Money Management

Sam’s Club offers two tiers of membership, Club and Plus. Find out why one writer has no intention of upgrading to a Plus membership. [[{“value”:”

Sam’s Club, a division of retail giant Walmart, offers two tiers of membership: “Club” and “Plus.” Club is Sam’s basic membership, offering services all club members have access to. Plus is the retailer’s upgraded tier of membership, with special discounts for serious shoppers. As someone who determines whether I will purchase a Sam’s Club or Costco membership based on where I live at the time, I can guarantee that I will never upgrade to a Sam’s Club Plus membership. Here’s why.

I’m over getting nickeled and dimed

Do you ever feel as if your paychecks travel directly from your employer into someone else’s pockets? That’s precisely where I’ve recently found myself. While updating our household budget, I couldn’t help but notice how easily I’ve slipped into the habit of giving away money. I’d become like that elderly woman who used to sit a couple of pews ahead of us in church. She’d reach into her purse and dole out peppermints to anyone with their hand out. Only, instead of handing out peppermints, I was handing out cash.

While I thought I had a fair idea of how many upgrades and subscriptions I was paying for, I had honestly lost track. In addition to paying for six separate streaming channels, I was paying for a handful of mobile apps, satellite radio, a monthly car wash membership, and upgraded cellphone service.

It’s easy to justify

In my defense, each expense seemed small when I took it on. After all, paying $5 a month for a British streaming channel feels like a steal, and I can’t imagine how much more I would pay to keep my car clean if I hadn’t signed up for a monthly car wash membership.

In other words, I justified each purchase.

A basic Club membership costs $50 per year, while a Plus membership costs $110. At one time, I would have justified the upgrade by thinking, “Hmm. A Plus membership is only $60 more annually than a Club membership. That’s only $5 per month more!”

However, updating our household budget is a beautiful way to confront reality. So what if $5 a month seems like a bargain? The question is how much we’re out monthly when I add all those “tiny” expenses together.

The fix for me was to take a closer look at all those small expenses and decide which ones I could cut. The truth is, I haven’t missed any service or upgrade that I canceled. Seeing how much I was spending on subscriptions and upgrades reminded me of how important it is to my personal finances to be picky about what I’m willing to commit money to.

Buying only what I’ll use

The base $50 Club membership includes:

Membership cards: A card for me as the primary account holder and a free card for my husband.Additional cards: You can add up to eight additional members at a rate of $45 each (each membership includes its own complimentary card).Scan & Go service: A Sam’s Club perk I absolutely adore.Scan & Ship: This allows me to scan an item and have it delivered to my home.

I typically only shop for two and rarely make a warehouse run more than once a month. For that reason, I purposefully stop myself from buying more than I need while shopping. Why would I spend more for an upgraded membership I won’t use?

Plus is attractive, but…

For $110 annually, a Plus membership offers all the benefits of a Club membership, in addition to:

Additional cards: You can add up to 16 Club-level members instead of eight.Free shipping available on most online items: Other than floral arrangements, I rarely shop on the Sam’s Club website.Free curbside pickup: I’ve never used curbside pickup at Sam’s.Eyeglass discount: I typically find a better selection of frames elsewhere.Tire and Battery Center discount: We have two other discount tire and auto goods stores nearby.2% back on qualifying purchases: Admittedly, this one is tempting, but I don’t spend enough at Sam’s Club to justify the extra expense of upgrading.

I recognize that some people drop a lot of money at Sam’s Club every time they visit. If that describes you, you may find that a Plus membership pays for itself many times over throughout the year. As for me, I’m currently focused on being kind to my checking account. That includes being mindful of how I spend money — even if it is only $5 more a month.

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

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Research has found a correlation between credit scores and income. Check out the surprising data on the average credit score for low-income Americans. [[{“value”:”

Your credit score is an important number. The higher it is, the more likely you are to pass a credit check, get competitive rates on loans, and qualify for the best credit cards. There are also plenty of other ways it can affect your life. For example, in most of the United States, drivers with higher credit scores pay less for auto insurance.

Income isn’t one of the factors used to calculate your credit score. However, research has found that low-income Americans are more likely to have lower credit scores — and it’s a shocking difference.

The average credit score for low-income Americans

Low-income Americans have a median credit score of 658, according to average credit score data gathered by The Motley Fool Ascent. The data comes from the Federal Reserve Bank of New York and Equifax. You can see how that compares to moderate-, middle-, and high-income Americans in the table below.

