Money Management

There are big savings to be reaped for teachers who join Sam’s Club now. Read on to learn more. 

What happened

If you’re a teacher who’s been on the fence about joining Sam’s Club, now’s a good time to sign up. Through Aug. 15, teachers can get a basic Sam’s Club membership for just $20, which is 60% off the regular cost.

So what

A basic Sam’s Club membership costs $50 a year, while a Plus membership costs $110. The upgraded Plus membership offers the benefit of 2% cash back on qualifying purchases and other perks.

Now through Aug. 15, educators can sign up for a $20 annual basic Sam’s Club membership. The offer includes school staff and principals as well. Those who are eligible will have to go through an ID.me verification process through Sam’s Club to confirm that they qualify based on employment.

“We know that educators continue to dip into their own wallets to pay for classroom supplies, and we want to help ease the burden this year,” Scott Ludwig, vice president of membership at Sam’s Club, said in a statement.

Now what

Teachers can turn to Sam’s Club for a host of personal and classroom supplies, from tissues to cleaning products, that educators are often forced to pay for out of pocket. A $20 annual Sam’s Club membership is pretty hard to beat from a pricing perspective. But it only makes sense financially if you’re actually going to use it.

If you typically rely on the parents of students to stock your classroom, and you don’t particularly need a Sam’s Club membership on a personal level (say, you have a small home with very little storage space), then you may want to pass on this offer, tempting as it may be. That said, the National Education Association estimated out-of-pocket spending among teachers at $820 on average for the 2022-2023 academic year. And well over 90% of teachers routinely shell out money from their own paychecks to cover the cost of supplies.

So chances are, if you have easy enough access to Sam’s Club, you’ll end up benefiting from a membership. Of course, if the closest warehouse club store is 30 minutes away and you don’t see yourself getting over very often, then you may not want to sign up, despite the ultra-low price point. And you may decide to forgo a membership if you find that your local dollar store commonly stocks the items you need at a lower price point than what Sam’s has to offer.

Finally, you may be wondering if it’s more cost-effective to join Costco over Sam’s Club. You may be inclined to do so if you have a Costco that’s closer to your school or where you live.

But one thing you should know is that Costco rarely, if ever, offers discounts on its memberships. So at a minimum, you’re probably looking at $60 to join Costco at the basic membership level, or $120 for an executive membership. If you’ve never shopped at a warehouse club before and aren’t sure how much use you’ll get out of a membership, you may want to start by paying $20 for a year of Sam’s Club access and see how that goes before committing to a more expensive membership elsewhere.

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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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There are two types of 529 plans available. Learn about their key differences so you can choose the right option for your child’s college fund. 

As a parent, you may want your kids to have the opportunity to continue their education after high school. Not only is it a rewarding experience for them, it’s one that can benefit them financially, as well. Average U.S. income data compiled by The Motley Fool Ascent found that workers with bachelor’s degrees earn nearly twice as much as high school graduates.

But going to college in the United States isn’t cheap. The average cost is $36,436 per year, according to the Education Data Initiative. Many parents open tax-advantaged 529 plans to save for their children’s future college expenses.

If you’re thinking about setting up a 529 plan, there are two different types of plans available. You’ll want to know how they differ and their pros and cons before you decide which one to use.

1. You can either invest through an education savings plan or pay for tuition in advance with a prepaid tuition plan

With 529 plans, you have the option of an education savings plan or a prepaid tuition plan. Here’s how they let you save for college costs:

An education savings plan lets you set up an investment account for your child’s future education expenses. You can use the money you deposit to invest in stocks and bonds. 529 plan providers normally offer age-based plans, where the plan provider sets up an investment portfolio based on when your child is expected to start college. Or, you can pick the investments yourself.A prepaid tuition plan lets you purchase units at participating colleges at their current prices. These are typically only available with public, in-state universities. By prepaying for tuition this way, you effectively lock in that rate and don’t need to worry about prices rising in the future.

So, with an education savings plan, the point is to grow college savings as much as possible by investing it. A prepaid tuition plan is a way of guaranteeing you get today’s tuition rates.

2. Most states offer education savings plans, but only eight offer prepaid tuition plans

Your 529 plan options depend on where you live, and education savings plans are much more widely available. Every state except Wyoming (which doesn’t offer any type of 529 plan) offers an education savings plan.

While there used to be 22 states with prepaid tuition plans, many have gotten rid of them. There are now only eight states that offer this type of plan:

FloridaMassachusettsMichiganMississippiNevadaPennsylvaniaTexasWashington

If you don’t live in one of those states, then your decision on which 529 plan to choose is pretty much made for you. And if you do, it’s also worth mentioning that many states only allow you to open a prepaid tuition plan during certain enrollment periods.

3. Education savings plans can pay for more types of college expenses

Students can use funds in education savings plans for any qualified education expenses. Qualified education expenses include:

Tuition and fees at college or trade schoolBooks and suppliesFood and meal plansRoom and board, including off-campus housing

These plans generally allow withdrawals for education costs directly to the beneficiary’s bank account, too. This makes it easy for students to use their college savings.

