HARRISBURG (AP) — Pennsylvania is halting construction permits for natural gas pipelines operated by a company whose pipeline exploded last year, as the governor said Friday that Energy Transfer LP has failed to respect the state's laws and communities.The state Department of Environmental Protection said the Texas-based company is not fixing problems related to the explosion, and piled yet another penalty onto a company project in the state.State agencies already have [...]
Source Business - poconorecord.com http://bit.ly/2tdEMnx
الجمعة، 8 فبراير 2019
Best WordPress Backup Plugin – (Review Updated For Winter of 2019)
Imagine waking up one morning only to discover an error with your WordPress administrative dashboard.
You contact your web hosting company, and they inform you that the website crashed — the handiwork of a hacker.
In addition to missing out on website traffic and sales, you also lost your databases and website content.
Now what?
You start scrambling through your Google Drive and folders on your computer to salvage anything you can find. Then you have to manually rebuild your website from scratch.
This hypothetical example might be a bit on the extreme side, but it’s not completely implausible. Things happen. Your website could become the victim of user errors, vicious attacks, or malware.
In the event of an issue like this, regardless of the scale, you need to make sure you get your site back up and running as soon as possible. Failure to do so will crush your SEO ranking, and damage your relationship with customers and website visitors. On top of rebuilding your website, you’ll also need to run campaigns to improve your online reputation.
But there’s a way for you to avoid this catastrophic scenario in the first place — backup plugins.
While a backup plugin won’t prevent an attack or crash, it can restore all of your WordPress website content if you ever have any problems.
So what’s the best WordPress backup plugin?
There are tons of options to choose from. The last thing you want is to install a backup plugin as a fail-safe and have it cause more problems. That’s why I narrowed down the list to the five best WordPress backup plugins for you to consider. Use this guide as a reference to help you find the right one for your website.
1. VaultPress
For those of you who are looking for backups, migrations, and security features all in one plugin, VaultPress will likely be your best bet. It’s built by the same team that builds WordPress itself, Autommatic.
We use VaultPress on Quick Sprout and have since 2011.
VaultPress also has a calendar view option, making it easy to locate, view, and restore content from previous backups. But the dashboard of VaultPress is different from what you’re used to with other WordPress plugins. This minor navigation flaw doesn’t affect the performance and usage of the plugin itself.
I also like the built-in security features. The file scanning and spam defense will help you identify and eliminate malware, spammers, viruses, and other security vulnerabilities. The added security reduces the chances that you’ll actually have to use the restore functions due to an outside threat, but it’s nice to have the backups available just to be safe.
Pricing plans for VaultPress start at $39 per year, so it’s a cost-effective way to back up your WordPress website.
2. BackupBuddy
The BackupBuddy WordPress plugin has been around for nearly a decade. Other backup plugins on the market only backup your database, but BackupBuddy covers the entire WordPress installation.
- Website pages
- Posts
- Comments
- Widgets
- Users
- Database
- Core files
- Custom posts
- Categories
- Tags
- Images
- Videos
- Plugin files
- Settings
- Themes
All of these components will be backed up with this plugin. The files are backed up and stored off-site in a location that’s safe and secure. Each time a backup is completed, you can download a zip file to have another copy on your hard drive. You can also send backups to remote storage locations such as Dropbox, Google Drive, and BackupBuddy Stash.
If you ever have a problem and need to recover content, BackupBuddy makes it easy to quickly restore your entire WordPress site.
While this plugin can back up nearly every element of your WordPress site, that doesn’t mean you have to do so. For one reason or another, you may only want to backup certain components, like a database or specific files. You can completely customize the backups to fit your needs.
Another reason why BackupBuddy is a top choice is because you can schedule automatic backups, so you won’t have to remember to do this manually.
BackupBuddy is extremely helpful when it comes to user error as well. If you accidentally delete a post, you can restore the content in just a few clicks.
If you ever need to change domains or hosts for your WordPress site, the BackupBuddy plugin will help you do so with ease. The WordPress migration tool makes this plugin a popular choice for developers who create custom websites for clients on a temporary domain before moving the site over to a domain that’s live.
BackupBuddy also runs malware scans, which can potentially identify any problems before they happen.
All of these features make BackupBuddy one of the best WordPress backup plugins available.
3. UpdraftPlus
Over two million active websites have installed UpdraftPlus as a WordPress backup.
UpdraftPlus gets my vote of confidence because it’s so easy to use. Even if you don’t have much technical experience, the interface is very straightforward. The simplicity allows you to backup and restore content in just a click or two.
The free version of UpdraftPlus lets you run full backups, manual backups, and scheduled backups. You can also back up and restore your plugins, themes, and database with the free version.
Automatic backup options range anywhere from hourly to monthly. If you want to manually manage UpdraftPlus, you’ll clearly see the restore, clone, and migrate options in addition to the backup buttons. You can access all of your current backups directly from the dashboard. It’s easy for you to restore or delete older versions that you no longer need.
Like other backup plugins, UpdraftPlus gives you remote storage options to places such as Google Drive, Dropbox, OneDrive, and many more.
UpdraftPlus is fast. So it uses up fewer server resources. This is a great feature for those of you who are using shared web hosting services.
It’s comforting knowing that there are free WordPress backup plugins out there with so much functionality. With that said, you can upgrade to a premium plan that’s extremely affordable, starting at $42 per year to get these additional features and reports:
- Incremental backups
- Migrator
- Multisite/multi-network compatible
- Backs up non WP files and databases to multiple remote destinations
- OneDrive, BackBlaze, Azure, SFTP storage destinations
- Database encryption
- Advanced reporting
- Dedicated expert support
The incremental backup feature is one of the best reasons to upgrade this plugin. Instead of having to back up your entire site when you make a change, such as adding an image, this option only backs up those new files.
If you have any issues with this plugin, the customer support team is exceptional.
You can tell that UpdraftPlus is a reliable plugin just by the sheer number of active installs on other websites. The plugin wouldn’t be so popular if all of those people had problems.
4. Duplicator
With over one million active installations, Duplicator is another popular choice. As the name implies, the primary function of this plugin is to migrate, move, or clone a WordPress website between domains. This can be accomplished without any downtime, which can’t be said for other plugins out there. You can also use Duplicator to transfer your WordPress website between hosts.
This plugin lets you duplicate a live website to a staging area, or duplicate your staging area to a live site. Duplicator allows you to execute a full migration in WordPress without having to import and export SQL scripts.
This plugin is a great option, but I can’t say I’d recommend it to beginners. It’s definitely better for those of you who have some technical knowledge. Don’t get me wrong; you don’t need to be a coding expert, but you should have a basic understanding of how things work before you attempt to use the Duplicator plugin on your website.
It’s great for developers who are tired of manually configuring themes and sets of plugins each time they build a new site. You can just do this once and bundle it with Duplicator, then just use that as your template by migrating it over to different locations for each client.
Here’s how it works: All of your website content, plugins, themes, and database get bundled into a zip file, which is referred to as a “package” by Duplicator.
In addition to these features, you can also benefit from scheduled backups by upgrading to Duplicator Pro. The pricing is pretty affordable; it starts at $79 per year.
Backups can be stored locally, or in remote locations. You can also set up email notifications for updates on the status of your backups.
I’d say this WordPress plugin is more suitable for developers who have the need for migrations and things of that nature. So if that’s what you’re looking for, Duplicator can fulfill the requirements. It’s great for developers who are tired of manually configuring themes and sets of plugins each time they build a new site. You can do this once and bundle it with Duplicator, then just use that as your template by migrating it over to a different locations for each client.
But if you just want a basic backup plugin, you’ll probably be better off with one of the other choices on our list.
5. WP Time Capsule
WP Time Capsule seamlessly integrates with your cloud storage applications. This WordPress backup plugin is definitely one of the easiest options available. So unlike other options that we’ve seen, even a novice user can handle all of the features. Once the plugin is installed and set up, it’s pretty hands-off moving forward.
After you install this plugin, the first thing you’ll need to do is connect it with one of the cloud storage locations:
- Google Drive
- Dropbox
- Amazon S3
- Wasabi
Once that happens, the plugin will automatically start creating your first backup.
Next, you just simply have to set your backup schedule and the WP Time Capsule plugin will take care of the rest.
Another great feature of the WP Time Capsule is the calendar view option. This is extremely helpful if you want to restore content from a specific date.
As you can see, this is very straightforward. All you have to do is click on the date, and decide if you want to view or restore files from your selection.
Since WP Time Capsule backs up your site incrementally, you won’t have multiple copies of files. This means less disk space will be used. WP Time Capsule doesn’t create zip files either, so fewer server resources are used compared to other backup methods.
