Money Management

Better service and nicer food are great, but hardly worth an upgrade. Keep reading for the feature at the heart of the matter. 

Yes, there are a ton of great perks that come with upgrading to business class. You get airport lounge access, priority service, and better onboard dining. (The improved dining alone is almost enough to justify the upgrade, in this food-lovers opinion.)

However, none of that is really worth paying an eye-boggling $4,000 for a seat on the same plane with $500 economy seats. (That’s eight times more expensive, for those wondering about the math.)

No, at the end of the day, deciding whether it’s worth the cost to fly business class will come down to one simple question.

How much do you value sleeping on the plane?

Arriving at your destination well-rested and ready to go can be a powerful tool against jet lag. It can also allow you to jump right into your trip, be it heading directly into a business meeting or making an early museum reservation.

There are those lucky folks who can sleep anywhere, at any time, and wake up refreshed. I am not one of those people. If you are also not one of those people, then sleeping on a plane can be very difficult. The noises, the people, the butt-falling-asleep-from-sitting-for-five-hours. There is zero chance I will get any kind of quality sleep in an economy seat on a long-haul flight.

Business class changes all that.

Business class seats turn into beds (it’s like magic)

On long-haul flights, the core difference between a business class seat and a coach seat is just that: the seat. Business class seats have significantly more room than other classes. They have so much room, most have full-on beds.

The best business class seats can fold flat into a modest-sized single bed, offering room for passengers to stretch out for a proper sleep. Pair that with privacy panels, linens, and actual pillows, and you’re talking about an experience nowhere near that of economy.

Even I can sleep in business class, and that’s saying a lot.

The value of sleep

If you’re the person snoring in economy before the wheels are up, then a business class seat probably isn’t worth the cost. You won the sleep lottery and have my eternal envy.

If you, like me, can’t sleep sitting up in a tiny seat in the middle of a five-seat row…the cost-value equation changes.

I don’t get a lot of vacation time, so I value it very highly. For me, being able to actually sleep on the plane and start my vacation as soon as I land — that’s a cost that buys me very valuable time. It’s worth it to me to fly business class whenever it’s an option.

Cutting the cost of business class

Here’s where I say that as much as I value sleep and vacations, that still doesn’t mean I spend $3,000 a pop on business class tickets. I fly business class whenever possible, but it’s possible because of travel rewards.

Every airline I’ve seen has a frequent flyer program where you can earn and redeem miles for flights. The majority of them also have some sort of airline credit card that will earn those miles on every card purchase.

Even better, most of those frequent flyer programs are also partnered with at least one of these four credit card points programs:

American Express Membership RewardsCapital One Venture RewardsChase Ultimate RewardsCiti ThankYou Rewards

If you have an eligible travel rewards credit card, you can earn points that can then be turned into airline miles. Those miles can then be used to book business class award flights.

How many miles do you need?

The exact number of miles you need to get a free business class flight will vary by airline, the time of year, and even by demand for that specific flight. (I’ve seen business class awards from the U.S. to Europe for as low as 60,000 miles and for over 300,000 miles — all from the same airline.)

You’ll need to research the specific flights you want to take to determine how many miles you’ll need. Looking at flexible date calendars during booking can help you find the lowest-cost flights.

It’s not entirely free

Keep in mind that you’ll still need to pay some money for your award flights. There are various taxes and fees on every flight. Amounts also vary based on the flight, but these are typically low ($50 at the most).

The exception here is the UK. There are extra taxes and fees on award tickets to — and sometimes through — the UK that can get downright excessive ($700 or more per ticket). If you’re trying to get to the UK using miles, consider flying into a European city and then traveling to your destination. Travel within Europe is very affordable.

Business class travel can absolutely be worth the upgrade, especially when it helps you avoid losing a vacation day to jet lag. But you don’t need to fork over the thousands for a seat when you can use credit card rewards instead. Sleeping in luxury at 50,000 feet is well worth 60,000 miles and a few dollars in taxes.

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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.JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. American Express is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Brittney Myers has positions in American Express. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.

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Buying a home isn’t a requirement for, well, anyone. Keep reading to learn why it might be better to keep renting this year. 

I haven’t been shy about my intention or preparations to get on the property ladder again in 2024 — but I don’t expect the process to be as smooth or easy as it might have been before COVID-19 and the resulting shake-up in the housing market.

If you’re wondering whether you should buy a home in 2024, here are a few reasons why it might be better to keep renting this year.

1. Mortgage rates are still high — but could fall

While mortgage rates have slipped down a little since a high of 7.79% in late October 2023, we are still a far cry from the rates around 3% we saw in 2021. As of this writing, the average rate for a 30-year fixed mortgage loan is 6.6%, according to Freddie Mac. And this rate will only serve to make buying a house even more expensive.

As an example, here’s a breakdown of your monthly mortgage costs for principal, interest, property taxes, and insurance (PITI), assuming a purchase price of $250,000, a down payment of $25,000, $3,000 in property taxes per year, and $100 per month for homeowners insurance:

This is just an example, and I recommend plugging your own numbers into a mortgage calculator. But it illustrates a stark point — buying in 2024 will mean paying a lot more for a mortgage than you might’ve just a few short years ago.

Some of the biggest names in the industry are predicting cheaper days ahead, however. For example, the Mortgage Bankers Association is predicting rates below 6% in 2025 — so it might be better to wait to buy if you can.

