Money Management

The consequences can be quite unpleasant. 

It’s estimated that there are over 370,000 homeowners associations across the U.S., according to HOA-USA. And when you buy a home that’s part of an HOA, you’re liable for more than just a monthly mortgage payment. You’re also required to pay HOA fees or dues to cover things like common area maintenance and the upkeep of shared amenities, like tennis courts and swimming pools.

But it’s not just HOA fees you have to worry about. You also have to make sure to follow the rules your HOA sets. And if you don’t, the repercussions could be quite severe.

Common HOA rules you might break

The specifics of an HOA will hinge from one community to another. But it’s common for HOAs to impose rules in the following contexts:

Parking: You may only have a single assigned spot, or there may be areas you can’t leave your car in.Landscaping: If you do your own landscaping, you may have to keep your grass or shrubs to a certain height.Rentals: You may be barred from renting out your home to a tenant, either on a long-term or short-term basis.Pets: You may be barred from owning a pet, or from owning certain breeds or animals of a certain size.Business operations: You may be prohibited from running a business out of your home.Noise: You may have to keep noise to a minimum starting at a certain hour of the night through a certain hour of the morning.

What if you break the rules?

Failing to follow the rules of your HOA could cost you. It’s common for HOAs to impose monetary fines on property owners who violate rules, whether it’s getting caught running a business in your home or failing to trim your grass on time. You might also be banned from accessing certain amenities until you either pay your fine or address the issue at hand — for example, trim your grass if it’s overgrown.

In some cases, your HOA might put a lien on your home if you don’t pay your fines. That could make it very difficult or impossible to sell your home. Plus, your HOA may decide to file a lawsuit against you if you keep violating the rules your community has established, or if you don’t pay your outstanding fines for violating the rules.

Know what you’re signing up for

A big reason some home buyers might shy away from HOAs is that they can be notoriously restrictive. If you’re going to buy a home that’s part of an HOA, make sure you study the rules carefully before making an offer so you know what you’re getting into.

You may feel that certain HOA rules imposed within your housing community aren’t reasonable. But if they were there to begin with, then you really only have yourself to blame for landing in that situation.

And to be clear, you shouldn’t be in a situation where your HOA rules negatively impact your quality of life. If you’re spooked by the rules when you first learn about them, it’s a sign you may want to buy a home in a different HOA — or avoid an HOA altogether.

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It may be a larger number than you think. 

You’ll often hear that Social Security alone won’t get you through retirement. And that’s totally spot-on. The average Social Security recipient this year collects $1,827 a month. That’s an annual income of roughly $22,000 a year, which isn’t very high.

That’s why it’s so important to do what you can to save for retirement, whether by signing up for your company’s 401(k) plan or contributing steadily to an IRA. You could even opt to save for retirement in a taxable brokerage account if you want more flexibility with your money. The key is to be saving somewhere.

But just how much of your income should you be saving for retirement? The answer is pretty much the same no matter what you earn. But if you happen to be pulling in a $100,000 salary, you may want to aim for $15,000 to $20,000 a year in annual savings.

You may need more replacement income than you think

As a general rule, you should aim to sock away 15% to 20% of your annual income for retirement each year. This holds true whether your salary is $25,000, $50,000, $100,000, or more.

If you’re thinking that sounds like a lot, remember that many seniors end up needing a good 70% to 80% of their pre-retirement income to live comfortably. And Social Security will only replace about 40% of your former income if you earn an average wage (and if benefits don’t get cut universally). So the rest of that money may need to come from your savings, which explains why you have to part with so much of your income during your working years.

Of course, not all retirement plans allow you to sock away $15,000 to $20,000 a year. IRA accounts, for example, max out this year at $6,500 for savers under age 50 and $7,500 for those 50 and over. But if you don’t have access to a 401(k) plan, and you’re eager to save, say, $15,000 this year, you could always max out your IRA and then put the rest of that money into a traditional brokerage account.

Can you get away with saving less?

The guidance to save 15% to 20% of your annual income for retirement is really just a general guideline. And so there’s wiggle room in that range to some degree.

It may be that you plan to scale back your lifestyle in retirement by downsizing, moving to an inexpensive part of the country, and just plain living very frugally. You may also be willing and planning to work part-time as a retiree. In that case, you could potentially get away with saving a bit less for retirement — perhaps 10% to 12% of your present-day paychecks.

But for the most part, saving 15% to 20% of your earnings should set you up with a nice nest egg for retirement, especially if you invest that money savvily. So while parting with that much of your income might seem tough, remember that your future self will thank you for having made that sacrifice through the years.

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Costco can help you eat well, even if meat isn’t part of your diet. 

There are different reasons why people opt to follow a vegetarian diet. For some, the goal is to boost their savings account balance by spending less on groceries. For others, it’s to promote good health.

But finding pre-made vegetarian food can be tricky. A lot of products end up containing meat in the form of a stock, base, or filling, thereby limiting your options.

