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Money Management

Sep 24
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Here’s What Happens When You Apply for a Mortgage Jointly and One of You Has Poor Credit

By Money Management No Comments

Need a home loan? Read on to see why it’s important that both you and your joint applicant have strong credit. 

Image source: Getty Images

There are different factors mortgage lenders take into consideration when deciding whether to loan money to an applicant. These include your income, existing debt relative to your income, and credit score.

The higher your credit score, the more likely you are to get approved for a mortgage. But what if you’re applying for a mortgage jointly with another person and their credit score isn’t great?

You might think you can get around that issue if your credit score is excellent. After all, if your credit score is an 830 and your co-applicant’s score is a 570, that averages out to a 700, which is a decent credit score to be applying with.

But unfortunately, that’s not how things work when you’re applying for a mortgage jointly and one of you has poor credit. So you’ll need to know how to navigate that situation.

It’s not just an average

For the sake of this discussion, let’s say you’re applying for a mortgage with your spouse, only their credit needs work. Mortgage lenders won’t just average out their credit score and yours when evaluating your application, says Experian. Rather, lenders tend to pay the most attention to the lower score of the two. And if it’s too low to qualify for a mortgage, you should both expect to be denied.

More: Check out our picks for the best mortgage lenders

How to overcome your co-applicant’s poor credit

So you’re trying to buy a home with your spouse and their credit isn’t great. One option, of course, is to hold off on your mortgage application until their score improves. You can help your spouse boost their credit score by:

Encouraging them to pay all bills in their name on timeHelping them pay off a chunk of their credit card debtReviewing their credit score and working to correct errors that could be negatively affecting their score

Of course, boosting a credit score can take time. So if you want to buy a home now, you may want to consider applying for a mortgage on your own.

Remember, a mortgage is a legal contract that determines who’s responsible for paying back the loan used to finance a home. It doesn’t dictate who owns the home.

It’s possible for you and your spouse to both be on the title of your home, but for only one of you to be on the mortgage. That way, you still own it jointly, but your spouse’s poor credit doesn’t have to get in the way of being able to get the financing you need.

Of course, if you’re reliant on your spouse to help pay for your home and they fall behind on their part of the deal, you may not have much (or any) recourse if they’re not on the mortgage. But if you and your spouse have a solid relationship and set reasonable expectations, this may not be an issue at all.

Even if you have perfect credit, having a co-applicant with poor credit could hurt your chances of getting a mortgage. So if you want to move quickly on a home purchase, applying for financing on your own could be your best bet.

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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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Sep 24
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This Account Is a Terrible Place for Your Emergency Fund

By Money Management No Comments

It’s certainly easy to leave your emergency fund where it’s the most accessible. But learn why your checking account is no place for extra savings. 

Image source: Getty Images

Having an emergency fund is a great way to sleep better at night — you know that you’ve got saved cash that’s ready to help you tackle an unplanned bill or even a period of joblessness, and you don’t have to go into debt in those situations. (Trust me, not having an emergency fund isn’t a fun time.)

But it’s not enough to have the cash saved up — you’ve also got to find the right place to keep it. It should be somewhere safe and accessible, so you don’t lose it and can get to it when you need it. Chances are good you use your checking account for a lot of your everyday bills and expenses, so you might assume you should just keep your emergency fund there. But this is a bad idea, and here’s why.

It likely won’t earn interest

The first reason why your checking account isn’t the right place for your emergency fund is that it’s likely not going to grow from interest there. Yes, okay, high-yield checking accounts do exist, but they’re not terribly common, and some have high balance requirements or other hoops you must jump through to earn the highest APY offered. According to the FDIC, the average APY for interest-earning checking accounts is currently 0.07%. There are other places for your emergency fund that earn real money (more on those below).

You might accidentally dip into it

While I do recommend keeping a little cushion in your checking account (to give yourself some wiggle room in case your regular bills come in a little higher than usual — overdrafting your account is also no fun), keeping your emergency fund there can be a bad idea for another reason.

