Money Management

In the new vs. used car debate, there’s more to consider than monthly payments. See how buying used can save you thousands of dollars over the years. [[{“value”:”

Data from Experian shows the average monthly payment for a used car is $523, while the average cost of a new car is $735 per month. Which means buying a used car could mean spending $200 less per month.

If you’re buying a car, the cost of your monthly payment matters. Spending less on your car means more money in your budget to cover costs like car insurance, investments, and housing. But let’s put the budget aside for now. What other impacts can spending $200 per month less on car payments have on your life?

Lower monthly payments give you more flexibility in loan terms

By purchasing a used car and paying a lower monthly payment, you’ll have more wiggle room in your budget to adjust your loan term. You can use this flexibility to pay the car off faster and save thousands on interest.

According to Experian, the average loan length for a used car loan is 67.4 months. With an average interest rate around 10.488%, you’ll pay around $6,508.90 in interest over the life of the loan if you purchase a used car for $20,000 and pay $395.66 per month. (Possibly a little more if you wrap taxes and registration fees into the loan; less if you make a down payment.)

But if you shorten the loan to 36 months for the same car, you’ll pay $649.94 per month (still below the average monthly payment for a new car) and pay just $3,397.69 in interest over the life of your used car loan. That extra $3,111.21 you would have paid in interest can be invested, saved, or used for other household expenses.

Used cars often have lower insurance rates

In addition to a lower monthly car payment, buying a used car may also come with cheaper car insurance rates. Since used cars are generally valued less than new cars, car insurance rates tend to be lower.

New cars also usually cost more to repair, which can also lead to higher insurance rates. So in addition to paying $200 less per month in car payments, you could save hundreds per year by having access to cheaper car insurance rates.

Used cars depreciate less than new cars

According to Kelley Blue Book, the average new car will lose 20% of its value in the first year — which means you could quickly owe more than your car is worth (known as being underwater on the loan).

Used cars, on the other hand, have a lower depreciation rate. For example, the average Toyota Camry depreciates $5,059 in year one, but only depreciates $1,176 between years seven and eight. This means you’re likely to get closer to what you originally paid if you need to sell or trade in your car.

There’s an opportunity cost to paying more

Paying $200 per month extra on your car payment might not seem like a huge deal. Depending on your budget, it may not be. But there’s also an opportunity cost that many people don’t consider. What if instead of paying $200 more on your car loan, you invested the money?

The average rate of return for the stock market is 15.44% in 2024, so if you saved $200 per month for six years with that return, the average length of a used car loan, you could have a portfolio worth $24,982, with $14,400 in contributions and $9,382 in growth.

Now, let’s look at the true cost of buying a new car. It’ll cost you (on average) around $200 extra per month, hundreds more per year in higher insurance rates, will depreciate faster, and could have an opportunity cost of $9,382.

Even after all that math, you might still crave that new car smell. And buying a new car is OK, if it works for your budget. Just make sure you’re considering all the different ways buying new can impact your finances.

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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.The Motley Fool has a disclosure policy.

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Comparing your mortgage payment to others may seem pointless, but it can help you gauge where you stand. Read on to learn more. [[{“value”:”

For most Americans, debt is a constant reality, and fighting for a piece of the American Dream is a difficult achievement indeed. So, how do you know if you’ve made it? One way to track how you’re doing is to gauge yourself against everybody else. Although I don’t generally approve of trying to keep up with the Joneses, it can be helpful to at least know what the average member of the Jones family is up to and where you are in comparison.

The median home sales price in Q2 2024 is $412,300, according to the Federal Reserve Bank of St. Louis — up almost $100,000 since Q2 2019 when it was $322,500. So it’s definitely not unusual to wonder just where your mortgage stands, especially with mortgage rates so much higher than in years past.

Why mortgage debt matters

Americans have tons of consumer debt — the total stood at $17.796 trillion as of Q2 2024 (an all-time high). That’s about $104,000 per person. So, you’d think it wouldn’t really matter too much if that debt was credit card or car payments or mortgages. But mortgages are a different beast from all the rest because of both how long they last and how vital they are to household security.

