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APRIL 2023

Why do you need a beneficiary?

When someone dies without naming a beneficiary — or leaving a will — their loved ones inherit a legal tangle. But what exactly is a beneficiary? Are there special rules for choosing one? And when do you need to name a beneficiary?

Doing the right thing for yourself and your family can be confusing — but it doesn’t have to be. Here’s what you need to know to choose your beneficiary, or beneficiaries, with confidence.

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What is a beneficiary?

A beneficiary is a person or organization you choose to inherit your wealth when you die. Your wealth can include your home, investments, cars and other possessions, from antiques to baseball cards. You name beneficiaries in a legal document — such as a will, trust, life insurance policy, annuity or retirement account.

Here are some examples of the people and organizations you can name as your beneficiary:

  • A person (or multiple people)
  • The trustee of a trust you’ve set up
  • A charity or nonprofit
  • A minor (child under 18 years of age)
  • Your estate (in the case of a life insurance policy)

Why you need a beneficiary.

You work hard for your money. And you want to know your family will be secure financially when you’re gone. That’s the most important reason you need to name a beneficiary — or beneficiaries: to make sure your wealth ends up in your loved ones’ hands. Here are some others:

  • Clarity — Grief is stressful. When things aren’t clear, the confusion can result in family strife and resentment. Naming beneficiaries makes your wishes crystal clear. And in most cases, legally protected. It also keeps the peace among your relatives.
  • Speed — When you name beneficiaries in your will, a lot of your estate — the money, property and possessions you leave behind — will bypass probate altogether. (Probate is a court that proves a will is valid.) That means your family will get their funds faster and won’t spend a lot of time in probate court.
  • Control — When you name beneficiaries in a will or life insurance policy, you control where your money and possessions go — and who gets it. If you don’t name one, the state you live in (California, for example) determines how your assets will be distributed to your heirs. Depending on the state you live in, that might even include ex-spouses!

When do you name a beneficiary?

You name a beneficiary for almost anything dealing with your money, including:

  • Life Insurance policies, including Costco’s Life Insurance and Accidental Death & Dismemberment available to all Costco Employees enrolled in the medical plan
  • Retirement accounts, including Costco’s Retirement Plan available to most Costco Employees
  • Your last will and testament
  • Social Security disability (in some cases)
  • Savings accounts and checking accounts

You can name any person or organization you want as a beneficiary. However, remember that if you name a minor child, and you pass away while they’re still a minor, the payout is sent in their name to the legal guardian of the minor child’s estate. And if you haven’t already named a legal guardian in your will, a probate court will appoint one for you.

Types of beneficiaries

There are two common types of beneficiaries: primary and secondary.

  • A primary beneficiary is the person (or people or organizations) you name to receive your cash, property and possessions when you die.
  • A secondary beneficiary is second in line to receive your assets in case the primary beneficiary passes away.

Naming alternate beneficiaries in your will is a simple way to avoid problems and confusion. It might seem trivial, but the consequences of skipping this step can be painful. For example, if your primary beneficiary is unable to receive your assets, and you didn’t name an alternate beneficiary, your assets will go back to your estate and go through probate.

How to choose your beneficiary

When choosing a beneficiary, you need to think about the people who depend on you financially. If you’re married, you’d likely choose your spouse as the primary beneficiary, and your spouse would choose you. (Yes, your spouse needs a will, too!) Together, you would name primary and secondary beneficiaries — in case something happens to both of you.

Keep in mind, people outside your immediate family may also depend on you. Do you help your parents pay their medical bills? Did you agree to pay for your niece’s education? Since you can name more than one beneficiary, you can specify what (and how much) each of these people would receive when you die. That way, those who depend on you can still count on your financial support.

