Money Management

2024 could bring slowing inflation, interest rate cuts, and rapid developments in AI. Find out how these big economic factors could impact your money. [[{“value”:”

In an increasingly globalized world, what happens in the wider economy can have a direct impact on your personal finances. From decisions by central banks to technological advancements, here are three trends to watch in the year ahead.

1. Inflation is slowing

You don’t need to be an economist to know how much high inflation can eat into your bottom line. It pushes up prices and means our dollars just don’t go as far. The good news is that inflation is slowing. Overall, the U.S. cost of living rose by 7% in 2021, 6.5% in 2022, and 3.4% in 2023, according to the Bureau of Labor Statistics.

Various experts say we might finally see the back of the inflation bogeyman in 2024. JPMorgan predicts that living costs will rise by about 2.4% in 2024, though there will be variations in different spending categories.

What it means for your wallet

Sadly, while inflation has slowed, it doesn’t mean prices will come down. They will just rise at a slower rate. That means many of your living costs will still be significantly higher than they were a few years ago. For example, the U.S. Census data shows the average household spent $4,935 a year on food at home in 2020. By 2022 that figure was $5,703.

If you’re having trouble making ends meet, don’t wait for prices to fall. Instead, see if there’s any non-essential spending you can cut that might give you some wiggle room. Perhaps there’s a subscription you aren’t using or some utility bills you could reduce. You might also look for ways to bring in some extra cash — whether that’s a side hustle, taking on some extra work hours, or asking for a pay raise.

2. Interest rates may fall

Higher interest rates are the bitter medicine we’ve all had to swallow as the Federal Reserve attempts to bring inflation under control. We deal with several interest rates in our daily lives, including the interest we pay on credit cards and mortgages and the rate we get on our savings.

The federal funds rate, which is the rate that banks pay when they loan or borrow money overnight to or from other banks, has a big influence on all of them. The Fed reduced the rate to 0% to try to offset the economic impact of COVID-19. But over the past two years, it has increased it to over 5%, the highest it’s been for over two decades.

2024 might be the year those rates start to come down. If inflation eases, various analysts, including those at EY-Parthenon, predict rate cuts could come in late spring or early summer.

What it means for your wallet

A reduction in rates could ease pressure on borrowers and would-be borrowers. The impact isn’t always immediate and there can be unexpected side effects. For example, mortgage rates might go down, but this could increase housing demand, which may also push house prices up. Rates on credit cards and personal loans could also fall.

If you carry a balance on your credit card, even a reduction of 1% or 2% can make a difference. For example, let’s say you owe $5,000 in credit card debt. You plan to pay it down at $200 a month. According to our credit card interest calculator, here’s how that might play out:

On the flip side, the high savings rates we’ve seen could wane as well. Some high-interest savings accounts have APYs of 5% or more right now. If rates fall, so could these returns. If you want to secure higher rates now and are prepared to lock your money away for six months or a year, you might consider opening a certificate of deposit. Learn more about the differences between a CD and a savings account.

3. Artificial intelligence will get more intelligent

AI has been around for some time, but it really came to mainstream attention in 2023 with the launch of chatbots like ChatGPT. In 2024 we can expect to see AI develop even further and reach even more aspects of our lives. An IBM article said, “Nations worldwide are expected to prioritize its development in a manner reminiscent of a new space race.”

What it means for your wallet

A recent Gallup survey showed that 22% of workers fear AI could replace them at work. AI will certainly change our workplaces and may cause job losses. But try to see it as something that could make your life easier, rather than something that might take your job. Look for ways to keep learning new skills, and think about ways AI can help you do your job better.

If the worst does happen and you do lose your job, an emergency fund can make a big difference. If you don’t already have three to six months’ worth of living expenses socked away, see if you can save a small amount each month until you do.

Bottom line

Change is one of the few things we can always count on, and there are some strong global economic winds at play as we head into 2024. If you can live within your means and even save a portion of your income, you’ll be better equipped than many to navigate whatever the global economy throws at your finances.

