Money Management

The newly signed debt ceiling bill includes updates to work requirements for SNAP. Find out how thousands of childless adults in their 50s could be impacted. 

Congress recently reached a debt ceiling agreement, which President Biden signed into law. This deal increases the federal debt limit and establishes new discretionary spending limits. Unfortunately, some changes in the bill could harm some Supplemental Nutrition Assistance Program (SNAP) recipients. Due to these program updates, nearly 750,000 adults could risk losing their benefits. Here’s what you need to know about this news.

The debt deal changes work requirements for SNAP

If you’re a childless adult in your 50s and currently receive SNAP benefits, you’ll want to know about the updated work requirement outlined in the debt ceiling bill. New work requirements could put some recipients at risk of losing their SNAP benefits. Since older adults often struggle to find employment, this change could devastate many who struggle to afford food.

Work requirements limit the availability of SNAP benefits. Existing work requirements are in place for most childless adults between 18 and 49. Most adults without children can only receive SNAP benefits for three months during a three-year period unless they document that they’re working 20 hours per week, are in a job training program for 20 hours per week, or qualify for an exemption, such as a work-limiting disability.

The recently passed debt ceiling bill will require more adults to satisfy these work requirements.

Childless adults aged 50 to 54 will be subject to work requirements over time. According to the Center for Budget and Policy Priorities, these changes could impact nearly 750,000 adults. Nearly half of those who would be newly at risk of losing benefits are women.

Older adults won’t be impacted right away. The law will gradually be phased in by age. All of the changes included in the bill are effective through Oct. 1, 2030. If you’re in your 50s and rely on this food assistance program for support, you’ll want to consider how these changes could impact your checking account in the future if you’re unable to find work.

But the bill isn’t bad news for all SNAP recipients. Thanks to other changes outlined in the bill, some Americans will no longer be subject to work requirements — including adults experiencing homelessness, veterans, and adults aged 18 to 24 that had spent time in foster care.

Use alternative resources if you’re at risk of losing benefits

If you’re worried about how this law could impact your SNAP eligibility, you should know that help is available elsewhere. Don’t be afraid to use other resources in your community if you’re struggling.

Food banks are one option to explore. The nonprofit Feeding America has a tool on its website that you can use to find your closest food bank. Another option is to check with community centers, churches, and schools to see if they offer food assistance.

Some towns and cities have little free pantries available to provide food to those in need. Community members stock them with food essentials and you can visit these pantries to get free food. You can look for a little free pantry in your area at littlefreepantry.org.

Using resources like these can make putting food on the table easier. Don’t neglect free resources, as they can make it possible for you to stretch your money further as you work on other personal finance goals. Keep in mind that while you may be going through a challenging time right now, your current situation doesn’t have to be forever.

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Graduation season can flood you with stress. If you’re concerned about gift-giving costs, here’s how to keep your finances under control. 

I recently read an article that outlined the “ideal” graduation gift. According to this piece, financial planners say the gift should be equal to approximately one month’s rent or mortgage payment, somewhere around $1,000. The article said parents should give their children between $1,000 and $5,000 when they graduate from college.

If you’re wealthy and can afford to write out $1,000 checks to the important graduates in your life, this article may not be for you. The rest of us need a better plan. If you’re watching your bank account closely (and who’s not these days?), these three points may help you spend less while still celebrating the graduate.

1. Decide on a budget and stick to it

As someone who’s been down this road before, I want you to know you’re not alone. Springtime may usher in flowers but can also usher in stress for the parents of soon-to-be graduates. If you’ve been inundated with invitations to graduation parties and open houses, you may be overwhelmed with how you’re going to attend them all and how you’re going to cover the cost of graduation gifts.

No one expects you to refinance your mortgage to pay for gifts. It’s a ridiculous notion. The first thing you should do is decide on a total budget. This amount includes how much you plan on giving to each graduate. And if your child is in the graduating class, this total should also include how much you plan to spend on a graduation get-together.

