Money Management

December is a popular time to donate to nonprofits. Keep reading to learn how doing so can benefit you in multiple ways. 

Like sand through the hourglass, 2023 is drifting away before our very eyes. The good news is that it’s not too late to donate to a good cause. According to data collected by Nonprofits Source, a whopping 30% of charitable donations are made during December — and 10% are made in the last three days of the year!

I spent more than a decade working for nonprofit organizations that were heavily dependent on charitable giving, and I promise you, writing that check or inputting your credit card information online (or even just dropping some cash into a donation box) really, really helps. Here’s why you should carve out some money to donate before 2023 is in the rearview mirror.

1. You might get a tax break

This is a very pragmatic reason to make a charitable donation, and it certainly shouldn’t be taken lightly. Paying taxes likely isn’t your favorite thing in the world (despite its importance), and the chance to pay less by lowering your taxable income is certainly appealing. There are a few caveats we should discuss, however.

You’ll only be able to write off a charitable donation on your tax return if you itemize your deductions — if you take the standard deduction, you won’t save anything (besides the feeling of doing good for others). The standard deduction is $13,850 for single tax filers for the 2023 tax year. If your itemized deductions amount to less than this, taking the standard deduction is the better move.

You also need to donate to an eligible tax-exempt organization — the IRS has a great search tool to help you ensure your chosen charity meets the qualifications.

2. Your employer might match your donation

It’s not unheard of for employers to contribute to charitable causes in support of their employees. It might be more likely if you work for a big company that already has a history of giving back to the community — or you might even be able to start a new giving program at your workplace thanks to your own generosity and initiative. Ask your boss if the company might be willing to match the money donated by employees. You might also see higher engagement rates from staff members as a result.

As an example, a former employer of mine offered to match donations to the local chapter of the Boys and Girls Club in that city, and this was an impetus for me to donate money. It feels even better to give back if you know your gift will be multiplied.

3. It could help you finish your holiday gift list

While you might not have the most peaceful holiday if you spend your entire Christmas gift budget for your young children on a charitable donation, making a donation in someone else’s name can be a lovely and thoughtful gesture, especially if accompanied by a nice card.

This is especially true if you know your gift recipient well and know what causes are important to them. I’m a huge animal lover, and I’d be pleased and honored if someone donated to the Humane Society or ASPCA in my name.

4. It’s a kind thing to do and it feels good

The last reason to donate to a cause before the end of the year is because doing something nice for other people can be its own reward. You know that wonderful warm feeling you get from being kind to your fellow humans? That’s not just your imagination — it’s backed by science.

According to the American Psychological Association, there have been several studies that found that behaving generously toward others (such as by donating your time or money to a cause) results in more interactions between the parts of our brains that feel pleasure and process social interactions.

So why not lean into that feeling? You’ve got a little bit of 2023 left, so if you have a charity or nonprofit in mind (may I suggest your favorite small local museum or historical society?) that you support, make a donation. Or use a site like Charity Navigator to find an organization that matches your values and is a legitimate operation. Doing so can save you money on taxes (thereby improving your personal finances) and help you carry that holiday feeling into the new year.

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It’s hard to be a first-time buyer when home prices and mortgage rates are elevated. Read on for ways you can overcome those challenges. 

Even though mortgages weren’t as expensive to sign in 2022 as they were in 2023, 2022 was still a tough year for home buyers. That year, inflation was truly soaring, making it harder for buyers to save more for their down payments.

Also, inventory was sorely lacking. And because mortgage rates remained fairly competitive at least during the first part of the year, bidding wars were still pretty prevalent, as buyers wanted to snag those great rates while they were still available.

It’s therefore not so surprising to learn that only 26% of home purchases in 2022 were made by first-time buyers, according to a report by the National Association of Realtors. In 2022, the percentage of home buyers who were first-timers reached its lowest share since 1981. For context, historically, in a given year, the average percentage of home purchases made by first-time buyers is 38%.

The housing market has cooled off a bit since 2022. But it’s still tough for first-time buyers to break in. After all, they don’t have the same leeway as existing homeowners who may have a lot of equity in their homes they can tap. But there are steps you can take as a first-time buyer to give yourself an edge.

1. Get pre-approved for a mortgage

When you conduct a home search with a pre-approval letter in hand, it tells sellers that a mortgage lender has already vetted your finances and determined that you’re in a reasonably strong position to purchase a home. That’s something sellers want to see.

Let’s say a seller accepts a buyer’s offer, only that buyer then is unable to secure a mortgage. That puts the seller back at square one, and at a disadvantage, because the longer a given home sits on the market, the more negotiating power buyers get. But if you go in with mortgage pre-approval, a seller may be eager to accept an offer you make.

2. Be flexible with your closing date

If you’re a first-time buyer, it means you’re not trying to buy a home and sell one at the same time. As such, you may have more flexibility as to when you move into your new home. And if you’re able to work around your seller’s preferred timeline, it might give you an edge.

Let’s say you’re looking at homes this month and find one that meets your needs, only the seller doesn’t want to close until June because they want their children to finish up the school year. If you’re currently in a month-to-month rental, you might be able to make that work. And if so, you might get your offer accepted.

