Money Management

Have a big financial goal to meet this year? Read on for a great strategy to help you achieve it. [[{“value”:”

We’re only a few weeks into 2024, which means that hopefully, a lot of people are still making plans to uphold their financial resolutions. Recent research from The Ascent found that building an emergency fund was one big goal Americans were aspiring to in 2024. But the idea of doing so can be pretty daunting.

See, if your goal is to save up a fully loaded emergency fund, you’ll need enough money to, at a minimum, pay for three full months of essential bills. Even if your expenses are on the lower side, that may be a tall order.

Let’s say you’re starting with a $0 balance in your savings account, and your typical essential spending amounts to $2,000 a month. That still means you need a whopping $6,000 to be covered for emergencies on a basic level. And going from no savings to $6,000 worth isn’t exactly a piece of cake.

RELATED: Emergency Fund Calculator

That’s why it’s important to approach a goal like this realistically. Rather than focus on a total goal or yearly goal, you may be better off breaking your savings goal down into a weekly one.

Slow and steady sets the stage for success

In the aforementioned research study, almost 30% of respondents were not confident in their ability to keep their New Year’s resolutions. And part of that might boil down to their approach.

Setting a really large financial goal (whether it’s to build an emergency fund or something else) can be overwhelming. And that’s why a week-by-week approach may be better.

Let’s imagine you want to save $6,000 in 2024. That’s a lot of money. But instead of fixating on a number as large as $6,000, you might feel better working toward $115. That’s the weekly sum you need to sock away to amass $6,000 in a year. And that’s a much less scary number.

You might manage to save an extra $115 a week by cutting a few expenses, like skipping takeout meals and brown-bagging your lunch daily instead of buying it at an eatery close to your office. Or you might manage to save $115 a week by working a side hustle.

And in the latter situation, it’s not inconceivable that you might make $15 to $20 an hour doing whatever it is you opt to do. So in that case, you’re looking at roughly six or seven hours a week of side hustling. Doesn’t that have a much better ring to it than working an extra 24 to 28 hours a month?

You need small wins to celebrate

Not only might setting a weekly savings goal help you approach your New Year’s resolution with more confidence, but this way, you’re giving yourself an opportunity to pat yourself on the back regularly.

Going back to our example, you could decide to do something special for yourself every week you meet your $115 savings goal, like treating yourself to a soothing bath or indulging in reruns of your favorite sitcom. You may even decide to blast a note on your social media page saying you met your weekly savings goal, or text some friends and have them cheer you on.

There’s nothing wrong with setting lofty savings goals if that method works for you. But aiming for a large number might cause you to get overwhelmed and give up. So instead of taking that risk, consider breaking a big financial goal of yours down into a weekly one. You may find that doing so makes it easier to achieve.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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You probably pay a lot for auto insurance. But are you getting your money’s worth? Read on to find out why that may not be the case. [[{“value”:”

No matter what car insurance company you’re using this year, you’re probably paying a fair amount of money in exchange for that coverage. The average annual cost of auto insurance in 2023 was $3,017, according to research from The Ascent. Your costs, however, will vary depending on factors such as:

Your driving historyThe type of vehicle you driveThe state you reside in

That said, when it comes to auto insurance, you do want to make sure you’re getting good value for your money. But your car insurance may be failing you this year if it won’t do these important things.

1. It won’t offer rental car reimbursement when your car is out of commission

When your car is damaged, it can take many weeks for an auto body shop to get it back into drivable condition. And during that time, you’re going to need a replacement vehicle, most likely in the form of a rental car.

Unfortunately, having that expense covered by your auto insurer isn’t a given. If your policy doesn’t include that coverage, you may want to shop around for a new one. If you’re ever in an accident or situation where your car is damaged, the cost of paying for a rental car for what could be a month or longer could be enormous.

2. It won’t tow your car to the shop when it breaks down

You’re driving along the highway when suddenly your car starts making noises. You pull over to check it out, and lo and behold, your car won’t start up again when you turn on the engine.

A situation like that is frightening and frustrating enough in its own right. But what’s even worse is when your auto insurance company won’t pay to have your vehicle towed to the nearest auto repair shop or mechanic.

Now that said, some insurers offer roadside assistance as an add-on to different policies. But if your insurer doesn’t offer that as an affordable option, you may want to look elsewhere.

3. It won’t replace your cracked windshield

Some car insurance policies cover windshield damage — but that’s not always the case. If you have comprehensive coverage, you can generally expect this to be something your insurer pays for. However, you might end up footing the bill yourself anyway.

