Money Management

Don’t buy car insurance without reading this Ramsey advice.  

Buying car insurance can be a pretty complicated process. There are many different types of auto insurance available, and a huge number of different companies offer policies.

For drivers who are overwhelmed with their coverage options or who aren’t sure what they need, it may be tempting to just go with the cheapest possible auto insurance. But, as finance expert Dave Ramsey explains, this may not be the best approach. Here’s why.

Buying the cheapest car insurance could be a huge problem

According to Ramsey, there’s one very clear, very serious issue with opting for the lowest price auto insurance coverage.

“There’s just one problem with going the cheapest route: Saving money isn’t the only part of buying car insurance,” Ramsey warned. “You also have to think about protecting your finances from the possibility of a 10-car pileup. (Okay, so that’s a little unlikely, but you get the point: Car accidents can be expensive.) You need coverage that actually covers you — the kind that protects you from budget-busting car wrecks.”

The cheapest coverage, in other words, could end up costing drivers an absolute fortune if it doesn’t provide a sufficient amount of insurance to protect against anything that could go wrong.

Here’s why drivers need to heed Ramsey’s warning

Ramsey’s warning about opting for the cheapest coverage is important for every driver to read before they go shopping for an insurance policy.

See, states set minimum coverage requirements, which usually require liability insurance and sometimes personal injury protection (PIP) coverage. Liability insurance only pays for damages a policyholder causes to others, while PIP pays for a small amount of medical bills and lost wages for a collision regardless of who was at fault for it. Buying state minimum coverage is usually the cheapest auto insurance available.

But, complying with just the minimum requirements and getting the cheapest coverage would offer very little actual financial protection from devastating losses. A driver with minimum coverage would have no insurance to pay for their own vehicle’s damage in the event of a crash or other covered incident such as vandalism or encounter with a deer, or auto theft. The policy limits on minimum insurance are also pretty low, so drivers could find themselves being personally sued for excess losses they cause to others that their insurance doesn’t cover.

A driver who shops based on price alone could also find themselves with an auto insurer who has a bad reputation — and who doesn’t pay out claims promptly. And, since policies with higher deductibles cost less, a driver could also end up with huge out-of-pocket costs in the event of a crash if they chose a large deductible to save on premiums.

Instead of buying the cheapest insurance, drivers should follow Ramsey’s suggestion and make sure they have full coverage for losses they’d need help covering — including collision and comprehensive coverage. Paying more to avoid a potential financial disaster down the line is well worth it, especially since auto insurance that offers full protections can still be pretty affordable for drivers who shop around.

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This type of credit card is more difficult for scammers to use. 

Credit card fraud is a real problem, with over $32 billion lost to scammers in 2021 alone. It’s important to know the signs of credit card scams so you can protect yourself from becoming a victim. As recently reported by News4JAX, Reader’s Digest asked convicted identity thieves the most common ways scammers steal credit card information and their least favorite cards to steal.

Common credit card schemes

Convicted identity thieves state that the easiest way to steal people’s credit card information is by taking a photo of it while it’s being used at a grocery store. Another common ploy for scammers is to steal mail from people’s mailbox. Thieves are able to gain access to unsuspecting consumers’ credit card numbers, names, and addresses in one swoop.

Phishing is another form of credit card fraud in which criminals send emails pretending to be from a legitimate financial institution such as your bank. The email typically contains a link that leads to a fake website where the criminals can steal your personal information (such as passwords or credit card numbers).

Using skimming devices is one of the most common types of credit card fraud. These devices are installed on ATMs or other machines where credit cards are accepted and scan your card when you use it. The information is then stored on the device, which criminals later use to access your account and make unauthorized purchases. Card skimming grew by 760% in the first half of 2022, costing consumers over $1 billion a year.

Thieves’ least favorite card

Once the thief has gotten their hands on the card, they try to make fraudulent purchases online or buy gift cards that are easy to resell and are difficult to trace. According to the convicted thieves, their least favorite credit card to steal is American Express. American Express transactions are safeguarded with an extra layer of security — the user must provide a ZIP code to complete any purchase.

How to protect yourself

To protect yourself from skimmers, always check for any suspicious-looking attachments on an ATM or gas pump before using it and avoid entering your PIN when possible. If a machine looks to have been tampered with, do not use it — report it to the store or bank immediately. To avoid falling victim to phishing, always be sure to verify any emails claiming to be from your bank or other financial institution before clicking on any links. Do not provide personal information over email unless you are certain that the email is legitimate.

