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Today, it’s not uncommon for adult children to return home or never leave the nest to start with. About one in three 18- to 34-year-olds live with their parents according to recent survey data.

Moving back home can be a wise move for grown kids who may be dealing with job uncertainty, earning a low income, and/or be facing a mountain of student loan debt.

And it can wind up being a good deal for parents as well.

Some of the benefits: opportunities for companionship, the possibility of sharing household expenses, and the ability for adult children to pay down student debt and save money for longer-term financial goals (for instance, buying a house).

But living in the same household again can also bring opportunities for tension and misunderstandings.

That’s why parents who welcome their kids back may want to set a few guidelines. Here are some rules both parents and grown children might want to wrangle before moving back in under one roof.

What Is the Timeframe?

When adult children move back home, it’s helpful for both parties to have a timeframe in place, rather than the ’’foreseeable future.”

This may mean talking about why the move is happening. Is it to save money? If so, what is the money being saved for, and at what point should the child move out?

Some parents might find it helpful to set up a trial period, after which they can have a frank conversation about what is and is not working in the arrangement.

💡 Quick Tip: Banish bank fees. Open a new bank account with SoFi and you’ll pay no overdraft, minimum balance, or any monthly fees.

Going Over the Financials

Many misunderstandings from adult children living at home stem from confusion over how much money, if any, they are expected to contribute.

It can be helpful for both parties to consider their expectations before coming together and talking through them. Some issues you may want to think about and then discuss:

•   Will adult children be expected to pay rent? And if so, how much will rent cost? When will it be due? Some parents might want to set a flat rate, while others might consider a percentage of the child’s income, if that income is currently low but expected to rise.

•   Will the child be responsible for a portion of bills, groceries, or other household costs (recurring and/or discretionary expenses, as you decide)?

•   How will resources be allocated? Is the fridge open for anyone? Can the child use the family car if they need it?

•   How much will bills go up with additional usage? Parents might decide they want their child to pay for any overages, or they might be okay with handling the increase themselves.

Recommended: How to Manage Money Better

Going Over House Rules and Behavior Expectations

Some parents have a “my house, my rules” expectation. But it can sometimes be mutually beneficial if both parties talk about behavior expectations with an attitude of give and take.

Often “unspoken expectations” don’t come up until a problem occurs. Talking through them proactively can make sure that everyone is on the same page.

Some issues parents and adult kids may want to go over:

•   What are expectations for guests? Is it okay for romantic partners to sleep over? Do parents need a heads up before guests come by?

•   What are communication expectations? Should a child inform their parents if they won’t be home by a certain time?

•   What chores are expected? It’s wise to go over whether or not you expect that your child to do some of the supermarket shopping and/or clean any areas of the house beyond their living spaces. It’s perfectly acceptable to have your adult child pitch in on dinner duty, take on cleaning, or otherwise contribute to the house as an adult. Perhaps they pay for their own monthly supermarket costs.

•   What do daily schedules look like? Maybe one family member needs quiet for work meetings. Maybe another needs access to family exercise equipment or the shower in the morning? Talking through routines — from breakfast to bedtime — will set expectations and avoid misunderstandings.

•   What does privacy mean when you’re under the same roof?

Both parties may be concerned about how the new arrangement will affect their lives, and talking through those concerns can help people find solutions that work for everyone.

💡 Quick Tip: When you overdraft your checking account, you’ll likely pay a non-sufficient fund fee of, say, $35. Look into linking a savings account to your checking account as a backup to avoid that, or shop around for a bank that doesn’t charge you for overdrafting.

Helping Adult Children Achieve Financial Independence

There’s nothing like living together to get financial habits out in the open. This applies to adult children and their parents.

By keeping an open dialogue about money, however, you can help your adult children get on the right financial track (and perhaps move out sooner, rather than later).

Here are some ways you may be able to help adult children work towards financial security.

Talking through financial and savings goals

Instead of asking your adult child how much they have saved, or how much consumer credit card debt they have, consider asking them to talk through their short-term financial goals and long-term ones too.

Putting rent to work

Some parents who are in a position to do so may want to charge their children rent and then use that money to gift to their child for a down payment, help with tuition, or hit another financial goal.

Or, in lieu of rent, you might request that your child set up an automatic deposit into a savings account that could eventually become a security deposit on a rental or an emergency fund.