Simply put, you might lose track of how much you’re supposed to be saving for a rainy day and accidentally chip away at the balance. Or worse, you might figure that it’s okay to spend a little “just this once,” and leave yourself short of money for actual emergencies because of an expense that simply isn’t one. We’re all human, and who among us hasn’t had a moment of longing for a purchase and attempted to justify taking the money out of a pool of savings for it?

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Where should you keep your emergency fund?

Well, a checking account definitely isn’t the right place for your emergency fund, but this doesn’t mean you should keep that money out of the bank altogether — keeping a pile of cash under your mattress is also a bad idea. Instead, look to a different type of bank account. Specifically, consider high-yield savings accounts and money market accounts.

A high-yield savings account is accessible to just about anyone, assuming you’re comfortable banking online (as the best high-yield savings accounts are offered primarily by online-only banks). Many come with no fees or minimum balance requirements, and APYs are more than 4% these days. As of this writing, I’ve earned over $1,000 worth of interest on my savings account this year so far — passive income, as I’ve done nothing but consistently fund the account. One potential pitfall of these accounts is a lack of easy access to your money. I had to open a linked checking account to go along with my savings so I could get a debit card, as one didn’t come with the account.

If you’re concerned about access to your cash, consider opening a money market account. These are like a cross between a checking account and a high-yield savings account, in that the best money market accounts come with check-writing privileges and/or debit cards, and they earn APYs as high as those available from savings accounts. You may have to contend with a minimum balance requirement, though, so read the fine print on any account you’re considering.

Pick the right bank account for your emergency fund

Banks are really the safest place for your emergency savings, provided you choose one that’s insured by the FDIC. Just don’t fall into the trap of thinking you should leave that money in your checking account where you won’t maximize your earnings.

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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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Sep 24
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Which Dollar Store Should You Really Be Shopping At?

By Money Management No Comments

Thinking about shopping at the dollar store but don’t know where to begin? Read on for the top three dollar store chains and why to shop with them. 

Image source: Getty Images

There’s no denying that dollar stores can be a great spot for budget-friendly shopping. In fact, according to a report by the Institute For Local Self-Reliance, in 2021, almost half of all new stores opened in the U.S. were chain dollar stores. There are now over 35,000 dollar stores, more than the combined total of all McDonalds, Starbucks, Target, and Walmart locations.

There is a reason why dollar stores are popping up all over the nation. Whether you’re looking for household items, party supplies, or snacks, dollar stores offer a wide range of products at incredibly affordable prices. But with so many, it can be difficult to determine which one is actually the best to shop at and get the best bang for your buck.

The two largest players in the U.S. dollar store market are Dollar General and Dollar Tree, which purchased Family Dollar in 2015. We’ll take a closer look at these three dollar stores and provide you with all the information you need to make an informed decision for where to shop.

Dollar Tree

Dollar Tree is one of the biggest and most well-known dollar stores in the country. As its name suggests, for 35 years, everything at Dollar Tree was $1. However, with inflation hitting 40-year highs, in November 2021 Dollar Tree announced that all of its merchandise would be raised to $1.25, a 25% increase in prices.

The company announced that as a result of the increase, it would reintroduce items that were constrained by the $1 price point and “materially expand its offerings, introduce new products and sizes, and provide families with more of their daily essentials.”

Even with the price increase, Dollar Tree’s 2022 revenue grew by 9% from the previous year and it opened over 460 new stores. Dollar Tree plans to open 650 more stores this year. Demand for Dollar Tree products remains high. This includes everything from cleaning supplies to snacks to holiday decorations.

One of the biggest perks of shopping at Dollar Tree is that you never have to question the price of anything you pick up. However, it is important to note that while the prices are still incredibly affordable, the quality of some items may not be quite as high and the availability of items is unpredictable.

Dollar General

Dollar General is another popular dollar store chain. Unlike Dollar Tree, not everything at Dollar General is one set price. For example, two different Schick Classic 3-blade, 3-count products are available for $5.35, which is a higher price than you might expect from a dollar store. Prices typically range from $3 to $10 for its products.

That being said, you can still find some great deals at this store. Even with more brand name products being introduced at Dollar General, the company advertises that over 2,000 items are still available for $1 or less. Dollar General is particularly known for its wide selection of household and cleaning products.

