Money Management

Warby Parker is a great place to buy affordable glasses. But read on to learn about one pitfall. 

I’ve been wearing glasses since I was a child, so naturally, I’ve gone through my fair share of frames and styles. As a kid, I rocked a pair of neon pink frames for several years before switching over to round John Lennon-style glasses during high school. And in college, I frankly bought the cheapest glasses I could find, since money was tight for me back then.

In recent years, I’ve taken to buying my eyeglasses from Warby Parker due to its affordable price point. I have vision insurance and am entitled to one pair of glasses per year — with a copay — if I use an in-network provider, which Warby Parker is not. However, because I’m limited to that network, I’m limited to expensive frames that still leave me with a sizable copay.

At Warby Parker, glasses start at just $95. That’s less than my copay using insurance. So even though Warby Parker is out of network for me, it’s cheaper for me to get my glasses from it. And, my insurance provider gives me a small out-of-network allowance, so I get a little of what I spend on Warby Parker frames back.

But while I love using Warby Parker, I recently encountered a hiccup. And it’s one you should be aware of if you use the company for glasses.

When your favorite frames are discontinued

Warby Parker has a generous policy with scratched or damaged lenses. If your lenses are scratched within six months of getting them, the company will replace your glasses for free one time.

In some cases, if your prescription has changed or your lenses are more than six months old, Warby Parker will extend a one-time lens replacement discount starting at $35 toward a replacement pair of the same glasses (or sunglasses).

However, this system only works when Warby Parker continues to make your frames. Sometimes, Warby Parker will discontinue certain styles. And when that happens, you can’t simply get your lenses replaced so you can keep your existing frames.

So now, I have a problem. Granted, it’s a first-world problem, but an annoyance nonetheless.

I really like my current Warby Parker frames, but they aren’t made anymore and my lenses are scratched up to the point where it’s getting hard to see comfortably. Only I can’t just go to a Warby Parker store and get my lenses swapped out in my current frames.

When I called to ask why, I was told they don’t do this because there’s a risk of the frames breaking, especially if they’re older. And while I could try to see if another optical store will swap my lenses, I’m taking that same risk there.

Plus, I could be looking at an expensive fee. And I really don’t want to dip into my savings account for new lenses only to potentially have to give up my beloved frames anyway.

What I’ll do differently next time I buy glasses

The next time I fall in love with a pair of Warby Parker frames, I may just go ahead and purchase two pairs of glasses. This way, if my lenses get worn over time, I can just pull out my second pair when that happens. With Warby Parker’s low price point, it’s doable.

Plus, I happen to have a limited purpose FSA that I can use for dental and vision expenses. This is a special FSA that I’m allowed to have alongside my health savings account (HSA). So if I buy a second pair, I can submit the expense to my FSA for reimbursement.

If you get your glasses from Warby Parker, you may want to take a similar approach if you can afford to shell out the money for two pairs of glasses, and if you’re someone who wears glasses all the time and can’t see without them. It’s generally a good idea to have a backup pair of glasses on hand, and you might as well stick to a style you know you like.

For now, I have to make a choice — deal with my scratched lenses or go out and find new glasses I like. I’ll probably go with the second option because I need to be able to see clearly. But after wearing the same frames for a few years now, it’s going to be an adjustment.

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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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Abusing Costco’s generous return policy could get your membership revoked. Here’s how to make sure this doesn’t happen to you in 2024. 

A Costco membership comes with many great perks. You can wander around and get free samples of new products and buy the famous $1.50 hot dog and soda combo. You can get bargains on food and household items that allow you to keep more money in your checking account. And you can enjoy Kirkland brand products, many of which taste great and have a dedicated following.

If you enjoy shopping at Costco, you likely want to keep your membership active. That’s why it’s important you don’t engage in risky behavior that could get your membership revoked.

If you’re doing this, you risk losing your Costco membership in 2024

According to Costco, the warehouse club has the right to terminate your membership at its discretion, and it does not have to give cause for that termination. However, the most common reason why people have their membership revoked is because they are abusing the store’s very generous return policy.

See, for most Costco items, you can return a product pretty much at any time if it doesn’t satisfy you — even if it has been a long time since you bought it. There are limited exceptions to this. Electronics, for example, have to be returned within a 90-day period, and special order items made just for you also can’t be returned unless there’s a specific problem with the product that would be covered by a warranty.

But just because you can return almost anything you want at any time doesn’t mean there won’t be consequences for doing so. If Costco managers believe you are abusing the policy — say, by returning a ton of items after using them for a long time even though there’s no real problem with them — then the store can and will tell you that you can no longer be a member.

