Money Management

Visiting Costco too often might cost you money, but you also want to go enough to make a membership worth it. Read on to see how to strike a balance. 

Some people grumble about the cost of a Costco membership. Their logic is that they shouldn’t have to pay to enter a store and spend their money there.

But I have no problem paying for my Costco membership. Since I shop there weekly, the savings I enjoy on groceries and other household products more than makes up for my $120 annual fee, which is the current cost of a Costco Executive membership. Plus, the whole reason Costco charges those fees is to pass savings onto members — which I find that it does.

Meanwhile, I have friends who are Costco members who shop there multiple times a week. And I have to admit, I can’t imagine having that need.

On the other end of the spectrum, I have friends who pay for Costco but only visit the store a couple of times a year. And I can’t help but wonder whether they’re actually getting their money’s worth.

All told, it’s hard to land on the right cadence for visiting Costco. So if you’re wondering how often you should go, you’re in good company.

You’ll want to go at least enough times to make back your membership fee

You can only load up on so many Costco goods in a single shopping trip, especially if you’re buying groceries with a limited shelf life. You’ll probably need to hit the store a number of times to reap enough savings to cover the cost of your membership.

That number is apt to vary depending on the things you buy. But basically, you should see what you normally spend on a Costco run and how much savings that gives you compared to your local supermarket. Then, divide the cost of your annual membership by that number to see how many times you should go to Costco in a year for your fee to be worth paying.

Let’s say you pay $60 a year for a basic Costco membership. Let’s also say each Costco run of yours saves you $15 compared to the cost of a regular supermarket. In that case, you should aim to go to Costco at least once every three months, or four times a year, to justify the expense of a membership, because if you’re not making that money back, it’s probably not worth spending.

But once you’ve made back your membership fee, the frequency at which you visit Costco should hinge on your personal needs. If you have a large family to feed, going once a week might make sense. If you don’t cook that often but like to stock up on non-perishables and other supplies with a longer shelf life, going once a month might be your best bet.

You don’t, however, want to fall into the trap of going to Costco more often than you need to. If you visit too often, you might end up spending extra money for no good reason.

Granted, many of us are busy enough that we’re not spending our downtime wandering the aisles of Costco for kicks. But hey, you never know.

Make sure you’re getting good value from your membership

It’s a good idea to visit Costco often enough to make back your membership fee, whether it’s $60 for a basic membership or $120 for an Executive membership. But if you start effectively forcing yourself to go to Costco when you’d rather shop somewhere closer (or you’d simply prefer a different store), then it may be time to rethink your membership.

If you’re doing well financially, it’s true that $60, or even $120, isn’t such a huge outlay for access to a giant store that sells a little bit of everything. And it’s certainly not a lot of money to pay for the potential to save hundreds of dollars each year on food and essentials.

But if getting over to Costco has become a hassle, you may want to cancel your membership. Shopping there should be a positive experience, and if it isn’t, why torture yourself?

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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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Americans have lofty expectations for retirement savings. Read on to see what nest egg you should be aiming for. 

You’re going to need savings to live comfortably in retirement — there’s no question about that. However, the amount of savings you’ll need is a tough figure to nail down.

Let’s say you’re 35 years old and want to retire at 65. You might currently spend $5,000 a month between your mortgage, transportation, entertainment, and childcare costs. But who’s to say what your expenses will look like in 30 years? Maybe your home will be paid off. Or maybe it won’t be, or you’ll have moved. Maybe you’ll live in an area where you don’t need a car. Or maybe you’ll live in the middle of the woods where you need not just a car, but a truck with massive tires to navigate those roads during winter.

When you’re years away from retirement, it’s really hard to nail down a savings target for your IRA or 401(k). When you see data published along those lines, it can be pretty unhelpful.

A recent survey by New York Life, for example, found that Americans think it’ll take around $4.3 million in savings to retire comfortably. And if you’re thinking there’s no way you’ll be able to pull off a nest egg that large, well, you may or may not be wrong.

But that almost doesn’t matter. Your best bet is to carve out your own savings goal and ignore what the surveys have to say.

A better way to set a retirement savings target

Fidelity suggests aiming to retire with a large enough nest egg to cover 10 times your ending salary. And while that’s not a perfect formula, it’s better guidance than telling yourself you have to come up with $4.3 million or you’re doomed.

Of course, if you’re only part way through your career, it can be tricky to determine what your ending salary will be. But you can make some educated guesses.

If you’re 35 years old earning $65,000 as an editor, and you know the most seasoned editors at your company make $120,000, you can use that as a benchmark. It may not be exactly what you end up earning in your 60s, but it could be close.

From there, if you use Fidelity’s formula, you’ll see that you should be aiming for a nest egg of $1.2 million. That’s certainly a lot of money. But it’s not $4.3 million.

A goal that seems really off target

While today’s workers seem to think that they’ll need $4.3 million for retirement, the reality is that New York Life found the average actual savings balance among workers today to be about $135,000.

Now to be fair, someone in their 20s with $135,000 in their IRA or 401(k) might manage to get to $4.3 million by their 60s through large contributions and savvy investments. But people in their 40s and 50s with only $135,000 are probably not going to reach the $4.3 million mark in their lifetime.

