Money Management

If a person bought life insurance without their family’s knowledge, the life insurer might track down beneficiaries. Here’s what happens if it can’t. 

Buying life insurance protects loved ones. If someone dies while their spouse or other family members are relying on their income or services, this could be a huge problem. Once the deceased person’s paychecks stop being deposited into a shared checking account, surviving loved ones could be left with a serious financial shortfall.

Life insurance protects against a financial disaster when an untimely death occurs by providing a death benefit to chosen beneficiaries. A predetermined sum of money is paid out to those left behind, which can be used to repay debt or replace the deceased person’s income.

Generally, it falls to the surviving beneficiaries to make a life insurance claim after a death. But, what if the family members of an insured person didn’t know there was coverage in place? Here’s what can happen in these situations.

The life insurer might search for beneficiaries

Life insurance companies may have certain obligations to try to determine when a covered person has died. The National Council of Insurance Legislators adopted a Model Unclaimed Life Insurance Benefits Act in 2011, and many states have adopted this act or have similar regulations in place.

Under this act, life insurers must periodically search a database maintained by the Social Security Administration, called the Death Master File. If the insurer identifies a deceased policyholder in this database and the policy has not been claimed, the insurer is expected to identify the beneficiaries and pay the death benefit to them within 90 days.

Even in states that do not have this legislation, many life insurers still choose to follow this process anyway. And some insurers have also adopted a rule that people are assumed deceased after 120 years (or are assumed dead at another designating “limiting age” as outlined by the insurance policy). If a policy has gone unclaimed when the covered person reached the “limiting age,” the insurer would pay the death benefit then.

The money may be turned over to the state

If a life insurance policy goes unclaimed for long enough — perhaps because the insurer could not find any beneficiaries that the deceased had chosen when buying coverage — then the money from the policy may be turned over to the state.

States may try again to find the rightful beneficiaries of the policy, but eventually the unclaimed money will go to the state treasurer if no one steps forward with a legitimate claim to receive it.

Obviously, no one wants the state to get the insurance benefit they paid for. And, most people don’t want their surviving loved ones to have to wait to get an insurance payout until the life insurer happens to discover a death and find the beneficiaries. To make sure this doesn’t happen, those who buy life insurance should tell their families ASAP. Life insurance buyers may also wish to tell another trusted third party, such as a lawyer who is helping them with estate planning.

By keeping loved ones fully informed, life insurance buyers can ensure their closest friends and family members will have the money they need during a hard time in their lives.

Our picks for best life insurance companies

Life insurance is essential if you have people depending on you. We’ve combed through the options and developed a best-in-class list for life insurance coverage. This guide will help you find the best life insurance companies and the right type of policy for your needs. Read our free review today.

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.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Christy Bieber has no position in any of the stocks mentioned. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

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Costco offers great bargains on so many things. But keep reading to learn why one writer isn’t joining Costco. 

If you’ve spent any amount of time reading the excellent personal finance content here at The Ascent, you could probably tell that Costco has a big fanbase here. And honestly, that’s not at all surprising. Costco is a great place to buy bulk paper towels, of course, but you can also buy a laptop there. You can gawk at high-end jewelry, and order the iconic $1.50 hot-dog-and-soda combo at the food court.

All of these are excellent reasons to be a Costco fan, and since we could all use a little savings account balance boost these days, getting a Costco membership makes sense for a lot of people. It doesn’t for me, though. Here’s why.

1. I don’t have a store nearby

Truth be told, this reason is one of the biggest to explain why I’m not a Costco member. My closest store is 60 miles away — that’s an hour in the car each way. To be fair, I do drive almost as far (50 miles each way) every couple of months to visit the closest Trader Joe’s, but that doesn’t require me to spend $60 or $120 per year for a membership. Plus, TJ’s sells stuff you can’t get anywhere else.

2. I live alone

While it is worth buying some items in bulk if you’re solo (and have the storage space), it wouldn’t make any sense for me to buy perishable grocery items in bulk because I have a household of just one human. It’s much easier for me to make bulk purchases of paper goods, toiletries, and cleaning supplies via Amazon, Target, or even my local grocery store.

3. Big crowds make me miserable

I can’t stand fighting the crowds while shopping, and since I’ve accompanied friends and partners to Costco in the last several years, I’m familiar with how busy the store can be. And unlike Sam’s Club (which I also won’t join; the nearest store to me is 80 miles away!), Costco hasn’t seemed keen to make the shopping process friendlier for people who hate crowds. Costco’s online shopping prices are higher than in-store prices, for example. At least Sam’s Club offers Scan & Go, saving you a wait at checkout. Costco’s self-checkout lanes aren’t set up to make the experience any easier.

4. I don’t use a lot of gas

If you drive a lot and have a Costco nearby, getting a membership can be worth it for the gas alone. But even if I had a store in my city, the gas prices wouldn’t make it worth it for me. I work from home and don’t have a commute, and while I do love taking road trip vacations, I don’t take them often enough to justify the membership cost and subsequent savings on gas.

