Money Management

The less you earn, the harder it is to save for retirement. Read on to see how to pull it off on a lower salary. 

It’s important to save for retirement because Social Security won’t come close to replacing your paycheck in full. And you’ll likely need income beyond those monthly benefits to cover your various expenses.

But what if your salary is limited to $30,000 a year? Clearly, in that situation, you’re apt to have a much harder time funding an IRA or 401(k) than someone earning, say, $100,000 a year.

That doesn’t mean that it can’t be done. And if you follow these tips, you might manage to build a nice nest egg, even if your income is lower.

1. Snag your 401(k) match

Dave Ramsey says that you should aim to save 15% of your income for retirement. And of course if you can save more, even better.

If you earn $30,000 a year, saving 15% of your income means allocating $4,500 a year to retirement savings. But you may not have to put in all of that money yourself.

Many companies that sponsor 401(k) plans also match worker contributions to some degree. It may be that your employer is willing to match up to $2,000 a year in contributions. In that case, if you put in $2,500 of your own money, you’ll get $2,000 from your employer to meet your $4,500 goal.

2. Follow a strict budget

When you don’t earn a very high income, every dollar counts. And it’s important to make sure you know where every dollar is going.

To that end, following a budget should help. List your monthly expenses and add retirement savings as a line item. Allocate funds to those costs and then see how much money you have left over.

Your remaining funds can be used for non-essential expenses like streaming services and social outings. But if you prioritize your retirement savings, you might manage to keep up with your retirement plan contributions despite not earning a ton of money.

Smaller contributions can go a long way over time

You might assume that if you’re only contributing a small amount to your IRA or 401(k), then you’re not going to end up with very much retirement wealth. But actually, that’s far from true.

First of all, just because you’re earning $30,000 a year right now doesn’t mean that’s what your salary will look like forever. But let’s say that is the case, and you’re only able to save $4,500 a year (or $375 a month) for retirement over 40 years.

If you invest your savings at an average annual 10% return before inflation, which is consistent with the stock market’s average, as measured by the S&P 500, you’ll end up with a nest egg worth about $2 million. Yes, you read that correctly. And if you make savvy choices, you might manage to part with that money year after year.

Granted, you may need to do things like drive an inexpensive car (or even go without a car if that’s possible), rent a smaller home or buy one that doesn’t come with a large mortgage loan, and make other frugal lifestyle decisions to keep up with retirement plan contributions over time. But if you’re willing to do that, you may find that you wind up quite wealthy in retirement, despite not earning a whole lot of money for most of your career.

Our best stock brokers

We pored over the data and user reviews to find the select rare picks that landed a spot on our list of the best stock brokers. Some of these best-in-class picks pack in valuable perks, including $0 stock and ETF commissions. Get started and review our best stock brokers.

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.

 Read More 

According to a recent survey, more than a third of workers say they’re hoping to quit their current job. Find out why — and what they want to do next. 

Between May 3, 2023, and May 21, 2023, FlexJobs surveyed 2,600 working professionals. The goal was to capture a snapshot of how workers are feeling about their jobs in a world that has shifted the way they think about work. What these working professionals shared with them provided fascinating insight into the changing landscape of the American employment scene.

42% actively considering quitting

One of the most surprising statistics to come out of the FlexJobs survey was the number of people who are actively considering leaving their current place of employment — a whopping 42%! Here are the top reasons they give for wanting to walk out the door one last time:

Poor work-life balance: 29%Low or unfair pay: 28%Toxic company culture: 27%Feeling undervalued: 26%Limited advancement opportunities: 25%Too stressful: 25%Lack of remote work opportunities: 23%Bad boss: 22%Misaligned values: 21%Inflexible work hours: 21%

Many survey respondents also expressed a desire to change careers entirely. Given that 20% of the professionals surveyed say they’ve recently quit a job, that means 62% of employed working professionals surveyed either want to quit their job or have quit their job in recent days.

Career change

The desire to make a career change is about more than how much money is going into the bank each month. In total, 58% of those surveyed say they’re actively working toward a career change, with many looking for a job that will add meaning to their lives. Here are the reasons workers gave for investigating new careers:

Remote work options: 50%Higher pay: 48%Better work-life balance: 46%More meaningful or fulfilling job: 40%To expand their skill set: 30%Current lack of advancement opportunities: 28%Approaching retirement: 16%To pursue a passion: 16%Current career has never been a good fit: 13%Turning a side hustle into a full-time job: 12%

It’s unsurprising, with the rise of remote work during the COVID-19 pandemic, that half of those looking for a career change would prefer the option to work from home.

