Money Management

Shopping at Costco can do wonders for your personal finances due to its low prices. Learn if you should shop in-store or at Costco.com? 

If you want to buy something from Costco, you have two choices for how to do it. You can shop online at Costco.com, or you can visit the warehouse club and make your purchase in-store.

Shopping online versus buying things at your local warehouse club has some important differences, though. Here are four of them you should consider.

1. Online items are typically priced higher

If you want to pay rock-bottom prices for your items, you need to visit the warehouse club and buy them there.

Since there are extra shipping and handling costs incurred by the warehouse club when you shop on the internet instead of in-store, items purchased online are marked up to help offset this added expense.

2. Non-members can still shop online

One of the biggest differences between the warehouse club and the online website is that non-members are allowed to shop online.

While Costco.com charges a 5% surcharge for non-members buying items over the internet, at least those without a membership are allowed to take advantage of its deals if they shop online.

At the warehouse club, on the other hand, you’ll either need to go with a member or have a Costco gift card (which only members can buy) to be allowed to buy most items if you aren’t a member yourself.

If you’re not going to shop often enough to make paying a Costco membership fee worth it, paying this surcharge to shop online and having your items delivered may be your only option.

3. The selection online is better

Costco warehouse clubs are big, but there is a limit to how many products the club can carry. As a result, you’ll likely find a better selection online than you would if you visited in person — especially if you’re planning on buying more unusual items.

On the flip side, not every item found at a Costco warehouse can be purchased on the website, so don’t wait to buy and assume you’ll come home and find your desired item on the internet. If you see something in-store at a good price that you need, you may want to just buy it there.

4. You have more payment options online

When you shop in-store, you can pay only with Visa if you want to use a credit card. Otherwise, you’re limited to paying with cash, a check, or a debit card linked to your bank account. If you shop online, though, Mastercards are also accepted methods of payment. So if you’re hoping to use your favorite non-Visa card to make Costco purchases, you’ll have to go online to do it.

Ultimately, you’ll need to consider all four of these factors when you decide where to shop. If you can’t get the item in-store, then online shopping is a no-brainer — and the same is true if you’re not a Costco member.

If your item is available in-store, though, you may be better off visiting to buy it in person. While clicking on the website may seem more convenient, the higher prices often aren’t worth paying if you can make a quick trip to the warehouse club to get what you need.

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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 positions in Visa. The Motley Fool has positions in and recommends Costco Wholesale, Mastercard, and Visa. The Motley Fool recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.

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There’s no shortage of mortgage rate information out there. Here are some of the best places to keep tabs on rate changes. 

I’ve been sitting on the sidelines of the housing market for more than a year now, waiting to see where mortgage interest rates will go. With the average selling price of a house up 27.7% over the past three years and mortgage rates surging from the Federal Reserve’s increase to the federal funds rate to tamp down inflation, I’ve been content to wait.

But with rates beginning to fall recently, I’m keeping a close eye on where current mortgage rates are headed. Here are a few places to track where rates are right now and some predictions for where they may be moving.

1. Fannie Mae

Fannie Mae is a government-sponsored mortgage financing company that buys mortgage loans from lenders, who then use the money to lend to borrowers. The company and its mortgage financing counterpart Freddie Mac support about 70% of the mortgage lending market, according to the National Association of Realtors (NAR).

For that reason, what Fannie Mae says about where mortgage rates are headed is closely watched. The company predicted recently that mortgage rates would be 6.8% by the end of 2024 and that home sales will increase modestly throughout the year.

Some mortgage rates have already dropped below Fannie Mae’s prediction, but the company also offers other resources home buyers can use. For example, Fannie Mae’s mobile app helps potential home buyers and homeowners with tools like a guide to home buying, mortgage calculators, and even tips for maintaining a house.

2. Realtor.com

Many potential home buyers are already well-acquainted with the NAR’s website and app, which has some of the best information for buyers, including where interest rates may be headed.

NAR economist Lawrence Yun forecasts home sales will increase by 13.5% in 2024, and mortgage rates will be between 6% and 7% by the spring.

If you want to stay on top of mortgage rates and how they impact home-buying trends, the Realtor.com app has many tools for viewing current mortgage rates, finding a real estate agent, and estimating your home’s value.

3. The Ascent

I’d be remiss if I didn’t mention all the mortgage information and calculators The Ascent offers. Sure, I may be biased as an Ascent writer, but the wealth of information on the site is undeniable. For example, potential home buyers have free access to the following:

Current mortgage ratesA customizable mortgage calculatorRefinancing informationDetails on FHA, VA, and conventional loans

I’ve often used The Ascent’s mortgage calculator to price out the monthly cost for homes I’m interested in. You can adjust your down payment amount, interest rate, property taxes, and other details to customize your estimate.

