Money Management

Money comes with emotional baggage. 

For a lot of people, myself included, money management is tied to emotions. If you think about it, it makes a lot of sense. Money is part of many of our formative experiences. Think back to being a kid and getting cash for your birthday and feeling rich (I’ve never felt as rich as I did when I turned 10 and held $40 cash in my hand; I got to spend it on cassette tapes at the mall). Or remember watching your parents pay bills (and for a lot of people, seeing them stress about how to find the money for those bills).

Once you’re an adult, you’re responsible for your own money in most cases, and this can be a scary situation. There’s so many opportunities to make poor decisions with your money, like buying a house for the wrong reasons. Or you might end up in debt and have to find a way to get out of it. Life is full of potential money pitfalls. Here are a few everyday occurrences where you might find yourself spending too much money.

1. You’re feeling emotional

Ever hear the phrase “retail therapy”? This is when you go shopping for the express purpose of making yourself feel better. A survey found that 62% of shoppers had bought something to cheer themselves up, per WebMD. This can be a very dangerous game indeed, especially if you have a weakness for online shopping. It used to be that you had to physically leave your home to indulge the shopping itch, but now all you need is an internet-enabled device and a credit card. Incidentally, you don’t have to be feeling bad to do this; sometimes you might be happy and have the urge to buy yourself a present to celebrate.

2. You have to buy a gift

Speaking of happy occasions, it’s all too easy to go overboard with your spending if you’re buying a gift — especially if it’s for someone you love and want to make happy. I once spent a few hundred dollars I could ill afford (I was then a graduate student) to buy my dad an archery set for Father’s Day. It may have been 15 years ago, but I still remember it, as well as the hit to my checking account. (He did love it, by the way.) Remember that for the people you love, it’s often your presence that makes them the happiest, rather than your presents.

3. You’re shopping a sale

It’s very easy to throw all caution (as well as your shopping list) to the wind when you’re in the midst of a big sale. For events like Black Friday or Amazon Prime Day, it can be helpful to make a plan ahead of time — even if part of the plan is just setting yourself a certain amount of money (say, $50-$100) that you’re allowed to spend without a larger justification.

4. You’re celebrating the holidays

Many people just went through the cycle of holiday spending, and I hope that for you, it wasn’t a season of overspending. The holidays are another time when we forget that the important thing is time with people we love, rather than going into debt to buy them just the perfect gift.

5. You’re on vacation

Sometimes vacations don’t feel like real life. You’re away from home, you’re seeing beautiful scenery and eating in fun new restaurants, so you might end up feeling as if the money you spend doesn’t matter. And after all, spending for experiences makes us happier than merely buying items, according to 2020 research from the McCombs School of Business at UT Austin. Be wary of overspending on vacations, because like memories, credit card debt can stick around for a long, long time.

How can you better manage your spending?

If you struggle with your spending habits, I sympathize. It’s never as simple as “stop spending so much money,” is it? Thankfully, there are a few things you can do to keep a tighter rein on your money:

Make a budget: It’s not sexy, but having a clear-eyed look at your income versus your expenses can really help. If you’re not a spreadsheet fan, try a budgeting app.Talk to a professional: I think it’s great to talk about money with everyone in your life, but I have become a big believer especially in talking to a money professional like a financial planner. They have no personal stake in your finances, and can make recommendations for your spending, saving, and future planning.Increase your income: In a very real sense, you can only cut back so far. If you’re living paycheck to paycheck even after taking steps to spend less on the fun stuff, consider increasing your income, if you can. This could be in the form of a raise at work, a side hustle, or even getting a new full-time job (or career) altogether.

Most of all, don’t stop paying attention and don’t give up. Every single day is a chance to get better with money and figure out how to defeat your overspending triggers.

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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.

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Interest rates on these bonds will remain pretty high until May. 

