Money Management

When you get paid, do you pay bills first or add money to your savings? Read on to learn how to prioritize your savings goals. 

If you have big financial goals (such as saving for retirement, buying a home, or paying for your kids’ education), it’s important to prioritize them if you want to have any hope of actually achieving them. It’s also worth creating an emergency fund, to give yourself a pool of cash savings for unplanned bills and surprise expenses.

Unfortunately, that’s sometimes easier said than done, especially if you don’t earn a high salary and most of your paycheck is eaten up by bills and other expenses. By the time all is said and done and you’ve paid your creditors, you might be left with precious little left in your checking account to actually save. What’s the solution? Paying yourself first.

Wait, what? How do you pay yourself first?

When you get paid, make your savings deduction your first move. Many people get paid on a regular basis and in predictable amounts — at least, if you’re a salaried employee and not a freelancer or small business owner. If you don’t get paid as predictably, you can still pay yourself first. I do this every time I get paid as a freelancer.

For example, I know I have to put aside a certain percentage of my earnings to cover freelance quarterly estimated taxes, and I also have a dollar amount that I take out to meet my own savings goals (currently, saving to buy a house and cover expenses for an upcoming vacation). I treat these costs as bills and transfer the money to cover them right to my savings account every time I get paid, BEFORE I pay anything else.

If you treat saving money as an afterthought, you might be more inclined to just wait until the end of the month and set aside whatever’s left in your account after all your bills and other expenses are paid. But what if there isn’t anything left? You might not save any money at all. So what happens to your goals? They don’t get funded.

Automating your savings can help

I really enjoy making those transfers from checking to savings, and I don’t mind doing it manually — which is one reason I haven’t automated my savings for taxes and buying a home. But automating savings and retirement account contributions is really helpful for a lot of people.

You can set up an automatic transfer of cash from your checking account to your savings; it’s likely an option in your online banking portal or even your bank’s mobile app. The bank I keep my main checking account with allows account holders to set up transfers to another account once a week or once a month (among other options), for example.

Your bank likely has similar options, and you might be able to select a specific day that your savings contribution will be transferred. If you get paid on the 1st and 15th of every month, setting up transfers for those specific days will ensure your goals get funded, and you can’t accidentally spend the money before it leaves your account.

You can likely set up the same kind of transfer from your checking account to an IRA. If you’re eligible to join a 401(k) plan at work, those contributions can also be made directly from your paychecks to the account.

If you struggle to save money for emergencies and future goals, consider paying yourself first (and automating the transfer from checking to savings or a retirement account can help). Waiting until all your bills and other expenses are paid could leave you with little or nothing left to save.

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We were able to use a remote notary for our recent home closing, so we did not have to go anywhere and no one had to come to us. 

Recently, I sold my home. I have sold several properties, and normally when someone buys a house I’ve owned, the closing process has been a huge pain. We have sat for a long period at a title office while the office looked for some HOA paperwork. And we have had notaries come to our home, sometimes showing up late or coming at inconvenient times like at 7 a.m.

Once, we even had to ask a neighbor we didn’t know to come over to be a witness for us when we signed the papers because our notary didn’t realize we wouldn’t have a non–family member witness present in our home at 10 a.m. on a random Tuesday.

This recent home closing was a breeze, though. And there’s one simple reason why.

This made our home closing a delight

Our recent home closing was the most pleasant one ever because we were able to complete the entire process using a remote notary.

Essentially, instead of having to meet with someone in person, we were able to provide our IDs and answer some basic identifying questions using an online link the notary provided to us. Then, we jumped onto a Zoom call. The notary had us hold up our identifications next to our faces to confirm who we were, and then she provided us with a link to a whole bunch of online documents that we could e-sign while she watched us do it on the webcam.

There was even a witness who jumped on the call at the time when we needed to sign the property deed, which had to be witnessed by both the notary and a third party. The witness also watched the signing on the conference call, and she put her signature electronically on the forms as well.

The whole thing took about 20 minutes, and we were able to do it from the comfort of our campground where we were on vacation, rather than having to go anywhere or have anyone come to us.

Is a remote notary right for you?

Remote notaries have become accepted in a growing number of states, but that doesn’t mean they will be allowed in every location or every real estate transaction. Some mortgage lenders or title companies may not allow this option, and not all states have laws allowing remote notarization.

