Money Management

There are some well-known benefits of achieving elite status. But read on for others you might not be aware of. 

Some of the benefits of frequent flyer elite status are well-known. For example, most travelers know that elite flyers get to use a priority check-in line at the airport and get priority boarding on the airplane itself. And if you’ve flown a major airline, you’ve likely seen the “upgrade list” at the gate, where empty first and business class seats are assigned to those with elite status, subject to space availability.

On the other hand, many valuable benefits typically come with frequent flyer status that you might not be aware of. Of course, different airlines offer different perks to their elite members, but here are some that are rather common that you might find lots of value in.

In the interest of full disclosure, I have American Airlines’ Executive Platinum status, and formerly held elite status on Delta. So, many of the examples come from my own experience.

1. Free checked bags

Airlines typically charge $25 or more to check a bag these days. Elite status travelers typically get a free checked bag, and the benefit can be even better for those in higher status tiers. For example, American Airlines customers with AAdvantage Gold status (the first elite level) get one free checked bag, while those at the airline’s highest level can check up to three bags for free.

This benefit also typically extends to other travelers on the same reservation. So, if you travel with your family of four, this benefit alone could save you $200 or more per round trip — a definite win for your personal finances. It’s also worth noting that if you have free checked bags as a travel credit card perk, it can often be combined with this.

2. Reciprocal airline status

Many airlines partner with one another to provide reciprocal status benefits. As an example, if you achieve elite status with United Airlines, you’ll also get Star Alliance Silver or Gold status, which gets you benefits on about 35 other airlines, such as Air Canada, Lufthansa, and Singapore Airlines, just to name a few.

3. Mileage earning bonus

Some airlines allow elite flyers to earn status and award flights quicker. For example, American Airlines AAdvantage Gold members earn 40% more miles and elite qualification points (Loyalty Points) for flying compared with non-elite members. This can make it easier to earn status for the following year and can also help you earn free travel quicker.

4. Rental car status

Many major airlines partner with rental car agencies to offer perks and elite status for members. For example, customers with elite status on Delta also get elite status in the Hertz Gold Plus Rewards program.

5. Free premium seats when booking

Free first-class upgrades are nice, but you aren’t likely to get them all the time, especially if you’re in one of the airline’s lower elite tiers. But many airlines have premium main cabin seats that offer additional legroom and/or preferred locations that flyers with elite status can book for free.

6. Complimentary alcoholic beverages and snacks

Alcoholic beverages, meals, and premium snacks are often free in first class, but in some cases, elite frequent flyers can get them regardless of where they’re sitting. For example, as an AAdvantage Executive Platinum member, I can order any beverages and snacks that are offered, even if I’m seated in the main cabin.

7. Dedicated customer service lines

One of my favorite perks of elite status is a dedicated customer service line I can call if I need to rebook a flight, make changes, or otherwise need assistance. This can cut down on wait times dramatically in many situations, especially when there are many flight cancellations in a short period.

Is elite airline status worth it for you?

Earning frequent flyer status could be more valuable than you think. For example, as mentioned, a family of four with free checked bags could save $200 or more on every round-trip flight they take. And it’s worth noting that there are other ways you can earn elite status in addition to flying — for example, several airlines give elite status points for spending on a cobranded credit card or shopping with certain partners. If you fly often with the same airline, it’s worth considering.

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Don’t get discouraged by the common myths of affordable winter vacations. Learn how to find cheap flights and hotels for fun winter trips. 

Sometimes the biggest challenge with booking affordable winter vacations is getting over the mental hurdles that are holding you back. People tend to have misconceptions about how doable it really is to find cheap flights for winter travel. Too often, they give up before they start.

“I probably can’t afford a winter vacation,” you’re telling yourself. “I guess I’ll just stay home and sit on the couch in my pajama pants, eating cheese dip directly out of the jar.”

Stop that! No more negative self-talk! Don’t let the cold, gray weather turn you into a gloomy person who’s trapped in the house by inertia! Seize the moment.

