Money Management

Buying your first home? Read on to see why it pays to join Costco. [[{“value”:”

Buying a home for the first time can fuel a lot of changes in your life. You may need to adjust your budget to account for the costs you’re taking on, and you may decide to put your new kitchen to good use by doing more cooking at home.

Another change a home purchase might fuel is joining Costco. A basic Costco membership will cost you $60 a year, while an upgraded Executive membership will cost $120. With an Executive membership, you get 2% cash back on your Costco purchases. But no matter which membership you choose, here are a few ways you can benefit from joining Costco as a newly minted homeowner.

1. Home installation services

Need new blinds for your home? Want to replace worn flooring or carpet? Costco’s got you covered, thanks to its wide array of home installation services.

Whether you need a new air conditioning system or want to install a water softener, going through Costco could make the process seamless and affordable. Plus, many of these services give you a Costco Shop Card as a bonus. That’s free money you can use at the store for whatever purchases you need to complete your new home, from furniture pieces to kitchen gadgets.

2. Low-cost bulk cleaning supplies

Part of maintaining a home is making sure it’s kept clean. In that regard, Costco can help with its great discounts on bulk cleaning products.

Clorox all-purpose cleaner, for example, is only $0.11 per ounce online when you buy it from Costco in bulk. And that means it’s bound to be even cheaper in the store. At a local supermarket, you may be looking at $0.17 per ounce.

Similarly, Costco makes it easy to buy paper towels in bulk for those inevitable spills, or to make the house-cleaning process easier. A bulk online purchase gives you access to Bounty at a price of $4.57 per 100 square feet. At a regular supermarket, you might pay $5.35 per 100 square feet.

3. Affordable appliances

Costco carries a wide range of appliances, from washers and dryers to refrigerators to stoves. If you’re buying an older home whose appliances have seen better days, Costco could be a good source of affordable replacements.

The upside of buying appliances from Costco is that delivery and installation are always included in your purchase price. Costco will also haul away an unwanted appliance you’re replacing for free, and you’ll get an automatic two-year warranty included in your purchase.

4. Access to homeowners insurance

If you’re taking out a mortgage to buy your home, you’ll need a homeowners policy for that loan to go through. And even if you’re a cash buyer, it’s still crucial to have homeowners insurance so you’re protected in the event that your property sustains damage.

One lesser-known Costco benefit is that your membership may give you access to affordable insurance for your house or condo. And Costco’s homeowners policies offer additional benefits like home glass repair reimbursement and lockout assistance.

A Costco membership could pay off big time if you’re new to owning a home. Keep these benefits in mind as you decide whether to sign up.

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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Accidents with uninsured drivers cost everyone involved. Here’s what happened when one hit my husband several years ago. [[{“value”:”

Shortly before my husband and I met, he was driving home one night when the driver in the oncoming lane swerved over the centerline and hit him. Luckily, no one was seriously hurt, though both cars were totaled.

The police showed up and quickly determined that the woman driving the other vehicle was heavily intoxicated. Since she caused the accident, she was responsible for the damages to my husband’s vehicle. But she didn’t have auto insurance, even though it’s a legal requirement in our state. It wound up causing massive financial headaches for both drivers — one that’s still not cleared up more than a decade later.

What happened next

The woman didn’t have the cash she needed to pay for the damages, so my husband had to file a claim with his own auto insurance company. This raised his premium. He’s pretty handy, so he decided to repair the car himself. He did it, but it cost him even more money out of his own pocket because the payout he got from his insurer didn’t cover all the parts he needed to fix it.

The driver who caused the accident faced even worse consequences. With an accident, a DUI, and driving without insurance on her record, she almost certainly couldn’t find a cheap car insurance policy for a long time afterward. She also had no help paying for her own vehicle repairs.

She wasn’t off the hook for my husband’s bills either. To this day, he still gets a portion of her tax refund, though most payments don’t amount to much. It could easily be another decade before he recoups all that he’s owed.

What you can do to protect yourself against uninsured drivers

Roughly 14% of all U.S. drivers don’t have car insurance, even though nearly every state requires it to drive legally. In some states, a quarter of drivers are uninsured. So getting hit by an uninsured driver is always a possibility. There are steps you can take to prepare yourself, though.

