Money Management

Does a strong economy mean you don’t have to worry about getting laid off? Not exactly. Read on to learn more. [[{“value”:”

The start of 2024 seems to be a positive time from an economic standpoint. Not only did the U.S. economy add 353,000 jobs in January — a number that blew past analysts’ expectations — but the jobless rate held steady at 3.7%. In fact, the unemployment rate has remained at under 4% for roughly two years now, which is something workers today can certainly take comfort in.

But while economic conditions seem favorable on the labor market front, the reality is that it’s possible to get laid off even when the economy is doing well, or even when your company is doing well. So while there’s no particular need to lose sleep over a potential layoff in general, it’s always a good idea to be prepared for the loss of your job. Here’s how you can set yourself up to survive a layoff should that end up being your fate.

1. Build or bolster your emergency fund

When you lose your job, you generally lose the paycheck that comes with it (in some cases, you may be eligible for a severance package that replaces your income for a period). And without a paycheck, it’s pretty difficult to pay your bills.

That’s why it’s so important to have a solid emergency fund. Without cash in your savings account, you might end up having to resort to debt to pay for things like rent or groceries.

Ideally, your emergency fund should have enough money to cover three months of essential bills at a minimum. If you’re starting with pretty much no savings, don’t expect to accumulate a fully loaded emergency fund in months. It might take years — but start by saving some amount of money each month and do the best you can.

If you’re laid off, a $1,500 savings balance may not last you very long. But you’re certainly better off having $1,500 than no money in savings at all.

2. Boost your job skills

Being great at what you do won’t necessarily prevent you from losing your job. But it could make it easier to find a new one.

Think about the skills you’re currently lacking and make a plan to boost them. You may, for example, ask to shadow a colleague who’s been in the industry for a while so you can learn from them. Or there may be a low-cost online course you can take that allows you to build knowledge.

3. Try to eliminate high-interest debt

The loss of your job could constitute a huge financial blow. And the last thing you need when you’ve lost your paycheck is a monthly credit card payment to make. If you’re able to pay down your credit card debt, or any other high-interest loan you might have, you’ll be better off for it — whether you end up losing your job or not.

Of course, your emergency fund should take priority over paying off debt — without savings, you run the risk of adding to your debt. But once you have ample cash reserves in the bank, try to tackle your debt as best as you can.

Although the economy is in a good place, things could, at some point, take a turn for the worse. Or your employer could simply decide it wants to cut corners and eliminate your position. That’s why it’s so important to be layoff-ready at all times. And you can do so by building savings, growing your skills, and shedding costly debt so it’s not hanging over your head.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has nearly tripled the market.*

They just revealed what they believe are the 10 best stocks for investors to buy right now…

See the 10 stocks

*Stock Advisor returns as of February 6, 2024

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.

“}]] Read More 

Valentine’s Day flowers get more expensive the longer you wait. Learn five ways you can save on flowers if you haven’t placed your order yet. [[{“value”:”

Some people say that Valentine’s Day is just a holiday created by card companies — but to other people, Valentine’s Day is an important opportunity to show love. If your partner is in the latter camp, you’d be wise not to screw up on Valentine’s Day.

About 39% of people who plan to spend money for Valentine’s Day intend to buy flowers, according to the National Retail Federation. But with less than a week until Valentine’s Day, you may find that those flowers are getting pricey. Follow these five tips to save money while shopping for flowers for Valentine’s Day.

1. Don’t wait any longer

Flower prices typically start to rise in mid-January, and they continue to sprout up until Feb. 14. The longer you wait, the more you’ll pay. So if you’ve been putting off ordering flowers, quit waiting and place your order as soon as you finish this article.

2. Stay away from roses

Red roses are by far the most popular type of Valentine’s Day flower, according to the Society of American Florists. That high demand makes buying red roses an especially expensive way to show your love. You may be able to save money by going with a less in-demand flower, like tulips or daisies, or by going with another color of roses, such as pink or white.

3. Deliver the bouquet yourself

Many florists charge around 10% to 20% extra to deliver a bouquet, so you could save money by picking up the flowers and delivering them in person. You can tell your significant other that you wanted to hand-deliver them because you had to see the smile on their face.

