Money Management

Make sure to add all of these items to your list. 

When my husband and I purchased a new construction home back in 2009, we knew that doing so would mean paying a higher price than we would for a home that had already been lived in. And with that would inevitably come a higher monthly mortgage payment.

Thankfully, that’s an expense we were prepared for. What we weren’t prepared for, however, was a bunch of added costs that crept up on us. Here are some of the expenses we had to bear in the course of buying new construction — and why every buyer in that boat should plan for them.

1. Temporary housing

Our home was supposed to be completed in June the year we bought it. Instead, we moved in about five months later. During that time, we had to secure temporary housing, which meant paying a lot of rent since we were not only moving in on a short-term basis, but also, moving in with a dog.

If you’re buying new construction, expect delays. And also, expect those delays to potentially create a scenario where you need to move to a short-term rental while your builders are doing their work.

2. Storage

When you’re forced to move out of a house before your new house is ready and find a short-term apartment to rent in the interim, you end up having to store a whole lot of stuff. That was another expense my husband and I had to bear due to our new construction home being delayed. And it’s an expense you should plan for if you’re buying a home being built from the ground up.

3. Window treatments

Our new construction contract spelled out exactly what our builders were required to provide. Unfortunately, we didn’t realize window treatments were missing from that list until we moved into our home and realized there were no blinds, shades, or shutters to offer us any privacy. That led to an emergency Home Depot run for temporary shades, and an almost $2,000 investment in nicer window treatments a month or so later.

Now your new construction contract might include window treatments, or an allowance for them. But if not, then that’s another expense that will be on you.

4. Bathroom accessories

The bathroom accessories our builders provided — things like towel holders and lighting fixtures — were just about the ugliest ones imaginable. They looked like the sort of fixtures you might find in a public bathroom in the back corner of a neglected playground. And so we had to spend our own money to replace them with nicer ones.

If you’re buying new construction, you should know that the fixtures and accessories you get will likely be builder-grade — meaning, just passable. So prepare to spend a little money to upgrade.

5. Closet shelving

Our new construction home was designed to come with several closets. But nowhere in our contract did it specify that our closets had to include shelving, so our builders used that as an excuse to barely provide any.

Case in point: Our kitchen pantry came with a single shelf, so we had to buy and install three more to make it usable. You might run into a similar issue with your newly built home.

There are many benefits to buying new construction, like getting to customize your home and move into a space that’s spotless. But there are also a number of financial drawbacks you might encounter — like the expenses above. Be sure to plan on them so your budget isn’t thrown off-course.

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It’s an easy step worth taking. 

When it comes to managing my money, I’ve made my share of mistakes. For example, there was a point when I was too scared to invest in stocks, so I didn’t, and I lost out on higher returns for many years. I’ve since corrected for that by opening a brokerage account and buying stocks.

I’ve also, in recent years, failed to budget enough for home repairs, resulting in several big withdrawals from my savings account. In light of that, I’ve taken to padding my budget to allow for more spending on home repairs. And I’ve taken on extra work to put back the money I had to remove from my emergency fund.

But if there’s one financial mistake I’ve actually never fallen victim to, it’s racking up interest on my credit cards by carrying a balance forward. Rather, I’ve always managed to pay my credit card bills in full. And that’s spared me not just interest charges, but also, credit score damage.

See, you may not realize it, but even if you make your minimum credit card payments on time every month, your credit score can still take a hit if you owe a lot of money on your credit cards. That’s because using too much of your available credit can have a negative impact, even if you’re up-to-date with your minimum payments.

Meanwhile, one simple habit has helped me avoid credit card debt through the years. And it’s a habit I suggest you adopt as well — especially since it’s a really easy one.

Keeping tabs on your credit card spending could work wonders

I make a point to check my credit card balances every week. In fact, this is something I’ve done pretty much since I opened my first credit card account. And I firmly believe that’s helped me avoid landing in credit card debt.

The upside of checking your credit card balances weekly is that you’ll get a heads-up if your spending starts to put you at risk of debt. Let’s say you know you can only afford to pay $2,000 toward your credit cards each month, and by the midpoint of the month, you’re already at $1,500. That might set off a signal in your brain to cut back on spending during the second half of the month to avoid ending up with a balance you can’t pay off.

A move worth making

Checking your credit card balances every week might take a little time — especially if you have several credit card accounts you actively use. But it’s important to make that effort, because it could be just the thing that prevents you from winding up with credit card debt.

Of course, this strategy has its limitations. Let’s say you can afford $2,000 a month in credit card charges and by the third week of the month, you’re at $1,800. You might do everything you can to spend very carefully during those last seven days before your balance rolls over to a new month. But if you end up needing an emergency $500 car repair and you don’t have the money in savings, well, you’re probably going to have to carry a $300 balance forward at least.

But emergency situations aside, checking your credit card balances every week could really help you steer clear of debt and the costly interest charges that tend to come with it. So schedule some time to tackle that task and make it a recurring appointment on your personal calendar so you don’t forget or run out of time to do it.

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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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The airline has a reimbursement request form for those who went through holiday travel disruptions. 

It wasn’t a good holiday season for Southwest Airlines, or for quite a few of its passengers. Due to inclement weather, outdated computer systems, and staffing shortages, the carrier had to cancel over 16,700 flights over the holidays.

Flight issues like these are frustrating and often expensive. Many passengers had no choice but to spend money on a hotel, meals, and new flights or rental cars. If a Southwest flight delay or cancellation affected you, the airline has provided information online for how to request reimbursement.

