Money Management

Auto insurance is a must when you drive a car. But do you need to buy more of it to drive for Uber? Read on to find out. 

Years ago, people who needed a lift from one place to the next had to either hail a taxi or potentially endure long waits for a car service to arrive. Then Uber hit the scene, and it’s been a big game-changer.

With Uber, you might request a ride and get access to a variety of choices in an instant. And depending on the timing of your request, you might end up with a car at your door in just minutes.

But whether you’re someone who actually uses Uber or not, you may be interested in driving for the ride-hailing company. Some people drive for Uber as a full-time job, while others turn to Uber as a side hustle.

And in the context of side gigs, there are few options that are as flexible as Uber. You simply shuttle passengers around when you want to, all the while pocketing some extra money you can use to do things like boost your savings account balance, pay off credit card debt, or travel.

If you’re interested in driving for Uber, you may be wondering if you’ll need to buy extra auto insurance to do so. The good news is that Uber covers its drivers during their shifts. But you’ll still need a separate car insurance policy for when you’re off the clock.

Drivers are covered

Uber maintains auto insurance for its drivers while they’re on duty. So if you decide to drive for Uber, you won’t necessarily have to buy additional coverage of your own.

Specifically, Uber offers the following accident coverage for drivers who are active on the app and available or waiting for a ride request:

$50,000 in bodily injury per person$100,000 in bodily injury per accident$25,000 in property damage per accident

Meanwhile, if you get into an accident on the way to pick up a passenger or during a paid ride, Uber offers $1 million in third-party liability coverage. It also offers comprehensive and collision coverage, so you can potentially be reimbursed up to the cash value of your car if it’s totaled, with a $2,500 deductible.

You still need auto insurance of your own

While you don’t necessarily have to buy extra auto insurance to drive for Uber, you still need to maintain personal coverage for when you aren’t active on the app or driving for the company. If you’re visiting a friend on a weekend and you get into an accident, Uber’s coverage won’t kick in.

Now the interesting thing is that your auto insurance company is allowed to ask how you use your vehicle, and your usage could help determine what rate you qualify for. Someone who works from home and rarely drives, for example, might score a lower rate than someone who commutes daily.

As such, you’ll need to disclose that you’re driving for Uber to your auto insurer. And you might see your premium rate rise because of that.

So even though you don’t automatically have to buy more insurance coverage if you’ll be driving for Uber, you might, unfortunately, have to spend more on auto insurance regardless — even though Uber has its own coverage for drivers in place. This makes it even more important to shop around and compare rates between various insurers. You might find that one car insurance company offers a much better deal on your premiums, even as an Uber driver, than the company you currently use. Potentially-hiked premiums are an expense you’ll need to account for if you’re thinking about driving for Uber on either a part-time or a full-time basis.

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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.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool has a disclosure policy.

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Welcoming a child into the world brings a lot of changes, both personal and financial. Here’s how to find out if you can afford to stay at home with them. 

There are a lot of financial decisions you have to make when welcoming a child into the world. One of the most important is how you’ll handle child care once the baby is born. Staying at home means you don’t have to pay for daycare and you’ll have a lot more time to bond with your kid. But it can be really tough to forego that paycheck, especially if you were earning a high salary before.

The right call for your family is a highly personal decision, and there’s more than just personal finance factors to consider. But if you’re not sure whether your family can afford it, here’s how to figure it out.

Which is more affordable: staying at home or returning to work?

Deciding whether you can afford to stay at home with your kids is easier if you play out both scenarios. It’s pretty easy to figure out how being a stay-at-home parent will affect your household financially. You know how much money you make in a year, so you just have to ask yourself if you’d be able to get by without that income coming into your checking account.

Don’t forget to think about other benefits your job provides you, like health insurance, when making this decision. If your family currently relies upon your health insurance and you quit your job to remain at home, you’ll have to pay for new insurance, and this could be considerably more expensive. If you’re thinking about going this route, be sure to price out new health insurance plans before making a final decision.

Going back to work brings its own expenses. Putting one child in a daycare center costs about $340 per week on average, according to Illumine, and if you hire a nanny instead, you’re looking at about $612 per week. The company also found that more than half of parents surveyed reported spending more than 20% of their income on daycare costs.

