Money Management

Costco’s prices aren’t always the lowest. But read on to see why it often pays to make bigger purchases there. [[{“value”:”

Many people rely on Costco for everyday purchases like groceries, paper goods, and cleaning supplies. But if you’ve ever wandered those aisles or spent much time browsing its website, you know that Costco’s inventory consists of more than just food and household goods.

Costco also sells everything from furniture to apparel to electronics. So while a typical Costco run might cost you $100 to $150, if you’re buying a TV, your credit card tab could easily exceed the $1,000 mark.

Now one reason to buy bigger-ticket items from Costco is that the warehouse club giant often has the lowest prices available — especially when there’s a limited-time special to enjoy. But Costco doesn’t always have the best prices, so it’s important to shop around when you’re buying something out of the ordinary you expect to keep for a long time, like a dining table, laptop, or kitchen appliance.

That said, sometimes, it pays to buy your big-ticket items at Costco even if the store’s price isn’t the best. Here’s why.

It’s all about flexibility and convenience

With few exceptions, Costco allows you to return any item you buy from the store (or online) for any reason. It could be that the item doesn’t work the way you expected it to, or it could be that you simply don’t like it.

It’s for this reason that you may want to buy bigger-ticket items at Costco even if they’re cheaper at another store. If you choose another retailer, you might save a bit of money. But you might also lose the ability to return a purchase you don’t end up loving, thereby getting stuck with something like a TV or refrigerator you no longer want.

Even when Costco does impose a time limit for returning items, which is the case with electronics and appliances, it could pay to turn to Costco if the price difference isn’t all that much compared to another retailer. That’s because you still get 90 days to take back items in these categories.

For example, right now, Costco is selling the HP x360 14″ Touchscreen 2-in-1 Chromebook Laptop for $150 off of its normal price, bringing your total cost to $299.99 if you buy it online. You may find a different (generally lower) price at your local warehouse club store.

You can find the same item on Amazon for $279, but you’ll only have 30 days to return it if you don’t end up liking it. With Costco, you get three times as long to make a return, plus a free second-year warranty and no-cost tech support in case you run into issues setting up or learning to use your device. And all of this comes at a cost to you of just $21.

Sometimes, it makes sense to pay more

If you’re making a larger purchase and Costco’s price is considerably higher than that of another retailer, then it may not make sense to buy from Costco. There’s no need to spend $500, for example, on a laptop that another retailer is selling for $300. But when the price difference is pretty modest, as in the example above, it could make sense to pay more for the added flexibility.

It’s sort of like paying a little bit more for a refundable flight. You might spend an extra $80 on your ticket, bringing your cost to $480 instead of $400. But if you need to cancel your plans, you’re not out the $400 — you get all of your money back.

Similarly, because of Costco’s generous return policy, you can potentially save big if a purchase doesn’t work out for you. So it pays to spend a little extra for that peace of mind.

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.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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CDs are a great way to keep cash safe and growing. See why you might want to jump on one this month. [[{“value”:”

Certificates of deposit (CDs) aren’t the most exciting financial product — but they are hot, hot, hot right now. This is thanks to a higher federal funds rate, a result of the Federal Reserve’s efforts to cool inflation.

Many experts still believe we could see rate cuts later this year, though — and the unique nature of CDs is such that you get to lock in the rate when you open one. So even if the federal funds rate inches downward and the best CDs start paying just 4%, if you’ve already opened one at 5%, you are set for the duration of your CD’s term.

Here are three great reasons to jump on the CD bandwagon this month — and one reason not to.

1. Taking advantage of those high rates

OK, you knew I was going to start with this one! It’s honestly the best reason to open a CD right now, provided you have the cash to spare. As of this writing, you can open a shorter-term CD (with a term of one year or less) with a rate of 5.15%. And that’s a guaranteed rate, since you lock it in when you open the account.

Sure, you might expect a long-term average annual return of 10% on the money you invest in the stock market (based on its average returns over the last five decades), but you can’t rely on those kinds of returns in the short term. Stock values swing up and down. You’re not guaranteed any kind of return, and might in fact lose money if you’re not patient enough.

