Choosing a Deductible for your Car Insurance


Buy or sell car, purchase or rent automobile service with key with car keychain on pile of US Dollar banknotes money on printed contract paper and pen to sign, finance installment or debt awarenessSo you’re buying a car and need to make a decision about insurance. Presumably you’ll compare price and coverage options, and in doing so you’ll see that price varies based on the deductible you select. What is a deductible, and what factors should you consider in making your decision?

Deductible Defined and Explained: Your deductible is the amount of money you must pay for vehicle repairs before the auto insurance company pays the remaining costs. For example, if your car is damaged and your deductible is $1,000 but the damage to your car is $1,500, you would pay the $1,000 and your insurance provider would cover the remaining $500.

Choosing a Deductible: Making this choice depends on your personal comfort level, the amount of risk you’re willing to take, and is sometimes determined by the entity that finances your car. An insurance broker can help you make a decision based on your personal situation, but here are a few factors to consider when deciding:

  • Emergency funds: Do you have a healthy savings account and/or emergency fund? What can you afford to pay out of pocket if something happens? A higher deductible can lower your monthly premiums and save you money each month, but if you cannot afford the deductible itself when repairs are needed, this is likely not a good option.
  • Value of your vehicle: More expensive vehicles are typically more expensive to insure. For high-value vehicles, a high deductible might make sense because the savings can be significant. On the other hand, the value of an older vehicle might be similar to the cost of a high deductible. This means that in some instances, replacement of the older vehicle might be more cost effective than repairs, suggesting a low deductible is best.
  • Risk: Evaluate your personal likelihood of needing to file a claim. It doesn’t matter if you’re a good driver; everyone has some level of risk. Do you drive frequently, and in high-traffic times or areas? Do you live in a place with a large proportion of high-risk drivers? Do you have a teenager learning to drive? What other personal risk factors should you consider?

Source: CUInsight.com


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7 Banking Tips for Young Millennials


Once you start receiving your first paychecks after graduation, knowing how to spend or save your money wisely can be tough. While you may be able to do your banking with just a few taps on your phone, managing money well is much more complicated. Here are a few tips to help you get started.

1. Budget using apps

Tracking how much you spend weekly and monthly shows you where your money goes and how you can save more. You can use a budgeting tool or app that tracks your cash automatically or one where you enter information manually. Choose an app that lets you spend as little or as much time on budgeting as you want. From there, you can identify your total fixed expenses, such as rent and car payments, and more-flexible costs such as shopping and dining out.

2. Set up automatic transfers to savings

When you have a rough idea of how much you can save regularly, create a recurring transfer from your checking account to a savings account. By making savings automatic, you can get used to spending “below your means” and never have to worry about remembering to transfer.

3. Avoid overdrawing your checking account

Before you pay rent or spend any other big chunk of money, take a look at your checking account’s available balance. This can prevent you from spending more than you have in your account. If you overdraw, you may be charged a fee.

4. Establish credit

Student loans and credit cards can help you build good credit — as long as you stay current on monthly payments and don’t overuse your cards. Your credit score, which shows how responsible you are with credit, is an important factor that lenders check before approving car loans and mortgages. The better your score, the lower the interest rate you may be eligible for.

5. Repay debts strategically

If you have debts from multiple credit cards and student loans, pay the minimum on each and then contribute more to your higher-interest debts. By making those a priority, you can reduce how much interest you’re paying faster than by treating all debts the same.

6. Start an emergency fund

Being financially prepared in case of health emergencies or unexpected unemployment can save you from going into debt. Have a separate savings account just for this purpose; don’t mix it up with your regular savings. A good rule of thumb is to save enough to pay three to six months’ worth of living expenses.

7. Set long-term savings goals

Consider saving for retirement in an employer-sponsored 401(k) plan or individual retirement account. When you start saving early, you take advantage of compounded returns to make more money off your contributions overall.

From smart budgeting to setting goals, make good money choices now. Since time is on your side, you can benefit from building credit and saving early to be ready for big financial decisions in the future.