That’s probably why mortgages currently make up 70% of all household debt. Over three quarters of Americans still believe that owning a home is a vital part of the American dream, even though 47% of non-homeowners cite affordability as the main reason they don’t own a home.

A home isn’t simply an investment (though many would argue that it is); it’s a way to create a financial foundation. It’s a place to launch the rest of your financial life. And, most importantly, it’s a way to even out rising housing costs, especially if you have a fixed-rate mortgage.

That’s why even people who often won’t use a credit card or borrow a personal loan will take out a mortgage. For them, it can be a financial badge of honor.

What is the average mortgage payment?

Keeping in mind that the median price of a home sold in Q2 2024 was $412,300, it’s actually pretty amazing to learn that the average mortgage payment was just $1,427 as of 2021. Once the data is updated, we may discover that when 7% mortgage interest rates kicked in, that payment grew alarmingly. But since the average mortgage debt in 2023 was just $244,498, maybe not.

If you plug that debt figure into a mortgage calculator and set it to a 7% interest rate on a 30-year fixed-rate mortgage, the principal and interest portion of the payment is just $1,626.65. It’s not exactly nothing, but compared to the average rent for an apartment at $1,536 per month, it’s not really bad at all.

How to lower your mortgage payment

Now that you know how your mortgage payment compares to others, you’re either thinking that it’s way too high or that you got off lucky. If you’re the former, let’s talk about how to lower that payment.

You can sell your home

I know this is grim, but according to a recent survey, the biggest regret of home buyers is that their home is more expensive overall than they expected. The market is still very healthy in most locations, so if you need to sell and buy something newer, smaller, or in a different location to lower your costs, now is the time.

You can refinance

If you speak to your lender about a mortgage refinance, you may find that you’re already qualified for one. Many loan types only need you to make six months of payments before a simple refinance is possible. If rates are considerably better than they were when you bought, or you have significant equity in the home, you may be able to refinance for a better rate or at least lose your mortgage insurance costs.

You can shop around for your homeowners insurance

Unfortunately, many people, including myself, are getting absolutely walloped by the price of homeowners insurance. If your payments are escrowed, any rise in the cost of insurance will also be a rise in your mortgage payment, which can be hard to deal with if you were already cutting it close. Shop around for insurance and see if you can find a better rate with another company.

How you compare to the average may not really matter

It’s fun to see where we are financially against benchmarks like national averages, but the truth is that the average American doesn’t really exist. America is wildly diverse, as are the hundreds of real estate markets within it. So if you live in a low-cost-of-living area, don’t get too excited that your payment is well below average. And don’t be too upset if you’re in Manhattan and your mortgage is sky high, relatively speaking.

If you’re able to save for retirement, can cover an emergency with your savings account, and you’re paying your bills every month, you’re doing great. It’s only when you can’t do those things that maybe you should consider where you can cut costs, like adjusting how much you spend on housing, if possible.

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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.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Kristi Waterworth has no position in any of the stocks mentioned. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

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Costco can offer excellent deals on TVs, but for some, it isn’t the best option. Read on to learn when you might want to look elsewhere for a new TV. [[{“value”:”

Most trips to Costco mean a trunk full of groceries and the odd free sample. But the wholesaler sells a ton of other products, including TVs. While that can spell big savings (Costco is rightly acclaimed for its many savings opportunities), there are certain circumstances when you might want to shop elsewhere for your new TV.

1. You don’t live within 50 miles of a Costco warehouse

There are about 800 Costco stores worldwide. Still, not everyone is going to have access to a physical store within convenient driving distance, and even if you do, you may not want to lug a big TV back to your car and drive it home. So it makes sense that you may opt for delivery, which Costco offers online.

But there’s a big limitation here: The store only offers delivery for people who are within 50 miles of a Costco warehouse. So, depending on where you live, you may not have that option.

