Money Management

It’s a challenging thing. Here’s how to navigate it. 

The S&P 500 index, which is generally considered a measure of the broad stock market, is up about 3.5% year to date. But it’s also down about 13.5% over the past year.

That’s because we’re still in the midst of a volatile stock market. And while things may be starting to settle down, factors like banking industry woes, inflation, and interest rate hikes could create a turbulent backdrop for investors throughout 2023.

As such, it’s fair to say that now’s a pretty tough time to first start investing. But it’s also a good thing to start investing, because the sooner you do, the more time your money gets to grow.

If you’re opening your first brokerage account this year, here are some key tips to keep in mind.

1. Focus on diversification

A well-diversified portfolio could help you limit your losses during periods of stock market volatility, all the while setting you up for nice gains during periods when the market rallies. So as you go about the process of buying stocks for the first time, aim for a broad mix of companies across different segments of the market.

You may also want to put some broad market ETFs, or exchange-traded funds, in your portfolio. If you buy shares of an S&P 500 ETF, for example, you’re effectively investing in the 500 largest publicly traded companies in the market.

2. Take advantage of fractional shares

When the stock market is shaky, leaning too heavily on any individual stock could be a recipe for disaster (though to be fair, the same holds true during periods with less volatility, too). That’s why you don’t want to tie up too much of your money in a single stock, but rather, branch out.

Now, some stocks have a much higher share price than others. But a good way to add higher-priced stocks to your portfolio without creating too much of an imbalance is to take advantage of fractional shares.

Many brokerage accounts these days let you buy shares of stock on a fractional basis. So, let’s say you have $2,000 to build an initial portfolio with, and you want to invest in a company whose share price is sitting at $500. Buying a whole share means putting 25% of your portfolio into a single company, and that could be risky. But if you were to buy one-fourth or one-third of a share, you’d be limiting your risk.

3. Don’t check your portfolio balance every day

The stock market has a tendency to swing wildly — even in the best of times, and certainly when things are generally turbulent. That’s why it’s important to pledge to not check your portfolio on a daily basis. Doing so might not only cause you undue stress, but push you to make rash decisions that hurt you financially, like dumping stocks when their value declines and locking in losses as a result.

It’s fair to say that if you’re first starting to invest right now, you’re doing so at a tricky time. But if you follow these tips, you can get into a good groove and set yourself up for long-term success.

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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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Is your home internet bill too expensive? Here’s help. 

When was the last time that you looked at your home internet bill? You may be paying more than you realize. In addition to regular service charges, many customers pay extra fees, and one common one is an equipment rental fee. Unless you have your own equipment, most internet service providers charge a monthly rental fee to borrow their equipment. These fees can add up quickly. If you’re willing to buy equipment, you could save a big chunk of cash.

Home internet equipment rental fees can be expensive

You’ll need to have proper equipment to connect to the internet at home. Unless you purchased equipment yourself or bought a device from your internet provider, you’re likely paying a monthly fee to use their device. Some people may not realize they’re paying this fee because they don’t look closely at their bill.

How much is the typical equipment rental fee? The costs vary by company, but in most cases, you can expect to pay at least $10 per month if you rent equipment from your internet service provider. Some companies charge rental fees of up to $15 per month. That’s a lot of money to spend on something you’ll eventually have to return after you’re done borrowing it.

How to save up to $180 a year

The good news is you can eliminate this fee. While you’ll need to do a little legwork to buy equipment that works with your provider and plan, doing so could save you a lot of money in the long run. Once you return the equipment you’ve been renting, your service provider will remove the monthly fee for good and the savings will begin.

Ready to make a change? One option is to buy new equipment. You’ll pay more for a new device, but this is a good option if you want a particular brand or model. If you’re not in a hurry and want to score a deal, waiting for a big sale could help you save.

Another option is to purchase used equipment to keep your upfront costs low. Look online to see if anyone in your community is selling previously used equipment. You’ll likely see people looking to get rid of equipment because they’ve moved or switched internet providers. Buying a used device can save you money and you can ensure one fewer thing ends up in a landfill.

Instead of giving more money to a major corporation, why not get rid of this fee and pay yourself? If your internet service provider charges a $15 per month equipment rental fee, you can save $180 per year by ditching this fee and buying a device. That may not sound like a ton of money, but the savings will add up as you continue to use your equipment.

