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Whether you’re getting married, putting your teen behind the wheel for the first time, or buying your first home, a big life change can have a ripple effect on your finances.
While it might not be top of mind, one of those effects could be your car insurance. There’s a lot more that goes into calculating your rates than the standard questions about age, gender, and driving record. When you hit a major milestone in life, your new status can impact those rates in unexpected ways.
Here are five events that might trigger a change in your insurance.
1. Getting Married
Good news for honeymooners: in most cases, being married will lower your car insurance rates! Adding a partner to your insurance could spell savings for your household, especially for younger couples. It turns out that married people are less likely than single people to get into accidents. Ah, the perks of true love.
2. Buying a Home
One of the biggest milestones in life is buying your first home. While homeowners coverage is a must, becoming a homeowner might actually affect your car insurance, too.
Like married people, homeowners tend to see better rates on car insurance. Those savings could be even higher when you bundle your auto and homeowners policies with the same insurer (not to mention more convenient).
Buying a home also means that you might want to take a look at boosting your auto coverage. Look for polices that protect your assets and take care of legal costs-bodily injury, uninsured/underinsured motorist bodily injury and property damage are your best options. As you build up equity in your home, you’ll want to make sure your investment is safe, no matter what happens.
3. Adding a Teen Driver
As nervous as you may be to see your teenage child in the driver’s seat for the first time, you’ll feel better when they’re protected under your insurance policy.
Teen drivers need to be covered as soon as that driver’s license is in their hands. Your rates will probably increase, because this age group has much higher accident rates than older drivers, which makes them riskier to insure.
However, there are a few things you can do to help keep your rates low. For instance, when you add your teen to your policy, check to see if you qualify for a multi-driver discount. Likewise, if your teen has his or her own car, you could get the multi-car discount. Good students can help lighten the load as well. Many insurers offer discounts to young drivers who keep their grades up.
4. Getting Divorced
If you and your spouse are parting ways, it’s important to make sure both of you-and any dependents you might have-are still covered.
Once you’ve divvied up the cars, you and your ex will need to get separate policies. The change in circumstances makes this a good time to comparison shop, especially because you may be losing out on discounts you enjoyed as a married couple (for instance, a multi-car discount).
If you’ll be sharing custody of teen drivers, check with your insurance company to find out whether you both need to list your teen on your policy-and factor that into any quotes you get.
5. Getting a Raise
Now that you’ve got a little extra cash in your pocket (and perhaps some financial benefits, like stock), it’s time to take another look at your policy. Consider upping some of your coverages, like bodily injury and property damage, to make sure that if an accident happens, your income (and growing savings) will be protected. These policies cover medical bills as well as legal fees if someone involved decides to sue. Putting a little extra money toward your premium today can pay off big time down the road.
During a major life event, there’s a lot to think about. If you need help figuring out how to handle the big changes (insurance-wise, that is), talk to your insurer to make sure you’re adequately protected-and getting the best deal possible.
Eric Madia is Vice President of Product Design at Esurance, where he is responsible for designing the company’s personal lines products. Eric has 23 years of experience in the industry, focused primarily on underwriting, pricing, and product innovation. You can follow him on twitter @Erictheactuary.
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Looking for something a little bit spacey? Something that’s so far off the beaten path, it’s out-of-this-world cool? A dome home could be for you, as it conveys “rugged individualism” and “retro chic” all at the same time.
Architect, writer, inventor, and futurist Buckminster Fuller is credited with popularizing the geodesic dome home in the United States in the mid-1940s.
Since then, they’ve remained a source of fascination. The curved contraptions do have their advantages: The structure is self-supporting, and it is often less expensive to construct.
So for all you dreamers out there, here are five fabulous dome homes at prices ranging from $449,900 to $925,000, in all corners of the country. Take a look:
Price: $825,000 Luna Dome: This trilevel home is one of the larger ones we’ve seen, with four bedrooms and three baths in 4,560 square feet of living space. Its wide-open floor plan makes it seem even more spacious.
This particular specimen, called the Luna Dome, sits on a hilly, 5-acre lot, with spectacular mountain views from its numerous decks. It has a lower, walk-out level with a separate entrance; it could be an independent unit, featuring a living area, den, kitchenette, bedroom, and bath.
“This unique home has hosted people from all over the world and has proved to be a great investment opportunity,” states the listing.
It’s located about an hour’s drive from Denver and major ski resorts.
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Price: $499,900 Ready for liftoff: We’re willing to bet you’ve never seen anything like this fully shingled, flying saucer-style dome home. It’s built of custom-cut components delivered in special containers, including windows from Denmark.
The traditional front door welcomes you into the futuristic-looking lair. But the use of knotty pine accents and oak flooring brings this four-bedroom, five-bath design back down to Earth. The soaring cathedral ceilings certainly add a sense of awe.
The 5-acre lot includes a metal building with a covered porch, an office, and plenty of storage, which can sometimes be an issue with dome homes—there aren’t a lot of corners where you can place your stuff.
The property is zoned for horses and is covered with native plants, which offer a tax benefit.
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Price: $449,900 White House of the future: This special property doesn’t just have a wraparound porch—it also has a wraparound balcony and a wraparound driveway! That’s a lot of wrapping.
Built in 2013, this four-bedroom, 3.5-bath dwelling is equipped with solar panels, which provide energy for most of the home. There are even solar panels on the well that supplies water to the house and 4.5-acre property.
The lower level of this 2,900-square-foot abode appears to be a massive garage. It’s large enough for your cars, a couple of motorcycles, and a washer/dryer combo, or it could fit a skating rink.
The location is a relatively quick drive from Fayetteville, Huntsville, and Lynchburg.
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Price: $925,000 Double-domed home: Each dome home is unique, of course, but this one caught our eye with its red, barnlike exterior and colorful, Space Age meets prairie style interior.
The larger dome has an open floor plan and a main-level primary suite. Two bedrooms, a bath, and a beautiful cupola can be found on the second level. The smaller dome has a garage, workshop, and two additional bedroom suites with kitchenettes.
The 29-acre property has off-the-grid features like geothermal heating and solar panels. There’s also a pond, pastures, and woods. The location is about an hour from Roanoke.
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Price: $470,000 Geodesic classic: Based on the original works of Buckminster Fuller, this geodesic classic was built in 1995. The triangular skylights with wood frames accent the fact that you’re in someplace unique.
Set on 36 acres, the four-bedroom, two-bath, 2,782-square-foot home has an open floor plan. The kitchen is sleek, modern, and colorful. The ceramic tile floor is heated to keep you cozy and warm in the winter.
In the summer you can swim or fish in the nearby Neversink River. You can also enjoy the trails on your own property and those that wind through the adjacent nature conservatory.
The location is relatively close to the Pennsylvania state line and about 1.5 hours from New York City.
I spent a couple hours this morning performing what ought to have been a simple home-maintenance task. The light fixture on our front porch had gone faulty, and I needed to replace it. I’ve done enough wiring projects now that the electrical aspect of the job didn’t bother me. But the woodworking? That was frustrating.
As I fumbled with the jigsaw (“Drat! Another blade bent!”), I wished again that I practiced woodworking more often. I have several friends who do so, and the skills they’ve learned help them to save money around the house. My incompetence this morning gave me plenty of time to reflect on the value of productive hobbies.
Productive hobbies When I was younger, I spent most of my spare time reading comic books and playing video games. There’s nothing wrong with a little self-indulgence, but the older I get, the more I appreciate hobbies that provide practical skills. Productive pastimes are not only fulfilling, but they can also help save money. (Sometimes they can even generate a little income!)
Here are a few hobbies and pastimes that can help to save (or make) money:
Gardening. Kris and I aren’t yet finished with our year-long garden project, but already we know that it has saved us money. (Find out just how much when we post an update this Saturday.) Even if it did cost a little more, it’s fantastic to have fresh food just feet from the front door. You don’t need a lot of space to start a garden. Consider square-foot gardening or container gardening.
Photography. Cameras can be a money sink, but photography doesn’t have to be expensive. You can have a lot of fun with a cheap point-and-shoot digital camera. With practice, you may even be able to make money selling digital photos online. I know several people who do this (and I’ve done it myself).
Woodworking. Carpentry is another hobby that can consume a lot of cash. But if you have the space and the time, you can also develop skills that yield big dividends in the long run. If I’d taken the time to learn woodworking, I wouldn’t have to pay a contractor to do some of our remodeling projects. (And I wouldn’t have cut a four-inch hole this morning when I only needed a three-inch hole.)
Knitting. As with many hobbies, knitting can be expensive, but there are ways to make it less so. Nell at Octopus Knits has pattern companies and yarn folks giving her product (yarns & patterns) to try. Some of my friends have taken commissioned projects. Kris is learning to knit adorable little stuffed animals; she could sell them for $20 a pop.
Computer repair. Because I’ve always been a computer hobbyist, I’m able to troubleshoot computer problems instead of paying somebody to do it for me. Before I turned Mac, I also saved money by building my own machines. In fact, for a couple years, I supplemented my regular salary by helping friends and family with their computer problems.
Art. Last week, I pointed to the work of lillyella, whose art generates enough income through her Etsy store that she now does it full time. In the past, I’ve also mentioned Ayla, a teenager who sells her art glass at the local farmers market. Kris has a friend who is learning how to work with stained glass, but just for fun.
Cooking. My friend Laura has a group of friends that love to cook. They recently organized a cooking evening to provide freezer meals for each of them. They decided on six menus, assigned the shopping, borrowed a church’s kitchen, divided duties like cutting, slicing, dicing, mixing, frying, cleaning, split the costs and each went home with six different items for future use. But even learning to cook for your own family can save you a lot of money.
Baking. Baking is fun for its own sake, but it can also save you money with gifts. Who wouldn’t rather have a couple dozen home-baked cookies than another useless mug? Some people can even turn this skill into a career. My aunt turned a baking hobby into a business, creating cakes and catering weddings. She provided jobs for several other family members, too!
Canning. Though Kris has always enjoyed canning, this summer has been amazing. She’s discovered it’s a hobby she truly loves. She derives immense satisfaction from preserving her own food. “It’s comforting to walk into the pantry and know that I made all of this,” she said recently. “I know where the food came from, and I know that we’ll be eating it all winter.” Though the start-up costs are a little high, they repay a hobbyist in time.
Making music. My friend Michael has a musician friend who plays the piano and has been paid to play at private events. He has another friend with a great voice. This man loves to sing, and he and his friends hire themselves out as a quartet around Valentines Day and to sing Christmas carols during the holidays. (I’m always jealous of my musical friends. I know it’s hard work to become proficient, but it looks like such a fun way to stay entertained.)
