2013 Cheapest and Most Expensive Cars to Insure

While it’s true that drivers can help minimize their auto insurance premiums by comparing rates from various carriers, maximizing deductibles and qualifying for applicable discounts, the biggest long-term savings can come from buying a vehicle that’s inherently cheaper to insure in the first place. That’s especially since auto insurance rates are otherwise largely based on invariables like a person’s gender, age, driving record and address.

According to an extensive survey of more than 750 car models and six major carriers conducted for Insure.com, crossover SUVS dominate the rankings of least expensive vehicles to insure for 2013.

“In the past, minivans have dominated the ‘least expensive to insure’ rankings,” says Amy Danise, editorial director of Insure.com. “But SUVs and crossovers have parked themselves in the best spots in the rankings for the 2013 model year.”

By comparison, the costliest car to insure (excluding exotics), the posh Mercedes-Benz CL600 luxury coupe, gnaws at its owners’ pocketbooks with a stiff yearly premium. 

Of course, costlier cars are always more expensive to ensure. Their overall replacement values are greater and their repair costs tend to be more expensive than other types of vehicles. Beyond that, insurance companies look at past claims histories to determine which models incur more or less damage in a crash, are more or less damaging to other vehicles, people and property, are more or less likely to be stolen or be involved in a crash and have higher or lower bodily injury claims. By that measure, high-performance cars tend to be costly to insure because they tend to be driven more aggressively and are, in turn, involved in a proportionately higher percentage of accidents than more sedate sedans and SUVs.

Data on premiums for the survey was compiled by Quadrant Information Services based on auto insurance rates for more than 750 car and truck models from six large carriers – Allstate, Farmers, GEICO, Nationwide, Progressive and State Farm – in 10 ZIP codes per state. Rates were not available for all models, particularly exotic cars. Averages assume a single, 40-year-old male with a clean driving record and good credit who commutes 12 miles to work each day, with policy limits of 100/300/50 ($100,000 for injury liability for one person, $300,000 for all injuries and $50,000 for property damage in an accident) and a $500 deductible on collision and comprehensive coverage.

Of course, “your mileage may vary.” Demographically, women and married men tend to pay the lowest premiums, with younger men (the most accident prone group of all) being charged the highest rates for a given make and model. You’ll pay higher rates if there’s multiple tickets and/or accidents on your driving record, you live in a big city, and/or drive an excessive number of miles per year, among other factors; if you have a DUI on your record or are considered a poor credit risk you may not be able to obtain auto insurance at all, depending on the carrier.

And yes, be sure to comparison shop among multiple carriers, ask about discounts and consider raising your policy’s deductibles to further minimize your annual auto insurance premiums.

10 Most Lest Expensive Vehicles to Insure

10 Most Lest Expensive Vehicles to Insure

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How to Out Of Credit Card Debt

We can't offer many tips on cutting that waist line, but we can pass on some advice to help you get out of credit card debt. Here are three simple tips to reduce your credit card debt by the start of 2014.

Stop Paying So Much Interest

If you have a $10,000 balance on a credit card with a 20% interest rate and you are just paying the minimum amount each month (about $266), you won't have that credit card paid off until the end of 2041!  More alarming is the fact that you will end up paying over $16,000 in interest charges.

If you currently have a balance on your card, start reducing your debt by lowering your interest rate. Of that $266 payment, about $166 is going to pay interest penalties, which leaves only $100 toward your principal. Look at transferring your balance to a card with at least a year at 0% APR on the amount you transfer. You can immediately apply twice as much toward your principal each month.

Pay More Than The Minimum Amount

One of the best ways to reduce your credit card debt is to pay significantly more than the minimum payment each month. In our example above, if you doubled your minimum payment of $266 to $532 each month, your balance would be paid in just three years with just $2,000 in interest penalties.

Make micropayments instead of one monthly payment. As long as you pay the minimum payment by the due date, you can make multiple payments during the billing period. Credit card issuers typically charge interest on a daily basis, so reducing your average daily balance can save you a few dollars in interest. Eat a meal at home and immediately apply the money you saved to your credit card balance.