If you keep your equipment for several years, the savings will add up significantly. Here’s a breakdown of the potential savings depending on how long you use your device:

One-year savings: $180Three-year savings: $540Five-year savings: $900

Eliminating internet rental fees could free up cash to increase your savings account balance.

Pay attention to fees

Extra fees are not uncommon in today’s expensive world. But you may be able to avoid some fees if you’re strategic. These extra expenses affect your personal finances, so ensure you sift through your bills and review each charge to know what fees you’re paying.

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Could a lack of 2022 stimulus checks be causing Americans to get smaller IRS checks? 

The 2022 tax season is well underway, and the IRS recently released some important data about how Americans are faring this year.

Specifically, the tax agency’s filing season statistics ending the week of March 24, 2023 show that the average refund amount is considerably smaller this year than it was last year. The IRS had warned this was likely to be the case this year, in large part due to the fact that the federal government did not authorize stimulus checks in 2022.

Just how much less are Americans getting this year in their bank accounts or sent via mail from the IRS? Here’s what you need to know.

Here’s how much lower refund checks are this year

According to the IRS data for the week ending March 24, 2023, the average tax refund sent out this year to tax filers is $2,903. While this may sound like a generous sum, the average refund the prior year was $3,263 when the data was released for the week ending March 25, 2022.

This means the average refund amount is down 11% this year compared to the same time last year — which is a very substantial decline. In fact, the IRS has sent out only $172.263 billion in refunds in 2023 compared with $188.687 billion last year — despite sending out a higher total number of refunds to date (59,342,200 compared with 57,830,000).

Why stimulus changes mean refund checks are lower

Changes to stimulus policy have been a big contributing factor to the reduced refunds this year.

The refunds coming now are for the 2022 tax year, during which the federal government did not provide any stimulus funding. By contrast, in 2022 when taxpayers were getting refunds for the 2021 tax year, several types of federal stimulus had been made available in 2021 including a $1,400 payment for adults and dependents authorized by the American Rescue Plan Act as well as an expanded Child Tax Credit that provided parents as much as $3,600 per child.

The American Rescue Plan Act resulted in many Americans receiving larger refunds because many people could claim both the $1,400 stimulus payment when filing their returns as well as the expanded Child Tax Credit.

Americans were eligible to claim the $1,400 if they didn’t receive the advance payment earlier in the year. And only half the expanded Child Tax Credit was sent out prior to tax time — in monthly installments from July through December — so anyone eligible could claim the other half (or the full amount if they didn’t receive the advance payments).

Without these and other extra tax credits made available by stimulus legislation, Americans are getting far less back, so it’s not a surprise that there’s been a huge drop in the average refund. Of course, many people are still getting a significant sum refunded and should make sure to use this money wisely to pad an emergency fund or accomplish other financial goals when possible.

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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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There’s still time to boost your tax refund. 

It’s easy to argue that a large tax refund is not a good thing. That’s because a refund represents money you were entitled to collect earlier on but didn’t. But even though tax-filers are often told that they shouldn’t want a large refund, most people would rather see the IRS put more money into their bank accounts during tax season than less.

Meanwhile, tax refunds are down so far this year compared to last year. For the week ending March 17, the average tax refund paid by the IRS was $2,933, compared to $3,305 a year prior.

Now there’s an easy explanation for that. In 2021, a number of tax credits got a big boost, including the Child Tax Credit. That gave tax refunds a lift in 2022. But those pandemic-era benefits have since expired, so now, those doing their tax returns can’t benefit from them in the context of their 2022 taxes.

If you’re doing your taxes and aren’t happy with the refund you’re looking at, you should know that you still have options for eking out a higher one. Here’s how.

Max out your 2022 IRA

In 2022, IRA account contribution limits maxed out at $6,000 for workers under age 50, and $7,000 for those 50 and over. If you put in less, the good news is that there’s still time to finish funding your 2022 IRA. You actually have until this year’s April 18 tax-filing deadline to pump more money into your account, so if you have the money and are able to move it over, you might score some added tax savings.

Make sure you’re getting all of the credits and deductions you’re eligible for

The U.S. tax code is loaded with tax credits and deductions that could boost your refund — but the key is to make certain you’re claiming all of the benefits you can. And a good way to know is to hire a tax professional to complete your return. You might spend a few hundred dollars to do so, but in exchange, that person might score you a higher refund that not only pays for their fee, but leaves you coming out ahead financially.

