Money Management

Don’t neglect free tools that can help you save on travel costs. Airfare search tools make it easier to score flight deals. Learn more about a popular one. 

Travel is a passion of mine. So, it probably comes as no surprise that my vacation savings fund is an expense I prioritize and include in my budget. Every two weeks, I stash away money to cover the cost of my next trip. But I also do what I can to minimize overspending on travel costs.

Since I like to travel internationally, flight costs are one of my major travel expenses. Booking flight deals allows me to stay on budget. Before booking plane tickets, I use a free tool to compare airfare prices.

Use airfare pricing tools to keep more money in your pocket

When planning a trip, you shouldn’t visit your favorite airline’s website until you’re ready to buy your tickets. Most airline websites lack powerful price comparison tools. You could spend much more than necessary if you purchase a ticket without doing thorough research.

For this reason, I like to use an airfare price comparison tool. One of my favorite tools is Google Flights, because it features a user-friendly interface and has many search filters. Searching for airfare and comparing prices across multiple airlines is a breeze when using this tool.

One of my favorite Google Flights features is the ability to compare airfare prices by date. After searching for my preferred travel dates, I can select the price graph or dates grid to determine whether flying on different dates could save me money on airfare costs.

These built-in features allow me to plan my vacation around when airfare costs are cheaper. Since I’m a freelancer, I have a more flexible schedule than the average person. Once I find a flight that suits my budget, I book directly with the airline.

If you plan to buy airfare for an upcoming trip, I encourage you to use airfare search tools so you get the best deal. You may find that adjusting your travel dates or flying with a different airline results in major savings. By getting a deal on airfare, you can stretch your vacation budget further and have more money to spend at your destination.

Don’t ignore this unique feature

I have another tip to share if you want to score cheap flight tickets. Instead of starting your airfare search with a destination in mind, you may want to compare prices for various destinations worldwide. Enter your departure city and choose “Anywhere” for your arrival.

Doing this lets you compare prices for multiple destinations to find the cheapest flights available for your preferred travel dates. If you have an adventurous spirit and love a good travel deal, this may help you see more of the world without spending all the cash in your bank account.

Get rewarded when you spend money on travel

Many of us use credit cards to pay for travel expenses. But consider which credit card you use before making a reservation. You’re missing out if you don’t have a card that earns rewards. You could earn points, miles, or cash back when you make purchases with your credit cards.

If you travel often, one of the best travel rewards credit cards could prove valuable. You could earn rewards and access credit card benefits that help to improve your travel experience. Before booking airfare for a trip, consider applying for one of these rewards credit cards.

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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. Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.

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You can’t control gas prices, but you can lower your gas bill this month with a few simple steps. Find out how. 

Energy prices have soared over the past few years, putting a lot of pressure on many Americans’ personal finances. About 60 million households use natural gas to heat their homes, and last year, prices jumped, partly because the gas supply was lower.

The U.S. Energy Information Administration says last year’s residential gas prices were the highest in 10 years. If you find your gas bill is creeping higher this winter, here are a few reasons why and what you can do to help lower it.

1. Commodity prices fluctuations

Constellation Energy, an electric and gas company, says that the main driver of high gas prices is the available gas supply. Many things can affect gas supply, including low production — which the U.S. had last year — major weather events, and even geopolitical disruption.

Gas companies manage some of these factors by purchasing future gas supplies at lower rates, which means gas used during the winter could have been purchased at lower prices many months earlier.

2. Old appliances

If you have older gas appliances, it’s possible they don’t work as efficiently as newer ones, and that could be costing you. If you can afford it, consider replacing an older dryer, water heater, or furnace to minimize gas usage.

Buying new appliances may not be possible for everyone, so another option is to perform regular maintenance on your gas furnace. Get it cleaned and inspected annually to keep it running efficiently, and make sure to replace the air filter regularly.

3. Lack of insulation and old windows

If your home is older, it may not have enough insulation to trap in the heat your furnace generates. This will cause your furnace to run longer, burning up more gas and causing your gas bill to climb higher.

Old windows can also contribute to a higher gas bill. The Department of Energy says heat loss from windows can contribute 25% to 30% of residential heating use.

4. The thermostat is set too high

This one seems obvious, but it can be easy to set the heat too high, especially at night when you’re not awake to know when the heat comes on.

I usually keep my heat set low at night, but recently I lowered it an extra degree by throwing an extra blanket on my bed. The savings rate varies, but you could save 1% to 3% on your energy bill by lowering the thermostat by just one degree.

