Money Management

Looking to save big at Costco? Read on to see how. [[{“value”:”

The average American’s credit card balance is $6,501, says Experian. Given the way living costs have risen dramatically over the past few years, that’s not very shocking.

But if you’re not in the best shape financially, then it pays to do what you can to save money on purchases like groceries and household essentials. And even if you don’t have credit card debt, it still pays to keep these costs as low as possible so you have room in your budget for other expenses and savings.

Shopping at Costco strategically could be your ticket to doing just that. Here’s how to save yourself a nice chunk of money.

1. Get your shopping done early

Shopping at Costco could be a stressful experience. The store tends to be crowded even when you think you’re shopping at off-peak times, and the selection can be overwhelming.

That’s why hitting the store early could be a good bet. If you arrive right when the store opens, you might face fewer crowds. That could make it possible to evaluate your purchases more calmly and make smarter decisions.

Also, if you arrive at Costco early enough, you might get there before the free samples start popping up. Those samples might be fun to try, but they can also lead to impulse buys that hurt your budget. Avoiding them entirely could mean leaving Costco with a smaller grocery bill.

2. Stick to the Kirkland brand as much as possible

Kirkland is Costco’s signature brand. You’ll find the Kirkland label on a host of products at Costco, from groceries to cleaning supplies to apparel. It pays to load up on Kirkland items for the savings involved.

Costco says it intentionally prices its Kirkland line to offer at least 20% savings compared to brand-name alternatives. So if you’d normally spend $100 on groceries and household products at Costco per week, switching to Kirkland could mean spending $80 or less. Do that every week, and you’re looking at pocketing a lot of extra money during a year.

3. Fill up your tank while doing your grocery shopping

Costco’s fuel stations usually offer some of the cheapest gas in town. But it’s not just that you’ll pay less money per gallon. You might also get better performance out of your car.

Costco gas carries the TOP TIER designation, which means it’s designed to clean your engine and enhance your car’s performance. So you may find that a tank of Costco gas lasts longer than gas from a different fuel station nearby. It pays to try to do your Costco shopping when your tank is getting low so you can accomplish two errands during the same trip.

It’s gotten frustratingly expensive to function as an adult. This is something a lot of people complain about regularly, and understandably so. But you can do your part to save money by shopping at Costco strategically.

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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.Maurie Backman 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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You need to pay a yearly membership fee to shop at Sam’s Club. Discover a few easy ways to bring your membership costs down to $0. [[{“value”:”

An annual Sam’s Club membership is fairly affordable. The standard price is $50 for a Club membership and $110 for a Plus membership. That’s not too hard on your savings account, and it’s less than what you’d pay to shop at Costco.

If you’re planning to sign up, there’s also a great special offer available. Through Sept. 27, 2024, a Club membership costs just $15 for the first year, and a Plus membership costs $50.

The only thing better than a huge discount is getting your membership for free. Sam’s Club generally doesn’t offer completely free memberships, unless you work there. Here are a few ways to make back what you pay for a membership.

1. Refer your friends and family

Know anyone else who’d like to shop at Sam’s Club? Have them sign up using your unique referral link, and you’ll get $10 Sam’s Cash for each referral. You can refer up to five people, so the maximum amount is $50 Sam’s Cash. That’s enough to pay for a Club membership at the standard rate or a Plus membership at the current discounted rate.

Sam’s Cash is redeemable in clubs or online. You can also use it to pay your membership fee. It never expires, and you can even cash it out at Member Services or at any register with an associate.

2. Open a Sam’s Club credit card

Like many stores, Sam’s Club offers its own store credit cards. The Sam’s Club Credit Card can be used only at Sam’s Club, while the Sam’s Club® Mastercard® can be used anywhere Mastercard is accepted.

Between Sept. 10 and 30, 2024, Sam’s Club is offering a $50 statement credit. To earn it, you need to open a new credit card account and make $50 in Sam’s Club purchases within 30 days.

Pro tip: If you have a good credit score, check out the best cash back cards before applying for a card with Sam’s Club. You could find a card that has more to offer. For example, several cash back cards have sign-up bonuses of $200 or more, instead of the $50 you can earn with a Sam’s Club credit card.

3. Stack up special offers

Sam’s Club regularly runs special offers and bonuses, giving you the opportunity to earn Sam’s Cash. With a few of these, you could earn enough to cover the cost of your membership, especially at the discounted membership rate right now.

Here are some of the offers that are currently available:

Get $10 Sam’s Cash when you order online. This offer is available for your first qualifying online purchase with Curbside Pickup, Delivery from Club, Express Delivery, or shipped home. It’s valid between Sept. 10 and 30, 2024.Get $20 Sam’s Cash for upgrading to Plus. You must upgrade to a Plus membership and make a purchase of at least $40 between Sept. 10 and 30, 2024.Get 30% back in Sam’s Cash when you subscribe to Peacock. It’s an online-only offer, and you can use it with a monthly or annual subscription. This offer ends Nov. 1, 2024.

