Money Management

You won’t believe which big social network didn’t make the cut. 

When young adults want financial advice, more often than not, they go to social media platforms. 79% of millennials and Generation Z said they’ve gotten financial advice from social media, according to a survey by Forbes Advisor. Just 35% said they primarily got advice from family and friends, and 33% from internet searches.

Forbes Advisor also asked respondents which social media platforms they used and trusted for personal finance information. In the list below, we’ll go over the top five, as well as how good each platform tends to be for financial advice.

1 (tie). Reddit

47% receive financial information on Reddit37% trust Reddit for financial advice

Reddit is tied for first in terms of popularity, and it’s the most trusted social media platform for financial advice. It’s good to see that people trust Reddit over other platforms, because it typically has higher quality, more accurate information.

The reason for that is because popularity isn’t nearly as important on Reddit as on most social networks. Financial advice doesn’t make the rounds based on how many followers a Redditor has. Users upvote and downvote comments and posts based on their quality. On financial subreddits, good advice gets upvotes and rises to the top. Bad advice gets downvotes and responses explaining why it’s wrong.

1 (tie). YouTube

47% receive financial information on YouTube34% trust YouTube for financial advice

YouTube is even with Reddit popularity-wise, but not quite as trusted by young adults. However, it’s still well ahead of the rest of the pack in that area.

There’s definitely plenty of quality financial content on YouTube. Videos tend to be longer than those on other platforms, and the recommended range is generally from five to 15 minutes. That’s good for financial advice, because if it’s too short, it may miss important details. But it can be hard to gauge the trustworthiness of YouTube videos, especially since you can no longer see how many dislikes a video has.

3. TikTok

32% receive financial information on TikTok14% trust TikTok for financial advice

Nearly a third of young adults get financial advice on TikTok. A much smaller percentage trust the advice they’re getting there, and that’s probably for the best.

Most TikTok videos range from 30 to 60 seconds, so they provide quick money tips instead of in-depth information. There’s nothing wrong with that, but if you want videos that teach you about finance, YouTube is a better choice.

TikTok also seems to be a hotbed for dubious financial schemes and conspiracy theories, even more so than other social platforms. There are some reputable financial TikTokers, but its popularity and the ease of making short videos have attracted bad actors, as well.

4. Instagram

21% receive financial information on Instagram3% trust Instagram for financial advice

Along with TikTok, Instagram has the biggest discrepancy between the number of young adults who use it and who trust it. Even though just over one in five will get financial information on Instagram, hardly any trust that information.

Since it started as a photo-sharing app, Instagram isn’t the most well-suited social network for financial advice. It’s great for showing the world pics of your vacation, but less helpful for learning about the travel credit cards that can help you book said vacation. Users can also share videos, but YouTube is better for video content, both for viewers and content creators.

5. Twitter

18% receive financial information on Twitter4% trust Twitter for financial advice

Twitter is another platform that some young adults use for financial advice, but that isn’t very trusted. Like TikTok and Instagram, its format also isn’t the best for financial content.

The 280-character limit on tweets makes it difficult to share detailed advice. Content creators who want to go into detail need to either publish a tweet thread or share a link to an article or video. Twitter has recently expanded its limit to 4,000 characters, but only for users who pay for a Twitter Blue subscription.

Honorable mentions

Facebook is the most popular social network in the world, but it’s not widely used for financial advice. Only 11% of young adults said they use Facebook for this, and a mere 2% trust financial information from Facebook.

Only 7% of young adults reported using LinkedIn for financial advice. Although LinkedIn was the least popular, it had an equal percentage (7%) who trusted the financial information they found there.

Be careful with financial advice on social media

Financial advice on social media is a mixed bag. No matter what your platform of choice is, don’t take anything at face value. Whenever money is involved, it’s good to do plenty of research before following someone’s advice.

If you like using social media to learn about money, the best thing you can do for yourself is find trustworthy sources of information. That could be a few financial subreddits you like, or channels from content creators you’ve looked into who have good reputations.

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 

It’s not a given that all prices will come down. 

It’s been a struggle for many people to cover their living costs ever since inflation started surging in 2021. And over the past year and a half, many consumers have had to go the extreme of raiding their savings accounts or racking up credit card debt just to keep up with their basic expenses.

In January, living costs on a whole were up 6.4% on an annual basis, as per that month’s Consumer Price Index. But in June 2022, inflation was up 9.1% on an annual basis, so January’s reading is actually a big improvement.

Hopefully, in the coming months, the general cost of living will start to come down. And that’s a scenario you may be eagerly awaiting. But one thing you shouldn’t assume is that the businesses you frequent will automatically drop their prices once inflation starts to cool. Here’s why.

It’s a matter of habit

Rampant inflation has been with us for many months. And a lot of businesses both large and small raised their prices quite some time ago to compensate for the higher cost of procuring goods and/or paying for labor.

Now, you might assume that your local coffee house, which raised the price of a large iced coffee from $3 in 2021 to $4 in 2022, might lower that price once inflation cools off. But chances are, it won’t.

The reason? If you’ve been paying $4 for that large iced coffee for the past nine months, then chances are, you’ll continue doing so. So will all of the other loyal customers who have been frequenting that coffee shop. So why should the owner of that business feel motivated to drop their price when they can get away with charging more?

