Money Management

All your favorite merchants want your money right now. Keep reading to learn a few of their tricks to get you to spend, spend, spend. 

The winter holidays bring with them comfort, joy, cheer — and sometimes a bigger credit card bill than you want. Americans plan to spend an average of $875 to celebrate this year, according to research from the National Retail Foundation and Prosper Insights & Analytics. Most of that tab ($620, to be exact) is what they intend to spend on gifts specifically. With this in mind, it’s worth considering all the ways retailers try to lure you in to spend more money. Here are a few to watch out for.

“Black Friday features our lowest prices of the year!”

You might assume that holiday sales mean you can snag great presents for absolute rock-bottom prices. While Black Friday is a good time to buy certain items (such as small appliances and smart home gadgets), you can find better deals on TVs, furniture, and clothing at other times of the year, according to RetailMeNot.

TVs in particular are the quintessential Black Friday buy — how many low-quality cellphone videos that featured suburban housewives trampling each other in the middle of the night for a chance at one for cheap have you watched? But our friends at The Motley Fool noted a few years ago that those supposedly high-end sale TVs might be made by substandard brands, or even using cheaper parts than a non-sale TV. Yikes!

“That’s on sale for 50% off the original price!”

One sneaky retailer lie you’ll hear during holiday sales leans on the technique of price anchoring. Price anchoring is a strategy businesses use to make you think you’re getting a better deal (and a better product value) than you really are. Let’s say you’re shopping for a new purse for your mom, and you see one sale priced at $40, and the tag says the original price was $80. Wow, what a great deal! But who’s to say the original price was ever actually $80? If this purse is always “on sale,” and never actually going for $80, it’s been price anchored, and the store is hoping you’ll see “$40 for an $80 value,” and jump on it.

This is certainly a dirty trick, but there are ways around it. One strategy is to use price-tracking software or apps — these can also help you jump on the perfect gift when it’s at an actual lower price.

“It’s the perfect time to get a store credit card!”

Store credit cards can be…complicated. On the one hand, some excellent store credit card options offer ample cash back and other perks at your favorite stores. But on the other hand, there are plenty of substandard cards that offer meager rewards and very high APRs. It’s never a good idea to take on a new credit card while you are being pressured to do so by a store clerk, and also while you’re in the middle of your holiday shopping and likely under stress and a time limit. Don’t be fooled by that piddly 10% off your first purchase they’re offering — there are better welcome bonuses out there.

If you want a new credit card for holiday shopping, I recommend instead applying for one of our favorite rewards credit cards. Wouldn’t it be great if the money you spend on holiday expenses benefits you by giving you a little cash back or even rewards points you can turn into a cheaper vacation in 2024? Time it right, and you might even be able to meet a sweet welcome bonus thanks to just your gift purchases.

Retailers have plenty of lies and tricks up their sleeves, especially during the holiday season. But now you’re hip to a few of them, so use this information to ensure you’re spending your holiday cash in the best (and smartest) way possible.

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Are you hoping to earn more interest from your savings in 2024? Keep reading to see what steps one writer took to earn over $1,200 in interest this year. 

We’re nearing the end of the year, but it’s not too late to set yourself up for financial success in 2024. One way to improve your financial situation is by opening up a savings account and making regular contributions to it. This way, you’ll have extra money whenever you need it.

Because I have a high-yield savings account and have continued to set money aside bi-weekly, I’ve earned a significant amount of extra cash from interest payments. Find out how I made over $1,200 in savings account interest this year and what steps you can take to do the same.

I opened a high-yield savings account

The first step that I took was opening a high-yield savings account. For many years, I only used a traditional savings account offered by my regular bank. However, since high-yield savings accounts at online banks tend to have higher annual percentage yield (APYs) than savings accounts provided by brick-and-mortar banks, it’s advantageous to open this type of bank account to maximize your interest earnings.

This past year, APYs continued to climb, so I was able to earn a significant amount of money in interest. Most checking accounts don’t earn interest, so there’s little benefit to keeping your extra savings there. If you don’t yet have a high-yield savings account, now is an excellent time to open one so you don’t miss out on the chance to boost your earnings.

I put my savings on auto-pilot

I’ve always been a big fan of saving money, but I didn’t always follow the best strategy. For many years, I made manual contributions to my savings account, which resulted in me frequently forgetting to save. But that’s not the case anymore. In 2021, I finally automated the savings process, which has allowed me to stay on top of my savings goals month after month.

You can set up automatic, recurring transfers so money is transferred from your checking account to your savings account routinely. This is an excellent way to ensure you pay yourself first. You can do this through your bank’s mobile app or website. Once you set everything up, the process will be automatic so you can save time and feel less stressed.

