As featured in The Wall Street Journal, Money Magazine, and more!

Car costs got you down? Between maintenance, gas, and insurance coverage, having a personal vehicle is no small expense.

Well, the inimitable Suze Orman offers up ten tips for keeping car insurance costs down. These are especially helpful in a world where gas prices and maintenance expenses continue to climb.

Here’s the short version:

Boost your deductible

Keep cash on hand for emergencies, or call it partially self-insuring. Either way, raise that deductible as high as you’re comfortable and as high as your funds will allow.

This will keep your monthly payments down — and you can earn interest on that money instead.

Get less mileage out of your policy

Driving less than 10,000 – 12,000 miles yearly can often qualify you for an insurance discount. The less you’re on the road, the less likely you are to be a risk for the insurance companies.

This translates to lower premiums each month. You can also drive for “pleasure” — instead of “commuting” or driving for “business” — and often snag a discount. This is another benefit of working from home.

“Home in” on a discount

Yeah, yeah, that’s a bad pun. But the point remains: if you include your home insurance with the same company that provides your auto insurance, you might qualify for a discount.

Toss in a number of other policies, if needed, and you’ll save even more. For instance, I carry USAA coverage for two vehicles, two homes (my residence and a rental property), life insurance, and personal property.

Bundling these products together through the same company saves me a ton. It’s also easy keeping everything straight when I need to file a claim or get help.

Couple up on your policy

Two heads in one policy are better than one… policy for each head. You could get a 30% discount by joining forces to combat evil.

If you and your significant other are still on your own policies, get a quote for combining the cars into one. Chances are, you’ll save a few bucks.

Get defensive

Sometimes, taking a defensive driving course will lower your premium. Sometimes, it’s also incredibly boring.

Call and ask your insurance company if they’ll offer a discount for the successful completion of this course. If so, those few hours of your time may be well worth the savings. This can be particularly helpful if you have a teenager on your policy.

Put your degree to work

I told you an advanced degree was worth it, and here’s the proof.

Give your insurance provider a list of your lettered qualifications. Depending on the company and your accomplishments, this may very well translate to a monthly discount.

Play group

Suze suggests you look to your affiliated organizations, like alumni groups or teachers’ associations. They may provide special rates.

Of course, being a member of an organization like AAA is almost always a surefire way to snag another discount.

Slow down

Think “slowpoke”, not “Speedy Gonzalez.” Take your foot off the gas and avoid those speeding tickets in order to reduce your auto insurance rates. Companies only look at the last three years, so it won’t take too long to clean off your record from an insurance rate perspective.

Here you can also consider Snapshot from Progressive and similar technologies. Your insurance company sends you a device that you plug into your car. It tracks several factors, such as hard braking, miles driven, idle time, and night driving. Based on the results, you could save on your car insurance.

Give yourself credit

Insurance companies look at a number that is similar to your credit score when configuring your policy. So, make sure that you don’t declare bankruptcy or default on loans. Either of those could negatively impact approval for coverage and the cost of premiums.

Note that some states have outlawed the practice. California, Hawaii, Massachusetts do not allow insurance companies to consider credit scores, according to Consumer Reports.

Make the grade

If you’re a younger driver, keep your nose to the books. A 3.0 GPA in high school or college often reduces premiums.

Suze also suggests being vigilant about how kids are assigned to cars. My father solved this problem very simply, but in a way that I found disappointing: when I reached driving age, he sold his Porsche.

It may have been older and purchased used, but the combination of “16-year-old” and “Porsche” on the same policy had our insurance company seeing dollar signs. So, my dad nipped that in the bud by selling his weekend fun car.

Instead, he picked up a Nissan Maxima to add to our family Subaru station wagon. The practical (much less fun) car was both safe and less valuable — and less likely to be a tempting speed machine for a new driver. This meant lower premiums for the family.

Dad was ahead of the ball game. Darn.

Related: How to Intelligently and Responsibly Buy a Car

Do you have other tips for saving money on auto insurance? Share them below, in the comments!

