Money Management

Is a second job worth getting? There may be a more effective way to boost your income. Read on to learn how. 

If you’ve made financial resolutions for the new year, one of them may be to get a side hustle. Working a second job could do several great things for your financial situation. The extra money could make it possible to build savings, pay off a lingering credit card balance, or take the vacation you’ve been dreaming of for years.

A side hustle might also give you peace of mind with recession-related worries. A good 85% of workers today are worried they’ll lose their jobs in 2024, according to data from MyPerfectResume. Having a second source of income to fall back on could help alleviate that concern.

But while there are plenty of good reasons to get a side hustle this year, there may be a more effective means of boosting your income. So before you take on the hassle of a second job, ask yourself this key question.

Am I better off working harder at my current job?

If you work a side hustle, you’re almost guaranteed to boost your income to some degree. It may not be a large one, but chances are, if you put in the time, you’re going to earn some amount of money from a second job.

But what if instead of pushing yourself to work many hours a week at a second job, you put in a bit more time and effort at your main job? Doing so could set you up for a promotion and raise. And that could be a more effective way to increase your earnings.

Let’s say you’re looking to boost your income by $300 a month. You might earn $20 an hour fetching groceries or babysitting other people’s children. But if that’s your going rate, that $300 is going to require 15 hours of your time each month.

On the other hand, if you put in one extra hour a week at your main job to tackle an additional task, it may be the thing that convinces your boss to promote you. Once that happens, you may have to continue working an extra hour per week to get that task done. But if your promotion comes with a $3,600 annual raise, in that case, you’re earning an extra $300 a month by putting in four more hours on the job, not 15.

It’s a matter of managing your time

Another benefit of trying to boost your pay at your main job instead of getting a side hustle? It could make your life easier from a scheduling and time management standpoint.

Let’s say you decide to take on a side gig that requires you to drive all over town every evening, whether to look after kids or drop grocery bags on people’s porches. That’s a lot of running around. And it’s not easy to fit that work into your schedule. You may find that putting in a little extra time at your main job is just plain easier and not as physically tiring.

Of course, the benefit of a side hustle is income diversification. If you score a raise at your main job but are then laid off, you’re out 100% of your earnings. If you get a side gig and lose your main job, you at least have some income remaining.

But still, it pays to at least weigh your options before determining that a side hustle is right for you. You may realize that you can do better for yourself financially and logistically by working toward a promotion and raise that comes from your primary employer.

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When I shop at Costco, I don’t always stick to a list. But that’s also not such a terrible thing. Here’s why. 

I shop at Costco almost every week. Financially speaking, it makes sense for me to buy a lot of my groceries and household staples there because the bulk price is lower than what I’ll spend at a supermarket or big-box store.

When I visit Costco, I generally do my best to stick to a list to avoid a whopping credit card tab. But sometimes, temptation gets the better of me.

I’ve been known, for example, to scoop up a seasonal Costco cheesecake on a whim and bring it home knowing full well that I’m not having guests over and am largely looking at eating that giant dessert on my own. And I’ll occasionally pick up a cozy fleece top at Costco if it’s available for a good price.

But thankfully, my impulse purchases in the cheesecake and fleece top departments aren’t so common. Most of the time, when I make unplanned purchases at Costco, it’s for these items that I can easily justify buying.

1. Socks

Socks aren’t meant to be disposable. But unfortunately, that’s a memo my kids and husband seem to have missed.

For some reason, we go through socks in short order in my house and I’m constantly ordering new ones on Amazon to replace ripped or worn pairs. So when I see a good deal on socks at Costco, I’ll commonly grab a few pairs knowing full well that we’ll need them.

2. Snacks

In my household, there’s pretty much never a shortage of snacks. Sometimes, when I notice a snack item my kids like on sale, I’ll buy a bulk supply because I know it’ll get eaten eventually — either by my kids or their hungry friends. And while that means shelling out extra money on the spot, I find that Costco’s snack prices are really hard to beat.

Case in point: A 36-pack of Pringles mini cans is $27.99 online at Costco, which means it’s even cheaper in the store. That’s about $0.78 per can.

At my local supermarket, you can’t even find individual-sized cans. You can usually only find Pringles cups, which are much smaller, which means my kids go through two at a time. So while a 12-pack of Pringles cup is $7.49, or about $0.62 per cup, I’m paying more per actual serving by buying this item at my local supermarket.

Plus, packaged snacks tend to have a reasonable shelf life. I could bring home a case of Pringles in January and they’d still be perfectly edible in March.

