Money Management

Taking a career break to raise children? Read on for some major pitfalls to avoid. [[{“value”:”

Whether it’s your first child, your second, or your fifth, at some point in your life, you might make the decision to become a stay-at-home parent. And in some cases, the cost of child care might drive you to take a career break. Care.com puts the average weekly cost of infant daycare at $321. For a toddler, it’s not much less painful at $293.

If you have multiple children needing daycare, the cost alone might wipe out much or all of your salary. So staying home with your kids could actually end up being a wise personal finance decision. At the same time, though, make sure to avoid these mistakes as a stay-at-home parent.

1. Not readjusting your budget to account for a loss of income

If you used to work and are now a stay-at-home parent, the loss of your paycheck might constitute a blow to your family’s finances. So it’s really important to get onto a new budget that accounts for that lower income.

Start by making a list of your essential expenses, such as rent, groceries, and healthcare. Then add in expenses that may not be quite as essential but are pretty important to your quality of life, like having access to streaming content when you need some at-home entertainment.

Compare your spending to your household’s current income and make sure the numbers line up. If not, you may need to think about cutting some non-essential spending or seeing if it’s possible to find a part-time side hustle you can do from home, like social media account management or data entry.

2. Assuming you don’t need life insurance because you’re a stay-at-home parent

You may not be earning an income as a stay-at-home parent. And because of that, you might assume there’s no need to purchase life insurance. But remember, even if you’re not adding to your family’s bank account, you’re still providing an essential service — child care. And if something were to happen to you, it may be that your kids’ surviving parent would struggle to cover the cost of child care on their own.

That could be a very difficult thing. So do consider putting life insurance in place, even if it’s a modest term life policy (say, a 10-year policy that gets you through to the period when your children are in school and are old enough to stay home alone before and after school).

3. Letting professional licenses expire

You may be a stay-at-home parent now, while your kids are young. But once they’re old enough to attend school and you won’t be looking at spending your entire salary on daycare, you may want to go back to work. You don’t want to take that option off the table by letting professional licenses you hold expire.

Make a list of your various licenses or certifications and figure out what’s required to keep them. If it’s a certain number of continuing education hours or credits, see if it’s possible to fulfill that requirement online when you have the time. And if you do need to attend the occasional in-person seminar or course to keep your licenses, see if you can swap favors with a fellow stay-at-home parent where you watch their kids for a day and they do the same for you.

As a stay-at-home parent, your priority may be your children’s well-being. But don’t let these financial matters fall by the wayside, as they could end up making life difficult for you and your family on a whole.

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Thanks to the establishment of the FDIC, Americans can breathe easier knowing their banked cash is safe. Read on to learn how it works and why it’s important. [[{“value”:”

It’s a scary world out there, and if you’re worried about your finances, you’re definitely not alone. Thankfully, if you’ve got money in the bank, the odds are good that it is being kept safe from loss by the Federal Deposit Insurance Corporation (FDIC). Here’s a closer look at this important agency, what it does, and why you must bank with an institution that partners with it.

What is the Federal Deposit Insurance Corporation?

You’ve probably seen or heard the phrase “FDIC insured” before. The FDIC is an independent agency of the federal government that was created as part of the Banking Act of 1933. It was meant to ensure that Americans could trust their banks to keep their money safe and available when they needed it. It was spurred by the numerous runs on banks and subsequent bank failures in the wake of the 1929 stock market crash and resulting Great Depression.

In the event of a bank failure, the FDIC steps in to act as “receiver” of the bank’s assets, and works to return money to customers and settle the bank’s debts. In fact, it’s had to do this fairly recently — there were a few big-name bank failures in 2023. This included the collapse of Silicon Valley Bank, which was the largest to fail since the 2008 financial crisis. Customers had their money returned to them within a few days of the failure.

Which types of bank accounts are insured?

The FDIC does not insure your money in retirement or other investment accounts, annuities, or life insurance policies. But it does cover your money in:

Checking accountsSavings accountsMoney market accountsCertificates of deposit (CDs)Negotiable Order of Withdrawal (NOW) accountsOther official bank items like money orders and cashier’s checks

How much protection do you get?

The limit for FDIC insurance has grown over the years, from an initial limit of $2,500 on Jan. 1, 1934 (it was doubled to $5,000 just six months later), up to $250,000 today. This limit is per depositor, per FDIC-insured bank, and per ownership category; if you have less than $250,000 in a savings account owned solely by you, it’s completely protected. But if you have a joint account you own with another person, and it has a balance of $500,000, all that money is insured, too.

