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When are Airbnbs more cost-effective than hotels? | Smart Change: Personal Finance

When are Airbnbs more cost-effective than hotels? | Smart Change: Personal Finance

Remember the days when one of the best money-saving travel tips was booking an Airbnb versus a hotel? Not only were nightly rates almost always far cheaper, but the Airbnbs and hosts themselves often shaped up to be the most memorable aspects of a trip.

These days, staying at an Airbnb rarely involves big savings or friendships with the hosts. For better or for worse, features like self-check-in make it so hosts and guests never even meet. Meanwhile, many listings are not managed by owners, but by corporate property management behemoths — without the convenience of on-site, full-time staff.

And the cost? A June 2022 NerdWallet analysis looked at 1,000 U.S. Airbnb reservations for 2022 or 2023. Although there’s no way to compare the costs directly since every Airbnb is different, some key indicators provide clues as to when Airbnbs are better or worse than a hotel.

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In some cases, Airbnb rentals are still a good deal compared to hotels. Other times, they’re far from it.

LENGTH OF TRIP

For short stays, Airbnbs are rarely a good deal for two reasons: discounts and cleaning fees.







On The Money-NerdWallet-Airbnb Cost Considerations

NerdWallet looked at the price of 1,000 Airbnb listings and compared them to the cost of hotels. 




Savings get bigger with trip length: The nightly rate for the average seven-night Airbnb stay was 32{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} cheaper than a one-night stay, according to NerdWallet’s analysis.

— One-night stay: $314 median nightly price.

— Seven-night stay: $213 median nightly price (32{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} cheaper per night versus staying one night).

Why are longer stays cheaper? One reason is multiday discounts. Hosts offer these incentives because they’d prefer having fewer bookings to manage and ensure occupancy.

Another reason is cleaning fees. While not all listings have them, the median cleaning fee is $75, according to NerdWallet’s analysis. Since it’s a one-time fee, the cost is reduced by longer stays. A $75 cleaning fee stings more on a one-night stay versus a three-week stay, where it would amount to only about $3.50 per day. Since hotels typically don’t have cleaning fees, travelers staying a night or two might be better off with a hotel if Airbnb cleaning fees are steep.

SIZE OF GROUP

For solo travelers and couples, Airbnbs are typically more expensive (though NerdWallet’s study only looked at “entire place” properties, so people sharing a room or home might still save).

NerdWallet compared the price per head for Airbnbs with a max capacity of two adults against a hotel room in the same city. It also compared the cost of an Airbnb with a max capacity of six people against the cost to book three hotel rooms (assuming two adults per room).

The average Airbnb for six was 33{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} cheaper than booking three hotel rooms. But the average hotel was 29{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} cheaper than booking an Airbnb for two.

Here’s how median costs broke down, per person:

— Small Airbnb (fits two adults): $125.

— Large Airbnb (fits six adults): $60.

— Hotel room (fits two adults): $89.


Just how much do fees impact Airbnb prices?


Airbnb permanently bans parties at its rental locations

OTHER FACTORS TO CONSIDER

Of course, every traveler’s situation is unique, and other costs go into a trip beyond just sticker price. Ask yourself about:

TRANSPORTATION: Does the hotel charge for parking? Is there a free airport shuttle? Is the hotel downtown and walkable, whereas your Airbnb might necessitate a rental car?

STAFF AVAILABILITY: For Airbnbs, you might never meet the host or interact with any sort of staff. If you prefer to speak to a human (or simply need personal assistance for anything from getting directions to helping clean a mess), a hotel might have better offerings.

Then again, even hotels are still understaffed. The American Hotel & Lodging Association forecasts that hotels will end 2022 with 1.97 million employees, which is 84{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of pre-pandemic levels, and a May 2022 AHLA survey found that 97{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of hotels indicate that they are experiencing a staffing shortage.

FOOD: Can you skip restaurants by cooking in the Airbnb kitchen? Is the free hotel breakfast more convenient?

OTHER AMENITIES: Does your Airbnb include laundry? Are daily activities included with your hotel, making it so you can skip paying for other entertainment if you’ll spend all day at the pool?

For remote workers, what about office space? A Deloitte spring 2022 survey of 4,200 Americans asked what factors go into their lodging decisions. “Space to work” saw a 19{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} increase in 2022 versus 2021 — and an Airbnb with a separate office or backyard might be a more enjoyable workspace than being cooped up in a small hotel room.

ADDITIONAL FEES AND WAYS TO PAY: Will you owe resort fees? Airbnb doesn’t have a loyalty program, but can you stay at the hotel for free on points?

Given the variability, it’s impossible to proclaim that Airbnbs are better or worse than hotels. And given ongoing reduction in hotel services like housekeeping and room service, the sometimes lackluster feeling that increasingly surrounds Airbnb is a tough comparison to make as hotel services disappear, too.

