Money Management

High gas prices mean road trips can be costlier than you think. Try these tips for saving on fuel to make your next road trip more affordable. 

While taking a family road trip isn’t quite the cheap vacation it used to be, it can still be far cheaper to drive than to fly for many families. Beyond that, a good road trip can be an adventure in and of itself. (Insert journey versus destination metaphor here.)

What’s more, there are plenty of ways you can cut costs on your road trip to get it closer to that affordable ideal of yesteryear. Since gas is one of the largest expenses, let’s take a look at some ways to save on fuel costs.

1. Use rewards credit cards

Though I’m obviously biased, rewards credit cards are my favorite way to save on gas. Many of my favorite rewards credit cards have bonus categories for gas purchases. You can easily get back 3% to 5% of your gas purchases with the right card.

Don’t be lured in by the co-branded gas station credit cards, though. They don’t provide as much return as even a mid-tier rewards card. They can also be closed-loop, meaning you can only use them with that brand of gas station.

2. Download gas station apps

Although you should avoid co-branded gas station credit cards, the gas station branded mobile apps are actually worth a look. Many of them provide regular discounts on gas, usually $0.10 or $0.15 per gallon. Some even make paying more convenient, as you can add your gas rewards card to the app and pay through your phone.

3. Be strategic about where you fill up

Gas prices are one of those things that can fluctuate significantly from place to place. And we’re not just talking about crossing state lines. You could save $0.10 a gallon by driving three blocks over in some cases. While it wouldn’t be worth driving 30 miles out of your way — you’d spend more on the gas to get there than you’d save — it could be worth waiting until the next highway exit.

So, how do you know whether to fill up or wait? There’s an app for that. GasBuddy (and similar apps) shows you the prices at gas stations near you with handy little maps.

4. Get a tune up before you leave

Your vehicle has a lot of moving parts. When those parts aren’t in peak condition, it’s going to reduce their efficiency. An inefficient vehicle burns more fuel for the same results.

In other words, have your car serviced before you hit the road. Have your oil changed, your air filters checked, and your tires balanced and rotated. Check your tire pressure while you’re at it. Not only will you help your overall gas mileage, but you’ll also help ensure your vehicle doesn’t quit halfway through your trip.

5. Find your inner zen

Aggressive driving is bad for your gas mileage. In fact, it can reduce your gas mileage by as much as 40%. When we’re talking about hundreds, if not thousands, of miles on the road — well, even 10% can add up quickly. So, don’t speed aggressively, accelerate too rapidly, tailgate so you have to ride your brakes — and so on. Pick your lane, set the cruise control for the speed limit, and just relax. (I recommend picking up a good audiobook or two, as well.)

6. Pack light

How you pack your vehicle can have a big impact on your gas mileage. For one thing, a heavier vehicle takes more power to move. That means burning more fuel. And the problem gets even worse if you’re storing all that extra luggage in a cargo rack or trailer. Both can reduce aerodynamic efficiency (i.e., create wind resistance) which will increase the amount of fuel you burn.

7. Keep it moving

Your vehicle is most efficient when it’s moving. Idling burns fuel without actually getting you anywhere. (That’s right, your car hates traffic as much as you do.) When possible, avoid situations where you’re sitting in your running vehicle.

For example, if you park for a cat nap at a rest station, it’s probably best to turn off your vehicle than to leave it idling for those 20 minutes. Similarly, if your map app tells you there’s bumper-to-bumper traffic ahead on the highway, consider a more scenic detour that keeps you moving (if it won’t add significant mileage onto your trip).

The multi-pronged approach

As you can see, there are myriad ways you can cut down on how much gas you use and how much you pay for that gas. Ideally, you can use multiple — or even all — of the tips on this list to seriously reduce your road trip fuel costs.

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Economic conditions could worsen this year, so the more savings you have, the better. Read on to learn more. 

In March, the national unemployment rate was 3.5%, which is a fairly low level of joblessness. Plus, a good 236,000 jobs were added to the U.S. economy that month.

But things may not stay that rosy for much longer. In a recent report, Vanguard says it expects the national unemployment rate to rise to 4.5% to 5% by the end of 2023. That would clearly represent a notable increase from where we are today. And it’s also why now’s a really good time to add money to your savings account.

