If you’re hoping 2018 is the year you (finally!) get your money on point, it’s smart to look back on last year’s successes and failures, while focusing on new, doable goals. That means foregoing, say, a quest to find the next cryptocurrency or better time the stock market. Instead, try focusing on some tried and true financial rules. Call them cliche, if you want, but they’re certainly effective. Here are 8 timeless financial tips to follow in the new year.
1. Live below your means
If you’re struggling with bills or debt, chances are, there’s a disconnect between how much you earn and how much you spend. Drafting a new budget — we’ve got a good template here — can resolve that disconnect, but here’s a big trick if you’re trying to build wealth: Aim to live below your means, not simply within them. That might mean sacrificing a few luxuries or downgrading to, say, a different cable subscription, but it’s a surefire way to maintain long-term financial health.
2. A penny saved is a penny earned
In 2017, it was all about the side hustle. Everyone was driving for Uber, teaching kids English online with VIPKID or delivering groceries with Instacart. But more money can’t solve your financial problems if you don’t put those dollars to work. And if you’re working more and more, but still in debt or barely paying the bills, something’s gone awry. In lieu of looking for more income, think about spending less and saving more. We know, easier said than done — which brings us to our next adage.
3. Pay yourself first
It’s easy to work all month, gather your paychecks and pay the bills only to realize there’s nothing left to save. That’s why many financial experts suggest “paying yourself first,” a method of budgeting where saving is essentially your primary expense. We’ve got a full explainer on how paying yourself first works, but it’s pretty much exactly how it sounds. You budget a set amount of your paycheck that’ll go into a savings account each month and deposit those funds before paying for your other wants and needs. Viola! — savings problem solved.
4. Be fearful when others are greedy & greedy when others are fearful
This advice comes from investment oracle (of Omaha) Warren Buffet — and it’s particularly worth following in 2018. In a world where speculation can drive the price of Bitcoin up from a few hundred bucks to nearly $19,000 in a matter of months, it’s smart to know a bubble when you see one – and to strive to do things differently.
In Buffet’s world, you wouldn’t buy Bitcoin at the top, but at the bottom when most investors are spooked and ready to cut their losses. Of course, this advice doesn’t just apply to Bitcoin. It applies to real estate, the stock market and anything else we invest in, but you catch the drift.
5. Avoid credit card debt like the plague
With the average credit card carrying an annual percentage rate over 15%, 2018 is a great year to break the cycle. Consider taking advantage of 0% APR balance-transfer offers — they’re pretty popular this time of year — to eradicate high-interest credit card debt. Then curb any impulses to run balances back up again.
6. Buy less home than you can afford
In a world where housing prices seem to rise at an endless pace, it’s hard to buck trends and borrow less than you can afford. But it’s more important than ever if you want to keep your financial house in order. By spending less on housing than the bank will lend you, you’re freeing up cash to save and invest.
7. Don’t keep your eggs in one basket
When it comes to investing, your best bet is diversifying your portfolio as much as you can. Make sure you have an appropriate balance of stocks, bonds, real estate and other investments. And if you want to take the easy way out, invest in low-cost index funds that diversify on your behalf.
8. Be prepared
Your future depends on the financial decisions you make today, so think beyond your basic checking and savings account. Be sure to build a proper emergency fund, bank money for retirement in a 401(k) or IRA, think about a college savings plan for the kids and cover your family for a worst-case scenario with life insurance.
This article originally appeared on Policygenius.
Image: Aleksander Nakic
Welcome to January, the time of year where we promise to do better. Common, and yet nebulous goals, include diet, exercise, time with family and friends or living life to the fullest. Also on the docket: money. If financial health is your New Year’s resolution, it helps to set specific goals. Here’s a crib sheet for getting your money on point in 2018.
1. Kill high-interest debt
Most credit cards carry over 15% annual percentage rates (APRs), so keep balances non-existent to avoid paying unnecessary interest. Already owe? Look into transferring those debts to a 0% APR balance transfer credit card.
2. Boost retirement savings
Inquire with human resources to bump up the money going into your 401(k) by a few percentage points. If you got a raise, you can save more for retirement without noticing a difference in your take-home pay.
3. Get an emergency fund
Start by saving $1,000 and keep saving until you have at least three to six months of expenses stashed away.
4. Save for a splurge
If you want money to travel, upgrade your home or just do something fun, budget for it by setting up and rolling any extra dollars into a separate savings account. That way you avoid tapping your emergency fund.
5. Get life insurance
To ensure your family is protected financially in the event of your death. (Bonus: Term life insurance rates are currently at a 20-year low.Here’s why.) If your income, responsibilities or family size has increased, consider whether you need to up coverage.
