Money Management

Some people prefer using the same bank for all their financial accounts. Learn about the pros and cons of doing this to see if it’s right for you. 

Over time, you’re probably going to have several types of financial accounts. Most people start with bank accounts, including a checking account and a savings account. After that, you’ll likely need a credit card to build credit, a brokerage account to invest, and possibly auto loans or a mortgage, too.

You could go with different financial institutions for everything you need. A bank account at one bank, credit cards from another, and so on. Or you could keep it simple by using the same bank for all your accounts. To decide if that’s a good approach, let’s look at the pros and cons.

1. You could qualify for special perks

When you use the same bank for everything, it’s more likely to offer you extra benefits. For example, you could receive targeted credit card offers or fee discounts on loans.

One of the most well-known examples of this is the Bank of America Preferred Rewards program. Clients who have at least $20,000 across eligible Bank of America accounts receive a variety of extras, including higher rates with the bank’s rewards credit cards and an interest rate boost on its savings accounts.

2. It’s easier to manage

Managing your money is faster and more convenient when all your accounts are in one place. Need to transfer money from your checking account to your savings account? You can do it instantly if both accounts are with the same bank. If your savings account was at another bank, it could take a couple of days for the transfer to process.

You also don’t need to manage logins and passwords for multiple banks. And when you want to review your finances, it’s easier to do when you can access all your accounts with a single login.

3. It could help you qualify for credit cards and loans

You don’t need to bank somewhere to get a credit card or loan there — but it could help, in a few ways. It gives the bank a better idea of your financial situation. The bank also may be more comfortable loaning you money or issuing you a credit card when you’re using it to store your savings. Last but not least, banks sometimes send clients pre-approval offers for credit cards. Although these don’t guarantee approval, they indicate the bank believes you’re a good fit for that card.

4. Options are more limited

The biggest drawback of only using one bank is that you’re limiting yourself to a small selection of financial products. You could end up missing out on valuable benefits this way. For example, if your bank doesn’t offer any high-yield savings accounts, that could cost you hundreds of dollars in interest per year. After all, many of these accounts currently offer APYs of 4% or higher, compared to the national average of just 0.37%.

You can run into the same problem with other types of financial products as well. Other banks may have credit cards with better sign-up bonuses or brokerage accounts with fewer fees.

5. Fraud could be more of an issue

Using multiple banks is a good way to give yourself some additional protection against fraud. Let’s say your bank accounts are compromised and you need to freeze them. If you only have accounts with one bank, you could be unable to withdraw money and pay your bills with them until the issue is resolved. Or, if anyone gets into your online banking account, they’ll have access to all your financial products. With multiple banks, you get the security of not having all your money in the same place.

6. You may run into a limit on how much credit you can get

As mentioned above, in some ways, using the same bank helps when applying for credit. However, there’s also a downside, at least if you want to get multiple credit cards. Banks are only willing to extend so much credit to each client.

Imagine you have two credit cards with your bank, each with a $10,000 limit. If your bank has decided that it’s not going to extend you more than $20,000 in credit, it will deny future credit applications for that reason. If you’re open to credit cards from other banks, you’ll have more options and be less likely to run into these kinds of credit caps.

7. It’s more work if you want to change banks

People usually stick with the same bank for a long time, but it’s not always a lifelong relationship. You may move and find that your bank doesn’t have great branch or ATM access in your new area. Or maybe you run into frustrating customer service issues and decide that you need a new bank.

Whatever the reason, if you use the same bank for everything, switching is a more complicated and time-consuming process. It’s easier if you’re only switching your bank account, compared to if you also need to get new investment accounts and credit cards.

There’s nothing wrong with keeping your finances mostly tied to one bank. It’s easy to manage, and you could get special perks. However, be open to financial products from other banks as well. Your bank probably doesn’t have all the best options across the board, so if you’re willing to open accounts elsewhere, it could benefit you financially.

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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.Bank of America is an advertising partner of The Ascent, a Motley Fool company. Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America and Target. The Motley Fool has a disclosure policy.

