Money Management

Amazon just shared more details about October Prime Day. Read on for more info. 

Some families have a custom of celebrating Christmas in July. Amazon is doing its own variation on that theme by throwing its second Prime Day event of the year this October.

The event’s official name is Prime Big Deal Days, but since that’s a mouthful, October Prime Day seems like a better designation. And you should know that the big event will kick off at 3 a.m. on Oct. 10 and run through Oct. 11, similar to how July’s Prime Day event was a two-day affair.

Of course, events like Prime Day are always sort of a mixed bag. On the one hand, it’s great to have an opportunity to snag deals and reap savings on the items you know you want. On the other hand, navigating an event like this can be overwhelming, and it could lead you to make rash decisions that aren’t so good for your finances. So with that in mind, here are some things you should know about October Prime Day.

1. The deals will be dropping often

Amazon says that during its October Prime Day event, new deals will drop as often as every five minutes. That’s a lot to keep up with. But you can make the process of snagging those deals more manageable by doing a few things.

First, update your Amazon wish list with the items you’re looking to buy. As deals drop, those prices will get updated on your list so you can see whether there are discounts worth jumping on.

Also, Amazon is giving Prime members a chance to sign up for invitation-only deals on select items that are expected to sell out in short order during October Prime Day. These include goodies like:

Home security systems by BlinkJabra Elite 7 Active True Wireless Earbuds

Simply click on the yellow “Request invite” button, and you’ll get an email notification with a unique link to purchase these hot commodity items during Prime Day. You’ll be limited to one per account.

It also pays to visit the Prime Big Deal Days event page on the Amazon app between now and Oct. 10 to create deal alerts. That way, you’ll get notifications for the deals you’re subscribed to.

2. The deals may be lower than what you’ll find on Black Friday or Cyber Monday

Amazon hasn’t explicitly said that the prices it offers during October’s Prime Day event will be more competitive than its Black Friday or Cyber Monday deals. But there’s a good chance you’ll see the lowest prices of the season on select items between Oct. 10 and 11.

The reason? Amazon will no doubt want to lure in customers to do their holiday shopping in October, before they go and spend their money at competing retailers. So the online retail giant is likely to go to great lengths to entice consumers.

If you have money allocated to holiday shopping, then it could pay to make a bunch of purchases on Oct. 10 and 11. This way, you can also get ahead of supply chain issues that have the potential to impact your holiday shopping plans later on in the season.

3. You can sign up for a free trial ahead of October Prime Day

Don’t have an Amazon Prime membership yet? No problem. You can sign up for a free 30-day trial and enjoy the numerous deals that drop between Oct. 10 and 11.

But don’t wait until the last minute. You’ll need time to set up your deal alerts, so consider getting that membership in early October.

4. October Prime Day could lead to credit card debt if you aren’t careful

Amazon is very good at marketing. And it’s events like these that tend to drive consumers to spend money they don’t have.

Now, we just talked about the fact that the prices offered this October might in fact be Amazon’s lowest of the season. But one thing you really must do ahead of October Prime Day is figure out how much you can afford to spend on the big event. If your limit is $300, and going above that threshold will lead you into credit card debt, then stick to that $300, even if it means passing up a couple of bargains.

You might get a chance to save $50 on an item on your wishlist. But what if you’re forced to pay off that item via a lingering credit card balance? You might, over time, rack up enough interest that you’re negating that $50 in savings.

Plus, too much credit card debt could cause damage to your credit score. And a lower credit score could make it so that the next time you take out a loan, you’re paying a higher interest rate. That higher interest rate could easily wipe out your Prime Day savings.

As such, crunch your personal numbers before the big event and make sure you know your limit. And once you hit it, stop browsing on Amazon so you’re not tempted to make extra purchases.

Like many consumers, you may be looking forward to October’s Prime Day event. Keep these points in mind so you don’t miss out on deals, but also, so you don’t go overboard on spending and regret it after the fact.

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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.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Maurie Backman has positions in Amazon.com. The Motley Fool has positions in and recommends Amazon.com. The Motley Fool has a disclosure policy.

