Money Management

A VA loan could make it easier to become a homeowner. But read on to see why you need to be careful with these specific loans. [[{“value”:”

In April, the average existing home sold for $407,600, according to the National Association of Realtors. If you intend to make a 20% down payment on a home costing that much to avoid private mortgage insurance, you need to come up with $81,520. That’s not exactly an easy ask.

Many conventional mortgage lenders will let you put down less than 20% on a home. You may be able to get away with only 5% down. For a home listed for $407,600, 5% amounts to $20,380.

But let’s also be real — a lot of people don’t have $20,000 and change in their bank accounts these days, especially given how expensive it’s gotten to live. If only there were a way to buy a home with no money down.

Actually, there is. If you’re a former or current member of the U.S. military, you may be eligible to take out a VA loan. And there’s a unique feature of VA loans — they don’t require a down payment.

You may be eager to buy a home with no money down. And if you can afford the monthly mortgage payments, you might assume there’s nothing wrong with doing so. But buying a home with $0 down could backfire on you.

When circumstances change

On the one hand, it’s nice that VA loans don’t require you to make a down payment. On the other hand, a $0 down payment means you’re starting off homeownership with zero equity in your home.

If home values drop and your financial situation also gets worse at the same time, you could end up at risk of foreclosure due to being underwater on your mortgage. This happens when you can’t sell your home for a high enough price to pay off your mortgage in full.

So let’s say you buy a $300,000 home this month with no money down. If you can afford the monthly payments, you might assume you’re in good shape.

But what if you lose your job in two years, or you’re forced to take an unpaid leave of absence from work and are no longer able to afford your mortgage payments? In that case, if your home is still worth $300,000 or perhaps a little more and you owe a little less than $300,000 on your mortgage, you could conceivably sell it, pay off your lender, and move on.

Where you run into trouble is if home values are down at the time. If your home is only worth $260,000 in two years but you owe roughly $285,000 on it because you’ve only been making payments on your $300,000 mortgage for a couple of years, you’re $25,000 short of being able to pay off your lender.

At that point, you risk getting foreclosed on. Granted, your lender might also agree to a short sale, where you sell your home for what you can get and the lender writes off the remainder of your mortgage balance. But a short sale, like a foreclosure, can stay on your credit report for up to seven years, making it difficult to get approved for other loans during that time.

Consider making a down payment if you can

It can be tempting to buy a home with no money down with a VA loan. But starting off with no equity whatsoever can be bad if housing market conditions decline or your financial situation worsens. Even if you’re interested in signing a VA loan, you may want to put some money down if you can afford to.

Making a down payment doesn’t just help you start off with equity. It could also lead to a lower upfront fee known as a funding fee, which is a cost you bear any time you sign a VA loan.

If you’re signing your first VA loan and make a down payment of less than 5%, you’re charged a funding fee equal to 2.15% of your loan amount. But if you put down 5% to under 10%, that fee drops to 1.5%. And if you put down 10% or more, it goes down to 1.25%. So if you have the money to put down, it could result in nice savings on your loan right off the bat.

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Starting up a business comes with a lot of risk, and funding it with debt makes that risk worse. Try these ideas instead. [[{“value”:”

The go-to advice when you’re talking about funding a new business is some form of debt. Maybe you’re told to pick up a business loan or use your small business credit cards. Either way, you’re going to be talking about interest fees. And even if your business fails, you’ll still typically need to pay back that debt.

If the idea of taking on debt to fund your startup seems too risky, you may be looking for other, perhaps less conventional, ways to get going. Here are a few places to start.

1. Dip into your savings

In an ideal world, you could use cash from your savings account to fund your startup idea. I’m not talking about taking money out of your emergency fund — and definitely leave your IRA out of it. But as long as you have some savings not tied up in those things, it’s perfectly reasonable to use it to get your startup going. (If that money also belongs to a spouse, make sure you’re both in agreement!)

2. Bring on individual investors

If you don’t have enough personal savings to fund your startup, you may be able to find an individual investor who does. In a lot of cases, this will probably be family or friends.

They may effectively donate the money to your cause by insisting it’s a gift. More appropriately, however, you can offer them some portion of your (eventual) profits as recompense, making them actual investors in your new business.

3. Form a partnership

Sometimes, you’ll find an individual investor who wants to be fully involved in the new venture. In this case, you can form a partnership with your new investor and build the business together. Make sure you set out the terms of the partnership in advance if you go this route.

4. Work with an investment firm

I’d argue the goal of many startups is to be interesting enough to garner the attention of a venture capital or investment firm. These are companies that invest in startups and small businesses as its sole purpose. Venture capital firms invest in companies they feel will be profitable, then do their best to make profit happen.

When a big chunk of your money is coming from an investment firm, that becomes the entity your business needs to serve. You can lose a lot of control over your idea if you go this route. However, it can be the simplest way to get a lot of money invested in your startup very quickly.

