Money Management

Sometimes, it’s okay to tap your savings for fun purposes. But it’s important to keep your fun savings separate from your emergency savings. Read on to learn more. 

Like many parents of school-aged kids, I find summer to be the easiest time of the year to travel. And I actually got to take two vacations this past summer — one kid-free trip with my husband and a family trip at the end of August.

I’m definitely not a fan of charging expenses on a credit card and paying off a balance over time. So rather than do that, I dipped into my savings to cover the cost of my trips. But I didn’t feel guilty or stressed about that for one big reason.

When you’ve saved specifically to take a vacation

Normally, it bugs me to take withdrawals from my savings to do things like cover medical bills or home repairs. And I sometimes worry when I have to raid my emergency fund for these purposes. But the reason I didn’t feel bad or worried about dipping into my savings for vacation purposes was simple — it’s because that’s what the money I accessed was there for.

I make a point to maintain a few different savings accounts. One account is my general emergency fund. I have enough cash in there to cover about a year’s worth of bills.

Some might argue that’s excessive, but as a freelance writer, I get no severance or unemployment pay. So I feel I need that extra protection.

I also have a home repair emergency fund that, in recent years, has morphed to also become the account I access to cover car repairs and medical bills. I try to maintain around a $10,000 balance there, because certain repairs can be quite expensive.

Homeowners spent nearly $6,000 on home repairs and maintenance on average in 2022, says Hippo. So since my account is also meant to cover car issues and medical bills, I feel that my balance makes sense for me.

And then I have a third savings account specifically for vacations and home improvements. This is actually the account I tend to dip into the most, but for good reason — I’m specifically saving for things I intend to do, whereas my general emergency fund and home repair fund are for unplanned events and expenses.

It pays to keep separate accounts

Maintaining separate savings accounts allows me to manage my money with less stress. It also helps ensure that I’m not taking withdrawals for the wrong reasons.

For example, since I keep my vacation-related savings separate from my emergency savings, I know that when I remove a few thousand dollars to take a trip like I did this summer, I’m not touching money I need for more important purposes.

If you have different goals or things you’re saving for, you may want to open separate accounts so you can be sure you’re taking money out for its intended purpose. That could make it so you’re not short on emergency cash when a major repair issue arises or you find yourself out of work.

That said, one thing I do is keep all of my different savings accounts at the same bank. That way, I can log in once and check up on how I’m doing with ease. And, if need be, I can transfer money quickly between my accounts.

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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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Just in time for the holiday season, Sam’s Club is offering its best price of the year on a Plus membership. Here’s what else shoppers can expect. 

What happened

As though the holidays came early, Sam’s Club has rolled out its best offer of the year on its Plus membership. Rather than the regular price of $110, Plus membership will be available for new members for $55 through Oct. 15. That’s a savings of $55.

What’s more, Plus members who are approved for a Sam’s Club credit card during the membership drive and make $30 in Sam’s Club purchases within 30 days of card approval will receive a $50 statement credit. Approved Club members will receive a $30 statement credit for making $30 in purchases within 30 days of card approval.

So what

In addition to everyday deals, Sam’s Club Plus members have access to a host of sweet perks. Here’s a sample of some of the benefits Plus members enjoy:

Free shipping on most online itemsFree curbside pickupFree select generic prescriptionsExtra optical and pharmacy discounts2% back in Sam’s Cash™ on qualifying purchasesEarly shopping hours

According to Scott Ludwig, vice president of membership, Sam’s Club,”Our ambition is to create membership experience that demonstrates the value Sam’s Club provides to shoppers every day. And we’re offering an incredible value with our October membership promotion by giving shoppers access to our Plus membership at its lowest price of the year just in time for the holiday shopping season.”

Now what

If you’ve been on the fence and can’t decide if you’re ready for a Plus membership, you can snag a Club membership for only $15. That’s $35 off the regular Club membership price, a savings of nearly 60%.

As a bonus: If you’re a current Club member, you can upgrade to Plus and receive $20 off your purchase of $40 or more (in-club only). Hey, any money that remains in your checking account is a win.

To sweeten the pot, Sam’s Club is in the midst of its second big savings event of the month. Members of all levels can enjoy Sam’s Club online Super Savings Event with over $11,000 in savings on more than 100 brands. The event begins at 12:01 a.m. EST on Oct. 10, and runs through Oct. 12. Savings include:

Simplisafe Outdoor System — $170 offHP 17.3″ FHD Laptop — $220 offPhillips 65″ PFL TV — $100 offbObsweep Robot Vacuum and Mop for Carpets and Hard Floors –- $150 offGoogle Nest Doorbell — $60 offPhillips Sonicare Toothbrush — $40 off

Whether you’re most interested in a Plus membership or Club membership, it may be a while before you see membership discounts this deep again. There’s the added benefit of the money you could save by shopping smart at Sam’s Club. Let’s say you’re saving up for a family vacation, or just want to add more to your emergency savings account. Careful shopping at Sam’s Club may be just enough to help you meet your goal.

