Money Management

Need to get or replace a car? Read on to see how to decide between a new and used one. 

You may be at a point where you need to buy a car — either for the first time or to replace an older vehicle that’s no longer running as it should be. And if so, you have a choice. You could buy a new car, or save some money by buying a used car.

As of March 2023, new car prices were up 6.1% year over year, according to that month’s Consumer Price Index. Used car prices, on the other hand, were down 11.2%.

Of course, the upside of buying a new car is getting neat features, having a vehicle in prime condition, and not needing to worry about major repairs during your first few years on the road. But should you spring for a new car right now? Ask yourself these questions to find out.

1. What car payment can I afford?

A good 15.7% of consumers who financed a new vehicle during the final quarter of 2022 took on a monthly car payment of $1,000 or more, according to Edmunds. Based on today’s car prices and borrowing rates for auto loans, you might easily be looking at a monthly payment that high if you opt for a new vehicle.

You’ll need to take a deep dive into your budget and make sure that sort of payment is affordable. If not, a used car may be a better bet, since it will likely result in smaller monthly car payments.

2. How much do I drive?

If you can afford the cost of a new car, you may decide to treat yourself to one if a car is something you use on a regular daily basis. But if you mostly work from home and only take a car out for occasional trips or errands, then it may not be worth it to spend the money on a new vehicle when a used one will suffice.

3. How will this impact my insurance costs?

You might assume that buying a used car will result in higher auto insurance premiums because that car might not be in as good shape as a new one. But actually, a big factor that goes into calculating the cost of auto insurance is what your car and its components are worth. Since a new car is apt to be worth more than a used one, buying new could mean spending more to insure your vehicle.

Also, a perk of buying a new car is getting updated features. However, some of those features might cost more to replace if they’re damaged. So that, too, will impact the amount of money you’re quoted for car insurance.

What’s the right call?

It’s easy to see why buying a new car might appeal to you more so than a used one. But before you make the call, run the numbers to see how a new car purchase will affect your finances. You may decide that while you’d prefer to drive around town in a new vehicle, you’re willing to settle for a used one because it makes the most financial sense.

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A seasoned attorney could save you money in the course of buying a home. Read on to learn more. 

In the context of buying a home, you’ll often hear people discuss the importance of hiring the right real estate agent. You’ll also generally hear that it’s a good idea to shop around with different mortgage lenders.

But as essential as these moves are, it’s just as important to find a good real estate lawyer when you’re in the process of buying a home. Here’s why.

A good real estate lawyer could save you money

You don’t need a real estate lawyer to make an offer on a home. You can do that through a real estate agent, and in some cases, just do it yourself directly.

Rather, you need a real estate lawyer to review any home purchase contract you’re signing. That’s because you’ll want that contract set up in a way that protects you financially.

Let’s say you’re buying a home that ends up having issues that don’t become evident until it undergoes a home inspection. If your purchase contract contains a home inspection contingency clause, you’ll generally have the right to back out of that purchase without penalty if a problem is revealed. Without that clause, you’ll risk losing the deposit you put down on your home if you no longer want to buy it due to issues uncovered during an inspection.

It’s also extremely important to get a good real estate lawyer if you’re buying new construction. Generally, in these situations, your builder will present a contract that very much works in their favor. A real estate lawyer can negotiate aspects of that contract that include what compensation you’re entitled to if your build is delayed and what allowances you’re eligible for (meaning, what your builder is required to provide as part of your new home build and what money you’ll get back for providing certain things, like appliances, yourself).

It’s also common for new construction contracts to contain an escalation clause. These clauses allow builders to pass higher costs they incur during the construction process onto buyers. A good lawyer might be able to negotiate that number down so you don’t wind up getting stuck having to pay a lot more for your home.

How much will a good real estate lawyer cost?

Real estate service Clever says you can expect to pay between $150 and $350 an hour for a real estate lawyer. However, many attorneys charge a flat fee for home purchase contracts and closings, so it pays to shop around in your area and see what the going rate is.

If you’re using a real estate agent to buy your home, they might also be able to recommend a good real estate lawyer to deal with the legal side of things. And you may even be able to snag a discounted rate in that situation due to that referral.

All told, you should know that when it comes to buying a home, your real estate agent can’t take the place of an actual real estate lawyer. And while you might have to shell out some money for an attorney, what you gain financially could more than make up for that cost.

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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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Staying with the same employer may feel comfortable, but are there disadvantages? Find out how staying in your current job too long can hurt your finances. 

When you work for a company you like, staying long term can be tempting. After all, you understand how the business operates, are comfortable with your coworkers, and know how to do your job well. But there are also some financial disadvantages to consider. If you hope to continue increasing your income, you may want to reconsider staying at your current job for a long time and instead prioritize getting a new job with higher income potential.

