Money Management

It’s easy to forget about a subscription or lose track of automatic monthly payments. Here’s how to stop throwing away your money on services you don’t use. 

Subscriptions can be sneaky. Especially the ones that give you an introductory discount and then dramatically increase the price when you’re not looking. Or the ones that push you to sign up for an ongoing service even when you’re only planning to use it once.

Many companies have realized that subscriptions are a great money maker. Rather than investing effort into making repeat sales, they can tie you into an ongoing payment that automatically slips out of your bank account. It switches the relationship as the onus is on you to cancel rather than them needing to sell. And human nature is such that we often let those things slide.

That’s not to say all subscriptions are bad. Some of them are extremely useful and add value to our lives. The automatic payment means you don’t have to think about it. The trick is keeping track of them and periodically canceling the ones that are just sucking your money. Here are four signs you could be wasting money on subscriptions.

1. You aren’t using them

According to a survey by C+R Research, 42% of Americans had forgotten about a monthly subscription they were still paying for. Take a look through your bank statements and list out all the regular payments. If you can go back a whole year, so much the better. That way you’ll catch any annual payments as well as the monthly or quarterly ones.

Be especially aware of what we might call “aspirational” subscriptions. Perhaps it’s a keep-fit app or a learning platform. It can be anything you signed up to with the intention of improving your body or mind, but didn’t stick to the habit. These can be the hardest to cancel, particularly if you still want to get fitter or learn more. Try to be honest with yourself about whether you’ll really use it.

If you haven’t used the service in the past few months, cancel it. Perhaps look for a free alternative you can use while you change your routine. You can always resubscribe to the paid option when you have more time or motivation.

2. You don’t have money for other things

If you get to the end of each month and wonder where your paycheck went, you’re not alone. Increasing living costs have put pressure on many peoples’ already-stretched budgets. If you’re struggling to put money into a savings account for an emergency or afford to cover your bills, subscription services could be partly to blame.

The C+R survey showed that people dramatically underestimate the amount they spend on subscription services. When asked to ballpark their subscription costs, on average, they estimated it came to $86. Then they itemized those expenses and the number rose to a whopping $219.

When you review your subscriptions, try to look at them in the context of your wider budget. A budgeting app could help here. Let’s say you’ve allocated 10% of your budget to entertainment. If you’re already spending that on streaming services and other subscriptions, you may not be able to afford to go to the cinema or eat out. There are no right or wrong answers here, it’s about making conscious decisions about where your money goes.

3. You could get the same services for free

It’s amazing how much you get for free or for a small set cost. And you don’t have to spend hours finding the free options. For example, let’s say you’re a bookworm and pay for both Kindle Unlimited and Audible. That’s a total of almost $20 each month — $240 a year.

Instead, you could sign up at your local library for free. You’ll be able to borrow physical books and use the library’s services. Plus, a library card gives you access to Libby, a free ebook app with ebooks, audiobooks, and magazines.

Another option? Ask for help. The other week I needed to edit and shrink a PDF file. The free options didn’t do what I wanted, but several of the paid services wanted to tie me into a monthly payment. It was only a one-off job and I really didn’t want to commit as I’ve been burned by these services before. For example, Adobe Acrobat Pro charges almost $30 a month. Eventually, I found a friend with a subscription who helped me out at no cost.

4. You only want a single product — and it costs less

In the long run, it’s often cheaper to buy one item than sign up for a monthly fee. For example, to access Prime Video, you’ll need an Amazon Prime subscription at $14.99 a month. Some people are regular Amazon customers and get good value from that fee. But if you’re only signing up so you can watch a couple of movies, you might instead be able to rent them individually. Some (not all) movies are available on Amazon for $2.99 or $3.99.

Another example? I recently found some super interesting online courses. A monthly $10 subscription would have given me access to everything on the platform. Instead, I spent $30 to own the courses I actually want to do. I don’t need all the courses and I don’t have time to do them.

Bottom line

Businesses increasingly want us to subscribe to their services. They may incentivize subscriptions with free trials or huge discounts on, say, your first six months. That’s one thing when these are services you use and get value from. But if you’re paying for subscriptions you don’t use or don’t need, you’re throwing money away. Cutting those ties could save you hundreds of dollars.

