Personal Finance

Here Are 5 Major Financial Decision to Make Before 30

June 25, 2020 By Tamila McDonald Leave a Comment

For many people, your 20s are spent figuring out who you are and where you want to go in life. Many of the major financial decisions you may during this period have a significant impact on your future. Usually, this is because they have a chance to snowball. You can develop habits that shape your choices down the line, both positive and negative. Ideally, you want to make the process intentional, allowing you to shape your financial future. If you aren’t sure where to begin, here are five major financial decisions to make before you turn 30.

1. Where You Want to Live

This isn’t just about picking a house or apartment. The city and state you choose to call home have a significant impact on your finances. Along with housing costs, your residency can determine whether you pay certain kinds of taxes as well as the cost of living you’ll contend with while you’re there.

Additionally, where you live influences your earnings potential. Big cities tend to offer higher salaries than the same jobs in smaller towns. Whether they come in high enough to offset the cost of living differences varies, but it’s a facet that needs to be explored.

Ideally, you want to select a location that best meets your needs in your 20s. That way, you can transition (if necessary) and start putting down roots in your preferred city.

2. Where You Go to College

Your choice of college impacts your financial future in several ways. First, it determines how much you’ll pay for your education. While the average student loan debt comes in at $32,731, many people end up with much higher balances. It can take decades to pay off a loan, and many people ultimately default, leaving the debt hanging over the head for practically all of their lives.

Second, the college you choose may impact your professional life. A school’s reputation could influence hiring manager decisions, for one. For another, some colleges have more robust alumni amenities, including job placement assistance.

Both of these factors impact your financial life. That’s why you need to think about more than just where you’d like to go to school (or where your friends are going) before you make a decision.

3. Whether You Want to Buy a Home

For some people, buying a home down the road is a must. Even though it means staying in one place for a while, dealing with maintenance responsibilities, and similar obligations, they can’t envision their future any other way.

However, not everyone feels the same. Many prefer the convenience and flexibility renting can offer, so they never plan on making a home purchase.

While you’ll usually spend at least part of your 20s in a rental, it’s wise to decide whether buying a house is one of your goals. It’s a major financial decision, and it takes time to prepare if you want to become a homeowner. By figuring out whether that’s something you want to do, you can start saving right away. Then, when the time comes, you’ll have enough set aside.

4. Whether You Want Children

The cost of having kids can be incredibly high. One estimate showed that raising one child can cost $233,610. That’s a major financial burden.

Even if you don’t want kids right away, it’s wise to consider if you would like to have children in the future. That way, you can start planning for the added cost in advance. Along with setting aside cash in savings, you can make sure that you can support your other goals and needs before you move forward. Otherwise, while you’re trying to cover childcare and healthcare for your kids, you might find yourself forgoing retirement savings, leaving you in a bind down the road.

5. What You Want Retirement to Look Like

When it comes to saving for retirement, time is both your friend and your enemy. The earlier you start, the bigger difference compound interest makes, potentially allowing you to use smaller monthly contributions to reach your goal.

However, you need to know what that goal is to make sure you are headed in the right direction. Ideally, you should have an idea of how’d you would like to live when you step away from the workforce or, at least, leave your main full-time career.

Additionally, if the idea of retiring early is enticing, planning now is a must. It’s possible to shave years, if not decades, off the process. But you can only pull that off if you make that a priority as soon as possible.

Ultimately, it’s best to have the major financial decisions above handled before you turn 30. That way, you can set your life on the right course, allowing you to move toward your goals with greater ease and to avoid missteps that could derail your plan.

Can you think of any other major financial decisions a person should make before 30? Share your thoughts in the comments below.

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New Costco Locations for 2020 — UPDATED

June 25, 2020 By Amanda Blankenship 123 Comments

Costco has been expanding and has plans to continue doing so for the next few years. While information about new Costco locations tends to be limited, partially because of the complex agreements that have to be handled with the various cities, some details are available.