Stop Charging On Your Credit Card

If you carry a balance on your credit card from one month to the next, stop using that credit card to make everyday purchases. You will pay a high interest penalty on every purchase you make. If you charge meals, entertainment or clothing on your credit card, you could still be paying these off years later, long after the purchases are forgotten. Put away the credit cards and use cash for purchases. Cash is the most immediate, painful form of payment and it will make you think twice about each purchase.

Following these three tips will help you start to dig out of credit card debt in 2013.

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Tips to Choosing the Right Tax Professionals

It is never too early to begin preparing your taxes, and the earlier you file, the more you save. On average, studies show tax procrastinators overpay by about $400 as a result of mistakes made due to rushing the process and last-minute changes. With this in mind, and W2s coming from employers during the next month, it is time to start prepping.

One of the first steps is deciding whether or not you are going to hire a tax professional. While some people are fairly confident preparing their own taxes, 90 percent of Americans choose to have professionals handle their returns or rely on an online service. Hiring a tax professional is highly recommended if you had a major life change in the last year (a move, job change across state lines, marriage, divorce, birth of a child, purchase or sale of a home).

There are 1.2 million tax preparers in the United States. In fact, there are more professional tax preparers than law enforcement officers (765,000) and professional firefighters (310,400) combined, according to a recent study by The George Washington University. So, how do you know which one is right for you?

Tax preparers range from lawyers and enrolled agents to certified public accountants (CPAs) and storefront agents. Here are some guidelines for finding the right fit for you:

The Good Guy (or Gal)

A good tax preparer will not just plug in numbers—they will provide advice and direction. They should ask a lot of questions to ensure you are getting every legitimate deduction possible. They will not only focus on this year's taxes, but discuss how you can reduce next year's taxes as well, and some will even review last year's taxes for accuracy. Once your taxes are filed, a good preparer will be available should you have any questions or issues after the April deadline.

Can I see some ID?

Always check a tax preparer's qualifications up front. All paid tax return preparers must have a Preparer Tax Identification Number. Also find out if they are affiliated with a professional organization and receive continuing education and resources, as tax code is very complicated and tax law changes.

The Background Check

The Better Business Bureau can be a great resource to check a preparer for questionable history. State boards of accountancy for CPAs, state bar associations for attorneys, and the IRS Office of Professional Responsibility for enrolled agents can also provide information on disciplinary actions and licensure status.

Red Flags

Anyone who says they can obtain a larger refund than other preparers or promises a big refund upfront should not be trusted. You should also avoid preparers who charge a percentage of your refund rather than a flat rate, and never work with anyone who asks you to sign a blank tax form.

The Perks

Some tax preparers do not require an appointment. If your schedule is up in the air, seek out a storefront agent who allows this. And for those who are too busy, some preparers will allow you to simply drop off your W2s and tax documents; they will handle all of the paperwork, then sit down to review and sign when you are ready. Some can also save you more money by offering free 1040EZ filing, the easiest of the three IRS filing forms, and free e-filing, while others will charge for these. Credit unions tend to offer all of these perks and cost significantly less than other tax preparers.

The Fine Print

Just because you used a tax preparer does not mean you can just sign the dotted line. Review the entire return and ask questions. You are paying a professional to have peace of mind and you should be comfortable and confident the return is correct before it is filed. After all, you—not the preparer—are responsible for the accuracy of the return.

Whether you hire a lawyer, enrolled agent, CPA or storefront agent, keep these tips handy to help you find the tax preparer that is right for you. So get your W2s and supporting documents ready—it is time to get a head start on your taxes.

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What You Should Know When Buying a Home

It is not uncommon for someone to have a dream of owning a home or perhaps buying a different home.  This would be an important financial decision.  So e have invited Jeff Romine, partner, with the Financial Planners of Missouri, to discuss buying a home.

Question: When should a person start thinking about buying a home? 

Answer: The right time to buy a home can occur at a different time for each individual and/or couple.  I would suggest someone hold off on buying a home until they are confident they will live in the same community for several years, say 3 or more, and that they have their financial act together.  This would mean they should have no major credit card or other debt and they should have been saving some money for some time.  At a minimum they should have have saved enough for a down payment, hopefully a 20% down payment.  Also, they should be ready to take on the additional responsibility of home ownership. 

