Money Management

Don’t go into an economic downturn unprepared. 

Many financial experts warn of a coming recession, or period of prolonged economic downturn that is characterized by slow growth and high rates of unemployment. You don’t want to go into a recession without being prepared for it, so there are five steps you should start taking right away so you’ll be ready in case your job or finances are affected.

1. Save more money for emergencies

Whether you already have an emergency fund or not, it may be time to put some extra cash away for a rainy day because recessions tend to increase the chances of that day coming.

You don’t want to be left unable to pay your bills if the recession affects your job, nor do you want to have to borrow, because lenders often tighten credit standards during a recession. Interest rates may also be higher as the Federal Reserve has been raising rates.

Traditionally, the advice was to have three to six months of living expenses in emergency savings. Many financial experts, including Suze Orman, now suggest putting even more into a high-yield savings account. Heeding this advice is smart in case a recession does occur.

2. Start improving your skills

A recession typically means unemployment rates surge as companies let people go due to slow growth and reduced demand. You want to make sure you’re indispensable to your employer to reduce the chances your job will be at risk. And you’ll also want to make sure you have a solid resume in case you need to look for a job during a difficult time in the economy.

So start working on improving your employability now. If your company offers training, take it. Otherwise, look into other options for developing your professional talents.

3. Get serious about networking

You don’t want to wait until you’ve lost your job to try to start building a professional network. Make connections now before you need them — and even see if you can help people out if you’re employed and others are looking for work.

You can build a solid network both online and through in-person professional groups. And if you happen to find your job is eliminated, you’ll have plenty of people to turn to who can help you find a new position quickly.

4. Pay off debt to reduce your monthly bills

If you can reduce the amount of money you owe, you won’t have as many large monthly payments to worry about. This can make surviving a recession easier even if your income has been reduced.

READ MORE: How to Pay Off Debt

5. Check out your asset allocation

Finally, you’ll want to take a close look at your investments. It’s a bad idea to stop investing during a recession or to sell assets at a loss just because they’ve started to go down due to the current economic conditions. Recoveries usually follow market downturns, and it’s best to stay the course.

However, you don’t want to be exposed to too much risk given your age and investing timeline. So make sure you have the right mix of assets given how soon you’ll need your money. Anything you will need in around two to five years should likely be in savings rather than invested.

By taking these five simple steps, you can make sure you’re ready if a recession comes.

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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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There’s no such thing as a one-size-fits-all loan. 

Let’s be honest. Although personal loan interest rates have fallen, they’re nothing to brag about. As of this writing, rates on a 5-year fixed-rate loan averages 17%, down 17.66% from last week. Still, if you’re carrying high-interest debt and want to get out from under it, you might be able to make an interest rate of 17% work for you. Here’s how.

Work the numbers

Let’s say you have three credit cards, each with a $10,000 balance. Each card carries an interest rate of 21%. You’re making a monthly payment of $825, but are being eaten alive by interest.

If you remain on the same path and never lower your payment (even as the balance drops), it will take you just shy of five years to pay the cards off in full, and you’ll pay a staggering $18,100 in interest.

Five-year fixed-rate loan

Now, let’s say you take out a 5-year personal loan with an interest rate of 17% and use those funds to pay off your credit cards. Your monthly payment will run you $745 and you’ll pay a total of $14,700 in interest. While the savings doesn’t represent a small fortune, it does leave you with an extra $3,400 to sock away in an emergency savings account or pay down other debt.

Taking out a fixed-term loan to pay off existing high-interest debt also offers these benefits:

You have the option of hiding those cards away in the freezer and not using them. Becoming a cash-only household is a great way to set your feet on solid financial ground.You know precisely when the debt will be paid off. Better yet, if you receive a bonus, tax refund, or other “found” money, you can put it toward the loan, moving your payoff date up.It will be good for your credit score. A whopping 30% of your total FICO® credit score is based on what’s called a “debt-to-credit utilization ratio.” In short, this ratio measures how you use revolving credit (like credit cards). The less you owe on the cards, the lower your credit utilization ratio. And the lower your ratio, the higher your credit score.It may give your credit score a boost in one more way. Another factor that goes into determining your credit score is called “credit mix.” Lenders like to see that you can handle different types of credit. Adding a personal loan to your mix can raise your score by as much as 10%.