{ 0 comments }

One could be forgiven for confusing a savings account with a money market account (MMA for short). There are, however, some key differences between the two account types. Here’s what you need to know about savings accounts and a MMA.

Savings accounts and a MAA are different from each other practically in name only. From a saver’s perspective, there is really no difference.

There are many misconceptions about the supposed differences between savings accounts and money market accounts. If you’ve ever tried to learn about these differences online, even from reading major banking industry websites, you may have received a great deal of misinformation.

Banking Deal: Earn 1.20% APY on an FDIC-insured savings account at Barclays.

Savings Accounts vs. Money Market Accounts

Withdrawal limits

Whether you open a savings account or a money market account at a bank in the United States, the bank handles it the same. It applies your cash to their books as an asset and records a liability in the form of your deposit.

The government considers both savings accounts and money market accounts as deposit accounts, not transaction accounts. Savings and money market accounts are not meant for frequent transactions. They are both limited by Regulation D, a Federal Reserve Board regulation that indicates that customers may make only six pre-authorized withdrawals from deposit accounts each month.

ATM and teller withdrawals do not count against this limit, but debit card transactions, checks, and online transfers do. You may have read online that only savings accounts have this limitation. However, the limitation applies to all deposit accounts, including money markets.

Interest rates

Money market accounts may offer higher interest rates, but not necessarily.

Take this list of high-yield savings interest rates, for example. It includes both money market accounts and savings accounts, and the most current rates offered. As you’ll notice, the rates across banks don’t prove the hypothesis that money market accounts have higher interest rates in general.

When the same institution offers money market accounts and savings accounts as separate products, the money market account often has a higher interest rate. But even this isn’t consistent from bank to bank.

For example, some banks offer a “high-yield savings account” as well as a traditional savings account. This more impressive-sounding product might provide a higher interest rate at that institution than all other products.

Fees

Banks may assess higher fees and minimum deposit amounts for money market accounts.

Because customers perceive money market accounts as more sophisticated than savings accounts, banks often limit customers to a select audience by requiring a higher initial deposit amount. This is particularly true when the benefit of choosing this type of account includes a higher interest rate.

Furthermore, the bank may charge a monthly or annual fee for the privilege of owning this type of account. While fees and high minimum deposits are common, many banks offer money market accounts for free. Shop around and read the fine print before you commit.

Related: Ally Bank Savings Account Review

Checks

Banks often offer check-writing privileges for money market accounts.

Well, some do and some don’t. Money market accounts are deposit accounts, which means customers may still make only six withdrawals per month, as described above. This is still true, even if the bank provides a checkbook.

Banks differ in how they penalize customers who exceed six withdrawals per month. In most cases, there is a fee for each withdrawal over the limit. Other banks may threaten to close your account if you exceed the limit. Banks may close your account if you exceed the withdrawal limit in three of the last twelve months.

While banks offer checks for money market accounts, some could, in theory, offer checks for savings accounts if they desired. Most do not.

Fun fact: you don’t even need an official document from the bank (or a mail-order check designer) to draw a check on an account. Any piece of paper with your account number, your bank’s name and routing number, the amount, the name of the recipient, and your signature will do. You may not even need to include your account number and bank’s routing number in some cases.

It might be difficult to find someone to accept a check written with a felt-tip pen on a cocktail napkin without a hassle. But courts have ruled in the past that a hand-written document intended to function as a check is considered a legal form of payment. Thanks to the Check 21 Act, paper checks are even less a part of the payment process than they were throughout the twentieth century.

FDIC insurance

Money market accounts and savings accounts are FDIC insured.

FDIC insurance doesn’t come automatically, but it is available for all types of deposit accounts held at banks located within the United States. This includes savings accounts and money market accounts.

More misinformation online states that money market accounts are riskier and could “break the buck” — or drop in value. While this is true for money market funds or money market mutual funds, it is not true for money market accounts or money market deposit accounts.

