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Money Management

7 Things You Should Never (Ever) Do at Costco

By Money Management No Comments

Even a Costco expert can learn a trick or two. That includes these seven things you should never do at Costco. 

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A few days ago, I stopped by Costco on my way home from an appointment, and was surprised by how wonderful the experience was. Of course, it was a weekday and the last time I’d been in Costco had been the weekend before. The difference was startling. There were very few people in the store. Everything was calm, peaceful, and so different from what I’ve grown accustomed to.

And that got me thinking. For Costco employees, it must be like working in two different worlds. They get those quiet, peaceful weekday mornings, and the wild weekends with carts blocking the aisles and members jostling for position.

By the time I got back to my desk, it was still fresh on my mind. And so, I did what I’ve been doing lately — I went down a Reddit hole (that may be my new term for rabbit hole). I specifically visited a subreddit where employees, both current and former, discuss their experiences with Costco members. Here’s the inside scoop, highlighting the seven things we should never, ever do at Costco.

1. Don’t pretend employees are invisible

According to employees, it’s easy to feel invisible, or at the very least, unimportant. If you see an employee pushing a huge cart, loaded with thousands of pounds of merchandise, stop and let them pass. That’s not always what happens. According to the folks on Reddit, some people like to cut in front of a cart or pallet jack, forcing the employee to try to stop. It’s both unsafe and rude.

By the same token, do not continue a conversation on your cell phone as you’re checking out. It’s possible that the cashier will have a question for you, and even if they don’t, it’s a good idea to pay attention to what’s going on as you pay. Besides, as one employee said, if you’re not paying attention and the line is long, someone is likely to slip right in front of you.

2. Don’t assume ‘someone will clean it up’

Employees are responsible for restacking boxes that members rifle through at the front of the store. They must also refold and stack clothing that’s been pushed from a table to the floor. And stray toys parents have allowed their little ones to carry through the warehouse must be gathered and put back where they belong.

It’s easy to say “It’s their job and they’re getting paid for it,” but being rude to an employee is just being rude — whether they see you do it or not.

3. Don’t arrive just before closing time

When a customer comes through the door just before closing, store managers must stay past closing time until they’re finished shopping. According to employees, some members will even squat down to slip in under the gates as they’re being closed. I get the desire to buy bargains and leave a little extra in the bank, but honestly, squatting under a gate sounds both desperate and dangerous.

4. Don’t pick something up just to be nice

According to employees, you should never feel as though you must buy a product simply because you tried it. And no matter how nice the server is, don’t take a product you aren’t absolutely sure you’re going to buy.

Here’s why: At the end of their shift, sample servers take inventory of how many products were sold from their station. Then, at the end of the day, if the number doesn’t match up with the overall inventory remaining, someone has to find the missing product. It’s not the sample server because they’re normally not Costco employees. Instead, an employee must go on the hunt, taking them away from other duties.

If you liked the sample (or even if you thought it was horrible), it’s okay to give the server a smile and walk away. You don’t have to take anything with you.

5. Don’t climb

This should go without saying, but you should never climb up on a pallet, shelf, or any other surface to get to something you need. If you can’t reach an item, ask an employee to get it down for you. According to those on the subreddit, employees would rather get a ladder than see someone get hurt.

6. Don’t abuse your membership

With the thousands of products Costco carries and the number of cars in the parking lot on any given Saturday, you’d think that the retailer makes the bulk of its money from merchandise sales. That’s not the case, though.

After administrative costs and all other fees are accounted for, Costco only makes a small profit from the sale of merchandise. Where it makes money is by selling memberships. Not only do those membership fees represent a steady stream of revenue, but they also mean that Costco spends far less on advertising than other retailers.

People who abuse their memberships by allowing dozens of other people to piggyback on it eventually hurt everyone. The desire to help other people save money is noble. However, at some point, Costco may be forced to raise prices to make up for all those who take advantage of the retailer without contributing to its success.

7. Don’t stick to a single location

Whether it’s across town or across the country, different Costco stores carry different products. Learning what’s available in other stores expands the benefit of being a Costco member. In fact, if you’re ever visiting a foreign country, find out if there’s a Costco you can visit there. International travelers love to report back on the weird and wonderful things they find in foreign Costco warehouses.

If it helps, pretend you’re shopping with your mother. If Mom wouldn’t endorse an action, you probably shouldn’t do it.

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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.Dana George 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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This Is Why Your Credit Card Debt Could Get More Expensive Soon

By Money Management No Comments

Do you have credit card debt? Credit card interest rates could rise soon, making your debt more costly. Find out how this news could impact your finances. 

