Money Management

Everyone wants to feel valued at work, and salary is a big part of that. Here’s how to see if you’re getting your fair value. 

Workers aren’t happy. According to Gallup’s State of the Workplace report, less than a quarter of workers feel engaged by their jobs, and more than half rate their current employee well-being as “struggling.”

If we’re going to deal with all that nonsense, we can at least get paid fairly for it, right? But how do you make sure you’re actually getting your fair share? You need to know how your salary stacks up — and what to do when it doesn’t. Let’s start with figuring out your own worth as a worker.

How to tell what you’re worth

You can’t determine if you’re being paid well if you don’t know what you’re worth in the first place. Figure out what is typical for your role, as well as what you’re personally worth based on your experience and accomplishments.

1. Research your role

You can find a ton of useful salary information with a few internet searches. Try these places to get started:

Salary comparison sites: Sites like Glassdoor, SalaryExpert, and Salary.com are all examples of sites that compare salaries for various positions based on user feedback.Job listing sites: Hit up Indeed, LinkedIn, Monster, and other job listing sites to see what salaries are being advertised for roles similar to your own.Social media: Every industry has its own corner of social media, be it a Facebook group or Reddit sub. Hit the FAQs or make a post to find out what other people are being paid for similar jobs.

2. Chat with coworkers

Another way to gauge what your position is worth is by comparing your salary to those of coworkers in similar roles. And no, despite what some employers may prefer, they legally cannot stop you from discussing wages with your coworkers (on your own time; they can prohibit you from doing it while on the clock or in front of customers).

Keep in mind that there are a lot of reasons you may not make the same salary as your coworkers, and they’re not all unfair or based on malice. Experience in the role, time with the company, educational background, geographical location — any of these factors could be good reasons for salary differences within a company or even department.

3. Interview elsewhere

One simple way to see what you’re worth in the job market is to, well, enter the job market. It’s always a good idea to periodically update your resume, so brush it off and apply for a position that looks similar to your own. You’ll know your current salary isn’t quite right if the offers you receive are drastically different.

Negotiating a better salary

The key to successfully negotiating for a better salary is to be prepared. Here are a few things to consider.

1. Know your stats

It’s a lot easier to win a salary negotiation when you can objectively prove you deserve more money than you’re making. Gather statistics about how many projects you completed or how many sales you’ve made for the company. (It’s generally best to avoid mentioning your personal finances or expenses. Use your accomplishments to show your value to the company.)

2. Set a goal

Decide exactly what you want to accomplish. Are you happy with any kind of pay bump, or are you aiming for a certain rate based on your research? Do you want a promotion in title or position, or just the pay raise? Have a starting number in mind when they ask — and a compromise number for when they counter.

3. Have a back-up plan

If you get what you’re after, great! If not, what’s your recourse? Do you ask about potential paths forward? Do you go home and start looking for new jobs? In either case, don’t make any hasty decisions. For instance, if you threaten to quit as a negotiation tactic, be prepared if they decide to call your bluff.

No matter how it goes, keep your cool and stay respectful. You’re trying to improve your career, not burn bridges!

It may be time to move on

If negotiation isn’t going your way (or you’re just ready for a change), it may be time to move on to the next role. In fact, it may even be for the best.

Statistically, you’ll get a better salary bump by switching employers than you will by staying. The ADP Pay Insights study shows workers who switched jobs saw year-over-year salary increases of 9%, while those who stayed had a median year-over-year increase of just 5.9%.

While getting a new job could lead to a pay bump, it’s not guaranteed. The job hunt itself will likely be stressful, and taking a new position could mean moving or other lifestyle changes. But it could still be worth putting out a few applications here and there to see if there are better roles for you.

If you receive an offer, be sure to negotiate for the salary your research shows you’re worth. Also, don’t forget that salary isn’t everything; better benefits can be worth as much, if not more, than a simple bump in pay. For instance, an extra week of paid time off could be worth more (financially and personally) than an extra $1,000 a year in your bank account.

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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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Hotel credit cards could be your ticket to free stays and more. Learn more about them and how to decide if this is the right type of card for you. 

If you want to earn points you can redeem for free stays, a hotel credit card could be the answer. Many popular hotel chains, including Marriott, Hilton, Hyatt, and IHG, have valuable credit cards tied to their loyalty programs.

You might be asking yourself just how frequently you need to stay at a specific hotel chain for one of its credit cards to be worth it. Although this may be surprising, you don’t need to be a frequent guest to get your money’s worth from a hotel card.

Here’s when a hotel credit card is right for you

Hotel credit cards offer hotel-specific benefits. For that reason, the more you stay at a hotel chain each year, the more you’ll get out of one of its credit cards. But that doesn’t mean a hotel card is only a good idea if you stay there often. If you stay at a hotel at least once per year, you could benefit from a hotel credit card.