Make sure to boost your emergency fund

The combination of persistent rate hikes on the part of the Federal Reserve and the recent banking sector meltdown have the potential to drive the U.S. economy into a recession at some point in 2023. Now to be fair, this news shouldn’t come as a shock. Many financial experts spent the latter part of 2022 warning about an impending recession.

Those warnings, however, eased up earlier this year, and it’s only now, in the wake of banking industry woes, that they’ve picked up again. But still, the reality is that we’ve been at risk for a recession for quite some time. Borrowing has gotten expensive for consumers due to the aforementioned rate hikes. That means everything from credit card balances to personal loans is costing more.

In this sort of environment, consumers might easily decide they’ve had enough of sky-high borrowing costs and cut back on spending. That could be enough to fuel a recession, which could easily, in turn, lead to an uptick in unemployment levels.

That’s why it’s so important to give your emergency fund a boost if it could use one. You’ll want to make sure that at a minimum, you have enough money in savings to cover three full months of essential living expenses. If you don’t, start cutting your personal spending now and consider working a side job to bring your savings up to that point.

The reason it’s so important to be able to cover three months of bills is that if you were to lose your job, it might easily take that long to find another one — especially during a recession, when jobs may not exactly be plentiful. In fact, it’s a smart idea to save enough to cover a good six to 12 months of expenses if you have a family and a lot of financial responsibilities, such as a car payment and mortgage. But three months’ worth of bills should be the minimum you keep in savings.

How worried should workers be?

The idea of losing a job can be scary, so you might be nervous about yours being yanked away. The harsh reality is that a large number of Americans might very well lose their jobs at some point in 2023. And while growing your skills might spare you from getting laid off, that’s unfortunately not guaranteed, either. But if you have a fully loaded emergency fund, a layoff may not be as large a concern.

Sure, nobody wants to find themselves unemployed. But if you do your part to boost your savings, you’ll get the peace of mind that comes with knowing you’ll be able to pay your bills while you look for work.

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Building a house was fun, but it was time consuming and really expensive, so I likely won’t don’t it again. Read on to find out my reasoning. 

Building a house was one of the most fun experiences of my life. Many years ago, my husband and I couldn’t find anything we really loved that was for sale, so we opted not to buy an existing house but instead built our home. Despite really enjoying the building process, I don’t think I’ll ever build a home again. Here’s why.

1. The process was really time consuming

Building our first house took a ton of time. We had to find a builder, examine different floor plans and designs, and then wait for permits before the building process started. Once we did get underway, we spent endless hours visiting stores to find the right granite, lighting fixtures, and tile.

The entire process took about two years from start to finish, and we spent endless hours making design decisions during that process. We had the time to do it then because we didn’t have kids. Now, with two young children, it would be hard to devote the time to building.

2. There were a lot of added costs

One of the things we learned when building our first home was that there were a ton of surprise expenses that made our home pricier than we had anticipated and ultimately necessitated taking out a larger mortgage.

In some situations, decisions we made added costs. We opted for some upgraded lighting fixtures, for example. But, it wasn’t just our choices that increased our expenses; there were some that we had no option but to incur. For example, we had to pay more for a deeper well than we’d planned on because they couldn’t get enough water with the standard drilling process we’d budgeted for.

I would be a lot more wary about building now that I know all of the things that can go wrong. I’m not a huge fan of costly financial surprises, so it would be hard for me to sign up for that again.

3. There was a lot of uncertainty involved

Another big downside in the building process was the level of uncertainty involved. We had an idea of what the house would look like when it was done, obviously. But as we made countless decisions from what color to paint the walls to what door hinges we’d use, we had no idea if everything would turn out right.

We did end up ultimately loving the house we created. But with all of the stress, uncertainty, and time involved in getting to that point, it was undeniable at the end of the process that building a home was a ton more work than buying one.

This is why, for subsequent houses, we opted for pre-existing homes that we wanted to make our own. These homes have come with set prices, we were able to move in quickly, and we knew what they would look like since they were already built. For us, these benefits are worth giving up on building another home and opting to buy pre-built instead.

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You may be able to withdraw an offer on a home without penalty, even after it’s accepted. Read on to learn more. 

When you close on a mortgage loan, you’re generally required to put down some amount of money. This is known as your down payment.

But that’s not the only cash you might have to fork over when buying a home. When you make an offer on a home, you’re generally required to put down a deposit to let the seller know your offer is a serious one. This is often referred to as earnest money.

