Money Management

It’s a move that could pay off big time. 

If you made the decision to take on a side hustle during the holiday season this year, you were no doubt in good company. A lot of people take on seasonal side gigs to boost their income to help cover their holiday expenses, from gifts to decorations to travel. Plus, if you were carrying credit card debt before the holidays, a temporary side gig could be your ticket to paying it off quickly.

Your initial plan may have been to get a side hustle in, say, late November, and wrap it up at the end of the year or early January. But sticking with that side gig could benefit you tremendously.

In fact, a Neighbor.com survey found that 92% of people who have or planned to get a side gig for the holidays plan to keep it afterward. And doing so could be a really smart thing given that economic conditions could turn sour in 2023.

Protect yourself with extra income

There’s been talk for months about a potential recession hitting in 2023. And if that comes to be, a side hustle could really work to your advantage.

For one thing, you can use the extra money you earn from your side gig to pad your savings account if your main paycheck is largely eaten up by essential bills. And then, if something happens with your main job (say, you’re laid off) during a recession, you’ll have more cash reserves to tap.

Also, let’s say you do lose your main job at some point in 2023. Your side hustle might have more staying power. And so in that situation, you might have the option to take on more hours at your side gig to compensate for your missing paycheck from your main job.

Will you be able to keep your side hustle?

A lot of businesses tend to need extra help during the holidays. This especially applies to industries like retail and hospitality. But in some cases, the option to hang onto your holiday side hustle may not be on the table, so don’t assume it’s a given. You may want to start looking for other opportunities if you’ve been enjoying that extra income.

Either way, if you are interested in keeping your side hustle beyond the end of the holiday season, communicate that as soon as possible. If you let your current manager know that you want to stay on board, they may be able to shift things around to make room for you all year long. But if you wait too long to speak up, another seasonal worker might have that conversation first — and snag the year-round role you want to take on.

Remember, too, that you never know when a side hustle has the potential to become a full-time job — one with better pay and perks than what you’re getting at your main job now. So if you’re enjoying your side gig to a reasonable extent, you may want to plan on keeping it — especially given that economic conditions could take a turn for the worse once the new year arrives.

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Don’t panic, but contact your bank ASAP. 

One of the worst feelings in the world is realizing you’ve lost track of a vital piece of your financial life. It could be your smartphone, your go-to credit card…or your debit card. Your debit card is a direct line to the bank accounts you have it linked to, and it doesn’t come with the same level of robust protection as credit cards do.

Let’s say you’ve just gotten home from a shopping trip, and in the course of putting away your purchases, you realize that your debit card is missing. What now?

Your debit card is AWOL, act fast!

Your first course of action should be making sure you haven’t just misplaced the card. Check through your entire wallet to ensure you didn’t accidentally put it in a different card slot than usual. Check your purse, if you carry one — maybe it just fell out of the wallet. Check your pockets. Check your car. If you don’t find it, take the following steps. Note that speed matters here.

1. Lock your card

When you lock your debit card, you’ll basically be turning it off remotely, to prevent unauthorized withdrawals and purchases. You may be able to do this from your bank’s mobile app or online banking portal, if you look under “Security” or “Card Settings.” If you’re sure the card was stolen and not just misplaced, you’ll end up needing to cancel the card and have a new one issued, so proceed to step two.

2. Contact your bank

Time to call your bank’s customer service number, where a friendly representative will cancel your debit card and arrange to have a new one sent to you. If you rely on your debit card for regular purchases, you may want to ask about having the process expedited (which may cost you extra, even if the replacement card itself is free). Even with a rush job, you’re likely still going to have to wait a few days for your new card to come in the mail.

3. Send a follow-up email or letter to your bank

This is to create a paper trail, in case your account is compromised and the bank needs to investigate. Be sure to include the date and time of your original call to the bank about your missing debit card, and if you notice fraudulent charges on your account, include them here, too.

4. Monitor your account and credit

While everything is being sorted out with your bank, now is the time to monitor your account. This means signing into your online account or the bank’s mobile app every day and looking for charges you didn’t make. Really pay attention here, and document every charge that is suspect, even small ones — a charge of just a dollar or two could be whoever stole your debit card testing the access to your account.

5. Update auto-pays

Finally, if you have your debit card set to auto-pay any of your bills, you need to double-check that none of those bills will be charged while you’re waiting on your new card. If you have a bill due date coming up, be sure to pay it manually, and then you can set up the account with your new card when it arrives.