And it’s not just small businesses that might make the decision to keep higher prices around. Larger ones might do so as well. So all told, lower inflation readings may not be something to get too excited about, because chances are, a number of your expenses will remain elevated for the long haul.

How to keep up with higher prices

If you’re having a hard time paying your bills now based on what your expenses look like, the bad news is that things may not change all that much even once inflation cools. So a good bet is to be more mindful of your spending to really stretch your paycheck.

Put yourself on a budget where you allocate specific dollar amounts to different bills and spending categories. And be careful when spending money on non-essential purchases.

Going back to our example, if you can afford a $4 ice coffee three times a week, and it makes you happy, buy it. But only do so if you’re managing your expenses and aren’t running up credit card debt every month.

To be clear, some living costs, like groceries and utilities, might creep down to more moderate levels once inflation softens overall. But don’t expect every expense of yours to shrink — and prepare for some businesses to stick with the higher prices they’ve been charging simply because they can.

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 

You might manage to lower your costs in a very big way. 

Inflation has been making it increasingly difficult for consumers to cover their expenses. In fact, a lot of people have had to raid their savings accounts over the past year and change just to keep up with basic bills.

But while living costs have risen across the board, the cost of food has absolutely soared. Grocery prices were up 11.3% from a year prior as of January, according to the Consumer Price Index. And it may be a while before food costs drop to more modest levels.

If you shop at Costco, you may be aware that the warehouse club giant has not been immune to price increases. And perhaps you’re spending more on groceries at Costco now than you were a year ago. But if you make these moves, you might manage to eke out more savings.

1. Check out the sales

Although Costco prides itself on its generally competitive prices, each month, it offers further discounts on a select list of items. If you’re a Costco member, you should get a coupon book in the mail that will tell you which items are being offered at a discount that month (and to be clear, you don’t need to clip any coupons — you’ll get the sale price automatically at the store). And if not, you can look at Costco’s monthly specials online.

Now to be clear, it’s not a great idea to purchase items simply because they’re on sale. But if you use olive oil regularly and are running low, and you see that Costco has it marked down in March from its usual price, then it could be a good time to stock up.

2. Upgrade to an executive membership

A basic Costco membership costs $60 a year, while an executive membership costs $120. You might think you’re saving yourself money by sticking to a basic membership. But actually, upgrading could result in more savings.

The reason? With a Costco executive membership, you’ll snag 2% cash back on your grocery purchases (and all Costco purchases, for that matter). And if you do enough shopping at Costco, you may find that you come out way ahead financially by virtue of upgrading.

3. Sample new items so you don’t buy things you end up throwing away

Costco frequently introduces new products into its lineup. But it’s a good idea to wait for those items to be available in free sample form before buying them.

When you’re talking about something you’ve never tried before, you run the risk of not actually enjoying it once you bring a bulk package of it home. And that’s a good way to throw your money away rather than save it.

Higher grocery costs could be with us for quite some time. You may end up spending more to feed your family these days than you did a year or two ago. But you can still eke out extra savings at Costco by shopping strategically, choosing the right membership, and sampling new items before buying them to make sure they really should come home with 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.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.

 Read More 

The quick answer? You could end up losing a lot of money. 

Healthcare can be a huge expense — and one that catches many people off-guard. In fact, a lot of people end up with credit card debt due to medical bills they find themselves unable to pay off at once.

Now, it’s important to have money set aside for medical bills because you never know when you might end up getting stuck with them. And in that regard, you have a few options. You could simply put money into a regular savings account, or you could open a flexible spending account, or FSA, through your employer.

The upside of putting money into an FSA is that your contribution to that account is tax-free. So if you put $1,500 into your FSA, that’s $1,500 of income the IRS won’t tax you on.

But there’s a downside to funding an FSA, and it’s that you have to commit to your annual contribution at once, and you only have a limited window of time to spend your money. And if you don’t manage to use up your FSA balance by the time your plan year comes to an end, you risk forfeiting money.

Don’t lose your money

The amount of time you have to use up your FSA will vary based on the rules of your plan. In general, you’ll get access to your FSA funds at the start of the year, and you’ll have until the end of the calendar year to use that money up.

Some plans, however, are a bit more flexible beyond that point. If your FSA comes with a carryover option, you’ll get a little extra time to use up your money — usually until March 15. Or, you might have the option to roll a small portion of your FSA into the upcoming year’s balance.

But in general, if you don’t use up your FSA by the deadline imposed by your plan, you lose your money. It’s that simple. And that’s why you need to be really careful about funding an FSA in the first place.

How much should you contribute to an FSA?

A good way to determine how much money to put into an FSA is to look at your healthcare spending from the previous year. If you spent $2,000 on things like copays and medications in 2022, and you’ve just gotten a new job and are signing up for an FSA for 2023, then you may want to go with a similar number.

That said, just because you spent a certain amount one year doesn’t guarantee you’ll spend the same amount this year. And similarly, you might spend more this year than last.

Let’s say that last year, your spending came to $2,000, but this year, your child will be starting with braces. That might easily result in an extra $1,000 to $2,000 of spending, so you may want to contribute the maximum to your 2023 FSA, which is $3,050.

But if you’re not sure what your medical bills will look like, err on the side of contributing less to your FSA. You’re better off having to cover a few hundred dollars’ worth of medical expenses without an FSA than losing a few hundred dollars due to overfunding an FSA.

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