Money Management

Get ready to spend less when grocery shopping. 

Whether you have a large family to feed or it’s just you and your own appetite to manage, groceries can be a major expense in your budget. And if you’re looking to add to your savings account balance this year, then you may be motivated to shop for food as frugally as possible. That’s where stores like Aldi come in.

You may not be all that familiar with Aldi, and there may not be an Aldi in your neck of the woods. But if there is an Aldi that’s convenient for you, it pays to shop there. More so than that, it pays to shop at Aldi strategically. Here are a few ways you can stock up on groceries at Aldi without racking up too high a credit card tab in the process.

1. Try those brands you’ve never heard of

If you’ve ever shopped at Aldi before, you may have come across different brands whose names aren’t at all familiar to you. Don’t pass those items up. If you buy an off-brand product rather than a name brand, you could end up saving a bundle of money without necessarily compromising on taste or quality.

In fact, Aldi even says on its website that more than 90% of the products it carries in its stores are exclusive brands — ones most consumers have probably never heard of. This allows Aldi to provide customers with products that are high in quality without passing on the hidden costs associated with well-known brands, like advertising.

2. Keep an eye out for clearance items

Just because Aldi’s prices are low to begin with doesn’t mean you can’t score even deeper discounts. Aldi has a clearance section whose inventory can vary from day to day. But it pays to scope it out, because you might manage to check some items off of your list at a fraction of their usual cost.

3. Return your shopping cart like you’re supposed to

Many supermarket chains hire workers to collect stray shopping carts from parking lots and return them to their respective docking areas. Aldi doesn’t. The reason? It wants to save on costs so it can pass more savings along to consumers.

For this reason, you need to put down a $0.25 deposit to use a shopping cart at Aldi. You’ll get that deposit back once you return your shopping cart to its rightful place after you’ve packed your groceries into your car. And while it’s easy to argue that saving $0.25 won’t really do much to improve your financial picture, if you shop at Aldi several times a week and always make it a point to return your carts and get your quarters back, the savings could add up.

Besides, returning your shopping cart, as opposed to leaving it smack in the middle of a parking lot, is just plain the nice thing to do. It makes life easier for other shoppers and helps avoid a scenario where cars get dented by a wind-blown cart on a blustery day.

Shopping at Aldi can be a money-saving experience by itself. But if you employ these tips, you might manage to reap even more savings this year.

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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.Citigroup is an advertising partner of The Ascent, a Motley Fool company. Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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You might be able to owe less to the IRS. 

Whether you consider yourself a lower earner, an average earner, or a higher earner, when it comes to taxes, your goal is probably the same — to pay the IRS as little money as possible. With that in mind, Mark Steber, Chief Tax Information Officer at Jackson Hewitt, has these helpful tips for minimizing your tax liability — and keeping more of your hard-earned money for yourself.

1. Be organized

There are many different factors that go into calculating your tax liability, explains Steber. These include everything from your job-related earnings to your business-related deductions to the interest you earn in your savings account. That’s why it’s so important to keep your financial documents neat and organized.

In fact, Steber suggests spending about an hour each month on taxes — meaning, to spend that time organizing paperwork and thinking about ways to eke out more savings. This is an especially important thing to do if you own a small business or are self-employed.

“People often overlook deductions related to their businesses,” Steber explains. Keep good records of your spending, so a tax professional has an easier time identifying deductions you can claim.

2. Max out your retirement plan

Have access to a 401(k) at work? The more money you put into a traditional 401(k), the less income the IRS gets to tax you on. The same holds true for a traditional IRA account, which is a good option if you don’t have a 401(k) plan through your job.

Now keep in mind that if you contribute to a Roth 401(k) or IRA, you won’t get an immediate tax break on your contributions. These accounts, however, offer other tax benefits, so it’s worth discussing whether a traditional or Roth savings plan is right for you with a financial advisor or accountant.

3. Don’t be afraid to claim legitimate deductions

Some tax filers might hesitate to claim certain deductions for fear of getting audited. But Steber insists there’s no reason not to claim deductions that are legitimate.

The home office deduction, he says, has a reputation of being an audit red flag. But if you’re self-employed and qualify for that deduction, there’s no reason not to take it. And the same holds true for other legitimate deductions, like the cost of internet service if you need it to do your job.

4. Look at education benefits

Whether you’re paying for education for yourself or a family member, there are different tax breaks you may be eligible for. Steber advises anyone paying for education to look at the American Opportunity Credit and Lifetime Learning Credit to see if they’re eligible. (Hint: If you work with a tax preparer, they’ll be able to tell you.)

