Money Management

It’s a tricky feat, but it can be done. 

Now that a new year is underway, a lot of people are focused on meeting different financial goals. And one of yours might be to grow your savings considerably.

In fact, you may be eager to see your savings get a $10,000 boost in the course of 2023. And if you’re thinking that’s impossible, hold up for a second. Yes, $10,000 is a lot of money. But on a monthly basis, it’s about $833.

Now if you only earn, say, $40,000 a year, saving 25% of your income may not be so feasible, especially with inflation still soaring. But if you earn more like $80,000 a year, then saving $10,000 in 2023 becomes much more doable — especially if you stick to these tips.

1. Put yourself on a budget

It may be possible to carve out $833 a month for savings purposes. But to do so, you’ll need to spend your money very carefully. And so a good bet is to put yourself on a budget that limits you to a certain amount of spending in different categories. If you stick to those thresholds, you may find that you’re able to free up a lot of cash.

2. Put your savings on autopilot

A big reason some people fail at saving money is that they don’t prioritize it. Instead, they collect their paychecks, pay bills, treat themselves to different splurges, and hope there’s enough money for savings left over at the end of the month.

If you’re serious about meeting a big savings goal for 2023, put the savings process on autopilot. Arrange for $833 to bounce from your checking account over to your savings account at the start of each month so you’re not tempted to spend that cash.

3. Don’t waste money on anything you don’t get great value from

There are different expenses we all pay for each month. But are you really getting your money’s worth from each and every one? If not, cut out those bills that aren’t doing much for your quality of life.

Canceling a gym membership that costs $80 on a monthly basis will give you about 10% of your monthly savings goal. If you haven’t been frequenting the gym, you’re better off not spending the money.

4. Find the right home for your savings

At long last, savings accounts are finally paying more generously. So take the time to compare savings options and find the right account for your money. The higher an interest rate you can snag on your savings, the more free money you’ll earn in the bank to get closer to your $10,000 goal.

If saving $10,000 in the course of 2023 isn’t in the cards for you, don’t sweat it. Saving any amount of money could do great things for your financial picture. But if $10,000 in savings is within your reach, it pays to push yourself to make that happen.

An extra $10,000 could buy you a world of financial protection in the face of emergencies, and it could also help you move closer to a major goal, like buying a home. And if you commit to that target early on, you may find yourself $10,000 richer by December 31.

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 expert loves 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 expert even uses 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 

State stimulus checks could potentially be taxed. What could this news mean for you? 

In 2022, a number of states sent out stimulus checks. Millions of Americans received these direct payments deposited into their bank accounts or sent via check in the mail.

Now, however, it is possible that some of the recipients of stimulus checks will end up having to pay taxes on the money they received.

Here’s why that’s the case, as well as some advice on how you can know if you’ll get a tax bill on your stimulus funds.

State stimulus payments could be considered taxable income

When the federal government sent out stimulus checks during the COVID-19 pandemic, the checks were advances on tax credits. Since tax credits reduce your tax bill and aren’t considered income in a traditional sense, you didn’t have to worry about owing taxes on your federal stimulus checks.

But, in some cases, the states that sent out payments are reporting the distributed money as income. For example, the California Franchise Tax Board decided it would report the middle class refunds the state was sending out to the IRS if the payments were valued at over $600. The reason for this choice is that California payments were exempted from state income tax, but the money could still be considered income by the IRS.

This is not the case with all stimulus check payments sent by states. For example, the state of Colorado has indicated that the Cash Back tax refund is not considered taxable income. But it is possible other states will take a similar approach to California and require that you report your state stimulus funds to the IRS as income.

How will you know if your state stimulus money was taxable?

The best way to determine if your state stimulus check is considered income to report to the IRS or not is to watch the mail to see if you receive a 1099-MISC form. These tax forms are issued if you earn miscellaneous income valued at $600 or more.

If your state sends you one of these, that means you must report your stimulus money on your federal tax return. Keep a watchful eye on your mailbox to see if this form arrives. Most of these forms have to be postmarked by Jan. 31, 2023, so if you are going to get one, you should expect it to come within the next few weeks.

If you do, be sure to follow the instructions for reporting the miscellaneous income when you submit your 1040 forms for the 2022 tax year.

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 expert loves 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 expert even uses 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 

The quick answer? It should. 

If you have people in your life who depend on you financially, or who might get hurt financially in your absence, then it pays to put a life insurance policy in place. That way, if something happens to you, you won’t end up leaving those important people in the lurch.

A lot of people wind up applying for life insurance in their 30s, since that’s a common period of life to have kids. But you may end up applying for life insurance in your 20s, 40s, or even 50s.

The question is: Should your age affect the amount of life insurance coverage you get?

Take your age into account

Your goal in buying life insurance should be to provide your loved ones with enough money to sustain themselves financially in your absence. But your age might dictate the number of years you’re looking to provide coverage.

