Money Management

One tax-advantaged account gives you more options for accessing your money in a pinch. 

You never know when life might throw an unpleasant financial surprise your way. You could get into your car to find that it doesn’t start, or wake up to a freezing cold shower thanks to your busted water heater.

Or, you could end up losing your job if your employer is forced to downsize. That could mean living on a measly unemployment benefit payment until you’re gainfully employed again.

That’s why it’s so important to have money set aside for financial emergencies. And the best place to keep that money is a savings account, where you’ll have easy access to your cash at all times.

Meanwhile, a retirement savings plan is generally not a good place for your emergency fund. That’s because there can be steep penalties for tapping a tax-advantaged account, like an IRA or 401(k), before reaching what’s considered retirement age.

But one specific tax-advantaged account can technically double as your emergency fund. Whether it should, however, is a different story.

You can tap your Roth IRA in a pinch

The reason the IRS penalizes you for taking an early withdrawal from a tax-advantaged retirement account is that you’re supposed to be saving that money for your senior years, and you’re getting a tax break to encourage you to do just that. So if you remove funds from one of these plans before age 59 ½, you’ll generally be penalized to the tune of 10% of the sum you remove. If you tap a traditional IRA because you’re in a jam and withdraw $10,000, you’ll lose $1,000 as a penalty.

But Roth IRAs work differently. With a traditional retirement plan, you get a tax break on the money you put in, but then pay taxes on withdrawals during retirement. With a Roth IRA, there’s no tax break on your contributions. Withdrawals, however, are tax free.

Because you don’t get an upfront tax break on the money that goes into a Roth IRA, you’re also not penalized for taking early withdrawals. That assumes, however, that you only touch your principal contributions, not your gains.

If you put $20,000 of your own money into a Roth IRA and it grows to $30,000, you won’t be penalized for withdrawing your initial $20,000. But penalties will apply to that $10,000 gains portion.

Why it pays to leave your Roth IRA alone

While you can take a Roth IRA withdrawal in the event of a financial emergency, doing so could put you in a position where you wind up cash-strapped later in life. Even if you’re not penalized for taking that withdrawal, you’ll be penalizing yourself by removing those funds so they’re not available to you at a time when money may be even tighter.

Remember, too, that when you take money out of a Roth IRA, you can’t invest it. And so you lose out on the chance to grow it into a larger sum in a tax-advantaged manner (since investment gains in a Roth IRA are tax free).

That’s why it’s not the best idea to rely on your Roth IRA as an emergency fund — even though it can technically serve as one if you need it to. Instead, do your best to pump money into a regular savings account and tap that account when unplanned bills creep up on you. Doing so could help ensure that you don’t run into financial difficulties during retirement, and that you’re able to make the most of your Roth IRA by investing your money and letting it grow.

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You may want to leave these items off your shopping list. 

Trader Joe’s has many beloved products that are well worth putting on your credit card. In fact, Trader Joe’s fan favorites like the store’s Unexpected Cheddar cheese and Everything But the Bagel Seasoning Blend have won over customers across the country and can be found in cupboards nationwide.

But while Trader Joe’s is known for its tasty delights and affordable prices, not every product in the store lives up to the hype. In fact, many Redditor’s agree that there are some TJ’s products that are downright disasters.

So, what are the worst Trader Joe’s products that you may want to skip? Check out this list of four duds to find out what products to steer clear of.

1. Trader Joe’s Beef Pho Soup

Trader Joe’s frozen Beef Pho Soup had a lot of complaints with no defenders. Reddit users described this meal as “one of the most disgusting things I ever ate,” and as “literally the worst pho I’ve ever eaten.” One user even tried to enhance the flavoring with additional seasonings to no avail.

Unfortunately, since the item tastes like “unsalted gross beef juice,” it’s unlikely to deserve a place in your freezer or on your table.

2. Ranch dressing

A good ranch dressing is a versatile delight that can be used to create a delicious healthy salad or enhance some homemade chicken wings. Unfortunately, you aren’t going to find one at Trader Joe’s — at least according to Reddit users.

