Money Management

Is your salary too low for life insurance? Read on to find out. 

There are a number of big misconceptions about life insurance that commonly lead people not to buy it. One such myth is that you don’t need life insurance if you don’t have kids. Another big myth is that it doesn’t pay to apply for life insurance when you’re young, because in that case, you’re paying your premiums for extra years.

One more persistent myth about life insurance is that if you’re a low earner, there’s no point in getting it. After all, it’s one thing for someone with a $100,000 salary to put life insurance in place. But if you only earn $30,000, is there really a point?

The answer is, absolutely. And while you may not need a particularly large life insurance policy if you make a $30,000 salary, you should have that protection nonetheless.

Your income almost doesn’t matter

The amount of money you earn should really not be a factor in deciding whether to get life insurance (though it should be a factor in how much life insurance you get). Rather, if you’re on the fence about life insurance, all you really need to ask yourself is: Are there people I care about who stand to get hurt financially in the event of my untimely passing?

It’s true that $30,000 is not a very high annual salary. But maybe your family makes it work. Maybe you’re married with a spouse and a child, and you maintain a very frugal lifestyle so you’re able to get by on a salary of that size. If that’s the case, kudos for spending carefully and making the most of that income.

At the same time, recognize that your family relies on your $30,000 annual salary. Let’s assume you’re the sole breadwinner in your household. If you were to pass away, how would your surviving spouse and child pay their bills?

That’s why you need life insurance regardless of how much you earn. You don’t want to leave your loved ones in the lurch.

You may not need a huge life insurance policy

The cost of your life insurance policy will depend on a host of factors, including your age, your health, and the amount of insurance you’re looking to buy. Financial expert Dave Ramsey says that a 32-year-old man buying $1 million of term life insurance is looking at a monthly premium of $55.50, on average, for a 20-year policy. But if you only make $30,000 a year, you probably don’t need a $1 million policy — not even close.

As a general rule, it’s a good idea to get enough life insurance to replace your income 10 times over. So if you make $30,000 a year, that means you might be just fine with a $300,000 policy. If so, you might end up with a monthly premium you can swing fairly easily.

You might assume that being a lower earner means you don’t have to think about life insurance. But remember, whatever income it is that your family lives on, that’s the income they’ll need to replace if you’re not around to work. So rather than assume you don’t need life insurance, make an effort to shop around for quotes from different life insurance companies so you can put what’s hopefully an affordable policy in place.

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.The Motley Fool has a disclosure policy.

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Raising kids is expensive. Read on to see how one parent manages to save. 

It’s hardly a secret that raising kids is an expensive prospect. But even to this day, it shocks me to see just how much money parents need to part with so their kids can eat, attend school, and function.

Thankfully, I’ve developed my share of strategies to save money while caring for three small humans. Here are some of the tactics I rely on to keep my costs manageable.

1. Ask for and accept hand-me-downs

Kids tend to rip, stain, and outgrow clothing at a pretty rapid clip. That’s why I basically refuse to spend more than $5 or so on t-shirts and more than about $10 on pants. Some of this stuff is going to last a month or two in my house, if that, so it’s not worth paying up.

But an even better way to save money on kids’ clothing is to ask for and graciously accept hand-me-downs from friends whose children are older. Through the years, I’ve gotten bags of clothing for my son and daughters alike, and it’s probably saved me hundreds of dollars. That’s money I appreciate keeping in my savings account instead of handing it over to Walmart.

2. Buy as much as you can from dollar stores

When you have kids, there will pretty much always be a need for school supplies, items to craft and do projects with, and goody bag fillers (whether for birthday parties you’re hosting or class parties you’ve gotten suckered into coordinating). A good tactic I use to save money on those purchases is to get them at dollar stores.

Recently, my son needed markers to create a presentation. A quick Amazon search showed me that a 12-pack would cost me around $7. Instead, I went to the dollar store, which is five minutes away from my house, and spent $1.25 on a 12-pack (sadly, things at the dollar store are no longer just a dollar, but they’re fairly cheap nonetheless).

