Money Management

May 2024 be the year you bring your finances into the 21st century. Learn why you should look to online banks in the new year. 

Here comes 2024! Perhaps you have big financial plans for the new year — I certainly do. But might I suggest that you add “evaluate my bank accounts” to that list? 2024 is going to be a great year to join an online bank, specifically.

Online banks exist entirely in cyberspace, which means you can save money on bank fees (these banks have fewer overhead costs) and enjoy the perks of 21st century technology. Plus, the best online banks are FDIC insured, just like the big banks. Here’s why else you should join an online bank in the new year.

1. APYs are still high

The last year and change has been a great time to have an online bank account. This is thanks to the 11 rate hikes implemented by the Federal Reserve. The federal funds rate doesn’t directly apply to consumer banking and credit products, but banks and lenders are influenced by it, so we’ve seen higher APRs on credit cards and loans — but we’ve also seen higher APYs on bank accounts. Right now, the best high-yield savings accounts are offering APYs of 4% or better, which is excellent motivation to save more money.

Personally, I have my calendar set to remind me of the day every month when my interest payment hits my savings account, because it is worth celebrating. Inflation has come down a lot as a result of the rate hikes (3.1% as of the last CPI report in December 2023; it peaked at 9.1% in June 2022). So if the Federal Reserve starts to bring the federal funds rate down as a result, we will also see those high APYs come down. Take advantage of them while you can by joining an online bank.

2. Mobile banking is a revolution

Online banks come with robust mobile banking apps, and mobile banking can seriously change your life. I have to laugh at myself when I check my bank balance from my exercise bike, or when I’m in the car coming back from a road trip, or literally any time. When I first opened a bank account as a teenager, I could view my balance from an ATM, or I could visit a bank branch during business hours and ask. Now, my money is at my fingertips whenever I want. Join an online bank, and this could be you, too.

In addition to viewing your balance, you can look to mobile bank apps for help with moving money, budgeting, creating savings goals (more on those below), or even viewing your credit score. If you still get paper checks, you can even deposit them! In personal finance, as in all things, knowledge is power — your online bank’s app can give you that and so much more.

3. A feature that can make saving more fun

Saving money can be fun — there, I said it. But seriously, it’s true. Whether you’re saving for unplanned bills and emergency expenses, or toward a major goal like buying a home, there’s an undeniable sense of accomplishment every time you see your balance tick up.

Online banks have loaded their account offerings with features that can help you lean into the joy of meeting your savings goals. Some of the best online savings accounts make it easier to save for separate targets within the same account, by offering account holders the opportunity to create “pockets,” “buckets,” or “vaults.”

This is hands down one of my favorite perks of using my online-only savings account, and since I’m saving money to buy a home, alongside putting away money to pay my freelance taxes, take various vacations, and even cover vet bills for my cats, it’s really come in handy. While it’s a bit silly, I really love getting encouraging emails every time I’ve passed a savings milestone — or met my goal. Join an online bank in 2024 to get the same chance to set individual savings goals within the same account.

If you’re still sticking with your old brick-and-mortar bank, it could be because you didn’t realize you had options — I get that. But now that you know more, I highly recommend opening an account with an online bank in the new year. A high-yield savings account is a great place to start, as it’ll likely come without fees of any kind and take you about five minutes to open. Then you can enjoy a higher APY on your money, as well as the other perks I discussed above. Happy new year — and happy new bank account to you!

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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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Cosigning for a personal loan means putting your credit on the line. Before you do that, consider these potential consequences. 

Personal loans can be a great way to borrow money, but you have to be qualified to get one. Most creditors want at least fair credit to approve someone to get a personal loan, and lenders also require proof of income to repay the debt.

Sometimes, when a borrower isn’t qualified to get a personal loan on their own, they’ll be given the opportunity to apply with a cosigner. If you have a decent credit score and make a good living, you may be asked to be that cosigner for a friend or loved one. If that happens to you, should you say yes and agree to help them borrow?

Here’s what cosigning means for you

Before you consider moving forward with cosigning for a personal loan, you need to understand what this could mean for you and your finances.

When you cosign, you apply with the primary borrower. The lender considers your credentials and may offer a loan it otherwise wouldn’t because you are vouching for the borrower. The problem is, you’re also committing yourself to being responsible for the debt.

The personal loan is going to show up on your credit report, so if you want to do some borrowing of your own, lenders are going to see that debt as yours and count it in your debt-to-income ratio. This is the percentage of your income you’re paying toward debt, and it’s used to determine if you’re allowed to borrow. If you owe too much, you may not be approved for a loan of your own.

