Fill your new year with a life of adventure and exploration in foreign lands. Ju Yochi / Shutterstock.com
Editor’s Note: This story originally appeared on Live and Invest Overseas. What if you could go anywhere, do anything, and spend your time and your money any way you wanted? As we stand today at the start of shiny New Year 2024, my question is not rhetorical. For, indeed, you could go anywhere, you could do anything, and you could spend your days and invest your capital however strikes…
For anyone on the lookout for a new home, today’s prices are a source of frustration. Find out what it will take for them to become more affordable.
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How 100 people can look at the same sets of numbers and interpret them differently is utterly fascinating. These differing opinions make housing market predictions challenging. For example,
CNBC says it could be up to two years before the average family can afford to buy a home.J.P. Morgan believes it could be up to 3.5 years, for those lucky enough to live in the right areas. That’s because J.P. Morgan analysts believe affordability could take 5.3 years (or more) to be restored in large metro areas.Redfin predicts the U.S. market will enjoy a modest reduction in both interest rates and home prices this year, and that the number of listings will increase.
And so it goes. The answer to the question of when the average family can expect to buy an affordable home varies by source. And maybe they’re all right. Perhaps people in one area of the country will enjoy lower prices before other regions do.
When it comes to making predictions, analysts rely heavily on the same data. While they tend to pinpoint different timeframes, they’re all keeping their eye on the same signs.
Housing prices hinge on these three metrics.
While it may not feel like it, average incomes have been rising since 2019. However, in 2020, the income required to take out a new mortgage on a median-priced house was $49,680, according to CNBC. Today, it’s somewhere between $107,000 and $114,627, depending on the source.
The fact is, the income required to qualify for a mortgage for a median-priced home has more than doubled in three years. If homes are to become more affordable, Americans are going to need higher wages.
In March, it will be two years since the Federal Reserve began to crank up the federal funds rate — the rate at which banks loan money to each other overnight — to slow inflation. While higher rates have worked to curb inflation, it’s a slow process. Economists at Goldman Sachs predicted earlier this week that the Fed will likely begin to lower the federal funds rate in March and make a total of five cuts this year.
Five cuts in 2024 will certainly come as welcome news to potential homebuyers, but lower rates may not be as straightforward as they appear. As rates drop, buyers will swarm the market, and competition will once again heat up prices.
Simply put, there are too few homes on the market for prices to drop in any meaningful way. Baby boomers dedicated to the idea of aging in place aren’t putting their homes up for sale. And younger homeowners are unwilling to trade the historically low interest rates they snagged during the pandemic for a higher rate. It’s a bit of a stalemate.
For home prices to drop, there needs to be competition among home sellers. Instead of one or two area homes for sale, there need to be many. The key to increasing inventory is building. While densely populated metro and urban areas may not have the room to put up more homes, land is plentiful in rural areas. Still, that doesn’t mean that new houses are popping up.
To understand why the U.S. has such a shortage of new housing, we must look back to the housing crash of 2008. Many home builders closed up shop, and tradespeople found other work. Once things stabilized a few years later, plenty of people wanted to buy a new home, but too few were being built to satisfy the need.
The slump we see in building today is a remnant of The Great Recession, made worse by the pandemic and the number of young adults who want to buy a home of their own.
While it would be nice if wages continue to rise or interest rates drop, it won’t be a single factor that makes homes more affordable. Like the game Jenga, it will be a balancing act, with each of these three factors working together.
Whether you’re a homeowner ready to upgrade or a first-time home buyer, be on the lookout for rising incomes, slowly falling mortgage rates, and homes that hit the market with a slightly lower price tag.
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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.Dana George has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group. The Motley Fool has a disclosure policy.
I’ve unlocked the secret to dealing with my children’s desire for toys. Here’s how I have been able to save money by avoiding unnecessary purchases.
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In 2022, consumers in the U.S. spent an estimated $29.2 billion on toys. If my two children had their way, that would have been $39.2 billion. Based on my conservative estimate, they asked for around $10 billion in toys during the year.
Although I never realized it until I was a parent, toys can be found just about everywhere, and almost always at toddler eye level. Even the hardware store has Matchbox cars on sale, not to mention the candy and toys at the grocery store.
Unfortunately, this wise marketing works very well on my kids, and if I gave in every time they requested something, there would be no money left in my bank account. Of course, I tend to say no more than I say yes since I don’t want to end up in credit card debt or have to buy a bigger house just to accommodate my daughter’s doll collection.
The problem is, this used to lead to a lot of protesting and even an occasional tantrum. Since my kids are 4 and almost 2, reasoning with them doesn’t always work to avoid the theatrics, but I have found a simple way to get them to just move on happily instead of fighting for their desired item.