If you want a backup plugin that’s simple, straightforward, user-friendly, and easy to use, WP Time Capsule is a top choice to consider.
Conclusion
What’s the best WordPress backup plugin?
I narrowed down the top five options for you to consider. Each of these plugins is slightly different from the others, so what’s best for your site will depend on what you’re looking for.
For those of you who want to go with a popular choice for WordPress backups, then you should take a closer look at BackupBuddy and UpdraftPlus.
If you’re a developer, a bit more tech-savvy, and plan to use a backup plugin for cloning, migrations, and moving content between servers, you’ll want to consider Duplicator.
Maybe you just want a simple backup plugin that’s easy to use, has automatic backups, and stores content in your personal remote storage accounts. In this case, you’ll want to go with WP Time Capsule.
If you want added security functionality in addition to WordPress backups, VaultPress has what you’re looking for.
Source Quick Sprout http://bit.ly/2RMrsAk
Business Loans 101 | What You Need to Know
If you have a business, it’s probably just a question of time before you’ll be needing a business loan.
And if you do, you’ll be glad to know that you have several options.
Which one you’ll choose will depend on the type of business you have, the amount of money you need, the purpose of the loan proceeds, and the strength of your business and credit profiles.
Guide to Business Loans
Why You May Need a Business Loan
When you first launch a business, the most typical sources of financing and capital are personal savings, credit cards, home equity lines of credit, or even 401(k) loans. Alternatively, you may also obtain financing from family and friends.
They’re all reasonable sources, considering there’s usually no alternative. But once your business is up and running and has proven to be stable, you’ll almost certainly want to build credit specifically for the business.
There are several reasons why you will:
- To let the business function as a separate financial entity. As the business grows, you’ll increasingly want to separate your finances from those of the business. At a minimum, this will make tax preparation and financial statement compilations simpler and cleaner. It’ll also simplify your personal finances.
- To provide legal protection. If a loan is taken by the business, you may not be personally liable. This could become very important if the business fails, or needs bankruptcy protection.
- To grow your business. As your business grows, financial demands will increase. The ability of the business to borrow money will enable you to finance that growth.
- Keeping your cash flow available. Every business has ongoing expenses to cover. Having access to capital from business loans will keep your cash flow free to meet current expenses.
How to Apply for a Business Loan
Since there are different types of business loans available, criteria and requirements can vary widely. But as a general rule, you should be prepared to furnish some or most of the following:
- Application: completed loan application, which may be much more detailed than the kind you’ll fill out for a personal loan.
- Personal information: from you and other owners, including name, address, SSN, annual income, personal assets, and whether or not you’re homeowner.
- Credit report: Expect the lender will pull a personal credit report, especially if the business is new to borrowing.
- Basic info on the business: type of business, the age, legal structure (corporation, partnership, LLC, etc.), and annual revenues.
- Financial documentation: business and personal tax returns, recent financial statements, and several month’s business bank statements to verify cash flow.
- Loan amount requested, and its intended purpose.
- Business plan: Some lenders ask for a business plan which should spell out the future direction of the company.
- Payroll: If the business has employees, the lender may request payroll records (and also to confirm payroll tax payments are current).
- Other debts or significant liabilities of the business.
The lender may also have very specific requirements. This can include a minimum amount of time in business, or a minimum gross revenue requirement, such as $100,000 per year, or $10,000 per month.
As you’ll see in the next section however, there’s a loan source for just about every business type. That means if you don’t qualify for one loan type, there may be another available.
Business Loan Sources
There was a time when the primary source of business financing was banks. And while they still figure significantly in the mix, there are other sources.
Exactly which one you will choose will depend on the type and strength of your business, as well as the specific financing needs you have. Carefully evaluate each lending source against your business needs.
Commercial Banks
Commercial banks are a mixed bag. On one hand, they can offer a variety of business banking services, in addition to loans.
For example, many provide merchant accounts for credit and debit card transactions, support for international transactions, payroll services, and business checking accounts.
But the flipside is that commercial banks generally have the strictest business loan requirements. For example, they generally don’t like upstart businesses.
Here are a few key factors you should be aware of if you’re considering commercial banks as a lending option:
- Age: Most will require you to be in business for at least two or three years before they’ll even consider extending a loan.
- Cash flow: They’ll have fairly high minimum cash flow requirements
- Documentation: They’ll request a lot of documentation, more than some other lending sources.
- Options: You’ll have a choice of many commercial banks to work with.
- Versatility: Large banks, like J.P. Morgan Chase and Wells Fargo, usually have the widest variety of loans, which can include equipment financing, commercial mortgages, and loans specific to certain business types.
The downside with large banks is that they usually work with larger clients. For example, they may require minimum annual revenues of $1 million or $5 million. If you’re a small business, it may be best to work with a small, local bank.
They may not have the variety of services or loan types the big banks do, but they may be more willing to work with you. But just like the big banks, their requirements are likely to be tougher than other types of business lenders.
Peer-to-Peer (P2P) Lenders
P2P lending has come on strong in recent years, and they have a niche for just about every loan type. You can play P2P loans one of two ways.
The first is through a personal loan. Typical P2P lenders will allow you to borrow as much as between $35,000 and $40,000 for virtually any purpose as a personal loan.
Of course, this is not a business loan in the true sense. But if you absolutely need funding for your business, particularly if it’s new, this is a definite option. And best of all, P2P personal loans require no collateral.
But as the P2P space has grown, there are now lenders specifically offering business loans. Examples include:
Lending Club for Business Loans
Lending Club offers business loans, as well as personal loans. You can borrow up to $300,000 to purchase equipment or inventory, refinance existing debt, or cover current business expenses. Loan are fixed rate, with terms from 1 to 5 years, and interest rates ranging from 9.77% to 35.71% APR.
Lending Club requires you to be in business for a minimum of 12 months, and have at least $50,000 in annual sales. You must also own at least 20% of the business and have fair or better personal credit. They don’t permit recent bankruptcies or tax liens.
Loans under $100,000 require no collateral, and you don’t need to provide either a business plan or business projections. However, on the downside, they do require an origination fee of between 1.99% and 8.99% of the loan amount.
Exactly how much you’ll pay in both origination and interest will depend on your credit profile and the strength of your business.
Funding Circle
Funding Circle is a P2P lender dedicated to business loans. You can borrow anywhere from $25,000 to $500,000 and there is no minimum annual gross revenue requirement. They do however require a minimum of two years in business.
Loan terms are from six months to five years, with interest rates ranging from 4.99% to 27.79%. There is no prepayment penalty, and the origination fee ranges between 3.49% and 7.99%. And like Lending Club, proceeds can be borrowed for just about any purpose.
StreetShares
StreetShares is one of the more interesting business P2P lenders.
They specialize in loans for veteran owned businesses, though anyone can apply.
But in addition to standard term loans, they also offer business lines of credit and contract financing. Term loans can be from $2,000 to $250,000, with terms of three months to three years. To qualify, you must be in business at least one year and have at least $25,000 in annual revenue.
You will be required to provide a personal guarantee on the loan, and you need a minimum credit score of 600. Interest rates can range between 8% and 39.99%.
Business lines of credit can be for $5,000 up to $250,000, and with terms up to 36 months. You can draw funds when you need them, and pay interest only on the amount outstanding. It’s a good way to have financing available on short notice.
Merchant Cash Advances (MCAs)
This is an entirely different type of financing. In fact, it isn’t even a loan. The lender provides a cash advance in exchange for a percentage of your daily credit card and debit card receipts.
The advantage with MCAs is that they’re typically not dependent on your personal credit or specific collateral. Since they’re tied to card revenues running through your bank, that cash flow represents both the collateral and the repayment source.
The downside of MCAs is that they’re expensive. A lender might advance you $10,000, but require $12,000 in repayment in just a few months.
Here are the basics of MCAs:
- Loan amount: Anywhere from a few thousand dollars to a couple hundred thousand dollars. It depends entirely upon the cash flow being generated by your card sales.
- Cash flow: What you get depends entirely upon the cash flow being generated by your card sales it and debit card sales.
- Repayment: Can be based on either a flat monthly amount, or a percentage of your credit and debit card sales.
- Qualifying: To qualify, you’ll typically need to provide several months bank statements, proving your credit and debit card sales. Your loan amount will be based on that cash flow.
Put another way, MCA’s are easy to get, but they’re expensive. What’s more, the term is typically limited to no more than a few months.
They work best for businesses that can’t get financing from any other source, and need it for only a short-term. Think of them as a last-ditch effort. Examples of MCA lenders include CAN Capital, Credibly and National Funding.
Small Business Administration (SBA) Loans
SBA loans are a small business loan program provided by the US government, though it’s typically available through participating banks. In fact, banks actually make the loans, but they’re guaranteed by the SBA.