How to request reimbursement for Southwest flight issues

If you had disrupted travel with Southwest Airlines between Dec. 24, 2022 and Jan. 2, 2023, visit Southwest Travel Disruption. This page has a refund request form for flights that were canceled or significantly delayed between those dates. You can use it to request a refund of the unused portion of your ticket. To fill out the form, provide your:

Reservation confirmation numberFirst nameLast name

You only need to fill out this form once for all the travelers on your reservation. Upon request, you should receive a refund within seven business days.

If you incurred additional expenses, such as a hotel stay, food, a rental car, or any other reasonable extra costs, you’ll need to submit your receipts to Southwest by email. Here’s how:

Visit the Southwest Email Us page.Click “Expense Reimbursement Request,” and then click “Next.”Fill out the form with a description, expense information, and your contact information, and attach your receipts.

Southwest says it will honor “reasonable requests for reimbursement for meals, hotel accommodations, and alternate transportation.”

The airline has partnered with Hyperwallet for reimbursement payments. When your reimbursement is processed, you’ll get an email from Southwest to let you know that your request is approved and to provide your customer ID. Within a few days, you’ll get an email from Hyperwallet with instructions and a link to access your payment. If you don’t see it, check your junk and spam folders.

Lost, damaged, or delayed baggage

Southwest hasn’t provided much information online about baggage issues. Its travel disruption page advises contacting the airline if your baggage was lost, damaged, or delayed, either through Southwest Contact Us or by calling 1-888-202-1024. The Department of Transportation says airlines are responsible for up to $3,800 per passenger for lost, damaged, or delayed baggage, for domestic flights.

It’s also worth checking to see if you have any travel insurance plan that covers baggage. Even if you didn’t purchase a travel insurance plan yourself, many travel credit cards provide complimentary protections. If you used a travel credit card to purchase your airfare, see if it has any type of baggage insurance. You can find this in your card’s guide to benefits, or you can contact the card issuer.

Claim your 25,000 Rapid Rewards bonus points

Southwest is also offering a goodwill gesture of 25,000 Rapid Rewards points. That many Southwest points can be redeemed for $300 or more in airfare.

The offer is available to all customers who were on flights that were canceled or delayed longer than three hours between Dec. 24, 2022 and Jan. 2, 2023. It’s available to every paid and ticketed customer on the reservation, and it’s in addition to refunds and reimbursements.

If you’re eligible for this offer, you should have received an email from Southwest. The email will include a code to claim your 25,000 points. If there were multiple eligible customers on your reservation, you’ll get codes for each of them.

Make sure to claim your points before they expire on March 31, 2023. You can do so on the Southwest Rapid Rewards points site.

Where to go for further assistance

Hopefully, you’re able to get reimbursement from Southwest without issue. Many travelers have reported that Southwest honored their reimbursement requests for additional expenses. If you run into any issues, you have a few options available to you.

First, make sure to file a claim with travel insurance, if you have any. Remember that many top credit cards include travel protections as complimentary extras. If you paid for your Southwest reservation with a credit card, review that card’s benefits. It may have trip cancellation insurance or trip delay insurance that can help cover expenses.

You can also file a complaint with the U.S. Department of Transportation. Airlines are required to acknowledge these complaints within 30 days of receiving them and respond to them in writing within 60 days.

Southwest’s flight issues demonstrate just how badly travel plans can go awry. While issues like these don’t happen often, it’s good to be prepared for them, just in case. The safest option is to have travel insurance, either through a policy you purchase or through credit card insurance, that covers you if your flight gets delayed or canceled.

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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 recommends Southwest Airlines. The Motley Fool has a disclosure policy.

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It could spare you a hassle later on. 

The decision to leave a job is a big one. Even if you’re hoping to seek out a job with better pay and superior benefits, there’s something to be said for the familiarity of your current workplace.

But maybe a new job will offer you more opportunities to advance your career. So it pays to pursue a new job if you think that’ll make you happy. Before you do, though, it could pay to open an IRA account for retirement savings purposes. Here’s why.

You’ll have a home for your retirement savings

Many companies offer workers the option to save for retirement in a 401(k) plan. But not every job comes with this option. And if, for example, you’re looking at moving from a large company to a small business, you may not have access to a 401(k) at your new job.

Meanwhile, if you have money in a 401(k) at the job you’re thinking of leaving, you’ll need to figure out what to do with it. Leaving it where it is may be an option, but not necessarily your best one.

If your new job has a 401(k), your ideal option may be to just roll your old 401(k) into your new one. But since your new job may not offer a 401(k), a good backup plan is to open an IRA on your own so you’ll have a place to roll your old 401(k) into.

See, if you cash out a 401(k) when leaving a job, it will be treated as an early withdrawal if you’re not yet 59 1/2 years of age. And that will mean facing a 10% penalty, which is something you don’t want.

Plus, you should really make every effort to keep the money you’ve saved for retirement tucked away in a dedicated retirement account. So if you open an IRA while you’re in the process of switching jobs, you’ll have a place for your old 401(k) funds to land.

You might want an IRA even if your new job offers a 401(k)

Since many companies — even small ones — do sponsor 401(k)s, there’s a decent chance that if you get a new job, you’ll have the option to save in an employer retirement plan. But that doesn’t mean you’ll want to.

One downside to saving in a 401(k) is that these plans tend to come with hefty administrative fees that can eat away at your returns. Also, 401(k)s don’t offer the same wide range of investing choices as IRAs.

With an IRA, you can put your money into individual stocks if you so choose. With a 401(k), you’re generally limited to a bunch of different funds, some of which might come with high fees.

Now if you’re getting a new job with a 401(k) plan and your new employer offers some sort of match, then it pays to contribute enough to that plan to claim that match in full. But if you’re otherwise not in love with your new 401(k), don’t save in it beyond getting your match. Instead, open an IRA to roll your old 401(k) into, and then continue to save and invest in that IRA as you see fit.

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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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