Let’s say you take a look at your monthly budget and decide you can afford to spend $1,500 in total. That’s your graduation gift budget. Do not allow yourself to feel pressured into spending more. If other people want to put large charges on their credit cards to impress other people, let them. You’re only responsible for your household.

2. Make a list

It may sound cold, but you know some graduates better than others. For example, give your child’s best friend a slightly more significant gift than the kid who played soccer with them in 7th grade and hasn’t played a large role in their life since then. Your niece or nephew may score a more significant gift than the child of an acquaintance.

Create three tiers

AcquaintancesFriendsClose friends and family

Now it’s time to begin jotting down names. Without giving it too much thought, assign each name to one of these three tiers.

Once everyone is in a tier, decide how much of your budget you will dedicate to each. For example, if your budget is $1,500, you may break it down to something like this:

Acquaintances: $300Friends: $400Close friends and family: $800

You’ll spend a few minutes questioning your decisions if you’re anything like me. Naturally, you want to be generous with everyone, but that’s not the point. Unless it’s your child, you’re not responsible for making sure they have a deposit on their first apartment or can pay for their first semester of college. A graduation gift is meant to be a token — a tangible way to say congratulations.

Break each tier down by recipient

First, count the number of people in the “acquaintance” tier. For example, if it’s six, you’ll divide $300 by six and end up with gifts of $50 each. Do the same for the “friends” tier. When it comes to the “close friends and family” tier, it may not be so even-steven. Let’s say you have four graduates in this category. It’s okay to divvy the money up in a way that indicates your closeness.

Bottom line: Graduation gifts are an extra expense, and you owe it to yourself and your household to share in a way that won’t deplete your checking account.

3. A great gift doesn’t have to be cash

Would a graduate be thrilled to receive thousands of dollars in cash gifts? Of course, they would. Who wouldn’t? However, some of the greatest gifts most of us have ever received have felt more personal than a paper check.

When you give the gift of cash, the graduate knows precisely how much you spent. When you give an actual gift instead, they may have a rough idea, but you can secretly control the budget. Here are two ideas that may spark inspiration.

Memory album

I can’t tell you the number of times I’ve logged onto someone’s social media account to download personal photos (it’s not nearly as creepy as it sounds!). The trick is to look for images that represent the graduate well. It may be shots of them playing a sport, in a school play, participating in debate club, or hanging out with friends. You’re looking for pictures that will one day bring back memories.

Once I’ve downloaded the pictures I want to my desktop, I order prints from a nearby drugstore. Our local drugstore almost always offers 50% off on prints. You’ll probably spend no more than $15 on pictures.

Michael’s and Amazon each offer a fair number of attractive photo albums for around $15. Buying one of those and filling it with pictures of the graduate can cost you less than $30.

Espresso machine

Whether they’re graduating from high school or college, any coffee lover would appreciate a new espresso machine. And it’s easy to find them on sale. For example, Walmart is offering the Sboly Steam Espresso Machine with Milk Frother for just under $50. That’s half-price.

If you feel pressured to give more than you can afford, take a beat. Remember your financial goals and the budget you’ve set. There will be plenty of things you can spend that money on this summer.

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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.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Dana George has positions in Amazon.com and Walmart. The Motley Fool has positions in and recommends Amazon.com and Walmart. The Motley Fool has a disclosure policy.

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Some investors try day trading in hopes of making bigger profits. Learn what happens when you day trade to see why this isn’t a good idea. 

The most widely recommended way to invest your money is long-term investing. Buy quality stocks or index funds, hold on to them for at least five to 10 years, and there’s a good chance your wealth will grow. It’s recommended because it works, as the stock market has historically returned about 10% per year before inflation. But it’s definitely not the fastest or most exciting option.

Investors hoping to speed up the process sometimes turn to day trading, which is when you buy and sell stocks on the same day. Day trading is popular on social media, where supposed gurus boast about their methods for doing it successfully — the methods that they’re selling, of course.

