Money Management

Having an HSA could do a lot of positive things for you. Keep reading to learn more about the benefits. 

You never know when you might get hurt or run into a health issue that winds up being expensive. If you don’t have enough money in your savings account to cover your healthcare costs, you could easily wind up in debt over a situation you had no control over.

That’s why it’s so important to set aside money for medical bills. And while you could always stick more money in the bank, if you’re eligible for a health savings account, or HSA, then it pays to open one.

An HSA allows you to save and invest money for near-term and future medical bills. Unlike with an FSA (flexible spending account), you don’t have to use up your HSA balance every year. In fact, it’s a good idea not to use up your balance every year if you can help it, since HSA funds can be invested over time so you have even more cash reserves to tap for medical bills.

Not everyone is eligible for an HSA. Your health insurance plan must meet certain requirements that change yearly for you to open one.

This year, your health plan has to come with a minimum deductible of $1,500 for self-only coverage and $3,000 for family coverage. Your plan also needs to have an out-of-pocket maximum of $7,500 for self-only coverage and $15,000 for family coverage. But if your health insurance plan is compatible with an HSA, then it pays to open one for these key reasons.

1. You can potentially avoid medical debt

The Kaiser Family Foundation reports that roughly 23 million Americans carry medical debt. And that can be a very stressful situation to be in, not to mention a costly one.

If you fund an HSA, you’ll have money to tap for medical bills. That could spare you a world of aggravation. And if you’re able to leave some of that money alone for a few years, all the while investing it, you might end up with a larger balance by the time a major medical issue arises that costs a lot to treat.

2. You’ll get a tax break on your income right away

The money you contribute to an HSA goes in on a pre-tax basis, the same way you get a tax break on traditional individual retirement account (IRA) and 401(k) contributions. So if you put $1,500 into an HSA this year, that’s $1,500 of income the IRS won’t tax you on.

Meanwhile, let’s say you’re in the 22% tax bracket. Not being taxed on $1,500 of income means saving $330.

3. You’ll have back-up retirement savings once you turn 65

Because you’re not required to spend down your HSA balance each year, you can carry a balance all the way into retirement. Meanwhile, costly penalties can apply for taking HSA withdrawals for non-medical expenses. But once you turn 65, those penalties go away. At that point, if your health is great and your medical bills aren’t so hefty, you can use your HSA as a back-up retirement savings plan and dip into it as needed to cover general costs or even splurges.

It’s worth noting that HSA withdrawals are tax-free when used for medical spending. While you won’t be assessed a penalty for taking withdrawals for non-medical reasons once you turn 65, those withdrawals will be taxable in that situation. But that’s no different than withdrawals from an IRA or 401(k).

Funding an HSA could do a lot of good things for you. So if your health insurance plan is compatible with an HSA, then it pays to explore your options for opening one. You should also know that you don’t need your employer to offer you an HSA. If it’s not an option through work, you can reach out to different institutions and open one on your own.

These savings accounts are FDIC insured and could earn you 11x your bank

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.

 Read More 

With proper planning, you can honor your budget while shopping at Target. Learn which social media accounts to follow to save more money at the store. 

With more than 1,900 stores nationwide, Target is a favorite place to shop for many Americans. The popular retailer sells various products, making it an ideal one-stop-shop for busy households. You can also get some great deals if you plan accordingly.

Many Americans are looking for the best deals at retailers like Target in hopes of keeping more money in their checking accounts. Following deal accounts on social media could help you save more money when shopping at Target. Find out which accounts to follow to maximize your savings.

1. TargetDealFinder on Instagram

If you’re looking for the best discounts at Target, you’ll want to follow @TargetDealFinder on Instagram. The social media account is run by Tina, who has had her website Free Stuff Finder since 2011. She shares the best deals available at the popular retailer, including clearance finds and extra Target Circle discount opportunities you don’t want to miss.

2. SavingwithShayna on TikTok

If you like watching TikTok videos and love to get the best deal, you should check out @SavingwithShayna. While her account isn’t exclusive to Target deals, Shayna shares the best discounts and coupon opportunities at many major retailers, including Walgreens, Dollar Tree, CVS, Walmart, and Target. You’ll appreciate her step-by-step video guides if you’re new to the Target Circle Rewards program. Target’s free rewards program is worth joining.

