Money Management

If you take out a $10,000 personal loan, the amount you would need to pay each month will be determined based on two factors. Here’s what you need to know. 

Personal loans can be a versatile and flexible way to borrow money. Typically, when you take out a personal loan, the lender just deposits the money in your checking account. You can do whatever you want with it once you have it.

Of course, you will have to pay back all you borrowed. So, before you move forward with taking out a personal loan, you’ll need to consider the monthly costs you’ll incur. If you are thinking about a $10,000 personal loan, here’s what you can expect.

Here’s the monthly payment if you borrow $10,000

There’s not just one answer to the question of how much a monthly payment on a $10,000 personal loan will be because there are actually two factors that impact it:

Your interest rateThe repayment timeline

For example, the table below shows what your monthly payments would be at different interest rates with different repayment terms if you borrowed $10,000. It also shows total interest costs over time. This includes an 11.48% rate, which is the national average for personal loan rates as of July 10, 2023 according to the Federal Reserve.

As you can see, there’s a huge difference in monthly payment costs and total costs based on your interest rate as well as the time it takes you to repay your loan.

And there’s a tradeoff to be made. If you want lower monthly payments, you’re going to have to accept higher costs over time. If you would prefer to be debt free sooner and pay less over time, you’ll have to pay more each month.

Keeping your borrowing costs down is often the best approach

When it comes to taking out a personal loan, your goal should typically be to find a loan that provides the lowest total borrowing costs over time while still being affordable.

You don’t want to make your payment so high that you risk defaulting. But you should choose the loan with the shortest payoff timeline that you can comfortably afford. This way you can become debt free faster. Plus keeping borrowing costs down means you send less money to the lender and keep more in your pocket. So, take a close look at your budget. If you can make a higher payment work without unsustainable sacrifice, choose the loan with the shorter payoff time.

Aside from picking a shorter loan term, you’ll also want to do all you can to get a loan at the lowest possible interest rate. This can make a huge impact on your payments without any downsides. To get the best rate, you can:

Shop around among different lenders. Get online quotes from banks, credit unions, and online lenders to see which offers you the most affordable loan. You’ll need to input some basic information about how much you want to borrow and even your Social Security number, but many lenders will give you a quote without a hard credit check so you can compare your options. Try to get quotes from at least three lenders so you can get a good idea of what rates are available to you.Try to improve your credit before borrowing. Making extra monthly payments to reduce other debts can help you do that. You can free up the funds to do so by giving up a meal or two out for a few months or picking up a side gig for a few hours a week. Or you can try writing a goodwill letter to ask creditors to voluntarily remove negative information from your credit record.Consider a cosigner. If someone with better credit or more income will agree to share legal responsibility for your personal loan, you can often get a better rate.

If you take these steps, ideally your $10,000 personal loan will be affordable for you both monthly and over time.

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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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A delinquent debt can be bad news for your credit score. Read on to learn more. 

Paying your debts is a good way to maintain a solid credit score. But when you’re late making a loan payment or paying your credit card bill, that lateness could eventually show up on your credit report in the form of a delinquency.

You might think of a delinquent debt as one you blow off completely. But Experian considers a delinquency “a late payment that can appear on your credit report once you’re 30 days or more past due on a debt.”

Worse yet, a delinquent debt will generally remain on your credit report for seven years. And during that time, you might end up with a lot less access to credit.

Why a delinquency matters

We’re all human, and it’s not such a strange thing to be late paying a bill from time to time. One thing you should realize is that credit card companies and lenders typically don’t report late payments to the credit bureaus until you’re 30 days late or more.

So let’s say you had a busy week and forgot to pay your credit card bill when you were supposed to. If you pay it seven days late, you might get hit with a late payment fee. But you probably won’t end up with a delinquency on your credit report because you get a little leeway there.

However, once you’re 30 days late or more, that delinquency could easily show up on your credit report. And from there, it could drag your credit score down a lot.

Your payment history carries more weight than any other factor when calculating your credit score. So if you’re late with a bill, it reflects poorly on your credit history and sends a message to prospective lenders that you perhaps can’t be trusted to pay your bills in a timely manner.

How to avoid a delinquency on your credit report

Sometimes, missed payments are a result of human error more so than a lack of money. So one of the easiest ways to avoid a delinquency is to set calendar reminders for when your various bills are due.

Often, though, a lack of money is the reason late payments occur. To avoid that scenario, try to maintain a fully loaded emergency fund. That way, you’ll have cash reserves to tap so you can keep up with your bills at times when they’re higher than usual.

