Money Management

Self-employed people need to pay estimated quarterly taxes. Read on to see what happens when you get your numbers wrong. 

One of the trickiest things about being self-employed is that your income may not be predictable. When you earn a salary, you can expect the same amount of money to hit your

bank account every two weeks, once a month, or at whatever interval you’re paid at. But when you’re self-employed, you might earn $1,700 one month, $3,800 the next month, and $2,300 the month after that. That could make budgeting very difficult.

Another tough thing about being self-employed is that you’re responsible for paying your own taxes every quarter. You won’t have those taxes deducted from your paychecks automatically the same way salaried workers do.

For the 2023 tax year, estimated tax payments are due on:

April 18 (the same date as this year’s tax-filing deadline)June 15Sept. 15Jan. 15, 2024

It’s important to pay your estimated taxes on time, because if you’re late, you might face penalties. But you could also be looking at a penalty for underpaying your estimated taxes. And if you overpay those taxes, the IRS won’t charge you, but you’ll effectively be penalizing yourself.

You want to get that number just right — or as close as possible

There’s a reason the IRS refers to the quarterly tax payments self-employed workers make as “estimated” payments. Until you see your entire income picture for the year, it’s difficult to know exactly how much tax to pay the IRS.

Incidentally, this isn’t just an issue for people who are self-employed. Salaried workers often end up either getting a refund or owing the IRS money when they file their tax returns because there are a lot of factors that go into calculating a total tax bill for the year. These include things like income earned outside of wages (such as capital gains in a brokerage account) and deductions.

Meanwhile, you might face a penalty for underpaying your estimated taxes during the year. The amount of that penalty will depend on how much of an underpayment you’re looking at. You can also, in some cases, get an underpayment penalty wiped out or reduced if your income varies a lot throughout the year. But it’s generally best to avoid a penalty in the first place by paying enough.

On the flip side, if you make too high an estimated quarterly tax payment, the IRS won’t penalize you for sending extra money. But you’ll be hurting yourself by sending that money off to the IRS rather than hanging onto it to pay your bills.

It pays to get professional help

Calculating your estimated tax payments is tough work. Not only do you need to account for your income, but you also need to factor in things like investment gains, business expenses, and more.

That’s why your best bet is really to hire an accountant to help you come up with those numbers. Doing so might reduce your chances of underpaying the IRS and getting slapped with a penalty in the process. It might also lower your chances of parting with more of your money than you really need to.

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My dad taught me a lot about money, but not all of his advice was useful. Here’s the advice I followed — and the advice I didn’t. 

Like many people, I learned some money habits from my parents. I learned by watching what my parents did and deciding what behaviors I’d adopt and avoid. And, of course, I also got some actual financial advice as well.

Some of the financial advice my dad provided to me was great — but some other tips were a bit more questionable. Here is the best and worst financial advice my dad ever offered me, along with some insight into why some, but not all, of his advice is worth following.

Best advice: Marry someone whose money values match yours

The best financial advice my dad ever gave me was to marry someone with whom you are aligned on financial issues.

My parents agreed on a lot of things, but had some differences in terms of comfort with debt and saving versus spending for different purchases. Although they didn’t argue much, this was an occasional point of conflict. It also made it harder for them to work together to accomplish joint financial goals.

I have a lot of things I want to do in terms of how I manage my own money and I didn’t want to end up with a husband who made those things harder. So, I followed this advice. When I was dating anyone seriously, we always had conversations about how we would manage money together. And, my now-husband and I were on the same page from the start.

Since we’re aligned with our goals and values, we have never had any arguments about money and we’ve been married more than a decade. We agree completely on how to handle our joint checking account, investments, and debt, and it’s made building wealth — and making decisions together — a lot easier.

Worst advice: Don’t worry about borrowing as long as you can afford the monthly payment

The worst advice my dad ever gave me was that it was OK to borrow for purchases as long as I could afford the monthly payments.

He and my mom lived by this, putting stuff on credit cards sometimes, as well as financing purchases like furniture and cars. But this meant they ended up with regular monthly payments they had to make, which created financial stress and interfered with their ability to accomplish some of their financial goals.

Fortunately, I realized early on that this was bad advice — even though there’s quite a lot of pressure out there to focus on monthly payments from different lenders and retailers. Instead of only looking at the monthly costs when financing a purchase, I look at the total costs and decide if it’s worth spending that money. I also try to avoid borrowing for anything that doesn’t increase my net worth, as I’d rather just save up before making a purchase instead of getting stuck with monthly payments.

