Tag: Banking

 

20 Reddit Personal Finance Tips We Love

When it comes to personal finance advice, there’s so much information out there. It can be dizzying to sort through personal finance podcasts, books and blog posts. I mean, which personal finance experts should you trust? And where do you go for some easy-to-understand personal finance tips?

In comes Reddit.

Reddit’s user-generated content is free and can be a good source of information if you want to improve your financial situation.

The Best Financial Advice from Personal Finance Redditors

We’ve selected awesome financial advice from the Reddit subreddit r/personalfinance. We even scoured through posts and comments to find some gems to help you take action with your money. Are you ready? Take a look at these 20 financial tips from selected Redditors.

1. Save or pay off debt based on your situation – by Zambenis

Should you save or pay off debt? It’s an age-old question and the answer can vary. This Reddit user shares the nuance of the situation. If your job is secure and you have strong relationships, an emergency fund of up to three months can be a good start. This way you can  focus on repaying debt. If your employment situation is less stable, saving a larger emergency fund is a better option before going beast mode on your debt. So, build your emergency fund based on your situation and work toward getting out of debt.

2. Save and invest automatically – by flat_top

We love this post because we also believe in paying yourself first. Most people spend first and then feel like they have nothing to save. Here we are reminded that we should save and invest first, and then see how much we can spend on everything else. Automatically saving can help you do this. Using Chime, you can automatically save 10 percent every time you get paid. You can also round up your purchases so you’re saving every time you spend.

3. Budgeting can help you avoid credit card debt – by dajesus77

Have you ever checked your bank account and winced? Have you ever wondered just how much you charged on your credit card? Keeping yourself in the dark about spending can lead to debt. That’s why a budget is a perfect antidote to keep your spending in check and avoid credit card debt. To start, create a budget, track your expenses, and check your bank and credit card balances every day.

4. Not investing can cost you money due to inflation – by  GivemetheDetails

Let’s face it, investing is scary. There’s risk involved and so many factors outside of our control. But keeping all your money in cash and not investing anything is not the wisest choice. So, start by figuring out your risk tolerance and investing some of your money, while also keeping some of your money liquid in cash savings.

5. How to get a credit card with limited credit by BrunedockSaint

It’s a catch 22. To get approved for a credit card, you need to have credit history. But how can you build credit history if you’ve never had a credit card and no one will give you one with no credit? Here, the Reddit user shares his or her experience in banking and getting a credit card with limited credit. For starters, get a card from your bank, use a co-signer, get a store card, or even a secured card. The key is to repay your balance in full and on-time.

6. Advice on getting out of debt by PacificNorthLeft

Ready to get out of debt? It’s time to ditch those extra expenses (for now) and budget. Pick a debt repayment method, like the debt avalanche method where you focus on eliminating your high interest debt first. While paying off debt, you can still save for retirement, even if it’s a small amount. It all starts with saying goodbye to some expenses and having a plan.

7. Saving is only one part of the equation, focus on earning more too by – gregaustex

Personal finance advice tends to favor frugality. Save money! Ditch lattes! We dig frugality too, but it has a plateau. There’s a limit to how much you can cut back. This post reminds us of that and advises us to maximize our earnings too. So that means asking for that raise, earning more through side hustling, and starting that business. Saving is just one part of the equation — earning more is another part.

8. Best way to pay extra on a car loan by hrds21198

Do you have a car loan and want to pay it off fast? It’s best to call the company first. This Reddit post notes that sometimes extra payments are applied to interest and not the principal. To make sure your extra payments are going where you want them to, give the company a call and say you want to pay more toward your auto loan and you want it to go toward the principal balance.

9. Simple student loan advice by article4freeman

There’s so much student loan advice out there. Here we have simple advice. Save up a few months of expenses as a cushion, then pay off your student loans fast. After that, take the amount you put toward debt and save and invest it.

10. Start Investing in a 401(k) by KermitMadMan

You know you should be saving for retirement and one easy way to do that is through your 401(k). But how do you get started? First, make sure your emergency savings is covered. If your company has a 401(k) match, contribute enough to get the match. The key is to start somewhere and keep building.

11. Best financial tips to manage money and move out by mormengil

When you’re just getting started with adulting, managing your money can seem hard. How do you get started? How can you manage your money to move out of your parents house? This post gives a step-by-step guide on where to put extra savings and how you can manage your money and prepare to move out.