Unfortunately, many people do make returns that push the envelope. In fact, in one Reddit thread where Costco employees were asked to weigh in on the craziest returns, examples included:

An open milk returned because the customer didn’t have time to drink it all before it was expiredPumpkins the day after Halloween because they were no longer neededAn expired cake that was 75% consumed because the customer didn’t like it any moreA 10-year old faux leather couch that was cracking

Avoiding these types of returns can help you to keep your membership — and avoid being featured in an internet forum too.

How to protect your Costco membership

If you want to keep your Costco membership and not end up having to shop elsewhere and give your credit cards more of a workout, you will want to be sure that you don’t put yourself at risk of having your membership canceled in 2024 due to excess returns.

There are no specific details on the Costco website about exactly what abuse of the return policy could look like, but Costco members who make frequent returns — especially of high-value items — are more likely to have their accounts flagged and potentially end up having their shopping privileges revoked. Trying to return items a long time after buying them could also raise red flags as well, especially if you do this regularly.

Ultimately, if you are returning a few items here and there because they didn’t really satisfy you, you likely have nothing to worry about. But you don’t want to do anything that could be seen as abusing the system. If you feel as if a Costco manager reviewing your list of returns might start to get concerned about your history, you should probably reconsider your pattern of behavior before it ends up getting you banned from Costco for good.

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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 positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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Electric vehicles are becoming increasingly popular, but they’re still pretty expensive. Here’s how to decide if you should buy one in 2024. 

Demand for electric vehicles continues to rise, but the high price tag of electric vehicles has kept many drivers away. Tax incentives have made them a little more accessible in recent years, but the rules keep changing.

You’re probably here because you’re interested in purchasing an electric vehicle but aren’t sure whether to buy in 2024 or wait a little longer. The answer’s not as clear cut as you might think. Below, we’ll look at the pros and cons of buying next year.

Three reasons to buy an electric car in 2024

Here are some reasons you may want to buy your electric car in 2024.

1. Tax credits are getting more flexible

This year, you can claim a tax credit of up to $7,500 for purchasing an electric vehicle. But to get that tax credit, you’d have to wait until you file your 2023 taxes. The credit will reduce your tax bill for the year, but if you owe less than the tax credit — for example, your tax bill is $4,000 and your tax credit is $7,500 — you’d just lose the rest.

But things are changing in 2024. You’ll have the choice between claiming the tax credit at the end of the year, as you can now, or applying it as a discount to your purchase price. This new option could enable you to afford an electric vehicle you may not have otherwise been able to, if you had to wait until tax season for your credit.

2. It could save you a lot on gas

Once you get past the upfront cost, you could save quite a bit with an electric vehicle. The U.S. Energy Information Administration (EIA) estimates that gas prices will rise to $3.61 per gallon in 2024. If your current vehicle holds 15 gallons of gas, that’s about $54 every fill up. You could keep that money in your pocket if you had an electric vehicle.

Of course, electric vehicles still have costs too. You’ll need to charge them regularly. But this will most likely be cheaper in the long run than paying for gasoline.

3. You have more options than ever

Manufacturers are continuing to invest in new electric vehicle models and to enhance the capabilities of existing models. This gives drivers who are interested in electric vehicles more options than they had in years past. Used electric vehicles are also coming up for sale, which opens the door to a new set of customers who may not have been able to afford a new vehicle.

Two reasons to wait on buying an electric vehicle

Here are some reasons you may not want to buy an electric vehicle in 2024.

1. Things can always get better

It’s likely that auto manufacturers will continue to release new electric vehicles, and these future models will likely have longer ranges and better features. The pace of innovation is quick right now, so even waiting a year or two might give you a much better selection of options.

2. Even with the tax credit, they’re not that affordable

New electric vehicles cost about $53,469 on average, according to Kelley Blue Book. Even if your vehicle qualifies for the $7,500 tax credit — and not all of them do — that still leaves you with roughly $46,000 you have to finance on your own. That’s tough for a lot of people.

What’s more, auto loan rates are pretty high right now. This can make taking out a loan for an electric vehicle even more costly.

Auto insurance rates will likely be higher as well. Electric vehicles are typically more costly to repair due to their unique components and the fact that there are fewer technicians skilled in this type of work.

If you don’t think you can squeeze payments and insurance costs for an electric vehicle into your budget, you may prefer to wait until electric vehicle prices and loan interest rates begin to fall.

