Money Management

New appliances can be expensive. Here’s how one writer saved a bundle by changing the look of her refrigerator. 

Of all the homes I’ve owned, it’s easy to remember my favorite. It was outside a tiny village in Michigan, on a lake frequently infiltrated with lily pads. There had been very few updates to the home, but as they say, it “had good bones.” It turned out to be my family’s favorite because it’s where we lived when our boys attended junior high and high school. It’s where we were when two nieces and a nephew came to live with us, and the house was filled with laughter.

The house came with the ugliest refrigerator I had ever laid eyes on. It was avocado green, with ugly scratches from years of use. Worse yet, all the other kitchen appliances were stainless steel, which only made the refrigerator stand out more. When we finally resigned ourselves to buying a new one, the model I wanted was $1,200. That was a lot of money at the time.

I dislike few things in this world more than feeling as though I have no options, so I researched the possibility of giving the fridge a makeover with paint. The big advantage was having time to pad my savings account for a new one.

The operation gets underway

If maintaining our home wasn’t so expensive, I would have probably hired someone to do the job, but I decided to tackle it myself. Truth be told, I was not 100% confident that I could make it work. I have never been particularly artsy, and I’m famous in our family for giving up on painting jobs mid-project.

However, by following these instructions to a tee, I was able to transform our ugly old refrigerator (and spare my personal finances the hit of buying a new one).

Prep work

Empty the appliance (which, for me, meant moving items from the kitchen refrigerator to an even uglier fridge we kept in a storage room).Unplug the appliance. I don’t want to brag, but I can unplug an appliance like a pro.Move the appliance to a well-ventilated space. For the first time, we were grateful for our uninsulated, terribly leaky, always freezing garage.Place a drop cloth under the appliance. This bit was a little tricky as I forgot all about drop cloths until the refrigerator had already been moved.Remove all knobs and handles. This part was so easy, it boosted my confidence.Clean the appliance. All the fingerprints, dirt, and grease that collect on the surface of appliances need to be removed. The easiest way to do that is by wiping them down with a mixture of detergent and hot water. And using a microfiber cloth will ensure no fibers are left behind.Look around for any rust spots. If you find rust, use a paint scraper to loosen any flaking paint.Look for dents and small holes. If you find any, standard auto-body filler is the perfect material to fill those areas. It dries hard and is easy to paint over.Give the appliance time to dry. If you’ve used auto-body filler, give it an hour to dry. While experts say it will dry in 20-25 minutes, it won’t hurt to give it more time.Sand doctored areas. In the event you find rust or filled holes or dents, use a palm sander and 220-grit sandpaper to smooth those areas out.Clean away dust. Use denatured alcohol to wipe away dust.Take one more look. Look the appliance over from top to bottom to ensure there is no dust, dirt, or grease to be found.Cover areas you don’t want painted. Use painter’s tape here. I may have taken more time doing this than just about anything else because I didn’t want the fridge to look as if it had been painted by a monkey.Purchase appliance paint. Appliance paint is made specifically for use on appliances. If you’re unsure of which one to buy, ask a store employee for advice.

The fun part

Slip on eye goggles and a face mask. I did not use goggles or a face mask, which may help explain a thing or two.Prime (maybe). Whether you should prime before painting is a matter of opinion. While some experts recommend brush-on primers like Sherwin Williams Extreme Bond and Insl-X Stix, others say to skip the primer. I did not prime the refrigerator before painting and thought it held up well. According to the website Hunker, appliance paint is designed to paint over factory appliance coating, which means you don’t need primer. But check the instructions on your appliance paint before you begin.Apply the new paint color. Holding the can 12 to 16 inches from the appliance, spray in a steady motion. As you spray, slightly overlap each row of paint. Give the paint a solid 30 minutes to dry, then determine whether it needs another coat. If so, repeat the process.Be patient. Give the paint another 24 hours to dry before removing the tape, reattaching the handles, or using the appliance.

Three quick additional tips:

If you need a primer, make sure it’s heat-resistant, particularly if you’re painting the outside of your microwave.If a drip occurs, allow it to dry and sand it away before touching up the area.Having a drafty garage that was freezing cold in the winter meant the refrigerator had to be painted when the weather (and garage) was warm enough to allow the paint to dry properly.

