Money Management

If you’ve been concerned about the rising cost of groceries, some actions taken by the USDA may help you to get a little financial relief. Find out more. 

If you’re like most people, chances are good that you’ve noticed your grocery bills have become a lot more expensive in recent months. This may be hitting your bank account hard if you’re spending a lot more to feed yourself and your family. In some situations, high food prices may even send you into credit card debt.

The good news is, there are some efforts underway to try to reduce the amount you’ll have to pay at the grocery store. They are being spearheaded by the Biden Administration, which will be working in conjunction with the states to try to provide some financial relief for those who are struggling at the store.

Could the USDA help lower your food costs?

Recently, the USDA announced it was forming a historic partnership with bipartisan attorneys general in 31 states across the country, along with AGs in Washington, D.C.

The goal of the partnership is to help the attorneys general address anti-competitive behaviors that are allegedly occurring in agriculture and other industries. These are having an adverse impact on grocery prices.

Unfortunately, the Biden Administration is concerned that a small number of companies now control a large portion of various food markets. And during the pandemic, issues like formula shortages demonstrated why this can be a huge problem that leads to supply shocks when something goes wrong with one of them.

Since the Biden Administration is seeing companies forming monopolies that can lead to elevated prices and supply shortages, the goal of the partnership will be to enable the states to investigate and potentially take action in more complex antitrust cases.

The USDA has also launched a Farmer Seed Liaison Initiative, to foster competition among plant breeders and those who grow seeds, and bring more competition into the market. The administration is also strengthening the enforcement of laws designed to prevent mergers that could lead to monopolies or other anti-competitive behaviors.

The impact of these initiatives is yet to be determined and it’s unclear if they will have a meaningful effect. While some experts believe that consolidation within the food industry is a major contributing factor to rising grocery prices, this claim is contested by others who point out that while companies within the livestock sector are rapidly consolidating, the broad trend within the farming industry has been less consolidation since 2007.

How to handle your high grocery costs in the meantime

These efforts from the Biden Administration may or may not make a meaningful difference, depending on whether food prices really have been driven up by too few competitors in our food supply chain.

Even if they do make an impact, however, it will take time for regulatory action to affect the behaviors of companies currently producing the bulk of our groceries. So, you may not see your bills fall dramatically anytime soon.

In the meantime, if you’re struggling to cover the cost of food, there are things you can do to save on groceries. Some options include:

Clipping coupons: Coupons can help you to spend less, especially if you are willing to try new products that manufacturers heavily promote and offer great discounts for. Tracking prices: Keeping track of where items cost the least can help you be more strategic in where you shop. Keep a notebook of products you buy most and jot down the price so you can see where the costs are lowest. You can also monitor sales schedules and stock up. So, for example, if your favorite pasta sauce goes on sale every eight weeks and you use one jar a week, you could buy eight of them at the sale price.Meal planning: When you get store sales flyers, plan meals around what’s on sale and batch cook to make multiple meals, so you can take advantage of bulk deals.

Ideally, the USDA’s efforts will provide you with some much-needed help in getting your food bills back down to a more manageable level. But trying these tricks in the meantime can make an immediate difference and give your family the breathing room you need.

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I buy more coverage than I need so I have better protection for my assets. Discover why the extra cost is well worth it. 

Buying insurance can be a big expense. But it’s important. Getting the right coverage is so essential that I actually pay more than I need to. I overpay for the homeowners insurance I bought to protect my house. I overpay for my auto insurance policies as well.

Why would I pay more than the minimum? There are a few very simple reasons why.

1. I want comprehensive coverage

The biggest reason why I pay more for insurance than I have to is because I want my coverage to be comprehensive.

Every state sets minimum requirements for car insurance. Usually, you’re only required to buy bodily injury and property damage liability coverage, although some locations impose additional requirements such as personal injury protection or uninsured motorist coverage. And the required policy limits are often pretty low — sometimes, you’re mandated to buy as little as $5,000 in property damage liability or $15,000 in injury liability.

I think these coverage limits are way too low, especially when even something as simple as a broken leg requiring surgery could come with medical bills of $15,000 to $40,000 or more. If the worst were to happen and I caused a crash and injured someone, I would want my insurance to pay all of their bills so I wouldn’t risk being personally sued for the additional funds they need.

