Money Management

When you’re saving for a far-off goal, investing is almost always your best bet. Read on to see more. [[{“value”:”

Seeing as how the cost of everything from housing to groceries to healthcare is downright exorbitant these days, it’s hard to imagine being in a position where you’re sitting on $10,000 that isn’t earmarked for incoming bills. But maybe, just maybe, you’re in that fortunate position due to a generous gift from a family member, a bonus at work, or careful financial planning of your own.

Either way, if you have $10,000 on hand, you may be hesitant to invest it. After all, that’s money you could be using to improve your life in the near term. And let’s be real — investing in stocks carries some risk. So if you’re finally in a place where you’ve gotten your hands on some money, you may not want to just throw it into the stock market and hope for the best.

But one thing you should know is that by not investing in stocks, you’re doing yourself a disservice by denying your money the chance of immense growth. And once you see what a $10,000 investment could turn into over 30 years, you may be more eager to embrace the idea of owning stocks.

How does 17.5-times your initial investment sound?

Over the past 50 years, the stock market, as measured by the performance of the S&P 500 index, has generated an average annual 10% return. So if you put $10,000 into the market today and wait 30 years, there’s a strong chance you’ll enjoy a similar return. And if so, you could turn your $10,000 into almost $175,000.

Now let’s compare that to keeping money in savings. Today’s savings account rates aren’t the norm, so let’s assume that keeping your $10,000 in cash results in an average annual 2% return over 30 years. In that case, you’re growing your $10,000 into about $18,000.

And hey, look, that’s more than what you started with, so that’s a win by itself. But when you compare $18,000 to $175,000, well, there’s really no comparison.

Ways to make stock investing less risky

Of course, the benefit of keeping your money in cash is that you don’t risk losing it provided your bank is FDIC-insured. There is a risk of losing money in the stock market.

But you can mitigate that risk in a few ways:

Invest over a long period of time: The 10% average annual return mentioned above accounts for many periods of stock market declines. But ultimately, during the past half-century, the market’s gains have clearly outpaced its losses.Aim to maintain a diversified portfolio of stocks: One really easy way to do this is to load up on S&P 500 ETFs, or exchange-traded funds. This way, what you’re basically doing is putting your money into the broad market rather than limiting yourself to a handful of stocks that may or may not perform well.

Northwestern Mutual says that the average baby boomer has $120,300 saved for retirement. If you’re able to put $10,000 into the market today and leave it be for 30 years, you may end up with considerably more from that single investment alone. So even if buying stocks doesn’t exactly land in your comfort zone, it’s worth pushing yourself for the financial upside.

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There’s one pickup truck that will cost you a lot to maintain. Read on to find out how to save on car ownership costs. [[{“value”:”

I once bought a used Nissan Altima for $4,000 and drove it for more than 10 years. Over the years, I did some minor repairs myself and one major engine repair (I let the mechanic take that one), but none of them broke the bank.

I saved thousands doing some of the repairs myself, but the real savings came from buying a reliable car. Unfortunately, not all vehicles are created equal in this area.

While luxury cars are often the most expensive to repair, you might be surprised to know that a certain pickup truck is the costliest to maintain.

The Dodge Ram 3500 is the most expensive to repair

According to CarEdge, the heavy-duty Dodge Ram 3500 pickup truck costs $25,844 to maintain and repair over the first 10 years of ownership. That’s an average of more than $215 per month in the first decade. Not great!

The data shows a 79% chance the truck will need a major repair in the first decade, much higher than other pickup trucks. It’s not cheap to insure, either. The Ram 3500’s average annual auto insurance cost is about $1,989.

I’ve been picking on the Ram 3500, but the Porsche Cayenne is another expensive vehicle to own. CarEdge says the 10-year average maintenance costs are $20,552 — or $1,712 annually! The Cayenne’s insurance costs will also put a dent in your wallet. The average annual insurance for the SUV will set you back $2,471.

I’ll stick to my boring Honda CR-V, thanks.

Auto repair and insurance costs are rising

I hate to be the bearer of bad news, but both auto repair and insurance costs are on the rise. And they’re not coming down anytime soon.

Car repair costs have jumped 33% over the past four years. Even more shocking, car insurance prices are up 26% from last year.

There isn’t much you can do if you own a car that’s expensive to repair besides sell it. But you have a lot of control over how much you pay for insurance.

Shopping around is one of the best ways to find cheaper car insurance. Consumer Reports data shows drivers are often more satisfied with their new insurance provider, too. That’s a win-win!

Don’t make the same mistake I did

When I first started paying for my own car insurance policy after graduating from college, I made a big mistake.

