How many of these cash-guzzling missteps have you made lately? DimaBerlin / Shutterstock.com
Nobody enjoys the expense of filling up an empty gas tank these days. But you can easily make the situation much worse with a few simple — and common — money mistakes. Some of these under-the-radar missteps are especially harmful to your budget, especially if you make them repeatedly. And we’ve probably all made at least one of them at least a few times over, likely without realizing just how…
These famous folks say riches aren’t the key to their happiness. Everett Collection / Shutterstock.com
It’s tempting to believe that riches will make you happy. But some people who have crossed the $1 million mark — or even those with $1 billion — say it just isn’t so. While money undoubtedly makes some things in life easier, it can create complications in other ways. More to the point, money itself will not eliminate your problems or magically transform you from a Gloomy Gus to a Joyful Jane.
It’s important to have funds on hand for healthcare bills. Read on to see what the minimum amount is you should be saving.
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Medical bills have the potential to creep up on you at any time. And if you don’t have money saved for them, they could quickly become a source of stress — and debt.
It’s hard to narrow down an exact figure when it comes to saving for medical care. After all, you could have a year when you barely need to see the doctor. Or, you could have a year when you get into a car accident, need surgery, and then face several months of expensive physical therapy.
That’s why you should try to save as much for healthcare bills as possible. But there’s also a minimum amount you should aim to save when putting money aside for healthcare purposes.
It’s common for health insurance plans to impose a deductible on enrollees. Your deductible is the sum of money you’ll have to fork over before your insurer will start to pick up the tab for your care. However, certain services, like your annual physical or specific screenings, may not be subject to a deductible.
A recent survey by PolicyGenius found that 28% of respondents cannot afford the deductible their insurers impose. But you should do your best to save at least that much for medical bills.
It doesn’t mean you’ll only have to shell out your deductible in the course of a given year. But having that much money saved at least buys you some protection.
Let’s say your health plan has a $750 deductible. You might end up spending $900 throughout the year when you factor in copays and other costs. But at a minimum, you should aim to keep $750 in your savings account so you know you have your deductible covered. If you need a $2,000 surgery, your insurance might force you to pay $750 before it covers the rest.
You could opt to keep enough money in your savings account to cover your health insurance deductible and then some. But you may also want to consider putting that money into a flexible spending account (FSA) or health savings account (HSA). Both of these accounts are funded with pre-tax dollars.
So let’s say you want to save $750 because that’s your deductible. If you put that money into the bank, there’s no tax savings. If you put it into an HSA or FSA, the IRS won’t tax you on $750 of your income.
However, not everyone is eligible for an HSA. And you generally cannot have an HSA and an FSA at the same time.
To qualify for an HSA, your health plan must meet certain criteria. In 2024, you need a minimum deductible of $1,600 for self-only coverage or $3,200 for family coverage. Your plan’s out-of-pocket maximum also cannot exceed $8,050 for self-only coverage or $16,100 for family coverage.
In an ideal world, healthcare would be affordable for everyone. But alas, that’s just not the way the system works. For now, your best bet is to make sure you have savings on hand for medical costs at all times. And if you’re limited in what you can save, at least make sure you have enough to cover your deductible.
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Traveling is expensive this year, but there are a few things you can do to make it less costly. Read on to learn more.
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I just got back from a long trip for Thanksgiving, so I’m sitting out Christmas travel this year and letting family come to me. But much of America will be on the move. According to an IPX1031 survey, 62% of Americans are expected to travel this holiday season.
With the holidays already in full swing, here are some surprising statistics on how much we’re all spending to travel, how we’re saving money (or at least trying to), and a few tips to reduce your travel expenses.
Many people will spend serious cash this holiday season, as the average holiday travel budget will reach $2,005, according to IPX1031. What’s interesting about this amount is that it’s more than twice what Americans are expected to spend on gifts this year.
Some of that spending will come from shelling out additional cash for a direct flight to their destination — with nearly 75% of travelers doing so.
Of those traveling, 45% of them will use credit card travel points to help offset the cost, saving them an average of $515.
Travel credit cards are a popular option for people who travel frequently and want to earn rewards they can use towards the price of airline tickets, hotels, and rental cars.
Data from the travel booking app Hopper showed a couple of months ago that Christmas airfare prices were down 12% from last year. But that doesn’t mean prices are cheap — they’re still 29% more expensive than in 2019.
And prices are rising fast leading up to the holidays. According to Hopper, airfare ticket prices rose 9% from the week before, as of this writing, and are expected to increase even more between now and Christmas.
Holiday travel will likely dent your personal finances, but it doesn’t have to break the bank. There are a few steps you can take to help keep your travel expenses in line:
Book as early as you can: Admittedly, time is running out on this one. But booking your flight and hotel in advance, instead of waiting until the last minute, is one of the best ways to save travel costs. The closer you wait until the holidays to reserve a plane ticket or hotel room, the more likely you are to pay a higher price.Avoid extra fees: There’s no getting around some fees when traveling. But some may be avoidable, like checked baggage fees. Before paying for your plane ticket, look at the airline’s carry-on policy and how much it charges for a checked bag. You might save money by booking with an airline that charges less or forgo the checked bag by packing light.Eat out less: Pack some extra snacks to cut down on buying food while traveling. Also, consider buying some groceries to skip one or two meals out. My wife and I saved some money during our honeymoon with a trip to the local market and cooking a few dinners.
