Money Management

Business-class airfare can add quite a bit to your travel costs. Check out when it’s worth spending extra (or tapping into your miles) to fly this way. [[{“value”:”

Business class is a huge upgrade over economy. As someone who has flown both, I’d take a business-class seat any day of the week.

There’s also usually a huge price difference. Business class often costs thousands of dollars more than economy. In many cases, it makes more financial sense to book an economy seat and save your money.

But there are some situations when flying business class is well worth it. Here are the top three times when you should consider it, plus tips for booking it for a more affordable price.

1. You’re taking a red-eye

When you’re taking an overnight flight, being able to sleep is important. It could be the difference between hitting the ground running and spending the first day of your trip feeling like a zombie.

I know there are some lucky people who can easily fall asleep on any flight. If that’s you, then flying economy might not be an issue.

For the rest of us, a business-class seat is a lifesaver on red-eye flights. It’s more spacious and more comfortable. Many airlines also offer lie-flat seats in business class. Those are the only way I’ve been able to get quality sleep while flying.

2. It’s a long flight

As a general rule, the longer the flight, the more perks business class offers — and the more you’ll be able to take advantage of them. On a two- or three-hour flight, business class may just mean a slightly bigger seat and a decent meal. It’s still nice, but maybe not something you want to pay extra for.

On longer flights, airlines offer much more. You may get one of those lie-flat seats, instead of just a bigger regular seat. The meals get more elaborate, and there could be multiple meal services.

Everyone has their own definition of what a long flight is. Some say business class is worth it for flights over four hours. Others say six or eight hours. I’d suggest coming up with your own rule based on how long you’re comfortable spending in economy.

3. You have a lot of unused airline miles

It’s easier than ever to accumulate airline miles. Many travel credit cards earn miles with airlines or points that you can transfer to multiple airlines.

Most people earn miles, redeem them for a flight, and then repeat the process once they’ve earned enough miles again. But there are also those who end up with lots of unused miles or credit card points. You could find yourself in this situation if you spend quite a bit on your travel cards, or if you’ve been reluctant to use your miles.

Airline miles and credit card rewards only have value when you use them. They don’t do you any good when they’re just sitting around. So if you have more miles than you know what to do with, why not put them toward an amazing trip in a business-class seat?

How to fly business class for less

I realize that business-class airfare isn’t in many people’s travel budgets. So even if there’s a situation where business class is worth it, that doesn’t matter if it’s out of your price range.

Luckily, it’s entirely possible to fly business class for much less — closer to economy prices, and sometimes even nearly for free. One of the best ways is by using credit cards that earn travel points or miles. A business-class ticket that costs $3,000 may be available for 60,000 miles instead, plus taxes and fees.

You can also find lower business-class prices by shopping around early and setting up deal alerts with your preferred travel booking tool. It never hurts to be flexible about when you fly, either. Many airlines have low-fare calendar tools, and just adjusting your travel dates by a day or two could save you money (or miles).

When you know a few simple travel hacks, you don’t need to be rich to occasionally fly business class. And while that’s not always a big deal, there are situations where it’s the best option by far.

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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.Lyle Daly has no position in any of the stocks mentioned. The Motley Fool recommends Flow. The Motley Fool has a disclosure policy.

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Are you on the verge of becoming a 401(k) millionaire? See how $1 million of retirement savings could change a few big things about your approach to money. [[{“value”:”

Saving $1 million for retirement is a dream that many Americans have — and some people might discover that this dream is suddenly within reach. Fidelity recently announced that 485,000 of its customers have $1 million (or more) in their 401(k) accounts — which is an all-time high. Strong stock market performance in the past few years has caused some people’s 401(k)s to grow faster than anyone expected.

If your 401(k) hits $1 million, this is a reason to celebrate. But it’s also an occasion to think about making a few savvy moves to manage your retirement investments.

Here are a few next steps to consider taking after your 401(k) hits $1 million.

