Money Management

There are steps you can take to handle unplanned medical bills. 

There are certain expenses you’re pretty much always going to have to bear. For example, you need a roof over your head, which means you’ll have to spend some money on housing costs, whether it’s to cover rent, a mortgage loan, or property taxes and upkeep once your home is paid off. And since we all need to eat, you’ll always need to budget money for groceries.

Healthcare is another one of those perpetual expenses that can’t be avoided. But medical bills commonly catch consumers off guard, to the point where a lot of people wind up in debt due to healthcare expenses they can’t cover outright.

In a new report by the CFPB (Consumer Financial Protection Bureau), 30.9% of people encountered a surprise medical expense between Feb. 2021 and Feb. 2022. And if you’re certain that an unplanned healthcare bill would send you directly into debt, it’s important that you try to set funds aside to cover medical costs specifically. In fact, there’s one account it pays to turn to that could make saving for healthcare a lot easier.

Take advantage of an HSA

If you’re enrolled in a high-deductible health insurance plan, then your coverage may be compatible with a health savings account, or HSA. And if so, it pays to take advantage of that option and set money aside in one of these accounts.

HSAs are loaded with tax breaks, and that alone can make it easier for you to free up money for healthcare spending. For one thing, the money you put into an HSA is tax-free, just like you aren’t taxed on traditional IRA account contributions. That’s important, because let’s say you’re really strapped for cash and can’t easily afford to part with a chunk of your income. If you put $1,000 into your HSA, that’s $1,000 of earnings the IRS won’t tax you on, which can offset your contribution.

Also, HSA funds never expire. There’s no deadline to use them, and you can invest any money you don’t need right away so it grows into a larger sum. Any investment gains you enjoy in your HSA will be tax-free, and HSA withdrawals are also tax-free when used to pay for qualified medical expenses.

Other options to look at

HSAs are a really fabulous savings tool, but your health insurance plan may not be compatible with one. If that’s the case, you can look at setting money aside for medical bills in a flexible spending account, or FSA.

Like HSAs, FSA contributions are tax-free. But you can’t invest funds you don’t need right away, and you can’t carry money forward year after year. So you’ll need to be careful when contributing to an FSA so you don’t end up losing money.

Of course, you can also set money aside for healthcare costs in a regular savings account. You won’t enjoy any tax breaks by going this route, but you’ll get a lot of flexibility.

Either way, medical bills can pop up at any time, even if you’re in relatively good health. The more you’re able to save for healthcare costs, the less stressed you’ll be when they inevitably arise.

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Be careful who you listen to on #FinTok. 

TikTok has come a long way. Originally full of lip sync videos and memes, it’s now one of the most popular apps in the world. You can find content on almost every subject imaginable, including personal finance advice. Some of the “finfluencers” who post these videos have huge followings and make quite a bit of money from their content.

Lots of people, especially those who are part of Generation Z, enjoy learning about money from these bite-sized videos. If you use the app, you might be wondering — can you trust financial advice from TikTok? The answer is a little more complicated than a simple yes or no.

Getting your financial advice from TikTok has its risks

There are a few issues with TikTok as a financial advice platform. For starters, you need to be very cautious about the accounts you trust. Anyone can create an account and share their advice. They don’t need to have any experience, education, or financial background. And if they want, they could always just make that part up. Keep that in mind any time a financial influencer claims to be a multimillionaire.

Being successful on TikTok is all about getting attention, so there are also a lot of sensationalist videos. Earlier this year, there were videos about how cash is going away and Americans would be forced to use a digital currency. Videos with these claims are still up, even though the information is completely false.

That’s just one example, and in addition to sensationalist stories, there are all kinds of dangerous money tips shared on TikTok. Some TikTok creators claim they can teach you how to successfully day trade, even though most day traders lose money. Others make real estate investing seem like the easiest thing in the world.

The bottom line is that TikTok has quite a few scammers, influencers who care more about making money than giving useful advice, and people who just plain don’t know what they’re talking about. Because of this, it’s not a good idea to take what you see at face value. Do some additional research on any money tips you find and the user who is sharing them.

