Money Management

Most kids know they have to be tactful and bring up requests at the right time. Read on to find out what kids can teach you about scoring a higher salary. 

Kids are the best negotiators. Think about it — they don’t have much power to influence the world around them to get what they want. So instead, they lean into their negotiating skills to convince adults to give them what they want, be it a delayed bedtime, a little more screen time, or pizza for dinner.

As my kids have gotten older, they’ve developed their negotiation skills even further, making logical arguments for why their dad may not entirely be correct in his thinking (I usually am, though).

This ability to gently persuade others can be applied to one of the most awkward types of negotiating many of us do — asking for a raise. Here’s how taking some negotiating tips from kids could improve your personal finances.

1. They wait for the right time

When my kids were younger, they would sometimes start making their birthday wishlist just one or two days after Christmas. They quickly learned that talking to Mom and Dad about more gifts after receiving plenty just days before wasn’t the best approach.

My kids are a little older now, and they’ve learned to be more patient, waiting for the right time to make their requests.

This same idea can be applied to asking for a raise. Even if the work you’ve done is worthy of a higher salary, blurting out your request at the wrong time could hurt your chances of getting it. Instead, suggest to your boss that you want to talk to them about your job and set up a time. Let them know what you want to discuss so they’re not caught off-guard when you make the request.

Also, consider the fact that most employers won’t give raises to workers who’ve been at their job for six months or less. You should also figure out when your company’s annual budget is set. You don’t want to ask for a raise a couple of weeks after the salary budgets have been decided for the upcoming fiscal year.

A little finesse in approaching the topic can show your boss that you respect their time and haven’t rushed into the request.

2. They come prepared

I sometimes hear my two sons discussing an upcoming request with each other in their room before they present it to me. I’ve always made a big effort to be approachable to my kids. Still, they’re naturally more cautious, so they prepare their arguments ahead of time and even decide who is the best person to make the request — which is often asking for more video game time.

In short, they come prepared. They know exactly what they want and the arguments for why it’s reasonable to make the request (e.g., it’s been days since they asked for additional video game time).

The same should be true for negotiating your salary. Your boss may or may not want to give you a raise, and even if they do, they might still need some solid reasons to justify using more money from the company budget to give to you.

To help convince them to up the amount deposited into your checking account, decide exactly what you’re asking for and have data to support your reasoning. Maybe you’ve taken on more responsibilities over the past few years without a bump in pay, or perhaps you manage a bigger team or have recently brought in large clients for your company.

Whatever your reasoning, prepare ahead of time to make your case.

3. They speak up

My kids have slowly learned this concept over time. I’ve tried to teach them that I can’t read their minds and that if there’s something they want, they can always come and ask for it.

While it may seem obvious to ask for a raise, you may be surprised to know that just 37% of workers in their current positions have asked for a raise, according to Payscale.

This can be harder for some people to do than others, so it’s worth considering what you might miss out on by not broaching the topic with your boss. Payscale says a staggering 70% of people who asked for a raise received one. So, the odds are very much in your favor.

My kids don’t get everything they want, but they get a lot by making their requests the right way. Most importantly, they’ve learned sitting quietly is the fastest way to not get what they want.

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Car insurance is not one size fits all. Keep reading to learn what types of coverage you need. 

Drivers need to buy car insurance. Most states require liability insurance, which pays for damage a policyholder causes others. But motorists typically need to go beyond just buying liability insurance in order to protect their assets and their bottom line.

In fact, there are four kinds of car insurance that everyone needs to understand so they can make an informed choice about whether buying additional coverage is the right financial decision.

1. Collision coverage

Collision coverage is insurance that would pay for a policyholder’s own damages. This is the policy that would pay out if:

The policyholder caused a crash they were at fault for and damaged their own carThe policyholder was involved in a single vehicle accidentThe policyholder crashed into an object like a tree or fence

Without this type of insurance, a policyholder who got into any kind of accident would not have any coverage to pay for fixing their car or replacing it if it was too badly damaged to fix. The driver could be out many thousands of dollars.

Many people who are paying on an auto loan are required to buy collision coverage, because the lender doesn’t want to be left with no collateral if something damages the vehicle.

