Money Management

Therapy can really help your mental health, but it can also be really expensive. Here are five things you can try to keep your costs down. 

The number of American adults who are seeking mental health treatment has been climbing for years. In 2021, more than 21.2% of adults 18 to 44 said they sought treatment for their mental health within the last year. And it’s possible that many more wanted to do so, but held back due to stigma or finances.

With the median hourly rate for therapy in most parts of the country sitting above $100, many who need help aren’t able to afford it. But there are things you can try to get the therapy you need at a more affordable price. Here are five tips to get you started.

Talk to your insurer

Therapy can be a lot cheaper if it’s covered by your health insurance than if you have to pay for it entirely out of pocket. So it’s a good idea to check whether there are any therapists in your area that are part of your insurance provider’s network.

Your health insurer may have an online tool where you can search for in-network providers in your area. If not, you can always reach out with a phone call.

See if your therapist offers discounts

If you can’t find an in-network therapist or you don’t want to leave your current therapist, you may want to inquire about discounts for paying for your sessions in cash. Some may also offer a sliding payment scale based on your ability to pay.

These are also great questions to ask new therapists if you don’t already have one. Even if this only shaves a few dollars off your per-session bill, it can have a significant effect on your checking account balance over time.

Check out graduate psychology programs in your area

Students hoping to become therapists need to get some real-world practice in before they can graduate. That’s why many universities give their graduate students the opportunity to work with real clients.

This can be cheaper than seeing a full-fledged therapist, and it doesn’t mean you’ll sacrifice anything in quality. These students are held to the same standards as licensed therapists in terms of confidentiality, and they’re overseen by professors who can guide them as needed.

This may not be an option for you if you don’t live near a university. But if there’s one not too far away that has a psychology program, reach out to see whether it offers any therapy services to the general public.

Try online therapy

Services like BetterHelp and Talkspace now enable you to get therapy from just about anywhere. They match you with a therapist based on the information you provide in your initial application. Then, you can schedule appointments through the service at times that fit your schedule. Some therapists are even available outside of regular business hours, which is great for those who work a 9-to-5.

Many of these services have an in-app chat you can use to contact your therapist between sessions as necessary. And you can choose the format of the sessions you’re comfortable with. This could be via online chat, over the phone, or a video call.

Cost varies depending on the service you go with, how often you’re having sessions, and whether your health insurance covers it. But it’s worth pricing out to see if it’s more affordable than traditional, in-person therapy.

Try group therapy

Depending on the reason you’re seeking therapy, a group session might be an option. This is where you meet with a therapist and a group of others in your area who have had similar experiences and are trying to work through them.

These sessions are often significantly cheaper than individual therapy, plus they provide access to a support network beyond just your therapist. However, not everyone is comfortable discussing their challenges with others in a setting like this, so that’s something to weigh when deciding on the best approach for you.

Hopefully one or more of the tips above work for you. If you’re not happy with your current therapy arrangement, keep searching for something that fits your needs and budget. You never know when a new opportunity might crop up in your area.

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You may want to own a home. But is it really a good investment? Read on to find out. 

There’s a reason so many people would prefer to buy a home rather than rent one. When you rent a home, all of the money you spend goes toward your landlord’s mortgage loan. When you own your own place, you get to build equity in that home, and you might eventually get to sell your home at a profit.

A good 85% of new home buyers think a home is a good long-term investment, according to

TD Bank’s First-Time Homebuyer Pulse. But if you’re going to become a homeowner, you’re generally better off not looking at it from an investment perspective, but more of a logistical one.

You’re not investing your money in the classic sense

When you buy stocks in your brokerage account, you’re doing so for the express purpose of making money. It’s not like having those stocks in your name does anything else for you or brings you enjoyment.

A home is a different story. You might consider a home an investment, and a good one at that. But in reality, the purpose of owning a home is not to make money — or at least it shouldn’t be. Rather, the purpose of owning a home is to have a place to live, and one where you get to set the rules as opposed to a landlord doing so.

If you buy a home with the primary goal of being able to make money when you sell it, you may wind up disappointed. That’s because it can cost a lot of money to own a home over time.

Let’s say you buy a home for $400,000 and are able to sell it for $500,000 in 10 years. Let’s also assume you manage to sell your home on your own, without a real estate agent, so you really are looking at a $100,000 profit more or less.

