Money Management

Driving for a ride-hailing service like Uber or Lyft is a truly contemporary side hustle. Discover the best ways to make more money as a driver. 

A whopping 45% of Americans are working a side hustle this year, according to statistics collected by Zippia. While this data point says a great deal about this moment in our economy, it also suggests that finding a side hustle is easier than ever.

One popular option is driving for a ride-hailing service, such as Uber or Lyft. If you decide to take on one of these gigs, you’ll naturally be concerned about your earning potential. Good news! There are several ways you can increase your pay as a ride-hailing driver. Here are some to consider if you’re hoping for a higher checking account balance.

1. Improve riders’ experience to earn better tips (and higher ratings)

Uber and Lyft drivers keep 100% of all tips, so it’s worth focusing on creating the best ride experience possible for your customers. Personally, I tip on every ride I take, and I will kick in more money for a friendly driver or one who has nice amenities available in their car.

Consider offering bottled water, candy, or the use of a phone charger (it’s best to have charging cords for both iPhones and Android devices). You can also take music requests. And while some riders will prefer a quiet experience, if a passenger seems down to chat, you can take them up on it. Ask questions and share information about the area if your rider is visiting from out of town. Giving a better ride experience can lead to better tips, as well as a better rating for you as a driver — meaning more rides in the future.

2. Switch to food delivery around meal times

If you’re going to be in your car anyway, you can double-dip on your earnings opportunities by delivering food instead of people around meal times.

Uber in particular makes it easy for drivers to switch back and forth between offering Uber rides and delivering for Uber Eats, so this could be a good strategy if ride activity slows down around lunch or dinner time. And hey, you don’t have to make conversation with the takeout order you’re delivering!

3. Be available during busier times and in busier places

When a lot of people need rides, such as morning and afternoon rush hour, that’s the best time to make yourself available to accept those passengers. The great thing about driving for a ride-hailing service is that you can set your own hours and fit the work alongside another job, but if you want to boost your earnings, focusing on being on the road at busier times can go a long way.

Similarly, keep abreast of happenings in your city to know where and when you should be available to give rides — if there’s a huge concert at your city’s arena this weekend, be out and about before and after the show to get passengers to and from.

4. Take advantage of bonus opportunities

Uber and Lyft offer chances for drivers to earn more money in the form of bonuses and promotions.

For example, Uber drivers can earn more for completing a certain number of rides within a set period. Lyft drivers have access to “Bonus Zones,” which are areas where the pay for rides is higher due to demand. And both operate using surge pricing, so at certain times of high demand, rides cost passengers more, which boosts your earnings.

5. Optimize your downtime

While it might be tempting to just keep driving around if you’re not getting passengers, resist the urge.

Instead of putting more wear and tear on your car and using more gas, use a slow period to stop off for a bathroom break and a snack. And consider parking your car and waiting in an area adjacent to one where ride requests might come from, such as the airport.

6. Keep track of deductions

Finally, it’s important to remember that driving for Uber or Lyft makes you a 1099 contractor, so you’re responsible for paying quarterly estimated taxes — they will not be taken out of your pay. And you’re eligible for all kinds of deductions to lower your taxable income, such as for gas, car maintenance, cellphone service, and more.

It’s a good idea to invest in solid tax software for your business, and perhaps also consult with a tax professional to ensure you’re paying what you owe (and not a penny more).

7. Use the right small business credit card for gas and other expenses

Pay for the expenses you incur as a ride-hailing driver (gas, maintenance, and so on) with one of the best small business credit cards. This can help you earn cash back and other rewards on that spending. And yes, even if you drive for Uber for 10 hours a week, this counts as small business ownership to the point of allowing you to apply for one of these cards.

Driving for a ride-hailing service can be a good way to start a flexible side hustle, especially if you have a decent vehicle, like to drive, and enjoy making conversations with strangers. Keep these tips in mind to earn as much as you can.

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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 Uber Technologies. The Motley Fool has a disclosure policy.

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Doing a lot of Costco shopping this month? Read on for ways to lower your costs. 

The holidays are pretty wonderful, right? There’s festive music playing at the grocery store all the time, and homes tend to be adorned with lights and decorations that are enough to brighten any mood.

But while many people love the holidays, it’s hard to overlook the fact that they can be an enormously stressful period. If you’re trying to free up money for your savings account, you might resent all of the extra purchases you feel pressured into making.

The good news, though, is that doing a lot of your holiday shopping at Costco could help you steer clear of debt when you’re buying food, decor, and gifts. If you use these tricks, you might spend even less when you’re shopping at Costco.

