Money Management

Checking accounts are safe places to deposit cash. But they’re not the best place for all your money. Learn why you shouldn’t keep ample cash in your checking account. 

For as long as I can remember, I’ve never kept more than what my monthly budget calls for in my checking account. Over the years, I’ve treated checking accounts as a kind of layover for my paychecks. It’s not the final destination but a hub that transfers money to different places, like my IRA or savings account.

Some people disagree and stash lots of cash in their checking accounts. I can understand their reasoning: Checking accounts offer easy access to cash and are often more flexible than, say, a CD or high-yield savings account. But for as much as a checking account can make you feel secure, here are two reasons why I would advise against storing too much cash there.

Checking account money is too easy to spend

Like it or not, checking accounts make it easy to spend money. Without the added friction of transferring money out of a savings account, this could lead you to squander your hard-earned cash.

To be clear, easy access is fine if you have a purpose for your money. For example, if you’re moving into a new house, you’ll need cash on hand to cover the expenses. But without a purpose or plan, you can become tempted to spend money instead of saving it, leaving big personal finance goals, like saving for a home down payment or retirement, untouched.

If unused cash is burning a hole in your pocket, you could restrict access — not to mention earn high interest — with a certificate of deposit (CD). CDs offer you a competitive interest rate in exchange for locking your money up for a certain period, like 12 months. Often, CDs have early withdrawal penalties, which could discourage you from touching your money. Even a short-term CD, like 3 to 6 months, could help you capture interest without locking your money up for long periods.

Interest is essentially null

Even if you’re not a big spender, stashing cash in your checking account is inefficient for the rock-bottom rates these accounts pay — if they pay interest at all.

In comparison, today’s top-paying savings accounts offer lucrative rates that can help your money grow with (or outpace) inflation. Don’t overlook that. If inflation has affected your household budget, today’s high-yield savings accounts can help you offset higher costs with money earned on interest.

Of course, savings accounts add some friction between you and your money. Some high-yield savings accounts even restrict how many times per month you can withdraw money and how much you can take out daily, weekly, or monthly. If access is important to you, a money market account (MMA) could be the perfect middle between flexibility and high interest. These accounts have attractive interest rates and may come with debit cards or check-writing privileges. Some banks will even let you set up direct deposits in an MMA, which could bypass using a checking account as a middle ground.

That said, certain checking accounts will offer high interest on your deposits. Check the fine print, however, as some may earn high interest up to a certain amount (like $1,000), whereas others will require large minimum balances to activate the high APY.

Keep only as much as you will spend

To be sure, I do keep money in my checking account. I know in advance how much we’re going to spend for the month and I keep only that to cover bills and rent. If we have money left over when the month ends, we divvy it up between my IRA and our down payment fund (a high-yield savings account). I also like to keep at least $100 in the checking account. That way, I don’t risk overdrafting the account.

Even if you’re hesitant about moving money into accounts with less access, there are still strategies that could give you greater flexibility without missing out on high interest. Take care not to depend solely on your checking account, and keep your options open so you can outpace inflation and prevent yourself from overspending.

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There might be more than meets the eye (or nose) happening with a home for sale. Keep reading to learn about deceptive home-staging tricks. 

Buying a home is probably one of the more stressful activities you can undertake. Not only do you have to get your finances in order and shop around with mortgage lenders, but you need to visit homes for sale. That part of the process might be fun, actually! When you show up to open the closet doors and dream about looking out the kitchen window while brewing your morning coffee, be sure you also consider these staging tricks that some home sellers employ.

1. Rugs — especially in odd places

Rugs are one of the easiest ways to dress up your living space for not much money. For example, at my favorite home furnishings store, you can buy a cute washable 5′ x 7′ rug for less than $100. So it probably won’t be surprising to see rugs on the floor of any home you’re checking out. It’s a good idea to consider exactly where they are, though — a rug placed in an odd corner of a room could be covering up damaged or stained flooring.

