Money Management

Lower interest rates aren’t the best news for savers. But read on to see why things may not be as bad as expected. [[{“value”:”

When the Federal Reserve lowered its benchmark interest rate by half a percentage point on Sept. 18, I wasn’t particularly surprised. Since I keep tabs on inflation data (it’s my job, after all), I knew that the central bank was ready to make its first interest cut of the year. And I wasn’t shocked that the Fed went big, lowering that rate by half a percentage point when it could’ve opted for a quarter point cut instead.

Meanwhile, it’s been five days since the Fed’s decision, and earlier today, I logged into my savings account expecting to find that my APY had dropped. Unlike CDs, where the rate you get is set in stone for a preset period, savings account rates can fluctuate based on market conditions.

But lo and behold — as of this writing, my savings account’s APY has not changed one bit. I was getting a 4.25% APY before the Fed’s rate cut, and that’s what I’m still getting. And while I expect that APY to drop over time, the fact that it’s held steady is a good thing.

There’s no need to panic

A lot of people are worried that the Fed’s rate cuts (because yes, there’s likely to be more than one) will negatively affect the interest rates on their savings. In time, that may happen. But you should know that savings account and CD rates don’t necessarily drop the second the Fed cuts rates.

Why is this important? If you’re worried the APY on your savings account will drop at any minute, you might feel rushed into making a money-related decision. And that could lead to the wrong decision.

A friend of mine, in fact, heard about last week’s rate cut and immediately called to ask if she should transfer money out of her savings account and into a CD. In the end, we came to the conclusion together that she was better off leaving her money alone because she wasn’t sure if it was a good idea to commit to a CD given some upcoming expenses on her horizon.

Similarly, you shouldn’t rush to move money out of your savings account, either. In time, the APY on your savings account might fall. But we’re a long way off from a truly notable drop.

Put another way, if you were getting a 4.25% APY on your savings before the Fed’s rate cut and your APY hasn’t changed, eventually, it may drop quite a bit as the Fed continues to reverse the rate hikes it implemented in 2022 and 2023. But you’re not going to go from a 4.25% APY to a 2.25% APY overnight, or even by the end of the year. You’re better off taking your time to decide where you money should go.

Make sure your savings account isn’t overfunded

While you certainly don’t want to make rash decisions for your savings right now, you should also make sure you don’t have too much cash parked in a savings account. Because interest rates are expected to continue falling, it may be a good idea to move money into a brokerage account or CD, depending on your personal situation.

What you really want to do is make sure you have enough money in savings for emergency fund purposes. That means having enough cash to cover three to six months of essential bills. But if you have money beyond what you need for emergencies, you have options.

Investing is a good bet if you don’t expect to need or use your extra money for about 10 years or more. The returns you get in a brokerage account could far exceed what CDs pay you over time.

But if you’re looking at a shorter time line — say, 12 to 24 months — then a CD is a better bet. One to two years is not enough time to ride out a stock market decline, so it’s not safe to invest over that short a time period.

All told, the Fed’s initial rate cut isn’t all doom and gloom for savers. And while you need to brace for future rate cuts, you can plan for them by assessing your savings now and making sound decisions when you’re not under pressure.

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Checking accounts are best for transactions, not savings. Find out if keeping $5,000 in your checking account is stopping you from becoming wealthier. [[{“value”:”

Checking accounts serve one big purpose: To mediate between your source of income (aka, your paycheck) and other financial destinations, like paying bills, making purchases, or contributing to your savings. They’re not great places to store long-term savings, especially money earmarked for retirement, as they don’t have competitive interest rates or tax benefits.

That said, it’s OK to leave some money in your checking account, even if you don’t have an immediate plan for it. For example, you might want to leave a months’ worth of expenses in your checking account as a rainy day fund.

But what about $5,000? Is $5,000 too much to leave in your checking account? Let’s take a look.

When it’s OK to leave $5,000 in your checking account

First off, it’s important to reemphasize that checking accounts are transactional. They exist so you can draw money against your balance. This separates them from savings accounts and retirement accounts, which are better suited for long-term savings, because they offer better returns and sometimes tax benefits.

