Money Management

It’s harder to build financial foundations if you don’t have a bank account. Read on to learn how financial services are becoming more accessible for all. 

Pride Month is a time to celebrate the lesbian, gay, bisexual, and transgender community. It’s also a good moment to put the spotlight on some of the challenges LGBTQIA+ people face all year round. For example, according to one study, 23% of LGBTQIA+ adults do not have a checking or savings account. This can be costly and make it harder to build solid financial foundations.

The LGBTQI+ Economic and Financial (LEAF) survey polled over 2,500 adults in the U.S. Almost a quarter of the respondents were unbanked and 11% said they’d experienced discrimination when using financial services. That’s much higher than the average American. According to the FDIC, 4.5% of U.S. households are unbanked.

Costs of being unbanked

Bank accounts make it easier to manage your money. If you don’t have one, it can be harder — and often more costly — to get things done. For example, you might wind up using a check-cashing service to get your paycheck, or a money order to pay bills. You’ll spend money on those services that could be used for other things. Almost half the LEAF survey respondents say they are unable to pay their monthly bills in full.

A money order will set you back around $2 per transaction, depending on the amount and where you buy it. Cashing a check can set you back $3 to $10. There are other options, such as digital wallets or prepaid debit cards, but almost all of them will charge fees for transactions that would be free with a decent checking account.

It can also make it harder to borrow money if you need it. The FDIC points out that unbanked households disproportionately use alternative credit sources such as payday loans, pawn shops, or auto title loans. To put it another way, people who don’t have access to traditional banking services get pushed outside the system, often into the arms of predatory lenders.

How to open a bank account

There are lots of reasons people might not have a bank account. It might be that you don’t trust the banking system, or worry you don’t have enough money to meet minimum deposit requirements. If you’ve had financial setbacks that lead to unpaid overdraft fees or other banking issues, you could be denied a bank account.

The first step in opening a bank account is to find one that’s right for you. If you’re worried about fees or high minimum deposits, check out our list of free checking accounts. Look for an account with FDIC insurance and useful services, such as an ATM network or mobile app. Think about the types of services you might use and use that as a starting point to compare accounts.

If you’re worried about discrimination, a desire to avoid the system is understandable. Even more so if you’ve had bad experiences in the past. Look for an LGBTQIA+-friendly bank with solid anti-discrimination policies. Some banks make it easy to put your chosen name on your bank card, while others actively support LGBTQIA+ employees and causes.

If you’ve had trouble getting approved for a bank account previously, it could be that you have a low ChexSystems score. This is similar to a credit score and records things like bounced checks or unpaid balances on bank accounts. You can request a copy of your ChexSystems report to see what might be causing a problem. It’s worth looking into something called second-chance checking accounts, which can help to build a positive banking history.

Bottom line

The percentage of LGBTQIA+ respondents who don’t have a bank account is shocking and reflects a significant barrier to building financial stability. If you don’t have a bank account, there are more and more banks and credit unions with inclusive policies to choose from. Check out our guide on how to open a bank account to learn about what steps to take.

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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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One of the easiest ways to save money is to look for discounts on the products you need. Read on for six great sales through the Target website. 

If you’re not typically an online shopper, you may not realize that Target reserves some of its deepest discounts for items that can only be purchased online. So, sit back, have a cold drink, and decide whether any of these pretty spectacular deals are to your liking.

1. Outdoor string lights: $15

If you’re taking full advantage of cool summer evenings, the idea of hanging incandescent lights around your yard or patio may have already flitted across your mind. And if you’ve shopped for lights, you probably know how expensive they can be. Here, Target is offering 16 feet of lights for $15. If you need more, strings of light connect easily to another, allowing you to design the lighting pattern of your summer dreams — all without draining your bank account.

2. Kate the Chemist: The Awesome Book of Edible Experiments for Kids: $11.99

I’m not ashamed to say that I was so excited about this book that I ordered one for myself. The plan is to casually pull it out one day and impress the heck out of my science-loving young granddaughters. As the title suggests, it’s written by science professor Dr. Kate Biberdorf, and it’s loaded with 25 fun, kid-friendly recipes.

