Money Management

Deposits at small banks have decreased, but they could be stabilizing. Check out the benefits of smaller banks to see why they’re worth using. 

After Silicon Valley Bank collapsed, deposits at small banks plummeted. The biggest drop was for the week ending March 15, when small bank deposits were down by a record $119 billion. Even more recently, they’ve still been declining.

In May, CNBC reported that small bank deposits were down $2.6 billion. On the bright side, that was only a decline of 0.05%, indicating that deposits at small banks could be stabilizing.

Although some people worry about the safety of their money due to recent banking failures, small banks can be just as safe as big banks. They also often have some key advantages over the banking giants. If you’re learning about banking and looking for the right place for your money, here’s why you shouldn’t count out small banks.

Many small banks have FDIC insurance

It’s a common misconception that big banks are safer than small banks. Most U.S. banks, big and small, have FDIC insurance. This insurance covers up to $250,000 ($500,000 for joint accounts) per eligible account in the event of a bank failure. If the bank fails, the FDIC (Federal Deposit Insurance Corporation) will reimburse you.

You can check if a bank is FDIC-insured on its website or by calling customer service. Another option is to call the FDIC and ask.

Just so you know, credit unions are insured through the NCUA (National Credit Union Administration). It’s the same type of insurance and coverage limit, covering up to $250,000 if your credit union fails. So, if you’re wondering whether your money is safe with a credit union, the answer is yes. Check that it has NCUA insurance to be sure.

Small banks usually have fewer fees

One of the drawbacks of the big banks is their fees. Many of them charge a variety of fees, such as account maintenance fees, out-of-network ATM fees, and overdraft fees.

To be fair, there are ways to avoid these. Banks with account maintenance fees will typically waive them if you meet certain requirements, such as maintaining a minimum balance or receiving direct deposits. Out-of-network ATM fees and overdraft fees are also avoidable.

But you don’t need to worry about fees at all if you use a bank that doesn’t have them. Small banks usually don’t charge nearly as many fees as big banks. There are plenty of smaller online banks with no maintenance fees and that reimburse you for out-of-network ATM fees, up to a monthly limit.

Small banks often have higher interest rates

Annual percentage yields (APY) vary quite a bit from bank to bank. While you might think that big banks pay more, they actually tend to have the lowest interest rates.

The average savings account APY nationwide is 0.40%. Many big banks offer far less, with some having savings accounts with rates as low as 0.01%. On the other hand, many of the high-yield savings accounts available with smaller online banks are offering 4% or more.

To put that into perspective, let’s say you have $10,000 in savings. If you keep it with one of those big banks offering 0.01%, you’ll earn $1 in interest in a year. If you keep it with a high-yield account offering 4%, you’ll earn $400 in interest. Considering high-yield accounts are every bit as safe, there’s really no good reason to give up so much interest.

Small banks aren’t riskier or worse than their larger counterparts. They may not have the massive client bases and branch networks, and some don’t have any branches at all. But they’re a secure place for your money, and because they have fewer fees and higher interest rates, they’re often the better choice.

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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.Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Dollar Tree offers great products for kids. Here are a few of our favorite items to buy that keep my kids entertained. 

If you have kids you’re hoping to keep entertained this summer, you may be worried about just how much you’re going to have to charge on your credit cards to engage their attention and stave off boredom.

The good news is, you don’t have to drain your checking account to find ways to occupy your offspring. In fact, there are many great items at Dollar Tree that keep my kids busy for hours and that may entertain your children as well.

Here are a few of them.

1. Block building kits

The Dollar Tree offers Make It Blocks, which are shockingly similar to the name-brand Lego products. You can buy 8-packs in assorted colors, or you can opt for kits that allow you to construct specific things like dinosaurs or construction equipment. You can even buy little block people to live in your colorful constructed world.

My son adores putting these kits together and can spend endless hours finding things to build with his collection. Once the trucks, dinosaurs, or other structures are put together, he also gets a big kick out of playing with them as well. The kits are well worth $1.25 for the endless entertainment they provide.