Traveling is expensive, but booking early and setting a vacation budget could help you reduce travel expenses this holiday season. And if you don’t score any travel deals, you can always pack sandwiches to save a few bucks.
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When was the last time you reviewed your credit card statements? It’s wise to do this every month for each card you have. Read on to find out why.
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If you use credit cards, whether occasionally or often, it’s wise to review your credit card statements. When life gets busy, you may forget to do this. But there are a few reasons you should take time each month to do a quick review. Let me explain why.
Reviewing your credit card statement allows you to confirm each charge. Everybody makes mistakes. After reviewing your statement, you could learn that your credit card issuer charged an incorrect fee or that you were billed the wrong amount for a transaction by a merchant. But you won’t know a mistake was made if you ignore your statement, resulting in wasted money.
There have been two situations where I discovered errors on my credit card statements that could have cost me money. Years ago, Capital One charged me a late fee when I had paid my bill by the due date. Luckily, I noticed the error. I reported it immediately, and the charge was removed.
A couple of weeks ago, I saw a charge to one of my Chase credit cards for a service I hadn’t used in several years. After noticing the charge, I contacted the company to note that I was no longer a customer. The company removed the charge after reviewing my account details.
When using credit cards, you should only charge what you can afford. If you overspend, you could rack up costly credit card debt. When you don’t pay your entire credit card bill in full and instead carry a balance, you’ll be charged credit card interest.
That’s why you should be alert to how much you spend each month. By reviewing your statements regularly, you’ll be more informed. You may find you’re making impulse purchases and can adjust your spending habits to avoid further overspending.
If you struggle with overspending, consider using one of the best budgeting apps. Tools like this make it easy to set limits and monitor your spending. With time and practice, you’ll get better at making purchase decisions that align with your budget and personal finance goals.
As an added note, it’s also not a bad idea to review your transactions throughout the month to ensure you’re on track. You can easily do this using your credit card’s website or mobile app.
Another thing to be on the lookout for is potential fraudulent charges. Unfortunately, credit card fraud is a legitimate concern, and it can impact anyone. The last thing you want to do is pay for a purchase you didn’t make because you forgot to review your transactions.
Many credit card companies have $0 fraud liability policies, so you won’t be on the hook for paying for fraudulent transactions. However, you should report fraud quickly. Ensure you look at your statements to spot and report fraudulent charges immediately.
There is another benefit to reviewing your credit card statements. Your credit card issuer could update your card benefits or account terms. You’ll want to know if the annual percentage rate (APR) is about to increase or if a credit card benefit you use will no longer be provided. Your credit card statement can clue you into changes like this, so you’re not in for a surprise later.
As you can see, there are many reasons to review your account statements. If you’ve enrolled in paperless billing, you can log into your online credit card account to view current and past statements. You’ll be a more informed consumer by reviewing these documents.
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You don’t need to budget to meet your near-term goals. Read on for a different approach.
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It’s that time of the year — a time when a lot of people are about to start jotting down their New Year’s resolutions in the hopes of bettering their financial situations.
There’s absolutely nothing wrong with setting financial goals for the new year. And yours might run the gamut from cutting your spending to finally opening that IRA so you can begin to save for retirement. But you might also hear along the way that if you really want to meet your near-term financial goals, budgeting is your ticket to doing so.
Let’s face it, though. Budgeting can be boring. And it might eat up more time than you want to give up. So if you just can’t stomach the idea of budgeting but you want to meet your 2024 goals, here are some things you can do instead.
You might hear that if your goal is to boost your savings account balance in 2024, you’ll need a budget to pull that off. Without a budget, you may not have the control over your spending that’s necessary to carve out money for savings.
But if you don’t want to follow a budget, you could set up an automatic transfer to your savings every month instead. That could mean setting $30, $50, or $100 (or whatever sum you can swing) to exit your checking account at the start of the month. But that way, you’re working toward your goal and are sending money into savings before you get a chance to spend it.
If you’re eager to meet your financial goals in 2024, then it’s important to avoid taking on any more debt — the exception being if your goal is to buy a home and you need to finance it with a mortgage. Any time you take on debt, whether in the form of a personal loan or a credit card balance, you lose money to interest. And if you’re paying interest, you’re not paying yourself that money.
Now, it’s true that following a budget might help you better manage your expenses so you’re less likely to resort to debt, or rack up a credit card balance you can’t pay in full by the end of the month. But if you instead decide to limit yourself making to cash and debit card purchases, you may find that you’re able to handle your bills and make the most of your paychecks.
If you bring home $3,000 a month after taxes and spend $2,700 of that on essential bills, then aiming to save $10,000 in 2024 probably isn’t realistic — unless, of course, you’re willing to pick up a side hustle to boost your income. And even if you stick to a budget religiously, that’s probably not going to do the trick in helping you amass $10,000 worth of savings when your financial situation is such that $3,600 may be the best you can do.
So rather than worry about budgeting, instead aim to set realistic financial goals given your situation. You might think it’s good to aim high. But if you set the bar too high, you might give up easily, and understandably so.
To be clear, budgeting may be a helpful thing for you to do in the new year. But it’s certainly not your only option. So if you can’t stand the idea of it, employ these tips instead.
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