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Credit card debt can be expensive to pay off. Find out just how much a $10,000 credit card balance could cost you and what to do about it. 

Credit cards have many perks, but you need to be careful about how you use them. Because they only require small minimum payments every month, it’s easy to spend more than you can afford. If you end up with credit card debt, it can be difficult to repay. It’s also expensive, as the average credit card interest rate is now over 20%.

As you’d expect, it gets even more difficult (and more expensive), the higher your balance is. To show just how costly credit card debt can be, here’s a look at how much a $10,000 balance could cost you. And if you’re currently in this situation, we’ll also look at the best ways to get out of credit card debt.

How much a $10,000 credit card balance could cost you

The amount a credit card balance costs you depends on the interest rate and how much you pay toward it. For this example, we’ll use an interest rate of 20%, just under the current average.

You’re only obligated to make your credit card’s minimum payment. Each card issuer has its method for calculating minimum payment amounts, but many set the minimum as interest charges plus 1% of the balance, so we’ll use that. If you only make minimum payments, a $10,000 credit card balance will cost you $16,056.59 in interest and take 346 months to pay off.

Minimum payments on a $10,000 balance would start at $267 and decrease as you paid down what you owe. But if you kept paying the same $267 until your debt was paid off, you’d do it in 60 months and pay $5,810.26 in interest.

If you paid more than the minimum, you’d save even more. Here’s how the amount of interest and the payoff timeline change based on how much you pay:

How to get out of credit card debt

The most important part of getting out of credit card debt is paying more than the minimum. As you just saw, there’s a massive difference in how much interest costs you when you pay the minimum compared to when you pay more. And the more you can pay, the better.

Even if you’re dealing with a large amount of debt, every little bit helps. Just look at how paying off a $10,000 balance changes if you go from paying $300 per month to $400. You pay off your balance 17 months earlier this way and save nearly $1,700.

So, if you can work overtime or cut your spending to have more money to apply to your credit card debt, it’s absolutely worth it. The amount you pay has the biggest impact on how quickly you pay off debt — and how much it costs you.

There are also ways to refinance your credit card debt. The best options require a good credit score, meaning a score of 670 or higher. Here are two of the most popular options:

Balance transfer credit cards: These have a 0% intro APR on balance transfers, and some have introductory periods that last 15 months or longer. During the intro period, you can pay down your credit card debt interest-free.Debt consolidation loans: These are personal loans designed for paying off debt. They generally have lower interest rates than credit cards. You’ll also be able to pay back your loan on a set timeline with fixed monthly payments.

Financial tools like these can help you pay back credit card debt. That being said, the key is still to pay as much as you can. It’s ultimately your payment habits that make the difference in getting rid of credit card debt.

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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 hasn’t raised membership fees in six years. Is a change coming? Read on to find out. 

If you’ve ever marveled at the amount of savings you’re able to enjoy by shopping at Costco, you should know that a big reason the warehouse club giant is able to offer such competitive prices is through its membership fees. It’s revenue from those fees that allows Costco to pass savings onto customers in the form of low-cost groceries, household essentials, and a host of other items.

Right now, a basic Costco membership costs $60, while an Executive membership costs $120. The upgraded membership gives you 2% cash back on all Costco purchases, while a basic membership does not.

But there’s been talk of a Costco fee hike in recent months, and for good reason. The last time Costco raised its membership fees was June 2017. Back then, the cost of a basic membership increased from $55 to $60, while the Executive membership fee rose $10 from $110 to $120.

Prior to 2017, Costco raised membership fees in 2011. So the cadence for fee hikes seems to be around every six years or so. At this point, we’re beyond six years since Costco last increased the cost of memberships. And that’s why customers need to brace for an upcoming fee hike. The question is, when will it happen?

A matter of when, not if

At some point, Costco is going to raise the price of a membership. This is something the company’s CFO, Richard Galanti, confirmed earlier this year on a company earnings call.

Specifically, when asked about a fee hike, Galanti said, “In our view, it’s a question of when, not if.” However, Galanti followed that up to say, “But keep in mind, that’s one way that we become even more competitive.”

