Money Management

The cheapest cars to repair in America may come as some surprise, but the brands are certainly all names you know. Read on to learn more. [[{“value”:”

Owning a car is a bit like owning a horse or a very clumsy Roomba — you’ll need to spend money on it from time to time, and some are more expensive than others. Cars can be pricey to repair, so much so that sometimes the best move is to just trade for a new one.

But with the price of new cars today, more people are keeping their cars longer. The average age of cars on the road is at an all-time high of 12.6 years for all vehicles — 14.0 years for cars, and 11.9 years for light trucks. This also means paying for a lot more care for those cars as they get older and older.

So which car is the cheapest to keep and repair over its (hopefully long) life? We take a look at the data to find an answer.

First question: Cheapest how?

There are a couple of different metrics that cars are measured by for long-term expenses. There’s the 1-to-5-year cost, as well as the 6-to-10-year cost. Depending on how quickly you swap vehicles, either of these numbers may be important to you. Or you may be like me and wish there was another metric for cars that are inching their way to 20 years old.

Interestingly enough, a car that’s cheapest to keep going in its first five years might not be cheapest over 10 or more years of ownership. This might be due to an increasing difficulty finding parts, or simply having more expensive parts that wear out after the five-year mark. A great example of this is an average Lincoln vehicle, which only has a $940 cost for the first five years of its life, but more than makes up for that in the second five years of the decade.

By brand, though, this is what you can expect from the top 10 most affordable automobile makers, per Consumer Reports:

These figures, of course, don’t include the cost of car insurance, gasoline, or any payments you’re making. This is just the cost of maintenance and repairs over the first 10 years.

Cost to repair by car model

If you have your eye on a car already, you may want to know what it’s going to cost to maintain during your ownership. When I bought my current car, a 2007 Chevrolet HHR, 16,000 years ago (or so it feels), that was a huge question I had. Fortunately, this has turned out to be a car that has frighteningly low needs. But it’s certainly not the only one.

If your primary concern is the overall cost of long-term maintenance, give these models a go (information from Autolist):

To repair or replace, that is the question

Cars can be expensive to maintain, repair, and feed. And even with the cheapest car insurance, they can end up costing you a small fortune over a lifetime. That being said, with the average new car price in January 2024 of $47,401, according to Kelley Blue Book, it will still often make more sense to hold on to your aging machine, even if repairs get more costly.

Before you look at a replacement vehicle, weigh what it will cost to not only buy it — considering how much higher interest rates are now than they were just a few years ago — but also to own it, including routine and not-so-routine maintenance. If you own an average, everyday car, it may make the most sense to just keep it as long as you can.

For example, if you bought an average-priced car in 2019 using a 60-month auto loan, you may have paid about $36,820 at about 4.6% interest — and had a payment of about $688. In January 2024, that average new car was $47,401 at 7.75%. With a 60-month auto loan, an average new car today costs $955 per month. That extra $267 per month, or $3,204 yearly, can make a lot of repairs to an older vehicle, especially if you choose a car that’s cheap to repair. As you can see, it could be worth keeping an older car for the benefit of your bottom 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.Kristi Waterworth has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

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CD rates are fantastic right now. Read on to see why they may not hold steady. [[{“value”:”

I’m a firm believer that money you’re not using right away should be put to work. Why let it waste away in a checking account earning nothing when you could invest your money instead?

But let’s be real — not everyone has the stomach for investing. And if you’re looking to earn a nice return on your money to meet a goal that’s five years away or less, then investing isn’t even a great option, because that’s not enough time to ride out stock market downturns.

That’s why I happen to be a big fan of CDs right now. With rates sitting at or even slightly above 5.00%, it’s hard to pass up the opportunity to score a risk-free return that high.

But 5.00% CDs aren’t going to stick around forever. And today’s CD rates may start to shrink sooner than expected.

I’d highly recommend acting soon if you want to score a great rate on your money. You may even want to open your next CD as soon as today.

Why it pays to open a CD soon

The reason CD rates are so high these days is because the Federal Reserve raised interest rates numerous times in 2022 and 2023 as part of its inflation-slowing efforts. But since inflation isn’t as problematic as it was a couple of years ago, the Fed is ready to reverse course and start cutting interest rates.

Now, we don’t know exactly when the Fed’s first rate cut will be. But the central bank is set to meet on June 11-12. If it decides to introduce its first rate cut in June, CD rates might fall shortly after.

