Money Management

You may be surprised at the answer. 

Feeding my family is hardly an inexpensive feat. And these days, my credit card bills, like many people’s, are higher due to inflation. As such, I’m constantly looking for ways to reap savings in the course of buying groceries.

I used to routinely turn to Costco as my go-to source for a wide range of food products. But pretty recently, I discovered Aldi, and it’s opened the door to a host of savings opportunities, too.

Now, if you’re wondering which of the two stores has the better deals, the quick answer is that it really depends on what you’re buying. But it may surprise you to learn that in some cases, Aldi has the potential to beat Costco on price.

A surprising discovery

I used to assume that buying produce in bulk from Costco would always result in a lower price point than buying it elsewhere in smaller quantities. But then I did some digging, and lo and behold — buying produce at Aldi can be cheaper.

My family eats a lot of cucumbers, strawberries, and blueberries in particular. I recently bought cucumbers at Aldi for $1.25 apiece, whereas at Costco, a three-pack was $5.99, or $2 per cucumber.

Costco strawberries, meanwhile, were recently $7.99 for two pounds, or about $4 for one pound. But I found strawberries at Aldi for $1.99 a pound, which is a much better deal. Similarly, I bought 16 ounces of blueberries at Aldi for $1.99. But Costco had 18 ounces for $3.89, so clearly, Aldi’s price was better.

Now with all of this said, you shouldn’t assume that Aldi will always have better prices than Costco. And also, the price I pay in my local market may be different than what you pay in yours. The point, however, is that it pays to look, because you never know when one store might be less expensive than the other.

One risk of shopping at Aldi

I’m really trying my best to grow my savings account balance this year, and to do that, I need to shop carefully for food and make compromises. One thing I’ve noticed about Aldi is that the store is loaded with brands I’ve never heard of. That’s not necessarily a problem for me. But when you have kids, and your kids are picky about the cereals or granola bars they eat, it can become an issue.

That’s why you’ll need to be careful when shopping at Aldi — even if you stand to reap some savings. At Costco, you’ll commonly find a mix of well-known brands and Kirkland-branded products, which is Costco’s signature brand. But those Kirkland products are available all the time. It’s not the same as Aldi, where you might see one relatively unknown brand one week and a different brand the next week.

If you’re shopping for something like produce, that won’t be an issue, which is why I’ve started buying more of my fruits and vegetables at Aldi instead of Costco. But for packaged goods, I might still opt for Costco, even if I can save a touch of money at Aldi. The way I see it, I’d rather spend $0.50 more here and there than risk having to throw products away because my kids refuse to eat them.

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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.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

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A side gig could make a home purchase more attainable. 

There’s a reason so many potential home buyers have been struggling to break into the market. Not only have U.S. home prices been quite elevated over the past few years, but mortgage rates are also up these days. That’s created a major affordability crunch.

Now generally speaking, it’s a good idea to bring a 20% down payment to the table at a minimum when buying a home. This isn’t always a requirement, and some mortgage lenders will accept less money down at closing. But making a 20% down payment helps you avoid private mortgage insurance (PMI), a costly premium that can make your ongoing housing costs even more expensive.

But coming up with a 20% down payment isn’t easy at a time when property values are higher. And so if you’re getting closer to that mark but aren’t quite there yet, then getting a side hustle could really work to your benefit.

A second job could make homeownership more attainable

A recent survey by Compare The Market found that prospective home buyers across different age groups are looking at getting a side hustle as a means of being able to purchase a home. In fact, potential buyers aged 18 to 24 cited that as their top way to save for a home, while those aged 25 to 44 cited it as their second most popular option for coming up with those funds.

Of course, the upside of getting a side hustle to save for a home down payment is not having to cut back on spending to such an extreme degree to afford that purchase. Let’s say you’re $12,000 shy of being able to buy a home in your target market, and you really want to become a homeowner in a year’s time. If you’re able to hold down a side gig for the next 12 months and earn $1,000 a month from it, you won’t necessarily have to slash your spending and give up things you love to make that happen.

A side hustle could benefit you even once you purchase a home

Working a side gig could help you get closer to your down payment goal sooner. But if you’re going to get a side hustle, don’t just plan to dump it the moment you hand over your down payment.