Three-year fixed-rate loan

One other way to shed yourself of high-interest debt is to consider taking out a shorter-term personal loan to pay existing debt off in full. Rates on 3-year fixed-rate loans today average 12.95%. That’s up a bit from last week, but still lower than the rate attached to a 5-year loan.

Let’s take a look at how a 3-year loan might help. Using the same scenario, imagine you have $30,000 in credit card debt to pay off. You consolidate that debt by taking out a 3-year loan at 12.95% interest.

Your monthly payment jumps to $1,010, but you’re out of debt in 36 months and pay a total of $6,363 in interest. Compare that number to how much you’ll pay in interest if you continue to pay the credit cards off without consolidating, and you’ll find that you save a whopping $11,700 in interest.

Unless you’re carrying high-interest debt, today’s personal loan rates are not particularly attractive. But, if you do have this kind of debt hanging around your neck, a personal loan may make sense.

The caveat

The higher your credit score, the lower the interest rate you’ll be offered. While there are lenders that work with people with bad credit, you must carefully consider whether consolidating your current debt will save money.

The best personal loan lenders charge no needless fees. For example, there are no administration fees and no penalties for paying the loan off early.

Before you make a move, do your homework. Shop around with different personal loan lenders to learn which offers the best deal. Most lenders run a “soft” credit check before making you an offer. A soft pull will not impact your credit score. It’s only when you accept an offer that the lender runs a hard credit check to make sure everything is in order. Though your score will dip a bit following the hard credit check, it will rebound quickly with regular payments.

While an interest rate of nearly 13% might be all wrong for one consumer, only you can determine whether trading high-interest debt for a lower interest rate will leave you with more money in the bank.

Our picks for the best personal loans

Our team of independent experts pored over the fine print to find the select personal loans that offer competitive rates and low fees. Get started by reviewing our picks for the best personal loans.

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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Image source: Getty Images
What happenedThe IRS is reminding taxpayers that final 2022 estimated tax payments are due on Jan. 17. Taxpayers who aren’t subject to tax withholding, such as freelancers, independent contractors, and self-employed workers, often make quarterly tax payments to the IRS and don’t want to miss the deadline.In a recent news release, the IRS noted: “The Internal Revenue Service today urged those who paid too little tax in 2022 to make a fourth-quarter payment on or before Jan. 17 to avoid an unexpected potential tax bill or penalty when they file in 2023.”
Discover: Find the best tax software for your situation hereSave: We researched free tax software and put together a list of the best here
So whatIn the United States, taxpayers are responsible for paying taxes as they earn income throughout the year. If you’re not having taxes withheld, you need to set money aside and make the payments yourself. If you don’t pay enough taxes and don’t keep up with quarterly estimated tax payments, you may be subject to penalties and or get a surprise tax bill at a later date. If you end up owing money later, you may have to pause some of your other personal finance goals to be able to pay Uncle Sam.Now whatIt’s not too late to act. Don’t put yourself at risk for penalties, interest charges on late payments, or an expensive tax bill. If you haven’t paid enough taxes throughout 2022, you may want to boost your final Q4 estimated tax payment to play catch up. In the news release mentioned above, the IRS suggested the following: “If a taxpayer failed to make required quarterly estimated tax payments earlier in the year, making a payment soon to cover these missed payments will usually lessen and may even eliminate any possible penalty.”If you’ve remained on top of your estimated tax payments, that’s excellent news. Promptly making your final quarterly payment will help you feel more confident that you’re prepared for the upcoming tax season. If you’re new to self-employment or freelancing and need help this tax season, you may want to use tax software to make the tax-filing process more manageable. Review our list of the best self-employment tax software to learn more about your options. Our picks for best tax softwareOur 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. 

What happened

The IRS is reminding taxpayers that final 2022 estimated tax payments are due on Jan. 17. Taxpayers who aren’t subject to tax withholding, such as freelancers, independent contractors, and self-employed workers, often make quarterly tax payments to the IRS and don’t want to miss the deadline.

