Money Management

Have an IRA? Read on to see why it’s important to keep tabs on it. 

If you have money socked away for retirement in an IRA account, that’s a very good thing. You’ll need personal savings to supplement your Social Security benefits as a senior, and funding an IRA is a great way to avoid financial worries later in life.

But your IRA also isn’t an account you should simply set and forget. So if these signs apply to you, it means you’re not giving your IRA the attention it very much deserves.

1. You never check your balance

Checking your IRA balance every day isn’t a good thing, just as it’s not wise or necessary to check your brokerage account balance on a daily basis. But it’s not a bad idea to check your IRA balance on a quarterly basis. And at the very least, you should check it on a yearly basis to get a sense of how much savings you’ve amassed.

Granted, it’s possible for your IRA balance to drop from one year to the next due to market conditions even if you’ve been funding your account. But it’s still important to have a handle on what your balance looks like. And if you’re not seeing the growth you’re hoping for in your IRA, it might serve as motivation to either boost your savings rate or otherwise look at changing your approach to investing.

2. You don’t know how your IRA is invested

The great thing about IRAs is that they allow you to invest your retirement savings in individual stocks, whereas with a 401(k) plan, you’re generally limited to a bunch of different funds only. But if you have no idea which stocks you own in your IRA, that’s not a good thing.

A stock you bought years ago may be consistently decreasing in value. That’s the sort of thing you’d want to know about — and change.

Also, it’s important to make sure your IRA is well balanced. That means you don’t want 65% of your IRA in tech stocks, or concentrated on any single market sector, for that matter. Rather, you should be aiming for a diverse mix of stocks.

3. You haven’t increased your savings rate since you first started funding your account

The amount of money you can contribute to an IRA on a yearly basis can change over time. In 2022, IRAs maxed out at $6,000 for workers under the age of 50 and $7,000 for workers 50 and older. This year, these limits are up by $500, so savers under age 50 can contribute up to $6,500 to their IRAs and those 50 and older can contribute up to $7,500.

If you started contributing to your IRA years ago but have yet to increase your savings rate, you may want to rethink that. Of course, some people have been unable to ramp up their retirement plan contributions over the past year due to inflation. But it’s generally a good idea to increase your savings rate as your earnings rise. So if you’re making more money now than you did when you first opened your IRA, it may be time to see what you can do to pump more money into your account.

Paying attention to your IRA could spell the difference between meeting your long-term savings goals and falling short. If these signs apply to you, carve out some time for a deep dive into your IRA so you can get a better handle on your retirement savings.

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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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Dogs can be great companions, but they’re also pretty expensive. Here’s a closer look at how much it costs to care for a dog in 2023. 

National Adopt a Shelter Pet Day is April 30, and many Americans are weighing whether to add a new four-legged household member. But it’s a big decision. You have to think about what kind of dog is best for your family and how you’ll fit it into your lifestyle. You also need to make sure you have room in your budget for a new pet.

But figuring out exactly how much you’ll spend on a new dog can be tricky. Here’s what a recent Rover survey had to say, along with some tips on how you can keep your costs as low as possible.

First-time dog owners will spend over $1,100 in their first year

It shouldn’t come as a surprise that those getting a dog for the first time will spend a lot more than those who already own one or more pets. Rover estimates that in the first year, dog owners will spend anywhere from $1,135 to $5,155 to get their pet and purchase all the essentials they need. This includes:

Veterinary visits, including spaying or neuteringCollarsLeashesFood bowlsPoop bagsDog bedsCrateShampooToysTreatsDog foodMicrochippingPet licensePotty padsStain removers

Your biggest expense is obviously going to be the dog itself. Costs for this vary considerably, depending on the breed, age, and health of the pet as well as where you live. Where you get your dog also makes a big difference. Those trying to keep costs down are better off adopting from an animal shelter. Fees here usually range from about $115 to $725, according to Rover. Purchasing a purebred dog from a breeder could easily cost thousands.

When choosing a breed, you may also want to think about what health conditions that type of dog is prone to. This could affect what you pay in future years for vet visits. And if a certain breed is prone to aggressiveness or biting, it could make it more difficult to find homeowners insurance that will cover it.

As for keeping other costs down, shopping around is key. Compare prices at several stores before making any purchases and keep an eye out for coupons and sales. You could also contact a few vets in the area to learn what they charge for checkups and other services you think you may need to see which one best fits into your budget.

Ongoing dog ownership costs can still cost thousands annually

After paying for your dog and all the supplies they need to make themselves at home, you’ll still have some recurring expenses. These include things like:

Annual vet visitsDog foodTreatsToysPoop bagsFlea and tick medication

Rover estimates that dog owners could spend anywhere from $610 to $3,555 on these items in 2023. Food is the biggest factor influencing price here. Buying premium food or prescription food for your dog will drive up costs significantly.

You must decide which dog food is best for your pet based on the ingredients, your vet’s recommendation, and your budget. But it doesn’t hurt to compare a few brands before you make up your mind. Once you’ve decided, keep an eye out for coupons on your dog’s usual food to help keep costs low.

Surprise expenses can be difficult to budget for

In the sections above, we focused on more or less predictable expenses. But those aren’t the only costs pet owners face. Emergency costs can arise at any time, and some people prefer to spend extra money on wellness care to improve their dog’s quality of life. This includes things like:

Dental cleaningGroomingAlternative treatments, like acupuncture

It’s difficult to gauge how much you could spend on these things because every person and every pet are different. Even within the same household, money spent on pet-related costs can vary significantly from year to year.

This unpredictability can be tough on budgets, which is why an increasing number of dog owners are investing in pet insurance. This doesn’t take care of all vet bills, but it can reduce how much pet parents pay out of pocket when their dog gets sick or injured. Some even have optional wellness add-ons to cover some of the things listed above.