The reason? In the realm of car-related issues, windshield replacement tends to be a fairly simple and inexpensive fix — so much so that its cost may be lower than the cost of your auto insurance deductible. And when you’re paying less than your deductible, there’s no point in filing an insurance claim and risking an increase to your premium as a result.

No matter what you pay for auto insurance, it’s probably a pretty large sum. So if you feel as if you’re not getting good value in exchange, don’t hesitate to shop around this year and see if there’s a better insurance deal to be had. Remember, while you may not be able to lower your car insurance premiums, you may be able to find a policy that offers better coverage at the same price point. And that, too, would be a win.

Our best car insurance companies for 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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Money in savings means having the ability to cover a simple emergency. But read on to find out if you’re falling victim to one of these errors. [[{“value”:”

There are a lot of things a person might feel guilty about. For example, if you routinely flip the bird to slow drivers, maybe it’s time to rethink your behavior. If you’re deliberately unkind to waitstaff, you should ask yourself why.

However, if you feel guilty because you don’t have as much money in a savings account as you believe you should or you’re not doing things “just right,” it’s time to give yourself a break. All human beings make mistakes; there’s no shame in that. The goal is to learn what we can from those times and grow from them.

1. Not shopping around for an account

One thing some of us have found shocking (even after decades of banking) is how much interest rates vary. For example, credit unions are member-owned, so they often offer a higher interest rate than traditional banks do. And since online banks have become an option, they nearly always provide higher rates. That’s because online banks don’t have brick-and-mortar buildings or expensive overhead that traditional banks deal with. In other words, they can pay more.

If you’re the kind of customer who’s faithful to their financial institution no matter how much it costs, that may be admirable, but if it means earning less than you could, it’s a lot like shooting yourself in the financial foot.

Shopping around is the only way to know if you’re leaving money on the table. Take a look at online banks, credit unions, and even other traditional banks.

2. Agreeing to pay a monthly fee

With so many savings accounts from which to choose, it’s hard to imagine why anyone would agree to continue to pay a monthly maintenance fee. According to Experian, maintenance fees are more common among financial institutions that still have brick-and-mortar locations. And while the monthly fee varies by bank, it usually ranges from $5 to $8 for a traditional savings account.

Paying a monthly fee only makes sense when you have no other options.

3. Dipping in

It’s easy to open a savings account. It’s more difficult to leave that account alone to grow when temptation strikes. Before withdrawing money from savings, ask yourself if the money is a necessity or a desire. For example, if there’s a sale on your favorite tennis shoes but you already have plenty of shoes, the decision should be pretty straightforward. However, if your child wants to play on a travel soccer team and you don’t have the money in your checking account to pay the entrance fee, the decision is a bit tougher.

If you must withdraw money from your savings account, make a plan to repay yourself. Here’s a sample of quick ways you can save money and repay your account:

Cut your auto insurance bill: You can save hundreds of dollars a year by changing auto insurance companies. You can save even more by bundling that coverage with another policy, such as homeowners or renters insurance.Shave your cellphone bill: If you’re not using all the bells and whistles you’re paying for (like cell capability for your smartwatch, international calling, or specific apps), switch to a more affordable plan.Look into a level payment plan: If you’re stretching your budget each month when utility bills come due, call to find out if your utility companies offer a year-round level payment plan. Doing so can save you a bundle of money in months when utility usage is high.Have an online garage sale: Gone are the days when you had to carry everything to your garage, post signs, and allow strangers to sort through your belongings. Look around your house to determine what you would be willing to let go — for a price. Then, advertise those items on a neighborhood site like Nextdoor.com or on Facebook Marketplace. You’d be surprised how many people are looking for an old mirror or kid’s playhouse.

4. Failing to take advantage of high-yield savings accounts

One of the easiest ways to earn money today is to take advantage of a high-yield savings account. If your money is parked in a standard savings account, ask yourself why. It’s just as safe in a high-yield account and nearly as easy to get to if an emergency arises (by law, you can withdraw from many high-yield accounts up to six times per month without paying a fee).

The difference is this: Rather than earning less than 1% interest, your money can earn an APY of 5% or more in one of the best high-yield savings accounts.

5. Not signing up for automatic transfers

Signing up to have a specific amount of money automatically deposited into savings from a payroll check or checking account is a simple process. Why bother with an auto-deposit? CBS News explains it this way: “Automated savings help overcome the inertia of manual transfers.”

It’s easy to postpone the task when you’re making transfers manually. But when you sign up for auto-savings, you don’t have to give it a second thought.

Finally, don’t fall into the trap of believing you must save large amounts of money at a time. Even if you can only put a few dollars away each week, you’re moving in the right direction.

