Money Management

Holiday savings accounts are one way to budget for upcoming holiday expenses. Here’s what you need to know to decide if they’re right for you. 

There’s a lot to love about the holidays, but the extra costs they bring doesn’t make the list. A lot of people feel the strain as they try to make room for gifts, holiday meals, and travel costs on top of their regular monthly bills.

It’s possible to budget for these things on your own, but if you need a little help, you might consider a holiday savings account, also known as a Christmas Club account. Here’s what you need to know about them.

What are holiday savings accounts?

Holiday savings accounts are bank accounts that help people save money for holiday expenses. They used to be pretty popular, though they’ve become less so in recent years. Now you’ll usually only find them with smaller banks and credit unions.

These accounts often enable you to set up automatic transfers from your main checking account to the holiday savings account. You can choose how much you’d like to defer each time. The money remains there, earning a small amount of interest, until a certain date — usually Nov. 1 — when the bank releases the funds back to you. You can then put them toward any costs you like, including holiday travel expenses, food, or gifts.

If you attempt to withdraw money from a holiday savings account before the release date, you could face penalties or lose the interest you’ve earned. That could be problematic for those who like to do their shopping early. But some people might like having their money out of reach until then to discourage them from spending it on other things.

How do you open a holiday savings account?

The first step in opening a holiday savings account is finding one. Check with local banks and credit unions in your area to see if any of them offer something like this. Then, inquire about its terms to make sure you’re comfortable with them. Things you want to ask about include:

Initial deposit requirementsHow you can deposit funds into the accountMaintenance feesEarly withdrawal feesWhen you get access to your funds again

Once you’ve found an account you like, it’s pretty much the same as opening any other bank account. You’ll need to provide the bank with your ID, address, and other personal information. Then, when you’re all set up, you can fund the account.

What are the alternatives to a holiday savings account?

A high-yield savings account is a great alternative to a holiday savings account if you’re not comfortable losing access to your funds or you can’t find a holiday savings account you like. High-yield savings accounts are typically available through online banks and most don’t have monthly maintenance fees or minimum balance requirements.

As their name implies, it’s possible to earn interest more quickly with a high-yield savings account than it is with a holiday savings account. Some of the best high-yield savings accounts currently have annual percentage yields (APYs) of 4.30% or higher. Many holiday savings accounts, on the other hand, have APYs of 0.25% or less.

Some high-yield savings accounts also enable you to set up virtual envelopes where you can earmark money for specific goals, like holiday expenses. This might be a little easier for you to manage rather than a separate savings account at a different bank.

But there’s nothing wrong with giving holiday savings accounts a shot if you’re interested in them. Just make sure you understand how yours works so you don’t run into any unpleasant surprises.

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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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The childhood poverty rate has jumped above 12%. Read on to find out how you can help improve your personal finances. 

The latest data from the U.S. Census Bureau shows that the childhood poverty rate more than doubled last year to 12.4%, compared to a rate of 5.2% in 2021. The main reason for the jump came from the end of stimulus payments and expanded Child Tax Credits that helped families during the pandemic.

The result is that children and families who were lifted out of poverty during the pandemic have now fallen back into it, returning the childhood poverty rate to where it was before the pandemic. But what makes this especially difficult for many families right now is that inflation has soared since that time, making nearly everything more expensive.

Here’s a look at why some families may be struggling more than before, as well as a few suggestions to help get your personal finances on track if you’re having a hard time managing costs right now.

Spending on these three things has gone way up

Pandemic-era stimulus help was bound to end at some point, but the problem for many Americans is that their financial situation has become much more difficult over the past few years.

Expenses have soared for Americans, weighing down on their buying power. The latest data from the U.S. The Bureau of Labor Statistics shows that the average American household spent $6,081 per month in 2022, up from $5,557 in 2021.

Here are the three key areas where American spending has increased.

1. Housing spending is up 7%

The average amount spent on housing jumped 7.4% in 2022, after a 5.4% increase in 2021. Considering that housing is typically the largest expense in most people’s budgets, the rapid increase is causing pressure on many households. Americans spend 33% of their monthly income on housing, while many financial experts recommend spending less than 30%.

2. Transportation spending is up 12%

Transportation expenses include everything from buying a vehicle, fuel prices, and public transportation. Spending in the transportation category has risen sharply over the past year, with a 12.2% increase in 2022 coming on top of a 11.6% increase in 2021.

