Spend Your Money More Wisely by Making a Personal Budget

Spend Your Money More Wisely by Making a Personal Budget

Sean Cooper |Aug 1, 2019

Get Your Finances in Order

Creating a personal budget may seem complicated, but it doesn’t have to be. A budget helps keep your spending in line and it helps meet long-term goals. In this article, we’ll look at how to make a personal budget. We’ll cover analyzing your spending, income versus expenses and how to divvy up your payments, among other things.

How to Begin Analyzing Spending

Before you make a personal budget, it helps to analyze your spending. By analyzing your spending, you can see where all your money is going. Thankfully in today’s increasingly cashless society, analyzing your spending is easier than ever before. The simplest way to analyze your spend is to review your credit card statements, bank account statements and receipts.

If you’re like most people and you use your credit card most of the time, this may be your one and only step. Many of us get into the habit of blindly paying our credit card statements without taking the time to review our expenses line by line. By taking the time to review each and every expense line of your credit card statement, you could not only spot possible fraud and duplicate charges, but also get a good snapshot of where your money is going. For example, spending $5 here and there on coffee may not seem like a lot, but when you realize that you’re spending $150 a month on the “occasional” coffee, it can be a real eye-opener.

Once you’ve reviewed your credit card statement, you’ll want to shift your focus to your bank account statements. Even if you don’t use your debit card a lot, reviewing your bank account statement is an important second step. Most of us have bills automatically coming out of our bank account (some companies don’t let you charge some bills on your credit card). For that reason, you’ll want to review your bank account for charges. This will remind you of any expenses you may have forgotten about. It will also give you a good idea about how much money you have coming in on a monthly basis (remember that your paycheck is after tax, not before tax).

The last step may not be necessary for some, but if you find yourself using cash to make purchases on a regular basis, you’ll want to get into the habit of holding onto receipts, if you aren’t already doing so. To make things easier, you can create a file folder of receipts in your filing cabinet at home. Once a month you can add up and categorize your receipts. For example, you can create a category for food, transportation, entertainment, etc.

By taking the time to review your credit card statements, bank account statements and cash receipts, you can truly analyze your spending for the last few months.

Income versus Expenses

In a budget, you have income and expenses. Simply put, income is any money that you have coming in, while expenses is any money you have going out.

All things considered equal, you tend to have less control over your income versus your expenses. If you are a full-time permanent salaried employee, you can pretty much rely on your paycheck. However, for those who work on commission, your paycheck is determined based on how you perform, making it more difficult to budget.

If you find that your income isn’t enough, there are things you can do to boost it. For example, you could get a part-time job or take on a side hustle, such as writing or photography.

When budgeting, remember to use your after tax (net) income instead of your before tax (gross) income, since household expenses are paid with after tax dollars.

When compared to income, we tend to have a lot more control over our expenses. Expenses can be divided into two broad categories: fixed and variable expenses. Fixed expenses are expenses that generally stay the same on a monthly basis — for example, your mortgage payments, home insurance and gym membership. Meanwhile, variable expenses can change on a monthly basis. Examples of variable expenses include water, heat and hydro.

By reviewing your fixed and variable expenses on a regularly basis, you can make sure you’re getting good value for your spending. If you find you’re spending more than you make, that’s a problem. You can take corrective action and adjust your spending to bring it back in check, so you’re not running a deficit on a monthly basis.

How to Divvy up Payments

Instead of just lumping all your expenses (payments) into two broad categories, fixed and variable, it helps to further divvy them up. You can divvy up your payments however you like, but I find it helps to have spending categories. For example, you can have spending categories related to your home, including mortgage, home insurance, utilities, repairs and maintenance. Outside your home, other spending categories you might have include groceries, transportation, dental, medical, clothing, gifts, restaurants, travel and more.

