Money Management

Will remote work once again be reserved for the lucky few? Read on to find out. 

When the COVID-19 pandemic hit U.S. soil, many companies were quick to tell employees to pack up their desks, take home their laptops, and gear up to work remotely for the foreseeable future. Little did anyone know back then that the foreseeable future would, for many people, mean three years and counting.

But while many companies have made a point to hang onto remote work arrangements, a growing number of businesses have, over the past year and change, been calling workers back to the office. Many companies feel that their workers are most productive in an office, not at home. And clearly, communications giant Zoom concurs.

Although Zoom is credited with making remote work feasible both during and beyond the pandemic, even it agrees that enough is enough. In a recent statement, Zoom announced that it will be enforcing a structured hybrid approach that requires employees who live near an office to be onsite two days a week. And in the coming months, a growing number of remote work arrangements at other companies could come to an end to at least some degree.

That could result in a huge lifestyle change for many people. And it could also bring forth some unwanted financial consequences.

The financial upside of working from home

For many people, the appeal of remote work stems from not having to deal with the time and stress of a commute. But there are financial benefits to working remotely, and losing those could throw a lot of people for a major loop.

Time-related savings aside, not having to commute could mean saving hundreds of dollars a year on gas or public transportation fees. It could also mean spending a lot less on auto insurance, since vehicles that aren’t used regularly are often eligible for discounted premium rates.

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Then there’s child care to think about. Parents of very young children often have no choice but to pay for daycare no matter where they’re working. But remote work could mean shorter hours at a daycare center — and lower bills. Returning to the office could cause those costs to skyrocket.

And then there are the less obvious costs of reporting to an office, like being tempted to buy lunch and feeling compelled to participate in after-hour events. Plus, for some people, working in an office means having to maintain a business wardrobe, and there’s a cost there, too.

The time to prepare is now

Many companies will no doubt choose to uphold remote work because it benefits them. Companies who hire remote employees can expand their talent pool and, in some cases, save money on office space. Plus, when employers are flexible with their employees, they’re often rewarded with better performance.

But the reality is that a growing number of companies are growing less enamored with remote work. So if you’re currently doing your job from home on a full-time basis, it’s best to at least entertain the possibility of that changing — unless your employer has emphatically stated that remote work is here to stay.

You may, for example, want to start setting aside some extra savings in case you have to start paying for a transit pass again, or in case your child care costs go up due to needing more hours of coverage.

Ideally, if your company decides to make changes to its remote work setup, it will offer up plenty of notice. But even that’s not guaranteed, so it’s best to financially prepare for a big shakeup — just in case.

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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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A savings account isn’t always the right home for your money. Read on to learn more. 

No matter your income or stage of life, you need money set aside in the bank for emergencies. Ideally, your emergency fund should contain enough cash to cover three full months of essential expenses at a minimum. But while it’s a good idea to keep emergency cash in a savings account, here are three scenarios where it’s best to stash your money elsewhere.

1. It’s for retirement

The money you’re setting aside for retirement should be kept outside of a savings account for a couple of reasons. First, you need your money to grow at a faster pace than what a savings account will allow for. Right now, many high-yield savings accounts are paying somewhere in the vicinity of 4% to 4.5%, but today’s rates are unusual. Historically, they’ve been lower on many occasions.

What’s more, while a risk-free 4% or 4.5% return on your money may be nice, the stock market’s average return over the past 50 years, as measured by the S&P 500, has been 10% before inflation. So if you keep your retirement nest egg in a savings account, you might lose out on the higher returns you need to outpace inflation over time.

Also, a savings account won’t give you any sort of tax break on your money. The interest you earn on your money will be taxed at the same rate as ordinary income — the highest rate you’re subject to. A better bet is to save for retirement in an account like an IRA, where your contributions go in tax-free.

2. It’s for college

Just as you need your retirement savings to grow at a pretty rapid rate, so too do you need to see your college savings take off nicely. With retirement, you might have a 40-year window or longer to save. With college, you may be limited to an 18-year window if you want your kids to start as soon as they graduate high school.

There are different accounts you can use to save for college. But if you want to enjoy some tax savings, you may want to consider a Roth IRA or a 529 plan. Both of these accounts allow for tax-free investment gains, and withdrawals are tax-free as well (in the case of a 529, tax-free withdrawals only apply to qualified educational expenses).

3. It’s for a really far-off goal

Generally, it’s not the best idea to invest money you expect to need within seven years. It might take the stock market a long time to recover from an extended slump, so if you’re saving for a near-term goal, keeping your money in the bank is generally a smarter bet.

But if you’re saving for a far-off goal, like buying a second house, and you don’t expect to reach that goal for a good 10 to 15 years, then investing your money could get you closer to meeting that objective. And in that case, you’re better off keeping that money in a brokerage account.