Prepaid tuition plans are far more limited. Since you’re purchasing college units, funds in a prepaid tuition plan generally can’t be used for any other types of expenses. That means students can’t use them to cover expenses for their books, food, or housing.

It’s also worth reiterating that units purchased through prepaid tuition plans are only valid at participating universities. If your child wants to go to another university, such as an out-of-state school, funds in a prepaid tuition may only cover a portion of tuition costs.

For most parents, education savings plans are the better way to save for college. They’re more flexible in how the beneficiary uses the money and available in almost the entire country. If you live in a state with a prepaid tuition plan, it may be worth considering if you want to lock in a tuition rate. But you’ll need to be confident that your child will go to a participating school.

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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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Becoming a millionaire is possible if you start working on it early enough. Read on for ways to get there. 

By the time your 30s roll around, you’ll hopefully be in a reasonably solid place financially. This doesn’t mean you won’t have mounting bills and childcare expenses to grapple with. But, ideally, you’ll be earning a decent wage thanks to your decade of work experience, and you’ll maybe have some money in the bank for a rainy day.

In fact, your 30s are a great time to set out on the path to becoming a millionaire. Here are three moves to make during that pivotal decade of life to reach that goal.

1. Pay off lingering debts

You don’t need to push yourself to pay off your mortgage during your 30s, and it’s even okay to repay an auto loan on schedule (as opposed to sooner) because a car is a necessity. But one thing you really don’t want to do is continue paying interest on costly debts like credit card balances. The longer you continue to do so, the more money you’ll waste — and the less you’ll have to save and invest.

Take a look at your current debts, and aim to pay off credit cards and any high-interest loans you’re carrying during your 30s. That way, you’ll be able to work toward your goals without being held back.

2. Automate retirement plan contributions

Your 30s are a good time to start funding an IRA consistently. And if you’re worried you’re not disciplined enough to set aside money for retirement savings, then put the process on autopilot.

Many IRAs will allow you to set up an automatic transfer so that money hits your account on a regular basis. That way, you can rest assured you’re funding that account, and you won’t have to worry about things like impulse buys getting in the way of your long-term goals.

3. Invest money in stocks

Some people are hesitant to put their money into the stock market due to the risks involved. When you buy stocks, there’s always a chance of losing money — there’s no getting around that.

However, you should know that over the past 50 years, the stock market, as measured by the performance of the S&P 500 index, has delivered an average annual return of 10% (before inflation). And that 10% accounts for years when the market was up as well as down.

Meanwhile, let’s say you start funding your IRA with $300 monthly contributions at age 31. If you do so until age 67, all the while generating an average annual 10% return in your account, you’ll end up with a nest egg worth close to $1.1 million. Make it $500 a month in contributions, and you’ll be looking at around $1.8 million after all’s said and done.

There are more than 5 million Americans who are considered millionaires, and it’s fair to assume that many of those people did not reach that point until later in life. But if you make these important moves in your 30s, you can set yourself up to become a millionaire right in time for retirement.

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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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Buying a home requires just a down payment, right? Wrong. Keep reading to learn about what else you’ll be on the hook for when you buy a house. 

Roughly two-thirds of Americans own a home, and it’s a not-insignificant part of the mythical American Dream. Unfortunately, buying a home isn’t cheap. Based on how mortgage rates have been looking lately (as of this writing, the average rate for a 30-year fixed-rate mortgage loan is 6.96%, per Freddie Mac), I’m expecting my housing costs to double in the process of going from renter to homeowner.

While I’m already anticipating those higher monthly costs when I buy (ideally next year), I’m also looking at the big picture, and the cash I’m saving now will have to cover a few different expenses on the way to actually getting to call myself a homeowner.

1. Earnest money deposit

The market has been favoring sellers for the last few years — this means there are more buyers than sellers, and as such, sellers are fielding more (and higher) offers. So to sweeten a potential deal, it’s a good idea to make an earnest money deposit to show a seller you’re serious and less likely to back out of the purchase, because you’ll lose the money if you do.

One nice thing about an earnest money deposit is that if the sale goes through, that sum is just rolled into your down payment. So even if I have to cough up some money when I find a place to buy, it just means that I’ll have less to pay for a down payment later (more on down payments below).

2. A home inspection

You might expect the cost of a home inspection to be rolled into closing costs (more on those below), but I’m hoping to choose a well-regarded home inspector myself and as such, I can expect to pay them directly when they check out my future home. A home inspection is not required when you buy with a conventional loan, and that’s my plan. If I were getting an FHA mortgage loan, however, an inspection would be required to ensure the home’s livability. But even though I don’t strictly have to get the house inspected to be able to buy it, I absolutely will be.

A home inspection is for the buyer’s protection — you want to know the actual condition of the house you’re buying. Even if an inspection turns up a problem, it doesn’t mean you have to terminate a purchase contract. Rather, you can renegotiate the price with the seller, or ask them to fix the problem. Knowledge is power in all things, and especially in the home-buying process.

