Money Management

Over 17% of online purchases are returned, which is a big headache for retailers. Find out how their changing policies might impact your online shopping. [[{“value”:”

I am a big fan of online shopping. There was a time when you had to trudge from store to store to find a bargain or get exactly the product you wanted. But these days, I can see what’s available in hundreds of different stores without even leaving my house. Even better? I can often get my shopping delivered and return anything that isn’t quite right. All for free.

Unfortunately, those perks cost retailers a lot of money, and now they’re tightening their belts. Since lots of us have converted to online shopping, stores don’t need to woo us with free shipping and generous return options.

The era of free shipping and returns could be coming to an end

Retailers aren’t pulling the plug on free shipping and returns completely. But they are moving the goalposts and encouraging consumers to change their online habits. Stores would prefer us to use services like curbside pickup, which costs them less and can be more convenient for consumers.

You may find you need to spend more or sign up for premium plans to get free shipping. For example, The Wall Street Journal reports that the average minimum order for free shipping rose from $52 in 2019 to $64 in 2023, per Narvar data. Return windows are getting smaller and some retailers will charge you for sending back certain items.

To give you an idea, here’s how free shipping and returns work with some popular retailers.

Amazon: Non-Prime customers need to spend at least $25 to qualify for free shipping. The retail giant has even been trialing a $35 minimum spend for some orders. Amazon Prime costs $14.99 a month or $139 per year.Target: Regular customers need to spend at least $35 to get free shipping with Target. To get free delivery with no minimum spend, customers need to use Target’s branded card or join its paid Target Circle 360 program.Zara: To get free delivery in two to four working days, you’ll need to spend $70 on non-sale items. You can return items for free by taking them to a store, but it’ll cost you $4.95 to send them back.H&M: H&M has a free loyalty program that gets members free shipping on orders over $40. Non-members need to spend at least $60 to get free delivery. In terms of online returns, members pay $2.99 and non-members pay $5.99.

What stricter shipping and return rules mean for your wallet

I’m going to go out on a limb here and say that I don’t think stricter returns or higher shipping fees are entirely a bad thing. According to the National Retail Federation, about $743 billion in merchandise was returned in 2023. The return rate for online purchases was 17.6%. Returns cost retailers a lot of money. And those costs will be passed on to customers in one way or another.

READ MORE: Best Budgeting Apps

I have read stories of shoppers buying hundreds of items only to return 99% of them. While I don’t want to pay high fees every time I ship an item, I also don’t want prices to rise because some people abuse the system. If tighter shipping and return policies mean we can reach a happy medium, so much the better.

With that in mind, here are some ways to adapt your habits to continue to enjoy the benefits of shopping online.

Don’t assume you’ll automatically be able to return an item for free. Check the store’s return policy before you make a purchase. See if you’ll have to pay to send items back and how long the return window is. It’s also good to see whether you’ll get a store credit instead of a full refund.Group your purchases until you reach order minimums. When you’re shopping online, there’s no time pressure. You can leave items in your cart for days, weeks, or even months while you build up a full order. Waiting until you’ve reached an order minimum can also help reduce impulse purchases.Weigh the benefits of premium services. Subscription costs can be a silent budget killer. You sign up for an introductory deal to get free shipping and before you know it, there’s $10 or $15 leaving your account every month. If you have four or five subscriptions, that can quickly add up to $600 or more every year. Think about each service you sign up for, and calculate what value you get from using them.Make the most of cash back rewards. Lots of the best cash back apps work with online retailers. Not only can you earn rewards, they’ll also help you find the best deals. Combine apps with credit card rewards to earn even more benefits.

Bottom line

Retailers aren’t getting rid of free shipping completely. Nor are they making it impossible to return items. However, they aren’t willing to swallow so much of the costs of sending and returning our online purchases anymore. As a consumer, this means we have to be more intentional about our online shopping. Pay attention to how policies are changing, so you don’t get caught unaware.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Emma Newbery has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Target. The Motley Fool has a disclosure policy.

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Many 401(k) plans come with an employer match. But what if yours doesn’t? Read on to see what to do. [[{“value”:”

One of the benefits of working for an employer, as opposed to being self-employed, is getting access to different workplace benefits. These could include health insurance, paid time off, and access to a retirement plan.

In fact, it’s pretty common for 401(k) plans to come with some sort of employer matching incentive. Vanguard, for example, recently found that 95% of companies offer some type of match for their retirement plans.