In a recent news release, the IRS noted: “The Internal Revenue Service today urged those who paid too little tax in 2022 to make a fourth-quarter payment on or before Jan. 17 to avoid an unexpected potential tax bill or penalty when they file in 2023.”

So what

In the United States, taxpayers are responsible for paying taxes as they earn income throughout the year. If you’re not having taxes withheld, you need to set money aside and make the payments yourself.

If you don’t pay enough taxes and don’t keep up with quarterly estimated tax payments, you may be subject to penalties and or get a surprise tax bill at a later date. If you end up owing money later, you may have to pause some of your other personal finance goals to be able to pay Uncle Sam.

Now what

It’s not too late to act. Don’t put yourself at risk for penalties, interest charges on late payments, or an expensive tax bill. If you haven’t paid enough taxes throughout 2022, you may want to boost your final Q4 estimated tax payment to play catch up.

In the news release mentioned above, the IRS suggested the following: “If a taxpayer failed to make required quarterly estimated tax payments earlier in the year, making a payment soon to cover these missed payments will usually lessen and may even eliminate any possible penalty.”

If you’ve remained on top of your estimated tax payments, that’s excellent news. Promptly making your final quarterly payment will help you feel more confident that you’re prepared for the upcoming tax season.

If you’re new to self-employment or freelancing and need help this tax season, you may want to use tax software to make the tax-filing process more manageable. Review our list of the best self-employment tax software to learn more about your options.

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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Image source: Getty Images
What happenedChipotle Rewards members can score complimentary “Freepotle” food drops throughout 2023 thanks to a new perk the company announced Monday. Chipotle will also run a contest where members can try their luck at winning free Chipotle for a year. A total of 3,100 Chipotle fans will win the sought-after grand prize.”In an environment full of pricey subscription programs, we’re introducing a pass to our real food that is free to join and will provide more value to our community than ever before,” said Chris Brandt, Chipotle’s chief marketing officer, in a news release.So whatIn the same news release, Chipotle noted that current rewards members and new members who join by March 6 can access “Freepotle” food drops throughout the year. New members who join the program by March 6 will earn a free side or topping of guac. Current members can score their first “Freepotle” perk from Jan. 9 to Jan. 13.Ten food drops will occur throughout 2023. Examples include free Queso Blanco, free chips, and double protein. Additionally, rewards members can try to win free Chipotle for a year, which could be a substantial personal finance win for anyone.Here’s how to enter the contest: From Jan. 9 to Jan. 15 Chipotle Rewards members in the U.S. and Canada can enter by making purchases of $5 or more in-person or in-app through their Chipotle Rewards account. One entry can be earned per day.Rewards members can also win a year of free Chipotle through social media. The company will go live daily on Instagram and TikTok at noon ET from Jan. 9 through Jan. 13 to spin a prize wheel. Members can enter by commenting “Freepotle,” and if their comment is chosen, they can spin the prize wheel. If the wheel lands on the silver burrito, they win.Now whatRestaurant loyalty programs are a win for your wallet. Food costs, including fast-casual eatery menu prices, continue to rise. Loyal customers can keep more money in their checking accounts by earning free food through programs like this. Many popular eateries have loyalty programs. It’s worth it to your wallet to take stock of your routines and places you frequent to identify any beneficial rewards or loyalty programs.Don’t ignore the Chipotle Rewards program. It’s free to join. You’ll earn 10 points per $1 and can redeem your rewards for free food. By taking advantage of this year’s “Freepotle” perk, you can earn extra freebies throughout the year, which could help you spend less without ditching your go-to burrito or bowl.Alert: highest cash back card we’ve seen now has 0% intro APR until 2024If 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 reviewWe’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. 

What happened

Chipotle Rewards members can score complimentary “Freepotle” food drops throughout 2023 thanks to a new perk the company announced Monday. Chipotle will also run a contest where members can try their luck at winning free Chipotle for a year. A total of 3,100 Chipotle fans will win the sought-after grand prize.

“In an environment full of pricey subscription programs, we’re introducing a pass to our real food that is free to join and will provide more value to our community than ever before,” said Chris Brandt, Chipotle’s chief marketing officer, in a news release.