Because of that guarantee, they carry lower interest rates than other types of business loans, and are also available for upstart businesses.
You can borrow anywhere from $500 to as much as $5.5 million for your business. Money can be used to purchase assets (including real estate) or provide operating capital.
To qualify, you must be a for-profit business and have invested equity. You also must be unable to get funds from any other loan source. You may even be able to qualify if you have bad credit.
Loan terms range from five years to 25 years, with interest rates as low as 6.75%.
And though the terms and interest rates are lower than other business financing options, SBA loans are very complicated to apply for. They require a considerable amount of paperwork, as well as longer approval times. Loans may also require collateral.
If you’re interested in applying for an SBA loan, check with banks in your area that participate in the program.
What to Watch Out For with Business Loans
Borrowing always involves risks. That’s also true with business loans. Here are a few you need to be aware of:
Business loans can be complicated
Business loans aren’t standardized like personal loans. Since each business is different, each lender has its own terms.
For example, the loan may require the business to meet certain financial minimums, such as liquid assets and cash flow. And on large, long-term loans, they may require financial statements periodically.
Have any business loans carefully reviewed by an attorney who specializes in this field. It’ll take a trained eye to spot and clearly explain some of the “gotcha provisions” lurking in the details.
The lender may require a personal guarantee
One of your main goals should be to have the loan completely in the name of your business.
But in many cases, the lender may require some sort of personal guarantee. That will be true on your first few business loans, or if the lender has any concerns about the strength of your business.
If you default, your livelihood will be in jeopardy
If you default on a personal credit card, the lender can freeze your credit line and begin a collection process.
But if you default on a business loan, it’s possible the lender can put you out of business.
Not only will you have a defaulted loan, but you may also lose your income.
Don’t get carried away with business loans
The debt service on any loan will cut into your business cash flow. It may even impair your ability to pay other expenses, like rent, inventory, payroll or outside vendors. This is another excellent reason to keep business borrowing to an absolute minimum.Never borrow more than the business can comfortably afford to repay,
Final Thoughts on Business Loans
If your business has reached that point where financing is necessary, you might want to investigate each of these loan sources. For example, you might start with a commercial bank, since it offers an opportunity to develop a business relationship.
But if you can’t get a loan there, you can try the P2P route. And only if that doesn’t work, you may want to look into MCAs.
If your business is brand-new, bank loans and MCAs won’t be an option. You may want to start with a personal loan from a P2P lender. Or, if you’re willing to deal with the hassle, apply for an SBA loan.
If none of those sources work, you may not be ready for a business loan just yet. But once you’re in business for a couple of years, and you’ve established a stable cash flow, you should be able to find lenders willing to make you a business loan of some type.
The post Business Loans 101 | What You Need to Know appeared first on Good Financial Cents®.
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My father has lost more than £30,000 to fraudsters
Moneywise helps a reader whose father has been scammed
My father is in his 70s and has fallen victim to a push payment scam after criminals cleared his NatWest account of more than £30,000 plus a £3,000 overdraft. It has sent him into a downward spiral. NatWest is claiming it has no responsibility. However, I fail to see how setting up a new payee and transferring the entire balance to it has not triggered a fraud alert to verify the transaction. Specifically, I cannot see how there are not further controls and governance around its vulnerable customer base. It would seem that this scam is prolific within this age group. Have you any advice for us in this desperate situation?
RS/Basingstoke
I have been in touch with your father who has explained precisely what happened. I reckon many of us would have been tricked by this sophisticated fraud and I agree with you that the banks should do more to protect people against the crooks. The city watchdog, the FCA, also agrees and is introducing more stringent rules in April to make banks be more diligent and protect customers. That won’t help your father but the bank has agreed to take another look at the case, so I’m hopeful that they’ll use some common sense and play fair with him who, let’s remind ourselves, is a blameless victim.
In the meantime, the bank told me: “We sympathise with JS who has been the victim of a scam and appreciate that this has been a very distressing experience for him. We take our responsibilities to preventing scams very seriously and will always assist our customer in the recovery of their funds on a best endeavours basis.
“We are consistent in our education to customers to be vigilant when accepting calls claiming to be from their bank and we would never ask a customer to move money to another account to keep it safe from scams or fraud. We would remind our customers that they should never make a payment or divulge full security credentials at the request of someone over the phone. If a customer receives such a request, they should decline this and report it to their bank immediately on a phone number they can trust.”
That’s good advice that all readers should take note of. And if you have older relatives or friends, warn them about the fraud and to call anyone claiming to be from a bank using a trusted phone number from a different phone.
OUTCOME: Bank agrees to re-open fraud case
Simon Read is a a money writer and broadcaster. He was personal finance editor at The Independent and is an expert on BBC1’s Right On The Money
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Dear Penny: I Want to Help My Elderly Parents by Buying Their House
This sounds like a super generous move. After so many years of turning to your parents for care and advice, this is, for many, the dream: to be able to return the favor. But caring for your parents in this way can have a lot of complications.
I called in help from two experts: financial adviser Stephanie McCullough, and financial adviser Andy Wang, who also hosts the “Inspired Money” podcast.
First: Can you afford to take on another mortgage in addition to your own? It’s worth spending the money to discuss the long-term impact of this move with a tax professional and an attorney, Wang advised.
McCullough took her warning even further. “If I were your financial planner, I’d be advising you to look out for yourself and your husband,” she wrote in an email.
Consider your upcoming retirement. What will happen when the paychecks stop and you have to start living on your savings? Look carefully at your cash flow and imagine what would happen if you or your husband lost your job, or became disabled prior to your target retirement date, she recommended.
Two technical matters Wang said to check on before moving forward: whether the loan is assumable, meaning you could take over mortgage payments by assuming the loan; and whether the loan has a “due on sale” clause that would require the loan balance to be paid upon transfer of property. The former might provide an alternative option for you, while the latter could lead you to pause on your plan to buy.
If there’s a reason you want to own the house beyond your parents’ tenure there — maybe it’s been in your family for some time — you’ll need to plan for that future, McCullough said. Unless you plan to eventually live there yourself, keep in mind that managing a rental from far away can be stressful.
Wang brought up one more “what-if”: the possibility that your parents could outlive you. “You’d also need contingency plans in case something were to happen to you to ensure your parents may continue to reside there,” Wang said.
What’s your real motivation here: to keep the house in your family, or provide financial stability for your parents? If it’s the latter, it may be worth thinking about alternative options to support them while ensuring your own long-term financial security.
Have a tricky money question? Write to Dear Penny and you might see your question answered in an upcoming column.
Lisa Rowan is senior writer at The Penny Hoarder, and the voice behind Dear Penny.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
The Penny Hoarder Promise: We provide accurate, reliable information. Here’s why you can trust us and how we make money.
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Thoughts on the “Two Income Trap”
Jenny writes in:
Was wondering what your thoughts were on the two income trap. It’s the idea that a dual income household with kids is actually more likely to fall into bankruptcy and financial problems than a single income household. Doesn’t make sense to me but I got into an argument with a friend about it and wanted to hear your take.
The idea of the “two income trap” comes from a classic personal finance book (one that was revised and brought up to date a few years ago) entitled, smartly enough, The Two Income Trap. The book’s authors, Amelia Warren Tyagi and Elizabeth Warren, make the case that, in fact, dual income families where both adults are working are more likely to hit financial hardship than families where one adult is working and the other is handling domestic concerns.
They offer several points to back this up, each one backed up with quite a lot of data.
First, dual income households, especially those with kids, deal with a lot of extra expenses that typically more than eat up the second salary. Such families usually face child care costs, costs for larger living quarters, costs for more food, and so on, and furthermore are often so strapped for time that they end up taking on additional costs just to make their time budgets meet, such as picking up takeout on the way home from soccer practice so everyone can eat quickly before the next activity comes up.
Second, dual income households face more points of failure than a single income household, particularly when you add children. With two incomes, there are two different jobs and careers at risk for unexpected setbacks, nearly doubling the chance of a professional crisis. If you add kids, you add in additional risk of issues such as health crises and you significantly increase the logistical challenges and costs due to things such as child care. There are just so many points of potential risk and failure with a two income family, especially with children.
Finally, escalating education and housing costs hit dual income families incredibly hard. Again, this is amplified if you add children to the mix. College costs are orders of magnitude larger than they were a generation or two ago. Housing costs have far exceeded inflation, too, and those costs are amplified if you have children as they do require significant additional space.