Now to be fair, the markers I saw on Amazon were made by Crayola. I call those the fancy markers, as opposed to the no-name brand markers I buy at the dollar store all the time. But I can guarantee that my son doesn’t care what company name is printed on his markers — he just needs the tools to get his assignments done.

3. Pick your extracurricular activities strategically

Years ago, I was thinking about signing my daughters up for a gymnastics program a few towns over. I happened to run into a mom friend at the supermarket whose daughter was enrolled in the program I was looking at. When I asked her about it, her initial reaction was “Don’t do it — unless, of course, you want to have to choose between paying your mortgage or buying gymnastics uniforms.”

She then went on to explain that she’d actually gone back to work part-time, even with an infant at home, for the express purpose of being able to afford gymnastics classes and the many peripheral expenses that came with it. Well, that sealed the deal for me. And needless to say, my daughters did not get enrolled at that particular school.

The point is that extracurricular activities for kids can be outrageously expensive. But there’s a spectrum there. And if you’re looking to save money and minimize your credit card bills, it pays to do your research and opt for activities that won’t break the bank.

Of course, if your child is an Olympic hopeful, then you may want to spring for the more expensive gymnastics program. Since this was something my daughters would’ve done solely for fun, I found them something else fun to do at a fraction of the cost.

Raising kids is extremely rewarding. It’s also very, very hard — aside from the financial aspect. But if you employ these tricks, you might find that the money part is a bit less daunting.

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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.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. The Motley Fool has positions in and recommends Amazon.com and Walmart. The Motley Fool has a disclosure policy.

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Does your tax refund serve as a lifeline? Read on to see why you need a better system. 

Now that the 2023 tax-filing deadline is well behind us, a lot of people have already seen their tax refunds hit their checking accounts this year. And if you were waiting on your tax refund to cover some important bills, like your utilities or most recent car payment, you’re certainly not alone.

More than 30% of tax-filers said they rely on their refunds to make ends meet, according to a recent survey by No Deposit.Guide. But that’s a pretty dangerous pattern to uphold.

Why you shouldn’t be reliant on your tax refund

Some people look at their tax refunds as extra money. In reality, your tax refund is your money that you didn’t collect as you earned it.

But the main problem with relying on a tax refund to cover essential bills is that a refund isn’t guaranteed. Let’s say you just got a $2,400 refund from the IRS. What if next year’s refund only amounts to $1,600 due to different factors, whether it’s earning more interest on money in your savings account or getting a raise at work? If you’re counting on a $2,400 sum to do things like pay your property taxes or cover maintenance for your home, and you end up with $800 less, you might wind up with a big problem on your hands.

Another reason it’s not a good idea to rely on a tax refund for essential bills? Your goal should be to collect as small a refund as possible.

A smaller refund means you’re getting more of your money upfront, as it’s being earned. That’s far more ideal than having to wait months to receive a portion of your income.

It may be time to rethink your budget

It’s okay to use your tax refund to pay bills if you so choose. But you shouldn’t be reliant on that refund to pay bills. Or, to put it another way, a smaller refund should not put you in a position where your essential expenses aren’t payable.

If you’re currently dependent on your tax refund to pay for basics, consider it a wake-up call to rethink your budget and spending. Take a look at your expenses and compare what you spend monthly to what you earn.

Keep in mind that you may be spending more money than you think you are these days due to inflation. But ultimately, you’ll want to make sure those numbers line up without factoring in your refund.

So, let’s say you bring home $3,200 per monthly paycheck. Your bills should not exceed $3,200 a month. Period. If they do, it’s time to cut back on some non-essential spending (for example, cable and restaurant meals) or pick up a side hustle to boost your income if there’s truly no expenses you can slash.

Although many tax-filers end up getting a refund every year, it’s money you shouldn’t be waiting on to cover things like your car payment or grocery bills. If you are, then it’s time for a serious budget overhaul.

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Buying a used car can be a major headache. But if you make this mistake, you could end up with a more expensive problem on hand. 

In November 2020, my 2007 Toyota Prius was swamped in a tropical storm that hit the west coast of Florida. The electrical system was fried and the battery pack permanently damaged. Fortunately, I had comprehensive coverage on my auto insurance policy, which returned a little less than 60% of what I had paid for it, and I began to look for used cars on Craigslist after the claim was paid out.