Teaching by Example

One way to encourage disclosure about your adult child’s financial picture is to talk through your own.

Talk broadly through your retirement plan, any long-term care plans, or how you hit your own financial goals (such as buying a house). This can help your child start good financial habits and build a positive money mindset.

After all, personal finance is not typically taught formally, and giving your adult child — no matter how old — some insight into the tools and strategies you use can give them ideas for how they can manage their money and cut back on expenses.

Trying Not to Nitpick

While it’s helpful to talk through your own strategies, it may not be helpful if your child feels like you’re critical of the way they are spending money.

Let’s say your adult child buys a latte every day. Sure, you can point out how much they would potentially save if they invested that money, but for the sake of the relationship, it may be easier to let certain habits go and focus on what your child is doing to work toward financial goals, such as investing in their company’s 401(k) plan or doing their taxes well in advance of tax day.

💡 Quick Tip: If you’re faced with debt and wondering which kind to pay off first, it can be smart to prioritize high-interest debt first. For many people, this means their credit card debt; rates have recently been climbing into the double-digit range, so try to eliminate that ASAP.

The Takeaway

Living under one roof may not always be easy for adult children or parents, but it comes with an opportunity for growth for everyone, as well as a closer relationship as equals.

Part of forging that relationship may involve setting some parameters early on about what is expected from grown children while they are living at home, from how much they may be expected to contribute financially to how often they can use the car.

Letting kids move back home (where they can live more affordably), and having open discussions about money, can help them not only save, but also develop good financial habits.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall. Enjoy up to 4.60% APY on SoFi Checking and Savings.

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SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Timeshares may be a fun vacation option for a while, but sometimes people want to end the arrangement. Those time share contracts, however, can seem pretty ironclad.

Whether you want out due to buyer’s remorse, a shift in your financial situation or health, or any other reason, here’s some good news: You’re not necessarily stuck.

If you change your mind soon after the purchase, for instance, you might be able to opt out during the “rescission period.”

Those who have had their timeshare for years can have alternatives, including having the resort take it back or perhaps re-selling it.

There are also what are known as “exit” companies that help timeshare owners get released from their agreements (though it’s important to vet those companies before signing an agreement).

If you’re ready to say goodbye to your vacation place, read on to learn steps for legally getting out of a timeshare contract.

5 Steps to Escaping a Timeshare

If you’re thinking about getting out of a timeshare or know you’re ready to make a change, here are five options to consider.

1. Checking the Rescission Period

If your second thoughts occur within several days of your purchase, you may be able to rescind the transaction if you’re still within the “rescission period.”

If you are, you should be able to get your money back and go on your merry way.

Keep in mind, however, that the rules vary from one state to the next.

Depending on the state where the timeshare is located, rescission periods can be anywhere from three days (the minimum required by the Federal Trade Commission) to two weeks.

In some cases, the rescission period may kick in as soon as you buy the timeshare. In others, it might start when you receive the public offering statement that includes general information about the timeshare.

For a timeshare on an exotic isle somewhere outside the U.S., you’ll need to find out what the laws are there.

If you’re eligible for rescission, you’ll want to follow the instructions in the documents you received when you purchased your timeshare.

Most likely you’ll need to send the resort a letter telling them you want out via rescission for a full refund.

It’s a good idea to send this letter using certified or registered mail.

💡 Quick Tip: Typically, checking accounts don’t earn interest. However, some accounts do, and online banks are more likely than brick-and-mortar banks to offer you the best rates.

2. Contacting the Timeshare Resort

If rescission isn’t possible because too much time has passed, another option you may be able to take advantage of is a “deed back” program.

Also known as “take-back” and “surrender” programs, these programs allow distressed owners to give their timeshares back to the resort developer, often for a fee of a couple of hundred dollars or so.

To find out if your developer offers this type of program, you may want to contact them directly and ask to speak with someone who handles “deed-backs” or “surrenders.”

You can also check online resources like ResponsibleExit.com for information about return programs.

Generally, developers will only go for this if the timeshare is fully paid for, and you’re up to date on your maintenance fees.

Some developers that accept returns may require owners to pay annual fees for a year or two while the resort finds another buyer.

In some cases, you may have to prove financial or medical hardship in order to qualify for a take-back program.

Even if your resort doesn’t have an official take-back program, you have nothing to lose by asking. Who knows; they might go for it.