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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.Emma Newbery has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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A recent study found that for 25% of travelers, a lack of money could keep them from traveling in 2024. Find out how to travel more affordably this year. [[{“value”:”

Many people put off travel for financial reasons. Before spending money on a vacation, it’s wise to consider whether you can afford it. But if you’re delaying making plans because you assume travel is out of your budget, you should know that affordable travel options exist. I’ll share a few ways to travel without spending beyond your means.

25% of travelers think a lack of money will limit travel

Going (formerly Scott’s Cheap Flights) is a flight deal service helping travelers score cheaper airfare. The company’s The State of Travel in 2024 report examines the current travel climate.

Travelers were asked to provide information about their 2023 travels and whether it matched the initial expectations they had in mind for the year. They were also asked to share their expectations for 2024 travel.

The study found that for 82% of respondents, travel remains a critical or highly important factor in their happiness this year. Study respondents were asked to share what barriers they expect to keep them from traveling in 2024.

A lack of time off from work or school and a lack of money remain top concerns for travelers, as they were in 2023. In fact, 25% of respondents worry that a lack of money will keep them from traveling in 2024. As everyday costs rise, it’s understandable that people are concerned about the affordability of travel.

Always keep your finances top of mind

It’s essential to consider your finances before making any money-related decisions, including making travel plans. Before taking a trip, check your bank account balance and consider your upcoming expenses to decide if you can afford to travel.

If you’re feeling discouraged, don’t fret. You can start saving for a future vacation. Opening a high-yield savings account is recommended if you’re building a vacation fund. You’ll earn interest while your money sits in the bank.

Even with a minimal budget, you can prioritize travel. It’s possible to plan an exciting travel adventure without racking up expensive credit card debt.

Here are a few suggestions to make travel more affordable.

1. Seek out flight deals

Before booking airfare, look for flight deals. Pay attention to social media posts and email newsletters from your favorite airlines so you don’t miss out on extra discounts. You can also subscribe to airfare deal services to receive flight deal alerts by email. Going is one example of a company that provides this service.

2. Put your credit card rewards to use

Using rewards credit cards to pay for everyday purchases can be a win for your wallet. Many travelers redeem their credit card rewards points or miles for free or nearly-free travel. Review our best travel rewards credit cards list to explore your options.

3. Travel closer to home

You don’t have to travel far to explore new places. Staying closer to home is one way to keep your travel costs reasonable. Consider planning a road trip if you want to avoid pricey airfare.

4. Use a search tool to compare prices

You can use technology to your advantage. Pricing tools like Google Flights can help you compare prices between multiple carriers. Google also has hotel pricing comparison capabilities. There may be cheaper options available than you’d expect.

5. Travel in the low season

Another way to keep your travel spending in check is by planning your adventures in the offseason. You’ll pay higher prices when traveling during the spring and summer when many other people also take vacations. But off-season travel can be cheaper, and you’ll likely deal with fewer crowds and shorter lines.

Try out these tips as you outline potential travel options for 2024. Always keep your finances in mind, and be strategic when making plans to look for ways to keep your spending to a minimum. For additional tops, check out our personal finance resources.

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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.Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.

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Some spending is required, other spending is just nice for quality of life. These items aren’t actually either. Here’s why. [[{“value”:”

Many of us have things we spend money on that we know we really shouldn’t. Then there are those things that we spend money on without even thinking about it at all.

Having more awareness of your personal finances is a big part of keeping them healthy, so it’s wise to take stock of both types of purchases. And the ones that are causing trouble? Kick ’em to the curb this year. Like these.

1. Bottled water

More than 92% of the U.S. population is served by a safe community water source. So the vast majority of folks drinking bottled water are likely doing so because of taste, not safety.

Instead of wasting money (and creating waste), upgrade to a home filter system and a good reusable water bottle. Pitcher filters, built-in refrigerator filters, faucet filters, whole-home filters — there are tons of ways to make it fit your needs and budget.

As for water on the go, simply keep your eyes peeled while you’re out. Many public spaces, including airports, venues, and stores, will offer filtered water fountains (typically located by the restrooms).

2. Amazon Prime

While I don’t have a hard stat on this one, I’d place a healthy bet that most Amazon Prime members are spending way too much money on Amazon. There’s something about one-click shipping that makes you think, “Why not?”