4. Hit up your local grocery store

Many local grocery stores have floral departments that offer bouquets for much cheaper than you’d get from a florist. If you want to try your hand at flower arrangement, you could also create your own bouquet by buying individual flowers, as well as a nice vase.

Warehouse clubs can be a great place to buy affordable flowers. As of this writing, Costco had several Valentine’s Day rose arrangements for between $49.99 and $69.99 — but you generally have to place the order by Feb. 12, if not sooner.

5. Check out Amazon

Amazon offers same-day flower delivery and has plenty of affordable Valentine’s Day arrangements. Of course, even Amazon can run out of stock when something is in high demand, so place your order now. You can change the delivery date at check-out so the flowers arrive on Feb. 14.

If you’re a regular Amazon shopper, check out our picks for the best Amazon credit cards so you can earn rewards on your purchases.

Should you spend money for Valentine’s Day?

There’s nothing wrong with wanting to be treated on Valentine’s Day. On the other hand, it’s understandable that you may not want to shell out if the holiday simply isn’t important to you.

But communicate with your partner and try to get on the same page about whether you’ll be splurging or saving. If you don’t feel that flowers, candy, or a fancy dinner are in your budget, explain that before Valentine’s Day. Create a plan to celebrate that doesn’t involve spending money. Or if you’d prefer that your partner not buy Valentine’s Day gifts because you’re working toward a savings goal, tell them that before they go out and splurge.

You won’t always agree about money issues. But if you set expectations about how much you’ll be spending, there’s less room for disappointment.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has nearly tripled the market.*

They just revealed what they believe are the 10 best stocks for investors to buy right now…

See the 10 stocks

*Stock Advisor returns as of February 6, 2024

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.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Robin Hartill, CFP® has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Costco Wholesale. The Motley Fool has a disclosure policy.

“}]] Read More 

Roth IRAs are more popular than traditional IRAs. Learn how to decide whether you should opt for one over the other to save for retirement. [[{“value”:”

If you’re saving for retirement, you have a few options. First and foremost, if you have a company match where your employer matches your contributions to your 401(k) plan, you should invest enough in that account to earn the full match. There’s almost never a reason to pass up this free money.

Once you’ve done that though, or if your company doesn’t have a 401(k) match, putting money into an IRA can be a good option. You can open an IRA at any brokerage firm and gain access to more investment choices than a typical 401(k) offers while still scoring retirement tax breaks.

There are actually different kinds of IRAs you can choose from, but one is far more popular than others. Find out why and how to tell if it may be right for you.

Most IRA contributions go into this kind of account

According to Fidelity, the vast majority of IRA contributions end up going to a Roth IRA, rather than a traditional one. In fact, 61.2% of all IRA contributions that are made go into a Roth IRA.

A Roth IRA is a tax-advantaged account you can invest in for retirement. But unlike your 401(k), you don’t take a deduction for the amount you contribute in the year you invest. Instead, you contribute post-tax dollars. When you get to retirement, though, you can withdraw money without paying any taxes on it. There are also Roth 401(K) accounts available, although not all employers offer them.

A Roth IRA is an alternative to a traditional IRA. A traditional IRA is more like your standard traditional 401(k) account. You get to take a tax deduction for the amount you contribute to it in the year you invest. But when you get to your retirement, you are taxed on withdrawals.

The Fidelity data shows many more people are opting to defer their tax break, claiming it later as a senior rather than right now. But is that a good idea?

Is a Roth IRA the right choice for you?

There are a few key benefits of a Roth IRA compared to a traditional one, which may make a Roth the right choice for many people.

Take advantage of lower taxes now

First, if you expect you will be in a higher tax bracket in retirement than you’re in now, a Roth IRA makes the most sense. You’re better off claiming your tax savings later when you’d otherwise be taxed at a higher rate. You could find yourself with a higher tax rate in retirement compared to now if your income goes up over time, or if the government acts to raise tax rates in the future — which is a very real possibility since rates right now are pretty low by historical standards.