2. You don’t have a Costco membership (and don’t want one)

If you live close to a Costco, but don’t have a membership, you’ll pay a 5% surcharge on any online purchase. For context, Costco memberships cost at least $60 per year (soon to be a minimum of $65, when membership prices increase on Sept. 1). So for a $1,000 TV, you’d either need to pay $1,060 (if you opt for a membership) or $1,050 (without a membership, but with the surcharge).

You should also note that there would be extra shipping and handling fees for those who live in Alaska, Hawaii, or Puerto Rico. Depending on the TV model you want, you may find a cheaper option elsewhere.

3. You want a wider selection to choose from

Costco may offer savings opportunities, but that comes at a cost: Your options for TVs can be significantly narrower than you might find at other retailers. In fact, Costco only carries TVs from six brands:

SamsungLGSonyHisenseTCLSanus

If, for example, you want a TV from popular brands like Vizio, Panasonic, or Toshiba, you wouldn’t have any options here. The limited selection can also make it harder to compare those options to ones from other retailers. While not the biggest hurdle, it is another layer of difficulty to be aware of, especially if you don’t want to spend hours researching your next TV purchase.

A new TV can represent a big investment in your entertainment. And while Costco can offer very low prices on products, particularly when paired with the right credit card, for some, it simply isn’t the best (or cheapest) option. That’s especially true for those who don’t live close to a Costco or aren’t located within the continental U.S.

In that case, there are other retailers that may be better equipped to meet your needs and deliver a TV that you love.

Top credit cards to use at Costco (and everywhere else!)

If you’re shopping with a debit card, you could be missing out on hundreds or even thousands of dollars each year. These versatile credit cards offer huge rewards everywhere, including Costco, and are rated the best cards of 2024 by our experts because they offer hefty sign-up bonuses and outstanding cash rewards. Plus, you’ll save on credit card interest because all of these recommendations include a competitive 0% interest period.

Click here to read our expert recommendations for free!

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 Costco Wholesale. The Motley Fool has a disclosure policy.

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Don’t go into debt when buying a new computer for your small business. See one way to make a costly business purchase without going into debt. [[{“value”:”

A quality laptop can last many years — but there will come a time when it will need to be replaced. I purchased my previous laptop in 2015 and used it regularly for nine years. While it still functions, it started showing more signs of wear. Since I’m a self-employed writer, this year felt like a good time to invest in a newer device for my business needs.

I decided to buy a new model to get more done without tech-related slowdowns. But buying tech, such as a desktop computer or laptop, isn’t cheap. I’m also a long-time Apple fan, so I knew the model I wanted would cost a lot of money. Find out how I made this business purchase more affordable without draining my business bank account or going into debt.

I funded my purchase using a 0% APR credit card

I do my best to keep extra cash in the bank for emergencies, but I found another way to fund my laptop purchase. The last thing I wanted to deal with was credit card debt, so I avoided using my existing business credit card. Instead, I applied for a new credit card to finance my purchase.

Several business credit cards have 0% APR promotional offers. With a 0% APR credit card, you can avoid interest charges for a set time as long as you pay off your debt before the promotional period ends. But keep in mind that if you don’t pay the balance off before the no-interest period ends, you’ll be charged interest.

Some 0% APR offers are for purchases, while others are for balance transfers. I got a credit card with a 0% APR offer on purchases and then charged my credit card when buying my new laptop. This afforded me more time to pay it off without incurring credit card interest charges.

I make monthly payments on the card as I chip away at the debt, and I fully intend to pay the entire purchase off before the promotional period ends so I don’t pay interest fees. Because of this, I won’t have to worry about credit card debt or have to dig into my savings.

If you need to buy new tech for your small business or have other business purchases you plan to make, you should explore this payment solution. Check out our list of the best small business credit cards to learn more about each card’s features.

Another way I saved money on this purchase

In addition to thinking about the best way to finance this purchase to stay out of debt, I also looked for other ways to maximize my savings. I waited to buy my laptop during a big electronics sale. I was able to get a $500 discount by timing my purchase. I also earned rewards because the credit card I used to pay for it was a rewards credit card.

