Money Management

Don’t purchase a new vehicle without reading this advice. 

Buying a car can be a huge expense, and it’s one many people end up having to borrow money for. Whether you opt for a personal loan or a car loan, you need to make smart decisions during the purchasing process.

Finance expert Suze Orman has some tips to help you make sure you get the right vehicle without draining your bank balance and putting your other financial goals at risk. Here’s what she suggests, along with some tips on when and how to follow her advice.

1. Build a good credit score before buying

Orman’s first tip is to try to improve your credit before buying a car unless your score is already pretty good.

“Unless you must buy ASAP, I would advise anyone with a credit score below 700 or so to work on building up their credit score before loan shopping,” Orman explains. And this advice makes a lot of sense, because your credit score has a big impact on whether you can get approved for a car loan at a competitive rate.

The reality is, just about anyone can find some kind of car loan. In fact, there are entire dealerships that advertise themselves as loaning to borrowers with bad credit. But, these loans can often be much more expensive and not have very favorable terms. So, unless you absolutely must borrow to buy a vehicle immediately, focus on improving your credit score first through techniques like debt paydown.

2. Spend the minimum

Orman also suggests looking for a low-priced vehicle, rather than one with all the bells and whistles.

“Your goal should be to buy the least expensive car. Period,” Orman says, indicating this means buying a used car is the best choice for most people.

This advice also makes sense in most situations. A car generally does not go up in value (unlike a house, which usually does). And spending a lot of money on an asset that’s worth less and less each day you own it doesn’t make a whole lot of financial sense.

Of course, you also want a safe car that meets your family’s needs. But, ideally, you should look for the cheapest reliable and safe vehicle that’s big enough to transport the things you need to move around on a daily basis (whether that’s kids or cargo or both).

3. Choose a car loan with a short repayment term

Orman has some especially important advice about car loans — you don’t want one with a long payoff timeline.

“Your goal should be to finance a used car with a loan that is no longer than 48 months,” Omran says. “In fact, a used car you can finance with a 36-month loan is even smarter.” This advice is absolutely crucial because many people end up buying cars they can’t really afford just because they take out very long-term loans. A longer loan term makes the vehicle seem affordable.

You do not want to be paying on a car loan for 60 or 72 months for a lot of reasons. It’s a long time to commit to a car payment, and by the time you’re done paying for it, you could be just about ready to move on to a new vehicle (especially if you bought it used to begin with). A long car loan also means it’s likely you’ll end up owing more than the car is worth because you’ll be paying it off more slowly than it can depreciate in value.

A short-term loan means you can hopefully get the vehicle paid off and keep it for a long time after that, so you can redirect the money you would have been using for continual car payments towards your brokerage account or other important goals.

4. Explore all your loan options

Orman also urges car buyers to check out all different kinds of loan options, including car loans through credit unions. Since there is variation in loan terms from one lender to the next, this is worth doing and can save you money on your car purchase. Don’t assume your dealer has the best financing either — get some loan quotes and compare your options.

5. Consider a car that comes with tax breaks

Finally, Orman recommends thinking about buying an electric car because you can get federal tax credits for doing so in some circumstances.

But, while this is true, electric cars may be more expensive upfront and they work best for people with a specific lifestyle who live where chargers are prevalent and who don’t need to take long road trips. So, you’ll have to consider whether this kind of vehicle would really work for you, rather than just buying to get the tax break.

Ultimately, if you consider these five tips, you should end up in the right vehicle for a fair price with an affordable loan, so you won’t find yourself regretting your purchase.

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Is your favorite big-box store at the top of the list? 

Shopping at warehouse stores is a great way to keep more money in your bank account due to the great prices these types of shops offer on many goods and services.

You have many different warehouse stores to choose from when you’re headed out to do your shopping — and the good news is, each of the three big names has good customer satisfaction rankings.

But, if you’re wondering which is viewed most favorably, some recent data can provide the answer.

This is America’s most beloved big-box store

According to a recent American Customer Satisfaction survey that asked about consumers’ happiness with different supermarkets, Costco was the favorite big-box store. In 2023, Costco had a customer satisfaction score of 82, up from 81 in 2022.

