Money Management

It’s not necessarily a feasible option for everyone. 

There’s a reason stores like Costco tend to be popular. Shopping there often results in a lower credit card tab compared to shopping elsewhere. That’s because you can take advantage of quantity discounts, otherwise known as buying in bulk.

In fact, it’s not just Costco that offers consumers options for bulk-buying opportunities. You can load up on bulk items at stores like Target, Walmart, and likely even your local supermarket. And if you tend to spend time on Amazon, you’ve probably noticed that the online retail giant offers its fair share of bulk options, too, from toilet paper to granola bar multipacks.

But while buying groceries and other household essentials in bulk could be a nice source of savings, it also may not be an option for you if money is tight. Here’s why.

You need to spend more upfront to save

Let’s say you normally buy a box of pasta every week for $1.25. A bulk pack of 12 boxes might cost you just $12, which means you’re saving yourself $3 by buying pasta in bulk.

Here’s the problem, though. What if your grocery budget is very tight and you can’t afford to spend the $12 in one fell swoop for items you don’t need right away? In that case, you lose the chance to save that $3 and get stuck paying more.

Unfortunately, this is the trap that many cash-strapped or lower-income households might fall into when it comes to bulk buying. This is just a single example, but in many cases, buying in bulk means more than shelling out an extra $10 here or $15 there. And for households living paycheck to paycheck with no money in a savings account, that extra spending may not be feasible.

Let’s say spending $100 on a bulk shopping haul will save you $20 on the cost of those items compared to buying them individually over time. If you’re forced to charge that $100 on a credit card and carry your balance forward, you might rack up so much interest on it that you negate that $20 in savings.

Also, while you don’t have to shop at stores like Costco to take advantage of bulk-buying opportunities, often, that’s where you’ll find the largest selection of bulk items. But to join Costco in the first place, you have to pay a $60 membership fee (for a basic membership). If you can’t afford to spend the $60, you can’t join Costco — even if doing so saves you 10 times that amount in the course of a year.

An option some consumers can’t benefit from

You’ll often hear that buying in bulk is a good way to save money on food and essentials. And that’s good advice for people with a little leeway in their budgets.

But let’s remember that it’s an option that requires you to have some extra money to spend upfront in the first place. If you’re not in that boat, this may, unfortunately, not be such great advice 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.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 and Target. The Motley Fool has positions in and recommends Amazon.com, Costco Wholesale, Target, and Walmart. The Motley Fool has a disclosure policy.

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Why waste money you can’t afford to part with? 

If it weren’t for Costco, my credit card bills would easily be a few hundred dollars higher each month. That’s because I routinely buy bulk produce, dairy products, household essentials, and snacks at Costco at a much lower price point than I’d find at my regular supermarket or local big-box store.

But there’s a trap I tend to fall into in the course of visiting Costco, and it’s buying things that aren’t on my shopping list. See, Costco tends to rotate its inventory by season. And so around the holidays, for example, you might find a host of delicious peppermint goodies. And in the late spring, you might find cute swimsuits or beach gear.

Costco also commonly adds new products to its rotation. And if you love food like I do and you come across a new cracker or dip, you might be tempted to throw it into your oversized shopping cart — even if it wasn’t originally on your list.

Now it’s one thing to give into the occasional temptation at Costco. But too many impulse buys could bust your budget. So if you’ve fallen into that trap before, here’s how to avoid impulse purchases at Costco going forward.

1. Only shop with cash

Swiping a credit card at Costco could mean scoring a nice amount of cash back on your purchases. But when you have a credit card at your disposal, you give yourself the option to spend more than anticipated. If you want to take that option off the table and avoid impulse purchases, only shop at Costco with cash. Make a list of the things you need, estimate their cost, and bring enough cash to cover those buys alone.

2. Stay out of aisles you don’t need to visit

There may be a delicious new selection of Brie and Gruyere if you wander down the Costco cheese aisle. But if cheese isn’t on your list, stay out of that aisle. In fact, make a point to only hit the aisles with items you’re seeking out that day. The more you wander, the more you might be tempted.

3. Steer clear of seasonal displays

My Costco has a specific area where it tends to put out a seasonal display. Most recently, it featured a host of Valentine’s Day items. And because I decided to check it out, I wound up impulse-buying a three-pound red velvet cheesecake.

If your Costco has a similar setup, then a good way to avoid unplanned buys is to stay away from those seasonal displays. Costco is very good at setting up seasonal items to look appealing, and its low price points might tempt you to stretch your budget for an item you don’t need. Just take it from the person who now has a three-pound cheesecake sitting in her fridge (and who will likely need a week-long dairy detox once she’s done consuming it).

