Money Management

Knowing what to do with your money when you’re young can make or break you financially. Discover the safest places to invest and save as a young adult. [[{“value”:”

Managing money can be challenging for people of all ages, but it’s especially hard when you’re young. You may not have much knowledge about many of the accounts where you can put your money. Since you’re just starting out, you probably also don’t want to do anything that will leave your savings at risk.

Everyone handles money a bit differently, but there are a few tried-and-true strategies. Below, you’ll find safe places for young adults to put their money.

1. An emergency fund in a high-yield savings account

When you start saving money, the first priority should be building an emergency fund. This is your safety net for all that can go wrong in life. It’s not exactly exciting, like investing. But you’ll be glad you have one if your car breaks down or your work hours get cut.

The standard guideline on emergency funds is to save enough to cover three to six months of living expenses. If you have $3,000 in expenses per month, you’d aim for $9,000 to $18,000 in emergency savings.

Yes, it’s a lot, and saving it won’t happen overnight. To build an emergency fund, set aside money for it every month. That could be $50, $100, or whatever works for you.

The best place for your emergency fund is a high-yield savings account. These have competitive interest rates, with some offering over 5% right now. They also let you access your money at any time. If you don’t have one of these already, check out The Ascent’s best high-yield savings accounts to compare options.

2. The stock market for retirement savings

The stock market might not seem like the safest place for your money. Isn’t it known for its volatility? While it’s true that the stock market goes up and down, historically, investing in it has been one of the most reliable ways to build wealth. It has delivered an average return of about 10% per year for decades.

When you’re young, it’s especially important to invest in stocks. You have plenty of time to ride out any short-term ups and downs. And those greater returns will make a massive difference in how much your money grows.

Let’s say you can afford to invest $250 per month. If you do that for 40 years and get a 5% annual return from more stable investments, you’ll end up with $380,519. If you invest it in the stock market and get a 10% annual return, you’ll end up with $1.46 million — over $1 million more.

You can invest in the stock market through retirement accounts, including 401(k) plans and individual retirement accounts (IRAs). These tend to be the best place to start investing, because they offer tax advantages. A taxable brokerage account is another option.

3. CDs or Treasuries for short-term savings goals

Most of us have our share of short-term goals. Maybe you have some money you want to set aside for a vacation, a new car, or a down payment on a home. If you’ll need the money within the next five years, don’t invest it. Since the stock market fluctuates, it isn’t the right place for money you’ll need in the near future.

You could put this money in a high-yield savings account. But if you want to lock in a high interest rate, you may want to consider certificates of deposit (CDs) or Treasuries.

A CD is a banking product with a fixed interest rate and term. For example, if you open a 1-year CD with a 5.15% APY, then you’re guaranteed that rate for the entire CD term. You also need to keep your money deposited for the full term to avoid an early withdrawal penalty.

Treasuries are securities issued by the U.S. Department of the Treasury. Like CDs, they have a fixed rate and term, so they’re another good option if you want a stable place to put your money.

Setting yourself up for success

As a young adult, it’s important to build financial security in the present and the future. An emergency fund is a smart starting point, as having one will ensure you’re ready for unexpected bills. Everyone should consider investing in the stock market while they’re young because of the growth potential it offers. And if you have any money you want to set aside for some short-term goals, a CD or a Treasury could be ideal for that.

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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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Switching banks can save you time and money. Here are five big reasons you should consider dumping your old bank in June. [[{“value”:”

Switching banks can be a major hassle, but so can sticking with a bank that you’re not happy with. Annoying fees, low interest rates on savings products, and clunky apps aren’t things anyone should waste their time on these days.

There are plenty of great banks out there that make managing your money a breeze and will even pay you for the privilege of holding your cash. Here are five reasons you should seriously consider breaking up with your old bank this June.

1. Higher APYs on savings accounts and CDs

Brick-and-mortar banks were long considered the industry standard, but over the last decade, they’ve been left in the dust by online banks with much higher annual percentage yields (APYs). Right now, the best savings accounts are offering close to 5.00%. That could earn you $500 in a year if you have a $10,000 initial balance. A brick-and-mortar CD with a 0.01% APY would only earn you $1 on that balance in a year.

