Money Management

Get Kirkland products delivered within hours, no membership required. Find out how Instacart compares to Costco.com. 

Did you know you can pay someone to deliver Costco toilet paper to your door in just hours? How about a 40-count case of Arrowhead water bottles? You don’t need a $60/year Costco membership to order.

You can buy Costco products on Instacart, the online grocery-shopping app.

Here’s how:

Navigate to Instacart. Search “Costco”Shop and drop products into your cart.Check out.

My housemate is a full-time mom who needs sitters to watch the kids when she’s gone. Getting delivery through Instacart saves her the hassle and allows her to shop from home. Adding Costco to her typical Instacart routine was an easy decision.

But Instacart prices are higher than their Costco.com counterparts. And Instacart typically charges delivery fees. Still, it’s a great way to get Costco delivery without a membership.

Pros: speed, convenience, zero membership

The best part of shopping for Costco Delivery through Instacart is the convenience.

To shop at Costco in person, you typically need the following:

$60/year Costco Gold Star membershipA photo ID and Costco card at checkout60 minutes to drive to/from Costco, shop around, and check out

To shop at Costco.com, you need the following:

$60/year Costco Gold Star membershipInternet access

To shop at Costco through Instacart, you need the following:

Internet access

Instacart is the easiest way to get Costco delivery without a membership. Costco will advertise a Gold Star membership to you at checkout, but it’s optional.

Instacart will drop off orders to your porch within hours. That’s wonderful when you need cheap groceries right now, or you just ran out of toilet paper and must restock ASAP. If you live in a big city, you’ll probably qualify for fast delivery.

Instacart makes shopping fast and convenient. You can save your favorites in the app so they’re easy to buy again. My housemate uses this feature to restock essentials like fresh produce and toilet paper. It’s a big timesaver. You can also schedule deliveries around your calendar.

Cons: price

In exchange for incredible convenience, shoppers take a noticeable hit to their bank accounts.

Instacart charges service and delivery fees and requests tips for delivery people. Power users can sign up for a $99/year Instacart+ membership to eliminate delivery fees; current Costco members may prefer Costco.com, which offers free same-day or two-day delivery.

Items on Instacart are more expensive than on Costco.com. A brief toilet paper test reveals that a 30-count of Kirkland Signature Bath Tissue varies in price:

Costco.com: $23.99Costco Wholesale on Instacart: $24.87

Small price increases can quickly add up. If 12 items in your cart cost $0.50 more on Instacart than in-store, you’ll pay a $6 premium upon checkout. That’s on top of whatever Instacart charges you for fast and convenient delivery. It’s a small but noticeable markup.

Who benefits from Instacart the most?

Only some benefit from getting Costco delivered through Instacart. Here’s who benefits the most:

Instacart+ members and frequent usersShoppers without a Costco membership

Interested shoppers should consider checking out what Costco offers through Instacart. Instacart typically gives free delivery to first-time users (though you’ll still have to pay a $3-5 service fee). Plus, the interface is slicker than Costco.com, so you spend less time shopping.

But Costco members should consider sticking to Costco.com. Depending on where you live, you can get same-day or two-day delivery at no added cost. Costco.com prices are slightly lower. Finding things and scheduling deliveries is more of a hassle, but you’ll save money.

TL; DR: Shopping on Instacart is a great way to get Costco delivery without a membership, but it’s pricier. You can shop with a cash back card to earn up to 5% back at checkout, in-store, or online. No matter how you shop, you’ll get low Costco prices on all your purchases.

Another little-known fact about Costco is that it offers 24 special warehouses that sell different products than regular Warehouses. These are called Costco Business Centers, and you can check them out on Instacart, the Costco Business Center website, or in person.

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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.Cole Tretheway has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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CD interest rates aren’t directly tied to the Federal Reserve’s rate moves, but there is certainly a relationship. Read on to learn more. 

After pausing its rate-hike cycle at its June meeting, the Federal Reserve is widely expected to increase the benchmark federal funds rate at its meeting later this month. In fact, according to CME’s FedWatch tool, markets are pricing in a 92% chance of another 25-basis-point (0.25%) rate hike in July.

If you’re in the market for a CD, you might be wondering whether yields will become even higher if the Fed raises rates. Unfortunately, the answer isn’t a simple one, but here’s a rundown of what you need to know.

The relationship between CD interest rates and the Fed

The key point to know before we dive in is that CD interest rates are not directly tied to the Federal Reserve’s interest rate moves. For example, if the Fed increases the federal funds rate by 50 basis points (0.50%), that doesn’t mean your bank’s 1-year CD rate is going to rise by the same amount.

Having said that, the two tend to move in the same direction. Since early 2022, the national average yield on a 1-year CD has increased from 0.27% to 1.66%. And this includes CDs offered by branch-based banks, which tend to pay relatively low interest rates — the yields from our favorite high-yield CDs have increased even more sharply in the current rate hike cycle.

