Money Management

Did you go a similar route? 

Over the past year, the cost of many common expenses has risen. And healthcare is one of them. In January, medical care services were up 3% on an annual basis, as per that month’s Consumer Price Index.

Given the generally high cost of healthcare to begin with and the impact of inflation, it’s not all that surprising to learn that consumers are delaying medical care due to money issues. But what is surprising is the number of consumers who are being forced to postpone health treatment.

The number of people delaying healthcare is growing

In a recent Gallup poll, 38% of Americans put off medical care due to the cost involved. That’s considerably more than the 26% of Americans who went the same route in 2021.

Of course, it’s easy to see why more people are delaying medical care. Inflation surged in 2022, forcing many consumers to rack up credit card debt and deplete their savings. And there wasn’t any stimulus aid to be had, unlike in 2021. So all told, it’s not so shocking that healthcare fell by the wayside.

But putting off medical care could have very serious consequences. In some cases, it could mean making an existing issue even worse. In other cases, it could mean incurring costlier bills in the course of treatment. So it’s really important to do your best to save for healthcare costs, despite the challenge of doing so.

Make medical care a priority

It’s certainly not easy to carve out room for medical spending when every expense is so elevated these days. But it’s best to do what you can to build up some savings for healthcare expenses.

Now, you could just pad your regular savings account and take funds from there when medical bills arise. But if you’re eligible to contribute money to a health savings account, or HSA, that’s an even better bet.

HSA contributions go in tax-free, so there’s some immediate savings there. You can also invest the money in your HSA that you don’t need to use right away and watch it grow on a tax-free basis. HSA withdrawals are tax-free as well, provided you use that money for qualified medical expenses.

Best of all, HSA funds never expire. So you don’t have to worry about not using up your plan balance every year.

If you don’t have a health insurance plan that’s compatible with an HSA (which may be the case if you’re not on a high-deductible plan), then you could see if your employer will allow you to sign up for a flexible spending account (FSA) instead. FSAs are more limiting in that you have to use up your funds every year or risk forfeiting that money, but you can still reap tax savings in the form of tax-free contributions.

See what free benefits you’re entitled to

Saving money for healthcare could help you receive key medical treatments as soon as possible. But at the same time, it always pays to see what free wellness benefits you may be entitled to as a health insurance plan enrollee.

Most plans allow you one free physical and associated blood work every year. Women are also commonly entitled to a free annual mammogram once they reach a certain age. Explore your plan benefits so you don’t pass up no-cost care accidentally.

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 

A lack of banking options can lead to expensive alternatives. 

Imagine that the nearest bank to your home is 10 miles away. Due to the lack of competition, that bank can charge expensive fees for basic services like checking or savings accounts.

If there were more banks located in your neighborhood, they would all have to compete for your business, and you would be free to choose the financial institution that best meets your needs. However, you live in what the Census Bureau refers to as a “bank desert.” And that’s where mobile banking comes in.

Mobile banks

A mobile bank — sometimes called a “bank on wheels” — is nothing new. Mobile banking has long been used to service areas hit by natural disasters, like the places impacted by Hurricane Katrina in 2005. Today, they’re used to fill the gaps in banking services.

Mobile banks are typically housed in large vans and offer most of the services offered through a traditional bank or credit union. For example, a bank customer can open a savings or checking account, take out a loan, or stop by for financial advice. Due to security reasons, mobile banks do not come equipped with ATMs, but they do make life easier in other ways.

Say there’s a 75-year-old retiree who no longer drives and they live several miles away from their nearest bank branch. If they don’t have easy access to their bank, they are far more likely to fall prey to the check cashing and payday loan shops that dot their neighborhood.

If a mobile bank comes to them, they won’t have to resort to paying sky-high fees to cash a check or 400% interest to take out a short-term loan.

Closing faster than they open

Nearly 10% of all bank branches in the U.S. shut down between 2017 and 2021. A full one-third of closures were in low- to moderate-income, minority neighborhoods. In 2021 alone, the number of U.S. bank closures hit a record high, leaving neighborhoods across the country either underbanked or unbanked.