If you have a lot of money in bank accounts, it’s a good idea to spread it out to ensure all of it is safe. If your savings account balance stands at $300,000, you might consider splitting that between two banks, for example. Some financial institutions offer even higher FDIC limits — if your account balance is bumping up against the default $250,000 limit, you might consider exploring your options with one of these banks.

How can you tell if your bank is protected by the FDIC?

Thankfully, it’s not hard to find out if your bank falls under FDIC protection. (If you bank with a credit union, they have their own insurance protection under the National Credit Union Administration, or NCUA.) Head over to your bank’s website, or visit a branch, and you’re likely to see the FDIC logo displayed prominently somewhere.

If you don’t, you can go to the FDIC’s BankFind Suite, plug in your bank’s name, and search. This will tell you if your money is insured in accounts you have with that institution. As of this writing, the FDIC insures 4,586 financial institutions.

In these uncertain times, it might help you sleep better at night to know that in the event of a bank failure, your money won’t just evaporate. Before you open an account with a new-to-you bank, it’s worth taking the time to check its FDIC bona fides.

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There’s an area of your credit report that really needs your full attention. Read on to see what it is. [[{“value”:”

Your credit report may not be the sort of reading you want to curl up with on a stormy night. But it’s an important read nonetheless.

Your credit report is a summary of your borrowing history. And you’re entitled to a free copy of your credit report every week from the three reporting bureaus — Experian, Equifax, and TransUnion. You can access yours at AnnualCreditReport.com.

Checking your credit report every week is probably overkill. Rather, a more reasonable approach is generally to check your credit report once every three to four months.

Part of the reason it’s important to do that is to make sure you’re current on your debts and that you have a healthy credit mix. But it’s also important to monitor your credit report for fraud. And there’s one section of that report in particular that you’ll want to keep a close eye on.

Always look at your hard inquiries

Any time you apply for a new loan or credit card, a hard inquiry is done on your credit report. That’s a lender’s way of verifying your credit history and making sure it’s not taking on too much risk in loaning you money or extending a line of credit to you.

Incidentally, a hard inquiry can result in a hit to your credit score. Usually, though, that hit is mild, ranging from about five to 10 points. So a single hard inquiry every so often shouldn’t do much damage or limit your ability to borrow when you need to.

Meanwhile, it’s important to look at the hard inquiry section on your credit report to make sure anything listed there is an inquiry you recognize. If there’s an inquiry you don’t recognize, it’s an indication that someone has tried to open a credit card or loan in your name (either that, or it’s a mistake, which should also be addressed, too).

Keep in mind that your credit report may contain a soft inquiry section. This is a section you don’t have to worry about as much.

Sometimes, credit card issuers will do a soft inquiry to see if it makes sense to try to send you offers. A hard inquiry, by contrast, comes as a result of an actual credit application. So if you see one you don’t recognize, it’s important to take steps to protect yourself from further fraud.

What to do if you see fraudulent activity on your credit report

If you see a loan or credit card application on your credit report that you didn’t put in, don’t panic. But do take action.

First, contact the credit bureau listing that line item to make sure it wasn’t a mistake (and make it clear that you didn’t apply for the loan or credit card in question). From there, contact the lender or credit card company and try to get details. You’ll also want to let the lender or credit card company know that the application was fraudulent.

Once you’ve done that, it’s a good idea to report your incident of identity theft to the Federal Trade Commission. From there, you’ll generally get a recovery plan with steps to take.

One step it definitely pays to take is freezing your credit. This prevents criminals from taking out another loan or credit card in your name, because what will happen is that the issuer will be barred from doing a hard inquiry until you unlock that freeze.

You may also want to put a fraud alert on your credit report. You can usually do this by creating an account with each credit bureau and following the steps they give you.

Finally, you’ll want to check your existing credit card and bank accounts to make sure there’s no suspicious activity. If there is, report it at once.

Since credit reports aren’t something most people look at every day or week, when you do sit down to review yours, don’t rush through it. That report contains some vital information about your financial picture. But make especially certain to pay close attention to the hard inquiry section, and act quickly if anything there doesn’t look right.

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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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Tired of paying a premium for groceries and products? Unfortunately, your costs might rise due to a specific trend. Read on to learn more. [[{“value”:”

Some people really enjoy grocery shopping. For others, it’s an activity they try to wrap up as quickly as possible. If you happen to fall into the latter camp, then you may be someone who prefers the self-checkout option instead of using a lane with an actual cashier.