I didn’t compare quotes before buying insurance.

I simply went with my parents’ insurance provider and kept the same coverage. Huge mistake. I ended up paying way too much for coverage I didn’t need for years.

Thankfully, I eventually got another quote and significantly lowered my insurance costs. I even bundled home and auto insurance to get a better deal.

I’m still applying that lesson years later. I recently got another quote from a different insurance provider and found I could lower my annual insurance premium by about $384. I’ll be switching soon.

Whether you drive an expensive or cheap car, comparing quotes will likely help you find a better deal. And with rising vehicle repair costs, now could be a great time to switch and save money on at least one aspect of car ownership.

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I’m about to set sail on a family vacation, and the costs can certainly add up. Here are a few ways to make it easier on your wallet. [[{“value”:”

In a few weeks, I’ll be setting sail with my wife, kids, and several friends and relatives on an eight-night Caribbean cruise on the Carnival Mardi Gras. It’s a trip we’ve been planning for some time, as it’s to celebrate my aunt’s 65th birthday.

As you might already know — especially if you have kids — getting away for eight nights as a family of four can get expensive quickly. And while this trip certainly wasn’t the cheapest family vacation we’ve ever booked, as an avid cruiser, there are some things I made sure to do in order to manage the costs.

1. We’re paying in advance — for as much as possible

One general rule of thumb, whether you’re talking about beverage packages, internet plans, spa treatments, or specialty dining reservations, you can often keep your vacation budget intact by booking them ahead of time.

As an example, the CHEERS! beverage package costs $59.95 per day, per person if booked online before the cruise, or $64.95 per day, per person if booked on board. On an eight-night cruise, booking ahead of time can save you $40 per person.

Another example is the Premium internet plan, which costs $21.25 per day when booked in advance, or $25 per day on board. There are other examples, but the general rule is that the more you can pay for in advance, the better. Plus, there are often combination deals, such as an additional 10% off wifi if you purchase it along with a spa treatment.

2. We’re sharing one internet plan

When I’m on a cruise — especially a longer one like this — I want to stay in touch with the outside world. But not that in touch. I want to be able to check my email a couple times a day, as well as the ability to write for an hour or two on sea days. And I don’t want my kids’ faces buried in screens for more than a few minutes here and there.

For this reason, my wife and I usually share a single internet plan, which many cruisers don’t realize is a possibility. The process varies by cruise line, but using Carnival as an example, you have to log in using your unique guest folio number. If I’m signed in to the internet, my wife can simply sign in with my folio number and it will boot me off and allow her to use it.

Of course, if you’re planning to work quite a bit, or if you have small children at home staying with relatives, it can certainly be worth buying your own internet package to keep in touch. But if you don’t need constant connection, it can save a significant amount of money to share.

3. We booked a cruise within driving distance

One of the itineraries we originally had our eye on this summer sailed out of San Juan, Puerto Rico. And while the cruise was roughly the same price as the one we ended up booking, we still had to get to the ship. Conservatively, round trip airfare to San Juan would have cost $2,000 for my family. Instead, we’re sailing out of Port Canaveral (near Orlando), which is a six-hour drive from my house, and much easier on my checking account.

Of course, this isn’t an option for everyone. If you live somewhere like Nebraska, you’re probably going to have to fly to your cruise. But if you live anywhere along the coasts, there’s a good chance there is a cruise port within a reasonable driving distance.

4. We aren’t doing shore excursions at every port

Last but certainly not least, shore excursions (organized activities booked through the cruise line) can get expensive.

In some ports, they are more essential than others. For example, it’s generally not recommended (by me or the U.S. Department of State) to simply wander around some of the port towns in Jamaica, due to safety concerns. But there are some ports where it’s perfectly safe, and rather easy to simply take a cab to a beautiful beach. Instead of booking an expensive shore excursion, we’re planning to enjoy a relaxing beach day at two of the three ports on our cruise.

Plenty of ways to save

This is by no means an exhaustive list of the ways you can save money on a cruise. For example, if you’re thinking about booking a spa treatment, you can typically get a deal once you’re on the ship if you’re willing to go on a day when the ship is in port. There are also plenty of free things to do on board that many people aren’t aware of — for example, Carnival holds arts and crafts classes for families throughout the cruise. You can also book a “guaranteed” stateroom instead of picking your exact location, and doing so can save you hundreds of dollars.

The bottom line is that a cruise vacation can be expensive, or it can be an economical way to see several places in a single trip. By taking steps to manage expenses, it might be more affordable than you think.