Here’s why: Many of the best hotel credit cards offer an annual free night certificate. The cards that offer this benefit also charge annual fees, but you can easily come out ahead just from the free night alone.

For example, there are several hotel cards with $95 annual fees and annual free night certificates. If you get one of those cards and use your free night at a hotel charging $200 per night, then you’re already up $105. And that’s just one perk. There are plenty of other benefits hotel cards offer, which can include:

Welcome offers where new cardholders can earn a large number of bonus points for reaching a spend requirementBig bonus points on purchases at the hotelComplimentary elite status in the hotel’s loyalty program, entitling you to special benefits

Benefits tend to be more impressive with hotel cards that have higher annual fees. But there are good hotel cards starting at about that $95 range, so you have options if you’re looking for one that doesn’t break the bank.

I used this very approach when deciding if I’d get a hotel credit card. Before I opened it, I thought about whether I’d be staying at that hotel over the next year. I was, and that made my decision pretty easy. After that, it was just a matter of comparing that hotel’s credit card options and picking the one with the benefits I liked the most.

If you’re not sure about hotel credit cards…

There are also more general travel credit cards that aren’t tied to any hotel loyalty programs. For example, cards in the Chase Ultimate Rewards program earn points that you can transfer to any of Chase’s airline or hotel partners. You can also use those points to book cash travel purchases through the Ultimate Rewards travel portal.

Other card issuers, including American Express and Capital One, have similar rewards programs. These give you more redemption options than you’d have with a hotel credit card. You could potentially use your points for hotel stays, airfare, or other types of travel purchases. With a hotel credit card, you’ll need to use your points for stays at that specific hotel.

It’s easy to get your money’s worth from a hotel credit card. If it offers an annual free night certificate, you shouldn’t have any trouble getting back more than what you paid for an annual fee. But if you aren’t sure how often your travel plans will involve the same hotel chain, consider other travel cards with more flexible points and rewards programs.

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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.American Express is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool recommends Hyatt Hotels, InterContinental Hotels Group Plc, and Marriott International. The Motley Fool has a disclosure policy.

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You don’t need to have an elaborate investment portfolio to build wealth. Keep reading to find out why. 

When it comes to investing, you don’t need to do extraordinary things to build an extraordinary amount of wealth. There’s a common misconception that in order to achieve decent investment returns in the stock market, you need to know how to analyze stocks and construct a portfolio of individual stocks with your money. However, you might be surprised at how simple index fund investing can build wealth for your future.

With that in mind, let’s take a look at how index investing works and how much wealth you could build by investing $5,000 per year (about $417 per month) in a simple portfolio of index funds.

What are index funds?

You can read my primer on index funds for a thorough overview, but here’s the quick version.

An index fund is an investment vehicle that pools investors’ money together and aims to track the performance of a certain benchmark index. As a basic example, an S&P 500 index fund would invest in all 500 companies that make up the index, in the correct proportions, to achieve the same overall investment performance as the S&P 500 over time.

The idea is that while returns of individual stocks can vary widely over time (and even go to zero in some cases), the overall stock market tends to do quite well over time. Legendary investor Warren Buffett — who says that index funds are the best investment most people can make — summed it up nicely when he called index investing as a “bet on American business.”

Now, index funds aren’t free, but their expenses can be remarkably low when compared with actively managed mutual funds. After all, because index funds simply track a benchmark index, there’s no need to employ portfolio managers and analysts to choose stocks. Some of the top S&P 500 index funds have fees (known as expense ratios) of as little as 0.03% per year — so you’d pay just $3 for every $10,000 you have invested.

Index funds are available as both mutual funds and exchange-traded funds, or ETFs. ETFs are usually the easier way to invest, as ETFs trade just like stocks and ETFs can be bought and sold whenever the market is open.

How much wealth could you build from $5,000 per year in index funds?

To be perfectly clear, stock market returns can vary significantly over short periods of time, and there’s no guarantee that index funds based on benchmark stock market indices will go up over time. In fact, over the past 50 years, the S&P 500 has gained as much as 38% or lost as much as 37% in a single year. So, be prepared for short-term turbulence.

Having said that, when measured in decades, stock market returns are rather consistent. Since 1965, the average annualized return of the S&P 500 is 9.9%, and keep in mind that this includes the dot-com crash, the financial crisis of 2008-09, and the COVID-19 pandemic, just to name a few crash-inducing events.

Again, there’s no guarantee that the exact same long-term returns will occur over the next few decades, but if you invest $5,000 per year in index funds at this rate of return, here’s how your money could grow.