Let’s look at a few of the biggest myths about affordable winter vacations — and how you can book the trip of your dreams.

Myth No. 1: “You’ll never find cheap international flights”

If you want affordable winter vacations, getting cheap plane tickets is half the battle. But don’t assume that a low-price plane ticket is out of your reach — even to international destinations.

There are great flight deal services that send cheap flight offers directly to your email inbox, like GoingTM (formerly Scott’s Cheap Flights), Dollar Flight Club, and Secret Flying. Here are a few trending flight deals we found on Secret Flying for January and February 2024 to get you out of the continental U.S.:

Philadelphia to Medellín, Colombia ($276 roundtrip)San Francisco to Kona, Hawaii ($189 roundtrip)New York to San Juan, Puerto Rico ($141 roundtrip)

Signing up for a few of these flight deal services can be worth a little more clutter in your inbox. And it might be worth shelling out for a paid membership if you’re super-passionate about finding cheap flights to surprising destinations.

Want to be your own low-cost travel agent? Use Google Flights, Skyscanner, and Kayak to quickly find cheap flight deals. For example, I used Skyscanner’s flexible dates and “anywhere” search options to find these cheap flights from Denver for January 2024:

Mexico flights starting at $73Jamaica flights starting at $110Costa Rica flights starting at $111

Don’t assume that affordable winter vacations have to happen within driving distance. You can get cheap flights to many destinations in the U.S. and other countries, if you’re flexible on dates, open-minded about connections, and eager to explore new parts of the world.

Myth No. 2: “The only cheap hotels will be shabby and miserable”

It’s true that if you want affordable winter vacations, you might have to compromise on lodging. You probably can’t stay at a five-star hotel with beachfront views, or the most spacious vacation rental home. But that doesn’t mean you’ll be stuck staying at a depressing roach motel with stubbed-out cigarettes sticking up out of the suspiciously stained carpet.

You can find great hotel deals for affordable winter vacations by using popular hotel search tools like Priceline, Expedia, and Hotels.com. They let you search by location and sort by price. These search tools are perfect if you just want cheap hotels, and don’t care about earning hotel credit card reward points.

Want an even better deal? If you love the thrill of discovery, sign up for a special offer like Priceline’s Express Deals®, where you get ultra-low prices, but won’t see the name of the hotel until after you book (and pay). Or if that feels too risky and uncertain, you can use Priceline’s Pricebreaker® feature, which shows you three possible hotels in the area with one affordable price — and you find out where you’re staying after you book and enter your credit card details.

If this all sounds like too much work, try a new hotel deal service called HotelSlash. Just tell HotelSlash where you want to go on vacation, and it will analyze prices, sort through options, and send you an email with price quotes for the best hotel deals at your destination. A HotelSlash membership costs $29.95 per year, but if it can save you hundreds of dollars (and hours) on booking your winter vacation, it’s worth it.

Myth No. 3: “There are no affordable winter vacations at the beach”

If you’re longing to get away to a sunny place in the sand, you might feel like it’s too late to book a vacation at the ocean. Wrong! There are often last-minute travel offers available from travel deal search services like Travelzoo that can get you to a beachfront resort for surprisingly cheap prices.

A quick review of Travelzoo found these great last-minute deals on winter beach vacations:

Mexico (Cabo San Lucas): four nights at an all-inclusive resort (including airfare) starting at $899 Dominican Republic (Punta Cana): four nights at an all-inclusive resort (including airfare) starting at $969Mexico (Riviera Maya): all-inclusive resort deals for flights from Fort Lauderdale, starting at $449

You don’t have to book a beach vacation months in advance. Sometimes resorts have cancellations at the last minute, and they offer low-price deals so those empty rooms don’t go to waste.

Bottom line: Get off the couch, put down the cheese dip, and pick up your credit card. Affordable winter vacations can be found with just a slight amount of effort. Don’t believe the myths. It’s never too late to book a fun winter trip while saving money.

