Money Management

Is financial stress dragging you down? Read on for a few ways to address it. 

Financial stress is something a lot of people experience — especially these days, given the toll inflation is taking on consumers. But a Motley Fool survey reveals that 2 out 3 LGBTQ+ Americans experience a high amount of financial stress. And keeping up with bills and being ready for an emergency are high on their lists of financial concerns.

If you’re experiencing your share of money-related stress, it’s important to do what you can to alleviate it. Doing so could help your general outlook improve. Here are some key steps to take.

1. Get on a budget

Following a budget won’t magically make your bills disappear or shrink. But you might better manage them if you’re tracking your spending more judiciously.

The good news is that you don’t have to spend hours each week poring over a spreadsheet to keep up with a budget. You can choose from different budgeting apps to streamline the process so you can spend more time doing other things that benefit your mental health.

2. Build an emergency fund

If you’re concerned that your next unplanned expense might drive you into debt, or deeper into it, then it’s imperative you build yourself an emergency fund. Having money in a savings account could not only bring you more peace of mind, but give you some breathing room if your bills come in higher than expected or you’re forced to cover a sudden home or vehicle repair.

Ideally, your emergency fund should have enough money to cover three full months of essential bills, at a minimum. That way, if you were to lose your job, you’d be able to pay your expenses for a period of time while looking for work.

If you’re starting off with no savings, do the best you can. Socking away $500 for emergencies is a respectable start, and you can build up from there.

3. Make a debt payoff plan

Maybe you’re carrying a balance on one or more credit cards that’s causing you to lose sleep. You can’t just snap your fingers and magically make that debt disappear. And even if you were to cut your spending and pick up extra work via a side hustle, it might take some time for that debt to be whittled down to $0.

But it might make you feel less stressed to have a game plan for paying off your debt. So figure out how much debt you can reasonably afford to shed each month so you have those details mapped out.

If you owe $3,000 on your credit cards and you think you can free up $250 a month, it means you’ll be debt-free in a year. That’s not the same thing as being debt-free right now, but it’s something to look toward.

Of course, your balance has the potential to keep climbing as interest accrues on it. But if you can do a balance transfer to a 0% introductory APR in this sort of scenario, that added interest may be avoidable.

Take steps to reduce your stress

Unfortunately, members of the LGBTQ+ community face their share of unique challenges. Some, for example, might experience discrimination in the workplace that makes it more difficult to earn an equitable wage.

If you’re struggling with financial stress, you don’t have to resign yourself to it. Take these key steps to address some of your worries as soon as possible.

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A huge credit card collection can come with its share of potential problems. But it’s not inherently bad. Here’s a look at one cardholder’s experience. 

There’s a lot of debate about how many credit cards you should have. Most people agree you need at least one, but there’s some argument over how many cards are too many.

In my book, there’s no perfect number for everyone. If you want a one-card wallet, do it. You want more than a dozen cards to cover every single purchase you could ever make? Do that, too.

Personally, I went the latter path, with a collection of cards well into the double-digits. I’ll be the first to tell you that having 15+ cards isn’t for the faint of heart (or weak of wallet). But it’s also not necessarily the credit deathtrap some people might fear. Here’s what it’s really like.

Excellent credit can be yours

I can tell you from experience that your credit score doesn’t have to die just because you have a lot of cards. I have both tons of credit cards and excellent credit.

And I don’t want you to think it’s despite having a lot of cards. I believe having all those cards has helped my credit score overall. This is due to a few factors:

Payment history: While I have a lot of cards, I stay on top of my due dates, so I have a lot of positive payment history. Since this is one of the biggest factors in your credit score, this has helped keep my scores high.Amounts owed: Even though I have a few cards with low limits (a few store cards, specifically), the sheer number of cards means my total available credit is very high. This keeps my credit utilization ratio low even when I have high spending months.Credit mix: Creditors like to see that you can handle multiple types of credit at once. On the surface, it might seem like having a lot of credit cards wouldn’t add to this. However, they’re not all traditional credit cards; I also have several store cards, as well as some charge cards, which actually adds to my credit diversity. Plus, I’m showing I can responsibly handle multiple credit lines at once.