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If done properly, you can avoid paying taxes on your real estate gains. Read on to learn more about how this process works. 

Real estate is an excellent investment opportunity that offers many benefits, like stable cash flow, capital appreciation, and tax advantages. However, real estate markets can be unpredictable and change rapidly. Economic conditions such as interest rates and taxes can play a role in the success or failure of an investment property.

You must also be aware of the tax ramifications and how to reduce taxes to maximize profits. One of the best techniques to minimize taxes, protect your capital gains, and reinvest in more property is by using a 1031 exchange. Here’s how it works.

What is a 1031 exchange, and how does it work?

Selling business or investment property can be profitable, but you will have to pay taxes on any gains. However, the Internal Revenue Code Section 1031 provides a valuable exception in the form of a like-kind exchange. This allows individuals to reinvest the proceeds from the sale into a similar property and postpone paying taxes on the gain. Capital gains can be as high as 20% for people with higher incomes.

Simply put, the IRS Section 1031 Exchange allows investors to sell their property to buy a new one without paying taxes. Also known as a like-kind exchange, it is a tax-planning strategy where you can defer paying capital gains taxes. This allows you to reinvest the entire sale amount, including profits, to purchase a higher-valued property. So you avoid the cost of paying taxes upfront and can use the revenue to grow your real estate investments.

RELATED: Best Mortgage Lenders

What are the qualifications for a 1031 exchange?

To be eligible for a 1031 exchange, you must meet the following qualifications:

The property must be used for business or investment purposes.The property must be “like-kind” of the same nature, character, or class. Quality or grade does not matter. For example, you can’t use the proceeds of a real estate investment to purchase a different form of investment, like stocks or bonds.The new property must be of equal or greater value than the old one.The entire proceeds of the sale must be reinvested into the new property.The replacement property must be identified within 45 days after the sale of the initial property.The replacement property must be purchased within 180 days after the initial sale.You must have a qualified intermediary assist you with the transaction.

What are the benefits of a 1031 exchange?

The primary advantage of a 1031 exchange is that it enables an investor to defer paying capital gains taxes after selling a property. This deferment allows investors to reinvest their sale profits, including capital gains, into a better-performing property.

Savvy taxpayers and investors have been able to transfer significant amounts of property wealth to their heirs without being hit with taxes. You can continue to defer taxes while continually upgrading your properties through a 1031 exchange. Then by leaving the real estate to your heirs, they inherit the properties at fair market value, essentially erasing any outstanding tax deferment debt. By taking advantage of certain legal loopholes and following a few smart planning techniques, individuals can ensure their legacy is passed on intact without having to pay unnecessary taxes.

What are the downsides of a 1031 exchange?

While a 1031 exchange has many benefits, there are also potential downsides. There are strict IRS deadlines, identification requirements, and other requirements. If you don’t comply with all these rules, you risk losing your tax deferral, which can push you into a higher tax bracket.

When you sell your replacement property and don’t qualify for a 1031 transaction, you’ll need to pay the initial amount of deferred capital gain (from previous transactions), as well as any gain you’ve realized on your new property. Additionally, the 1031 exchange process may require more time, money, and resources to complete. With only 180 days, you will need to move quickly, regardless of the real estate market.

A 1031 exchange is one of the most effective and profitable ways for investors to minimize taxes, protect their capital, and reinvest in a more prominent property or properties. A 1031 exchange has many benefits, like deferring taxes, increasing cash flow, and enhancing leverage. However, before considering a 1031 exchange, it’s crucial to research, consult with experts, and have a thorough understanding of the process and requirements. If you’re an investor in the real estate industry, a 1031 exchange is a powerful tool that can help you build and manage a successful real estate portfolio!

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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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Sick of driving a gas-powered car? Tesla has lowered its prices again. Find out how much a new Tesla will cost you and learn about the new EV tax credit rules. 

