Money Management

I’ve been loudly opposed to homeownership for the last decade. Keep reading to learn why I decided to take the plunge again. 

I remember a conversation I had with a board member, back in my museum days. He asked whether I was going to be buying a home, and I laughed and said, “No way!” Not only could I not afford the expenses of homeownership, but I had moved to that area only for work, and absolutely could not see myself staying there long term.

Clearly, getting a mortgage loan then wasn’t in the cards for me. Plus, I’ve carried the sting of my first disastrous experience of owning a home, and knew I never wanted to be in the position of being unable to afford my housing costs ever again. But I changed my tune at the end of 2021 and made homeownership my goal. Here’s why.

My work situation changed

As you may have gathered, a career in museums doesn’t really come with a great salary, job stability, or the opportunity to stay in one area for long, especially if you want to advance in the field. Positions are hard to come by, competition is fierce, and any time I wanted a new job, I had to move for it. In several cases, those moves comprised over 1,000 miles and a different time zone. But I decided to change careers in 2021, and by switching to digital content writing and editing, I gave myself a leg up on being ready to buy a home.

My current career isn’t location-based; I am fully remote and can work from anywhere. Plus, at the beginning of this year, I cut ties with my last W-2 job and became a full-time freelancer. None of my clients can compel me to work from a set location or on a set schedule. This means I can buy a home and not have to sell it before I recoup my costs and my home appreciates in value. And knowing that I want to buy a home has given me the chance to work more and save a big chunk of money to make it happen.

I found an area I want to stay in

Another big life change I’ve experienced is falling in love with the city I currently call home. This is the first place I’ve ever lived that I personally chose — I didn’t have to move here for work or school. It has its quirks, like all cities do, but I’ve been here more than two years, and I know I can be happy here for many years to come. I’ve started putting down roots, and I want to continue.

Another point in favor of me buying a home here is that the cost of living is quite low, especially for this state. I will still end up paying more than I want to for a mortgage loan thanks to this difficult housing market, but home costs aren’t terrible here, and I should be able to afford a modest house. Home prices are up overall, but thankfully the average home price here is far below the national average of $348,539 (per Zillow data).

How can you get ready to buy in this market?

Unfortunately, my decision to buy a house is coinciding with an absolutely terrible housing market for buyers (it remains better for sellers, as they can still command higher prices for their homes, thanks to a lack of inventory). There’s still just a 3.4 months’ supply of homes, according to data from the National Association of Realtors — it would take closer to six months’ worth of homes to balance the market between buyers and sellers. Plus, mortgage rates are up; according to Freddie Mac, the average rate for a 30-year fixed mortgage loan as I write this is 7.76%.

What should you do if you’re an aspiring buyer like me? Here are a few tips I’ve leaned on.

Boost your credit score: Your credit score is incredibly important when you get a home loan — mortgage lenders are going to scrutinize every aspect of your finances, including that. You can improve it by paying off existing debt, making every payment on time, and checking your credit report for errors. If you find any, you can have them removed, which will bump your credit score up.Save money: Yes, this is very reductive, but it’s true — buying and owning a home is expensive, so the more money you can put down, the better off you’ll be. Plus, it’s not a good idea to leave yourself with no cash savings at all when you buy; as a homeowner, your emergency fund becomes even more important.Shop around for a loan: Don’t go with the first mortgage lender you meet; get pre-approvals from a few, and make sure you consider all loan types you’re eligible for. For example, if you have a lower income and live in a qualified rural area, you might be able to buy with a USDA loan.

It’s OK to change our minds about the big parts of life. In fact, it’s downright necessary to grow as humans. I might be here eating crow on the internet, but I’m excited about the prospect of owning a home — and I never could’ve said that before now.

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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.Citigroup is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has positions in and recommends Zillow Group. The Motley Fool has a disclosure policy.

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Gift cards are the lazy way out, right? Wrong. Keep reading to learn why the right gift card is a present the recipient is likely to appreciate. 

The winter holidays are coming in hot, and it’s time to make my annual argument: Gift cards can be great presents. The trick is matching them to the person you’re buying for.

From a practical standpoint, getting someone a gift card saves you from the anguish of trying to decide what to buy for them and then getting it wrong — which leads to holiday awkwardness, and no one wants that.

Plus, do you really want to give the gift of having to make a return? Per data reported by Red Stag Fulfillment, a third of those surveyed in 2021 anticipated needing to return at least one present they received that holiday season. Returning a gift takes time, and if your recipient is self-employed, taking the time out of their schedule to make that return could quite literally represent a hit to their checking account. Plus, if the item was purchased online, there could be more hoops to jump through to make that return (and it might even cost extra to return).

