Money Management

Bundling insurance policies can come with generous discounts and other benefits. Learn why bundling coverage may make sense. 

When buying insurance, chances are good consumers will be encouraged to purchase multiple policies from the same carrier. This is often called bundling coverage, and consumers are typically offered a discount for it.

There are some definite advantages to bundling, so it’s worth thinking about whether it makes sense to get home insurance, auto insurance, and other policies from just one source. In fact, here are four considerations that provide compelling evidence that bundling is the right move for many consumers’ checking accounts and peace of mind.

1. Discounts are available for bundling

Bundling can lead to bargains. Typically, consumers save between 5% and 25% off the price of coverage by buying multiple policies from the same carrier. In fact, the more policies a person buys, the bigger the discount in most situations.

In our household, for example, we bundle insurance for several homes, several cars, and several businesses — and doing so saves us hundreds of dollars in combined premium costs compared to purchasing every policy separately from different insurance carriers.

2. It’s more convenient to have just one insurer

Bundling coverage can also be a lot more convenient. Since all of my policies come from one company, I only have to deal with one insurer if I have questions about my coverage. I don’t have to remember which insurer should be paid premiums or keep track of the contact details of multiple carriers. I just have one place to call and send a check to.

3. Making claims may be easier with only one insurer

It can also be easier to deal with claims when there’s only one insurer — especially if there may be questions about which policy should cover a specific kind of damage.

Say, for example, a tree falls on a vehicle while it is parked in the homeowner’s driveway. The auto insurer could potentially cover this because this might fall under the driver’s comprehensive coverage. But the homeowner’s insurer may also cover this under the structural insurance component of a policy. If there are multiple insurers involved, sorting this kind of issue would become a lot more complicated than if one company just covered everything.

4. Eligibility for umbrella insurance may depend on bundling

Finally, there’s another very important reason to bundle insurance coverage: Having multiple insurance policies from the same carrier may be necessary to get umbrella insurance.

Umbrella insurance is secondary insurance. If a claim is made against a policyholder that is in excess of the policy limits, umbrella insurance can pay. For example, if a driver with $200,000 in property damage liability coverage per person was sued by someone for $1 million and was found liable for that much in damages, the auto insurer would pay the first $200,000 in covered losses, and the umbrella insurance would cover the rest up to policy limits.

Typically, if a consumer wants umbrella insurance to cover them in most situations — such as if they are sued for a substantial sum either because of an accident on their property or in their vehicle — then they must have their auto and home insurance with the same company offering the umbrella policy.

While there are some limited exceptions to this, when I purchased umbrella coverage many years ago, I had to cancel my existing auto insurance with a different carrier and buy my home, auto, and umbrella policy from the same company. It was worth bundling to be able to get this added protection.

All of these are good reasons to consider bundling insurance coverage — but consumers should still be sure to shop around and compare options for both bundled and unbundled policies to make sure they get the best policies for their needs.

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This writer has certain expenses she refuses to shed, even if economic conditions worsen. Read on to see what those entail. 

At this point, it’s unclear as to whether we’re heading into a recession in 2023. The Federal Reserve said earlier this year that it expects a mild recession lasting two years. But unemployment is low and jobs are still plentiful, so that doesn’t quite track with all of the recession warnings we’ve been hearing.

Still, at some point, we’re apt to find ourselves grappling with a recession, whether it’s later in 2023 or sometime in the future. And once a recession does hit, many of us will inevitably have to make some spending changes to compensate.

I, for example, will probably cut back on costlier social activities, like going to concerts, if a recession hits and impacts my income. My family might also travel less. But here are a few non-essential expenses I intend to keep paying for during a recession — even if I have to dip into my savings account to cover them.

1. My kids’ activities

My kids are signed up for a host of extracurricular activities, from soccer to martial arts to piano lessons. These are things my kids work hard at. My daughter who takes piano lessons practices every morning before school, while my son is vigilant about doing push-ups and sit-ups so he’s equipped to handle his martial arts training.

I wouldn’t want a recession to stop my kids from doing the activities they enjoy. Pulling them out even temporarily might cause them a world of distress and lead to them falling behind. Plus, some of these activities serve as a social outlet for them, and I wouldn’t want to take that away.

2. Quality food

My family eats a lot of produce and other fresh food. And so if a recession were to hit, I’d do my best to continue putting lots of fruits and vegetables on the table because that’s really important to me.

Now, I can admit that my family also dines out and orders takeout on a regular basis. But I’d be willing to cut back on prepared meals and do even more cooking than I do already in order to continue buying quality groceries for my family.

