Money Management

Does net worth increase with age? Find out the average net worth of Americans at different life stages to see how your own wealth compares. [[{“value”:”

Calculating your net worth is important. This number is like a scorecard for your finances. A higher net worth means you have more assets like a home or money in your brokerage account. It also means you have fewer liabilities, like credit card debt.

Comparing your net worth to others can also help you see how your wealth-building journey is going. You shouldn’t compare yourself to the average person, though, as it’s expected that older people will have a significantly higher net worth than their younger counterparts. Instead, see how your net worth stacks up against others similar in age.

The average net worth for every age group

Net worth is calculated using a simple formula:

Add up the value of everything you own. This would be the market value of your home, your investment and savings accounts, your personal property, and things like your vehicle.Add up all of your debts. This includes your mortgage, car loan, personal loan, credit card balances, and anything else you owe.Subtract the value of your debts from the value of your assets. The amount that’s left over is your net worth.

The table below shows the median net worth for people within different age ranges, so you can see how your own net worth compares.

You shouldn’t panic if your net worth is pretty low as a young person since you’ll probably be on par with your peers. But, if your net worth is still low when you’re in your 60s and others your age have amassed close to half a million dollars, then you may have a problem.

Why does net worth matter?

So, why should you care about your net worth? It’s a measure of how far you are along on your money journey. If you have a high net worth, then you’re on the path to wealth or are wealthy already. If your net worth is very low, then you have a long way to go toward financial independence.

Eventually, everyone should aim to have such a large net worth that they can stop working and live off their assets. If you don’t achieve this, then you’re going to have a problem when you get too old to earn a paycheck. On the other hand, the earlier you get to this point, the better off you are since you’ll be in good financial shape, even if something happens like a job loss.

If you have a low net worth, it puts you in a precarious position — especially if you’re older and have less time to amass more wealth. Your debts can end up overwhelming you and, if you have few assets to show for them, you won’t have any financial security.

The good news is, if you aren’t happy with your net worth, you can take steps to change it by working on buying more assets (like stocks and real estate) that grow in value or hold their value, and by working on eliminating liabilities by paying down your debt.

It may take some time, but hopefully you can catch up to others in your age range or even accumulate a larger net worth than your peers over time.

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

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.

“}]] Read More 

Health savings accounts benefit from triple tax advantages. Find out how those tax benefits can help you cover healthcare costs. [[{“value”:”

Handling medical issues is difficult at the best of times. It’s even worse when you aren’t sure how you’ll pay for the care you need. Unfortunately, that’s the situation millions of Americans face. According to a report by KFF, 47% of U.S. adults are finding it difficult to afford healthcare. And a quarter of people said they’ve put off getting treatment because of the costs involved.

The financial challenges are worse for those without health insurance. But even people with insurance are having difficulties. The report shows that 48% of insured adults worry about how they’ll pay their premiums. Many with workplace insurance complain about the costs of seeing a doctor or covering prescription copays.

If you’re having trouble paying for health essentials, there are no easy answers. But a health savings account (HSA) could be part of the solution. Here’s how.

What is an HSA and how can it help me?

A health savings account is a tax-advantaged way to put money aside for healthcare costs. You need to have a high-deductible health plan (HDHP) to qualify.

You make pre-tax contributions to your HSA. This means that the money you put in could lower your tax bill today.You can defer taxes on any investment gains within your HSA. If you use the money for health expenses, you won’t need to pay taxes on that money at all.You can make tax-free withdrawals for qualified medical expenses. Once you’re over 65, you can take money out for non-medical costs too. Just know that you’ll have to pay taxes on those non-health-related withdrawals.

HSAs are not flashy side hustles on social media that promise thousands of dollars for not very much work. But they can save you a lot of money. And they aren’t that much work. They’re just not super TikTok-friendly.

Show me the money

The maximum you can contribute to an HSA for 2024 is $4,150 on a personal plan and up to $8,300 for family coverage. So if you are in the 22% tax bracket and you put $4,000 into your HSA, you’d reduce your tax bill by $880.