2. Comprehensive coverage

Comprehensive coverage pays for the policyholder’s losses if things go wrong other than a collision. Examples of covered perils for this insurance include:

Hail damageGlass and windshield damageVandalismTheftFireOther acts of nature

Again, without this coverage, a driver would have to pay to repair or replace their stolen car, broken windshield, or otherwise damaged vehicle. Many lenders also require this kind of insurance coverage for the duration of an auto loan.

3. Uninsured motorist coverage

If a driver without insurance causes an accident, the victims would not be able to pursue a personal injury or property damage claim against the at-fault driver’s insurer. They could sue the at-fault driver personally, but would likely find that the person who caused the crash doesn’t have very many assets to pay damages.

Uninsured motorist coverage would step up to pay for the losses the uninsured driver should have covered. Since around 1 in 8 drivers lacks the required insurance coverage, going without uninsured motorist coverage would mean taking on a fairly large risk of financial loss.

4. Gap insurance

Many people owe more on their auto loans than their car is worth. In fact, a report from Edmunds revealed that 17.4% of people buying a new vehicle ended up trading in a car that had negative equity. Negative equity means that the car’s market value is less than the outstanding amount due on the auto loan. Sadly, the average amount owed by borrowers with negative equity was $4,141 in the fourth quarter of 2021.

This data reflects both an increase in the number of people with negative equity as well as an increase in the average amount that car owners were short. For those with negative equity, big problems can happen if a car is stolen or totaled in a crash.

See, the auto insurer will only provide a check for the market value of the vehicle when an insured makes a claim. If the car is worth less than the amount the insurer pays, the vehicle owner could be left forced to try to come up with the remaining balance due to the lender on a car they no longer own.

Gap insurance protects against this, as it pays off any remaining balance due after an insurance payout. While gap insurance is not required by state law, lenders can sometimes require drivers to carry this coverage. It’s a good idea for any vehicle owner if they suspect they may owe more than the car is worth at any point.

By making sure to understand all four of these types of auto insurance, drivers can protect themselves against major financial loss that could have a devastating impact on their bank account balance.

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When I get a mortgage, I opt out of escrowing my taxes and insurance. Should you consider this move, too? Keep reading to find out. 

I am buying a house soon. I got a mortgage to pay for the property since I can’t afford to buy it outright and wouldn’t want to tie up my money doing so anyway.

When I got my mortgage loan, though, one thing that I insisted on was that I did not want to put my property taxes and insurance payments into escrow. Here’s what this means, along with why I wasn’t interested in taking this approach.

What it means to escrow your property taxes and insurance payments

When you purchase a home, you don’t just have mortgage costs to pay. You also must pay property taxes on the home, as well as homeowners insurance costs.

Many mortgage lenders want you to pay these costs throughout the year, adding them onto your monthly mortgage payment. For example, if your monthly mortgage payment for principal and interest would be $1,500 and your annual property tax bill and insurance bills add up to $5,000 total, you wouldn’t just pay your $1,500 payment for your loan to your mortgage lender each month. Instead, each month you’d pay 1/12th of $5,000, or about $416.67, to your lender on top of the $1,500.

The lender would then put this money into an escrow account, where it’s stored for safekeeping. When your property tax and insurance bill come due each year, the lender would have the cash ready to pay it — rather than just hoping you have the funds.

While there are some benefits to this, including that you don’t have to save up money for property taxes and insurance when the annual bill comes due, I opted out of this approach.

Here’s why I didn’t want to do escrow

Although there are advantages to escrowing property taxes and insurance, there are a few reasons why I don’t want to do that and why I would prefer to just pay my bills myself.

I’d prefer not to give up control of my money. If I have to put money into an escrow account, I’m tying up all of that cash in the escrow account throughout the year — long before my tax and insurance payments are actually due. If I instead save the money in a high-yield savings account, I have access to it throughout the year. If I need a little extra cash one month to cover an unexpected expense, I could borrow from that account if I needed to and then just put more money in later.I can save for taxes and insurance on my own schedule. I don’t have to send in the same amount every single month as I would if I was escrowing my payments. Since my income is irregular, it sometimes makes sense for me to save more in one month for taxes and insurance and less in a different one.I don’t have to tie up extra money. Usually, mortgage lenders want to make sure that there’s enough in escrow, so they require you to keep some extra reserves in there. I don’t really want to put a few extra months worth of payments in an account I can’t access.It’s easier to switch insurance: If I want to change insurance companies, I don’t have to worry about sending any premium refunds back to my insurer so my escrow account balance doesn’t fall too low.

