Money Management

Have a CD that’s about to mature? Read on to see what your next move should be. [[{“value”:”

Putting money into a certificate of deposit (CD) offers a lot of benefits. Not only do CD rates tend to be higher than savings account rates, but with a CD, the rate you lock in is guaranteed for a period of time.

If you opened a CD somewhat recently, you may have one coming due this month. It’s important to make a plan for that money and let your bank know about it before your CD renews automatically, which it may be set to do. Here are some options to consider.

1. Cash out your CD if you’ll need the money for a near-term expense

Maybe you expect to have to travel to a friend’s wedding this summer. Or maybe your car has been losing steam and you’re certain you’ll have to replace it later this year.

If you think you’ll need the money in your CD within the year, then your best bet may be to cash it out once it matures. You can roll the funds into a regular savings account and use them accordingly.

2. Replenish your emergency fund

Maybe you had to dip into your emergency fund recently to pay for a home repair or to cover an ER bill when you fell and needed stitches. At a minimum, you really want your emergency fund to have enough cash to cover three months of essential expenses. If you’re below that threshold, you may want to roll your CD into savings once it comes due.

Unfortunately, most Americans don’t have enough money in savings to cover three months’ worth of essential bills. SecureSave reported last year that 63% of U.S. adults couldn’t cover a $500 emergency expense on the spot. But if you have enough money at your disposal to build an emergency fund that can pay for three months of bills, then it pays to do so, even if it means forgoing the higher interest rate a CD might offer you.

3. Renew your CD or open a new one if you don’t need the money right away

Maybe you’re all set with emergency savings and aren’t anticipating any near-term expenses that are out of the ordinary. In that case, you may want to either renew your CD at your current bank or, if there’s a better rate elsewhere, take the money and use it to open a CD at a different bank.

This month in particular happens to be a good time to open or renew a CD. The Federal Reserve is expected to start cutting interest rates in 2024. Once it does, banks are apt to start paying less interest across a range of products, CDs included. So now’s a good time to lock in a CD, while rates are strong.

Take action either way

No matter what you decide to do with your CD, make sure to log into your bank account before it matures and make a choice. Some banks will renew your CD automatically for the same term if you don’t make an election ahead of your CD’s maturity date. That could leave you in a situation that doesn’t work for you.

For example, if you have a 12-month CD coming due this month and you don’t tell your bank what you want to do with that money, your cash might land in a new 12-month CD. But what if you don’t want to tie your money up for a full 12 months because you might buy a home later this year? That’s why it’s so important to make a decision one way or another — and make certain your bank knows about it.

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If you don’t get to Costco much, you may be tempted to allow your membership to lapse. See why one writer is holding onto their Costco card. [[{“value”:”

I live 7.3 miles away from my nearest Costco. However, I live in a college town, where thanks to traffic and what feels like a million students crisscrossing the street at any given time, it typically takes between 20 and 25 minutes to drive that 7.3 miles. For the past few months, it’s felt nearly impossible to carve out time to make a Costco run, and I’ve begun to wonder if I should cancel my membership before it renews. I tell myself that it won’t be forever — just until I can find the time to do some in-person shopping.

At least, that’s what I was thinking early last week. And then, as I researched grocery prices for another story, I ran across an article that scared me straight. Reading it was enough to send me down a rabbit hole, looking for others. The subject of each article involves which products are expected to become more expensive in 2024 and why.

What I read convinced me that now is no time to cancel my Costco membership. (By the way, I would feel the same way if we still had a Sam’s Club membership.) Here’s what I found.

Some meat may become pricier

An excellent article in DealNews explained why the price of pork may be on its way up this year. It can be traced back to California’s Proposition 12, a law that mandates larger (more humane) housing spaces for pigs, cows, and chickens. Farmers must either come up with the money to make their barns larger, or they’ll have to raise fewer pigs. Either way, there will likely be a cost to the consumer.

According to Statista, California is not even in the top 10 pork-producing states, but any shake-up in the supply chain can lead to price spikes.

Another article — this one from Gro Intelligence — talks about the shrinking cattle herd in the U.S. The combination of greater demand for beef and fewer cattle going to slaughter signals that beef prices will likely increase.

Where Costco comes in: We don’t typically buy beef, but paying more for pork will sting. I need to hold onto our Costco membership to have access to lower pork, fish, and poultry prices.

The cost of shipping is about to increase

I jump through hoops to avoid paying shipping costs when I shop online. However, even if shipping is advertised as free, it’s still built into the price I pay for online purchases. According to the USPS, here’s how much shipping costs increased on Jan. 21, 2024:

Where Costco comes in: So far, by ordering nearly everything I need online, I’ve gotten by. If higher shipping rates impact the prices of the everyday items I order online, it would be silly to cut off my access to Costco.

Car insurance companies face tough times

The cost of auto insurance has outpaced overall inflation lately, which will likely continue. Here’s why: The increased labor costs and expensive repairs that came into play during the pandemic have hung on for dear life. Simply put, it costs an insurance company more to get its policyholders back on the road than it did before COVID-19. And the more an insurer pays for repairs, the less it profits.

In addition, climate change has led to some gnarly severe weather, and when the weather gets bad, there’s an increase in vehicle damage and auto accidents. The situation has become so dire that some insurance companies have moved out of states with a higher-than-usual number of claims.

Where Costco comes in: One Costco benefit that I’ve never taken advantage of is a member discount on auto and homeowners insurance through CONNECT, part of American Family Insurance. I’ve had nothing but good experiences with American Family in the past, and I like the idea of access to Costco’s discounted rates.

Health insurers are feeling the heat, too

Like auto insurers, health insurance companies have spent recent years dealing with higher supply and labor costs. Today, experts suggest that the cost of employer-sponsored health insurance could jump by as much as 6% to make up for higher costs.