High-income Americans have a median credit score 116 points higher than low-income Americans. This makes a significant difference in mortgage rates, the likelihood of qualifying for rental housing, and the credit cards each group could get.

So, if income isn’t a credit scoring criteria, why do people with lower incomes have lower average credit scores? The most likely reason is that a higher income makes it easier to follow good credit habits, including paying bills on time and avoiding excessive debt.

How to improve your credit score at any income

It’s possible to have an excellent credit score, regardless of your income. To give you an example, my credit score was above 780 even when I wasn’t making that much.

Fortunately, building credit isn’t too complicated. It mostly just requires following a few credit-friendly habits month in and month out. Here are a few tips that can help you reach and maintain a high credit score.

Start tracking your credit

Before you can improve your credit, you need to know your current score. Thanks to online credit score tools, it’s easier than ever to check this — and it’s free.

See if any of your credit cards offer free credit monitoring. Many credit card companies include this as a perk for cardholders. Here are a few examples of credit score tools with major card issuers:

American Express: MyCredit GuideCapital One: CreditWiseChase: Credit JourneyDiscover: Credit Scorecard

All these provide your credit score, updated monthly. They also provide information about the factors affecting your credit score, so you know what to work on.

Always pay your bills on time

The biggest factor in your credit score is your payment history. When you pay bills on time, that has a positive impact on your credit score. If you pay late, it can cause your credit score to drop quite a bit.

It’s worth mentioning that not all bills go on your credit report. Credit card and loan payments are generally the ones that affect your credit. Rent and utilities usually don’t get reported on your credit history, so they don’t impact your credit score. But it’s still best to pay all your bills on time to maintain the habit. If you want to make this easier, consider setting up automatic payments.

If you can’t make a payment, contact the creditor to see what your options are. You may be able to work something out, such as paying a smaller amount, to avoid having a missed payment on your credit history.

Pay down credit card debt — or stay out of it entirely

There are a couple of negative consequences of credit card debt. It costs you money in interest every month, and interest rates are high. Let’s say you have $5,000 in credit card debt. If your card has a 21.59% APR (the national average, according to Federal Reserve data), that would cost you about $1,800 in interest per year.

It can also hurt your credit score. The portion of your credit that you use is another key credit scoring criteria. If you have your credit card maxed out, or even if you’ve just used 50% of your credit limit, that will impact your credit.

If you don’t have any credit card debt, do your best to keep it that way. Pay your credit cards off in full every month to avoid debt and interest charges. If you’re currently in debt, pay as much as you can toward it. Also, look into balance transfer credit cards. These have a 0% intro APR on balance transfers, so you can refinance debt and save money on interest.

Managing money with a lower income is harder, and that can also make it harder to build credit. For long-term financial success, you may want to look into ways to increase your income. But improving your credit score is a goal you can achieve at any income if you pay your bills on time and avoid credit card debt.

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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. American Express is an advertising partner of The Ascent, a Motley Fool company. Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

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Overcontributing to a flexible savings account (FSA) comes with some risks. Find out what happens when you don’t use your FSA money by the annual deadline. [[{“value”:”

A flexible spending account (FSA) is a savings account that lets you set pretax dollars aside for healthcare expenses. Like some retirement accounts, FSA contributions are deducted from your income and do not count toward your overall tax bill. Funds must be used toward qualified medical expenses, and you can contribute up to $3,200 for 2024.

But there is a caveat: You must use your FSA contributions before an annual deadline or risk forfeiting your money. For example, if you contribute $2,000 for 2024, you should plan to spend as much of it as you can on medical expenses, or else risk losing some of that hard-earned cash you’ve saved.

The IRS is strict about this rule, but your employer could offer you a grace period. Let’s take a look at what happens when you don’t use your FSA and what you can do to avoid losing this money.

What happens if you overcontribute to your FSA?

FSAs have a “use it or lose it” policy. Any contributions you make expire by an annual deadline, usually the first of the next year. If you don’t use this money before the year ends, it might ultimately end up in your employer’s hands. More than likely, your employer will then use this extra money to pay administrative costs on FSA accounts.

