Thursday, December 21, 2017

26 Legit Ways to Make Money

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You need extra money, but you’re not sure where to start (or what’s legit). Don’t worry, we’ve got you covered.

NerdWallet rounded up 26 legitimate ways to earn some extra income — at home or out and about — including freelancing through Upwork, picking up odd jobs on TaskRabbit and delivering meals for Amazon.

We listed each option based on how fast you can get started and get paid. While most people prefer fast cash, don’t discount the “slow” gigs, as they may pay more in the long run.

  • Fast — If it takes two weeks or less.
  • Medium — For gigs that take closer to a month.
  • Slow — Anything that would likely take more than a month.

1. SELL YOUR GENTLY USED CLOTHES

Selling clothes you no longer wear is a quick way to make some money. Start with local consignment shops for faster cash, or use sites like ThredUp and Poshmark to find buyers. If you go the online route, be sure to take clear, well-lit photos of your pieces and research similar items to set competitive prices. Get tips on how to sell your clothing.

Total time: Fast

setup: fast

  • You can sell used clothing and accessories several ways, but they’re all pretty quick to start.

payment: fast to medium

  • Fast: A brick-and-mortar consignment store like Plato’s Closet will give you cash on the spot.
  • Medium: Other in-person and online consignment shops pay you when your items sell, or when they receive and inspect your items. Either way, allow at least a month for your payout.

Requirements

  • Gently worn shoes, clothing and accessories.
  •  

    Get cash on top of the rewards you already earn.

    You’ll still get the rewards your current card offers, plus an added 2-10% cash back at participating stores.

    See how to earn that cash

     

    2. TRADE IN OLD PHONES, ELECTRONICS FOR CASH

    Have an old phone, iPad or gaming system lying around? Sell it on a site like Swappa and NextWorth. Check out Amazon’s trade-in program, which pays participants in Amazon gift cards — and eBay, too. If you’re in a rush for cash, try an ecoATM. Learn more about selling used phones.

    Total time: Fast

    Setup: Fast

    • Selling directly (Swappa, LetGo, Craigslist): In most cases, you take photos of the phone, verify the electronic serial number (ESN) is clean and post your listing. Some sites review and approve postings, but the time is minimal.
    • Selling to reseller (NextWorth, Gazelle): Answer a few questions online for an instant quote.

    Payment: Fast to Medium

    • Selling directly: When you get paid depends on how quickly your phone or device sells. Once the item sells, payment is fast.
    • Selling to reseller: First, you need to ship your phone to the reseller, who will then inspect it before payment is sent via check or PayPal. Devices are typically inspected within five business days. With Gazelle, you can take it to a kiosk for immediate payment.

    Requirements

    • A used phone, laptop, gaming system, etc.
    • Cell phones: You need to verify the phone is not stolen or under a repayment plan.

     

    3. RENT OUT YOUR PARKING SPOT

    Parking spots can be a hot commodity, particularly in crowded areas. If you have a driveway or dedicated spot that you don’t use, rent it out on Craigslist or another service. Just make sure leasing your space is allowed if you’re a renter or belong to a homeowners association.

    Total time: Fast

    setup: fast

    • Simply list your space on a site like Craigslist.

    payment: fast

    • You set the payment terms when you rent out your spot via Craigslist. You can choose to be paid upfront for short-term rentals, or monthly for longer rentals.

    Requirements

    • Check the terms of your rental agreement or condo/homeowners association to ensure you can rent out your parking space.

     

    4. DRIVE FOR UBER, LYFT

    Join Uber or Lyft (or both) and earn money by driving passengers around. Just don’t forget to factor in gas and maintenance costs. You need a clean driving record and a newish car in good condition. Learn more about what it takes to drive for Uber and Lyft.

    Total time: Fast

    setup: fast

    • Allow about a week for the application process, background check and car inspection.

    payment: fast

  • Earnings are typically paid out every Thursday, but there are options to get paid the same day.
  • Requirements

    • A car with four doors. It must also meet other requirements, such as year, physical condition, etc.
    • You may need to change your car insurance to include ride sharing.

     

    5. MAKE DELIVERIES FOR AMAZON, UBER EATS

    Take advantage of the growing delivery trend and sign up for a service like Instacart, UberEats, Postmates or Amazon Flex. You get paid per delivery, in most cases, and can even earn tips. A car isn’t always required — Postmates lets you use a bike, scooter or your own two feet to make deliveries — but a background check almost always is part of the deal. Learn more about how to get started with Amazon Flex, UberEats and Instacart.

    Total time: Fast

    setup: fast

    • The background check can take up to five days.

    payment: fast

  • Instacart pays weekly.
  • Amazon Flex pays twice a week.
  • UberEats pays out weekly or daily, depending on the option you select.
  • Requirements

    • You’ll need a way to deliver items, but it could be a car, scooter or bike, depending on service.
    • A smartphone is necessary to accept and process jobs.
    • Each delivery service has a minimum age requirement, but it varies by service.

     

    6. BECOME A DOG WALKER OR DOG SITTER

    Love dogs, but not ready to get one of your own? Get your fix by taking care of other people’s pooches — and get paid for it. If your home isn’t dog-friendly, consider becoming a dog walker. Apps like Wag! offer on-demand dog walking, so you can pick up walks when your schedule allows. If you have space (and your landlord’s permission, if you rent), offer overnight dog boarding. Dog sitters on Rover.com, the go-to site for pet-sitting, generally command $25 to $35 a night, according to the company.

    Total time: Fast

    setup: fast

    • It can take up to five days for your Rover profile to be reviewed and approved.
    • The application process for Wag! can take up to two weeks, and you must pass a test and complete an orientation class.

    payment: fast

    • Rover: You receive payment in your account two days after completing a stay.
    • Payments received via PayPal are released within one to four days. Payments via check can take up to five business days to process, up to 20 days to arrive and incur a $2 fee.
    • Wag! walkers get paid weekly via a service called Payable, which is similar to PayPal.

    Requirements

    • For Rover or Wag!, you’ll need to live in an area where the service operates.
    • If you want to pet-sit, you’ll need an apartment or house that allows pets.
    • You’ll have to pass a background check.

     

    7. GET A BABYSITTING GIG

    Babysitting isn’t just for teens. Everyone from college students to recent retirees can make money watching other people’s children. Word-of-mouth referrals from friends and family are still a great way to get started, but you can also create a profile on Care.com or Sittercity to expand your reach. Note any specialized skills, such as CPR certifications or experience with special needs children, to make yourself more marketable.

    Total time: Fast

    setup: fast

    • You can create a profile on Care.com in a matter of minutes.

    payment: fast

    • You typically get paid when you complete your gig.

    Requirements

    • You usually need to be at least 18 to list as a caregiver on sites like Care.com.

     

    8. FIND WORK AS A HOUSESITTER

    If you’re willing to watch someone’s home — and maybe feed the pets, water the plants and take out the garbage — become a housesitter. Tap your personal network for referrals or try out HouseSitter.com, which connects homeowners with housesitters. People often make $25 to $45 a day, according to the company’s website.

    Total time: Fast

    setup: fast

    • You can create a profile on HouseSitter.com in a matter of minutes, though it may take time to secure your first housesitting gig.

    payment: fast

    • You typically get paid by the homeowner when you complete your gig.

    Requirements

  • Most sites have an age requirement.
  •  

    9. PICK UP FREELANCE WORK

    Websites such as Upwork, Fiverr and Freelancer offer opportunities to do a variety of freelance jobs, such as writing, programming, design, marketing, data entry and being a virtual assistant. Fluent in a second language? Check sites such as Gengo or One Hour Translation, or drum up business through a site of your own. No matter what kind of freelancing you do, keep track of the going rate for the kind of work you provide so you know if you’re charging too much or too little. Learn how to get started on Upwork.

    Total time: Medium

    setup: fast

    • Upwork will approve your profile within 24 hours. But keep in mind it can take time to land your first freelance gig.

    payment: medium

    • Payment varies by site. On Upwork, you’re paid after you and the client review the work, 10 days after the billing period ends. On Fiverr, you’re paid when the work order is complete, but you can’t withdraw funds for another 14 days.

    Requirements

    • Upwork requires users to be at least 18. Fiverr sets the age requirement at 13. And Freelancer requires users be at least 16.
    • Some sites require you be a U.S. citizen or permanent resident.

     

    10. TEST WEBSITES AND APPS

    Sites such as UserTesting.com will pay you for your thoughts on how well — or not so well — certain websites and apps worked. You’ll have to pass a short test to be accepted, then you’ll be paid $10 for each 20-minute test, which involves a recording and answering four follow-up written questions.

    Total time: Medium

    setup: medium

    • You typically need to complete a sample test as part of the application process.
    • You will start receiving testing opportunities after your application is approved.
    • The timeline for approval can vary.

    payment: fast

    • You get paid seven days after completing a website or app test.
    • Payment is issued via PayPal.

