Money Management

Thinking of replacing your current mortgage with a new one? Read on to see why that may not be the best idea right now. [[{“value”:”

The average mortgage rate as of this writing is 7.1%, according to Freddie Mac. And generally speaking, refinance rates tend to be a notch higher than purchase mortgage rates.

Because of this, now is generally not a great time to refinance a mortgage. However, you may be eager to swap your existing mortgage for a brand new one if your current mortgage rate is higher than the average rate today. Or, you may want to refinance not to lower your rate, but rather, to tap your home equity via a cash-out refinance for expenses like renovations or repairs.

Either way, you should know that refinancing a mortgage may not be the best idea right now. Here are a couple of reasons why you might regret a spring refinance.

1. You might lose out on a lower rate by not waiting for rate cuts

The Federal Reserve spent much of 2022 and 2023 raising interest rates to help slow the pace of inflation. Now, the Fed has signaled that it’s looking to cut interest rates in 2024. And while that may not happen until much later in the year, if you can sit tight a few more months and wait until the third or fourth quarter of 2024, you may find that you’re able to snag a lower interest rate on a refinance than you can get now.

To be clear, the Fed is not tasked with setting mortgage rates. However, when the Fed lowers its benchmark interest rate, the cost of borrowing tends to decline on a whole, and that extends to the cost of signing a mortgage. So if the Fed implements a rate cut or two later this year, it could lead to a more favorable refinance rate for you.

2. You might get stuck with a higher rate if you haven’t finished paying down your holiday debt

Many people routinely end up with debt during the holidays. If you racked up a credit card balance this past December and are still trying to pay it off, you may be dealing with a lower credit score as a result of your credit utilization ratio being higher than 30%. And the lower your credit score, the higher an interest rate you might get on a mortgage refinance.

Also, if you’re still carrying a pretty hefty credit card balance from the holidays, you may have a debt-to-income ratio that’s high enough to make lenders nervous. That ratio measures how much total debt you have relative to your income. On the other hand, if you spend the next few months working a side hustle and cutting your discretionary spending to pay down some or all of your credit card debt from the holidays, you may end up in a much better position to snag a more competitive interest rate on a mortgage refinance.

All told, borrowing conditions across the board aren’t great now, and that extends to signing a mortgage. So unless you have a really pressing reason to refinance your home loan this spring, you may want to hold off until later in the year — or, if possible, beyond.

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Drivers have been comparing their auto insurance options this year. Check out the top reasons to shop for auto insurance to see if you should do the same. [[{“value”:”

If you’ve been thinking about shopping for auto insurance, join the club. Consumers have been doing this at record rates, according to the J.D. Power Quarterly Shopping LIST Report. It reports that 13.5% of consumers shopped for auto insurance in March, up from 12.1% in January.

Drivers look for auto insurance for a variety of reasons. J.D. Power also tracks the most popular reasons and the share of consumers shopping for each one. Below, you’ll find the top five for the first quarter of this year.

1. My rate was too high (21.3%)

Auto insurance rates have been rising. In 2023, they increased a whopping 20.2% over the prior year. So it comes as no surprise that high rates are the most popular reason people shop for auto insurance.

If your premiums are giving you sticker shock, shop around to compare your options. You may want to start by getting quotes from the top car insurance companies. Or you can use a car insurance comparison tool — you plug in your information and receive quotes from various carriers.

2. Just browsing rates (17.1%)

Some drivers are just looking. Way back at the start of 2022, this used to be the most common motivation for auto insurance shopping. Nearly one-quarter (24.8%) said they were shopping for this reason. But as premiums have gone up, the share of drivers passively shopping around has gone down.

Still, even if you’re satisfied with your current car insurance policy, it’s good to get into the habit of rate shopping at least once a year. You won’t know if there’s a better deal out there unless you look. Car insurance companies are also known for price optimization, a practice that involves charging higher rates to drivers who aren’t expected to shop around.

3. My rate recently increased, not claim-related (14.6%)

A rate increase can be more than enough motivation to start shopping around, especially when it’s not because of anything you did. If your carrier recently bumped up your premiums, consider rate shopping to see if there are any cheap car insurance companies that will charge you less. Another option is to see if your carrier has any auto insurance discounts you qualify for.

4. I bought/am planning to buy a new vehicle (12.6%)

Auto insurance companies determine your rates based on many factors, but one of the most important is the vehicle you drive. But every company has its own method for calculating rates. This also means that when you get a new car, your current insurance company might not be the right option anymore.

5. I received a renewal notice (7.7%)

Finally, some consumers decide to shop for auto insurance when they get their renewal notice. Policies usually renew every six or 12 months, depending on the insurance company, so this can work well as a reminder to shop around for new coverage.

When to go shopping for car insurance

As you can see, there are plenty of reasons to shop for car insurance. Some think their current policy has gotten too expensive. Others just want to see what’s out there, or they were prompted by a new car purchase or an insurance renewal notice.