A few months ago, I bonds started getting a lot of attention when interest rates reached a record 9.62%. But that rate expired back in November, leaving many to wonder whether investing in I bonds still made sense for them. Below, we’ll take a look at what you can expect from I bonds as we move into 2023.

What are I bonds?

For those who aren’t familiar, I bonds, also known as Series I savings bonds, are a type of federally backed government bond with an interest rate that’s tied to the inflation rate. This makes them a popular investment when inflation is high, as it has been this year.

I bonds interest rates have two parts: the fixed rate and the inflation rate. The fixed rate is locked in for as long as you hold the bond, but the Bureau of the Fiscal Service updates the inflation rate every May and November based on changes to the Consumer Price Index for All Urban Consumers (CPI-U). The combination of the fixed and inflation rates is known as the composite rate.

How much can you earn with I bonds in 2023?

How much you earn with I bonds depends on several factors, including how long you hold the bond and the bond’s composite interest rate. For bonds issued between Nov. 1, 2022 and April 30, 2023, the composite rate is 6.89% for the first six months. That’s down quite a bit from the 9.62% high, but you could still walk away with quite a bit in interest.

If you invested $1,000 in an I bond right now, you’d earn $34.45 in interest over the next six months. And if you invested $10,000, you’d make close to $350 during that time. That’s a pretty generous return, but it’s not the full story.

It’s impossible to predict how much you’ll earn during the next six months because the government won’t announce these rates until May 2023. They could go up, which means you’d earn even more in interest. But it’s more likely that interest rates will decrease as the rate of inflation continues to slow down. And if that happens, you’ll earn less interest in your next six months of I bond ownership.

You might think of cashing out your I bonds after six months to avoid a rate drop, but this won’t work. You’re not allowed to cash in your I bonds until you’ve held them for at least one year, and if you cash them in before you’ve held them for at least five years, you’ll pay a penalty of three months of lost interest.

Are I bonds a good investment for you?

I bonds can make good short-term investments, but you should feel comfortable holding them for at least one year and ideally, five years before cashing them in. They can be a good fit for seniors who want to earn interest on their savings while also keeping their nest egg safe. Younger investors who are saving for the long term can probably do better by keeping their savings in stocks.

If you choose to invest in I bonds, you should know that you’ll still pay federal taxes on the interest you earn from these bonds. However, there’s an educational tax exclusion, which enables some I bond owners to avoid taxes on their I bond interest. In order to claim this exemption, you must meet the following requirements:

You spend money on qualifying higher education expenses for yourself, your spouse, or your dependents.You cash in your I bonds in the same year you claim this tax exclusion.You have a tax-filing status other than married filing separately.You are 24 or older when you purchase the I bonds.Your modified adjusted gross income (MAGI) is less than the cut-off amount the IRS sets in the year you want to claim the exclusion. This can change over time.

How do you purchase I bonds?

There are two ways to purchase I bonds. You can purchase paper I bonds by mail only when filing your federal tax return. You may purchase a minimum of $50 and a maximum of $5,000 of these in a single year.

But most people opt for electronic I bonds, which you can purchase online from TreasuryDirect. The minimum purchase of these is $25 and the annual maximum is $10,000. If you choose to purchase paper and electronic I bonds together, you can buy a maximum of $15,000 per year.

Once you’ve purchased your I bonds, you must hold them for at least one year and then you can cash them in whenever you’d like. If you choose not to cash them in, they’ll continue to earn interest for up to 30 years.

Only you can decide if I bonds are a smart investment for you right now, but even if they’re not a good fit, they’re something to keep an eye on for the future. They can give you some peace of mind when inflation is running high, as long as you can spare the cash for at least a year.

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It pays to hear what she has to say. 

At this point, a lot of us are adjusting to being back to reality after taking time off for the holidays. That means going back to full-time work, taking down Christmas lights, and taking inventory of gifts received.

If you exchanged gifts with a lot of people in your life, then chances are, at this point, you’re sitting on a number of gift cards. And that’s not necessarily a bad thing.

