Here’s where Americans can make their dreams of homeownership come true. MDV Edwards / Shutterstock.com
The American dream of homeownership often begins with a starter home — a manageable property that allows young adults and families to establish roots, build equity, and lay the groundwork for financial security. This initial step on the property ladder fuels the housing market and strengthens the economy by creating a generation of invested homeowners. However, finding an affordable starter…
An extra $1,000 can do a lot of financial good. Read on to learn how to use it to improve your finances. [[{“value”:”
Image source: Getty Images
Whether it’s from a recent bonus, a gift, or an increase in your earnings, if you find yourself with an extra lump sum of cash, you might be wondering where to put it.
The good news is that there are many ways to put $1,000 to work for you. Here are five excellent ways to use the money to boost your budget.
Credit card debt has soared over the past couple of years, partially due to inflation, which has caused the price of nearly everything to rise. Americans now owe a record $1.1 trillion in credit card debt, with the average American owing about $6,501.
Suppose you have $1,000 in credit card debt and pay the average annual percentage rate (APR) of 24.6%. If you make a minimum monthly payment of $50, it will take you two years to pay off your balance, and you’ll pay about $290 in interest.
RELATED: Credit Card Interest Calculator
But putting that $1,000 toward your credit card balance would help you quickly pay off the debt and save you hundreds of dollars.
Using $1,000 to buy stocks may not seem like enough money to invest, but it could grow larger than you expect, given enough time.
Let’s assume you put $1,000 into a brokerage account and buy a low-cost index fund that earns the historic average annual rate of return of 10%. In 15 years, that $1,000 could be worth about $4,177. That’s not a life-changing sum, but it’s still more than four times the original amount!
About 44% of American households don’t have enough money to cover a $1,000 unexpected expense. Putting your $1,000 into a high-yield savings account is a smart move if you’re in the same boat.
Emergency funds can help you cover the cost of a house or car repair, keeping you from reaching for a credit card. And with some savings accounts paying 5% annual interest right now, your $1,000 could turn into $1,051.16 after 12 months.
If your employer offers a 401(k) plan, adding an extra $1,000 could do a lot of good for your retirement. And that money will go even further if your company has a matching plan.
Let’s assume your employer matches 50% of your contributions, up to 5% of your salary. If you haven’t reached the contribution limit yet, your employer would match your $1,000 contribution with a $500 contribution to your 401(k), giving you $1,500.
If you already had $10,000 in your retirement plan, added the $1,500 contribution, and earned the historic annual rate of return of 10%, you’ll have $77,366 after 20 years. In contrast, if you didn’t add the $1,500, you would have $67,275 — more than $10,000 less!
Another option for your money is to put it into a certificate of deposit (CD). CD rates are favorable right now, with many paying 5% or higher.
CDs have guaranteed rates of return as long as you don’t withdraw money early, and they are FDIC insured. This makes them a great place for investors looking for a low-risk way to grow their money. You could put your $1,000 into a 12-month CD paying 5% and earn about $50 interest, helping your cash outpace inflation’s effects.
An extra $1,000 can do a lot of good for your finances if you know where to put it. The good news is that whether you’re paying off debt, investing your money, or starting an emergency fund, there’s really no wrong way to use your extra cash.
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Freelance businesses need tools to create more financial stability. Read on to discover the three tools you should consider to streamline your business. [[{“value”:”
Image source: Getty Images
When I was laid off from my first post-grad job almost a decade ago, I saw it as an opportunity to do what I actually wanted to do: Start a freelance business. Unfortunately, I had no idea what that actually entailed. So I fell into the trap of doing almost everything in the most difficult way possible. I just didn’t know any better — let alone where to look for the tools that I’ve now come to use regularly to operate my business efficiently.
To get your business on track faster, here are three tools that can help you save time and money as a freelancer.
There’s a myth that a business checking account is only meant for small business owners who have expenses. At least, that’s what I thought when I started my freelance writing business, which only required a computer and internet connection. And while tracking business expenses can be one use for these accounts, there is another reason to get one, even if your business is exclusively online: Stabilizing your income.
The financial ups and downs of the freelancer lifestyle can be tough to navigate, especially if you’re new to this style of business. Getting a business checking account with your bank can provide you with the stability of getting a regular paycheck. All you have to do is set up automatic transfers from your business account to your personal checking account. In effect, you pay yourself a salary. That’ll help you live within your means, save money, and stick to a realistic budget.
Bonus: Depending on the account you choose, you may also have access to tools that can help you analyze your business’ cash flow, project your earnings, and track your business credit score.
It seems like every finance-related site wants you to connect your accounts to its platform these days. But having a reliable accounting service that tracks not only your income and expenses, but also provides you with estimated tax payment amounts for each quarter, is a must-have. Even if it prompts yet another series of connection requests. After all, if you miscalculate on your tax payments, you could be left with a hefty bill come April.
For example, if you were to end up owing $5,000 in taxes and you couldn’t pay that off before the tax deadline, you’d also have to pay interest on that amount. The rate could be up to 25%, or $1,250, depending on your situation.
