Money Management

An annual travel insurance policy can be a tremendous asset. Here’s why you might need one. [[{“value”:”

When you book a flight or cruise, you’re likely to be asked if you want to buy some form of travel insurance. You’ll see different names, such as “vacation protection,” but the general idea is that you pay a certain amount of money, and you’ll be covered in case you get too sick to travel, your bags get lost, etc.

This can certainly be worth getting, especially on a cruise. After all, if you get sick on board and need to be medically evacuated or need to fly home while in a foreign port for a covered emergency, you could easily face a five-figure bill. Plus, U.S. medical insurance doesn’t cover anything on a ship or overseas.

For a single trip, the cost isn’t too bad. But if you’re a frequent traveler, the cost of adding protection plans to every flight, cruise, prepaid hotel booking, etc. can add up. And that’s where an annual travel insurance plan comes in.

What is an annual travel insurance plan?

In a nutshell, an annual travel insurance plan is an insurance policy that provides coverage for many things that can go wrong when you travel. As the name implies, it will cover you (and whomever else is on the policy) for a period of one year.

Of course, the coverage can vary depending on the plan you choose, but I’ll use mine as an example. I have an annual plan from Allianz (ours is called the AllTrips Prime plan), and it covers:

Trip cancellation and interruption: Up to $3,000 in reimbursement if your trip must be canceled or if you need to return home early for a covered reason.Emergency medical coverage: Pays for covered medical (up to $20,000) and dental (up to $750) costs while traveling, with no deductible.Emergency medical transportation: Covers medically necessary transportation to the nearest appropriate facility, up to $100,000 per trip.Baggage loss or damage: Up to $1,000 per trip.Baggage delay: Up to $200 in reimbursement to purchase essential items if your bags are delayed.Travel delay: If your trip is delayed by six hours or more, the policy provides up to $600 in reimbursement (up to $200 per day) for incidental expenses.Rental car damage or theft insurance: Covers your rental car if it’s stolen or damaged, up to $45,000.Travel accident coverage: Up to $25,000 (cash payment) for covered travel accidents.

How much does it cost?

As mentioned, I have an annual travel insurance plan through Allianz that covers myself, my wife, and our two children for a year. I paid just under $500 for the most recent policy.

For comparison, we’re taking an eight-night cruise in June, and a quick look on the cruise line’s booking site shows that Carnival’s vacation protection would cost about $100 per person ($400 for our family of four). For not much more than that, we’re protected for the entire year for cruises, flights, etc. If you travel often, annual travel insurance can be a budget-friendly decision.

Your costs will vary depending on your family’s composition, the specific coverage you choose, and other factors. But the point is that even if you’re just taking a couple of trips this year, a travel insurance policy can be the more economical way to protect yourself.

Peace of mind can be valuable

The bottom line is that an annual travel insurance policy can not only save you money compared with the cost of purchasing coverage for each individual trip you take, but it can give you the peace of mind to know that you’re financially protected if and when things go wrong.

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Your emergency fund should be calculated based on your personal expenses. Read on to learn more. [[{“value”:”

You never know when you might end up having to bear an expense you weren’t planning for. You could get into a fender bender and wind up on the hook for a $500 auto insurance deductible. Or, you could wind up spending $400 on a medical bill or $600 on a home repair without any warning.

That’s why it’s so important to have a solid emergency fund. Unfortunately, 63% of Americans don’t, according to SecureSave. That percentage of U.S. adults isn’t equipped to cover a sudden $500 expense.

The problem with not having enough emergency savings is that you risk having to resort to costly credit card debt when unplanned expenses arise. And that could really harm your finances for a long time.

If your household income is $40,000, you may be wondering what sort of emergency fund is reasonable for you, or what total you should be aiming to save. And the answer is, it isn’t your salary that matters when calculating your emergency fund. Rather, it’s the amount of money you spend each month on essential bills.