If you don’t want to use a tax preparer for your 2022 return, think about your situation. If you’re a parent, read up on tax credits for kids, like the Child Tax Credit and the Child and Dependent Care Credit. And if you’re self-employed in any capacity (including having taken on a side hustle in 2022), then research different deductions you might be able to claim, like travel costs and the cost of supplies and equipment. You may also be eligible for a home office deduction if you’re self-employed.

It’s not surprising to see that tax refunds are down this year. But you don’t have to settle for a smaller refund, either. So before you submit your 2022 tax return, look into different credits and deductions and see about maxing out last year’s IRA. The latter could not only boost your refund, but also, set you up with a larger nest egg for retirement.

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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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Who says you need to buy in bulk to get a bargain? 

Convinced you need to buy in bulk to make Costco a smart financial move? Think again. Though the warehouse store certainly has plenty of great deals when you buy big, you don’t necessarily need to walk out with a pallet of produce to get your membership’s worth. Check out these awesome Costco buys for under $10.

1. Hot dog combo: $1.50

No Costco deals list would be complete without a shout out to the classic hot dog combo. You get a quarter-pound all-beef hotdog, bun, and 20 ounce soda — with refill — all for just $1.50.

And you don’t have to worry about that price increasing anytime soon. The hotdog combo has had the same price point since it debuted in 1985, and the management at Costco is determined to keep it that way. (Just do yourself a favor and skip using it to make a Forbidden Glizzy. Your stomach will thank you.)

2. Rotisserie Chicken: $4.99

This is arguably the single best buy in the whole store. Every Costco-ite waxes poetic about the $4.99 rotisserie chicken, which has been a Costco staple for decades. And that price point is part of the magic; like the hot dog combo, the rotisserie chicken has had the same sales price for most of its life, and the company keeps it that way on purpose to help drive memberships and sales.

Perhaps the best thing about rotisserie chicken is how versatile it is. You can eat it fresh on day one, then use the leftovers for salad, sandwiches, or even soup. Don’t forget to turn the carcass into yummy stock!

3. Dearfoams slippers: $9.97

Winter may be on its way out, but cold feet don’t seem to be limited to a particular season. Keep your toes toasty with Dearfoams slippers. Costco has a few limited options online for just $9.97, though you could probably find them at a better price in your local Costco.

4. Buckle Up Storage Set: $7.99

If you haven’t yet finished (or started) your spring cleaning, maybe this $7.99 storage set will help motivate you. It includes four bins, plus lids. Each bin is 12.9 quarts — roughly 16″ x 11″ x 6″ — which isn’t huge, but it could work well for storing documents or organizing craft supplies.

5. Love Beets Organic Cooked Beets: $9.59

Beets make a fantastic addition to so many dishes; I like them roasted in a salad. But cutting and cooking beets can leave your kitchen counter looking like a crime scene. These beets are vacuum packed and sous vide cooked, so they’re ready to go when you are. They also keep well unopened, so you can store them for quite a while in the fridge. You can get a four-pack of 300-gram packages for just $9.59.

6. Kirkland Signature Free Range Organic Eggs, 24 count: $7.99

While this is the bulkiest item on our list — two dozen eggs can be hard to get through if you don’t use them regularly — the spike in egg prices over the last year makes this a deal worth mentioning. What’s more, eggs have a surprisingly long shelf life in the fridge, giving you lots of time to enjoy your scrambles, omelets, and deviled eggs. The $7.99 price point works out to about $0.33 an egg, which is a steal for free range organic eggs.

7. Costco gas: price varies

Alright, so this one is a little bit of a technicality; it’s only less than $10 if you buy a gallon or two (or maybe three, depending on your area and the time of year). But gas at Costco can still be a great bargain. It’s often at least a few cents cheaper than competitors and has been known to drop even lower.

It probably won’t make sense to go out of your way to fill up at Costco — you have to count the gas you’d use to get there, after all. But if you’re already hitting the warehouse store for a shopping trip, it can pay to fill up your gas tank while you’re there.

Check your store often for new deals

One thing to keep in mind about Costco is that the prices and inventory tend to vary from store to store. So the only way to really see all the deals is to hit your local club. Just make sure you have your trusty Visa credit card, since that’s the only network Costco accepts.

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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.Brittney Myers has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Best Buy, Costco Wholesale, and Visa. The Motley Fool has a disclosure policy.

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