3. Food spending is up nearly 13%

And finally, one of the biggest spending increases for families over the past two years has been on food. Spending for food increased 12.7% in 2022 on top of an increase of 13.4% in 2021.

How to get your finances back on track

All of this increased spending has put pressure on many Americans and is likely the culprit for American credit card debt recently reaching a record $1 trillion.

Here are a few practical steps you can take to potentially help your situation.

Track spending with a budgeting app: Knowing where your money is going is a good first step to get your finances under control. There are easy-to-use budgeting apps that can categorize your spending for you, helping you find potential areas to scale back.Focus on housing and food costs: These expenses are two of the largest for most Americans, so it’s worth looking at a few ways to lower your food costs and housing expenses. For example, you may consider negotiating your rent with your landlord or researching government assistance programs.Watch credit card spending: Many Americans have reached for their credit cards as inflation has soared. I’ve begun pairing down my own card usage, and doing so has not only helped me keep track of spending better, but it’s helped me spend less.Assess your debt: Whether it’s credit card debt or other loans, taking a closer look at what you owe, what interest rate you’re paying, and how long it will take to pay off your loans is a first step to coming up with a plan to pay off debt.

There’s no quick fix for anyone who’s looking to get their finances back on track, but taking the time to look closely at your monthly payments, and assessing what can be changed, could be a great first step.

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Over 300,000 phishing schemes were reported to the FBI last year, with many more likely unreported. Here’s how to protect yourself. 

Email scams are on the rise. And sadly, criminals are getting more and more creative about finding ways to steal your cash. One common ploy is phishing — where hackers pretend to be a company or organization you trust so they can steal your confidential information. Phishing accounted for the highest number of internet crime complaints made to the FBI last year.

According to FBI data, criminals made off with $52 million through over 300,000 phishing schemes in 2022. Phishing emails might try to trick you into opening a file containing malware. Or they could direct you to a spoof website that looks like a real one, but steals your login information. Or they might give you false information about making a payment. Read on to find out how to spot scam emails and how you can protect yourself.

How to spot a fake email

Some phishing attempts can be relatively easy to spot. Others can be extremely targeted and sophisticated. The FBI highlighted a case where home buyers received a fake email, supposedly from their real estate agent with instructions on where to wire their $400,000 escrow payment. They made the payment, not realizing it was a fake message. In this case, the internet crime division was able to recover the money.

I recently received this email that pretends to be from Coinbase, a cryptocurrency exchange where I have an account. It bears many hallmarks of a scam email.

The sender email address is incorrect: It doesn’t come from Coinbase, it comes from a random gmail address. Plus, the sender is “Coinbase Team !” rather than just Coinbase. Other phishing emails might be more sophisticated, using a slightly misspelled domain name. In this case, it might have come from something like support@coinbse.com.It isn’t directed to me: My email address is not in the “to” box. Plus, the email doesn’t start with “Dear Emma” or any other personalized salutation. You might get an email that starts with “Hi” or “Dear customer.” Normally, my emails from Coinbase are addressed to me.It tries to scare me into action: I panicked when I first opened the email because I hadn’t bought (and didn’t want to have bought) over $1,000 worth of Bitcoin (BTC). That fear nearly made me click on the attachment to find out about the transaction. Other ploys might be to tell you there is a problem with your account or offer you something for free.The language is slightly off: The grammar or wording of phishing emails is often poor. In this case, the text that says “mentioned below with pdf” isn’t great English.

What to do if you receive a scam email

Luckily, I didn’t open the attachment. And I haven’t bought $1,036 worth of Bitcoin. After I’d taken a screenshot of the message, I marked it as junk and then deleted it. Marking it as junk means Gmail might get better at recognizing future phishing emails. Then I logged on to my Coinbase account to check there was no strange activity there. Here are some other steps you might take.

Contact the company directly

If the phishing email says there is an issue with your account or something that needs to be resolved, get in touch with the company. Open a new browser window and go to its website. You could also call, or if it is a bank, use its app. What’s important is that you don’t use the link you’ve been emailed — use contact information you know is correct.

Report the issue

If you do accidentally click on a scam link or attachment, there are steps you can take to protect yourself. Go to IdentityTheft.gov and fill out the form. It will tell you what to do based on what information might have been released. For example, if you’ve accidentally shared banking information, you can contact your bank to close the account and open a new one.

If criminals have your Social Security number, go to AnnualCreditReport.com to request free copies of your credit report from all three bureaus. You might also consider freezing your credit, which limits who can do a credit check using your information and makes it hard for someone to create an account in your name.

