Money Management

It’s expensive to sign a mortgage today. But read on to see how you can lower your costs as a borrower. 

In 2020, mortgage rates fell to record lows, and buyers had a prime opportunity to lock in long-term savings on their mortgages. These days, mortgage rates are much higher, which means buyers are more likely to find themselves financially strained given that home prices are also up.

As of mid-December, the average rate on a 30-year mortgage was 6.95%, according to Freddie Mac. And a rate like that has the potential to result in a pretty hefty mortgage payment.

If you’re looking to buy a home, there may not be all that much you can do to save money in the process. Sure, you could try talking the seller down to a lower price. But seeing as how housing inventory is low right now, sellers tend to have their fair share of buyers. And yours may not be willing to accept a number below their asking price.

Also, while coming in with a great credit score could result in a lower interest rate on your mortgage, it’s not going to land you a 30-year loan at 5.5% when the average rate is close to 7%. You could snag a lower mortgage rate by applying for a 15-year loan instead of a 30-year loan, but you may not be able to afford the higher payments that come with it.

That said, there is one step you can take to save some money when buying a home. You just need to go about it strategically.

Negotiate closing costs with your mortgage lender

When you sign a mortgage, you’re generally required to pay closing costs as part of the deal. Closing costs typically amount to 2% to 5% of your loan amount. And your mortgage lender will generally give you the option to pay those fees upfront when you close on your home, or to roll those fees into your mortgage and pay them off over time.

But just as it’s possible to negotiate with a car dealer when you’re buying a vehicle or a contractor when you’re doing a kitchen renovation, so too is it possible to negotiate with a mortgage lender on closing costs. You just need to know which fees your lender has leeway with.

Fees that usually are not negotiable

Some of the fees your lender charges you at closing may not be fees it controls. Recording fees, for example, are usually set at the municipal level. So if it costs $45 where you live to enter your mortgage into public record, that’s a $45 fee your lender has to pass along to you because that’s simply the going rate.

Similarly, you’ll usually be on the hook for property taxes when you close on a mortgage. Property taxes are often paid quarterly or annually, so you’ll need to cover the bill (or partial bill) for your share of the year. But like recording fees, property taxes aren’t set by mortgage lenders, so the amount assigned to your property is the amount you’re looking at paying.

Fees that may be negotiable

Some of the fees associated with closing on your mortgage may be negotiable, however. Many lenders charge an application fee as part of the mortgage process. That’s a fee your lender may be able to lower or even waive.

Similarly, when you apply for a mortgage, you have to go through underwriting, which is the process of vetting your financial information. Lenders sometimes charge a separate fee for underwriting, but this is something you can seek to whittle down.

Finally, before you can close on your mortgage, the home you’re buying needs to undergo an appraisal. If your lender sets that up, you can expect to pay appraisal fees. However, your lender may be willing to let you get your own appraisal. And if so, you can research costs and try to find a cheaper alternative than your lender’s default option.

All told, buying a home is pretty expensive these days. But if you’re able to lower your closing costs by negotiating with your lender, you can squeeze out a small amount of savings for some much-needed breathing room.

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Sometimes the person behind credit card fraud is a family member. Learn what your options are in this situation. 

One of the benefits of credit cards is the fraud protection they offer. If you have a fraudulent charge on your account, you just dispute it, and the card issuer removes it from your bill. It investigates, and as long as it determines the charge is fraud and not one you made, you won’t need to pay it.

This works well when a scammer uses your credit card, or the card number, to make a fraudulent purchase. It gets more complicated when it’s a family member who used your card. Commonly referred to as familiar fraud, this comes in many forms. A 2016 study even found that 30% of identity theft perpetrators are family members.

Sometimes family members intentionally commit credit card fraud. Cases also exist where minors do it unintentionally. For example, kids sometimes make purchases through online games with digital currencies, not realizing that those digital currencies cost real-world money. Those are only a few examples of how familiar fraud can happen.

Even when it’s a family member who’s behind the charge, you probably don’t want to be on the hook for that money. And you aren’t, but the situation isn’t quite as cut and dry as standard credit card fraud.

Can you dispute a fraudulent credit card charge made by a family member?

You can dispute any unauthorized charge on your credit card. That includes charges made by family members. If you didn’t authorize it, then it falls into the category of fraud.