If the primary borrower is late with a payment or stops paying entirely, you’ve got even bigger problems. The late payments are going to show up on your credit report, which is very bad news since even a single late payment could cause your good credit score to plummet by 110 points. If the loan goes into default or gets sent to collections, you can expect your score to suffer even more.

You’re also agreeing to be responsible for paying back the loan if the primary borrower doesn’t. So, not only could your credit score be damaged, but the lender could also come after you to try to get the money. You could get stuck covering the payments out of your checking account.

All in all, you’re taking on a ton of risk when you agree to cosign for a loan — and you need to make sure you’re comfortable with that before moving forward.

Is cosigning for a loan a good idea?

The sad reality is, when you cosign for a personal loan, you are putting your own finances on the line. And there’s no guarantee that will work out well for you.

The percentage of people who are 60 days delinquent on personal loans is 3.62%, which means most borrowers don’t fall far behind on payments. But, when someone needs a cosigner, it’s because the lender views them as being at high risk of defaulting. In other words, something in their financial record has raised a red flag with a lender — and lenders are experts at evaluating risk.

Now, if the person you’re cosigning for just hasn’t had a change to establish credit, that may not be a huge problem. But, if they don’t have enough money to pay the loan or if they have a bad credit score because of tons of past missed payments, there’s a very good chance they’ll get into trouble with the loan you’re agreeing to be responsible for.

Ultimately, you need to carefully consider two things: how much you trust the person you’re cosigning for and what will happen if they can’t pay. Unless you trust them a whole lot and you could afford to pay back the loan if things went wrong, you should absolutely say no to cosigning for someone else’s personal loan.

Our picks for the best personal loans

Our team of independent experts pored over the fine print to find the select personal loans that offer competitive rates and low fees. Get started by reviewing our picks for the best personal loans.

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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Solid money advice can come from unexpected places. Check out what this professional football player has to say about managing your finances. 

If you’re looking for advice on how to sack a quarterback, a defensive lineman in the NFL is going to be a great resource. However, you may be less likely to ask that player for tips on managing your personal finances. But if that lineman is Arik Armstead of the San Francisco 49ers, he’ll have you covered there, too.

Armstead and the NFL recently shared a video on Instagram of his top five financial tips, and as someone who edits articles on the topic every day, I believe his advice is really solid. Here’s what the veteran player had to say.

1. Pay off your credit card every month

Armstead begins by encouraging people to make sure they can pay down their credit card balance each month. This is excellent advice that anyone should keep in mind, no matter their bank account balance. While someone with a high salary can likely afford to charge more each month on a credit card, they should still only charge what they can pay off when the bill comes due.

Carrying credit card debt month to month can make anything you buy cost even more. That’s because you’ll be charged credit card interest on your balance. The average credit card interest rate is currently 27.80%, according to Forbes. Having to pay interest on your card balances makes the total bill harder to pay off. It’s a much safer bet to keep your credit card spending within a range you can afford.

2. Talk to others about your finances

Well, I certainly like this one (but maybe I’m biased thanks to my job!). It can be nerve wracking to talk to other people about money, but this is where the phrase “You don’t know what you don’t know” comes to mind. Maybe you don’t quite understand how retirement accounts work. Or perhaps you’re not sure whether to switch to a high-yield savings account. Whatever financial hangup you have, you should know you don’t have to find all the answers on your own.

Reach out to friends or family who seem to have a firm grasp on the topic you’re interested in. Or speak with a financial advisor who can give you professional, unbiased advice.

3. Create a monthly budget

Look, no one said every aspect of personal finances was going to be glamorous. Creating a budget may feel like homework, and it may even make you uncomfortable to dig into the details of where you may be overspending or decide where you may have to make cuts. But try to think of it more like a framework you’re setting up that can help guide you.

Budgeting doesn’t have to mean slashing all the fun expenses in your life — and truthfully, it shouldn’t, since doing so will likely make it impossible for you to stick to the plan. But if you’re able to take an honest look at the money you have coming in and going out and adjust how you’re spending your cash, you’ll set yourself up for success in the long run. There are plenty of ways to go about creating a budget, from a simple spreadsheet to helpful budgeting apps, so you can find a method that works for you.

4. Save for an emergency fund

This is more excellent advice from Armstead, and definitely something you’ll see repeated a lot here at The Ascent. It’s incredibly important to have an emergency fund, because you never know when a surprise expense will crop up, be it a car repair or an appliance replacement or a health issue.

