Money Management

Does pee-wee football have sponsors? 

Most kids are like the Energizer bunny. They just keep going — long past when their parents are ready to take a nap. That’s why giving them a proper outlet for that energy, such as organized sports, is practically a necessity.

Unfortunately, that necessity starts to look a lot more like a luxury when you start diving into the personal finance impacts. The average cost of a year of just one kids sport (for a single child) is nearly $700. And most kids actually play two or more sports.

The price to play can vary quite a bit from sport to sport. Many of the least expensive sports also require the least amount of gear. But that’s not the only factor. Popularity, ease of finding used gear, and travel needs all play their parts.

Winter sports top the charts

In a survey by the Aspen Institute’s Project Play, parents offered cost data on 21 sports. At the top of the chart — i.e., the most expensive sports — are ice hockey and skiing/snowboarding.

Five most expensive kids sports:

Ice hockey: $2,583Skiing/snowboarding: $2,249Field hockey: $2,125Gymnastics: $1,580Lacrosse: $1,289

The top two sports are a good example of how costs can be highly dependent on different factors for each sport. Ice hockey, with an average yearly cost of $2,583 per kid, seems to just be expensive across the board. Registration and travel costs far outweigh the costs of equipment or lessons.

Skiing/snowboarding, on the other hand, seems to be near the top of the list based on the cost of equipment alone. Of the $2,249 average annual cost, $1,174 of it — that’s 52% — is from purchasing or renting equipment. Which makes sense; just buying the necessary layers to keep from freezing can be costly. And that’s before you add in the high cost of skis or snowboards.

At the other end of the spectrum, the least-expensive sports tend to be those with minimal equipment requirements. Track and field, cross country, flag football — all sports where the uniform is basic and you likely don’t need pads, sticks, or other pricey gear.

Five least expensive kids sports:

Track and field: $191Flag football: $268Skateboarding: $380Cross country: $421Basketball: $427

That being said, sports that require lots of equipment but that are very popular/common can also be quite affordable. American tackle football, for example, can have a lot of gear requirements. However, football is so ubiquitous that the gear is not only fairly affordable when new, but also pretty easy to find used.

Gear is expensive, but travel can be worse

While equipment costs may be the first thing that come to mind when contemplating a new sport, it’s actually not the driving factor for the total cost for most sports in the survey. No, the cost of travel is actually the biggest expense for quite a lot of sports.

For example, field hockey has an average cost of $2,125 a year. Only about a quarter of that cost is from equipment. It’s the $934 a year spent on travel to and from games that makes up the majority — 44% — of the cost to play.

(And we’re not talking about the fun kind of travel that earns you those sweet travel rewards. This is often hours of driving in a van full of kids who spent the last two hours sweating through their pads. Talk about labor of love.)

Of course, even just registering your kids for their sports teams can be expensive. Ice hockey registration alone reportedly costs an average of $634 a year. Two other top five sports also have pricey registrations: field hockey is $409 a year, and lacrosse $411 a year.

Even if your child would rather play a sport without teams, you’re not off the hook. Most non-team sports are the type that require some sort of classes or lessons.

Gymnastics, for instance, costs an average of $1,580 a year, and more than a quarter of that (27%) is just the cost of classes. But that’s not even the worst one. More than 40% of the $1,170 average annual cost to play tennis is from class costs. And more than 60% of the costs associated with martial arts come from lessons.

Ways to save

Being involved in sports can be beneficial to kids in myriad ways. It helps them develop self confidence and sportsmanship — we need fewer sore losers in the adult world, that’s for sure — as well as providing a healthy outlet for excess energy.

But when you’re on a budget, that extra $700 a year can seem like a lot; raising kids is already expensive without the extra cost. Happily, there are a few ways you can trim the costs of your kids’ sports without having them cut them out entirely.

Rent first: Most parents have been through the pain of shelling out hundreds just to have your kid decide three weeks in that they don’t like the sport anymore. If possible, see if you can rent pricier equipment until you’re sure your kid will stick with it.Buy used: Kids can outgrow gear long before it’s at the end of its useful life. Try to pick up used gear from friends, family, and teammates. Many independent sporting goods stores will also sell gently used gear. (Don’t buy used helmets; they can lose effectiveness.)Carpool: Travel costs for away games and tournaments can get steep. When you can, share travel expenses with other parents to minimize your out-of-pocket costs.Bundle classes: If your child is in a sport that involves taking a lot of classes, ask their gym/dojo/etc. about class bundles. Many places will offer package deals at a lower per-class cost than you’d get paying for one class at a time.

