Money Management

There are more benefits to being a digital nomad than travel and a lower cost of living. Discover the little-known perks that come with this lifestyle. [[{“value”:”

Lots of people like the idea of being a digital nomad, and it’s usually for two reasons: It lets you travel as much as you want, so you don’t need to see what you can fit in one or two weeks of vacation time. And you can afford a much better lifestyle, since many countries have a lower cost of living than the United States.

Those are both great benefits, but they’re far from the only ones. After more than five years as a digital nomad, I’ve found that there are lots of other things I like about it. Here are the perks that don’t get discussed as often.

1. It gives you a more minimalist life

As anyone with an Amazon Prime membership knows, it’s easy to accumulate things we don’t really need. There’s no better way to practice minimalism than to become a digital nomad.

When you need to pack everything you’ll take to start your new life, it forces you to make tough decisions. You carefully consider if each appliance, gadget, and piece of clothing deserves some of the limited space in your suitcase. Arguments that “I may use this someday” or “I paid $30 for this” suddenly aren’t as convincing.

I had never tried minimalism before. Like many digital nomads, I started following its principles more and more as I got tired of lugging around massive, overstuffed suitcases.

What I love about this is how it helps you figure out what you truly value. I haven’t taken minimalism to an extreme so I can fit everything in one backpack — I still don’t exactly travel light. But I’ve learned to prioritize the possessions that matter to me and leave the rest behind.

2. You’ll probably have fewer bills to pay

Most digital nomads live in furnished rentals on a short-term basis. These normally cost more than unfurnished rentals, but they almost always include utilities. You won’t need to pay for internet, electricity, water, and gas. It’s more convenient for budgeting and could save you $100 or more per month.

You also won’t need a car anymore. That means no car payment, auto insurance, gas, maintenance, or parking to worry about.

You might end up spending more on taxis and ride-hailing services. I’ve found that I still spend less on transportation than I used to on insurance and gas. If you don’t mind walking and taking public transportation, it’s not that expensive to get around.

3. You could save and invest much more

A lower cost of living is a big advantage of being a digital nomad. In many parts of the world, your salary will go much further. I’ve lived in three-bedroom luxury apartments for under $1,000 per month.

Digital nomads often look at this as a way to afford a better lifestyle. That’s one benefit, but it also allows you to save much more. Having lower expenses is a tremendous opportunity to turbocharge your savings and ramp up your investing.

If you’re going to be spending less on bills as a digital nomad, I recommend saving a portion of that newfound money. There’s nothing wrong with using some of it to enjoy yourself. But don’t blow it all on going out and living the high life. Try to find a balance between enjoying the present and building wealth for the future.

4. You can really get to know the places you visit

You don’t just get to see more of the world as a digital nomad; you get to learn more about the places you visit and experience them like a local would. For me, this is the best part. When you’re visiting for a few days, you’re under pressure to do all the popular activities. No one wants to come back from Paris without seeing the Eiffel Tower.

When you’re visiting for weeks or months, you don’t need to rush. You’ll be working, shopping for groceries, and getting the experience of living in that city. The longer you stay, the more you’ll learn about where you are and what the culture is like. This is why I prefer the “slowmad” approach — traveling slowly and spending months in one place.

5. You become a pro at traveling

Traveling isn’t something most people do all that often. When Statista asked Americans how many times they’ve traveled in the last year, nearly half (46%) had taken zero or one trips.

When you’re a digital nomad, you’ll be traveling much more. And that means you’re probably going to get very good at it. You’ll learn how to get the best deals, whether you’re paying in cash or miles earned on your travel credit cards. You’ll know exactly where to store your laptop so it’s easy to take out for airport security.

Most of all, you’ll simply be more comfortable with traveling. When you only do it once in a blue moon, it can be stressful to figure out what you need to do and where to go. When you travel often, it becomes a regular part of the routine.

The digital nomad lifestyle isn’t perfect. But it has plenty of unsung benefits that could be good for your finances and your quality of life.

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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. Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.

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Adjustable-rate mortgages are always bad news, right? Learn why one writer is thinking more about them as she enters the housing market. [[{“value”:”

It’s finally time — I’m officially house hunting. I have a real estate agent, and while the market is quite sluggish in my city at present, I hope things will pick up as spring comes out of hiding. I did my due diligence and shopped around with several mortgage lenders.