Many new homeowners find that their costs are higher than anticipated, between surprise repairs and the general cost of maintenance being difficult to nail down. If you’re willing to hang onto your side hustle for your first year of homeownership, you might make that transition a lot easier on yourself financially.

In fact, you may even decide to permanently keep your side hustle upon becoming a homeowner. You never know when your costs like property taxes or homeowners insurance might rise unexpectedly. Having a second stream of income could make increases like that easier to manage. And the less financial stress you have, the more likely you are to actually be able to enjoy your new home to the fullest.

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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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Both plans have their benefits as well as drawbacks. 

No matter your age, it’s a good idea to start diverting some of your income to a retirement savings plan. You’ll need personal savings to tap later in life, and the sooner you start building a nest egg, the more wealth you might grow.

When it comes to saving for retirement, you have choices. You could keep your money in a regular brokerage account, but then you won’t reap any tax breaks in the course of saving for the future. And so a better bet may be to choose between an IRA account and a 401(k) plan, assuming you have access to both.

Now you’ll often hear that 401(k) plans are better than IRAs. But that’s not necessarily the case. So if you don’t have access to a 401(k), don’t sweat it. And even if you do have access to a 401(k) plan through work, you may want to opt for an IRA instead.

The upside of 401(k) plans

The IRS sets a limit each year on how much money you can contribute to different retirement savings plans. This year, savers under 50 can contribute up to $22,500 to a 401(k), whereas IRAs max out at $6,500. Meanwhile, savers 50 and over can put up to $30,000 into a 401(k), and only a maximum of $7,500 into an IRA.

If you’re someone who wants and is able to pump a lot of cash into a retirement savings plan, then you may find an IRA too limiting given its lower contribution limits. That said, for many people, putting even $6,500 or $7,500 into a retirement plan is a stretch, so if that’s the boat you’re in, then the fact that 401(k)s come with higher contribution limits may not matter to you.

But there’s another key benefit of being able to save in a 401(k) — free money. Many companies that sponsor 401(k) plans also match worker contributions to some degree. Your employer might, for example, match 100% of up to $3,000 in contributions. This means that if you put $3,000 of your own money into a 401(k), you might get an additional $3,000 from your employer. With IRAs, there are no matches to be enjoyed.

The upside of IRAs

Although you can’t contribute as much to an IRA as a 401(k), and you won’t get free money in your account, IRAs tend to come with lower fees than 401(k)s. And remember, high fees can eat away at your returns over time, costing you money.

Also, 401(k) plans generally do not let you invest in individual stocks, and they tend to limit you to a relatively small group of funds to choose from, some of which might come with hefty investment fees known as expense ratios. IRAs, on the other hand, tend to offer far more investment choices. You can buy individual stocks in an IRA, or load up on ETFs if you so choose. That could help not only keep your fees down, but also, help ensure that your portfolio lends nicely to your long-term goals.

Which account should you choose?

Clearly, there are pros and cons to both IRAs and 401(k)s. The good news, though, is that you actually don’t have to choose one over the other if you have access to both.

In fact, let’s say you’re able to save $5,000 this year for retirement, and your employer is willing to match up to $3,000 in 401(k) contributions. A good bet could be to put $3,000 into your 401(k), and then put the remaining $2,000 into an IRA.

With the $3,000 in your 401(k), you can benefit from an additional $3,000 you don’t have to work for. And you can invest the $2,000 in your IRA in just about any asset you feel is a good option for 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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The online retail giant might now save you a trip to the doctor or urgent care center. 

It’s hard to believe that Amazon started out as just an online book seller. These days, you can buy just about anything on Amazon, from groceries to apparel to toys. And you can do a lot more than shop on Amazon. You can also stream music, TV shows, and movies, plus access books digitally.

But Amazon really wants to be a one-stop shop for customers. And so now, if you need a doctor, you can actually find one on Amazon.

Have you tried Amazon Clinic?

Amazon Clinic is a newer service offered by Amazon that’s available in 33 states. And it offers the benefit of being able to receive medical treatment without having to leave your house.

If you don’t have a car, it might be a hassle to get over to see a doctor when you fall ill. Similarly, if you don’t have access to childcare, getting seen for a medical issue in person can be tough.

