Use these strategies to help you trim the fat from your spending. Ground Picture / Shutterstock.com
If you have taken a pay cut, lost a job or gotten hit with high bills, you’re probably looking for ways to save money ASAP. From your cellphone to your grocery bill, here are strategies for tightening your belt right now.
You might kick yourself for opening a CD in a few different scenarios. Keep reading to learn how you can avoid CD regrets. [[{“value”:”
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It’s really tempting to invest in certificates of deposit (CDs) right now. CDs are really low-risk investments because they’re FDIC-insured. That means up to $250,000 of your cash is protected in the event of bank failure. CDs are also offering great rates, with many providing yields above 5.00%.
But while there are some big benefits to buying CDs, they aren’t the right investment for everyone. Here are two reasons why you might end up regretting your CD investments.
The biggest reason you could regret buying a CD is because you find yourself needing to take out your money before the CD matures.
You have a ton of options for CD terms. The most commonly available CDs come with three-month to five-year terms, but there are many different term lengths to choose from. Some banks even offer 1-month CDs. What they all have in common, though, is that you must commit to leaving your money invested for the duration of the term.
If it turns out you can’t keep your funds invested, there are consequences. You’ll likely get hit with a penalty equal to a certain number of days of interest. This could range from seven days of simple interest to 365 days of simple interest, depending on the terms and conditions of your CD.
If you get stuck paying this penalty, you could be left with huge regrets since you’ll lose some of your gains. You could even potentially lose some of your principal if you have to take money from the CD before you’ve earned enough to cover the penalty. To avoid this, be sure you don’t commit to buying a CD unless you’re 100% confident you’ll be able to leave the money alone for the duration.
You might also regret opening a CD if you invest money that really should be in the stock market and you miss out on the returns you could have earned.
See, the stock market is typically going to provide a better return on investment than a CD will, at least over the long term. You can invest in an S&P 500 index fund and pretty consistently expect to earn a 10% average annual return over a period of several years or longer. That’s much better than the return you’ll get from any CD.
The only reason not to open a brokerage account and put your money into the market to get these better rates is because there’s a risk of loss. This risk goes up if you have a short investing timeline. You don’t want to buy stock shares at a bad time, have to sell to get your money out, and not be able to wait for the market to recover. You could lose a lot of money if you have bad market timing and don’t have at least a few years to wait for a recovery.
If you have money you’ll be able to leave alone for a few years, though, then you should put it into the market instead of a CD to get those higher rates. Otherwise, you could end up regretting limiting your ROI and missing out on potential gains.
Fortunately, you can avoid these two big regrets by thinking carefully about your options to grow your money. If you will need that cash on an undetermined timeline (say, for unplanned expenses), or won’t need it for a while (say, you need it for retirement), a CD simply is not the right place for it to be.
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Costco has great deals and opportunities for brand-new homeowners. Check out one writer’s best tips for maximizing your visits to the warehouse club. [[{“value”:”
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So, you’re a first-time homeowner and you’ve been blessed with a trip to Costco — what a combination. If it’s also your first time at Costco, you’re really knocking out a bunch of firsts this year. But before you get too excited, remember you can always go back to Costco again and again. It’s not a one-and-done scenario, so no need to buy out the whole store today. Here’s what to know before you check out Costco.
I know, I’m a total spoil-sport. But here’s the thing with Costco: It’s huge. Even the smaller stores are massive, and in all of that, you may very well overlook the item you’re after. It doesn’t hurt to take a peek online at what kinds of glorious goods your local shop is offering before you pop in.
This also allows you to plan your trip, including what you want to look at, consider, and maybe even buy. Also a great time to set a budget for your shopping so you don’t completely bust the bank, especially if you’re there to furnish your new home. While you’re at it, download the Costco app so you can find whatever you need.
If you’re at Costco for groceries, snacks, lawn furniture, new plants, tools, and dog treats, you’re going to be there a while. You need a plan. Non–shelf stable foods like fruits and frozen goods need to be the very last things you pick up, and plants are easy to crush under other Costco items, so they need to be next to last. Tools, furniture, treats, and the like can be first stops.
At most stores, making this much of a plan would be a bit of overkill. But at a Costco, there’s a real risk that if you get the frozen pizzas before you look at lawn furniture, you’ll be taking home a soggy, thawed pizza. Choosing lawn furniture is serious business that should not be rushed.
As a first-time homeowner, you may be looking for a lot of items to go into your home — anything from closet organization to appliances or televisions, and you need to know how big they are before you arrange to have them delivered or you take them home on your own. Nothing is more embarrassing than to have to bring a refrigerator back because you can’t get it through the front door.
Measure the space where your items will go, measure the size of the openings they have to pass through, write it all down, and then compare these notes to the measurements of the items you’re shopping for at Costco. My Costco Find of the Century many years ago, a 70-inch UHD television, fits just between my thermostat and the edge of my front door. There is no room for error there. If I hadn’t measured and it had been literally any bigger, I’d have been doing the walk of shame myself.