Mortgage rates are a source of frustration for me — Freddie Mac notes that the average rate on a 30-year fixed mortgage is currently 6.74%. But one of the mortgage people I talked to is a broker — he’s tasked with matching buyers to mortgages offered by banks and credit unions. He noted that a local credit union has adjustable rate mortgages (ARMs) available for about 1 percentage point lower than a fixed mortgage.

However, my natural cautiousness and desire to make this experience with homeownership better than my last one has me wondering if this is the right move. Let’s take a closer look at ARMs, as well as their less-than-sterling reputation, to decide if they’re a good idea.

What can an ARM do for you?

In short, you might be able to save money on mortgage interest with an ARM. When you get a 30-year fixed-rate mortgage, the rate is just that — fixed for the entire 30 years of your term. You are of course free to refinance that mortgage, ideally to a lower rate, at any point. And you can also switch the term of your mortgage, turning a 30-year mortgage into, say, a 15-year one.

But ARMs are different. Three common types are called 5/1, 7/1, and 10/1 (and these were the types pitched to me by the mortgage broker). The first number is how long your initial rate will stay the same, in years — five years, seven years, or 10 years. The second number is how often the rate can change (adjust) after that. So for a 5/1 ARM, you get the same rate for the first five years, then once a year thereafter, your mortgage rate can change.

Who are ARMs best for?

My colleague Matt Frankel recently wrote about ARMs and discussed the buyers they might be right for:

Buyers who don’t intend to stay in the house long enough for their mortgage rate to adjust — if you sell before the rate changes, you’re not at risk of paying more.Buyers with lower credit scores who are actively working to improve them, so they can qualify for a better rate on a fixed-rate refinance loan.

As a survivor of 35 moves, I am sincerely hoping to move into the house I buy and stay put for a good long while (ideally more than five years). And my credit score is already over 800 — I intend to keep it that way, which means that when (if?) mortgage rates go down, I shouldn’t struggle to refinance my mortgage to a lower rate.

If you fit into either (or both) of these categories of home buyer, it might be worth considering an adjustable-rate mortgage as you’re shopping around. You might find, as I did, that the rates on them are significantly lower than fixed rates.

Exercise caution with adjustable-rate mortgages

I referenced the dodgy reputation of ARMs above. A lot of people associate ARMs with the 2008 Great Recession and the subprime mortgage crisis, but this might be overstating things just a bit.

Leading up to 2008, many Americans who could not afford to buy homes (due to their credit, debt, or lack of income) ended up with ARMs. Some of them came with “teaser rates” that were lower for two or three years, then shot up. These loans sometimes also came with negative amortization, meaning that early payments didn’t fully cover the payment amount plus interest owed — and the loan balance grew as a result.

Thankfully, guardrails for borrower income verification put in place after 2008 have made today’s ARMs less risky, and the type of borrowers using them are different now. In fact, the Urban Institute’s data analysis found that 2022 ARM borrowers actually had higher credit scores than fixed-rate borrowers, for example.

Is an ARM right for you?

If you decide to buy with an ARM, there are a few ways to ensure you won’t be making a huge and expensive mistake. For starters, really dig into your budget and decide how much you’re comfortable spending every month on predictable housing costs (mortgage payment, interest, taxes, insurance, or PITI). For me, that figure is double what I currently pay for rent and renters insurance.

Since I know how much I want to spend every month, I can put a given house’s price into The Motley Fool Ascent’s mortgage calculator and see an estimate of what I’d be paying. Regardless of your own budget, it’s best to keep your predictable monthly housing costs below 30% of your income.

I’m leaning toward the 7/1 or 10/1 ARM, because five years is not very long, especially with as much turmoil as we’ve seen in just the last four years of the mortgage market. If I have seven or 10 years with a lower rate than I could get with a fixed mortgage, it’s my hope to pay extra toward my home’s principal and have a significantly lower balance to refinance when the time comes.

Is an ARM right for me? It might be — I haven’t even found a house worth making an offer on yet, so I can kick this decision down the road a bit. Are they right for you? Run your own numbers to decide.

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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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Families know the importance of sticking to a budget. Read on to find out how a Sam’s Club membership can help save your family money. [[{“value”:”

As a parent with two kids, I know how expensive everyday life can be. Camps, extracurricular activities, vacations, and the week’s groceries all add up fast. Which means finding a few ways to save money can go a long way to keeping your finances on track.

