Money Management

Powerball winners have learned a lot about managing money. Check out a handful of lessons you can apply to your finances, no matter how much money you have. 

Many of the discussions around lottery winners focus on how they’ve misspent their money. But some Powerball jackpot winners have made good financial decisions that have gotten them out of debt, set them up for future wealth, and benefited people in their communities.

At least a few of the lessons were learned the hard way, and we can take their experience and apply it to make better decisions for our own personal finances. Here are six of the most important things Powerball winners can teach us.

Lesson 1: Pay off debt

Not all lottery winners immediately spend their winnings on fancy cars and houses. Many use their winnings to pay off their mortgage or eliminate their credit card debt.

That’s what $2 million Powerball winner Megan Balmer did recently. She immediately set up plans to pay off her house and wipe out the credit card debt she had accumulated. If you’re trying to eliminate your own debt, some helpful debt payoff apps can help you get on the right track.

Lesson 2: Invest wisely

Jack Whittaker won a Powerball jackpot of $314 million and took the one-time payout of $113 million. Unfortunately, Whittaker spent most of his money within years through gambling, giving money away, and business investments that didn’t work out.

The quick takeaway from Whittaker’s financial troubles is that no matter how much money you have in the bank or what your annual income is, it’s always a good idea to find sound investments to grow your money. This could be through buying and selling stocks in your brokerage account or setting up a 401(k) through your employer. There are also plenty of great websites and apps for beginning investors.

Lesson 3: Learn how to say no

Sandra Hayes split a $224 million Powerball jackpot with some of her co-workers and quickly realized that some people close to her were always asking for money. She had to learn how to say no, which is a good lesson for anyone trying to improve their personal finances.

Sometimes, you have to say no to specific spending to achieve bigger goals you’re working toward, like paying off debt or saving up to buy a house. Saying no can make you wealthier by helping you avoid the wrong opportunities and investments.

Lesson 4: Set a budget

Hayes didn’t just learn how to say no; she also maintains a relatively frugal lifestyle to make sure her winnings will last. While she bought a car and took a trip to Hawaii, she set a limit on her spending and still shops at discount stores.

If you hate budgeting (and most everyone does), it may help to use a budgeting app that tracks your spending. Setting a few budgeting goals — like building an emergency fund — will help you stay focused on what you want to achieve.

Lesson 5: Hire a finance professional

Buying things can be fun, but it can also lead to overspending, credit card debt, and even bankruptcy. But no matter how much money you have, keeping your spending in check can be difficult — that’s why it pays to hire a financial advisor.

Powerball winner David Gehle took a similar step after he and some of his coworkers won a $365 million jackpot. Gehle was scared he’d spend all the money, so he made conservative investments, hired accountants and lawyers to help him manage his winnings, and even waited a few years after hitting the jackpot before he bought a house.

Lesson 6: Be charitable

Lerynne West walked away with a $343.9 million Powerball jackpot in 2018 and gave $500,000 to the Travis Mills Foundation veterans charity, as well as set up her own charitable organization called the Callum Foundation, which focuses on education, animal welfare, veterans, and fighting poverty.

Of course, you don’t need a large amount of money to donate to your favorite charity. Doing so is a great way to help people in need, and there are also many benefits to being generous.

Learn lessons the easy way

Even if you don’t have a lot of money, there are some practical steps you can take to get yourself in the best financial shape possible. For example, if you’re unsure how to manage your money, consider downloading some financial literacy apps to educate yourself.

Apps can be an easy way to grasp financial ideas and concepts you may not already understand, and you’ll quickly learn important financial lessons — so you can be ready when your numbers come up in the next Powerball jackpot.

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Celebrants are expected to spend billions on Halloween this year. Use these tips to avoid becoming a Halloween statistic. 

If you’ve been in any store in the country since September, you probably already know how much folks like Halloween. The themed decor and foodstuffs have been hitting the shelves for weeks — and flying right back off of them.

Indeed, Halloween spending is set to exceed last year’s total by more than 13%, according to the National Retail Federation. Its survey estimates folks will spend around $12.2 billion this year compared to last year’s $10.6 billion.