The goal is to help kids understand that all cooking is really chemistry. If you swap one ingredient for another you end up with something completely different. Each recipe includes full-color photographs, an ingredient list, and step-by-step instructions. Just for fun, there’s also a “messiness factor” rating included with each recipe. The children in your life will conduct science experiments and end up with things like chocolate-covered pretzels, ice cream, and rainbow pasta.

Now, if we can just teach them about investing and how to build generational wealth.

3. Grounded For Life family game: $14.99

There are few things worse than being stuck in the house with a wild and wonderful brood when it’s too rainy to play outside. This game can provide hours of entertainment for ages 8 to 108. A 2020 Top Holiday Toys Winner, Grounded for Life can make a summer day indoors far more fun than expected.

4. Beach towels: $4.20 to $7.80

Whether you’re looking for beach towels for the ocean, lake, swimming pool, or running through the sprinkler, Target has a great selection of them. For example, 58″ x 28″ kids’ towels are 100% cotton and come in smile-inspiring styles featuring cheetahs, flamingos, and truly adorable sharks. Best of all, they’re only $4.20.

The adult version may not include cute animals, but at 72″ x 36″, they’re large enough to make you happy. And at a price of $7.80, you may want to order more than one.

5. Barbecue essentials: $7 to $15

It’s a great time to get out there and throw something on the grill, and these four specials can help you create a complete meal without busting your budget:

7 Piece Tool Set: $15Non-Stick Grilling Bowl: $7Stainless Steel Grill Topper: $15Char-Broil Dual Flex Arm Grill Light: $12.99

6. School supplies: $0.50 to $8.79

Remember the excitement of back-to-school shopping? There’s something about the smell of a freshly sharpened pencil that makes you forget that you’re actually going to have to learn something. Here are six basic supplies currently selling at a discount and one non-essential, but fun, item:

50 Crayola Colored Pencils: $6.7910 Crayola Washable Markers: $2.49BIC Xtra Life Ballpoint Pens (10 Count): $1.292-Hole Pencil Sharpener: $0.50Elmer’s 4 oz. Washable School Glue: $0.55Cricket Kids’ Vertical Lunch Tote (with cute designs): $11.99Pearhead Back to School Letterboard Set: $8.79: Perfect for first and last day of school photos

A note regarding school supplies

The cost of school supplies can quickly add up. If concerned about purchasing supplies for your children this upcoming school year, here’s a quick rundown of potential resources known to offer assistance:

The Salvation Army: Many Salvation Army locations collect school supplies from community donations and business partners, then distribute them to eligible households that need help. Contact your local Salvation Army chapter for more information. (If your kids need clothes or shoes, The Salvation Army may also be a good source for those essentials).Catholic Charities: Many Catholic Charities locations distribute school supplies gathered through school supply drives. Like The Salvation Army, Catholic Charities may be a good source for free school clothes.The United Way: Many of the United Way offices across the U.S. also organize school supplies drives and distribute those supplies within their communities. Your local United Way office can let you know what’s available in your area.St. Vincent de Paul: In addition to school supplies, St. Vincent de Paul provides free school clothing vouchers that can be redeemed in their thrift store. If your local affiliate does not offer free school supplies in your area, make sure to take advantage of the clothing voucher if it’s needed.The Assistance League’s Operation School Bell: Operation School Bell is a nationwide program that helps students from low-income families get the school supplies and clothes they need for the new school year.Operation Homefront: If you’re a military family, you can get help with school supplies through the Back-to-School Brigade.Boys & Girls Clubs: If your child participates in your local Boys & Girls Clubs of America, you may be able to receive school supplies through the organization. Boys and Girls Clubs host an annual Back2School campaign each year, so check in with them to learn what’s available.

If you are doing well financially and can afford to donate extra school supplies to any of these organizations, it would be a pretty great way to end the summer and begin the school year.

If Target’s online specials teach us anything, it’s that shopping in pajama bottoms may be the best way to go.

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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 positions in Target. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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Just because your company is closing doesn’t mean your retirement savings are doomed. Read on to learn more. 

Many companies offer their employees the benefit of a 401(k) plan. And funding one of these accounts can be crucial if your goal is to live comfortably in retirement.