I think this is one of the biggest reasons I was able to earn over $1,200 this year from interest. If I hadn’t automated the savings process, I likely wouldn’t have saved as much money as I did. The more money you stash in an interest-earning bank account, the more interest you can earn. If you have savings goals you’re trying to reach in 2024, you may want to consider this strategy.

Here’s what I’ll change in 2024

While I feel satisfied after earning more than $1,200 in interest this year, I’m not done saving money. I can’t control APYs, and my high-yield savings account APY may fluctuate. But one thing I can change is how much money I contribute to my savings account. I plan to increase my savings contributions at the start of the year. This will allow me to be even more prepared for future expenses. Plus, I can continue to earn interest while my cash sits in the bank.

If you have been meaning to prioritize savings, now is your chance to set yourself up for success before 2023 ends. Consider opening a high-yield savings account and setting up automated transfers so you earn interest on your savings. Future you will be glad you did. If you’re looking for more ways to improve your finances, review our personal finance resources.

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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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If you’re struggling financially, determine if you can reduce some of your spending to free up extra cash. Find out how to lower your bills fast. 

If you’re constantly left with little extra money after paying your bills every month, you may be looking for ways to improve your finances. If you don’t make some changes, it will be challenging to continue to afford everyday life if costs continue to climb.

The good news is you can make changes to change your financial situation for the better. Here are a few of the fastest ways to reduce your monthly expenses so you can feel less financial stress.

1. Cancel services you’re no longer using

Many of us are spending money on services we don’t use enough or at all. If you’re not paying close attention to your spending habits, you could be wasting money on unnecessary expenses, too. You can use one of the best budgeting apps to monitor your spending to take a closer look at your spending habits. If you can find one or more expenses you’re not using and cancel these services, you can free up some of your money for other purposes.

2. Shop at discount grocery stores

You may be overspending on everyday essentials by shopping at the wrong stores. It’s no secret that the price tags at most grocery stores nationwide are high. But that doesn’t mean you can’t lower your grocery spending. Shopping at discount retailers can help.

Since life has been busy in recent months, I’ve been shopping at the more conveniently located grocer in my area. But I know that I’m overspending. This weekend, I did a smaller grocery haul at a discount grocer instead of going to the more convenient store in town. I compared the prices after I finished shopping and saved almost $15 by shopping with the discount retailer.

If you’re looking to spend less on your monthly bills, you may want to try this, too. It can be helpful to review each store’s sales flier before loading up your cart so you don’t miss the best deals. Over time, shopping at discount grocers can result in significant savings.

3. Negotiate your bills

Not all bills can be negotiated, but some can. If you have home internet, cable, or a mobile phone bill, these are some bills you may be able to lower just by asking. It’s worthwhile to contact each company to ask if they will work with you on the price.

You may be able to get your biller to extend a promotional rate without changing your plan or switching to a cheaper plan that has similar offerings. Saving even $25 or $50 a month by negotiating your bills can make a big difference and help you boost your bank account balance.

4. Switch to budget billing

Some utility companies offer budget billing to customers. With this payment method, you’ll pay a set amount each month throughout the year based on your prior average energy usage. This can be a good option for those with exceptionally high seasonal energy bills, like high electricity bills in the summer due to using air conditioning. Your monthly bills may fluctuate slightly if your usage changes, but this is a good solution that can make your monthly bills more predictable.

5. Get rid of credit card debt as quickly as possible

It can be stressful to have credit card debt, and this type of debt can quickly climb the longer it sits unpaid. Since credit card interest is a high-interest debt, it’s best to eliminate it immediately. Otherwise, you’ll continue to pay expensive credit card interest charges and need to put more of your income towards payments.

An option to explore is a balance transfer card. You can transfer an existing balance from one card to a best balance transfer card and take advantage of 0% APR for a set time. But you must pay off your entire balance before the promotional period ends to avoid additional interest. This tool can help you tackle your credit card debt sooner to reduce your overall spending.

The above strategies can help you reduce your monthly bills, so you feel less stress. Small changes can add up over time and improve your financial situation. For additional tips to help you save money, check out our personal finance resources.

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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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You may owe taxes on a home sale if you made a profit, but you’re allowed to exclude gains if you meet certain requirements. Here’s what you need to know. 

While your house is a place where you live (and make mortgage payments on), it is also an asset that you own. If you sell your home at a profit, that means you have capital gains. And the IRS typically imposes taxes on capital gains.

However, there are special rules for primary homes. So whether you owe taxes will depend on whether you qualify for a capital gains exclusion as well as on exactly how much profit you made.

Here’s how to determine if you’ll owe taxes on your home sale

While you ordinarily have to pay capital gains taxes when you sell assets at a profit, there are special rules applicable to your house.

