Money Management

Joining Costco comes with benefits beyond just access to bulk items. 

If a Costco membership were free, more people would probably get one. But there is a cost involved.

A basic membership at Costco costs $60 a year, while an executive membership costs $120. The latter option, however, will give you access to 2% back on your purchases, the same way your credit card might give you cash back on the various items you buy.

Now, you may find that shopping at Costco results in a lot of savings once you start buying groceries and household supplies in bulk on a regular basis. But there are benefits to be reaped from a Costco membership that extend beyond low-cost in-store goods. Here are a few you should know about.

1. Affordable gas

Driving a car isn’t exactly an inexpensive prospect. You need to maintain your vehicle, insure it, and fuel it. But Costco can help with the latter. As a member, you’ll get access to the warehouse club’s gas stations, which commonly have lower gas prices than regular gas stations.

CNN reports that Costco gas is typically $0.20 a gallon below the market average. That could amount to a lot of savings if you fill up at Costco often.

2. Low-cost travel

No matter your destination, travel has the potential to be very expensive. The upside of joining Costco is that you’ll gain access to its travel services. That could be helpful in a number of ways.

First, Costco has access to different vacation packages you won’t find elsewhere that may be more affordable than what you’ll see on travel sites or through independent travel agents. And in addition to saving money on travel, you’ll get the support of a Costco travel specialist — someone who can help you do everything from book cruise excursions to navigate issues if your travel plans have to be changed.

3. The option to shop anywhere

When you join Costco, you gain access to a network of warehouse club stores all over the country. This means that if you’re traveling and want to load up on supplies for a week-long rental home several states away, you can just waltz on into the closest Costco and do your shopping there — or just visit the food court for a cheap meal. Seeing as how Costco operates 584 locations in the U.S. and Puerto Rico, that’s a nice network of stores to visit.

4. Extended warranties on electronics

When you buy electronics, you’re making an investment. And you want reassurance that the items you’re purchasing are going to last. Costco will commonly offer an extended warranty on electronics such as cell phones, laptops, and tablets. That gives you peace of mind when you’re parting with a larger sum of money.

The option to purchase essential food and household items on the cheap is reason enough to join Costco. But you should also know that if you get yourself a membership, you’ll be privy to perks like less expensive gas, affordable travel packages, extended warranties on costly purchases, and the option to do your bulk shopping just about anywhere.

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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.Maurie Backman 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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It’s important to keep your college fund in the right place. 

Paying for college is far from an inexpensive prospect these days. The average cost of college tuition and fees for the 2022-2023 academic year, according to U.S. News & World Report, is:

$10,423 for in-state public colleges$22,953 for out-of-state public colleges$39,723 for private colleges

When you multiply these figures by four years, and then add in the cost of room and board and incidentals, you get, well, some pretty scary numbers. And if you don’t want your kids to end up graduating from college with a heaping pile of debt, then you may want to do your best to save for their education.

But where should you put those college funds? You may be tempted to open a 529 plan or even save for college in a Roth IRA. Both are great options and offer nice tax breaks. But what about a regular brokerage account?

The upside of putting college savings into a brokerage account

Both 529 plans and Roth IRAs let you reap tax breaks in the course of saving for college. Both accounts give you tax-free investment growth and tax-free withdrawals.

But both plans have restrictions. With a 529 plan, if you take a withdrawal for non-educational purposes, you’re penalized 10% on the gains portion of your withdrawal. Plus, your withdrawal will be subject to taxes.

With a Roth IRA, you can take a penalty-free withdrawal at any time provided you’re only touching the principal portion of your account, not the gains portion. But Roth IRAs come with annual contribution limits you need to adhere to.

This year, for example, you can only put up to $6,500 into a Roth IRA if you’re under age 50, or up to $7,500 if you’re 50 or over. If you’re behind on college savings and need to catch up, those limits might be restrictive.

The good thing about a regular brokerage account is that you can invest any amount of money you want in a given year — there are no limits on how much money you can put into your account. And also, you can cash out your gains at any time, for any reason, without having to worry about penalties.

Now, you will have to pay taxes on capital gains in a brokerage account. But you also get the freedom to do what you want with your money. And if your kids decide not to go to college, or to go to a very inexpensive college, you won’t have to worry about what to do with all of the money you’ve saved.