How to get started

There are dozens — if not hundreds — of excellent low-cost index funds you could choose from, so there isn’t one perfect way to get started. A core S&P 500 index fund can be a great backbone to your portfolio, and you can also branch out into other types of funds. Vanguard and Schwab are two examples of financial services companies that have many low-cost index fund options, and while you can buy their index ETFs and mutual funds through any online broker you choose, they both have some excellent information on their respective websites that can help you decide.

Alternatively, you could put your index fund investing on autopilot by choosing one of our top-rated robo-advisors. A robo advisor will invest your money in an automated portfolio of index funds that is appropriate for your age, risk tolerance, and investment goals.

Whichever way you choose, an index fund investor’s best asset is time — so there’s no better time to get started than 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.The Motley Fool has a disclosure policy.

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There are many ways to make $1,000 earn money for you. Here are just a few of them. 

You know something the wealthy are very good at? Making their money work for them. When they lie down to go to sleep at night, they want to know that their money is hard at work. The rest of us may not earn millions of dollars as we dream of building another yacht in the Netherlands, but we can steadily increase our net worth by making good decisions about where our money is going to hang out.

Earning passive income is not just for the wealthy. Here’s how we can all get started, with as little as $1,000.

1. Purchase dividend stocks

Let’s say you purchase stock in the Dang, That Stings Rubber Band Company. You are now a part-owner. Sure, you may own a teeny, tiny slice of the company, but darn it all, you’re still an owner.

While not all publicly traded companies do, Dang, That Stings Rubber Band Company pays dividends. A dividend is an amount of money that a company regularly pays its stockholders out of its profits (sometimes referred to as “reserves”). Typically, companies pay out quarterly.

Purchasing $1,000 in stock in a company that pays dividends is one way to produce passive income. You can cash out those dividends and tuck them into your savings account, or you can reinvest them, slowly growing the amount of stock you own in the company.

Note: If you want to invest in dividend-paying stocks, make sure the companies you’re interested in pay them.

2. Make like Mr. Monopoly

I can’t swear to it, but I’ve always suspected that Mr. Monopoly is heavily into lending money to Uncle Sam. Here’s how I believe he does it:

First, he goes to TreasuryDirect.gov. That’s where he can directly invest in the U.S. government.Mr. Monopoly then determines whether he’s in the mood for short-term debt like Treasury bills, mid-term debt like Treasury notes, long-term debt like Treasury bonds, or inflation-protected debt like I bonds.

Mr. Monopoly may be flashy, but he’s also concerned with protecting his money. Each of these investments is backed by the full faith and credit of the U.S. government.

3. Build an emergency fund

One of the least sexy, but most important, investments you can make is in your personal financial security. Let’s say you wake up one morning and rain is coming through the ceiling in your kitchen. Even without being quite awake yet, you realize that it’s not supposed to rain into your kitchen. A contractor swings by and you learn that it’s going to cost $7,500 to make repairs to your roof, attic space, and kitchen ceiling.

Fortunately, your homeowners insurance will pay the majority of the cost. However, you have a deductible of $2,000 and there’s no money in your savings account to cover the cost. You end up putting the expense on a charge card with an interest rate of 17%.

You mean to pay the $2,000 expense off by the end of the first billing cycle, but one thing after another comes up and you can only pay the minimum monthly payment of $50. Before you know it, you’ve been carrying that same $2,000 debit for 12 months. Unless you can come up with the money to pay the credit card off, you’ll carry that debt for another four years and end up paying a total of $972 in interest.

If you don’t have an emergency savings account with enough money in it to cover a leaky roof (bald tires, broken water heater, unexpected medical expense, or other unwelcome surprise), you may find yourself paying interest rather than earning it.

Before you look for ways to make your money grow, make sure you have a sufficient amount of money put away for emergencies.

You may only have $1,000 to invest right now, but we all start somewhere. The great thing about having any money to invest is that warm feeling you get when someone pays you interest — rather than the other way around.

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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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With an airline credit card, you can earn miles on your everyday spending. Check out a simple, easy way to decide if an airline card is right for you. 

All the major U.S. airlines, including American, Delta, United, and Southwest, offer their own credit cards. If you apply for one, you can start earning miles on your regular expenses. Many airline credit cards also have welcome offers that give you the opportunity to earn bonus miles if you spend enough.

There’s a lot to like about these credit cards. You could fly nearly for free using miles and potentially score other useful benefits as well. But airline cards aren’t right for everyone. The good news is that there’s an easy way to figure out if you should open this type of credit card.

