Money Management

Which strategy is right for you? 

There isn’t really a way around it: Saving money is crucial to meeting your long-term goals. But knowing that doesn’t necessarily make your job any easier. Even if you have the best of intentions, it’s easy to get off track.

If you’ve dumped your savings strategy time and time again, the following three tips might be just the thing you need to finally make a long-term commitment.

1. Create rewards for yourself

Saving involves delayed gratification, and the longer you have to wait to reap your reward, the more difficult it can be to stick with it. So why not set up smaller rewards along the way?

These don’t have to be related to spending money. For example, if your goal was to have $1,000 in your savings account, you could reward yourself by preparing a favorite dessert or doing a fun activity with friends every time you get $100 closer to your goal.

You decide which rewards will motivate you the most. Then, map out the milestones along the way when you’ll earn them. If you need help sticking to your plan, enlist a friend to help you track your progress and celebrate your wins with you.

2. Create a savings challenge

If little rewards aren’t enough for you, a savings challenge might work better. There are a lot of these, so you can choose the one that best fits your budget and goals. For example, you could spend a month not buying anything other than essentials or you could try to save $2,023 in 2023.

Gamifying your savings like this can give you additional motivation to keep going. Research from Commonwealth found that gamifying savings led users to save 25% more frequently than those who didn’t use this approach.

This is another strategy you could bring a partner into if you wanted to. If you’re saving on your own, you could share your progress updates with them. Or you could compete in a head-to-head challenge to see which of you could save more over a set period of time.

3. Try a budgeting app

Budgeting used to require some sort of spreadsheet and a lot of math, but apps can now do a lot of the work for you. You can link them to your bank account and use them to track your spending across various categories. This can give you valuable insights into where your money is going each month and where you may want to cut back.

Some budgeting apps even come with useful savings tools, like the ability to round up every purchase to the nearest dollar. They automatically deposit the change into your bank account so you save a little with every purchase.

It can take some time to find a savings strategy that works for you, and that’s OK. You might try one of the tips above to find out it’s not a good fit. Don’t let that discourage you. Try a few approaches until you find your perfect match.

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If you make the right money moves, you can crawl out of credit card debt faster and avoid taking on more. 

Credit card debt is a problem for many consumers in the United States. This type of high-interest debt can add up quickly. If you’re struggling to pay down your credit card debt, please know that you’re not alone. But you may be able to change some of the following habits to pay off your debt faster.

1. Not prioritizing debt with the highest interest rate

When you have high interest debt, like credit card debt, following the debt avalanche method can be beneficial. With this debt payoff method, you’ll first focus on paying off the debt with the highest interest rate and put as much extra money toward that debt to pay it off sooner. Doing this will save you money on interest. While following this strategy, ensure you continue to make payments on your other cards. It’s never a good idea to skip payments.

2. Making late payments

When you miss payments entirely or pay your credit card bills late, your card issuer will charge late fees. These fees can be costly and add to your existing balance. Additionally, unpaid debt will be subject to interest charges. It’s best to pay your credit card bills (and other bills) on time if you want to get out of debt faster.

Another reason this is a good money move is that your payment history is the most significant factor determining your credit score — it makes up 35% of your score. By paying your bills on time, you can work to improve your credit score and avoid negative marks on your credit report.

3. Paying only the minimum amount due

When you use a credit card and don’t pay the entire balance off monthly, your card issuer will charge you interest. Credit card interest rates can be high, making these fees costly. Instead of only paying the minimum amount due, you should aim to pay off your entire balance every month. If you never carry a balance, you won’t be charged interest.

4. Spending more than you can afford

When you use credit cards, you’re borrowing money to pay for purchases and must pay your debt back. For many consumers, it can be tempting to spend beyond their means and this is a dangerous habit. If you want to get out of debt and stay out, be sure to consider your financial situation before charging your cards. Using a budgeting app to set a budget can help you gain better control over your finances.

5. Continuing to use credit cards while you have outstanding debt

If you already have credit card debt, it’s in your best interest to stop using your credit cards. You’ll be adding to your existing credit card balance by continuing to charge your cards. The more you ignore your debt, the faster credit card interest charges pile up. If you struggle with overspending, you may want to hide your credit cards for now.

Credit card debt doesn’t have to be forever

While debt can be scary and stressful, it’s possible to get out of credit card debt. The first step is to figure out how much debt you have, and then you can make a plan. A popular way to tackle debt is to transfer your existing credit card debt to a balance transfer card to take advantage of promotional 0% APR interest rates while you pay off the balance. Check out the best balance transfer credit cards to learn more.

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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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It may be time to relocate. 

