Money Management

Have some spare cash sitting around this month? Read on to see where it should go. 

Recent data from SecureSave has found that 63% of Americans don’t have so much as an extra $500 on hand for emergency expenses. So a lot of people don’t have to worry about where to put their spare money because, well, they don’t really have any.

If you’re in a different boat, consider yourself fortunate. But it’s important to find the right home for your cash. Here are four options worth considering this month.

1. A savings account

The beauty of putting money into a savings account is that you get lots of upside without risk. Savings accounts are paying generously these days — it’s one good thing to come out of the Federal Reserve’s numerous interest rate hikes. And if you keep your money at an FDIC-insured institution and don’t deposit more than $250,000, every penny of that principal will be protected in case your bank goes under.

If you want to earmark your spare money for unplanned expenses, then a savings account is your best bet. Compare interest rates online to see which bank has the best offer.

2. A certificate of deposit (CD)

Like savings account rates, CD rates are favorable right now. So if you have cash available for non-emergency purposes, you might as well get paid more interest on it.

Not only can you snag a higher interest rate on your money by choosing a CD over a savings account, but that higher rate is guaranteed for the duration of your CD. With a savings account, your interest rate could fall with market conditions.

Granted, it could also rise. But given where CD rates are sitting these days, locking in more interest makes sense when you’re confident you won’t need your money for a while.

3. A health savings account (HSA)

Healthcare is an expense you might face perpetually. If your health insurance plan is compatible with an HSA, it pays to fund one. You’ll get a tax break on your contributions, and you’ll get to enjoy tax-free growth on invested HSA funds as well as tax-free withdrawals for qualified medical expenses.

This year, you need to have a health plan with a minimum individual deductible of $1,500 to qualify for an HSA, or a family deductible of $3,000. In 2024, these limits will rise to $1,600 and $3,200, respectively.

4. An individual retirement account (IRA)

You’ll need money to be able to retire comfortably, so why not snag a tax break in the course of saving it? An IRA lets you do just that. Contributions go in tax-free, and you then get to enjoy tax-deferred growth on your IRA investments. This means you won’t be taxed every year, but rather, when the time comes to take withdrawals.

Right now, IRAs max out at $6,500 for savers under age 50 and $7,500 for those 50 and over. Next year, these limits are increasing by $500.

As the end of 2023 draws near, it’s important to do what you can to close out the year on a positive financial note. Finding the right place to put your money could help you approach 2024 with more confidence, and that’s exactly what you deserve.

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The year is almost over. Read on to see how certain smart choices in the next six weeks could help you start 2024 in a better place financially. 

Can you believe that in just a matter of weeks, 2023 will be a thing of the past? It’s certainly been an interesting year for a lot of people. We’ve seen inflation cool (albeit modestly), mortgage rates soar, and borrowing costs rise on the heels of the Federal Reserve’s interest rate hikes.

And that’s just on a broad economic level. Your personal financial situation may or may not have improved in 2023 depending on how things shook out for you.

But either way, you may be eager to kick off 2024 in a strong place financially. These smart decisions over the next few weeks could allow you to do just that.

1. Have a potluck Thanksgiving dinner instead of preparing everything yourself

You may have a long list of grocery items you’re planning to buy so you can whip up your usual Thanksgiving feast for 20. It’s noble to want to do all of the work. But the cost there may be significant.

A better bet? Keep your savings intact by asking for help. Instead of covering each and every item on your Thanksgiving menu, make it a group effort. Assign each person on your guest list a side, dessert, or beverage so you don’t have to spend hundreds of dollars to get everyone fed.

2. Steer clear of stores on Black Friday if you don’t have specific items you’re looking for

It can be very tempting to shop on Black Friday when you see prices getting slashed left and right. But if you don’t have specific items on your list that are set to go on sale on Black Friday, then you’re better off opting out.

Stay out of stores that day, and don’t browse for deals online. Instead, take a hike, dive into a good book, or find a way to keep busy that doesn’t include shopping.

Opting out of Black Friday could help you avoid credit card debt late in the year. And that could make it so you’re able to start off 2024 with a clean financial slate.

3. Unload underperforming investments

It’s a good idea to put your money to work by investing it. But that doesn’t mean every stock or asset you choose is going to be a winner. If you have specific investments that have been performing poorly all year long, you may want to sell them at a loss before 2023 comes to an end.