The good news is that Costco carries a variety of items that can lend nicely to a delicious vegetarian meal. And best of all, you won’t rack up a huge credit card tab in the course of bringing them home. If you’re a vegetarian, here are some tasty meals worth checking out.

1. Souper Boost plant-based soups

Soup can be an easy, quick, and hearty meal you crave, especially during the winter months. But if you don’t have time to cook up a batch from scratch, worry not. Costco sells a variety pack of plant-based soups so you won’t have to get bored of eating the same meal over and over again. Your choices include butternut squash, red lentil, and vegetarian chili.

2. Kirkland mac and cheese

Nothing says comfort food like macaroni and cheese, and if you’re vegetarian, this meal might be a staple item in your household. The same might hold true if you have young kids — only the benefit of buying Kirkland’s version is that your meal will contain actual cheese, as opposed to some sort of questionable neon orange cheese powder.

3. La Terra Fina quiche two-pack

Quiche is a great meal for vegetarians because it tends to be loaded with protein. Costco sells a two-pack by La Terra Fina that features one spinach and artichoke quiche and one cheddar and broccoli quiche. Simply stick a quiche in the oven when you’re too busy to cook, and voila — dinner is served.

4. Morningstar Farms Chipotle Black Bean Burgers

Being vegetarian doesn’t have to mean missing out on the chance to sink your teeth into a juicy burger. Costco sells a 12-count of these Morningstar Farms patties, and they’re large enough to constitute a full meal if you throw one on an oversized bun or over some greens. They’re also loaded with protein and can be heated easily in the microwave. Plus, they’re easy to grill.

5. Kirkland Signature Cheese Pizza

If you’re looking for fresh pizza that’s meat-free, Costco’s food court has you covered. But if you need a pizza to stick in your freezer and bust out in a pinch, this Kirkland Signature item is a solid bet. You’ll get four frozen pizzas, which is enough to feed hungry mouths several times over.

Just because you’re a vegetarian doesn’t mean you always have time to cook from scratch. And while you could turn to takeout in a pinch, that might introduce its own challenges, not to mention the expense. If you have a Costco membership, it pays to roam the aisles and see what vegetarian options you stumble across, as these are only some of the offerings you might find.

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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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Image source: Getty Images
What happenedLuxury homeowners in Los Angeles are scrambling to get their properties sold by the end of March, before a new mansion tax takes effect. Starting April 1, sellers will face a 4% transfer fee on property sales over $5 million and a 5.5% transfer fee on properties over $10 million. So whatIn November, Los Angeles voters approved Proposition ULA, which allows for the aforementioned mansion tax on high-value properties. The additional tax revenue, which is estimated at $600 million to $1.1 billion, will be earmarked for affordable housing and programs to prevent homelessness.Luxury homeowners in LA are now trying to offload their properties before that new tax kicks in. And many real estate agents are offering deep discounts and incentives to try to lure in buyers. “We were trying to think outside of the box and we offered a $1 million bonus to any agent who brought the buyer to one of our listings if we closed before April 1,” said Josh Altman, CEO of Altman Brothers Real Estate and star of Million Dollar Listing Los Angeles. “If you think about the money that you’ll be giving away, it might be less for you to give something to the agent or to the buyer than you’ll have to give away after you close the deal.”Now whatReal estate transfer taxes are a common expense sellers incur. And many states calculate these taxes based on home sale prices, with higher-priced properties incurring a higher rate of tax than those that are lower-priced. But whether you’re selling a multi-million-dollar mansion in Los Angeles or a modest home in Oklahoma City, it’s important to understand what real estate transfer taxes you’ll be on the hook for.
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Many states make this information available on their respective treasury websites. And if you’re working with a real estate agent to sell your home, they should be able to help you estimate your transfer tax bill. It’s a good idea to get this information early on in the process, as it might help determine how much you can afford to spend on a new home once yours has sold.Many home buyers use the equity they’ve built in an existing home to pay for a new one and keep their mortgage payments down. But if you’ll be losing $10,000 to real estate transfer taxes, that’s something you’ll clearly want to know about.Meanwhile, if you’ve been looking for a luxury home in Los Angeles, this could be a great week to make an offer. You might be able to take advantage of some seriously steep discounts.
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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. 

What happened

Luxury homeowners in Los Angeles are scrambling to get their properties sold by the end of March, before a new mansion tax takes effect. Starting April 1, sellers will face a 4% transfer fee on property sales over $5 million and a 5.5% transfer fee on properties over $10 million.

So what

In November, Los Angeles voters approved Proposition ULA, which allows for the aforementioned mansion tax on high-value properties. The additional tax revenue, which is estimated at $600 million to $1.1 billion, will be earmarked for affordable housing and programs to prevent homelessness.

Luxury homeowners in LA are now trying to offload their properties before that new tax kicks in. And many real estate agents are offering deep discounts and incentives to try to lure in buyers.