Vehicle maintenance. I know little about cars. I wish I knew more. Knowing even basic vehicle maintenance can save you big bucks. I once knew a guy who performed nearly all his own auto work. He could buy a junker car, fix it up, and resell it at a nice profit. He wasn’t going to get rich doing this, but he enjoyed the hobby, and it kept him in money for his own vehicle.
Physical fitness. You’ll never get rich running road races, but there’s no question that a healthy body can save you money. Find a physical activity you enjoy: biking, running, hiking, dancing, yoga, weightlifting. Play a team sport. Regular exercise can be fun, but it will also save you money in the long run.
The possibilities are limitless. There are countless fun and interesting hobbies that can either save you money, or maybe help you earn a little on the side.
Quick tips You’ll notice that none of these hobbies involve collecting. I’m an inveterate collector myself (comics, books, notebooks, movie serials, music of the 1920s, …), so I know first-hand how expensive it can be. Some would argue that it’s a form of compulsive spending, and I can’t really disagree. Since I’ve begun focusing on hobbies that involve doing rather than getting, I’ve spent much less money.
For some hobbies, equipment can be prohibitively expensive. In these cases, you may be able to find used stuff on Freecycle or Craigslist, or you may be able to begin with low-end gear. (This isn’t always a good option. If you think you’re going to be doing a lot of running, you should buy a quality running shoe from an expert, and not settle for cheap sneakers, for example.)
In many cases, it’s possible to jump-start a hobby by taking a course at a community college or community school. I spent a year taking photography classes, for example. The instruction and experience were invaluable, and helped me develop the skills necessary to actually sell a couple photos.
My friend Michael likes woodworking but can’t afford (and doesn’t have space for) all of the equipment. When he needs to build something, he signs up for a community college woodworking course so that he can use industrial woodworking tools at a reasonable cost.
Further reading I’m a big fan of productive hobbies, and I’m not the only one! Here are some articles on the subject from around the web:
Don’t forget that hobbies are an excellent way to make gifts for less than it costs to buy them. Kris sometimes knits gifts for special occasions. Most years she gives some sort of home-made food to our friends for Christmas. I sometimes give photographs. One of the best birthday gifts I ever received was a batch of homemade chocolate chip cookies.
I had recently returned from Iraq and my wife and I were hunting for a couch for our new home.
We found one that was on sale we both thought it was perfect. .medrectangle-4-multi-638border:none !important;display:block !important;float:none !important;line-height:0px;margin-bottom:15px !important;margin-left:auto !important;margin-right:auto !important;margin-top:15px !important;max-width:100% !important;min-height:250px;min-width:250px;padding:0;text-align:center !important;
Okay, it was a red couch and she thought it was perfect. I, personally, didn’t understand why anyone would buy a red couch but apparently I didn’t understand home decor. Nonetheless, the wife’s vote trumped mine.
When the sales clerk asked how we wanted to pay suggesting we take advantage of their great in-store financing, an exciting thought ran through me – “we can pay cash”.
A year prior, that wouldn’t have been an option. Not even close!
But now we found ourselves in a very exciting position; we were financially stable.
I can’t say that I 100% believed we were financially stable at that point in our lives, but it definitely was a turning point for us. Not only could we pay cash, but we also had money left over.
People often spend most of their lives chasing financial stability. But is it possible that you may already be financially stable?
Here are 27 signs that you’re financially stable – already! And if you’re not, you can start working to make a lot of these a reality in your life.
1. You Never Overdraw Your Checking Account
Even if you have overdraft protection with your checking account, you still prefer to keep a cushion in your account, rather than relying on the protection. And you absolutely, positively, never bounce a check!
Part of it has to do with your aversion to paying overdraft fees. But mostly, it’s because you have a sufficient amount of money that you can keep more in your checking account then you need in a typical month.
2. You Don’t Lose Sleep Over Finances
When you go to sleep at night, you tend to sleep deeply and peacefully. And if anything does keep you awake, it’s usually not related to financial matters.
This is a non-financial benefit that people who are financially stable have as a result of their strong financial position. This isn’t to say that you don’t have any money worries at all, but rather that they are not significant, and never without some sort of reasonable solution.
3. You Use Credit Cards for Convenience and Rewards – But Never Out of Necessity
I currently have 4 credit cards in my wallet and use them almost every day. <gasp!>
How could you, Jeff? You’re a Certified Financial Planner!
Yes, I am, but here’s the catch: I pay them off every month. As a bonus, we have carefully selected credit cards that collect reward points which we use for airlines miles. Boo-yah!
Many people who are not financially stable have a bad habit of using credit cards as a way to extend their paychecks – to buy the things that they really can’t afford.
That’s not an issue in your life!
If you do use a credit card, it will strictly be for convenience, such as being able to make a fast payment online. Or you will do it because your credit card company provides you with rewards for making purchases.
4. You Don’t Worry About Losing Your Job
This is one of the very best indicators that you are financially stable. It’s a sad state of affairs that the vast majority of people in the US live from paycheck to paycheck. The thought of losing their job, even for a month or two, would be a financial disaster.
Since your finances are in balance, losing your job isn’t something that you worry about, at least not the potential for ruining your finances.
5. You’re Never Late With Payments
This is partly because you always have plenty of money to pay your bills, but also because of your preference for being ahead of your finances, rather than behind. This is also a big reason why you don’t lose sleep over your finances. When you go to bed at night, you know that your bills are paid, and all is right in the world.
6. You Pay Your Bills Ahead of Time
Part of the reason why you’re never late with payments is that you pay your bills ahead of time. In fact, you probably pay them as soon as they come in. You do this because you don’t like bills to linger – and simply don’t like owing anybody anything.
7. People Ask Your Opinion About Financial Matters
One of the biggest outward signs that you are financially stable is when people ask your opinion about financial matters. They’ll do this because they see you as being someone who has “figured it out”, at least when it comes to money.
When this happens, take it as a supreme compliment. It means that your financial stability is so obvious that others can see it, and will ask your opinion as to how to achieve it.
8. You’re Generally Happy With Your Financial Situation
This doesn’t mean that your financial situation is completely perfect, but rather that your finances are in balance, and you are satisfied with the direction that things are heading. Even if you have financial challenges over the horizon, you have some sort of plan set up to deal with it before it comes. That’s all anyone can do – and you’ve already got it covered.
9. You Have No Ugly Credit Card Balances
It’s not at all unusual for people who have high incomes and a large number of financial assets to also carry great big, ugly credit card balances. That’s not a game that you play. You absolutely refuse to carry credit card balances that can’t be paid off relatively quickly. And that keeps you from paying high-interest rates, and from losing sleep at night.
10. You Finance Your Cars Over Five Years or Less – If You Take Loans at All
Even though there are car loans available as far out as seven years, you keep your car loans to five years or less. Or you pay cash for your cars, or you pay them off ahead of schedule.
That means that you won’t live your life carrying a perpetual car loan payment. That also means that when you buy a new car, it’s very likely that you’ll be making a larger than average down payment on it – which is why you take shorter loans in the first place.
11. You Contribute a Double-Digit Percentage of Your Pay To Retirement
Many, many people contribute nothing more than the minimum percentage that they need in order to get the maximum employer match on their retirement contributions.
But that’s not a game that you play.
You recognize the importance of aggressive retirement investing as a critical part of becoming financially stable. You either make the maximum retirement contribution that you’re allowed, or your contribution is well into double digits percentages.
And because you do, early retirement is actually a legitimate consideration in your life.
Investing and feeling good about it has never been easier with great online brokerage tools such as Betterment. Learn more about how to use Betterment on our review page.
12. You Don’t Feel Guilty When You’re Out For Special Occasions
Everybody has episodes where they spend a little bit too much money. This can happen on special occasions, such as birthdays, holidays, vacations, and other celebrations. But for you, these events are not budget busters. You have enough flexibility built into your budget that you can accommodate the occasional spending spree without having too much month at the end of your paycheck.
13. You Can Afford to Buy the Things You Really Want
If you really want something, you go out and buy it. Your finances are strong enough to enable you to get those things that you really want.
This isn’t at all about impulse spending on an ongoing basis, but rather about having enough room in your budget to get the things that you really want. In that way, money doesn’t rule you.
14. Recreational Spending Doesn’t Appeal to You
There are all kinds of coping devices in life, bad habits like hard drinking, drug use, and overeating. For some people, the vice is recreational shopping. Spending money enables them to lose themselves – and their troubles – at least for a time. And often, recreational spending is a way of rebelling against their impaired financial situation.
That’s not something that you engage in, nor do you ever feel the need to do so. You’re happy with your finances in general, and you don’t need to spend money to feel good about yourself.
15. You’re a Natural Saver
This is one of the key habits in becoming financially stable – and it’s one that you mastered a long time ago. You’ve been doing it so long and so well, that you are virtually a natural saver. You can do it with a sense of purpose, and without ever feeling any pangs of self-denial.
16. You’re Generous With Money When it Comes to Charities or Helping Others
You have certain charities that you support on a regular basis, and you’re generous with the people around you who are in need. You’re able to do this because you never sense that giving money to others in need will in any way negatively impact your financial position. You give with ease, and you feel good about it.
17. You’re Confident About Your Future
This is one of the best indications that you are financially stable. Your finances are sufficiently under control, that you feel confident about your future. This is because you’re easily able to live on what you earn, you have substantial financial assets that you’re adding to on a regular basis, and you carry little, if any, non-housing debt.
The future tends to be kind to people in that situation – and that’s where your confidence comes from.
18. Your Net Worth Grows Significantly From Year to Year
Your net worth tends to grow each year and to do so by fairly large amounts. This isn’t about doubling your money each year, but rather about achieving fairly consistent increases in your net worth. Those increases come from a combination of adding to your investments through regular contributions, and through solid investment returns.
19. You Have Substantial Equity in Your Home
Another of the major markers of being financially stable is that you have a large amount of equity in your home. This is either because you made a large down payment on the home when you bought it, or because you’re paying extra principal on your monthly payment as a way to accelerate the payoff of the mortgage. It may even be a combination of both.
That large equity means that you don’t worry about falling property values, at least not the way people in low- or no-equity situations do.
20. You Consistently Live Beneath Your Means
You consistently live beneath your means because you are well aware of the fact that all the things that make someone financially stable start with having extra room in your budget for savings, investments, or paying off debt.
This isn’t a struggle for you either, but something that makes sense and comes easily to you.
21. A Large Pay Cut Wouldn’t Destroy Your Life
Yet another of the benefits of being able to live beneath your means is that the prospect of taking a large pay cut wouldn’t destroy your life. Because you are already living on less than you earn, taking a pay cut at work, or transferring to a lower paying position, won’t represent a mortal blow to your existence. You’ll find a way to live beneath your means, whatever those means are.
22. The Cost of Sending Your Kids to College Doesn’t Scare You
You’re looking forward to your kids going to college. You’re well aware that the cost is outrageous, but you’re making plans so that you’ll be prepared when the time comes.
