Money Management

These EVs keep the most value over time. 

Electric vehicles (EVs) are becoming increasingly popular, and with good reason. They produce fewer emissions than gasoline-powered cars, require less maintenance, are more energy efficient, and can save you a lot of money over the long term. But which electric vehicle should you buy? One of the best ways to get the most out of your EV is by choosing one that will retain its value over time — in other words, one that won’t depreciate too quickly. Let’s take a look at some of the best EVs on the market today when it comes to depreciation.

What is depreciation?

Car depreciation is the decrease in value that a vehicle experiences over time. It can occur for several reasons, including wear and tear, market factors, technological advances, and increased availability of newer or similar models as time goes on. It’s important to consider the risk of car depreciation when purchasing a new or used car. The lower the depreciation, the more a car holds its value for resell or trade-in purposes.

Do EVs depreciate more than gas-powered cars?

While EVs can save you a lot of money in the long run, they typically depreciate faster than gas-powered cars. This is primarily because of the electric battery, which is the most expensive component of an EV and has a limited lifespan. In addition, the current $7,500 tax credit for new EVs significantly impacts the value of used EVs. Other factors are range anxiety, lack of public charging infrastructure, higher insurance costs, and the rapid improvement of EV technology, which depreciates the value of older models.

According to a recent study, the average five-year-old car lost only 33.3% of its value from MSRP in 2022. This is a 17% decrease in depreciation from the year before, as the price of new and used cars hit all-time highs last year. The average three-year depreciation for all vehicles was 39.1%, SUVs were at 39.7%, and pick-up trucks were at 34.3%. EVs, on the other hand, lost 52% of their value over three years, which is nearly 1.4 times greater than the average for all vehicles.

Electric vehicles: three-year depreciation

The only EVs that buck the trend and don’t depreciate as fast are the Tesla Model 3, Model X, and Tesla Model S. Here is a list of EVs ranked according to their three-year depreciation.

Tesla Model 3, Model X, and Model S

The Tesla Model 3 is one of the best electric vehicles on the market today and still in high demand since it started production in 2017. Not only does it have an impressive range of 310 miles per charge and a sleek design, but it also holds its value extremely well over time. It also has an impressive array of features such as Autopilot, a 15-inch touchscreen display, and going from 0 to 60 mph in as little as 3.1 seconds. At only 10.2%, it depreciates five times less than the segment average. The Tesla Model X and Model S also beat out average for both the EV segment and for all cars.

Teslas defy the high depreciation of the EV segment due to their over-the-air software updates that help keep even the older versions current. As a result, consumers are willing to pay more for the Model S and Model X than other used luxury vehicles.

Chevrolet Bolt EV

The Chevrolet Bolt EV is ideal for those who want an affordable electric vehicle without sacrificing performance or range capabilities. This car offers up to 259 miles of range on a single charge and can go from 0 to 60 mph in just 6.5 seconds. It also comes with plenty of features like cruise control, Apple CarPlay/Android Auto compatibility, and forward collision alert. The Bolt EV starts at $26,500 before any incentives or tax credits are applied.

While EVs tend to depreciate faster than gas-powered vehicles, Teslas buck the trend, with the Model 3 depreciating five times less than the average car. This makes the Tesla Model 3 an excellent choice for eco-conscious drivers looking to maximize their value. No matter what your budget is or how much range you need in your EV, Tesla offers an option that suits your needs perfectly and holds its value over time.

Our best car insurance companies for 2022

Ready to shop for car insurance? Whether you’re focused on price, claims handling, or customer service, we’ve researched insurers nationwide to provide our best-in-class picks for car insurance coverage. Read our free expert review today to get started.

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 positions in and recommends Apple and Tesla. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.

 Read More 

Now that’s reassuring. 

It’s fair to say that 2022 was a tough year for stock market investors. And at this point, a lot of people are still seeing losses in their brokerage accounts.

Meanwhile, we’re starting off 2023 with a fair share of lingering volatility. And there’s reason to believe things could get even more rocky.

The Fed isn’t done battling high inflation. That could drive up consumer borrowing costs to the point where spending starts to decline in a serious way, thereby leading to an economic recession. And so if you’re worried about a near-term stock market crash, you may be in good company.

The good news, though, is that there’s a simple step you can take to reduce the chances of losing a lot of money in a stock market crash. And if you’re not convinced, you should know that that person behind this advice is none other than financial guru Suze Orman.

