Money Management

Buyers will have their choice of new EVs this year. Keep reading for three that might be worth the wait. 

This year might be a good time to buy an electric vehicle if you’ve been sitting on the fence about it. The government has made it easier to claim a federal tax credit — up to $7,500 — for EVs in 2024 by receiving the credit immediately when you purchase at a dealership, as opposed to receiving it when you file your taxes.

And if free money isn’t an enticing enough reason to buy an EV, there are also lots of new models hitting the showrooms this year, making it all the more tempting. Here are three stunners you don’t want to miss.

1. Acura ZDX

Price: $60,000 (estimated)

Acura is jumping into the EV waters this year with an entirely new model called the ZDX. Car enthusiasts may be scratching their heads since Acura is resurrecting the name it used for a short-lived hatchback between 2010 and 2013.

Of course, the old model wasn’t an EV, and Acura surely hopes the latest ZDX is far more popular than its predecessor. All ZDX models will have a 102-kWh battery on board, with the base A-Spec version using it to power a single motor with 340 horses. The upgraded Type S boosts that power to an impressive 500 horsepower.

The ZDX will have a range of about 325 miles for the single motor and about 288 miles for the high-performance Type S. And thanks to a DC fast-charging system, the ZDX can recharge to a range of about 81 miles in just 10 minutes. Look for the ZDX early this year.

2. Cadillac Escalade IQ

Price: $130,000 (estimated)

The electrified version of the Cadillac Escalade shares one significant characteristic with its gas-powered counterpart: It’s out of reach for most buyers. Cadillac is likely more than OK with this fact, considering the company is looking to bring prestige back to its brand.

As you might expect, a mammoth EV needs a similarly-sized motor to get it moving, which is why Cadillac taps dual motors generating up to 750 horsepower and 785 lb.-ft. of torque. Cadillac estimates the battery range will be an impressive 450 miles.

The premium interior won’t disappoint with optional executive rear seating, massaging seats, hands-free driver assistance, and front screens totaling 55 inches stretching across the entire dashboard. Cadillac says the all-electric Escalade IQ will be available in late 2024.

3. Volvo EX30

Price: $34,950

While some automakers are experimenting with how large their EVs can be, Volvo moved in a decidedly opposite direction with EX30. The all-electric crossover is one of the company’s smallest vehicles, but don’t assume Volvo skimped on the details.

The twin motor version of the EX30 packs 422 horsepower into the little SUV’s frame, propelling it from 0 to 60 mph in just 3.5 seconds. That’s far more than most people will need to haul groceries back to the apartment, but it’s nice to know you have it if you need it. The base model’s single motor comes with a still-respectable 268 horsepower.

The EX30 will go an estimated 275 miles on a charge, can go from 10% to 80% battery life in about 26 minutes at a DC fast-charging station, and comes with a 12.3-inch center console display. Deliveries are expected to start this summer.

One thing to consider before buying an EV

While you might be able to tap the federal tax credit to lower the price tag of an EV this year, the one thing that likely won’t be cheaper is your car insurance.

Insurance prices have spiked over the past few years, and car insurance has seen some of the biggest increases, with premiums up 19% over the past year alone.

And electric vehicle insurance is some of the priciest. The higher price tags of most EVs, along with expensive batteries and a lack of trained EV technicians, means that it generally costs more to repair an electric vehicle than gas-powered ones.

So, if you choose to go electric this year, make sure to compare quotes from several car insurance companies. And if you end up buying the Escalade IQ, maybe we can carpool. I usually work from home, but I’d trade my home office for that premium executive rear seating any day.

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.
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Want to supercharge your retirement savings in 2024? Put money into a Roth IRA and your 401(k). See if you qualify for tax-free benefits of a Roth IRA. 

If you want to save extra money for retirement, opening a Roth IRA can be a good idea. And the good news is: you don’t have to choose between a Roth IRA and a 401(k) — you can use both. Even if you already contribute to a 401(k) at work, you can get tax-free investment growth (and tax-free retirement income) from a Roth IRA too.

