Money Management

It’s easy to overlook your business insurance needs. Read on to see a few common mistakes and how to avoid them. [[{“value”:”

Managing a small business is no easy task, and one responsibility that sometimes falls through the cracks is finding the right insurance policy for your business.

As your business changes and grows, new employees are added, or you move locations, making mistakes with your small business insurance is easy. Here are three of the most common pitfalls to avoid.

1. Not having enough coverage

Just like with your home and auto insurance, you need to make sure your business insurance policy is adequate in case something goes wrong. For example, your small business property insurance may cover the replacement of your business’ equipment in case of fire or theft, but it may not cover the replacement of the building and property itself.

Similarly, inadequate liability coverage could mean incurring significant out-of-pocket expenses if someone tries to sue your business. If you don’t have enough insurance to cover the costs, you may have to tap your small business checking account to cover the cost.

A recent Next Insurance survey showed that 29% of small businesses don’t have any small business insurance.

How to avoid it: Talk with your insurance agent to review the details of your insurance policies so you know exactly what out-of-pocket costs you may be responsible for. If you don’t think your small business can afford the extra expenses, get a quote from your agent and consider increasing your coverage.

2. Keeping an old insurance policy

Many small businesses change over time. They add employees to the payroll, move to a new location, buy more equipment, modify their stores, and so on. These can change the type of insurance policy you need, as well as the level of coverage.

You’re not alone if you haven’t updated your policy recently. Nine out of 10 small business owners aren’t confident they have adequate insurance.

How to avoid it: You know that annual email you get from your insurance company informing you about your renewal? Use it as a reminder to think through some of the significant changes to your business over the past year and whether you need to update your policy.

3. Not knowing what your insurance policy covers

A few weeks ago, I was updating some personal files and couldn’t remember if my term life insurance had expired or if I was still covered. After searching through some paperwork, I finally found my policy, which said I still had years left on it.

I was relieved, but this is a good example of how easy it is to not know the details of your insurance policies. Next Insurance noted in its survey that 96% of business owners don’t know the basics about small business insurance.

How to avoid it: Read through your policy and talk with your insurance agent. You don’t have to get into all of the details, but you should at least understand the basics of your coverage and what you could be financially liable for in certain situations.

As a small business owner, you’re responsible for every aspect of your business. It’s not surprising that insurance sometimes falls by the wayside with everything else you’re keeping track of. If you need help knowing where to start, The Ascent’s small business hub is an excellent resource for everything from insurance to small business credit cards.

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Costco’s hot dog food court deal is almost too good to be true. Read on to see why it’s so cheap. [[{“value”:”

Inflation is usually the sort of thing that gradually creeps up on people. For example, you might see the cost of your favorite cereal rise from $4.59 a box one year to $4.67 the next year and $4.75 the year after that.

But since mid-2021, living costs have been rising exponentially, and at such a rapid pace that it’s been extremely noticeable to consumers. In fact, a lot of people are having trouble sticking to their budgets and avoiding debt given how rapidly prices have been climbing.

However, one cost that hasn’t gone up in recent years — or recent decades — is Costco’s hot dog and soda combo. The price of that food court special is a mere $1.50, and it’s been that way since 1985, when the deal was first introduced.

At first, that might seem like a lost revenue opportunity on Costco’s part. But there’s a specific reason why Costco has not raised the price of its hot dog and soda combo, and why it may keep the current price in place for many more years.

It’s all about retaining and attracting customers

If Costco were to adjust the price of its hot dog and soda meal for inflation, it would cost $4.50 today — not $1.50. Costco is well aware of this. But the reason Costco is willing to stick to that $1.50 price point is that its hot dog deal is effectively a marketing tool, not an intended money-maker.

During its last fiscal quarter, Costco made $1.11 billion in membership fee revenue. That’s $84 million more than a year earlier.

Clearly, it makes financial sense for Costco to do what it can to grow its membership base and retain current customers. And a good way to do that is to offer an attractive deal like the $1.50 hot dog and soda combo that’s just too good to pass up.

In fact, it used to be that non-Costco members could access the store’s food court at any time for a quick meal. Now, Costco is changing that practice and limiting food court access to members only. So those who want to continue enjoying their $1.50 hot dog have to pay for a membership, whether it’s a basic one costing $60 a year or an Executive membership for $120.

Should you become a Costco member?

It probably doesn’t make sense to become a Costco member for the $1.50 hot dog alone. But it could make sense to join Costco for the general savings you can enjoy on everything from groceries to household products to apparel.

The really nice thing about Costco is that it stands behind not just its products, but memberships, too. So if you buy a membership you don’t end up liking or using, you can cancel and get a refund.

Because of this, it could pay to join Costco, spend a few months shopping there, and see how much money you’re actually saving. If it’s more than the cost of your membership, you’ll know that keeping it is a no-brainer.