3. Streaming services and cable

We all need a way to unwind at the end of the day. And sometimes, for my kids, that means watching a little TV. I wouldn’t want to take that away from them during a recession.

What’s more, my son and I in particular are huge sports fans. We watch hockey together throughout the season and enjoy watching baseball as well. I wouldn’t want to miss out on seeing my favorite teams play during a recession, so I’d rather make sacrifices like give up downtime to do my own home maintenance than cut the cord or cancel streaming services (though to be fair, right now I pay for several, so I’d conceivably cancel one or two of those services if need be).

The idea of a recession can be daunting, and some people might have to make changes to their spending habits to get through one. If a recession were to result in a reduced income for me, I’d obviously have to roll with it and make adjustments. But I’d cut my spending in a whole bunch of other categories before messing with the ones above.

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Is a Costco membership fee hike in the cards for this year? Read on to find out and learn why it likely wouldn’t be a big increase. 

There’s a reason Costco charges members a fee to get in the door. The warehouse club giant uses those fees to help offset its costs and generate revenue. And it’s because of those fees that Costco is able to offer such low prices on the various goods it stocks. In fact, you may find that when you shop at Costco, you end up with a much lower credit card tab compared to the other stores you might frequent for things like groceries and household essentials.

Right now, a basic Costco membership costs $60 a year, while an upgraded executive membership costs $120. If you buy the executive membership, you get to enjoy 2% cash back on all Costco purchases, including online orders.

But you may not want to get too used to those numbers. Costco is actually overdue for a membership fee hike. And so it wouldn’t be surprising to see the warehouse club giant make changes to its fee structure before 2023 comes to a close.

Members should brace for a fee hike, though it’s not guaranteed

The last time Costco raised fees was June 1, 2017. Prior to that, fees went up on Nov. 1, 2011.

Based on this cadence, Costco should’ve raised its fees already earlier this year. The fact that it didn’t doesn’t mean that a fee hike isn’t in the cards for 2023.

Like many retailers, Costco has had to bear the brunt of inflation. And if it wants to continue to be able to offer such high-quality products to customers at such low price points, it may need to compensate by raising fees.

Now to be clear, it’s not like Costco has set a date for its next membership fee hike or stated explicitly that fees will be going up in 2023. But at some point, it’s apt to get more expensive to be a Costco member, so fans of the store ought to brace for that.

A fee hike may not be all that bad

At a time when living costs are soaring due to inflation, nobody wants to see their bills increase. But the reality is that if Costco does decide to raise membership fees this year, they’re unlikely to rise by a substantial amount.

In 2017, Costco raised the cost of a basic membership by $5, while the cost of an executive membership rose $10. There’s a good chance that if fees rise in 2023, members will be looking at a similar increase. That would take the cost of a basic membership from $60 to $65 and make an executive membership $130 instead of $120.

When we break these figures down on a monthly basis, consumers may be looking at as little as $0.42 extra per month for a basic membership, and as little as $0.83 a month more for an executive membership. That’s less than the cost of a hot dog and soda combo at Costco’s food court.

So all told, Costco fans shouldn’t lose sleep over the idea of a membership fee hike. It may be an unwanted change, but it’s unlikely to be a financially devastating one.

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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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Is buying a timeshare a good idea? Read on to learn finance guru Dave Ramsey’s perspective. 

Making the right financial decisions all the time can be tough, and it’s inevitable that you’ll make mistakes during your life that will affect your checking account balance. But while putting a few extra purchases on a credit card or making other minor errors are often easy to recover from, there are certain financial choices you’ll want to make absolutely sure to avoid.

Dave Ramsey has identified one such choice, and in particular, called it a “horrible financial decision.” Here’s what it is.

Dave Ramsey has a big warning about this type of purchase

According to Ramsey, one financial choice you’re almost sure to end up regretting is purchasing a timeshare.

Essentially, with a timeshare, you buy the right to stay at a certain vacation property for a set period of time each year. But in addition to the upfront cost of the timeshare purchase — which can be very expensive — you also get stuck paying annual maintenance fees as well.

Ramsey also warned about vacation clubs, which are similar to timeshares but allow you to buy the right to stay at one of many different resorts or locations that participate in the club.

Ramsey believes each of these types of purchases should absolutely be avoided because the downsides outweigh any possible benefits. And he’s correct about that.

Here’s why Ramsey is absolutely right

Dave Ramsey is 100% right when it comes to timeshares. These are a money-trap that cost you a fortune and actually provide very little benefit in the end.