But if you have $5,000 you can part with for a year, you could earn almost $264 on it in a 5.15% APY CD that compounds your interest monthly. You can run the math and find out exactly how much you can earn going in. And since CDs are one of the account types insured by the FDIC, up to $250,000 of your money will be safe in case of bank failure, too.

2. Using a short-term investment vehicle

If you already have money in a retirement account, such as a 401(k) or IRA, you might wonder what the point of CDs is for you. And yeah, I get it — CDs aren’t a great investment option if retirement is many years away. The stock market is a smarter bet for retirement savings.

But what if you’re waiting a few years (say, less than five) to buy a home, have a big wedding, or send your child off to college? A CD could be a great choice in any of these circumstances, where you have a shorter and set deadline for the money. Since CDs come in a range of terms (three months to five years are the most common), you can literally match a CD to your goal, deposit money, lock in your rate, and wait for it to expire — at which time, you’ll be a little richer.

3. Beating inflation

According to April’s Consumer Price Index report, as of this writing, inflation currently stands at 3.4% year over year. Money that isn’t earning at least that much is actively losing value to inflation. And unlike in June 2022, when we saw 40-year record-high inflation at 9.1%, you actually can keep your money from losing spending power in a bank account right now. Remember how the best CDs are currently paying 5% or better? That’s inflation protection right there.

One reason not to open a CD this month

It would be remiss of me not to caution you about using CDs for money you can’t afford to part with for a set term. Namely, your emergency fund — don’t put it into a CD, even at 5% APY, even for only one year. Just don’t do it. CDs are best for money you know you won’t need at a moment’s notice — like the cash for the big dream vacation you’re taking in 2026.

If you put your emergency fund into a CD and then have an unplanned expense, you’ll be forced to break the CD term. You’ll lose a portion of the interest you’ve already earned (or maybe all of it). And depending on the bank’s standard early withdrawal penalty and how far into the CD term you are, you might even lose some of your principal balance. So don’t risk it.

Ready to open a CD this month? Have a gander at the best CD rates right now and pick out a winner!

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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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Seniors tend to spend a lot of money on two expenses in particular — and Costco offers good deals on both. See why these perks could make it worth joining. [[{“value”:”

Retirees often have to be careful with their money. After all, they don’t have a paycheck coming in any more and they often need to make their savings last.

If you’re out of the workforce and considering spending some of your limited cash on a Costco membership, it’s worth it to think about whether the fees to join are justified. With the price of a membership starting at $60 for a Gold Star membership and jumping to $120 for an Executive Membership, this may not seem like an easy choice.

In reality, though, there are two specific perks Costco offers that could make joining an especially smart personal finance choice for seniors.

1. Discounted prescription drugs

The ability to save on prescription medications is one huge motivator for retirees to join Costco.

According to the Georgetown University Health Policy Institute, among Americans between the ages of 65 and 79, 87% use prescription medications. For those over the age of 80, that number jumps to 91%. The average number of prescriptions filled each year is 20 for 65 to 79 year olds and 22 for those 80 and over.

These medications come at a cost, even with Medicare coverage. Individuals between the ages of 65 and 79 spend an average of $456 per year out of their pockets to cover prescription costs, while those 80 and over have to budget for an average of $510 for meds.

Joining Costco can help seniors cut those costs. The Costco Member Prescription Program makes it possible to save up to 80% on popular medications. That means a typical senior who is spending $456 annually could reduce that amount by as much as $364.80. The prescription savings alone would more than justify the annual membership fee.

Let’s take a look at one popular drug. Celebrex treats rheumatoid arthritis and osteoarthritis — two common ailments in the elderly. The generic version, Celecoxib, was more than $10 cheaper from Costco compared with Target or CVS in multiple markets across different states including Florida, Pennsylvania, and California. The discount on this one med alone covers Costco’s annual fees and then some, assuming you get a 30-day monthly supply.

