If workers’ estimates are right, many are likely to fall far short. Robert Kneschke / Shutterstock.com
American workers say they need $1.8 million to retire. But many are at risk of falling short of that lofty goal. A Charles Schwab survey of 1,000 nationwide 401(k) plan participants ranging in age from 21 to 70 asked how much money they would need saved to retire. The $1.8 million figure they cited on average was up a touch from the $1.7 million cited in last year’s study.
Dave Ramsey gives a lot of advice about budgeting for your next trip. But is all his advice about saving on vacations worth following?
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Vacations can do major damage to your checking account balance. But they can also help you create memories, and allow you to relax, unwind, and enjoy life.
If you don’t want to end up in credit card debt due to lavish trips, you may need to look for ways to cut spending. Finance guru Dave Ramsey has some suggestions, but some of his tips for saving are better than others. Here’s what Ramsey had to say.
Some of Ramsey’s best tips for reducing your vacation costs include the following:
Drive when your destination is close byDon’t dine out for every mealCheck for discount attraction tickets
These tips are great because they won’t end up costing you any enjoyment or pleasure on your vacation, but you’ll still get to reduce your expenses anyway.
If your destination would take you less than around four hours to drive to, you’re usually better off driving rather than flying. By the time you get to the airport early, park, and get through security, you’re usually going to end up taking more than that amount of time to fly than to drive anyway. And if you’re traveling with your family, you’ll likely save money by driving instead of flying.
Dining out for every meal on vacation can also add up very quickly and isn’t necessary for you to enjoy yourself. While you may want to splurge on special dinners out, breakfast and lunch could be quick meals like cereal and sandwiches you prepare in your hotel. This will leave you more time and money to sightsee. Plus, breakfasts at restaurants are rarely worth the added price compared to what you can make at home.
Finally, looking for discount attraction tickets ahead of time is an easy call, because why pay more for the same thing? Costco is a great place to book travel, but you can also check local grocery stores for deals on tickets to regional amusement parks, or use sites like Groupon to score savings.
While some of Ramsey’s saving tips make good sense, others don’t. In particular, he suggests reducing your costs using these three techniques, but you probably shouldn’t listen to him here:
Keep your vacation shorterDon’t buy expensive treatsLimit your daily activities
Taking a shorter vacation rarely makes sense when you’ve already paid to travel to your destination. Many hotels and Airbnb rentals also run packages where you can get extra discounts if you stay more nights. So, don’t cut your vacation short just to save a few dollars when there are easier ways to reduce spending.
Skipping out on daily activities also doesn’t make sense for the same reason. Once you’ve paid to travel somewhere, it’s foolish not to enjoy all it has to offer. That’s why it’s also worth it to buy expensive treats once in a while. While you don’t want to do this multiple times every day, living it up on vacation and indulging in a splurge or two is a great way to make memories.
Ultimately, you will need to decide what’s most important to you on your trip. But don’t be penny wise and pound foolish by spending a lot of time and effort to get somewhere, and then not enjoying your vacation as much as you could because you skimp too much upon arrival.
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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 positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
Insurance is an important purchase. Keep reading to learn what not to do when you’re getting a new policy of any kind.
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When buying insurance, consumers need to make sure they are making smart choices. Insurance is there to provide crucial protection in the event of a disaster. Without the right coverage, a consumer could face serious damage to their bank account and overall financial life.
Anyone buying any type of insurance policy should be sure to avoid these four crucial mistakes that could result in major regrets.
Buying too little coverage could lead to uncompensated losses. For example, if a homeowner only buys $100,000 in dwelling coverage and their house is worth $200,000, they wouldn’t get back the full amount of money needed to rebuild their home if it was destroyed.
In fact, homeowners insurers have a specific rule that penalizes property owners for purchasing too little protection called the 80% rule. If a homeowner doesn’t have replacement value coverage equal to at least 80% of their home’s value, any payout they receive would be pro-rated.
For example, in the above example where the homeowner has $100,000 in coverage on a $200,000 home, the homeowners insurance policy would only pay 50% of a covered loss — even if it was below the maximum limit. So, if $50,000 in damage was done, although this is below the $100,000 in protection in place, the insurer would still pay just $25,000 out to the homeowner.
Those who do not want uncompensated losses should make sure they have a policy with a large enough coverage limit to replace their home or car. And they should make sure to have the right kinds of coverage that protect against all potential losses. This includes flood insurance for a home in a flood zone and collision coverage in case they are in an at-fault car crash.
The cheapest insurer may not always be the best one, especially if it has a poor reputation for handling claims. So, policyholders should not shop based on price alone or they could end up regretting it.
It’s important to check J.D. Power Rankings to see how an insurer fares when it comes to customer satisfaction. Consumers should also read reviews from the Better Business Bureau, and check the insurer’s AM Best Rating to make sure the company is financially sound. If an insurer has a low price but a poor reputation, they should look elsewhere.
Insurance buyers need to set a deductible. That’s the amount they pay out of pocket when there is a covered loss before an insurer picks up the rest of the tab.
