Money Management

We compared online prices at Aldi, Walmart, Kroger, and Whole Foods Market. Find out how much you could save by switching grocery stores. [[{“value”:”

If you’re looking to cut your grocery costs, buying your basics in low-cost stores like Aldi is an excellent place to start. Aldi’s huge range of quality own-label goods and its clean but no-frills approach have gained it a huge following in the U.S.

In a recent press release, Aldi CEO Jason Hart said one reason customers try out the brand is a potential 40% savings on groceries. I’m a big Aldi fan. I first discovered the store’s low prices when I went to Germany as a teenager. Even so, a 40% saving is a dramatic claim — and one I wanted to put to the test.

How Aldi prices stand up against the competition

Comparing prices is a key way to save money, whether you’re buying groceries or big-ticket items like TVs or fridges. Some great price comparison apps are available, but it’s not an exact science as you can’t always compare apples with apples. Not only do package sizes often differ, the quality of what’s inside may vary as well.

I put together a basket of 20 everyday items, including beef, chicken, pasta, milk, juice, beans, vegetables, and more. I used it to compare Aldi’s prices online with Walmart, Kroger, and Whole Foods. I stuck to store brands, matched products as exactly as possible, and used the price per ounce to even out any sizing differences.

The Aldi basket was cheaper than both Walmart and Kroger. But you’d have to be a Whole Foods shopper to cut your grocery bill by over 40% by switching stores.

It’s also worth noting that you can’t yet use SNAP EBT payments to shop at Aldi online. If you’re a SNAP recipient, you can only use your EBT card in Aldi stores. In contrast, Walmart.com, Kroger.com, and Whole Foods Market all accept EBT payments for online purchases.

How to save money on your groceries

It isn’t feasible to do a detailed price comparison every time you go to the store. Nevertheless, the growth of online shopping makes it easier than ever to keep an eye on the cost of products you buy regularly. This will help you get the best deals, particularly if you have several nearby stores to choose from.

For example, rice and chicken thighs were significantly cheaper at Aldi. Walmart stood out for its low-cost parmesan cheese and tomato sauce.

Our price comparison supports the advice that switching to a budget grocery store and buying store-brand products are good ways to save money. Here are some other ways to cut your grocery spending:

Make a list: Not only will a list save you time and money, you’ll also reduce the risk of unused items going bad at the back of your fridge. Whenever I make the mistake of going to the grocery store without a list, I always regret it. I come out with a bunch of things I didn’t need and often forget enough essentials that I have to go back again. Maximize your discounts and rewards: Cash back apps will pay you a percentage of your spending as well as bonuses for specific purchases. Combine them with credit card rewards or other coupons and in-store discounts. That way, you can power up your bonuses on your everyday spending.Track your spending: A budget will help you know how much you can spend on each part of your life, whether it’s housing or having fun. Set a realistic grocery budget and use a budgeting app to help you stick to it.Buy in bulk: I didn’t include warehouse clubs like Costco in the price comparison because the membership fee and bulk savings muddy the waters. Still, if you have space in your kitchen, bulk buying can be an excellent way to save money — even more so if you’re shopping for a big household.

Key takeaway

Aldi has expanded rapidly since it opened its first U.S. store in 1976. You may not be able to save 40% on your groceries, but the chain still has some great quality products at super affordable prices. If you haven’t shopped there before, get your quarter ready for the shopping cart, gather up your reusable bags, and give it a whirl.

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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. Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Emma Newbery has positions in Amazon and Apple. The Motley Fool has positions in and recommends Amazon, Apple, Costco Wholesale, and Walmart. The Motley Fool recommends Discover Financial Services and Kroger. The Motley Fool has a disclosure policy.

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It’s natural to want to save money when flying. But read to see why choosing the cheapest fare might backfire on you. [[{“value”:”

There are certain situations in life where I generally try to pay as little as possible for whatever the item in question is. Take clothing, for example. Whether it’s for me or my kids, I’m not into fashion, and children have a tendency to outgrow or destroy their clothes quickly. My goal is usually to find the cheapest items, even if they don’t last that long.

One area where I don’t always seek out the cheapest option, though, is air travel. To be clear, I refuse to pay for business class tickets and have never done so to date. But here’s why I don’t tend to buy the cheapest fare, either.

It’s not worth the hassle and extra cost

It’s possible to save money on airfare by choosing the most basic fare class your carrier offers. But doing so might cost you in other ways. And it might also result in a major hassle.

A flight from the New York City area to Los Angeles in September on United, for example, costs $337 for a basic economy ticket — the cheapest fare available. A regular economy seat costs $437, while a refundable economy seat costs $532.

