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5 Common Investing Mistakes

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Many people wonder, “What are common mistakes people make when investing?” Regretfully, missteps happen often, and some of them are incredibly costly. Fortunately, by knowing what they are, it’s easier to avoid them. Let’s look at the answer to the question,”What are common mistakes people make when investing?” By answering this question, we ensure you don’t make them.

5 Common Investing Mistakes

1. Failing to Diversify

Putting all of your eggs in one basket is incredibly risky when you’re investing. If you focus solely on a single company – or even a single sector – you may see the value of your portfolio tumble when specific market conditions occur.

Often, a lack of diversification is more likely to be an issue with new investors who are just getting some footing with their portfolios. If you don’t have a lot of money to commit, you may be limited to just a few investments initially. As a result, diversification is inherently harder to capture, especially if you’re buying individual company stocks.

If you want to boost your level of diversification quickly, consider mutual funds and exchange-traded funds (ETFs) instead. Unlike individual stocks or bonds, mutual funds and ETFs actually represent a range of investments that are associated with the fund. As a result, there’s an inherent degree of diversification built into the investment.

When you explore mutual funds and ETFs, you’ll find a wide variety of options. Index funds aim to include assets that represent the broader associated market, so they can be excellent places to start. However, you’ll also find mutual funds and ETFs that target specific sectors or groups of investments that align with a single concept, which may or may not be industry-limited.

Consider starting with a few different mutual funds or ETFs to get the ball rolling. Then, you can examine other investment options after your diversified portfolio is a bit established.

2. Being Glued to Market News

Generally, it’s wise to remain informed about the market when you’re investing. Similarly, you’ll want to research any potential investment before moving forward, allowing you to determine if it aligns with your strategy and risk tolerance.

However, constantly monitoring the markets isn’t typically a good idea for the majority of investors. It’s easy to get swept up in the fervor, which may prompt you to make decisions you normally wouldn’t in regard to your investments.

Plus, not all market news is entirely unbiased. For example, some media personalities operating in this space may have an incentive to push an investment if they’re heavily involved with a particular stock. Even if they aren’t aiming for personal gain, that attachment may skew their view.

Instead, look to limit your consumption of market news, going with enough viewing or reading to stay informed but not so much as to track the market in real time. Additionally, if you learn about an investment with potential or are wondering if conditions make shifting away from an investment wise, do some additional research. Focus on unbiased sources that use a neutral approach to news delivery, as those are less likely to impact you emotionally, allowing you to make smarter decisions.

Similarly, resist the urge to constantly check the value of your portfolio. Market fluctuations are common, so the value is going to rise and fall regularly. What matters is sustained growth. In most cases, investing is a marathon, not a sprint, so keep an extended time horizon in mind and focus on the bigger picture.

3. Relying on Social Media for Investment Advice

While social media platforms can carry news from legitimate sources, it’s critical to be wary of investment advice coming from accounts not associated with unbiased information. First, social media accounts don’t know about your financial situation, so any recommendations aren’t targeted to your circumstances. That alone should give you pause.

Second, social media influencers may be compensated by companies to promote specific investments, either by directly recommending an asset or indirectly by increasing the visibility of an asset or company. While social media influencers are supposed to disclose when they’re compensated, it doesn’t always happen. Even if it does, you have to notice the disclosure, and it may get buried within the post depending on how it’s presented.

As with all investment advice, you shouldn’t move forward without digging into the asset or company yourself. Assess its viability and decide if it aligns with your investment strategy. Also, analyze the amount of risk, as an endorsement doesn’t mean it’s a safe bet.

4. Focusing on Trends When Choosing Investments

In some cases, unique conditions occur that bring a particular investment to everyone’s attention. The GameStop stock rise in January 2022 is a prime example, and there are several cryptocurrencies that have seen meteoric rises over the short term. However, these upticks may not last, particularly since the buying activity can shift to a sell-off relatively quickly.

What’s important to remember is that a trend isn’t necessarily an indication that an investment has long-term merit. The GameStop stock rise wasn’t about the value of GameStop; it was a movement designed to show the power of small investors, allowing them to impact massive institutions. Essentially, it was about making a statement.

With cryptocurrency, trends can occur for a variety of reasons. While some may be based on the increasing validity of a particular coin, others may be scams. For example, pumping and dumping isn’t exceedingly rare within the altcoin landscape, and if the news travels through the right channels, investors of all kinds can get caught in the wave.

Often, trends create a fear of missing out, essentially invoking an emotional response in investors who worry they’ll fail to capitalize on these rapid upticks. As a result, it’s crucial to take a breath and do some research. Determine if the trend genuinely represents long-term potential or if it’s spurred by something else. Additionally, assess whether the investment fits with your overall strategy and risk tolerance. Ultimately, if you have doubts, it’s usually best to focus your investing on other assets.

5. Trying to Time the Market

Generally speaking, timing the market doesn’t work for long-term investors. First, getting the timing exactly right is almost impossible. No one knows precisely what an individual stock or broader market is going to do from one day to the next, so you can’t predict the precise moments prices will hit their lowest point.

Second, trying to time the market can lead to inaction. You’re essentially holding money outside of the market, waiting for the perfect moment. Even if it’s in a high-yield savings account, you’re potentially missing out on much better returns.

Bonus Tip: Invest What You Can When You Can

In many cases, your best bet is to invest what you can when you can. Whether that means committing a lump sum all at once – such as turning your tax return into a source of funds for investing right when you receive it – or using a dollar-cost averaging approach where you invest using a specific amount from every paycheck, you’re creating opportunities for long-term growth.

Plus, moving forward ensures that you don’t wait so long that you never invest. Even if some of your investments are made when the market is high, it’s important to remember that the markets generally trend upward when you look at the activity over years and decades instead of weeks or months. As a result, occasionally buying at a high point today doesn’t mean you don’t have growth potential, so keep that in mind.