Image source: Getty Images

Many Americans have outstanding credit card debt they’re working to pay off. This type of high-interest debt can quickly become costly. If you carry a balance on your credit card, you’ll continue to be charged interest. If you have credit card debt, you should know that your debt could get more expensive if credit card interest rates increase in the near future.

Credit card interest rates could increase

On May 3, 2023, the Federal Reserve hiked its federal funds rate for the 10th time since March 2022. The current Fed rate is now 5% to 5.25%. Changes to this rate can impact consumer interest rates. When the federal funds rate rises, banks tend to increase interest rates for products such as credit cards, savings accounts, and loans.

What does that mean for your credit cards? Most credit cards have variable interest rates, which means the interest rate can change periodically. If you use credit cards, your credit card interest rates may have recently increased, or they may increase soon due to the recent Fed rate hike. Higher interest rates mean more debt for those with a credit card balance. This news is worth knowing if you’re working to pay off your credit card debt.

How to get rid of credit card debt

Outstanding credit card debt can keep you from reaching other personal finance goals. But if you work to pay off your debt sooner rather than later, you can put yourself in a better financial position and feel less stressed about money. It’s understandable if your debt feels overwhelming, but it’s possible to pay off your credit card debt. Here are some tips:

1. Be honest about your situation

If you’re ready to tackle your debt, be honest about how much debt you have. There’s no benefit in hiding from your situation, especially because credit card interest charges will continue to accrue even if you ignore your debt. You’ll need to know how much debt you have to create a realistic debt payoff plan. You can use a debt payoff app to guide you.

2. Consider tackling the debt with the highest interest first

Some consumers follow the debt avalanche method when tackling costly credit card debt. With this strategy, you first focus on paying off the debt with the highest interest rate. As you do this, you’ll want to continue paying at least the minimum amount due on your other credit cards. Eliminating high-interest debt first can save you money in the long run.

3. Avoid more debt with a balance transfer credit card

If you hope to pay off your credit card debt, you may want to consider using a balance transfer credit card. You can score a promotional 0% interest rate for a set period to avoid additional interest charges as you aggressively pay down your debt. Many balance transfer credit cards offer 0% APR for 18 months or more — which gives you time to tackle your debt.

While you’ll pay a balance transfer fee, usually 3% to 5% of the transferred balance, a balance transfer credit card can save on interest charges so you can eliminate your debt faster. You can use this credit card interest calculator to determine how much you’ll need to pay to eliminate your entire debt during the 0% interest period before interest starts to be charged.

Consider how interest rates impact your finances

No matter what financial product you utilize, don’t ignore interest rates. A higher interest rate can be a win for your high-yield savings account balance, but high interest rates aren’t ideal for those with credit card debt. If you don’t have existing debt but use credit cards regularly, you can avoid interest by paying your entire balance off every month.

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The 5 Best Small Business Grants in New York

By Money Management No Comments

Don’t leave free money on the table. Small business grants in New York can help you establish your business. Read on to learn how. 

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New York small business owners are in luck. The state of New York has numerous grant programs that can give your startup, nonprofit, or established business a major boost with no strings attached funding. While competition for seed money can be intense, here are five small business grants in New York worth considering.

1. Global NY Fund Grant Program

What it is: A grant sponsored by Empire State Development to help businesses and nonprofits start or increase their global exports.

How much grant money can you get? For small businesses, the Global NY fund will reimburse 50% of your total project costs up to $25,000. For nonprofits, the program will reimburse 75% up to $100,000.

Who’s eligible: Small businesses located in New York State that have 500 or fewer employees and want to develop exports or expand sales into foreign markets.

Deadline to apply: No deadline. Fill out a Grant Fund application electronically and email it to the ESD. You can find more details on ESD’s website.

2. New York Foundation Grant

What it is: A generous multi-year grant that supports a wide range of community-led organizations, but especially those addressing systemic problems of oppression and inequality.

How much grant money can you get? $47,500 per year up to three years for established businesses or five years for emerging groups. Some applicants may receive small grants of $10,000 for community initiatives.

Who’s eligible: 501(c)(3) organizations based in New York City and using grassroots advocacy and community organization to remedy the root causes of oppression.

Deadline to apply: July 1. NYF gives grants in two cycles each year, so check back next year if you can’t make this deadline.

3. Global NY State Trade Expansion Program (STEP)

What it is: Grant money given to small businesses entering the export market.

How much grant money can you get? $10,000

Who’s eligible: Businesses headquartered or registered in New York who have been in operation for at least one year and have rights to export a product (check the eligibility criteria for more details).

Deadline to apply: No deadline, but apply as soon as you can, as funding is given out on a first-come, first-served basis. Grant money for 2023 is currently closed, but the program might renew its cycle later this year.

4. Tourism Return-to-Work Program

What it is: Program that incentivizes New York businesses in the tourism industry to hire more workers.

