Money Management

Suze Orman’s advice is widely known, but it may not always fit your unique financial situation. Here’s why you should take her maxims with a grain of salt. [[{“value”:”

Many people need help with their finances. Whether it is articles like you find here at The Motley Fool, one’s own investment advisor, or a celebrity expert, there is no shortage of places to get that advice. But some advice is better than others.

Suze Orman has long been a voice in the world of personal finance, offering advice on everything from budgeting to saving money, investing, retirement, and more. Her tips have no doubt helped many, but it is important to remember that no single financial strategy works for everyone. Here are a few reasons why you may want to take her advice with a grain of salt.

1. One size does not fit all

By necessity, Suze Orman gives financial advice to the masses. That is her audience and so that makes sense. But what doesn’t make sense is thinking that she is speaking to you, knows you and your situation, and that her advice is tailored for you.

One size does not fit all.

For example, Orman is bullish on saving and investing. But someone who has a lot of debt will benefit more from focusing on paying it off, as opposed to investing in the stock market or stashing a lot of money away in a savings account.

So, before listening to this sort of generalized advice, be sure it makes sense in your situation.

2. It’s really OK to use your credit cards

Orman is no fan of going into debt, and typically, that is fine advice. But again, blanket statements like this one maybe should not be followed to the letter:

Orman is quoted as saying, “If you can’t afford to pay off a credit card in full, then that is money that shouldn’t be spent,” adding that she has “zero patience” for those who charge on cards that are charging 20% APR or higher (as many do.)

The fact is however, there is good debt and there is bad debt. There is unnecessary debt and then there is necessary debt. Charging for a trip to Hawaii that you cannot afford to pay back is bad, unnecessary debt. But charging the tuition for your last semester of college is probably a wise choice, especially if you have access to a card with an intro 0% APR offer; that debt will move your life forward.

The fact is, and with apologies to Ms. Orman, credit cards have so many good features. They offer you flexibility and convenience, and unlike a loan, you don’t have to ask anyone’s permission to use them. They allow you to build up a solid credit score, and to boot, many of them enable you to earn rewards as you use them.

So yes, credit cards are one of the perks of modern life that can make your life easier, especially if you use them wisely. (And just to be safe, if you need help budgeting, click here for the budgeting apps we like best.)

3. 70 may not be your ideal retirement age

Suze Orman has said that “70 is the new retirement age — not a month or year before.” The reason she says that is two-fold:

People are living longer, healthier lives. A retirement age of 65 may have made sense years ago, but people are generally productive a lot longer now.While you can get Social Security as early as age 62, the longer you wait, the more you will get. By waiting until 70 to retire, you maximize your benefits.

The problems with this advice are many. First of all, it does not take into account how much money you have invested and saved, and what your individual goals are. If you have enough money socked away to last, there is no reason that you would need to continue to work until you are 70 years old, despite what Suze Orman says.

Similarly, if Social Security is going to be only a small part of your retirement funding, again, you likely do not need to wait so long. Plus, you may want to claim your benefits early, if, for example, you are in ill health.

While Suze Orman offers useful financial advice for many, her broad-brush, one-size-fits-all approach is best viewed with skepticism. It really is essential to weigh her advice against your particular situation and consider alternative perspectives when deciding what financial plan works best for you.

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The warehouse giant is famous for its savings, but I didn’t expect to save so much in one outing. Check out just how worthwhile a Costco membership can be. [[{“value”:”

If someone said you could earn $250 by spending $130, would you do it? What about by spending $65? And what if that was a once-yearly fee, but the savings were unlimited?

That’s the situation I found myself in last week after signing up for a Costco membership. I knew my savings could be significant if I switched some of my shopping to Costco, but I was blown away by how much I’d saved in just one visit.

Sticking to the shopping list

Before I made my first visit to Costco, I made a thorough shopping list. My husband and I went over our regular groceries and figured out what might be worth buying at Costco instead. We’re a two-person household, so we know we won’t be able to get through any large-volume foods with short shelf lives. But buying pantry staples and non-perishable goods is right up our alley.

By going in with a list, we knew ahead of time what we were looking for. This saved us from wandering up and down the aisles, getting distracted by all the deals. If we’d gone in empty-handed, we likely would have walked out with items we didn’t need, or ones that might not actually be priced lower than at other stores.

Are you a Costco member looking to save even more? Check out the best credit card for maximizing your spending at Costco.

Saving $250 in just one Costco trip

When we got home from the warehouse, my husband did a little spreadsheet magic to compare our spending that day to what an equal amount of the same items would have cost us at our normal grocery store. And we were blown away by the results.