Can you think of any other common investing mistakes people make? Did you make any of the missteps above and want to tell others about the experience? Do you have any advice for new investors? Share your thoughts in the comments below.

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What Is The Cost of Living In Key West?

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For many people, moving to Key West would be a dream come true. However, if you don’t live nearby, you may worry about whether the area is affordable. After all, living in a beach town typically comes with a price tag. If you’re trying to figure out if Key West is affordable for you, here’s a look at the cost of living in Key West.

The Cost of Living in Key West

Generally speaking, the cost of living in Key West is high. It’s a small beach community and a highly desirable area. Plus, as an island and based on its location off the southern tip of Florida, transporting goods into the region can be expensive, leading to higher prices when shopping.

As a result, prices for nearly everything are above the national average. Here’s a closer look at the cost of living in Key West broken down into categories.

Housing

When it comes to housing, you typically have to choose between buying and renting. Purchasing a home in Key West is quite costly. As of October 2022, the median sale price of a property came in at $917,500, which could make buying a budget-buster for many.

If you’re interested in renting, that also comes with a big price tag. A one-bedroom apartment typically runs $2,413 per month, while a two-bedroom can cost $4,400 per month.

When it comes to homeowner’s or renter’s insurance, you may see higher rates. This is particularly true since adding hurricane coverage is often viewed as a necessity.

Food

When it comes to food, the overall cost in Key West is approximately 5 percent above the national average. That puts it in line with cities like Miami, though it may not be high enough to completely derail your budget.

Transportation

Transportation costs about 10.7 percent more in Key West. In some cases, this is because it’s a smaller island, so there’s limited access to options, which can reduce competition. Additionally, bringing new vehicles to the area potentially costs more due to the location, and those expenses can be passed on to the buyer.

Gas prices are also higher in Key West than in many other parts of Florida. Due to the island’s location, you may also see higher auto insurance rates, depending on where you’re coming from, and you might need to add specialized coverage for hurricanes and similar natural events.

Healthcare

In Key West, the cost of healthcare is about 13.2 percent above the national average. Again, this is partially based on limited access, as fewer medical facilities can lead to higher costs.

Taxes

In Florida, there is a base statewide sales tax set at 6 percent. However, cities and counties can add to that, pushing this cost up. For Key West, that leads to a sales tax of 7.5 percent on most purchases.

For property taxes, a recently passed increase would set the tax rate at $2.14 per $1,000 of assessed home value. However, that may not take into account certain deductions or exclusions, so keep that in mind.

Utilities

While the utility rates themselves aren’t necessarily bad, your utility spending may go up if you move to Key West. The area frequently experiences high temperatures, and the costs of cooling can add up quickly. While the difference is less dramatic if your home is well-insulated and has a modern, efficient HVAC system, it can still be quite spendy when compared to other regions.

Does the cost of living in Key West surprise you, or do you think it makes sense based on the location? Do you consider the cost of living when choosing where to live or retire, or is it not a major concern? Share your thoughts in the comments below.

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My Company Offers A Standard 401(K)-What Does That Mean?

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When you’re starting with a new employer, you typically get access to a range of benefits. When it comes to retirement plans, many companies offer employees a standard 401k. If you haven’t had a 401k before, you may be wondering what a typical one involves. Here’s a look at the standard 401k, including what it is, how it works, and the benefits it can provide.

What Is the Standard 401K?

Technically, there isn’t a “standard” 401k, as every company’s plan can differ to a degree. However, the most common offering is a traditional 401k.

A traditional 401k is an employer-sponsored retirement plan that provides employees with a selection of investment options. That can include stocks, ETFs, mutual funds, or similar types of assets, though the exact ones available do vary between retirement plans.

Employee contributions are taken directly from their paychecks, making it easy to save for retirement. Additionally, they are pre-tax. You don’t owe income taxes on the amount you send to the retirement plan immediately. Instead, you’ll pay taxes on withdrawals.

How the Standard 401K Works

A standard 401k allows employees to set money aside in a retirement-specific investment account. In many ways, it functions similarly to investing outside of a retirement account. Often, you can select from a variety of stocks, bonds, ETFs, or mutual funds. Additionally, you can usually adjust your allocations over time, though there may be limits on the types of changes you can make.

Once a contribution is made, the requested assets are acquired. Then, those investments will grow or shift over time. While most increase in value over the long-term, economic conditions that cause stock market downturns will impact 401k portfolio values. As a result, the total value of the retirement account will fluctuate, though they generally trend upward.

Once you reach retirement age, you can make withdrawals without incurring any financial penalties. However, those withdrawals do trigger tax obligations, as that money is treated as income by the IRS.

Early withdrawals are potentially an option, but they can trigger a financial penalty depending on how the funds are used. Plus, taking money out early means missing out on future gains, so it’s best to wait until your retirement whenever possible.

The Benefits of the Standard 401K

Aside from being a simple way to set money aside for retirement, a traditional 401k comes with many other benefits. As mentioned previously, contributions can come directly from your paycheck, making it easier to set money aside. Additionally, the contributions are pre-tax, so they can reduce your current tax burden.

In many cases, employers also offer contribution matches with their 401k plans. With these, the company contributes up to a certain percentage of your income, based on the amount you’re contributing. In many ways, this is functionally free money that boosts the value of your portfolio. However, as with your contributions, you do have to pay taxes when you withdraw the funds during your retirement.

If you leave your employer, you may also have options about what happens to your 401k. Some companies may allow it to remain where it is, though that isn’t universally the case. Plus, you can often roll the account over when you exit, transitioning the funds to another retirement account instead. In some cases, that means you can convert a 401k into an IRA if you prefer.

Can You Opt-Out of a Company 401K?

In most cases, opting out of an employer-sponsored 401k isn’t ideal, particularly if the company offers matching contributions. However, if you prefer to invest for retirement on your own or need to pause your contributions due to a financial hardship, that’s usually an option.