How much grant money can you get? A $5,000 grant is awarded for each new full-time job added between January and June 2022, and a $2,500 award is given for each part-time job added during the same period.

Who’s eligible: Businesses in the tourism industry, such as hotels, tour operators, arts, and entertainment, among others.

Deadline to apply: June 30, 2023.

5. New York State Seeding Funding Grant Program

What it is: Program designed to help small businesses in the early stages of growth.

How much grant money can you get? Grants are between $5,000 and $25,000 per business, and the money you get depends on your business’ annual revenue.

Who’s eligible: Small businesses in New York that bring in between $5,000 and $1 million in annual revenue. Your business must have started on or after Sept. 1, 2018 and has been in operation for at least six months.

Deadline to apply: The deadline for 2023 has closed, but check back for more updates on future application cycles.

Where else can New York small businesses find grant money?

In addition to grants offered by the State of New York, the federal government also awards numerous small business grants every year. You can check Grants.gov for over 1,000 grant programs or the U.S. Small Business Administration (SBA) for fewer grants, but still significant opportunities. And don’t forget to check the New York grants mentioned above frequently. Many grant programs have annual cycles, which will renew in 2024. Even if you didn’t get one in 2023, you might still have a chance next year.

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This Is How Much Money You Need to Make to Afford a $500,000 Home

By Money Management No Comments

Do you make enough to afford a $500,000 home in today’s high-interest environment? Read on to find out. 

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Buying a house is one of the most consequential decisions of our lives. It is a huge investment that can provide you with a sense of security and a place to call home. However, it can also be a stressful and overwhelming experience. The average sales price of a home has increased by almost 40% since the start of the COVID-19 pandemic, hitting a record high of $552,600 in Q4 2022, before dropping to $516,500 in Q1 2023.

With home prices so high, you may be wondering what salary you’d need to earn to afford a home costing $500,000. This question can be difficult to answer, but with a few simple calculations, you can get an estimate of how much you need to make to purchase a home at this price point.

28/36 ratio rule

The 28/36 mortgage rule is a helpful guide to calculate how much you need to make. This rule suggests that borrowers should devote no more than 28% of their monthly gross income to housing expenses. This is known as the front-end ratio.

The rule also holds that no more than 36% of your total monthly income goes to all debt obligations. This is the back-end ratio. Following this rule could help homeowners avoid stretching their budgets too thin and potentially falling behind on payments.

This rule is often used by lenders in determining how much they will lend you.

How much do I need to make for a $500K house?

Based on the 28/36 rule, you would need a salary of around $170,228 per year or $14,186 per month to comfortably afford a $500,000 home. Here’s how the calculations work:

Home purchase price: $500,000Down payment: $30,000 (assuming 6% of the purchase price, the average amount for first-time buyers, per 2022 data from the National Association of Realtors)Loan term: 30 year fixed-rate mortgageLoan interest rate: 6.39% (the average rate as of May 18, 2023)Monthly mortgage payment: $3,227Average monthly homeowners insurance premium: $149Average monthly property tax: $471Average monthly HOA fees: $125Total monthly housing expenses: $3,972$3,972 / 28% = $14,186 monthly income required

A common mistake that people often make is only calculating the mortgage payment and not including all the true costs of homeownership, such as property tax, homeowners insurance, and potentially HOA fees. To be safe, you may want to add in a buffer for maintenance costs.

But even if you are making this amount, the other half of the rule requires you to take into account your other debt. This could be credit card debt, car loans, or other personal loans. Let’s say this amounts to $700 a month. We add that to the total housing expenses to calculate your back-end ratio:

$3,972 + $700 = $4,672$4,672 / 36% = $12,977

So in other words, you will need to make at least $13,000 a month to afford a $500,000 home and the $700 debt payment for a mortgage lender to feel comfortable lending you the money.

How much can I afford now?

If you currently make $5,000 a month, using the 28/36 rule this is how much you can afford.

$5,000 x 28% = $1,400 total housing costs

$5,000 x 36% = $1,800 total debt payments (housing costs + other debt)

However, keep in mind that other factors like interest rates and down payments could also affect a home’s affordability. It is always better to be more conservative. By working with a trusted lender and calculating your budget carefully, you can increase your chances of success as you embark on your home-buying journey.

Buying a $500,000 home is a large investment that requires careful consideration and planning. If you use the 28/36 ratio rules, you can estimate how much money you need to make to afford a home at this price point. Remember, owning a home is not just about the initial purchase price, but also the ongoing expenses associated with homeownership. By doing your research, being diligent with your budget, and working towards your financial goals, you can make owning a home a reality.

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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.
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Here’s What Happens if You Spend Too Much on Your House

By Money Management No Comments

Spending too much on a house can have a devastating impact on your finances over the long term. Read on to learn what can happen if you make this mistake. 