You’ll want to look at the cost of various online accounting options (this may require a monthly or annual subscription). Beyond that, you’ll need to make sure that you’re getting the value you need out of accounting software, and not paying for things you won’t need. For example, some options may provide extra perks, like an app, access to tax professionals, or even a dedicated tax advisor. Make sure the one you choose offers the best combination of perks and affordability.
This may not seem like something you need if you tend to work with established clients that have their own onboarding processes. But having this set up before you need it will be a huge boon to your business. Not only will it give you the opportunity to collect vital information you need to get paid, but it will also allow you to:
Accept credit card paymentsComply with data privacy requirementsUse a contract that protects your businessCross-sell other products or servicesGet access to vital information to work more efficiently with a particular client via questionnaires
If you can, set up automatic cash transfers from your onboarding system to a separate account for tax payments, based on your online bookkeeping service’s estimates. That way, you can minimize the sting of tax payments since that cash never touches an account you draw from for everyday expenses. Of course, if you have more complicated taxes, you may still need to talk to a tax professional to best understand how to handle things. Regardless, an onboarding system is a vital part of any freelance business.
Running a small business is tough, especially if that’s your only source of income. But if you can take advantage of the business tools that are designed for freelancers, you’ll be able to stabilize and demystify your finances, and set yourself up for an even more successful future.
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.
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Want to reduce your Walmart spending? Read on to see how. [[{“value”:”
Image source: The Motley Fool/Upsplash
There’s a reason Walmart has long been a popular choice for consumers. Walmart is known for its vast inventory and everyday low prices. If you’re on a tight budget, Walmart could help you stretch it.
Still, there are steps you can take to save money during your Walmart shopping. Here are three ways to spend less this year.
When you have a store with inventory that’s as extensive as Walmart’s, it can be easy to fall victim to unplanned purchases. That’s why it could pay to do more of your Walmart shopping online.
When you run into the store to buy a few household items, you can’t help but pass by aisles that are loaded with merchandise you may find appealing. But if you go online, enter a few specific items into a search bar, and then check out right away without browsing the site, you might manage to avoid impulse buys that cause you to rack up a larger credit card tab.
Although shopping at Walmart.com can be a great way to avoid impulse purchases, it can also result in shipping charges if you don’t meet a $35 order minimum. But a good way to avoid having to pay for shipping is to plan out your online purchases strategically and bundle them.
Let’s say you normally buy paper towels and a few specific toiletry items from Walmart every month. If the total cost of those items is only $30, you’re going to get stuck paying for shipping, which negates a lot of your savings. But if you buy two months’ worth of those products at a time, you’ll be spending $60, which gets you over that threshold.
Now, you may need to make some changes to your budget to make it possible to cover two months’ worth of Walmart products instead of a single month at a time. But it’s worth making that effort if it’s doable to reap the savings.
Signing up for Walmart+ could result in savings on your Walmart purchases throughout the year. The annual cost of a membership is $98. But you might easily make your money back if you shop at Walmart frequently.
Walmart says on its site that a Walmart+ membership can save customers $1,300 a year. The amount of savings you’ll get will hinge on how often you use the service and what your specific purchases entail.
But as an example, with Walmart+, you’re eligible for free grocery delivery with a $35 order minimum. If buying groceries in person every week usually leads to at least one $5 impulse buy, you’ll spend roughly an extra $250 per year. Spending $98 to keep yourself out of the store could make sense, as you’re still about $150 ahead.
You also get free shipping on Walmart.com orders with no minimum when you join Walmart+. That could prevent you from feeling compelled to buy extra items to meet the $35 minimum for free shipping without a Walmart+ membership.
Also, Walmart+ members get early access to special product releases and online Black Friday deals. And we all know how quickly those Black Friday specials tend to sell out. So that alone could result in big savings.
Even though Walmart typically offers competitive prices, it still pays to do what you can to save beyond those everyday deals. Use these tips to lower your Walmart spending — and bank more cash.
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.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walmart. The Motley Fool has a disclosure policy.
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Cash back credit cards are popular with parents. Watch out for these costly errors that could end up cutting into the cash back you earn. [[{“value”:”
Image source: Getty Images
When you become a parent, you have a lot of new expenses to cover. Diapers, formula, toys, child care, and those are just a few examples. A cash back card is a good way to get some money back on all those expenses — as well as your other everyday bills.
For the most part, cash back credit cards are easy to use. When you pay for purchases with them, you earn cash back on what you buy, and you can redeem it later. But there are a few cash back mistakes that could end up costing you.
Featured offer: save money while you pay off debt with one of these top-rated balance transfer credit cards
I realize that for parents, free time is at a premium. You probably want to spend it doing something fun or relaxing. Researching credit cards may not exactly fit into either of those categories.
But if you have a run-of-the-mill cash back card that doesn’t earn much back, you should absolutely look at other options. The Motley Fool’s Ascent’s list of the best cash back credit cards contains cards that earn as much as 6% back in bonus categories or a flat rate of 2% on purchases.
