When it’s time to get a new car, one of the first decisions you’ll have to make is whether to buy it or lease it. If you aren’t paying cash and have to take out a loan, you’ll have a monthly payment either way. So which option is better?
While many financial experts recommend never leasing a car, there are a few times it does make sense. Here are some reasons you may want to lease a car:
- Lower monthly payments. Generally speaking, the monthly payment on a car lease is much lower than that of a car payment because it is based on a car’s depreciation instead of its purchase price. In addition, you may only have to put a little down, if anything at all.
- Fewer repair costs. Most likely, major repairs will be covered by your warranty. You’ll be responsible for general upkeep, but you won’t have to worry about a huge repair bill destroying your monthly budget.
- Less hassle when it’s time for a change. When you’re ready for a new car, you don’t have to worry about selling your old one. You can simply return the car when your lease expires and pick out a new one.
So why do people buy a car if it costs more and can be more of a hassle? Here are a few reasons:
- True ownership. Your car is yours. You can customize it as much as you like, and no one is going to expect you to keep it in pristine condition—or charge you if it isn’t.
- No mileage limits. When you lease a car, you must stay within your mileage limits or pay a pretty penny for exceeding them. When you buy a car, you can drive it as much and as far as you’d like.
- No monthly payment (eventually). If you have to take out a car loan, at some point you’ll pay it off and your monthly payment will drop to $0. When you lease, you will always have a monthly payment.
Looking at the big picture, leasing a car is actually more expensive in the long run. Not only will you always have a monthly payment, but also you won’t be building up any equity in your car that you can cash in later when you sell it.
But it’s not always about the money. If it’s important to you that you have a new car every few years with the latest technology and safety features, or if you use your car for business purposes and can write off related costs, leasing might be your best bet. Just make sure you run the numbers and take all factors into consideration.
Whether you decide to lease or buy, be sure to store the related documents on InsureYouKnow.org. This includes any loan documentation and/or a copy of your car’s title. It’s vital that you keep all your important financial documents in one place so you and your loved ones don’t have to dig through a mountain of paper whenever they need to be accessed.
You work hard for your money. When it comes to storing it, you want to know it’s in a safe place. So which is better for your financial needs: a bank or a credit union?
Ultimately, both banks and credit unions offer a number of benefits. Both offer checking accounts, savings accounts, and other financial products, like loans and credit cards. The main difference between them is that banks are for-profit entities while credit unions are nonprofit organizations. This means that banks answer to their shareholders while credit unions answer to their members.
What does that mean for you as a potential customer/member? Here are a few things to consider as you decide between a bank and a credit union:
- Membership requirements. Many credit unions have membership requirements. You may need to live in a certain area, be part of a certain profession, or work for a certain employer. Banks, on the other hand, are open to anyone.
- Interest rates. Credit unions generally offer higher interest rates. This is because they aim to please their members. Banks tend to offer lower interest rates in order to generate more profit.
- Fees. Similarly, credit unions often offer lower fees than banks. According to Bankrate’s 2018 Credit Union Checking Survey, 82% of the nation’s 50 largest credit unions offer free checking, compared to only 38% of banks.
- Convenience. The larger banks seem to have a location in every town; some seem to have a location on every corner. Many credit unions, on the other hand, only have a few locations in a specific region. As more people turn to online and mobile banking, this is less of a consideration than it used to be, but it may still be a factor.
- Customer service. At credit unions, customer service is a top priority. They are known for their personalized attention and fast service. While many banks also offer excellent customer service, especially smaller banks, some customers feel like they are treated as little more than an account number.
- Product availability. Large banks are able to offer a wider variety of financial products and services than credit unions. These include more credit card options (and better rewards programs) and investment services.
- Technology. Thanks to their larger budgets, banks tend to have better online and mobile services. Their services also often integrate more easily with personal finance and budgeting software such as Mint.com or Quicken.
Still can’t decide? Here’s some good news: Whether you choose to deposit your money in a bank or a credit union, your deposits will be insured up to $250,000. Just make sure your bank is a member of the Federal Deposit Insurance Corp. (FDIC) or your credit union belongs to the National Credit Union Administration (NCUA). This will protect you in the unlikely event that your bank or credit union fails.
After you open your new checking or savings account, you’ll want to upload the related documents to InsureYouKnow.org for safekeeping. Don’t forget to let your loved ones know they’re there!
Getting ready to welcome a baby into the world is an exciting time. You can’t help but think of all the adventures to come and dream of the future that awaits your new son or daughter. You start by planning for your child’s immediate needs, stocking up on diapers, decorating the nursery, and lining up day care if needed, before considering longer-term issues, like setting up a 529 plan to help fund your child’s education.
The last thing you want to think about during this joyous time is purchasing life insurance for your unborn child. You’re eagerly awaiting your baby’s birth, not anticipating his or her death. Nonetheless, it’s worth looking into before you make up your mind.
Here are a few reasons you may want to get life insurance for your child:
- It can serve as a savings vehicle. When you buy a whole life insurance policy (you can’t buy term life insurance for minors), the cash value grows slowly over the years. Your child can surrender the policy later and use the money as he or she wishes.
- It guarantees your child’s insurability. If your child develops a medical condition, you won’t have to worry about whether he or she will have life insurance. In fact, your child will be able to buy additional insurance as an adult if needed regardless of his or her health (check with your individual insurance provider to see if you’ll need to include an additional rider for this benefit).
- It provides peace of mind. Planning a funeral is difficult, and planning one for your own child is especially hard. Life insurance would cover funeral expenses, which can cost thousands of dollars, and perhaps allow you to take some time off work as you grieve.