When creating a budget, instead of simply saving whatever money is left over, it helps to make savings a priority. You can do that by allocating a portion of your income to savings. Rather than just creating a broad savings category, it helps to create savings subaccounts with specific purposes — for example, an emergency fund, family vacation, down payment, etc. By treating savings as a priority, you’re more likely to meet your savings goals.

Likewise, it’s a good idea to allocate a portion of your paycheck toward debt repayment. Whether you have student debt, a line of credit, car loan, mortgage or credit card debt, by allocating a portion of your income in your budget toward paying those off, you’re more likely to have money left over after you’ve paid all your bills to actually make those debt payments.

Once you’ve divvied up your paycheck between payments and savings, ideally every single dollar will be allocated. It’s okay if you have a $100 surplus, but ideally your budget will be equal to nil. However, if you find that there’s a deficit, you can adjust your budget to bring your spending in line.

How to Make Spreadsheets for Tracking

To make the most of your budget, it’s important to track your spending. Tracking your spending involves comparing the amount you have budgeted for a category against the actual amount you spent. If your spending is the same, you’ve come in on budget. If your spending is less, you’ve come in under budget. However, if your spending exceeds a spending category, you’ve come in over budget. If you do that on a regular basis, you’ll either need to reduce your spending in that category or increase the amount you have budgeted toward it.

It helps to use a spreadsheet to keep track of your expenses. A spreadsheet doesn’t have to be complicated. Start by listing out all the budget categories mentioned above. Next, you’ll want to create three headings: estimate, actual and difference. Estimate is for the amount you’ve budgeted for a spending category, actual is how much you spent in a spending category and difference is the difference between the two. As previously mentioned, ideally you’d like it to break even or be a surplus. If you have too many deficits in spending categories, you’ll come in over budget and not meet your savings and debt repayment goals.

What Should You be Aware Of

A budget isn’t worth the paper it’s written on if you don’t use it. Get in the habit of regularly reviewing your budget and making adjustments when necessary. By doing that, you’re more likely to stay on budget and meet your savings and debt repayment goals.

How Can You Allocate Money Appropriately?

Allocating money appropriately is key if you want your budget to be as accurate as possible. You can allocate money appropriately by doing the first step in this article. By analyzing your spending, you can see how much to realistically set for various spending categories in your budget, rather than simply plucking numbers out of thin air. This in turn will help ensure your budget is as accurate as possible.

By doing the work up front of analyzing and tracking your spending on a regular basis, you can get the most out of your budget by ensuring it’s the most accurate possible.

How to Save in Certain Areas

For most families, the big three categories are shelter, food and transportation. By looking for ways to save in those areas, you can boost your overall savings rate. If you could save 5 or 10% in each of those spending categories, you could come up with an extra $100 per month or more. Not bad!

In terms of shelter, it’s a good idea to create a mock budget before you move into a place. List what all your expenses would be outside just the mortgage or rent. Examples of expenses include utilities, home insurance, repairs and maintenance. By doing that, you’re less likely to be blindsided by costs later on. You’re also less likely to find yourself in a situation of being “house rich, cash poor,” with all of your money going toward your shelter costs and little money to save, let alone have fun.

You can save money on food by cooking at home more often and dining out less. You can do this by cooking your meals in advance for the week, so you’re less likely to rely on fast food on those busy weekday evenings. Likewise, instead of buying your groceries at premium supermarkets, shopping at discount supermarkets will allow you to purchase food that’s often just as good quality for a lot less.

Saving money on transportation largely depends on the makeup of your household. For example, if you have children, taking the bus everywhere probably doesn’t make sense; but perhaps instead of owning two cars, you might be able to get away with owning only one. But if two cars are a must, you can try to stretch your vehicle buying dollar further by purchasing a two- to three-year-old used car from a registered car dealer instead of driving a shiny, brand-new car off the lot and having it lose half its value during that time.

These are just a few creative ways to save money. I’m sure you can come up with your own.