Another issue? It trains you to go to Amazon first, without even glancing at any other retailer. This may have been fine 10 years ago when Amazon was cheap — but now Amazon is cheap, as in full of junk, and yet somehow still expensive.

It’s rare that Amazon actually has a price much lower than what I can find locally, and that’s especially true for brand-name items. (Shoutout to Costco.) It’s also assuming you don’t get a fake or counterfeit item, which is a growing risk with Amazon listings.

Save yourself the $139 annual fee — plus however much you don’t overspend — and cancel Prime this year.

3. Meat every meal

I’ll be the last person to suggest anyone give up meat cold turkey (pun intended). I certainly haven’t. However, we have embraced semi-regular meatless dinners in our house. We’ve also started to reduce how much meat we eat per meal, replacing it with larger portions of veggies.

Here’s my reasoning for adding meat to my buy-less list:

Fatty and processed meats are known to cause heart disease and cancer. A plant-forward diet is better for your mental and physical health.Meat production results in twice as many greenhouse gasses as plant-based foods. Reducing how much meat we eat is one of the best ways we can fight climate change on an individual level.Meat is expensive. I spend less at the grocery store when I buy less meat.

I know that my first two points won’t move most — or even that many — folks. But that last one will hit you right in the pocketbook. Have you seen the price of beef? A pound of ground beef at my local market is more than $6!

Seasonal and/or frozen vegetables and dried beans are surprisingly versatile (and delicious), and you can usually buy them in bulk for a fraction of your meat budget. Beans plus rice is also a complete protein, so you’re not going to miss out on that important nutrient.

4. Poor-quality clothing (also known as “fast fashion”)

Fast fashion is bad for our budgets — the average household spends more than $110 a month on apparel — it’s bad for the environment, and it has frankly ruined thrift stores. So I’m putting it firmly on my “No Buy” list this year.

“In season” is for produce, not pants.

Well-made clothing costs a bit more upfront, but it will last for years with proper care. Since you don’t need to keep buying a new one every few months, you’re coming out ahead. (You can also get it tailored to fit without worrying that it will fall apart in the tailor’s hands!)

Plus, people can see quality. The nicest piece of knock-off fast fashion from the big box store will never look as good as a well-made piece of clothing, especially if it’s been tailored to fit you.

5. New tech

Everything new is old again. Most of us are guilty of pondering that upgrade every time our two-year-old tech takes too long to load a video or website. But even if you go top-of-the-line this time, it’ll lose its shine in a few months when yet another new model comes out.

Before you spend $1,000 or more on a new device, see what you can do to zhuzh up your old one. Is it running slow? Clear out older data — you should regularly backup photos and videos anyway, just in case — and delete apps/programs you haven’t used in a while. Just tired of looking at it? Get a new case, something with pizzazz.

At the end of the day, even if it’s a little slower than you may want, chances are good your current tech still does the job. And you know what, if you get a little too frustrated by those loading wheels? Consider it a sign. Put the device down and step away for a while.

I’m a big fan of spending money that improves our quality of life. But some items only appear to make things better on the surface. In reality, your gain is likely a lot less than you think. Consider how these purchases are impacting your own life, and whether your money is better spent elsewhere.

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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.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Brittney Myers has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Costco Wholesale. The Motley Fool has a disclosure policy.

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EVs are great for the environment, but they can be tougher on your wallet than many expect. Here are four EV costs you don’t want to overlook. [[{“value”:”

There’s a lot of talk about savings in conjunction with electric vehicles — saving the planet, saving money on gas, and saving time thanks to fewer maintenance requirements. But EVs bring plenty of unique costs as well.

If you’re thinking about purchasing one in 2024 or beyond, it’s important to be aware of these so you don’t run into an unexpected headache. Here are four EV expenses you may not have thought about.

1. Higher auto insurance premiums

Several factors influence auto insurance premiums, but one of the most significant is the vehicle’s make and model. More expensive vehicles cost more to fix, so insurers charge more to cover them. Though EV prices are coming down, they remain significantly more expensive than their gas-powered counterparts. In some cases, they can cost over $10,000 more than comparable gas-powered models.

