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There’s a little-known fact about investing that most people don’t appreciate until they really think about it. That fact is this: if you give yourself enough time, the amount you have to save in order to end up with a large sum of money is actually very reasonable. Perhaps nothing can open your eyes to how much you really need to save than to look at a concept like the Latte Factor. This thought experiment says that if we forego small, daily expenses and instead save and invest that money, we’ll end up with a large sum of money given…

Personal Auto Insurance and Ride-Hailing Services Most personal insurance policies exclude business operations, and even go so far as to exclude coverage when transporting passengers “for hire”. These exclusions are nothing new, and have existed for decades. This is because personal insurance policies expect to cover activities such as driving to work, around town, or even the occasional cross-country road trip while on vacation. However, they neither provide protection, nor are they rated, to handle driving for business. Coverage Gaps Anytime the driver is logged into the ride-hailing dispatch app, they are waiting for a fare, and therefore are engaged…

Due to the pandemic, shut-downs have created an economic crisis that substantially increases the risk for lenders. With tens of millions of people unemployed, it’s not surprising there’s a greater reliance on credit. And with that, a higher percentage of missed payments on these accounts. To minimize risk, financial institutions are reducing some borrowers’ credit limits and lines of credit. They’ve also tightened approvals for new credit, removed some loan and credit card options from their websites, and even canceled consumers’ credit cards. While many cuts are in response to financial challenges from COVID-19, banks do make adjustments to…

Taking control of your personal finances means spending plenty of time looking at numbers. It can be overwhelming tracking expenses, creating a budget, monitoring credit card balances, and growing your income and net worth. But it’s also some of the most important work you can do for yourself. Another number you need to watch is your credit score. There are several different credit scoring models that produce a number between 300 and 850 as your credit score. According to Experian, people who are financially healthy have higher credit scores. Lenders use credit scores as a way to assess risk…

Personal finance management information is everywhere. You can read about how to manage your money almost anywhere on the internet these days. They write books about it. In fact, a lot of them are best sellers. If the opportunity to learn how to manage your finances is so accessible, why are North American household debt levels the highest they’ve ever been? Why do we carry debt? Personally, I’ve been there. I managed to spend $100,000 of money I didn’t have in one year, all on credit. The worst part for me is I’m a Chartered Professional Accountant, a money…

Carrying adequate levels of insurance protection on a home is imperative. If the insurance policy levels are too low, they may not cover the cost to repair or replace a home. In addition, underinsured claim penalties can be an additional financial burden. Conversely, with too much insurance costs are unnecessarily high. Below are the common values available to homeowners and which ones are important for insurance purposes. Market Value The market value of a home is what most owners think of when considering what their house is worth. It is the price at which a property could be sold on…

It’s open enrollment season right now and I’m a little bit bummed. For the past few weeks, I’ve been getting text messages from my previous employer (which happens to be the State of Minnesota) reminding me to enroll in my workplace benefits for the coming year. Since I no longer work for the state, I obviously can’t take advantage of any of these benefits. Working for the state had some pretty nice perks. Not only did I get a 6% match on my retirement accounts, but I was also able to utilize a High Deductible Health Plan (HDHP), which, in…

A little while ago, I wrote a post that I called, “How To Afford Anything You Want.” As the name suggests, the thesis of that post was that anyone can afford to buy whatever it is they want – it just requires creating a few systems and taking a little bit of time to plan things out in advance. My suggestions were pretty straightforward. First, create a system of sub-savings accounts using banks like Ally, Discover, or Capital One 360. These banks are good because they let you make as many different savings accounts as you want and allow you…

At some point in your life, you may fall on hard financial times and be unable to pay your bills. Despite your struggles, your creditors still want to get paid. They’ll likely employ a series of tactics called debt collection to get their money from you. This process may involve constant (potentially harassing) communication from the debt collector as well as more severe financial consequences like a severely damaged credit score or a court judgment issued against you. This is a tough spot to be in, but you’re not alone. According to Experian, more than 25% of Americans have…

If you’re into personal finance or financial independence, you probably know about the HSA (Health Savings Account) and how you can use it as a sort of extra tax-advantaged retirement account. The government gives you a limited number of tax-advantaged accounts, so it generally makes sense to take advantage of as many of them as we can. The beauty of the HSA compared to other tax-advantaged accounts is that it’s one of the few accounts that provides you the opportunity for triple tax-advantaged savings – that is, money going in tax-free, money growing in the account tax-free, and money that…