Without the Prius my family had no car, so we were eager to replace it with another. In that desperation, I jumped on a used 2013 Prius that was listed for $3,500, which was slightly more than the payout on the claim. The listing had been up for about 12 days — which should have been a red flag — but it was a good deal. I was so keen to buy it, I even took a 90-minute Lyft to get there — on Thanksgiving.

I bought the car — and still drive it today — but had I my wits about me then, I would have negotiated a much lower price than what I paid. It’s a big regret since I ended up paying $8,000 on the purchase! Here’s why I would have negotiated it lower.

The car had multiple problems

I took the car for a test drive with the owner present. The 2013 Prius was different from my 2007 and it took me a moment to get used to the dashboard. But once I figured out how to display the meter on the Prius battery, I noticed something wrong.

Anytime I accelerated, the battery would drop into yellow and red. It would spike into green when I braked. But the moment I gave it some gas the bars would drop and it would only maintain a battery charge that was about half what my 2007 could hold.

“Oh, that’s normal,” the owner said. “It’s been doing that since I bought it.”

If you’re unfamiliar with Priuses, the battery pack is arguably the most important component on the vehicle. These packs cost anywhere from $2,000 to $5,000 to replace, depending on how much your mechanic charges for labor, and when they die, the car becomes immobile. Batteries usually last about 200,000 miles, but they can die more quickly if the owner drives the car recklessly.

Unless you know how to test Prius battery cells with a multimeter, the best way to inspect one is to read the battery meter on the dash. I knew the rapid drop in bars meant the battery was going bad. But, half believing the owner and half indulging in wishful thinking, I ignored it.

It wasn’t long after we bought the car that we got the red triangle of death. “Check hybrid system,” the dashboard said, “Stop the vehicle in a safe place.” We had to pay for a tow truck ($100) to haul it to a shop that serviced Priuses. It took a few hours before the mechanic called us with the diagnosis: not only was the battery pack dying, but the 12V battery was also dying. The car’s tires were also balding and needed to be replaced ASAP.

We paid $3,500 for the Prius, which seemed like a steal. But then we paid $3,700 for the battery pack (parts plus labor), $400 for a new 12V battery, and another $400 to replace the tires. All in all, we spent roughly $8,000 for a Prius that had 187,000 miles on it and an exterior that had been abraded significantly by sand.

Never buy a used car at the asking price

If I could return to that Thanksgiving afternoon, I would not have let the owners know I was desperate and would have instead negotiated the price further down.

As it were, the owners knew I needed that car; I mean, who takes a 90-minute Lyft on Thanksgiving unless they have no other choice? They also used my situation to their advantage: I was interrupting their Thanksgiving, and they had “other buyers” who were coming out to look at the car the next day.

Plus: I was at their house without a way to get home. They knew I needed that car, and they had already stated they were not willing to budge on the price.

Now, I’m no stranger to buying used cars. In fact, this is the fourth used car I’ve bought in six years. I’ve negotiated prices before, and I’ve walked away from cars that were clearly lemons. But this time I made a crucial mistake: I went to the car believing I had no other choice, which, psychologically, rewired my brain to ignore red flags.

What I should have done was resist the “scarcity mentality.” That is, the belief that if I didn’t buy that Prius on that Thanksgiving day, I was not going to find a better deal. It was an impulsive decision and it cost me another $4,000.

Go with your gut. If you feel apprehensive about a used car, spend some time investigating. Give it a thorough inspection — at least check the tires! — and pay close attention during the test drive. Even if the car checks out, don’t buy it without at least throwing up a counteroffer. Most owners aren’t experts at appraising their vehicles, and who knows — they might be more desperate to get rid of the car then you are to buy it. Your personal finances will thank you.

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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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Pet insurance for dogs usually costs around $50 per month. But some dog breeds will cost even less than that. Read on to discover which. 

Pet insurance for dogs can help you pay for injuries and illnesses that warrant a visit to your vet’s office. Premiums on pet insurance cost on average $50 for dogs. But if you own a small dog, you’re in luck — the cost to insure most smaller breeders is between $33 and $50.