“We were trying to think outside of the box and we offered a $1 million bonus to any agent who brought the buyer to one of our listings if we closed before April 1,” said Josh Altman, CEO of Altman Brothers Real Estate and star of Million Dollar Listing Los Angeles. “If you think about the money that you’ll be giving away, it might be less for you to give something to the agent or to the buyer than you’ll have to give away after you close the deal.”

Now what

Real estate transfer taxes are a common expense sellers incur. And many states calculate these taxes based on home sale prices, with higher-priced properties incurring a higher rate of tax than those that are lower-priced. But whether you’re selling a multi-million-dollar mansion in Los Angeles or a modest home in Oklahoma City, it’s important to understand what real estate transfer taxes you’ll be on the hook for.

Many states make this information available on their respective treasury websites. And if you’re working with a real estate agent to sell your home, they should be able to help you estimate your transfer tax bill. It’s a good idea to get this information early on in the process, as it might help determine how much you can afford to spend on a new home once yours has sold.

Many home buyers use the equity they’ve built in an existing home to pay for a new one and keep their mortgage payments down. But if you’ll be losing $10,000 to real estate transfer taxes, that’s something you’ll clearly want to know about.

Meanwhile, if you’ve been looking for a luxury home in Los Angeles, this could be a great week to make an offer. You might be able to take advantage of some seriously steep discounts.

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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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A vacation isn’t as important as a roof over your head. 

After a few years of sticking close to home, travel is back in a big way. AAA found that for spring break this year, international travel is up by 30% over 2022. If you had travel plans canceled in the past few years thanks to COVID-19, a lack of money, or both, it stands to reason that you might be ready to hop on a flight and put home in the rearview mirror for a while. But how are you going to pay for that vacation? Is it a good idea to take out a personal loan for it?

Personal loans are a flexible way to borrow money, in that you can borrow for any reason you want (unlike taking out a mortgage or auto loan, which must of course be used for a home or car purchase). And personal loans come with fixed payments and a fixed interest rate, which might be fairly reasonable if you have decent credit. Despite these perks, here’s why I won’t be using a personal loan to pay for my upcoming vacations in 2023 — or any other year.

1. Travel isn’t a necessary expense

Try as we might to save money and budget for big purchases, it isn’t always feasible to do so for everything. For example, if you want to buy a home, it’s likely that you’ll need to take out a mortgage loan. Plus, tying up such a large amount of cash in a home purchase may not be a good idea if it leaves you going into debt on other expenses.

As wonderful as taking a vacation can be for your mental health, it’s not a necessary expense like a roof over your head. It’s also far more possible to save up the money to pay for a vacation in full, especially if you have a timeline of, say, six months to a year before you want to make the trip.

2. Paying interest makes a trip more expensive

While personal loans for good credit come with lower interest rates than credit cards do, the interest you pay will make your vacation cost more. This may not amount to very much if you have good credit. For example, if you can snag a personal loan at 7.99% APR, and you borrow $3,000 with a repayment term of 24 months, you’ll end up paying $256.04 in interest. But what if your credit isn’t so good? That same $3,000 paid back over a 24 month term, at 19.99% APR will cost you $664.15 in interest.

3. It could put my credit (and future borrowing) at risk

If I decided to borrow money to pay for a vacation and then my income took a hit, or I had another financial catastrophe, I might not be able to make my loan payments as originally planned. And this could put my credit score at serious risk.

Plus, I’m going to be mortgage shopping next year, and I want to make sure my debt-to-income ratio is as low as possible ahead of that. If you also have a plan to borrow for a big expense, like a house, in the near future, think twice about borrowing money for travel.

Better ways to pay for travel

Here are a few better ideas to help you cover the cost of your upcoming vacation.

Save ahead of time

If you can put money aside from your regular paychecks, perhaps in a high-yield savings account, this is definitely the best way to pay for travel. It won’t cost you any extra in interest and you won’t be risking a credit score hit.

Take less costly trips

Save your tropical vacation or two weeks in Europe for when you won’t have to go into debt to pay for it. Book a regional road trip instead. (May I recommend Old Route 66?) You can also save by visiting tourist destinations in the shoulder seasons when hotels and flights will likely be cheaper. Plus, there should be fewer fellow tourists to contend with — sounds like a win-win to me.

The right credit cards can help — with one caveat

Life is full of expensive surprises, and I’d still strongly caution you against borrowing money in any form for a vacation. That said, a 0% APR credit card will give you a period of no interest (up to a year or longer, depending on the card and depending on your credit score). If you can pay off your trip in full during that period, you’ll be in the clear. And you might consider applying for one of the best travel credit cards and using it to pay for your everyday expenses so you can rack up points or miles to defray the cost of your vacation.

While using a personal loan to pay for travel may be tempting, it’s not a good idea. Do your future self a favor and don’t promise to pay for a vacation after the fact — with interest.

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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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