2. Discounted travel

Travel is a passion for many seniors who have the money, time, and health to see the world. Over half (52%) of seniors ages 50 and up describe travel or vacations as their top priority when it comes to spending their discretionary income. Costco can make those trips less expensive.

The warehouse club offers tons of vacation packages at great prices. When The Ascent compared costs of Costco versus alternatives, there were multiple trips offering savings of $500 or more. Plus, Costco also allows you to earn a 2% cash back reward when you book vacations through Costco Travel if you upgrade to the Executive Membership, which can help lower the cost even more.

These two perks alone are often well worth joining Costco for, especially if you’re like most seniors and tend to spend a lot on medications and vacations.

The good news is, if you aren’t happy with your membership, Costco will also offer a refund at any time. So you can join to see if your prescriptions or destinations are cheaper, and if it turns out you aren’t saving enough to justify your membership fee, you haven’t really lost anything in the end.

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.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and Target. The Motley Fool has a disclosure policy.

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CDs are a popular way to save, but they’re not the best choice for your retirement savings. See which investments typically offer much higher returns. [[{“value”:”

Certificates of deposit (CDs) have a few great benefits. They’re safe, with no risk of losing money. They allow you to lock in a fixed interest rate, and rates are high right now. Some of the best CDs are currently offering rates above 5.00%.

But if you’ve been thinking about using CDs for your retirement savings, you should reconsider. CDs work well for short-term savings. For long-term savings (anything that’s more than five years away), there are investments that will likely make you more money.

1. S&P 500 ETFs

Exchange-traded funds (ETFs) are funds you buy and sell on stock exchanges. They invest in a bundle of securities, such as stocks.

An S&P 500 ETF invests in the stocks that make up the S&P 500, an index of 500 of the largest publicly traded companies. This type of ETF is a popular investment because of its growth potential — the S&P 500 has an average return of about 10% per year dating back decades.

You save a lot of time investing in an ETF, as it does most of the work for you. There’s no need to pick out stocks yourself. You just buy more shares whenever you want.

Another benefit of S&P 500 index funds is how cheap they are. Many of them have expense ratios (fees) of just 0.02% or 0.03%. That’s about as low as it gets for investment funds.

2. Target-date funds

ETFs can save you a lot of time with investing. But if you want to make it even easier, you could put your retirement savings in a target-date fund.

A target-date fund selects investments based on a specific retirement year. For example, if you want to retire in 2050, you’d pick a 2050 fund.

It will start out by investing your money heavily in stocks to maximize growth while retirement is still decades away. As it gets closer to the target retirement date, the fund will shift money to stabler investments, such as bonds.

Most 401(k) plans have target-date funds, so if you have a 401(k), you may have already seen this option. You can also invest in target-date funds through many of the top stock brokers.

3. REITs

Stocks and real estate are two of the most popular and historically proven investments. Real estate investing doesn’t need to involve flipping houses or buying rental properties.

You could invest in real estate investment trusts (REITs). These are companies that own income-producing properties. What makes them special is that most are bought and sold in shares on exchanges, just like stocks, so it’s easy to invest in them.

REITs are also excellent investments for growing your retirement savings. In fact, REITs have outperformed the S&P 500 over the last 50 years. From 1972 to 2023, REITs had an average annual return of 12.7% compared to 10.2% for the S&P 500, according to analysis by The Motley Fool.

4. Real estate

There’s also the more traditional form of real estate investing — buying properties to either rent out or fix up and sell. This won’t be the right choice for most investors. It requires significant start-up capital and knowledge, and it’s time-consuming.

But if you have the means, knowledge, and time, then investing directly in real estate could be worth considering. Notably, it allows you to use leverage, financing a purchase with an investment property loan. While this increases risk, it’s also how some real estate investors have been able to generate impressive returns.

Finding the right place for your retirement savings

CDs are one of the most conservative investments. That’s ideal for money you’ll need in the next few years. When the goal is building long-term wealth for retirement, you probably need investments with more growth potential.

S&P 500 ETFs, target-date funds, REITs, and real estate all fit that description. Historically, investments like these have returned over twice as much as CDs, making them much better-suited for your retirement savings.

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!

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.Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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