Money Management

New to Costco.com? Here’s how to navigate your first online Costco experience. [[{“value”:”

Many people are used to doing their Costco shopping at, well, Costco, as opposed to the company’s website. The beauty of visiting a Costco warehouse is getting to not only check out new items in person, but often, getting to sample food items you’ve never gotten to taste.

But there’s another option for shopping at Costco — making purchases on Costco.com. Shopping at Costco online, though, is a pretty different experience than shopping at the store. Here are some things to know if you’ll be shopping on Costco.com for the first time.

1. You might see a much broader selection of items than what you find in stores

If you’ve ever been to a Costco warehouse, you know the stores tend to be huge. But even so, they can only hold so much inventory.

The benefit of shopping on Costco.com is that you’ll typically find an even wider selection of inventory — especially in certain categories. If you’re looking for furniture, for example, that’s one area where Costco’s website is likely to have more options than your local store. You may also find a host of items that are exclusive to Costco.com and aren’t available at any warehouse club location.

2. You’re likely to pay extra for online purchases

The items you order from Costco.com need to be shipped to your door. And often, the cost of shipping is built into the prices you see listed on the site. In other cases, you may need to meet a minimum order, such as for two-day delivery, to get shipping for free, but it’s frequently an option.

However, while you may not be charged a shipping fee directly, you’ll end up paying for shipping indirectly by placing an order on Costco.com. That’s because the online price for items also available in stores is almost always higher. If there’s a given item you need that you aren’t in a hurry to purchase, it pays to note the online price and then see if you can find it at your local Costco store for cheaper.

3. You can shop on Costco.com without a membership, but it’ll cost you

You may be surprised to learn that you don’t need a membership to shop at Costco.com. However, certain items on the site are designed members-only, so those will be off limits if you don’t have a membership number to enter along with your order.

You should also know that as a non-member, you’ll generally face a 5% surcharge over posted prices for Costco.com orders. Costco uses the revenue it collects from its membership fees to help offer its amazingly low prices. So if you’re not paying for a membership, Costco needs to make up for that by charging you more.

You may want to consider a Costco membership if you plan to shop on Costco.com multiple times a year. It could be a smart financial decision. You can even decide to join Costco on the spot if you find that you’re loading up a large online cart and don’t want to be charged 5% extra.

Shopping on Costco.com is by no means the same as shopping in the store. It’s good to know what you’re in for when you do your Costco shopping online so there are no unpleasant surprises.

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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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This one move could save you thousands of dollars on your taxes. Keep reading to see how. [[{“value”:”

There are plenty of deductions and tax credits available in the United States tax code that can help you save hundreds or thousands of dollars each year. But perhaps the fastest way to save money on your taxes is to simply pay a visit to your payroll department and tell them you’d like to increase your retirement contributions.

How much can you set aside for retirement?

The amount you can set aside for retirement depends on the type of retirement plan you have at work, your income, and a few other factors. Let’s start with the common workplace retirement plans.

401(k)s and more

401(k), 403(b), 457, and Thrift Savings plans all have a $23,000 limit on elective deferrals (money you choose to contribute through payroll deductions) for 2024. In most cases, there’s also a $7,500 catch-up contribution allowed for participants aged 50 and older. For example, if you’re 52 this year, you can choose to have your employer take up to $30,500 of your pay and put it into your 401(k).

It’s also worth noting that these limits don’t include any matching contributions your employer makes on your behalf. Let’s say that you have a salary of $100,000 and your employer will match your contributions up to 6% of your salary — this means they are willing to put in as much as $6,000, and this does not count toward your elective deferral limit.

IRA limits

The individual retirement account (IRA) contribution limit for 2024 is $7,000, with a $1,000 catch-up contribution allowed for account owners 50 and older.

While IRAs are primarily designed for people who don’t have retirement plans through employers, it’s important to realize that you can have an IRA and a 401(k) or similar plan at the same time. Depending on your income, you might even be able to take a full tax deduction for traditional IRA contributions and participate in your employer’s plan.