CD rates are also high right now. The best 1-year CDs have rates just under 5.00%, while the best 5-year CDs have rates closer to 4.00% APY. These are some of the highest rates we’ve seen in years, and they could put hundreds or thousands of dollars in your pocket.

2. Fewer fees

Brick-and-mortar banks still charge monthly maintenance fees to their customers. Some of these can be as high as $30. To be fair, most institutions waive the fee if you meet certain criteria, but not everyone does. Summer brings enough expenses without paying the bank you’ve entrusted your savings to.

Switch to an online bank account and you won’t have to worry about paying monthly fees. Most online banks also do away with a number of other bank fees, like out-of-network ATM fees and even overdraft fees in some cases.

3. Better digital tools

Summer usually takes people out and about, and it’s not always easy to find time to run to your local bank or wrestle with its ancient online interface. You want to be able to quickly see what you have and get your money where it needs to go.

Online banks don’t have branches, so they put a strong emphasis on building a great digital experience for customers. Their apps are usually user-friendly and enable you to view your balance, transfer funds, and even deposit checks remotely.

4. Larger ATM networks

Some brick-and-mortar banks have large ATM networks. But if you work with a smaller regional bank, you could have trouble finding an in-network ATM to get cash from, especially when you’re traveling for the summer.

Online banks usually partner with a nationwide fee-free ATM network, like Allpoint. This doesn’t guarantee that there will be one where you’re going, but the odds are certainly better than they would be if you stuck with your regional bank.

5. Better perks

Brick-and-mortar banks spend a lot of money paying their employees and maintaining their branches. But online banks have lower overhead costs, so they can often offer their customers better deals. This includes lower fees and higher APYs, as mentioned above.

But it can also include things like the option to get your paycheck up to two days early or a bank account bonus for new customers. These factors shouldn’t be the sole reason you switch to a new bank, but they can be a tiebreaker if you’re torn between two accounts.

Whether you wind up switching or not, it’s worth comparing offers from a few other banks so you know what’s out there. If you decide to go ahead with it, remember to switch any automatic payments you have set up to your new account so you don’t accidentally fall behind on your bills.

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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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From eyeglasses to hearing aids to wheelchairs, Costco can reduce your healthcare costs. How many ways can Costco save you money on healthcare? [[{“value”:”

Costco can help people save money on a wide range of purchases, from hot dogs and rotisserie chickens, to gasoline, to big-ticket items like TVs, furniture, vacations, and cars. But did you know that Costco can help you make the most of another troublesome budget item — healthcare?

That’s right: Costco offers big savings on prescription drugs, wellness products, home healthcare supplies, and much more. We talked with Chris Pierce, Assistant Vice President of Pharmacy at Costco, and Head of Costco Health Solutions, to get some exclusive advice and insights on how Costco can help reduce your out-of-pocket healthcare spending.

Here are a few surprising ways that Costco can save you money on healthcare.

1. Low-cost healthcare appointments online with Sesame

Costco has a partnership with Sesame, a company that provides telehealth (online healthcare). With Sesame, you can meet with doctors and other healthcare professionals who can help you with online appointments for primary care and some specialties like dermatology, pediatrics, cardiology, and even dentistry. Costco members get special pricing: $29 per virtual primary care visit.

“This is exclusive pricing for Costco members for this easy-to-use telemedicine service from a trusted business partner,” Pierce said.

If you have a high-deductible health plan and health savings account (HSA) and pay for most of your healthcare costs out of pocket, you might find that Costco’s partnership with Sesame can help you save hundreds of dollars compared to traditional doctor visits. And you can get same-day doctor appointments with no wait times — saving you time and getting you the care you need, faster.

2. Costco weight loss program by Sesame (access to GLP-1 medications)

Do you want to lose weight? Have you struggled to make progress with diet and exercise changes alone? If you’re curious about the new generation of life-changing, blockbuster GLP-1 weight loss drugs (like Ozempic and Wegovy), Costco’s partnership with Sesame has another special benefit for members: You can sign up for a specially discounted weight loss program.

