Money Management

When booking travel online, take proper precautions so you don’t set yourself up for failure. 

Thanks to technology, booking travel reservations online is easy to do. There’s no longer any need to hire a travel agent or wait on hold to make a reservation by phone. But it’s essential to take proper care when booking reservations. Otherwise, you could make costly mistakes and may be disappointed. Keep reading to find out what not to do when booking travel plans online.

1. Don’t make reservations with an unknown brand

Recently, my brother called me in the middle of the work day. This is unlike him, so I knew something was up. It turns out he had made an expensive airline booking through a questionable travel booking website and wanted help figuring out how to fix his mistake.

I had never heard of the company before, but its website didn’t give me hope. Luckily, we ended up being able to cancel the reservation and get his money refunded because the website allowed for cancellations to be made within 24 hours of booking. But that’s not always the case when using third-party travel booking websites — so he was lucky.

If you’re making a hotel or airline booking, ensure you’re doing so through a reputable, trusted website. You should avoid the website if you’ve never heard of it. If at all possible, it’s best to book directly with the hotel or airline. If not, use legitimate third-party booking websites.

When you use a non-reputable travel booking site, you could have trouble revising or canceling your plans. It could also be challenging to get customer service help if something goes wrong on the day of travel. If the booking website looks sketchy or the price seems too good to be true, it probably is. Keep this in mind the next time you need to make travel plans.

2. Don’t pay with a debit card

Here’s another thing that my brother did that I wouldn’t recommend: He paid for his booking with a debit card. By doing this, he put the money in his checking account in limbo while awaiting a refund. It also could have been stressful if the company hadn’t offered him a refund.

Using a credit card is your best bet when you book travel online. You won’t put your cash at risk, and if something goes wrong, you’ll be better protected with a credit card. Plus, you can earn valuable rewards if you book using travel rewards credit cards. I only use credit cards when making travel reservations and suggest that others do the same.

3. Don’t skip reviewing the booking terms

Another bad move is not reviewing the booking terms. You want to make sure you know if you’ll be able to make changes or if you can cancel without penalty. Some bookings may be refundable up to a specific time before your travel date, but not all are.

Not reviewing these important details before booking could have consequences. If your plans change and you need to cancel your flight but have a non-refundable ticket, you may be ineligible for a refund or credit. That would be an expensive mistake to make and it could mean that you don’t have enough money left in your vacation budget to afford a trip.

Set yourself up for success when booking online travel

Booking online travel reservations can be a good move. Just make sure you use a reputable website, pay with a credit card instead of a debit card, and review the booking terms before making a reservation. It’s also a good idea to review all booking details to avoid errors.

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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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Cities appear better able to target residents most in need of assistance. 

According to the U.S. Census Bureau, nearly 12% of Americans live in poverty. In most corners of society, these 38 million people are practically invisible. For them, stimulus checks from the federal government meant the difference between missing meals and putting food on the table. It allowed them to buy new shoes for their children, visit a doctor, or pick up much-needed prescriptions.

Most Americans received three stimulus checks between April 2020 and March 2021. While some may not have needed the extra funds to get by, we know that at least 38 million did. When direct stimulus payments dried up and the expanded Child Tax Credit expired, these people felt it most keenly. Unlike some, they used the money to pay for everyday necessities rather than tucking it away in a savings account.

Considering that more than 1 in 10 Americans barely scrape by, it makes sense that more cities have stepped into the gap to provide assistance in the way of guaranteed income.

What is guaranteed income?

Shriver Center on Poverty Law describes guaranteed income as a program that quickly provides assistance to families in need with little bureaucracy to slow the system down. Guaranteed income fills the gaps left by existing social safety net programs. Payments are made monthly, with no strings attached. Families are trusted to determine their own needs and where the money should go.

Typically, participants in the program are sent a specific amount of money for a set period of time. For example, in Alexandria, Virginia, 170 households are set to receive $500 a month for the next two years.

