Money Management

Eager to meet your saving goal this year? Read on to see how to set yourself up for success. [[{“value”:”

Many of us set goals and don’t achieve them, whether it’s conquering a triathlon or pledging to have a takeout-free month (it’s debatable as to which one is harder). Similarly, it’s not uncommon to fall short of a financial goal, whether it’s getting your savings account balance to $5,000 or whittling your credit card balance down to $0.

It may interest you to know that in 2023, 52% of U.S. adults saved the amount of money they set out to or more, according to data from New York Life. But if you didn’t quite meet your 2023 savings goal, don’t let it get you down. There’s still plenty of time to rock your 2024 goal. But if you want to be successful, then it pays to do these things.

1. Make sure your 2024 goal is reasonable

Maybe 2024 is the year you want to build a $10,000 emergency fund. That’s a great thing to strive for. But if you only bring home $3,000 a month after taxes and other deductions, and your essential bills come to $2,700, then that may not be doable. In this scenario, you may only have $300 per month available to put toward your goal, so telling yourself you’ll somehow save $10,000 may be setting yourself up for failure.

A better bet? Set a reasonable target. In this example, that would be $3,600. You may be able to boost that target modestly if you know you’re willing to work a side hustle for extra income. But even then, $10,000 may be a reach, whereas $5,000 or $6,000 may be more reasonable.

2. Get support from friends and loved ones

Working toward a savings goal isn’t something you have to do alone. It pays to enlist the support of the important people in your life so they can help you attain success.

Let’s say you don’t share your goal with your spouse. They might try to get you to go out every weekend when you’d rather stay home and bank the money you would have spent. Sharing your intentions might get your partner to stop asking you to go out and instead work with you to come up with fun activities to do at home.

Similarly, maybe you have a friend who’s also trying to reach a savings goal in 2024. Work with each other. Support one another. Console one another when you’re the only ones not joining your friends for a fancy dinner at the hot new restaurant in town. It could go a long way.

3. Put the savings process on autopilot

One of the best things you can do to meet a savings goal is take human error or temptation out of the equation. To that end, it pays to set up an automatic transfer from your checking account to your savings account in the amount you’re looking to save monthly. If that amount is $300, arrange for that sum to land in savings off the bat.

Let’s say you tell yourself you’ll transfer $300 to your savings account at the end of the month. What might happen during the month is you get invited to go skiing or see a concert, and poof, that $300 is gone. If you send it into savings at the start of the month, you’ll basically take away the option to spend it — which is a good thing.

Saving money isn’t easy, so don’t get down on yourself if you didn’t meet your savings goal in 2023. Instead, set yourself up to have something to celebrate at the end of 2024.

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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.Maurie Backman has positions in Target. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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It takes a lot to save money with extreme couponing. Read on to see why this strategy may not pay off for you. [[{“value”:”

“My friend brought home six bottles of shampoo and conditioner for just $4.”

“My neighbor paid $0.16 for seven boxes of instant macaroni and cheese.”

It’s stories like these that could drive you to try to mimic the habits of extreme couponers.

In a nutshell, extreme couponing is the practice of seeking out deals so you’re saving big or paying next to nothing for your drug store or grocery store trips. And to be clear, there are people out there who manage to enjoy massive savings on different products by sourcing coupons and taking advantage of in-store promotions.

But while extreme couponing may seem like a good thing to try in theory, it may not work out for you in practice. Here are some reasons why.

1. You may not have the time

Extreme couponers don’t just spend five minutes a day seeking out coupons. Some of them spend hours upon hours each week looking for deals. If you work full-time or have a busy schedule, you may not have time for that.

Also, remember that in addition to spending time finding deals, it could take time to actually capitalize on those deals. You may, for example, have to visit six different stores in a given two-day period to take advantage of the coupons and promotions you’ve found. That’s a tall order when you’re spending most of the day at an office.

2. It may not be worth your time

As just mentioned, extreme couponing can take a lot of time. But it may not be worth your time if you’re self-employed and can use those hours to earn more money instead.

Let’s say you typically earn $60 an hour doing what you do. You might spend three hours of your day looking for coupons that save you $40 in total. But if you were to spend those three hours working instead, you’d bring home $180.

