Money Management

How can living a childfree life benefit your finances? You’ll likely have more flexibility and fewer expenses. Check out some other potential financial perks. [[{“value”:”

Many people choose to become parents, but not everyone wants or can have children. As a parent, your financial situation can be much different than that of someone without youngsters. If you’re on the fence about starting a family or know that becoming a parent isn’t your ideal life path, choosing not to have kids may positively affect your finances. Here are a few ways not having kids can be a win for your financial future.

1. You can adequately prepare for retirement

When you’re not a parent, you won’t have to worry about child care costs, the added expense of raising children, or how you will afford to send your kids to college.

That frees up money for other important financial goals, like investing for your retirement years. Choosing not to have kids can positively affect your financial future by making it easier to adequately prepare to afford your living expenses during your non-working years.

If you’re childfree, consider whether you’re on track to retire within your desired timeline. If you’re behind, consider boosting your individual retirement account (IRA) or other retirement account contributions to prepare accordingly. Compound interest is your friend, so investing more money earlier in life gives you more time to benefit from compound growth.

2. You have more freedom to take risks

Since you don’t have children to care for and fewer people rely on your income for stability, you may feel more confident to take more risks to improve your life.

Here’s one example of how this might apply to your finances: You can transition into a new career. For busy working parents, this can be more difficult. They may rely on employee benefits from their current job or be less able to take a new role with a different schedule since they have to accommodate daycare drop-off or after-school activities.

It’s never easy to take a risk or make a life change, but knowing that you don’t have kids who will be negatively impacted if you make an expensive mistake may motivate you to take action. Just remember that building a solid emergency fund is important before making any big life change.

3. You can earn more during your lifetime

For many parents, balancing raising a family while making career advancements can be difficult. This is especially true for mothers who often leave the workforce because child care costs are so high that it makes more financial sense to stay home to care for their children.

The Mommy Track Divides study found that having a child costs the average highly skilled woman $230,000 in lost lifetime wages. In addition to having more money in the bank, those who don’t have kids are more likely to be able to make career advancements.

They may also make more money throughout their lifetime because they can make more career progress. And they might have fewer gaps in their work history, since they don’t have to decide between staying home with their children or working and paying for child care.

4. You may be able to afford to retire sooner

Another way being childfree can positively affect your financial future is the possibility of retiring earlier. While many people enjoy their work, having to work into your later years is not ideal. Even if we plan to work for many more years, our health may not allow it.

Some may find that not having the additional costs of raising a family allows them to retire sooner than anticipated. Alternatively, they may be able to limit their work hours to work a more part-time schedule to travel or spend more time with loved ones.

A non-traditional life may be a win for your finances

For some people, parenthood best aligns with their goals. But this life-changing decision is not for everyone. Taking a non-traditional approach to life, like choosing not to have kids, may offer financial perks. For more money tips, check out our personal finance resources.

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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.Natasha Gabrielle 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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Shortly after moving to my new house, I received a letter with a big fine. Learn how I dealt with this unpleasant surprise. [[{“value”:”

Not too long ago, I bought a house. I was very excited to move in and start remodeling it, since it was a fixer-upper.

Unfortunately, just a month after I moved in and shortly after I made my first mortgage payment, I got a community notice in the mail indicating I owed my HOA $15,000 in fines.

Obviously, this was pretty upsetting to me, as that’s a huge amount of money. Here’s how it happened, and what the end result was.

This is why I was sent a $15,000 fine

While it seems hard to believe, my homeowners association was convinced that I owed $15,000 in fines because several months earlier, the prior owners had been notified that there was some painting that needed to be done and plants that needed to be replaced. The previous owners didn’t act, so fines of $100 per day, up to a maximum of $15,000, had been imposed.

When I contacted the HOA to let them know that we’d only recently purchased the property, couldn’t possibly have made the repairs, and didn’t even know about the requests to correct the association violations, they said it didn’t matter. The fines followed the house.

And they were right. If you buy a house with outstanding fines or fees assessed by the homeowners association and those aren’t paid off at closing, they can become your responsibility. They don’t just disappear. The HOA can even get a lien on the home, claiming an ownership interest and potentially foreclosing on you if you don’t pay up.

Here’s what ended up happening

There was some good news, despite the HOA’s insistence that I was responsible for the fines. When I purchased my home, I got something called an estoppel. Basically, this is a legal document you pay the homeowners association to prepare before closing. It lists all the outstanding monies due.

