Money Management

Thinking of getting an RV? Read on to see what goes into determining insurance rates. [[{“value”:”

Driving an RV isn’t within everyone’s comfort zone. Maneuvering a large vehicle like that is different from driving a standard-sized car, or even a larger one, like a minivan.

But owning an RV comes with benefits. For one thing, an RV can be a car and hotel all in one, making it a good choice for a cross-country road trip, or a trip that involves multiple stops. And for travelers with pets, an RV can be a good choice, since many hotels don’t allow pets or charge exorbitant fees to allow them to stay.

But clearly, there’s a cost to owning an RV. And it’s not just the purchase price. There are additional costs that come with being an RV owner, from maintenance to RV park fees to auto insurance.

The latter, though, may not be as expensive as expected. The average premium for a year-long RV insurance policy at Progressive was $573 for a travel trailer and $958 for a motorhome in 2022. That’s $47.75 to $79.83 per month. And Progressive says that liability-only RV policies start at just $125 per year.

By contrast, Progressive puts the average auto insurance premium for a regular vehicle at $79.83 to $157.27 per month for a liability-only policy.

Still, it’s important to know what goes into RV insurance rates. Here are three factors insurers take into consideration.

1. The type of RV

Vehicle costs play a huge role in determining auto insurance rates. The more expensive an RV is, the more it’s apt to cost to insure. Progressive says that motorhomes are usually more expensive to insure than travel trailers that are pulled by another vehicle. That’s because motorhomes are actually driven, so they need liability coverage.

RVs can also run the gamut from basic to high-end. If insurance costs are a concern, it’s best to be careful when paying extra for different RV features.

2. Location

Location plays a big role in auto insurance rates. An RV’s home base will help determine how much a policy costs.

If it’s an area with lots of crime or a history of many insurance claims, that could result in higher premiums. It’s also worth noting that people living in areas that tend to experience extreme weather events may face costlier premiums for RV insurance.

3. Driving history

Just as driving history plays a huge role in determining rates for traditional auto insurance, it also factors into RV insurance rates. Maintaining a clean driving record could result in a world of savings. Drivers with moving violations on their records may want to talk to insurers about the financial benefits of taking a defensive driving course.

All told, auto insurance is an important expense to factor into the cost of owning an RV. Shopping around is the best way to see what rates are available and find the most competitive offer. It may also be worth testing out an RV by renting one before taking the leap into ownership. Even though auto insurance for an RV may be less expensive than expected, there are other costs that may prove to be too big of a budget hit to make RV ownership worth it.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool recommends Progressive. The Motley Fool has a disclosure policy.

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Some people really love using coupons to save — but Costco doesn’t go for that. Keep reading to find out why. [[{“value”:”

I’ve never been much of a coupon shopper. Sometimes I’ll hang onto the paper coupons I get at the grocery store checkout if they’re for an item I might want to buy (it doesn’t happen often), and I’ll stick them to my fridge at home. But then it’s a real toss-up as to whether I’ll actually remember to tuck them into my wallet for my next shopping trip.

If you’re a coupon fan, however, you’re probably the person ahead of me in line who whips out a pile of them at the register and knows how to stack them for even more savings. So it might bum you out to learn that warehouse giant Costco doesn’t accept manufacturer coupons. Let’s take a closer look at why — and learn how you can save money at Costco regardless.

Costco makes the deal for you — no coupon required

There’s really just one simple reason why Costco doesn’t accept coupons now and it’s unlikely it will in the future. Costco states plainly on its website, “Costco Wholesale doesn’t accept general manufacturer coupons for a simple enough reason: We distribute our own offers and savings to our members by mail and at our locations on many occasions throughout the year.”

In short: You don’t have to go out and look for coupon savings on the items you want to buy because Costco does it for you. In exchange for your annual membership fee of either $60 (Gold Star membership) or $120 (Executive membership), you get access to the deals Costco arranges with manufacturers via wholesale and bulk pricing.

As an example, as of this writing, you can score a great deal on the Drayden Fabric Sectional sofa. It comes with an ottoman and two throw pillows, and it has wooden legs for a clean and classic look. The list price is $1,349.99 — but Costco members get it for just $999.99 between now and July 21. That’s thanks to $350 in manufacturer’s savings — it’s a coupon you don’t need to hunt down or clip, but get access to thanks to Costco’s dealings.

You can find deals on Costco’s website as well as in its monthly members-only Savings Book, which will come to you in the mail. You can also find it online on third-party websites.