A deductible that is too low will result in unnecessarily high premiums. But a deductible that is too high may be unaffordable in the event something goes wrong. Consumers should consider the impact of changing their deductible on their premium price and see how long they’d need to be claim-free to end up better off with a higher deductible.
For example, let’s say a driver goes from a $100 car insurance deductible to a $250 deductible on a collision coverage policy with a $420 six-month premium. The driver could save 29% on the cost of that premium, as the price falls to $300. After saving $240 a year ($120 per six-month premium), the consumer would more than make up for the added $150 they’d have to pay out of pocket in the event of a crash. So, if they didn’t end up in a collision in the first year, they’d be better off with the higher deductible.
It’s also important to think about whether enough money would be available to pay for the deductible. A consumer who wouldn’t actually have an extra $150 to pay out of pocket shouldn’t raise their deductible by that much, as they’d be in trouble if they needed to make a claim.
Finally, not shopping for coverage is a huge mistake. There can be a big difference in premium prices and other coverage terms from one insurer to another, and consumers need to shop around to find the best deal.
It’s a good idea to get at least three insurance quotes from different carriers and to compare costs each year to make sure the coverage in place is still the most affordable option. This way, consumers can avoid paying more than they need for the protections they put in place.
By avoiding these mistakes, insurance buyers can get the right coverage from the best carrier for their needs — and can ensure they don’t overpay for it. It’s well worth a little bit of time and effort to get the right policy, since insurance offers protection against catastrophic financial loss — and no one wants to be left without the right coverage when disaster strikes.
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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.
See how much dollar stores really stack up when it comes to stocking up. Diego Cervo / Shutterstock.com
Editor’s Note: This story originally appeared on The Penny Hoarder. In theory, the dollar store seems like it might be a one-way ticket to paradise. A store full of all of the items you need and, yes, some of the items you want — all for the price of a dollar. What could be better? Most Americans seem to agree. In the last four years, the number of dollar stores in the U.S. has gone up…
These flexible jobs in varied areas of the music industry can help foster your creativity while you earn an income and gain experience. Minerva Studio / Shutterstock.com
Editor’s Note: This story originally appeared on FlexJobs.com. Are you a musician looking for a flexible job that blends your love of music with the flexibility you crave? Maybe you need a traditional job that helps pay the bills while you build your side hustle. Or, perhaps you’re a musician looking to create a better work-life balance that leaves time for your personal craft.
Want to make the most of your Prime membership? Read on for some great deals you can snag this month.
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Many people who sign up for Amazon Prime ultimately don’t get their money’s worth, and that’s unfortunate. But if you’re someone who uses your Prime membership regularly, then that annual $139 fee may be more than justifiable.
Still, one good way to make the most of your Prime membership is to take advantage of limited-time deals. With that in mind, here are some bargains you may want to snag this month.
Let’s face it — store-bought coffee can be pretty pricey, and instant coffee is, well, not the best. If you’re tired of racking up a giant credit card tab at your local Starbucks, it may be time to invest in a Keurig instead.
Right now, Amazon has this Keurig model on sale in several colors for just $79.99, which is 28% off the regular price. It’s a smaller version of the classic Keurig, so if countertop space is limited at home, that’s not a problem. Plus, you can save yourself time by not having to wait in line to get your morning coffee.
If your child wears a uniform to school, then buying new clothes this summer may be something you can’t avoid. But you can save money by taking advantage of deals like this one from Amazon.
Right now, Nautica uniform jogger pants are 61% off, bringing your total cost to $10.98 per pair. At that price point, you may even want to buy a few pairs in the next size up for when your child needs them.
Need a new tablet that supports everything from Prime Video to Netflix to books? The Amazon Fire HD 10 tablet fits the bill. And right now, it’s priced at $129.99, which is 32% off the normal cost.
You can choose from a number of colors, and you’ll get 64GB of storage. (There’s also this 32GB version available at a discount as well.)
Now that school’s about to start up again, you can expect lots of flyers and papers to come home with your kids — not to mention empty snack bags. So now’s a good time to upgrade to a trash can with extra storage.
This SONGMICS model offers 16 gallons of space, and it’s on sale for $73.70, which is 43% off the original price. Plus, it’s designed to blend in quite nicely with stainless steel kitchen appliances.
If you’re tired of your kids’ bedrooms or playrooms being an absolute mess, the right storage system could be your ticket to getting organized. Enter this organizer and storage bin system, which comes with 12 containers of varying sizes to help you keep everything from books to blocks to puzzle pieces off of the floor. It normally retails for $120.00, but right now, it’s got a 64% discount, bringing your final price to $43.46.
These are only some of the fabulous deals you’ll find on Amazon this month. If you have a running list of back-to-school items you need to buy in the coming weeks, it especially pays to check Amazon and see what options and prices it has to offer.
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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.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Maurie Backman has positions in Amazon.com and Netflix. The Motley Fool has positions in and recommends Amazon.com, Netflix, and Starbucks. The Motley Fool has a disclosure policy.
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