3. Fruits and veggies

Given that I just owned up to buying cheesecake and snacks on a whim, it may surprise you to learn that I tend to impulse-buy fruits and vegetables at Costco a lot. But sometimes, if the peppers look bright or the raspberries look super plump, I’ll buy those items even if they’re not on my list.

I’m fine with this sort of impulse buy, though, because while I am spending extra money, I’m bringing home a nutritious product for people in my house to eat. And hey, I need to do something to offset all of those Pringles.

When you spend a lot of time at a store like Costco, you’re apt to make impulse purchases at least on occasion. If you’re not in debt and can afford to spend a little extra at the store, then there’s nothing wrong with buying unplanned items provided you’ll get good use out of them or they fulfill an essential need.

But don’t make the mistake of giving in to impulse purchases that won’t really serve you well, like cheesecakes. I’ve learned my lesson in that regard and won’t be falling into the trap of bringing home a perishable item I can’t consume before it goes bad. If you’re careful with the impulse purchases you make, they may not end up being such poor financial decisions.

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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.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Maurie Backman has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Costco Wholesale. The Motley Fool has a disclosure policy.

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Writing the IRS a check during tax season can be a real bummer — and point of stress. Read on to see how you can avoid having to do that this year, even if you did it last year. 

In 2023, the IRS issued 85.9 million refunds. The average refund amount was $2,753. But what if you didn’t get a refund last year, but rather, owed money?

Owing money to the IRS isn’t necessarily a bad thing. In fact, it can be argued that it’s a good thing.

When you receive an IRS refund, it means you paid more taxes on your income during the year than was necessary. When you owe money, it means you got to keep more of your wages as you earned them.

The problem with owing money, though, is that many people don’t have the funds to pay the IRS when they realize they’re on the hook. SecureSave reports that 63% of Americans don’t have enough money in savings to cover an unplanned $500 expense. So it stands to reason that many people would end up in a tough spot having to write the IRS a check.

If you owed money on your taxes in 2023, you may be looking to avoid that scenario in 2024. The good news is that you still have time to reduce your tax burden, even though 2023 is now behind us.

It’s not too late to contribute to certain tax-advantaged accounts

There are different steps you can take to lower your tax burden. One such step is to sell losing investments in your brokerage account. You can use capital losses to offset capital gains, and you can also use losses to offset ordinary income to a limited extent.

The problem, though, is that if you didn’t already take losses in your account in 2023, it’s too late to do so now. Remember, the tax return you’re filing in 2024 is the one associated with the 2023 tax year. So in the context of this specific strategy, that ship has sailed.

However, the good news is that it’s not too late to contribute money to two different tax-advantaged savings plans for 2023 — an IRA and an HSA.

In 2023, IRA contributions maxed out at $6,500 for savers under 50 and $7,500 for those 50 and over. You have until April 15, 2024 — this year’s tax-filing deadline — to contribute money to your 2023 IRA and have it lower last year’s tax bill.

Meanwhile, in 2023, HSAs maxed out at $3,850 for savers under 55 with individual coverage and $7,750 for savers in that age group with family coverage. For those 55 and over, these limits were $4,850 and $8,750, respectively.

It’s not too late to put money into your 2023 HSA if you were eligible for one of these plans last year based on your insurance coverage. And you have until the tax-filing deadline this year to finish contributing.

In 2023, the requirements for an HSA for individual coverage were a minimum deductible of $1,500 and an out-of-pocket maximum of $7,500 or less. For family coverage, it was a minimum deductible of $3,000 and an out-of-pocket maximum of $15,000.

Work with a professional to lower your tax burden

Owing money to the IRS can be an unpleasant experience, especially when you don’t have the cash to cover a tax bill. If that’s not a scenario you want to land in again, make an appointment with a tax professional this year so you can strategize ways to lower your taxes.

Of course, you may decide that owing a bit of money isn’t so bad based on the logic above. If you’re okay with owing the IRS, make sure to set some funds aside in your savings account so you can write a check should one be due. But if you’d rather not land in that position, you can take steps to avoid it.

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Shopping at Aldi can result in nice savings. But read on to see why you may want to skip buying groceries at Aldi. 

At the start of 2023, one of the financial resolutions I made was to spend less money on groceries. As someone who was already in the habit of buying staples in bulk (thanks, Costco), that was a pretty challenging thing. But then a friend of mine introduced me to Aldi, and suddenly, I found myself in a position of being able to save money on food at a time when grocery prices were still pretty high across the board (kudos, inflation).

I did a fair amount of shopping at Aldi during the first half of 2023. But I’ll admit that as the year wore on, I found myself visiting the store less frequently.

It’s true that shopping at Aldi has the potential to result in a fair amount of savings. But here’s why you may not want to shop there despite the low prices.

