Home prices might not be declining, but there’s still good news for homebuyers. According to new data, the number of homes being sold above listing price just fell to a three-year low.
Verify your new rate (Jan 15th, 2021)
Above-asking home sales decline
A new analysis from Zillow shows that the number of homes selling above listing price dropped to 19.9% last year. It was down from 21.5% in 2018 and the lowest share seen since 2016.
Before 2019, there had been four consecutive years of increases in the above-listing price share of home sales.
That’s not the only good news in Zillow’s data, though. Of the homes that did sell above list price last year, the premiums paid by buyers shrank. In 2018, buyers paid about $5,500 more on homes that sold above listing price. In 2019? It was $5,100.
Treh Manhertz, an economic data analyst for Zillow, calls the data “a reflection of cooling market dynamics and subsequent shifts in pricing and offer strategies in response.”
Homebuyers take note: These are the cities where home values will appreciate most in 2020
San Fran buyers suffer most; Miami’s win out
San Francisco claimed the largest share of homes being sold above listing price at 48.6%. California’s San Jose came in second (38.8%), with Boston, Minneapolis, and Seattle rounding out the top five.
In San Jose, buyers paid about $41,000 over asking price, while those in San Francisco paid $37,500. Both numbers have dropped since 2018, when buyers paid $101,000 and $50,000 more, respectively.
New analysis: Spring homebuying season may be the last affordable one for a while
Miami buyers saw the fewest above-listing sales at just 8.9%. Las Vegas (12.6%) and Tampa (13.3%) also had small shares.
Verify your new rate (Jan 15th, 2021)
Get today’s mortgage rates
Looking to buy a home before prices heat up again? Then shop around and see what mortgage rates you qualify for today.
President-elect Joe Biden is calling on lawmakers to extend the national eviction moratorium for another eight months — one of the many housing-related proposals he is making as part of his $1.9 trillion stimulus plan.
Biden proposes extending the national moratorium on evictions and foreclosures until Sept. 30, while also setting aside funds to provide legal assistance to households facing foreclosure or eviction. He further called for housing agencies to continue allowing applications for forbearance on federally-backed mortgages until that date.
Foreclosures were paused last spring early in the pandemic. The CARES Act included an eviction moratorium through late July 2020 that only applied to certain, federally-funded rental units. But last September, the Centers for Disease Control and Prevention issued a nationwide moratorium on evictions that covered the vast majority of renters nationwide.
The latter moratorium was set to expire at the end of December, but the stimulus package passed by Congress last month extended it until Jan. 31 of this year. Extending the national eviction moratorium even further was a priority for housing advocates, who have warned that the assistance provided by previous stimulus packages would not be enough to prevent a full-fledged housing crisis.
“There’s been a threat of mass evictions (to the tune of 10 to 20 million or more taking place within just weeks) facing us since summer of 2020,” Eric Dunn, director of litigation at the National Housing Law Project, said in an email. “The successive rounds of moratoriums and protections have largely staved that off, though unfortunately we still have seen lots of evictions. But we could really see that big crisis unfold if the major national evictions protections are allowed to expire.”
Not only would this massive wave of evictions be financially devastating to potentially millions of Americans, but it could also jeopardize public health. Prior to the implementation of the national eviction moratorium, states that allowed their own moratoria to expire saw a higher rate of COVID-19 cases and deaths than the states that maintained the bans, one study showed.
‘It’s difficult to make good decisions and preparations when you don’t know whether you’ll need to move out of your home in a week or two, or whether you’ll be able to stay longer.’
Eric Dunn, director of litigation at the National Housing Law Project
If lawmakers do end up pushing the end-date on the moratorium back until Sept. 30, it will also give renters more room to make well-considered decisions about managing their finances. While the short-term extension that was just issued in December did provide a lifeline to Americans, “it’s difficult to make good decisions and preparations when you don’t know whether you’ll need to move out of your home in a week or two, or whether you’ll be able to stay longer,” Dunn said.
Beyond extending the eviction and foreclosure moratorium, the incoming Biden administration is also calling on lawmakers to come up with an additional $30 billion in funding for emergency rental, energy and water assistance for hard-hit households, plus $5 billion in emergency assistance to people experiencing or at risk of homelessness.
“While the $25 billion allocated by Congress was an important down payment on the back rent accrued during this crisis, it is insufficient to meet the scale of the need,” the Biden team noted in a fact sheet regarding the broader stimulus package.
The percentage of Americans experiencing housing insecurity has grown in recent weeks — it now stands around 9.5%, up from 7.2% two months ago. Additional funding should help households struggling to afford the cost of housing amid the pandemic to get on top of their finances, but it won’t necessarily be able to last them much longer.
Last year, housing advocates and landlords called on lawmakers to approve $100 billion in rent assistance, which experts said was meant “to be a floor, a minimum that would be needed.”
Diane Yentel, president and CEO of the National Low Income Housing Coalition, said on Twitter that the $55 billion in emergency rental assistance from Biden’s proposal and the December package, plus the $2,000 in stimulus checks and expanded unemployment insurance, “may be enough to cover back rent/utilities and some forward rent,” but would not be sufficient to carry struggling renters through the pandemic.
Housing advocates have also argued that the incoming Biden administration could impose more aggressive policies designed to protect renters. For instance, the national moratorium has gaps that leave people vulnerable if they have non-traditional rental arrangements.
And the moratorium lacks enforcement mechanisms — leaving it up to state and local authorities to implement. Consequently, many people are still being evicted who should be protected by the national ban.
‘Even when a tenant wins a case, eviction is a legal record that prevents families from safe and decent housing, employment, home ownership and public housing, among other harms.’
Emily Benfer, a housing and public health lawyer
Looking to the future, advocates have also proposed protections for tenants when they seek new housing after experiencing insecurity. While the moratorium may prevent evictions from happening, landlords can still bring renters to court, and those records could make it harder to find housing in the future.
“Even when a tenant wins a case, eviction is a legal record that prevents families from safe and decent housing, employment, home ownership and public housing, among other harms,” Emily Benfer, a housing and public health lawyer and visiting professor at Wake Forest University, noted on Twitter.
Whether the incoming Biden administration can achieve these lofty goals remains to be seen. Biden reportedly hopes to have the stimulus package passed on a bipartisan basis, but he may face pressure to use the budget-reconciliation process instead, given the small majorities Democrats have in the House and Senate. However, Yentel noted that some of Biden’s stimulus-related housing agenda could be achieved through executive order, including the moratorium extension.
This post may contain affiliate links. Please read my disclosure for more information.
We’ve all been there. You walk into your favorite store, the one with the amazing branding and the conveniently set up dollar bins and somehow walk out with $100 worth of stuff when you just went in for conditioner. Or is it just me?
I have accumulated stuff over the years sitting in drawers and boxes, cluttering up my closet and I have no idea how it got there or why it is there.
Since taking a closer look at my finances and being more aware of my purchases, I was embarrassed by the number of foods from the grocery store that went uneaten and scented candles gone unlit. I’m not against candles, I love candles! But I’m starting to realize that I don’t need every scent just because they’re $3.
