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avatar You are viewing an archive of articles by Stephanie Colestock. Stephanie is the managing editor at Consumerism Commentary, as well as a contributing writer. She graduated from Baylor University with a Biology degree, but has since found a passion for personal finance. She also writes for a number of other sites -- including Dough Roller, Five Cent Nickel, and allCards -- in addition to running her small business, Pink Orchid Press. Stephanie lives in Washington, DC with her two sons and a German Shepherd.

Stephanie Colestock

Deciding how much life insurance to buy is a tricky decision. Your needs and those of your family have so many variables that it’s hard to establish a set guideline.

Life Insurance

There are a few guidelines, however, to use when calculating your own coverage amount. These guidelines can help you come to a good number that will protect your family while limiting your costs.

Here are six questions to ask in order to calculate how much life insurance you really need.

Question 1: How Much Do I Make?

The most basic rule of thumb with life insurance is that you should purchase a policy for 10 times your annual salary. And this is a good starting point.

Take into account your base pay, as well as any annual bonuses or commissions that you may bring in. If you have a side hustle that regularly makes extra money, you may want to add that into your number.

Also, keep in mind that this number accounts for replacing your salary for 10 years. You may want to replace it for longer, though.

Maybe you have small children and you want your spouse to be taken care of until the kids are on their own. In that case, multiplying your salary by 12, 15, or even 20 might be a better choice for your family.

Question 2: How Much Do I Owe?

If you were to pass today, how much debt would you leave behind? Take this into account when calculating your life insurance coverage.

Will someone inherit your home, or do you own it jointly? Either way, you may want to include the balance owed on the mortgage in your life insurance calculation.

When you die, a joint home owner must continue to pay the mortgage. If you are the sole owner, the mortgage stays with the property as it passes to the beneficiary. Including the mortgage balance in your life insurance coverage is a good idea. Even without a mortgage, you may want to account for property taxes, homeowner’s insurance, and other expenses so that your heirs don’t bear those financial burdens.

If you have credit card debt or other debt, you may want to also include that in the calculation. If those balances are cosigned, the other person will be responsible for the debts upon your death.

Credit cards are unsecured debts. This means that if you die and your estate doesn’t have money left over to pay them off, the credit card company is out of luck. However, if your spouse is a joint account holder, they will now be responsible for the remaining balance. You should also include any high interest personal your significant other will be forced to take on.

Lastly, you’ll also want to account for your final expenses here. Funerals are not cheap, and they’re often an unexpected expense that could easily eat up your family’s emergency fund (and then some).

The average funeral costs around $10,000. Depending on your last wishes — such as hiring Celine Dion to sing at your funeral or having your ashes spread ceremoniously on each of the seven continents — this may need to be adjusted. It seems morbid, but planning to pay these costs out of your life insurance is important.

Question 3: How Will My Family’s Life Be Impacted?

Think about how your passing would impact your family. This includes your value outside of the money you may bring in.

This is particularly true for stay-at-home parents. While they don’t usually have an income (aside from a side hustle or part-time gig), their value to the home is significant. If you are the full-time childcare for your children and take care of most of the household management, you’ll need to account for your partner having to replace those services.

What if you’re a working parent in a two-income household? You still may want to add additional money to allow your spouse to pay for extra childcare and help with household chores if they become a single parent.

Whatever cost you come up with for these additional, unpaid services, be sure to multiply that by the number of years you want to cover.

Question 4: Will My Loved Ones Need Health Insurance?

If your family is currently covered by a health insurance plan provided by your employer, that will disappear upon your death. Depending on what your spouse’s employer offers, your family may not have an affordable health insurance alternative.

What if your spouse’s employer offers a comparable health insurance plan to what you already have? If they would likely keep working if you pass away, you may not need to add the cost of health insurance to your coverage number.

However, if your family will need to purchase private health insurance, shop around a bit to get an idea of cost. The monthly premiums are not insignificant! Figure out how much a policy will run, and add this expense — times the appropriate number of years — to your life insurance coverage.