Diversification is key

In a recent podcast episode, Orman addressed concerns about a stock market crash and told listeners that one of the most important things to do as an investor is make sure your holdings are diversified across the board. When you spread out your assets across a range of market sectors, you’re less likely to lose money than if you were to focus on one segment only.

Just take a look at how badly the tech sector got battered in 2022. It’s not surprising that so many tech companies have been implementing layoffs this year.

If you were heavily invested in tech, then your portfolio probably took a major hit last year. But if tech was only one of nine segments you had money in, the damage may not have been as extensive.

How to diversify your portfolio

If you want to build a more diversified portfolio, simply make sure you own assets across a range of market segments. But if that seems like too much work, there could be a simpler way to go about it — load up on broad market ETFs (exchange-traded funds).

ETFs are funds that trade publicly, and there are different types you can buy. You could, for example, buy sector-specific ETFs, like energy or healthcare ETFs. But that may not help you diversify your portfolio as much as you want to.

That’s why broad market ETFs could be a better bet. If you buy S&P 500 ETFs, you’ll effectively be investing in the 500 largest publicly traded companies. That means you’ll be gaining exposure to a range of market segments — but without having to do a ton of research.

To be clear, when the stock market or S&P 500 index tanks, which happened in 2022, your portfolio balance is apt to follow suit if you invest heavily in S&P 500 ETFs. But in that case, you won’t be an outlier. You’ll simply have to wait for the market to recover like everyone else. The upside, though, is that you may not end up with excessive losses in your portfolio compared to the average investor.

The idea of losing money in a stock market crash is scary. But if you make an effort to maintain a diverse portfolio, you can minimize that risk to some degree.

Our best stock brokers

We pored over the data and user reviews to find the select rare picks that landed a spot on our list of the best stock brokers. Some of these best-in-class picks pack in valuable perks, including $0 stock and ETF commissions. Get started and review our best stock brokers.

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.

 Read More 

Being overinsured is a waste of money, so stop paying premiums for coverage that’s not needed. 

Property owners should buy homeowners insurance coverage to protect their assets. For many people, a home accounts for a significant portion of their net worth, so having enough coverage is crucial to avoid a financial disaster.

But while property owners need enough coverage to satisfy their mortgage lender’s requirements and ensure that their assets are fully protected, buying too much coverage can be a waste of money.

Although it can be hard to determine how much is too much, here are some red flags that suggest a property owner may be overinsured.

Your policy limits are too high

Homeowners who have policy limits that are too high are overinsured and paying more for coverage than makes sense.

Homeowners should have replacement value coverage for both their home and their property within it, and should make sure their policy limits are set high enough to actually pay to rebuild their house and replace its contents if something should go wrong.

But, insurers won’t pay more than the house costs to rebuild or more for the property than it would cost to replace it. So there’s no reason to have policy limits that are in excess of what the home or property’s replacement cost is. For example, if a homeowner has $100,000 of property in the home, it would not make sense to have $200,000 in property damage coverage.

Make sure to get an accurate estimation of the rebuilding cost of the house and the replacement cost of personal property and don’t get a policy with higher limits than necessary.

Your deductible is too low

Homeowners must decide how large they want their deductible to be when they buy insurance on their property. The policy deductible is the money a property owner would need to pay out of their own bank account for a covered loss. Insurance kicks in after the deductible has been met and pays the remaining rebuilding or repair expenses.

Homeowners need an affordable deductible because no one wants to struggle to come up with their out-of-pocket contribution after a covered disaster. But, the lower the deductible, the higher the policy premiums will be. A property owner with a $250 deductible, for example, may be wasting money on more insurance coverage than they need if they could easily cover a $1,000 repair out of pocket.

Switching to a higher deductible policy can provide consistent premium savings. A policyholder can set aside the money they are saving on premiums in a special account to cover their deductible. Once they have enough in that account to pay their out-of-pocket expenses, any additional month they go without a claim is just pure savings.

You have unnecessary riders

Finally, homeowners who have unnecessary riders on their policies are also overinsured. Riders are add-on coverage. For example, some property owners decide to add identity theft insurance to their homeowners insurance policies. But, with strong fraud protections in place by default, identity theft protection insurance is often not worth paying for.