EVs also have specialty components that fewer mechanics know how to fix. Those that do often charge a premium for their work. We may see these costs come down in the future, but for now, drivers have to budget for them.

The best way to do this is to grab quotes from several top car insurance companies. Enter the vehicle you’re thinking about purchasing and see how much the insurance premiums are. Compare this to what you’re currently paying to decide if that’s feasible for you.

2. Higher registration costs in some states

Many states use gas taxes to help construct and maintain their highways. Owners of gas-powered vehicles frequently fill up and contribute to this fund. But those driving electric vehicles don’t need to. As EVs have gained market share, some states have felt the pinch this lost revenue puts on their budget.

To make up for it, 24 states currently charge higher vehicle registration fees to EV owners. These extra costs go toward highway maintenance. The surcharges vary by state, from just $50 more in Hawaii to $200 in Ohio, West Virginia, and Wyoming. Keep in mind that these are annual charges and states may increase them over time.

3. Cost of a home charger

Public EV chargers are useful when you’re out and about, but many EV owners also choose to invest in home chargers so their cars are ready to go at a moment’s notice. This is a one-time cost, but it can be pretty expensive, especially for those who opt for faster chargers.

A low-end charger costs between $300 and $600, according to Capital One, plus labor costs can add another $1,000 or more. The fastest charging stations can cost $12,000 to $45,000, plus labor costs.

It’s best to price out your options ahead of time. If you’re not able to afford a home charger now, you may have to save up for one. You might also want to estimate the electricity usage, as this will be an ongoing cost once the charger is installed.

4. Lost time in cold weather

Recent news reports have highlighted a problem that many EV owners hadn’t thought much about before: Freezing temperatures can make EV batteries drain faster and charge more slowly. This can result in hours of waiting at charging stations in unpleasant weather.

For most, this isn’t a direct financial cost, though it is inconvenient. But for those who use their vehicles for work, like ride-hailing drivers, it could take a serious toll on their income. A hybrid vehicle might be a better option for these individuals.

None of this is intended to dissuade you from purchasing an EV if you really want one. There are plenty of things to love about them, too. But it’s important to have a balanced perspective of the pros and cons before you make the jump. If you’re a little hesitant, you may prefer to wait a year or two for EV prices to drop before buying.

Our best car insurance companies for 2024

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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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Costco is a great place to get deals, but it’s easy to waste money if you aren’t careful. Find out three ways you could be throwing away money. [[{“value”:”

Costco can be a great place to get good deals. It’s worth going there for its $1.50 hot dog and soda combo alone. But, while bulk-buying at the warehouse club can keep your credit card bills down if you’re smart about it, Costco can also be a major money trap if you aren’t careful.

You should be on the lookout for these three ways you may be wasting money at Costco so you can avoid them.

1. You’re not using a shopping list

The average Costco shopper spends around $150 per trip. And, for many of these shoppers, a good portion of this money is a result of impulse buys.

In fact, Reddit users regularly comment about not being able to “get out the door without dropping at least $300,” and many also explain they go intending to spend a lot less money than they do (one user gave an example of trying to spend $60 and walking out with $200-plus worth of stuff).

It’s not a surprise that so many people tend to just add stuff to their Costco cart. The store is set up to force you to walk past highly desirable and otherwise tempting items to get to the essentials, and it also often offers samples to boot so you’re enticed to try something delicious and take a box home.

If you’re not going with a list, you’re even more likely to fall victim to these impulse buys since you won’t have a clear idea of what you went to the store for in the first place. And if you don’t go in with a clear idea of your needs, you may also end up buying things you already have at home. Doubling up can be a big problem when we’re talking about bulk items that take longer to use up and require more storage space.

To stop this unnecessary spending, always shop with a list. If you see something that isn’t on it, you can add it to your list for your next trip. That way, you’ll have time to think about whether this is really something you want money coming out of your bank account for, and you won’t just buy it because you’re caught up in Costco’s magic spell.

