Money Management

Don’t let that holiday debt stick around too long. 

The holidays often involve a lot of spending, and that means many people end up with holiday debt. One of the most common types of holiday debt is credit card balances, which are especially hard on your finances given their high interest rates.

Holiday debt isn’t something to feel bad about, but you should make paying it off a priority. You definitely don’t want to go into the next holiday season still paying off last year’s debt, and this is more common than you might think. During the 2022 holiday season, 10% of consumers had leftover debt from the 2021 holidays!

Statistics like that are a perfect example of why it’s important to prioritize holiday debt. Fortunately, there are several ways to get that debt paid off more quickly.

1. Move it to a balance transfer credit card

A great way to save on holiday debt and make it easier to pay off is debt consolidation. That’s when you get a new loan or line of credit and use it to pay all your debts and get a break on interest. And one of the best debt consolidation options, if you have a high credit score, is a balance transfer credit card.

This type of credit card lets you bring over balances from other credit cards. Depending on the balance transfer card, you may also be able to bring over loan balances.

Here’s the best part — the top balance transfer credit cards offer a 0% intro APR on those balance transfers. After you transfer over balances, you pay no interest on them for the entire intro period. The length of the intro period depends on the card, but many offer 12 months or longer. Most of these cards charge a balance transfer fee, with the standard amount being 3%.

2. Refinance it with a debt consolidation loan

Another way to consolidate holiday debt is with debt consolidation loans. These are personal loans designed for paying off debt.

You aren’t going to get a 0% APR with these, but you can qualify for competitive interest rates if your credit score is high enough. Loan interest rates at least tend to be much lower than credit card interest rates. Plus, debt consolidation loans have fixed payment amounts and terms. For consumers who find it hard to stay on track when paying off credit cards, the structure of a loan could help.

3. Use the debt avalanche method

If you don’t want to consolidate your debt, or your credit score isn’t high enough to do it, then your next-best option is the debt avalanche method. This is a debt repayment method where you focus on your debt with the highest interest rate first.

Here’s how to do it:

Check the interest rates for all your debts. You can find this information in your online account or by calling the creditor.Make the minimum payments, every month, on those accounts.Put all leftover money toward the debt with the highest interest rate.After paying off that debt, find the debt with the next highest interest rate, and repeat the process.

Since you tackle debts with higher interest rates first, it’s the most efficient way to pay off multiple accounts, excluding debt consolidation. You’ll save the most money and pay off everything in the shortest possible time.

4. Revamp your budget

The biggest factor in how quickly you pay off holiday debt is how much money you put toward it. That’s why it’s worth reviewing your spending to see if there are places you can cut back. Maybe you put streaming subscriptions on hold and switch to free streaming services for a few months, or you don’t go out for dinners and drinks as much. If you can free up $100, that’s $100 more in monthly debt payments.

That can make a big difference. Let’s say you have $2,000 in credit card balances at an 18% APR. Here’s how an extra $100 per month changes your credit card payoff timeline:

If you pay $200 per month, it would take 11 months and cost you $183 in interest.If you pay $300 per month, it would take seven months and cost you $123 in interest.

5. Start earning some extra cash

You could also put more toward holiday debt by boosting your income. One of the quickest and simplest ways to do this is by starting a side hustle. There are plenty of profitable side hustles you could do on your own time to bring in extra money every month.

That’s just one option. You might consider asking for a raise, especially if you’ve been doing well at your job and haven’t gotten a pay increase recently. Looking for ways to increase your income is a good habit to get into, regardless, and it will continue to benefit you after your holiday debt is paid off.

Holiday debt doesn’t need to stick around the whole year. If you start using some of those repayment strategies, you’ll be well on your way to getting free of debt.

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

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Here’s how this movement may be able to help the housing crisis. 