But if you choose basic economy, you won’t be able to choose your seat, nor will you be able to bring a full-sized carry-on onto the plane. Rather, that will cost you extra.

Similarly, a flight on JetBlue for that same itinerary could cost you as little as $154 for the cheapest fare. But you’ll need to pay extra to choose a seat. If you opt for the next fare class at $199, your choice of seat is included. The fee to choose a seat could cost you up to $49, depending on where you want to be situated for your flight. So all told, going with the cheapest option here could potentially leave you paying more all-in.

What’s more, when you buy the cheapest fare, it’s usually not refundable. But you could end up spending (or losing) a ton of money if you have to cancel your trip at the last minute or make a change to your travel dates. Granted, trip insurance could minimize this risk, but then that’s a separate (albeit potentially worthwhile) expense you’re looking at paying for.

And let’s not forget the hassle factor. It’s one thing to roll the dice with a seat assignment on a 90-minute flight you’re taking on your own. It’s another thing to risk getting stuck in a middle seat for a six-hour journey while your kids are scattered throughout the plane.

The right credit card could make it easier to upgrade

I’m not suggesting you upgrade to business class for your next flight. And you may not even need to pay for whatever premium economy seats your carrier offers. But I would encourage you to think twice before choosing the absolute cheapest fare, since you might end up spending more than expected.

If you need help covering the cost of a more expensive ticket, your credit card might come to your rescue. Some travel reward cards offer a large number of bonus miles when you first sign up. If you’re able to snag a welcome offer, you may be able to redeem your miles for a higher-tiered fare.

Also, many travel reward cards come with perks like free checked bags on domestic flights that usually incur a fee. So while you might spend a little more on airfare that’s a notch above the basic level, you might offset your higher ticket price by not having to pay to bring your luggage on the plane.

I’m all about being frugal — in life and even in the context of travel. But generally speaking, I don’t think buying the cheapest flight is the best idea. You might end up with extra expenses and a world of aggravation.

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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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CDs might seem like a nice, safe bet for retirement. Read on to see why you might sorely regret using them to build a nest egg. [[{“value”:”

There’s a big reason CDs have been so popular this year. It’s pretty easy to lock in a CD at a rate of 5%, which is a pretty good return on a risk-free investment. All you need to do to not lose money with a CD is stick to an FDIC-insured bank and make sure to limit your deposit to $250,000. (And leave your money in the CD for the entire term.)

Investing in stocks, on the other hand, is a much riskier prospect. You could start out with a portfolio worth $5,000 only to see its value fall to $4,500 within the week. That can be a tough thing to wrap your head around.

But while stocks carry more risk than stocks, banking on CDs to save for your retirement is a pretty risky move in its own right. In fact, relying on CDs to build your retirement nest egg could cost you hundreds of thousands of dollars in the long run.

The difference is staggering

It’s easy to see why you might look to CDs to save for retirement. CD rates are attractive right now. And you might sleep better at night knowing your money is safe. But relying on CDs to build a retirement nest egg could leave you sorely short on funds for your senior years — especially since today’s higher rates aren’t the norm.

Still, let’s say you have $25,000 you have earmarked for retirement. Let’s also imagine you’re able to snag a 5% APY on a CD for the next 30 years, which is pretty unlikely, but we’ll go with it for this hypothetical. In that case, you’re looking at turning that $25,000 into about $108,000.

On the other hand, let’s say you invest that $25,000 in an S&P 500 index fund. There’s a decent chance you’ll snag an average annual 10% return on your money, since that’s consistent with the stock market’s average over the past 50 years. In that case, you’re looking at turning your $25,000 into about $436,000.

When we calculate the difference between $436,000 and $108,000, we get $328,000. To give that number some context, the average baby boomer today has $120,300 in retirement savings, according to Northwestern Mutual.

If you were to stick with CDs in this example, you’d have less than that $120,300 (though interestingly, you’d have pretty much exactly what the average Gen Xer has socked away for retirement today). If you were to go with stocks instead, you’d have close to three-times the savings of the typical baby boomer.

Know when to fall back on CDs

When you’re getting close to retirement, it’s a good idea to pull some of your money out of the stock market and keep it in cash. The logic is that you may need to spend your nest egg within a few years. So you want some of it in cash in case the stock market crashes and it’s a bad time to liquidate investments for income.

Because of this, if you’re within a year or two of retirement, now’s actually a great time to open a CD. But if you’re in your 20s, 30s, 40s, or 50s, and you know retirement is at least seven years away, then you should still be investing heavily in stocks, since you have time to ride out market downturns.