I also want more than the required coverage, as I want things like collision and comprehensive insurance to pay for my vehicle to be repaired or replaced if I get into a crash that’s my fault or my car is stolen or damaged by vandals.

I even buy more than the amount of home insurance my mortgage lender requires, as mortgage lenders generally mandate only property damage coverage and I want protection for the contents of my home, as well as liability insurance.

Buying more than the minimum amount of protection that my lender or state requires means I pay higher premiums. But it also means that if someone is hurt or my property is damaged, there will be insurance coverage to pay for it. Anyone who cares about protecting themselves from financial catastrophe in case something goes wrong should also consider buying more than the minimum coverage their lender or the law requires.

Think about how much it would cost to replace every possession, or to pay for catastrophic injuries for an injured victim after a car accident or fall at home. Then, make sure you have sufficient insurance in place to pay for these expenses.

2. I want a trusted insurer

Another big reason I pay more for coverage is because I didn’t use price as my deciding criteria when deciding who to buy insurance from.

Sure, I shopped around and got multiple insurance quotes before buying home and auto coverage. But I only considered insurers that had a solid reputation for customer service and claims handling. I won’t settle for an insurer that gives its customers a hard time when things go wrong, even if their premium prices were rock bottom.

When a covered loss happens, it usually means something has gone pretty wrong, like a car accident or a house fire. No one wants to be fighting with an insurance company during this time, so it’s always worth paying a little extra for quality coverage. Checking the National Association of Insurance Commissioners’ complaints database and reviewing J.D. Power rankings can be helpful in finding quality insurance companies.

The reality is, most consumers should overpay for insurance because that’s what it takes to get the right coverage from the right company. Anyone who is focused on price alone and who scales down their coverage or who goes with the cheapest company just to save a few bucks could end up really regretting it when a problem happens. That’s a bad situation to be in, since it will be too late to fix things once the covered loss has already occurred.

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An emergency fund you can’t access isn’t helpful — and neither is one ravaged by inflation. Here’s how a money market account solves both problems. 

Most experts recommend an emergency fund of at least three to six months’ worth of expenses. No matter how small your budget may be, that means you’re going to have at least a few thousand dollars that need to go somewhere. But where?

Sure, you could go full Scrooge McDuck, storing your hoard of gold coins in the vault room of your mansion. But that’s not exactly practical. Moreover, while you want your emergency fund to be easily accessible. Gold in the vault room — or the more common cash under the mattress — has a major drawback: It’s constantly being devalued by inflation.

This begs the question, where can you keep your money so it’s easy to access, but it won’t hemorrhage value from inflation? Why, a money market account!

The APYs can be 70x higher than average

Alright, so I know your first thought is, why not a checking account? Well, the best money market accounts have something nearly all checking accounts are missing: a good interest rate.

The national average APY for a checking account is a paltry 0.07%. Even the top checking accounts tend to have APYs below 1%. With inflation more than three times higher than that, you’re going to lose a lot of value on your emergency fund.

In contrast, our favorite money market accounts offer APYs between 4% and 5%. That’s more than 70 times higher than the average checking account, and two points or more over the current rate of inflation.

You get easy access to cash and checks

So, that’s why not a checking account. But, why not a savings account? The best high-yield savings accounts can easily compete with the top money market accounts when it comes to APY.

The problem comes down to access.

Modern savings accounts make it difficult to access your money in a hurry. Many don’t even offer debit or ATM cards. An emergency fund you can’t access when you need it isn’t very useful.

Money market accounts often come with a proper debit card you can use to get cash from an ATM. (You even make purchases, though I always prefer credit cards over debit cards for that). Additionally, most money market accounts let you write checks, which can be handy in cases a card just won’t work.

Be aware of balance minimums and fees

As with anything else, money market accounts do have a few potential drawbacks. For one thing, they have many of the same annoying fees as checking accounts, like monthly service fees. You can often get these waived by meeting certain balance or transaction minimums, however.

