Money Management

Cleaning up your space has its own rewards, but it also presents opportunities to make some extra money. Read on for three ideas worth considering. 

Most people would agree that spring cleaning isn’t the most exciting way to spend your time. Yes, you’re rewarded with a clean and more organized space at the end of it. But it would be a lot nicer if you had a little more to look forward to, like extra cash.

It turns out there are actually several ways to turn a profit off of spring cleaning. Here are three ideas for you to try.

1. Sell unused items

Selling things you don’t need anymore is a great way to make a little extra cash, and it’s never been easier to do. You could go the traditional route and hold a yard sale. But you can also snap a few photos and post your items to an online marketplace so it can reach a wider audience.

When deciding where to post your purchases, consider whether you’re comfortable shipping the item or not. If it’s large or bulky, you may prefer to advertise it just to those who live in your area and can come pick it up in person. Smaller items are easier to ship anywhere, so you could consider listing those on a site like eBay.

Keep in mind that things may not sell right away, so if you want to do this, you might have to continue storing them for a while. Price plays a big factor in this. If you want items to sell quickly, consider reducing the cost. You can check out the price of other, comparable items online to get a sense of what’s reasonable.

2. Donate items

Donating unused items may not provide you with extra cash today, but it could help you save on your taxes the next time you file them. You can write off donations to qualifying tax-exempt organizations. But in order to do this, you need some sort of documentation to prove that you actually made the donation.

The organization you’re giving to should be able to provide you with information about what you need to claim the tax deduction. If the total dollar value of your donations exceeds $500, you’ll need to fill out Form 8283 and submit this with the rest of your tax return. And if your donations exceed $5,000, you’ll need an appraisal to prove their value.

In addition, you’ll need to itemize your deductions in order to claim this deduction. But this isn’t always the way to go. Many people do better by claiming the standard deduction for their filing status, and if you’re one of them, you won’t be able to claim any savings for your charitable donations.

3. Help others with their spring cleaning

If you enjoy helping people get more organized, you could turn spring cleaning into a side hustle opportunity. Reach out to friends and family members in your area to see if they have any spaces that need cleaning up. Offer to assist them or do the work for them for a fee.

Social media makes it pretty easy to advertise your services to those in your area. Between that and word of mouth, you may not need to pay for any advertising at all. And you can take on as much or as little work as you want.

Check online to see what others in your area charge for similar cleaning services. If you want to draw in new customers right away, consider charging slightly less until you build up a solid client base.

You may not make enough off your spring cleaning to afford a fancy vacation or a new car. But even if you’re able to add a few hundred dollars to your savings account, that’s something to be proud of.

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The U.S. economy could take a dive this year. Read on to see if you should be cutting your spending in light of that. 

Financial experts have been sounding recession warnings since the latter part of 2022. So if you’re worried about an economic downturn, you’re in good company.

New data from Northwestern Mutual reveals that 67% of Americans think the U.S. economy will enter a recession later this year. And among those who are expecting a 2023 recession, 19% anticipate it lasting more than two years. It’s not surprising, then, that 36% of Americans are cutting back on daily spending to cope with recession fears by doing things like eating out less frequently or postponing concert ticket purchases.

If you’re concerned about an impending recession, you may be inclined to cut your spending, too. But is that really necessary? Here’s how to know.

It’s a matter of savings

The less money you spend, the more you should be able to save. And as a general rule, the more cash in a savings account you have, the more financial protection you get.

But that doesn’t necessarily mean that your savings are in poor shape. In fact, if you have enough money in the bank to cover a full three months of essential expenses, then you’re actually in pretty good shape. And if you have savings beyond that point — say, enough money to cover five or six months of bills — then you may not have to cut any spending at all.

But if you don’t have enough money in savings to pay for three months of bills, then making changes to your spending habits is probably a good idea. Even during the best of economic times, it might take you three months to find a job after losing one. And so it’s important to have money in the bank to cover yourself financially while you look for one.

