Money Management

Heating a home can be expensive. Check out some ways to save on your bills this winter. 

When you rent a home, you may be able to sign a lease that has your landlord paying for your heat. When you own a home, however, those heating bills are on you to cover. And they have the potential to get very expensive.

If you’re looking to lower your heating costs this winter, here are a few tips worth employing.

1. Get your heating system serviced

The cost of a maintenance appointment for your heating system will hinge on different factors, including where you live and what type of system you have. But spending a few hundred dollars to have your system serviced could potentially save you twice that much or more if tweaks are made that allow your system to work more efficiently.

Plus, during a maintenance appointment, a technician can be on the lookout for issues with your heating system. If they spot a problem and you’re able to fix it before your heat stops working completely, you’ll potentially spare yourself an emergency house call — and the massive credit card charge that might come with it.

2. Change your filter regularly

If you have a very efficient heating system, you might get away with only changing your filter once at the start of the season. But for an older unit, or one that runs continuously for months on end, you may need to change your filter every six to eight weeks. Doing so could lead to better performance out of your heating system — and lower utility bills.

The cost of a filter will depend on the specific system you have and what you’re looking for. But you might be able to get away with spending $20 or less for a replacement filter. And that $20 replacement during the middle of the winter might end up saving you several times that much via more efficient heating.

3. Let the sunshine in

If your home tends to get a lot of natural light, why not use it to help your interior stay warm? The simple act of opening blinds and curtains could allow you to harness the power of the sun to keep your home toasty. And the less you have to run your heat, the less you’re looking at spending.

Of course, you’ll want to do the opposite during the summer to save money on air conditioning costs — keep those drapes closed to block out the sun.

4. Make sure your vents aren’t blocked

If your home has a forced air heating setup, all it takes are a few blocked vents to prevent warm air from getting to where it needs to go. As a result, you may be inclined to keep pumping up the heat, thereby racking up higher bills.

An easy way to lower your costs is to walk around your home and make sure none of your vents are being blocked by things like furniture or kids’ toys. A simple cleanup could have you spending less.

All of these tactics could result in lower heating bills for you. But if you still need help covering your costs, reach out to your utility company and see if there are programs in place for struggling homeowners.

You can also see if your state offers utility assistance programs, or if there’s a federal program you qualify for. LIHEAP, for example, provides help with heating and cooling bills for about 6.7 million households by partnering with local agencies to offer assistance. Don’t hesitate to explore options like these if the above tricks still leave you struggling.

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It makes sense to pay my auto insurance in one fell swoop. But it also requires careful planning. Read on to learn more. 

When you buy a car, it’s not just your auto loan payments you have to worry about. You also have to cover the cost of maintenance on your vehicle. And depending on your living situation, you might have to pay to park your vehicle overnight.

There’s also auto insurance to think about. Forbes Advisor says the average annual cost of car insurance for U.S. drivers is $2,150 for full coverage. Your premiums might be more or less expensive depending on factors that include your ZIP code and your driving record.

Either way, car insurance is a big expense, and you may be eager to do what you can to save money on it. One tactic that might work is paying your annual premium in one fell swoop.

My car insurer, for example, gives me the option to pay my insurance premium monthly. But if I pay the entire premium upfront, I get a small discount.

Now to be fair, that discount is fairly modest — it’s only 3% or so of my total tab. But still, a discount is a discount, and I’ll take it.

However, you should know that paying my auto insurance all at once requires careful planning. And if you’re going to go this route, you’ll need to make sure you’re setting money aside for that giant bill month after month.

A strategic approach to paying my car insurance

Many of the bills I pay every month are set up to get debited from my bank account automatically. Take my mortgage payment, for example. I have it set to go out at the same time every month so I don’t forget about it. At the same time, because I’m paying that bill every month, I don’t have to save up for a single large bill.

It’s different with my auto insurance. For that, I have to make sure I’m setting money aside every month so that when that giant bill arrives, I have the cash.

