Money Management

If you’re thinking about buying pet insurance, you may want to consider these issues.  

Pet insurance provides coverage for companion animals in case they get sick or hurt. Most pet insurance policies cover only illnesses and injuries, not wellness care (unless a special add-on policy is purchased). And many policies exclude pre-existing conditions, so insurance usually needs to be bought when an animal is young and healthy in order to provide the most comprehensive coverage.

While many financial experts recommend pet insurance to avoid putting costly vet bills on credit cards, some recent research suggests paying for the insurance doesn’t always pay off. According to the nonprofit Consumers Checkbook, pet insurance premiums usually increase as animals age and they rarely pay off unless an animal needs major care.

For example, for a mixed-breed dog who lived almost 13 years and who required moderate care, an owner could end up spending anywhere from $4,263 to $36,386 more on insurance than without it. By contrast, for the same dog who needed lots of care, having coverage would save an owner between $1,215 and $31,261. And cat owners also would spend more on premiums than they get back in most cases.

Despite this data, owners may want to buy coverage anyway. Here are two reasons why.

It’s impossible to tell which pet will require lots of care

The biggest reason why owners should buy pet insurance even if it doesn’t pay in the end is because no one can tell which animal will require costly care.

Many people view insurance as a waste of money if they don’t get benefits from it. For example, term life insurance is seen as a waste if the death benefit doesn’t pay out or pet insurance is seen as a waste if it doesn’t end up paying for expensive care.

But this is the wrong attitude to take. Policyholders are insuring against the risk of uncertainty. Obviously, the hope should be that the policyholder doesn’t die or the pet doesn’t get sick. But since there’s no way to see the future, it’s best to pay for protection against the dreaded what if scenario.

The insurance premiums paid for pet insurance buy the peace of mind of knowing that if an animal gets sick or hurt, that pet can get the necessary care. There’s a value to this that goes far beyond the actual dollars the insurance policy pays out.

Pet insurance ensures there’s money there when it’s needed

Another huge reason to get pet insurance is because it is a predictable cost rather than an unpredictable one. If animal owners pay premiums that they can afford each month, money will be there when an unexpected expense comes up that they might not be able to afford at that moment.

While a pet owner could theoretically self-insure by saving the amount of the premiums in a pet health fund each month, many people don’t do that — and thus won’t necessarily have the funds when disaster strikes. It’s easier to make predictable payments as a monthly or annual habit, and then insurance is there with the cash when needed.

For each of these two reasons, pet owners should seriously think about getting covered ASAP even if it’s not necessarily the best financial deal to do so.

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Now is the time to buy Treasury bonds. 

Suze Orman is a well-known personal finance expert and author of numerous books on saving, investing, and more. She often advises her followers to invest in New Issue Treasury Notes (NITNs) as a relatively safe and low-risk way to increase their income. But is this really the best course of action? Here’s why Orman continues to think so.

What are New Issue Treasury Notes?

Treasury Notes are an excellent option for investors who are looking for steady returns with minimal risk. The notes are issued by the U.S. government with a maturity between two and 10 years. So they come with a guarantee that you’ll get your money back at maturity plus interest payments during the term of the note. This means you don’t have to worry about any kind of market downturns or other risks, like you would with stocks and bonds.

“New issue” means that you purchase directly from the issuer. For example, you can buy a Treasury Note directly from the U.S. government. Treasury bonds are similar to treasury notes but have a maturity date ranging from 20 to 30 years. Of the different types of treasury bonds, Orman recommends I bonds.

Earn 7% with little risk

I bonds earn interest for up to 30 years, and the interest is exempt from state and local taxes. The interest is also tax-deferred until you take a withdrawal. The interest rate on I bonds has two components: a fixed rate of return and a variable rate of return that is adjusted for inflation every six months.

Currently, the fixed rate is 0.40%. The inflation rate is based on the Consumer Price Index (CPI). With CPI at 40-year highs, the current inflation rate paid out is 6.48%. The combined rate is called the “composite rate” or “earnings rate” and is currently 6.89% when rounding and adding the fixed rate. The only place to buy an I bond is through TreasuryDirect.gov. You cannot purchase them through a typical brokerage.

Suze Orman is right — I bonds are an excellent option for investors who want steady growth with minimal risk. They offer good long-term returns and are backed by the full faith and credit of the U.S. government. This means that you’ll earn close to 7% with very little risk and get real returns on your money, while keeping it safe in a low-risk investment. This makes them an ideal choice for those looking to build their wealth slowly and safely. If you’re looking for a safe and steady investment, I Bonds are definitely worth considering.

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You may want to read this advice before putting your home on the market. 

If you are selling your home, there’s a lot to do to get your property ready.

You’ll have to decide if you want an agent or would prefer to sell yourself. You’ll need to confirm how much of a balance is left on your mortgage and if you can sell your house for enough to pay it off. And you’ll need to declutter and depersonalize in order to make sure the house looks its best and future buyers can picture themselves living in it.

Finance guru Dave Ramsey also believes there’s one more task to add to your to-do list. But, should you heed his advice and take this presale step or should you skip it?

Here’s what Dave Ramsey thinks home sellers need to invest in

Ramsey recommended a pre-sale step that is somewhat unusual for sellers. He suggested that prior to listing your home, you have a professional inspector look at the property.

“A presale home inspection might cost a few hundred dollars, but it’ll be money well spent,” the Ramsey Solutions blog reads. “Seeing an inspection report can give buyers the confidence to put in an offer — and it can keep them from demanding big bucks during negotiations. It’s a win-win.”

Ramsey explained that an inspector will provide a detailed report about the home’s condition that identifies any “health and safety issues.” And while he says it’s typically not worth fixing everything the inspector finds, you might want to take care of resolving any big-ticket issues that are identified.

Is Ramsey right?

Getting your home inspected before listing it might seem smart and, indeed, it does have some perks such as giving you time to fix issues that occur before they turn off potential buyers.

But, there are some big downsides to following Ramsey’s advice.

One issue is that if the inspection does find something, this could give rise to an obligation to disclose it. In many states, you’re expected to tell buyers about known problems. If you don’t think there’s any issues with the home but an overly picky inspector finds a problem, this could mean you end up getting stuck fixing something that might not have been on anyone’s radar if you hadn’t pointed it out.

Another issue is that buyers are often still going to want to hire their own inspector even if you’ve paid for a presale inspection of your own. And different inspectors could find different problems.

Paying for your own inspection won’t necessarily protect you from having a buyer ask for repairs or try to negotiate the price. And since it is an inspector’s job to find problems and be cautious, having multiple inspections done (your own and the buyers) could just mean extra issues are discovered that you have to pay to deal with.

Finally, there’s a cost associated with the inspection and shelling out a few hundred dollars often isn’t necessary since you are living in the home and would likely notice most of the problems that buyers are concerned about.

For all of these reasons, you may want to skip this Ramsey advice and leave the inspection to the buyers.

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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.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Christy Bieber has no position in any of the stocks mentioned. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

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