Money Management

Costco is a fantastic place to buy clothing for kids. See why you shouldn’t skip the warehouse club’s clothing section on your next visit. [[{“value”:”

It’s not exactly a secret that raising kids costs money. And as a mom of three, I can tell you that some months, it seems like no matter what I do, my credit card bills just keep growing.

Part of the expense of raising kids is making sure they’re properly clothed. That can be a challenge during growth spurts, when it’s hard to find the right size. It can also be a challenge in general because while adult clothing often (though not always) comes in a variety of sizes, with kids’ clothing, you’re often limited to extra-small, small, medium, large, and extra-large. When your child is in between, finding the right fit becomes a guessing game.

I tend to order a lot of my kids’ clothing online because I don’t have the patience to shop for it in person. But since I generally go to Costco weekly for groceries and supplies like toilet paper, I typically make a point to see what kids’ clothing is in stock. And when I find something that meets our needs, I almost always scoop it up.

If you’re a Costco member, I suggest you buy kids’ clothing there too for these reasons.

1. Costco’s prices are great

Let’s face it — kids tend to destroy their clothing or leave it in random places to get lost forever (think soccer fields, basketball courts, or friends’ houses). For this reason, plus the fact that kids only tend to stay in the same size for so long, I like to spend as little as possible on children’s clothing. And I find that Costco’s prices often can’t be beat.

For example, Costco is selling a two-piece Adidas kids’ pants and hoodie set for $21.99 online right now. Amazon has a similar set for $39. That’s a huge difference. I’d rather spend $17 less on an item that will last for, in a best-case scenario, a single season, and in a worst-case scenario, only a couple of weeks.

2. There’s a generous return policy

If you’re a parent, you’re well aware that sometimes you buy kids’ clothing with the expectation they’ll grow into it by a certain point. Or you might buy something you think your kids will be happy with only to be told it’s the ugliest garment to ever hit a store’s shelves.

The nice thing about buying clothing at Costco is that you can basically take it back at any point for a refund if it’s in good condition. So let’s say you buy some swimwear in August because it’s on clearance thinking it’ll fit your child the following summer, only it doesn’t. At that point, it’s not too late to get your money back.

3. You can score cash back on an Executive membership

Costco’s Executive membership costs twice as much as a basic one — $130 a year versus $65. But for the extra $65 a year, you get to earn 2% cash back on your purchases. So in the course of buying kids’ apparel at the store, I add to my pile of cash back. And that’s on top of the cash back my credit card gives me.

If you combine an Executive membership with the right credit card, you can rack up major rewards at Costco, too. Click here for a list of the best credit cards for Costco shoppers.

Of the various child-related purchases I make regularly, clothing is, frankly, one of the most annoying in my book. It pains me to spend a lot of money on stuff I know is going to get outgrown, lost, or destroyed in short order.

Thankfully, Costco helps me keep my costs to a minimum by offering low prices and making it so I’m not stuck with purchases that don’t work out. And the cash back on my Executive membership only sweetens the deal.

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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Most experts suggest having six months’ worth of expenses in savings. But there’s more to the story. Keep reading to learn more. [[{“value”:”

The typical 40-year-old is 15 or more years into their working lifetime, and many people reaching key milestone ages like 40 wonder how they’re doing financially. Specifically, many wonder whether they have enough money in savings — but how much is enough?

Note: It’s important to point out that this is separate from retirement savings, which should be held in a tax-advantaged account like a 401(k) or individual retirement account (IRA).

Let’s take a closer look at how much cash in the bank a 40-year-old should have.

What are you saving for?

By age 40, a good goal to aim for is six months’ worth of your living expenses in a readily accessible savings account. Many experts refer to this as your emergency fund, and the idea is to have enough to get you through a job loss, unforeseen healthcare costs, or pretty much anything else life throws at you.

In addition to having six months’ worth of expenses in emergency savings, it’s wise to keep some additional money in a non-emergency savings account. This is to cover costs like higher-than-usual utility bills or small home maintenance expenses.

