Money Management

Need to upgrade or replace an appliance? You may want to turn to Costco. 

There may come a point when you’re ready to upgrade some of your appliances. Or, you might have to buy a new appliance when an old one breaks.

Your goal in buying a new appliance should be to score a quality model at a reasonable price point that won’t result in an unaffordable credit card balance. To be clear, you don’t necessarily want to buy the lowest priced appliance within the category you’re looking at. After all, you might keep that appliance for many years, so you’ll want to focus on the features it offers just as much as the price tag attached to it.

And in that regard, it pays to look at Costco. Costco’s supply of appliances may be somewhat limited in its stores (though this can vary by location). But if you look online, you’ll see a wide range of products. And here’s why you may want to make Costco your go-to spot for appliances.

1. You’ll typically get an extended warranty

It’s common for appliances to come with a warranty, but in some cases, that protection might only last for 12 months. But when you buy an appliance through Costco, you’ll generally get a two-year warranty right off the bat. That should give you peace of mind when you’re removing a large chunk of money from your savings account to pay for a major purchase.

2. You can have your old appliance hauled away at no extra charge

Ordering a new appliance doesn’t always solve the problem of what to do with your old one. Often, you’ll have to figure out how to have your old appliance removed so your new one can be installed. That could mean having to pay a junk removal service, or bribing some friends with a hand truck and muscles to help you out.

But when you buy a new appliance through Costco, you’ll get your old one hauled away at no extra charge. That saves you money and a hassle.

3. You can snag 2% back on your purchase with an executive membership

If you have a Costco executive membership, you’re entitled to 2% back on your purchases both in stores and online. You might think that that benefit doesn’t apply to appliances since they’re so expensive. But Costco is great about not imposing exclusions on that offer, so if you have an executive membership, an appliance purchase could put a nice chunk of money back in your pocket.

It pays to shop around

Costco is definitely a good place to buy appliances. But that said, before you buy your next one, it does pay to compare prices with other retailers and see what offers they have. You may find that another retailer comes in at a more competitive price for the same model, or a similar one, and that it offers a comparable warranty. And if you have a credit card that gives you 2% cash back on purchases, you can enjoy that benefit even if you’re not using your Costco executive membership.

Any time you make a major purchase, it’s important to do your research. And buying an appliance is certainly no exception.

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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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Old age won’t necessarily mean your dog isn’t eligible for coverage. 

Adopting an older dog is one of the kindest things you can do. Older pets are notoriously harder to place — mostly because people don’t want to risk getting attached to an animal only to have it potentially pass away shortly thereafter.

But if you’re willing to take in an older dog, then you might end up getting a number of great years with your new best friend. You might also incur a host of expenses related to adopting that dog that result in quite the hefty credit card tab, from having to buy food and treats to purchasing supplies to covering different preventive medications.

But one expense you don’t want to skimp on when adopting an older dog is pet insurance. While you might assume that there’s no sense in buying pet insurance for an older animal, or that you won’t qualify due to your dog’s age, you’d be wrong in both senses.

Pet insurance for an older dog can easily pay off

The average lifespan for dogs is between 10 and 13 years of age, according to PetMD. But your dog might easily live until 14, 15, or beyond with excellent care. And the last thing you’d want is for money — or a lack thereof — to be a barrier to giving your dog the best care possible.

That’s why it’s so important to get pet insurance for an older animal. Will you potentially pay more for it because of your pet’s age? Yes.

Pet insurance companies take different factors into account when calculating premium costs, and the more risk they think they’re going to bear, the more they’re apt to charge you. Since health issues tend to arise and escalate as pets age, it stands to reason that your monthly premiums might be more expensive than what you’d pay for, say, a two- or three-year-old animal.

But because older pets tend to grapple with health issues, it’s important to have pet insurance coverage so you’re not saddled with unaffordable veterinary care bills. And you definitely don’t want to land in a position where your pet ends up needing life-saving treatment, but you’re forced to pass on it because you can’t swing the cost financially.

Will pet insurance even cover an older dog’s medical treatment?

Unlike human health insurance, pet insurance generally will not cover pre-existing conditions. So if you adopt an older dog with arthritis, for example, that condition won’t be covered if you put pet insurance in place.