The core point of the book is that if your family is in a position to make it on one income, you’re more likely to enjoy lasting financial stability simply because there are fewer points of failure. One parent can focus on making a strong income, while the other parent can focus on domestic issues and logistics. You don’t have to worry about child care. There’s no need to eat out all the time. There’s a lower risk of a job loss in the family. The big challenge, of course, is that the income level of the family will be much lower than it could be, but much of that additional income is eaten up by the additional costs brought on by the commitment of so much time to an additional job.
I agree with most of these points. They match up with the experiences that Sarah and I have had during our years as married partners and parents, each with our own career. There are a lot of responsibilities and risks when both parents work full time and also have children. It’s stressful and difficult at times. There is a lot of time and energy management involved. The costs can be stupendous – for example, Sarah and I are looking forward to as many as three kids being in college at the same time in a decade or so, and forecasting those costs is incredible. That often comes at the same time as the parents are paying off their own student loans. Housing costs are incredibly high compared to what they were even a generation ago, with housing costs definitely outpacing inflation in most areas where good jobs are available.
This book nails it – there are a lot of potential points for financial failure for a two income family today, especially one with children.
As well as the book lays out the problem, it moves on to prescribe social and political solutions that don’t practically apply to people who are currently facing or about to face this predicament. If you’re in this situation – or about to be in this situation – consider the following.
First, you need to make absolutely sure that it makes financial sense for both parents to work outside the home. There are many situations where it makes financial sense for one parent to function as a stay-at-home parent until the children are all in school. Child care costs, especially for multiple children, are tremendous, and when you add that to commuting costs, wardrobe costs, food costs (for all of the meals eaten outside of the home or ordered in because of time needs), higher taxes, and so on, you often end up in a situation where it makes financial sense for one parent to stay home for a few years.
This suggestion might not work if both parents are on tight career tracks, but that’s often not the case for both parents in the average American household. Most American families with children on the way or in the plans for the next few years should look seriously at one parent staying home with the kids. (We did this for a year with our third child and then my own writing career was flexible enough to allow me to handle some child care, too, while still working.)
Second, if you are committing to bills at a level that would make day-to-day life impossible if one of you is without a job, you need to seriously rethink that situation. Many, many families today get into a situation where the combination of their student loans and their mortgage and their consumer debt and their car loans create a situation where everything will fall apart if either partner loses their job. That is a terrible situation to be in.
Not only are you running a serious risk of financial collapse in the case of job loss, you’re ceding power to your employer. If your employer knows that you’re going to suffer financial apocalypse if you lose your job, they’re going to take advantage of that and put you in difficult professional positions. I was once in this situation, where I found myself doing pro-bono work on the weekends to salvage projects just because my job had a financial leash around my neck.
What can you do, then? Keep your expenses low. Don’t put yourself in a situation where you can’t pay the bills or put food on the table if someone loses a job. If you’re in a dual income household, you should be striving to spend significantly less than you earn and put aside money for the future. Get rid of your debts quickly. Build up a nice emergency fund. Save for retirement now while you have steady work. If you are in a dual income household and not spending significantly less than you earn (and applying the rest to extra debt payments, building an emergency fund, saving for retirement, or saving for other big financial goals), you’re making a major financial misstep.
A healthy emergency fund is particularly important. Having cash in hand if something goes wrong – and, remember, with a dual income household, you have more opportunities for things to go wrong than in a single income household – means that you can handle that problem without debt and that problem can’t cause a domino effect of problems. I usually encourage people to have a “bottomless” emergency fund; rather than saving up to some set amount and stopping, you should set up an automatic weekly transfer to a savings account somewhere and never turn it off unless employment changes. That way, it replenishes itself whenever you tap it and you can always be sure that there’s at least some money sitting there in case things go badly.
In summary, the “two income trap” is a real thing. Sarah and I have faced it ourselves. The best way out of it for individuals is financial responsibility, particularly in terms of keeping your spending in check. You need to be spending less than you’re earning by a significant margin, and that gap should be used to get rid of debts and save for long term goals. Yes, that might mean having a smaller house than you want or staying in an apartment longer than you might want or driving a car for longer than you might want, but that’s a minor drawback compared to the huge financial problems that can occur if something else goes wrong in your life.
If you have children, you should seriously investigate the financial value in having one parent stay at home with the children, particularly when they are preschool aged, because the cost of child care and other logistics can really add up.
Good luck!
The post Thoughts on the “Two Income Trap” appeared first on The Simple Dollar.
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Buy to let: Diminishing returns as a retirement income
Pensions versus investing in property is an age-old dilemma for those facing retirement, but as the government clamps downs on landlords’ tax perks, buy to let may finally be losing its lustre
With rent providing a steadily rising income and house price rises boosting the capital growth of a buy-to-let investment, it’s easy to see why many people think property is a win-win investment.
Rents in the UK rose by an average of 1.5% in November 2018, according to HomeLet. The average rent agreed in December 2018 was £921 a month, against £907 in the same month in 2017.
It’s not just rents that have ticked up, the value of properties have risen on average. Despite a downturn in the housing market, average house prices in the UK increased 5.3% in the year to October 2018 to £231,095, according to the latest UK House Price Index available at the time of writing. This compares to an average of £127,833 in 2000, according to Nationwide.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, says property feels “familiar and easy to understand” and investors are likely to have seen the value of their own home rise.
The introduction of pension freedoms has given retirees the option of using their pension to purchase a buy to let. However, Mrs Coles says it is “one of the least efficient ways to generate an income from your pension pot” and the key issue is tax.
“If you are spending money from your pension, there’s a good chance you will pay tax to withdraw the cash, then stamp duty when you buy the property, plus tax on the rent, and finally capital gains tax when you eventually come to sell, or possibly inheritance tax when you pass it on,” she explains.
And stamp duty is an even greater burden than it was for property investors, since the government introduced a 3% surcharge for people buying second homes in April 2016.
To illustrate her point, Mrs Coles uses the example of a £500,000 pension being used to purchase a buy to let and assumes the only other income the retiree has is the state pension.
“There will initially be a £158,284 tax charge for withdrawing the cash from the pension, leaving £341,716,” she says. Although 25% of a pension can be taken tax-free, the rest of the money is subject to income tax at the standard, 20%, 40%, and 45% rates (depending on your overall income for the year).
“Assuming you spend £315,000, you’d have stamp duty of £15,200 – including the new 3% surcharge on buy-to-let property – and the rest of the pot is used to cover the costs of purchase and making the property habitable.”
Landlords can no longer offset all their mortgage interest against their rental income
Mrs Coles then factors a rental yield of 4% on the £315,000 property, accounting for costs, void periods where there is no tenant, and fees, the annual income equals £12,600. Add the state pension on top and the retiree would receive an annual income of £21,146.20 in 2018/19.
However, the tax due – 20% basic rate of income tax – on the income equals £1,859.24, leaving the investor with £19,286.96.
Mrs Coles contrasts this with leaving the £500,000 pension pot invested and withdrawing an income of 4% each year – £20,000 – of which 25% would be tax-free.
“Assuming you were entitled to the state pension in full on top, you would pay £2,339.24 a year (in basic-rate income tax after the 25% tax-free cash is taken), leaving you with an annual income of £26,206.96,” she says.
“Over the long term, although the value of pension investments can fall as well as rise, it’s a reasonable assumption that they could generate average growth of 4% a year, so you are withdrawing only the growth, and by the end of your retirement, you’re still left with £500,000 to pass on to relatives free of tax.”
Of course, property investors would also hope to see the value of that asset rise too, but on death it could be subject to inheritance tax, unlike a pension. It may also be considered higher risk because you have all your eggs in one basket – should house prices fall in your area, you could lose a huge chunk of capital.
Gary Smith, financial planner at Tilney, says withdrawing pension money to invest in buy to let should only be done by “those who have experience in this area and who have more than one property in their portfolio”.
“Buy-to-let properties still remain popular as investors look at the relatively high rental yields that can be achieved when compared to interest rates and annuity rates,” he says.
“But while rental yields are high on lower-value properties, they tend to reduce as the value of the property increases.”
He adds that the gross yield is not what an investor will receive in their pocket either, as they have to pay income tax and management fees of up to 20% if they are not managing the property themselves.
However, the situation could be very different for those investors who have savings outside their pension.
You also need to be able to cope with running a rental property
“Using assets other than the pension should prove more efficient,” says Mr Smith. This is because the IHT position would be neutral and you would not just be limited to the 25% tax-free cash from your pension to avoid tax being incurred. It is also more flexible as you would be able to access these assets before you are 55.
Yet there may not be many retirees who have enough non-pension savings to buy a property outright – you may need to take out a mortgage and this may not be as easy – or as affordable – an option as you expect.
Getting an owner-occupier mortgage can be difficult for borrowers who are aged 60-plus and the same problems may occur with buy to let, with some banks and building societies only lending to a maximum age of 70 or 75.