In some cases, a gift card can be as valuable as cash. For example, let’s say you shop at Target for essentials every single week. If you have $100 in Target gift cards following the holidays, that’s basically the same as having been given $100 in cash, since you know you have a need for those gift cards.

But some of your other gift cards may not be as useful. And even the ones that are useful should be utilized carefully. With that in mind, financial guru Suze Orman has two great tips for making the most of the gift cards you’re sitting on.

1. Use your gift cards for needs, not wants

You may have your eye on some really cute home decor at Target. And if you’re the proud holder of a $100 gift card, that gives you a perfect opportunity to buy those items without having to add to a credit card balance.

But if money is tight, then Orman says you should use your gift card for items that are needs — things like groceries, cleaning supplies, and personal care products. And if you’re thinking, “but the person who gave me this gift card would want me to spend it on something fun,” think again.

Yes, that may be the case. But the person who gave you the gift card probably doesn’t want to see you struggle financially or add to your debt. And so if you were to use that gift card to buy food to put on the table, and that were to somehow get back to the gift-giver at hand, chances are, it would go over just fine.

Besides, it’s not like gift cards come with tracking devices that allow those who give them to see what they’re redeemed for. So if you were to buy yourself $100 worth of toilet paper with a Target gift card, the giver wouldn’t end up any the wiser.

2. Trade in your gift cards for cash

A $100 Target gift card may be really useful for you. But if you have a $100 gift card to a restaurant you rarely eat at or don’t particularly enjoy, then that’s a different story.

In that case, your best bet, says Orman, is to swap your gift card for cash. And there are different sites that allow you to do that, so a good idea is to do an internet search, get a list of options, and see which ones have the most appealing exchange rates.

One site, for example, might give you $80 for an unwanted $100 gift card, while another might give you $85. So in this case, the latter option is clearly the better one. Also, the amount of cash you’re offered might hinge on the specific gift cards you’re looking to sell, which is why it pays to do a lot of research.

A final option worth considering

Orman’s advice to use your gift cards for essentials and/or trade them in for cash is really great. But if you’re in a good place financially, there’s a third option to look at — giving your gift cards to people who are less fortunate.

Maybe a neighbor of yours lost their job a few months ago and has been struggling. Or maybe there’s a single parent you’re friends with who’s perpetually strapped for cash. Giving your gift cards to people in need is a great way to pay it forward — and show appreciation for the fact that your financial circumstances are very different.

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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.Maurie Backman has positions in Target. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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We skip the obvious “debit cards” answer. 

Online payments have undergone a Darwinian evolution. PayPal. Cash App. Apple. One after another, payment platforms are growing the number of services they offer.

Savvy consumers are evolving, too. They are adopting new ways to pay out. In fact, digital wallets are now the most popular payment method in the world.

Shoppers have options. Possibly, too many options. Figuring out the best way to shop can be intimidating. Here’s a quick breakdown of the different ways to shop online — without whipping out a credit card.

Mobile wallets

Mobile wallets like Apple Pay save payment information to users’ mobile devices. You can link your wallet to your credit card or bank account, and the wallet will automatically fill in that information at checkout. It’s fast, convenient, and secure.

Three popular mobile wallets:

Apple PaySamsung PayGoogle Pay

Users who shop from their phones should consider using mobile wallets. I use Apple Pay frequently, saving time normally spent entering card information. That said, it’s possible that using a mobile wallet causes me to spend more money than I would otherwise.

Peer-to-peer checkout

Some of the best payment apps are those that facilitate peer-to-peer payments. Users with active Venmo or Cash App accounts get a bonus feature: one-click checkout.

Popular peer-to-peer checkout services:

Pay with VenmoPay with Cash App Pay

Shopping this way is fast, easy, and doesn’t require users to enter credit card information. Users need Venmo or Cash App accounts to use this credit card alternative.