Sesame is offering exclusive Costco member pricing of $179 for a three-month subscription to the Sesame weight loss program. “Members can be prescribed GLP-1 therapies with monitoring and support from a Sesame physician,” Pierce said.

Keep in mind that the cost of GLP-1 drugs or other medications is not included in this $179 price. There are currently no generic alternatives for these highly in-demand drugs, and without insurance, the price typically ranges from $950-$1,600 per month. The exact pricing of any weight loss prescription drugs will depend upon insurance coverage and other factors.

3. FSA-eligible healthcare products at Costco online

The Costco website makes it easy to search for a wide range of health and wellness products. You can use the “FSA Eligible” filter to find products that can be purchased with pre-tax flexible spending account (FSA) dollars, in case your employer offers that benefit.

“The deals webpage for Costco healthcare features significant savings on a number of popular non-prescription products,” Pierce said.

Here are a few examples of Costco deals on home healthcare products and devices:

Mobility Plus wheelchair by Medline ($189.99)Home Guardian 2.0 Medical Alert System ($99.99)KardiaMobile Personal EKG ($79.99)A&D Talking Blood Pressure Monitor ($54.99)Flonase Nasal Spray – 432 metered sprays ($52.99)

Prices are as of May 22, 2024 and may vary by location.

4. Use Costco to buy glasses and hearing aids

If you need eyeglasses or contact lenses, or if you’re experiencing hearing loss, Costco can help you save money on eye doctor visits and hearing aids. “Costco Optical and Hearing Aid centers offer strong member value and are routinely recognized for high levels of service,” Pierce said.

Costco offers premium rechargeable hearing aids starting at $1,499. The Costco Optical department accepts most major vision insurance plans for eyeglasses. “Costco Optical offers Kirkland Signature High Definition lenses at no additional cost,” Pierce said.

5. Go “behind the counter” for OTC medication savings

Not every “over the counter” medication or home healthcare product is out there on the store shelves. Some items are kept “behind the counter” at the pharmacy.

“Here’s an insider tip,” Pierce said. “Stop by the Costco Pharmacy department. There are tremendous savings on OTC items ‘behind the pharmacy counter’ like skin creams, antifungals, diabetic supplies, and other popular items. Products can vary by pharmacy, but it’s a good idea for members to stop by to do a mini-treasure hunt.”

If you’re looking for certain healthcare products, can’t find something on the shelf, or just want to see what special deals might be available at your warehouse, ask your local Costco pharmacist. They might have great deals waiting for you behind the counter.

Bottom line

Costco can help people save money on a wide range of healthcare needs, from weight loss to home health monitoring devices to skin creams. Along with the hundreds of dollars of savings that you can get with generic drugs at the Costco Pharmacy, Costco can help you stay outfitted with eyeglasses, hearing aids, and many non-prescription items.

Especially if you’re paying for more of your healthcare costs out of your own bank account, it’s important to make your dollars go further. Costco can help you get the best value for money and enjoy better personal and financial wellness.

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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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It is possible to get out of five-figure credit card debt if you take the right approach. Read on to learn more about your options. [[{“value”:”

When you live under capitalism, it’s easy to get into credit card debt. Whether that’s from unexpected medical debt or simply having to pay your bills, getting out of $10,000 or more of this type of debt is a difficult feat. But if you take the right approach, you can help yourself get there.

Here’s what you need to know to get it done.

Figure out your payoff method

There are several methods you can use to pay off your debt, but the best option for you will depend entirely on how your brain works. That’s because, like so many difficult things, paying off $10,000 in credit card debt requires sustained motivation (which, in itself, is a huge ask).

If you’re the type of person who needs to reach smaller but frequent milestones, you might want to consider the debt snowball method. It requires you to pay off the smallest balances first, which can feel like a huge accomplishment.

But if you’re the type of person who is motivated by saving the most money, the debt avalanche method could be the solution. That method has you pay off the highest interest rate debt first, which may take longer to achieve than paying off the smallest balance.

