Money Management

Expensive gas doesn’t have to bust your budget. Here’s how to save on fuel at a time when prices are starting to rise. [[{“value”:”

When you own a car, paying for gas is just one of the many ongoing expenses you’ll have to contend with. But what’s tricky about paying for gas is that the cost can fluctuate from week to week, making it harder to fit that expense into your budget.

Meanwhile, CNN reports that for the first time since late last year, gas prices are higher on a year-over-year basis. On March 18, the national average price for regular gas reached $3.47 a gallon as per AAA, compared to $3.45 a year ago. That $3.47 represents the highest per-gallon price since Halloween.

The good news, though, is that there are some steps you can take to save money on gas. Here are a few worth employing if money is tight or you simply don’t enjoy overpaying for things needlessly.

1. Seek out cash discounts

Many credit cards offer generous rewards at the pump. But often, you’ll pay less money for gas by handing over a wad of cash instead of swiping your card. That’s because many gas stations offer a steep discount for cash fill-ups. You’ll need to do the math, though, to determine if paying in cash makes more sense than using your card.

Let’s say your local station offers a $0.10 discount per gallon for cash fill-ups, but your card offers 5% back at the pump. If you’re spending $3.47 per gallon, each gallon gives you $0.17 back with your credit card, so in this case, that’s actually the better deal. But if you only get 2% back at the pump, that’s $0.07 back per gallon, so a $0.10 discount has you doing better.

2. Be strategic about where you fill up

In some cases, driving just a block or two out of your way could have you spending less on gas. So it’s a good idea to use apps like GasBuddy to compare prices locally.

Another place you may want to fill up your car is Costco, if you have a membership. You don’t necessarily want to drive 10 miles out of your way to load up on gas at Costco, because what you save per gallon, you might spend by using more gas. Rather, it pays to try to time your gas fill-ups to your already-scheduled Costco trips.

3. Make sure your vehicle is well maintained

Just as owning a home means having to be mindful of maintenance, so too do vehicle owners have to maintain their cars. But there’s an upside to that — potential savings on fuel.

Properly inflated and aligned tires, for example, could not only make for a smoother ride, but also, potentially lead to more efficient gas mileage. The result? Fewer fill-ups on your part and savings as a result.

4. Don’t speed

Speeding might seem like an effective way of getting to your destination just a bit sooner. But safety issues aside, speeding can be a costly mistake.

If you’re caught doing it, you can face a costly fine and points on your license that drive up the cost of your auto insurance. But even if you get away with speeding, it can result in less fuel efficiency. So if you’re looking to save on gas, stick to the speed limit.

It may be frustrating to see gas prices climbing at this point of the year. And unfortunately, since gas prices tend to rise even more during the summer, $3.47 a gallon might pale in comparison to what you end up paying in June, July, and August. As such, it pays to employ these tips during the year so you can save money on gas, no matter what the average price per gallon happens to be.

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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 no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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Getting a pile of cash from the IRS? Read on to see if using it to pay off your home sooner is a good idea. [[{“value”:”

Many people who file a tax return end up getting a refund from the IRS. And as of March 3, the average IRS refund issued this season was $3,182.

If you’re getting a refund that’s comparable in size, there are a lot of savvy things you can do with that money. And you may be thinking of using that money to make an extra mortgage payment to get your home paid off ahead of schedule. That may not, however, be the best use of your refund.

When you have a low mortgage rate

It’s one thing to look at putting your tax refund into your mortgage if you’re paying somewhere in the ballpark of 7% on that loan. But many homeowners refinanced their loans when mortgage lenders began offering record-low rates in 2020 and 2021. People in that boat may be paying 3% or less on their home loans.

What’s more, those who first signed their mortgages during that time frame, and even shortly thereafter, may be sitting on mortgage rates that are extremely competitive. And it doesn’t make sense to pay down a loan with a very low interest rate.

Right now, as an example, many high-yield savings accounts are paying around 4%. So if you have a 30-year mortgage at 2.9%, why put your tax refund into your home loan when you could instead put it into the bank and earn more interest than what your mortgage charges?