This can be a combination of specifically saving money for each child through a college savings plan, streamlining your own finances so that you’ll be able to pay a large chunk out of your income, or working to help your children get scholarships that will contribute toward the cost.
23. You’re Totally Unconcerned With Keeping Up With the Joneses
In your world, being financially stable is its own reward. You have no need to acquire the trappings of the good life that others around you are working so hard to attain.
That keeps you from spending money that you don’t have and going into debt. And that leaves you more money for savings and investments, which increase your financial stability even more. No toys and trophies are needed!
24. You Give 100% on the Job – Financial Concerns Don’t Distract You
Just as you sleep like a baby because you are unconcerned with financial troubles, you’re able to give 100% on your job. You aren’t weighed down by the emotional troubles of having unpaid bills or out-sized debts to pay. And because you can live on less than you make, you don’t waste time feeling sorry for yourself because you’re not making enough money to pay your bills.
That frees you up to do the job that needs to be done, makes it more likely that you will get the bigger raises, and the promotions when they come around.
25. You Pay Your Credit Cards in Full Each Month
Since you don’t use credit cards as an extension of your paycheck, you simply pay the balance in full each month as the bill comes in. There are no lingering debts in your life and none of the worries that are attached to them. Every month, you have a clean slate going into the next month. See #3 again. 🙂
26. You Could Survive For Months Without a Paycheck
You have sufficient liquid savings that you can live for months without a paycheck if you have to. You won’t need to tap long-term savings, like retirement plans either. And bankruptcy won’t be even a remote consideration since you have very little debt.
The fact that you can live without a paycheck for an extended period of time even makes it easier to do your job. You can work without concerning yourself with the threat of layoff, or being fired. And you never feel trapped by your job.
This is one of those circumstances were being financially stable feels so good!
27. You Feel In Control of Your Finances – Never Dominated by Them
Overall, you have a strong sense that you are in control of your finances. This means that when it comes to money, you have choices. And since money creates options in life, you have more than the average person.
This is what being financially stable is all about, and what the ultimate goal of it should be. Being able to do what you want, when you want, and on your own terms.
This is a long list, and if you’re not feeling some of these right now, you can work to get yourself into a position where you will. It’ll take a bit of effort, but that effort will be sooo worth it!
Save more, spend smarter, and make your money go further
Self-driving vehicles are coming much sooner than expected — and the general consensus is that car ownership will bid us farewell. After all, with a dominant ride-sharing model in place, upfront purchase prices and ongoing maintenance costs seem less appealing. On top of that is the surging trend around “access vs. ownership,” where the car-owning value proposition is taking some real hits.
In the future, getting around will be much easier and cheaper, and the hassle of owning a vehicle may quickly outweigh the benefits. What’s more, as driverless taxies become ubiquitous and accrue revenue 24/7, their prices will only drop.
A report published last year by RethinkX, an independent think tank based in San Francisco, estimates fully autonomous vehicles will make up 95 percent of passenger miles in the U.S. within a decade of the anticipated 2020 rollout. The study says that cars will be owned by companies like Lyft and Uber rather than individuals. This firm estimates the windfall of savings to be around $1 trillion for Americans each year. That’s about $5,600 per household, “generating the largest infusion of consumer spending in history.” What’s more, that figure only accounts for improvements in general overhead costs and doesn’t factor productivity increases and reduction losses due to traffic accidents. Talk about a bang for your buck.å
Researchers at consulting firm KPMG similarly predict that by 2030, households will no longer need sedans — only keeping larger vehicle models for road trips — and that fully autonomous vehicles will be used as ride-hailing services from the outset. Anticipating the upended car market, Waymo and General Motors’ already have pilot ride-hailing programs in the works, set to launch in select urban and suburban areas. Likewise, Ford bought out their ridesharing company, Chariot, as part of their self-driving vehicle initiative. Further, public officials in Helsinki are pushing to make car ownership obsolete by 2025.
Don’t believe how big a business this is? Just look at the rift between Google and Uber — and the nose-bleeding $245 million settlement over alleged “trade secrets” in 2016. Autonomous cars are big business…and all the tech firms want in.
But while logically sound, these forecasts focus heavily on the economic disruption caused by full automation, not so much the cultural implications. For instance, few consumer goods have profoundly molded our cultural ethos as much as the automobile, and the majority of Americans are still wary of self-driving cars — not to mention a slew of other important factors.
How Is Safe Safe Enough?
Critical to the success of automation is proving that it’s safe. Although researchers say it’ll reduce auto accidents by a whopping 90 percent, “better than human” might be a weak benchmark when you consider that people have a greater tolerance for deaths caused by humans than robots. For this reason, Mobileye CEO Amnon Shashua proposed a formula to ensure self-driving vehicles are virtually infallible — in effect, laying the groundwork for how policymakers and manufacturers can manage the deployment of wholesale driverless cars without constricting innovation.
The Home Away From Home
Considering many of us like to keep personal belongings in our car, the allure of the private car could hold sway for a lot of people — especially commuters who can get a jump-start on work without having to watch the road. It’s not so implausible that consumers are willing to pay extra for the flexibility of being able to travel when, where and with whom they want — without compromise. An article published by Yale points out that while ride-sharing has soared in popularity, it hasn’t directly dissuaded people from buying cars for this very reason.
The “shared autonomous” firms of the future would do well to ensure that they can “user integrate” consumer preferences whenever they pick up a new rider. Making the autonomous vehicle feel “owned” is a great way to bridge this gap, and it can be as simple as a Bluetooth integration and content sync.
What If You’re Too Far Away?
Waymo and General Motors are set to test their pilot programs in select urban and suburban areas. After all, 81 percent of America’s population lives in areas that are dubbed “urban or suburban.” But what about rural settings, or even remote suburbs? A driverless cab might arrive in just minutes in a densely populated area, but it might not be as readily accessible for those living in areas where houses can be miles apart. The automobile has made it easier for people to live on the outskirts, enabling folks to leave at the drop of a hat. Those living in rural outposts may not be keen on relinquishing that level of control, even when driverless cabs are ubiquitous in cities.
Suburban Sprawl and Environmental Strain
On the other hand, more people might be apt to live in remote locales if a robot can schlep them to work every day. That could mean more emigration to rural areas and thus higher demand for driverless cars. But a policy brief from UC Davis warns that without proper oversite, self-driving technology could increase suburban sprawl, which was already spurred by the invention of the automobile.
This is especially true in places like California, where sprawl is a huge point of contention among developers and public officials. The policy brief reasons that if passengers can work or rest more during their commute, then they’ll likely be willing to travel further. As a result, affordable housing developments will be on the rise. That’s a win for housing, but a loss for a decreased eco-footprint.
Drivers Licenses on the Decline
In fairness, there’s another cultural phenomenon that ought to be called out: Since 1983, fewer and fewer people have been getting their drivers licenses. To understand why this is happening, the Transportation Research Institute at the University of Michigan conducted a survey of 618 respondents, ages 18 to 39. They found the three main reasons people forewent getting their driver’s licenses were busy schedules, the cost of owning and maintaining a car, and the ability to get rides easily from others.
Looking to the Future
It’s important to note that predictions, however researched, shouldn’t be confused with conclusions. The one thing we can say for sure, however, is that the culture of tomorrow’s automobile won’t be a carbon copy of what it is today.
Haden Kirkpatrick is the head of marketing strategy and innovation at Esurance, where he is responsible for all initiatives related to product and service innovation. Haden is an innovator writes about how smart technology—from IoT to machine learning to self-driving cars — will impact the insurance industry. To view Esurance’s car insurance options, click here.
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Move Like a Minimalist: How to Avoid New Nest Syndrome
Let’s face it. Here in America, a car is not a luxury, it’s a basic necessity. With our wide-reaching cities and the harried schedule of our modern lives, the comfort, flexibility and privacy offered by the modern automobile is both an essential part of life, and a little slice of heavenly peace to brighten each day.
As a teenager, you fell in love with your first taste of four-wheeled freedom. As you moved through college and adulthood, you surely upgraded to models a little more befitting of your status. So now here you are in your late 20s, with a blossoming career and car to go with it. Whether it’s an Audi or BMW, Lexus or Infiniti, your ride tells the world who you are: your taste, your status, and your individuality.
Until that magic moment when all of this flies out the window: you have a baby on the way!
Suddenly, there’s more to be concerned about that simply style and performance. You’ll need to accommodate car seats, soccer balls, and strollers. You’ll need to load shopping bags from the mall into the back with a wriggling child or two in each arm. Family life means driving on snow and dirt, and hauling your trailers and toys. And above all, you’ll need the safest vehicle to protect your new precious cargo. This means 4-wheel-drive and superior crash protection.
In short, if the diagnosis is pregnancy, the prescription is SUV.
Luckily we’re on the job for you here at Mr. Money Mustache. I collected the best SUVs on the American market and compared them side-by-side to pick a winner.
2014 Toyota Sequoia Platinum
With seating for 8, the $60,795 Sequoia does it all. Featuring a fully boxed load frame, a responsive 381 horsepower 5.7L V-8 engine, and a 5750lb curb weight, this family hauler is nimble, capable, and luxurious. With fuel economy of 13MPG around town and as high as 18MPG on the highway, it can help your family’s dollar stretch just a bit further, and who doesn’t need that these days?
2014 Ford Expedition Limited EL
Sure, it’s big, and it’s fast, with specs rivaling the Sequoia at the budget friendly price of $51,695. But what really sets the Expedition apart is the perforated heated and cooled front leather seats! What could be a better respite from a pounding day of errands than a cushion of climate-controlled air that soothes you back to sanity? Fuel efficiency is just as good at 13/18 for the 4WD model. Also sold as the Lincoln Navigator, with an even more distinctive selection of luxury appointments.
2014 Chevrolet Suburban LTZ
It’s everything you’ve come to expect from a large SUV and so much more. High intensity headlamps and foglamps, Front Park Assist, 12-way seats, Side Blind Zone Alert with Lane Change Assist, all powered by an EcoTec 5.3L V-8 with the ability to tow 8,000 pounds. Eco-Tec means you’re actually helping the environment as you cruise your way through each 33.5 gallon (126 litre) tank of fuel! But if all that tech-talk makes your eyes glaze over, let’s just put it this way: A very sweet ride that will be the envy of your block, with 16 cupholders for only $62,595! Also sold as the Cadillac Escalade with a more prestigious front grille for only a few thousand more.
2014 BMW X5 50i
For those with smaller families and a higher demand for performance, the venerable X5 may fit the bill. Featuring a 4.4 liter twin turbo V-8 that pours 450 horsepower into this SUV’s lightweight 4950 pound figure, the X5 will scream from 0-60 in about five seconds, smoking all four of its 19″ performance tires in the process. But with heated leather seating for 7 and available personal video screens for each passenger, your lucky children might not even notice what you’re up to.
