Money Management

Cruises can be extremely expensive, or they can be economical ways to see several destinations. See how to make your trip more affordable. 

A cruise can be a great way to see several different destinations in a single vacation. But many people don’t realize how many different costs are associated with taking a cruise, and how much wiggle room there can be to save money throughout the planning and cruising processes.

With that in mind, here are five great ways to save money before, during, and after your next cruise vacation that can make a big difference in the overall hit to your personal finances.

1. Book your cruise early (or at the last minute)

There are three ideal times to book a cruise, generally speaking. The first is very early. Cruise lines typically list their sailings about two years in advance, and if you can plan far ahead, you can usually get a better rate than if you wait until a few months away from the sail date.

The second is booking at the last minute. In many cases, cruise lines make just as much (or more) money from onboard spending as from selling cabins, so they want to sail as full as possible. If you have flexible travel plans, it may be worth looking into a last-minute special, which can be extremely cheap.

Finally, a great place to book a cruise is while you’re already on one. Most cruise ships have some sort of “book your next cruise” desk on board. You can typically get a discount, as well as other perks such as onboard credit, for booking your next cruise while you’re still on one.

2. Get to the port cheaply

Obviously, choosing a cruise port that you can reasonably drive to can save you money compared with one you have to fly to. This isn’t always practical — for example, if you want to take a cruise to Alaska and you live on the East Coast, there aren’t any ships you can drive to that will take you there.

However, even if you drive to the port, there are some ways you might be able to save money, especially when it comes to parking. If you’re driving and staying at a hotel overnight, you might not realize many have park-and-cruise deals where you can leave your vehicle at the hotel instead of paying to park at the port. Alternatively, many ports have off-site parking options that are much cheaper.

3. Maximize credit card perks

There are some excellent travel rewards credit cards that can help you get the most value out of your cruise spending. Some of them even offer valuable travel protections, such as lost or delayed baggage and trip interruption coverage, that are nice to have if you need them.

While the major cruise lines have co-branded credit cards, it’s worth noting that the best travel credit card to pay for a cruise might not be one of them.

4. Book the extras in advance

One common mistake, especially among first-time cruisers, is to wait until boarding the ship to buy drink packages, internet packages, shore excursions, and other amenities.

Many of these items are almost always cheaper to buy in advance. For example, Carnival’s CHEERS! beverage package costs $59.95 per day if you book it in advance or $64.95 per day if you book it on board. For a week-long cruise for two people, this can make a big difference.

When it comes to shore excursions, not only can they be cheaper ahead of time, but by booking early, you’ll avoid the ones you want selling out.

5. Look for port day bargains

If you’re looking to do something on board — especially spa treatments or eating lunch at a specialty restaurant — there are often special deals for days while the ship is in port. Think of it this way: If there are thousands of people off the ship and exploring, it can be tough to find people who want to stay and pay for a massage.

If you don’t have major plans on a certain port day, consider booking your spa treatments and other onboard activities then. As a bonus, you’ll get to experience the ship’s perks without having to deal with crowds.

Not an exhaustive list

The main takeaway is that there are plenty of opportunities to trim your expenses on a cruise, and I can’t cover them all in one list. You might be able to shop sales for souvenirs on the ship or find free activities to do with the kids instead of spending money in the arcade, just to name a couple of examples.

There are many ways to cruise — some of which are very expensive, and some of which are quite economical. And you might be surprised how much of a difference a little smart planning can make.

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No 401(k)? No worries. Read on to see how you can still retire with lots of wealth by contributing to and investing in an IRA. 

One of the most desirable workplace benefits is access to a retirement plan. And data from the U.S. Census reveals that around 35% of Americans have a 401(k) or a comparable plan like a 403(b).

What this means, though, is that if you don’t have access to a 401(k) plan, you’re in the majority. And you may be stressed about saving for retirement in the absence of one of these plans. But rest assured that with the right strategy, you can do quite well for yourself with an IRA.

Why 401(k)s can lend to larger nest eggs

When saving for retirement, 401(k) plans have a couple of key advantages. First, many employers match 401(k) contributions to some degree, letting savers enjoy free money in their accounts. Because IRAs are self-funded and self-managed, employer contributions don’t come into play.

Also, 401(k)s come with much higher contribution limits than IRAs do. Beginning in 2024, savers under the age of 50 can contribute up to $23,000 a year to a 401(k), while those 50 and over can contribute $30,500 a year.

IRAs, however, will max out at $7,000 for savers under 50 starting in 2024. And for savers 50 and over, they’ll max out at $8,000. That’s a huge difference.

An IRA could lead to a lot of wealth

You might assume you’re at a huge disadvantage in the context of retirement savings because you only have an IRA to work with. But you should know that if you begin contributing to that IRA from a young age and fund it consistently, you can potentially grow a lot of wealth over time — especially if you invest your money in stocks.

Over the past 50 years, the stock market’s average annual return has been 10%, as measured by the S&P 500 index. So let’s say you invest your IRA in a S&P 500 index fund. Let’s also assume you contribute $300 a month to that account starting at age 25 through age 67. Given all of that, you’re looking at retiring with a balance of over $1.93 million.

If you’re able to save more than $300 a month for retirement, such as $1,000 (which an IRA alone won’t let you do given the annual contribution limits), you stand to grow an even larger balance.

But remember, just because IRAs max out doesn’t mean you can’t save beyond those limits. Let’s say you’re 40 and can afford to save and invest $12,000 a year for retirement. You’re limited to $7,000 in your IRA next year. But in that case, you can always invest the remaining $5,000 in a regular brokerage account. You won’t get a tax break in the process, but you’ll still get to enjoy the benefit of investing your money over many years.