If nothing else, consider the cost of your kids’ sports an investment. Your kid will likely be happier and healthier. Plus, you get some entertainment out of it, too. You’ve never laughed until you’ve watched 7-year-olds in full hockey gear try to skate!

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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.Brittney Myers 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.

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Could this simple guidance make all the difference when it comes to your money? 

Many people struggle financially and have difficulty saving enough money or avoiding credit card debt. If you don’t want to be one of them, finance expert Dave Ramsey has some advice for how to “win with money.”

Here’s what that advice is, as well as some tips on whether you should implement his advice and how to do it.

Dave Ramsey’s advice for becoming a financial winner

Ramsey’s advice for winning with money is really simple, but it may not be advice you’d expect to hear.

“If you want to win with money, let me give you an idea: figure out what most people are doing and run in the other direction,” Ramsey wrote on Facebook. Ramsey also went on to explain why he gave this unexpected advice.

“Most people are broke,” Ramsey said. “Most people look good and they’re broke. And the government, which is well known for its ability to handle money (sarcasm font) is not going to save you. It’s up to YOU.”

Essentially, Ramsey is suggesting that rather than trying to follow the crowd or keep up with the Joneses, you make your own money decisions that are right for your long-term financial plan. You don’t necessarily want to do what’s common, or what seems easiest, but instead want to take control and make choices that will set you up for long-term success.

Is Ramsey right?

Ramsey’s assertion that “most people are broke,” can be hard to confirm — but it is true that a substantial number of people don’t have enough retirement savings, have a lot of credit card debt, and don’t have even a small amount of money to cover emergencies.

While in some cases this may be because people are spending money to look good, as Ramsey says, there are also a lot of systemic problems that leave people with too little. These issues range from the wage gap between men and women to generational poverty and inequality of opportunity to the fact minimum wage hasn’t kept pace with rising prices.

If you face these systemic problems, then it’s a lot harder to just make money decisions that are going to leave you “winning with money” because you’re fighting against the current. And Ramsey’s claims that most people are broke because they’re trying to look good don’t really apply in your situation, since it’s not decisions you’ve made but difficult circumstances that are causing your financial issues.

For some people, though, it is true that there are some money decisions you may be making — which are pretty common — and which could make it harder for you to be a financial success. For example, buy now, pay later plans have become pretty common as a means of buying things you can’t afford, and they can make it harder to live within your means and accomplish financial goals since you’re committing future income to pay off purchases of non-necessities today.

If you want to increase your chances of “winning with money,” then taking control of your budget, committing to live within your means and avoiding borrowing for any non-necessities could be a good approach to take. Ramsey recommends these types of behaviors, which can be beneficial to adopt so you can grow your net worth over time.

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It just feels like a risk. 

Most of the money I have earmarked for emergencies and other more near-term needs or goals is tucked away in my savings account. That way, I can access it at any time.

But I have some cash on hand that I don’t necessarily have earmarked for emergencies, but I also don’t want to invest in my brokerage account. And that’s money I may want to put into certificates of deposit, or CDs.

The upside of putting money into a CD is snagging a higher rate of return on your cash. Right now, for example, the online bank I use is giving me 3.3% interest in my savings account. With a five-year CD, I could snag 4.4% interest.

And that’s just my bank. There are other banks that are paying even higher interest rates — on both savings accounts and CDs.

But while I’m potentially interested in putting cash into a CD, I won’t choose one with a five-year term — even if I find a better rate than 4.4%. Here’s why.

I don’t want to get shortchanged

The one drawback of CDs is being forced to lock your money away for a preset period of time. If you cash out a CD before it comes due, you’ll be penalized by your bank.

Now, each bank gets to set its own penalty. But usually, you’ll lose three months of interest for cashing out a 12-month CD early. For a five-year CD, you might lose six months of interest.

The other annoying thing about cashing out a CD early is that you’ll generally face the same penalty regardless of when you cash it out. So, let’s say you put money into a five-year CD and cash out at four and a half years. You’ll generally face the same penalty you would for cashing out after a year.

Why am I talking so much about cashing out CDs? Well, let’s say you open a CD and then rates increase a few weeks later. You may be tempted to cash yours out early to avoid getting stuck with a lower interest rate. Only the penalty you face for an early cash-out might negate the higher amount of interest you stand to earn by opening a new CD with a better rate.

