Money Management

The majority of banks and credit unions offer online banking. Read on for six reasons why you should check it out. 

We’re nearly a quarter of the way through the 21st century, and yet some people still climb into their cars and drive to their local brick-and-mortar bank when they have financial business to take care of. Here are six advantages of using the online banking services offered by your financial institution.

1. Bank from anywhere in the world

Whether you travel on occasion or are always on the go, using your bank’s online system makes it possible to stay on top of your financial situation without ever visiting the bank’s physical location.

It’s been over a year since I last visited my credit union, and that was only to get something out of my safe deposit box. Since then, everything has been taken care of online from wherever I’ve happened to be.

As someone who has to fight the urge to worry, I find comfort in having my bank account at my fingertips.

2. Get an immediate snapshot of your financial situation

I can work on our household budget for hours to understand where we stand for the month. And while budgeting is the best way to ensure that I know which bills are coming up, one look at my online account provides a quick snapshot of several things at once. Within less than a minute, I know how much we have in our checking account, whether each savings account is on track, and how close we are to paying off our car.

If I need specifics, I can always take a deeper dive, but if I’m just curious about the state of affairs, online banking lays it all out in front of me.

Before we had online banking, I had to dig out our most recent statement or go through a stack of canceled checks to prove a payment had been made. Today, if a contractor tells me they did not receive a payment, it takes mere minutes to check the accuracy of that claim.

3. Pay bills automatically

A few weeks ago, I realized how few of our bills I’m responsible for paying. Every one of our regular bills, including mortgage, cars, and utilities, are set up to autopay. The only things I have to “remember” to pay for are groceries and gasoline.

My sole responsibility is having our paychecks automatically deposited into the account on payday. For peace of mind, I check at least once a month to ensure everything is paid. It always is. I don’t have to worry about late payments or fees because the payment process is automated.

4. Transfer funds in a snap

We have nine savings accounts, each with a distinct purpose. For example, one holds the funds I need to pay quarterly taxes, another is for medical expenses, and another is a vacation fund. I cannot imagine how much time I would spend trying to juggle those accounts if I didn’t have online banking to lean on. As paychecks come in, moving that money to different savings accounts takes minutes. And if I see that I’ve surpassed my savings goal in one account, I can transfer some of that money to an account that looks puny.

5. Access your account 24/7

Like most worrywarts, late evenings are the worst for me. It’s typically 11:30 or midnight when I wonder if I remembered to send a check for Girl Scout cookies or some other (essential) purchase. I cannot rest until I know for sure, making 24/7 access to the account helpful. I can log on, look for a specific payment, and log off. If nothing else, it prevents me from waking my husband to ask him if I paid for Thin Mints.

6. Download statements as needed

If you’ve ever kept a stack of monthly bank statements somewhere in your house, you know what a hassle it can be. Online banking makes it easy to gather and download the statements needed at tax time without sorting through paper statements.

By 2020, more than 805 million people were taking advantage of an online banking system. If you’re not one of them, you’re missing out on one of the best time-saving, anxiety-relieving free services available.

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There are consequences to spending your savings on home renovations. Read on to see why it could make sense to borrow even if you technically have the money. 

Improving your home could not just raise its value, but also make your life more pleasant and convenient. Let’s say your house has an unfinished basement. Turning it into usable living space could make it so your kids have a place to hang out — and your living room isn’t constantly filled with toys.

Now many people who wish to renovate their homes have to borrow money to do so, whether in the form of a personal loan or a home equity loan. But what if you have enough money in your savings account to cover the cost of your upcoming project?

You may be eager to avoid borrowing — especially at a time like this, when it’s gotten expensive to sign a loan in the wake of Federal Reserve interest rate hikes. But pulling the money from your savings to pay for home improvements outright could end up being a big mistake.

Don’t leave yourself short for emergencies

Let’s say you’re looking at a cost of $40,000 to finish your basement and you happen to have $45,000 in savings. You might assume that you’re better off taking the cash out of your personal account than having to sign a loan and pay interest on it — especially at a time when borrowing rates are high.

But let’s say you go this route and leave yourself with just $5,000 in savings. What happens if, a few months later, your air conditioning system breaks and you need $7,000 to replace it? Or, what if you end up losing your job and being unemployed for a period of time? At that point, your remaining $5,000 in savings might really fall short.

That’s why it’s not always such a great idea to pay for home improvement projects outright — even if you technically have the cash. You don’t then want to land in a situation where you don’t have an adequate emergency fund.

Of course, there are different definitions of what that is. Some financial experts will tell you to reserve enough cash to cover a year’s worth of bills. Others will tell you that six months’ worth is fine.

But at a minimum, you should really try to leave yourself with enough cash in savings to cover three full months of essential living costs. So going back to our example, let’s say you have $45,000 in savings and you pull $40,000 for your home renovation. If you normally spend $5,000 a month on essential bills, you’ll be left with cash to only cover one month of expenses in the event of job loss. That’s not so good.

Conserve your savings

If you have lots of money in savings and can afford to pay for home improvements while leaving yourself with a solid emergency fund, then by all means, don’t borrow. The Federal Reserve has raised interest rates 10 times since March of 2022, and that’s led to higher loan rates even for borrowers with good credit.

