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A cautionary tale on inherited retirement accounts and outdated beneficiary forms Jeffrey Rolison and Margaret Sjostedt dated in the 1980s, and now, nearly 40 years after their breakup, she could inherit his $1 million retirement account. According to reporting from the Wall Street Journal, this potential inheritance stems from Rolison naming Sjostedt as the sole beneficiary of his workplace retirement account on a handwritten form in 1987. He never updated the beneficiary designation, and following his death in 2015, she remains listed as the beneficiary. However, Rolison’s brothers are contesting Sjostedt's claim to the money. They were surprised to learn, just weeks after his death, that she was the beneficiary, as conveyed by their estate lawyer. “We were shocked,” said Brian Rolison, one of the brothers and a mechanic. The brothers have been in a legal battle against Rolison’s former employer, Procter & Gamble, trying to prevent the payout to Sjostedt, now known as Margaret Losinger. This dispute highlights the critical importance of beneficiary forms for retirement accounts, life insurance policies, and bank accounts. Often, these forms can override a will, even if they were completed decades earlier. Retirement account distributions after death As Americans accumulate significant retirement assets, disputes over these accounts are increasingly common, according to legal experts. Beneficiary forms are frequently lost, outdated, or incomplete, leading to unexpected outcomes for both beneficiaries and families. Federal law mandates that employers generally distribute retirement accounts to the last recorded beneficiary or to a surviving spouse if no waiver is in place. This could mean a name listed on a decades-old form, as in Rolison's case, or a name entered in an online system. Some employer plans, including Procter & Gamble’s, have not yet integrated old paper forms into their digital records, adding further complexity to the situation. “Inertia has the upper hand,” noted Norman Stein, a law professor at Drexel University and senior policy adviser at the Pension Rights Center, told the Wall Street Journal. How a decades old ex-girlfriend ended up with an inheritance According to court documents, Rolison met Losinger, who goes by Peggy, at a park where they were playing Frisbee, and the two began dating in their early 20s. Later, they moved to Sullivan County, Pennsylvania, where she worked as a waitress, and he took a job at a Procter & Gamble plant that produces Pampers diapers and Bounty paper towels. In 1987, a year after starting his job, Rolison enrolled in the Procter & Gamble profit-sharing and savings plans and filled out a beneficiary card, naming Peggy as his cohabitor. Peggy moved out two years later, married someone else the following year, and had two children, according to court documents. Then in 2015, when Rolison passed away, his retirement plan conducted an investigation to identify the beneficiary on various accounts. In Rolison's case, Procter & Gamble (P&G) faced three potential claims to his retirement funds. Losinger, along with Rolison's brothers, each argued that they were entitled to the balance. P&G also included Mary Lou Murray, Rolison’s longtime partner and co-worker, as a potential claimant under common-law spouse rights. In 2020, a federal court directed P&G to award the funds to Losinger. However, the money was placed in escrow while the brothers pursued legal claims against both P&G and Losinger. In 2021, the court ruled that Murray was not entitled to the funds as a spouse. The brothers contended that P&G breached its fiduciary duty by failing to adequately inform Rolison about his beneficiary designation. P&G argued that it had provided warnings during service provider transitions, on its website, and in Rolison's monthly statements, which included notices such as: “You don’t have any beneficiary designations online. Any prior beneficiary designations on file with the Plan will be retained by P&G, but are not viewable on this site.” The estate claimed that these standard notices were insufficient. Even if Rolison had seen the messages, the brothers argued that he might have reasonably assumed he had no beneficiaries on record, meaning default rules would apply, and the funds would go to his estate. Rolison had previously named his mother and Murray as beneficiaries of his workplace life insurance benefits, later listing only Murray after his mother's death. When Murray moved out, he removed her as well. With no named beneficiary, the life insurance proceeds went to his estate. The brothers believe this is what Rolison intended for his retirement funds as well. To cover funeral expenses, Brian and Rick sold Rolison’s BMWs, while his two cats were given to their twin nieces. Murray received a small investment account that had her name on it. The brothers split the workplace life insurance proceeds and the house. Meanwhile, Rolison’s P&G retirement savings remain in money-market funds, awaiting final distribution. A cautionary tale on outdated forms Regularly reviewing your account beneficiaries should be an essential part of your financial and estate planning. However, certain life events and changes in your accounts require immediate attention. Events like marriage, divorce, the birth of a child or grandchild, or the loss of a spouse or child can all necessitate updates to your beneficiary designations. Keeping these up to date ensures that your assets are directed to the intended recipients and that no one important is unintentionally left out. Additionally, whenever you close an account and transfer your money to a new one, it’s crucial to designate your beneficiaries again. For instance, if you’ve recently rolled over a 401(k) from a previous employer or moved an existing IRA to a new financial institution, your beneficiary designations won’t automatically transfer with your assets. Fortunately, updating your beneficiaries is often straightforward and can typically be done online or by filling out a form. If you’re unsure about how to designate your beneficiaries, consulting with an attorney or estate planner can help ensure your final wishes are honored.