What to Focus On: Paying off Debt in a Realistic Way

If you have high-interest consumer debt, such as credit cards, you’ll want to focus on getting that paid off sooner rather than later. If you’re only paying the minimum payment, not only will it take you a long time to pay off, it will cost you a boatload of interest.

When setting a budget, similar to dieting you want to make sure it’s realistic. If you set a budget that’s too strict, you’re setting yourself up for failure. If you want to pay off your debts sooner, you’ll need to find extra ways to earn income, cut your expenses or both.

Again, make sure they are realistic and sustainable. If you’re working a nine-to-five job, working until midnight every night in retail probably isn’t realistic, but working a couple evenings a week until 9 p.m. might be.

Likewise, saying that you’ll spend nothing on entertainment probably isn’t realistic, but making plans to skip the movies once a week and watch a movie at home probably is.

With the extra money you save, you can put it toward debt repayment and reach your goal of debt freedom sooner.

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Everything You Need to Know About Filing Your Own Taxes

Katie Macomb | August 1, 2019

It's Not Fun, but It Has to be Done Benjamin Franklin wrote a 1789 letter that states, “But in this world nothing can be said to be certain, except death and taxes.” Even at the United States’ early beginnings, federal taxes were a necessary evil to fund various public projects and administrative costs. Today, federal taxes serve much of the same purpose. While virtually no one likes to prepare and file their taxes, it is a necessity if you want to avoid fines and further hassle. It is no secret that preparing and filing your taxes is notoriously complicated. Many people lament that it should not be so difficult to pay the government. However, some of the complications allow people to save money if they discover specific tax benefits. Knowing how to file your own taxes may be a good option if your tax situation is relatively straightforward, or if you are willing to learn the process. Why Do You Need to File Your Taxes Every Year? The short answer is that federal law requires that most individuals file taxes annually. Income taxes are assessed every year based on your income earned during that period. You then pay a percentage of that income to the government, less any deductions, adjustments, or credits that you qualify to receive. If you do not file (and pay) your taxes, then you may be assessed penalties and interest. The Internal Revenue Service (IRS) can even go as far as garnishing your wages and repossessing your property if you do not file and pay as required. The Benefits of Filing Your Own Taxes If you are one of the 43% of Americans that are doing your own taxes, you are certainly not alone. Roughly 53 million people prepared and filed their own taxes in 2018. There are many benefits to filing your own taxes, including: Saving money: Hiring a tax professional is expensive, and many people can prepare and file their returns on their own, completely free of charge. Control: Some people like knowing the exact information that is included in their return and being able to control the data, and for some, knowing precisely how the numbers work out, is comforting. Gain helpful information: When you prepare your taxes, you can see what items saved you money this year or which issues you should address so you can save money next year. While filing your own taxes is complicated, it can be beneficial under the right circumstances. There are several programs online that walk you through the process to help ensure you are taking advantage of all of your available deductions and credits. The Drawbacks of Filing Your Own Taxes In addition to the benefits, there are also some disadvantages to filing your own taxes. These include: Time and effort: Preparing and filing your taxes takes time and work You have to sift through financial information and deal with concepts that you may not understand well. The process can be frustrating and take a considerable amount of time. Error risk: If you do not completely understand how your taxes work, you run the risk of making a mistake because of misconceptions. If that happens, it could lead to