Hopefully, my approach can help other parents deal with this tricky situation as well.
Several months ago, I decided to try a different tactic rather than just saying no when my kids asked for a specific toy. Instead, I now offer to take a picture of the item and add it to their “wish list.”
They get to hold up the toy that has captured their attention, I snap a photo and show it to them, and I tell them that I’m keeping the picture in a special album on my phone. They can look through it and pick a toy when it comes time to buy one as a treat, and I’m able to refer back to the album when holidays and birthdays come around for gift ideas.
Once my kids get to hold the item and take a picture of it, they no longer have a fit when they have to put it back on the shelf — especially since they’re aware there’s a very real chance they may end up getting the item later. The picture-taking serves two purposes — it distracts them as they pose for the shot and look it over, and it helps them to feel like their request has been heard.
The reality is, kids are expensive enough without feeling like you have to give in and buy toys to avoid a meltdown at the end of a busy day. Techniques like this one have made all the difference in helping me avoid unnecessary buys, and you can try them out yourself too.
Hopefully, they will also enable you to get your littles to happily put the toy back on the shelf while making sure you spend meaningfully on toys they want — but only at times that make sense for your family and your budget.
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Is your bank causing you to miss out on hundreds of dollars of interest income? Stop losing money and start growing your savings with a higher APY in 2024.
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What if the CEO of your big bank stepped out of a corporate jet, walked up to you on the street wearing expensive shoes and an immaculately tailored suit, and demanded that you write him a check for hundreds of dollars? Does that sound fair to you? Would it feel good to hand over hundreds of dollars to your bank for nothing? No one would put up with such shabby treatment from their bank, right?
But in a way, that’s exactly what many bank customers are doing by not having a high-yield savings account. If you’re keeping your cash in a bank account that pays near-zero APY, you’re missing out on free money — while your bank profits off of you. By opening a high-yield savings account or putting money into one of the best certificates of deposit (CDs), you could earn hundreds of dollars per year in interest.
Let’s see how you can stop writing imaginary checks to bank CEOs, get a fairer deal from the banking system, and start growing your savings in 2024.
OK fine; this analogy isn’t totally accurate — if you don’t have a high-yield savings account, your bank isn’t exactly taking money out of your pocket. But they’re causing you to miss out on earnings. Instead of losing hundreds of dollars all at once by being forced to write a big check to your bank’s CEO, you’re slowly missing out on hundreds of dollars of interest income over the course of a year (or more).
Not all banks pay the same APY (annual percentage yield) on savings accounts. That’s because banks compete for deposits. Some of the best-known big national banks already have billions and billions of dollars of customer deposits, and they don’t have to try too hard to attract more; that’s why the big banks often pay the lowest APYs on savings accounts.
This competition for deposits is also why you can often find the best high-yield savings accounts at online banks, smaller banks, fintechs, and credit unions. Smaller, scrappier banks sometimes have to try a little harder to get customer deposits, and so they’re willing to sweeten the deal by offering higher APYs. But just because a bank is smaller or online-only, with no brick-and-mortar branches, doesn’t mean it’s a riskier place to put your savings. As long as a bank has FDIC insurance, your deposits are protected in case of bank failure, up to $250,000 per account “ownership category.”
If your bank savings account is still paying you 0.01% APY, or even the national average of 0.47% APY (as of Jan. 16, 2024), it might be time to get a better yield on your savings. Let’s see how much money you can earn by opening a high-yield savings account in 2024.
Low-interest bank accounts could be costing you hundreds of dollars per year in lost income. Let’s see how much a few different amounts of savings would earn after one year in a high-yield savings account or two years in one of the best 2-year CDs, compared to one year in a national average savings account.
The more money you have in savings, the more money you’re missing out on by not putting that cash into a higher-yielding account. If you put your money into one of the best 2-year CDs today, you could lock in a high APY and let your money grow with compound interest for the next two years.
It’s true that not everyone in America has thousands of dollars in savings. In fact, The Ascent’s research found that as of July 2023, the typical American’s savings account balance was only $1,200. But even if you don’t have lots of cash in your savings account, you still deserve to get the best APY possible. You might even discover that earning a higher yield on your savings can motivate you to save more!
Bottom line: Don’t miss out on free money. Don’t let big banks profit off of you when you could be improving your own personal finances. Stop letting your money languish in a near-zero APY bank account. Shifting to a higher-yielding account is an easy way to maximize your cash and help your savings grow. Open a high-yield savings account, or lock in a great APY with the best CD rates in 2024.
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It’s good to begin investing as early as possible. Read on for some steps to take if you’re kicking off your investing career this year.
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Investing money you don’t need on hand for near-term purchases or emergencies is a great way to grow it into a larger sum over time. And if this is the first time you’re gearing up to invest, you’ll want to go about it strategically. Here are some moves worth making.
