Money Management

Canceling a Costco membership could put up to $120 a year back in your pocket. But read on to see why you may end up kicking yourself for that decision. [[{“value”:”

I’m the type of person who does not like wasting money. Because of this mindset, I make a point to review my various subscriptions once every few months to make sure I’m not paying for things I’m not using. You may decide to do something similar. And as a result, your Costco membership might land on the chopping block.

If you feel as if you’re not getting enough use out of that membership, then it could definitely pay to cancel it and save yourself the $60 or $120 a year you’re paying, depending on the membership you have. But before you do, recognize that you might end up sorely regretting that decision for these reasons.

RELATED: The #1 Strategy for Saving Money at Costco

1. Your grocery bills might soar

Costco’s bulk discounts can result in a lot of savings, especially for items you eat on a regular basis. In my household, for example, granola bars are consumed daily, so I’m constantly replenishing. I can get a 64-count box of granola bars from Costco.com for $11.99, costing me $0.22 per ounce. At my local supermarket, an eight-count costs $2.89, or $0.43 per ounce.

Of course, this is one example that’s specific to me. But before you cancel Costco, make a list of the groceries you buy from there regularly and look up their prices at your local supermarket. You may find that it’s worth keeping your membership just to save on a few staple items you eat all the time.

2. Your next vacation might cost more than necessary

Remember the days when you could book a domestic flight for under $250 without having to pay extra to pick a seat? Yeah, those days are long gone. But if you enjoy traveling, you may want to keep your Costco membership for the travel perks alone.

Costco’s travel packages are super competitively priced and often come with perks you won’t get by booking similar itineraries on your own, like resort or cruise ship credits. Plus, when you book through Costco, it’s like getting your own personal travel agent.

3. Your next electronics purchase may not come with the tech support and warranty you want

I love buying electronics from Costco because they come with a free second-year warranty and tech support. I’m someone who’s not so savvy when it comes to setting up laptops and TVs. I’m actually a bit clueless with technology, if I’m being honest. So it’s nice to know that if I need help (and my very tech-savvy husband isn’t in the mood to dish it out), I can call Costco.

If you cancel your Costco membership, you can easily find electronics elsewhere — and at competitive prices. But you may not get the free extended warranty or tech support Costco offers.

4. You might miss the cheap gas

I almost always try to time my Costco shopping to when my car needs gas. That’s because Costco has the cheapest gas in my town — by far.

If you’re used to filling up at Costco, you may find that you spend a lot more on fuel without a membership. And if you drive a lot, your gas savings alone might cover your membership fee.

Let’s say you drive 200 miles a week and typically get 25 miles to the gallon. That means you’re putting eight gallons a week into your car, or 416 gallons per year. If filling up at Costco saves you $0.15 per gallon, which it sometimes saves me, that has you paying $62.40 less per year. That’s $2.40 more than what a basic membership costs.

5. You’ll be hard-pressed to find a better lunch special

I can’t say that I’ve ever gone to Costco for the express purpose of grabbing a food court lunch. But it’s nice to be able to get a cheap meal on my way out the door.

If you cancel your Costco membership, you’ll also be giving up food court access, since the store no longer allows non-members to make food court purchases. In other words, goodbye, $1.50 hot dog and soda combo. Farewell, $9.99 giant pizza that some might say isn’t really pizza, but I find acceptable. You might miss those meals more than expected.

Okay, so clearly you’re not going to hang onto a Costco membership for the occasional food court treat alone. But for all of these other reasons, you may want to consider holding off on canceling. Or, before you do, at least do some number-crunching to see if the savings you’re getting throughout the year make you whole on your membership fee.

I would never tell anyone to continue paying for a service that isn’t useful. It goes against my very nature. But you may be surprised at how much value your Costco membership actually offers you when you dig a little deeper into your budget.

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

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. Maurie Backman 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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A new checking account can be well worth the effort to switch. Discover how to smoothly transition to a new bank with our guide. [[{“value”:”

Changing your checking account can feel like a major upheaval, particularly if you’ve been with the same bank for a long time. Interestingly, consumers typically stick with their checking accounts for an average of 17 years. Despite this loyalty, switching to a new bank can be a smooth process that is well worth the effort, especially if your personal finance needs have changed.

Whether you’re seeking better customer service, lower fees, or more convenient technology, the switch doesn’t have to be daunting. Here’s a streamlined guide to help you switch banks without a hitch.

