Money Management

Shedding debt quickly can be beneficial, but you may not need to rush your home equity loan payoff. 

Since home values have been up substantially over the past few years, many consumers have capitalized on it by borrowing against their homes. And so if you have an outstanding home equity loan, you’re no doubt in good company.

New York Life’s latest Wealth Watch survey found that 22% of consumers owe money on a mortgage or home equity loan. And while you may not be in a position to pay off your home early, paying off your home equity loan ahead of schedule is another story.

But should you push yourself to get ahead of your home equity loan payment schedule? Or are you okay to pay off that loan over time as you initially planned to?

Don’t stress that home equity loan

Paying off any type of debt early can be a good thing. That’s because the sooner you pay off your debt, the less you end up spending on interest.

But if you’re going to focus your efforts on paying off debt, you should really focus on debts with a variable interest rate, like credit card balances and HELOCs (home equity lines of credit). That’s because these debts could cost you more in interest over time.

On the other hand, home equity loans, like personal loans, offer the benefit of fixed interest rates. So let’s say you’re making a $200 monthly home equity loan payment now, and it fits into your budget just fine. If you happen to have no other debt other than a mortgage, and you have extra money, then sure, pay off that home equity loan.

But let’s say you owe $200 a month on your home equity loan and you’re also juggling a few credit card balances. Those credit cards are worth tackling first, because the interest rate on your cards has the potential to rise over time, thereby resulting in even more interest charges for you. Your home equity loan payments, meanwhile, are not going to grow beyond $200 a month, so they shouldn’t take priority over the credit cards.

Along these lines, if you can afford your home equity loan payments, there’s no need to put undue stress on yourself to pay off your loan ahead of schedule. This especially holds true if you managed to lock in a competitive interest rate on your home equity loan.

Not such a terrible kind of debt to have

If you’re someone who just plain doesn’t like being in debt, then you may be motivated to pay off your home equity loan as soon as you can. But if you’re managing your payments just fine and your loan’s interest rate isn’t outrageous, then you probably don’t need to go to the extreme of slashing all non-essential spending to get that loan paid off a bit sooner.

Saving money on interest is a nice thing — and it’s what motivates some people to pay off their mortgages ahead of schedule. But just as mortgage debt won’t necessarily be detrimental to your finances, so too might an affordable home equity loan be a perfectly okay thing to carry with you for a few more years.

Our picks for the best credit cards

Our experts vetted the most popular offers to land on the select picks that are worthy of a spot in your wallet. These best-in-class cards pack in rich perks, such as big sign-up bonuses, long 0% intro APR offers, and robust rewards. Get started today with our recommended credit cards.

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 because I’m worried I’m not saving enough. 

When you’re working toward different savings goals, it’s natural to want to know how well you’re doing. And so you may be inclined to check your savings account balance every so often to see what it looks like.

On my end, I have an automatic transfer set up from my checking account to my savings, so money is supposed to move from one account to the other before I get a chance to spend it. Because of this, it’s common for my savings account balance to be higher from one month to the next.

On the other hand, it’s pretty rare for my savings account balance to increase from one week to the next. I typically move money over (automatically) on a monthly basis, not a weekly one. And while my savings account balance tends to increase after I’m credited for interest payments, those only tend to happen on a monthly basis, too.

In spite of all of this, lately, I’ve been peeking at my savings account every week. But you may be surprised at the reason.

It’s about interest, not progress

I’m fairly confident that I’m doing my part to save nicely, namely because I know I part with a pretty large chunk of my income off the bat every month. And I also tend to have a solid pulse on what my savings account balance looks like.

The reason I’ve been checking my savings account every week has little to do with my actual balance. Rather, it’s a matter of the interest rate I’m earning on my money.

Prior to 2022, I was earning such a negligible interest rate on my savings that it almost wasn’t even worth shopping around for a better rate. But in 2022, the Federal Reserve raised interest rates seven times. And in early February, it announced another rate hike (albeit a small one).

These interest rate hikes have indirectly driven up the cost of consumer borrowing, so these days, it’s more expensive to take out an auto loan or personal loan. It’s also getting more expensive to carry a credit card balance.

But those rate hikes have also resulted in higher interest rates on savings accounts and CD accounts alike. And so the reason I keep checking my savings account is to make sure the rate I’m receiving is competitive. If I find that it isn’t, I’ll be motivated to move my savings over to another bank. And it will most likely be an online bank, since those tend to offer the most attractive interest rates due to having less overhead than physical banks.

It pays to keep tabs on your saving account’s interest rate

You may not feel compelled to check your savings account’s interest rate and compare it to others every week like I do. But it does pay to do that comparison once a month and make sure you aren’t selling yourself short. Earning interest is basically akin to getting free cash — and so why not get a little more of it if that option exists?

These savings accounts are FDIC insured and could earn you more than 12x 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 more than 12x 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.The Motley Fool has a disclosure policy.

 Read More 

A good card is one that doesn’t make your life harder. 

Few things completely upend your life like a new baby. And that’s true no matter how much planning you managed to squeeze into the nine months beforehand.