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A federal law is in place that requires hospitals to treat all patients in an emergency situation. Keep reading to learn when this law does not apply. 

Imagine that you’re hiking, fall, and break your leg. A friend gets you to the nearest hospital, where you’re told you’ll need to cough up your insurance deductible before X-rays are taken. Unfortunately, you’re on a high-deductible insurance plan and don’t have an extra $3,000. Is what the hospital doing legal? Do you have any recourse? Here, we dig into these questions.

A nation without universal healthcare

There are 195 countries on this planet and 152 offer free or universal healthcare to at least 90% of their citizens. The United States does not. In fact, the U.S. is the only country in the developed world without a universal healthcare system. We join countries like Iran, Pakistan, Yemen, and Nigeria in allowing the uninsured sick to fend for themselves.

What does a lack of universal healthcare have to do with hospitals demanding prepayment? According to Very Well Health, between the uninsured, underinsured, and the number of people living without enough savings to cover such an emergency, hospitals “know after the procedure is completed, people may not pay what they owe.”

So what happens to the roughly 30 million Americans who are uninsured when they are injured or ill? What about the 56% of Americans who say they don’t have enough money saved to cover a $1,000 emergency and cannot make a large upfront payment before receiving care? Are U.S. hospitals required to treat them when they show up in the emergency room?

The answer is both “yes” and “no.”

EMTALA

A federal law called the Emergency Medical Treatment and Active Labor Act (EMTALA) requires almost all hospitals to provide emergency medical treatment, regardless of whether the patient has health insurance.

EMTALA applies to all hospitals that:

Have an emergency departmentAccept Medicare payments from the federal government

According to All Law, nearly every hospital in the U.S. meets both of these requirements, meaning they should all provide emergency medical care, no matter what. Can’t produce an insurance card or pay a medical bill upfront? They should still offer stabilizing treatment.

You don’t even have to make it into the emergency room. EMTALA states that you should receive emergency treatment as long as you’re on hospital property and within 250 yards of the main hospital building.

Two reasons hospitals should not request upfront payment

Any medical facility without an emergency room (like your doctor’s office) can request payment upfront. However, there are two primary reasons your local hospital probably cannot deny care:

The contracts signed by insurance providers and medical providers normally prohibit medical providers from requiring payment before medical services are provided, reports Very Well Health.Per the American College of Emergency Physicians (ACEP), emergency departments are unique, and anyone with an emergency must be treated or stabilized, regardless of their ability to pay.

Hospitals know the rules, but that doesn’t mean all follow them.

Exceptions to the rule

While the EMTALA makes it clear that hospitals must treat or stabilize anyone who comes to them with an emergency, there are exceptions to the rule.

Here are the scenarios under which a hospital can refuse to admit or treat a patient:

When it’s a non-emergency case and the patient does not have health insurance.When the hospital is short on resources. For example, a hospital that is short-staffed, needs more medical supplies, is overcrowded, or needs more beds can look for another hospital to treat the patient.When a hospital believes a patient would receive better treatment at a different hospital. For example, if a heart transplant patient comes into the E.R. exhibiting signs of organ rejection, a small hospital may seek a larger facility with transplant surgeons on staff.When a hospital does not have the medical personnel or equipment required to properly treat a patient.

Under no circumstances can a hospital deny treatment based on age, sex, or religious affiliation.

The bottom line is this: While hospitals are required by law to provide care to all patients suffering from a medical emergency, there are circumstances under which they are permitted to deny service. However, you’re unlikely to know that until you’re at the hospital.

No matter what your financial situation is or whether you have health insurance, you should always seek medical attention when you need it. There’s no reason to risk your life over fear that you may not be treated. If your condition is serious, hospitals must stabilize you and/or find another hospital to continue your treatment. Hospitals can be legally liable for injury or death resulting from failure to treat or admit you.

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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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There are rules you need to follow when investing in I bonds. Read on to learn more. 

One benefit of putting your money into bonds, as opposed to loading up a brokerage account with stocks, is that they tend to be less volatile. They’re a good investment option for people who are very risk-averse, or who are in or approaching retirement and want more stability in their portfolios.

Now, there are different types of bonds you can invest in, from corporate bonds (those issued by different companies) to municipal bonds (those issued by different cities, states, and localities). But you may be tempted to put your money into I bonds.