To do this, I take the cost of my annual premium, divide it by 12, and then set up an automatic transfer to my savings account so that 1/12 of my premium gets moved over every month. This way, I don’t have to scramble when that bill comes in.

If you’re looking to pay your auto insurance premium all at once, I suggest doing the same so you don’t run into a situation where your premium is due but you don’t have the money. Being late could result in penalties. In a more extreme situation, you might lose your coverage altogether, leaving you to have to shop around for a new policy.

A good approach to any once-a-year expense

Any time you have a bill or expense that doesn’t recur monthly, but rather, rolls around once a year, it’s a good idea to set up automatic transfers so you’re saving for it consistently. For example, you might pay your life insurance once a year, too. So if that premium costs you $600, you’d want to make sure you’re saving $50 a month for it along the way.

You can, and should, take the same approach to the holiday season. Rather than scramble in December, figure out a budget ahead of time, divide it by 12, and then send the money into your savings each month so you’re not forced to land in debt when the time comes to buy your gifts.

Paying my auto insurance all at once makes sense because even though I’m not saving a ton of money, I’m saving some nonetheless. But this system works well because I’m allocating money for that premium every month during the year — and not putting myself in a tight spot the month that bill comes due.

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Your net worth is a good thing to know. Read on to see why there are other aspects of your finances you may want to focus on more, though. 

It may or may not shock you to learn that the average American has a net worth of $1,063,700, according to data from the Federal Reserve. Median net worth, however, is only $192,900. And when you have a discrepancy like that, it tells us that the median is far more representative of the typical American than the average.

You may be curious to know what your net worth is. And your ultimate goal should be to see your net worth increase. But while net worth is a good thing to keep track of, there are other financial factors you should focus on more.

What’s net worth, anyway?

If you’re not exactly sure what net worth refers to, it’s the difference between your total assets and your total debts. So as a very basic example, let’s say you have $50,000 in savings and own a home worth $450,000. That gives you $500,000 in assets. However, if you owe $300,000 on your mortgage and have no other debt, that leaves you with a net worth of $200,000.

Net worth is something you can certainly aim to track — and increase — over time. But should you check your net worth daily, weekly, or monthly? That’s probably not a good use of your time.

Your net worth can fluctuate frequently based on different factors. Take your $450,000 home, for example. It may be worth $460,000 in a month from now based on market value. And a month or two later, it might fall to $440,000.

Similarly, let’s say you have a lot of assets tied up in investments like stocks. Your portfolio might be worth $190,000 one day only to fall to $186,000 just a day later. And then, a few days after that, it might be worth $192,000.

That’s why you really don’t want to spend too much time actively tracking your net worth. And if you’re super interested in how you’re doing, for example, then you may be able to find an app that calculates that number for you. But rather than focus on your net worth, other aspects of your financial life probably deserve more of your immediate attention.

What you should pay close attention to

It’s okay to track your net worth in a low-key sort of way. But the aspects of your finances that you should be tracking more closely are your:

Emergency savingsLong-term savingsRevolving debt (credit card balances)

You’ll want to make sure your emergency fund has enough money to cover a minimum of three months’ worth of essential expenses. If you take a withdrawal, keep tabs on how well you’re doing in putting that money back.

And your IRA or 401(k) should ideally be growing over time, too. Pay attention to your investments in your account, and aim to increase your savings rate as your earnings pick up.

Now, these aren’t accounts you have to check daily. But it’s a good idea to make a consistent effort to keep them funded. And part of that might boil down to the choices you make every day, like whether to spend on extras versus bank the money instead.

You should also track what you owe on your credit cards to get your debt paid off as quickly as possible. Again, mindful spending could be essential to knocking out a credit card balance. So could picking up work on the side of your main job if your schedule allows for it.

It’s natural to be curious about your net worth. But rather than spend all of your energy focusing on it, pay attention to these super important aspects of your financial life.

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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.Maurie Backman 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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Make your New Year’s resolutions count with these specific goals. Learn how all of them could set you up for a more stable 2024 — and future. 

A lot of people are starting to make their New Year’s resolutions. And some of yours may be financial in nature.

