Money Management

A writer talks about a financial decision she and her husband made after their old dog passed. Read on to see what it was. 

When my old dog, Casey, passed away at 12 1/2 years old, it was both a terrible thing and a good thing. It was awful in the sense that our beloved dog was gone, but it was a good thing in that he actually passed peacefully in his own bed and didn’t have to be euthanized. He also didn’t suffer at the end of his life for weeks or months.

In fact, while Casey’s death came as a shock to us, it shouldn’t have. His health had been declining for a long time, and despite our vigilance in treating his diabetes, we still struggled to regulate him. Between that, other health problems, and old age, it seemed like his body had decided he was just ready to go.

Now, I can admit that I was a mess in the weeks following Casey’s passing. My husband was no doubt a wreck, too, though he perhaps managed to hold it together better than I did.

Once we were in a slightly better place, we made a plan for getting a new dog. We decided we’d wait a year or two until our kids, who were toddlers at the time, were a little older. We also decided to build an emergency fund for our future pet knowing what Casey’s various health issues had cost us.

A move that really paid off

My husband and I made a mistake in the course of owning Casey — we didn’t sign him up for pet insurance. Our logic was that he was a fairly healthy dog (until he wasn’t), and we figured that instead of paying a pet insurance premium every month, we’d instead take that money and put it into our savings account so we’d have cash reserves to tap in the event of healthcare bills.

Of course, when Casey developed a host of issues that included not just diabetes, but kidney stones, too, we regretted that decision. But thankfully, we’d been vigilant about contributing to a pet emergency fund all those years we weren’t paying for pet insurance, so we had enough money in savings to cover his medical costs without having to worry about landing in debt.

After he passed away, we decided to build an emergency fund for a future dog of ours. Just as money didn’t have to influence our decisions when it came to Casey’s care because we had it, so too did we want to be able to pay for whatever care our future dog would need.

Meanwhile, we did adopt another dog named Champ a little more than 2.5 years ago, and lo and behold, he had some health issues right away — before we’d had a chance to put pet insurance in place. But thankfully, we had our pet emergency fund to dip into to cover our costs. And we’ve since gotten pet insurance for Champ.

Our policy won’t cover the pre-existing condition we now know he has. But we have coverage for other issues we hope won’t arise but could.

An essential move for any pet owner

Even if you plan to buy pet insurance or have a policy already, it’s important to have money in savings to cover medical care for your pet. Remember, even with insurance, you often need to pay for your pet’s care upfront and wait to get reimbursed. So it’s important to have some cash reserves to fall back on so you don’t rack up debt.

To this day, I still miss Casey and his stubborn, quirky ways. But I’m happy we had many good years with him before his health deteriorated. And I’m also happy that my husband and I took the right financial steps to prepare to welcome a new dog into our family.

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Asian American and Pacific Islander (AAPI) women earn $0.80 for every $1 earned by white men. Read on to learn how the wage gap varies even more across ethnicities. 

The racial wage gap is an ongoing issue that has been plaguing American society for decades. As we strive to achieve equality and fair treatment for all individuals, it’s important to address these disparities and understand how they impact different communities. Due to the racial wage gap that affects Asian American and Pacific Islander (AAPI) women, they could lose out on more than $1 million in earnings over their lifetime, significantly impacting their savings account balances.

The large racial wage gap varies

May is Asian Pacific American Heritage Month, which celebrates the culture, traditions, and history of Asian Americans and Pacific Islanders in the U.S. April 5th also marked Equal Pay Day for Asian American, Native Hawaiian, and Pacific Islander women.

This date symbolizes how far into the year women must work to earn what men earned in the previous year. When we think about the gender pay gap, the first thing that comes to mind is typically the disparity between the wages earned by men and women. However, it’s important to note that this issue isn’t just about gender; it’s about race as well. According to research conducted by The National Asian Pacific American Women’s Forum, AAPI women earn $0.80 for every $1 earned by white men. This means that AAPI women are losing out on a significant amount of money over the course of their careers.

Delving deeper into the numbers

This number doesn’t show the full picture. Some communities, like Southeast Asian, Native Hawaiian, and Pacific Islander women experience significant wage gaps. For example, Taiwanese women earn $1.08 for every dollar earned by a white man, while Nepalese women only earn $0.48 for that same dollar. Here is a breakdown based on ethnic subgroups:

The AAPI community is diverse and spans across many continents and oceans. Unfortunately, the AAPI umbrella term misses the unique experiences of these specific ethnic subgroups in the U.S. Despite Taiwanese and Indian women earning more than their white male counterparts, the wage gap for 23 out of 25 ethnic subgroups drops significantly to 48% to 85% of every dollar paid to their white, non-Hispanic male counterparts.

Discrimination is a major factor

One of the main factors contributing to the racial wage gap is discrimination. AAPI women face discrimination in a variety of ways, from being denied opportunities for advancement to being paid less than their male and white counterparts for doing the same job. This discrimination can be subtle or overt, but regardless of how it manifests, the result is the same: AAPI women are being paid less than they deserve.