Speak with your employer’s human resources department to explore the paths you can potentially take. They’ll be able to let you know whether pausing contributions or opting out entirely is possible and can help you assess the impact of that decision. That ensures you can make a sound choice before moving forward, allowing you to ensure you don’t experience any unexpected consequences.

Do you have one of the standard 401K options through an employer and want to tell others about your experience so far? Do you wish you had access to another kind of retirement plan, or is the 401K working for you? Share your thoughts in the comments below.

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Why Does Carvana Offer Better Deals Than Car Dealerships?

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When you’re shopping for a new car, finding the best possible deal is a common priority. As a result, most buyers turn to a variety of resources. Along with heading to local dealerships, many check out Carvana cars to see if the pricing is better, often being pleasantly surprised by what they find. However, it’s easy to assume that an excellent price isn’t what it appears. Fortunately, it can be the real deal. Here’s a look at why Carvana offers better deals than car dealerships.

What Is Carvana?

Carvana is a non-traditional car dealership that focuses on used cars. It was founded in 2012 and captured ample attention after installing car vending machines in several major cities.

The company focuses on online sales over a traditional dealership model. Along with the car vending machines for picking up a car after buying it, Carvana will deliver your recently purchased vehicle to your home if you prefer.

In many ways, Carvana is a leader when it comes to convenience. Fewer operating models make a used vehicle purchase quite as streamlined, which is why it’s become such an attractive option.

How Carvana Works

Primarily, Carvana operates in the used car space. They focus on high-quality but affordable vehicles, mainly targeting Millennials by introducing unique technologies and ample convenience.

Car purchases through Carvana are predominately handled online. Since that means buyers can’t see a vehicle in person before making a buying decision, the listings are highly detailed. Along with a slew of photos, you’ll see information about the specs and the results of Carvana’s in-house inspection. Additionally, you’ll be able to review photos that show any flaws the company discovered along the way, leading to reasonable transparency.

Another feature of Carvana that is designed to offset the risk of not being able to check out the vehicle in person is the return policy. Buyers have seven days to make sure the car is right for them. If not, they have the option to return the vehicle and get their money back.

If you find a car you’re interested in, you can begin the purchase paperwork with a few clicks. However, if another buyer has already started the paperwork for that vehicle, you’ll get a notification that the car is temporarily on hold, along with a timer that shows how long the other buyer has before the vehicle is released for sale again.

The purchase dashboard is pretty straightforward. You provide personal details, information about trade-ins, and delivery and pickup preferences. You also tell the company if you’re using a loan or cash to complete the purchase or even arrange financing through the application. Overall, the entire process takes between 10 and 20 minutes in most cases.

Why Carvana Has Better Deals Than Dealerships

First, it’s important to note that not every vehicle at Carvana is automatically the lowest price you can find. The pricing is based on several factors, and there are instances where you may be able to score something a little better by looking elsewhere.

However, Carvana generally comes out ahead. One main reason is that you don’t end up paying certain dealer fees along the way. Instead, Carvana doesn’t pass certain paperwork filing costs onto the buyer.

Second, this approach to selling vehicles eliminates certain employee-related expenses. They aren’t paying salespeople to be on the lot, and they don’t owe them commissions. The latter part impacts pricing in two ways. Along with lowering Carvana’s operating costs, it means buyers aren’t haggling with someone whose pay is dependent on convincing you to pay a bit more.

Third, Carvana doesn’t operate as many locations as some competitors with similar purchase models. That reduces its overall overhead, making it easier to undercut competitors by several hundred dollars on most cars.

Finally, Carvana does give you an easy way to trade in your current vehicle, but it isn’t necessarily offering you the best price. This may come as a surprise, considering some people using the site have seen unexpectedly high offers recently. However, that isn’t reflective of Carvana. Instead, that’s simply the state of the used car market.

By purchasing cars for as little as possible, Carvana can then sell them below their fair market value and still snag a tidy profit. The trick is that it’s the lower sales prices that draw people in, not the trade-in or cash offer prices. As a result, they hope that buyers with a vehicle to unload will simply accept the lower price because doing so is incredibly convenient.

Should You Use Carvana to Buy a Car?

Generally, there’s no reason not to consider Carvana when you’re purchasing a vehicle. Most customers say that you can expect great customer service if you need help. Plus, the pricing is based on avoiding negotiations, so even if you have to call the company, they aren’t going to pressure you into higher-priced options. The price on the website is what it is, and that’s that.

The purchasing process itself is reasonably simple and quick, too. If you look at financing options through Carvana, the rates are typically competitive as well (though it’s still a good idea to comparison shop). It’s also hard to beat the option to have your car delivered to your front door, and if you aren’t satisfied, you can arrange a return during the initial seven days for any reason and get your money back.

However, if you have a trade-in or a vehicle you’d otherwise like to sell, Carvana isn’t going to give you the best price. Since that’s the case, you may need to explore other options. Fortunately, there are plenty available, including many you can handle online to get quick cash offers. While it may take more effort than having Carvana pick it up, the significant price difference could make it worth the extra time.

Carvana Cars May Not Have Comprehensive Inspections

Additionally, while Carvana does an inspection before it sells a vehicle, understand that it isn’t always as comprehensive as what you’d get directly from a mechanic. Since that’s the case, get your own inspection right away. Then, if they spot a problem that you don’t want to mess with, return the vehicle to Carvana during that seven-day window and get your money back.

Finally, Carvana may not work for you if you aren’t sure what you want. Remember, there are no test drive options when you shop and buy online like this. The only way to get in and check out the vehicle is to buy it, and while you can return it within seven days, that’s a big step for a test drive. As a result, you may be better off going another route or, at least, doing some research before you head to the Carvana site, allowing you to figure out what you’re after first.

