Money Management

Looking to slash your food bills in the new year? Keep reading to see how you can do just that. 

There are certain household expenses that are pretty much unavoidable. We all have to pay for shelter, whether in the form of a rent check or mortgage payment, and we all have to put food on the table.

As of October, the cost of groceries was still up 2.1% on an annual basis, according to that month’s Consumer Price Index. And chances are, that means you’re still spending a small fortune to make sure your household is fed.

Thankfully, though, there are steps you can take to save money on groceries in the new year. Here are a few worth trying out.

1. Buy non-perishables on sale — but be on the lookout for best-by dates

Chances are, your family eats its fair share of things like cereal, pasta, and rice. These are great items to buy when they’re marked down because you can save a bundle and not have to worry about them spoiling right away.

At the same time, you do need to pay attention to best-by dates for products like these, because they’re not designed to last forever. And you probably don’t want to serve your family stale-tasting food just to save a few bucks.

2. Buy grocery staples in bulk — but be careful with meat and produce

If there are specific items your family eats a lot of, then it could pay to buy them in bulk quantities. You don’t even necessarily need a membership to a warehouse club store to take advantage of this option. Often, supermarkets will have items available in bulk, as will big-box stores like Target and Walmart.

But while it can make a lot of sense to buy household staples in bulk, be careful with certain items in particular — namely, meat and produce. Unless it’s something like cold cuts, meat can turn on you pretty quickly. So if you’re buying chicken thighs in bulk, make sure you’ll be able to cook or freeze them within a few days.

The same goes for fruits and vegetables. A carton of strawberries can look beautiful one day only to turn moldy 48 hours later. And while you can freeze produce, you might lose some of the quality and nutritional value in the process.

3. Be realistic about the meals you plan to cook — and buy ingredients accordingly

Planning meals ahead of time is a great way to keep your grocery costs down. But it’s also important to be realistic about the meals you have the time to make — and the meals your family will be willing to eat.

You might get the idea to make fish fillets with scalloped potatoes on the side. If your kids won’t eat fish and they’ll only consume potatoes in French fry form, then that meal might end up going to waste.

Similarly, don’t buy ingredients for an elaborate dish if your work schedule is such that you commonly only have 20 or 30 minutes to cook. Instead, keep things simple so you don’t wind up wasting ingredients.

It’s natural to want to save as much money as you can at the supermarket. Use these tips to lower your grocery spending and put extra money in your savings account in the new year.

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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 positions in Target. The Motley Fool has positions in and recommends Target and Walmart. The Motley Fool has a disclosure policy.

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Setting a budget isn’t always necessary. But read on for an easy way to avoid wasting money in the new year. 

At this time of the year, it’s common to start making a list of New Year’s resolutions. And some of yours may be financial in nature.

You may decide that you’d like to boost your savings account balance in 2024 and beef up your emergency fund. Or, you may decide that 2024 is the year you’ll finally wipe out your credit card debt for good.

You’ll often hear that sticking to a budget is a good way to stay on track with your financial goals. A budget can help you keep your spending in check, paving the way for added savings.

But let’s face it — budgeting isn’t for everyone. Although it’s not a particularly difficult thing to do, it can be a bit time-consuming. And setting up a budget for the first time is not exactly the most fun way to spend an evening.

The good news is that if you’re really against the idea of budgeting in 2024, you don’t have to do it. But there is one thing you should do in the near term to make your upcoming financial goals more attainable.

Make sure you’re not throwing your money away

It’s pretty common to sign up for different services only to forget that you’re paying for them month after month. After all, if a given bill is set to autopay, you may not remember you’re on the hook for it.

It’s important to do an expense audit every so often. And you should aim to do one before 2023 comes to an end.

Comb through your credit card and checking account statements and make a list of your various expenses. From there, see if there are any bills you’re paying that you have the potential to shed.

Perhaps you’re spending $15 a month for a certain streaming service. That’s fine if you watch that content regularly. But if it’s been months since you last accessed it, then it’s probably a bill you can dump. Doing so should make you $180 richer over 12 months.