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Unless you have a limitless budget, you’ll probably retire on a somewhat fixed income. Check out some ways to make that retirement more comfortable. [[{“value”:”

According to a survey by Greenwald Research, 52% of workers have calculated how much money they’ll need in retirement and have started to save more as a result. Given that one-third of those surveyed say they have less than $50,000 put away in savings and investments, now is a good time to begin to systematically tuck funds away.

How much money we end up with in retirement may vary. What matters is making the money we have work for us. Here are some ways to make that a reality.

Create a comprehensive financial plan

Add up all your sources of income. Include Social Security, pensions, and any investment income you expect to have in retirement. The first step in developing a budget that fits is knowing how much money will be coming in each month.

Next, create a detailed budget. It’s fine to put pen to paper, but if it’s easier, there are also great budgeting apps that make it easy to track where your money is going. Include all your regular expenses, including housing, utilities, transportation, food, and healthcare.

Once you have your essential expenses plugged into your budget, figure out how much you’ll have left over each month for extras, like dining out, travel, and entertainment.

Make the numbers work

Does it all fit? Is your income high enough to cover your expected expenses? If not, you have options, including the following.

Jettison debt

Ideally, you’ll go into retirement with little or no debt. If you currently carry an auto loan, credit card debt, or personal loans of any kind, double down on your efforts to pay those off before your retirement date arrives.

Plan for emergencies

One of the most basic rules of personal finance continues to apply throughout retirement: Have a solid emergency fund in place. That way, if your roof needs repairs, your car’s transmission fails, or you must make an emergency trip out of town, you’ll have enough money in savings to cover the expense instead of putting it on a credit card and getting tangled in high-interest debt.

Refinance

If you will have your mortgage paid off in full before retirement, congratulations! The rest of us will need to find a way to keep our monthly payments as low as possible. One possibility is refinancing the loan when interest rates drop. Suppose you originally took out a mortgage with a 5.5% APR to purchase a $400,000 home. On a 30-year mortgage, your principal and interest payment would be $2,271 per month.

As you get closer to retirement, the average interest rate drops to 4%. What’s better, you’ve had the mortgage for years and now owe $275,000. If you were to take out another 30-year mortgage, your principal and interest payment would drop to $1,313 per month, cutting $958 from your monthly budget.

Decide if a move is in order

Maybe once you’ve retired, you would rather sell your home (if you own one) and downsize into something easier to manage. Or maybe you want to move closer to family. In either case, relocating to a less expensive area can save you money on everything from gasoline to groceries. You don’t necessarily have to move to another state. Look around your area for less expensive cities in which to reside.

Moving is not for everyone, but if it’s something that interests you, it’s worth examining.

Turn a hobby into a money-making venture

Some folks want to retire knowing they can do anything they want at any time, and that’s great. But if you crave a bit of structure, you can ease financial discomfort by turning a hobby into income.

There are plenty of us who have never learned to knit but would love to purchase knitted items to give as gifts. Many of us don’t know the first thing about hanging a light fixture or repairing a garbage disposal. Knowing there’s a handyperson nearby to call in a pinch is comforting, and we’re willing to pay for their expertise.

If there’s something you truly enjoy doing — whether it’s teaching a foreign language or training dogs — consider offering that service to others who need the help. Not only will you earn money, but you’ll also keep your social skills sharp.

By the time you retire, you will have spent much of your life working hard. Today is a good time to begin planning for those years to be comfortable and rewarding.

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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.Citigroup is an advertising partner of The Ascent, a Motley Fool company. Dana George has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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When I travel by air, I choose economy class tickets. Read on to see why. [[{“value”:”

When my husband and I took a trip to Hawaii years back, we were initially tempted to upgrade our tickets to business class. After all, we were looking at a long flight, and we figured we’d be way more comfortable having the extra space.

In the end, I talked my husband out of flying business class. And while he’s traveled in business class many times over for work purposes, I’ve never taken a business class flight.

Part of that is because I’ve never had an employer cover the cost of a business class ticket. And also, it’s because I refuse to spend my money on business class. Here’s why.

1. I hate flying no matter what

To say I’m a nervous flyer would be putting things mildly. My poor husband is used to having his circulation cut off by my anxious grip every time we take off or experience turbulence. And even though I’ve flown plenty of times, my brain just can’t get comfortable with the idea of being trapped in an airplane 30,000 feet above the ground.

Because of this, it’s just not worth the money for me to spring for business class. I’m going to be miserable on any given flight, no matter what. It’s just how I roll. So why spend $1,500 to be miserable in a more spacious seat when I can save money and be miserable for $500 in a regular seat instead?