Here are some questions to answer as you choose a beneficiary:

  • Who depends on your financial help? Make sure they’re included as a beneficiary.
  • If you have children who are minors, who will be the trustee of their money until they turn 18?
  • Will you set any conditions on when your children can receive your assets, for example, when they graduate from college, turn 25, pay off any debt they have, etc.?
  • Do you want any assets to remain in the family, for example, heirlooms, property, etc.?
  • Remember, if you divorce, your beneficiary isn’t automatically changed. You have to take care of choosing a new beneficiary and changing your documents.

Remember, if you divorce, your beneficiary isn’t automatically changed. You will need to designate a new beneficiary after your divorce is finalized.

Don’t leave your loved ones stranded!

Naming a beneficiary in your will might sound like a huge, time-consuming action, but it’s not! And when you do, you can breathe easier knowing you’ve taken the steps to protect your assets and spared your family unnecessary conflict and stress. Your loved ones will be grateful.

Source: Ramsey Solutions. What is a beneficiary?

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LEARN MORE

MARCH 2023

6 ways to save on health care

When you stop smoking, drop those last stubborn pounds or get your yearly exam, it feels good. You’ve done something important for your physical well-being. But did you ever think those healthy changes might also be doing something for your financial well-being?

Taking care of your body can have a positive effect on your wallet. Here are just six ways you can save while taking better care of your health.

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1. Quit smoking.

The national average cost of a pack of cigarettes in the U.S. is $8.99, which (including federal and average state excise taxes) is around $273 per month or $3,281 annually for someone who smokes one pack per day.1

2. Enroll in a DCAP or HCRA.

With a Dependent Care Assistance Plan (DCAP), you can set aside pretax dollars to reimburse yourself for qualified child and elder care expenses. A Health Care Reimbursement Account (HCRA) lets you do the same with eligible health care expenses, such as copays and premiums. Save money on your taxes by enrolling in a DCAP and/or HCRA administered by PayFlex®* during Annual Enrollment.

3. Choose in-network doctors.

When you choose an in-network doctor, you’re choosing someone whose rates are in line with your Costco medical plan.

Want to save even more? 98point6®* offers on-demand, text-based access to board-certified doctors who can diagnose and treat a variety of conditions. You and your family members age 1+ have access to 98point6 on-demand care as part of your Costco benefits package for up to $5 per visit. 

4. Know before you go.

Only go to the emergency room when it’s medically necessary. This includes when:

  • Your condition appears to be life threatening
  • Your condition could worsen and become life threatening on the way to the hospital
  • Moving could cause you further harm or injury

If you’re not having an emergency, but need medical care right away, use 98point6 or go to your nearest in-network urgent care. Either of these options can provide the appropriate level of care and are far less expensive.

5. Use Costco Health Solutions* for your pharmacy needs.

If you’re enrolled in a Costco medical plan, you and your enrolled family members automatically receive prescription drug coverage, administered by Costco Health Solutions (CHS). Fill your prescriptions at any Costco pharmacy or through Costco Home Delivery Pharmacy and save.

6. Get a second opinion.

Whether you’re facing a cancer diagnosis, considering surgery or dealing with another serious medical condition, getting a second opinion from a board-certified specialist is often the smartest thing you can do. If you and your family are covered by a Costco medical plan, you can get an expert second opinion at no cost through 2nd.MD.*

*Not available in Puerto Rico.
1Numbeo. Price Rankings by Country of Cigarettes 20 Pack (Marlboro) (Markets)

Want to do even more to improve your physical well-being and save money? Your Costco benefits can help.

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TAKE ACTION

FEBRUARY 2023

Saving for your kids’ college education

A NerdWallet survey found that 1 in 5 parents of children under age 18 haven’t started saving for their children’s college education but want to. If you’re a parent who knows you need to start building your child’s college education fund but haven’t gotten started yet, here’s how to begin.

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Consider opening a tax-advantaged account

529 account

When choosing an account for college savings, look into tax-advantaged options. One such option is a 529 account, which is specifically designed to save for education expenses. A 529 account allows your savings to grow tax-free, and some states even offer a tax deduction on your contributions.