Source: NerdWallet, Inc.


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The Holidays are Just Around the Corner: Start Saving Now to Avoid Headaches Later


Family in Christmas shopping

Even though the kids just went back to school and December may seem far away, it’s not too early to draw up a financial plan for the holidays.

That’s because creating your financial blueprint now can help avoid headaches later, like overspending and sinking into debt, experts say.

Heading into the holidays without a plan can increase the risk of unraveling an entire year’s worth of financial discipline – as well as undermining your enjoyment of the season. Unfortunately, most Americans enter the holiday season without a financial game plan.

“We found that two-thirds of Americans do not have a holiday budget,” said Greg McBride, chief financial analyst of Bankrate.com. “That can certainly present problems given the fact that the holidays generate lots of one-time big expenses and it happens every year.”

Create a budget

Racking up credit card bills isn’t uncommon at the holidays, with more than one in four adults admitting they go into debt during the season, according to Dana Marineau, a financial advocate at personal finance company Credit Karma. Creating a budget can aid you in sidestepping the debt trap, she adds.

As part of the budget, make a list of specific items you’d like to buy for friends and family members to help you avoid impulse purchases, Marineau recommends.

“Be thoughtful about what you want to buy,” she says. “Maybe you see a great sweater you get targeted on Instagram. You think, ‘Maybe my Aunt Mary would like that,’ but don’t allow the impulse of the targeted advertising” to sway you.

Don’t forget costs beyond gifts

Holiday shoppers often forget about costs like travel and entertaining, McBride notes. When you create your budget, make sure to add in the expense of flights, hotels, dining out and other ancillary costs.

These costs can often exceed spending on gifts, with credit bureau Experian finding that the typical American who plans to travel at the holidays spends about $930, compared with about $850 in gift purchases.

Put money aside now

Don’t wait until the last minute to save for holiday shopping and travel. Start socking away money now into savings. And remember that some of your holiday expenses may occur far earlier than you expect, such as if you buy airline tickets in October for a family visit in December.

“Put a portion of every paycheck toward holiday spending,” McBride recommends. “When the fall comes and you start to begin incurring holiday expenses, you’ll have some money set aside.”

Rethink your gift priorities

Lastly, rethinking gift-giving can help save money and time.

Anne Van Donsel of Burlington, Vermont, notes that her family, which is scattered around the country, opted to stop exchanging gifts a few years ago.

“It takes so much pressure off everything because you can enjoy the holidays without going broke,” she says. Instead of buying gifts, family members then have more money to spend on travel to visit each other, she adds.

“It makes it so it’s not overwhelming from a time perspective or financial perspective,” she says. “It takes you off that roller-coaster.”

Source: USAToday.com


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How to Tell You’re Ready to Buy a House


Making the decision to become a homeowner is emotionally and financially complex. Here are some key things to ask yourself if you’re considering whether buying is right for you.

Do you have a good reason to buy?

Sometimes switching from renting to buying is a no-brainer.  Maybe you live in a modern one-bedroom apartment in a chic part of town, but you have a baby on the way. If you want a place in a good school district, with more square footage and a yard, buying may well be your best bet.

Other times, the urge to buy is driven by emotion: You see a house you like and you “just know.” There’s nothing wrong with that reaction, but take time to check out the property before you make any commitments. If it’s too far from work, near a noisy road or the best house on a bad block, it may not be as good a deal as it first appears.

And remember: Houses go on the market all the time, and there are tens of millions of single-family homes and condos in the U.S., so there’s no need to worry if your first choice doesn’t work out; your home is out there.

Can you make the upfront investment?

Buying a home requires an initial investment that you can’t ignore.

First, many lenders require a down payment of 20% of the home price. That’s $54,000 for a home that costs $270,000, about the median price in America. You’ll also owe closing costs, which could include loan-origination fees, discount points, appraisal fees, survey fees, underwriting fees, title search fees, and title insurance. Those could total another few thousand dollars.