3. You may not get deals on the products you actually use

One problem with extreme couponing is that you might commonly end up with discounts for products you don’t really use. To not waste the time and effort you’ve put in, you may be tempted to buy those products very cheaply, even if they’re not ones you want. The result? You might end up hurting your personal finances rather than helping them.

Let’s say you’re able to score a box of granola bars for $0.50 when the normal price is $3. At first, you might think you’ve done a great job of saving $2.50. But if no one in your household eats those bars, guess what? You’ve just cost yourself $0.50 plus the time it took to find that deal.

A better alternative to extreme couponing

If you’re someone with lots of free time on your hands and you want to give extreme couponing a try, by all means, do so. But try to be mindful of what you’re spending to reap savings. Also, tell yourself that it’s OK to let some coupons go. There’s no sense in spending money on products you don’t really want or use, just because you can get them for almost nothing.

Meanwhile, if you’re realizing that extreme couponing isn’t such a great fit for you, as an alternative, one thing you can do to save money is map out a household budget, review your expenses, and find ways to cut costs. For example, rather than spend three hours a week looking for coupons that might save you $20 on groceries and household products, cut a $20 streaming service from your budget if you can do without it.

Extreme couponing is something you may find fun. And it works for some people. But don’t be shocked if you end up chalking it up to a failed experiment.

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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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Home price growth is finally stabilizing. Read on to find out why and how to take advantage of it. [[{“value”:”

There hasn’t been much positive news in the housing market lately, but the latest data from Redfin offers a glimmer of hope for potential home buyers: House price growth is back to pre-pandemic levels.

In February, housing price growth increased just 0.6% from the previous month, which is on par with average monthly increases for the eight years leading up to the COVID-19 pandemic, according to Redfin.

Even more encouraging is that home price growth may be back on track on an annual basis. In February, price growth increased 6.7% from the previous year, matching historical increases leading up to the pandemic and far below the highest annual increase of about 23% about two years ago.

Here’s why price increases are cooling and what it means for potential home buyers.

Home price growth is taking a breather

Redfin said the current state of state of the housing market is neither a seller’s market nor a buyer’s market.

On the one hand, there aren’t enough homes available for buyers, which has helped keep demand strong. On the other hand, housing prices are up almost 24% on average from three years ago, and higher mortgage rates have caused many Americans to hit the pause button on their home search.

The result is that there’s just enough supply of houses and demand from buyers to cause prices to rise at a pre-pandemic pace, but not enough demand to push them any higher than that.

How to get in the best position to buy a house

If you’re in the market to buy a house, there are a few things you can do to put yourself in the best financial position. Here are a few suggestions.

1. Get your credit in shape

Having a good credit score is one of the best ways to get a good mortgage interest rate. In general, a score of 760 or higher will help you get the best rates, but even just improving your score to 700 or higher could also go a long way toward getting a good rate.

Paying off some of your debt can help quickly improve your credit score because lenders consider how much you owe when deciding how much money to lend you and at what interest rate. Lowering your credit utilization — how much credit you use compared to how much you have access to — to below 30% is a good idea, and under 10% is best.

For example, let’s assume you have two credit cards with a total line of credit of $12,000. To keep your credit utilization under 30%, you should try to keep the combined total balance to less than $3,600.

Additionally, you may want to consider boosting your credit score by linking other accounts (like a rental payment and utilities) to your credit report. I did this through the Experian Boost tool recently and improved my score by 28 points in just a few minutes.

2. Shop around for a mortgage lender

While improving your credit score can go a long way toward getting a better interest rate for your mortgage, so can doing a little shopping around.

Many potential home buyers don’t think about comparing mortgage lenders once they receive a rate quote. This can be a big mistake, though. A survey conducted last year showed that buyers could save up to $2,810 annually by shopping around to find a better mortgage rate.

Let’s say one mortgage lender is willing to lend you $350,000 at 7% for a 30-year loan and you’re putting 20% down. Your mortgage payments (principal plus interest) will be $1,862 in this scenario. But if you shop around you may be able to find a lender willing to give you the same terms, but with an interest rate of 6.5%. That might not seem like a huge difference, but it translates into a monthly savings of $91 and annual savings of $1,092.

Shopping around could be one of the easiest ways to get a better mortgage rate and could be the difference between a house being out of your price range or fitting into your budget.

Don’t bet on interest rates plummeting this year

It’s worth mentioning that while home prices are cooling, interest rates could remain elevated. The Federal Reserve says it might cut rates up to three times by the end of 2024, but they’ll be minor cuts when they come.