New Costco Locations in 2020

Costco opened two new locations in March 2020. Those were located in Ridgeland, MS and Perth Airport, Australia.

Costco does have more than one dozen new locations that are slated to open throughout the remainder of 2020. Three of those new locations are business centers:

Ontario, CA Business Center: August 2020
San Jose, CA Business Center: September 2020
St. Hubert, QC Business Center: September 2020

The other new Costco locations that are planned for opening in the next few months are:

Las Rozas, ES: July 2020
Kisarazu, JP: July 2020
Saratoga Springs, UT: August 2020
Idaho Falls, ID: August 2020
Bismarck, ND: August 2020
Sherbrooke, QC: August 2020
Gloucester, ON: August 2020
SW Calgary, AB: August 2020
Cherry Hill, NJ: September 2020
Surprise, AZ: September 2020

So, as you can see, there are five new Costco locations opening in the United States (along with two additional business centers) in the next few months. There are also several more opening around the world.

Possible New Costco Locations

There are a variety of other Costco potential locations in the works, though it isn’t clear whether they will come to fruition. For example, a Harrison, New Jersey Costco might open its doors during this calendar year, though that isn’t guaranteed.

Additionally, Costco has a number of cities that are proposed or in the initial planning phases. These could open as late as 2022, assuming that they do indeed move forward:

Murietta, California
Napa California
Pleasanton, California
Branford, Connecticut
Clinton, Connecticut
Athens, Georgia
Meridian, Idaho
Plainfield, Illinois
University City, Missouri
Cherry Hill, New Jersey
Patterson, New York
Bismarck, North Dakota
Cranston, Rhode Island
Bluffton, South Carolina
Dallas, Texas
El Paso, Texas
McKinney, Texas
Sherman, Texas

Finding Your Nearest Costco

By using the store locator feature on Costco’s website, you can find out which locations are closest to you. In total, there are 788 Costco stores throughout the world, more than 200 of which are outside of the United States.

548 Costco stores are spread across 45 states as well as Puerto Rico. 100 of the locations are in Canada (across nine provinces), 39 are in Mexico, 29 are in the United Kingdom, 26 are in Japan, 16 are in South Korea, 13 are in Taiwan, 12 are in Australia, two are in Spain, and there is one each in France, Iceland, and China.

In total, there are about 101.8 million Costco members worldwide. Approximately 163,000 people are employed by the company.

Costco Warehouse Store Operating Hours

While operating hours can vary somewhat from one Costco to the next, most follow a very similar schedule. Here is a look at the typical Costco warehouse location’s business hours:

United States

Monday through Friday: 10:00 am to 8:30 pm
Saturday: 9:30 am to 6:00 pm
Sunday: 10:00 am to 6:00 pm

Canada

Monday through Friday: 10:00 am to 8:30 pm
Saturday: 9:30 am to 6:00 pm (Quebec and Ottawa: 9:00 am to 6:00 pm)
Sunday: 10:00 am to 5:00 pm (Saint John 12:00 pm to 5:00 pm)

United Kingdom

Trade Members – Monday through Friday: 10:00 am to 8:30 pm
Individual Members – Monday through Friday: 12:00 pm to 8:30 pm
Saturday: 9:30 am to 6:30 pm
Sunday: 11:00 am to 5:00 pm

Australia

Monday through Friday: 10:00 am to 8:30 pm
Saturday: 9:30 am to 6:30 pm
Sunday: 10:00 am to 5:00 pm

See below for a link to info about how COVID-19 restrictions might have affected store hours.

Costco Holiday Closures

It is important to note that Costco does close on some holidays. In the US, this includes:

New Year’s Day
Easter Sunday
Memorial Day
Independence Day
Labor Day
Thanksgiving Day
Christmas Day

Additionally, the retailer uses a reduced operating schedule on both Christmas Eve and New Year’s Eve. Usually, this means that the Costco stores will close at 6:00 pm instead of the typical 8:30 pm. You can find the 2020 Costco Holidays list here. Note, this article will also provide you with information about restricted hours during the COVID-19 pandemic.