But if pulling money from your savings for home renovations means leaving yourself short on funds, don’t do it. If you go this route, you might avoid paying interest on a personal loan or home equity loan that’s only moderately expensive. But you might then end up having to charge unplanned expenses on a credit card whose interest rate is likely to be considerably higher. And that could mean entering a dangerous cycle of debt, rather than taking out a loan with manageable payments.

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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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Is credit card spending a big source of conflict in your relationship? Read on for ways to avoid those fights. 

It’s not exactly a secret that money tends to be a huge driver of conflict among romantic partners. In fact, married couples routinely get divorced due to financial disagreements.

It’s not all that surprising, then, to learn that 11% of couples argue over credit card spending, according to recent data from Debt.com. But that’s also not a good thing. And if it’s a pattern you’ve fallen into, here are a couple of ways to potentially avoid it.

1. Set a “must-ask” spending threshold for non-essential expenses

If you pay your utility bills with a credit card and your gas bill comes to $190 in a given month, that’s the sort of charge that probably won’t result in a major disagreement. After all, you need heat in your home, and if that’s what it costs, there’s not a lot you or your partner can do about it.

Rather, chances are, if you’re fighting with your partner over credit card spending, it relates to non-essential expenses you’re charging — things like meals out, gadgets, or non-work clothing. And chances are, it relates to purchases of this nature that only benefit one of you at a time. So to avoid conflict, one thing you may want to do is set a “must-ask” threshold for these types of expenses.

You may decide that if you’re going to be making a non-essential purchase above $20, that you and your partner need to consult the other before going through with it. That could mean having to make sure your partner is on board with you joining a friend for dinner at a restaurant. But if that helps you avoid an argument, it’ll be worth it.

2. Maintain a “fun account” for each of you

You and your partner might have a joint savings account you maintain for emergency expenses, like car and home repairs. If you’re tired of arguing about credit card spending, try this.

Have each of you allocate a preset amount of money to your own “fun” savings account each month from your paychecks. That amount can be $30, $50, $100, or more, depending on what you can afford. But it should be the same amount for both of you. The balance in your “fun account” then represents how much you can charge individually on non-essential purchases without an argument.

So let’s say you haven’t touched your “fun account” in months and have $300 sitting in there. That should give you free rein to use that $300 for an impromptu spa day, a gaming system, or anything you want.

Of course, once you deplete your “fun account,” you’ll need to build a balance back up before you can charge personal non-essentials again. But this way, you’re going about things fairly.

Don’t let the fighting persist

Fighting over money is no fun, and that extends to arguments about credit card usage. So if you’ve been butting heads over that, try to employ these fixes. They could not only help your relationship improve, but also, spare you the stress of winding up in credit card debt.

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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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Residents from one state are migrating in record numbers to Texas. Find out some of the reasons they’re moving. 

There’s a migration going on, with 300 Californians a day moving from the Golden State to the Lone Star State. In 2021 alone, 111,000 people loaded their wagons and saddled up for life in Texas. To learn more about why they’re moving, we turned to a study conducted by StorageCafe. Here’s what we learned.

1. Job opportunities

The tech and energy sectors support Texas’s rich array of job opportunities. StorageCafe research found that millennials (those born between 1981 and 1996) are leading the pack, accounting for 46% of those now calling Texas home. And largely, those millennials are heading for Austin, Houston, and Dallas — home to tech, finance, education, and healthcare.

Some Californians bring their jobs with them as they take advantage of the remote work trend to settle in a less-expensive area.

2. (Much) more housing for the dollar

On average, homes in Texas cost about $282,000 less than homes in California. Depending on where in California a person comes from, the savings may be even more dramatic. For example:

If someone were to move from Santa Clara County, California, to Dallas County, Texas, it would cost a whopping 258% less to buy a home.Moving from San Mateo County to Travis County would cost 243% less.Leaving Santa Clara County to buy a home in Williamson or Travis County would generate a potential savings of over $900,000.

Renters also get in on the savings. Most Californians moving to Texas can save over $1,000 a month in rent.

3. Room to stretch

The average single-family home in Texas is 17% bigger than the average single-family home in California. However, there are some counties in Texas where homes are much larger. One example is Collin County, Texas. If a person were to migrate from Los Angeles County to Collin County, they could easily buy a home 62% bigger than the house they left.

4. Opportunities to bank money

Newly-arrived Californians will find that they can save money in a multitude of ways, including the following:

State income tax in California ranges from 1% to 12.3%, but Texas has no state income tax.Texans pay roughly 20% less for their utilities than Californians.Even renting a storage unit is less expensive. For example, a standard unit in Los Angeles is $259 per month, while a storage unit in Austin rents for $120 per month.

The average millennial moving to Texas has an annual household income of $114,000. That’s 21% more than the average millennial nationwide. Extra money makes it possible for these new Texans to qualify for a larger mortgage. Buyer power and the sheer number of people moving from California to Texas help explain the extra strain on the housing market. Zillow data shows that over the past five years, the median value of homes in Texas has increased by 54%.

Time will tell how growing Texas cities handle the new influx of West Coasters. In the meantime, watching how shifting demographics alter the Texan landscape will be interesting.

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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.Dana George has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Zillow Group. The Motley Fool has a disclosure policy.

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