A savings account is a great home for your emergency fund. And if you’re socking away money to pay for holiday gifts in December or take a vacation at the start of 2024, then a savings account is probably your most optimal choice. But if you’re saving for retirement, college, or another far-off goal, then it’s best to put your money to work by investing it, even if that means forgoing the safety of a savings 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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Personal loans can be a good option to cover various expenses. Read on to learn more about the top personal loan topics. 

Personal loans can be used for many reasons, including paying down debt or house repairs. And since they can often be applied for online, and funds can usually be distributed to a borrower’s bank account quickly, they’re often a popular choice for consumers.

A quick look at the most-Googled personal loan topics over the past year shows that borrowers are interested in finding out exactly what personal loans are, why type of debt they’re categorized as, how credit scores affect their terms, and what interest rates are available.

To better understand personal loans, let’s take a closer look at a few of the most popular topics.

1. Personal loans

The most-Googled topic for personal loans was, unsurprisingly, the general topic for what a personal loan is. These loans are versatile because they can be used for nearly anything, including medical expenses, vacations, or home renovations.

They’re also often used for debt consolidation because they offer a simple and predictable monthly payment. The interest rates are typically fixed, and there is a set period that the loans need to be repaid, giving borrowers the same monthly payment each month.

One of the benefits of personal loans is that the application process is often simple. Borrowers can apply online to lenders and find out within one to seven business days if their application has been accepted, according to Rocket Loans.

2. Unsecured debt

The second-most popular topic under personal loans is unsecured loans, which differ from secured loans because they don’t have a physical asset — like a house or a car — tied to them. Credit cards and student loans are also types of unsecured loans.

Personal loans are unsecured debt, and a borrower receives them solely based on their credit worthiness. Because a bank doesn’t have the option of taking a tangible asset if a borrower doesn’t repay the loan, banks make up for this additional risk by charging a higher interest rate than on a mortgage or auto loan.

Higher interest rates add to the overall amount a borrower has to repay for their loan. For example, if you borrow $5,000 at a 10% interest rate for three years, you’ll end up paying

$808 in interest over that period.

If you want to calculate these expenses before applying, you can use a personal loan calculator to help estimate your monthly payment.

3. Credit

A person’s credit score and credit history are some of the most important factors in determining if they will be accepted for a personal loan and what the terms of the loan will be.

Having a good credit score — which is usually defined as 700 or above — can help you secure a better interest rate.

If your score could be better, don’t worry. Some lenders offer personal loans for borrowers with bad credit. Keep in mind that if you have bad credit, you’ll likely have a higher interest rate or different repayment terms that may increase the total repayment amount.

Lowering your debt-to-income ratio — the amount of your monthly income that is spent on debt payments — before you apply for a personal loan may help you improve your terms.

4. Interest rate

The interest rate was in the top five of personal loan terms searched on Google over the past year, and it’s one of the most essential parts of a personal loan.

Most personal loan interest rates are fixed, meaning the rate won’t change over the life of the loan. The rate you receive will depend on your credit history and score, the current market rates for personal loans, and which bank issues the loan.

Because the lender sets the interest rate, it’s crucial for borrowers to shop around before taking out a personal loan. For example, let’s say you’re getting a personal loan for $15,000 with a repayment plan of five years. If one lender offers a 10% interest rate while another offers 11%, the one with the higher interest rate will cost you $445 more in interest over the life of the loan.

In addition to the interest rate, it’s important to compare any fees online lenders may charge. By closely examining the terms, monthly payment, fees, and interest rate, you’ll be able to determine which personal loan is best for you.

Just like the online users who searched Google for information about personal loans, it’s always a good idea to do your research before taking out a loan. Being well-informed before taking on debt can help you determine whether it’s the right decision. And if you need some extra help, you can view our helpful guide to paying off debt here.

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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.Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.

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Lyft and Uber are the duopoly of ride-hailing platforms. But which pays more? Here’s a breakdown by hourly wages and perks. 

If you’re trying to accomplish personal finance goals faster, Lyft and Uber can help you earn extra cash. Both offer their drivers flexible work schedules, decent pay, bonuses, and a slew of perks if you drive frequently enough. But while driving for one is not so different from driving for the other, one company may be paying more. To help you figure out which, let’s analyze both by average hourly wage and perks.

Uber vs. Lyft: Average hourly wage

On average, Uber paid its drivers about 6.2% more per hour than Lyft in 2022: $21.14 versus Lyft’s $19.90, according to the ride-hailing business site Gridwise. Broken down into parts, Uber paid a higher base fare ($9.99 versus Lyft’s $8.97) and Uber passengers also tipped more than Lyft passengers ($2.16 versus $1.71). All in all, Uber drivers in 2022 were grossing about $1,040 on average per month, while Lyft drivers were grossing $787 per month.

Now, that’s not to say Uber drivers always make more than Lyft drivers for the same hours or miles driven. The payment structures on ride-hailing platforms are impossible to generalize, as your actual pay will depend on the demand in your area and the ratio of drivers to passengers. Your market could be saturated with Uber drivers, which could dilute your earnings, while Lyft might need more coverage in that area and will pay you more.