Keep in mind that your spouse and dependent children will be eligible for COBRA coverage upon your death if you were already receiving health benefits through your employer. This coverage can last up to 36 months. It is still a pricey option, however. And private insurance (if your spouse will not qualify for a new plan under an employer) will still be in their future.

Related: All About COBRA Coverage

Question 5: How Much Do I Need to Consider for College Expenses?

If you have children, you may already be planning for their college expenses by contributing to a 529 plan or other savings vehicle. You may want to account for the remaining funds needed in your life insurance coverage, though, as a way to remove that burden from your loved ones.

Setting aside $80,000-100,000 per child for education expenses is a general, but solid, number. This covers four years of tuition, room & board, and books at the average public college. Depending on how much you already have saved, your children’s ages, and their existing plans for the future, you may want to adjust this up or down.

Question 6: What Are My Existing Assets?

When calculating all of the numbers above, be sure to factor in everything that you’ve saved already. This may include savings accounts, funded college accounts, investments, and even other life insurance policies.

If your family will be able to draw on these assets, subtract them from your overall coverage needs. However, one should account for when these assets can be accessed.

For instance, if your spouse will be able to collect Social Security survivor’s benefits, you can account for that when calculating how much of your income to replace with insurance. However, keep in mind that your spouse won’t be able to receive benefits until they reach at least age 60, unless you have children under 16 years of age or have a child with a disability.

As With Most Things, It All Depends

It’s easy to throw in all of the things that could be covered by your life insurance policy. And when you’re talking about $500,000 or $1,000,000 policies (or more!), the zeros can make your head spin.

Of course, you don’t want to waste money each month by overpaying for coverage that is far beyond what your family needs. However, you also don’t want to pinch pennies and leave them with a policy that falls short.

In the end, you’re really just making an educated guess as to how much life insurance you really need. The questions above are great for determining your family’s baseline needs, though your own unique situations may impact this number. As with most personal finance situations, the ideal amount of coverage really depends on many factors. And, in the end, you would still rather err on the side of caution and purchase a too large policy, rather than a too small one.

Play around with the numbers and solicit your spouse’s opinion, too. Figure out how long you want, or need, to care for your family’s finances after your death. This is particularly important for families with a child with lifelong needs.  Then, once you have your magic number, you can shop around for the best policy price.

There are several resources you can use to get free quotes online. One of our favorites is Haven Life.

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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!

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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 you make the most of this big shopping event?

Prime Day is for Prime Members

As the name suggests, Amazon’s epic Prime Day is reserved for Prime members. But don’t fret if you haven’t signed up yet!

Prime membership runs $100 a year, or $12 a month. Amazon also offers a free 30-day trial, if you’d like to try the service before committing to the $100 annual fee.

If you aren’t yet a Prime member (why not?!), there’s still time to sign up and take advantage of Prime Day. Simply visit this page and either sign up for a membership (annual or month-to-month) or just the free trial. Then, get to shopping.

The Types of Deals

There are two basic types of deals on Prime Day: spotlight deals and lightning deals.

Spotlight deals are all-day discounts offered on hundreds of items throughout the site. These include deals like 33% off of a Roomba robotic vacuum or 51% off Sony Wireless Headphones. You’ll find discounts on pretty much every Amazon-branded product available, like the popular Echo Dot with Alexa technology. You can also snag magazine subscriptions for as low as $0.99 for 5 issues (Country Living and Redbook are two on the list).

Lightning deals are limited-stock items that are typically offered at even greater savings. The catch is, though, that these deals go quick (hence the “lightning”).

The items being offered as lightning deals are available at different times, and are offered until they sell out. These items go live as often as every 5 minutes, so you’ll need to be quick if you want to snag the next big deal.

When Will I Get My Stuff?

The glorious part of Prime membership — aside from being able to participate in Prime Day, of course — is that shipping for Prime items is two days or less.

Many Prime items now come with Next Day shipping, and some are even lucky enough to have Same Day delivery! You’ll also have access to Prime Now, the service that can deliver select items, groceries, and household goods in as little as two hours.

I’ve used Prime Now many times. It has saved me a trip to the grocery store in rush hour traffic. I’ve also used it to send ice cream treats to the house when a babysitter was there with my kids. I’ll admit, the service has spoiled me rotten.

