Money Management

Flying economy could save you money — but make for a less pleasant flight. Here’s how to improve your situation if you’re not able to spring for business class. [[{“value”:”

There’s a reason so many people bank credit card points or air miles to upgrade their flights to business class. Flying economy has become less and less pleasant as airlines have yanked amenities away. Throw in the fact that the seats somehow seem to be getting even smaller, and it’s easy to see why flying economy is not a pleasant experience all around.

The benefit of flying economy is clear — the savings. A basic economy ticket on United from Newark Airport to LAX for a long weekend in August costs as little as $325 roundtrip. That same route costs $1,528 for business class, which is a huge difference.

The good news, though, is that you’re not doomed to a miserable flight just because you’re opting to spend less and stick to economy. Here’s how to improve your experience without breaking the bank.

1. Fly at off-peak times

Flying economy becomes much more pleasant when you don’t have a person in the seat next to you. Flying at off-peak times could result in a less crowded plane — and more room for you to stretch out and relax.

Try to avoid flying during popular times like the winter holidays and long holiday weekends. Also, steer clear of school breaks unless you have kids and that’s the only time you can travel.

What’s more, if your schedule is flexible (maybe you’re self-employed), try flying to your next weekend destination on a Wednesday afternoon instead of a Thursday night or Friday. And then fly home Monday night or Tuesday morning. Chances are, you’ll have fewer people on your flight.

2. Bring supplies to make your flight more comfortable

You may be stuck in a cramped economy seat. But that doesn’t mean you have to be uncomfortable.

Invest in a good neck pillow and a pair of noise-canceling headphones so you can doze off with ease. You may also want to bring an eye mask to block out light if you’re hoping to get some shut-eye.

Remember, too, that planes can be a dry environment. Bring a small tube of hand lotion for dry skin and chapstick for dry lips.

3. Splurge for extra legroom if it’s a long flight

It’s one thing to suck it up in a tiny seat for a 2.5-hour flight from New York to Florida. It’s another thing to do the same when you’re flying from New York to Seattle.

If you’re taking a longer flight but can’t swing a business-class upgrade, consider paying for extra legroom. Or, at the very least, don’t stick to basic economy, because with that fare, you usually can’t choose your own seat. With regular economy, you generally at least get a seat choice at the time of booking. From there, you can select an aisle seat if you think you’ll need to stretch out.

Sticking with economy could save you a lot on your next flight. And there are ways to make the experience less unpleasant. But if you tend to fly often, you may want to shop around for a new travel rewards credit card — one that makes it easy to rack up points so you can swing a business-class upgrade more often.

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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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Despite inflationary pressures and rising interest rates, credit scores remain steady. Here’s what you need to know. [[{“value”:”

The average FICO® Score among U.S. consumers is 714, which is in the range of “good” credit scores. However, there’s quite a bit of variation between generations, location, and certainly by income level. In this article, I’ll discuss the average credit score of middle-class Americans, and what you could do to achieve a score well above the average.

The average middle-class FICO® Score

Admittedly, the “middle class” is a wide spectrum, and different groups define the middle class in different ways. But according to The Motley Fool Ascent’s credit score research and data from the Federal Reserve Bank of New York and Equifax, the median credit score by income level is as follows:

For our purposes, we’ll consider moderate- and middle-income Americans as being middle-class. But if we average these two groups together, we see that the median FICO® Score of the middle class is in line with the overall U.S. average.

Age and location also play a role

It’s important to note that credit scores vary widely depending on the age of the consumer and the state in which they live.

In a nutshell, the older a consumer is, the higher the likelihood of them having a higher credit score. There are some good reasons for this — specifically, a category called “length of credit history” makes up 15% of your FICO® Score. Plus, older consumers have had more time to establish a solid payment history. In addition, older consumers tend to have more money in savings, and therefore a lower need to borrow excessively.

Data from Experian shows that the average member of the baby boomer generation has a FICO® Score of 742. Among millennials, the average is a much-lower 687. This is still considered to be a “good” credit score, but there can be a significant difference in borrowing ability and the interest rates you’ll receive with this score.

In addition, some states have significantly higher average credit scores than others. This could also be related to income, as higher-income states generally have higher average credit scores than lower-income states.