In addition to tax benefits today, those investments will compound over time. If you are worried about healthcare costs later in life, you can let the money accumulate. HSAs don’t have any use-it-or-lose-it rules, so you can build up a significant nest egg.

Let’s say you contributed $330 a month to your HSA and invested it in an index fund that tracks the S&P 500. History tells us it isn’t unrealistic to think you might earn average annual returns of around 8%. That could add up to over $180,000 in 20 years’ time if you don’t touch the money.

It is extremely rare to find an account with triple tax benefits. You might use a tax-advantaged retirement account to either lower your tax bill today or make tax-free withdrawals once you stop working. But HSAs give you all the benefits at once.

How to open an HSA

You’ll need an HDHP to open an HSA, which can also be a great way to lower premiums. But there is a catch: Your out-of-pocket expenses will be much higher with an HDHP. That’s one thing if you rarely go to the doctor and quite another if you’re managing a serious health condition. HDHPs won’t be for everybody.

Think about how much you normally spend on health costs and how those costs would change with different health plans. If you decide to go ahead, here’s what you need to do.

1. Make sure you qualify for an HSA

In addition to having an HDHP, you won’t qualify for an HSA if you’re listed as a dependent on someone else’s tax return. Nor can you be enrolled in Medicare. Many people will be able to get an HDHP through their employer. Indeed, some employers will also contribute to your HSA, which could go some way toward paying for healthcare.

If your employer can’t help, you can open an HDHP on your own. Just as with auto insurance or home insurance, shop around for the best deal. Check out your state marketplace as well as individual providers. A broker or healthcare navigator can help you with this process.

2. Open an HSA

You may be able to open an HSA through your employer. If not, check out banks, brokerages, and other providers. Pay attention to factors like fees, range of investment options, and minimum balance requirements. It’s also worth looking into how you’ll be able to access your funds.

If it’s a company plan, your employer will deduct your contributions directly from your paycheck. If not, you’ll need to fund your HSA before you can choose your investments. Depending on the account, you will likely be able to invest in stocks, bonds, mutual funds, and ETFs. You may also be able to use a robo-advisor to manage your funds.

Key takeaway

For some people, the tax advantages of HSAs can more than make up for the extra costs of a high-deductible health plan. They can be an extremely powerful way to build up your own healthcare fund and ease some of the stress of covering medical costs.

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

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.

“}]] Read More 

Want to earn more United miles? Earning more miles could get you closer to your flight redemption goals. Find out how to earn more United MileagePlus miles. [[{“value”:”

If you like to travel and are a fan of flying with United Airlines, you may be looking for ways to maximize the airline miles you earn. Travelers like you can earn miles in various ways through the airline’s free loyalty program: United MileagePlus.

Once you have enough miles earned, one option is to redeem your rewards for flight bookings, which could help you travel more without draining your checking account balance. Let’s explore several ways to earn United miles to maximize the miles you earn.

1. Flying on United-operated flights

Whether you’re an occasional or frequent flyer, you can earn United miles when flying routes operated by United and United Express. United MileagePlus members earn 5 miles per $1 spent on base fare.

If you have status, you can earn bonus miles, depending on your membership tier. Members can earn a maximum of 75,000 miles per ticket — excluding purchases or bonuses from promotions.

Here’s a breakdown of how many United miles you can earn by membership tier:

2. Using United credit cards

Another way to earn miles is to use United credit cards to pay for flights, other travel purchases, and everyday expenses. The number of miles you can earn varies depending on the credit card you have and the types of purchases you make.

This strategy could help you maximize your miles if you’re a United loyalist. Many United credit cards include useful benefits that can improve your experience when flying with United. Examples include cash back discounts on in-flight purchases made with your card and free checked-bag perks.

Check out our list of the best United credit cards to learn more about the top features of each card on our list. Not loyal to one airline? You may benefit from a general travel rewards card instead. Here’s a look at a few of the best travel credit cards that earn rewards.

3. Booking travel with partners

You can also earn miles when you book travel arrangements with one of United’s many travel partners. The airline partners with various airlines, hotels, vacation rental companies, car rental companies, and more.