Get uninsured/underinsured motorist coverage

This protection is required in some states and it’s an optional protection in all the others. It pays for your medical bills if you’re injured by a driver who lacks insurance or one who doesn’t have enough insurance to cover the full cost of the damages.

Usually, your coverage limits for this are tied to your bodily injury liability coverage limits. For example, if you have $25,000 of bodily injury liability coverage per person and $50,000 per accident (known as 25/50 coverage) and you opt into uninsured motorist coverage, the insurer would automatically give you 25/50 coverage for this as well.

Consider collision coverage

If an uninsured driver hits you and cannot pay, you’ll need collision coverage to pay for the damages to your own vehicle. This is an optional protection, though your lender or lessor may require you to have it if you have a lease or loan on your vehicle.

There is a deductible associated with this coverage, but you usually have several options to choose from — often between $100 and $2,000. A low deductible sounds appealing because it reduces your out-of-pocket costs in an accident, but this raises your monthly premiums.

Build an emergency fund

If you have to file a collision claim with your insurance, you’ll need to pay for your deductible out of pocket. Even then, if your car is totaled, the payout you get might not be enough to cover the cost of a new vehicle. Having emergency savings on hand can make this situation a lot less stressful.

Ideally, you’d have three to six months of living expenses saved. Some people feel comfortable setting aside even more. But at a minimum, aim to save at least enough to cover your collision deductible.

Hopefully, you never find yourself in the situation my husband did. But if it does happen, the above steps will minimize the toll it takes on your wallet. If you’re struggling to find affordable rates on insurance, compare quotes from some of the best insurance companies to see which offers the cheapest deal. Get quotes from three to five companies before deciding which you want to work with.

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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 find a more unique way to earn interest on your savings? Check out money market accounts — the best APYs are at 5.00% or higher. [[{“value”:”

Do you want to earn a higher yield on your cash savings? Now that the Federal Reserve appears unlikely to cut interest rates in the immediate future, it remains a good time to open a high-yield savings account. Savers have more options for how to earn a return on their cash, whether it’s certificates of deposit (CDs) or high-yield savings accounts. But there’s another type of savings account that should be on your radar: money market accounts.

According to Bloomberg reporting, during 2023, investors moved a total of over $1 trillion of cash into money market funds — a type of investment that uses short-term securities like U.S. Treasuries and other government bonds. Money market accounts work in a similar way and are FDIC-insured like a typical bank account.

But many everyday savers might not know about money market accounts or understand how they work. Let’s look at a few reasons why the best money market accounts should be part of your financial plans.

Money market accounts: Earn up to 5.30% APY

As of May 14, 2024, the best money market accounts are paying 5.30% annual percentage yield (APY). This means that if you put $10,000 into the account today, after one year, you’d have earned $530 of interest (assuming interest rates stay the same).

Money market accounts can often earn higher yields than typical bank savings accounts can because they invest your cash into low-risk, short-term “money market” investments like CDs, government bonds, and other cash equivalents. Your money makes money by being invested in “the money markets” — but without the risk of loss. You can’t lose money with a money market account as long as you keep your investment below $250,000 (the limit covered by FDIC insurance in case of bank failure).

For most everyday people trying to save money and earn a higher yield on their cash, money market accounts can be a great choice. But this type of savings account is often overlooked because people think the only way to earn decent interest is to open a CD.

How to pay bills with money market accounts

Another useful feature of money market accounts is that they typically give you flexible access to your cash. Some money market accounts offer debit cards or check-writing abilities so you can use it to pay for purchases.

Be aware of monthly limits on the number of withdrawals you can make. Many banks might limit you to only six “convenient withdrawals” per month from your money market account or other savings accounts. Money market accounts should not be considered a replacement for a checking account. But if there’s a big expense you’re saving up for, like a home improvement project or vacation, you could use your money market account to earn high interest while you save up, and then pay the bills directly from that same account.

Are money market accounts better than savings accounts?

When you compare the best money market accounts with the best savings accounts, you might actually get a higher APY with a savings account. The best savings accounts (as of May 11, 2024) are paying up to 5.36% APY. That’s 0.06% higher than the best money market account (5.30% APY).

Money market accounts aren’t always better than the best savings accounts. But if a money market account will give you a debit card or check writing privileges, and you enjoy having that convenient access to your cash, the money market account could be a better choice even if the APY is the same or slightly lower.

Why choose a money market account instead of a CD?