3. TargetTrendSetter on Instagram

@TargetTrendSetter is another Instagram account that can help you save more money at Target. Much of Ashley’s content focuses on the latest products sold at the chain. But she also shares the best deals that she finds at the retailer. If you like shopping for the latest finds but don’t like wasting money, you’ll enjoy her account. Ashley’s videos can help you avoid overspending the next time you head to your local store to make a Target haul.

4. CityCouponMom on TikTok

@CityCouponMom on TikTok is another account worth following to discover the best ways to save money at Target. Rosie is an extreme couponer and deal hunter who shares the best deals at stores like Target, Dollar General, and Walgreens. You can avoid racking up an expensive credit card bill by taking advantage of the deals she shares.

5. FrugalRetailTherapy on Instagram

Another account worth following on Instagram is @FrugalRetailTherapy. Dominique’s account features the best clothing and accessory finds at major retailers like Amazon, Target, and Walmart. She also shares affordable dupes for designer brands. If affordable fashion is something you’re into, you’re going to like her content.

6. TargetPursuit on Instagram

@TargetPursuit is another Instagram account to follow if you want to save money while shopping at Target. This account highlights the best products sold at Target. Pao shares the best weekly Target Circle deals to help followers keep more money in their bank accounts. If you want to maximize your savings, check out this account.

7. SuperSavingsMama on TikTok

The final account on our list is @SuperSavingsMama. Brit is a mom who tries to help other moms save money. Her TikTok videos highlight ways to get the best deals at popular retailers. Target is one store that Brit shops at regularly, and she discusses must-shop sales and discount opportunities that are worth your time. If you want to maximize your savings while shopping at Target, watch some of her videos.

Keep your financial goals top of mind

Shopping at stores like Target without disregarding your financial goals is possible. You can buy what you need without going into debt by learning the best ways to get a good deal at your favorite retailers.

The accounts mentioned above can show you how to save more. Making a shopping list and setting a budget before you walk in the door can also help you avoid overspending. Check out our personal finance resources for additional ways to save money.

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

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. Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon.com, Target, and Walmart. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

 Read More 

Emergency savings are meant to be used (when needed). But read on to see what this writer always aims to do afterward. 

A recent survey by SecureSave found that 67% of Americans don’t have enough savings to cover a $400 emergency expense. However, it’s important to have enough money in your savings account to cover at least three months’ worth of essential expenses. That way, if you were to lose your job, you’d be able to pay your living costs without immediately resorting to credit card debt.

These days, I try my best to keep about a year’s worth of living expenses in my emergency fund. It’s important for me to have that much money in there for a number of reasons, a primary one being that I’m self-employed and have no unemployment benefits to fall back on should I lose my job.

But my emergency fund hasn’t always been this robust. At many points during adulthood, I only had enough money in savings to cover five months’ worth of expenses, or six, as opposed to the 12 months I could cover right now.

Meanwhile, I’ve had to tap my emergency fund many times over the years. When an old car of mine was totaled in a minor accident, for example, I had to dip into my emergency fund to come up with the down payment for a new one. And I’ve had many home repairs that my paycheck couldn’t come close to covering, like having to replace two air conditioning systems and a water heater.

But while I’ve never been hesitant to tap my emergency fund as needed, there’s a rule I always try to follow after the fact. And it’s helped me keep my savings where I want them to be.

I always aim to put the money back

Some people are hesitant to tap their emergency funds and prefer to reach for credit cards so they’re not raiding their savings. This doesn’t make sense to me.

I don’t see the point in paying interest on a credit card when I have the money I need sitting right there in the bank. So even though tapping an emergency fund is not necessarily an easy pill to swallow, it can be a necessary one, and I won’t hesitate to do it when large expenses arise unexpectedly.

But one thing I’ve always tried to do after taking an emergency fund withdrawal is put the money back. And while that hasn’t been easy, I’ve largely managed to do it within six months to a year each time.

One benefit to being self-employed is being able to pick up extra work to boost your income. As a working mom, trust me when I say I have very little time to take on extra work. But I’ve made it happen after raiding my emergency fund to replenish following a withdrawal.

Cutting back on expenses is something else I’ve done in the past to replenish my emergency fund. But that’s harder to do when you have kids and various commitments, so I’ve found that working more has usually been a better option for me.