This doesn’t mean that top CD rates will fall from 5.00%, where they are today, to 3.50% overnight. But let’s say they only fall by 25 basis points (0.25%). Would you rather lock in a 5.00% CD, or one at 4.75%?

Believe it or not, waiting a few extra weeks to open your next CD could spell that very difference. That’s why I’d say that if you have the money available today, strongly consider locking in a CD today. Waiting means taking a risk.

What CD term is right for you?

If you want the absolute highest CD rate today, then you’ll probably find that most banks are offering the best rate for 12-month terms and smaller. But a longer-term CD could make more financial sense if it aligns with your goals.

As an example, right now, one bank is offering 12-month CDs at 5.00% and 36-month CDs at 4.00%. Clearly, you’ll make more money your first year with the 12-month term. But if you think you might end up keeping money in a CD for three years, then you may want a 36-month CD from the start.

If you deposit $10,000 into a 36-month CD at 4.00% APY, you’ll make $1,249 in three years. With a 12-month CD at 5.00% APY, you’ll make $500 your first year. After that, who knows?

If 12-month CD rates fall to 3.75% after a year, you’ll earn about $394 your second year of opening a 12-month CD. If rates fall to 2.75% the next year, you’ll earn about $300. All told, that’s a total of $1,194 in interest — less than the $1,249 you can get by choosing a 36-month CD from the start.

That said, it’s not always easy to see into the future and commit to a longer-term CD. So if that doesn’t work for you, there’s nothing wrong with sticking to a 12-month term. But open that CD now so you don’t miss out on 5.00% APYs while they’re still available.

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Love Costco’s food court? Some items may be worth the money more so than others. Keep reading for all the details. [[{“value”:”

One of the best parts of shopping at Costco is getting to visit the food court on the way out. And after spending an hour pushing a heavy, overloaded shopping cart around the store, you deserve a quick, easy meal to make up for all the calories you burned navigating your local warehouse club.

But some of Costco’s food court offerings are better deals than others. Here are the top and bottom three.

The winners

Some of Costco’s food court offerings are truly outstanding for the price point. Here are the top three.

1. The $1.50 hot dog and soda combo

These days, you’ll be hard-pressed to find a meal for as low a price point of $1.50. To be clear, Costco isn’t making money off of its hot dog deal. Rather, that ultra-low price is a gimmick to get customers in the door and ensure that they maintain their memberships.

But if you’re shopping at Costco and suddenly find your stomach rumbling, this is one meal you can buy on a whim without guilt. It’s hard to make a meal that’s comparable in size in your own kitchen for less money.

2. The pizza

Whether it’s a large slice for $1.99 or a whole gigantic pie for $9.95, if you happen to enjoy Costco pizza, then this is one of the better deals you’ll find at the food court. Not only do you get a lot of slice for your buck, but you won’t be charged extra for pepperoni. Best of all, you can call in a whole pizza order ahead of a shopping trip and pick up a piping hot pie on your way out the door.

3. The chicken bake

Costco’s chicken bake is a gooey, cheesy mix of chicken and bacon in a thick, chewy dough. While its $3.99 price point makes it more expensive than a slice of pizza, it’s way more filling. It’s the sort of meal you could easily eat half of and save the remainder for lunch the following day.

The losers

Some of Costco’s food court specials aren’t as tempting or worth the price point as the items above. Here are three that don’t scream “bargain” like the items above.

1. The chocolate chip cookie

If you’re familiar with the chocolate chip cookies in the Costco bakery section, then you should know that the food court offering is basically an oversized version of one of those. The nice thing is that the food court serves its giant cookie warm, so you get the gooey, melty chocolate chip experience a lot of people love.

But the cookie is also incredibly sweet, and you might struggle to finish it by yourself. Also, the $2.50 price isn’t that great because ultimately, you’re getting a snack, not a meal. And since you can buy 24 chocolate chip cookies from the bakery for under $10, shelling out $2.50 for a single cookie doesn’t seem to make financial sense, even if it’s larger in size.

2. The turkey swiss sandwich

It’s not the taste of Costco’s turkey swiss sandwich that’s landed it on this part of the list. It’s that the $6.99 price point doesn’t seem consistent with most of the store’s food court offerings.

Also, it’s not a particularly unique concept. It’s turkey, cheese, and some lettuce on a roll with some spreads for extra flavor. You can save money by making your own version at home, and it’s really not such hard work.

3. The rotisserie chicken Caesar salad

This is perhaps one of Costco’s healthier food court offerings. It’s a salad loaded with lettuce, Parmesan cheese, classic Caesar dressing, and rotisserie chicken breast.