However, your card issuer could require that you file a police report before it approves your dispute. You would then probably need to tell the police that you know who’s responsible for the fraudulent charge.

This is more likely to happen with large amounts of fraud or multiple instances of fraud. If you dispute a $20 charge made by a family member, your card issuer may just refund it. If your family member charges $2,000, or if they use your credit card every month, then your card issuer will most likely want you to file a police report.

You’re not responsible for the charge, but your family member is. You may not be able to get your money back and ensure that they don’t face any legal repercussions.

Try working it out with the merchant or your family member if you don’t want to dispute it

If you’d rather avoid filing a credit card dispute, try contacting the merchant. Explain the situation, and see if there’s a way to have the transaction refunded. You have a better chance of success if the purchase can be returned, or if the order hasn’t shipped yet and can still be canceled.

It could be an uphill battle if the purchase can’t be returned or canceled. If the merchant is going to lose money, it may argue that it’s not responsible for what your family member did — a reasonable position to take.

Another option is to talk to your family member about it and have them pay you back. That may or may not be realistic. If they knowingly used your credit card without your permission, then they might not be open to paying you back. But if you explain that it’s either they do that or you file a dispute, which possibly leads to a police report and legal issues, that could be enough motivation for them to do the right thing.

Going forward, be careful about who has access to your credit card. Even though you can dispute familiar fraud, it’s still inconvenient. Make sure to keep your cards in a secure location where they won’t fall into the wrong hands.

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Many Americans are “doom spending” to cope with financial stress. But this can lead to an expensive debt problem. Here’s what to do to curb your overspending. 

You’ve probably heard of “doom scrolling,” but have you heard of “doom spending”? It’s an issue for many people. A recent Intuit Credit Karma study found that 27% of Americans are doing so to cope with stress. Factors like cost of living increases, inflation, and lack of affordable housing are causing added financial stress.

Are you spending beyond your means to cope with anxiety? Find out what you can do to stop overspending so you don’t continue to harm your finances.

Americans are concerned about the economy

If you’re feeling uneasy about the economy, you’re not alone. The Intuit Credit Karma study showed that 96% of Americans are concerned about the current state of the economy. Of the study respondents who are concerned about the economy, these are their top worries:

48% fear not having enough money to afford necessities like food, clothing, and rent34% are most concerned about going into debt30% are worried about not being able to spend money on things that bring them joy

How are Americans dealing with these fears? More than a quarter are “doom spending.” The study defines this as spending money, despite concerns about the economy and foreign affairs to cope with stress.

While spending money on things that make you happy can provide some stress relief at first, overspending can lead to consequences that cause greater anxiety — like debt.

How much debt? The same study found that the debt levels of about one-third of Americans have increased over the last six months. And 74% of those with debt estimate that they owe over $10,000.

Don’t let your spending habits harm your financial situation

If you’re finding yourself overspending as a way to cope with the state of the world, you’re not alone. But it’s essential to consider how your spending habits impact your finances. If you find yourself making more frequent unnecessary purchases, it could quickly become a problem.

The last thing you want to do is rack up expensive credit card debt. Credit card interest is costly, so carrying a balance on your cards is not recommended. You should only charge your credit cards for what you can afford and then pay your balance off every month.

The following tips may help you curb your overspending:

Monitor your spending: Budgeting apps make it easier to set spending limits and monitor your spending. These tools can help you stay on track and be more aware of your financial situation, so you can change how you manage your money.Set up roadblocks to limit online shopping: For those with an online shopping problem, making the checkout process more complicated can help limit shopping sprees. Consider deleting shopping apps from your phone and not saving your credit card details to your online shopping accounts.Pay with cash: Credit cards are convenient, but if you struggle with overspending, you may want to tuck your cards away somewhere safe to deter you from using them. By using cash to pay for your everyday purchases instead, you’ll have more control and a better idea of how much money you’re spending.Invest in your well-being: It may be helpful to invest in products and services that allow you to relieve your stress in a healthier way, so there’s less temptation to overspend when you’re feeling down about life. Ideas include therapy sessions, a gym membership, or a hobby that helps you relax.