Recommended: How to Automate Your Finances

3. Reselling The Timeshare Yourself

If you’re considering reselling your timeshare, it’s probably best if you don’t go into it with hopes of making a killing.

There are typically many people looking to unload their timeshares and demand isn’t generally high, unless your property is in a hot destination.

As a result, reselling can often be a losing proposition.

The best approach might be to think of reselling as someone taking the timeshare off your hands and becoming responsible for the fees moving forward, rather than making a profit.

You can list your timeshare on a general resale marketplace site, such as eBay and Craigslist. There are also sites just for timeshares, such as TUG (the website for the Timeshare Users Group) and RedWeek .

💡 Quick Tip: When you feel the urge to buy something that isn’t in your budget, try the 30-day rule. Make a note of the item in your calendar for 30 days into the future. When the date rolls around, there’s a good chance the “gotta have it” feeling will have subsided.

4. Reselling the Timeshare Through a Broker

If you opt to resell your timeshare, another option is to hire a real estate broker or agent who specializes in reselling timeshares.

If you choose this route, however, you’ll want to pick your broker carefully, cautions the Federal Trade Commission (FTC) .

Some real estate brokers and agents who specialize in reselling timeshares may falsely claim the market in your area is hot and that they’re overwhelmed with buyer requests.

They may even tell you that they already have buyers ready to purchase your timeshare, or promise to sell your timeshare within a specific time.

It’s wise to be skeptical of all such claims, says the FTC, and also to vet the reseller before agreeing to anything on the phone or in writing.

A good safeguard is to contact the state Attorney General and local consumer protection agencies in the state where the reseller is located, and ask if any complaints are on file. You also can search online for complaints.

You may also want to ask the reselling agency if their agents are licensed to sell real estate where your timeshare is located. If they say they are, you may want to verify it with the state’s Real Estate Commission.

Recommended: How to Manage Your Money Better

Other questions you may want to ask before hiring a reselling agent:

•   How do you plan to advertise and promote the timeshare unit?

•   Will I get progress reports and, if so, how often?

•   What fees do you charge, and when do they have to be paid?

It’s generally preferable to do business with a reseller that takes its fee (or commission) only after the timeshare is sold.

If you must pay a fee in advance, however, it’s wise to ask about refunds, and to get all refund policies and promises in writing.

💡 Quick Tip: If you’re creating a budget, try the 50/30/20 budget rule. Allocate 50% of your after-tax income to the “needs” of life, like living expenses and debt. Spend 30% on wants, and then save the remaining 20% towards saving for your long-term goals.

5. Hiring a Timeshare Exit Company

The concept is good. With a timeshare exit company you often get a small army to handle your business.

A good one knows the inner workings of the timeshare industry, which could be advantageous to you.

One major caveat is that these services generally don’t come cheap–prices vary considerably, but can be as high as $4,500.

It’s also important to be aware that there are many bad apples out there. There have been numerous lawsuits against timeshare exit companies that backed out of their payment agreements with customers.

To help ensure that an exit company you’re thinking about hiring is reputable, you may want to check with the Better Business Bureau, and also search online, to see if there have been complaints about the company and (most importantly) how they have handled those complaints.

You can also protect yourself by refusing to make any payments before a contract has been signed by both parties.

Recommended: 5 Reasons to Switch Banks

The Takeaway

Unloading a timeshare property isn’t always easy, but some of your exit options include: backing out during the “rescission period,” reselling it yourself, hiring a broker to resell it for you, and hiring a timeshare exit company to take care of the whole separation process.

It’s important to understand all of your options (and the potential pitfalls of each) in order to choose the best solution for your situation.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall. Enjoy up to 4.60% APY on SoFi Checking and Savings.

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SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

This article is not intended to be legal advice. Please consult an attorney for advice.

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Those moments right after a car accident deliver some of the worst stress imaginable. You’re figuring out if anyone is hurt and how bad your car’s been damaged. And before too long you’re asking yourself this stomach-churning question: “How much will my insurance go up after an accident?”

There are many factors at play, including who was at fault, how serious the injuries and damage, your driving record, what state you live in, and the policies of your chosen insurance company.

Understanding these factors and digging into the forces controlling car insurance rates can help you pursue the best options possible.

Why Do Rates Go Up After an Accident?