underpayment and audits down the road. Questions: Even if you use a tax preparation software, you may still have questions that will remain unanswered unless you do significant research or reach out to a tax professional. For some people, the risk of having a substantial error that triggers the IRS’s attention is enough to scare them away from preparing their own taxes. Preparing for Filing Your Taxes When you begin work on your taxes, you should have information gathered throughout the year. Some of the most common items that you will need include: Social Security numbers for you, your spouse, and any dependents Information about wages, such as W2s or 1099s Investment income information Documents that represent any other source of income Information regarding adjustments to income, such as student loan interest paid, IRA contributions, and health savings account contributions, just to name a few Information regarding potential credits, including, for example, child care expenses, education expenses, or retirement savings contributions Data about any tax payments that you may have made throughout the year Keeping good records will help make tax preparation easier at the beginning of the year. [youmaylike] The Basics About What You Can Claim When Filing You must pay income taxes on all your income earned throughout the year. However, that income is reduced by a few things. The further you can reduce your taxable income, the less you tax you will pay. There are three general categories of tax reduction methods: Standard or Itemized Deductions Everyone can claim either the standard or itemized deductions. Standard deductions are a set amount that is based on your filing status. Itemized deductions are based on actual expenses that you incurred throughout the year. You can choose to use the higher deduction. The higher the deduction, the less tax you will have to pay on your income because your income decreases on paper. Itemized deductions include things like medical expenses, state and local tax payments, and home mortgage interest deductions. Itemized deductions will only decrease your income by a certain percentage, or up to a specific point. Adjustments Some adjustments to your income may also be available. These include things like paying student loan interest or alimony. Adjustments are more valuable compared to deductions because they decrease your income dollar for dollar. Credits A credit decreases your taxable income as well. Some credits are refundable while others are not. For example, you get a child tax credit simply for having children that qualify for that credit, but that credit will not be paid out to you if you do not have any tax obligations. On the other hand, the Earned Income Credit, which is available for low-income filers, will be refunded to you even if you do not owe any taxes. There are a wide variety of deductions and credits available. Take a look at the federal forms and related schedules to determine whether you might qualify for any of these. How to File Your Own Taxes If You Live Overseas If you earned income in the United States as a U.S. citizen or resident alien, you likely need to pay taxes on that income. This is true even if you live overseas. You can still choose to e-file or mail your tax return to the IRS once you have it prepared, just as if you physically lived in the United States. In some cases, you will be taxed on the income that you earned throughout the world. However, you may be able to deduct a portion or all of the revenue that was not made in the United States in some circumstances. Filing Online The IRS offers an online filing option that is free for individuals that have an adjusted gross income below a specific threshold. Generally, your income must be below $66,000 to qualify for this service. You can also file online by using a commercial tax preparation software. Examples of this type of software include: H&R Block TurboTax TaxCut TaxSlayer There are many programs available that will file your taxes for you, often for a fee. Knowing how to file your own taxes can be a great way to save money, but it can be tricky as well. If you want to file your taxes yourself, be sure to read the form instructions thoroughly and get familiar with various tax saving opportunities before you begin preparing your return.