Run a virus scan

If you are worried, particularly if you’ve opened an unsafe attachment, run a scan on your computer. It should pick up any ransomware, viruses, or malware on your system. It’s important to keep your antivirus software up to date so it can pick up the latest threats.

How to protect yourself against phishing attacks

One of the best ways to protect yourself against scam emails is to be vigilant and look for the warning signs. In an ideal world, your email spam filter will weed out these types of messages, but if it doesn’t, relying on your instincts is the next best thing.

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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.Emma Newbery has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

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A savings account balance is a must at all times, regardless of interest rates. Read on to see why. 

It’s a pretty good time to have money in a savings account. Right now, you can earn upward of 4% on a savings account balance without taking on any risk — assuming, of course, that your bank is FDIC-insured and your balance is limited to $250,000 or less.

By contrast, when you invest in stocks or other assets, there’s the potential to lose some of the money you put in — or even all of it in an extreme situation. So the ability to earn more than 4% risk-free is something to be grateful for.

I know I sure am. But there was also a time when the interest rate on my savings account was so low it was pretty much a joke. For years, I basically had no choice but to accept less than 1% interest on my money for the privilege of being able to keep it in the bank.

But I don’t regret my decision to do that. And even if interest rates get back to that point down the line, I plan to continue to keep money in savings. Here’s why.

You need a safety net

SecureSave recently reported that 63% of Americans do not have enough savings to cover an unplanned $500 expense. But that’s a pretty upsetting statistic, because the reality is that every working American should really try to have a three-month emergency fund at a minimum. What I mean by that is a savings account with enough money to cover three full months of essential bills, like rent, food, and medication.

Of course, if you’re able to build up savings beyond that point, even better. But if you’re able to save up three months’ worth of expenses, you’ll have cash reserves to tap in the event of a period of unemployment. And you’ll also have money to access for things like sudden car or home repairs.

Meanwhile, I’ve always made a point to keep money in a savings account regardless of interest rates because I’ve experienced my share of financial hiccups. Years back, I lost my job out of the blue when my company had to make cuts. I was a good employee and hadn’t done anything wrong — but the business had to let a bunch of us go. I was able to cover my bills with relative ease until I found work again because I had a nice emergency fund to tap.

More recently, I’ve run into different home repair issues as my house has aged. I’ve needed to replace a water heater, air conditioner, and, most recently, two heating systems at the same time. And my emergency fund has come to my rescue on each of these occasions.

Would I rather keep my money in stocks and other assets when savings accounts are paying minimally? Sure. But then I run the risk of losing money.

Let’s say I put my emergency fund into stocks and the market tanks right when I need to take a large withdrawal. Suddenly, I’m locking in an investment loss and making an already yucky situation even worse.

Savings account rates shouldn’t be your deciding factor

If you have money you want to set aside for long-term goals, then by all means, invest it. But any funds you have earmarked for emergency expenses or situations, like unemployment, should stay in the bank — regardless of what savings accounts are paying.

In fact, don’t look at your emergency fund as an opportunity to make money. Think of it as a safe place for the money you need to have available at all times.

You can put your non-emergency savings to work by investing that cash in the hopes that it grows. But do yourself a favor and pledge to always maintain a minimal safety net in the bank — even if the interest rate on your savings account is horrendously low.

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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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There are some areas of Costco you may be inclined to walk by. Here are three worth checking out. 

When I go to Costco, there are certain areas of the store that I tend to make a beeline for. I pretty much always need produce and fruit, and I usually hit up the dairy section to check milk and other essentials off of my grocery list.

I know a lot of people who shop at Costco prioritize certain aisles. And there’s nothing wrong with that. But if you’ve yet to check out these underrated sections of Costco, you may want to give them a visit the next time you’re in the store.

1. The apparel section

You won’t find the same wide selection of apparel at Costco as you will at a department store. But Costco’s apparel section tends to change on a seasonal basis. And often, you’ll find great buys at affordable prices.

I was at Costco recently and scooped up a couple of warm women’s fleeces for under $15. I also grabbed rain jackets for my kids since they were on sale. Because my children are constantly losing things like that, it pays to stock up on extras when there are savings to be reaped.

If you’re looking for high-end business attire, Costco’s apparel section isn’t the right place to look. But if you could use some fall or winter staples, then it pays to check out the apparel section and see what you find.