But you might leave $5,000 in your checking account for a couple reasons. The first is that the money is a part of your emergency fund. If $5,000 covers one to two months’ worth of expenses, then it could be wise to keep it in an account that’s easy to withdraw from. Since many checking accounts come with debit cards and checks, they could increase accessibility in a time when you need money fast.

Likewise, you might be keeping this money for a large purchase. If you don’t use credit cards or prefer debit cards, then keeping $5,000 could prepare you for the expense. If so, that’s totally fine. Again, checking accounts work best for short-term purposes. A big purchase, as a short-term purpose, would warrant keeping money in your checking account, especially to avoid overdraft fees.

Keeping $5,000 in your checking account could lead to missed opportunities

It’s OK to leave some money in your checking account to cover your bases. However, if you have an emergency fund of three to six months’ worth of expenses, and you’re also keeping $5,000 in a separate checking account, then you might be missing out on better opportunities, like in the stock market.

Again, checking accounts are transactional. They won’t grow your $5,000 over long periods. That money could even lose value due to inflation, especially if your checking account doesn’t earn any interest.

If you’ve covered your bases and have $5,000 left over, you might want to capture high interest rates while you still have a chance. For instance, the best CDs let you lock in an interest rate and have better returns than checking accounts.

Putting $5,000 in a 5-year CD with a 4.00% APY would yield more than $1,000 at the end of its term. It won’t make you rich, but it’s a lot better than earning next to nothing on a paltry interest rate like 0.01%.

All in all, if you’re storing cash in a checking account for long-term purposes, it might be wise to move it. At the very least, you could open a high-yield savings account. That way, you can still access your money when you need it but earn some interest on it before you do.

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Costco raised its membership fees. Find out where you can shop wholesale instead without breaking the bank. [[{“value”:”

It finally happened. Costco hiked its membership fee for the first time since 2017, and honestly? It’s hitting harder than an oversized frozen lasagna. The annual fee for basic members jumped from $60 to $65 annually, and the Executive membership? That’s now $130, up from $120.

Sure, the Executive membership reward cap increased to $1,250 from $1,000, but for those of us just trying to get through the week without breaking the bank, this 8.3% increase feels like a lot.

With 52 million memberships affected, I’m not the only one feeling the pinch. So, where do you turn when Costco’s price hike leaves you questioning your loyalty? Don’t worry — I’ve researched, and there are plenty of solid wholesale alternatives that won’t make your wallet cry.

1. Sam’s Club

Sam’s Club’s last fee hike happened in 2022, and Sam’s Club remains a more affordable Costco alternative — $50 for a basic membership and $110 for a Plus membership.

Not only is that cheaper than Costco, but Sam’s has been making moves to keep shoppers happy, like offering the handy Scan & Go feature, which lets you shop without standing in a checkout line. It’s as close to magic as grocery shopping gets.

You can find all the familiar bulk buys here — massive packs of toilet paper, giant tubs of laundry detergent, and enough chicken breasts to feed a small army. But what really sets Sam’s apart are the unexpected tech deals — I recently snagged a discounted smart TV. Plus, it has an excellent bakery (hello, croissants) and even more brands to choose from.

2. BJ’s Wholesale Club

BJ’s has long been the underdog of the bulk-buying world, but don’t underestimate it. At $55 a year for a basic membership, it undercuts Costco, and unlike Costco, BJ’s accepts coupons. You can stack savings, and I’m not mad about it.

BJ’s offers slightly smaller bulk packages. This option is great if you’re tight on space but still love a deal. You’ll find plenty of name-brand products, and if you’re into organic items, BJ’s has you covered. It’s even partnered with Instacart for home delivery, making life easier when you don’t have time to lug around 20-pound bags of rice.

Also, BJ’s has gas perks! If you’re driving to pick up your bulk buys, you can get some sweet discounts at the pump.

3. Amazon

With an Amazon Prime membership ($139 per year), you’re getting fast shipping and access to Amazon’s own bulk section, Amazon Business, and Subscribe & Save options that rival wholesale pricing. And let’s not forget that you can shop from your couch in pajamas — no warehouse runs necessary.

Everything from pantry staples like granola bars and bottled water to cleaning supplies and diapers can be delivered right to your doorstep, often at prices that compete with the big wholesale clubs. And with Subscribe & Save, you can set up recurring deliveries for items you use regularly while saving up to 15%.

