Money Management

Donating a car could save you quite a bit on your taxes this year. Find out what you have to do to claim your deduction. 

Donating a car is a great way to do good and get an old vehicle off your hands. It can also earn you a nice tax break. But there are a few things you need to do in order to get it.

Make sure you’ve taken the following steps before you file your tax return for 2023, or else you could find yourself in hot water with the IRS.

Make sure you give to a tax-exempt organization

Giving your car away to someone else doesn’t automatically entitle you to a tax deduction. You need to give to a qualifying tax-exempt organization for it to count. You can find one of these by using the IRS’s Tax-Exempt Organization Search tool.

If you give your vehicle to an organization that’s not listed on that site, you unfortunately won’t qualify for a tax deduction.

Keep records

You don’t have to submit proof of your charitable donation with your tax return, but you need to have it available in case the IRS comes calling. If you cannot produce proof in the form of a written acknowledgement from the charity, the government may disallow the deduction.

Your proof should include at least your name, the vehicle identification number (VIN), the organization you gave it to, and the date of the donation, signed by the organization. If you received anything in exchange for your donation, record this as well. You should note that your tax deduction is reduced by the value of any items you received in return for your donation.

Find out what the charity plans to do with the car

Some charities choose to hold onto the vehicle donation to use for their own purposes. In this case, your tax deduction would be worth the fair market value of the vehicle. But sometimes, charities sell the vehicle and use the proceeds to fund their mission.

In this case, your tax deduction is typically worth the lesser of the fair market value or the amount the charity sold the vehicle for. If it sold the vehicle for $500 or less, your deduction is the lesser of $500 or the vehicle’s fair market value.

Itemize your deductions

You can only earn charitable donation tax deductions if you itemize deductions for the year. This could be the right way to go if you qualify for a number of tax deductions, but it’s not the best move for most people.

If you choose not to itemize deductions, you claim the standard deduction for your tax filing status. Here’s a look at the standard deductions for 2023.

If you don’t feel the total of all your tax deductions will exceed your standard deduction for the year, you might be better off not claiming a tax break for your vehicle donation.

Fill out Form 8283

You have to fill out IRS Form 8283 and submit it with your tax return if you decide to pursue a tax deduction of more than $500 for your vehicle donation. You’ll also need a professional appraisal of the vehicle’s value if your deduction is greater than $5,000.

Tax forms can be intimidating, but most online tax software can walk you through them. All you have to do is answer some questions about your donation.

If you run into any problems or you have questions about how to claim your car donation tax break, reach out to a tax professional. They can give you personalized advice on your situation, so you don’t put yourself at risk of audit-worthy mistakes.

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Travel can be costly, but your next trip doesn’t have to break the bank. Keep reading to learn how being flexible on your destination could save you money. 

Travel is a major “fun” purchase I prioritize when I budget how to spend my money. As a frequent traveler, I know how expensive travel costs can quickly add up if you’re not careful. But one hack has helped me reduce my spending: Being an adventurous traveler helps me keep more money in my bank account as I explore more of the world. Find out how.

How I prepare financially before taking a trip

When traveling, I spend much of my time exploring new-to-me international destinations. As you might imagine, airfare and other travel costs can be expensive. Therefore, I like to be prepared financially before departing for my trip so I don’t come home and feel regret.

I set money aside in my savings account throughout the year to pay for future trips. I treat my travel fund savings like a must-pay bill and stash extra cash away every two weeks. Doing this helps ease the strain when paying my credit card bill after returning from vacation.

While saving up before taking a vacation is a great personal finance strategy, it doesn’t hurt to look for ways to get a better deal on travel expenses. The more money you save, the more you can travel. My favorite way to save money on travel is by booking airfare deals.

Flight deals help me decide where I travel

While I sometimes have a preferred destination in mind, that’s often not the case. Instead, I keep alert to airfare deals throughout the year. These deals serve as inspiration. There have been many instances where a flight deal encouraged me to visit somewhere new.

