5 Gorgeous Sofas You Will Love, All For Less Than $1,800!

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Infused Water Recipes To Help You Hydrate & Detox In The New Year

Decorating an apartment should be fun and exciting, but we know it doesn’t always go that way. Picking out your furniture and decor can become a daunting task, especially when you start looking at price tags. Furniture is expensive, and there really is no way of getting around that. That being said, there are some affordable options out there, and you won’t have to sacrifice your style. We’ve put together 5 of our favorite gorgeous sofas, ranging from sofa beds to sectionals. The best part? These beauties are all under $1,800. Happy shopping! 

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Source: blog.apartminty.com

If You’re Interested in Personal Finance Books, We Answer 3 Questions About Them Here

Much of the best personal finance advice out there is found in books, where the entire scope of a personal finance plan can be explored in depth. Your local library has a plethora of personal finance books on the shelves, covering almost any sub-topic you could want, and can request many more if you simply ask.

But among all of those books, there are questions. Which personal finance book is the best? Which one is right for me? How does the advice in a personal finance book apply in today’s world where we’re dealing with the COVID-19 pandemic and its consequences? Let’s look in-depth at some of those issues.

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In this article

1. What’s the best personal finance book?

What is the best personal finance book? There are thousands of them on Amazon and I don’t know which ones are worth reading.

– Max

It’s hard to define what “best” really means in terms of something like personal finance because people are coming to these books from such different places in their lives. A person in their 20s at the start of a great career, single and earning a good salary, is going to be looking for something much different than the type of book that would appeal to someone in their 50s who has always struggled to make money and is now very scared about retirement.

Thus, if you’re looking for the “best” personal finance book, you would want one that explains core concepts of personal finance in a way that’s meaningful and applicable to a lot of people.

[ More: More Americans Are Using Retirement Savings to Cover Expenses ]

One very good choice in that regard is “Your Money or Your Life” by Joe Dominguez and Vicki Robin. The book focuses on examining personal finance through the lens of how much of your life you’re devoting to earning money, and thus how much of your life you’re spending with each transaction, casting money-saving decisions in a very powerful light. It is an incredibly powerful argument for spending less in the modern world, and overspending is one financial challenge almost all of us face.

Aside from that, look for a personal finance book that matches your life situation. For example, if you’re young, look for a book targeting folks in their 20s and 30s, like “Get a Financial Life” by Beth Kobliner.

2. How do I explore frugal hedonism while isolated?

I enjoyed learning about “The Art of Frugal Hedonism” and I picked it up from the library recently. Disappointed to find that it was mostly about doing things socially, which is much harder right now. How do you do frugal hedonism when you’re isolated?

– Dana

“The Art of Frugal Hedonism” is a great book that addresses saving money from an interesting perspective. It views frugality as a creative constraint, meaning that it nudges you to explore new things that you may not have done before, and those new things often expose you to pleasures that are entirely new to you.

Many of the examples given by the authors throughout the book are indeed oriented toward spending time with others, which is a difficult challenge for those practicing social distancing or socially isolated for other reasons. In our conversation with author Annie Raser-Rowland, she even directly points this out as a problem, noting that there’s no easy way around it.

So, what can a socially isolated person do to practice frugal hedonism? You can start by simply trying a wide range of low-cost solo activities and hobbies, particularly things you’ve never tried before. Try growing some vegetables in the spring, learning how to knit or learn how to cook.

[ Next: The Best Personal Finance Books ]

You can, in fact, be a frugal introvert. There are many things you can do solo that is quite inexpensive. Go through that list and pick out a few that you haven’t tried before that seem like they have at least a bit of potential to be interesting, and try them. Some will click, and that’s great. Some won’t, but then at least you’ll have an interesting story to tell.

3. What is the best Dave Ramsey book?

I have been listening to Dave Ramsey on the radio recently and I like his advice. I looked on Amazon and they have several books by him. Which one is the best or the best to read first?

– Michael

Hands down, the best Dave Ramsey book is “The Total Money Makeover.” The reason is that, among all of Dave’s books, it’s the one that leans in the strongest to his core message.

Dave Ramsey is extremely good at practical psychology. He’s very good at helping people define the personal finance problem they’re facing and have the willpower to overcome it through motivational tactics. He leans into that strength, which is great, but by doing so, he’s perhaps not so good at other areas. He chooses to offer motivational predictions rather than offer extremely accurate numbers, which is why he’ll consistently overestimate stock market returns when he delves into investments because doing so motivates people to turn toward investing.

That’s why “The Total Money Makeover” stands out amongst all of Dave’s books. It sticks with the practical psychology of debt and focuses on developing a debt repayment plan, his variant of which he calls the debt snowball, and how to motivate yourself to actually pull it off. This is the area where Dave shines, and it’s never more clear than in this book.

Do you have any questions? The best way to ask is to follow me on Facebook and ask questions directly there. I’ll attempt to answer them in a future mailbag (which, via full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive many, many questions per week, so I may not necessarily be able to answer yours.

We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

Source: thesimpledollar.com

Mortgages in Forbearance Fell in January 2021

The COVID-19 pandemic has shaken up all areas of the U.S. economy in a number of ways, and the mortgage industry has been no exception. Since the start of the pandemic, the number of mortgages in forbearance have increased significantly — due, in major part, to the high unemployment numbers as well as the federal relief programs meant to help protect homeowners who are struggling financially.

 While the forbearance and delinquency numbers in January 2021 look more optimistic than they did at other points in the past, experts still predict it will be a while before the rates return to pre-pandemic numbers. Here’s what you should know about this issue.

In this article

Current state of forbearance as of January 2021

According to data from the Mortgage Bankers Association, about 5.46% of all mortgages — or roughly 2.7 million homeowners — were in forbearance during the second week of January, down slightly from 5.53% the week prior.