Now, some will argue that setting financial goals puts undue pressure on people. But you can think about it in a more positive light — setting goals gives you something concrete to work toward. And it gives you potential wins to celebrate. With that in mind, here are three financial resolutions that you may want to commit to for 2024.

1. Building an emergency fund

Recent data from SecureSave finds that 63% of workers today don’t have enough cash reserves to cover an unplanned $500 expense. If you’re in that boat, then perhaps your first and foremost resolution for the new year should be to build your own emergency fund.

How do you do that? Well, one of the most effective ways to build your savings account balance is to increase your income. For many people, that’s an easier thing to do than cutting back on spending.

You, of course, could choose the method that’s easier for you. But sometimes, when you pledge to cut your spending, extra expenses just creep up on you. If you commit to a side hustle, you can use that added income to build some cash reserves so you’re protected against unplanned bills in the future.

2. Paying off costly credit cards

If you owe money on credit cards, you’re in good company. U.S. credit card balances reached a whopping $995 billion as of the third quarter of this year, according to data from TransUnion.

But you’re probably aware that the longer you carry that debt, the more money you’re apt to lose to interest. So it pays to make paying off credit cards a major financial goal for 2024. And the way to go about that is similar to building that emergency fund — you’ll probably need to either work more or spend less. Or, do a combination of both.

That said, one tactic to help you pay off credit card debt is to do a balance transfer. This could mean moving your debt over to a new card with a lower interest rate, or a 0% rate to start out with. Just pay attention to the fees and other costs you might incur when going this route to make certain it’s worth it.

3. Contributing to a retirement account

If you have no plans to retire any time within the next few decades, then you might think retirement savings isn’t worth focusing on in 2024. After all, why fixate on that when you could instead work toward a more near-term goal? But the sooner you begin saving and investing for retirement, the more opportunity you have to build up a nice nest egg.

The stock market’s average annual return, as measured by the S&P 500 index, has been 10% over the past 50 years. So if you put $5,000 into an IRA or other retirement account in 2024 and earn that same return for 40 years, that $5,000 will grow into over $226,000 — really.

Whether you’re someone who normally makes New Year’s resolutions or not, these are three important financial tasks worth tackling in 2024. If you push yourself to accomplish these goals, you’ll really have something awesome to celebrate by the time 2025 rolls around.

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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.
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Stressing about money is no fun. Read on for ways to change your financial picture for the better in the new year. 

Worrying about money isn’t uncommon. But it’s also not fun. A good 70% of Americans say they’re stressed about their personal finances these days, according to a recent CNBC survey. And it’s hard to function when you’re constantly anxious about money matters.

If you want to break that cycle in 2024, here are some moves worth making.

1. Boost your emergency fund

Recent data from SecureSave shows that 63% of Americans are not equipped to cover a $500 unplanned emergency expense. If you’re consistently stressed about money, having an emergency fund — or a larger one than what you have now — could take some of that weight off.

Ideally, you should aim to sock away enough money in a savings account to cover three months of essential bills at a minimum. That could be enough to cover you in the event of a period of unemployment. However, if you’re part of the 63% of Americans who don’t have $500 on hand, it’s obviously going to take some time to get to that point.

If so, breathe, and set realistic expectations for yourself. If you’re able to add $100 to your savings every month in 2024, you’ll have that much larger of a safety net. But the key is to set yourself up with emergency cash so you’re prepared when unplanned bills arise.

2. Put your savings on autopilot

The fact that you’re consistently contributing money to your savings might help you feel better about your finances. To that end, try to put the process on autopilot. Set up a monthly transfer so money leaves your checking account each month and lands in savings.

And don’t worry — that amount doesn’t have to be huge. If you can only swing $25 a month for now, do that. But that way, you at least have some money being added to your savings on a regular basis.

If you happen to be all set with emergency savings, you could set up an automatic transfer to an IRA instead. That way, you’ll regularly be funding a retirement plan that could be crucial to your financial health later in life.