So how can you save even more at Costco?

I’m glad you asked! Even though you can’t use your stash of coupons at Costco, there are still ways to lessen the budget hit of a Costco trip. Try these on for size.

Consider the Executive membership tier

Pay more for a Costco membership?! Depending on how much you spend at Costco, this could be a good move, since you get 2% cash back on most Costco purchases with the higher membership tier. If you spend at least $3,000 per year, that extra $60 will be covered by the cash back you earn. Spend more, and you’re money ahead.

Shop with a list

This seems like the easiest tip in the world to just throw out there, but trust me on this — a shopping list will make your Costco experience less expensive if you vow to stick to it.

Also, a list can help ensure you actually get everything you went to Costco for. It would be a bummer to fight that crowd and that parking lot, only to realize you forgot something vital and must make a second trip.

Buy in bulk strategically

Yes, Costco’s bread and butter are those bulk grocery deals. But be honest with yourself — do you really need a huge block of cheese? Or a giant jar of peanut butter? Will you finish these items before they go bad? If not, you’ll end up throwing away part of your purchase, which is the opposite of saving money.

I recommend taking inventory of the items you go through a lot of, and focusing your bulk-buying efforts on those. Failing that, get your perishable groceries at a regular supermarket (and be sure to use a great grocery rewards credit card), and turn to Costco for deals on furniture, electronics, and nonperishable items, like paper goods.

Costco has the potential to save you money on the items you’d buy anyway — and you don’t even have to risk paper cuts from coupons to get those great deals. What could be better than that?

Top credit card 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.

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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.JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has positions in and recommends Costco Wholesale and JPMorgan Chase. The Motley Fool has a disclosure policy.

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American Express is accepted in far more places than it used to be. But it hasn’t quite caught up with Visa and Mastercard. Learn what you should know. [[{“value”:”

American Express has a long and established history of offering competitive products, but not too long ago, there was one big drawback to carrying an Amex in your wallet. I’m a long-term Amex customer myself, and about a decade ago, it was rare to go a full week without hearing the dreaded, “Sorry, we don’t take American Express.”

Fortunately, this pain point has largely been resolved, at least for using American Express cards in the United States. But that isn’t necessarily the case when traveling abroad, so here’s a quick overview of where you can and cannot use your American Express card as of 2024.

American Express in the United States

As mentioned, American Express’ acceptance rate has increased dramatically over the past decade or so domestically. In the United States, among merchants who accept card payments, Amex has a 99% acceptance rate. This essentially means that the cards are now universally accepted in the U.S.

One notable exception is Costco. American Express actually had an exclusive agreement with Costco at one point, but for the past several years, the only type of credit card you can use at Costco is Visa.

If you want to know whether a particular store accepts American Express, the issuer has a useful retailer map you can use to search.

International acceptance of Amex cards

Although American Express cards are almost universally accepted in the United States, they aren’t nearly as welcomed in many international countries. This is a sharp contrast to Visa and Mastercard, which combine to make up about 63% of all credit card transactions worldwide. Amex cards account for less than 5%.

To be fair, American Express has tripled its international acceptance rate since 2017, but it still falls behind the other major payment networks.

According to Experian, there are a few specific countries where American Express is widely accepted, especially in large cities. These include Canada, Mexico, the U.K., Australia, Singapore, and India.

You’ll generally find that it can be a reliable payment option in many cities, but just keep in mind that it doesn’t exactly have the same 99% acceptance rate outside of the United States. And countries with poor U.S. relations (Cuba, Iran, etc.) generally don’t have Amex acceptance at all.

However, it’s important to mention that Amex continues to do a great job of expanding its global footprint, so its international acceptance should continue to improve for years to come.

The final verdict

Amex has done a fantastic job in recent years of ensuring that its customers don’t typically need to have a backup card with them when shopping in the United States. However, that is simply not the case when traveling abroad. So if you’re planning an international trip anytime soon, it could be a smart idea to have another travel card with no foreign transaction fees in your wallet when you do.

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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.American Express is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Matt Frankel has positions in American Express. The Motley Fool has positions in and recommends Costco Wholesale, JPMorgan Chase, Mastercard, and Visa. 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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Want to know if now is a good time to open a 1-year CD? Here are a few reasons why the best savings accounts could be better than the best CDs. [[{“value”:”

The Federal Reserve has not yet cut interest rates in 2024 — but that could change soon. If the Fed cuts interest rates later in 2024, that means right now (July 1, 2024) could be the best time to open a 1-year CD.