Here are a few signs you should check out your options for car insurance:

Your rates are too expensive and the bills are affecting the rest of your finances.Your car insurance company has been steadily raising your rates.You’ve had a life event that could affect your insurance, such as a move, a new car, or an accident.

Even if none of those is true, remember that it never hurts to shop around. In fact, it’s better if you do, since drivers who don’t often get charged higher rates. It doesn’t take long, so make sure to do it every six months to a year.

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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 can be a great investment only in some circumstances. Read on to learn when to avoid CDs. [[{“value”:”

If you open a CD right now, you could easily earn above 5.00% APY. But while that’s a pretty impressive rate for a risk-free investment, and it’s a guaranteed rate for the duration of the CD term, CDs aren’t a good idea for everyone.

Here’s why a certificate of deposit might not be a great investment for many, or even most, people — despite the competitive yields currently on offer.

CDs only make sense in very specific situations

Opening a CD makes sense if, and only if:

You can tie up your money without issue for the duration of the CD termYou don’t want to commit to keeping your money invested for around five years or more

CDs typically have term lengths that range from three months to five years. If you take money out early, you face a hefty penalty. It doesn’t make sense to open one if you won’t be able to leave your money in until the CD matures.

It also doesn’t make sense if you can leave your money invested for five years or more. That’s because if your time horizon spans at least five years, you’re better off putting your money into an S&P 500 index fund.

The S&P has historically earned 10% average annual returns (around double even the best CD rates available now) and a five-year time horizon is long enough that you’re likely to make money, even if you happen to invest at a bad time.

A five-year time horizon is long enough to wait out a potential market crash. Ideally, you’d stay invested through a recovery and make a profit, even if you have poor timing when you buy shares of an S&P 500 fund. There’s a risk of loss, but it’s pretty small, and the higher returns justify taking it.

CDs aren’t a fit for most people — but there are other options

Because CDs only make sense in the limited situations mentioned above, they’re not a good fit for most people. That’s because most of us don’t really have a lot of savings that we can lock up for exactly three months to five years exactly.

If you have emergency savings, you have to keep it accessible, so a CD won’t work. The same is true if you’re saving for expenses like car repairs or home repairs. And if you have major long-term goals like retirement or college savings for your kids, CDs don’t make sense for this either.

Now, if you’re saving for a house or a car you’ll be buying in a few years, a CD might be a good option — if you won’t need to make an offer sooner or access funds sooner if your current car calls it quits earlier than expected. In these situations, you’re also usually saving little bits of money over time. Unless you’re opening a CD every couple of months, it may not make sense even in this situation.

If you don’t happen to have any medium-term goals that make a CD a good investment, here’s what to do instead:

Put money you may need soon into a high-yield savings account. The Ascent has a list of close to a dozen savings accounts that pay 4.00%-5.00% APY right now. Most require low or no minimum opening balances, so open one today.Put money you won’t need for a while into a brokerage account and buy an S&P 500 ETF. Check out the best brokerage firms for ETFs to pick one. You can open your account online and use the ETF screener it offers to find a fund to invest in.

These options make better sense than a CD, even with today’s high rates. Now, if you do have money you won’t touch for three months to five years, The Ascent has a guide to the best CD rates that will help you find one that’s a fit. So, you can check that out, too — if a CD will actually work for you.

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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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Don’t like throwing money away? Then make sure you’re not overlooking some major benefits of Walmart+. [[{“value”:”

Money is tight for a lot of people these days. We can thank factors like sky-high housing costs and lingering inflation for that.

As such, if you are going to spend money on things, you should be getting their maximum value. With that in mind, here are a few signs that you may not be taking full advantage of your Walmart+ membership.

1. You’re choosing convenience over savings when you fill up your car

One major benefit of subscribing to Walmart+ is getting to save $0.10 per gallon of gas at select locations. Using the Walmart app, you can find locations near you that offer that savings, including Exxon and Mobil stations and select Walmart and Murphy stations. If you’re not taking that simple step, but rather, are gassing up your car on a whim for convenience, then you may be doing yourself a disservice, financially speaking.

As long as you don’t have to drive very far out of your way to fill up at a station offering discounted gas, it pays to do so. You shouldn’t drive a long way off to fill up because you might negate your savings. But in some cases, driving around the corner or a couple of blocks over could leave you spending less in the course of fueling your car.

2. You never order grocery delivery

One major perk of a Walmart+ membership is getting free grocery delivery with a $35 minimum order. And seeing how expensive food is these days, that’s not a particularly tough threshold to meet.

You may be in the habit of skipping grocery delivery because you’re worried about the quality of the items you’ll receive. But if your order isn’t very produce-heavy, then you may fare okay by having your food delivered to your door.

Produce is the one area where it can pay to do your own shopping. But if you don’t happen to need much in the way of fruits and vegetables, then it pays to at least give grocery delivery a try before writing it off as a membership benefit you’ll never use. Skipping a trip to the store is another good way to save on gas.

