Money Management

Investing more could work to your benefit — if you can afford to do so. 

It’s more than fair to say that 2022 was a very volatile year for the stock market. So not surprisingly, some people may not be so eager to pump extra money into their brokerage accounts in 2023.

But according to New York Life’s latest Wealth Watch survey, among people who already have some money invested in the stock market, 27% are planning to invest more in 2023. Whether you should do the same, however, depends on your personal financial situation.

Can you afford to invest more this year?

If you can afford to pump more money into stocks, ETFs, and other investments this year, great. The more time you give your money to grow, the more wealth you stand to accumulate.

But if money is tight and you’re barely paying your bills on time, then investing more in 2023 probably isn’t so feasible. One thing you definitely don’t want to do is land yourself in debt because you pumped too much money into stocks and other assets. So before you make the decision to invest more, assess your ability to cover your regular bills in light of inflation.

Are there other financial goals you should be tackling first?

Investing your spare cash is definitely a smart thing to do. But before you pump additional funds into your brokerage account, make sure you’re doing well enough on emergency savings, and you aren’t carrying high-interest debt, like credit card debt.

You should, for example, have enough money in your emergency fund to cover at least three full months of essential expenses. So if you normally spend $2,500 a month on essential bills, your emergency fund should, ideally, have at least $7,500 in it. If you only have a $3,000 emergency fund, then you shouldn’t invest until you’ve added another $4,500 to that account at a minimum.

Similarly, let’s say you owe $3,000 on your credit cards, which are charging you an average interest rate of 19%. Even if you’re a really shrewd investor, you may not generate nearly that high a return in your brokerage account. So it makes sense to knock out your high-interest debt before investing your money.

Look at your whole financial picture

The idea of investing more in 2023 might seem appealing, especially because the stock market hasn’t yet fully recovered from the turbulent events of 2022. That means there are still bargains to be scooped up.

But before you put more money into different investments, take a look at your financial picture. If you’re managing your bills well, have a fully loaded emergency fund, and have no high-interest debt to your name, then by all means, invest more this year than you did in 2022. But if you’re having a hard time covering your ongoing expenses, your emergency fund clearly needs work, and you’re still carrying a nagging credit card balance, then it pays to address those issues — and resolve them — before pumping more money into your brokerage account.

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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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Prepare for your costs to climb. 

At this point, many consumers have officially cut the cord with cable. And in many cases, replacing cable with streaming services can result in a lower monthly credit card tab.

But in the past six months, a number of popular streaming services have raised their prices, including Sling TV, FuboTV, and the Hulu Live TV bundle. And now, the cost of YouTube TV is rising, too.

A price hike that’s somewhat overdue

The last time YouTube TV raised its prices was in June 2020. So it makes sense that now, three years later, customers are facing an increase.

That increase, however, is pretty steep. The cost of YouTube TV is rising from $64.99 per month to $72.99. That price change went into effect on March 16, but existing customers won’t see that increase hit until their first bill on or after April 18.

Should you keep paying for YouTube TV?

YouTube TV gives you access to more than 100 channels. A base plan comes with unlimited DVR space and allows you to maintain up to six household accounts and stream on three devices at once.

With that level of variety, you may not need to supplement your subscription with another streaming service. So the money you spend on YouTube TV on a monthly basis might represent the total cost of at-home entertainment for you, not counting the cost of internet service (which, to be fair, doesn’t necessarily count as entertainment).

But the price hike customers are looking at is pretty significant. So if you’re not sure if you should keep YouTube TV or not, you’ll really want to ask yourself these questions:

Am I using it often enough to justify the cost?Can I afford it?

If you only watch a couple of hours of TV each week, whether because you work many hours or have a lot of other hobbies, then it could pay to sign up for a less expensive streaming service instead. And if money is tight, and you’re barely able to cover your essential bills, like your rent or mortgage payment, then it may be time to cancel YouTube TV until your financial situation improves.