These money-saving tips can help you build a nest egg During the COVID-19 pandemic, Americans experienced an increase in their savings thanks to stimulus checks and stay-at-home orders. However, many have since reduced their savings contributions, with the personal saving rate dropping to 3.5% in March 2024 compared to 26.1% three years earlier. Saving money requires both time and discipline, which can be particularly challenging amidst competing financial obligations or unforeseen expenses. Other factors such as the escalating cost of living and steep interest rates on debts also affect your ability to save. With inflation rates remaining persistently high and costs on the rise, saving money today presents greater difficulties than it did recently. Nevertheless, we can always reassess our current spending habits and find ways to cut expenses; and allocate more towards their savings accounts. How to Save Money on Groceries According to the most recent Consumer Expenditure Survey by the Bureau of Labor Statistics, spending on groceries rose by 8.4% in 2022. On average, Americans spend approximately $5,703 annually on food at home, which translates to nearly $500 per month. While food is a necessity, there are effective strategies to reduce grocery expenses: 1. Plan before you shop: Before heading to the grocery store, assess what you already have in your kitchen and create a list of essential items. This prevents impulse buys and ensures you don’t purchase unnecessary duplicates. 2. Opt for generic brands: Store brands typically offer comparable quality at a lower cost compared to name-brand products. You can save between 25% to 30% per item by choosing generic alternatives. 3. Buy in bulk wisely: Purchasing larger quantities can be cost-effective for families, but it's crucial to calculate the price per unit to ensure savings. Consider the shelf life of bulk items to avoid wastage. 4. Use a rewards credit card: Many rewards credit cards provide cash back and bonuses for supermarket purchases. Using one for necessary grocery expenses can further reduce costs, provided you pay off the balance in full each month to avoid interest charges. 5. Buy seasonal produce: Purchase fruits and vegetables that are in season, as they are typically fresher and less expensive than out-of-season produce. How to Save Money on Your Mortgage According to the National Association of Realtors (NAR), the median mortgage payment for Q2 of 2023 was $2,051 for a single-family home, making it a substantial monthly expense for many Americans. Here are strategies to reduce your mortgage costs: 6. Buy down your mortgage rate: Consider paying extra upfront at closing to lower your mortgage interest rate. Calculate the potential savings over the life of the loan to ensure it’s financially beneficial. While this may not be advantageous if you plan to sell soon, reducing your interest rate by just 1% on a long-term home can lead to significant savings. 7. Make an extra payment each year: Switch to bi-weekly payments or make an additional payment annually by dividing your monthly payment in half. This approach accelerates equity build-up and reduces your principal faster, ultimately cutting down the total interest paid over the loan term. 8. Refinance your mortgage: Explore refinancing options to secure a lower interest rate. This can decrease your monthly payments and result in substantial long-term savings on interest costs. Ensure to compare potential savings against any associated closing costs or extended loan terms. How to Save Money on Electricity and Utility Bills Utility expenses can unexpectedly rise, especially during extreme temperatures in summer and winter. However, you can effectively manage your energy costs with these strategies: 9. Reduce your usage: Cut down on energy consumption by taking shorter showers, using warm or cold water when possible, and unplugging electronics when they're not in use. These simple habits can significantly lower your monthly utility bills. 10. Repair leaks: Addressing leaks in pipes and sealing cracks in windows and door frames helps conserve water and reduces the energy needed to maintain indoor temperatures. Proper insulation and sealing can lead to noticeable savings on your utility bills. 11. Invest in energy-efficient appliances: Upgrade to energy-efficient appliances to decrease your carbon footprint and reduce energy expenses over time. While these appliances may have higher initial costs, they typically consume less energy and may qualify you for rebates or tax incentives, providing long-term financial benefits. How to Save Money on Rent According to Apartments.com, the average monthly rent for a one-bedroom apartment is $1,534. However, residents in busy metropolitan areas face even higher costs. For instance, average rents are $2,569 in New York, $2,481 in Massachusetts, and $2,117 in California. High rental expenses not only strain budgets but also hinder saving and investing for the future. Here are strategies to potentially lower your monthly rent: 12. Sign a longer lease: Landlords prefer stable tenancies to minimize vacancy periods. Consider signing a longer lease—beyond the standard 12 months—to negotiate lower monthly rent in exchange for guaranteed rental income over an extended period. 13. Negotiate with your landlord: Initiate an open discussion with your landlord, emphasizing your track record of timely payments and stable income. Landlords may be willing to adjust rent prices, especially if it helps retain a reliable tenant. 14. Get a roommate: Sharing your living space with a roommate can significantly reduce rental costs. Before doing so, ensure it aligns with your rental agreement and consult with your landlord. 15. Consider a different location: Explore neighborhoods with lower rental prices. Moving to a more affordable area can substantially decrease your monthly rent without compromising on living quality. Additionally, relocating to regions with lower sales taxes or no income taxes could further enhance your savings. How to Save Money on Transportation Transportation costs, including car payments, insurance, fuel, and maintenance, can add up significantly. According to the American Automobile Association (AAA), the average annual cost of owning a new vehicle driven 15,000 miles per year rose to $12,182 in 2023, up from $10,728 the previous year. Here are effective strategies to reduce transportation expenses: 16. Choose alternative transportation: Consider walking, biking, skateboarding, or rollerblading for short trips instead of driving. Not only will you save money on fuel and maintenance, but you'll also potentially improve your health. 17. Use public transportation: If available, utilize local buses or subways, which can be more cost-effective than driving. Some employers may offer subsidies or discounts for commuting expenses. 18. Carpool whenever possible: Share rides with friends or coworkers heading in the same direction to split fuel costs and reduce wear on your vehicle. 19. Utilize fuel-saving apps: Apps like GasBuddy and Waze can help you find the cheapest fuel prices nearby, saving you money every time you fill up. 20. Avoid high-cost ridesharing trips: Convenience always costs more. Avoiding ridesharing trips can significantly save you money by eliminating the costs associated with frequent use of these services, such as surge pricing and fees. How to Save Money on Insurance Insurance premiums can be a significant expense, but there are ways to lower costs: 21. Bundle policies: Many insurers offer discounts for bundling multiple policies, such as auto and home insurance. 22. Explore discounts: Inquire about discounts for safe driving records or additional safety features on your vehicle. 23. Compare quotes: Shop around and compare quotes from different insurers to find the best coverage at the lowest rates. Consider revisiting this comparison periodically to ensure you're still getting the best deal. How to Save Money on College Expenses College costs continue to rise, but you can mitigate expenses with these strategies: 24. Apply for scholarships: Research and apply for scholarships based on merit, need, or specific criteria related to your background or interests. 25. Consider public or community colleges: Opting for a public university or community college can offer substantial savings compared to private institutions. 26. Explore commuting options: If feasible, commute to campus instead of living on-campus to save on housing and meal plan expenses. 27. Utilize student discounts: Take advantage of discounts offered to students on various goods and services to reduce everyday expenses. 28. Enroll in work-study programs: Take advantage of work-study programs offered by many colleges, which allow you to work part-time while attending school, earning money to offset tuition and other expenses. 29. Rent or buy used textbooks: Save on textbooks by renting them, buying used copies, or using digital versions. Some courses may also provide free online resources. How to Save Money on Travel Travel expenses can be managed effectively with these tips: 30. Use travel rewards credit cards: Earn points or miles for travel expenses by using a travel rewards credit card for everyday purchases. Be sure to pay off your balance monthly to avoid interest charges. 31. Travel in the off-season: Plan trips during off-peak times to take advantage of lower airfare and accommodation rates. 32. Book in advance: Secure lower rates on flights and accommodations by booking well in advance of your travel dates. 