Money market accounts can be insured by the FDIC just like savings accounts and certificates of deposit. Always check the bank’s website to confirm that the bank is covered by FDIC, and if you are unsure, search for the bank using FDIC’s own Bank Find tool.

If the institution offering savings accounts or money market accounts is a credit union rather than a bank, the insurance comes from the National Credit Union Administration (NCUA). This coverage is effectively the same as FDIC insurance.

Related: Variety of Savings Accounts: Where I Keep My Cash

Money market funds: not savings accounts and not money market accounts

Money market funds — some institutions go so far as to confusingly call these “money market fund accounts” — are not FDIC or NCUA insured.

The money market fund product is often offered by both banks and brokerages. Banks use the customers’ money to invest in low-risk securities, like government or municipal bonds with short maturities. This differs from both savings accounts and money market accounts, with which banks use deposits garnered to lend to other customers.

With money market funds, the bank hopes to earn more from the bonds than it pays out to investors. A money market fund is an investment vehicle, not a form of savings, though it is almost as safe as an insured deposit account. There was a concern a few years ago during the economic crisis that money market funds would break the buck, but for the most part, investors were safe even during the worst financial crisis of the past few generations.

Investors in money market funds are subject to a management expense ratios that reduce the net return.

The differences between savings accounts and money market accounts are negligible. Plus, most are due to differences created by banks, not inherent differences in the products overall.

Be sure to read the terms of conditions to determine how you may use the account. And understand any fees they may charge you, and be aware of the penalties for not abiding by the terms.

{ 11 comments }

Ever wonder how social security is calculated? It’s not just an academic exercise. Understanding how the Social Security Administration calculates your retirement benefits can help you maximize your monthly check.

How Social Security is Calculated

I have exactly one friend who enjoys talking about money — you know, who actually likes discussing 401(k)s, saving rates, and taxes.

Well, she recently brought up the topic of Social Security because her father is 62 and was thinking about filing. I asked her, “Why would he do that?” Her response: “Because he can.”

Her father is an intelligent, successful doctor who still practices medicine several days a week. I thought to myself, “Surely, if I could just help him understand the way Social Security is calculated, he will change his strategy.” And he did! Once he understood the process, he wanted to optimize his check. For him, that meant waiting.

You can understand, too. I’ve described below the basic steps used to determine your benefit. The plan you have now might not be the best plan for your bank account.

1. Every year of earnings is calculated to represent present value

Social Security does this for your benefit, actually. The present value calculation neutralizes the effects of both wage growth and inflation.

Earning $10,000 in 1982 is like earning $25,751 in 2017. Social Security adjusts every year of your earnings to the equivalent value in the year you file. The later you can wait to file, the more likely it is that your benefits will be higher.

2. Your highest 35 years of income are averaged to determine your Average Indexed Monthly Earnings (AIME)

Social Security includes zeros in your average if you worked less than 35 years. Every year you work, your AIME will be recalculated—a high income year will replace a low income year, or a no income year.

If you are currently in your peak earnings, working a few extra years could make a big difference in your benefit.

3. Social Security will apply its own algorithm using your AIME to determine your monthly retirement benefit, or Primary Insurance Amount (PIA)

Social Security uses a complicated calculation. There is no need to compute it on your own. You can create an account with My Social Security to monitor your earnings record and view estimated monthly benefits. 

4. Full Retirement Age

Your monthly benefit is adjusted based on the age you choose to retire. It increases if you wait until after your full retirement age and decreases if you file early. Social Security determines your full retirement age on a sliding scale based on the month and year you were born. For most people retiring soon, this is approximately 67 years old.

When Social Security calculates your monthly benefit, they assume you are going to file as soon as you hit your full retirement age. However, you get to choose your filing date. The earliest age you can collect standard social security benefits is 62.

Filing Early

Let’s say that you are someone born in 1960 who has averaged a salary of $60,000 a year. When you hit your full retirement age in the coming years, you’ll receive a Social Security benefit of $2,007 per month.