Additionally, mortgage rates are determined, in part, based on the demand for mortgage-backed securities. According to a Wall Street Journal analysis, investors aren’t eager to snatch up bundles of mortgages right now. This means that even if the Fed cuts rates, it might have a smaller impact than home buyers want.

This makes improving your credit score and shopping around for a mortgage rate all the more essential when buying a home. While you don’t have control over the housing market or the Federal Reserve, you can control your credit score and which lender you choose.

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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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Sewage backup, water backup, and heavy rains flooding your home from clogged stormwater systems are bad news. Is your homeowners insurance ready? [[{“value”:”

One problem with being a new homeowner — other than turning into your parents, like in the Dr. Rick commercials — is that it brings a lot of new expenses into your life. When you buy a home, you are suddenly responsible for costs that you never knew existed, like foundation repairs, and radon mitigation. One of the worst is sewer backup.

A few years ago, some friends of mine suffered a sewer line problem at their house, and it ultimately cost them $10,000 to fix. Sewer backup and other sewage problems literally stink. And what might “stink” even more is: sewage problems are not always covered by homeowners insurance.

Let’s look at a few ways to protect yourself from this particularly stinky cost of homeownership.

What is sewer backup and water backup?

Sewer line backup, also known as sewage backup or water backup, happens when sewer lines get clogged or damaged. There are a few types of sewer backup and water backup that are all part of the same soggy, messy problem:

Sewer backup: At worst, this can cause the stinky stuff that you’re trying to flush out of your house to…come back into your house.Stormwater sewer backups: Water backups can also result from heavy rains that cause stormwater sewer systems to fail, sending dirty stormwater flooding up into residential homes.Sump pump overflow: This is another kind of water backup problem that affects homeowners with sump pumps. If you have a basement in your house that tends to get wet when it rains, you might want to try installing sump pumps (or upgrading your old ones for heavier capacity).

Which homes are most at risk for sewer backups and water backups?

Sewer backups can be especially bad for older homes that have not had regular sewer inspections and sewer line maintenance. Lots of old trees on your property or in your neighborhood can also create higher risk for sewer line clogs; the tree roots can get inside the sewer pipes, causing blockages.

If your home is in an older, tree-lined neighborhood with older sewer lines, you might want to consult a local sewer line cleaning service. Add it to your annual to-do list and home maintenance budget. Many sewer services will offer free estimates and low-cost sewer inspections, so you can keep an eye on the situation before it becomes a costly problem.

Water backup is destructive and dispiriting, and it’s something that no homeowner ever wants to experience, but it could happen to you. It’s a particular risk if you live in a wet climate, or a place experiencing heavier rains due to climate change. Many cities are trying to expand the capacity of their stormwater systems. But this might not help you if your home gets flooded by water backup and you’re not covered by insurance.

How to get sewer line coverage from homeowners insurance

Sewer line backup is not always included with homeowners insurance, but many companies offer it as an optional coverage. Check your homeowners insurance policy to see if you have coverage for sewer backup or water backup (or both). Different homeowners insurance companies might use slightly different words for these coverages.

For example, my homeowners insurance policy covers:

“Water backup” coverage: Pays for some costs of damage from water that backed up through sewers or drains, or overflowed sump pumps”Service line” coverage: Pays for some costs of repairs to external service lines, including sewer lines, water lines, and power lines

Some local water works and utilities also offer service line insurance via private insurance companies like HomeServe. These plans let you buy extra insurance coverage for the parts of your water line or sewer line that are your responsibility to maintain as the homeowner.

Bottom line

New homeowners (and longtime homeowners) should check their homeowners insurance policy to see if they have sewage backup, water backup, and service line coverage. And make sure you understand how much the insurance company will actually pay after your deductible. If you suffer a major sewer line issue, or overflowing storm water from a heavy downpour in your neighborhood, the costs could be more than several mortgage payments — and more than your “rainy day” fund can cover.

Our picks for best homeowners insurance companies

There are many homeowners insurance companies to choose from. We’ve researched dozens of options and short-listed our favorites here. Looking for a green build discount or easy bundle policies? Want an easy-to-use interface? Read our free expert review and get a quote today.

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 recommends Progressive. The Motley Fool has a disclosure policy.

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