Starting at under $70,000 with the Mocha Interior Design Package and the Executive Package, the X5 gets my personal vote for the best vehicle to prepare for baby. If cash is a little tight, BMW’s financing and lease packages can have one of these safe and roomy vehicles in your driveway for as little as $789 per month.
Although having your first baby is a challenging experience that will require many costly purchases, I hope I’ve at least helped with the most critical decision of all: what to drive.*
*Oh, and happy April Fool’s Day. The best family vehicle is a pair of bikes for the parents, each pulling a bike trailer. Second choice is a good small car (you can get kid seats that fit 3-across even in compact cars). And if you REALLY need something to carry a lot of people, get yourself a 2007 Mazda5 with a 4-cylinder engine and a 5-speed manual transmission. It comfortably carries 6 adults (tested it myself), burns a reasonable amount of gas, and is not a gigantic Douchewagon that will get you punched in the face by passing Mustachians. Just don’t buy one and then use the damned thing for single-person commuting!
Patios provide more than additional square footage to your home. They also enhance the design of any house and add to the curb appeal, meaning any improvement you make can turn out to be a good investment later on, when you decide to sell.
When you look around Phoenix, Arizona, you will see a lot of patio covers, gazebos, and porches.Sure, they look good but they serve a much more important purpose. With the sun bearing down on the city 85% of the time in an average year, there’s a dire need for additional protection from the searing heat.
When you think about it, Phoenix is the perfect spot to harness the power of the sun. After all, it is listed as one of the sunniest cities in America. Locals get 3,800 to 4,000 hours of sunlight per year, so why not try to capture that?
Particularly since homeowners can also get incentives when they go for alternative power sources other than the traditional fossil fuels.
Often, the glass panels get installed on the roof where the sunlight hits them directly. Sometimes, you can also see them on the ground with unique mounts that allow the panels to follow the sun’s movement throughout the day.
Solar panels in the patio: Best of both worlds
While most solar mounts you’ll see are set on the roof of the house, not every structure is ideal for supporting their weight, which makes the patio a great alternative.
Converting your patio into a mount for solar panels gives homeowners both additional shade and a great alternative source of power. Over the years, installers have introduced innovative ways to install the panels on smaller scales on Phoenix homes. You have solar trees, solar cars, and ground solar.
But patio manufacturers give an additional platform for suppliers to install solar power on homes. Unlike with ground solar, patios do not require supplementary land.
If you are planning to build a patio on your property, you can hit two birds with one stone by also adding solar panels on the roof.
One option is to use the panels for your main roof instead of a solid cover or a pergola. The main advantage of this option is that you maximize the solar footprint. The drawback, however, is that it does not supply maximum protection from the sun.
If you already have a patio attached to your home, you may need to contact a service provider such as City Seamless Patio Covers, to check the durability of the columns and beams and confirm that they can support the additional weight of solar panels. This is a crucial step in the process, and the good news is that it’s a relatively easy fix to reinforce the posts if they’re not sturdy enough.
If you own a small restaurant or cafe, patios give you that extra footprint to expand your indoor space. As a result, you can add more tables and chairs for your customers. Businesses spend about $2 for every square foot of space.If you have 1,000 square feet of business space, including your patio, you are looking at $2,000 per month. One innovative way to cut your overhead costs is to go solar.
Imagine how much you would save if you could reduce your utility bills down to zero? You can use solar energy to heat your water or to power your heat, ventilation, and air conditioning system. If you store enough energy, you can send it back to the grid for extra credits.
And your smart home can also be powered by the energy you store from the solar panels. The average homeowner in Arizona, for instance, pays about $120 per month on electricity bills. You can reduce that to zero with the help of your photovoltaic panels.
More tips for homeowners
Why is wicker used for outdoor furniture?What’s the difference between faux leather and real leather sofas?How To Set Up a Killer Smoking Room at Home The Kid-Friendly Home: Creating A Safe Haven For Your Little Explorers
They lived in a modest 1,800 square foot home. They both drove Buick’s that were both completely paid off.
He retired from a manufacturing plant and she a grade school as an English teacher.
Despite their simple ways, they were both millionaires and were one of the first clients I landed as a financial advisor.
So what was the secret sauce? Did he buy Apple stock a few decades ago? Was it some crazy pension buy out? A salty family inheritance?
How about none of the above.
When I asked the husband what their secret was he shared the story about how every time he received his paycheck he would ALWAYS take a portion and purchase savings bonds (Remember: this was long before 401k plans).
That simple routine, which became a good flippin’ amazing financial habit, was the catalyst for them becoming millionaires.
It doesn’t matter if your goal is to become debt free, increase your savings, or become millionaires; all off them require you have good financial habits.
Everybody wants to be financially stable, but unless you have plan to get you there, it’s not going to happen.
Here are 27 that will enable you to set (and reach) your financial goals.
1. Live Within Your Means
This strategy is the foundation of all good financial habits. In fact, I’m not exaggerating when I say there will be no point in setting good financial goals until and unless you come to the point where you can live beneath your means.
Seriously.
There’s nothing complicated or strategic about this habit. If you take home $5,000 each month, you live on $4,500 – and bank the rest. As your savings and investments grow, your financial situation will improve dramatically.
2. Pay Yourself, You Deserve It
If you’re having trouble with the whole concept of living beneath your means, it’s time to pay yourself first. If you have a 401k (or some other employer retirement account) this is a simple way to automate the process of saving money. Allocate a certain percentage, or even a certain dollar amount, to come out of your pay each pay period, before you even see it.
Without you even noticing it, the money is transferred to savings and investment accounts, and turns into real money as the years pass. If you don’t have an employer sponsored plan like a 401k, see #17.
3. Give Yourself a Consistent Raise
Good financial goals are more easily achieved if you can build progress into your savings and investment funding. You can do this gradually by increasing your payroll savings once each year.
You can do this almost painlessly by increasing the savings payroll deduction – whether it is for retirement or some other savings or investment account – by increasing your deduction by one percentage point per year.
Let’s say you are participating in your company’s 401(k) plan with 6% of your pay in order to take advantage of the company‘s 50% matching contribution. In the coming year, increase your contribution to 7%. Plan on doing that each year, until you meet the maximum contribution you’re allowed to make.
While this is a great start, the reality is you need to save at least 20% of your income if you have any hope of retiring early (or at all). If you want to get super ambitious and retire at 30, you can take a page out this guy’s playbook and save over 50%.
When I encounter someone only saving around 5% I challenge to increase it by 1% each quarter until they reach at least 10%. From there adjust I have them adjust accordingly so they barely feel the extra amount deducted from their paycheck.
4. Buy Value
By “buy value,” I mean you neither by the cheapest goods, nor the most expensive. Instead, you look to buy the best value for the money. Sometimes it’s worth it to cough up a little extra dough for a product you know will last, rather than paying bottom-dollar for shoddy merchandise you’ll have to constantly replace.
On the flip side, keep in mind not all products are better simply because they’re more expensive – often they’re just more expensive because of perception. Read reviews and shop around.
5. If You Have to Borrow, You Can’t Afford It
Credit is an awesome thing when you’re buying something big, like a house or a car. Very few people have $150K sitting around in cash to buy a home, so for those things, borrowing makes sense. But adopting good financial habits means avoiding schemes to stretch your paycheck. Credit cards are probably the most common way to do this.
6. Pay Your Bills Ahead of Time
Paying bills late is another strategy to stretch the paycheck. But it’s also kind of like robbing Peter to pay Paul. All it does is give you a false sense of how much money you have, and then puts you under tremendous pressure to cover the difference later. By paying your bills ahead of time, you will gain more control over your finances, and that will make it easier to adopt good financial habits.
My wife is the queen at this! Instead of waiting until she receives our credit card bill, she logs into our accounts and pays it off in the middle of the month. There’s no way she’s allowing any interest to accrue!
7. Read One Financial Book Each Year
If you want to become financially stable, you’ll have to seek advice from the financial masters. Easy to do, since nearly every one of them has at least one book available.
Take advantage of that knowledge. If you only get three or four bankable ideas from reading a single book, think about how many you’ll get from reading a dozen or more.
Some of the personal finance books that I’ve enjoyed over the years include: Dave Ramsey’s Total Money Makeover, David Bach’s Smart The Automatic Millionaire, Ramit Sethi’s I Will Teach You to Be Rich. And…well there is of course the book on the left:
Shameless plug: My book, Soldier of Finance, can be purchased here.
8. Track Your Spending
If you don’t have a budget, then you probably don’t have even a remote idea where all of your money is going. This is one of those good financial habits you absolutely must adopt you if want to get control of your finances.
By tracking your spending, you will be able to identify the areas of excess. Eating out for 50% of your meals? Cut that back to even 25% and cook or brown bag the rest, and you’ll have a nice chunk of change to contribute to paying down debt or building up your savings.
Start tracking your spending now – you may be surprised to find where your money is actually going.
9. Spend Less Time Watching TV
Don’t think watching TV has anything to do with becoming financially stable? Guess what? TV is nothing but a giant advertising venue, and I’m not just talking about the commercials. Even TV shows advertise certain wares through a little thing called product placement.
It’s a place where “sponsors” come to peddle their wares, and often, to make you feel insecure because you’re not buying what they’re selling.
Much of our spending, especially impulse spending, is driven by time spent in front of the TV. The less time you spend watching it – and the ads it bombards you with – the less money you’ll feel compelled to spend on things you don’t need.
Plus, by watching less TV you can read more books!
10. Balance Your Checkbook Regularly
With online banking, it’s easy to ignore this step. After all, the balance is available to be checked every day. But the balance does not reflect upcoming charges or outstanding checks. If you aren’t fully aware of these, it could lead to an undersized balance, or even bounced check fees. No bueno.
Balancing your checkbook helps you to avoid these pitfalls, so you know exactly how much cash you have at all times.
11. Shop Without Your Credit Cards
Not only will this keep you from running up your credit card balances, but if you have to use cash or your debit card to make your purchases, there’s a very good chance you will spend less money than you would if you are shopping with a credit card, because you can’t just pay it off later.
It’s real money, being used right now, which helps you make a wiser decision in the checkout line.
12. Pay More Than the Minimum on Your Credit Cards
And speaking of credit cards, if you want to become financially stable, you will need to get rid of those balances. If you haven’t been successful in paying off your credit cards in the past, then you should commit to paying more than the minimum payment due.
On top of paying more than a minimum, you should consider consolidating your credit card debt under a single 0% balance transfer card. Once you do this all those high interest cards will be under a since zero interest card saving you money.
