Money Management

Buying groceries online tends to be more expensive, but there are some perks you may not be aware of. Read on to learn the benefits. 

Having groceries delivered rather than going to the store yourself can cost more — at least at first glance. After all, the prices tend to be higher than you would pay in store and you usually have to either pay a delivery fee or buy a subscription to avoid one — and you’ll need to tip your shopper on top of that.

But, despite that, it may still make sense to break out the credit cards to have your groceries delivered. Here are five little known perks of doing so — beyond saving time — that just might convince you having your groceries delivered is best for your checking account in the end.

1. It makes meal planning easier

When you shop for groceries online, you need to have a plan so you can put your order together. You can’t just wander the aisles and see what looks good. And when you make a meal plan, you are more likely to actually use the ingredients you buy and eat at home rather than dining out since, after all, you did make that plan. This can help to cut food waste and slash your grocery bill.

2. You’re less likely to forget things you need

When you have your groceries delivered, you can add items to your cart as you run out of them. You can also check your stock at home to see exactly what you need as you’re placing the order, so you don’t have to try to remember if you actually have ketchup or laundry detergent.

And you won’t be wandering through the aisles and end up forgetting stuff — which happens to me all the time if I can’t find something, I intend to go back to a store associate later, and I just don’t.

3. You’re less likely to double-buy items

Since you can check your stock in real time as you’re deciding what to purchase, you’re also less likely to double-buy products you already have. You won’t be standing in the middle of the store aisle with your hand on the milk wondering if you do have enough at home after all, since you can just walk to the fridge.

4. You can shop at more stores

If you’re going grocery shopping, chances are good you’re going to one or maybe two stores at best. Otherwise, you’d be wasting your time and gas. But if you are getting grocery delivery, you can arrange to have deliveries made from multiple stores — including those that may be inconvenient for you to get to.

This could open up the door to being able to take advantage of different sales offered at stores throughout your community, or to getting bargains at stores that are off your beaten path.

5. You can skip impulse buys

Impulse buys account for up to 62% of all grocery store sales, which is a shocking number. The good news is, if you aren’t at the store, you won’t be tempted. The money you save on not buying those chips or that roll of cookie dough each time you go to the store could provide enough savings to more than cover the added costs of shopping with a delivery service.

The best way to decide if grocery delivery is right for you is to compare your bills from when you do your weekly shopping in store versus when you do it online. This will help you determine if shopping online makes financial sense for you or if you’re better off with the old-fashioned approach of just visiting the store in person.

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A no-cost mortgage refinance allows you to refinance your home loan without paying upfront closing costs. Find out what you need to know about it. 

If you have a home mortgage, you may want to refinance it if you can get a lower rate or better terms than you have on your current loan. Usually, though, refinancing means you get stuck paying closing costs out of your checking account. These costs could add up to around 2% to 6% of your loan’s value, which is a lot of money — as much as $18,000, if you’re borrowing $300,000.

If you want to tap the equity of your home and don’t have that much cash to pay out, you do have another option: a no-cost mortgage refinance. With this loan type, you wouldn’t have to pay upfront — although you would have to cover the closing costs over time.

There are some benefits of choosing a no-cost mortgage refinance loan that are worth considering, however.

1. You have more flexibility in how you pay your closing costs

If you pay your closing costs upfront, you don’t have any options — you just pay the money when you close on your loan. But if you choose a no-cost refinance loan, you have two choices:

You can borrow the money for the closing costs. With this approach, you simply roll the costs of closing into your loan, increasing the borrowed amount. So, in our above example, if you were taking out a $300,000 loan and paying 6% closing costs, you’d actually take out up to a $318,000 loan.You could pay a higher interest rate. Many mortgage lenders will offer no-closing-cost mortgage refinance loans by covering the closing costs through charging you a higher interest rate.

The added flexibility of being able to choose which option makes sense for you is beneficial. If you want to make a lump sum payment of your closing costs later, you could just roll them into your loan, for example. But if you think you’ll refinance again soon, you could opt for the higher interest rate, since you might not have to pay the extra costs for very long.

2. You may end up paying less in closing costs over time

In some cases, if you opt for a no-cost mortgage refinance and accept a higher interest rate to cover the closing costs, you could end up paying less over time.

The table below shows two possible scenarios if you take out a $300,000 refinance loan with a 30-year repayment term and closing costs of 2% (the low end of the range).

If you chose the loan with the higher interest rate and no upfront costs and you refinanced or sold your house in three years, you’d have paid $3,662.28 in extra payments — which is less than the $6,000 in upfront closing costs you’d have incurred.

3. Your closing costs could end up costing less in real terms

The last little-known perk is that when you roll closing costs into the loan or accept a higher rate rather than paying upfront, you end up paying them off with money that’s worth less in real terms thanks to the impact of inflation.

As time goes on, your money is worth less as prices go up. For example, the $6,000 that you spend on closing costs today will actually buy you only $4,687 worth of stuff in 2033. That means that each month you make your mortgage payment, it costs you a little less in real terms. So instead of paying your closing costs with today’s money, you’re paying it with less-expensive future money, meaning it doesn’t cost as much in real terms even though the payment stays the same.

For all of these reasons, you should carefully consider whether a no-cost refinance is right for you. Just be sure, when you compare loan offers, that you look at both monthly payments and total borrowing costs over time so you can make an informed choice.

