Money Management

There are times when it just pays to say no. 

There’s a reason bidding wars were a mainstay of the housing market in 2021. Housing inventory was extremely limited at that point, so those who wanted to purchase a home often had to duke it out with competing buyers. And even though bidding wars were less common in 2022 as rising mortgage rates drove some buyers out of the market, they still led to more than 25% of homes selling above asking price last year, according to the National Association of Realtors.

Meanwhile, demand for homes is softer this year because borrowing rates are so expensive and property values are still high. But that doesn’t mean bidding wars are over.

That’s unfortunate, though, because they have the potential to be very stressful. Take it from a friend of mine who lost one last year.

That said, this friend learned a valuable lesson in the course of that experience. And I’m here to share it in case you wind up competing with other buyers for the same home.

It’s important to know when to pull out

My friend made an offer of $520,000 for a home with an asking price of $500,000. He thought he’d get his offer accepted, but lo and behold, another buyer entered the fray and offered up $525,000. At that point, my friend was ready to play ball. He raised his bid to $530,000, and then all the way up to $545,000 at one point during the negotiations.

But when his competing buyer came back with an offer of $560,000, my friend was done. Not only was that past the top of his price range, but he didn’t think the home was worth that much money. And also, due to higher borrowing rates, he was looking at a more expensive mortgage loan to begin with. He didn’t want to run the risk of taking on housing costs that would end up being too much for him.

Was my friend disappointed to lose the home? Yes — especially since, to this day, he’s still looking. But did he do the right thing by pulling out of that bidding war? Absolutely.

Don’t get in over your head

When you fall in love with a home (and my friend really did), it can be tempting to fight for it. But you have to know your financial limit.

My friend knew he really shouldn’t spend more than $550,000 on a home. And so he pulled out of that bidding war at just the right time.

In fact, looking back on it, my friend said he probably should’ve just pulled out of the process the moment a second bid came in, because in reality, the $520,000 he had offered initially was a fair price for the home at hand. But he was willing to go a bit above due to really liking the home and the lack of inventory in his area.

In today’s market, you might still land in a bidding war, because housing inventory still hasn’t picked back up to pre-pandemic levels. But if you’re going to engage in one, set a limit and don’t stray from it.

It’s hard to give up on a home you can see yourself being happy living in. But if you get in over your head by paying too much for it, the enjoyment you get from that home could be replaced by ongoing financial stress.

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Sam’s Instant Savings is where you’ll find the deepest discounts. 

Sam’s Club may not have the variety of items carried by Costco, but it’s known for offering better deals on the products it does carry. Discounts are even deeper when included in an Instant Savings Book (ISB). These books are available online or at any club location while sales events are active. Sales typically last three to four weeks.

We’ve taken a gander at the February deals and think that these are some of the best offers out there right now. We’ll begin with ideas for Valentine’s Day, discounted enough that you should not have to empty your savings account to make a purchase.

1. Member’s Mark Gourmet Dipped Chocolate Strawberries, 12 count: $10

In club only

Whether you’re buying them for a sweetheart or showing yourself some love, these delicious Valentine’s Day treats are available in clubs only and only from Feb. 12 through Feb. 14. If you’ve ever purchased chocolate-covered strawberries, you’ll recognize the deeply discounted price. Elsewhere, you can easily pay three or four times this amount for the sweet treat.

You’ll want to time this sale right. There’s a limited supply, and once they’re gone, they’re gone.

2. Bright Star Bouquet: $45 (regularly $50)

Online only

Ask anyone who routinely picks up bouquets, and they’ll tell you: Sam’s Club offers some of the nicest flowers around. Not only are they fresh and beautiful, but they somehow manage to last longer than most bouquets.

What’s special about the deal involves both quality and price. The Bright Star Bouquet includes an arrangement of 12 red roses, six white spider mums, six ruscus, one curly willow, and three Star of Bethlehem in a traditional vase.

$45 covers both the bouquet and delivery costs. This is another time-sensitive buy. If you want your choice of delivery dates, you should order as soon as possible.

3. Mini Heart Bundt Cake Maker & Mini Heart Waffle Maker, set of two: $20 (regularly $30)

Online or in club

Imagine a really small waffle maker with a heart-shaped heat surface. That perfectly describes the waffle maker. Now, picture a slightly deeper version of the waffle maker, minus the scoring that gives a waffle its unique texture. That’s the bundt cake maker. Both have a nonstick coating that allows for easy release and come with a recipe guide.

Each comes individually boxed, so you can give both to one lucky recipient or give them to two different people and leave a little more money in your bank account. Heck, they’re cute enough that you may want to keep one for yourself.

4. Shark Rotator Pet Pro Lift-Away Upright Vacuum: $200 (regularly $300)

Online or in club

Pro tip here: Unless your partner explicitly suggests you buy them a vacuum for Valentine’s Day, you may want to rethink the move. While this is a great cleaner for pet lovers, it’s not the most romantic gift out there.

5. Stanley Fatmax Professional Power Station with 120 PSI Air Compressor: $70 (regularly $90)

Online or in club

We’re convinced that every car should carry one of these, and right now, the price is right.