If you have an appliance (or two) you would like to replace but don’t have the funds in your checking account right now to purchase new models, a paint job may be enough to hold you over until you’re ready to buy.

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Want to reduce your tax bill and save more for retirement? Consider opening a traditional IRA as well as your 401(k). Learn how. 

Want to boost your retirement savings in 2024? Good idea — most Americans don’t have enough saved for retirement. According to research from the Motley Fool, the typical American household has only $87,000 saved for retirement. And Federal Reserve data shows that, as of 2022, only 54.3% of Americans had any money saved in 401(k) plans or other retirement savings accounts.

The good news is: it’s not too late to increase your retirement savings and invest for the future. If you get a 401(k) plan at work, you still have options to save even more for retirement in a traditional IRA. Using a traditional IRA and a 401(k) can help you save more money on taxes while boosting your financial security for your retirement years.

Let’s look at a few reasons why you should consider using a traditional IRA in addition to your 401(k).

Yes, you can put money into both a 401(k) and traditional IRA

Don’t assume that just because you have a 401(k) at work, that means your 401(k) is your only option to save for retirement. Of course, you should definitely put enough money into your 401(k) to get the full employer match (if any) that your company offers. Don’t leave that “free” retirement money on the table.

But depending on your personal finances and income, you might want to open a traditional IRA too. Here are a few reasons to open an IRA, even if you already have a 401(k) at work:

You’re already maxing out your 401(k) and want to save even more money for retirement.You don’t get an employer match in your 401(k), or it takes a few years to be fully vested in the employer contributions in your 401(k).You don’t like the investment options and fees in your 401(k).You want another tax-advantaged retirement account that you fully control, that’s separate from your employer, where you can choose your own brokerage firm.You have a non-working spouse.Your spouse has a job, but doesn’t have a retirement plan.

All of these can be good reasons for putting extra retirement savings into a traditional IRA.

How to save money on taxes with a traditional IRA and 401(k) in 2024

The IRA contribution limits and deduction limits for 2024 have recently increased. According to the IRS website:

The maximum contribution limit for 401(k) plans is $23,000. People aged 50 and over can make catchup contributions of an extra $7,500, for a total of $30,500 in 2024.The maximum annual contribution limit for IRAs (traditional and Roth IRAs combined) is $7,000 for 2024. People aged 50 and over can make IRA catchup contributions of $1,000, for a total of $8,000 in 2024.

However, depending on your tax filing status, there are income limits on who is allowed to put money into a 401(k) and make tax-deductible contributions to a traditional IRA. Let’s look at the 2024 income limits for a few different types of taxpayers who are covered by 401(k)s or other retirement plans at work.

Single filers

If you are single, and covered by a retirement plan at work, and your modified adjusted gross income (AGI) is less than $77,000, you can get a tax deduction on the full amount of your traditional IRA contributions (up to $7,000, or $8,000 if you’re aged 50 or over).

If your modified AGI is between $77,000 and $87,000, you’re in the “phaseout range.” This means you can’t get the full tax deduction, but you can get a partial deduction that phases out to zero for higher incomes. And if your modified AGI is higher than $87,000, you cannot deduct any of the money that you put into your traditional IRA for 2024.

Married filing jointly

If you are married filing jointly, and you are the spouse who is covered by a workplace retirement plan, you can get the full tax deduction for traditional IRA contributions if your modified AGI is less than $123,000.

The IRA deduction phaseout range for a spouse who has a retirement plan at work goes from $123,000 to $143,000. And if your modified AGI is higher than $143,000, you cannot deduct any of your traditional IRA contributions.

If your income is in the phaseout range, you can still get a partial deduction for your traditional IRA contributions, but it’s complicated. You’ll need to do a calculation for this partial IRA deduction, based on your filing status and how much your modified AGI exceeds the lower limit of the phaseout range. Good news, the best tax software should be able to handle this calculation for you!

Even if your income is too high to get a tax deduction on your traditional IRA, you can still put money into the IRA up to the 2024 limits. It can still be worth saving more money for retirement, even if you don’t get a tax break. And nondeductible IRA money will still grow tax free, without having to pay capital gains taxes.