This is exactly why I refuse to put money into a long-term CD right now. The Federal Reserve isn’t done raising interest rates, which means banks could raise their rates in the course of the next year.

I don’t want to run the risk that rates will rise shortly after I agree to tie up my money. And I also don’t want to have to deal with penalties for cashing out a CD before it comes due.

A better approach

Right now, I can snag 4.15% annual interest on a one-year CD at my bank. So if I do move forward with a CD, that’s the term I’m likely to stick to. Tying my money up beyond that seems like too much of a risk from an interest rate perspective. And there’s no need for me to take that risk when a better option exists.

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Spending it all now probably sounds like fun, but it might not be your best move. 

January and February are the most popular hiring months, and they’re also the most popular time to get raises. Many companies are operating with a new budget for 2023, and so they’re better able to accommodate changes to employees’ salaries.

If you’re lucky enough to receive a raise this year, you probably already have some ideas about how you’d like to spend the extra cash. There’s no harm in rewarding yourself with a special purchase or even a vacation. But here are three other ideas to consider as well.

1. Build or increase your emergency fund

An emergency fund is one of the most important financial protections you can have. Everyone experiences unplanned expenses from time to time, whether it’s an insurance claim, an emergency room visit, or an appliance failure. Unexpected job loss can also put a lot of strain on a household budget in a short time.

Your emergency fund is cash you keep on hand to help you cover these unexpected costs so you don’t have to take on debt or fall behind on your payments. It’s up to you to decide how much money you want to keep in your emergency fund, but you should have at least three months of living expenses at a minimum.

Use your raise to build your emergency fund if you don’t already have one. And if you do, consider beefing it up a little anyway. Raises can lead to lifestyle creep, where people’s expenses rise along with their income. So what may have been an adequate emergency fund for you in the past may not be enough moving forward if you begin spending more than you have before.

2. Save it for retirement

Retirement is the most expensive financial goal most people will ever have, with many estimating they’ll need well over $1 million to live comfortably. Saving as much as you can, especially while you’re young, makes it much easier to achieve that goal because you’ll have more investment earnings to help you cover your costs.

Many struggle to save as much as they’d like for retirement because their everyday expenses take up a large share of their paychecks. A raise presents the perfect opportunity to remedy this situation. Put all or a portion of your raise into your retirement account each month before you get too comfortable spending the extra income.

If you have access to a 401(k) plan that gives you a company match, this is probably the best place for your money. A match will help you grow your retirement savings even faster, and it could be worth thousands of dollars per year, depending on your salary.

3. Pursue further education

Investing in further education could open up better employment options in the future. This is a long-term investment, and you’ll have to weigh other factors besides cost when deciding whether it’s right for you. You’ll need to make sure you have time and, if necessary, the ability to travel to attend the courses.

You could choose to pursue further training in your field if you like what you do. Think about which certifications carry the most weight in your industry and figure out what you need to do to achieve them. When you’ve finally gotten your credential, you can use this as leverage to negotiate a raise with your current employer or to find a better-paying job elsewhere.

If you’re ready for a fresh start, you could always strike out on a new career path altogether. Decide what you’d like to do and then figure out what sort of degree or certification you’d need to land a job in that field. There are plenty of opportunities available online these days for those who don’t live near a university.

The three ideas above may not be the most exciting way to spend your raise, but they could help improve your future financial security. Even if you don’t want to devote your entire raise to these long-term goals, putting a portion of it toward them could make a significant difference to your finances in the long run.

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Are you paying for any of these? 

Every cent that we spend in our daily lives adds up. Some expenses like rent, mortgage, and groceries are a must. But other costs can be avoided. You may be spending money on unnecessary expenses, which could make it more difficult for you to reach your financial goals. Do any of these costs sound familiar?

1. Unused subscriptions

Many of us pay monthly or yearly subscription fees for things like software, mobile apps, and streaming services. But if we’re not using these services, we’re wasting money. Reviewing your subscriptions a few times each year is not a bad idea to ensure they’re worthwhile and provide value. Canceling unused subscriptions can free up money to put more money toward your savings or debt payoff goals.

2. Credit card interest

Credit cards are convenient, but paying your entire monthly balance is essential. If not, you’ll be charged credit card interest. These costs can add up quickly and result in you paying more than necessary. You can avoid this by not carrying a balance on your card.

If you have an expense coming up that you know you won’t be able to pay off right away, using a 0% APR credit card can help you avoid these extra fees. Review our list of the best 0% APR credit cards to learn more about your options.