It’s not all bad

We’ve gone over the bad, so it’s only fair to talk about the good, too. There are TikTok creators who publish excellent financial content and advice. Here are some of the trustworthy ones:

Ramit Sethi of @ramit.sethiVivian Tu of @yourrichbffHumphrey Yang of @humphreytalksTori Dunlap of @herfirst100kSeth Godwin of @seth.godwin

You can find interesting and valuable financial information on channels like these, as well as many others. If you find quality accounts to follow, then TikTok can work as a place to learn more about money, how to invest, and other important financial topics.

There is, however, one other drawback of using TikTok for money advice, even with content from reputable creators. Since TikTok videos tend to be on the short side, personal finance content often provides surface-level advice without a lot of details. TikTok has increased its time limits multiple times and now allows videos of up to 10 minutes, but many creators still stick to the 30-to-60-second range.

It’s nice to get a useful money tip in a minute or less. But often with personal finance, the details are important, too. They give you a better understanding of that advice and why it works. That’s something you normally don’t get from TikTok videos.

TikTok has tons of financial advice. Some of it’s trustworthy, but a lot of it isn’t. There’s nothing wrong with learning about money on TikTok if you like the platform, but make sure to do your homework on what you learn. Not only does this help you confirm the advice is legit, but it’s also a good way to get more information that wouldn’t fit in a quick video.

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Don’t consider switching life insurance carriers without reading this. 

For consumers who buy life insurance, policies are usually in effect for a very long time. For example, a term life insurance policy might have a coverage term of 20 or 30 years. The policyholder keeps paying premiums for all those years, and the insurer pays out the death benefit if the policyholder dies during the coverage term.

However, some people who purchased life insurance decide they are not happy with the carrier they have. Perhaps they receive poor customer service, the premiums become too expensive, or for a variety of other reasons.

Whatever the issue, there may come a time when a policyholder wants to switch life insurance providers. But this may not be as easy as it seems — and it may not be advisable.

Here’s why switching life insurers can be a challenge

Changing to a different life insurance provider is not the same thing as changing other types of insurance. For example, it’s typically pretty easy to buy new car insurance, often for a more affordable price after shopping around.

That’s because a driver’s eligibility usually doesn’t change dramatically over time, except in rare cases such as when an accident has happened and the driver’s current insurer isn’t counting it against them due to accident forgiveness coverage but other carriers would factor in the crash when setting rates.

With life insurance, a person’s age at the time they buy coverage can play a big role in how much a policy costs. Younger people present less risk to an insurer of dying during the coverage term. If a policyholder bought life insurance a decade ago and now wants to switch carriers, the new policy would almost assuredly cost more due to their advanced age.

Health status also affects the cost of life insurance. If a person bought a policy and then developed a pre-existing condition, changing to a new insurer might be difficult or impossible. The new insurer would likely require medical underwriting, which means the policyholder would need to provide health details and might need to undergo a medical exam.

If the policyholder’s health status has deteriorated at all since first buying coverage, switching to a new insurer and getting new coverage could be a lot more expensive if it is even possible at all. The existing insurer can’t raise premiums during the coverage term despite these health changes, but a new insurer could — and would — take them into account when deciding whether to offer coverage.

The contestability period resets

Although state laws differ, life insurers typically have a period of around two years after a policy is in effect when they can go back and contest eligibility by reviewing the terms of the initial application. After that time, they may not be able to challenge a claim on the policy.

Buying new life insurance would, of course, reset this contestability period so it could increase the chances loved ones might not receive the promised death benefit if a claim must be made within the first few years of coverage.

Some insurers also have a waiting period before the full death benefit is paid out, which would also be reset.

Because of these risks, coupled with the likelihood insurance would cost more later, most people shouldn’t change life insurance providers. Instead, it’s best to shop around and get the right coverage when first buying insurance in order to make sure the policy is the right one for years to come.

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If you’re new to investing, these tips are exactly what you need. 

Investing is a smart financial habit, as it’s one of the most reliable ways to build wealth. But getting started can be confusing and even a bit intimidating. There are all kinds of investment options available, and when you’re putting your own money on the line, you don’t want to choose wrong.

