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JANUARY 2023

Get SMART about your goals

Who hasn’t made a New Year’s resolution only to see it fizzle out by February? Don’t blame your lack of willpower. (Trust us, it’s not that!) If you want to achieve an important goal, make small, specific changes that can lead to a big change. You can do it if you set SMART goals.

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What are SMART goals?

The S.M.A.R.T process was developed to help managers set achievable management goals and objectives. Today the SMART process is everywhere, offering useful guidelines for anybody who wants to make a big change in their lives.

letter S

Specific

Include details. Setting a goal to lose 15 pounds works better than “lose weight.”

letter M

Measurable

Track your progress as you work toward your goal. Try using a journal or an app 3 or more times per week.

letter A

Achievable

Make sure your goals are realistic. Retiring at age 30 is not very realistic. Saving an extra $100 a month might be achievable.

letter R

Results-oriented

Focus on what you’re trying to accomplish. But if you encounter obstacles, such as family obligations, adjust as necessary.

letter T

Time-bound

Set a realistic amount of time to achieve your goal. Celebrate as you check off smaller goals along the way, such as making a substantial credit card payment.

Put SMART to work in your life

Now that you know what SMART goals are, here are some examples of how you can use them to achieve your well-being goals.

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Strengthen family bonds

Goal: I will work on nurturing and strengthening my family ties.  

SMART breakdown

  • Specific: I will plan two family activities every week. 
  • Measurable: I’ll keep track of my ideas in a notebook, then write them on our family calendar. 
  • Achievable: Our family has consistently done Taco Tuesdays and trips to the movies every month; therefore, scheduling family activities is doable. 
  • Results-oriented: These activities will play a big part in fostering and deepening the bonds among all family members. 
  • Time-bound: My goal is to put a deposit on a family vacation in six months for a trip we will take next summer.
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Live within a budget

Goal: I will create a budget of $3,450 every month. 

SMART breakdown

  • Specific: I will create a budget of $3,450 every month and spend $300 less.  
  • Measurable: I’ll keep a record of every expense and ensure that I spend less than my budget of $3,450.
  • Achievable: My average monthly spending is $3,250; therefore, I can try my best to stay within the budget if I don’t use my credit cards.  
  • Results-oriented: Keeping my expenses within a budget of $3,450 will prevent me from splurging on items spurred by impulse buying. It will also help me save more and make me more responsible.
  • Time-bound: The goal is to develop a consistent habit of living within a budget of $3,450 every month throughout this year.
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Get regular exercise

Goal: I will consistently work out a minimum of 20 minutes per day, three days a week by summer.  

SMART breakdown

  • Specific: I will do low-impact exercises for 20 minutes per day, three days a week.
  • Measurable: I will measure my progress using a fitness tracker and calendar, making sure I complete my 20-minute workouts. 
  • Achievable: Scheduling workouts for Monday, Wednesday and Friday is manageable for me in the long term. Also, keeping it at 20 minutes will help build up the intensity and allow me enough time to benefit from the cardio, while being short enough to not impact my other routine tasks. 
  • Results-oriented: Working out for 20 minutes three days a week will give me the amazing benefit of moving from low-impact to high-intensity workouts while being manageable enough to sustain for the long term.
  • Time-bound: I will consistently work out a minimum of 20 minutes per day, three days a week by July 15. 

Sources: LifeHack. How to write SMART goals (with SMART goals templates).
LifeHack. 20 personal SMART goals to improve your life.

If you’d like to learn more about Costco benefits and resources that can help you achieve your SMART goals, the following resources can help.

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JULY 2022

7 tips for ending debt stress

Stress is uncomfortable. No wonder you want to resolve it as soon as possible. But when stress is caused by debt, it’s much harder to find a fast, easy solution. The stress can continue for years and can affect your health by raising your blood pressure and contributing to heart disease, obesity and diabetes. It can also lead to feelings of hopelessness, which can damage your self-confidence and quality of life.

Yet, if you’re willing to do the work, debt-stress relief is possible — even if your debt lingers.

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Here are seven tips to help you manage your stress, while you reduce your debt.

1. Ditch your denial.

Constant stress from debt can lead people into denial. This is because it feels better to ignore your financial problems than to open your monthly statements, track your spending and deal with the reality that your income doesn’t match your spending. And remember, confronting your situation is the first step to resolving it.

2. Face the shame.

Taking a good look at your day-to-day spending can tell you exactly how you got into debt in the first place. Facing the shame you feel about your debt can help you find your way forward to a healthier, more realistic approach to managing money — and that can actually lessen your stress.