3. Food waste

How often do you throw out food that has gone bad? This is something that many people do. Food costs are exceptionally high, so allowing food to go bad is a big waste of money. One way to reduce this added expense is to plan what meals you will make as you create your shopping list. The less food you waste, the more money you’ll save.

4. Bank fees

Bank fees are another added expense that impacts your finances. For example, many people pay monthly maintenance fees without giving it much thought. You can avoid these fees by choosing a bank that doesn’t charge them or taking steps to avoid them. Many banks outline steps to avoid fees, like monthly maintenance fees, such as setting up direct deposit or maintaining a certain account balance.

5. Name-brand medications

While name-brand medications are the best option for some, they may not always be necessary. If your prescription costs are getting out of hand, you may want to explore generic drugs. Generic medications are usually more affordable. If you take multiple medications, you may be able to save a significant amount of money by switching to generics.

6. Delivery app fees

Another expense that you may be able to avoid is delivery app fees. These apps are convenient because they make getting food delivered quickly to our homes easy. But delivery fees add up fast. One way to avoid these fees is to consider ordering takeout from a local eatery and opting for pickup instead of delivery.

If you frequently order delivery, you may be able to eliminate these fees by investing in a delivery app subscription. While these subscriptions come with a monthly fee, you may find it more affordable when compared to the total fees you’ve been paying without them.

7. Cell phone insurance coverage

Many people pay for cell phone insurance. Typically, this expense is added to your mobile phone bill. It’s worthwhile to consider protecting your purchase, as cell phones are expensive. But you’ll be spending a lot if you pay for this coverage and never use the benefits. Another option is to see if you have a credit card with cell phone protection benefits. This coverage may offer a more affordable way to protect your phone against damage or theft.

Every extra expense adds up

While some extra expenses may not be too pricey, they all add up over time and impact your personal finance situation. If you want to free up more cash to hit your savings goals sooner, it’s a good practice to monitor your spending to find ways to trim excess costs. One easy way to do this is by using budgeting apps to track purchases and set spending goals.

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You may want to hire someone sooner rather than later. 

Filing a tax return can be a somewhat daunting process if you’re not sure what you’re doing. And even if you’ve filed a tax return before, you may not want to do so this year.

It could be that you started a small business in 2022, and now, your taxes are more complicated. Or maybe you took on a side hustle in 2022, and now, you’re not sure what expenses you can safely deduct.

In these situations, hiring an accountant for tax help could take a lot of stress off of your plate. It could also lead to a larger tax refund hitting your bank account. But if you need tax prep help, you shouldn’t delay your search for an accountant. It may prove more difficult than usual to find one this year.

Get started on that search

You may be thinking that it’s still fairly early in the tax season, and so there’s no major rush to seek out tax help just yet. But one thing you should know is that a growing number of small and mid-sized accounting firms are hiring overseas help for the first time to cover a growing need, reports the Wall Street Journal.

It’s common for large accounting firms to hire international help during tax season. But smaller firms have been struggling to hire, and the demand for tax help is strong — hence the need to look to international candidates.

This is exactly why 2023 is not the year to put off your search for an accountant. If you’ve never hired someone to do your taxes before, or you didn’t like the person you used in the past, then it’s imperative that you get moving on securing the help you need. Wait too long, and you may get shut out this tax season.

How to find a good accountant

Finding the right person to do your taxes can be tricky, so a good place to start is asking for recommendations from friends, family members, and neighbors. If someone you know had a good experience with a certain tax preparer, there’s a good chance you will too.

At the same time, it’s important to know what questions to ask an accountant you’re looking to hire so you make the right choice. Be sure to ask what experience they have with your situation first. If you own a small business, for example, you’ll want someone who’s handled small business taxes before.

Next, you’ll need to ask about fees. You don’t want to get overcharged, but you may not want to go with someone whose fee seems surprisingly low, either, as there may be a reason for it.

If an accountant you talk to can’t give you an exact estimate, that’s not a bad thing. They actually shouldn’t be able to give you an exact number unless your tax situation is really uncomplicated — in which case you may not need the help in the first place. Giving you a range of fees is perfectly acceptable.

You may be inclined to put off doing your taxes — including finding an accountant — until mid-February or even March. But given that so many firms are scrambling to find help, this really isn’t the year to postpone that task.

Our picks for best tax software

Our independent analysts pored over the perks and user reviews for the most popular tax provider services to land on the best-in-class picks to file your taxes. Get started by reviewing our list of the best tax software.

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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