The “model minority” myth

As Sung Yeon Choimorrow (Executive Director of the National Asian Pacific American Women’s Forum) stated, “when we examine wages using disaggregated data, we find that it upends the dangerous ‘model minority’ myth and the false idea that all Asian Americans are high-achieving immigrants and from financially prosperous communities.”

The “model minority” myth suggests that all AAPI individuals are successful, which can lead to the false assumption that they don’t need as much support or resources as other communities. This can result in AAPI women being overlooked for promotions or opportunities for which they are just as qualified as their white or male colleagues. It can also create a culture of silence, where AAPI women feel that they can’t speak up about the discrimination they are experiencing because they don’t want to be seen as “rocking the boat.”

Losing $1,200,000 in a lifetime

The racial wage gap has lasting consequences for AAPI women. According to a study by the National Women’s Law Center (NWLC), AAPI women working full time stand to lose $1,200,000 over the course of a 40-year career, on average. Due to the wide differences between subgroups, the amount is as high as $1.25 million. Using the NWLC’s calculations, Burmese women stand to lose $1.2 million and Bangladeshi and Nepalese women will lose about $1.25 million over their lifetime.

This has a ripple effect on their financial stability, their retirement savings, and their overall quality of life. It also has implications for their families and communities, as they may not be able to provide the same level of support or financial security as they would if they were paid what they deserved. In addition, it impacts future generations and their inheritance.

The racial wage gap is a complex issue that needs to be addressed on multiple levels. It requires changes in policy, shifts in cultural attitudes, and individual action. As we continue to work towards creating a more equitable society, it’s important that we pay attention to the unique challenges faced by different communities, including AAPI women. By acknowledging the impact of the racial wage gap on their lives and taking steps to address it, we can create a more just and equal society for everyone.

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Are you a new parent, or will become one soon? Here’s how it could affect your taxes. 

Any parent can tell you that raising a child isn’t cheap. In fact, new parents can expect the cost of raising a single child to be between $15,438 and $17,375 annually as of 2022, according to the USDA. Fortunately, there are several lucrative tax breaks available to parents to help offset these costs, and they can potentially add thousands of dollars to your refund when you file taxes every year.

Child Tax Credit

The most common tax break for parents is the Child Tax Credit, which provides as much as $2,000 for every qualifying child you claim as a dependent on your tax return. Plus, as much as $1,500 of the credit is refundable, meaning you can get it even if you don’t have any federal income tax liability for the year.

In order to claim the full credit, your modified adjusted gross income (MAGI) cannot be greater than $200,000 for the year ($400,000 if you file a joint tax return). If your income is greater than these thresholds, the credit is reduced by $50 for every $1,000 in income above the applicable limit. In addition to the income restriction, the child needs to meet certain criteria.

First, the child has to be under age 17 at the end of the year. For example, if your child turned 17 in November 2022, you can’t claim the Child Tax Credit for them on the return you filed in 2023. They must be your child, stepchild, foster child, or another type of qualifying relative. And, they must have lived with you for more than half the year and provided no more than half of their own financial support.

Child and Dependent Care Credit

If your children are in daycare so you can work, there’s an additional tax credit you may qualify for. The Child and Dependent Care Credit.

The amount of the credit depends on your income but is worth 20%-35% of as much as $3,000 in qualifying expenses for one dependent or $6,000 in expenses for two or more. So, the most you can get is $1,050 if you have one eligible dependent or $2,100 if you have two or more. And unlike the Child Tax Credit, this one is nonrefundable.

In order to qualify, the expenses must have been paid for care for a child under 13 or for a dependent who meets certain other criteria. Eligible expenses include (but are not necessarily limited to), preschool or nursery school, before- and after-school care programs, a private caregiver (such as a nanny), and summer day camp programs.

Finally, in order to claim the Child and Dependent Care Credit, you (and your spouse, if filing jointly) must work or be full-time students.

Earned Income Tax Credit (EITC)

Technically, the Earned Income Tax Credit, or EITC, isn’t just a tax break for parents. But the credit can be far more lucrative for people with children. For example, in 2022 the credit was worth up to $560 for qualifying taxpayers with no children, or as much as $6,935 for parents.

The credit is refundable but is only available to low-to-moderate earners, and the income thresholds depend on your filing status and how many dependents you have. Just as one example, a married couple filing jointly with one child must have adjusted gross income (AGI) of $53,210 or less in 2023 to qualify for the credit.

College savings contributions

You can start contributing to a 529 Savings Plan to set aside money for your child’s education as soon as they are born. While your 529 contributions won’t do anything for your federal tax refund, these plans are administered by the states, and many states offer a deduction on your state tax return for contributing.

It’s also worth mentioning that although they won’t help new parents, there are some excellent tax credits that can help when you eventually pay tuition or other qualifying expenses for your children. For example, the American Opportunity Credit can reduce your tax bill (or increase your refund) by as much as $2,500 per year for as many as four years per child.

It costs a lot to raise a child

The bottom line is that there are several potentially lucrative tax breaks available for parents, and these could dramatically increase your tax refund. The Child Tax Credit alone could increase your tax refund by $2,000 every year, and if you have child care expenses or qualify for the EITC, your refund could increase even more.