One poster said “the entire family refused to eat it, two kids and the husband, saying it was the worst ranch they ever had,” and others chimed in to express their surprise that it wasn’t at the top of the list of the most disliked Trader Joe’s items.

The overly sweet flavor is one of the biggest complaints, and the taste was described as so bad the entire bottle had to be tossed in the trash after one try.

3. Queso Cheese Dip

Trader Joe’s had another flop in an additional popular dip — the store’s Queso Cheese. The addition of apple cider vinegar as a product ingredient perhaps helps explain why multiple users indicated they had to throw out the cheese immediately.

The good news, however, is that you may not have to look to a different store to get your queso fix. That’s because, as other Reddit posters said, the “vegan queso is bomb.” So as long as you don’t need dairy in your cheese dip, you may be better off giving that product a try.

4. Mayonnaise

In keeping with a trend, there’s evidence suggesting Trader Joe’s just isn’t great at sauces and condiments. That’s because the store’s mayo drew tons of complaints from Reddit posters, several of whom also indicated that their jar ended up in the trash.

One user described the taste as “completely rancid” and another said the taste was “so weird.” Unlike some of the other products on this list, though, there were a few fans disagreeing with the long list of mayo-haters. In fact, one poster said the “mayo with the yellow label” is their “favorite mayo by far.”

The good news is, while these four items may not be popular, there are many other Trader Joe’s products worth trying. Consider adding some of these Trader Joe’s holiday favorites to your shopping list instead if you really want to see where the store shines.

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Read this important advice before looking for a mortgage lender. 

Finding a mortgage lender can be a really confusing process. There are lots of different kinds of home loans out there, and many different types of lenders including banks, credit unions, and online lenders. There are also myriad criteria to compare, ranging from origination fees to interest rates, all of which can help you decide which loan provider is right for you.

Although there’s a lot to keep in mind, there’s one red flag that finance expert Dave Ramsey says should be an absolute deal breaker if you’re considering a loan provider.

Ramsey warns that a lender isn’t worth borrowing from if they fail in this task

So, what’s the big red flag that Ramsey warns about that the finance guru thinks should prompt you to walk away from a home loan provider? It’s simple. You should steer clear if the lender isn’t willing to “clearly explain your mortgage options and answer all your questions so you feel confident in your decision.”

The Ramsey Solutions blog explains that good lenders will recognize that you’re making a big decision and taking on a major financial obligation when you’re borrowing to buy a home. Those who are offering a fair deal for consumers will be forthcoming about the loan terms and financial products available and will give you the information necessary to help you decide if a loan is right for you.

“If they don’t, find a new lender,” Ramsey urges. “A mortgage is a huge financial commitment, and you should never sign up for something you don’t understand!”

Is Dave Ramsey right?

Dave Ramsey has given some questionable mortgage advice, including suggesting a 15-year mortgage is a better option than a 30-year while discounting the opportunity cost that comes with taking a home loan with a shorter payoff time.

But, when it comes to this issue, he is 100% correct. Lenders should be on the same page as you, and it’s in both your best interest and the lender’s best interest for the loan provider to ensure you’re not taking on debt you can’t pay back.

If your lender won’t help you to understand the details of a mortgage and won’t work with you to find the best loan for your situation, this is a huge sign that they are trying to profit off of shady deals such as high fees or an interest rate that will jump up dramatically after a period of time.

Mortgage lenders are required by law to provide you with certain consumer disclosures and, following the financial crisis of 2008, reputable lenders understand that no one benefits when people get home loans they can’t afford after a few year’s time.

If a mortgage lender is trying to hide the details or isn’t patient enough to answer your questions and explain the loan products offered, you should walk away and find a bank or credit union that cares about you as a customer rather than just as a person they can take advantage of.