6. Shop around for a better deal
On well, everything. That includes your credit card APR (see above), auto insurance, homeowners insurance, cable television and internet service.
7. Question your money choices
Look at your spending, fixed expenses and investment strategy to see if you’re set up to live your best life. If not, be open to change. (Listen to Confucius, perhaps?)
8. Calculate your net worth
That’s the sum of your investments and assets minus your liabilities — and probably the best gauge of your financial health at any given time.
9. Check your credit report
Your credit is also incredibly important to your financial health since a good score qualifies for better rates on loans, insurance and more. See where you stand by getting your free annual credit reports from the three credit reporting agencies – Experian, Equifax, and TransUnion – at AnnualCreditReport.com.
10. Brush up a bad credit score
By fixing any errors you find on your credit report, paying down big debts and limiting new credit applications.
11. Look into refinancing
With interest rates hovering near record lows, now’s a good time to refinance a house, car or even student loans.
12. Track your spending for a month
If you spent more than you should in 2017. Write down every purchase you make and keep a close eye on your credit card bills. You might be spending more than you want on food, entertainment or miscellaneous expenses without even knowing.
13. Create a monthly budget
Nobody likes the dirty “b” word, but that doesn’t mean budgets aren’t helpful. In reality, budgeting is one of the best ways to afford everything you want in life. The new year is a great time to create a one. Plus, we’ve got a simple spreadsheet that’ll help you set up a budget in five minutes or less.
14. Automate your savings
Not saving enough? Set up automatic bank drafts to a savings account so you have no choice but to hit your savings goals in the new year.
This article originally appeared on Policygenius.
When it comes to side hustles, driving for Uber is easily one of the most flexible options available. You can turn on your app and work anytime you want, and you never have to commit to a fixed schedule. And really, there are few requirements to get started. If you’re over 21 and have a driver’s license, a clear driving record, rideshare insurance, and a decent car, then you’re basically “hired.”
But, that doesn’t mean that any car will do if you want to drive for Uber. The rideshare company has their own set of standards you have to meet for your car to qualify, although they are fairly broad and can depend on where you live. In Indiana, for example, your car has to meet the following requirements to become eligible for Uber rides:
- Model year 2002 or newer
- 4-door car or minivan
- Good condition and no cosmetic damage
- No commercial brandingIn New York City, on the other hand, your car needs to be a model year 2006 or later. Before you take the plunge to sign up for Uber, make sure to check local requirements to make sure your car is a good fit.
Which cars work best for Uber drivers?
Beyond Uber’s requirements, there are still some cars that work better for ridesharing than others. And if you’re looking for a new car with the intention of driving for Uber, you’ll want to pay attention to the details.
As you search for cars that might work for an Uber side hustle, consider cars that meet the following criteria:
1: Good gas mileage
Especially in the city. If you’re driving for Uber in an effort to rake in some cash, then your car’s fuel economy should be one of your biggest priorities. A car with good mileage will cost you less to fill up, which will leave you with bigger profits as you drive.
According to Consumer Reports, 2017 models with the best city driving fuel economy include:
- BMW i3Giga
- Ford Focus Electric
- Chevrolet Volt LT
- Mitsubishi i-MiEV SE
- Tesla Model X 90DThis is just a sampling, as there are obviously tons of cars with good fuel economy from nearly all model years that qualify to driver for Uber. You don’t need to drive a new car to get good fuel economy, but you do need a car that is efficient, especially in the city since you’ll spend a lot of your time driving for Uber off the highways.
While fuel economy is a big deal for Uber drivers, it’s not the only criteria to consider. The Tesla mentioned above may get 90 miles per gallon in the city, but it will set you back at least $82,000. Obviously, you’ll struggle to make money as an Uber driver if you’re paying a lot for an auto loan.
This is why price point is a big consideration, too. You want a car that gets good gas mileage, but you don’t want to overspend. The Ford Focus mentioned for fuel economy has an MSRP of $16,775 – $36,120, making it a much better deal. But there are literally dozens of cars out there that offer a good combination of affordability and fuel economy, and that includes older model cars.
A 2012 Toyota Prius may get as much as 40 mpg driving in the city, but could cost less than $11,000. Make sure to consider car price and fuel economy as you find the best Uber car for your needs.
3: Safety features
Whether you’re driving for Uber or hauling around your own family, it’s important to keep safety in mind. The safety features your car does or doesn’t have could make a big difference in your driving experience and whether someone becomes injured during a crash. Solid safety features can also help you save money on auto insurance, which could help make your Uber business more profitable as a result.