Normally, the last thing I’d advise anyone to do is open a new credit line after just closing on a mortgage, but you’re going to need stuff — and maybe a lot of it, depending on the size of your home and what was left by the previous owners. Curtains, blinds, and storage systems are totally non-negotiables in my mind, and they can be very expensive to acquire, but will last for years if chosen well.
RELATED: Best Credit Cards for Costco
If you know you can handle it responsibly, it’s OK to take out a credit line to furnish your house properly. And if you do it at Costco, well, you’ll also be saving money on stuff you might buy elsewhere at a higher price. Don’t forget that you can also buy the tools you need to install said items at Costco, so leave some wiggle room for that. A power drill is a friend after you’ve installed three or four sets of blinds and curtains into unyielding wooden window trim with hand tools.
Your trip to Costco as a first-time homeowner is going to be very different from the last one you had as a renter. You’ll see products you never bothered to notice before because you couldn’t hang items on the wall, or you had zero need for a telescoping ladder because your apartment had a maintenance person.
You’ll also start to understand the enormity of the possibilities before you. For example, you can now buy a ton of freezer goods AND a freezer to keep grocery shopping trips to a minimum and save yourself more time in the long run.
There’s no end of potential here. Just make sure to make a budget and stick to it, or your Costco trip may inspire you to get a job working in the bakery just for the discount.
If you’re shopping with a debit card, you could be missing out on hundreds or even thousands of dollars each year. These versatile credit cards offer huge rewards everywhere, including Costco, and are rated the best cards of 2024 by our experts because they offer hefty sign-up bonuses and outstanding cash rewards. Plus, you’ll save on credit card interest because all of these recommendations include a competitive 0% interest period.
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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.JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Kristi Waterworth has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and JPMorgan Chase. The Motley Fool has a disclosure policy.
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You’ve finally retired — but it’s still crucial to manage your investments to fund your lifestyle. Read on for a few investing blunders to steer clear of. [[{“value”:”
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If you’ve recently retired, you’re likely enjoying your newfound freedom and are seizing the opportunity to do the things you’ve always wanted, whether it’s traveling or picking up new hobbies. It takes money to fund a comfortable retirement lifestyle, so it’s important to keep your savings invested as a retiree. That way, your nest egg can continue to grow even while you’re withdrawing from it.
In short, it’s important to kick off retirement with a solid investment strategy. And it’s super helpful to avoid these mistakes in that regard.
When you’re saving for retirement, it’s a great idea to load your IRA with stocks. The market’s average annual return over the past 50 years has been 10%, and you need growth like that to turn your savings into a large sum over time.
But while it’s smart to invest the bulk of your savings in stocks before you’re retired, once you’re retired, it’s time to scale back. If you keep the bulk of your nest egg in stocks, you’re putting your savings at risk.
What if the market crashes at some point, only you need to keep accessing your portfolio for income? Suddenly, you’re looking at permanent losses. A better bet is to move away from stock investments to a large degree.
You may feel comfortable keeping around 50% of your portfolio in stocks during retirement, and that’s certainly not a terrible idea. You may even go a little higher, depending on your appetite for risk. But you don’t want 90% of your savings or more in the stock market at a time when you’re actually using the money.
Just as you don’t want to go all in on stocks as a retiree, you also don’t want to move away from stocks entirely. You need your portfolio to keep growing during retirement, so it provides the maximum amount of income for you.
You can think about your own risk tolerance when deciding what percentage of your assets to keep in stocks. Or, you can use a rule of thumb that has you subtracting your age from 110 to land on the right percentage. If you’re 65 years old, that would have you keeping 45% of your portfolio in stocks. But if that number sounds too high and will cause you stress, go a bit lower.
It’s generally a good idea to maintain a diverse portfolio of investments — and that extends to retirement. But in the course of branching out, you don’t want to take on too much work — or too many expenses.
You may be thinking of buying a rental property in retirement. The monthly rent you collect can serve as income, and through the years, the property you buy has the potential to gain value. You may also be up for the challenge of being a landlord as a new retiree because you’re thinking you finally have the time to take on that role.
But owning a rental property could be more work than you’ve bargained for. And if you’re older, you may not be up for all of that work.
It’s one thing to have the time to do home maintenance tasks like cleaning a home’s gutters. It’s another thing for your 67-year-old self to balance on a tall ladder without risking injury.
Also, rental properties cost money to maintain. In retirement, you may need all of the income you can get your hands on. So it may make more sense to favor investments that don’t cost money to own (aside from the cost of buying those assets initially).
The right investment strategy could make your retirement stress free and enjoyable. So do your best to avoid these unfortunate mistakes from the start.
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Sam’s Club is one of the most popular retailers in the world for good reason. However, these five signs may mean it’s time to give up your membership. [[{“value”:”
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Breaking up is hard to do, even with a retailer. This is especially true if you’re a long-time customer — or, in this case, a long-time member. Still, the day may come when you decide you’re wasting money on an annual Sam’s Club membership. If any of the following signs feel familiar to you, that day may be today.
