Money Management

Want to buy a hot dog at the ballpark? Most sports venues don’t accept cash anymore. Here’s how it could impact your wallet. [[{“value”:”

America is quickly becoming a more cashless society, and sports venues are leading the charge. As of 2022, nearly all Major League Baseball ballparks had gone cashless, along with most NFL stadiums and NBA/NHL arenas like the United Center in Chicago. Some venues now offer “reverse ATMs” where you can put cash onto a prepaid card that can be used within the stadium, while others are offering mobile orders for concessions — turning the gameday experience into something more like Grubhub.

There are pros and cons to the greater evolution of cashlessness. If cashless stadiums can help shorten the lines at concession stands and make the fan experience more seamless, digital, and easy to manage, then it could be a good thing. But there are also some potential downsides and complications. If the U.S. economy goes the way of sports stadiums and events venues, and becomes completely cashless, there could be big implications for your personal finances.

Let’s look at a few big trends with the growth of cashless stadiums, and how they affect your (digital) wallet.

1. Cash is no longer king?

Pew Research found that as of 2022, 41% of Americans said that they never use cash for purchases in a typical week. This share of cashless Americans has grown significantly since 2015, when only 24% of Americans went without cash. Cash is likely to continue to decline as a form of payment, as more Americans use debit cards, credit cards, digital wallets, or P2P payment apps to pay bills and send money.

However, some people prefer using cash and will likely find it harder to navigate everyday life in a more cashless world. If you like the feeling of controlling your money (by literally holding it in your hand), knowing how much you spend, or using cash stuffing/envelope method to save money, this could be bad news for your savings goals.

2. Watch your spending

Stadiums are reporting higher sales per order on concessions because of cashless technology. A study from the United Kingdom found that cashless payments led to a 15%-30% increase in spending by fans. That’s good news for stadiums and sports teams, but what if cashless venues cause people to overspend?

In the “old days” of cash, you could go to the game with a few bills of cash in hand, and know that you weren’t going to spend any more than that amount. But In a cashless world, it’s important to adopt new mindsets to help control your spending. Sometimes when companies make it a little too convenient for you to spend money, this can lead to bad results for your personal finances.

3. More mobile banking and digital wallets

A big reason for the rise of cashless stadiums was the pandemic. When sports leagues were trying to re-open in 2021, they wanted to reduce the points of contact between crowds of fans and concession stand staff. Every line of people waiting for beer and hot dogs and every moment spent fumbling for cash became an occasion for possible COVID-19 spread.

One benefit that came out of these experiments with cashless stadiums is that the concession lines really are shorter as a result. Cashless payment options can reduce transaction time by 50%. As a sports fan or concertgoer, that means less time waiting in line for food and drinks, and more time in your seat enjoying the event.

Beyond stadiums, the entire future of payments, banking, and personal finance is likely going to be more contactless, mobile first, and digital. If you love digital banking apps and have a good comfort level with them, then that’s good news. But some people might struggle to adapt, and might miss the days of cash. Even though cash is slower, messier, and riskier in some ways, it also offers convenience and privacy.

4. Bigger digital divide for the unbanked

Some people don’t have a bank account, a debit card, or a credit card. What does the cashless future mean for the unbanked? Will this trend toward cashless payments become a bigger driver of the “digital divide” between people who can easily afford and access online services and mobile apps, and those who cannot?

What if it becomes harder for people to spend their cash, if more venues don’t accept it? Colorado State requires businesses to offer cash-to-prepaid card kiosks, so people can bring their cash to the stadium. The Denver Broncos and Colorado Rockies’ stadiums both offer this feature. Even if cashless payments are the future, we’re likely to see more state and local laws that could require public venues to offer cash as an option.

Bottom line: The future of digital payments is here. Contactless payments (via card, app, or digital wallet) have become so popular and prevalent, that many public venues are no longer accepting cash. This is another vivid example of how digital wallets and mobile payment technology can affect your personal finances. If you’re a longtime envelope stuffer who prefers to pay with cash, you might need to find new strategies for how to budget and save.

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As home buying in popular areas becomes increasingly more expensive, some people are buying vacation homes first. Learn more about this strategic investment. [[{“value”:”

When you think of buying a home, the typical path seems straightforward: purchase a primary residence, settle down, and maybe, just maybe, consider a vacation or second home later. But what if we flip the script and buy a second home first? Well, that’s what I did.

When I embarked on my home-buying adventure, I joined a growing trend among first-time buyers. A survey by Consumer Affairs revealed a staggering 80% of potential first-time home buyers would consider purchasing an investment property in a cheaper market than their current one. This approach resonated with me, especially living in Manhattan, where the high cost of real estate often makes renting more viable than buying. To illustrate, purchasing a modest two-bedroom in a desirable neighborhood here can exceed $1.7 million, demanding at least $340,000 for a down payment.