3. Down payment

My down payment will be the largest chunk of money I’ll have to cover in the course of buying. While I may be able to buy with as little as 3% down on a conventional mortgage loan, I’m intending to make a down payment of at least 10% of my home’s purchase price.

If I put down 20% or more, I could avoid paying for PMI (private mortgage insurance) and save money on my monthly housing costs. PMI protects a mortgage lender, rather than a homeowner. It’s an insurance policy that ensures the lender will be out less money if the homeowner stops making payments on the loan. It’s charged monthly and is part of a mortgage payment. The good news is that it can be canceled once you reach 20% equity in your home.

4. Closing costs

In addition to signing a stack of paperwork when I actually get to the closing table, I’ll also need to be ready to pay closing costs. Closing costs generally amount to 2%-5% of a home’s purchase price, and can include the following:

Mortgage loan application and origination feesUnderwriting feesCredit report costsA home appraisalProperty taxesTitle insurance

This isn’t an exhaustive list, and different states have different requirements (and fees) for closing on a home loan.

5. Moving expenses

Even after the paperwork is signed and I have the keys to my new home (and a big gaping hole in my savings account from paying the above costs), I’ll still need to cough up more money to move. My next move will be a local one, as I’m hoping to buy a home in the same city I live in now (and I love my current neighborhood, so I’m not opposed to making it a very local move). Just the same, I’ll need to refresh my supply of moving boxes, tape, and bubble wrap, and hire a moving company to safely transport my belongings from my apartment to a house.

As you can see, my costs don’t begin and end with a down payment — there’s a lot more to worry about along the way to becoming a homeowner. If you’re thinking of buying a home, it’s worth exploring how much you can expect to pay for these upfront costs, even if you know you can afford the mortgage payments.

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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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Hanging onto an old vehicle can be great for your finances. Keep reading to learn what to expect if you pay your car off and keep it around for a while. 

In many parts of the United States, it’s difficult to manage without a car due to a lack of convenient public transportation. And if you’re responsible for transporting other people (such as taking your kids to school and activities), going without a car is even harder.

Unfortunately, owning a vehicle isn’t cheap, and since car prices have been even higher as of late, the problem has only gotten worse. Per Car and Driver, the average price of a new car in spring 2023 was $48,008, while Cox Automotive reported an average used car listing price of $26,969 during the same time period.

One way to really get the most value out of a car purchase and also keep your costs (which go beyond just monthly auto loan payments) lower is to keep a car for as long as you can. Here’s what to expect if you’ve committed to hanging onto your car for more than 10 years.

You don’t have a car payment

If you keep a car for more than a decade, the number of years you’ll be without a car payment will depend on the initial length of your loan. Whether that’s just a couple years or quite a few, not having to make a car payment every month can be a major boon for your finances. If you bought a used car, your payment may have only been a few hundred dollars a month, but if you bought new, those payments may have eaten up a big part of your monthly budget. Without a car payment, you can save that money, invest it, or put it toward a goal like buying a home.

While no longer having a car payment is worth celebrating, it doesn’t mean the other costs of having a car disappear. You’ll still need to pay for gas, of course, and regular maintenance, such as oil changes and buying new tires, becomes crucial to keep your car in good working order. And you absolutely can’t go without auto insurance — but there may be good news on that front for an older car.

Your insurance costs could decrease

In addition to kissing that car payment goodbye, you might also see lower auto insurance premiums as your car gets older. Progressive notes that in general, car insurance is cheaper for older cars. This is due to the fact that your car depreciates in value over time, meaning that if the car is totaled in a wreck, the auto insurer wouldn’t have to pay out as much money.

You can also save on insurance on an older, paid-off car by dropping some coverage types. For example, you may not want to keep paying for full coverage insurance — ValuePenguin found that this type of policy is only worth the cost if your car is younger than 10 years old. If you’re still paying on a car loan, you won’t have the option to reduce coverage (which makes sense, as your lender wants to be sure its asset is protected).

You may have to pay for unusual repairs — or live with quirks

It stands to reason that the longer you keep a vehicle, the more likely it is that your car will require less-common repairs. You might have to replace parts that only wear out over a long period of time. Throughout my own experience of owning an older car, I’ve collected a host of broken components that I’ve either learned to live with, or I’ve paid to have repaired.

My trunk’s hinges are broken, meaning I only use the trunk when I absolutely have to. And two out of four electric window motors are broken and I haven’t bothered coughing up the cash to fix them. But I did shell out $1,250 to fix the coil springs in the suspension late last year, because not doing so would have resulted in more damage down the line — and possibly even a car accident. So when it comes to repairs on my old car, I am judicious, for the sake of my checking account.

If you’re someone who prioritizes driving a newer car, it might not be appealing to keep your current car for years past paying off your auto loan — and that’s perfectly okay! The nice thing about our personal finances is that they’re just that: personal. But if you want to spend less on transportation costs over time, hanging onto an old car might be a good idea.

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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 recommends Progressive. The Motley Fool has a disclosure policy.

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