The best deal I’ve probably ever booked was a $221 roundtrip flight to Santiago, Chile. I booked the deal and started planning my trip. I had an incredible 10-day adventure exploring multiple parts of the country with a friend of mine. That airfare deal helped make the trip more possible because I had a meager travel budget at that time in my life.

Being an adventurous traveler has many benefits. Since you’re likely more open to new experiences, you may get to see and do more than the average traveler. But it can also help you save money on travel costs, which could make it possible to see more of the world.

Could this strategy help you save money on travel?

This strategy could work for you if you love a good deal. But it’s worth noting that this strategy isn’t ideal for everyone. If you have specific destinations you’re looking to travel to or prefer to revisit the same place year after year, that’s OK. Do what is comfortable and best for you.

This “hack” works best for someone with a more flexible schedule. Typically, airfare deals are valid during set times of the year or on specific days. If you have limited flexibility with your vacation schedule, you’ll likely find fewer deals that meet your scheduling needs.

How to find airfare deals

If you have flexibility, investing in an airfare deal subscription could help you score cheap flights. Here are several flight deal services to explore. Paid services like this have saved me thousands of dollars.

You can use tools like Google Flights to find affordable flights if you have a less flexible schedule. You can search “Anywhere” as the destination to find the cheapest destinations to fly to based on your desired travel dates. I’ve also used this tool to find cheap flights.

Travel savings opportunities can make a difference

As you plan your next vacation, look for ways to save money. If you feel daring, why not visit somewhere new? If a fantastic flight deal to a new destination is available, you could save hundreds of dollars on airfare costs. This could help you stretch your vacation budget further.

Travel can be expensive, but there are opportunities to save. One final tip: Consider paying with a travel credit card to earn valuable rewards when making travel bookings. Check out our list of the best travel rewards credit cards to learn more about how to earn travel rewards.

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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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Target is a great place to find deals on holiday gifts of all kinds. Check out a few ideas for the women who are important to you. 

I think nearly everyone has a favorite big-box in-person retailer where you can buy just about everything. For some people, it’s Costco. For others, Walmart makes the biggest impact on their checking account balance. For me, I’d say it’s Target. In fact, I have to be careful about visiting Target stores in person, as I often fall prey to the great deals in the housewares section.

If you’re working your way through your holiday shopping list, Target is worth a stop (or a browser tab, if you’re shopping online). It has some especially nice offerings for women’s gifts. Whether you’re shopping for your mom, wife, sister, or best friend, here are seven lovely gifts for a special woman in your life. (Note: prices are accurate at the time of writing, and might be different in store versus online.)

1. Adorable slippers

I wear slippers year-round (yes, I have summer-specific ones), because having cozy feet is one of the greatest things in life. But trying to buy them in a brick-and-mortar store can be difficult outside of fall and winter. Target has tons of slipper and non-skid sock options right now, and you may want to consider these Stars Above shearling-lined booties. They come in five different festive colors, but personally, I’m a sucker for that green. They’ll fit anyone who wears women’s sizes 4 to 10, and they’re going for just $13 on Target’s website.

2. A festive nail polish set

There’s nothing like a good manicure or pedicure to put you in a festive mood. If your BFF appreciates self-care nights in, give this Essie holiday nail polish set a look. Essie is one of the better brands available at drugstores and big-box stores, and its polishes are a personal favorite of mine. This set includes four colors: No Place Like Chrome, Blanc, Summit of Style, and Off Tropic (who gets paid to name nail polish colors, anyway?). It can be yours for $14.99.

3. A tracker that works with iPhones

If your girlfriend has an iPhone and lives to travel, an Apple AirTag might be just the thing to keep her from losing track of her checked luggage. I just got some of these for future air travel, and I’m excited to give them a whirl. At Target, you can buy them for $29.99. It’s worth noting that you can get a slightly cheaper price on AirTags by buying from Apple, but since Target sells so many other great gifts (not to mention groceries!), you might prefer to do more of your shopping in one place to simplify your life, or because you have a credit card you like to use at Target specifically.