Price out daycare options in your area to determine how much you might pay. It could be more or less than the averages above. Once you know how much this would cost, you can compare this to the cost of staying at home with your child to figure out which is more feasible for your family.

What if neither option is affordable?

Unfortunately, there’s not always a clear-cut answer as to which is the better option for your family. So you may have to try a hybrid approach. Perhaps you drop to part-time work and stay home with your children a few days a week, so you don’t have to pay for daycare every day. Or maybe you have a family member or friend willing to watch your children while you work a couple of days per week.

If your employer enables you to work remotely, you might be able to work and watch your children at the same time. But this depends a lot on your position. If you’re required to be working or attending meetings during specific times, it might be too challenging to also juggle the needs of young children.

You could also look into child care financial assistance options to ease the costs of returning to work. Your state or local government may offer subsidies for low-income families or free pre-kindergarten to older toddlers to help reduce your costs. Some providers also offer discounts for families with multiple children. Look into these and see what kind of a difference they can make for your family’s finances.

After you’ve done the research, it’s important to sit down and discuss your findings with your partner or anyone else who has a hand in helping to pay your bills. Make sure everyone is on the same page and comfortable with the budget changes your family will have to make.

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I worked in the real estate industry for a decade and I’ve seen a lot of ways homeowners go wrong. Read on for my best anti-hacks. 

Although I did my training as a journalist, I spent a decade working in the real estate industry, both as a real estate agent and, as I got deeper into that world, a general contractor. I learned a lot about how houses work, and what wear and tear can look like in a home. But I also learned that a lot of people don’t understand what they need, especially if it’s their first house, which is why there are billions of articles offering too-simple solutions for home issues.

You know what I hate the most in the world? “Hacks.”

Hacks are things that are cheaply done and rarely result in long-term solutions. They’re awful. That’s why I’ve made a list of tips, or “anti-hacks” for homeowners like you that can help you save money on your home in the longer term.

Always buy the middle-grade materials

I get it, houses are expensive. They really are, and their problems can be alarming at times, but if you can learn anything from my extensive experience working with buyers and remodeling homes, it’s that you should never buy the cheapest materials you can get just because they’re cheap. Once in a while, it’ll work out for you, but by and large, you’ll find that the cheapest materials are cheap for a reason — they’re simply not intended to last. This goes for everything from flooring to appliances and light fixtures.

Anything that you can buy, you can upgrade, and unless you like to redo your house again and again, mortgaging your home’s equity, or tapping your savings, you really should.

That being said, there’s such a thing as too much of a good thing — once you have a faucet with a lifetime warranty, the rest is just showing off. I’m not saying not to pay extra for a faucet that you like, but if you’re paying more just to pay more, that’s not getting you anywhere. Always check materials warranties, see how long the thing is made to last, and what happens if you need to use the warranty. This is also important when you have multiple material options available. If tile is just a few dollars more than carpet, go with the floor that you’ll never need to replace.

Deal with problems early

Deal with problems early, even if they don’t seem like that big of a deal. Case in point: I recently noticed a leak in my kitchen window when it rains. I thought this was a bit weird, but didn’t give it more thought until it leaked again. This weekend, I pulled the siding down to see what was going on, and found a lot of damage to my wall on the outside of the house. If I had waited, rather than simply damaging the wooden sheathing, it would have destroyed the integrity of the wall itself, resulting in significant structural repairs, and possibly even inviting in termites or carpenter ants.

That’s not a fun discussion to have with your mortgage lender, even if you’re begging for a home equity loan or a HELOC to cover the costs.

But, rather than having to do all of that, I’ve corrected the water issue at the roof, fixed the wall, and am waiting for a few hundred bucks’ worth of siding to be delivered. And yes, after much agonizing, I followed my own advice and upgraded my siding materials to a galvanized aluminum material that complements the existing lavender siding (that can no longer be matched). The new stuff also comes with a 40-year warranty!