What if a delinquency on your credit report is a mistake?

Unfortunately, this type of thing can happen. It’s important to review your credit report regularly to make sure there aren’t any errors working against you.

You’ll find delinquent debts listed in the payment history section of your credit report. If you spot a delinquency you don’t recognize and you think is not accurate, contact the credit bureau to dispute that information. Credit bureaus are required to investigate when consumers report that their credit reports contain erroneous information.

A delinquency on your credit report could cause major damage to your credit score, and that’s not something you want. So it’s best to do what you can to avoid a delinquency. And if you spot something on your credit report that isn’t accurate, report it at once. The sooner you do, the sooner you might get it wiped off of your credit report.

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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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A 2023 recession now seems less likely, but it’s still good to prepare for one. Read on to learn more. 

For much of 2022 and the first half of 2023, it may have seemed impossible to read the news without seeing some type of recession warning flash. For months, consumers were grappling with rampant inflation. To cool inflation, the Federal Reserve implemented a series of interest rate hikes that had the potential to lead to a pullback in consumer spending.

But consumer spending has not declined despite those rate hikes and lingering inflation. Retail sales actually rose 0.7% in July, according to the U.S. Commerce Department. And the national unemployment rate, another potential measure of a troubled economy, was only 3.5% in July. Between that and the addition of 187,000 new jobs, alarms certainly aren’t sounding.

All told, it’s becoming pretty clear that we’re not very likely to enter a recession in 2023. Even the Federal Reserve itself said at its late July meeting that it no longer anticipates the mild recession it formerly predicted for late 2023. And that’s very much a good thing.

But just because we may not be headed for a 2023 recession doesn’t mean you shouldn’t prepare for one. We may be able to avoid a near-term downturn, but that doesn’t mean one won’t occur in the future.

A recession might still be in the cards

The U.S. economy tends to ebb and flow, experiencing periods of growth and eventual slowdowns. When we talk about the possibility of future recessions, we’re not necessarily talking about major catastrophic events.

Rather, recessions have the potential to be fairly mild. And some can be fairly short-lived. But they’re also an economic event that’s to be expected here and there. And sometimes, there’s not a lot of warning. So it’s best to be in a position where you’re recession-ready at all times.

How to get your finances in shape for a recession

The reason so many people worry about recessions is that they have the potential to lead to an uptick in job loss. So one of the best things you can do to prepare for that sort of situation is to build yourself an emergency fund. If you make a point to keep enough cash in your savings account to cover a minimum of three months of essential expenses, you’ll be in a better position to get by without a paycheck while avoiding costly debt.

And speaking of debt, shedding high-interest debt is another great way to get recession-ready. If your income isn’t monopolized by debt payments, you’ll have more to save. And then, if you do end up out of a job, you’ll have fewer bills to deal with.

It’s also a good idea to work on boosting your job skills so you’re likely to be more valued at work — though that’s a good thing to do in general, and not just in the context of a recession. The more highly you’re regarded, the more job security you might enjoy. And also, you might set yourself up for a nice promotion — and a pay bump that makes it easier for you to boost your savings and pay down existing debt.

Finally, make a point to review your investments every quarter or so to ensure your portfolio is nicely balanced. Recessions can lead to stock market downturns, but a nice, diversified portfolio could help you avoid massive losses in your brokerage account.

The dire recession warnings economists were sounding for 2023 no longer seem to be in effect. But that doesn’t mean a recession won’t strike eventually, so do the best you can to be ready for one at all times.

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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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Dollar stores are well-known for their low cost price tags, but that’s not all they’ve got going for them. Find out how you can maximize your dollar store savings. 

Items in dollar stores rarely cost $1 anymore, but that hasn’t stopped people from flocking to these discount meccas. As Americans continue to grapple with high living costs — particularly when it comes to food shopping — sales at the likes of Dollar Tree, Dollar General, and Family Dollar are booming.

Whether you’re a recent convert or an old hand at dollar store shopping, here are some little-known tricks that could help you save even more. Every extra dollar in your bank account is a dollar you can spend on meeting other financial goals.

1. You can use cash back apps

Cash back apps work in different ways, but a number of them will work in dollar stores. This is especially true for those that allow you to scan your receipts after you’ve been to the store. These apps let you earn money or points on your shopping and often also have bonus offers on specific products. Pay attention to the product sizes, as dollar store products may not fit the offer requirements.