But gosh darn it — what if you’re part of that unlucky 5%? What if your company offers a 401(k), but there’s no match to be had? Should you invest in that plan anyway, or should you find another home for your retirement savings? The answer is, it really depends on how happy you are — or not — with your 401(k)’s investment choices and fees.

When it pays to look outside a 401(k)

It pretty much always makes sense to contribute money to a 401(k) when there’s an employer match involved. After all, how many opportunities in life do you have to get your hands on free money?

But when there’s no match, it’s a different story. From there, it could make sense to look outside of a 401(k) and find a plan that better meets your needs. To see if that’s the case, you’ll want to ask yourself two questions:

Am I satisfied with my 401(k)’s investment choices?Am I losing a lot of money to fees?

One potential drawback of 401(k)s is that they don’t allow you to invest in individual stocks like IRAs do. If you’re a savvy investor, you may find yourself annoyed at being limited to choosing between different funds, like index and mutual funds. Also, some of the funds available in your 401(k) might come with high fees, called expense ratios, that eat away at your returns.

Then there are the administrative fees you pay just for having a 401(k). Those typically amount to about 1%, though they can range from 0.5% to 2%. If your 401(k)’s fees are on the high end of that range, you may want to look at saving for retirement elsewhere.

An IRA could be a good bet

If you’re not exactly thrilled with your company’s 401(k) and there’s no contribution match to be had, then it could pay to see if an IRA is a better choice for you. With an IRA, you get the freedom to buy stocks individually, and you might be looking at much lower fees all in.

Anyone with earned income can open an IRA. And most major financial institutions offer these plans. So it could pay to explore your options if your company’s 401(k) just isn’t doing it for you and you want more control over your investments.

One final thing: It may be that your company does offer a match for its 401(k), but that it imposes a vesting schedule that doesn’t work for you. With a vesting schedule, you don’t fully own your employer matching dollars until a certain point.

Your employer might impose a three-year cliff vesting schedule where you must remain employed for 36 months or else you forfeit your entire match. If you know you only intend to stay at your job for a year, it means you’re probably not getting your match either way. So in that situation, you may want to look at opening an IRA with a stock broker as well, since a match that isn’t attainable isn’t really any more helpful than having no match at all.

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Long-term CDs could be a good choice in some cases. Read on to see why. [[{“value”:”

If you have money allocated for near-term goals or emergency expenses, then a savings account is the best place for that cash. You need easy, perpetual access to your emergency fund. And you should never take money you might need within a year and invest it in stocks. If the market tanks, you won’t have time to ride out that downturn and avoid locking in permanent losses.

But there’s a difference between saving within a one-year time frame and a five-year time frame. And in the latter scenario, I used to think that CDs were a poor choice for five-year goals. The way I saw it, why put money into a CD for five years when you could make much more in the stock market and you had time to ride out an extended slump?

But I’ve since changed my tune on 5-year CDs. And I now think that under the right circumstances, opening one can be a very wise choice.

When rates are favorable, it could pay to pounce

Generally speaking, I’m not going to tell you to put your money into a 5-year CD when the rate on it is 1.50% or 2.00%. There are a number of relatively stable five-year investments that are apt to offer a higher return, like bonds or bond funds. But at a time when 5-year CDs are paying upward of 4.00%, it’s a different story.

The Federal Reserve spent much of 2022 and 2023 raising interest rates in an effort to cool inflation. And while that’s driven the cost of borrowing upward, it’s also resulted in higher savings and CD rates.

These days, you can find 5-year CDs paying around 4.50%. And if you open a CD at an FDIC-insured bank and limit the amount of money you have in that account to $250,000 ($500,000 for a joint account), that CD is protected, making it pretty much a risk-free home for your money. Even bonds, which are fairly stable, carry some risk of losses, such as if an issuer defaults and can’t return your principal.

Why CDs are a good idea for a five-year goal

So let’s say you’re saving for a goal that’s five years out. You could put your money into the stock market, and there, you might enjoy a higher return than 5% — especially since the market’s average return over the past 50 years has been 10%. But remember, that’s an average taken over 50 years.

In five years, the market might average 7%, or 4%, or -3%. So while there is some upside to investing in stocks for a five-year period, there’s also risk.

With a CD, you really aren’t taking on risk if you stick to the rules above (choose an FDIC-insured bank and make sure your deposit falls within the FDIC limit). So at a time when CD rates are up, a 5-year CD does make sense because you might be getting 4.00% on your money or more risk free.