A growing number of cities across the country have implemented pilot guaranteed income programs. The hope is to help those who critically need assistance.

It’s tough out there

If the notion of giving people money hits you the wrong way, consider this: 20 state legislatures refuse to raise the minimum wage above $7.25 an hour. Let’s say a parent with a young child lives in Tennessee and works 40 hours per week. They earn minimum wage and have a gross weekly income of $290. After taxes, they bring home around $250 per week.

The average cost of daycare in Tennessee is $8,732 annually or $167 per week. Unless a parent earning minimum wage can find less expensive childcare — which may or may not be safe — that full-time worker is left with $83 per week to cover other expenses.

These are the types of households guaranteed income programs are designed to assist.

The beginning of a trend?

More than 48 cities have implemented guaranteed income programs since 2020, reports the New York Times. Here’s a sampling of cities testing guaranteed income programs:

Los Angeles, CaliforniaOakland, CaliforniaAtlanta, GeorgiaChicago, IllinoisLouisville, KentuckyNew Orleans, LouisianaChelsea, MassachusettsMinneapolis, MinnesotaJackson, MississippiNew York, New YorkDurham, North CarolinaPhiladelphia, PennsylvaniaColumbia, South Carolina

What’s the point?

The Jain Family Institute, a nonprofit research organization, says that cash transfers increase human capital investment, food security, and durable good consumption.

Guaranteed income is a tightly targeted version of the stimulus programs we’ve come to know. As more cities sign on we’ll have a better idea of how much such programs help both families and communities.

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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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These chickens are an amazing deal. 

If you shop at Costco, you may have noticed how affordable the rotisserie chickens are. This item is a cost-effective way to prepare an easy meal, whether you’re planning to shred the chicken and use it for soup, make chicken pot pies, or whip up a quick chicken salad. But have you ever wondered why Costco sells its rotisserie chickens for such a low price? Keep reading to find out why this is still one of Costco’s best deals.

Cheap buys get customers in the door

You probably know someone who raves about the prices of Costco’s rotisserie chicken — and for a good reason. It’s a steal. Each chicken sold at the store is around three pounds or slightly over, so while you’re paying $4.99 for the entire chicken, the per-pound price works out to be $1.66. It’s no wonder why so many shoppers stop here for this budget-friendly buy.

But why does Costco price this food item so low? Well, Costco wants to entice more people to become members and get more customers in the door. Selling rotisserie chickens at such a low price is a great way to attract more customers. It’s a winning strategy for Costco.

You’re probably going to buy more than chicken

Rotisserie chickens are a good bargain, especially for busy families looking for a convenient meal solution that doesn’t break the bank. Costco gets you in the door with this deal, but another reason the warehouse club prices its rotisserie chicken so low is they know that you’re unlikely to walk off with only a chicken in your cart — even if you try really hard not to spend more money.

Costco is confident that most customers will buy other products while in the store. The retailer even goes as far as to keep its rotisserie chickens in the back of the store, so customers have to pass by other products. Once customers see other available deals and buy more than planned, Costco makes more money.

Four tips to avoid overspending at Costco

So, you recently invested in a Costco membership but want to avoid buying unnecessary items? It can be easy to overspend if you’re not cautious, but there are techniques that you can follow to keep your spending in check. Here are some tips.

Make a list: Don’t walk in the door without bringing a shopping list. This strategy may help you keep your spending on track as you pass by enticing deals that you don’t need.Use the retailer’s mobile app to check prices: Before you head to your local club, take a few moments to check prices in the Costco mobile app. You can use the prices shown to plan your shopping list and ensure you don’t break your budget before getting to the checkout line.Figure out which items are a deal: Not everything you see at Costco is sold at a bargain price. While items like the rotisserie chickens are a good buy, other items may be priced similarly to traditional retailer prices. Learn what to get at Costco and what items to buy elsewhere to avoid falling for a bad deal.Pay with cash: Using cash is another way to keep your spending in check while at Costco. For some shoppers, paying with cash instead of a credit card is a guaranteed way to avoid overspending — especially if they only keep so much cash in their wallet.