Fear of layoffs

Despite the low unemployment numbers, several sectors have implemented layoffs since late 2022. Perhaps it’s no surprise that 39% of workers say they are either a little worried or extremely worried about being laid off from their current job.

It’s unclear whether fewer people would want to change careers if they believed their work was valued and their jobs secure.

The role employers play

Since the onset of the COVID-19 pandemic, there’s been a lot of talk about how difficult it is for businesses to find new employees. The discussion often includes someone mumbling about how “no one wants to work anymore.” At some point, it may behoove employers to examine their role in the ongoing problem.

According to the Holmes-Rahe Stress Inventory — a scale that’s used to estimate a person’s vulnerability to major health breakdowns — losing a job ranks among the 10 most stressful events in life. While corporations may view layoffs as a strategic business decision, those decisions spell disaster for a huge number of people.

Layoffs can lead to financial hardship, particularly for those who had been living paycheck to paycheck and have been unable to build a sufficient emergency fund. Perhaps more importantly, layoffs can result in devastating effects on mental and emotional health.

When a company conducts layoffs because it knowingly overhired to meet a specific short-term goal, it’s not just balancing the books, it’s upending lives. When a business cuts highly-compensated employees shortly before the annual shareholder’s meeting, it’s not just enhancing the bottom line, it’s treating human beings like a commodity.

Ironically, layoffs almost always backfire. Joint research from Stockholm University and the University of Canterbury found that after a layoff, employees who remained on the job experienced a 41% decline in job satisfaction. Employees also experienced a 36% decline in commitment to the organization and a 20% decline in job performance. It’s at that point that remaining high performers begin looking for the door to leave.

Employers may believe they’re saving money, but as employee engagement declines, the European study showed that organizations sputter.

The bottom line is this: When an employee stops believing they work for a company that’s looking out for their best interest, they become disengaged and far more likely to seek employment elsewhere.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2024

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

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.

 Read More 

It’s possible to take advantage of some Sam’s Club perks, even if you’re not a member. Read on for six such benefits you might not know about. 

You may not be aware that some Sam’s Club privileges are also available to non-members. Whether you aren’t ready to commit yourself to a Sam’s Club membership at this time or a membership doesn’t quite fit in your current budget, take a look at six things you can take advantage of for free.

1. You can visit the Sam’s Club Café

In the mood for an all-beef hot dog, a pizza, or frozen yogurt? Have a hankering for a soft pretzel or yogurt cup? You don’t have to be a Sam’s Club member to purchase tasty treats from the food court. Whether you make a special trip to Sam’s Club for a bite to eat or have other business to take care of while you’re there, the food court is open to everyone — members and non-members alike.

How much fun is it to know that you can stop in for a quick meal without emptying your bank account?

2. Buy alcohol

The sale of alcohol is highly regulated, and most states do not allow membership stores to deny non-members the right to purchase alcohol. In fact, stores must offer non-members the same price members enjoy. So, if you’re ever at a backyard cookout and the host says they purchased the great wine you’re drinking at Sam’s Club, you know you can pop in to buy the same vino.

3. Shop online

There are five things you should know about the Sam’s Club guest pass:

It’s good for one day onlyThe pass allows guests to shop online onlyGuests are required to pay the price stated on the website, plus a 10% service feePurchases cannot be picked up at a store, but will be shipped to youTo take advantage of the guest pass, log into SamsClub.com, do your online shopping, and create a guest account during online checkout.

If you’re on the fence about purchasing a full Sam’s Club membership, a one-day pass will give you a better sense of what Sam’s Club has to offer and you can decide if membership appeals to you.

4. Buy prescription drugs

Sam’s Club is famous for the hundreds of $4 prescriptions it keeps in stock. You don’t have to be a member to take advantage of this great deal. Whether you’ve been taking the same medications for years and want to snag them at a discount or you need to get up to date on your immunizations, you can save money by using the Sam’s Club pharmacy.

5. Visit the optical center

Sam’s has an interesting policy when it comes to the optical department. You must be a club member to purchase optical products, including contact lenses and eyeglasses. However, non-members are welcome to make an appointment to visit a doctor of optometry. It’s a good way to save money on an eye appointment.