1. Rebalance your portfolio

If your 401(k) has skyrocketed in the past few years because of strong stock market performance, you might want to change the asset allocation in your account. For example, if you want to have a mix of 60% stocks and 40% bonds in your portfolio, but your stock investments have gone up in price so much that they now make up 70% of your portfolio, you might want to rebalance by selling some stocks and buying more bonds.

Many 401(k) target date funds and robo-advisors offer automatic rebalancing, to keep your portfolio from getting too top-heavy (or underweight) on the various types of assets. But if you’re concerned that your $1 million 401(k) has gotten out of alignment with your overall investment goals, feel free to use this moment to rebalance.

2. Re-evaluate your risk tolerance

Hitting $1 million in your 401(k) likely feels psychologically significant. It’s a big number, and you now have more to lose than you did when you were first getting started as an investor. If you’re getting closer to retirement age, or if you’re worried that stocks could go down soon after the S&P 500 reached all-time highs, you might discover that your risk tolerance has shifted.

As a 401(k) millionaire, you might want to lock in some gains and stop investing so heavily in stocks. Now that you have $1 million, you might want to shift to conserving the wealth that you’ve built, instead of seeking the highest possible growth (while accepting greater risk of investment loss).

Or you might want to stay the course, and keep investing in the same way that you were already. Not everyone’s risk tolerance will change after reaching $1 million in their 401(k). You might still have 10 or more years left until retirement, and feel like a million dollars is not enough for your retirement income goals.

There’s no single “right answer” for risk tolerance, and it’s something that every investor has to decide for themselves. But hitting that $1 million 401(k) milestone is a good occasion to catch your breath and ask yourself how much risk you’re really comfortable with — and what ultimate goal you’re trying to reach.

3. Check your investing time horizon

Are you still on track to retire on time? What if hitting $1 million in your 401(k) could help you retire sooner? Now that you have $1 million of retirement savings, you might find that your investing time horizon has shifted forward.

What if you could reduce your 401(k) contributions and put that cash toward other purposes, or what if you could invest less aggressively (with more bonds and fewer stocks) to accept possibly lower average annual returns on investment, in exchange for lower risk in your portfolio?

Having $1 million in your 401(k) gives you an opportunity to slow down, tap the brakes, and change the way you think about investing and how you want to spend the next few years of your life. Want to keep working hard, saving big, and investing aggressively by buying stocks? Or do you want to try a different approach — quit your job, downshift in your career, semi-retire, or start a business?

4. Consult with a financial advisor

Working with a professional fiduciary financial advisor can help you address all of these topics, and more. Some people might find that hitting $1 million in their 401(k) — while a joyful occasion — is also stressful.

More money can bring more complexity and can present tough choices; people might be afraid to make the wrong moves or lose their hard-earned 401(k) wealth that has accrued over many years. A financial advisor can help you understand your options and address your emotions and concerns.

Bottom line

Having $1 million is a great “problem” to have, but hitting seven figures of retirement savings can bring new questions, stresses, and complications. The stakes of managing your 401(k) might feel higher than ever, and some people might worry about making the wrong investment moves.

Consider re-evaluating your asset allocation, risk tolerance, and time horizon to conserve your wealth, get more cash in your savings account, and do more of what you want with the rest of your working years. And talk to a fiduciary financial advisor to understand your options and get unbiased professional help — sometimes, staying the course and leaving your investments alone is the best choice.

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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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Of all the benefits I get for reaching a high elite status level, there’s one I don’t want to do without. Here’s why a certain type of first-class upgrade is my favorite perk. [[{“value”:”

Executive Platinum status is the highest publicly available tier in the AAdvantage loyalty program. In ascending order, the tiers of AAdvantage elite status are:

GoldPlatinumPlatinum ProExecutive PlatinumConcierge Key (available by invitation only)

To earn Executive Platinum status, you’ll need to get 200,000 Loyalty Points in a status year (March through February), but this doesn’t necessarily mean you have to fly a lot.

You can earn Loyalty Points by flying, but you can also get them from using a cobranded American Airlines credit card, shopping through the AAdvantage e-shopping portal, and through several other methods. To be clear, my Executive Platinum status came from a combination of the first three, with a lot from strategic credit card usage.