1. Do your shopping in stores rather than online

Shopping on Costco.com can be convenient. You don’t have to battle crowds at the store, nor do you have to spend time on the road getting to and from your local warehouse club.

But one thing you should know about Costco.com is that while many items ship for free, they also cost more than they would if you were to buy them in person. So if you have access to a Costco location, it pays to head over there this month — even if that means having to deal with aisles that are a little more packed than you’d like them to be.

If you really can’t stand large crowds, aim to shop at off-peak times, such as during weekday evenings rather than on weekends. Getting to Costco as soon as it opens might also work to your benefit if you have flexible work hours.

2. Pay attention to the timing of different deals

Costco tends to run different promotions during the holiday season both online and in stores. But it’s important to pay attention to when items are on sale. Some products, for example, may currently be marked down only through early December, while others may be marked down for most of December.

Keep tabs on those dates so you can buy the things on your list at the lowest available prices. You may even want to keep a running tab if you can’t afford all of your purchases at once, but rather, need to spread them out over a few weeks.

3. Ask for price adjustments

Don’t you just hate it when you buy something at a seemingly low price only to see that price drop further a week or two later? At Costco, that’s not a problem, because you can ask for a price adjustment at customer service within 30 days of any purchase. This isn’t a rule that’s specific to the holiday season — it’s Costco’s general policy.

And if you bought something and have since tossed your receipt, worry not. A Costco customer service representative can look up your purchase based on your membership card number and refund you accordingly.

The fact that the holidays are so darn expensive can detract from the otherwise upbeat mood of the season. But if you shop at Costco strategically, you may find that your holiday purchases (and credit card bills) are more affordable than expected.

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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 positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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Money market accounts offer some sweet perks. Discover why you might want to explore this bank account option in the new year. 

You may have never thought about opening a money market account before — no shame! In case you don’t know, these accounts are sort of like a hybrid of savings and checking accounts. You can earn interest on the money you keep in the account, plus you can often access it via checks or a debit card.

Money market accounts sometimes come with a higher minimum deposit requirement to open than savings accounts (but not always), so they’re likely a better fit for you if you already have a chunk of money saved. They make a pretty good home for your emergency fund because of that easy access — if you’ve got a roof leak or need new tires for your car in a hurry, you don’t have to transfer money to a checking account to be able to pay your roofer or your auto mechanic.

As we inch closer to the end of 2023, opening a new bank account could be on your radar. And if it is, here’s why money market accounts are worth considering.

Rates are still high

Thanks to the actions of the Federal Reserve since 2022, we are currently saddled with an especially high federal funds rate (which is intended to fight inflation). This is the rate banks charge each other to send money back and forth, and while it isn’t directly the same as the rates consumers end up being charged to borrow money, it has a major impact. Consequently, APRs (annual percentage rates) are up on personal loans, credit cards, and other means of borrowing.

The silver lining here is that APYs (annual percentage yields) are also up. This means keeping money in the bank is more lucrative than usual — I earned over $1,000 on the money in my savings account in 2023, purely thanks to a higher APY. The rates on the best money market accounts are over 5% right now, so don’t miss out. These rates won’t last forever (the Federal Reserve will eventually reduce rates).

Money market accounts have neat features

Aside from getting to earn a generous return on your cash, money market accounts have other appealing perks you might want to take advantage of in the new year. For starters, like other deposit accounts, money market accounts fall under the umbrella of FDIC insurance. This is assuming you open one with an FDIC-insured bank (it’s easy to check whether your bank is; look it up on the FDIC’s BankFind Suite). If your bank goes under, up to $250,000 of your money will be returned to you ($500,000 if it’s a joint account).

That easy access to cash I mentioned above is another reason to open a money market account. Savings accounts are paying similarly high APYs right now, but most of them don’t come with an ATM or debit card, and definitely not paper checks. But a money market account might come with these options to access your money. What’s not to like? This ease of access is why money market accounts are a great place to keep your emergency fund, too.

New year, new bank account?

The start of a new year is a great time to sit down with your finances and make sure you’re getting all that you want out of the bank accounts you use. If you’ve never thought about a money market account before, 2024 could be a great year to open one.

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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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Identity theft and other types of fraud are a constant threat to your money. Learn what to do to keep your money safer. 

Few prospects are scarier than logging into your bank or credit card account and noticing something amiss — like a lot less money than should be in the account or a huge charge that you didn’t make. How did this happen?