The expenses don’t end there. You’ll want to hire an independent inspector to look for defects in a home before you buy.  This will cost several hundred dollars, but could save you thousands in repairs. And then there are moving costs, state or city taxes, utilities installation and the costs of changes you might want to make to the home — such as new flooring or painting — that are easiest to do while it’s empty.

This isn’t meant to scare you off; buying a home is still a smart choice for many people, despite the costs. But it does take a lot of cash.

Can you afford the upkeep?

Your mortgage payment might be fixed for the next 30 years, but your property taxes and insurance rates can rise. And if you didn’t make a 20% down payment, you’ll have to buy private mortgage insurance, or PMI, until you have 20% equity in your home.

Once you’re a homeowner, you’ll also have to pay certain utility bills that might have been included in your rent. And you’ll be responsible for maintenance: double-pane windows one year, a new garage door the next, fixes to the roof five years up the road. It adds up.

These numbers are based on averages.  Plug your specific figures into a rent-or-buy calculator to find out if you’re ready for home-ownership. And know that there is no one answer that’s right for everybody. Whether you keep renting or buy, your decision should be right for you alone.

Source: NerdWallet, Inc.


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4 Money Moves for Young Adults


university students on a work placement .Whether you’re entering the workforce as a full-time employee at age 18 or 22, if you’re done with school, then you’ve got a lot of work ahead of you. Unless you’re a professional athlete, you’re probably going to work for the next 40 years. So, what should your first steps as a “grown-up” be? Here are four easy money moves you should make as soon as you start working full-time…

Look way ahead: You may be in your early 20s now, but at some point, you’re going to blink and you’ll be almost 40. You don’t want to have to play catch-up with your retirement savings, so start saving for those days as soon as you can. If your company has a 401k match, take advantage of that free money. If not, seek out a financial advisor and find out what your best options are.

Plan for emergencies: You can’t foresee losing your job or your car’s engine dying, but you can expect the need for a wad of cash to come out of nowhere. Having a savings account that’s dedicated to emergencies will prepare you for whatever life throws your way.

Get out of debt: If you’ve got student loan debt, pay it off as quick as you can after you’re done with school. Before you decide to get a new ride or buy your first house, use that money to knock your debt down to zero. Once you’re debt free, you can start making decisions about those larger purchases.

Find a side hustle: Another way to be prepared for those money emergencies is to find another source of income. Whether that’s working a weekend job or selling stuff on the internet, having a second source of income will come in handy if something happens to the first one.

 

Source: CUInsight.com


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How to Help Aging Parents Without Going Broke


The stress involved in being a care provider for your parents is twofold: You want to make sure they’re not in pain, while making sure that you don’t hurt yourself financially. The balance is a delicate one.

Almost a third of adults ages 40 to 59 have provided financial support to a parent in the previous year, according to a recent Pew Research report. If you’re in that situation, see what you can do to help without burning through your savings or going into debt.

Understand your parents’ finances 

If you’re not used to asking your parents about their money situation, this can be a hard topic to broach. But it’s necessary. You want to know upfront about how far their funds will take them, including retirement savings, pensions and Social Security payments. A more important question is: Can they afford assisted living or a nursing home, should that become necessary, and for how long? Also check their insurance coverage should they need expensive drugs or extended hospital care.

Evaluate health coverage

Make sure your parents will have a way to handle future health costs. Although Medicare can cover hospital, medical and prescription drug costs, there are limits, and some expenses may need to be paid out of pocket. Look into options like the Medicare Savings Program for your state, and also use the National Council on Aging’s free service, BenefitsCheckUp.org, to see what other help may be available to your parents.

Get professional advice

Once it’s clear that your parents will need more help soon, get a geriatric care manager to assess the situation. These professionals work with families to determine the best course of action for quality of life in terms of housing, legal services, home care and other assistance. Who is best fit to hold a power of attorney for your parents, for instance, is an issue they can help you sort out.