It can be hard to increase your income

If your goal is to increase your income to prioritize your personal finance goals, it’s worthwhile to consider whether your current job will continue to meet your income needs. As you gain more experience in your career, you’ll likely want to make more money.

But staying in the same role can impact your ability to increase your income — which impacts your checking account balance. According to Indeed, salary increases and bonuses may stagnate the longer you stay with an employer. Plus, not every employer offers salary increases or bonuses; even if your employer does, the increases may be minimal.

The ADP March 2023 Pay Insights Report shows that job changers had the most success achieving wage growth. For workers who stayed in their jobs, year-over-year median gains were 6.9%. However, the median pay growth for workers who changed jobs was 14.2%.

What about taking on a new role with the same organization? Limited promotion opportunities may be available within your current company. If limited positions exist, meeting your new income goals could be challenging if you stay with your current employer.

Tips to boost your income potential

If you feel like your chances of making more money at your job are minimal, it may be time for a new strategy. Here are some steps you can take to increase your chances of boosting your income potential as you continue to work your current job:

Ask for more money: If your employer hasn’t offered you a raise recently, you can ask for one. But make sure you do thorough research and come prepared for the conversation. Before you ask for a raise, research salary tends and be able to explain the ways you add value to the company.Learn new skills: Learning new skills is never a bad idea. Whether you take on new responsibilities in your current role or explore a new side hustle in your free time, learning new skills can make yourself more marketable to future employers.Stay alert for internal opportunities: If you feel stuck in your current role, but have yet to land a new job, consider internal opportunities that may arise. You may be able to gain more experience and boost your income by taking on a new role with your employer.Apply for jobs with other companies: You may be able to increase your salary by getting a new job with a new employer. There are other opportunities out there, and some come with a higher paycheck. Research salary data and brush up on your negotiation skills so you’re prepared for when you’re offered a new job.

Don’t give up on your financial goals

If you’re unsatisfied with your current salary, don’t let your disappointment get you down and don’t give up on your financial goals. Your current situation isn’t forever. If your current job hinders your ability to reach your financial goals, you might consider seeking other work opportunities that offer better pay.

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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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You’ve built your emergency fund. Good job! Now read on to see how to best manage your cash reserves, and what pitfalls to avoid. 

You’ll often hear that it’s really important to have an emergency fund at all times. A recent SecureSave survey, however, found that 67% of Americans don’t have a robust enough emergency fund to cover an unplanned $400 expense.

If you have a decent chunk of money sitting in your savings account, good for you. Building an emergency fund is not an easy thing to do, especially when you’re juggling a host of bills, from mortgage payments to groceries. But now that you have that emergency fund, it’s important to manage it wisely. And that means avoiding these three pitfalls.

1. Not saving enough

Some people put a random amount of money into their emergency funds and think they’re set. So let’s say you’ve managed to save up $10,000. You might assume you’re in great shape, since that’s a lot of money.

But one thing you should realize is that your emergency fund needs to be based on your personal spending. And it should contain enough money to cover at least three full months’ worth of essential expenses.

The logic there is that if you were to lose your job, it could easily take three months to get hired elsewhere. And having a three-month emergency fund could be your ticket to avoiding debt.

If you’re sitting on $10,000 in savings, you ought to be proud of yourself for accumulating that much cash. But if you typically spend $5,000 a month on essential bills, then a $10,000 emergency fund is shy of where you would ideally want to be. And so in that case, you should do your best to boost your cash reserves as much as you can to reach that three-month mark.

2. Taking withdrawals for non-essential bills

Your emergency fund isn’t just there to get you through a period of unemployment. It’s also money you can tap when an unplanned bill arises that you can’t put off, like having to fix an issue with your car.

But while it’s definitely okay to raid your emergency fund for things like home and auto repairs, you don’t want to touch that money for things like a last-minute concert invite or weekend getaway. If you don’t have an opportunity to save for those things in advance because they’re presented to you at the last minute, pass on them. You shouldn’t be tapping your emergency fund for non-emergencies, because if you do, you might end up short on money when a more serious situation arises.

3. Not replenishing your cash reserves after taking withdrawals

The whole purpose of having an emergency fund is to be able to dip in when unexpected expenses pop up. But don’t just take withdrawals from your savings and leave it at that. Rather, aim to replenish your withdrawals as you go to ensure that you have enough money in that account when you need it.

This isn’t to say that if you take a $400 withdrawal to pay for a car repair today, that you’re expected to have that money put back within a week. It might take several weeks or months to replenish a withdrawal of that size. The key is to do your best to get that money back into your account as soon as you reasonably can.

It’s a great and important thing to have an emergency fund, but do your best to avoid these blunders. That way, you can truly get the peace of mind you deserve.

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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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