Go ahead and buy that rotisserie chicken at Costco. But don’t neglect your personal finance goals in the process. Going in with a plan may help you spend less as you fill your cart with groceries and other essential items. As you develop new shopping habits, it may be easier to make spending decisions that don’t negatively impact your checking account balance.

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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.Natasha Gabrielle 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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I’d rather have my groceries delivered. 

It’s that time of year again. As the New Year has come and gone, millions of Americans open their dusty budgeting apps and take a fraught glance at their annual expenditures. Holiday spending, car insurance fees, how much they spent on dining out — all exposed.

Thanks to research from The Ascent, we know how much the average American spends on groceries per month — $438. But how much does it cost them to drive to the grocery store?

Let’s assume the following:

The average shopper gets groceries 1.6 times per week, per Statista.The average shopper drives four miles to their favorite grocery store, per the USDA)The average gas price as of this writing is $3.329 per gallon, per AAA.The vehicle gets a respectable 30 miles per gallon of gas.

Based on these assumptions, it costs $0.33 to drive to the grocery store. In 2022, the average shopper spent more than $83.20 on driving to the grocery store round-trip. This calculation only factors in travel costs for drivers who own gas-powered vehicles.

That’s less than I expected, but actually shopping for groceries costs more in time. According to the Time Use Institute, the average person spends 41 minutes in the grocery store per shopping trip.

Thankfully, there is an alternative to brick-and-mortar shopping that can save buyers time and money.

Online grocery shopping

Online shopping isn’t cheap — grocery delivery services like Instacart and GoPuff charge plenty of fees. For example, an Instacart membership costs shoppers $99 per year for free delivery. Shoppers still pay for tips and reduced service fees.

However, by ordering online, you pay zero gas fees. And you can transform time spent grocery shopping into time spent earning income. That’s a good trade-off.

For example, if you subtract the annual driving fees ($83) from the cost of an annual Instacart membership ($99), you’re left with only $15 in membership fees. Folks who make $20 an hour can earn that money back in the time it takes to make a single 45-minute grocery run.

Consider giving Instacart a try and judge its usefulness for yourself. There’s a free 14-day trial for folks who are interested. Tip: Order at least $35 worth of groceries per trip.

How to save money grocery shopping

You don’t need to shop online to save — there are other ways:

Do your research. Check out five ways to save on groceries in 2023.Use an appropriate credit card at checkout. The best grocery credit cards can earn shoppers up to 6% cash back on purchases.

And these three tips are my personal favorites:

Buy in bulk at Costco.Shop with a housemate to save on gas or delivery.Set a budget using an app. Add up how much you spend on grocery shopping and dining out — it might convince you to eat out less!

Consider how you might lower the cost of grocery shopping in 2023. You could save time and money over the next 12 months. That’s not a bad way to wrap up the holiday season and start off a fresh year.

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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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Don’t take out a car loan without reading this. 

If you can’t buy a car with cash, chances are good you’re going to end up taking out a loan to purchase one. But if you need to borrow to buy a car, you don’t want to take a loan with a long repayment timeline. In fact, when it comes to this type of debt, the shorter the loan payoff, the better.

Here are a few key reasons why a long car loan is bad news.

1. You could end up owing more than your car is worth

Cars are typically not assets that go up in value. The minute you drive your vehicle off of the car lot, the value of the car declines.

If you take out a long car loan, you won’t pay down much of the balance with each payment. If your car loses value more quickly than your principal balance declines, you could easily end up with a car that’s worth less than your outstanding debt. This is especially true if you made a small down payment.