However, depending on your debt amount, things may even out. Let’s say you have the following debt:

$5,000 at 18% APR$3,000 at 21% APR$2,000 at 24% APR

If you can afford to pay $500 toward that debt per month (including the minimum payments), you’d end up paying $12,137.18 over 25 months with the debt snowball method. With the avalanche, you’d pay $12,137.15 over the same period of time — just a few cents less. So you need to do the math if you’re deciding between these two options.

Some people will also prefer something in between these methods, such as going after that lowest balance first to feel that sense of gratification, then attacking the highest interest card to save money. Or if you have good credit, you might consider putting some of that balance onto a balance transfer card or low-rate personal loan. Whatever the method and whatever your reasoning, just make sure it aligns with what motivates you.

Make things as simple as possible

Once you reach five-figure debt territory, the necessity for simplicity only becomes more apparent. Here are a few tactics that can make a huge difference here.

Set up automatic payments for each card: If you have established how much you can afford to pay for each card, it’s important to stick to that plan. Autopay is the easiest way to do that — just be sure to make a note of when each payment comes out of your checking account to avoid overdraft fees.Set up a recurring debt check-in: Tracking your progress doesn’t necessarily have to be a daily occurrence, but it should be a regular occurrence. Setting up a monthly or quarterly meeting with yourself to make sure you’re on track (and recognize when you hit milestones) is a great way to keep things going in the right direction.Delete saved credit cards: The only way to get out of credit card debt is to make sure you’re paying down the balance. So if you’re still going to charge purchases to those cards, you have to do that with the intention of paying off those extra charges before your next billing cycle. Removing saved credit card information from your computer and phone is one way to ensure you aren’t making impulse purchases that will add to your debt.

Paying off credit card debt is a marathon. You need to pace yourself, but with the right payoff plan and tools, you can get to that finish line on your desired timeline.

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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 Avalanche. The Motley Fool has a disclosure policy.

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Tempted to tackle accounting matters solo? Read on to see why you really shouldn’t. [[{“value”:”

It can take several years (or longer) for a new business to turn profitable. So if you recently opened a small business, you may be inclined to do what you can to cut costs. That could mean taking on as many tasks as possible to avoid having to outsource them or bring in professionals.

One task you may feel equipped to handle is accounting. With the right accounting software to guide you along, you may have confidence in your ability to manage your company’s books without having to hire someone with that background to do it for you.

And let’s be honest — it’s really good to have a pulse on your company’s finances. So there can be a benefit to handling your small business accounting yourself.

But it’s also important to recognize the pitfalls you might encounter if you do your own business accounting. Here are three reasons you may want to assign that task to someone else.

1. You risk making big mistakes without the proper training

If you don’t have experience in small business accounting and you’ve never been trained in that area, then handling your own books could result in a number of problematic mistakes on your part. These could include:

Failing to run payroll on time and forcing your entire staff to miss bills as they wait for their paychecks to hit their bank accountsFailing to pay credit card bills on time and getting hit with interest and penaltiesFailing to comply with tax rules and being fined as a resultOverpaying or underpaying employees (such as in the context of bonuses, commissions, or overtime) and having to reconcile the numbers after the fact

Hiring someone to do your small business accounting could mean avoiding these and other blunders that could prove to be a real headache.

2. It can be extremely time-consuming

Small business accounting usually isn’t a 10-minute task each week. Rather, it can be a full-time job by itself.

You know what else is a full-time job? Running a business. So if you take on the job of accounting, you may add stress to your plate that you don’t need.

A recent Capital One survey found that many small business owners today are suffering from stress, anxiety, and burnout. Why pile onto that by forcing yourself to tackle another tough task?

3. It could take you away from other tasks that only you, as the business owner, are equipped to handle

When you own a business, there are certain tasks that will inevitably fall on you, and only you. You may, for example, have to review every contract that comes in and negotiate every vendor agreement.

The more time you spend doing accounting work, the less time you might have for the most important tasks on your plate. While your goal in doing your own bookkeeping may be to save money, if taking on that work means missing out on other money-making opportunities, then you’re not really doing your business any favors.

It’s important to recognize that small business owners can’t do it all. And accounting is one job you may want to assign to someone else — someone with the background needed to avoid mistakes and the capacity to dedicate enough time to the task at hand.