Well, identity theft (when someone uses your personal or financial information without your consent) is a big culprit. Research from the U.S. Department of Justice found that U.S. victims of identity theft lost nearly $16.4 billion (that’s Carl Sagan billions) in 2021. The average money loss per victim was $1,160. Losing over $1,000 (or more) is an unattractive prospect, for sure. To avoid falling victim, here are five ways to tighten up your account security and keep your money safer.

1. Use strong passwords (and 2FA)

I seriously hope you’re not using the same password (or a handful of passwords) for all your various accounts — and if you are, this tip is for you. I understand that it’s hard to keep track of so many passwords; it’s honestly become a curse of modern life. What’s the solution? A password manager could help; be sure to vet any option you’re considering thoroughly to avoid putting your identity at risk.

Opt-in for two-factor authentication (2FA), too — this is when you have to confirm your identity by entering a code sent to your email or as a text message when you log into an account. It’ll provide an extra layer of protection.

2. Review your statements and account activity

It’s best practice to review your bank and credit card statements regularly, so you can spot any potential fraud or other problem sooner rather than later. I recommend signing into online banking and your credit card accounts at least once a week and scroll through your transactions. This is the easiest way to see if something is amiss. If it is, contact your bank or the card issuer ASAP.

3. Go paperless

Speaking of your bank and credit statements, are you receiving them in the mail in addition to having access to them online? Consider opting in to go paperless instead. This is good in a few different ways. First, you’ll be saving trees (always a good move). Second, you’ll receive fewer pieces of mail with sensitive personal information. If your mailbox is accessible to anyone without a key, you could be at risk of mail theft. If there’s no sensitive information to steal out of your box in the form of checking account and credit card statements, that’s extra protection for you.

4. Don’t bank on public wifi

This is a particularly easy way to mitigate some of your risk of identity theft. Accessing your financial accounts while you’re on unsecured wifi networks (like those you’ll find at airports, coffee shops, and other spaces with public access) can expose your information to criminals, so avoid it at all costs. Instead, wait until you’re on your home network (that is secured with a password, I hope!) or disconnect from wifi and use your cellphone’s data plan if you find yourself truly needing to access your accounts while out and about.

5. Keep tabs on your credit report

Finally, another extra step you can take to keep your money safe from scammers and thieves is to check up on your credit report every so often. You can access your credit report once weekly for free from AnnualCreditReport.com, but that’s perhaps a little excessive. It’s a good idea to check a few times a year, though — as well as whenever you suspect your data has been compromised or before you apply to borrow money (say, by getting a mortgage loan to buy a home or an auto loan to purchase a new car). If you spot an account that doesn’t belong to you on your report, you can raise the alarm with the company and the applicable credit bureau(s).

Identity theft statistics are always a scary read, but it’s important to stay informed and take the steps to keep your account data private. The money you save could be your own.

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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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Housing costs have ballooned recently. Here’s how to help manage them, no matter your budget. 

Housing is expensive right now, and it’s taking a toll on many people’s personal finances. Recent data from McKinsey shows members of Gen Z (those under 25) spend 37.3% of their income on housing.

That’s higher than the maximum 30% of income most experts recommend spending on housing, but it’s not the younger generation’s fault for overspending on housing. The average home price jumped 27.7% over the past three years and is now a staggering $431,000.

Rising interest rates have made housing even more unaffordable, which has sidelined many potential home buyers, especially first-time buyers.

Making matters worse for Gen Z is the fact that rent prices have also soared over the past few years. Data reported by The Wall Street Journal over the summer showed that urban rent prices rose 17.8% from the beginning of the pandemic and were up 25.8% in the suburbs.

In short, housing prices have soared, which has put pressure on many Americans’ finances, including Gen Z.

Why experts recommend spending no more than 30%

Chase Bank says that the recommendation for spending no more than 30% of your gross income on rent came from a government report in the 1980s, which showed that Americans who spent more than that percentage were “cost-burdened.”

Spending more than 30% of your income on rent can make it much more difficult to cover other bills like credit card payments, or to pay for essentials like food and utilities.

What to do if you need to spend more on housing

According to McKinsey, the median annual income for Gen Z is $38,325. This makes it difficult for many people to adhere to the 30% rule. So, while spending more than that on housing may not be a good idea, it may be unavoidable for some people. If you find yourself in this position, here are a few suggestions to potentially improve your situation.

Brush up on your negotiating skills

Some people don’t realize that your monthly rent can be negotiated. I’ve successfully negotiated my rent price lower (before I signed the contract) and negotiated my rental agreement to be on a month-to-month basis. You may not be able to lower your current rent, but before you renew your lease or when you move to your next rental, try your hand at negotiating before you sign on the dotted line.