5. Find an angel investor

Once upon a time, artists and creators occasionally had rich patrons who gave them money to continue their art. Angel investors are a bit like that. Instead of an investment firm coming in with a big check and big demands, an angel investor is often a wealthy individual who rains down money on your company as though from the heavens.

Alright, so it’s not always that beatific. Your angel investor will still require some type of stake in your new business. And, depending on their personal style, they may be just as influential over what happens with the business as a venture capital firm.

6. Apply for a grant, fellowship, or incubator

Startups are, ideologically, intended to disrupt or improve some industry. Not coincidentally, there are a lot of small business and start-up grants and fellowships out there aimed at exactly those types of ideas. Even better, grants and fellowships usually don’t need to be repaid.

How much money you can get will vary significantly. You could get a few hundred bucks from your local government, or you could qualify for a million-dollar prize from a major fellowship. These prizes are generally competitive, however, and you may need to jump through some hoops to apply.

7. Hold a fundraiser or crowdfund

Look, I’m not saying you should fund your startup with a bake sale. But I’m also not not saying it, you know?

Joking aside, fundraisers have been a way for people to fund startups and nonprofits for ages, and it’s still a viable option, depending on the business you’re trying to start. (And if you want to offer baked goods in exchange for folks’ donations, who’s to say you shouldn’t?)

If anything, fundraising may be even easier these days thanks to digital resources making it simple to crowdfund for just about anything. So long as you have a bit of marketing savvy — which you’ll need for your startup in general anyway — you can use sites like Kickstarter and Indiegogo to get your idea out there and find like-minded people willing to donate to your cause.

It takes money to make money

According to Shopify, the average new business spends $40,000 in the first year. Depending on the nature of your startup, you could easily blow past that figure — especially if you’re doing a lot of research and product development.

There are a lot of ways to get that money together. While loans and business credit cards are two of them, I’d try some of these debt-free methods before taking on that extra risk.

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Costco’s return policy is extremely flexible. But read on for some exceptions to that rule. [[{“value”:”

One of the qualities that sets Costco apart from other retailers is that it truly goes out of its way to offer top-tier customer service. Costco maintains an extremely generous return policy that could, in some cases, make it possible to get a full refund even if you’ve been sitting on a given purchase for a solid year.

Costco will even let you bring back half-eaten food if there’s something off with the taste or it goes bad prior to its sell-by date. All you have to do is bring the item back, and if there’s at least 50% left, you can get a full refund.

But there are certain products you might buy from Costco that aren’t so easy to return — or that can’t be returned. Here’s a list of eight you should know about so you don’t accidentally waste your money.

1. Electronics you’ve had for more than 90 days

Most Costco items can be returned to the store at any time. Bought swimsuits in April that your kids never wore? You can return them in November — even though it’s way past the season.

However, Costco only gives you 90 days to return electronics. Items that fall into this category include laptops, TVs, projectors, tablets, cameras, and major appliances.

2. Cigarettes

Smoking can be an expensive habit. If it’s one you choose to uphold, buying cigarettes at Costco could help you save money. But once you walk out the door with cigarettes, you can’t bring them back. If you’re thinking of quitting smoking, you may want to hold off on a huge Costco stock-up.

3. Alcohol

Not every Costco location sells alcohol. But if yours does, you’d better make sure you’ll get good use from your purchases. Costco generally does not allow returns on alcohol.

4. Batteries

Bought batteries at Costco? If you’ve not happy with their performance, you may be eligible for a refund if you bring them back shortly after your purchase. But unlike apparel, you can’t bring batteries back nine months later and expect your money back, since batteries have a limited useful life.

5. Tires

If you buy tires at Costco, you’re eligible for perks that include free rotations, balances, and inflation checks. You also get a five-year road hazard warranty with your tire purchase, and free repairs for flats. However, you can’t actually bring used Costco tires back to the store.

6. Gold bars

Many people will tell you that gold is a great investment, and not so surprisingly, you can buy gold bars at Costco (though there’s usually a limited quantity per member). However, you can’t return gold, so make sure you’ve done your research and are comfortable with your purchase. Unlike shares of stock, gold can be kind of hard to sell once you decide you don’t want it.

7. Gift cards

Costco sells a wide selection of gift cards for other retailers at prices less than face value. But those gift cards are non-refundable, so before you load up, make sure you’ll be able to use them. In a worst-case scenario, you could always go online and swap your gift cards for cash on sites like CardCash, but you might lose a little money in the process.

8. Costco Shop Cards

Costco’s Shop Cards are the store’s version of a gift card. For some reason, Costco will not give you your money back if you buy a Shop Card and decide you don’t want it. But since you can spend that Costco cash on anything, that’s really not a huge deal. If you can’t get refunded for your $50 Shop Card purchase, just use it the next time you need groceries or household essentials.