Some amount of that is likely due to inflation, but not all. A record number of people are expected to participate in festivities this year, with 73% saying they’ll be celebrating in some way (compared to 69% from last year).

Although overall spending is set to rise, your personal finances don’t need to be part of that statistic. There are a ton of ways you can enjoy Halloween without overspending. Here are a few tips.

1. Reuse or upcycle from previous years

The biggest Halloween expense for many folks is the costume. But why waste $40-plus each year on a new costume?

Everything that’s old is new again. Simply use the same costume you used last year, assuming it’s in workable shape. Chances are few people will notice — and fewer still will care. Don’t want to be your own doppelganger? All it takes to turn old Halloween costumes or decor into new things is a little creativity (and a lot of spray paint).

Of course, you don’t have to stop with your own closet. The things our parents wore at our age are so old they’re cool again, so have at ’em!

Pro tip: Any costume can be zombie-fied into something new with some scissors, dirt, and “blood” — a mix of corn syrup, chocolate syrup, and red food dye.

Outgrew the lab coat from two years ago? Rip off the arms, add a bit of “blood,” muss your hair: zombie doctor. Went as a cat last year? Muddy the fur, splatter some blood, and boom: zombie cat. Bonus points for being unexpected. Zombie astronaut? Love it. Zombie Power Ranger? Winner.

2. BOYE your Halloween party

Finances may be tight, but that doesn’t mean you can’t still have a frightfully good time. You just need to throw a BYOE party: Bring Your Own Everything.

Ask your party guests to each bring a snack or drink option to share with everyone. It could be a bag of chips or two, maybe a 12-pack of something — whatever’s needed. If you want to be organized about it, take a nod from a third-grade party and make a list of everything that’s needed so folks can sign up for what they want to bring. Or just go with the flow and see what shows up!

If you want to get really into it, have guests bring goodies that go with their costumes. (Though perhaps suggest the vampires bring red soda, rather than something…thicker.) Vote on who had the best fit for their costume, then let the winners have first dibs on whatever’s left in the candy bowl at the end of the night.

3. Buy candy in bulk, in types you enjoy

Handing out candy to the neighborhood monsters is a big part of the holiday, so I always try to find some good deals on candy. My local grocer does some good buy-one-get-one deals near Halloween, but I’ve actually gotten the best value buying candy in bulk from Sam’s Club. (I like the special Halloween-themed versions of popular treats that come out for Halloween.)

If you’re worried about having too much candy, don’t; simply buy a type you and your family enjoy snacking on (in moderation) throughout the year. Most candy will keep for at least six months, and many kinds can last 12 months or more when stored properly.

Keep your unused Halloween candy in a cool, dark place, and dip into your stash whenever you need a little piece of Halloween fun the rest of the year.

Halloween is meant to be a lighthearted holiday

One of the best things about Halloween is that it’s meant to be a lighthearted holiday. It’s about fun and pretend, candy, and plenty of silliness. You don’t need to break the bank to be perfect for Halloween. Nothing has to be perfect on Halloween. In fact, Halloween is arguably better when it’s a bit kooky (mysterious, and spooky).

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Costco shoppers can benefit from having a few great apps. If you want to stay on top of deals and cash back, here’s what you should know. 

Costco shoppers already get great savings on everyday products via low prices and discounts. But finding those deals ahead of time and taking advantage of them before they expire requires a bit of careful planning — or a few really good apps on your phone.

Over time, as I’ve been shopping more frequently at Costco, I’ve discovered essential apps that tell me when deals are happening and how to get extra cash back on products I’m already buying. This list isn’t exhaustive, but if I had to carry only five apps on my smartphone for Costco, it would be the following.

1. Costco shopping app

Like, duh, right?

Honestly, I didn’t discover the Costco shopping app until this year. And while it’s not the most impressive shopping app, it’s certainly impressive for a retailer that has been terribly slow in unrolling its own mobile technology.

A few things I like about this app: You can store your membership, check your rewards balance (for Executive members, who earn 2% cash back on Costco purchases), and create shopping lists. The app will notify you of promotions and ongoing sales and even let you check gas prices at different Costco warehouses.