Opening a 1-year CD gives you a chance to lock in a higher APY for a full 12 months. In case the Fed cuts interest rates during the term of your CD, your money will keep earning a higher APY than might be available at other banks. But is a 1-year CD the best place to put your savings?

Despite growing chatter about the possibility of future Fed rate cuts, I’m not convinced that opening a 1-year CD is the best move for my cash. Here are a few reasons why the best savings accounts and money market accounts are still better than the best CDs.

1. No one knows if the Fed will cut interest rates

Trying to make predictions about the Fed’s interest rate cuts can be a fool’s errand. Back in December 2023, the conventional wisdom from Wall Street experts was that surely the Fed was going to cut interest rates, starting soon, in 2024. Well, we’re halfway through 2024 and so far there have been no interest rate cuts.

And even if the Fed cuts rates, no one knows when. Or how much. Or if a (presumably) 0.25% rate cut would be the last for a while. The Fed could cut rates in September 2024 or November 2024 or both, or neither. The Fed’s decision makers don’t even know; they’re trying to make complex choices based on changing information.

But the point is: don’t open a 1-year CD because you’re 100% certain the Fed will cut interest rates. Even if the Fed cuts rates by 1.25% during the course of your CD’s 12-month term, is that really worth locking up your money? Because…

2. A 1-year CD makes you lock up your money for 12 months

CDs make you lock up your money. Whether it’s a 1-year CD or a 6-month CD, every CD wants you to keep your money committed for a certain term of time.

And if your plans change and you need to pull money out, you’ll have to pay an early withdrawal penalty. This penalty can eat up most (or all) of the interest you would’ve earned from the CD.

Early withdrawal penalties feel too risky. I couldn’t stomach the feeling of losing money on something that was supposed to be a guaranteed, risk-free investment. If CDs paid APYs that were several percentage points higher than the best bank savings accounts, then maybe I’d be willing to risk that early withdrawal penalty.

In my opinion, CDs don’t compensate you enough for the risk you take if you need to take out that money sooner than expected.

Early withdrawal penalties are a big downside of CDs, and they’re a deal-breaker for me. I’d rather keep my money in a savings account or money market account, and have complete freedom for when and how to use my cash. I’d rather run the risk that the Fed will cut interest rates (likely causing my savings APY to decline).

3. A 1-year CD’s extra earnings aren’t much better than a savings account

Here’s the best case scenario for a 1-year CD: you open a CD today and get 5.00% APY. In one year, your CD term is up, and during that time, the Fed has cut interest rates by 1.25%.

So congratulations — your yield was 1.25% better than what you might have gotten from the best savings accounts. (This assumes the best savings account APYs would go down by 1.25%, in lockstep with the Fed’s interest rate cuts — which is likely, but not 100% guaranteed.)

Here’s how much you’d earn on $10,000 of savings from a 1-year CD at 5% APY vs. a savings account paying 3.75% APY after 1.25% of Fed interest rate cuts:

So in exchange for locking up your $10,000 of cash in a CD, you’d earn an extra $125 in 12 months — about $10 per month. Is that worth it?

And this is not a perfect calculation, because it assumes that savings account APYs went down dramatically, all at once, from 5% to 3.75%, and paid that lower rate for the full 12 months.

In reality, if the Fed gradually cuts rates over 12 months, the best savings accounts would keep paying nearly 5% APYs for part of that time.

Bottom line

Unless you have $100,000 to put in a CD, and you’re absolutely certain you won’t need to take it out, most everyday savers should not lock up their money in a 1-year CD.

The best savings accounts and money market accounts (for now) are paying the same or better APYs, and you don’t have to pay penalties to withdraw your cash when you need 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 recommends Maker. The Motley Fool has a disclosure policy.

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Sometimes, putting off retirement savings is justifiable. But read on to see why one common reason is a really poor excuse. [[{“value”:”

Saving for retirement is something you should aim to do every year. But sometimes, it’s okay to put off contributions to your IRA or 401(k). Your primary financial goal should be to build an emergency fund that’s large enough to cover at least three months of essential expenses. Most Americans aren’t close.

Data from SecureSave found that as of about a year ago, a good 63% of U.S. adults couldn’t cover so much as a $500 unplanned expense. So it’s a good idea to hold off on retirement savings if your near-term savings need work.

Similarly, if you owe a lot on your credit cards, you may want to chip away at that debt before funding a retirement account. If your credit cards have high interest rates, you could end up losing hundreds or thousands of dollars to interest over time.