More diversification

If you’re already contributing to a traditional 401(k), a Roth IRA gives you more diversification in your retirement savings. Your 401(k) comes with the tax break now rather than later, so by opting for a Roth IRA, you have accounts providing tax savings at different times. This allows you to hedge your bets since it can be really hard to know if your tax savings will be more now or in the future.

No RMDs

You aren’t required to take withdrawals from these accounts on any set time frame. By contrast, both traditional IRA and 401(k) accounts are subject to rules mandating required minimum distributions. Basically, you have to start taking money out of them based on an IRS table or you’ll be penalized. So if you don’t want the government making you withdraw from the account, a Roth makes more sense.

Avoid Social Security taxes

Investing in a Roth could also help you avoid taxes on Social Security. See, Social Security calculates “provisional” income by adding up half of your Social Security retirement benefits, some non-taxable income like MUNI bond interest, and all taxable income. Once single filers have $25,000 in provisional income or married joint filers have $32,000, you’ll have a federal tax bill to pay on benefits. But Roth distributions don’t count, so you can bring home more money without triggering a tax on benefits.

For all these reasons, it’s clear why Roth IRAs are so popular. When you’re investing for retirement, you should seriously consider putting your money into one once you’ve maxed out your 401(k) match.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has nearly tripled the market.*

They just revealed what they believe are the 10 best stocks for investors to buy right now…

See the 10 stocks

*Stock Advisor returns as of February 6, 2024

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.Christy Bieber 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.

“}]] Read More 

Getting laid off can harm you financially. Read on for ways to recover once you’re employed again. [[{“value”:”

The start of 2024 has already brought about news of layoffs across several industries, from finance to tech to media. And even though the economy is generally strong and unemployment is fairly low, the unfortunate reality is that your company could decide to cut its payroll costs at any time.

Being laid off can deal a huge blow to not just your outlook and self-esteem, but also your personal finances. So once a layoff happens, by all means, take a few days to sulk, cry, and blow off steam. But then, dust off your resume and start networking. If you put yourself out there, you may find that you’re able to find a new job in relatively short order.

That said, even if you’re only out of work temporarily, your finances might take a hit during a layoff. So if you’re coming off a period of being out of work, here are some essential moves that can help you bounce back.

1. Rebuild your emergency fund

The purpose of having an emergency fund is to be in a position to cover unplanned expenses, like home repairs, or to be able to pay your bills in the absence of a job. If you raided your savings account while you were out of work to cover your expenses, don’t feel bad about it. That’s what that money is there for.

However, once you’re employed again, do your best to trim your spending so you can put back the money you removed from your emergency fund. You don’t want to leave yourself vulnerable to debt in the event of another job-related hiccup or unanticipated expense.

2. Tackle your credit card debt as quickly as possible

Recent SecureSave data found that 63% of Americans are unequipped to tackle a $500 emergency expense. So if you spent some time without a job, you may have landed in credit card debt as a result.

That’s understandable, even if it’s not fun. But if you’re working again, make paying off that debt a priority. The longer you let it linger, the more interest you’re apt to accrue. On the other hand, if you’re able to pay off that debt within the year, you may not lose all that much money to interest on a balance that’s pretty recent.

3. Use the gig economy to your advantage until you’re more financially secure

Trimming your spending is a good way to free up cash to rebuild your emergency savings or pay off debt. But there may only be so much spending you can cut. So once you’re settled into your new job, explore your options for taking on a side hustle through the gig economy.

Now in this situation, it’s probably best to take on a side gig that allows you to set your own hours. Your new work schedule may not be so predictable at first. And as a newbie, it’s important to show your employer that you’re willing to be flexible. As such, gigs like driving for a ride-hailing service or doing grocery delivery may be suitable for you.

Coping with a layoff isn’t easy. And even once you’re working again, there may be lingering financial damage from a period of unemployment. Do your best to build back your savings and dig out of your debt pile. And if turning to the gig economy is the best way to meet those goals, so be it.

In fact, you may decide to hang onto your side gig even once your emergency fund is replenished and you’re debt-free. That way, if you’re laid off again, you’ll at least have a backup income stream to rely on.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has nearly tripled the market.*

They just revealed what they believe are the 10 best stocks for investors to buy right now…

See the 10 stocks

*Stock Advisor returns as of February 6, 2024

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.