    Requirements

    Requirements

    • You need to be at least 18.
    • You need a computer, internet connection and microphone.
    • Mobile app testers also need an iPhone, iPad, Android phone or Android tablet.

     

    11. PICK UP TASKS ON AMAZON’S MECHANICAL TURK

    Even in the age of automation, some jobs still require a human touch. Companies often outsource those jobs via services like Amazon’s Mechanical Turk. These jobs can be tedious — tagging images, transcribing videos, classifying receipts — and can take anywhere from a few minutes to a few hours. Pay depends on the task, and the person requesting the work gets to approve the finished product before paying you. That can leave room for scams, so do your research and join a community like TurkNation, which can steer you away from shifty dealers. Read more about doing tasks on Mechanical Turk.

    Total time: Medium

    setup: Fast

    • Amazon will send you a registration invitation within a few days of applying, if you’re approved. From there, Amazon will verify your identity, which can take up to 24 hours.
    • You also need to establish an Amazon Payment account to get paid for your work. This only takes a few minutes.

    Payment: Slow

    • After you submit your work, the requester has 30 days to approve it and pay you.
    • Once paid, you can transfer earnings to your bank account, which can take a few days.
    • Payment for new workers is held for 10 days before it is released to their Mechanical Turk earnings account.

    Requirements

    • You must be at least 18 to register for Mechanical Turk.
    • You also need an Amazon account to register for Mechanical Turk.

     

    12. SELL UNUSED GIFT CARDS

    Unload your unused gift cards using a site like Cardpool or Giftcard Zen. You can sell cards for a percentage of the balance or trade them in for a card you’ll use. Cardpool also has kiosks and cashier-assisted locations so you can get cash on the spot. Read more about what to do with unwanted gift cards.

    Total time: Medium

    Startup: Fast

    • You can get an instant offer or quote via sites like Cardpool and Gift Card Granny.

    Payment: Fast to medium

    • You can sell gift cards at kiosks and participating retail locations to get cash the same day, or try to sell it online. The latter takes longer, but you may get a better offer for your gift card.

    Requirements

    Requirements

  • You typically need a balance of at least $20 to sell your gift card. Not all cards will generate offers.
  •  

    Airbnb hosts earn an average of $924 per month, according to data from Earnest, an online lender.

     

    13. LIST YOUR SPARE BEDROOM

    Have a spare bedroom — or two? Making it available on vacation rental sites can provide a lucrative side income. For example, Airbnb hosts earn an average of $924 per month, according to data from Earnest, an online lender. If you’re a renter, just make sure that everything is kosher with your rental agreement beforehand. Learn how to cash in on short-term rentals.

    Total time: Medium

    Setup: fast

    • You can create a listing and start accepting reservations in the same day.

    Payment: fast to medium

    • Payment is disbursed once the rental starts (VRBO, Airbnb), but total time to payment will depend on payout method. PayPal is the fastest option, when available; payment appears within one business day.

    Requirements

    • Own or rent your home
    • Comply with any rules governing short-term or vacation rentals in your property, including city ordinances and rules issued by your landlord, condo board or homeowners association.

     

    14. RENT OUT YOUR CAR

    City-dwellers often don’t use their cars for days or weeks at a time. That idle time can translate to money with services like Getaround and Turo, which let you rent out your car by the hour or day. Earning potential varies by car and location, but standard vehicles typically rent for $30 to $50 per day. Luxury cars and sport-utility vehicles command even more money. Just be sure you talk to your insurance provider before signing up to make sure that you don’t run afoul of the policy.

    Total time: Medium

    Startup: fast

  • You can create a listing on Turo or Getaround in under 30 minutes.
  • Payment: medium to slow

    • Turo sends payment within 30 minutes of the end of the rental. Payment is issued via direct deposit and can take up to three business days to appear in your account. For rentals longer than one week, Turo issues partial payments every seven days.
    • Getaround rental earnings accrue monthly and are paid out by the 15th of the following month.
    Requirements

    • You must own your car and it must meet certain requirements (make/model/year/mileage).
    • You must have a current, valid driver’s license.
    • You must be at least 19, though the age requirement for Turo is 21.

     

    15. TAKE SURVEYS FOR MONEY

    You can generate a small side income taking online surveys — but don’t expect to be rolling in the dough. Survey sites don’t typically offer a big payoff, unless you invest a lot of time, and many sites are more useful for earning gift cards than cash. Some of the more popular survey sites include Swagbucks and Global Test Market. Read our analysis of a dozen survey sites to find out which one is best suited for you.

    Total time: Medium

    setup: fast

    • You can register with a site and start taking surveys in a matter of minutes.

    payment: medium

    • The time it takes to get paid depends on the survey site and how much time you dedicate to taking surveys.
    • Some sites only let you cash out after you hit a minimum earnings threshold. With InboxDollars, for example, the threshold is $30.
    • Other survey sites issue points, which can be redeemed for cash (via PayPal) or gift cards.

    Requirements

    • Most survey sites have a minimum age requirement, which ranges from 13 to 18, depending on the site.
    • Individual surveys may have specific requirements. Don’t be surprised if you are disqualified from a survey without much explanation.

     

    16. SIGN UP FOR TASKRABBIT

    If you actually enjoy putting together Ikea furniture or standing in long lines, you may be cut out for doing tasks for others. Websites like TaskRabbit can connect you with people who need help with a variety of things. Moving, cleaning, delivery and being a handyman have the “highest earning potential,” according to the company. Read about how to get started on TaskRabbit.

    Total time: Medium

    setup: medium

    • You can set up your profile and register in a matter of hours, but can’t start accepting tasks until your profile is approved by TaskRabbit.
    • Allow a few weeks to get approved. The company processes registration on a rolling basis to avoid over saturation in a given market. How quickly your application is approved will depend on demand in your area.
    • Once approved, you need to pay a $20 fee and attend an orientation.

    payment: fast

    • You’re paid after the task is completed. Payment typically takes a few days to appear in your account.

    Requirements

    • You need to be at least 21 to start working with TaskRabbit.
    • Prospective Taskers must also pass a background check.

     

    Moving, cleaning, delivery and being a handyman have the ‘highest earning potential,’ according to TaskRabbit.

     

    17. SELL YOUR PHOTOS

    Turn your photographs into cash via sites like Fine Art America, which lets you upload your images to sell as prints, t-shirts, phone cases and more. Other marketplaces for photographers include SmugMug, 500px and PhotoShelter. Some sites require a subscription but may provide features ranging from cloud storage to password-protected galleries and a customized website.

    Total time: Medium

    setup: fast

    • You can set up a profile with sites like SmugMug, PhotoShelter or Fine Art America in a few hours, assuming you have a body of original work.

    payment: medium to slow

    • Payment varies widely depending on the site.
    • Fine Art America: Payment issued after 30-day return window expires. Sent on 15th of each month.
    • PhotoShelter: Payment issued at time of sale to your chosen payment method (PayPal, Stripe, etc.).
    • SmugMug: You can request payment be issued the following month if you have a balance of at least $5.

    Requirements

    • Requirements vary by site, but you need to have all necessary rights to the images you sell.

     

    18. BECOME A PRIVATE TUTOR

    Parlay your math, science, foreign-language or test-prep expertise into a lucrative side gig by becoming a private tutor. You can tutor people online or in-person. What you charge can depend on your experience, expertise and what’s in demand. To get started, see what types of tutors are needed on Craigslist, or create a profile on sites like Tutor.com or Care.com. You can also advertise your services at local schools and community centers.

    Total time: Medium

    startup time: fast

    • Startup time depends on demand in your area. It could take awhile before you get your first student.
    • If you haven’t tutored before, you’ll want to allow for time to prep so students feel like they’re getting the most out of their time with you.

    payment: Fast/Medium

    • How quickly you get paid depends on whether you tutor via a platform or in-person; either way, it likely won’t take long.

    Requirements

    • You’ll need deep knowledge in an area that people need help understanding, like mathematics, a foreign language or test prep.

     

    19. MAKE MONEY FROM YOUR BLOG

    If you’re a blogger who gets decent traffic, you could make money by joining an affiliate network. Affiliates (that’s you) get paid when someone clicks through from the website to the partner site and buys something there. Some bloggers make a lot of money this way. Read more about affiliate marketing and other ways bloggers can make money.

    Total time: Slow

    setup: slow

    • First, you need a blog, social media account or other online presence that draws a healthy number of visitors each month.
    • Then, you need to apply for and be approved by an affiliate marketing network like CJ Affiliates, ShareASale, FlexOffers or Amazon Associates.

    payment: slow

    • Payment schedules and thresholds vary by affiliate network, but expect to wait at least a month or two for your first paycheck.
    • Amazon Associates pays out earnings 60 days after the end of the calendar month in which they were earned. You must have a balance of at least $10 for earnings to be disbursed.
    • ShareASale disburses earnings on the 20th of each month, if you earned $50 or more the previous month.

