Tarra Jackson

The time to ask is before you commit. 

Falling in love is a hot mess. Simply spending time with someone we’re attracted to releases dopamine, the feel-good hormone. It’s followed by norepinephrine, a related hormone that tag teams with dopamine to make us extra giddy. And then there’s the way attraction leads to a reduction in serotonin, swamping us with “the feels.”

All those “feels” may help explain why we tend to throw reason out the window when we’re falling for someone. It feels too delicious to examine too deeply.

For example, we may fall in love with someone without knowing their views on religion or politics. We may also give our hearts to someone who deals with finances in a totally different manner than us.

Cold reality of science

According to science, after you’ve been in a relationship for about four years, those initial hormones diminish, replaced by other important hormones associated with attachment. These hormones are pretty nice too, but not nearly as blinding as the earlier ones.

Suddenly, the fact that they never pick their socks up is less adorably disorganized, and more maddeningly irritating. The fact that they’re cool with paying bills late is less bohemian and more irresponsible.

Given that money is one of the top things couples fight about, doesn’t it make sense to ask the important questions before allowing dopamine to make all the decisions? Before committing yourself to a relationship, here are six questions to ask.

1. How do you feel about debt?

This is a biggie because if your significant other is a fake-it-til-you-make-it kind of person who thinks living large is the way to convince the world they’re up and coming, you’re likely to face debt issues at some point.

2. How do you picture us splitting the bills?

Does your partner hope to merge finances and share everything or do they expect you to cover the lion’s share of bills? It may not matter much today, but when those hormones begin to mellow you’re going to wish you’d protected your own financial interests.

3. How important is it to you to save for the future?

If you’re a saver who joins forces with a spender, you can count on plenty of arguments when the savings account is empty and an emergency arises.

4. Do you think “stuff” equals success?

If you’re honest with yourself, you can probably already answer this question. Take a look at your significant other and consider how many toys and gadgets they surround themselves with. Do you find them bragging to others about what they have or how much they earn? If so, you’ll need to decide if you share their values.

5. What would you do if you lost all your money?

True character is revealed when everything goes south. As optimistic as you may be about your joint financial future, things can and do happen. People get sick, lose jobs, and weather bear markets. It’s important to discuss how you would deal with it if everything was lost.

6. Do you think financial decisions should be collaborative?

You immediately put yourself in a precarious position when you allow someone else to take total control of the finances. Research shows that financial abuse occurs in 99% of all domestic violence cases. That’s not to say your partner is suddenly going to become violent, but it does underscore the importance of maintaining your own financial autonomy. If your partner says something like, “Well, I’m the one who’s good with money so I’ll handle everything,” it’s a red flag.

True love is one of the great rewards of life, but that doesn’t mean we need to wear blinders. Before settling down, make sure you financially mesh with the person you’re building a life with. Doing so means money won’t be something you fight about.

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By making small changes to how you manage your finances, you may be able to boost your credit score. 

Maintaining a good credit score is ideal, but building credit takes time and effort. A good credit score can unlock better financial opportunities and make life less stressful. Developing certain habits can help you get there sooner. These practices could help boost your credit score as you work to set yourself up for financial success.

1. Pay more than the minimum amount due

When it comes time to pay your credit card bill, make sure you pay more than the minimum amount due. The smaller, minimum payment amount may look tempting — but it’s a trap. You’ll be charged interest on the unpaid debt if you don’t pay your entire credit card balance.

This extra cost can be expensive and adds up the longer you ignore it. Credit card debt is one of the most common forms of consumer debt and can cause financial stress and lead to further financial troubles. By paying your entire card balance, you can avoid expensive interest charges.

Doing this can help you stay on track with your financial obligations, so you don’t fall behind on important bills because of a lack of funds due to having to put more money toward interest. If you struggle to pay the entire card balance, consider reducing your credit card usage. That way, your total balance is manageable and fits your budget.

2. Keep your credit utilization low

If you use credit cards, you should pay attention to how much available credit you use each month. While you may have a high credit limit on your cards, spending anywhere near your maximum limit is not good practice. Why? Your credit utilization ratio, or how much of your available credit you use, makes up 30% of your credit score.

Maintaining a lower credit utilization ratio is advised. You can keep your credit utilization low by not using all available credit. Experts recommend keeping your credit utilization ratio below 30%. For example, if you have a $15,000 total credit limit between all of your credit cards, it’s in your best interest to keep your total charges below $4,500 each month.