There are plenty of good reasons to open a high-rate CD today, such as if you’re saving for a near-term goal or need a place to park some cash for a shorter period of time while you figure out what to do with it. But for the most part, CDs are not an ideal tool for building retirement wealth. The sooner you realize that, the better equipped you’ll be to avoid an income shortfall.

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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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Poor credit might prevent you from getting a loan. But what about a new job? Read on to find out. [[{“value”:”

The average credit score in the U.S. was 715 in 2023, reports Experian, one of the three major credit bureaus. And that score is considered “good.”

A credit score of 740 to 799 is considered “very good,” while an 800 or above is “exceptional.” (The highest FICO® Score you can get is 850.) A score of 580 to 669, however, is only considered “fair,” while anything below 580 is regarded as “poor.”

If your credit score puts you in the “poor” category, you may have trouble qualifying for a loan, like a mortgage. You may also have difficulty getting approved for a new credit card.

But could poor credit prevent you from getting a job? Believe it or not, in some cases, it might.

It’s legal for employers to do a credit check

It makes sense that poor credit would potentially prevent you from getting a loan or credit card. A lower credit score sends the message that you’re a riskier borrower who may not make payments on time. It’s pretty easy to see why a lender or credit card issuer wouldn’t want to risk not being repaid.

But a job is a different story. With a job, you’re not asking to borrow money. You’re asking to earn money via the work you put in.

Unfortunately, though, it’s perfectly legal for employers in most states to run a credit check on potential employees. And your employer may decide to do this if you’re applying for a job that has you managing accounts or money on a company’s behalf. The logic on an employer’s part may be that if you can’t manage your own debts or finances, you can’t be trusted to manage the company’s. (This isn’t to say that this line of thinking is accurate — it’s merely an explanation as to why some companies do a credit check.)

Now, one thing you should know is that a prospective employer can’t check your actual credit score. But they can see a version of your credit report to get a sense of whether you’re current on your debts and whether you’re overextended financially.

Generally, poor credit comes as a result of having a record of late payments and large credit card balances relative to your total spending limit. So if an employer sees these issues on your credit report, they may decide not to hire you — even if you’re a fantastic employee who merely fell on some hard times in the context of your personal finances.

Check your credit report before applying for jobs

It’s not a given that a company you’re hoping to work for will check your credit in the process of reviewing your application. But it’s best to review your credit report before applying for jobs and address any items of concern you see. For example, if you see that you have a large outstanding credit card balance, you may be able to pay some of it off so you don’t come off as someone who relies heavily on credit to function.

Also, it’s not uncommon for credit reports to contain mistakes. If you review your credit report and spot an error that paints you in a less favorable light, like a delinquent loan payment you actually made on time, you’ll know to work with the credit bureau to correct it and avoid unfavorable consequences.

All told, it may seem unfair that employers can perform credit checks on prospective employees. But since that’s something they’re generally allowed to do, it’s important to review your credit report thoroughly and, if possible, get ahead of any issues that might compromise your ability to get a job.

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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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Opening a CD? Before you get excited about the interest you’ll earn, recognize that you don’t get to keep it all. Here’s what you should know. [[{“value”:”

If you’re thinking about opening a CD in the near future, you’re no doubt in good company. A lot of people are clamoring to open CDs before the Fed starts lowering interest rates. And given that the central bank is next set to meet at the end of July, that could happen fairly soon.

But if you’re going to open a CD, you should be aware that all of the interest you stand to earn comes with a less obvious downside. And it’s something you’ll need to account for.

Don’t get caught owing taxes you can’t pay

Thanks to today’s CD rates, you have the potential to earn a lot of money in interest in the coming months. That’s a good thing in theory. But it could also result in a tax headache.

Not only is interest income taxable, but it’s taxed as ordinary income. It’s subject to the highest marginal tax rate you’re required to pay based on your earnings.

So let’s say you’re in the 24% tax bracket. And let’s say you open a 12-month, $10,000 CD with a 5% APY. That means you’ll earn $500 over the next year, or $250 before the end of 2024 if you put that CD in place by July 1. Here, you’re basically going to lose $60 of that $250 to interest, and you’ll owe that money as part of your 2024 tax bill.

Now $60 in interest may not cause you such a big problem with the IRS. But what if you’re opening a 12-month, $50,000 CD with a 5% APY? That means you’re looking at earning $2,500 in interest over the next year, or $1,250 by the end of 2024.