Self-employed retirement accounts

If you’re self-employed, the retirement savings contribution limits can be even higher, since you are considered both the employee and the employer. The three most common account types used by self-employed individuals to save for retirement and their limits are:

Solo 401(k): You can open a one-participant 401(k) plan if you’re self-employed. The total solo 401(k) limit is $69,000 for 2024, plus the $7,500 catch-up allowance for those aged 50 or older. With Solo 401(k) accounts, you can contribute as much as $23,000 as the employee as well as up to 25% of your net self-employment income as the employer’s contribution.SEP-IRA: The SEP-IRA contribution limit is also $69,000 for 2024. However, since all SEP-IRA contributions are technically from the employer, this is capped at 25% of your compensation. There are no catch-up contributions (these apply to employee contributions only).SIMPLE IRA: For 2024, employee contributions to a SIMPLE IRA are capped at $16,000 ($19,500 if 50 or older). You can also contribute 3% of your compensation as an employer contribution, considering a maximum of $345,000 in compensation in the calculation.

How much could you save on your taxes?

Of course, your potential tax savings have several different contributing factors. It depends on the type of retirement account you’re using, your income, your other tax deductions, and more. But let’s look at an example.

Let’s say you’re 40 years old, single, and have a 401(k) at work. We’ll say that (aside from the effects of retirement contributions) you have a taxable income of $100,000, which puts you in the 22% marginal tax bracket. If you contribute $7,000 of your salary to your 401(k) plan today, you’d save $1,540 on your taxes as opposed to if you hadn’t contributed at all.

However, let’s say that you decide to take full advantage and contribute the 2024 maximum of $23,000. This would translate to an additional $3,520 in tax savings based on your 22% marginal tax rate (and that’s not to mention the massive addition to your retirement nest egg).

Should you take advantage?

To be perfectly clear, I completely understand that it might not be practical (or even necessary) to put as much money into your retirement accounts as is legally allowed. In other words, not everyone who participates in a 401(k) could reasonably put $23,000 into their account in 2024 without incurring excessive financial strain.

However, the point is that there may be more room to increase your retirement contributions than you might think. Not only could increasing your retirement contributions save you a ton of money on your taxes, but you’ll also be setting yourself up for a more secure retirement down the road.

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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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Early data show tax refunds are slightly higher than last year. Read on to see how much the average refund is so far. [[{“value”:”

The latest tax season is in full swing, and so far, early tax return data shows that refund amounts are up slightly from last year. The IRS says the average refund is $3,207 — a 2.1% increase from last year.

With the cost of nearly everything higher these days, Americans will likely be happy that their refunds are larger this year. However, it’s worth pointing out that when you get a tax refund, it usually means you’ve overpaid the IRS, leaving you with less of your hard-earned income throughout the year.

Here’s why your refund could be higher this year and a few things you can do to maximize your refund.

Why some refunds will be higher this year

Inflation has wreaked havoc on many people’s finances over the past two years, and the IRS made some adjustments in response. The result is that if you made the same amount in 2023 as you did in 2022, you might get a larger refund this year. Here’s why:

The standard deduction is larger: Nearly 90% of taxpayers claim the standard deduction instead of itemizing their directions. The good news for all these tax filers is that the standard deduction increased by 7% for the 2023 filing year. For single taxpayers, the standard deduction is $13,850, and for married taxpayers filing jointly it’s $27,700.Tax brackets were increased: The IRS always makes inflation-adjusted changes to tax brackets, but for 2023, it increased the tax brackets by an unusually high 7%.

These two changes will have the most significant impact on American taxpayers’ potential refunds. The good news is that the IRS says 9 out of 10 refunds will be issued within 21 days, so you probably won’t have to wait long after you file.

Three simple ways to maximize your refund

If you want to ensure your tax refund is as high as possible, you can still maximize your chances of getting more money back. Here are a few suggestions.

1. Do your own taxes

Technically, doing your own taxes won’t boost your refund. But if you do get money back from the IRS, you’ll likely be able to keep more of it if you do your own taxes rather than pay a professional tax preparer.

I’m self-employed and have paid people to do my taxes and done them plenty of times myself. Tax prep software has become so easy to use and relatively inexpensive that I can’t imagine paying anyone to do it for me now. Some tax professionals charge between $100 to $200 per hour, on top of standard fees, which isn’t worth it to me. There are even some free tax prep software options out there that won’t cost you a dime.

