Money Management

Amazon Subscribe and Save offers me the chance to get good prices on items I buy, while also saving myself a lot of hassle. Here’s how. 

Amazon Subscribe and Save is a feature the online retailer offers that allows you to get reduced prices on items if you arrange for them to be shipped on a regular schedule. When you buy five or more items through Subscribe and Save, you can qualify for a 15% discount on them, which leaves you more money in your checking account.

I buy many items through Subscribe and Save, both because I like that this discount means charging less on my credit card and also for convenience. In fact, here are a few key items I always make sure to purchase using this method.

1. Bai drinks

We don’t drink sodas in our house but we occasionally like to have a drink that has more flavor than plain water can provide. Bai 5 drinks are our solution. But, they can be expensive. And if you buy them in stores, you often are stuck choosing between purchasing individual bottles or buying variety packs that contain some flavors we aren’t big fans of.

Through Amazon Subscribe and Save, however, I can buy packs of just the flavors we want. This is a better value for us because we’d rather have a 12-pack of the specific kinds of drinks we enjoy.

2. Dishwashing detergent

Dishwashing detergent is another item that we always buy through Subscribe and Save. Bottles of dish detergent are heavy and a pain to bring home. Amazon has Seventh Generation (our preferred brand) at a competitive price. We can get a 6 pack for $36.03, which comes down to about $6 a bottle — considerably less than the $13.07 per bottle we’d spend at a local big box store.

3. My dog’s supplements

Supplements for my dog are another item that I always opt to get from Subscribe and Save. My dog is 16.5 years old and takes a lot of different supplements to help keep her heart strong after heart surgery and to help stave off arthritis in her joints so she can continue to take long walks with me.

Many of these supplements wouldn’t be easy to find in local stores. And I don’t want to have to remember to get them when she runs out and risk her missing a day or two of pills until I’m able to pick them up. With Subscribe and Save, I just get a new bottle at the exact right time that the old one is running out and I never have to think or worry about whether she’ll get her vitamins.

4. Baby diapers

Finally, baby diapers are another item that I love to get from Amazon. It is really convenient to have diapers just show up at my house rather than having to carry the bulky items. Plus, this is one thing you definitely don’t want to run out of, so it’s helpful to have them arriving on a regular basis — rather than being forced to remember when I might be running low.

There are other items I add to my Subscribe and Save list on a periodic basis, but these are the must-buys. The convenience and value simply can’t be beat.

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

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.

Read our free review

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. Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon.com. The Motley Fool has a disclosure policy.

 Read More 

Whether you go new or used, a car can be a major expense. Explore which types of accounts are a good place to keep your money when saving for a car. 

If you’re planning to buy a car, saving up for it is more important than ever. The average new car price was $48,528 in May, according to Kelley Blue Book. Used cars aren’t cheap, either, selling for an average of $27,256.

You can get an auto loan to help cover the cost, but interest rates are on the high side. The average auto loan interest rate ranges from about 6.9% to 17%, depending on your credit score. So, it makes sense to put down as much of a down payment as possible to avoid taking on too much costly debt.

But what’s the best place to keep your car savings? This isn’t money you should invest, because the market can go up and down. You don’t want your car savings to be worth less when you need it. Fortunately, there’s one type of financial account that’s ideal for your car fund.

A high-yield savings account is a good option

For security and flexibility, high-yield savings accounts are the best choice. These are like any other savings account, with one important difference — they pay much higher interest rates. The average interest rate for a savings account is currently 0.42%. Many high-yield accounts are offering upwards of 4%.

To put that difference into perspective, if your savings account pays 0.42%, a $10,000 balance would earn you about $42 in annual interest. With a high-yield account that earns 4%, that same balance would earn you about $400. From a personal finance standpoint, it’s an easy call.

You can withdraw your money from a high-yield savings account at any time. That makes it perfect if you’re not exactly sure when you’re going to buy a car. You could take out your money after one week, one month, or one year. It’s all up to you.