Let’s say you’re stranded on the side of a road with a dead car battery, a low tire, or both. Rather than wait around for a tow truck, this 10.6-pound gadget will jumpstart your battery and inflate the tire.

You can even use the power station to charge your phone, tablet, or USB devices.

6. Westinghouse 9,500/12,500-Watt Dual Fuel Portable Generator: $800 (regularly $1,000)

Online only

It’s February, and if you live in a part of the country where losing power means freezing your fanny off, you’ll want to pay special attention to this portable generator. This model is a dual-fuel generator, meaning it operates on gasoline or propane. It has a heavy-duty Westinghouse engine constructed of durable cast iron, and runs for up to 17.5 hours on a 6.6-gallon gas tank.

Anyone who’s ever owned a generator will appreciate the fact that it comes with a push-button electric start, meaning that just about anyone can get it up and running. Better yet, it also comes with a remote start key fob, so you don’t even have to walk out into the bitter cold to restart it.

7. Member’s Mark Hangout Pod: $100 to $130 on clearance (regularly $200)

Online only

This one is just for fun, and because it’s on clearance, you’ll need to order as soon as possible. If you’re unfamiliar with hangout pods, allow us to describe what makes them so attractive to children. First, there’s a sturdy base with dual stabilizer arms. From the top of the gently rounded base hangs a tent, secure enough to hold up to 350 pounds. It’s the perfect hideaway for an adventurous kid.

The tent is easy to set up in a playroom, outdoors, or in a child’s bedroom. In fact, it may just lure a little one into taking a nap without a fight.

The tent is available in two prints. The galaxy print is on clearance for $100, and the blue tie dye is marked down to $130 until the supply is sold.

Given the rate of inflation, we’re all looking for discounts on the things we need. Fortunately, Sam’s Club is around to fill some of those needs while saving us money.

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

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You may not want to respond immediately.  

This past winter, I was at a pharmacy buying gift cards for my children’s teachers when all of a sudden, my credit card was declined. At first, I was baffled. I knew I hadn’t come close to reaching my spending limit, so I didn’t see what the problem was.

It was then that I noticed a fraud alert that was sent to me via text. It turned out that because I was buying so many gift cards at once, those transactions eventually started to look suspicious, since it’s common for criminals to use stolen credit cards to buy gift cards and run with them.

And that’s not the only time I’ve received a fraud alert from my credit card company. I was once trying to fill up my car in another state when my credit card got declined. The reason? It looked suspicious that I was buying gas 300 miles away from home.

Credit card fraud alerts are actually a good thing. Sure, they might cause a temporary inconvenience when you have to deal with them, but ultimately, their purpose is to protect you as a consumer. Case in point: In 2021, a good 390 million people still reported fraud to the Federal Trade Commission, as per recent research from The Ascent.

But just because you’ve gotten a fraud alert from your credit card company doesn’t mean you should respond to it. There may be a safer way to go about things.

Don’t fall victim to scams

Criminals have gotten really good at finding ways to impersonate credit card companies, banks, and other financial institutions. So if you get a random fraud alert from your credit card company by text or phone, you may not want to respond. Instead, a better bet is to call the number on the back of your card and ask to speak to your credit card company’s fraud department.

It’ll be able to tell you if your fraud alert is legitimate or not. And from there, you’ll be able to tell the company if the purchase they’ve flagged is one that you made, or one that a criminal has tried to make.

A good way to avoid needless fraud alerts

It can be difficult to determine exactly what activity will trigger a fraud alert. In my case, buying 14 different gift cards at the same time did the trick. But, as mentioned, I’ve run into issues simply by putting $15 of gas into my car in a different state.

If you want to avoid the hassle of having to stop what you’re doing and deal with a fraud alert, contact your credit card company before engaging in activity that might prompt one. If you’ll be traveling, let your credit card company know to not deny transactions at supermarkets and gas stations in the state you’re headed to. And if you intend to buy a lot of gift cards at once, call your credit card company and tell them your plans. Those simple steps could save you a bit of embarrassment when you’re trying to swipe a credit card in a public place and it keeps getting declined.

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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 Treasury default is unprecedented in the nation’s history. 

An ongoing standoff between Democratic President Joe Biden and Republican House Speaker Kevin McCarthy (R-CA) could have lasting implications for the Treasury’s ability to pay our nation’s financial obligations. The clock is ticking as party leaders seek to strike a deal allowing the Treasury to continue borrowing.

What’s going on in Washington?

The ability of the Treasury to borrow has been an issue of growing importance over the past two decades. Issuing debt to investors is just one of the ways the Treasury supplements inflows from other sources, such as income taxes, and is closely tied to the ability of the Treasury to make all of its payments.

The Treasury is tasked with paying the government’s bills, including the ongoing cost of previously enacted legislation and of repaying borrowed money. Some of the biggest responsibilities of the Treasury include paying out benefits to so-called entitlement programs, including Medicare and Social Security. The Treasury is likewise responsible for paying principal and interest payments on debt borrowed in previous years.

