Money Management

Thinking of getting a new credit card? Read on to see why now is an optimal time to move forward. 

Credit card welcome bonuses are a tool companies use to lure in customers. But they can be a useful thing when meeting the bonus requirement at hand isn’t difficult.

Commonly, with such a sign-up bonus, you’ll get a lump sum of reward points or cash back for meeting a certain spending threshold within a few months of opening a new credit card account. You might, for example, be eligible for $250 cash back for spending $3,000 within three months of opening your card. If you normally charge $1,000 a month on your credit card for basic expenses, or if you have large purchases coming up, meeting that requirement may be fairly easy.

Now, you can make the argument that it pays to chase an attractive credit card sign-up bonus at any time of the year. But it might especially work to your advantage to go after one right now.

Time your credit card application strategically

A recent Forbes survey found that 49% of Americans plan to travel more in 2023 than in 2022. And this is especially true among people aged 18 to 26.

If you get a credit card with a welcome bonus now, you can use it to pay for your summer travel, whether it’s airfare, lodging, food, or entertainment. And that might make it easier to meet whatever requirement there is to snag your free cash.

In fact, it’s generally a good idea to chase a sign-up bonus when you have larger expenses looming. November, for example, can be another good time to apply for a new credit card with a welcome bonus because that’s when people tend to start spending extra money on holiday purchases. If you’re a parent, August can also be a good time to get one of these cards because that’s when you may be loading up on back to school supplies.

Bonus cash could help offset your summer travel costs

If you apply for a new credit card with a sign-up bonus now, you may not get your bonus reward before your upcoming trips. But you might get that cash as some of the bills from your trips start rolling in, especially if you’re doing your travel at the tail end of the summer. So either way, now could be a really good time to chase a sign-up bonus.

That said, one mistake you should always try to avoid when chasing a welcome bonus is forcing yourself to spend extra money just to snag that added cash. If you’re looking at a $250 payday for spending $3,000 within three months of opening a card and you only manage to rack up $2,500 of expenses, making yourself spend $500 for no good reason won’t really mean coming out ahead $250 — it will mean losing $250 in the form of useless purchases.

That’s why you really need to time your sign-up bonuses carefully. But given that travel costs have increased, if you get a credit card with a sign-up bonus now and take several trips this summer, you might have no problem meeting your spending requirement.

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A writer explains why she pays her own property taxes instead of having her mortgage loan servicer do it for her. Read on to see why. 

When you buy a home, you don’t just sign up to pay a mortgage. You also have to cover additional costs related to your home, like insurance and property taxes.

Many homeowners pay extra money to their loan servicers every month on top of what their mortgage payments amount to. The extra money goes into an escrow account that those loan servicers can dip into to pay homeowners insurance and property tax expenses as they arise.

But I prefer to keep my mortgage payments separate from my property taxes. Here’s why.

It’s all about cash flow and control

For some people, making one payment every month is easier than having to pay a mortgage and also reserve funds for homeowners insurance and property taxes. That way, they don’t have to be bothered when their property tax bill comes due, which often happens on a quarterly basis, or when their homeowners insurance comes due (which, often, is once a year).

But I don’t like going the escrow route for a couple of reasons. First, I don’t like the idea of having to pay more than what I owe on my mortgage each month, even though I know the extra money will be used to cover expenses I’m on the hook for.

Mortgage loan servicers are allowed to demand more money in your escrow account beyond the exact sum they need to cover your homeowners insurance and property tax costs. And the way I see it, why should they get to hang onto my money until they need it when instead, I could hang onto my money and just pay those extra expenses when they come due?

Another reason I like keeping my mortgage payments and property taxes separate is that taxes are high where I live, and they tend to increase frequently. Paying them separately allows me to better keep tabs on my taxes. And, it motivates me to pay closer attention to my tax assessments each year. That’s important, because you can appeal property taxes if you feel your increase is unreasonable — something I’ve done before and actually won.

A move that’s not right for everyone

Because I’m someone who follows a tight budget and is very on top of my expenses, it makes sense for me to pay my property taxes with money in my checking or savings account rather than deal with sending my mortgage loan servicer extra money every month. But if you’re someone without a large financial cushion, or someone who doesn’t always tend to run such a tight ship when it comes to spending and budgeting, then you may want to go the escrow route.

Falling behind on property taxes could eventually put you at risk of losing your home. That’s clearly not something you want. By paying your mortgage loan servicer extra money each month, you’re basically guaranteeing that you’ll be current on your property taxes (and your homeowners insurance). So in many cases, it’s worth parting with some extra money each month to get that benefit.

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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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Financial guru Dave Ramsey faces a $150M lawsuit. Read on for a break down of what we know so far. 

Financial guru Dave Ramsey is in hot water. For years, Ramsey has promoted Timeshare Exit Team, a company that collected $200 million from people desperate to get out of timeshare agreements. Now, 17 of the radio host and podcaster’s listeners have filed a $150 million lawsuit against him. According to the lawsuit, Ramsey played a role in defrauding them of millions of dollars by promoting a company that did not get them out of their timeshare agreements.