How to calculate your emergency fund needs

When it comes to building an emergency fund, most workers are advised to sock away enough cash to cover three to six months of essential living expenses. The reason for this is that if you were to lose your job, an emergency fund of that nature might suffice in getting you through a period of unemployment without having to resort to costly debt.

But because your emergency fund should be a function of how much you spend monthly, your salary shouldn’t really be a factor. Of course, if you earn $40,000 a year, you probably need a smaller emergency fund than someone who earns $100,000, because chances are, your expenses are lower. But the best way to calculate your emergency fund needs is to look through your credit card and bank account statements and figure out how much you spend each month on essentials.

Some expenses you’ll want to account for include:

Rent or mortgage paymentsCar payments and insuranceUtilities, such as electricity, water, and internet service (this is an essential expense because your kids might need it for school and you might need it for job-hunting purposes)HealthcareGroceries

Once you’ve figured out how much you spend monthly on essentials, multiply that figure by at least three. That’s your minimum emergency fund target. So if, for example, your essential monthly bills come to $2,400, your minimum emergency savings target should be $7,200. And for better protection, you may want to aim for six months’ worth of expenses in the bank.

Building emergency savings could take time

If you’re starting with little to no money in savings, then it could take a while to build a complete emergency fund. And that’s OK.

Let’s say you’re aiming for $7,200 in emergency cash reserves and are starting with $1,200. If you earn $40,000 a year, you’re probably not going to manage to save $6,000 more in a couple of months. But you might manage to save $6,000 in a couple of years with savvy habits, like minimizing non-essential spending.

Another thing you can do to make swifter progress on your emergency fund is join the gig economy. If you work a side job for a year or so, you can put your new extra income into savings. Just remember to set some of that side hustle income aside for the IRS if your wages aren’t taxed off the bat.

The amount of money you need in emergency savings depends on your personal spending. But do your part to build those cash reserves so that the next time you encounter an unplanned expense or find your job on the chopping block, you’re not automatically doomed to land in debt.

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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.Maurie Backman has positions in Target. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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Want to retire with a nice amount of money? Read on for some mistakes to avoid that could be a bigger deal than expected. [[{“value”:”

You may be aware of the importance of saving for retirement. But in the course of doing so, it’s possible to fall victim to certain mistakes that have the potential to lead to really unfavorable results. Here are a few seemingly innocent blunders that could actually have major financial consequences.

1. Waiting until your 40s to start saving

You might assume that it’s perfectly okay to start saving for retirement in your 40s. After all, you may not earn a huge wage in your 20s, and during your 30s, you may be focused on goals like saving to buy a home.

Plus, if you start saving in your early 40s, you’ll conceivably have a good 25 years to build a retirement nest egg. That’s a long time, right?

While starting to save for retirement in your 40s is better than starting in your 50s, by waiting that long, you’re setting yourself up to miss out on many years of investment gains. The stock market, over the past 50 years, has delivered an average annual return of 10%. With a stock-heavy strategy, your returns might be similar.

So let’s say you make a single $2,000 contribution to your individual retirement account (IRA) at age 42. By age 67, it’ll be worth about $21,700 based on that 10% return. But if you had made that $2,000 contribution at age 22, by age 67, it would be worth about $145,800 (again, assuming that same return).

As such, you really do not want to wait until your 40s to first start funding a retirement plan. If anything, make small contributions during your 20s and 30s and aim to ramp up your contributions in your 40s as your earnings increase and other financial goals have been met. But that way, your money can at least start growing earlier.

2. Steering clear of stocks

With a stock-focused strategy, you might manage to generate nice returns in your retirement portfolio. But if you’re more risk-averse, you may be inclined to steer clear of stocks to avoid taking losses from year to year. That decision, however, could really hurt you financially.

Let’s say you contribute $200 a month to a retirement plan over a 40-year period, only because you invest conservatively, you only end up with just a 5% return in your portfolio during that time. That will leave you with a total balance of about $290,000. But with a 10% return, you’re looking at a balance of $1.06 million. That’s an enormous difference.