During a recession, when companies aren’t rushing to hire, it might prove even more difficult to find a job. So that’s why it’s really essential to be able to cover three months of bills from your savings.

Finding expenses to cut

Identifying expenses to reduce may not be easy. And some of your bills may be expenses you’re locked into. If you signed a mortgage leaving you with $1,200 monthly payments, it’s not exactly as if you can decide to start paying $1,000 a month instead.

Rather, you’ll need to look at things like groceries, entertainment, and subscriptions to see where there might be wiggle room to cut costs. If you’re willing to shop more frugally, you might manage to slash your grocery bills quite a bit. And if you’re willing to unload some subscriptions you don’t use all that often, that, too, will free up cash.

If identifying expenses to cut really isn’t feasible, you could instead look to get a second job. But the point is to make sure there’s a way to pump money into your savings so you’re protected in case economic conditions worsen.

All told, you may need to get on board with cutting your spending if your savings won’t allow you to cover three months of bills. And even if you are at that point, if there are expenses you can give up pretty easily, you may want to go that route and buy yourself more protection in savings form.

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A recession may be coming. Read on for tips on how to gear up. 

The idea of an economic recession can be scary. And unfortunately, it might soon be a lot of people’s reality.

A recent survey by Northwestern Mutual found that 67% of U.S. adults expect the U.S. economy to enter recession territory in 2023. And while the idea of that isn’t exactly comforting, the more steps you take to prepare for a downturn, the more peace of mind you’ll give yourself. Here’s how to gear up for a worsening economy.

1. Build or boost your emergency fund

The problem with recessions is that they tend to go hand in hand with higher levels of job loss. But you can prepare accordingly by boosting your emergency fund, or building one from scratch if your savings account is currently empty.

At a minimum, you’ll want to aim for enough money in savings to cover three months of essential bills, like your rent or mortgage, car payments, food, and utilities. The logic is that if you were to lose your job, it might take a good three months to find a new one. So it’s important to have a way to cover your basic expenses during that period.

2. Shed your high-interest debt

Because a recession could lead to job loss, it’s a good idea to minimize the number of expenses you’re on the hook for. If you have a credit card balance you’ve been carrying, now’s a good time to try to rid yourself of it.

First of all, the longer you carry that balance, the more it’s apt to cost you in interest. That’s money you’re paying your credit card company rather than sticking in the bank to boost your savings.

But also, let’s say you currently have a $70 minimum credit card payment you have to fork over every month. If you’re able to get rid of that obligation, you’ll have one less expense to grapple with while unemployed (if you lose your job).

3. Put off a large purchase

You may be eager to buy nicer furniture or upgrade some of your electronics. But putting off large purchases is a good way to be recession-ready.

First of all, if you have to finance your larger purchase, that’s an extra loan or credit card payment you’re looking at taking on. And you don’t want to be loading up on more debt at a time when your job might end up on the chopping block.

Even if you’re able to pay for a big purchase outright, that’s money you’ll be removing from your savings when you might need the extra cushion. So if your large purchase isn’t something you absolutely need right away, hold off.

4. Grow your professional network

When you’re looking for work, who you know is often just as important as what you know. By growing your professional network, you’ll potentially give yourself more people to reach out to for help should your job end up being pulled in a recession.

You can expand your network by researching local industry events — and making an effort to show up. And also, don’t underestimate the power of LinkedIn connections.

5. Acquire more job skills

The more value you bring to the table at work, the more staying power you might have if a recession strikes and your company is forced to make cuts. Think about the knowledge gaps you have that are preventing you from doing the very best job possible. And then take steps to address them, whether by shadowing colleagues with more experience or taking an online class.

There’s no doubt that the idea of an economic downturn is unsettling. But if you take these steps, the idea of a recession may not cause you to lose as much sleep.