Have you purchased from Carvana and want to tell others about your experience buying Carvana cars? Did you consider using Carvana but decided to go in another direction and want to discuss why? Share your thoughts in the comments below.

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Can I Move Out Of My Parent’s House With No Money?

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How To Move Out With No Money

Figuring out how to move out with no money isn’t easy. In many cases, moving comes with some significant expenses. For example, there are deposits required when you rent an apartment. Additionally, you’ll need to have a way to get your belongings to your new place, as well as pay your bills moving forward. However, that doesn’t mean that you can’t move out of your parent’s house with no money. Here are some options that can help you make it happen.

Start with a Budget

Even if you don’t have any savings to support your move, you may be able to make it work, depending on your income. Create a budget that outlines your current expenses. Next, add in costs you’d need to handle once you move, including rent payments, utilities, renter’s insurance, groceries, and similar expenses. Usually, you can find the average cost for those expenses in your area with a bit of research.

Once you know what you’ll need to cover, compare that to your income. That lets you see if you can potentially afford to move out, as well as if you have room in your budget to start saving for deposits and moving expenses.

Focus on Low-Cost Rentals

While you may have visions of having a luxury apartment, if you don’t have any money set aside, you’re going to need to start out in a low-cost rental. This might include small studio apartments or roommate arrangements.

With the latter, you may be able to save a bit more on your move. For example, if a friend has a room they’re willing to rent – and the landlord allows it – you might not need to cover security or utility deposits. Even if you do have to contribute to a security deposit, what you’d need to pay could be far less than if you moved out on your own.

If you need to move out as quickly as possible, you may be able to talk to other family members or friends to see if you can stay with them for a short period while you get on your feet. However, you do need to have a frank conversation to ensure everyone’s on the same page regarding how this plays out. Additionally, it’s best if you can show a concrete plan – including a timeline – that lets them know when you’d be ready to move into your own place.

Sell Your Excess Stuff

If you want to reduce the cost of your move and give yourself a little cushion, sell any personal belongings that aren’t essential. While it could mean living a little sparsely initially, it lets you get a bit of cash that you can use to cover transporting your other property to your new place, handle security deposits, or build up a small emergency fund to make sure you’re ready for the unexpected.

Secure or Maintain a Source of Income

When you don’t have a financial buffer, maintaining a source of income is essential if you’re going to move out of your parent’s house. Ideally, you want something reliable and reasonably consistent, especially if you want to rent a place on your own. Otherwise, you may have trouble meeting the income requirements for the rental.

In some cases, you may want to supplement your core income, as well. Options through the gig economy can be excellent ways to bring in a bit more money. Plus, if you start before you move out, you may be able to build up some savings to support your move.

Live within Your Means

Living within your means is crucial if you don’t have a financial buffer. Make sure you keep your expenses as low as possible and focus on saving before you move and after you transition into your new place. An emergency fund provides you with some security, so it’s crucial to build one as fast as possible.

While this can mean forgoing niceties for a while, it’s a sacrifice worth making if moving out is important to you. So, focus on keeping your expenses down and stash as much cash as possible. That way, you’ll increase your odds of success.

Do you have any other tips that can help people figure out how to move out with no money? Did you manage to move out on a dime and want to tell others about your experience? Share your thoughts in the comments below.

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How Much Cash Should I Have In My Wallet?

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Today, carrying cash in your wallet can feel a bit antiquated. However, that doesn’t mean it isn’t a good idea to have some bills tucked away, just in case they become a necessity. If you’re wondering, “How much cash should I have in my wallet?” here’s what you need to know.

Why Should I Carry Cash in My Wallet?

One reason that carrying cash feels a bit old-school is that there is a slew of more modern payment options. Various technologies have made alternatives plentiful, allowing you to avoid hassles like going to the bank and speaking with a teller or using an ATM to get enough cash to pay for purchases.

Debit cards, credit cards, and mobile payment apps are generally more convenient, and many people rely entirely on them. At times, these other options also carry less risk. If you drop your cash by mistake, there’s little recourse if you can’t find it. With cards or phone-based options, you can shut the cards or accounts down temporarily, safeguarding your money until you get a new card or can replace your phone. Plus, you can dispute charges on a credit card if you didn’t make them.

In many ways, it may seem like the alternatives are naturally better choices. The issue is that they don’t always work. Here are some times when cash is a must.

Technical Issues

Stores can have technical issues that prevent card readers from working. Similarly, a tech problem might prevent phones from connecting to registers using near-field communication (NFC) technologies, stopping payment methods like Apple Pay or Google Pay from going through. Here, without an alternative form of payment like cash, you can’t complete a purchase.

Not Accepting Cards

While it may seem odd, not all merchants take cards. Generally, it’s rare that a retailer wouldn’t take some form of electronic payment, but some businesses do operate as cash-only for payments. This is more common if you’re not heading to a traditional brick-and-mortar store.

For example, if you want to eat at a food truck or are heading to a craft fair, your odds of a payment issue are higher. That means that, without a bit of cash, you may miss out on what a cash-only business has to offer.

Not Accepting Your Card

Similar to the point above, some retailers take specific card types but not others. This issue is more common with Discover and American Express, but it can technically happen with Visa and Mastercard, too. Without some cash available, you may not be able to complete necessary purchases. As a result, having a little money in your wallet is a wise choice, safeguarding you from the expected and ensuring you can access any retailer you’d like to use.

How Much Cash Should I Have in My Wallet?

When it comes to the amount of cash a person should have in their wallet, there isn’t a specific magic number that works for everyone. Instead, you need to consider the broader situation, allowing you to find a figure that’s right for you.

On a day-to-day basis, having about a day’s worth of typical spending cash is enough. For example, that might involve enough cash to put gas in your car to get to work, cover tolls or parking fees, and pay for a meal or two. For many people, that works out to $100 to $200, though some may be able to get away with a bit less or might require a little more.