However, there are limits. Your income needs to be below a certain level to qualify for a Roth IRA if you already have a 401(k) or other employer retirement plan.

Let’s look at a few reasons why you should use a Roth IRA on top of your 401(k), and who’s allowed to use this retirement savings strategy.

Who can contribute money to a Roth IRA and 401(k)

If you have a 401(k) at work, and especially if you get an employer match for some of your contributions, you should definitely use that 401(k). Get the full employer match. And if you’re a high earner in a higher tax bracket, you might consider maxing out your 401(k) to get the biggest tax deduction from your retirement savings.

But don’t assume that your 401(k) is the end of your retirement planning. Depending on your income and filing status, you can put extra retirement savings into a Roth IRA. And the Roth IRA has some special tax perks that can make it a good fit for your personal finances and long-term investment goals.

Here are a few situations where opening a Roth IRA can be a good choice, even if you already have a 401(k):

You’re maxing out your 401(k) and want to save extra money for retirementYour employer doesn’t offer a 401(k) match, or you’re not fully vested in your employer contributions — this could make your 401(k) less appealing as a retirement savings optionYour 401(k) doesn’t have good investment options, or charges excessive fees — with a Roth IRA, you can control the investments and choose the brokerageYou want an extra retirement savings account that’s not connected to your employerYou are married (filing jointly) to a spouse who doesn’t have a job, or whose job doesn’t offer a retirement plan

How to qualify for a Roth IRA if you already have a 401(k)

The Roth IRA offers some special tax advantages, like tax-free growth and tax-free income in retirement. Because of these tax perks, the IRS doesn’t let some higher earners open a Roth IRA. Your income needs to be below certain thresholds to qualify for an IRA.

Make sure you understand the new 401(k) and IRA contribution limits for 2024. According to the IRS website:

401(k) plans have a maximum contribution limit of $23,000 for 2024. If you’re age 50 or over, you can make additional catch-up contributions of up to $7,500 to your 401(k).IRAs (traditional IRAs and Roth IRAs combined) have a maximum annual contribution limit of $7,000 for 2024. If you’re 50 or older, you can make an extra contribution of up to $1,000 in 2024. This $7,000/$8,000 limit includes all contributions to IRAs — Roth and traditional. For example, you could put half that $7,000 limit into a Roth, and half into a traditional IRA.

But depending on your income and filing status, you might not be able to use a Roth IRA. Here are the updated IRS rules for 2024 on who can get a Roth IRA, for a couple filing statuses.

Single filers

If you are single, and your modified adjusted gross income (AGI) is less than $146,000, you can put money into a Roth IRA, up to the full contribution limit for 2024 ($7,000, or $8,000 if you’re age 50 or over). If your modified AGI is in the “phaseout range” between $146,000 and $161,000, you can make a partial contribution to a Roth IRA. And if your modified AGI is higher than $161,000, you cannot contribute to a Roth IRA for 2024.

Married filing jointly

If you are married filing jointly, you can contribute the full amount to a Roth IRA for 2024 if your modified AGI is less than $230,000. If your modified AGI reaches the “phaseout range” of $230,000-$240,000, you can make a partial contribution to a Roth IRA. And if your modified AGI is larger than $240,000, you cannot contribute to a Roth IRA for 2024.

As a married couple, you can both contribute to your own separate Roth IRAs if your income qualifies. For example, a married couple filing jointly who are ages 44 and 45, with a modified AGI of $200,000 would be able to put a total of $14,000 into Roth IRAs in 2024 ($7,000 for each spouse).

What happens if your modified AGI is in the phaseout range? This means that you can put some money into a Roth IRA for 2024, but not the full amount of your maximum $7,000 (or $8,000) limit. The phaseout calculations are a little complicated; the higher your modified AGI, the less you can put into a Roth. Fortunately, you don’t have to go it alone: the best tax software should be able to tell you if you’re allowed to contribute to a Roth IRA.

Bottom line: Putting money into a Roth IRA and your 401(k) can be a great strategy to super-charge your retirement savings. Unless you have a really high income, you probably qualify to put money into a Roth IRA for 2024.