Social Security reduces your benefit for every month you collect before your full retirement age. For someone born in 1960 and averaging $60,000 a year in earnings, collecting social security at age 62 results in a monthly benefit of $1,403 compared to $2,007, approximately a 30% reduction.

Filing Late

In contrast, Social Security increases your benefit for every month after full retirement age you delay filing. In the example above, if you wait until age 70, you would receive $2,483 compared to $2,007, approximately a 24% increase. But don’t wait until after age 70 because your monthly benefits stop increasing after that age.

Delaying Social Security for a few years can make a big difference over time, especially if you or your dependent spouse plan to live a long time.

Other Factors

This is not straightforward stuff. The steps above cover basic computations, though many other factors should influence your decision for when to file. For example, you should consider these factors:

  • Your overall tax situation
  • If you are working or earning income before full retirement age
  • Your immediate cash flow needs
  • If you have dependents that may qualify for family or survivor benefits
  • Your health and longevity
  • Your spouse’s health and longevity
  • If you have a spouse or divorced spouse who is a high income earner

When it comes to Social Security, the devil is in the details, and it is nuanced for every situation. And you want to get it right because you only get to file once (well, twice if you include the do-over provision).

To ensure you are filing at the best time for your situation, it’s a good idea to speak with a retirement professional, contact the Social Security office, AND keep learning on your own.

Listen to this podcast on advanced social security strategies

{ 0 comments }

Aspiration Summit checking account offers a unique blend of features. From an excellent interest rate to virtually no fees, Aspiration is ideal for consumers looking to be treated fairly by a bank. Read our Aspiration Summit checking account review for all the details.

In the world of cash back and interest rates, I try to make as many purchases as I can with a good cash back credit card. Utilities, groceries, clothing, merchandise . . . the list of what I use my credit card for is endless.

And yet, as much as I try, I still end up spending more using my checking account and debit card than I do with my credit card. This means I’m missing out on cash back opportunities.

Yes, a good checking account is vitally important to a healthy financial lifestyle. But paying unnecessary fees is the easiest way to drain your checking account, especially without the benefit of a great interest rate. Plus, there are way too many banks out there willing to provide such a disservice to you and your account.

Well, the Aspiration Summit Checking Account is the antithesis of those high fee accounts. It offers its customers a fantastic interest rate without the detraction of a single fee.

Here’s how it works.

Aspiration Summit Checking Account

Aspiration Summit Checking Account review

The Aspiration Summit Checking Account is backed by Radius Bank and is FDIC-insured.

After being approved, you’ll receive a Radius Bank debit card. You can use the card just about anywhere. Unlike other checking accounts, it requires no minimum amount of debit transactions in order to receive the fee-free account. There is also no minimum balance requirement.

Even more intriguing, 10% of all revenue that Aspiration generates goes to charity. So, how can they offer all of this?

Well, oddly enough, it’s not available to everyone. In order to become an Aspiration Summit Checking Account holder, you must receive an invitation.

While that may sound daunting, all it takes is a short form with personal information. Soon after, you’ll receive an invitation asking you to join (I received my invitation 4 days after requesting an invite). Any U.S. citizen or permanent resident over the age of 18 with a Social Security Number and a checking or savings account can request an invitation.

There are three primary benefits to owning this checking account. They are:

  1. The current interest rate for accounts with more than $2,500 is 1.00 APY. (It’s 0.25% APY for less than $2,500.)
  2. There are no fees and no minimum balance requirements to maintain. The minimum starting balance to open an account is $10.
  3. Aspiration will never charge you a fee to use an ATM.  Not in the United States or around the globe. Not ever. (The ATM operator may charge you their own fee, though, so be aware.)

To my knowledge, no other account in the country offers all three benefits above. It’s rare enough to find a checking account that offers a high interest rate. When combined with absolutely no fees or ATM fees worldwide, I had no choice but to sign up for an account for myself.