Question: What are some of the things that a potential home buyer would need to consider?

Answer: The first thing they should consider is whether they have the time to do their homework.  It is going to take some time to become knowledgible about the local housing market.  Then they will need to consider how much can they afford.  You can start with the rules of thumb that you can consider a home that costs two and a half times your annual salary.  However, people usually require a mortgage, so the ability to make  your mortgage payment, pay for insurance, and pay your property taxes will probably determine the size of home you can afford.

You will want to shop around and compare the mortgage rates and terms that various lenders offer. When you find the right lender, find out how you can prequalify or get preapproval for a loan. This can give you guidance on the price range you are looking at.

We suggest that you investigate 30 year fixed interest rate loans.  This typically results in a low monthly payment.  When possible you can always make larger payments. 

Question: How do you find the right home?  

Answer: I would suggest that you consider using a real estate agent or a broker.  They can guide you through the process of buying a home which is especially helpful to a first-time home buyer. 

To help choose the right home, I would suggest that, before you begin looking at houses, you decide what features that you want your home to have. This will help you in your search. What is important to you?  Is it location, quality of construction, style of home, lot size, number of bedrooms, or proximity to shopping, parks, schools, or work. It’s a good idea to shop around and look at many houses to develop a sense of what is available and the prices of homes in your community.

Question: What if I have found the right home, what happens next?

Answer: This is when the process gets interesting. If you have found a home that you would like to buy, the negotiations begin.  The process typically begins by you making an offer.  I would suggest that you use a real estate agent at this stage to help you prepare a written offer that contains how much you are willing to pay and the conditions that exist. The agent will then see that the offer is delivered to the seller.  Then the seller may react.  The seller may accept the offer, decline it, or counter your offer with a different price and perhaps a different condition.  If a counter-offer has been delivered to you, you will need to decide what you want to do.  You may want to walk away, accept the offer, or make a different offer.  This can go through several cycles and there are many things to consider during this process.  You need to remember that your are creating a legal contract.  You may need to make a deposit to show you are earnest.

Question: Are their some tax benefits to home ownership?

Answer: Yes home ownership has some tax ramifications.  Of course you would want to speak with your tax professional for tax advice on your specific instance.   There are two tax topics that a new home owner may experience for the first time. You may be able to deduct any mortgage interest that you pay.  Also you may be able to deduct your real estate taxes. In both instances you would be itemizing your deductions and using Schedule A with your 1040. All homeowners do not itemize their deductions, you would want to investigate this for your specific case. 

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Expectant Parents' Money Saving Tips

Welcoming a child in the family is one of the most anticipated events in a couple's life. However, if you haven't planned for it well, it could be financially debilitating. Here are the things you should take care of before the baby arrives.

1. Don't buy everything.

Most parents start splurging on cute baby stuff the moment they receive the good news. But, remember, your baby isn't going to notice, let alone remember, the expensive toys, clothes or nursery accessories. So, avoid spending money on things that she's going to outgrow within a few weeks. Preferably, rent most of the stuff, buy pre-owned items online or use hand-me-downs, especially items like baby swings or cribs. For the latter, check sites like olx.in, rentoys.in, toys-on-rent.com and toyzland.in. It's a good idea for parents to focus on essentials as the baby is likely to receive a lot of gifts.

You don't want to end up with double of everything, do you? Instead, spend on baby-proofing your house. Once the child arrives, you will hardly have time for repair work for at least two years. So, install smoke alarms and socket protectors, smoothen and varnish splintered wooden furniture, and install shelves so you can keep stuff above the toddler's reach.

2. Get your finances in order.

Your budget will go up substantially once the baby arrives, so it's best to get rid of high-interest debts or at least pay off as much as you can. You'll need to bolster your contingency fund, too, since your monthly expenses will be on the rise. Keep at least six months' worth of expenses in the fund. Also, discuss with your spouse whether both of you will continue working or move from a DINK to a SISK (single income, single kid) family. If both of you plan to work, calculate how much you are likely to spend on hiring a full-time maid/nanny.