What if someone is using your card?

If your debit card was stolen, the speed at which you contact your bank has an impact on how much money you’ll be on the hook for. If you notify your bank before any fraudulent charges are made, your liability will be $0. If you notify them within two days of the loss, it’s $50. Definitely don’t dawdle, as after two days (but less than 60 days), you’ll be out $500. After 60 days? You could be out all the money in the accounts linked to that debit card.

For better fraud protection, consider using credit cards

While credit cards can be potentially dangerous in other ways (such as by enabling consumers to charge large balances they can’t repay before incurring interest), they offer better fraud and theft protections than debit cards do. If your credit card went missing, the most you’d be liable for is $50, no matter how long it’s been since the card was lost. And many card issuers offer $0 liability for theft. While it takes more discipline to use a credit card for your everyday expenses and then pay off the balance before interest accrues, having that extra layer of protection is worth it. Plus, many credit cards offer rewards or cash back on your spending, and they help you build your credit. All in all, credit cards offer some pretty sweet perks.

Losing a piece of your financial life is scary, but if you act fast, you can limit the damage that a lost or stolen debit card can do.

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If the answer is “no,” don’t chalk it up to a failing on your part. 

Home prices have been up on a national level for quite some time now. In fact, that scenario started back in the summer of 2020, when mortgage rates started falling to record lows at a time when new home listings slowed down.

Meanwhile, mortgage rates have been sky-high for much of 2022. In fact, anyone who signs a mortgage today is potentially looking at double the rate they would’ve managed to lock in a year ago.

In spite of that, home buyer demand hasn’t slipped too much. And sellers are still getting away with commanding higher prices for their homes.

In November, the median existing home sale price was $370,700, according to the National Association of Realtors. That represents a 3.5% increase from November 2021, when the median existing home sale price was $358,200.

All told, the housing market has experienced 129 consecutive months of year-over-year increases in median home sale prices. And 61% of homes sold in November were on the market for less than a month, which is a clear indication that buyer demand is still reasonably strong.

If you’ve been trying to buy a home for months on end, you may be wondering if now’s a good time. And the answer? It depends on your financial situation.

Can you afford a home in your target neighborhood?

The median home sale price in November may have been $370,700. But that’s not necessarily what you’ll pay for a home in the area you want to live in.

Maybe you’re hoping to buy in a large city where the median home will cost you $850,000. Or maybe you’re buying in an area where homes are cheaper, so you can find a property you’ll be comfortable in for $250,000.

Either way, a good way to know if you can afford to buy a home today is to crunch some numbers and see if you can manage to keep your monthly housing costs to 30% of your take-home pay or less. That’s really the limit you should stick to if you want to avoid a financial crunch.

When we talk about keeping your housing costs to 30% of your income or less, we don’t just mean that your mortgage payment itself shouldn’t exceed 30% of your paycheck. Rather, that 30% limit should include all of your housing costs, from property taxes to homeowners insurance to HOA fees, if you’re required to pay them (which will likely be the case if you’re looking to move to a townhouse or condo).

So, let’s say you bring home $6,000 every month. That gives you the leeway to take on up to $1,800 a month in housing costs. If you can buy a home based on that limit, then you should feel comfortable moving forward with an offer.

Of course, keep in mind that right now, you’re apt to get stuck with a higher home price and mortgage rate than you normally would. But if you can afford to buy and you don’t want to wait, then moving forward isn’t necessarily a poor choice.

Will home prices soon come down?

That’s really the big question. Buyer demand has been slowing, and if real estate inventory increases in 2023, we could see a nice dip in home prices.

But we can’t say with certainty if that will happen. And so if you’re in a position now to buy a home without busting your budget, then you may want to take that leap.

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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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You don’t want to lose money for no good reason. 

Investing money in a brokerage or IRA account is a great way to grow long-term wealth. But it’s important to choose the right home for your money, and also, the right investments. And one thing you’ll want to look out for in that regard is the amount of money you’re spending on fees.

Fees are quite common in the course of investing. Yet in a recent FINRA Foundation report, 21% of investors said they don’t think they pay any kind of fee in their accounts. Meanwhile, 17% said they have no idea how much they pay in fees.

