Money Management

The average smartphone bill is $114 per month. Read on to learn how to cut your bill down significantly. 

While inflation may be cooling, the price of nearly everything around is still much higher than it was a few years ago — and that goes for your monthly smartphone service bill. A WhistleOut survey found that the average phone plan now costs $114 per month.

Unsurprisingly, most people don’t love paying that much. The survey showed that half of Americans are unhappy with their smartphone bill cost. If you’re one of them, you may benefit from the phone plan hack I stumbled on a few years ago: The $25-per-month prepaid smartphone plan.

Similar service, big discount

A few years ago, I signed up for AT&T’s prepaid plan, which costs just $25 per month when you pay for the entire year upfront. I pay all taxes and fees in that one-time payment — a total of $319 — and get a year’s worth of service.

WhistleOut’s survey says the average single-line cellphone plan costs $76 per month, meaning my cellphone plan is three times cheaper — about $600 less per year — than the average single-line plan.

What do I get for that price? My plan comes with unlimited talk, unlimited text, and unlimited data, capped at 16GB of high-speed data. Up to 10GB of unused high-speed data rolls over to the next month. I can also use my smartphone as a hotspot for free.

And, while I don’t have a 5G-capable phone, my plan does include access to AT&T’s 5G network.

What’s different about prepaid plans?

One of the biggest differences between a prepaid and a more traditional plan is when you pay. Spending money on 12 months’ worth of service means a big bill upfront. I pay $638 for two of these plans, one for me and one for my wife, on my credit card once every year.

Also, some people may need more high-speed data than I get. The average American uses 34GB of monthly data (including wifi and cellular). I often connect to wifi, so it’s rare that I run out of high-speed data, but it has happened.

You can check your data usage by logging into your plan’s online account. That’ll give you an idea of how much cellular data you use, and you can then decide which type of prepaid plan works for you.

It also helps to already have your own device for a plan like this. I usually buy used or refurbished iPhones, which helps me avoid a monthly device bill.

An easy way to save big every month

AT&T isn’t the only company that offers inexpensive phone plans, of course. For example, Mint Mobile, which T-Mobile recently purchased, has smartphone plans that start at just $15 per month.

If you’re trying to get your personal finances in order and need to find ways to save money every month, switching to a lower-cost phone plan may be what you need. I’ve saved a few thousand dollars, compared to the cost of traditional plans, over just a few years.

One of the best ways to boost savings is to make simple changes to your finances that automatically save you money — and this is one of the simplest out there.

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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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Costco isn’t just for humans. Read on to learn about some of the fabulous pet products it sells. 

Many people flock to Costco to load up on things like groceries and household essentials. But one thing you may not realize is that Costco is a great destination for pet supplies, too. Whether you’re a new pet owner or have had your pet for years, your goal is no doubt to load up on the things you need at the lowest possible price point. Here are some great pet product deals Costco is featuring right now.

1. Kirkland Signature Adult Formula dog food

Dog food can be a big but necessary expense for those who own a pup. Costco carries a range of dog food products, including this Kirkland Signature Adult Formula blend. It’s a mix of chicken, rice, and vegetables that’s designed to meet dogs’ nutritional needs. And you can snag a 40-pound bag for $49.99 online, which is a pretty competitive price.

As a point of comparison, Chewy sells a 40-pound bag of Purina dog food for $54, though that price drops to $51.30 when you sign up for autoship. But Costco’s in-store prices also tend to be cheaper than what you see online, so you might reap even more savings if you buy your dog food at your local warehouse club store.

2. Scoop Away Complete Performance Plus Scented Cat Litter

Kitty litter is a must for cat owners, and once again, Costco comes to the rescue with its competitive price point. This 42-pound box of cat litter sells for $27.99 online. Amazon sells a similar item for $37.95. Plus, if you use your executive membership at Costco to buy kitty litter, you’ll get 2% cash back on your purchase.

3. Kirkland Signature Dental Chews

If you’re someone who struggles to brush your dog’s teeth, and you hate the idea of having to sedate your dog for a dental appointment, then dental chews are a good alternative. Costco sells this 72-count of dental chews for $36.99. Compare that to a 24-count of Greenies brand dental chews on Chewy for $37.99 ($36.09 with autoship).

4. Catry Bradbury 7 Level Cat Tree with Hammock and Condo

You love your cat, right? So why not spoil them with this deluxe seven-level cat tree? It comes with its own hammock, so really, what’s not to like? It’s a great way to keep your cat engaged, happy, and, ideally, away from your laptop while you’re trying to work from home. Costco is selling it for $99.99, which is a steal compared to PetSmart, which has it for $169.99.

Many pet owners routinely buy their food and supplies from retailers like Chewy and PetSmart. And in some cases, it can pay to order pet items on Amazon, especially if you’re able to snag a discount through the Subscribe & Save program. But before you load up on pet supplies elsewhere, it pays to compare prices and see if Costco has the better deal.

To be clear, Costco won’t always have the better deal. And sometimes, a site like Chewy is your better option. But you certainly won’t know until you have a look.

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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.com. The Motley Fool has positions in and recommends Amazon.com and Costco Wholesale. The Motley Fool has a disclosure policy.