The estoppel did not list this $15,000 fine because it was imposed in the short period after the estoppel had been prepared by the HOA, but before we closed with our mortgage lender. Different parts of the association voted to impose the fines compared with the team that prepared the document. So the fines didn’t end up listed, despite the fact that the rules for the estoppel require associations to specify any costs that will come due before closing happens.

The law in my state, and in most states, says that buyers and sellers can rely on the estoppel in good faith and the association can’t collect any fines or fees not listed in it. Fortunately, I have a law degree, was able to look up these rules myself, and was able to approach the HOA with my informed knowledge, so they ended up removing the fines. If that wasn’t the case, I might have had to hire a lawyer to help me — or might have assumed I had to pay and been out a lot of money.

If you are buying a house in an HOA neighborhood, you must be aware this could happen to you. If your association has the ability to collect fines and they impose them on the former owners, you could become responsible for the costs if they aren’t paid in full at closing.

You must ensure an estoppel is prepared and that you review it carefully for any signs of problems. And you must know your rights under state law if fines are imposed upon you, which you can find in your state’s legislative code. Alternatively, you could just not buy a house in an HOA neighborhood — which my story may convince you is your best bet.

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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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Costco is not just for groceries; it can save you big money on appliances, furniture, tires, vehicles, vacations, and more. See how to get Costco’s best deals. [[{“value”:”

Costco is not just a great place to buy $1.50 hot dogs and cheap rotisserie chicken: it offers surprising savings on big-ticket purchases like tires, furniture, and even cars. I’m a longtime Costco member and I’m passionate about shopping at Costco. And while no one loves shelling out big money to replace a broken refrigerator or punctured tire, Costco makes the process easy. You can even find good deals on affordable luxuries at Costco.

Next time I’m in the market for any of these higher-priced items, I’m going to check Costco first.

1. Car tires from Costco Tire Center

Along with my unfortunate history of getting into lots of car crashes, I also seem to constantly be running over nails, screws, shards of glass, and hunks of metal. As a result, I frequently have suspiciously low air pressure in my tires, and end up needing to get my tires patched, fixed, and replaced.

Fortunately, the Costco Tire Center gives me great deals on new tires and lifelong maintenance of those tires. You get free tire rotation and other tire-related perks when you buy tires at Costco. It offers a wide range of tires, including specialty tires that you might need for an electric vehicle. And if your local Costco Tire Center doesn’t have the right tires in stock, staff can help you order them online to be shipped and installed at your local warehouse.

2. Furniture

Costco offers great deals on living room furniture, outdoor patio furniture, mattresses, and more. You can also order furniture online and have it delivered from the Costco Direct program; you’re not limited only to what furniture is available at your local Costco warehouse. For some items, Costco Direct also includes installation or setup.

3. Online shopping for high-end items with Costco Next

A lot of people might not know about this, but along with the “treasure hunts” for affordable luxuries in-store, Costco also has an online shopping program called Costco Next. With Costco Next, you can get members-only pricing on a wide range of high-end items (like luxury skincare products or bicycles) directly from Costco’s brand partners.

I’ve found surprisingly good deals on Costco Next on luggage, bicycles, and other products where you don’t always want the “cheapest” price, but are willing to seek out the best fit for your needs. Costco helps you save time (and money) by curating these great deals for you. And you can buy online without going to the local warehouse store.

4. Appliances

Costco offers great deals on refrigerators, stoves, washers and dryers, microwaves and more. Sometimes they have members-only pricing with limited time offers to help you save even more money on appliances. Your Costco appliance price also includes free delivery and installation, free disposal of your old appliance, a two-year warranty, and more.

And if you buy appliances that are tagged on the Costco website as “Costco Direct,” you can save an extra $100 per additional item you buy. Costco Direct is an online shopping option that lets you buy big-ticket items like appliances directly from the Costco distribution centers, without having to go to your local warehouse. So if you’re ever in a situation where you need to buy a new refrigerator and a new stove, or a new TV and a new couch, check out Costco Direct for even bigger savings.

5. International travel

Sometimes the best way to travel, especially if you want to travel to other countries, is to sign up for a travel package or group tour. Costco Travel has great deals on high-end travel such as all-inclusive resort packages, cruises, multi-city tours of Europe and other parts of the world, and more.