The store also offers a range of grocery items, including both name-brand and generic products. Based on your location, many stores also have coupons and deals for certain products.

Dollar General’s net sales grew by over 10% and it opened 1,000 new stores in 2022. This year it plans to open 1,050 new stores, remodel another 2,000, and relocate 120 other stores. Dollar General is the largest dollar store with more than 19,000 locations.

Dollar General also has an app that offers significant discounts every week. One downside of shopping at Dollar General is that its prices can vary, making it a less predictable budget shopping destination.

Family Dollar

Family Dollar was bought by Dollar Tree in 2015. Together, both Dollar Tree and Family Dollar have over 16,000 locations. Unlike Dollar Tree, not everything at Family Dollar costs just $1.25. Prices for its items range between $1 to $10, with most items typically costing from $3 to $5. However, you can still find plenty of great deals on a variety of household and grocery items.

Family Dollar is known for its wide selection of snacks and packaged foods. Additionally, the store often runs sales and promotions that can help you save even more money. Family Dollar’s net sales grew by almost 6% in 2022.

When it comes to picking a dollar store, there isn’t necessarily a one-size-fits-all answer. Each chain has its own pros and cons. The type of product varies at each store based on season, location, and availability. The best store will be based on your shopping preferences, as well as the quality and quantity you want.

Remember, just because something is cheap doesn’t necessarily mean you are getting a good deal. Dollar stores are able to offer lower prices because many of their products are smaller in size. You will want to compare the price per unit to be able to compare apples to apples. While Dollar Tree is a great option if you want everything to cost just $1.25, the quality and variety of products may not be as high as what you would find at other stores. Dollar General and Family Dollar both offer a wider range of items and may have more sales and promotions, but their prices can vary. It is best to take the time to compare prices and selections at each of these stores to determine which one is truly the best fit for your budget and shopping needs.

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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 Apple, Starbucks, Target, and Walmart. The Motley Fool has a disclosure policy.

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Sep 24
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Older Americans Think They’ll Need More Than $2 Million to Retire Comfortably. Is That Attainable?

By Money Management No Comments

A giant nest egg might seem like it’s out of the question. Read on to see why retiring with millions is more doable than you’d expect. 

Image source: Getty Images

If you’re someone who needs to set financial goals, then you may be in the process of trying to figure out what IRA or 401(k) balance to aim for. That’s hard to do when you’re years away from retirement and don’t really have a handle on what your future expenses might look like.

Now, you may be interested to know that baby boomers believe they’ll need more than $2 million to retire comfortably — $2,158,345.91 to be exact, according to a recent survey by New York Life. And if you’re thinking “Holy heck, that’s a lot of money,” you’re right.

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Before we go any further, it’s important to emphasize that no one should get hung up on any single retirement savings target. Some people might indeed need over $2 million for an enjoyable retirement, but you may not be one of those people.

So if you’re already shaking your head wondering how you’re going to avoid being cash-strapped as a senior, don’t stress. For some folks, a $500,000 nest egg is more than enough.

But let’s say you want to push yourself to hit that goal of $2 million and change in retirement savings. You might think it’s next to impossible. But thankfully, you’d be wrong.

Growing wealth might be easier than expected

If you don’t start saving for retirement until your late 40s or early 50s, then attaining a $2 million nest egg may not be doable. But if you start saving from an early age and invest your nest egg in assets like stocks that have a history of strong returns, then you may find that $2 million and change is a reasonable target after all.

Over the past 50 years, the stock market’s average annual return has been 10% (before inflation), as measured by the performance of the S&P 500 index. So, let’s say you begin contributing $300 a month to a retirement plan at age 24 and do so through age 67. Let’s also assume you invest that money in S&P 500 stocks and ETFs that deliver a 10% average annual return during your 43-year savings window. All told, you’ll be looking at a balance of about $2,133,000, which is pretty much in line with the target above.

Run your own retirement numbers

As you can see from these calculations, it’s more than possible to retire with a lot of money even if you’re an average earner. In our example, you’re putting $300 a month, or $3,600 a year, toward retirement.