Earnest money typically amounts to 1% to 3% of the purchase price of a home, according to Rocket Mortgage. So if you’re buying a $400,000 home, you may need to offer up a deposit of $4,000 to $12,000. That money is then held in an escrow account and applied to your home purchase once your loan is finalized.

But the reason you need to pay it upfront is that once a seller accepts your offer, their home is taken off the market. If you were to back out, it could leave your seller in a jam.

What happens if you do decide to back out of a home purchase contract? Will you automatically have to forfeit your earnest money? The answer is, it really depends.

It’s all about your reasoning and contract

You may get cold feet about buying a home at some point after making an offer and decide to back out. Or you might find a different home that’s a better fit for you and back out for that reason.

In these situations, you generally risk losing your earnest money. A seller might, in that case, agree to give you your deposit back if they’re able to easily re-list their home and get a comparable offer, but they won’t be obligated to do so.

On the other hand, most home purchase contracts have a home inspection contingency clause that states that if issues are uncovered during the inspection, and the seller isn’t willing to address them, then the buyer has the right to back out of the purchase penalty-free. If your contract has this clause, you may be protected if you choose to withdraw your offer due to unforeseen problems with the home you’re buying.

Let’s say a home inspection reveals that the home you want to buy isn’t up to the current electrical code. That could not only be a costly issue to fix, but a dangerous one to deal with. If your seller isn’t willing or able to pay to have the home brought up to code, then you can generally back out of the deal and get your earnest money returned to you if your contract has a home inspection contingency written into it.

Make sure you’re committed before making an offer

While there are circumstances when you can get your deposit back after withdrawing an offer to purchase a home, you usually can’t get your money back due to simply changing your mind. So before you make an offer to buy a home, make certain the property in question is really the one you want. And also, get a good real estate lawyer to review your home purchase contract and ensure that it contains the protections you need.

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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.
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Retirement is much more comfortable when you’re financially secure. Learn how to retire on $100,000 a year with these moves. 

One of the most important parts of retirement planning is determining how much yearly income you’ll need. The rule of thumb is to aim for 80% of your annual income, but this can vary depending on how much you expect to spend.

If you’re a high earner, or you want to err on the side of caution, retiring on $100,000 a year is a good goal. As you’d expect, it requires a sizable nest egg to sustain that kind of income. Here’s a step-by-step guide on how to get there, plus some helpful advice from Daniella Flores, founder of the financial literacy site and community I Like To Dabble.

1. Figure out how much you need to save

The first step is setting a savings target to reach by the time you retire. This amount will need to be enough that you can withdraw $100,000 per year without running out of money.

While there are many calculations to estimate how much you need, a popular and simple option is the 4% rule. The idea behind it is that you can withdraw up to 4% of your money per year in retirement without running out, assuming you have that money in stocks and bonds. That’s because the returns on your investments will balance out the money you withdraw, at least historically speaking.

To determine how much money you need based on the 4% rule, multiply your desired yearly income by 25. Multiplying $100,000 by 25 gives us a total of $2.5 million.

However, if you receive Social Security benefits, that changes the math. The average Social Security retirement check was about $1,782 per month ($21,384 per year) as of February 2023, according to the Center on Budget and Policy Priorities. The maximum is $4,555 per month ($54,660 per year).

If you qualify for a $2,500 per month Social Security check, that’s $30,000 per year. You’d then only need enough saved to sustain withdrawals of $70,000 per year. Using the 4% rule, that brings your savings goal down to $1.75 million.

Want an idea of how much Social Security you’ll receive? The Social Security Administration has a tool you can use to get an estimate of your benefit amount on its Plan for Retirement page.

2. Invest at least 10% of your income

Investing regularly is the key to building your retirement savings, because it allows your money to grow. It’s easiest to demonstrate this with an example. Let’s say you earn $120,000 per year and are able to save 10% of that. If you don’t earn any sort of return on that money, then after a 40-year career, you’ll end up with $480,000.

Now let’s say you invest that money in a total stock market or S&P 500 index fund, and it averages 8% per year. That’s a reasonable return. Historically, the S&P 500, an index tracking 500 of the largest publicly traded companies on U.S. stock exchanges, has had an average annual return of about 10%.

After 40 years of investing, you’ll have $3,357,372. Investing your money made you nearly $2.9 million in compound interest.