But for $6.99, the price doesn’t seem to add up. Why buy a single serving of salad when you could buy an entire rotisserie chicken for $4.99 and a giant, freshly made Caesar salad for roughly $10 that, when combined, you can easily get four meals out of? Also, if you don’t like the taste of Costco’s rotisserie chicken, you may not like it all that much more in salad form.

Ultimately, it’s up to you to form your own opinion on Costco’s food court offerings. But you should know that some items are a better deal financially than others.

You should also know that Costco has begun cracking down on food court access, so that it’s available to members only. But if you’re a paying member, that could be a good thing, as it may mean shorter lines.

You probably don’t want to join Costco for the food court access alone. But it’s definitely a nice perk that comes with a paid membership.

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.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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Not all CDs work exactly the same way. Read on to see what detail you need to pay attention to before choosing one. [[{“value”:”

Since CD rates are still sitting at above 5%, it’s a great time to put money into one if you have it to spare. And it doesn’t have to be a ton of money, either. Some CDs have a pretty low minimum requirement, like $500, while many have no minimum at all.

When you’re looking for a CD, it’s important to shop around and compare rates across different banks. Why accept 5.05% on your money when another bank might give you 5.10%?

But there’s a lesser-known detail to consider when comparing CD offers. And it’s one you should pay close attention to before you open your next CD.

Dig deeper into how often interest compounds

Compounding is an important financial concept you’re probably familiar with to some degree. It’s the idea of earning interest on top of interest, and it’s a huge factor in building wealth over time.

Let’s say you put $100 into a savings account, and after a year, you’re up $4 in interest earnings. The following year, you can earn interest on $104 instead of just $100. And so forth.

But CDs can differ in how frequently interest is compounded. Some CDs might compound interest every month. Others might do it every quarter. It’s important to have that information, because the more often interest is compounded, the more interest you should be able to earn.

For example, at Capital One, interest on CDs is compounded and credited monthly. So if you open a $1,000 CD there, your first month, you’ll only earn interest on $1,000 — your initial deposit. Your second month, you’ll earn interest on $1,000 plus whatever interest you earned that first month.

To illustrate why the frequency of compounding makes a difference, let’s say you open a 12-month, $10,000 CD at 5%. Here’s the amount of interest you’d earn in the course of a year, based on the frequency at which interest is compounded.

A detail you don’t want to overlook

For most people, the main goal in opening a CD is to earn as much interest as possible. If you didn’t care about interest as much and just needed a home for your money, you’d probably pick a savings account because there’s more flexibility to withdraw your cash.

Because of this, make sure to check how often interest compounds in a given CD before opening one. You can find this information in your CD’s disclosures section, which also gives you details on what sort of penalty you’re looking at for an early withdrawal.

Another trick? Make sure to look at your CD’s APY on top of its interest rate. APY tells a more complete story than interest rates alone, because it reflects the impact of compounding on your earnings.

Of course, one factor to keep in mind is that you may earn more interest in a CD with a higher interest rate and less frequent compounding than one with a lower rate and more frequent compounding. So it’s best to use a tool like the one used for the table above to figure out how much interest you’d earn in total.

However, if you find two CDs paying the same interest rate but one compounds more frequently than the other, then you’ll know to choose the one with the higher APY.

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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’ll often hear that it’s best to grow your savings as much as possible. But is there such a thing as having too much cash in the bank? Read on to find out. [[{“value”:”

When it comes to having money in a savings account, you’d think “more” would equal “better,” right? In other words, it’s better to have $20,000 in savings than $10,000, and it’s better to have $10,000 than $1,000.

That logic holds true up to a point. And depending on your situation, $50,000 in savings may be well beyond that point.

Do you need to keep $50,000 in cash?

Savings accounts are great in that they pay you interest without forcing you to take on the risk of investing money in stocks or other assets that could lose value. And at times, the amount of interest they pay can be generous — like right now, when many high-yield savings accounts are paying upward of 4%.

But there can come a point when you have too much cash in savings. And $50,000 may be excessive, depending on your situation.

Or, it may not be.

See, it’s important to have enough money in an emergency fund to cover three to six months of essential bills. And a savings account is the best place for an emergency fund. But if you’re aiming for a five-month emergency fund and your essential bills come to $10,000 per month, then you’re right on track with a $50,000 balance.