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Have holiday gifts you don’t want? Read on to see how to put them to good use. 

At this point, the holidays are in a lot of people’s rearview mirrors. But there may be one remnant of the holidays you still have to face: gifts. Or, more specifically, the unwanted gifts you received that are now taking up precious real estate in your closets.

It can be frustrating to be the recipient of items you really have no use for — especially if you’re short in the savings department and a pile of money could work wonders for your personal finances. Recent SecureSave data finds that 63% of Americans are not equipped to manage an unplanned $500 expense. If you’re in that boat, getting even $60 or $80 for all of your unwanted holiday gifts could pad your savings account in a meaningful way.

The good news, though, is that you have different options for unloading your unwanted gifts and converting them to cash. Here are a few to consider.

1. Sell them online

Larger items, like a coat or bulky sweater, aren’t so conducive to being sold online because the cost to ship them might be substantial, and that could eat into your profits. But if you have smaller items like electronics that are easy and cost-effective to ship, consider advertising on sites like eBay, Craigslist, and Facebook Marketplace to see if you can find a buyer.

Before you do, though, it’s always worth posting the items you have for sale on your own social media profile and asking your contacts to help circulate that information. If someone local wants to buy an item you received, you can potentially meet them at a public place and do a handoff rather than pay even a small shipping fee.

2. Sell them in person

Sites like Facebook Marketplace can also be used to facilitate the sale of items you don’t want to ship. Your town social media page might also allow you to advertise items you’re hoping to sell locally.

That said, be careful when arranging to meet someone you don’t know to sell an unwanted item. Your best bet may be to meet at a public location like a Starbucks or even a supermarket where there are bound to be people around.

Another thing you can do is see if there are any upcoming town-wide yard sales happening in your area. If you know someone participating, you can ask them to try to sell your unwanted holiday items for you — though in that case, the nice thing to do would be to share your proceeds in some way.

3. Convert store credit to cash

Maybe you’re sitting on holiday presents that came with a gift receipt. In that case, you can’t bring them back to the store for cash. Usually, the best you can get is a store credit equal to the purchase price. But you can then convert that store credit to cash.

Let’s say you received a handbag from a local business that wasn’t your taste, and returning it gives you a $55 credit to that store. What you can then do is advertise that $55 credit on your social media page, or your town’s page, and try selling it to a buyer for $45. Someone who shops at that store regularly might be happy to buy your credit from you at a discount.

There’s no need to let unwanted holiday gifts take up space in your home when you could really use money instead. So it pays to do what you can to convert those items to cash — even if it’s just a modest amount.

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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 positions in and recommends Starbucks. The Motley Fool has a disclosure policy.

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Managing money shouldn’t take a ton of time. Find out how you can simplify your finances this year in a few steps. 

Some people try to avoid thinking about money at all costs, which isn’t good. Surprising as it may be, it’s also possible to have the opposite problem. You can spend too much time on personal finance, to the point where it has a negative impact on your life.

Maybe you have a complicated web of bank accounts, credit cards, and investment accounts to manage. Or you’re always looking for ways to optimize your finances and squeeze out another dollar of interest here, and a rewards point there. It feels like you’re doing the right thing, but having overly complicated finances actually holds you back.

For one, it can be stressful to stay on top of so many accounts. It’s also time-consuming. In fact, Americans who engage in financial planning regularly spend an average of 54 minutes per day on it, according to research by The Motley Fool Ascent.

If you simplify your finances, you could only need an hour per month, not per day. Here’s what you can do to manage money better and take back your time.

1. Use fewer accounts

This is something I’m working on this year, so I understand exactly how easy it is to get bogged down with too many accounts. You open new credit cards because they’re offering big sign-up bonuses. You add new checking and savings accounts because of bonus offers or higher APYs.

But each new account means another statement you need to review every month. With credit cards, it also means another bill to pay, more rewards to manage, and so on.