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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.Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has positions in and recommends Alphabet. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

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The only way to get charitable giving write-offs is to itemize your deductions. See how one simple strategy can get you a tax break. 

If you’re making some year-end tax moves or starting to look ahead at tax planning for 2024, charitable giving write-offs should be part of your process. If you have enough income or assets to be able to give generously to charity, and you can itemize your deductions, you can get some worthwhile tax benefits while supporting good causes.

Let’s look at one simple way to maximize your charitable giving write-offs.

Charitable giving write-offs only happen if they’re itemized

Most people might not realize this — you don’t get charitable giving write-offs at tax time unless you have itemized deductions. Most people take the standard deduction, which for the 2023 tax year is $13,850 for single filers, and $27,700 for married couples filing jointly. If you don’t itemize, your charitable donations are irrelevant to your taxes.

Here are the types of deductions that can be itemized:

State and local income taxes (“SALT”) and real estate taxes (the property taxes that homeowners pay to local governments) — you can only deduct up to $10,000 of these payments per household. This rule is called the SALT deduction cap, and it makes it harder for many taxpayers to itemize.Sales taxes for local or state governments, which could include sales tax for a major purchase like a new vehicle or other big-ticket items.Personal property taxesMortgage interest (including home mortgage interest or tax-deductible home equity loan interest)Disaster losses (in case you’ve suffered a fire or natural disaster)Some dental and medical expenses (but only if they exceed 7.5% of your adjusted gross income, or AGI)Gifts to charities

As a taxpayer, you should always take the biggest deduction amount that you’re allowed — whether it’s the standard deduction or itemized deduction. You have the right to reduce your taxable income by as much as IRS rules allow. So if you want a tax break for your charitable contributions, your total itemized deductions need to be larger than your standard deduction amount. If you want charitable giving write-offs, you should try to itemize.

One simple tax strategy for charitable giving write-offs

Sometimes, taxpayers will have almost enough itemized deductions to be bigger than the standard deduction. If you’re close to exceeding the standard deduction, you should try to give enough extra money to charity to put you over the top. Boosting your charitable giving can be a simple tax strategy that reduces your taxable income.

Let’s look at two example taxpayers to see how this works.

Example No. 1: Dan, Texas single guy

Dan is a single person who owns a home and lives in Texas, where there are no state income taxes. Dan’s itemizable deductions are his local property taxes of $5,400 per year, mortgage interest of $6,000 per year, and a monthly donation of $100 ($1,200 per year) to his church — for a total of $12,600 of itemized deductions.

However, as a single person, Dan’s standard deduction in 2023 is $13,850. So if Dan wants a tax break for those charitable donations, if he has some extra cash in savings he should write one more check to charity — for $1,251 or more — by the end of 2023. If Dan increases his charitable contributions to $2,451, he can itemize. And that makes those charitable donations tax deductible.

Here’s how Dan’s list of itemized deductions looks now, after writing that big year-end check to charity (and exceeding the standard deduction by $1):

Example No. 2: Maria and Joe, New York married couple with a new baby

Maria and Joe are a married couple (filing jointly) who live in New York City where they own a condo. New York is a higher-tax state for state income and property taxes, so Maria and Joe are paying the full $10,000 amount of the SALT deduction cap. They also pay $6,000 per year in mortgage interest, and have just welcomed a new baby. The costs of healthcare during Maria’s pregnancy and childbirth caused Maria and Joe to have some extra out-of-pocket medical expenses, exceeding 7.5% of their AGI by $8,000.

Without any charitable contributions, Maria and Joe’s itemized deductions add up to $24,000. This is less than their standard deduction amount of $27,700. But they’re pretty close to being able to itemize! If Maria and Joe can write a check (or make an online donation via credit card) by the end of the year for $3,701 or more, that charitable contribution would be tax deductible.