However, if one of you is thinking of quitting, try living on the income of only one person for 3-4 months to see if you can afford to do so. In this case, take care of financial paperwork too. If you want to leave the job for an indefinite period, you may want to consider withdrawing money from the EPF and investing it in another avenue since the former won't earn you any interest if there is no contribution in it for three years.

3. Write a will.

Don't be lax here. Write/modify your will immediately to ensure that your child has no problems claiming your assets as a legal heir. You could even appoint her as a nominee for some of your investments or accounts. More importantly, appoint a guardian for your child after taking that person's approval. Specify the manner in which you would want your child to be brought up and the assets to be used for rearing her, if anything were to happen to you and your spouse. This will avoid any confusion or acrimony among family members about who will be responsible for what.

4. Increase your insurance.

Review all your insurance policies. Take a term plan or enhance the existing one after taking into account all your outstanding debts and the amount you will require to sustain and educate your child for the next 20 years. Reassess your health plan too. The cost of prenatal and postnatal care, as well as regular paediatrician consultation fee, can be exorbitantly high. Even if your employer provides a cover, buy a family floater plan that includes your child.

A cover of Rs 3 lakh for a 30-year-old with a family of three will have an annual premium of Rs 6,500-7,500. However, all such plans cover the child only after he is over three months old. Some plans provide maternity benefits too, but you should have had the policy for at least two years to avail of this benefit.

5. Start saving for other goals.

Bringing up and educating a child can be very expensive. In fact, you will spend Rs 50-60 lakh on your child till he turns 21. At least half of this amount will be spent on education. So, start saving early for this goal. A good way to begin is to invest the cash gifts that your baby receives and start a monthly SIP.

If you begin investing even Rs 2,000 a month after the baby is born, you will have a corpus of about Rs 12 lakh by the time he is an adult (assuming 10% return). However, don't pare down on investing for your own goals, specifically retirement. You can get a loan for your child's education, but you won't get one to sustain you during the sunset years.

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Tips on How to Sell Your Home this 2013

After years of declining home values and a buyers’ market, 2013 could be the year of the seller.

Though the situation varies by region, we’ve seen a glimmer of hope for sellers and the housing market in general over the past six months. Homes that didn’t move for a year started getting activity as buyers came off the sidelines, their confidence in the housing market and their financial situations greatly improved. That confidence, coupled with record low interest rates and rising rents, has been the fuel the real estate market needed. Add to this the low inventory seen in many markets, and you’ve got buyers motivated to make a purchase.

If 2013 might be your year to sell, start planning, engaging professionals and doing as much of the legwork as soon as possible. You only have one chance to be “Just Listed” in this new market. More than ever, you’ve got to put your best foot forward when presenting your home to motivated buyers.

Here are three things you can do now to transition from homeowner to successful home seller.

1. Know the comps.

One of the first people you’ll want to reconnect with is your real estate agent. They are your “feet on the street” and have their finger on the market’s pulse. Real estate agents generally pick up on trends or shifts in your particular neighborhood or market before the press or the bloggers.

So get on your agent’s radar as soon as possible. Start going to open houses to see what’s selling and to get a feel for values and how homes are being presented. Likely a home you see at an open house in February could sell by the time you list in May or June. Future buyers will probably use this home as a “comparable” sale. Having seen the “comps” yourself puts you in the buyers’ mindset. It enables you to get ahead of the curve or learn from the mistakes of other sellers.

2. Have your property inspected.

The buyer, after they have a signed contract on a home, is supposed to pay for an inspection, right? While that’s true, you can beat them to the punch and know what needs to be repaired before you go on the market.

Imagine if you list your home and have a great offer from a solid buyer. But the buyer finds out through the inspection that the roof needs replacement and the deck has dry rot. That excellent offer may not seem so great if you have to negotiate thousands of dollars in credits with the buyer.

Having your property inspected months in advance will allow you time to make a plan to get the big (and small) things repaired. If you can identify the problems upfront, you can fix them for a lot less money than those repairs would get negotiated for down the road. Or, you can price your home factoring in the needed repairs. Plus, a home with a clean bill of health can be advertised as such. Many buyers are looking for a home in “move-in” condition, free of any needed repairs or fixes.