At first, it might seem like the home you bought and sold was a good investment. But think about the money you spent during those 10 years to live in that home.

Maybe you spent $6,000 a year on property taxes, which would take $60,000 away from your profit. Maybe you also spent $4,000 a year on general maintenance and repairs. All told, residing in that home for a decade cost you $100,000. And that brings your profit from selling your home to — wait for it — $0.

Buy a home for the right reasons

You may end up making money from the sale of your home eventually. And if so, great. But don’t go into homeownership with the mindset that you’re buying because you think real estate is a good investment. Instead, buy a home because you want a place of your own, and because you’re eager to enjoy the stability that comes with it.

You never know when you might have to sell a home and what market conditions will look like at that point. If you tell yourself that the home you buy is fulfilling a specific need, you’ll be less likely to end up disappointed if you don’t make any money on it.

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

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Own a small business? Read on for tips on mitigating some of your top worries. 

Being a small business owner means carrying a lot of weight on your shoulders. And that can be overwhelming, especially at a time when economic conditions aren’t the greatest.

These days, the biggest concerns among small business owners are inflation, rising costs, and economic uncertainty (26%), according to Truist’s Small Business Pulse Survey. And if you share these concerns, here are some steps worth taking to address them.

1. Do a financial audit

Do you know exactly how much money you’re spending on things like inventory, overhead, and workplace benefits? If higher costs are putting a strain on your business and you’re worried about costs rising even more, it may be time to do a deep dive into your company’s finances.

Comb through your banking records to see exactly what your inflows and outflows look like. Then do the same with your credit card statements. That should help you make savvy cost-cutting decisions if you decide you’re simply spending too much.

2. Trim some expenses

Many consumers are cutting back on spending to cope with inflation. And you may want to take a similar approach to your business.

Once you’ve completed your financial audit, you may be in a stronger position to determine how much less money you need to be spending. From there, you can look at your various expenses and determine which ones should land on the chopping block.

Of course, these are difficult decisions to make. So it could pay to bring in a consultant to guide you along. The upside of going this route is that a consultant is going to look at everything from a numbers perspective — not an emotional one.

You, for example, might harbor feelings of sadness or guilt if you’re forced to reduce your staff or take away some of the benefits your workers have come to love. And you might avoid moving forward with layoffs and instead try to convince yourself they aren’t really necessary when, in reality, cutting staff is the most financially sound thing to do. So you might need a consultant to come in and help you implement some hard choices.

3. Conserve funds

Many financial experts are still warning about the possibility of a 2023 recession. As a small business owner, that can be downright nerve-wracking. If you’re worried about an economic slowdown, one of the most important things you can do is shore up your company’s savings.

Start stockpiling more cash in the bank so you have reserves to tap if business slows or even grinds to a half. This may be easier to do once you’ve managed to trim some of your expenses, whether it’s workplace benefits, headcount, or other costs.

It’s not exactly an easy time to run a small business. Not only is the cost of doing business higher these days, but there’s enough uncertainty to make consumers skittish about the idea of spending their money. But if you’re worried about inflation, rising costs, and an economic downturn, then it pays to take the above steps to get yourself — and your business — to a better place.

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A high credit score is beneficial, but only up to a certain point. See a good number to aim for and learn why a perfect score isn’t necessary. 

Credit scores range from 300 to 850 under the FICO® Score system, which is the one most widely used by lenders. As is usually the case with any type of score, higher is better. A higher credit score has lots of potential financial benefits, including lower interest rates on loans and access to better credit cards.

That’s only true up to a point, though. Even though some people think they should go for that elusive 850, the truth is you don’t need a perfect credit score. If you’re currently working on your credit, there’s a better target to aim for.

How high your credit score really needs to be

A FICO® Score of 760 is as high as you need to go. At this point, you’ve effectively maxed out the benefits of a high credit score. Your score will be good enough to qualify for the lowest interest rates, the top credit cards, and pass just about any credit check.

It might seem strange and illogical at first. After all, 760 is a far cry from 850. But lenders group consumers by credit score ranges, not their exact credit scores.