But if you’re booking travel in 2022 under the assumption that Airbnbs are always the best deal, reconsider your strategy.

METHODOLOGY

NerdWallet conducted an analysis of 1,000 Airbnb listings (including taxes and fees) with check-in dates in 2022 or 2023, as well as more than 400 U.S. hotel listings.

The analysis looked at base prices, as well as other fees like cleaning fees, for one-, seven- and 30-night stays, also broken down by bookings made three days, four weeks and 47 weeks in advance. Data was gathered for 10 regions around the U.S., and it covered properties with a maximum capacity of two guests versus six guests.

Deloitte’s 2022 summer travel survey was conducted between March 23 and March 30, 2022. A representative sample of 4,233 Americans took the survey and of those, 2,536 qualified as travelers. Only 1,960 respondents completed the longest version of the survey because they stayed in paid lodging, rather than staying with family or friends. The survey examined travel behaviors across the season, including patterns for travelers’ longest trip of the summer.

AHLA’s 2022 Midyear State of the Hotel Industry findings were produced using analysis from Oxford Economics, data from STR and surveys by AHLA and Morning Consult. The AHLA survey of hoteliers was conducted among more than 500 hoteliers from May 16-24, 2022. The Morning Consult survey, which was conducted by Morning Consult on behalf of AHLA, was fielded online May 18 to May 22, 2022, among a national sample of 2,210 adults. The data was weighted to approximate a target sample of adults based on age, gender, educational attainment, race and region. Results have a margin of error of plus or minus 2.0 percentage points.

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PERSONAL FINANCE: Selecting your children’s guardian

PERSONAL FINANCE: Selecting your children’s guardian

Image by Nienke Burgers on Unsplash

An critical conclusion when making your will is the naming of the guardian for your minor little ones in the function of your loss of life.  The need to have to designate a guardian is in particular critical if you are a one or surviving guardian.  Even when each parents are alive, a guardian need to be designated to secure youngsters should really both equally parents die in a popular accident.  Lots of factors want to be weighed when picking out potential guardians—it is diverse from bestowing the honorific title of Godparent on a family members member or shut pal.

Throughout my job, I have identified that the problem a couple has in agreeing on potential guardians for minimal children is without concern the primary impediment to finishing the drafting of wills. No other selection even will come shut!  Often, the sole issue of agreement among the this kind of couples is that there aren’t any noticeable possibilities. However insignificant kids need designated guardians. A option will have to be manufactured some decisions are much better than other people and, nearly any preference is greater than leaving the final decision to the discretion of the courts.

Without having prioritizing, some of the criteria that ought to be taken into account when selecting a guardian incorporate the next:

Way of life fit
When selecting a guardian, the person’s age and everyday living predicament must be a key thing to consider. Requesting that a relative or pal raise your children is a pretty large “ask.” Although a potential guardian possible will will need to regulate his or her way of life, there are phases in one’s existence when getting on this sort of an massive responsibility can make minor feeling. If your youngsters are in elementary school or young, selecting a possible guardian whose youngsters are grown and out of the dwelling would require him or her to make a significant way of life adjustment. This also is accurate when naming another person who is solitary, or a couple devoid of youngsters. Quite typically naming your possess mom and dad as guardians, although easy to understand, can impose a incredibly tricky load on them. Relying on age dissimilarities, it may possibly be acceptable for an grownup child to be designated as a guardian for young siblings.

Spot
Deciding upon a guardian who life in close proximity to you is great. For a youngster who has lost his or her mothers and fathers, dropping the familiarity of pals and university considerably provides to the trauma. Even though locale is a secondary thought to a loving house, it can be a tiebreaker when a person is lucky plenty of to have a lot more than one viable selection.

Financial situations
Accepting the guardianship for your youngsters is a sizeable accountability it does not want to be a economical stress as nicely. As aspect of your estate preparing, we normally advise a belief arrangement—managed by a trustee other than the guardian—be regarded to provide for your children’s immediate expenses. In addition, the possible guardian’s economical predicament should be considered, particularly when that particular person might have kids of his or her personal. As an instance, it would be awkward if your child has resources set apart for an instruction, but the guardian’s kids will be saddled with scholar loans. There are numerous other situations where by the disparity of funds arrives into enjoy, and exactly where thoughtful estate preparing may perhaps provide answers.

Dependent on the economic situation, you may want to look at such as in your will either a direct bequest, a separate trust, or other financial provisions for the reward of whomever qualifies and accepts the role of your child’s guardian.

Other issues
Possibly you have a probable guardian who is the excellent alternative in just about every way these kinds of is the exception to the rule, and you are without a doubt fortuitous.  An “acceptable” selection really should not be puzzled with a best choice. In far too several cases the lookup for perfection holds up the drafting of estate files the place even a sub-great option would be considerably superior that leaving the selection to a judge.