Former financial advisor Humphrey Yang has published several videos on how to start investing. These have plenty of valuable advice, so here are his best tips for first-time investors.

Have your financial bases covered first

It’s natural to be excited about jumping into investing and starting to grow your money. One important piece of advice from Yang is to have your bases covered financially first. There are two things he recommends doing:

Pay off your debt. Specifically, make sure you get rid of high-interest debt, such as credit card debt. Debt with low interest rates don’t necessarily need to be paid in full to start investing — Yang says this is a judgment call.Establish an emergency fund. This should have at least three to six months of living expenses.

Completing these steps ensures you’re in a good position to invest. If you’re paying, say, 18% interest on your credit cards, paying those off would be a better use of your money right now than investing. And every adult needs emergency savings. If you decide to invest your money instead, you may be forced to sell those investments to cover any unplanned expenses.

Invest in index funds or ETFs

Yang provides plenty of advice on investing in stocks. However, he also says that “for an average or a beginner investor, if you stay away from picking stocks, you’re almost gonna perform better.” Instead, he suggests either of the following:

Index fundsExchange-traded funds (ETFs)

These are investment funds that contain a large basket of stocks, and they make it super easy to invest. All you need to do is buy the fund of your choice. Then, you’ll have a diversified portfolio that’s not overly reliant on a single company.

Lots of investors put the bulk of their money in S&P 500 index funds, as that index tracks 500 publicly traded leading U.S. companies. You can usually find these, as well as many more quality fund options, with any of the best stock brokers.

Sprinkle in some individual stocks — if you’re interested

There’s nothing wrong with having a portfolio made up entirely of investment funds. This is generally a low-risk option that provides solid returns without requiring much work on your part.

But maybe you’d also like to pick stocks and take a bit more of an active role in your portfolio. In that case, Yang has a strategy he calls 85:15. Put 85% of your portfolio in passive investments, like those aforementioned index funds and ETFs. The remaining 15% is for individual stocks that you feel have growth potential.

Don’t try to time the market

A common investing mistake is trying to time the market. It sounds reasonable in theory. After all, there’s no more effective way to invest than “buy low, sell high.” The problem is that timing the market is just about impossible, and the people who try to do it often miss out on the days with the best returns.

Yang’s preferred method is dollar-cost averaging, where you invest equal amounts at regular intervals. For example, you could invest $500 on the 1st and 15th of every month. This takes the guesswork and stress out of investing.

Keep a long-term perspective

If there’s one thing to always remember when investing, it’s to keep a long-term perspective. The market goes through ups and downs. Yang says a mistake he sees from investors of all skill levels is panic selling during market downturns. And unfortunately, 30.9% of investors who panic sell never re-enter the market.

Don’t look at investing as a way to make some quick cash. Your portfolio might appreciate in value right away, or it might go in the opposite direction. Look at investing as a way to build wealth over a span of 10 years or longer.

Investing well is a lot easier than you might think. Start from a strong financial position, with an emergency fund and without any expensive debt. Pick some low-fee investment funds and potentially stocks that you like. From there, it’s just a matter of continuing to invest regularly over a long period of time.

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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.The Motley Fool has a disclosure policy.

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Don’t forget to complete these three crucial tasks. 

When you get ready to purchase a property, there are a lot of steps you must take first. You need to get the right mortgage loan, make an offer on the home, get it accepted and get it inspected and appraised to make sure there are no issues.

When you’ve taken care of all the preliminary tasks, you’ll finally move forward towards closing. That’s when the money and property changes hands. And, as finance expert Dave Ramsey explains, there are some additional tasks you’ll need to check off your to-do list before closing happens.

1. Buy homeowners insurance

Ramsey explained that you’ll need homeowners insurance coverage when you close on your home.

“Talk with an insurance agent at least a month before you plan to close on your house,” Ramsey advised. By looking into your insurance options early, you can shop around and find affordable, comprehensive coverage.

Ramsey is right this task needs to be completed early. Your mortgage lender is generally going to require you to have insurance because a policy will protect the home and the home is the collateral or the security for the loan.

