Money Management

One writer is working to achieve multiple financial goals. Find out how she’s making extra mortgage payments while preparing for a future home purchase. 

I’ve been a homeowner for just over four years now. Since I have no debt other than my mortgage, I’ve been working hard to set aside extra money in my high-yield savings account and make additional payments toward my home loan balance.

There are benefits to paying off your mortgage sooner, if it’s feasible, like saving on interest costs. I’ll share with you how I prioritize paying down my mortgage loan faster while continuing to save for a future home down payment and other essential savings goals.

I do this to save money on mortgage interest costs

I pay my regular mortgage payment every month and then some. I can do this because I was firm about my home-buying budget when I shopped for my current home. While increasing your budget during the home search process may be tempting, that can be a costly decision. Since I have an easily affordable mortgage payment, I can pay extra on my loan.

If you plan to pay extra toward your mortgage, you should apply the additional payments toward the loan’s principal — which means you’ll make payments toward the loan balance, rather than the interest being charged on it. Doing this can save on interest fees and allow you to pay off your mortgage sooner. It can also help you increase your home equity, which can be helpful if you decide to sell your home in the future.

I’ve been making additional monthly payments on my home loan and occasionally make extra payments sporadically throughout the year. I figure any money saved is a win for my wallet, plus if I can get closer to a $0 balance sooner, that could enable me to enjoy greater financial freedom and flexibility — and who doesn’t want that?

I’m saving up for my next home

The home I’m in now is likely not my forever home. When it comes time to purchase a new house, having plenty of savings aside to cover a down payment would be beneficial. Making a sizable down payment means I’ll be able to take out a smaller loan, which will help reduce my monthly expenses. Plus, if I can afford to put at least 20% down, I can avoid private mortgage insurance (PMI) fees.

In addition to making extra payments on my current home loan, I’m putting more money in my savings account so that someday when I’m ready to buy a new property, I’ll be financially prepared. I set up automatic transfers so money is sent from my checking account to my savings account two times a month without me needing to do anything. By automating the savings process, I save time and I don’t forget to contribute money.

You can tackle multiple financial goals at the same time

While it may seem overwhelming initially, tackling multiple financial goals is possible. You can always start small with two or three goals. To determine what goals are important to you, carefully examine your finances and figure out what kind of life you’re working toward.

Not sure where to begin when establishing goals? Here are some questions to ask yourself:

Do you want to max out your yearly IRA account contributions so you feel comfortable in retirement?Are you looking to become a first-time homeowner in the next few years?Do you want to eliminate your credit card debt?Would it be beneficial to focus on increasing your credit score?Are you hoping to build an emergency fund to cover at least six months of living expenses?

As you begin to work on your goals, seeing your progress can motivate you. Seeing my home loan balance reduce significantly and watching my savings account balance grow is rewarding. You can reach your financial goals, too! Don’t wait to start — now is the perfect time to tackle them. For additional money tips, check out our personal finance resources.

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Failing to diversify your holdings could stunt your portfolio’s growth and cause you to lose money. Read on to learn more. 

You’ll often hear that it’s important to diversify your portfolio as an investor. But what does that really mean?

In a nutshell, there’s no single formula for diversification. What it generally means is you want exposure to different segments of the stock market.

Let’s say you have $5,000 in your brokerage account, only that entire sum is invested solely in tech stocks. That would be considered a very non-diverse portfolio. On the other hand, if you own $1,000 worth of tech stocks, $1,000 of energy stocks, $1,000 of retail stocks, $1,000 of auto stocks, and $1,000 of bank stocks, that’s a more diverse mix of investments.

If you don’t diversify your portfolio, you risk taking losses when the sectors you’re heavily invested in take a major hit. You might also stunt your portfolio’s growth over time, so it’s important to do a good job of branching out.

The problem with a lack of diversification

If you don’t diversify your holdings, you might end up looking at serious losses if a particular company or segment you’re invested in experiences turbulence. Just look at what happened to tech stocks in 2022. That particular industry got battered, and many investors who were heavily loaded on tech stocks saw the value of their portfolios plummet.

That’s why it’s so important to maintain a mix of investments. If you have a $5,000 portfolio that consists only of tech stocks and the segment takes a beating, your balance might fall to $2,500. But if tech is only one of several industries you’re invested in, your balance might only fall to $4,000 if the segment experiences its share of turbulence.

Also, different segments of the market offer their own opportunities to make money over time. So the more you invest in, the more profit you might end up with.

How to build a diversified portfolio

There are a few things you can do to build a diversified portfolio. First, you could simply buy stocks across a range of industries. There’s no specific number of stocks that guarantees diversity, but the Motley Fool recommends owning 25 stocks or more.

Another option is to load your portfolio with broad market ETFs, or exchange-traded funds. If you buy shares of an S&P 500 ETF, for example, you’ll effectively be investing your money in the 500 largest publicly traded companies.

You should also know that you can own individual stocks in conjunction with ETFs. And you can invest in sector-specific ETFs, too.