4. A LEGO bonsai tree that no black thumb can kill

Maybe the special woman in your life loves plants but just isn’t great at keeping them alive. If she also enjoys little art projects, the LEGO Icons Bonsai Tree kit will be a well-appreciated gift indeed. It comes together in 878 pieces and would make a nice Sunday afternoon couples activity. You can get it for $39.99.

5. An effective electric toothbrush

Better oral hygiene is truly the gift that keeps on giving. This Oral-B Pro Crossaction electric toothbrush would make a fabulous present for a woman who smiles often. It has 3D cleaning action to remove more plaque at the gumline, and is currently on sale for $39.99.

6. A sleek electric kettle

Does your mom drink a lot of hot tea? If she’s still using a microwave to boil the water, you’ve got to clue her in to a better way. I highly recommend an electric kettle, and you can pick up a Hamilton Beach model from Target for $24.99. It’s an inexpensive kitchen appliance, but it can be a game-changer for a tea aficionado.

7. A cozy blanket

Remember how I said above that Target is great for housewares? Well, you can find some excellent holiday gift deals on them. A new blanket is always appreciated, and I can’t think of any woman I know who wouldn’t be pleased to receive one. Take this lovely Casaluna chunky knit blanket. It comes in two sizes, and the full/queen size is priced at $59 (the king is $11 more). It comes in multiple tasteful colors; I’m especially taken with the rose and dark teal shades.

To make the most of your Target purchases, I recommend choosing a great rewards card, either for Target itself or for maximizing points/cash back. After you buy all these gifts, you could be closer to a great gift for yourself paid for with cash back, or even a vacation made cheaper with accumulated credit card points!

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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 positions in and recommends Apple, Costco Wholesale, Target, and Walmart. The Motley Fool has a disclosure policy.

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You’ve budgeted wisely and have extra cash flowing in. Where should you put it? Find out here. 

If you’ve budgeted wisely and are spending less than you make, that’s an excellent step toward financial health. It means you’ll have extra money to save every month, and this can help set you up for a secure financial future, as well as provide peace of mind in case anything unexpected happens.

However, one important question you need to answer is, “Where should I put my extra cash?” Is it best to contribute to emergency savings, or should retirement be the bigger priority? Or should some of your money go into a standard brokerage account or a rainy-day savings account? What about college savings for your kids, if applicable?

Unfortunately, there isn’t a perfect answer for everyone, and it depends on your current financial situation, your goals, and other factors.

Where should you put your money?

Generally speaking, there are six main options when it comes to allocating your extra cash. And in general order of highest priority to lowest, here’s how I typically rank them:

Emergency savingsRetirement fundCollege savingsChecking accountStandard brokerage accountRainy-day savings

Of course, this order doesn’t apply to everyone. As an example, if you already have six months’ worth of expenses saved in an emergency fund but have fallen behind in retirement savings, you can swap the order of those two. And clearly, if you don’t have children, college savings isn’t a factor.

With that in mind, here are some general thoughts that should help you prioritize these for yourself.

Emergency savings

A six-month emergency fund like most financial planners recommend can be an excellent financial tool, even though it can seem like an intimidating amount of money to set aside. But you don’t need to get there right away.

If you don’t have at least $1,000 set aside to cover unexpected expenses, that should probably be your first priority. If you have a $1,000 emergency fund, you’ll be prepared for most unexpected expenses. It’s still a good idea to keep contributing after you’ve reached $1,000, but you can also save for other goals at the same time after you reach that threshold.

Retirement savings

Most financial planners suggest saving about 10% of your income for retirement, not including any matching contributions your employer makes on your behalf. If you already contribute to a 401(k) or similar plan through payroll deductions, you might not need to manually put as much into retirement as someone who is self-employed or doesn’t have an employer’s plan. But after forming a base for your emergency fund, this should be the next highest priority.