“}]] Read More 

Many people would benefit from a higher credit score. Keep reading to learn why it’s better to fix your credit yourself rather than pay for this service. [[{“value”:”

If you’ve ever struggled with your credit and finances, you likely know the stress of applying for a loan or credit card and sweating it out while you wait to hear if you’re approved (or even better — getting that Magic 8 Ball response of “we’ll notify you by mail” and then getting denied). I have been there myself, and it’s the worst.

You might think that using a “credit repair” company is your best bet to get back on track. Unfortunately, many of these companies just want to take advantage of you — and take cash out of your checking account. Here’s what to watch out for, as well as ways to improve your credit yourself, for free.

1. The service overpromises

A scammy company might tell you that it can make all your problems go away and scrub your credit report clean. However, no one can remove accurate negative information that is still in-date on your credit report. If you missed a credit card payment a year ago, the company can’t do a thing about it, and neither can you. You’ll have to wait it out.

2. The service requests payment upfront — and won’t let you cancel

If a company is demanding payment from you to repair your credit, be suspicious. Under the Credit Repair Organizations Act, these companies are barred from this behavior. This law also requires that any services be offered in writing and consumers also get contract cancellation rights in certain circumstances.

3. The service refuses to tell you your rights

Here’s the dirty little secret of “credit repair” companies: They can’t do anything for you that you can’t do yourself. If a company refuses to tell you your rights over your own credit, that’s a huge red flag. Under the Fair Credit Reporting Act (FCRA), you have the right to dispute errors in your credit report and sign off on who gets to view it.

Good news — you can improve your credit yourself

There’s no reason to pay a company for something you can do yourself. If you can spend a little time laying the groundwork (and then exercise patience), you can absolutely improve your own credit.

Recommit to on-time payments

First and foremost, you should know that the biggest factor influencing your FICO® Score (the credit score used by 90% of lenders) is payment history. So if you’ve got some late or missed payments to creditors in your past, that likely explains a lower credit score. Resolve to make your payments on time going forward. As you build a solid positive payment history, your credit should improve.

Pay down debt

Another helpful move you can make is paying off debt, if possible. The most effective means I’ve found of doing this is to increase your income. The prospect of giving up some of your precious free time in pursuit of a side hustle is likely unappealing, but ending up with a higher credit score and more financial breathing room is the best feeling in the world. Raising my income and getting out of debt in 2022 boosted my credit score by 100 points in less than a year.

Dispute errors and old black marks

The main service that a paid “credit repair” company would provide you is disputing black marks on your credit report, and you can do that yourself. Start by heading over to AnnualCreditReport.com, where you can get free copies of your report from the three major consumer credit bureaus (Experian, Equifax, and TransUnion).

Read through your reports and look for errors (like an account you never had) or late/missed payments that are more than seven years old. If it’s been more than seven years, that information should no longer appear on your report — but if you see it anyway, contact the credit bureau.

Negotiate with creditors

If you owe money to a lender and can’t pay off the charges, reach out to the company to see about negotiating to pay a smaller amount. Many companies would rather take some amount of money and close your account than send you to collections, so it’s worth asking. Whatever deal you strike, be sure to get it in writing.

Speak to a nonprofit credit counselor

If you’re struggling, there is free help out there — no scammy “credit repair” companies required. The National Foundation for Credit Counseling is a great place to start. You’ll be able to get help rebuilding your credit, as well as learning how to budget and managing your money more effectively.

Bad credit doesn’t have to be forever, and you don’t have to pay some scammer to see your score rise. Consider these moves instead — and good luck.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has nearly tripled the market.*

They just revealed what they believe are the 10 best stocks for investors to buy right now…

See the 10 stocks

*Stock Advisor returns as of February 6, 2024

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.

“}]] Read More 

It’s easy to leave the funds in your savings account untouched. Keep reading to learn what experts say you should do instead. [[{“value”:”

The past few years have been challenging for us all, and it’s natural to be fatigued by the yo-yo nature of the economy. But don’t allow that fatigue to prevent you from making moves guaranteed to earn money. Take a look at the following list of common savings account moves. If any of them feel familiar, experts say you’re likely making a mistake.