Similarly, certain bills of yours might have gone up over the past year without you realizing it. Let’s say you signed up for a cable package costing $75 a month as a new customer promotion. It may be that your promo ran out on you a few months ago, and that cable package is now costing you $125. Even if you use that service, you may decide that it’s not worth the extra $50.

Don’t be in the dark

The purpose of having a budget is to know where your money is going month after month. If you don’t want to spend your time budgeting, don’t. But instead, audit your spending every so often to make sure you aren’t throwing your money away — especially if your savings are currently lacking.

An estimated 63% of Americans can’t cover an unplanned $500 expense, says SecureSave. If you’re paying $25 a month for a subscription you don’t get much value from, canceling it puts $300 into your bank account just like that. So while you don’t need to force yourself to budget, at least make sure you aren’t wasting money for no good reason.

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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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There’s one thing I’m particularly focused on for 2024. Keep reading to see what it is. 

When my kids were younger, I refused to look at college costs. The reason? I didn’t want to get needlessly stressed and depressed. My kids aren’t on the cusp of attending college; my oldest just started middle school and my twins are only in third grade.

But still, saving for college has always been on my radar — hence my decision to start doing so when my kids were infants. And now that my kids are a bit older, I really want to buckle down and put more money away for their education.

I had to take on debt in the course of getting my degree, and that wasn’t fun. I’d like to do what I can to help my kids avoid similar debt if possible.

At the same time, though, U.S. News & World Report says that the average cost of tuition and fees for the 2023–24 school year is a whopping $42,162 at private colleges. Even if my kids stick to public colleges, the average cost there is $23,630 for out-of-state schools and $10,662 for in-state schools. In other words, no option is cheap.

That’s why my main financial goal for 2024 is to boost my kids’ college savings. But I don’t plan to put more money into a 529 plan. Rather, I intend to put more money into a regular brokerage account instead.

A well-thought-out strategy

Although I thankfully already have some money set aside for my kids’ education, the reason I’m so intent on saving more in 2024 is that I want to give that money time to grow. I intend to invest those funds pretty aggressively — namely in stocks or broad market ETFs — in the hopes that whatever contributions I make in 2024 grow quite nicely in time for when those college tuition bills might start rolling in.

If I wait a few more years, I won’t have nearly as long a window to let that money grow. So I plan to adjust my spending accordingly in the new year to prioritize college savings.

Now, I already have some money for my kids’ education in a 529 plan. The nice thing about these plans is that investments get to enjoy tax-free growth. But with a 529 plan, there can be penalties for taking withdrawals for non-education purposes. And since my kids are so far away from their college years, I have no idea what their higher education goals or plans look like. Neither do they. As such, I don’t want the money I save next year to be restricted in any way. That’s why I intend to put it into a regular brokerage account.

This type of investment account doesn’t offer any tax breaks, so if I make money in that account, I’ll be liable for the tax bill year after year. But that way, the money is mine to spend as I choose.

If my kids opt to go to less-expensive colleges, I won’t have to stress about an overage. At that point, I’d have the option to use that money for other things, like helping them buy their first cars. Heck, I might even decide to take some of that money back for my retirement, since I’m the one saving it!

An important goal of mine

Because I know what it’s like to have to pay off a college degree, I’m hoping to spare my kids that stress. As such, I’m making college savings my top financial goal for the new year. However, I’m not setting a specific savings target. I feel like that would be putting too much pressure on myself. Instead, I hope to just do the best I can.

You may be worried about paying for college for your kids, too. (Join the club!) If so, I highly recommend socking money away well ahead of their high school years so you’re not scrambling to play catch-up when they’re older.

A lot of people I know with kids of similar ages to mine aren’t prioritizing college savings at all. That’s their choice. But it’s really important to me to be able to fund my kids’ education, so I’m willing to make sacrifices at this stage of the game for that to happen. If you feel similarly, then you may want to put college savings on your list of 2024 goals, too.

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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 positions in Target. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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Buy now, pay later plans are trending. Read on to learn the pros and cons of the practice and whether they’re a good idea for your holiday shopping. 

