Money Management

My business bank account has low deposit limits and is annoying in other ways. Here’s why I’m sticking with it, anyway. 

I have a bank account for my business that I don’t like for several reasons. For starters, it has a low limit for the value of checks I can deposit via the mobile app. The customer service hasn’t been great. And when I needed to wire money, I had a very low daily limit for doing so without having to physically visit the bank.

Even though I’ve disliked the account for years, I haven’t made the switch to a better bank. Here’s why.

I haven’t changed my business bank account for a simple reason

I haven’t changed my business bank account because doing so would be a huge hassle, due to the number of other accounts that are linked to it.

If I were to switch accounts, I would need to change my payment method with all of the different companies I work for, as well as with my payroll service, the IRS which takes auto withdrawals from my account, my benefits providers, my business credit cards, all the software companies I’m subscribed with, my internet provider, and my retirement investment accounts.

While it can be a hassle to change a personal account, usually it’s just a matter of updating a few account numbers with creditors you’re paying bills to and with one employer. Typically, this can be done pretty quickly and by signing into your personal accounts or talking to HR.

But, with a business, more transactions going in and out, and making changes would involve filling out several different forms with a lot of other businesses and individuals.

It’s simply not worth the effort involved, because even though I’m annoyed with my bank, it’s not costing me money to have my account. Making a change is simply not that big of a priority to justify the time involved and the hoops I’d have to jump through.

Picking the right account from the start is important since switching banks is a hassle

Since I’ve been stuck with a bank account I’m not crazy about for more than a decade, I’ve come to realize the importance of choosing the right financial institution from the start.

The reality is, while switching a business bank account is more hassle than switching a personal account, it’s never fun to deal with this process, no matter what kind of account you have. It’s a time suck that involves dealing with bureaucracies and filling out forms, neither of which is anyone’s idea of a good time. And it can all be avoided by taking the time to research a bank’s features and policies to find an account you’d be happy to keep for the long haul.

Some of the key features to look for in bank accounts, including the best business bank accounts are:

Bank fees like monthly maintenance fees, overdraft fees, and low balance feesMobile deposit and wire transfer daily and monthly limitsCustomer service and supportEase of withdrawing and depositing moneyApp usability and features

By researching banks carefully, you can avoid getting stuck in my situation, because you won’t have to choose between going through the hugely annoying process of switching banks or coping with minor annoyances on an ongoing basis.

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I couldn’t find a house I wanted to buy so I approached people with a rental property. There are a few reasons why I won’t use this strategy again. 

When I started the process of buying a house, there were few homes on the market in the area where I wanted to live. I also had some specific requirements for my house, which were hard to fulfill in my desired neighborhood.

Because there were no homes for sale that I wanted, I decided to take a creative approach and look into properties that weren’t on the market. I found a home for rent, approached the owners, and asked them to sell it to me.

Ultimately, this led to buying my dream home. But, there were a lot of problems along the way that convinced me never to take this approach again. Here’s what the issues were.

I had no negotiating leverage

The first big issue that I ran into when buying a home that wasn’t for sale was that I pretty much had no negotiating leverage. The owners didn’t need to sell as most people who list their house on the market do. So I had to make a competitive offer that would convince them to do so. And, when they came back and countered with a take-it-or-leave-it offer, I basically had to accept or they wouldn’t have sold to me.

Fortunately, the amount they wanted me to pay was reasonable based on what other houses have sold for, and I would comfortably be able to afford the mortgage on the property, but I ended up paying more than I wanted — and probably more than I would have paid if I’d been able to find a house that was on the market and negotiate the price down a little.

I also wasn’t able to get them to drop the price when the appraisal came in a little low or when there was an unexpected issue during inspection, since they weren’t in a position where it was really important to them that the deal go through.

The house wasn’t for sale for good reasons

The other reason I wouldn’t try this approach again is because there were good reasons the house wasn’t for sale.

It turned out there were several liens on the home, and it took months for the sellers to get the liens cleared so they could sell the property. Liens are claims against the house, and a seller can’t transfer full legal ownership until they are taken care of. Because of the issues with the liens, my home closing was delayed for more than three months. I was able to wait, but it still created a lot of hassle.

Ultimately, if you can’t find a house that you want because of low inventory, getting creative and approaching people listing rental properties is one way you could find a place to buy. You could also try contacting people who have homes you’re interested in and asking them to sell, or putting the word out in neighborhood groups that you’re looking to purchase.