3. Taking a withdrawal ahead of retirement

There may come a time when you decide to tap your IRA or 401(k) plan ahead of retirement to cover a financial need or goal. Normally, doing so prior to age 59 1/2 means getting hit with a 10% early withdrawal penalty. But there can be exceptions to that rule, such as taking up to a $10,000 IRA withdrawal to purchase a first-time home. This isn’t an option with a 401(k).

In fact, you may be inclined to do the latter if you need funds for a down payment and won’t have to worry about a penalty. But taking a single withdrawal ahead of retirement could have serious consequences.

When you remove funds from your retirement savings, that money is no longer invested. So let’s say you take out that $10,000 at age 35, but you don’t retire until 65. And let’s assume you went all-in on stocks in your IRA and your portfolio is giving you an average annual 10% return. If so, your $10,000 withdrawal will cost you over $174,000 in retirement income.

You might think that waiting to start funding your nest egg, avoiding stock investments, and taking a one-time withdrawal ahead of retirement aren’t such problematic moves. In reality, they could be. So start saving from as young an age as possible, put your money into the stock market, and find other sources when you need cash that aren’t your IRA or 401(k).

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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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You don’t need to add money to your brokerage account to gain buying power. There may be another way. Read on to learn more. [[{“value”:”

The money I have earmarked for long-term goals sits in a combination of retirement and brokerage accounts. But years ago, I opened a Robinhood account for what I call “fun investing.”

Rest assured, it’s a term I made up. But in a nutshell, my investments in my Robinhood account aren’t for long-term goals. Rather, they’re there to (ideally) make me money that I’m free to tap when I want to (keeping in mind that I’m careful about capital gains taxes).

Because of this, my Robinhood account isn’t one that I add money to very often. I’m more focused on pumping money into my kids’ college accounts, my retirement plan, and my long-term brokerage account.

As such, I actually have not added a dollar to my Robinhood account in six months. But I’ve been able to buy more stocks nonetheless. Here’s how.

When you put your dividend income to work

Many of the stocks in my Robinhood account pay dividends. Dividends are a company’s way of sharing the wealth with shareholders. Companies do not have to pay dividends, so some don’t. And even companies that start off paying them can halt that practice as they please.

But as an investor, dividends are something you might look at as a nice little bonus. And if you’re savvy in managing your dividends, they could help you grow a lot of wealth over time.

See, when you collect dividend income, you have a choice. You can take the money and spend it as you please, or you can reinvest your dividends and use that money to buy more shares of different stocks. I go the latter route in my Robinhood account, which explains how I was able to buy more stocks without adding any money.

One nice Robinhood feature is that you can set up a dividend reinvestment plan so that when that income hits your account, it’ll automatically be used to buy more shares of the companies that issued your dividends in the first place. And since Robinhood allows you to buy fractional shares, you don’t have to worry about your dividend payments not being large enough to cover full shares.

Let’s say you get a $12 dividend payment and want to use it to buy into a company whose share price is $48. With fractional investing, which Robinhood and many other brokerages allow for, you can, in this example, buy one-fourth of a share of the stock you want.

Don’t just chase dividends

Holding dividend stocks gives you an opportunity to take those payments and use them to grow your portfolio and wealth. But one thing you definitely do not want to do is buy stocks just because their dividends are generous.

As mentioned above, companies aren’t obligated to maintain their dividends. Also, a generous dividend isn’t necessarily indicative of a given company’s financial health. It simply means the company is choosing to pay a larger sum to its investors. It’s sort of like if you have an uncle who’s loaded with debt, but every time he comes to visit, he brings generous gifts. His finances might be a mess, but on the outside, you wouldn’t know it.

That’s why you can’t use dividends as a benchmark for buying shares of a given company. Instead, you need to look into that company’s finances to see how well (or not) it’s doing. But if you decide to invest in a company that happens to pay dividends, then you should really embrace the opportunity to use that money to invest even more.

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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.JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.