Key differences from lower status tiers

In some ways, Executive Platinum status gets you the same perks as lower tiers, but of a higher-priority or enhanced nature. For example, members of the lowest (Gold) elite tier get one free checked bag on American Airlines flights. Executive Platinum members get three.

Similarly, all AAdvantage elite members are eligible for complimentary upgrades for themselves and one companion. Executive Platinum members are simply higher on the priority list and get upgrades more frequently.

Other key benefits of Executive Platinum status include (but are not limited to):

Select the best available main cabin seats for free, even those that typically come with an upcharge.Eligibility for upgrades on award travel (tickets booked with miles instead of money).Free alcoholic drinks and snacks in economy seats.Priority check-in and security, where available.Guaranteed seats on any flight when you book at least 24 hours in advance — even if the flight is sold out.A dedicated phone support line, exclusively for Executive Platinum members.Loyalty points rewards, which can include systemwide upgrades, bonus miles, or a selection of other benefits (technically, you get this at a 175,000 loyalty point threshold)

Some perks of Executive Platinum status I’ve never used and don’t think I will anytime soon. For example, I’ve never checked more than one bag when flying, and can’t really see any situation where I would need three.

Other Executive Platinum benefits have significant value to me. For example, even if I don’t get upgraded on a flight, Group 1 boarding is a nice perk — especially since I carry my bags whenever possible and want to use the overhead space right by my seat.

I also find that I get upgraded far more frequently with Executive Platinum status than I did at lower tiers (I spent several years at the Gold and Platinum levels).

My most valuable perk of Executive Platinum — and it isn’t even close

However, there’s one benefit that has proven far more valuable to me than others in the two years I’ve been an Executive Platinum member — the ability to get first-class upgrades on award tickets.

This is a benefit that is not available at any lower status level. Here’s why it’s so important to me. Since my go-to travel credit card is an American Airlines card and I use it for most of my day-to-day and travel expenses, I tend to accumulate quite a few miles. For obvious reasons, I prefer to book most of my flights with miles instead of paying for them.

When I had Gold or Platinum status, booking a flight with miles guaranteed that I wasn’t getting an upgrade. As an Executive Platinum, I (and my travel companion) have just as much chance of an upgrade as if I had paid for the ticket. Last year, I flew on award tickets on about half of the trips I took, and I got upgraded to business/first class on about three-fourths of those.

Now, it’s important to point out that the ability to upgrade award tickets is my top benefit of Executive Platinum status because of my travel preferences. Yours might be different. But the highest readily available status tier offers quite a bit for flyers and the perks might surprise you.

If you are loyal to American Airlines, check out the American Airlines lineup of credit cards to see if one of them could help you gain status (and valuable perks!) with the airline.

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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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The net worth of middle-income households may be higher than you think. Read on to find out how to improve your financial situation. [[{“value”:”

The latest Pew Research Center data shows that middle-income households experienced a rapid increase in their net worth during the pandemic, rising 29% from 2019 to 2021.

The result is that the median net worth of middle-income households is now $204,100.

For reference, Pew’s definition of a middle-income household is one in which the income is two-thirds to double the national median income. Here’s the median net worth of households across a handful of income categories, as well as information about how to boost yours.

The median net worth of American households

In addition to the increase in net worth for middle-income households, Pew says wealth for lower-income households rose 105% during the pandemic and 15% for upper-income households.

Here’s how the median net worth amounts look across households:

Lower income: $24,500Middle income: $204,100Upper income: $803,400

Generally speaking, your net worth is calculated by taking your financial liabilities and subtracting them from your assets. What you have left over is your net worth.

But don’t get discouraged if your net worth doesn’t match the data above. There are some things you can do to improve your financial situation no matter how much money you have.

How to build your wealth

I personally don’t think about my net worth, nor do I care about the net worth of people I meet. But we could all likely make a little more progress towards improving our financial situation. Here are a few general steps to get closer to your financial goals.