Of course, multiple factors can influence how much you actually pay monthly for pet insurance. For instance, older, smaller dogs can cost just as much to insure than some younger, larger dogs. Other contributing factors include your location, the sex of your dog, your deductible, and how much coverage you buy.

But, generally speaking, certain dog breeds are cheaper to insure than others. Below are the 15 cheapest dogs for pet insurance, according to a study from Spot Pet Insurance by way of LendEDU.

As a reminder, an accident-only policy (AO) provides coverage only for injury-related vet bills, such as car accidents and lacerations. An accident and illness policy (A&I) will provide coverage for accidents, plus illnesses, such as cancer.

How can you save on pet insurance for your dog?

If you have a small dog, but you’re paying more than the average cost for its breed, there are a few ways you can cut monthly premiums.

For one, you can look for discounts. For instance, many insurance companies will cut the total annual cost of your premium if you pay the full year upfront, rather than month to month. You might also get a discount for buying pet insurance for more than one pet, or a reduction on all your insurance premiums — car, home, and pet — if you bundle your policies with one insurance company.

You could also choose a lower reimbursement or a higher deductible. Both of these will lower your premiums, but could potentially raise your out-of-pockets costs.

Perhaps the best way to save on pet insurance is to shop around with different insurance companies. Pet insurance prices can vary widely from company to company, and you won’t know which company will offer you the best rate until you compare different quotes. You can look at some of the best pet insurance companies to get started, but feel free to compare these with local companies as well.

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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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Many of us know about the gender pay gap. But read on to learn more about the housework and caregiving gap. 

The fact that the gender pay gap exists is hardly a secret. Women commonly earn less money than their equally qualified male counterparts. As a result, women tend to have less money in savings for both near-term goals as well as future ones. And many surveys have shown that women tend to lag behind men when it comes to retirement confidence. After all, the less you make, the harder it becomes to fund a retirement plan.

But new Pew Research Center data shows that it’s not just the gender pay gap that women need to deal with. There’s also a housework and caregiving gap that sorely needs to be addressed.

Women are doing more than their fair share

In opposite-sex marriages, it’s still more common for men to be the primary breadwinners, as opposed to women, according to Pew. But that said, the number of women who earn as much as or more than their male spouses has roughly tripled over the past 50 years.

In fact, 29% of married couples have both the male and female spouse earning about the same amount of money. But even in situations like that, research shows that women tend to bear more of the load when it comes to things like household tasks and caregiving. Men, by contrast, tend to have more time for things like career development and leisure.

Not only does this hold true in marriages where both parties earn the same amount of money, but it also applies to married couples where the female spouse is the higher earner. The only setup that has men doing the bulk of the caregiving is one where the sole breadwinner in the household is female. And even then, men and women tend to split housework evenly — despite women being the only ones to go out and earn a paycheck.

Make sure you’re not overburdened

Even in marriages where men respect their wives’ financial contributions to the household, it can be easy to fall into stereotypical patterns that have women picking up the bulk of the load when it comes to caregiving and chores. Now, if you’re in a marriage where one of you works part-time and the other works full-time, it stands to reason that the person working fewer hours should do more housework and caregiving — regardless of gender.

But let’s say you and your spouse both work the same number of hours and earn the same wage, more or less. If you feel that you’re doing more than your fair share of housework and caregiving, it’s time to speak up about it — before it negatively impacts your marriage and mental health.

The best bet in this type of scenario is to have an open conversation. Make a list of your household chores and caregiving tasks that need to get done, and devise a system to divide that work evenly. If both you and your spouse work until 6 p.m., you might agree that one of you will fetch your kids from after-care at school and take them to an extracurricular activity while the other throws in laundry and prepares dinner.

In the morning, you might agree that one of you will make breakfast and help your kids pack their school bags while the other prepares lunches and tidies up. And on weekends, one of you might shuttle your kids to a birthday party and chaperone while the other vacuums and cleans bathrooms.

You deserve to have an opportunity to focus on growing your career, and you also deserve to enjoy downtime. If you feel you’re not getting to do those things because you do the bulk of your housework and caregiving while also holding down a job, then it may be time for a long talk with your spouse — and a serious overhaul in the way you run your household.

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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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