If you’re wondering how secure these accounts are, most are FDIC-insured just like accounts from the big banks. That covers up to $250,000 per eligible account in the event of a bank failure. You can confirm that an account offers FDIC insurance on the bank’s website, by contacting the bank, or by contacting the FDIC.

You could also get a money market account or a certificate of deposit

There are a couple of potential alternatives to consider, if you’re not sure a savings account is right for you.

Money market accounts have the benefits of both savings and checking accounts. Many of the top money market accounts have similar interest rates to high-yield savings accounts. In addition, they also let you use your money with a debit card, checks, or both, like you can with checking accounts.

This makes it easier to access your money. With a savings account, you’d normally need to transfer your money to a checking account first. With a money market account, you could write a check directly from that account when buying a car.

If you want to lock in your interest rate, you can do that with a certificate of deposit (CD). Savings accounts and money market accounts have variable interest rates that can go up and down. They’ve gone up quite a bit over the last year and change, but there’s no telling how long they’ll stay that way.

CDs are accounts you open for a fixed time period and with a fixed interest rate. Terms generally range from six months to five years. And the best CD rates are sometimes higher than the highest savings account rates, so you could lock in a fantastic rate this way.

However, you can’t deposit more money into a CD after setting it up. You’d need to open a new CD, meaning this may not be a convenient option if you plan to consistently add to your car savings. But it can work well if you have a large chunk of money saved already and want to ensure that it earns a high interest rate.

Building your car savings

To sum it up, a high-yield savings account is a great place to save for a car. If you want more withdrawal options, money market accounts are worth considering. And CDs work well for getting a fixed interest rate on your savings.

If you’re going to need an auto loan, also take this time to work on improving your credit score. That can help you get the lowest interest rate on your loan. Once you’re ready to buy, make sure to compare auto loan options, as you could find that some lenders offer much better deals than others. Cars may be expensive, but a large down payment and a reasonably priced auto loan still make a big difference.

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

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.

Read our free review

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.

 Read More 

Buying a home is a big commitment and a big expense. Read on to learn why you should — and shouldn’t — buy a home. 

Buying a home is something on many people’s bucket list. In fact, purchasing a home has long been considered to be a part of the American dream.

But, a home is also a huge financial commitment. It requires you to get a mortgage loan, which means you will end up committing to paying that back with interest for a long time. And homeownership can come with other added costs beyond the mortgage payment that can do a number on your bank account, such as maintenance expenses and property taxes.

There are both good and bad reasons to take on the commitment that homeownership entails, and you need to make sure you’re acting with the right motivation before you buy. Here are some of the best and worst reasons to move forward with becoming a homeowner.

Best: Because you’re in a good financial position and are ready to set down roots

The single best reason to buy a house is because you want to buy a place you will stay in permanently and make your own and you are financially prepared for all that entails.

To be financially ready for homeownership, you should ideally have a 20% down payment. With the median sale price of homes coming in at $436,800 in the first quarter of 2023, this would mean you’d need to have about $87,360 saved. If you can’t meet that milestone, aim to save at least 10% so you have a broad choice of lenders — but know you will have to pay for private mortgage insurance to protect the lender when you put less than 20% down.

You’ll also want to make sure you have several months worth of living expenses saved up in an emergency fund so you can keep paying your mortgage for a while even in the event of a job loss or job interruption due to illness or family issues. And, you’ll want a good credit score so you can qualify for an affordable rate.

By making sure you’re financially ready, you can avoid having your home become an obstacle to financial security. And, by making sure you’re ready to stay put, you can avoid getting into a situation where you have to sell quickly and incur high transaction costs — not to mention the stress of waiting for a buyer.

If you want to build a lasting home for yourself and your loved ones and you have the money to do so without jeopardizing your finances, then this is the best reason for a home purchase.