There’s Not Much Time Left!

If you want to take advantage of the Prime Day deals you’ll need to act fast. The deals continue until 3 a.m. EST tonight, or until the lightning deals sell out.

Remember, Prime Day is only available to Prime Members, so you’ll need to at least sign up for a free 30-day trial if you want to snag a big discount. Now, what are you waiting for? Hop on over to Amazon and start shopping!

What’s the best deal you snagged for Prime Day?

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Travel is the one thing you can buy that makes you richer.   -Anonymous

Do you dream of sandy white beaches and daquiris in the sun? Maybe your ideal getaway is a cabin in the mountains, instead. Or perhaps you’re the type who would rather backpack through Italy, eating your weight in pasta and visiting the Roman ruins.

No matter your ideal type of travel, it’s one of those things for which everyone should try to find time. No matter the flexibility in your budget or the demands of your job, visiting new places can definitely be a possibility.

At some point, everyone needs to take a break from their regular routine. What better way than to venture away from home and see some place new? But how can you possibly afford pricey plane tickets when you’re trying to save for retirement or pay down debt?

Well, whether you stay nearby, take a car trip to Grandma’s house, or fly across the country, there are ways to travel without spending all your hard-earned savings. Yes, traveling can be expensive, but it’s almost always worthwhile (assuming you spend smart), and there are ways to make it more affordable than you might think.

Well, I have a trip coming up soon. I’m not an experienced traveler, so I searched for ideas and tips and compiled the best I found. Here are my favorites.

Check for Discounts

My grandmother has a saying (and believe me, she lives by this): Why buy it full-price when you don’t have to? Well, believe it or not, this doesn’t just apply to groceries and blue jeans.

Whether it’s a hotel room, flights, or tickets to an attraction, there are a slew of discounts to be found.

Accommodations

Don’t pay the rate on the hotel’s website without thoroughly checking around. Sites like Priceline, Orbitz, and Hotels.com offer discounted room options almost year-round. If you book with Orbitz, you’ll also earn points which can be used on future travel plans.

Learn More: 10 Ways to Avoid Hotel Fees

Want to stay in a specific hotel but can’t find a low enough price? Give them a call and ask if they have any sort of discounts available. Assuming it’s not a weekend where they’re sold out, they might be willing to offer you a cheaper rate just to keep you from going elsewhere. You can also offer to prepay for the room, as some hotels allow this option. (You can usually still cancel within 24-48 hours if needed and get a refund — be sure to ask about their own policy!)

Lastly, depending on your (family’s) needs, renting a room in someone’s home — or the entire home! — for your trip might be ideal, instead of just a hotel room. Airbnb is the most popular site for finding home-sharing accommodations; while they likely won’t offer you a continental breakfast, the discounted rate may easily make up the difference.

Flights

Depending on how specific your travel plans may be, you can get away with cheaper flights if you look hard enough.

Fly during off-peak times to save; most of the time, taking a red-eye is cheaper than that late-morning departure. You can also utilize sites like Priceline here, and use their Name Your Own Price Tool. The caveat with this is that you enter the price you’re willing to pay (committing to the tickets if your offer is accepted), but you don’t know the actual flight times yet. You may get that super cheap price that you want, but it could also be a 5am flight or have a 3hr layover in Detroit. If you’re flexible, though, and are more concerned with the cost, this is an awesome option.

Resource: Get the Most Value From Frequent Flyer Miles

You can also look into the “no frills” airlines, like Frontier (or if you’re traveling overseas, Ryanair is the cheapest — and simplest — I’ve ever flown). No, you probably won’t be on the newest jet with complimentary snacks and headphones, but you will be saving quite a bit on airfare compared to the other commercial giants. Be careful, though, as some of these airlines charge extra for a second carry-on, even going as far as to charge more at check-in than if you’d prepaid for your bags online.

On that note, if you know that each person will be bringing one or two suitcases along and your flight prices are in the same general range, an airline like Southwest might be your best bet. The airline hands out basic refreshments on board, allows two carry-on items per passenger, and includes two free checked bags.