With all the ways to earn Sam’s Cash, it’s not too difficult to knock down the cost of your Sam’s Club membership. You may not be able to get it for free every year, but you could get it for less.

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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.Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and Mastercard. The Motley Fool recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.

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You may be tempted to swap your current mortgage for a new one. But read on to see why you might want to wait. [[{“value”:”

Homeowners who locked into mortgages prior to 2020 and didn’t refinance since may be sitting on decent interest rates. And homeowners who refinanced in 2020 or 2021, when mortgage rates plunged to record lows, are no doubt enjoying the ultra-competitive rates they locked in.

But in 2022, mortgage rates started rising at a pretty quick pace. And they’ve been elevated for the past couple of years, making homeownership less affordable for those who bought in 2023 and 2024.

If you signed your mortgage in the past couple of years, you may be itching to refinance to a lower rate. And that opportunity should present itself soon enough.

The Federal Reserve has officially begun cutting rates after implementing a series of hikes in 2022 and 2023 to slow inflation. In the coming weeks, mortgage rates could fall, leading to more refinance opportunities.

But while you may be eager to refinance immediately, waiting until 2025 could be a smarter financial move. Here’s why.

Sitting tight could result in a better deal

Refinancing a mortgage is not the sort of thing you want to do repeatedly — at least not within the same year or so.

The reason? When you refinance a mortgage, you’re charged closing costs that can amount to 2% to 5% of your loan. So if you owe $200,000 on your home, that’s $4,000 to $10,000 in fees you may have to pay to swap your current mortgage for a new one with more favorable terms. Since it makes sense to only try to refinance once on the heels of the Fed’s rate cuts, you may want to sit tight until 2025.

Now, the Fed did just lower its benchmark interest rate by half a point. And a cut that size could have quite a significant impact on not just mortgage rates, but borrowing rates on a whole in the near future.

But the Fed’s September interest rate cut is really just the first of several the central bank has planned. The more cuts you wait for, the lower your refinance rate might be when you sign your new loan.

Set yourself up to save big

While it pays to wait for at least a couple more interest rate cuts from the Fed to refinance your mortgage, one thing you can do now is work on boosting your credit score. The higher that number, the lower an interest rate you’re likely to qualify for.

You can increase your credit score by paying bills on time and reducing your current credit card balances. It’s also a good idea to check your credit report for errors.

If that report contains a mistake that portrays you as a less reliable borrower, it could hurt your chances of refinancing, or leave you stuck with a rate you’re less happy with. There’s no reason to take that chance when a simple review of your credit report could alert you to an error and give you an opportunity to fix 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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Interest rate cuts are apt to drive CD rates downward. Read on to see if you should rush to open one. [[{“value”:”

It’s been a good year to have money in a savings account or a CD. The Federal Reserve’s benchmark interest rate has been at recent peak levels of 5.25%-5.50% since August of last year, which means savers have had a great opportunity to earn more interest on their money in the bank.

The Fed started signaling in 2023 that it was looking to start cutting interest rates after raising them in an effort to slow the pace of inflation. But it took the central bank until mid-September of this year to move forward with its first rate cut in ages.

On Sept. 18, the Federal Reserve lowered its benchmark interest rate by half a point, decreasing it to 4.75%-5.00%. That’s considered a fairly aggressive move on the Fed’s part, since the central bank had the option to lower that rate by a quarter of a point but chose a more substantial cut. And seeing as how this new rate cut is likely to be the first of many, it’ll be interesting to see what approach the Fed takes at its next few meetings.

Now you should know that the Fed’s most recent rate cut has the potential to be great for borrowers. Mortgage rates, credit card interest rates, and other loan rates should begin to fall following this move.

But the Fed’s actions aren’t the best news as far as CD rates (and other deposit accounts) are concerned. So if you’ve held off on a CD thus far but are still interested in opening one, your best bet is to move quickly.

You don’t want to miss out

Even with the Fed being fairly aggressive with its first interest rate cut, there’s no need to panic that CDs are about to become worthless savings vehicles. Many people have enjoyed 5% CD rates for quite some time. But even if CD rates fall to, say, 4.5% or 4%, that’s not a bad deal at all.

When you open a CD, you’re guaranteed your return, and you’re really taking on no risk provided your bank is FDIC insured and your deposit is limited to $250,000. So if you can only get 4%, it’s nothing to cry about.

At the same time, though, if you have money on hand, there’s no reason not to open your next CD now. If the Fed decides to be equally aggressive with its next rate cut, CD rates could fall faster than expected. You might as well get ahead of that situation and lock in your rate while they’re still fairly competitive.

Is a CD even right for you?

It’s easy to see the appeal of CDs, even with rates dropping below 5%. But before you rush to open one, make sure that’s the right place for your money.