Capital losses can be used to offset capital gains. And even if you didn’t sell investments at a profit, you can use up to $3,000 in losses to offset ordinary income.

So if there’s a bum stock in your portfolio that’s unlikely to recover, consider selling it sooner rather than later to reap some tax savings. That way, when you go to file your 2023 return in 2024, you may be looking at either a larger refund or less of an IRS bill.

The moves you make in the next few weeks could have a big financial impact in the new year. Do your best to avoid raiding your savings and racking up credit card debt. Also, be smart with selling investments to enjoy your share of tax benefits.

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Want to end 2023 with $1,000 more in the bank? Read on to see how. 

It’s hard to believe that we’re almost at the end of 2023. But with Thanksgiving being right around the corner, it’s time to face that reality.

You may have the goal of closing out the year with a nice, boosted bank account balance. In fact, you might even be hoping to somehow save an extra $1,000 before 2023 wraps up. That won’t be an easy thing to do — but it may be possible if you make these moves.

1. Take the money you were saving for the holidays and bank it instead

Recent data from Deloitte finds that U.S. consumers expect to spend an average of $1,652 on the holidays this year. That’s an increase of 14% from last year’s holiday season.

Now, you may have that money sitting in the bank just waiting to be spent. But if you whittle down your list of holiday purchases, you might manage to close out the year with an extra $1,000 in your savings account.

Think about the holiday items that are most important to you. You may have a long list of people you want to shower with gifts. But can you opt for low-cost or homemade items instead of splurging on apparel or electronics? Chances are, your loved ones will appreciate the thought behind your gifts, and that way, you can end the year with more money to your name.

2. Pick up a side hustle

At this point, a lot of businesses have finished staffing up for the holidays. But you might still be able to find a seasonal gig at a local establishment. It pays to look if you’re eager to boost your savings before 2023 comes to an end.

If that doesn’t work, find gigs you can do at your own pace. Signing up to drive for a ride-hailing service like Uber or Lyft could allow you to set your own hours and make money when it’s convenient for you. That’s a good thing at a time when you may be busy with holiday prep.

3. Dump some expenses you can do without

It might take a lot of spending changes to make you $1,000 richer by the end of 2023. But that doesn’t mean it can’t be done.

Do a spending audit to see where your money typically goes. And then, find ways to cut back in a big way.

If you’ve already finished your holiday shopping, you may decide to have a no-spend month in December. This means you buy only essentials, but skip out on expenses that include restaurant meals, clothing purchases, and social outings that cost money. If you’ll be busy with holiday events you don’t have to pay to attend, like family parties, you might save a lot by not having to spend money to keep busy.

To be fair, you may not be able to carve out an extra $1,000 by the end of the year only by cutting your spending. But you might manage to save $500 going this route. That, combined with taking on some gig work, could get you to your goal.

Closing out the year with more savings could help you approach 2024 with added confidence. So take these steps to save more and end 2023 on a positive note.

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Every investor needs to know how to navigate a down market. Learn about a strategy that avoids losses and offers significant long-term benefits. 

Investing in stocks is widely recommended, because it’s a highly effective way to build wealth. The stock market’s average return is about 10% per year, stretching back decades. Over time, returns like that can help you grow your money much more than you could if you kept it in a savings account.

The stock market is also volatile, though, and it doesn’t steadily increase day over day, year over year. It can drop in value, including for extended periods. For newer investors, this is often an unwelcome surprise. And it could make you question what you should do.

Every investor is going to experience this eventually, so you need to know how to navigate it. The good news is that if you keep a cool head, you could end up making a lot of money by investing when the market is down.

Stick to the investment plan

The best move you can make as an investor is to have a plan and stick to it, no matter what’s going on with the market. That means figuring out exactly how much you’ll invest and how often.

For example, you could decide to invest $500 or $1,000 on the 15th of every month. You could also go a step further and set up automatic investments, which is a feature most top online stock brokers offer. If your income fluctuates, another option is to invest a fixed percentage of it, such as 10% or 15%.

Once you have this planned out, you don’t need to make any changes when the market is down. Continue investing like you always do. There are a few notable benefits to investing this way:

It takes emotion out of the equation. When you don’t have a plan, you’re more likely to make rash decisions, such as not investing more money because your portfolio took a hit.It ensures you’re investing consistently. The most successful investors are the ones who make it a habit.It’s easy and saves you time. There’s no need to think about whether it’s the right time to invest or if you should wait until later.