Pet insurance has its own costs, though. There are monthly premiums, copays, and deductibles, just like human health insurance. But these costs are easier for a lot of people to plan for.

How much you spend on your pet is ultimately up to you. If you’re worried you can’t afford to give your pet the care it needs, you may want to hold off on bringing one home for now. And if you’re worried you’re spending too much on your pet, try some of the tips above to see if you can’t shave a little off your annual expenses.

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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.Kailey Hagen has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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A writer explains why she overspends at Costco, and how she tries to compensate. Read on to learn more. 

The $120 a year I spend on a Costco executive membership is more than worth paying. First of all, my Costco membership itself saves me lots of money on groceries and household essentials. And my executive membership is a great deal because it gives me 2% back on all Costco purchases. Between that and the cash back I get from my credit card on Costco buys, that’s a lot of extra money coming my way.

But while I’m definitely able to save my fair share of money by shopping at Costco, I have one pesky habit that tends to cost me money. It’s also a habit I’ve struggled to quit. So rather than kick it, I’ve found a way to manage it.

When impulse buying gets the best of you

When you’re at a supermarket like Trader Joe’s and you’re tempted to buy a new product on a whim, often, you’re shelling out $3 or $4 for it. At Costco, when you impulse-buy a food item, you might end up spending $12 or $15 because you’re buying the new item in bulk.

It’s this very habit — giving into Costco impulse food buys — that’s been known to cost me hundreds of dollars a year. And while I’ve tried to break the habit by making Costco shopping lists and meal-planning ahead of time, nothing’s really helped. I’m still commonly tempted by new Costco treats, and my brain often finds a way to justify purchasing them.

That’s why I’ve stopped fighting those Costco impulse food buys. Instead, I’ve found several ways to make sure they don’t wreck my finances.

Compensating in other ways

Since I tend to shop at Costco on a weekly basis, the temptation to spend on new items is constant. So rather than fight it, one thing I’ve taken to doing is automating my savings account contributions.

Each month, I have a preset amount of money set to move from my checking account to my savings account. This amount is intentional — it’s the sum needed for me to meet my yearly savings goal.

The way I see it, if I’m able to keep making those transfers while covering my bills and avoiding debt, it doesn’t really matter if I’m spending an extra $20 or $40 a month at Costco. Yes, I know it can add up to several hundred dollars over the course of a year. But since it’s not impeding my goals and it lends to happiness (because who doesn’t love impulse-buying Costco cheesecake?), I figure it’s okay.

Another thing I do to stay on track financially in light of my impulse food buys is keep some of my large expenses on the low side. My family needs two cars because we live in suburbia and have kids with conflicting places to be on many occasions. But one of our cars is 16 years old, and it’s not the most comfortable to drive. Still, we’ve hung onto it because it’s paid off, and that allows us to avoid a new car payment, thereby opening up more room in our budget for things like Costco treats.

All told, Costco impulse buys are something I’m just plain bad at avoiding. But thankfully, I’ve found ways to make sure they’re not such a big problem.

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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. The Motley Fool has a disclosure policy.

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Mortgage rates have been elevated for quite some time now. Will they come down eventually? Read on to learn more. 

There’s a reason so many people are struggling to buy a home today. Not only are home prices still elevated, but mortgage rates are stuck in the 6% range for 30-year loans. And they’ve been stuck in that range since the latter part of 2022. In fact, at one point late last year, mortgage rates actually surged above 7%, so the 6% range is far more palatable.

What makes today’s borrowing rates so frustrating is that they’re notably higher than the rates mortgage applicants were privy to during the pandemic. Back then, you could sign a 30-year mortgage at around 3%.

But what if today’s mortgage rates become the norm? It’s a possible scenario buyers might have to grapple with, though it’s also likely that rates will drop at some point in the future from where they are today.

Mortgage rates tend to fluctuate over time

Today’s mortgage rates might seem extraordinarily high. But actually, they’re a bargain compared to the rates borrowers were looking at in the early 1980s. Back then, it was common to have to borrow at 13%, 15%, or more.

Meanwhile, the rates we’re seeing today are comparable to the rates borrowers were looking at back in the period of 2002 to 2007. Once the 2008 housing crisis hit, the cost of borrowing for a mortgage dropped, and it stayed fairly low for many years before utterly plummeting during the earlier stages of the COVID-19 pandemic. So while today’s mortgage rates might seem high in the context of both pandemic-era rates and post-housing crisis rates, the reality is that historically speaking, they’re not so outrageous.

Some real estate experts, in fact, think that today’s borrowing rates will actually become the norm. And that might force some would-be buyers to have to sit out the market until home prices come down. It might also prompt buyers to re-run their numbers and opt for homes at a lower price point.

Will mortgage rates get stuck in today’s range?

Mortgage rates often respond to supply and demand. During periods when lenders need to drum up demand, they tend to lower their rates. That’s why we’ve seen lower rates during times of crisis, like the years following the 2008 housing market collapse and the pandemic.

In time, we could see mortgage rates drop to more affordable levels than where they are today. Unfortunately, that might happen in the wake of another financial crisis, but it’s the reality of the lending market.

But will we ever see 30-year mortgage rates in the 3% range again? Possibly not. The pandemic was a really extreme health and financial crisis, and it’s really hard to know if we’ll face a comparable event in our lifetime.

However, it’s possible that rates will drop into the 5% range in the not-so-distant future, and that at least offers some relief compared to where rates are sitting today. Ultimately, though, buyers may need to accept the fact that record-low mortgage rates were a limited-time offer they may have missed out on — and find ways to become homeowners regardless.

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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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