Digital payment platforms

Watch out — digital payment platforms are on the rise. They offer users credit-card-free ways to pay. Users can transfer money from their bank accounts directly into their digital payment service, then pay with that balance when shopping online.

Users can also save credit card or debit card info to their accounts. For example, Shop Pay allows users to pay with saved credit card information.

Popular digital payment platforms:

PayPalShop Pay

Digital payment platforms allow users to save all their financials in one easy-to-access account. Some offer alternative perks as well, like credit lines or package tracking.

Buy now, pay later

Buy now, pay later (BNPL) platforms like Klarna allow users to pay in installments. Wildly popular, about half the American population has used a BNPL platform at some point.

Popular BNPL platforms:

KlarnaAfterpayPayPal Credit

Perks of BNPL services include interest-free loans and convenient checkout. These services typically integrate with websites, creating a smooth user experience for shoppers.

Users should consider holding off on making purchases they’re unsure they can repay on time. BNPL services charge late fees and command high-interest rates. A safer alternative is to put money into a savings account each week until you can pay for the purchase in full.

Prepaid cards

The convenience of shopping online without a card on hand typically requires users to set up accounts on new platforms. Users who wish to remain anonymous may consider paying with prepaid cards instead.

Prepaid cards work similarly to debit cards, but there is one key difference: Shoppers can purchase them with cash, meaning you don’t need an existing bank account to use them. Prepaid cards from Visa or Mastercard are available at most convenience stores and supermarkets.

Users should consider shopping with a prepaid card if they’d rather not put their credit card or banking details online.

Convenience vs. privacy

I prefer to maximize convenience. I shop with a mix of mobile wallets like Apple Pay and digital payment platforms like PayPal. I don’t mind setting up new accounts. However, I had to adjust my email settings to avoid unsolicited advertisements.

Users should choose what they can afford and consider what information they’re comfortable sharing online. To save extra while online, shoppers may want to research the best rewards credit cards, which come with nifty perks.

Online shopping has evolved, and users have evolved with it by adopting new payment methods.

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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.Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Cole Tretheway has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Apple, Mastercard, PayPal, and Visa. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.

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You can easily keep your spending in check by shopping at Walgreens. 

Drug stores and pharmacies offer convenience to our lives. Whether you need bread, milk, cold medicine, vitamins, a quick snack, or shampoo, you can find what you need at most drug stores. If you have a Walgreens in your area, don’t miss out on opportunities to save money while shopping there. Here are a few ways to get discounts at Walgreens.

1. Join the myWalgreens program

Signing up to be a myWalgreens rewards member is quick and easy. It’s free to join, and you can get discounts and earn rewards. As a member, you’ll earn 1% Walgreens cash rewards on all purchases and 5% Walgreens cash rewards when you buy Walgreens-branded products.

2. Find the best deals by checking the weekly ad

Walgreens makes it easy to stay on budget. Before your next shopping trip, reviewing the weekly ad is good practice so you know what items are on sale. You can grab a paper copy in-store or use the Walgreens website or mobile app to browse deals. Knowing what’s on sale will make it easier to compile a shopping list that doesn’t have you going over budget.

3. Clip mobile app coupons

The Walgreens mobile app is very useful. One feature you won’t want to miss is the virtual coupon offering. New coupons are added frequently, so check the app every so often so you don’t miss out on extra savings.

4. Save Register Rewards for future purchases

Make sure you keep any Register Rewards printed along with your receipt. Walgreens Register Rewards function like coupons, giving you a discount on future orders. You earn them by purchasing eligible items. Walgreens outlines ways to earn Register Rewards in the weekly ad.

5. Earn Walgreens Cash

myWalgreens members can earn Walgreens Cash via their purchases. As mentioned above, you’ll earn Walgreens Cash every time you shop. But you can also take advantage of additional ways to earn Walgreens Cash by making eligible purchases, and you can learn more about these opportunities by reviewing the weekly ad. Let your Walgreens Cash accumulate and redeem them for a discount at the register.