Keep these tips in mind to help keep your spending in check. If you want to improve your finances in the new year, you can also 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.Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intuit. The Motley Fool has a disclosure policy.

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Auto insurance is a big expense. Read on for ways to save on policy costs. 

Owning a car is hardly an inexpensive prospect. AAA says it costs an average of $12,182 a year to own a vehicle, or more than $1,000 a month. And when you account for costs like auto loan payments, vehicle maintenance, and car insurance, it’s easy to see why.

These costs, however, aren’t necessarily set in stone. It may be possible to refinance an auto loan if you think you can snag a lower rate. And similarly, you might be able to lower the cost of your auto insurance.

Now, you may be aware that maintaining a safe driving record is one way to keep your car insurance costs down. So is taking a defensive driving course. But here are a few less obvious moves that could result in some nice savings on auto insurance.

1. Boost your credit score

You may know that when you’re looking to borrow money, having a great credit score is crucial. That’s because a higher credit score sends the message that you’re a reliable borrower. And you’ll generally be rewarded for that with more competitive interest rates on loans.

But you may be surprised to learn that having a higher credit score could result in lower rates on your auto insurance. So it pays to work on boosting your score and then seeing what discount it results in.

One step you can take to boost your credit score is to pay all incoming bills on time. If you can pay off some credit card debt, that could help a lot, too.

Finally, make a point to get a copy of your credit report and check it for errors. Credit reports are free to consumers every week. Correcting a mistake that paints you in a less favorable light could result in a fairly quick credit score increase.

2. Sign up for a pay-per-mile plan

A typical auto insurance policy has you paying a single rate for the year, regardless of how much mileage you put on your vehicle. But some auto insurers offer a pay-per-mile program. If you drive infrequently, one of these plans could make financial sense.

Pay-per-mile insurance works the way it sounds. You’ll usually have an approved device you’ll place in your car (in some cases, it can potentially be built in) that tracks your mileage. From there, you’ll pay your insurer based on how much you actually drive.

Now, you should know that pay-per-mile insurance also charges a base rate. But that base rate is likely to be a lot lower than the standard premium rate you might otherwise face. So if you don’t put a lot of miles on your vehicle, one of these plans could save you a lot.

3. Pay your premium all at once

Some people pay their auto insurance monthly. But if you can pay your annual premium in one fell swoop, your insurer might give you a small discount, so it makes sense to call and ask.

That said, if you’re going to take a monthly expense and convert it to an annual expense, you’ll need to make sure you’re setting funds aside for it month after month. You don’t want to end up in a situation where your annual premium is due for your auto insurance but you don’t have the money. One good bet is to take the cost of your annual premium, divide it by 12, and send 1/12 of that total into your savings every month via an automatic transfer.

Lowering the cost of your auto insurance could make vehicle ownership less expensive for you. Use these hacks to shave money off your costs so you’re less financially stressed.

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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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If you’re tying the knot, congratulations! Read on to see how Costco could help you lower your costs. 

Getting married has the potential to be a very expensive endeavor. In 2022, the average cost of a wedding was $30,000. But in some states, the typical cost was much higher.

If you’re trying to pull off a wedding without going broke, Costco might be able to come to your rescue. Here are a few ways the warehouse club giant could help you save.

1. Get a great deal on an engagement or wedding ring

Costco offers a broad selection of rings at varying price points. You can find engagement rings for well under $2,000 and upward of $10,000. Similarly, wedding bands can range in price at Costco from under $200 to over $1,000, depending on what you want.

This isn’t to say that you won’t be able to find a less expensive ring outside of Costco. But with Costco, you get the reassurance you’re buying jewelry from a retailer that stands behind its products.

Also, there can be some peripheral money savings when you buy an engagement or wedding ring at Costco. Right now, for example, Costco has a promotion offering $300 off at checkout for spending $1,999 or more on qualifying jewelry items. And Costco runs similar promotions during the year, too, so if you buy your wedding-related jewelry at the right time, there could be extra savings coming your way.

Finally, jewelry purchases count toward a Costco Executive membership. That means you can look forward to 2% cash back on your purchase.

2. Order your flowers at Costco

Costco offers a range of affordable floral arrangements for weddings. You could get your bridal bouquet, centerpieces, and more — the choice is yours.