33. Use fare comparison tools: Utilize travel comparison websites and apps to find the best deals on flights, hotels, and rental cars. Set up price alerts to monitor fare drops. 34. Opt for budget airlines and accommodations: Choose budget airlines and consider staying in hostels, guesthouses, or vacation rentals instead of traditional hotels to save on lodging. 35. Use public transportation: Instead of taxis or rental cars, use public transportation like buses, trains, and subways to get around. It's often cheaper and gives you a local experience. How to Save Money on Kid-Related Expenses Raising children can be costly, but you can save money with these approaches: 36. Shop secondhand: Purchase gently used clothing, toys, and other items to save on costs associated with growing children. 37. Attend free activities: Take advantage of community events, libraries, and local resources that offer free entertainment and educational opportunities for children. 38. Prioritize preventative care: Schedule regular check-ups and vaccinations to maintain children's health and prevent costly medical expenses. How to Save Money on Shopping Enjoy shopping while staying within your budget with these strategies: 39. Join loyalty programs: Earn rewards and discounts by joining loyalty programs offered by your favorite retailers. 40. Sign up for email alerts: Receive notifications about sales, promotions, and exclusive offers by subscribing to retailers' email lists. 41. Use browser extensions: Install tools like Honey or Rakuten to automatically apply coupons and earn cash back while shopping online. 42. Use cashback apps: Use apps like Ibotta or Flux, which offer cashback rewards, discounts, and personalized deals on everyday purchases. How to Save Money on Taxes Reduce your tax liability with these tax-saving tips: 43. Maximize retirement contributions: Increase contributions to retirement accounts like 401(k)s or IRAs to lower taxable income. 44. Utilize health savings accounts (HSAs): Contribute to an HSA for tax-deductible savings on medical expenses. 45. Explore deductions and credits: Take advantage of available tax deductions and credits, such as those for education expenses or charitable donations, to reduce taxes owed. By implementing these strategies, you can effectively reduce expenses across various aspects of your life and increase savings for future financial goals.

Back-to-school shopping doesn't have to be expensive; secondhand shopping and teaching kids about money can make costs more affordable Summer breaks can feel like a pressure cooker for parents. Managing full-time work, keeping the pantry stocked, and entertaining energetic children while engaging them in learning activities can be overwhelming. As summer ends, the pressure surrounding back-to-school shopping builds, particularly with the recent increases in the cost of living, even as inflation cools. According to NerdWallet’s 2024 back-to-school shopping report, parents of K-12 or college students who plan to do back-to-school shopping this year will spend an average of $541 on school supplies and clothing for their kids’ upcoming school year. Here are a few tips on how to shop for clothes and supplies on a budget. These insights can be valuable even if back-to-school shopping is already underway. Create a Budget and Stick to It Before you start shopping, set a clear budget. Determine how much you can afford to spend on school supplies, clothing, and other essentials. Make a list of items your child needs and prioritize them. Having a budget helps you avoid overspending and makes it easier to track your expenses. Take Inventory of What You Already Have Go through last year's school supplies, clothes, and other items to see what can be reused. Many items like backpacks, lunchboxes, and stationery can often last more than one year. This can significantly reduce the number of new items you need to purchase. Separate Needs from Wants for Your Children Back-to-school supply lists can seem endless, often leading to budget overruns. Make a list of all the supplies, including wants and needs; and compare that to your budget and what you already have. From there, start prioritizing. For example, your child may want both crayons and markers, but do they need both? Shop Sales, Use Coupons, Price Match, and Attend "Free Supplies" Events Keep an eye out for back-to-school sales and special promotions. Many stores offer significant discounts on school supplies and clothing during the summer months. Additionally, use coupons and discount codes whenever possible. Websites like RetailMeNot and Honey can help you find the best deals. Some retailers may also offer price matching policies, where they will match a lower price found at a competitor. This can be a great way to ensure you’re getting the best deal without having to shop at multiple stores. Always check the store’s policy and bring proof of the lower price when you shop. You can also attend back-to-school events that usually give out free supplies. These events can be found on Google, Eventbrite, Facebook, or local government websites. Consider Secondhand Clothing for Younger Kids Clothing can be a major expense when kids are going back to school. Thrift stores, consignment shops, and online marketplaces like eBay and Facebook Marketplace can be great places to find gently used clothing and school supplies at a fraction of the cost. Hand-me-downs from family and friends are also a great way to save money on back-to-school items. Set a Budget and Negotiate with Older Kids Teaching your kids about budgeting and smart shopping can be a valuable lesson. Give them a budget for their supplies and let them help make decisions on what to buy. This can help them understand the value of money and make them more mindful of their choices. The Bottom Line By implementing these strategies, you can make back-to-school shopping more affordable and less stressful. Planning ahead, being resourceful, and taking advantage of sales and discounts can help you stick to your budget while ensuring your child has everything they need for a successful school year.

Compound interest can boost the growth of even the smallest investments We’ve all heard it before: start planning for retirement when you’re young. But what if circumstances have forced you to wait? Is there no hope? The answer is a resounding no. Here are three reasons why it’s never too late to start planning for the day you bid farewell to your job. 1. Compound interest works regardless of your age Some people start saving for retirement as soon as they enter the workforce, benefiting from the magic of compound interest over a long period. However, starting early is not the only path to success. Compound interest can still work in your favor, no matter when you begin. Let's assume you're 55, aim to retire in 10 years, and have no retirement savings yet. While this isn't ideal, it is not insurmountable. As personal finance experts often say, "The best time to plan for retirement was years ago. The second-best time is today." Let's assume you start contributing $100 a week to a retirement plan, such as a company plan or an individual IRA. Historically, the average annual return on the S&P 500 since 1928 has been 7.7%. Although returns vary from year to year, let's assume an average return of 7% over the next 10 years. By investing $5,200 annually ($100 weekly), you would have nearly $72,000 saved by age 65. Without compound interest, this total would be $52,000 ($5,200 per year times 10). However, thanks to compound interest, your investment grows significantly by an additional $20,000. 2. Take advantage of "catch-up" contributions as you get older As you get older, you become eligible for "catch-up" contributions, which allow you to contribute more to your retirement plan. For example, in 2024, the standard contribution limit for a 401(k) plan is $23,000. However, if you are 50 or older by the end of the calendar year, you can make an additional catch-up contribution of up to $7,500. This means you can contribute up to $30,500 annually to the following plans: 401(k) (excluding SIMPLE 401(k)) 403(b) SARSEP Government 457(b) Even if you think contributing more is beyond your reach, every extra dollar you add to your retirement savings brings you closer to your goals. Remember, you don't have to withdraw all your retirement funds at once. You can take only the required minimum distribution (RMD) and allow the rest of your funds to stay invested and continue growing. 3. You have a clearer picture of your guaranteed income Guaranteed income refers to reliable sources of income you can depend on monthly, such as pensions, Social Security payments, and annuities. The Social Security Administration (SSA) calculates your monthly benefits based on your "average indexed monthly earnings" over your 35 highest-earning years. Typically, the older you are, the more work history you have, and the more accurate the SSA's estimate of your future benefits will be. Why is this important? Knowing how much guaranteed income you will receive each month makes it easier to create a realistic budget. You can register at my Social Security to get an estimate of your expected benefits. Although the estimate isn't exact, it's close enough to help you determine if your projected income will meet your needs or if you need to adjust your plans. For instance, you might choose to work longer, take on a side hustle, or downsize your living situation in retirement. The bottom line If you're inclined to think in all-or-nothing terms, starting to save for retirement later in life might seem daunting. However, every dollar you save now will help make your retirement years more comfortable.