Recently, Costco announced that it’s planning on bringing more upgrades to this app, including the option to check warehouse inventory and scan barcodes. If “scanning barcodes” eventually means a scan-and-go function, this app could finally compete with Sam’s Club’s app.

2. Krazy Coupon Lady

I’m convinced there’s no Costco deal that Krazy Coupon Lady (KCL) doesn’t see. The KCL team is so good at finding Costco deals, I pretty much always check the app before going into a Costco warehouse.

When you download the app, you can follow popular retailers, like Costco. The app will then curate deals based on your choices. While some of these Costco deals won’t be available everywhere (some are location specific), you can get a good idea of what to look for on your next trip to Costco.

To be fair, sometimes the deals are overwhelming and might make you spend money. For example, recently KCL found Nike infant clothes for $2 at Costco. That’s a great deal and had me pretty excited — until my wife reminded me we have a chest of baby clothes and our families love buying them for us. Question the deal before you act on it, but if it’s good for you and your finances, take advantage of the promotions.

3. Ibotta

Ibotta is a free cash back app that gives you extra rewards for eligible purchases made at over 2,000 retailers, including Costco. It doesn’t give you cash back for every purchase. But for advertised products — mostly brand names — you could get anything from a few extra cents to a few dollars or more in cash back when you activate deals and scan receipts.

One problem with Ibotta is that it doesn’t offer cash back on Costco’s Kirkland Signature products, which arguably have the best value. If I want to buy something really specific and name brand — like a box of Larabars — the app can come in handy. But it doesn’t guide my shopping decisions, nor do I use it every time I shop in-store. It’s just a useful tool I keep on my phone.

4. Instacart

If you don’t want to get stuck in Costco shopping traffic — or bump carts with other anxious and hurried shoppers in the warehouse — having Costco groceries delivered through Instacart could be the way to go.

Of course, you’ll pay a premium to have them delivered. Instacart prices are higher for the same Costco products purchased in-store. On top of that, you might also pay service and delivery fees. It’s more expensive than doing the shopping yourself, but if you can’t get out of the house, it might be worth downloading.

5. Fetch Rewards

Like Ibotta, Fetch Rewards is an app that gives you points when you purchase certain products and scan receipts. When you’ve accumulated enough points, you can exchange them for gift cards at popular stores, like Starbucks or Amazon. Every receipt gets at least 25 points, but every now and then, certain brand name products, like Colgate’s toothpaste, will earn you more.

You can find some of these brands at Costco. Since you don’t need to activate rewards on the app, just scan your Costco receipts. You’ll get at least 25 points, plus a little extra if you bought something that’s part of a promotion.

All in all, these five apps can help you stay on top of ongoing deals, get extra rewards and cash back, and have Costco groceries delivered to you. And if you haven’t tried the Costco shopping app recently, give it a download. As Costco continues to upgrade the app, it will become more useful for your shopping.

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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 Costco Wholesale. The Motley Fool has a disclosure policy.

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Strong demand led to an uptick in home values between 2019 and 2022. Read on to learn more. 

It’s hardly a secret that when mortgage rates fell to record lows in 2020 and 2021, buyers were eager to take advantage. Back then, many mortgage lenders found themselves inundated with applications.

These days, there’s less demand for mortgages because rates are a lot higher. Also, limited inventory has fewer buyers pursuing home purchases.

But between 2019 and 2022, home values rose substantially. The median net home value, defined as the value of a home minus any secured debt attached to it, like a mortgage or home equity loan, rose from $139,100 to $201,000. That’s according to recent data from the Federal Reserve.

If you own a home whose value has increased, you have a prime opportunity to take advantage by tapping your home equity. But you’ll need to do so carefully. And because borrowing rates are so high right now, it’s actually not the best time to raid your equity, even if it’s gotten to a pretty high level.

The benefit of home equity

The more equity you have in a home, the more options you have. Home equity is defined as your home value minus your mortgage balance. If the market value of your home is $400,000 and you owe $250,000 on your mortgage, you have $150,000 worth of equity.

It’s often possible to borrow against your home equity in different ways. You could take out a home equity loan or line of credit and use that money to do everything from updating your living space to taking a vacation. Or you could do a cash-out refinance, where you borrow more than your remaining mortgage balance and use your excess funds for any purpose you want.

