By: Steven Porrello |
Updated
– First published on July 10, 2023
If you haven’t looked at CD rates in a while, get ready to fall out of your seat. Even after the Fed paused its series of interest rate hikes in June, APYs on CDs are still above 5%, with some inching closer to the 6% line. It’s a good time to be a CD shopper, but will July be the month we see 6% CD rates?What might change for CDs in JulyThe biggest change for CDs could happen on July 26, when the Fed concludes its upcoming FOMC meeting and announces its next decision. If the Fed decides to raise the federal funds rate again by another quarter percentage, we could see a slight uptick in CD rates. In fact, even though that decision will come toward the end of the month, banks and financial institutions may decide to raise CD rates beforehand to draw in depositors in anticipation of the Fed’s decision.To be clear, the federal funds rate doesn’t decide CD rates, but the two typically move in tandem. That’s because banks — especially lesser-known financial institutions — often compete by offering higher CD rates to attract depositors. Currently, short-term CD rates are clustering around 5%, with some lower than this and others higher, depending on terms and the CD issuer. NASA Federal Credit Union, for instance, is offering a 5.65% APY on a 9-month CD, while Bread Financial is offering 5.25% for a 1-year.Will the Fed hike the fund rate in July?While anything can change between now and July 26, it’s looking like the Fed will resume its rate-hiking campaign soon.To recap, it’s been almost 16 months since the Fed began hiking the federal funds rate at its fastest rising pace in 40 years. And though the economy looks quite different today than when inflation hit a 40-year high last June, the Fed still believes it has more fight ahead of it. Reportedly, 12 of the 18 Fed policymakers predict we’ll see at least two more quarter-point hikes in 2023, with four more supporting at least one. That leaves only two policymakers (or roughly 11%) forecasting that rates will stay the same.To be fair, the 12-month inflation rate has been steadily falling and even dropped to 4% in May 2023. But because the Fed wants inflation to fall to 2% — and because the economy is still holding itself together — it might take more drastic action to get what it wants.CD shoppers: here’s what to do nextIf you’re patient, you can wait and see what the Fed decides on July 26.However, regardless of the Fed’s decisions, today’s CD rates still look really good. In fact, even if the Fed decided on two more quarter-point hikes this year, it’s unlikely CD rates would grow at the same pace that they did over the last 16 months.Ultimately, if you’re sure a CD is right for you, locking into one at today’s rates would still leave you with a rate higher than May inflation. While I would love to see CD rates hit 6% in July, trying to time CDs at their peak might be a fool’s errand and could result in forfeiting high interest. If anything, consider a short-term CD, like one lasting just three months. This would help you capture today’s rates, while also giving you the potential to snag a different rate later this year.
By: Ashley Maready |
Updated
– First published on July 4, 2023
Taking the occasional vacation is one of the best things you can do for your mental health, as it’s wonderful to get a change of scenery, have new experiences, and take a break from work. Unfortunately, vacations don’t come cheap. There are ways to save, such as by considering a road trip rather than flying and renting a car. But if you want a trip with all the bells and whistles with less hassle and perhaps at a lower price, you should consider Costco Travel.Yes, Costco sells travel packages! They are exclusively for Costco members who live in the U.S., and come with upfront pricing and as Costco puts it, “the value you want with the quality you expect.” A few of my colleagues here at The Ascent were kind enough to share their experiences with Costco Travel, so let’s take a look at their vacations and see what kind of comparable trip you can take.1. A five-star honeymoon in GreeceDestination(s): Athens and SantoriniDuration: Seven days (October 2022)Cost: $4,500 (covered hotel stays, transportation to/from airports and ferries, and complimentary arrival drinks at hotels)Savannah Esworthy and her new husband booked their honeymoon through Costco Travel, and opted for five-star hotels for a luxury experience. They booked their own airfare separately, however, because they wanted to use travel rewards points for that cost.Savannah called out the transport between airports and hotels specifically. “Our drivers were never late, they were always friendly, and they offered information to stay in touch with them during our stay in Santorini.” The hotels were also “absolutely stunning,” and a representative from Costco Travel had told them that this was a honeymoon trip, so the newlyweds truly had the red carpet rolled out for them.Want to take a similar trip?I took to Costco Travel to build a Greek adventure for two (including flights this time). For a week in September 2023, for two people and stops in Athens and Santorini, I came up with a price of $13,781. This trip includes airfare from New York, stays in three luxury hotels (two in Athens, one in Santorini), and land and ferry transport. This trip represents a hit to your checking account, but being able to sit back, relax, and let Costco handle everything might be just the ticket.2. Eight wonderful days in MexicoDestination(s): Playa del CarmenDuration: Eight days (June 2023)Cost: $5,230 (included optional insurance, airfare and transportation to/from resort, resort stay, concierge service, and room upgrade)Mary Henderson