Forbearance numbers have ebbed and flowed over the past 10 months, in major part because of the economic changes caused by the pandemic. The latest decrease in forbearances came after a three-week increase caused by the economic slowdown in December.

There are still tons of people still struggling to make their mortgage payments, however, and two important federal relief programs are set to end soon — which could cause big issues for homeowners who are struggling to pay their mortgages.

The foreclosure moratoriums for Fannie Mae are set to end January 31, while the foreclosure protections for Freddie Mac loans are set to end on Febuary 28. Further compounding the issue is the fact that the deadline to request forbearance on a government-backed loan is currently February 28.

If your mortgage is backed by Fannie Mae, Freddie Mac or another government agency and you’re still facing financial hardship due to COVID-19, be sure to request mortgage relief before the deadline. You can request up to 180 days of forbearance if you need it.

2020 forbearance trends and the COVID-19 pandemic

When the pandemic hit and unemployment numbers increased, many homeowners struggled to make their mortgage payments. In response, the federal government provided mortgage relief as part of the CARES Act, a $2.2 trillion stimulus bill to provide relief during the COVID-19 pandemic.

Included in the bill was a provision to protect homeowners with mortgages that are backed by a government agency or government-sponsored enterprises (GSE) such as Fannie Mae or Freddie Mac. Under the CARES Act, borrowers who fit the criteria couldn’t have their home foreclosed on. Those experiencing a financial hardship could also request forbearance in 180-day increments for a total period of 12 months.

During the first couple of months of the pandemic, the number of homeowners with forbearances grew rapidly. At the start of the pandemic in early March, only 0.25% of loans were in forbearance. By the first week of April, that number had risen to 3.74%.

The percentage of mortgage loans in forbearance peaked at 8.6% in June, representing about 4.2 million mortgages. While the numbers ebbed and flowed throughout the rest of 2020, the rate of mortgages in forbearance generally declined.

As unemployment and forbearance rates remained high throughout the year, government agencies extended deadlines on forbearance requests and extended foreclosure moratoriums. As of Jan. 2021, borrowers have until Feb. 28 to request forbearance on their government-backed loan, and their mortgage cannot be foreclosed on until the same date. For Fannie Mae and Freddie Mac loans, there is no deadline to request forbearance, but the foreclosure moratorium ends Jan. 31, 2021.

Despite the relief provided by the federal government, mortgage delinquencies still remain high. Part of the problem is that the federal protections only apply to those with a government or GSE-backed mortgage. As a result, many homeowners aren’t eligible, and some may not realize there are programs available to help.

[ Read: Best Refinance Rates ]

Before COVID-19, the number of mortgages that were delinquent was fairly steady at about 3.6%. By mid-2020, that number had risen to more than 8%. Mortgage experts expect that delinquency rates won’t return to pre-pandemic levels until early 2022.

How the housing market was affected by COVID and government forbearance programs

Despite the increase in unemployment and mortgage delinquencies throughout 2020, the past year has still been booming for the housing market.

First, the Federal Reserve slashed interest rates in 2020 to help keep the economy moving during the pandemic. As a result, mortgage rates have reached all-time lows over the past year, significantly increasing the demand for homes and refinances.

The public health crisis also caused many families to flee urban areas in favor of suburban neighborhoods or smaller towns. This pattern has caused housing demand and prices to spike in those areas due to an influx of new residents.

The government relief programs have also kept the housing supply low, despite the high demand. Thanks to the foreclosure moratorium and forbearance program, many homeowners have been able to stay in their homes when they otherwise may have had to sell. As a result, the housing market supply hasn’t increased like it generally does during an economic crisis.

What to expect for the rest of 2021

There’s no way to know exactly what is to come for the remainder of 2021. The past 12 months have been a tumultuous time for the economy as a whole, including the housing market.

The first thing worth noting is that many of the federal protections for homeowners are set to end soon. The foreclosure moratorium will end Jan. 31 for mortgages backed by Fannie Mae and Freddie Mac and Feb. 28 for mortgages backed by a government agency. Additionally, the deadline for homeowners to request forbearance from a government agency is Feb. 28.

Despite the protections currently in place, the delinquency rate for federally-backed loans has remained significantly higher than the rate for mortgages overall. Once the current relief programs end, it’s possible that many of the loans currently in forbearance will become delinquent, ultimately causing them to go into foreclosure.

[ Read: Best Investment Property Mortgage Rates ]

We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

Source: thesimpledollar.com

Can I Transfer My Car Insurance When Moving Out of State?

If you’re planning a move across state lines, you’ve likely wondered about updating your car registration and insurance. So what do you do with your car insurance when moving out of state? Do you have to change car insurance when you move states? The short answer is yes — but you may not have to completely overhaul your policy to pull it off. In all cases, your policy will need to be updated — at the very least.

Although it’s possible to transfer car insurance from one state to another, you will need a new policy if your carrier does not offer car insurance in the state you’re moving to. So, not only do you need to update your carrier with your new address, you also need to make sure your new policy meets the minimum requirements for the state you’re moving to. Otherwise, you could end up with coverage that doesn’t meet your needs, and that could cause big problems down the road. Here’s what you need to know.

In this article

Your car insurance grace period 

In most cases, your current car insurance coverage will continue to cover you until your policy renewal date, even when you move out of state. But rather than waiting until you’ve unpacked all the boxes in your new place, the best recourse is to notify your insurance company of your move as soon as your new address is confirmed. This gives you time to work with your agent to get your policy updated or purchase a new one altogether if your current carrier does not provide coverage in your new state.

[ Next: Liability vs. Full Coverage Car Insurance ]

The last thing you want to do is let your old policy lapse or cancel before you have your new policy in place. Not only is driving without liability insurance illegal in almost every state, but you also open yourself up to a huge financial risk if you’re involved in an accident without insurance.