Any time you shop, whether it’s at Costco or another retailer, it’s important to understand the return policy’s rules. This could help you avoid losing money and getting stuck with purchases that aren’t of good use to you.

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.

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.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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If a vendor refuses to make things right after a sale gone wrong, you’re not out of options. See how turning to your credit card can save you a lot of money. [[{“value”:”

Credit cards can offer a ton of benefits, from cash back earned on purchases to hotel and airline perks when you travel. I have a few credit cards that I rotate between for different categories of spending, and I pay for as many purchases as I can with one of these cards.

I’m careful to pay off my balance each month when my credit card statement comes in, so I never accrue interest on my spending. I get to enjoy the rewards without paying anything extra, other than a small annual fee on a couple of the cards.

Even though I use my credit cards all the time, I still sometimes forget about the other benefits on offer besides earning rewards. But when I was dealing with an expensive problem recently, I was happy I could turn to my card issuer for a solution.

A canceled flight

A couple months back, I was on a fantastic trip to Mexico. The food was a dream, the scenery was amazing, and I was having a wonderful time…except for dealing with the flight cancellation that left me stranded in an airport hotel overnight. So, not quite a perfect trip.

Once I got my vacation back on the rails, I decided to wait until I made it home to deal with contacting the airline for compensation. I didn’t want to waste any more hours of my trip worrying about the problem.

I knew it was going to be a hassle to recoup anything from the airline for several reasons: First, it’s based in Mexico and not the U.S., so Department of Transportation rules regarding what airline passengers are owed during a cancellation weren’t going to apply. Second, I didn’t follow the airline’s procedure when I was in the middle of the cancellation (mainly because I couldn’t get in contact with anyone to tell me the procedure), so it was going to be difficult to argue my case for why I was owed compensation.

After several weeks of long holds on the customer service line and inconsistent messaging from the support contact page, I was fed up. But that’s when I remembered I could turn to my credit card for help.

Filing a dispute

The last straw was when a customer service representative asked me if I was free for a phone call the following day, and then never called. If the airline wasn’t going to help me out, I’d go straight to my card issuer.

I’d purchased the airline tickets two months prior on my travel credit card. I was able to log in to my online account, find the expense in my transaction history, and file a dispute. The automated process asked me a few simple questions, like why I was filing the dispute; it didn’t take much more than a minute to get through it all. I hit “Submit” expecting to hear back within a few days, but ding! Instead of a confirmation page for the submission, I was on a confirmation page for a full refund of the $150 purchase. It couldn’t have been easier, and all of a sudden, the tension rushed out of my shoulders. I wasn’t going to have to deal with the airline anymore!

Lean on your credit card for assistance

I’ve been lucky and have only had to file a dispute two other times, both for purchases I didn’t make when my card information must have been stolen. In each of those instances, I was grateful for the protection my credit card afforded me because I didn’t lose any money to a scammer, and I promptly received new credit cards as a precaution.

Even though this dispute was for a purchase I had made myself, I was still protected, and the process was so simple. I didn’t have to wait on the phone to speak to a representative, I didn’t have to build a case, and I didn’t have to wait any time at all before I saw the money credited back to my card.

If you’re deciding whether to make a purchase on a credit card, particularly a large purchase, consider the perks that come with charging that expense. If you buy a new phone and promptly drop it in a puddle, your card might offer purchase protection to repair or replace it. If you take a trip and the airline loses your luggage, you could be due up to several hundred dollars if your card offers baggage delay insurance.

Hopefully you won’t need to take advantage of a lot of these fringe benefits, but they’re an excellent safety net to have when things go awry. As long as you can pay off the entire bill when it comes due, there’s little reason not to use a credit card.

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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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Instead of buying just one CD and having to choose between the best rate and a longer term, you should consider a CD ladder. Find out why. [[{“value”:”

There’s been a lot of buzz about certificates of deposit lately because their yields are the highest they’ve been in almost two decades.

If you’re tempted by the chance to buy a safe investment paying great rates, you may be looking into what CDs you can buy right now. It can be difficult to choose, though. Should you buy a one-year CD paying about 5%, or lock in a 4% rate for a longer time with a five-year CD?

The good news is that you don’t have to choose. In fact, buying several different CDs is a smart investing strategy.

Here’s why buying multiple CDs makes good sense

Let’s assume you have $2,500 to invest. There are lots of CDs out there with different interest rates and term lengths. You could put your $2,500 into a long-term CD, which would guarantee you get today’s competitive rates for years. Or you could buy a short-term CD so you have access to your money sooner. There’s a tradeoff to be made with either of these approaches, though.