We spent about $280 on that first Costco trip. But based on the per-unit prices of each item, we saved $250 compared to what we would have spent otherwise. That’s nearly 50% in savings! And since we stuck to our list, all of that savings was on items we buy regularly and would have purchased anyway.

In one visit, we’re ahead $120 on the membership fee we paid. And we still have 12 more months of spending — and saving — to look forward to.

We also made sure to earn even more by using our rewards credit card on the purchase. Take a look at this curated list of the best credit cards to use at Costco.

How to decide if Costco is worthwhile for you

The best way to figure out if becoming a Costco member is worth it is to do a little homework first. Consider the items you buy all the time, whether that’s rolled oats or olive oil or printer paper for your office. Note the price you usually pay for those items, then take a look at Costco’s website to find the price of a comparable item.

Next, you’ll want to do a little math to figure out the per-unit prices of the two. Your regular cereal may cost $6 at the grocery store and $10 at Costco. But if the cereal is sold in a 20-oz box at the grocery store and a 50-oz box at Costco, you can’t do a straight one-to-one comparison of the prices.

The per-unit price will give you a more accurate comparison so you can see if buying that item at Costco is actually worthwhile. In this example, your regular cereal costs $0.30 per ounce, while Costco’s is $0.20 per ounce — a much better deal.

A Gold Star membership costs $65 per year, while an Executive membership that earns 2% cash back on all qualifying Costco purchases costs $130 per year. But Costco will let you downgrade or even cancel your membership at any time if you don’t find your savings are substantial enough.

So if after doing your research, you think Costco could save you some money, give it a shot. You could end up saving a lot more than you think.

Top credit card to use at Costco (and everywhere else!)

We love versatile credit cards that offer huge rewards everywhere, including Costco! This card is a standout among America’s favorite credit cards because it offers perhaps the easiest $200 cash bonus you could ever earn and an unlimited 2% cash rewards on purchases, even when you shop at Costco.

Add on the competitive 0% interest period and it’s no wonder we awarded this card Best No Annual Fee Credit Card.

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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 positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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There’s a lot of bad information about credit scores out there. Read on to see what it really takes to get a higher score. [[{“value”:”

As of 2023, the average U.S. credit score was 715, says Experian, one of the three credit bureaus. That score is considered good, but not great.

With a credit score of 715, you might get a car loan or mortgage when you apply. But you won’t necessarily get the best rate a mortgage lender is offering. While a 715 is certainly a respectable score, it could be helpful to raise your credit score.

But it’s important to know what to do to raise your credit score — and what not to do. With that in mind, here are a few dangerous myths about boosting your credit that could come back to bite you.

1. Carrying a credit card balance is a good way to raise your score

Using a credit card regularly and paying your bills on time and in full every month could help your credit score increase. But you do not need to carry a balance on your credit cards to boost your score. In fact, carrying too large a balance could actually lower your credit score.

Indeed, if you make your minimum credit card payments on time every month, it’ll count as positive activity in the context of your credit history. That’s the factor that carries the most weight in calculating your credit score.

But if you carry a balance forward every month, and that balance is large relative to your total credit limit, it could cause your credit score to drop. Plus, in that situation, you’re handing money over to your credit card issuers every month in the form of interest instead of keeping it to use yourself or save and invest.

If you’re juggling multiple credit card balances, you may want to consolidate them into a single balance with a 0% introductory interest rate that makes your debt easier to pay down. Click here for a list of the best balance transfer credit cards.

2. Paying rent on time will give your score a boost

When you owe money on a mortgage and make those payments when you’re supposed to, that information gets reported to the credit bureaus and could help your credit score rise. But rent payments aren’t automatically reported to the credit bureaus the same way mortgage payments are.

If you want your timely rent payments to help your credit score, you need to ask your landlord to report them. There are different reporting services your landlord can use, including Boom and Experian RentBureau.

3. Having a lot of savings will improve your credit score

Having a nice amount of savings can be great for your finances. But it won’t actually do a thing to help your credit score improve.

The amount of money you have is not counted toward your credit score. Your credit score is a measure of how well you manage debts, and how you use the various lines of credit available to you. But whether you have $500 in your savings account or $50,000 is irrelevant.

Of course, the more savings you have, the less likely you are to fall behind on debts. So in an indirect way, a larger savings balance could lead to a higher credit score.

Also, reducing credit card balances could help your credit score improve. If you have a healthy amount of savings, taking some of that money and using it to pay down existing balances could lead to a boost in your credit score.

A higher credit score could make it easier to sign loans at affordable rates, qualify for these great credit card offers, and enjoy other perks. But it’s important to know what actions on your part will and won’t have an impact on your credit score. You also need to avoid mistakes that could be dragging your credit score down without you knowing it, like intentionally carrying a balance on your credit cards.