I recently logged into TurboTax to start my return, which gave me an estimated time of less than two hours to complete. I’ll save hundreds of dollars doing it myself, and if you have a job that sends you a W-2, you’ll likely be able to finish yours relatively quickly as well.

Of course, hiring a tax professional can be a good option if you have multiple income streams, earn a significant portion of your income from investments, or have a self-employed job with lots of clients and deductions.

2. Contribute to your traditional IRA

If you have a traditional IRA, your contributions reduce the amount of your annual taxable income. This tax advantage works in your favor if you’re trying to lower the taxable income amount and maximize your potential refund.

For 2023, you can contribute up to $6,500 to your IRA or $7,500 if you’re older than 50. And even though we’re already in 2024, you can still contribute to your IRA for the 2023 year until April 15, 2024.

This means that if you want to lower your taxable income — and potentially increase your refund — there is still time to contribute to your traditional IRA to help make it happen. For example, if you’re in the 22% tax bracket and contribute the full $6,500 to your IRA account, you could receive a tax deduction of up to $1,430.

3. Consider itemizing deductions

While about 90% of taxpayers use the standard deduction, it may not be the right choice for everyone. The IRS says you should itemize deductions if the total amount of your allowable itemized deductions is greater than the standard deduction.

Some common itemized deductions are charitable donations, home mortgage interest, state and local income taxes (up to $10,000), and medical and dental expenses that are more than 7.5% of your adjusted gross income.

Everyone’s tax situation is different, so if you’re using tax prep software, take a little extra time and try itemizing deductions to see if it’s worth it. Most tax software programs will ask you a few questions to determine quickly whether itemizing deductions is better than taking the standard deduction.

If you are still deciding whether to hire a professional or work on your taxes yourself, consider filing an extension using IRS Form 4868. That way, you’ll ensure you have all the proper documents and have chosen the right way to file without missing the IRS deadline.

While it may seem like good news that refunds are slightly higher this tax season, it’s important to remember that it means Americans have essentially given the government an interest-free loan throughout the year. Using some of the ways mentioned above to maximize your refund can help ensure you minimize the amount you overpay to the IRS and keep more of your hard-earned 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.The Motley Fool has a disclosure policy.

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Want to be wealthy? Living within your means is one money habit that can help you make that happen. Find out some others here. [[{“value”:”

For most people, becoming wealthy is possible. But it will require adopting some money habits as early in life as you can and sticking to them over the long term.

Not sure what to do if you want to end up rich? Here are four habits to adopt right now that can set you on the path to financial success.

1. Living within your means

There is one thing that you absolutely must do if you want to be rich: You need to live within your means. That means spending less than you earn. It doesn’t matter if you make $40,000 a year or $400,000 a year — if you spend more than you make, you are never going to end up wealthy.

Of course, the higher your income, the easier it is to cover your costs and still have money left over. But plenty of people with modest incomes still end up rich. The key is to keep fixed expenses (like housing and car payments) to no more than around 50% of income, limit discretionary spending to 30%, and save the rest.

2. Using credit cards wisely

Credit cards are not something to be scared of if you hope to become rich, despite what some financial experts will tell you.

It is 100% true you should avoid credit card debt if you want wealth in your future. With the average credit card interest rate coming in at 21.47%, carrying a balance makes building wealth a whole lot harder.

But you can and should use credit cards without ever paying a dime of interest. Charge only what you can afford and pay off your balance in full each month. Doing this can help make you richer in two ways.

It can help you to earn a good credit score that opens doors for you. This could make doing other things, like buying a house, a lot more affordable.It can allow you to earn rewards that reduce the cost of your purchases. If you get a card offering 2% cash back and charge everything you can, you effectively get a 2% discount on all your purchases. That’s extra money you can use for your financial goals.

3. Getting loans only for the right reasons

You also shouldn’t be afraid of using other kinds of debt as a tool if you want to be rich. For example, getting a mortgage could help you buy a house — and homeowners have a net worth that’s 40 times higher than renters.

While some of that discrepancy is explained by the fact people with stable finances are more likely to buy a home in the first place, homeowners undoubtedly benefit from the fact their mortgage is a type of forced savings as each payment helps them build equity. Plus, they benefit from property appreciation that grows their wealth over time.

