Money Management

Costco membership may seem worth it, but that’s not necessarily the case for everyone. Watch for these four signs that membership isn’t worth your money. 

Costco is a popular warehouse club, and many people opt to pay the membership fee out of their bank account to join. But, if you’re a Costco member, it’s worth taking the time to think about whether this is paying off for you or if you should cancel your membership.

Not sure how to decide? Watch for these four signs that suggest you should cancel your membership.

1. You aren’t shopping there enough to make your membership fees worth it

The cheapest Costco membership costs $60. If you only go to the store once or twice a year, you are likely not getting your $60 worth.

There’s no hard-and-fast rule for exactly how often you need to go to Costco for your membership to pay off. If you just go once per year but you buy a ton of bulk meat to put in your freezer that saves you $100 off your grocery store’s prices, then the membership may be worth it for that alone.

But, in general, if you don’t think you are getting at least $60 of savings because you buy things infrequently or rarely visit the store, then why pay a membership fee that isn’t paying off?

2. You’re splurging every time you visit

Costco has tons of tempting products, from fun snacks like Butter Toffee Cashews to a bakery full of scrumptious treats. The problem is, these items can prompt you to break out your credit cards and buy items that are not on your list.

If you are adding even a few extra items to your Costco cart that you don’t need, and that you wouldn’t buy if you just went to the grocery store instead, then giving up your Costco membership may be your best bet.

3. You’re already a member of other warehouse clubs

Costco, BJ’s, and Sam’s Club offer similar opportunities to save on gas, groceries, and household items. There’s very little reason to be a member of multiple warehouse clubs.

Instead of maintaining memberships at multiple places, consider which is closer and more convenient to your house or which offers more products that you regularly buy. Then, commit to keeping that membership and dropping the others.

You could also opt to pool your resources with others in your network. For example, maybe you’ll decide to keep your Sam’s Club membership and cancel Costco while your neighbor or coworker will do the reverse. You can pick up Sam’s stuff for them and they can pick up Costco stuff for you and you can both save money.

4. You’re throwing out a lot of stuff because bulk buying doesn’t work for you

Costco saves you money because you buy in bulk. But, buying in bulk doesn’t make sense for everyone. That’s especially true if you have a small family and don’t consume a ton of products. If you end up tossing stuff out that you bought from Costco because it expires before you can use it, canceling your membership is the right move.

Say, for example, you opted to spend $12.99 for a five pack of Colgate toothpaste from Costco because the toothpaste comes in at around $2.59 a tube that way — rather than about $6.29 at CVS.

Seems like a good deal, right? But if you can only use two tubes before they go bad because you’re not brushing your teeth 12 times a day, you’ve actually spent a little more than the CVS price — and you wasted those other three tubes.

If you spot any of these four signs, you may want to say goodbye to your Costco membership and use your $60 (or more) you were spending on something else instead.

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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.Christy Bieber 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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As you continue to grow your emergency fund, you may wonder if you’re saving too much money. Here’s how to tell. 

Building an emergency fund is an excellent way to prepare yourself financially for the unexpected. You never know when a significant life change will occur that limits your ability to bring in an income. A solid emergency fund can ensure you can afford to continue to pay your bills. But how much is enough, and is there such a thing as saving too much?

Prepare for the unexpected with an emergency fund

It would be great never to experience a difficult financial situation during your lifetime. But it can happen to anyone at any time. An emergency fund can make a big difference and save you stress while navigating a life change that impacts your wallet.

How much you should save in your emergency fund depends on your lifestyle and expenses.

Many experts recommend saving enough money to cover three to six months of expenses. Consider which of your monthly bills are necessary and calculate how much you need to stay afloat. You can use this emergency fund calculator to determine an emergency savings goal.

Is $25,000 too much money to save?

Is $25,000 too big of an emergency fund? It could be too hefty of an emergency fund for some. But for others, it may not be enough money. Someone with minimal expenses will need to save less, while someone with more costly expenses should save more to prepare.

Let’s imagine you need $2,000 a month to cover your living expenses. With this number in mind, $25,000 would be more than enough to cover an entire year of expenses. If you prefer a year of savings, you can keep all that money in your emergency fund. If you feel comfortable having only six months of savings, you may want to shift some of that money elsewhere to reach other personal finance goals.

If your monthly living expenses total $5,000, and you have $25,000 saved in your emergency fund, you’ll have enough money to cover your expenses for five months. Is that enough? You might consider setting aside an additional $5,000, so you have enough money saved to cover six months of bills. As you can see, there is no set number that’s ideal for every situation.

Don’t neglect the need to save for emergencies

Only you can decide how much money to save to feel comfortable. Depending on your financial situation, growing your fund can take a while. Saving even a small amount of money each month can help you reach your emergency fund goal sooner. Remember that any money saved is progress, even if it takes you time to save up enough extra cash.

For those who easily forget to put aside money to save, automating your savings is one strategy that may help you stay on track. Having money automatically transferred from your checking account to your savings account can save you time and make your life easier. You can easily set up automatic transfers through your bank’s mobile bank app or website.

Want to boost your emergency fund balance without doing extra work? Keep your spare cash in a bank account that earns interest. A high-yield savings account is an excellent tool that can help your money grow. Check out our list of the best high-yield savings accounts to learn more.

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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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Eager to slash your supermarket spending? Read on to see how. 

In February, the cost of food at home — meaning groceries — was up 10.2% from a year prior, according to that month’s Consumer Price Index. In March, food at home costs were only up 8.4% on an annual basis.