This will speed up the payoff of your credit cards without having to come up with huge sums of money to do it. You will simply be accelerating the payoff, and if you pay enough, it will happen more quickly than you think.
Pay attention to your credit card statements. They will often tell you how long it will take to pay off your balance if you only pay the minimum payment, and how long it will take if you pay a fixed amount slightly higher than the minimum payment. Most of the time, there’s a difference of several years.
Yes, I said years.
13. Dust Off That Business Idea You’ve Been Putting Off
Do you have a business idea you have been putting off for quite awhile? You may want to give it a serious try. The internet has made starting and running a business easier and less expensive than ever. Case in point example is my buddy, Steve Chou, who was able to replace his wife’s $100k income by launching an online store.
Another example closer to home is my wife’s blog. She was able to replace her full-time income from her corporate job after starting her blog in about a year.
Best of all, you can run a side business for as long as you like, and that can provide you with an extra source of income. It’s important to set good financial goals, but you also have to carry them through. Starting a business is one way to do that – even if you only do it on a part-time basis
14. Learn to Say “No” to Yourself
This is important when you are shopping, or just out and about. This is really about getting control of impulse buying. You’re out somewhere, and you see some item you like, and you buy it because it doesn’t cost that much. Even worse is the ability to purchase things online nowadays and have it delivered to your doorstep in just a few days. If you do that several times a week, the spending can really add up.
Making just 20 impulse purchases (or fancy coffees) per month at an average of “only” $5, adds up to $100 spent on stuff you really don’t need. That’s $100 which isn’t going into savings or investments, or to paying down debt.
One trick is to enforce a “72 Hour Rule” on any purchases, especially online items. If you really think you need to buy <fill in the blank>, after you add it to your cart make yourself wait 72 hours before you purchase it. After 3 days you should get a good feel whether you really need the item or if you just want it (and don’t need it at all).
15. Learn to Say “No” to Your Kids
If you have children, learning to say “no” to them is doubly important. First, kids being kids, they always want something. And that something tends to get more expensive as they get older. You can save a lot of money by learning to say “no” to the random things they see and decide they can’t live without.
Keep in mind, I’m not telling you not to give your kids birthday or Christmas gifts, or things they truly need. Rather, it’s about their own impulse buying – seeing something and wanting it – but instead, they’re using your money. Telling them “no” will keep more money in your pocket.
But the second issue is even more important.
How you spend money, and particularly how you spend it on your children, has important implications for the attitude they will have toward money when they grow up. Though saying “no” isn’t always easy, it’s a way of teaching an important financial lesson. It teaches your kids they can’t have all the candy in the store, and that’s something they need to grasp in preparation for adult life.
16. Buy Term and Invest the Difference
Everyone needs life insurance, but everyone complains about how expensive it is to buy it.
There is a better way.
Buy term life insurance. Because it costs only a fraction of what whole life costs, you not only save money on the premiums, but you can buy more coverage. And that money you save on the premiums can be invested to build a large investment for the future, which by itself is its own form of insurance.
17. Start a Retirement Savings Plan
Good financial habits can be elusive if you don’t have a retirement savings plan of any kind. But if you don’t have a plan through your employer, there are plenty of options. You can open up a self-directed traditional IRA or a Roth IRA through tons of different platforms. Either will provide the type of income tax deferral that is the essential to building a healthy nest egg for retirement.
If you don’t have a retirement savings plan, what are you waiting for? Set one up today, and start funding it with any money you have available.
Seriously. It’s better to start contributing a little bit now than to wait until you can contribute a lot. You can even fund it through payroll savings deductions through your employer. Our top choice is Ally Invest with the rest of best options for IRA’s here.
18. Refresh Your Emergency Fund on a Regular Basis
There’s a lot of talk on the web about building an emergency fund, but far less in regard to replenishing it once you’ve taken money out of it. And if your living expenses increase over the years, you can even find your emergency fund is no longer adequate.
Take a look at your emergency fund at least once each year, and determine if it is sufficient to cover at least 3 to 6 months of living expenses, based on your current expense level. If it isn’t, set up a plan to refresh it as needed. It’s hard to remain financially stable without a well-stocked emergency fund.
19. Save For Specific Goals
A lot of people understand the importance of saving money in an emergency fund, and for retirement. But less well understood is saving for specific goals. Those goals could include saving money for your children’s college education, saving money to replace your car without having to take a loan, or saving money to make major repairs on your .home.
This isn’t just about saving money – it’s also about becoming self-funding. That means you pay cash for the kinds of major things other people borrow money for.
I’m a huge believer in revisiting your goals every 90 days. I started this over 4 years ago and I’ve seen my revenue nearly triple while taking more days off than I ever have. So yes, I’m a HUGE advocate of goal setting. Here’s a quick peak on my last quarters goals as well as my goals for 2015.
20. Know What You’re Paying
A lot of people are not terribly concerned with investment fees, so long as their portfolios are growing in value. But there’s more going on with investment fees than people normally think. A difference of just 1% in investment fees can make a substantial difference over time.
For example, let’s say you have a $20,000 investment account earning 10% per year. If you pay 2% in investment fees, that will give you a net return of 8%. Over a ten year period, the investment will grow to $43,179.
But let’s say you have the same investment, but you pay only 1% in investment fees. That will give you a net annual return of 9%. After ten years, the investment will grow to $47,347.
That’s a difference of well over $4,000 over ten years. The difference is even more dramatic over 20, 30, or 40 years.
It’s also important to understand the type of investment you own and the fees associated with it. Recently, I had a new prospective client that owned a variable annuity. She didn’t understand how it worked or what she was paying per year to own it. She actually thought she was only paying $50 per year to own it when, in fact, she was paying over $3,500!
Moral of the story: investment fees matter!
21. Give to Others
This could donating your time to a charity or cause, tithing, or cooking a meal for a friend in need. The point is to put others needs before yours.
It’s easy to put our own worries and concerns at the forefront but when you start focusing on others, the payback is unmeasurable.
22. Become the Go To Guy/Girl at Work
Everybody wants a raise at work, but not everyone wants to do what it takes to get one – especially in a tight job market. The same is true for promotions.
But if you want to fast-track your career, work to become the go-to guy or gal in your office. That means taking on meatier work assignments and stepping up to help management and coworkers when needed. It’s not easy, and it’s not an immediate fix, but it can really payoff in the long run.
23. Get to Work 15 Minutes Early Each Day
By getting to work 15 minutes early each day, you can dramatically improve your work performance, and even reduce your stress levels. Just taking the extra time to organize your day, such as creating a to-do list that makes sure you get the most important tasks completed first, can give you a jump on the competition – your coworkers.
That can be an important part of improving both your productivity and your visibility at work. And that can eventually lead to a bigger paycheck.
24. Cut Down on Your Spending Allowance
Even people who budget can sometimes be lax when it comes to their personal spending allowance. That’s the money you use for entertainment, for casual spending, and for that latte at Starbucks.
Everyone needs a certain amount of free-spending built into their budget, but it’s equally important to make sure it doesn’t get out of control. Since it tends to be spent in small amounts over long periods of time, it’s easy to get carried away with spending on this front.
Start by giving yourself a fixed allowance for free-spending each month. Then gradually begin cutting it down to a more manageable number.
25. Cut Down on Restaurant Meals
Eating in restaurants has become so common these days we hardly notice it. But if you find yourself eating out three, four or more times per week, your restaurant habit has become a major expense without you even realizing it.
Track the number of times you eat out each week, and begin reducing it. This is an excellent way to save money painlessly. And it may force you to sharpen your cooking skills. The Food Network is there to help you with that, should you need it.
26. Drive Your Car a Few Years Longer
If you are accustomed to taking out five year loans on your cars, then replacing them as soon as the loan is paid off, you need to realize that’s a very expensive way to drive. The longer you drive it after the loan is paid off, the less expensive your auto expense will be. That’s another of those good financial habits that will point you in the right direction, and bring you to financial stability more quickly.
The average age of a car in the US is now 11.4 years. That isn’t to say you have to drive your car until it dies, but you should be able to drive it for as long as 10 years. And for the love of man, repeat after me:
Reliable transportation does NOT mean you have to buy a brand new car.
If you are paying $500 a month for a car payment, and you can keep the car an extra five years after, that will be an extra $30,000 in your bank account ($500 X 60 months). You’ll lose some of that to repair bills, but nothing close to $30,000.
27. Learn to Love the House You Live In
Some people make it a practice to trade up on their home every time they get a promotion or a new job. If you want to become financially stable, it’s critical you learn to live beneath your means – which was the first strategy on this list.
If you can keep your house payment stable while your income rises, you can redirect the additional income into savings, investments, and non-housing debt. That will improve your financial situation a lot more quickly and efficiently than buying a larger and more expensive home every few years.
So there you go – 27 good financial habits that you need to not go broke – and to become financially stable. Pick just a few of them, and watch your finances get better.
As I type this, I’m jumping through the various hoops involved in buying a 2023 Tesla Model Y, a spectacularly expensive, large luxury “crossover” that is absolutely loaded to the gills with excess: all wheel drive, faster acceleration than a Lamborghini, enough space for seven people and enough computer gadgetry to function as a small Google data center.
The total net cost of this thing to me after all the taxes and tax credits* will be about $52,000, which is just a stunning amount higher than the Honda van it is replacing. That old classic cost me $4500 when I bought it off of Craigslist twelve years ago, and it had served me dutifully until just last month, crisscrossing the mountains and deserts of this country and also helping to rebuild a considerable swath of houses in my neighborhood.
I’m supposed to be a frugality-oriented financial blogger, and I’m also known for hating car culture – I think most people use cars about ten times more often than they need to, and most people drive cars they can’t afford. So why the hell am I buying a new one?
From those first three paragraphs, you can see I’m feeling plenty of self-mockery and ridicule over this new purchase. If you’re also a naturally frugal person, you can surely relate to the thoughts and you probably also agree with me that I’m off my rocker.
And indeed, I’m still on-board with frugality and healthy self mockery. After all, it was this overall life philosophy that earned me an early retirement 18 years ago, which provides all of the glorious freedom I enjoy now.
It was also the philosophy that allowed me to procrastinate on buying this expensive car for the last four years, even as countless people both close to me and out on the Internet egged me on and told me I should just loosen up and treat myself.
But there’s a classic slogan that applies to many areas of life, and it is something I like to dig up and ponder every now and then:
“What got you here,
Won’t get you where you’re going.”
How does that piece of wisdom apply to frugal living and enjoying a long life of early retirement?
A quick story from a recent run to the grocery store will explain:
I was standing there in the bakery aisle, hoping to restock with a loaf of Dave’s Killer Bread for the next day’s breakfast with some visiting friends. But since this was in a standard grocery store rather than the Costco where I usually shop, the damned stuff was priced at an eye-watering $6.99 per loaf (instead the $4.50 or so I’m accustomed to paying, and even at the bulk store this stuff is about double the price of normal bread).