Get nerdy with it

Even if you choose to use a building contractor to do work in your home, make sure you really understand what it is that you’re buying and what kind of work is being done. Nerd out, learn all you can about homes and how they work, and research the available materials options. Most of the time, your contractor will ask you what you want, rather than telling you what you want (and if they tell you without asking first, find a new contractor). If you just shrug, they’re going to make a cost-friendly choice, assuming that’s what you’d prefer.

Don’t shrug and don’t look confused, but instead ask them what they suggest. Ask them what materials will last. Then tell them you want to read up on these things. You can go to manufacturer websites and collect all kinds of technical information on the things that go into your home. Everything from the roofing to the dirt has a spec sheet. Read several, understand what’s normal, and then figure out what you want for your house from there. Get nerdy with it and make these choices with great intent and purpose.

Treat your house like your haven

I know, it’s cheesy, don’t write to me about that header. But I do mean it. If you treat your house like a haven, not like some kind of disposable possession that you just need to keep barely clad in flooring and walls, you’ll find that it will work in your favor.

We’re in a remarkable time in the real estate cycle, where housing is incredibly expensive, and moving is almost impossible for most people, so it’s more important than ever that you invest in your home and make sure the things you do to it are going to last.

If you are considering a second mortgage or a HELOC to do some upgrades, you want to be sure this is a one-and-done situation. Some people might tell you to not pick options that are trendy, but I’m not that person. If you like the trend, just make sure you’re choosing mid- to upper-grade versions of that popular light fixture or — heaven forbid — sliding barn doors.

These simple “anti-hacks” can save you hundreds or thousands of dollars while you’re living in your home, and if done well, can even improve your home’s value when it’s time to sell it.

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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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The less shopping you do, the less an Executive membership at Costco makes sense. But read on to see why getting one when you’re single could easily pay off. 

Being single might lead you to make certain financial choices. If you’re renting a home, for example, you may decide to stick to a one-bedroom apartment rather than pay up for a two-bedroom if you’re the only resident.

Similarly, it stands to reason that if you’re single, you might shop less at a retailer like Costco than someone who’s married and/or has children. A family of five, for instance, might go through three gallons of milk per week, while you might barely finish one.

Now, when it comes to your Costco membership, you have choices. You could pay $60 a year for a basic membership, or you could upgrade to an Executive membership for $120. The latter will give you the benefit of snagging 2% cash back on your Costco purchases — even those made online.

You might assume that an Executive membership won’t make sense if you’re single. After all, how much grocery shopping can one person do? But if you crunch the numbers, you may conclude that an Executive membership actually makes a lot of sense, even if it’s just you who’s using it.

When your upgraded membership pays off

The difference in cost between a basic membership at Costco and an Executive membership is $60. So if you spend $3,000 a year at Costco, you’ll break even on that $60 upgrade. And if you spend more than that, you’ll come out ahead financially.

If you’re single, you may not end up spending $3,000 a year at Costco on purchases like food and toilet paper. But that doesn’t mean you won’t meet that threshold by making other purchases.

Costco sells everything from apparel to furniture to electronics. Most purchases are eligible for 2% cash back under an Executive membership. You can even score cash back if you use Costco’s travel services to book a trip.

So, let’s say you normally spend $100 a month at Costco on snacks, cleaning supplies, and paper towels. That’s only $1,200 a year.

But let’s say you’re also planning to upgrade your laptop this year and buy a new TV for your living room. You might easily spend $1,000 on each. So all told, you’re at $3,200 of spending, which is beyond what you need for an Executive membership to make financial sense.

Similarly, you might only spend $50 a month at Costco on household items because you don’t have a lot of storage space at home. But if you book a $2,500 vacation, that alone could be enough to justify an Executive membership.

Don’t write off an Executive membership just because you’re single

Your anticipated Costco spending should help you decide if an Executive membership is right for you more so than your relationship status. It’s that simple. So if you’re not sure whether to upgrade, keep that $3,000 figure in mind and do your best to estimate your annual Costco spending.

And remember, too, that if you don’t make back your upgrade fee for an Executive membership with your cash back, Costco will let you downgrade to a basic membership and refund you the difference. So the only risk you’re really taking is shelling out the extra money upfront. If you can afford to part with $120 on the spot for a Costco membership versus $60, then you’ve got a really easy decision on your hands.