took a trip to a resort in Playa del Carmen, Mexico with the help of Costco Travel. The $5,230 charge included airfare, as well as travel insurance, which is optional but may be a good idea if you’re booking the vacation of a lifetime. Mary rated her trip a perfect 10/10, noting that “Costco travel makes everything seamless.” This extended to flight delays or cancellations, since “someone is working behind the scenes” to ensure all pieces of your vacation are adjusted accordingly. She’s glad she sprung for the travel insurance, as it provided additional peace of mind.Want to take a similar trip?If you want to spend eight days in Mexico, you could be looking at a cost of $4,612. This price included flights from New York to Cancun, Mexico and seven nights at an adults-only all-inclusive resort for two. It also includes travel to and from the airport when you arrive.3. An Alaskan voyage that never was — but that came with an easy refundDestination(s): Various places in Alaska, and both land and sea travelDuration: Two and a half weeksCost: N/AMaurie Backman, a fellow writer here at The Ascent, had booked an epic trip to Alaska for her family of five for August 2020. Unfortunately, COVID-19 got in the way of those plans, as it did for so many aspiring vacationers. But she did get a refund, with the help of Costco Travel. Maurie noted that using the service was “like having my own personal team of travel agents.” This came in handy, especially since many cruise lines weren’t rushing to refund passengers for canceled bookings. As Maurie put it, “Costco got in touch with them on our behalf and made sure we got our money back.” She hopes to rebook this trip in the future, and plans to use Costco Travel again.Want to take a similar trip?To price this one out, I looked to Costco Travel’s cruise section. For a 14-day trip with Holland America that will take you from Vancouver to Fairbanks, with many enticing stops along the way (including a few days in the majesty of Denali, America’s tallest mountain), you’d be looking at $1,974 per person, with included taxes and fees. This doesn’t include airfare — for a flight from New York to Vancouver at the start of your journey and the trip home from Fairbanks to New York, I found Google Flights prices of $185 and $262 (not including baggage fees or other extras, and this is the economy fare).If you already love Costco for groceries, gas, tires, electronics, and beyond, why not give Costco Travel a try? You’ll benefit from a team of travel professionals who know how to give you the worry-free experience of a lifetime.
By: Steven Porrello |
Updated
– First published on July 5, 2023
Costco is well-known for selling stuff at low prices when you buy in bulk. But for items you probably don’t want to buy a dozen at a time — like laptops and other electronics — you might be wondering if Costco still lives up to its low-price reputation.In general, yes, Costco usually sells laptops and electronics at slightly lower prices than the manufacturer’s price — but with a strong emphasis on “usually.” Every now and then, the manufacturer or another store will offer sale prices that can beat Costco, especially if the warehouse isn’t offering a sale itself. Even so, I’d say Costco is still worth considering when you’re shopping for a laptop, and not just because of price alone. While its electronics selection isn’t vast, here are a few reasons to buy a laptop at the warehouse. 1. 90-day return policyCostco lets you return a laptop for a full refund within 90 days after you received it. What’s more, Costco isn’t picky about returns and will likely accept laptops even if you don’t have the original packaging.In comparison, Best Buy gives you 15 days to return most items or 60 days if you’re a My Best Buy Plus member (which costs roughly $50 per year). Amazon, for its part, accepts most laptops within 30 days of delivery (Apple laptops are accepted within 15 days), but only if it arrived damaged or you haven’t opened the box. 2. Free technical support Costco Concierge Services give members free troubleshooting and technical support over the phone. This not only applies to laptops but also to other Costco electronics, such as televisions, projectors, and cameras. So if you’re having trouble with your new laptop, you can get free help. 3. Costco extended two-year warranty Just for being a Costco member — whether that’s Gold Star or Executive — you get an automatic one-year extension on the manufacturer’s one-year warranty. That gives you two years of coverage for mechanical or electrical failures that occur after normal use. 4. Extra cash back (for Executive members)For Costco Executive members, you can earn 2% back on laptop purchases. Not only that, but you could also earn 2% back if you have the Costco Anywhere Visa® Card by Citi, for a total of 4% back on your laptop. If you spent $2,500, then you would earn $100 in total rewards. It pays to shop around Costco’s prices are typically on par with other electronics stores, unless those stores are having sales. For example, I was recently looking for a 2023 16″ Macbook Pro. I found the laptop was most expensive on Apple’s website ($2,499), while it was priced slightly cheaper on Costco.com ($2,449.99). However, on Best Buy’s website, the same Macbook was $2,299, while on Amazon it was even cheaper — $2,249. For the sake of your personal finances, it pays to shop around. Do keep in mind, however, that other stores may not offer the same benefits you get at Costco, such as the 90-day return window or two-year extended warranty. I would also check out Costco’s laptop prices in-store first, as online prices tend to be higher. Compare that price with other stores to get a better idea of who has the better deal.
