Money Management

Thinking of joining Sam’s Club? Read on to see how a membership might benefit you beyond your standard in-store purchases. 

Many people join Sam’s Club because they’re eager to save money on things like groceries and household essentials. At a time when inflation is forcing so many households to rack up sky-high credit card bills just to do things like put food on the table and maintain a home, the ability to spend less money on groceries and related items is huge.

But the benefits of joining Sam’s Club extend far beyond groceries and household supplies. Here are some perks you may not realize come with your Sam’s Club membership.

1. Deals on hotels and rental cars

It’s not just bulk grocery and household items you can score at Sam’s Club on the cheap. You can also snag great deals on travel. Sam’s Club says its services could allow you to save up to 60% on hotels around the world. And you can also save up to 25% on rental cars. At a time when travel has become so expensive, these discounts could spell the difference between being able to take a vacation or having to stay home.

2. Discounted movie tickets

Going to the movies is hardly an inexpensive endeavor these days, especially if you’re taking the entire family. Sam’s Club gives members access to move tickets at up to 40% off. You can find deals at theaters that include AMC, Regal, and Cinemark.

3. Cheaper Disney World tickets

Going to Disney World is a dream for many children and adults alike. But the cost of a Disney vacation can be prohibitive, and in some cases, all the credit card reward points in the world may not do much to ease the financial blow. With a Sam’s Club membership, you can save up to $100 off of Disney World tickets. And you can also save money on certain Disney add-ons — for example, Mickey’s Not-So-Scary Halloween Party, which runs during the fall months.

4. Lower-cost Broadway tickets

If you’re a theater fan, your goal might be to see as many Broadway shows as you can afford to attend. But with tickets often costing over $100 apiece, you might have to limit that habit. The good news, though, is that Sam’s Club members can get access to discounted tickets for a number of popular shows. You might save up to 40%, in fact.

5. Affordable business services

When you own a small business, it’s important to save as much money as possible, especially when you’re first starting out and haven’t really begun to turn a profit. Sam’s Club can help you do that. Your membership could give you access to a number of key business solutions, like point-of-sale products such as credit card readers. Sam’s Club also offers check-printing services, should your business have that need.

A standard Sam’s Club membership costs $50 a year, while an upgraded plus membership costs $110. But no matter which tier you opt for, you may find that a Sam’s Club membership is well worth the money — especially if you end up using any of the above perks to your advantage.

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An HSA allows you to use pre-tax money to cover medical costs. Take a look at what happens to your employer-sponsored HSA if you change jobs. 

You’re in luck if your employer offers a Health Savings Account (HSA). Here, we’ll explain how an HSA works and, more importantly, what happens to that money when you change jobs.

What is an HSA?

As the name suggests, an HSA is a type of savings account set up expressly to cover certain healthcare costs. Pre-tax money is taken out of your paycheck each month, meaning it’s withdrawn before you pay taxes on your income. Although your take-home pay will be slightly less for each contribution, having money in an HSA means not having to dig into your personal bank account to cover every medical cost you encounter.

HSAs are available to those covered by certain high-deductible health plans (HDHPs). You know you have an HDHP when the monthly premium is low, but the deductible and total out-of-pocket amount you’re responsible for is higher than average.

There’s a limit on how much you can contribute to an HSA. In 2023, that total is $3,850 if you cover only yourself. If you’re covering a family, the total is $7,750 per year. And remember, the amount you contribute to an HSA is withdrawn from your income before income taxes are paid, meaning you save on taxes.

What about when you change jobs?

All in all, HSAs are a pretty sweet deal for anyone with an HDHP as they help fight the high cost of medical care. Still, it’s worrying to wonder what will happen to that money if you’re laid off or accept a job with another company. Fortunately, like with a 401(k), you have options. They include the following.

Transfer

If your new employer also offers an HSA, you can transfer the administration of your account to the new employer. If you decide to go this route, the new company will provide you with a form authorizing the new HSA administrator to take over the account. There are no IRS fees or penalties imposed if you choose this option.

Rollover

Much like when rolling over a 401(k), you have the option of receiving a check for your HSA funds. When that check arrives, you have 60 days to move the money into a new HSA account. You don’t want to miss that window because once you exceed the 60-day mark, the funds are seen as a distribution, and you’ll be taxed and hit with a whopping 20% penalty.

Leave everything the same

If you decide to leave your HSA with your old employer’s HSA administrator, that’s okay. You can continue to withdraw funds for eligible expenses as you have been. However, unless your new employer also has a high deductible plan, you can no longer contribute to the HSA.

Bottom line

Once you’ve contributed money to an HSA, that money is yours. Your company can’t keep any portion of it. And because it’s solely yours, you’re the one who gets to decide what happens to it next.

If you regularly contribute to an HSA but rarely (if ever) use it, don’t forget it’s there when you leave. It’s like having a special pocket of cash in your emergency savings account.

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Between the pandemic and hate crimes against Asian Americans and Pacific Islanders, home buying briefly took a back seat. Learn about the barrier some still face. 

