Money Management

Certain behaviors are apt to catch up to consumers. 

If you’ve ever experienced an actual hangover, you may be aware that too much of a good thing can have negative consequences the morning after. Such is the fate many Americans are now at risk of from a financial standpoint, though.

In a recent interview, financial expert Suze Orman explained that she’s worried that Americans are suffering from a “financial hangover.” Here’s why.

Too much stimulus aid and spending could catch up to you

Lawmakers were pretty quick to send stimulus checks into Americans’ bank accounts during the early stages of the COVID-19 pandemic. In fact, a big reason inflation has been such a problem over the past year and a half is that consumers found themselves with extra money to spend at a time when supply chains were slowing down. That disconnect between supply and demand allowed prices to surge.

Meanwhile, the Federal Reserve has been trying to fight inflation by raising interest rates. The logic is that if it becomes more expensive for consumers to borrow money, whether in the form of a loan or a credit card balance, they might start to cut back on spending, thereby narrowing the gap between supply and demand and allowing inflation to finally cool off.

The problem, though, is that consumer spending hasn’t slowed to a notable degree in the wake of higher interest rates. And so now, Orman is worried that all of the spending and borrowing consumers have been doing over the past year or so is going to catch up to them hangover-style — and leave them sorely regretting their decisions.

Making matters worse is the fact that 67% of Americans don’t even have the money in savings to cover a $400 emergency expense, as per a recent SecureSave survey. That puts consumers in even greater danger of negative consequences should they lose their jobs or start struggling to keep up with the existing debt they’ve taken on.

It’s time to cut spending and focus on savings

At this point, it’s clear that the Federal Reserve is not going to back down on interest rate hikes, so consumers should expect the cost of borrowing to remain expensive and keep rising. And that should serve as a wake-up call to change some financial habits.

Those without money in a savings account should make every effort to boost their cash reserves so they have funds set aside for emergencies. Thankfully, companies like SecureSave make it easy for workers to build emergency savings via their employers, through automatic payroll deductions. (And if your company doesn’t offer a program like this, talk to someone in your benefits department about putting one in place.)

Meanwhile, the time for consumers to stop spending extra and borrowing money is now. Consumer credit card debt rose to $930 billion at the end of 2022, reports TransUnion. That’s up from $785 billion just one year prior. With interest rates climbing, consumers should focus on paying off the debt they have and shoring up their finances so that if broad economic conditions start to decline, they’re not totally left in the lurch.

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Seeing a Broadway show doesn’t have to be expensive. 

While visiting the Big Apple, many tourists choose to see a Broadway show. Investing in live entertainment is an excellent way to support local artists and can make for a memorable day or evening out on the town. But buying Broadway tickets can get expensive. Luckily, there are several ways to get a great deal on tickets to some of the best Broadway performances.

1. Visit a TKTS ticket booth

If you’re looking to spend less on tickets, you may want to consider going to a TKTS ticket book to score cheaper same-day Broadway and off-Broadway tickets. Booths are available at Times Square and the Lincoln Center. You can save up to 50% on ticket prices by doing this.

2. Play the lottery to win big

Looking to attend a popular show but don’t want to pay the regular ticket price? Many Broadway shows hold ticket lotteries so more people can attend performances, regardless of their financial situation. For lottery winners, the savings can be significant.

3. See a matinee performance

If you’re open to seeing a performance during the daytime instead of at night, you could save money. Some performances have limited matinee showings, and these tickets are usually cheaper than nighttime performances. This is a great option if you have a flexible schedule.

4. Buy rush tickets

Some Broadway performances sell discounted rush tickets. When available, these tickets are sold directly at the box office on a first-come, first-serve basis. If you’re looking for a significant discount, check to see if the show you want to see has rush tickets available for purchase.

5. Become a Theatre Development Fund member

Eligible consumers can score discounted tickets through the Theatre Development Fund. Membership costs $40 a year, but members can save up to 70% on the cost of tickets. The following people can become TDF members:

ArtistsPeople ages 30 and underStudentsTeachers and school staffClergy membersRetireesSeniors ages 62 and upUnion membersIndividuals on government disabilityGovernment employees and civil servantsMembers of the armed forcesFreelancers and self-employed workersNon-profit staff membersNon-exempt, full-time hourly workers eligible for overtime payTimes Square Alliance Crossroads subscribers

6. Save money with standing-room-only tickets

Want to see a show and don’t require a seat? Another way to save on ticket costs is to purchase standing-room-only (SRO) tickets. You can buy these cheaper tickets at the box office on the same-day as the performance. Not all shows offer SRO tickets, but if they’re available, you can keep your entertainment spending to a minimum.

7. Use ticket deal apps and websites to avoid overspending

You can also save money using deal apps and websites to buy tickets. TodayTix is one company that can help you find the best ticket deals. Before draining your checking account purchasing regular-priced tickets, check to see if you can get discounted tickets first.