Look for ways to save money and earn rewards without racking up debt

Do you need to buy new technology for your company? Comparing prices and shopping around for the best deals could offer significant savings. Every dollar you save adds up and can be a win for your business.

Earning credit card rewards is yet another way to maximize your savings when you pay for expenses. Using one of the best cash back business credit cards can help you earn cash back rewards when paying for essential items for your small business.

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

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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 Apple. The Motley Fool has a disclosure policy.

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Explore high-paying remote roles that offer flexibility and growth. Look for these jobs now to advance your career from home. [[{“value”:”

Ready to swap your office commute for a coffee break at home? If you’re hunting for remote work that pads your wallet nicely, then buckle up.

We’ve rounded up some top-paying positions that promise not just a hefty paycheck but also the comfort of your own cozy living room. Here’s a peek at five remote roles that not only tick the box for flexibility but also make sure your savings account is healthy and happy.

1. Principal Machine Learning Engineer

Median salary: $157,500

Ever dreamed of working in your pajamas while pioneering cutting-edge AI technologies? Companies across the U.S. are on the hunt for their next principal machine learning engineer to boost their AI game.

In this role, you’ll be knee-deep in algorithms, collaborating with brilliant minds to inject AI across products. If you’re the kind who likes a good AI challenge and has a knack for Python or Java, this might just be your next big gig. Bonus points if you can seamlessly switch between deep learning models and a deep love for coffee.

2. Applied Scientist

Median salary: $111,146

An amazing applied scientist is like a brilliant detective with a passion for solving complex puzzles and uncovering insights from data. They blend deep technical know-how with creativity to design experiments and develop solutions that push boundaries. With a knack for turning abstract theories into practical innovations and a love for detail, they make sense of data and drive impactful discoveries.

So, if you’re in touch with your inner nerd and ready to make cutting-edge breakthroughs from the comfort of your own couch, then this is the job for you.

3. Executive Assistant

Median salary: $111,764

Imagine managing calendars and travel for executives while sitting in your living room! Phenomenal companies everywhere need sharp, organized executive assistants to support their senior leaders.

If you have ninja-like skills in managing schedules and can draft emails faster than most people can type a text message, this could be your chance to shine. Plus, it’s not all spreadsheets and schedules; you’ll also get to plan events and coordinate with teams globally, making every day a new adventure.

4. Creative Director

Media salary: $149,139

If you’re a visionary who turns inventive ideas into unforgettable stories, mixing strategy with a sprinkle of iconoclastic magic, then you could be the next great creative director. Creative directors lead and inspire their team to dream big and create something truly singular every time.

And the best part? You can do it all from anywhere, bringing in fresh vibes from across the globe without leaving your cozy creative nook. It’s the perfect blend of creativity and freedom.

5. Product/Brand Manager

Median salary: $146,259

Imagine guiding starry-eyed product teams toward victory, armed with nothing but your expertise and maybe your lucky coffee mug. There’s a plethora of groundbreaking companies looking for product and brand managers, and guess what? It’s all about building a cohesive strategy to elevate products — no coding marathons or bug hunting here.

Your new office mates could be from anywhere as you help your team build the world your brand excels in. Think high-level marketing plans, developing brand identity, and analyzing data to better inform your company’s decision making. Product and brand managers are all about creating a universe for new customers to connect to around a product.

These roles aren’t just jobs; they’re opportunities to transform your work life from the comfort of home. Plus, they provide a pathway for redefining your professional journey and padding your budget. So why not search for one of these lucrative roles? Your new office might just be your couch!

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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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If you’re almost ready to retire, it’s important to understand annual withdrawal rates, healthcare costs, and more. See how to get retirement ready. [[{“value”:”

Saving for retirement is a lifelong project. But if you’re lucky, as you get closer to retirement age, you might find that instead of saving more money and investing for retirement, you might finally be ready to start thinking about spending the money in your IRA.

Before you decide to retire, it’s important to check the numbers. Get a clear idea of how much money you need to retire, and what moves you should make to help your money last the rest of your life.