The five components of your credit score, and how you can use them

Aside from making obviously responsible financial decisions, such as paying your bills on time, the best way to put yourself in a position to maximize your credit score is to know how it works.

With that in mind, here are the five categories of information that make up your FICO® Score:

Payment history (35%): Do you pay all of your bills on time, every month? This (specifically, avoiding a negative payment history) is the most important component of your FICO® Score.Amounts you owe (30%): This mainly refers to the amounts you owe relative to your credit limits or original loan balances. A good way to boost this category is to keep your credit utilization percentages low on your credit cards.Length of credit history (15%): This category considers several time-related factors. In addition to the overall length of your credit history, it also includes the ages of your individual credit accounts and the average age of your open accounts. If you’ve ever closed an unused credit card you’ve had for a while and your score went down, this is the main reason why.New credit (10%): You may have heard that applying for credit or opening a new credit card can hurt your FICO® Score, and it’s true. A smart way to maximize this category is to only apply for and open new credit lines when you need to.Credit mix (10%): In short, lenders want to know that you can use all types of credit responsibly. So, if you have different types of accounts — say, a mortgage, an auto loan, and a credit card — it can count more favorably than if you only had one.

By knowing the FICO® Score formula and how each component is used, you can approach improving your credit score strategically. Think twice before closing old credit cards and applying for new ones, focus on lowering your credit utilization, and make sure you pay your bills on time every month.

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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 number of CDs with rates above 5.00% is declining. Find out if now is a good time to buy CDs or if you should put off your purchase for a while. [[{“value”:”

In November of 2023, you had more than 3,900 certificates of deposit (CDs) to pick from if you wanted one offering a rate above 5.00%. By March of 2024, you had fewer than 3,000 choices.

CDs with super high yields are slowly disappearing. If you want to get your hands on one, should you act right now and buy? Or do you have time to wait? Let’s take a closer look.

The case for buying CDs right now

With the data showing a slow decline in CDs with super high yields topping 5.00%, there’s a good argument to be made for investing in CDs right now. For one thing, you don’t have to make a long commitment to get a CD paying upward of 5.00% at the moment. Traditionally, CDs with longer terms offered the most competitive yields. In the current market, short-term CDs have the best rates.

The Ascent has a list of multiple 6-month CDs offering rates above 5.00%. Six months is such a short time commitment that you aren’t taking on much interest rate risk. If rates do happen to go up in the coming months, it won’t be long before you can take advantage of them.

Plus, the chances of CD rates going up soon aren’t very high. The Federal Reserve has signaled that it wants to reduce, not raise, interest rates as soon as inflation gets under control. If the Fed acts to cut rates, or even if it simply keeps them stable, there’s no reason to believe banks are suddenly going to start offering CDs with higher yields any time soon. After all, CD rates climbed to their current heights in response to the Fed raising rates almost a dozen times between 2022 and July 2023.

A series of additional rate increases like that probably won’t happen again since inflation — while still higher than the Fed would like — is at a much more manageable level than it was during that time period. The inflation rate averaged 4.10% in 2023 and 8.00% in 2022. In 2024, it’s trending at around the 3.00% to 3.50% range.

With little chance of a big rate increase and the ability to buy short-term CDs and still get 5.00% yields, buying now just makes good sense.

The case for waiting

However, there’s still a case for waiting to open CDs.

The Federal Reserve is targeting a 2.00% inflation rate, and as mentioned above, inflation is in the 3.00% to 3.50% range. The Fed is going to want to see clear signs that price increases are slowing down a lot before it considers cutting interest rates, and most experts are no longer predicting the multiple rate cuts that were once expected this year.

This means you may have more time to buy CDs if rates stay stable for a while. Or you may decide your money is fine in your savings account since many high-yield accounts are also paying upward of 5.00% now. That won’t probably won’t change any time soon unless the Fed surprises everyone.

While those arguments have merit, on balance, it probably makes sense for anyone with spare cash they can invest for less than five years to consider putting some of it into a CD. There’s little downside to doing so, and for those who don’t act, there’s a big risk that 5.00% yields will disappear before they get the chance to take advantage of them.

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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 Target. The Motley Fool has a disclosure policy.