The downside of a 529 account is that if you withdraw funds for anything other than qualified education expenses, you’ll be penalized. There’s also the risk that you won’t need the funds for education at all – though you can change a 529 beneficiary to another family member or even yourself for qualified education expenses if your child decides not to go to college. There are also limited investment options with a 529.

Roth IRA

Another savings option is a Roth IRA, which is traditionally used as a retirement account, with earnings that grow tax-free. Contributions to a Roth IRA are limited to $6,500 a year — $7,500 if age 50 or older — for the 2023 tax year.1 There are also income restrictions and contributions which can’t exceed earned income. So, unless your child earns money, you’ll have to use your own Roth IRA to save for your kids’ college education.

Contributions to a Roth IRA can be withdrawn at any time, but earnings are usually subject to a penalty if you withdraw them before you turn 59 ½ years of age. If you made the first contribution to your Roth IRA at least five years before, you could also withdraw the growth for qualified education expenses. The benefit of using a Roth IRA over a 529 account is flexibility. If your child doesn’t go to college, you can leave the savings in the Roth IRA for your retirement. Also, you have more investment options.

Start saving consistently, no matter how much

The average tuition cost at a public four-year in-state university is $9,377 in 2022-23, according to the Education Data Initiative. (The average tuition at a four-year private, non-profit college is $54,501.) If your child is young, this will likely be much higher when they’re ready for college. Costs will be higher still if they don’t live at home and need to pay for room and board.

While teens are thinking about getting into their “dream school”, they may not be thinking about what the student loan debt will do to their lives in 20 or 30 years. According to Dave Ramsey of Ramsey Solutions, student loan debt has become part of culture and is accepted as a normal part of life. The financial loan crisis, which is also referred to as a “Borrowed Future”, is drawing national attention and negatively affecting people and our economy.

While earning a college education isn’t everyone’s dream, it can be overwhelming to think about how much your child will need to pay for college, but the best thing you can give your money is time to grow. That means putting some money away on a regular basis, even if it feels like a drop in the bucket, and starting as soon as possible.

Let’s say you deposit an initial $200, then save $50 per month from birth through age 18. By the end of that time, you’ve contributed $11,000, but when you include modest investment returns of 5%, you’ll have $18,025 saved. That may not be enough to cover four years of college, but it can make an impact. And that’s assuming your savings rate doesn’t increase.

You can use an investment return calculator to see how college savings can grow over time.

Make a plan for extra money in your budget

Over time, you’ll probably find extra money in your budget that could boost college savings, like a tax refund or merit raise. Child care costs will also likely diminish or go away as your child ages, lowering your fixed expenses. Plan early to use some of these funds to save more for college.

Perhaps you want to put one-quarter of any windfall into college savings, or you decide to reallocate funds that previously went toward child care into their 529 account. The details don’t matter, but you’ll want to make these plans before the money is in hand. Otherwise, extra funds have a way of allocating themselves.

Don’t compromise your retirement for college savings

The NerdWallet survey also found that nearly 3 in 10 parents of children under 18 who have personal student loan debt (29%) prioritize saving for their kids’ education over saving for retirement. While it makes sense that parents want to keep student loan debt from burdening their children, retirement savings need to come first. Student loans are an option if your child needs them, but you can’t take out loans to cover your expenses in retirement.

Look into ways to cut costs before applications start

You don’t need to wait until your child’s junior year of high school to start thinking about how to keep college costs reasonable. Talk to your child early about how much you can afford to contribute to their education and the steps they can take to limit student loan debt. This could mean starting out at a two-year college, choosing an in-state school and applying for scholarships.

1The Motley Fool. Roth IRA contribution limits in 2023 are better than ever.

Sources: NerdWallet. How to start saving for your kids’ college.
Ramseysolutions.com. What No One Told You About Student Loans, Podcast series.

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November 1–22, 2022

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START YOUR ENGINES.

NOVEMBER 2022

Get ready for Annual Enrollment!