Follow the money

One does not have to be a fan of Dave Ramsey to recognize his style. Ramsey’s show is a mix of folksiness and frustration as he outlines his financial principles. The topic can be as simple as finding cheap life insurance or as complex as dividing an estate. Regardless of the issue, Ramsey is always the show’s star, the one listeners tune in to hear.

Diehard fans have made Ramsey rich by purchasing his books and programs like Financial Peace University for $79.99.

Another source of income for Ramsey comes via a program called RamseyTrusted. Followers turn to RamseyTrusted to find a real estate agent, tax service, insurance agent, or financial advisor. However, these are not companies or individuals Ramsey’s company identifies as being the best in their fields. They are people who pay Ramsey to endorse their services. They’re called ELPs, or “endorsed local providers.”

It’s a money-making enterprise

According to Clever Real Estate, Ramsey’s ELP program acts as a lead generation service. A Ramsey fan visits the Ramsey Solutions blog site, clicks on a box indicating which type of service they’re looking for, and then is prompted to answer a series of questions. By the time the answers are provided, RamseyTrusted has gathered enough information to generate a lead.

In addition to paying an upfront fee to become part of the ELP program, professionals must also pay monthly fees and referral payments. Here’s how Clever Real Estate breaks down those fees, specifically for real estate agents:

To become an ELP, Ramsey requires agents to have four years of experience with “some solid closings.”

Agents must also answer a survey, citing their familiarity with Dave Ramsey, including how many of his books they’ve read, podcasts they’ve listened to, and which step of his program they’re on. There’s no word on how Ramsey verifies the information.

Money from Timeshare Exit Team

Ramsey was allegedly paid as much as $30 million between 2015 and 2021 to endorse the timeshare exit company. In turn, Timeshare Exit Team collected $200 million from people who counted on them to get out of their timeshare contracts. Reports like those in The Washington Post claim that many of the clients from whom the Timeshare Exit Team collected fees were Dave Ramsey listeners. According to the lawsuit, $70 million in fees came directly from Ramsey fans who had believed the company could help them with their timeshare dilemmas.

The company behind Timeshare Exit Plan — Reed Hein & Associates — went out of business after paying more than $2.6 million to settle with Washington State over allegedly deceptive business practices.

The lawsuit

The 17 individuals involved in the lawsuit are all from Washington State or California and they filed their suit on April 28, 2023, in the U.S. District Court for the Western District of Washington. In the suit, the group claims Ramsey engaged in negligent misrepresentation, unjust enrichment, and violation of consumer protection laws as he profited from a company that was costing his listeners dearly. Also named as defendants are Ramsey’s company, Ramsey Solutions, and marketing company Happy Hour Media Group.

According to Greg Albert, the plaintiffs’ lawyer, Timeshare Exit Team promised customers a 100% money-back guarantee but had no reserve account or trust in place to repay the money. The company’s website also discouraged customers from contacting lawyers for assistance, even as they were forced to withdraw more and more money from their savings or checking accounts.

The plaintiff’s argument is that Ramsey was paid $30 million by Timeshare Exit Team “to convince Ramsey’s loyal followers to buy into this scheme through the use of deceptive, incomplete, and false information that Defendants knew or should have known” were false.

The response

Other than downplaying Ramsey’s role in endorsing Timeshare Exit Team, Ramsey’s legal team does not currently appear to be responding to requests for comments.

In 2021, when allegations against Timeshare Exit Group were brought to Washington State Attorney General Bob Ferguson, Ramsey’s attorneys claimed that Ramsey had no unique or special knowledge of the issues in the dispute. They also said that while Ramsey endorsed Timeshare Exit Group on his radio program and social media, he is not responsible for the details of the relationship.

Also, in 2021, Ramsey defended his endorsement. He said he endorsed Timeshare Exit Group because resorts had “screwed” his listeners. Further, Ramsey claimed that he “did it with great pride.”

Clearly, Ramsey’s legal team has a few challenges ahead of them. In the meantime, his shows remain as popular as ever. If you’re considering buying a timeshare, it’s worth thinking twice — especially as it may be difficult to get out of ownership if you change your mind later.

Our picks for the best credit cards

Our experts vetted the most popular offers to land on the select picks that are worthy of a spot in your wallet. These best-in-class cards pack in rich perks, such as big sign-up bonuses, long 0% intro APR offers, and robust rewards. Get started today with our recommended credit cards.

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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SNAP benefits allow recipients to buy nutritious food, but that’s not all. Here are six other benefits of SNAP. 

The Supplemental Nutrition Assistance Program (SNAP) provides food benefits to low-income households so they can pay for nutritious food. What many don’t know, though, is that SNAP benefits help you pay for more than just groceries. For example, here are six other things SNAP benefits cover.

1. Restaurant meals

Typically, you can’t use your EBT card to pay for restaurant meals. However, the rules are different for some eligible SNAP recipients. Through the Restaurant Meals Program (RMP), eligible SNAP recipients in these states can use their EBT card to pay for meals:

ArizonaCaliforniaHawaiiIllinois (Cook and Franklin counties only)MarylandMassachusettsMichiganNevadaNew YorkRhode Island (Providence and Washington counties only)Virginia

While criteria for participation varies by state, here’s who can typically take part:

Those who are 60 or olderRecipients who have a disability and receive disability payments or disability retirement benefits from a government agencyHomeless adultsA spouse of a SNAP beneficiary who qualifies for the RMP

The first step for anyone who wants to participate is to get approval from the state of residence and sign an agreement with the Food and Nutrition Service.