How to lower your gas bill

The good news is that gas prices are expected to be cheaper this winter. The Wall Street Journal recently reported that the gas in storage is 5% higher right now than the five-year average.

This is helping to lower gas prices across the country and could result in heating bills being 21% lower this winter compared to last winter. But if you still find your bill is too high, here are some practical ways to lower your gas bill:

Lower your thermostat at nightReplace older appliancesService gas appliances regularlyTurn down your water heater tank temperature to 120 degreesReplace your furnace air filter at least once every three monthsMake sure heat can circulate by moving furniture away from vents

While the main driving force behind gas prices — supply and demand — is out of our control, taking a few steps above could help bring your monthly gas bill down. And if you need additional assistance, government programs could help with your monthly energy bills.

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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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Unlimited PTO sounds great, but it could cost you money and time off. Find out how unlimited time off really works and how to make the most of it. 

When you land a job with unlimited paid time off (PTO), you might expect to rack up more passport stamps. Or at the very least, you won’t have to worry about running out of sick days.

But here’s the truth about unlimited PTO policies: it’s often employers who reap the financial benefits, not employees. In fact, unlimited vacation time could end up costing you money and doesn’t always translate to more time off.

How unlimited PTO works

Unlimited paid time off (PTO) has become a coveted benefit. A 2019 MetLife study found that 72% of employees said an unlimited PTO policy was the workplace perk that interested them the most.

But as you’ve probably guessed, “unlimited” PTO doesn’t really mean unlimited. It means that there’s no official cap on the number of vacation and sick days you can take. Unofficially, though, many companies that tout this benefit still have a cap of three to six weeks.

In a lot of respects, unlimited PTO can look a lot like traditional PTO. You’ll probably have to request time off. Your time off will likely be tracked. And your manager can still deny your request, particularly if they’re concerned about performance or the team is overloaded with work.

One of the big issues with unlimited PTO is the lack of clarity. Let’s say you work for a company that gives employees 15 days of PTO each year. You know you’ve earned 15 days off and that your coworkers are entitled to the same amount. Your boss also knows that you’re owed this time.

But with unlimited PTO, you may not be sure how much time other people are taking. You may also not feel pressure to take time off because, hey, you can take it at any time. Several studies have found that employees with unlimited PTO wind up taking less time off than those with traditional PTO. And keep in mind that 46% of Americans who get traditional PTO are already leaving unused days on the table each year.

How unlimited PTO can cost you money

Another pitfall for employees happens when they leave their jobs. In many states, employers are required to pay workers for unused vacation time if they quit or are terminated. Even if state law doesn’t require employers to pay out unused time off, some companies state in their employment contracts that they’ll do so.

When a company is required to pay workers for unused vacation days or they’ve agreed to do so in a contract, the cash that would be needed to pay for those days off would be recorded on their balance sheet as a liability.

If you have unlimited vacation days, though, it’s unlikely you’ll get any payout should you get fired or quit your job. Even if you’ve worked the entire year without taking time off, there’s no obligation for your employer to pay you for the time you didn’t take. This has the potential to negatively impact your personal finances while between jobs. By some estimates, companies can wipe away billions of dollars of liabilities by simply switching to an unlimited PTO policy. That means more money in the company’s pocket, and less in yours.

Should you take a job with unlimited PTO?

Unlimited PTO can be a fabulous benefit if your company values work/life balance, you have a good relationship with your manager, and you’ll actually take advantage.

If you’re weighing a job offer with unlimited PTO, don’t assume you’ll be allowed to sail off to some tropical island with two days’ notice. Ask your recruiter how much time the average employee takes and how much time would be considered too much. Also ask about the process for requesting time off, including how much notice is required.

Should you accept the job, be sure you don’t snooze on this benefit. Just like the salary you negotiated, it’s part of your compensation package. Even if you’re planning for a longer vacation later on, try scheduling at least a couple of days off periodically throughout the year. Delay too long, and you may never get the time off you’ve worked so hard to earn.

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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.Robin Hartill, CFP® 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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The average credit card balance is $6,100. Find out how much that would cost at the average interest rate if you paid only the minimum on the debt. 

Credit cards allow you to earn rewards and take advantage of other cardholder benefits — but they can also be very expensive if you don’t pay off the balance in full and you find yourself getting hit with interest charges.

Just how much money could you end up sinking into your card payments? Let’s take a look, based on how much the typical American owes.

Here’s what your credit card interest could cost you

According to data from the Federal Reserve, the mean credit card balance among American families was $6,100 in 2022. The Federal Reserve also reports the average credit card APR was 21.19% as of August 2023.

