Money Management

Owning a small business is tough. Read on to learn about some accounting challenges small operations can face — and how to address them. [[{“value”:”

Running a small business isn’t easy. After all, you’re in charge of a lot of moving parts, and you may find that you’re in over your head when it comes to the money side of things. With that in mind, here are a few accounting challenges your business might face — and how to manage them.

1. Tax compliance

As a small business, the rules of paying taxes and reporting income may be different than they are for individual employees who work for themselves. To some degree, the way your business is structured might impact your tax obligations. But because small business taxes can be a complex topic, this is one area you definitely shouldn’t hesitate to get help in.

It’s a good idea to engage the services of an accounting professional or firm who can handle all tax-related matters for your company. An accountant can file your small business tax returns, set up estimated tax payments your company is required to make, and make sure you’re submitting the right reports as per your state’s specific requirements.

Of course, there are also certain tax deductions you may be eligible for as a small business owner. An accountant can help make certain you’re able to maximize those, too.

2. Managing payroll

Paying the people you employ may be a more complex process than simply writing monthly checks. There are taxes you need to pay and withhold and processes you need to follow, such as making sure you’re classifying different employees correctly.

The right payroll software could make your life easier. And if you have a smaller team, you may be able to manage payroll on your own with the help of the right program.

But if you have a larger staff, you may want to consider hiring a payroll administrator. That person may also be able to double as your company’s benefits coordinator, depending on the circumstances involved.

3. Ensuring adequate cash flow

Just as any individual could run into a string of unplanned expenses, so too could your business. You might land in a situation where you suddenly have to replace a bunch of equipment without warning, or you have to shell out money to cover an increase in rent. Throw in the fact that your company’s revenue might fluctuate from month to month, and you’ve got a tough ask on your hands.

One thing it pays to do is find accounting software that helps you manage your cash flow. At the same time, though, aim to build a small business emergency fund similar to the emergency fund you hopefully have for personal hiccups.

You may also want to hire an experienced in-house bookkeeper to manage your company’s financial accounts. If you have a small operation, you may be equipped to do this alone with the help of the right software. But if your role as a business owner has you running around a lot and leaves you little time for administrative work, then this is one important task it could pay to hire someone for.

One of the savviest moves you can make as a small business owner is seeking help when you realize you’re in over your head. So if any of these challenges seem like too much for you to handle on your own, don’t hesitate to find experts who can tackle them with relative ease.

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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.
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A business checking account could help you organize your finances, but it comes with some costs, too. Learn whether you should open one of these accounts. [[{“value”:”

Before you ask, yes, freelancers can open business checking accounts, even if they don’t have an employer verification number. That said, freelancers aren’t legally required to open a separate checking account designated for business expenses. In fact, for many, using a personal checking account might be sufficient, especially if freelancing is a side hustle and not a full-time venture.

But for those who are investing a lot of time into growing their freelance business, separating business income from personal expenses could be worthwhile down the road. If you’re not sure if opening a business checking account is right for you, let’s consider the perks and drawbacks.

Pro: Business checking accounts are “strictly business”

Perhaps the strongest argument for business checking accounts is the separation of personal and business transactions. Organizing your business income in one bank account can give you a clear picture of your business’s cash flow. This can help you visualize how much your business is spending and give you one central place to tally expenses for tax purposes.

Of course, as freelancers, we don’t usually have as many expenses as, say, the owner of a coffee shop. But this only adds to the argument that these accounts are useful. If your business expenses are variable, they can easily get lost in the bulk of personal expenses you’re already making. And unless you’re keeping track of them in some other way, like with a spreadsheet, you might forget about them come tax time.

Likewise, when you deposit all your business income into one account, you can better prepare for your quarterly taxes. Since the IRS isn’t withholding taxes from your pay, you have to deduct the appropriate amount yourself. Mixing this with your personal money can start to get confusing, not to mention tempt you to spend it. By keeping quarterly tax money in a business checking account, you can pay the IRS directly from that account.

Truthfully, I don’t keep quarterly tax money in my business checking account. Instead, I have a high-yield savings account that I save my tax money in each quarter. This money earns a little interest, helping me capitalize on the IRS’s cut before I pay it. While some small business accounts are interest-bearing, few can compete with the best free savings accounts.

Con: Fees, fees, fees

Business checking accounts can help you stay organized. But even if you get a free business checking account, you might eventually pay up thanks to all the extra fees.