Armstead specifically mentions having three months’ worth of expenses set aside. This aligns with what many financial experts recommend, since it gives you plenty of cushion if you happen to lose your job or have an ongoing period of higher bills. The right size emergency fund will vary for each person, so take a look at your own expenses and income to determine whether you might want to have more set aside. From there, you can work toward setting a little aside each month to increase your emergency savings.

5. Follow your own financial goals

I love that Armstead included this bit of advice in his video. It’s no use comparing your own situation to anyone else’s, because the details will always be different. As hard as it is to keep the blinders on, it’s important to focus on your own financial well-being and not anyone else’s.

This mindset can help stay focused on what you can control in your own life. While you may dream of the beach vacations and expensive dinners an acquaintance flaunts on social media, it’s more productive to figure out how to achieve your own goals instead. Maybe you can take online classes to increase your knowledge at work and land that promotion, or you can chip away at paying down debt so you can start saving for a down payment on a house down the line.

Armstead’s advice is gold

I’m sure there are some skeptics of a famous football player giving finance tips, but I do hope a lot of people take Armstead’s advice to heart. While he’s been a star player in the NFL for nine seasons and has a generous paycheck to show for it (which he’s actually broken down in detail in another video on his social media accounts), his personal finance tips are strong ones and can help a lot of people.

As a lifelong 49ers fan, I’m grateful to see a player taking the time to speak on this topic. Now I’m just hoping he’ll be posting another video at the end of this season on how to budget for a parade!

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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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Business class airfare is big business. Take a look at how it’s growing and how to save money on it. 

Sometimes, a face-to-face conversation is just better. Companies may understand this more than anyone else, so they spend loads of money every year sending employees to events and in-person meetings.

While the pandemic took the wind of business travel’s sails, it’s come back in full force recently — and airlines, hotels, and companies that issue travel credit cards are welcoming its return. Here are a few surprising statistics about business travel and how to save money when booking tickets.

1. Business class airfare typically costs $3,000 and up

Business class tickets often include luxury perks, including airport lounge access, free meals and drinks, premium seats, priority check-in, and more. But all those upgrades come at a steep price.

Typical business class tickets range between $3,000 to $5,000. Many people use travel credit cards to earn discounts or pay for airfare with airline miles to bring those costs down.

2. 75% of a flight’s profit can come from business class tickets

While companies are busy spending money on business travel, airlines are reaping the benefits. Business class tickets can account for up to three-quarters of a flight’s profits, according to data compiled by PwC.

That’s a huge percentage of a flight’s profits, and it’s even more impressive when you consider that just 12% of airline tickets are for business travelers.

3. Business class airfare may double your environmental impact

If you fly business class often, it may not be the best thing for the environment. Larger seats for business class result in fewer people overall on a plane, thus increasing the environmental impact of each flight.

The International Council on Clean Transportation says that travelers who opt for premium seating — first and business class seats — generate 2.6 to 4.3 times more carbon dioxide per kilometer than passengers in economy.

4. 71% of companies see a complete business travel rebound in 2024

Companies slowly brought back business travel following the pandemic, and many still aren’t sending employees on business trips as often as they used to.

However, recent data from Deloitte shows that 71% of U.S. companies expect to be back to full travel spending by the end of 2024.

5. 22% of business travel is done to build client relationships

Even with all the technology available to businesses and Zoom calls becoming a regular part of everyone’s work life, companies still emphasize building relationships in person.

Deloitte found that 22% of all business travel was done simply to build client relationships. The largest category, accounting for 25% of business travel, was for conferences, exhibits, and tradeshows.

Tips to save money on business class tickets

While business airfare isn’t likely to be cheap, there are a few tricks you can use to ensure you don’t overpay for your next ticket. Here are two tips to keep in mind:

Spend your miles: If you fly regularly, you’ve likely accumulated airline miles. Using these to lower the cost of your business class ticket is one of the best ways to save money. There are all kinds of excellent airline credit cards you can use to rack up miles.Upgrade your seat later: It’s possible to book your flight with an economy ticket and then upgrade to business class later. Some airlines will let you do this before the flight, and others may allow you to bid on a business class ticket later. Neither is guaranteed to get you a business class seat, but they can be an excellent way to save money.

And, of course, one of the best ways to save on airfare, whether you’re looking for business class perks or last-minute vacation deals, is to be flexible with your travel dates.

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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.Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Want an affordable winter vacation? It’s not too late! But you might need to be creative and embrace the cold. Learn how to find a cheap, fun winter vacation. 