The logic behind self-checkout is that it’s supposed to save consumers time. But if you’ve ever tried self-checkout, you may find that it’s actually quite a frustrating experience. For one thing, sometimes, the system often breaks down. You can scan your groceries as carefully as possible only to have the machine start beeping, thereby necessitating the help of a store employee. And then there’s the whole “you must place each item in the bagging area individually” thing that can end up being a hassle and cause you to spend more time checking out than is necessary.

It’s not totally surprising to learn that many consumers prefer a traditional checkout process to self-checkout. Also, regular checkouts featuring human cashiers are more likely to make consumers feel loyal to a store, according to research out of Drexel University.

But the reality is that self-checkout, when done right, has the potential to save retailers money. Of course, when it’s done wrong, it can cost them money. And studies have shown a correlation between self-checkout and increased incidents of merchandise losses and theft.

As such, some retailers may be rethinking the idea of self-checkout. And if a growing number opt to do away with it, it could lead to higher product costs. The good news, though, is that there are steps you can take to save money on groceries and other essential products. Here are some tactics to employ.

1. Take advantage of discounts for non-perishables

Tempting as it may be to stock up on yogurt when a $1.25 cup is discounted to $0.99, yogurt only lasts so long. While buying 40 cups of yogurt at a savings of $0.26 each might put an extra $10.40 back in your pocket, you might end up letting some of those cups go to waste, thereby negating your savings.

On the other hand, when your supermarket or big-box store puts non-perishables on sale, load up if you have the room to store them. Let’s say your kids go through three boxes of granola bars most weeks, and they normally cost $2.99 a box. If they’re reduced to $1.99 a box and you have the room and can afford the initial outlay in your budget, buy 40 boxes. At three boxes a week, you’ll be done with your supply in about three month’s time, all the while saving yourself $40.

2. Meal plan

The simple act of planning out your meals in advance could save you money at the supermarket. Rather than roam the aisles randomly adding items to your shopping cart, figure out what your family will be eating on a weekly basis and purchase the items you need to bring your menu to life.

The simple act of shopping with a list might help you avoid wasting money on items you don’t need that could end up going to waste. After all, if you buy chicken breast only to end up making a large batch of meatballs, you might run out of time to cook that chicken. The result? Money you’ve thrown out (unless, of course, you freeze your meat before it goes bad).

3. Take advantage of bulk discounts

You don’t need to be a Costco or Sam’s Club member to take advantage of bulk quantity discounts. Just walk around your local supermarket or big-box store, and you’ll likely see items you use regularly available in larger quantities or sizes. Again, this is a situation where if the item is non-perishable and one you use regularly, it pays to snag the discount.

However, one thing you generally don’t want to do is buy products you’ve never used before in bulk. So let’s say your go-to dish soap isn’t available at the supermarket in a larger size, but a different brand is. You might say, “Well, I know I’m going to need to clean my dishes, so I might as well get the discount.” But if you end up being unable to stomach the scent of that new brand, you risk wasting your money.

It’s too soon to say goodbye to self-checkout lanes. But in the coming years, some retailers may decide to do away with them, and that has the potential to lead to increased costs. It’s best to have strategies for saving money when loading up on the items you need.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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Owning a hybrid may be better for air quality, but it may not be better for your wallet. Keep reading to find out why. [[{“value”:”

We buy hybrids because they use less gas. It might be because we want to lower emissions — or because we want to spend less money at the pump.

If you’re team Lower Emissions, then you may be willing to pay a little extra over the years to choose a hybrid. However, if you’re more of a Lower Gas Bill hybrid driver, you probably want to make sure you’re really coming out ahead.

Turns out, it’s kind of all over the board. Here’s how the cost comparison breaks down.

Initial cost: Hybrids add $3K to $10K (or more)

How much going hybrid will cost you compared to a full-gas vehicle varies significantly depending on the make and model. But expect to pay at least $3,000 more — though it could be four times that much.

For example, a base-model gas-powered Toyota RAV4 is only $3,050 less than the base-model RAV4 Hybrid. If you want a Ford Escape Hybrid, on the other hand, you’ll need to fork over an extra $11,005 over the cost of the base model gas-powered Escape.

Plug-in hybrids (PHEV) — hybrid engines that can be charged externally — will cost you the most compared to their gas-powered counterparts. However, this extra cost could be partially offset with federal tax credits if the vehicle qualifies. (Currently, there are seven plug-in hybrid models that qualify for federal tax credits.)