One of my friends got a great deal to travel to London for the first time because of Costco Travel; his family had a fantastic experience and it was all made easier for them because Costco Travel found the hotels and recommended the itinerary. In the same way that I trust Costco to “curate” delicious trail mix and good deals on tires, Costco Travel can be your built-in travel agency to arrange an affordable, adventurous vacation for you.

6. Home decorating, home installations, flooring, windows and more

Do you need new carpet, new flooring, new window treatments, new cabinets or countertops? Costco can help. Costco members can sign up for home installation services from approved vendors.

You get members-only pricing from reputable local contractors that are approved by Costco, and you pay the contractor directly. Then you get a 10% Costco gift card based on the price you paid for that home installation project. For example, if you buy new window treatments or new kitchen cabinets that cost a total of $15,000, you get a $1,500 Costco Shop Card.

7. Costco Auto for a new car

I don’t intend to buy a new car in 2024, but if I was in the market for a car (new or used), I would definitely check Costco Auto. The Ascent’s research found that Costco members can typically save $1,000 on the purchase of a vehicle through Costco. Costco Auto connects you with approved partner dealerships for a no-haggle process. And your Costco savings are in addition to any special dealer discounts, manufacturer rebates, or EV tax credits.

Bottom line

Costco members get the potential for hundreds or thousands of dollars of cost savings and added value per year. Isn’t that worth a $60 membership fee? And you get cheap hot dogs! I love being a Costco member, and I hope Costco’s great deals can improve your personal finances, too.

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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 Costco Wholesale. The Motley Fool has a disclosure policy.

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American Express has partnered with an award flight search tool, Point.me. Learn how this tool could help Amex cardholders use their rewards points. [[{“value”:”

Earlier this month, American Express announced a partnership with travel rewards search platform point.me. Eligible American Express cardholders can use the tool to search for award flights from airline partners of the Membership Rewards® program. This partnership can help travelers maximize the value of their American Express Membership Rewards® points. If you’re an American Express cardholder, here’s what you should know about the news.

What to expect from the Amex and point.me partnership

Point.me is a paid search platform that lets users search for award flight options. This tool makes it easier for travelers to find the best redemptions to maximize the points and miles they earn from credit cards and airline loyalty programs. To search for award flights, travelers start by entering their preferred travel dates and destination.

The search tool supports economy, premium economy, first, and business class flights across over 150 airlines. Users will be shown flight options, the total number of points or miles required, and any taxes or fees they’d need to pay when booking. They’ll also be shown step-by-step instructions for redeeming their points for an award flight of their choice.

A point.me standard membership, which includes unlimited searches, costs $12 a month or $129 annually. However, eligible Amex cardholders get free access to this tool. Cardholders can log in to their Amex accounts at point.me/amex to confirm eligibility and use the program. (Terms apply; enrollment required.)

Point.me will show users award flight options for airline loyalty programs participating in the Membership Rewards® program. After performing an award flight search, users must transfer their points to a participating program through their Membership Rewards® account and book the flight directly with the airline. Award flights can’t be booked directly on the point.me platform.

Pricing award flights across multiple airline rewards programs can be time-consuming. Using a tool like point.me lets busy travelers like you search numerous airline loyalty programs simultaneously to plan their next award flight redemption faster. You may benefit from this partnership if you have one of the best American Express cards.

Travel transfer partners can help you maximize your points

Travel credit cards with rewards programs that include airline and hotel partners can be a win. While many rewards credit cards offer multiple redemption options, transferring rewards to a travel partner can be a great strategy if you want to maximize the value of your rewards.

While many credit cards allow users to redeem their rewards for cash back or a statement credit, this usually isn’t the best use of points. You may get more value from your rewards by transferring your points to an airline partner and redeeming them for an award flight, for example.

Review your redemption options before redeeming your credit card rewards, and consider which redemption will best suit your needs and goals. If you like to travel, redeeming your rewards for award flights may be worthwhile. Using tools like point.me can help you plan your next trip.

Should you add a travel rewards credit card to your wallet?

Can you benefit from getting a travel rewards credit card? If you like to travel, it’s likely. There are many options available, including general travel credit cards and airline credit cards. A travel credit card may be ideal if you want to earn points or miles and access travel-specific benefits.

But consider your needs and goals before applying for a new credit card. Many frequent travelers find these rewards credit cards valuable because they can continue to prioritize their travel goals while keeping more money in the bank. Browse our list of the best travel rewards credit cards to learn more.