But, if you decide to move forward with trying to purchase a home that wasn’t on the market to begin with, be aware that there are some serious downsides you may have to deal with. Like me, you could end up with a great house — but only after going through a lot of extra hassle to get it.

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Want to buy an electric vehicle in 2024? Here are a few surprising benefits of EV ownership that most people might not know. 

Are you thinking about buying an electric vehicle (EV) in 2024? You’re not alone: A Pew Research survey found that 38% of Americans are very likely or somewhat likely to consider an EV purchase for their next vehicle.

And when you’re ready to buy an EV, you have more options than ever before. According to stats from Bloomberg, as of 2023, there were 55 models of electric vehicles available in the U.S., and that number is expected to climb by 20%-30% in 2024.

EVs are getting cheaper. There are more low-cost models of EVs coming on to the market, and the price of used EVs is often cheaper than gas-powered cars. Depending on your income, you can also get EV tax credits of up to $7,500 for buying a new EV, or $4,000 for buying a used electric vehicle in 2024.

But along with the EV tax credits, there are a few extra benefits of EV ownership that people might not realize. Let’s look at a few.

1. Save money on gas

OK fine, maybe this is not an “unexpected” benefit of EVs, but it’s worth repeating: With an electric vehicle, you no longer have to buy gas. The car is fully powered by electricity. Your gas budget is now $0.

Of course, it still costs money to pay for electricity to charge your EV. According to an analysis from Chase Auto, the cost of powering an EV is about half the cost of fueling a gas-powered car. When you consider the average American spends $2,148 on gas per year, that means an electric vehicle could save you $1,074 on gas each year, or $5,370 during the first five years of owning the car.

2. Charge your EV at home

You can charge the EV by plugging it into a regular home outlet in your garage or at the side of your house, or by using public EV charging stations. If you want faster EV charging at home, you can install a charging station (with help from an electrician).

Tax credits can help pay for home EV chargers, too: You can get a federal EV charger tax credit for 30% of the cost of hardware and installation, up to $1,000. And depending on where you live, your local electrical utility might offer rebates and incentives for installing a home charger for your EV.

I own a plug-in hybrid car, and it charges in my garage just like an EV. The first time I plugged in that car, I was fascinated and mesmerized. I could barely believe it. I kept running up to complete strangers and saying: “My car is being fueled… by my house??” (“Please leave us alone,” the strangers said.)

But the point is: Even though electric vehicles are becoming more common, there’s still a “wow” factor to refueling your car without leaving home. Especially if it can save you thousands of dollars on gas.

3. Zero oil changes, lower maintenance costs

Since electric vehicles don’t have internal combustion engines, they don’t have a lot of the moving parts as a typical gas-powered car. This means: no oil changes and lower overall maintenance costs. The lower costs of EV maintenance could save you about $3,000 over five years ($600 per year) compared to a gas-powered car.

4. Electric vehicles are really fun to drive

Amidst all the discussion of EV tax credits and $0 spent on gasoline, it’s easy to lose sight of what might be the biggest benefit of electric vehicles: these things are really fun to drive! The electric battery lets the car accelerate really fast; most EVs can go from 0-60 mph in less than five seconds. And the engine is silent, so it feels like you’re driving a spaceship.

When my plug-in hybrid Toyota Prius is in EV mode, and I’m gearing up to accelerate onto the freeway, at that moment, I am no longer a middle-aged dad going to the grocery store for mundane errands. I’m Han Solo, at the helm of the Millennium Falcon, getting ready to make the jump to lightspeed. (But please drive your EV/spaceship responsibly, to avoid crashes and save money on insurance.)

Bottom line: The cost of buying EVs is likely to come down in 2024 as more models come onto the market, batteries get cheaper and better, and the price of used EVs declines. Not everything about EVs is “cheaper” than gas-powered cars; the cost of car insurance for an EV might be higher, depending on the vehicle and where you live. But along with the total cost of ownership of an EV, there are some unique benefits — no money spent on oil changes, no money spent at the gas pump, and a fast-accelerating, fun driving experience.

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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.JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.

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I’ll be paying my taxes with a credit card this year, despite paying a fee to do it. Here’s how to decide whether paying your taxes with a card is worthwhile. 

The IRS allows you to pay your taxes with a credit card. However, you need to use a third-party service in order to do so. These services charge anywhere between 1.85% and 1.98%, depending on which one you choose. There are also minimum fees ranging from $2.50 to $2.69 that the services charge in case you’re paying a small tax bill.