Hundreds of restaurants participate in the program. You can tell which take part by a sign displayed (usually on the front door or window) at the restaurant reading “Participating Restaurant: SNAP Restaurant Meals Program,” along with the fork and knife logo.

You can also locate restaurants by using the SNAP State Directory of Resources or calling your local SNAP office for a complete list.

2. Hunting and fishing gear

In Alaska, some residents may use their SNAP benefits to buy the hunting and fishing gear needed to procure their own food. Purchases may include lines, hooks, fishing rods, nets, knives, harpoons, and other required equipment. It does not cover transportation, gasoline, shelter, firearms, ammunition, explosives, or clothing.

This benefit is available to those living in areas so remote that recipients would have trouble easily visiting a store. The goal is to give them access to food while helping them leave a little money in the bank.

3. Grocery items purchased through Amazon

SNAP recipients can order groceries on Amazon and have them shipped to their door, paying with their EBT food benefits. It only makes sense to order through Amazon when a person has no way to get to a store or knows they’re saving money.

EBT can be used on items sold and shipped by Amazon, as opposed to those sold by third-party vendors. Look for the message “EBT eligible” under an item before ordering.

4. Gift baskets

SNAP benefits can be used to purchase gift baskets as long as edible items make up at least half the cost. For example, if a basket holds 10 items, five must be edible, and the value of those items must be equal to or greater than the value of any non-food items in the basket. Some baskets — such as those containing alcohol — may be disqualified. The simplest thing to do is stick with baskets containing only edible items.

5. Seeds and plants

For SNAP recipients who dream of a food garden of their own, it will come as welcome news that SNAP benefits can be used to purchase the seeds and plants they need to get the garden going. While tending a garden will take more effort upfront, over time, a person could end up with far more produce than they could purchase from a store for the same amount of money.

6. Specific live animals

SNAP recipients may not be able to buy a cow or goat with their benefits, but they can use them to purchase shellfish, other seafood, and animals that have been pre-slaughtered.

Ideally, the ability to use SNAP benefits to purchase items “beyond the usual” will help recipients stretch their SNAP dollars and keep more money in their checking accounts.

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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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Your income absolutely plays a role in how much house you can swing, but there are other factors to consider, too. Read on to learn more. 

If you make $100,000 a year, you’re earning roughly what the average American brings in. Recent research from The Ascent found that in 2021, the average U.S. income was $97,962. The median U.S. income in 2021, however, was $69,717, and that figure may be more representative of Americans on a whole.

If you earn $100,000 a year, you might have a lot more wiggle room when it comes to buying a home than someone with a lower salary. But it’s still important not to get in over your head. Here’s how to avoid that.

Follow the 30% rule

As a general rule, your monthly housing costs, including your mortgage payments, property taxes, and homeowners insurance, should not exceed 30% of your take-home pay. Sticking to that threshold might lower your chances of struggling with bills or housing expenses.

Your take-home pay for a $100,000 salary might vary depending on your tax-filing status and the deductions you take. If you’re contributing money out of your paychecks for expenses like health insurance and 401(k) contributions, your take-home pay may be different from someone earning $100,000 who isn’t doing those things. So it’s important to look at your specific monthly take-home pay, figure out what 30% of it entails, and try your best to stick to that limit.

If your $100,000 salary leaves you with $6,500 a month in take-home pay, that means you can generally afford to spend $1,950 a month on housing. Go beyond that, and you risk struggling to keep up.

Consider your other expenses

The 30% rule assumes that you have average expenses. But if some of your non-housing expenses are notably large, then you may want to consider limiting your monthly housing costs to 20% to 25% of your take-home pay.

Let’s say you have young children whose daycare and summer camp costs are exorbitant. Or, let’s say you have a medical condition that requires you to spend more than the average person on medication and care. It may also be that you had to sign an expensive car loan to purchase a vehicle because yours stopped running just when automobile prices and borrowing rates skyrocketed.

These personal factors need to be considered heavily. If you have a few specific expenses that are already straining your budget, you may want to be even more conservative when it comes to housing costs.

You should also consider how important it is to you to have extra money for things like leisure and vacations. The more you spend on a home, the less you’ll have left for the things you enjoy. So even if you can afford to spend, say, $1,950 a month on housing, you may want to stick to $1,800 so you have more wiggle room to spend on your hobbies.

All told, you don’t want to get in over your head in the course of buying a home. If you make an effort to limit yourself to 30% of your take-home pay and you factor in your other costs, you may be more likely to end up with a home that isn’t a struggle to keep up with.

Our picks for the best credit cards

Our experts vetted the most popular offers to land on the select picks that are worthy of a spot in your wallet. These best-in-class cards pack in rich perks, such as big sign-up bonuses, long 0% intro APR offers, and robust rewards. Get started today with our recommended credit cards.

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