Money Management

Looking at a higher paycheck this January? Read on to see how to put it to good use. 

Getting a raise at work certainly isn’t a given. But if you’re starting the year with higher pay, you have a prime opportunity to put that money to good use.

Your first inclination may be to spend your raise since, well, you work hard for it and deserve to enjoy that boost to your paycheck. But if you’re still paying off holiday purchases, your best bet really is to use that money to chip away at that debt.

Don’t let holiday debt linger

It’s easy enough to rack up a small balance on a credit card during a time like the holidays. Between gifts, travel, and other expenses, your regular paycheck may not be able to cover everything.

The problem with credit card debt, though, is that even a small amount could cost you in the form of accrued interest. A $1,000 balance on a card with a 27% interest rate will cost you around $152 in interest if it takes a year to pay off.

That’s money that could go into your savings account instead. Heck, it’s money you could even use to treat yourself to a concert or a nice dinner — so why let it go to your credit card company?

What it pays to do if you have holiday debt is set up a monthly automatic transfer to your savings that equals the amount of your raise. Then, use all of that money to pay into your credit card balance until it’s gone.

Also tackle those “buy now, pay later” plans

The nice thing about “buy now, pay later” plans, or BNPL plans, is that if you keep up with your installment payments on schedule, you can avoid paying interest and fees on that debt. But still, whenever you’re on the hook for one of these plans, there’s always a chance of falling behind and getting stuck with added costs.

As such, if you owe money on a BNPL plan, take the same approach as you would a lingering credit card balance — use the extra money in your paychecks to pay off your debt ahead of schedule, if possible. That way, you won’t have to worry about being able to make future payments.

This past holiday season, BNPL plan usage reached an all-time high, according to Adobe Analytics. But another thing to keep in mind about these plans is that just as falling behind on credit card payments could damage your credit score, so too could the same consequence ensue if you fail to make a BNPL payment when you’re supposed to. So the sooner you can tackle your remaining balance under one of these agreements, the better.

Extra money in your paycheck is great to have. And it’s hard not to spend that money on things you enjoy. But if you owe money in any form as a result of the recent holiday season, then your best bet is to really work on shedding that debt as quickly as you can. Once you do that, if you’re all set with emergency savings, you can start spending your raise on the things you love.

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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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Want to replenish your emergency savings fund in 2024? Start by saving money on three monthly bills — here’s how. 

In the past two years of high inflation and “revenge spending,” many Americans have depleted their savings. Blowing through savings sometimes happens because of unemployment or unexpected emergency expenses. But often it happens because of lots of smaller monthly bills that keep going up. Want to save more money in 2024? Chances are, you can boost your savings by cracking down on your monthly bills.

According to The Ascent’s research, the typical American has a savings account balance of $1,200. Let’s say that you’re a “typical” American, with $1,200 of emergency savings. Let’s set a goal to double your emergency savings in 2024 — a 100% increase. By saving an extra $100 a month, you’ll have an extra $1,200 in your savings account by the end of the year.

Here are a few ideas for how you can replenish your savings by cutting your spending on three monthly bills.

1. Switch home internet service (save $30-$50 per month)

High-speed home internet service is a must-have for most Americans in 2024, but that doesn’t mean you have to pay high prices for it. If your internet service provider (ISP) has been jacking up the prices in recent years, it might be time to shop around for new home internet service.

Costs of home internet vary widely depending on where you live, what kind of internet service you have, and how fast your internet speed is. For example, I currently pay $142 per month for cable internet, and I’m perfectly happy with it. But some new fiber internet providers recently started offering service in my area, and one of them is offering much faster internet speeds (1 gigabyte) for only $75 per month! I could save $67 per month by switching!

Not everyone can save this much by switching internet providers. You might not have much cheaper options where you live. You could also try calling your current provider and asking if it’ll give you a retention discount to keep you as a customer. Home internet service is one of the bills that you can negotiate. What if you could save $50 a month, or even $30 per month, by switching or negotiating? Saving $30 per month on home internet would save you $360 in a year.