Meanwhile, if you’re saving for education, Steber suggests doing so in a tax-advantaged manner. That could mean funding a 529 plan, which won’t give you a federal tax break on your contributions but will give you a tax break on gains and withdrawals.

It’s natural to want to pay as little tax as possible. Make these moves and you could end up shrinking your IRS liability quite a bit.

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Make this the year you go the extra mile to safeguard your money. 

Your money is something you no doubt work hard for. So the last thing you want to do is compromise it. If your goal is to keep your money nice and safe in 2023, here are some key moves to make.

1. Keep money you need for emergencies or near-term goals in a savings account

Maybe you’ve been saving up to buy a home, and you hope to be in a position to apply for a mortgage loan within the next couple of years. Or maybe you’ve managed to build up an emergency fund with enough money to cover five months’ worth of bills.

The best place for money you expect to use in the near term, or you might need for emergencies, is a savings account. Tempting as it may be to stick that money into a brokerage account and invest it to generate a higher return, when you go that route, you risk losing money. And that’s not a position you want to put yourself in.

2. Make sure your bank is FDIC-insured

The money you keep in your savings account is guaranteed to be there for you when you want it — provided your bank is FDIC-insured and you’re not socking away more than $250,000. The good news is that most banks are FDIC-insured, but if you’re putting money into a bank you’ve never heard of, do yourself a favor and just make sure. You can use this tool to make sure your money will be protected.

3. Check your credit report every few months

Your credit report provides a snapshot of your borrowing and financial picture. And checking it could be a solid means of fraud detection.

Let’s say you access your credit report and notice a credit card you don’t remember opening. It may be a simple mistake. Or, it may be that a criminal has opened an account in your name and is racking up charges against it as you read this. Seeing that information on your credit report should prompt you to investigate either way — and potentially minimize the financial damage that might ensue.

4. Only invest in assets you understand

It’s a good idea to invest money you don’t need for emergencies or near-term goals. But you should limit your investments to assets you understand.

A lot of people jumped on the cryptocurrency investing bandwagon when digital coins started getting more press. But a lot of investors may have also, in the process, dumped money into an asset they didn’t really understand in the first place. Case in point: In late 2021, 98% of participants across the U.S., Mexico, and Brazil failed a survey given by YouGov on basic crypto concepts.

Now it’s more than possible to invest in an asset you do understand and still lose money. But if you stick to assets that make sense to you, you might minimize your risk and losses.

Your money is something you should strive to protect — no matter how much of it you have. Use these tips to keep your money and finances secure in 2023 and beyond.

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No one else is looking out for your best interests. 

A home is a major purchase, and it involves a lot of parties. While you go through the home-buying process, you’ll work with real estate agents and mortgage lenders. There’s a good chance the people you meet will seem nice and knowledgeable, so you could find yourself going to them with your questions.

Ramit Sethi recently talked to a couple who put their trust in a mortgage specialist, and he gave listeners a fantastic tip. He said “you should not trust anyone when you’re buying a house.”

That might seem over the top, especially if you feel like you have a great rapport with, say, your real estate agent. But as Sethi puts it, in his usual blunt fashion, “Every single person involved in the transaction looks at you as prey. You are their next BMW payment.” It’s important advice that some home buyers forget.

Why you can’t trust anyone when buying a house

All the people you work with on a home purchase are making money on the deal. That means what’s best for them isn’t necessarily what’s best for you.

Your real estate agent gets their commission based on the purchase price of the home. They make more if you buy a more expensive home, regardless of whether that’s a good financial decision for you. The same is true with mortgage companies. They earn more in interest and fees if you take out a bigger mortgage loan.

This is exactly what happened with the couple who came on Sethi’s podcast. They decided to buy a vacation home that they’d also rent out for passive income. When they needed advice, they went to their mortgage specialist. But after going through with the purchase, the reality didn’t match their dreams. They ended up being stretched very thin and eventually realized selling the home would be the best financial decision, even though it could cost them $100,000.

None of this means that real estate agents, mortgage specialists, or anyone else involved in a home purchase are bad people or scam artists. They’re doing their jobs, and they’re not looking to exploit you. But they have their own motivations. You need to look out for yourself, because no one else will.

Making the right home-buying decisions

Buying a home is definitely one of those things you don’t want to regret later. The way to avoid this is to do plenty of research and planning, either by yourself or with your spouse or partner, if you’re buying a home as a couple.