As a result of the "money" gap, women are more financially vulnerable than men Women still face a wealth disparity, compared to men. Even as women achieve higher levels of education and attain more prominent positions in the workplace, the gender pay gap remains. For example, women are still more likely to take time out of the labor force or reduce the number of hours worked because of caretaking responsibilities. Referred to as the “motherhood penalty,” this often impacts a woman's career opportunities. Stemming from the wealth gap, women often find themselves more financially precarious compared to men. According to a recent study by Fidelity Investments, a staggering 93% of women experience money-related stress, regardless of their household income. Further reports indicate that many women in the United States remain in unhealthy or dysfunctional marriages due to financial insecurities. Even in healthy relationships, women typically outlive men. Consequently, women often need to manage finances independently at some point in their lives, but are often unprepared to do so. Emergency funds to the rescue For women, “financial stress is pretty consistent across all age groups and income,” said Lorna Kapusta, head of women and engagement at Fidelity. However, simple money management strategies like emergency funds can alleviate that stress. Fidelity's research reveals a significant reduction in financial stress as women increase their emergency savings. Among those without any emergency savings, approximately 81% experienced moderate to high levels of stress. But when women accumulate three months' worth of emergency funds, only 26% report elevated stress levels. How to start building an emergency fund and cash reserve Many financial experts advise setting aside at least three to six months' worth of expenses. If you are the sole breadwinner or self-employed, they recommend saving even more. Lorna Kapusta, head of women and engagement at Fidelity, recommends creating a budget divided into three main categories. She advises allocating 50% of your income to essential expenses like rent, food, and utilities, 15% to retirement savings, and 5% to an emergency fund. The remaining 30% can be used for discretionary spending or to cushion against a higher cost of living. If you can't meet these savings targets right away, Kapusta suggests starting by putting any amount into a high-yield account, many of which currently offer over 5% interest—the highest rate in nearly two decades—and gradually increasing your savings over time. Additionally, she recommends contributing enough to your 401(k) to receive the full employer match and opting for auto-escalation, which will automatically increase your contributions annually.

How to assess the benefits of premium credit cards with annual fees Using rewards credit cards can enhance the value of your daily expenses, often providing a range of travel and lifestyle benefits. However, many top-tier credit cards come with annual fees that can reach into the hundreds of dollars. So, when does paying a credit card's annual fee make sense? It comes down to whether the benefits you receive from the card outweigh the yearly cost. Nonetheless, it's essential to conduct thorough research and compare multiple credit card options to find the optimal balance between cost and benefits. Leverage travel and hotel benefits While you might typically avoid fees, a credit card's annual fee can be justified if the card's benefits exceed its cost. Instead of solely focusing on rewards rates, prioritize evaluating the overall perks a card offers. Many no-annual-fee credit cards provide exceptional rewards as well. Take, for example, the Capital One Venture X Rewards Credit Card, which carries a substantial $395 annual fee. However, it includes a $300 annual travel credit redeemable through Capital One Travel and provides 10,000 bonus miles each year (equivalent to $100 in travel) starting from your first anniversary. Even if you don't travel frequently, it's not difficult to offset the annual fee each year, especially when you consider the card's additional premium perks, such as complimentary access to airport lounges. For travelers, hotel credit cards can also be a smart choice due to the complimentary annual night benefit they offer. With the IHG One Rewards Premier Credit Card, you receive an annual free night valued at 40,000 points. Depending on how you use this benefit, it can provide significantly more value than the card's $99 annual fee. Additional benefits of this card include a $100 statement credit, 10,000 bonus points upon spending $20,000 each calendar year, a fourth night free on award stays lasting four nights or more, and Platinum Elite status. Consider benefits to subscriptions and other services One common subscription service offered by premium credit cards is subscriptions to entertainment or lifestyle services. This can include access to streaming platforms, discounts on event tickets, or exclusive invitations to special events. These perks cater to cardholders who enjoy entertainment and leisure activities, providing added value beyond traditional rewards programs. For example, the American Express Platinum card provides cardholders with complimentary memberships and credits for various subscription services. It includes up to $200 in Uber credits annually, access to the Global Lounge Collection (including Centurion Lounges and Priority Pass lounges), and complimentary memberships with programs like Fine Hotels & Resorts and The Hotel Collection. The Chase Sapphire Reserve offers a complimentary Priority Pass Select membership, providing access to over 1,300 airport lounges worldwide. Cardholders also receive up to $300 in travel credits annually, which can be used for various travel expenses, including flights, hotels, and car rentals; and complimentary subscriptions for Instacart and DoorDash Avoid annual fees on credit cards for poor credit Traditionally, credit cards with annual fees have been associated with rewards and benefits, but there's a growing category of credit cards that charge an annual fee primarily to help people build credit. However, in recent years, the market has seen a rise in unsecured starter credit cards and credit cards tailored for individuals with poor credit that do not require an annual fee. For example, the Chase Freedom Rise credit card considers applicants who maintain a Chase checking account with a balance of $250 or more, making it accessible to those new to credit. Similarly, fintech company Petal utilizes its proprietary Cash Score, which incorporates income and expense data alongside credit scores, to assess eligibility. These innovative card options provide more opportunities for responsible money managers with less-than-perfect credit histories to access credit and improve their financial standing. The bottom line While credit cards with annual fees may initially seem like an extra expense, they often provide access to subscriptions and services that can significantly enhance the cardholder's lifestyle and travel experiences. For people who frequently travel or enjoy exclusive perks and services, these cards can be a worthwhile investment, offering convenience, comfort, and additional value beyond the basic rewards structure. When choosing a credit card, it's essential to consider your spending habits, travel preferences, and lifestyle to determine which card will provide the most value based on the included subscriptions and services.

