Money Management

A Costco Executive membership isn’t right for everyone. Find out how you can downgrade your membership if you’re not getting your money’s worth. [[{“value”:”

A Costco Executive membership is a good deal if you shop there often. For $120 per year, $60 more than the cost of a Gold Star membership, you’ll earn a 2% annual reward on qualified Costco, Costco.com, and Costco Travel purchases. You can earn up to $1,000 per year this way.

Lots of members take that deal. At the end of last year, nearly half (45%) of Costco members had Executive memberships.

But what if you’re not earning enough to make back the $60 upgrade fee? Costco makes it easy to downgrade, and it will even make you whole on what you paid.

How to downgrade a Costco Executive membership

To downgrade a Costco Executive membership, visit a Costco warehouse and go to the membership counter. Ask them to downgrade your membership. They may try to convince you to keep it — Costco is known for pushing its Executive memberships. Just make it clear that you want to downgrade, and they’ll do it for you.

Costco has a 100% satisfaction guarantee, including on its memberships. If you downgrade before you’ve received your 2% annual reward, you’ll get your $60 back. Any rewards you’ve earned will be forfeited since you’re not keeping the Executive membership.

If you’ve already received your 2% annual reward, Costco will deduct that from your refund. For example, if you earned $30 in rewards, it will refund you $30.

You won’t receive a refund if you earned more than $60 in rewards. In that case, you’ve already come out ahead on the cost of the Executive membership. Since it’s saving you more money than you’re spending on it, you may want to reconsider downgrading, unless you won’t be shopping at Costco as much.

Which Costco membership is right for you?

It’s easy to decide whether you should get a Gold Star or Executive membership at Costco. The magic number is $3,000 in Costco spending every year, which averages out to $250 per month.

If you spend more than that, you’ll earn more than $60 in rewards from an Executive membership. That would make it worth the money, since you’re only paying $60 more for it. If you spend less than $3,000 at Costco every year, then you should stick to a Gold Star membership.

Whichever option you choose, you can also earn rewards at Costco using cash back credit cards, as long as they’re Visa cards. This is a good way to stack rewards if you have an Executive membership or to earn at least some cash back if you don’t.

Keep in mind that while most Costco purchases qualify for the 2% annual reward, some don’t. You can get information about all the exclusions in the Executive membership terms, but here are a few examples:

GasTobacco productsCostco food court purchases

If Costco is one of the places you shop most often, then an Executive membership will probably be worth it. And remember that you can see for yourself risk free. The worst thing that could happen is that you don’t earn at least $60 back. If so, you can just downgrade and get a refund.

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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 and Visa. The Motley Fool has a disclosure policy.

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Hitting the road could cost more than you bargained for. Read on to find out which additional expenses should be on your radar. [[{“value”:”

If you’re planning to take a vacation this year, you may be looking to take a road trip rather than fly to a destination. A road trip could save you money if you’re traveling as a larger group, as opposed to having to pay for multiple flights.

Plus, you have more flexibility when you hit the road. You can stay longer at destinations you’re enjoying and extend your trip on a whim without having to worry about catching a return flight home.

Now, if you’re taking a road trip, you’ll obviously have to budget for expenses like gas, lodging, and meals. But here are some less obvious expenses to account for as well.

1. Tolls

In some parts of the country, you can drive on a highway without incurring a toll for hours. In other areas, there’s a toll every 12 minutes. You can use sites like TollGuru to estimate your tolls based on your route so there are no surprises.

2. Parking

If you’ll be visiting a larger city during your travels, you may need to pay for parking. Similarly, not every hotel offers parking as a free amenity, so do your research beforehand and factor in the cost. In some cities, you may be able to use a site like SpotHero to find lower-cost parking and even reserve a spot ahead of time so you aren’t shut out.

3. Speeding tickets

When you’re driving for what could be several hundred miles a day, it’s natural to want to get to your destination a bit faster. But that desire might drive you to speed. And if you’re caught, the fine could be huge.

One way to potentially avoid a speeding ticket is to use an app like Waze, which will alert you when you’re exceeding the speed limit for the road you’re driving on. But otherwise, you may want to pad your road trip budget in case you’re slapped with a fine.

4. Satellite radio

Many people look forward to road trips because they’re excited about the destinations they’re headed to. But the right entertainment could make your time on stretches of highway more fun.

As such, you may want to include the cost of satellite radio in your trip budget.

You may, however, be able to sign up for a promotion that saves you money initially. SiriusXM, for example, has a deal where its music and entertainment package costs $1 for your first three months, and then $18.99 a month afterward. Since you can cancel at any time, you can potentially sign up for this package right before your trip and cancel the service right after if you decide it’s not needed.

While taking a road trip has the potential to be less expensive than flying, that’s not guaranteed. Be mindful of these added costs so you’re not caught off guard. And remember to use your credit cards efficiently in the course of your travels. If you have a card offering extra cash back on gas, swipe that one at the pump. The savings could really add up.

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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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Emergency savings could help you survive a period of unemployment. Read on to see why they’re so important to have. [[{“value”:”

When my friend Sarah lost her job last March, she called me in a panic. Not only was her layoff completely unexpected (she unfortunately got downsized during her company’s first round), but she had almost no money in her savings account to fall back on.

At the time, Sarah had about $1,000 in the bank. And that’s better than a lot of people are doing. Data released last year from SecureSave found that 63% of Americans couldn’t cover a $500 emergency expense. So Sarah was at least in a position where she was able to do that.

