Money Management

There are some huge benefits to hiring employees, but there are also costs to consider before moving forward. Here’s what to know about hiring in the new year. 

Many small companies are run by just one person who does everything. While there are benefits to having a small business where you’re in sole control, there are downsides as well. In particular, you’re limited in how much you can accomplish when you are the only pair of hands.

At some point, if you want your company to grow, you may need to hire your first employee. You’ll want to be certain you are ready before you do that, though. Here are some questions to ask yourself to help you decide if bringing on a new staff member is something you should do in 2024.

Do you have enough work to go around?

The first big question to ask before hiring an employee is whether you have enough work for everyone to do. If you’re currently happy with the hours you’re working and getting everything done, then you’d want to hire someone else only if you think doing so would expand the work that needs to be done (like, for example, if you could open a new location and bring in more customers).

Otherwise, if you don’t have enough tasks for your new employee to do, you’d end up wasting your time or theirs, since someone would be standing around doing nothing.

Do you have a specific job description in mind?

Hiring someone makes sense when you have a clear purpose of exactly what they will do. For example, if you run a bakery and you want to spend more time in the kitchen mastering your desserts, you might want to hire someone to run the cash register for you.

You need a clear job description in mind both so you can decide if bringing someone new on is justified and so you can attract the right candidate. After all, it does you no good to try to hire someone when you can’t tell them what their job tasks will be. No one would apply, and you’d have no way of interviewing to know if candidates were a good fit if they did.

Are you prepared for the extra expense?

Hiring an employee means you’ll have a lot of extra expenses coming out of your company’s bank account. You will have to cover half the cost of your employee’s Social Security and Medicare taxes, which collectively add up to 7.65% of the salary you pay your worker. You’ll likely also have to buy workers’ compensation insurance coverage, pay into unemployment insurance, and provide some workplace benefits. And, of course, you’ll have a new salary to pay out to your employee.

You must be prepared for all of these expenses and make sure the company has enough profits — or will have enough after you bring on the new worker — to cover the costs of your staff member and leave you enough to support yourself and grow your business.

Do you understand the labor laws that will protect your employee?

Finally, you need to make sure you understand all of the legal protections in place so you don’t accidentally break the law. For example, you need to know about workplace safety regulations that apply, as well as about minimum wage laws. You may want to consult with a professional to ensure you have a good grasp on all this information.

If you are comfortable with the rules and regulations, you have work that needs to be done, and you can make enough to cover your employee costs and still let your business thrive, then you may just be ready to hire your first staff member in 2024. Ideally, it will turn out to be a great business choice — as well as the start of a valuable new professional relationship for you both.

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While credit cards can be a great financial tool, there are some cards that are simply not worth having. Here are four of them to steer clear of. 

It’s a good idea to use credit cards for most purchases, as long as you can be responsible with your cards. Credit cards can have many benefits, including helping you to earn a good credit score as you show you can use them responsibly.

But, while having a card is, in general, a smart move for your personal finances, there are some cards that there’s just no good reason to sign up for. In particular, here are four kinds of credit cards you should avoid.

1. Store credit cards

Store credit cards typically have a higher interest rate than other credit cards (which is saying a lot, since card interest rates are really high in general). Cards that can only be used in the store that issued them have an average interest rate topping 30% in 2023, which is well above the 21.19% average interest rate the Federal Reserve reported for commercial bank credit cards as of August 2023.

Store cards also typically offer rewards that are only good in the shop that issued them, and rewards programs aren’t usually as generous as many offered by other general-purpose card issuers. Plus, you may have to spend extra money to use your rewards earned from a store card. Say, for example, you get a $10 rewards voucher that has to be used in a certain time period and the cheapest thing you want at the time is $20. You’d have to spend extra to use your rewards.

While it may be tempting to sign up for a credit card issued by your favorite shop, you may be far better off just using a general-purpose card when shopping there that charges you a lower APR and that offers a more flexible rewards program.

2. Cards without rewards

There are a ton of great rewards cards out there, so there’s no typically no reason to use a card that offers no rewards at all (except in limited cases if, for example, you’re getting a secured card to help you build credit).