Updating your insurance becomes even more critical when it comes time to register your car in your new location. You should also be aware that it’s considered a form of insurance fraud to misrepresent the location you live in, so your best bet is to update your new address right away with your insurance carrier to avoid any issues.

Changing your policy after a move 

Once you move out of state, you need to start the process of updating your car insurance. There are two different possible scenarios that can occur when you do this.

The first is if your current auto insurance provider extends coverage in the new state you’re moving to. If this is the case, contact your agent and notify them once your new address is confirmed. Your agent should be able to easily update your policy to reflect your new location and new policy.

If your current carrier does not offer coverage in your new state, you will need to purchase a new policy. Whatever you do, do not cancel the coverage on your existing policy until your new carrier’s policy is put in place.

Whether or not you stay with your current provider, moving is an ideal time to receive multiple quote comparisons. This way you know you’re receiving the most competitive price for the coverage you need. And remember, your insurance rates are based on where you live, among many other factors, so changing states will likely impact your rates.

[ For You: How Much Car Insurance Do You Need? ]

For example, if you’re moving from North Carolina, where the average cost of auto insurance each month is $79.13, you may be surprised by an increase if you move to another state like Georgia. Georgia’s average rate each month is $131.15, further illustrating the need to get quotes from multiple providers.

Registering your car after a move

Another reason you have to change car insurance when you move to another state is that most states require you to show updated insurance coverage for the car registration process. And, the requirement in most states is that you register your car within 90 days of moving, which means your auto insurance needs to be updated quickly.

It’s important to keep in mind, though, that the grace period for updating car registrations varies state to state, so don’t assume that you’ll have 90 days to do so. For instance, Texas requires you to register within 30 days and Michigan requires you to immediately register your vehicle after you move. If you do not register within the designated time frame, you risk fines and possible citations.

The cost of registering your car varies by state too. Some states charge a flat fee for registration, while others charge a fee based on the weight of your vehicle. Using Texas as an example, the registration fee is $50.75 per vehicle.

The safest bet is to look up your new state’s Department of Motor Vehicles to confirm the registration deadline and required documents (including insurance coverage), along with the testing required to secure your registration. You can also get a confirmation of expected registration fees by doing this.

Tips for moving out of state 

Moving, especially across state lines, means there are plenty of details to keep track of along the way. Adequate auto insurance coverage is extremely important, and there are a few steps you can take to lessen your chances of any missteps, including:

  • Update your agent on your new address as soon as you confirm it. Your agent can advise on getting your policy updated in your new state and tell you any next steps, since most agents are only licensed in the state they live in.
  • If you must purchase a new policy, do not cancel your current policy until the new policy is in place.
  • Prior to moving, you should confirm the registration information with your new state so you are aware of any grace period or deadlines for car registration. 
  • Once your new policy is in place, you can work with your old agent on the steps to cancel the old policy.
  • Be sure your old insurance company has your new address on file in case you are due a refund and the carrier needs to send you a check. 
  • When you have your updated or new policy with in-state coverage, you can proceed with car registration.

[ See: Why Is It Required to Have Car Insurance? ]

We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

Source: thesimpledollar.com

3 Things No One Tells You About Buying a House

This past November, my boyfriend and I were lucky enough to buy our first home — even with student loans and an ongoing pandemic. 

Not even COVID-19 could dull the thrill of buying a home, though it did make it an incredibly sterile process (pun intended). Even though I write about mortgages and buying a home for a living, the process still came with many learnings. Now, this might seem obvious for seasoned home buyers, but for my first-time home buyers, this one’s for you. 

1. Be prepared to feel financial anxiety

Millennials grow up thinking that they’ll never be able to afford anything — or at least I did. Because of that, I thought my days of buying a house were years away. But after a frank conversation about just how much we were paying in rent, we realized that buying a house was a much better investment of our money.

[ Read: How Do You Know You’re Ready to Buy Your First Home? ]

That said, your mortgage isn’t the only number that you need to think about when you’re deciding to buy. Don’t forget about things like closing costs or your down payment.

So, when the full-blown “no way I can afford this” panic set in, we sat down and evaluated our finances — and not just how much money we each had in the bank. We took into account our bills, student loan payments and potential monthly mortgage payments in a simple excel spreadsheet. Seeing it all laid out in front of us made things doable. 

It’s important to compare your financial obligations to how much you make and consider how much you could afford if you lost your job. 

2. With purchasing power, comes great responsibility

I chose where I went to college and what I do for a living, but I’ve never felt more in control of things in my life. Which admittedly was pretty terrifying because I had no idea what I was doing.

Our realtor was helpful, but when it came down to it, he could only suggest things. Ultimately every decision landed on us. Not all choices were complicated  — deciding on which house to pick was easy enough. After we shopped around for rates and compared who was going to give us the best terms, we chose our lender. But everything after putting an offer in was where things got tricky. 

[ Read: Best Mortgage Rates for February 2021 ]

From what inspections you want to which lawyer you want to use, you have to decide, even when you have no idea if you made the right choice. 

You also have to decide how much house you should buy, not just how much you can “afford.” I can’t explain the flurry of utter shock when we were pre-approved for a $600,000 mortgage. There was no chance we could actually afford that price. Even if a pre-approval doesn’t guarantee a mortgage, don’t let a high number like that lead you to take on more than your finances truly allow. 

3. The lessons will never end

There is no such thing as perfection when it comes to purchasing a home. There will be repairs to be made, and budgets to reevaluate. But with an open mindset, the inconveniences can become learnings. Here are my top three.

Everyone may know the word appraisal, but not what it really means

I happened to be buying a home at the same time as a friend, and it was interesting to see the noticeable differences between our journeys. They ran into trouble with their appraisal, which at the time I thought was a very obvious process. However, their experience makes me realize that knowing something topically doesn’t mean you understand the implications. 