There is also the issue of changes to mortgage interest relief (MIR), which is boosting the tax bill of those landlords who have to raise finance with a mortgage.
MIR allows the interest paid on a mortgage to be deducted from rental income, reducing the tax bill landlords have to pay. But since April 2017, landlords have seen valuable MIR dwindle. Previously, landlords could offset their mortgage interest and other property costs against their rental income to lower their tax bill. In 2017/18, landlords can claim 75% of MIR, falling to 50% in 2018/19, to 25% in 2019/20, and zero thereafter.
The move will hit higher-rate taxpayers hardest as they will have to pay 40% income tax on more of their rental income and could push some basic-rate taxpayers into the 40% income tax bracket.
It is not surprising then that brokers are saying this additional cost is forcing some landlords to sell up (see box below).
As a result, Chetan Mistry, wealth management consultant at Mattioli Woods, says buy to let in retirement is not a decision to be taken lightly. You need to understand its impact on tax and costs first to make sure you will get both the income and the capital growth that you will need.
“It is relatively easy and people understand it,” he says. “They are not exposed to investments they do not understand and you can do it yourself without too much technical knowledge.
“From that point of view, buying a buy to let is quite an obvious thing to do, but you do need to understand the pros and cons, the tax implications and have all the information before making a decision.”
As with all retirement income options, your wider finances will also be important. Buy to let will be far less risky an investment if you have other income streams. For instance, you need to make sure you’ll still have an income if you can’t find a tenant, or worse still, get stuck with a tenant who refuses to pay.
What charges do landlords face?
Becoming a landlord may seem like an easy way to make money, but budding property moguls shouldn’t overlook the myriad costs, particularly stamp duty, which, following government changes, is hitting property investors.
One-off
- Stamp duty. Since April 2016, purchases of second properties – whether for buy-to-let or holiday homes – attract an additional 3% stamp duty charge. On properties up to £125,000, stamp duty of 3% is now due, as opposed to zero tax previously; between £125,001 and £250,000 tax increases to 5% from 2%; for property between £250,001 and £925,000 it rises from 5% to 8%; and between £925,001 and £1.5 million it increases from 10% to 13%. This means the tax payable on a £200,000 flat will now be £7,500, up from £1,500
- Capital gains tax at either 18% or 28% depending on whether you are a basic- or higher-rate taxpayer
- Surveyor’s fees
- Solicitor’s fees
- Mortgage application fees if you need to borrow
Ongoing
The costs of buy to let don’t just stop at buying your property. In order to make money, you will have to keep shelling out.
- Mortgage payments unless you buy a property outright
- Void periods when you have no tenants mean you have to cover the cost of the property yourself
- Letting fees equivalent to a percentage of rent if a company manages the tenants and property
- Maintenance and repair of the property
- Ground rents and service charges if you purchase a leasehold property
- Accountant fees to fill in a tax return if you are not confident enough to do it
- Income tax on your earnings, keeping in mind that the government has slashed the generosity of mortgage interest relief (MIR) that can be offset against the tax bill
What is the outlook for existing landlords?
As the government cuts reliefs to try to discourage new landlords entering the market, existing buy-to-let owners may find the rental income they receive is no longer such an attractive prospect.
Darren Lloyd Thomas, founder of advice firm Thomas and Thomas Financial Services, says he has seen clients giving up their buy-to-let properties in retirement due to a combination of declining returns and difficulties managing them.
“We are seeing clients shedding these properties,” he says. “The big issue for them is they cannot offset as much interest on the mortgage against their profit... and their properties are not going up in value the way they were in the 2000s.”
He adds that some older clients also feel unable to cope with the management of the property, meaning their rental income is eroded further by letting fees and it “turns into something not worth doing where the yields are not that attractive anymore”.
Gary Smith, financial planner at Tilney, agrees that age plays a part in the management as employing an agent would dampen the rental yield, but he adds: “There is no reason to sell just because they have retired”.
“If you are experienced investors and have good tenants, then retaining property in retirement could be a good method of generating some of your expenditure requirements in retirement,” he adds.
Michelle McGagh is a freelance personal finance journalist who writes for titles including The Guardian, Citywire, AOL and Money Observer, as well as appearing on TV as a financial commentator
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Did You Flush Charmin Wipes or Use Dial Soap? These Class-Action Settlements are For You
Even though it may take years before a settlement is reached in a class-action lawsuit, the time frame to claim your share can fly by.
But if you purchased a Lenovo laptop that’s slow because of tracking software, a blouse at a Ross Dress for Less that had a misleading price-comparison label or Dial foaming liquid hand soap that promised to rid you of 99.9% of germs, you could be eligible for anywhere from a few cents to several hundred dollars.
Check out this month’s choice selection of class-action settlements that have deadlines approaching to see which ones align with purchases you’ve made.
Ross Stores “Compare at” Pricing
Did you purchase items at a Ross Dress for Less believing you were saving more money than you actually did?
Ross has agreed to a $4.85 million class-action settlement to resolve allegations that the store used deceptive pricing methods to convince customers they were getting a great deal.
Class members are customers who bought one or more items with a Ross price tag indicating a “compare at” price from any Ross store since June 20, 2011, and have not received a refund or credit for these purchases.
Plaintiffs allege the “compare at” price tags are not a true price comparison but are instead simply a reference price. They claim that this is not properly conveyed to the shopper.
Ross admits no wrongdoing by settling the lawsuit, but with the settlement, both parties avoid the risks and costs associated with continued litigation.
Class members may receive store credit in the form of a merchandise certificate or cash equal to 75% of the value of the merchandise certificate. No proof of purchase is required.
Click here now to file a claim, because this offer goes out of fashion (no more claims will be accepted after) May 31, 2019.
Lenovo Laptops Adware
If you bought a Lenovo laptop between Sept. 1, 2014, and Feb. 28, 2015, you could be eligible for a portion of an $8.3 million class-action settlement.
Plaintiffs allege several models of the non-Think-branded Lenovo laptops experienced inhibited performance capabilities because the company added a tracking software called VisualDiscovery by Superfish.
The software allegedly allowed Lenovo to monitor user activity to tailor advertisements to users.
Owners of the laptops also claim the monitoring of their online habits was an invasion of privacy.
Under the settlement, eligible class members include consumers who purchased certain non-Think-branded Lenovo laptops between Sept. 1, 2014, and Feb. 28, 2015. Models included in the settlement are:
- G Series: G410, G510, G710, G40-70, G50-70, G40-30, G50-30 and G50-45.
- U Series: U430P, U430Touch and U530Touch.
- Y Series: Y40-70 and Y50-70.
- Z Series: Z50-75, Z40-70 and Z50-70.
- Flex Series: Flex2 14D, Flex2 15D, Flex2 14, Flex2 15, Flex2 15(BTM) and Flex 10.
- MIIX Series: MIIX2-10 and MIIX2-11.
- YOGA Series: YOGA2Pro-13, YOGA2-13, YOGA2-11BTM and YOGA2-11HSW.
A bar-code sticker should be located on the bottom of the laptop to indicate the machine’s model.
Class members may receive anywhere from $40 to $750 if they can provide proof of loss, such as receipts for expenses related to technical assistance or credit monitoring, with their claim form.
For more details on how to file a claim by the March 25, 2019, deadline, click here — even if you’re on your Lenovo laptop and the company might know you click.
Flagship Credit Acceptance Robocalls
Auto loan company Flagship Credit Acceptance LLC has agreed to a $4 million class-action settlement over alleged violations of the Telephone Consumer Protection Act (TCPA).
Class members include anyone who received a call from Flagship through a TCN, LiveVox or Aspect dialing system or artificial/prerecorded voice between May 5, 2013, and Sept. 18, 2018.
The TCPA prohibits telemarketing practices that make use of robocalls through autodialers or prerecorded messages.
Flagship admits no wrongdoing but has settled the lawsuit to avoid the costs of future litigation and the uncertainty of a trial verdict.
The TCPA allows eligible consumers to collect between $500 and $1,500 per violation, but the potential reward through the settlement will be determined by the number of valid claims submitted by the Feb. 25, 2019, deadline.
For more information and to submit your claim, click here.
NIBCO Plumbing Fixtures
If you have NIBCO PEX plumbing in your home that has leaked and caused water damage, you could be eligible for a portion of a $43.5 million class-action settlement.
Class members include consumers who have owned or occupied a building that contained NIBCO plumbing fixtures since Jan. 1, 2005, and either have costs from water damage or costs from repairing water damage that have not been reimbursed.
In addition, compensation will be available for six years after the start of the settlement to compensate homeowners for future property damage if it occurs.
