Money Management

Shop at Costco often? Here are some habits that could be costing you a small fortune. [[{“value”:”

Many people have a single goal in joining Costco — to save money. Ironically, Costco forces customers to spend money for a membership — $60 a year for a basic (also known as Gold Star) one and $120 for an Executive one offering 2% cash back on purchases. But if you’re paying $60 a year for Costco access and you enjoy a weekly savings of $10 on groceries, you’re technically up $460 after 52 weeks despite the membership fee.

That said, the more strategic you are in your Costco shopping, the more savings you’ll be able to reap. It pays to avoid these potentially expensive traps.

1. Paying more for online purchases

One of the things I like least about visiting Costco are the crowds. Even when I shop at seemingly off-peak times, like when the store first opens and there aren’t even any samples out yet, I still find myself waiting in long checkout lines and having to bump shopping carts with fellow customers to get down the aisles.

I’m sometimes tempted to shop on Costco.com instead of going to the store. But there’s a big reason I usually don’t — it’s more expensive.

Many of the items you’ll see on Costco.com have the cost of shipping and handling built into the price. But that means you’re looking at paying more than what you would at your local store.

Of course, if you don’t have access to a car or have a reason you can’t get to Costco in person, like an injury, then by all means, do your shopping online. Otherwise, don’t assume you’re getting the best deal on Costco.com because there are no shipping charges. You’re paying for shipping, all right — just not in the way you think.

2. Giving into front-of-store impulse buys

Ever notice how the front of Costco is loaded with random sale items that don’t tend to have anything to do with each other? Just the other day, I walked in and saw discounted toothpaste, beach towels, and gardening supplies.

But you should know that giving into front-of-store impulse buys at Costco could make your shopping trips more expensive than they need to be. A better bet is to walk past the front of the store and stick to a specific list.

Remember, the items you’ll see at the front of Costco aren’t always limited-time deals, even though they’re often billed as such. Last week, I impulse-bought toothpaste because it was on sale and I was running low. But in the grand scheme of unplanned buys, dropping $10 and change on toothpaste is hardly reckless.

On the other hand, it took self-control to not buy some cheap beach towels, since some of ours may inevitably get lost during the summer (thanks to my kids). But since I know Costco will probably continue to have beach towels in stock for the next couple of months, I didn’t grab the deal.

I figured it makes more sense to get through the summer and see what happens. Then, if I still need more towels, I see if Costco puts any on clearance as the season is winding down.

3. Paying a surcharge for online orders as a non-member

Did you know that you actually don’t need to be a Costco member to shop on Costco.com? While a membership card is required to enter the store, online shopping at Costco is open to everyone.

But if you don’t pay for a membership, you’ll face a 5% surcharge on your Costco.com orders aside from prescription drugs. And paying a series of surcharges could exceed the cost of a membership itself.

Let’s say you place a $120 Costco.com order every month. If you’re being charged $6 more each month, you’re paying $72 extra for your purchases. Why do that when you can just get a membership for $60?

And remember, there may be a month when you decide to take advantage of a deal Costco is running on a big-ticket item, like a laptop or TV. But for a $1,500 item, you’re paying $75 more on that single purchase.

Shopping at Costco saves me money regularly. It should save you money, too. And a good way to make sure that happens is to steer clear of these traps.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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Savings accounts are safe, but you don’t want to overfund them. Learn when $20,000 is too much for a savings account and when it’s just right. [[{“value”:”

Savings accounts are one of the safest places to store your money. Nearly all financial institutions furnish them with FDIC insurance, which secures your deposits for up to $250,000 of protection. Plus, have you seen today’s rates on savings accounts? The best high-yield savings accounts are currently paying out at rates up to 5.36%. Security plus decent returns on interest — what could go wrong?

Few things could go wrong, to be sure. But for large amounts of money, like $20,000, a savings account might make you miss opportunities elsewhere. If you’re currently holding $20,000 or more in a savings account, here’s how to know if you’re making the best choice.

When it’s best to keep $20,000 in a savings account

Aside from earning interest, savings accounts have two major benefits: They’re safe and leave money relatively accessible to you. This makes savings accounts ideal for emergency funds and certain near-term expenses, like weddings and cars.