A home appraisal is required and will be coordinated by your lender. But if the offer accepted by the seller was for $300,000 and the appraisal values the home at only $290,000, your lender is only going to give you what the home is worth.

If you don’t have an extra $10,000 lying around to cover that gap, you’ll have to check if the seller will come down. Thankfully it all worked out for my friend, however, had it not, they would have lost money when they would have been forced to walk. 

In this article

Really think about what to spend money on

Given that the coronavirus is still very much around, we thought it best to forgo movers or painters to keep our bubble as small as possible. Not to mention the added benefit of saving a significant amount of money. 

[ Read: 7 Crucial Steps to Buying a Home in 2021 ]

If I could go back, I would pay for one, if not both. It was a ton of added stress and time that could’ve been saved. That said, the money saved cannot be ignored. The thing about buying a house is that you need a million things right from the start, especially if you’re moving out from an apartment, as I did. 

Most people likely cannot afford to pay painters, movers and all the things you need right from the start at the same time. Think about what your priorities are. For me, it was painting. If you’re fine with the walls’ colors, save that expense for later and focus on movers or the work your house needs. 

COVID-19 made for a memorable experience

In response to the pandemic, lenders have added extra employment verification steps to the process. If you lose your job, you may have to stop the process and reapply later. Yet, the pandemic’s reach went beyond just the underwriting process. 

If I saw my realtor on the street post-pandemic, I would not recognize him. We wore masks for the entire process, and even the official closing was done outside in the cold, with two pairs of sterile gloves and masks. It was not an exciting event like many people describe. The most exciting part of closing was getting to keep the pen at the end. 

We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

Image credit: Bibadash / Shutterstock

Source: thesimpledollar.com

The Best Renters Insurance in Houston, Texas

Renters insurance in Houston is more expensive than renters insurance in other parts of Texas and the nation, so finding the cheapest provider can be a challenge. It’s often so high that many renters can’t help but ask themselves if they actually need it. Unfortunately, you do. You don’t just need it for property coverage, but you also need it for liability — especially if you often have a lot of people over.

America’s top-rated renters insurance

  • Policies starting at just $5/month
  • Sign up in seconds, claims paid in minutes
  • Zero hassle, zero paperwork
In this article

For all of the recommendations below, we used our SimpleScore methodology to find the best renters insurance companies in Houston. We analyzed coverage options, discounts, customer satisfaction, support and accessibility for renters insurance companies to assign a score that reflects our recommendations and review of renters insurance in Houston.

Here’s what we recommend for renters insurance in Houston, Texas.  

The best renters insurance companies in Houston, Texas

Most affordable – Progressive

Choose Progressive if you want cheap renters insurance in Houston.

J.D. Power Rating

3/5

AM Best Rating

A+

Standard & Poor’s

AA

SimpleScore

4.2 / 5.0

SimpleScore Progressive 4.2

Discounts 5

Coverage 3

Customer Satisfaction 3

Accessibility 5

Progressive has outstandingly low rates compared to other providers in the area, which you can make even lower if you can take advantage of Progressive’s discounts. Progressive currently offers the following discounts to its members:

  • Multi-policy
  • Quote in advance
  • Receive documents by email
  • Pay in full
  • Secured/gated community
  • Single deductible benefit

With so many options, it’s very easy to get an already low premium down even further.

Also worth noting is that Progressive has an A+ financial rating with AM Best. This is especially important living in Houston because the likelihood of many people filing claims after a natural disaster each year is high.

Best for bundling – Allstate

If you need auto insurance, Allstate could help you save big by bundling.

J.D. Power Rating

2/5

AM Best Rating

A+

Standard & Poor’s

AA-

SimpleScore

4.2 / 5.0

SimpleScore Allstate 4.2

Discounts 5

Coverage Options 5

Customer Satisfaction 2

Customer Satisfaction 5

If you also need car insurance, the best company to do both is Allstate. With Allstate, you’ll save 10% on your auto insurance and up to 25% off your renters insurance if you do both through them. That’s a lot of savings. When you consider that Allstate also offers numerous other discounts you can take advantage of for auto and renters, then it becomes clear that Allstate could likely save you the most money overall.

Most tech-savvy – Nationwide

If you like your insurance provider to be a 21st-century carrier, then Nationwide is for you.

J.D. Power Rating

2/5

AM Best Rating

A+

Standard & Poor’s

AA+

SimpleScore

3.8 / 5.0

SimpleScore Nationwide 3.8

Discounts 4

Coverage Options 5

Customer Satisfaction 2

Accessibility 4

The Nationwide mobile app, which is available for both iOS and Android devices, is one of the best insurance apps on the market today. With the app, you can file a claim, check on the status of a claim, make a payment, review your policy, update your policy, as well as make any changes to your coverages. Most insurance apps only cater to auto claims, but with Nationwide you can do renters insurance, too.

Best regional provider – Harris County Insurance Center, LLC

Get the benefits of working with a local carrier while feeling like you’re working with a national provider.

J.D. Power Rating

N/A

AM Best Rating

N/A

Standard & Poor’s

N/A

SimpleScore

2.8 / 5.0

SimpleScore Harris County Insurance Center, LLC 2.8

Disconts 2

Coverage Options 3

Customer Satisfaction N/A

Accessibility 3

Harris County Insurance Center has agents that speak both English and Spanish, and you can file a claim 24 hours a day. Unlike other regional providers, Harris County Insurance Center makes it possible to get a quote online without having to go to a brick and mortar shop or speak with someone over the phone. In fact, Harris County is getting so many things right we wouldn’t be surprised if they start servicing a larger area in the near future.

America’s top-rated renters insurance

  • Policies starting at just $5/month
  • Sign up in seconds, claims paid in minutes
  • Zero hassle, zero paperwork

Choosing your provider

When choosing which carrier you want to work with, you’ll have a choice between a national carrier and a regional carrier. There are pros and cons to both. Let’s talk about them.