How many miles you earn varies depending on the partner and whether you have a United credit card or have achieved elite status through the United MileagePlus program.

Here’s a sampling of some of the travel partners you can earn United miles with:

Air CanadaAsiana AirlinesAvisBudgetMarriott Hotels and ResortsRenaissance HotelsSingapore AirlinesTAP Air PortugalVrbo

4. Shop through the United MileagePlus Shopping portal

If you shop online, take advantage of the chance to earn United miles when you order from your favorite retailers. United partners with over 1,100 retailers through the United MileagePlus Shopping portal. You can earn miles by activating offers and making eligible purchases.

You can shop through the shopping portal website or download the United MileagePlus Shopping browser extension and shop directly on your favorite retailer’s websites. Participating retailers will display how many miles you can earn for eligible purchases.

Some participating brands include Adidas, Best Buy, H&M, iHerb, LOFT, Staples, The North Face, and Ulta. Here’s how to earn United miles when you shop online:

Sign in to your United MileagePlus account at shopping.mileageplus.com.Click “Shop Now” to activate offers that interest you.Shop like usual and pay with a credit card.After making a purchase, miles will be added to your MileagePlus account.

Strategize to earn more miles

If you hope to book an award flight using United miles in the near future, it’s wise to strategize so you maximize the miles you earn. Don’t miss out on miles-earning opportunities like the ones mentioned above. Redeeming airline rewards can save you money on travel costs.

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

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 positions in and recommends Best Buy. The Motley Fool recommends Marriott International. The Motley Fool has a disclosure policy.

“}]] Read More 

Mortgage rates may be dropping, but it’s up to you to know refinancing makes the most sense. Here’s how to figure it out. [[{“value”:”

The moment the Federal Reserve announced an upcoming drop in interest rates, millions of Americans likely wondered whether the drop would be enough to justify refinancing their mortgage. As mortgage rates drop, now is an excellent time to decide when refinancing your mortgage makes the most sense. That way, you’ll be ready when and if the rate you’re waiting for arrives.

The following are good indicators that it’s time to consider a mortgage refinance.

The new rate is 1% lower than your current rate

The general rule of thumb is to consider refinancing your mortgage if you can score a rate at least 1% lower than your current rate. While this is good general advice, it may — or may not — apply to your situation. For example, if you’re having trouble making your monthly mortgage payment and a 1% lower rate won’t make much difference, it may not be worth the costs associated with refinancing.

The average cost of refinancing runs between 2% and 5% of your loan amount. For example, if you’re refinancing a $200,000 mortgage, you can expect to pay between $4,000 and $10,000 to refinance. Like any other loan, it pays to shop around for the lowest rate and closing costs.

You can pay the closing costs upfront or roll them into the loan. Rolling it into the mortgage may make sense in the short term, especially if you’re short on cash. However, you have to decide if you want to spend 15 to 30 years paying off closing costs with interest.

Still, there are those for whom refinancing is the wisest option. For example:

Cameron borrowed $300,000 when they purchased their home but currently owes $225,000.Cameron’s current interest rate is 6.5%, and their monthly principal and interest payment is $1,896.After a few rate drops, Cameron finds a bank offering an APR of 5.25%.Cameron pays closing costs upfront rather than rolling them into the loan.Cameron’s monthly principal and interest payment on a new 30-year mortgage drops to $1,242, a savings of $654.

You’ve decided to pay your mortgage off at a faster clip

Imagine that Cameron decides they want to pay their mortgage off faster, so they refinance to a 15-year fixed-rate mortgage instead of a 30-year. Their monthly mortgage payment is $1,809, nearly the same as before they refinanced. However, they’re on course to pay the loan off much more quickly and save thousands of dollars in interest payments.

You want to make a switch from an ARM to a fixed-rate mortgage

As the name suggests, an adjustable-rate mortgage (ARM) has an interest rate that adjusts over time. Also called variable-rate mortgages, ARMs typically start with a lower rate than fixed-rate mortgages, which makes them attractive to those who want to keep their monthly payments low. However, as the market changes, so does their interest rate, and budgeting may become more complex.