Auto insurance is a highly competitive business, and that competition plays a role in keeping rates low. But it also means that when an accident happens, there can be quite a jump in what you pay for coverage.

When you’ve had a car accident and you are at fault, your insurer now assumes you drive in a way that could cause an accident. That may sound unfair, but that’s part of how car insurance works. They are assuming a higher risk, and that is passed on to you in the form of a higher rate.

If you are found not at fault in the accident, your insurance rate may go up by a small percentage. California and Oklahoma are two states, however, that mandate insurance companies cannot raise insurance rates after an accident where the driver was not at fault.

This is yet another reason why it’s important to go over policies carefully when making your choice. It’s smart to compare the rates among top insurers and even look at how much insurance increases after an accident with various insurers.

There is one bright spot in the insurance landscape when dealing with an accident. If your insurer offers and you elect to pay for accident forgiveness, your insurance rate will not go up after your first at-fault accident. Driving record and driving experience requirements must be met before this benefit is available.

Recommended: Auto Insurance Terms, Explained

Average Rate Increases by State

After an at-fault accident, yes, your car insurance is likely to go up. Rates can increase by about 50% a year on average after an accident, according to 2023 WalletHub research. But as the Forbes Advisor analysis below shows, just how much your rate jumps can depend on the state in which you’re insured and whether the accident caused injuries and/or property damage.

Average Car Insurance Rate Increase After an At-Fault Accident
State	Average Rate Increase (%) After At-Fault Accident With Property Damage	Average Rate Increase (%) After At-Fault Accident With Injuries
Alabama	44	43
Alaska	46	53
Arizona	47	48
Arkansas	47	48
California	72	97
Colorado	35	33
Connecticut	51	52
Delaware	34	34
Florida	38	39
Georgia	47	47
Hawaii	37	37
Idaho	37	37
Illinois	49	49
Indiana	48	48
Iowa	45	47
Kansas	41	41
Kentucky	53	53
Louisiana	48	48
Maine	40	41
Maryland	52	52
Massachusetts	67	67
Michigan	45	45
Minnesota	41	42
Mississippi	46	47
Missouri	36	37
Montana	41	41
Nebraska	48	48
Nevada	43	44
New Hampshire	55	55
New Jersey	42	43
New Mexico	37	37
New York	40	40
North Carolina	79	90
North Dakota	39	39
Ohio	45	45
Oklahoma	44	44
Oregon	42	43
Pennsylvania	47	51
Rhode Island	55	45
South Carolina	39	39
South Dakota	42	42
Tennessee	44	45
Texas	54	54
Utah	44	44
Vermont	47	47
Virginia	45	45
Washington	36	37
West Virginia	41	41
Wisconsin	50	50
Wyoming	31	31

Source: Forbes Advisor

How Do I Keep My Rates Low After an Accident?

If you’ve had a car accident, there are some things you may be able to do to keep your car insurance rates from rising.

First, explore discounts that you may have overlooked. Check with your insurer to make sure you’re receiving discounts you’re eligible for.

•   If you haven’t already signed up for paperless billing, now might be a good time to take advantage of the discount you may receive with this option.

•   The number of miles you drive annually is one factor that goes into calculating your insurance rate. Check with your insurer to make sure your rate correctly reflects your annual mileage.

•   Consider a usage-based insurance that tracks different elements of your driving habits and sets your rate accordingly. Better driving habits equate to lower rates.

•   Ask about multi-policy discounts if you have all your policies with one insurer.

•   Check into military and government employee discounts.

Another tactic that might be worth pursuing if you’ve had an accident but are looking for ways to decrease your car insurance rate is to increase your deductible. The higher your deductible, the lower your premium.

Look into how much insurance you’re carrying on the car. It’s worth your time to determine how much coverage you need. If your car is worth less than the deductible plus your annual total for car insurance, it could be time to rethink your coverage.

And another thing to scrutinize is what kind of car you drive. Some cars are cheaper to insure than others.

When Does Car Insurance Go Down After an Accident?

Generally speaking, it takes three to five years for car insurance to go down following most at-fault accidents. The insurers are going by the statistical wisdom that if you’re in one accident, the chances are higher that you will be in another. Some insurers also take into account the seriousness of the accident and whether impaired driving was a factor in the accident.