Go through all your accounts and see which ones you use the most. Consider closing any bank accounts and credit cards that you don’t use regularly. If you want to simplify as much as possible, trim it down to:

One checking accountOne high-yield savings accountOne or two quality credit cards

With investment accounts, it depends on your situation and the options you have available. A 401(k) is a smart choice, if your employer offers this. You may want to save more for retirement with individual retirement accounts (IRAs) or Roth IRAs. If you want to invest outside your retirement accounts, you can do so with a brokerage account.

Once again, keep it as simple as possible. It’s fine to have a 401(k), IRA, Roth IRA, and a brokerage account. But there’s no need to have accounts with four separate stock brokers.

2. Automate everything

Once you know which accounts you’ll use, it’s time to make everything automatic. That includes saving money, paying your bills, and investing.

Start by deciding how much you want to save and invest every month. Make sure to choose amounts you can afford. After you’ve done that, here’s how to automate your money management:

Have your paychecks direct deposited to your checking account.Save automatically. Create an automatic transfer for the amount you want to save from your checking account to your savings account.Set up automatic investments through your retirement/investment accounts.Set up automatic payments on your bills. Use your credit card as the payment method if it’s accepted, and use your checking account if it isn’t.Auto-pay your credit card with your checking account. Make sure to set it up to pay off the entire statement balance each month, so you’re not charged any interest.

Do that, and you won’t need to make all your bill payments manually anymore. You also won’t have to worry about missing a payment and getting charged a late fee.

When you’ve automated everything, it significantly reduces how much time you spend on your finances. All you need to do is check in on occasion to make sure everything is going according to plan.

3. Stick to passive investments

Some investors like to have full control of their portfolios. They pick every stock, and maybe even dip into more advanced strategies, such as options trading. The hope is that by managing every investment, they’ll have above-average returns. Or better yet, get filthy rich.

But it’s hard to beat the market. The S&P 500, an index often used to measure the market’s performance, posted a 24.23% return last year. An analysis of eight hedge funds found that only one did better than the S&P 500. And those hedge funds, most of which don’t beat the market, are run by professionals who devote their careers to investing.

For most people, devoting lots of time to an investment portfolio isn’t worth it. Instead, go with passive investments that you can just add money to every month. Here are a couple of options:

Index funds: These aim to follow the performance of a specific market index. You could invest in an S&P 500 index fund or a total stock market index fund. Your portfolio’s performance would be in line with the performance of the U.S. stock market as a whole.Target-date funds: These are investment funds set up for a specific retirement year. For example, if you want to retire in 2060, you could invest in a 2060 target-date fund.

Spending a ton of time on your finances doesn’t necessarily mean you’ll get better results. When you have everything set up well, you can take a hands-off approach and devote more time to other areas of your life.

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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 Target. The Motley Fool has a disclosure policy.

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Opening an IRA in 2024 could be a smart financial choice. But read on for key questions you’ll want to ask before opening a brokerage account and investing. 

An IRA is a tax-advantaged retirement account. You can invest in it and deduct your contributions. You can then allow the money to grow tax-free until you need it in your golden years.

IRAs are great because you don’t need an employer to offer one to you, like you do with a 401(k). You can open one easily with just about any brokerage firm. But should you? Is opening an IRA a good move for your personal finances in 2024? Ask yourself these questions to decide.

Are you eligible to make deductible contributions?

One of the big benefits of contributing to an IRA is that you may be able to claim a tax deduction. But if either you or your spouse is covered by a workplace retirement plan, then you may not be eligible to make deductible contributions once your income is above a certain threshold.

The table below shows the rules if you are personally covered by a 401(k) or other workplace plan.

If you don’t have a workplace plan but you’re married and your spouse is eligible for one, you can claim a full deduction with income up to $230,000, a partial deduction with income between $230,000 and $240,000, and no deduction once your income exceeds that amount.

You’ll want to confirm you’re eligible to make deductible contributions before opening your IRA.

Would you prefer to claim your tax savings now or in the future?

As mentioned above, the IRA contribution limit is $7,000, or $8,000 for those age 50 and over who can make catch-up contributions. This limit applies to a combination of your traditional and Roth IRA contributions though. In other words, you can contribute a total of $7,000 or $8,000 across both accounts — not $7,000 into a traditional IRA and $7,000 into a Roth IRA.