Step 1: Find the right bank

The journey to a new bank account begins with identifying a financial institution that better suits your needs. Every bank and credit union offers its own set of features. Some might provide extensive ATM networks, exceptional online banking services, or more attractive interest rates. It’s important to consider what you value most — whether it’s lower fees, a robust mobile banking app, or access to physical branches.

Start by reviewing what different financial institutions offer and how these align with your banking habits. If you often use digital banking tools, look for a bank with a highly rated mobile app. Conversely, if you prefer face-to-face interactions, a bank with numerous local branches might be more your style. Remember, it’s about finding the right balance between convenience and costs.

Step 2: Choose your new account

Think about why you’re switching accounts to determine the best new account for your needs. Many banks offer various types of accounts — checking, savings, money market accounts, etc. — and each has specific features and fee structures. It’s helpful to create a list of the features most important to you, which might include low fees, high interest rates, or excellent customer service.

Step 3: Track your transactions

Before making the switch, take a thorough inventory of all the transactions in your current account. This includes everything from paycheck deposits to monthly payments for utilities and subscriptions, and even annual or semi-annual payments like insurance premiums.

Document transactions for the past year to ensure none are overlooked when you switch to your new account. This list will be crucial for setting up your new banking arrangements without disrupting your financial life.

Step 4: Open your new account

Opening your new account is easier than ever. According to FICO research, about 71% of Americans are comfortable opening a bank account digitally. You can start this process online by providing basic personal information like your Social Security number and current address. You’ll also need identification, such as a driver’s license or passport.

Once your application is approved, you’ll need to make an initial deposit. Some banks require a minimum deposit to open an account, so it’s wise to deposit enough to avoid any potential fees right from the start.

Step 5: Redirect your payments and deposits

After your new account is set up, begin the process of redirecting your automatic payments and direct deposits. This includes everything from your paycheck to recurring bills. You can usually update these online, or your employer’s human resources department can assist with redirecting your payroll deposits.

Remember to link any accounts you frequently transfer money to, such as savings accounts or retirement accounts. This can often be done through your new bank’s app or website.

Step 6: Close your old account — eventually

A word of caution: Don’t rush to close your old account. Once your new account is operational, keep it open for an additional statement cycle or two. This buffer period helps ensure you don’t miss any stray transactions that could lead to fees or penalties.

Once you confirm that all transactions are being processed through your new account, transfer any remaining funds and formally close the old account. Always get written confirmation of the account closure to avoid any issues with ghost accounts that might inadvertently reopen.

Switching banks might require some initial legwork, but the process is generally straightforward. By carefully planning and keeping track of all your transactions, you can ensure a seamless transition to a bank that better fits your financial needs and lifestyle. Remember, if you have any questions or concerns during the switch, don’t hesitate to reach out to the bank’s customer service department for assistance.

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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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Before you buy a CD, you need to make sure you’re getting a competitive rate. Learn more about this and other questions to ask before pulling the trigger. [[{“value”:”

So you’re thinking of buying a certificate of deposit (CD). That could be a great choice. CDs are offering impressive yields right now. But before you jump in, take the time to answer these three very important questions first.

1. Can I afford to tie up the money?

CDs require you to commit to investing for a period of time, referred to as a term. You have lots of choices when it comes to the term. You could opt for a short-term investment, such as a 3-month CD or a 6-month CD. Or you could opt for a longer-term investment, like a 5-year CD.

But whatever term you pick, you need to be sure you’re OK with leaving your money invested for the whole time required. Otherwise, you get hit with early withdrawal penalties. Consider whether there’s any scenario you might need to take the money out before your CD matures. If there is, then pass up on purchasing that CD.

2. Am I getting the best rate?

The national average CD interest rates are pretty low right now. The FDIC reports the national average rate on a 3-month CD is just 1.53%. On 60-month CDs, it’s only 1.40%. This is not impressive.

But there are tons of high-yield CDs that beat the national average by a lot. In fact, The Ascent’s list of the best CD rates has tons of options above 5.00%, with some as high as 5.15%. Obviously, this suggests there’s a lot of variation in the offers out there.

Since it makes sense to try to maximize your yields, you shouldn’t buy any CDs until you look at the options available and find the best rate you can. Check different offers from online banks and credit unions to confirm the yields on the CD you’re signing up for are very competitive before you make your purchase.