Holiday schedules do vary by country, so those living outside of the United States will not necessarily see the same closure days as listed above.

Have you shopped at one of the new Costco locations? Are you looking forward to a new Costco that is coming to your area? Do you wish a Costco would open near your home? Share your thoughts in the comments below.

Costco Anywhere Visa® Card by Citi

If you are an avid shopper at Costco, we recommend applying for the credit card that is designed exclusively for Costco members. It has great cash back offer, earning as much as 4% cash back on gas! Plus there is no annual fee and you get a reward certificate every year that you can redeem for cash or purchases at Costco! Learn more about how the Costco Anywhere Visa® Card by Citi can work for you.

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5 Tips for Financial Recovery After The Coronavirus

June 25, 2020 By Trey LaRocca Leave a Comment

We have all had different experiences with the coronavirus pandemic. While there may be quite a few variances, it isn’t uncommon for you to be financially strained by now. Over 41 million Americans lost their jobs, either temporarily or permanently. If you fall under that category, there are definitely ways to better your situation. Even if you kept your job, financial recovery after the coronavirus could still be necessary for you. To help you guys out, here are the five tips we have to help you recover financially after the pandemic.

Side Gigs

One of the major benefits of the gig economy is the ability to make your own money. If the wheels of the job market are moving too slowly for you, you can monetize a skill. Whether it is car detailing, house cleaning, home repair, or any other trade; if you can do it well, you can get paid for it. Get ads up on Craigslist and see what you can do.

Save What You Can

If you do have any source of income, such as unemployment benefits, make sure you are saving if possible. Now is not the time for frivolous spending if you are in recovery mode. You should focus on tightening the belt and keeping as much held for emergencies as you can. The number one way to end up completely stuck in debt, is to have an emergency you weren’t prepared for.

Work With Your Bank/Credit Union

Due to the widespread financial strife around the country, banks and credit unions are offering certain types of relief. Both of these entities are typically offering delayed payments for auto loans. If you have a car loan, see if your bank will give you a break. Some institutions are even offering 0-interest short-term loans for people in a pinch. If, and only if, you have a serious emergency, this might be a solid option for you. Do not get into any debt if you don’t have to, but if you have no choice, zero-interest debt is better than your other choices.

Cook at Home

Eating out, especially in this day and age, is a major money-sink. Throw in the delivery fee, you could easily drop $30 on a mediocre meal for yourself. Even though things are opening up, your financial security should be your number-one priority.Go to the grocery store, get some stuff to make at home, and eat in. This will make a massive difference for your monthly budget.

Care For Your Mental Well-Being

If you are in a bad mental state, your spending will follow. Even more important than your finances is your mental health. Even more prevalent than the financial crisis in this country is the mental health crisis. You aren’t alone, and being in a low emotional place is the worst foot on which to start recovering financially. Whether it is prayer, low-cost therapy, meditation, exercise, or time with family; take care of yourself any way that you can. Reach out to your support system or your community for ideas. Everyone is in this together, and there are resources there for you if you need to reach out.

Books about Money I’m Most Excited to Get When the Library Re-opens

June 19, 2020 By Kathryn Vercillo Leave a Comment

The library is one of the things that I’ve missed most during California’s shelter-in-place. Our libraries have been closed since March. The San Francisco Public Library offers a number of wonderful things. There are a ton of great online resources during this time. However, I really love to read print books. I miss going to the library and picking up a big stack of them. I can’t wait until I can do that again.

Since our library’s workers have been moved over to other essential work during this time, I’m not sure when I’ll be able to. But when I do, there are some relatively new books about money that I’m looking forward to picking up. Here is what’s on my list:

Invisible Americans: The Tragic Cost of Child Poverty

I like to read a wide variety of books about money. Oftentimes I read self-help or how-to guides that assist me with personal finance. But I also enjoy reading memoirs, biographies, and non-fiction books about money that give me insight into economics at a grander level. I’m very intrigued by this book by Jeff Madrick. It explores how poverty, even when experienced relatively briefly, negatively impacts children.

