Money Management

Costco’s discount membership club isn’t right for everyone’s financial situation. Here’s when it might be a good time to look elsewhere for savings. [[{“value”:”

My family has signed up for and canceled our Costco membership more times than I can remember. Figuring out which items are worth buying and which are cheaper elsewhere can be challenging.

We currently have a membership, and I think it will stick this time. We’ve figured out which items we like at the store, factored in how much we save buying them at Costco, and have definitely saved more than the annual $60 membership price.

But Costco memberships aren’t for everyone. Here are a few signs it might be time to cancel yours.

1. You’re not saving money buying in bulk

One of the tricky things about grocery shopping at Costco is that buying in bulk isn’t the best option for all budgets.

If you’ve got a small family, you might find it challenging to use up what you’ve bought before it expires. There are just four of us in my family, and that was our problem with Costco shopping at first. We eventually found items we use regularly, like kombucha and seltzer water, to make buying them in bulk worth it.

But if you’re throwing away unused food or don’t have enough space to store your Costco items when you bring them home, a membership may not be worth it.

2. You’re not using the additional perks

I’m guilty of this one, but many people get the full benefit of a Costco membership by using perks like discounts on prescription drugs, travel, and even insurance.

For example, Costco says its discounted prescriptions, which can be obtained from pharmacies nationwide, can save members up to 80% off the original costs.

Similarly, if you’re not occasionally using Costco’s travel discounts, then you’re not fully using your membership. For example, Costco Travel currently offers a trip to New Orleans with four nights at a hotel for the price of three, discounted valet parking, and a $50 resort credit if you book by June 30 and travel before the end of the year.

3. You’re overspending

Some recent data shows that Costco members save 33% by shopping at the discount warehouse club versus conventional grocery stores. But it’s entirely possible to blow your budget on impulse purchases, too.

If you’re the type of person who sees a discount and feels the need to make a purchase, a Costco membership could cost you. For example, the current $49 discount on an iPad Pro at Costco is a good discount, but it still has a hefty price tag of $1,249.99.

If you find yourself buying big-ticket items too frequently at Costco because you think you’re getting a good deal, you might want to consider canceling your membership.

4. You don’t buy Costco gas

This isn’t a dealbreaker for everyone. I don’t buy my gas exclusively at Costco, but my family fills up with Costco gas at least once per month.

The average gas price is $3.73 per gallon of unleaded gas right now, up from $3.64 this time last year. If you’re not taking advantage of discounted gas at Costco, you’re missing out.

Costco gas prices can be up to $0.30 cheaper than the national average. With the average vehicle using 489 gallons of gas per year, filling up exclusively at Costco could save you $146 annually. Your membership also includes additional car perks, like free tire installation when you buy four tires from the Costco Tire Center.

By buying some of our gas at Costco and buying bulk items, we save enough at Costco to justify the membership fee. But everyone’s budget is different. There are plenty of other ways to save on groceries, like shopping at Aldi (my personal favorite).

If you’re still deciding whether to cancel your membership, look at your Costco spending over the last three months and see how much you’ve saved from those trips. If you haven’t, or have in fact overspent, it might be time to cancel.

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.Chris Neiger 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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Insurance coverage is crucial to protect the financial security of your business. Keep reading for vital information to help you pick the right policies. [[{“value”:”

Insurance isn’t the most riveting topic in the world of small business finances, but it’s surely one of the most important. Having the right insurance coverage in place can be the difference between being able to carry on operations in the event of a problem (like a lawsuit or a workplace injury) — and having to shut your doors.

According to a survey by NEXT Insurance (conducted by Wakefield Research), 90% of small business owners worry that they don’t have enough insurance coverage — and 30% have no small business insurance at all. Don’t let this happen to you! Here are five crucial tips for picking insurance coverage.

1. Identify the risks to your business

Before you can set up insurance coverage, you need to know what risks your business might actually be facing. For example, it doesn’t make sense to have commercial auto insurance coverage if you don’t drive for work (and you don’t have employees who do, either).