    Requirements

  • A blog, social media account or other online presence that attracts a steady stream of visitors.
  •  

    20. SELL YOUR WARES ON ETSY

    Have a penchant for woodworking, jewelry-making, embroidery or pottery? Sell your goods on Etsy, the go-to site for artisans selling home goods, art and knickknacks. Last year, almost 30 million shoppers spent more than $2.8 billion on Etsy, according to the website. Learn more about how to start making money on Etsy.

    Total time: Slow

    setup: medium

    • Opening an Etsy shop is the easy part. It can be done in a few hours.
    • The prep work before you open up shop is more time-consuming. You need merchandise to sell, photos and descriptions to post, a name for your shop and a business plan to help you succeed. Once that’s done, you’ll still need to find customers. Depending on what you’re selling, that could take weeks, which is why you should expect the overall time for this gig to be slow.

    payment: medium

    • Once you sell an item, payment is deposited into your Etsy Payments account.
    • In your first 90 days as a seller: Funds are available three days after a sale.
    • After your first 90 days, funds are available for deposit the next business day.

    Requirements

    • You need to be at least 18 to sell on Etsy.
    • You need to have all necessary rights to the merchandise sold in your shop.

     

     

    21. GET ADVERTISING REVENUE FROM YOUTUBE OR YOUR BLOG

    Turn your cat videos into cash videos. If your YouTube videos or blog posts draw a big audience, you may be able to make money from advertising. With Google AdSense, businesses pay to advertise around your content. The service is free, but there are requirements you must meet. Read more about making money with YouTube and Google AdSense.

    Total time: Slow

    setup: fast

    • Signing up for Google AdSense is pretty easy, but it can take a few days to get approved.

    payment: slow

    • Allow at least two months for ad revenues to start trickling in.
    • You need to earn at least $100 before you’re eligible for a payout.
    • Once you hit the $100 threshold, earnings are disbursed on or around the 21st of the following month. It can take up to seven business days to receive a payment via direct deposit, and up to four weeks to receive payment via check.

    Requirements

  • Your own website that has been active for at least six months.
  • You need at least 10,000 channel views.
  • You must be at least 18.
  •  

    22. BECOME AN INSTAGRAM INFLUENCER

    Companies are using Instagram influencers — people with large, dedicated followings on the platform — to rep their products. You can get in on the action by applying for opportunities via a marketing platform like Instabrand or Famebit, or by contacting the brands you want to work with. Read more about what it takes to make money on Instagram.

    Total time: Slow

    setup: slow

    • Creating an Instagram account is easy, but building a following takes time. Allow a few months to build a large enough following to attract advertisers.
    • Once you have the numbers, you’ll need to find paid opportunities. You can do this via affiliate networks or by pitching brands you want to work with.

    payment: slow

    • The time to receive your payment will depend on the terms of your agreement, but affiliate networks typically pay out earnings the month after a campaign is completed.

    Requirements

    • An Instagram account with a dedicated, engaged following.
    • You’ll also need to meet the requirements of any affiliate network.

     

    23. MONETIZE YOUR TWITCH CHANNEL

    Gaming can be a lucrative side gig once you build a steady following on Twitch, the go-to site for gamers. Broadcasters can receive donations from viewers and even get a share of subscription and ad revenue if they reach Affiliate or Partner status. Learn more about the different ways to make money on Twitch.

    Total time: Slow

    setup: slow

    • You can launch a Twitch channel and start streaming in a day, but it will take weeks or even months to build a following.

    payment: slow

    • Donation revenue can be withdrawn rather quickly, depending on the payout method.
    • Subscription and ad revenue earned as a Twitch Partner or Affiliate is paid out 45 days from the end of the month, and you must have a balance of at least $100 to request a payout.

    Requirements

    • You need to hit certain viewership milestones to become a Twitch Affiliate or Partner and qualify for a share of game sales, ads and subscription revenue.

     

    24. SIGN UP TO BE A MYSTERY SHOPPER

    Businesses often want to know how they’re performing from a customer’s perspective. Sign up to be their eyes and ears. You can apply online via sites like IntelliShop, BestMark and Sinclair Customer Metrics. Just beware of scams and do thorough research before signing on.

    Total time: Slow

    setup: medium to slow

    • The application process is typically quick, but then it’s in the company’s hands. They can take days, or even months, to access your application, depending on demand.

    payment: medium

    • Payout timing varies by company. BestMark, for example, sends checks twice a month and payment is typically received three to four weeks after the mystery shop is complete.

    Requirements

    • Most mystery shopping services have an age requirement. You have to be at least 19 to shop for BestMark.
    • Depending on the service, you may need reliable transportation and internet access.

     

    25. FIND SEASONAL WORK

    Need a gig for a few months? Try something seasonal, like being a lifeguard, doing snow removal or working at a retailer during the holidays. Employers typically staff up a month or two ahead of their busy season, so plan ahead to get on their payroll. Check storefront windows, Craigslist and local classifieds for seasonal opportunities.

    Total time: Slow

    setup: medium to slow

    • Allow time for interviews, which can take a few weeks.
    • Companies start hiring for seasonal jobs a month or two in advance.

    payment: slow

    • Unlike other side gigs, seasonal jobs often operate on a traditional payroll system. That means it may take a month from your start date to earn your first full paycheck.
    • But you can expect a regular paycheck, with payroll taxes already withheld, which is something other side gigs don’t offer.

    Requirements

    • It depends on the specific job, which could include being a minimum age, having a driver’s license, etc.

     

    26. PUT YOUR DRONE TO WORK

    The market for drones is expanding. Companies hire out work like aerial inspection, photography and land mapping. So if you’re already a drone enthusiast, why not put your aircraft to work? You first need to register it with the Federal Aviation Administration and obtain a license from them for commercial use. Then, you can apply for gigs as a drone pilot. Learn how to start making money with drones.

    Total time: Slow

    setup: slow

    • More than a month, in order to study, schedule and pass a written test.
    • You also need to pass a background check and find clients.

    payment: fast to medium

    • Payment will depend on your client.

    Requirements

    • You’ll need a drone.
    • To do this legitimately, you’ll need a license that involves passing an aeronautical knowledge test.
    • A background check is also needed.

     

    Watch out for scams

    The internet is full of opportunities to make a quick buck online or from home, but many are questionable, if not outright scams. Be wary of any “opportunity” that asks for an upfront fee, wants you to pay for certification, or requests your Social Security number or any financial information, such as your credit card number.

     

    Monday, October 23, 2017

    Allstate vs. Geico, Progressive, State Farm: Which One Is Best?

    At NerdWallet, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations. Our opinions are our own.

    Allstate, Geico, Progressive and State Farm are the four largest car insurance companies in the United States. All have been in business for decades, enjoy top financial strength ratings and are well-known in the industry. Together, they held more than 50% of the total market share of personal auto insurance policies in 2018, according to the National Association of Insurance Commissioners.


    NerdWallet compared these insurers and found out who’s best in five categories.

    The rankings in each category are recapped at the bottom.

    Here’s a quick look at how the insurers compare, ordered by their rank in NerdWallet’s 2019 best car insurance companies analysis. You can also see each company’s top traits — the categories in which it ranked first or second in NerdWallet’s separate, in-depth comparison of the four largest insurers.

    CompanyTop traits 1. State FarmPrice, customer satisfaction, few complaints 2. GeicoPrice, tech, customer satisfaction 3. AllstateTech, coverage options, few complaints 4. Progressive
    Coverage options

    How the 4 biggest insurers stack up in 5 categories

    We looked at price, consumer complaints, customer satisfaction, coverage options and apps and tech to see how the nation’s four largest car insurance companies compare to one another.

    Best for price: State Farm

    For many, price is king and little else matters as much. If that describes you, State Farm is worth checking out. State Farm recently cut rates in most states — twice in some — making it the cheapest, on average, among the four companies in NerdWallet’s 2019 analysis.

    But that same analysis of car insurance prices across the country shows it’s still best to shop around. For example, you can use the tabs in the graphic below to see that for good drivers with poor credit, Geico was cheapest, on average.

    Of course, these are just averages across the entire country. Insurance pricing also varies by location and demographic factors.

    Fewest consumer complaints: State Farm

    Relative to its size, State Farm had the fewest complaints reported to state regulators in 2018 for private passenger auto insurance, according to the National Association of Insurance Commissioners.

    But it was not the only large insurer with good behavior: Allstate, Geico and Progressive also had fewer complaints than the median relative to their size, which is measured by premiums written.