Dollar General recently announced it had teamed up with Ibotta to create a new DG Cash Back Program. Sign up online or download the app to get extra savings and special deals when you shop at Dollar General.

2. You can use coupons…sometimes

Watch out for store-specific coupons as these can be a great way to snag the best bargains. Most dollar stores also accept manufacturer and other coupons, though there may be restrictions about how you can use them. For example, the Krazy Coupon Lady says you have to print online coupons to use them at Dollar General.

Check the fine print. As with cash back apps, the different-sized packaging in dollar stores can mean some coupons aren’t valid. For example, if a coupon is only valid for a 52-fluid-ounce bottle of juice, you won’t be able to redeem it on other sizes. You may also find there are limits on how many coupons you can use on any one day.

3. You don’t have to do all your shopping there

Dollar stores are not always the cheapest option, especially not if you can bulk buy. The trick is to combine your dollar store shopping with regular stores and know where to get the best value for the things you buy frequently. Work out the cost per ounce and use your cellphone to check prices, even when you’re in the store. Every home is different, so try to find a system that works for you.

For example, I go once a month to a high-end grocery store to buy cheese, tea, and a couple of other items I can’t get anywhere else. I buy cleaning products, snacks, spices, household items, and office supplies at a nearby dollar store. Fresh produce is usually better quality and better value from the fruit and vegetable shop. And I get most of my other groceries online. That way I can find the lowest prices without trailing around too many stores.

4. You can snag bigger savings on sale days

Watch out for clearance days at your local dollar store. For example, Dollar General has regular clearance sales where you can save as much as 50% or more. Watch out for sale alerts online. It’s also worth signing up to your favorite dollar store’s membership club so you’re the first to hear about events and discounts. Dollar Tree has a Value Seekers Club and Dollar General has myDG.

5. You can use your SNAP food benefits in dollar stores

SNAP food benefits are designed to help low-income families access nutritious food. The benefits are usually paid onto an EBT card, which can then be used in stores — including dollar stores — to pay for certain items. Wherever you shop, there are restrictions on what you can buy using SNAP dollars. For example, you can’t use your food benefits to buy hot food, pet food, cleaning supplies, or pharmacy items.

6. You’re never far from a dollar store

It’s fair to say that dollar stores have multiplied like rabbits in recent years. One report from the Institute for Local Self Reliance found that nearly half the new stores that opened in the U.S. in 2021 were dollar stores. And, 75% of Americans live within five miles of a Dollar General, according to its website. That makes it easier to combine a dollar store stop with the rest of your grocery shopping.

A word of caution

There are many ways to save money by shopping in dollar stores, but don’t get too carried away. Items in dollar stores are not always cheaper, especially if you look at the price per ounce. It’s also important to check sell-by dates and make sure the packaging isn’t damaged. All the same, if you can incorporate dollar store shopping into your grocery habits and you may well find your monthly grocery budget will stretch a little further.

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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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Not having your savings in the right place can cost you. Discover the huge savings mistake many Americans make and how to fix it. 

A healthy savings account balance is an important part of your financial security. You’ll need to have money set aside to cover future expenses and emergencies. While most Americans have at least some savings, the majority are also making a serious mistake that costs them money.

Over two-thirds of Americans are missing out on higher interest rates

Only 31% of Americans have a savings account with an interest rate of at least 4%, according to a savings study by The Motley Fool Ascent. That leaves 69% who use accounts earning less than that.

This can cost you a significant amount of money over time. Many of the best high-yield savings accounts earn rates of over 4% right now. However, the national average is just 0.42%. Some of those big banks that so many people use are offering even less than that — we’re talking as low as 0.01%.

To put those numbers in perspective, let’s assume you have $5,000 in savings. Here’s approximately how much you’d earn in yearly interest depending on the type of account you have:

With a savings account from a big bank offering 0.01%, you earn $0.50.With a savings account offering the national average of 0.42%, you earn $21.With a high-yield savings account offering 4.30%, you earn $215.

It’s a difference between pocket change and enough money to go out to dinner, see a few movies (while hitting the concession stand), or add more to your savings.

Why people don’t use high-yield savings accounts

Choosing between an account that offers 4% interest and an account that offers 0.4% seems like an easy decision. So, why do most go with bank accounts that pay them less?