Costco’s goal, like all retailers, is to make money. And its hot dog deal is not a driver of revenue. But it also doesn’t need to be.

As long as Costco can keep collecting membership fees, it can continue to offer the ultra-low prices it’s known for and enjoy a world of success. So think of the $1.50 hot dog and soda deal as a means of Costco saying thank you to customers for all of their business.

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 recommends Maker. The Motley Fool has a disclosure policy.

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A high-yield savings account offers benefits that CDs don’t provide, including the freedom to withdraw your money when you need it. Learn more here. [[{“value”:”

If you’re searching for a safe investment, you may be deciding between a certificate of deposit (CD) and a high-yield savings account. Both are FDIC-insured and each rewards you with interest for keeping your money in the account. Most checking accounts don’t do this.

There are some important differences between CDs and savings accounts, though. And understanding these differences can help you to decide which account is best.

Right now, for many people, that may be a high-yield savings account. Here are three reasons why that’s the case.

1. You have more access to your funds

With a savings account, you’re pretty much free to take out your money whenever you want. Some accounts limit you to six convenient withdrawals a month, but that’s not a big challenge to work around. You may even receive an ATM card so you can withdraw your money whenever you want, although not all savings accounts offer one.

With a CD, though, you aren’t supposed to just take out your money when you need it. Instead, when you buy a CD, you decide on a term like three, six, or 12 months — or even as long as five years. If you withdraw your money before the term is up, you’re penalized. The penalties vary, but can add up to several months of interest charges.

Since you can’t just access your money whenever you want with a CD, you have to be careful about what funds you use to buy one. You shouldn’t ever open a CD if you don’t know for sure you can remain invested until it matures.

2. Savings account rates could stay high for a while

Savings accounts have variable rates. This means the interest rate your account pays can change over time, usually moving in concert with benchmark interest rates. If interest rates rise, then your bank is likely to increase the rate it’s paying you. On the flip side, a decline in interest rates means your yields will likely fall.

CD rates are different because you’re locked in for the term of the CD. This can be a good thing if, say, you buy a CD right now with rates above 5.00% and rates fall before your CD matures. You’ll be guaranteed to keep earning your current high rate. But if rates go up, then you’re still locked in and won’t benefit.

The ability to keep your guaranteed rate is normally a reason to choose a CD over a savings account; it gives you more certainty. But since inflation is above the Federal Reserve’s target (2%) right now, all evidence points to the fact that the Fed isn’t likely to lower the federal funds rate for a while. This means your savings account is probably going to keep paying impressive yields for the foreseeable future.

If you feel confident your savings account rate isn’t going to decline soon, it makes a lot more sense to just keep your funds in savings where you can earn that high rate and still have your cash accessible. It’s not worth buying a CD just to get the guaranteed rate.

3. You may actually be able to get a better rate on a savings account than on a CD

Finally, it can make sense to keep your money in savings rather than a CD right now because savings account yields are actually higher than those offered by CDs in many cases.

This is usually not the case. CDs usually pay higher rates in exchange for locking up your money. But in this unusual economic environment, banks are more willing to offer high rates on variable rate accounts than to commit to keeping your rate high for the full duration of a CD term.

That’s why on The Ascent’s list of the best savings accounts, you can find accounts offering yields as high as 5.36% as of April 2024. By contrast, the best CD rates come in at 5.15%. Since you don’t need to lock up your money in a CD to get the best rates, there’s less reason to do it.

Putting your money in savings just makes sense

So, to sum it up:

Savings accounts are paying higher rates than CDs right now.You’re likely to keep those rates for a while.Savings accounts keep your money more accessible.

If you can get a better rate, keep it for a while, and have reliable access to your money, choosing a savings account over a CD is an easy call. You can even find savings accounts offering new customer sign-up bonuses right now to make the deal even sweeter.

Check them out, open an account today, and keep your money in savings where you’ll earn a great rate and can use your money 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.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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Parenting children can be an expensive prospect. Read on for ways to save. [[{“value”:”

When I became a mom, I knew I’d be taking on not just the logistical and mental task of raising kids, but the financial challenge as well. The most recent USDA data on raising children puts the cost at $233,610 through age 17. But that’s based on 2015 expenditures and a report released in 2017. Based on recent inflation trends, it’s fair to say that the actual cost of raising kids is significantly higher these days.

That’s why, as a mom, I’m constantly looking for ways to save money on our household expenses. Here are some tactics that have worked for me through the years — and they may work well for you, too.

1. Buy groceries and household products in bulk

When you’re feeding a small crowd and have certain products you use regularly, it often pays to buy them in bulk. My go-to source for bulk purchases is Costco. I find that the prices there are low enough to make up for my $120 annual Executive membership fee (you can also spend half that much on a basic membership instead).