In fact, I’m not just someone who will now recommend 5-year CDs — I recently opened one myself. I have about five years until I may have to start paying college tuition. I have investments for that purpose, but what if those investments sink right as those tuition bills start coming due?

That’s why I recently put a chunk of cash into a 5-year CD. I can earn 5% on that money without losing sleep.

Don’t wait to lock in a 5-year CD

Because of where interest rates are at today, I think that in some cases, a 5-year CD makes sense. It doesn’t make sense if you’re 35 and are saving for retirement, but it does make sense if you’re saving for a nearer-term goal.

However, don’t wait to open a 5-year CD. The Fed is expected to start cutting rates later on in 2024. And once that happens, you may not be able to earn as much interest on a long-term CD. So if you’re interested in finding a safe place for your money for the next five years, get moving ASAP.

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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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Real estate has the potential to gain value over time. But you might do even better for yourself by investing. Read on to learn more. [[{“value”:”

You’ll often hear that buying a home has the potential to be a good investment. And there may be some truth in that.

Property values have the potential to rise a lot over time. Just look at the modest $31,000 home Warren Buffett bought in 1958. At this point, it’s worth $1.44 million. So that’s a pretty sweet gain for Buffett, should he choose to sell.

But actually, even Buffett himself admits that renting a home probably would’ve made him wealthier — and that’s with a property that’s gained over $1.3 million in value. So before you rush to sign a mortgage, you may want to consider the financial benefits of renting a home instead.

When buying a home stops you from accumulating wealth

You’ll often hear that renting a home is akin to throwing your money away. But remember, when you own a home, you have so many more expenses to cover on top of your monthly mortgage payments. There’s property taxes, homeowners insurance, maintenance, and repairs.

So even if it costs you a little more to rent than to pay a mortgage, you’re not covering all of those other expenses. And you’re also not forking over a giant wad of money in down payment form. So all told, renting might give you access to more cash you can then invest. And that could do a lot of great things for your finances.

Let’s say that by renting rather than owning a home, you’re spending $500 less per month over a 30-year period. Over the past half-century, the stock market’s average annual return has been 10%. So if you invest $500 a month over that time frame, you might end up with a stock portfolio worth about $987,000. That’s a gain of over $800,000.

In fact, let’s look at Buffett’s gain. Let’s assume he bought his $31,000 house in cash and made about $1.36 million. Had he rented a home, he perhaps could’ve put his $31,000 in the stock market back in 1958.

Assuming that same 10% average return, his $31,000 would now be worth about $16.7 million. So while he certainly did well for himself with his home, it’s easy to see how renting would’ve better served him financially.

These days, Buffett is a billionaire many times over. So for him, the loss of that $16.7 million probably isn’t a big deal.

The point, however, is that there’s a lot of money to be gained by investing. So if buying a home prevents you from being able to invest, then maybe you shouldn’t buy.

There are many paths to building wealth

Of course, most people buy a primary residence not to make money, but to gain stability and enjoy being able to live without having to follow a landlord’s rules. If that’s how you feel about homeownership and you can afford to buy while still having money left over to save and invest, then by all means, go for it.

But don’t push yourself to buy if it’s outside your financial comfort zone because you’ve been told that renting is a waste of money. And don’t write off the possibility of becoming wealthy if you don’t own a home. The money you save as a lifelong renter could be your ticket to a valuable investment portfolio — and a lot of accumulated wealth.

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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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Is your employer quiet cutting you and your colleagues? Here’s how to know. [[{“value”:”

In recent years, many employees have taken to quiet quitting — a practice that involves refusing to go overboard on effort at work and doing the bare minimum to avoid getting fired. But employers are fighting back, in a way, via a newer practice called quiet cutting.

Quiet cutting is the practice of making workers’ jobs less financially or mentally appealing without actually letting them go. Another way to look at quiet cutting is that it’s a notch above implementing layoffs.

Only in some ways, it’s worse, because with a layoff, a company is at least cutting ties with a given employee and giving them an opportunity to collect unemployment benefits while they seek out a better job. With quiet cutting, what might instead happen is that a given employee has their pay reduced and gets a demotion, thereby forcing them to either suffer or up and quit (which negates eligibility for unemployment benefits).

A recent Monster survey found that 77% of workers have witnessed quiet cutting at their company, and 58% have been impacted by it. As such, it’s important to recognize the signs of quiet cutting. Here are some to be on the lookout for.

1. The annual bonus your company gives out has gone away

Many employers know that implementing pay cuts could result in an uproar. So what they might do instead is seek to cut bonuses, since that’s an extra perk. If you’ve been employed by your company for many years and this is the first time you’re suddenly without a bonus, it may be a sign of things to come.