Let’s say you charge $10,000 a year on your credit card. If you pick a card offering 2% cash back, you could walk away having actually spent $200 less thanks to that cash back you got from your card company. But if you had instead got a card without rewards, the $10,000 you charged on your card would have actually cost you the full $10,000.

You should find a card with a rewards program that gives you bonus rewards for the spending you do most. For example, you may want a card offering 5% back on travel purchases if you’re a jetsetter. You should pass up any card offering no rewards at all, unless there’s a very specific reason for considering it.

3. Cards with high APRs

If you plan to carry a balance, you should avoid a card with a high APR. APR, or annual percentage rate, is a measure of total costs of borrowing over the year — including interest and fees.

As mentioned above, most credit cards have pretty high APRs. This doesn’t matter if you’ll pay off your card in full. But if you want to finance a purchase over time, your top priority should be to look for a card with the lowest financing cost possible (such as a card with an intro 0% APR offer). That way, you can keep the cost of borrowing down to a minimum.

4. Cards with annual fees that aren’t justified by the perks

Finally, if a card charges an annual fee, you should avoid it unless the cardmember perks you’ll actually use end up making the fee worth it.

For example, if you sign up for a card that comes with a $95 annual fee, but also provides a $100 credit for airline purchases, that card would be OK as long as you traveled enough to use the credit. But if you were scared to fly and the card had no other unique benefits you could use, it wouldn’t make sense to pay $95 a year for it.

Ultimately, you should make sure to carefully research any credit card you’re considering to find out how the rewards work, as well as what fees you could potentially face. If you do that, you’ll find a far better option than these card types you should avoid.

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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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CD yields are at their highest level in years. Here’s why you might want to lock in a rate now. 

Certificates of deposit, or CD accounts, are paying some of their highest yields in years. At the time of this writing, it’s rather easy to find a 1-year CD with a yield of more than 5%, and 5-year CDs with yields greater than 4% are readily available.

While there’s certainly a chance that CD yields could stay elevated or even get higher, that doesn’t appear to be the most likely scenario. With that in mind, here’s what experts expect interest rates to do in 2024, what it could mean for CD interest rates, and why you might want to lock in high CD yields while you still have the chance.

Benchmark interest rates are high — but will they stay that way?

Since the start of 2022, the benchmark federal funds rate has increased from virtually zero to its current range of 5.25% to 5.50%. (Note: When you hear about the Federal Reserve “raising rates,” it usually refers to the federal funds rate.)

The Federal Reserve has raised rates sharply in an effort to combat inflation, which soared to a 40-year high in 2022.

Along with its interest rate decisions, the Federal Reserve releases its members’ economic projections four times a year. In the most recent version, the policymakers are expecting to make three quarter-point rate cuts in 2024 (so, cutting rates by a total of 0.75%).

However, many experts anticipate even sharper rate cuts as inflation cools off. According to the CME FedWatch tool (which essentially tells us what investors expect), the median expectation is for a year-end federal funds rate of 3.50% to 3.75%, which would imply seven quarter-point rate cuts.

What does it mean for CD yields?

One important thing to know is that CD yields don’t have a direct relationship with benchmark rates, such as the federal funds rate. In other words, if the Fed decides to reduce the federal funds rate by 1 percentage point, it wouldn’t automatically make online banks reduce their CD yields by the same amount. However, they do typically move in the same direction, and we’ve seen that over the past couple of years.

In short, if the Fed were to start cutting rates, it’s extremely likely that CD yields would start to decline soon after.

There’s no guarantee, but all signs point toward lower CD yields in 2024

Of course, just because experts expect benchmark interest rates to fall in 2024 doesn’t mean they actually will. After all, at the end of 2021, Federal Reserve members were calling for the federal funds rate to rise to about 1.6% by the end of 2023. It’s currently set at a range of 5.25%-5.50%. Of course, at the time, experts were still using words like “transitory” to talk about the uptick in inflation.

The point is that all these projections are based on the information we have available now. They aren’t guaranteed to happen. Recent data shows that inflation is quickly approaching the Fed’s target level. But if inflation were to unexpectedly spike higher once again, we could certainly see the Fed pump the brakes on any rate cuts, or even move them higher.