Many families, including mine, use discount warehouse club memberships to help reduce costs, and Sam’s Club is a popular choice. Here are five reasons why parents may want to consider joining.

1. Discounts on youth glasses and contacts

Both of my kids needed glasses at a young age and I had sticker shock when they each got their first pair. Had I taken them to Sam’s Club, my wallet would be a little fatter right now.

Many Sam’s Club locations offer optical services, including eye exams. According to AllAboutVision, the exams cost an average of just $61.

You can also order your glasses and contacts at a discount. Small frames start at just $59. While the discount applies to all members, if you have the Sam’s Club Plus membership, you’ll receive an additional 20% off when you order prescription glasses.

2. Discount drug prescriptions for the entire family

A Sam’s Club membership not only means you receive discount prices on prescription drugs, but your spouse and dependents do as well.

All Sam’s Club members are eligible for specific discounts on prescription medication, which are an average of 65% lower than retail prices, according to Sam’s Club, and can be up to 80% less.

Sam’s Club Plus members receive additional discounts, including a 30-day supply of over 600 generic drugs for $10 or less.

3. Inexpensive telehealth

Juggling school and work schedules when your kid is sick is no easy task. And sometimes getting to the doctor is the hardest part. Thankfully, Sam’s Club offers inexpensive telehealth options for members.

Sam’s Club members can access urgent care services for minor injuries and illnesses, telehealth therapy sessions for kids aged 10-17, and adult therapy. Urgent care video calls are available 24 hours a day, seven days a week, and cost just $45.

Therapy sessions with a licensed therapist for emotional and mental health can happen in as quickly as 72 hours and cost just $79.

4. Discounted events and shows

Taking your family out for a sporting event or to see a play is more expensive than ever. A recent Wall Street Journal survey found that 60% of Americans have reduced spending for live entertainment because it’s too costly.

Thankfully, Sam’s Club members have access to discounted theater shows and professional sports events, including baseball, hockey, basketball, football, soccer, and more.

Sam’s Club says members can save up to 50% on entertainment shows and events tickets, and all tickets are verified and 100% guaranteed.

5. Cheaper vacations

The average cost for a three-day vacation — including domestic flight, hotel, rental car, and meals — for a family of four is about $3,600. Many families go on vacation for an entire week, so it’s easy to see how this cost can climb even higher.

However, families can likely incur a smaller credit card tab by finding their vacations through Sam’s Club. The company offers more than 8,000 travel and entertainment experiences at discounted rates. For example, Sam’s Club offers a five-night vacation package to Universal Studios, including hotel and park tickets, 25% cheaper than the retail price.

Now is a great time to grab a membership

Sam’s Club is currently offering their basic membership at a 50% discount off the full price until May 1. This means you’ll pay just $25 for an annual membership.

With all the ways for families to save money through Sam’s Club on entertainment, vacations, and healthcare — as well as discounted bulk items and gas — a half-priced membership is an excellent deal for anyone’s budget.

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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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Laddering CDs can help you avoid early withdrawal penalties. But is this strategy worth it when you’re not tying up a lot of money? Read on to find out. [[{“value”:”

It’s important to have money in a savings account for emergencies at all times. In fact, your emergency fund should ideally contain enough cash to cover a minimum of three full months of essential living expenses. But if you have money at your disposal beyond that, then it could be a good idea to open a certificate of deposit (CD) — especially now.

The Federal Reserve raised interest rates numerous times during 2022 and 2023 in an effort to slow the pace of inflation. That drove borrowing costs up across the board, but it’s also led to higher CD rates. So now’s a good time to open a CD — before the Fed starts to cut rates and CDs start to pay less.

Now, you’ll often hear that laddering your CDs is a smart move. With a CD ladder, you split your available funds into portions and open a series of CDs with different maturity dates. This way, you have some money freeing up at different times during the year, as opposed to having all of your money tied up for the same duration.

But what if you only have $1,000 to put into a CD? Is a ladder still worth it? Here’s why it could be.

It’s all about minimizing risk

With a CD, you get the benefit of a guaranteed interest rate on your money during its term. The interest rate on your savings account, by contrast, could fall with market conditions.