Now my mortgage, electric bill, and every other non-credit card purchase flow through my Aspiration Summit Checking Account.

Aspiration Summit Checking Mobile App

For mobile users, there’s an available free app in the iTunes store. The app allows you to manage your Aspiration Summit Checking Account. Aspiration does a good job of keeping the app updated, too. In fact, the new 1.4.5 version was just updated June 23rd, 2017.

Current features of the mobile app include:

  • Deposit a check with your phone’s camera. No more searching for your bank or an ATM!
  • The only money Aspiration makes are the “tips” you choose to pay them — and you’re free to choose zero
  • Easy transfers between Aspiration and your other accounts
  • Pay your bills, or send a check to a friend
  • To-the-minute balance & transaction tracking
  • Touch ID lets you sign in with your fingerprint (on supported devices)
  • 3D Touch QuickActions (on supported devices)
  • Aspiration works with Apple Pay, Mint, Venmo, & Paypal
  • Two-factor authentication for stronger security

The only time your checking account has the potential to lose money to fees is when it is overdrafted. The bank charges $25 overdraft fee anytime it attempts to draw funds from your account and you do not have them.

Related: 5 Most Annoying Banking Fees

If your account remains negative for five consecutive days, a $5 daily overdraft fee charge kicks in. This will be charged until the account balance is brought back up to the black. Because you cannot also own a savings account, there is no overdraft transfer protection service. So, please do whatever is necessary to keep proper track of your debits.

Rarely do I come across a financial product that I have a hard time finding fault with. Whether a high annual fee, a limited set of circumstances, or some other catch, financial companies that want you as a customer do so to make money. However, the Aspiration Summit Checking Account holds none of these negatives.

For anyone in need of a checking account or looking to upgrade their current checking account, start here:

{ 0 comments }

10 Easy Ways to Save Money

by Luke Landes
Saving strategies for the real world

This year, I’ve spent more money than ever. I’ve been able to swing these extra expenses — including lots of fun new gadgets I’d put off buying for years — without hurting my budget. But now, I’m ready to pull back and start ramping up my savings again. We all know that Americans are generally […]

22 comments Read the full article →

A New Bank of America Perk: Free Museum Passes

by Abby Hayes

Bank of America has a long history of supporting the arts through philanthropy and raising awareness. But they’re stepping up their game in 2017 with their Museums on Us program. This program allows qualifying Bank of America members to get into local museums for free on certain weekends, through the rest of this year! Here […]

0 comments Read the full article →

Capital One Spark Business Checking Account Review

by Michael Pruser

I created my small business in 2010. One of the very first things I did was sign up for a business checking account. Living in Miami at the time, there was a brick-and-mortar Citi location just a half block away. So, that is the bank I signed on with. The “green” business checking account was […]

0 comments Read the full article →

A Complete List of Sales Tax Holidays in 2017

by Abby Hayes

Sales tax holidays are a surprisingly great way to save money, especially during the back-to-school shopping season. On specific dates, states do not require merchants to charge customers sales tax. Even if sales tax seems like a minor line item in your budget, it can make a big difference. Sales tax holidays are an excellent time […]

9 comments Read the full article →

Are Cash Back Websites Really Worth the Hassle?

by Adam Luehrs

You’ve probably seen at least a few of your friends brag about their coupon-clipping triumphs and bargain-hunting victories all over social media throughout the years. However, it suddenly seems like everybody has moved past sales and coupons into the world of cash back websites. What’s the hype? These websites offer a very tempting service by […]

0 comments Read the full article →

How to Get the Best Deals on Amazon Prime Day

by Stephanie Colestock

Starting last night, Amazon’s 3rd annual flash sale, called Prime Day, went live. The big event runs for 30 hours, ending at 3am EST on Wednesday, July 12. So, shoppers still have plenty of time to take advantage of hundreds of huge deals on the site. So, what is Amazon Prime Day, and how can […]

0 comments Read the full article →
Page 1 of 32612345···50100150···Last »