If you’ve been contemplating a move to a new city or state, you’re in good company. In 2022, 27.3 million Americans packed their bags and moved elsewhere, according to a new survey by HireAHelper. That’s roughly 4% more than the number of people who moved in 2021.

What’s surprising, though, is the primary reason why people moved, and it was none other than foreclosure or eviction. The second most common reason for a move was a change in marital status.

When we dig a little deeper, though, it’s actually not such a shock that foreclosures and evictions played a role in people’s decision to move. During the pandemic, protections were put into place to prevent evictions and foreclosures, like the option to put mortgage loans into forbearance. But in the absence of those provisions, many people no doubt struggled to keep up with their housing payments, especially as inflation surged.

If you’re thinking of moving, you’re obviously aware that it’s a big decision, and that there can be a sizable cost involved. But here are a few signs that a move might work to your benefit.

1. You can’t find a rental for under 30% of your income

As a general rule, your housing costs should not exceed 30% of your take-home pay. If you go beyond this threshold, you might struggle to cover your remaining bills as well as your rent itself.

If rents have risen dramatically where you live, and you can’t find a reasonably comfortable home with a rent you can afford, then that alone is a good reason to move. You don’t want to stretch yourself so thin by taking on giant rent payments that you’re forced to rack up credit card debt to cover your remaining expenses.

2. Jobs are hard to come by

If you live in an area where it’s hard to find a job, then that could be a problem both now and in the future. Even if you’re employed right now, it may be that your career growth will be limited by staying put. And also, if you live in an area where there aren’t many jobs, you might struggle if a recession hits and job loss becomes more prevalent.

3. You don’t have access to the amenities you want

Maybe you love being able to walk to restaurants and cafes. Or maybe you’re really into nature and want access to nearby hiking trails and parks.

If your city doesn’t offer the perks you’re after, and you don’t have any particular ties to that area, then it could pay to pick yourself up and move elsewhere. After all, if you’re going to spend a large chunk of your income on housing, you might as well make it so you’re able to maintain the lifestyle you want.

Moving is a big decision — one that will uproot your life in many ways. As such, you’ll need to budget carefully for it and really think things through. But if these factors resonate with you, then a move could be something that improves your life, both financially and logistically.

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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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It’s not a great situation to land in. 

The idea of a timeshare can be quite appealing if there’s a specific vacation area or community you like to visit each year and you want to be guaranteed a place to stay during your travels. But buying a timeshare is not an inexpensive endeavor. In addition to the cost of your timeshare itself, which you may need to raid your savings account for, you’ll also face ongoing maintenance costs.

Dave Ramsey says timeshare dues come to $1,000 a year on average, but they also have the potential to rise over time. And if you don’t keep up with those dues, you may not like the consequences.

When you don’t pay your timeshare dues

When you sign a mortgage, you’re entering into a contract that requires you to keep paying your lender or otherwise, eventually, risk losing your home. Timeshares work similarly. When you sign a contract to purchase a timeshare, you’re committing to paying your timeshare dues in a timely manner. If you don’t, you’ll be in violation of your contract, and from there, a host of consequences could ensue.

At a minimum, you might be penalized financially for being late with your timeshare dues. And if you don’t get current, your timeshare management company might send the matter over to a collections agency.

Once that happens, you can bank on a series of persistent letters and phone calls from people whose job it is to make sure you end up paying what you owe. Also, once you reach the point of the matter being sent to collections, you risk major credit score damage. That could make it difficult to borrow money the next time you need to.

Eventually, if you let things drag on long enough, you’ll likely lose access to your timeshare for not paying your dues. You can think of it as a foreclosure of sorts. Granted, it’s not the same thing as your primary home being foreclosed on, because that’s a property you don’t share with other people. So in this case, a bank won’t repossess your timeshare and sell the entire building. Rather, your timeshare company will probably have the right to revoke your ownership and sell your timeshare to another buyer.

What to do if you can’t pay your timeshare dues

It’s possible you might encounter some financial difficulties that make it tough, or impossible, to keep up with your timeshare dues. If that’s the case, don’t ignore the problem — that’s probably the worst thing you can do.

If you want to keep your timeshare, talk to your management company about options. It may be willing to give you a grace period for paying those dues.

Otherwise, selling your timeshare is a good way to get out of that situation without causing damage to your credit score. Finding a buyer for a timeshare can be tricky, though, so you shouldn’t expect that sale to happen right away.

All told, when you buy a timeshare, you commit yourself to paying timeshare dues. And so you shouldn’t expect to get off easy if you stop making those payments. The more proactive you are about addressing the issue of not being able to pay your timeshare dues, the less financially painful the situation might be.

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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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