2. You’re buying things you won’t use up

Since Costco sells stuff in bulk, it’s also easy to waste money by buying so much of something that you can’t use it up before it goes bad. Let’s say, for example, that you bought a 20-count variety pack of GoGo SqueeZ YogurtZ for $14.99 or about $0.75 per yogurt. This is cheaper than the 10-pack of GoGo SqueeZ at Walmart which is $8.48 or about $0.84 per yogurt.

But, what if you can’t eat 20 yogurts before they expire? What if you only eat 10 and then you’re done with your yogurt fix? You have just wasted $6.51 and bought an extra 10 yogurts you had to toss in the trash.

It’s not worth buying in bulk unless you’re sure you can use up the products before they go bad. Consider your family’s current usage of a product before you buy it at Costco. If you eat something once a week, don’t buy a 24-pack at Costco unless the expiration date on the item is at least 24 weeks out.

3. You’re buying products before you’re sure you like them

Finally, you could end up wasting a lot of money at Costco if you buy a bulk item before confirming you actually like it. It’s one thing to buy one small box of cereal or one bag of a new flavored chip at your standard grocery store and find out the taste doesn’t suit you — it’s another to buy an eight-count pack of chips or an industrial-sized box of cereal.

Always test out products on a smaller scale first, then see if you love them enough to buy Costco-sized amounts.

By avoiding these three common ways to waste money at Costco, you can make sure your warehouse club membership is good for your personal finances.

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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.Christy Bieber 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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A monthly mortgage payment consists of more than the cost of a house. Here’s how to calculate payments for a $200K house. [[{“value”:”

Given the ever-changing mortgage interest rates, we thought it would be interesting to find out how much the monthly mortgage payment would be on a $200,000 home. The precise amount would depend on the buyer’s down payment, how much they pay for homeowners insurance, and the rate of property tax they’re responsible for. To make it a bit clearer, we’ve broken our calculations down into tables.

Principal and interest only

When you take out a mortgage, your monthly payment consists of repaying more than the principal (the amount you borrowed) and interest (the rate you’re paying to borrow the money). Typically, your payment also includes funds that go into an escrow account. In short, an escrow account holds the money that will be used to pay property taxes and homeowners insurance. When it’s time for property taxes or homeowners insurance to be paid, the bills are sent directly to your mortgage lender.

As of this writing, it is possible to snag a 30-year mortgage with a rate of 6.25% APR from one of the best lenders. Chances are, by the time you read this, the rate may have dropped slightly. However, we’ll base all calculations in this article on a 6.25% APR.

Note about down payments below 20%: If you make a down payment of less than 20%, your mortgage lender will also charge you a monthly fee for private mortgage insurance (PMI). PMI protects the lender if you stop making mortgage payments. Your mortgage servicer must automatically stop charging you PMI when your principal balance is scheduled to reach 78% of the original value of your home, even if you don’t personally make the request. In the case of a home with a $200,000 value, PMI will drop off when the principal balance hits $156,000.

PMI ranges from about 0.50% to 1.50% of the loan amount per year. The annual premium is then broken down into monthly installments. For example, a loan amount of $190,000 would carry a PMI ranging from $950 to $2,850 annually or $79 to $238 per month. The exact amount depends on factors such as loan size, credit score, down payment amount, and debt-to-income (DTI) ratio.

Principal, interest, taxes, and insurance

This table will look at roughly how much you can expect to pay based on different tax and homeowners insurance scenarios. For example, your monthly payment will be higher if property taxes in your area run $6,000 annually than they would be if your property taxes were $2,400. For the sake of simplicity, we’ll say the annual premium on your homeowners insurance is $1,200.

With $2,400 annual property taxes:

With $3,600 annual property taxes:

With $4,800 annual property taxes:

With $6,000 annual property taxes:

Once you know how much your principal and interest payment is going to be, figuring your total is as easy as dividing your homeowners insurance by 12 and doing the same with your annual property tax.

Add the four numbers together (principal plus interest plus homeowners insurance plus annual property tax), and you have your total monthly mortgage payment.

To get the best rate on homeowners insurance, compare prices with a few different insurers. You may also be able to save by bundling your home auto insurance policies. And if you’re concerned about the price of property taxes, check with your real estate agent to find out which areas of town are more affordable from that perspective.

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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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