You can also use loans in other smart ways, such as to help you start a business. But it’s a good idea to avoid borrowing for anything that doesn’t increase your net worth over the long term, like vacations or weddings. Paying interest on unnecessary purchases can derail your efforts to get rich.

4. Investing for the long term

Finally, investing for the future is crucial to ending up wealthy since it allows your money to work for you. Say, for example, you invest $10,000 a year for 30 years and earn a 10% average annual return. You’ll have invested $300,000 over time — but will end up with $1,809,434.25.

Your money will grow exponentially when you invest because the returns you earn are reinvested and earn money for you without extra effort on your part. This is the miracle of compound growth.

Adopting these four habits are an almost surefire path to wealth if you practice them all for as long as possible. So, get started today if becoming rich is your goal.

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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.Christy Bieber 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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Borrowing money has become more expensive in recent years. Is there relief on the horizon? Keep reading to find out. [[{“value”:”

With the Federal Reserve raising interest rates at a rapid pace in 2022 and 2023, the cost of consumer credit has risen significantly. And this is certainly true when it comes to personal loans. According to the Fed’s own data, the average interest rate on a 24-month personal loan increased from 9.38% in 2021 to 11.87% in 2023, a difference of nearly 2.5%.

However, with many experts predicting that the Fed is going to start cutting interest rates sooner rather than later, is there relief in sight for would-be personal loan borrowers? Or will rates stay elevated for the foreseeable future?

The Federal Reserve and personal loan interest rates

To be perfectly clear, there isn’t a direct relationship between the benchmark interest rates set by the Federal Reserve (specifically, the federal funds rate) and personal loan interest rates. Lenders can set their own rates, and each lender has different underwriting processes. It’s not uncommon for the same person to apply to several different personal loan companies and get interest rate offers more than 5 percentage points different from one another.

Having said that, personal loan interest rates and other consumer interest rates tend to move in the same direction as the Fed’s benchmarks. We already discussed personal loan interest rates, but as another example, the average interest rate on a 72-month new auto loan increased from 4.82% in 2021 to 7.89% last year. It is no secret that mortgage rates have risen significantly as well. During the same period, the benchmark federal funds rate went from virtually zero to a target range of 5.25%-5.50%, where it currently sits.

The latest projections

Four times per year, the Federal Reserve board members release their projections for future interest rate movements. These are certainly not binding, but they can give us a good sense of where the people who set monetary policy see things heading in the future.

According to the most recent Federal Reserve projections (made in December 2023), the median expectation is for three quarter-percentage-point cuts to the federal funds rate in 2024.

Investors seem to be expecting the same. According to the CME FedWatch tool, the median expectation is for the Fed to make its first rate cut of the year in June, and for a total of three rate cuts throughout the year, for a total reduction of 0.75%. And while nobody has a crystal ball, derivatives markets are pricing in no chance that rates will be higher at the end of 2024 and just a 0.6% chance that the Fed won’t cut rates at all.

Will personal loan interest rates fall in 2024 and beyond?

To sum it up, unless something dramatic happens, such as an unexpected inflation spike, there’s a high probability that the Federal Reserve will start to cut interest rates later this year. And if that happens, it would be surprising if personal loan interest rates didn’t follow. However, keep in mind that there’s no guarantee that the Fed will actually lower interest rates, and even if it does, remember that there isn’t a direct relationship with personal loan interest rates, so there’s no guarantee rates will turn lower.

How can you save on a loan regardless?

No matter what happens with personal loan interest rates as a whole, there are steps you can take to make sure that you get the best possible rate you can. For one thing, if your credit score isn’t exactly top-notch, take steps to boost your score. These include paying down existing debt, and disputing errors on your credit report. You can have a significant impact quicker than you might think.

And it’s an absolute must to shop around. Most personal lenders will allow you to check your personal rate offers without a hard credit pull, and with a quick and easy pre-approval form. Even if rates don’t fall this year or next, you still have the power to improve your chances of saving money on a personal loan.

Our picks for the best personal loans

Our team of independent experts pored over the fine print to find the select personal loans that offer competitive rates and low fees. Get started by reviewing our picks for the best personal loans.

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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