At the same time, there are some potential credit drawbacks I have to keep in mind:

Average account age: I have a few cards that are quite old, as I opened them many years ago. But I also open new accounts regularly (usually for the sign-up bonuses), so my average account age is much lower. This is one factor that counts against me.New accounts: Each new credit card application comes with a hard credit inquiry. These can hurt your credit score, especially if you have multiple hard inquiries in your reports. I try to space out new card applications to help minimize the impacts.

A big part of keeping my credit in good shape while juggling all these cards is staying on top of the details. Next I’ll explain how I keep track of everything.

Smart management is key

One of the biggest questions I get asked about my card collection is how I manage everything. For instance, people often seem surprised that I’ve never missed a card payment. Others wonder how I keep track of which card offers which benefits. Here’s how I handle a few of the most important tasks.

Making on-time payments

Every two weeks, I go through all of my card accounts to make payments, verify transactions, and take care of other housekeeping tasks. This is made easier by the fact that while I have 15+ cards, they aren’t all from different issuers, so I have fewer places to log into.

Of course, even I am subject to life’s little surprises that can throw me off schedule. So I’ve set up autopay on all of my cards to make sure at least the minimum payment is made by the due date every month.

Tracking annual fees

Only about half of my cards have no annual fee — which means the other half have fees, some of them quite high. I have calendar reminders set up for all of my annual fee cards to ensure I’m never blind-sided by a three-digit card fee without the means to pay it off.

Staying on top of perks and rewards

The best way I’ve found to track each card’s perks and purchase rewards is with a spreadsheet. I have a master document with each card, its perks, its rewards, and other pertinent data. This helps remind me what card to use when, and which benefits I have yet to use for the month or year.

That said, there isn’t as much to keep track of as you might think in this regard. I only keep a handful of cards in my wallet for everyday purchases. The rest are either set to autopay — for example, the card I use for utilities stays at home and takes care of things automatically — or are only used for specific purchases, like my hotel and airline credit cards.

A card for every occasion

Having a ton of credit cards isn’t for everyone. But if it’s something you want to do, it’s absolutely possible to do it while still maintaining your credit — and your sanity.

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Not a fan of your executive membership at Costco? Read on to see what options you have. 

As a Costco member, you have choices when it comes to your membership plan. You could opt for a basic membership, which costs just $60 a year, or you could spring for an executive membership, which costs $120.

The primary benefit of an executive membership is getting to score 2% cash back on all Costco purchases you make, including online purchases. So basically, if you spend $3,000 a year at Costco, your executive membership pays for itself. That’s because 2% back on that sum is $60, which is the difference in cost between the lower tier membership and the higher tier. And if you spend anything more than $3,000, you come out ahead financially by having an executive membership.

But what if you’ve paid for an executive membership and regret that decision? It may be that you’re not shopping at Costco as frequently as you expected to. If that’s the case, worry not. Costco will allow you to downgrade your membership at any time. Here’s how that works.

When an executive membership isn’t right for you

Some people upgrade to an executive membership at Costco only to realize it doesn’t make financial sense. The good news is that Costco offers a 100% satisfaction guarantee on its memberships. So if you’re unhappy with your upgrade, you can always downgrade at any time and get a prorated refund.

So, let’s say that three months after having upgraded your membership, you decide the executive option isn’t right for you. All you need to do is go to Costco customer service and ask to switch back to a basic membership. At that point, you can expect a $45 refund, since you paid $60 for 12 months of an upgrade.

That said, you may not want to cancel your executive membership immediately if your Costco shopping slows down. One lesser-known fact about that membership is that if you don’t earn enough cash back from it to make up for the extra $60 you paid for it, Costco will refund you the difference at the end of the year.

