Money Management

Switching banks can be a big project. Learn more why you need to make a switch if you are currently paying high fees. 

Changing banks can feel like a real ordeal. When you switch your checking account, you have to change your direct deposit if you are having money put into your account automatically. You’ll also need to modify any automatic payments that come out of your bank account, whether those payments are transfers to a brokerage account or credit card payments or utility bills, gym memberships, or other expenses.

But while it can be a hassle to go through the process of changing banks, there are circumstances where it makes sense to do so. In fact, here are a few key situations when you should make a switch.

1. When your current bank is charging you fees

Banks rely heavily on fees from consumers to make hefty profits. These fees can include everything from monthly maintenance fees to overdraft fees. In fact, the Consumer Financial Protection Bureau reported that overdraft fees alone accounted for more than $15 billion in bank revenue in 2019.

Unfortunately, if you are getting hit with fees, you’re getting poorer while your bank gets richer. There’s no reason for that. You should look for a bank that won’t charge you for being a customer or having your balance drop below a certain monthly level. There are even banks that don’t charge overdraft fees, so if you find yourself facing these costs regularly, switching to one is definitely worthwhile.

2. When you can earn a better rate of return elsewhere

If you have money in a savings account, you should compare the APR your current bank is offering you with the interest rate other banks are paying. If you can earn more by moving your savings to a different account, it may be worth doing — especially if you can get a big bump in your interest rate and you have a lot of money in your savings account.

Say your current account is paying you 0.5% interest, and you could instead switch to one paying you 4%. If you had $5,000 in your savings account, you’d go from earning $25 a year in interest to $200. That extra money makes it worth the effort to switch banks.

3. When your bank’s customer service has you frustrated

If you are regularly having a bad experience with your bank’s customer service, there is no reason to put up with that any longer. There are plenty of banks out there who will earn your business by taking better care of you as a customer, via the phone, email, or a mobile app.

4. When you can’t do what you need to with your bank’s mobile app

Finally, if your bank’s mobile app is disappointing, you should consider changing to a financial institution that does a better job with its app. Many people handle most of their routine banking tasks online, from paying bills to depositing checks. If you can’t easily do these things on the app, why cause yourself continual frustration by sticking with your bank?

If any of these four situations apply to you, start looking around for a better bank today. Once you get through the process of switching your accounts over, you’ll be a lot happier.

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Are you a teacher who is starting to do their back-to-school shopping? Find out how to save on your next Target shopping trip. 

Now that August is near, many teachers are starting to do their back-to-school shopping. In addition to buying necessary classroom supplies, many teachers are stocking up on everyday essentials and work clothes before school is back in session. Target is running a promotion that can help teachers keep more money in their checking accounts. Now through Aug. 26, educators can save 20% on a Target haul.

This deal can help teachers keep more money in their pockets

Target’s annual teacher appreciation event is back to celebrate all the hard work that teachers do. This year, teachers can get a one-time 20% discount on their entire Target shopping trip — not just on eligible school supplies. You don’t want to miss out on this deal if you’re a teacher.

Through Aug. 26, eligible teachers can activate this Target Circle offer in the Target mobile app. The deal is available in store and online. Educators must have a Target Circle account — the loyalty program is free to join. The following educators quality for this deal:

K-12 teachersHomeschool teachersDaycare and early childhood learning center educatorsUniversity and college professorsVocational/trade/technical school teachers

You must verify your teacher eligibility first to see this Target Circle Offer in the mobile app. You can do so by taking the following steps:

Log into your Target Circle account.Navigate to “Account.”Next, click “Settings.”Finally, select “Teacher verification” and follow the prompts to verify eligibility.

After doing this, you should see the offer in your mobile app. You’ll need to activate the offer before shopping to get a discount on your order. Remember, this is a one-time discount — so plan your shopping trip accordingly to maximize the savings you receive. More money saved can be a win for your high-yield savings account.

How to save money while shopping at Target

Many towns and cities nationwide have a Target store, so you likely do at least some shopping at the popular retailer. If you’re on a tight budget, you may be looking for the best ways to keep your spending to a minimum. These tips can help you save money at Target:

Bring reusable bags: Target awards shoppers a $0.05 discount for every reusable bag they bring. While you won’t get rich by this discount alone, a little bit can add up over time — plus, it’s a good move for the planet.Join Target Circle: The Target Circle program is a free rewards program. As a member, you’ll earn 1% back in rewards, which can be redeemed for a discount on future shopping trips. You can also activate Target Circle offers to get discounts and earn gift cards when you make eligible purchases.Don’t forget the price match guarantee: Target has an impressive price match guarantee. If you find an identical item you recently purchased for less at your local Target store, Target.com, or a qualifying competitor, Target will match the lower price. You must request a price match within 14 days of purchase.