Some of the most important safety features include:
- Automatic emergency braking
- Forward-collision warning
- Blind-spot warning
- Rear cross-traffic warning
- Rear automatic emergency braking
- Lane departure warning
- Lane keeping-assist
- Lane-centering assist
- Adaptive cruise controlWhile it might be difficult to find a car that has all these safety features, you should definitely consider one that has at least a few. Ideally, you’ll find an affordable car that gets good gas mileage that also comes with safety features you can count on.
4: Spacious interior
Last but not least, you’ll need a car with plenty of room. Uber rides are good for up to four guests, so you’ll need space for three butts in the back of your car as well as a rider in the front.
Since even the smallest cars like a Toyota Prius can easily hold five adults, you shouldn’t have much trouble finding a car that fits the bill. Still, it’s worth considering whether your guests will have room to relax – and whether your trunk might be able to hold their luggage and gear.
Which car should you drive for Uber?
So, which car should you drive for Uber? At the end of the day, there are dozens of automobiles and model years that offer good fuel economy, an affordable price, and features that will keep your riders safe and help you save money on auto insurance.
So keep your eyes open and look for a ride that’s affordable, stylish, safe, and as far from a gas guzzler as you can get. After all, the whole point of driving for Uber is making extra money – not spending it.
This article originally appeared on PolicyGenius.
Moving from a larger property into your very own tiny home can be a relief — and even a dream come true. You’re downsizing your stuff and simplifying your life, after all. Meanwhile, you are (probably) lowering your expenses, too.
But, even if you’re ready to settle in to your smaller home, there’s one factor to consider before you actually move into your tiny home — you have to buy insurance.
But, what type of homeowners insurance should you buy? And how much will it cost? We spoke to tiny home insurer Darrell Grenz of InsureMyTinyHome in Portland, Oregon to find out. Here’s what he said.
How much does it cost?
If a tiny home is 1/10 the cost of a traditional home, the insurance should be 1/10 the cost as well, right?
Well, not exactly.
For starters, it’s important to note there is no cut and dry formula that dictates how much you’ll pay for tiny home coverage. Grenz said his firm and others take on the risk on an individual basis, and use more than one factor to determine costs.
“There are a lot of variables that go into it, depending on where you live,” Grenz said.
At the end of the day, “the average cost of tiny home insurance is probably $600 per year,” Grenz noted, adding that pricing can still be all over the place.
What type of tiny home insurance should you buy?
Part of the reason for fluctuating costs is the fact that tiny homes are built — and used — differently. Also, you can buy several different types of coverage for your tiny home, depending on use.
If your tiny home is on wheels and you plan to move it, you’ll need an insurance policy to cover your tiny home plus a trip endorsement or separate policy when you move it, Grenz noted.
Other than that, you can buy several different types of policies to cover your tiny home. For example, you can buy an RV policy, a manufactured home policy or a custom homeowner’s policy — all of which may be perfect for your tiny home.
But you may need a different type of policy if you rent out your tiny home as an Airbnb versus if you live in it full-time as well, Grenz noted.
Overall, he says the best way to find out the best coverage for your needs is to speak with an agent who specializes in this coverage so they can give you advice based on your unique needs.
How to get tiny home insurance without overspending
If you’re hoping to save on your policy, there are several ways to make this happen. But first, it helps to understand the factors that can impact price. Grenz says four main factors usually dictate how much you’ll pay for tiny home insurance: where your home is at, whether it’s stationary, who built it and how you use it.
If your goal is saving money, it can be really smart to think through these issues as you plan out the design and intended use of your tiny home.
For example, saving is easier if you don’t plan to move your tiny home from place to place.
“If you don’t need the transit coverage, you have more options,” Grenz said. “Insuring a tiny home that doesn’t move is a lot cheaper since there’s a lot less risk involved.”
Because buying a tiny home usually means downsizing, keeping your possessions at a minimum will also help you save. Of course, it all depends on who insures you and the type of coverage limits they offer.
You can also shop around with different insurers to find the best rate, but Grenz pointed out that it’s essential to “make sure you buy tiny home insurance from a reputable firm.” You don’t want to go with an insurance agency that doesn’t truly offer the right coverage for tiny homeowners.
“Be proactive and make sure you’re buying from an agent or firm that knows how to cover tiny homes,” he said.
Don’t put this off
As a last piece of advice, Grenz suggests planning ahead for this expense, if possible. Not only can planning ahead give you the best shot at finding a good deal, but it can help you avoid scrambling to get covered as you’re moving into your tiny home.
“People come to us last minute and we can’t always get them covered overnight,” Grenz said.
By planning ahead, choosing a tiny home insurer wisely and making sure you have the right type of coverage for your needs, you can ensure your new tiny home life will go off without a hitch.