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Are you still disappointed about Mint being shut down? See why Quicken Simplifi is the best choice we’ve found as a Mint replacement. [[{“value”:”

I’m a longtime customer of Mint, the personal finance app that was formerly part of Intuit. When Intuit announced in 2023 that it was shutting down Mint, I was sorry to hear it. Because, as a freelancer, I loved Mint! Mint was the perfect solution to track my business expenses and my personal finances.

Intuit claimed that Mint’s capabilities would be migrating to Credit Karma, so I signed up for a new Credit Karma account. But I was disappointed. Although Credit Karma has some useful features as a credit monitoring service, I didn’t find its new supposedly “Mint”-like experience to be nearly as good as Mint. This felt frustrating, especially since tax season was approaching.

Fortunately, after extensive research, I found a good Mint replacement! If you’re a small business owner, freelancer, consultant, or solo entrepreneur who needs an easy way to track business expenses, this could be a great solution for you — and it’s worth paying for. It’s called Quicken Simplifi.

Here are a few reasons why Quicken Simplifi is the best Mint replacement that I’ve found.

Easy dashboard

When I tried to use Credit Karma as a Mint replacement, the “Minty” features that I wanted were supposed to be available as part of Credit Karma’s “Net Worth” menu. But it was hard to find; I even had to contact Credit Karma’s support team to find what I was looking for. And even then, it just wasn’t the same as the Mint user experience.

Quicken Simplifi is better. Quicken Simplifi gives me an easy-to-use, clearly visible dashboard of where my money is going, based on linked bank accounts. It “feels” like Mint, in the best possible way. I loved Mint because it gave me a clear view of the big picture of my business (and personal) finances, all in one place. Quicken Simplifi helped me regain that sense of control and visibility.

Customizable categories for business expenses

Quicken Simplifi makes it simple to create customized categories and sub-categories for your transactions. This is especially important for business expenses. For example, if you want to track how much you’re spending on software, shipping, or marketing costs, you can tag the transactions with exactly the right labels that make sense for your business and tax planning purposes.

And just like Mint, by interacting with Simplifi, you help the software get “smarter” over time so it recognizes recurring expenses. It took me less than an hour to tag most of my recurring monthly business spending in exactly the way I wanted, so now each month I get reliable, clear, well-sorted records of my tax-deductible business expenses.

Downloadable transactions for tax season

This sounds simple, but it was an incredibly important thing for me: every year when I file taxes, I need to provide my accountant with spreadsheets of my business expenses, sorted by category. I couldn’t figure out how to get downloadable transactions from the new Credit Karma “Mint replacement” features. This was a dealbreaker for me. I have to get my transactions in a CSV format that’s compatible with Excel and Google Sheets.

Good news: Quicken Simplifi has downloadable transactions! You can categorize, sort, download, and share your transactions with your accountant to make tax time easier for everyone.

Is Quicken Simplifi right for every small business owner?

Quicken Simplifi is not advertised as a “small business” accounting software solution. If you have a more complex small business with employees, inventory, vendors, sales taxes, and other moving parts that require more advanced features, you probably need a higher-level plan from Quicken, like Quicken Classic: Business and Personal, or another more robust accounting tool, like Intuit QuickBooks®.

But if you’re a freelancer, independent professional services consultant, or solopreneur, Quicken Simplifi might be everything you need to sort out your small business taxes and your everyday personal finances. Quicken Simplifi gave me everything I loved about Mint, and it only costs $3.99 per month when billed annually (as of March 29, 2024).

Bottom line

Quicken Simplifi is a Mint replacement that’s worth paying for. It can also be a good tool for some small business owners. If you don’t need more advanced accounting software, Quicken Simplifi can give you everything that most people need for everyday personal finance tracking and tracking business expenses.

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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.Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool has positions in and recommends Alphabet and Intuit. The Motley Fool has a disclosure policy.

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Hybrid cars are all the rage right now. Read on to find out why many Americans are opting for these vehicles. [[{“value”:”

Many buyers are eager to have a more environmentally friendly vehicle, but aren’t quite ready to make the jump to a fully electric vehicle. That makes a lot of sense if you live in an area where the charging infrastructure isn’t ubiquitous yet.