And that’s an important distinction. While some people may not be happy with the idea of a Costco fee hike — especially at a time when living costs are still elevated — the reality is that charging customers an extra $5 or $10 a year could allow Costco to maintain its vast inventory of goods at affordable prices. So even if you get stuck paying a slightly higher membership fee for Costco access, chances are, you’ll more than make up your money in the form of savings.

Now to be fair, we don’t know what sort of fee hike Costco will implement during its next go-round. But based on previous hikes, we’re probably looking at a $5 increase for a basic membership and a $10 increase for the Executive membership. So if you have a basic membership and you shop at Costco weekly, a $5 increase would mean paying an extra $0.10 a week to walk in the door.

Is a fee hike coming in 2023?

That’s really the big question. And we may have a better answer in late September, since that’s when the company is scheduled to next release earnings.

But whether Costco raises its fees in October, November, December, or beyond, the reality is that a membership will probably still be worth paying for. So all told, if you’re getting great value from Costco now, a modest increase to your membership fee probably isn’t something to lose sleep over.

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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 and Gala. The Motley Fool has a disclosure policy.

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Having a handle on your checking account is an important part of managing your finances. Learn what steps you can take to make using it easier. 

Managing a checking account is so much fun. After all, what could be better than spending hours poring over your bank statements, accounting for checks you’ve written and bills coming out soon, and deciding how much you need to transfer to different savings or investment accounts? It’s the perfect way to spend a Saturday night. Right?

Well, perhaps not so much. In fact, just about anything sounds better than spending hours managing your checking account. The good news is, you really don’t need to devote your limited time on this planet to account maintenance. You can effortlessly ensure that all the money in your account does what you need it to by taking a few simple steps.

1. Choose the right bank

The first crucial step in making sure managing your checking account is effortless is to pick the right bank.

You don’t want to worry about finding an ATM you can use to take out money, maintaining a certain balance to avoid monthly maintenance fees, or getting hit with overdraft fees — especially because consumers had $7.7 billion in overdraft or insufficient funds fees in 2022 alone.

Look for a bank that doesn’t charge you for overdrafting or for being a customer, and that has a wide ATM network or that reimburses ATM fees. You’ll also want to check out reviews of the bank app on the Google Play Store or App Store to ensure you can manage most aspects of your account online.

If your account is fee-free, that’s immediately a lot less hassle for you even if you do nothing else.

2. Figure out where you want your money to go

Next, if you want to make it easy and effortless to manage your checking account, you need to know what the money within it should be doing. Specifically, you should know:

How much you’ll need to cover fixed costs, like your mortgage or rent and car payment.How much needs to move over to retirement savings or savings accounts targeting other goals like going on vacation or covering car repairs or other costs you’re saving up for.

Determining your fixed costs is easy. Just look back at the bills you’ve paid over the past few months and add up the amount that must come out.

And figuring out your savings targets isn’t too hard either. Outline your specific financial goals, being as detailed as possible. For example, if you want to have a $20,000 down payment for a house in a year, your goal would be to save $1,667 a month for it. If you want to retire at age 67 with $1 million and you’re 30 now, you could use the calculator at Investor.gov to figure out you need to send $252.49 a month to a retirement account.

Make a list of these fixed expenses and savings goals you want to devote money to, and build a budget around them.

3. Set up automated transfers

The next step is to set up transfers of your money out of your checking account so it goes where it needs to automatically. You should set up automatic transfers for the following:

To your mortgage company or landlord for rentTo your creditors if you owe money for cards or a car paymentTo your utility providersTo anyone else you pay monthly bills to (like a streaming service or gym)To your retirement accountsTo your savings accountsTo your insurers

Basically, if you have an expense you need to pay out of your checking account, you should arrange to have it come out automatically. You can do that through your bank or through your brokerage firm or service provider — usually by filling out a simple form online.