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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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New York introduced strict crypto regulation in 2015. Find out how its tough stance protected New Yorkers from some of the worst of the crypto collapses. 

During the cryptocurrency frenzy of 2020 and 2021, it was common to see headlines and social media threads slamming New York’s crypto regulations. Headlines like, “Kill the BitLicense” and “Is New York the Most Anti-Crypto State in America?” give you a sense of people’s sentiments.

Things look different today. Crypto prices have dropped dramatically. We’ve heard even more stories of crypto fraud, mishandling of client funds, and outright lying. And several key players face criminal charges. Put simply, the stricter regulation and enforcement that’s in New York could have protected some of the investors who’ve lost money.

New York’s tough crypto stance

New York has been tough on crypto since the outset. It introduced the BitLicense in 2015 and now New York Attorney General Letitia James would like to see its rules become a framework for crypto regulation nationwide. Any crypto exchange that wants to operate in New York or serve its residents needs to have the BitLicense.

Its critics say the license is expensive and requires too much paperwork. Crypto platforms need to show they have know-your-customer, fraud protection, and money-laundering processes in place. They need to hire a compliance officer. They also need to submit information about their financials and meet minimum capital requirements.

It is a lot. But here’s the thing. FTX, which collapsed so dramatically at the end of 2022, never got permission to operate in New York. Unlike me and over a million other people, New Yorkers aren’t stuck wondering if they’ll get any of their money back in the bankruptcy proceedings.

The regulation doesn’t only impact crypto exchanges. The state has only green listed a couple of cryptocurrencies. If an exchange wants to offer other coins or tokens, it has to follow a separate application process. This means New Yorkers have much more protection against scam coins and speculative cryptos than other Americans.

New York’s rules have insulated crypto investors from the worst of the crypto winter. Its regulations don’t protect against volatility, which is part and parcel of crypto investing. But they do guard against a lot of the murkier aspects of the industry.

How investors can handle limited crypto regulation

If you only take one thing away from this article, let it be this: Cryptocurrency is not covered by FDIC insurance or SIPC insurance against platform failure. In fact, limited regulation means limited investor protection in several ways. Here are some ways you can protect yourself if you don’t live in New York.

1. Only use exchanges you trust

Research any crypto exchange you’re considering carefully before you deposit any money. Pay particular attention to any security issues, whether it has insurance against hacking, and what the platform says about how it will handle your assets. Fee schedules and a decent range of cryptos are important, but they mean nothing if the platform fails and you lose everything.

Indeed, one good way to find a trustworthy exchange is to see if it has New York’s BitLicense. The full list, which includes Coinbase, Gemini, SoFi, and Robinhood, is here. It’s also good to check to see if the exchange has recent third-party audits — essentially that an outside firm has checked it has the deposits and funds it says it has.

2. Keep your assets in an external wallet

When you leave your funds on the crypto exchange where you bought them, you may lose everything if the exchange fails, gets hacked, or your account gets frozen. Look into setting up a crypto wallet that you control. I keep the majority of my assets in non-custodial crypto wallets. Some are in online hot wallets and the rest is in a hardware wallet that’s not connected to the internet.

Be aware that crypto wallets can also carry risks — not least that if you lose your security phrase, you could lock yourself out forever. There are billions of dollars worth of Bitcoin (BTC) locked in wallets that people can’t get to. A lot of wallets are not as user-friendly as crypto exchanges, so there is a steeper learning curve.

3. Be wary of crypto earn products

There are a few different types of ways to earn money from your crypto. The most risky are the crypto lend-earn products, where platforms loan out your assets and pay you some of the interest. Terra’s now-defunct Anchor Protocol promised APRs as high as 20%. The trouble with these platforms is that you don’t know what they are doing with your money to generate those rates. That, and there’s very little protection if the platform fails.

Crypto staking is different. When you stake certain cryptocurrencies, you can earn rewards for tying up your assets and contributing to the security of the network. Unfortunately, some platforms use the word “staking” for any form of crypto earn program. Plus, the SEC believes many crypto earn programs — including staking options — are operating as unregistered securities. I am a fan of staking, but I’m holding off until things become clearer.