If you’re heading out to an event – such as a fair or swap meet – then you may want to carry your full spending budget in cash. While many retailers that travel with events do accept cards, your odds of running into a few that don’t are high.

When you’re carrying a more considerable sum, don’t keep all of it in your wallet. Instead, consider splitting it up, putting some in your wallet and the rest in a concealed money belt. That way, if you drop your wallet, you don’t lose everything. Plus, many money belts are designed to prevent you from becoming a victim of pickpocketing, and they’re usually quite comfortable to wear.

How to Carry the Cash in Your Wallet

If you’re open to having some cash in your wallet, you need to make sure the bills are in the right denominations. Usually, only larger retailers are willing to accept $100 bills, so it isn’t wise to carry your cash in hundreds. Smaller businesses may feel that taking a hundred is too risky, or they might not have enough change available if your purchase total is small.

At times, even $50 bills may be hard to use. Again, some retailers won’t accept bills that large, and others may run into issues with change.

Since that’s the case, it’s usually best to stick with nothing larger than $20 bills. In fact, you may want to mix it up a little to give yourself some versatility.

For example, if you decide to carry $100 in your wallet, go with three $20 bills, two $10 bills, three $5 bills, and five $1 bills. That way, if you need to leave a tip for a meal in cash or make a smaller purchase, you can use smaller bills.

As with the total amount you carry, the mix of bills in your wallet may vary depending on your exact needs. Just keep in mind that $100 or $50 bills might be harder to use, so make sure most of your cash is in smaller denominations.

Are you surprised at how much cash you should have in your wallet? Do you think that carrying cash is a smart move or completely unnecessary? Share your thoughts in the comments below.

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These Are The 5 Best Retirement Gifts For Women

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These Are The 5 Best Retirement Gifts For Women

When a person retires, giving them a gift to celebrate the occasion is a common practice. However, choosing an appropriate present isn’t always easy. If you aren’t sure where to begin, here are five of the best retirement gifts for women.

1. Spa Gift Certificate

Most people view retiring as a positive. However, it’s still a significant transition, and that may cause some people to experience some anxiety. As a result, giving a gift that promotes relaxation can make a potentially stressful time easier to navigate. That can make a spa gift certificate a perfect choice.

Choose a spa that offers a range of services, allowing retiree to select treatments that they’ll enjoy most. Additionally, consider having a little extra on the gift certificate, as that may let them use the excess amount as a tip.

2. Hobby Items

During retirement, many people get to spend more time doing activities they enjoy. If the retiree has a favorite hobby, consider giving a gift that connects to it. For example, craft supplies, lessons that help them grow their skills, cooking equipment, or gift certificates to related stores could all work well.

3. Travel Gifts

Many people dream of traveling more when they retire. If the retiree wants to spend some of their newly available time exploring new cities, states, or countries, travel-related gifts can be a solid choice. You could provide them with a high-quality set of luggage, gift certificates to large hotel chains, or even a vacation package, depending on how much you’d like to spend.

4. Annual Entry Passes

For retirees that adore a particular type of attraction, an annual entry pass is a solid option for a retirement gift. Many museums, zoos, and aquariums offer yearly passes. Similarly, you can typically find annual passes for national or state park systems. With these gifts, you’re giving them the opportunity to spend time at their favorite attractions without having to pay to get in, which can allow them to spend more time there during the year.

5. Subscription Boxes

Today, there is a wide array of subscription boxes that can make great retirement gifts for women. Whether they’d appreciate a box of international snacks, wines from different regions, beauty supplies, puzzles, books from a specific genre, or nearly anything else, there’s likely a subscription box that can meet that need.

If you go with a subscription box, make sure that the duration is suitable. If you can pay for a full year, that’s ideal. However, if that isn’t in your budget, a three or six-month subscription can also work well.

Have you given any of the best retirement gifts for women listed above and want to tell others about the experience? Can you think of any other outstanding retirement gifts women may appreciate? Share your thoughts in the comments below.

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What Is Indebtedness And How Do I Avoid It?

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What Is Indebtedness And How Do I Avoid It

Many people have heard that indebtedness can lead to financial troubles. But what exactly is indebtedness, and how do you avoid it? Fortunately, the concept of indebtedness is pretty easy to understand. Additionally, it’s possible to prevent indebtedness – or keep it manageable – with some planning. If you’re wondering what indebtedness is and how to avoid excessive debt, here’s everything you need to know.

What Is Indebtedness?

In the simplest sense, indebtedness is the state of owing something to someone else. Traditionally, people use indebtedness to describe financial debts, such as credit cards, loans, or mortgage balances. However, it can also apply to the sense of owing someone for doing you a favor, leading you to feel obligated to return that favor in kind at a future date.

For the purposes of this article, the focus is on traditional financial indebtedness, primarily involving owing a lender based on previously borrowing money. Often, that form of indebtedness creates the biggest challenges for households, so it’s wise to have a plan for avoiding it specifically.

How to Avoid Indebtedness

Have a Dedicated Emergency Fund

When it comes to avoiding monetary debt, your best starting point is to build an emergency fund. This allows you to have some cash set aside to deal with the unexpected, ensuring you don’t have to turn to credit cards or loans to cover a cost that catches you off guard.

If you don’t have anything set aside for emergencies, make $1,000 your first target. Usually, that’s enough to cover a vehicle, renter’s, or homeowner’s insurance deductible, ensuring you aren’t struggling should an accident, fire, or similar incident occur. Plus, it can cover a wide array of other emergencies, such as an unplanned medical bill, car repair, or appliance breakdown.

Once you have $1,000 set aside, work on increasing the balance of that savings account. Build up to one month of household expenses, then shift up to three months. That can help you weather larger emergencies or a short period of unemployment.

When you gather up three months of expenses, you can choose a new target. Some people feel most comfortable with six or 12 months of household costs, as that can cover major emergencies or an extended period of unemployment.