So, instead of plunging into the daunting Manhattan market, I decided to keep renting in the city and buy what is traditionally considered a “second home” elsewhere. This wasn’t merely a weekend retreat, but a strategic investment, allowing me to maintain my urban rental while building equity in a more affordable location.

But is this a good idea? Let’s dive into the whys and why nots

Assess your lifestyle and financial goals

I faced a dilemma familiar to many: loving life in New York City but balking at the sky-high prices of owning a home here. It’s a scenario not just limited to city dwellers. Whether you’re in the urban hustle, a cozy suburb, or a small town, the idea of buying a second home in a more affordable area first can be a game-changer, especially if you’re not quite ready to plant roots in one place or the cost of a primary home in your area is just too steep.

This is not just about me and New York City; it’s a strategy that can work for many people in various personal finance situations. It’s perfect for those who want to keep their current lifestyle, whether because of work, family or just loving where they are while dipping their toes into the real estate market. Think of it as having your cake and eating it too — you get to stay in your preferred area without the heavy financial burden of buying there.

Financially, this approach could be pretty smart. Owning a second home elsewhere can bring in rental income and the house may grow in value over time. It’s a savvy investment and a lifestyle choice rolled into one. Essentially, it’s about making your current needs and future goals work together in harmony.

Understand the financial implications

Let’s talk money. Buying a second home involves unique financial considerations. You’ll need a larger down payment, typically 20% to 30%. Mortgage lenders often view second homes as higher-risk investments, so expect stricter credit requirements and possibly higher interest rates.

But there’s a silver lining — tax benefits. The interest on your mortgage and property taxes might be deductible. And if you rent it out, you can deduct certain expenses like maintenance and utilities, though this comes with additional tax complexities.

Plus, in my case, it was much cheaper to buy a second home. Even though it was still 20% down, it was 20% down on $350,000 versus 20% down on $1.7 million. That’s $70,000 down instead of $340,000.

Navigating the real estate market

The real estate market is like a roller coaster — thrilling, unpredictable, and not for the faint-hearted. When buying a second home, especially as your first purchase, thorough research is crucial. Look for emerging markets or established areas with proven rental demand. And remember, location is key. A picturesque cabin in the mountains or a cozy beachfront cottage? Your choice should align with both rental market trends and your personal taste.

Consider the practicalities

Now, let’s get practical. Owning a second home means double the responsibility. This equals maintenance, repairs, and dealing with tenants if you rent it out, all while you’re miles away in Manhattan. It’s manageable but requires organization and potentially hiring a property manager.

Also, think about your long-term plans. Will this second home remain a weekend escape and rental property, or might it become your primary residence eventually? Flexibility in your future plans is essential.

So, should you buy a second home first? It’s a bold move and not without its challenges. But for the right person, it can be incredibly rewarding. You end up with a getaway spot, a potential source of income, and an investment in real estate.

However, if juggling two properties feels daunting or your financial situation isn’t quite ready for the leap, it might be better to wait. The real estate journey is deeply personal, and what works for one may not suit another.

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Buying birthday gifts doesn’t have to be something you do just because it’s a tradition. Read on to learn why we prioritize experiences over physical items. [[{“value”:”

Buying birthday gifts is a time-honored tradition, although estimates of how much people actually spend can vary. One study revealed that many people spend around $41 to $100 per gift, while another suggested that about $25 is common, regardless of the relationship between the gifter and the recipient.

In our house, though, there’s no question of how much my husband and I will spend on birthday gifts for each other. The number is $0. No money comes out of our checking account for presents for the “big day.”

Here’s why — and what we do instead.

Birthday gifts are a no-go at our house for a simple reason

My husband and I made the joint choice to stop giving birthday presents to each other many years ago. One of the main reasons we gave up the habit is because neither of us really need anything. We buy items we want throughout the year as we find it and as it fits into our budget. Because of this, it was actually pretty stressful to try to think about presents for each other, since there were no real unfulfilled wants.

Since neither of us really needed anything, the gifts we were buying often ended up being a waste of money and not great for our personal finances. We’d get items we wouldn’t otherwise have purchased — like t-shirts or a box of candy from a fancy candy store — just to have something to hand to the other person to unwrap.

This started to feel silly to us, especially since we’ve been married for over a decade and it’s not as if we need gifts to prove our love to each other. So, instead we opted to do something that would bring us a lot more joy. We take the amount that we would have spent on gifts and we add it to our vacation savings account.