So considerably, I have been referring to a potential guardian in the singular variety. Really usually the potential guardian is married or normally in a romantic relationship. To safeguard versus the chance of their divorce or separation, I inspire the naming of a singular guardian, as you by no means would want the custody of your little one to be in dispute. That reported, naming one particular or much more successor guardians is an superb plan as people’s lives evolve and the long term is uncertain. Additionally, one particular should really often check with a probable guardian for authorization for you to title him or her in your will. Not accomplishing so, in my viewpoint, is a major error.

Your choice of a guardian for your small children need to be based mostly on his or her skill to satisfy the part of a substitute father or mother.  Although the naming of your children’s Godparents has ceremonial worth, the practicalities and responsibilities of a guardian are much extra considerable, demanding much increased treatment and thing to consider.

Editor’s Notice: Rob Clarfeld, CPA, CFP®  and Terrific Barrington resident, has considerable professional practical experience assisting people today achieve their monetary objectives. The creator does not present tax, authorized, monetary or investment suggestions. This content has been prepared for informational functions only. You really should check with your have tax, authorized, economical and investment decision advisors in advance of participating in any transaction.

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Why is money so confusing? | Personal Finance

Why is money so confusing? | Personal Finance






If money confuses you, discuss your feelings about money with supportive and compassionate people. That could include an empathetic financial advisor, a financial therapist or trusted, knowledgeable friends.

Transgender woman drinking tea looking through the window at home




The investing information provided on this page is for educational purposes only. NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.

Managing money is an essential life skill, yet most U.S. adults would fail a financial literacy test. Consider the results of a survey meant to measure financial literacy, called the TIAA Institute-GFLEC Personal Finance Index. On average, U.S. adults correctly answered only 50{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of its financial literacy questions in 2022.

In other words: If you find money confusing, you’re far from alone. But the reasons you’re baffled may have more to do with how our brains work than how money does. Understanding some of the common barriers, along with strategies to cope, could help you finally get a handle on your finances.

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Money is a new language

You wouldn’t expect to carry on a fluent conversation in Madrid or Mexico City if you only knew a few words of Spanish. Similarly, personal finance is loaded with terms, jargon and concepts that take a while to learn.

“Entering the world of money is like entering a whole new culture and learning a new language,” says Ed Coambs, a certified financial planner and couples therapist in Charlotte, North Carolina.

You shouldn’t feel stupid for not understanding everything instantly, and no one should make you feel that way. However, learning can be more difficult if we encounter judgmental, condescending or dogmatic people — which unfortunately describes many people who are fluent in personal finance lingo.

“Many money experts, professional or non-professional, can become varying degrees of authoritarian: ‘Yes, I know what’s best for you. This is what you should do,’” Coambs says.

People with a rigid approach to personal finance may not understand the culture and life experiences that shaped you. They may insist you funnel every possible dollar into paying off debt or saving for retirement, for instance, but you may feel it’s important to tithe to your church or support your elderly parents.

Rather than dictating how you should spend your money, helpful advisors meet people where they are, says Rachael DeLeon, interim director of the Association for Financial Counseling & Planning Education, a nonprofit foundation that administers financial counseling credentials.

“It’s figuring out: What are your values? What’s important to you? And how do you make that work within your own financial situation?” DeLeon says.

Money is emotional

For many people, money evokes strong and often negative emotions. For example, if you struggle with managing your finances, you may be so embarrassed that you try to avoid talking or even thinking about money.

“That’s what really stops people from making money progress,” Coambs says. “They feel ashamed that they don’t know, and they feel like they should know.”

Painful early experiences often shape our view of money, says Coambs, author of “The Healthy Love & Money Way: How the Four Attachment Styles Impact Your Financial Well-Being.” Listening to parents fight about money or suffering financial hardship can be traumatic, leaving us convinced that money is dangerous or shameful.

Coambs suggests discussing your feelings about money with supportive and compassionate people. That could include an empathetic financial advisor, a financial therapist or trusted, knowledgeable friends.

“Action is predicated on feeling safe for many of us,” Coambs says. “Until we feel safe and accepted, we’re typically going to feel stuck and stalled.”

Money is collaborative

Fear is another common emotion people experience around money: fear of making a mistake, not having enough, or being scammed or misled.

“There are a lot of predators in this space, and knowing who to trust is hard,” DeLeon says.

Educating yourself is crucial. You can learn about personal finance basics from trusted sources, such as the Consumer Financial Protection Bureau or the JumpStart Coalition, which focuses on financial literacy for young people, DeLeon says.

But you also can hire people to help you. DeLeon recommends fee-only advisors, meaning they’re compensated only by the fees paid by their clients rather than by commissions or other financial arrangements that could influence their advice.