Make sure your credit cards have an embedded chip. Chip cards are one of the best ways to protect your data from fraudsters because they are harder to clone than magnetic stripe cards. These cards have a microchip that stores information securely and generates a unique code for each transaction, making it difficult for hackers to access your data. If you notice fraudulent transactions on your account, notify your card issuer immediately and file a police report. Under the Fair Credit Billing Act, you aren’t responsible for charges that are made after you’ve reported the theft, and your total liability is limited to $50 for unauthorized charges.

Credit card scams are becoming increasingly more sophisticated, but there are steps you can take to help protect yourself. Always check for skimming devices, protect your mail, and never click on links contained in emails claiming to be from legitimate financial institutions. Upgrade to a credit card with an embedded chip and continually monitor your accounts for suspicious activity. By following these steps, you can greatly reduce your chances of becoming a victim of credit card fraud!

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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.American Express is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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You don’t necessarily have to resign yourself to paying more or moving. 

Renting a home is not an inexpensive prospect these days. In fact, the median monthly rent in the U.S. was $1,942 in January, according to Rent.com. That’s a 2.37% increase from one year prior.

Meanwhile, it’s common for landlords to raise rents as soon as they’re able to. And that generally happens once a lease comes up for renewal.

If your rent is going up, you have some options. For one thing, if you’re in a great financial spot and can afford a mortgage loan, you can look at buying a home.

But if money is tight, which is the case for many people these days due to factors such as inflation, then an increase in rent may be a problem. And buying a home may not be anywhere close to an option.

The good news, though, is that a rent increase doesn’t automatically mean you’ll end up having to pay that much more for your home, or that you’ll be forced to bear the cost of a move to a less expensive home. That’s because your landlord may be surprisingly receptive to negotiations.

It pays to negotiate when your rent goes up

Let’s get one thing out of the way. Your chances of not seeing your rent increase at all from one leasing period to the next are pretty low.

The reason? Just as your costs tend to go up from one year to the next, so are your landlord’s costs apt to rise. So think about it — if your landlord were to never raise rents, they’d fall behind financially.

As such, if you’ve received a notice that your rent is rising, don’t expect to end up keeping it exactly the same figure as it is now. But also, don’t hesitate to negotiate with your landlord. If your rent is increasing by $80 a month, and that’s beyond your budget, see if you can talk your landlord down to a $40 increase, or a $50 one.

How to make your case

Why might your landlord be willing to negotiate a rent increase rather than stick to their original number? It’s simple. Finding new tenants can be a hassle. And landlords often don’t want to risk vacancies. So if you’re a good tenant, your landlord might agree to a smaller increase than they initially presented.

To make that case, though, remind your landlord of the many positive habits you have as a tenant. These might include:

Paying rent on time every monthBeing a quiet renter who’s never had a noise complaintNot having a constant stream of guestsAbiding by your landlord’s rules, such as never smoking in your home or allowing a pet to visit if those things are against the rules

Your landlord might find someone else in a financial position to be able to afford your home if you can’t on the heels of your rent increase. But will they find someone who’s a respectful, non-controversial, and non-annoying tenant? That’s the big question mark. And it’s a risk your landlord may not want to take.

All told, rent increases are pretty common. But before you resign yourself to having to strain your budget or consider a move, have a talk with your landlord and ask if it’s possible to meet somewhere in the middle.

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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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These side hustles are a good way to make more money. 

A side hustle can be a great way to supplement your income or even make some extra money in retirement. Fortunately, there are many options out there for those looking to build up their bank account. According to financial guru Dave Ramsey, here are some of the most popular side hustles.

Ramsey’s side hustle ideas

Drive for Lyft or UberDeliver foodDeliver groceriesBecome a photographerTutor onlineBecome a transcriptionist (professional typist)Join a focus group or take surveysTeach EnglishRent your home or spare room in AirbnbResell thrifted itemsGet paid for your creative talentsBecome a personal chefBabysitBecome a user testerDog walk or pet sitClean housesSell products on EtsyGive music lessonsDo tasks for peopleBecome a freelance writer or proofreaderWash and detail carsMow lawns or do yard workBecome a coachDeliver packages with Amazon FlexSell baked goodsDo makeup for special eventsBecome an event planner

How to find the right side hustle for you

Side hustles are a great way to make some extra cash while also diversifying your skillset or exercising a creative outlet. Figuring out the right side hustle for you, however, can be an intimidating and overwhelming task. To find the perfect balance of maximizing your time and doing something that brings joy and fulfillment, first ask yourself what it is that you’re passionate about.