Let’s say you’re applying for a mortgage. The highest score range that mortgage lenders use is 760 to 850. Here’s the full list of credit score ranges used by conventional mortgage lenders:

760 to 850700 to 759680 to 699660 to 679640 to 659620 to 639

You’ll qualify for lower mortgage rates with a FICO® Score of 770 compared to a score of 740, because those are in separate ranges. The same is true with a score of 710 compared to 690. On the other hand, it makes no difference if your credit score is 770 or 790. They’re both in the 760 to 850 range, so they get you the same rates.

With other types of financial products, you have even more flexibility. You can typically qualify for the lowest rates on personal loans with a score of 720 or higher. That’s also high enough to qualify for the most selective credit cards.

It’s worth noting that your credit score doesn’t guarantee approval for any financial product. A score of 760 or higher means you can qualify for the best credit cards and the lowest rates on loans. However, there are other factors taken into account during the application process, as well. It’s still possible for your application to be denied, but this is less likely with a high credit score.

Building and maintaining a high credit score

It’s good that you only need a credit score of 760, because getting there isn’t too complicated. A score of 850, on the other hand, takes a lot of time and micromanagement.

Here are the steps you can follow to increase your credit score:

Make sure you have at least one credit card. You can build credit with other financial products, such as loans. But a credit card is the best option because you can use it indefinitely, whereas loans only last for a set amount of time. Also, you can use a credit card without any interest charges if you pay your bill in full every month.Use your credit card every month. Your credit score goes up when you borrow money and pay it back. By using your credit card for purchases, you’re borrowing money, and you can then pay it back by the due date.Pay your credit card bill on time and in full. Every on-time payment is a positive mark on your credit file. While any amount that meets the minimum payment requirement works, it’s better to pay the entire statement balance on your credit card bill to avoid interest.Keep your credit utilization low. The percentage of your credit limit that you use is known as your credit utilization ratio. For example, if you have a $10,000 credit limit and a $1,000 balance, your utilization is 10%. It’s recommended to keep this below 30% at all times, and lower is even better.

That’s all you need to do to both get your credit score to 760 and keep it there consistently. As you can see, there’s nothing complex about building and maintaining your credit score. Once you’ve established those good habits and gotten your score where you want, you can put your credit on autopilot and focus on other aspects of your personal finances.

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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 Target. The Motley Fool has a disclosure policy.

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When you’re in your 60s, your net worth may be sizable enough to see you into retirement. Find out what that looks like for the average American. 

Net worth is one of those useful yardsticks that help us track our finances. It’s essentially the value of everything you own minus the value of what you owe. One reason it matters is that it isn’t about how much you earn. Some people with big paychecks have low net worths because they spend a lot of that cash on things that don’t actually build wealth.

Think of your net worth as a way to take your financial pulse and see how much you’ve chalked up in the assets column. If you’re aged 60, your net worth gives you a good insight into how ready you are for retirement. If you’re not where you want to be, there’s still time to act.

How to calculate your net worth

To calculate your net worth, you’ll need to work out what you own (assets) and owe (liabilities). You’d then subtract the liabilities from the assets to get your net worth.

For example, let’s say you have the following:

$1,250 in a savings account$500 in a checking account$350,000 in a retirement accountA home worth $400,000

Your assets would be worth $751,750.

Next, subtract your liabilities. For the purposes of illustration, let’s say you owe:

$150,000 on your mortgage$20,000 on an auto loan$4,000 on your credit cards$1,200 on a personal loan

Your liabilities would come to $175,200. Subtract them from your assets. In this scenario, your net worth would be $576,550.

What should your net worth be at age 60?

The word “should” is complicated when it comes to people’s finances. Should can bring with it a sense of guilt and obligation that are often unhelpful. Plus, if your net worth isn’t as high as you’d like it to be at this stage of life, ruminating on what you should have done differently won’t make a lot of difference. The trick is looking at how you can change or manage your situation now.

For many people, their 60s is the final stretch of time to build assets and pay down debt before retirement. In an ideal world, your net worth, particularly your retirement savings, will give you enough money to cover your living costs when you stop working.

According to a survey by Empower, the average net worth for people in their 60s is $1,603,384. Before you panic, know that averages can be skewed by a few people with huge balances. The median net worth for people in their 60s is only $489,261. This gives us a more realistic idea of the average American’s situation. Even then, your life may be very different from the average person. Rather than look at what other people are doing, consider whether you have enough to fund your old age.