The median U.S. income in 2021 was $69,717. Contributing $3,600 a year to retirement savings means parting with 5% of that total, which is pretty reasonable.

But remember, you don’t have to push yourself to accumulate $2 million and change in retirement savings if you don’t feel you’ll need it. So while it’s a good thing to try to amass more wealth than less, you can also take some of the pressure off yourself.

The key is to save and invest for retirement consistently over many years. If you do that, there’s a good chance you’ll end up with a nest egg that can support your dream retirement, no matter how much money it actually contains.

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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.Maurie Backman has positions in Target. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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Sep 24
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Looking for a New Job? These Are the Best (and Worst) State for Job Seekers

By Money Management No Comments

Are you looking to relocate for work? Discover which states are the best and worst places to look for a job. 

Image source: Getty Images

The job market can be a daunting place, especially for those who are seeking new opportunities. There are many factors that play into finding a new job, such as location, industry, and competition.

With that in mind, we’ve compiled a list of the best and worst states for job seekers in the United States. Whether you’re starting your job search or considering a move, read on to learn where you’ll have the best chance of landing your dream job.

Labor shortage in the U.S.

According to the U.S. Chamber of Commerce, there are around 76 workers available for every 100 job openings as of July 2023. However, some states offer more opportunities for job seekers than others. Even though there are a significant number of job openings available, there is still plenty of competition for job seekers in some states.

The Chamber’s Worker Shortage Index ratio reflects the availability of workers for each job opening. States with a higher ratio have a greater number of workers to fill vacant positions. For example, a ratio of 0.65 implies that a state has only 65 workers for every 100 open jobs. A ratio higher than 1.0 would signify an excess of workers compared to available job openings.

Best and worst states for job seekers

Below are the rankings from the states with the most openings to the fewest.

Rank State Ratio of Openings 1 Maryland 0.36 2 New Hampshire 0.36 3 North Dakota 0.37 4 South Dakota 0.38 5 Vermont 0.41 6 Nebraska 0.42 7 Alabama 0.43 8 Arkansas 0.46 9 Massachusetts 0.47 10 Virginia 0.47 11 Montana 0.48 12 Mississippi 0.53 13 Oklahoma 0.53 14 Utah 0.53 15 Maine 0.54 16 District of Columbia 0.55 17 South Carolina 0.55 18 Wyoming 0.55 19 Louisiana 0.56 20 Tennessee 0.56 21 Florida 0.57 22 Georgia 0.57 23 Minnesota 0.59 24 North Carolina 0.59 25 West Virginia 0.59 26 Alaska 0.60 27 Idaho 0.61 28 Wisconsin 0.61 29 Colorado 0.62 30 Kansas 0.62 31 Missouri 0.64 32 Iowa 0.65 33 Rhode Island 0.65 34 Ohio 0.66 35 New Mexico 0.67 36 Hawaii 0.73 37 Delaware 0.75 38 Kentucky 0.75 39 Pennsylvania 0.79 40 Indiana 0.81 41 Oregon 0.82 42 Illinois 0.84 43 Arizona 0.86 44 Michigan 0.93 45 Connecticut 0.94 46 Texas 0.95 47 New York 1.02 48 California 1.06 49 Nevada 1.06 50 New Jersey 1.06 51 Washington 1.06
Data source: uschamber.com

California, Nevada, New Jersey, and Washington are states with the highest ratio of workers to job openings in the U.S., with 106 workers for every 100 job openings. These states might not be the best options for job seekers looking for less competition.

On the other hand, Maryland, New Hampshire, and the Dakotas are states with the lowest ratios of workers to job openings at 0.36 to 0.38 people per job. Every state with the exception of the last five on the list is short workers, presenting opportunities for anyone looking for a job.

The U.S. has lost millions of workers

According to the U.S. Chamber of Commerce, the primary cause of the current labor shortage was the COVID-19 pandemic, which led to the temporary closure of more than 120,000 businesses, and more than 30 million Americans lost their jobs. Since February 2020, there are 1.9 million workers missing from the labor force.