The Ascent even has a handy guide to mortgages that covers mortgage information for first-time home buyers and those with previous home-buying experience.

4. Zillow

Zillow is one of the most popular sources for available homes for sale and mortgage information, but the company was less inclined to predict whether mortgage rates would increase or decline in 2024.

“Predicting how mortgage rates will move is a nearly impossible task,” the company said recently, adding that the recent cooling of inflation may mean that interest rates will “hold fairly steady” in the coming months.

But even with Zillow unwilling to paint itself into a mortgage rate corner, home buyers can use the company’s app to stay on top of what’s happening in the market. Zillow is one of my go-to apps for home searching, and the built-in mortgage calculator tool makes it easy to keep up with the current mortgage rates, no matter which direction they’re headed.

How to find the best mortgage rate

Whether mortgage rates rise or fall this year, there’s one surefire way to get the best one: Shop around. I talked to a mortgage lender last year who told me one of his clients found a better rate with another lender. He was honest and told the client he couldn’t match that mortgage rate and that it was best to go with the other lender.

I was surprised to hear him admit that he might not be able to offer me the best interest rate, and it was a reminder that I should always shop around.

It can seem overwhelming to get multiple quotes because applying for a mortgage is time-consuming and, honestly, pretty boring. That’s why using mortgage rate comparison tools is helpful to get you started and help you find the best mortgage lender for you.

Get rate quotes from at least a handful of lenders to ensure you get the best rate possible for your personal situation. You may score a better rate than you thought.

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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.Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Zillow Group. The Motley Fool has a disclosure policy.

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Leaving a tip in every situation isn’t great for your personal finances, but it seems expected more often now. Read on to learn when your peers tip. 

Not too long ago, I used a self-checkout machine at a store and I was asked by the automated payment processing system if I wanted to leave a tip. I’m not the only one this has happened to, and this is not the only situation where I’ve been asked to provide a gratuity when I felt the request was unreasonable.

Tipping culture has gotten out of control due to the rise of automated payment apps asking for tips in tons of new situations — and often defaulting to a gratuity of 15% or more if you don’t opt out. This can impact your personal finances.

Since you’re now being asked to open your wallet and leave a tip in so many different circumstances, it’s confusing to figure out when it really is appropriate to have this extra money come out of your checking account. To help navigate this complicated tipping culture, it can be helpful to look at when your fellow Americans are leaving money for the customer support staff members who are assisting them.

Here’s when most Americans do, and don’t, tip

According to Pew Research, there are four situations when the majority of Americans always leave a tip:

At a restaurant with servers: 81% of people always tip under these circumstances and 11% often do.After getting a haircut: 65% always tip their hairdresser and 13% often do.When having food delivered such as ordering UberEats or DoorDash through a delivery app: 59% always tip their driver and 17% often do.Purchasing a drink at a bar: 53% of Americans tip their bartender every time and 18% do so often.

Using a taxi or ride-hailing service is a little bit more of a gray area, though. While a combined 61% either always or often tip, only 43% of Americans say they do so every time. By contrast, it’s far less common to tip at a coffee shop, where only 12% always tip and 12% of people tip sometimes. And if you are tipping at a fast food restaurant, you are in the minority — only 7% always tip and 12% tip often.

How you can decide whether a gratuity is appropriate

For most Americans, there is one deciding factor that determines whether they put a tip on their credit cards when making a purchase — the quality of the service. A total of 77% of adults responding to the Pew Survey indicated that the service they received is the major deciding factor both in determining whether to tip at all and in deciding what amount is appropriate.

This makes good sense in some situations, especially as one purpose of tipping is to reward people who go the extra mile. However, many restaurant workers actually receive less than the minimum wage because it is expected they will receive a tip, so if you aren’t leaving them something, this can have a major negative impact on how much money they bring home. So, unless you receive truly terrible service, you should tip the staff member who took care of you for a wage as low as $2.13 an hour.

Ultimately, if someone provides you with a skilled service, goes the extra mile for you, or works in an industry where tips are standard like food delivery, tipping them is the right thing to do. But, if you’re taking care of yourself at a self-checkout or a staff member does nothing but hand you a coffee, you’re probably OK not to pay them extra for this limited effort.

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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 Uber Technologies. The Motley Fool has a disclosure policy.

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2024 may not be a great year to buy a home, but it could still be the right time for you. Learn how you can improve your odds of success. 

Welcome to 2024! Is this the year you become a homeowner? Hey, me too! (I hope.) It’s not an ideal market for home buyers, thanks to a fine combination of high mortgage rates and a lower supply of homes for sale.