Investing is much more effective the longer you do it. If you follow the same approach as above, but you invest for 20 years instead of 40, you’d end up with $593,075. So, if you’re getting started later in your career and have less time to invest, you’ll need to contribute more money to reach your goals. That could mean increasing your income, investing 20% or more of your income, or both of the above.

3. Use tax-advantaged retirement accounts

There are several types of retirement accounts that provide tax benefits over a standard brokerage account. They have yearly contribution limits, so it makes sense to prioritize investing through them first until you reach those limits. Here are the most well-known retirement account options:

401(k): A 401(k) is a retirement account offered through an employer. You can set up contributions to come directly from your paycheck, and these are tax-deductible the year you make them. The 401(k) contribution limit in 2023 is $22,500 if you’re under age 50 and $30,000 if you’re 50 or older.Individual retirement account (IRA): An IRA is an account that you open for yourself with a broker. Contributions are tax-deductible in the year you make them. The IRA contribution limit in 2023 is $6,500 if you’re under 50 and $7,500 if you’re 50 or older.Roth 401(k) and Roth IRA: Roth plans are variations on traditional 401(k)s and IRAs. Contributions to Roth plans aren’t tax-deductible in the year you make them, but withdrawals in retirement aren’t taxed.

So, if you’re 30 years old in 2023, you could contribute up to $22,500 to a 401(k) or a Roth 401(k). You could also contribute up to $6,500 to an IRA or a Roth IRA. Or, you can split contributions between traditional and Roth plans. For example, you could contribute $3,250 to a traditional IRA and $3,250 to a Roth IRA.

What if you’re able to max out those accounts, and you want to continue to invest? Flores notes, “With a side hustle, you would also have access to a SEP IRA and Solo 401(k). People who are only W-2 employees don’t have access to these.”

She also recommends looking into brokerage accounts. They don’t offer the tax savings of retirement accounts, but you can withdraw from them at any time. Retirement accounts have early withdrawal penalties, normally if you make withdrawals before age 59 1/2.

4. Increase your earnings every year

Even with Social Security, you need to save quite a bit of money to retire on $100,000 a year. You’re much more likely to manage it if you earn a high income, which is why you should try to increase your earnings every year. There are several ways to do this, so let’s look at a few of the best options.

Get into the habit of looking for new job opportunities. Although you can and should work toward raises and promotions, changing jobs tends to be how people make the biggest salary gains. In 2022, the average wage growth for workers who changed jobs was 7.5%, compared to 5.5% for workers who stayed at the same jobs, according to the Federal Reserve Bank of Atlanta.

Another good strategy is to find new sources of income for yourself. Flores recommends side hustles, which she says “can be a way to help increase your income without jeopardizing your current job.” Here are a few side hustle ideas that she suggests:

Pet sittingDelivery drivingFreelancingConsulting

There are also side hustles you can build to generate semi-passive or passive income. These are a great way to help reach your retirement income goals, too. If you’re able to make $2,000 per month in passive income, that’s $24,000 per year. Combined with Social Security, that means you won’t need as much saved in your retirement accounts to have a total income of $100,000 per year. Here are a few side hustles Flores recommends for making passive income:

Creating and selling digital productsBuilding an online platform and getting paid from ads and affiliatesInvesting in property to rent out on Airbnb, camping apps, and event space rental apps like Peerspace

5. Follow a spending plan

Your income plays a big part in how much you can save for retirement, but so do your spending habits. Making a lot of money isn’t enough. A whopping 50.8% of Americans who earn six figures are living paycheck to paycheck, according to a report by PYMNTS and Lending Club.

To manage your expenses, set up a monthly spending plan. This doesn’t need to be complicated. A simple, effective option is to assign portions of your income to regular monthly bills, investing and savings, and fun money. For example, you could aim to use 60% of your income for bills, 20% for investing and savings, and 20% for fun money. Budgeting apps are a good way to monitor your spending and stick to your plan.

That’s just one option, and you can adjust the numbers or the budgeting method so it works for your finances. What matters is that you have a spending plan with a portion of your income committed for your financial goals.

It’s not easy to retire on $100,000 a year, and whether it’s doable will depend on your financial situation. If you have an above-average income and you invest regularly, you have a good chance of success. Even if $100,000 a year is out of reach, the steps above will help you save more for retirement and have you as prepared as possible once you get there.

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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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