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Inflation has improved over the last year, but a higher federal funds rate could be coming anyway. Read on to learn what it means for your savings account. 

Ah, inflation — it’s been the stuff of financial nightmares for too many Americans since it first started spiraling out of control in spring 2021. Higher prices for just about everything led to more money stress and more compromises with debt and savings for regular consumers. Thankfully, the 10 straight hikes to the federal funds rate implemented by the Federal Reserve since March 2022 have had an impact — inflation peaked at 9.1% in June 2022 but just a year later, it had fallen to 3%.

That reduction came at a pretty heavy cost. The higher federal funds rate isn’t directly reflective of consumer interest rates on financial products like mortgage loans, personal loans, and credit cards, but the two are related. If the Federal Reserve raises rates, lenders typically do too. That means you’ll pay more to borrow money. It’s not all bad news though — if you’ve got money in the bank, there’s good news for you.

You can earn a higher APY on your savings

Along with higher rates on loans and credit cards, the recent spate of rate hikes has also brought with it higher APYs on savings accounts, money market accounts, and CDs, especially those offered by online-only banks. Online banks were already able to offer better rates to customers than traditional banks, because they don’t have physical bank branches to maintain and can pass those savings along to account holders.

What does this mean in real money? As an example, I have the bulk of my savings in an account with an online-only bank. I’ve watched the APY on my account rise since I opened it last spring, and as of this writing, I’m earning 4% on my savings. As far as translating that to an actual dollar amount, if you have $10,000 in an account earning 4% APY, you’ll make nearly $400 on it in a year (if you don’t withdraw money or add any more to the account). This is pretty great — I actively look forward to getting my monthly interest payment and then immediately funneling it toward a savings goal.

What’s next for interest rates — and your savings?

Recent reporting by Reuters suggests that despite pausing on interest rate hikes at its June meeting, the Federal Reserve may be ready to implement another one at the upcoming July meeting (July 26-27). A 3% inflation rate is a huge relief, but the Fed aims for 2% inflation. This rate is “most consistent with the Federal Reserve’s mandate for maximum employment and price stability.” So we’ve still got a little ways to go to get there.

Ultimately, if we do get another fed rate hike, you might see a bump in your savings account’s APY. That in turn means you’ll earn more money on your money, so to speak. But it’s important to remember that savings account APYs aren’t fixed. So if the Federal Reserve starts bringing the federal funds rate down late this year or next, you’re likely to see your rate drop too.

Now is a great time to have money in savings, be it for an emergency fund or a short-term savings goal, such as buying a home (that’s what most of the money in my savings is for these days). So if you haven’t shopped around for a new savings account in a while, I recommend taking a look at our list of the best savings accounts out there. You, too, can earn 4% — or more — on your saved cash.

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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 paying off a HELOC, a pause in interest rate hikes is a good thing. Read on to see why. 

Inflation has been wreaking havoc on consumers since mid-2021, and the Federal Reserve has been desperately trying to bring it down to a more moderate level. Thankfully, it’s been reasonably successful. Though inflation isn’t quite where the Fed wants it to be, we’re getting closer. And the Fed is aware that good progress is being made.

As such, after 10 consecutive interest rate hikes that began in March 2022, the Federal Reserve opted to hit pause on rate hikes during its June meeting. And that’s a very good thing for people who owe money on a home equity line of credit, also known as a HELOC.

The problem with HELOCs

When you take out a personal loan or home equity loan, you sign a loan at a fixed interest rate. This means that unless you refinance your loan, you’re guaranteed to have the same monthly payments until your debt is whittled down to $0.

But HELOCs work differently. Like credit cards, the interest rate you’re charged on a HELOC can fluctuate based on market conditions. And if your HELOC rate rises, your payments on that HELOC can become more difficult to keep up with.

Such is the problem many HELOC borrowers are facing today. The Fed’s recent interest rate hikes have driven borrowing costs upward. And so now, a lot of people are facing higher interest rates on their HELOC balances.

However, the fact that the Fed just hit pause on interest rate hikes could mean that your HELOC rate won’t rise so drastically in the near term. And that’s a good thing.

Of course, we don’t know what the Fed will do at upcoming meetings this year. Much of that will likely depend on how inflation levels trend. But if inflation continues to cool, the central bank will hopefully continue to keep rates flat rather than raise them, giving consumers across the board some relief from soaring borrowing costs.

A home equity loan may be a better choice

Tapping home equity can be a good way to borrow money when you need to. But rather than sign up for a HELOC, you may want to consider getting a home equity loan instead. That way, you can lock in fixed monthly payments that won’t rise on you over time.

Remember, any time you fall behind on debt payments, you run the risk of causing damage to your credit score. But when you fail to keep up with your HELOC payments, you also run the risk of losing your home. That’s because your HELOC is secured by your home. And your lender can, in an extreme situation, seek to force the sale of it to get repaid if you’ve fallen very behind.

Of course, the appeal of HELOCs is that they offer flexibility. You can sign up for a line of credit and draw from it as needed through the years, whereas with a home equity loan, you’re borrowing a single sum at once. But due to the risks involved, you may want to stick to a home equity loan if you’ll be borrowing against your home.

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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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