3. Prioritize debt payoff before taking on new debt

Credit cards and loans are financial tools that can help you afford a new expense. But by taking on new debt, you could be putting yourself in a difficult financial situation. If you’re not cautious, the debt can add up quickly and get out of control.

Before taking on new debt, consider whether you can afford to do so. Of course, emergencies do happen, and unless you have a solid emergency fund set aside, you may have to explore financing options to cover important, unexpected costs.

But if you have existing debt and no emergency expenses have come your way, prioritizing debt payoff is the best move for your wallet. The sooner you tackle your existing debt, the quicker you can begin working to meet other important personal finance goals.

4. Set up payment reminder notifications (or enable autopay)

Forgetting to pay your bills can not only cause you added frustration but can negatively impact your credit. When you fail to pay your bills, or pay them late, you can expect to see negative marks on your credit report — which can harm your score.

One way to avoid missing payments is by setting up payment reminder notifications for all your bills. Another option is to enable autopay. By automating the payment process, you no longer need to worry about being forgetful. Keep in mind this option may not be a great fit for you if you tend to have minimal cash left in your checking account after all your bills are paid.

5. Don’t part ways with older credit accounts

A lengthy credit history is ideal because it shows creditors you have been managing your finances well for a significant amount of time. The age of your credit history makes up 15% of your FICO® Score. For this reason, keeping older credit accounts open is beneficial.

If you have older credit cards with no annual fees, don’t be in a rush to close the accounts. Instead, get into the habit of using your older cards occasionally, so the accounts remain active and can help you boost your credit score. If you have an older credit card with an annual fee, check with your card issuer to see if you can downgrade the account to a no annual fee credit card.

You can increase your credit score by changing your current behaviors and developing new habits. Small changes can add up over time to make a big difference. If you’re in the market for a new credit card, take a look at our list of the best credit cards to learn more.

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There’s no other account that offers the same level of tax savings. 

There are certain expenses that tend to be burdensome at pretty much every stage of life. And healthcare is one of them. Whether you’re in your 30s or in your 70s, you never know when you might need money to cover a sudden medical bill.

In fact, medical costs are a common source of debt for Americans. And in extreme cases, they have the potential to drive consumers into bankruptcy.

That’s why it’s so important to have money set aside for healthcare costs — either in a regular savings account or a tax-advantaged account, like an HSA. But according to a recent survey by Principal, only 7% of respondents are planning to boost their HSA contributions in the new year. And that means many people are passing up a big opportunity. Here are three reasons why you should max out your HSA if you can.

1. You can enjoy a host of tax breaks

If you have money in a traditional IRA, you may be aware that your contributions are tax-free, but that your withdrawals are taxable in retirement. And if you’re saving in a Roth IRA, you may be aware that you’re getting the opposite benefit — no tax break on contributions, but tax-free withdrawals as a senior.

What makes HSAs so valuable is that they offer more tax breaks than any other account. HSA contributions are tax-free, investment gains in an HSA are tax-free, and withdrawals are tax-free as long as that money is used to cover qualified healthcare expenses.

2. You won’t have to scramble to cover medical bills

An unplanned visit to the emergency room could easily leave you on the hook for hundreds of dollars in bills. And if your health insurance plan comes with a costly deductible, you may have to come up with a lot of money for medical spending purposes.

The beauty of an HSA is that you won’t have to worry about where that money will come from. You can tap an HSA to cover everything from copays for medication to costs related to surgery.

3. You can set yourself up to worry less about healthcare during retirement

As much as healthcare costs can be substantial during young adulthood and middle age, they tend to rise even more so in retirement. That’s because health issues have a tendency to creep up as people age.

Also, it’s a big myth that retirees on Medicare don’t have to pay anything for healthcare. Medicare is far from free. Not only are there premiums and deductibles involved, but there’s also a range of out-of-pocket expenses, from copays to coinsurance.

Having a lot of money in an HSA could make it so that healthcare is less of a concern in retirement, financially speaking. And that could help you better enjoy your golden years.

Do your best to max out

Maxing out an HSA in 2023 means contributing $3,850 if you have self-only coverage and $7,750 for family coverage. If you’re 55 or older, you can add $1,000 to whichever limit applies to you.

Even if you can’t max out your HSA next year, you should still try to ramp up your contribution rate. Doing so could save you a lot of money in taxes while setting you up to cover whatever medical bills come your way.

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You must make sure you’re adequately protected. 

Owning a home can be a mixed bag, financially speaking. On the one hand, if you sign a fixed-rate mortgage, you get the security of predictable monthly payments, whereas if you rent, your costs could go up from year to year.

