writing.

4. Keurig K-Mini Single-Serve Coffee Maker

Many things in life are made better with coffee, but why make a whole pot if you don’t need to? You can help your guy get his coffee faster and in a single serving with a Keurig K-Mini coffee maker.

Like the Crockpot above, you can also get this nifty little coffee maker in a range of fun colors, and for just $69.99 at the time of writing. It’s also compatible with the My K-Cup reusable coffee filter, which will help cut down on waste from discarded K-cups and also let your man brew any kind of coffee his heart desires.

5. Braun All-in-One Rechargeable Trimmer

No matter what hairstyle or facial hair your man is rocking, chances are good he could use some help keeping it neat and tidy between trips to the barbershop. This Braun All-in-One Body, Beard, & Hair Trimmer can help.

It’s rechargeable so he won’t have to be in range of an outlet to use it, and fully charged, it has a 100-minute runtime. It even comes with a zipper pouch to keep all the heads and accessories organized in one place, so you’re also giving the gift of a neater bathroom. Right now, it’s going for $59.99.

6. Mio Marino Bold Designer Dress Socks

Tired of seeing the same old dirty white crew socks on your man’s feet? Right now, you can upgrade his sock drawer with this 12-pack of Mio Marino Designer Dress Socks. These are so fun, and they come in three size ranges as well as three different pattern selections. Note that the socks are an online-only item, so you won’t find them in your local store. They’re available for $49.99 at the time of writing.

If any of these Target buys have caught your eye, I recommend moving sooner rather than later to ensure you can keep your credit card tab low and receive the item in time if you order online.

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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 positions in and recommends Apple and Target. The Motley Fool has a disclosure policy.

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Being unable to borrow money when you need to can put a serious dent in your finances. Learn how to avoid being denied credit in the future. 

According to the Federal Reserve, around 10% of Americans were denied credit in 2022. And, another 13% wanted to borrow but didn’t even bother to try applying because they thought they would be turned down if they did.

If you were one of them, you know how disappointing this is. After all, chances are good that you applied for a personal loan because you really needed the money or wanted it to accomplish something important to you. And not being able to get a credit card or otherwise borrow money could mean you end up without the credit profile necessary to buy a house or car or pay for purchases over time.

If you were among those Americans turned down by lenders, or if you fear you might be if you try to apply to borrow in the future, here’s what you should do.

1. Find out why your lender denied you

When you are denied credit, you are entitled to receive an “adverse action notice” if the denial was a result of information found in your credit report. Lenders typically send this within seven to 10 days of the time that you are turned down to borrow.

Take a close look at the denial to see what issues caused your lender not to provide you with the credit you requested. You can also check out the letter to get information like your credit score.

If you were denied because of a low credit score, check your credit report to see if there are errors on it or if there is legitimate negative information like late payments or delinquent accounts. You can get a copy of your credit report from each of the major credit reporting agencies for free by visiting AnnualCreditReport.com.

Understanding why you were denied is the first step in either appealing the decision with the creditor or trying to fix the situation so you can borrow in the future.

2. Work on improving your financial credentials

After identifying the reason for the credit denial, start working on whatever issues came up. For example, if your credit score was too low and a glance at your credit report shows you have a few missed payments, then you’ll want to focus on paying your cards and loans on time in the future.

If you’ve mostly paid on time but have one or two negative reports because of an accidental missed payment, you could also try contacting your creditor and asking if it will remove that negative info as a gesture of good will. This strategy will likely be more effective if you’ve been a good customer who usually pays on time and just slipped up once.

If there are errors on your report affecting your score, you can contact each of the three credit bureaus to have the mistakes removed. Just follow these basic instructions for removing incorrect info from your credit record.

On the other hand, if you were denied a loan because you have too much debt already or are using too much of your available credit, you’ll need to work on paying down what you owe before you can borrow more.

3. Research lenders who provide loans to people in your situation

Finally, if you still really need to borrow and you have to do it before you’ve had time to fix your credit record or debt history, you can research lenders that are likely to loan to you. For example, some lenders offer personal loans even to people with imperfect credit. Secured credit cards are also available to those with bad credit or no credit history (although you do need to put down a deposit equal to your credit limit).

When researching your options, look into the terms of the loan — especially the interest rate and upfront fees — and make sure you’re comfortable with the total costs before moving forward. Loans made to borrowers without great credit can sometimes be very expensive.

Ideally, you will be able to fix whatever the issue was that caused the credit denial by taking some of the steps mentioned above. Doing so will mean having your choice of lenders going forward and you won’t have to worry about not being approved for credit 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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You might be tempted by a checking account’s features. But learn why it’s best to avoid accounts that charge fees (even if they don’t apply to you now). 

If you are thinking about opening a bank account that charges a monthly maintenance fee, you need to be aware of the impact on your finances.

Now, many of these fees are structured so you can avoid them if you meet specific requirements, like directly depositing a set amount of money each month or maintaining a certain minimum balance. So, if the bank allows you to waive the fee and you can meet its qualifying requirements to avoid it, should you go ahead with opening the account? It might not be the best idea, for the reasons discussed below.