1. You have picky eaters at home

Some people have pickier children than others. But my kids are pretty choosy about the food they’re willing to eat. So when I brought home cheap granola bars from Aldi at one point last year, my kids downright refused to touch them because they weren’t familiar with the brand. As such, instead of saving a few dollars on granola bars, I wasted a few dollars.

Aldi says itself that more than 90% of its products are exclusive brands, which means they’re not the brands you see advertised all over the place. If you’re not picky about brands, then by all means, stock up at Aldi. But if you have a household of picky eaters, you might unfortunately end up throwing your money away to some degree.

2. You have limited time to shop for groceries

Another hiccup I ran into last year during my Aldi shopping was not being able to find staple items consistently. Some weeks, for example, there would be no white bread. Other weeks, the store was out of cucumbers or strawberries.

If you have a busy schedule and limited time to shop, you may find Aldi to be a frustrating experience. You might have to make multiple trips in the same week to get everything you need. And if that’s something you just don’t have time for, then it could pay to do your grocery shopping elsewhere.

3. Your closet Aldi is far away

I happen to have an Aldi within 15 minutes of where I live. And as a bonus, it’s right near Costco. So I don’t have to spend extra on gas to get there if I want to pop in, since I typically go to Costco once a week.

But if the nearest Aldi to your home is a 30-minute drive or more, you may want to do your shopping at a store that’s closer. Driving that long on a regular basis may not be feasible. What you save on groceries, you might end up spending on gas.

There are personal finance benefits to shopping at Aldi, and I haven’t given up on the store completely. I’ll still stop in on occasion if I’m doing a Costco run to see what produce is in stock, because believe it or not, in my experience, Aldi’s prices are often more competitive than Costco’s in that category. But if the above factors apply to you, you may not want to make Aldi your go-to store anytime soon.

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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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There’s an important financial move you may need to check off your list this year. Read on to see what it is. 

The start of a new year is a popular time to make a financial plan. And yours might include opening a brokerage account so you can invest, or putting some cash into a CD to take advantage of today’s competitive rates.

These are both sound financial choices. But if you don’t yet have life insurance, and you have a family who depends on you financially, then putting a policy in place should absolutely take priority.

Why you can’t afford to wait on life insurance

If you’re fairly young, you might tell yourself that life insurance isn’t something you need right away. But that line of thinking is flawed for one big reason.

The whole purpose of life insurance is to protect your loved ones if something extreme happens and you pass away unexpectedly. While being young might put you at less of a risk for certain health conditions, it won’t necessarily mean that you won’t get hit by a bus or get attacked by a criminal if you’re in the wrong place at the wrong time.

That’s why life insurance is something you really should not put off. It’s not just your health you have to worry about — it’s circumstances.

To be clear, this doesn’t mean you should walk around in perpetual fear of something bad happening. Quite the contrary — putting life insurance in place should give you the peace of mind that your loved ones are protected financially if something occurs.

Also, you should know that the younger you are when you apply for a life insurance policy, the less expensive your premiums might end up being. Dave Ramsey says that for a $1 million, 25-year term life insurance policy, the average cost for a 30-year-old nonsmoker is $63.50 a month. For a 36-year-old applicant, it’s $81.50 a month. And for an applicant aged 42, the monthly cost, on average, is $132.50. Term life insurance is typically the simplest and most affordable life insurance to buy.

The rate you’re quoted for life insurance might look very different — in a good or bad way. The point, however, is that the younger you are at the time of your application, the less expensive life insurance is likely to be for you.

Shop around for the best rate

Ideally, at this point, you’re convinced it’s a good idea to look into getting life insurance in 2024. But one thing you don’t want to do is rush the process and sign up for the first policy you’re approved for.

Rather, shop around for life insurance, because you never know when one policy might be more affordable than another for the same amount of coverage. And if you’re not sure how much insurance coverage you need, a basic rule is to multiply your current salary by 10 and add in any major debts you and a family member are jointly responsible for.

For example, let’s say you earn $60,000 a year and have a $200,000 mortgage loan with your spouse. In that case, you may want to aim for $800,000 of coverage, at least as a starting point.

Of course, if you can’t afford the amount of coverage you want, it could make sense to get a smaller policy for now and then aim to buy more life insurance once your financial situation allows for it. The key, however, is to try to put some coverage in place as soon as possible if there are people in your life who depend on you financially.

Our picks for best life insurance companies

Life insurance is essential if you have people depending on you. We’ve combed through the options and developed a best-in-class list for life insurance coverage. This guide will help you find the best life insurance companies and the right type of policy for your needs. Read our free review today.

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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