With rates exceeding 4.5% on most savings accounts, I can’t think of many other places to put $20,000. Putting your emergency fund in a certificate of deposit (CD), for instance, could end up costing you if you needed to withdraw money before maturity, as these accounts impose early withdrawal penalties. Likewise, you could lose some or all of your cash in a brokerage account if you were investing in potentially risky securities (like stocks or ETFs) on a short-term basis.

Perhaps the only bank product that rivals savings accounts for emergency funds and near-term expenses is a money market account. These accounts can one-up savings accounts in that they come with check-writing privileges (sometimes even debit cards), which greatly streamlines your ability to withdraw money. However, money market accounts may have their own weaknesses, such as higher deposit and balance requirements and monthly service fees. But it’s worth comparing them to savings accounts, as sometimes their APYs are slightly more favorable.

When $20,000 is too much for a savings account

If savings accounts are best for near-time expenses, then a little logic will tell us they’re not great for saving for long-term goals. That’s pretty much the case for most people, though, as always, there are exceptions.

Take retirement, for instance. If you put $20,000 away for retirement, you might be better served by depositing it in a brokerage account. You could then invest that $20,000 in securities with more upside potential, like stocks, bonds, or mutual funds. This is especially relevant if your retirement is decades away, as you can mix time and compound interest to grow your money much more than a savings account could.

On the flip side, if you’re still saving for retirement, but your golden years are already starting to dawn, I wouldn’t rule out a savings account yet. In this case, retirement would fall into a “near-term goal,” which could make savings accounts a useful instrument for money you don’t want to risk in the stock market.

That said, rates on savings accounts have one major weakness: They’re variable, meaning banks can choose to change them at any time. If you suspect interest rates will fall in the near future, you might be better served by a fixed rate product, like a certificate of deposit (CD). Interest rates on the best CDs are as high as savings accounts these days, but they won’t change for the duration of your term. You can lock in today’s high rates for a lengthy period, like five years, or take advantage of them for terms as short as one month.

All in all, depositing $20,000 in a savings account can be wise if you have a short-term plan for the money. Your deposit will be safe and you can generate decent amounts of interest in the meantime. However, if you have $20,000 more than your emergency fund, spreading this money around other accounts — CDs, brokerage accounts, money markets — might make more sense. There’s not a one-size-fits-all solution, but consider all your options if you feel like your savings account is overfunded.

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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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This financial writer plans to open more CDs this month. Read on to see why. [[{“value”:”

As a financial writer, I put a lot of thought into money-related decisions. This relates to savings matters as well as less important things, like which store to buy my bread at for the best price.

This month, I’ve decided to open a few new CDs. What I intend to do is set up a CD ladder, rather than put all of the money I want to lock up into a single CD.

But there’s more than one reason I’m going big on CDs this June. My logic is as follows, and maybe some of these points apply to you, too.

1. Rates are still very strong

If you think you missed the boat on 5.00% APY CDs, I’m here to tell you that they’re still available.

All told, CD rates are still high because they’re tied to the federal funds rate, the benchmark interest rate the Federal Reserve is in charge of setting. As you might remember hearing in the news, the Fed raised interest rates numerous times in 2022 and 2023 to deal with soaring inflation. Since the economy has calmed down, the Fed is looking to cut rates pretty soon.

But that hasn’t happened yet. So I’m aiming to lock in a CD before rates start to fall. And you may want to do the same.

In fact, the Fed is next set to meet on June 11-12. We could see our first interest rate cut then, so if you have money available now, you may want to open your next CD before the Fed’s upcoming meeting.

2. Stocks are expensive

I believe in investing consistently, both during periods when stock values are up as well as when they’re down. But it’s kind of hard to psych myself up to buy stocks this month, given how expensive they are.

Right now, the S&P 500 is up almost 25% over the past year, and today’s value is just a hair below the index’s 52-week high. While it’s not a great idea to try to time the stock market, buying low and selling high is every investor’s dream. Right now, I’m looking at buying at a high, so I’d rather divert more money to CDs and see if the market cools off this summer.

3. I’m saving for a specific goal CDs are more suited for

Stocks are a great place to put your money when you’re investing for a goal that’s far off. But a lot of the money I’m trying to save this year is for my kids’ education. And since I’m only about five years from potentially having to pay college tuition for my oldest, I’m not comfortable investing college funds in the stock market. Five years isn’t a lot of time to ride out a downturn.