Whenever you tap into your emergency fund, focus on building it back up once the situation resolves. That allows you to restore this critical cushion, making it easier to avoid indebtedness long-term.

Create a Reliable Budget

In some cases, debt is generated because households don’t plan for their spending needs. As a result, they overspend during the month, having little choice but to turn to credit cards or loans to cover any remaining expenses until their next payday.

By having a reliable, formal budget, you have a spending roadmap. You know how much it takes to cover your bills and debt payments, as well as handle costs relating to food, gas, utilities, and more.

Often, the easiest way to start is to review your spending habits over the past several months. That allows you to determine how much you’re spending in various categories. Then, create a simple list – ordering debts and other costs by their due date – and outline how much of your income needs to go to that expense.

If you have money left over, commit some of it to savings. Additionally, it’s wise to include “fun money” in your budget, giving yourself a small amount that you can use as you please for entertainment, items that are wants instead of needs, and similar purchases.

Make Saving Automatic

Since having money in savings can help you deal with emergencies or plan for larger upcoming expenses – such as home repairs, vehicle down payments, future appliance replacements, and more – making your savings routine automatically works in your favor. By automating your savings, you ensure that you don’t accidentally forget to move that money into the proper account.

Designate a specific amount from each paycheck that needs to go to savings. Then, set up a recurring, automatic transfer for the day your pay arrives (or the following business day if payment delays may occur). That ensures your money is moved in accordance with your plan without you having to physically manage the transfer every single payday.

In most cases, you can set up several transfers to different accounts every month. As a result, you can move cash into several accounts, allowing you to divide up the money based on individual savings goals.

Adopt a Cash-First Mindset

In some cases, using credit cards or loans to pay for various items feels like a quick, convenient option. However, the more debts you acquire, the harder they typically are to manage. Even if the monthly payments are reasonable, you’ll have more due dates to juggle. Plus, if you experience financial hardship or underestimate what you’re currently paying, you could quickly find yourself in over your head.

Additionally, debts typically come with interest payments. As a result, you’re spending far more by financing a purchase than if you used cash. If you rely on cash instead, you’ll have more money to direct to other goals or needs, including saving for retirement, a college education, a home, and more.

Instead of relying on debt, adopt a cash-first mindset. Make it a goal to use as little borrowed money as possible. For example, instead of financing an entire vehicle purchase, at least prepare a sizeable down payment in advance. That ensures you can keep the loan as small as possible.

Similarly, resist the urge to use a credit card to cover the cost of want if you can’t pay off the balance in full right away. While it could mean delaying a purchase, it saves you a significant sum in the long run.

Use the 72-Hour Rule

With the 72-hour rule, you don’t purchase any spur-of-the-moment wants right away. Instead, you wait for 72 hours after learning about the item before deciding if you’ll ultimately buy it.

The delay allows any immediate emotional reaction that can come from initially seeing a product to dissipate, allowing you to look at the purchase more realistically. In many cases, you’ll determine that moving forward with buying the item isn’t actually a smart move, allowing you to walk away. However, if you still want it, it can make you more confident about your decision.

This strategy isn’t just helpful when it comes to items you’re thinking about financing; it can apply to cash purchases, too. By using it at all times, you avoid spending money in a way you might regret later, allowing you to focus your spending on items that are more likely to be beneficial.

Pay More Than the Minimum

If you can’t pay the debt off in full right away, it’s wise to put forth an extra effort to knock down the balance quickly. Unless there is a stiff penalty for paying off a debt early, work to pay more than the minimum payment on at least one debt. Ideally, you want to focus on the debt that has the highest interest rate. By doing so, you can reduce the amount of interest you’ll need to pay over the life of that debt dramatically, resulting in financial gain.

Once you tackle the highest interest debt, you can move on to the one that now has the highest interest rate. Continue working through your obligations in this manner, and you can tackle what you owe in less time.

Increase Your Credit Score

Having an excellent credit score can actually help you avoid certain trappings that can come with borrowing money. Generally speaking, the higher your credit score, the better the borrowing terms. You’ll have an easier time securing low-interest rates on credit cards and loans when you do need them, which can make managing – and paying them off – easier.

Usually, the foundation of an excellent credit score is sound borrowing habits. Make your monthly payments on time, keep your credit utilization ratio low, and avoid opening unnecessary accounts. Maintaining a good credit mix – featuring a small selection of loans and credit cards in your history – can work in your favor, too, as it shows that you can handle different types of debt effectively.

Ultimately, while using credit cards and loans result in debt, when used responsibly, you won’t be overwhelmed by it. As a result, indebtedness won’t necessarily become an issue, allowing you to maintain a favorable financial picture while keeping your credit score up.

Do you have any other tips that can help someone avoid indebtedness? Have you used any of the strategies above and want to tell others about your results? Have you found your way back from indebtedness and want to share your experience? Share your thoughts in the comments below.

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Should You Really Fear A Recession Coming?

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Should You Really Fear A Recession Coming

Certain economic indicators show that spending is cooling, but inflation remains a major issue in the United States. While July figures were lower than June, the 8.5 percent figure based on July data is still near record-setting. As a result, an increasing number of Americans are worried that a recession is on the horizon. However, are recession fears justified, or will various steps taken by the government, the Federal Reserve, and typical consumers stave it off? If you’re curious about whether you should really fear an upcoming recession, here’s what you need to know.

Where Recession Fears Are Coming From

First, it’s essential to understand why Americans are generally worried about a recession. One of the biggest factors is inflation. Rising costs are apparent in nearly every spending category. From food to housing – essentially across the board – prices continue to climb.

Ultimately, higher costs diminish the purchasing power of a dollar. Additionally, the odds that inflation will remain an issue – at least in the short term – are relatively high. This is particularly true since, while wages have risen during 2022, pay rates aren’t keeping pace with inflation. As a result, even larger paychecks aren’t enough to offset inflation, and many households are worse off when it comes to purchasing power regardless of their raises.