Evaluate current expenses

Sifting through your current expenses to find things you can cut out is Budgeting 101, but it can be a quick way to find extra cash to help you cover rental payments. There may be one or two subscriptions you don’t need. Many budgeting apps automatically track costs and help you find expenses you can cut out.

Get creative to boost your income

There are a lot of great apps that can help you make a little extra income each month. I’ve used Fiverr to pick up additional freelance writing jobs, and there are a handful of great platforms for gig workers to help offset your housing costs, no matter what skills you have.

Gen Z may be feeling the pinch of housing costs the most right now, but many Americans are also affected. That’s why tracking your expenses using a budgeting app and finding ways to cut out expenses may be more important than ever. You may not be able to get your housing costs under 30% of your spending, but even making a few adjustments may put you in a better financial position.

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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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Got an extra car hanging around you don’t need anymore? Discover how to donate it to a qualified charitable organization. 

If you own a car that you’re trying to unload, you might consider trading it in toward the purchase of a new vehicle or selling it to a private party for cash. But if you want to do something incredibly generous and score a tax break in the process, donating your car to a charitable organization is another option.

Doing so could benefit the nonprofit in one of a few different ways. It could sell your vehicle and put the money earned toward operational expenses like staff salaries (the bulk of any nonprofit’s budget) or even use it to complete its mission. And you don’t have to worry about arranging for the sale of your car or continuing to pay for gas, maintenance, or auto insurance expenses. If this sounds good to you, let’s take a closer look at some tips for donating your car.

Ensure you don’t need your car

First and foremost, you should make sure you won’t miss the car after it’s gone! If you still need a vehicle for your everyday life (getting to work, running errands, perhaps the occasional road trip vacation), will you be able to purchase a new one without using your current car as a trade-in or selling it for cash for a down payment? Ideally, the car you’re donating truly is an unneeded second vehicle, or you live in a place with adequate public transportation so you’ll still be able to get around.

Giving up a car can mean cutting its expenses out of your budget, but it can also mean adding new ones — ensuring your checking account can support the cost of public transportation or car rentals, for example. In short, ensure that donating the car is actually the right move for you and your personal finances.

Pick a cause you believe in — and that’s legitimate

If you’re giving the gift of a car donation, it’s a good idea to thoroughly vet any potential organization ahead of time. Charity Navigator aggregates nonprofit organizations and provides information about their tax status, sustainability, and more, so you can check any charity you’re considering there.

You’ll also need to make sure you’ll actually get a break on your taxes for donating your car to a particular organization. It must be registered as a 501(c)(3) nonprofit; as Charity Navigator notes, there are different types of nonprofits, and a donation made to, say, a 501(c)(4) organization generally isn’t tax-deductible.

Finally, do your research to find an organization you agree with and want to support. It would be disappointing to donate your car and later find out that the charity has some unsavory views and by giving it your car, you’ve supported something you don’t believe in.

Do the paperwork

Once you’ve done your homework and found the right organization, it’s time for the actual donation. The paperwork part of this is extremely important — you don’t want to get in trouble with the IRS, so hang on to any documentation you receive from the charity during the process. It’s important to fully transfer your car’s title to the charity; if you don’t complete this step, you can be held liable if the car is used in a crime, or owe money for any parking tickets on the car. You’ll do this through your state. Be sure you get a receipt for the donation, and you may also receive a Form 1098-C (Contributions of Motor Vehicles, Boats, and Airplanes).

For determining the value of your tax deduction, you’ll most likely use the car’s fair market value (such as when the charity keeps your car, sells it at a discounted price, or it’s worth less than $500), but there are exceptions. If your car is worth more than $5,000 and the charity won’t be selling it for cash, you’ll need to have it appraised and get that appraisal in writing at least 60 days before you turn it over. The IRS has an excellent guide for vehicle donation you should peruse ahead of time.

And remember, you only qualify for a tax deduction if you itemize on your tax return. If instead, you take the standard deduction, your car donation will not count. And don’t forget to remove your license plates when you’re done with the car.

Be safe

Finally, keep your eyes and ears open when you’re going through the car donation process. Donating a car to charity is a kind action, but if you get linked up with the wrong charity (or perhaps “charity”), you could find yourself taken advantage of. Contrary to what the organization may tell you, you’re not allowed to take any tax deduction you want, for example. If something feels wrong or off, or sounds too good to be true, don’t go through with the donation. Find another more-deserving organization to donate your car to.

Donating your car can be a good way to unload a vehicle you no longer need and give to a worthy cause at the same time. Follow these tips to ensure you’re doing it the right way.

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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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