The point is that these are examples of costs that are unexpected, but aren’t exactly financial emergencies. It’s important to keep your main emergency savings in a separate place from money that you could use for day-to-day expenses.

Want to maximize the interest from your emergency savings? Check out the top online savings accounts right now.

How much do you need in savings?

To be clear, there is nothing wrong with the six-month guideline. Regardless of your specific circumstances, if you have six months’ worth of expenses in a savings account that is separate from your retirement savings, you’re in pretty good shape to handle the overwhelming majority of unforeseen situations.

However, keep in mind that general rules of thumb don’t take your circumstances into account. Specifically, here are some factors to keep in mind when setting your own savings targets.

Family and marital situations

Are you married? It’s less likely that both spouses would be unemployed at the same time. And if you have children, be sure to factor six months of their expenses into your goal.

Employment specifics

Do you have excellent job security, or are you new in your role? Do you own your own business? Is your income consistent, or does it change from month to month?

For example, if you’ve been a public school teacher for 20 years in the same district, your likelihood of an extended period of unemployment is far lower than someone who just started doing freelance consulting work.

Other assets

The main goal of keeping money in savings is to avoid borrowing money or dipping into your retirement accounts when the unexpected happens. But if you have other assets, such as non-retirement investment accounts, a second home, investment properties, or other assets that would be fairly easy to sell, you might not need quite as much emergency savings as someone who doesn’t.

This isn’t an exhaustive list of considerations, but the point is that general guidelines are just that — general. It’s important to use them as a starting point, but to adapt them to your own life.

The bottom line

The key takeaway is that the answer here isn’t an easy one. There isn’t a specific number that every 40-year-old should have in savings.

Having said that, I’m a fan of the guidelines described here, which I would call a “customized six-month rule.” However, if you’re worried about having enough savings, the best course of action is to contact a financial planner who can help evaluate your situation and give a personalized recommendation.

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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 hard to predict the exact time to refinance your home loan. Read on for some tips to help you figure out when it makes sense. [[{“value”:”

If you’ve been paying any attention to the financial news, you know that the Federal Reserve Board chose to lower the federal funds rate in September. Although this doesn’t have a direct impact on mortgage rates, it does often nudge individual banks into lowering them. And because of this, mortgage rates tend to go down and people start to think about refinancing their mortgages.

So, when should you start your mortgage refinance process, now that it looks as if rates may be on the downhill slide? It’s a simple question with a really difficult answer.

When you bought your house matters

Although I’d like to just say you should probably wait until December or January for the best rates, it’s not that easy. When you bought your house really does matter a lot.

Obviously, no one with a sub-5% rate is going to consider refinancing since they’re unlikely to find a lower rate right now. But if you bought in November 2023, for example, you could have a rate of around 8%, as opposed to if you bought in February of 2023, when your rate might have been just above 6%.

With the average 30-year fixed rate mortgage sitting at 6.32% for the week of Oct. 10, 2024, one of those makes sense strictly based on rate and the other really does not. However, if you’re looking for a cash-out refinance, reaching out to one of these refinance lenders may still be the right move. I have been considering my own cash-out refi for a while in order to do some big projects around the house.

How to know it’s time to refinance

Timing is everything in refinancing. If your refinance won’t either cut your payment down significantly or help you reach a bigger goal like a shiny new bathroom, you need to wait until 2025 to even consider talking to a lender.

According to the CME Group’s FedWatch tool, your best bet at bottom-scraping rates is probably going to come around the June 2025 meeting of the Fed, when the federal funds rate is forecasted to drop to about 3.75% from today’s 5.13%.

Again, you can’t assume a direct relationship between 30-fixed rate mortgage rates and the federal funds rate, but at the moment, the spread (the difference between them) is about 1.20%, depending on who you ask. So, if that spread holds (it may not), and the federal funds rate goes down to 3.75%, you’d be looking at a mortgage refinance rate of 5% or thereabouts.