But, if you are allowed to do it, there’s very little reason why you would need to show up in person to close on a home — especially if you are selling and don’t need to be there in person to get the keys. Why not just do it from the comfort of your own place so you won’t have to go out of your way or wait for an undetermined amount of time?

We’re all pretty used to Zoom and remote meetings from the pandemic anyway, so it’s no surprise they’ve come to real estate closings — and are making them a lot more convenient than they ever were before.

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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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SNAP food benefits help over 40 million households keep food on the table. Learn why some families don’t claim their payments and what steps they can take. 

A recent report showed that a shocking number of households who could claim food benefits are not doing so. The amount that people receive varies depending on factors like household size, location, and income. For example, the maximum a family of four can receive in most states for the current fiscal year is $939 a month. But many eligible SNAP households aren’t getting a cent.

“Despite all study participants being entitled to participate in SNAP and despite its potential benefits, less than 55% of eligible households participated in SNAP across all racial groups,” per the SNAP study. Researchers at Johns Hopkins university also found that Black and multiracial households had higher rates of food insecurity than white households.

The Supplemental Nutrition Assistance Program (SNAP) is designed to help low-income families afford nutritious food. Last year, around 42 million households received SNAP benefits. That’s significant, but many more are entitled to receive assistance.

Why don’t eligible households claim their food benefits?

The report authors describe the SNAP application process as “cumbersome” and say that this is the main reason so many low-income adults don’t participate in the program. Other people don’t even know that they might be entitled to the extra cash.

According to mRelief, a nonprofit that aims to make it easier to apply for food benefits, the average applicant needs to fill out a 17-plus page application or participate in a 90-minute phone call. “Many people don’t know they are eligible,” mRelief said in a recent blog post. “Others choose not to apply due to stigma or the long enrollment process.”

The eligibility requirements are pretty transparent, but they aren’t super easy to understand. For example, to qualify for SNAP benefits in most U.S. states, households need to meet a couple of criteria:

Gross income: This is the total amount of money you receive. In most cases, it must be at or below 130% of the federal poverty line. For a family of four, this means earning $3,007 or less a month.Net income: This is the gross income minus any deductions, and it has to be at or below 100% of the federal poverty line. There are various deductions, including child support, medical expenses, and other costs. For a family of four, this means $2,313 or less a month.Assets: Households cannot have more than $2,750 in cash in their checking or savings accounts. If one member of the household is 60 or over or has a disability, they can still qualify for SNAP with $4,250 in funds.

There are various other requirements. For example, an unemployed adult with no dependents is only entitled to three months of benefits every three years. There are some exceptions to this rule, and some states do not enforce it. If you’re not sure about the rules or find the criteria overwhelming, don’t panic. Contact your state’s SNAP office to find out if you might qualify.

How to apply for SNAP benefits

Food benefits make a difference to tens of millions of U.S. households. They can reduce hunger and improve families’ ability to buy the food they need. Let’s say your four-person household brings in $2,000 a month and you qualify for food benefits. Depending on the deductions you need to make, you might be able to claim more than $300 a month in SNAP payments.

If you think you might be eligible, consider what you might do with an extra couple of hundred dollars in your bank account each month. You might feel there’s a stigma attached to applying for benefits or be put off by the amount of paperwork or the interview process. All those concerns are understandable, but try not to let them hold you back.

To apply, start with your local SNAP office. You will need to answer questions about your circumstances and provide certain documents. These may include pay stubs and other information about your income and financial situation. Other documents can include rent documents, property taxes, and your Social Security card.

The process varies by state. You’ll need to fill out a form, which most states will let you do online. Your local SNAP office may then reach out to you to ask for additional documents or ask you for an interview. Bear in mind that it can take as much as 30 days to process your application, and claims have been delayed in some states recently.

Get outside help if you’re not sure where to start

There are a couple of NGOs out there that can help people with their SNAP applications, including mRelief. The mRelief platform aims to simplify the process, including an eligibility screener that makes it easy to find out whether you qualify. The National Council on Aging also has a benefits check-up tool. Local food banks can also help you navigate the process.

If you do qualify for SNAP benefits, you will receive cash each month to spend on food. There are some restrictions on what types of food you can buy, but it covers items like meat, fruit and vegetables, dairy products, and bread. If you’re a low-income household, don’t miss out on a potential SNAP boost to your budget.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Emma Newbery has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Your IRA balance might drop from time to time. Read on to see why you shouldn’t worry about it. 