So, let’s say you did the upgrade and only wound up spending $2,000 at Costco after a year, thereby only snagging $40 cash back from your executive membership. At that point, Costco will give you $20 back to make you whole. So there’s really very little risk in keeping that membership, even if your spending at Costco declines.

You have choices either way

All told, there’s nothing to worry about if you end up unhappy with your Costco executive membership. If you want to cancel it and downgrade to a basic membership, that option exists. And if you want to keep the upgraded membership and see what happens as far as your cash back goes, that option is there, too, because you can always get refunded at the end of the year.

In fact, the beauty of shopping at Costco is that on top of saving money, you’re pretty much guaranteed to have a good experience. And if you don’t, you can rest assured that Costco will make it right.

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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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Did you know you can schedule bills to be paid through your bank? Find out how to use your bank’s online bill payment feature and why you may want to do it. 

We all have bills to pay, but it’s not always easy to pay all of them. Some companies charge processing fees when you use their online bill payment systems. When you pay extra fees like this, you waste money. One way to avoid additional fees when paying your bills is to use your bank’s online bill pay tool. Many banks include this helpful feature on their websites and mobile apps. Here’s what you need to know about using your bank’s bill pay feature.

You can pay your bills through your bank

When you send bill payments out in the mail, you’ll need to not only include a check for payment, but also cover the cost of a postage stamp. Those costs can add up if you regularly pay several bills by snail mail. But there are other ways to pay your bills for free.

One way is using the online bill payment feature provided by your bank. Many banks offer free bill payment tools to customers. By using this feature, you can save yourself money. This service provides a convenient way to schedule and stay on top of your bills.

What to expect when you use your bank’s bill pay tool

If your bank offers bill payment tools, you may want to give it a try.

Here’s what you’ll need to do to pay a bill this way:

Log in to your online bank account.Locate the bill payment tool.Add a new payee.Enter the details for the payee.Select the payment amount.Schedule your payment.

Once you schedule a payment, you’re all set. Your bank will send the payment on your behalf and deduct money from your checking account on your chosen date to cover the cost.

This service offers a simple way to pay your bills electronically. If you regularly use your bank’s mobile app or website, you may want to see if online bill pay features are available.

Five reasons to pay bills through your bank

Still not sure if your bank’s bill payment solution is right for you?

Here are five reasons you may want to use this service:

Avoid extra fees: Some companies charge additional processing fees when you pay bills through their online portals. Using your bank’s online bill pay feature is a good idea if you’re on a tight budget and want to avoid unnecessary extra fees.Save money on checks: While you may occasionally need paper checks, they’re becoming less necessary as more payment solutions are available. Paper checks cost money, so you can keep more money in your wallet by using online bill pay tools.Fewer fears of delayed or lost mail: Unfortunately, mail can get lost or delayed. If you want to minimize the potential for lost or delayed mail, you may want to consider using your bank’s online bill pay service.Stay organized: When you schedule payments through your bank, it’s easier to stay organized. You’ll be able to track your scheduled, pending, and paid payments, which could help you keep better financial records.Save time: Finally, this bill pay feature can help you save time. Life gets busy, and this solution offers an easy way to schedule your bills so they’re always paid on time. Convenient electronic financial solutions like this can improve your life.

Learning new money management skills can allow you to improve your financial situation. Check out our personal finance resources for more information about essential money topics.

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Owing money on a loan can be stressful. Read on for ways to shed your personal loan debt in short order. 

The nice thing about personal loans is that they allow you to borrow money for any purpose. You can use a personal loan to do anything from fix up your car to repair your home to cover sudden medical bills. And they also tend to charge a lot less interest than credit cards.

Not only that, but the interest rate you lock in on a personal loan is fixed, which means your payments for that loan are predictable. With a credit card balance, your interest rate can change while you’re in the process of paying off your debt, making it harder to do so.