It’s easy to get transfixed by the idea of day trading. Quit your job, make a bunch of money trading stocks — what’s not to like? Since all the top stock brokers offer commission-free trading now, it’s also as cheap as it has ever been to day trade. Before you consider trying this type of investing, it’s important to know what usually ends up happening.

You’re probably going to lose money

The vast majority of day traders lose money. There have been many studies on this, and they don’t paint a pretty picture.

A study of Brazilian day traders found that 97% of those who did it for more than 300 days lost money. Only 1.1% earned more than the Brazilian minimum wage. A study in Taiwan had similar results, concluding that “Less than 1% of the day trader population is able to predictably and reliably earn positive abnormal returns net of fees.”

The odds just aren’t in your favor when you day trade. Statistically speaking, you have maybe a 5% to 10% chance of making money, and that’s being generous.

If you’re successful, you increase your tax liability

In the unlikely event you make money by day trading, you’re going to owe more in income taxes. When you sell investments you’ve held for less than a year, you incur short-term capital gains taxes. Those are taxed as income.

One of the advantages of long-term investing is that you don’t pay taxes on your capital gains until you sell. If you hold your investments for at least a year, you pay long-term capital gains taxes. Tax rates on long-term capital gains are lower than they are for ordinary income.

You’ll spend a lot more time monitoring your brokerage account

The objective with day trading is to buy a stock when you can get it for a good price, and then sell it once you can get a profit. And you need to do that within a single day, at least under the technical definition of day trading. Some investors use the term to refer to any short-term investing.

Because you need to be aware of price movements as they happen, day trading requires a serious time commitment. You could end up monitoring stock prices from the market’s open to its close every trading day.

Despite what some people may envision, day trading doesn’t mean you have a flexible schedule. It’s more like being on-call all the time. It probably won’t be feasible if you have a job or any other daily responsibilities that keep you busy.

You could be considered a pattern day trader (if you have a margin account)

If you have a margin account, which lets you borrow money to invest, there are special regulations regarding day trading. If you make four or more day trades within five business days, and those trades constitute more than 6% of your activity over that time period, then you’re designated a pattern day trader.

As a pattern day trader, you must maintain equity of at least $25,000 in your margin account on any day that you day trade. You also can’t exceed your day-trading buying power. If you do, you’ll receive a margin call and need to deposit more money to your account.

Day trading is one of those things where the expectation doesn’t match the reality. It might sound exciting, especially if you enjoy investing. The reality tends to be a whole lot more difficult and stressful. And there aren’t good odds of earning enough to make the entire venture worthwhile.

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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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If you can’t pay your mortgage, you should talk with your lender or explore other options such as refinancing. Learn more about possible solutions here. 

Not being able to pay your mortgage is a really scary thing. No one ever imagines they will find themselves in this situation when they buy a house. But the reality is, this can happen to almost anyone as a result of a job loss, medical issue, or other life problem.

If you don’t have enough money in your checking account to pay your home loan each month, you should not panic right away. You do have options to explore. Here are four of them, along with the pros and cons about each one.

1. Talk to your mortgage lender about a payment plan

The single best thing to do if you can’t pay your mortgage is to reach out to your lender and ask what your options are. Many mortgage lenders are willing to work with you by allowing you to put your loan into forbearance for a period of time or to come up with some other arrangement to temporarily lower your bills.

Lenders do not want to take your house, so if they can help you avoid that happening, they often will — especially if you have a solid history of paying your loan on time and if your financial struggles are likely to be temporary ones.

2. Refinance your loan if you’re eligible

If you are able to do so, consider refinancing your home loan to reduce your monthly payments and to bring your costs in line with what you can afford.

Typically, refinancing can help you reduce your monthly payments if you can qualify for a lower interest rate than you currently have. But you may also be able to reduce monthly payments by getting a new loan with the same rate — or even with a slightly higher one — if you extend your payoff time.