CD rates and future expectations

It’s important to consider the underlying reasons banks increase deposit rates when the Fed raises benchmark interest rates. Specifically, when the Fed raises rates, the yields paid by risk-free instruments like short-term U.S. Treasuries increase, and in order to remain competitive for deposits, banks tend to raise their rates accordingly.

So, while there is no rule that says banks have to give depositors more money just because the Fed raised rates, in practice that is generally what happens. High-yield savings accounts tend to see the closest relationship, but CD rates tend to rise along with the Fed’s moves as well.

However, because they lock in rates for a certain amount of time, CD rates tend to be a combination of the current interest rate environment and future expectations for rates.

Think of it this way: The Fed is expected to keep rates rather elevated for at least the next year or so. The median expectation for May 2024 is a federal funds target range of 5% to 5.25%, exactly where it is now. So, the yields paid by our favorite banks on 1-year CDs range from 4.5% to 5.3% as of this writing.

However, the current expectation is that the Fed will start to lower rates by mid-2024 and continue to do so for the foreseeable future. By the end of 2024, the median expectation calls for a federal funds rate of a full percentage point below where it is now. So, while there is not a direct relationship with CD yields, this future expectation of lower rates is the biggest reason why our top 5-year CDs have yields ranging from 3% to 4.35% as of July 10 — significantly below the available rates on 1-year CDs.

The bottom line

To sum it up, if the Fed raises interest rates again in July, there’s a good chance that the CD interest rates offered by financial institutions will also trend upward. But there’s a lot more to the story. Shorter-term CDs tend to be much more sensitive to the Fed’s interest rate moves, while longer-maturity CDs tend to be a bit more forward-looking.

In a nutshell, the biggest advantage of using a CD instead of a savings account is that if rates fall, you’ve locked in an interest rate for a certain period of time. On the other hand, one of the biggest drawbacks is that if interest rates rise, you don’t benefit. Nobody knows what the Fed will do, but the CD interest rates paid by some of the top banks today are significantly higher than they were. With the Fed widely expected to start lowering interest rates within the next year, CDs could be a good way to lock in a high yield on your savings, regardless of whether the Fed raises rates in July.

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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.Matthew Frankel, CFP® has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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Do you keep a lot of your money in bank accounts? Find out how to make sure you’re protected from loss. 

The Federal Deposit Insurance Corporation, or FDIC, was established in 1933 during the Great Depression in order to restore the public’s confidence in the U.S. banking system.

Initially, deposits were insured up to $2,500 in 1934, and the limit has increased several times over the years to keep up with inflation and to keep the public’s confidence high. In 1980, the limit was increased from $40,000 to $100,000, and it remained that way until the financial crisis in 2008 threatened to cause the U.S. financial system to collapse. In response, Congress approved a temporary increase to $250,000 in FDIC insurance, which was ultimately made permanent.

Although the current FDIC insurance limit is 100 times its initial amount, it still isn’t enough to protect all deposits in U.S. financial institutions. Many people have more than $250,000 in savings accounts, and it’s quite common for businesses to keep millions of dollars in deposit accounts.

If you need more insurance than the FDIC currently provides, there are several different ways you can get it.

Ways to get more than $250,000 in coverage

The key concept to keep in mind is that the FDIC limit of $250,000 is per person, per institution. And with those italicized words in mind, there are a few ways to potentially get more coverage.

Use multiple banks

Perhaps the most obvious way to get around the FDIC’s insurance limit is to use more than one financial institution. For example, if you have $400,000 in a savings account, you could move $150,000 of the money into an account at a different bank in order to stay within the $250,000 limit at each institution. There are some excellent high-yield savings accounts offered by rock-solid banks that make it easy to move money between your accounts.

Open a joint account

Since the FDIC’s limit is $250,000 per person, one way around it is to open a joint bank account. For example, if your spouse’s name isn’t currently on your savings account, adding them would effectively double your FDIC insurance limit to $500,000.

Use a bank that offers excess FDIC insurance

Some banks have decided to take matters into their own hands and offer higher levels of FDIC insurance on their own. The way they do this is essentially the same strategy discussed in the previous section — by spreading your money among different banks.

As one example, customers with savings and checking accounts at SoFi can get as much as $2 million in FDIC insurance. Customers who opt in can still access their entire account balance through SoFi’s platform, but behind the scenes, it will technically be deposited at several banks. Other banks are offering similar programs, and some have even higher limits.

Does the FDIC insurance limit even matter?

Another important question is whether the FDIC insurance limit is simply a symbolic number. In other words, is there any scenario in which a bank would fail and depositors with over $250,000 in their accounts would lose money?