“DAMN YOU KING SOOPER’S!”
Was my first response.
“WHO THE HELL DO YOU THINK YOU ARE, TRYING TO SELL BREAD FOR SEVEN BUCKS!!!”
Then I went through a whole mental battle of what I call Grocery Shopping With Your Middle Finger:
“Should I just boycott this bullshit?”
“Hmm I wonder if any of the other competing brands are any good?”
“What else is a good substitute for bread for this breakfast?”
And then thankfully, after exhausting all other mental options, I settled on the correct one:
“JUST BUY THE BREAD YOU DUMBASS!”
“Because you are never going to wake up in the future and look at your bank account and think, shit, if only I had an extra $2.49 in there I would be a happier person.”
That night, I came home from the store and shared this funny tale with one of my guests. He understood perfectly because he too had earned his own retirement through a lifetime of grinding in tough jobs and disciplined frugality. And despite the fact that he has a net worth several times higher than mine, he admitted that he faces exactly the same mental battles over splurging on himself.
This same friend gives freely to charitable causes, has supported a local school for decades, and is always the first one to pull out the checkbook if a friend has hit hard times or is looking for a trusted business investor.
But he still has trouble bringing himself to take an Uber to the airport instead of riding the bus which takes an hour longer.
We both realized that we were being too cheap with ourselves, and we needed to work on it. And we came up with a set of three ideas that should hopefully work together to help us have more fun with our life savings, while we are still alive:
the Minimum Spending Budget,
the Dedicated Money Wasting Account,
and the Splurge Accountability Buddy.
Principle #1: The Minimum Spending Budget:
Suppose you’ve done well over the years and amassed a pile of productive investments worth about two million dollars. Yes, this is a lot of money for most people, and that is the point: this hypothetical person truly has it made.
But as it turns out, most Mustachians I know with this level of wealth are still living very efficient lives, usually with a spending level of under $40,000 per year. On top of that, they typically live in a mortgage-free house and still have various forms of side income from a small business or two.
The 4% rule tells us that this person should be fairly safe spending up to about $80,000 per year from that cozy nest egg, even if they never earn any other money.
If this person wanted to be ridiculously conservative and set the spending rate at 3%, that still leaves about $60,000 of fun money every single year.. Plus, again, any side income, future inheritances, and social security income only add to the surplus.
Thus, a reasonable minimum spending level for this person might be $60,000 per year.
And in most cases, they know this, but still go right on living on $40k or less and claim they have everything they could ever want.
But if you watch carefully you’ll still catch them firing up the middle finger at things like $6.99 Dave’s bread or the $14.00 Cabernet at the restaurant or driving around in a gas guzzler even when they would prefer to have a proper, modern electric car.
And whenever these people do get extra money, their first instinct is to stash it away on top of the already-too-big pile. In diagram form, their money flow looks like this:
Note that while this person is great at accumulating money through that big red arrow firing money back into the ‘stash, their “fun stuff” arrow appears quite flaccid and withered.
Which is a perfect segue to ….
Principle #2 – the Dedicated Money Wasting Account
Lifelong habits are hard to break, and it’s sometimes hard to “waste” your own hard-earned money on things that seem frivolous, even when you know intellectually that you have way more money than you’ll ever spend.
But have you ever noticed that if you are spending somebody else’s money, preferably an anonymous corporation, it feels different?
For example, when you’re on a business trip and you just show up at the dining table to eat and drink and you never see the bill, you probably don’t fret about the prices, right?
The key is to make your own money feel like somebody else’s, and you can do it like this:
Re-brand your main bank account – henceforth it is the FREE FUN MONEY account.
Set up an auto-deposit of your minimum spending budget that drops in each month (if you suspect that you might currently be too frugal, make this at least $1000 per month higher than your current spending level)
The only way you are allowed to use the money in this new account is to spend it on anything and everything, or give it away. It can be used for both necessities like groceries and your utility bill, but also your luxuries like travel and dining and generosity.
But the key rule is this: You are not allowed to follow your old habit of sweeping out the surplus each month to buy more and more index funds as you’ve been doing your whole life.
If the free fun money starts building up, which it probably will because you are way out of spending practice, it will stare you in the face and tell you to do a better job.
And this can and should be FUN! Now you can get the best organic groceries even when the price seems exorbitant. Go out for dinner or order delivery whenever you like. Surprise your loved ones with concert tickets, join your friends on snowboarding or beach trips, or even pay for an entire group vacation, allowing people to go who couldn’t normally afford it so easily.
Technical Note: Some people have income or wealth levels are so high that it would be insane to spend at a 3% rate. For example, a $10M fortune would lead to a $25,000 monthly spending rate, which is obviously ridiculous.
In this situation, you can still leave your dividends reinvesting but still give yourself a bigger, no-saving-allowed budget to get some practice being more relaxed and generous. The real point here is to just stop sweating the details so you can have more fun.
Principle #3 – The Splurge Accountability Buddy
Many of us frugal people tend to stick together. And most of us have different versions of the same problem: we know logically that money is plentiful these days, but our emotions keep us stuck in our old ways of optimizing too much.
But I find that when I team up with local friends who are actually trying to battle these same habits, we can question each other’s decisions, call out cheapness when we see it, and cheer on splurges when we know the other guy would enjoy it.
My super wealthy friend from above has become much better about treating himself (and his family) to quality goods for the home, amazing trips together, and just a general reduction in his stress over being “efficient with money”
My friend and HQ co-owner Carl (Mr. 1500 Days) has finally replaced his beaten-down minivan with a spiffy new Chevrolet Bolt electric car, and is loving that leap into the future.
And of course Mr. Money Mustache, after squeezing one final mountain road trip out of his 23-year-old Honda van, is finally allowing himself to get the Tesla he has been talking about for half a decade.
A recent life change (becoming a co-owner of a fixer-upper vacation rental compound in beautiful Salida Colorado) has reignited the travel fire in my heart and made me realize how much I do love getting out to distant places for visiting, mountain biking, gathering with groups of friends and my favorite activity of all: Carpentourism.
Running the Numbers: how ridiculously expensive is this car?
This is the perfect start to my experiment in spending more. Realistically, a $50,000 car is going to cost me about $10,000 more per year than my old van was burning. With the biggest costs being these:
Foregoing roughly 8% annual investment returns on the 50 grand: $4000
Depreciation on the car: an average of $3000 per year over the first 10 years
Higher insurance premiums: $1000 more per year
Replacing those exorbitantly huge performance tires when they wear out, and probably things like repairing the all-glass roof someday when it meets Colorado’s pebble-strewn mountain roads: the remaining $2000 or so.
Since I personally had a spending deficit of several times more than $10k per year, I figure this is a solid first step. And, since the car’s primary purpose is things like epic camping trips, dream dates, and long adventures around the country, it will definitely help me spend more on experiences, hotels, and go out to dinner a bit more often as well.
“This Privileged Rich Folk Talk is Making Me Sick, why don’t you give your money away to charity, or to me?”
In general, I agree: the world has problems and the richer you are, the more you should consider giving generously.
But also, to be honest, the whiny people who constantly send complaints like this out to strangers on the Internet really need to get a life. It’s great to encourage philanthropy through positive examples, but completely unproductive to send negativity to shame people you don’t even know for not following your own personal value system. The world has seen more than enough of this.
On top of that, this one-sided thinking can be counterproductive. Both of my friends have given generously throughout their lifetimes. In my own case, I have donated over $500,000 to the best causes I could find during the years I’ve been writing this blog, but I was still refusing to let myself replace that 23-year-old van.
And that overthinking was leading to even more of a scarcity mentality, as I compared my own meager spending to these bigger numbers of my donations, and found myself thinking things like,
“Damn, I’m spending $100 on this dinner date which sounds like a lot, but I also spent ONE THOUSAND TIMES more on donations last year, which sounds like even more. Maybe I am spending too much and need to cut back on EVERYTHING!”
And then the fear side of my brain would illogically chime in: “Yeah and you’re going to make us run out of money and be poor forever! waaaah waaaah! Cut back and optimize and conserve!”
I think there is a happy medium here.
Yes – be a super, duper responsible steward of your life savings.
And yes, give generously with all your heart to charity.
But yes, it’s also okay to set aside a portion of the money you’ve earned, for frivolous spending on yourself and those closest to you. You’re not a bad person for having a few nice things.
It’s okay to pay that extra hundred bucks to sit in the front of the airplane instead of the back if it helps you enjoy your vacation and spend a joyful half hour walking FREE at your destination while the 49 rows of people behind you fuss infuriatingly with their shit in the overhead bins.
It’s okay to buy the frozen berries at Whole Foods even though they cost eight times more than Costco charges, if it spares you from making a second unpleasant trip through parking lot hell.
And as for me, I am calling it okay to, at last, double flip the Autopilot stalk in my new Tesla and lean back as it it shoots me gracefully through even the highest mountain passes, forever leaving the desperately underpowered wheezing and gear shifting and noise* of the gasoline era behind, forever.
Rest in Peace, Vanna – 1999-2023
* A useful tip for more effective splurging:
Try to find the truly negative aspects of your life and focus any additional spending on improving those things. But it’s a subtle art so you have to get it right if you want lasting results in happiness.
You don’t want to just reduce hardship or challenge like hiring someone to take care of every aspect of your house, because overcoming daily hardships and having significant accomplishments provides the very core of our life satisfaction.
You also don’t want to just upgrade the things that are already good in your life. For example, a friend of mine is a gourmet coffee expert, and he suggested that I upgrade my setup at home to include on-the-spot roasting, and fancy grinding and brewing equipment. But I already love the good quality coffee I buy off the shelf from Costco, so it would be counterproductive to invest time or money into changing this part of my life.
But when you have something that causes you regular angst and stress, whether it’s a leaky roof that makes you dread rain, or a long commute that makes you dread the daily traffic jam, or a body that is giving you trouble due to not being in the best of shape – those types of things are probably a good target for improvement.
In the case of my car situation, I had a Nissan Leaf which is wonderful to drive, but doesn’t have the range to travel anywhere outside of the Denver metro area. Then I had the van which is a clunky beast to drive, but is otherwise an amazing road tripper because I could bring along whatever and whoever I wanted. But the van was getting increasingly unreliable in several hard-to-fix ways which was making me nervous every time I thought about long distance travel. Which was causing me to avoid certain trips and miss positive lifetime experiences.
In other words, my lack of a reliable long-range car was a small but consistent source of negative stress.
Finally, Vanna gave me the gift of a final hot and smelly transmission failure on a mountain pass on the way home from my new project in Salida. It was just the nudge that I needed. And now I already feel excitement rather than dread at the prospect of all the road trips in the coming decades!