The best CD rates (up to 5.15% APY as of May 11, 2024) are also competitive with — and sometimes higher than — the best money market accounts. And while CD interest rates are fixed (guaranteed for the length of the CD’s term), money market rates can go up or down based on changes to interest rates and market conditions.

But CDs force you to lock up your money. You have to commit your deposits for a specific period of time (which could be a few months or multiple years). And if you need to take out your cash sooner than that, you’ll owe early withdrawal penalties.

Money market accounts can give you higher APYs than many of the best CDs, but without the commitment and penalties.

Bottom line

Most people have probably heard of CDs and savings accounts, but money market accounts might not be top of mind for everyday savers. That’s too bad, as these accounts are worthwhile and underrated.

Money market accounts pay high interest and offer unique features that can give you extra flexibility to access your cash while still enjoying the safety of FDIC insurance. If you want 5.00% APY (or higher) on your savings, consider opening a money market account.

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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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A $1 million nest egg is attainable if you commit to that goal early. Read on to learn more. [[{“value”:”

Early retirement can mean different things to different people. For one person, it might mean stopping to work at age 55. For someone else, it could mean calling it quits at 48.

Age 60 doesn’t constitute a super-young retirement, but it’s on the younger side. And it’s kind of hard to retire before age 60 due to the sheer fact that you generally can’t tap your IRA or 401(k) without penalty prior to age 59 1/2 anyway.

Now, to pull off a retirement at age 60, you may want to make sure you have $1 million saved. The reason? If you exit the workforce at that age, you may be looking at another 20 years, 30 years, or more of paying bills. So you need a decent chunk of cash to avoid financial worries.

The good news is that it’s more than possible to retire at 60 with $1 million — even if you don’t start saving and investing money the second you start earning a paycheck.

A surprisingly simple path to $1 million

You’ll often hear that retiring with a lot of money requires you to start saving at a very young age. That’s a good thing to do, but you’re not necessarily doomed if you didn’t start funding an IRA the minute you began working full-time. And let’s be real — it’s tough to do that in your 20s when you’ve got bills to pay on an entry-level salary and possibly leftover debt from college.

But let’s say you first start saving for retirement at age 30. Believe it or not, you can still get to $1 million by age 60 pretty easily.

All it takes is a $507 monthly contribution to a retirement plan like an IRA or 401(k). But there’s another important piece of the puzzle — choosing the right assets for your investment portfolio.

Over the past 50 years, the stock market, as measured by the performance of the S&P 500 index, has delivered an average annual return of 10%. That return accounts for years of great performance, mediocre performance, and poor performance.

To end up with $1 million after 30 years of making $507 monthly contributions to a retirement plan, your portfolio needs to deliver that same 10% return during your savings window. But if you go heavy on stocks, there’s a reasonable chance of scoring that return — and getting to leave the workforce at age 60 with a cool $1 million to your name.

Of course, you’re probably aware that investing in stocks carries some risk. But remember, the 10% return above accounts for plenty of market downturns. If you give yourself a pretty long savings window, you have time to ride out market declines and come out ahead — and in this context, a 30-year window fits that bill.

How to invest in stocks when you’re not sure how

We’ve covered the numbers — $507 a month over 30 years could bring you to $1 million if you assemble a portfolio that delivers a 10% yearly return. But what if you don’t know much about picking stocks? How are you going to pull off a return that high?

Actually, that’s not so hard, either. See, instead of putting your money into individual stocks, what you can do instead is invest in the stock market on a whole by buying shares of an S&P 500 ETF, or exchange-traded fund. This gives you exposure to the 500 largest publicly traded companies.

Remember earlier how we said that the stock market’s average return over the past 50 years is 10% annually as measured by the S&P 500 index? Well, investing in that index specifically is a great route to take if you’re not comfortable with the idea of hand-picking individual stocks for your portfolio but want the strong returns the broad market has historically produced.

If you’re able to research stocks individually, you might manage to score a higher return than what the broad stock market produces. But if you’re happy with 10%, then go for an S&P 500 ETF — especially if you find that easier.

So there you have it. You may not be able to retire with $1 million at age 42 or 53 if you only save somewhere in the ballpark of $500 a month starting at age 30. But a retirement at age 60 with $1 million to your name is more than doable even if you don’t start funding your IRA or 401(k) the second you start working.

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!

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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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