Now, you’re not always going to get the best possible price. But focusing on that is actually a common investing mistake. It’s impossible to time the market, meaning to know when prices are going to rise and fall.

What we do know is that over long periods, the stock market has grown. It has also recovered from every down period and market crash so far. There’s no way to know when prices hit rock bottom. If you simply invest regularly, regardless of market conditions, then odds are that some of your investments will happen when prices are low. That means you get the stocks you like at a discount.

Make sure you have a balanced portfolio

A well-designed, diversified portfolio is the key to making this work. It’s risky to have a portfolio that’s heavily reliant on a few companies or industries.

There are a couple of ways to build a quality portfolio. You could pick companies yourself. This is more time consuming, as a diversified portfolio will generally have about 25 to 30 stocks.

The quicker option is passive investing, where you put your money in funds that do the work for you. For example, you could buy shares of mutual funds that track a specific market index. A widely recommended option, which also happens to be my main investment, is a total stock market index fund. This is designed to track the performance of the entire U.S. stock market.

With so many ways to passively invest, including robo-advisors and mutual funds, it’s easy to set up a winning portfolio. Once you do, decide how much you want to invest and when, and follow that plan through the market’s ups and downs.

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There are dozens of streaming services out there, and paying for several gets expensive quickly. Here are some tips on how to keep your costs down. 

Streaming services are a key source of entertainment for millions of Americans, and the companies that own these platforms know it. Paying $5 to $15 per month might not seem like that big of a deal, especially when you’re getting a lot of value out of the service. But once you subscribe to a handful, your monthly streaming bills aren’t so small anymore.

Sometimes, subscribing to multiple streaming platforms can make a lot of financial sense. But it’s important to avoid the following five mistakes, so you can pay as little as possible.

1. Subscribing to services you won’t actually use

Before paying for a subscription service, think about whether you’ll get your money’s worth from it. Review what content it offers and make sure there is something there you will take advantage of right away. If there isn’t, subscribing to that service might not be the best financial move for you right now.

Take advantage of any free trials the service offers to make sure the streaming platform really deserves your money. If you’re only interested in a single show or movie, you may be able to watch it during this time without paying a dime. Just make sure you cancel your subscription before the end of the free trial period if you don’t wish to keep it.

2. Subscribing to more services than you can feasibly use

In a similar vein, you don’t want to subscribe to too many streaming services at once or you simply won’t have the time to use them all. Rather than signing up for a bunch at one time, it’s best to choose a handful you know you’ll use regularly.

This can change over time. If you feel one service doesn’t have any content you like right now, pause that subscription and switch to another one that interests you. Then, if the first service comes out with something new, you can always switch back later.

3. Choosing the wrong plan

Many streaming services these days have several payment plans to appeal to a wide audience. Basic plans may include commercials or limitations that premium plans don’t have. It’s important to weigh all the options available to you before deciding which is best.

I think it’s fair to say we’d all prefer to not watch commercials during our shows. But if going with a plan that has commercials would free up some extra cash you could put toward another streaming service or just keep in your checking account, it could be worth it.

4. Not bundling services

A streaming service bundle can help you save compared to paying for each service individually. One of the most popular bundles gives you access to Disney+, Hulu, and ESPN+, and it can save you more than 40% compared to paying for each service individually.

But make sure you’ll actually use all the services in the bundle before you go this route. If you’re only interested in one or two, compare the cost of each service on its own and see how this stacks up to the bundled price.

5. Losing track of services you’ve subscribed to

It can be tough to keep track of all the streaming services you’re paying for, and if they’re set to auto-renew, you might forget about one until you’re charged again. So it’s important to have some record of what you’re currently paying for.

You can do this yourself by writing down which services you’re paying for, how much they cost, whether you pay monthly or annually, and when the renewal date is. Or you can use an app that helps you keep track of which services you’re paying for. Many of these can also help you cancel services you’re not using with a click.

Schedule check-ins with yourself a few times per year to review what you’re currently paying for different streaming services and to decide if there’s any you need to cancel. It doesn’t have to take a ton of time, and it can make a huge difference to your monthly budget.

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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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