Let’s say you spend $40,000 on your credit card every year. Your current card earns 1% back. If you replace it with a card that earns 2%, you’d go from $400 to $800 in yearly cash back.
One of the biggest risks with rewards credit cards is that they convince you to spend more. It’s already hard enough to keep your spending in check when there’s something you (or your kids) really want to buy.
Some parents fall into the trap of letting cash back be the tiebreaker. You know you shouldn’t spend $500 on those clothes that caught your eye or that video game system your kids want. But hey, you’re getting 2% or 3% cash back. That’s a point in favor of buying it, right?
On a $500 purchase, 2% to 3% is $10 to $15. That’s not bad, but it’s not exactly justification to spend that much money, either. You still end up costing yourself $485 to $490 more than if you hadn’t made that purchase. It’s important to stick to a spending plan, regardless of how much you’re earning in cash back.
Parents sometimes look at their cash back cards as financing tools. If you can’t pay off your balance, no big deal. Just pay what you can and carry the rest of the balance over to the next month.
This isn’t a great way to use cash back cards — or most credit cards, for that matter. When you carry a balance, the card issuer charges you interest. Interest rates are extremely high right now. The average credit card rate is 21.59%, the highest rate on record since the Federal Reserve started tracking this back in 1994.
Interest charges will likely cost you more than you make in cash back. The only way to come out ahead with cash back cards is to pay your bill in full every month. If you have any large expenses you can’t pay in full, such as home renovations, you’re better off using 0% intro APR credit cards. These give you some time to pay off purchases interest-free.
It doesn’t take too much time or effort to make money with cash back cards. Make sure you’re using a quality card with a competitive cash back rate. Follow a spending plan so you aren’t tempted to spend more because you’re earning cash back. And pay off your card’s balance every month by the due date, so you don’t get stuck with any interest charges.
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.
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Feeling iffy about your finances? You’re not alone. Take a look at how to get to a better place. [[{“value”:”
Image source: Getty Images
It’s natural to worry about financial matters from time to time — we all do it. But it’s another thing to be constantly plagued with feelings of financial insecurity. And if you’re in the latter category, it’s really important that you try to break that cycle.
Only 64% of women today feel financially secure, according to a survey from Allianz Life of respondents with an annual household income of $30,000 or more. So basic math tells us that more than one-third (36%) of women today feel insecure about financial matters, and that’s not a good thing. If you’re feeling shaky about your finances, here are some steps to take to get to a better place.
An estimated 63% of Americans don’t have the money in a savings account to cover a $500 emergency expense, according to a survey done last year by SecureSave. So if you’re sitting on almost no money in the bank for surprise bills, you’re certainly not alone.
But a big reason for your financial insecurity may be that you know you’re just one unexpected expense away from landing in credit card debt. So do your best in the coming months to build up an emergency fund.
In time, you should aim for enough savings to cover three full months of essential living expenses (or more, if you’re able and so inclined). For now, try to save something each month so you have a modest cushion by the end of the year. If you can bank $63 a month starting now, that gives you a $500 safety net by the close of 2024, which is far better than a safety net of $0.
If you’re not the highest wage earner, you may need to turn to the gig economy to drum up extra cash. But going this route could make it so you’re able to save well more than $63 a month.
You may be feeling like you’ll never end up in a position where you can retire. A lot of people feel that way. And it could stem from the fact that the average American only has $88,400 set aside for their senior years, according to Northwestern Mutual, when many people feel like it’ll take $1.46 million to retire in a comfortable manner.
But don’t stress if you haven’t started saving for retirement yet. Instead, start right now.
Take a look at your budget and see how much money is feasible to set aside for retirement savings. It can be $20 a month for now if that’s all you can swing. It’s much better than saving nothing.
From there, set up automatic contributions to an individual retirement account (IRA) or sign up to participate in your workplace’s 401(k) if that option is available to you. By setting up automatic transfers, you’re more likely to stay on track with funding your nest egg from this point onward.
In 2022, female workers earned an average of 82% of what comparably employed men earned, according to a Pew Research Center analysis. If you’re feeling financially insecure, part of that could stem from the fact that you aren’t being paid enough to do more than cover your basic bills. And that’s something you should absolutely speak up about.
First, research wage data in your area so you know what people with your skills and job title are making (sites like Glassdoor are a resource here). Next, schedule a meeting with your supervisor where you can present your data and show that you’re statistically underpaid.
Alongside that, prepare some talking points to make the case that you deserve at least the average wage for people in your position. If your keen eye spared your company a number of errors last year that saved it money, highlight the amount of savings your efforts resulted in. If you’re a customer service representative with a record of great feedback, point out that your ratings are top notch.
It’s absolutely appropriate to talk up your accomplishments when you’re fighting to be paid fairly. And the more you earn, the easier it becomes to save for emergencies and your future.
It’s a hard thing to walk around feeling bad about the state of your finances. If that’s the case, don’t let that continue. Instead, take these steps to improve your outlook — and get more peace of mind.
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.
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