Fee waiver rules could change

One big reason you may not want to choose an account with a fee — even if you can likely get it waived — is that the rules could change. Say, for example, your bank starts out requiring you to maintain a $500 average daily balance in your checking account, but after a few years, it switches this requirement to a $1,500 average daily balance.

Sure, you could switch banks at that time — but doing so can be a lot of hassle. If you instead opened your account with a bank that doesn’t charge fees at all, you’d be less likely to face this problem and be forced to move your money elsewhere.

You may not always be able to meet the requirements

There could be another potential problem with trying to waive a bank fee. Your situation could change, leaving you unable to meet the requirements.

Say, for example, you get your fee waived because you get two direct deposits a month. But if you switch jobs and start to work for yourself and therefore no longer receive direct deposit paychecks, you’d no longer qualify for the fee waiver. You could switch banks, of course, but again, that can be a pain.

The requirements could limit your financial flexibility

If you have to directly deposit your money to avoid a fee, or keep a certain minimum balance in the account, this can impact your financial choices. For example, you might want to temporarily open a new bank account to get a new customer bonus — but might not be able to change your direct deposit to qualify for the bonus without getting hit with a fee by your current bank. Or you may want to transfer more money from your bank to your brokerage account, but be charged to do so because you’d be dropping below that minimum balance.

If you don’t want to be limited in your choices by your bank’s rules, steer clear of accounts that require you to fulfill requirements to avoid a fee.

You can avoid fees 100% by choosing a different bank

The good news is you have plenty of options if you don’t want a bank account that requires you to meet certain requirements to avoid a fee.

In fact, most consumers don’t end up getting hit with these kinds of bank charges. According to the Federal Reserve Bank of Boston, only around 2.3% of customers paid fees for having a low balance in 2021, and you don’t want to be one of them.

Instead, consider researching some of the best bank accounts available that don’t come with monthly fees — or even other situational fees like overdraft charges. Online banks often provide great opportunities to get fee-free checking, so look into your options today to see if there’s one that’s right for you.

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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.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Skipping a mortgage could save you money on interest, but there’s a drawback to going this route. Here’s what you need to consider when buying a home. 

Mortgage lenders don’t write the loans out of the goodness of their hearts. Rather, they write those loans to make money.

The higher the interest rate on your mortgage, the more your monthly payments will amount to — and the more money you’ll lose to interest in total through the years. So at a time like this, when mortgage rates are high, you may be tempted to pay cash for a home if you can swing it.

Going this route could save you a bundle. But that doesn’t automatically mean that buying a home in cash is the right choice.

How much can you save by paying cash for a home?

The average interest rate on a 30-year mortgage is 7.29%, as of this writing, according to Freddie Mac. And as of October, the median existing home sale price was $391,800, according to the National Association of Realtors.

So let’s say you have a choice. You could put down 20% on a $391,800 home and mortgage the rest at 7.29%, or you could pay cash for that home outright. (Of course, many of us are nowhere close to being in a position to plunk down almost $400,000 for a home outright. But remember, for the purpose of this discussion, we’re assuming that you, dear reader, are potentially in that boat.)

If you were to put down 20% and take out a $313,400 mortgage at 7.29% for 30 years, you’d have a monthly payment of $2,148 for principal and interest. You’d also be looking at — wait for it — an astounding $459,842 in interest over the life of your loan. That’s more than the purchase price of your home!

When you think about it that way, paying cash for a home sounds like a smart move. And it could be. But you’ll need to consider the drawback of buying a home in cash before parting with all that money.

Don’t leave yourself in the lurch

At a time when mortgage rates are high, paying cash for a home could result in a lot of savings. But unless you have a lot of cash at your disposal, buying a home outright can also be risky.

Unlike stocks you own in your brokerage account, homes are not a very liquid asset. This means it’s not so easy to quickly sell a home for money. It can take months for the transaction to go through. As such, when you pay cash for a home, you tie up a lot of money in a single asset that you might struggle to unload.

Imagine you have $400,000 in cash and you spend almost $392,000 of it on a home. If you need to cover a $15,000 roof repair a few months later, well, you can’t, because your money is tied up in your home.

Or, let’s say you have $500,000 in cash and spend about $392,000 to buy your home outright. That’s less risky. But what if your financial situation changes and you suddenly need access to more money than you have left?

Therein lies the danger of paying cash for a home. So while it may be tempting to do so to avoid losing loads of money to interest, do consider the repercussions. And if you are going to pay cash for a home, make sure to leave yourself with enough money to cover at least three full months of living expenses, plus a little extra for potential repairs.

Remember that you can refinance

The idea of paying almost $460,000 in interest on a $391,800 home might seem ridiculous. But remember, mortgages can be refinanced as borrowing rates drop. So if you’re someone who’s reading this piece out of curiosity knowing full well that paying cash for a home just isn’t in the cards for you, also know that you’re not necessarily doomed to spend a fortune in interest if you finance your home.

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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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