Tesla has cut its prices again. At The Ascent, we previously discussed how Tesla had slashed its prices at the beginning of 2023. Now with even lower prices, you may be wondering if it’s a good time to purchase an electric vehicle. While an electric car is an investment, you could save on car maintenance and gasoline costs. If you’ve been saving for a Tesla, now could be a smart time to buy if you want to get a deal on the price.

Tesla vehicles now cost less

Everyone loves a good deal — but how good are these new prices? With the most recent price cuts, every Tesla model is more affordable. How much money will you need to spend on your new car? Here’s a breakdown of the latest starting price by brand-new car model:

These prices are significantly lower than at the start of the year. If you’ve been stashing extra cash in your high-yield savings account to save for a down payment for a new EV, you may want to consider whether now is a good time to buy a Tesla affordably.

EV tax credit changes begin April 18

While the newly lowered prices are good news for your wallet, it’s essential to understand that the U.S. EV tax credit rules officially change on April 18, 2023. Some vehicles that previously qualified for the $7,500 EV tax credit may no longer be eligible due to more strict battery mineral and battery components requirements.

Beginning on April 18, vehicles that meet only the critical minerals requirement will qualify for a $3,750 credit. Cars that only meet the battery components requirement are eligible for a $3,750 credit. Vehicles that meet both requirements qualify for a $7,500 credit.

Taxpayers hoping to take advantage of the EV tax credit are encouraged to verify vehicle eligibility before buying. Tesla has outlined which of its vehicles qualify under the new rules. When purchased new, the following Tesla models qualify for tax credits to eligible taxpayers:

Model 3: $3,750Model 3 Performance: $7,500Model Y: $7,500Model Y Long Range: $7,500Model Y Performance: $7,500

Vehicles must also meet MSRP price cap requirements under the new rules. You can purchase optional equipment packages when buying a new Tesla. Under the EV tax credit new rules, vehicles can’t exceed the price caps below to qualify for tax credits:

Model 3: $55,000Model Y: $80,000

When purchasing a qualifying new vehicle, taxpayers must also meet the adjusted gross income (AGI) requirements outlined below:

Married couples filing jointly: $300,000
Heads of households: $225,000All other filers: $150,000

Note: Used electric vehicles may also qualify for EV tax credits. If you’re considering purchasing a used electric car, be sure to review the tax credit requirements before buying.

What potential savings look like for electric drivers

You may wonder how much money you can save by switching to a fully electric vehicle. According to the U.S. Department of Energy’s National Renewable Energy Laboratory, drivers can save as much as $14,500 on fuel costs over 15 years by driving an electric car instead of a similar one fueled by gasoline. Drivers can also save on maintenance costs. Before making any costly purchase, be sure to consider how your decision will impact your personal finances.

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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.Natasha Gabrielle has positions in Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

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Secret Hopper hires mystery shoppers to taste beers and rate taproom experiences. Read on to find out how you can join. 

The internet may not have lived up to the utopian expectations foisted on it in the early ’90s — unless we can all agree cat videos have made us kinder, more globally minded people — but it has recently made some beer lovers very, very happy.

Secret Hopper, a mystery shopping service, connects people who drink beer with breweries that want to maximize the beer-drinking experience. If you are selected, Secret Hopper will send you to breweries in your area, ask you to order beers, and pick up the tab so long as you rate your experience.

Yes — this is literally a company that pays you to drink beer. You might not get rich, but the experience will at least pay for itself.

How does Secret Hopper work?

Secret Hopper is a mystery shopping service focused on improving taproom experiences for breweries that have joined its network. The company collects data from surveys and questionnaires, then works with breweries to make the beer drinking experience more pleasurable.

To do this, Secret Hopper needs undercover beer drinkers — aka, you — to evaluate how the brewery feels on an ordinary day. To be clear, you’re not judging the brewery based on its beer. Rather, you’re evaluating the taproom experience: the friendliness of the bartenders, the bar’s ambiance, the smell of hops in the air…

After your brewery visit, you’ll fill out a questionnaire, and Secret Hopper will then pay you via PayPal.

How do you join Secret Hopper?