2. I can’t enjoy a good meal in motion

One of the perks of flying business class is getting to enjoy a higher-end meal as part of your experience. But I’m someone who can’t really eat more than a few bites of food if I’m in motion. This holds true whether I’m taking a car trip or on a plane — eating more than a tiny bit induces too much motion sickness.

Since I can’t really enjoy a business class meal as a part of a flight, it’s another reason to not upgrade my ticket. Plus, even though business class food might be better than what you get in economy, let’s be real — it’s not the same thing as a gourmet restaurant. Like I said, my husband has flown business class before, and he’d classify most of the meals he’s been served as acceptable but not great.

3. I’d rather spend more at my destination than getting there

Like many people, I have a limited travel budget. So the way I see it, I’d rather spend less money on a flight to free up more money for experiences at my destination. I’d even rather pay less to fly but spring for a nicer hotel room, since I might be staying at a given location for multiple nights, as opposed to taking a five- or eight-hour flight and being done with it.

Should you pay for business class?

There can be definite benefits to flying business class, so to be clear, just because it’s not a worthwhile expense for me doesn’t mean it’s wrong for you. If you’re taking an overnight flight, a business class ticket could give you access to a seat that allows for a decent night’s sleep. That could make it possible for you to enjoy your first day at your destination without feeling totally jet-lagged.

Plus, if you have a long wait between connecting flights, a business class ticket normally gives you airport lounge access. That could make your wait a lot more comfortable.

Of course, you’ll need to weigh the cost of business class against the perks. But you may be able to book a business class ticket for less by using a travel rewards credit card. If you sign up for a new one with a generous welcome offer and meet the spending threshold, you may get enough miles to completely cover an upgraded flight, less taxes and fees.

All told, you don’t necessarily have to write off the idea of business class because of the money, because you never know when the cost to upgrade won’t be so substantial. But if you’re like me, you may want to save your money for other vacation costs and just endure each flight you take in a regular old seat.

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A Costco membership makes sense when you’ll be shopping there often. But is it worth buying a membership for a once-a-year visit? [[{“value”:”

When I first joined Costco, I wasn’t sure how often I’d use my membership. Back then, it was just me and my husband. And while we did our fair share of cooking at home, we didn’t always need to buy our groceries in bulk.

Now that I have kids, keeping a Costco membership is an easy call for me. I generally shop at Costco once a week for groceries and household supplies, like toiletries and paper towels (we go through a lot of those in my house). And so the fee I pay for a membership is more than worth the money because I save more than what I pay for access to the store.

But what if you’re not like me, and you only plan to visit Costco once a year? Is a membership worth paying for? In some cases, it actually might be.

Will you make your money back?

A basic Costco membership costs $60 a year, while an executive membership costs $120. With the Executive membership, you get 2% cash back on your Costco purchases. This means that once you’ve spent more than $3,000 in a single year, the $60 upgrade fee becomes worth it.

If you’re only looking to go to Costco once a year, then you should probably stick to the basic membership. But whether it’ll be worth it to you (or not) will depend on how much savings you expect to reap.

Basically, for your membership to be worth it, you’ll need to save yourself more than $60 on your Costco purchases. But if you plan to load up a truck or minivan with numerous Costco products on your yearly visit, then that might very well happen.

Let’s say you’re able to save yourself:

$7 on bulk paper towels$21 on bulk cleaning supplies$6 on bulk paper plates$15 on a bulk purchase of meat$30 on a new coat

That’s $79 in savings, which means you’re coming out $19 ahead after paying $60 for a Costco membership.

Furthermore, it may be that during your one trip a year, you plan to buy a big-ticket item. If you’re able to save $100 on a laptop or $200 on a new washing machine, then your $60 membership fee is well worth paying.

Consider online purchases, too

You may only end up making it over to Costco once a year because you live far away from your closest warehouse club store. But if that’s the case, don’t forget about Costco.com.

You may find that you end up placing your fair share of online orders. And while you technically don’t need a paid membership to be able to order goods from Costco.com, non-members face a 5% surcharge on the items they purchase.

Generally speaking, the more often you visit Costco, the more value you might get out of an annual membership. In some cases, it doesn’t make sense to pay for a membership if you only plan to go to the store once a year. But if your annual visit results in a lot of savings, then it’s easy enough to justify the $60 cost.

Remember, too, that Costco allows you to cancel a membership at any time and get a full refund. So if you join and find that your one trip doesn’t result in ample savings, you can always cancel before the one-year mark and get your money back.

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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