2. In-office perks are slowly disappearing

Is your company suddenly no longer providing the Friday lunches it always did? Is the snack cabinet suddenly empty? If perks you’ve enjoyed for a long time are disappearing in short order, consider it a sign that your company is quiet cutting.

3. Your employer is suddenly a fan of remote work — but for the wrong reasons

If you’ve been petitioning to work from home for quite some time and your employer finally agrees, you may be inclined to celebrate. But don’t bust out the champagne just yet. It may be that your company is suddenly amenable to remote work because it doesn’t want to maintain a dedicated desk for you at the office. That’s not necessarily a good thing.

What to do if your employer is engaging in quiet cutting

With quiet cutting, your job isn’t necessarily on the line. Rather, it’s most likely just going to keep getting worse and worse until you hit rock bottom.

So don’t let things get to that point. Instead, take action. Once your employer starts slashing perks, take a look at your expenses and budget to see what your core salary needs entail. Then, work with a recruiter or engage in your own online searches to start the process of finding a new job.

At the same time, if part of quiet cutting at your workplace means taking a pay cut or losing out on an expected bonus, you may have to adjust your spending. That could run the gamut from being more careful with your grocery expenses to cutting back on takeout. It could also be wise to take on a temporary side hustle to make up for missing income.

Finally, find ways to be kind to yourself to make up for the awful stuff that’s going on in the workplace. If you’ve just been assigned a whole bunch of mind-numbing tasks that should be below your pay grade, push through them to avoid getting fired. But then make a plan to reward yourself that night with a soothing bath and your favorite comfort meal.

Also, try to fight quiet cutting with quiet quitting. Don’t not do your job, because you don’t want to get fired. But mentally, tell yourself you just don’t care. Taking the pressure off and reminding yourself that you’re just powering through until a better job comes along could make the situation a lot easier to cope with.

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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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With a CD, you risk being penalized for an early withdrawal. Read on to learn about a different type of CD where this may not be an issue. [[{“value”:”

The benefit of putting money into a CD is that you might score a higher interest rate on it than you would with a regular savings account. Plus, that interest rate is guaranteed.

You may, for example, currently be getting 4.00% in your savings account. But if interest rates drop in the next few months, by the end of the year, you may only be looking at 3.00%. On the other hand, if you lock in a 12-month CD right now at 4.75%, you’re guaranteed that 4.75% for a full year.

That said, there’s a risk you take when you open a CD, and it’s the risk of a penalty for cashing out your money ahead of your CD’s maturity date. The amount you’re penalized for doing so depends on your bank and the length of your CD. For example, you could be penalized three months’ worth of interest if you take an early withdrawal from a CD with a term of 12 months or less.

But what if you could somehow open a CD that doesn’t charge those penalties? Actually, that option exists. But whether it’s the right one for you is questionable.

Should you look at a no-penalty CD?

As the name suggests, a no-penalty CD is a CD that allows you to withdraw your money at any time without paying a penalty. You may, depending on your bank, have to give a certain amount of notice before tapping your CD. But generally, you’ll avoid being penalized if your financial situation changes and you find that you need your money ahead of your CD’s maturity date.

At first, a penalty-free CD might seem like it gives you the best of both worlds. But one thing you should know is that you may end up with a considerably lower interest rate on a no-penalty CD than a regular one.

See, banks reward CD holders with higher interest rates than savings accounts because CD owners are effectively committing to keeping their money put for a period. With a no-penalty CD, you’re making much more of a low-level commitment. It can be argued that you’re not even making a commitment at all. So expect to earn less on your money as a result.

Alternatives to a no-penalty CD

While a no-penalty CD could end up being a good place for your money, there are some alternate routes you can explore. One option is to shop around for a great rate on a regular high-yield savings account. You may find that you can do better than a no-penalty CD.

Another move to consider is building a CD ladder. With a CD ladder, you have money in CDs that do charge penalties. But you also have CDs coming due at different intervals during the year so that your chances of incurring an early withdrawal penalty are lower.

Opening a CD can be risky, because if you end up with a sudden need for cash, you could be forced to tap that CD early and get hit with a penalty as a result. A no-penalty CD can mitigate that risk, but you might have to give up a higher interest rate to get it. So you may find that laddering solves your problem and makes you feel comfortable with the idea of moving forward with CDs.

These savings accounts are FDIC insured and could earn you 11x your bank

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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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