To join, hop over to the company’s website and fill out an application. If Secret Hopper decides you’re the right fit, it will send you assignments in your area when they are available.

Secret Hopper is very selective about who it sends to breweries. If you want to increase your chances of being chosen for a “secret hop,” the company advises you to put your best effort into the written responses on the application. Since the company relies on written data in its questionnaires, these responses can show Secret Hopper you have what it’s looking for.

The company limits you to two beers per taproom experience, so you should be a responsible drinker and — obviously — over 21. After you submit your experience, you might also need to make time later for questions and clarifications.

How much can you make?

Your compensation will depend on the complexity of your assignment and will typically be stated upfront before you visit a brewery. Often, Secret Hopper will compensate you for at least the price of the beers it asked you to order, plus a little extra. This could be roughly $20 to $30, sometimes more.

If your bill is more than what Secret Hopper’s upfront compensation, you’ll have to pay the difference.

Keep in mind, you won’t be an employee for the company, but rather an independent contractor. As such, Secret Hopper won’t withhold taxes from your pay. Be sure you understand the tax implications of contracting, as you might be on the hook for paying taxes on what you earn.

How can you earn more from drinking beer?

Secret Hopper will likely compensate you for two beers, which could cost roughly $20 to $30. If you want to earn a little extra, charge those beers to a cash back credit card designed for restaurants and dining out. These cards earn between 2% and 4% at breweries and give you a little bump on a beer tab covered by Secret Hopper.

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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 positions in and recommends PayPal. The Motley Fool recommends the following options: short June 2023 $67.50 puts on PayPal. The Motley Fool has a disclosure policy.

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There’s an amazing deal to be had on a Sam’s Club membership, but it expires soon. Read on to learn more. 

What happened

Sam’s Club is offering new customers a chance to score a $10 annual membership as part of its 40th birthday celebration. Between now and April 19, new members can take $40 off of the cost of an annual membership, knocking the original $50 price point down to $10.

So what

A standard Sam’s Club membership costs $50 a year and includes benefits like access to cost-effective bulk grocery items and household essentials, plus free shipping on online purchases. But right now, you can snag a $40 discount on a yearly Sam’s Club membership, which brings the cost of a standard one down to $40 a year and the cost of a Plus membership down to $70. Plus memberships include added perks like free curbside pickup and pharmacy and optical savings.

“From the day we opened our doors, we’ve worked hard to build relationships and create experiences that earn our members’ loyalty,” said Clara Anfield, Sam’s Club’s Chief Member and Marketing Officer. “That passion is reinforced today through a member-obsessed culture focused on delivering value through price, quality, convenience and assortment.”

Now what

Sam’s Club, a division of Walmart, operates almost 600 warehouse club stores in the U.S. and Puerto Rico. In addition to discounted memberships through April 19, Sam’s Club is offering more than $100 in offers for members through May 1 that could allow for even extra savings.

If you’ve been thinking about signing up for Sam’s Club, now’s probably a good time to do it. Shopping there frequently could result in a much lower credit card tab in the course of feeding your family and maintaining your household.

That said, before you rush to sign up for Sam’s Club, you may want to think about whether you’ll actually use your membership. If you don’t have a warehouse club store located nearby, then it could pay to skip the membership, or otherwise consider joining Costco if that chain has a location that’s more conveniently located.

Similarly, if you don’t have a larger family to feed, or if you don’t have a lot of room in your home for storage, then you may find that a Sam’s Club membership isn’t worth the cost. And if you’re not careful and go overboard on bulk buying, you may find that shopping at Sam’s Club causes you to lose money rather than save it.

Of course, you may not know whether you’ll get good use out of a Sam’s Club membership until you actually join and start visiting the store. So in that regard, it could pay to sign up at the $10 price point and simply see what happens. In a worst-case scenario, you’re out a relatively small amount of money, and you’ll know for the future that perhaps a warehouse club membership isn’t a good use of your financial resources.

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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.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and Walmart. The Motley Fool has a disclosure policy.

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