Plaintiffs allege NIBCO PEX plumbing tubes, brass fittings and stainless steel clamps include a manufacturing defect that can result in potentially damaging water leaks.
Class members who file a claim with qualifying supporting documents may be able to receive between 25% and 70% of their monetary losses due to water damage.
Time, if not water, is running out. Click here for more information and to make a claim by the May 31, 2019, estimated deadline.
Charmin Freshmates Flushable Wipes
If you bought Charmin Freshmates flushable wipes, or any other Charmin pre-moistened wipes that said “flushable” on the label, between April 6, 2011, and Nov. 26, 2018, you might be eligible for a portion of a class-action settlement.
The Charmin Freshmates wipes plaintiffs allege that consumers incur financial injuries of at least a few hundred dollars when they have to hire a plumber to unclog sewer lines impaired by the collection of wipes.
Plaintiffs allege the wipes were falsely advertised as flushable and safe for septic systems, when in fact the wipes purportedly clog and damage sewage systems.
Class members who submit proof of purchase may receive a payout of up to $30. Those without proof of purchase may claim up to seven purchases.
Class members will receive 60 cents per package. Class members include consumers throughout the U.S., except for those in the state of New York.
If plumbing problems from Charmin flushable wipes have been a drain on your wallet, click here for more information on how to file a claim before the Feb. 28, 2019, deadline.
Dial Complete Foaming Liquid Hand Soap
Several lawsuits against Dial Complete foaming liquid hand soap have been resolved with a $7.4 million class-action settlement.
The lawsuits alleged marketing, advertising and sales violations by Dial, based on its use of active ingredient triclosan.
The false advertising claims include statements such as: “Kills 99.99% of germs encountered in household settings,” “no. 1 doctor recommended antibacterial liquid hand wash” and “kills more germs than any other liquid hand soap.”
Dial Corporation denies any wrongdoing, but both parties agreed to the class-action settlement to avoid the costs and risks of ongoing litigation.
Class members include consumers who purchased Dial Complete foaming liquid hand soap between Jan. 1, 2001, and Jan. 2, 2019
They will receive 27 cents per package for up to 30 packages without proof of purchase for a total of $8.10. Those who provide proof of purchase may receive 27 cents per package as settlement compensation for all packages purchased.
If, after subtracting all expenses from the settlement fund, the funds remaining are insufficient to pay all timely valid approved claims, then payments will be reduced proportionately on a pro-rata basis.
Don’t miss your chance to clean up with this settlement offer. Click here for details on submitting a claim by April 12, 2019.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
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الخميس، 7 فبراير 2019
Travel Insurance: Security for the Journey
As experienced travelers already know, trips can take unexpected turns, leaving you to regroup or return home.
If you have a big trip coming up, or if you’re considering travel as a regular way of life, take a minute to consider how you’d pay for detours you didn’t put on the itinerary, such as: an evacuation because of a natural disaster, theft or another crime, an unexpected need for a rental car, changing connections at the last minute, or paying for medical care in a different country.
This list could go on and on because perils have unlimited potential in the wider world.
Many serious travelers wouldn’t want it any other way: After all, unexpected twists help make traveling worthwhile.
When those unexpected changes add to your trip’s cost or require you to return home immediately, travel insurance could help smooth things out and help reimburse you.
Travel Insurance Guide
Do I Really Need Travel Insurance?
A lot of new travelers have the Best Buy approach to travel insurance. You know, when you’re in line at Best Buy, paying $40 for computer speakers, and the clerk asks if you’d like equipment protection for another $8?
I won’t go into the merits of equipment protection here, but my non-scientific observations show many people don’t think very highly of it.
They dismiss the offer with the wave of a hand or a grunt as they swipe their credit card and go on their way. A lot of us do the same thing when buying a new smartphone.
Protecting Much More than a Purchase
But not everyone who buys equipment protection or flight insurance regrets the decision or never successfully files a claim.
I’m not saying you should buy equipment protection on every purchase you make. But there’s nothing wrong with the desire to protect your purchase.
With travel insurance, you’re protecting much more than the tickets or hotel rooms you’ve purchased.
You’re also protecting:
- the time you’ve spent planning your trip.
- the vacation days from work you may be using to travel.
- your own sense of safety in an unfamiliar place.
- your ability to get back home as scheduled.
- your potential recovery from a health issue you experience while traveling.
- your personal belongings after a theft or baggage mishap.
What Travel Insurance Covers
You can find travel insurance in a lot of different forms. With so much potential for an unplanned problem, though, no single travel insurance policy can cover everything.
This is not-so-good news if you’re into quick decision making, but it is good news if you like to know exactly what you’re buying and how it can help you.
The key will be to look for a policy to covers what concerns you most, and your destination may influence your choices. Here are a few of the coverages you can expect to find:
Medical Coverage
There are countries in the world where hospitals will treat your injuries at no charge. Great Britain and many of the nations along the North Sea in northwestern Europe have nationalized medicine that will cover even visitors.
In other destinations, however, you may worry how you’d pay for a medical emergency, especially since many domestic insurance plans, including Medicare, wouldn’t help.
Trip Cancellation
While most domestic airlines and even Amtrak will let you buy optional trip cancellation insurance, some active travelers want more protection — including international protection — in case they need to change plans.
Insurance plans tend to spell out specific reasons which qualify for trip cancellation protection, so read your policy carefully if you plan to depend on this coverage.
You can find similar coverage for missed connections.
Theft Protection
Many of us, in unfamiliar surroundings, can become more likely targets for thieves. Whether we lose cash, luggage, medicine, or electronics these kinds of crimes can change our travel plans.
While insurance can’t scare off pickpockets and thieves, it can help you recover from these losses more quickly.
Evacuation Insurance
Some of the most frightening experiences for travelers happen when political instability, terrorism, or a natural disaster such as a tsunami or earthquake require an evacuation.
You may need to leave your vacation locale too quickly to worry with refunds or rescheduling. You also may need to spend a lot of money to reach safety.
Travel insurance can compensate you for these losses. It can also help if a sudden medical condition requires you to leave your destination immediately.
Baggage Insurance
Lost bags — or luggage that somehow lands on a different continent — can also steal valuable vacation time. You may have to pay to replace everything you packed.
Travel insurance can reimburse these losses.
Emergency Services
AAA won’t send help if you’re in Uzbekistan or Cameroon. Travel insurance companies have similar programs for international travelers, though. They can help smooth things out when you encounter a problem.
If your plane makes an unscheduled landing in a place where no one speaks your language, for example, your travel insurance company’s emergency helpline can intercede.
What Travel Insurance Won’t Cover
Travel insurance can be a valuable tool for frequent travelers, but it won’t cover every scenario you encounter. As you shop for travel insurance, and as you make travel plans, you should know when your policy would and wouldn’t help.
Take trip cancellation coverage, for example. A lot of people buy travel coverage precisely for this purpose. Yet most policies will specify situations that qualify for coverage and exclude all others.
Typical covered trip cancellations result from:
- Illness or injury: either to you or to people you planned to visit. Expect to provide documentation before being reimbursed.
- Evacuation: natural disaster, act of terror, or other kind of evacuation at your destination.
- Loss of job: or significant changes in employment.
- Loss of passport or visa: due to theft or natural disaster.
- Military redeployment
- Jury duty or school year extension
Your insurance company could include additional covered cancellations. But in most cases they will not cover cancellations not named on their list.
So if you buy tickets for the wrong month by mistake or simply change your mind about the trip, your policy probably won’t reimburse you.
Some companies do offer policies that cover all trip cancellations, but this coverage usually costs significantly more.
Other Times Travel Insurance May Not Help
Trip cancellation isn’t the only place in your policy where you should pay close attention. Other sticky areas include:
- Pre-Existing Conditions: If you know you could have a medical emergency that could derail your plans, your travel insurance policy may deny your claim. Travelers who have pre-existing conditions should pay close attention to this while shopping for coverage.
- Medical Tourism: Travel insurance companies tend to deny claims when you’re traveling specifically for medical reasons.
- High-risk Activities: Traveling to a country for a skiing competition, a bungee jumping opportunity, or a similar dangerous activity may exclude you from medical coverage.
- Breaking the Law: Getting hurt or imprisoned after breaking the law in another state or country will not impress your travel insurance company, and they’ll likely deny your request for reimbursement.
- Being Under the Influence: Losses you incur while intoxicated likely won’t be covered.
These are generalities, of course. You can find exceptions by shopping around. Just be sure you’re paying attention to these details while comparing policies.
How Travel Insurance Works
With a few exceptions, such as the emergency assistance programs we discussed above, travel insurance will have a relatively passive role in your actual trip.