It reminds me a bit of The Deepest Well in which Nadine Burke Harris explores the long-term impacts of childhood trauma. We need to remedy the financial problem of poverty for children if we want them to have better outcomes as adults. This is an important topic. So, while it may not be on a traditional list of books about money, it’s right at the top of my own list.

Rogue Money and the Underground Economy: An Encyclopedia of Alternative and Cryptocurrencies

This book by John C. Edmunds purports to give a strong overview of cryptocurrency from its history to its current role in the marketplace. This is a part of personal finance that I’m always seeking to understand better. Therefore, this is definitely one of the books about money that I’m eager to pick up when my library re-opens.

More Money Now: Use your Existing Skills, Connections and Technology to Start Earning Cash Today

This book by Michael Zechmann was published in 2018. However, my own library only got its copy recently. Therefore, I’ve never had the chance to read it. I’m curious to see what it says about how students, retirees, and others can make some extra money right now. I’d love to compare how the advice in it relates to the current situation given that COVID-19 has changed the landscape in some ways. Plus, I always like books about money that give me ideas for making extra cash. I don’t always use the ideas but sometimes they get me thinking about earning money in new ways.

Wealth Unbroken: Growing Wealth Uninterrupted by Market Crashes, Taxes and Even Death

Similarly, Rebecca Walser’s book was published in 2018 but only came to my library recently. This one is about long-term investing. Again, since it was published before the pandemic, some advice in it may not apply. However, its subtitle suggests that it’s actually all about how to weather storms, even an unprecedented one such as this. So, I think that bodes well and makes it worth at least checking out.

Hustle and Gig: Struggling and Surviving in the Sharing Economy

I’m very fascinated in the pros and cons of the gig economy. I’ve worked in the gig economy myself for a long time in various ways. I’ve watched the landscape change significantly over the past decade. I’m curious to see what this book by Alexandrea Ravenelle has to say about it all.

What books about money do you most hope to read soon?

5 Tips For Better Money Habits

June 18, 2020 By Tamila McDonald Leave a Comment

For many of those who get ahead financially, it doesn’t happen by accident or chance. Instead, they develop amazing financial habits, allowing them to make progress toward their goals and secure their futures. Luckily, regardless of where you are today, anyone can embrace their routines. With a bit of effort and diligence, you, too, can create better money habits. If you don’t know where to begin, here are five tips to get you started on the road to a more secure financial future.

1. Always Pay Yourself First

The principle behind paying yourself first is simple; if you transfer money into your savings account before you do anything else, you’ll always do it. You’ll never end up in a situation where there isn’t enough to make it happen, as bolstering your savings will universally be your first move each and every payday.

For many, this is the best approach. It’s easy to have good intentions, vowing to save whatever is left over when the pay period comes to a close. However, when you go that route, the chances that you’ll choose to spend that money instead rise dramatically.

By moving your cash into savings right away, you avoid temptation. Plus, you make saving (and, subsequently, your future) a priority, and that can make a big difference.

2. Practice Mindful Spending

Many people spend money on a whim. They see something intriguing and decide to toss it in their cart, all without giving it much of a second thought.

While the occasional splurge isn’t a bad thing, it is problematic if you’re doing it without any consideration. Complacency can come back to haunt you, especially on the financial front.

Instead of making a purchase reflexively, strive to be mindful of your spending. Before you get anything that isn’t a genuine need, reflect on the item or service. Consider whether buying it moves you toward your larger goals or aligns with your priorities. If the answer is “yes,” then it could be alright to proceed. But, if the answer is “no,” you may want to skip the purchase.