If you think gift cards are the lazy way out — well, you may have a point, because gift cards are easier on you as the gift giver. But here are a few other reasons they’re worth considering.

Gift cards are flexible

You have basically endless options for gift cards, beginning with the types you can purchase. There are online gift cards (good for the planet, easy to deliver — put in your recipient’s email address and you’re all good). There are physical gift cards, which can be purchased nearly anywhere (Costco is a great place to buy little-known gift cards, actually) and used either in person or online.

You can buy closed-loop gift cards, which are only good at one retailer — if you give a Starbucks gift card, the recipient can’t use that at their local independent coffee shop. But you can also buy open-loop gift cards; these are commonly offered by Visa or Mastercard. And since they have that credit card logo on them, open-loop gift cards are accepted basically anywhere a debit or credit card is, online or in person. How convenient!

Gift cards are good for adults

Kids are one group of people for whom gift cards are less ideal; after all, kids are generally excited to receive actual presents for the holidays. But a lot of adults already have enough “stuff” in our lives and our homes, and we aren’t necessarily thrilled to receive something new we’ll have to store.

Plus, adults have developed a solid sense of taste, and what are the odds they’ll love the sweater you’ve picked out for them? If you’ve got adults to buy for, it’s worth opting for gift cards, unless you are extremely confident in your ability to choose a present they’re sure to love.

Tips to buy the most useful gift cards

I hope I’ve swayed you on gift cards, and if I have, here’s how you can choose the best options for your various loved ones.

Consider location: Your recipient’s location, that is — if you’re planning to buy a card for a chain retail store, check whether that store exists in their area.Think about interests: If you know the person is a musician, perhaps a Guitar Center gift card is a good choice. If they’re already a Costco superfan or are considering joining the warehouse club, a Costco Shop Card might be perfect (you don’t have to be a member to use one!).When all else fails, go broad: Opt for an open-loop Visa or Mastercard gift card; remember, they can be used anywhere. Or get a card for a big retailer like Amazon or Target. The nice thing about the latter is you can shop on Target’s website as well as in store.

Gift cards can help you cross people off your holiday gift-buying list with a lot more ease, and they’re a great way to show you care. What’s not to like?

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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.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool has positions in and recommends Amazon, Costco Wholesale, Mastercard, Starbucks, Target, and Visa. The Motley Fool recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.

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On the hook for your office’s Secret Santa? Take a look at a few lovely gift options that won’t leave you with a big hole in your checking account. 

A Secret Santa gift exchange can be a great way to organize holiday-minded folks in settings like offices, or even among big families. After all, buying one gift is a lot easier on your checking account than buying for a lot of people, and the holidays are already a very expensive time of year for many of us. But finding the right gift to make the recipient say, “Cool!” can be a challenge.

What if I told you I had a great go-to list of Secret Santa ideas that are thoughtful, fun, and all under $30? Plus, all of them are available from Amazon (and using the right credit card for online shopping means you’ll be rewarded for your purchase).

Let’s take a look at some excellent gift ideas for the special person whose name you drew out of a hat and you may know only slightly. Note that prices are accurate at time of writing, but are subject to change — so if you like an item on this list at the current price, it pays to snap it up!

1. Lovely pastel markers

You never really outgrow a love of good writing implements. When you’re a kid, you might be all about Crayola, but your colleague’s tastes are likely more sophisticated.

Feast your eyes on these gorgeous mildliner markers. They come in a set of 25 for $24.50 and are in pastel colors. They function the same way as highlighters, but instead of retina-scorching bright yellow and green, you can take notes and mark up a book in softer shades. Plus, they’re double-ended, with both a broad and a fine tip.

2. LED string lights

Who doesn’t love string lights? These come in a variety of colors, brighten your living space, and are just plain fun. They’re on fine wire, which makes them nearly invisible when they’re not turned on, and they make it easy to dress up a room in a festive way.

All of the available options are under $15 — you can purchase the blue ones (which are 66 feet long and consist of 200 LED lights) for just $11.99. I recommend pairing these with an inexpensive bottle of wine or even a pack of hot cocoa mix to give the gift of cozy hygge for a cold winter’s night.

3. A microwave popcorn popper

Popcorn is a great snack — it’s cheap, high in fiber, and very easy to make. But the kind that comes in microwavable bags isn’t great for you, due in large part to the chemicals that line those convenient bags.

What’s the solution? How about a silicone popcorn popper that still works in your microwave? This neat gadget is just $25, and you can use any kind of popcorn you want in it. This could be a great gift for a family member or a colleague (perhaps the one whose microwave popcorn habit hits you in the nose every afternoon in the office).