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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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Interest rate hikes have made borrowing more expensive. Read on to see why relief may finally be in sight. 

The Federal Reserve has been keeping a close eye on inflation for good reason: That’s its job. The central bank is tasked with overseeing monetary policy in the U.S., and the decisions it makes are meant to lend to a stable, thriving economy.

Since mid-2021, inflation has been elevated, spurred by a combination of supply chain issues and generous stimulus policies that gave Americans more cash to spend. In response to rampant inflation, the Fed has implemented a series of interest rate hikes that have driven the cost of consumer borrowing up to a large degree.

But October’s inflation data was positive all around. And in light of that, the Fed may just decide that its days of raising interest rates are done with.

Good news on the inflation front

In October, the Consumer Price Index, which measures changes in the cost of common goods and services, remained unchanged from September. It also fell to 3.2% on an annual basis. That’s an improvement from September, when annual inflation was measured at 3.7%.

The Fed, meanwhile, likes to aim for an annual inflation rate of 2% over the long run. It feels that this level is conducive to a strong economy.

Clearly, 3.2% annual inflation isn’t 2%. But it means the Fed is getting closer to its goal. Between that and the fact that the Fed really doesn’t want to drive the economy into a recession, the central bank may decide that it’s made adequate progress in its fight against inflation. And it may opt to not raise interest rates at its upcoming December meeting.

Now, this doesn’t mean that the Fed won’t then turn around and raise interest rates in 2024. But if it doesn’t raise rates at its next meeting, a 2024 interest rate increase could become even less likely. And that’s great news for consumers.

When will borrowing get less expensive?

The Federal Reserve isn’t in charge of setting consumer interest rates, such as the rates attached to products like auto and personal loans. Rather, it’s the Fed’s job to control the federal funds rate, which is what banks charge each other for short-term borrowing.

But when the federal funds rate rises, banks and financial institutions tend to compensate for their added costs by raising rates on consumer products like home equity loans, mortgages, and vehicle loans. A rise in the federal funds rate can also lead to higher interest rates on products like credit cards and HELOCs (home equity lines of credit).

The cost of borrowing, which is high today, likely won’t really come down until the Fed starts cutting rates. And that’s unlikely to happen this year, though there’s a strong chance it will happen in 2024.

So the quick answer is that the days of less expensive borrowing could slowly but surely start to return in the new year. This isn’t to say that loans will become cheap. But by mid-year, consumers may be in for notable relief.

Until then, though, it’s best for consumers to hold off on signing fixed loans if possible. And those with credit card debt should do their best to whittle down their balances to save money on interest.

Of course, none of this is to say that the Fed is guaranteed not to raise interest rates at its upcoming December meeting. But based on the most recent inflation data we have, a near-term rate hike is looking pretty unlikely. That’s something consumers can take comfort in.

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

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Amazon’s inventory is expanding…to cars! Read on to learn more. 

Given Amazon’s vast range of inventory, it’s hard to believe the online retail giant was once nothing more than a humble online bookseller. But at this point, you can buy everything from apparel to electronics to groceries on Amazon, and often at affordable prices to boot. But starting in 2024, consumers will be able to turn to Amazon to fulfill another need — buying a car.

A new partnership between Amazon and Hyundai

Amazon has launched a new partnership with Hyundai Motor Company that will allow consumers to shop for a car online in 2024. Customers will be able to go onto Amazon and search for available vehicles in their area based on different preferences, including model, color, and features.

Once customers find a car they’re interested in, they’ll get the opportunity to choose a financing option that works for them — which is important, since many people don’t just have the money in their savings account to buy a car outright. Customers who buy a car through Amazon will then be able to pick it up from a local dealership or have it delivered to them by a local dealership.

And that’s not all. Beginning in 2025, customers who buy one of Hyundai’s next-generation vehicles will be able to enjoy their at-home Alexa experience on the road. Drivers will be able to ask Alexa to play music and podcasts, set reminders, and report on traffic and weather. They’ll also be able to adjust their heat or air conditioning at home from the road (assuming their homes are also equipped with that technology).

Should you buy a car through Amazon?

Buying a car is not the same thing as buying a new laptop or TV. There’s a lot of thought and research that has to go into a purchase like that.

The average consumer with an auto loan owed $23,479 as of the second quarter of 2023. And the average new monthly car payment is $729.

Before you take on the cost of car ownership, it’s important to shop around for not just different vehicle models, but also, different financing options. Perhaps you’re able to snag a competitive offer through Amazon. But it’s important to explore your options thoroughly before making a decision.

Also, the idea of getting to say that you bought your car through Amazon may be appealing in its own right. But if Amazon doesn’t have the best deal on a Hyundai in your area, then it’s not worth paying more just to be able to be one of the first consumers to buy a car through the site.

Make a sound financial decision

An estimated 91.5% of U.S. households own a vehicle. And you may be eager to use Amazon to join their ranks. But think through your decision carefully so you don’t wind up regretting it or spending more than you need to for a new car.

Also, when you run the numbers, make sure you can afford the total cost of car ownership, including expenses like maintenance and auto insurance. Your car payment itself might seem manageable, but you’ll need to make certain you can swing the numerous other expenses vehicle owners inevitably face.

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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. Maurie Backman has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.

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