3. Hire a designer or stager.

Your real estate agent should have a good designer or stager they like to work with -- someone who can help you start to view your home as a product to be marketed. This should be someone you reach out to once you have the place inspected and know the property’s condition.

Many people think a designer means big money or a wasted expense, but this isn’t always the case. Many designers charge by the hour. It could be as easy as hiring a designer for two hours to help you decide on colors to paint a room or two; a stager to help you declutter or decide which furniture to move out to make some rooms show better.

Based on your real estate agent’s feedback, you may decide to engage the designer on a minor kitchen or bathroom remodel. An old kitchen with linoleum countertops, knotty redwood cabinets and avocado-colored appliances can easily be updated with an inexpensive cabinet makeover and new stainless steel appliances.

You’ll save money in the long run

Like any major decision, selling a home takes a lot of planning, timing and consultation. Consulting with professionals and getting the facts in advance will help the process go a lot smoother, will help you make an informed decision and will most likely save you a lot of money when you sell.

If you’re a homeowner, transitioning to a seller mindset isn’t necessarily easy. The sooner you start that transition, however, the easier the process will be. But be aware there can be an unexpected, if ironic, outcome: Some would-be sellers do the fix-it work to their homes, clean up some rooms, or paint and update the entire place -- only to fall in love with their home all over again and decide to stay.

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Investment 101: Open-End, Closed-End, and Exchange-Traded Funds

What do open-end funds, closed-end funds and exchange-traded funds all have in common?

They each offer investors an easy and low-cost way to pool their money to purchase a diversified portfolio that reflects a particular investment objective. And investors don't need to have a lot of money to gain entry.

But each of these fund types is structured differently:

• Open-end mutual fund shares are bought and sold on demand at their net asset value, or NAV, which is based on the value of the fund's underlying securities and is generally calculated at the close of every trading day. Investors buy shares directly from a fund.

• Closed-end funds have a fixed number of shares and are traded among investors on an exchange. Like stocks, their share prices are determined according to supply and demand, and they often trade at a wide discount or premium to their net asset value.

• Exchange-traded funds also trade like stocks on an exchange, but their market prices hew more closely to their net asset value than closed-end funds. Premiums and discounts usually stay within 1% of NAV, with the exception of some smaller ETFs that trade infrequently.

Both open-end and closed-end funds have been around for many decades. Closed-end funds are the oldest among these, introduced in the late 19th century. Exchange-traded funds, or ETFs, are a relatively recent innovation in the fund business and were launched about 20 years ago.

Mutual funds are notable for their widespread popularity. Currently, there are 7,136 open-end funds with total net assets of $9.04 trillion, according to Morningstar. Compared to that, the ETF market is tiny: nearly $1.29 trillion invested in 1,438 ETFs. But closed-end funds by far have the smallest market share, with 600 funds worth about $238 billion.

This doesn't mean that open-end funds are always the best option and other fund types should be ignored.

"One of the advantages to ETFs is that they are transparent, so you know what you are buying," says Michael Iachini, managing director of ETF Research at Charles Schwab Investment Advisory Inc.

And closed-end funds have their fans as well.

Before investors choose between these funds, they should understand the unique characteristics of each fund type.

Indexed vs. Active Management

ETF fans point to their lower cost as a clear advantage over mutual funds. But Jim Rowley, a senior investment analyst at Vanguard Investment Strategy Group, says that fund costs reflect the differences between actively managed funds, whose managers actively trade securities to maximize returns, and funds that track a particular index such as the Standard & Poor's 500 index. "Indexed products generally have lower expense ratios than actively traded funds, and you find that with both mutual funds and ETFs," Rowley says. "Actively traded ETFs and mutual funds can have fees well over 1%," he adds.

Index funds, on the other hand, can have fees as low as one-tenth of 1%, whether they are mutual funds or ETFs. The higher price of actively managed funds is a consequence of the high cost of management. "Active management is expensive and for good reason: They have research staff, operating costs, lots of software and data they need to buy, and that adds up," Iachini says.