2. Curtains and other window coverings

Curtains, blinds, and other forms of window dressing are wonderful to have — you can control the reach of natural light and maintain your privacy. But be sure to open those blinds or pull back those curtains when you visit a home for sale. After all, they could be serving to conceal a broken window, rotten frame, or even just a window that is smaller than it appears based on how the curtains are hung.

3. Furniture concerns

With pieces of furniture, you should consider the size of the furniture as well as how it’s placed in the room. A living room with only a love seat might be a bit small to fit your beloved full-size sectional sofa. Or a bedroom with a full-sized bed might not be suitable to become your new guest room with queen-sized sleeping accommodations. Rather than relying on furniture sizes to judge the size of a room, consider bringing a tape measure to a viewing.

And if a piece of furniture seems oddly positioned, it’s worth asking the real estate agent if you’re allowed to move it for a quick look. You might find torn-up carpet underneath, or a damaged wall behind it.

4. Air fresheners and potpourri

Use your nose when you explore a home for sale. You might assume that smelling air fresheners, a bowl of potpourri, or even those cookies the sneaky listing agent baked right before the open house means that all is well. There could in fact be a cause for concern, though. A heavy air freshener smell is likely covering up other, less-pleasant odors, such as that from a pest infestation, mildew, or 30 years’ worth of cigarette smoke that has seeped into the walls.

5. White noise machines and music

Yes, you need to use your ears when you visit an open house or attend a private showing, too! Is there music playing, or maybe a white noise machine? These could be covering up sounds from the street or the neighbors’ kids yelling in the backyard. Ask the agent to turn off whatever’s making noise, and spend some time listening to the ambient sounds you hear. If you value peace and quiet, you probably don’t want to buy a home next door to one that houses half a dozen barking dogs, or on a busy street with lots of traffic noise.

6. Fresh paint

A lot of people dip into their checking accounts so they can paint their walls a neutral color before listing their homes for sale, and that makes sense. If you provide a blank canvas for potential buyers, they’ll imagine their own favorite colors and treasured artwork on the walls. But if you notice fresh paint in conjunction with other suspicious choices (like odd rug and furniture placement), it should put your wind up a bit. Did the sellers paint their home because of a recent water leak? Or were the walls cracking because of a foundation problem?

If you attend an open house or a private showing of a home for sale, you might be focused on the home’s location and various amenities. But it’s worth paying attention to furniture placement, window coverings, and fresh paint — because each of these could tell you more of what you need to know before you make an offer and get ready to sign for a mortgage loan.

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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.
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Soon millions more students will be able to get school meals at no cost due to a recent program change. Find out how it will help. 

Many K-12 children utilize the national free school breakfast and lunch programs. It can be difficult for families to afford to put enough food on the table when they have limited funds in their bank accounts. Programs like this ensure their children can get nutritious and filling meals throughout the school year as they continue to grow and develop.

The U.S. Department of Agriculture (USDA) recently announced an upcoming eligibility change that will result in millions of additional children in high-poverty communities qualifying for free school meals. An estimated 3,000 school districts in high-need areas will benefit.

The USDA is expanding access to free school meals

On Sept. 26, the USDA announced it would expand the availability of its Community Eligibility Provision (CEP) program beginning on Oct. 26, thanks to a program change.

Through CEP, eligible schools in low-income areas can serve breakfast and lunch at no cost to all students without requiring families to fill out application forms. Removing burdens like application requirements helps to ensure kids don’t go without food.

What’s changing is the eligibility requirements for schools to qualify for CEP. Currently, for a school or group of schools to be eligible for CEP, 40% of students have to live in households that participate in certain income-based federal assistance programs, like the Supplemental Nutrition Assistance Program (SNAP).

Beginning on Oct. 26, the percentage will be reduced to 25%. This will give schools more flexibility and help more students qualify for free meals. The program change will give approximately 3,000 additional school districts in high-need areas the opportunity to offer no-cost breakfast and lunch to all students.

