Many millennials have more credit card debt than emergency savings

Plus, how to spot a "garbage-y" mutual fund.

VIEW IN BROWSER | SUBSCRIBE Wednesday, March 8, 2023 CNBC Make It Money helps you be smarter as you earn, spend, save and invest. Millennials using credit cards as an emergency fund: 'That has to stop!' Millennials are the most likely generation to have more credit card debt than emergency savings, according to a recent report from Bankrate.    Some 45% of millennials (ages 27 to 42) qualify for this dubious honor, just ahead of Gen Xers (ages 43 to 58), who clock in at 44%.   Members of those generations may be using credit cards as an emergency fund, says Melinda Opperman, chief external affairs officer at Credit.org. "That has to stop!"    That's because, while credit cards give you the ability to pay things off over time, they hammer you with high interest payments. The average credit card APR is nearly 20%, according to Bankrate.    If your credit card debt exceeds your savings, focus on paying down the debt first while contributing whatever small amount you can to emergency savings. To build a $1,000 stash in a year, for instance, you'd have to sock away just $38 per biweekly paycheck. Read More Money Tip of the Week: How to tell if your mutual fund is 'garbage-y'   If you're a long-term investor, you likely own a mutual fund. These funds, which allow investors to "mutually" buy pools of stocks, bonds and other types of securities, are popular among individual savers as well as in workplace retirement accounts.    There are thousands of mutual funds to choose from out there, and they can't all be winners.     Some of them are downright "garbage-y" and could be dragging down your results, says Christine Benz, director of personal finance and retirement planning at Morningstar.    Worried you may have some trash in your portfolio? The No. 1 red flag is a high expense ratio, says Benz. High fees put funds at a huge disadvantage over time, and expensive funds are generally hesitant to trim prices, she says.    Search a fund's ticker symbol on Morningstar.com and navigate to the "Price" tab to see what it charges and whether the expense ratio is below average, average or above average compared with peer funds. The average passive fund charges 0.12%, while the average active fund charges 0.60%, according to Morningstar.  Read More Next Gen Investing: How to invest in 'extremely disruptive' A.I. technology AI is suddenly everywhere. In recent weeks AI chatbots have passed exams from law and business schools, penned a story for Make It and had a startlingly intimate conversation with a New York Times tech reporter.     Glossing over the existential questions that come with that news, let's focus on a money one: How do I invest?   One answer is a thematic ETF, a fund that invests in a basket of companies centered around a particular theme. If you're in the market for an AI ETF, keep the following rules in mind:   Read past the name. Some funds with AI in the name invest in AI companies. Others use AI to pick stocks. There's a big difference.    Look at the holdings. An AI ETF might hold small companies whose fortunes are entirely tied to AI. Others might hold Alphabet. Decide what kind of AI investor you want to be.    Don't go all-in. Thematic funds are risky. They often come with high costs and can rack up big losses if a whole theme goes south. Invest what you can afford to lose without derailing your plans.    Read More Worth the Money: Shearling-lined Birkenstocks I recently replaced my old slippers with a pair of shearling-lined Birkenstocks ($160, at birkenstock.com) and they might be the perfect house shoe. The lining keeps my feet warm in the winter but the open-toe design prevents them from getting too stifled by my overactive radiator. And as someone who struggles with hip and knee issues, arch support is a must – even while lounging around the house.   —Emmie Martin, Money Editor Chart of the Week: Unsubscribe Manage Newsletters Digital Products   Feedback Terms of Service Privacy Policy   © 2021 CNBC LLC. All rights reserved. A property of NBC Universal. 900 Sylvan Avenue, Englewood Cliffs, NJ 07632 Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes and Market Data and Analysis. Data also provided by THOMSON REUTERS