By: Lyle Daly |
Updated
– First published on July 6, 2023
Lower class, middle class, and upper class are all widely used, but rarely defined terms. For some people, lower class means living in poverty, upper class means a life of luxury, and middle class is everyone else.Thanks to reports by the U.S. Census Bureau, we can get a much more accurate idea of what these terms mean financially. There are two reports that are useful here:Income in the United States: 2021 provides a breakdown of household income by quintile, so we can see the bottom 20% of incomes, the next 20%, and so on, up to the top 20%.The Wealth of Households: 2021 provides the median wealth of households at each income quintile.If you’re interested in how much the typical household in each group is worth, how much money they make, and where your own personal finances land, you’ll find the answer below.Average net worth for the lower classMedian net worth: $12,000Income: $28,007 or lessThe bottom 20% of earners make up the lower class. Household incomes top out at $28,007, which is well below the average U.S. income.This is a good time to clarify that these terms are only based on someone’s current net worth and income. Many young adults and students will be in the lower class because they haven’t had time to build their careers and net worth yet.Average net worth for the middle classThe middle class is a broad group of people, so it’s separated into three categories: Lower middle class, middle class, and upper middle class. Here’s the financial data for each one.Lower middle classMedian net worth: $61,260Income: $28,008 to $55,000The lower middle class consists of those in the 20th to 40th percentile of household income. That makes a sizable difference, as this group has a median net worth more than five times greater than that of the lower class.Middle classMedian net worth: $145,200Income: $55,001 to $89,744The middle class consists of those in the 40th to 60th percentile of household income. Their median net worth is nearly two and a half times that of the lower middle class.Upper middle classMedian net worth: $269,100Income: $89,745 to $149,131The upper middle class consists of those in the 60th to 80th percentile of household income. The median net worth is nearly double that of the middle class.Average net worth for the upper classMedian net worth: $805,400Income: $149,132 or moreThe top 20% of earners are the upper class. There’s a significant difference in wealth for this group. Their median net worth is about three times that of the upper middle class and about 67 times more than that of the lower class.Does class matter?It’s interesting to see what kind of net worth and income correspond to each class. Keep in mind though that these are just terms, and where your own numbers fall isn’t really what matters.Net worth matters. It’s one of the better ways to measure how you’re doing financially. Over the course of your career, if your net worth is increasing, it’s a sign you’re managing your money well. Income also matters. You don’t need to make a huge salary, but a high income certainly has its benefits.So, for your own financial health, it’s a good idea to get into these financial habits:Spend less than you earn.Save and invest money every month.Contribute to retirement accounts.Look for opportunities to increase your income.These habits will all grow your net worth and potentially your income, meaning they could help you move up in “class.” But being part of the middle class, the upper middle, or the upper class isn’t the point. What matters is managing your own finances well, so you’re comfortable and happy with where you’re at.
By: Emma Newbery |
Updated
– First published on July 6, 2023
What happenedDollar Tree branched away from its trademark $1 dollar pricing at the end of 2021, when it pushed prices of the vast majority of products up to $1.25. That’s about to change again. According to Winsight, the company told its annual investor conference it plans to bring the cost of 300 or 400 products back to $1. It’s also looking to roll out a mix of price points at $3, $4, and even $5.So whatIncreasing numbers of shoppers have turned to dollar stores to save money in the face of rising prices. On the face of it, Dollar Tree’s moves could be good for Americans’ bank accounts. But without knowing which items will be affected, it is hard to know how much it will benefit consumers.Reverting to $1 for certain products could reduce costs. Selling more items at higher price points may let it broaden its selection while still retaining competitive prices. Particularly as the retailer is aggressively expanding its frozen and refrigerated food options, which can often be a good money-saving option.Now whatDollar stores can be a great way to reduce your grocery costs. The trick is to know which items offer the best value and be prepared to shop around — dollar stores tend to stock a limited range of items.Here are some tips to getting the most out of dollar stores:Don’t assume dollar stores always cost less: Low prices make it easy to get carried away in a dollar store. Price comparisons can still be worthwhile, especially on branded products. The Krazy Coupon Lady says it found brand-name products at Walmart for 60% less than in Dollar Tree.Compare like with like: Dollar stores sometimes shrink the sizes of products to keep costs low. Don’t be fooled by the sticker price alone — look at the price per 100g or price per 100ml to get a realistic picture.Stack your discounts and rewards: Several cash back apps work with Dollar Tree and similar stores, as do certain coupons. If you have a rewards credit card, you can also use it to earn points. Stacking discounts and rewards can add up and save you money at checkout.Check the labels: Pay attention to sell-by dates on your dollar store purchases. One of the consequences of having fewer people on staff is that products that are past their expiration date might get left on the shelves.Doing at least some of your shopping at stores like Dollar Tree may save you money. And bringing some of its products back to $1 could ease the pressure on your wallet — as long as the package sizes don’t shrink alongside the price tags.