Entertainment can be affordable

Entertainment can be affordable if you take advantage of money-saving deals like this. You can stretch your New York City vacation budget further by purchasing discount Broadway tickets. For additional ways to save money, check out our personal finance resources.

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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.
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Pet owners should read this advice to make sure they have sufficient insurance coverage.  

Veterinary care can be expensive. A typical wellness exam usually runs between $20 and $85, not including vaccines, while an ultrasound could cost around $175 and lab could run about $250 or more.

Pet insurance can help owners cover some of these costs. But not everyone has this coverage, or enough of it. Pet owners who don’t want to drain their bank accounts — or, worse, end up in debt to cover veterinary care — need to make sure they have a sufficient amount of protection in place.

The big question, though, is how much pet insurance is actually needed and how can owners tell if they are underinsured and lacking the coverage they require.

How to determine if a pet insurance policy provides enough coverage

There’s a very simple way for pet owners to determine if they are underinsured. They need to look at whether their policies, plus the funds they have available for pet care, would be sufficient to provide the medical assistance their animal needs if faced with an expensive medical issue.

In other words, if a pet owner would be willing to spend up to $10,000 to get care for an ailing animal, the pet owner would want to make sure that between their insurance and their savings, they would have $10,000 to spend. This means they would need to be certain that their policy offered at least $10,000 per year or per condition. And since most pet policies reimburse for covered treatment, the pet owner would need to make sure they had $10,000 to spend on treatment.

If a pet owner is willing to spend an unlimited amount to save an animal’s life, they would want to ensure they have pet insurance that would allow them to do whatever was necessary to care for their animal. This could mean finding a policy that had no lifetime caps or limits — and making sure the annual deductible would be affordable for them to meet each year.

Pet owners will also want to be certain their policy covers both accidents and illness because otherwise they might not be able to afford the medical assistance they need in certain situations. For most people, wellness care isn’t included in pet insurance and that’s fine for owners who had funds set aside to pay for that. An owner who doesn’t have money saved for routine vet care might want to look into buying a wellness plan as a rider.

Pet owners interested in using alternative therapies, such as chiropractic care, will also need to make sure their pet insurance covers this as not all do. And owners should make certain their policy covers things like dental services if they secure these services for their pet and can’t pay out of pocket to cover the entire amount.

By thinking about how much care might be needed in a worst-case scenario and making sure a policy will be sufficient to provide it, pet owners can be certain they are not underinsured and at risk of having to make tough choices when something goes wrong.

Buy pet insurance ASAP

It is important for any pet owner to buy a pet insurance policy as soon as possible. Policy coverage will exclude pre-existing conditions and this could be a huge problem for owners whose animals develop illnesses they’ll need lifetime care for.

Buying the right amount of coverage sooner rather than later can help owners provide the care their companion animals deserve.

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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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Make sure it’s something your account offers. 

To say that 2022’s stock market was rocky would be an understatement. At this point, many investors are still reeling from losses in their brokerage and IRA accounts. And we don’t know what 2023 has in store for the stock market.

A good way to protect yourself from losses during periods of stock market volatility is to diversify your holdings. This means investing in a wide range of stocks across different market sectors, as well as holding different asset classes.

But even in a less turbulent market, it’s still a good idea to own assets across different segments of the market. And one brokerage account feature makes diversifying even easier to do. So if you’re looking to open your first brokerage account, or to move your money into a new one, it pays to be on the lookout for a brokerage that offers fractional shares.

The upside of fractional investing

For years, investors who wanted to own stocks had to either wait until they could afford to purchase a full share at a minimum or pass on the opportunity. But nowadays, you can invest in the most expensive companies with limited funds thanks to fractional shares.

Fractional shares allow you to buy a piece of a share of stock rather than invest in a full share. In exchange, you get partial ownership and partial benefits. So, let’s say you invest in a company whose share price increases by $100 apiece. If you own half of a share, you’ll profit to the tune of $50. And if that company pays a quarterly dividend of $40, you’d get a $20 payment.

What makes fractional investing so valuable is that it can really set the stage for a nice, diverse portfolio. That’s because pricier stocks won’t necessarily be out of reach.

Let’s say you own a bunch of tech, energy, and healthcare stocks, and you decide you want to branch out into different market sectors. You may decide to invest in some restaurant stocks, and you might land on Chipotle. But at roughly $1,500 for a single share, that might be a stretch for you financially.

If your brokerage account, however, lets you buy shares on a fractional basis, you don’t necessarily have to spend $1,500 to buy Chipotle stock. You could instead buy a third of a share for about $500.

In fact, the danger in buying expensive stocks is tying up a lot of money in what could be a single share. But with fractional investing, you can spread out your money without having to pass on the opportunity to own the stocks you want.

Does your brokerage account offer fractional shares?

Fractional shares are a fairly new thing, and they’ve become more commonplace over the past few years. At this point, many brokerage accounts offer investors the option to buy fractional shares. But if yours doesn’t, you may want to think about moving your money somewhere else so you can better diversify your holdings and not take on too much risk with a single stock or company.

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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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