These savings accounts are FDIC insured and could earn you 11x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you 11x the national average savings account rate. Click here to uncover the best-in-class accounts that landed a spot on our short list of the best savings accounts for 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.

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Thinking of doing a post-holiday balance transfer? Find out why that may not be the best idea. [[{“value”:”

If you’re juggling credit card debt, you’re not alone. As of the third quarter of 2023, Americans owed $995 billion on their credit cards, says TransUnion.

It’s one thing to be managing a single credit card balance. But if you owe money on multiple cards, that may be even more stressful. And it may be reason enough to look into a balance transfer credit card, where you move your various balances onto a single credit card.

There are a couple of benefits to going this route. First, you might snag a 0% introductory offer that gives you a reprieve from accruing additional interest on your balance for a period. Secondly, you may be less likely to get hit with late payment fees if you only have to remember to pay a single bill every month.

But while a balance transfer could be a good option for some borrowers, that may not hold true for everyone. Here are a few reasons you may want to pass on a balance transfer in January.

1. Your credit score recently took a dive

Maybe you added a lot to your debt pile during the 2023 holidays, and your credit score is now in the dumps. Or maybe you fell behind on bills last year due to lingering inflation and your credit score reflects that at present.

Either way, the lower your credit score, the less attractive a balance transfer offer you might be looking at. Also, you may not even be able to qualify for one if your credit isn’t in good shape.

Ultimately, each credit card issuer can decide if your score is high enough to qualify for a balance transfer. But generally, if your credit score isn’t at least in the mid-600 range, you can expect to have some difficulty.

2. Your only available offers come with a shorter introductory period

Some balance transfers give you a 0% interest rate on your debt for a period of 18 months or longer. That gives you a decent chunk of time to get your debt paid off before that intro period ends.

But you may want to pass on a shorter introductory offer. If you only get, say, 12 months to pay off your balance, that may not be enough time to get it whittled down to $0. And once your introductory period expires on a balance transfer offer, the interest rate on your remaining debt could skyrocket.

3. You think it’ll take years to pay your debt off

It’s one thing to owe $1,000 or so on some credit cards you’re looking to pay off quickly. But if you owe, say, $5,000 or more, then a personal loan could be a better move for consolidating your debt.

At that point, with a balance transfer, your debt is likely to linger beyond your card’s introductory period, leaving you to potentially rack up loads of credit card interest. With a personal loan, you get the benefit of a fixed interest rate. And while you generally won’t find a personal loan with a limited 0% period, all told, the interest you pay on a personal loan has the potential to be a lot less than the interest you might pay on a credit card — even one where no interest accrues for a period.

There’s nothing wrong with looking into a balance transfer if you’re struggling to keep up with your credit card debt. But consider carefully whether doing one is the right way to get ahead of your debt. You may find that there’s a more suitable alternative.

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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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You may be sitting on more equity now than in the past. But should you tap it? Read on to find out. [[{“value”:”

If you need money, whether it’s to start a business, renovate, or buy furniture, you have different borrowing options you can look at. You could take out a personal loan, which lets you borrow money for any purpose. Or, you could look at borrowing against your home equity.

Your home equity represents the difference between your home’s market value and your mortgage balance. If you own a home that could sell today for $400,000 with a $250,000 mortgage balance, you’ve got $150,000 in equity. And you can borrow against it in the form of a home equity loan or line of credit (HELOC).

But is borrowing against your home equity a good idea today? Here’s why it is — and it isn’t.

You may have more equity now than before

During the third quarter of 2023, the average U.S. homeowner gained about $20,000 in home equity compared to a year prior, according to CoreLogic. So you may have more options for borrowing against your home equity than you did in the past.

That said, now’s not really a great time to be borrowing money in general. This holds true whether you take out a personal loan, auto loan, or home equity loan.

In 2022 and 2023, the Federal Reserve raised its benchmark interest rate numerous times to slow the pace of inflation. The Fed’s efforts did indeed work, and inflation isn’t as rampant now as it was a couple of years ago.

However, borrowing costs are now up across the board in the wake of the Fed’s actions. So even though a home equity loan is often considered a relatively affordable way to borrow money, right now, because all borrowing is expensive, you may find that’s not the case.

What’s more, you could take out a HELOC, which is more flexible than a home equity loan in that you get a line of credit you can tap (until it’s maxed out) over a period of multiple years. With a home equity loan, you commit to borrowing a lump sum of money at once.