Having said that, the most likely direction for interest rates in 2024 is down. If you have cash in the bank that you’re thinking about putting in a CD, it could be a smart idea to do it and lock yourself in a good CD rate before any rate cuts happen.

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You’ll pay a lot to attend a special event for just a few hours. Read on to learn why Disney events can pay for themselves. 

The Walt Disney World Resort isn’t exactly known for its affordability. Tickets can be expensive, and that doesn’t even consider the cost of hotels, meals, and transportation. But millions of families visit the 43-square-mile resort every year and absorb the personal finance hit.

Disney World’s special events can add even more to the price of a vacation. I recently took my family to the resort’s holiday event, Mickey’s Very Merry Christmas Party. Admittedly, at first, I thought the tickets were expensive — after all, the party itself lasted from 7 p.m. until midnight, while at $189 per ticket, the cost was nearly the same as buying a one-day ticket to the Magic Kingdom park that would allow us to spend an entire day.

However, after having the experience, I can confidently say that it was well worth the credit card charge. There are a few reasons why.

Much shorter lines

This was the number one thing that stood out to me. Because Disney only sells a certain number of tickets for each night it holds the Christmas party, the lines to get on even the popular rides are much shorter than normal. Many of the rides in the park were essentially walk-on, and at one point we went on four different rides within a 40-minute period. The only time we waited more than 20 minutes to get on any ride was for Tron Lightcycle/Run, the newest and most popular attraction in the entire resort.

No need to pay for Genie+

On most days, if you don’t want to wait in long lines at every Walt Disney World attraction, you need to purchase the Genie+ service, which allows you to book Lightning Lanes and experience shorter wait times. This costs anywhere from $15 to $39 per day, per person, and during the holiday season, the prices are typically towards the higher end of the range.

During Mickey’s Very Merry Christmas Party, Genie+ wasn’t available — nor was it necessary. Because this was a capacity-limited event, everyone simply used the regular ride lines. Conservatively, this saved my family of four about $100 compared to a typical day at Magic Kingdom.

Unique experiences

At the Christmas party, there were unique experiences that you can’t get any other time. For frequent Disney World travelers, this can be a big perk. For example, several rides had special holiday overlays, such as the popular Jungle Cruise, and the Space Mountain roller coaster which was temporarily accompanied by a holiday soundtrack.

(Some) free snacks

If you’ve ever been there, you know buying snacks at Walt Disney World isn’t cheap. But included in the cost of Mickey’s Very Merry Christmas Party were several snack stations located throughout the park. Each one offered a specific type of cookie and a beverage, such as hot chocolate or apple cider. To be sure, we didn’t exactly need a cookie every time we saw one of these locations — but it certainly saved us some money every time my young children (who apparently do need cookies rather frequently) wanted a snack.

What other special events does Walt Disney World host?

As mentioned, my recent experience was Walt Disney World’s Mickey’s Very Merry Christmas Party, but this is just one of several specially ticketed events. Other special events offered include:

Mickey’s Not-So-Scary Halloween Party: Essentially the Halloween equivalent of the Christmas party, offered on select dates in September and October each year.Disney After Hours: Offered on select nights at three of the four Walt Disney World theme parks (not Animal Kingdom). This event allows ticket holders to stay after the parks close to the public, usually for three hours.Disney Jollywood Nights: Disney’s holiday party that takes place at the Hollywood Studios theme park (the Christmas party is in Magic Kingdom Park).

The details vary, but all have the same basic structure and perks. They all have limited availability, which keeps lines short. They all offer some sort of free refreshments included in the ticket price, and all have admission costs that are on par with a standard one-day ticket.

It’s also worth noting that all of these allow you to enter the park significantly earlier than the posted event time. For example, Disney After Hours at EPCOT runs from 10 p.m. to 1 a.m., but you can enter the park as early as 7 p.m. The Christmas party starts at 7 p.m., but those with event tickets can enter three hours before then.

The bottom line

Buying tickets for one of Walt Disney World’s special events might seem like an expensive add-on to an already pricey vacation, but it can be well worth the cost, especially if you’d like to experience your favorite Disney attractions without the typical crowds and wait times.

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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.Matthew Frankel, CFP® has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool has a disclosure policy.

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