5 of the Best Investment Apps for Beginners

Stephanie Colestock | August 1, 2019

Make Investing Simple Whether you’re putting away your first $1,000 or have been saving for the future for years, you’re going to want to consider investing your funds at some point. Doing so will allow you to maximize returns and exponentially grow your savings. Unfortunately, the investment process can be pretty intimidating, especially if you are starting out on your own. It’s hard to know how to begin, where to invest, how to balance your portfolio and even what sort of fees you should expect to pay along the way. That’s where the convenience and ease of today’s best investment apps can come into play. What Are Investment Apps? Once upon a time, your only choice for investing was to pick up the phone and call your stock broker to initiate a trade. You were charged for the service, either based on commission or as a flat fee per transaction. While stock brokers are still an option, you can take investing into your own hands these days, without ever needing to talk to another human. And it’s all thanks to investment apps and platforms. Today’s apps offer a range of services and features. With them, users can: Research funds and individual stocks View fees and expenses related to investment choices Invest funds on-the-go, and even automate regular contributions Automatically reinvest earnings on current investments Adjust portfolio for personal risk tolerance View performance projections Choose funds or individual stocks that align with personal beliefs, through portfolios based on socially-responsible missions The best part? Investing through trusted apps is usually cheaper, faster and you’ll have instant access to your portfolio/reports at any time of day. Not only that, but you’ll also be able to set your investment risk tolerance, rebalance your portfolio and even reinvest earnings automatically. Who Are Investment Apps Designed For? Whether you’ve been playing the market for ages or are ready to invest your first $100, the right investment app is worth considering. For those new to the stock market, apps will simplify the process and put the power of investing at your fingertips… literally. From your phone or computer, you can easily see portfolio recommendations based on your own goals, savings plans and even risk tolerances. The right app will tell you up front how much you can expect to spend in fees throughout the year, and can even allow you to automate many of the more confusing aspects, such as picking well-performing stocks or even rebalancing. While investment apps are ideal for beginners, newbies aren’t the only ones who will see the benefits. Even seasoned investors will find the process easy to use, and may even learn that these platforms can maximize returns (and save them money in fees) along the way. Not to mention, many investment apps offer additional insight into specific funds, so you can choose to invest in companies that align with your own passions and beliefs. Now that you know why you should consider using an investment app for your own savings, let’s take a look at some of the best ones available today. Best Investment Apps Great for Beginners: Acorns Fees and Expenses: For investors with less than $1 million invested, fees are between $1-3 per month depending on the account option you choose. Acorns is also free for college students. Beginning Investment Requirement: At least $5 to start Types of Investments Available: ETFs (exchange-traded funds) Portfolio Options: Conservative, Moderately Conservative, Moderate, Moderately Aggressive, Aggressive Automatic Investing?: Yes Automatic Reinvesting?: Yes Automatic Rebalancing?: Yes If you want an easy, hands-off approach to investing that won’t leave your head spinning, Acorns is a great first choice. This app not only simplifies investing for beginners, but allows investors to completely automate the process from start to finish. After connecting the app to your debit card, the app will “round up” each of your daily purchases, putting the savings into an investment holding account. Once you reach the minimum required, Acorns will invest this money on your behalf, based on your account preferences. The app will also reinvest your earnings, as well as rebalance your portfolio when necessary. [youmaylike] Great for Truly Free Investing: Robinhood Fees and Expenses: Robinhood is a free investment platform in every sense of the word, pledging to never charge company fees or commissions to customers. Beginning Investment Requirement: You’ll need $2,000 to get started Types of Investments Available: ETFs, stocks, cryptocurrency and options Portfolio Options: Interest-based options such as Fashion ETF, Tech ETF and Energy ETF, as well as a standard S&P 500 ETF, all with personal risk tolerance settings. You’ll also find “collections,” which are individual stocks grouped according to specific interests — such as companies with female CEOs or that are in the social