In the 2010s the YIMBY movement, which started out in San Francisco, rapidly spread across the U.S. “YIMBY” stands for “Yes In My Backyard.” It is a growing movement in cities around the U.S. The California YIMBY chapter alone has 80,000 members. Those supporting the movement believe in building more housing faster and with less opposition. The acronym is in contrast to NIMBY, which stands for “Not In My Backyard” and describes those who generally oppose new development.

Housing costs skyrocketed the past several years. The median price of homes in the U.S. has increased by 50% from January 2020, hitting record highs and creating a housing crunch. As a result, the YIMBY movement is expected to take off in 2023. Even as higher mortgage rates have slowed down the housing market, it is still unaffordable for many. Here are three reasons why those who are passionate about the YIMBY movement believe it can help the housing crisis, and why you might consider adopting this perspective.

1. It increases housing affordability

As real estate prices increase across the world, affordable housing is out of reach for many people. The YIMBY movement aims to increase the supply of housing. This will help alleviate the demand-driven increases in rent and home prices that many cities have experienced over the past decade or so. By increasing the supply of homes, more people are able to access affordable housing options, which can help them save money and live better lives.

Housing shortages don’t just impact those looking to buy or rent. According to YIMBY studies, shortages reinforce inequality, are bad for the environment, and hurt the economy. Lower income individuals and families struggle with budgeting for higher costs and homelessness increases as people are priced out of their homes. Simply put, YIMBYs believe that the greater the supply of housing, the more affordable it becomes, starting a domino effect that will increase jobs, reduce displacement and carbon emissions, and shrink the wealth gap.

2. It improves quality of life

Housing affordability isn’t the only benefit YIMBYs focus on. They believe the right type of urban development also improves quality of life by making communities more livable and functional. When there’s an abundance of housing options available, it makes it easier for people to find their ideal living situation (whether they want to be close to work or near family).

This can improve their lifestyles by making travel easier and reducing stress from commuting long distances every day. Additionally, having an abundance of housing options means that there are more amenities nearby (like stores and restaurants), as well as better public transportation options for those who don’t own cars or prefer not to drive.

3. It makes cities more sustainable

Adding housing will make cities more sustainable in the long run. Building more homes closer together reduces reliance on automobiles and encourages walking or biking instead. This reduces emissions from cars, buses, and other forms of transportation, which improves air quality in urban areas across the country.

In addition, having an abundance of housing makes it easier for people to move into already existing neighborhoods rather than developing greenfield sites on raw land. This helps preserve natural habitats and ecosystems while still allowing communities to grow sustainably over time.

YIMBYs believe that building more homes will increase housing affordability, improve quality of life, and make cities more sustainable. By advocating for smart growth, YIMBYs can help create more housing options for those who need it. YIMBYs promote practices that they say will reduce the environmental impact of new developments while also providing economic opportunities to local residents, creating healthier environments for everyone.

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Childhood poverty rates are a problem, but there are multiple contributing factors. 

Childhood poverty is a major issue on a national scale. In January of 2022, the child poverty rate sat at 17%, according to data from Columbia University’s Center on Poverty & Social Policy.

But the reality is that we’re worse off from a child poverty standpoint now than we were in 2021. And a big reason has to do with the absence of the enhanced Child Tax Credit.

Prior to 2021, the Child Tax Credit maxed out at $2,000 per child under age 17. But in 2021, as part of the American Rescue Plan, the Child Tax Credit got a major boost that increased its maximum value to $3,600 for children under age 6 and $3,000 for children aged 6 to 17.

Just as importantly, the Child Tax Credit became fully refundable. Normally, only a portion of the credit is refundable. But this change allowed those eligible for the credit in 2021 to receive its full value, even if they had no tax liability.

Finally, half of the boosted Child Tax Credit was made available via monthly installment payments that hit bank accounts from July through December of 2021. That allowed parents to keep up with their bills and avoid heaps of credit card debt at a time when living costs were rising.

