Money Management

Life for millennials and Gen Zers is tough. The cost of living is high, and wages are not keeping pace. Read on to learn how to break from the cycle. 

It’s no secret that many young adults are struggling to make ends meet, and that trend has continued to get worse. According to a survey by Deloitte, half of millennials and Generation Z are living paycheck to paycheck. With economic conditions uncertain, it’s no wonder that financial concerns are a top priority. But there is hope. Here are some strategies that can help these generations break the paycheck-to-paycheck cycle, build savings, and plan for a better financial future.

Second side jobs on the rise

As a new generation enters the workforce, there is a sense of optimism when it comes to personal finances. Gen Zers are leading the charge, with 44% believing that their finances will improve in the next year.

However, reality paints a different picture. As of 2023, over half of both Gen Zers and millennials reveal that they live paycheck to paycheck, indicating that immediate financial needs are taking priority over long-term goals.

For those who have been in their jobs for less than two years, living paycheck to paycheck may be a common reality. According to recent studies, individuals in this category are about 10% more likely to be in this situation compared to those who have been with their employer for more than five years.

This financial strain is causing them to take on extra work and worry about their ability to plan for the future. To help supplement their income, almost half of Gen Zers and over a third of millennials are taking on side jobs. Top side jobs include selling products or services online, gig work such as food delivery or ridesharing, pursuing artistic ambitions, and even social media influencing.

Achieving financial stability

With some practical guidance, young adults can break the paycheck-to-paycheck cycle and achieve financial stability.

Start by tracking your spending

Knowing where your money is going is the first step in taking control of your finances. Create a budget and track your expenses for a month or two.

Look for areas where you can cut back, such as eating out or subscription services you’re not using. Redirect that money toward savings or paying off debt.

Speaking of debt, tackle it head-on

High-interest credit card debt and other personal loans can be a huge drain on your finances. Make a plan to pay off your debt as soon as possible.

Focus on the highest interest rate debts first. Consider consolidating loans or refinancing to lower interest rates and monthly payments.

Consider a side hustle

If you’re struggling to make ends meet with your current income, it might be time to look for a second job. But don’t just settle for any job. Think about your skills and interests and find a side gig that aligns with them.

Freelance work, pet-sitting, and tutoring are all great options. And thanks to technology, there are more work-from-home opportunities than ever before.

Build an emergency fund

Unexpected expenses can derail even the best financial plans. Aim to save at least three to six months’ worth of living expenses in an emergency fund. Set up automatic transfers to a savings account so you don’t forget to save.

Invest in your future

It’s easy to focus solely on paying bills and making it to the next paycheck. But it’s important to plan for the future, too. Start by contributing to your employer’s retirement plan, such as a 401(k) or IRA.

If you don’t have access to a retirement plan at work, look into setting up a Roth IRA. These types of accounts offer tax-free growth and withdrawals in retirement.

Living paycheck to paycheck can be stressful and overwhelming, but it’s not a permanent situation. By creating a budget, paying off debt, earning extra income, saving for emergencies, and investing in your future, you can break the cycle and achieve financial stability. It takes time and effort, but the peace of mind and financial freedom that come with it are well worth it.

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Lost your Costco receipt? No problem. Read on to see what your options are for making returns. 

It’s happened to the best of us. You buy an item at the store you’re unsure about and pledge to hang onto the receipt until you’re certain it’s a keeper. But in the multi-day period between bringing home that item and heading back to the store to return it, your receipt has magically managed to vanish without a trace. It’s not in your wallet, handbag, desk drawer, or car. It’s just gone.

In many cases, not having a receipt will make returning an item more difficult. Some retailers might throw you a bone and, if you paid by credit card, use your card as a means of verifying your purchase. But in a lot of situations, without a receipt, your options for making a return are limited.

Not at Costco, though.

When your Costco receipt is nowhere to be found

When you check out at Costco, you can’t just take your receipt and toss it in the trash. You’re required to present your receipt at the door before leaving your local warehouse club store.

But from there, things can happen. You might stick your Costco receipt into your pants or jacket pocket only to have it fall out in the parking lot.

The good news is that you are able to return products to Costco without a receipt in most cases. In fact, Costco even says on its website, “Costco has a 100% satisfaction guarantee. Simply bring the product to any Costco warehouse and our Member Services Team will be happy to assist you. It helps if you have the receipt or original product packaging, but it may not be necessary to process your return.”