media sector. Automatic Investing?: No Automatic Reinvesting?: No Automatic Rebalancing?: Yes A great option for beginners and experienced investors alike, Robinhood makes the process both easy and affordable. How affordable? Well, it’s entirely free. By offering a truly free experience, Robinhood saves investors some serious cash over time. Additionally, the platform makes it easy to choose individual stocks or ETFs based on personal interests. If you want to invest in cryptocurrency or options, you can also do so through Robinhood. One of the biggest limitations of the platform, though, is its automation. While you can set up automatic deposits into your account, you will need to manually invest those funds and then reinvest (or withdraw) your dividends. Stash Fees and Expenses: $1 per month fee for those with less than $5,000 invested, or $2 per month for retirement accounts with less than $5,000. For users under 25, fees on retirement accounts are waived. If you have more than $5,000 invested, your fee will be 0.25% annually. Beginning Investment Requirement: You’ll need at least $5 to begin investing (fractional shares are available) Types of Investments Available: ETFs (exchange-traded funds) and fractional stock shares Portfolio Options: Too many to name, ranging from things you Want (portfolios that are conservative to aggressive mixes), things you Believe (such as groups of companies that believe in clean energy, LGBT rights, etc.), and things you Like (tech, retail and social media companies). Automatic Investing?: Yes Automatic Reinvesting?: No Automatic Rebalancing?: No The closest competitor to Acorns, Stash seeks to make investing easy for everyone, regardless of your goals and passions. They have three account options to choose from, allowing you to manage your investment and retirement accounts, or even a child’s education savings through custodial accounts. With Auto-Stash, you can set any number of automatic investment options and transfers. However, Stash will not rebalance your portfolio for you, nor will they reinvest dividends on your behalf. Wealthfront Fees and Expenses: 0.25% annually Beginning Investment Requirement: $500 minimum initial investment Types of Investments Available: ETFs (exchange-traded funds), individual stocks, retirement accounts (401k, IRA), 529 savings plans, trusts Portfolio Options: 11 asset classes to choose from, including natural resources and real estate Automatic Investing?: Yes Automatic Reinvesting?: Yes Automatic Rebalancing?: Yes Wealthfront’s investment platform is designed to be friendly for users of all experience levels. If you’re a seasoned investor, you’ll enjoy all of the options available to you, including the ability to manage your retirement accounts, education savings, and even non-profits or trusts. If you’re a newbie, their free financial expertise center is the perfect place to learn all about investing and your future. TD Ameritrade Fees and Expenses: The managed, automatic portfolio investment option (called Essential Portfolios) is available with a 0.30% advisory fee Beginning Investment Requirement: $5,000 minimum for managed portfolios (no minimum requirement for traditional trading) Types of Investments Available: Stocks, ETFs, options, mutual funds, futures, bonds/CDs, Forex, cryptocurrency Portfolio Options: Essential Portfolios (EP) offer investors a range of options from Conservative to Aggressive, based on your individual passions, preferences and tolerances Automatic Investing?: Yes, with EP Automatic Reinvesting?: Yes Automatic Rebalancing?: Yes A more traditional brokerage app, TD Ameritrade is one of the most recognizable names in the industry. You can easily educate yourself on all things financial, thanks to their free videos and posts. If you want a traditional experience, you can choose your trades and pay per transaction. Prefer a more streamlined, automated approach? Opt for their Essential Portfolios, a hands-off investment option (robo-advisor) that charges a flat monthly fee and requires little-to-no oversight from you. Plus, their app makes the investing process easier than ever with a user-friendly interface, price alerts and no minimum to get started. If you prefer a desktop experience, this is also available to you through TD Ameritrade. Bottom Line Getting started with investing can be intimidating. With all of the terminology and account options out there, it’s easy to want to run and hide. Thanks to some of today’s best investment apps, though, you can not only get started with your first portfolio but also watch your money quickly grow… no matter how much of a beginner you may be! It’s important to choose an app that offers you the portfolio options and features you want most, with fees and deposit minimums that match your financial needs. The five apps above are our favorites for beginners, making that first foray into investing easier than ever before. The hardest part will be choosing the one you love most!