    » MORE: NerdWallet’s State Farm review

    Best for customer satisfaction: Geico

    Geico’s customers report better overall satisfaction than the others, according to J.D. Power and Consumer Reports data. Satisfaction surveys include pricing, claims and customer service questions.

    State Farm was a close second place; in Consumer Reports surveys, it tied with Geico.

    » MORE: NerdWallet’s Geico insurance review

    Best for coverage options: Allstate

    Out of 11 optional coverage needs we looked for — such as gap insurance and accident forgiveness — Allstate offered nine. Progressive followed closely, offering eight.

    Here are some differences:

    • Progressive offers gap insurance instead of new-car replacement, while the opposite is true for Allstate. Because the coverage is similar, insurers commonly offer only one or the other, if at all. State Farm and Geico offer neither.
    • Neither Allstate nor Progressive offers mechanical breakdown insurance. Of the big four, only Geico does.

    » MORE: NerdWallet’s Allstate insurance review

    Best for tech and apps: Geico

    Consumers expect smooth online experiences and slick apps for many services, and insurance is no exception. Geico stands out for having:

    • An in-app vehicle-care feature to monitor your car’s maintenance.
    • Locators in the app for gas, parking and nearby attractions.
    • A voice-activated resource for Amazon’s Alexa, plus an in-app virtual assistant.

    The other three big insurers have some similar tech features, including virtual assistant capabilities for Google products rather than Alexa, but Geico has the most.

    Extra features

    If you’re looking for a particular feature from your insurance company, you may find it with some and not others. These are some of the options that set the four largest auto insurers apart from one another. Some cost extra; others are included at no extra charge when you buy a policy. Star ratings come from NerdWallet’s 2019 ranking of the best car insurance companies.

    CompanyCoverage optionsTech and apps Allstate

    3.5

    NerdWallet rating


    • Accident forgiveness.
    • New-car replacement.
    • Usage-based insurance.
    • Deductible rewards.
    • Reward for accident avoidance.
    • Sound system coverage.
    • QuickTrip app for route planning.
    • Drivewise safe driving rewards app.
    • Parking locator.
    • Gas price locator.
    • Alexa voice assistance.
    Geico

    3.5

    NerdWallet rating

    • Accident forgiveness.
    • Mechanical breakdown coverage.
    • Nearby attractions locator.
    • Parking locator.
    • Gas locator.
    • Lyft integration in app.
    • Car maintenance alerts.
    • In-app virtual assistant.
    • In-app chat.
    • Alexa voice assistance.
    Progressive

    3.5

    NerdWallet rating

    • Gap insurance.
    • Accident forgiveness.
    • Usage-based insurance.
    • Deductible rewards.
    • Custom parts coverage.
    • Google Home voice assistance.
    State Farm

    4.0

    NerdWallet rating

    • Usage-based insurance.
    • Drive Safe & Save app to earn discounts for good driving.
    • Steer Clear training app for young drivers.

    Options available from all four insurers

    These insurers have been in the game a while, so they know which features are no-brainers to offer. In terms of coverage and tech options, Allstate, Geico, Progressive and State Farm all have the following features in common.

    Common coverage options
    • Rideshare insurance.
    • Roadside assistance and towing.
    • Rental reimbursement, if your car is in the shop for a claim that's covered.
    Common tech capabilities
    • In-app bill pay.
    • View and download ID card from app.
    • Submit claims in app or online.
    • Track claims in app or online.
    • See policy info in app.
    • Upload damage photos in app.

    » MORE: NerdWallet’s

    Ready to compare companies head to head?

    NerdWallet’s Progressive insurance review

    After you narrow down your choices to two companies, a closer look at the differences can help you know which insurer is best for you. Take a look at these head-to-head comparisons of each of the four biggest car insurance companies.

    Geico vs. Progressive

    When you consider Geico vs. Progressive, think about whether you prefer low prices or need extra options. Geico has lower average rates in our analyses, while Progressive offers coverage that Geico doesn’t have, such as gap coverage and usage-based insurance, where an app tracks your driving behaviors in exchange for discounts or other rewards.

    Geico has more robust tech and app offerings than Progressive and scores higher for customer satisfaction. The two companies both get fewer than the median number of complaints to insurance regulators, relative to their size.

     GeicoProgressive Average annual car insurance rates Good driver, good credit$1,627
    $1,828 Good driver, poor credit$2,635$3,355 Driver with recent at-fault accident$2,834$3,361 Low-mileage driver$1,468$1,818 Minimum coverage$614$773 Customer complaints and satisfaction J.D. Power claims satisfactionAbout averageAbout average J.D. Power shopping satisfactionAbout averageAbout average Complaints as reported to NAICSlightly fewer than the medianSlightly fewer than the median

    Allstate vs. State Farm

    If you’re choosing between Allstate and State Farm, you’ve picked two companies that get fewer complaints to state regulators, relative to their size, than Geico or Progressive.

    To decide between Allstate and State Farm, consider what’s most important to you. State Farm has lower average prices in our analyses, although you should get quotes to be sure it’s cheaper for you. Allstate offers features that aren’t available from State Farm, such as accident forgiveness and new-car replacement insurance.

     AllstateState Farm Average annual car insurance rates Good driver, good credit$1,964$1,337 Good driver, poor credit$3,368$2,978 Driver with recent at-fault accident$3,006$1,637 Low-mileage driver$1,914$1,197 Minimum coverage$872$594 Customer complaints and satisfaction J.D. Power claims satisfactionAbout averageAbout average J.D. Power shopping satisfactionBelow averageAbout average Complaints as reported to NAICFewer than the medianFewer than the median

    Geico vs. State Farm

    Geico and State Farm are both cheaper, on average, than Allstate or Progressive, according to our analysis. While State Farm is cheapest in four of the five categories in our analysis, our numbers indicate Geico is cheaper for drivers with poor credit, on average. Both also rank high for customer satisfaction.

    Geico has the edge for tech options like virtual assistance and an app function to monitor your car’s maintenance. State Farm may be your choice if you want usage-based insurance, or discounts in exchange for letting the company monitor your driving behaviors, which Geico doesn’t offer.

     GeicoState Farm Average annual car insurance rates Good driver, good credit$1,627
    $1,337 Good driver, poor credit$2,635$2,978 Driver with recent at-fault accident$2,834$1,637 Low-mileage driver$1,468$1,197 Minimum coverage$614$594 Customer complaints and satisfaction J.D. Power claims satisfactionAbout averageAbout average J.D. Power shopping satisfactionAbout averageAbout average Complaints as reported to NAICSlightly fewer than the medianFewer than the median

    Allstate vs. Geico

    When you’re choosing between Allstate and Geico, you can expect plenty of tech options: Among the four largest insurers, Geico has the most features in its apps, and Allstate is a strong second. Both offer more tech and apps than Progressive or State Farm.

    If price is your main concern, Geico may be right for you. NerdWallet’s analysis of insurance rates found Geico is consistently cheaper than Allstate, on average. But if you’re looking for specific coverage options, Allstate may have what you need. Allstate offers several options that Geico doesn’t, including new-car replacement coverage and usage-based insurance.

     AllstateGeico Average annual car insurance rates Good driver, good credit$1,964$1,627 Good driver, poor credit$3,368$2,635 Driver with recent at-fault accident$3,006$2,834 Low-mileage driver$1,914$1,468 Minimum coverage$872$614 Customer complaints and satisfaction J.D. Power claims satisfactionAbout averageAbout average J.D. Power shopping satisfactionBelow averageAbout average Complaints as reported to NAICFewer than the medianSlightly fewer than the median

    Progressive vs. Allstate

    Among the top four insurers, Allstate and Progressive stand out most for their coverage options. At either of these companies you can get coverage for custom parts or stereos, and you can reduce your deductible by staying accident-free. Those options aren’t available from Geico or State Farm.

    Allstate scores higher than Progressive for customer satisfaction and has fewer complaints to state insurance regulators. Progressive sometimes beats Allstate on price, but not always. Since they’re often close on price, it’s worth getting quotes from both insurers to know which will be cheaper for you.

     AllstateProgressive Average annual car insurance rates Good driver, good credit$1,964$1,828 Good driver, poor credit$3,368$3,355 Driver with recent at-fault accident$3,006$3,361 Low-mileage driver$1,914$1,818 Minimum coverage$872$773 Customer complaints and satisfaction J.D. Power claims satisfactionAbout averageAbout average J.D. Power shopping satisfactionBelow averageAbout average Complaints as reported to NAICFewer than the medianSlightly fewer than the median

    Progressive vs. State Farm

    When you’re choosing between Progressive and State Farm, think about whether you want more coverage options, or whether price matters more.