Where this is most important is deciding how much home you can afford. If you spend too much on a home, it makes life stressful and could affect you financially for years. The usual rule of thumb is to keep housing costs to 28% or less of your pre-tax income. If you and your spouse bring in a combined $10,000 per month, you’d aim for $2,800 or less in housing costs. Keep in mind that housing costs include not just your mortgage, but also homeowners insurance and HOA fees.

The amount you decide you can afford might be less than what a loan officer thinks. That’s why it’s smart to figure this out yourself, because if you trust someone else, they could convince you to borrow too much. After all, they’re not the ones who need to pay your bills every month.

There’s nothing wrong with asking questions and getting other people’s opinions. Just take everything you hear with a grain of salt, keep everyone else’s incentives in mind, and make the decisions that are best for you.

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Give your money the space to grow. 

Do you have an emergency fund? Sadly, many people don’t. I lived paycheck to paycheck and without significant savings for my entire adult life until pretty recently, which meant I frequently had to go into debt to address unplanned car repairs, medical bills, and other surprise expenses. It’s not a comfortable way to live, but thanks to getting my finances in order and boosting my income in 2022, I’ve been able to put aside money for emergencies. It’s much easier to sleep at night if you know you can tackle a $1,250 bill from the auto mechanic without putting it on a credit card and hoping for the best.

That said, it’s not quite enough to just have cash savings (ideally enough to cover three months’ worth of your essential costs — although some financial experts are now recommending that you keep eight to 12 months of expenses). You also need a good place to keep that money where you can easily reach it if you lose your job or have an unplanned bill you can’t cover from your regular paychecks. You might think it’s easiest to just keep the money in your checking account, but that’s not a great idea. Here’s why.

1. It’ll be too easy to spend

The money in your checking account is for exactly one purpose: to be spent! Chances are, when you sit down to pay bills, you’re entering your bank account information into an online pay system, or using your debit card. You may still use the rare check on occasion as well. Since you have so many ways to directly access the money in your checking, you will have to actively work NOT to spend your emergency fund. And believe me, if you’re just learning how to effectively manage your money, you want to make everything as easy as possible for yourself — especially saving money.

2. It complicates your recordkeeping

The phrase “balance your checkbook” may be a bit of anachronism these days, as the divide between check writers and those who use plastic or electronic payments for nearly everything comes down to age. When I do my financial recordkeeping, I am not “balancing my checkbook,” I am looking at my checking account online, and keeping track of the balance and the bills paid out of it in a spiral notebook (I’m a little old-school). You might use a spreadsheet or a budgeting app to do the same.

This way, I always know how much money should be in my checking, and I can leave myself a little cushion against overdrafting my account. If I had to constantly keep track of my emergency fund’s total in that account and have to subtract it out (to avoid spending it), it would be a hassle.

3. It won’t earn interest

With the record-breaking inflation we’ve all been living with for the last year or so, it’s been a terrible time to keep too much money in your checking. One of the small silver linings of higher inflation and the Fed raising interest rates has been the higher APYs we’ve seen on some types of deposit bank accounts. If you keep your emergency fund in one of these accounts, you’ll earn interest on it, and that will compound over time, leaving you with more money. Your checking account most likely doesn’t earn any interest at all.

Where should you keep your emergency fund?

Remember those other bank accounts we talked about above? Yes, that’s where you want to keep your emergency fund. Here’s two to consider. Both of these account types are FDIC insured, too, meaning up to $250,000 kept in one will be reimbursed if your bank fails.

A high-yield savings account

It’s likely that your first bank account ever was a savings account opened for you by a parent or adult guardian. High-yield savings accounts are a lot like that account, but with some really excellent additional features. The best high-yield savings accounts (or HYSAs) are paying 3% or more in interest these days. Many of them are offered by online-only banks that offer convenience and great mobile apps, and sometimes don’t charge any fees at all. The one possible downside to HYSAs is that they may not offer easy access to your money. See if the bank you’re considering offers a debit or ATM card with a savings account, as that would be ideal.

A money market account

Money market accounts (MMAs) are like a cross between a checking and savings account. You’ll earn interest like you would on a HYSA, and you’ll have the ability to easily access your money via a debit card, ATM card, or checks. MMAs also sometimes have a minimum balance requirement to earn the highest percentage of interest, so that could serve as an incentive to keep your emergency fund flush with cash so it’s ready when you need it.

If you’re seeking a home for your emergency fund, prioritize finding the right interest-earning account for it, separate from your checking. This way, your money is safe and can grow over time.

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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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