But let’s say you adopt a 10-year-old dog with no known health issues, and a year later, he develops diabetes. If your dog didn’t have diabetes at the time of your pet insurance application, then there’s no reason your insurance policy wouldn’t cover treatment for that condition.

All told, pet insurance is an important thing to have any time you bring an animal into your home. And in some ways, it’s even more important to buy pet insurance when you’re welcoming an older dog into your life.

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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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Following this advice could make all the difference on your next Costco trip. 

Costco and Sam’s Club are very popular warehouse stores because they offer the opportunity to save money by purchasing large quantities of items at discounted prices. Both also offer a huge range of different products, from cereals and paper towels to flat screen TVs.

If you’re hoping to keep more money in your bank account by shopping at Costco and Sam’s Club, that’s a possibility — if you’re smart about how you spend your money there. But, with so many products on offer, you could just as easily find yourself running up a big credit card bill that you come to regret.

If you really want to save money by warehouse shopping, rather than engage in unnecessary spending, Dave Ramsey said there’s one trick to succeeding at this goal that everyone should try.

Ramsey said to do this if you want to save money at a warehouse club

According to Ramsey, there’s a simple secret to saving at Sam’s or Costco. “The trick to saving money by buying in bulk is to have a game plan before you even walk through the door of the store,” Ramsey said.

Having a game plan, as Ramsey suggested, means strategizing about what you should and should not purchase. It also means doing a price comparison, rather than just assuming that the warehouse prices are going to be cheaper. And, it means considering whether a specific purchase makes sense given your needs as a consumer.

“Like everything else in your budget, think through whether or not it works for you and your specific situation,” Ramsey said. “If it does fit your lifestyle and budget, grab a few staple items in bulk and see how much you can save!”

How to make a game plan that will let you save at Costco or Sam’s

So, if you want to follow Ramsey’s advice but aren’t sure how to do it, what steps should be part of your game plan? It’s pretty simple — just do the following:

Consider how much of a particular item you’ll use before buying it in bulk: Ramsey advises purchasing things like toiletries and paper products that won’t go bad quickly, and skipping perishables and fresh produce, which you may not have time to eat. But you should think about your own individual needs and make sure you aren’t ever buying something you won’t use up in full.Doing a price comparison: Check the price-per-unit at Sam’s Club and Costco and compare to what you’d pay elsewhere so you don’t overpay at the warehouse club.Shop with a list: You don’t want to give into impulse purchases, so be sure you know upfront exactly what you want to buy and that you’ve budgeted for that cost, so you won’t go into debt to make a purchase.

By following these tips and making a plan as Ramsey suggests, shopping at Costco and Sam’s Club will help you spend less for things you’d need to buy anyway — without leading to a bunch of unnecessary purchases that eat up any savings that comes from warehouse club membership.

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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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It all boils down to what your ideal retirement looks like. 

For many Americans, there are few things more stressful than thinking about retirement — specifically, worrying whether they will have enough to live comfortably. That’s why a recent Graham Stephan tweet came as such a surprise to his followers. According to Stephan — a real estate agent, investor, and social media guru — most people end up overestimating how much they’ll need to retire comfortably.

Stephan conducted a poll

The 32-year-old Stephan conducted an online poll, measuring responses to the following question: “How much do you think you need to retire right now?”

Here are the results of that poll:

Reaction

The majority of Stephan’s Twitter followers disagreed with his assessment. Many pointed out the role inflation plays in planning for retirement, while others shared their concern that Social Security will not be around by the time they retire.

Other responses mentioned that Stephan’s followers tend to be young and it’s natural that younger followers would believe they need more money to retire. After all, the poll question was worded: How much do you think you need to retire right now? The younger a person is, the more they’ll need to retire.

Finally, a follower pointed out that it was Stephan himself who told those watching one of his YouTube videos that they needed at least $3 million to retire.

Whether Stephan was wrong or right about people overestimating how much they’ll need, for most of us, it’s ultimately going to come down to how much income we’ll need in retirement.

How much will you need to live out your retirement dreams?