Ultimately, every homeowner should take the time to evaluate their insurance coverage once a year to make sure they are only paying to protect against the risks they truly want to transfer to the insurer. That way, they can avoid paying higher premiums unnecessarily for more insurance than makes financial sense.

Our picks for best homeowners insurance companies

There are many homeowners insurance companies to choose from. We’ve researched dozens of options and short-listed our favorites here. Looking for a green build discount or easy bundle policies? Want an easy-to-use interface? Read our free expert review and get a quote 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.

 Read More 

A bigger wedding is going to require larger monthly contributions or a longer deadline. 

If you’re tying the knot soon, you’ll have to decide what to do about paying for your wedding. This could be a huge financial burden, since the average cost of a wedding was $30,000 in 2022, according to The Knot.

If you’re eager to get down the aisle as soon as possible, here’s what you need to know about how long it could take you to save up for this big expense.

How long will it take to save your wedding money?

The length of time it’s going to take you to save for your wedding depends on two primary factors:

How much you’ll have to spend out-of-pocketThe amount you can contribute to your wedding savings account each month

Often, when you are saving for large financial goals that are far down the line, you’d invest money in a brokerage account and buy stocks or bonds with it. This would (hopefully) allow you to earn a generous return on your investment that helps you more easily accomplish your goal.

If you’re saving for a wedding though, you probably aren’t going to want to do that — unless your wedding is a long time in the future. You generally should not invest money that you plan to use within the next five years or so because you could time things badly and end up having to sell at a loss during a market downturn. (With a longer time horizon, this is less of a risk since recoveries inevitably follow downturns, so you’d stand a good chance of making some money before you sell.)

If you can’t count on much, if any, return to help you meet your savings goal, you should divide your target wedding fund amount by the amount you can contribute to savings each month.

Say you want to spend that $30,000 mentioned above and you have $500 a month to save for it. It would take you 60 months, or five years, to save for your wedding. If, on the other hand, you opted for a scaled-down wedding costing $20,000 and could save $1,000 a month, it would take you just 20 months, or a little over a year and a half.

How can you afford your wedding?

Ideally, you’ll be happy with the timeline when you figure out how much to save for your wedding. But if you’re planning a very expensive day and can’t contribute much, you may find that the time it would take to save up enough isn’t acceptable to you.

If that happens, you can either borrow to fund your big day or scale things down. Borrowing can create an obligation you go into your marriage with, which can add financial stress and potentially make it harder to afford other goals like starting a family. Research has also shown lower spending on a wedding is correlated with a reduced divorce risk, with couples who spend under $1,000 being less likely to dissolve their marriages than those who spend $20,000 or more.

Still, if you must borrow, there are options out there, including 0% APR credit cards (cards offering a 0% introductory rate on purchases) as well as personal loans, which often come with affordable rates. Cards can be a good option if you need to borrow for a short period of time and can pay off the amount you’re charging before the 0% rate expires. Personal loans can provide you a longer time to repay your debt, and may also allow you to borrow more than the credit line on a card offers.

Scaling down your expectations may be a better bet if you don’t want to add money tension to your marriage. You can get creative about finding a cheaper venue, trim your guest list, or try to incorporate some less-expensive DIY elements into your wedding to keep costs down.

Ultimately, it’s up to you to decide how much you’re comfortable spending and how much you can contribute each month to hit that goal on a timeline that works for you.

These savings accounts are FDIC insured and could earn you 14x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you 13x the national average savings account rate. Click here to uncover the best-in-class picks that landed a spot on our shortlist of the best savings accounts for 2023.

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.

 Read More 

It’s something you don’t want to be in the dark about. 

In the context of manufacturing, there’s the potential for things to go awry. This holds whether it’s household appliances, electronics, or vehicles.

But while you definitely don’t want to get stuck with a dishwasher that might leak or a phone whose battery can’t hold a charge, a vehicle recall can be a serious thing — and put your safety at risk. And unfortunately, vehicle recalls aren’t at all uncommon.

The National Highway Traffic Safety Administration found that car manufacturers issued more than 400 recalls impacting over 25 million U.S. vehicles in 2022. And some vehicles were subject to multiple recalls.

Now often, what’ll happen is that you’ll get a notice from your vehicle’s maker informing you that there’s a part or component that’s subject to a recall. But that won’t always happen, so it’s important to do your part to keep tabs on your vehicle. Thankfully, there’s an easy way to determine whether a recall is impacting your vehicle or not.