And I also care about the story of my purchases. Where did it come from, how did it get here, and is it beneficial for the future if I buy it? It’s a common trait in millennials; we want to be good stewards of the earth’s resources and ethical to people around the world. It’s transformed the way I look at shopping.
So now, I pay attention to what I buy.
It didn’t start out so well. Thinking about my purchases looked more like just staring at the bottle of wine a little harder as I put it in my cart. But I’ve developed 5 habits that make me more confident that what I’m consuming is good for me and good for the rest of the world.
Reduce, Reuse, and Recycle
We’ve all heard the phrase before. But did you ever think there’s a reason they’re put in that order? Recycling gets a lot of hype but priority #1 is actually to reduce as much of our consumption as possible. Priority #2 is to reuse what you already have for as long as you can. I’m not talking kids crafts with leftover egg cartons. I mean repurposing and upcycling. Then as a last resort recycle whatever’s left.
I’m known for being a big proponent for gently used fashion but my love for all things secondhand goes far beyond wearing it. Buying secondhand cars, home décor, and furniture can not only save you money but also reduce the quantity of items that have to be made to keep up with demand.
My logic is most definitely flawed but regardless I think of it like this: even if that Forever 21 top was made in a sweatshop, buying it secondhand instead of new, saves someone from having to produce one more top. It gives me more freedom in the thrift stores and my favorite online consignment shops like ThredUp.
I live in a city where local is a way of life. Big box stores and restaurants can’t touch our downtown because the city is committed to shopping at independent businesses. And for produce, the Saturday Morning Market is always packed.
Buying local means you can help more people without spending more money. Each dollar you spend returns 3 times more money into the local economy than one spent at a chain and almost 50 more than one at an online mega-retailer.
Pro tip: Be cautious at farmer’s markets to make sure the produce is actually local. Big agriculture farms will often outsource to dealers meaning you’ll buy from a 3rd party vs. buying from an actual local farm.
Ask yourself: How long will this last? Will I still want to wear it in 3 years? A classic shirt that costs $35 but will last you twice as long as a $19.99 fast fashion shirt is actually a better deal. Things that can break easily or you know you replace often are worth the extra money for better quality.
I’m bringin it full circle for this last one, just to emphasize: use less, waste less. This trick not only saves your money from thoughtless buys but is the easiest way to be better to the environment. After all, you don’t have to think about the quality and source of your purchase if you just don’t purchase it.
Don’t feel overwhelmed by all the steps you need to take and money you need to spend to become the ultimate conscious consumer. Make small changes day to day and you’ll see that the more you ask yourself these questions, the more they’ll become a way of life. And your wallet and the earth will thank you.
Jen Smith is a personal finance expert, founder of Modern Frugality and co-host of the Frugal Friends Podcast. Her work has been featured in the Wall Street Journal, Lifehacker, Money Magazine, U.S. News and World Report, Business Insider, and more. She’s passionate about helping people gain control of their spending.
Transferring your debt to 0% interest balance transfer credit cards seems like a no-brainer right?
You’ll pay no interest for a promotional period of time so 100% of your payment will go to the principal.
Sounds like a win to me. And quite often it is a win.
But not always.
When you know all the pros and cons, you can accurately determine if transferring your debt to a balance transfer card makes sense for you.
With that in mind, I’ve put together this complete list of pros and cons to help you decide if you should transfer your balance.
Do your due diligence and weigh all the pros and cons of a balance transfer credit card to make sure it will really help you save money while paying off your debt faster.
Table of Contents
how you transfer your debt to a balance transfer credit card the right way.
A 0% balance transfer card can save you money
Clearly paying less interest on your credit card debt will save you money.
Just remember to run the numbers, taking into account the balance transfer fee and the promotional and standard interest rates. I recommend using a good credit card payoff calculator.
Here’s an example of good balance transfer numbers:
Say you have $5000 in credit card debt which requires you to pay 30% interest.
If you pay $300 a month, you will pay off that card in 22 months. It’ll cost you $1,549 in interest for a total of $6,549.
On the other hand, if you transfer that balance to an 18-month, 0% interest credit card your numbers would look like this:
You would pay the same $300 a month for only 17 months, paying $0 in interest for a total cost of $5,000.
Most credit card companies charge a 3% balance transfer fee, which in this example works out to $150.
That means you would save $1,549 dollars minus the $150 balance transfer fee for a total savings of 1,399 with the added benefit of paying off your debt 5 months sooner.
In the interest of balance, we’ll run the numbers on a balance transfer that doesn’t add up to such an obvious benefit once we take a look at the cons.
You can enjoy better terms and even get rewards
The credit card landscape is extremely competitive, and companies are trying harder than ever to capture your business.
Why does this matter?
If you have lousy terms with your current credit card, such as high fees or a short grace period, you can dump that credit card and enjoy better terms with someone else.
Shop for not only the best introductory interest rate but also for a better interest rate once the promotion period ends. Also look for credit card rewards on new purchases.
Here’s the thing:
If you’re going to go through with a balance transfer, make sure the new company treats you better than your current one.
Consolidate your credit card debt to make your finances simpler
Consolidating your credit card debt makes budgeting a little easier and more convenient. Just having all your debt in one place makes it easier to manage and pay down your debt. What’s more, transferring your balance to a 0% card can create space in your budget, which is ideal if you’re trying to stop living paycheck to paycheck.
The Cons of Balance Transfer Credit Cards You Need To Know
The APR is only temporary
Never forget, the banks are making a bet on you.
They are willing to give you an attractive promotional rate and they are counting on you not paying off your balance on time.
If you don’t pay off your debt before the promotional rate expires, you’ll be hit with the considerably higher revert rate. Don’t be surprised if this rate is in the 25%-30% range.
But you don’t have to get stuck with this rate. Instead, do your homework ahead of time and make sure the revert rate is not excessive.
Even better, only get a balance transfer rate if you know you can pay off the balance during the promotional period.
Balance transfer accounts can be very expensive
Typically banks charge a balance transfer fee of 1% to 3% as well as the annual service fee.
In the “Pros” section above, we showed you an example of a balance transfer credit card which saved you money.
Now let’s take a look at a balance transfer that’s not quite a slam dunk like before.
Let’s say you have a credit card with a $3,000 balance in which you are paying 20% interest.
If you are paying $140 per month, you will pay off the debt in 27 months, including $742 in interest. In total, you will pay $3,780 in this scenario.
But what if you found a balance transfer credit card offering a 12-month promotional period with 0% interest and a standard 3% balance transfer fee.
You could transfer your balance for $90 and pay down $1,680 of your debt in the first 12 months.
Your balance (initial $3,000 plus the $90 transfer fee) of $3090 would be $1,320.
Now the bad news:
The promotional period ends and the bank pumps the interest up to 30%.
If you continued paying $140 per month, you would pay off the debt in a total of 23 months. Your total out-of-pocket expenses would be $3,320, including only $204 in interest fees.