If you owe money to the IRS, you’ll have to decide whether to pay out of your checking account or whether to use a credit card. Despite the added fees, I use my card every year. But there are a few key things to consider in order to decide whether it makes sense for you to do the same.

Here’s why I use my credit card to pay my taxes

I use my credit card to pay my taxes for a simple reason. The value of the rewards from my credit card company are higher than the cost of the fees I have to pay for using my card. As a result, I end up better off financially by earning those rewards, even though I had to pay a fee in order to get them.

My credit card gives me 2.62% back on most purchases because I earn a rewards boost by being a preferred customer (which basically means I have a lot of money in a brokerage account affiliated with the card issuer). Since I can pay a fee of 1.85% and get 2.62% back, it’s worth using the card to get the rewards.

Say, for example, I end up paying a $10,000 tax bill. The value of the rewards I end up with, after subtracting the added fees associated with paying with a card, is $77. That’s a pretty good amount of money. Why would I want to pass that up?

Should you use a card or pay out of your bank account?

If you have a card offering you 2% back or more in rewards and merchandise, then it could be worth charging your taxes on a credit card to get the rewards left over after paying the fee.

There’s no real downside since you can do this quickly and easily, and you may as well earn rewards for something you have to pay anyway. The upside depends just how big your tax bill is and what your card’s reward rate is.

You may also want to charge your taxes if doing so can help you to meet a spending requirement that opens up the door to a new cardmember sign-up bonus. Say, for example, you sign up for a card that gives you a $500 bonus cash back reward after you spend $3,000 in the first three months of opening the card. If you can use the card to pay your taxes, that will make it a lot easier to spend the required $3,000 and earn your $500 bonus.

If you aren’t in line for a new cardmember bonus, though, and your card offers only limited rewards — like 1% or 1.5% cash back — or no rewards at all, then paying the added fee to charge your taxes just doesn’t make sense. Just pay out of your bank account rather than paying an extra 1.85% or more.

And, no matter what, you’ll definitely want to pay off the taxes you charge on your card before your credit card interest charges kick in. The interest you’d pay would cost far more than rewards you earn, and there’s no sense in making your taxes cost even more than necessary!

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Recent articles have raised questions about a big fitness franchise. Find out what lessons potential side hustle franchisees can learn from the story. 

Side hustles have taken off in the past few years. According to a recent Index by Pinger study, a whopping 67% of Americans have a small business, a side hustle, or do freelance work. Franchises — buying the license to operate under an existing brand — are just one of many ways to earn extra income outside of your main job. But they are often more complicated than, say, food delivery or online tutoring.

When you set up a franchise, you are essentially running a business under someone else’s brand and model. It can be a lot of work and often requires serious investment in terms of time and money. According to Franchise Business Review, the minimum investment required for some franchises is around $3,500 while others can require $50,000 or more.

On the plus side, the brand already exists and you’ll get training and marketing support, which can make a big difference to a fledgling enterprise. But it is a lot of money to lay out. Particularly as some franchises are not all they’re cracked up to be. If you’re planning a franchise side hustle, it’s important to do a lot of research and proceed with caution. Not only will this help you avoid scams, but you can also pass up on businesses that won’t work for you.

Franchises aren’t always everything they promise

People made around 5,900 franchise-related complaints to the FTC between 2018 to 2022, according to the U.S. Government Accountability Office. However, it believes this number is only the tip of the iceberg as it says many franchises aren’t aware of the protections available to them.

A recent Bloomberg article highlighted the issues around one franchise chain, Xponential. It says a number of former and existing franchises told Businessweek that the company had misled them. Some are taking legal action against the chain. The article said some of the 3,000 franchises were “bleeding money.” Xponential rejects the accusations.

Without getting too deep into the accusations, the case highlights the risks involved in opening a franchise. Bloomberg says the marketing team sometimes encouraged potential owners to take out loans or roll over their 401(k)s to fund the deal. If the business doesn’t perform as well as you hope it might, your side hustle could cost you money and eat into the money you need for your retirement years.

Make sure a franchise is right for you

If you’re considering running a franchise as a side hustle, make sure you know exactly what you are getting into. Research, research, and then research some more. The FTC has an excellent guide that’s packed with information. Its Franchise Rule gives you some protection against unscrupulous players, as it requires the seller to disclose a bunch of key information about the business.

If you’re able to talk to someone who is already running a franchise from the same chain, so much the better. Make sure you understand the time and money you’ll need to commit. Franchises can be a lot of work and it may be difficult to juggle the work alongside your main nine to five. Some franchises hire managers to do the day-to-day work, but that absentee model relies heavily on finding the right people. That’s a challenge for many small businesses.