But at some point, your company might decide to close down, whether because the owners want to retire or because it’s no longer cost-effective to keep the business open. In that case, you’ll clearly be out of a job. But what about your 401(k)?

Your money isn’t lost

Once your company goes out of business, the money you have in your 401(k) will stay where it is until your employer’s retirement plan is terminated — which is likely to happen shortly after the official closing date of your company. But that doesn’t mean you have to worry about losing out on your 401(k) balance.

The money you contributed to your 401(k) plan is yours for retirement. So if your old 401(k) plan is being terminated following your company’s closure, you’ll have the option to find a new home for it.

In some cases, you may decide to roll that 401(k) into an IRA at the same institution. For example, let’s say your 401(k) is being held at JPMorgan Chase. You may decide to just open an IRA there that you manage yourself. Or, you can open an IRA at a different bank and roll the money into that account. The choice is yours.

Another option may be to roll your old 401(k) into a new one if you’ve managed to secure a new job and know that you have access to your upcoming employer’s 401(k). This may be feasible if your employer gave you advanced notice of its closure and you were able to line up a new job fairly quickly.

Don’t leave your 401(k) where it is

In some cases, your 401(k) plan might remain open for quite some time after your company closes down. While you can technically opt to leave your 401(k) alone as long as your plan continues to be open, it’s generally not a great idea to do so.

Leaving an old 401(k) where it is could mean running the risk of forgetting about your money. Capitalize reports that the number of forgotten 401(k) plans has increased by more than 20% since May of 2021. And all told, there are more than 29 million forgotten 401(k) accounts just sitting out there waiting to be claimed.

So once you find out that your company is closing, it pays to ask your benefits department when your 401(k) plan will be terminated. And if your company is already closed and you’re already out of a job, contact your 401(k) plan administrator to find out what options you have for your money.

You may not want to wait until you find a new job to move your money out of your old 401(k). In that case, you can always open an IRA and roll the money into that account.

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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.JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.

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Your credit score can have a huge impact on your mortgage payment, adding potentially hundreds of dollars. See how much extra low credit could cost you. 

When you want to buy a house, mortgage lenders take a look at your credit score. Your score is supposed to be an indicator of how reliable of a borrower you are, as it shows both what kinds of debt you’ve taken on and how responsible you have been with paying it back.

But, just how much does your credit score actually impact your rate and your monthly payments when you buy a home? Here’s what you need to know.

Your credit score can make a bigger impact than you might think

The reality is your credit score has a profound effect on how much your home ends up costing you.

For example, according to myFico, the national average mortgage rate for people with a FICO® Score of 760 to 850 is 6.455%. This is considered an excellent score. For those with a decent but not great score (between 660 and 679), on the other hand, the national average interest rate is 7.068%. And for individuals with a score of 620 to 639, the national average rate as of June 16, 2023 is 8.044%.

So, there’s a big difference in the rate you may be offered if you have good versus decent or poor credit. But, what does this do to your monthly payment exactly? Well, for each $100,000 you borrow, here’s the monthly payment you’d be looking at for a 30-year fixed-rate mortgage at the national average rate with different credit scores:

As you can see, your payment jumps up more than $100 a month if you go from fair or poor credit to great credit. That’s a whole lot of extra money you’re going to get stuck paying every single year for 30 years just because your credit score wasn’t as good at the time you borrowed.

How to improve your credit to get a better home loan rate

Since credit score does impact your mortgage costs in a major way, it’s worth trying to improve your credit score to qualify for the best home loan rates.

You can do that by practicing very responsible borrowing behavior in the months and years leading up to the time you get your home loan. For instance, you will want to make sure you always pay your credit cards and other debts on time every month. That’s because your payment history is the most important factor when your score is calculated.

It’s also important not to open too many new cards in the time leading up to applying for a mortgage, and to make sure you are not using more than 30% of the credit available to you. Keeping your credit balance low is important because your credit utilization ratio (credit used relative to credit available) is the second most important criteria considered in the credit scoring formula.

If you can work to pay down your debt and always make payments on time, this will go a long way towards helping you to get a great credit score and a low-priced mortgage. Since the monthly payments differ so much for great scores versus poor or fair credit, it’s worth trying to improve your score as much as you can before moving forward with getting a home loan.

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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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