To recap this scenario:
Current credit card: You would pay a total of $3,780 over 27 months with your current credit card at 20% interest.
Balance transfer credit card: Including the balance transfer fee, you would pay $3,320 over 23 months. You would save 4 months payments and save $460 dollars.
Don’t get me wrong, $460 is a nice sum and at first glance, and it may seem worth it to do the transfer.
But when you consider all the potential cons we’ve mentioned, $460 may not be enough of a benefit to outweigh the other factors.
The point is, run the numbers and make sure the risk/reward ratio works in your favor.
Balance transfers are not always included.
Don’t assume every 0% APR offer is good for balance transfers. Nearly all of these offers are good for new purchases made on the card. But the same is not always true for balance transfers.
In other words, sometimes the 0% APR offer applies to balance transfers, sometimes it doesn’t.
I can’t emphasize this enough;
Before you consolidate your debt on a new card, check the terms and conditions carefully to ensure balance transfers are also eligible for the promotional rate.
Balance transfers can potentially hurt your credit score
Your credit score can take a hit when you open a new card. Your score will drop if the balance of the new card is over 30% of the card’s limit. Not to worry, making your payments on time will negate this penalty soon enough.
Here is another credit score consideration:
In order to minimize the risk of running up debt, many people close their old account after the balance transfer is completed.
This is wise and it is what we usually recommend.
But there is one exception:
If you’re going to be applying for a home loan in the near future, it’s probably smarter to keep the old account open because closing accounts usually hurt your credit score.
Final credit score consideration:
Closing accounts with zero balance will actually raise your credit utilization percentage, the amount of balance you carry versus the amount of credit you have available to you.
The truth is, the lower your credit utilization – the better your credit score will be. So, closing your old card could hurt your credit score.
That’s not all.
Closing an old account may hurt your length of credit history, which can also negatively affect your score.
In other words, closing your first credit card account may hurt the length of credit history and, consequently, your score. Conversely, closing a more recent account would not affect your score in this way.
If you’re not getting a mortgage anytime soon, you probably shouldn’t worry about the credit hit too much.
Paying off debt, and staying out of debt, are the bigger, more important goals here.
Late payments can kill your APR
Sadly, that enticing 0% promotional interest rate can be lost in the blink of an eye. All it takes is one late payment.
Read the disclosures carefully to make sure you understand the terms of a credit card offer. The card issuers often have the sright, to not only end the introductory period but also to hit you with a hefty penalty APR, usually in the staggering neighborhood of 30%.
You are exposing yourself to potentially more debt
As I mentioned before, the banks are betting that you won’t be able to resist making more purchases and racking up more debt.
So if you’re going to do a balance transfer, vow to yourself that you are doing so strictly to help you pay off your debt.
Cut up your cards, or hide them in a safe place, so you won’t be tempted to use them for impulse buys.
Should you get a balance transfer credit card?
Transferring your debt to a 0% interest credit card only makes sense if the purpose is to pay down debt.
Even then, there are pros and cons to consider when deciding if you should or should not get a balance transfer credit card.
The Bottom Line About Balance Transfer Pros and Cons
The truth is, if you’re considering transferring a credit card balance for any other reasons besides saving money and getting out of debt faster, you probably should not do it.
Don’t fall into the trap of thinking the balance transfer is all that needs to be done to get your finances back on track. If you don’t have a plan to pay down debt and stay out of debt, a balance transfer card will probably be counter-productive and lead to more debt.
But the bottom line is this:
When it’s done the right way as part of a debt reduction plan, and only after you have run the numbers and read the terms and disclosures, a balance transfer credit card can be a very effective tool to save money and pay off debt faster.
Like it? Share it!
Was this article helpful? If so, please consider sharing it so that others can benefit from it too. Thanks!
Related: Busted! The Myths of Balance Transfer Credit Cards
Pay Off Credit Cards Sooner With Bi-Weekly Payments (Saves $1000’s)
Meal Planning Can Help Save You $1,600 a Year on Your Grocery Budget!
Hmmm… donuts, pizza & mojitos OH MY! Isn’t it amazing how one stray sentence can totally take over your mind! Food is tasty, a treat, and can be downright mesmerizing! It can also be one of our biggest budget busters! We want what we want and when we want it (sometimes we hate wanting it (I’m talking to you brownies!) This gets us into trouble with our waistline as well as our wallet!
I have my fingers crossed that one day there will be a resurgence in renaissance body love, all curvy & pale 🙂 Yet, I know that eating healthy needs to be a top priority. I know this because I tell myself this almost daily. You too? We want to do what’s best for our bodies and our wallet, yet sometimes those two things don’t always align. I mean, 1 lb organic strawberries in February can be $8.99! (don’t choke!)
So how do we align saving money on food while eating healthy? The answer is simple, yet kind of intimidating at first glance. It’s meal planning on a budget! DON’T WORRY and don’t get overwhelmed; it can be a lot easier than you imagine. I’m going to walk you through the main points to nail this piece of the grocery budget puzzle. So you never have to worry about hearing, “Mom, what’s for dinner?” ever again!
This post may contain affiliate links. Please read my full disclosure for more info
Feeding our body healthy foods has been a long time passion of mine. Previous to Money for the Mamas, I taught kids how food grows at combo learning farm & CSA. For 90 minutes, we talked about soil, farm animals, water quality, and most importantly, how our food grows and why fruits & vegetables are so important. I also did a stint with the State of Oregon and the national level, Farm to School movement, which helps schools create programing around healthy foods. Fantastic work, which is both heartbreaking and hugely rewarding!
With that experience, I know that meal planning can be a great solution, as moms, I know how we want to do our best to provide healthy foods for our family. Yet, rising food costs do not make this easy for us.
The Street reports that in 2018, the average American household spends $7,729 per year on food, which is about 12.8% of our after-tax income. Yet, with our current situation (August 2020), costs are rising. “April of this year food prices had the largest monthly increase in 46 years!” says ABC News.
There are many different ways that you can save money on groceries, but today we’re just going to talk about one specific element, meal planning on a budget! Which can still be healthy family meals, you just need to plan things out (and plan for the days when you “just can’t even” think of cooking)!
Now, I’m not going to say that an occasional frozen pizza doesn’t sneak into my freezer (and my belly), but I try really hard to balance those not so healthy items with better for you options.
Meal planning to save money on groceries
Let’s get down to specifics on exactly how meal planning can save you money in your grocery budget.
Saving money by not buying foods that you won’t eat
I cannot even tell you how many times I’ve bought veggies with the best intentions of eating them! And then that sad and guilt-ridden sound of the “thunk” as the jicama falls into the trash. Arg!
When you meal plan, you decide what you are cooking and eating and when, there is a “plan”, not some vague intention. When you know that on Tuesday it’s spaghetti squash & meatball night, you can be dang sure that the veggies are getting eaten and will not go to waste!