Here’s how Maria and Joe’s list of itemized deductions look now, after that big year-end charitable donation (and exceeding the standard deduction by $1):

Bottom line: Depending on your tax filing status and overall financial situation, a well-timed donation can help you get charitable giving write-offs. During the tax year, pay attention to how much your itemizable deductions are adding up to — and consider giving more money to charity by the end of the year so you can itemize.

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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 make one move that can save you money on taxes and boost your retirement investments? Here’s why to contribute to an IRA before the year ends. 

There’s no magic bullet for financial planning. Financial success is a long-term process that comes from a number of different decisions and ongoing effects, like how you spend, save, and invest. But what if you could wave a magic wand and change just one thing about your personal finances to make a big difference?

If you’re doing end-of-year tax planning, or just looking at your overall financial goals, there is one small thing you can change right now that can strengthen your financial well-being for years to come.

Let’s see what this smart money move is all about — and see if you qualify.

One smart year-end money move: Put money into an IRA

Putting money into an IRA before the end of the year could be one of your smartest financial decisions. Even if you already have a 401(k) or other employer-sponsored retirement plan at work, you are allowed to open an IRA. And depending on your income and which type of IRA you choose, some or all of the money you put into your IRA this year will be tax deductible.

Putting money into an IRA before the year ends is a great way to boost your retirement savings, and potentially reduce your income taxes. No other single decision is likely to make such a big difference for your current (and future) financial health.

What is an IRA?

An IRA (“Individual Retirement Arrangement”) is a type of account that lets you save and invest for retirement in a tax-advantaged way. There are two common types of IRAs that almost anyone can use: traditional IRAs and Roth IRAs.

Traditional IRAs

For most people, a traditional IRA works in a similar way to a 401(k) — the money you put into your IRA account (your “contributions”) are tax deductible. For 2023, you can put up to $6,500 into a traditional IRA. People aged 50 and older can make a “catch-up contribution” of an extra $1,000.

If you are not covered by a retirement plan at work, the full amount of your traditional IRA contribution will generally be tax deductible. There are some limits for who is allowed to deduct IRA contributions, but these rules are mostly just for people who are married to a spouse who is covered by a retirement plan at work. If you’re married filing jointly and your adjusted gross income (AGI) is less than $218,000, you probably can take the full tax deduction for traditional IRA contributions.

Let’s see how putting money into an IRA by the end of the year could cut your tax bill.

Example No. 1: Single person with no retirement plan at work, $60,000 of taxable income

This taxpayer is in the 22% tax bracket for 2023. So if they can put an extra $6,500 into a traditional IRA before the year ends, they will reduce their 2023 taxes by $6,500 x 0.22 = $1,430.

Example No. 2: Married couple (filing jointly) with $95,000 of taxable income

This couple is also in the 22% tax bracket for 2023. But if they can put an extra $6,500 of savings into a traditional IRA, they will reduce their taxable income to $88,500 — putting them into a lower tax bracket (12%). Based on the IRS tax tables for 2023, this one year-end tax move will reduce their total tax from $11,521 to $10,183 — for a tax savings of $1,338.

Roth IRAs

With a Roth IRA, you don’t get a tax deduction for the money you put in. Instead, the money in a Roth IRA is allowed to grow tax free, and can provide tax-free income in retirement. Opening a Roth IRA can be a good move, especially if you’re at an early stage of your career and expect to be in a higher tax bracket in the future — the tax break you get on your current (lower) income might be worth less than the tax break you get as an older, (ideally) higher-income person.

Roth IRA and traditional IRA contributions are limited to the same total amount per year: $6,500 for 2023 ($7,500 for people age 50 and up). Not everyone is allowed to put money into a Roth IRA; there are some limitations for people with high incomes and for people with different filing statuses. But in general, these two types of taxpayers can put the full amount into a Roth IRA:

Single people with modified adjusted gross income (AGI) of less than $138,000Married couples filing jointly who have modified AGI of less than $218,000

Putting money into a Roth IRA versus traditional IRA depends on your overall tax strategy and financial goals. You don’t have to pick just one. You could split your money with $3,250 into a traditional IRA and $3,250 into a Roth IRA so you get a blend of immediate tax relief and future tax-free income.