Maybe you don’t have a specific goal for investing — you simply want more money. Or maybe you want to invest so you’ll have money on hand for retirement.
It’s a good idea to try to figure out what you’re investing for, as that might help you determine the type of account to use. If you’re trying to build a retirement nest egg, for example, then an IRA could be a smart bet. If you want access to your money for any purpose, then you’ll probably want to stick to a taxable brokerage account, which doesn’t restrict you in any way.
Investing in stocks has, historically, been a great way to grow wealth. The market’s average annual return over the past 50 years has been 10%, which means that if you were to invest $10,000 today, in 30 years, it could be worth almost $175,000.
That said, stocks can be very volatile. A stock-heavy portfolio might gain and lose value quickly following different economic and market events. If that’s not something you think you can handle, then you may not want to invest all of your assets in stocks.
Now, it’s worth noting that if you’re trying to save for retirement and that milestone is many years away, going heavy on stocks is recommended. But if you personally can’t handle that, then a mix of stocks and bonds may be a better choice for you, even if it means that you won’t snag as high as return in your portfolio all in.
The purpose of investing is to grow your money and give yourself the peace of mind that you’re working toward your big goals. If a portfolio that’s filled with stocks causes you to lose sleep, then it may not be worth the financial upside.
It’s important to build an investment portfolio that consists of different stocks across a range of industries. If you invest all or most of your money in a single sector of the market and there’s a shake-up there, you could end up seeing serious losses in your portfolio.
For example, let’s say that to start off, you buy five different tech stocks for your portfolio, investing a total of $2,000. If, in a few months, the tech sector gets slammed, your $2,000 portfolio might lose 25% of its value, bringing you down to $1,500.
To be fair, that type of loss is only a loss on screen. You don’t officially lose money as an investor until you sell off assets at a price that’s lower than what you paid for them. However, seeing your portfolio lose 25% of its value can be upsetting and unsettling.
That’s why it’s a good idea to invest across a range of industries. In our example, if you bought five different stocks and only one was in a tech company, you might see your portfolio’s value go from $2,000 to $1,900 in the event of a tech sector meltdown. That’s not nearly as harsh a blow.
While you could always diversify your holdings by buying different types of stocks, one easy way to go about the process is to invest in broad market ETFs, or exchange-traded funds. If you buy shares of an S&P 500 ETF, for example, you’re putting your money into the 500 largest publicly traded companies.
Investing could do a lot of great things for your finances. Make these moves when you’re new to it to start off on the right foot.
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Dollar General marks discontinued items at a penny. See how to score items for almost free and improve your personal finances by paying rock-bottom prices.
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Finding an unbelievable bargain is rare in today’s world when inflation has sent prices skyrocketing. But there are still some amazing deals to be had — especially if you know where to look.
Specifically, if you get lucky, it’s possible to buy items at Dollar General for just a single penny. Here’s how this can happen and what you should do to maximize the chances of getting these bank-account-friendly items.
Penny items at Dollar General become available by chance because of the way the store treats items that are supposed to be pulled from the shelves.
Typically, items are supposed to be marked down to as low as 90% off. Then, once they are discontinued and intended to be pulled from the store shelves, the prices are reduced to just $0.01. This is supposed to be a signal that the item is not to be sold but is instead to be removed from the inventory.
Often, though, those items are not actually removed from the store shelves right away. So they’re available in the store and priced at a penny. If you can find them and take them up to the cash register, cashiers may or may not sell them to you. While the official policy is that they aren’t supposed to be sold, people are commonly able to buy them — thus walking away with a big score.
If you want to keep more money in your savings by buying items for a penny, you’ll need to be smart about how you do it.
First, you should know you can’t ask at the store what items are on sale for $0.01, nor can you find them listed in any sales flyers since they are only for sale at this price by mistake. There are a bunch of online lists people publish, though, so you can get an idea of the items you’re looking for.
You’ll also want to go shopping on Tuesdays or Wednesdays, since the items are usually marked down after a Tuesday clearance event. While you may be able to find them later in the week, there’s a good chance they’ll be gone since people will either have bought them or they’ll have been cleared from store shelves by workers.
You should bring as many of the items as you want to buy up to the register when you find a penny item, as the sales staff may go and clear any remaining ones from the shelf once you’ve brought the item up and they see it’s priced so low. You can also check the price on the Dollar General app if you download it on your phone, to make sure they’ll really ring up for a penny before you buy them.
You may not always find the items on the list since the selection varies by store. But it can be fun to hunt for them, and you can save a lot of money if you get lucky and find penny items you want for sale.
This credit card is not just good – it’s so exceptional that our experts use it personally. This card features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
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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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