"We were keeping up with the Joneses, but we were going against Tom Cruise and Katie Holmes" Nicolas Cage Nicolas Cage reigned as one of Hollywood's top-earning actors. Yet, he indulged in extravagant expenditures, like acquiring a $150,000 octopus and a $276,000 dinosaur skull (which he later returned to the Mongolian government due to its stolen origin). His lavish lifestyle extended to owning 15 residences globally, among them two European castles. Eventually, his financial recklessness led to owing the IRS $6.3 million and facing foreclosure threats on numerous properties. During an appearance on 60 Minutes, Nicolas Cage revealed that he immersed himself in his craft to settle his debts, stating, "Work was always my guardian angel. It may not have been blue-chip, but it was still work. Even if the movie ultimately is crummy ... I’m not phoning it in. I care, every time." Remarkably, the actor managed to resolve his financial obligations without resorting to bankruptcy. T-Pain During an episode of The Breakfast Club, T-Pain reflected on his journey from being "mega-rich," losing it all, and then regaining wealth. The singer disclosed that he once had $40 million in his bank account. However, bad real estate investments and imprudent spending, such as purchasing a Bugatti and later returning it at a $400,000 loss, left him financially depleted. "I even had to borrow money to treat my kids to Burger King," he admitted. Now he's no longer chasing the money, explaining, "That $40 million — I was hustling, I needed to be on everybody's record and every record gotta go No. 1, I gotta do this work. And at that time, I didn't know my family at all." He commended his wife for sticking with him through thick and thin and said his focus is now on his family. Heidi Montag and Spencer Pratt Heidi Montag and Spencer Pratt rose to fame on MTV's The Hills. During their peak, they reportedly earned $2 million annually, as per People magazine. However, the couple indulged in extravagant spending habits, including $1 million on clothing for Heidi and another $1 million on a crystal collection for Spencer, along with lavish dinners featuring $3,000 bottles of wine. Reflecting on their choices, Spencer remarked, "We were trying to keep up with the Joneses, but we were competing against Tom Cruise and Katie Holmes. We should have stayed in our reality TV lane." Chris Tucker Following his rise to fame through Def Comedy Jam and Friday, Chris Tucker amassed significant wealth with the lucrative Rush Hour franchise, earning $25 million for the third installment alone. However, in 2021, he faced legal action from the IRS for unpaid taxes totaling $9.6 million spanning the years 2002, 2006, 2008, and 2010. Last year, he resolved the matter by agreeing to a settlement, committing to pay $3.6 million to settle his tax liabilities. Christy Carlson Romano Christy Carlson Romano gained fame as a Disney Channel star, particularly known for her role in Even Stevens. However, two years ago, she shared a candid YouTube video detailing her financial journey. In the video, she reflected on spending extravagantly on shopping trips, expensive cars, and even a psychic who took advantage of her financially. Romano admitted, "I had this money at my disposal. I was never told how much money I was making. Money didn't have a purpose for me; I didn't really know what it was. I just knew that I had it and didn't care about it. That's a problem." Christy shared that as she's grown older, she's gained a better understanding of finances and has come to terms with her past experiences. She expressed a desire for her daughters to have more financial awareness as they grow up. "Build small and make sure that you're doing things that are smart, that can make you money, not break you," she advised viewers. "And enjoy the things that are not expensive ... Go out and enjoy the day. It's free."

Although mortgage rates are high, there are other ways for potential homebuyers to save Amidst soaring mortgage rates reaching 8% and a dearth of new listings, prospective home buyers find themselves grappling with substantial expenses and limited alternatives. Nonetheless, there exists a silver lining—they possess more bargaining power than they might perceive. Recent data from Redfin indicates a notable uptick in failed home sales, underlining buyers' hesitance, with nearly 16% of pending transactions collapsing in August, compared to about 11.7% during the same period in 2021. Consequently, sellers are more receptive to certain requests as to not risk losing the deal. Beyond merely scouting for the most favorable rates, buyers can also leverage a range of additional concessions from sellers to alleviate their burden of closing costs and monthly payments. Here are three key considerations for potential requests from sellers: Help with closing costs Real estate agents suggest considering requesting a credit from the seller to offset closing costs. Closing costs are typically from 2% to 5% of the financed amount and are usually paid by the borrower. For example, if you were to borrow $100,000 to buy a home, you could expect to pay $2,000 to $5,000 in closing costs. Closing costs that sellers can help cover include: Appraisal fees: The expense assessing the current market value of the property Attorney fees: In certain states, legal assistance may be required for closing Discount points: An upfront fee paid to secure a reduced mortgage interest rate. Inspection fees: Associated costs for conducting a thorough examination of the property to identify any potential damage, pests, or other concerns Loan origination fees: Charges for processing your loan application Property taxes: Taxes up to the end of the year at the time of closing Recording fees: Minor charges for registering the home purchase with local governmental authorities Title insurance: Coverage safeguarding the lender from any claims against the property, with the option to also procure a separate buyer's policy for personal protection Get a rate buy-down on your mortgage Real estate agents note an increasing trend among lenders, sellers, and home builders to assist in reducing a buyer's mortgage interest rate for a specific duration, also known as a rate buy-down. For instance, considering a $300,000 loan at 7.80%, if the seller acquires two points at a cost of $6,000, the buyer's interest rate could decrease to 7.30%, resulting in a monthly principal and interest payment reduction from $2,159 to $2,056 (translating to savings of $103 per month and $37,080 over 30 years). However, it's important to recognize that the appeal of a permanent rate buy-down may diminish if interest rates decline in the future and prompt refinancing. Furthermore, some lenders may offer opportunities for future mortgage refinancing at no additional cost, although the terms of such offers vary. Fixing up the house According to real estate agents, sellers are displaying a greater willingness to address repairs compared to approximately two years ago. Seller concessions can include repairs and upgrades to the home. For example, if you incorporate a home inspection contingency into your offer, you can then opt to withdraw from the agreement or request the seller to address specific repairs based on the findings of the inspection. When it comes to seller concession for home repairs, concentrate on significant issues like a leaking roof or a malfunctioning water heater. Minor cosmetic imperfections, such as a missing light bulb or a broken window latch, are tasks you can manage independently. If the seller pushes back, explore negotiating a credit at closing to mitigate some of the repair expenses.