Speaking of food waste, you all know the squishy, greeny brown scenario at the bottom of the produce drawer. But what does this look like to our wallet? According to Marketwatch, “As much as 40% of food goes uneaten in the U.S! Americans throw away $165 billion in wasted food every year.” According to Harvard Law School’s Food Law and Policy Clinic and the Natural Resources Defense Council, some 160 billion pounds of discarded food also clogs up landfills.
What that means is roughly, “219 lbs of food per person is wasted a year” quotes RTS (waste experts), and that’s $1,600 a year for a typical sized family!
Think of taking your grocery budget, pulling out 40% of the money, and just throwing it in the trash! Oh. Hell. No.
That’s crazy! Yet, we don’t intend to do; it just happens. And meal planning is one of the best ways to combat this by buying only what you know you will use for that week (or however often you go to the store).
Know your food costs
You can still buy most of the same foods but know which of your local stores have the best prices. For example, there are two stores of the same chain, maybe 4 miles apart, and one of them has consistently lower prices than the other. So I always go to the cheaper one.
Also, when you sit down to do your weekly menu, you can look at store flyers to see who might have chicken breasts on sale, or who has digital coupons for your favorite brand of cheese.
You may go to a Kroger store for chicken and then go to Target for sale on frozen burritos (a favorite late-night snack of my husband). Yet, for this to be a genuine savings, you need to consider the cost of your time & gas driving to multiple stores. If you’re spending 45 minutes driving to a store to save $.40 per pound on beef, that’s not saving! Your time is valuable, so absolutely count that into the equation.
Many times stores will have loss leaders (items they sell at a loss just to get people into their store”. Did I mention that I worked in a grocery store for six years? No? Well, I did. It is a fantastic, socially conscious store (B-Corp certified) that helped bring healthy and local food to the communities they serve.
Yet, they weren’t cheap. Even with a staff member discount, I was paying a lot for my groceries. Yet I knew that certain times of the year, they would offer boneless skinless chicken breasts at $2 off the regular price (that was basically at cost for the store), $4.99 vs. $6.99. I bought enough chicken to last a long time. We’re talking like 20 breasts. Then I would take them home, portion two breasts into a freezer bag and boom, chicken for months!
I knew about these times, so I planned it into my budget. Other times of year stores have a sale is their anniversary day (or founder days), or holidays. Each chain is a little bit different, so don’t be shy. Ask them when their big sales are!
Go the extra mile and ask them which days they mark their items down. For example, canned goods may go on Tuesday, boxed goods on Wednesday. Or they may go by the department, dry grocery on Monday, and perishable grocery (dairy and such) on Friday. Ask them what time of day they start and when they finish. Then see if you can go in near to the time that they are wrapping up.
Meal planning saves you time
As a super duper busy mom (aren’t we all?), one of the things I hate most is standing in front of the fridge trying to decide what to fix. When this happens, my mind immediately goes blank; nothing in the refrigerator looks good to eat. In the past, I would waste maybe 10-30 minutes a day just trying to decide what to make. What a waste!
By meal planning, you always know because you posted the weekly menu on the fridge! And what’s better is that your family never needs to ask you, “what’s for dinner?”
Resources to meal planning on a budget
Luckily, many women have masted the art of meal planning (hey, no reason that we need to reinvent the wheel!). So let’s dive in to see how others have meal planned on a budget.
The Healthy Meal Planning Bundle
If you’re a one-stop-shop kind of mom (me!), then you’re going to love this fantastic resource! It’s a bundle of 58 products all around meal planning, tied up in one neat package! You just buy it once (for a crazy low price), and you have access to all 58 items! You need to act fast, as it’s only on sale for the week of August 17th – 21st!
There are 11 Cookbooks, 15 Meal Plans, 11 eBooks, 9 eCourses, 10 Printables, 1 Membership, and a Summit. (Plus some great free bonuses and an early bird buyer special thank you gift!)
The Healthy Meal Planning Bundle is a great option because it’s all around this very specific topic of healthy meal planning (not all are low cost specific). Still, the bundle as a whole is very cost-effective, so you can meal plan on a budget (and there are a few resources around being budget-conscious).
Here are the main categories that the bundle covers…
How to get started meal planning
Quick & easy
Real food & nutrition
Now, you may be wondering why you would ever need 58 items all around the same topic? Totally fair question by the way. Let’s just say it like it is; we won’t vibe with everyone we meet or learn effectively from one particular teaching style. So in the bundle, some information may overlap, but that’s a good thing!
So many times, I read about a topic that I already know a lot about. Yet, one person says something in a specific way, or in a particular tone where it just “clicks” for me! The lightbulb goes off, and I suddenly “get it”! I am thrilled when this happens as it could have something that I didn’t quite understand, or never really knew why it was a big deal.
The great thing about this bundle is that they are giving everyone a free jumpstart by hosting a free Meal Planning Bootcamp starting August 11th. Yes, that’s coming up soon! Here, you can get a taste of some of the information, and get geared up to start your own meal planning journey.
The best part is that it’s a challenge, so you are participating right alongside other women just like you! Going through things together, so you can bounce ideas off of each other, learn from those who tried XYZ, and help others with your own experiences. Don’t forget that it’s free! Yup, zero cost to join in and participate!
Now don’t worry, if you’re reading this after August 11th. The bundle still exists, but it’s only available for a limited time. However, they bring it back annually, and sometimes they even do a flash sale after a few months (no guarantees though). So still sign up with your name and email, and then you will be on the list to get notified once it becomes available again!
Ultimate Bundles also offers a phenomenal resource on learning about all things personal finance! Check out their Master Your Money Super Bundle right here!
If you haven’t watched Frankie work his magic in the kitchen, then you are missing out! He doesn’t do meal prep, per se, but his expertise is in cooking cheaply, using leftovers, AND he’s damn entertaining too! Check out one of my favorite video’s down below (hint – save this video for after Thanksgiving!)
Grab some meal planning printables to help meal plan on a budget
Oh, organizing… did you ever know that you’re my hero? Everything that I would like to be? For you are the wind beneath my wings. Or something like that. Yup, organizing makes my heart happy!
That’s why I am such a huge fan of my Organized Home printables, and I created one specifically for meal planning! This packet has…
weekly menu planner
food inventory tracker (so you never lose steaks under the frozen spinach again!)
family favorite meals list (that are easy go to’s when short on time & energy)
grocery shopping list, broken up by department (no circling back to aisle 7 five different times!)
This meal planner & grocery list is an instant download so you can print it in just 2 minutes from now! (save it to your hard drive so you can print as many copies as you want!)
Freezer meals are essential to meal planning on a budget
One of the very best things that you can do is plan on failing!
Yup, I freely admit that somedays I am a Hot Mess Mom! I am frazzled, I am running 54 errands, going to the eye doctor and end up getting my eyes dilated for what seems like forever, and on and on the tragedy of life turns into a comedy! And I am DONE!
That means I need to plan on things not going great, so on those days, I need something up my sleeve because I know that going to the drive-thru isn’t all that cheap, nor is it healthy!
