Money Management

There are some techniques for saving money that I tried and that just didn’t work. Find out why, and learn what I did instead. [[{“value”:”

Spending less money and saving more of it is important and is a good way to get ahead financially. But, not every technique for slashing spending is going to be effective for every person.

I tried three money-saving moves that were utter failures in my life. Here’s what they were.

1. Cutting back on dining out

One technique I tried in the past to reduce spending was to dine out less. Like many people, I enjoy going to restaurants, and I also tend to like trying out fancier places with higher prices. After looking over my credit card statements, I found I was spending quite a bit on this habit and thought I could reduce my spending if I cut back.

Unfortunately, this didn’t really work out very well for me. I found myself making excuses for why I had to try out that new restaurant in my area or “forgetting” we had no food at home and takeout was a necessity to feed my kids. Ultimately, it was a constant battle against my desires and I often found myself losing it.

Since I didn’t want to constantly feel like I was involved in a financial struggle, I gave up. I realized that eating out was important to me and that it made sense to make cuts elsewhere instead of on restaurant expenditures since trying to cut spending in this category was making me miserable.

I’m not alone in my love of dining out, with the Bureau of Labor Statistics reporting that around 44% of all food spending occurs on food away from home. And, honestly, that’s not necessarily a terrible thing. Eating away is a time saver, it allows you to try new things, and it can foster more social connections. If you love dining out, you don’t have to make this something you cut from your budget (unless you’re really out of control and spending so much you can’t possibly put any money into savings). Instead, if this is important to you, look for other things to cut so you can keep your restaurant spending at a level that makes you happy.

2. Extreme couponing

Extreme couponing is another technique I tried that I’ve since given up on. I was able to save a lot of money on stuff by using coupons, but it was rarely stuff we wanted or needed. For example, I could often get name-brand toothpaste for free, but we prefer to use a certain kind of organic toothpaste that never goes on sale. Or I could get discounts on processed foods, but not on the kinds of local fruits and veggies from the farmer’s market that we try to eat most of the time.

I wasn’t willing to compromise my health or my tastes just to get stuff for free by couponing, so I gave up the habit. Instead, I shifted to meal planning based on things I like that are on sale and buying the things I like in bulk when they are on sale anyway. I can still keep my grocery costs down this way, but I do it by buying what I want instead of what manufacturers are trying to entice me to purchase.

3. DIYing home improvements

Finally, every time I’ve tried to DIY home improvements, it has frankly been a disaster. From blotchy paint to spending hours trying to figure out how to hook up a new faucet, the savings have rarely been worth it since the jobs took too much time and didn’t turn out as well as they would have if a professional took care of it.

Ultimately, the reality is, these money-saving techniques just weren’t the right options for me given my desire and talents. And that’s OK. I found other ways to cut spending that make sense for me because I focused on what I value and what gives me the most bang for my buck. And you should do the same.

Take the time to think about what’s really important to you. This should include things like saving for big purchases and retirement — but it may also include your shoe collection or your expensive truck or your restaurant spending. Budget around the things that will bring you joy and eliminate the stuff that doesn’t. If you are splurging on the things you love, sacrificing elsewhere won’t really feel like a sacrifice, and you’ll be far more likely to stick to your personal financial plan.

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Is the Child Tax Credit still on the table? Read on to find out. [[{“value”:”

At this point of the year, a lot of people are starting to buckle down and focus on taxes. And it’s definitely a good idea to start gathering your paperwork, whether it’s 1099 forms from your brokerage account or tax forms from your employer.

Now, you may be aware that when filing your 2023 taxes, there are different credits you can look into. One such credit is the Child Tax Credit.

You may have heard that the Child Tax Credit was a pandemic-era benefit that’s now long gone. But that’s actually far from the truth.

The Child Tax Credit is still in play

In 2021, lawmakers passed a massive stimulus package to help Americans cope with the financial fallout of the pandemic. One part of that package included a boosted Child Tax Credit.