2. Squirt guns

Dollar Tree has a great selection of water squirters, including double and single-barrelled squirt guns. These can be filled by sticking them in a pail of water and pulling them back, which makes them a whole lot easier for toddlers to use than the more expensive squirt guns that require unscrewing a water chamber to fill.

These squirt guns have provided more entertainment than you can imagine, especially since they are so cheap at $1.25 each. My kids obviously love filling them up and squirting each other, but they also get a kick out of “cleaning” the car tires and other things around the house with them. For a fun twist last year, we even filled them up with some colored water and made squirt gun paintings on canvas.

If you want your kids to be busy for a long time on a hot day, pick up a few of these and fill a bucket of water and you’ll be good to go.

3. Activity books

Dollar Tree has a great selection of activity books, including some learning books geared to kids of varying ages. Some of the activity and coloring books feature well-known characters that kids adore. Other offerings include sticker books or workbooks designed to teach important concepts like reading and math.

Many of these activity books are just as fun and educational as the more expensive ones from local bookstores. And they can provide endless entertainment as my kids look through them and work on the pages.

Each of these items is priced very affordably, and you get a lot of bang for your buck when you buy them at Dollar Tree. If you want to keep your kids occupied this summer, consider checking these items out or just making a trek down the toy aisle at your local dollar store to find other things that catch your interest. You’ll be surprised by how much you discover.

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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.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Christy Bieber has no position in any of the stocks mentioned. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

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Fewer than half of non-retired Americans think they’ll have enough money for retirement. Learn how to get on track if you’re in this predicament. 

Americans’ retirement hopes have plummeted in recent years. Among non-retired Americans, only 43% think that they will have enough money to live comfortably in retirement, according to a Gallup poll. That’s the lowest percentage since 2012, and it has dropped by 10% in just the last two years.

Unfortunately, the numbers are even worse for many demographics. Gallup also found that:

Women are far less likely to expect to retire comfortably. 36% of non-retired women think they’ll have enough money to retire comfortably, compared to 50% of non-retired men.Lower- and middle-income Americans aren’t on track for retirement. 19% of lower-income and 36% of middle-income Americans expect to retire comfortably. Among upper-income Americans, 65% expect to retire comfortably.

Considering inflation and limited wage growth, it’s understandable why so many people have trouble saving for retirement. If you’re not comfortable with your current level of retirement savings, there are several great ways to catch up.

Maximize incentives and tax savings

The first thing to do is make sure you’re getting all the “easy money” you can. Here are a few of the most common examples:

401(k) contributions: You can make up to $22,500 in tax-deductible contributions to a 401(k) plan in 2023. If you’re 50 or older, you can contribute up to $30,000. This allows you to save for retirement and lower your income taxes.A 401(k) match: Many companies will match you up to a set amount on your 401(k) contributions. If you have a 401(k) company match available, make sure you contribute enough to max it out. Check with HR if you’re not sure how much you need to contribute to get the full match.IRA contributions: Individual retirement accounts (IRAs) are another way to reduce income taxes while saving for retirement. The IRA contribution limit is $6,500 in 2023 and $7,500 if you’re 50 or older.

In addition to traditional 401(k) and IRAs, there are also Roth plans available. You aren’t able to deduct contributions to these from your taxes, but they offer tax-free withdrawals in retirement. Recent data shows that 88% of employer 401(k) plans offer a Roth 401(k) option. And online stock brokers that offer IRAs also typically offer Roth IRAs.

Look for a new job or career path

Income plays a huge role in how well you can save for retirement. That’s why there are so many more high-income Americans who think they’ll have enough money for retirement, while a much smaller percentage of lower- and middle-income Americans feel the same.

Be aggressive about increasing your salary. Ideally, look for ways to earn more every year. The more you earn, the easier it will be to build your retirement nest egg.

If you’re happy where you work, you may want to look for promotion and raise opportunities there. But switching jobs or even career paths tend to lead to higher pay increases.

The median worker who changed jobs experienced a real pay increase of 9.7%, according to a Pew analysis from April 2021 to March 2022. Real pay refers to wages after accounting for inflation. The median worker who remained in the same job saw their real pay drop by 1.7%. That’s a difference of 11.4% more for changing jobs compared to staying in the same job.