It’s your call

Ultimately, the decision about whether to purchase an electric vehicle in 2024 rests with you. It doesn’t hurt to test drive a few and price them out to see what fits in your budget. But don’t make any decisions until the government publishes its list of which vehicles qualify for tax credits in 2024. This will be found at FuelEconomy.gov.

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Buy now, pay later is a popular way to finance holiday purchases, but you don’t want to rely on it too much. Here are five signs you’re overusing it. 

Buy now, pay later (BNPL) plans are similar to layaway systems with one big advantage: You don’t have to wait until you’ve paid for the item to take it home. Rules vary by lender, but typically, you pay about a quarter of the purchase price at checkout and then you can take the item home. You pay the rest back in three installments over the next six weeks.

These plans can be great alternatives to credit cards as there’s generally no interest if you keep up with your payments. But the old saying about too much of a good thing applies here. Relying too much on BNPL plans could come back to bite you in the long run. Here are five signs you may want to scale back your BNPL usage.

1. Using BNPL for everyday expenses

It’s possible to use BNPL for small, everyday items, but that’s not really the intended purpose. BNPL is supposed to provide short-term financial assistance to help you pay for big-ticket items you cannot afford to buy outright. It’s not supposed to become a habit.

2. Incurring a bunch of late fees

Ideally, you make all of your BNPL payments on time so you don’t incur late fees. Sometimes, you might slip up and forget one and it might not be a big deal. But if you’re habitually late on payments or skipping payments altogether, that’s a sign that your BNPL usage might not be sustainable.

3. Taking on debt to pay off your BNPL items

If you have to take out a personal loan or borrow money from others to pay off your BNPL items, you may want to think about putting a pause on your purchases for a while. Wait until you have paid off everything you currently owe before buying more.

4. Hiding your BNPL purchases from others

Some frequent BNPL users might feel guilty about how much they’re purchasing, and so they try to hide their BNPL purchases from others. This can be especially damaging if one spouse is keeping their BNPL debts hidden from the other.

5. Causing stress

Keeping track of a bunch of BNPL payments can be stressful, especially if they all have different due dates. If you find yourself anxious about juggling it all, that might be a sign that you should slow down on your purchases or look for alternative ways to finance your items.

Alternatives to buy now, pay later

If BNPL services are causing you any of the above problems, it might not be the best way to finance your purchases going forward. Here are some other options to consider.

Saving up

Saving up for purchases takes debt out of the equation entirely. However, it sometimes means you have to wait until you’ve set aside enough cash. This might not be desirable, and it may not even be feasible if you find yourself in a financial emergency.

Credit cards

Credit cards enable you to pay purchases off over time, similar to BNPL services. But you could face large interest charges if you don’t pay back the balance in full at the end of the month. There are credit cards that offer 0% introductory annual percentage rates (APRs) for new customers, though. One of these could be a good fit if you’re looking to finance a single, large purchase and are confident you can pay it back before the 0% APR period ends.

Personal loans

A personal loan enables you to borrow money without putting down any collateral. Because of this, interest rates are higher than on auto loans or mortgages. But you get a predictable monthly payment. It takes longer to get approved for one of these than it does for a BNPL service, though.

Be sure to evaluate all your options before you decide on the best way to finance your purchases. Keep in mind that the right choice for you right now might not be the right one in the future. It’s OK to change things up as long as you understand the financial implications of your decision.

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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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Not comparing your health insurance options can be costly when you lose job-based coverage. Learn how to avoid this mistake. 

My biggest money mistake of 2023 cost me $1,295. It’s not going to permanently destroy my finances, but there’s a lot I could have done with nearly $1,300.

The mistake I made pertains to health insurance — specifically, the decision I made when I quit my full-time job to become self-employed. It’s a mistake I’m guessing a lot of people make when they leave their jobs. Read on to learn from the error of my ways.

My big financial mistake of 2023

The mistake I made was choosing to stay on my old employer’s health plan through the Consolidated Omnibus Budget Reconciliation Act, or COBRA. Basically, the law allows you to continue your health benefits for either 18 or 36 months when you lose your health benefits because you or your family member quits a job or gets laid off, provided that you work for a company with 20 or more employees.

It’s an expensive option, though, as I soon discovered. With COBRA insurance, you have to cover the entire cost of your premiums, plus your ex-employer can tack on a 2% surcharge. Employers pay 78% of premiums on average for single-coverage plans, according to the U.S. Bureau of Labor Statistics.

When I was employed, my share of premiums amounted to $115 each month. But under COBRA, my monthly premiums shot up to $652.