    State Farm is cheaper, on average, than Progressive and has better customer satisfaction scores. Progressive, on the other hand, offers several coverage options that aren’t available from State Farm, including gap insurance, accident forgiveness and coverage for custom parts and equipment.

     ProgressiveState Farm Average annual car insurance rates Good driver, good credit$1,828$1,337 Good driver, poor credit$3,355$2,978 Driver with recent at-fault accident$3,361$1,637 Low-mileage driver$1,818$1,197 Minimum coverage$773$594 Customer complaints and satisfaction J.D. Power claims satisfactionAbout averageAbout average J.D. Power shopping satisfactionAbout averageAbout average Complaints as reported to NAICSlightly fewer than the medianFewer than the median

    Recap: How the insurers compare

    CategoryRankings Price1. State Farm
    2. Geico
    3. Allstate
    4. Progressive Complaints1. State Farm
    2. Allstate
    3. Geico
    4. Progressive Satisfaction1. Geico
    2. State Farm
    3. Allstate
    4. Progressive Coverage options1. Allstate
    2. Progressive
    3. Geico
    4. State Farm Apps and tech1. Geico
    2. Allstate
    3. State Farm
    4. Progressive

    » MORE: Compare car insurance

    Methodology

    Pricing: NerdWallet averaged rates for 40-year-old men and women for 20 ZIP codes in each state and Washington, D.C., from the largest insurers, up to 12 in each state. “Good drivers” had no moving violations on record and credit in the “good” tier as reported to each insurer. For the other two driver profiles, we changed the credit tier to “poor” or added one at-fault accident, keeping everything else the same. Sample drivers had the following coverage limits:
    • $100,000 bodily injury liability coverage per person.
    • $300,000 bodily injury liability coverage per crash.
    • $50,000 property damage liability coverage per crash.
    • $100,000 uninsured motorist bodily injury coverage per person.
    • $300,000 uninsured motorist bodily injury coverage per crash.
    • Collision coverage with $1,000 deductible.
    • Comprehensive coverage with $1,000 deductible.

    NerdWallet averaged rates for 40-year-old men and women for 20 ZIP codes in each state and Washington, D.C., from the largest insurers, up to 12 in each state. “Good drivers” had no moving violations on record and credit in the “good” tier as reported to each insurer. For the other two driver profiles, we changed the credit tier to “poor” or added one at-fault accident, keeping everything else the same. Sample drivers had the following coverage limits:

    In states where required, minimum additional coverages were added. We used a 2015 Toyota Camry in all cases. These are sample rates generated through Quadrant Information Services. Your own rates will be different.

    Customer satisfaction:

    • 2017 company satisfaction data from the Consumer Reports Winter Survey. Higher satisfactions ratings from Consumer Reports were given higher scores in our calculation. Paid registration is required to view Consumer Reports insurer satisfaction ratings.
    • 2018 J.D. Power ratings from three studies encompassing regional customer service satisfaction, auto claims satisfaction and shopping satisfaction. Ratings from each of the separate 2018 studies were averaged to form one overall score from J.D. Power. The higher the average, the more points the insurer scored in our calculation.

    Consumer complaints to state regulators in 2018, from the National Association of Insurance Commissioners.

    Coverage options: Information from insurer websites.

    Apps and tech: Information from insurer websites.

    Tuesday, September 26, 2017

    15 Ways to Lower Your Energy Bill

    At NerdWallet, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations. Our opinions are our own.

    Keeping the lights on isn’t cheap — never mind the air conditioning, furnace and hot water heater. In fact, the typical family spends an average of $2,200 per year on utilities, according to the Energy Department.

    Tweaking your usage can lower your bill by as much as 25%. Keep reading for ways to save on your electric bill.

    Heating and cooling

    Home heating and cooling are 10 of the biggest culprits behind hefty utility bills — and the best places to look for cost-cutting opportunities.

    1. Check seals on windows, doors and appliances: Make sure your fridge and freezer are well sealed to keep the cold air where it belongs. Same goes for your doors and windows. A bad seal allows energy to seep out, draining your wallet in the process.
    2. Fix leaky ductwork: Improve the efficiency of your heating and cooling systems by repairing leaky heating, ventilation and air conditioning ducts.
    3. Give your thermostat a nudge: Set your thermostat back 10 to 15 degrees when you’re asleep or away from home. Doing so for eight hours can lower your annual heating and cooling costs by around 10%. A programmable thermostat will do the work for you.
    4. Adjust your fridge and freezer temperature: Set your fridge to 38 degrees and your freezer to 5 degrees. This will keep your food fresh, but your fridge and freezer won’t need to work as hard to maintain the temperature.

    You could be saving up to $50 per month on your bills. See how much you could save.

    NerdWallet can help you lower your bills and find you more ways to save money.

    Your bill provider

    Your monthly bill amount

    Water

    Hot water is the second-largest expense in powering most homes, according to the Energy Department. Cutting back on your hot water usage — in the shower, laundry and dishwasher — can make a sizable dent in your overall energy bill..

    1. Take shorter showers: Trimming two minutes off your shower time can cut your water usage by 10 gallons.
    2. Replace your showerhead: An efficient showerhead can reduce your water usage by 2,700 gallons per year. Look for one with the WaterSense label, which is certified to meet efficiency criteria set by the Environmental Protection Agency.
    3. Don’t wash clothes in hot water: Cut your per-load energy usage in half by sticking to warm or cold water when you do laundry.
    4. Fix leaky faucets: That drip, drip, drip isn’t just annoying, it wastes gallons of water.
    5. Adjust the temperature on your water heater: The default temperature setting on water heaters is typically 140 degrees. Lowering it to 120 degrees can reduce your water heating costs by up to 10%. Leaving town for a few days? Turn your water heater to the lowest setting to conserve energy usage.
    6. Purchase energy efficient appliances: If you’re in the market for a new washer, dishwasher or water heater, buy an energy efficient model to yield long-term savings. A dishwasher with the Energy Star label is required to use 5.8 gallons of water or less per cycle, compared to the more than 10 gallons used by some older models.  Prioritize appliances that run most often, like the fridge, HVAC system, water heater, dehumidifier, television, washer and dryer.
    7. Ask about discounted rates: Some utility providers offer cheaper rates during certain times of the day, making laundry and other energy-intensive chores 5% to 25% less expensive during off-peak times.

    LOOKING FOR MORE WAYS TO SAVE?

    Get to know your money with NerdWallet. Easily track your spending and find ways to save.

    Join – it's free

    Power and lighting

    Keeping the lights and electronics on accounts for roughly 12% of a home’s energy usage.

    1. Swap out your light bulbs: Save $75 per year by swapping out the bulbs in your most used light fixtures with compact fluorescent or LED bulbs that bear the Energy Star label.
    2. Install dimmer switches: Dimmers let you set the brightness in a room to suit your needs, setting the mood and saving electricity..
    3. Use smart power strips: Some electronic gadgets never truly power off; instead, they sit in standby mode using a trickle of power that can add up over devices and time. These are usually — but not exclusively — items with a remote control, because the remote sensor needs power while waiting for your input. Plug these electronics into a smart power strip, which cuts off the current when the devices aren’t in use.
    4. Do an energy audit: Utility providers will often conduct a home energy audit, sometimes for free, and can identify additional ways to reduce your energy usage.

    Friday, August 25, 2017

    How to Get a Small Business Loan in 5 Steps

    At NerdWallet, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations. Our opinions are our own.

    Getting a small business loan is a major hurdle facing small businesses, mainly due to tight lending standards by banks. But obtaining outside financing is often necessary to start or grow a business or cover day-to-day expenses, including payroll and inventory.

    Although finding, applying for and getting approved for small business loans can be difficult, the more prepared you are, the better. Here’s how to get a business loan in five steps:

    Leq7Ghb

    Get Your Free Personal Credit Score Every Week from NerdWallet

    • Open more doors for financing your business.
    • Set your goals and track your progress.
    • Signing up won't affect your score.
    Get your credit score

    1. Ask yourself, why do I need this loan?

    Lenders will ask you this question, and your answer will likely fall into one of these four categories:

      • To start your business.
      • To manage day-to-day expenses.
      • To grow your business.
      • To have a safety cushion.

    2. Decide which type of loan is right for you.

    Your reasons for needing the loan will dictate the type of small-business loan you get.

    If you’re starting a business, it’s virtually impossible to get a loan in your company’s first year. Lenders require cash flow to support repayment of the loan, so startups are typically immediately disqualified from financing.

    Instead, you’ll have to rely on business credit cards, borrowing from friends and family, crowdfunding, personal loans or a microloan from a nonprofit lender. Here’s more information on startup business loans.

    For businesses with a year or more of history and revenue, you have more financing options, including SBA loans, term loans, business lines of credit and invoice factoring.

    Jump to our graphic with easy definitions of different types of financing.