Speaking of minimums, many money market accounts have a minimum balance required to open the account, and some will also have a balance minimum to keep your account open. Even if the account itself doesn’t have a minimum, you may need a certain balance to get the best rate.

Check the account terms and conditions carefully to look for any fees or minimums — and how to avoid them.

Check for new account bonuses or intro rates

Another thing to be on the lookout for are any kind of new account bonuses or introductory deals. For example, some banks may offer you cash for opening and funding an account. Others may provide a better rate for the first year. These offers tend to have hoops to jump through, so be sure to read the fine print.

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Paying off a mortgage ahead of schedule could save you money on interest. But read on to see why doing so doesn’t always make sense. 

It’s common for people to sign a 30-year mortgage and spend three decades of their lives paying off their homes. But you may be inclined to try to pay off your mortgage at a faster pace, especially if you’re receiving extra money regularly.

Paying off your mortgage early could save you money on interest. But in some cases, it could make more sense to stick to your regular payment schedule rather than try to get ahead of it.

The upside of paying off a mortgage early

Most mortgage lenders do not impose penalties for paying off a mortgage early. So for the most part, that’s not something you have to worry about. And if you pay off your mortgage early, you could save yourself a bundle of money on interest.

Let’s say you take out a $240,000 mortgage at 6.5% and manage to pay an extra $500 into your loan every month. Doing so will save you about $160,000 in interest on your mortgage, which is a substantial sum. You’ll also get to shed your mortgage debt a lot sooner, which means you’ll have one less monthly bill to worry about.

It doesn’t always make sense to pay off a mortgage early

No matter what interest rate you have on your mortgage, paying off your loan ahead of schedule will save you some money — it’s just a matter of how much. But if you happen to have a really low interest rate on your mortgage, then an early payoff may not be a great idea.

Let’s say you signed your mortgage in 2021, when borrowing rates were super affordable. You might be paying 3% on your 30-year mortgage. Meanwhile, right now, you can score upward of 4% interest in a high-yield savings account.

So, let’s say you have an extra $1,000 you can put into your mortgage this year to pay it off ahead of schedule. That’s a tempting thought, but it doesn’t make sense to lose out on 4% interest in a risk-free savings account so you can save 3% interest.

It’s sort of the same concept of using a credit card to snag cash back on a purchase, but facing a processing fee that’s higher than the amount of cash back you’re eligible for. If your go-to credit card gives you 2% back at restaurants but the place you’re dining at charges a 3% surcharge for using your credit card instead of paying cash, then you’re not coming out ahead financially by using your card. Similarly, it doesn’t make sense to forgo a higher interest rate on your money to save a smaller amount of mortgage interest.

Of course, there is something to be said for shedding mortgage debt sooner. But before you decide to pay off your mortgage early, consider the interest rate on your loan. And if it’s really low, you may want to consider sticking to your regular payment schedule, even if you have the ability to get rid of that debt at an earlier point in time.

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Many purchases made online are impulse buys. Here’s one change I’ve made to significantly reduce the amount of money I spend on the internet. 

The internet has changed the way we do so many things in life, including shopping. I buy way more online than I do in person, so much so that I sometimes forget how to even use the credit card machines they have in stores now (insert instead of swipe, when did that happen?)

While I am happy to make most of my purchases from the comfort of my own home, there is a big downside to being able to shop whenever I want at all hours of the day and night. I end up spending money on stuff I don’t necessarily need and didn’t plan to buy. And that’s not great for my bank account.

I’m not alone in my impulse-buying habit either. Some studies have shown that impulse buys account for as much as 40% of all money spent on e-commerce.

But just because this is normal doesn’t mean I wanted to continue with this habit. The good news is, I found a really simple and effective way to dramatically reduce my online shopping. Here’s what I did.

This simple move made all the difference

To spend less money online, I made the choice to unsubscribe from all marketing emails that come into my inbox. When the emails showed up, I simply opened them up, scrolled down to the bottom without looking, and hit the “Unsubscribe” button.

It took me a few months of diligently doing this with every single email from a store that came into my inbox — especially since I was signed up for a lot of emails from stores. Most places incentivize you to provide your email by offering a discount, or they sign you up automatically when you make a purchase unless you figure out how to opt out.