The good thing is, I have been able to evaluate all of the financial advice my parents gave me and make informed decisions about what tips to follow and avoid. Since many people end up adopting financial habits based on the way they grew up, it’s worth taking the time to really think about the money lessons your parents taught and deciding which ones make sense for you to follow.

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Costco is home to many weird and wonderful products. However, there’s a limit on what one writer is willing to spend money on. 

I will gladly try almost anything at Costco, at least once. You never know when you’re going to come across a product that’s absolutely perfect for you. However, there is no chance I will ever buy any of the following products at Costco.

1. 72-pound Cheese Wheel

I like cheese as much as the next person, but good gravy. Who needs a 72-pound wheel of parmigiano reggiano?

The bad news? It’s only available through Costco.com.

The good news? Shipping and handling are included in the $950 price. At over $13 a pound, it’s not like you’d be saving money.

2. 600 Bottle Classic LX Double Wine Cellar

I gotta be honest. If any of my wine-loving friends ever decide to spend $5,700 on a wine cooler for their home, I’m going to be the first one to stage an intervention. Unless a person owns a bar or restaurant, I cannot reconcile spending so much money on a single luxury item, designed to make drinking even more pleasurable.

Does it look cool with its “VinoView Shelving?” Absolutely. It’s gorgeous. It may, however, be a cry for help.

3. 28-pound Bucket of Mac N’ Cheese

I recently told a friend that I would be the first to die in an apocalypse. Mainly because I need snacks. I get that people like gearing up for the end of the world, but really, the idea of 240 servings of mac n’ cheese makes me sad.

The advertisement promises that this bucket full of carbs has a shelf life of up to 25 years, which immediately made me think it was made specifically for preppers. I stand corrected. Once I saw that there are 204 reviews online, I had to see what folks had to say.

My favorite review came from a lady who says she purchased the bucket for her grandson, who was “pleasantly surprised” the day it arrived. But here’s the impressive part: Not only did the reviewer purchase the 240-serving bucket once, but she says she’s purchased it again.

I can’t help but be impressed, although I don’t think I’m willing to shell out $120 for a massive bucket of mac n’ cheese anytime soon.

4. The Mother’s Casket

You know that nervous laughter that bubbles up when you’re supremely uncomfortable? That’s what I experienced the first time I saw The Mother’s Casket. My mind didn’t quite know what to focus on. Let’s face it: The name is both macabre and hysterical. Who thought that was a good idea?

And please, even though I won’t ever buy one, allow me to describe this model to you. The first, and possibly most important feature, is that it’s pink with what’s called “a purple coral finish.” There is (of course) a pink velvet interior with the word “Mother” embroidered on the head panel, and an adjustable eternal rest bed. For the life of me, I can’t figure out why Mom needs to be able to adjust the head and footrest, but there you have it.

Finally, there’s a matching pink pillow and throw. Overall, it’s delightful.

I get why people would be attracted to a jazz-hands casket that costs $1,150. Funerals are ridiculously expensive. It’s why so many people hold on to enough life insurance to cover their funeral costs.

Although I’d never buy one, I’d love to meet the family who would. They sound like fun.

5. Bote Zeppelin 10″ Inflatable Kayak

My husband and I once went on a whitewater rafting trip with about eight other couples, some of whom we barely knew. Between that trip and a kayaking experience we had in Puerto Rico a couple of months ago, I’ve learned one thing: Sharing a small water vessel with a partner tends to bring out the “real” you.

Two of the couples on that long-ago whitewater rafting trip spent hours bickering — loudly. One couple would fall out of their kayak and be underwater long enough to provide a few moments of blessed quiet, but then the other couple would start picking at each other. Honestly, I just thought they were broken.

Then, in Puerto Rico, kayaking in the ocean at night, I realized that I don’t always trust my husband. I’m pretty sure I let him know. The further we paddled into the dark water, the more “honest” I became about my feelings. In truth, I was fairly certain he was going to get us killed. (I also realized that I’m terrified of manatees, but that’s another story).

The idea of taking a $900 inflatable kayak out on any body of water is more than my heart can handle.

6. Closeout Sushi Tray

I often wonder about sushi here in the Midwest, especially the sushi sold at gas stations. Given the quality of other Costco food products, it’s hard to imagine that its sushi might be awful. But according to the folks on one super entertaining Reddit thread, Costco sushi is not always the greatest.

Here are some of my favorite comments from that thread:

According to Alternative-Skill167, “It’s like chewing soft plastic dipped in soy sauce.”TheEZG added this opinion, “Just be prepared for the clearance that will occur in your intestines.”

And finally, my favorite. It’s from a Redditor with a user name that cannot be printed here. The poster inadvertently compared eating Costco sushi to preparing for a colonoscopy. “Go ahead and get some toilet paper, nausea meds, and Gatorade too.”