Local Carrier

Pros

  • Support your local economy
  • Work with an agent that knows exactly what you need
  • Develop an ongoing working relationship with the same agents

Cons:

  • May not have as many coverage options
  • May not be as tech-savvy
  • May be more expensive than national providers

National Carrier

Pros:

  • More coverage options
  • Cheaper premiums that smaller providers 
  • More tech-savvy (smartphone apps, online presence)

[ Read: Defending Against Porch Pirates: What to Do about Package Thefts ]

Cons:

  • Agents likely will not know Houston, Texas, very well
  • Will not be able to develop an ongoing working relationship with an agent
  • You will likely have to do everything online or over the phone

Additional renters insurance coverage in Houston

Houston, Texas, has one of the highest rates of crime in the entire country. According to the Houston Police Department, the chances of becoming a victim of violent crime is about 1 in 18. It’s a trend that has only gotten worse (2020 was one of the worst years the city had seen in decades). Obviously, crime is a reason that renters insurance is so much in Houston

Another reason renters insurance is so high is because of natural weather disasters. Houston is subject to both flooding and hurricanes. As a resident in this area you should highly consider purchasing additional coverage with your insurance company.

Flood insurance

A regular renters insurance policy does not protect your belongings if they are damaged by floodwaters. For this type of coverage, you need flood insurance.

[ Read: Does Renters Insurance Cover Storage Units? ]

You may be able to purchase flood insurance through the insurance provider you purchase renters insurance, but most people usually get it through the U.S. government through Floodsmart. Living in Houston, you are likely in a flood zone, but you can see if your particular area is subject to flooding by inputting your address into FEMA’s flood map. Given Houston’s history with flooding, you should even consider purchasing flood insurance if you live in a high rise apartment.

Hurricane insurance

Hurricane insurance is actually called windstorm insurance. The likelihood of you needing to purchase it as a renter is small. This is because damages caused by wind, hail, fire and lightning are more than likely covered by your insurance provider. Just make sure that, when you do purchase a policy, you read the fine print about any exclusions. The only likely exclusion you’ll see is damage caused by floodwaters.

How much does renters insurance cost in Houston?

According to the latest study by Insurance Information Institute, the average cost of renters insurance in Texas is currently $225 a year. The average is $179. However, there are a lot of factors that influence the cost of renters insurance. These include:

  • Deductible
  • Type of policy you have
    • Actual cash value vs. replacement cost
  • Amount of property coverage
  • Amount of liability coverage
  • Where you live
  • Discounts (for example, many companies offer discounts for bundling policies)

Other factors that influence your final rate are whether you have any pets, and how much you estimate your personal property to be worth.

[ More: How Much is Renters Insurance? ]

Houston renters insurance FAQs

Yes, landlords can require renters insurance in Texas. Though you are not legally required to have it under state law, your landlord has the legal power to dictate the terms and conditions of the lease.

There are several factors that impact your renters insurance premium. The primary factors affecting the price of rental insurance in Houston include the size of the apartment or dwelling, how much liability you want to have, how much property coverage you want, as well as where your rental is located within the city.

Compared to the rest of the country, yes. The latest study from the Insurance Information Institute showed Texas to be the fourth most expensive state for renters insurance. This is because places like Houston are frequently exposed to natural disasters year after year, as well as high crime.

Don’t feel completely ready? For an extensive guide to purchasing renters insurance, check out our Ultimate Guide to Renters Insurance.

We welcome your feedback on this article and would love to hear about your experience with the insurers we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.

Source: thesimpledollar.com

These Throwback Hobbies Now Make Money as Side Gigs

The gig economy, supercharged by a pandemic, is breathing new life into some bygone hobbies, ones associated more with retirees than entrepreneurs.

Life indoors drove many folks to experiment with tactile hobbies like bread baking and quilting. What started as a way to pass the time could blossom into a side hustle with a little know-how.

Online platforms such as Facebook Marketplace, Etsy and Instagram as well as the revival of flea markets – often with a trendy, indie twist – offer novel ways to make money on those age-old crafts and activities.

Here’s a look at six trending hobbies that could make you serious money. These are not your grandma’s side gigs.

6 Throwback Hobbies That Make Money as Trendy Side Gigs

1. Antiquing

Buy old furniture and/or tchotchkes, then resell them for a profit. The concept is straightforward, and it’s sometimes referred to as upscaling or upcycling when you work a little magic on the item to bump up the price tag.

The Penny Hoarder spoke to Sara Chen, a master of upcycling. She focuses her efforts on flipping furniture, hunting for antique, mid-century modern dressers online via Facebook Marketplace.

When she finds a good deal, she buys it, sands it, paints it, primes it and resells it — usually for triple or quadruple the purchase price. She’s able to make $3,000 a month consistently.

Her secret (besides serious painting skills)?

“Post as many pictures from different angles as you can,” she told The Penny Hoarder, noting that taking photos is her favorite part of the flip. “It’s also probably the most important part.”

Make sure they’re high quality and in good lighting. The more the better.

2. Baking

It takes time for dough to rise.

Baking, because of the equipment required, is a hobby that can be difficult to scale into a side gig or a business. But over the years, The Penny Hoarder has talked with several bakers who made it work and a few who started during the pandemic. You can lean on their advice no matter what stage you’re at.

Sarah Tennant started baking as a hobby when she was 14 years old. She decided to try to earn a profit from her skills by taking ad hoc requests from friends, family and referrals.

In her guide for The Penny Hoarder, she outlined how her cakes, which she priced much lower than professionals, still brought her in $400 a month.

College roommates Sarah Chappell and Julia Finfrock found success with their sourdough side hustle called EarlyRisers. In October 2020, the duo started out selling plain sourdough for $7 a loaf. As orders increased, they started experimenting with flavors, adding chocolate-chip, rosemary, garlic and other flavors to the menu. These speciality loaves sell for up to $11.