Granted, it could also rise. But at this point, the general consensus is that savings and CD rates are only going to start to fall from where they are today, not go up. So the benefit of a CD is that if you open one at, say, 5%, you’re guaranteed 5% on your money until your CD matures. If you put money into a savings account that’s paying 5% right now, in four months, you might only get 4%. And in six months, your APY may be down to 3.5%.

On the other hand, with a CD, you’re required to commit to keeping your money in the bank for its duration. And taking an early withdrawal could result in costly penalties. There’s no “official” penalty for early withdrawals that banks have to universally conform to. Rather, each bank can make its own rules.

When you open a CD, your bank will have to inform you of the potential penalties as part of its disclosure process. But as an example, the penalty for taking an early withdrawal from a Capital One CD with a term of 12 months or less is three months of interest. That’s a penalty you’d probably rather avoid.

And that’s why laddering CDs makes sense — even when you’re only putting a relatively small sum in the bank. You never know when an expense might arise that your emergency fund can’t handle, so having some cash free up sooner rather than later could be helpful.

In fact, let’s say you have $1,000 to work with right now, so instead of opening a single 12-month CD, you open four different $250 CDs with maturities of three months, six months, nine months, and 12 months. You might lose your job in a few weeks and deplete your emergency fund. If you’re on the cusp of starting a new job but just need a small amount of cash to tide yourself over until your next paycheck, having your first $250 free up after three months could be your ticket to avoiding a penalty.

It’s good to give yourself options

Basically, what a CD ladder gives you is flexibility and protection against penalties (to some degree, at least). So it’s worth taking a laddered approach — even if the sum you’re putting into the bank isn’t so substantial.

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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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Costco Executive members earn a 2% annual reward on qualified purchases. Learn how to upgrade your membership and start earning rewards at Costco. [[{“value”:”

Costco shoppers often start with a Gold Star membership. It’s the most affordable option, at $60 per year. Eventually, you may want to move up to the Executive membership, Costco’s highest level of membership. It costs $120 per year, but you earn a 2% annual reward on qualified purchases.

Even though it costs twice as much, it’s a popular choice. Executive members made up 45% of Costco’s paid membership at the end of 2023. If you’re ready to upgrade, here’s how to do it.

The three ways to upgrade to a Costco Executive membership

Here are your options to upgrade to a Costco Executive membership:

Online: Log in to your Costco account online. If you haven’t already, you can create one using your membership number. Select “My Account,” and then “Renew Membership.” Click on “Upgrade Membership,” go through the payment process, and you’ll be an Executive member.Over the phone: Call Costco Membership and Warehouse Services at 1-800-774-2678.In person: Go to the membership counter at a Costco warehouse and ask to upgrade your membership.

You must be the Primary Member or the Account Manager on your membership to upgrade it. So for example, if you have a membership with your spouse and they’re the Primary Member, they would need to handle the upgrade.

Costco prorates the $60 upgrade fee ($120 for the Executive membership, minus the $60 you already paid for a Gold Star membership) for the number of months left in your membership year. If there are six months left, then you’ll be charged $30. At renewal, you’ll be charged $120 per year going forward.

Benefits of a Costco Executive membership

The best benefit of being a Costco Executive member is the 2% annual reward. You earn this on qualified purchases at Costco, Costco.com, and Costco Travel. Most purchases are eligible, with the most notable exclusion being gas.

So, if you spend $5,000 per year on qualified Costco purchases, your Executive membership would save you $100. The maximum annual reward you can earn is $1,000.

Executive members also receive exclusive offers and extra benefits on some Costco Services. For example, if you buy auto insurance through Costco, an Executive membership will also get you roadside assistance. If you buy homeowners insurance through Costco, you’ll get lockout assistance.

Is a Costco Executive membership right for you?

If you spend more than $3,000 per year at Costco, you should get an Executive membership. Once you’ve spent $3,000, that’s a $60 annual reward already, enough to cover the cost difference.

Remember that you don’t earn rewards on Costco gas purchases. If a lot of your Costco spending is at its gas stations, that will affect how much you earn back. But if you shop at its warehouses and website regularly, you’ll have plenty of opportunities to earn rewards.