    [back to the top]

    3. Determine the best type of small-business lender.

    You can get small-business loans from several places, including banks, nonprofit microlenders and online lenders. These lenders offer products including term loans, lines of credit and accounts receivable financing.

    You should approach small-business-loan shopping just as you would shopping for a car, says Suzanne Darden, a business consultant at the Alabama Small Business Development Center.

    Once you determine which type of lender and financing vehicle are right for you, compare two or three similar options based on annual percentage rate (total borrowing cost) and terms. Of the loans you qualify for, choose the one with the lowest APR, as long as you are able to handle the loan’s regular payments.

    Use NerdWallet’s business loan calculator to figure out your monthly payment.

    
    

    Use banks when:

    • You can provide collateral.
    • You have good credit.
    • You don’t need cash fast.

    Traditional bank options include term loans, lines of credit and commercial mortgages to buy properties or refinance. Through banks, the U.S. Small Business Administration provides general small-business loans with its 7(a) loan program, short-term microloans and disaster loans. SBA loans range from about $5,000 to $5 million, with an average loan size of $371,000.

    Small businesses have a tougher time getting approved due to factors including lower sales volume and cash reserves; add to that bad personal credit or no collateral (such as real estate to secure a loan), and many small-business owners come up empty-handed. Getting funded takes longer than other options — typically two to six months — but banks are usually your lowest-APR option.

    Use microlenders when:

    • You can’t get a traditional loan because your company is too small.

    Microlenders are nonprofits that typically lend short-term loans of less than $35,000. The APR on these loans is typically higher than that of bank loans. The application may require a detailed business plan and financial statements, as well as a description of what the loan will be used for, making it a lengthy process.

    Also, the size of the loans is, by definition, “micro.” But these loans may work well for smaller companies or startups that can’t qualify for traditional bank loans, due to a limited operating history, poor personal credit or a lack of collateral.

    Popular microlenders include Accion Kiva, the Opportunity Fund and the Business Center for New Americans.

    Use online lenders when:

    • You lack collateral.
    • You lack time in business.
    • You need funding quickly.

    Online lenders provide small-business loans and lines of credit from $500 to $500,000. The average APR on these loans ranges from 7% to 108%, depending on the lender, the type and size of the loan, the length of the repayment term, the borrower’s credit history and whether collateral is required. These lenders rarely can compete with traditional banks in terms of APR.

    But approval rates are higher and funding is faster than with traditional banks — as fast as 24 hours. See NerdWallet’s reviews of online business lenders.

    [back to the top]

    4. Find out if you qualify.

    WHAT’S YOUR CREDIT SCORE?

    Your place on the credit spectrum is one factor that will determine which loans you’ll qualify for. You can get your credit report for free from each of the three major credit bureaus — Equifax, Experian and TransUnion — once a year. You can get your credit score for free from several credit card issuers as well as personal finance websites, including NerdWallet.

    Banks, which as previously noted offer the least expensive small-business loans, want borrowers with credit scores at least above 680, Darden says. If your credit score falls below that threshold, consider online small-business loans for borrowers with bad credit or loans from a nonprofit microlender.

    HOW LONG HAVE YOU BEEN IN BUSINESS?

    In addition to your credit score, lenders will consider how long your business has been operating. You need to have been in business at least one year to qualify for most online small-business loans and at least two years to qualify for most bank loans.

    DO YOU MAKE ENOUGH MONEY?

    Many online lenders require a minimum annual revenue, which can range anywhere from $50,000 to $150,000. Know yours and find out the minimum a given lender requires before you apply.

    CAN YOU MAKE THE PAYMENTS?

    Look carefully at your business’s financials — especially cash flow — and evaluate how much you can reasonably afford to apply toward loan repayments each month. Some online lenders require daily or twice-monthly repayments, so factor that into the equation if that’s the case.

    To comfortably repay your loan each month, your total income should be at least 1.25 times your total expenses, including your new repayment amount, Darden says. For example, if your business’s income is $10,000 a month and you have $7,000 worth of expenses including rent, payroll, inventory, etc., the most you can comfortably afford is $1,000 a month in loan repayments. You can use Nerdwallet’s business loan calculator to determine your loan’s affordability.

    » More tips: How to qualify for a small-business loan.

    [back to the top]

    5. Now, gather your documents.

    Once you’ve compared your options, it’s time to apply for the loans that fit your financing needs and that you qualify for.

    You can apply for multiple small-business loans within a short time frame (about two weeks) without a negative effect on your personal credit score.

    Depending on the lender, you’ll need to submit a combination of the following documents with your application:

    • Business and personal tax returns
    • Business and personal bank statements
    • Business financial statements
    • Business legal documents (e.g., articles of incorporation, commercial lease, franchise agreement)


    [back to the top]

    Small-business financing, in simple terms

    SMB-BusinessLoans_Infographic_Final

    SMB_industry-guide-largerCTA1

    Tuesday, August 8, 2017

    How Much Should You Save for Retirement?

    At NerdWallet, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations. Our opinions are our own.

    ≔ Highlights

    • Your current expenses can help you estimate future spending

    • The earlier you start saving, the less you have to save overall

    • A retirement calculator will help you check your progress

    → What’s next

    Try our retirement calculator

    It’s the million-dollar question — literally: How much should I save for retirement?

    As a rule of thumb, most experts recommend an annual retirement savings goal of 10% to 15% of your pretax income. High earners generally want to hit the top of that range; low earners can typically hover closer to the bottom since Social Security will usually replace more of their income.

    But rules of thumb are just that, and how much you should save for retirement will depend a lot on your future, both the known and unknown parts, such as:

    • Your life expectancy
    • Your current spending and saving levels
    • Your lifestyle preferences in retirement

    Here are four steps to figure out how much you should save for retirement.

    1. Estimate future income needs

    Fair warning: This step involves the most work — but power through, because the others are a breeze. And if you keep even a loose budget, you already have a leg up. Projecting future income requirements begins by taking a look at current spending.

    To do that, enter your typical monthly expenses in the first column of a spreadsheet or jot them on a piece of paper. Then do a little thinking about whether each expense will stay the same, go down, go up or — best of all — disappear in retirement. (In a perfect world, we’re looking at you, mortgage.) In a second column, write your best guess of what each expense will be in retirement.

    Add those up, tack on other things you may not budget for now but want to spend money on later — travel, golf, mahjong supplies, ballroom dance lessons — and you will have a rough idea of your monthly spending needs in the future. Multiply by 12 to get the income you’ll need each year to meet those expenses in retirement. Compare that to your current income to arrive at what’s called a replacement ratio, or how much of your income you should aim to replace in retirement.

    Are you on the right track to retire?

    I amyears old, my household income isand I have a current savings of

    2. Consider common rules of thumb

    Less than half of workers have tried to calculate how much money they need for retirement, according to the Employee Benefit Research Institute’s retirement confidence survey. That means at least 50% of you are not going to do the exercise outlined in step 1. (If you did complete step 1 and got a ratio in the 70% to 90% range, congrats — you probably can skip to step 3.)

    If you’re among the 50% who won’t do the exercise, this is the point to fall back on income-replacement rules of thumb. They’re not as accurate because they’re a one-size-fits-all solution to a problem that comes in many shapes and sizes. But they’re far better than nothing.

    The one used most often is the 80% rule, which says you should aim to replace 80% of your preretirement income. This is a loose rule: Some people suggest skewing toward 70%; some think it’s better to aim for a more conservative 90%.

    If you’re saving 15% of your income now, you could easily live on 85% of your income in retirement — without adjusting expenses.

    To figure out where you land, consider what percentage of your income you’re saving for retirement. You’ll no longer have to do that once you cross the hypothetical finish line, which means if you’re saving 15% now, you could easily live on 85% of your income without adjusting expenses. Add in Social Security, cut payroll taxes — which eat 7.65% of your income while you’re working — and you can probably adjust that income down even further.

    » Learn more: Everything you need to know about how to save for retirement 

    The best way to use a rule of thumb like this is as a gut check against the more tailored approach of taking a deep dive into your expenses. Are you way off the standard advice or pretty close? But it can also be used as a starting point of its own, from where you can wiggle the numbers.

    3. Use a retirement calculator

    If your estimates are correct, a good retirement calculator will give you an assessment of where you stand in your savings progress, by combining those annual spending estimates with projections. Most thorough calculators bake in assumptions that are based on research: There will be defaults for inflation projections, life expectancy and market returns.

    » Run the numbers: Use NerdWallet’s retirement calculator to estimate your future needs

    To get the most accurate result, you should consider whether those assumptions are correct given your situation: Is your investment strategy poised to hit the default return used by a calculator, which will probably hover around 6% or 7%? If you’re skewing toward bonds, you’re going to want to adjust that down. Did your grandmother and your grandmother’s grandmother live to 110? You’ve got good — but expensive — genes. Take those extra years you may live into account in your projections.