A quick guide to revamping your finances this spring As March 19 heralds the arrival of spring, it signals the commencement of the annual ritual of "spring cleaning" for many households. Yet, amidst the scrubbing and dusting of our homes, another crucial area warrants attention: our finances. Just as tidying up our living spaces can bring order and savings, so too can organizing and streamlining our financial accounts. Allocating time in the upcoming weeks to "spring clean" our finances can yield significant benefits and savings throughout the year. Below are ten ways you can spring clean your finances, setting you up for better money management throughout the rest of the year. 1. Check your credit report A fundamental step in organizing your finances this spring is to review your credit report. It's crucial to scan for any inaccuracies that could be adversely affecting your credit score, such as incorrect personal details, balance discrepancies, or accounts stemming from identity theft. Surprisingly, errors on credit reports are more prevalent than commonly assumed. According to a Federal Trade Commission study, one in five Americans is likely to encounter errors on at least one of their credit reports. Moreover, complaints regarding credit report inaccuracies have more than doubled from 2021 to 2023, escalating from 165,129 to 443,321, as reported by Consumer Reports. Fortunately, accessing your credit report from each of the three major credit bureaus—Equifax, Experian, and TransUnion—is now easier than ever, with AnnualCreditReport.com offering complimentary reports on a weekly basis. Not only does checking your report serve as a proactive measure for rectifying errors, but it also serves as an initial step for those aiming to enhance their credit score. 2. Get rid of unwanted subscriptions Chances are, you're shelling out cash each month for subscriptions you neither need nor remember signing up for, gradually chipping away at your budget. An effective strategy to reclaim some of that money—be it a little or a substantial sum—is to purge yourself of unnecessary subscriptions. Unless your TV is permanently glued to your eyeballs, chances are you don't require more than one or two streaming services, such as Netflix. Moreover, if you initially subscribed to binge-watch a specific series, it's highly likely you've forgotten to cancel now that you're all caught up. Beyond entertainment subscriptions, a plethora of other services could be silently draining your income each month, spanning meal-prep deliveries, dating apps, to music streaming platforms. Consider employing an app capable of monitoring your monthly subscriptions and facilitating their cancellation, such as Rocket Money or PocketGuard. Many of these apps boast additional features geared towards enhancing financial management. 3. Sell your unwanted items As you spring clean your attic or basement this year, reconsider before discarding everything. Some of the forgotten items gathering dust may hold surprising value. Classic video games, vintage toys, and Boy Scout memorabilia, among others, have been known to fetch thousands of dollars on platforms like eBay, Mercari, or Poshmark. Before you hastily donate those old boxes to your local Goodwill, take a moment to see if any of your unwanted items might be worth reselling. 4. Put an estate plan in place If you've been overlooking the importance of estate planning or procrastinating on it, now is an opportune moment to take action. According to the Caring.com 2024 Wills and Estate Planning Study, only 32% of Americans have a will in place, marking a 6% decline from the previous year. Interestingly, 40% of Americans cite insufficient assets as the reason for not having a will. However, it's crucial to recognize that an estate plan offers benefits for individuals of all financial backgrounds. Without one, the state assumes control over distributing your assets, potentially leading to prolonged legal battles for your loved ones. For those who already have an estate plan, it's essential to periodically review it, especially following significant life changes. Additionally, ensure that the beneficiaries listed on all your accounts are current, not solely those outlined in your will. Beneficiaries designated on documents such as life insurance policies and 401(k)s take precedence over those named in a will. 5. Review your insurance policies This spring, take the opportunity to cut costs by reassessing your insurance policies and securing the most competitive rates available. Explore various insurance providers to obtain quotes and compare prices. Additionally, if you haven't already, contemplate consolidating your home and auto insurance for potential savings. According to Progressive, bundling these policies can yield an average discount of 7% on your auto policy. Consider implementing these strategies to save money across different insurance categories: discover eight techniques to reduce life insurance expenses, uncover 12 methods to decrease auto insurance premiums, and explore six approaches to find the most affordable home insurance options. 6. Maximize credit card rewards Furthermore, it's prudent to assess the credit cards in your possession. Are you fully capitalizing on the benefits they offer? Evaluate your spending habits to determine which cards provide optimal cashback rewards for your most frequent expenses. Additionally, take note of any supplementary perks provided by your cards, along with any sign-up bonuses that could bolster your savings over the course of the year. 6. Go paperless with your financial documents and statements If you're still receiving paper statements from financial institutions, consider switching to paperless notifications. This applies to credit cards, loans, brokerage accounts, and even bills. Opting for paperless reduces household clutter and is environmentally friendly. With digital statements, tracking your finances becomes more convenient as all statements are consolidated in one accessible location. Regarding existing paper records, many institutions offer the option to upload important documents into a secure digital vault. Once you have a digital copy, you can typically dispose of the paper version. It's essential to retain certain records, such as tax documents from the past seven years and any paperwork pertaining to active loans, whether in digital or paper format. 