Not only did the maximum value of the Child Tax Credit get a lift for the 2021 tax year, but the credit became fully refundable. This meant that someone with no tax liability could still receive the full value of the credit from the IRS.

The boosted Child Tax Credit went away in 2022. But the pre-pandemic version of the credit still exists. So if you’re eligible for it, it’s something you’ll want to claim on your upcoming tax return.

To qualify for the Child Tax Credit, you need to have a dependent child under age 17. And if you have multiple children in that category, you can claim the credit on a per-child basis.

However, there are income limits associated with the credit. If you’re single, the credit starts to phase out with a modified adjusted gross income (MAGI) over $200,000. If you’re married and filing a joint tax return, the phase-out starts at a MAGI of $400,000.

For the 2023 tax year (which, remember, is the year you’re filing a tax return for now), the Child Tax Credit is worth up to $2,000 per child, of which $1,600 may be refundable. Do note that for the 2024 tax year, the refundable portion of the credit will rise to $1,700. But you’re not filing your 2024 taxes until next year, so for now, keep that $1,600 limit in mind.

Will the Child Tax Credit get a boost?

Some policymakers have been fighting for an enhanced version of the Child Tax Credit since 2022. And recently, lawmakers introduced a proposal that would make the credit more refundable.

As mentioned, only $1,600 of the credit is refundable for the 2023 tax year, and only $1,700 is refundable for 2024. Under this new proposal, the credit’s refundable portion would increase as follows:

$1,800 for tax year 2023$1,900 in tax year 2024$2,000 in tax year 2025

The above-mentioned proposal has yet to pass as of this writing. But even if it doesn’t, the credit still offers a lot of value. So it pays to see if you’re eligible.

And if you’re not sure, consult a tax professional. It may be worth it to pay a modest fee if it results in your ability to pocket up to $2,000 per child from the IRS at tax time this year, and in any future year when the Child Tax Credit remains on the table.

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Many parents wish they could turn back the clock and fix one big financial mistake with their kids. Find out what it is, so you can avoid it. [[{“value”:”

U.S. parents recently revealed one of their biggest regrets in a study by Empower. More than half (57%) said they regretted not having more money conversations with their children as they grew up. And 60% said that if they could turn back the clock, they would’ve made teaching financial literacy a priority.

When you have kids, you do your best to set them up for success. Talking to them about money is a huge part of that. Here’s how you can ensure your kids understand the ins and outs of personal finance.

Start the conversation while they’re young

You don’t need to wait long to talk to your kids about money. Experts widely agree that you can start doing this when kids are anywhere from five to seven years old. Some even recommend doing it with children as young as three.

With young kids, start with the basics. Explain how money has value, we earn it by working, and we use it to buy things. A good way to make this interesting is to involve your children in basic financial decisions. For example, at the grocery store, you could ask them to pick out a snack and give them a spending limit, like $5 or $10.

The Consumer Financial Protection Bureau (CFPB) has published a great guide to age-appropriate financial topics. You can find it on the CFPB’s Money As You Grow page.

Let them manage their own money

Kids can start receiving an allowance as early as four or five years old. This is an important part of teaching them to manage money and spend it responsibly. You can explain to them that the money is theirs to spend how they want, but if they spend it all, they won’t be able to buy anything else until they get their next allowance.

Make sure to lay out rules for how your kids will earn their allowance, to give them an idea of what earning money is like. You could pay them a certain amount every week if they behave well.

Or, their allowance could be tied to chores, and the amount they earn is tied to the chores they do. My parents did that with me, assigning a certain value to each chore. It worked well, although I did learn how to game the system. I found out which chores were most profitable, based on the time they took and how much they paid. Then I pretty much only did those and ignored the ones I didn’t enjoy, like washing the dishes.