A 5% mortgage rate is pretty respectable, and going from 6.25% to 5% is a remarkable jump. Let’s look at how much that can save you in monthly payments.

Let’s assume a few things: You bought your house in April 2023, when rates were around 6.25%. Your median-priced home cost about $415,000, and your 5% down payment was $20,750. That means you’d have financed $394,250, and your principal and interest payment would be $2,427. As of Jan. 1, 2025, you’d still owe $385,971.

I’m also going to show you the break-even point, based on refinance closing costs of 5%.

So, if you do this fairly simple calculation, and you know when you think you’ll move, you can decide if it’s a good time to refinance or if you should wait for a slightly lower rate. Because, let’s face it, you have to be in a particular phase in your life to be absolutely certain you’ll be in your home for another 14 years, but a lot of people could safely gamble that they may stay another four or five years.

Start your mortgage refinance process when this happens

Although we don’t know for sure when mortgage rates will drop or bottom out, we can say a few things about them for certain: They’re likely to get much lower in 2025, and if you can shave a full percentage point off of a relatively new mortgage, it will save you a lot of money in interest payments, even if you only stay in the house for a few more years.

Start your refinance process when average interest rates are a half to a full percentage point below your current interest rate. Your mortgage lender can tell you exactly where you are at any given time, and wait to lock your rate accordingly (to a point). Waiting for a lower than 5% interest rate may leave you waiting a long time, and wasting a lot of money on interest in the meantime.

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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.Kristi Waterworth has no position in any of the stocks mentioned. The Motley Fool recommends CME Group. The Motley Fool has a disclosure policy.

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Sometimes, a higher membership fee is worth paying. Read on to see why this Costco fan won’t contemplate a switch to a lower-priced warehouse club. [[{“value”:”

As a family of five, we go through a lot of food in my house — so much so that I often need to pop over to my local supermarket to replenish multiple times during the week. That’s why a warehouse club membership makes sense for us. The money we save by buying food in bulk more than makes up for the cost of joining a warehouse club.

In my area, I have two options — Costco and Sam’s Club. I’ve been a loyal Costco member for 18 years. But it’s hard to overlook that a Sam’s Club’s membership would cost me $20 less annually.

Costco recently raised the cost of its Executive membership to $130 per year. At Sam’s Club, a Plus membership is $110. Both memberships offer 2% cash back on purchases, which is something I like to take advantage of given my annual spending.

But while the idea of saving $20 a year on a warehouse club membership appeals to me in theory, I’m not looking to make a switch anytime soon. Here’s why.

1. Costco is more convenient

Getting to Costco takes me about 15 minutes on average. To get to Sam’s Club, it’s more like a 25-minute drive.

You might think the extra 10 minutes each way, or 20 minutes round-trip, isn’t a big deal. But I can tell you that it is.

I do a Costco run almost every week. The only exceptions are when we’re away on vacation or something like that. Saving 20 minutes per week is huge because my schedule is jam-packed and I often struggle to find enough hours to work as it is. And since I’m self-employed, getting back time in the form of a shorter trip to Costco has monetary value.

Let’s say I save myself 20 minutes a week over 40 weeks. That’s a little over 13 hours a year. If I spend those 13 hours working, I can earn well more than the $20 extra I’m paying for Costco.

In fact, I’ll be perfectly honest and say that based on my current rates, I can often make back the $20 extra with a single 20-minute session at my desk. So from that perspective, sticking with Costco is an easy decision.

Plus, because Costco is closer, I spend less on gas to get there. I might use an extra half-gallon of gas on a round trip to Sam’s Club because that’s how my gas-guzzling minivan rolls. If we put the cost there at $1.50, and I do 40 round-trips a year, I’m spending $60 extra. Why should I spend $60 more to save $20 on a membership fee?

2. Costco’s products are a sure thing in my household

A big way to waste money at a warehouse club store is to buy products in bulk that your family members don’t end up eating. Because I’ve been shopping at Costco since before my kids were born, they’re familiar with a lot of the store’s products. And they’re fans of many of the things I buy. If I switch to Sam’s Club, I’m taking the risk that my kids won’t enjoy the products I purchase.