Here’s how the returns process generally works at Costco. When you arrive at your local store, you’ll go directly to the customer service counter with the item(s) you’re looking to take back. You’ll then present your Costco membership card so a customer service representative can look up the item and issue you a refund, whether it’s money back on your credit card or cash you can stick back in your checking account. Often, a receipt isn’t needed at all or even asked for.

Be mindful of Costco’s return policy

Costco generally has a very flexible return policy, but there are some rules you should know about. Electronics, for example, generally need to be returned within 90 days. Also, diamonds of a certain size need to go through a verification process before your refund can be processed. And unfortunately, you cannot return cigarettes or alcohol to Costco under any circumstances.

But otherwise, Costco will pretty much take back any item you don’t want or aren’t satisfied with — receipt or not. You can even return half-eaten food to Costco if you discover quality issues along the way (though you need to be reasonable when doing so, which means you can’t bring back a cake that’s 90% consumed and claim it didn’t taste good).

All told, Costco receipts have the potential to land in that magical abyss just like any other receipt you might bring home. Thankfully, that generally won’t stop you from getting your money back.

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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.Maurie Backman 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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When a car is totaled, it’s beyond repair. Read on to learn three things that happen after a car is declared totaled. 

In 2021, there were more than 6 million motor vehicle accidents in the U.S. that involved death, injury, or property damage reported to the police, according to the National Highway Traffic Safety Administration. In some of these accidents, drivers were left with a totaled car.

A car is totaled when it is damaged so badly that the cost of repairing it simply does not make sense. For example, if a car is worth $15,000 and it would cost $20,000 to fix it following a collision, pulling the money out of a checking account and paying to repair the car wouldn’t be the right course of action. Instead, the car would be declared totaled.

But, what does that mean for the car’s owner, and what happens when a car is totaled? Here’s what drivers need to know about how a totaled car affects their auto insurance.

Insurance may cut a check for the fair market value of the vehicle

If the accident was covered by insurance, the insurer who is responsible for picking up the tab will provide a payment for the vehicle.

This could be another driver’s insurer if someone else caused the accident that totaled the car. Or the car owner’s comprehensive or collision coverage could be the one paying for the vehicle if the owner caused the crash or something else totaled the car, like a tree falling on it.

Regardless of which insurer pays the money, the insurance company is going to provide a payment for the fair market value of the vehicle based on its condition at the time of the accident. If the car owner’s own insurance company is covering the costs, this payment will be equal to the fair market value minus the driver’s deductible (if any).

Any outstanding car loan balance must be repaid

If the driver of the totaled car still has a car loan on it, the loan balance must still be paid in full when the car is totaled. This can sometimes be a problem if the fair market value of the car is less than the amount owed on the auto loan. For example, if a driver owes $25,000 on a car that’s only worth $20,000, the insurer would only pay $20,000 and the other $5,000 still must be paid.

It’s pretty common for a car’s market value to be less than the amount owed on it since cars lose value quickly. Plus, many people take car loans with long payoff terms so they don’t make much progress on paying their balance down quickly.

Drivers who have an auto loan should have gap insurance for that reason. Gap insurance pays the difference between the amount owed and the amount the insurer pays. It has to be purchased before an accident happens though.

The insurer will dispose of the salvage vehicle

When a vehicle is totaled, it gets a salvage title.

The insurer will take ownership of the vehicle when it provides the total loss check and will deal with the vehicle in an appropriate way, sometimes by selling to a company that rehabilitates and sells salvage cars. If a driver wants to keep their totaled vehicle, their insurance payout would be reduced by the salvage value of the car.

It’s important to be prepared for each of these three realities when a car is totaled. Drivers should also know it can take a few weeks before everything is resolved and they get their check to go and buy a new vehicle to get around. Some car insurance policies provide money to rent a vehicle during this interim period, so drivers should be sure to check if theirs does — or should put an alternate plan in place in case a serious crash does occur.

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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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A writer who covers personal finances explains why she uses a financial advisor. Read on to learn more. 

Writing about financial matters for a living helps me keep my own finances in check. For example, sometimes I’ll write a story about the importance of checking your credit report, and it will remind me to pull up a copy of my own credit report and make sure everything looks okay.

I also tend to write a lot about investing — how it’s important to consistently fund an IRA or 401(k) and load up on higher-risk assets when you’re younger. And I tend to follow my own advice by maxing out retirement plan contributions and filling my brokerage account with stocks.