Remember these tips the next time you visit Target. Any amount of money saved can be a win for your personal finances. To avoid overspending, we recommend making a shopping list before you arrive. You can research product prices in the Target app to stay on 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.Citigroup 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 Target. The Motley Fool has a disclosure policy.

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Want to build up a college fund? Read on to see why a regular brokerage account might be your best bet. 

The cost of college has risen dramatically over time. For the most recent academic year, the average cost of tuition and fees at an in-state, public four-year college was $10,423, according to U.S. News & World Report. And that’s pretty much the least expensive option for four-year college.

You may be inclined to do what you can to save well for your kids’ education. And to that end, you may be eager to either open a 529 plan or sock funds away in a Roth IRA. Both of these options offer the benefit of tax-free investment gains and withdrawals. But here’s why you may want to put your college savings into a regular, taxable brokerage account instead.

1. There are no yearly contribution limits to follow

If you opt to save for college in a Roth IRA, you’ll be subject to whatever annual contribution limits apply at the time. Right now, you’re limited to $6,500 a year if you’re under the age of 50. But if you don’t have such a long window of time to save for college, you might prefer to set aside more money than that per year to cover your kids’ education costs.

The great thing about a traditional brokerage account is that there are no annual contribution limits to adhere to. You can fund your account with $5,000 in a given year, $10,000, or more — the choice is yours and can hinge on what you can comfortably afford.

2. Your money is not restricted in any way

With a 529 plan, you’ll be penalized on the gains portion of your account if you withdraw funds for non-education purposes. And with a Roth IRA, similar penalties can apply for taking an early withdrawal for a non-qualified reason (you can tap an IRA ahead of retirement without incurring penalties for purposes like paying for higher education and buying a first home).

Now, in the case of a Roth IRA, you get more flexibility with your money than a 529 plan, because you could always opt to reserve funds not needed for college for retirement (though starting next year, 529s will allow for a limited lifetime rollover to a Roth IRA for funds not needed for education). But with a traditional brokerage account, your money is not restricted at all.

You can withdraw funds from a traditional brokerage account to pay for furniture, a car, or anything you want. There are no tax benefits to be had with one of these accounts, so you’re able to do what you want with your money. This means there are no penalties to worry about, period.

It’s easy to see why you may be eager to enjoy some tax savings in the course of putting money away for college. But if you like the idea of getting to contribute as much as you want for college savings on an annual basis, as well as the idea of being able to use your money as you please, then a regular brokerage account could end up being a better option for you. This especially holds true if you want your kids to go to college but acknowledge that there’s a chance they may wind up opting out.

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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 making an offer to buy a house, I got pre-approved for a home loan. Read on to learn why this makes my offer stronger than it otherwise would have been. 

I will soon be making an offer to buy a new home. But, before I actually put in the offer paperwork, there’s an important step I took first. I wanted to make sure I was ready to move forward financially and that I could maximize my chances of getting my offer approved, so taking care of this task was vital to me.

This was the one big thing I did before making an offer

Before I moved forward with making an offer to buy a house, I shopped around for a mortgage and got pre-approved by a mortgage lender.

This was a lot of hassle for me because I am self-employed, so I’m not eligible to get a quick automated pre-approval as many people are after providing some pay stubs and having a credit check done. I had to send in a ton of documents, including business and personal tax returns.

But despite the time that it took to get rates from different lenders and to actually get pre-approval, it was worth the effort for me. And, in fact, I went through this process at the beginning of my home-buying journey even before I had found a house to buy. I did this because I know that pre-approval letters often expire about 30 to 60 days after they are issued, so I would have time before my approval expired to find a home that I liked and make an offer.

Here’s why pre-approval is so important

There were a few really important reasons why I pursued the process of getting pre-approved for a mortgage loan, even before I had found a property I wanted and well before I was ready to make an offer.

For one thing, some of the houses I wanted to go see required pre-approval. I would not have been allowed to view them if I didn’t have a letter from a mortgage lender saying I had the funds to buy them. This would have been really annoying, as I wanted to make sure I took a look at every house I might potentially want to buy in my chosen neighborhood.

More importantly, I know there is a lot of competition for houses in the neighborhood where I want to live. And there aren’t many houses coming onto the market. When I found one, I wanted to be ready to put in the strongest offer possible right away, which would mean I had to include proof of pre-approval with my offer.

Now, I’m at the point where I’m putting in the offer and moving forward with the buying process. So, my pre-approval letter will come in handy to submit with my offer. I don’t have the added stress of trying to find a lender quickly, submit my many documents, and hope that I can get my offer in on time.

If you’re looking to buy a home, you should make sure to get pre-approval early in the process, too. This can help you see what you can afford and what rate you’ll pay, and also ensure you’re ready to jump on making an offer when a house you like comes along.

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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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