The table below shows how much you could end up paying in interest depending on different repayment methods if you owed the average amount and were charged the average rate.

As you can see, if you just make minimum payments, paying off the average credit card balance would cost a truly astounding amount of money. You’d pay interest costs more than five times greater than the amount you currently owe and would send your creditor enough interest to buy a car. And you’d be stuck sending your card company money for longer than it would take to pay off the typical mortgage.

Of course, even if you make payments significantly higher than the minimum, sending in $400 a month, you’d still end up owing over $1,000 in added interest costs. The basic fact of the matter is, when you get into interest rates of 20% or higher, you are just going to end up spending a lot of money on financing charges even if you only owe the debt for a short time.

What can you do to reduce your interest costs?

The good news is, you aren’t doomed if you have credit card debt. In fact, you have lots of options. One of the simplest might be to simply ask your creditors if they’ll lower your rate. This doesn’t always work, but sometimes they will be willing to reduce your interest rate, perhaps by offering a special promotional offer. It’s worth a phone call to try.

Another option is to get really aggressive about getting that debt paid off. The more extra money you can throw at it, the faster you’ll pay down your balance and the lower your interest costs will be. Working a side job, using your tax refund, or selling stuff you don’t need could all help you find money to pay extra on a credit card balance.

Finally, you could look into dropping your rate by doing a balance transfer or getting a personal loan to pay off your cards. A balance transfer card is one offering a 0% promotional rate if you transfer a balance to it. Although there’s typically a 3% to 5% upfront balance transfer fee, paying that fee to get 12, 15, or even 21 months of 0% interest could be well worth it. And personal loans often have lower rates than cards do, so you could use one to pay off your current credit card debt to convert it to a lower rate as well.

The important thing is to choose one of these options and get to work on it, before you get stuck paying tens of thousands of dollars of interest if you carry the average credit card balance.

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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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Have money to put away for future use? Read on to see how to choose the right account. 

Many people have been struggling financially over the past couple of years due to rampant inflation. And as of October, living costs were still up 3.2% on an annual basis, as per that month’s Consumer Price Index. So if spare money has been tough to come by in your world, that’s totally understandable.

But what if you’re not spending down your paychecks month after month? What if you somehow have money left over consistently after all of your bills are paid?

If so, you’re in a really good place. But you’ll also want to make sure you’re finding the right home for your money. And you may be torn between a savings account and an IRA. To figure which account your money should go in, ask yourself these questions.

1. Do I want near-term access to my money?

When you put money into an IRA, you’re earmarking those funds for retirement (IRA actually stands for “individual retirement account”). As such, the IRS imposes rules on when you can access your funds.

If you take a withdrawal from an IRA prior to age 59 1/2, you’ll face a 10% penalty unless you qualify for a limited exception (for example, you can remove up to $10,000 from an IRA to purchase a first-time home). With a savings account, you can access your money whenever you want.

So if you’re hoping to give yourself a bigger cushion for when emergency expenses strike, or you’re saving up for a specific goal, like putting a down payment on a car purchase, then a savings account is probably your better bet. If you like the idea of setting money aside for retirement and being able to invest it, then an IRA is the account you should choose.

2. Do I want to save money on taxes, or potentially add to my taxes?

Paying taxes is a fact of life when you earn money. If you’re looking to shield some of your income from taxes, then opening to an IRA is the way to go. Contributions to an IRA are tax-free, so if you put $3,000 into one of these accounts, that’s $3,000 the IRS will not tax you on.

The money you put into a savings account will not help your tax situation, since your contributions won’t shield income from the IRS. In fact, quite the contrary — when you earn interest in a savings account, that’s considered taxable income. Not only that, but interest is taxed as ordinary income, which means it’s subject to the same rate as your regular paycheck.

Think about your recent tax returns. Have you been writing the IRS a check every April for the past few years? If so, then you may want to do your best to max out your IRA, or come as close to it as possible. In 2024, maxing out means contributing $7,000 if you’re under age 50, or $8,000 if you’re 50 or older.

3. Should I split my money between both account types?

There’s absolutely no need to choose between a savings account or an IRA when the option to fund both exists. See how you’re doing with emergency savings. If you have enough cash in the bank to cover a few months’ worth of bills but want a little extra protection, then you may want to stick some extra money into a savings account, but put the rest into an IRA and invest for the future. That way, you get some tax benefit.

It’s important to find the right home for the money you don’t need for bill-paying purposes. Both IRAs and savings accounts offer their share of perks. Run through these questions if you’re not sure where your money should go.

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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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