When you have more pressing financial needs

Maybe you signed your mortgage more recently and got stuck paying a pretty high interest rate as a result. In that case, it could make sense to use your tax refund to pay down your mortgage sooner. But before you do, ask yourself whether you have a more pressing need for that money.

Here are some reasons to not use your refund for early mortgage payoff purchases:

You don’t have three months’ worth of living expenses socked away in an emergency fundYou owe money on credit cardsYou have a different type of loan you’re carrying with a higher interest rate than your mortgageYou’re anticipating a large expense in the near future (such as if your car is old and having trouble, and you expect to need a new one within a year)

Also, if you haven’t begun to fund a retirement account, you may want to consider putting your tax refund into an IRA or 401(k). It’s important to save for retirement at as young an age as possible so your money has time to grow. If you get a $3,000 tax refund this year and invest it in one of these accounts at a yearly 10% return, which is in line with the stock market’s annual average over the long term, in 30 years, it’ll be worth a little over $52,000.

Of course, if you don’t have a more pressing financial need to address and have a high interest rate on your mortgage, then by all means, take your tax refund and make an extra payment on that home loan. But first make sure it doesn’t make sense to go a different route.

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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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Saving for retirement isn’t always an easy task. Read on for one of the biggest retirement mistakes you need to avoid. [[{“value”:”

The typical employer with a 401(k) plan will contribute between 3% and 6% of an employee’s compensation on their employees’ behalf. But to take advantage of this, employees need to contribute money themselves, as these are known as matching contributions.

According to several sources, far too many Americans are leaving money on the table by not taking advantage of their employer’s matching contributions. A 2021 survey by personal finance site MagnifyMoney found that 17% of people with access to an employer-sponsored retirement plan don’t contribute at all, and of those who do, 12% don’t contribute enough to get all of their company’s matching contributions.

Furthermore, a Vanguard study found that 48% of 401(k) participants saved more than their matching contributions would require, while 18% saved exactly enough to get the full match – leaving 34% of participants who either don’t contribute or contribute, but not enough.

A more recent study that focused on married couples found similar results. It discovered that 24% of married couples don’t claim all of their employers’ matching contributions, costing the average couple in this group $682 per year.

Don’t turn down free money

Let’s be perfectly clear. Not taking full advantage of your employer’s matching contributions is literally turning down free money. It’s part of your total compensation package.

Think of it this way. If you earn $100,000 per year and your employer is willing to match 5% of your salary in contributions, and you only choose to contribute 3% of your pay, you are missing out on $2,000 in free money.

Not only that, but retirement contributions are also tax deductible. So, in this example, you’d also be entitled to an additional $2,000 tax deduction if you were to contribute enough to take full advantage of the matching contributions.

Why are some employees not taking full advantage?

One of the major culprits is also one of the most positive features of 401(k) plans — the surge in auto-enrollment of new employees.

In 2023, the average 401(k) company match was 4.7% of compensation, according to Fidelity. However, the average default contribution rate of plans that automatically enroll participants is 4.1%.

To be sure, this represents progress, and auto-enrollment has been a net positive for making sure American workers are financially prepared for retirement. Plus, it wasn’t too long ago that most plans that auto-enrolled participants did so at rates of 2% or 3%. But it means that the average person who gets auto-enrolled in a 401(k) plan isn’t contributing enough to take full advantage of their employer match.

There are other reasons as well. As an example, many people feel that they simply can’t afford to part with 5% or 6% of their paycheck. Others would rather save in an individual retirement account (IRA) instead. You open an IRA with a brokerage firm, and get more control over your investments, so some prefer this to a 401(k).

The long-term effects can be devastating

It isn’t just about the free money you’re turning down now. It’s about what it means to your future. As mentioned earlier, the average married couple that doesn’t get the full employer match is missing out on $682 per year.

However, consider what this means. If you’re a 30-year-old married couple, and your investments compound at an 8% annualized rate, which is in-line with the historical long-term average for a balanced portfolio, that $682 you missed out on could grow to more than $10,000 by the time you’re 65 years old and ready to retire. That could make a significant difference in your financial security in retirement. Now, imagine if you miss out on $682 every year.

The point is that your employer match is part of your compensation at work, and you should at a bare minimum contribute enough to your retirement plan to take full advantage. Not doing so is like refusing to cash a paycheck and could have major consequences down the road.