Instead, you’ll need to be prepared to pay your own way out of trouble if you have to evacuate, change flights, or make alternative arrangements for getting home.
Once you’ve resolved the situation and returned home, you can file a claim for reimbursement for the expenses you incurred because of the covered peril.
Be prepared to document the situation with receipts, diagnoses, or itineraries as directed by your insurance company.
Companies with emergency assistance programs can still help you find a rental car, a new plane ticket, or a safer area, but don’t expect them to pay for all those arrangements while you’re still abroad.
When You Don’t Need Travel Insurance
Travel insurance makes most sense when you’re leaving the country. International travel plans tend to be more expensive and usually more time consuming to arrange.
And you’re also more likely to encounter dangerous situations requiring an evacuation on another continent — and you’re less likely to have friends or family members who can help.
Traveling domestically doesn’t usually include the same risks. You could probably skip travel coverage if:
- It’s a short, domestic trip: Problems still arise when you’re driving a few hours from home or taking a domestic flight, but in most cases you can probably handle these without travel insurance, especially if you’re a member of AAA or you took advantage of your airline’s trip cancellation coverage. If you travel long distances regularly, though, you may benefit from a travelers insurance policy.
- Your fees are already refundable: Many hotel accommodations and flights already include refundable ticket options either built into the price or for an extra fee. When you already have this feature, you wouldn’t need travel insurance for its cancellation coverage.
- You’re flying ‘Discount Air’: When you’re lucky enough to get one of those $89 flights from your regional hub to Orlando or the Big Apple, your travel insurance premiums may rival the cost of simply buying another ticket if necessary.
- You can afford to re-purchase: If the cost of your trip wouldn’t affect you financially if you had to pay for it twice, you’re self-insured — that is, you can afford the risk you’re incurring.
- You already have other insurance: Your existing health or auto coverage may already offer the coverage you need for a domestic vacation, especially if you need rental car coverage or roadside assistance.
Best Candidates for Travel Insurance
Travelers in the following situations can often benefit most from buying travel insurance:
- Studying abroad: College students or professors on a semester-long trip will have more opportunities to experience an unexpected expense. As a result you’d have more opportunities for travel insurance to help.
- Lifestyle travelers: More people, including younger people, are making travel a way of life. Rather than investing in more possessions, people want to invest in experiences. Travel, of course, offers abundant opportunities to experience life. Travel insurance can give you a safety net. In this case, consider an annual instead of a trip-specific policy.
- International business people: Global economic connections have more business people making regular trips out of the country with China and India as common destinations. Make sure your employer has a plan in place if things don’t go as planned.
How to Compare and Buy Travel Insurance
Travel insurance is widely available online, through a local insurance agent, through a travel agent, or even from the online service you use to buy airline tickets or rent hotel accommodations.
Give Your Decision Some Thought
A lot of people don’t think about travel insurance until they’re busy planning a trip and get the sales pitch. Typically, this is not a good time to consider travel insurance.
Instead, give the decision your full attention by looking at the big picture and asking yourself questions like these:
- Could the trip you’re planning put you in danger of losing a lot of money?
- Will travel be a regular part of your life for the next year or longer?
Match a Policy to Your Needs
Answering yes to one or both of these questions makes you a pretty good candidate for travel insurance coverage. You should start your search by determining which part of your trip makes you most concerned:
- Trip Cancellation? If you’re worried about losing money because you have to cancel a trip, take a close look at trip cancellation coverage to make sure it meets your needs. Remember, coverage won’t help unless your reason for canceling the trip is listed in the policy, or unless you buy a policy that covers all reasons for canceling.
- Medical Expenses? If you’re worried about medical expenses on your trip, pay close attention to a policy’s rules about pre-existing conditions.
- An Evacuation? If you’re worried about having to leave your destination because of political unrest or a natural disaster, check out a policy’s evacuation coverage details.
- Emergency Help? If the idea of being stranded overseas with no way to communicate has you concerned, look into emergency assistance programs insurance companies can offer.
Not all policies address all these concerns equally. Matching your coverage to your concerns can help make your investment in travel insurance more likely to pay off.
As always, an independent insurance agent can help you compare policies to make this happen.
Travel insurance is a financial decision. Like all financial decisions, the choice comes down to whether the product will be worth the cost for you.
For some, the premium will be worthwhile because travel coverage offers a tangible sense of security. Others prefer a more calculated dollars-and-cents approach as they decide whether travel coverage would pay off.
Either way you look at it, make sure your coverage will actually fit your needs.
The post Travel Insurance: Security for the Journey appeared first on Good Financial Cents®.
Source Good Financial Cents® http://bit.ly/2GsEEs0
Feeling Overwhelmed By Big Financial Goals
Big financial goals can feel completely overwhelming.
You want to buy a house but the mortgage will be more than you make in three years.
You want to save for retirement but you need… a million dollars for the kind of retirement you want?
You want to pay off your student loan debts, but you’re making $28,000 a year and you owe well into the six figures.
It can feel completely overwhelming. I should know – I’ve been there. When I first sat down and seriously looked at our debt situation, which consisted of two car loans, a big pile of student loans, big credit card bills, and some other debts to boot, I felt just completely overwhelmed by it at first. The total debt was more than our combined annual income at the time and it just seemed like an impossible hole to climb out of.
Within just a couple of years, we were debt free.
When our second child was on the way, we decided to move out of our apartment and into a family home. When we started looking at houses, we were struck by the fact that even a modest starter home had a mortgage that added up to a multiple of our family income. It was really intimidating.
Four years later, we completely owned a 2,000 square foot family home with no mortgage.
Sometimes, I look ahead at our goal of financial independence and feel similarly, though less intense. We’re already a good way along the path to that goal, but we’ve got a long way to go.
In all of those situations, I feel overwhelmed by the huge number we’re aiming for and the amount of time it’s going to take to get there. I sometimes feel like we’ll never get there. I feel like even if we do get there, our life will have changed so much that it will have felt like a waste of time. I sometimes feel like I’m giving up things I don’t want to give up in the here and now just to chase that big goal.
Those aren’t positive feelings. Those are feelings that will lead me to give up on the goal before I ever get there. Feeling overwhelmed, feeling hopeless… it’s not a road to success.
I was only able to achieve big financial goals by overcoming that feeling of being overwhelmed by the size of the goal. I used a number of strategies to do this, strategies I continue to use to this day. Let’s look at them.
Strategy #1 – Focus on the Molehill, Not the Mountain
The most profound tool I’ve discovered in figuring out how not to be overwhelmed by giant goals is to simply focus on today rather than the big goal. Look at the mountain, not the molehill.
This is essentially the core of a strategy I wrote about earlier this week (Strategies for Translating Long Term Financial Goals Into Immediate Actions and Habits). The crux of that article is that most big financial goals can best be achieved by breaking them down into what actions you can take today to succeed and focusing solely on those. If you make those actions and new habits simple and just keep at it, day after day, you’ll get there eventually.
The problem is that, on its own, that strategy isn’t quite enough to undo the sense that the goal is overwhelming. You might have a specific goal for today, but it doesn’t take that goal out of the looming shadow of the giant goal.
For me, what really made the difference is truly believing and understanding that if I succeed in this little goal today, then the big goal is an inevitable conclusion. It will happen. It’s not a matter of if. If I achieve this little thing today, then the big result I want will occur.
All I need to do is chain together these little activities, and the key link in that chain is today, because without today, that chain doesn’t work.
If I want to achieve my giant financial goal, all I have to do today is one little frugal activity and stick to my monthly budget, particularly in the non-essential spending areas. That’s it. That’s all I have to do. I can prove it to myself by simply doing the math – if I do that today (and each subsequent day), I will achieve my big financial goal.
For me, I found that if I reiterate that sentiment to myself every day, my focus gradually shifts to today’s molehill rather than tomorrow’s mountain. What really matters is overcoming that little thing I need to do today, not the seemingly insurmountable mountain, because I know that if I nail that thing I need to do today, the giant mountain will take care of itself.
Focus on the molehill and the mountain will take care of itself.
Strategy #2 – Automate As Much As You Can
As I noted in the previous strategy, one big part of being able to grind down a large goal is to make sure that you’re taking daily steps that move you toward that goal. However, one of the big challenges of taking daily steps is that they require action every single day, and that can be hard due to the unpredictability of everyday life.
There are days when I don’t exercise much because other things come up, regardless of how important I view long term health goals to be. There are days when I end up spending more on food than I expected to because an old friend showed up. You can certainly strive to make a step forward each day, but sometimes things don’t go as you want them to.
One effective way around that is to automate your positive financial moves. One of the big advantages of making financial progress is that moving money from one account to another can be fully automated. You don’t actually have to take action to move money into your emergency fund or into your retirement account. You don’t actually have to take action to make an extra payment on your credit card. You can just automate all of it.