So what

In the same news release, Chipotle noted that current rewards members and new members who join by March 6 can access “Freepotle” food drops throughout the year. New members who join the program by March 6 will earn a free side or topping of guac. Current members can score their first “Freepotle” perk from Jan. 9 to Jan. 13.

Ten food drops will occur throughout 2023. Examples include free Queso Blanco, free chips, and double protein. Additionally, rewards members can try to win free Chipotle for a year, which could be a substantial personal finance win for anyone.

Here’s how to enter the contest: From Jan. 9 to Jan. 15 Chipotle Rewards members in the U.S. and Canada can enter by making purchases of $5 or more in-person or in-app through their Chipotle Rewards account. One entry can be earned per day.

Rewards members can also win a year of free Chipotle through social media. The company will go live daily on Instagram and TikTok at noon ET from Jan. 9 through Jan. 13 to spin a prize wheel. Members can enter by commenting “Freepotle,” and if their comment is chosen, they can spin the prize wheel. If the wheel lands on the silver burrito, they win.

Now what

Restaurant loyalty programs are a win for your wallet. Food costs, including fast-casual eatery menu prices, continue to rise. Loyal customers can keep more money in their checking accounts by earning free food through programs like this. Many popular eateries have loyalty programs. It’s worth it to your wallet to take stock of your routines and places you frequent to identify any beneficial rewards or loyalty programs.

Don’t ignore the Chipotle Rewards program. It’s free to join. You’ll earn 10 points per $1 and can redeem your rewards for free food. By taking advantage of this year’s “Freepotle” perk, you can earn extra freebies throughout the year, which could help you spend less without ditching your go-to burrito or bowl.

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.

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Add these to your shopping list if you love the idea of saving money. 

If you shop at Costco all the time, you may be aware that the warehouse club giant is constantly rolling out excellent deals. But wading through them can be tricky.

This month, Costco has loads of great items on sale. But here are six in particular you may want to add to your shopping list.

1. $4.50 off Kleenex facial tissues

Like it or not, we’re about to bear the full brunt of winter. And that means it’s the prime season for unsavory germs. That makes January a great time to stock up on tissues. And this month, you can save a bundle on a 10-pack of Kleenex.

2. $11 off TurboTax

You may not want to start thinking about taxes in January. But the April filing deadline will be here before you know it, so now’s a good time to set yourself up with software that can help you get your return done. Costco is offering $11 off of TurboTax’s Deluxe Federal or Deluxe Federal + State package. It’s also offering discounted TurboTax software for small businesses.

3. $150 off of the HP 14-inch 1080p Laptop

If you’re looking for a high-end, business-grade laptop, this device may not cut it. But if you’re looking for a moderately priced laptop with enough capacity to work from home, then this HP model could fit the bill. And now, you can snag it at a discount at Costco so it won’t break the bank.

4. $150 off Michelin tires

When the weather starts getting snowy and the roads get slick, you’ll need good tires to make sure you have plenty of traction. If your vehicle’s tires have seen better days and it’s time for an upgrade, head over to Costco this month, where you can snag $150 off a set of four Michelin tires. It’s a worthwhile investment that could help you hit the road with more confidence in January.

5. $20 off a Nutribullet blender combo

If one of your New Year’s resolutions is to eat healthier foods, then it could be a good time to invest in a product like the Nutribullet blender combo. That way, you can whip up healthy soups and smoothies in your kitchen and stick to your goal. And right now, you can reap some savings on this model at Costco.

6. $7 off Pedigree Dentastix Dog Treats

Brushing a dog’s teeth can be a nightmare if your pup doesn’t like the sensation or doesn’t like to sit still. A reasonable alternative is to give your dog dental treats that cleanse the mouth. And right now, you can snag a 65-count bag from Costco for $7 less than what you’d normally spend.

Shopping at Costco will commonly result in a lower credit card tab than what you’ll end up with at a regular supermarket. And if any of these items appeal to you or address a need of yours, it pays to scoop them up when they’re marked down.

A lot of people want to start off the new year by saving money. Taking advantage of these bargains could help you do just that.

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.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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