Even if you haven’t yet found your dream field, focusing on what energizes and motivates you is always a good starting point. Listen to podcasts or read books related to topics that interest you, look online for ideas, and talk to people whose careers are inspiring. Connect with resources that bring new insights into where your interests could lead you. You may even find your future career aspirations shift as you explore these opportunities.

Finding the right side hustle for yourself may take some trial and error, but don’t be discouraged — taking risks is part of the journey. Fortunately, many of Ramsey’s ideas are easy to try without having to invest too much time or resources. Don’t be afraid to experiment, as you may find another idea not on the list!

How to start a side hustle

A side hustle is a great way to test out a business idea while keeping your day job. It offers the best of both worlds while putting extra cash in your bank account. Before jumping in, though, it’s important to prepare for your new venture. Once you choose your side hustle, create a business plan. A good business plan will outline the specific steps necessary for you to make your business succeed. It will also help you to achieve goals and meet your milestones.

Your business plan should include a budget, how you plan on reaching out to prospective customers, and how to steer your business as you grow. Don’t be afraid to reach out to professionals who can help you towards your goals and manage your business operations and finances. Once you start making money, you can put that extra cash to pay down debt, fund your emergency account, and invest for the future!

Whether it’s delivering food or groceries or becoming a freelance writer, there’s no shortage of ways you can make money on the side, according to Dave Ramsey. All these side hustle options offer flexible hours and earning potential. So if you’re ready for an adventure into entrepreneurship, start researching to find the one that works best for your lifestyle today.

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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, Etsy, and Uber Technologies. The Motley Fool has a disclosure policy.

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How big of a deal is picking the right brokerage firm? It depends on your investing habits.  

When it comes to certain financial products, I spend a ton of time researching all of my options to make sure I find the perfect one to meet my needs. This is true of credit cards, for example. I also put in the research when I was shopping around for a mortgage loan.

But, when it comes to my brokerage firm, I don’t really care much at all which firm I invest with. In fact, I picked my broker solely because it provided me with an extra loyalty bonus with my credit card company and I didn’t investigate its features at all.

Here’s why picking a brokerage firm didn’t matter to me.

I have a very simple investment strategy

The biggest reason I do not care about picking the perfect broker is because I really need almost nothing from my brokerage firm due to the way I invest.

I have almost all of my money in ETFs that track the performance of the S&P 500 and other financial indexes. Since these are basic investments, essentially every brokerage firm offers the ETFs I want.

And since I’m not trying to time the market, research different investments, or trade stocks or options, I didn’t need advanced screeners, research tools, earnings reports, investment news, charting options, or many of the other great features that more active traders can take advantage of.

As long as the broker allowed me to make a simple commission-free purchase of ETFs I already knew I wanted, that was all I was really looking for. And pretty much every broker does that.

I don’t trade on margin

Another big reason why I don’t care about my brokerage firm is because I don’t trade on margin. If I did want to borrow against the money in my brokerage account to invest more, then I would need to research a brokerage firm that offered a favorable margin rate. But since this is not something I do, I have no idea what my broker’s rules are for borrowing to invest.

I only need basic account types

There’s a third reason why my broker choice doesn’t matter. I only have a taxable brokerage account and basic IRA accounts. I’m not trying to do anything complicated like open a Solo 401(k) or a custodial account. The majority of brokers offer the kinds of accounts I need with no fees, so I don’t have to compare options to make sure I find what I want.

What I need is safety and commission-free ETFs

The ultimate reason I don’t care about my brokerage firm is because my needs are so basic that they could be fulfilled anywhere. I needed a safe brokerage firm, so as long as the one I found was SIPC insured and offered commission-free ETF trading, I was good to go. With every reliable brokerage meeting these criteria, it made sense to pick based on other factors rather than what the broker specifically had to offer.

Now, this is definitely not the case for everyone. If you want investment education, a wide range of different kinds of assets to invest in, and advanced research tools, you should take the time to find brokers that offer what you’re looking for. There could be wide variation in these features. You’d want a feature-rich investing platform, and taking the time to find the right one would be well worth your efforts.

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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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