2. Switch mobile phone service (save $45-$100 per month)

Are you paying way too much for mobile phone service? According to a 2023 survey from WhistleOut, the average American spends $160 per month on their cellphone bill. Many people have signed up for unlimited data on their cellphone plan, but end up using wifi most of the time. This means that they’re paying for a lot of data that they don’t use. For example, the survey found that 72% of Americans use 15GB of cellular data or less per month.

If you want to save more money in 2024, consider switching to a cheaper cellphone plan with less data. Check your phone’s data usage to see how often you’re actually using that cellular data; if you spend a lot of time using your phone while at home, at work, or in public places with free wifi, you might need less data than you think.

And if you want to keep your unlimited data plan, you can still save big money on cell service: Mint Mobile (owned by beloved actor Ryan Reynolds) offers unlimited data for just $30 per month (with an introductory offer of $15 per month for three months). For example, I currently pay $75 per month for cellphone service, so if I switched to Mint Mobile’s $30 unlimited plan, I would save $45 per month (for $540 per year).

Cellphone service is essential for everyday life, but you don’t need to pay 1990s prices for it. Shop around for a cheaper plan — or call your provider and ask if it can give you a better deal.

3. Change streaming subscriptions to watch ads (save $6-$42 per month)

Streaming video services like Netflix, Hulu, and Disney+ have recently been raising their prices for premium ad-free subscriptions. But they also have started to offer lower-cost subscriptions that show ads. If you’re feeling the pain of streaming price hikes, you don’t have to cancel your subscriptions — you can sign up to watch ads (and save money).

Here’s how much you’d save on each of these popular streaming services by switching from the highest-price ad-free plan to the lowest-price ad-supported plan:

If you switched to ad-free subscriptions for all four of these streaming services, you’d save a total of $42 per month ($504 per year). Your exact savings will depend on how many services you subscribe to. There also might be options to save money by bundling multiple services together, such as the Disney Bundle of Hulu Live TV, Disney+, and ESPN+.

Bottom line: Monthly bills can sneak up on you. When prices of home internet, mobile phone service, and streaming video subscriptions go up, before you know it, way too much money is flying out of your bank account. With just a few changes to your monthly bills, you can easily save over $100 per month, or $1,200 in a year — and double the typical American savings account balance in 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 positions in and recommends Netflix. The Motley Fool has a disclosure policy.

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Many gyms are now requiring monthly fees to be paid via bank transfer. Here’s how one gym-goer responded. 

My go-to thought when making a new purchase is how I can best maximize my credit card rewards. So I already had my go-to rewards credit card picked out when I started shopping local gyms.

Unfortunately, my smaller town doesn’t have a lot of options. And the options it does have all have one major drawback: They require ACH transfers for monthly fees.

As soon as I realized I’d be stuck setting up transfers if I wanted to join a gym, I knew what I had to do: I opened a new checking account. Here’s why.

I never give out information for my main account

Any other considerations aside, I never, ever give the information for my primary bank accounts to any merchant. And you shouldn’t either.

Your banking information is only as secure as the least secure person who has it.

Each time you give your account information to a merchant, you are drastically increasing the chances that the information will be compromised during a data breach.

If you pay even passing attention to the headlines, you know that data breaches are increasingly common, impacting millions of people every year — and they happen to companies with far greater security than your local gym.

It’s not worth the risk when you can simply open a new account where the risk has less potential impact on your financial life. The bank account I opened to pay my gym fees isn’t even with the same bank that manages my primary accounts. So, hopefully, any potential problems can’t find their way back to the place where my money actually lives.

The new account bonus will pay my gym fees

Being rewards-minded, of course, another big reason I wanted to open a new bank account was for the bonus. Similar to the welcome bonuses offered by credit cards, you can get new account bonuses for checking and savings accounts.

Sure, you’ll need to do a bit more than just open an account to earn the bonus. This usually requires setting up direct deposit or making a set number of debit card purchases within a certain period.

In my case, I only needed to receive $500 in direct deposits to earn a $200 bonus on my checking account. That requires about five minutes worth of work on my end to set up; not a bad return on my time. The $500 will probably find its way back to my regular bank account, but the $200 bonus will pay my gym fees for the year.