Refinancing to a loan with a longer repayment timeline will cost you money over the long run, since you’ll pay more in interest due to the longer time duration you’re paying it. This is often true even if you do manage to lower your rate.

But if you truly cannot afford your current loan payments and refinancing would give you some breathing room, this can be an option worth considering. You will, however, need to have good credit and solid income to refinance, which may not be the case for you if you’ve been struggling to pay your bills for a while.

3. List your property for sale

Selling your house could help you escape your mortgage payment, but there are some big caveats. First, you’ll still need a place to live, so you’ll want to be sure you would be able to find a place that would be more affordable before you sell. Second, you’ll need to be able to generate at least enough from the sale to pay off your mortgage in full — and to pay any other fees associated with the sale, such as closing costs.

If you cannot sell for enough to pay all you owe, you may be able to arrange a short sale with your lender. This would mean the lender agrees to let you sell for less than the full balance and pay off what you can with the proceeds. This will damage your credit, though, and in some states, lenders could try to come after you for the difference between what you sold the house for and what you paid back (although you can try to get the lender to agree in writing not to do that as part of the short sale agreement).

4. Let the lender foreclose

Finally, your last option is to let the lender foreclose on your home. This would mean the lender takes your house and sells it to satisfy your debt. Your credit will be damaged by this and, by the time you pay costs and fees, chances are good you will lose any equity you may have had.

If the lender doesn’t get enough money from the foreclosure sale to pay off the loan balance, the lender could also try to collect unpaid funds from you if your state allows deficiency judgments.

Foreclosure should be a last resort, and you should explore all other options first before going through this process. You do have other potential solutions as mentioned on this list, so give them a try to see if you can avoid having the bank take your home.

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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.
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Thinking of getting an executive membership at Costco? Read on to learn a few crucial details about this membership level. 

Shopping at Costco is a great way to save money on everything from groceries to apparel to household products. And if you upgrade to an executive membership at Costco, you may find you’re able to save even more.

A Costco executive membership costs $120 a year, which is double the cost of a basic membership. In exchange, you get 2% cash back at Costco, which is a pretty sweet deal. In fact, your cash back could be enough to pay for your upgraded membership and then some.

But if you’re thinking about upgrading your membership at Costco, it’s important to know how the program works. Here are a few things you may not have known about a Costco executive membership.

1. You’re limited to a $1,000 reward each year

If you shop at Costco frequently enough, you might manage to rack up a lot of cash back from your executive membership. But you should know that once you’ve accumulated $1,000 via executive membership cash back, you’re done for the year.

That said, to even get to the point of being eligible for a $1,000 cash back reward from your executive membership, you’d need to spend $50,000 a year at Costco. That’s probably way more than you can imagine yourself spending, even if you have a year when you use Costco to do things like book travel and update your furniture.

2. Online purchases count

Although Costco carries an impressive selection of inventory in its warehouse club stores, you might find even more items to choose from online. The good news is that online purchases are generally eligible for 2% back if you have an executive membership, so don’t be concerned that those orders won’t count.

3. Car purchases aren’t eligible for cash back

In some cases, it could pay to purchase your next vehicle via Costco. But unfortunately, your car purchase will not be eligible for the cash back rewards that are part of an executive membership. (If they were, then hitting that $1,000 limit would probably be easier.) However, there are still many perks to buying a car through Costco, such as saving money on your purchase price, so it pays to see what models are available through this program.

Should you get a Costco executive membership?

A Costco executive membership certainly isn’t right for everyone. If you don’t do a lot of shopping at Costco, then it may not be worth it to pay the extra $60 a year. But either way, read up on how the upgraded membership works and the benefits it offers before making your decision.

Remember, too, that Costco wants you to be happy with your executive membership. If you do the upgrade and find that it isn’t worth it, you can always downgrade your membership to a basic one and ask for a refund. It’s not as though you’re stuck with the costlier membership once you decide to make that upgrade, so it’s really a pretty risk-free proposition if you want to give it a try.

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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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