However, the interest rate on HELOCs is generally variable, which means your monthly payments can be quite unpredictable. With a home equity loan, you lock in the same payments until that debt is paid off. And because of the Fed’s rate hikes, HELOC borrowing is starting off expensive.

Borrowing against your home could be more affordable later this year

Since the Fed has made good progress in its fight against inflation, there’s talk of the central bank cutting interest rates this year. If that happens, you may find that borrowing against your home equity becomes more affordable. So it could be a good idea to sit tight if you’re able to wait to sign a loan. In fact, if you lock in a home equity loan now, you might lose out big time if borrowing rates drop several months down the line.

Now, you could make the case that it’s less risky to take out a HELOC because rates are likely to drop this year, not rise, which means your HELOC is less likely to get more expensive in the near term. But again, any type of variable-rate debt carries risk, and you don’t want to end up in a situation where you can’t keep up with your payments. So all told, you may want to favor a home equity loan over a HELOC.

Remember, you might pay off that line of credit over many years. And it’s hard enough to predict what interest rates will look like in five or 10 months, let alone five or 10 years.

Right now, borrowing conditions aren’t so favorable for consumers. But things could change later this year. So while the start of 2024 isn’t the best time to borrow against your home, later on in 2024, a home equity loan could make more sense.

Our picks for the best personal loans

Our team of independent experts pored over the fine print to find the select personal loans that offer competitive rates and low fees. Get started by reviewing our picks for the best personal loans.

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 selling one-ounce gold bars on its website. Get more details on how it works and if buying gold at Costco is a good idea. [[{“value”:”

Costco offers a fairly diverse product lineup. It has electronics, including TVs, laptops, and tablets. Kirkland clothing. The classic hot dog and soda combo for just $1.50. And all the way on the other end of the pricing spectrum, it has solid gold bars. They’re popular, too, as it sold over $100 million worth in its last fiscal quarter.

They’re only available on Costco.com, and you need to be a Costco member to buy them. Costco’s generous return policy doesn’t apply — all gold sales are final. If you’re thinking about buying gold at Costco, here’s what you need to know first.

Costco is a reputable place to buy gold

If you’re sure you want to buy physical gold, you can get a good deal on it at Costco. The gold bars sell out fast, because the prices are hard to beat. You also get the peace of mind that you’re buying from a reputable vendor.

Many vendors charge a hefty gold premium. That’s the markup between the price of a gold product and the current spot price of gold. It’s not recommended to pay a markup of more than 5% to 8%, according to Michael White, spokesman for the U.S. Mint.

Like all gold products, Costco’s gold bars fluctuate in price. But it consistently maintains a low gold premium. Previous prices have been around $2,000 for one ounce of gold with a markup of about 2.5%. Most people won’t find a better price for gold than what Costco charges.

Decide if physical gold is right for you

You can buy gold at Costco at a reasonable price, but should you? There are a few common reasons that people decide to purchase gold:

As an investmentAs a store of valueIn case of a doomsday scenario

For investing, you’re probably better off having your money in the stock market. From 1971 to 2022, U.S. stocks had an average annual return of 10.2%, according to Statista. Gold delivered an average of 7.8% over the same time period. You can make money by investing in gold, but over the long haul, investing in stocks will likely be better from a personal finance perspective.

Also, keep in mind that it takes time to buy and sell physical gold, and you’ll lose money to fees on both ends of the transaction. It’s much easier to buy and sell stocks, and all the most popular online stock brokers don’t charge commissions.

That doesn’t mean gold has no place in your portfolio. There’s nothing wrong with having a mix of assets. But you don’t need to buy physical gold. There are exchange-traded funds (ETFs) that invest in gold for you. This is much more convenient than physical gold, since you need a safe place to store that.

As far as the other reasons to buy gold, it works well as a store of value. And it might come in handy during a societal collapse — although I’d probably start prepping with some canned food before spending thousands on gold.

How to buy gold at Costco

Here’s how to buy gold at Costco:

Go to Costco.com and log in to your account. If you don’t have one, you’ll need to buy either a Gold Star or Executive membership.Search for gold bars. Costco offers several different one-ounce gold bar options.Add up to two (the limit) to your cart and go through the checkout process.

Costco sells out and restocks these often. So if you don’t have any luck the first time around, try again later.

If you have an Executive membership, you won’t earn the 2% reward on your gold purchase. Unfortunately, gold bars aren’t eligible. You can, however, pay with a rewards credit card and earn cash back or points that way.

One last thing to remember is that your signature is required upon delivery. Costco definitely isn’t letting delivery drivers leave these on your porch. Keep an eye on the tracking information, and make sure you’re home on the scheduled delivery date.

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

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