Saving money for retirement is important, because without a solid nest egg, you might end up struggling financially once your career wraps up. Now ideally, you won’t just save for retirement by socking cash away in a savings account. A better bet is to open an IRA and invest your money so it can grow into a larger sum over time.

But investing carries risk, and you may find that the value of your IRA declines at different points during your career. This can be quite unsettling. But rest assured it’s really nothing to worry about.

When you’re not ready to tap your IRA

A decline in your IRA’s value has the potential to be problematic if you’re already in retirement and are taking withdrawals. That’s because cashing out investments while they’re down means locking in permanent losses.

A good way to avoid that is to make sure to retain enough cash in the bank to cover one to two years’ worth of living expenses in retirement. That way, you can potentially leave your IRA alone to regain lost value.

Meanwhile, the value of your IRA might rise and fall quite a bit during your career. And while seeing your balance rise is always a nice thing, seeing it fall is clearly the opposite.

But one thing you need to realize is that it’s normal for IRA values to fluctuate. And if you’re many years away from retirement, you shouldn’t lose sleep over the fact that your IRA has lost some value.

If the stock market is going through a rough patch, that alone might cause the value of your IRA to drop. Or, it may be that you’re heavily invested in a few companies whose share prices have plummeted.

Either way, if you’re in your 30s or 40s, for example, with no plans to tap your IRA for another 20 to 30 years, then drops like that aren’t something to stress about. In time, your IRA is likely to regain lost value if you simply leave it alone.

Case in point: During the first quarter of 2018, the average IRA balance was $106,100, reports Fidelity. By the fourth quarter of 2022, the average balance had dropped to $104,000.

But as of the first quarter of 2023, the average IRA balance was back up to $109,000. So it just goes to show that there’s really no need to panic over a temporary drop in your IRA’s value — even if that drop lasts for months or even years.

It helps to think long term

It can definitely be disheartening to see the value of your IRA decline, especially when you’re working so hard to pump money into it. But remember, you may not be looking to use the money in your IRA account for another 20, 30, or 40 years. And a lot can happen over time.

So don’t get hung up on a drop in your IRA balance, and also, don’t check your balance all that frequently. A glance every three months is appropriate, but beyond that, you may only be torturing yourself needlessly.

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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 no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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When many homes in my neighborhood were too pricey and remodeled in a way I didn’t like, I decided to remodel a home on my own instead. Find out more. 

Remodeling a house can be a huge hassle. There’s a lot of time involved in finding a contractor, deciding what work needs to be done, and selecting materials like flooring and countertops. There’s also a lot of uncertainty in terms of how long it is going to take to perform the work, how it will turn out, and whether the contractor is trustworthy or not.

Because of all these downsides, I did not want to remodel or build a home when purchasing a new property. Instead, my goal was to find a finished home that I loved and that I could move into. Unfortunately, things didn’t turn out that way.

Here’s why I ended up having to buy a house that needs remodeling

The big reason why I ended up having to purchase a home that needs remodeling is because I could not find one I liked that didn’t need an upgrade.

In June 2023, there were 25.7% fewer homes listed on the market compared with the number of properties that were listed in the same month in 2022. Unfortunately, with so few houses actually on the market, there was not much available for me to buy.

The few houses that did get listed also went on the market at a price that was higher than I was willing to pay. I did not want to go above my desired budget when purchasing a home because I’m not interested in becoming house poor.

And many of those remodeled homes were done in the same generic “2023” style with gray walls and gray wood-look tile floors and ultramodern kitchens, and I just don’t really like that look — or want to pay the premium that people were charging for it because they had put money into upgrading the house before listing it.

Since I couldn’t find what I wanted on the market, I had to think outside the box. That involved finding a property for rent that needed a lot of remodeling and making an offer to buy it. This allowed me to have a mortgage payment that I’m comfortable with. And I can pay for some of the upgrades the house needs over time out of my bank account as I earn money to cover them so I don’t have to borrow as much upfront.

How I’m making sure my remodeling costs stay reasonable

Since I didn’t really want to buy a remodel but I got stuck doing so, I’ve taken a few steps to make sure my costs don’t get out of control. These include:

Staying off Pinterest so I’m not inspired to go crazy with adding a ton of custom features that just drive up the cost.Getting a price from a contractor upfront before making an offer on the home so I can understand my total costs of both the purchase and remodel before moving forward.Selecting all of my materials upfront so they can be priced in and there are no surprises.

Hopefully, this approach will work out well for me and I’ll end up with a house that I love without breaking my home-buying budget.

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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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