You don’t want to just keep dipping in

The whole point of having an emergency fund is to be able to dip in as needed. But if you keep taking withdrawals without making any effort to put at least some of that money back, you might end up in a situation where you’re short on savings when the next crisis arises, or you don’t have any savings left at all.

So the next time you’re forced to raid your emergency fund, come up with a plan to replace the money you’ve spent afterward. It might take time, and it could require you to pick up a side hustle to boost your income. But if you’re like me, you’ll enjoy the peace of mind that comes with knowing that your emergency savings have been restored to their original state.

These savings accounts are FDIC insured and could earn you 11x your bank

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.

 Read More 

Ready to move to a large city? Read on to see if that’s the right choice for you. 

Living in a smaller city has its benefits. You might enjoy access to amenities like parks and cafes without having to spend a small fortune to put a roof over your head.

But there may come a point when you’re ready to move from a small city to a larger one. And it’s important to run through these key questions before taking that leap.

1. Can I afford a home there?

Housing tends to be expensive in large cities. So if you make a move, you might end up having to take on a very large mortgage loan or commit to heftier rent payments than you’re used to.

As an example, RentHop reports that the average cost for a studio apartment in New York City is a whopping $3,450 per month for a rental. And if that number shocked you, you probably don’t want to know the average cost to buy an apartment in NYC. (Castle Avenue Team says for a studio, you’re looking at an average of about $968,000. Talk about a giant mortgage.)

As a general rule, your housing costs should not exceed 30% of your take-home pay. This holds true whether you rent your home or own one. And if you go the latter route, that 30% should include all of your recurring housing expenses, like homeowners insurance and property taxes. It should also include any monthly homeowners association (HOA) or condo fees you’re on the hook for.

Of course, if you’re moving to a city where public transportation is quite robust and your transportation expenses will therefore shrink significantly, then that might give you enough wiggle room to spend a little more than 30% of your take-home pay on housing. But either way, you’ll need to look at prices and make sure you can afford that housing market.

2. Am I prepared to live in a smaller home?

Whether you’re renting a home or buying one, housing tends to be more expensive in larger cities than smaller ones. So if you move, you might have to give up some square footage. And that may be a problem if you’re used to having more space.

What’s more, if you work from home, you may have a more difficult time doing so in a smaller home, even if you happen to live alone. It’s one thing to be able to take breaks by moving from your office to your kitchen or bedroom. But if all you can afford in a larger city is a studio apartment, working from home might rapidly lose its appeal when you find yourself staring at the same walls hour after hour.

3. Can I afford to actually take advantage of the amenities and nightlife?

One of the nice things about living in a large city is having access to things like great restaurants, theater, concerts, and more. But if you’re going to be spending so much money on housing that you won’t have any left over to do those things, then a move of this nature may not be worth it.

Of course, on the flip side, moving to a larger city might put you in a position where you’re able to boost your income. That might help you better afford more expensive housing and nightlife. But make sure you’ll be able to actually enjoy the city you’re looking to reside in. It would be a shame, for example, to move to NYC only to spend your nights locked inside your studio eating ramen noodles because you can’t afford to dine out or indulge in a show on occasion.

Moving from a small city to a larger one might open the door to new career opportunities and help you enjoy a better quality of life. But consider these points carefully before making your decision official.

Our picks for the best credit cards

Our experts vetted the most popular offers to land on the select picks that are worthy of a spot in your wallet. These best-in-class cards pack in rich perks, such as big sign-up bonuses, long 0% intro APR offers, and robust rewards. Get started today with our recommended credit cards.

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.Citigroup is an advertising partner of The Ascent, a Motley Fool company. Maurie Backman has positions in Citigroup. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

 Read More 

Some debts can actually help your finances in the long run. Read on to learn more. 

You’ll often hear that debt is bad news, no matter what form it comes in. Racking up a credit card balance could leave you on the hook for a massive amount of interest. And carrying a personal loan or home equity loan balance also means losing money to interest, albeit potentially a smaller percentage than what a credit card might charge.

It’s good advice to try to keep your debt to a minimum in general. But you should also know that there is such a thing as good debt, because certain types could help your financial picture improve in the long run.

Good debts versus bad

Some people will tell you that credit card debt is bad news, mortgage debt is a good kind to have, and most other loans fall somewhere in between. The reality is that the good debt versus bad issue is not so black and white.