3. What CD term is right for me?

As mentioned above, CDs have different term lengths. So you shouldn’t buy one until you decide which term length makes sense for you.

Obviously, you can’t buy a CD with a term that lasts longer than the time you can afford to lock up your money. But that’s not the only consideration. You would be better off buying a CD with a shorter term if you think interest rates could go up soon. But you would be better off buying one with a longer term if you think rates will fall and you want to lock in today’s great rates.

Take the time to think about what you believe is going to happen in the CD market to pick the right term. Most experts believe rates are going to fall soon. That’s because the Federal Reserve repeatedly raised them in 2022 and 2023 to combat inflation, which is slowly getting more under control than it was during the COVID-19 pandemic. The Federal Reserve has signaled that it’s hoping to cut rates once the country makes more sustainable progress on inflation. If you believe the experts are right, buying a longer-term CD could make sense. But do a little research on market conditions and predictions before jumping in.

If you answer these three questions, you should be able to find the right CD for you. Not considering these factors could lead to making a costly mistake you end up regretting.

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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’re wary of crowds, shopping at Costco can be a pain. You don’t need to brave the masses to earn big, though. Try these tips. [[{“value”:”

Sure, there are those dedicated Costco fans who love their weekly trip down those wide, wide aisles. But some of us prefer to shop from afar — and in pajamas.

Happily, you don’t need to spend each weekend in a Costco warehouse to make your membership fee worthwhile. Any of these tips could help you profit from your membership without ever stepping foot in a Costco store.

1. Score online deals on big-ticket items

Before I make any large purchase on a big-ticket item, I always check Costco’s website to see if I can get a better deal. This goes for everything from electronics to small appliances and even to outdoor furniture.

Just a few months ago, we saved more than $150 on a new drone by buying it through Costco. That single purchase netted us enough savings to completely cover the cost of our Costco membership — and then some. All from the comfort of home.

Pro tip: Costco has a generous return policy overall, but some larger items, like TVs, cameras, and major appliances, have more specific return conditions (such as a 90-day return window). Be sure to make note of the return terms for your item before making your purchase.

2. Use Costco Next to get discounts on popular brands

Even if Costco itself doesn’t have a deal on what you need, you could still find great discounts through Costco Next. This is Costco’s partner shopping portal. In it, you’ll find dozens of brands, from large to niche, including Anker, Nomatic, and DiamondBack.

When you choose a brand, you’ll be taken to that retailer’s website, though it’s a special section just for Costco members. There, you’ll be able to shop the retailer’s offerings with exclusive Costco member discounts.

Keep in mind that you’ll need to log into your Costco account to get the deals, but you’re not buying these items from Costco. You’ll deal entirely with the partner retailer for buying, shipping, and any customer service issues.

3. Stock up on discounted gift cards on Costco.com

A really easy way to get good use of your Costco membership is to simply stock up on discount gift cards. Costco’s website has dozens of gift cards for all kinds of popular brands, including restaurants, movie theaters, and even airlines.

Discounts vary by brand and gift card, but they’re typically between 15% and 20% off the face value. For instance, right now you can get:

$500 Southwest Airlines gift card for $449.99$100 Instacart gift card for $79.99$50 Cinemark gift card for $39.99

Just a handful of gift card purchases could make up the cost of your membership, plus give you a more frugal date night!

4. Save hundreds on your next vacation through Costco Travel

If you really want to get back your membership cost in one go, Costco Travel could be the easiest way to do it. Think of Costco Travel like your online travel agency. (In fact, that’s how the purchase will code with most travel rewards cards.)

You can book your flights, hotel, and rental car all in one shot — and all for a discount. When I evaluated several trips on Costco Travel vs. booking direct, I found you could get at least 7% off a trip. (And in that case, 7% was equal to around $500!) At the high end, the best deal was a 15% discount.

Pro tip: If you’re going to use Costco Travel to book a big vacation, consider upgrading your Costco membership to the Executive membership. Executive members get a 2% annual Costco Reward, and Costco Travel purchases count toward that Reward.

RELATED: The #1 Strategy for Saving Money at Costco

Great deals (even without pants)

We talk all the time about how great Costco is for your budget when you take advantage of the warehouse deals on bulk items. But ideally these tips show you can still get great value out of your Costco membership even if you’d rather shop at home (and in pajamas) than fight the Costco crowds.