But if you operate your business from home, you’ll likely want to look into expanding your homeowners insurance coverage to include a rider for a home-based business — or perhaps add a separate policy altogether. Liability insurance is also likely a must for you — especially if you interact with customers face to face or produce a tangible product that could harm someone.

2. Consider your staffing situation

If you are a sole proprietor or have a single employee, your coverage needs will be less than that of a business owner with employees. You’ll need to consult with your state’s Department of Insurance, but if you have staff, you will likely need worker’s compensation insurance, unemployment insurance, and possibly disability insurance. Always consider your current and future staffing when you’re choosing insurance — you can get in legal trouble if you have staff and lack the required coverage.

3. Talk to a professional — and get lots of options

Feeling a little lost when you consider all the possible problems you could encounter as a business owner? Good news — there’s help available. A licensed insurance agent or broker will be well versed in the laws in your state (which will influence the type of coverage you need) and can research policy and insurance company options for you.

The National Association of Insurance Commissioners has a tool for looking up insurance agents and brokers in your local area. When you find the right help, don’t be shy about asking questions about coverage options. And consider getting quotes from multiple insurers, because comparing policy premiums is really the best way to save money on insurance. Don’t forget to adjust those deductibles, either — if you feel comfortable increasing a policy deductible from $1,000 to $2,000, you’ll likely end up spending less on your premiums.

4. Rethink picking the cheapest policies

Of course it’s important to save money wherever possible, especially if you’re just starting out with your new business. But automatically going with the cheapest policy option presented to you might not be such a wise move, even if it means a smaller recurring debit from your business checking account.

Instead, dig into the details of that policy to make sure you’re covered in the ways you expect and need. Ask lots of questions if you’re working with an insurance agent or broker to put coverage in place. (Insurance can be confusing!) It’s worth spending a little more for policies if doing so means getting real protection for your business that you feel good about.

5. Don’t forget to check in annually

Finally, don’t assume that insurance coverage is a “set it and forget it” task — it’s not! Instead, you should revisit your coverage details at least once per year. If you change where or how your business operates or add staff, you might need to make changes more often than annually.

Say, for example, you were running your business from your home, but you decide to rent a storefront to sell from instead of mailing out orders. You also hire a few staff members. Now you might need commercial property insurance, perhaps more general liability insurance, and you also need the legally required insurance for employers that we discussed above.

Stay on top of your coverage needs — it would be a shame to find out after a disaster that you didn’t have the coverage necessary to pay your expenses and ensure your business can continue operating. And in the case of something like worker’s compensation insurance, you could even find yourself in legal hot water if you go without.

There are a lot of plates to keep spinning if you’re running a small business. You deserve the peace of mind that comes from knowing you’ve got the right insurance coverage — so follow these tips to put it in place.

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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 positions in and recommends XRP. The Motley Fool has a disclosure policy.

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Want to save time and money on tax prep, bookkeeping and managing business finances year-round? Get accounting software! See how it can help your business. [[{“value”:”

This question might make many small business owners squirm: Are you still doing your accounting, invoicing, and other bookkeeping tasks with manual spreadsheets? If so, why are you making life so hard for yourself?

And I’m not claiming any high ground on this issue! I still do a shocking amount of bookkeeping, invoicing, and other financial tasks for my business with manual spreadsheets and processes. But I’m a solopreneur/freelancer, and so my business finances are easy to manage. If you have a solo business like me, it might feel “good enough” (for now) to manually track your own numbers and make your own spreadsheets to share with your accountant at tax time.

But most small business owners should consider getting accounting software. Stop suffering and start saving time (and money) during tax season and throughout the year. And even if you, like me, love your spreadsheets and feel like you’ve got a good system in place? You can probably benefit from accounting software, too.

Let’s look at a few reasons why choosing the right accounting software is the best thing you can do for your small business accounting.

Accounting software saves you time, money, and stress

Most of the best accounting software programs will help you track your business income and business expenses automatically without you having to create spreadsheets and do manual data entry.