Get family involved

If you’re not an only child or if you have family members who can help, don’t try to do it all on your own. It can burn you out, and sharing the financial costs with other relatives can help ensure that it’s a family effort.

Consider hospice care

Sending your parents to a nursing home might not be the best option. If a parent has a terminal illness, hospice can be a good alternative, and Medicare or Medicaid may cover all the costs, including care, medicine and other supplies. You’ll have to make sure the arrangement is approved through your parent’s health coverage. Also note that any conditions unrelated to a covered illness may not come under hospice benefits.

By checking on programs and services that can help your parents, you can make supporting them financially a last resort instead of your first.

Source: NerdWallet, Inc.


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12 Tasks to Tackle Before Fall Arrives


Cooler weather is nigh — prep your home for its arrival while it’s still nice outside.Woman on a ladder

The days are getting shorter, and the nights are getting cooler. The kids are trudging off to school again with their backpacks, and leaves are falling from the trees.

Yep, it’s official: Fall is almost here. Now’s the time to finish up any last-minute maintenance projects and get your home and yard ready.

Take care of these 12 tasks to get your home clean, warm and ready for the cool days to come.

Exterior prep

1. Fix cracks in concrete and asphalt

Depending on where you live, these may be the last weeks this year when it will be warm and sunny enough to repair driveway and sidewalk cracks.

2. Clean out the gutters

No one loves this job, but we all need to do it annually. A few hours of work can prevent big problems later on.

While you’re up on that ladder, visually inspect your roof for damaged shingles, flashing or vents. You can also inspect the chimney for any missing mortar and repair it by tuck-pointing, if needed.

3. Turn off outdoor plumbing

Drain outdoor faucets and sprinkler systems, and cover them to protect them from the freezing weather to come.

4. Start composting

If you don’t already have compost bins, now’s the time to make or get some. All those accumulated autumn leaves will bring you gardening gold next summer!

5. Clean outdoor furniture and gardening tools

It may not yet be time to put them away, but go ahead and clean your outdoor furniture and gardening tools so they’re ready for storage over the winter.

6. Plant bulbs for spring-blooming flowers

Plant bulbs in October, as soon as the soil has cooled down, to reap big rewards next spring. If you’ve never planted bulbs before, select a spot in your yard that gets full sun during the day.

Interior prep

7. Prepare your furnace for winter duty

If you didn’t already do it last spring, consider getting your furnace professionally serviced in time for the cold season. At the minimum, though, visually inspect your furnace and replace the furnace filter before turning it on for the first time.

8. Clean the fireplace and chimney

Clean out the fireplace, inspect the flue, and ensure the doors and shields are sound. Have the chimney professionally swept if needed. Now’s also the time to stock up on firewood!

9. Keep the warm air inside and the cold air outside

Inspect your windows and doors. Check weatherstripping by opening a door, placing a piece of paper in the entryway and closing the door. The paper should not slide back and forth easily. If it does, the weather stripping isn’t doing its job.

Also, now’s the time to re-caulk around windows and door casings, if needed.

10. Light the way

Bring as much light into your home as you can for the colder, darker months. To accentuate natural light, clean your windows and blinds, especially in rooms that get a lot of sunlight.

11. Create a mudroom

Even if you don’t have a dedicated mudroom in your home, now’s a good time to think about organizing and stocking an entryway that will serve as a “mudroom” area for cold and wet weather.

Put down an indoor-outdoor rug to protect the floor. A fun and rewarding weekend project is to build a wooden shoe rack, coat rack or storage bench for your entryway.

12. Home safety check

Replace the batteries in your smoke alarms and carbon monoxide monitors. A good way to remember to do this is to always replace the batteries when you change the clock for daylight saving time.

Create a family fire escape plan, or review the one you already have. Put together an emergency preparedness kit so that you are ready for winter power outages.

Once you finish with your autumn home checklist, you will be ready to enjoy the season in your warm, comfortable home.

Content: Zillow.com


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Our Home Equity Freedom product may be just what you need.

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