For example, let’s say you’ve done your research on tech stocks so you’re comfortable choosing specific ones for your portfolio, but you know less about energy stocks. You could simply buy shares of an energy ETF to save yourself the legwork.

All told, it’s really important to maintain a diversified portfolio. If you’re not sure whether yours is nicely balanced, have a close look and make changes if needed to ensure you’re not too heavily invested in the same company or market segment.

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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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Dollar Tree is rolling out items at $3, $4, and $5 in an attempt to widen its appeal. Find out how this price experiment could be good for your wallet. 

The days when dollar store items actually cost a dollar are long gone. It makes sense, given that many of the chains we see today were born more than 50 years ago when you could get a lot more bang for your buck. Indeed, Dollar Tree was one of the last big names in dollar stores to push its prices up when it did away with its $1 price point in 2021.

The trouble is that those non-dollar prices have left these brands with somewhat of an identity crisis. Which is one reason why Dollar Tree decided to roll back the prices of around 5% of its products to $1. However, it’s also planning to introduce new price points of $3, $4, and $5. The thinking is that it’s done the difficult part with what it labels “breaking the dollar.” Now it’s free to experiment.

Here are some of the ways the higher price tags could be good for your bank account balance.

1. You’ll be able to benefit from bulk savings

Dollar stores are on the other end of the spectrum from warehouse chains like Costco. Where one sells individual products at low, fixed prices, the other offers value by selling in bulk. If dollar stores relax their laser-sharp focus on individual price tags and instead center on value, consumers may get better deals.

For example, Dollar Tree’s new pricing strategy lets it sell a six-pack of Harmony paper towels for $5 online. Walmart has something similar for $7.12. Dollar Tree online also offers a case of six bottles of Xtra Tropical Passion Laundry Detergent (67.5 oz) at $3 each, $18 in total. Given that its smaller bottles of laundry detergent come in at $1.25 for an 8 ounce or 10 ounce bottle, this is a significant savings. The $3 bottle costs $0.04 per ounce — much better value than the $1.25 bottles, which cost $0.15 or $0.13 per ounce.

2. You’ll be able to buy a wider range of items

One of the challenges with dollar stores is that they tend to stock a much smaller range of products than big box retailers do. You might only find one brand of, say, orange juice on the shelves. And a number of products won’t be there at all. The new price strategy will let Dollar Tree sell items that you’d normally have to buy elsewhere.

According to its investor presentation, the new price points would allow Dollar Tree to sell family-sized frozen products rather than single servings. For example, instead of a single frozen cheeseburger, you might buy a family-sized pizza or a packet of 18 fish sticks. Dollar Tree is still experimenting with different prices, but higher price tags could pave the way to more variety as well as bulk savings.

3. You’ll be able to stock up your freezer

Frozen produce can be a great way to save money and still eat well. I’m not talking about filling your freezer with pizzas and chicken nuggets. But frozen fruit and vegetables often cost less than fresh produce. Plus, they don’t go bad as quickly as fresh produce, and are still packed with nutrients.

Part of the plan with the higher prices is to install more cooler units and sell more frozen products. Dollar Tree’s Chairman and Chief Executive Officer Rick Dreiling told investors on a recent earnings call that the company has “aggressively expanded our product assortment at Dollar Tree stores with $3, $4, and $5 frozen and refrigerated products.” In the future, 80% of the frozen aisle at Dollar Tree might be products in the higher price categories.

How to maximize dollar store savings

Dollar stores are certainly one way to save money, particularly if you know what to look for. Here are some ways to make the most out of your dollar store shopping.

Don’t assume dollar stores will always be cheaper: One of the big downsides of dollar store shopping is that the low prices don’t always represent the best value. Let’s say you see a bar of chocolate in a dollar store for $1.50, and the same brand in a big box store for $2. You buy the cheaper one thinking you’re saving $0.50. But if the dollar store bar is significantly smaller, it’s a fake bargain.Check the packaging carefully: Avoid dented cans (which can harbor nasty bacteria), and check frozen produce for holes in the packages that can cause freezer burn. Also, check the sell-by dates. Dollar stores often limit staff numbers to save money, which means staff have less time to remove out-of-date items from the shelves.Use a rewards credit card: Use a rewards credit card to earn points or cash back on everyday spending. It’s also worth looking into cash back apps and coupons. You might have to check the fine print, as there may be limits on the number of coupons you can use and the package sizes may not match.

There are lots of ways to reduce your grocery costs, including dollar store shopping. Just remember that lower price tags don’t always mean better value. It’s early days for Dollar Tree’s new prices, but so far the $5 products may help your budget just as much as the $1 ones.

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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 positions in and recommends Costco Wholesale and Walmart. The Motley Fool has a disclosure policy.

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Soon, you won’t have to pay an additional fee for a better seat location at AMC Theatres. Find out what ticket changes the popular theater chain is making. 

We previously wrote about a pilot program that AMC Theatres was rolling out at some locations in the U.S. The movie theater was testing its Sightline at AMC program, which would charge moviegoers a higher fee for more desirable movie theater seats. The program offered slightly cheaper tickets for those who booked less desirable seats, like front-row seats close to the screen. But AMC recently announced that it will end this pilot program in the coming weeks.