When it comes to social issues, progress tends to be slow, and not at all steady. Just when we think we’re getting ahead, situations pop up that drag us back to the 1950s. In regard to life in America for Asian Americans and Pacific Islanders (AAPI), there’s both positive and somewhat discouraging news.

Pandemic-related concerns

The first six months of the COVID-19 pandemic were rough for Asian Americans hoping to buy a home. It was during that time that hate crimes against Asian Americans increased by nearly 150%. Households who’d spent years saving up for a down payment had to decide if it was safe to leave their support systems. As other home buyers moved to more affordable cities and suburbs, members of the AAPI community faced the choice of leaving their current homes and potentially becoming isolated from the larger Asian-American community.

Many opted to hold off, and AAPI housing activity dropped 8.1% lower than pre-pandemic levels, and 9.5% lower than that of their non-Asian peers.

While there’s no way to say for certain how large a role the increase in hate crimes played, those early months of the pandemic saw fewer Asian Americans buying homes.

The tide slowly turns

Between the fourth quarter of 2020 and the fourth quarter of 2021, homeownership among AAPI households began to climb, increasing from 59.5% to 61.2%. Despite a raging pandemic, greater numbers of AAPI households were heading out to secure mortgages and house hunt.

A homeownership rate of just over 61% may not seem like much, but it represents an all-time high for the AAPI community.

Although a steady drumbeat reminds us that every American should own a home, homeownership is not the right move for everyone. In fact, renting is a better financial move for some people.

Still, there’s an argument to be made for using homeownership as a stepping stone to generational wealth. According to the San Diego Foundation, owning a home opens the door to investing. It helps improve the homeowner’s credit and ultimately, their buying power. A home represents a valuable asset that can be passed down through generations.

Although there has been an increase in the number of AAPI families who own homes, there are still barriers that must be overcome.

AAPI women face unique challenges

For AAPI women, the quest to purchase a home of their own is even more difficult. The National Women’s Law Center (NWLC) compared the median earnings of all AAPI and Native Hawaiian women who worked full time, year-round in 2021 to the median earnings of all white, non-Hispanic men who worked, regardless of how many hours they were on the job. They found that AAPI and Native Hawaiian women were typically paid only $0.80 for every dollar paid to white, non-Hispanic men.

Among some women, the news was worse. For example, Indian women earn just $0.60 for every dollar paid to Indian men, and Taiwanese women make just $0.63 for every dollar paid to Taiwanese men. In other words, they’re not just lagging behind white male workers.

One of the devastating consequences of the wage gap is the inability these women have to save up enough for a down payment. Data indicates that 62.2% of single AAPI and Native Hawaiian women own a home, compared to 67.7% of single white, non-Hispanic men. While a difference of 5.5% may not seem like much, the percentages represent millions of American women who can’t quite harness the economic advantages that come with homeownership.

Male or female, the struggle for members of non-white communities to buy into the American dream continues to be an uphill battle.

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I bonds are usually a safe investment. Read on to see why that may not be the case after June 1. 

The U.S. has a crisis on its hands. If lawmakers don’t agree to lift the debt ceiling, the country will be unable to fulfill its financial obligations, which include paying interest to holders of Treasury bonds and other government-backed securities. And Treasury Secretary Janet Yellen has confirmed that the nation risks defaulting on June 1 in the absence of a debt ceiling hike.

Now seeing as how the U.S. has never defaulted on its debt before, some people aren’t so concerned about the current crisis and expect that the debt limit will indeed get lifted. But financial guru Suze Orman warns that you may not want to purchase I bonds after June 1 for one big reason.

You don’t want to end up with a bum investment

When you buy stocks and other assets in your brokerage account, there’s no guarantee that they won’t lose value. But bonds that are issued by the U.S. Treasury are a different story, since they’re backed by the full faith and credit of the country itself.

Meanwhile, I bonds have, for the past year or so, been touted as a solid investment because they’re not only backed by the Treasury, but pegged to inflation. And since inflation levels are so high these days, I bond interest rates are high.

In fact, I bonds issued between now and Oct. 31 will have a 4.3% interest rate attached to them. That rate then has the potential to change in November, depending on what inflation levels look like at the time.

The reason Orman is cautioning people to hold off on buying I bonds is that she’s worried that if the U.S. does default on its debt but continues to issue I bonds anyway, the Supreme Court will come in and dictate that the issuance of those bonds was unconstitutional. And as such, she worries that bonds purchased under those circumstances will be considered invalid or worthless. She’s also not convinced that bondholders will be able to get their money back. So unless the debt crisis is resolved prior to June 1, it may not be the best idea to buy I bonds after that point.

Other options to look at

The reality is that while I bonds are paying fairly generously right now, if you find the idea of purchasing government securities too risky, you could put your money into a certificate of deposit instead. Many CDs are offering a rate that’s comparable to what I bonds are paying through late October, and you don’t have to commit to more than a one-year term to get it.

Of course, if you want to keep your money liquid given the uncertainty that abounds, you might opt to just keep more cash in a regular savings account. Some high-yield savings accounts are paying close to or upward of 4% right now. And while those rates could change on a whim because they’re not locked in, neither is your money.