4. A miraculous (and reusable) pet hair remover

I love my cats, but I don’t love how much hair they leave all over my upholstered furniture. But this pet hair remover does an absolutely amazing job of collecting the hair, and you empty it by opening the compartment and dumping it right into the trash.

Sticky tape rollers eventually run out of sheets, but you can use this device again and again. Get it for $26.99 and give it to the person who always has new pet photos to show you.

5. A travel jewelry organizer

Got a colleague or family member who loves to travel? Packing in an efficient and space-saving way can be a challenge for a lot of people (guilty). But this neat jewelry organizer can help. It comes in two different sizes and a variety of colors at excellent price points.

For example, you can get the teal one for $15.99 for the small size or $19.99 for the medium. It has zippered pouches, a little section where you can secure stud earrings, and even a place to store rings for safekeeping.

6. Fairtrade chocolate bars

What do you get for the person who has everything (or the person you don’t know very well)? How about chocolate? Tony’s Chocolonely is particularly special because it’s Fairtrade certified and the company is working hard to fight the inequality and exploitation in the chocolate industry. You can scoop up four full-size bars for just under $27 right now, and there are some excellent flavors in the bundle — the milk chocolate caramel sea salt is a favorite of mine, and I bet it will be for your lucky gift recipient, too.

If you’re feeling anxious about buying a gift for a coworker you don’t know well or a relative you don’t see often, don’t sweat it. These gifts can be yours at a low price point, and they’re thoughtful and useful enough to be appreciated by just about anybody.

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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.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.

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The amount of money you can draw from retirement accounts is up for debate. It could be around 4% or less, depending on your situation. See how to tell. 

Throughout your life, you need to put money into investment accounts for retirement. Otherwise, you could find yourself with too little to live on as a senior. Social Security will only replace about 40% of your pre-retirement earnings.

To determine how big your nest egg needs to be, you’ll have to decide how much you can safely withdraw from it each year. After all, you can’t take too much out too fast or you’ll run out of money. Setting your withdrawal rate enables you to figure out how much income your account will produce without draining it dry — and to find out if it’s enough or if you need to save more.

But how can you determine your withdrawal rate? Here are a couple of options to figure out how much money you can take out of your retirement accounts each year and transfer to your checking account to pay your bills and cover living expenses.

Follow the 4% rule

The 4% rule is one rule of thumb many people follow. With this rule, you plan to withdraw 4% of your account balance when you retire. If you have $900,000 invested, you could take out $36,000 for the first year. In subsequent years, you would simply adjust this amount upward to account for inflation.

There are some downsides to the 4% rule. First, it’s rigid and doesn’t account for changing spending habits or changing market conditions. Second, and perhaps more importantly, market volatility and high inflation mean that following this rule may no longer be sufficient to ensure you don’t run out of money.

Morningstar research shows that withdrawing around 3.8% would be a better bet in today’s environment, so if you’re going to follow a percentage-based rule and you want to be conservative about making sure your money lasts, that may be the way to go.

But if you are pretty confident in your investments, don’t think you’ll far outlive your life expectancy, and aren’t worried about running out of money late in retirement, then sticking with the standard 4% rule could be OK.

Use IRS minimum distribution tables

There’s another option you could use, and it’s recommended by the Center for Retirement Research (CRR) at Boston College. The CRR recommends using required minimum distribution (RMD) tables made by the IRS to set the right withdrawal rate.

RMDs are required for some tax-advantaged accounts like traditional IRAs and 401(k)s. Basically, you eventually have to start taking money out at age 72 or age 73 (depending on birth year) if you have these accounts. The IRS has made a table to tell you how much.

But even if you aren’t subject to RMD rules, you may still want to use these tables to dictate your withdrawal rate. That’s because they are dynamic and change with market conditions. Plus, it’s easy to use the tables to determine how much to take out, and you may be less likely to run out of money if you stick with the guidelines.

The downside is, you’d need to check these tables regularly to see how much to take out of your account in a given year. But that’s a small price to pay for increasing the chances of a secure retirement, so you’ll want to at least consider this option when deciding how best to collect the right amount of income from your retirement plans.

The right option for you will depend on how conservative you want to be with ensuring your retirement savings lasts, so take the time to make an informed choice on this issue. You can also talk with a financial advisor if you need help making this choice, but be sure to find a fee-only financial advisor and find out upfront exactly how much they’ll charge for their services. With the right research or help from the right professional, you can make a choice that’s right for you.

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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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