Money Management

Is it time to close your savings account? Here’s why you may want to. [[{“value”:”

A savings account is your best option for housing your emergency fund — money you might need for unexpected expenses, like unplanned home repairs. But a savings account might not always be the right account in all situations. Here are three reasons why it could pay to close yours.

1. A CD makes more sense for your situation

Maybe you have a separate savings account for non-emergencies, but your emergency fund is nice and complete. If that’s the case, and you don’t think you’ll need near-term access to your money, then you might as well close your savings account and transfer the funds into a CD instead.

The nice thing about CDs is that they guarantee you a certain rate on your deposit. With a savings account, your interest rate could fall with market conditions. So if you’re not worried about having to withdraw your cash early and take a penalty (which will usually happen if you tap a CD before it matures) because you’re all set with emergency savings, then a CD could be your best bet.

2. You were saving for a specific goal you’ve since met

Maybe you had money in a separate savings account for a down payment on a home. Or maybe you were saving to buy a car outright.

If you’ve met the financial goal you were saving for, then you may not want to keep a separate savings account open. You could run into issues for not meeting a minimum balance requirement, so why risk a fee or penalty for that?

3. You’re socking money away for a long-term goal you should be investing for

A savings account is a great option for a near- or mid-term goal. But it’s not a great place to put your money if you’re saving for a far-off goal, like retirement or college.

The reason? Even though you might earn 4% or more on your money in a savings account right now, today’s rates aren’t the norm. And even if they were, the stock market’s historical returns are much more impressive.

Over the past 50 years, the stock market’s average annual return has been 10%. So let’s say you have $10,000 you want to earmark for retirement. And let’s even say that you can get 4% on that money in a savings account over the next 40 years. If so, you’re looking at growing your $10,000 into about $48,000.

But watch what might happen with a stock portfolio instead. If you’re able to earn 10% on your $10,000 over 40 years, you stand to turn that sum into a little over $452,000. That’s a total you can potentially retire on, whereas with just a $48,000 nest egg, you’ll probably fall short.

There’s no need to keep a savings account open that isn’t serving a specific purpose. So if any of these situations apply to you, you may want to close your savings account — provided you also have another one open that’s housing your emergency fund.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2025

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 

Looking for an interesting way to earn more money? You can start your own business. Check out these affordable business ideas. [[{“value”:”

A side hustle can help you increase your income. Whether you need more money to pay down debt, boost your savings, or deal with rising living costs, there are plenty of side hustle ideas to explore. Even better, you don’t have to work on an app or platform to do this kind of work. You can start your own business and deal with clients directly.

You may assume you’ll need to invest significant money when starting a side hustle, but that’s not always true. You can start a business for little to no startup costs. I’ll share a few affordable business ideas that could help boost your checking account balance.

1. Freelance writer or editor

Many businesses hire freelance writers and editors to help them create content, such as website copy, blog articles, and press releases. If you’re a good communicator, are creative, have an eye for details, and can juggle multiple projects, you may want to explore becoming a freelance writer or editor.

The nice thing about this business idea is you don’t have to invest money to get started. If you own a computer and have internet access, you can get started immediately.

Some writers and editors use software and tools, like spelling and grammar software, but there are also free tools you can use to help you do your job better — like Google Docs. You can keep your costs low with this kind of business, especially in the early days.

2. Tutor

Another business idea to explore is becoming a tutor. Other people are looking for one-on-one instruction in subjects or skills they’re struggling with — and you can help them. If you’re a good problem solver and an active listener and can explain things clearly and compassionately, you may be a good fit for this side hustle.

Whether you excel at a subject matter that can be challenging for others to grasp (like higher-level science or math courses), can speak multiple languages, or are a skilled musician, there are likely plenty of opportunities to tutor kids and adults in your community.

You decide what level of tutoring you’ll offer, such as homework help, test preparation, or private lessons, and what to charge for your services. This could be a great business idea with little to no operating costs, and it can easily be done during evening and weekend hours at clients’ homes or in your own home.

3. Virtual assistant

Another low-cost business idea is to create a virtual assistant business to help other companies manage their day-to-day operations. Some business owners are too busy to handle tasks like setting appointments, scheduling travel arrangements, and answering emails.

A virtual assistant can help with these affairs so the business owner can focus on other business matters. If you’re organized, excel at communicating, and can juggle tasks, you may do well running a virtual assistant business.

You’ll need a computer and internet access, but otherwise, you can skip other costs like software expenses while you get your business up and running and build your client base. Some virtual assistants do pay for tools like project management software — but there are affordable options here if you want to keep your operating costs low.

Don’t expect to bring in money right away

As mentioned earlier, a side hustle could help you increase your earnings to get closer to reaching your personal finance goals. But don’t expect results within a few days or weeks.

Establishing your business can take time. At the beginning of your journey, you may need to spend extra time marketing your services and reaching out to people and companies who need your assistance. Don’t be afraid to put yourself out there if you want results.

If you’re struggling, look online for help. Look for social media groups for business owners in your field or area of focus. You can learn from other business owners who are going through similar experiences. For more guidance, check out our small business resources.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2025

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.Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.