3. Accept responsibility.

Accepting the blame for your debt is empowering and can ultimately lead to your success, because you can get to the root of your problem and deal with it. And remember, most people, including many wealthy people, have faced financial problems at one time or another. But you are dealing with it responsibly. That’s something to be proud of.

4. Get expert help.

Experts advise enlisting the help of a trusted financial advisor, perhaps from a financial services non-profit or a credit union. Through Resources For Living® (RFL®)* you have access to a free 30-minute legal consultation, financial advocacy or coaching, tax consultation and credit counseling. Or you can work with a financial planner or certified public accountant (CPA). Ask them to help you put together a budget and payment plan that will give you some much-needed encouragement that your situation can and will improve.

*Resources For Living is available to all employees and members of their household, including children up to age 26 living away from home.

5. Be proud of your progress.

You can help shake the stigma of debt by sharing your progress with loved ones. Not only does sharing help you feel supported in your debt-reduction efforts, but you may also inspire others to take on their own debt-repayment journey. Decreasing your sense of isolation can help reduce your debt stress and keep you on track.

6. Keep debt in perspective.

If there’s absolutely no way out of debt, you might consider meeting with a bankruptcy attorney. When you explore worst-case scenarios, sometimes you realize they really aren’t that bad. Long-term stress can damage your health. People file for bankruptcy all the time.

7. Remember money isn’t everything.

It’s important to stay grounded, grateful and optimistic. There are other sources of joy and meaning in life besides money. And as you make steady progress toward your goal of a zero balance, be sure to set aside some money to treat yourself for a job well done.

Source: NBC Better by Today. 7 tips to deal with debt stress.

If you or a member of your household is experiencing debt stress, the following resources can help. These resources are confidential and available to you at no extra cost.

 

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JULY 2022

Build a budget in 5 steps

How do you define “budget”? Many people think of it as a belt-tightening approach to spending. But it’s far more positive than that. A budget is a plan for what you do with your money. And it’s designed to serve you and your goals. When you learn how to create a budget — and keep it going every month — you’re giving your money purpose. You’re taking control.

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No matter what financial goals you have, no matter what your income, you can make a budget — and live with it comfortably — in just five steps.

Step 1: List your income.

Income is any money you plan to receive during the month. That means your normal paychecks plus any extra money that comes your way, such as income from garage sales or freelance work. Create separate income budget lines for every paycheck you (and your spouse or partner) earn, plus anything extra.

The amount you indicate should be your net income (what you earn after taxes and other deductions). If your income is less predictable, look at what you’ve made the last few months and list the lowest amount as this month’s planned income budget line. You can adjust later in the month if you make more and add that extra money to your money goal or another budget line.

Step 2: List your expenses.

Now that you’ve planned for the money coming in, you can plan for the money going out. It’s time to list your expenses. Budget for your savings goals, such as an emergency fund. You’ve got to pay yourself first before you pay everyone else!

After that, list food, utilities, shelter and transportation. Make a budget category for each of these items, and add lines underneath for your specific expenses. (Think of a budget category as a folder, and the lines as the files inside it.)

Some are fixed expenses, that is, expenses that stay the same every month, like your rent or mortgage. Other expenses, like groceries or gasoline, change each month. Just start with your best guess based on your past spending.

Next, list all other monthly expenses. Start with essentials, such as insurance, debt, childcare, etc. Then add a miscellaneous line, followed by nonessentials like personal spending, fun money and entertainment.

Step 3: Subtract expenses from income.

Subtract all your expenses from your income. This number should equal zero. That doesn’t mean you let your bank account reach zero. Leave a little buffer in there of about $100–300. If you subtract your expenses from your income and have money left over, put it toward your current money goal.

If you end up with a negative number, just cut expenses, preferably from your dining out and entertainment budget lines, until your income minus your expenses equals zero. If you’re still struggling to make ends meet, don’t forget you can work overtime or explore ways to add to your income. Just remember not to increase your spending when you increase your income. Your extra cash needs to cover your budgeted expenses.

Step 4: Track your expenses.

If you don’t make yourself accountable by tracking your expenses, a budget is just a list of good intentions. Tracking expenses will help you:

  • Stay accountable to your budget, yourself and your money goals.
  • Keep from overspending, because as you enter expenses, you’ll know what’s left so you don’t overspend.
  • Stay on top of the budget. When you track transactions, you can make appropriate adjustments as you need to.
  • Learn and adjust your spending habits so you can get back on track with your goals.