5. I don’t need the temptation to overspend

This last reason is a particularly personal one. Costco stocks and sells a lot of amazing products, but I don’t like to put myself in situations where I’m tempted to overspend or buy items I don’t really need or want, just because they’re available. It’s the same reason my in-person shopping trips to Target are few and far between. Part of getting better with money is learning to recognize your overspending triggers and cope accordingly. Hence, no Costco membership for me.

Joining Costco is a solid financial decision for an awful lot of people, and it might be for you. But if you found yourself nodding along with most of my reasons not to get a Costco membership, it might not be a fit for you either.

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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. The Motley Fool has positions in and recommends Amazon.com, Costco Wholesale, and Target. The Motley Fool has a disclosure policy.

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If you love Starbucks coffee but don’t want to spend a fortune on it, these four tips can help you get the most bank for your buck. Find out what they are. 

Starbucks has some amazing drinks and can be a fun place to meet up with friends. But it can also be expensive, especially if you’re going there frequently. The good news is, you can keep costs down at Starbucks by following a few simple tips to get the most bang for your buck.

Here are four suggestions for reducing your spending at Starbucks without giving up your coffee habit.

1. Sign up for Starbucks Rewards

Signing up for Starbucks Rewards is a no-brainer when you want to get the most bang for your buck at this beloved coffee shop. You’ll become eligible to earn Stars that translate to free food and drinks. You’ll also get a special reward on your birthday, access to mobile ordering, and the ability to pay through the app.

You can make the most of your rewards and earn extra stars for each dollar you spend by adding money to your digital Starbucks card or registering a gift card, and you can get free refills of brewed coffee and tea.

2. Bring your own cup to score a discount

If you bring your own cup to Starbucks instead of using one of their disposable ones, you can get a $0.10 discount on your drink. If you are a Starbucks Rewards member, you will also score an extra 25 bonus stars. You can even bring a cup of your own to the drive-thru at some locations as long as you alert the barista who is preparing your order.

Not only is bringing your own cup good for your bank account balance, it’s also more comfortable to drink from a real cup instead of a paper one — and it’s better for the planet as an added bonus.

3. Order a Chai tea instead of a Chai tea latte

A Chai tea costs around $1.90 less than a Chai tea latte, and it comes with free refills as an added bonus. Just ask your barista to leave room for milk and add it yourself after your drink is prepared. Milk is typically available at no added cost at the self-service station, so you’ll get just about the same drink for a fraction of the price.

4. Split the Venti instead of ordering two smaller drinks

If you’re visiting Starbucks with a friend and you both want the same drink, ordering a Venti and asking for an extra cup can cost you less money than ordering two smaller drinks. Just split the drinks — and the cost — and enjoy sipping your drink with a little more money left in your savings account.

Of course, while these hacks can help you save money, you still want to keep your Starbucks spending in check. Be sure to plan for how much coffee you’ll buy in your budget so you don’t go overboard with all of its delicious treats — even if it is easy to do since they’re so tempting!

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

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I still have to be careful with my spending because a lot of my money is in real estate and retirement accounts. Read on to find out more. 

I have been tracking my net worth for years. This involves keeping an eye on the value of my assets, such as my home and the money in my bank account. After adding up the value of all that I own, I subtract my liabilities — like my mortgage debt — and I can see how much wealth I have.

My net worth has now crossed over the $1 million mark. And while this is an unbelievably privileged position to be in, it doesn’t mean what I once thought it would. I once associated having $1 million in assets with being able to spend whatever you want, but that’s definitely not the case for me.

Here’s why.

Having a lot of assets isn’t the same as having a lot of money to spend

There’s a very simple reason why having a net worth of $1 million doesn’t mean I can just spend whatever I want. Most of my wealth is in either my retirement accounts or in my home, and that’s not a liquid investment.

See, I have diligently saved money in retirement accounts at my brokerage firm ever since I started working. And I have benefitted from some of my investments performing well. That means I now have a pretty hefty balance in those retirement accounts that makes up a good portion of my net worth.

But I’m a long way away from retirement. And I can’t take the money out of these accounts, even if I wanted to, without incurring an early withdrawal penalty. So, while I have this money and it will help me have a more secure future — and it helped me cross over the $1 million mark when tracking my net worth — it doesn’t mean I can spend it.

Another big portion of my wealth is tied up in my home. I bought a house well over a decade ago, I’ve been paying my mortgage down ever since, and I have benefitted from the property going up in value. The valuable asset that I now own has helped me grow my net worth. But I can’t spend the money tied up in my house since I don’t want to sell my home or borrow against the equity in it.

Careful spending is still in my future

All of this means that while I feel good about the financial decisions I made and I feel like I’m on the path toward a secure future, I don’t feel “rich” today or like I can just go out and buy whatever I want.

I know that I need to leave my retirement money and home equity alone and, in fact, keep working on paying off my mortgage and saving for retirement, if I ultimately want to have the security I’m hoping for later in life.

So, while I’m very grateful to have a high net worth, the fact is that I’ll need to continue making smart money decisions — including being careful with my spending — for quite a long time to come. And I’m OK with that, since I’ve seen my dedicated efforts to make the right financial moves pay off big time as my net worth has grown.