Let’s say you’re married with no kids and you’re in your 40s. You may want to put a 20-year term life insurance policy in place so your spouse is protected until they reach retirement age.

If you earn $80,000 a year, you may decide you want your life insurance policy to offer a high enough benefit to replace your salary 20 times over, leaving your spouse with $1.6 million. But that number might look different if you were to apply at a younger or older age. (For example, if you only had to provide your spouse with a benefit to cover 10 years of your salary, you’d be looking at $800,000 in life insurance.)

Your age could determine your insurance costs

Just as you should account for your age when deciding how much life insurance to buy, so too might your age dictate how much your coverage costs you. Generally speaking, the older you are when you apply for life insurance, the higher your premium costs will be.

For one thing, as people age, their health tends to decline. You might weigh more in your 40s than in your 20s or 30s. But a higher weight could lead to higher premium costs because your life insurance company might assume it’s taking on a higher risk.

What’s more, if you apply for coverage when you’re on the older side, your insurer might assume it’s more likely to have to pay out your death benefit. And so you might face higher premium costs for that reason alone.

This isn’t to say you shouldn’t apply for life insurance when you’re on the older side. You might have people in your life you want to protect, and that’s an essential thing to do. However, don’t be surprised if the amount of money you’re charged for life insurance at, say, age 45 is a lot higher than what someone in their mid-30s is charged.

At the same time, shopping around for life insurance could result in lower premium costs. So no matter what age you’re applying for insurance at, talk to different companies and compare quotes before signing up. A little research on your part could result in a fair amount of savings.

Our picks for best life insurance companies

Life insurance is essential if you have people depending on you. We’ve combed through the options and developed a best-in-class list for life insurance coverage. This guide will help you find the best life insurance companies and the right type of policy for your needs. Read our free review today.

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 

If you want to manage your finances together with a partner, budgeting apps may help. 

Do you struggle with money management? Budgeting apps can make it easier to manage your finances and reduce overspending. These apps can be helpful if you’re looking to free up some excess income for savings goals or want to put as much extra money towards paying off debt. If you manage your money with a partner, whether through shared or individual accounts, using a couples-friendly budgeting app can be beneficial so you’re both in the loop. Here are a few budgeting apps for couples with shared financial goals.

1. Goodbudget

Cost: Free (with limited capabilities), or $8 per month or $70 annually for the Plus version

Goodbudget is a budgeting app that works well for couples who want to manage their finances together. You can set up a household budget and share it with budgeting partners. This app uses the envelope method of budgeting. You’ll take your money and set up categories and spending limits, and you can monitor your progress. If you’re looking for a simplified way to follow a budget together virtually, this is a good option.

2. Honeydue

Cost: Free

Honeydue is another finance app for couples. You and your partner can use this tool to track your financial accounts, review balances, coordinate bills, split expenses, and collaborate as you work on your financial goals. If you don’t have a lot of extra cash to spare and want to make some financial changes, you may want to try this free budgeting app.

3. You Need a Budget

Cost: $14.99 monthly or $99 yearly

You Need a Budget (YNAB) is a popular budgeting tool. This app focuses on zero-based budgeting, which takes all your money and gives every dollar a job. Recently, the company introduced a new app feature, YNAB Together, which allows couples, roommates, and families to share a budget to work on their finances together. As a YNAB user, you can invite up to five people to YNAB Together for the price of one subscription.

4. Mint

Cost: Free

While Mint doesn’t market itself as a couples budgeting app, you can use it to manage your finances with another person. You can import data from your financial accounts and add your personal and shared accounts to manage your finances through one shared Mint account. Unlike some other budgeting apps, this app is free to use.

Mint’s most notable features are the ability to monitor your cash flow, keep track of your monthly expenses, set and follow spending budgets, and negotiate your bills. You can also set up alerts so you’re notified about extra fees, overspending, and upcoming bills. If you have financial goals you’re working on this year as a couple, Mint can help you reach them.

5. Simplifi

Cost: $3.99 monthly or $47.88 yearly

Simplifi is another budgeting app couples can use to manage their finances jointly. You can connect various financial accounts, set and work on savings goals, monitor your spending, set and follow spending budgets, and review your progress to see what changes you need to make as you navigate your financial journey. Couples can connect their individual or joint accounts to manage money as partners.

Support each other’s shared and personal financial goals

Working together as a team as you work on shared and personal finance goals is a healthy way to be supportive in your partnership. If you struggle with making your financial dreams a reality and want to get on the same page, you may want to try couples budgeting apps. To learn more about additional apps, check out our list of the best budgeting apps.

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 expert loves 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 expert even uses 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 

It’s “so simple that most people don’t believe it,” according to finance guru Ramit Sethi. 

Many people see investing as a complex subject, where you need to have lots of know-how to be successful. While it’s far from the truth, this misconception often leaves would-be investors hesitant to get started. They assume they still have a lot to learn and might lose money if they’re not careful.