Being underwater on your car loan could be a huge problem. You won’t be able to sell the vehicle without coming up with the difference between the price you get and the amount you still owe. If your car is totaled in an accident, you also wouldn’t have enough money to pay off your loan balance (unless you had gap insurance and your insurer covered the difference).

If you take a shorter term loan, though, you reduce the chances of this happening because your balance declines much faster.

2. You could pay a fortune in interest

The longer the term on your car loan, the longer the period of time when you will be stuck paying interest. Interest makes your car a lot more expensive in the long run since this is just extra money you send your creditors.

Car loans that have longer payoff times also tend to have higher interest rates than those with shorter payoff periods. So not only will you pay more because you get stuck with interest for longer but you’ll also owe higher financing charges due to the higher rate.

3. You could be stuck with a car loan forever

Most people don’t keep their cars for a very long time (although they probably should). If you take out a long car loan, then by the time the loan is paid off, you may be ready to go trade in the vehicle. This could mean immediately taking out a new car loan again.

If you keep doing this, you’ll live your whole life with a car loan and never get to use the money you’re sending to creditors for other things. With a loan that has a short payoff time, on the other hand, you may be able to pay it off and still keep your car for years to come. You can redirect the money you were paying on your loan to saving to pay cash for your next car or to other important financial goals.

For these three reasons, you should absolutely steer clear of a car loan with a lengthy timeline for repayment, and instead opt for the shortest loan term you can possibly afford.

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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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It may be tempting, but right now, it’s better to hold off. 

There’s a reason buyers have been struggling to purchase homes over the past couple of years. Home prices have been elevated since the latter part of 2020. And while home price gains have slowed down this year since peaking in June, sellers are still looking at commanding higher-than-usual prices for the properties they list. When you throw higher mortgage rates into the mix, it’s easy to see why affordability could be an issue for so many buyers.

If you’re interested in buying a home despite today’s challenging market conditions, it will likely take more money than usual — especially if your goal is to make a 20% down payment on a home. But doing so is a good idea.

Not only will making a 20% down payment help you start off with more equity in your home, but it will also help you avoid private mortgage insurance (PMI). PMI might sound like it’s a good thing, but it’s actually meant to protect your mortgage lender, not you. And it can make your ongoing housing costs more expensive.

Now, you may only have so much money sitting around in your savings account to put toward a home down payment. But if you have investments you can liquidate, those could help you scrounge up more down payment funds.

In fact, if you own I bonds, you may be considering a redemption to come up with money for your down payment. Right now, selling stocks may be a less appealing option due to the broad market being down and the likelihood of you taking a loss. But if you own I bonds, that’s less of a concern since they’re government-backed, so you don’t have to worry about them losing face value.

But is cashing out I bonds to buy a home a good idea? Here’s why it probably isn’t.

You’ll be hit with penalties

Once you purchase I bonds, you’re required to hold them for a full year. From there, you can cash them out, but if you do so before holding them for five years, you’ll be penalized. Specifically, you’ll lose your last three months of interest.

That may not be a catastrophic sum in the grand scheme of your life. But still, the whole point of investing in I bonds these days is to enjoy a generous amount of interest. So you probably don’t want to give some of that interest up.

You’ll lose the chance to keep earning a higher return on a safe investment

It’s possible to build a portfolio of stocks and generate a return of 8%, 10%, or more. But in doing so, you’re taking on a fair amount of risk.

I bonds aren’t very risky in terms of face value since they’re government-backed. In other words, $10,000 of I bonds will be worth $10,000 even if the stock market tanks. But right now, I bonds are paying 6.89% interest though April 2023. That’s a high rate, and comparable to what you might get with stocks — only without the risk. And so you probably don’t want to pass up the chance to score such a great rate on such a stable investment.

What’s the right call?

Cashing out I bonds for a home purchase might seem tempting. But there are drawbacks to going this route. Consider those carefully before redeeming your I bonds, especially if you haven’t yet held them for five years.

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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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