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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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Have you held off on joining Costco up until now? Read on to see why it could be a great time to sign up. [[{“value”:”

Even though many of us are still enjoying the fall leaves and weather, the winter holidays will be here before we know it. So at this point, it’s time to start strategizing about ways to keep more cash in your savings account while making your holiday purchases. And one option you may want to consider is joining Costco.

A Gold Star membership at Costco costs $65 a year. An Executive membership costs double at $130, but it comes with the benefit of 2% cash back on the purchases you make.

If you’ve never been to Costco, you may be wondering whether you’ll truly save money on the holidays by joining. But here’s why you might.

1. You can buy gift cards for cheap

Gift cards make a great holiday gift because they’re easy to transport and they don’t require a lot of brainwork. If you’re not a regular Costco shopper, you may not be aware that the store sells gift cards below their face value. But that’s a key benefit of getting a membership.

As just one example, right now, you can buy four $25 IHOP gift cards at Costco for $79.99. If you have four people you want to give a nice gift to, you’ve just saved yourself $20 compared to buying those gift cards from the restaurant directly.

And it’s not just restaurant gift cards you’ll find at Costco. You can buy gift cards for gaming sites, movie theaters, and more.

2. You can find affordable gift baskets

When you’re not sure what gift to give for the holidays, you usually can’t go wrong giving the gift of food. Not only can it be a treat for your recipients, but eventually, it’s something that’ll get used up, sparing them the burden of having to store new items in their homes permanently.

Costco’s gift baskets run the gamut from candy and sweets to fruits and nuts. And if you use the right credit card, you can save even more on gift basket purchases from Costco. Click here for a list of the best credit cards for Costco.

3. You can feed your family delicious holiday meals for less

Whipping up delicious holiday meals can be more than just time-consuming — it can also be expensive. But that’s another area where your Costco membership comes in handy.

At Costco, you can buy many of your holiday groceries in bulk so you’re spending less per ounce. Need baking supplies? Costco’s got them. Want to skip the baking and outsource your pies and cakes? Just head to Costco’s bakery, where you’re apt to find a great selection at prices that are considerably lower than your local bakery.

And if you can’t fathom the idea of having to wash dishes after every holiday gathering, Costco can help you stock up on paper goods on the cheap. As just one example, at Costco.com, you’ll pay $18.49 for a 360-count of plastic cutlery. That’s even better than Amazon’s price of $21.99 for the same quantity.

A Costco membership might help you pull off a festive holiday season for less money this year. So it pays to consider joining. And if you find you aren’t saving as much as expected with your Costco membership, just visit customer service to cancel for a full refund. It’s really that simple.

Top credit card to use at Costco (and everywhere else!)

We love versatile credit cards that offer huge rewards everywhere, including Costco! This card is a standout among America’s favorite credit cards because it offers perhaps the easiest $200 cash bonus you could ever earn and an unlimited 2% cash rewards on purchases, even when you shop at Costco.

Add on the competitive 0% interest period and it’s no wonder we awarded this card Best No Annual Fee Credit Card.

Click here to read our full review for free and apply before the $200 welcome bonus offer ends!

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. The Motley Fool has positions in and recommends Amazon and Costco Wholesale. The Motley Fool has a disclosure policy.

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It’s harder to find 5% CDs. Here are some alternative options for putting your money to work. [[{“value”:”

For months on end, CDs seemed like a great deal. After all, who wouldn’t want a virtually risk-free 5% return?

But the days of 5% CDs are pretty much over. You may get lucky and find a random CD that’ll still give you 5% on your money. But CD and the best savings account rates have fallen in recent weeks following the Federal Reserve’s mid-September rate cut. And since the Fed is expected to make more rate cuts over the next year, it’s fair to say that we won’t be seeing 5% CDs again anytime soon.

Of course, this doesn’t mean CDs have suddenly become a terrible deal. Many are still paying upward of 4%. If you have money you want to lock away in the bank for a year or two, a CD isn’t a bad option at all. Click here for a list of the best CD rates available today.

However, you may want to look outside of a CD now that rates are lower. Here are two solid options to consider.

1. A savings account

Today, a savings account won’t give you a higher interest rate on your money than a CD. If anything, you’re generally looking at earning less.

But one perk of a savings account over a CD is flexibility. With a CD, you have to commit to a preset term. And withdrawing your money early generally results in a costly penalty.

With a savings account, you can take withdrawals whenever you want. And that flexibility can be worth a lot.