Government assistance provided to those who lost their jobs, along with other subsidies, made it more convenient for individuals to remain out of the workforce and stay at home. The Chamber found that even if every unemployed person in the U.S. found a job, there would still be 4 million open jobs.

The disparity between available job opportunities and job seekers is significant but gradually decreasing. High inflation rates have eroded the savings amassed by Americans during the pandemic, resulting in many having to return to the workforce. At the same time, businesses that substantially expanded their workforces during the pandemic are now readjusting their hiring, with many industries experiencing a slowdown in hiring and occasional layoffs.

No matter where you live, the job market can be tough to navigate. It’s important to research your options and consider your priorities when deciding where to search for employment. If you are a job seeker looking for new opportunities, it might be worth considering states with lower worker-to-job-opening ratios, such as Maryland, New Hampshire, and the Dakotas.

However, keep in mind that other factors such as cost of living and job satisfaction should also be considered when exploring different states. At the end of the day, finding the right job isn’t just about the numbers for your personal finances — it’s about finding a role that fits your skills, experience, and lifestyle.

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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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Sep 24
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Why You Should Always Use This App When Shopping Online

By Money Management No Comments

Are you looking for the best way to get cash back and save money on every purchase online? Learn how Rakuten can improve your shopping experience. 

Image source: Getty Images

Online shopping has become the new norm. From everyday essentials to luxury items, you can order just about anything from the comfort of your own home. However, not all online shopping experiences are created equal. There is one app, in particular, that makes shopping even more convenient while also saving you money.

This app is Rakuten. Not only can you shop at over 3,500 stores, but you can also get up to 40% cash back on your purchases. This can help you keep more money in your savings account while shopping online and stay on budget while also earning rewards. Here’s what you need to know about Rakuten.

1. Cash back rewards

The primary reason to use Rakuten is for its cash back rewards program. You can earn cash back on your purchases at thousands of stores, including popular retailers like Walmart, Staples, and Best Buy. The cash back percentages vary by store, but you can earn up to 40% cash back on your purchases at some retailers.

With every purchase you make, you earn cash back that can be paid via check or PayPal. Over time, these earnings can add up, and you can use your cash back to make even more purchases. One of the best things about Rakuten is that it is absolutely free to use.

There are no membership fees or hidden costs, and you can enjoy the full benefits of the app without paying a dime. This means that all the savings and earnings you get from shopping through Rakuten are yours to keep. Using Rakuten essentially means you get paid to shop.

2. Coupons and deals

In addition to earning cash back on your purchases, Rakuten offers a wide selection of coupons and deals for various retailers. These coupons and deals can help you save even more money on your purchases. The app also lists specific promotions and sales that are happening at various retailers, so you can know when to shop to get the best deals.

3. Easy to use

One of the things that make Rakuten stand out from other shopping apps is how easy it is to use. All you have to do is sign up for an account, download the app, use the browser extension or start shopping on rakuten.com. Rakuten tracks your purchases. Cash back is automatically applied to your account, and you can view your earnings in your account dashboard. The iOS and Android mobile apps make shopping even more convenient.

4. Refer friends for extra rewards

If you refer your friends to Rakuten, you can earn even more cash back rewards. Rakuten offers a referral program where you can earn $25 for each friend who signs up and makes a qualifying purchase. This is a great way to earn additional rewards while also introducing your friends to the app so they can save money, too.

5. Rakuten is safe and secure

Shopping online can be risky, but Rakuten ensures that all transactions are safe and secure. Rakuten is a reputable company that takes security and privacy seriously. The app uses state-of-the-art encryption technology to protect your personal and financial information. Additionally, Rakuten never sells or shares your data with third parties, and all transactions are processed through secure servers.

The app also has close to a four-star rating on Google Play and 4.8 star on the Apple App Store. Users consistently rate the app positively for its user friendliness and the amount of money they’ve earned through the cash back program.

Shopping online can be a lot of fun, but it is even better when you can get paid for it. With Rakuten, you can earn cash back on your purchases at over 3,500 stores, plus enjoy great deals and discounts. Shopping with Rakuten is easy, safe, and free, making it the go-to app for all your online shopping needs. Stop missing out on earning money and start shopping with Rakuten today.

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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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