Here’s when an airline credit card is right for you

The more you fly with an airline, the more value you’ll get out of one of its credit cards. As a general rule, if you fly with an airline at least two or three times per year, an airline credit card is likely a good choice.

You’ll be able to earn lots of miles this way. Most airline credit cards earn a base rate of 1 mile per $1, and more in bonus categories. When you fly with an airline regularly, you also won’t have any trouble using the miles you earn. Instead of paying cash for three flights per year, you could potentially pay for two in cash and use your miles to cover the third.

Miles are far from the only benefit that airline cards offer. Here are some other benefits you can find with some airline credit cards.

Free checked baggageAn annual companion certificate allowing someone to fly with you at a discounted rateAccess to the airline’s airport loungesAccess to the priority check-in line and priority boardingComplimentary upgrades

Airline cards with more expensive annual fees tend to have far more benefits. A no annual fee airline card probably isn’t going to get you into any airport lounges. But one that costs $95 per year might include a few lounge passes, and cards that cost $450 to $550 per year often have unlimited lounge access.

If you like flying with an airline, make sure to compare its credit card options. For example, if you fly with Delta all the time, check out the benefits of all the Delta credit cards. See which one best fits your travel habits. If you fly all the time, paying a higher annual fee could be worth it. If not, a less expensive card could be the way to go.

Alternatives to an airline credit card

Airline credit cards can be useful for some people, but they serve a relatively small niche: frequent flyers with a specific airline. They don’t work well for people who don’t fly often or for travelers who aren’t loyal to any particular airline. If either of those apply to you, here are the best alternatives.

Travel credit cards that aren’t tied to an airline: These have more flexible travel benefits, including rewards that you can redeem toward more types of travel. They let you either transfer rewards to a number of airlines and hotels, redeem rewards for travel at a fixed value, or both. You’re not limited to only using your rewards with a single airline.Cash back credit cards: If you’re only an occasional traveler, a travel card may not be worth it. You could get more value from a cash back card. Cash back is easy to use, and many of these cards earn bonus cash in popular spending categories, such as gas and groceries.

There are a lot of great credit card offers to choose from. Airline credit cards can be worth it if you have an airline you really like. If not, a more general travel card or a cash back card is probably the better choice.

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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.Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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How do you stack up against the average household and how much is enough in checking? Read on to find out. 

The average household has $10,618 in their checking account, according to the latest edition of the three-times-a-decade Federal Reserve Board Survey of Consumer Finances (SCF). But how much is enough for you? In this article, we’ll take a closer look at the data, and what you should keep in mind when deciding how much is enough to keep in your checking account.

American households’ checking account behavior

As mentioned, the latest edition (2019) of the SCF found that the average household had $10,618 in their checking account. While this may have changed a little in the past few years, it should still be a solid ballpark estimate.

What’s more, the median checking account balance was just $2,000 — meaning that half of households had less and half had more. I’ll spare you the math lesson, but when a median is much lower than the average of a set of numbers, it means the data is being skewed by larger values.

In simple terms, it means there are some people with a lot of money in checking. For our purposes, the median is a better indicator of what the typical household keeps in their checking account.

There are a few other interesting statistics from the checking account data:

The highest checking account balances are held by older Americans. The average household headed by someone aged 75 or older has $17,299 in checking.Households led by college graduates have more than twice the overall average in their checking accounts.Households with two adults (like a married couple, for example) have more than $14,000 in their checking accounts on average, compared with less than $6,000 for adults living alone.

How much should you keep in your checking account?

When it comes to your cash, aside from your investments and emergency savings, there’s a balancing act between keeping enough in your readily accessible checking account and maximizing the amount in your savings account that typically pays a better interest rate.

In a nutshell, the goal is to keep enough in your checking account that you don’t have to worry about whether there is enough to cover bills and day-to-day expenses, but not so much that you have too much of your money sitting there earning little or no interest. After all, you definitely want to avoid overdrafts, and have enough money to be able to access cash when you need it.

On the other hand, there are some excellent high-yield savings accounts that offer yields of 4% or more right now, so you could be missing out on hundreds of dollars of essentially free money if you have too much in checking.

A general rule of thumb used by financial advisors is that you should try to keep one to two months of your living expenses in your checking account. A good way to figure out your living expenses is to access your last few months’ worth of checking account statements and take an average of how much money flows out of your checking account in the average month.

So, if your monthly bills and general spending add up to about $5,000 in the typical month, you should aim to keep your checking account balance between $5,000 and $10,000.

The bottom line is that right-sizing your checking account balance if it isn’t already could be a smart financial move. If you don’t have enough in checking, consider letting some of your deposits build up before transferring any more to savings or investing accounts. And if you have too much, explore some of the higher-yield options available to you like savings accounts or CDs.

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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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