You should typically arrange to have the money come out pretty soon after you get paid so you don’t have a chance to spend it on something non-essential. You might decide to have your mortgage and utility payments paid out of your first monthly check, for example, and to transfer money to savings and pay your creditors out of the second one. Your credit card company will likely allow you to change due dates upon request to make your payments better align with your pay schedule, or you can make sure the automatic payments are set up for well before the current due date.

Once you have automated everything you can — including deposits to savings accounts— you can feel free to spend whatever is left in your checking account. You’ll want to check in periodically to make sure that the automatic payments are going through and to see your balance, but doing that shouldn’t take more than a few minutes a month.

By following these steps, you won’t have to spend much (or any) time worrying about what to do with the cash in your checking account. You can get your Saturday nights back for other exciting things! Of course, if you’re old and boring like me, that probably means browsing Netflix for an hour to find something to watch before giving up and going to bed — but that’s still better than poring over checking account statements!

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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.Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Netflix, and Target. The Motley Fool has a disclosure policy.

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Owning stocks carries risk. Read on to see how this writer moved past her fears to build her portfolio. 

These days, I hold a variety of stocks in my brokerage account and retirement plan. But that wasn’t always the case.

There was a time in my life when I opted to stay away from stocks and instead put my money into safer investments, like bonds. I also intentionally kept a lot of my money in plain old cash beyond what I needed on hand for surprise bills.

The reason I shied away from stocks for a while was simple: I was scared. I knew that stocks carry a lot of risk and I didn’t want to see my hard-earned money get flushed down the drain.

But thankfully, I quickly learned to move past my fear of stocks and embrace them instead, despite the risks. Here’s how I did it.

1. I diversified my portfolio

There’s never going to be a guarantee that you won’t lose money in the stock market. But one way to mitigate that risk is to maintain a broad mix of investments. I’ve made a point through the years to invest in a range of companies and industries, and that gives me some peace of mind.

Let’s say you only invest in tech stocks, and that industry takes a dive. Guess what? Suddenly, you’re seeing a lot of red in your portfolio. But if tech stocks only comprise 15% of your portfolio, the damage shouldn’t be as bad.

If you find the idea of hand-picking stocks across different market sectors too time-consuming or intimidating, you can always load your portfolio with S&P 500 ETFs, or exchange-traded funds. That way, you effectively get exposure to the entire stock market (which the S&P 500 is generally considered to be representative of). You can also invest in sector-specific ETFs if you want to focus on certain corners of the market, like energy or healthcare companies.

2. I reminded myself that I wasn’t investing on a short-term basis

If you’re investing in stocks with the goal of cashing out your portfolio in a few years, you might lose money — and a lot of it. But that was never my intent.

Rather, when I started buying stocks, I knew my plan was to hold them for multiple decades since I was investing for my retirement. And I realized that gave me plenty of time to ride out a string of stock market downturns.

Over the past 50 years, the stock market has rewarded investors with an average annual 10% return, as measured by the S&P 500. But that doesn’t mean the market did well every year during that time.

In fact, since 1972, there were three years when the stock market lost more than 20% of its value. But there were also 19 years when it delivered returns of 20% or more. That 10% is an average, but it should give you comfort because it accounts for periods when the market did very poorly, too.

3. I realized how risky it was to not invest in stocks

Before I started loading up on stocks, I was largely making around 4% or 5% a year on my bond portfolio. And I thought that was pretty good, until I realized I might score twice as high a return by loading up on stocks. I also realized that avoiding stocks carried a less obvious risk: not meeting my savings goals by limiting myself to lower returns.

Let’s say you’re able to save $200 a month for retirement over 45 years. If you’re able to score an average yearly 5% return on your money, you might end up with around $383,000. That’s a decent nest egg to bring into retirement.

But what happens when you replace that 5% return for the 10% return the stock market has delivered over the past half-century? Suddenly, you’re looking at a nest egg worth over $1.7 million. Wouldn’t you rather retire on that?

The idea of owning stocks can be very intimidating. And it’s natural to be nervous about it. But if I can move past my fear of investing in stocks, so can you. And with any luck, getting over that fear will mean setting yourself up for a comfortable 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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