Another factor to consider is the recent regime change at Lyft. With founders and former CEOs Logan Green and John Zimmer handing the reins to David Risher, the platform could be offering competitive fare to steal market share from Uber. If you were earning less from Lyft in the past, it might be worth considering again to see if the payouts have changed.

Uber vs. Lyft: Rewards

Both Uber and Lyft offer rewards programs that give drivers cash back on gas, extra savings on maintenance, and discounts at convenience stores, along with other perks. Though these programs are somewhat similar (and offer some overlapping benefits), Uber offers more competitive perks and ways to save money.

Let’s start with Lyft’s program, “Lyft Rewards.” This rewards system has three tiers — Silver, Gold, and Platinum — with each tier corresponding to a specific score (60% to 80%). You can improve your score by earning points during busy hours and keeping your satisfaction rating high. Here are some of the highlights for the Lyft Rewards program:

Uber’s rewards program is called “Uber Pro,” and it has four levels: Blue, Gold, Platinum, and Diamond. Like Lyft, Uber will slot you into one of these levels based on how many points you earn, as well as your star rating and cancellation rate. Uber includes nearly all of Lyft’s perks, plus about a dozen more. Here’s just a quick overview of the most eye-catching rewards on Uber Pro:

With a free Costco Gold Star membership ($60 value), 100% tuition at Arizona State University, and access to health insurance benefits, Uber’s rewards program has more potential than Lyft Rewards. While these rewards programs can change, Uber currently offers its high-tier drivers more ways to save.

Lyft versus Uber: Drive for both

In sum, Uber appears to pay its drivers more and has more competitive perks. That said, it’s advisable to try both apps to see for yourself which will pay more in your specific area. Over time, however, you might want to choose one over the other, as driving frequently for one can help you achieve the highest tier in its rewards program.

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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 Costco Wholesale and Uber Technologies. The Motley Fool has a disclosure policy.

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Make sure you keep your money in a savings account with a great interest rate. Find out how much you can earn with $10,000 in a high-yield savings account. 

It’s never a bad idea to prepare for the unexpected, especially regarding your finances. Having extra cash in the bank is an excellent way to plan ahead for unexpected financial concerns. For many people, $10,000 is a solid amount of money to have in their emergency fund.

If you’re saving for emergencies, you should keep your money in a high-yield savings account to maximize the interest you earn. Curious how much interest you can make with $10,000 in the bank? Below, I’ll explain how much you can earn with this sum in a high-yield savings account.

Earn more interest with a high-yield savings account

Banks that offer savings accounts that earn interest use an annual percentage yield (APY) to describe the returns one can expect if they keep their money in their savings account for a year.

It’s not unusual for brick-and-mortar banks to offer low APYs for their savings accounts. Your local bank could offer as little as 0.01% APY for its savings account. While you will earn something, it won’t be much at that meager rate.

But a high-yield savings account could offer much more. Many online banks offer 4.00% APY or higher for these accounts. How much interest will you earn by stashing $10,000 in a high-yield savings account? Keep reading to find out.

$10,000 in savings generates this much in interest

To calculate how much interest you’ll earn, take your initial deposit ($10,000) and multiply it by the APY. Doing this will show how much money you’d earn if you keep the money in your bank account for one year.

For the following calculations, I went with a 0.01% APY for a standard savings account and a 4.50% APY for a high-yield savings account. The bank accounts on our best high-yield savings accounts list have APYs ranging from 4.15% to 5.05% — I settled somewhere in between.

These calculations assume an initial $10,000 deposit with no additional deposits made to your account:

$450 sounds much better than $1 to me. Beyond opening a bank account with a higher APY, boosting your earnings potential takes no additional work.

Earn even more with compound interest

The calculations above show how much interest you can earn, keeping $10,000 in the bank for one year. But you can earn even more thanks to compound interest, which is interest that you earn on interest. The longer you keep your money in your savings account, the more you make.

To illustrate the power of compound interest, here’s how much money you’ll make if you keep your initial $10,000 deposit in a high-yield savings account for anywhere from one to five years. Again, these calculations assume you make no additional contributions after the initial deposit.

Here’s a breakdown:

That’s $2,461.81 earned in five years, assuming the APY doesn’t change. It’s worth mentioning that APYs can and do change, so your APY likely won’t stay the same rate forever.

Do this to boost your bank account balance

You’re likely missing out on interest if you don’t have a high-yield savings account. If you have a significant amount of money saved up or are working on a big savings goal, you may want to open a high-yield savings account to maximize the interest you earn. Every bit of money earned from interest adds up and can help to improve your personal finances.

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Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you 11x the national average savings account rate. Click here to uncover the best-in-class picks that landed a spot on our shortlist of the best savings accounts for 2023.

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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