3. Tracking Is a Must

Trying to live without a basic budget or insight into your spending patterns usually leads to trouble. A lack of understanding about where your money needs to go as well as where it’s going can be detrimental, especially if you are falling short of your financial targets, frequently miss payments, and aren’t moving toward your goals.

When you don’t have a budget or track your spending, you may not realize what is happening to your income. Often, once people take a look, they are startled by how much they are spending in certain categories.

By tracking your obligations and spending, you are creating opportunities for positive change. You’ll know where your money should be going and where it’s actually ending up. If something isn’t aligning with your objectives, then you can choose to handle the situation differently.

4. Automate What You Can

Automating your finances is usually a smart move. If you set up an automatic transfer from your checking account to your savings that aligns with every paycheck, paying yourself first becomes easy. You won’t have to worry about remembering, which removes a significant burden.

Then, if you set up automatic bill payments, you can ensure that you don’t forget to pay a critical bill. Not only can this give you peace of mind, but it also preserves your credit. A single missed payment can reduce your credit score dramatically, potentially by 110 points initially. Plus, that stays on your report for seven years. To make matters worse, you may also owe the lender a late fee, adding insult to injury.

Automating means you don’t have to worry about whether your bills are being paid. As long as you have enough in the bank to cover the cost, your payments will handle themselves.

5. Send More to Your Debts

Paying even a little bit extra to your debts can make a massive difference over time. If you have any cash to spare, send it to your highest-interest debt. That way, you can chip down the balance faster, allowing you to pay less in interest over time.

Once you get that debt handled, redirect that payment (including the extra amount) to your next highest interest debt. Then, repeat that process until you are debt-free. That process is called the debt avalanche, and it’s an incredibly popular method for handling debt while paying the least amount in interest along the way.

If you need a quick win, then the debt snowball method is a viable alternative. You’ll pay a bit more in interest along the way, but you’ll conquer your first debt faster. As a result, you might have an easier time maintaining momentum, and that can matter both in the short- and long-term.

By overcoming your debt, you are improving your financial life. When you have fewer obligations, you need less money to live. Then, you can send more to savings, get a house faster, or even retire earlier. Achieving your financial goals will be easier, making it worth the effort it takes to pull it off.

Do you have any other tips that can help someone develop better money habits? Share your thoughts in the comments below.

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Do You Have to Pay Back Unsubsidized Loans?

June 10, 2020 By Kathryn Vercillo Leave a Comment

There are a lot of questions going around right now about student loans. The political landscape is filled with ideas about how to address outstanding student loan debt. In the midst of all of the potential changes, you might wonder if you have to repay your own loans. In particular, you might wonder about any differences that exist between subsidized and unsubsidized loans.

Subsidized vs. Unsubsidized Loans for Students

First of all, you’ll need to know the difference between subsidized and unsubsidized loans.

Similarities of Subsidized and Unsubsidized Loans

These are both types of student loans.
Both of these loans are issued by the federal government.
You must be enrolled in higher education with at least part-time credits in order to receive one of these loans.
You are allowed six months grace period after school ends before you have to begin repaying either loan.
Both types of loans have several repayment options.

Differences between Subsidized and Unsubsidized Loans

Here are the important differences between the two types of student federal loans:

You must meet an income requirement of financial need in order to qualify for a subsidized loan.
Subsidized loans are for undergraduate education only. Unsubsidized loans are for both undergraduate and graduate school programs.
Typically you are able to access more money with unsubsidized loans.

But here is the really big difference: you do not pay the interest on subsidized loans. The US Department of Education covers that interest for you. In contrast, you do pay interest on unsubsidized loans. Therefore, you have to repay more than the cost of the original loan for an unsubsidized loan.

If you have the option, get a subsidized loan. You can also get both. For example, I got as much money as possible from subsidized loans for my undergraduate education. Then I supplemented that with additional funds from unsubsidized loans, for which I have to pay the interest. When I went to graduate school, I got additional unsubsidized loans.

