Money Management

I’ve decided to spend more money on vacations when my kids are little before our summer is filled up with other activities. Here’s why. 

This summer, I’m planning to spend three times as much on vacations as I did last year. My family will be heading out on vacation several times per month, and I expect my bank account to take a big hit.

Here’s why I’m absolutely OK with breaking out the credit cards to spend a small fortune on summer travel.

I want to take advantage of the opportunity to travel while my kids are at good ages

The single biggest reason why I decided to dramatically increase my travel spending this year is that my kids are at a perfect age to travel with.

My son will be almost 4 years old and my daughter will be about 15 months old this summer. These are really fun ages, as my son is getting past his difficult “threenager” stage where he is defiant all the time, and my daughter is old enough to be mobile, to explore, and to be interested in doing activities.

My kids are also not old enough that they’re involved in summer sports or other activities that would prevent us from being able to take them on vacation with us. And, obviously, they still want to travel with us since they’re at those magical ages where playing with Mom and Dad is their favorite activity.

Since we’re at these ideal ages, I want to take tons of fun family trips to the beach and amusement parks to make core memories for them and for us. I don’t mind spending the extra money to do this since I know one day soon we’ll be busy with other activities as they get older and we may not be able to go away as much as we can this year.

I budgeted for the costs associated with my trips

Tripling my vacation spending and taking tons of vacations this year will obviously mean I have to make some changes to my budget in order to afford all of the trips we’re going on. I don’t want to go into debt in order to go on vacation, so I have made plans throughout the year to ensure I don’t have to.

Since I knew I wanted to spend a lot more on vacations this summer, I made cuts during the winter months and spent less on things that were not as important to me. We basically gave up eating out while we were at home so we could save that money for vacations since I value taking trips with my kids more than going to restaurants.

I also took steps to increase my income over the course of the year so I could save a lot of extra cash for summer vacations. And I both opened a dedicated savings account and booked and prepaid for many trips so I wouldn’t have to come up with the money all at once when we started traveling.

Since I prepared throughout the year, I can afford to triple my spending without financial worries, meaning we can take our vacations guilt-free.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2024

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

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.

 Read More 

Looking to move? Read on to see if you’re still on the hook for your mortgage. 

Many people sign a mortgage with the intent to pay it off over 30 years. But a lot can change in three decades. There may come a point when you feel you’re ready to move, whether for a job or a change of scenery. And you may want to move to a new home before your mortgage is paid off in full.

But one thing you should know about a mortgage is that you’re obligated to pay it until your loan balance gets down to $0. So regardless of whether you’ve moved or not, if your mortgage isn’t paid off, you need to keep making payments until you no longer have an outstanding balance.

When you want to move mid-mortgage

Just because you’ve taken out a 30-year mortgage doesn’t mean you’re obligated to stay in your home for 30 years; you’re free to move at any point. But the balance on that mortgage remains your financial obligation until it’s whittled down completely.

Now, it’s common for people who want to move mid-mortgage to simply sell their homes and use the proceeds from a sale to pay off their loan balances in full. So that’s a route you could look to pursue.

Another option may be to move out of your home but keep it and rent it out. You may want to do this if your home has lost value since you bought it and you don’t think you can sell it at a high enough price to cover your remaining mortgage balance in full. First, though, you should check your mortgage paperwork or even contact your mortgage lender to see if renting out your home is allowed while you still have a mortgage.

You’ll also want to make sure you’re able to collect enough money in rent to keep up with those loan payments, not to mention your other housing costs associated with that home, like property taxes.

You should also know that if you decide to move to a new home, you’ll need to apply for a new mortgage on it if you can’t cover its cost in cash. You can’t transfer an existing mortgage from one home to another.

Not paying your mortgage could have consequences

When you stop paying your mortgage, a number of bad things could happen. For one thing, even a single missed payment could have a negative impact on your credit score. From there, it could become very difficult to borrow money when you need to.

What’s more, if you stop paying your mortgage altogether, your lender could eventually force the sale of your home to get paid what it’s owed via a process called foreclosure. When that happens, you lose the right to your home and your credit score sustains severe damage. So if you’re looking to move and not sell your home, you should absolutely make a plan to continue paying your mortgage.

When you sign a loan for any reason, you’re generally required to pay it back. You might, for example, borrow money to go to college but not finish your degree. But that doesn’t let you off the hook for the money you’ve already borrowed. Similarly, when you sign a mortgage, you’re making a commitment to repay the sum you’ve borrowed.

Our picks for the best credit cards

Our experts vetted the most popular offers to land on the select picks that are worthy of a spot in your wallet. These best-in-class cards pack in rich perks, such as big sign-up bonuses, long 0% intro APR offers, and robust rewards. Get started today with our recommended credit cards.

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.

 Read More 

Sometimes people forget to make their credit card payments on time. Learn what to expect and how to handle it if you’re late on your credit card payment. 