However, it’s important to realize that these are designed to offset the costs of raising a child. For millions of families in the United States, these tax breaks can provide some much-needed relief.

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A neighborhood with amenities may sound nice, but you have to pay for their upkeep. Will the extra costs actually be worth it? Here’s how to tell. 

When you’re considering buying a house, there’s a lot to think about. Obviously, you need to make sure you can afford your mortgage and that your neighborhood is in a convenient location. You also need to decide what kind of neighborhood you want to buy into.

Different locations offer a wide variety of features, with some homes offering special amenities like community pools, playgrounds, and golf courses. If you are thinking about purchasing your place in a neighborhood with amenities like these, there are some questions you should ask yourself first.

1. What is the cost of these amenities?

Nothing in life is free, and that applies to amenities in your neighborhood as well. If your neighborhood offers anything special, whether it’s a park, playground, or pool, it has to be paid for. There’s installation, maintenance, upkeep, and repairs to consider — and this comes out of the pockets of people living in the neighborhood.

Generally, neighborhoods with amenities have homeowners associations that collect the fees used to pay for all of the different features they’re offering to homeowners. So, be sure to pay attention to exactly what fees you will owe each month.

You should also learn the rules for when and how the HOA can impose added fees or special assessments to make major repairs or upgrades. If there’s a problem with a shared community pool, for example, would everyone in the neighborhood be forced to send thousands of dollars in extra funds to the HOA to fix it?

2. How often will you use them?

Having a bunch of amenities may sound nice, but consider whether your lifestyle would realistically lend to using them. If you hate to go out in the heat, for example, is it really worth buying into a Florida neighborhood with walking trails you’re unlikely to ever use due to the warm weather most of the year?

If you aren’t going to regularly use the features the neighborhood has to offer, then it may not make sense for you to buy in the area and to incur the added costs. These costs include the HOA fees mentioned above, of course, but property values themselves may be higher due to the amenities, so you could also end up paying an inflated price for your house for community amenities you don’t use.

3. Who will be responsible for maintaining them?

Finally, it’s important to understand how the different amenities are maintained. In most cases, the HOA board will be in charge of doing this. But, some HOA boards are better than others. If the people in charge in your neighborhood mismanage things, the amenities could fall into disrepair and not be usable — or you could get hit with a special assessment to fix problems the HOA allowed to develop.

Be sure to learn as much as you can about how the neighborhood is maintained and whether residents have complaints, before you get a mortgage loan for a home that comes not just with costly amenities, but with a host of problems as well.

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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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Credit cards with annual fees are the first to go when budgets get tight. But should your hotel card be on the chopping block? Consider these points. 

The most common piece of advice I offer to folks asking about their credit cards is to regularly audit your cards to ensure you’re getting the most bang for your buck. This can be especially important when you’re talking about travel credit cards, as most of them have annual fees.

For example, most hotel credit cards worth getting have fees of at least $95 — and some can be over $400 a year. With such a high out-of-pocket cost, it makes sense to wonder if the cards are worth keeping (or getting).

The answer will depend a lot on how much — and where — you plan to travel this summer. But if you’re taking at least one or two trips this year, it could be worth having a hotel credit card in your wallet.

Elite status can be surprisingly valuable

The most immediately useful perk of most hotel credit cards is the elite status many convey. Complimentary status can propel you up the elite tiers, unlocking exclusive benefits.

Sure, the less-expensive cards only give you mid-tier status, at best, but even that can be valuable if you can get upgrades or extra points. And if you have a card that comes with higher-tier status, then the perks can get seriously valuable.

For example, some programs give free breakfast to elite members (this is usually some sort of food and beverage credit these days). And the higher you are up on the food chain, the better your upgrades will be. (The first time your regular room is upgraded to a suite is an awesome experience!)

Free night certs and credits

As nice as elite status is, it can be hard to eek enough value out of it to actually make the annual fee worth it on status alone. But, thankfully, elite status is rarely the only perk you get with a hotel card.

The best hotel credit cards also convey annual free night certificates every year after your cardmember anniversary. These certificates can be redeemed for a free night at any eligible property. While these certs are rarely without limits — most have a points-equivalent cap (e.g., only good on rooms up to 40,000 points) — but they still provide a ton of versatility and a good value proposition.

Don’t forget about the statement credits, either. The most expensive hotel cards help make up for their fees by offering statement credits for on-property purchases or other travel-related expenses. If you can maximize the free night certificates and credits, most of these cards pay for themselves.

Points accrual acceleration

Another big perk of hotel cards that can be often overlooked is the boost to how many points you can earn. Hotel cards tend to offer a bonus category for brand purchases, and these bonuses can be huge. We’re talking about 5X, 10X, or even 14X points per dollar huge.

On top of the card bonus, don’t forget about that elite status. The better your status is, the more points you’ll earn per dollar spent, no matter which card you use. Faster points accrual means you’ll be that much closer to earning free nights.

Outlook is positive

Before you get — or decide to keep — a costly hotel card, you need to do the math for yourself. Will the card pay for itself this summer, or at least this year? The answer may be “yes” more often than you think.

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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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