You Have to Repay All Student Loans … But You Have Options

There are many potential changes taking place in the political landscape when it comes to student loans. For example, one of the COVID stimulus payment plans recommended a stipulation that $10000 of student loans be wiped out across the board for all borrowers. Note: that did not pass! But it is one of many ideas floating around the political landscape in regards to student loans.

That said, you do currently need to repay student loans. You have to repay both subsidized and unsubsidized student loans. With unsubsidized loans, you also have to pay interest on the loan.

Remember, a loan is money that you borrow. It might seem like “free money” at the time. Young students especially feel this way. However, it’s borrowed money. You accepted it with the stipulation that you would repay that loan. If you have unsubsidized loans, you further agreed to pay interest on the loan.

Options for Repayment, Deferment, or Forbearance

That said, student loans are some of the easiest loans to work with when you don’t have enough money to make your full payment. You can contact the lender and figure out the best option given your current financial state.

Repayment Plans

Here are a few common options available to people with unsubsidized loans:

Standard repayment plan in which you pay a specific amount every month for a set amount of time (typically ten years)
Graduated repayment plan in which you pay less per month at the start and gradually increase over that ten year period
Extended repayment plan in which either the standard or graduated repayment plan is extended over the course of 25 years
Income-based repayment plans, of which there are several, allowing you to pay based on what you earn

Options When You Can’t Make Payments

Many people find themselves unable to make their student loan payments for one reason or another. That is particularly true during times of financial stress, such as the COVID-19 pandemic. You might have the option to apply for deferment or forbearance. There are different types of each but essentially both are methods of delaying your payment for a period time.

Note that with unsubsidized loans you are still responsible for the interest that accrues during the period of non-payment. If you are able to pay the interest as it accrues, rather that postponing those payments, it is in your best financial interest to do so.

You Do Not Have to Pay Unsubsidized Loans During the COVID-19 Pandemic

Here’s something important to learn about: There are special payment rules in place during the coronavirus pandemic. This is part of the CARES Act.

First of all, all student loan repayments are automatically canceled through 9/30/20. Therefore, you do not have to pay back unsubsidized loans (or any student loans) during this time. You don’t have to do anything to qualify this; it is automatic for everyone.

That said, you can still choose to make your payments if you want to. If you can, then you should. You’ll repay your debt more quickly.

0% Interest During COVID-19 on Some Loans

Do be aware that certain student loans are set at 0% interest during this COVID-19 “special rules” period. Therefore, although you usually accrue interest on unsubsidized loans, it’s possible that you will not during this time.

Generally speaking, you will not accrue interest on your loans during this time if the loans are serviced directly by the Education Department. This may include Direct Loans, FFEL, and Perkins Loans – both defaulted and non-defaulted loans. It also includes some defaulted HEAL loans.

That said, it is very important to check with your lender to make sure that you clearly understand whether or not your loans accrue interest during this period. Remember that if you have loans that aren’t covered under these temporary 0% rules, you might be able to qualify for an Education Department student debt consolidation loan through which the rules would then apply.

Again, if you can afford to pay your loans, do so. If you ave unsubsidized loans that qualify for zero interest during this period, then any payment you make will go directly to pay down the principal on your balance.

What If I Just Learned I Didn’t Need to Make Payments During COVID-19?

CARES went into effect in March. The 0% interest and no-payment period extends through September. It’s already June. What if you didn’t realize this and have been making payments? First, check to see that you’ve really made them. If you had them set to auto-debit, chances are that the automated withdrawal was canceled without you doing anything.

That said, if you did make payments since CARES went into effect, and you weren’t required to, you can actually get that money back! If you are in a dire financial situation and really need that money, contact your loan servicer to request the refund.

In summary, unsubsidized loans do need to be repaid eventually. However, during COVID-19, you might not have to make payments. You might not even accrue interest. Even after the CARES Act ends and you ave to make payments again, you have options. These include lower payments, deferment, and forbearance options. Check with your student loan provider to review all of your options.