    4. Revisit regularly

    Circumstances change and your retirement needs will change with them. Whether it’s a new job, a new baby or a new passion to travel the world once you hit 65, it makes sense to perform these retirement calculations fairly often. It’s always better to adjust as you go, rather than struggle to catch up down the road.

    If you feel overwhelmed, it’s easy to get help with balancing your financial goals. Choices range from low-fee online robo-advisors to financial advisors offering a variety of services. Learn more about how to choose a financial advisor that’s right for you.

    Arielle O’Shea is a writer at NerdWallet. Email: aoshea@nerdwallet.com. Twitter: @arioshea.

    Updated Aug. 9, 2017.  

    Monday, June 12, 2017

    How to Choose the Right Budget System

    At NerdWallet, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations. Our opinions are our own.

    Budgeting systems are designed to help you understand and evaluate your relationship with money. While all share a common goal, they often use distinct tactics to get you there.

    We’ve narrowed down some options to help you find one that resonates. Use these recommendations as a guide.

    1. Figure out where you are and what you value

    If you don’t know which route to take, do a financial self-assessment. Your present financial state and goals can give you a clue. Perhaps you’re in debt and need a system to help you decrease spending or you want to learn how to balance expenses with saving for a down payment on a house. Once you know where you stand and what you hope to accomplish, pick an option that matches those needs:

    What’s appealing about this system is that it gives you room to pay down debt, cover current costs and save for future expenses. It splits your income across three major categories: 50% goes to necessities, 30% to wants and 20% to savings and debt repayment. You can use it by itself or as a baseline for other flexible budgeting methods.

    
    

    » MORE: NerdWallet’s financial calculators

    Curb your spending: The envelope system

    If you need a rigid system to help you reduce frivolous spending or stay out of debt but don’t want to track every purchase, try this cash-based approach. You set a spending limit for each expense category, like groceries, fill envelopes with the allotted cash and use only that money for purchases. Once an envelope is empty, you can’t spend any more money on that particular category for the month.

    “Our brains are wired so that something tactile in front of you that you can smell and feel is more real than something on your phone or a number in your bank account,” says Daniel Chong, a certified financial planner in Irvine, California. “If you can’t seem to get a grasp on a certain spending category, then cash is king.”

    » MORE: Try this free budget worksheet

    Build up your savings: Pay yourself first

    Designed to align your spending and values, this “reverse” budget puts savings before immediate expenses. With this system, you decide how much to set aside from your monthly income for savings goals like retirement and an emergency fund, then use the rest for bills and other costs — so you don’t have to crunch every number.

    Make the most of every dollar: The zero-based budget

    This budget suits overspenders and meticulous planners alike. It makes monitoring your spending clear. You take your monthly income and use every dollar in a deliberate way — like saving a certain amount for a trip and paying for utilities and groceries — until there are zero dollars left. But if you don’t strictly use cash as with the envelope system, you’ll have to log each expense to make sure you’re on budget.

    2. Decide how much effort you’re willing to devote

    Consider how much time and maintenance a budgeting system involves before you get on board. Some have strict requirements, while others are more flexible. For example Excel spreadsheets and the zero-based budget demand frequent and detailed expense tracking. The pay yourself first system and apps that sync to your financial accounts require little upkeep.

    Consider how much time and maintenance a budgeting system involves before you get on board.

    How often should you budget? There’s no set rule, so go at your own pace. If you’re confident with your financial state, you can probably get away with reviewing your information once a month or a couple of times a year. Those who are still figuring out how to handle their money may want to check in weekly or after every purchase they make.

    3. Compare manual and digital options

    Determine whether you want to take a DIY approach to budgeting or seek technological assistance. Personal finance software can be convenient if the app or program lets you automate savings or access and update your information on the go. If it doesn’t automatically input and categorize your purchases or it’s hard to use, it might not add much value.

    For some, a hands-on approach, like with pen and paper, is best. Writing things down can help you retain information and feel connected to your budget. If you’re not comfortable linking your bank accounts to an electronic budgeting service, a physical method can save you worry, too.

    Need help starting your budget?

    NerdWallet breaks down your spending and shows you ways to save.

    Get started — it's free

    Still not sure?

    Some experts say there’s no need to follow a specific budgeting system as long as you’re aware of important details like your income, debts, goals and general spending. If you live within your means and know you’re on track to reach your goals, then tracking every penny is probably overkill, says Catherine Hawley, a certified financial planner in Monterey, California.

    “You don’t need to know that your electric bill was exactly $83.82 last month. You just need to know that you’re kind of within some general parameters, and I think that can actually be a relief to people,” she says.

    Tuesday, May 23, 2017

    5 Ways to Save Money and Nab Last-Minute Flight Deals

    At NerdWallet, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations. Our opinions are our own.

    One of the best ways to save money on a flight is to plan ahead. But sometimes, you don’t have the luxury of advance notice. Here’s how to find cheap last-minute flights, whether you’re traveling for a family emergency, a business trip on short notice or a spontaneous escape.

    1. Use a flight map

    Google Flights and Skyscanner have handy map tools that can help you find the cheapest flight.

    If your destination is set in stone, use the map to compare fares at nearby airports as well. It may be cheaper to fly into a location a few hours away and rent a car to reach your final stop.

    If your destination is open-ended — i.e., “anywhere with a beach” — use the map to pick the most economical locale. Select your dates and home airport(s), and then scan the map for an affordable flight. Google Flights will even show you potential destinations; all you need to do is pick your travel dates and interests, whether they be wildlife, food, beaches or nature.

    Need help starting your budget?

    NerdWallet breaks down your spending and shows you ways to save.

    Get started — it's free

    2. Call the airline

    A handful of airlines still offer bereavement fares, which could help take the financial sting out of last-minute travel for a funeral. To get the discount, you have to book the flight by phone and typically need to start travel within seven to 14 days. Be prepared to provide the name of the relative and the name and phone number of the relative’s doctor or funeral home.

    Alaska Airlines, for example, will knock 10% off its published fares for passengers traveling due to the death of an immediate family member, according to Halley Knigge, a spokeswoman for the carrier. This also applies to Virgin America, which was acquired by Alaska Air Group.

    Delta Air Lines and Air Canada also offer special rates for those traveling due to a death in the family.

    However, there may be cheaper deals elsewhere, so compare the bereavement rates with regular fares from other airlines using sites such as Kayak or Last Minute Travel.

    3. Fly during undesirable hours

    “Go on a red-eye or crack-of-dawn flight,” says Elizabeth Avery, the founder of the travel website Solo Trekker 4 U. These flights tend to have unfilled seats and often will be less expensive than midday flights.

    Go on a red-eye or crack-of-dawn flight.

    Elizabeth Avery,

    founder of the travel website Solo Trekker 4 U

    A red-eye trip from the Washington, D.C., area to San Diego, for example, was nearly $130 cheaper than other options for that route, according to a recent search for flights available within seven days.

    » MORE: How to save money

    4. Tap your rewards

    If you can’t find an affordable fare or skip the trip, consider redeeming credit card rewards or airline miles to subsidize your flight.

    Not sure whether to use rewards or cash?

    You can calculate the value of your rewards for a given flight using this formula: (ticket price – taxes and fees) ÷ rewards cost. Then multiply that number by 100 to find out your rewards value.

    Here’s an example: A flight that costs $250 (with $20 in taxes and fees) or 25,000 miles would equal 0.92 cents per mile. That’s below the average value of rewards and miles from a variety of programs, so consider using cash.

    But if the same flight was $500 (with $20 in taxes and fees) or 25,000 miles, it would work out to 1.92 cents per mile. That’s a good case for redeeming your miles, as it exceeds the average value of most rewards programs.

    » MORE: Our family vacation: 7 people, 3 nights and $1,500 in D.C. 

    5. Follow your favorite airlines

    Several airlines post last-minute deals to their Twitter accounts. Here’s a chart of major domestic airlines’ deal pages and Twitter handles:

    Saving money shouldn’t be hard. Become a NerdWallet member for free to find easy ways to grow your savings and trim bills.

    Updated May 23, 2017.

    Friday, May 12, 2017

    Net Worth Calculator: Find Your Net Worth

    At NerdWallet, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations. Our opinions are our own.

    Net worth is the total value of a person’s assets minus the total value of his or her liabilities. You won’t use it to make many day-to-day decisions, but it’s a useful snapshot of where you’re at financially. Use our net worth calculator to find yours.

    What is my net worth?

    
    

    See more financial calculators from NerdWallet.

    What is net worth?

    The formal definition of net worth is the combined value of your assets, or the things you own that have monetary value, minus the value of your liabilities — the accounts or loans that you’re paying off.

    Net worth is the combined value of your assets minus the value of your liabilities.