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Costco offers a range of quality services for its members. Find out the ones first-time home buyers should look out for. [[{“value”:”

We’re in the heart of the home-buying season, and just like every year, there are lots of first-timers who are getting their first taste of buying and owning their own homes. It sounds so simple, but it can be really overwhelming to walk through the doors of your first home and discover that the things you thought you knew didn’t even begin to scratch the surface of what you need to stay ahead of your home’s many needs.

According to the U.S. Census Bureau’s 2022 American Community Survey, only 11.9% of currently existing homes have been built since 2010, and a whopping 74.2% were built prior to 2000, so the odds are extremely good that you’ll be moving into a home that has some miles on it, even if it’s your first. Don’t worry, though — Costco has you covered.

Costco’s home improvement services don’t cover everything, but they sure move the ball down the field when it comes to finding contractors that can sometimes be very elusive (or really overbooked). Here are some that are seriously underrated:

1. Cabinet refacing

You probably have a lot of ideas about how you’d like to update or change your home, but for so many people, the kitchen is one of the first targets of change – and one of the most expensive. Dated cabinets can really drag a space down, but a lot of home buyers don’t realize that instead of ripping out whole cabinets, they can simply reface them. This saves you time, effort, mess, and most importantly — money.

Well, lucky for you, Costco has a partnership with Reborn Cabinets for its members. Members can call for a free consultation, and once the work is complete, will get a 10% Costco Shop Card on qualifying purchases. That’s a lot of grocery money for paying for a service you would’ve paid for anyway.

Reborn offers a ton of options, including a variety of wood and non-wood finishes, lots of different door styles, crown molding upgrades, and additional exclusive hardware and design options for Costco members only.

2. Solar panel installation

Solar power is becoming a really popular add-on in many areas, but there are so many solar companies, and it’s often hard to know which ones are legitimate and which ones are going to disappear after your panels are installed. Having a reliable, reputable partner is vital when installing solar panels, because sometimes you really do have to use your warranties and you need a company that will be around to honor them.

Costco has teamed up with Sunrun to ensure members always have a solid go-to for solar power systems, from panels to batteries, and all the labor required to install them properly. Members receive a 10% Costco Shop Card on equipment purchases (sorry, you won’t get anything back on labor and installation), as well as a 15-year roof penetration warranty with every system, even if you don’t choose to upgrade.

It’s difficult to over-stress how important having a solar installer you can count on really is, so the fact that Costco has a corporate partner to help you cut through the chatter is priceless. Save money while saving the Earth is a pretty good deal.

3. Home standby generator installation

There’s absolutely nothing sexy about buying a home standby generator, but there’s even less sexy about being in the dark with no way to power your home for days or even weeks after a powerful storm comes through. This is another one of those systems where it matters who installs it as much as what is installed.

Generac generators are the gold standard for home standby generators, and luckily, Costco has a partnership with licensed installers who know the systems inside and out and how to best ensure that yours runs smoothly when you really need it to. Members receive a 10% Costco Shop Card for purchases made through the Custom Installed program, as well as the peace of mind that the next time the power goes out, they won’t be in the dark.

Costco’s home improvement services are underrated offerings

Frankly, all of Costco’s home improvement services are underrated — after all, being able to get what you need installed at prices that are consistent with Costco’s philosophy of saving money makes life so much easier for a first-time home buyer. There’s no getting multiple quotes (though it’s never a bad idea to do so) and there’s no checking in on contractors to be sure they’re really going to show up this time.

When you use Costco for home services, there’s only budgeting for your next home upgrade, calling Costco, and setting up a service appointment for a time that works for you. Like everything else at Costco, it’s simple, effective, and stress free.

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.

Click here to read our expert recommendations for free!

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

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Don’t have a lot of money to invest? Read on to see why you should still get started right away. [[{“value”:”

I can admit that I didn’t first open a brokerage account and start investing until I had a few thousand dollars to work with. At the time, I just assumed that investing a few hundred dollars wasn’t worth it.

I now realize how silly that line of thinking was. The reality is that many brokerage accounts today don’t impose a minimum. So even if you only have $100 or so, you can start investing right away. Here’s why it pays to open a brokerage account ASAP, even if you’re fairly low on funds.

1. You can start growing your money immediately

If you’re hoping to grow wealth by investing, the most effective tool you have at your disposal is time. The more years you’re invested for, the more you can benefit from compounded returns in your brokerage account.