There are two options for us Hot Mess Moms…
One – Frozen Meals – pizza, burritos, corndogs & tater tots (yum), etc. Now, these aren’t the healthiest, but they are cheap. Besides, who doesn’t like tater tots! So I am fine with doing this a few nights here and there.
Two – Freezer Meals! These are my secret weapon for when times are tough. For example, before I gave birth, I did a whole day of nothing but freezer meal prep, as I knew once the baby came, I would need all the help I could get!
A great resource that I have found is My Freeze Easy! It’s a freezer meal planning & prep plan, where you get access to new monthly freezer recipes! There are some great customizations too; gluten-free, dairy-free, paleo, instant pot, etc.!
Now not only are these designed to save time, but they stem from the $5 Meal Plan program, so all the recipes are budget-friendly!
If you’re not quite sure about diving into freezer meals, Erin (the founder) has a great free workshop to introduce you to freezer cooking, so you can feel it out and see if it’s something you might like. Again don’t worry, it’s not a 90-minute life or death training. She’s a mom; she knows you’re busy! It’s three videos for a total of approx 20 minutes. easy peasy, right! (Pssst… you get three free recipes & shopping list, nice!)
Some of you may be a bit wary of freezing meals, especially produce. I mean, does freezing take away all the good vitamins & nutrients? Answer: Not at all! According to Healthline, “Frozen fruit and vegetables are generally picked at peak ripeness (while fresh is picked before it’s ripe). They are often washed, blanched, frozen, and packaged within a few hours of being harvested. Frozen produce is nutritionally, similar to fresh produce. When nutrient decreases are reported in frozen produce, they’re generally small.”
They mentioned that most of the nutrient loss happens with extended periods of storage in the freezer, like two years or more. So generally speaking, frozen fruits & vegetables are a great way to get your vitamins!
The Healthy Meal Planning Bundle does have a freezer meal cookbook, but it’s not as customizable as My Freeze Easy plan! BUT, I know that the thought of buying 58 items, like the bundle, can cause your brain to shut down from overwhelm. So here’s one great resource. Easy Peasy!
Look to Pinterest for inspiration
So this is a love/hate relationship. Everything looks great, yet it can be overwhelming. Simply put in the search bar “Meal planning on a budget”, or “easy dinners”, “crockpot dinners,” or “frugal foods”. So many options will come up.
I have a secret board just for “dinners to try”, and then maybe once a month I’ll go in and pick a few to try during the next month, and I work those into my meal plan. I may find a new favorite, or it may be a dud.
Oh, and don’t forget while you’re on Pinterest checking out meals, head on over here, and follow me for lots of budget-friendly inspiration!
Know your grocery budget (and stick to it)
If you want to do meal planning to save money, you need to know your grocery budget! Better yet, if you’re stocking up on things at a low price, then you need to know how much of your grocery budget is for regular food, and how much is for stocking up. You can’t blow everything on your stockpile, and you can’t spend every last dime on your weekly veg.
A good place to start is 75/25 split. So 75% of your grocery budget is for everyday shopping, while 25% of your grocery budget is for stocking up. Initially, you may find you’re spending a bit more on your stockpile, but it will taper down as you go on and build up your pantry.
Some things that I stockpile when the prices are good…
Cereal (I only buy if it’s $1 a box)
Meat (buy in bulk and divide into 1 lb portions then freeze)
Paper goods (paper towels, TP)
Health & beauty – soap, shampoo, deodorant, etc
In talking about budgeting did your stomach do a little flip? I know you’ve been meaning to get back to budgeting, so here’s a great resource! It’s my Ultimate Guide on How to Budget Series, and it goes through everything you ever wanted to know about it!
Tip for Meal Planning on a Budget – Leftovers are your friend!
Don’t forget to plan on having a leftover day for dinners! Make it one day at the end of the week to clean out your fridge before the next week’s shopping trip.
Make it easy!
Have Leftover Day be as easy as possible for your family by getting some great clear glass meal storage containers! That way, you can easily see what’s in there to eat, and by buying glass containers, you can reheat these directly in the microwave without worry. It’s known that microwaving food in plastic containers isn’t the best choice.
Harvard Health states that “When food is wrapped in plastic or placed in a plastic container and microwaved, BPA and phthalates may leak into the food. BPA and phthalates are believed to be “endocrine disrupters.” These are substances that mimic human hormones, and not for the good.”
Now, I’m not a scientist, nor am I a fearmonger. But if I don’t need to take a risk, and can easily avoid it, I will. So I bought glass containers for my family.
I love these Pyrex containers. They are a perfect size (3 cup) and stack great in the fridge! So after dinner is over, if there are leftovers, I immediately portion the items out into meals in the containers. So all my husband has to do is grab one, take off the lid and heat it up and BAM, full dinner/lunch!
Pyrex 3-Cup Rectangle Food Storage
pack of 4 or 6
Glass is pre-heated oven, microwave, fridge and freezer safe, & dishwasher safe
Non-porous glass won’t absorb stains or odors
Make leftovers new & different!
If your family doesn’t love the idea of leftovers, then you can easily shake things up! All you need to do is change how it’s served. For example, get some tortillas to make items into a wrap, or add on soup & salad to make small amounts of leftovers stretch into a full meal.
Here are some other ideas to give your leftovers a makeover with a different presentation
make it a wrap
turn it into soup
add a grain and have a buddha bowl
make a frittata or an omelet
use leftovers as fillings for a quesadilla
or as a topping on pizza
Just Google “what to do with leftover ________”, and you should get some fun ideas! Or just go to Big Oven’s Use Up Leftovers feature! You add in your three main ingredients, and it gives you a bunch of tasty options!
At the end of the day
Our Mom List never seems to get shorter, does it? You cross four things off, and then two hours later, you add seven more things! ARG! Yet, there are some things (like meal planning) that can reduce your mental and physical load over time. Meal planning may take a few rounds for you to work out the kinks, but overall you will save so much time and money!
Imagine what you would do with 40% more of that grocery budget? (as you won’t be throwing away rotted out lettuce, or wait, was the broccoli? Yesh, it’s hard to tell now that it’s a squishy stinky blob.
Meal planning on a budget can give you that 40% back! Remember, RTS estimated that it was $1,600 on average, a year per family! What would you do with an extra $1,600 a year? Use it to fund a family vacation? Revamp your back patio living space? Use it to help offset the cost of braces for your youngest? There are so many things!
Articles related to meal planning on a budget:
Tell me in the comments, If you started meal planning on a budget, what would you do with the $1,600 that’s back in your pocket?
Kari is a total Money Nerd Mama, helping other Mamas to learn about all things money & personal finance, so they can execute money management strategies to make a secure future for their family!
The 50/30/20 rule (also referred to as the 50/20/30 rule) is one method of budgeting that can help you keep your spending in alignment with your savings goals. Budgets should be about more than just paying your bills on time—the right budget can help you determine how much you should be spending, and on what.
The 50/30/20 rule can serve as a great tool to help you diversify your financial profile, reach dynamic savings goals, and foster overall financial health.