It’s actually easy to invest and work your way toward a strong retirement fund. Financial advisor and I Will Teach You To Be Rich author Ramit Sethi frequently shares an excellent way to invest your money. He says “get this right and you’re 90% of the way there.”

The only investing trick you need

There’s a simple trick that many successful investors swear by — set it and forget it. Sethi recommends it, Warren Buffett recommends it, and they’re just two of the more famous examples.

For this method, start by selecting one or more passive investments. These are investments that do the work for you by putting your money in a large number of stocks (and sometimes bonds). Just about all the good stock brokers have lots of funds to choose from that work well as passive investments. Here are a few popular options:

Index funds follow a specific market index, such as the S&P 500 (500 of the largest publicly traded U.S. companies).Target-date funds invest money based on a target retirement year.Mutual funds are professionally managed investment funds.

If you already have a brokerage account or a retirement account, see what’s offered there first. If not, or if you’re not sure what to pick, look into the best index funds for some low-fee options. For an investment that will follow the stock market fairly well, an S&P 500 index fund is a great choice.

Once you’ve picked out your investments, invest monthly and take a hands-off approach. Consistency is key here. Decide on how much you can afford to invest per month, such as 10% of your monthly income. If possible, automate this process by setting up a recurring monthly investment.

This is one of the simplest and most effective ways to build wealth. Although it has ups and downs, the average stock market return is about 10% per year. If you’re a long-term investor, the odds are in your favor, especially if you’re investing more money every month.

Setting yourself up for a comfortable retirement

You don’t need to get every little thing right to invest for retirement. All you really need to do is get a few big things right. To recap, here’s what to focus on:

Choose quality passive investments you can buy every month. Options include index funds, target-date funds, and mutual funds.Decide how much to invest every month. If you can max out retirement account contributions, that’s great. But consistency is what’s most important here.Set it and forget it. Ideally, set up automatic monthly investments. From here, let your investments do their job and don’t take any money out.

You can do all this through an individual brokerage account, an individual retirement account (IRA), or a 401(k). Since IRAs and 401(k)s offer tax benefits, it’s generally recommended to prioritize funding those.

There are certainly more advanced ways to invest. Some people like picking stocks and building their own portfolios, to give one example. If you’re interested in going further with investing, that may be something to consider. But if you want to keep it simple, the set-it-and-forget-it approach is hard to beat.

Our best stock brokers

We pored over the data and user reviews to find the select rare picks that landed a spot on our list of the best stock brokers. Some of these best-in-class picks pack in valuable perks, including $0 stock and ETF commissions. Get started and review our best stock brokers.

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 Target. The Motley Fool has a disclosure policy.

 Read More 

The quick answer? It depends. 

You’ll often hear that life insurance is something everyone needs. But there are limited exceptions to that rule. And if you’re childless and have no debts, then you may be okay to skip out on getting life insurance.

But that’s not automatically the case. Ultimately, there’s one question you’ll need to ask yourself to determine whether life insurance makes sense for you.

Will people in my life struggle financially in my absence?

The purpose of life insurance is to protect your loved ones from financial upheaval in the event of your passing. If you can say with certainty that no one in your life will struggle financially in your absence, then you can probably pass on getting life insurance. But to be clear, having no debts or kids doesn’t automatically mean that life insurance isn’t necessary.

Granted, a big reason many people sign up for life insurance is that they want to make sure their kids are taken care of in the event of their untimely passing. And often, people who have large joint debts with a spouse or partner buy life insurance so those debts can be paid off in their absence. For example, if two spouses have a mortgage loan together and require two incomes to keep up with that mortgage, life insurance becomes a necessity.

But maybe you have no kids, no debt (say, you’ve paid off your home, or you prefer to rent), and a spouse who’s financially independent — they have their own career, a great salary, and plenty of money in savings. In that case, you may decide not to buy life insurance and to do other things with your money — such as invest it. That’s not necessarily a terrible choice.

Look at the big picture

The decision to buy versus skip life insurance is a big one. Before you make that call, do a really thorough assessment of your situation to make sure you’re choosing wisely.

It may be that you’re not married, or that your spouse is financially independent, and you don’t have any children. But what if you have a sibling who tends to rely on you for occasional financial support? In that case, buying a small life insurance policy and naming that sibling as its beneficiary could be a smart move — and it may not cost you a lot.

Similarly, let’s say you have aging parents you care for. You take them to doctor appointments, run their errands, and make sure their home is maintained. You may not provide them with financial support per se, but the help you give them will cost money to outsource to an aide. And so in that case, buying life insurance and designating your parents as your joint beneficiaries makes sense.

Remember, when it comes to life insurance, the question to ask is whether people in your life will struggle financially without you around. If the answer is yes to any degree, then a life insurance policy is worth acquiring — even if it’s a smaller policy with only a modest benefit.

Our picks for best life insurance companies

Life insurance is essential if you have people depending on you. We’ve combed through the options and developed a best-in-class list for life insurance coverage. This guide will help you find the best life insurance companies and the right type of policy for your needs. Read our free review today.

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