The downside of putting college savings into a brokerage account

The only real downside to choosing a regular brokerage account for your college savings is forgoing any sort of tax break. But remember, neither a 529 plan nor a Roth IRA gives you a tax break on your contributions. You’re only getting a tax break on your investment gains and withdrawals.

Making your choice

So should you house your college savings in a regular brokerage account? Well, that depends.

One approach you may want to take is maxing out a Roth IRA or contributing a portion of your educational savings to a 529 plan, and then saving beyond that point in a brokerage account. Splitting your money up across multiple accounts might give you the best of all worlds — some tax benefits, and also, some of the flexibility you need to spend your money as you choose.

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Some travelers heading overseas to Taiwan may get some extra spending money. 

While traveling the world can be fun, it’s essential to consider the cost before booking a trip. Figuring out how much you can afford to spend and outlining a vacation budget is an excellent way to avoid overspending while exploring the world. Taiwan recently announced a new initiative to boost tourism. The country will pay some international tourists to visit. For those who receive these extra funds, it could be a great way to make their trip more affordable.

Taiwan wants to attract more international travelers

Taiwan is hoping to welcome more tourists this year. The government hopes to attract 6 million tourists in 2023 and is aiming for 10 million tourists by 2025. As reported by CNN, the country will pay some travelers who visit. Cash rewards will be offered to individuals after they arrive. Each tourist receiving money will get NT$5,000, or about $165.

However, not every international tourist will be paid. According to a Taipei Times article, tourism board bureau Director-General Chang Shi-chung said in a recent news conference, “The money will be given out through multiple tourism promotion events this year, rather than giving it all out at once.” He continued, “As such, not all international tourists would receive it.”

Tourists will be given an electronic ticket loaded with funds, which can be used to pay for food, accommodation, and other travel expenses while in Taiwan. These funds may go further than you think. Many non-luxury hotels in Taipei cost well under $100 per night. Other travel expenses like food, drinks, and activities are very affordable.

Should you book a trip to Taiwan?

While this is an excellent incentive, it’s important to remember that not all tourists will receive cash. It’s likely not worth it to book a trip to Taiwan just because of this cash incentive. However, if you’re already planning to visit or have been meaning to book a trip to Taiwan, it could be worthwhile. If you luck out and receive a cash payment after arrival, the free funds could help you stretch your vacation budget further.

Financial considerations to make before traveling abroad

International travel offers an incredible way for tourists to see more of the world and experience new cultures. But you want to plan well before you depart. Here are some financial considerations you may want to make to ensure the best trip experience:

Foreign transaction fees: If you plan to use a credit card in Taiwan, bring a card with no foreign transaction fees. If you use a credit card that charges foreign transaction fees, you can expect to pay a fee of around 3% every time you use your card to pay for an international purchase. Those additional fees can make your vacation more expensive. Many of the best travel credit cards don’t charge foreign transaction fees.Checked bag fees: Ensure your airline ticket includes a free checked bag. Otherwise, you may have to pay an additional fee for each checked bag you bring. Some airline credit cards include free checked bag benefits that can save you money.Emergency expenses: Unexpected costs can pop up — no matter where you travel. It’s a good idea to plan how to handle potential emergencies and unexpected incidents while abroad. You may consider purchasing travel insurance to protect your trip investment. It’s also a good idea to bring a credit card with a generous credit limit in case you need to pay for costly unexpected expenses with your credit card.

Look for ways to save on trip costs

Incentives like this could offer a great way to make your next trip less expensive. As you plan your next domestic or international trip, be alert for savings opportunities so you can keep more money in your checking account. For example, an airfare sale or hotel deal could help you stick to your vacation budget. Travel doesn’t have to be expensive!

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Don’t get too excited before you read the fine print. 

One of the benefits of using a credit card in the course of your shopping is getting to earn cash back on your purchases. You might, for example, be eligible for 2% cash back on gas or groceries, so for every $100 you spend, you get $2 to use as you please.

If you shop at Kohl’s a lot, you can enjoy a similar arrangement. That’s because the department store chain commonly offers shoppers the ability to accumulate Kohl’s Cash.