The short answer, based on recent events, is probably not. In the wake of Silicon Valley Bank’s collapse, where the bulk of deposits were not covered by FDIC insurance, regulators quickly confirmed that all depositors would be made whole. The U.S. Treasury Department and Federal Reserve both stopped short of saying that a full guarantee would apply to other potential bank failures, but depositors should be aware that the government is unlikely to allow any depositors in U.S. financial institutions to lose their money if the bank doesn’t survive.

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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 recommends U.S. Bancorp. The Motley Fool has a disclosure policy.

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There are still places where homeownership has a less expensive bar to entry. Learn how you can make owning your dream home happen today! 

The dream of owning a house is one that many of us aspire to, but in many cities across the U.S., homeownership can feel like an unattainable goal — especially for those just starting out. However, there is good news for prospective buyers on a budget: starter homes you can buy with a lower down payment can still be found in some cities.

Home prices hit all-time highs

Since the pandemic, the average sale price of homes has gone up by close to 40% to $516,500 as of Q1 2023, hitting all-time highs. This is great news for homeowners, as it signifies that the real estate market is strong and healthy.

However, prospective buyers may find it more challenging to afford a house, especially in areas where the demand for homes is high. The pandemic caused a surge in demand for housing, as people were spending more time than ever before at home. In addition, interest rates were at historic lows.

At the same time, there has been a limited supply of homes on the market, especially starter homes. This combination of high demand and low supply has resulted in a spike in home prices across the United States.

As a result, buyers have faced fierce competition, with bidding wars and homes selling above asking price becoming increasingly common.

The number of starter homes at all-time lows

Starter homes, a popular choice in the past for first-time home buyers, are now a rare commodity. Also referred to as an entry-level home, they are typically the initial purchase for home buyers and generally sized less than 1,400 square feet.

Once regarded as small, affordable houses for young individuals or families to enter the real estate market, they now signify the least expensive homes within a particular market. In addition, it is not just renters and young families who are seeking these homes. Downsizing baby boomers, second-home buyers, and property investors are now competing directly with first-time buyers for this shrinking housing sector.

Starter homes used to account for around 70% of all new homes built in the 1940s. That number fell to 40% in 1980, and by 2019 had dwindled to just 7%. This decline in supply of starter homes has caused prices to surge and made homes much more unaffordable.

These homes are also now much harder to find and significantly more expensive for first-time home buyers. As a result, many families are struggling to purchase their first home and step on the property ladder.

15 cities with the most affordable starter homes

For first-time home buyers, it’s no secret that the housing market can seem daunting and unattainable. However, there are smaller secondary cities across the U.S. that still have starter homes available at reasonable prices.

Point2 compiled a list of median prices for homes under 1,400 square feet in the 100 largest secondary markets in the country. The data shows that 15 of these towns have average required down payments of $50,000 or less (assuming a 20% down payment), making them more affordable for those just starting out.

This information can be especially helpful for home buyers trying to match the cost of a starter home to their yearly income. While the market may not be the easiest to navigate, these lesser-known cities could offer a realistic way for potential home buyers to break into the market.

While purchasing a starter home can still prove to be a challenge, it’s worth considering looking outside of major cities for more affordable options.

While they may not be as plentiful as they once were, some cities still offer affordable starter homes where a 20% down payment comes out to less than $50,000. Whether you’re looking to relocate to a new city or take your first step on the property ladder, these 15 cities offer attractive options for those interested in homeownership. With a little bit of research, and perhaps some patience, you can still achieve the great American dream of owning your own 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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A car is a big purchase, especially these days. Read on for a look at what to consider when you’re deciding how much car to buy. 

Thanks to supply chain issues and inflation, just about everything is more expensive lately. Cars are no exception — data from Edmunds revealed that a record 17.1% of consumers took on a monthly car payment of $1,000 or more in Q2 2023. For perspective, that’s up from 16.8% of consumers in the previous quarter, and 4.3% from just four years earlier in Q2 2019.

Despite higher prices, if you need a way to get around, you may not have many options besides financing a car, especially if you don’t have the cash saved to buy one outright. Ideally, you can make do with a vehicle that costs you less than $1,000 per month, though. Let’s take a look at the factors you need to keep in mind if it’s time to buy a car.

Consider all the costs of owning a car

When you finance a car, you’re agreeing to take on not just the expense of your payments, but a whole boatload of other costs, too. You’ll need to pay for auto insurance, which is a legal requirement in just about every state — and highly recommended, even if it isn’t required where you live.

You’ll have to keep your car up to date on maintenance. You’ll also have to pay for gas or electric charging. In short, owning a car isn’t cheap, and it’s important to reckon with all your potential costs before committing to a loan payment and ensure you have room in your budget for them.

How much of your income should you spend on a car?