When an individual is underbanked or unbanked, they often turn to alternative financial services to meet their basic needs, including check cashing and payday loan stores. These alternative financial services can trap borrowers in a cycle of debt that is nearly impossible to break free from.

The majority of bank closures occur in minority areas, leaving Black and Hispanic communities disproportionately vulnerable. A 2022 Federal Reserve report indicated that 40% of Black adults are unbanked or underbanked. Among Hispanics, the percentage of unbanked or underbanked is 30%, or three out of 10 people.

A long time coming

Despite the fact that more mobile banks took to the roads during the pandemic, minority neighborhoods continue to be underserved. Part of the problem can be traced back to the 20th-century policy of redlining.

The Federal Reserve describes redlining as “the practice of denying a creditworthy applicant a loan for housing in a certain neighborhood even though the applicant may otherwise be eligible for the loan.”

In the 1930s, employees with the federal Home Owners’ Loan Corporation drew lines on maps and colored some neighborhoods red. These neighborhoods were labeled as “hazardous” for bank lending because of the presence of African Americans or European immigrants, particularly Jews.

While the practice has been outlawed since 1968, that doesn’t mean minority households have the same success rates with loans as everyone else. For example, in 2020, 16.1% of all mortgage applications were denied. Of those denials, 27.1% were Black applicants, by far the highest denial rate.

And it’s not just mortgage loans; minorities also have a tougher time landing business, auto, and personal loans. That may be due, in part, to the relative lack of generational wealth among minority households. The hope is that banks on wheels can help reverse the trend.

For most of us, financial success begins with learning about things like debt reduction and how to invest, and that requires access to financial tools. While mobile banks may not be fancy, they can still provide underserved communities a place to learn more about how financial matters work and how to make the most of their money.

These savings accounts are FDIC insured and could earn you 13x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you 13x the national average savings account rate. Click here to uncover the best-in-class picks that landed a spot on our shortlist of the best savings accounts for 2023.

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.Dana George 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.

 Read More 

Drivers should read this before buying car insurance. 

Car insurance is required by law, but many drivers should buy more than the minimum insurance coverage. Otherwise, they might be underinsured.

Being underinsured means a driver doesn’t have sufficient insurance coverage in place to transfer all the risk they need to so their assets are protected. A driver who is underinsured could end up having to drain their bank account to pay essential bills in the event something goes wrong with their vehicle.

But, how can drivers tell if they are underinsured? Here are the questions motorists need to ask to make sure they have the right coverage.

Do you have the right kinds of insurance?

Not having the right kinds of insurance is a common mistake that results in many people being underinsured. That’s because states typically require only liability coverage which provides no protection for the policyholder’s own vehicle.

Most people need collision coverage to pay for repair bills if they are involved in a crash that’s their fault, as well as comprehensive coverage for other things that may go wrong, such as a car being stolen or a tree falling on it.

A motorist who couldn’t easily afford to replace their vehicle out-of-pocket and who doesn’t have collision and comprehensive coverage is underinsured and should consider buying these added protections ASAP.

Are your policy limits high enough?

Another key question is how high the policy limits are for different kinds of coverage. Specifically, many people buy only the minimum required liability insurance and that is not usually enough.

Liability insurance pays for losses suffered by accident victims if a policyholder causes a crash to happen. It can cover injuries and property damage. If a driver has too little liability coverage and seriously hurts someone or damages property badly, it’s possible that driver could be sued personally and find their own assets at risk.

For example, a driver who has $25,000 per person and $50,000 per accident in liability coverage who seriously injures two people who incur $250,000 in medical bills would be extremely underinsured.

Drivers should make sure to buy more than the minimum — enough that they are confident their own assets won’t be at risk if the worst happens. Finance expert Dave Ramsey recommends buying $500,000 worth of coverage, and that’s a good amount for most people.

Is your deductible affordable?