Whether your nearest Sam’s Club is a fair distance from your house or you rarely feel inspired to shop there, you may have already considered allowing your membership to lapse. After all, a Sam’s Club membership makes the most sense for those who shop there regularly. If you find yourself heading to Sam’s once a month or less, consider whether the amount of money you save making infrequent trips is worth the cost you’re paying to be a member.
One of the coolest things about Sam’s Club is also one of the biggest traps. There are so many new things to look at on each Sam’s run that it’s tempting to bust your budget by picking up items you don’t need. If you (like many people) consistently feel frustrated with yourself because you bought all kinds of things you could have lived without, it may be time to weigh the value of membership. Do you end up spending more than you would spend if you weren’t a Sam’s Club member?
Price comparison apps have been a game changer for millions of shoppers. You no longer have to assume you know where to find the lowest prices on the items you need because a price comparison app will show you precisely where to find the best deals.
Let’s say you regularly pick up soft drinks while at Sam’s Club, but your local grocery store routinely runs a sale on your favorite drinks. Take a closer look at your “regular” Sam’s Club purchases and decide how many of those can be purchased elsewhere at a lower per-unit price.
There’s more than one potential savings when it comes to a Sam’s Club membership. Before determining whether your membership is still worth the price you pay, you need to ask yourself two questions:
Am I routinely getting the lowest price on the everyday items I need, or could I protect my finances by snagging a lower price elsewhere?Am I using membership perks — like travel discounts — regularly enough to justify membership?
If the answer to both questions is “no,” it could be a sign that you’re wasting money.
Each shopper is unique. While one may love the thrill of the hunt inside a Sam’s Club, another may truly dread everything, from crowded parking to oversized shopping carts and crowded warehouse stores.
Only you know which camp you fall into. If the thought of spending time inside a warehouse store makes you shudder, it’s definitely time to rethink your membership. On the other hand, if you find the entire experience (or most of it) delightful, you know you’re in the right place.
The nice thing about allowing a membership to lapse is that you always have the option of renewing it if you decide you miss the Sam’s Club experience.
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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 natural to want to eliminate debt. But read on to see why building your emergency fund should be your priority. [[{“value”:”
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Would it surprise you to learn that total U.S. debt increased to $17.1 trillion in 2023, according to Experian? I’m not particularly shocked.
Of course, not all of that is credit card debt. Credit card balances comprised $1 trillion of that total. Mortgages, by contrast, made up over $11.5 trillion.
But while you may not be in such a rush to pay off your mortgage, especially if you locked in a competitive interest rate on that loan, you may be very eager to whittle your credit card balances down to $0. And that’s great if you can pull it off.
But if you’re not all set with an emergency fund, then that should actually be your primary financial goal this year — even if your credit card is charging you boatloads of interest by the day.
As of August of 2023, 63% of working Americans weren’t equipped to cover an unplanned $500 expense, according to SecureSave. If you’re part of that statistic, it means your next unexpected bill could drive you even deeper into debt. And that’s why building an emergency fund should be your top financial focus this year.
Simply put, if you don’t build up emergency savings, you risk landing in even more debt when future surprise expenses arise. And that’s not good these days, given how expensive it’s gotten to borrow following the Federal Reserve’s numerous interest rate hikes.
Also, you can’t automatically assume that you’ll be able to borrow money when you need to. What if you’re almost maxed out on your credit card limit and you encounter an unplanned $700 bill? If you only have $300 left available on your card, you’ll need another way to come up with the remaining $400. And that’s why your emergency fund should take priority over paying off debt — even though you may be itching to shed your debt for good.
Your minimum goal in building an emergency fund should be to accumulate enough cash in your savings account to cover three full months of essential living costs, like rent, car payments, food, and utilities. But if you’re able to save up to six months’ worth of bills, you’ll have even more protection in the event of a costly home repair or an extended period of unemployment.
Of course, if you’re starting with little to no money in savings, you’re not going to magically build a three-month emergency fund in a matter of weeks. It will more likely take months or years, and that’s okay. The key is to work toward that goal as best as you can.
That said, you do want to get there sooner rather than later. So one option is to take on a second job temporarily to boost your income and free up more money for your savings. If you’re able to earn $15 an hour at a side gig and you manage to work 10 hours a week, that’s $600 a month coming your way, or $7,200 after a year. Depending on your expenses, that may be more than enough to cover your essential expenses for three months.
Being in debt can be stressful on top of being costly. So I totally get why you’d want to shed your debt as soon as possible.
But trust me when I say that you’re better off focusing on your emergency fund first. It could be your ticket to avoiding future debt that’s more expensive than the debt you’re currently juggling. And remember, once your emergency fund is complete, every extra penny that comes your way can be used to chip away at your debt until it’s gone for good.
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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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