In this post, we’re taking you through the steps of budgeting using the 50/30/20 approach so that you can learn how to set up a budget that’s sustainable, effective, and simple. Use the links below to navigate or read all the way through to absorb all of our tips on how to budget using the 50/30/20 method:
What is the 50/30/20 Budgeting Rule?
Popularized by Senator Elizabeth Warren and her daughter, the 50/30/20 budgeting rule–also referred to as the 50/20/30 budgeting rule–divides after-tax income into three different buckets:
Essentials: 50% of your income
To begin abiding by this rule, set aside no more than half of your income for the absolute necessities in your life. This might seem like a high percentage (and, at 50%, it is), but once you consider everything that falls into this category it begins to make a bit more sense.
Your essential expenses are those you would almost certainly have to pay, regardless of where you lived, where you worked, or what your future plans happen to include. In general, these expenses are nearly the same for everyone and include:
The percentage lets you adjust, while still maintaining a sound, balanced budget. And remember, it’s more about the total sum than individual costs. For instance, some people live in high-rent areas, yet can walk to work, while others enjoy much lower housing costs, but transportation is far more expensive.
Wants: 30% of your income
The second category, and the one that can make the most difference in your budget, is unnecessary expenses that enhance your lifestyle. Some financial experts consider this category completely discretionary, but in modern society, many of these so-called luxuries have taken on more of a mandatory status. It all depends on what you want out of life and what you’re willing to sacrifice.
These personal lifestyle expenses include items such as: your cell phone plan, cable bill and trips to the coffee shop. If you travel extensively or work on-the-go, your cell phone plan is probably more of a necessity than a luxury. However, you have some wiggle room since you can decide upon the tier of the service you’re paying for. Other components of this category include gym memberships, weekend trips, and dining out with your friends. Only you can decide which of your expenses can be designated as “personal,” and which ones are truly obligatory. Similar to how no more than 50 percent of your income should go toward essential expenses, 30 percent is the maximum amount you should spend on personal choices. The fewer costs you have in this category, the more progress you’ll make paying down debt and securing your future.
Savings: 20% of your income
The next step is to dedicate 20% of your take-home pay toward savings. This includes savings plans, retirement accounts, debt payments and rainy-day funds—things you should add to, but which wouldn’t endanger your life or leave you homeless if you didn’t. That’s a bit of an oversimplification, but hopefully you get the gist. This category of expenses should only be paid after your essentials are already taken care of and before you even think about anything in the last category of personal spending.
Think of this as your “get ahead” category. Whereas 50%(or less) of your income is the goal for essentials, 20 percent—or more—should be your goal as far as obligations are concerned. You’ll pay off debt quicker and make more significant strides toward a frustration-free future by devoting as much of your income as you can to this category.
The term “retirement” might not carry a sense of urgency when you’re only 24 years old, but it certainly will become more pressing in decades to come. Just keep in mind the advantage of starting early is you will earn compounding interest the longer you let this fund grow.
Establishing good habits will last a lifetime. You don’t need a high income to follow the tenets of the 50/30/20 rule; anyone can do it. Since this is a percentage-based system, the same proportions apply whether you’re earning an entry-level salary and living in a studio apartment, or if you’re years into your career and about to buy your first home.
A note of caution, though: Try not to take this rule too literally. The proportions are sound, but your life is unlike anyone else’s. What this plan does is provide a framework for you to work within. Once you review your income and expenses and determine what’s essential and what’s not, only then you can create a budget that helps you make the most of your money. Years from now, you can still fall back on the same guidelines to help your budget evolve as your life does.
Ask Yourself: Why is a 50/30/20 Budget Necessary?
According to Consumer.gov, there are plenty of different reasons why people start a budget:
To save up for a large expense such as a house, car, or vacation
Put a security deposit on an apartment
To reduce spending habits
To improve credit score
To eliminate debt
To break the paycheck to paycheck cycle
Identifying the reason why you’re budgeting with the 50/30/20 method can help you stay motivated and create a better plan to reach your goal. It’s kind of like the “eye on the prize” mentality. If you’re tempted to splurge, you can use your overarching goal to bring you back to your saving senses. So ask yourself: why am I starting to budget? What do I want to achieve?
Additionally, if you’re saving up for something specific, try to determine an exact number so that you can regularly evaluate whether or not your budget is on track throughout the week, month, or year.
How to Budget with the 50/30/20 Rule
To make the most of this budgeting method, consider following the steps below:
Deep Dive Into Your Current Spending Habits
Before implementing a 50/30/20 budget, take a long, hard look in the mirror (or maybe your wallet, rather). We’re talking about analyzing your spending habits. Do you overspend on clothes? Shoes? Food? Drinks? Figuring out your spending vices from the very beginning will help you learn how to use a 50/30/20 budget that effectively cuts spending where you need it most.
Take a look at your bank and credit card statements over the last few months and see if you can find any common trends. If you find that you’re overspending on going out for food and drinks, come up with a plan for how you can avoid this scenario. Cook dinner at home before, have a potluck with friends, find happy hour specials around town. There are plenty of ways to budget and save money without compromising your social life.
Pro Tip: Using Mint’s easy budget categorization, you can identify where you can cut back on unnecessary expenses.
Identify Irregular Large Ticket Expenses in the “Wants” Category
Of course, there are expenses in life that we simply can’t avoid. Maybe you need to make a repair on your vehicle, or perhaps you’re putting a down payment on a house in the next six months. Oftentimes these bills are necessary expenses, so you’ll have to factor them into your budget.
When you’re coming up with your 50/30/20 budget, take a moment to look at your calendar so that you can plan for these expenses and adjust your spending in the time before and after you incur the expense.
Add Up All Income
Totaling your income is an important first step when learning how to budget your money using the 50/30/20 rule, but it’s not always as simple as it sounds. Depending on your job, you might have a relatively steady paycheck or one that fluctuates from month to month. If the latter is the case, collect your paychecks from the last six months and find the average income between them.
Is the 50/30/20 Budget Right for You?
The 50/30/20 budget isn’t the only option. Other popular methods include:
Zero-sum: The principle of the zero-sum budget is that you must allocate each and every dollar you earn toward a specific expense, savings account, debt, or disposable income account. This style can help deter unnecessary spending because you’ll know exactly how much you have to spend on what items.
Envelope budgeting: Swiping your card left and right is easy—but the envelope method doesn’t let you succumb to this temptation. Rather than using your card to spend, you use a predetermined amount of cash as your spending pool, nothing more.
Choosing a budgeting style that works for you depends on a variety of factors; there’s no one-size-fits-all approach to budgeting and saving money. That said, the 50/30/20 tends to be a simple yet effective option for getting started on your budgeting journey.