* Total cost of this Tesla:
Model Y plus options and Tesla fees: $53,630
Subtract $7500 federal EV tax credit
Subtract $2000 Colorado EV tax credit
(Note: this is equivalent to a $44,150 list price if you are cross shopping with other cars)
Add back in $4674 of sales tax
Add in first 3 years of Colorado new-car registration fees: $3000
Net cost: about $52,000
New Tracker Page!
To go along with this article, I started a new page called “The Model Y Experiment” where I can share ongoing findings and Q&A about the ownership experience. I’ve driven and rented Teslas quite a bit in the past, so most of it will be pretty familiar. But as an owner I’ll get to verify the reliability and the quality of customer service, as well as any quirks and modifications and upgrades I do.
Stone walls, crocodile-filled moats, Rottweilers — our ancestors found some pretty creative home security solutions!
Today’s home security systems feature a more tech-savvy approach, but the goal remains the same: to keep your family, your property, and your stuff safe from outsiders.
Recent innovations have fueled a new surge in home security sales.
As you shop around and compare systems, consider your home’s security challenges, your lifestyle, and your budget.
Chances are good you’ll find the system you need, whether you’re a new homeowner or just new to the home security market.
How Security Systems Have Changed Over Time and Recently
Believe it or not, tech-driven security systems have been around nearly two centuries. Augustus Russell Pope of Boston combined electricity, magnets, and a bell to create a burglar alarm in the 1850s.
Marketing the invention proved difficult, though, because people feared electricity as much as they feared intruders. As the decades passed, the world caught up with Pope’s idea.
By the early 20th century, electricity had grown safer and more common. The burglar alarm started to catch on.
By the 1970s, home security systems featured motion sensors. Off-site monitoring caught on in the 1980s.
Prices started to fall in the 1990s, making systems accessible for more homeowners. Now the internet has changed the industry again.
For a few hundred dollars in hardware and installation fees — or perhaps less if you install the system yourself — you can monitor your own home from your smartphone from work, school, your commute, or even while on vacation.
These new systems have drawbacks, too, so before you jump in, make sure you’re getting the security your family needs.
Monitored Vs Unmonitored Security Systems
This has become the first question to ask when shopping for home security: Should you pay more for a system with professional monitoring included?
For decades, monitoring fees prevented a lot of homeowners from getting a home security system.
Even the lowest fees can become cost-prohibitive when you pay them month after month and year after year for the indefinite future.
For those homeowners, unmonitored systems may offer the only way into the home security market. If you have a choice, though, give this question some thought.
Monitored systems come with some advantages you may like.
Advantages of Professionally Monitored Systems
Just like with cars, computers, and houses, you get what you pay for with a home security system.
A monitored system costs more, but consider these advantages:
More seamless responses: With an unmonitored system, it would be up to you to contact fire or law enforcement officials when you get an alert about an intruder. When you’re out of town, calling 911 probably won’t work as quickly since you’d have to be transferred between areas of jurisdiction. Someone monitoring your home should be able to contact officials more quickly.
Someone else deals with false alarms: When you’re at work or out shopping and you get a security alert from your unmonitored security system, it’s up to you to assess the risk. If the FedEx guy triggered the alarm by delivering this month’s dog food, you’d feel relieved. But when something like this happens several times a day, it starts to get distracting. A monitored system can take care of these distractions, saving your attention for when it really matters.
Equipment may be included: Customers who buy an unmonitored system tend to be responsible for maintaining and upgrading their own security equipment. A monitored system would more likely include the equipment and, naturally, its maintenance and upgrades. In a fast-changing industry, your gear can get outdated pretty quickly.
Protection isn’t dependent on cell service: Most of us always know where our phones are. But what happens when you’re in an area with poor service or when you lose your phone on the Slinky Dog ride at Disney’s Hollywood Studios? (I’m not judging!) You may not have access to your at-home security system alerts when most needed. A monitored service can contact authorities to protect your home even when you aren’t in the loop.
Advantages of Unmonitored Systems
Unmonitored, also known as self-monitored, home security systems have become the fastest growing segment of the market for a reason. Advantages include:
The cost, of course: Since you could use a self-monitored home security system without paying monthly fees, you can save a lot month to month and year to year. Even if you pay a professional to install the system’s panel or cameras, you can still avoid that monthly bill.
A perfect fit if you’re renting: The home security market has traditionally ignored renters since they don’t have the authority to install hardware or enter a long-term contract. An unmonitored system offers exactly what a renter needs: flexible service with no long-term commitment.
Having more control: When you’re making all the decisions about whether to call for help or whether it’s a false alarm, you’re automatically controlling the response level. Since you know better than anyone what’s normal at your home, this can prevent some confusion. For example, the monitoring service may not know your brother has a spare key but does not know the alarm code. Since you know this, you can automatically filter out the police response as a viable option (unless you really have it in for your brother).
Integrating additional home systems: Some of the best self-monitored systems are an extension of WiFi-enabled home automation. Along with feeling more secure, you can also lock or unlock doors, change your thermostat, turn certain lights on or off, and even control the garden sprinklers (and lawn mowers!), all from an app. (Traditional monitored services have started adding these features, too.)
Can You Get the Best of Both Worlds?
Wouldn’t it be nice if you could combine the best aspects of professionally monitored and self-monitored systems?
Well, the industry has been moving in that direction.
Here’s why: The rapid growth of self-monitored home security systems has grabbed the attention of the traditional home security companies.
The leading monitored services are compensating by adding modern conveniences such as app-based customer control and, in some cases, acquiring smaller, self-monitored home security companies.
And it’s not a one-way street: Some self-monitored services have added the option to have your home professionally monitored, but with a twist. You can get add-on monitoring for a fee only when you need it. That way you could still avoid the contracts and flat monthly fees.
As the market continues to evolve, I’d expect to see less separation between these two categories.
But full-time monitoring will continue to be a separator. It simply costs more money to have someone monitoring your home and responding to problems all day every day.
And in many cases, professional monitoring equals a more secure home.
Should You Buy a Monitored or Unmonitored Security System?
This gradual merging of monitored and unmonitored home security features could, ironically, make it harder to decide what kind of service to buy.
If you like the control an unmonitored system offers, you don’t necessarily have to opt for an unmonitored system anymore. You can find a monitored system with similar capabilities.
Or, if you want a monitored system because you’re out of town a lot, you no longer have to choose from only traditional security service providers. You may be able to find an unmonitored service with added-on monitoring periods without a contract.
If you can’t decide for sure, take a look at your home, your lifestyle, and your personal preferences. They can tell you a lot about your needs.
What Type of Home Do You Have?
The kind of home you’re protecting should help drive the kind of protection you buy.
Makes sense, right?
Well, it’s easy to forget such obvious things once you start comparing features, prices, contracts, apps, and customer reviews.
Take a look around your home. If you have two full floors full of windows and doors, along with a garage door and windows to consider, you’ll need a lot of equipment installed and maintained.
You’ll also have a lot more sensors to trigger false alarms. A monitored system could be worth the cost.
On the flip side, if you live in a 2-room apartment with just a few windows and only two doors, your up-front equipment investment will be less, and you’ll have fewer trigger points to keep an eye on as you monitor things while away. A self-monitored system could do the job.
How Connected Are You?
If a home security system sends an alert to your smartphone but no one is around to hear it, does it make a sound? We could debate that question for hours, and if your phone happens to be off, someone could be stealing your stuff as we contemplate.
With an unmonitored system, you’re on call around the clock via your smartphone. If you’re the kind of person who likes to unplug after work or while on vacation, you may want to lean toward a monitored security system.
If, however, you and your phone are inseparable — if you sleep with the phone beside you on the pillow — you’re likely set up well to monitor security alerts.
That said, I’d suggest using a different ringtone for home security alerts. You wouldn’t want to ignore a serious problem thinking it was just a reminder to pick up your sister’s cat from the vet tomorrow.
How Connected Is Your Home?
Most of us have WiFi at home now. Most does not mean all, though.
People without WiFi at home will have a hard time using all the features of a self-monitored home security system.
In that case, a landline-based, traditional system would be a better option.
If you have WiFi, the quality of your surveillance will depend a lot on the quality of your Internet connection.
As more devices and appliances get online — thermostats, washing machines, tablets, phones, TVs, refrigerators, lawn mowers — there’s more demand on your network. For many of us, a DSL connection just doesn’t cut it anymore.
If you have a gigabit-per-second coming across fiber into your home, your unmonitored security features should work just fine.
How Busy Are You?
A lot of us can add tasks to our regular schedules without a lot of stress. People in the gig economy or with a couple side hustles may have just the kind of schedule flexibility they need to assess threats from their smartphones.
Sure, you may have to re-arrange a few things or tell a client to hold on a second while you check the alert on your phone, but it’s still possible. People who teach school, run meetings, perform surgery, or preside over class-action lawsuits may not have time to check their phones every couple of hours.
Just like any other commitment you take on, consider the time demands of an unmonitored security system.
I’ve been in more than one meeting where someone had to check on a security alert. (Usually, something like leaves blowing onto the porch or a delivery from Amazon triggered the alert.)
Do You Own Your Home?
I referred to this earlier, but it bears repeating. Traditional home security firms more or less ignored renters for years since they didn’t have permission to install a system anyway.
With no wires to run behind walls, a tenant can usually install an unmonitored system without changing the property.
Mounting a camera in the corner is hardly different from hanging a picture, and it’s a whole lot simpler than installing a wall-mounted TV.
Plus, when you move on to a new home in a new city, you could take a lot of the system’s components with you to use at the new rental house. Of course, check your lease agreement to make sure you have permission to make the changes an unmonitored system would require.
And, by the way, if you’re a renter who would like a traditional monitored system, ask your landlord about it. He or she may be fine with the idea, especially since a system could reduce your landlord’s homeowners insurance rates.
Best Security System Providers For 2023
We’ve chewed on a lot of theoretical stuff, so let’s get into what really matters. How do systems compare to each other, and which one should you get?
A year or so ago I would have made two best security system lists: One for monitored security systems and one for self-monitored systems.
The features of these systems have blended so much I think one list will better serve shoppers. I’ll be sure to indicate whether you would need a contract to use each service.
While convenient features are important and worth weighing into the equation, the quality of the system itself still matters most.
So I’ll be giving the quality of your home security system first priority in these comparisons while giving conveniences and customer flexibility a little less importance.
Frontpoint
Contract required: Yes Professional monitoring: Yes Length of contract: At least one year
Remember earlier when I suggested the future of home security will likely blend the features of monitored and unmonitored systems?
I had Frontpoint in mind when I said that.
This company has led this confluence of features, offering professional monitoring plus the conveniences do-it-yourself systems introduced.