Your home will likely account for a huge part of your net worth and your mortgage will probably be the biggest debt you have. You don’t want to trust important financial decisions about your house or loan to a lender you don’t feel confident in. So, heed Ramsey’s advice and walk away if you think your questions are going unanswered.

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If you’re like most investors, this may be a struggle. 

Investing money in a brokerage account and buying stocks allows you to grow your wealth when you earn returns. You can actually benefit from compound growth as the money you make on your investments can be reinvested and help you make even more.

Investing the right way can be hard, though, in large part because to do it right requires discipline. If you’re not sure whether you’re up to the task, finance expert and YouTube personality Graham Stephan recently took to Twitter to explain one of the most challenging parts of successful investing. And Stephan is 100% spot on in describing the difficulty so many people face.

But the good news is, there are definitely ways to overcome it so you can benefit from the awesome wealth-building power the stock market offers.

This part of investing can be a real challenge

When it comes to making money in the stock market, there’s one must-do task that seems simple but that can be harder than almost any other aspect of investing. And Graham Stephan explained it perfectly in a simple tweet.

“The hardest part about investing is holding on during the tough times,” Stephan wrote. He also included a chart with his tweet, which showed how often the stock market was in positive territory over set periods of time between 1926 and 2021.

According to Stephan’s chart, the stock market was positive 63.1% of the time in a one-month period. And the percent of the time it was positive just kept going up from there. In fact, when looking at a 20-year period of time, the stock market was actually positive 100% of the time.

Stephan included this chart to show that if you can invest for the long term, downturns inevitably turn into recoveries. As long as you’ve made reasonably sound investments (like buying index funds that track the performance of the market as a whole or buying shares of companies that can stand the test of time), you are going to do well in the market. But that’s only if you keep your money invested for the long term.

As Stephan points out, when the market is going down, it’s very easy to overreact and pull your money out or change your entire investment strategy out of fear that you’re going to lose money. In fact, many people do that because it doesn’t feel good to see your portfolio balance going down — even on paper or a computer screen.

If you can avoid doing that, though, and hold on during tough times, you should make money over a long investment horizon. You just need to overcome your fears and impulse to act and stay the course.

How can you follow Stephan’s advice?

Following Graham Stephan’s advice and holding on during the tough times is a path to success, but if it weren’t challenging everyone would do it.

Here are some tips that can help you stay the course:

Go into every investment planning to hold on: If you only buy assets you’d feel comfortable holding during tough times, you’re less likely to sell in a panic when things appear to be going badly.Develop an investment strategy you’re confident in: If you feel sure of your investments, you are much less likely to make fear-based decisions that cost you money.Step away: You don’t have to check your portfolio every day, or even every week or month. When the market is down, just steer clear of checking your portfolio balance at all so you won’t be tempted to act.Change your mindset: Instead of panicking during tough times, think of a market downturn as an opportunity to buy more stocks since you’re effectively getting them on sale.

By following these tips, this challenge that investors face that Stephan discusses won’t be a problem for you and you’ll be able to build wealth while limiting your risk of loss.

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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.Christy Bieber 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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It’s a move that doesn’t make as much sense right now. 

Recently, my town sent out property assessment cards that had a lot of people up in arms. Many of the homes in my neighborhood saw their assessed value increase by $100,000 or more over the course of the past year.

Why is that a problem? Well, if you’re looking to borrow against your home equity and want more of it to tap, it’s not. But if you’re hoping to keep your property tax bill to a minimum, a higher home assessment could get in the way of that. That’s because your property taxes are calculated by taking your home’s assessed value and multiplying it by your local tax rate.

So, let’s say your home is assessed at $500,000 one year, and then $600,000 the next year. If your tax rate doesn’t change from year to year and it’s 2%, that means your property tax bill could climb from $10,000 to $12,000. And if you think these numbers are extreme or unrealistic, be aware that in some parts of the country, these are the property taxes you’ll face for an average, modest home.

Such is the case where I live. New Jersey has the honor of having the highest property taxes in the nation. So a few years ago, I made the decision to appeal my property taxes — and won.