I bonds are government-backed bonds whose interest rate is pegged to inflation. During periods when inflation is high, I bonds can be a good bet, because you might manage to score a high rate of interest on your money while taking on minimal risk.

As an example, right now, I bonds are paying 4.3% interest through Oct. 31, 2023. And while that’s comparable to what some savings accounts are paying in interest, savings accounts rates are not guaranteed.

Your bank might give you 4.25% on your money today only for you to see that rate drop to 3.75% in a few months. With I bonds, you’re guaranteed 4.3% through late October, at which point the rate on your bonds will readjust based on inflation levels.

If you’re going to purchase I bonds, however, you should know that they come with pretty specific rules. And it’s important to familiarize yourself with them before locking your money away.

Beware the early cash-out penalty

There are different benefits to owning I bonds. In addition to snagging a competitive interest rate on your money, earnings from I bonds are exempt from local and state taxes. And federal income taxes can be deferred until you redeem your bonds.

However, you should know that you’re required to hold I bonds for at least a full year before cashing them out. And if you cash out your I bonds before having held them for five years, you’ll be penalized to the tune of any interest you earned during the three months prior.

That’s why it’s really important to make sure I bonds are a good investment for you before committing to them. And also, it’s important to have access to other money you can use in an emergency so you’re not forced to cash out I bonds early at a penalty.

Will I bonds make sense once inflation levels drop?

They may or may not. As mentioned above, the interest rate on I bonds will reset on Nov. 1. Once that rate is made public, you’ll need to decide if I bonds make sense for you to buy from scratch.

Remember, too, that even if you buy your bonds by the end of October and lock in a 4.3% interest rate, that rate will renew in November. It’s not like you’re locking in that rate for the duration of your bonds. So that’s something you’ll need to consider, because there may be other types of bonds that make more sense for you to buy if you’re looking to invest within that asset class.

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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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Have you recently paid off your car or are getting close? Learn the best thing to do with the cash you were previously putting toward your car payment. 

If you’re reading this, I’ll assume that you’ve recently paid off your vehicle, or you’re getting really close to doing so. Congratulations! Auto loan payments can be a huge drain on your personal finances each month. According to data from Edmunds, in Q1 2023, the average monthly car payment for new vehicles reached a high of $730, while used vehicle payments averaged $551. That’s a lot of money to set aside in your budget each month to make sure you have a means of transportation. So paying it off and putting an end to those monthly payments is a huge accomplishment.

If you’re now sitting on several hundred extra dollars per month and you’re wondering what you should do with that cash, look no further. You should invest it — right away! Here’s why.

Assign that cash a new job before you can miss it

You may have heard that it’s a good idea to take your annual raise at work and increase your 401(k) contributions by that amount. The idea is that you’ll never miss the extra money in your paycheck if you never saw it to begin with. This follows the same line of thinking. If you’re used to throwing $500 toward your car payment every month, but you immediately give that $500 a new job the month after your car is paid off, then you never really had the extra $500 to otherwise use or miss.

As soon as your last car payment goes through, I recommend immediately logging into your brokerage account (or opening a brokerage account if you’re a beginning investor), and setting up automatic monthly contributions equal to the amount of your car payment. You’ll be amazed what a modest monthly contribution could mean for the growth of your investments over time.

An illustration

Let’s look at an illustration to get a better idea of what you might stand to gain by investing your previous car payments funds. For our example, we’ll imagine your car payment was $500 per month, slightly below the current average on a used vehicle. We’ll show what that amount invested each month would grow to over time periods of one, two, five, and 10 years. For our calculations, we’ll assume an average 10% rate of return equal to about what we can expect from the S&P 500, historically speaking. (Note: While you should certainly continue investing beyond 10 years if possible, we’re imagining that’s about the point in time at which you may want or need to buy a new vehicle and once again have a car payment).

After 10 years, you’ve invested $60,000 of your own dollars, but you’ve earned over $40,000 in interest, bringing you to a total balance of over $100,000! And all with a sacrifice that you shouldn’t even have noticed along the way. To take this example just a step further, let’s assume at the end of 10 years you buy a new car and stop contributing to your brokerage account entirely. Without investing another dollar of your own money, at the end of another 20 years, your account balance will have grown from $100,728.80 to $677,653!