Rising interest rates are also influencing the bigger picture. When interest rates rise, it generally slows spending since borrowing money is more expensive. While this is a positive when it comes to battling inflation, it can make a recession more likely. In many cases, higher interest rates can hamper the job market and broader economy. It essentially slows everything down.

Another troubling sign involves a decline in the gross domestic product (GDP). For two straight quarters, the GDP has fallen. Often, that’s considered a classic sign of a recession, either one currently occurring or one being on the horizon, depending on the broader perspective and the influence of other potential factors.

Can You Predict a Recession?

Whether a recession is genuinely on the horizon isn’t fully clear, as it’s challenging to predict what will happen in many situations. While some of the signs and concerns above are legitimate, they aren’t enough to guarantee that a recession will or won’t happen.

One reason that current inflation and GDP figures alone aren’t enough to declare a recession is that unemployment remains incredibly low. Typically, unemployment climbs during a recession. Pervasive labor shortages in many industries are essentially keeping that indicator from developing, so that a possible red flag isn’t present.

However, a similar situation occurred in the 1970s, right before a recession. The reason it wasn’t identified earlier is that conflicting economic indicators aren’t uncommon before a recession. Some data may make it seem like various aspects of the economy are strong enough to potentially offset troubles in other areas. Whether that turns out to be true can vary.

Additionally, recession fears can spur actions that actually prompt a recession. Many economic points are influenced or directed by consumer behavior. As a result, when consumers begin broadly changing their activities within the economy in response to concerns, they can potentially create conditions that make their fears a reality.

For example, consumers reeling back spending and increasing savings could shift the United States toward a recession, depending on the degree. That move signals that consumers lack confidence. That could alter the direction of many businesses, causing them to have to rethink their strategies and earnings potential. In turn, it could reduce investor confidence, leading to a stock market downturn.

After that, you can end up with a self-perpetuating cycle. The economy begins to look weaker, increasing recession fears. As a result, consumers alter their behavior, even more, impacting business plans and investor activity. Then, that cycle repeats, often until a positive sign shifts consumer behavior in the other direction.

Are Experts Predicting a Recession?

Generally speaking, economists don’t believe that the United States is currently in a recession. However, most agree that one could undoubtedly be on the horizon, potentially within the next 12 months.

While unemployment is currently low – a point that many experts use to show why a recession may not be guaranteed – some companies are moving forward with actions that could alter that picture in response to other economic woes. Some large tech companies have instituted hiring freezes. Others organizations have already initiated some layoffs since business growth has slowed and labor costs are rising.

Overall, these are the types of actions that can alter unemployment numbers. While some are responses to a post-pandemic landscape – as certain companies flourished during that period, only to see declines at things returned to “normal” – that doesn’t mean they aren’t impacting the equation. That’s particularly true since consumer reactions to such news can influence their behavior, potentially causing the scenario they were worried about to play out.

Couple that with declining GDP and shifts in consumer spending, and many feel that a recession is likely. However, that doesn’t mean it will inherently be devastating or long-lasting.

Is a Soft Landing Possible?

While many economic indicators suggest that a recession could occur, and some experts feel that one is likely in the coming year, that doesn’t mean a massive crash is going to happen. Some experts believe that a “soft landing” is more likely. Essentially, they feel an economic decline – potentially to the point of qualifying as a recession – could occur, but that it will be a gentler downturn.

Essentially, certain economists feel that the strength of the job market and a few other positives could prevent troubled areas from having the level of impact they otherwise would if unemployment was higher. As a result, even if a recession develops, it won’t be as painful for households and businesses to weather. While that doesn’t mean it wouldn’t be difficult, it’s less challenging than if job market data was also looking poorly.

Preparing for a Possible Recession

Ultimately, it’s wise to prepare for a possible recession. However, panicking and dramatically altering your behavior isn’t necessarily ideal. Instead, using tried-and-true strategies and a metered approach can help you get ready with greater ease, all without making the kind of drastic changes that might make a recession more likely.

Generally, the first step households should take to set some money aside in savings. If you don’t have any savings, try to get $1,000 in an emergency fund, giving you a small financial cushion. Once that’s done, you can slowly work your way up to one month of expenses, followed by three months of expenses if you have the ability.

Paying down high-interest debt is also wise. Along with not adding to your debt, work to pay off as much of what you owe as possible, as that can free up room in your budget. If you’re financially stable, one great place to start is to stop using credit cards. Then, look at your next payment, and make that the default payment amount moving forward.

Minimum payments on credit cards usually decline as your balance falls. However, by paying more than the minimum, you conquer the debt faster. Plus, if you end up in financial trouble if a recession occurs, you can transition to the minimum payment at that time, which will be smaller than if you used another approach.

Another great debt-related option is paying off any debts with small balances quickly, even if the interest rates are lower. By getting rid of the debt, you have one less monthly payment to worry about if you experience financial hardship. That can also make saving up several months of expenses easier, as the total cost of your expenses is lower.

Are recession fears dragging you down? Are you taking any steps to prepare for a potential recession, or is that not an option for you? Share your thoughts in the comments below.

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What Credit Score Is Needed For Care Credit?

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What Credit Score Is Needed For Care Credit

When a person has high out-of-pocket medical expenses, figuring out what to do can be a challenge. Fortunately, there are potential solutions. In some cases, Care Credit may give you a simple way to handle the costs, settling your balance with your provider right away. Plus, Care Credit often runs promotional programs that may allow you to avoid interest while you pay off what you owe. As a result, many people wonder, “What credit score is needed for Care Credit?” If you’re among them, here’s what you need to know.

What Is Care Credit?

Care Credit is a specialized financing option that focuses specifically on health and wellness-related costs. Essentially, it’s a healthcare credit card that is only accepted by participating providers, limiting its use to healthcare or wellness-related costs.