Respondents were asked what was keeping them from opening a savings account with a higher interest rate. There were a few common explanations. Here’s what they are and why these reasons aren’t worth missing out:

38% didn’t know that savings accounts with interest rates about 4% are available. High-yield accounts are mainly available through online banks, so it makes sense that not everybody knows about them.35% said they don’t have enough savings for a higher interest rate to matter to them. You can still open a savings account that earns you more now — it certainly doesn’t hurt. Plus, getting a high APY can be good motivation to save.13% said it would take too much effort to open an account and transfer money to it. The process is actually faster than you might think. You can open a new savings account online in 15 to 20 minutes.9% said they don’t trust the banks offering savings accounts with higher interest rates. Even though they’re online banks, these are legitimate financial institutions. You’ll also find that most of them are FDIC insured, meaning accounts are covered for up to $250,000 in the event of a bank failure.

The remaining 5% had other, unspecified reasons.

How to open a high-yield savings account

If you don’t have a high-yield savings account yet, opening one is a great money move. Earning more interest is something that can pay off, whether you’re starting with $100, $1,000, or $25,000 in savings.

It’s also not a complicated or lengthy process. Here’s how to do it online:

Find a savings account you like and choose the “Open Account” option.Fill out the form with the required information, including your name, date of birth, and Social Security number.Submit the application.

Once your account is open, you can transfer over funds using the account number and routing number.

Not every financial improvement needs to be difficult. In fact, many of the best ones are simple changes. Switching to a high-yield savings account is something that anyone can benefit from, but many people still haven’t done yet.

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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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Before deciding on which three credit cards to use, I took a few simple steps. Here’s how I picked the right cards for me and my spending. 

I’m a big fan of using credit cards to build credit and earn rewards. In fact, I have three credit cards that I use for all of my purchases. I was very careful in selecting the three cards I use to make sure they were the right fit for my lifestyle. Here’s how I picked them.

I evaluated my spending and aimed to find a card that offered bonus rewards on top spending categories

The first step I took when deciding which credit cards to get was to take a close look at my spending. That’s because different cards offer bonus rewards for different things. For example, some cards provide extra rewards for booking airline tickets, others for buying gas or for dining out in restaurants.

The bulk of my personal spending is on travel and on Amazon, so I knew I wanted cards that would give me bonus rewards for purchases on these three things. Then, I wanted the best “general purpose” rewards card to use for all of my other purchases so that I wouldn’t get stuck just earning 1% cash back on other things I buy (which is what many cards pay for purchases that don’t fall within their special bonus categories). As a result, I ended up with:

One card that offers bonus cash back on travelOne card that offers bonus cash back on Amazon.com transactionsOne card that pays me 2% cash back on every purchase

It was pretty easy for me to figure out what I spend the most on. I use a program that breaks my spending up into categories so I can see where my money is going. If you don’t do that, you can look back at existing credit card statements or bank statements to see where you’re spending the most.

Once you know your spending habits, just search for a card that gives you added rewards for those purchases.

I check for fees and cardmember benefits

Once I knew what kinds of cards I was looking for, I made a list of those that offered bonus rewards for my desired spending areas. Then, I looked at the other things those cards offered including the following:

Annual fee: This is the yearly amount I’d pay to be a cardholder, if any.Foreign transaction fee: I wanted at least one card I wouldn’t have to pay extra to use outside of the U.S.Purchase protections: Some cards offer extended warranties, return protection, and price protection. I wanted at least one card to offer this for big purchases.Travel insurance: I wanted a card that provides benefits like trip interruption coverage, rental car insurance, and lost luggage insurance.Other cardmember benefits: I was looking for a statement credit for TSA precheck as well as airline lounge access.

You should consider what cardmember benefits are important to you when choosing a card. My list is a pretty good start for most people — but you may also see other benefits that are attractive to you, like statement credits for flight incidentals or free checked bags.

In some cases, you’ll find a card with an annual fee is the best fit if the benefits and added rewards you’ll earn justify the fee. You may also find that one card stands out as offering the benefits you value and a rewards program that matches your spending. If you do, that’s the card for you.

Finding the right cards is worth the effort

If you haven’t taken these steps to pick the cards in your wallet, consider doing so today. You may find the card you have is a good fit, but you may also find there are better options out there that offer great benefits and a rewards program that you can maximize.

The three cards I found using this technique have earned me thousands of dollars in rewards and have made my travels a lot more enjoyable when I get to relax in the airline lounge. By taking the time to check out these criteria, you can make the most of the cards you’re using, too.

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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. Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon.com. The Motley Fool has a disclosure policy.

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