You may also decide you don’t want to escrow your taxes and insurance for the same reason. But if you don’t, you need to be sure you can trust yourself to save the required amount so you can pay the bills when they come due. And not all lenders allow you to skip escrow, so you should be prepared to shop around for a mortgage provider that makes this possible.

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Putting a pet insurance policy in place for an elderly pet still makes sense. Read on to learn why. 

Rescuing an older pet can be a very rewarding experience for both the new owner and the animal. But, an important choice will have to be made after bringing the pet home that can affect the owner’s checking account. Specifically, the new pet owner will need to decide about whether to buy pet insurance.

There are some pros and cons to weigh when making the decision, so it’s important to think this choice through carefully to make the right one. Here’s what to consider.

Will the animal’s medical issues be covered?

Before buying a policy for an older pet, it’s important to understand how policies work and that they may not cover every issue that arises. See, pet insurance policies do not provide coverage for pre-existing medical conditions. So, if the animal had, for example, a heart murmur or joint issues, then any future treatment related to cardiac or joint conditions would typically be excluded from insurance coverage.

Pet insurers might ask for medical records or an exam to be performed before providing coverage to an older pet. There may also be a waiting period before a policy goes into effect.

However, just because the insurance will not cover everything doesn’t mean it isn’t worth getting. Any accidents that the pet has, such as being hit by a car, will typically be covered as will medical conditions that are not pre-existing. Often, this means that insurance will still pay for many health problems that could arise later in an animal’s life.

How much will the premiums be?

A small minority of pet insurers do not increase premiums by age — but most do. Getting coverage for an 8-year-old animal could be twice the cost (or more) compared with getting coverage for a puppy. Buying a policy for a 12-year-old animal could mean paying three times as much as getting insurance for a puppy.

Insurers generally charge more for older pets because of the increased risk of health issues. Unfortunately, this can make it a financial burden to buy insurance. Of course, while insurance is expensive, it could save owners even bigger bills later in the event a serious illness or injury occurs.

If a pet owner gets a policy for an older animal that costs around $100 a month, the pet owner would break even on premiums if their pet received an average of $1,200 in covered care over the year.

With some treatments, such as chemotherapy and certain surgeries, potentially costing several thousand dollars or even tens of thousands of dollars, it may be worth investing in insurance to make certain a pet can get the necessary care if something goes wrong

Would getting care without coverage be affordable?

Finally, the last big question to consider is whether medical care would be affordable without buying insurance. When rescuing an older pet, it’s important to have as much time with them as possible. No pet owner wants to be forced to decide between saving their animal and going into debt, so if there’s a chance treatments couldn’t be paid for without a policy, getting insurance coverage is a smart move.

It’s best to act quickly to get an older rescue pet covered ASAP, so consider these questions and decide if buying insurance is the best choice. Owners who decide to get covered should get several quotes from different insurers to find the best price, so they can protect their finances and their animal’s future.

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Struggling to secure talent for your company? Read on for some strategies to employ. 

You might run a small business — but that doesn’t mean your operation is a one-person show. You may have a staff you rely on to do the many things you either aren’t equipped to do or don’t have time to do. So when you find yourself unable to fill open positions, it can be extremely challenging.

In September’s NFIB Small Business Optimism Index, a good 43% of small business owners reported having job openings that they could not fill. If you’re in that boat, here are some changes you can look at making that might help attract more qualified applicants.

1. Offer a superior benefits package

Many companies are able to offer a certain salary. You can go beyond that by offering superior benefits — perks like fully subsidized health insurance, employer life insurance, and a generous 401(k) match.

Many job applicants these days are savvy enough to look at the big picture and recognize that compensation isn’t just salary alone, but rather, a larger package. If you can offer up better benefits than competing businesses, more workers may flock to your business.