Since we both really value our ability to travel, we feel like the money is a lot better spent enabling us to do something more special on a trip we take — even if it’s not anywhere near our birthdays. The $100 or more we deposit in there every year has allowed us to cover expenses like theme park tickets for an extra day or a nice meal out while we’re away.

Could an alternative to gift-giving bring you more joy?

For us, it was an easy call to give up birthday gifts because we had something we thought was “better” to do with our money.

Now, this may not be the case for everyone, but it’s definitely worth considering why you’re giving gifts for birthdays and perhaps even other special occasions like Valentine’s Day or anniversaries or even (dare I say it) Christmas.

If gift giving has become a source of stress or an obligation rather than something you genuinely get excited about, you may be able to find something you’d both prefer to do with your money. Some possible options include:

Making a special meal at home for each otherSharing a special experience together, like a couple’s massage.Planning a unique date night, such as an escape roomRecreating your first dateTaking a class together, such as a cooking class or dance classPlanning a special hikeGoing on a picnic in a park togetherBuying something for your house, like a special piece of art

It’s worth at least considering these alternatives and discussing breaking the “buying gifts” tradition with your significant other. Just be sure to do it long before a birthday actually arrives, so your spouse doesn’t think you’re just looking for an excuse not to shop for them!

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CDs often have stricter rules than savings accounts. Here’s what to know beforehand so you can avoid making a mistake. [[{“value”:”

Some CDs have interest rates above 5% right now, making them an excellent choice for people looking to grow their money in a relatively safe way.

But as with nearly any financial decision, some people have regrets after opening a CD account. Here are three potential regrets CD owners experience, and how to avoid them.

Regret No. 1: Not having access to your money

CDs pay you a specific yield in exchange for holding your money for a set period. When you open a CD, you choose how much money to put into it and how long you want to leave it there.

For example, the shortest time you can have money in a CD is usually around three to six months — although occasionally you will run across a bank offering shorter terms. Many other CDs may last longer, including 1-year, 3-year, and 5-year CDs. Because your money is locked up for this period, it’s less liquid than keeping it in a checking or savings account.

How to avoid this regret: It’s important to avoid putting money into a CD you may need for emergencies. You should only put money into a CD after you’ve built your emergency fund and have extra money left over. Ideally, you should have three to six months’ worth of expenses in a savings account, but aim for at least $1,000 for emergency expenses. Once you have that amount in a savings account, you can consider opening a CD.

Additionally, you may want to consider CD laddering. With CD ladders, you put money into several CDs that reach maturity at different times. This ensures you have access to some of your money as the shorter CD terms mature. You can then choose to reinvest that money in another CD, or take it out and use it (or invest it some other way).

Regret No. 2: Not getting the yield you want

With many CDs currently paying an annual APY of 5%, this regret may not be as prevalent as it once was. But some people who signed up for CDs many years ago when rates were lower may regret not having the higher rates available today.

That might mean some people with their money in CDs weren’t able to earn enough to have their money keep up with the rate of inflation over the past few years.

Additionally, putting money in a CD means that you often opt for a lower rate of return than you might have gotten if you put that same amount into the stock market. For example, the historic annual rate of return for the S&P 500 is around 10%. There’s no guarantee you’ll earn that rate in any given year, but the stock market always has the potential for higher returns than CDs.

How to avoid this regret: There’s nothing much you can do right now about a CD you signed up for years ago that pays a lower interest rate than today. But if you’re considering a CD right now, make sure to balance that investment with your stock market investments, and do your research before opening a CD to ensure you find one with as high an APY as possible for the term you’re looking for.

U.S. Bank recommends keeping 2% to 10% of your entire portfolio in cash and cash equivalents (which include CDs). This allocation suggestion keeps you from putting too much money into CDs (or holding too much cash) and allows a larger percentage of your investment portfolio to earn a higher return in the stock market.

Regret No. 3: Paying an early withdrawal penalty

Another regret some people have with CDs is that they have to pay a penalty to withdraw their money early. This regret goes hand in hand with the first regret of not having access to your money, but it deserves its own section because the penalties can be significant.

For example, Wells Fargo says that if your CD term is between one and two years, you can be charged up to six months’ worth of interest for an early withdrawal. If the CD term is longer than two years, the penalty is up to 12 months’ worth of interest. Ouch.

Generally, the longer the CD term, the higher the penalty fee you’ll pay for early withdrawal, and every bank and credit union sets its own penalties.

How to avoid this regret: The best way to avoid early withdrawal penalties is to, of course, leave your money in the CD. You should ensure you don’t need the money going into a CD for any reason during the term, including emergencies. To avoid withdrawing money early from your CD, keep enough money in a savings account to handle unexpected expenses.