Timothy Johnson, chief investment strategist at Lincoln Financial Network, suggests that investors take a close look at mutual funds if they invest small amounts at regular intervals, a practice known as "dollar cost averaging."

"You can trade smaller amounts with a mutual fund and without commissions, assuming it's a no-load fund," he says. (Some mutual funds do come with loads, or sales charges.) On the other hand, investors generally have to pay commissions with ETF purchases unless they're waived. ETFs make good purchases for investors with large sums to invest or investors searching for a very exotic asset class, he adds.

Johnson also recommends a mix of actively managed funds and index funds to clients. "We usually recommend a mix of indexed and actively traded products that fits their personality and risk tolerance," he says.

Closed-End Funds

Unlike other funds, closed-end funds often trade at enormous premiums or discounts -- some funds recently have been trading at a 50% premium.

While buying at a discount may seem like a bargain, Iachini at Schwab warns that "just because a fund is trading at a discount in the past doesn't mean that it will necessarily go up -- and sometimes funds trading at a premium might yield more." He recommends investors research a closed-end fund's historical performance carefully before buying.

The recent rally in some closed-end funds is a result of their high dividend yields. Roughly two-thirds of these funds invest in municipal and corporate bonds, and many of them use leverage. This helps boost yields to as high as 15%.

Johnson warns that these yields reflect the high risk behind these funds. "While everybody's afraid of getting a low yield, they need to think of what they are running from and running to. If something yields a whole lot more than something else, the market is telling you that there are risks," he says.

The funds' use of leverage helps them make more money in good times, but leverage cuts both ways. In bad times, they can lose a lot of money as well.

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How to Avoid Stress When Buying New Home

Buying a home for the first time or the fifth can elicit a range of emotions from excitement to anxiety. Owning a home you can make your own can be fulfilling, but taking on the responsibility of homeownership might be stressful. The good news is that you can reduce that stress and focus on the enjoyable aspects of homebuying with these tips:

Be a smart saver. Long before you tour potential properties, lay the groundwork for a good home-buying experience by saving up for your down payment. Having some money to put toward the purchase gives you more flexibility when it’s time to get a loan.

Know what your credit report says. You’ll want to check your credit report to see if there are any mistakes or problems you can clear up prior to applying for a mortgage. You can request one free credit report annually from each of the three credit-reporting companies by visiting AnnualCreditReport.com.

Learn about loans. Finding out as much as you can about various types of loans and assistance programs will give you the knowledge to find the right loan for you – one that you will be able to afford for the life of the loan. You can research whether you qualify for any assistance programs at TxHomePrograms.org.

Get pre-approved. You’ll put yourself in a strong homebuying position by getting pre-approved – not just pre-qualified – for a mortgage. Be realistic about how much you can actually afford. Take a hard look at your own finances and future plans to make sure you are living within your means.

Determine what you really want. Do you see yourself in a ranch-style home or downtown loft apartment? A neighborhood where you can walk your kids to school?

Figure out what features are most important to you and decide if there are some items you desire but could look past if everything else falls into place. Once you determine the must-haves, you can quickly make decisions about which properties to view.

Make sure you have professional assistance. Buying real estate is much more involved than most other transactions, even high-dollar purchases like automobiles and stocks. It can be a tremendous help to have a professional looking out for your best interests along the way.

Real estate experts can explain the entire process, help you negotiate, keep the transaction on track and make sure you have the information you need to make good decisions.

Understand what goes into an offer. There’s much more to a good offer than deciding what price you’re willing to pay. Before you start searching for homes, talk to your Texas realtor about earnest money, option periods and fees, inspections, contingencies, closing time frames and other factors that may make your offer more attractive to the seller while protecting your interests.

Don’t let up after your offer is accepted. Not every transaction ends up with a closing. However, you give yourself the best chance of getting the keys to your new home if you and your realtor stay on top of the deadlines and tasks. Don’t be afraid to ask questions during this important part of the process. It will save you time and stress later on.

Buying a home should be an exciting time in your life. If you plan well and work with people who are looking out for your best interests, you can minimize the stress and enjoy the process of purchasing a new home.

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