Having said that, it’s worth noting that just because something is a priority doesn’t mean you should put all of your extra money into it. Unless you’re really behind when it comes to retirement savings, there’s nothing wrong with allocating your savings for emergencies, retirement, college, etc.

College savings

If you have kids and you want to help pay for their college, a 529 savings plan could be an excellent tool. But most financial planners (including myself) say it should come after retirement savings on the priority ladder. The reason — making sure your own retirement is secure will prevent you from becoming a financial burden on your children later in life, which can be far worse than them having to contribute to their own education.

Other financial choices

You can also choose to let some of your extra money accumulate in your checking account, and if you don’t have much of a cushion in there to cover your day-to-day expenses, that could be a smart idea. There’s also the option of saving for the long term in a standard (taxable) brokerage account, and if you are already on track with retirement savings, this can be a smart idea. And for shorter-term goals, setting money aside in a non-emergency high-yield savings account can be a great way to do it while generating some interest income.

The bottom line

There’s no one-size-fits-all answer when it comes to the best places for your extra cash. It depends on what areas you are already financially healthy, and what areas could use the most work. One important takeaway is that there aren’t really any bad ways to save money within these six main options, but smart allocation of your extra cash can go a long way toward setting you up for long-term financial success.

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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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Do you need to save more money? Here’s what I’m doing, and the steps you can take to boost your own savings. 

About a year ago, my wife and I made it a priority to get rid of most of our non-mortgage debt. And a big portion of that involved our auto loans. Both of us bought our vehicles in late 2019 and used five-year auto loans — we would have paid more aggressively from the start, but this was when auto loan interest rates were in the 3% range.

So, in early 2023 we each had about two years left on our auto loans and decided to aggressively pay them off with the goal of being auto-debt free within a year. I’m happy to report that we just finished paying my wife’s car off last month, and we are on track to have mine paid off by the end of January. The goal is to have two relatively new cars that we own free and clear, so we (ideally) won’t have to worry about any major vehicle expenses for a while.

My plan is to redirect the money I was paying toward the cars (a little more than $1,000 per month between them) into my savings. Specifically, I plan to use it to help max out my retirement savings, and add any excess to my regular brokerage account.

How you can find extra money to save

Paying off your car loan quickly isn’t practical for everyone. And I’m sure that many readers have already paid for their cars, which is excellent and makes you a bit more financially healthy than most.

However, the main point is that by eliminating any recurring expense, you can add that money to your savings account instead. Maybe you have a gym membership that you’re paying for every month, even though you only use it occasionally and prefer jogging outside. Maybe you’re paying for magazine subscriptions that you almost never read. Or maybe you’re paying for additional features in your cable or mobile phone bills that you could do without.

Maybe you have other debts like credit cards and personal loans where you can accelerate repayment to free up more money to save.

How to find extra money to save

One exercise that I like to do toward the end of each year is to print out the last few months of my bank and credit card statements. First, look for any recurring payments that are auto-debiting from your accounts and ask yourself if these are necessary (like your electric bill), completely unnecessary (like an unused membership), or costs you could potentially eliminate (like subscriptions for magazines you like to read but don’t need). You might be surprised at how much you can free up in this manner.

Taking it a step further, when looking through your statements, highlight any non-recurring expense that wasn’t a necessary expense. Now, I’m not saying that you need to eliminate every one of these types of expenses — I like going out to eat as much as anyone. But doing this can draw attention to areas where you might be spending more than you realize.

The bottom line

By focusing on debt reduction, elimination of unnecessary recurring payments, and keeping a close eye on your discretionary spending, you might be surprised at how much you can add to your savings. Even seemingly small recurring savings additions can make a big difference when it comes to your emergency fund and retirement savings over time.

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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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