November 1–22, 2022 

Each year, Annual Enrollment offers you an opportunity to review your Costco benefits, make changes that better reflect your needs and goals, and confirm eligibility for your enrolled dependents. An Annual Enrollment letter and the 2023 Benefits Plan Changes booklet were mailed to you the last week of October. The booklet contains details about your 2023 benefits. You also can view the booklet on Costcobenefits.com.

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The finish line is in sight. Now’s the time to get ready.

Here’s a handy checklist to ensure you have a successful Annual Enrollment. You have until November 22, 2022, to complete the following steps:

  1. Sign up for text reminders on the Enrollment Website.
  2. Review your current benefits plan elections on the Enrollment Website.
  3. Complete the Dependent Verification to continue coverage for your family members, even if you don’t make any changes to your benefits.
  4. Enroll or re-enroll in your Health Care Reimbursement Account and/or Dependent Care Assistance Plan, administered by PayFlex®, for 2023.* This must be done every year. Important note: The balance carryover and grace period for reimbursement accounts will change effective January 1, 2023.
  5. Review your 2023 Benefits Plan Booklet.

To complete the steps above, log in to Costcobenefits.com.

*Not available in Puerto Rico.

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TAKE ACTION

OCTOBER 2022

Choose in-network dental care and save

You’ve probably heard that one of the best ways to save on health care costs is to “stay in network.” But what exactly does that mean? Do you really save money on dental care? What if you need treatment when you’re away from home? Whether your dental plan lets you go out of network or requires you to see an in-network dentist, there are reasons why you should you should always choose an in-network dentist.

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What does “in-network” mean?

A network is a group of health care providers. It includes dentists, doctors, specialists, hospitals, surgical centers and other facilities. For mainland Costco employees who participate in Costco’s medical and dental plans, these health care providers have a contract with Aetna®. (In Hawaii, it’s HMSA. Puerto Rico’s Triple-S plan does not contract with dental providers.)

As part of their contract, they provide services to our employees and their dependents at an agreed-upon rate. This rate is usually much lower than what they would charge if you were not a Costco employee or dependent. And they agree to accept the contract rate as full payment. You pay your coinsurance or copay along with your deductible.

Some plans do not offer any out-of-network benefits. For those plans, out-of-network care is covered only in an emergency. Otherwise, you are responsible for the full cost of any care you receive out of network.

It pays to choose in-network dental care1

table of prices based on plan and network

The Core and Premium (PPO) plans only pay up to Reasonable and Customary (R&C) charges for out-of-network dental expenses. The Core EPP and Premium EPP only pay for in-network charges. If you choose an out-of-network dentist, you’re responsible for all charges.

Why out of network dental care costs more

If you go out of network, your out-of-pocket costs are usually higher. There are many reasons you will pay more if you go outside the network, including:

The health plan pays less

Your Aetna health benefits or insurance plan may pay part of your dentist’s bill. But it pays less of the bill than it would if you got care from a network dentist. Also, some plans cover out-of-network care only in an emergency.

Out-of-network rates are higher

An out-of-network dentist sets the rate to charge you. It is usually higher than the amount your Aetna plan allows. Aetna does not base their payments on what the out-of-network dentist bills you. They do not know in advance what the doctor will charge.

An out-of-network dentist can bill you for anything over the amount that Aetna allows. This is called “balance billing.” A network dentist has agreed not to do that.

Cost sharing is more

The amount you pay an out-of-network dentist over the amount Aetna allows does not count toward your deductible. And it is not part of any cap your plan has on how much you must pay for covered services.

Many plans have a separate out-of-network deductible. This is higher than your network deductible (sometimes, you have no deductible at all for care in the network). You must meet the out-of-network deductible before your plan pays any out-of-network benefits.

With most plans, your coinsurance is also higher for out-of-network care. Coinsurance is the part of the covered service you pay after you reach your deductible (for example, the plan pays 80 percent of the covered amount and you pay 20 percent coinsurance).