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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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Removing $10,000 from your own bank account can come with complications. Find out why here. [[{“value”:”

You thought it was going to be easy, didn’t you? You’d just walk into the bank, ask for your money, and the teller would count it out in little paper-wrapped stacks — or better yet, put it into a briefcase that you would lock to your wrist like in the movies. (Or, you know, maybe you’d be normal and get a cashier’s check. I’m not your mom.)

But when you went up to the teller and asked to take $10,000 out of your account, suddenly everything slowed down a little bit. You could see the pain in the teller’s eyes. And you wondered — wait, what’s happening?

Money laundering, banks, and $10,000

Money laundering is a tradition almost as old as time itself, but it’s never been particularly popular with the federal government. That’s why, in 1970, the Bank Secrecy Act was passed. This law established requirements for recordkeeping and reporting of transactions of more than $10,000, using a form called the Currency Transaction Report (CTR).

It’s meant to flag all large transactions when they come into checking and savings accounts, as well as investment accounts, and to track those same large amounts as they move about the system to help prevent money laundering and fraud. Say you deposited $10,000, bought a certificate of deposit (CD) with it, let the CD mature, then cashed the $10,000 back out — a paper trail of all of that activity would be sent to the U.S. government.

This law has grown and expanded several times since 1970, with seven additional major pieces of legislation to support it, and yet the $10,000 threshold has never changed. According to the Bureau of Labor Statistics’ CPI Inflation Calculator, that same $10,000 in January 1970 is worth an equivalent of $82,949.21 as of April 2024 — which explains a bit why it was such a significant number at the time. I’d definitely raise an eyebrow at that amount of money just appearing out of thin air, where I might not think twice about $10,000 today.

The problem with $10,000

The law creates extra hurdles for people. Often, cash must be seasoned before it can be used, even if it’s only $10,000. This means longer wait times for you to get your money that you earned from the bank, even though you’re just doing legal stuff like going to work or liquidating your grandmother’s home (with her permission) while she goes off to live in Boca Raton, or having to wait longer for large checks to clear, even though they’re completely legit.

Banks no longer do CTRs by hand, instead having computer algorithms trigger automatically when they’re applicable, but that doesn’t mean they don’t catch suspicious activity. For example, if you make many large transactions in the same day that add up to $10,000 or several in a short period that are significant, even if they’re under $10,000, this all could trigger another level of anti–money laundering reporting called a Suspicious Transaction Report (STR). That can then cause the bank to look more deeply into your personal business and generate a Suspicious Activity Report (SAR).

If it goes this far, it can end up being a very bad thing, and for such a relatively small amount of money these days. You could even be fined or imprisoned if the situation gets far enough out of hand.

How to withdraw $10,000 without getting the Feds involved

There is literally no way to withdraw or move $10,000 without a CTR being generated, but there are ways to avoid possible problems. Before you begin to perform a large transaction online or walk into your bank with your briefcase, do this:

Call the bank to explain why you’re making a large transaction. Documentation is key here, and the more, the better.Have a paper trail that explains where your money came from if it’s a deposit. A bill of sale for your old Caddy or paperwork from your home’s closing are great options.Make it a habit to deposit regularly into your account. Don’t save up and do a big cash deposit randomly. Your deposit habits matter.Perform the transaction you need. Some people try a trick called “structuring” that is basically taking out several smaller withdrawals or putting in small deposits to try to avoid the $10,000 threshold, but this only triggers more suspicion. Structuring is definitely illegal, and you could go to prison for purposefully trying to evade the $10,000 cap.

There’s nothing illegal about using your own money, but you can look incredibly suspicious if you try to avoid the Bank Secrecy Act with a lot of weird and dodgy tactics. Just be honest with people you’re encountering, tell them what’s going on, and if that fails, do what I do every day — just walk around like you know what’s going on and everything is bound to work out OK in the end.

So many real estate transactions require the movement of this paltry amount (relatively speaking) of money that the bank won’t think twice about it as long as you don’t act like it’s a big deal. Because it’s not. Again, you’re not actually moving around the equivalent of $83,000 in the 1970s — you’re just moving $10,000 in 2024, which is just a month’s worth of income for an increasing number of people these days.

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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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