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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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Running a company involves different tasks and concerns than you may anticipate. Keep reading to learn what work fell to me that I wasn’t expecting. 

Over a decade ago, I started my own freelance writing business. It has been a very rewarding process and I’ve been able to grow my income substantially. This, in turn, enabled me to increase my brokerage account balance and my net worth.

But, while I’ve loved many aspects of running my own company, I’ve also been faced with some unexpected surprises. In fact, here are three big things I didn’t realize I’d be taking on before I became an entrepreneur.

1. The amount of time doing mundane tasks unrelated to my actual job

When I started my freelance writing business, I expected I would get to spend my days writing interesting articles about the subjects I am passionate about. And I definitely get to do a lot of that.

But, I also spend far more time than I expected dealing with other stuff that’s not directly related to writing. This includes things like figuring out a system to keep track of deadlines, handling accounting issues, and researching equipment and software needed to enhance productivity. I also have to find substitutes for standard workplace benefits like a 401(k) and health insurance, and make sure I’m invoicing properly and keeping up to date with new style guides or other requirements.

While all of these tasks are necessary to be effective at my job and to ensure I’m running a profitable company, they aren’t necessarily very fun. And, I’m continually surprised by how big of a chunk of my time they take up, since my business doesn’t seem at first glance like one that would be heavy on the administrative tasks.

The reality is, whenever you run a business, you won’t just be able to spend all day providing the product or service — you actually have to take care of running the business too. It’s important to be ready for that both in terms of the time commitment and learning what admin tasks you’ll actually need to take care of.

2. The added cost of tax compliance

I expected filing my taxes to become a little bit more complicated once I owned my own business. But, things ended up being a lot more complicated. Not only do I have to pay estimated taxes, but I also have to file business tax returns since I run my business as an S-corporation.

I have had to pay for a payroll service to handle some of my IRS obligations and an accountant to handle others, and together the costs of these services add up to more than $1,000 annually. That’s a lot of extra money for a small business owner to pay.

3. The pressure I felt to work more hours

Finally, once I became responsible for running my own business, I ended up being surprised by how much pressure I put on myself to always be doing more. Since I’m in direct control of my income, I’d find myself thinking it wasn’t worth it to watch that TV show or read that book when I could just work an extra hour and make more money.

I’ve had to put some limits in order to regain work/life balance, but it took some practice and a change in mindset to get to the point where I wasn’t just focused on working all the time to make my business a success.

If you’re starting your own company, you may face similar surprises — or other unexpected challenges of your own. The good news is, I’m still really happy running my company despite these issues, and hopefully you will be too.

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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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Yes, credit card interest rates matter. Read on to learn how your card’s APR will affect your personal finances. 

Yes (spoiler alert), credit card interest rates matter. Your card’s annual percentage rate (APR) tells you how much it will cost to borrow money on your credit card. And with many of today’s credit card APRs reaching well above 20%, it’s important to take this into consideration if you plan on carrying a balance on your card.

Regardless of its overall importance, a credit card’s APR could be insignificant to you personally if you’re a careful borrower or you hold a certain kind of credit card. With that in mind, let’s take a look at which circumstances make your credit card’s APR less impactful on your personal finances.

Pay your balance in full and you can forget about credit card interest

First off, it’s important to realize credit card companies don’t charge interest right away. You typically have some time between when you make a purchase and when interest starts accruing. Credit card companies will package all your purchases within a billing cycle and send the total outstanding balance as a credit card statement to you. You have until the statement’s due date to pay the full balance before your card’s APR kicks in.

So, the easiest way to avoid credit card interest is to pay your full balance before the due date. If you do that consistently, you’ll never have to worry about your card’s APR.

On the other hand, if you don’t pay your full balance before the due date, then your credit card’s APR really starts to matter. Your outstanding balance — the portion you haven’t paid — will carry over into your next billing cycle. Your credit card company will charge interest on the unpaid balance, which will accrue until you pay it off.

Keep in mind paying your balance in full isn’t the same as paying the “minimum.” When you see the minimum on your credit card statement, this is the minimal amount you’d have to pay to avoid late penalties. If the minimum is less than your outstanding balance, you’ll accrue interest if you leave the balance unpaid.

Credit card interest doesn’t matter if you have one of these credit cards

One way to avoid credit card interest for a limited period is to get a 0% intro APR credit card. These cards won’t charge interest for a specific amount of time, sometimes as long as 21 months. They can be useful when you’re expecting large purchases in your future, or for transferring balances from credit cards with higher APRs.

But you should still be careful with these cards. The 0% intro APR does come to an end. And when it does, you’ll pay interest on your unpaid balances, not from the day the 0% intro period ended, but from the day you made the purchase. So if you make a large purchase on day one of a card with a 21-month 0% APR period, you’ll pay interest for that full period if you leave the purchase unpaid after 21 months.

APR matters regardless of what credit card you have. Even if your card has an intro 0% APR, you still want to use your card with a financial plan, as you don’t want to be stuck with credit card debt when the go-to APR becomes significantly higher. So long as you use your cards with discretion, your credit card interest doesn’t have to become significantly stressful, and you can hold on to the full value of rewards without sacrificing them to credit card debt.

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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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