You’ll have more work, too

Sometimes Aetna needs to approve some dental procedures before they are done. This is called precertification.

Some common procedures that require precertification include non-emergency surgery, dental implants and TMJ (temporomandibular joint) surgery.

If you visit a network dentist, that dentist will handle precertification for you. If you go out of network, you must take care of precertification yourself. That means more time and more paperwork for you.

You are covered for emergency care

You have this coverage whether you’re near your home or traveling. That includes students who are away at school.

When you need emergency care, go to any dentist. When you have no choice, Aetna will pay the bill as if you received care in network. You pay your plan’s copayments, coinsurance and deductibles for your network level of benefits.

They’ll review the information when your claim comes in. If they think the situation was not urgent, they might ask you for more information and may send you a form to fill out.

1Dental Access Plan — Procedure Price List powered by the Aetna Dental Access® Network. Each dentist has a different price list, but Aetna took averages from Los Angeles, New York, Chicago and Orlando.

Sources: Aetna. Network and out-of-network care.
Aetna. Procedures, programs and drugs that require precertification.

For more information about your Costco dental plan and how to find an in-network dentist, see the resources below.

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LEARN MORE

OCTOBER 2022

Protect your teeth, your wallet and your well-being

When it comes to oral health, an ounce of prevention can save you a ton of money and much more. By getting regular dental exams and cleanings, you can ensure that your teeth and gums stay clean and healthy. And you can catch problems early, before they get expensive.

With the Costco dental plan, the twice-yearly dental exams and cleanings you need to keep your mouth healthy are covered at 100%, when you see an in-network provider. And that’s good news for your teeth, your wallet and your overall well-being.

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The costs of poor dental health

The costs of poor dental health go well beyond just having bad teeth. They also affect your health, employment and well-being. Not only are there direct treatment costs, but there are also many hidden and unexpected costs of poor oral health.

Potential impacts start early in life

Tooth decay early in life can be especially impactful. According to one survey, early childhood tooth decay has been linked to impaired development, educational performance, poor behavior, family stress, diminished quality of life and even disability and death.

Dental issues can also result in lost school days. A recent study found that 30% of U.S. kids ages 6 to 12 miss more than 9 million school days due to oral health problems. In another study, children with poor oral health were nearly three times more likely to miss school due to dental pain.

Employment costs of poor oral health

Poor oral health can affect people’s job prospects and social lives. Missing or damaged teeth can cause anxiety and undermine self-confidence. According to the American Dental Association (ADA) report, Oral Health and Well-being, 38% of people surveyed feel life in general is less satisfying due to the poor condition of their mouth and teeth. The same report finds that 1 in 5 adults experience anxiety and 23% feel embarrassment due to the condition of their teeth and mouth.

Treatment costs and other health impacts

Direct treatment costs can be substantial for a variety of common conditions that result when oral hygiene or preventive dental care are neglected. Here are a few examples of conditions that can result from poor oral health and their average treatment cost (before insurance):

Average Costs of Dental Procedures1

Filling

Average cost: $204

One-surface resin (white) filling, front (anterior) tooth

Crown

Average cost: $1,312

Porcelain fused to high noble metal (e.g., gold)

Root canal

Average cost: $1,226

Molar, excluding final restoration

Complete upper denture

Average cost: $1,441

(Maxillary)

Dental implant, surgical placement

Average cost: $7,062

(Transosteal)

Prevention is a bargain

When it comes to maintaining good oral health, brushing, flossing and rinsing twice a day, plus twice-yearly dental exams and cleanings are not only essential, they make good financial sense. A recent insurance industry report estimated that adults who practice good preventive oral health care can save 31% in dental costs over five years. Likewise, adults who don’t receive preventive care can expect a 43% increase to their annual dental costs over the same period.

So, spend five minutes, twice a day, on your oral health care. And visit the dentist twice a year for dental cleanings and exams. You can save money — and much more.