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And that’s okay. That figure really isn’t one you should get hung up on. Instead, do your best to save consistently, and if anything, use Fidelity’s formula to set a goal for your nest egg. The beauty of that guidance is that it’s specific to you. And since it’s your savings, that’s an important thing.

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

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Itching to go to Disney World? It’ll cost you. Read on to see if it’s worth it. 

I’m one of those people who swore I’d never set foot in a place like Disney World because I don’t like crowds, heat, and hoopla — things you’ll commonly find in the House of Mouse. But in the wake of incessant begging from my kids, I’ve now been to Disney World not once, not twice, but three times over the past five years.

Thankfully, I’ve been able to find ways to visit Disney on the cheap. Because I live in New Jersey, driving to Orlando is doable, and that’s cut our costs compared to the price of flying. I’ve also stayed off-property every time I’ve gone. And not paying for a Disney resort can be a huge source of savings.

MouseHacking reports that the average cost for a family of four to go to Disney World this year is $6,320. That includes flights, transportation to and from Disney World, a five-night stay at a lower-priced Disney hotel, Genie+ at two parks (which lets you get on rides faster), and quick service meals, snacks, and two table service meals during that time.

Your actual Disney plans might differ, of course, so consider that number a baseline. If you’re looking at a higher-end hotel or want table service at every meal, you’re going to spend more. And the time of the year you visit might impact your costs, too.

But either way, a Disney trip is a big expense. Before you commit to visiting the House of Mouse, it pays to run through these questions.

1. Can I afford this trip without taking on debt?

U.S. credit card balances reached $917 billion during the first quarter of 2023, says TransUnion. If you already have credit card debt, then you may want to hold off on Disney, or any big trip for that matter, until your balance is whittled down.

Similarly, Disney is billed as an unforgettable vacation that every family should experience and blah blah blah. But as magical as it may be, it’s definitely not worth taking on debt. So if you can’t pay off your vacation outright, you may want to choose something more economical and save up to go to Disney instead. After all, nothing takes away from a fun experience like the stress of a lingering credit card balance.

2. Is there a less expensive alternative that’s just as fun?

The fun of Disney World for kids is going on rides and meeting different characters. You won’t necessarily get the same experience at another theme park. But your kids might have just as much fun hurtling their bodies down water slides or riding roller coasters at an amusement park that’s closer to home and far less expensive to visit.

Before you commit to Disney, explore your options if money is tight. You may find that you can pull off a great trip for a quarter of the price of Disney.

3. Will my kids even appreciate a Disney trip?

You may be able to tell from the tone of this piece that I find Disney to be a bit overblown and very overpriced. But I will say that it’s probably worth experiencing with your kids once if you can swing it.

That said, you’ll want to go at an age when they’re apt to really appreciate it. And it’s hard to hit that sweet spot, but my recommendation is to go when your kids are between five and 10 years old.

If you go when they’re younger than that, they may not remember the trip, and they may be too small to get on certain rides. If you go when they’re older, they might roll their eyes at Mickey Mouse (or, like my daughter, boo Mickey outright when he waves at you during the afternoon parade) and find the rides too tame.

A Disney vacation might seem like a great thing for your family. And if you do go, I hope you have the time of your life. But no matter your financial situation, a Disney vacation is apt to cost a hefty sum. So make sure it’s the right choice for you.

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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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The timeline for reaching $100,000 in a brokerage account can vary. Find out when you’d hit this target and why it matters. 

Having a six-figure brokerage account balance is a major milestone. Once you have at least $100,000 saved, you are well on your way to becoming financially independent.

But when will this happen to you? Here’s what you need to know.

Here’s when you’ll hit $100,000 in your investment account

The timeline for hitting your first $100,000 depends both on how much you invest each month and what return on investments you earn. The table below shows examples of when you’ll be on track to hit this target.

As you can see, the more you invest each month, the faster you will hit your target. But your returns make a big difference as well. You can cut off a few years of time if you earn a 10% average annual return compared to earning just 6% per year.

So it’s worth taking the time to make sure you’re exposed to the right level of risk, as investing too conservatively could impact your investment performance and make reaching your goals harder.

A good rule of thumb is to invest money in the stock market that you won’t need for around two to five years, as that will give you time to wait out any potential downturns. Another common rule says you should subtract your age from 110 and put that percentage of your portfolio in the market. Following these guidelines can help you earn the returns you need.

The sooner you hit $100,000, the better off you’ll be

Making a point to try to hit your $100,000 milestone ASAP is important because once you have that much money invested, compound interest can do wonders to help you grow your wealth.

A $100,000 investment can turn into $259,374 in just 10 years’ time, and in 30 years’ time, your $100,000 investment could be worth $1.7 million. So, if you can save your $100,000 early on, you could easily become a multi-millionaire by retirement, even if you don’t contribute much else over the course of your career.

Now, it can be hard to find the money to reach this major goal quickly. Investing $1,000 a month out of your bank account is out of reach for most people. But you can free up some cash to invest each month if you make a commitment to doing so. This may mean bringing lunch to work instead of dining out, or looking for free entertainment options instead of spending a lot of money for expensive nights out.

But the payoff will be worth it if you can hit your $100,000 goal quickly and then spend years watching that money work for you and grow into millions.

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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 Target. The Motley Fool has a disclosure policy.

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