I often choose SWA when flying with my kids because once you factor in those hefty checked bag prices, this airline is usually the cheapest. Oh, and things like checked car seats and strollers are also free (and not counted as part of the two checked bags, either).

Concerts, Shows, and Events

Finding cheap tickets can be a little tricky, depending on the event, but definitely not impossible.

Your best bet is to try to buy tickets in advance from the venue directly. This way, you’re more likely to pay face value. If the event is sold out, you’ll have to resort to other avenues.

These can include sites like StubHub or even eBay. Just be careful; while you can sometimes find a great deal (especially if you’re willing to pay a little bit over face value in order to snag seats to an in-demand event), reselling tickets is an income source for some ticket brokers. Be sure to look around before clicking that Order button.

Related: The Latte Factor: Your Spending Reflects Your Priorities

If you’re staying at certain resorts or casinos and have some very strong willpower, there’s also another option: timeshare presentations. These are not for those who are easily persuaded or give in to high-pressure sales. However, if you know that you can resist the salesperson’s charm, these are great ways to snag free tickets to in-demand events, earn spa passes, and even get complimentary nights added onto your stay.

Special Pricing

Are you a member of any groups, clubs, etc.? You may qualify for discounts as a student, government worker, resident (if you are traveling within your own state), AAA member, or any number of other memberships.

Comparison shop

As with anything you purchase, you should compare prices before you book airplane tickets or plan a vacation. In some cases you can plan a whole vacation around an inexpensive destination at the time of year you are planning.

Read guidebooks

It may feel touristy, but guidebooks will often give you great money saving tips. Some even offer per diem plans, recommend out-of-the-way hotel deals, or tell you about views or attractions you would have walked right past otherwise.

Depending on the area you’re visiting, you might also want to check into Living Social, Groupon, or other local discount sites before making plans. You can often get great deals on restaurants, attractions, museums, and events, and it might entice you to try something you wouldn’t have looked into otherwise.

Pack snacks

This tip is not just for parents! Prepping meals, packing snacks, and bringing along your own refillable water bottle is an easy way for all travelers to save.

I am a perpetual grazer, for instance, so I always bring a meal along for flights. A big sandwich, fruit, an empty stainless steel bottle (don’t try to go past TSA without drinking it all first!), and some protein bars got me through my entire cross-country venture. I didn’t want to pay $10 for a terrible in-flight meal or $5 for water in the terminal, so this saved my budget. I wasn’t tempted to buy a bunch of junk food as I walked past the newspaper stands, either.

Resource: Do You Really Need to Buy Travel Insurance?

Pack your own entertainment

Traveling with kids always means packing toys, books, and DVDs that will keep them occupied. But you can use this tip if you are childless or traveling solo as well.

I pack my own books, download movies, and make a playlist before I leave to keep myself occupied when I travel. You can even download many of your movies, shows, and songs from your online streaming services (like Netflix and Spotify) to enjoy offline.

Check the weather forecast and pack appropriately

There is nothing worse than packing too much and having to pay extra for your suitcase. While I’m the type of person who will always overpack to some extent, checking the weather ahead of time saves me a lot of wasted space.

Try to pack versatile items that can be worn or used more than once, in different ways. If you’re going on a long trip, you can use the hotel or your Airbnb’s laundry room to wash clothes and wear them again. Oh, and be sure to include some layers for cooler nights.

Related: Tipping Housekeepers: Whose Responsibility Is It to Pay Hotel Staff?

Leave room for souvenirs

Make sure you leave some room for souvenirs in your bag! You don’t want to have to pay for a second bag or for an overweight bag.

Of course, souvenirs can eat into your budget, too, so try to limit the tchotchkes that you buy. Save programs from shows, bring home seashells that you and your kids find on the beach, and take plenty of family photos. Years from now, these might be much more special to you than that plastic snow globe in the gift shop.

Walk as much as possible

Part of visiting a new place is seeing the sights, so throw on some tennis shoes and go see them!