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It’s common to get a summer job when you’re off between high school or college semesters. Read on to see where you should put the money you make. 

When you have the summer off between high school or college semesters, it can be tempting to use that time to kick back, relax, and hang out with friends. But getting a job could be a much better move.

First of all, there’s only so much relaxing you can do before you get bored. And if you want money to enjoy your summer, you may need to go out and earn it.

But ideally, you’ll earn enough money to do more than just pay for night time outings. You might earn a nice chunk of cash you can really put to good use. Here are a couple of options to consider for your summertime earnings.

1. Use the money to build savings

Many high school and college students don’t think about needing to have an emergency fund. After all, the purpose of having one is to cover your expenses in the event of a lost job, or to cover an unplanned expense.

But if you’re a student, you may not have many bills you’re solely responsible for. And your parents might still be willing and able to bail you out of a financial jam, such as if your car ends up needing repairs.

But while your need for an emergency fund may be minimal now, things could change once you start working full-time and become a full-fledged adult. So if you’re willing to put some of your earnings into a savings account now, it might really come in handy later on.

2. Open a Roth IRA

It’s a good idea to make sure you have some money in a regular savings account. But if you have savings already, or are earning enough to pad your savings account and still have money left over, then it pays to consider opening a Roth IRA.

A Roth IRA lets you save and invest money for retirement. In order to fund one, you need to have earned income.

The amount of money you can put into a Roth IRA can change yearly. In 2023, savers under 50 can contribute up to $6,500.

Now, let’s say you manage to earn $3,000 from your summer job, and you decide to save $1,000 in the bank and spend $1,000 on yourself. Let’s then say you stick your remaining $1,000 into a Roth IRA and invest it in stocks.

Over the past 50 years, the stock market has delivered an average annual return of 10%, as measured by the S&P 500. If you were to leave your $1,000 Roth IRA contribution alone for 50 years while it generates that same return, you’d grow it into more than $117,000.

Working during the summer could do many good things for your resume as well as your finances. It pays to consider these two options for the money you’re earning. Both of them could really come in handy for your future, whether it’s regular adulthood or retirement, which is a milestone you’re really never too young to save for.

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The last year has seen a sizable shift in where people keep their money. See which demographic is moving the most money out of traditional banks and why. 

It hasn’t been business as usual for the big banks lately, and not just because of multiple bank failures. From April 2022 to May 2023, total deposits at commercial banks have fallen by just over $1 trillion, according to the St. Louis Federal Reserve. Considering deposits had been rising fairly steadily for the last 50 years up until then, that’s a notable shift.

The most likely cause is that consumers can now earn a whole lot more interest by moving their money to high-yield banking accounts. This wasn’t the case before, when interest rates were fairly low across the board. But because the Fed has hiked interest rates so much over the last year and change, there’s now a huge difference between what traditional banks and online banks offer.

For example, the average savings account APY is 0.39%, according to the FDIC. The average checking account APY is even lower at 0.06%. On the other hand, if you put your money in a high-yield savings account, you could earn 4.50% or more. For $10,000 in deposits, that’s a difference of more than $400 per year in interest.

It’s a great incentive to rethink where you store your money, if you haven’t already. Now, let’s look at what the research says to see who is and isn’t pulling their money.

Who’s pulling their money from traditional banks?

In February and March, 29% of bank customers said they’d moved deposits from their primary bank in the last 90 days, according to J.D. Power as reported by Forbes. Younger consumers were far more likely to have pulled their money.

Among those 40 and under, 38% reported moving money, and they took out an average of 43% of their deposits. Only 23% of those older than 40 moved money, and they moved an average of 35% of their deposits.

Anyone can benefit from putting their cash in an account with a higher interest rate. But right now, there are more millennials and members of Generation Z who are taking advantage of this opportunity.

How to decide where to park your cash

It’s good to occasionally review where you have your money to check that you’re getting a competitive return. And if you currently have your money in a traditional bank with a low interest rate, then this is something you should change right away.