Finally, drivers should consider whether their deductible is affordable. This is the amount paid out of pocket for insurance coverage. A higher deductible means lower premiums so it can be tempting, but drivers without enough savings to cover the deductible would be in a difficult position in the event of an accident. So, motorists who don’t want to be underinsured should choose a deductible based on how much they have accessible in savings.

By asking these three key questions, drivers can determine if they have a sufficient amount of auto insurance coverage or if they would face out-of-pocket losses that would be hard for them to handle in the event of a crash or other issue. Ask these questions ASAP so you can buy more protection before it’s too late.

Our best car insurance companies for 2022

Ready to shop for car insurance? Whether you’re focused on price, claims handling, or customer service, we’ve researched insurers nationwide to provide our best-in-class picks for car insurance coverage. Read our free expert review today to get started.

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 

One is the costliest number. 

Being single has its pros and cons. One of the major drawbacks is the “singles tax,” a term for the added cost of living on your own.

For a perfect example, look no further than renting a home. Renters who live alone pay a singles tax of nearly $7,000, and up to $19,500 in New York City, according to a study by Zillow. Traveling is another area where singles often pay higher rates, with hotels, rental cars, and cruises being a few things that typically cost more for singles.

How much of an issue is the singles tax? Recent research from Forbes shows that most singles feel the burden of it. And some Americans even think twice about breaking up because of it.

How the singles tax is affecting American adults

A recent survey by Forbes Advisor found that 93% of singles acknowledged the burden of the singles tax. Couples can split expenses, so they end up paying less per person for some bills, such as TV and internet. Many companies also offer discounted rates if multiple people get service together, like insurance and cell phone service.

While the singles tax isn’t new, 59% of American adults say that inflation is making it worse. With how rapidly the cost of living has increased, it has become even harder to get by on a single income. Respondents specifically pointed out housing, utilities, and groceries as the areas where inflation has done the most damage.

One in three respondents even said they had stayed in a relationship longer because of the financial benefits. That includes 14% who stayed in a relationship because of a partner supporting them financially. However, 59% said that being able to avoid financial conflicts with a partner might make paying the singles tax worth it.

What you can do about the singles tax

Like older relatives asking if you’ve found someone yet, the singles tax is one of the frustrations that comes with being single. So, outside of downloading more dating apps, what can you do about it?

If you really want to avoid the singles tax, the best option is to live with someone else, such as roommates or family. Two- and three-bedroom homes usually cost much less per room than smaller ones. You’ll also be able to split bills, so you’ll likely pay less for power, water, internet, and other expenses.

I realize that if you’re used to living alone, getting a place with a roommate may not exactly fill you with joy. You’ll need to decide if you value your privacy or saving money more. Your other option would be to look for cheaper housing options, such as a smaller apartment.

Keep in mind that whether you’re single and living alone, you have roommates, or you’re in a relationship, it’s always important to have your personal finances in order. There are a few money rules every adult should follow:

Save and invest a portion of your income every month. A standard recommendation is 15% to 20%, but you can choose any amount that works for you.Build and maintain an emergency fund. Aim to have at least three to six months of living expenses in your emergency savings. It takes time to save this much, so make it one of your goals and put money into your emergency fund every month.Don’t overspend on your fixed costs. Ideally, essential expenses shouldn’t take up more than 50% to 60% of your income.

You may still deal with the singles tax from time to time. But if you follow those rules, you’ll be in good shape financially.

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.Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Zillow Group. The Motley Fool has a disclosure policy.