That said, some employers offer a grace period that will bump the annual deadline to a later month. For instance, if your annual deadline is Jan. 1, your employer may give you until mid-March to use up any remaining FSA money. Other employers will allow you to carry some money over into the next cycle. Carryover limits are set by the IRS and are typically no more than 20% of the maximum contribution. In 2024, the maximum amount you can carry over into 2025 is $640.

But there is one last hope for unused contributions: Your employer may pool them together and distribute them equally to employees who contributed for that year. In this way, you’ll get a small piece of the pie, either as a fringe benefit or as a contribution match for FSA contributions made in the following year.

How to avoid forfeiting FSA money

Putting cash in a high-yield savings account might be a prudent option if your medical expenses are variable and you’re not expecting any big hospital bills anytime soon. But if you’re already contributing to your FSA, and you’re worried you won’t be able to spend it before the deadline, here are two ways to start draining it.

Take a trip to the pharmacy. You may not realize just how many items you can buy with your FSA: bandages, heating pads, massage guns, alcohol wipes, sunscreen, and feminine products are just a few of the many things you can buy. If it comes down to the wire, go on a shopping spree before you forfeit your money.Try to prepay upcoming expenses. If you have ongoing treatments or prescriptions, you might be able to prepay for them.

An FSA is a great way to save money for medical expenses, but it’s not right for everyone. For those who don’t have many medical expenses, you might be better off with a high-yield savings or money market account. You’ll earn interest on your savings, and you won’t have to forfeit any money if you don’t use it by an annual deadline.

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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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Want to save big money at Costco? Read on for an unbelievably easy way to lower your grocery bills. [[{“value”:”

I don’t know about you, but I’m frustrated by how expensive it’s gotten to buy groceries and household essentials. Just the other day, I walked to my local supermarket to pick up a few items. The tab? Almost $40 for a small bag of groceries I could carry home.

Because groceries and household products eat up such a large chunk of my budget, I’m constantly looking for ways to reduce my spending. Sometimes, that means seeking out digital coupons at my local grocery store, which I can download to my store card. It also means doing a lot of my shopping at Costco.

Since there are a bunch of people in my household, Costco’s bulk offerings are something I can take advantage of without having to worry about food waste. But there’s a trick I use to save money on my Costco shopping. And I highly recommend you use it, too.

Not being picky could save you a lot

When I first joined Costco, I was a bit wary of trying its signature Kirkland brand — namely because I’d never heard of it before and was worried about the quality. I’ve since changed my tune on Kirkland, and I can honestly say that loading up on Costco’s signature brand is a huge money-saver.

But there’s a reason for that. Costco specifically seeks to offer its Kirkland products at a lower price point than competing brands — including those it carries. And that allows customers to save big.

As one example, if you buy Kirkland paper towels, the price per 100 square feet is $2.24. Choose Bounty instead, and it’ll cost you $4.57 per 100 square feet — more than double. So if you’re someone who’s not so picky about the products you bring home, then choosing Kirkland over the brands you see advertised on TV could result in nice savings.

Costco’s pledge could benefit you

Choosing Kirkland products won’t always mean paying less than half of what a well-known brand will cost. But in general, you can expect to save at least 20% on a given item by purchasing the Kirkland version — or so says Costco’s CFO, Gary Millerchip.

During Costco’s most recent earnings call, he was quoted as saying, “We evaluate the potential for new high-quality Kirkland Signature items with a goal of providing at least 20% value versus what we would sell the national brand item as.”

This means that if you normally buy name-brand products at Costco and spend $100 a week, switching to Kirkland could put $20 a week back in your pocket or more. That’s a pretty good deal.

And if you’re wondering whether Kirkland products are as good as the brands you know, the honest answer is that it depends. In my experience, in some cases, Kirkland’s version is way better. Sometimes, it’s not. Most of the time, it’s at least the same, in which case I might as well pay less.

But either way, there’s really nothing to worry about. Costco’s generous return policy and commitment to customer satisfaction means you can take back almost any Kirkland item that doesn’t meet your expectations for a full refund. So if you buy Kirkland granola bars and your kids hate them, you can just return the box, get your money back, and chalk it up to a failed experiment.

Chances are, though, most of the Kirkland items you buy will be winners with few exceptions. That’s been my experience as someone who’s been buying Kirkland products for over a decade. So if you’re tired of spending an uncomfortably large portion of your paycheck on groceries and related essentials, it pays to give Kirkland products a go.

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.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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