Whether you’re investing in a taxable brokerage account for different goals or an IRA for retirement, it’s important to know what fees you’re looking at. And here are a few specific brokerage account fees to look out for.

1. Minimum balance fees

Just as some checking accounts charge a fee if your balance dips below a certain threshold, so too do some brokerage accounts charge a fee if you don’t maintain a minimum balance. It’s generally best to avoid brokerage accounts that require a minimum balance because that puts a lot of pressure on you that you don’t need. But if you’re willing to cope with that requirement, make sure to familiarize yourself with your brokerage’s rules to avoid this fee.

2. Inactivity fees

You may go through a period where you don’t feel like buying and selling stocks or other assets. Unfortunately, some brokerages will charge you for not making any moves in your account. And so generally speaking, it’s best to avoid putting money into a brokerage account that will penalize you for sitting back and doing nothing for too long a period of time.

3. Trading fees

There was a point when many brokerage accounts would charge you a fee every time you bought or sold a stock. For the most part, major brokerages don’t do this anymore. But if your account somehow still maintains this practice, consider it a wake-up call to put your money elsewhere.

4. Investment fees

In some cases, you’ll pay certain fees by virtue of using one brokerage account over another. But in other cases, the specific investments you choose might come loaded with fees. In the aforementioned report, 38% of people with money in mutual funds believed they don’t pay any fees for owning those funds.

But actually, mutual funds tend to come with large fees, known as expense ratios, that can eat into your returns. And so unless you’re really getting outstanding performance from your mutual funds, you may want to consider moving your money into index funds. Index funds are passively managed, unlike mutual funds, so their costs aren’t as high. But you may find that their performance is comparable.

The fees you pay as an investor can erode your returns and leave you with less long-term wealth. And that’s clearly not what you want. So if you’re going to invest your money, make sure you’re aware of the different fees you may be on the hook for. Moving to a different brokerage account and choosing different investments could result in a world of savings.

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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’re investing your money, you should read this Dave Ramsey advice. 

You should be investing your money in an effort to grow your wealth. Without investing in the stock market, there are few opportunities to earn generous returns that enable you to take advantage of compound growth.

Investing can be stressful, though — especially if you see some of your investments not performing as you had hoped they would. There are a few key things you need to do in order to maximize your chances of your brokerage account balance growing. And finance expert Dave Ramsey offered some advice on one of the most important of those tasks.

This is a must for investing success, according to Ramsey

So, what is the key component of investing success that Ramsey explained?

“To be a successful investor, it’s important to know how to deal with the emotional side of investing so you can avoid making mistakes,” Ramsey said, going on to explain that these mistakes could cost you “thousands of dollars” if you don’t have a hold of your emotions.

How could this happen?

One big issue is that you might give into your “knee-jerk reaction” to sell your assets when the market starts dropping if you aren’t good at managing your fear. This could end up causing you to lose money because of the difficulty of timing the market. If you sell at a loss when the market is on the decline, you would lock in those losses, when staying invested could have enabled you to earn back the money over time. And you might not be able to get your money back in until the market has gone much higher — which means you’d end up always selling low and buying high (the opposite of what you want to do).

Another problem is that not managing your emotions might lead you to stop investing during downturns. This could mean passing up the chance to buy assets at a bargain price. “When the market drops, your mutual fund shares are on sale — you’re getting them for a lower price because the market is down. It’s the time to buy — not sell,” Ramsey said.

Is Ramsey right?

Some of Ramsey’s investing advice isn’t great. For example, he recommends mutual funds when ETFs are typically a better option for most people who don’t want to invest in individual stocks.

But, when it comes to his advice about keeping the emotions out of investing, he is absolutely correct. It’s really hard to watch your portfolio balance go down without taking action. And it is even more difficult to keep putting money into investments that seem to be going down by the day. But if you don’t do these things because your emotions cause you to make an irrational decision, then you’re less likely to build wealth over time.

The good news is, you can follow Ramsey’s advice if you adopt a simple investing strategy. You should commit to buying assets you believe will stand the test of time and then just simply leave your portfolio alone. And if you use a technique like dollar-cost averaging and regularly buy assets on a set schedule, you don’t need to worry about deciding whether to buy assets in a down market since you’ll just stick to your schedule.

If you can master this advice and keep your emotions out of your investing choices, this will go a long way toward helping you build real wealth.

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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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