With Amazon Clinic, you can save yourself the trip to the doctor or urgent care center. Instead, you can connect with a licensed doctor or nurse practitioner online and message with them about your condition. Once a professional is able to make a diagnosis, they’ll either give you medical advice or write you a prescription to treat the issue at hand.

An easy way to get the care you need

To use the service, start by locating the condition you’re struggling with on the Amazon Clinic homepage. From there, you can click on that condition to get options and prices for connecting with a physician.

Each online clinic sets its own prices, and prices vary by treatment. You should also know that the cost of any medication you might need isn’t included in your visit. If you end up getting a prescription, you can fill it at the pharmacy of your choice.

How does health insurance factor in?

Unfortunately, Amazon Clinic does not accept health insurance at this time. You’ll need to be prepared to see a charge for healthcare on your credit card instead.

That said, if you have a flexible spending account (FSA) or a health spending account (HSA), both of which let you set aside pre-tax dollars for medical spending, you are allowed to pay using one of these accounts. Often, you’ll get a debit card from your FSA or HSA provider, and that could be your payment source when using Amazon Clinic. Another option is to pay with a credit card and then submit the expense to your FSA or HSA provider for reimbursement.

You should also know that while Amazon Clinic doesn’t take insurance, you can use your health insurance to pay for a medication you’re prescribed (assuming your plan covers it). But if you don’t have insurance, be sure to budget the cost of medication into your treatment.

It’s great that Amazon is offering people the chance to get access to healthcare via their laptops. That said, Amazon Clinic isn’t necessarily your most affordable bet for medical treatment if you have insurance. You may decide to use the service for the convenience factor, but if you have good insurance, don’t be surprised if it’s not the most economical option.

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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.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Maurie Backman has positions in Amazon.com. The Motley Fool has positions in and recommends Amazon.com. The Motley Fool has a disclosure policy.

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It’s a valid concern. 

Many people spent most of 2020 and 2021 staying close to home as the pandemic raged. But these days, the demand for travel is much higher. Unfortunately, travel costs are also much higher.

Now, it’s one thing to be paying a premium to travel when you’re apt to get great customer service. But airlines today seem to be falling down in the customer service department.

Not only have flight delays and cancellations ramped up, but many travelers today are grappling with issues like having their bags delayed or lost completely. And in a recent survey by Faye, a travel insurance company, travelers are more afraid of losing their luggage in the course of a trip than contracting COVID-19.

If you’re concerned about losing your luggage on your next vacation, you should know that travel insurance could help alleviate that concern. But you may not need travel insurance for that purpose if you book your trip with the right credit card.

How much protection does your credit card offer?

If you’ve ever had a bag of yours get lost or delayed when traveling, you know what a damper that can put on your trip. And it could end up costing you money.

In many cases, your airline is required to compensate you when your luggage is mishandled in any way. But it’s good to have a nice amount of coverage from your credit card, too, in case your airline’s compensation falls short.

A good bet is to use a travel rewards credit card whenever you’re taking a flight. Not only might one of these cards offer money-saving perks like free checked baggage, but you might also be entitled to superior coverage if something happens to one of your bags en route to your destination.

Of course, the amount of coverage you get will hinge on your credit card’s specific policy. Your credit card might give you a daily allowance for each day your baggage is delayed. For example, you might get up to $100 a day in such an incident, which would allow you to go out and purchase the items you need without having to incur out-of-pocket costs.

Similarly, you might get a lump sum payment if your luggage is lost permanently. Again, compensation varies by card. But it’s worth seeing what protection your credit cards offer you. And if you’re not happy with what you see, it could pay to apply for a travel rewards card, which is more likely to offer higher compensation for a common travel issue like lost luggage.

Avoid the hassle in the first place

If you’re taking a week-long trip, then it may be impossible to avoid a scenario where you have to check a bag. But otherwise, you may want to take the idea of lost luggage out of the equation by making sure your belongings are all able to fit into a carry-on bag. That way, you won’t have to stress about missing clothing or shoes.

That said, if you can’t fit everything you need into a carry-on, make sure not to check anything important that can’t easily be replaced, like medications. Those should stay with you at all times, because if you get to your destination without the pills you need, you could end up in quite a dire situation.

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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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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