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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.Matt Frankel has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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The CFPB says credit card companies made $25 billion through excess interest charges. Find out how you can reduce your credit card interest costs. [[{“value”:”

A double whammy of higher interest rates and increasing levels of credit card debt means Americans paid over $100 billion in credit card interest in 2022. What’s more, new research from the Consumer Financial Protection Bureau (CFPB) shows that the Fed’s rate hikes are only partially to blame.

The CFPB says the average American paid over $250 last year in extra credit card interest. Which is a lot of money if you’re living paycheck to paycheck.

Credit card companies are profiting from rising balances

In recent years, the Federal Reserve has hiked interest rates to help get inflation under control. The Fed’s high prime rate is one reason it’s so expensive to carry a balance. But it’s only part of the picture. The other is that credit card companies charge additional interest known as APR margin.

The total average credit card APR reached 22.8% in 2023, almost double what it was a decade ago. The CFPB breakdown shows that 8.5% of that comes from the prime rate. The other 14.3% is the APR margin, currently the highest in recent history.

That’s why the consumer watchdog says credit card companies are profiting from struggling consumers. It’s one thing to charge interest to cover the cost of lending. It’s quite another to make billions of dollars from people who owe money.

According to the report, “For an average consumer with a $5,300 balance across credit cards, the excess APR margin cost them over $250 in 2023.” It says credit card companies earned an extra $25 billion by raising the APR margin.

The difference of a higher APR

The CFPB says the APR margin increased by 4.3 percentage points from 2013 to 2023, at a time when the cost of lending money has remained relatively steady or even declined. Those higher rates make it harder for consumers to pay down debt, in some cases meaning they get stuck accruing more interest and fees that they can’t pay.

Let’s say you owe $5,300 on a credit card and plan to pay it down over two years. We used a credit card interest calculator to work out the monthly payment and total interest charges for different APRs. Here’s how much difference a few percentage points can make to your payments.

How to pay down your credit card debt

Carrying a balance on a credit card is soul destroying. You try to pay it off, but it can feel like you are running just to stand still. Here are some steps you can take to get your debt under control.

1. Make a plan

I’ve been in credit card debt before, and I know how easy it is for months to slide by without turning intentions into action. Sit down and look at your financial situation. Use your income and outgoings to come up with a realistic monthly debt repayment target. Set a reminder in your calendar.

If you owe money on more than one card, the next step is to decide which one you’ll pay down first. For example, you might opt for the debt snowball method and pay the smallest debt first. This is rewarding because the first win is very achievable. Another option is to target the card with the highest interest rate, also known as the debt avalanche method.

READ MORE: How to get out of credit card debt

2. Look for ways to reduce your interest rate

If you can reduce the amount of interest you pay, you’ll have more cash to put toward your balance. If you have a strong credit score, you might be able to switch to a balance transfer card with a 0% introductory rate. You’ll have to pay a transfer fee, and it’s important to look at how long you’ll have to pay off your balance.

Another option might be to take out a debt consolidation loan. The interest rate and terms will depend on how good your credit score is, but you may get a lower rate than you pay on a credit card. You’ll need to commit to fixed monthly payments across a set period.

3. Put as much money as possible toward debt repayment

The more debt you can pay off each month, the less you’ll pay in interest and the quicker you’ll shake that debt. Review your recent spending and look at cuts you might make in the short term. Also, if you have a side hustle or the ability to take on extra hours at work, that could be extra money that goes toward your balance.

I’m not suggesting you live on bread and water and give up everything you enjoy until the debt is paid. It needs to be achievable. Nonetheless, perhaps there are some subscriptions you could go without for a period and other non-essential spending you might be able to drop.

Bottom line

The news that credit card companies are profiting from consumer debt may not come as a huge surprise. If you’re carrying credit card debt, the best way to handle this news is to focus on paying it down.

It may feel like you have a mountain to climb and it may take time. But take heart from the fact that many people have done it. Depending on your circumstances, you may be able to as well. Take it one step at a time and celebrate each month you shrink the amount you owe.