This came as a surprise to me after I opened my first free business checking account. I was diligent in picking an account with no monthly maintenance fee, as I didn’t want the hassle of meeting requirements to waive one. Within one month of opening the account, however, I was hit with a $6 fee. When I looked into it, I saw this fee came from a mailed paper statement, which wasn’t something I really wanted. Later, I discovered a fee schedule with a slew of other hidden fees, like one to connect my account with QuickBooks and another for ACH transactions above a certain limit.

If you’re a freelancer who conducts a lot of bank transactions every month, you might also pay fees on transactions. Many business checking accounts come with a limit of free transactions, like 125, after which you’ll pay a small fee for each. Likewise, you might pay a fee for cash deposits above a certain limit.

These extra fees shouldn’t stop you from opening a business checking account. If anything, they should only make you more diligent in your research so you know about them and can choose an account that doesn’t charge a lot of them. After all, business checking accounts can really help you manage your business’s finances and prepare you for taxes.

Check out our list of top business checking accounts and see which could help you better organize your business.

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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.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool recommends Discover Financial Services and Flow. The Motley Fool has a disclosure policy.

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As a newlywed, you don’t want to let your new travel rewards go to waste. Avoid common pitfalls with our expert tips and make every point count. [[{“value”:”

Travel rewards can be a newlywed couple’s best friend, offering significant savings on everything from honeymoon flights to luxurious hotel stays. However, maximizing their value requires a bit of savvy. Many couples fall into some typical traps that can dilute the value of these precious points and miles we get from our credit cards. Let’s walk through these mistakes so you can steer clear and truly capitalize on your travel rewards.

Ignoring the fine print

As newlyweds, you might be eager to jump into your first big adventure together using those travel rewards you’ve been collecting. But did you know that about 31% of travel rewards never get used? A big reason for this is that many people aren’t fully aware of the conditions tied to their rewards. Aside from the well-known blackout dates — those pesky periods when you can’t use your points — there are often other restrictions that can trip you up.

For instance, some programs might only allow you to redeem your points on certain days of the week, or you may find that points can only be used toward specific types of travel expenses like flights or hotel rooms, but not for upgrades or car rentals. Plus, many people don’t realize that their rewards program might require bookings through a specific website or app to utilize points effectively. This restriction can be particularly frustrating if you find a better deal elsewhere but can’t use your points to make the purchase. Also, some miles earned with airline credit cards have expiration dates.

Newlywed tip: Take some time together to review your rewards program’s terms and conditions. Make it a fun planning session over coffee. Look out for details on redemption rules, eligible services, and required booking platforms. Knowing the ins and outs can help you avoid costly mistakes and maximize your rewards for that perfect getaway.

Overlooking transfer partners

Many travelers overlook a key feature of their rewards programs: the ability to transfer points to different airlines, hotels, or car rental services. This is not just a small perk; in many cases, transferring your travel credit card rewards points can significantly increase their value — sometimes by as much as 20% or more during promotional periods.

For newlyweds planning their dream honeymoon or anniversary trip, this can be a game-changer. For instance, if your credit card points are part of a larger network, you might be able to transfer them to an international airline where they could be worth more due to better redemption options or favorable conversion rates. What’s more, some programs offer occasional bonuses for transferring to specific partners. This can be a great opportunity to stretch your points even further, especially for that honeymoon.

For example, a one-way ticket in the QSuite on Qatar Airways can cost $6,000 or more. But, you could transfer your Chase Ultimate Rewards to either Qatar Airways Privilege Club or British Airways at a 1:1 transfer rate and use about 80,000 points. And 80,000 British Airways Avios are worth about $800. So, that’s a significant discount.

Newlywed tip: Regularly check your rewards program for updates on transfer partners and the current ratios. Keeping an eye on these options can dramatically increase the flexibility and potential value of your points, potentially opening up new and better travel opportunities that you might have missed otherwise.

Misjudging the value of points

As newlyweds, you might be balancing the excitement of new experiences with the practicalities of budgeting. A common dilemma in the world of travel rewards is figuring out when to use your points. We either hoard them, hoping for the perfect redemption opportunity that may never arrive, or spend them impulsively on low-value options. It’s crucial to understand that the value of travel points is highly variable: they can be worth as little as less than $0.01 each or as much as over $0.05, depending on how and where they are used.

For example, using points for a last-minute flight or during peak travel times can often yield a higher value per point compared to other options, like purchasing merchandise or services. On the other hand, some high-value redemptions might require more planning and flexibility in travel dates. So, if you can be flexible on that honeymoon or anniversary trip, your points could stretch much further.

Newlywed tip: Stay informed about the current value of your points in different redemption scenarios. Use online calculators and comparison tools, and follow travel reward blogs that analyze point valuations regularly. Knowing whether it’s better to use points or cash for each transaction will help you make the most educated decisions, ensuring you maximize the benefits of every point you’ve earned.