Main Takeaways: How to Budget Using the 50/30/20 Rule
Here are the key tenets of the 50/30/20 rule of budgeting:
This budget rule is a simple method that can help you reach your financial goals
This budgeting method stipulates that you spend no more than 50% of your after-tax income on needs
The remaining after-tax income should be split up between 30% wants or “lifestyle” purchases, and 20% to savings or debt repayment
Mint offers budgeting software and a helpful budgeting calculator that makes it easy to live in accordance with the 50/30/20 rule (or any budget that suits your lifestyle) so that you can live life to its fullest. After spending just a little bit of time determining which of your expenses fall into which category, you can create your very first budget and keep track of it every day. And when your situation undoubtedly changes, Mint lets you adjust, so your budget can change with you.
Sign up for your free account today, build your 50/30/20 budget, and make this the year you build a strong foundation for your future.
Learn the four essential steps to creating your own financial vision board from the experts who wrote the book on it.
We all want to save money. When our efforts start to gain momentum, it can feel great to watch account balances go up. Sometimes, even though we’re doing everything right, we can lose sight of what exactly we’re saving for.
Ellen Rogin and Lisa Kueng are the co-authors of “Picture Your Prosperity: Smart Money Moves to Turn Your Vision Into Reality,” which details their method for creating a vision board that can help you tie your dreams to your money as you progress toward financial freedom. They worry that too many people miss the deep connection between their money and their life goals.
“Most people tend to look at them as two entirely different subjects,” says Kueng, director of creative campaigns at a global investment management firm. She notes that a lot of people explore personal growth through reading, taking classes or journaling. But even when they get clarity on what they’d like to accomplish in life, they rarely attach those goals to their financial planning decisions.
What is a financial vision board?
A financial vision board is a collection of images—each tied to a personal life goal—that is organized according to the amount of money and time it will take to reach each goal. Rogin and Kueng recommend that you create a vision board to bridge the mental gap between your finances and your aspirations.
If you’re wondering, “How do I make a financial vision board?” Rogin and Kueng recommend the following steps:
1. Select images that resonate with you
To create a financial vision board, you should begin with a sizeable selection of images. These images can represent anything in life: nature, food, lifestyles, people, sports—you name it. They won’t all wind up on your financial vision board, so don’t worry about what they mean to you yet. You just want a good sample size to start with (think 20 to 30).
Rogin—a former wealth advisor and now a speaker, author and entrepreneur—says you could theoretically design your financial vision board on your computer, but it’s more fun when it’s a tactile exercise. So if you don’t subscribe to any magazines, you can print out images that you find online. Then, whether you’re at your dinner table, your desk or on the floor, lay all the images out in front of you so you can get a good look at them.
Next, choose the ones that resonate with you in a positive way as you think about the trajectory of your life.
“The pictures are really a shortcut,” Kueng says. “It’s a way to tap into our most primal, basic instincts.”
At this early stage of creating a vision board, you don’t have to know exactly why you’re gravitating toward certain photos. Even though this is a financial vision board, you also don’t need to worry about financial goals or money management at this point.
Once you have a small stack of images (think 10 to 15) you feel good about, separate them from the others, which you are free to drop in the recycle bin.
“The pictures are really a shortcut. It’s a way to tap into our most primal, basic instincts.”
2. Identify how each image ties to your life goals
The images you have left can help you define what you really want out of life. Keep in mind that even though you’re creating a financial vision board, you still don’t need to worry about how much any of your goals are going to cost. That will come into play in the next step.
To uncover your goals, Rogin and Kueng ask that you select an image from your chosen stack and take a look at it. Next, close your eyes and take a few deep breaths. Allow that image to reappear in your mind. Now ask yourself: Where are you? What do you see? How do you feel? Who is with you?
“Asking these questions allows you to really exercise those visualization muscles,” Rogin says. “It adds a little more oomph to this, so people can really start to envision the future they want.”
Kueng encourages you to ask yourself one more question as you complete this step to create a vision board: “What do you smell in the air?” (Note: This is what you imagine smelling, not what you actually smell wherever you are.) “That’s one of my favorite questions. That often shifts the whole experience for people because it gets so specific.”
Whether you smell wildflowers, cinnamon rolls or freshly cut grass, Kueng says the imagined aroma can help your vision come alive, drawing out the meaning in the image that uniquely resonates with you. After all, the same image can mean vastly different things to different people. “You start to really tap into your subconscious as you interact with these images,” she says.
Rogin recalls that in her work with clients, the same image of red theater curtains led one woman to realize that she wanted to see a Broadway play and another woman to reaffirm her financial commitment as a benefactor to her local theater company.
Rogin and Kueng encourage you to do this visualization exercise with each of the images in your stack. Each time you uncover a new goal, write it down and say it out loud. Writing down each goal helps you define and reinforce what each image means to you, but you only need the images as you move into the next step of creating a vision board.
Case study: How one image can uncover a surprising goal
This stage of creating your vision board can result in some surprising revelations, too.
As Kueng and her husband created their financial freedom vision boards, he picked a picture of a nice dinner on a dining room table. Listening to him describe what he was visualizing with his eyes closed, Lisa wasn’t surprised to hear her husband say that they were having a dinner party, because they often host them. But when asked where he was, his answer was Los Angeles.
“We don’t live in Los Angeles,” Kueng says. “We live in Chicago.”
When pressed, her husband said he realized that he’d like to spend more time in L.A. Kueng told him that she didn’t know that. He said, “Neither did I.”
3. Arrange your images based on time and cost of each goal
Once you’ve picked out your images, you only need a few more items to start creating your vision board:
A piece of paper or cardboard that’s big enough to display the pictures you’ve selected.
Something to write with, like a pen or marker.
Whatever will stick your pictures to your paper or cardboard, like a glue stick, tape or thumbtacks.
Now, with your marker, Kueng and Rogin suggest you draw a simple grid: one line vertically down the middle and one line horizontally across the middle of your board. This will give you four equally sized rectangles.
Looking vertically, note that the top half of your financial vision board is for goals that will require a significant amount of money that you will likely need to save and plan for—things like a nice vacation, a new car, a college education or a new house. The bottom half is for goals that can be achieved at little or no cost, such as building stronger relationships or excelling in your career.
You earned it. Now earn more with it.
Online savings with no minimum balance.
Discover Bank, Member FDIC
Going horizontally, the left half of your financial vision board is for the things that you can realize sooner in your life. The right side is reserved for long-term goals. “Sooner” and “later” are relative, but roughly speaking, goals that can be achieved in the next five years should be on the left side of the board.
For example, if you chose an image of a person going for a run, the image could go in the lower left-hand quadrant of your financial vision board, Rogin says. “If getting in shape is your goal, it doesn’t really require any money, and you can get started on that now,” she says.
If you have an image of the type of house you’d like to buy in the next five years, that would go in the upper left (high-cost, near-term). The sailboat you’d like to own in retirement? That would go in the upper right (high-cost, long-term) if retirement is still a long way away. And the book representing the memoirs you plan to write can be fixed in the bottom right (low-cost, long-term).
As you continue to organize your financial vision board, you’ll not only see a clearer picture of the life you want to live, but you’ll also have a better sense of the financial implications of each goal. Creating a vision board may also give you an added incentive to start saving more money today.