This was a higher rating than the average, which was 76 in both 2022 and 2023. Only Trader Joe’s had a higher customer satisfaction score than Costco, with a score of 84 this year (down from 85 in 2022). Publix tied Costco by earning a score of 82 in 2023, although it came in lower at 80 in 2021.

By contrast, both BJ’s and Sam’s Club both received lower marks. BJ’s had a score of 78 in 2022 and 79 in 2023, while Sam’s Club had a customer satisfaction rating of 79 during both years.

Should you shop at Costco?

There are plenty of very good reasons why consumers love Costco and can’t wait to break out their credit cards to pick up items at the warehouse store.

Costco offers affordable prices and a huge variety of different consumer items, so shopping there is convenient. Many customers also appreciate that the warehouse club regularly offers free samples of delectable treats — or they enjoy dining on the store’s famous $1.50 hot dog and soda combo.

Costco’s house brand, Kirkland Signature, is also a top reason why so many people like to visit the store. Kirkland products range from household items to food to liquor and beyond. Many Kirkland offerings are as good or better than name-brand alternatives, but are available at a much lower price point.

But, while there are definitely benefits to Costco shopping, that doesn’t necessarily mean it’s the right store for everyone. If you’ve never been to Costco and want to try it out, then it may be worth visiting to see what the store has to offer.

You’ll have to consider whether paying the store’s membership fee of $60 to $120 is worth it for you, though. And that will depend on how close the nearest Costco location is, whether the warehouse club carries the brands and types of products you’re interested in, and whether Costco actually has better prices on the things you buy regularly.

Don’t assume that Costco will always be cheaper or will always be your best bet just because so many of your peers love it. Take the time to compare prices locally and to see if you enjoy the shopping experience before you commit to a warehouse club membership.

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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.Christy Bieber 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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Ensure you keep making your mortgage payments. 

Bank failures are rare, but within a span of several days in early March, three banks quickly collapsed: Silicon Valley Bank (SVB), Signature Bank, and Silvergate Capital. The failure of SVB and Signature are the second and third largest bank failures over the past two decades. Unfortunately there is fear that other banks may also follow suit, with First Republic Bank and Credit Suisse requiring emergency funding. With worry that the financial contagion may spread, you may be wondering what would happen to your mortgage if the bank that issued it suddenly fails. It’s a scary thought, but it’s something that you need to be aware of in case you ever face this situation. Let’s take a look.

What happens when a bank fails?

When a bank fails, the Federal Deposit Insurance Corporation (FDIC) steps in and takes control of the bank to prevent further losses. The FDIC is a government-backed agency that insures deposits of up to $250,000.

The FDIC typically responds within a business day by either transferring insured balances to new accounts in another secure bank or directly issuing checks to depositors. The FDIC then sells off all of the assets (such as mortgages) held by the bank to another financial institution that is better suited to handle them.

What happens to your mortgage?

When your mortgage is acquired by another institution, you will continue making payments as usual. However, there may be some changes made to terms or payment structure, depending on the new institution’s policies. Even though the mortgage is a liability for you as the borrower, the mortgage is an asset for the lender. When the FDIC sells the mortgage to another financial institution, it assumes the responsibility for the loan. In many cases, any changes are minimal and won’t have much of an effect on your current payments or loan amount.

The new loan owner is legally required to inform you within a month from the official transfer date. You’ll receive all the essential contact details, know who you’ll be dealing with, and learn if the switch is officially recorded. This ensures a seamless transition and peace of mind in managing your loan payments.

Find out who your new servicer is

It is also important to understand the difference between your mortgage lender and mortgage servicer. Your mortgage lender is the financial institution that loaned you the money. Your mortgage servicer is the company that handles the day-to-day tasks, such as sending you your mortgage statements.

It is critical that you don’t stop paying your mortgage just because your bank has failed. The new owner of the loan can foreclose upon you if you do. If you are unsure who holds your mortgage, contact the FDIC, the mortgage servicer, or you can call the MERS® Servicer Identification System at (888) 679-6377 or visit its website. MERS is a private company that maintains information about mortgage loans and servicers.

No one likes to think about their bank failing, but it is important that we understand what could happen in this scenario. If your bank does fail, don’t panic; just stay informed and updated on any changes or modifications made to your mortgage agreement. This way you know exactly what kind of loan you have with which lender at all times. It is important that you continue making your payments so you don’t risk foreclosure from the new lender. With proper knowledge and preparation, even a bank failure won’t stop you from attaining financial security!