The way it works is simple: You make purchases and generally get $10 in Kohl’s Cash for every $50 you spend (though you might receive more during certain promotional windows). To be clear, you can’t always rack up Kohl’s Cash — you have to shop during a time when it’s being offered. But that commonly happens several times a year.

If you do your Kohl’s shopping in person, you’ll get a physical Kohl’s Cash coupon when you check out. If you order from Kohl’s online, you’ll get a Kohl’s Cash coupon with a code in your email. You can then redeem your Kohl’s Cash during a limited window either at a store or online.

At first, the idea of getting Kohl’s Cash might really excite you. But it may not end up doing you much good.

The downside of Kohl’s Cash

Last year, I managed to snag $10 in Kohl’s Cash for making purchases during a promotional window. And I remember having a couple of weeks to use up that store cash.

The problem, though, was that I didn’t have time to head to the store to pick out a free item in the $10 range. And using my cash online wasn’t worth it, either.

Kohl’s commonly offers free shipping when you spend $49. My problem was that I didn’t want to spend $49 because I didn’t really need anything from Kohl’s, and I didn’t want to rack up a credit card charge just to spend my free money.

But when I tried adding a $15 item to my online cart, I got hit with a $9 shipping charge. So I didn’t complete the order and instead let my Kohl’s Cash expire.

That’s a problem you might run into as well. If you don’t have a lot of Kohl’s Cash to spend, then it may not be worth it for you to make a trip to the store (and spend the money on gas) for a free $10. But if you have to practically pay $10 in shipping for an online order, then you’re not coming out ahead, either.

Take that Kohl’s Cash with a grain of salt

It may very well work out for you to use your Kohl’s Cash before it expires. But that may not happen. And one trap you don’t want to fall into is spending extra on an online order simply to snag your store reward.

Thankfully, it’s a trap I managed to avoid the last time I was in that situation. But it also meant letting my Kohl’s Cash expire without getting any use out of 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.Maurie Backman has positions in Kohl’s. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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They’re barriers worth eliminating. 

Building wealth is certainly not an easy thing to do. This especially holds true if you’re not a particularly high earner. But sometimes, all it takes to grow wealth and get to a place of financial stability and satisfaction is having the right attitude. And part of that means overcoming some key mental barriers.

Obstacles to move past

In a recent interview, financial expert Suze Orman identified three obstacles that tend to stop people from building wealth:

FearShameAnger

Many people worry they’ll never be financially stable, or that they’ll be stuck in a rut financially forever. They feel shame over financial blunders they’ve fallen victim to in the past, like incurring too much debt or buying a house that was too expensive. And they’re angry that their finances and circumstances aren’t better. But Orman insists it’s important to get past these feelings and work to get to a better place.

Now, if you’re thinking “What does Suze Orman know about struggling financially?” the answer is, actually, a lot. There was a time when Orman was so broke she actually lived out of her car. That’s right — her finances were in such disarray she couldn’t even secure housing.

Of course, Orman has come a long way since that point. But if you’re at a financial low, you can turn things around, too. It just takes the right attitude and approach.

How to get to a better place financially

Maybe your goal is to be financially stable. Maybe it’s to have more than $200 in your savings account at a given moment. Or maybe it’s to be able to cut up your credit cards and never have to rely on them again.

To get to that place, first, stop worrying that your circumstances will never change. Secondly, stop beating yourself up for mistakes you’ve made in the past. So you charged up a storm on your credit cards and are stuck in debt. So you took on too much house and now you have to sell and downsize. Nobody’s perfect. Rather than harp on it, make a plan to pay off your debt or change your housing situation and avoid a repeat.

And finally, instead of being angry about your financial situation, take steps to improve it. Don’t like your low paycheck? Boost your skills and try to find a better job. Feel resentful that your credit card companies are getting all of your spare cash? Work a side job for a while to drum up extra money to pay off your debt so you can start keeping your money for your own needs.

There are many steps you can take to improve your financial situation, whether it’s building or boosting an emergency fund, eliminating debt, and just plain learning to budget your money. But the key to meeting your financial goals could really boil down to having the right attitude. And if you believe in yourself and do your best to move past the negative feelings you’ve been harboring, your chances of success might multiply.

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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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