This time around, however, I won’t be fighting my property tax bill, even though my home assessment went up in a very big way. Here’s why.

It could be a losing battle

When we talk about fighting our property taxes, what we’re really doing is arguing down the assessed value of a given property. Property tax rates are set at the municipal level. If your town has a 2% tax rate, you can’t appeal that. But if your tax assessor says your home is worth $600,000 when you’re convinced it’s only worth $500,000, that is a point you can argue. And if you win, you could see a lower property tax bill as a result.

Years ago, my tax assessor raised the value of my home by about $50,000 at a time when property values in my area were largely holding steady. So I fought that assessment and got that number lowered, thereby saving myself some money on taxes.

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My most recent assessment tells me that my property is now being assigned a value that’s $100,000 higher than last year. But as much as I’d like to fight that assessment, I’m not going to.

The reason? I’m unlikely to win.

Home values are up on a national level. And in my neighborhood, homes have been selling for a good $100,000 more than they would’ve a couple of years ago. That’s in spite of mortgage rates rising so drastically this year.

As such, I can’t really argue in good faith that my home assessment isn’t accurate. And I don’t have sales data to back up a claim that my assessment is too high. So I don’t see the point in fighting a battle I’m unlikely to win.

Know when to back down

I’m not happy about the idea of potentially having to pay more property taxes next year — especially since my bill is super high already (thanks, New Jersey). But I also don’t see the point in wasting my time to fight an assessment that may not actually be wrong. And so I figure I might as well spare myself the aggravation.

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Don’t lose your Netflix profile once you lose access to a shared account. 

For a long time, people have been easily able to share Netflix passwords — even with people outside of their immediate families. This will soon come to an end, though, as Netflix cracks down on this money-loser and takes steps to ensure more people open accounts of their own or pay for password sharing beginning in 2023.

If you’re losing your access to free Netflix, you may need to get out the credit cards to pay the monthly subscription fee for an account of your own. If you decide the streaming service is worth keeping, the good news is that you can transfer over your profile so you don’t lose your list and viewing history.

Here’s how to make that happen.

This process lets you transfer your Netflix profile

Transferring your Netflix profile is very easy. You’ll have to start by signing into your account on your computer. Once you’ve logged in, navigate up to the top right where you’ll see a square blue smiley face icon that you can click on. This allows you to select which profile you’re on, and it also contains an option in the pulldown menu that says “Transfer Profile.”

When you click on “Transfer Profile,” you’ll be asked if you want to allow profile transfers and given a little description of what this process means. For example, Netflix explains that transferring profiles won’t delete the profile on your account or log out of other devices.

Netflix generally takes two days to enable the ability to transfer the profile. However, the main account holder will receive a confirmation email allowing you to enable the feature instantly if you click on a link in the email. If you don’t have access to the email address for the main account holder, you’ll either need to contact them to set up this feature or wait two days for your profile to be transferred.

Once profile transfers have been enabled, you can go back to the same “Transfer Profiles” option accessed from pulling down the blue smiley face. This time, though, you’ll be able to enter the email address and password to use for your new account. You’ll have to go through the steps of setting that up. Once you’ve completed them, your profile will be transferred to your own Netflix account and you’ll be able to keep your viewing history and all of your recommendations.

Should you open your own Netflix account?

While you can easily keep your Netflix history on a new account by transferring your profile, consider whether opening your own Netflix account makes sense.

Once Netflix releases the details of how it will charge for password sharing, you may find it makes sense to just offer to pay the primary account holder the $3 or $4 or whatever the monthly cost is of continuing to get access to the streaming service on their account. If this isn’t an option, think about whether you actually watch Netflix enough to cover the full monthly cost of a plan.

If you have lots of streaming services you’re subscribed to already, you may want to just defer for a while to wait and see how much you actually miss having access to Netflix once it’s gone.

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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.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix. The Motley Fool has a disclosure policy.

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