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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.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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Your credit score has a huge effect on your finances. Here are five moves you can make right now to start improving yours for 2024. 

Vowing to get better with money is one of the most common New Year’s resolutions. This can include many things, from saving more money to learning how to invest. You may also want to boost your credit score, so you can qualify for better credit cards and lower interest rates on loans in the future.

But there’s no need to wait until 2024 to start working toward that goal. In fact, why not take steps to raise your credit score right now so you can start next year off strong? Here are five things you can do that could boost your credit score by the end of 2023.

1. Pay off debt

One of the most important factors in your credit score calculation is your credit utilization ratio. This is the ratio between the amount of credit you have available to you and the amount you use every month. For example, if you have a card with a $10,000 limit and you regularly charge $3,000 to that card, your credit utilization ratio would be 30%. Ideally, you don’t want to exceed that ratio if you hope to keep your credit score high.

This is a big problem for those with credit card debt, as they often have high utilization ratios. That can provide yet another incentive for trying to get out of credit card debt, but it’s often easier said than done.

You can try opening a balance transfer card. These cards have 0% introductory annual percentage rates (APRs), so your balance won’t grow during this time. That can help you pay down what you owe, though there’s usually a one-time fee (often 3% to 5%) associated with these transfers.

You could also opt for a personal loan. This can get you out of the cycle of credit card debt by giving you a predictable monthly payment. Interest rates are generally better than what you find on credit cards, but they can still be pretty high since these loans don’t have collateral. That’s especially true for those with poor credit.

2. Increase your available credit

An alternate way to reduce your credit utilization ratio is to gain access to more credit. You can do this by requesting a credit limit increase on your existing cards or opening a new credit card.

But it’s important to be realistic about whether you’re likely to get approved before you do this. Credit card companies often do a hard inquiry on your report before approving you for additional credit, and this reduces your score by a few points. If your request is denied, you may have just hurt your score rather than helping it.

It’s typically not a good idea to request a credit limit increase if your credit is currently poor, you’ve made several late payments, or you’ve recently requested a credit limit increase or opened a new card. These factors make you less likely to be approved.

But if none of these conditions apply, it might be worth a shot. Most credit card issuers enable you to request credit limit increases or apply for new cards online. You typically need to provide them with an estimate of your annual income. A higher annual income usually leads to a larger credit limit because lenders are more confident that you’ll have the money coming in to pay back bigger sums.

3. Become an authorized user on someone else’s credit card

When neither of the above options work, you might try becoming an authorized user on someone else’s credit card. This gives you the right to charge things to this card and it adds the card to your credit report. Good payment behavior and a low credit utilization ratio on this card could help boost your credit score over time.

But you should note that if the person who owns the card makes late payments or regularly maxes out the card, it could come back to bite you. That’s why you need to carefully choose the person whose account you want to join.

You should also be prepared to have discussions about restrictions on how you’ll use the card. And you may have to accept the fact that the person doesn’t want to share access to their credit line with anyone else.

4. Try a secured credit card

Opening a secured credit card is a good fit for those who have poor credit and aren’t able to open many other credit cards because of it. Secured credit cards require you to put down a security deposit, which is refundable when you close the account assuming you’ve made all your payments. These cards typically have annual fees and most don’t have rewards.

They do report your payments to the credit bureaus, though. And they accept people with all credit backgrounds. As long as you make regular, on-time payments, this can help boost your credit score over time.

5. Dispute errors in your credit report

Everyone is legally allowed to view their credit reports for free annually through AnnualCreditReport.com. And you can actually view your reports weekly for free through the end of 2023. It’s a good idea to check these at least once per year to make sure all the information on them is accurate. Errors, like fraudulent accounts in your name or closed accounts reported as open, while uncommon, can hurt your credit score.

If you notice any inaccurate information, contact the credit bureau and the financial institution associated with the account immediately. The credit bureau will launch an investigation. It may take some time, but if it finds your claim is valid, it will update your credit report and your credit score will get a boost.

These moves may not boost your credit score overnight, and you may need to continue these actions as well as strive to make consistent, on-time payments in 2024. But if you stick with them, you should start to notice your score rising within a few months.

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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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