Now, my email has been blessedly free of pretty much all store newsletters announcing sales or coupon codes, and it has actually made a huge difference in my spending habits.

When I compared credit card statements over a period spanning several months both before and after I started unsubscribing, I found that my spending online was down about 32%. And, there were numerous stores I had purchased several things from that I basically forgot existed once I stopped getting their emails in my inbox.

Could unsubscribing from marketing emails work for you too?

Unsubscribing from emails designed to sell you something is an easy way to not buy as much. After all, without ads coming to tell you what a good deal you are missing out on, there may be some products you never even know exist or even think about buying.

The email newsletters also do a really good job of creating a fear of missing out. If I don’t buy this Halloween fall centerpiece at this amazing price, it will be gone forever and my dining table will go empty. I’ll regret it for Halloweens to come, always wishing I’d spent the $24.99. At least that was the mindset I was falling into when I was getting marketing emails all the time.

You really have nothing to lose by not letting stores flood your inbox with their promotions, so why not try to unsubscribe for a few months and see if you notice that your credit card bills are a little smaller?

If you’re worried about missing out on coupon codes (which was my big concern), you can always install the Honey app in your web browser that finds discount codes for you automatically when you’re shopping online. You’ll still get your savings, but only when you’re on a site you really need to visit to buy something you wanted because you decided that and not because a marketing email convinced you to do it.

So, go ahead, hit that unsubscribe link when emails start flooding your inbox. Hopefully, you’ll have the same success I did and your bank account balance will grow as your wasteful online shopping habit comes to a halt.

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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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Junk fees are a big problem, and the White House is coming after those who charge them. Here’s what you need to know. 

When you put money in the bank, you hope the cash will be kept safe so you can use it to pay off credit cards and other bills or accomplish financial goals. Unfortunately, sometimes this doesn’t happen. Sometimes your bank can actually take some of your money in the form of junk fees.

The Biden Administration has been on a crusade to eliminate these unnecessary costs. And it’s had some success in the banking sector. But this doesn’t mean everyone is free of unnecessary surprise expenses from their banks.

Here’s what you should look out for to determine if your personal finances are being affected by junk fees.

What junk fees do banks charge?

Junk fees are unexpected, often hidden, costs that can take money out of your pocket. Banks have notoriously been guilty of charging a lot of them, including:

Account maintenance feesOverdraft feesATM feesFees for lost or misplaced debit cardsBounced check fees if you write a check to someone and don’t have enough money in your accountFees for depositing a check that bounces that someone else writes to youNon-sufficient funds (NSF) feesForeign transaction fees

The funds lost due to these junk fees is significant. In fact, the Consumer Financial Protection Bureau found that the average cost of overdraft or non-sufficient funds fees was between $30 and $35 in 2019. During that year, banks made $15 billion from these fees, which are charged when you try to take too much out of your account and your balance goes negative.

The White House has been making a major effort to eliminate these fees, and it has had success with some of the more common bank fees. For example, in 2021, when the CFPB increased oversight on banking practices, 15 out of 20 large banks stopped charging bounced check fees.

The CFPB has also released guidelines that banks need to follow. This prevents surprise overdraft fees that are charged when it looks like you have money in your account when you make a purchase, but you get hit with fees because there’s not sufficient funds by the time the purchase clears. And, the CFPB stopped “surprise depositor fees” as well, which are charged if you deposit a check someone wrote you that bounces.

The CFPB’s action on these fees can help cut consumer costs by $1 billion. But, it doesn’t mean all fees have disappeared from all financial institutions.

Is your bank charging you junk fees?

To find out if your bank is charging you unnecessarily, take a close look at your account terms and conditions. You can usually find a summary of account fees by signing into your online account or checking the financial institution’s product guides. You can also check your bank statements to see if you’ve been charged anything unexpected.

If you have been hit with fees, it may be time to switch banks so you don’t keep losing your hard-earned cash. Check out this list of the best checking accounts to find a good place to keep your money. Follow that up with our list of the best savings accounts, too. Read the details carefully to ensure you’re picking a financial institution that’s not going to make your financial situation worse.

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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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