“}]] Read More 

A trip to the dollar store can benefit you more with the right strategy. Read on to see how to eke out added savings. [[{“value”:”

I do the bulk of my grocery and everyday shopping at Costco, my local supermarket, and Amazon. So usually, when I go to the dollar store, it’s for a specific reason, like buying last-minute school supplies or loading up on giveaways for a classroom party.

But because I’ve been shopping at the dollar store for years now, I’ve picked up some strategies for maximizing my savings. And here are a few that might benefit your budget, too.

1. Load up on greeting cards

Have you seen the price of greeting cards at a regular supermarket or big-box store lately?

Just recently, I was picking up a few items at the grocery store and thought I’d save myself a trip to the dollar store by purchasing a birthday card along with my apples and bread. When I saw that the cheapest kids’ birthday card I could find was $3.99, I walked out of that aisle and then promptly headed over to the dollar store to spend a lot less.

At my local dollar store, you can get two standard greeting cards for $1.25. Seeing as how I have a pretty consistent need for them, that saves me more than $3 per card compared to supermarket prices. So if you’re tired of spending a small fortune on birthday cards, I highly suggest loading up on dollar store offerings the next time you’re there.

2. Check food expiration dates

Some people will tell you that dollar store food purchases leave you with products that are lower in quality. I say that’s false. Not only have I often purchased dollar store food with no issue, but the brands I’ve brought home have often been ones that are staples at my regular grocery store.

However, one thing I have noticed about dollar store groceries is that the expiration dates aren’t always so far out. So I recommend that you check dates carefully before making purchases. You don’t want to buy candy on May 29 with a best-by date of June 2.

3. Bring cash to shop with

The tricky thing about the dollar store is that everything costs a dollar, or something in that vicinity. Because of that, you may not put as much thought into dollar store purchases as you would at another store. But that could easily lead you to overspend and effectively negate your savings.

If you’re nodding along because you’ve done this before, I’m done judging — I’m speaking from personal experience. That’s why I often run into the dollar store with cash and leave my credit cards at home.

Even though I’m someone who uses credit cards for just about everything, I know that those small dollar store purchases can add up when you’re not really keeping count. So if you have five items to get at the dollar store and you come in with a $10 bill only, there’s a limit as to how much extra you’ll spend.

The whole purpose of going to the dollar store is to spend less. With any luck, adopting these strategies will help you enjoy more savings in the course of your dollar store shopping.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2025

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 

You’ll often hear that it’s smart to pay off a mortgage ahead of schedule, but this advice doesn’t always apply. Find out when it’s best not to pay extra. [[{“value”:”

My friend Tina and her husband Sean bought a house in 2020 at what I’d call the perfect time. Back then, it was fairly inexpensive to sign a mortgage, and home values hadn’t yet completely skyrocketed.

Since buying their home, Tina and Sean have made a point to pay extra on their mortgage. What they generally do is send in their regular payment, and then make a follow-up payment a couple of weeks later at the end of the month, the amount of which will depend on what they can swing based on other expenses.

When Tina told me what they’d been doing, I commended her for trying to pay off her mortgage early. I also told her that making those extra payments actually made no sense.

The upside of making extra mortgage payments

The benefit of paying extra on a mortgage is clear: The more you do that, the sooner you pay off your home — and the less interest you accrue over time.

Paying off a mortgage early could make sense for some people. But it definitely does not make sense in my friends’ situation.

When you’re better off paying your mortgage on schedule

The reason I told Tina to stop making extra payments on her mortgage is twofold. First, she has a super low mortgage rate of just under 3%. In 2020, that wasn’t a hard rate to get for a 30-year loan.

Meanwhile, Tina’s high-yield savings account is currently paying her over 4% on her money. Once I pointed out that her savings account rate was higher than her mortgage rate, she immediately started questioning her decision.

But here’s the other factor I pointed out: Tina and Sean bought a really old house. And while it’s awesome to look at, it’s in need of serious work. A lot of the lighting still needs to be replaced, which is probably a more complex job than expected. And the kitchen appliances could fail on them at any minute.

These, of course, are just the issues they know about. While they had a home inspection, those are rarely perfect. And besides, a given component of a home could be in fine shape at the time of an inspection and deteriorate a couple of years down the line.

I specifically advised Tina to stop making extra mortgage payments due to the age and condition of her home. If she needs to make repairs and has her cash tied up in her home, it’ll cost her more to pull it out right now, whether in the form of a cash-out refinance or home equity loan, because of how high borrowing rates are today. To put it another way, she shouldn’t put thousands of dollars extra into a mortgage charging her under 3% when it might easily cost her 7% to tap her home equity to make repairs.

Think carefully before making extra mortgage payments

It’s easy to see why the idea of making extra mortgage payments holds a lot of appeal. And if you’re ever in that position, that’s great! It means you’ve done an awesome job of budgeting out your expenses and leaving yourself with plenty of wiggle room.

But in some situations, paying off a mortgage early doesn’t make sense. So if you have a super-low rate on your mortgage and a home that’s likely to need extensive repairs, you may want to hang on to your cash — especially at a time when savings accounts are paying so generously.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2025

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