You might assume a personal loan falls under the category of bad debt. But if a personal loan allows you to take a certification course that leads to a more lucrative career, then that debt was probably worth racking up.

Similarly, you might hear that an auto loan is a type of bad debt, since cars tend to lose value over time rather than gain value. But if having a car makes it so you’re able to drive to work and earn money, then it can easily be argued that auto loan debt is a good type to have.

And let’s not forget mortgage debt. Many people simply cannot buy a home outright and have to finance that purchase with a mortgage. But over time, home values tend to appreciate.

In fact, according to the St. Louis Fed, during the first quarter of 2020, the median U.S. home sold for $165,300. During the first quarter of 2023, the median home sold for $429,000. So someone who bought a home back in 2020 for $165,300 and sold today might be looking at a profit of around $264,000. It may have taken a mortgage to snag that profit, but clearly, that sort of profit could do a lot for your finances.

Don’t get in over your head

It’s pretty clear that racking up a $5,000 credit card balance to pay for things like travel and electronics is not ideal. But if you take out a $15,000 home equity loan to improve your living space, is that a poor choice? Not necessarily, if it enhances your quality of life and also adds resale value to your home.

Rather than fixate on whether the debt you’re signing up for is good, bad, or somewhere in between, focus on how that debt is going to impact your near-term finances. Will you be able to keep up with your debt payments easily? Will you have to cut back on other expenses to afford those debt payments?

Also remember that while repaying a loan in a timely manner could help your credit score improve, being late with payments could have the opposite effect. So the most important thing to do when looking at debt is to make sure you’re not getting in over your head. From there, focus on sticking to your debt payoff plan instead of worrying what category the debt you took on falls into.

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

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.

 Read More 

It doesn’t necessarily pay to go to your insurer every time there’s an incident at home. Read on to see why. 

Homeowners insurance is an unavoidable expense when you own a home. And in the past, my homeowners policy has picked up the tab for a number of issues that otherwise would have cost me thousands of dollars.

Once, for example, some of the piping in my home came apart due to issues with the way it was installed, causing a big leak. Repair people had to come to my home, rip open our walls, reinstall the piping, and then fix the water damage that had ensued.

That situation was covered by my homeowners insurance because it wasn’t a matter of wear and tear. When your air conditioning system goes out after 12 years, for example, that generally won’t be covered by homeowners insurance because it’s expected to happen, whereas the plumbing issue I ran into was certainly not a normal occurrence.

But there are times when I know I’m looking at an issue that’s covered by my homeowners insurance policy, and yet I won’t submit a claim. Here’s why.

When the cost of the repair is less than my deductible

Homeowners insurance policies require you to pay a deductible on a per-claim basis. Liberty Mutual says the average homeowners insurance deductible is $1,000. Yours may be lower or higher, depending on your coverage.

What’ll sometimes happen is that the cost of the repair I’m looking at is less than my deductible. So in that case, there’s absolutely no point in filing a claim with my insurance company, since I’m going to be paying for the entire cost anyway.

When the cost of the repair is only slightly more than my deductible

In some cases, even if the cost of the repair I’m looking at exceeds my deductible, I’ll cover the entire cost myself anyway. Why do I do this?

The more claims you file against your homeowners policy, the more likely your premium rates are to go up the following year. So if it’s a small difference — say, $50 to $100 — I might just eat the cost myself, because if I don’t, I’m going to end up paying that amount anyway in the form of higher premiums.

Now, I won’t specifically not submit a claim to my insurance company if the repair is, say, $250 above my deductible. A single claim is unlikely to drive the cost of my homeowners policy up by that much from one year to the next. But for smaller discrepancies, I’ll commonly just pay the whole bill myself.

And also, that way, I don’t have to involve my insurance company, which means I don’t have to wait for a claims adjuster to come out and assess the damage. Instead, I can just get whatever it is taken care of right away.

The whole purpose of having homeowners insurance is to be protected when major issues arise in your home. So you shouldn’t be afraid to submit claims when the situation warrants it. But in these specific situations, it may not make sense to file a claim against your homeowners policy.

Our picks for best homeowners insurance companies

There are many homeowners insurance companies to choose from. We’ve researched dozens of options and short-listed our favorites here. Looking for a green build discount or easy bundle policies? Want an easy-to-use interface? Read our free expert review and get a quote today.

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.

 Read More