However, her $1,000 in savings was only enough to cover about 25% of her expenses for a single month. It couldn’t even cover her entire monthly rent. And at the time, she had no idea how long it would take to find a new job.

Thankfully, Sarah didn’t go into debt during her unemployment stint because she was granted a pretty generous severance package. But that’s not something everyone can fall back on.

A payout that saved the day

Sarah had been with her company for four years before being laid off. That left her eligible for a severance package that equaled four months of her regular pay. She also got a small payout on top of that for accrued vacation time she hadn’t taken.

But severance pay isn’t guaranteed. In some cases, companies are required to offer some type of severance in the event of mass layoffs. But that doesn’t mean every single person who loses their job is entitled to that sort of payout.

Also, the amount of severance being offered often hinges on tenure. Someone new to a job might get a lot less severance pay in the event of a layoff than someone who’s been with their company for many years.

On Sarah’s end, it took a little over three months to find a new job. And to her credit, she dove into her job search right away, networking like a beast and aggressively putting her resume out there. But she used up almost all of her severance to pay her bills in that interim period of being unemployed. Had it taken her an extra couple of months to find a job, she would’ve risked landing in debt.

Always have emergency savings to fall back

Sarah got lucky in that she was entitled to severance pay in the first place, and got enough of it to cover her living costs while she was out of work. But getting severance isn’t a given. So that’s why it’s really important to build a solid emergency fund so you have a means of paying your bills if you’re laid off unexpectedly.

As far as how much to save goes, the general convention is that it’s wise to sock away enough money in emergency savings to cover a minimum of three months of essential expenses. But think about your role and industry, and what the typical process for getting hired is. If you know people in your field who were searching and interviewing for jobs for five months before getting an offer, you may want to consider saving more like six months’ worth of living expenses.

Your personal financial circumstances should also dictate what your emergency fund looks like. If you’re on a month-to-month lease and could, in a worst-case scenario, give your landlord 30 days’ notice and move back home while unemployed, you may be OK to only save three months’ worth of expenses in your emergency fund. If you’re on the hook for a mortgage, you may want to aim a lot higher.

Even since getting settled into her new job, Sarah has been diligently adding to her emergency fund to eventually save enough to pay her bills for six months. If you don’t have much in the way of emergency savings in the bank, definitely try to boost your cash reserves.

Layoffs have a way of happening unexpectedly. And you really don’t want to risk racking up piles of debt due to losing your job through no fault of your own and not having adequate savings to fall back on.

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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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Buying an EV is a big decision. Here are three questions to ask yourself now so you’re not caught off guard by problems later. [[{“value”:”

Buying an electric vehicle (EV) is a great way to do your part for the planet, but it’s not a decision you want to make lightly. Though they can be cheaper in the long run, EVs take a serious toll on your wallet in the short term. They also have certain limitations at present that could make them a poor choice for some drivers.

Here are three important questions worth asking before you purchase an EV. If any of them give you pause, it might not be the best decision for you right now.

1. Does the model you’re looking for qualify for EV tax credits?

The average new EV cost $53,469 in July 2023, according to Kelley Blue Book. That’s roughly $5,000 more than the typical gas-powered vehicle. It’s true there are some used EVs available, but these are less common. If you want to make the switch, more than likely, you’ll have to pay up for a new model.

To help with this issue, the federal government has issued tax credits of up to $7,500 for new EV purchases and $4,000 for used EV purchases. But only certain models qualify. You also need to meet certain income requirements to claim this credit, which you can apply at the point of sale to reduce your purchase price.

It’s best to check the list of eligible vehicles before you go ahead with the purchase. If the model you’re interested in doesn’t qualify, you may want to consider a different one.

2. Can you afford all the other costs that come with owning an EV?

The purchase price is only part of what you’ll have to spend to own an electric vehicle. You’ll also need auto insurance, and the premiums for EVs are quite a bit higher than rates for their gas-guzzling counterparts. That’s because EVs have more advanced components and fewer technicians know how to work on them.

Before purchasing your EV, you may want to price out rates with some of the best car insurance providers to see if it’s something you can afford. Some companies have discounts for EVs, which might help you save a little.

Then, there are charging costs to think about. Public charging stations are becoming more commonplace, but they’re usually slower than in-home chargers. These give you the freedom to charge your vehicle whenever you like, including overnight when you may pay less for electricity. But it’s possible to spend well over $1,000 to have one of these installed in your home.

You can always put that off for later if you can’t afford it right now. But then you need to make sure you have a plan for how you’ll charge your vehicle in the meantime.

3. Is the area where you’ll be driving hospitable to EVs?

Public EV charging stations are becoming more common, as discussed above, but there still aren’t nearly as many of them as there are gas stations. This can lead to difficulty finding a charging station and long lines when you get there. Even worse, many charging stations are poorly maintained. If a station isn’t working, you may have to go searching for a new one.

This winter, we’ve also seen another issue with EVs: their batteries don’t do very well in cold temperatures. For those of us in the northern half of the country, that could be a serious problem.

If you worry about either of these things becoming issues, an EV might not be the right choice for you right now. A hybrid could be a great alternative, though.

It might be frustrating if you want an EV but aren’t ready to purchase one. But it’s not all bad news. As time goes on, prices are likely to come down, technology is going to improve, and that could translate into lower insurance and repair costs as well. Keep checking prices every few months until you find something that fits into your 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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