Similarly, a savings account is a great place to put money you’re stashing away for a near-term goal. Let’s say you want to put in a pool this year, and you’ve been quoted a price of $60,000. You have $50,000 now, so you need to save up another $10,000. In that scenario, you’re doing the right thing by keeping your $50,000 in savings while you work to come up with the remainder.

However, if you don’t need $50,000 in emergency savings, and you’re not saving for a near-term goal, then that sum of money may be too much to be keeping in the bank. In fact, sticking with a savings account could cause you to lose out on massive gains over time.

You may want to turn to stocks instead

Let’s say you have $50,000 in savings now, but you only need $15,000 of that for emergency fund purposes and you don’t have another specific expense you’re saving for. If so, you’re losing out on the chance to earn a lot more on your remaining $35,000.

Let’s imagine you can snag a 4% interest rate on that $35,000 for the next 10 years, even though that’s unlikely since rates are expected to fall. That would mean growing your $35,000 to about $52,000.

Meanwhile, the stock market’s average annual return over the past 50 years has been 10%. If you were to invest $35,000 at that same return, in 10 years, you’d be looking at almost $91,000. That’s a difference of $39,000.

It’s for this reason that yes, $50,000 may be too much money to keep in a savings account for you. But it’ll depend on your circumstances.

In general, aim to use your savings account for your emergency fund and near-term goals. Put the rest of your money into the stock market, so you’re able to do a lot more with it in time.

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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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There’s a correlation between average income and credit score. Here’s a look at the average high-income American’s credit score and how you can improve yours. [[{“value”:”

Credit scores and wealth might seem unrelated, but the two often go hand in hand. A credit score is a measure of how well a person manages borrowed money. Those who pay their debts back on time and borrow small amounts in relation to their annual income typically have the highest credit scores.

Those with larger incomes tend to have the easiest time meeting this criteria. Below, we’ll take a look at what the average credit score is for high-income Americans and what steps you can take to raise yours.

What’s the average credit score among high-income Americans?

High-income Americans have a median credit score of 774, according to the Federal Reserve Bank of New York Consumer Credit Panel. This is 60 points higher than the national average credit score of 714.

It puts the typical high earner in the “very good” credit score range. Here’s a closer look at the ranges for FICO® Scores — the most popular credit scoring model used today.

A 774 credit score opens the door to lower rates on loans, which can come in handy in high rate environments like the one we find ourselves in now. It can also unlock better credit cards with bigger perks.

As I mentioned above, high earners tend to have an easier time achieving a high credit score. But people of all income levels can achieve very good or exceptional scores themselves by following a few principles.

How to boost your credit score

To boost your credit score, it helps to understand the five factors that affect your score.

Payment history

Payment history is the most crucial factor in your credit score. Paying bills on time is the most important thing you can do to raise your credit score. If you have a loan or a credit card, you can start with these. Otherwise, a secured credit card might be a good place to begin.

If you have trouble remembering to pay your bills, setting up automatic payments might help. If you lack the funds to pay your bills consistently, reach out to your lender to see if there’s anything it can do for you.

Credit utilization ratio

Your credit utilization ratio is the ratio between the amount of credit you use and the amount available to you. For example, if your credit card has a $10,000 limit and you charge $2,000 to it one month, your credit utilization ratio is 20% for that month.

Ideally, you want to keep your credit utilization ratio under 30% whenever possible. You can do this by charging less to your credit cards or by paying your bill off twice per month. This works because lenders usually report your balance to the credit bureaus once per billing cycle.

Account age

Having a longer history of managing borrowed money raises your credit score. This is why it’s generally not a good idea to close old credit cards even if you don’t use them. The exception is cards that charge an annual fee you’re not recouping in benefits each year. For example, if you have a travel credit card with a $100 annual fee and you’re not earning at least $100 in rewards annually, it makes sense to close it.

Credit mix

Credit mix refers to the types of credit you have experience using. There are two: installment loans, like mortgages, and revolving debt, like credit cards. Having experience with both types of credit can boost your score. But this is such a small factor that it’s not worth it for most to take out an installment loan they don’t need just to increase their credit mix.

New credit history

Your recent credit behavior has a larger effect on your credit score than your old credit behavior. However, all your credit activity from the past seven years will affect your score to some degree. Some severe infractions, like bankruptcies, can affect your credit for a decade.

Improving your credit score takes time, but it’s worth the effort you put into it. Even if you never achieve the 774 average score of high-income Americans, you can still significantly improve your access to financial products like loans and credit cards by getting yourself in the good or very good range.

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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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