Plus, the nice thing about a regular brokerage account is that it won’t have restrictions. With an IRA (as well as a 401(k) plan), penalties can apply for taking withdrawals prior to age 59 1/2. With a regular brokerage account, you can take withdrawals anytime you want. And so if you end up in a position where you’re able to retire early, having some funds outside of an IRA or 401(k) is actually key.

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A $50,000 nest egg isn’t a whole lot. But if that’s what you have saved, all isn’t lost. Read on to learn more. 

You’ll often hear that it’s important to consistently fund an IRA or 401(k) over time. And the sooner you begin putting money into one of these accounts, the more opportunity you’ll have to benefit from investment gains.

But maybe it was a struggle for you to build retirement savings. Maybe you had to cope with stagnant wages, expensive medical bills, and other costs that got in the way of building a large nest egg.

If you’re nearing retirement with just $50,000 in savings, the reality is that you’re frankly not in the best shape. The average 60-something has a retirement savings balance of $112,500, according to Northwestern Mutual. Even that, frankly, isn’t a ton of money.

So if you have less than half of that, you’ll need to be very careful about managing your cash reserves. But you should also know that you’re not doomed to a cash-strapped retirement just because you only happen to have $50,000 socked away.

Don’t forget about Social Security

Many people struggle to live on Social Security alone in retirement. But the reality is those benefits might help sustain you to a large degree.

The average senior on Social Security today collects $1,848 a month. That’s over $22,000 a year. Even if you’re only taking a few thousand dollars a year out of your savings because that’s all you can afford, there’s still another steady source of income you can fall back on.

Part-time work and frugal living could save your retirement

The long-time convention was to stick to a 4% withdrawal rate for retirement savings. So for a $50,000 nest egg, that would mean $2,000 of retirement income a year. Even with a decent chunk of cash from Social Security, that may not be enough to live on. But if you’re willing to work part-time in retirement, you may find that you can get by quite well thanks to that added income.

You might also need to make some frugal choices in retirement to compensate for not having a ton of savings. That could mean downsizing to a less expensive home or limiting yourself to local travel instead of taking big trips.

You may also need to be mindful of smaller expenses, too. If money is tight, you may have to stick to one streaming service instead of having multiple. And you might have to mostly cook your own food rather than dine out regularly.

But that doesn’t have to lessen your quality of life. If you learn to embrace those things, you can make the best of a limited income. That could, for example, mean broadening your cooking horizons and exploring new recipes you’re excited to eat.

In an ideal world, you’d be retiring with a lot more money than $50,000. But if that’s all you have to work with, don’t assume the worst. With some reasonable lifestyle adjustments, you can set yourself up to enjoy a fulfilling retirement, even if you have to limit your spending.

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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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Costco fees have held steady for more than six years. Read on to see if a fee hike is in store for 2024. 

Costco’s business model differs from that of most stores. You have to pay a fee to get access to shop there (at least in person — many of the Costco products you’ll see listed online are available to non-members). Right now, a basic membership to Costco costs $60. An upgraded Executive membership, on the other hand, costs $120. But for that extra cost, you get to earn 2% cash back on your Costco purchases.

For some people, paying that membership fee is an easy call. That’s because the savings they reap more than make up for the cost of a membership.

But if you’ve been on the fence about keeping your Costco membership, then you probably don’t want to see its cost increase. The question is: Will that happen in 2024?

It’s been years since the last Costco fee hike

The last time Costco raised membership fees was June 2017. During the company’s most recent earnings call, CFO Richard Galanti was asked whether Costco was looking to raise fees in the near term.

His answer was a very firm, “It’s a question of when, not if.” But Galanti was also pretty non-committal about a specific time frame. Rather, he simply said, “You’ll see it happen at some point.” As such, it’s hard to know if a fee hike is in the cards for 2024.

Here’s why a fee hike may — or may not — happen in the new year

It’s easy enough to make the argument for and against a Costco fee hike in 2024. One reason we could see a rise in membership costs is that it’s been a long time since Costco has done that, and frankly, it’s due for an increase.

Also, Costco may feel more confident raising fees at a time when inflation isn’t quite as rampant. Inflation has been cooling pretty steadily since peaking in mid-2022. So it’s easy to see why Costco didn’t want to raise fees this year — it didn’t want to risk alienating cash-strapped members. But given the way inflation has trended in 2023, the company may feel more comfortable raising fees in 2024.

On the other hand, living costs remain elevated because of that period of soaring inflation. You can also make the argument that Costco will want to wait until that situation moderates further.

Consumers are also grappling with sky-high borrowing costs these days on the heels of the Federal Reserve’s numerous interest rate hikes. Costco may decide to let things be until the Fed starts to cut rates and there’s more relief to be had.

Prepare for a fee hike just in case

Since there is a chance Costco will raise membership fees in 2024, your best bet as a member is to prepare for that possibility. The good news is that if fees go up, they’ll likely rise only modestly — say, by $5 for a basic membership and $10 for an Executive membership. This is based on the company’s previous cadence.

If money is tight, having to spend anything extra might come as a blow. But if you’re doing okay financially, spending an extra $5 or $10 over a year probably isn’t going to make a huge difference in your savings account balance.

That said, it’s always a good idea to evaluate your Costco membership and make sure it’s giving you the value you expect. So whether fees rise in 2024 or not, see how often you’re going to Costco and try to estimate your average per-trip savings. If you’re making back your membership fee easily, then it’s probably worth sticking with Costco even once a fee hike takes effect.

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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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