6. Buy on Instacart

Truly dislike in-person shopping? You can order the things you need through Instacart and have them delivered the same day, even without a membership! There is a catch, though. Sam’s Club sets the prices on the Instacart platform and you may end up paying more than you would pay for the same items in-store.

If the services mentioned above are the primary reason you would spring for a Sam’s Club membership, just keep in mind that non-members have the same access. That leaves you with a little more money each year to park in your savings account or to invest.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2024

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

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.

 Read More 

There’s normally a delay before tips show up on your credit card statement. Learn why this happens and what to watch out for. 

It seems like the list of places where tips are expected has gotten longer and longer. Considering 80% of Americans have at least one credit card, a lot of those tips are now getting paid by card.

Normally, when you make purchases with credit cards, you can see the charge right away. But if you keep a close eye on your credit card statement, you may have noticed that this isn’t the case with tips.

When you add a tip to a purchase, the full amount doesn’t show up on your statement immediately. It often takes one business day, and sometimes more, until the full, correct charge comes through. People sometimes wonder why, and there’s a simple explanation.

How tipping with a credit card works, behind the scenes

From the consumer’s end, adding a tip with a credit card is straightforward enough. You provide your credit card, you get a receipt with a tip field, and you fill in the rest.

For the business, each of these transactions is a two-step process. First, the merchant puts an authorization on your credit card for the amount of your bill. An authorization determines that there are enough funds in the account to cover a charge. This shows up as a pending charge on your credit card statement.

The next step is settling the transaction. Settlement is when the merchant finalizes the transaction with its payment processor. The amount of the settled transaction can be different from the amount that was authorized.

Let’s say that you go to a restaurant and spend $100 for dinner. You give the server your credit card. The restaurant will put a $100 authorization on your card to verify that you can cover the charge. Once the transaction is approved, the merchant will bring you the receipt.

If you tip $20, the restaurant will settle the transaction for $120. You’ll initially see a pending charge of $100, but that will later change to $120. This normally happens within one business day.

Not all tips take time to show up on your credit card statement

To clarify, tips generally only take time to appear on your credit card statement if you add them after the initial charge. That applies to the traditional method of tipping by card, where you write your tip on the merchant’s copy of the receipt.

Many businesses now offer payment terminals that let you add the tip amount as you pay. You’ve probably seen these at some businesses, where the machine asks during checkout if you want to add a tip. It normally provides a few tip recommendations, and some places seem to love setting these annoyingly high.

Since these add the tip amount as you’re making the transaction, the entire amount will usually show up on your credit card statement right away.

Don’t forget to double-check the final amount

Tips normally get charged correctly, but mistakes happen. And since there’s that delay before it shows up on your credit card bill, you won’t see if there was an error right away.

That’s why it’s important to keep track of how much you leave as a tip and double-check your statement once the charge is finalized. You can tell it’s settled when it’s listed among your previous transactions and not under pending transactions.

If you ever get overcharged, contact the merchant to let them know and ask for the charge to be adjusted. If the merchant won’t help you, and you’re sure the amount is incorrect, you can dispute the charge with your card issuer. Instead of disputing the full amount, you’ll dispute a partial amount. But to reiterate, issues like these are rare, and they can usually be resolved with the merchant.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2024

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

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.

 Read More 

College has gotten really expensive. Read on to see how much you might need to save. 

Sending a child to college is hardly an inexpensive prospect these days. And if it’s something you’re eager to pay for, you may need to start saving when your child is very young.

Americans want to save $55,342 on average for their child’s college expenses, according to the Education Data Initiative. But that may not come close to covering the cost of a degree, depending on the path your child opts to take.

How much does college cost these days?

There are a lot of different factors that go into the cost of college, such as the school your child chooses and the amount of money they’re awarded in scholarship form. But you should know that based on recent data from U.S. News & World Report, the average cost of college for the 2022-2023 academic year was as follows:

$39,723 for private colleges$22,953 for out-of-state public college$10,423 for in-state public college

Again, these are just averages. But if your goal is to save about $55,000 for college like the typical American, it may not be enough to cover tuition if your child opts to attend a private college or a public college outside their state of residence.

And remember, these numbers simply represent the cost of tuition and fees. They don’t account for the cost of living in a dorm, buying books, and the other peripheral expenses that come with getting a degree. And so you may want to raise your savings target if your goal is to have your child graduate from college without debt (or without too much of it).