2. The toy aisle

I’ll be the first to admit that I find Costco’s toy aisle a bit hit or miss. But when it’s a hit, it’s a big one.

A couple of years ago, when my daughters were really into the movie Frozen, I found these bundles of Frozen-themed art supplies that included multiple coloring books, markers, stickers, journals, and more.

Now, because this was a years-back purchase, I won’t pretend to remember what I paid. What I do remember, however, is paying a lot less for my Costco Frozen bundle than what it would’ve cost me to piece those items together from Target or Amazon.

That’s why I think the Costco toy aisle is worth a visit, especially around the holidays or if you have a child’s birthday coming up. You may not find the biggest selection, but sometimes, all it takes is one unique item to make that stop worth it.

3. The bakery

You might think that a bakery that mass-produces cake and bread on a daily basis won’t be any good. That would be wrong.

Not only are Costco bakery items fresh and delicious, but the prices really can’t be beat. A 12-pack of mega-muffins, for example, is just $9.99 at my local Costco (prices can vary by location).

Plus, Costco bakery items tend to rotate seasonally. In the fall, you’ll find amazing pumpkin streusel muffins and pie, for example.

It’s worth checking out the Costco bakery the next time you’re tasked with bringing a dessert item to a party or potluck. But do note that Costco’s bakery isn’t nut-free, and that even items without nuts in them may not be safe for those with allergies due to cross contamination.

You may be someone who prefers to stick to basics like groceries and household supplies at Costco. But if you’ve yet to check out the apparel, toy, or bakery section at Costco, then it could pay to stop by the next time you have a little extra time. You may be pleasantly surprised at the selection you find — not to mention the prices.

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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. Maurie Backman has positions in Amazon.com and Target. The Motley Fool has positions in and recommends Amazon.com, Costco Wholesale, and Target. The Motley Fool has a disclosure policy.

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Will an advanced business degree justify its high price tag? Here’s what you need to know before you enroll. 

As a general rule, advanced degrees can result in increased earning potential throughout your career. And this is definitely true when it comes to Master of Business Administration, or MBA, degrees. The average MBA earns a six-figure salary in all 50 states, and many even receive signing bonuses and increased job security.

However, an MBA can be an expensive degree to get. In this article, we’ll take a closer look at the costs and earning potential of MBA programs, and how to determine whether pursuing an MBA is a wise move for you.

How much does an MBA cost?

There’s no set cost of an MBA — it depends on where you choose to go to school. According to data from the Education Data Initiative, the average MBA degree costs about $61,800, but this can vary tremendously. A Harvard Business School MBA will cost nearly $113,000, while it’s entirely possible to complete an MBA at an in-state school for less than $20,000 in some cases.

However, these figures just refer to tuition costs. Including tuition, fees, living expenses, healthcare, and other costs associated with attending school, the true cost is likely much higher.

According to a Business Because report in partnership with Emory University, the total cost of attending an MBA program in the United States in 2022 was $225,605 including all of the above expenses, and the typical program takes two years to complete. The total cost ranged from $84,500 to $246,506, depending on the school. This is money that could be invested or saved instead. So it’s not entirely the on-paper cost that’s the problem, as there can be a high opportunity cost associated with a higher-level degree.

However, it’s worth noting that this could be deceptively high depending on your situation — for example, if you are completing an MBA program while continuing to work (as opposed to being a full-time student), your healthcare and living expenses are roughly the same whether you are enrolled in the MBA program or not.

How much can you earn with an MBA?

According to ZipRecruiter, the national average salary for someone with an MBA is $137,407 per year. The salary range for the 25th through 75th percentiles is $97,000 to $193,000. Of course, there are other factors, such as the nature of your job, your experience, and more.

There’s also a big difference between geographical locations. A worker with an MBA in Washington State earns an average salary of $162,890, but in Arkansas, you can expect to earn $103,276 on average.

It’s also important to compare the income you might expect to get from an MBA to what you can earn without it. In other words, think of it in terms of the potential pay increase. Is it worth spending $100,000 for a degree that gets you a permanent $30,000 annual pay increase? Maybe. But is it worth spending $100,000 to add another degree to your resume but still earn roughly the same salary you do now? Probably not.

Is an MBA worth it to you?

The question isn’t whether an MBA is worth it. The better question is whether an MBA is worth it for you. By taking the costs (and possible missed opportunities to contribute to your savings account) and expected future salary into account, you’ll be in a strong position to make the best decision for your future.

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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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