Even if you’re paying cash, though, you want insurance in place before you take possession of the home. The last thing you need is to lose your entire investment because a fire or other disaster happens before you get a chance to get covered.

2. Buy title insurance

Title insurance protects you if it turns out there is some problem with the right to ownership of your home.

When you buy property, you take title to it. The title outlines who the legal owner(s) are. If there is a lien on the title from the prior owner not paying taxes or some other issue, you inherit these problems with the title. You could end up incurring significant costs, so you want to avoid this.

Title insurance protects against these problems. A title company does a search to check for defects or issues and insurance covers any costs you face if anything is missed in that search.

That’s why Ramsey suggests buying title insurance before closing. “This insurance will protect you from any problems in your home’s title,” he explained.

Your lender is going to require title insurance and again, even cash buyers should get a policy.

3. Get a cashier’s check

Finally, Ramsey said you should get a cashier’s check before your scheduled closing.

“This check is proof that you have the exact amount of down payment you said you’d pay,” Ramsey explained. “You will need to bring this on closing day when you sign your closing disclosure.”

Again, Ramsey is right about this. Unless you plan to do a wire transfer of your money to the lender before the day of your closing, you will have to make sure to have this cashier’s check ready to cover all the costs that you owe. You cannot just write a regular check for a home purchase.

Your bank should provide a cashier’s check for a small fee, but you’ll have to get it ready before closing day. The company or lawyer handling your closing will tell you the amount.

By completing these three steps, you’ll be ready for the day of your closing and hopefully the transfer of property will happen without a hitch.

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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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If you’ve got a birthday coming up, check out these freebies. 

Your birthday is a special day that deserves celebrating. Sure, you could break out the credit cards and have an awesome extravaganza while spending a fortune. But there’s a much better way to enjoy your big day on a budget. Just take advantage of all of the places listed below that offer free stuff to you on the day you were born.

Here are ten birthday freebies you can claim

The list below details places that will give you freebies on your birthday, as of mid-Dec. 2022. Be aware that in some cases, you may have to sign up for a membership club or deal before your birthday so get started soon if you want to claim as many as possible.

A&W All American Food: If you join the A&W Mug Club, you’ll get a free root beer float on your big day at one of many A&W restaurant locations.Denny’s: Denny’s Reward members get a free Build Your Own Grand Slam on your birthday — as long as you have a valid ID.Arby’s: If you sign up for Arby’s emails, you not only get a free classic roast beef upon providing your email — you also get an order of curly fries and a small milkshake at $0 cost to you on your birthday.Baskin Robbins: If you want a free scoop of ice cream on your birthday, just join the Birthday Club at Baskin Robbins after creating an account on the site. Then, sit back and enjoy your 2.5 ounce scoop at participating Baskin Robbins locations.Buca di Beppo: Buca’s E-Club will reward you with a free meal when you first sign up. On your next visit after joining, you’ll get a free small pasta entry. On your birthday, you’ll also be gifted a $20 annual birthday gift every year. Since Buca di Beppo’s “small” pastas are much larger than you’d think, you better bring your appetite with this one.Bojangles: Signing up for the Bojangles’ eClub gets you a free ½ gallon of Legendary Ice Tea with purchase and you don’t even have to wait for your birthday. On your birthday, though, you get a free Bo-Berry Biscuit with any purchase. So, you’ve got two reasons to sign up.Krispy Kreme: Want a free Original Glazed Donut on your birthday? Just sign up for Krispy Kreme rewards and it will happen for you. You’ll also get a free Original Glazed when you sign up for the program for the first time.Planet Smoothie: If you become a Planet VIP, you’ll be rewarded with a $6 coupon for use on your birthday so you can enjoy a delicious treat to celebrate.Starbucks: If you become a Starbucks reward member at least a week before your birthday and you make at least one purchase prior to the big day, then you’ll be gifted with a free treat on your birthday.Waffle House: A free waffle on your birthday can be yours if you sign up to become part of the Waffle House Regulars Club.

Give each of these 10 freebies a try and you’ll have more to snack on than you can handle on your birthday, all without spending a penny.

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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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