So, it’s a no on the sushi.

In my life, Costco is like a weird cousin. Once in a while he comes out with something that makes you wonder if he’s okay, but most of the time, there’s not a thing about him you’d change.

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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 Costco Wholesale. The Motley Fool has a disclosure policy.

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I’ve committed to not borrowing to buy a car ever again. Read on to learn why paying cash for a vehicle has become a financial priority for me. 

At the beginning of 2023, the average monthly payment on a financed new car was $703. And, as Edmunds reports, the average monthly payment on a financed used car was $565.

That’s a lot of money to have to pay out of your checking account each month. Such a big payment makes it harder to live on what’s left, which means falling into credit card debt becomes more likely.

While having a car payment is very common, I do not currently have one and I’ve vowed never to have one again. Here’s why I won’t borrow for a car — and the steps I took to make sure I didn’t have to.

I don’t want to pay interest on a car that goes down in value

The biggest reason why I’m not interested in having a car payment is because I know cars quickly lose value as soon as you start driving them. A car I buy for $20,000 today will be worth $10,000 in a few years — if I’m lucky.

So I’m already buying something that’s not going to increase my net worth but that will instead leave me with an asset that’s worth much less than I paid for it. I don’t see the point of paying interest, which will only add to the cost of the vehicle. Why pay more for something that becomes worth even less every day you use it?

I don’t want to commit my future income to a purchase I’m making today

Another big reason why I don’t want to have a car payment is because I don’t know what the future holds. I don’t know if my income will change, or if I’ll decide to make other big purchases that will eat up my income, or if something else will happen that makes it difficult for me to make future car payments.

I don’t want to commit my future self to a responsibility that I may not easily be able fulfill — especially since doing so could limit the options I have later on. Since car loans can take years to pay back, I’m just not comfortable taking on this kind of commitment when I likely wouldn’t be able to easily get out of it by selling the car. It could easily end up being worth less than the amount due on the loan.

I’d rather pay for the vehicle upfront before I drive it off the lot, so I’m not stuck with monthly payments for several years that may become uncomfortable to pay.

My no-car-payments technique

While there are clearly good reasons why I decided not to borrow for a car again, the reality is that having a vehicle is a necessity for my life. That means I had to find a way to implement my plan to avoid auto loans.

To make this happen, here’s what I did. I paid off the loan I had originally taken out on a vehicle. And then I continued to drive that car for another 10 years. After my loan had been paid off, I continued making the same monthly payment that I had been making. The difference was, I put this money into a savings account.

When my trusty vehicle finally became too expensive to repair, I had tons of cash in my savings account that was ready to be used to buy a new vehicle. I paid cash for that car, then resumed my “car payments” to rebuild my savings account so I’ll be ready for the next time.

The reality is, avoiding a car payment does make sense in many situations when it’s possible to do so. Consider following my lead and continuing to drive your paid-off vehicle for as long as you can while saving for a new one.

You’ll likely be very happy when you can pay cash for your next car — and have extra money in the bank, since you won’t be spending it on interest for an auto loan!

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You can earn a few hundred dollars every time you open a new bank account with these promotions. This is how they work. 

When all is said and done, banks are businesses. That makes us their customers.

Like any other businesses, banks use a variety of methods to draw in new customers. One of my particular favorites is the new account bonus. And no, we’re not talking about the small appliances common in the days of yore.

New account bonuses are wonderful lump sums of money — usually hundreds of dollars’ worth of money. And it just appears in your account. Well, sort of. Some other stuff happens first. Here’s how it works.

Earning the new account bonus

Alright, so long before the welcome bonus hits your bank account, you’ll need to earn it. The requirements for earning a new account bonus vary based on the specific promotion. Some common requirements include:

Depositing a certain amount of new money into the accountReceive a certain number and/or amount of direct depositsMaking a certain number of debit card transactionsMaintain a certain minimum account balance

Additionally, every bonus will have a specific time requirement in which you need to perform these tasks. Three months is typical for things like debit card transactions and deposits. But if you need to maintain a certain balance, the requirements could be up to six months.

Waiting for its arrival

Once you’ve met the requirements, your part is done. You don’t need to do anything else; the bonus will show up in your account automatically. For you, it’s now a waiting game.

How long your bonus takes to arrive will vary. Sometimes, it shows up a few days after you’ve met the requirements. More often, it takes a few weeks. And, occasionally, it may take a month or two.

Most promotions will have fine print that says you could wait eight or 12 weeks. If you don’t see the welcome bonus hit your account after that, it’s time to reach out to the bank and ask it to check on your status.