A lot of people are spending more money on essential bills these days due to inflation. And that situation is unlikely to change anytime soon. So if you’re barely making ends meet, now’s the time to get rid of some of the extras you might be paying for. (And if you feel that not having access to any streaming content at all is unreasonable, at least consider swapping YouTube TV for a more cost-effective alternative. A standard monthly Netflix subscription is just $15.49).

However, if you get good use out of YouTube TV and you can afford it comfortably, even with the increase, then you shouldn’t necessarily rush to cancel. After all, everyone deserves to sit back and unwind with some good (or bad) TV. And if YouTube TV offers the variety you enjoy, why not keep it around?

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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 positions in Netflix. The Motley Fool has positions in and recommends Netflix. The Motley Fool has a disclosure policy.

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Debit cards aren’t your safest online shopping payment option. 

Amazon is one of the world’s most popular e-commerce sites, and according to Statista, it generated more than $513 billion in net sales revenue in 2022. That’s an awful lot of people clicking that “Buy Now” button on product pages. Here’s the thing about the Buy Now button, though: You need to have a stored payment method to take advantage of it. And herein lies the trouble, as saving a payment method of any kind might not be a good idea. Here’s why you should avoid keeping your debit card information on Amazon.

1. Debit cards are tied to your bank account

While your debit card may look nearly the same as your credit card, it functions differently. Namely, it’s tied directly to the money in your bank account. A credit card, on the other hand, is tied to a line of credit from the card’s issuer, meaning that when you use it, you’re not spending your own money (until you use your money to pay off the credit card). If something goes wrong and a scammer gets access to your Amazon account and makes purchases, they could easily drain your bank account. And it might take a few days (or longer) for the problem to be cleared up with your bank, leaving you short on cash in the meantime.

For this reason, it pays to be extremely careful when you use a debit card to make purchases. And while you may also want to delete your credit card from Amazon, that credit card is a more secure way to make your purchase.

2. Debit cards lack the protections of credit cards

Credit cards are among the most secure payment methods. This is due to the technology involved in creating and managing them, as well as consumer financial protections. Some credit card issuers now offer virtual credit cards for online purchases, meaning your actual credit card information is kept private.

Credit cards also have more robust protections in case of fraudulent spending. If your credit card is used without your consent, you can only ever be held liable for $50 of fraudulent transactions. The best credit cards out there have $0 liability, though. If someone uses your debit card to make unauthorized purchases, the longer you wait to report it to your bank, the more money you could lose. Within two days, your liability is $50. Within 60 days, it’s $500. And if you neglect to report the fraud beyond that, you could be out all the money in your linked bank account.

3. Debit cards usually don’t offer rewards on your spending

In addition to being less secure than credit cards, debit cards often don’t come with the chance to earn cash back, points, or airline miles on your spending. Rewards credit cards do, however, and they come in a variety of flavors. You might consider a credit card that offers higher rewards on online shopping, for example. Or if you like to travel, an airline rewards card can help you pay less for your next flight.

4. Debit cards don’t help you build credit

Finally, using your debit card on Amazon isn’t going to do your credit score any favors. As you use a credit card and pay it off, you’re demonstrating to the card issuer (and future lenders who will see your credit score) that you know how to handle credit responsibly. Since your debit card is tied to your own money, debit card spending isn’t reflected on your credit.

Should you skip the saved payment method altogether?

While all of these reasons should tell you why you don’t want to keep your debit card saved in your Amazon account, you might also want to delete all your saved payment methods, including your credit card. Here’s why:

If you make it harder to shop on Amazon, you might consider your purchases more carefully and save money.You can spare yourself from accidental purchases by your kids, in the event that they gain access to your Amazon account.If you know you’ll have to enter your payment info anyway, you might be more inclined to check prices on multiple websites (and potentially find a lower price), rather than defaulting to Amazon.

Amazon can be a great place to make everyday purchases, as it sells everything under the sun — and more. Just be sure you’re using the right payment method and thinking carefully about whether it makes sense to save that payment info for later.

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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.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool has positions in and recommends Amazon.com. The Motley Fool has a disclosure policy.

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