Not meeting the minimum spend requirement

Many travel rewards cards come with hefty sign-up bonuses, but these often require you to meet a minimum spend within the first few months. As newlyweds, you might be juggling wedding expenses, setting up your home, and planning your travels. Missing this window is a costly mistake. Plan your spending strategically to ensure you hit that target. Think about upcoming expenses, like wedding-related costs, home improvements, or even pre-paying some bills, to help meet the requirement.

Newlywed tip: If you’re planning large purchases, time them to align with your card’s sign-up period. This will help you meet the spending requirement without going over your budget. Consider combining your spending efforts as a couple to hit those targets faster.

Travel rewards can be your ticket to cheaper, more exciting trips, but only if you use them right. By sidestepping these common missteps and keeping informed, you’re all set to make every point count toward your next big adventure.

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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.JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.

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Mortgage rates have held steady at higher levels for a reason. But there may be relief in sight. Here’s what you need to know. [[{“value”:”

The average 30-year mortgage rate as of this writing is 7.09%, reports Freddie Mac. And that wouldn’t be so terrible if it weren’t for the fact that home prices are elevated due to a glaring lack of inventory.

The combination of higher mortgage costs and home prices is keeping a lot of would-be buyers on the sidelines these days. But why is it that mortgage rates are stuck at such high levels? And what’s it going to take for them to come down?

Today’s rates aren’t actually that bad

The mortgage rates buyers are seeing today might seem pretty terrible. But historically speaking, a 30-year mortgage at just over 7% isn’t so bad — not when you compare that rate to the 17% and 18% rates mortgages borrowers were looking at in the early 1980s.

Rather, the reason 7% mortgages are looking so awful today is twofold. First, it’s that today’s rates are coming at a time when home prices are up. To put it another way, borrowers may have been looking at higher mortgage rates in the 1980s, but home prices were notably cheaper.

Secondly, what adds to the rub for home buyers today is that just a few years ago, it was possible to sign a 30-year mortgage at around 3%. The problem is that mortgage rates began climbing in 2022 and did so to a pretty extreme degree in short order.

In December 2021, it was still possible to get a 30-year loan at around the 3% mark. By December 2022, that same loan was averaging over 6%.

Broad rate cuts could lead to relief for mortgage borrowers

A big part of the reason mortgage rates are so elevated right now is because borrowing is more costly in general following a string of interest rate hikes from the Federal Reserve that took place in 2022 and 2023. Once the Fed starts to cut interest rates, mortgage rates will likely follow suit to some degree.

And there’s some good news — the Fed has signaled that it’s looking to cut rates starting in 2024. We don’t know exactly when the central bank will implement its first rate cut. But from there, the average 30-year mortgage rate might slip below 7% and keep going in that direction.

How to save on a mortgage

While mortgage rates have been stuck at high levels in the absence of broad rate cuts, things could be changing for the better soon. But if you want to lock in the lowest mortgage rate possible, no matter when you’re buying and what rates look like in general, it pays to:

Shop around with different mortgage lenders and compare offersBoost your credit score, whether by paying down credit card debt or correcting credit report errorsKeep your debts on the low side relative to your income

In time, mortgage rates should start to slide downward. From there, homeownership may become more affordable for a lot of people. But taking the above steps could result in big savings for you even once mortgage rates start to come down in general.

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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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Not sure which Costco membership is right for you? There’s one simple number you need to know. Find out what it is here. [[{“value”:”

If you’re like me, you’re often wary of upgrading to the so-called “better version” of any given item. Case in point: I pretty much never fly business class because I’m not convinced I’ll get such a better experience than I will in economy — so why put the higher charge on my credit card? I mean, a plane ride’s a plane ride, right? And let’s face it — you’re going to have to deal with turbulence whether you’re sitting packed like a sardine or in a seat with extra leg room.

Similarly, when I was first approached by a customer service representative at Costco about upgrading my Gold Star (basic) membership to an Executive one, I hesitated. Actually, scratch that. I didn’t hesitate — I said no.

But then I ran the numbers and realized that an Executive membership absolutely made sense for me. That was about 10 years ago, and I’ve been an Executive member since. And if you’re not sure an Executive membership upgrade is necessary for you, you can use the same easy formula I did to see if it makes financial sense.

The benefit of upgrading

A Gold Star membership at Costco costs $60 a year, whereas you’ll pay $120 a year for the Executive version. It used to be that Executive members got to shop at Costco earlier than basic members, and that perk, to me, was huge. Unfortunately, it no longer exists. But the primary benefit of an Executive membership is still very much in play, and it’s getting 2% cash back on your Costco purchases.