You can try upgrading risk free to see if you like it and how much you earn. Thanks to Costco’s satisfaction guarantee, if you decide you don’t want to keep your Executive membership, you can downgrade it and get a refund for the upgrade fee. All you need to do is go to the membership counter and ask.

For that reason, it’s never a bad idea to give the Executive membership a try. The worst-case scenario is that you cancel it and get your money back. Or, it could end up saving you quite a bit of money.

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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.Lyle Daly 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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Many top cryptos are still worth 40% or 50% what they were in 2021. Find out what lessons can be learned from the crypto crash. [[{“value”:”

When you research crypto investing, you’ll find warnings aplenty. I’ve lost count of the number of times I’ve written the words “volatile,” “speculative,” and “risky” in cryptocurrency articles. But that knowledge doesn’t stop it from stinging when those investments fail.

I got swept up in the last crypto frenzy and it cost me thousands of dollars. From crypto platform collapses to interest-paying DeFi, I’m sharing my mistakes in the hope you can avoid making the same ones. Here are three biggies.

1. I invested in too many altcoins

Bitcoin (BTC) recently erased the losses of recent years and climbed to a new all-time high. But that doesn’t apply to all cryptocurrencies. I have coins in my portfolio that are still down 70% or 80%, and some of them are relatively established projects.

READ MORE: Best Bitcoin Exchanges

A look at how the top 15 cryptos from November 2021 are faring now illustrates this. For all the talk of an end to crypto winter, outside of the two stablecoins and Bitcoin, none of them have yet recouped their highs. If you’d invested $100 in each of the top cryptos (excluding stablecoins), your $1,300 investment would be worth $710 today.

Actionable takeaway

Be cautious about straying too far from Bitcoin and Ethereum. Cryptocurrency investing is already risky, and smaller projects — even popular ones — carry more risk. For example, Terra’s LUNA was in the top 15 before it collapsed completely. Take your time and research each crypto carefully before you buy.

Read the whitepaper and look at what the project promises to do. Research the leadership and developers to see if you think they can deliver. Find out about the economics behind the token, so you understand how new coins will be produced and how many might wind up on the market.

2. I used crypto earn programs

Crypto earn programs come in various flavors, but all of them carry risk. Some projects take your crypto and lend it out to generate rewards. At one point, one platform was offering a 20% APY. Others offer staking rewards, which involves tying your crypto up to contribute to the blockchain’s operation. The DeFi world also offers yield farming, where you get rewards for providing liquidity.

Actionable takeaway

The SEC has cracked down on a lot of lend-earn programs in the U.S. Some remain, especially on DeFi platforms. If you’re looking at ways to generate passive income from your crypto, tread carefully. Understand exactly where the rewards are coming from. And if they are being paid out in a platform’s native token, look at how much that token is worth.

3. I had money on crypto platforms that collapsed

A lot has been written about the collapse of FTX and other crypto platforms. Some investors will recover some of their assets from now defunct platforms, but there are no guarantees. Cryptocurrency exchanges are not banks and are not protected by FDIC insurance against platform failure.

Actionable takeaway

Consider holding your crypto in a crypto wallet that you control rather than leaving it on a crypto exchange. That way, your funds will not be at risk if the platform goes under. If you go this route, make sure you store your security phrase in a safe place and keep your anti-virus software updated.

Why I haven’t given up on crypto

I still hold crypto investments for several reasons. First, I want a diversified portfolio that goes beyond stocks and property. Second, I think blockchain technology has potential. That’s partly because digital currencies could make it cheaper and easier to manage money. It’s also because the concept of decentralization is powerful. Finally, I am comfortable with having a small percentage of my portfolio in high-risk assets in the small hope that one day they will outperform.

Even so, there are a lot of questions about what will happen to the crypto industry. We don’t know what impact increased regulation will have, nor how the technology will develop. That’s why it is important to only invest money you can afford to lose. If you want to invest in riskier assets, make sure they only make up a small percentage of your portfolio.

Alert: our top-rated cash back card now has 0% intro APR until 2025

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! 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.Emma Newbery has positions in Avalanche, Binance Coin, Bitcoin, Cardano, Chainlink, Ethereum, Polkadot, Solana, and XRP. The Motley Fool has positions in and recommends Avalanche, Bitcoin, Cardano, Chainlink, Ethereum, Solana, and XRP. The Motley Fool has a disclosure policy.

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