One tactic people employ to lower their rates is to shop around for a new insurer. While the record of the accident and claim will be visible to a second insurer, you may still be able to get better deals.

Your insurance rates will also be affected by your credit. Merely being involved in an accident will not damage your credit, but an improvement in your credit score can be used as leverage in getting a lower premium.

Don’t rule out getting a brushup on your driving to improve those skills. Some insurance companies will discount your rates if you complete a defensive driving or driver education course.

Recommended: Cost of Car Insurance for Young Drivers

The Takeaway

The question of how much does car insurance go up after an accident has an answer that can seem hard to figure out. Rates can go up by about 50% a year on average after an accident. But that figure may fluctuate depending on a variety of factors including who was at fault, the seriousness of the accident, your driving record, and to a surprising degree, the state in which you live.

Taking the opportunity to compare car insurance companies before committing to a policy can be a smart move that might save you money on your insurance rate. When you’re ready to shop for auto insurance, SoFi can help. Our online auto insurance comparison tool lets you see quotes from a network of top insurance providers within minutes, saving you time and hassle.

Compare quotes from top car insurance carriers.

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Photo credit: iStock/simpson33

Insurance not available in all states.
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Supplemental income is money that is earned above and beyond a person’s “regular” income, which, for most people, is earned through working a job.

Supplemental income could include income earned through a side hustle, or it could include money from a regular job that is extra: bonuses, overtime pay, tips, commissions, and so forth.

For many people, supplemental income can amount to “extra” money beyond what’s needed to cover their regular expenses. And there are some smart ways to handle that extra income, which may help people reach their financial goals sooner.

What Is Supplemental Income

As noted, supplemental income is money that is earned or otherwise accumulated beyond a typical income stream, like a paycheck. That can include bonuses or tips earned while working a job, too.

Supplemental income can also be earned in the form of a commission, by accumulating dividends on investments, or even by working a second job or side hustle.

There are numerous ways to tap into supplemental income streams, though that doesn’t mean that it’s necessarily easy. You should also know that there are generally two types of supplemental income: Active, and passive.

•   Active income: This is often defined as trading time for money. The person puts in time, whether that’s through taking photographs for websites or walking dogs, and is paid for their services in exchange. It’s a typical job, in other words.

•   Passive income: This kind of work involves little to no active investment in time once the gig is established. It could involve selling an uploaded ebook or affiliate marketing, as two examples.

For many people, a side hustle or second job is likely the quickest route to earning supplemental income. But there are government programs out there, too, that can help those in need, like the Supplemental Security Income program (SSI).

A Note About Supplemental Security Income

Supplemental Security Income (SSI) is a program administered by the Social Security Administration. SSI provides payments to people over the age of 65 who have a disability, including being blind or deaf. To qualify for Supplemental Security Income, people must also have limited financial resources, in addition to meeting the age and disability requirements. The purpose of the program is to help people meet their basic needs.

As the program is designed to help people meet their basic needs, some of the suggestions for handling supplemental income may not be applicable to those earning SSI benefits.That’s because those who do receive those benefits likely won’t have much room in their budget for additional spending, or the need to find ways to deploy that additional income — they’ll need it to cover their basic expenses.

Launching a Side Hustle

When choosing a side hustle or second job, it makes sense to pick one of interest to you; or, even better, one that inspires passion. This can help to prevent boredom and make it more likely that time and energy will continue to be invested in this income-generating activity. What hobbies, for example, can be monetized? Blogging? Making crafts or designing websites?

Ask yourself further questions: How much time can be invested in this side hustle? Can the required time ebb and flow as demands at the main job fluctuate? What resources are available to get started? And, perhaps most importantly, what’s the estimated earning potential?

Having a second job or side hustle isn’t terribly uncommon these days, as many people either need the extra money to make ends meet, or are looking for ways to pad their earnings to add to their savings or investment accounts.

One benefit of side hustles that are based on passive income is that, although work typically needs done up front to establish the side hustle, it shouldn’t need ongoing active involvement. And whether you’re renting out a room in your house, monetizing a blog, or writing ebooks to earn supplemental income, it’s important to keep some things in mind as you start to see that income roll in.

Tips for Using Your Extra Income

1. First, Manage Your Income Taxes

When working for an employer, relevant income taxes are typically withdrawn from each paycheck but, with a side hustle (one that doesn’t involve working for an employer and receiving a paycheck, that is), the worker is responsible for paying federal taxes, FICA, Medicare tax, and any state and local taxes on net income.