As far as where you keep your money, there are many options available. Finding the right one will depend largely on how accessible you need that money to be.

For accessibility, consider these options

For cash you could need at any moment, it’s best to stick to accounts that let you make withdrawals whenever you want. Options include:

High-yield savings accounts: These work like any other savings account, but they’re offered by online banks, so they have much higher interest rates.Money market accounts: These offer interest rates on par with high-yield savings accounts, and they also have the more convenient withdrawal options seen in checking accounts, such as debit cards or checks. The catch is that they often have high minimum deposit requirements.

For longer-term growth, consider these options

If you have money you won’t need at a moment’s notice, and you’d like to make it grow, the next factor to consider is your timeline. For funds you plan to use within about five to seven years, you may not want to invest in anything that could lose value, such as stocks. Fixed-income products are a good option here, and they include:

Certificates of deposit (CDs): These have a fixed interest rate and term. You must keep your money in the CD for the full term to avoid early withdrawal penalties. CDs are useful because they sometimes have higher interest rates than savings accounts, and you can lock in that interest rate, which protects you in the event that rates drop.Bonds: These are debt obligations you can buy to receive interest payments on a regular schedule. Government bonds, such as Treasuries, are the safest option. There are also corporate bonds issued by companies that want to raise money.

All of the above are good places to put money that you aren’t using for long-term investing. That includes your emergency fund and money you’re setting aside for any savings goals, such as a vacation or a down payment on a home. No matter how long you end up holding on to this money, it makes sense to earn as much interest on it as possible.

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It can be hard for recent college graduates to get approved for a credit card. Read on to see which type you might have more luck with. 

Navigating adulthood as a new college grad can be challenging. For one thing, working a full-time job can be an adjustment. And even if you lived in a dorm room or college house during your studies, it’s not the same thing as being responsible for a home you rent (even if your parents have to guarantee your rent for you to end up with a place to live).

Another challenge you might face after graduating college is getting a credit card. And the reason is simple.

Credit card companies don’t let just anyone borrow. They vet all applicants by checking their credit scores.

But as a new college graduate, you may not have a credit score or borrowing history. If you’ve never had bills in your own name, there’s no way to see how timely you’ve been with payments or how well you’ve managed your accounts. And so you may be denied a credit card by virtue of that.

Experian reports that an estimated 28 million Americans are credit invisible, while another 21 million are unscorable — meaning, they have some sort of bill-paying history, but not the type that can be used to calculate a credit score. And if you fall into a similar boat, there’s one credit card you should apply for that you’re more likely to get approved for.

It pays to get a secured credit card

With a traditional credit card, you’re given a line of credit you can make charges against. With a secured credit card, you’re given a spending limit, too, but that limit is secured by a deposit you put down when you open your account.

To put it another way, a secured credit card won’t actually give you more buying power. That’s because all you’re really doing is taking your own money and putting it down as a deposit, which will serve as your spending limit on your new card. To put it another way, a secured credit card is sort of like a debit card in that you’re basically limited to the funds you have in your checking account.

Now, you may be thinking, “Well, what’s the point of getting a secured credit card then?” And the answer is that it can help you build credit so you’re able to get a regular credit card in the future.

When you pay off your secured credit card in full and on time every month, that activity gets added to your credit record so you’re slowly but surely building a credit history. And the more of a history you have of timely payments, the more your credit score can build on itself and improve. That could, in turn, make it possible for you to not only get a credit card that gives you a separate credit limit outside of a deposit you put down, but also, rent an apartment, finance a car purchase, and do the many other things adults tend to need to do.

An important move to make

If you’re able to qualify for a regular credit card right out of college and are confident you’ll be able to manage it well without landing in debt, then by all means, apply for one. If not, get yourself a secured credit card. It may not do much for your spending power, but it could do a world of good for your credit score.

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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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