Worst: Because you feel pressure to purchase a home

There are actually two really bad reasons to buy a home. The first is because you feel pressure to do so.

Homeownership is often described as part of the American dream and you’ll probably hear people say you shouldn’t “waste money” on rent. But, homeownership doesn’t necessarily have to be part of your dream if you don’t enjoy owning and maintaining a property. And you aren’t necessarily wasting money on rent if you’re paying for a place to live — especially if you can rent for cheaper than you could buy a comparable property and can invest the difference.

Don’t let anyone else pressure you to make a major lifestyle and financial commitment like purchasing a house.

Worst: Because you think you’re going to make a ton of money on your property

Finally, another bad reason to buy is because you anticipate making a ton of money on the resale of a home. There’s no guarantee you will always see your real estate appreciate substantially and even if your home does go up in value, you’d have to sell it to realize the gains — and then likely buy another place to live, which could eat into your profits. There are also high transaction costs with both owning and selling a home, including property taxes, insurance, maintenance costs, and real estate agent fees.

You should buy a home to live in for the right reasons, not the wrong ones — so be sure to consider your motivation before moving forward with one of the biggest purchases of your life.

Our picks for the best credit cards

Our experts vetted the most popular offers to land on the select picks that are worthy of a spot in your wallet. These best-in-class cards pack in rich perks, such as big sign-up bonuses, long 0% intro APR offers, and robust rewards. Get started today with our recommended credit cards.

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.

 Read More 

While I want to have money for emergencies, I don’t want to put too much money into an account that I try never to touch. Here’s what I do instead. 

My emergency fund has six months of living expenses. I do not want to keep even $1 more than that amount in my emergency fund, even though I believe it is really important to be prepared for unexpected expenses so I don’t end up in credit card debt.

I’m careful not to keep too much emergency money in my high-yield savings account for a few key reasons.

My emergency fund is not an investment

One big reason I don’t keep a lot of money in my emergency fund is because I would rather invest my money and earn a better return when possible.

I keep my emergency money in a high-yield savings account because I can’t afford to risk losing any of it, or having it tied up and being unable to access it. My savings account pays me 4% interest, which is a competitive rate for a savings account. It’s still well below the amount I could earn if I had my money in a S&P 500 index fund (which can probably earn about a 10% annual return over the long term), though.

I don’t want to keep any more of my money than necessary in an asset providing me a much lower ROI than I could get elsewhere. So, I only keep the money I truly need in there and I divert the rest to my brokerage account so I can invest in ways that will do a better job helping me grow my net worth.

I only use my emergency fund for truly dire emergencies

The other big reason why I don’t maintain a bigger emergency fund is that I have earmarked this money only for truly dire emergencies that are completely unexpected. I do not want to draw from my emergency fund for predictable but surprise expenses, such as for car repairs or home repair tasks or copays for doctors appointments.

See, while you can’t predict when these things will happen, you can predict they will happen eventually. So I don’t treat them as emergencies, but rather things to plan and save for. I have separate funds for healthcare needs and for car and home issues and I keep money in those accounts, so I am ready when the inevitable happens.

The money in my emergency fund is only there in case someone gets really sick, we experience a major decline in income, or something else really and truly unexpected happens. Since I want to divert money into my other accounts to save for the predictable surprises, and since it’s not as likely I’ll have to tap my emergency fund for them, there’s little reason to sock more money into this emergency account.

The six months of expenses I have saved should give me more than enough time to recover or make another plan if a true emergency strikes. I won’t put extra money in there when it could serve me better elsewhere. Of course, everyone needs to make their own decisions about what they are comfortable with — but, remember the true purpose of an emergency fund when setting your target amount to ensure you don’t end up with too much or too little.

These savings accounts are FDIC insured and could earn you 11x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you 11x the national average savings account rate. Click here to uncover the best-in-class picks that landed a spot on our shortlist of the best savings accounts for 2023.

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.Christy Bieber 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.

 Read More