You’ll generally need decent credit to borrow against your home. But if you have an okay credit score, you may have a pretty easy time getting approved for something like a home equity loan, because that loan is secured by your home itself and the equity you’ve built in it. You might have a harder time applying for an outside loan, like a personal loan, if your credit is only okay.

The danger of tapping home equity

Falling behind on a personal loan or credit card payment could have negative consequences. But if you fall behind on mortgage payments in the case of a cash-out refinance or home equity loan payments, you could risk losing your home. So while the ability to tap your equity is a good thing in theory, it can also backfire on you.

Plus, tapping home equity leaves you with less of it. That could become problematic if you’re trying to upsize.

Furthermore, borrowing rates are generally high right now following a string of interest rate hikes by the Federal Reserve. So while you may have the option to borrow against your home, it’s not necessarily going to be a very cost-effective choice.

All told, it’s easy to see why home values rose so much between 2019 and 2022. Buyers were so eager to purchase homes at record-low mortgage rates that they were willing to pay just about any price.

The upside of that frenzy is that now, millions of homeowners are equity-rich and have borrowing options because of that. The downside is that first-time home buyers have been virtually pushed out of the real estate market due to affordability constraints.

Over the next few years, we could see home values decline modestly as the housing market cools off. But that’ll depend on a host of factors, including how mortgage rates trend.

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It’s natural to have savings for different purposes. Read on to see why maintaining separate accounts helps me keep my spending in check. 

I started building an emergency fund from the moment I was able to land a steady paycheck. In fact, technically I started building emergency savings during my teenage years, when my only income was a measly $5 an hour from babysitting. But I did a good job of sticking that money into the bank, even if it didn’t amount to much.

For quite some time, my emergency account was the only savings account I had. But over the past few years, I’ve opened several other savings accounts on top of that one. And that system has been instrumental in helping me manage my money.

Why separate savings accounts are essential for me

These days, I have a few different accounts:

My general emergency fund, which is meant to cover my non-negotiable bills in the event of unemploymentMy home repair/car repair/medical bill emergency fund, which is meant to cover those expensesMy vacation and home improvement account, which I can dip into for leisure purposes or to upgrade my living space, including buying furniture

The reason I keep my savings accounts separate is simple. I want to make sure I have a certain amount of emergency savings in case I lose my job or need to take time off of work and forgo earning an income. I also want to make sure I have funds available to pay for purchases like a new tire when I run over a nail (something that, grr, happened to me just a couple of weeks ago) or a new heating system for my house (something that, double grr, I also had to shell out money for this month).

At the same time, I want to be able to take withdrawals for fun expenses like vacations without having to stress about being short on funds for other important purposes. And keeping my accounts separate allows for that.

Also, it prevents me from accidentally dipping into the wrong pile of cash reserves. If I were to take a $4,000 withdrawal for a family vacation out of my home/car/medical fund, I might end up short on cash to cover those expenses the next time they arise. That’s stressful. And I don’t like stressful situations. So keeping my funds separate is a super easy way to avoid that.

Separate accounts could benefit you

A lot of people maintain a single savings account and call it a day. Actually, let’s backtrack. A lot of people don’t even have savings at all. A recent CNBC survey found that 61% of Americans live paycheck to paycheck, which generally means you have no savings to fall back on and can’t pay your bills until your next paycheck arrives.

But let’s assume you’re someone who has savings, and for a specific reason. It probably took a lot of work to build those savings. Do you want to risk dipping in for the wrong reason and winding up short after you made that effort to save?

Probably not. That’s why I highly recommend having separate savings accounts for different purposes. This isn’t to say you can’t transfer funds between accounts if you have to, though. If you have a $6,000 emergency fund and a $3,000 vacation fund, and then your home ends up needing a $7,000 repair, you could always take $1,000 out of your travel fund to make up the difference.

But let’s say you don’t have that home repair, and you do decide you want to spend a week in the Caribbean at a $2,500 price tag. If you’ve saved $3,000 for that purpose, you should be able to do so without guilt and without putting your finances at risk. So if you stick to a setup like mine, you can pull something like that off with relative ease.

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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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