2. Be flexible with working hours

If you own a store or eatery that has diners coming in at certain hours, then you may not be able to be all that flexible with your employees’ schedule. But let’s say you own a marketing firm. Perhaps you need employees to be on hand during some daytime hours to take meetings with clients. But if a lot of the work being done is independent work, it wouldn’t hurt to be flexible with your employees’ schedules.

Some people may be hesitant to commit to a strict schedule because they have children or other obligations. If you can offer up more leeway and take an “as long as the work gets done” attitude, you may end up attracting more candidates.

3. Be flexible with where employees work from

Restaurant work can’t be done remotely. But there are plenty of jobs that can be performed from anywhere, whether it’s office space in the middle of a city or the comfort of a person’s desk in their basement.

If the nature of your business is conducive to remote work, make it clear that you’re open to that arrangement. That could be a selling point for potential applicants who got used to remote work during the pandemic and prefer that to having to commute.

Also, being open to remote work expands your applicant pool. You don’t have to be limited to candidates who live within a reasonable distance for commuting purposes. Instead, you could hire someone whose home is 2,000 miles away if you feel they’re the best person for the role you’re looking to fill.

It’s not always easy to fill open positions. And right now, because the labor market is booming and jobs aren’t so hard to come by, you may find yourself struggling even more. But if you’re able to offer the above perks, you may find that you have more people interested in working for you.

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Home buyers don’t get to shop around for an appraiser because there are strict regulations in place. Read on to learn how this can impact a home purchase. 

Since I am buying a home soon, I needed to go through the process of getting a home loan. And during the process of applying for a mortgage, I had to pay for an appraisal.

Appraisers are professionals who assess the valuation of a home to tell you — and your lender — what the property’s current market value is. An appraiser is paid by the home buyer (me, in this case) and looks at comparable sales to make a report about what the property is worth. The lender then uses this information to determine whether the house is worth enough to serve as collateral for a mortgage loan.

When I paid my appraiser, I spent over $500 to get a report on what the home I was trying to buy should be worth. But despite the fact I had to shell out all of this money, I had no say in who the appraiser was and I was not allowed to shop around for the best price.

Here’s why that’s the case.

Regulations prevent you from picking your appraiser

There’s a very simple reason why you cannot shop around for your appraiser. Banks and regulators won’t allow you to do it.

See, there are rules and regulations to prevent fraud in the appraisal process. In the past, there were problems with appraisers coming back with inflated home values because otherwise they knew that a deal would fall apart if a property appraised for too little. To try to avoid a situation where a bank or buyer could influence an appraiser, neither banks nor homeowners pick an appraiser personally.

Instead, banks generally outsource the selection of an appraiser to a third-party appraisal management company. When someone is buying a home, the bank just reaches out to the management company to let it know an appraisal is needed and a licensed appraiser is randomly selected from the pool of professionals that the management company works with.

Why this rule makes good sense

Ensuring that an independent third party is valuing the home can protect consumers from a situation where an appraiser says a property is worth more than it is and the buyer then overpays for the property.

If the buyer does overpay, they could find themselves immediately owing more than the house is worth (also known as being underwater on their mortgage). That would be a huge problem if they wanted to refinance their home loan in the future because the new bank would likely require another appraisal and the appraiser might not be willing to inflate the price this time around.

It’s an even bigger problem if a homeowner buys a property and then wants or needs to sell and ends up not being able to do so for the amount they paid. The homeowner could be trapped in the house or could have to bring money to the table to repay the remaining loan balance, which isn’t always possible. This could put the homeowner at risk of foreclosure if they really had to get out, perhaps because they found the payments weren’t affordable.

So, while it was annoying to me to pay for an appraisal and not be able to pick my appraiser — and it will probably be annoying to you too if you’re buying a house — just know there’s a good reason for this regulation.

The good news is, while you can’t shop around for an appraiser, you can shop around for a mortgage lender. By comparing rates and terms, including upfront closing costs, you can make sure your total borrowing expenses are as low as possible over time. That’s going to impact your finances far more than just being able to pick your own appraiser would.

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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.
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