Want to get away during the gloomy months of winter? Planning a winter vacation can help you recharge and refresh during the cold, dark times of the year. But going on a winter vacation doesn’t have to wreck your budget.

Let’s take a look at a few ideas for how to plan a winter vacation that can give you fantastic travel experiences at an affordable price.

Choose a cold weather city

When most people plan a winter vacation, they want to go to a warm-weather destination like Florida, California, or Mexico. Lots of people want to go to the beach, or Disney World, or other sunny destinations. But because everyone wants to go somewhere warm in winter, airfares, hotels, and tourist experiences get much more expensive.

You can save big money on your winter vacation by embracing the cold! Go to a snowy city — though probably not a ski resort, because those places also get crowded and expensive during winter. But a fun city with great restaurants, live music, and culture can be a perfect winter destination.

Last year, my family and I took a winter vacation to Montréal, Canada. The flights were cheap, and we got a great deal on our Airbnb and restaurant meals because the U.S. dollar was so strong against the Canadian dollar. And we loved Montréal!

The weather in Canada was not much colder or darker than what we would’ve experienced at home in the American Midwest, and we had a marvelous time exploring a fascinating, multilingual, international city. We ate great Vietnamese fusion food and bagels and poutine, we watched a Montréal Canadiens hockey game, we visited museums and went to the Symphony. Even though the weather was cold and the sun went down early, this was one of the happiest vacations we’ve ever had.

Remember: Even if you’re on winter vacation in a cold weather city, you can spend most of your time indoors, enjoying delicious food and warm beverages.

Visit a rural area or small town

America is full of less-visited places in small towns and rural areas that are often overlooked by tourists. What if you could plan a winter vacation to get you off the beaten path? Here are a few ideas for winter vacations in rural America:

State parks: Many state parks offer cabin rentals and winter activities like hiking, cross-country skiing or snowshoeing. Nearby hotels or Airbnbs are likely to be much cheaper than you’d pay in a big city (or at a crowded national park).Unique country lodging: What if you could stay at a rustic cabin in a forest, or a mountain chalet, or a riverside cottage? There are many ways to have a fun experience closer to nature, while still having modern comforts like wifi.Farmstays: Have you ever wanted to experience life on a farm? Try doing an agritourism farmstay, where you can wake up in the countryside, help feed farm animals, and experience farm-to-table cuisine.Small town tourism: There are many small towns like Galena, Illinois (a popular weekend destination for people in my home state) that offer historic buildings, great restaurants, fun shopping experiences, and friendly people who would love to share their communities with you.

Don’t assume that great winter vacations can only be found in the usual beachfront destinations or big cities. You can have a wonderful winter vacation at lots of different points on the map if you’re willing to be curious and open-minded.

Use search tools to find “anywhere” travel ideas

Don’t know where you want to go for your vacation? Want to find the best possible travel deals, even for places you’ve never heard of? If you’re flexible and want to find an affordable winter vacation, check out these travel search tools. You can use these search tools to search for “Anywhere,” without a specific destination:

Airbnb: In the search box for “Where/Search destinations,” you can click “I’m flexible” to see a wide range of locations and lodging options. You can also choose unique accommodations, like cabins, tree houses, farms, boats, and “OMG!” which offer truly one-of-a-kind places to stay, like a Conestoga Wagon “glamping” resort, or a refurbished 1920s gas station.Google Flights: In the search box where it says “Where to,” you can click “Anywhere” and see a wide range of airfares for trips all over the world. This is a great way to get ideas for new places to visit on your winter vacation, and you might even find some surprisingly cheap airfares.Kayak: This travel site lets you click “Explore” to find the best winter vacation travel deals. Start by entering your home city’s airport, and then choosing a month of the year when you want to travel. Kayak will quickly show you a wide range of affordable airfares to multiple destinations. You can also choose the types of winter vacation you want to take, like “Beach,” “City,” “Family,” “Outdoorsy,” and more.

Use travel credit cards for rewards and special offers

If you want to save money on a winter vacation and get special travel experiences, you might want to consider applying for a new travel credit card. The best travel credit cards offer generous sign-up bonuses, such as 75,000 frequent flyer miles or 60,000 bonus points, that can help make your winter vacation more affordable.

Especially if your winter vacation involves booking international flights and several nights of lodging for your family, getting a travel credit card or airline credit card could be a good idea. Paying for a big winter vacation with an airline credit card can help you get elite airline status. Maybe you’ll get so many reward points or bonus miles that your winter vacation will help pay for itself!

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

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