That said, there’s some planning you can do that will certainly make your life easier. One such thing is getting your credit cards in order. And that may include picking up a new credit card for your new expenses.

Choosing a new credit card is always a bit of a process; there are so many options, and everyone’s needs are a bit different. But here are a few things to keep in mind specifically when looking for a new card with a new baby.

Find a five-minute card

In the next section, I’ll go on about how to pick the right kind of rewards and perks. But, contrary to most other cases, those aren’t the most important factors when you have a new baby at home.

First and foremost, you need a card that’s easy to use. Because the precious free time you can manage will be used for things like, you know, sleeping. Not wrangling your credit card points.

I like to call these “five-minute cards.” As in, it only takes five minutes a month to log in, pay your balance, redeem your rewards, and go on with your day. Ideally, you can do it all from the handy mobile banking app — and with one hand, so you don’t have to put down the baby who just fell asleep.

Many of our favorite cash back cards will fit this bill. Choose static-category cards that don’t require activation. You can redeem the cash back for statement credits to cover any purchase. And the major issuers all have simple apps with interfaces that are easy to navigate.

Maximize rewards — to a point

Alright, on to the rewards. A new baby means household funds just got tighter. So you absolutely want to maximize the rewards you’ll earn on the mountains of diapers and pallets of wipes.

The best rewards card for this will depend mostly on where you do your shopping. Different types of stores will fall under different rewards categories. For example, Walmart and Target aren’t included in grocery store bonus categories, even though the superstores sell groceries. Similarly, wholesale clubs, like Costco, are also in their own rewards category.

Of course, as much as you may want to maximize your rewards for every purchase — keep your time (and sanity) in mind. You want the best rewards card you can get — that also fits in that five-minute card category. Avoid rewards cards that will require you to remember to activate categories or that take too much effort to make use of the rewards.

Perhaps the simplest solution is to find a cash back card with a good flat rate on non-category purchases. You can find several that earn 2% back on all purchases, giving you a decent earnings rate no matter where you shop.

Set it and (almost) forget it

Once you choose your new card, make sure to set it up for easy mode. What does that mean? Auto pay — and auto redeem, if it’s an option.

At the very least (and if your checking account balance can support it), set up your cards to automatically make the minimum payment each month. This ensures that even if baby brain causes you to space on a due date, you’re covered. You’ll still want to pop in and pay in full to avoid interest fees, but at least you won’t be stuck with late fees if you forget.

Additionally, some cash back cards let you set up automatic redemption when you hit a certain dollar amount. This can make it even easier to ensure you’re always using your rewards.

Life with a new baby is already going to have all the complications you can handle. Don’t give yourself more work with a high-maintenance credit card. Stick with easy-to-use cards with simple rewards that won’t use up what little mental energy you have left at the end of the day.

Top credit card wipes out interest until 2024

If you have credit card debt, transferring it to this top balance transfer card secures you a 0% intro APR for up to 21 months! Plus, you’ll pay no annual fee. Those are just a few reasons why our experts rate this card as a top pick to help get control of your debt. Read our full review for free and apply in just 2 minutes.

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.Brittney Myers has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale, Target, and Walmart. The Motley Fool has a disclosure policy.

 Read More 

Wait too long, and you could lose out. 

Many of us have financial goals we want to achieve. Maybe yours is to pay off your credit cards. Or maybe you want your savings account balance to reach $10,000 within the next year.

No matter what financial objections you’re trying to work toward, you should know that a side hustle could help you pull them off. The beauty of getting a side gig on top of your main job is that the money you earn won’t be earmarked for ongoing expenses like your car payments or mortgage. As such, you should have the option to sock all of your earnings away, minus what you owe the IRS in taxes on that income.

But if you’ve been thinking about getting a side hustle, you may not want to wait. If you hesitate, you may find that a side gig is harder to get later this year.

Get ahead of an economic downturn

A Zapier report released in mid-2022 found that 40% of Americans had some sort of side hustle last year. So if you’re thinking about boosting your income with a second job, you’re clearly in good company.

But you shouldn’t wait to line up that side hustle for one big reason. For months on end, economists have been sounding warnings about a potential recession. Now, in light of strong unemployment numbers and job market statistics that have come out early this year, some experts are downgrading those warnings.

But all told, a recession could hit later on in 2023. It may be a more mild one than initially anticipated, but economic conditions could sour nonetheless.

That’s why getting a side hustle isn’t something to wait on. If you get into the groove at a side gig now, you may have a reasonably easy time hanging onto that gig if the economy takes a turn for the worse. But if you wait until a recession hits to first go out and get a side hustle, you may find that it’s harder to get hired at all.

Remember, during recessions, individual consumers and employers alike tend to tighten their purse strings. So let’s say you’re trying to score a side gig teaching guitar to kids. If you line up a bunch of students now and they get into a routine, their parents might continue to pay for your services even if economic conditions worsen. But people may be less likely to first sign their kids up for guitar lessons and commit to that expense if the economy has already taken a dive to some degree.