In the coming year, borrowing rates are expected to fall in line with the Fed’s rate cuts. You may find yourself able to jump on a home-buying opportunity once mortgage rates settle down. With a savings account, you can withdraw funds for a home down payment at any time, whereas with a CD, you might get stuck waiting for it to mature and lose out on an opportunity.

2. A brokerage account or IRA

If you’re upset that you missed the boat on 5% CDs, how does a 10% return on your money sound? That’s the S&P 500’s average annual return over the past 50 years. And while past returns don’t guarantee future results, if you load up on stocks for a long period (say, 10 years or more), there’s a good chance you’ll enjoy similar returns in your portfolio.

So instead of putting your money into a CD now that rates are lower, open a top-rated brokerage account so you can start putting your money to work. A taxable brokerage account, like a savings account, gives you the flexibility to add or withdraw funds whenever you want.

However, if you’re interested in investing for the purpose of funding your retirement, consider opening an IRA instead. With an IRA, you can get a tax break on your contribution for extra savings.

That said, IRAs impose penalties for withdrawing your money before you reach age 59 1/2. Before you commit to an IRA, ensure you’re willing to wait that long. Click here for a list of the best IRAs to open.

And if you’re curious to know what sort of growth you might be looking at in a brokerage account or IRA, say you’ve got $5,000 available today. If you invest it at a 10% return over the next 30 years, it’ll be worth about $87,250.

You don’t have to completely write off CDs just because 5% rates aren’t available anymore. But you may also find that a savings account, taxable brokerage account, or IRA makes a lot more sense 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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A high credit score is more valuable than many people realize. Discover how building your credit could save you thousands of dollars. [[{“value”:”

Your credit score is a rating of how likely you are to repay money you borrow. If you have a high score, you’re considered to be a low risk as a borrower. Anything above 700 is fairly high — the most widely used scoring systems range from 300 to 850.

Your credit score can affect your life in many ways, and there are many ways a high credit score could save you money. A few benefits, in particular, could save you thousands of dollars.

Better credit card opportunities

When you’re starting out with credit, your credit card options are limited. The cards you’ll be able to get will be light on benefits, and you may need to pay a security deposit just to open a credit card. Most starter credit cards also don’t have much to offer in terms of rewards, bonuses, or other benefits.

With a high credit score, the card options get much better. Credit card companies are interested in earning your business, and they pull out all the stops with their top travel rewards cards and cash back cards. Here are a few examples of credit card features you can get when you have a high credit score:

Sign-up bonuses worth $200 or moreHigh rewards rates on your purchasesA 0% intro APR to avoid interest chargesComplimentary purchase and travel protections

If you have a high credit score, ensure you’re taking advantage of it. Click here to see our curated list of the best credit cards and open one today. You’ll find cards with all those features on the list above — and much more.

Lower interest rates on loans

A higher credit score means you can get lower interest rates when borrowing money. But a lot of people don’t realize just how much of a difference it makes.

Let’s look at one of the most popular types of loans as an example: the 30-year mortgage. On a 30-year mortgage for $300,000, a high credit score could save you over $50,000. Here’s a look at mortgage costs depending on your FICO® Score (the most widely used type of credit score by lenders), based on data from MyFICO.

Cheaper auto insurance

In most states, insurance companies are allowed to use your credit score to set your premiums. Drivers with high scores get cheaper rates, while drivers with low scores are punished with more expensive auto insurance. It’s a controversial practice, but studies have found that people with low credit scores file more insurance claims on average.

We’re not just talking about an extra $5 or $10 per month, either. Drivers with poor credit pay over twice as much for car insurance as drivers with excellent credit. Here’s the average amount each group paid for auto insurance in 2023 and the national average, according to data gathered by The Motley Fool Ascent:

National average: $3,017Drivers with excellent credit: $1,947Drivers with poor credit: $4,145

Quite a few factors go into your auto insurance rates. But all other things being equal, a high credit score could potentially save you $1,000 to $2,000 or more.

How to get a high credit score

Your credit score is based on your track record of borrowing money. To build credit, you need to borrow money and pay it back on time.

You could do this with either a credit card or loan. Credit cards are generally the better option, because you don’t need to pay interest when you use them. If you pay your card’s full statement balance each month, you won’t be charged interest on your purchases.

Here are a few more tips to follow to build your credit:

Use a credit monitoring service to keep track of your score.Don’t overspend on your credit cards — keep your balance under 30% of your credit limit.Always pay your bills on time.Review your credit report at least once a year for errors.

It takes a little work to get a high credit score, but the end result is well worth it. Good credit can make life much easier, and as you saw, it can also save you a lot of money.

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Click here to read our full review for free and apply in just 2 minutes.

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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