7. Plan for future tax seasons To alleviate the annual burden of spring cleaning, some opt for scheduled deep cleaning sessions throughout the year. Similarly, tax planning demands attention at various intervals, extending beyond the tax-filing season. Whether it's before or after Tax Day, integrating tax-efficient strategies into your financial plan remains beneficial at any time. Consider incorporating a combination of the following tactics: 1. Tax-loss harvesting: This involves selling securities at a loss to offset capital gains in taxable investment accounts, thereby reducing your taxable income. 2. Tax-aware asset allocation: Different types of accounts are subject to varying tax treatments. A tax-aware asset allocation strategy considers these differences to potentially enhance after-tax returns. 3. Tax-favorable investments: Certain investments, such as municipal bonds, tax-efficient mutual funds, and 529 plans, offer opportunities to save for diverse financial goals while also providing tax advantages. 8. Roll over your old 401(k) If you've changed jobs recently, it's essential to consider rolling over your old retirement contributions. You can transfer them to your new employer's account or opt for an IRA, which offers greater investment flexibility and account control. Rolling over your old 401(k) can offer several benefits, including greater investment flexibility and potential cost savings. By consolidating your retirement accounts, you can streamline your financial management and gain more control over your retirement savings. Additionally, leaving old 401k plans untouched can lead to accumulating fees over time, impacting your retirement savings negatively. To initiate a rollover, start by contacting your new employer's retirement plan administrator. You can then request a direct transfer of funds from your old 401(k) into your new account, without incurring taxes or penalties. Be sure to consider factors such as investment options, fees, and account features when selecting the destination for your rollover. 9. Set up and plan your sinking funds A sinking fund refers to the money set aside each month for anticipated expenses that occur periodically but not on a monthly basis, such as car maintenance, home repairs, vacations, weddings, or holiday gifts. These funds are advantageous as they allow gradual saving over time and prevent the need to dip into emergency funds to cover these expenses. It's essential to list anticipated expenses for the upcoming months or years and establish sinking funds accordingly to ensure preparedness when these expenses arise. To create an effective strategy for sinking funds, start by identifying potential future expenses and estimating their costs. Next, prioritize these expenses based on urgency and frequency, allocating funds accordingly. Set up separate accounts or designate specific portions of your budget for each sinking fund to ensure clarity and accountability. Don't forget to regularly review and adjust your sinking fund allocations as needed to accommodate changing circumstances and new financial goals. 10. Update your budget Regularly revising your budget allows you to adapt to changes in income, expenses, and priorities, ultimately helping you stay on track towards your financial goals. The primary step in budget revision is ensuring that your spending aligns with your current life circumstances and values. Take the time to reassess each category in your budget and determine necessary adjustments. It's essential to maintain a realistic budget to enhance your chances of success and long-term adherence. To update your budget effectively, start by reviewing your income and expenses to determine any fluctuations or new expenditures. Next, reassess your financial goals and priorities, adjusting your budget allocations accordingly. Be sure to keep your budget realistic and flexible, allowing for changes as needed. Regularly monitoring and updating your budget will help you maintain financial stability and progress towards achieving your long-term financial aspirations. The bottom line Spring cleaning your finances is more than just receipt organization or budget trimming. It's about embarking on the remainder of the year with a renewed confidence in your financial management.

Joe Alwyn and Taylor Swift’s love wasn’t forever--but the royalties and credits from the songs they wrote together are Joe Alwyn and Taylor Swift's romance may have ended, but Alwyn continues to reap financial benefits from their time together. The couple, who ended their six-year relationship in early 2023, maintained remarkable privacy regarding their romance. In fact, fans were taken aback when Alwyn disclosed his involvement in co-writing several tracks on Swift's 2020 albums, "Folklore" and "Evermore," under the pseudonym William Bowery. Now, it appears that his contributions under the Bowery alias will continue to reap financial rewards. During their relationship, Alwyn, 33, co-wrote six songs under the pseudonym William Bowery, including tracks like "Exile," "Betty," "Champagne Problems," "Evermore," "Coney Island," and "Sweet Nothing." These songs were featured on Swift's albums "Folklore," "Evermore," and "Midnights." Despite their split in 2023, Alwyn still earns a considerable income from his songwriting credits. Reports suggest that he makes a five-figure sum annually from his contributions to Swift's discography. Analysis indicates that Alwyn has already earned approximately $2.3 million from Spotify streams alone. Moreover, Alwyn continues to receive royalties from additional streaming platforms and Swift's live performances where his songs are included. With Swift's Eras Tour grossing $1 billion, Alwyn's financial gains are expected to be significant. Swift also confirmed Alwyn's involvement as a songwriter under the pseudonym William Bowery. She praised his contribution to "Exile," noting that he wrote the entire piano part. Swift also expressed gratitude for their collaborative songwriting experience during the quarantine period. In 2021, Alwyn's work with Swift earned him recognition at the Grammy Awards when "Folklore" won Album of the Year. Swift acknowledged Alwyn's support during her acceptance speech, emphasizing their creative collaboration during the pandemic. Swift previously revealed that she wouldn't have collaborated with Alwyn if it weren't for the unique circumstances of being quarantined together amid the coronavirus pandemic. According to Life & Style Magazine, Alwyn's songwriting credits have proven highly profitable. "Fair or not, it’s made him a very rich guy. Joe is making so much on royalties and returns from [the] Eras Tour that he doesn’t ever need to worry about money again," remarked one source.