Here are a few questions to answer as you approach the home stretch of saving for retirement.

1. What is my monthly budget in retirement?

You don’t have to be a millionaire to retire; most retirees have less money than that. Studies have shown that many people gradually tend to spend less money as they get closer to retirement age.

Before you retire, think about how much you realistically need to spend in a typical month — it might be less than you expected. For example, what would your monthly spending look like if:

Your mortgage was paid offYou were no longer providing financial support for childrenYou didn’t need a car or other expenses of commuting to workYou could get by with a more frugal lifestyle in your golden years — less frequent travel or less expensive vacations, less dining out and more meals at homeYou could downsize to a smaller home or a location with a lower cost of living

2. How much retirement income will I get from savings?

The goal of saving for retirement with a 401(k), traditional IRA, Roth IRA, or brokerage account is to build up a big pile of investment assets. And then when you retire, that diversified portfolio of stocks, bonds, cash, and other assets can start generating income for you in retirement.

The idea of living off of your life savings in retirement is to create a steady, stable return from your investment portfolio, and withdraw about that amount (or less) each year. This way, you can have a healthy income in retirement, without ever spending all of your savings.

For example, let’s say you have $600,000 of retirement savings. Let’s assume you can earn 5% returns per year (with a conservative blend of investments that are suitable for a retiree, such as cash equivalents, bonds, and a small percentage of stocks). That would give you an annual income of $30,000 in retirement from your personal savings, not counting Social Security.

3. How much Social Security will I get?

Most Americans can expect to get some retirement income from Social Security. However, Social Security only pays about 40% of the typical retiree’s pre-retirement income — so if you earned $50,000 of Social Security wages, you might get about $20,000 per year of Social Security retirement income.

To get a more exact estimate, check out this Social Security Quick Calculator tool from SSA.gov. It will show you how much Social Security you can get, based on your current earnings and your future retirement date. As of January 2024, the average monthly Social Security retirement benefit was $1,907.

$1,907 per month is better than nothing, but it’s not enough for most people to have a comfortable retirement, even if they’re frugal. This is a good reason to be careful not to start taking Social Security too soon. If you can keep working, or live off personal savings long enough, delaying the start of your Social Security benefits beyond your Social Security retirement age can help you get a larger monthly payment.

4. How long will my retirement savings last?

Retirement planning is a tough challenge, because you have to make your money last for the rest of your life. Social Security income is a kind of “longevity insurance.” Even if you retire at age 65 and live to 105, Social Security will (ideally) keep paying you a monthly check for the rest of your life, and it will be adjusted to increase with inflation.

If you have a big enough retirement nest egg in your 401(k), IRA, or brokerage account, you can hopefully withdraw less than you earn each year in investment returns. Retirement annuities can be another strategy to turn your retirement nest egg into guaranteed income for life.

Many retirees never run out of money, and some might even grow their investment portfolios to pass down assets to their surviving loved ones or favorite nonprofits. Check out The Motley Fool’s free Foolish Calculators to crunch the numbers on how long your retirement savings could last.

5. How will I pay for healthcare costs in retirement?

Even if you’re not planning for a lavish lifestyle in retirement, many retirees need to be prepared for healthcare costs. Medicare doesn’t cover everything. A 2024 Fidelity study found that the average retiree will need $165,000 for out-of-pocket healthcare costs in retirement.

Here are a few ideas for how to plan ahead to pay for retirement healthcare costs:

If you qualify, use a health savings account (HSA) as a tax-advantaged way to save and invest for future healthcare expenses.Consider long-term care insurance to protect yourself from nursing home bills.Look at your options for Medicare Advantage plans that might cost a bit more per month, but that can save you money on out-of-pocket expenses.

Bottom line

Getting ready for retirement requires a big shift in mindset, from saving and investing to (responsibly) spending. Think about the big picture of how you can make your retirement savings last longer, how much Social Security you’ll get, and how to protect your nest egg from retirement healthcare costs.

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Click here to read our full review for free and apply in just 2 minutes.

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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