2. The housing supply is insufficient to meet demand

To add insult to injury, the housing supply is also presenting a problem for those of us hoping to buy. Thanks to those higher rates, current homeowners are loath to put their homes on the market and buy something new at a rate that could be double the one they have now.

The most recent data from NAR found that as of December 2023, there was only a 3.2 months’ supply of homes on the market — and to satisfy buyer demand, that figure would need to be enough homes for four to six months. Since supply is lacking, buying in 2024 would mean facing more competition than you might if you waited until listings were more plentiful.

3. Owning costs more than renting

Once we get past the initial cost of buying a house, the expenses of homeownership just keep coming. Expect to pry open your wallet more often if you own — maintenance problems that were formerly the purview of your landlord (such as a wasp infestation or a malfunctioning water heater) will now be your responsibility. Even the regular work of maintaining a house, such as lawn care and gutter cleaning, takes time — or money, if you’d rather outsource them (no shame).

Your property taxes will likely climb over time, and homeowners insurance premiums likely will too, thanks to climate change and inflation. The Ascent found that in 2019, homeowners paid an average of $8,609 more than renters did — about $717 more per month. That extra cost went toward maintenance, taxes, and utility bills. A jump in utility costs is to be expected if you’re going from a rental apartment to a larger single-family house.

Ready to take on all these extra costs? If not, renting is a better choice in 2024.

4. Renting gives you more flexibility

Ultimately, renting a home, rather than owning one, means flexibility. I made the mistake of buying a house in my 20s, long before I had any idea of where I might like to settle long term, and also long before starting a career that gives me the ability to work from anywhere.

When I was laid off from my job and ended the marriage I was in not long after, I was put in the terrible position of being unable to afford my house — and stuck with it until I could get my mortgage lender to agree to a short sale. It took more than three years before the house sold and I was finally out from under this financial commitment, and by then I was living in another state and just a few months away from moving to yet another one.

If you’re not settled in your job or your life, or if you’re like I was, and in a career that requires you to move if you want any chance of advancing, don’t buy a house this year. Don’t buy one until you’ve got your financial feet under you and can confidently say you’re willing to stay put for at least five years (I’ve never even lived in the same city for that long as an adult — let alone the same house). It is much, much easier and less expensive to break a lease than to sell a house.

Rest assured, renting doesn’t make you any less of a “real adult.” If anything, honestly assessing your financial situation and goals and making the best decision for you makes you even more responsible than someone who rushes into homeownership because they assume it’s the logical “next step.”

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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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A 401(k) plan isn’t your only option for building a retirement nest egg. Read on to see where else you may want to put your money. 

If you’re eager to save for retirement this year and your employer offers a 401(k) plan, you may decide to sign up. The nice thing about 401(k)s is that contributions are taken as payroll deductions, so there’s little you need to do to get your account regularly funded. And also, you get tax benefits for funding a 401(k).

But what if your employer doesn’t offer a 401(k)? If you work for a small business, an in-house retirement plan may not be available to you, since they can be very expensive to administer to just a small number of employees.

The good news, though, is that you have plenty of options for saving for retirement this year outside of a 401(k). Here are a few you can look at.

1. An IRA

The only thing you need to do to be able to contribute to an IRA is earn money. So whether you work for a company that doesn’t have a 401(k) or you’re a self-employed gig worker, you can contribute up to $7,000 of your earnings to an IRA this year if you’re under 50, or up to $8,000 if you’re 50 or older.

If you put your money into a traditional IRA, your contributions up to the aforementioned limits will shield that much income from taxes. In other words, if you contribute $3,000, the IRS won’t tax $3,000 of your 2024 income. If you decide to save in a Roth IRA, your contributions won’t go in on a pre-tax basis, but your investment gains and withdrawals will be tax free.

2. An HSA

A health savings account, or HSA, is technically an account you can use at any time to cover qualified medical expenses. So it can be argued that it is not a retirement account per se.

However, because HSA funds can be carried forward for as long as you want, you can treat your HSA as a retirement account. And it pays to do so, since healthcare is likely to be a large expense in retirement. This way, you’ll have a separate pile of funds earmarked for that purpose.

HSA eligibility this year hinges on having a health plan with an individual deductible of $1,600 or more, or a family deductible of $3,200 or more. Your out-of-pocket maximum also needs to be capped at $8,050 if you have self-only coverage or $16,100 for family coverage.

If you’re able to make HSA contributions this year, they max out at $3,850 for self-only coverage if you’re under 55 or $4,850 for self-only coverage if you’re 55 or older. If you have family coverage, the limit is $7,750 if you’re under 55 or $8,750 if you’re 55 or older.

3. A taxable brokerage account

A taxable brokerage account won’t give you any tax breaks on your retirement savings. What it will give you, however, is flexibility.

With an IRA or 401(k), taking a withdrawal before age 59 1/2 could result in a 10% penalty unless you qualify for an exception. And there can be steep penalties for taking a non-medical HSA withdrawal.

A taxable brokerage account gives you access to your money at any time. It’s actually a good idea to put at least some money into one of these accounts in case you end up in a position where you can retire early. And also, because there are no tax breaks associated with regular brokerage accounts, there’s no annual contribution limit to worry about. You can invest as much money as you want.

A 401(k) isn’t your only option for saving for retirement this year. Consider these other accounts if a 401(k) isn’t available to you.

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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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