3. Make a competitive offer from the start

With mortgage rates being where they are today, many buyers are not coming in and offering $50,000 over the asking price the way they did back in 2021 and even 2022. But because inventory is limited, bidding wars are still an issue.

To avoid that, try to make a strong offer from the start. If you see a great home listed for $399,999 and you can afford to pay $10,000 more, you may want to just offer that initially.

If you do, a seller might accept that price on the spot rather than wait and see if better offers come in for them to entertain. And if you can avoid a bidding war, you might end up with a lower price even after going after the listing price.

Buying a home can definitely be a challenge if you’re doing it for the first time. But these tactics could help give you an edge in a stubbornly tough market.

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Repairing a Tesla is pricey, and insurance companies sometimes refuse to do so. Here are some tips to lower your auto insurance with an EV. 

Getting any vehicle repaired after an accident is a huge pain. You’re left without your car for an extended time, and you might have to wait for your insurance company to approve the work.

If you own an electric vehicle (EV), getting it repaired is an even worse experience. EVs in general cost an average of $269 more to repair than gas-powered vehicles. And if your EV happens to be a Tesla, you can expect to pay a staggering $1,347 more for your repair bill compared to the average gas-powered vehicle, according to data from Mitchell.

And those high Tesla repair costs are making car insurance companies nervous.

Why Teslas are more expensive to repair

Electric vehicles, in general, are more expensive to repair than traditional internal combustion engine vehicles. And Tesla’s designs and technologies may be adding to the expense, including:

Battery designs that require complete replacement if damaged.Multiple underlying changes to the same vehicle model (like the Model 3) have resulted in different replacement parts for the same vehicle.Advanced features, like Tesla’s Autopilot, involve expensive technology.

If all of that weren’t bad enough, EV repairs are more complicated than traditional vehicles and often require more parts to complete the repair. All of this adds up, making Tesla’s models exceptionally pricey to fix.

Insurance companies are taking notice

A recent Reuters report showed that some auto insurance companies were choosing to write off Tesla vehicles at a loss after they were involved in an accident. Many of the vehicles even had low mileage, but the cost to repair them was so high it made more financial sense to salvage the car instead of paying for repairs.

In some instances, the cost to insure a Tesla could be up to 48% higher than the national average for car insurance prices. This means Tesla owners should probably spend extra time shopping around for the best car insurance quotes.

Here are a few things to mind as you look for insurance:

Improve your credit score: Many car insurance companies will check your credit history before writing or renewing your policy. If your credit score is good, the amount you pay for insurance could be lower.Bundle your insurance: You may save on your auto insurance by bundling it with renters or home insurance from the same provider.Adjust your deductible: Changing your deductible means you could spend more if you get in an accident, but pay less for your monthly insurance premiums. The important part is to strike a balance between lowering your premiums without taking on too much financial responsibility if your EV needs repairs.Find an insurer that offers EV discounts: Some insurance companies, including Travelers, offer discounts for hybrid and electric vehicles.Consider usage-based insurance: Sometimes, you can lower your insurance costs by allowing your insurance to track your driving habits. You may want to consider this route if you’re a safe driver and drive fewer miles than the average person (say, if you work from home). Progressive says customers who save money with its usage-based insurance save $231 annually.

If you’re in the market for a Tesla or EV right now, it also pays to get an estimate from your insurance company before you buy the vehicle. This will give you a better idea of the actual cost of owning a specific model and could influence the type of EV you buy.

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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 positions in and recommends Tesla. The Motley Fool recommends Progressive. The Motley Fool has a disclosure policy.

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Want to put snow and ice in your rearview mirror? Read on for a few ways to find and book cheaper travel this winter. 

We tend to associate the word “vacation” with summer, but taking a trip in winter can be a great way to escape from your humdrum routine. And if you end up traveling somewhere warmer than home, you can also get a break from winter weather in the process.

Here are a few tools to try if you’re hoping to book a winter getaway.

1. A flexible schedule

This might not be a tool in the traditional sense, but I promise you that having the flexibility to book travel based on when hotel rooms, flights, and rental cars are cheaper can go a long way toward keeping your costs down.

I’ve long been a fan of winter travel, and I relish the chance to take a trip away from home during the cold months. Becoming a freelancer has helped with this, as I no longer need to worry about burning vacation time (what vacation time, ha?) to travel. Conversely, I can also write and edit from anywhere, so I usually end up working at least a little on any trip I take.

If you work remotely or otherwise have flexibility in your work schedule, it’ll be much easier to fit winter travel into your vacation budget. According to Thrifty Traveler, Tuesdays, Wednesdays, and Saturdays are often the cheapest days to fly. If you can start your winter getaway by leaving on a Tuesday or Wednesday, and fly home the following Saturday, you might be able to knock money off your credit card tab.

2. Hotel status

Can you pull off a cheaper winter trip without any travel affiliations of any kind? Absolutely you can. But if you already have a relationship with a given travel brand, you might have more options open to you, especially if you’ve attained a higher membership level by having a hotel credit card or using that brand often.