Introduce more advanced topics as they get older

As your kids reach their preteen and teen years, they’ll be ready for more advanced topics. Here are some of the most important things to talk about at this stage:

How people keep their money safe by putting it in bank accounts: This is also an opportunity for them to open their first checking and savings accounts.The importance of saving a portion of their earnings: Explain the reasons why they should do this, including to be prepared for emergencies and to save up for future purchases.How borrowing money works: By the time your kids are teenagers, you can teach them about loans, credit cards, and the cost of borrowing money. You could also set them up as an authorized user on your credit card. They can learn about managing credit and start building a credit score this way.How investing works: Teach them that investing is a way to grow your money over time. You could also show them your investment accounts and even help them start investing. Many stock brokers offer custodial accounts that a parent can set up for a minor.

Remember that they’re always learning from you

The money messages we get from our parents stick with us. It’s important to remember that your kids aren’t just absorbing these messages when you sit down to teach them about finances. They’re always learning from how you talk about money and your own financial behaviors.

For example, if you frequently make expensive purchases on credit cards and talk about paying them off over time, your kids will internalize that. When they’re adults, they could get into the habit of carrying credit card debt. On the other hand, if you explain to them that credit card debt is expensive and they should always pay off their cards in full, they’re more likely to understand how important that is.

Whether your kids have a positive or negative relationship with money will largely depend on you. What you don’t want to do is treat money like a taboo subject and avoid it. Parents who do this often regret it later. If you help your kids learn about money and build good financial habits, they’ll be better off for it.

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Sometimes, you can’t turn to your auto insurer when damage to your vehicle occurs. Read on to learn more about. [[{“value”:”

Sometimes, you can land in a situation where you’re on the hook for a costly car repair bill — even if your car isn’t old and you didn’t do anything reckless to cause it to get damaged. Such was something I experienced not so long ago.

My car ended up needing a repair that cost over $500. And even though I had auto insurance at the time (and of course still have it now), my insurer didn’t pick up so much as a dollar of the tab. But there’s a big reason why.

When the cost of your repair is less than your deductible

The repair my car wound up needing was a windshield replacement. An errant rock flew into my windshield during a routine drive on the highway, and it must’ve hit at just the right angle to crack my windshield beyond repair.

Now if you have a newer vehicle, you should know that the cost of replacing your windshield could be more expensive than expected. Kelley Blue Book says that thanks to advanced technology in newer vehicles, a new windshield can cost upward of $1,000. However, if you have an older car, you can expect to pay something in the range of $300 to $600 for a typical vehicle windshield.

My repair fell into the top end of that range, costing over $500 but not quite $600. But it didn’t really matter — either way, my auto insurance company wasn’t paying the bill. And the reason is that I didn’t ask it to.

You may be thinking “Um, what’s wrong with you? Why wouldn’t you file a claim?” But the reason boils down to the fact that my auto insurance policy comes with a $750 deductible. Since that was more than the cost of my repair, filing a claim wouldn’t have helped me financially at all.

Since that incident, I’ve thought about trying to lower my deductible. But going that route would mean paying a higher insurance premium.

Since your premium is something you pay off the bat and your deductible only comes into play when you have to file a claim, I prefer to take the chance on a higher deductible. But in this situation, it cost me to some degree.

That said, I don’t even know if I would’ve filed a claim against my insurance had my deductible been, say, $500. I didn’t spend that much more to replace my windshield, and filing a claim to get reimbursed $50 or so might’ve sent my premium rates rising the following year.

Always have savings on hand

Auto insurance can serve as a means of financial protection when you own a vehicle. But don’t just fall back on your insurance. Rather, always make a point to keep some money in your savings account in case you end up having to shell out money to meet a car insurance deductible — or in case you’re looking at a repair that’s less costly than what your deductible entails.

Of course, I’m grateful that my car didn’t sustain more damage than a cracked windshield. The process of getting that fixed couldn’t have been easier — a company pulled into my driveway and repaired my car right there so I didn’t even have to leave my street. I’m also grateful that I had money in my emergency fund I could dip into — because really, nobody wants to go into debt over an errant rock.

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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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