Yes, Frontpoint requires a contract and you’ll be paying for 24/7 professional monitoring. But you’ll also have a user-friendly app that can control your locks, lights, and thermostat.
With Frontpoint, you install the equipment yourself since it’s wireless, lightweight, and easy to position with included adhesive strips.
Essentially, Frontpoint offers the best features of monitored and unmonitored services in one package: professional monitoring, quality equipment, convenient features, and a do-it-yourself approach.
That’s why I’ve listed Frontpoint first.
I also like the 30-day, risk-free guarantee. If you’re unhappy with the service, Frontpoint won’t bill you and you can return all the hardware. You won’t be on the hook for the rest of the contract.
I also like the one-year contract. Most companies require a three-year commitment.
Frontpoint offers three price points. If you’d like to access recorded video surveillance from your property, you’ll need to go with the most expensive plan.
Best for: A homeowner who wants mobile control, full-time professional monitoring, and more contract flexibility than usual. Avoid if: You don’t want to enter at least a one-year contract.
ADT Pulse
Contract required: Yes Professional monitoring: Yes Length of contract: At least three years
ADT, a leader in home security for almost 150 years, has also started offering the conveniences of unmonitored security in its ADT Pulse system.
Like Frontpoint, ADT Pulse still bases its services on contracts, but it has bulked up its app to give customers more control over their security equipment. In fact, you can probably incorporate your own cameras and sensors into ADT’s system since it supports many third-party hardware brands.
Unlike Frontpoint, ADT Pulse includes professional installation (and a corresponding $99 set-up fee). The result is another best-of-both-worlds approach for the customer who is willing to enter into a contract.
In ADT’s case, the contract will last at least three years, and you’d be billed a hefty termination fee to get out of it.
ADT will let you out of the contract if you’re not happy with the service, but it’s not a no-questions-asked policy. ADT will try to resolve your issues, which is a good thing if home security is your priority.
Best for: A homeowner who wants a time-tested, trustworthy home security partner with professional installation plus modern mobile-based control. Avoid if: You’re not sure about entering a long-term contract.
ProtectAmerica
Contract required: Yes Professional monitoring: Yes Length of contract: At least three years
By now you’re sensing a trend: Traditional, contract-based home security companies that have adopted modern conveniences are dominating the top of this list.
And for good reason: Ultimately, a home security system should provide the best home security for you and your family, and professional monitoring tends to offer more security.
ProtectAmerica makes this list for those reasons and because of its flexible pricing options. The company has five price points.
I’d stay away from the company’s less expensive, landline-based options. They do not offer the control and integration you’d get from Frontpoint or ADT Pulse (unless you want a traditional, landline-based system).
ProtectAmerica’s broadband and cellular-based options deliver a lot. You can even integrate the system with your Amazon Alexa or Google Home smart device for voice control.
And when an alarm goes off, you can also get a voice prompt from the system telling you which sensor or camera triggered the alarm. When you’re half asleep, this simplicity can pay off! There’s also a panic button which will automatically call for help.
Best for: A homeowner or renter who wants the conveniences of tech-based security with fewer potential complications. Avoid if: You’re shy about a three-year contract.
Vivint Home Security
Contract required: No, unless you’re financing equipment Professional monitoring: Yes Length of contract: At least 42 months (but only when financing equipment)
If you’ve been looking for a no-contract home security solution that still delivers professional results, consider Vivint Home Security. Vivint offers monitoring for a monthly fee, but it doesn’t require its customers to commit to more than one month at a time.
However, if you cancel your account while you still owe money on your equipment, Vivint will bill you for the balance. So even though you wouldn’t have an official contract, you’d still be compelled to keep the service or pay a lump sum to end your connection to the company.
It’s not exactly a no-strings-attached situation, but customers do have more control month to month, especially if they pay up front for the equipment.
Vivint makes this list because of this potential flexibility and because of the flexibility of the company’s equipment.
You can essentially build your own home security and home automation package the way you want. Rather than choosing from a package, you can combine different kinds of surveillance equipment including outdoor monitoring, and different safety features such as smart lighting and thermostat control.
You can manage your system through a Google or Amazon smart speaker or you can use a more customized control panel.
Best for: A homeowner who wants to customize a security solution. Avoid if: You don’t want to pay up front for equipment. If you don’t pay up front, you’ll have a de facto contract.
Link Interactive
Contract required: No, unless you’re financing equipment Professional monitoring: Yes (by a third party monitoring center) Length of contract: N/A unless financing equipment
Link Interactive rounds out my top 5 because, once again, it blends traditional and unmonitored features to give customers the best of both worlds. Link Interactive stands out because it has embraced broadband and cellular networks more thorough than most other providers.
As a result, you can talk with a professional monitor through your control panel at home during an emergency. Sometimes just knowing what’s going on and finding out easily when help will arrive can alleviate stress.
But you should know that Link Interactive uses a third party, which doesn’t always equal a loss in quality, but it does mean the company has less control over the monitoring process.
Still, lots of Link Interactive customers have been satisfied with their service according to TrustPilot and Better Business Bureau reports, which tend to lean toward the negative for security systems.
Link Interactive lets you pay month to month instead of committing to one to three years. However, as with Vivint, if you owe money on your home security equipment, you’d have to pay the balance if you canceled service.
So unless you pay up front for the equipment or pay the balance down enough to make more affordable, you’d likely be sticking with the service for a while.
Essentially, it’s a contract by another name. Link Interactive does stand by its 30-day grace period. If you change your mind or don’t like the service, you can cancel without obligations.
Security matters most, and even though I’ve listed a couple concerns, Link Interactive has the experience (about 70 years’ worth) and the equipment to serve its customers well.
Best for: A homeowner who wants a reliable partner with the best modern conveniences. Avoid if: You don’t plan to stick with the company for at least until you’ve paid off the equipment.
Best Self-Monitored Home Security Services For 2023
I know — I listed my five top choices for home security, and not a single one offers a completely self-monitored system.
I alluded to the reason earlier but here it is again: Professionally monitored systems simply provide better security across the board, and we’re looking for the best home security systems.
In most cases, security tends to be better because you have a staff of monitors at the ready to respond to a crisis at your home.
Most, of course, doesn’t mean all. You may have just the right work-life balance to handle a self-monitored system. Or you might just prefer to self-monitor your home security, either to save money or because you like the control.
If so, you have a lot of choices.
Let’s take a look at a few of my favorites.
Ring Alarm
You’ve probably seen this one on TV. It looks simple, efficient, and affordable.
Overall, it lives up. For only $200 or so up front, you can get a pretty solid set-up and install it yourself. Pricier packages offer more components for larger homes.
You can opt for professional monitoring (for $10 a month or $100 a year) or for self-monitoring, which is free. Ring connects to Z-wave, which means you can incorporate a wide variety of home management and security equipment.
Amazon owns and sells Ring systems, so if you’re a frequent Amazon shopper you’ll know pretty much what to expect.
Best for: A low-cost but useful alternative with professional monitoring available.
Honeywell Smart Home Security
Honeywell, whose name you may have seen on thermostats somewhere along the line, has expanded its business into smart home connectivity, including home security.
You’ll pay more, over $1,000 most likely, to get your system going, but after that, you can do a lot, including arming and disarming the system with a key fob and even integrating facial recognition.
Honeywell’s system works seamlessly with Amazon Alexa, and the system should soon also offer Google Assistant and Apple HomeKit integration.
Honeywell also syncs with Z-wave, which means you can use all sorts of wireless equipment to manage and monitor your home.
Best for: A do-it-yourself alternative that still has top-notch gear and accessibility specializing in self-monitoring.
SimpliSafe
SimpliSafe has grown in name recognition and market share. The company offers a lot of options. About 16 to be precise. They all vary slightly in the number of components and price.
Set-up fees range from about $290 to about $550 depending on how much equipment your home needs. The equipment is easy to install and use. You can go without professional monitoring and keep using the security equipment.
It tends to be harder to incorporate third-party equipment, though. So if you get SimpliSafe don’t assume you can use existing gear from previous systems.
Best for: An all-in-one system for homeowners new to security systems.
Nest Secure
If you use Google products — Google Assistant and the Android operating system, for example — Nest Secure could offer a sensible extension for your home automation and security needs.
Naturally, the service integrates nicely with Google Assistant and your Android phone or tablet. You can spend up to $500 or so getting the equipment set-up.
You can add professional monitoring on a contract or month-to-month basis.
Best for: Customers who already use Nest home automation products. Nest is part of Alphabet, Google’s parent company.
Going Cheap? Create Your Own System And Go Full DIY!
Even though the home security market has changed a lot with the success of self-monitoring systems, customers still have two basic choices:
Enter a contract of some sort to get professional monitoring and pay less up front.
Buy a do-it-yourself system, spending $300 to $1,500 up front, and have the freedom to self-monitor and avoid the contract.
Some customers wonder why they can’t just buy some cameras and door sensors and connect the gear to their smartphone. That may be possible, and if that’s your thing, you could save compared to buying a pre-packaged deal.
But, for the majority of consumers, I do not recommend this approach for a few reasons:
It depends upon your ability to connect and maintain the equipment.
You couldn’t add professional monitoring if you wanted to.
It’s more difficult to self-monitor without an app to centralize the camera feeds and sensor data.
Regional Security Firms May Offer a Lot
I tried to limit this post to companies offering nationwide service. Some regional companies offer great equipment and great service, too.
If you’re considering a regional firm in your area, make sure to check on the following issues:
Who monitors the company’s security systems? Is it local or third party? If third party, try to find out response times for the monitoring service.
Are you as the customer responsible for maintaining the equipment or will the company keep it up to date? If you’re responsible, work that into what you’ll be paying.
Does the system’s control panel have a battery backup during loss of electricity? What about backup for the WiFi connection? If not, the system could leave you vulnerable.
If you have the ability to self-monitor, can you integrate components you already own via Z-wave or another similar service?
What do local law enforcement officials think about the firm? Cops know a lot about home security. They may know the value of a local or regional home security outfit.
Need Proof of Results? Ask Your Insurance Agent
Our homes are personal. Having a stranger violate, steal, or destroy our homes, our property feels like a personal attack even if we’re not home and deal only with the aftermath.
People who have experienced that feeling know it can change the way you look at the world for a while.
It makes sense for homeowners (and renters) to seek some kind of protection against this danger. No system can guarantee your safety and the safety of your family.
But home security systems do get results. For proof, just ask your homeowners insurance company.
Many insurers will give you a discount on your home insurance premiums if you have a professionally monitored home security system. Insurers give this discount because they know a quality home security service will likely reduce the likelihood of a personal property insurance claim.
As you compare systems, consider what kind of security you need and whether what you’re buying fits your home.
Security is personal. It’s up to you to make sure you’re getting a system to match your life.