Drops in mortgage rates present an excellent opportunity for those with an ARM to switch to a fixed rate they can depend on throughout the life of the mortgage.

You have a balloon payment coming up

There are all kinds of mortgages, including owner financing. When someone sells a home with owner financing, the seller offers to be the lender — at least for a time. All monthly payments are made to the seller, just as they would be to a traditional mortgage company. One thing that many owner-finance contracts include that conventional mortgage lenders do not is a balloon payment.

For example, the buyer may make monthly payments to the seller for five years. At the end of five years, the buyer is expected to refinance the mortgage with a traditional lender and pay the seller the balance due on the property.

Having a balloon payment over your head can be pretty unsettling, making refinancing especially attractive as rates drop.

You’re looking to eliminate mortgage insurance on an FHA loan

No matter how much you put down on a home, if you take out an FHA mortgage, you must pay mortgage insurance for the entire life of the loan. As long as you have at least 20% equity, refinancing the property with a fixed-rate conventional mortgage is an easy way of ridding yourself of mortgage insurance premiums.

Everyone’s “sweet spot” is a little different. While one borrower may wait for rates to drop below 6%, another doesn’t benefit until they’re under 5%. The goal is to determine when refinancing benefits you most and then jump on the opportunity when it arises. In the meantime, you may consider saving enough to pay closing costs upfront to keep your monthly payments as low as possible.

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

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.

“}]] Read More 

Despite recent cuts to the federal funds rate, you should still keep your savings in the bank. Find out how much savings accounts APYs may change. [[{“value”:”

The Federal Open Market Committee (FOMC) meets throughout the year to make decisions regarding the U.S. economy. One decision discussed in these meetings is whether the Federal Reserve’s benchmark interest rate should remain the same or be adjusted.

The federal funds rate is the rate at which banks and credit unions borrow and lend money to each other. When the rate is adjusted, banks and credit unions tend to adjust the rates for consumer banking products, such as high-yield savings accounts.

On Sept. 18, 2024, after the most recent meeting, the committee announced it would cut the target federal funds rate by 50 basis points from 5.25%-5.50% to 4.75%-5.00%. Is now the time to move your money out of your savings account? Let’s discuss.

It’s wise to keep your cash in the bank

Don’t drain your savings account. Just because APYs will likely be reduced because of recent rate cuts doesn’t mean you should empty your savings account. Keeping extra savings in a bank account that earns interest is a good idea.

Even if your savings account APY lowers, you’ll continue to earn interest. But you won’t get rewarded if you put your cash under your mattress or transfer it to your checking account.

However, the savings account you have matters. Choosing a high-yield savings account over a traditional savings account is a good move. High-yield savings accounts typically offer more generous APYs than standard savings accounts — so you can earn more as you save.

How much will savings account rates change?

Now that the target range for the federal funds rate has been reduced, you’re probably wondering if your savings account rate will change and how much APYs will be reduced. For starters, yes — you can expect to see rate adjustments.

Banks will likely act promptly by reducing APYs, but we’ll have to wait and see how much they change. Many of the best high-yield savings accounts offer APYs that are at or slightly below the federal funds rate.

You can expect to see a reduction in APYs. Since the target federal interest rate is now 4.75% to 5%, savings account APYs will likely shift below 5%. In alignment with the federal rate cut, the best high-yield savings accounts could offer reduced APYs of around 4.5%.

How much less will you earn from interest?

With a lower APY, you’ll earn less interest. Let’s take a look at how much the best savings accounts might earn in one year with an APY of 4.5% instead of 5.0%:

As you can see, the difference in how much you earn from interest isn’t earth-shattering. Keeping your extra cash in an interest-earning bank account is worthwhile even when rates are cut.

Lock in higher rates with a CD

Keeping the money that you need for emergencies in a high-yield savings account is wise. Why? You’ll earn interest and can easily access your money at any time without penalty.