Small business owners are some of the busiest people on Earth. You’re already thinking about so many things every day. Why add one more to that list? Wouldn’t you rather save a few hours per month and let the magic of modern business software take these tasks off your plate?

Accounting software can be “right-sized” for your business

Account software can help you if:

You have employeesYour business manages inventoryYou have to track sales taxYou have any other complex, higher-level accounting needs

The best accounting software tools have a wide range of features and different recommended plans based on your number of employees. Some accounting software also includes bill pay and payroll software, so you can run payroll and manage other aspects of your business finances all in one place.

If you’re a solo entrepreneur, professional services provider, or freelancer (like me), you might have simpler business finances, but still want to save time on tax prep and invoicing. You can choose a lower-cost “light” version of accounting software that gives you just what you need, without all the advanced features.

Don’t assume that accounting software is complicated to use and expensive. Even if you need to have a call with the accounting software sales team, you can quickly get help to figure out which plan is the best fit for your business. And if you need to power up your business’s accounting software as your company grows, you can do that.

Accounting software connects with your bank accounts

Probably the biggest immediate benefit that every small business owner will get from accounting software is that the software automatically connects to your bank. Check to make sure your bank is compatible with the accounting software, but assuming it is, the accounting software will integrate with your business checking account (and often your business credit cards) to track your business transactions.

You don’t have to worry anymore about downloading your business expense transactions into a manual spreadsheet. The best accounting software can keep track of all the numbers for you 365 days per year.

Accounting software can work with your accountant

You don’t have to choose between accounting software and your favorite accountant! You can still get the benefits of professional tax help from a real human along with the time-saving support of accounting software. Several of The Ascent’s picks for best accounting software have features that let you share your business finance data directly with your accountant.

Bottom line

I still love my clunky, manual, self-designed spreadsheets for tracking my small business finances, and maybe you do, too. But this year, I’m going to think seriously about signing up for accounting software. Even if your company has just one staff member, and especially if your business has multiple employees, accounting software is becoming a must-have for every business owner. The best accounting software can help you crunch the numbers, track the transactions, and balance the books.

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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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Rates on savings accounts are already falling. Read on to learn why now is the time to open a high-yield savings account if you haven’t yet. [[{“value”:”

Have you opened a high-yield savings account (HYSA) yet? Savings account research from The Motley Fool Ascent from last year found that just 31% of Americans have an account paying an (annual percentage yield) APY of 4.00% or higher. Earning a substantial APY on your savings is a great way to make passive income and ensure your money doesn’t lose value due to inflation.

Speaking of inflation, that’s the reason we’re seeing APYs in the 4.00% and 5.00% range these days. The Federal Reserve raised the federal funds rate 11 times between 2022 and 2023 to address sky-high inflation. But as of the last Consumer Price Index report, inflation stood at 3.4% — a far cry from its peak of 9.1% in June 2022.

So the Fed might be lowering that rate later this year. And since the APYs banks offer tend to be influenced by the federal funds rate, we’re already seeing savings accounts rates start to fall. Read on for my own experience, as well more information about bank account options that pay solid APYs.

My HYSA’s rate has already fallen

I opened my high-yield savings account a little over two years ago, and in that time, I watched its APY soar to a height of 4.35%. Unfortunately, in the last few months, that rate has inched downward, and I’m currently earning 4.20% on my savings. I was fortunate enough to spend the last year and a half padding the account in preparation to buy a home and watched the interest I earned on it mount over time.

So seeing the rate fall a little bit now isn’t a tragedy. I benefited from that higher rate for a long time, and I reaped the rewards in the form of passive interest income that landed in my account every month.

And I know I’m not alone in seeing a lower rate now — data from the FDIC shows that as of April 15, the average rate for all savings accounts was 0.46%. But a few months prior in January, that number was 0.47%. This isn’t a huge change — but neither was the loss of 0.15% from my account’s APY. (And incidentally, that low average also reflects the many big banks that pay just 0.01% on savings accounts — which should help convince you that opening a HYSA at 4.00% or better as soon as you can is a good idea.)