1The select regional average cost represents the average fees for the procedures listed above in Los Angeles, Orlando, Chicago and New York City, as displayed in the cost of care tool as of June 2020. Actual costs and savings may vary by provider, service and geographic location. We use the average of negotiated fees from participating providers to determine the average costs, as shown on the chart.

Sources: 1Dental. Dental access plan — Procedure price list
1Dental. How much are dental implants?
University of Illinois Chicago, College of Dentistry. The many costs (financial and well-being) of poor oral health

Learn more about your Costco dental plan, including free preventive care and where to find an in-network dentist, by checking out the resources below.

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Learn the basics

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LEARN THE BASICS

SEPTEMBER 2022

Explore treatment options for alcohol concerns

People often think there are only two places to get help for alcohol concerns — Alcoholics Anonymous (AA) or residential rehab. But today, there are more choices than you might expect. Health care professionals now provide up-to-date treatments backed by science. Care is offered at different levels of intensity in a variety of settings.

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A two-part treatment approach

Typically, the first step is to see a primary care provider (PCP). After completing an alcohol use disorder assessment, they’ll discuss treatment options and make recommendations, which can include: 

  • Talk therapy. A licensed therapist can help people build coping strategies and skills to stop or reduce drinking. Treatment can include one-on-one, family or group sessions.
  • Medications. A primary care provider or a board-certified addiction doctor can prescribe non-addicting medications. These can help people stop drinking and avoid relapse.  

These two options can be used in combination and tailored to individual needs.

Four basic levels of care

There are four basic levels of care or intensity for alcohol treatment. These levels, as defined by the American Society of Addiction Medicine, include:

  1. Outpatient. Regular office visits for counseling, medication support or both. Some lower-intensity outpatient-care options, if appropriate, could include:
    • A high-quality, traditional outpatient program.
    • A care team you put together, including therapists and doctors with addiction specialties to team with your primary care provider. It’s a way to get higher quality, one-on-one care that maintains privacy.
    • Telehealth — phone or video sessions. These are phone or video sessions for talk therapy or medical care. They can be particularly useful in locations with few addiction health professionals.
    • eHealth options — online or mobile. The National Institute on Alcohol Abuse and Alcoholism (NIAAA) has developed a number of tools that help people overcome alcohol concerns. They include a computer-based cognitive-behavioral therapy program; digital self-help program; and a mobile tool to prevent relapse.
  2. Intensive outpatient or partial hospitalization. Coordinated outpatient care for complex needs.
  3. Residential. Low- or high-intensity programs in 24-hour treatment settings.
  4. Intensive inpatient. Medically directed 24-hour services; may manage withdrawal.

How do you know which level is right for someone? A complete assessment of a person’s alcohol problems and complications can help guide their care team’s recommendations.

Support groups for empathy and accountability.

In addition to professionally led treatment, many people benefit from mutual support groups. Groups can vary widely, so it’s important to try different ones to find a good fit. There are several good options, including:

  • Alcoholics Anonymous (AA) — the most common mutual help group, with meetings in most communities and online. Meetings involve participants sharing their personal histories with drinking and recovery and encourage progress along “12 steps” that have a strong spiritual component.
  • LifeRing — a secular (nonreligious) peer support network supporting abstinence from alcohol and other drugs.
  • Secular Organizations for Sobriety — an alternative to spiritual support groups, this is a network of local and online groups dedicated to helping people achieve and maintain sobriety.
  • SMART Recovery — a research-based support program that focuses on empowering members to build four sets of skills: motivation to abstain, coping with urges, problem solving and lifestyle balance.
  • Women for Sobriety — a self-help program designed by and for women, focusing on emotional and spiritual growth.

For more information on treatment options for alcohol misuse, check out this RFL video.

Regardless of where or how you seek treatment, look for approaches that are “evidence based.” This means the treatments are backed by large, well-designed studies.

Source: NIH NIAA. What types of alcohol treatment are available?