Step 5: Make a new budget before the month begins.

Copy this month’s budget over to the next, and make changes for anything new that’s coming. That way, you’ll be prepared for birthday, holiday and anniversary expenses; back-to-school shopping; semi-annual expenses, such as car maintenance; and annual expenses, such as vaccinations for your pets. To plan for these expenses, create a budget category such as “month-specific stuff,” and update it as needed.

How do you pay for these month-specific items? Cut back spending somewhere else, and move that money over to this category. If this sounds too complicated or difficult, don’t be discouraged. It typically takes around three months to get comfortable with budgeting, so keep working on it! The benefits of budgeting are worth the effort.

Source: Ramsey Solutions. How to make a budget: your step-by-step guide.

Looking for ways to improve your money-management skills? The following resource can help.

 

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APRIL 2022

6 financial tips for the sandwich generation

It seems like only yesterday that your kids were toddlers. Now they’re heading to college — just as your aging parents need your help. Congratulations, you’ve joined the sandwich generation. Whether this is your current situation — or one you may face in the future — taking care of multiple generations of your family can be tough on your stress level and your wallet.

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Here are six tips to help you support your loved ones while safeguarding your own financial well-being.

1. Get your finances on track.

Whether you’re currently caring for your kids and aging parents, or you’re on your own, now’s the time to get rid of your debt. Need help? Sign up for SmartDollar® and follow the 7 Baby Steps to restore your financial health.

2. Talk about finances early and often.

If you’re caring for your parents, don’t be afraid to ask them tough questions. Are they in debt? Do they have life insurance or long-term care insurance? Do they understand their investments? Do they have a will?  Can they share its location with you? As for your grown children, ask them about their goals. Talk to them about lifestyle changes they need to make to get where they want to be.

3. Start planning for the right kind of elder care

If your parents need in-home care, an assisted living facility or a nursing home, you’ll need to discuss the financial impact with them. Decide what type of care fits their budget (or yours, if you’re the one supporting them). Visit Resources For Living® for adult and elder care referrals and to find out more about the 30-minute free legal consultations available to you.

4. Save and invest for your own retirement.

If you aren’t already doing it, start saving for retirement. By making your retirement savings a priority, you can save your kids from the same stress you might be going through now with your own parents. The sooner you take advantage of your Costco Retirement Plan, the more you’ll save.

5. Save for your children’s college.

It’s never too early to start exploring the best ways to save for your kid’s college education. If they’re still in high school, make sure their dream college is one you can afford. Help them look into scholarships, and encourage them to get a part-time job. This way, they can start saving before entering college. If you have kids who are already in college, talk to them about getting a part-time job during the school year and a full-time job for the summer to help them avoid accruing debt. Finally, talk with them about learning to live on a budget.

6. Set clear boundaries.

Balancing money and relationships can be complicated. The best thing to do is set healthy boundaries and talk about expectations. It’s hard to say no to parents or children when you’re trying to work on your finances. But don’t let anyone make you feel guilty for trying to take care of your own household first.

Source: RamseySolutions.com

The following resources are available to help you stay financially fit — whether you’re single or caring for aging parents or children. These resources are confidential and available to you at no extra cost.

 

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APRIL 2022

Start preparing for retirement

Take a moment to focus on your financial well-being and make the most of your Costco Retirement Plan,* administered by T. Rowe Price.

*For Mainland and Hawaii employees, the plan is called the Costco Retirement Plan. For employees in Puerto Rico, it’s called the Costco Puerto Rico Retirement Plan. 

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Make saving for retirement a priority

Whether your retirement is decades away, or just a few years down the road, use this list and your Costco Retirement Plan to get ready. Start by visiting RPS.TRowePrice.com to view your Costco Retirement Plan.

Add an extra layer of security for your plan account by setting up multi-factor authentication. Multi-factor authentication helps keep your financial information secure by requiring two or more forms of authentication to verify your identity.

Name your beneficiary, the person (or persons) you choose to inherit your assets if anything should happen to you. If it’s been a while, check to ensure your beneficiary information is up to date.

Update your email address to receive timely newsletters and valuable saving insights.

Contribute enough to get the full matching contribution. Review your contribution now.

See if you qualify for the Retirement Savings Contributions Credit (Saver’s Credit). For low- to moderate-income employees who qualify, the Saver’s Credit means you can get a tax credit based on your tax filing status, adjusted gross income and how much you contribute. 

Make sure your T. Rowe Price Automatic Increase is turned on, so your contribution will be increased by 1% each year.