The fact that grocery prices are dropping is a very good thing. Food is an essential expense, so it’s something that’s hard to cut back on. And for months on end, consumers found themselves racking up sky-high credit card bills just to feed their families.

While we’re not out of the woods with regard to elevated food prices, at least now, there’s some relief to be had. But that doesn’t mean you can’t do anything to lower your grocery bills even more. Here’s how.

1. Buy the right items in bulk

Buying groceries in bulk is a good way to lower your costs. And you don’t need to be a member of Sam’s Club or Costco to take advantage of bulk-buying opportunities. Chances are, your local supermarket has different items available in bulk quantities, too. And you’ll commonly find bulk snack items and non-perishables on Amazon.

But if you’re going to buy food in bulk, prepare to follow some ground rules. First, only buy items you’re familiar with and use regularly. It’s okay to take a chance on a five-ounce bag of spiced cashews with a $4 price tag, but you don’t want to buy a bulk bag for $19 if you’re not sure you’ll enjoy the taste.

Also, pay attention to expiration dates and make sure you have the storage space for whatever it is you’re buying. It could make sense to purchase a massive tub of cottage cheese if your kids eat it daily and you’re confident you’ll finish it before it goes bad. But if your fridge is already filled to capacity, you’ll need to be careful.

2. Look to discount grocers

Some people steer clear of discount grocers like Aldi because they’re known to carry off-brands, as opposed to well-known ones. Now, if you have a household of picky eaters, you may want to stick to the brands and items you know. But otherwise, shopping at discount grocers could save you a lot of money on food, because you’re not paying extra for fancy labels and marketing costs.

3. Actually read the circular

How often do you immediately throw out the weekly supermarket circular that comes to the door? Rather than toss it right away, carve out a few minutes to actually read through it. You may discover a host of bargains at your local grocery store you wouldn’t have known about otherwise.

Let’s say you normally buy yogurts for your kids at $1.50 a pop. If those yogurts are on sale for $1 this week and you have the fridge space, buying 10 means saving yourself $5, just like that.

Now that food is getting a little less expensive to buy, ideally, more consumers will be able to better stretch their budgets and stop raiding their savings accounts just to feed their families. But it’s worth taking these steps to try to lower your food-related spending even more.

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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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These tips won’t take too much of your time. Read on to learn how they can make a big difference to your finances. 

Roughly three in five Americans report being stressed about their finances, according to a recent Clever survey. This isn’t surprising given the high inflation we’ve all been dealing with over the last year. Many of us are finding it more difficult to afford our bills, especially those of us who are carrying debt.

Ultimately, everyone has to find their own way to manage this. But here are a few moves you may want to consider if you haven’t done them already.

1. Switch to online bank accounts

Making the switch from a brick-and-mortar bank account to an online bank account could help you in two ways. First, it could help you ditch common bank fees, like monthly maintenance fees. Many online banks don’t have them, but they’re still fairly common with traditional banks. If you find yourself frequently running into these, switching banks could help you take one bill off your plate.

Second, online bank accounts typically offer much higher interest rates, especially on savings accounts. Right now, the top savings accounts are offering annual percentage yields (APYs) close to 4.00%. That could potentially earn you tens or even hundreds of dollars annually, depending on your balance.

But online banks may not be the best fit for everyone. If you aren’t especially tech-savvy, you may not enjoy managing your money from a computer or mobile app. And if you frequently need to deposit cash, you may prefer to hold onto a brick-and-mortar checking account, as it’s often more difficult to make these deposits with online banks.

2. Create a budget

Budgeting is often a joyless activity, but it can go a long way toward increasing your awareness of where your money goes. It can also help you prioritize your financial goals and identify areas of overspending, allowing you to cut back and free up extra cash.

In the past, budgeting used to mean pen, paper, and a lot of math. Then we graduated to spreadsheets. But nowadays, there are a bunch of budgeting apps that can take care of most of the hard work for you. All you have to do is enter your purchases, and the apps will keep track of how much you’ve spent in various categories. You can also see your spending from previous months at a glance.

Explore a few options and see which works best for you, if you don’t already have a budget. Don’t be afraid to adjust your spending limits in various categories over the first few months. It can take some time to figure out a plan you can stick to.

3. Try to negotiate some of your bills

Many people don’t realize it, but it’s sometimes possible to reduce what you owe just by negotiating your bills with creditors and service providers. This works better with some things than others. Many successfully negotiate their TV or cellphone bills, and some may even be able to secure a lower interest rate on their credit card debts if they’ve been a longtime customer. Hospitals and utility companies may also have financial assistance services.

Other types of creditors may be less willing to negotiate, especially if you agreed to pay a specific rate in the past. But it never hurts to ask. If you’re struggling with your payments, reach out to explain your situation and see if there’s an alternate payment option available to you.

Always remember to be kind. Your lender or service provider isn’t obligated to pull any strings for you just because you ask, and they’ll probably be more willing to help if you’re polite. You can highlight your loyalty to the company if you’ve worked with them for many years. And if you’ve historically made your payments on time, that’s another point in your favor.

The steps above may not take away all your financial stress, but they could get you moving in the right direction. See if you can brainstorm any additional moves to either bring more money in each month or reduce how much you have going out. That way, you can bring your finances into a more comfortable balance.

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Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you 12x the national average savings account rate. Click here to uncover the best-in-class picks that landed a spot on our shortlist of the best savings accounts for 2023.

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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