6. Use promo codes

Believe it or not, Walgreens also has promotional codes. You can find these in the retailer’s mobile app and apply them to eligible in-store pick-up or online orders. You will likely find these promo codes listed in coupon apps, but Walgreens also highlights them in the mobile app. This offers yet another way to keep more money in your checking account.

7. Don’t forget to bring manufacturer coupons

Walgreens accepts manufacturer coupons, too. If you’re a coupon clipper, bring your coupons when shopping at Walgreens. It’s a good idea to review the store’s coupon policy to learn more about exclusions and other rules.

Don’t spend more money than necessary

If you’re on a budget and need to pick up a few essentials, you can keep your spending in check by shopping at Walgreens. The next time you visit your local store, don’t miss out on all the ways to save money so you can get what you need while still honoring your personal finance goals.

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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.Natasha Gabrielle 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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This will help you start the new year off right. 

Most people don’t start working on their New Year’s resolutions until January, but if you want to give yourself the best chance of success, it doesn’t hurt to lay some groundwork right now. That’s especially true if you hope to accomplish a big goal, like paying off credit card debt, in 2023.

Here are three helpful moves you can make right now so you’ll be ready to dive right into debt repayment when we finally ring in the new year.

1. Take stock of where you are

Start by making note of all the cards you’re currently carrying a balance on. Record the following information for each one:

The current balanceThe minimum paymentThe payment due dateThe annual percentage rate (APR)

If you expect to charge more to the card in the coming weeks, make a note of this as well so you can double-check the balance in the new year.

You can use this information to prioritize which cards you want to pay off first if you don’t plan to take out a personal loan or open a balance transfer card. Generally, it’s most cost-efficient to pay the minimum balance on each card and then put any extra money on the card with the highest APR first until it’s paid off. Then, you move all your extra cash to the card with the next-highest APR, and so on. This is known as the debt avalanche method.

2. Scope out balance transfer card and personal loan offers

Balance transfer cards and personal loans can both be excellent tools to help you get out of credit card debt, but you need to understand exactly what you’re getting. Balance transfer cards enable you to transfer your balance from one or more credit cards to a new card and there’s usually a 0% introductory APR period that could last anywhere from a few months to a couple of years. During that time, your balance won’t grow at all, making debt repayment easier.

But balance transfer cards charge fees, which raises your total balance slightly. And you’ll start accruing interest on the remaining balance as soon as the 0% APR period is up. You also can’t open a balance transfer card with an issuer you’re already indebted to. You must choose a card with an issuer you don’t currently work with if you want to do a balance transfer.

Personal loans give you a predictable monthly payment and they don’t require any collateral. You don’t always need great credit, but you could still pay quite a bit in interest with one of these loans. And they may have some upfront fees too.

It’s best to compare a few balance transfer cards and personal loans side by side to see which has the fewest fees and the most generous terms. Even if you’re not ready to open one yet, doing this research in advance will make things a lot smoother for you when you are ready to take that next step.

3. Create a new budget

Ultimately, you need to be able to find some extra cash in your budget if you hope to pay down your debt. But that’s not easy for a lot of people. You can look through your existing budget for opportunities to reduce spending, like canceling subscriptions you’re not using or limiting discretionary purchases. But sometimes, this isn’t enough.

In that case, you may want to look for ways to increase your income so you can bring some extra money in for debt repayment. You may be able to negotiate a raise or find a better-paying position with a different company. You could also try starting a side hustle if you have a little free time. Put any extra cash you earn toward your debt repayment first. When it’s paid off, you can think about diverting some of that money to savings or to buy yourself something nice.

Paying off credit card debt is a challenging task, but if you break it down into these smaller steps, it can feel a little more manageable. Just take things one day at a time and do the best you can. Even if you don’t manage to pay it all off in 2023, making the moves above could get you a little closer to financial freedom.

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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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