This means you’ll need to decide between these two accounts. They work differently, so this can be a hard choice. An IRA comes with a tax break in the year you contribute, just like a traditional 401(k). A Roth IRA doesn’t, but it allows tax-free withdrawals in retirement. By contrast, you pay taxes on distributions from both a traditional IRA and traditional 401(k).

If you think your tax rate will be higher as a senior, you may be better off with a Roth instead of a traditional account. Or, if you’re not sure and you’re already contributing to a 401(k) at work, you may want to mix things up and choose a Roth so you’ll have some accounts offering upfront tax breaks and some offering tax breaks later.

Do you have spare money to invest in an IRA?

Finally, you’ll need to ask yourself if you have spare money to invest in an IRA. If you aren’t already earning your full employer matching contribution to your 401(k), you should probably do that first. If you still have some extra money to devote to retirement savings after that, then opening an IRA could be a smart choice.

By asking yourself these questions, you can decide if opening an IRA in 2024 is the right move for you. If you decide it is, check out the best brokerage firms for IRAs to find an account and get signed up today.

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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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Americans have dialed back their financial planning over the years. Check out the fascinating numbers and why they’re not as bad as they seem. 

Americans spend an average of just 1.8 minutes per day on financial planning and management. That’s according to recent financial planning research from The Motley Fool Ascent, but there’s also a caveat worth mentioning.

The vast majority (97%) of Americans spend no time on money management on any given day. As you can imagine, that drags down the average quite a bit. The remaining 3% of Americans spend an average of 54 minutes per day managing their money.

The immediate reaction may be that 3% of Americans are doing well and 97% are making a huge mistake. It’s not quite so cut and dry. While managing your finances is important, it’s also an area where more isn’t always better.

Financial planning has its benefits — and many Americans are missing out

When it comes to personal finance, it’s good to have a plan. Planners tend to do better with money than non-planners. They’re more likely to save at least 10% of their income, according to research by Hearts and Wallets. And in Schwab’s 2021 Modern Wealth Survey, it found that Americans with a financial plan were more likely to:

Have a three-month emergency fund: 65% of planners compared to 33% of non-plannersFeel financially stable: 65% of planners compared to 40% of non-plannersNever carry a credit card balance: 47% of planners compared to 29% of non-planners

Unfortunately, many Americans (but not 97%) do fall short in terms of financial planning. Only 46% do it regularly. Another 30% said they make financial plans before large purchases or investments, and 24% only do it when they have unexpected expenses or a loss of income.

That’s not ideal. Financial planning is something you should do regularly to prepare for the future and figure out how to make the most of your money. If you only do it because you want to buy something expensive or because you’re going through money troubles, you’re missing out on many of the benefits of having a plan.

So, if you don’t have a financial plan yet, set aside time to make one. It doesn’t need to be complex. A financial plan just involves setting your money goals and deciding how you’re going to use your money to reach those goals. For example, if you want to retire early at age 50, part of your financial plan could be to invest 25% to 30% of your income.

You don’t need to spend a lot of time on your finances

Financial planning and management should be a part of your routine, but they don’t need to be a part of your daily routine.

There’s no benefit to spending time every day on financial management. Your financial plan isn’t going to change that often. You should absolutely review your financial plan on a regular basis. But doing this once a month is better than doing it once a day. This gives you time to see how it’s working and decide if you want to make adjustments.

Managing your money also shouldn’t be an everyday activity. If you’re constantly making payments on credit cards or transferring money between bank accounts, it may be a sign you’re juggling too many accounts. Or, that you should set up automatic payments and transfers. You’ll free up some time for yourself, and you won’t need to worry about keeping track of everything.

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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.Charles Schwab is an advertising partner of The Ascent, a Motley Fool company. Lyle Daly has no position in any of the stocks mentioned. The Motley Fool recommends Charles Schwab and recommends the following options: short March 2024 $65 puts on Charles Schwab. The Motley Fool has a disclosure policy.

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