All told, having the U.S. default on its debt would be downright catastrophic, so ideally, that scenario won’t come to pass. But if you’ve been thinking about buying I bonds, you may want to sit tight a bit longer and wait to see how things play out. The interest rate on these bonds isn’t changing for months, so you can afford to hold off and see what happens.

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Looking to grow your savings in 2023? Read on to see how much the typical consumer is aiming to save. 

These days, a lot of people are raising their savings accounts rather than growing them. We can thank inflation for that.

In March, the Consumer Price Index, which measures changes in the cost of consumer goods and services, was up 5% on an annual basis. But several key expense categories reported even higher levels of annual inflation.

Grocery costs, for example, were up 8.4% from the previous year. And electricity costs were up 10.2%.

But despite the fact that U.S. consumers are being forced to spend more money across a range of essential categories, a recent New York Life survey reveals that many Americans are hoping to grow their savings in 2023. And the average amount people expect to save in the course of the year is $9,173.68.

On the one hand, that’s a pretty lofty goal. But hey, it’s good to have goals, right?

Now you might think you’re all set as far as your savings go. But there’s really one big question you need to ask yourself to see whether your savings need a boost — and how much of a boost to give them.

Can you cover three months of bills with money in your savings account?

Although the U.S. economy seems fairly strong these days, financial experts are still warning of a near-term recession. And that could lead to job loss for a lot of people.

That’s something you’ll want to prepare for. And a good way to do so is to make sure you have a solid emergency fund — one that can, at a minimum, cover three full months of living expenses. If you don’t have that much cash in your bank account, then you should aim to save more money this year.

That doesn’t necessarily mean you have to push yourself to save around $9,200, though. And a savings target that high may not even be feasible based on your income.

Rather, a good bet is to take a look at your essential monthly expenses — things like your mortgage payments, auto loan bills, food costs, and utilities. See how much you spend monthly on average and multiply that by three. That’s your minimum emergency savings goal. If you’re not there yet, try to save enough this year to get there.

So as an example, if you spend $2,800 a month on essential expenses, you’ll want at least $8,400 in your emergency fund. So if you only have $4,400 right now, it means you should set a goal to save $4,000 this year.

The more savings you have, the better

You may not need $9,173.68 — or something in that vicinity — to complete your emergency fund. But the more money you’re able to sock away in savings, the more protection you buy yourself. So it certainly wouldn’t hurt to think big this year in the context of savings.

That said, the one thing you don’t want to do is set an unrealistic savings target. You may not have much wiggle room to save due to inflation. And you don’t want to get discouraged to the point where you decide to give up on saving money altogether. You’re better off aiming for a number that’s attainable for you — even if it’s a lot lower than what the average American is hoping to save in 2023.

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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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Worried about owing the IRS money? Read on to see how a new tool might help. 

For the week ending May 5, the average tax refund issued by the IRS was $2,803. That’s a 7.3% decline from the average tax refund of $3,025 a year prior.

It’s not all that surprising that tax refunds are down this year. Many of the pandemic-era benefits that boosted tax refunds last year expired at the end of 2021, so they were no longer applicable for 2022 tax returns.

Not only did many tax-filers see a smaller refund hit their checking accounts this year, but some filers wound up owing the IRS money unexpectedly. And that’s not ideal.

Many people aren’t exactly flush with savings these days given the blow inflation has dealt them. So owing money unexpectedly to the IRS could constitute a major financial burden.

Thankfully, the IRS is taking steps to help filers avoid unpleasant tax surprises in the future. And it pays to take advantage of a new tool designed to do just that.

Are you having enough tax withheld from your earnings?

A big reason some people end up owing the IRS money when they file a tax return is that they’re not withholding enough tax month after month. When you work for an employer, you fill out a W-4 form that asks you questions like whether you want to claim dependents or not for withholding purposes. Depending on the information you put down, your employer will withhold more or less tax from each paycheck you get.

But one thing your employer generally won’t tell you is whether you’re having the right amount of tax withheld. So now, the IRS can help out in that regard.

When you use its new tool, you’ll be asked things like what your tax-filing status is, how many income sources you have, and what your income looks like. From there, you’ll need to indicate how much tax you’re paying per pay period. The IRS will use this information to see if you’re likely to have a balance due when you file your next tax return or not.

If you’re not having enough tax withheld, you can make adjustments to your W-4 to increase your withholding. As an example, you might choose not to claim dependents on that form, even if you do indeed have children.

A positive development

The IRS’s new tool won’t necessarily work for everyone. The agency even cautions that people with a very complicated tax situation may not benefit as much from the tool. And if you’re self-employed with a variable income, there’s probably not much to be gained by using it, either. (Though ideally, in that situation, you have an accountant you’re working with who can help you avoid a major underpayment.)

But if you owed the IRS money this year for the first time, and that came as a shock to you, then you may be eager to avoid a repeat when you file your taxes in 2024. And so it pays to use the new IRS tool and see what information it ends up giving you.

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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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