The average rate for a 30-year fixed mortgage loan is 6.61% as of this writing, per Freddie Mac, which has the potential to make a home purchase a whole lot more expensive than it would have been even just two years ago, when that same loan had an average rate of 3.22%. But if you’re ready to buy anyway, here are a few ways to cope and succeed in your quest to become a homeowner.

1. Shine up your credit

Before you start talking to mortgage lenders and giving them access to your finances, it’s a smart idea to take a good long look at them yourself. In particular, your credit profile is of vital importance in determining the mortgage rates you’ll be offered — the higher your credit score, the better your chance to save money on interest.

Have a gander at your credit report to check for errors that might be dragging your score down. Pay down some existing debt, if you can. And avoid making any changes to your finances ahead of or during the mortgage loan process — keep old accounts current, avoid opening new ones, and wait on big purchases until after your loan has closed.

2. Get pre-approved for a mortgage

Feeling good about your credit score? Excellent! Time to start contacting mortgage lenders to see about getting pre-approved for a mortgage loan. This is an important move for two reasons. First, you’ll find out what mortgage rate you’ll be looking at, as well as how much a lender will let you borrow. Second, a buyer with a pre-approval letter in hand could be worth two unqualified lookie-loos in the bush for a home seller. Basically, a seller will likely be more inclined to accept an offer from you, who’s had their finances vetted by a lender, than an offer from someone who may not actually be able to get a mortgage loan.

3. Set a strict budget

Now that you’ve gotten your pre-approval, you might be a little shocked by how much the lender thinks you can afford to spend on a home. The good news is that you don’t have to spend that much on a house — in fact, it’s probably a terrible idea to trust a lender’s assessment of your real financial life.

Sure, it looked at your pay stubs, bank statements, and maybe even your tax returns — but it doesn’t know that you love to travel, and that overcommitting to an expensive house payment will make it impossible to continue affording that. So run your own numbers, decide how much you want to spend on predictable monthly costs (ideally less than 30% of your take-home pay), and play around with a mortgage calculator to see how much house you can afford based on your actual life and other goals. Then stick to that number when you look at homes.

4. Find a great agent

A real estate agent can be your best friend, and in a difficult market, they become even more important. A good one will watch listings for you, schedule showings, and remain ready to craft the perfect offer when you find a house worth bidding on. And if you’re worried about how you’ll pay a real estate agent, don’t be — buyer’s agents are paid by the seller of the home you end up buying. Ask the right questions to find the best agent for you.

5. Compromise, compromise, compromise

I probably don’t need to tell you this if you’re seriously considering buying despite the less-than-ideal market conditions, but I will anyway. You’re probably not going to find your end-all, be-all dream house in this market. The market is still tipped in favor of sellers, who can command high prices for their homes thanks to a lack of inventory. So now is not the time to be too picky.

This isn’t to say you should throw your entire wishlist in the trash and settle for a house you don’t actually like. But you may want to pare down your list of “must-haves” to the bare essentials — for me, this includes the size of my home, covered parking for my car, and being in a neighborhood that is pedestrian-friendly — and be willing to bend on other qualities. I’d also love to buy a home with central air conditioning so I don’t have to add it myself later, but at my price point (and for an older home), that might be out of reach for me.

Your needs and wants are personal, and you still might find a lot of what’s on your list. But don’t be surprised if your dream house is either prohibitively expensive or nonexistent right now.

It’s a hard market to be a home buyer in, there’s no way around it. Thankfully, by focusing on the above moves, you can give yourself the best chance of becoming a homeowner in 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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Right now, most people are refinancing their mortgages to access equity, rather than to save money. Here’s what that means for homeowners as we enter 2024. 

When most people buy a house, they tend to hold two common beliefs: First, that it will likely be the biggest single purchase they’ll ever make. Second, that they’ll have the option to refinance in the future to potentially save money. The first tends to be true for most. But, regarding that second point, certain factors may make refinancing a less appealing option.

If you own a home, here’s what you should know about this common money-saving tool.

Average mortgage refinancing savings

Refinancing is often a tool for saving money on a loan by securing a lower interest rate and other, more favorable terms. But refinancing is a lot less popular than it was just a couple of years ago. And when you consider the state of interest rates, it makes sense that the primary use for those who do refinance appears to be tapping into equity, rather than scoring a lower rate.

According to the latest data from Black Knight, cash-out refinancing accounted for 92% of all refinanced mortgages in the third quarter of 2023. And, according to Freddie Mac, borrowers who refinanced saw an average rate increase of more than 2 percentage points during the first half of 2023.