4. Keep your sights set on your financial vision board
After you’ve completed your financial vision board, you need to put it where you can see it. That’s why both Rogin and Kueng have their financial vision boards hanging above their desks where they can see them every day—that is, except when Kueng and her husband are in L.A., a life goal they likely wouldn’t have achieved without the help of their financial vision boards.
Rogin and Kueng say that the more you can keep those images and the goals they represent fixed in your mind, the more effectively you can align your finances to support your aspirations.
“So many people start with, ‘Okay, how can I start saving as much as possible?’” Kueng says. “‘Where’s the best place to invest it? When do I need to start drawing it down?’”
When you have a financial vision board that’s helping you to keep your goals in mind, Kueng says, all the financial steps you need to take to achieve those goals come into clearer focus.
Go from financial vision to financial reality
As you work toward financial freedom, vision boards allow you to see the timing and financial commitment to reach your most important life goals. But you shouldn’t stop there. It’s now time to strategize how you’ll financially achieve each goal.
Here are some ideas for taking your next steps:
To help free up funds to achieve the goals you’ve identified, create a simple budget to help manage your money and stay on track.
While creating your vision board, you may have realized the importance of getting physically fit. If so, consider lifestyle changes that will save you money.
If earning an advanced degree was one of the goals you uncovered on your financial vision board, learn how to pay for grad school as a working adult.
If your financial freedom vision board has helped you prioritize saving for retirement, learn more about IRA Accounts, a tax-advantaged option to save for your future.
To achieve the dreams you’ve envisioned, make sure you’re getting the most out of your savings. A Discover Online Savings Account, for example, offers a competitive interest rate and comes with no account fees.1
1 Outgoing wire transfers are subject to a service charge.
Articles may contain information from third-parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third-party or information.
I grew up in Kansas, but have lived in San Diego for the past four years. Instinctively, I knew gas prices would be more expensive in California. No matter, I thought. My Costco membership card might just dampen the blow from gasoline costs. But I had my doubts.
Is a Costco membership worth it for gas alone? I decided to put this to the test in San Diego. There are a few factors that could sway your decision, including how many cars you have, how often you drive, and how many miles you drive in a given week.
Here’s what you need to know on whether a Costco membership is worth it for gas alone.
How much does a Costco membership cost?
First, let’s take a look at what an annual Costco membership costs. The Gold Star membership fee is $60 for the year, which is Costco’s baseline package. Upgrade to the Gold Star Executive card for $120 and you can receive 2% back on most purchases (up to $1,000 a year).
The kicker? The Gold Star Executive rewards program doesn’t apply to purchases made using Costco’s gasoline services. If you want to buy a membership card based solely on getting a gas discount, you should opt for the regular Gold Star membership.
What is the cost difference between Costco gas and a regular gas station?
You probably came to the conclusion that Costco creates a Kirkland Signature brand for every brand-name equivalent. Costco gas is no different. According to a Mashed article, Costco is able to sell gas below the market price because it means more trips inside the stores from members who are swinging by to fill up their tanks.
To put this to the test, I called my local Costco and asked what the going price of gas was today. Regular unleaded gas was priced at $3.29 per gallon. Subject to change, of course.
Then, I called up a Mobil gas station, just two miles down the road from Costco. The cost of gas was $3.99 per gallon if you pay in cash or $4.19 per gallon if you pay with a debit or credit card. It had me thinking, what was the price difference between Costco and Mobil if you filled up at each one for a month?
For this example, I’ll use a car that can hold 12 gallons of gas and factor in at least three full fill-ups per month.
Costco Gold Star membership cost per month
Costco gas price per gallon (unleaded, paid with debit or credit card)
Number of gallons per fill-up
Number of fill-ups per month
Mobil gas station example
Mobil gas price per gallon (unleaded, paid with debit or credit card)
Number of gallons per fill-up
Number of fill-ups per month
Total cost per month
Talk about a whopper of savings. Even when you factor in the annual membership broken down each month, you still save nearly $27 a month in gas. Though you’ll need to consider other factors before jumping on the bandwagon.
Other factors before you head to Costco
While you most likely can save money fueling up at Costco, it may not be the best fit. You might not have a Costco close by to make it convenient to fill up each time. Plus, Costco gas tends to be more popular in high cost of living areas, which means longer wait times. I once waited 20 minutes in the Costco gas line. You’d think Costco was giving it away for free in Southern California.
Consider how often you drive your car, too. The average one-way commute time is just over 26 minutes, according to the United States Census Bureau. If you work from home or live within walking distance to several points of interest, it may not make sense for you to throw down $60 bucks on a Costco membership just for gas.
And what if you have multiple cars? Multiple cars mean multiple trips to the pump. A Costco membership could look really good when you factor in several cars (since the price of joining Costco comes with a card for your spouse).
Yes, Costco makes sense just for gas
This is a huge resounding yes for me when it comes to getting a Costco membership for gas alone. Especially if you live in a high cost of living area. In the example above, you could recoup the cost of a regular Costco membership after two months with gas savings alone. The cost savings could fuel your next vacation. At nearly a $1 difference between Costco and Mobil, it makes sense to fuel up with Costco.
Lower rates lead to surge in Millennial refinancing
Thanks to low mortgage rates, refinancing activity has jumped in recent weeks — especially with Millennials. In fact, according to new data, nearly a third of all recent Millennial loans were refinances.
Verify your new rate (Jan 14th, 2021)
Refinancing is big with older Millennials
According to the latest Millennial Tracker from mortgage technology provider Ellie Mae, 31% of all Millennial loans in January were refinances. With older Millennials — those aged 30 to 40 — refinancing was even more popular, accounting for 38% of all mortgage loans for the month.
Of those Millennials refinancing, the average age was 32.6 and the average FICO score 746 — well above the national average of 703. The average appraised value of homes being refinanced clocked in at $335,314.
For Millennials, homeownership is more important than marriage, kids
Refinancing is also growing in popularity amongst all age groups. According to data from the Mortgage Bankers Association, refinances jumped 15.1% last week, accounting for more than 66% of all loan applications. The week’s average 30-year mortgage rate (3.29%) was the lowest on record, according to Freddie Mac.
Here’s what Millennials want in a starter home
Where Millennials are most active
Home prices have been rising across the country, and it’s clear from Ellie Mae’s data that Millennials are having to get creative in where they buy homes. According to the Millennial Tracker, the top cities for Millennials currently include Carlsbad, New Mexico; Eagle Pass and Odessa, Texas; Williston, North Dakota; Clinton, Iowa; and Aberdeen and Brookings, South Dakota.
Joe Tyrrell, chief operating officer at Ellie Mae, predicts this trend will continue as we get further into the year.
“With the purchase power of Millennials increasing and inventory still tight across the country, we expect Millennials to continue to search outside of major metropolitan areas — where there is more inventory — when making their homebuying decisions,” he said.
Verify your new rate (Jan 14th, 2021)
Get today’s mortgage rates
Are you a Millennial planning to refinance or buy a house? Then shop around and see what mortgage rates you qualify for today.