Even if there’s nothing wrong with those products, children tend to be picky. Mine have been known to reject boxes of Aldi granola bars on the basis of the packaging alone (so there goes that money-saving tactic). It’s not worth it to me to save $20 a year on a warehouse club membership when I might throw out more than $20 worth of food due to sheer pickiness and waste.

A decision I’m more than comfortable with

I won’t pretend that I’ve never thought about making a switch from Costco to Sam’s Club to save money on the membership fee. But when I crunch the numbers, ditching Costco for Sam’s Club doesn’t make sense.

Also, at this point, I’ve developed my own strategies for shopping at Costco that help me keep my costs down. Those include using the right credit cards for big rewards. Click here for a list of the top credit cards for Costco members.

If you have a Costco and Sam’s Club store within equal driving distance from your home, and you have a household of eaters who are a lot less picky than mine, then you may decide to choose Sam’s Club for the lower-cost membership. But if you’re in a similar boat to me, think about what you may be giving up by making a switch, whether it’s time, money, or your sanity in the form of having to negotiate with your kids to eat items in different packaging. You may find that you’re better off sticking with the warehouse club you already know and love.

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.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 know how Costco works. Read on for a few rules you may not be aware of. [[{“value”:”

The decision to join Costco is an obvious one for some people. You may find that the benefit of saving money on groceries and household essentials outweighs the cost of a membership.

But if you’re going to shop at Costco, you need to know the rules. Here are a few that may surprise you — for better or worse.

1. Your Costco membership can be terminated at any time

Many people remain loyal Costco members for years. But you should know that your membership technically isn’t guaranteed.

As the store says on its website, “Costco reserves the right to refuse membership to any applicant, and membership may be terminated at Costco’s discretion and without cause.”

However, Costco makes a lot of its money from membership fees. And it wants more people shopping at its stores. Costco isn’t going to randomly take your membership away without a good reason, even though it states that it has the right to.

If you want to make sure your Costco membership isn’t revoked, don’t abuse it. For the most part, this means you should treat store employees respectfully, and you shouldn’t abuse the store’s generous return policy.

You can, for example, return a jacket you bought six months after the fact if you only wore it once or twice and realize you don’t like the fit. If that same jacket is tattered and stained because you wore it daily, and you try to get your money back, you risk having your membership revoked if you pull that sort of stunt repeatedly.

2. You can return partially eaten food, but you have to follow some guidelines

Costco stands behind all of its products. If there’s an issue with food you’ve purchased, you shouldn’t hesitate to take it back.

However, to get refunded for partially eaten food, you need to take back a reasonable amount of it. Generally, this means at least 50%.

Say you buy a six-pack of blueberry muffins and find that they have gone stale. If you return the package with five left, you shouldn’t have an issue getting refunded. If you bring back only two of the six muffins, you’re probably not going to get your money back.

3. You can cancel your membership at any time for a full refund

Costco doesn’t just stand behind its products — it also guarantees satisfaction with its memberships too. If you buy one and don’t get good use or savings from it, you can cancel for a full refund at any point.

This technically means you can shop at Costco for 364 days out of the year and then cancel, so you’ve gotten about a year of a Costco membership for free. But if you do that, don’t expect Costco to let you renew your membership right away. It’s likely that you’ll encounter a waiting period before being allowed to join again. And the length of that is at Costco’s discretion.

Chances are, though, you’ll get great value out of your membership as long as you use it regularly.

And if you double up with the right credit cards, you can eke even more value out of a membership. Click here for a list of the best credit cards for Costco shoppers.

4. You’re guaranteed to make back the cost of an Executive membership upgrade

It costs $65 a year to join Costco at the basic Gold Star level, or you can upgrade to an Executive membership for $130 per year. The Executive membership gives you 2% cash back on purchases, so if you do enough shopping at Costco, the upgrade pays off.