But if you don’t plan to spend your savings within the next few months or years, consider opening a certificate of deposit (CD). You may benefit from a higher APY than what your high-yield savings account offers.

But here’s the best part: You don’t have to worry about rate changes. CDs allow you to lock in an interest rate for a set period. But many CDs have penalties if you take your cash out before the CD matures, so this is best for savings you don’t need to access anytime soon.

Do you have savings you don’t need immediate access to and want to maximize the interest you earn? Review the best CD rates to learn more. But don’t delay, because CD APYs could change soon. Locking in a good rate before that happens is ideal.

Don’t let rate cuts stop you from saving

If you’re prioritizing savings goals, keep stashing away money. But ensure you’re taking advantage of the chance to earn interest by keeping your money in a bank account that earns interest. Every dollar you earn from interest can help you get closer to reaching your goals.

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

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.

“}]] Read More 

No one likes to overpay for auto insurance — but it’s one of those must-haves if you’re a driver. Read on for a few great tips to save money. [[{“value”:”

The cost of car insurance is up by more than 20% on average between last year and this year. If you’ve noticed your car insurance bills ticking up over time, you’re not alone. Luckily, there are several ways to find cheaper car insurance, and many of them involve nothing more than spending a little time on the phone or the internet.

Keep reading for the best ways to save when you insure your vehicle.

1. Shop around for coverage

Different auto insurance companies have different rates and weigh risk differently, so it’s a great idea to shop around for your coverage. It’s not the most exciting way to spend an afternoon, but if you plug your personal information into the websites for a few insurers, you may find cheaper coverage than you have now.

You could also work with an insurance broker who can put together different quotes for you. This is what I did when I was looking for home and auto coverage after buying a house earlier this year (more about bundling coverage below).

2. Ask about discounts

Just about every auto insurer offers a slate of discounts based on various factors. Drivers could save money for belonging to certain professional organizations, not driving a lot of miles, taking a defensive driving course, or being a good student (if they’re still in school). The only way to know what you qualify for is to ask, so if you haven’t explored your insurer’s discount menu yet, make it a priority.

3. Improve your credit

Insurers have found a correlation between credit scores and the likelihood of drivers filing claims, so in most states, they are allowed to check drivers’ credit scores and use it to set premium prices. Boosting your credit score may save you money — research from The Motley Fool Ascent found that drivers with good credit paid an average of less than half of what drivers with bad credit paid in 2023.

4. Raise your deductible

Your deductible is the amount of money you must pay when you file a claim, before your insurer picks up the rest of the tab. If you’re willing to put more money aside for your deductible, you can lower the cost of your premiums.

Just be sure you have the money ready at all times — a good way to approach this is to put the cash you’re saving on premiums into a high-yield savings account, so you’ll be set if you need to file a claim.

5. Pay upfront

If you can afford to pay for six months or a year of coverage all at once, it could save you money. Forbes Advisor notes that the best insurance companies offer discounts of 6% to 14% for paying in full. You might consider putting aside money throughout the year to make a big premium payment in one go.

6. Bundle coverage

Got multiple parts of your life you need coverage for — like a car, a home (either one you own or a rental), and another vehicle (like a boat or motorcycle)? Drivers in need of more than one policy could save money by getting them all from the same company.

Bundling coverage could result in savings of 5% or more. Plus, it could simplify your life to deal with just one insurance company.

7. Take advantage of telematics

Finally, you might consider looking into telematics car insurance. Drivers who sign up have their behavior behind the wheel monitored via a mobile app or an in-car device, and may be able to enjoy lower rates depending on whether they demonstrate safe driving skills.

Approach with caution, however — if your driving habits are less than ideal, you may end up paying more for coverage. Personally, I have confidence in my driving skills, but I’m uncomfortable with being monitored by an auto insurer, so I won’t be using this means of saving money.

Take some time to explore a few of these ways to save money on your vital car insurance coverage. The money you save could go toward your emergency fund, paying off debt, or even something more fun — like the new car you’re saving up to buy.

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

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.

“}]] Read More