Image source: Getty Images

When you buy a house, you must be careful not to spend too much. Ideally, you do not want to end up with a mortgage bill and other housing costs that exceed 25% of your monthly income.

If you stretch your budget and spend too much on purchasing a home, you could face some serious consequences. Here’s what could happen if you’ve overspent on purchasing your property.

You risk foreclosure

The biggest risk you face when you overspend is that you will get foreclosed on. If you are unable to make your mortgage payments, your lender will take your house and sell it. You will experience serious damage to your credit if this happens to you.

And depending on how much the mortgage lender gets for the sale, you may lose any money you put in as the lender will cover its own costs and fees first with the sale proceeds before you get a dime. You’ll likely have lots of late fees to pay and homes sold in foreclosure often sell for less, so chances are good you won’t get much money — if any — after the forced sale of your home.

You’ll have to compromise on other financial goals

Even if you are able to avoid defaulting on your loan, there are other major consequences of spending too much on your house. Namely, you’ll have too little money left for everything else.

If you sink a huge portion of your monthly income into your mortgage and other housing costs, you will have to live on what’s left. This may not leave you enough to cover necessities without going into debt. Or, if you can cover the bills and other essentials, you may not have any money left over to save for retirement or for big purchases like vacations or vehicles.

Remember, every dollar you commit to your mortgage is money that your future self can’t spend on other things. And you’ll have to stick to your commitment for decades — often 15 or 30 years, depending on how long your home loan is (unless you sell and end up paying the costs that go along with doing so).

You may be trapped in your job

If you are stretching to pay your mortgage, you may not be able to afford any reduction in your income. This could mean you can’t look for a new job or change careers if you want to, if doing so would cause a pay cut. If you or your spouse decide you’d rather stay home with your kids, this option may also be off the table once you are committed to covering a high mortgage payment.

You will face ongoing financial stress

Finally, another major consequence of spending too much on a house is you will likely be in a constant state of financial stress. Even when you aren’t necessarily consciously thinking about it, you may have a nagging worry in the back of your mind that you can’t afford to spend what you want due to your high housing payment.

You don’t want to spend your life just working to pay down your mortgage without doing anything else that matters. So, be conservative when you make your home purchase. You won’t regret it.

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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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Sold Your Home? Don’t Forget to Check These Tasks Off Your To-Do List

By Money Management No Comments

If you’ve sold your home, here’s how to ensure you cut ties with your old address. 

Image source: Getty Images

If you are selling a home, there’s a lot of tasks you’re going to have to take care of.

Obviously, you will need to arrange for a move, which can be an expensive proposition that causes your checking account to take a hit. You’ll also have to pay off your mortgage loan and, of course, find a new place to live so you and your family are ready for the big day when your home closes.

Among all the big tasks you have to take care of, it’s easy to forget some little ones — but doing so could come back to bite you. To make sure you don’t find yourself in this situation, be sure to put these items on your to-do list.

Transferring your utilities

You’ll need to make sure you shut off your utilities at your current home so you don’t get stuck paying for the water, sewer, electric, internet, and cable for the new owners. If you know where you’ll be moving too, you’ll also want to arrange for your utilities to be turned on at your new place on the day you move in.

The last thing you want to deal with after a long move is not being able to get on the internet — or turn on a light because your electricity isn’t on yet.

Canceling your home insurance

You’ll also want to make sure you cancel your homeowners insurance on the property you are selling. You obviously don’t need to insure a structure that is no longer yours. You should be able to get a refund for the portion of the year that you won’t own the home for if you prepaid for your coverage for the entire year rather than paying monthly premiums.

Forwarding mail

Forwarding your mail is another important but often overlooked task when you move. The United States Postal Service allows you to file an official Change of Address form on its website that you can use to update your new information.

You can enter a date for when your mail should begin forwarding, which can’t be more than 30 days prior to the current date or more than three months after the current date. Once you submit your request, you will start getting mail at your address the later of seven to 10 postal business days after the effective date of your move or seven to 10 postal business days after the date you filed the request. So don’t leave this until the last minute.

Updating your address

To go along with the previous task, you’ll also want to be sure you update your address with as many accounts and service providers as possible. Updating your address ensures nothing will fall through the cracks when mail is sent. You definitely don’t want to miss a bill because it ends up getting lost in the mail.

Get a new driver’s license

FInally, you will need to get a new driver’s license with your new address on it so you have identification with your current info. In most states, you have a limited period of time to notify the DMV when you move and update your address. For example, in Virginia, you have 30 days from the time of your move. You can often complete this process online.

By taking these steps, you can make sure your move goes smoothly and you aren’t left with unnecessary bills — or without important mail.

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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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