Opinions vary when it comes to this question. The car experts at Edmunds recommend committing no more than 15% of your take-home pay to payments on a new car, and no more than 10% of take-home pay to payments on a used car. This might seem very low, but as we discussed above, your payments are not the sum total of your expenses to own the vehicle. By keeping payments to a lower set percentage of your budget, it’ll be easier to cover a big repair bill or shell out your auto insurance deductible if you need to file a claim.

Let’s say you bring home $48,000 per year, after taxes. If you’re hoping to buy a new car and stick to that 15% suggestion, that leaves you with $7,200 per year to spend on a car payment — or $600 per month. If you opt for a used car for 10% of your income, that takes you down to $4,800, or $400 a month. With real dollar amounts based on your own budget, you’ll be able to come up with your own number to aim for.

Down payments and loan terms

Ideally, you’re intending to make a down payment on a car purchase. If it looks as if your monthly costs will be too high to afford a particular car, can you make a larger down payment to bring down the monthly payments? If not, it might be wiser to find a less expensive car to buy — which may be a difficult prospect in today’s market.

You might be considering asking for a longer payment term to compensate for a higher price, but this is a bad idea, too. The longer your auto loan, the more likely it is that you’ll end up underwater on it — or owing more than the car is worth. This could be a real problem if you get into an accident, your car is declared a total loss, and your insurer pays out only what the car is worth, rather than what you owe. You’d have to come up with the difference to repay your lender.

How can you make buying a car more affordable?

Ultimately, it’s best to avoid stretching to afford a car purchase because the ownership costs on one are likely to be one of the biggest parts of your budget (for many people, car expenses might be second only to their housing costs). Aim to keep your costs as low as possible by:

Buying a used car that is in good condition. Buying a cheap used car that needs tons of repairs won’t save you money.Shop around for the best personal loan. Don’t assume the dealership financing is your cheapest option.Keep the car for as long as possible. Not having a car payment can be a huge help for your finances.

Before you start looking for a car to buy, take a long hard look at your income and expenses to give yourself a number to aim for. If you keep a car payment to just 10% to 15% of your take-home pay, you’re less likely to end up in a world of financial hurt.

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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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Sometimes, even hobbies that are billed as inexpensive end up requiring a lot of money. Read on to learn more. 

I’m someone who makes a lot of effort to save money. But I also believe in spending money on the things that make you happy. For me, those things include running, going camping, and baking. But in my experience, these so-called “cheap” hobbies are actually far more expensive than you’d expect them to be.

1. Running

You’d think running would virtually result in a $0 credit card tab. I mean, you’re heading to the street and moving your body. Why should that cost anything?

But to run, you need running shoes. And even if you buy fairly inexpensive ones like I do, if you have to swap them often, the cost could really add up.

Nike says the general convention is to change your running shoes after every 300 to 500 miles. Based on my habits, I find that I need a new pair of shoes every three to four months.

Even if I only spend about $65 to $70 per pair, which is typical for me, that’s over $200 a year. And that doesn’t include having to replace socks that get worn out.

2. Camping

Camping can be pretty inexpensive — once you have the gear. But getting the gear you need could cost you hundreds of dollars, especially if you’re looking to camp as a family.

A four-person tent, for example, could cost you well over $200. A sleeping pad, which you probably want, could cost you $45 — but that’s per person in your household. And you’ll need to eat on your camping trips. A basic camping stove might cost upward of $100, depending on the model you buy.

These are only some of the items you might need to pull off a family camping trip. Of course, if you’re camping solo, your costs might be less. But be aware that the upfront costs of going camping for the first time can be huge. And even once you have your gear, you might need to replace some of it as it gets worn, plus pay fees to book certain campsites.

3. Baking

You can buy a basic baking set for $50 or less on Amazon. But that doesn’t account for the cost of ingredients.

Now, if you’re sticking to things like basic brownies or chocolate chip cookies, you may not spend all that much on a per-recipe basis. But some recipes might require ingredients you may not have in your house. And if you’re someone like me who enjoys baking new things, the costs can add up — especially with grocery prices being higher these days due to inflation.

In fact, I recently volunteered to make a large batch of a pretty easy cookie bar recipe for a fundraiser at my son’s school. I easily spent close to $15 on ingredients, and that’s not including the flour and sugar I already had in bulk in the house.

Spend on the things you love, but choose carefully

It’s a good thing to have hobbies, even if they end up costing you money along the way. But if yours end up being more expensive than anticipated, you may need to pick and choose which ones to focus on if money is tight.

On my end, I refuse to compromise on new running shoes. I’ve cheaped out in the past and stretched older pairs only to feel the impact, so that’s an expense I’ll prioritize. But if I’m laying out money for a new pair of running shoes, I maybe won’t spend the next week playing around with new recipes in the kitchen.

Meanwhile, if you’re inspired to pick up a new hobby, you may want to do some research as to what it’s likely to cost. That way, you won’t be caught off guard.

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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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