For more information on alcohol treatment services covered by your Costco medical plan, see the resources below and make an appointment with your primary care provider.

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Learn the basics

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LEARN THE BASICS

JULY 2022

How to save for your dream vacation

When you’re running errands, paying your monthly bills or knee-deep in work, your dream vacation may seem downright impossible. But it doesn’t have to be that way. You can turn that dream vacation into reality. 

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While the itinerary for a vacation may fall into place pretty easily, the finances may need some time. But don’t worry — you’ve got help. Here are four steps to help you kick-start your vacation savings plan.

1. Keep your dream vacation reasonable.

The first step of any journey is to understand your starting point. Your expectations will be different if you’re still building an emergency fund or paying off credit card debt versus if your house is paid off and you’re steadily saving for retirement. Your dream vacation for a given year might be a cool staycation or a quick trip to the beach instead of a Caribbean cruise or a tour of European capitals.

But that’s okay. Remember, the idea is to enjoy a welcome change from your everyday life for a while — not to match your neighbor’s Instagram-perfect adventure that would leave you in debt. Your job is to balance having fun with saving for the future.

2. Plan your vacation with the end in mind.

Once you know your starting point, you need to figure out where you want to be — and how much work it will take to get there. So do a little research into how much your vacation is likely to cost. Then, divide that by the number of months until you plan to take your vacation. Suddenly, you’ll know exactly how much you’ll have to save each month to reach your vacation savings goal.

And don’t forget: Plan for everything. Things always cost more than you expect, so build in a buffer to cover the unexpected stuff. You might think about things like eating out, but don’t forget about things like snacks or movie rentals for rainy days.

3. Create a special fund for your vacation savings.

A vacation is a big purchase, so it makes sense to add a “vacation” line to your budget and figure out how much money you need to set aside each month. Whether you use a physical envelope or SmartDollar®, which includes premium access to the online budget app EveryDollar, it’s the actual act of setting money aside that will make your vacation savings plan work.

Think back to the monthly amount you landed on in the previous step. Put that money aside in your “vacation” account each month and leave it alone. If you let it grow, the cash will be there when your departure date rolls around.

4. Cut some expenses and add some income.

As you build your budget during the upcoming months, look for adjustments that can help your vacation planning. For example, you might find some places where a little trimming could make your savings grow. Or you may come across opportunities to earn some extra income to put toward the trip.

Remember, dream vacations with unlimited budgets don’t just happen. You need to have the financial flexibility to transform a good vacation into a truly unforgettable experience. No one wants to go to Europe and not be able to enjoy its attractions when they get there. Cutting back on some luxuries and making a little extra income now will help you achieve that goal. Additional income may not apply to your situation at all, but it’s something to look for between now and your departure date.

Start your vacation savings plan today!

The earlier you start, the more you can put into your vacation savings account. These four steps will help you have a plan that works. Even more important, the tough work you put in now will help you experience your dream vacation debt-free — instead of living a financial nightmare for months when you return home.

Remember, as a Costco Executive Member, when you book a vacation through Costco Travel, 2% of your purchase goes towards your annual membership award.* In addition, you can earn 3% cash back rewards on Costco Travel purchases made with your Costco Anywhere Visa® Card by Citi.**

 *Terms and conditions apply. Annual 2% Reward certificate for Executive Members is sent by Costco at membership renewal. See the membership counter or Costco.com for details.

**Costco Anywhere Visa Card by Citi – Subject to credit approval. Earn 3% cash back rewards on Costco Travel purchases. Additional terms and conditions apply. Ask for details. Cash back will be provided as an annual reward certificate once your February billing statement from Citi closes and is redeemable for cash or merchandise at U.S. Costco warehouses including Puerto Rico, until December 31 of the year issued.

Source: Ramsey Solutions. How to save for your dream vacation.

Where in the world do you want to go? What adventures do you want to experience? The following resource can help you bring your dreams to life.

 

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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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multi-generation family

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.