The risk, however, is not spending enough to get your $65 upgrade fee back and wasting money in the process. But Costco won’t let that happen.

One lesser-known feature of the Executive membership is that you’re guaranteed $65 back after a year. If you don’t make that money back naturally, you can downgrade your membership to a Gold Star one after a year, and Costco will pay you the difference.

For example, say you rack up just $50 back after a year of being an Executive member. When you downgrade, Costco will give you another $15 back so you’re not out so much as a penny.

Knowing how Costco works could help you make the most of a membership. And it might help you decide whether joining makes sense. Keep reading up on the warehouse club giant, because it never hurts to dig deeper into its rules.

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.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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Sure, an 850 FICO® Score gives you bragging rights. But read on to learn why it’s not necessary to get the perks of good credit. [[{“value”:”

It’s a safe bet that you don’t think about your credit score too terribly often — actually, it might be one of those things you avoid thinking about. This is a mistake, however.

Your credit score has a solid impact on your personal finances, and since it helps determine how much you pay to borrow money, it even impacts your budget.

According to research from credit bureau Experian, just 1.54% of Americans had a perfect 850 credit score as of Q3 2023. Do the math on that and you’ll realize that means 98.46% of us don’t have perfect credit. But that’s OK — and here’s why.

You can get the same benefits without a perfect credit score

Good news! According to that same Experian report, Americans with credit scores over 800 (and in some cases, in the high 700s) will get the same benefits as those with a perfect score. What are those benefits?

First and foremost, you’ll pay less to borrow money, because you’ll be offered the lowest interest rates by lenders. A high credit score indicates you’ve managed credit well in the past, meaning you maintained low balances on credit cards, paid your bills on time, kept accounts open for a long time, and didn’t open new ones frequently.

Getting a lower rate on a mortgage, personal loan, or auto loan could save you thousands of dollars on interest costs, so it’s worth boosting your credit score before you apply for a loan (more on that below).

Having good credit also means you’re likely to qualify for the best credit cards. Check out our favorite picks for travel credit cards and enjoy perks like lounge access, airline status, and more.

The other benefits of good credit shouldn’t be disregarded, either. In most states, auto insurers can use your credit score to set your premium — research from The Motley Fool Ascent found that in 2023, drivers with good credit paid less than half of what drivers with poor credit paid for coverage.

You might also face a credit check to get hired for a new job or to rent an apartment, and it would be very disappointing to lose out on those opportunities because of your credit.

Want better credit? Here’s how to get there

I can’t guarantee you a perfect 850 credit score — I’m a personal finance writer, not your fairy godmother. But if you lean on the following tips, you will see your credit score improve.

Check your credit reports

You can get these for free from AnnualCreditReport.com. Have a gander and see if there are accounts you don’t recognize, or late payments/delinquent accounts that are inaccurate. You can ask the credit bureau to remove them and you should see a jump in your credit score as a result.

Make on-time payments

If you’ve been a bit lax about paying your bills on time every month, this is your sign to get better. Payment history makes up 35% of your FICO® Score — it’s the biggest piece of the puzzle. Plus, paying on time means avoiding late fees, so you’ll save money too.

Pay down debt

This one is hard — I’ve been there. But having less debt to your name will save you money on interest costs and it’ll also boost your credit score by lowering your credit utilization ratio (how much credit you have vs. how much you’re using).

I saw my score jump by 100 points when I paid off all my high-interest debt, which really came in handy when I was applying for a mortgage earlier this year.

Open new accounts sparingly

Credit cards are tempting, with their slick rewards programs and spending credits. But for the benefit of your credit score, it’s best to limit opening new accounts to every six months or once a year.

Having perfect credit can certainly make you the envy of friends and neighbors — or perhaps the most insufferable person at Thanksgiving dinner. But it’s not a requirement to enjoy the perks of good credit.

If your credit score is in the upper 700s, great — you should be all set! If you’re not there yet, keep making those on-time payments and avoiding high-interest debt, and you’re likely to see a significant bump in your score.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

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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