The upfront costs of timeshares are astronomical, with the American Resort Development Association (ARDA) reporting the average initial cost to buy at $24,140 to purchase a week’s time at a vacation resort. You’ll also have to pay maintenance fees, which can total thousands of dollars more each year. In fact, older data from the ARDA estimated annual maintenance costs at $1,290 per year for a unit with three or more bedrooms.

Some timeshares also tack on other fees, such as costs to book your stay at your resort. And timeshares may also impose special assessments on owners under certain circumstances, depending on the terms of the original agreement.

In exchange for all this money, you get the right to stay at your resort — usually for about a week or two. Now, you could buy a lot of nights in a hotel for $24,140 upfront, not to mention the $1,290 or so that you pay in maintenance fees each year. And you get to choose where to purchase a hotel stay and whether you want to or not. With a timeshare, even if you can’t go on vacation one year for some reason, you’re still stuck with the costs.

Timeshares also don’t give you a valuable asset you can resale, unlike when you buy a vacation home, as timeshares often sell for $1 because people just want to get out of their obligation to pay annual fees.

There’s no reason for anyone to waste money buying into this system, which is why you’ll often see resorts doing a very hard sell on timeshares (for example, offering you free nights in exchange for listening to a timeshare presentation). Do not fall for this. Ramsey is right, and a timeshare is something you should just say no to.

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Small business owners can glean a wealth of knowledge and inspiration from the hit television show Shark Tank. Read on for some applicable lessons. 

Shark Tank is a popular reality television show that provides a platform for entrepreneurs to pitch their business ideas to a panel of seasoned investors called “sharks.” The show has become incredibly popular over the years, and has inspired many small business owners to pursue their dreams. Shark Tank is not just an entertaining show; it is also a valuable source of business knowledge.

1. Believe in your business idea, but be realistic

The first lesson that small business owners can learn from Shark Tank is to believe in their business idea. Many entrepreneurs who appear on the show are passionate about their businesses, and they have a clear vision of what they want to achieve.

The sharks can sense when someone is truly passionate about their business, and they are more likely to invest in a business when they see that the entrepreneur believes in their idea.

While passion is crucial for success, it’s important to acknowledge the challenges and limitations of your business.

By being honest and practical, entrepreneurs can make informed decisions, identify areas in need of improvement, and continue to grow and innovate. When it comes to attracting investors, it’s important to focus on the present rather than solely considering idealistic or hypothetical scenarios.

2. Know your numbers

The sharks on Shark Tank are notorious for asking tough questions about finances. Small business owners who want to succeed need to know their numbers inside and out. This includes revenue, expenses, profit margins, how much is in their business bank account, and more.

In one episode with a food truck selling lobster, the co-founders learned that “just because your company is making money, it doesn’t mean you are.” Owners are so focused on running their business that they are not keeping track of their finances.

Understanding your financial data will help you make informed decisions about your business. Sharks often ask funding sources for the business, operating costs, market share, and other important metrics.

3. Be prepared for rejection

One of the challenges of entrepreneurship is dealing with rejection. Rejection is a common occurrence in the business world, and it can be tough to handle. The entrepreneurs who appear on Shark Tank face rejection all the time, but they never give up on their dreams.

In the first 10 seasons of the show, only 55% of contestants received a deal. Venturing into entrepreneurship can be challenging, and at times, discouraging. But, persistence pays off, and success awaits those who keep pushing until they finally receive that one positive response.

It takes only one “yes” to officially kickstart your business journey. Stay motivated, and you’ll soon be on your path to success.

4. Solve a problem with a unique solutions

Uniqueness is the key to standing out in a market full of competitors and copycats. It could be an unusual business idea, a creative approach to an existing model, or perhaps a product that has never been seen before.

But it’s not enough to just be unique. A business must also solve a problem. Whether it’s a gap in the market that needs to be filled or a problem that consumers face daily, businesses should offer a solution that people can’t find anywhere else.

Identifying a problem and then crafting a unique solution is crucial for any business to thrive, and it’s what sets apart those who succeed from those who do not.

5. New doors open when you expand your network

As an entrepreneur and small business owner, it’s important to recognize the value of networking and connections. Shark Tank itself provides a prime example of how a strong network can impact the success of a business. The sharks, successful and influential investors in their own right, bring a wealth of knowledge and connections to the table.

By expanding your network and who you know, you open yourself up to opportunities for growth and success. Building relationships with other industry professionals, attending networking events, and utilizing social media can all lead to invaluable connections.

Shark Tank is not just an entertaining television show; it is also a valuable source of business knowledge. By watching the show, small business owners can learn important lessons about entrepreneurship, including knowing their numbers, being prepared for rejection, and being adaptable. These lessons can help entrepreneurs build better, more successful businesses, and achieve their dreams.

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

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