3. You aren’t exploring your travel benefits

With Walmart+, you can score 5% Walmart cash back on hotels, car rentals, and more. You can also snag 2% in Walmart cash on airfare. Just use Walmart’s travel portal, powered by Expedia, to book your next trip.

But because this is a fairly new benefit, you may not realize it’s part of the program. So now, consider yourself informed.

Of course, it’s a good idea to research travel options rather than rush to book an itinerary, since travel can be expensive. If you have a Costco membership, for example, then it pays to compare vacation packages and see which one has the most competitive price. The point, however, is to not overlook your options for booking through Walmart and snagging yourself store cash to spend.

A Walmart+ membership costs $98 per year. And that fee may be more than worth it if you’re getting a lot of value out of it. But if any of these signs apply to you, it means you may be denying yourself benefits that make a Walmart+ membership even more worth paying for.

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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 and Walmart. The Motley Fool has a disclosure policy.

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Women face a financial literacy gap in this country. Keep reading to learn how to transform fear into freedom. [[{“value”:”

In the landscape of personal finance, a concerning term, “Girl Math,” highlights a stark reality: nearly 4 million U.S. women face a financial literacy gap, possessing skills below what’s expected of a third-grader. This stark statistic, however, doesn’t spell defeat, but rather a call to arms.

It’s time to harness wisdom from leaders like Veetahl Eilat-Raichel, a fintech entrepreneur who has navigated the highest echelons of corporate finance, to empower women toward achieving financial wellness. Here are her refined strategies to transform your financial health, debunking the “Girl Math” myth for good.

1. Face your financial fears head on

Imagine a world where the mere thought of peeking at your checking account balance doesn’t send shivers down your spine. For a majority, this is a distant reality, with over half of Americans admitting to a deep-seated fear of confronting their financial status. The first step toward empowerment is confrontation.

Log into your account and learn where every dime is spent to help dismantle your anxiety surrounding money. This practice isn’t just about tracking numbers; it’s about establishing a relationship with your finances based on transparency, control, and, eventually, pride.

2. Embrace the role of financial therapist

Your relationship with money, much like any relationship, requires introspection and understanding. Begin with a simple exercise: review several months of bank statements and identify your spending patterns. What expenses bring you joy, and which ones trigger regret? Which costs are essential, and which can you live without?

This process might unveil some uncomfortable truths about your spending habits, but acknowledging these patterns is the first step toward financial wellness. Armed with this knowledge, setting realistic goals and a budget that aligns with your values and financial objectives becomes not just possible but empowering.

3. Reassess and reset your budget

In an economy where prices seem to be constantly climbing, adjusting your budget to mirror the current cost of living is more crucial than ever. In February, the seasonally adjusted Consumer Price Index for All Urban Consumers increased by 0.4% and experienced a 3.2% rise over the past 12 months without seasonal adjustments. The allure of solving financial shortfalls with credit cards is understandable, but fraught with long-term pitfalls.

Instead, take on a budget recalibration, grounded in realism and foresight. This can guide you toward living within your means. This approach encourages a proactive stance against debt accumulation, fostering a healthier financial mindset prioritizing sustainability over momentary satisfaction. Budgeting apps help many people get a better grasp on their finances.

4. Guard against lifestyle creep

With its endless stream of targeted advertisements and one-click purchase temptations, the digital era makes maintaining financial discipline a formidable challenge. Yet, safeguarding against lifestyle creep — a phenomenon where increased income leads to proportionally higher spending — is essential for long-term financial health.

Implement practical barriers against impulsive spending: remove easy payment options like Apple Pay from your devices, clear saved credit card information from online stores, and unsubscribe from marketing emails. Though seemingly small, these steps can significantly diminish the temptation to overspend, reinforcing your commitment to financial wellness.

5. Cultivate robust credit health

Credit scores are the gatekeepers to financial opportunities, influencing your ability to borrow, the rates you’re offered, and even your eligibility for certain jobs or housing options. Start by obtaining a free credit report to gauge where you stand.

Then consider reducing your credit utilization ratio by paying down debt — transferring high-interest balances to cards with 0% APR offers can make this easier. Contrary to intuitive thinking, having multiple credit cards with low balances can positively affect your credit score by demonstrating responsible credit use and management.

Achieving financial wellness is a journey marked by education, self-awareness, and proactive management. By facing financial fears, understanding your spending habits, adjusting your budget to reflect real-world economics, guarding against lifestyle inflation, and nurturing your credit health, you can lay the foundation for a robust financial future.

Let’s challenge the “Girl Math” narrative by empowering ourselves with the knowledge and tools to achieve financial independence and wellness. Let’s redefine what it means to be financially savvy, not just for ourselves but for generations of women to come.

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Click here to read our full review for free and apply in just 2 minutes.

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 positions in and recommends Apple. The Motley Fool has a disclosure policy.

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