When 2024 open enrollment began for Marketplace health plans, I finally took the time to compare my options. I found a Silver plan — in Health Insurance Marketplace parlance, that’s one where both your premiums and out-of-pocket costs are moderate — that will cost me $393 a month next year. (If you’re eligible for Marketplace subsidies based on your income and family size, your savings will likely be even more substantial.)

That’s a $259 monthly savings that I could have realized sooner. When you lose your job-based health insurance, you qualify for a 60-day special open enrollment period. Considering that I’ve paid COBRA premiums for five months, that $259 savings would have added up to $1,295.

Does paying for COBRA ever make sense?

Of course, the comparison between my ex-employer’s plan and my Marketplace plan isn’t apples to apples. My new deductible will be $3,000 higher. I’ll also have slightly higher co-pays when I go to the doctor or fill a prescription.

If I had a chronic health condition, sticking with my pricier COBRA insurance may have been worth it. Keeping your employer plan can be a good move if keeping the same in-network providers is important to you. For someone who loses their job-based health insurance midyear after already hitting their deductible, going with COBRA through the end of the year may also make sense.

Since I only visit the doctor a couple of times in a typical year, I’m comfortable switching to a plan with a higher deductible. Granted, health issues can creep up at any time. But if I put my monthly savings from the cheaper plan into my emergency fund, I’ll be prepared in case I get a big medical bill.

What I learned from my mistake

I went with COBRA out of a combination of fear and laziness. Quitting your job to become self-employed is scary, and health coverage is often the biggest concern. Sticking with a health plan I’d already navigated made self-employment a tad less intimidating. But also, if I’m being honest, I also simply didn’t feel like spending several hours reading health insurance fine print.

Compared to past financial mistakes I’ve made — like destroying my credit when I was in college — this one was fairly minor. A much bigger mistake would have been not buying health insurance in general, which can lead to staggering medical debt if something goes wrong.

The big takeaway here, though, is that whenever you’re in the market for a financial product, be it insurance, a credit card, or a loan, taking a couple of hours to do your homework pays off. It may not be exciting, but the time could translate to thousands in savings.

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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.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Robin Hartill, CFP® has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

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Not finished shopping just yet? Read on for ways to tackle your remaining gifts without going broke. 

It happens to the best of us every year. We tell ourselves we’re going to get a head start on our holiday shopping — perhaps by taking advantage of November sales events like Black Friday and Cyber Monday — only to find ourselves well into December with many more gifts to purchase.

If you’ve yet to complete your holiday shopping list, it may be because you wanted to spread out your credit card charges to avoid a giant bill. And that’s understandable. But now that you’re down to the wire, here are some tips for finding last-minute gifts without utterly depleting your savings account.

1. Shop around even when the price seems fair

When you’re shopping under pressure, you may be inclined to just buy something that seems as if it’s being sold at a fair price. But a few minutes of shopping around might help you pay even less.

Let’s say you have a young reader in your family. You may decide to buy your child Judy Blume’s classic Fudge box set, which features five fantastic novels.

Target has it for sale online for $20.99, which is only $4.20 per book. But Amazon has it available for $15.45, which is only $3.09 per book. So even though Target’s price was quite reasonable to begin with, a quick Amazon search clearly reveals an even more cost-effective option.

2. Actually go to the store

Many retailers have a clearance section you can look at online. But sometimes, you’ll find even bigger discounts in stores.

When retailers get a lot of returns and are understaffed, restocking those items can be overwhelming. What’ll sometimes happen is that products will get marked down and thrown onto the clearance rack where you can scoop them up for less.

Also, the idea of searching through the clearance section online can be daunting for a retailer like Target or Walmart, since you could conceivably spend hours browsing through numerous pages. If you go to the store, there might only be a couple of clearance aisles to browse. The downside there is less selection. But the upside is that you might have it in you to look in the first place.

3. Check your local dollar store

Maybe you’ve managed to buy most of your big-ticket gifts at this point, but you still have some stocking stuffers you need to grab. Amazon has plenty of choices in that regard. But if you don’t want to spend more than, well, $1 or $1.25 per item, then the dollar store may be your best bet (though do keep in mind that Amazon sometimes sells multipacks of items that bring their individual price down to roughly $1 apiece, like these lip glosses.)

And remember, you can combine dollar store items with other buys for gifts that are nice and creative. If you see a cute mug at the dollar store your teen might like, you could also pick up their favorite hot cocoa packets at the supermarket for a low-cost but meaningful gift.

It’s never fun to feel like you have to rush through your holiday shopping. The good news, though, is that you don’t have to spend a small fortune tackling the remainder of your list — even if you don’t have much time to get the job done.

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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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