How to save for college

You have options when it comes to saving for college, but no matter which one you choose, it’s important to invest your college fund so it grows into a larger sum over time. This means that sticking to a traditional savings account probably isn’t the best bet. Instead, you should open an account that allows you to invest your money, whether it’s a taxable brokerage account or a 529 plan. You may also want to consider saving for college in a Roth IRA.

As far as how much and when to save goes, well, that’s a matter of what you can swing. But know this: The stock market has delivered an average annual 10% return before inflation over the past 50 years, as per the performance of the S&P 500 index.

If you sock $200 a month away for college over an 18-year window and your investments deliver that same return, you’ll end up with close to $110,000 in savings. That’s about double what the typical American is aiming to save.

A college fund that large might make it possible to cover your child’s education costs in full. So if you’re willing to start saving when your child is first born, you have the potential to amass a lot of money for college without having to part with many thousands of dollars per year.

Of course, it’s not easy to allocate money to college savings, so do your best if money is tight. But know that if your goal is to cover your child’s costs in full, starting early and investing your savings to take advantage of growth is really key.

Our best stock brokers

We pored over the data and user reviews to find the select rare picks that landed a spot on our list of the best stock brokers. Some of these best-in-class picks pack in valuable perks, including $0 stock and ETF commissions. Get started and review our best stock brokers.

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.

 Read More 

If a flight is oversold, you may get bumped. If your arrival is delayed more than an hour, you could be owed money. Read on for more. 

Sometimes no matter how well you plan, your travels don’t go as expected. It’s not illegal for airlines to overbook flights, and because of this, sometimes there aren’t enough seats available for every ticketed passenger. To free up some seats, airlines may involuntarily bump passengers if no passengers volunteer to take a later flight. Find out what to expect if you get bumped from a flight while traveling.

You may be asked to volunteer yourself to be bumped

The Department of Transportation (DOT) has rules for how airlines must handle bumping passengers when a flight is oversold and there aren’t enough seats for everyone to fly. The DOT requires airlines to ask passengers to volunteer to be bumped in exchange for compensation before beginning to involuntary bump passengers.

If you’re at the airport and your airline has noted that there aren’t enough seats for every ticketed passenger, they’ll ask volunteers to take alternative flights instead. If the airline struggles to find volunteers, it may increase the compensation they’re willing to pay to entice travelers with the flexibility to take a later flight.

If you have flexibility, you can negotiate with the airline to ask for more compensation for the inconvenience. Asking for cash instead of airline credit is an excellent strategy because you can stash it in a savings account to use as you wish. Talk about a personal finance win!

You won’t be owed compensation if…

If there aren’t enough volunteers, the airline will start involuntarily bumping passengers before departure. How much airlines must pay bumped passengers depends on the length of time they’re delayed in getting to their destination. If you’re involuntarily bumped, and the airline can arrange alternate transportation that gets you to your destination within one hour of the originally scheduled arrival time, the airline isn’t required to provide compensation.

You’ll be owed 200% of your one-way fare (up to $775) if…

If your alternative travel arrangements will delay you more than one hour from your original scheduled arrival time, the airline is responsible for compensating you. That timeline varies depending on whether it’s a domestic or international flight. You’ll be owed 200% of your one-way far (up to $775) if:

Your arrival is delayed between one and two hours after your originally scheduled arrival time for a domestic flight.Your arrival is delayed between one and four hours after your originally scheduled arrival time for an international flight.

You’ll be owed 400% of your one-way fare (up to $1,550) if…

Airlines are responsible for paying bumped passengers more for longer delays. You’ll be owed 400% of your one-way fare (up to $1,550) if:

Your arrival is delayed more than two hours after your originally scheduled arrival time for a domestic flight.Your arrival is delayed more than four hours after your originally scheduled arrival time for an international flight.

Be aware of these exceptions

The compensation requirements mentioned above only apply to passengers with confirmed reservations. You must also meet the airline’s required deadline for check-in to qualify for compensation if you’re involuntarily bumped.

Often, airlines require passengers to be at the departure gate between 10 and 30 minutes before the scheduled departure for domestic flights. Airlines may require passengers to be at the departure gate three hours before the scheduled departure time for international flights.

Prepare for the unexpected when traveling

There is always the potential for travel delays, cancellations, and other disruptions. You can better prepare yourself for disruptions by using a travel rewards credit card to pay for your reservations. You can earn rewards on your spending and take advantage of benefits like trip interruption and trip delay insurance, and trip cancellation protection. Check out our list of the best travel credit cards to learn more about the benefits offered.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2024

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

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.

 Read More