Buy now, pay later (BNPL) services cater to those who want to make a purchase but don’t have the money in their bank account to cover the entire cost. That’s where the “pay later” comes in. Among those companies offering some form of BNPL are PayPal (“Pay in 4”), Afterpay, Affirm, and Klarna.

While BNPL might make sense in an emergency situation, there are a number of issues to consider if you’re borrowing the money to make everyday purchases, or even just to cover your holiday shopping. Here, we’ll walk you through those considerations and whether or not it’s a good idea to use BNPL plans to cover your holiday gift purchases.

Potential fees

BNPLs allow you to make purchases and pay them off over time, typically within six weeks. You may be required to make weekly, bi-weekly, or monthly installments until your purchase is paid in full. When you choose to pay using a BNPL plan, you can usually avoid paying loan fees by paying your balance off on schedule.

However, if an issue arises and you make a late payment or fail to pay the entire balance off by the due date, you’ll be charged a late fee, interest, or both.

Interest rates can be nasty

Not to put too fine a point on it, but if you miss a payment or pay late, you may get hit with interest charges. And if you think credit card rates are high, BNPL interest rates can be much worse.

Anything you can do to avoid interest means more money to pay (not-so-fun) stuff like car payments and auto insurance.

It won’t help your credit score

Let’s say you take out a traditional personal loan. Each month, the lender makes a report to at least one major credit reporting agency. If your payment was made on time, it enhances your credit score. The same is not true of BNPL. Credit reporting agencies won’t have any idea if you make payments as agreed.

However, if you miss a payment and your account is turned over to a collection agency, that will be reported to the agencies, dragging down your credit score.

Loans are small

BNPL services take a risk by lending money. If you stop paying, there’s nothing for them to repossess, and a good chance they will never recover their money. For that reason, most set their credit limits quite low. Let’s say you buy a pair of shoes for a grandchild for Christmas priced at $160. According to the BNPL service you use, you must put $40 down and pay the remaining $120 off in six weeks. Just as you must decide if a purchase is a “want” or a “need,” you must decide if borrowing $120 is worth the risk of a high interest rate or a hit to your credit score.

There are pros too

You’ll notice that, so far, we’ve only covered the downside of BNPL loans. Here are some of the positives of borrowing this way:

Your credit score won’t get dinged by opting to pay this way because BNPL services don’t perform a hard credit check when you open an account.BNPL deals are fast and easy. Often, you simply click on a link as you’re checking out. There’s no separate application and no need to wait for a lender’s approval.There’s an interest-free period. As long as you make payments on time, you won’t have to pay loan fees or interest charges.If you’re using a digital wallet to pay, BNPL can be used offline, meaning you don’t have to be shopping online to use it.

Should you use BNPL for holiday shopping?

The truth is that BNPL can be a lifeline, but only if you never have to pay fees or interest. Let’s say you have gifts to pick up this holiday season, but your property taxes, HOA fees, or some other annual bill is also due in December. In short, cash is scarce this month.

BNPL may be the solution. As long as you can make the initial payment and your budget shows that you can easily make the remaining payments as they come due, BNPL is like borrowing money for free. It won’t build your credit score, but will allow you to buy gifts without pulling out a credit card.

Here’s the tricky bit: Only you have access to your monthly budget, and only you know if making payments is likely to be a problem. If there’s any question about this, you’ll want to steer away from BNPL.

One of the most challenging things about adulting is how often we must ask ourselves the hard questions. For example, what will you do if you’re short on money when a BNPL payment comes due? Is there a plan in place? Do you have an emergency savings account to draw from or another way to come up with the funds?

There’s also the question of whether a purchase is a want or a need. That one is never fun, especially when you’re weighing the necessity of holiday gifts for your loved ones, but it can mean the difference between spending money you don’t have and building a solid financial future.

What’s so compelling about BNPL is its potential. As designed, it has the potential to make your life easier — as long as you can make payments on time. So before making your next purchase, do a quick review of your budget to ensure you can easily make the payments.

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In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

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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 PayPal. The Motley Fool recommends the following options: short December 2023 $67.50 puts on PayPal. The Motley Fool has a disclosure policy.

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