If you’re not sure if you’ll need your funds for near-term expenses or goals, then sticking with a savings account is a better option. And if you’re not planning to use that money for a decade or longer, then investing it makes more sense than putting it into a CD.

The stock market’s average annual return over the past 50 years is 10%, accounting for both good and bad years. So if you have a long investing window ahead of you, putting your money into stocks over CDs could really pay off nicely.

But if you’re convinced a CD is your best bet, act now. The longer you wait, the lower a rate you’re likely to end up with.

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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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The Fed announced a 50 basis point rate cut on Sept. 18, 2024, bigger than expected. See what it means for your finances and the economy. [[{“value”:”

Today (Sept. 18., 2024), the Federal Reserve cut the federal funds rate by 50 basis points (0.50%). While not a total shock, this Fed rate cut is larger than many people expected. Until fairly recently, the conventional wisdom among many financial experts was that the Fed was going to cut interest rates by only 25 basis points in September 2024.

Instead, the Fed decided to go big. Lower interest rates have big impacts on savings account rates, credit card interest rates, mortgage rates, and more. When money gets cheaper, it can be good news for the job market, the housing market, and the overall economy.

Let’s look at what the Fed’s recent rate cut means for your money.

Interest rates could come down faster than expected

With a 50 basis point cut to the federal funds rate, the best savings account APYs will likely soon drop by 50 basis points, too. Mortgage rates could come down more than they already have. Borrowing costs in the form of APRs on auto loans and credit cards are likely to come down too.

Most economic experts believe that the Fed will continue to cut interest rates. No one knows how much future interest rate cuts will be or when they will happen. But the Fed forecast shows that interest rates could come down by another 50 basis points by the end of 2024 (the Fed meets again in November and December), and by another 100 basis points (1%) in 2025.

What a 50 basis point rate cut means for your money

Some banks are already reducing APYs on savings accounts and dropping APRs on loans in response to the new federal funds rate. Here are a few quick examples of how your personal finances might change.

Lower savings account APYs

After the Fed’s rate cut, the best savings account APYs are likely to fall below 5.00%, perhaps to 4.75% APY or lower. A half a point reduction in your savings account APY means that every $1,000 of savings will earn $5 less per year.

Lower CD rates

If you already locked in a 5.00% APY on a CD before the rate cut, congratulations: you just landed a good deal, and earned some extra interest that is no longer available to other savers. Just like savings accounts, the best CD rates for newly opened CDs are also likely to go down by 50 basis points because of the Fed’s rate cut — meaning $5 less interest income for every $1,000 in a CD.

Lower APRs on mortgages

Mortgage rates were already coming down before the Fed announced its rate cut. Lower rates from the Fed will likely be reflected in mortgage rates soon. This could be good news for home buyers who have been waiting to get an affordable mortgage rate.

Lower APRs on auto loans

People with higher credit scores who are buying new cars are likely to see the biggest immediate benefits from lower interest rates on auto loans. A 50 basis point reduction on an auto loan might not make a big enough difference for used car buyers or people with lower credit scores.

But if interest rates keep coming down during the end of 2024 and into 2025, auto loans could get cheap enough to provide financial relief to many car buyers.

What the rate cut means for the U.S. economy

Is the Fed rate cut good news for the U.S. economy, or a sign of looming recession? There’s no single right answer to this question, but the general consensus from financial industry commentators that I’ve been reading today seems to be that the Fed is trying to protect the economy (and promote job growth) by cutting interest rates by 50 basis points instead of only 25 basis points.

Here are a few big picture takeaways from the Fed’s interest rate cut.

Inflation is “over” (enough) for now

Ever since it started raising the federal funds rate in 2022, the Fed has been battling inflation, trying to restrict the flow of money into the economy so consumer prices would stabilize. Although inflation is not “finished,” the latest inflation numbers showed that August 2024 inflation (as measured by the Consumer Price Index) was 2.5% year-over-year. That’s pretty close to the Fed’s inflation target of 2%, so the Fed felt confident to cut interest rates.

The Fed wants to support job creation

The Fed has two goals in setting interest rates: achieve 2% inflation and maximum employment. If the economy gets overheated, inflation gets too high. But if the economy slows down too much, people lose their jobs. The Fed ideally wants to strike the right balance.

Although the U.S. unemployment rate is only 4.2%, in the past few months, it has ticked up slightly. And some recent job creation stats have been revised downward — 818,000 fewer jobs were created in April 2023-March 2024 than was first reported.

If the job market is slowing down, it puts more pressure on the Fed to cut interest rates. Lower interest rates can help stimulate the economy, pump more money into the economy, and encourage businesses to borrow, invest, and hire.

Bottom line

A 50 basis point rate cut by the Fed will make an immediate difference to your savings account, mortgage rates, and other parts of your financial life. Ideally, lower interest rates can also be the start of more job growth, lower borrowing costs, and a more prosperous economy.

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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 positions in and recommends Target. The Motley Fool recommends Flow. The Motley Fool has a disclosure policy.

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