Not having an emergency fund

At a time when the median savings account balance among Americans surveyed by The Motley Fool Ascent is $1,200, many of us don’t have enough to cover the recommended three to six months’ worth of bills. Building an emergency savings account is about giving yourself some breathing room if something unexpected happens, like a serious illness or job loss. Naturally, most Americans can’t deposit the entire amount into an emergency savings account at one time. But the truth is, building it up a little at a time can be quite effective.

Tip: If you’re not sure how much you should have put away for a rainy day, this easy-to-use emergency fund calculator makes it simple to set a goal.

Not automating your contributions

If you wonder how in the heck you’re going to come up with a few extra dollars a week to save, that’s okay. Most of us are either in that boat or have been in that boat at some point in our lives. One thing that is ridiculously helpful is automating the process. Let’s say you decide you want to deposit $25 a week into a high-yield savings account. There are a couple of ways to go about it.

Log into your bank account and set up an automatic recurring transfer to move money from your checking account to your savings account once a week (bi-weekly or monthly work, too). Select an amount you’re comfortable with, and you’re good to go!If you’re paid by direct deposit, you can set up the transfer so that a portion of each paycheck goes into checking and a portion is deposited into savings.

You may believe automating won’t help your situation, but here are three reasons it works:

Helps you avoid the temptation to spend that money. It’s a matter of “out of sight, out of mind.”Serves as a reminder of your goal. Let’s say your goal is to have $6,000 in an emergency account. Simply checking your balance each month shows you where you stand.It’s encouraging. If you’ve never been able to save or it’s been a while since you had money in savings, watching your balance grow is a great way to encourage yourself to keep going.

Tip: Take the easy steps to set up an automatic transfer or automatic deposit into savings.

Using your savings account like a checking account

This is an easy trap to fall into. You have a savings account built up, but it’s the end of the month and your TV conks out, or you really want to spend a weekend away with friends. You dip into your savings account for the money you need.

Whether you occasionally find yourself using your savings account like a checking account or it’s a once-in-a-blue-moon issue, it’s something that only you can control. Savings accounts are for more than building an emergency fund. They can also be a great place to save for a new car, dream vacation, or retirement goals (depending on the interest rate the account earns).

Like any goal, only you have the power to make it a reality.

Tip: Experts say we should “set it and forget it.” In other words, once money hits savings, leave it alone until you absolutely must access it.

Not shopping around for the highest rate

Most of us lead busy lives, and the last thing we want to do is shop around for anything. However, one look at the best CD rates or highest savings account rates is enough to illustrate how much more you can earn with one account over the other. Experts tell us we’re leaving too much money on the table.

Thanks to the internet, we now have a fast, easy way to figure out where our money will earn the most interest.

Tip: Take a few minutes to check out the highest rates on certificates of deposit (CDs) before deciding where to park your savings.

Not having a plan

Did you know that Americans spend an average of 1.8 minutes a day on financial planning? Actually, most of us don’t do any financial planning on a daily basis, but when you average it out throughout the year, it amounts to less than two minutes a day.

That’s not to say that anyone needs to spend hours each week planning. However, it is important to at least have a plan. A financial plan is like GPS, guiding you toward where you eventually want to be. Without one, it’s easy to flail around, hoping for the best.

Tip: If you don’t have a monthly budget, there are lots of great budgeting apps that can help you put one together. As you design a plan, consider how much you’ll need to save to realize your goals. After all, it’s your goals that will drive your savings habit.

If you just don’t believe you can come up with extra money to save, there’s no shame in starting out small. It could be as simple as throwing extra change into a jar each evening and depositing it into savings at the end of the week or cutting one streaming service and diverting the money into savings. The first step is to take a step — no matter how small.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has nearly tripled the market.*

They just revealed what they believe are the 10 best stocks for investors to buy right now…

See the 10 stocks

*Stock Advisor returns as of February 6, 2024

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.Dana George 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.

“}]] Read More