So let’s say you only have $200 to invest with today. Over the past 50 years, the stock market has generated an average annual return of 10%. Your $200 could be worth almost $23,500 in 50 years if your portfolio performs similarly.

2. You can still create a diversified portfolio with fractional investing

It’s generally not a good idea to invest money in a single stock and call it a day. But if you’re short on funds, you might assume that’s your only choice.

That’s not necessarily so. Most brokerage accounts allow you to buy shares on a fractional basis. What this means is that you don’t have to buy whole shares of stock. You can buy one-eighth of a share of a given company, or one-tenth of a share of another. By taking advantage of fractional investing, you can own a good number of stocks with a small amount of money.

3. You may be less tempted to spend money you should be saving

The money you invest in a brokerage account is yours to withdraw at any time. There are no penalties to worry about, whereas with an IRA or 401(k), you could be penalized for removing your money before reaching age 59 1/2.

Still, once that money lands in your brokerage account, your brain might consider it off-limits. And that’s a good thing if you’re trying to use that money to save for a long-term goal, like retirement, your kids’ college expenses, or something else.

If you leave your money sitting in your bank account, you may be more likely to spend it. But keeping it in a separate brokerage account might change the way you view that money.

Also, for better or worse, the value of your portfolio is likely to fluctuate over time. If you see that your stocks are down, you may be motivated to leave that money alone to avoid taking a loss. If you see that your stocks are up, you may be motivated to leave that money alone so it can continue to grow. Either way, you stand to benefit.

There’s no need to let a lack of funds stop you from opening a brokerage account. As long as you have some money to invest, it pays to get started as soon as you can — with the goal of adding to your account over time.

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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 no position in any of the stocks mentioned. The Motley Fool recommends InterContinental Hotels Group Plc. The Motley Fool has a disclosure policy.

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Obtaining a college degree has a big effect on net worth. Here’s a closer look at how much being a college graduate adds to your overall wealth. [[{“value”:”

Many of us probably grew up hearing about how a college degree was key to securing a lucrative career. But the high cost of a university education discourages many people.

Still, for those who are able to swing it, a college degree could have a huge effect on their net worth. Here’s what recent data has to say about the connection between education and net worth, to help you decide if it’s the right path for you.

What’s the average net worth of a college graduate?

Net worth is an important measure of wealth. To calculate it, you total the value of your assets — your savings account funds, home, car, investments, etc. Then you subtract the value of your liabilities — your mortgage balance, balances on credit cards, unpaid medical bills, etc. Net worth can be positive or negative and a higher net worth indicates greater wealth.

The typical adult with only a high school diploma had an average net worth of $413,300 in 2022, according to data from the Federal Reserve. Those with a college degree had an average net worth of just over $2 million. That’s nearly five-times higher. But there are a few caveats here.

What the average doesn’t tell you

First, averages aren’t always the best figures to look at when evaluating wealth-related data, because a few people earning millions of dollars a year can skew the average up significantly. Many sources use median figures because these better represent a middle-income person’s situation.

If we look at median data, the difference between net worth for college graduates and those with a high school diploma is a little smaller. The median net worth for those with high school diplomas was $106,800 in 2022 compared to $464,600 for college graduates. Still, that’s more than four-times higher for college grads.

But even this doesn’t tell the full story. People from wealthier families are more likely to attend college in the first place. They’re also more likely to attend more selective schools, pursue four-year degrees instead of two-year degrees, and complete those degrees.

Those from lower-income families generally face increased barriers to higher education. Many opt for more affordable schools and may only attend part time. They might also have to drop out if they cannot afford to continue. So the difference in net worth isn’t purely due to education level. Coming from a family with a higher socioeconomic standing affects a child’s likelihood of obtaining a college degree and going on to have a higher net worth themselves.

What does this mean for you?

The decision of whether to attend college is always a personal one, and future earning potential isn’t the only factor to consider. You also have to weigh the costs and time investment required as well as the availability of alternative pathways to the career you’re interested in.

If you decide not to attend college, you’ll save money upfront. But over the long term, you might come out ahead with a college degree. If college isn’t in the cards for you right now, that’s OK. You might be able to go back to school later if you feel it’s the best move for your career and net worth.

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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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