You don’t want to delay

A side hustle could do a lot of great things for your finances. And even if you’re already in pretty good financial shape, it certainly never hurts to have extra money to spend at your discretion. So if you’re willing to put in the time to work a side gig, do yourself a favor and start exploring your options sooner rather than later. You don’t want to delay your efforts to the point where a side hustle becomes unattainable for an extended period of time.

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 

Here’s how to get something for (almost) nothing! 

Are you living on a budget? Have you considered offering reviews in exchange for free products or other rewards? It’s actually not as hard as you think. There are dozens of companies that will reward customers for leaving reviews, including Amazon and other retailers and brands. Here’s what you need to know about getting free stuff for leaving reviews.

The benefits of leaving reviews

Leaving reviews can be beneficial in ways beyond just getting something for nothing. For example, writing a review about a product or service can provide useful feedback to help others make informed decisions when purchasing items or booking services. Many shoppers rely heavily on reviews before purchasing a product or service, which is why companies understand the importance of getting feedback from customers.

How to get free stuff for your reviews

In order to start reaping the rewards of leaving reviews, the first step is to find companies that offer incentives for doing so. To get started, you can sign up on sites like Influenster, Toluna Influencers, BzzAgent, and more. These sites work with major brands like Kellogg’s, Coca-Cola, and Amazon. Some sites have their own niche products like food, beauty products, toys, or household items.

Many companies also have programs where you can try their items in exchange for a review. Often, you’ll have to disclose that you received the item for free in exchange for the review. Some sites, like CrowdTap or Capterra, will give you points or cash in exchange for reviews, which you can then convert into gift cards for your favorite store.

Some companies may require that certain criteria be met — such as providing an unbiased opinion — before offering any incentive. Additionally, some sites may have restrictions on how often you can leave reviews and still receive rewards. It’s important to familiarize yourself with these terms before submitting a review so your time isn’t wasted.

Amazon Vine

Amazon is one of the most well-known companies that offers rewards for reviews. Amazon Vine is an invitation-only program that selects insightful reviewers to be part of the program. To be selected to serve as a Vine Voice, you have to consistently write insightful reviews on products you have purchased on Amazon.

Voices are not paid to be part of the program, but once you are enrolled, you can request products from thousands of brands on Amazon for free. You then write an unbiased review of the product on Amazon. It can be positive, negative, or neutral; the key is that it is honest and insightful. These reviews have a badge stating “Vine Customer Review of Free Product” for full transparency.

Leaving helpful reviews is a great way to assist fellow consumers while also getting something in return. Companies like Amazon and other stores or brands will often provide rewards (such as points or free products) in exchange for customer feedback. Just make sure to read all the rules before submitting a review so your efforts to save money don’t go unrewarded!

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.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.

 Read More 

The quick answer? It depends how large those withdrawals are. 

The Federal Reserve reports that 32% of Americans aren’t equipped to cover a $400 emergency expense. But ideally, your savings account balance is in far better shape than that.

In fact, it’s important to have an emergency fund with enough money to cover a good three to 12 months’ worth of living expenses. That gives you a solid amount of protection in case you lose your job and don’t want to have to live off of credit cards. It also leaves you with cash reserves to cover unexpected bills, like home or vehicle repairs.

Now from time to time, you may need to dip into your emergency fund to handle an unexpected cost your regular paycheck can’t cover. But do you need to replenish every emergency fund withdrawal you take? Or should you make peace with a lower savings balance following an unplanned bill?

It’s a matter of how much money you’re removing — and what you’re left with

The whole point of having an emergency fund is not having to sweat it out every time you’re faced with an unplanned bill. And you also don’t necessarily need to stress over putting back every withdrawal you take immediately.

Let’s say you spend $3,000 a month on living costs and have a $10,000 emergency fund. If you take a $300 withdrawal to cover a surprise medical bill, you’re still left with $9,700. That’s the bulk of your emergency fund. And it also leaves you with enough cash to cover a full three months of bills in the event that you lose your job. So in that situation, there’s really no need to stress yourself out over putting back that $300.

Should you aim to put that $300 back eventually? Of course. But you don’t necessarily have to slash your spending the month after that withdrawal to replenish those funds, all the while making yourself utterly miserable in the process.

But if you’re forced to take a $5,000 withdrawal — say, for a major home repair — then that’s a different story. That means you’ve suddenly withdrawn half of your emergency fund, and that you no longer have enough cash to cover three full months of bills. In that case, there’s more urgency to put that money back.

Don’t be afraid to tap your savings

Some people won’t raid their emergency funds when unplanned bills strike, and will instead rack up credit card balances so as to leave their savings alone. But remember, the whole point of having an emergency fund is to be able to dip in and avoid going into debt when surprise expenses pop up.

It can be unsettling to have to take a large emergency fund withdrawal. And in that situation, you may feel the push to replenish that money quickly.

But don’t panic if you find yourself removing a small percentage of your emergency fund here and there. That’s exactly what that money is for, and there’s certainly no need to feel guilty for taking withdrawals.

Having to raid an emergency fund doesn’t mean you failed financially. Quite the contrary — the fact that you had an emergency fund to tap means you did a great thing for your finances.

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