Bottom line: Depending on your income, tax filing status, and overall personal finances, you can put money into a 401(k) at work and contribute tax-deductible money to a traditional IRA. This can be a great tax-planning strategy for 2024, and can help you save aggressively for retirement. Make sure you understand the income limits and rules of modified AGI.

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The median income back in 2018 was $67,900 — but it’s grown since. See how your income stacks up and see how to increase your earnings to grow your wealth. 

The amount of money you earn impacts many aspects of your personal finances. The more you make, the easier it is to live within a budget, cover your expenses, and have money left over for other things.

Sometimes it can be hard to get a good perspective on where you stand in terms of how much you’re making or whether you earn a lot or a little cash. That’s why it can be helpful to know how your earnings compare to what your peers are bringing home.

This is the average income among Americans

According to the Federal Reserve, the median household income in 2021 was $70,300, up 3% from $67,900 in 2021. The mean household income during 2021 was much higher at $141,900 in 2021, up 15% from $123,400 in 2018. Mean income is higher than median income because there are some very high earners that raise the average amount of household income people are bringing in.

The Federal Reserve reported that the income gains since 2018 occurred at all income levels, but those who earned the most experienced the greatest positive change to their earnings (which is not surprising, and which served to increase income inequality during this time).

These median and mean incomes are before taxes are taken out, and stimulus payments families received from the government during the COVID-19 pandemic were potentially captured when people reported their income, but were excluded from the Federal Reserves report.

The income numbers are also a measure of the “usual” or customary income families received, so if some families were unemployed or lost money on investments, they would have reported how much they usually made and not necessarily how much they made in that particular year.

The income increases between 2018 and 2022 are also measured after adjusting for inflation. There were substantial price increases that happened post-pandemic, and without adjusting for inflation, median and mean income went up 20% and 33% respectively. In other words, people made big gains in the amount they were bringing home, but not in their buying power because prices rose a lot too.

So, these numbers should give you a pretty good idea of what households across the country were bringing home in recent years.

How can you make the most of your income

Now, your income may be above or below what your fellow Americans are bringing home. But while income has a big impact on how much money ends up in your checking account, a low income doesn’t mean you’re going to end up broke and a high income doesn’t mean you’ll end up rich.

In fact, plenty of people who earn a lot of money spend it on purchases that don’t end up increasing their net worth in the long run, while many people with limited incomes end up saving diligently and growing rich. A lot depends on what you do with the money you’re earning.

If you want to make the most of your income, you should spend mindfully and prioritize savings. This means making choices about where your dollars should go. You can do that by budgeting, tracking spending, and focusing on spending on things that you truly value while cutting expenses in areas that don’t matter as much to you.

You should also set savings goals that are specific and measurable (such as saving $500 a month for retirement and $50 a month for vacations or whatever amount makes sense for you). You can use online savings calculators from Investor.gov to see how much you need to save each month to hit your targets. Once you have a goal, automate transfers to savings and your brokerage account on payday so you always hit your target.

By taking these steps, you can make the most of the income you have, regardless of how it compares to what your peers are earning.

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It’s a tough time to buy a home due to elevated prices. Will things improve as the year moves on? Read on to find out. 

The start of 2024 is proving to be a difficult time for prospective home buyers. Even though mortgage lenders have been lowering their rates recently, the average rate on a 30-year loan is still 6.66% as of this writing, according to Freddie Mac. That’s considerably higher than the mortgage rates borrowers were looking at just a few years ago.

Compounding the problem is that home prices are high, too. In November 2023, the median home sold for $387,600, according to the National Association of Realtors (NAR). That’s a 4% uptick from a year prior.

If you’re hoping to buy a home in 2024, you may be wondering if prices will come down as the months tick along. And the answer is that home prices could come down. But a lot of that will depend on how expensive mortgage loans are.

Higher borrowing rates are contributing to a lack of inventory

As of late November, there were only 1.13 million housing units available for sale, according to the NAR. That may seem like a lot, but it only represents a 3.5-month supply of homes. It can easily take a six-month supply to meet buyer demand.