1. Pay off your debt

There are many kinds of debt (mortgage, car loan, credit cards, etc.), but let’s focus on high-interest credit card debt since it’s the worst kind.

The average credit card is charging 22.6% interest right now (yikes!), and of households with credit card debt, the average amount is $7,226. If you made a minimum monthly payment of $219, it would take you nearly five years to pay it off.

That’s why paying more than the minimum amount and finding any extra money in your monthly budget to pay down your credit card debt is important. It also pays to contact your credit card issuer and ask them to lower your rate.

2. Save money

Putting some extra money into a savings account is just as important as working on your high-interest debt. Life tends to throw us all some financial curveballs, and without emergency savings to lean on, most of us reach for the credit card.

Automating your monthly savings is the best way to do this. Start small if needed, with $25 per month going into a high-yield savings account. If you can’t afford that much, comb through a few months of your spending and see if there’s anything you could have cut out that would equal that much (or more).

You won’t get rich putting money in your savings account, but it’ll help you stay out of debt.

3. Invest extra money

This is, of course, the best way to build wealth. Investing can seem overwhelming, but using an investing app and starting with a small sum of money will make the process much easier.

Just remember that you don’t have to be an investing guru to buy stocks. You can buy an inexpensive index fund that tracks the S&P 500 and simply let your money grow over time. While there will be ups and downs along the way, the S&P 500 has a historical average annual rate of return of over 10%, making it a fantastic place to put your money and let it be.

No matter what your net worth is, you can take the steps above to help put yourself on a better financial footing. While it’s tempting to compare your financial situation to others, think instead of where you want to be and the steps you’ll take to get there.

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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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The average credit card balance is $8,483 and the average interest rate is 21.59%. Read on to see what this can tell us about interest paid. [[{“value”:”

Credit card debt is a big problem for Americans, with collective balances coming in at around $1.115 trillion in total. For the individual American household, average balances are $8,483.

That’s a lot of money to owe on a credit card, especially with average interest rates of 21.59% according to the Federal Reserve. But just how much interest would that add up to?

Here’s an estimate for how much the typical household would pay if they had a credit card with the average debt balance at the average interest rate.

Here’s how your interest payments would add up

2024 is half over, so it’s a good time to look at how much your credit card debt may have cost you so far this year.

If you started 2024 with the average balance of $8,483 at the average 21.59% interest rate and you made minimum payments of 2% of your balance during the first six months of the year (which is a common minimum payment among card issuers), the table below shows where your money would have gone.

As you can see, the typical American with the average credit card balance and average interest rate would have paid a grand total of $911.16 in interest charges so far in 2024.

That’s almost $1,000 in money that went to the credit card company that could have been in your pocket instead.

How to deal with your credit card debt

If your credit card debt situation looks like the typical American’s, or if you owe anything on your cards at all, you can see how quickly interest charges add up. Obviously, paying such a big interest bill is a huge downside if you’re trying to get ahead financially.

Thankfully, you can reduce your interest costs by making a few strategic moves. For example, one option may be to use a balance transfer credit card.

If you can qualify for a balance transfer card with a special 0% APR promotional rate, you will usually pay a fee of around 3% to 5% of the balance you are transferring. But you won’t be charged interest for the promotional period. That period could last 12 to 15 months, or longer.

You’re typically far better off paying 3% of your balance (which would add up to $251.49 if you had the average $8,483 balance) to transfer it, rather than paying thousands in interest over the year. Of course, once the promotional rate ends, your rate will jump back up. So you’d ideally want to try to pay off as much of the card balance as you could before that happens.

Making extra payments on your debt can also bring your balance down faster, reducing the interest you owe. Try to pay as much extra as possible by making budget cuts elsewhere or sending in extra income, such as a bonus at work or money from a side gig.

Taking these steps could help you cut your interest costs, so next year you can use more of that money to do better things besides making your creditors richer.