What automation does is that it sets a financial goal on a path of inevitability. If you’re automatically contributing $500 a month to your Roth IRA and another $1,000 a month to your 401(k), your early retirement plans are inevitable. You can simply sit back and just hold onto your job and you will get there. If you’re automatically making an extra student loan payment of $300 a month, paying off that debt early is inevitable. You just have to sit back and take care of the rest of your life.
For me, the part that really clicks about the automated approach is that it turns day-to-day activities and choices into an accelerant rather than a requirement, and that actually motivates me quite a lot. I know that Sarah and I will reach financial independence at roughly the time our youngest son graduates… but we could get there even sooner if I do a little more. Knowing that takes the pressure off of a daily choice – I don’t have to do X to make this happen – but instead it turns that daily choice into an accelerant – if I do X, my progress toward that inevitable goal speeds up.
Knowing that a goal is on autopilot, that I’m going to achieve it just by twiddling my thumbs, is incredibly empowering. It makes a goal feel much more real and much more within reach, even if the automatic process will take years. Then, knowing that my daily choices can actually speed it up makes those daily choices more interesting. It’s like making the choice to go on a long car trip – once you’ve made that choice, it doesn’t feel overwhelming any more and you find that stepping on the gas a little brings you to that destination a little faster.
Strategy #3 – Aim to Establish Good Habits and Normal Routines
A big goal requires sustained effort over a long time. You can’t just wake up one day and decide, “Today, I’m going to pay off all of my debts that I’ve accumulated over the last ten years.” Even if you were somehow able to do this, without some sort of lasting change, you’d eventually find yourself right back where you started with a bunch of accumulated debts.
That’s why any major financial goal – or goal of any kind – rests on the back of new habits and normal routines that are meant to be lifelong changes. Automation is a powerful tool, but it still means you have to learn how to live by spending less. Individual actions are powerful, too, but if they’re not sustained, you’re going to roll right back to the situation you were in to begin with.
If you’re currently spending everything you make and want to adopt a financial goal that’s going to require $300 a month, you have to figure out changes in your way of living that free up $300 a month going forward.
Some of that money can be found through singular actions – the so-called “big wins.” Cutting your cable. Renegotiating your cell phone bill. Shopping around for cheaper insurance. Moving to a smaller residence. Those big actions can certainly cut your regular bills substantially and can make up a large portion of what you need to achieve your goal.
At the same time, there is also much value to be found in the small steps, the minor tweaks to one’s routine that result in small savings but are repeated so often that they become routine and those little savings add up over time to big ones. Making cold brew coffee instead of stopping at Starbucks. Keeping your thermostat a little lower. Walking or taking mass transit to work. Buying store brands at the store. Using the library instead of the bookstore. Eating at home more often instead of eating out.
Those little tweaks seem like a challenge at first, but when you take them on each day, they eventually turn into habit and become your new normal. Making cold brew coffee at home might seem like a new task on your shoulders every day, but give it a few months and it seems completely normal and you wonder why you ever went to a coffee shop every day. Taking the train to work might seem like a huge alteration of the routine, but do it for a few months and it seems like the sensible and normal way to do things. Buying store brands might feel weird the first time you load your cart up with them, but in a few months, they’ll seem like the normal way to shop.
The trick is to keep at those new routines until they feel completely normal or until you discover something fundamentally wrong with them and discard them. My strategy is to do a lot of “thirty day challenges.” Each month, I’m usually doing three or four such challenges, where the goal is to either (a) give a thirty day trial run to something new and then evaluate whether it works for me at the end of the month or (b) keep up with a previous thirty day challenge until it feels completely routine and thus a normal part of my life (and so a thirty day challenge is redundant).
I find that reviewing those routines and habits I’m working on each day is really, really useful. I just spend a couple of minutes before bed looking at a list of routines and habits I’m working on and asking myself seriously if I did my best today to move forward on that thing. I give myself a score of 1 to 10 based on effort. I find that I really want to give myself a lot of 10s each day and that becomes a subtle motivation to put forth more effort.
Strategy #4 – Surround Yourself with Support
Often, people think of this idea as meaning that you have a bunch of friends who are actively cheering you on as you try to achieve something. That can be useful at times when you need to exert a ton of effort in a short time, like running a marathon. However, such support really can’t be sustained over the long time period that a major goal requires.
Rather, I find that friendships and relationships that offer indirect support for the direction you’re heading in are what you truly need to succeed over the long term.
If your friends seem to need to spend money every time you see them, they’re not going to provide long term support for your financial goals. If your friends seem to struggle to keep their bills paid and aren’t saving for retirement and aren’t making progress toward their big goals in life, they’re not going to provide long term support for your financial goals. Rather, they’re going to distract you from those goals. They’re going to tempt you to spend money for things – social occasions, companionship – that you shouldn’t have to spend money for. They’re going to nudge you to spend money on more and more stuff just to keep up with them.
Rather, seek out friends who do the opposite and accentuate those friendships. Look for friends that don’t struggle to keep their bills paid and seem to be making progress toward financial goals. Look for friends that don’t encourage you to spend money, that don’t engage in “retail therapy,” that don’t suggest expensive things to do together constantly, that do suggest free or super-cheap things to do together. Look for friends that talk about long term goals rather than the latest thing they just bought. Look for them throughout your life and intentionally cultivate those relationships.
What you’ll find is that the more people you have in your life that are dedicated to that kind of financial progress and the fewer people you have in your life that are focused on living paycheck to paycheck and not working on financial goals, the easier it’ll be to make financial progress. You’re surrounded by people who aren’t encouraging you to spend and are likely to talk about their own progress, offer suggestions to you, and subtly encourage your own financial goals.
It’s the same with any area of life where you have big goals. If you want to lose weight, spending time with fit people who pay attention to their diet will help. If you want to succeed in your studies, surrounding yourself with people who study and focus on academic performance will help.
Strategy #5 – Love What You Do Each Day
People often view a life of financial restraint as being miserable on a day to day basis. Their first visions of that life almost always centering around cutting out their absolute favorite things that they spend money on, whatever that might be. If people like eating out, they imagine sitting at home and eating dry cereal or something. If people like indulging in a particular hobby, they imagine themselves watching paint dry instead of “having fun.” We tend to make the most awful substitutions imaginable when thinking about altering our daily routine.
The thing is, most financially sensible changes are largely transparent. You’re not really going to notice things like buying store brands or switching to a more economical insurance provider or cutting out a subscription that you rarely use. Most of the moves that you make are going to have little impact on your daily life.
What about the ones that do have an impact? For me, the rule is simple: if a change actually makes me feel worse about my daily life (after considering the financial benefit), I undo that change. I don’t stick with it. Rather, I’m constantly trying new things that are free and/or low cost while also retaining the things that I enjoy doing. What I wind up with is a life with more things that I want to do that have very little cost than I have time for. In that scenario, why would I choose things that cost a lot of money when I already have things I’m itching to do that don’t cost money?
My suggestion is this: if you’re afraid of a boring life, don’t just cut the things you enjoy doing from your life. Rather, decide to spend just some of the time you would otherwise devote to expensive things on free or low cost things you’ve never tried before but been a little curious about. Don’t worry about what other people think. Try hiking. Try geocaching. Try cooking at home. Try making sauerkraut. Try running for political office. Try checking out an interesting book from the library. Just try lots of things, everything that sounds remotely interesting, and then stick with the things that are enjoyable.
If you take that approach, walking away from a costly thing you enjoy feels less like a punishment and more like a benefit. Furthermore, you begin to naturally put your life on track for financial success because you’re spending less along the way.
Your life should never consist of boredom and misery. If living a financially responsible life feels like that to you, you’re doing it wrong. Rather, you should be trying lots of low cost things all the time and keeping what sticks, and you’ll find that along the way the best of those new low cost things end up replacing expensive things in your life that you thought you couldn’t live without. This is the single best strategy I’ve found for beating the financial doldrums.
Final Thoughts
The five strategies here really boil down to one thing: for a big financial goal to feel easily attainable, you need to chart a daily course in the direction of that goal. Your natural day to day life needs to be leading toward that goal. If you can make that happen, then the biggest of financial goals will eventually be achieved. If you refuse to change your direction, you’ll never reach that new destination.
The thing is, that new direction doesn’t have to be miserable. It can be enjoyable and interesting, with new people and new things in your life. You don’t have to drop the things you really care about, either. You just have to be willing to try new things with an open mind and explore new social connections with an open heart.
Good luck!
The post Feeling Overwhelmed By Big Financial Goals appeared first on The Simple Dollar.
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