Again, that’s a good thing in theory. Only if we apply that 24% tax rate, it means the IRS is entitled to $300 of the $1,250 you might collect before 2024 comes to an end. That’s money you should set aside in case you need to pay it to the IRS when you settle your 2024 tax bill in April of 2025.

Consider making estimated payments if you’re earning a lot of money in CDs

If you have a few thousand dollars in CDs or less, then you may not need to do much more than set a little extra cash aside for tax purposes. But if you have a few hundred thousand dollars in CDs, which may be the case for some people, then it could pay to make estimated quarterly payments to the IRS on your interest income. Doing so could help you avoid a penalty for underpaying your taxes.

You may also want to consider other money-making opportunities that don’t deal such a harsh tax blow. Investing in a brokerage account could mean paying less on your earnings because capital gains and dividend payments are generally subject to lower tax rates than interest income.

And if you invest in an IRA, gains in that account are tax-deferred. This means you don’t pay taxes every year on gains — just when you take withdrawals. So if you’re putting money aside for the purpose of funding your retirement, an IRA could be your most tax-efficient bet.

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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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Want to grow your net worth to $1 million or more? Here’s what you need to do to make it happen. [[{“value”:”

As someone who likes to be on top of her finances, I have a pretty good idea of how much money is in my checking account at any given point. Similarly, I’m aware of how much emergency savings I have, and I know what my credit card balances look like.

My net worth, on the other hand, is something I’m a bit clueless about. Sure, I have a basic idea of what that number is. But because there are so many factors that go into calculating net worth, it’s hard for me to get a good handle on it.

In case you’re not familiar with the term or aren’t quite sure what it means, your net worth is the sum of your assets minus your liabilities, or debts. As a basic example, let’s say you own a home worth $500,000 and have $50,000 in your savings account. That means you’ve got $550,000 in assets. If your only debt is a mortgage you owe $400,000 on, your net worth is $150,000.

Recent data from the Federal Reserve puts the average American family’s net worth at $1,063,700. Of course, it’s worth keeping in mind that a small percentage of very high net worth families could be pulling the average up.

The median net worth among American families is just $192,900. And that discrepancy tells us that $192,000 is more indicative of the typical family’s net worth than $1,063,700.

But a net worth of $1 million and change may actually be more attainable than you’d think. Here’s how to get to a number like that.

1. Get into the habit of saving money automatically

Growing your net worth starts with solid financial habits. Spending less than you earn is a core one. Some people make the mistake of collecting their paychecks, paying their bills, seeing what’s left at the end of the month, and then putting money into savings.

A better bet is to automate the savings process so you’re setting money aside for different goals off the bat — before you’ve gotten a chance to spend your paycheck in full. You can automate your savings in different ways, but a few popular options include:

Setting up an automatic transfer from a checking account to a savings accountSigning up for an employer’s 401(k)Arranging for money to go from a checking account to an IRA

2. Invest your money in the stock market

Here’s a little secret — you don’t have to save $1 million and change to end up with that sum of money. If you invest over a long period of time, you can potentially turn a small sum of money into a much larger one.

The stock market’s average annual return over the past 50 years has been 10%, accounting for good years and bad. So let’s say you get into the habit of saving $500 a month, whether for retirement or another goal, and you do so over 31 years. If you invest your savings in stocks and your portfolio delivers that same 10% return, you could end up with $1.09 million and change — a bit more than the average family net worth today.

3. Buy a home — or invest the money you’re not spending on homeownership

Home values have a tendency to rise over time. So buying a home is a great way to grow your net worth. If you purchase a home for $300,000 and its value increases to $750,000 over 30 years, you’ve just gained $450,000 in net worth.

However, don’t stress if homeownership seems unattainable for you, or if it’s just not something you’re interested in. Owning a home costs a lot of money beyond your down payment and mortgage. There’s upkeep, repairs, and property tax bills, just to name a few expenses. Owning a home also requires a lot of actual work on your part — work you may not want to do.

There’s no reason to write off the idea of growing your net worth to $1 million or more just because you don’t own a home. If you take the money you aren’t spending on homeownership expenses and invest it instead, you could come out way ahead financially.

Don’t obsess over your net worth — but set yourself up to grow it

The reason I don’t fixate on my net worth is that it doesn’t necessarily impact my day-to-day spending. For example, I have a lot of my net worth tied up in my home. But since I’m not selling it, that’s not money I can use to pay bills right now.

For this reason, I’d encourage you to focus more on covering your incoming expenses and fixate less on your net worth. But now that you know how to grow yours, you can set yourself up to be worth a lot of money one day down the line.

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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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