That’s because a “hustle” or “gig” is typically a form of self-employment. To help, the IRS has created a Gig Economy Tax Center with plenty of resources and pieces of important information, including that income taxes must be paid on side gig income of $400 or more annually.

Those earning money from a side gig may also need to pay estimated quarterly taxes. The deadline for these payments are:

•   April 15 for payment period January 1–March 31

•   June 15 for payment period April 1–May 31

•   September 15 for payment period June 1–August 31

•   January 15 for payment period September 1–December 31

At the tax-filing deadline, (typically mid-April), a Schedule C usually needs to be filed for people earning money in a self-employed side gig — and, when earning supplemental income, it’s important to deposit enough in a bank account so that funds don’t fall short when tax returns need to be filed. What’s left over after taxes are planned for can be spent in a variety of ways, some ideas might include:

•   Paying off “bad” debt.

•   Establishing an emergency savings account.

•   Saving and investing.

•   Enjoying some discretionary spending.

2. Paying Off “Bad” Debt

Bad debt can be defined, in general, as debt you acquire that results in a net loss. For example, going into debt for a vacation, a big party, clothes and/or gadgets doesn’t add to your net worth. Going into debt for your education or home may gradually add to your net worth in the future.

Bad debt can also refer to loan or lines of credit with higher interest rates, and which are harder to pay off as a result. Supplemental income can be used to pay this debt down or off.

Debt management plans to pay off debt include the snowball or avalanche methods — and a combo of the two, the fireball method. Different strategies work better for different people, so it can be worth experimenting with them to make the best choice.

With the snowball method, list bad debts by the amount owed, from the smallest to the highest. Include credit card debts, personal loans, and so forth. Then, make the minimum payment on each but put extra funds on the one with the smallest balance to get it paid off. Once that balance is zero, home in on the debt with the second smallest balance and keep using this strategy until all bad debt is paid off. Avoid using credit cards during this time.

With the avalanche method, list bad debt in order of its interest rate, from highest to lowest. Make minimum payments on all of them and put extra funds on the one with the highest rate. Pay it off and then move to the next highest rate, and so forth.

With the fireball method, take “bad” debt with interest rates of 7% or more and then list them from smallest to largest. Make the minimum payment on all and then put excess on the smallest of the “bad” debts. Rinse and repeat.

3. Establishing an Emergency Savings Account

Another smart idea is to put supplemental income into an emergency savings account. This can be accomplished in conjunction with a debt payment plan (put half of the excess funds into an emergency account and use the other half to pay down bad debt, for example) or as a single focused goal.

Funds in this account are intended for use if a financial emergency occurs. This can be a leaky roof that requires immediate attention, a significant car repair, or unexpected medical bills. Having a robust emergency fund can help to prevent the need to rely on credit cards to address unanticipated expenses.

It is commonly suggested that emergency savings accounts should contain 3-6 months’ worth of expenses. So, add those monthly bills up and multiply by three — and also by four, five, and six. This gives a range of the rainy-day fund’s goal.

4. Saving and Investing

You could save or invest your extra money! This can include saving for personal goals, from a down payment on a house to a vacation fund, and or for retirement. What’s important is to prioritize how it makes sense to use extra money being earned and then save and invest to help meet those goals. How you save or invest that money would be up to you, but you could look at some common investment choices including stocks, bonds, mutual funds, and alternative investments, and more.

5. Enjoy Some Discretionary Spending

Once the financial “need-to” items are checked off the list, it can be okay to use some supplemental income to have fun. You could update your wardrobe, buy a new video game, take in a movie, or even go out to a nice dinner. If it’s within your budget parameters, treating yourself every now and then can be a nice thing to do.

Plus, getting a taste of the finer things may help keep you motivated to make sure your spending stays in check and that you stick to your budget going forward.

The Takeaway

Supplemental income is extra income earned beyond your primary income stream, and finding ways to drive supplemental or secondary income can help you reach your financial goals sooner. It can also help you free up some room in your budget to potentially treat yourself every now and then.

You can also put that extra money to work, by saving it and earning interest, or investing it for the future.

Ready to use extra funds to invest in your goals? It’s easy to get started when you open an Active Invest account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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