Shoulda, coulda, woulda

I’ll be honest — seeing those numbers leaves me with some feelings of regret. I paid my car off several years ago and unfortunately did not have the wisdom at the time to make this move. And now, the money that used to go toward my car payment has slowly seeped into other parts of my budget in the form of higher grocery tabs, more travel and entertainment spending, and more meals out with friends. If I were to try to enact this plan now, I’d have to really make an effort to cut back and carve out the money to do so.

So don’t make my mistake, and invest right away — before you even get a chance to notice the extra cash sitting around in your checking account each month.

A disclaimer

Before making this move, it’s a good idea to make sure you have a fully stocked emergency fund. Experts recommend having three to six months’ worth of living expenses in a savings account to account for life’s unknowns. If you don’t yet have an emergency fund, perhaps you could make your car payment funds act twofold. Try sending half of the amount to a high-yield savings account each month until your emergency fund is complete, while the other half gets invested.

The less you invest each month, the less your money will grow, but compound growth is an amazing thing, and it will work wonders whether you invest $250 per month, or $500. Start investing as much of your past car payment as you can, as soon as possible, and watch your brokerage account balance grow. The version of yourself that exists in 30 years will be forever grateful.

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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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Being late with a bill can have serious consequences beyond just a one-time fee. Read on to learn more. 

Sometimes, people are late paying their credit cards because they lose track of time. In other cases, they’re late paying their credit card bills because their checking accounts have been depleted.

You might assume that being late with a credit card bill is really not such a problem. You’ll just deal with the late fee your credit card issuer charges you and call it a day, right?

Actually, wrong. Being late with a credit card bill could have major consequences beyond the late fee you’ll be charged. And it’s really important to understand that.

It’s not just a matter of losing a little money

You’ll generally be charged $25 for your first late payment fee and $35 for subsequent ones, according to the Consumer Financial Protection Bureau. Now, if you’re down to your last couple of dollars in your bank account, that sort of hit is problematic. But if money isn’t particularly tight, you might write off a late fee of that nature as no big deal.

The problem, though, is that there are consequences you might face beyond the loss of $25 to $35. In fact, a single late payment on a credit card bill could cause extensive damage to your credit score. But shockingly, many consumers don’t seem to be aware of that.

In a recent survey commissioned by the Consumer Bankers Association, 48% of Americans were unaware of the repercussions of paying a credit card bill late. In fact, almost half of consumers thought, “I pay a late fee and nothing else happens until my next payment is due” was the only consequence associated with being 30 days late or more on a bill.

In reality, being late with a bill could cause your credit score to plunge, making it harder to qualify to borrow money when you need to. Not only that, but the lower your credit score, the higher an interest rate you’re likely to get stuck with when you are approved to borrow money. And a higher interest rate could cost you well more than $25 or $35 in the context of a large loan.

There are several different factors that go into calculating your credit score, but of all of them, your payment history carries the most weight. In fact, it accounts for 35% of your total FICO® Score.

Your payment history speaks to how timely you are with bills. And so if you’re late with a credit card payment even once, it could result in a lot of damage.

Also, the higher your credit score is to begin with, the more damage a single late payment has the potential to cause, namely because it’s so out of character. So don’t assume that if you have a credit score of 800, which is considered excellent, that you don’t have to worry about a single late payment. You could end up with a much lower score for making one mistake.

Avoiding late payments

One of the easiest ways to avoid being late with your credit cards bills is to mark your calendar with your various cards’ due dates. However, in many cases, lateness stems from a lack of funds more so than forgetfulness.

To address that issue, try checking your credit card balances every week rather than waiting until your bills actually come due. If you see those balances rising too quickly, force yourself to curb your spending until your next paycheck arrives, or until your billing cycle rolls over.

Also know that as long as you make at least your minimum credit card payment by its due date, you’ll be considered timely. So if you have to ask a friend or family member to loan you $40 or $50 to cover your minimum payment, it may be worth doing that if you’ve fallen on particularly hard times one month to avoid the hit your credit score might otherwise take.

Of course, this isn’t something you should do consistently, and it may not even be an option at all. The point, however, is that a single late payment on a credit card has the potential to do a lot of harm. So it’s best to avoid that scenario whenever possible.

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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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