“It was a lot of trial and error,” Finfrock told The Penny Hoarder.

3. Crafting

Thanks to online marketplaces like Etsy and Amazon Handmade, crafting is seeing a huge comeback. And we have plenty of ideas for you to cash in on its popularity.

Local fairs and online marketplaces are ideal places to sell easy-to-make holiday decorations.

Some examples of low-cost decorations include:

  • Scrap wood stocking hangers
  • Sock snowmen
  • Pumpkin spice soap

Of course, you’re not limited to holiday decor. You could also try your hand at DIY greeting cards or handmade wedding invitations. When you’ve decided exactly what you want to make and sell, keep costs low by finding cheap crafting supplies. Dollar stores are a good place to start.

Pro Tip

To find a nearby market or fair to hawk your creations, search Festivalnet.

Two women plant potted plants.
Getty Images

4. Gardening

Millennials love plants, according to Money, the Huffington Post, CNBC, Business Insider, the New Yorker and apparently the entire internet.

Further proof: A plant aesthetic has blossomed on social media, especially Instagram. The hashtags #Plants and #PlantsofInstagram have tens of millions of posts. Outside of the local market scene, a lot of small-scale operations use Instagram to sell their plants.

Selling succulents probably isn’t going to allow you to quit your day job, but it may pad your savings or help you pay down debt.

One gardener, Stephanie Spicer, made $1,200 in a single season. In her guide to selling plants, she outlines exactly how to choose, fertilize, present, price, advertise and sell them.

5. Knitting, Sewing, Quilting

Boo, fast fashion trends. Yay, making and altering your own clothes. As sustainability becomes more of a conscious decision for many consumers, skills like knitting, sewing and quilting are seeing renewed demand.

Pro Tip

If you want to start out small with handmade clothing, blankets or accessories, Amazon Handmade or Etsy are two of the best places to sell online.

If you want to lean into the gig – beyond a few online sales – there’s some money to be made. The Penny Hoarder spoke with retired geologist Pat Martinek, who found a way to monetize her weaving and spinning skills through her side business The Fyber Cafe. Martinek raked in $10,000 a year by using chiengora, aka recycled dog fur, to create garments and keepsakes.

“It is warmer than other fibers, so a scarf or sweater made with chiengora can help you withstand the most brutal temperatures,” she said.

Ella Trout, a college student at the University of Vermont, is another example of how to cash in on the handmade trend. She founded puppycatco, her sustainable fashion side hustle, a couple years ago.

She started by screenprinting her dog and cat designs onto T-shirts, but changed her business model over the years. Now, she sews and alters clothes to be more environmentally sustainable. Trout uses Instagram to sell her creations, and she told The Penny Hoarder that her handmade clothing and accessories earn her up to $1,500 per month.

A woman looks through the book collection at a library.
M.K. Williams looks for books to check out at Town ‘N Country Regional Public Library in Tampa, Fla. Tina Russell/The Penny Hoarder

6. Using the Library

Libraries are one of the only remaining places where you can just exist. For free. There’s no expectation to spend money. That alone should be reason enough to visit.

As an additional incentive, libraries offer access to a bunch of interesting things beside books that can help you launch a side gig or business. Tools, baking equipment, seeds and even high-tech are often available at no cost through a process called intra-library loans.

“Maybe you want to make a cow-shaped cake. You don’t have to buy that cake pan,” said Bob Anstett, of Broward County, Florida’s library system. “You can check it out from a library.”

In addition to the fun stuff you can rent for free at your local library, Anstett explained that libraries have expanded to home community workshops called makerspaces. Makerspaces offer up all kinds of equipment for locals to tinker with and use to hone new skills.

“You can come in and take a basic class at [our makerspace] and use our sewing machines,” Anstett said. “Used to be that you were called a knitter or a carpenter or a woodworker. Now, you’re a maker.”

Adam Hardy is a former staff writer at The Penny Hoarder.

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Source: thepennyhoarder.com

10 Things Taxes Pay For: Where Do Your Federal Tax Dollars Go?

Your taxes pay for a variety of government services, as well as government debt and salaries.

A young Black woman sits at a desktop computer and looks intently at the screen. One hand rests on the keyboard and the other holds a mug of coffee or tea. There is a yellow wall and blackboard behind her and two notebooks stacked on the desk beside her.

The federal government spends a lot of money. In 2019, for example, the government spent a total of around $4.4 trillion. You know that sounds like a lot, but how much is it really? 

For comparison, $4.4 trillion was around a fifth of the total national GDP for that year. GDP, or gross domestic product, is the value of all the goods and services provided or made within the country during that year.

What funds the things the government pays for? Well, $3.5 trillion of that spending was paid for by “federal revenues,” which mostly refers to taxes. The other $984 billion was borrowed. Discover 10 things taxes pay for below to understand just how the federal government is spending those trillions of dollars.

10 Things Taxes Pay For

  1. Government Debt
  2. Social Security
  3. Medicare
  4. Other Health Care
  5. National Defense
  6. Veterans Benefits
  7. Safety Net Programs
  8. Education
  9. Infrastructure
  10. Salaries and Wages

1. Government Debt

If the United States’ government borrowed more than $900 billion in 2019 alone, you can bet the total debt is high. At the end of 2019, it was $22.8 trillion.

According to the Peter G. Peterson Foundation, which keeps a daily national debt clock, as of February 24, 2021, the national debt was as much as $27,932,601,755,468—more than $27.9 trillion. Not sure exactly how much that really is? Consider this—if everyone in the United States covered an equal portion of that debt, each person would need to pony up $84,029.

It’s not surprising that a large chunk of what the federal government spends goes to debt, then. In 2019, around 8% of federal spending covered only the interest on debts!