If you’ve fallen victim to impulse buys at Costco, you’re not alone — I do it all the time. But if you’d rather save your money, follow these tips to stop buying items you weren’t planning on. Doing so could be much better for your wallet — and also, in some cases, your stomach.

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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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Evacuation costs can run to thousands of dollars. Are you prepared? 

At the start of February, residents of East Palestine, Ohio were forced to evacuate to avoid exposure to harmful chemicals. Following the derailment of a train carrying toxic materials, authorities carried out a controlled burn to avoid an explosion. It released fumes that the Governor of Ohio said could prove deadly if inhaled.

As the 4,700 or so residents deal with the disruption and potential health impacts of the derailment and chemical spill, there are also questions about the financial side of the disaster. It can be expensive to evacuate your family in an emergency, particularly if you may also have to cover additional health or veterinary expenses. Unfortunately, many Americans do not have enough money set aside to cover the unexpected.

East Palestine residents promised compensation

The train operator, Norfolk Southern, has promised to cover hotel, food, clothing, childcare, pet care, and other costs for impacted residents. It says it has already spent $1 million in assistance to local people and businesses. If you live in East Palestine and need help, call 1-800-230-7049 or the Family Assistance Center at Abundant Life Church in New Waterford.

The challenge is that it isn’t clear how long Norfolk Southern will offer support to residents, or how much of the bill the company will foot. One of the lawsuits brought by local residents against the company puts the potential cost at over $5 million. Residents have been told it is safe to return home and the Environmental Protection Agency (EPA) is monitoring the air for chemicals.

Nonetheless, many locals are concerned about contamination. Locals complain of strong chemical smells and some say they are suffering from headaches and nausea. Some have been able to leave East Palestine and stay with family elsewhere, at least temporarily. But other residents have returned home as they can’t afford to move away.

There are also reports that wildlife, including fish and other animals, have died. One resident told The New Republic she’d had to put down her pet cat. The cat developed heart problems following the accident and she couldn’t afford to pay the vet bills.

How much does it cost to evacuate a family?

Whether you’re evacuating because of a hurricane, flooding, or chemical spill, the costs can quickly add up. A lot depends on where your family stays, the number of days you’re away, and whether you lose income as a result of the crisis. One study on hurricane evacuation in Texas estimated the costs at between $820 and over $2,360.

Given that 50% of Americans have less than $500 in emergency savings, many would find it difficult to meet the costs of an emergency evacuation. If you don’t have enough cash in your bank account to cover an unexpected financial hit, see if you can start saving a small amount. Even if you put $10 or $20 into a savings account each month, in time that will add up and give you some financial cushion in an emergency.

If you aren’t confident you would be able to pay evacuation costs, it might be worth applying for an emergency credit card. Running up a balance that you can’t afford to pay off before it accrues interest can be costly, and is not advisable in many circumstances. But if it’s a question of using your credit card to get out of a potentially life-threatening situation, it could be a different story.

For some, homeowners insurance or rental insurance will cover living expenses following a forced evacuation. However, it’s important to check your policy to know exactly what’s included — look for the “loss of use” or “additional living expense” coverage. You’ll also need to take into account the cost of your deductible and be prepared to wait while your claim is processed.

Bottom line

Unfortunately, residents of East Palestine have a difficult road ahead. Not only do they have to deal with the immediate costs of evacuation and necessary purchases like bottled water, there’s also the longer-term uncertainty about the health impacts of the chemicals that were released. It is impossible to protect yourself completely against these types of disasters, but you can insulate yourself a little financially by building up an emergency fund and knowing in advance what your insurance policy might cover.

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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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If you aren’t already doing curbside grocery pickup, you’re missing out. 

Groceries can be an expensive purchase these days, as food prices have gone up due to inflation. If you’re tired of giving your credit cards a workout at the grocery store, there are ways to reduce what you’re spending on food.

In fact, finance guru Dave Ramsey has a simple, straightforward suggestion for reducing grocery costs that just about everyone should follow to keep more money in their checking accounts. He advises using curbside pickup for food purchases instead of actually going into the store — and he’s absolutely right.

Here’s why Ramsey recommends curbside grocery pickup

Ramsey suggests curbside pickup as a method of reducing grocery spending for a few key reasons.

First and foremost, if you pick up your groceries instead of going into the store, Ramsey points out that you’ll be much less likely to pick up items that aren’t specifically on your list.

“If it’s too hard to say no to the candy (whether the kids are with you or you’re talking to yourself—we don’t judge), order your groceries for curbside pickup,” he suggested. “It’s a lot easier to avoid the temptations when you can type everything you need into a search bar.”

Ramsey also pointed out some other benefits of picking up groceries instead of going into the store to buy them, including the ease of comparison shopping, making sure you aren’t spending more on groceries than you budgeted for, and being able to check in real-time whether you’re actually out of an item and need to buy it or not.