For context, a cash-out refinance loan lets you access the built-up equity as a lump sum payment, typically to pay off other debts and make home repairs. In exchange, you get a larger mortgage with all new terms, including new closing costs. So while you can get a solid chunk of change by using this refinancing option, you may also end up paying more for your mortgage, particularly if you get a higher interest rate or longer loan term.

Because of the high rate environment, and the fact that the vast majority of refinancing is cash-out refinancing, it would appear that the average American isn’t really saving money on their mortgage by refinancing right now, though they are getting a large cash influx.

What you should know about refinancing in 2024

As noted, interest rates are much higher than they were just a few years ago. That means you may find it difficult to score lower rates if you’re looking for traditional mortgage refinancing, particularly if your credit isn’t perfect and you got a lower rate when you first bought your home.

It’s not all bad news though: While now may not be the ideal time to refinance if you’re looking to save on your mortgage, that doesn’t necessarily mean refinancing in 2024 is completely out of the question. The Fed has indicated that it’s gearing up for three rate cuts in 2024, which could translate to lower mortgage refinancing rates. Whether that’ll be enough for the move to make sense, however, will depend on your current rate as well as the state of your finances.

Keep in mind that you still shouldn’t try to time things for the lowest possible rate, though. You’d run the risk of missing the entire rate dip. Consider your options when your finances are in good shape, and take the offer that has the best combination of savings and affordability.

Again, because refinancing requires you to pay closing costs, you’ll need to make sure that the savings you’re getting from refinancing make sense given how long you plan on staying in your current home. For example, if your current rate is 6.5% and refinancing closing costs would cost you $3,000, shaving off a point from your interest rate may not make sense if you’re planning on moving in just a couple of years. That’s because you’d need about two years just to recoup the closing costs. If your goal, however, is to save on monthly costs, the $130 cut to your monthly payment may still make sense. But it really depends on your situation.

It can be somewhat disheartening to hear that Americans aren’t actually saving money with mortgage refinancing right now. However, it can still be a useful tool for homeowners looking to save money if you focus on boosting your credit and keep an eye out for savings opportunities that match your needs.

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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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Getting a DUI or getting a speeding ticket can result in a huge increase in auto insurance premiums. Learn more about how costs could be impacted. 

Everyone should have an auto insurance policy on their vehicle. Unfortunately, a policy can become very expensive for drivers who make certain mistakes that cause their premiums to skyrocket. Here are three big errors that could result in insurance premiums climbing so high that they end up taking a huge chunk out of a motorist’s bank account.

1. Getting a speeding ticket

Speeding tickets are a huge source of concern for auto insurers for two big reasons:

If a driver is going too fast, they’re more likely to get into a crash because they’ll have less control of the vehicle and a longer stopping time.When a collision occurs at high speed, there will be more crash energy, so serious or even fatal injuries are more likely to happen. The car is also more likely to sustain serious damage.

Due to these issues, insurers charge more money for a driver who gets a ticket. The specific premium increase can vary by insurer and is based on factors like driving record, as well as just how fast the policyholder was going. Specifically, a driver who is traveling 30 mph or more over the speed limit would typically see a premium increase of around 30%, while a motorist who isn’t going quite that fast could see premiums rise by 20% to 22%.

Speeding tickets can stay on a motorist’s record for three to five years in most cases, but the older the ticket, the less impact it has on premium prices. Drivers may also avoid having a ticket go on their record — and facing the resulting increase in insurance costs — by completing traffic school if their state allows it in their situation.

2. Getting into an at-fault accident

Accidents are definitely bad news for premium prices. Insurers raise prices following a crash because they have to pay out a claim and because they believe someone who caused a collision once is more likely to cause another one.

The average rate increase after an at-fault collision varies by state, from as low as 4% in Rhode Island to as high as 92% in New Jersey. In most places, though, premiums go up by around 35% to 50%, or somewhere near that range, once a motorist has been involved in an at-fault accident. Accidents usually stay on a driving record for around three to five years and can impact premiums during the entire period.

Some insurers offer accident forgiveness as an optional add-on and those who buy it before a collision won’t see premiums increase after their first at-fault accident. Investing in this add-on may be worth it to ensure one mistake doesn’t lead to higher premiums for years to come.

3. Getting a DUI

A ticket for a DUI (driving under the influence) can result in insurance rates increasing by as much as 94% on average. This makes sense as drunk drivers are more likely to be involved in an accident and are more likely to cause a serious crash since their intoxication may affect their reaction time and ability to take steps to limit the damage.

Ultimately, these mistakes can be costly ones, both because of the risk of higher auto insurance premiums and because of the other consequences of driving drunk, getting into an accident, or speeding. Motorists should aim to drive as carefully as they can and try to avoid these behaviors. It will be better for them personally and financially over the long haul.

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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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