2. Social Security 

Funding the Social Security program is a big expense for federal taxpayers. Social Security spending is part of an overall government spending category known as mandatory spending. These don’t require appropriation because the spending is mandated by a previous law or appropriation. With mandatory spending, the government funds the programs based on the need—however many people are eligible for and draw from Social Security, for example, determines how much is funded.

Many of the mandatory spending programs started in the middle of the 20th century. As the population has grown, so has the amount needed to fund these programs. In 1962, mandatory spending accounted for 31% of the federal budget. In 2019, it accounted for 61%.

Social Security accounts for the largest amount of mandatory spending. In 2019, the program accounted for 38% of all mandatory federal spending. That was around 23% of the total budget, or about a trillion dollars.

3. Medicare

Medicare also represents a mandatory spending item on the federal budget. It’s typically second to Social Security, and in 2019, it accounted for more than 23% of mandatory spending. This program provides health care benefits for qualified retired individuals as well as some eligible disabled persons. Overall, about $651 billion went to Medicare in 2019.

4. Other Health Care

Medicare isn’t the only health care and wellness program covered by the federal government. Others include Medicaid, which the federal government funds in partnership with the states, the Children’s Health Insurance Program (CHIP), and health care market subsidies. These subsidies are funded under the Affordable Care Act and usually taken as a reduction on how much someone might pay in taxes.

In 2019, all of these other health care programs cost around $450 billion.

5. National Defense

Defense is not included in mandatory spending. It is discretionary spending and it must be included in congressional appropriations bills annually.

Defense tends to be the biggest discretionary spending item on the federal budget. Some, but not all, foreign aid can be classified under defense because that spending is meant to stabilize other nations for the defense of the United States.

In 2019, defense accounted for around 50% of all discretionary spending. However, that was only around 16% of the total budget. 

6. Veterans Benefits

Veterans benefits refers to a wide range of health and wellness programs, financial assistance, and other programs designed to support veterans of the United States military. This type of spending can actually fall under both discretionary and mandatory, as there are VA programs in both categories. In either case, though, it’s a relatively small percentage of total spending.

7. Income Security or Safety Net Programs

Income security refers to federal spending on safety net programs to increase the health and safety of the general population. Programs included under this umbrella term cover, but aren’t limited to, housing assistance, nutrition and food assistance, unemployment compensation, foster care, and certain tax credits.

In 2019, income security accounted for the third-largest mandatory spending category after Social Security and Medicare. Around 16% of mandatory federal spending was in this category. Around 5% of discretionary spending that year was also in this category.

With two COVID relief acts in 2020, you should expect to see percentages in this category go up for that year. The types of spending related to those bills—such as the stimulus payments to qualifying Americans—would be considered income security. 

8. Education

The children are our future—but you might not know it by looking at how federal funds are spent. Education is normally a relatively small discretionary spending item (about 7% of discretionary spending in 2019), and it often includes both K-12 education as well as spending on college, training, and employment services. It’s also worth noting that only around 8% of K-12 public school spending across the country is federal. The rest is covered by state and local funds. 

9. Infrastructure

Infrastructure refers to physical structures and facilities that we depend on to function as a society. This includes buildings, roads, and power supplies. 

As with education, infrastructure expenses are shared among federal, state, and local budgets. According to a report from the House Committee on the Budget, the total infrastructure spending across all these entities in 2017 was only 2.3% of GDP, or around $441 billion.

10. Salaries and Wages

Not including the military and other non-civilian workforces, the federal government employs more than 2 million people. That’s a lot of people to pay, which means a lot of spending on salaries, wages, and benefits. The federal government spends billions of tax dollars to cover these expenses every year.

What If You Don’t Agree with Federal Spending?

As much as we’d sometimes like to pull the plug on our own tax bills because we don’t agree with how the federal government is spending our money, you still need to pay your taxes. Not doing so has legal consequences and could also lead to debt that might derail your financial goals and credit score. 

But you can take some actions if you don’t agree with how the federal government is spending your tax dollars:

  • Contact your legislators. Find your representatives in the House of Representatives and the Senate, then contact them about your concerns. Don’t forget to contact your state representatives as well as your US representatives.
  • Use your vote. Vote for candidates for president, the House of Representatives, or the Senate who align most closely with your policy beliefs and who may be more likely to spend money in a way you agree with.
  • Get involved. Learn more, get involved with grassroots change efforts, or sign or create petitions for change.

But while you’re doing all those things, don’t forget to do your federal taxes.

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How to Avoid Paying Taxes on Your Social Security

How Can I Avoid Paying Taxes on Social Security? – SmartAsset

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Social Security benefits can provide an additional income stream in retirement alongside withdrawals from a 401(k), individual retirement account or brokerage account. Part of shaping a retirement plan around Social Security income means planning ahead for taxes. Social Security benefits are considered taxable for some retirees, though whether yours are can depend on your income. If you’re wondering, how you can avoid paying taxes on Social Security, there are some strategies you can try.

Do you have questions about your overall tax situation? Speak with a financial advisor today.

When Are Social Security Benefits Taxable?

Generally, Social Security benefits are only taxable when your income reaches certain thresholds. Those thresholds vary, based on your tax filing status. The amount of your benefits that are taxable depends on both.

For Social Security to be tax-free, your annual combined income must be:

  • Below $25,000 if you’re a single filer
  • Below $32,000 if you’re married and file a joint tax return

The Social Security Administration considers combined income to be the total of your adjusted gross income, not counting Social Security income, tax-exempt interest and 50% of your Social Security income.

If your income is above the threshold specified for your filing status, there’s a second test that determines how much taxes you’ll pay on Social Security benefits. Specifically, you may be subject to one of two tax rates:

  • Up to 50% of your benefit is taxable if you’re a single filer with a combined income between $25,000 and $34,000
  • Up to 85% of your benefit is taxable if you’re a single filer with a combined income above $34,000
  • Up to 50% of your benefit is taxable if you’re married filing jointly with a combined income between $32,000 and $44,000
  • Up to 85% of your benefit is taxable if you’re married filing jointly with a combined income above $44,000

It’s worth noting that if you’re married but file separate returns, the Social Security Administration says you’ll most likely pay taxes on your benefits.