5 low-risk ways to earn 5% or more on your money this spring Driven by soaring inflation, the Federal Reserve swiftly initiated a series of interest rate hikes in 2022, maintaining them at elevated levels to date. The goal was to temper economic growth and stem inflation to a more manageable degree by increasing the cost of borrowing. However, the surge in borrowing expenses has also led to higher interest rates for savers and investors alike. While projections suggest the possibility of rate cuts by the Fed in 2024, the present landscape offers numerous opportunities for attractive returns. For those seeking a yearly percentage yield (APY) of 5% or higher this spring, here are five investment avenues to explore. Certificates of Deposit With Certificates of Deposit (CDs), you secure the certainty of earning a fixed interest rate while safeguarding your principal, within the limits of applicable FDIC or NCUA insurance, provided you refrain from premature withdrawals. Presently, numerous CDs offer yields of 5% or more, although typically, short-term CDs yield higher returns than their long-term counterparts, reflecting the anticipation of impending interest rate decreases. Rob Williams, managing director of financial planning at Charles Schwab, suggests considering CDs as a relatively low-risk option for funds not immediately required for day-to-day expenses. Incorporating CDs with appropriate maturity periods into your portfolio's cash investment allocation or investment cash management plan could prove advantageous at this time. High-Yield Savings Accounts Another option for potentially earning 5% or more on your money, while safeguarding your principal within applicable insurance limits, is a high-yield savings account. Compared to CDs, high-yield savings accounts offer greater flexibility in terms of moving funds in and out. Unlike CDs, which may penalize early withdrawals with a loss of interest, high-yield savings accounts allow for more freedom in accessing your funds. However, it's important to note that high-yield savings accounts come with reinvestment risk due to fluctuating interest rates. While a rise in interest rates can lead to higher monthly interest payments for high-yield savings accounts, CD rates remain fixed throughout the term. Money Market Accounts Money market accounts share similarities with high-yield savings accounts, although the rates, deposit prerequisites, and access to funds may vary among financial institutions. Therefore, it's essential to review the terms offered by your chosen banking establishment. If you prioritize daily access to liquidity, both high-yield savings accounts and money market accounts can be advantageous. Money market accounts, like high-yield savings accounts, can also benefit from federal insurance. However, they are susceptible to the same risk posed by fluctuating interest rates. Money Market Funds Distinct from money market accounts, which are deposit-based, a money market fund functions as an investment account offering a relatively low-risk avenue to potentially earn 5% or more. Money market funds typically maintain a stable value and invest in secure fixed-income assets, such as government bonds, though the specific portfolio composition varies among funds. Numerous money market funds are available that rival CD rates but without the time commitment associated with CDs. These funds are accessible to retail investors via trading platforms or financial advisors. Moreover, they offer liquidity, allowing for swift liquidation on any trading day, should the need arise. Treasury Securities Lastly, Treasury securities, including Treasury Bills and Treasury Bonds, offer slightly higher returns than CDs and are widely regarded as secure investments due to their backing by the federal government. For instance, the 10-year US Treasury is considered the risk-free rate of return. However, while holding Treasuries to maturity can yield 5% or more, they lack the stable value along the way that some other options provide. Investors who directly purchase Treasury securities should closely monitor the risk of increasing interest rates, as selling a Treasury Bill before maturity could result in losses. The Bottom Line In summary, there are numerous avenues to achieve a 5% APY or higher on your investments this spring. Even if interest rates experience a slight decline, strategies like investing in CDs or holding Treasuries until maturity can help secure your returns. However, for those comfortable with assuming a bit more risk, potential for greater returns may lie elsewhere, such as in equities. The recent strong performance of the stock market, coupled with the prospect of Federal Reserve interest rate cuts, suggests that this momentum in the equity market may persist. Nevertheless, for those hesitant to jeopardize their principal, these alternative options still offer the potential to outpace inflation and foster growth in their funds.

Learn how budget and save for the summer festival season without draining your wallet You can't think about summer without thinking about music festival season. The vibrant atmosphere, electrifying performances, and the chance to connect with like-minded music fans create an unforgettable experience. However, attending a music festival can be a pricey venture. To ensure you don't miss out on the fun due to finances, it's essential to plan and budget wisely. Below are effective strategies to budget and save for a music festival, along with expected costs you might incur during your unforgettable adventure. What Is the Average Cost of a Music Festival? Expenses can shoot up quickly, if you're attending a music festival. In fact, spending $2,000 in a weekend is not unusual. Below are costs to expect: Tickets: This is the primary expense, and prices can vary widely depending on the festival and the type of ticket you choose (single-day, weekend pass, VIP, etc.). Costs will vary depending on when you buy and whether you decide to shell out for the VIP options, but tickets for a multi-day event typically cost hundreds of dollars. For instance, in 2023, general admission to Bonnaroo in Tennessee was $380 and up for four days; while passes for Coachella, in California, began at $540 for three days. Accommodation: Whether you're camping, staying in a hotel, or renting a vacation home, accommodation costs are a significant factor. On-site camping may be a way to enjoy festival season on a budget. General admission camping is included in the ticket price for some festivals, and you can typically pay a fee if you’re bringing a vehicle along. Camping not only skips pricey hotel rates, but you also won't have to pay for daily transportation to and from venues. Transportation: Consider travel expenses, including gas, flights, or public transportation to and from the festival location. Even if you live nearby, you may need to pay for a rideshare, a shuttle pass, or gas and parking to get to the event. Food and Beverages: Festivals often have a variety of food vendors, but these can be pricey. Budget for meals, snacks, and drinks throughout the event. Consider bringing non-perishable foods, snacks, and water, if you’re looking for ways to save money at festivals. Merchandise and Souvenirs: It's always tempting to bring home a piece of the experience. If you're looking for ways to save, consider cutting out merchandise out of your spending plan; and focus on low-cost mementos, like photos with friends or festival wristbands. But if you have the budget and want something more, plan for some discretionary spending on festival merchandise. Miscellaneous Expenses: Don't forget to account for unexpected costs or emergency expenses. What Are Some of the Best Ways to Save for a Music Festival? Set a Realistic Budget: Before you start saving, it's crucial to determine how much you can afford to spend on your music festival experience. Consider factors such as travel, accommodation, tickets, food, and miscellaneous expenses. Be realistic about your financial situation and set a budget that won't leave you struggling after the festival is over. Research Festival Costs: Different music festivals come with varying price tags. Research the festival you're interested in attending to get an idea of ticket prices, camping fees, and any additional costs. Factor in whether you'll be camping, staying in a hotel, or opting for alternative accommodations. Understanding the full scope of expenses will help you create a more accurate budget. Create a Savings Plan: Once you've established a budget, create a savings plan to reach your financial goal. Determine how much money you need to save each week or month leading up to the festival. Consider opening a separate savings account dedicated solely to your festival fund to prevent any accidental spending. Explore Group Options: Attending a music festival with friends can be not only more enjoyable but also more cost-effective. Explore group ticket options, shared accommodations, and group travel discounts. Splitting costs with friends can significantly reduce the financial burden while enhancing the overall experience. Volunteer or Hunt for Discounts: Keep an eye out for early bird ticket sales, promotional discounts, and package deals that include tickets and accommodation. Many festivals also offer loyalty programs or referral discounts for bringing friends along, or provide large discounts if you volunteer at the festival. Look for such opportunities can help you secure the best deals and stretch your budget further. Avoid Layaway or "Buy Now, Pay Later" Options: Avoid paying for music festivals with layaway arrangements or "Buy Now, Pay Later" options. Some of these arrangements include interest or charge fees for spreading the cost of your purchase. Instead, create a budget and save up for festival tickets in advance. The Bottom Line Attending a music festival is a thrilling adventure that requires careful financial planning. By setting a realistic budget, researching festival costs, creating a savings plan, and exploring cost-saving options, you can make your dream music festival experience a reality. Remember to be mindful of expected costs and make informed choices to ensure you have an unforgettable time without breaking the bank.