Plus, Amazon Business offers even deeper bulk discounts if you’re a small business or just someone who likes to buy in industrial quantities. No judgment.

4. Walmart+ and Target Circle

Walmart+ costs $98 a year, which may seem high, but you get free delivery, fuel savings, and access to discounts. Plus, Walmart has slowly started dipping its toes into the bulk-buying world, so you can still grab a giant bottle of ketchup or a bulk pack of snacks when the mood strikes.

On the flip side, Target Circle is completely free and offers regular deals on everything from cleaning supplies to snacks. While it’s not a bulk store, you might not need 36 rolls of paper towels at once if you’re shopping for a smaller household. Target Circle lets you rack up rewards while still sticking to your budget.

There’s also Target Circle 360, the newest paid membership for $99 per year. As a member, you’ll enjoy unlimited Same Day Delivery to multiple addresses, extended return windows with an extra 30 days, and access to the Shipt Marketplace, where you can shop from dozens of retailers. Plus, get free two-day shipping on hundreds of thousands of items.

Between these two, I’ve been stocking up on household essentials, like laundry detergent and cleaning supplies. I also can’t resist Target’s trendy home goods and snack offerings.

5. Aldi

Aldi offers some bulk items, especially pantry staples like pasta and canned goods, and there’s no membership fee in sight. It’s perfect for people who want to save without going full “buy everything in bulk.”

The bonus? Aldi’s famous “Aldi Finds” section rotates out seasonal and limited-time goodies you never knew you needed. And let’s be real — sometimes it’s nice to leave the store with a pineapple-shaped cutting board, not a 10-pound bag of pretzels.

Aldi excels at keeping things simple. The streamlined store layout means you’re not overwhelmed by choices, and the prices are rock bottom. It’s a great place to stock up on basics when you don’t want to commit to a wholesale club membership.

I’ll always have a soft spot for Costco, but with the latest membership fee increase, it’s time for me to explore other options. Between Sam’s Club’s affordability, BJ’s coupon perks, Amazon’s convenience, and the no-fee charm of Target Circle and Aldi, there’s no shortage of alternatives for wholesale shopping.

Will I miss Costco’s free samples and mega-sized muffins? Maybe. But until that membership fee drops again (which, let’s be real, won’t happen), I’m perfectly happy exploring new aisles and charging my credit card elsewhere.

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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.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool has positions in and recommends Amazon, Costco Wholesale, Target, and Walmart. The Motley Fool has a disclosure policy.

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A project manager is a vital part of your staff. Read on to learn how to hire a great one using these pointers from an expert. [[{“value”:”

After the Great Recession yanked my real estate career out from under me, I went back to school to finish the degree I had started before I fell backward into that world — and subsequently, I ended up working my way into a job as a project manager for a small copywriting firm based in San Diego, California.

I had never done this kind of job before, but I had worked in both journalism and construction management, and I used a lot of those skills to develop into the project manager I would become.

When you’re trying to find a project manager, it’s hard to know what to look for unless you’ve been there yourself — and this is why I’m here to give you my top tips for hiring your next PM.

Find someone who is capable of confrontation

Not going to lie, this was the worst part of the job for me at first. I was very bad at confronting people, even when I was entirely in the right. It was a skill I had to develop, because project management is 90% chasing people around and finding out why they’re not doing whatever they were supposed to do.

When people are communicating well and meeting their deadlines, you don’t really need a project manager, but when there are consistent issues, the PM needs to be capable of confronting people in a non-destructive way.

Look for someone with solid organizational skills

Those organizational skills are applied in different ways. For example, at my PM job, we used a lot of content management systems, and part of my job was to figure out which ones were best for organizing what we were doing. I knew the ins and outs of our software, how and when to use it, and how to ensure that important information was accessible to everyone, all the time.

If you’re hiring a PM, take a look at how they present themselves and how they organize their own lives. Can they find what they need? Can you ask them for a random item and have it appear? Your goal is to find someone who can do the job consistently, not one who does it any particular way, so be open to different ways of organizing.