Where Costco comes in: Now is not the right time for me to give up on Costco pharmacy discounts. Thanks to our Costco membership, we can save up to 80% of a whole list of prescription medications.

Of course, it’s possible that none of these price hikes (other than shipping costs) will occur. However, what I realized as I doom-scrolled through personal finance articles last week is that now is not the time to let go of potentially deep discounts.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Dana George has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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Don’t want to join Costco? You can shop online without a membership. But read on to see what pitfalls you might encounter. [[{“value”:”

Costco is unlike most other grocery store chains in that you need to be a member to physically shop there. To be technical, you can get in with a friend who has a membership or with a Costco Shop Card, but generally, it’s fair to say that you need a membership to enter.

But while you have to show your membership card at the door to visit a Costco store, you don’t need to enter your membership number prior to accessing Costco.com. The warehouse club giant’s online site is accessible to non-members, and you can place an order as a non-member as well.

That said, there are certain pitfalls you might encounter if you shop at Costco.com as a non-member. Here’s what you need to know.

1. You’ll face a surcharge

The membership fees Costco charges help the warehouse club giant offer competitive prices to customers. If you’re not paying that fee, Costco will allow you to buy items online, but you’ll have a 5% surcharge tacked onto your order. So if you’re buying $100 worth of goods, your non-member cost will be $105.

2. Certain items will be off limits

Some of the items that Costco sells online are members-only. This means that even if you’re willing to pay a surcharge, you won’t have the option to purchase items that fall into this category.

The number of members-only items on Costco.com can vary from one month to the next. You may, however, find that some of the top deals on the site are only available to members.

Right now, for example, Costco is offering $110 off of the Dyson Outsize Extra Cordless Stick Vacuum. But you can’t order this item as a non-member.

You may want to give a membership a try

If you find that you’re shopping on Costco.com pretty often as a non-member, you may want to consider buying a membership to open up your product pool and avoid surcharges on your orders. Right now, a basic Costco membership costs $60 a year, while an Executive membership, giving you 2% cash back on your purchases, costs $120.

The basic membership could especially make financial sense if you tend to spend a lot of money on Costco.com. Once you spend more than $1,200, the $60 basic membership pays for itself in the form of savings on surcharges. So if you’re spending roughly $100 a month, every month, on Costco’s website, getting a membership could pay off.

Plus, with a membership, you get access to Costco’s physical stores. And if you think the chain’s online prices are competitive, you should know that in-store prices tend to be even lower.

Granted, some of the items you’ll see on Costco.com aren’t available in stores. But products like snacks and household essentials are typically available in both formats. So buying a membership could lead to even more savings.

Plus, Costco wants customers to be satisfied with their memberships. If you buy one and it doesn’t work out for you, you can cancel and get a refund. So all told, it’s a pretty low-risk proposition, but it could save you a lot of money all in.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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Are home prices ever going to come back down to earth? Read on to find out. [[{“value”:”

In 2021, the housing market pretty much blew up once mortgage lenders started offering up record-low interest rates during the second half of 2020. Because mortgages were so inexpensive, buyers started clamoring to buy homes, driving their prices up significantly.

Since 2022, mortgage rates have been climbing. And it would be fair to classify mortgage rates in 2023 as high compared to recent years, even though historically, they were far from the highest rates ever recorded.

Despite that, home prices rose substantially in 2023. This past December, annual home price growth was measured at 5.5%, according to data from CoreLogic. Not only that, but CoreLogic says that year over year, U.S. home prices have recorded annual gains since early 2012.

If you’re looking to buy a home, you may be wondering when to expect prices to come down. At this point, it may be time to face the reality that, barring a housing market crisis, home values aren’t going to fall a notable degree across the board.

But that doesn’t mean you’re doomed as a home buyer. If you take these steps, you may find that you’re able to find a home that’s affordable to you.

1. Be open to different neighborhoods

If you’re seeking out a home in a desirable neighborhood, expect to pay a premium. It’s that simple. But if you give an up-and-coming neighborhood a chance, you may find that you’re able to get in at the right price before demand soars.

Remember, a lot of the so-called “top” neighborhoods you may be looking at now were, at one point, being developed. Chances are, years ago, home prices in those now-desirable neighborhoods were much lower. If you’re willing to be patient and give a neighborhood time to bloom, you may get in at a reasonable price.

2. Be willing to make cosmetic changes

You may not want to buy a home with structural issues or plumbing or electrical work that isn’t up to code. That could introduce a world of headache — and constitute a huge expense.

But you may want to consider buying a home in sore need of cosmetic work. Some of that work may be reasonably inexpensive to tackle. And you may be equipped to do a portion of it yourself.

Plus, cosmetic changes don’t tend to be urgent, so there’s less pressure to get your home into shape quickly. If you buy a home whose electrical wiring is outdated, that’s a problem — one you’d probably want to address before moving in.

Ugly wallpaper isn’t dangerous — it’s just ugly. So if you’re willing to deal with a home that’s lacking in the aesthetics department, you might manage to pay a lot less money for it. From there, you can beautify it as time and your personal finances allow for.

Don’t give up hope

Unfortunately, home prices might very well keep climbing year after year from this point onward. But that doesn’t mean you won’t ever end up in a position to buy.

Also, while mortgages are pretty expensive to sign at this point, rates have the potential to come down. You shouldn’t anticipate the same record-low rates buyers had at their disposal in 2020 and 2021, but you may find that you’re able to pay a much lower interest rate on a mortgage in a few years from now than what you’d be looking at today. That won’t make a home’s purchase price less expensive — but it’ll make it less expensive for you to borrow to buy that home.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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