But while wanting to prioritize your emergency fund and pay off high-interest debt are two good reasons not to save for retirement this year, there’s one common excuse for delaying retirement savings that really doesn’t hold water. So if you’ve been using it as a reason to neglect your IRA or 401(k), you may want to change your line of thinking.

“But it’s so far away”

That’s the reasoning a lot of people adopt when they’re looking for an excuse not to save for retirement. And look, it’s understandable to some degree. If you’re 25, it’s hard to imagine being 65 and needing money to pay for essentials like housing, food, and medication while not holding down a job. So it’s easy to see why the fact that retirement is so far away might zap your motivation to save for it.

But here’s the thing: The sooner you start saving for retirement, the more money you’re likely to end up with. That’s because you can invest your savings and grow that money into a larger sum over time.

Over the past 50 years, the stock market’s average annual return has been 10%. Let’s say you’re 25 and you want to retire at 65. If you start socking away $150 a month and your investment portfolio gives you a 10% return over the next 40 years, you stand to retire with about $797,000. If you wait just one year to start saving that $150 a month for retirement, the balance you’re looking at is roughly $723,000.

Now to be fair, $723,000 is a lot of money. And it’s actually about $114,000 more than what the average American aged 65 to 74 has saved for retirement, according to data from the Federal Reserve.

But the difference between $797,000 and $723,000 is $74,000. That’s a huge amount of money. To put it another way, saving for retirement one year earlier could, in this example, cost you $1,800 but leave you $74,000 richer. So all told, you’re ahead by $72,200.

Don’t delay retirement savings if you can afford it now

If your finances have taken a beating this year, or if you’re still in the process of saving money for emergencies, then by all means, wait to save for retirement. Wait one year, two years, or however long it takes to make sure your near-term financial needs are covered. Those should always come first.

But if you have the money in your budget to save for retirement this year, do it — even if it’s just a little bit. You may not think it’s important to start saving so far in advance. But if you make that effort, it might pay off in a tremendous way.

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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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You can end the year a few thousand dollars richer if you play your cards right. Read on to learn more. [[{“value”:”

What could an extra $3,000 do for your finances? Could it mean buying a new car? Paying off debt? Being able to sleep at night knowing you finally have a fully loaded emergency fund?

You can’t just snap your fingers and expect an extra $3,000 to magically appear at your door. But with the right moves, you can end 2024 with $3,000 more in your pocket. Here’s how.

1. Get your employer to give you the money

Wouldn’t it be nice if your employer could hand you some cash on top of your regular paycheck? If it offers a 401(k), then chances are, that cash is yours to claim.

Vanguard reports that 95% of companies with 401(k)s match worker contributions to some degree. Meanwhile, the median annual salary these days is about $60,000, per the Bureau of Labor Statistics. If your company will match 100% of contributions up to 5% of your salary, it means that if you contribute $3,000 to your 401(k), your employer will add another $3,000 to your 401(k). That’s money you can then invest to grow your savings even more.

2. Pick the right side hustle

The nice thing about gig work is that you can do it on your own schedule. If you can find a side hustle that pays decently, you might easily earn yourself $3,000 from it by the time 2024 ends.

As one example, Uber says that as of the end of 2023, its drivers earned a median wage of $33 per hour. But let’s cut that down to $20 an hour in case that estimate is a bit off.

To earn $3,000 by the end of the year, you’d need to drive for 150 hours total, or 25 hours per month. That’s just a little more than six hours of side-hustling per week.

Of course, it pays to look at different gigs and find one that meets your income goals. And it’s even better if you can find a side hustle you’ll actually enjoy doing. But if you’re willing to put in the time, you could close out the year with a lot more money in your savings account.

3. Get a roommate — for now

Living solo can be a wonderful thing. If there’s a mess to clean up, you know it’s because you made it. And if you’re in the mood for a quiet evening, you don’t have to worry about a roommate blasting their music.

But bunking with a roommate could put serious cash in your pocket. RentCafe puts the average U.S. rent at $1,713. Splitting that with a roommate could save you about $850 a month. Share your home for four months, and you’ve met that $3,000 goal. You never know — you could make a new friend in the process (though it’s totally OK if you don’t).

An extra $3,000 could do you a lot of good. See if that free money is available to you in your company’s 401(k). Explore your side hustle options and consider sacrificing some privacy for a limited period to get yourself to your goal.

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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 Uber Technologies. The Motley Fool has a disclosure policy.

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