Money Management

Venmo now offers a payment account specifically for teens. Read on to learn more about it. 

What happened

Payment app Venmo has introduced a Venmo Teen Account for consumers aged 13 to 17. Teens with these accounts will be able to send and receive money the same way current Venmo users do. The Venmo Teen Account also comes with a debit card.

So what

As of 2022, almost 90 million U.S. consumers had a Venmo account. And the reason boils down to the convenience apps like Venmo offer.

Now, parents can set their teens up with a Venmo account to not only give them more financial freedom, but teach them about money management from a young age. Parents will have the ability to monitor transactions on their teens’ accounts, manage privacy settings, and send money to their teens.

“Venmo is a natural place for teens to learn how to engage with money responsibly, especially considering 86% of Gen Z are interested in using an app to learn about personal finance,” said Erika Sanchez, Vice President and General Manager, Venmo. “For parents or legal guardians, the Venmo Teen Account allows them to give some financial flexibility to their teens, while giving them parental controls and visibility into their teen’s spending habits.”

Now what

The Venmo Teen Account comes with no monthly fees and offers fee-free withdrawals at participating ATMs. Parents will be able to monitor up to five Venmo Teen Accounts from their personal Venmo accounts.

At first, the option to open a Venmo Teen Account might seem appealing. But it’s important to recognize that just as payments apps can lead adults to overspend, so too do teens risk falling into a similar trap.

Imagine you send your teen $100 on Venmo that’s supposed to be earmarked for back-to-school supplies. If your teen blows that money at the mall, they won’t have the items they need for school, and you might have limited recourse.

Now if your teen holds down a job, they might be able to use their own money to fund their Venmo account rather than rely on yours. But even then, they might fall into the trap of maintaining too high a Venmo balance when their money could instead be earning interest in a savings account.

If you’re going to open a Venmo Teen Account, set ground rules and spend the time teaching your teen how to use it. Explain the consequences of sending money to the wrong user (namely, that you may not get it back) and encourage your teen to keep their transactions private.

In fact, it’s a good idea to teach your teen safe banking practices in general. These include not accessing accounts on public Wi-Fi networks, using strong passwords, and monitoring accounts regularly.

Also, make sure your teen recognizes that a Venmo balance isn’t “found” or “free” money — it’s money that needs to be spent mindfully. Your teen should also monitor their Venmo balance and keep tabs on their spending, just as adults need to keep tabs on how much money they have in their own Venmo and checking accounts.

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My credit card comes with a hefty annual fee but there are good reasons I pay it, including the valuable perks that it offers me. Find out more. 

About a year ago, I signed up for a credit card that charges me a $450 annual fee. That’s a lot of money to pay just to become a cardholder. But, having this travel credit card is well worth it in my book.

Here are a few key reasons why I’m happy to send my card’s issuer this money in exchange for all of the benefits I receive.

1. I get airline lounge access

My card comes with access to the Admirals Club whenever I fly on American Airlines. If I didn’t have this benefit but wanted to access the airline lounge, I would need to pay $59 for a one-day pass. If I did this on both legs of a round-trip flight, that would be $118.

Of course, I don’t necessarily have to pay for lounge access. But, the lounge offers free meals. If I didn’t take advantage of this, I’d typically end up having to buy food for my family of four when we go on vacation. That adds up to around $40 per trip or more at airport prices when factoring in both food and drink.

At the lounge, we can eat as much as we want and enjoy plenty of non-alcohol drinks without limits. It ends up being a way better deal for us to pay the annual fee on the card and avoid having to buy meals — especially since we fly about once per month.

2. I get free checked bags

There are times when we fly and have to take a bag or two on our trip. On the airline we usually fly, the cost to bring a bag on a domestic flight is $30 for the first bag and $40 for the second. Again, this would add up quickly for our family since we travel a lot. Even if I had to pay the $30 checked bag fee on six flights per year, I’d end up paying $180.

Since checked bags are included thanks to my card, I don’t have to worry about paying this additional cost. This means that if there are times when I am on the fence about whether I have enough stuff to justify bringing an entire suitcase, I don’t have to think about it.

Rather than cramming a ton of stuff into a carry-on and having to lug it through the airport and hope I don’t have trouble finding overhead space, I can simply check my bag and not have to worry about it.

3. I can earn upgrades to first class

My card allows me to earn loyalty points, which accrue to help me earn special status. That comes with upgrades to the premium cabin or to better seats. Because we fly often, and we charge our tickets on our credit card and get bonus points for them, I’m always able to earn that special status each year. This means we have qualified for upgrades and have been moved either to first class or premium seats often at no extra cost.

