Money Management

Homeowners in Florida face dramatic hikes in their insurance costs, so much so that some are considering leaving the state. Find out how you can reduce your premiums. 

What happened

Insurance premiums in Florida are double or even triple what they used to be, according to a recent USA Today article. In addition to charging considerably higher premiums, some providers have ended people’s coverage altogether. Other policyholders are being asked to make significant renovations, such as buying new roofs. “Florida’s homeowners’ insurance market finds itself in peril,” said the Insurance Information Institute.

So what

Florida has borne the brunt of several significant storms in the past decade, including hurricanes that caused wind damage and flooding. There are also accusations of high levels of fraud. These factors have led some insurers to scale back operations in the state. Others have gone bankrupt.

USA Today spoke to homeowners who have already dipped into their retirement savings, drastically cut costs, and borrowed money to cover their insurance payments. Some Florida residents are considering moving elsewhere, and others have opted to go without property insurance altogether.

Now what

The challenge for Floridians is that there’s only so much they can do. The Insurance Information Institute says there’s a lot that needs to happen at a state level to tackle insurance fraud and mitigate the impact of extreme weather events.

Even so, there are steps you can take to minimize insurance costs, whatever state you live in:

Compare rates: It can be time consuming to shop around for the best rates, but it is a good way to make your premiums more affordable. Get quotes from several top homeowners insurance companies to find the best deal for your situation.Weather-proof your home: If you’re able to upgrade your roof, windows, storm shutters, or doors, your home will be less vulnerable to storms and hurricanes. Other improvements such as security systems, smoke detectors, and carbon monoxide monitors can also make a difference. Inform your insurer of any improvements as soon as you make them.Look for discounts: There are a number of discounts available on home insurance. For example, you might be able to swing a lower fee if you bundle your home and auto insurance or have a homeowners association.Increase your deductible: If you have a decent emergency fund and are able to cover a decent chunk of repairs without filing a claim, consider a higher deductible. This would mean you’d have to pay more out of pocket if your house gets damaged, but you’d also pay lower premiums year round.

Hurricane season is fast approaching, making it a good time to storm proof your home and finances. Stock up on food and drinkable water and make a plan with your family on what you might do in an emergency. In terms of your insurance, make sure you understand what your policy does and does not cover, and consider taking extra flood insurance if you are able.

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Buying a home could be the most expensive purchase you ever make. Keep reading to learn how to approach it in spite of an unfavorable market for buyers. 

For many people, buying a home is the American Dream. April is Financial Literacy Month, so this is an especially great time to dig into what you need to do to make it happen. It’s not a great market for buyers right now, as home prices are still elevated from the salad days of earlier in the COVID-19 pandemic. To add insult to injury, mortgage rates are still high too — as of this writing, Freddie Mac is reporting that the average rate for a 30-year fixed mortgage is 6.27%. That’s up from 5% just a year earlier.

There’s a lot buyers can’t control, but luckily, there are a few things you can. Here are three tips to help you focus on your finances ahead of buying a house.

1. Get your credit in good shape

Your credit score helps to determine the interest rate you’ll pay on your mortgage, as well as which lenders will approve you. You may be able to get a government-backed mortgage loan with a lower credit score. For example, FHA mortgage lenders generally require a credit score of 580 to make a 3.5% down payment, or 500 with a 10% down payment.

But if you’re hoping to have your pick of many lenders and have your sights set on a conventional mortgage, a score of 620 is the generally accepted minimum for approval. Get your credit score above 700 (or higher if you can) and you’ll likely have many more options (and qualify for lower interest rates).

If you’re ready to tackle your credit, start by getting a copy of your credit report. These are free every week through the end of 2023, and you’ll have one from each of the three major credit bureaus (Experian, Equifax, and TransUnion). Look through it and make sure that all the accounts listed are yours and are accurate. If not, you can dispute entries with the credit bureaus. Credit report errors are quite common, and having them removed can boost your score.

Other ways to improve your credit include paying down debt and making your payments to your creditors on time every month. These two factors (amounts owed and payments history) combined make up almost two-thirds (65%) of your FICO® Score, so focusing on them can have a major impact.

2. Save money for a down payment

The biggest hurdle to get over for many people who want to buy a home is the down payment. While it’s a good idea to put down 20% if you can (because you’ll spare yourself from having to pay for mortgage insurance and lessen the chances of ending up underwater on your loan), it isn’t a strict requirement.

Consider lower-cost mortgage options if you’re otherwise in good shape financially and can swing the cost of mortgage insurance (which is a monthly cost for conventional loans and an upfront and monthly cost for FHA loans). Note that for other government-backed mortgages with low or no down payment required, like USDA and VA loans, there are upfront funding fees you’ll be responsible for paying.

While you might be able to cut back your discretionary spending to save more for a down payment, you may come to resent the whole process if you no longer have any money to spend on things you enjoy. A better idea might be to get a side hustle and dedicate your income from that (minus taxes, of course) to home-buying expenses.