How I picked a new bank account

I had four main criteria I used to figure out what bank account to open:

I wanted a checking account with no monthly fees. I won’t be keeping a ton of money in this account, so I didn’t need any hoops to jump through to get a monthly fee waived.I wanted a good welcome bonus that I could earn with minimal time/money.I wanted the bank to have a local branch with good customer service. (Gyms are notorious for funny business around cancellations.)I wanted to be able to open the account online. (Just because the bank has a local branch doesn’t mean I want to put on Outside Pants to open an account.)

When I found a bank and account that matched my needs, I signed up. Opening an account online is quick and easy in most cases, and it took mere minutes for me to open and fund my new account.

Does everyone who signs up for a new gym membership need a new bank account? Probably not. If you’re lucky enough to have a gym that lets you pay by credit card, I highly suggest doing that. The right cash back card could net you 5% back on your gym fees. But if you absolutely have to pay by ACH transfer, I would definitely recommend opening a new account.

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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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Want a new job this year? Read on for a good way to approach your search. 

The start of a new year is a good time to tackle different personal finance resolutions. And one of yours may be to escape a job you can’t stand in favor of a new one.

A new job could do a lot of good things for you. It could lead to a boost in pay that helps you manage your bills more easily and pay off lingering credit card debt. It could also allow for a better work-life balance.

But if your approach to finding a new job in 2024 is to rage apply, that may not be your best bet. In fact, you could end up in an equally unfavorable situation if you go this route.

What is rage applying?

Rage applying refers to sending out tons of resumes due to being unhappy with your current job. Rage applicants often fire off resumes without really paying attention to the details of the jobs they’re applying for. The goal, rather, is to escape a bad work situation as quickly as possible.

Recent data from Betterment at Work found that 24% of workers have considered rage applying to jobs over the past 12 months. So if you opt to rage apply yourself, you won’t be alone. But rage applying isn’t necessarily your best path toward a better job.

A more ideal approach

The problem with rage applying to jobs is that you may end up getting stuck in a new work situation that’s just as lousy as your current one — only the difference is, you can’t jump ship right away because that might look bad from a work history standpoint. That’s why rage applying isn’t necessarily the approach you want to take when you’re unhappy at work.

A better bet? First, try to narrow down why you’re unhappy. The reason may be obvious — an overbearing boss, obnoxious colleagues, or a workload that’s just not manageable for one person.

But there may be an underlying reason why you’re disgruntled, such as if you feel your contributions aren’t valued or you think you’re being pigeonholed into a role with no upward mobility. Either way, it’s important to pinpoint your main pain points and then aim for a new job where those factors won’t be an issue.

Next, figure out your salary requirements. You may be willing to take a pay cut to escape a bad job. But too much of a pay cut could mean you’re no longer able to pay your rent or mortgage, so you’ll need to strike a balance.

From there, try to figure out what it is you want to do, and then look for jobs that are specific to the tasks you want to be doing professionally. If you want a creative role with upward mobility, applying at advertising agencies or marketing firms could be a good bet.

Don’t forget to utilize resources

Sometimes, resources outside of our own knowledge base can be of assistance when in the midst of a serious job search. For example, you may want to talk to a career counselor if you’re not sure what sort of job would be best for you. You can also talk to recruiters, explain what you’re looking for, and see what ideas they have. Their job is to help you find a job, so they’ll likely be motivated to help.

Once you do start getting interviews, use sites like Glassdoor to read company reviews. It’s important to get a sense of what it’s like to work at a given company so you don’t wind up unhappy at a job once again.

If you’re somehow able to discreetly talk to current employees directly, even better. You may have that opportunity if, say, a good friend of yours knows someone trustworthy at a company where you have an application pending.

It’s easy to see why you may be inclined to rage apply to jobs when you can’t wait to bust out of your current work situation. But doing so might lead to an equally bad job, which isn’t helpful at all. Instead, think about what you need and want out of a job, and then take steps to try to find the right fit.

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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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