However, you don’t have to join a warehouse club to enjoy savings on bulk items. Just look around your local supermarket and you’re likely to find certain items in larger quantities. And stores like Target and Walmart commonly offer things like personal care products, groceries, and cleaning supplies in bulk, too.

2. Maximize credit card rewards

Swiping credit cards when I shop doesn’t always save me money right away, since it’s not like you get a discount for using a credit card (if anything, some merchants now impose a surcharge for using a credit card, and that’s something to always look out for). But over time, using the right credit cards puts cash back in my pocket, which is a form of savings.

I maintain a running list of which credit cards I should use for which purpose. One card of mine, for example, gives me extra cash back on gas, so I use that one every time I fill up. A different card in my wallet has a better cash back rate on travel expenses.

Your credit cards might also have revolving categories for bonus reward points. Pay attention to what those look like to maximize your benefits.

3. Buy kids’ clothing secondhand, or get hand-me-downs

I got into the habit of buying secondhand clothing and asking for hand-me-downs when my children were pretty young. And through the years, I’ve saved thousands of dollars by not insisting that every item my kids wear be new or fancy.

These days, my children are a bit older, so I’m willing to invest in newer, higher-quality items. For example, last year, I bought my twin daughters winter coats that were more expensive than what I’d normally spend because they were super warm and seemed high quality. And lo and behold, they wore those coats not just last winter, but this past winter as well.

It’s OK to spend more on clothing when your kids’ sizes are more stable. But during the infant and toddler years especially, you may want to stick to secondhand items since your children are likely to outgrow their clothes in the blink of an eye.

It’s not easy being a mom, and it’s certainly not easy coming up with the money to raise children. But these tips may result in some savings for you — and a lot less financial stress.

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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 positions in Target. The Motley Fool has positions in and recommends Costco Wholesale, Target, and Walmart. The Motley Fool has a disclosure policy.

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A CD ladder is a great way to maximize your CD yields while keeping your money accessible. But how much money do you need to create one? Find out here. [[{“value”:”

A CD ladder allows you to take advantage of the high yields that certificates of deposit (CDs) are currently offering while still keeping your money pretty accessible. But is CD laddering a good strategy for you, given your current financial situation and how much money you can afford to invest?

Here’s what you need to know.

How to build a CD ladder

Building a CD ladder involves buying multiple CDs that mature at different times. For example, you might buy a 1-year CD, 2-year CD, 3-year CD, 4-year CD, and a 5-year CD. Or you might buy a 3-month CD, 6-month CD, 10-month CD, and 12-month CD.

When you buy CDs with different term lengths, you’ll regularly have one maturing so you’ll have more access to your funds if you need it. You’ll also hedge your bets on whether interest rates will go up or down, since you’ll have some short-term investments and some longer-term ones.

Of course, buying multiple CDs is going to require money, but perhaps not as much as you’d think. Many banks don’t have minimum investment requirements to buy a certificate of deposit.

How much do you need to build your CD ladder?

Generally, when you build a CD ladder, you put the same amount of money in each of the CDs. And while your ladder can have as many “rungs” or different CDs as you want, it usually makes sense to have at least three to five to diversify your holdings and benefit the most from this strategy.

Theoretically, you could do this with $50 or even $100. You could put $10 or $20 into five different CDs that mature on your set schedule. And if that’s all you have, then it can still be worth doing to take advantage of the great rates available today and help you get started with this investing strategy.

However, if you want the broadest access to certificates of deposit at the best rates, then you’d usually want to aim to have a little bit more money to invest so you’ll have more choice as to what to invest in.

While it’s possible to find options with no minimum balance requirements, you’ll definitely have more choices (and sometimes better choices) if you can deposit at least $500. If you decided on that amount, you’d need $2,500 to build a ladder with five different CDs.

Be careful about tying up too much cash

You don’t want to put money into any CD if you aren’t confident that you can keep the funds invested for the duration of the CD term. So if you only have $100 or $500 that you are confident you can lock up, you shouldn’t stretch to find more cash only to risk ending up with a penalty for an early withdrawal.

Now, the good thing about a CD ladder is that you’ll have CDs regularly maturing at different times. That makes it a little easier to find funds that you can use compared with just buying, say, a 5-year CD and knowing you couldn’t touch any of those funds for half a decade.

Ultimately, building a CD ladder is a great way to capitalize on today’s high rates and give yourself some flexibility. Even if you don’t have a ton of money, it can still be worth using this strategy. But being able to invest at least $500 in each of the CDs you buy is a good goal to shoot for to make sure you have a broad choice of CDs at different term lengths paying great rates.

Once you’ve decided how much you can invest, check out The Motley Fool’s Ascent’s guide to the best CD rates to find the CDs that could help you build a CD ladder.

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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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