It is much better for your health, and wallet, if you set out to see them on foot. While Uber and public transportation will save you money over a rental car, it still adds up. Try to walk wherever you can. You can also ask your hotel if they have bikes available for guests to use — depending on where you stay, it might be an easy way to snag two free wheels for the afternoon.

Stay close to home

We’ve all heard of the “staycation”: sticking close by and seeing the sights right in your own hometown or the biggest local city.

I admit that this is something my family needs to be better about. We’ve been into D.C. (since we are right down the road) to tour the monuments and such, but there’s so much more we could explore. We are also only a handful of hours from a number of big, exciting cities — like Philadelphia — which would make for an excellent weekend trip.

These types of close proximity trips are great because you can cut so many costs. You may have family in those towns that would allow you to stay in their spare bedroom. Maybe there’s a wonderful bus line that can get you there for less than the cost of gas and parking for your own vehicle. Plus, you can ask around with friends and neighbors to score plenty of insight into affordable tourist options, lesser-known restaurants, and local deals on food.

Learn More: Taking a REAL Vacation

Use points

If you, your spouse, or even a friend travels a ton for work or pleasure, you can cash in on their points for free hotel rooms.

In fact, I use this tip all the time when traveling back home to Texas to visit the family. Since my dad is always living out of a suitcase during the work week, he has a slew of airline and hotel points, and is always willing to send them my way when I need.

Mix pleasure and business

I am traveling to Salt Lake City, where I’ve never been, for work in early August. I’m extending my trip by a few days so I can enjoy the sights and scenery, though, and finally hike MOAB. The flight home is paid for through work — I just bumped the return date down — and the extra couple nights added to my hotel stay were pennies compared to the cost of making this trip separately.

This is how my family had vacations when I was a child and young adult; we tagged along with my dad on his trips to places like Atlanta and even Hawaii. It’s a great way to save on airfare, and your family can bunk in your (paid) hotel room for free.

Related: Thinking About Travel Hacking? Watch Out For the 5/24 Rule

What are your favorite tips and tricks to save money while traveling? Do you recommend any sites, books or tools for travel?

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CiT Bank Offering Bonuses Up to $400 for New High Yield Savings Accounts

by Stephanie Colestock

Update – This promotion is now EXPIRED Banks continue to pay bonuses to attract new customers. The latest offer comes in the form of a CIT Bank bonus of up to $400. If you’re looking for a safe place to tuck away your emergency fund or vacation savings, Everybody needs a safe place to tuck […]

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Be Generous Now to Save on Estate Taxes Later

by Stephanie Colestock

Whether you’re an investment guru with billions to your name or a small business owner who has seen years of hard work finally result in success, you definitely don’t want to see even more of your money eaten away by estate taxes. To combat this, you may be looking to spread the wealth now. This […]

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A Free Online Checking Account Earning High Interest: The FNBO Direct Checking With BillPay

by Stephanie Colestock

Have you been looking for a new online checking account? Preferably one with a higher-than-average interest rate? Then the FNBO Direct checking account may be the answer. I’m a bit particular when it comes to my checking accounts. I don’t like paying any monthly fees, regardless of how much money I keep in the account. […]

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How to Best Handle Old Credit Card Accounts

by Stephanie Colestock

One of the best things you can do to build awareness of your financial condition is to view your credit report. Your financial condition — as perceived by potential lenders — can cost or save you thousands of extra dollars throughout your credit repayments, such as the life of a mortgage, for instance. You can […]

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A Sign of the Times: Amazon to Begin Accepting Food Stamps

by Stephanie Colestock

There are over 44 million Americans currently receiving SNAP benefits, better known as food stamps. This financial assistance was designed to provide nutritious food to qualifying citizens, and about 54 percent of beneficiaries are children and the elderly. However, there are a number of struggles that SNAP recipients can face as far as actually spending these […]

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Trump Nixes the Fiduciary Rule Today… Is This A Good Idea?

by Stephanie Colestock

If you’ve been paying attention to financial news, you’ve probably heard mention of the fiduciary rule. This rule was approved last year under the Obama administration, with the goal of increasing transparency within the investment realm. It was designed to force advisors to suggest investment products to their clients that were more affordable, rather than […]

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