Upkeep and maintenance: Mostly a wash

Here is where things get a bit hazier. Because there are so many different makes and models of both gas and hybrid vehicles, it’s really hard to say which has the most expensive upkeep.

On the plus side, you’ll probably pay less for gas. How much you save will depend on how much — and what kind of — driving you do. (Folks who do a lot of city driving will see the most benefit.) You may also save money on general upkeep, since maintenance expenses like oil changes may be less frequent and brakes can be cheaper.

As a con, repairs can be more expensive (more computerized parts). Additionally, hybrids are generally a bit more expensive to insure. The higher car insurance cost is both because of increased repair costs and increased MSRPs.

Resale value: Still favoring gas engines

If you search sales ads for used vehicles, you might notice that hybrids tend to go for more money than full-gas vehicles. This is a bit misleading, though. Hybrids tend to have more depreciation than gas-powered vehicles.

Prices seem higher because hybrids start out much higher. That gap actually shrinks as the vehicles age.

This, of course, varies by make, model, and condition. It also seems to be shifting. The number of people interested in hybrids is growing, and I suspect it won’t be that long before depreciation evens out.

TL;DR: Hybrids are often more expensive, but it varies by vehicle and driver

Overall, yes, a hybrid will often have a bit more cost over its lifetime than a gas-powered vehicle, especially models that have a significant price disparity at time of purchase. A lot depends on what type of hybrid you buy.

Additionally, some types of drivers may get more value from their hybrids than others. Folks who spend a lot of time in stop-and-go traffic (I see you, rush hour commuters) may save significantly more fuel than folks who do most of their driving at speed on the highway.

If you’re the type of person to drive a vehicle until it gives up, then your lifetime cost picture may also be different. Depreciation ceases to really matter once a car hits a certain age. Plus, your gas savings will have quite a bit of time to accrue (assuming the efficiency remains reasonable).

Whether buying a hybrid is a smart financial choice depends on your own circumstances. Be sure to crunch the numbers before making such a large investment.

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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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Costco recently opted to share more wealth with stockholders. Read on to see why that could bode well for members who are worried about seeing their fees increase. [[{“value”:”

When you invest in stocks, there are two different ways you can make money. First, you can hold onto your shares until their value increases, and then sell those shares at a profit. Secondly, you can earn income when the companies whose shares you own pay dividends.

When a company pays dividends, it’s sharing its profits with its investors. Companies are not required to pay dividends. And they’re certainly not required to raise them.

But recently, Costco announced it was increasing its stock dividend. And that could be good news for members who are worried about their fees rising soon.

It’s clear that Costco is in a pretty good place

Paying dividends doesn’t always mean that a company is strong financially. Similarly, companies that opt not to pay dividends aren’t necessarily losing money and drowning in debt. Rather, often, they’re simply choosing to reinvest in the business rather than give shareholders a payday.

However, it’s not unreasonable to draw the conclusion that an increased dividend is indicative of a strong balance sheet. And if Costco is in good enough shape to reward investors with a higher dividend payout, then it may be in good enough financial shape to keep membership fees where they are through the end of the year, and possibly beyond.

What we know about Costco fee hikes

Many people are on a tight budget these days due to lingering inflation. So for some Costco members, the idea of having to pay more to shop at the store is troubling.

Right now, a basic Costco membership costs $60 a year, while an Executive membership costs $120. Based on previous fee hikes, those prices could increase to $65 and $130, respectively, should Costco decide to move forward with a new cost structure.

Now, one thing that’s clear is that current Costco members should expect their fees to increase at some point. But former CFO Richard Galanti, who departed in March, has danced around the topic during recent earnings calls.

In late 2023, when asked about a fee hike, Galanti gave the answer, “It’s a question of when, not if.” Galanti also acknowledged that it had been some time since the company’s last fee hike in June 2017. However, it’s also pretty clear that Costco isn’t in a rush to raise membership fees.

As of its most recent fiscal quarter, Costco’s membership base sat strong at 73 million people, a figure presenting an increase of almost 8% from the previous year. So as long as Costco continues to generate a nice amount of revenue from membership fees, it may not move quickly on a price increase.

That said, you should brace for it at some point. As a general rule, if you’re getting good value out of your Costco membership at the current price point, then it will probably make sense to keep your membership even if its cost rises modestly. And if you’re struggling to make ends meet, consider setting those few extra dollars aside when you can in case the cost of shopping at Costco increases. You don’t want to end up in a position where you have to give up your membership due to a higher cost, as that could mean paying more for groceries and household essentials throughout the 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.
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 Gala. The Motley Fool has a disclosure policy.

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