Money Management

Needless purchases could drive you into debt. Read on for tips to avoid them. 

People have different ways of coping with stress and disappointment. For some, soaking in a warm bath or taking a yoga class can be a mood-lifter. For others, consuming four or five chocolate bars in a single sitting will do the trick.

But for many people, retail therapy — hitting the stores or shopping online and loading up on unplanned, unnecessary purchases — is what it takes to go from feeling down to feeling content. And if you can afford to indulge in retail therapy, by all means, do so.

Let’s say you have plenty of money in your savings account and a $100 purse you buy on a whim spells the difference between moping around or feeling happy for the rest of the weekend. If you can swing that purchase, do it.

The problem is that many people can’t afford to engage in retail therapy — yet they do it anyway. And that could lead to a major pile of credit card debt.

When you can’t afford your unplanned buys

Recent data from Debt.com found that many people use retail therapy to cope with life’s different stressors. The problem, though, is that around 12% of people buy items they later regret every week and charge those expenses on credit cards.

For most of these people, that’s resulted in debt of $1,000 or less. But among those engaging in retail therapy, 16% incurred debts of over $1,000 and up to $5,000, while almost 15% had debt piles of over $5,000 and up to $15,000. Yikes.

An alternative that won’t wreck your finances

Any time you fail to pay off a credit card balance in full, you automatically accrue interest on it — unless you happen to have a 0% introductory rate on your credit card, in which case you’ll get a reprieve for a limited period.

You might think that carrying, say, a $500 credit card balance forward is no big deal. But if it takes you a year to pay off a $500 balance at an 18% interest rate, you’ll lose $50 to interest. That’s money you could’ve spent on something else. And also, that’s just a $500 balance. If you rack up a balance 10 times as high, the damage could be severe.

That’s why turning to retail therapy when you’re feeling down or stressed may not be the best bet. So instead of doing that, find other ways to cope with sadness or stress.

Enlist a buddy to join you for a walk, or cook up your favorite meal and help yourself to seconds. You might also decide to curl up in bed with your favorite streaming or book series, and that, too, is a great way to push through a tough week.

Meanwhile, if you’re someone who really relies on retail therapy and can’t come to terms with an alternative, maintain a savings account specifically for that purpose. As mentioned earlier, treating yourself to some fun, unplanned purchases really isn’t a problem if you can afford to buy them outright without racking up debt, and if those purchases aren’t impeding another major goal.

So if you’re someone who just plain likes to shop and tends to do so to cope when life doesn’t go your way, don’t fight it. Just save for it so you don’t have to suffer any negative consequences.

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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 saves you money by selling goods in bulk. But what about its laptops? Found out if a Costco laptop is a good deal. 

Costco is well-known for selling stuff at low prices when you buy in bulk. But for items you probably don’t want to buy a dozen at a time — like laptops and other electronics — you might be wondering if Costco still lives up to its low-price reputation.

In general, yes, Costco usually sells laptops and electronics at slightly lower prices than the manufacturer’s price — but with a strong emphasis on “usually.” Every now and then, the manufacturer or another store will offer sale prices that can beat Costco, especially if the warehouse isn’t offering a sale itself.

Even so, I’d say Costco is still worth considering when you’re shopping for a laptop, and not just because of price alone. While its electronics selection isn’t vast, here are a few reasons to buy a laptop at the warehouse.

1. 90-day return policy

Costco lets you return a laptop for a full refund within 90 days after you received it. What’s more, Costco isn’t picky about returns and will likely accept laptops even if you don’t have the original packaging.

In comparison, Best Buy gives you 15 days to return most items or 60 days if you’re a My Best Buy Plus member (which costs roughly $50 per year). Amazon, for its part, accepts most laptops within 30 days of delivery (Apple laptops are accepted within 15 days), but only if it arrived damaged or you haven’t opened the box.

2. Free technical support

Costco Concierge Services give members free troubleshooting and technical support over the phone. This not only applies to laptops but also to other Costco electronics, such as televisions, projectors, and cameras. So if you’re having trouble with your new laptop, you can get free help.

3. Costco extended two-year warranty

Just for being a Costco member — whether that’s Gold Star or Executive — you get an automatic one-year extension on the manufacturer’s one-year warranty. That gives you two years of coverage for mechanical or electrical failures that occur after normal use.

4. Extra cash back (for Executive members)

For Costco Executive members, you can earn 2% back on laptop purchases. Not only that, but you could also earn 2% back if you have the Costco Anywhere Visa® Card by Citi, for a total of 4% back on your laptop. If you spent $2,500, then you would earn $100 in total rewards.

It pays to shop around

Costco’s prices are typically on par with other electronics stores, unless those stores are having sales. For example, I was recently looking for a 2023 16″ Macbook Pro. I found the laptop was most expensive on Apple’s website ($2,499), while it was priced slightly cheaper on Costco.com ($2,449.99). However, on Best Buy’s website, the same Macbook was $2,299, while on Amazon it was even cheaper — $2,249.

For the sake of your personal finances, it pays to shop around. Do keep in mind, however, that other stores may not offer the same benefits you get at Costco, such as the 90-day return window or two-year extended warranty. I would also check out Costco’s laptop prices in-store first, as online prices tend to be higher. Compare that price with other stores to get a better idea of who has the better deal.

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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.Citigroup is an advertising partner of The Ascent, a Motley Fool company. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool has positions in and recommends Amazon.com, Apple, Best Buy, Costco Wholesale, and Visa. The Motley Fool has a disclosure policy.

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