Money Management

Becoming a Sam’s Club member could help you save money, but it costs money to join. Here are some reasons why you may want to get rid of your membership. 

For many shoppers, a warehouse club can be an investment that offers significant savings. Buying food and everyday essentials in bulk could make it easier to stay on budget. But a Costco or Sam’s Club membership isn’t a fit for everyone. Here are a few signs that may suggest you should cancel your Sam’s Club membership to avoid wasting money.

1. You’re not shopping there often

To get good value out of your Sam’s Club membership, you’ll want to visit your local club at least a few times throughout the year. How often you’ll need to shop depends on your needs, budget, and storage availability. If you’re finding that you only visit once or twice a year, it may not be worthwhile to continue paying for an annual membership. Instead, you might consider shopping at other affordable stores like Trader Joe’s or Aldi to keep your grocery spending to a minimum.

2. You’re overspending

If you’re not careful, overspending can become an issue that negatively impacts your personal finances. No matter where you shop, it’s best to plan your trips and make a list first. If you don’t do this, it can be too easy to overfill your cart and spend more than you can afford.

It’s easy to overspend at warehouse clubs because many great deals will catch your eye. You might also feel tempted to try new products you don’t need. If you’re spending more than you can afford and are worried about accumulating credit card debt, it’s probably time to say goodbye to your Sam’s Club membership.

3. Your household has downsized

A warehouse club membership can be worthwhile for larger households. Buying in bulk is easier when you live with multiple people who will use everything before it expires. Getting value from a Sam’s Club membership can be more challenging for solo shoppers and couples, as it may take longer to use everything purchased before it goes to waste. If your household has recently gotten smaller (say, if a child left for college), you may want to reconsider your membership.

4. The items you prefer to buy aren’t sold at Sam’s Club

Not every item you usually buy will be available at your local club. If some items you typically buy aren’t sold at Sam’s Club, you may want to try similar alternatives. But if that’s not working for you and you prefer to get your usual products or go-to brands from other retailers, you may want to cancel your membership so you’re not wasting your hard-earned money.

5. You’ve moved and no longer live near a Sam’s Club

A Sam’s Club membership can be well worth the cost if you have a store location near you. But if the closest club is too far of a drive or not in an ideal location, it may not be a good fit for you anymore. If you’ve moved or are planning to soon and still want a warehouse club membership, you may want to see if a Costco is nearby instead.

How to decide if a Sam’s Club membership is right for you

Not every shopper will benefit from becoming a Sam’s Club member, and that’s okay. If you’re trying to decide if you should continue paying for a membership, consider your shopping and spending habits to determine if the cost should still be included in your budget.

If a Sam’s Club membership no longer makes sense for you, there are other ways to save money when buying groceries and household essentials. Shopping sale items, sticking to your list, and purchasing store-brand items could help you keep more money in your checking account. Plus, using a cash back rewards credit card is an excellent way to earn rewards on your spending.

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You might think investing your money is the same thing as gambling with it. Read on to see why that isn’t the case. 

I have a friend in her 40s who has never owned a stock in her life. In fact, she doesn’t even have a brokerage account or IRA. She keeps all of her money in cash, tucked away in a savings account that, for years, earned minimal interest.

See, in my friend’s view, investing in stocks is akin to gambling. And I’m sure she’s not the only person who feels that way.

But investing and gambling really are two different beasts. And the sooner you realize that, the sooner you might get on board with the idea of buying stocks or other assets and growing your wealth over time.

You get to actually own something when you invest

When you throw $20 into a slot machine, you’re not buying something of value. You’re simply buying the opportunity to potentially make money if that machine ends up being kind to you (and that’s a very big “if”).

When you buy stocks, ETFs, or bonds, you’re buying an asset of actual value that can be measured. If you put $20 into shares of a given stock, you own those shares — meaning, you own a stake in the company you’re investing in.

This isn’t to say that you’re guaranteed to make money on your investment. Your $20 in stock might end up being worth $15 in a few months if the company or broad market underperforms.

But either way, investing means actually getting to own assets. When you gamble, you don’t own a thing.

You can mitigate your risks

Both investing money and gambling carry risk. But with the former, you can mitigate your risk by investing on a long-term basis.

Over the past 50 years, the stock market has delivered an average annual return of 10% before inflation, as measured by the S&P 500 index’s performance. But this doesn’t mean the stock market has returned 10% every single year during that period.

In fact, during the Great Recession, which occurred between December 2007 and June 2009, the S&P 500 fell roughly 37.5%. So someone who invested money in, say, June 2007 and sold their stocks two years later would’ve been looking at major losses.

But the market has also managed to recover since then. And over time, it managed to deliver an average yearly 10% return despite having lost 37.5% of its value during a 19-month period.

The point, therefore, is that if you pledge to hold onto your investments for many years, there’s a good chance you’ll come out ahead financially in the long run. Your portfolio value might decline at times, such as during periods of broad market turbulence. But overall, you’re likely to make money if you invest for several decades in an index like the S&P 500.

Now, you can argue that it’s possible to make money by gambling, too. And it certainly is possible. But there’s really nothing you can do to mitigate your risk when you throw money into a slot machine. There are ways to mitigate your risk as an investor. And that’s an important point to keep in mind if you’re the type who insists on keeping all of their money in savings because you think buying stocks means gambling your money away.

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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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My son will be attending camp this summer, and I’m paying a lot of money for it. Read on to learn why it’s important for him to go. 

This summer, my 4-year-old son will be attending a wonderful arts-integrated summer camp. The camp is enriching and exciting and expensive. I’ll be paying several thousand dollars for him to attend camps during most of the weeks of the summer.

While this is a big expense, it makes sense for my situation despite the hit my bank account will take. Here’s why it makes sense for me to give my credit cards a workout and pay the money for him to attend.

Sending my son to camp allows me to work

The biggest reason it pays off for me to send my son to camp is that doing so allows me to work. I don’t have regular childcare through most of the year, so when my son is at preschool or at camp, those hours provide me with the opportunity to get uninterrupted work done, rather than having to try to do my job around nap times or playtimes or waiting until my husband comes home in the evening.

Since my hourly rate is higher than the cost per hour to send my son to camp, paying the fees for him to attend is a no-brainer. Of course, the cost eats into what I can earn — but the economics of it still make sense since I’m bringing in much more than I’m spending.

The camp is convenient and close to my house

I perhaps could have chosen a slightly less expensive camp to take my son to, but this one is just nine minutes from my house — which is a big deal since we live in an area that’s kind of rural during the summer months.

Since there’s not much that’s close to my house, I could easily have ended up driving him to a camp that was between 20 and 40 minutes away. Since I have to do both drop off and pickup, that would have cut into my work time in a major way.

It makes more sense for me to pay the extra for the camp I found for him that’s close by, so I get that extra time to do a little bit of extra work and further offset the cost of the camp.

The camp provides him with the socialization he needs to stay on track

Finally, the last big reason why paying for the camp makes sense is because it will help my son develop his social and academic skills. As a COVID baby (he was 6 months old when the pandemic started), he missed a lot of time learning how to be with friends. He has made a lot of progress over the past year in preschool at figuring out how to play nicely with other children, and I think the camp will provide him the chance to continue developing his social skills in a positive way.

The bottom line is, kids are expensive and it’s important to be prepared for costs like summer camp if you are a working parent. I made room in my budget early in the year to be able to afford this, and many parents could benefit from doing the same.

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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.

 Read More