Look for advisors who are fiduciaries, which means they are required to put your interests ahead of their own. Fiduciary advisors include CFPs and people with the credentials offered by DeLeon’s organization, the AFCPE, including accredited financial counselors and financial fitness coaches.

Currently, the AFCPE offers free virtual financial counseling sessions. You can learn more at AFCPE’s site. In addition, your employer, 401(k) provider, bank or credit union may also offer free or low-cost financial advice.

With money, it’s more important to know whom to ask than to have all the answers ourselves, DeLeon says.

“Not everybody needs to be a personal finance expert,” DeLeon says.


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This article was written by NerdWallet and was originally published by The Associated Press.

The article Why Is Money So Confusing? originally appeared on NerdWallet.

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Saving Money Tips: Economists vs Personal Finance Experts

Saving Money Tips: Economists vs Personal Finance Experts

Superior news, spendy youthful people. You can most likely disregard the well known private finance tips that states you have to often save a specific part of your earnings.

A new functioning paper by James Choi, a professor of finance at the Yale School of Administration, explores how common individual finance suggestions — like the directive to conserve early and constantly — compares to tutorial study by economists.

Choi browse via approximately 50 of the most well-known particular finance guides from the very last 10 years or so, which include Robert Kiyosaki’s Loaded Dad Bad Dad, Ramit Sethi’s I Will Train You to Be Wealthy and a few titles from just about every from finance famous people Dave Ramsey and Suze Orman.

Choi located that for the most aspect, the techniques that economists say are optimum differ from the information in common particular finance publications.

That’s specially genuine when it will come to suggestions about conserving cash. Popular wisdom says you ought to save a set part of your earnings each individual month no make any difference how a lot you receive or exactly where you are in daily life. Of the 50 guides in the study, Choi observed that 21 suggest saving a set percentage of cash that remains the exact as you age. Economists call that a “smooth” financial savings amount.

Most of these guides argued for a financial savings level amongst 10{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} and 15{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, when a handful of proposed rates of close to 20{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}. Private finance writers like the strategy of setting a reliable cost savings level simply because it allows individuals develop fantastic routines and enables them to begin taking advantage of compound curiosity as early as attainable. But economists say the assistance is flawed.

How substantially should really you conserve in your 20s?

There is certainly a basic explanation economists say a clean discounts price isn’t essentially a good idea: You really don’t make and devote the similar volume of revenue at all levels of your lifetime, so you don’t will need to power yourself to conserve the exact same quantity at each age, possibly.

“Because earnings tends to be hump-shaped with respect to age,” Choi writes, “savings premiums should really on common be reduced or detrimental early in everyday living, superior in midlife, and negative for the duration of retirement.”

In other text: When you are younger, you most likely never get paid substantially funds, and your charges are inclined to be fairly large. All through this period of your lifetime, it’s pure to help save less (or not at all), with the thought that you are going to make up for it by conserving much more later on on.

Most individuals enjoy greater earnings around center age. This is when it would make feeling to ramp up your cost savings fee. Immediately after you prevent doing work, the ratio will change again and you are going to devote down people price savings.

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Choi observed very similar flaws when it arrived to well-liked particular finance suggestions about investing, having out a home finance loan, and a lot more.

For instance, a lot of gurus suggest one thing referred to as the “snowball method” when paying out down financial debt. The approach requires spending off your smallest personal debt very first, then paying out off the next-smallest and so on. Proponents like Dave Ramsey say establishing a pattern of good results and becoming in a position to see your open accounts disappear early on is motivating.

Even so, economists would say that the very best system to tackle personal debt is to start off with the bank loan with the best interest rate, regardless of the balance, mainly because this tactic would end result in the least expensive net payment.

Thoughts and personalized finance guidance

Choi acknowledges through his paper that the cold, purely economic technique can fall short in the serious planet. Authors like Ramsey speak usually about commitment and practices. They tension the position that feelings play when it will come to funds — this is the “personal” part of private finance. Lecturers, on the other hand, are likely to have a more analytical and dispassionate see.

In his paper, Choi presents some credence to the actuality that human beings are, very well, human. We are creatures of habit and often make decisions with cash that usually are not in our economic curiosity.

He cites David Chilton, writer of The Rich Barber Returns, who discusses the drawbacks of foregoing financial savings when you are youthful. The technique “seldom functions in the living area,” Chilton writes. “First, prices have a humorous way of in no way stabilizing. 2nd, most men and women aren’t going to be equipped to transition from environment apart nothing at all to getting supersavers at the flip of a swap. Psychologically, that is just not real looking.”

So whilst preserving revenue constantly when you are youthful isn’t strictly required, setting up the routine can make it a lot easier to help you save afterwards in existence. It is all about equilibrium.