To work out how much you’ll need, take a look at your current spending habits. What is your current income, and how much do you spend each month? What’s your monthly spending likely to be when you retire? Many financial planners recommend estimating your post retirement costs at about 80% of your current ones.

It might be that you don’t have to factor in commuting and other work-associated costs. You may also have paid down your mortgage by this point, as well as other types of debt. But if you’re planning on traveling for six months of the year or pursuing an expensive hobby in retirement, you’ll need to be realistic about what it will entail.

How to improve your net worth

If your net worth isn’t as healthy as you’d hoped, there are steps you can take to turn things around. Try to be realistic, particularly if you’ve struggled to meet financial goals in the past. You may not be able to become a millionaire overnight, but you might be able to position yourself better for the coming decades.

Pay down debt: Debt is a financial millstone that can drag on your available cash supplies, particularly as you enter your old age. Whether it is credit card debt or your mortgage, make a debt payment plan so you can retire with as little debt as possible.Contribute to tax-advantaged accounts: There are several different tax-advantaged retirement accounts, such as a work sponsored 401(k) or an individual retirement account (IRA) and it’s worth understanding how they work so you can pay less tax. The limits on how much you can contribute change once you’re over 50, allowing you to make some catch-up contributions.Cut your spending: Improving your net worth requires money. To get it you may need to take a careful look at your budget and identify some non-essential expenses you can cut. A budgeting app might help you see where your money goes, or you can take the old-fashioned pen and paper approach.Increase your income: If you can’t see any wiggle room in your budget and are still worried about your nest egg, consider ways to up your earnings. This might involve taking on more hours at work or even a side hustle.

Bottom line

Your net worth is a useful indicator of where you stand financially, but it isn’t the be all and end all. Use your net worth calculations to see how you stand financially, including how balanced your assets are. For example, if all your cash is tied up in a home you don’t plan to sell, you might look into building up other forms of savings or investments for your old age.

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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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You may want to open an account at more than one bank. Read on to see if that might impact your credit score. 

Credit card companies are constantly trying to lure in consumers with great sign-up bonuses. Because of this, it’s common to apply for multiple credit cards at the same time. If there’s a travel rewards card offering 50,000 bonus miles and a cash back card offering a $250 payday for meeting a certain spending threshold, those are offers you might want to pursue simultaneously.

The problem with opening multiple credit cards at once is that it has the potential to hurt your credit score. But you can rest assured that if you want to open multiple bank accounts, your credit score should not be impacted.

When you want to put your money in different places

It may be that one bank is offering a bonus for opening a checking account and a separate bank has a really great interest rate on savings accounts. In a situation like that, it could make sense to open two accounts at separate institutions at the same time. But you don’t have to worry about credit score damage.

Whenever you apply for a new loan or credit card, a hard inquiry is done on your credit report. That can result in a five to 10-point drop in your credit score each time. In fact, new credit accounts make up 10% of your credit score. And opening too many of them at once can be harmful.

But when you apply for a bank account, it results in a soft inquiry on your credit report, not a hard inquiry. A soft inquiry should not cause your credit score to drop at all.

Think about it. When you apply for a loan or credit card, you’re asking to borrow money in some shape or form. When you open a bank account, you’re not asking to be given money to borrow. Rather, you’re saying that you have money that you want to put somewhere safe.

As such, what banks really need to do when you open an account is verify your identity more so than confirm that you can be trusted to borrow. So that’s why opening a bank account won’t have a negative impact on your credit score.

It’s good to know what goes into your credit score

Opening a bank account won’t impact your credit score, and neither will the amount of money you have in your account. It’s not as if having a higher balance will result in a boosted score while having less money will cause your score to shrink.

On the other hand, being timely with bills (or not) will impact your credit score, as will using up too much of your credit limit at once. And having long-standing credit accounts can be a good thing for your score, as it shows consistency.

Now for the most part, it generally doesn’t make sense to go off and open numerous bank accounts at the same time. But rest assured that if you decide you want to open two different ones within days of each other, or even on the same day, it shouldn’t be a problem.

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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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