But if you buy five CDs instead of investing in just one, you can build something called a CD ladder. Here’s how a CD ladder would work:

Put $500 into a one-year CDPut $500 into a two-year CDPut $500 into a three-year CDPut $500 into a four-year CDPut $500 into a five-year CD

If you do this, some of your CDs will mature every year, so you’ll have regular access to a portion of your funds. You’ll never have to wait more than a year to be able to take some money out. You’ll also get the benefit of locking in today’s rate for a long time. And, as a bonus, you’ll get to benefit from the higher yields short-term CDs are currently offering while also protecting yourself from rate cuts over the long term.

If this timeline is too long for you, you could take an alternative approach and invest:

$500 in a 3-month CD$500 in a six-month CD$500 in a 10-month CD$500 in a 12-month CD$500 in an 18-month CD

You’d be able to access some of your money every few months, and you’d still earn a great rate on your investment for a whole 18 months.

And with any CD laddering method, you can reinvest the money when each of your CDs mature so you’ll have a steady supply of income coming in from CDs on a set schedule.

Why is it a great time to invest in a CD ladder?

CD laddering is almost always a good strategy because you lock in your rates for the long term while still being able to access your money on a pretty regular basis. But it’s an especially great option right now. That’s because short-term CDs are currently paying higher yields than longer-term CDs.

This is not common. There’s usually a “term premium,” which means you’re paid more for agreeing to lock up your money for a longer period. However, because most experts widely expect interest rates to fall soon, banks don’t want to make long-term promises now. As a result, they’re offering better yields on shorter CD terms.

This means when you build your ladder, you won’t be accepting lower rates on some of the “rungs” just to keep your money accessible. Instead you’ll actually get the highest rates on your most accessible CD investments and lock in rates on long-term CDs that are still very competitive by historical standards.

So if you were thinking of buying one CD, consider splitting up your money and buying five instead. Many CDs have no minimum investment requirement these days, so you can try this technique even without a ton of money.

Check out The Ascent’s guide to the best CD rates to find options with different terms offering the best rates.

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Car insurance premiums cost Americans nearly $3,700 per year on average. Here’s a simple way to shave hundreds of dollars off yours. [[{“value”:”

The average car insurance premium has risen 22.6% over the last year, according to the Bureau of Labor Statistics. That’s enough to bump the average car insurance premium up from $3,017 in 2023 to $3,699 in 2024. Some drivers pay even more.

Things like driving safely and choosing a higher deductible can help keep costs down, but they can only do so much. Fortunately, they’re not the only ways you can save. Here’s another option that could save you up to 15% and only takes a few hours.

Brush up on your safe driving skills

Many of the best car insurance companies offer discounts to drivers who take time to learn more about safe driving. To earn these savings, policyholders need only complete an eligible defensive driving course.

These courses teach drivers about accident avoidance techniques that help them reduce their risk of getting into crashes. Most states offer online and in-person options. Online classes give drivers the freedom to learn on their own time from anywhere, but they’re generally less personalized. Some insurance companies may also not accept online defensive driving courses.

In-person courses often include practice behind the wheel and give participants the option to ask questions of the instructors. Usually, they take place over an afternoon or a weekend. The exact number of hours required depends on the course, but it’s usually between four and 12.

Defensive driving programs usually aren’t free. Online courses can cost up to $40, while in-person courses can be as much as $100. But the savings they could provide make it well worth it.

On average, these courses can save you about 5% to 10% on your auto insurance, though some companies offer savings of up to 15% for those who complete an approved course. Exact savings can vary by state as well as by insurer.

To put this in perspective, a 10% savings would drop the $3,699 average annual car insurance premium to $3,329. That’s a savings of over $30 per month.

How to claim a defensive driving course discount

Drivers interested in scoring cheap car insurance with a defensive driving course discount should first check with their insurance company to learn what its requirements are. Typically, the course must be certified by the state’s Department of Motor Vehicles. Those who have questions about which courses qualify should reach out to their insurer for clarification before signing up.

It’s important to note that while many companies offer discounts for defensive driving courses, some restrict who is eligible for these discounts. For example, some companies only offer defensive driving course discounts to drivers over 50 or under 25. Those who fall in between this range may not be eligible for a discount with their current insurer, even if they complete a qualifying course. However, they might be eligible for a discount with another company.

Once a motorist has found a qualifying course, they’ll need to complete it. This means watching videos through an online course or attending in-person classes. There may also be a test at the end of the course to ensure that participants have retained what they’ve learned.

Drivers who successfully pass their course should notify their insurer at once so it can apply the appropriate discount to their premium. It might also be worth shopping around for new quotes at this time to see if any other companies offer larger savings for having completed the course.

Generally, this discount lasts for three to five years from course completion. But this varies by insurer. That’s another thing worth checking out when pursuing this discount.

It’s a pretty simple way for drivers to save if they have the time and a bit of money to spare. If it’s not feasible right now, keep it in mind for the future. There may come a time where you have a little more free time and enough cash to do 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.
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