The Constitution grants Congress the sole authority to borrow money on behalf of the federal government, meaning that any raises to the debt ceiling must be approved by both the Senate and the House. The majority-Democrat Senate is expected to vote to increase the ceiling, but the Republican majority in the House is expected to attempt to broker a deal in exchange for their approval. The exact points up for negotiation are not yet clear, but the Republican platform has largely demanded fiscal responsibility and a reduction in government spending.

The Treasury’s options

While the prospect of the Treasury running dry can be a frightening one, debt ceiling crises are not unprecedented. This year’s crisis is the third one in the past 12 years. And the U.S. Treasury has a few tricks up its sleeve when it comes to honoring obligations without additional borrowing.

Although the Treasury reached the debt ceiling on Jan. 19, it did not automatically default on its obligations. Through the use of “extraordinary measures,” the Treasury is able to satisfy payments as they become due in a variety of ways. Most commonly, those ways include dipping into certain investment funds held by the Treasury. Currently the Treasury anticipates being able to satisfy its obligations through June before those extraordinary measures are exhausted.

There is also a question about what the Treasury’s options are should the debt ceiling not be raised by June. While some House Republicans have begun drafting a proposal directing the Treasury to prioritize certain payments, such as those made on the nation’s debt, Treasury officials and economists have claimed such contingencies to be unrealistic. The Treasury may also refer back to a plan created during the 2011 debt ceiling crisis, which would call for a delay in payments.

Market effects of a default

Two ways to quantify the effect of a Treasury default are to consider 1. the cost to the United States government, and 2. the cost to American citizens. The cost to the United States government might be most notable in the cost of future borrowing. Current estimates project that Treasury debt, by virtue of being backed by the United States, can competitively offer rates 25 basis points lower than other sovereign debt.

This credibility in the market, which equates to about $60 billion of savings on interest payments annually, could be jeopardized by a Treasury default. Even the hint of a default could spook investors, as in 2011 when a drawn-out debt-ceiling fight led to the first ever downgrade of the nation’s credit rating.

A much wider-reaching and harder to estimate loss in the case of default might come about through market turmoil. A 2013 report by the Federal Reserve simulated the effects of a one-month partial default by the Treasury. The simulation predicted a 30% drop in the stock market accompanied by a 10% drop in the value of the dollar, among reduced consumer confidence. The effect this could have on the personal finances of millions of Americans is hard to quantify.

Although the Treasury is not authorized for additional borrowing, it expects to be able to fulfill its obligations until June of this year. Should the debt ceiling not be raised, the effects could be catastrophic in terms of a heightened cost of borrowing and in market shockwaves. Americans will likely learn more on Wednesday, when House Speaker Kevin McCarthy is expected to meet with President Joe Biden.

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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 new perspective can make all the difference. 

Over the years, I’ve talked to a lot of people about their personal finances. Some folks are to-the-penny budgeting fans. Some are seat-of-their-pants spenders. But one thing they all have in common? They struggle with impulse buying.

And with good reason. Companies — and their highly effective advertising teams — spend billions of dollars every year figuring out the best way to get us to buy things. They’ve literally gotten it down to a science.

But all the advertising in the world can’t stand up to the cold light of reality, when correctly applied. One of my favorite ways to shine a little reality onto a potential impulse buy? Putting a price on it — but not in dollars.

Changing your perspective

Sometimes, a difficult problem is best solved by changing how you approach it. A shift in perspective can show you a solution that you never could have seen from your previous position.

That’s what this method does. It changes the way you perceive the cost of things.

By default, we tend to think of purchases in terms of the price on the tag. A meal out costs $40. A new jacket costs $100.

But the money you hand over for an item isn’t the real cost of the item. That’s because most of us have to work for that money. So the real cost of the item isn’t the number on the price tag; it’s the number of hours you had to work to afford it.

The real cost vs. the monetary price

When you make an effort to think about the money you earn as a result of the hours you had to work, your entire view on the value of those dollars can change. Now you’re not just looking at things in terms of the money in your wallet; you’re considering the time spent away from family, friends, and hobbies.

For example, if you make $10 an hour, every $5 impulse purchase actually costs half an hour of your time. (Well, more, since you’re losing money to taxes, too.) That $60 video game? That’s a minimum of six hours of work. That’s six hours of your life you’ll never get back.

Here’s another way to look at it: Would you spend an extra six hours at work in exchange for the video game? If the answer is no, then perhaps you shouldn’t buy it with cash, either.

And the concept scales with your income. Want to splurge on a new big-screen TV? Even if you make $50 an hour, a $2,000 TV will still cost you at least a week’s worth of work. Are a few extra pixels worth a week of your life?

Next time you’re about to hit the checkout button, work out how many hours of work you’ll need to put in to cover the total purchase price. Then picture your boss handing you the items in your cart instead of a paycheck. If you wouldn’t be happy with the substitution, close the window and move on.

Time is finite; use it wisely

Your time is the most valuable resource you have. And it is finite. We don’t know how much we have, but we do know it doesn’t go on forever.

We have to use some of that time to earn the money we need for, you know, life. But the time we spend at work we don’t get back. So why waste your money — and, thus, your precious time — on purchases that aren’t worth it?

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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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