All of these benefits make traveling easier and, surprisingly, cheaper for us — even after I take the $450 annual fee into account. For that reason, paying for it is an easy call.

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Have lingering debt? Read on to see why your tax refund could be a good way to get rid of it. 

Inflation has been a problem for U.S. consumers for roughly two years. And it’s forced a lot of people to rack up debt, from credit card balances to loan balances, just to stay afloat. It’s also resulted in many people falling behind on regular bills, like rent and car payments

It’s therefore not totally surprising to learn that 44% of Americans are planning to use their tax refunds to pay off debt or bills this year, according to a CNBC Your Money Financial Confidence Survey, conducted in partnership with Momentive. And if you have a refund coming your way, it pays to do the same.

Use your tax refund to shed your debt

As of May 5, the average tax refund issued by the IRS this season was $2,803. And if your refund is comparable, then chances are, you have a prime opportunity to get caught up on a number of bills or make a nice dent in your existing debt.

If you have multiple debts, it’s best to use your refund to chip away at your most expensive balance. So let’s say you owe $1,500 on a personal loan and $3,400 on a credit card. You may be inclined to pay off the personal loan first, since you’re looking at a smaller balance. But if your credit card is charging you 20% interest, and you locked in your personal loan at 7% interest, you’re going to save a lot more money by trimming your credit card balance.

Better your finances on a whole

Even though recent and current economic circumstances have forced a lot of consumers into debt, you may not actually have any. But in that case, you should still make a point to put your refund to good use.

For one thing, see how well you’re doing on emergency savings. If you don’t have enough cash in the bank to cover at least three full months of essential expenses, then it’s a good idea to stick your refund into your savings account.

Otherwise, if your emergency fund is nice and strong, consider putting your refund to work by investing it, whether in a brokerage account or an IRA. And if you already have plenty of money invested, think about the other ways that money could serve a longer-term need.

Maybe there’s a $1,200 online course that could make you a lot better at your job and set you up for a promotion. Your refund could potentially pay for it. Or, it could be money you use to attend a professional conference in another city that your employer doesn’t want to pay for but could help you expand your network of contacts.

All told, when a tax refund comes your way, it’s best to put that money to good use. If you have outstanding debt, then by all means, make paying it off a priority. But if that’s not the case, think about the different ways you can make the most of that IRS payday.

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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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The median sales price of a home has dropped slightly year over year, but has yet to fall significantly. Read on to learn why. 

If you’re waiting for a nationwide substantial drop in home prices, recent research by Redfin suggests you could be waiting for quite some time.

The U.S. median sale price has cooled off slightly — dropping 2.8% year over year in April — but a lack of newly listed homes for sale has created too much demand to bring prices down by a significant amount.

Redfin’s research found that nationwide 22.40% fewer homes were listed for sale in the four-week period ending on April 23, compared to the year before. Areas with the most significant drop in numbers for newly listed homes were Oakland (-43.3%), San Diego (-39.8%), Seattle (-39.6%), Sacramento (-39.2%), and Riverside, California (-38.2%).

This is unusual, considering that spring and summer are traditionally the busiest months for buyers and sellers. And while it seems buyers are still showing up to the party, sellers are the ones who appear reluctant to make a move.

Redfin speculates that high mortgage rates have discouraged sellers from listing their homes. Not only would they potentially forfeit a lower monthly mortgage payment by selling, but they would also be entering the home-buying fray and clamoring with the rest over the few homes for sale.

Those few sellers who have listed their home aren’t waiting long to get offers. According to Redfin, around 47% of homes that went under contract in the four-week period ending on April 23 had sold within two weeks.

Fewer homes for sale means buyers are neck and neck in competition for what’s out there, and the multiple offers on newly listed homes are also keeping prices from dropping significantly. In fact, around 30% of homes in the same four-week period sold above their listing price, the highest percentage in six months.

Should you buy a home now or wait?

All things considered, the decision to buy a home doesn’t always align with the most favorable market conditions. If your finances are in order — you’ve saved a down payment or gotten pre-approved for a mortgage — now might be the right time to buy for you, regardless of macrotrends.

If buying a home isn’t urgent, however, waiting for different market conditions could prove beneficial, especially if it lets you save more down payment, improve your credit score, or pay off other debts. The median sales prices has trended downward, and the Fed has indicated it might be willing to pause interest rate hikes in 2023, which would be a first step toward eventually reversing course.

All in all, if the time doesn’t feel right for you to buy a home, go with your gut — a home is a big financial commitment and should only be pursued when you’re ready. In the meantime, set up a high-yield savings account to capture high interest rates and help your down payment keep pace with inflation. You could also lock in today’s rate with a certificate of deposit (CD), which might be savvy if you don’t plan to buy a home within the next three months.

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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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