Is a HYSA right for you?

Honestly, I don’t think there’s anyone who couldn’t benefit from a high-yield savings account — they’re easy to open, easy to use, and the best ones come without pesky maintenance fees. The one fly in the ointment for many HYSAs with online banks is difficulty accessing your cash — you’ll likely have to transfer it to a checking account either with that bank or another, then take it out. But maybe you want more features than a HYSA can offer you, while still getting to take advantage of the higher APYs we’re currently enjoying. Consider these accounts instead.

Money market accounts

If the thought of being unable to access your savings without jumping through additional hoops is keeping you from opening a HYSA, how about a money market account instead? These are interest-earning accounts that have features of both checking and savings accounts. You get the higher interest rate of a HYSA (and the limited number of transactions allowed per month under Regulation D rules). But you also get access to your money via check-writing privileges or even an included debit card.

So if you need to dip into your savings to cover a bill or make a purchase, there are no extra steps required — write a check or whip out your debit card. You might have to open an MMA with a higher deposit or maintain a certain balance in the account, however — this makes them less ideal for people who are just getting started with building savings.

Certificates of deposit (CDs)

Let’s say you’ve got a pool of cash saved for a certain deadline — maybe a home purchase in two years. If you want to earn a set interest rate on it without putting it at risk of loss in the stock market (short-term investing can be unreliable), a 2-year CD might just be perfect for you. When you open a CD, you agree to lock up your money for the duration of the term (typically three months to five years, but you can find shorter and longer ones out there) in exchange for earning that fixed interest rate.

That can be a double-edged sword — the threat of early withdrawal penalties might be enough to compel you to leave the cash alone, but if you need the money for an emergency, it stinks to pay a penalty to take it out. For this reason, CDs might also not be the best fit for beginning savers — they can be a good option if you won’t need to add to the money in the account or take any of it out during the term, though.

No matter your savings goals — be it to build savings, access cash, or lock money up for a predetermined length of time — you have several excellent types of bank accounts to choose from. And thanks to that higher federal funds rate we talked about, many high-yield savings, money market, and CD accounts are paying around 5.00% right now. Don’t delay — explore your options today!

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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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There’s never been a better time to get started, if you’re CD-curious. Keep reading to see why you shouldn’t delay. [[{“value”:”

Certificates of deposit (CDs) are red hot right now — and it’s not hard to see why. Thanks to a series of rate hikes by the Federal Reserve in an attempt to cool inflation, we’re currently living with a higher-than-usual federal funds rate. This number doesn’t directly influence bank account APYs, but the two tend to move in concert.

While rate cuts were originally widely predicted for 2024, we’ve now made it almost halfway through the year (can you believe it?), with no rate cuts yet. And it looks as if the Federal Reserve is content to kick the can down the road.

That said, the higher rates on CDs we’ve seen as a result have already started to fall these last few months. So here’s why opening a CD sooner rather than later is a good idea, if doing so is on your radar — and why a CD may not be a great fit for you.

Going, going — gone?

I don’t mean to alarm you, but if you’re hoping to jump on the CD bandwagon, you might not want to wait. In fact, rates on CDs are already falling, according to data collected by the FDIC (which tracks average rates on bank accounts). As of April 15, 2024, the average rate on a 12-month CD was 1.81%. But just three months prior in January, that average was 1.86%.

This isn’t a huge drop — but it is indicative that rates are on the decline across the board. Our list of the best 12-month CD rates has numerous options paying over 5.00% APY, so if you want to open one of these, now is the time to act.

Is a CD a good idea for you?

Before you rush to open a CD and lock in a high APY, slow down and consider whether investing in CDs is even right for you. Depending on where you are in your personal finance journey, they might not be.

When you open a CD, you’re effectively agreeing to lock your money up for the duration of the term — be it three months or five years. And if you don’t have a lot of cash available to cover unplanned expenses, this could leave you in a bind. If you need to break your CD term early, you’ll owe a penalty. The amount you’ll pay will depend on the CD’s term, but it could be anywhere from a few months’ worth of interest to a year’s worth or more for longer-term CDs.