But even though I know a lot about personal finance matters and investing, I still enlist the help of a financial advisor for my long- and even short-term planning. Apparently, though, I’m in the minority.

A study by Northwestern Mutual released last year found that only 35% of Americans seek the help of a financial advisor. But here’s why having one is so important to me.

It’s all about getting that outside perspective

When you’re managing your own money and working toward your own goals, you can sometimes get stuck inside your own head. That’s just one reason I prefer to work with a financial advisor rather than tackle all personal financial matters on my own.

An outside professional can offer a different perspective on things. And on different occasions, my financial advisor has helped me realize that certain decisions I would’ve made on my own weren’t necessarily the most prudent.

Also, when you’re investing your own money, it’s easy to get emotional when things aren’t going your way. Years back, I bought some municipal bonds that were supposed to be a safe, lucrative investment but wound up being anything but.

I stubbornly insisted on holding onto those bonds for quite some time because I didn’t want to take a loss on what was supposed to be a “sure thing” type of investment. In the end, my financial advisor helped me realize that my stubbornness wasn’t helping me meet my financial goals — it was hindering them.

An option worth looking at

One common myth I hear all the time when it comes to financial advisors is that you don’t need one if you don’t have much money. But in reality, you do not need to be wealthy to benefit from a financial advisor. Many of these professionals work with clients who earn an average wage and have an average savings account balance. But if you’re in that boat and you sign up to get help, you might go from having an average net worth to a higher one.

All told, if I can justify hiring a financial advisor, then the typical consumer can probably benefit quite a bit from having one. So it pays to explore your options for getting help managing your money.

A good bet is to talk to different professionals before signing up to work with one. Solicit recommendations from friends, neighbors, and colleagues, and ask questions about fees (since financial advisors have to get paid some way) so you know what you’re dealing with. You may find that hiring a financial advisor is one of the smartest money-related decisions you’ll ever make.

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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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After a car accident, drivers involved should remain at the scene of a crash. Learn more about why, as well as some other things you can’t do after an accident. 

More than 6 million car crashes occurred in the United States in 2021, according to the National Highway Traffic Safety Administration. This included fatal accidents, accidents resulting in injuries, and accidents reported to the police that caused property damage.

If you are involved in a car accident, there are a few key things you must make sure you avoid doing. These mistakes could cause serious financial and personal harm, affecting your checking account balance and other aspects of your life.

1. Leave the scene of a crash

State laws generally require drivers to stop at the scene of an accident under most circumstances, including when someone may have been hurt or killed, as well as when property damage occurred.

Failure to stop at an accident scene can result in criminal charges for hit and run. These charges are very serious. Depending on the circumstances and the state laws, a hit-and-run crime could be a felony or a misdemeanor, and could lead to penalties including jail time, fines, a suspended license, and more.

Do not take a chance of facing charges. Always stop at the crash scene, exchange contact details, get contact information from witnesses, and report the collision to the police if required to do so based on the accident’s severity.

2. Admit fault right away

In car accident claims, there is a specific legal definition of fault. A person who is at fault for a collision was the direct, proximate cause of the accident. And if that person was negligent, or unreasonably careless based on what a hypothetical reasonable person would have done, the negligent driver’s insurer may be responsible for paying for damages for crash victims.

The legal definition of fault does not always match the layman’s definition of fault. But, if a driver does admit they were to blame for the accident, this could come back to bite them if their admission is viewed as evidence of liability.

Drivers should not just automatically take the blame for a collision with the police or their insurer due to the legal consequences this could have. When stopping at a crash scene, be helpful, render aid, and answer questions honestly — but avoid saying anything that could suggest an admission of fault during this chaotic time.

3. Fail to report the accident to your insurer

Not reporting an accident to an auto insurer is something else that drivers should be sure not to do after an accident.

Keeping quiet about a crash may seem tempting if the accident appears minor. If another driver was to blame and they offer to pay out of pocket, it may seem like it makes even more sense to just keep insurers out of things.

This is a really bad idea, though. There may be more severe injuries or more severe damage to the vehicle than anyone realizes at the crash scene. And the other driver who admitted guilt may not be able to pay for all losses in the end.