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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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Costco could raise membership prices soon. Based on Costco’s history and overall business operations, here’s how much we think that price hike could be. [[{“value”:”

The past few years have seen fast-rising grocery prices and more expensive costs of seemingly every aspect of daily living. But one price has stayed the same: Costco memberships still cost $60 per year (or $120 for Executive memberships).

However, just like every publicly traded company, Costco needs to be profitable and drive growth. Raising membership prices is one easy way that Costco’s leaders could — if they choose — try to make more money.

Is the price of a Costco membership likely to go up soon? If so, by how much? No one knows for sure, but in this Costco member’s opinion, Costco is highly unlikely to raise prices by more than $20 per year.

Here are a few reasons why Costco membership prices probably won’t go up by more than a few dollars per year.

1. Costco doesn’t raise membership prices very often

It’s easy to lose sight of this, when so many other items at stores have gotten more expensive during the times of high inflation, but Costco has not raised its membership prices in a long time. According to CNBC, the last time Costco raised membership prices was in June 2017 — seven years ago!

Seeing as how Costco has never raised the price of its $1.50 hot dog and soda combo meal, it seems like this company is reluctant to impose price hikes on its customers. The fact that Costco has gone seven years without raising prices on memberships is a sign that any future membership hikes won’t be too severe.

2. Costco’s last membership price hike was only $5

And speaking of that Costco price hike, the June 2017 increase only added up to $5. The standard Costco Gold Star membership price increased from $55 to $60, and the Executive membership price went up from $115 to $120.

When you consider the hundreds (or thousands) of dollars of extra savings and value-added services you can get in one year from a Costco membership, a $5 price hike is worth paying. Will a future Costco price hike be only $5? Possibly, but even if it’s more than that, I would be surprised to see Costco raise prices on memberships by more than $10 per year. That’s because…

3. Costco likes having loyal customers

I just checked the card in my wallet — I’ve been a Costco member for 20 years! Most Costco members, like me, love Costco and keep renewing their memberships year after year. Costco has said in its annual report that it has a 90% membership renewal rate. That kind of customer retention and customer loyalty is hard to find in any industry.

Instead of nickel-and-diming customers with annual price hikes on memberships, Costco is adopting a strategy of focusing on customer loyalty. Costco would rather keep you happy and stay in a long-term committed customer relationship with you (and your bank account) instead of driving you away with short-term price hikes.

Costco’s high membership renewal rate is another big reason why any price hike in membership fees will likely be limited to less than $20 per year. Some Costco members are more price-sensitive than others, and suddenly getting charged an extra $30 or $40 (or more) for their Costco membership renewal might feel too painful.

4. Costco has lots of goodwill for keeping prices low

This last reason is intangible and hard to measure, but it’s real: Costco has a brand reputation for generally trying to do the right thing and treat people well — customers, employees, vendors, and other stakeholders. One reason why people shop at Costco is that it feels “good” to shop there; the prices are low but the quality is high, and the company has a good reputation.

If Costco tried to squeeze more short-term profits out of its members by raising membership prices too high, too fast, that could damage Costco’s reputation for being a customer-friendly company. It takes time, money, and effort to build a good reputation as a corporate brand. Damaging the brand can cost a company (and its shareholders) far more money than any short-term spike in revenue from higher membership fees.

Bottom line

It’s ultimately up to Costco’s executive leadership team whether to raise membership fees — and how much. But as long as Costco can keep achieving 90% renewal rates from its members, and based on Costco’s history of only rarely and slightly increasing membership fees, it’s more likely that Costco will keep any future membership price hikes limited to under $20 per year.

Making sudden, drastic increases in membership prices would be out of character for how Costco does business, and for what people expect from the Costco brand.

Top credit card to use at Costco (and everywhere else!)

If you’re shopping with a debit card, you could be missing out on hundreds or even thousands of dollars each year. These versatile credit cards offer huge rewards everywhere, including Costco, and are rated the best cards of 2024 by our experts because they offer hefty sign-up bonuses and outstanding cash rewards. Plus, you’ll save on credit card interest because all of these recommendations include a competitive 0% interest period.

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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 positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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