What are your other options?

Luckily, if you want to profit from today’s higher rates, CDs aren’t your only option. You can open a high-yield savings account with as little as $0, making them great for new savers. Just note that the best rates are offered by online banks, and it might be harder to access your cash in an online savings account. For the best results, consider linking a checking account to the savings so you can easily and quickly transfer money to it, and make sure any bank you’re considering has in-network ATMs in your area.

And if you foresee needing easier access to your cash than a savings account can give you, consider money market accounts. These are like a hybrid between checking and savings and come with a debit card or check-writing privileges. Some have higher opening deposit requirements, however.

There are many ways to benefit from higher APYs on deposit bank accounts available now — don’t assume CDs are the only option. That said, if you’re eager to get started with CDs, don’t delay — explore the available APYs and terms today and choose the right ones for you.

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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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Doing laundry sucks. But the right approach makes it so I’m not constantly replacing kids’ apparel. Read on to learn more. [[{“value”:”

In the grand scheme of having to clothe a trio of kids, I have it easy. My children, for the most part, aren’t particular about clothing brands, so it’s not like I’m constantly having to explain why they can’t have $90 sneakers or a $75 sweatshirt.

But still, I can’t exactly send those little beings out into the world naked. So every year, I’m forced to open up my wallet and purchase clothing to replace the items they’ve recently outgrown.

Now, I’ll be the first to admit that I don’t invest a lot of money into my kids’ clothing on a piece-by-piece basis. The way I see it, why spend $30 on a pair of jeans my kids might outgrow in nine months when I could buy a cheap $12 pair instead?

And also, at times, I have splurged on the more expensive version of whatever kids’ item I was buying only to find that it wasn’t any higher in quality than the low-cost version. So at this point, it’s $5 T-shirts for everyone.

But even though I don’t spend a ton of money on kids’ clothes on a per-item basis, it’s a big expense in my budget nonetheless. And I try to do what I can to minimize the amount I have to spend. To that end, I’ve adopted a laundry strategy that makes my life a bit more miserable but is definitely a big source of savings.

When it’s worth it to do the extra work

Like I said, kids’ clothing is generally made pretty poorly. In fact, part of me is convinced that manufacturers add special materials that are expressly designed to ensure that every single item you throw into the dryer shrinks to the point of being unwearable.

In the past, I’ve had situations where drying a shirt or pair of pants once causes the item to shrink. And I do read the instructions on the labels, most of which say “tumble dry low.” That’s a load of bull. “Tumble dry low” is really just code for “Say goodbye to this outfit and go buy a new one.”

So now I hang my kids’ clothing on drying racks rather than throwing items into the dryer. Does doing this suck up more of my time? Yup. But does it save me hundreds of dollars per year? Also yup. So I’m willing to do the work to free up more cash for my savings account.

And it’s not just the money. It takes time to find clothing that fits my kids. So when I find something that works, I want to keep it around as long as I can. And I’m willing to spend an extra hour or so per week hanging clothing to dry to spare myself the expense and the hassle of buying replacements.

Sometimes, your time is worth more

As a self-employed individual, I’ll admit that there are plenty of household tasks I outsource to free up more hours to work. Sometimes I’ll order takeout if I have a lot of projects happening because even though I might spend $40 on a meal I could cook for $15, if it frees up an hour and lets me earn an additional $100, it’s worth losing $25.

There are times when I question my practice of hanging out my kids’ laundry because it really does eat into my work time to some degree. But in this situation, I’m not saving myself just money but also the time of not having to hunt down replacement items. So all told, this strategy makes sense.

Of course, the really neat thing is that my kids have finally reached an age where they can help with the laundry. So some weeks, I’m not the only one draping damp shirts over a drying rack — I have three helpers assisting with the process. And there’s really nothing more cost-effective than outsourcing household tasks to your kids so that you can spend more time working.

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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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