3. Shop around for a mortgage loan

If you’ve got a chunk of money saved and solid credit, you’ve put yourself in a good position to start vetting mortgage lenders. There are a ton out there, from your community credit union or hometown bank to online-only lenders. You can get pre-approved by more than one and compare what each offers in terms of loan types, amounts, and interest rates. It’s best to apply for multiple loans within 14 days of each other, however, so your credit score doesn’t take a big hit; multiple mortgage loan inquiries within a short period of time will count as one. When you find the best deal for you, you’ll be ready to find the home of your dreams.

If you’re hoping to become a homeowner sooner rather than later, keep the above tips in mind. Saving money, boosting your credit, and exploring all your options for mortgages are the best favors you can do for yourself to make buying a home a reality.

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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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Following the wrong financial advice can cost you. Here are four bad money rules that Wall Street expert Vivian Tu says you should always avoid. 

Lots of financial advice is making the rounds on social media, and unfortunately, it’s not all good advice. While there are trustworthy financial influencers, there are also plenty who share terrible ideas in the hopes of gaining more followers and selling products.

Wall Street expert Vivian Tu is one of the trustworthy ones, and she shares quality personal finance advice on her channel, Your Rich BFF. Recently, she published a video with four bad pieces of money advice that she says you shouldn’t listen to.

1. Day trading

Day trading is when you buy and sell stocks on a daily basis. This is a popular get-rich-quick scheme, and there are tons of grifters on social media who pretend it’s a great way to make money. They’ll tell you how much they’ve supposedly made, pose next to rented Lamborghinis, and explain how all you need to do is buy their course to start making the big bucks.

Research has proven that day trading is not, in fact, a great way to make money. Tu says in her video that 85% of day traders lose money in the long term, and that’s likely the conservative estimate. It could be as high as 95%. Either way, those are lousy odds. You’re much better off with long-term investing, which has proven to be a much safer path to building wealth.

2. Avoiding all debt

Debt often gets a bad rap. Some people consider debt bad and think you should avoid it at all costs. Tu disagrees and says that debt is a useful tool, with mortgage loans being one example. Her logic is that if you can borrow money for less interest than you can earn by investing it, you come out ahead.

This makes sense, and Tu also correctly points out that rich people use debt as a tool all the time. There’s no reason to fear debt or rush to pay off low-interest debt, like your mortgage, as fast as possible. However, this doesn’t mean you should have a cavalier attitude about debt. You still don’t want to overextend yourself or take on high-interest debt, such as credit card debt, if you can avoid it.

3. Cutting small expenses

For decades, out-of-touch financial gurus have spent far too much time talking about cutting small expenses. As Tu puts it, “Starbucks is not the reason you can’t afford a house.”

Instead of micromanaging every dollar you spend, focus on the things that have a big impact. These include saving and investing consistently, and regularly looking for opportunities to raise your income. Investing 10% to 15% of your income could help you accumulate hundreds of thousands or even millions of dollars by the time you retire. If you can manage that, it really doesn’t matter if you splurge and treat yourself from time to time.

4. Canceling old credit cards

Tu’s final piece of advice is not to close your oldest credit cards. She says that doing so will shorten your credit history and ding your credit score. If you have a card you don’t want that’s costing you an annual fee, Tu recommends that you downgrade the credit card, which you can do by calling the card issuer.

It’s worth mentioning that Tu’s advice isn’t entirely correct here. When you close a credit card, it stays on your credit report for 10 years, so it doesn’t shorten your credit history anytime soon. During that period, it can still raise your average credit history and, in turn, your credit score. However, closing a card does mean that you lose its credit line. That can impact another factor, your credit utilization ratio, if you’re carrying any credit card balances.

As a general rule, it’s good to keep your credit cards open, especially your oldest cards. But it’s not an absolute must. Even if your score goes down after closing a card, it will bounce back if you continue managing your credit well.

With so much money advice out there, it’s important to separate the good from the bad. The four things that Tu mentioned are all tips that you can safely ignore.

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

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Pets come in all shapes and sizes, and while you’ll have to do some legwork to find a pet insurance policy for exotic pets, read on to see why it’s worth it. 

While these days, I share my home with three spoiled cats, for many years, I kept pet hamsters instead. I always liked hamsters, and I lived for several years with someone who was allergic to cats. And then I lived in a series of rentals that didn’t allow dogs or cats. If I were to keep hamsters again, though, I’d be seeking out pet insurance policies for them. I have had to find veterinary care for hamsters in the past, and it certainly wasn’t cheap.

Pet insurance works most often by reimbursing the pet owner for vet bills after the fact, so if your pet needs care, you pay upfront and then submit your bill to the insurer. Here’s why it pays to consider a pet insurance policy for your snake, lizard, parakeet, hamster, and beyond.