As a result, consumers are increasingly looking to hybrid vehicles to fill the gap between efficiency and practicality. Hybrid cars have been around for a while, but an increasing amount of vehicle options and incentives makes them more appealing than ever.

Here are five hybrid trends that are making these vehicles popular and why you might want to shop for cheaper car insurance if you buy one.

1. The government may help you buy one

One of the most important trends right now is the availability of a government tax credit for some hybrids. The federal government offers a credit of up to $7,500 for certain plug-in hybrid vehicles (PHEV). It’s worth noting that hybrids that don’t plug in aren’t eligible for the tax credit.

A handful of new PHEVs, including vehicles from Ford, Lincoln, Chrysler, and Jeep, qualify for a full $7,500 credit. The good news is that you can also still get partial credit for used hybrids. Two dozen carmakers selling about 60 used hybrid models qualify for the used hybrid tax credit of $4,000. You can search for which new and used hybrids are eligible for the credit on the U.S. Department of Energy website.

2. Hybrids are gaining market share

According to data from Wards Intelligence, non-PHEV hybrids accounted for 7.6% of all new vehicle sales in the U.S. in 2023, up from about 3% in 2020. Meanwhile, PHEV sales accounted for nearly 2% of the market, up from less than 1% in 2020.

And there’s no sign that hybrid demand will cool down any time soon. According to Reuters, hybrid vehicle sales were five times higher than electric vehicle (EV) sales in February, and carmakers expect hybrid manufacturing to account for 20% of total light-duty vehicle production by 2025.

3. There are more hybrids in popular vehicle segments

Crossover vehicles, typically defined as small SUVs, are the most popular type of vehicle in the U.S. and account for nearly 50% of all new vehicle sales. And hybrid makers have taken notice.

According to the U.S. Energy Information Administration, automakers increased hybrid vehicle models in the crossover category last year, helping them tap into its popularity.

Other popular segments, like pickup trucks and larger SUVs, are also experiencing a surge in hybrid demand. A PHEV version of the Jeep Wrangler accounted for half of all Wrangler sales in the second half of 2023, and Ford’s hybrid version of its Maverick pickup truck makes up half of the model’s sales.

4. They’re more powerful

Hybrids were once thought of as vehicles that sacrificed power to gain efficiency, but that’s not the case any longer.

Consider that the latest version of Toyota Prius, the quintessential hybrid, now has 194 horsepower on its base model, a 60% increase from its predecessor. And it doesn’t even sacrifice its miles per gallon to reach that. The new Prius gets between 49 mpg and 57 mpg (depending on the model), which matches the previous version.

Hybrid SUVs are also flexing their muscles. The base Jeep Wrangler PHEV makes 270 horsepower from its gas-powered turbocharged engine, but the power jumps up to 375 horses with its battery.

5. They have impressive battery-only ranges

One benefit of many hybrids is that they can drive short distances using just battery power. This is ideal for people who make short trips around town and want a vehicle with fewer carbon emissions.

The good news for buyers is that the range for battery-only power for many hybrids has expanded. For example, the updated Prius has a larger battery that gives it an all-electric range of up to 44 miles, compared to its predecessor’s 25-mile range.

Even larger, more powerful vehicles have respectable ranges. The PHEV Wrangler gets an estimated 21 miles using just its battery. These aren’t comparable to EVs, of course, but they’re still impressive distances and, in the case of the Prius, a significant increase in distance.

One thing to keep in mind before making a hybrid purchase

With more crossover hybrids available than before and the government incentivizing hybrid purchases, now could be a good time to buy one. Just keep in mind that car insurance for hybrids and EVs is usually more expensive than gas-powered vehicles.

This is partly because hybrids have more complex systems than traditional vehicles, and their batteries can be expensive to repair or replace when damaged. To help keep your insurance rates from jumping higher, it’s a good idea to compare insurance rates. Shopping around and getting a few quotes will help ensure you find the best deal.

Our best car insurance companies for 2024

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.

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