Granted, there are a few exceptions, like gas and food court purchases. Sorry — your $1.50 hot dog and soda combo won’t put $0.03 back in your pocket each time.

But most Costco purchases will, whether it’s furniture, electronics, or travel. So the amount of extra cash you pocket in the course of a year could more than make up for your $60 Executive membership upgrade fee.

The simple formula that helped me decide which membership to get

When I was deciding whether to keep my basic Costco membership or pay for an upgrade, I figured out how much annual spending it would take for me to break even on my upgrade cost, and then determined if I was likely to exceed that threshold. If so, the upgrade made sense.

The cost of an Executive membership upgrade is $60. If you spend $3,000 a year at Costco, you get your $60 back, since basic math tells us that 2% of $3,000 equals $60.

If you expect to spend $3,001 at Costco or more in a year, bam — the upgrade makes sense because you’ll get paid back. If you’ve been a Costco member for seven years, have no changes to your household situation, and have never spent more than $1,500 at the store over a 12-month period, then hold off on upgrading.

It really is that simple.

If you’re on the fence, get the upgrade

If you’re not sure if you’ll spend $3,001 or more in a year at Costco, here’s what you should do: Upgrade your membership, but know in the back of your mind that you can always downgrade.

See, one lesser-known Costco perk is that if you decide to revert to a basic membership from the Executive tier because the latter didn’t work out, Costco will make you whole if you don’t manage to accrue $60 in cash back. Yes, really. Costco is just that good about customer service.

So let’s say you pay $60 to upgrade your membership and only spend $2,400 at Costco in the coming 12 months. That puts just $48 in your pocket at 2% back, so you’ve lost out. Only you haven’t, because if you tell Costco you want to go back to a basic membership, it’ll also refund you $12 so you’re not actually out any money.

Because of this, the only reason not to upgrade your membership at Costco is if you’re absolutely sure you won’t spend enough to make back the extra $60. If you’re on the fence, take the leap. There’s really nothing to lose.

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.Maurie Backman 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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Buying electronics at Costco could do more than save you money. Read on to see why Costco’s a great source for products like laptops, TVs, and more. [[{“value”:”

Many people join Costco primarily to purchase items like groceries and household essentials in bulk at a discount. So you may not think to turn to Costco for electronics purchases. But actually, Costco is a great place to buy your next laptop, gaming monitor, or TV. Here’s why.

1. You can snag a really great deal when there’s a sale

Costco is known for its generally low prices. But at different points during the year, you can snag additional discounts on electronics, leading to even more savings. Right now, for example, Costco is offering $100 off of an HP Pavilion 16″ Touchscreen Laptop. You can also score $150 off an HP x360 14″ Touchscreen 2-in-1 Chromebook. Not only does Costco tend to carry an extensive selection of electronics in stores, but you can browse online for even more offerings.

2. You’ll get an extended warranty at no extra cost

Electronics purchased at Costco come with a second-year warranty at no extra charge. That’s a big deal because electronics aren’t an everyday purchase. And when you buy them, you want to make sure you’re getting good value for your money. Thanks to Costco’s warranty policy, you’ll have reassurance that your purchases will last you at least 24 months before needing to be replaced.

3. You’ll get free tech support

Some of us are admittedly less tech-savvy than our peers. If you tend to struggle with setting up a new TV or laptop, Costco’s got you covered with free tech support. Now you won’t need to place a call to your condescending brother-in-law and have him walk you through the motions of getting your devices set up. You can instead work with a professional who won’t make snide comments about your technological shortcomings.

4. You’ll get 90 days to take your purchase back for a full refund

You might bring home a laptop or TV thinking it’s the right model for you, only to have an issue arise a few weeks after the fact. The good news is that Costco gives you a full 90 days to return electronics for a full refund. This provides you with ample time to try things out and make sure your purchases meet your expectations and are the right fit for your needs.

5. You’ll get cash back on your purchase as an executive member

An Executive membership at Costco costs twice as much as a basic one — $120 vs. $60. But in exchange for the higher annual fee, the executive membership gives you 2% cash back on your Costco purchases, electronics included. So let’s say you decide to purchase a $1,200 TV at Costco. With your executive membership, you’re getting $24 back right off the bat, plus whatever other cash back or points your credit card might offer you.

You have plenty of choices when it comes to buying electronics, whether it’s Walmart, Amazon, Best Buy, or a local store in your neighborhood. But it pays to consider making your next big purchase at Costco for the numerous benefits involved.

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.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Maurie Backman has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Best Buy, Costco Wholesale, and Walmart. The Motley Fool has a disclosure policy.

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