The brand will pivot away from Sightline at AMC

In a July 20 news release, AMC Theatres announced that it will complete its pilot program, Sightline at AMC, in the coming weeks. The company found that many customers happily paid an additional fee for better seats. However, there was little increase in theatergoers sitting in the front row, despite getting a slight price reduction for their movie tickets.

The company will not roll the pilot program out nationwide to remain competitive. In the coming weeks, AMC will no longer charge different prices for different seats. However, the company will use what it learned from the program to pivot to develop its next innovation. The movie theater plans to offer spacious reclining front-row seats for a more comfortable movie-watching experience. AMC will begin testing this seating concept in late 2023.

What does this news mean for you? If you live in an area where this pilot program is being tested, you will soon pay the same ticket price no matter what seat you sit in at your local AMC Theatres. Every extra fee adds up and impacts your checking account balance — so not having to pay more for a seat in a better part of the theater could be a win for your wallet.

Of course, the upcoming seating concept will likely change things. If AMC starts adding more comfortable, spacious seats to some of its theaters, you can expect to pay more to sit in these seats. There has been no mention of what these fees might look like.

Ways to save money on your next movie outing

If you’re a movie buff working hard to meet your personal finance goals, you can continue to see new movies at the theater without disregarding your budget. Here are five ways you can save money on tickets at your local AMC Theatres location:

See a matinee screening: AMC offers discounts of 30% on matinee showings. By seeing a movie before 4 p.m., you can easily keep more money in your pocket.Bring a student ID: Eligible students can save money at participating AMC Theatres locations when they bring a student ID.Get a deal on Discount Tuesdays: AMC offers discounted tickets on Discount Tuesdays. To qualify for this deal, you’ll need to join the AMC Stubs program. It’s free to become an Insider level member, and you’ll qualify for discounts on Tuesday screenings and can earn rewards every time you spend money at AMC.Seniors can save money daily: Moviegoers who are age 60 and over qualify for discounted senior tickets at participating locations. This deal is available daily, no matter the time of day.Bring a Military ID: As a thank you for their service, AMC offers discounted tickets to military members at participating locations. Bring your military ID to the box office to save money when you buy your next movie ticket.

Going to see a new movie doesn’t have to be expensive. Before you swipe your credit card, check to see if you can save a few bucks on your next movie date. Whether you like to see films at AMC Theatres or another movie theater in your area, discount opportunities like the ones mentioned above allow you to prioritize entertainment expenses without going broke.

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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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When you run your own small business, there’s a lot to consider when setting prices. Take a look at what to keep in mind before charging more. 

Inflation has been a major economic problem since the economy opened up after the COVID-19 lockdowns, with prices surging to record highs and wreaking havoc on people’s bank accounts. But there’s evidence that suggests inflation is cooling now, with the latest report from the Labor Department showing prices are only up about 3% year-over-year (which is close to the Federal Reserve’s target inflation rate of 2%).

As a small business owner, you’ve likely dealt with some challenging economic conditions in recent years. Making choices for your business under these conditions can be difficult — especially when you’re trying to make the decision about whether to raise prices.

Before you decide to increase the amount you’re charging for goods and services, here are four key questions to ask yourself.

1. Has your cost of goods and services gone up?

As a business owner, you obviously have to pay for goods and services that are necessary for your operations. Depending on the kind of company you’re running, this could mean paying for things like raw materials, accounting services, sales representatives, products you resell, and more.

If the cost of your goods and services has gone up, this will reduce the potential profits you can make. You’ll likely want to raise your prices accordingly so you don’t reduce the amount your business earns.

2. Are you happy with your profit margin?

If you are currently making enough profit on the products you sell, you may not want to raise your prices. If you are making enough that your company is thriving, why take the risk of a price increase that could cause you to lose customers and potentially see your total income decline?

RELATED: Best Business Checking Accounts

3. What are your competitors charging?

Your competitor’s prices play a role in what you can charge — especially if you have price-conscious consumers as your target clientele or if you offer a product or service that is similar to what others provide.

If you are the only company offering something or a top-notch in-demand expert in your field, you may be able to get away with charging a lot more than your competitors do — especially if there are high barriers to entry that can prevent others from joining your industry. But if that’s not the case for you, you don’t want to raise your prices if doing so would put you far above what your competition is charging.

4. What will the market bear?

Finally, you have to think about what your potential customers can actually afford. If you raise your prices too high, you may price people out, and they won’t buy your products or services even if they would otherwise want to and even if there are no competitors.

Your company goals may also play a role in whether you want to raise costs, as you may be focused on maximizing your potential profits and want to raise prices if you can get away with it. Or you may prefer to keep costs reasonable even if you think you could get away with charging more.

By considering these issues, you can make an informed choice about whether raising prices is a good idea or not. Ultimately, though, you need to weigh all the pros and cons, as a change in price could make a big impact on your customer base and on your company’s ultimate success or failure.

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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.Christy Bieber 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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