She recommends you also talk to a contractor or appraiser who can give you an estimate of rebuilding costs per square foot in your area. But those estimates may rely on problematic industry software that could underestimate the costs, she says. You can ask your insurance company or agent to review your coverage and recommend appropriate limits, Bach says. Review your homeowners insurance coverageīuilding costs have been soaring, and your homeowners insurance coverage may not be keeping up.Ībout two-thirds of homeowners who lose their houses to wildfires or other disasters discover their insurance won't cover the complete cost of rebuilding, says Amy Bach, executive director of United Policyholders, an insurance-focused consumer advocacy group. A diversified portfolio of stocks is likely to outpace inflation over the long run, although the potential for short-term losses means you shouldn't invest any money you'll need within five years or so. You're limited to buying $10,000 in I-bonds electronically at each year and $5,000 more in paper bonds annually using your tax refund.Ĭonsider using excess cash to beef up your retirement accounts or investing that money in a taxable brokerage account, Henry-Moreland says. That's a great rate, obviously, but Series I-bonds have several restrictions: You can't withdraw money for the first 12 months, and you'll forfeit three months of interest if you withdraw money in the first five years. You could lock your vacation money into a one-year certificate of deposit (some online banks are offering 3% on those ), while the down payment could be invested in a Series I savings bond, which is yielding 9.62%. Perhaps you'll earmark some savings for the vacation you want to take in a year or the down payment on a house in five years. But you don't have to accept a brick-and-mortar bank's negligible return several online banks are offering interest rates of 2% or more on savings accounts. That money should remain somewhere safe and accessible, such as an FDIC-insured bank account, because you may need it at any time. For example, financial planners typically recommend maintaining an emergency fund equal to three to six months' worth of expenses. Setting goals and timelines for your cash also may help you get more for your money, Henry-Moreland says. If your credit card charges 18% interest, for instance, you're effectively getting an 18% guaranteed return by paying off that balance. You can get inflation-beating returns by using savings to pay down any high-rate, variable debt, such as credit card balances. "There's just no way that cash in the bank is going to keep up with inflation, so it's going to lose value," says certified financial planner Ben Henry-Moreland, who blogs at, a site for financial advisers.
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