How Can I Avoid Paying Taxes on Social Security?

If you believe your income will put you over the threshold and require you to pay taxes on Social Security benefits, there are a few things you can do to potentially minimize what you owe. You may only have to worry about this, however, if your adjusted gross income would put you over the limit. Remember that for tax purposes, adjusted gross income (AGI), which is your gross income that accounts for certain deductions (which usually make it lower than your gross income), includes:

  • Wages earned from a job
  • Self-employment earnings
  • Interest earnings
  • Dividends
  • Required minimum distributions (RMD) from qualified retirement accounts, such as a 401(k) or traditional IRA

If you have any types of taxable income that would affect your AGI calculation, the first thing you could try and avoid taxes on Social Security is to contribute to tax-advantaged accounts. Specifically, that includes Roth accounts.

Roth IRAs and Roth 401(k) accounts allow for 100% tax-free distributions in retirement. A Roth IRA is also exempt from required minimum distributions starting at age 72. Withdrawals made in retirement from a Roth IRA wouldn’t affect your AGI calculations when determining which part of your Social Security benefits, if any, are taxable. If you already have a traditional 401(k) at work, you could use a Roth IRA to help offset some of your tax liability in retirement.

You could also consider a Roth IRA conversion if your assets are currently held in a traditional IRA. This allows you to essentially swap your current IRA for a Roth version, allowing you to tap into the benefit of tax-free withdrawals in retirement. But there’s a catch. You’ll owe income tax on any amounts you convert at the time the conversion happens.

Another option for minimizing Social Security taxes is to draw down taxable income as much as possible before taking benefits. Remember, the earliest age at which you can begin taking Social Security is 62. But if you have a 401(k) or IRA, you can begin taking money from those accounts without facing a tax penalty starting at age 59.5.

If you have money in a traditional 401(k) or traditional IRA, you may consider taking money out of those accounts before taking Social Security benefits. That way, you can pay the tax on those amounts and they won’t be factored in for AGI calculations since you’ll have already withdrawn them. You could then put the money into a taxable brokerage account so it can continue to be invested and grow over time.

While RMDs are unavoidable, barring a steep tax penalty, you can take steps to minimize what counts as income. For example, you can withdraw up to $100,000 from a traditional IRA and donate it to charity, with the withdrawn amount counting toward your RMD for the year.

You may also be able to defer RMDs and thus avoid paying tax on Social Security benefits using a qualified longevity annuity contract or QLAC. You can put up to $135,000 in IRA funds into a QLAC and defer taking required minimum distributions up to age 85. At the same time, the QLAC could make income payments back to you, though that can have its own tax implications.

Should You Avoid Paying Taxes on Social Security Benefits?

You might be focused on how to avoid paying taxes on Social Security but it’s important to consider whether you should.

For example, say your initial goal is to begin taking benefits at age 62 while continuing to work part-time. Doing so would mean having to keep a close eye on your income from part-time work to ensure that you don’t tip the threshold for having your benefits taxed. You’d also have to observe the annual earnings limits to avoid having your benefit amount reduced.

It’s worth noting also that taking Social Security prior to reaching your full retirement age would reduce your benefit amount. So, by working and receiving benefits early, you could effectively ding yourself financially three times over through benefit reductions and having to pay taxes on them.

When determining ways to avoid paying taxes on Social Security, it’s important to consider the bigger tax picture. That includes where withdrawals from both tax-advantaged retirement accounts and taxable brokerage accounts fit in. It’s also important to consider your timing when taking benefits. If you’re able to delay Social Security to age 70, for example, you could get 132% of your benefit amount.

Moving money from a taxable account, such as an IRA, to a brokerage account can also trigger problems. While your money can still be invested and grow, you’ll now be subject to capital gains tax on any profits you realize when selling investments. You could use tax-loss harvesting to offset gains with losses you may not escape taxes entirely. Talking to a financial advisor and/or a tax planning professional can help you decide which route to take as you approach Social Security benefits.

The Bottom Line

Social Security benefits are taxable for some, though not all, retirees. If you anticipate having to pay taxes on your benefits in retirement, the time to start planning for that eventuality is now. Just keep in mind that there are some reasons why you may not want to avoid paying taxes on Social Security benefits. By taking proactive measures to mold your financial plan, you can minimize your overall tax liability.

Tips on Taxes

  • Consider talking to a financial advisor about where Social Security benefits fit into your retirement income plans. If you don’t have a financial advisor yet, finding one doesn’t have to be difficult. SmartAsset’s financial advisor matching tool can help you connect with professional advisors in your local area. It takes just a few minutes to get your personalized advisor recommendations online. You can then decide which advisors you’d like to connect with. If you’re ready, get started now.
  • If you’re not retired or receiving benefits yet, you can use a Social Security calculator to estimate how much you might be eligible for. You could then use that number to create a plan for managing taxes on Social Security benefits.

Photo credit: ©iStock.com/BackyardProduction, ©iStock.com/Kriangsak Koopattanakij, ©iStock.com/Jorge Villalba

Rebecca Lake Rebecca Lake is a retirement, investing and estate planning expert who has been writing about personal finance for a decade. Her expertise in the finance niche also extends to home buying, credit cards, banking and small business. She’s worked directly with several major financial and insurance brands, including Citibank, Discover and AIG and her writing has appeared online at U.S. News and World Report, CreditCards.com and Investopedia. Rebecca is a graduate of the University of South Carolina and she also attended Charleston Southern University as a graduate student. Originally from central Virginia, she now lives on the North Carolina coast along with her two children.
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