On the other hand, when you own a home, there are many expenses you’re forced to manage that are far from predictable. Your property taxes could rise over time. Your maintenance costs could creep upward as your home ages. And you never know when a repair issue might spring up out of the blue.

The latter can be really problematic if you don’t have money set aside in an emergency fund, or if you don’t have enough savings earmarked for home repairs. So how much money should you sock away in case something goes wrong with your home? New data reveals that $1,953 should be your minimum starting point.

Make sure you’re prepared for things to go wrong

Angi’s most recent State of Home Spending report reveals that in 2022, the average homeowner spent $1,953 on emergency expenses. So if you’re starting with little money in your savings account and are aiming to protect yourself, that’s the minimum amount you should aim for.

That said, if something major breaks in your home, like your furnace, water heater, or roof, it might cost a lot more than $1,953 to get it replaced. So the more money you’re able to pump into your emergency savings, the better.

Now is an especially important time to make sure you have cash on hand to cover home repairs. Borrowing costs are up across the board as a result of recent interest rate hikes on the part of the Federal Reserve. If you don’t have enough money in savings to pay for a home repair and you’re forced to take out a loan, you could get stuck with a really hefty borrowing rate.

What’s more, many people are spending more money than usual these days due to inflation and are already racking up higher credit card balances because of that. So the last thing you’ll want is to add to an existing pile of credit card debt by having to charge a home repair.

Don’t leave yourself vulnerable

When you buy a home, you don’t just commit to a mortgage payment. You commit to a host of expenses that can vary widely from one year to the next.

If you’re in the process of searching for your first home to buy, your best bet is to make sure you have a nice, robust emergency fund to tap after you’ve made your down payment. It can be difficult to anticipate the cost of home repairs if you’re a first-time owner, so coming in with a lot of savings can give you some protection.

And if you’re not sure you can manage the cost of paying a mortgage plus having to maintain and fix a home as needed, hold off on buying. The upside of renting is that any home repair issues that arise are your landlord’s problem, financially and logistically. And while you may not want to continue renting forever, it’s not a bad idea to rent until you’re in a place where you have plenty of money to put down on a home and enough left over to cover a host of costly repairs.

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Now’s the time to shore up your finances in case economic conditions decline. 

Right now, it’s fair to say the U.S. economy is still in decent shape — at least from an employment perspective. But things have the potential to change for the worse in the new year.

The Federal Reserve has been implementing aggressive interest rate hikes in an effort to bring inflation levels down. In doing so, it’s made it more expensive for consumers to borrow money, whether in the form of a credit card balance or personal loan.

The fear is that higher borrowing costs will drive consumers to curb their spending in a very big way. And if that happens, it could be enough to fuel a recession in 2023.

In a recent survey by Principal, 53% of Americans identified a potential recession as a major concern. And that’s understandable. If you’re worried about economic conditions declining in the near term, then it pays to take these key steps to prepare.

1. Give your emergency savings a boost

It’s always a good idea to have enough money in your savings account to cover at least three full months of essential expenses. But given that financial experts have been sounding recession warnings for a good part of the year, you may want to boost your cash reserves in case things do indeed take a turn for the worse in 2023.

That could mean adding to your savings so you’re able to cover an extra month of bills on top of what you have in cash today. Or, it could mean pumping a few hundred dollars extra into your savings if that’s all you can afford right now.

2. Whittle down high-interest debt

Debt payments can be problematic during a recession. If you lose your job, you may be forced to cut back on expenses until you’re gainfully employed again. But cutting back may be difficult when you have a minimum credit card payment to make every month, or an expensive loan payment to make.

That’s why now’s a good time to reduce your current debt load. If you have multiple debts, aim to first tackle whichever one has the highest interest rate attached to it. And consider getting a second job to come up with the money to pay off your debt quickly.

3. Make sure you’re up-to-date on necessary work skills and licenses

Sometimes, diligent employees lose their jobs when economic conditions deteriorate and companies are forced to move forward with layoffs. But you might be able to stave off a layoff by making sure your job skills are solid. If there’s an area you’re lacking in, now’s a good time to do what it takes to get up to speed.

Similarly, if your profession requires you to maintain a specific license or certification, make sure it’s current. You don’t want that to be used as a reason to let you go.

We can’t say with certainty that we’re in for a recession in 2023. But is that possible? Unfortunately, yes. Rather than lose sleep over the idea, do what you can to prepare so you’re in the best position to weather that storm.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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