Any time there’s a shortage of supply, whether it’s related to things like homes or less significant purchases like gaming systems or sneakers, the cost of the item that’s lacking in supply is likely to rise. That explains why home prices are elevated at a time when borrowing for a home is so expensive.

But until mortgage rates start to come down, home prices are likely to stay roughly where they are. That’s because a lot of people aren’t selling right now to avoid giving up the competitive mortgage rates they locked in a few years ago. And if rates don’t budge much this year, we could get stuck in a holding pattern.

Should you buy a home when prices are high?

Home prices could remain elevated for quite some time. So if you’re looking to buy, you may need to resign yourself to paying more than you would have during a quieter market.

That said, one thing you don’t want to do is take on too much house. Figure out what 30% of your take-home pay amounts to, and make sure your housing expenses won’t exceed that number.

If you bring home $4,000 a month, it means you shouldn’t be spending more than $1,200 on housing all-in. And that $1,200 includes your property taxes and homeowners insurance — not just your mortgage payments.

Now, if you’re willing to buy a fixer-upper, you may be able to get away with spending less on a home. But remember, in exchange for a lower purchase price, you may be looking at spending more on repairs. So keep that in mind as you weigh your options.

All told, mortgage rates are likely to drop to some degree this year if inflation continues to cool and the Federal Reserve cuts interest rates to follow suit. But we don’t know to what extent they’ll drop.

As such, don’t expect a lot of wiggle room with home prices. Instead, do what you can to work around today’s market conditions, and crunch your numbers carefully to make sure you don’t run into issues with affordability.

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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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In 2024, you can contribute up to $23,000 in your 401(k), and more if you’re 50 or over. Here’s how much that could turn into. 

Investing in a 401(k) comes with tax breaks, as you’re allowed to deduct contributions from your taxes in the year you put money into the account. There are limits to how much you can contribute each year, though. In 2024, those limits are increasing slightly compared to 2023.

In the 2024 year, you’re allowed to contribute up to $23,000 if you’re under 50 and can make an additional catch-up contribution worth $7,500 if you are 50 or over. This is a lot of money, but it can be well worth trying to max out your contributions. To understand why, consider how much money you’d end up with in retirement if you contributed the full amount to this investment account that’s permitted in 2023.

Here’s what would happen if you maxed out your 401(k) in 2024

If you max out your 401(k) in 2024, the money you put into your account will begin earning returns from the assets you buy. You’ll keep those returns in your account and reinvest them, so you’ll earn money on the money you got from your investments. This is called compound growth, and it helps you build wealth.

The maximum 401(k) contribution is a lot of money in 2024, so if you manage to hit that target, this year’s contributions alone can make a huge impact on how much money you end up with — especially if you have a lot of years until retirement for compound growth to work for you. The table below shows how much your maxed out contribution alone could end up being worth in 10, 20, and 30 years, assuming you earn a 10% average annual return (in line with the stock market’s performance over the last 50 years).

As you can see, this single year’s contributions could leave you much richer. And in reality, your company might offer a 401(k) match, so you could end up with much more than this. The amount of extra money that could come from your employer matching your contributions would depend on the maximum match you were entitled to, as most employers cap matching contributions at a percentage of your salary.

How to increase your 401(k) contributions

As you can see, a maxed out 401(k) can set you on the path to wealth — especially if you’re young when you put money into this account.

Now, many people can’t afford to put $23,000 into a retirement account each year. But the more you put in, the more compound growth can work for you. So, unless you’re already contributing the full amount you’re allowed, you may want to work on increasing 401(k) contributions in 2024. You can do that by:

Investing any raises you get. If you get a 2% salary increase, devote the entire raise or half of it to your retirement savings.Inching up your contributions. If you’re currently contributing 10% of your income, talk to your company’s human resources department about changing that to 11%. Then, in six months, do that again to contribute 12%. If you make slow changes, you may be able to adjust without really feeling it.Check your budget for areas you can cut spending. If you can eliminate a streaming service or reduce some other expense, devote the extra money to your 401(k).

The closer you can get to contributing the maximum allowable amount, the more money you’ll end up with as a retiree and the more you can enjoy your golden years.

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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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