You can use points or miles for a given hotel chain to spend less in actual dollars on your trip (if not cover the cost entirely). You can also take advantage of sweet perks that non-members will pay more for.

For example, if you’re a Diamond-level Hilton Honors member, you’re guaranteed a stay if you book at least 48 hours in advance (even if the hotel is full), and you’ll be upgraded to a better room assignment if one is available, at no extra cost to you. If you have a winter anniversary or birthday, this can make your stay even more special for no additional money.

3. Airfare search tools

If you’re hoping to fly somewhere for your winter getaway, the internet has tools aplenty that can help you save on ticket costs. My colleague Natasha Etzel swears by Google Flights, and she’s on to something. Google Flights is easy to use and lets you compare prices by date. You get access to a variety of search fields, too — so you can see how much money you might save by driving a little farther and leaving from the airport in a nearby city rather than your home airport, for example.

You can also leave your destination open, set search parameters (such as the month of travel and how long you want to be gone), and see what Google Flights recommends. I haven’t quite come around to letting fate — or Google — decide where I travel (maybe someday!), but if you’ve got a more adventurous spirit than I do, it’s worth trying this out to find a cheaper ticket this winter.

4. The right travel credit card

You have options for travel credit cards beyond just those associated with a particular airline or hotel brand. Some excellent all-around cards pay a high rate of points or miles on travel purchases — and even higher ones if you book through their proprietary travel portals. The Chase Ultimate Rewards Travel Portal is a great example of this. I have a bucket list vacation coming up later this winter, and I was able to cover a good chunk of the ticket cost by booking through Chase and using accumulated points.

In addition to the more tangible benefits, like points to save you money on travel, you might also have access to perks like rental car insurance, airport lounge access, free checked bags, and more. And if you opened a new card before the holiday shopping bonanza, you might have managed to earn a welcome bonus. You can turn that infusion of points or miles into cheaper travel between now and the end of winter.

If you can be flexible and take advantage of a few of these essential tools, cheaper winter travel plans can be yours. One final tip: Don’t assume that you must take a tropical getaway. While escaping the snow, ice, and lack of daylight that sometimes comes with winter here in the U.S. can be nice, even just a weekend road trip to a neighboring state to enjoy fine dining, museum visits, and a hotel stay can also be a great change of scenery to look forward to.

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

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It’s natural to wonder whether you’re saving enough for retirement. Read on to see how prepared you are if you’re 40 with $40,000 socked away. 

Social media has turned a lot of us into more curious versions of ourselves. With people posting so much information about themselves online, it’s easy enough to determine where your neighbor went out to dinner last night or what car your old college roommate decided to upgrade to.

But one thing people don’t tend to post about is the amount of money they have saved for retirement. Clearly, that’s just a no from a social media standpoint. And also, some people might be embarrassed by how little long-term savings they have.

If you’re 40 years old, it means you probably still have more working years ahead of you than behind you. But you may be wondering how well you’re doing on the retirement savings front if you have $40,000 tucked away in your IRA or 401(k). And while there’s data that could give you an answer, you should know that the steps you take in the coming years could play more of a role in determining what sort of nest egg you ultimately retire with.

How the average 40-something is doing

Data from Northwestern Mutual finds that the average person in their 40s has $77,400 saved for retirement. So at first glance, with a $40,000 balance, you might assume you’re way behind.

However, it’s worth noting that the aforementioned data breaks down savings balances by decade, not specific age. Someone who’s 48 years old, for example, has had an extra eight years to save and invest. So it’s not necessarily fair to compare your balance to the balance of someone almost a decade your senior.

But let’s say it is the case that the typical 40-year-old has a lot more retirement savings than you. That’s not something to feel bad about automatically.

Maybe you had more financial challenges to overcome than other people did. Maybe you had to pay for college completely on your own. Maybe you had children at a young age and have been paying for their care ever since.

Rather than bemoan the fact that your savings balance may be smaller than that of the typical person your age, instead, recognize that $40,000 is a great start. And if you pledge to build on that balance going forward, you might still end up with a sizable nest egg by the time retirement arrives.

Keep on saving and investing

While $40,000 is a good start on the road to building a nest egg, you probably want to retire with a lot more money than that. But it may be more than possible if you commit to saving and investing in a brokerage account consistently for the remainder of your career.

Let’s say you’re able to save $400 a month between now and age 65, and that your IRA or 401(k) delivers an average annual 10% return, which is consistent with the stock market’s average over the past 50 years. When we add that to your initial $40,000 balance, you’re looking at a total of $905,000. That’s not shabby at all.

In fact, it might help you to know that in the aforementioned survey, the average person in their 60s had a retirement savings balance of $112,500. So if you’re able to accumulate $905,000, you’ll be way ahead of the game.

That said, rather than focusing on how your savings balance compares to other people’s, a better bet is to focus on yourself. There will always be people in your life who have more money than you do. The key is to spend your energy doing the best you can for your own future, and worry less about how your balance stacks up broadly.

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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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