1. Exotic pets are prone to certain health problems

Part of having pets is learning how to best care for a species other than humans. This means feeding your pet the right food, keeping them in the right kind of enclosure or habitat, and understanding which diseases or health conditions they might be most prone to, so you can act fast if you notice symptoms. As you might expect, exotic pets are prone to different illnesses and injuries than your run-of-the-mill cat or dog. For example:

Lizards and snakes are particularly susceptible to intestinal parasite infections. They can suffer from stomach ulcers, intestinal obstruction, and even death as a result.Budgerigars (also known as budgies) who are fed all seed-based diets can become obese, leading to fatty liver disease and different types of tumors.Pet rats can suffer from a host of kidney and urinary ailments as they age, including kidney stones and bacterial infections.

2. Medical care (and other needs) for exotic pets isn’t cheap

Thankfully, conditions like the ones above can be treated by a veterinarian. Unfortunately, the cost of such treatment can be high. You will likely need to take your animal friend to see a specialized vet, for one thing. Exotic animal veterinarians have a few more training hoops to jump through than a vet who only works with dogs and cats, and as a result, you may have to pay higher fees for exams or specialized diagnostic tests.

Don’t forget to consider the cost of cages, food, and other supplies for your exotic pet, too. You can buy dog and cat food at the grocery store, but may have to special order or pay a premium (or both) for the right food for your lizard, large bird, or chinchilla. This could leave you with less money available for any needed vet care — and in an emergency, you don’t want to be wondering how you’ll handle that vet bill. With a pet insurance policy, you’ll know that some of your costs will be reimbursed.

3. You don’t want to go into debt for vet bills

Without a pet insurance policy, you might have to use money dedicated to your financial goals to cover your pet’s medical expenses. Or worse: You might go into debt to pay the vet, leaving you with a big credit card balance to pay off that could also be accruing interest. This isn’t an ideal situation.

Unfortunately, pet insurers offering policies for exotic pets are a bit more thin on the ground than those with policies for dogs and cats, so you will likely need to shop around. You might also consider a pet care discount plan, which isn’t the same as pet insurance, but can still help defray the costs of caring for your exotic pet.

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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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It’s springtime, and Americans continue to struggle with inflation. Fortunately, these five states still owe residents a round of stimulus checks. Read on for the details. 

For Americans struggling with the impact of inflation, help cannot come soon enough. And as tax season winds down, some states continue their efforts to help by sending more stimulus checks.

Many states have already pitched in

Naturally, the worst thing to come out of the COVID-19 pandemic has been the number of people lost to the virus. According to the World Health Organization (WHO), 1,118,800 Americans died of COVID-19 between Jan. 3, 2020 and Apr. 12, 2023. There’s no way to lessen the tragedy or to compare it to the financial struggles brought on by the pandemic.

Still, financial struggle is real, and nearly half of all U.S. states have already pitched in to help residents get back on their feet. Using billions of dollars in federal relief funds, states have lasered in on the residents most likely to benefit from the help.

Most states who’ve made promises have already carried through and checks have been deposited into bank accounts across their state. However, some residents of the following five states are still waiting for a check to hit their accounts.

1. New Jersey

State leaders in New Jersey decided to focus on income-based rebates. By May 23, homeowners earning up to $150,000 can expect a stimulus payment of $1,500, and those earning between $150,000 and $250,000 have an extra $1,000 to look forward to. New Jersey renters who earn less than $150,000 annually should receive $450.

2. New Mexico

By June, single tax filers in New Mexico can expect to receive $500, while married couples, heads of households, and surviving spouses are due $1,000. Households can put those funds toward anything, from making a rent payment to building an emergency fund.

3. Pennsylvania

Specifically looking to assist low-income Pennsylvanians age 65 and older; widows and widowers age 50 or older, and people with disabilities age 18 and older, Pennsylvania is sending out rebate checks. For homeowners, the annual income limit is $35,000, and for renters, it’s $15,000. Half of Social Security is excluded. The standard rebate ranges from $250 to $650, but qualifying homeowners can see their payment boosted to $975.

Eligible Pennsylvania residents who have not yet filed for the Property Tax/Rent Rebate Program are encouraged to on the state’s government website. Residents who would rather file a paper application can download a form and related information on the Department of Revenue’s website, or by calling (888) 222-9190. The deadline to apply is June 30, 2023.

4. South Carolina

South Carolina residents who filed their tax returns between Oct. 18, 2022 and Feb. 15, 2023 are eligible for a tax refund check of up to $800. The state has not released the date those checks are expected to be released.

5. Virginia

Virginians with a tax liability from the 2021 tax year and who filed their tax return by Nov. 1, 2022, are eligible for a one-time rebate payment of $250 for single filers and $500 for joint filers. While those who filed by Sept. 5 have likely received their checks, anyone who filed after that time can expect their funds later this year. Rebate payments may not be enough to take a deluxe vacation, but they can help offset the higher cost of groceries.

If it feels as though stimulus news has dragged on for years, that’s because it has. Once states had federal funds in their coffers they had to make some tough decisions. Should they share a portion with state residents or save it for a rainy day? Fortunately for millions of households, many states decided to share.

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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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