For this reason, I’m looking to ladder some CDs ranging from 12 months to 60 months. The longer-term CDs should mature before I need to take out the money for college expenses. And that way, I know I’m guaranteed a certain return without risking losses.

As you can see, I have my reasons for going all-in on CDs this month. But if any of these points resonate with you, you may want to do the same.

CDs could be a good bet for a goal you’re saving for that’s two, three, or four years out. They could also be a good place to park some cash for a bit of time while stock prices are up. So if you have spare cash, shop around for CD rates and consider opening one this month, before those rates start to drop.

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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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Costco’s got some great bargains happening now. Read on to see what’s on sale. [[{“value”:”

The whole reason Costco has such a loyal customer base is that the store is known for its consistently low prices. But sometimes, Costco manages to one-up itself with monthly deals that bring your costs down even more. Here are some of the top bargains you’ll find at Costco this June.

1. $3 off Kirkland Signature Non-Drowsy AllerClear Antihistamine 10mg, 365 Tablets

If you’re an allergy sufferer, the spring onslaught is no joke. All of that flying tree pollen can make for a miserable experience complete with watery, itchy eyes, a runny nose, and a scratchy voice reminiscent of Marge Simpson.

If you need daily allergy relief, then it pays to save money on antihistamines. Right now, Costco is offering $3 off a 365-count of Kirkland allergy tablets. They contain loratadine, the active ingredient in Claritin.

With this discount, you’re looking at paying just $0.02 per pill, which is worth the cost of relief. And if you’re wondering whether that’s really such a good deal, you should know that right now, Amazon has a 100-count of Claritin on sale for 49% off. But even there, you’re paying $0.25 per pill, which is a far cry from two pennies.

2. $9 off Kirkland Signature Diapers Sizes 3-6

If you have a baby or toddler, diapers are an unavoidable part of your budget. That’s why it pays to take advantage of this limited-time deal from Costco.

Right now, you can save $9 on a 222-count box of Kirkland diapers, bringing your cost per diaper to just $0.16. Even though Costco offers a pretty good deal on bulk Huggies diapers, you’re paying $0.27 per diaper for those.

3. $5.50 off a three-pack of OFF! Deep Woods Dry Insect Repellent

Have you ever gotten a mosquito bite that was so bad you wanted to rip off one of your limbs just to make the itching stop? Bug bites can be truly miserable, and in some cases, dangerous — such as with ticks. So it’s important to protect yourself during the warm weather months, especially if you spend a lot of time outdoors.

This month, Costco is selling a three-pack of OFF! Deep Woods Dry Insect Repellent for $5.50 off the usual price. You may want to stock up for the fall season as well if you do a lot of hiking, since ticks can be a threat until there’s a consistent frost.

4. $150 off the Vitamix A2300 SmartPrep Deluxe Kitchen System

If you’ve never used a Vitamix before, you should know that it’s no ordinary blender. The Vitamix A2300 SmartPrep Deluxe Kitchen System is a highly powerful machine that includes a food processor attachment, slicing and shredding discs, a large-sized work bowl, and more.

If you like to plan your meals and cook in batches, a Vitamix might easily help you cut down on your prep time. It’s great for everything from smoothies to soups, and you can get it now for $150 off the usual price.

However, do keep in mind that this is a members-only item at Costco. Non-members can shop on Costco.com and pay a 5% surcharge on many items. But with this item, you can’t do that. So if it’s on your wish list, you may want to consider buying a basic membership for the $150 savings.

A basic Costco membership only costs $60 a year. Even if you don’t make a single other purchase from Costco, you might still come out ahead financially.

5. $6.20 off of KIND Nut Bar, Variety Pack, 22-count

What sets KIND bars apart from typical granola bars is that they tend to have less sugar and more protein per serving. But they can also be a lot more expensive than the junky type of granola bars many of us enjoyed when we were kids.

Normally, the cost of KIND bars at Costco is more than $1 per bar. But right now, you can save $6.20 on a 22-count box, bringing your price per bar to $0.81. And because you’re getting a variety pack, you’re less likely to get bored of eating the same exact bar every day.

It’s worth claiming these deals if you have a need for the products at hand, whether due to wanting to up your kitchen game or keep pesky mosquitoes at bay. But don’t wait. Some of these deals won’t be around for all of June, so if you want to enjoy the most savings, run to Costco or visit Costco.com ASAP.

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.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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