3. Reduce one of your larger expenses if possible

It’s easy to feel squeezed financially when your paycheck seems to just disappear month after month. One thing that might help take the pressure off is reducing one of your larger expenses. That should give you more leeway to spend on other things that might come up, whether it’s the need to shell out $20 for cold medicine or a party invite that has you spending $15 to bring the host a gift or bottle of wine.

You may be able to reduce the amount of rent you’re paying by getting a roommate. Or you may be able to trade in your car for a less expensive model. Look at your options, because cutting back on one large bill might make it possible to enjoy a lot of smaller luxuries that lend to a better quality of life.

It’s natural to have money-related worries. But if you make these moves, you might end up having fewer of them in 2024.

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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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A high-yield savings account could help you grow your wealth in 2024. Here are three benefits of opening one. 

A new year symbolizes a fresh start for most people, and many see it as a time to get serious about making financial changes to their lives. This might include cutting back spending or saving more for the future. But you may also want to evaluate the financial accounts you’re using and upgrade any that are no longer working for you.

If you don’t have a high-yield savings account yet, this is a great time to get one. Below, we’ll look at three benefits to owning one.

1. You could earn more interest on your cash

The annual percentage yield (APY) is the most obvious perk a high-yield savings account offers. Rates fluctuate over time, but right now, the best savings account interest rates hover around 4.50%. Meanwhile, plenty of brick-and-mortar banks are still sticking with a 0.01% interest rate that will pay you a few pennies a year at most.

How much you earn depends on your interest rate and your balance, but it’s possible to earn hundreds per year by switching to a high-yield account. You’d earn $45 in a year with a $1,000 initial balance and a 4.50% APY. If you’d stuck with a traditional bank account that has a 0.01% APY, you’d only earn $0.10 on your $1,000 after a year.

2. You could ditch maintenance fees

Most high-yield savings accounts are available through online banks, and they typically don’t charge monthly maintenance fees. This is because online banks don’t have large branch networks to maintain. This reduces their overhead costs significantly, and they’re able to pass that savings along to you in the form of higher rates and lower fees.

Brick-and-mortar banks usually can’t afford to completely skip maintenance fees, though many enable you to waive them if you meet certain requirements. You don’t have to settle for that, though. If you’re still paying to own your savings account, it’s a great time to think about a switch.

3. You could earn a bonus

Bank account bonuses are cash bonuses often worth hundreds of dollars that institutions give to new customers after they’ve completed a number of qualifying activities within a set time frame. These bonuses are more common with checking accounts, but there are some for savings accounts, too.

You shouldn’t choose a high-yield savings account just because it offers a bonus, though. After you earn it, you’re still going to be stuck with the account. But if you like its APY and other features, a sign-up bonus could be the cherry on top.

How to find the right high-yield savings account for you

APY is probably going to be your biggest concern when choosing a high-yield savings account, but there’s no need to scour the furthest reaches of the internet to find the highest possible rate. That’ll probably just be wasted time, because the bank with the highest rate can change at a moment’s notice. Instead, look for a bank account that offers a competitive rate along with other features that are important to you.

Review its fee schedule to make sure there aren’t any maintenance fees or hidden charges you have to worry about. For example, if you plan to make a lot of ATM withdrawals, you don’t want a bank that charges ATM fees.

Speaking of ATM access, not all savings accounts have this, so it’s crucial to seek out a high-yield savings account that does if you hope to withdraw cash directly. Otherwise, you’ll have to transfer the money to a checking account first before you can take it out.

Customer service is key, too. You may not call your bank that often, but if you have trouble accessing your online account or moving your money around, you may have to. You’ll have a much better experience if your bank has helpful staff and decent customer service hours.

And whatever you do, verify that the account you’re interested in has FDIC insurance. Banks usually state this in the footer of their websites. This ensures you won’t lose your savings if the bank goes under.

Compare a few savings account offers before settling on one. You may not find any that check all your boxes, and that’s OK. Look for the one that has most of the features you’re looking for and then apply when you’re ready.

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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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