CDs can be an excellent option for earning interest on your money, but they aren’t as liquid as savings accounts and have more restrictions. Be sure to read the fine print before opening a CD, and only put money into it if you are ready to part with it for the duration of the CD’s term.

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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.Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends U.S. Bancorp. The Motley Fool has a disclosure policy.

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Some personal finance ideas on TikTok are actually good — and one of the best is “loud budgeting.” See how this concept can improve your personal finances. [[{“value”:”

A hot new Gen Z personal finance trend has emerged on TikTok, where young people are talking about the concept of “loud budgeting.” The phrase was coined by TikToker Lucas Battle, who said that instead of idolizing celebrities who dress with “quiet luxury,” everyday people who want to save money should embrace “loud budgeting.”

What is loud budgeting, and how can it help you save money in 2024? Let’s find out.

Loud budgeting: A new kind of financial freedom

Often when people are trying to save money, frugality becomes a kind of quiet suffering and monklike self-isolation. You stop seeing friends, you cut back on expensive-but-fun retail therapy, you start eating sad bagged salad kits alone at your desk instead of going out for lunch. It’s no wonder that budgeting has a bad reputation. No one wants to deny themselves joy and pleasure, even if their bank account suffers as a result.

The concept of loud budgeting is about financial freedom of speech. Instead of suffering silently and abandoning your friends because you can’t afford to split a bar tab or restaurant bill, loud budgeting lets you be loud and proud about being frugal.

Loud budgeting statements might include:

“Sorry, I can’t come out tonight because I’m trying to save money.””I’m trying to make all my meals at home this month so I can pay off my credit card.””I don’t want to buy that expensive (clothing item/exercise equipment/new smartphone or gadget) because it’s not worth it to me.”

Loud budgeting is about declaring your independence from consumerism and embracing a more minimalist lifestyle. You don’t have to just mindlessly keep buying what the celebrities and social media influencers are selling. Loud budgeting is egalitarian, inclusive, a way for the average person to fight back against high inflation and overpriced stuff. It’s like “Fanfare for the Common Man” for personal finances.

Let’s look at a few ways that loud budgeting can improve your personal finances and financial wellness — beyond just the numbers in the bank.

1. Loud budgeting helps you be mindful about purchases

In the past few years of pandemic isolation, big increases in online shopping, and rising inflation, some people have responded to higher prices with “doom spending” — buying more stuff, even if they can’t really afford it. Many Americans have depleted their savings since 2020. There has also been a recent increase in credit card delinquencies.

Loud budgeting is an antidote to doom spending. Instead of mindlessly scrolling through social media or online shopping sites to get distracted by new things to buy, loud budgeting helps you be mindful about purchases. It helps debunk and demystify the advertising mind tricks that big companies use to get you to buy stuff you don’t need. Instead of helplessly putting more purchases on your credit card, as if you have no free will, loud budgeting lets you say: “I don’t want to buy that, and I don’t have to!”

2. Loud budgeting helps you set boundaries

Lukas Battle’s original (funny and entertaining) TikTok video describes how loud budgeting isn’t about “not having enough” money, it’s about saying “I don’t want to spend it.” This can be a healthy way of establishing emotional boundaries — not just with your money, but with other people in your life.

Lukas gave an example of how, if your friend texts you asking to hang out, you can say to them, “I don’t want to spend money on gas so I can come to your place and listen to you talk about your ex for three hours.”

It can be hard to be young. Sometimes you might find yourself hanging out too often with people that you don’t really enjoy, or spending too much time and money in bars, or on pastimes that really aren’t good investments. Loud budgeting can give you clarity and confidence to say, “I would rather not spend my time (and money) on these people or experiences.”

3. Loud budgeting helps you know your worth

Lukas Battle’s TikTok video describes how, instead of buying luxury clothes or an expensive handbag, it’s “more chic, more stylish, more of a flex” to not buy expensive stuff. Loud budgeting is a way to get one over on the system, and keep more of your hard-earned cash for yourself, instead of losing it to soulless corporations.

Loud budgeting is a declaration of financial independence from young people on TikTok. Could this become a big new trend in personal finances? The fact that so many Gen Zers are interested in “loud budgeting” is a sign that many Americans, especially young adults at the early stages of their careers, are feeling tapped out and tired of shopping.

Bottom line: If you want to save more money in 2024, you might want to try “loud budgeting.” Be more mindful with your spending, create better boundaries about how you spend (and who you spend time with), and raise your standards for how and when you’ll spend money. Loud budgeting could (not so quietly) put extra cash back in your bank account, help you invest your time more profitably, and restore your sense of financial wellness.

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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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