Strive to save 15% of your annual pay — it’s OK to work your way up to the suggested target gradually.

If you’re age 50 or older, consider making catch-up contributions. This allows up to an additional $6,500 (for 2022) to help you move closer to your retirement goal.

Get your financial house in order

Learn to budget, free yourself from high-interest debt and aim for higher savings goals with help from SmartDollar®.

Build an emergency fund equal to three to six months’ expenses to help you in case there are unexpected changes in your income.

Make a budget that matches your lifestyle and gives you room to save.

Create a plan to pay down credit card debt; paying off small balances first can motivate you to keep going.

Use your emergency fund instead of credit cards to offset surprise costs.

The following resources are available to help you get started on your retirement plan. They are confidential and are available to you at no extra cost.

 

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Learn the basics

LEARN THE BASICS

JULY 2021

How to overcome or avoid student loan debt

Do you have student loan debt, or are you considering a student loan for yourself or a loved one? If so, getting the facts and using resources available through your Costco benefits can help you make the right decision about something that can affect you for years to come. The average college student graduates with $35,000 in student loan debt, with an average monthly payment of $393, according to EducationData.org.

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What to consider before you take on a student loan:

Good debt? Not so fast — the conventional wisdom that student loan debt is “good debt” is being challenged. Don’t let the allure of a dream school disrupt your financial well-being. Select a school you can afford. If you are unsure about the best path for you, consider starting with a community college or an associate’s degree. Taking this route first can save money while you figure out what’s next.

Do the math — people often don’t anticipate how quickly debt adds up over the years. Then the regret sets in. About one in four of those with a bachelor’s degree have misgivings about taking on student loans. That number jumps to almost one-third of those who’ve earned a master’s degree. Advanced degrees can help students achieve long-term success, but it’s a good idea to explore in-state options over out-of-state if you decide to take this route.

Look down the road — be sure to do the research on earning potential for the career you are interested in pursuing. Set yourself up for success by not burdening yourself with student loan debt that a future salary can’t support.

Already have student loans? There is a student loan resources page on Costcobenefits.com to help you tackle student debt.

 

Source: Average Student Loan Payment, EducationData.org, 2021.

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Explore more

EXPLORE MORE

JULY 2021

The 7-step plan to getting out of debt

It’s said that a journey of a thousand miles begins with a single step. The same is true for getting out of debt. By breaking up the challenge into seven doable steps, you’ll gradually take back control of your money and put your debt behind you.

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Step 1 – Save $1,000 for your starter emergency fund

In this first step, your goal is to save $1,000 as quickly as possible. Your emergency fund will cover those unexpected life events you can’t plan for. You don’t want to dig a deeper hole while you’re trying to work your way out of debt.

 

Step 2 – Pay off all debt (except the house) using the debt snowball

Next, it’s time to pay off the cars, the credit cards and the student loans. Start by listing all of your debts except for your mortgage. Put them in order from smallest to largest balance, regardless of interest rate. Pay minimum payments on everything but the smallest one. Attack that debt with a vengeance. Once it’s gone, put that payment toward the second-smallest debt, making minimum payments on the rest. That’s why it’s called the debt snowball. Use it to knock out your debts one by one.

 

Step 3 – Save 3 to 6 months of expenses in a fully funded emergency fund

You’ve paid off your debt! Don’t slow down now. Take that money you were throwing at your debt and build a fully funded emergency fund that covers 3 to 6 months of your expenses. This will protect you against life’s bigger surprises, like your car breaking down, without slipping back into debt.

 

Step 4 – Invest 15% of your household income in retirement

It’s time to get serious about retirement — no matter your age. Take 15% of your gross household income and start investing it into your retirement. Start with Costco’s 401(k) plan — 1165(e) in Puerto Rico — and invest up to the full employer match.

 

Step 5 – Save for your children’s college fund

By this step, you’ve paid off all debts (except the house) and started saving for retirement. Next, it’s time to save for your children’s college expenses. Experts recommend 529 college savings plans or ESAs (Education Savings Accounts).

 

Step 6 – Pay off your home early

Now bring it all home. Your mortgage is the only thing between you and complete freedom from debt. Any extra money you can put toward your mortgage could save you tens of thousands of dollars in interest.

 

Step 7 – Build your nest egg

You know what people with no debt can do? Anything they want. That’s why the last step is the most fun. Keep building your nest egg and be generous, whether that means leaving something for your kids or giving to a cause that’s important to you.

Source:  Ramsey Solutions, 7 Baby Steps, 2019.