A wide array of providers accepts Care Credit. Some examples of the types of services you may be able to pay for using Care Credit include:

  • Dentistry
  • Dermatology
  • Eye Care
  • Hearing
  • And More

Often, Care Credit is usable if you’re getting elective or cosmetic procedures, suggesting you’re using a participating provider. You can also use Care Credit to cover veterinary costs for household pets.

How Care Credit Works

Care Credit works similarly to a store credit card, as borrowers can only use it at participating provider locations. Those interested in opening a Care Credit account can do so at a participating borrower. After providing details, they can learn if they are approved in mere minutes in most cases.

However, borrowers can also apply for Care Credit online if they prefer. This approach may be ideal if a borrower knows that they’re going to have an eligible purchase at a participating provider in the near future, as it allows them to ensure they’re approved first.

Once the account is open, borrowers can use it like a store card when paying for eligible services. They can simply inform the employee that they’re using Care Credit and swipe the card or provide the account number during checkout to cover the costs.

Additionally, Care Credit commonly offers short-term, no-interest financing options for paying off balances in full within a specific time period. Outside of the no-interest financing options, borrowers may be able to use promotional interest rates for larger purchases if they require more time to pay off the balance.

For instance, purchases that are at least $1,000 can get a reduced interest rate depending on the amount of time the borrower requests for the payoff. For 24 months, the APR is 14.9 percent; for 48 months, it’s 16.9 percent.

Beyond anything promotional, Care Credit has a high-interest rate. Its regular APR for new accounts is 26.99 percent (as of August 2022). While borrowers can avoid that rate if they pay off balances during the promotional period, it’s a steep penalty to pay if you fail to handle the purchases within those timeframes.

What Credit Score Is Needed for Care Credit?

Care Credit doesn’t advertise a specific minimum credit score to qualify for an account. While general advice usually recommends having a credit score of at least 620 or 640, some people anecdotally report being able to open a Care Credit account with scores closer to 600.

Generally, Care Credit is less stringent when it comes to credit scores than many other lenders. Instead, it uses an approach that’s similar to retail credit cards, which usually means lower requirements in regard to credit scores.

If you’re concerned that your credit score isn’t high enough to open a Care Credit account, you can go through the prequalification process online. The Care Credit website allows potential borrowers to enter specific details and get an initial decision in just seconds, all without impacting their credit score.

Once the prequalification process is complete, aspiring borrowers that are invited to go through the formal application process typically have solid odds of approval. As a result, the odds of your credit score being high enough are relatively good. However, a prequalification doesn’t guarantee approval.

Additionally, moving forward will result in a hard inquiry on your credit report. This can temporarily impact your credit score after the fact.

For those who don’t get an offer to apply after prequalification, that usually means you didn’t meet all of the minimum criteria to open an account on your own. However, you may be able to apply with a cosigner and get approved, so keep that in mind if getting a Care Credit account is legitimately important.

How to Apply for Care Credit

Applying for a Care Credit account is relatively simple. There are also several ways to go about it, giving you some flexibility about when you open an account.

First, you can apply during a visit with a participating provider. This option allows borrowers to cover unexpected healthcare costs at the time of treatment, which can be convenient if the total is higher than you initially expected.

Second, you can contact Care Credit by phone at 1-800-677-0718. If you want to speak with a live representative, you’ll have to call Monday through Friday between 9:00 am and 9:00 pm Eastern. Otherwise, you can use an automated system at any time.

Finally, you can apply online at the Care Credit website. For many, this is the simplest option. Just enter in the details on your own time and receive a quick decision. Plus, it allows you to apply at any time, day or night, and even handle the application before an upcoming appointment.

Regardless of the option you choose, the process isn’t unlike applying for any other credit card. You’ll provide specific details – including contact information, personal details, income data, and housing information – and undergo a credit check. After your account is reviewed, Care Credit makes a lending decision. If you’re approved, you can get a copy of your account number immediately. Thus, allowing you to use the account to handle qualifying costs right away.

Should You Use Care Credit?

Whether Care Credit is a solid option for you depends on several factors. First, can you pay off the balance owed before any promotional periods expire?

While no-interest repayment periods with Care Credit can be a boon, if you don’t tackle the balance within that time, the regular interest rate that then applies to the balance is incredibly high. In many cases, that APR is above what you’d find with a normal credit card, which can make Care Credit a bad deal for anyone who can’t pay off what’s owed before the promotional periods expire.

Second, can you support a new debt? It’s important to remember that not everyone qualifies for Care Credit. Additionally, applying for Care Credit has the same impact on your credit report and score as applying for any other credit card.

Depending on your current score, age of your accounts, credit utilization ratio, and other factors, you could see some notable changes to your score after the hard inquiry, even if you don’t open the account. If you do open an account, then you may see more dramatic shifts. If you are planning to secure other types of financing in the near future, you’ll need to make sure the impact of the Care Credit application doesn’t alter your long-term plan before proceeding.

Are There Alternatives?

Finally, are their alternatives better meet your needs? While Care Credit is helpful, it isn’t the only option for covering medical costs.

Depending on your current medical insurance, you may be able to take advantage of a health savings account (HSA) or flexible spending account (FSA) instead. With those, you’re contributing to a tax-advantaged plan that you can use to cover qualifying healthcare expenses, which may be better than paying interest on a debt.

You may want to explore alternatives like personal loans. Particularly if you’re concerned about handling the debt before a promotional period ends. Personal loans have a fixed interest rate and a defined repayment plan. Thus, allowing you to know exactly what you’ll owe and when you’ll have the debt fully paid off.

Are you surprised about the credit score needed for Care Credit? Do you think Care Credit’s overall accessibility is a positive or negative? Have you used Care Credit in the past and want to tell others about your experience? Share your thoughts in the comments below.

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