Specifically, if you are a single tax filer, you may be able to exclude up to $250,000 in gains from your home sale. That would mean that unless you made more than a $250,000 profit on the sale of your home, you would not have to declare any sale proceeds as income. And if you are married, you each get to claim a $250,000 exclusion, so you won’t have to pay any taxes unless your profits from your home sale exceed $500,000.

Be sure you understand that this is profits. If you sell your home for $600,000, that doesn’t mean you’re going to be taxed — it depends what you paid for it. If you had purchased the property using a $400,000 mortgage loan, you would have only made a $200,000 profit. So you would not owe capital gains taxes, no matter whether you were a married or single filer.

Do you qualify for the capital gains tax exclusion?

You qualify to exclude $250,000 or $500,000 in profits from a home sale only if you meet certain requirements. Specifically, you must:

Have owned your home for at least two of the five years prior to the time of the sale. This is called the ownership test.Have used your house as your main or primary home for at least two of the five years prior to the time of the sale. This is called the use test.

These two years do not have to be consecutive. It’s an aggregate. And they don’t have to be overlapping. In other words, if you owned your house for two years of the last five and you used the home as a primary home for two of the last five years but these did not happen at the same time, you could still qualify for the exclusion.

Unfortunately, though, you are not eligible to exclude your capital gains taxes if you already used this exclusion for the sale of a different home in the two years before you sold your current property.

The good news is, this means many people don’t end up getting a tax bill after selling a home. If you don’t qualify for the exclusion, though, you are going to be taxed on the profits from your home sale. So be prepared to give the IRS a cut out of your bank account if this happens to 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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Want extra cash for the holidays? Here’s how to get it with a side hustle that won’t upend your schedule. 

The holidays are rapidly approaching. And if you don’t have the money you need in savings to cover all of your anticipated expenses, you may be starting to panic.

The average consumer is expecting to spend $875 on the holidays this year, says the National Retail Federation. That sum accounts for expenses like gifts, food, and decorations. If you’re planning to travel during the holidays, your tab might end up even higher.

But don’t stress. Even if you don’t have a pile of money in your savings account, if you’re willing to pick up a side hustle, you may find that you’re able to spend on the purchases you want to make without running the risk of debt.

Of course, fitting a side hustle into your schedule isn’t easy — not in general, and not during a period of the year when you may have more plans than usual (think holiday parties and the like). That’s why you may want to focus on side hustles that aren’t so invasive as far as your schedule is concerned. Here are a few gigs you may find to be very flexible.

1. Content writing

Most content writing assignments come with a deadline. But if you’re good at managing your time, you may find a content writing gig to be pretty easy to manage.

Let’s say you sign up for a gig that wants three blog posts a week that take 90 minutes each to write. That means you’ll need to find 4.5 hours during the week to meet your deadlines. But you can generally choose when you do that writing. This means that if your optimal window is 7 a.m., before you’ve started your day, so be it.

2. Driving for a ride-hailing company

The beauty of driving for a ride-hailing service like Uber or Lyft is that you don’t have to commit to preset hours. You can simply log into the app when you’re available and shuttle people around.

Of course, the more hours you work, the more money you stand to make. And you may be more likely to find passengers if you mark yourself as available during the evening hours, especially on weekends. But technically, you can work the hours you want.

3. Delivering groceries

If you don’t like the idea of shuttling people around in your car, you may not mind loading your vehicle with groceries and dropping them at people’s doors. Services like Uber Eats and Instacart allow you to sign up and accept grocery deliveries as you’re able to fulfill them. And if your customers tip nicely, you could end up with a nice pile of cash in your checking account for your holiday purchases.

You could also choose to deliver groceries during off-peak times so you have fewer crowds at the store. That could, for example, mean doing more grocery runs during the workday if your schedule allows for it rather than during the evening, when supermarkets tend to be busier.

4. House-sitting

House-sitting isn’t 100% flexible because you need to commit to watching over someone’s property during a certain period. But the actual work you’re doing is usually flexible.

Often, house-sitting simply means bringing in mail and packages, doing very light cleaning (like dusting surfaces), and perhaps caring for a pet. And usually, if you’re being booked as a house-sitter and not a pet-sitter, the pet care aspect is low-key — think of tasks like feeding fish, as opposed to having to walk a giant dog five times a day. You can find house-sitting gigs through sites like MindMyHouse and HouseCarers.

Paying for the costs of the holidays can seem overwhelming. But if you’re able to bring in extra cash with a side gig, that might take a lot of that stress off of your plate. And it definitely pays to focus on side hustles that won’t extremely upend your routine.

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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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