Don’t overspend on your largest expenses

One of the reasons some people don’t like to budget is they think they need to micromanage every expense. That’s usually not necessary. It’s not a big deal if you want to have, say, both Netflix and Max (formerly HBO Max). That’s an extra $16 per month, so it’s not going to make or break you.

A better way to budget is to focus on keeping your largest expenses under control, and reducing them when possible. For most people, there are three major household expenses:

Housing (your rent or mortgage)Transportation (most importantly, your car payment)Food (groceries and dining at restaurants)

People get into trouble when they rent or buy a home they can barely afford. Or get a loan for an expensive car. Or go out to eat all the time.

If you’re spending too much in any of these areas, you’ll need to cut back elsewhere — like your retirement. If you keep your housing, transportation, and food spending to reasonable amounts, you’ll have more money to save for the future.

It can be scary to think that you won’t be able to live comfortably in retirement. However, this is also something that’s largely in your control. If you make the most of retirement plan options, maximize your earning potential, and keep your big expenses in check, you could start putting a lot more money into your retirement 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.Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix. The Motley Fool has a disclosure policy.

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Sure, YouTube Premium is sans ads. But keep reading to learn about a few other benefits you may not know about. 

If financial or other circumstances forced me to choose a subscription video service to keep (out of the four I currently pay for), I wouldn’t have to think very hard to decide on one. I don’t actually lose sleep over this question, but if I needed to tighten up my budget, it would be far easier to kiss Hulu, Netflix, and Prime Video goodbye than YouTube Premium, because it is far and away worth every penny for me.

If you’ve never subscribed to YouTube Premium before (or never really considered it), here’s how much of a hit you’ll take to your checking account. It costs $11.99 per month for an individual membership (or $119.99 for a whole year at once, which will save you some cash). Or you can opt for a family plan for $22.99 and bring along five family members, for a total of six users on one account. If you’re a current student, you can get a student membership for $6.99 per month.

Of course, YouTube Premium’s biggest claim to fame is that it lets users watch videos without the interruption of ads. But here’s a few additional perks of YouTube Premium that you may be unaware of.

1. Instant podcasts

For me, this is easily one of the best features of YouTube Premium. When using the app on your phone or tablet, you can play it in the background while you use other apps, or even while your phone is locked. This has the effect of turning YouTube videos into instant podcasts, and you can listen while you go about your business. I’m a champion multitasker, and I love listening to videos while I’m cooking, doing chores, or otherwise occupied.

2. Ad-free streaming music

I was a very late adopter of streaming music (and in fact, still own a perfectly functional 2010 model iPod that plugs into my elderly car’s center console — no Bluetooth connections to be found in my vehicle!). I never saw the point of going out of my way to sign up for a service like Spotify, but YouTube Premium also includes ad-free YouTube Music, and I absolutely love it.

In fact, I’m listening to it as I write this, and playlists on YouTube Music form the most frequent soundtrack to my work day. You get your choice of community playlists or you can make your own. And YouTube Music will also get to know your listening preferences and generate custom playlists just for you. I’ve discovered and rediscovered multiple artists this way — I’m now a diehard Joni Mitchell fan thanks to YouTube Music.

3. Video downloads

Ever wanted to take your YouTube videos with you when you’ll be away from wifi and a cell signal? YouTube Premium allows subscribers to easily download videos for future viewing (within 30 days). This perk could really come in handy if you’ve got a long flight coming up (or even a vacation where you’ll be off the grid). This could keep you from whipping out a credit card to pay for inflight wifi.

4. YouTube Kids

I don’t use this perk personally, because I don’t have kids, but if you do, it’s definitely a reason to check out YouTube Premium (maybe take advantage of a month’s free trial and see if it works for your life). I have parent friends who rave about YouTube Kids, noting that the parental controls are easy to use, and you can customize content for your child, including blocking certain channels.

Once you try YouTube without ads, you may never want to go back — especially if you’re a frequent user. Give YouTube Premium a try to enjoy the lack of ads, and also these other less discussed perks.

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

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