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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.American Express is an advertising partner of The Ascent, a Motley Fool company. Natasha Gabrielle 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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Want to reduce your California income tax bill? Check out this list of California state tax credits — for families, child care costs, renters, and more. [[{“value”:”

California’s top state income tax bracket is 12.3%. But lots of Californians won’t pay that top percentage — you need to have almost $700,000 of income before you get taxed at that rate. Instead, many Californians pay a lower tax rate. And California also offers some unique state tax credits for parents, renters, divorced people with joint custody, or other financial situations and stages of life.

Let’s look at a few of the best California tax credits that could reduce your Golden State income taxes.

1. California Earned Income Tax Credit (CalEITC)

This tax credit is for lower-income people with a maximum earned income of $30,950 for 2023. The CalEITC is worth up to $285 for people with no children, or up to $3,529 for families with three children or more. This is a “cash back” tax credit: Even if you don’t owe taxes, you will get the full amount of California Earned Income Tax Credit that you qualify for, based on your income and family size. Check out the CalEITC website for more information.

2. Young Child Tax Credit

Lower-income families that qualify for the CalEITC might also qualify for the Young Child Tax Credit. If your earned income is $30,931 or less, and you have a child under the age of 6, you could get a California state tax credit of up to $1,117. Just like the CalEITC, the Young Child Tax Credit is also a “cash back” tax credit that puts money in your bank account even if you owe zero state income taxes.

3. Child and Dependent Care Expenses Credit

If you’re paying money for child care while you work (or search for a job), you can claim a state income tax credit for those expenses. The California Child and Dependent Care Expenses Credit is based on child care expenses of up to $3,000 for one child, and $6,000 for two or more children.

Keep in mind: $3,000-$6,000 is not the amount of the credit. The exact amount of tax credit will be a percentage of the daycare expenses you paid — and that percentage depends on the results of a complicated tax form calculation.

But no matter how much money you get, every California working parent who pays for child care needs to check out this tax credit. When paying the costs of raising a child, every dollar counts!

4. Nonrefundable renter’s credit

This California tax credit is for people who paid rent for at least half the year and who meet a few other qualifications. Your California income must be:

$50,746 or less for single filers or married/registered domestic partners (RDP) filing separately, or$101,492 or less for married couples/RDPs filing jointly, head of household, and qualifying widowers.

The tax credit doesn’t amount to much: only $60 for single filers and $120 for others. But if you’re paying rent in high-priced areas of California, just like parents with children at home, you probably are happy to get every last tax break you can find.

5. Senior head of household credit

Older adults sometimes need a little extra help in life, especially when they are recently widowed. Californians who are age 65 and older whose spouse or “qualifying person” died in the past two years can qualify for the Senior head of household tax credit. Seniors must have income of less than $92,719 to qualify, and the maximum amount of this tax credit is $1,748.

6. Joint custody head of household

If you are a divorced parent, you know how complex it can be to juggle the scheduling, costs, and occasional friction points of managing joint custody. California offers a special tax credit for parents in joint custody arrangements. To get the joint custody head of household tax credit, you must pay for more than half of the child’s expenses, and your tax-filing status must be single or married/RDP filing separately. The maximum amount of this tax credit is $573.

7. Other state tax credit

Some higher-income Californians who own real estate in other states, or who travel for business and work in other locations, might have situations where they owe taxes in other states. The creatively named “other state tax credit” helps Californians avoid being taxed twice. If you qualify, you can use this tax credit to offset the taxes that you’ve paid to another state. California is not a “low-tax” state, but at least it’s not a “double-tax” state!

8. College Access Tax Credit

California does not offer state income tax deductions for money you put into a 529 college savings plan. But the Golden State does have an interesting program that offers tax credits if you donate money to help other people go to college. This is called the College Access Tax Credit, and if you qualify, you can get a tax credit for 50% of the money you donate to the California Access Tax Credit (CATC) Fund.

The CATC Fund helps pay for college for California students attending Historically Black Colleges and Universities (HBCUs). To get this tax credit, you have to apply online with the California Educational Facilities Authority. If you’re approved, you can make your donation and claim your tax credit.

Bottom line

Some California tax credits are more complicated and less lucrative than others, but all the state tax credits on this list are worth exploring. California taxpayers can use tax software to claim all the credits that they’re allowed to get under the law. See if you can save on your California income taxes in 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.The Motley Fool has a disclosure policy.

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