Post-bonus considerations

After the welcome bonus clears your account, it’s yours to do with what you wish. You can use it to pay off credit cards. You could buy a nice dinner. You could move it to a high-yield savings account. It’s your cash at this point.

Most banks prohibit you from earning more than one new account bonus per account type per year (or two or four, depending on the bank). So, you could earn a bonus on a checking account, then earn one on a savings account. But you can’t open the same checking account twice in a row and earn the same bonus.

That said, you can go to a different bank and open an account there to earn its new account bonuses. But be careful. There is such a thing as too many new bank accounts.

You see, banks talk to each other. Specifically, they use something called ChexSystems to monitor all sorts of things, including how many new bank accounts you’ve opened recently. If a bank feels like you’re trying to game the system, they could potentially blacklist you from opening new accounts with them.

Oh, and don’t forget about the potential tax considerations. Many credit card sign-up bonuses are treated like rebates, so you don’t (usually) need to count them as income on your taxes. Bank account bonuses, on the other hand, tend to come with 1099-INT forms — that is, they’ll be reported as income. So, you’ll need to pay income taxes on them.

A welcome bonus

Sure, opening a new bank account can be a bit of a pain. But that new account bonus can make any bother well worth it. Who wouldn’t welcome an extra $200 or $300 right now?

Just be sure to read all the fine print before you open the account. Get to know the requirements, and the timeframe in which you need to meet them. And pace yourself. With a little planning, you could be the happy recipient of a new account bonus in just a few weeks.

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The SBA’s 7(a) Loan Program is designed to help business owners secure the funds they need to grow their businesses. Here’s how it can help you. 

You don’t have to go alone if you’re running a small business. The Small Business Administration’s Standard 7(a) Loan Program is designed to help businesses like yours get over bumps in the road. While the SBA offers five other versions of the 7(a) Loan Program, here we’ll focus on how the standard guaranteed loan works, how to know if you’re eligible, and the steps you’ll need to take to land a Standard 7(a) loan.

How does the Standard 7(a) Loan Program work?

Here’s how SBA’s Standard program works:

The SBA partners with a wide range of financial institutions, normally banks.Working through the loan guarantee program, the business owner works with one of their partner financial institutions.The business owner receives access to better loan terms than those offered by other financial institutions.The SBA offers a partial guarantee of the loan, meaning the SBA will repay at least a portion of the loan if the small business owner cannot make payments.The SBA may guarantee up to 85% of small business loans up to $150,000 and 75% for loans above $150,000.

Who’s eligible for a Standard 7(a) loan?

Eligibility for guaranteed loan assistance includes:

You must show that you have already attempted and failed to borrow funds from other lenders, fully exhausting other options.Your business must operate for profit.Your business must be independently owned and operated.Your business must qualify as a small business as defined by the SBA.You must be able to demonstrate that your business needs an infusion of cash.Your business must be located in the U.S. and either be engaged in or plan to do business in the U.S. or its territories.You cannot be delinquent on existing debt to the U.S. government.You must use the funds for a well-thought-out, sound business purpose.You must be creditworthy, and the SBA must be reasonably sure you can repay the loan.

What can a 7(a) loan be used for?

The SBA guarantees loans for a wide range of business activities, including:

Refinancing current business debt.As revolving funds based on the value of existing inventory and receivables.To purchase real estate, including land and buildings.For short- and long-term working capital.To construct a new building or renovate an existing building.To purchase supplies, furniture, and fixtures.To buy and install machinery and equipment.

Maximum loan amount

The maximum loan amount available through the Standard 7(a) Loan Program is $5 million. Not every business will qualify, though. Factors that go into the loan decision include the type of business you operate, where your company does business, and the business’s credit history.

Documents to gather before applying

The loan process varies by lender, but generally, here are some of the documents you can expect to supply:

SBA Form 1919Loan application historyPersonal financial statements (depending on the lender)Business financial statements, including current profit and loss statements and projected financial statements.Income tax returnsOwnership and affiliationsBusiness license or certificateBusiness overviewResume for each principalBusiness lease, if applicable

If you’re buying a business, be prepared to provide the following

Bill of sale or purchase agreement, including terms of saleAsking price, including a schedule of inventory furniture and fixtures, and machinery and equipmentBalance sheet and profit and loss statement of business you’re buyingIncome tax returns for the previous three years

As a small business owner, you’re responsible for everything, from bidding jobs to covering payroll. No one has to tell you how challenging it can be. However, that’s where the SBA comes in. If the Standard 7(a) Loan Program isn’t right for you, the SBA will help you find a program that will work. And if you don’t need a loan, the SBA offers great mentorship programs.

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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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