Bottom line

I am still hopeful about the potential of blockchain technology to transform certain industries. I continue to hold a small percentage of my portfolio in crypto, but I’m also very aware that the industry faces significant challenges, including the limited investor protection. It’s important to only invest money you can afford to lose and pay attention to the regulatory landscape.

It’s worth remembering that you don’t have to invest in cryptocurrency. If you are worried about the risks or aren’t confident about creating a crypto wallet, crypto might not be for you. Consider other — safer — assets such as property, equities, bonds, or even commodities. Learn more about how to get started with investing here. And if you don’t have a brokerage account, check out our list of top stock brokers for beginners.

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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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When you’re in deep with credit card debt, it’s hard to get out. Learn about the steps you can take if you have $10,000 in credit card debt to pay off. 

Having any credit card debt can be stressful, but $10,000 in credit card debt is a different level of stress. The average credit card interest rate is over 20%, so interest charges alone will take up a large chunk of your payments. On $10,000 in balances, you could end up paying over $2,000 per year in interest.

It can feel disheartening, especially when you’re not sure what you can do to make real progress. But there are several great tools and strategies you can use to take control of your credit card debt. If you’re in this situation, here’s a step-by-step guide on what to do.

Make it your No. 1 financial priority

The biggest factor in getting out of credit card debt is how much you pay toward it every month. This is one of the reasons why some people stay in debt much longer than others. They don’t change their spending habits much, or they only make minimum payments on their credit cards.

When you have $10,000 in credit card debt, the best thing you can do is put all your disposable income toward it. Cut costs wherever you can. If you’ve been going out for dinner or drinks every weekend, switch to low- or no-cost activities, such as a movie night at home. If you’re not sure where to spend less, any of the top budgeting apps can show you places to cut back.

Put a pause on your savings and investments, as well. These are good financial habits, but your credit card debt should be your focus until it’s paid off.

Lower your credit card interest rates

As mentioned earlier, one of the reasons credit card debt is so hard to pay off is the interest charges. Fortunately, you may be able to get a much lower rate than what you’re currently paying.

There are a couple of ways you can do this. If you have a good credit score, you could potentially qualify for either of the following:

Balance transfer credit cards: These offer a 0% intro APR on balance transfers, making them perfect for refinancing credit card debt. You can transfer over your card balances and pay them down with no interest charges during the intro period. Some cards offer intro periods of 18 months or longer.Debt consolidation loans: These are personal loans made for paying off debt. They typically have much better interest rates than credit cards. Once you’re approved for the loan, you use that to pay off your credit cards. Then, you only need to make your loan payment going forward.

I’d recommend starting with a balance transfer card and paying off as much as you can during the 0% intro APR period. Once that ends, you can either open another balance transfer card or get a debt consolidation loan.

What if your credit score isn’t high enough to qualify for either option? In that case, call all your credit card issuers and ask them to lower your interest rate. Card issuers are sometimes willing to work with you, especially if you’ve always made your payments on time.

Decide on a payment plan

Your payment plan starts with your monthly payment amount. Figure out an amount you can afford to pay every month, and remember that the higher it is, the faster you’ll be out of debt. For example, you could commit to $300 per month, $500 per month, or more, depending on your disposable income.

If you opened a balance transfer card or a debt consolidation loan, then you’ll likely only have one payment to make. But if you have credit card debt spread out across multiple cards, then you’ll also need to decide which cards to prioritize. There are two popular debt repayment methods:

Debt avalanche: Make minimum payments on all your credit cards, and put all your leftover money on the card with the highest interest rate. Once that card is paid off, move on to the next card with the highest interest rate. This saves you the most money on interest charges.Debt snowball: Make minimum payments on all your credit cards, and put all your leftover money on the card with the lowest balance. Once that card is paid off, move on to the next card with the lowest balance. This method is designed to get you that first “win” of paying off a credit card as quickly as possible.

The debt avalanche is better from a financial standpoint. But the debt snowball often helps people stay motivated. Both work, it’s just a matter of which one works for you.

Keep your eyes on the prize

If you follow those steps, you’re going to see your credit card balances get lower and lower. Resist the temptation to relax once you get your debt down to $5,000 or $3,000. It’s fine if you want to celebrate these milestones, but keep following your payment plan. Otherwise, it’s easy to get off track.

A $10,000 credit card balance may seem daunting, but you could pay it off faster than you think. With a 20% interest rate, you could get rid of that debt in 25 months if you’re able to pay $500 per month. And that’s without lowering the interest rate at all. If you’d like to run some numbers yourself, our credit card payoff calculator can tell you how quickly you could get out of debt.

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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 positions in and recommends Avalanche. The Motley Fool has a disclosure policy.

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