Financially speaking, try to map out the best- and worst-case scenarios, particularly if you’re borrowing money or dipping into your retirement savings. Bear in mind that while you may hope to break even within three or even six months, it could take a year (or more). Be as realistic as you can about the upfront and ongoing fees and other costs. You may need to have a good chunk of money in your bank account to keep you going until your side hustle franchise turns a profit.

Look at the requirements the brand owner might put on you. For example, you might need to spend a certain amount on advertising, open a store in a specific location, or use particular suppliers. All of these things can have a significant impact on your bottom line.

There are a lot of conflicting statistics about the success rate of franchises, but — like small businesses — there is a risk your franchise may fail. Consider how you will cope financially if things don’t go as you hope. It’s one thing to lose a freelance gig, and quite another to lose a business you’ve invested thousands of dollars in.

Spotting a franchise scam

Treat your potential franchise side hustle as any other investment opportunity. Be wary of heavy sales techniques and anyone who demands money upfront. If the numbers seem vague or don’t add up, treat this as a major red flag.

Research the people involved in the franchise as well. If you find negative headlines about the big bosses when you do a bit of digging, that does not bode well. Be suspicious of any brand that feels like a get-rich-quick scheme. If someone’s saying you can make a lot of money with no work, it’s almost certainly too good to be true.

Depending on your situation, a franchise side hustle could be a great way to get an extra income stream. Just make sure you understand the risks and costs involved before you commit.

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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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Setting a financial goal heading into a new year is very common. Learn how my husband and I decide what goals to set for ourselves. 

According to research from The Ascent, two-thirds of survey respondents intend to make financial resolutions for the 2024 year.

I don’t make resolutions, since I know that many fail even before the end of January. But, my husband and I do set personal finance goals for ourselves. In fact, each year we work together to create a few objectives, and we’ve achieved them pretty much every year since we started the process.

Here’s how we set our goals and the steps we take to make sure that we achieve them over time.

1. We set a short-term, medium-term, and long-term goal

When we set our financial goals, we don’t want to make too big of a list and find ourselves overwhelmed with everything we’re trying to do. Rather than aiming to accomplish tons of things at once, we focus on setting one short-term goal, one medium-term goal, and one long-term goal.

For example, last year we wanted to save for an RV as our short-term goal that we accomplished within the year. We also wanted to finish working toward funding a home remodel, which was a medium-term goal we’ve had for a few years. And we wanted to continue working on our long-term goals of investing in our brokerage account for retirement and our children’s education.

By focusing on just three objectives, we can make sure we’re using our resources wisely and won’t spread ourselves too thin. If you’re setting our own financial goals, try to think about a few big ones that really matter to you so you can devote your resources to actually accomplishing them — rather than hoping to do too many things at once and not ending up doing any of them.

2. We both make independent lists and then find what we’re both passionate about

Another important step in our goal-setting process is making sure we’re both on the same page. After all, it’s easier to accomplish something if we’re working together and if we’re both excited about it.

To make sure we’re united in our goals, we both make separate lists and then look for areas where there is overlap. If you have a partner and you’re trying to work on money issues together, taking the time to consider your separate desires and then finding areas of compromise can be really helpful.

3. We consider whether the goals are realistic and achievable

We don’t want to set ourselves up for failure, so we work really hard to make sure that the goals we are setting are things we can actually accomplish. We don’t, for example, make ridiculous plans like trying to save tens of thousands of dollars a month for retirement or trying to buy a house in a year.

We look at what we’d have to do to accomplish each goal and break it down to make sure it’s affordable. For example, if we were trying to save $30,000 for an RV in a year, we’d do the math to figure out we need to save $1,666.67 per month and we’d try to see if we can fit that into our budget. If we find that this isn’t doable, we’d go back to the drawing board on our goal.

If you’re setting a goal, be sure to consider the cost and time limit to achieve it, see how much of your money you’d need to use each month, and make sure it’s actually possible.

4. We create a detailed plan and automate the process

Finally, once we know what our goals are, we make a detailed plan and automate the process to make it easier. So, for example, if we decided we were going to save $1,666.67 a month toward an RV purchase, we’d set up automatic transfers from our checking account on the day we get paid into a special savings account earmarked for that goal.

This process has worked really well for us every year, and if you want to maximize the chances of accomplishing your own goals, it may be worth putting your head together with your partner and trying these steps yourself.

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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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