Why you should use an IRA — even if you have a 401(k) at work

If you already have a 401(k) or other employer-sponsored retirement plan, even if you’re maxing out your 401(k), you can still put money into an IRA. You can put the full contribution limit ($6,500 for 2023) into a traditional IRA and get a tax deduction for the entire amount. But your modified adjusted gross income must be $73,000 or less for single filers, and $116,000 or less for married couples filing jointly.

Bottom line: Putting money into an IRA before the year ends can be one of the smartest financial moves of 2023. It’s not too late! Make a plan now to boost your retirement savings.

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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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Your bank account is a vital part of your financial life. Learn when you might be at risk of losing it. 

Talk about a bad day: Imagine attempting to log into your bank’s website, only to learn that your checking account has been closed without your consent. If this happens to you, you’ll need to get in touch with the bank ASAP and see if you can reopen the account. If your bank says no, you’ll have to open a new account and reroute all your existing automatic payments and direct deposits. What a pain! But why did this happen to you? Was it something you said? Probably not. But it could have been for one of these reasons.

1. Making suspicious transactions

The banking transactions that tend to raise red flags most often involve cash, so if you move a lot of cash in and out of your account, it’s not outside the realm of possibility that your bank could close it. $10,000 is the magic number here — if you withdraw or deposit more than $10,000 in cash, your bank is required to report it to FinCEN (the U.S. Treasury’s Financial Crimes Enforcement Network) under the terms of the Bank Secrecy Act of 1970.

And don’t think you can split up a deposit into smaller amounts to get around this — that’s a red flag, too. If you’re making legitimate transactions, you have nothing to worry about. Just know that big transactions are observed and reported. And if you’re being shady, your bank will catch on and close your account.

2. Being unresponsive

Communication is one of the most important parts of many aspects of human life, including work and interpersonal relationships. Why would it be any different for your working relationship with your bank? If you decide to ignore any communications from your bank (such as phone calls, letters, or emails) regarding your accounts, you could find yourself losing those accounts. Similarly, if you start a new business and start dealing with a lot more money, or making different kinds or sizes of deposits, call your bank and explain yourself.

If your bank requests pay stubs or other proof of reasons why your financial activities have changed, provide them. Banking is a two-way relationship, and if you drop the ball on your end, your bank is within its rights to end the relationship by closing your account.

3. Using checks for payments

It’s unfortunate, but check fraud is rampant these days. According to FinCEN, it’s about doubled since 2021. A lot of us have switched away from using checks altogether; to use myself as an example, I’ve written exactly one check in the last year, to pay my city for an on-street parking pass. Other payment methods offer better consumer protections and are just generally faster and more convenient — plus, while check washing is a thing, there is no equivalent for credit cards.

So if you rely heavily on checks to complete your everyday financial transactions, you could be at risk. And it stands to reason that your bank may not be thrilled to do business with you if you report losses due to check fraud. If you have to use checks, don’t mail them if you can avoid it, and don’t accept them from people you don’t know.

4. Constantly overdrafting your account

This last reason for a surprise account closure is a bit more straightforward. If you’re having difficulty keeping your account funded and are frequently overspending what you have and ending up in the red, that’s not good. Your bank will charge you fees (unless you have overdraft protection enabled — this usually isn’t free, though), and if you don’t put money in the account to get yourself back in the black, you could find your account closed.

Unfortunately that still won’t save you — you’ll have to repay the money or see the bill sent to collections. And you could end up with a big black mark on your ChexSystems report, which might make it difficult to open a new account in the future.

Banks are businesses, and it stands to reason that they want to keep customers who are easy to work with and throw up minimal red flags with their banking activities. Watch out for these moves, and you should be able to keep your banking relationships solid.

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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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