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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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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You don’t want to get caught off-guard financially. 

Buying an apartment could be a wise financial decision, as it could allow you to build equity in a home at a time when you want to live in a city or you don’t have a need for so much space. But once your circumstances change, such as if your family starts growing, then you may be inclined to sell that apartment and upsize to a detached house. Doing so could result in a lot more room and a lot more comfort.

Now, you may be aware that your mortgage costs might go up when you move from, say, an apartment 1,200 feet in size to a home of 3,000 square feet. And your property taxes might follow suit.

But there are a few lesser-known costs you might encounter when you’re selling an apartment and buying a house. Here are a few to keep on your radar.

1. You’ll need more furniture

There’s a strong chance a house is going to have more rooms than an apartment. And you probably don’t want those rooms sitting empty. Make sure you budget money for furniture so you’re not forced to finance it and rack up interest in the process.

Of course, you don’t necessarily have to furnish your entire home at once if money is tight. You could order your empty rooms by usage and priority and furnish them one at a time. But either way, it’s an expense you should plan for.

2. You should expect your utility bills to rise

Heating and cooling an apartment is apt to be less expensive than covering utility costs for a house. That’s something you’ll want to budget for, too.

Calculating your utility bills for your new home may be tricky. One option, though, is to try talking to property owners in the neighborhood you’re moving to so you can get a sense of their costs. The seller of the house you’re buying might also be willing to share information on average utility costs so you know what to expect.

You can also take a look at the most recent SaveOnEnergy.com® Electricity Bill Report, which will give you an overview of average utility costs by state. But the numbers you see there should really only serve as a baseline, with the understanding that your utility bills will hinge heavily on the size of your home, the efficiency of your appliances, and your personal usage.

3. Extra storage space might lead to added spending

Buying a house might leave you with a lot more storage space than you’re used to having if you’ve been living in an apartment. But the more room you have, the more stuff you might buy to fill it.

Granted, this issue is easily solvable by exercising self-control. But you may need to make a conscious effort to limit your shopping and spending once you discover the beauty of having a house full of closets.

Moving from an apartment to a house might lead to a better quality of life for you. Just be sure to fully account for the various extra costs involved.

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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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With her advice, you’ll be well on your way to success as an investor. 

Your 30s are a critical decade as an investor. If you already started investing in your 20s, then now is the time to build on that momentum and see where you can improve. And if you didn’t, then you should definitely find a quality stock broker and start ASAP to get yourself on track for retirement.

Tori Dunlap, the founder of Her First $100K, is known for her personal finance and investing advice. Since much of her audience is people in their 30s, she has shared several great pearls of wisdom for investing during this decade of your life. Here are the best tips from an investing guide she posted on her blog.

1. Use tax-advantaged retirement accounts

When you invest your money, start by investing with tax-advantaged retirement accounts. Here are a few of the most popular options:

Individual retirement accounts (IRAs): You can open this type of account with a stock broker, and then deposit money and invest it. Your contributions are tax-deductible, so they help you lower your tax bill the year you make them.Roth IRAs: These work the same way as traditional IRAs, with one key difference. Your Roth IRA contributions aren’t tax-deductible, but your withdrawals in retirement are tax-free.401(k)s: An employer-sponsored retirement plan where contributions are taken directly out of your paycheck. Like with IRAs, contributions are tax-deductible. Many employers also offer a 401(k) match, meaning they match your contributions up to a certain amount.

These all have annual contribution limits and withdrawal rules, most notably that you can’t make penalty-free withdrawals until age 59 1/2. It’s recommended that you prioritize investing through these types of accounts to save on taxes.

2. Make a consistent and sustainable investing schedule

Dunlap says that the most important part of investing is getting started, but investing consistently is a close second. To have the best results as an investor, it needs to be a long-term financial habit.

The most effective way to do this is by making an investing schedule. For example, you could invest $500 every two weeks, or $1,000 per month. Set a reminder in your calendar so you don’t forget, or you could even set up automatic investments for the frequency you want.