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

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.

Click here to read our expert recommendations for free!

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. Brittney Myers 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 recommends Southwest Airlines. The Motley Fool has a disclosure policy.

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Want to boost your profits? Think long-term by understanding customer lifetime value. See why this underrated metric can help your business. [[{“value”:”

Small business owners are often worried about certain key performance indicators (KPIs) and metrics, like revenue, conversion rates, and other marketing and sales data. In the effort to boost the bottom line, you might be overlooking one big number that can make the biggest difference of all: customer lifetime value (CLV).

Many small businesses get preoccupied with finding new customers and closing new sales. The thrill of chasing new business, selling to new markets, and driving new growth can be fun and fulfilling. But “new” business is not the only way to build a successful revenue base. What about “old” business — also known as “existing clients” and “repeat sales?”

Let’s look at what CLV means and how you can use this concept to improve your customer retention strategies.

What is customer lifetime value?

Do you know how much money you’re making from each customer over the very long run — the “lifetime value” of that customer relationship? Customer lifetime value (CLV) is a sales and marketing metric that helps you understand how much money you make from each customer (on average).

One way to calculate CLV is to multiply average sales per customer by average length of customer relationship.

If you run a restaurant where the average customer eats at your restaurant once per month and spends $20, the customer lifetime value might be $2,400 over a 10-year period. If you run an online store where customers spend an average of $100 per month, the CLV could be $6,000 over a five-year period.

For newly opened businesses or younger businesses, it can be harder to estimate CLV. But almost any small business can benefit from understanding the concept of customer lifetime value, and caring about the long-term revenue implications of selling to customers again and again.

How understanding customer lifetime value helps your business

If your business can get more focused on increasing customer retention and improving CLV, you might achieve bigger sales results — with lower costs and less effort spent on marketing.

Here are a few ways that understanding CLV helps your business:

Understanding your customer acquisition costs (CAC)Knowing the average customer’s total spending with your businessKnowing which products are most profitable and popular with repeat customersDiscovering which customers are most profitable for your businessUnderstanding why customers quit buying from you (“churn”)

When you know your customer lifetime value, your customer relationship management can be more strategic and precise. If your best customers spend more on a certain product, you can offer more of it, or stop selling less popular products. If you know that your average customer is worth $1,000 of sales per year, this can help you target your marketing investments — maybe it’s worth spending $500 to get a new customer that will bring $5,000 of profit to your business in the next five years.

How to increase customer lifetime value

Customer lifetime value is not just a way to describe the current performance of your business — it can help drive future growth for your sales. Here are a few sales and marketing strategies to proactively try to increase CLV.

Sell more to each customer

If you know that your average customer buys $500 worth of products from your business, you can try to boost that number. Try to upsell customers with relevant offers for higher-priced products, or cross-sell with complementary items or services. Increasing your average purchase amount or average order value can drive CLV.

Sell to each customer more often

If a customer buys from your business once, chances are good that they might buy again — or buy more often. Pay attention to your customer experience, customer service, and customer opinion surveys:

Are customers having a smooth, seamless experience buying from your business, or are they running into problems and glitches?Do you offer email marketing campaigns specifically for repeat customers?Do you have a customer loyalty program to reward customers for coming back again and again?

Selling to each customer more frequently — such as by getting customers to visit your website more often or come to your store twice a month instead of twice per quarter — can drive sales and increase CLV.

Keep customers longer

Along with increasing the average value of each customer, you can extend the lifespan of a customer relationship. Check your data for customer retention and consider surveying customers. Are you losing customers after a certain amount of time? Is your product lineup getting stale? Are your services losing relevance? Try to keep being agile at developing new products. Listen to your customers to solve their issues, and try to stay ahead of the latest shifts in your market — don’t get left behind.

Increasing customer retention can make your business more profitable in the long run than chasing after new customers every time. Every dollar of revenue in your business bank account is worth the same, whether it comes from a new customer or a long-time customer. But repeat customers tend to cost less — HubSpot data has found that it costs five to 25 times more to acquire a new customer than to keep an existing customer.

Bottom line

Understanding customer lifetime value (CLV) can help you improve your marketing, customer service, and customer retention strategies. It can even help guide your business in a new, more profitable direction — if certain customers, products, or markets are generating bigger CLV, you can focus more on your best customers and markets.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2025

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!

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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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