The fact that the Child Tax Credit hasn’t gotten a boost beyond 2021 has clearly been detrimental to families with children. But a lack of an enhanced credit isn’t the only reason child poverty rates are so high.

A combination of factors

In 2021, the child poverty rate dropped to 5.2% — a notable decline from 9.7% in 2020. And the boosted Child Tax Credit is the leading reason, according to the Economic Policy Institute (EPI). In the absence of that enhancement, it’s easy to see why so many children have slipped back into poverty.

But we can also point a finger at minimum wages — and a lack of growth in that regard — as another reason why child poverty rates aren’t improving. The $7.25 federal minimum wage has not changed since 2009 — even though living costs have risen substantially since then.

Now some states have taken steps to raise their own minimum wages. But of the 20 states that have failed to do so, 16 of them have more than 12% of their children living in poverty, according to a States Newsroom analysis of wage and poverty data.

Meanwhile, in a 2021 report, the EPI estimated that raising the federal minimum wage to $15 an hour in 2025 would lift up to 3.7 million Americans — including 1.3 million children — out of poverty. Yet so far, little progress has been made in that regard.

Lawmakers need to take action

Lifting children out of poverty should really be a priority for lawmakers. Now some might argue that issuing stimulus checks to those in need could be a viable solution there, as could restoring the boosted Child Tax Credit. But another option is to simply make it a law that workers need to be paid a more reasonable minimum wage.

Over the past year and a half alone, we’ve seen inflation soar, yet the federal minimum wage has held steady at $7.25 an hour outside of states with different rules in place. If lawmakers don’t take action on the minimum wage front soon, we could, unfortunately, see child poverty levels continue to rise in a very big way.

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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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Single people need to read this advice.  

Many people buy life insurance after they find a romantic partner to share their life with or after they have a child. And this makes a lot of sense.

A death benefit from a life insurance policy can help a surviving spouse or partner pay shared bills and maintain the same standard of living they had when there were two earners in the family. It can also help provide for surviving children as raising kids is expensive.

But what about those who are not married? Is it worth buying a policy? Making this decision can seem more complicated, but this advice from finance expert Dave Ramsey could help.

Dave Ramsey’s life insurance advice for single people

For those who are single, Ramsey indicates that deciding whether to buy life insurance needs to be done on a case-by-case basis. Some single people will need coverage, while others may not.

“If you’re single as a pringle and ready to mingle, that doesn’t mean you’re off the hook when it comes to life insurance,” Ramsey said. “It also doesn’t mean you’re on the hook.”

Ramsey advises single people to buy a policy if they eventually plan to get married or start a family — even if they are currently not in a committed relationship. It makes sense to do this because they’ll need the policy when they move into the next phase of life and it can be less expensive to just buy it ASAP.

“The younger you are when you get the policy the cheaper it will be,” Ramsey explained. “If you think you’ll likely get married within the next five years and start a family, it could save you some cash to get a 20-year policy now.”

Ramsey also said it could be important to buy a policy as a single person in order to make sure money is available for funeral expenses. This way, loved ones won’t be left footing the bill.

However, those who don’t anticipate having anyone depending on them may not need a policy. “If you love the bachelor lifestyle (aka your lawn chair counts as ‘furniture’) and plan on keeping it that way for a long time, this is an area you could save money on,” Ramsey said.

Is Ramsey right?

Ramsey is spot on about the situations when single people should purchase life insurance. Not only is it cheaper to buy a policy at a younger age for anyone who plans to start a family soon, but it could also be important to ensure coverage is available.

Many life insurers deny coverage or charge a lot of money for people with pre-existing conditions, and no one can predict when a medical problem will develop. It can be better to get coverage while young and healthy in anticipation of a future family rather than delaying and risking a medical condition developing in the meantime.

Ultimately, the reality is a term life insurance policy is pretty inexpensive and singles who don’t want to burden family members with burial expenses or who want to make sure future loved ones are cared for should follow Ramsey’s advice and get covered ASAP.

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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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