It’s always recommended to pay your bills on time, and that includes your credit card bill. But sometimes it slips your mind, and you realize with a sinking feeling that you were supposed to make your payment days ago.

The good news is that there’s usually nothing to worry about, especially if this is your first time being late on your credit card payment. Still, it helps to know what’s going to happen in this situation and how you can best manage it with your credit cards.

The card issuer charges you a late fee, but you may be able to get it waived

When you’re late on your credit card payment, the card issuer charges a late fee. This happens even if you were just one day late, and late fees aren’t cheap. Credit card companies can legally charge a fee of up to $30 for your first late payment and up to $41 for each subsequent late payment.

If you haven’t made a habit of paying late, you can probably get this fee waived. Credit card companies will usually waive your first late fee. Even if it’s not your first time being late, you might be able to get it waived if you’ve paid on time for at least the past six to 12 months.

Contact your card issuer to see if it will waive your late fee. You can do this by calling the number on the back of your credit card. There may also be the option to contact customer service by live chat or secure message if you log in to your account online.

It won’t affect your credit score unless you’re late by 30 days or more

Often, the biggest worry people have about a late payment is what it will do to their credit score. Fortunately, your credit score isn’t going to take a hit just because you were a few days late.

Not everyone realizes this, but creditors can’t report late payments to the credit bureaus until the payment is at least 30 days past due. That’s the lowest threshold for a payment to be reported as late on your credit file.

If you make your payment one, 10, or 20 days late, it won’t hurt your credit score. You still should do your best to pay on time, though, so you don’t get dinged with late fees. And if you are late on a payment, make sure to pay it ASAP. If you go 30 days without paying and your card issuer reports the late payment, it can decrease your credit score by more than 100 points.

There are bigger consequences if you don’t get caught up

You won’t face any lasting repercussions if your credit card payment is a few days or even weeks late. The only penalty before the 30-day mark is a late fee, which you may be able to get waived. But after that, consequences can quickly add up.

The first is damage to your credit score. As explained above, that happens if you’re late by 30 days and the card issuer reports it to the credit bureaus. Here’s what can happen after that if you don’t get caught up on your payment:

The card issuer will charge you another late fee each time you miss another payment due date.Your account will be reported as 60 days, and then 90 days past due, with each report doing more damage to your credit score.The card issuer can start charging you a higher penalty APR. Card issuers typically do this when an account is 60 days past due.Your account could eventually be charged-off and your debt sold to a collection agency.

The best way to avoid any sort of issue is to pay your credit card bill on time. You may want to set up automatic payments or reminders for yourself so you don’t forget. And if your payment due date doesn’t work for you, ask your card issuer to change it. If you want to move it until, say, after you get paid, your card issuer probably won’t have a problem doing that for you.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2024

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

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.

 Read More 

Starting a business could save you money on taxes. Read on to learn more. 

Starting a small business isn’t for the faint of heart. It’s estimated that 20% of small businesses fail within their first year alone.

But there are many benefits to starting a small business. For one thing, you get to call the shots and be your own boss. You might even get an opportunity to increase your income.

Starting a small business could also work wonders for your taxes. In fact, you may find that your tax refund gets larger once your small business is set up.

A small business might result in more tax savings

When you work as a salaried employee, the number of deductions you’re able to claim on your tax return may be limited. For example, you can take a mortgage interest deduction if you itemize on your taxes and own a home. And you can claim a deduction for state and local taxes.

But when you work for an employer, you can’t claim a deduction for the expenses you bear that allow you to do your job. If you have to spend $400 a month commuting to and from your office, that expense is on you, and the IRS won’t allow you to deduct it.

You also cannot take a home office deduction if you work as a salaried employee. This holds true even if you work remotely 100% of the time and don’t have a physical office you report to.

When you own a small business, you can deduct the expenses you incur to keep your venture running. And that list might be quite extensive.

First of all, any startup costs you incur for your business will generally be deductible. And if you use an accountant to help you manage your books, that’s a deductible expense, too.

You can also deduct the cost of any equipment or supplies you need to keep your business running. So let’s say you decide to start a tech consulting business. If you have to buy things like cables and routers, those are all deductible. And if you need to buy office supplies and filing cabinets to keep track of your invoices and documents, those are deductible expenses, too.

You can also take a deduction for transportation costs you incur in the course of running your business. If you have a vehicle you use solely for business, that’s an expense that’s deductible (and even if you don’t use a vehicle for 100% business use, you can generally deduct something there). And if you travel for things like conferences related to your business or industry, those, too, can serve as a tax break.

Get a good accountant

All told, your tax refund has the potential to rise quite a bit when you start a business. But it’s also important to know which expenses are and aren’t deductible. So if you’re starting a company of your own, get yourself a seasoned accountant with experience in the world of small business taxes. That way, you’ll have someone to guide you and help you maximize the tax breaks you’re entitled to.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2024

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

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.

 Read More