5 of the Best Auto Insurance Companies

Eric Bank | August 1, 2019

Protect Against Collisions and More If you drive a car in the United States, liability insurance must cover it. This type of policy pays for medical and property damage resulting from a vehicular accident. You can also purchase comprehensive and collision insurance to cover other costs. These additional coverages help protect the value of your car should it be damaged. If you are calculating how much it will cost to buy a car, you need to take into consideration the cost of insurance as well. In this article, we’ll review the basics of car insurance and the best auto insurance companies in America, including costs, pros and cons. This is a brief introduction to automobile coverage. Liability Coverage When an accident occurs, liability insurance covers you, household members and authorized drivers for the costs associated with property damage and bodily injury. It covers the cost to repair or replace property damage that you caused. You are also covered if you cause the bodily harm or death of someone else while you are driving the car. This includes medical expenses, loss of income and specified legal defense costs. Collision Insurance If you are involved in a collision, this type of insurance will help pay for repairing or replacing your vehicle. If the collision is your fault, the coverage may extend to other damaged vehicles involved in the accident. States do not mandate that you buy collision insurance, but your lender or car dealer will if you finance or lease the car. Policies offer a range of deductibles, which is how much you’ll have to pay for repairs before the insurance kicks in. Larger deductibles lower the policy premiums but expose you to more out-of-pocket expenses if a collision occurs. Comprehensive Insurance Comprehensive insurance covers damage to your car that occurs for reasons other than a collision, including theft, fire, vandalism, weather and natural disasters. This coverage is often required if you finance your automobile. You can add riders to this insurance to provide coverage of additional costs, including auto towing, glass repair, daily rental while your car is in the shop and emergency roadside service. As with collision insurance, you can set the deductible on your comprehensive insurance policy to cut your premium costs. Gap Insurance If your car is severely damaged in an accident or other incident, you might find that your comprehensive and collision damage won’t provide enough coverage to pay off the amount you owe on the vehicle. Many policies pay only the fair market value of a totaled car, which might be only 80% of the amount you owe. You can buy additional insurance to plug this gap and ensure you can pay off the car loan in full if the vehicle is destroyed or stolen. Normally, car leases require you to buy gap insurance. If you pay cash or pay off your loan, you can save money by avoiding or dropping gap insurance when no longer needed. Top Five Auto Insurers These five insurers all offer full coverage policies and many additional services. Amica Amica is a superstar among car insurers, winning accolades from Consumer Reports and J.D. Powers. It’s known for handling the claims process smoothly. Average annual cost for full coverage: $1,360. Pros You can have your car repaired at any body shop, without restrictions. Offers a premium package which, for additional cost, provides full glass coverage, rental coverage, good driving rewards and identity fraud monitoring. Superior financial stability rating from A.M. Best. Cons Missing some discounts, such as military, low-mileage and prepay discounts. Must speak on phone to get a quote. Sparse website when it comes to customer education. [youmaylike] State Farm State Farm is the country’s largest multi-line insurance company. It excels in customer service and regularly garners high marks from customers. Average annual cost for full coverage: $1,337. Pros Superior financial stability rating from A.M. Best. Excellent online quote tool, getting customers a quote in as little as five minutes. Easy claim handling and top service from its more than 18,000 agents and its easy-to-use mobile app. Cons Doesn’t offer coverage for new car replacement or uninsured motorists. Missing prepayment and automatic payment discounts. The Hartford While only 11th in size, the Hartford is big when it comes to policy options. It offers rates based on your actual driving as well as full-replacement of new cars when destroyed shortly after purchase. Average annual cost for full coverage: N/A. Pros Solid benefits, including superior roadside assistance and towing programs. High marks from customers for their purchase experiences. One of the few insurers with mechanical breakdown coverage for out-of-warranty repairs. Cons Mediocre service interaction according to J.D. Power surveys. Sparse online learning materials. Geico Geico is the second-largest U.S. car insurer. It is a favorite among tech-savvy geeks who appreciate the insurer’s mobile app and excellent online service. Average annual cost for full coverage: $1,627. Pros Geico offers plenty of ways to save, such as multi-vehicle, driving history and vehicle safety equipment discounts. Special savings for active and retired military members and federal employees. Full-featured mobile app for getting quotes, buying insurance, managing your policy, submitting claims, summoning roadside assistance and making payments. Cons Human help may be in short supply, as just about everything is handled online. No gap insurance offered. USAA No insurer matches USAA for service to military members. Unfortunately, it's only available to active service members, their families and retired veterans. Average annual cost for full coverage: $896. Pros Superior financial stability rating from A.M. Best. Top-ranked purchase experience score from J.D. Power. Cons Missing gap coverage. Doesn’t offer interior vehicle coverage or new car replacement coverage. Limited availability. The Right One for You Competition in the insurance industry helps drive down prices and prompts insurers to offer money-saving features. For example, your carrier might reward you for a safe driving record and for having a long-term relationship with the insurer. The right insurer for you is one that is highly rated for service, offers the exact coverage you want and does so at an unbeatable price. You should always gather multiple quotes before selecting an insurer, and make sure you get credit for all applicable discounts.