How to look up recall data

As consumers, we all have our own unique identifiers — namely, our Social Security numbers. That number is something you’ll generally need to present every time you apply for a loan or credit card.

There’s a similar tracking system for vehicles, and it’s called your Vehicle Identification Number, or VIN. You’ll need that VIN to determine whether a recall applies to a vehicle you own. And you can usually find it on your car’s registration card and/or on your auto insurance card. From there, the NHTSA has a tool you can use to see if your vehicle is subject to a recall.

This tool may have some limitations you should know about. For one thing, if your vehicle maker has only recently announced a recall, it may not show up on the NHTSA’s tool right away. Also, the tool will not cover safety recalls that are more than 15 years old unless the manufacturer in question is offering extended coverage in light of them.

Finally, if you own an ultra-luxury vehicle, you may not be able to dig up recall information on the NHTSA’s site. But when you’re shelling out hundreds of thousands of dollars for a new car, the level of customer service is usually such that you’ll be informed of a recall by the automaker in question.

What to do if you get a recall notice for your vehicle

Often, you won’t need to look up recall information for your vehicle because your manufacturer will reach out to you proactively. When that happens, there will generally be some information on who to call to address the issue at hand.

If you discover a recall independently, call your dealership to set up an appointment to deal with the problem. In some cases, you might only have a limited window of time to get the issue addressed at no cost to you.

You should also know that you won’t have to pay for repairs related to a recall if it’s been 10 years or less since you bought your car. But even if your car is older, if there’s a fix for the recall at hand, it pays to address it. It’s never fun to have to pay for car repairs out of pocket. But your safety, and that of the people you drive around, is worth that expense.

Our best car insurance companies for 2022

Ready to shop for car insurance? Whether you’re focused on price, claims handling, or customer service, we’ve researched insurers nationwide to provide our best-in-class picks for car insurance coverage. Read our free expert review today to get started.

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.

 Read More 

There’s a very clear answer. 

You never know when you might end up needing money in a pinch. You might need medical treatment your insurance company won’t cover in full. Or you might need to fix up your car or tackle repairs to your home without any warning.

That’s why it’s crucial to have a fully loaded emergency fund — one with enough money to cover at least three full months of essential living expenses. A Federal Reserve study, however, found that 32% of Americans do not have adequate funds in savings to cover an unplanned $400 expense. As such, it’s fair to assume that many people’s savings could not cover three entire months of bills.

But it’s not just emergencies everyone should be saving for. It’s also important to sock money away for retirement as well. The question is: Which one should take priority for you this year?

Your near-term needs have to come first

Without a decent chunk of money in your IRA account or 401(k), you might struggle to cover your living costs as a retiree. So it’s important to steadily contribute money to one of these accounts year after year.

But if you don’t have a complete emergency fund — meaning, enough money in savings to pay for three months of essential bills — then you should actually hold off on funding your IRA or 401(k) plan until you’ve done some catching up.

The reason? Retirement may be many years away. Meanwhile, an unplanned expense could pop up tomorrow. It’s more important to be able to address that sort of pressing expense than a hypothetical expense in the future.

Also, if you don’t build yourself a complete emergency fund, you’ll risk racking up costly debt the next time you’re faced with an unplanned bill. And if you end up having to waste money on interest upon accruing that debt, you’ll have that much less money to contribute to your IRA or 401(k) plan.

Not having money for emergencies could compromise your ability to save for retirement in other ways, too. If you can’t fix your car due to a lack of funds, you might lose your job. From there, you won’t be able to fund a retirement plan in the absence of a paycheck.

Focus on both if you can

Let’s say you have enough money in savings to pay for three months of bills, but you want a larger emergency fund for added protection. In that case, a good bet could be to split your extra money between your emergency savings and your retirement savings. That way, you’re not neglecting your future self, but you’re also doing what you can to put yourself in a position to better cope with near-term financial surprises.

You should also know that contributing money to a traditional IRA or 401(k) plan will result in a near-term tax break, whereas funding a regular savings account will not. That should also motivate you to spread your money across both types of accounts as long as you have a minimum of three months’ worth of living expenses already tucked away in the bank.

Our best stock brokers

We pored over the data and user reviews to find the select rare picks that landed a spot on our list of the best stock brokers. Some of these best-in-class picks pack in valuable perks, including $0 stock and ETF commissions. Get started and review our best stock brokers.

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.

 Read More