Still, owing money in any shape or form can be stressful. And so if you owe money on a personal loan, you may be eager to pay off your balance as soon as you can.

A Motley Fool survey reveals that people who identify as LGBTQ+ are more likely to owe money on a personal loan than members of the general population. So if you’re in that boat, and your loan balance is contributing to your financial stress, here are some steps you can take to shed your debt in short order.

1. Prioritize your non-essential spending

If you were to cut out every single non-essential expense in your budget, it would probably go a long way toward helping you pay off your personal loan. But let’s face it — that’s no way to live. You can’t deny yourself every luxury that makes you happy. So instead of doing that, prioritize your non-essential expenses.

Figure out which luxuries are most important to you and continue to spend on those. At the same time, cut back on the non-essentials you can more easily do without. That way, you can free up some cash to pay off your loan.

2. Give your income a boost

If you don’t earn a very high wage, you may only be able to free up so much cash each month for debt payoff purposes. That’s where a side hustle could come in handy.

If you’re willing to put in the time and work a second job, you can boost your income and use your extra cash to pay off your loan balance. And you may even find that you enjoy your side hustle enough to keep at it once your personal loan is gone for good. That could, in turn, help you avoid having to turn to a loan again in the future.

Owing money on a personal loan might be causing you stress. And even if it’s not making you lose sleep, it’s still monopolizing some of your income month after month. So either way, it’s in your best interest to get rid of that debt as soon as you can.

By spending your money more judiciously and boosting your income with a second job, you may find that your personal loan balance is whittled down to $0 before you know it. And that’s something to feel good about either way.

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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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Father’s Day is coming up. Read on to see why you may not want to go all out this year. 

Father’s Day will be here before you know it. And that may be stressing you out — not only because you’re trying to find the perfect gift, but also, one you can afford.

These days, many people are strapped for cash due to inflation. If your credit card bills are already sky-high, then you may be hesitant to add an expensive Father’s Day gift to that pile of debt.

The good news, though, is that you may not have to. In fact, if you sit down and talk to your dad, you may find that his most preferred gift is something that won’t necessarily cost you a dime.

Give the gift of time

It’s nice to want to buy your dad something special for Father’s Day. But in a recent Empower survey, the most desired gift among dads this Father’s Day is none other than quality time. So before you raid your savings account to buy your dad a nice watch or a fancy gadget, think about the different ways you can make the day special without spending a fortune.

One option you may want to consider is inviting your dad over for a home-cooked meal. Whip up his favorite dish and dessert to make it special. Or, take advantage of the warmer weather and invite your father over for a barbecue.

Another route to consider is spending the day outdoors with your dad if he’s the type to enjoy that sort of thing. Find a new hiking trail to explore together, or bust out the kayaks that have been taking up space in your garage and spend a few hours paddling. You can even find a nice neighborhood park to visit and walk through if you’d rather do something a little less rugged.

Of course, there’s no guarantee the weather will cooperate on Father’s Day. So a backup plan (or a primary one, if neither of you is particularly outdoorsy) could be to have a board game or movie marathon where you play or watch your favorites.

Think beyond Father’s Day

This Father’s Day, your dad might much prefer a day of bonding and hanging out than an expensive gift — or even an inexpensive one. But remember, Father’s Day happens just once a year, and what your dad may really want the most is to see you and spend time with you consistently. So think about ways to make that happen.

It may not be easy if you live in a different city or state and have to travel for hours to see your dad. But in that case, consider setting up a weekly Zoom chat or even a phone call so you both have that time to look forward to.

There’s a lot of pressure to spend money on Father’s Day and come up with the perfect gift. But if money is tight, your dad most likely doesn’t want to add to your financial stress. So before you rush to buy your dad a physical gift, consider giving him something worlds better that won’t put a strain on your limited financial resources.

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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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