Insurance, including underinsured or uninsured motorist coverage, could be needed to pick up the tab — but might be unavailable if the accident wasn’t reported. The other driver could end up spinning a different version of events later too, and thus not providing the promised compensation and even pursuing a claim to try to recover their own damages.

Always report a crash to an insurer to ensure that the protections the policy offers are in place.

4. Downplay the severity of any injuries

Finally, it’s a bad idea to downplay the severity of injuries. Crash victims can often obtain compensation for losses when someone else is to blame, and that compensation is based on the extent of damage. Trying to be stoic or downplay losses so the at-fault driver doesn’t feel guilty could end up meaning too little compensation is available.

Doing any of these four things after a car accident is bad news, so drivers should make absolutely sure they don’t make these mistakes or it could come back to haunt them.

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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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Ever wanted to be your own boss? Read on to learn how your working life will change if you opt to become a freelancer. 

I started freelancing as a writer and editor last year, and ended up quitting my W-2 job altogether to pursue this life full time at the beginning of 2023. It’s largely been a positive experience, but there have definitely been some changes to my work life, personal life, and indeed, my finances, as a result. If you’re ready to become a freelancer, here’s what you can expect.

1. You’ll lose employer-subsidized benefits

One of the reasons many people work as employees for a company, rather than as a freelancer, contractor, or other non-employee is the benefits. As an employee, you’ll often get to take advantage of subsidized insurance coverage (health, life, dental, and sometimes even vision and pet insurance). You might also get access to a 401(k) retirement savings plan, and if you’re very lucky, your employer may match a percentage of your contribution to that account. You might even get tuition reimbursement, cash back for a gym membership, or other fun perks.

But if you become a freelancer, you’ll kiss all these benefits goodbye. If you have a spouse and children benefiting from your employer’s benefits, it could end up being quite expensive to pay for all of them on your own, so this is something to be aware of (and plan for) before turning in your letter of resignation. You might want to use your health insurance benefits one last time before you quit. And don’t forget to roll over your 401(k).

2. You won’t have paid time off

Let’s face it: You’re not going to miss pointless meetings when you quit your job. But you will likely miss getting paid vacation and sick time. Freelancers don’t get paid time off of any kind; if we’re not working, we’re not earning. That said, taking time off is still really important. Get in the mindset of maximizing your working hours so you can earn enough to take the time and not worry too much about missing paying work.

3. You’ll get more flexibility of all kinds

For me, this is where freelancing really shines. Everything about my working life is flexible now. My work is fully remote, so I can work from wherever I want — other countries included. And I make my own work schedule every day, fitting work into my life, rather than the other way around.

This flexibility could cause struggles for some, however. If you can’t work effectively without a manager looking over your shoulder to ensure your work gets done, you might not be productive enough as a freelancer. After all, ideally you’re not just earning enough to cover the expenses you’ve budgeted for, but also enough to stick in your retirement and savings accounts for future goals.

4. Your taxes will get more complicated

I was already a bit intimidated by filing my tax return even before I was a freelancer, so when I decided to make this move, I wondered how much more I’d have to worry about taxes. As it turns out, if you work with the right financial professionals, they’ll do a great job of setting your mind at ease. My financial planner has been a great source of wisdom (especially since he’s been working for himself a lot longer than I have), and I also hired an accountant to handle my taxes.

As a freelancer, you’ll owe quarterly estimated taxes in January, April, June, and September every year, so you’ll need to stay on top of those payments — or be penalized. Having an accountant or other tax professional handle your annual return for you will help ensure you get all the tax deductions coming to you, such as a home office deduction if you have a dedicated work space at home.

5. You might be happier

Ideally, you’re quitting your W-2 job because you think freelancing will improve your life. And part of that improvement should be increasing your happiness. It’s very tiresome to go through the motions at work, never feeling as if you’re appreciated enough or getting a chance to learn new skills. Becoming a freelancer can be the impetus for more and different professional development.

Plus, as you grow your skills and client list, you can become more and more selective about the projects you take on. One of my colleagues here at The Ascent says this is the best thing about being a freelancer.

And remember that flexibility I discussed earlier? That can lead to happiness too. Nothing improves my mood and sense of wellbeing like a sunny afternoon walk, and thanks to freelancing, I can get out for one every single day if I want (weather permitting, of course).

All things considered, quitting your job to freelance will change your life. It might complicate your tax and health insurance situation, but ideally, the happiness and opportunities you’ll gain will more than make up for that.

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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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