 Read More 

Image source: Getty Images
What happenedIn February, the U.S. economy added 311,000 jobs, reported the Bureau of Labor Statistics. That national unemployment rate, which previously sat at 3.4%, ticked upward slightly to 3.6%, which is comparable to where the jobless rate was before the COVID-19 pandemic.So whatIn January, the U.S. economy added more than 500,000 new jobs, so by contrast, February’s numbers seem far more moderate. But February’s job gains also exceeded economists’ expectations, as they anticipated job growth closer to the 200,000 range. And that’s an indication that the job market as a whole is pretty strong.”Some of these sectors, especially services, are still recovering from the pandemic,” said Eugenio Alemán, chief economist at the financial services firm Raymond James. “I think that puts the thought of a recession kind of in doubt.”Now whatFrom a broad economic standpoint, February’s jobs report is actually a bit of a mixed bag. Continued job growth should lend confidence to the idea that a near-term recession isn’t so likely. But we live in an age where strong economic data always seems to have a negative slant. That’s because the Federal Reserve wants to see weak points in the economy, as those could point to a slowdown in inflation.The Fed has been on a mission to cool rampant inflation since early last year. And while the annual rate of inflation was 6.4% in January compared to 9.1% the June before, the Fed has made it clear, on repeated occasions, that it’s looking for inflation to creep back toward the 2% mark. Until that happens, the central bank is likely to keep raising interest rates, making it more expensive for consumers to take out loans, finance cars, and carry credit card balances.Now the fact that job growth wasn’t nearly as intense in February compared to January could lead the Fed to calm down a bit in the context of interest rate hikes, and perhaps implement a more modest increase during its next meeting. On the other hand, February’s jobs numbers may be just strong enough to fuel a more aggressive rate hike, which would only burden cash-strapped consumers needing to borrow money.All told, a bigger driver of the Fed’s next rate hike decision is apt to be February’s Consumer Price Index (CPI), which won’t be released until next week. If February’s inflation readings come in higher than expected, that, combined with a pretty positive jobs report, is likely to lead to more aggressive rate hikes in the near term. But if the CPI shows a cooling of inflation, consumers may only see a small rate hike when the Fed next sits down.Alert: highest cash back card we’ve seen now has 0% intro APR until 2024If 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 reviewWe’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

In February, the U.S. economy added 311,000 jobs, reported the Bureau of Labor Statistics. That national unemployment rate, which previously sat at 3.4%, ticked upward slightly to 3.6%, which is comparable to where the jobless rate was before the COVID-19 pandemic.

So what

In January, the U.S. economy added more than 500,000 new jobs, so by contrast, February’s numbers seem far more moderate. But February’s job gains also exceeded economists’ expectations, as they anticipated job growth closer to the 200,000 range. And that’s an indication that the job market as a whole is pretty strong.

“Some of these sectors, especially services, are still recovering from the pandemic,” said Eugenio Alemán, chief economist at the financial services firm Raymond James. “I think that puts the thought of a recession kind of in doubt.”

Now what

From a broad economic standpoint, February’s jobs report is actually a bit of a mixed bag. Continued job growth should lend confidence to the idea that a near-term recession isn’t so likely. But we live in an age where strong economic data always seems to have a negative slant. That’s because the Federal Reserve wants to see weak points in the economy, as those could point to a slowdown in inflation.

The Fed has been on a mission to cool rampant inflation since early last year. And while the annual rate of inflation was 6.4% in January compared to 9.1% the June before, the Fed has made it clear, on repeated occasions, that it’s looking for inflation to creep back toward the 2% mark. Until that happens, the central bank is likely to keep raising interest rates, making it more expensive for consumers to take out loans, finance cars, and carry credit card balances.

Now the fact that job growth wasn’t nearly as intense in February compared to January could lead the Fed to calm down a bit in the context of interest rate hikes, and perhaps implement a more modest increase during its next meeting. On the other hand, February’s jobs numbers may be just strong enough to fuel a more aggressive rate hike, which would only burden cash-strapped consumers needing to borrow money.

All told, a bigger driver of the Fed’s next rate hike decision is apt to be February’s Consumer Price Index (CPI), which won’t be released until next week. If February’s inflation readings come in higher than expected, that, combined with a pretty positive jobs report, is likely to lead to more aggressive rate hikes in the near term. But if the CPI shows a cooling of inflation, consumers may only see a small rate hike when the Fed next sits down.

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