Choose someone who cares about time

A good project manager is also a keeper of time. They juggle project assignments, including managing individual pieces of the project, so everything happens on schedule. They’re the ones who give you a realistic timeline as to when a project can be delivered.

Sometimes they won’t tell you what you want to hear, but they should always have a solid sense of how long it takes to accomplish a task, start to finish, and how long each of the components should take to come together. This is why hiring a PM who is also an industry expert is so important, even if they cost a little bit more.

Hire the one who will get to know your team

Being a project manager is part knowing the tasks that need to be completed, and part knowing the team that they’re working with. If they won’t or can’t get to know your players, how can they be expected to know who to assign which tasks to, or how much work each person can reasonably handle?

A PM who treats people as individuals is more likely to get your product or service across the finish line, because they’re not going to be overloading people with work they can’t possibly accomplish on time. This just creates bottlenecks where they don’t need to exist. Just by knowing and understanding your team, your PM can help you be more successful and improve your reputation for consistency.

Above all else, choose a PM who is a partner

Many people make the mistake of hiring project managers and expecting them to be overqualified secretaries, and my friend, that is not the job. A PM has as much stake in the success of your project as you do, and they also have the added burden of having to be an enforcer and cheerleader at the same time.

So, for your own sake, and the sake of your team and business bank account, choose a project manager that you can see as a partner in your small business, not someone you expect to take orders from you without question.

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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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The Fed just made its first interest rate cut of 2024. Read on to see why the central bank still has work to do. [[{“value”:”

It was the announcement consumers and economists alike had been waiting for. On Sept. 18, the Federal Reserve made the decision to lower its benchmark interest rate by half a percentage point, marking its first cut in 2024, following a series of rate hikes in 2022 and 2023.

The Fed raised interest rates during that two-year period because it needed to slow the pace of inflation down. Consumers’ budgets were buckling under the weight of higher grocery costs, gas prices, and utility bills. And even though many Americans had stimulus funds to tap in 2022, as the year wore on, a lot of that money got eaten up by sky-high costs. So the Fed basically had no choice but to intervene.

But now that inflation has been cooling, the Fed doesn’t need to keep its benchmark interest rate so elevated — hence its recent decision. And you should know that September’s rate hike is likely only the first of many on the part of the Fed. That has the potential to impact your finances for better and for worse.

The Fed needs to reverse course

The Fed puts a lot of thought into its interest rate policies. The central bank’s goal is to achieve a target of 2% inflation over the long run. It’s this level, the Fed feels, that’s most likely to lead to economic stability over time.

In August, annual inflation was measured at 2.5% according to that month’s Consumer Price Index, which measures changes in the cost of consumer goods and services. Since 2.5% isn’t so far off from the Fed’s 2% target, the central bank opted for a larger rate cut in September than a smaller one.

The Fed could’ve lowered its benchmark interest rate by a quarter of a percentage point. But it went with half a point for more impact.

However, since the Fed raised the federal funds rate 11 times, it will no doubt seek to cut that rate numerous times to get back to where it was before those hikes took place. For this reason, consumers should expect a series of cuts that extend well into 2025.

What the Fed’s rate cuts mean for you

It can be argued that the Fed’s rate cuts are both positive and negative for consumers. On the plus side, as interest rates fall, borrowing should get less expensive.

Come 2025, you may find that it’s cheaper to sign a mortgage or put an auto or personal loan in place. You may also find that your credit card balance costs you less in interest.

On the other hand, lower interest rates are bad for savers. You may notice that your savings account APY starts falling consistently as the Fed moves forward with rate cuts. And you can kiss the 5% CD rates savers have been enjoying goodbye.

Either way, it’s important to pay attention to the moves the Fed makes, because they could impact your wallet. And you should also decide what moves you should make in light of the Fed’s expected actions.

If you have money in the bank right now, for example, you may want to move some out of a savings account and into a CD so you can lock in a great APY before rates continue falling.

Or, you may decide to gear up to buy a car in 2025 given that auto loans are expected to get cheaper. And if that’s on your radar, you may want to leave more money in savings rather than tie it up in a CD.

All told, the Fed’s September rate cut is likely to be the first of many. Keep tabs on future rate cuts so you can act accordingly.

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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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