“Shopping online is also an easy way to compare brand prices, see what’s on sale, and watch the total add up in real time without the calculator,” Ramsey said. “No more getting up to the register only to discover that family-size box of cereal isn’t on sale after all. And no more buying rolled oats just in case you’ve run out at home (you can walk to the pantry to see for yourself—mind blown).”

Here’s why you should follow his advice

Ramsey is spot-on with the advice to switch to grocery pickup rather than shopping in the store. Far too many people end up throwing items in their cart because stores are set up to entice extra buying. Or, it feels like a hassle to walk up and down the aisles and check which pasta sauce or canned peas are on sale for the best price — but this isn’t an issue when you’re just scrolling on your computer and can see prices in real-time.

You need to be careful, though, that you aren’t paying inflated prices or extra fees for grocery pickup. Many stores offer this service for free (especially if you spend over a certain amount of money), but others may charge a premium for online purchases. If you do have to pay a fee, check to make sure that the money you spend on it doesn’t eat up any savings that comes from avoiding impulse purchases in the store.

The good news is, it’s easy to check costs up front and chances are good you’ll be able to find an affordable grocery delivery service near you so you may as well give it a try. You may just find Ramsey’s right and that this technique helps you save a fortune on food shopping going forward.

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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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Know what to expect before putting this much on your credit card. 

Credit cards are normally the best option to pay for purchases. Many of them offer rewards, such as cash back, as well as complimentary purchase protections. If you pay in full every month, it makes sense to use your credit cards for all your usual bills to take full advantage of those perks.

But what if you have a very large purchase planned, like something that’s going to cost you over $10,000? You might already know that banks need to report cash deposits of $10,000 or more and want to see if there’s anything to be aware of with credit cards.

If you have enough available credit for a purchase, then you can put it on your credit card. Your available credit is your credit limit minus your current balance. For example, if you want to make a $10,000 purchase, you’d need at least $10,000 in available credit. Before you do this, there are a few things you should know about.

Your card issuer might contact you about the transaction

Large transactions can trigger a card issuer’s fraud detection, especially if a transaction doesn’t fit your normal spending habits. If most of your credit card purchases are under $100, and then you decide to spend $5,000 or $10,000, your card issuer might want to double check that it’s you and not a scam artist.

If so, your card issuer will either:

Reject the transaction and contact you to see if it’s legitimate. If you confirm that you were trying to make the purchase, your card issuer will tell you that you’ll need to attempt the purchase again so it goes through.Approve the transaction and contact you to let you know about it. In this case, the purchase goes through like normal, and your card issuer sends you a notification about it. The notification will include an option to report the purchase as fraud if you didn’t make it.

Your card issuer could get in touch by phone, email, or SMS message. This will depend on what contact information it has for you and your communication preferences.

Your credit utilization will go up

Your credit card balances have a significant impact on your credit score. That means large transactions could cause your credit score to drop, at least until you’ve paid them down.

One of the most heavily weighted factors in your credit score is your amounts owed. These include balances on credit cards and loans, but balances from credit cards matter much more. Specifically, it’s your credit utilization ratio which is very important. Credit utilization is your credit card balances divided by your credit limits. As a rule of thumb, it’s good to keep this below 30%.

Let’s say you have a credit card with a balance of $2,000 and a credit limit of $20,000. Your credit utilization would be $2,000 divided by $20,000, which is 10%, a great number for your credit score.

You then make a $12,000 purchase. Your balance is now $14,000, with the same $20,000 credit limit. That brings your credit utilization to 70%. A number that high could have a serious negative impact on your credit score. However, only your current credit utilization matters. Once you pay off your credit card, your credit score will go back to normal.

You run the risk of credit card debt

The biggest danger of spending a large amount on your credit card is that it could put you into debt. Because of the high interest rates most cards have, credit card debt is expensive and hard to get rid of.

A credit card interest calculator is a good way to see just how costly this can be. For example, if you have a $10,000 balance on your credit card and pay $300 per month, that balance would take 47 months to pay off. That’s nearly four years! You’d also pay $3,967 in interest charges.

There are two situations where putting this type of spending on your credit card isn’t going to cost you:

You can pay the balance in full by the due date on your credit card statement. When you pay your credit card’s full statement balance, you don’t get charged interest.You’re using a 0% intro APR credit card. This type of credit card has a 0% APR on purchases for an introductory period. If you’re able to pay off your balance in full during that period, you’ll avoid interest charges.

Assuming you have the credit, you can put more than $10,000 on your credit card without issue. Your card issuer may want to confirm the purchase isn’t fraud, though. The potential consequences are damage to your credit score and credit card debt. That’s why it’s best to be careful how much you spend on your credit card and only charge purchases you can afford to pay in full.

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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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