    Assets that count toward your net worth tend to be liquid assets. Some fixed assets can count, too, but it depends on whether you can or would sell them if you needed to. Liabilities are a bit easier to classify — any money you owe to another person or entity falls under this category.

    » MORE: How to create a budget

    What are assets and liabilities?

    If you’re not sure what assets and liabilities are, here are some guidelines:

    Assets: Assets include cash — such as in your checking, savings and retirement accounts — and items such as cars, property and investments that you could sell for cash. Count your home if you would be willing to sell it should the need arise or if you use it for a home equity line of credit.

    Assets include cash and items that you could sell for cash.

    Liabilities: Liabilities are debts. Revolving consumer debts — such as credit card balances — fall into this category, as do personal, auto, payday and title loan balances. If you’re using your home as an asset, its mortgage counts as a liability as well.

    Really get to know your money

    NerdWallet gives you a complete view of your money, bills, debts and spending — all in one place.

    Get started

    How your net worth compares

    The Federal Reserve releases its Survey of Consumer Finances every three years — the most recent report was issued in September 2017 with data from a survey fielded in 2016. Here’s how net worth stacks up by income, age, family size and education, and how it has changed since 1998 in dollar amounts.

    Net worth of U.S. families

    Income tier19982016Change 1998-2016 All families$105,800$97,300-8.03% Up to $25,300$8,600$6,700-22.09% $25,301 to $43,500$48,900$32,300-33.95% $43,501 to $69,500$78,800$81,6003.55% $69,501 to $111,400$165,700$168,3001.57% $111,401 to $177,100$278,100$393,60041.53% Over $177,101$667,400$1,640,100145.74%

    Source: Federal Reserve 2016 Survey of Consumer Finances

    Age tier19982016Change 1998-2016 All families$105,800$97,300-8.03% Less than 35$13,500$11,100-17.78% 35–44$93,600$59,800-36.11% 45–54$155,800$124,200-20.28% 55–64$188,700$187,300-0.74% 65–74$216,200$224,1003.65% 75 or more$185,300$264,80042.90%

    Source: Federal Reserve 2016 Survey of Consumer Finances

     19982016Change 1998-2016 All families$105,800$97,300-8.03% Single with child(ren)$23,800$22,400-5.88% Single, no child, age less than 55$22,800$13,800-39.47% Single, no child, age 55 or more$128,800$114,800-10.87% Couple with child(ren)$128,500$117,000-8.95% Couple, no child$219,200$226,3003.24%

    Source: Federal Reserve 2016 Survey of Consumer Finances

     19982016Change 1998-2016 All families$105,800$97,300-8.03% No high school diploma$31,100$22,800-26.69% High school diploma$79,800$67,100-15.91% Some college$113,100$66,100-41.56% College degree$251,000$292,10016.37%

    Source: Federal Reserve 2016 Survey of Consumer Finances

    Wednesday, March 29, 2017

    The Differences Between Term and Whole Life Insurance

    At NerdWallet, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations. Our opinions are our own.

    Buying life insurance now provides a financial safety net for your dependents later if you’re not around to take care of them. After you’re gone, your family can use the proceeds to cover funeral costs, mortgage payments, college tuition and other expenses.

    Take care of what matters most

    Your family is unique — your life insurance should be, too.

    Compare quotes

    There are two main types of life insurance:

    Term life insurance is the easiest to understand and has the lowest prices. You can get term life insurance quotes online.

    Permanent insurance is more complex and tends to cost more than term, but it offers additional benefits. Whole life is the most well-known and simplest form of permanent life insurance. Other kinds of permanent life insurance include universal, variable and variable universal.

    
    

    Want to know more? Let’s take a closer look at term life versus whole life insurance.

    In this article

    Term life insurance explained

    Whole life insurance explained

    Policy differences

    Term life versus whole life cost comparison

    Choosing between term life and whole life

    Term life insurance explained

    Term life insurance provides coverage for a certain time period. It’s often called “pure life insurance” because it’s designed only to protect your dependents in case you die prematurely. If you have a term policy and die within the term, your beneficiaries receive the payout. The policy has no other value.

    You choose the term when you buy the policy. Common terms are 10, 20 or 30 years. With most policies, the payout, called the death benefit, and the cost, or premium, stay the same throughout the term.

    When you shop for term life:

    • Choose a term that coincides with the years you’ll be paying the bills and want life insurance coverage in case you die early.

    • Buy an amount your family would need if you were no longer there to provide for them. The payout could replace your income and help your family pay for services you perform now, such as child care.

    Ideally, your family’s need for life insurance will end around the time the term expires: Your kids will be on their own, you’ll have paid off your house, and you’ll have plenty of money in savings to serve as a financial safety net.

    All of the best life insurance companies sell term life, so it’s easy to find rates.

    » COMPARE: NerdWallet’s life insurance comparison tool

    [Back to top]

    Whole life insurance explained

    Like all permanent life insurance policies, whole life provides lifelong coverage and includes an investment component known as the policy’s cash value. The cash value grows slowly, tax-deferred, meaning you won’t pay taxes on its gains while they’re accumulating.

    You can borrow money against the account or surrender the policy for the cash. But if you don’t repay policy loans with interest, you’ll reduce your death benefit, and if you surrender the policy, you’ll no longer have coverage.

    Like all permanent life insurance policies, whole life provides lifelong coverage and includes an investment component.

    Although it’s more complicated than term life insurance, whole life is the most straightforward form of permanent life insurance. Here’s why:

    • The premium remains the same for as long as you live

    • The death benefit is guaranteed

    • The cash value account grows at a guaranteed rate

    Some whole life policies can also earn annual dividends, a portion of the insurer’s financial surplus. You can take the dividends in cash, leave them on deposit to earn interest or use them to decrease your premium, repay policy loans or buy additional coverage. Dividends are not guaranteed.

    » MORE: How to find the best whole life insurance policy

    Policy differences


    Policy features Term life insurance Whole life insurance Choice of policy length ✓ Provides lifelong coverage ✓ Premium generally stays the same ✓ ✓ Low premium ✓ Life insurance payout amount is guaranteed ✓ ✓ Accumulates cash value ✓ Might be eligible for annual dividends ✓

    [Back to top]

    Cost comparison

    Term life insurance is cheap because it’s temporary and has no cash value; in most cases, your family won’t receive a payout because you’ll live to the end of the term. Whole life insurance premiums are much higher because the coverage lasts for a lifetime, and the policy has cash value, with a guaranteed rate of investment return on a portion of the money that you pay.

    Below are annual price comparisons between term life and whole life insurance. We used 20-year and 30-year term life policies because no apples-to-apples comparison is possible for the length of term life to whole life.

    Person coveredPolicy amountWhole life30-year term life20-year term life Annual premiums using an average of three lowest prices available in each category for healthy men and women. Source: Quotacy. Male, age 30$250,000$2,403$227$152 $500,000$4,747$373$232 $1 million$9,283$657$387 Female, 30$250,000$2,150$194$135 $500,000$4,241$314$201 $1 million$8,280$539$310 Male, age 40$250,000$3,572$343$212 $500,000$7,085$612$347 $1 million$13,902$1,132$600 Female, 40$250,000$3,037$284$182 $500,000$6,015$492$294 $1 million$11,787$896$509 Male, age 50$250,000$5,548$819$473 $500,000$11,036$1,535$856 $1 million$21,726$2,927$1,630 Female, 50$250,000$4,611$621$364 $500,000$9,164$1,140$655 $1 million$18,021$2,142$1,174

    [Back to top]

    Choosing between term and whole life insurance

    Term life is sufficient for most families who need life insurance, but whole life and other forms of permanent coverage can be useful in certain situations.

    Choose term life if you:Choose whole life if you:
  • Only need life insurance to replace your income over a certain period, such as the years you’re raising children or paying off your mortgage.


  • Want the most affordable coverage.


  • Think you might want permanent life insurance but can’t afford it. Most term life policies are convertible to permanent coverage. The deadline for conversion varies by policy.

  • Want to provide money for your heirs to pay estate taxes. In 2019, estates worth more than $11.4 million per individual or $22.8 million per couple are subject to federal estate taxes. State estate taxes vary. Here’s a map of state 

    estate and inheritance taxes

     from the Tax Foundation.


  • Have heirs who might be forced to sell off parts of your estate to pay the tax bill without an insurance payout.


  • Have a lifelong dependent, such as a child with special needs.

    Life insurance can fund a special needs trust

    to provide care for your child after you’re gone. Consult with an attorney and financial advisor if you want to set up a trust.


  • Want to spend your retirement savings and still leave an inheritance or money for final expenses, such as funeral costs.


  • Want to equalize inheritances. If you plan to leave a business or property to one child, whole life insurance could compensate your other children.