A recent news article from the Associated Press notes an additional estimated 5 million students will become eligible for free breakfast and lunch due to this program change. This news will positively impact many families in need.

Don’t ignore public assistance programs like SNAP

If you’ve been struggling to feed your family, please know you’re not alone. According to the USDA, nearly 34 million people in the United States are food insecure.

If you think that you may be eligible for SNAP, you should consider applying for benefits. If you were previously ineligible, but your circumstances have changed, it’s worthwhile applying again. You don’t want to ignore benefits you may be eligible to receive.

Recipients of the federal program receive monthly funds that can be used to buy eligible food and drink items. SNAP could help you supplement your grocery budget if you qualify for benefits.

Additional support like this can make a big difference as you work to improve your personal finances.

Food banks are another resource that can help

If you don’t qualify for SNAP but are struggling financially, other resources are available to help ensure your family doesn’t go hungry. Food banks are one option to explore. You can visit food banks in your community to pick up free food. Feeding America has a free local food bank finder on its website if you’re unsure where your closest food bank is.

Resources like the ones mentioned above can help you stretch your budget further during difficult financial times. Additionally, don’t forget to look for other resources in your area. There may be local organizations that can help provide food or financial support.

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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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Buying a home is more expensive than ever these days. Here’s where people are finding a little relief. 

According to a recent report by Redfin, there’s quite a bit of relocation going on in the United States. People are leaving cities like San Francisco, New York, and Los Angeles in large numbers and are heading for warmer climates and lower housing costs.

While some destinations are seeing a great deal of net inflows of new households, the city that topped the list in the second quarter of 2023 is none other than Las Vegas, Nevada.

People are downsizing their housing costs, not their lifestyles

Las Vegas has become a popular relocation destination for a few reasons, but the most likely factor is home affordability. With mortgage rates more than double where they were in early 2022 and home prices spiking higher compared with pre-pandemic levels, affordability has become a much larger factor when people are deciding where to live.

In the case of Las Vegas, consider that the top three markets home buyers are choosing to move away from are Los Angeles, San Francisco, and Seattle. And all three are very expensive.

For example, the median home sale price in San Francisco is over $1.4 million and the median mortgage payment is $9,281 based on a 6.7% rate on a 30-year fixed mortgage. Simply put, many people can’t afford that. In both Los Angeles and Seattle, home prices are more than double what they are in Las Vegas.

In Las Vegas, the median home sale price was $412,000 in June, according to Redfin’s data, which translates to a far more affordable monthly payment of $2,721.

So, for first-time buyers who had been renting in one of those markets, Las Vegas is a much more affordable place to buy a first home. And for people who owned a home in one of those markets and are now relocating, now could be a smart time for them to sell at an elevated price and roll the proceeds into a more affordable home in Las Vegas.

Other reasons why Las Vegas tops the list

Beyond the affordability factor, there are a few other likely reasons why Las Vegas has become such a popular destination:

The availability of remote work has surged, and that’s especially true for companies based on the West Coast. This means more people are able to work from wherever they want.Las Vegas is within driving distance of the major California cities. There are other affordable markets in the United States, but Las Vegas allows people to live in a major metropolitan area without moving too far away.Las Vegas has a warm climate. Of the top 10 cities people are relocating to, all of them are in warm areas. For example, Tampa and Orlando are both on the list, and the top market people are relocating from is the New York metro area.

This could be a sustained trend

As a final thought, it’s important to note that people aren’t just starting to leave expensive cities in favor of lower-cost areas with nice weather. In fact, the net inflows to the Las Vegas area are actually lower than they were in the second quarter of last year, and that was before the worst of the mortgage rate increases worked their way into the market. All 10 of the cities on the new list also had positive net migration a year ago. So, this is a continuation of a long-tailed trend and could potentially last for years to come.

Having said all that, although Las Vegas is an affordable and warm place to live, that doesn’t mean it’s a great fit for you. If you’re looking for a new place to live, be sure to explore a few cities that have characteristics that matter to you before making a decision.

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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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