Now, you’ll need to shop around to see how Costco’s prices compare with that of a local florist. But as one example, Costco is selling a nine-count of mini floral centerpieces for $109.99, or a little more than $12 per centerpiece. You can bank on a local florist charging you a lot more.

Ashley’s Floral Beauty in Matawan, NJ says that the cost of a mini floral centerpiece would likely be $50 or more. So if you’re on a budget, Costco could save you a lot.

However, keep the variety of the product you’re getting in mind when buying your flowers from Costco. A local florist might have a more robust selection, whereas Costco’s is apt to be far more limited. Also, when you work with a florist, they’ll commonly show up and set up your flowers the day of your wedding. With Costco, there may be a lot of do-it-yourself work on your big day.

3. Book your honeymoon and save big

Costco offers a host of competitively priced honeymoon packages as part of its travel service. The amount you’ll spend on a honeymoon you book through Costco will hinge on variables that include your destination, the amount of time you’re away, and any extras you’re adding on.

RELATED: Best Travel Credit Cards

But because Costco can secure great deals on popular honeymoon destinations, you may find that you can spend less than you would by booking your plans on your own or with a travel agent. Plus, some packages include a money-saving bonus like a Costco Shop Card that you can spend at the store afterward.

Many people think of Costco as a place to buy cereal and paper towels without draining their personal finances. But clearly, you can turn to Costco for a whole lot more — even one of the most important days of your life.

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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 recommends Flow. The Motley Fool has a disclosure policy.

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Inflation has been a persistent problem. Will it improve in the new year? Read on to find out. 

It’s been a tough year to run a business, no matter your line of work. High borrowing costs have made even modest credit card balances burdensome for small business owners, and many continue to have big concerns heading into 2024.

Now the goods news is that small business owners are finally getting some relief from issues that were impacting their supply chains, according to a recent Bank of America survey. And businesses are also starting to find it easier to attract and retain talent.

That said, there’s a big concern on small business owners’ minds as a new year approaches — inflation. In fact, 78% of small business owners identify this as their primary concern for 2024.

If you’re worried about inflation, here’s some good news — it has been cooling. And there’s reason to believe it will continue to ease in 2024.

Small businesses and consumers alike might finally get a break

Inflation has been a persistent problem since mid-2021. But in recent months, inflation hasn’t been quite as problematic.

For context, the Federal Reserve, which is tasked with overseeing monetary policy, feels comfortable with 2% inflation over the long run. And in November, annual inflation was measured at 3.1% as per that month’s Consumer Price Index report. Now clearly, that’s not quite as low as 2%, but it’s not such a long way off.

The Federal Reserve itself also seems to think that inflation has the potential to taper even further. At its last meeting, the Fed released a statement saying, “Recent indicators suggest that growth of economic activity has slowed from its strong pace in the third quarter.” The Fed also said that job gains have moderated since earlier in the year.

This doesn’t mean that the economy is on the verge of a recession, so don’t panic. But what it does seem to indicate is that growth is slowing down, which could lead to lower levels of inflation in 2024.

How to cope with nagging inflation

At this point, it’s hard to say when inflation will get back down to the Fed’s preferred 2% level. So if you’re a small business owner and are worried about higher costs in the new year, a good bet is to sit down at the end of 2023 and do a thorough spending analysis. Audit your expenses and see if you’re paying for anything unnecessary, whether it’s a marketing service that’s not yielding results or a courier service that’s overcharging you.

At the same time, you may want to see if it’s possible to streamline or upgrade certain aspects of your company’s operations to lower your costs or increase output that leads to higher revenue. You could enhance your customer outreach and generate more sales via social media management software, for example. And remember, purchases of that nature can generally serve as a tax write-off.

Finally, if money is tight due to inflation, cut some employee perks if you have to. You may not relish the idea of taking away your employees’ free coffee. But if higher costs are causing a real crunch, think about it this way — your employees would rather have a job to go to than a free cup of coffee during the day.

Hopefully, inflation will continue to ease in 2024. Until then, take active steps to trim your costs as best as you can.

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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.Bank of America is an advertising partner of The Ascent, a Motley Fool company. Maurie Backman has positions in Bank of America. The Motley Fool has positions in and recommends Bank of America. The Motley Fool has a disclosure policy.

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