3. Experiment with different investments

One less common piece of advice from Dunlap is to experiment with investments. For example, you could consider splitting your money among multiple exchange-traded funds (ETFs) that cover different market sectors. Maybe you build a portfolio with one ETF following large cap stocks, one that focuses on energy companies, another in health care, and so on.

This doesn’t mean you should constantly bounce from investment to investment. It’s good to have some reliable investments you can make on a regular basis, such as an S&P 500 fund. But you could find out what works for you, and potentially boost your returns, if you’re not afraid to branch out.

4. Increase the percentage of your income you invest

Over long periods of time, every extra dollar makes a difference. By increasing the amount you invest, your portfolio will grow much faster.

If you can afford it, try increasing your investing contributions by 1% of your income. Dunlap recommends investing from 6% to 15% of your pre-tax income, but that’s not a must. If you can’t quite invest that much, do what you can. Or if you can do more, go for it.

5. Track your progress and make adjustments as needed

Every three months or so, review your portfolio to see how each investment is performing. Ask yourself if there are any new types of investments you’d like to add. And if there are investments that no longer fit your goals, consider if it’s worth selling them so you can put that money into something different.

To clarify, don’t micromanage your portfolio or make rash decisions. Just because the stock market hits a rough patch doesn’t mean you should sell everything. In fact, this is often the worst time to sell your stocks. But it’s important to do the occasional review and see if there are any improvements to make.

Many investors do very well in their 30s. Income tends to rise with age, which means you may have far more spare cash than you did in your 20s. Follow Dunlap’s tips and you could turn that money into a sizable portfolio in the years to come.

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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.
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Picking up craft supplies and party favors has helped this writer save big time. 

There’s been a dollar store in my neighborhood for as long as I can remember. But I didn’t actually start shopping there until a few years ago, when a friend suggested that I do so for things like crafting supplies.

The good thing about dollar stores is that they tend to be abundant. Consumer Reports found that about 75% of U.S. consumers live within five miles of a Dollar General, compared to about 60% of people living that close to a hospital. Not only that, but 88% of Americans shop at dollar stores at least on occasion.

I will say that shopping at dollar stores can sometimes be a frustrating experience. That’s because these stores don’t always have the widest selection of items, especially when it comes to groceries. That’s why I typically count on a combination of Costco, Aldi, ShopRite, and Trader Joe’s for food, and not my local dollar store.

But there are certain items I frequently head to my local dollar store for. In addition to crafting supplies, which my children often need for school projects, I tend to load up on things like gift bags, birthday cards, party bag fillers, and classroom handouts at my dollar store. And so far this year, that practice has saved me about $100 by my estimate.

The numbers make sense

While I do the overwhelming majority of my food shopping in person, I tend to buy most other things online. I don’t tend to have a lot of time to run to different stores between work and helping to run my household. As such, whenever I need something along the lines of crafting supplies or small items to hand out to my kids’ classmates, I tend to turn to Amazon.

But often, buying these items on Amazon will result in a larger credit card tab than buying them at the dollar store. And based on the comparison shopping I did, I’ve saved about $100 this year by purchasing the following items at my local dollar store instead of Amazon:

Crafting supplies for school projectsParty bag supplies for my daughters’ most recent birthday partyValentine’s Day non-food goodies for my daughters’ classes, along with Valentine’s Day cardsGift bags and birthday cards for the parties my kids have attended since the start of the yearPaper bags

As one example, Amazon sells 100 paper bags for about $7.50. I get a 30-pack at my dollar store for $1.25, so I can get 90 for $3.75 and 120 for $5, which is way less than Amazon’s price. And I actually stock up on paper bags in bulk once a month because I need them for a fundraiser I’m in charge of at my kids’ school.

Now, this isn’t to say that your local dollar store will always have a lower price than Amazon. And in some cases, Amazon might be the better choice, especially if you’re buying in bulk. But it’s worth checking.

It pays to see what your dollar store has in stock

As mentioned earlier, you might run into supply issues when you shop at dollar stores. So if you have very specific needs (say, there’s a particular type of party bag filler you’re looking for), then you can’t count on being able to address them at a dollar store price point. But if you’re trying to spend less and grow your savings account balance, it might be worth it to see how much of a discount your local dollar store has to offer.

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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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