On the other hand, here are some reasons why life insurance may not be the best idea:
- There are better ways to save. According to Consumer Reports, the average annual rate of return is 1.5 percent for the whole life guaranteed cash value. That doesn’t take into consideration associated fees that eat into the returns. You can easily beat that rate by investing your money elsewhere.
- It probably isn’t needed. Statistically, it’s unlikely your child will die. In addition, the main purpose of life insurance is to replace income or cover debts, and those situations generally don’t apply to your child. You most likely aren’t relying on your child’s income to pay your monthly bills.
- Your child probably can get term life insurance later. Again, statistically speaking, your child should be able to purchase a term life insurance policy as an adult. Term life insurance is more affordable and practical for most people.
Ultimately, purchasing life insurance for your child is a personal decision. If you do decide to get a policy, be sure to store the related documents on InsureYouKnow.org. Should the worst occur, you will want to be able to access the documents quickly and easily so you can focus on healing.
You’ve made it! After a long, fulfilling career, you’ve closed the office door for the last time and retired. Now you’re ready to relax and enjoy your golden years.
But as they say, the best-laid plans of mice and men often go awry.
Many retirees quickly discover that despite years of faithfully contributing to their retirement plans, they haven’t put away quite as much as they’d hoped. In fact, they may not have enough money coming in each month to meet their financial obligations. Those dreams of traveling the world are replaced with nightmares of dusting off the resume and finding another 9-to-5 job.
If you’re finding yourself in this situation, it’s important to remember that you’re not alone. According to Northwestern Mutual’s 2018 Planning & Progress Study, one in five Americans (21%) have nothing saved for retirement at all, and one in three baby boomers (33%) have between $0 and $25,000 in retirement savings. Four in 10 Americans (40%) expect to work until 70 years old or older.
Nonetheless, the idea of finding another job can be daunting. Instead of looking at it as a disappointment, however, you can look at it as an opportunity. Here are a few ways you can make sure your new job is an amazing job:
- Find a job in a new field. Have you always dreamed of working in a bookstore? Do you think it’d be fun to take tickets at a movie theater? This may be the chance for you to do something that excites you.
- Limit your hours. If you only need to supplement your retirement income, try working part-time. You’ll keep your brain busy and your wallet full but still have the freedom to spend a few hours each day pursuing other interests.
- Turn your hobby into a business. From selling hand-knit baby booties in your own Etsy store to hawking the vegetables you’ve lovingly grown in your garden at the neighborhood farmer’s market, there are a number of ways you can make money off your hobbies. Just be sure to check local regulations first.
- Stay active. It’s important to stay physically active as you age, and your new job could keep you moving. Consider becoming a tour guide or yoga instructor to ensure you stay fit both financially and physically.
- Share your knowledge. Many retirees want to get more involved with their communities, and teaching is a great way to do that. You can inspire today’s youth by becoming a teacher in the local school district or an instructor at a community college.
Help raise tomorrow’s children. Maybe you have fond memories of watching your children take their first steps. Maybe you never had a child but always enjoyed hearing their joyful laughter. Becoming a child care worker might be the right step for you.
Having a shortfall in your retirement savings isn’t the end of the world. In fact, it can open up a whole new world to you. Be sure to keep track of your retirement accounts and store the related paperwork on InsureYouKnow.org. The peace of mind you’ll have from knowing your information is safe and sound will help you enjoy your retirement—or semi-retirement—more fully.
It’s that time of year again! While experts agree you should avoid getting a large tax refund (which is essentially an interest-free loan to Uncle Sam), it’s hard not to feel giddy when you know extra money is coming your way. Many people look forward to getting a refund each year and use it as an excuse to splurge on themselves.
Before you buy that new TV, however, it’s important to take a close look at your finances and determine if that’s really the best idea. While putting that money toward a more practical purpose may not be as much fun, it can pay off in the long run.
Here are a few smart ways you can use your tax refund:
- Pay off debt. This is a no-brainer. If you’re carrying around credit card or other high-interest debt, you want to get rid of it as quickly as possible. Before that cash has a chance to get comfortable in your bank account, use it to pay down your debt and lessen some of the anxiety hanging over your head.
- Put it in savings. It never hurts to pad your savings. This could be the year that your hot water heater breaks down or your car decides to bite the dust. Set that money aside in a high-yield savings account so it’s there when you need it.
- Prepay your mortgage. Your home is probably your biggest investment—and your mortgage payment is probably your biggest debt. Putting a little extra toward your mortgage regularly can save you thousands of dollars and shave years off your loan.
- Fund your retirement. You don’t have any debt. You have a fully funded emergency fund. Does that mean you’re free to book that plane ticket to Cancun? Not necessarily. How are your retirement accounts doing? If you’re behind on your retirement savings, it’s not too late to catch up.
- Invest in yourself. It’s easy to let your career get stuck in a rut. Your tax refund can help you make a career change or take your skills to the next level. Use it to enroll in continuing education courses or certification programs and earn that promotion you’ve been waiting for.
- Upgrade your life. Sometimes you simply need to make a major purchase. If you’re a freelance writer and your computer is slow as molasses, you probably need a new one so your business doesn’t suffer. If your energy bill is sky-high and you live in an older house, it might be a good idea to replace your windows. Making smart purchases now can save you a lot of money down the road.
Whatever you do with your extra cash, make sure you keep track of it. The last thing you want to do is slowly spend it on a frozen treat here or a pack of gum there, only to discover it’s gone before you know it. You should regularly monitor your banking statements and other financial documents to ensure you know where your money is going. Don’t forget to store these and all your other important documents on InsureYouKnow.org. It’s part of being a knowledgeable, financially responsible consumer.