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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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Winter is almost over, which means you won’t be needing those sweaters and hoodies for much longer. Here’s how to sell them to get some summer vacation money. [[{“value”:”

The cold weather is finally lifting in many parts of the country, somewhat affirming Punxsutawney Phil’s prediction of an early spring. Pretty soon, we’ll put our winter clothes away and take out the t-shirts and shorts. And while you might want to save some winter clothes for next year, there’s a big opportunity to turn those clothes into a summer vacation savings fund while the weather is still cold. Yes, you can sell them.

True, a one-week vacation in 2024 is pretty pricey, with an estimate of $2,000 per person, according to GoGo Charters. Unless you work in fashion — or at least dress fashionably — you probably won’t pay for your entire vacation with unwanted winter clothes. But you can pay for a portion of it, especially if you’ve had a major life event this year (or expect one next), like moving or having a baby.

To bolster your travel fund (and personal finances), here are some profit-maximizing ways to sell used clothes.

1. Pick the right clothes to sell

When it comes to turning a profit on your old winter clothes, think quality, not quantity. Take a look at the condition, see if it’s well-worn or stained, and decide if it’s something someone else would actually wear. You might love your 90’s parachute pants and Creed 2002 tour sweater, but unless it has the band’s signatures on it, you’re probably not going to get much.

Aside from condition, some items are always in higher demand, even if they’re not in the best shape. For example, my wife was able to sell her very well-worn Tiffany sunglasses on eBay, even though a consignment store wouldn’t take them because of their condition.

If you don’t have any brand name items you can still make some sizable cash on items like denim, shoes, vintage, athleisure, and unique or one-of-a-kind items (like that repurposed denim jacket your aunt made you).

2. Know where to sell

OK, so you’ve cleaned out your closet and selected the items you think will sell. Now comes the hard part — where to sell what you have. With so many options, it’s hard to know which app or consignment store will give you the most cash. To give you a headstart, here’s a cheat sheet for where to take (or post) each item.

Consignment stores: Check out Buffalo Exchange, Crossroad, Plato’s Closet, and other independently owned shops. This is best for off-brand or clothes with a lower value.eBay: These are the best places for your designer and brand-name items. I’ve been selling stuff on eBay since I was a tween — from clothes to Pokemon cards — and it’s still one of the best options for unwanted clothes. eBay collects anywhere from 8%-15% per sale depending on the sale price, plus a flat $0.30 per order.Poshmark: Like eBay, Poshmark is great for selling designer or brand name clothes. It’ll collect $2.95 in commission for sales under $15, or 20% of the sale price for any sales above that. Poshmark also keeps things simple by providing you with a prepaid, pre-addressed shipping label.Instagram and Facebook Marketplace: These are excellent places to sell individual or boxes of clothes. The benefit of selling on social media is that you get to keep 100% of your profits.Depop: Use this to maximize profits on any vintage or one-of-a-kind pieces. Depop takes 10% of the total transaction, including shipping. You’ll also be charged a transaction fee (by PayPal or Depop Payments) and that fee varies based on your location. For PayPal, U.S. customers can expect to pay around 3.49% plus $0.49.

3. Style your listings

Finally, even if you have high quality clothes, your listing may not take off if it doesn’t have all the bells and whistles. For example, a low-quality photo of a high-quality item could detract from the item’s glamor, thus resulting in a lower sale price.

Of course, this might take some practice. But to help you get started, here are some tips to keep in mind.

Titles and descriptions: The title should highlight the brand name, style, and size. For the description, include measurements and color, as well as any marks or defects.Photo angles: Take pictures from multiple angles. If the item is new, include a stock photo when available. If you can, style gently used clothing on a model.Lighting and background: Turn your camera or phone’s flash off! And use a plain background.Fair pricing: Your item isn’t going to sell if you list for $100 and everyone else sells it for $25. So, do a quick search to see the going price for each item and price them competitively.

All in all, consignment stores and apps are great places to sell your unwanted clothes. And, hey, if you can’t get the full amount for your summer vacation, consider getting a new travel credit card. Many have generous welcome bonuses that can bolster your summer savings. Take a peek at some of our best travel credit cards and see if one could help you save for summer.

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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 positions in and recommends PayPal. The Motley Fool recommends the following options: short March 2024 $67.50 calls on PayPal. The Motley Fool has a disclosure policy.

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