When people think about retirement, it’s fair to assume that they don’t share a single vision. For example, not everyone wants to ride camels in Egypt or explore the rainforest. Some folks dream of hanging out with the grandkids more, playing a round of golf with friends once a week, or cultivating a garden in their backyard that would make Martha Stewart jealous.

Different retirement goals require different annual incomes.

What the experts say

Financial advisors have long recommended that we aim for 80% of our pre-retirement income in retirement. For example, someone who earns $100,000 a year would shoot for an annual post-retirement income of $80,000.

The problem is that one size does not fit all. A retiree living in a higher cost-of-living area may need more than 80% to maintain their desired lifestyle, while a person living in a relatively inexpensive area could need less.

One more thing the 80% rule assumes is that working adults spend every last dollar of their current income. Let’s say you currently earn $100,000 per year. You’re married, filing taxes jointly, and contributing 10% of your pre-tax salary to a retirement account. After all deductions, you bring home roughly $2,400 biweekly, or a little over $62,000 per year.

If you spend every cent of that $62,000 each year, it’s likely that you’ll need to invest enough to replace at least 80% of your pre-retirement income. However, imagine that your total monthly expenses hover around $4,000. You plan to pay all outstanding debt off, including your mortgage, before you retire. Your math may show that you don’t need to replace the full 80%.

Note: Don’t forget that the entire 80% does not have to come from investments. You’ll also want to factor in income from Social Security, pension, and annuities.

The unknowable

The primary reason so many of us spend time worrying about retirement is because there are so many unknowns. For example, we don’t know what the rate of inflation will be by the time we retire. We can’t predict how well our investments will do. We don’t know precisely how much our medical expenses will be, although we do expect them to take a chunk out of our income each year. It’s the sheer number of variables that keep us awake at night.

So, is Stephan right? Do most people end up overestimating how much money they’ll need in retirement? For those who live simply, avoid debt, and manage their monthly expenses like a pro, maybe not. But for someone who dreams of living large in retirement, Stephan is definitely wrong. In fact, they may underestimate how much it will cost to retire in style.

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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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It’s a program I’m really glad I signed up for. 

When I first started shopping at Costco, I didn’t realize there was such a thing as an executive membership. But one year, when my membership came up for renewal, I was asked if I wanted to stick with the basic membership or upgrade. And I decided to go the latter route.

These days, my Costco executive membership costs me $120 a year, which is twice the cost of a basic membership. But despite that added fee, the executive membership is totally worth it for me. Here are some of the things I love most about it.

1. Cash back on my Costco purchases

With a regular Costco membership, you don’t get cash back on your purchases (though your credit card might give you cash back depending on its rewards program). With a Costco executive membership, you get 2% back on any Costco purchase. And that doesn’t prevent you from also getting cash back on a credit card you use at Costco.

So, let’s say your credit card gives you 1% cash back across the board and you have an executive membership at Costco. All told, you’re getting 3% back on the items you’re buying.

2. Cash back on Costco Travel

You’d think Costco’s travel services would be excluded from the 2% cash back offer. Not so. Years ago, I booked a trip through Costco that wasn’t inexpensive, and my entire itinerary was eligible for that 2% back.

3. An annual rewards certificate you can redeem for purchases or cash

Some credit cards give you access to your cash back month after month. That can be a good thing, but it often means you’re only getting a small amount of cash back at a time.

What I really like about Costco’s executive membership is that your 2% cash back comes in the form of a reward certificate that’s issued to you once a year. This means that by the time your rewards arrive, you’re likely to have accumulated a nice sum if you shop at Costco often.

Also, you have options for using your rewards certificate. You can simply present it at the checkout counter and use it to cover the cost of purchases you’re making, or you can take it over to the customer service counter and redeem it for cash. I’ve done both in the past, and both options are really nice to have.

Is a Costco executive membership right for you?

For an executive membership to make sense based on its current price point, you really need to do more than $3,000 of Costco shopping in a year. That’s because 2% back on $3,000 is $60, so for every dollar you spend above that threshold, you come out ahead financially with an executive membership over a basic one.

Since I shop at Costco pretty much every week, the executive membership makes sense for me. But if you’re not sure about it, tally up your Costco spending from 2022 and see what number you get. If you’re above $3,000, you may want to upgrade to an executive membership for 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.
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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