12. Fixed or variable interest rates by DaTower75

If you’re about to take out a loan, you probably will choose from a variable or fixed rate. Which one is better? Although variable rates may be lower, interest rates are likely to go up, so locking in a fixed rate can be a good option.

13. Create a “fun” savings account by Jrlutz31

Here’s some advice we can get behind. Create a “fun money” savings account! No more guilt about having fun. It’s in the budget. You have the cash. Start by saving automatically and setting some money aside specifically for F-U-N. Having fun with your money can help you enjoy life and may even help you stay on top of your other financial goals because you don’t feel deprived.

14. Getting out of overdraft fees by clearwaterrev

Overdraft fees suck. This post helps share how you can waive those pesky fees and get rid of them if you’re in this situation. You can also choose a bank like Chime which has absolutely no fees.

15. Know where your money goes and how to budget by tracking by xaradevir

Many of us have thought, “Where the heck did my money go?” It happens. This post reminds us to track, track, track. Track everything. Start by going through all your expenses over the past month. Write down ‘need’ or ‘want’ and evaluate where you can cut back. You can’t improve your financial situation unless you really know what’s going on with your money.

16.  Don’t try to time the stock market by KCPilot17

In this environment, people are starting to lose their minds over the stock market. Is another recession coming? What should you do? Keep it simple. Stay on course and don’t try to game the market. Think long-term, not short-term, and stick with the plan. Avoid emotional reactions to the market and know that the stock market can recover in time.

17. Building credit with credit cards the right way by owari69

Credit cards and building credit can be confusing. Yet, it’s fairly simple. Get a card and pay it back on time. Over time, your credit score will improve. It all starts with using credit responsibly. Pay off your balance in full by the due date. Keep your balances low. Only borrow what you need.

18.  Don’t take on debt just to build credit by JsLadder

So, you may need some type of credit to build credit. But you should never take on debt and pay interest just to build your credit. You don’t need to take out a car loan just to improve your credit. There are other ways to do this. For example, you can start with a secured credit card or only use your credit card for groceries and pay it in full.

19.  Max out retirement by the end of the year by acosmichippo

By the end of the year, there are ways to maximize your money. It’s the best time to max out your 401(k) contributions and HSA. This advice is simple and to the point.

20. Tips on how to get a raise by buyabighouse

As noted in another one of these Reddit tips, earning more is part of the financial equation. This can be done by asking for a raise. But, how do you that? Start by doing research on Glassdoor or Payscale to see what the market rate is for your position and your area. Keep tabs on your accomplishments and at the right time, talk to your supervisor about a raise. It can be uncomfortable but growth always is!

Get started

Read to improve your finances? You can start by checking out these 20 Reddit personal finance tips on everything from paying off your student loans, building your credit score and asking for a raise. What financial tips would you add?

 

 

The Important Relationship You Shouldn’t Overlook

Less than one-third of Americans feel confident in banks, according to a Gallup poll. This is about the same level of confidence Americans have in the criminal justice system or the presidency. Yikes.

If you’re wondering what’s to blame for this, you might consider the 2008 financial crisis, which was engineered by Wall Street. Or the cascade of bank scandals, which have besieged stalwarts like Wells Fargo and Citibank. Or the abundance of banking fees, which cost the average American $329 per year.

Rather than looking backwards, however, we’d prefer to focus on the future. We’d like to zero in on how Americans can change their relationships with banks. So, we’d like to start with a simple question: If your bank was a person, would you remain in your relationship?

Indeed, just like a bad boyfriend, a negative relationship with your bank can damage your entire perspective — and a good relationship can make everything better. Here’s how (and why) to ensure you and your bank fall into the latter category.

How Your Finances Affect Your Mental Health

While there’s no denying your finances have an impact on your psyche, a recent survey from Northwestern Mutual revealed just how much:

  • 25% of people feel anxiety about money “all the time” or “often.”
  • 44% call money their main stressor — more than their personal relationships (25%) or job (18%).

These statistics are not surprising, according to financial planner and money coach Debbie Sassen.

“Money management skills are something a lot of us are missing,” says Sassen.

“We didn’t learn them from our parents — it was a totally taboo topic of conversation — and we didn’t learn them in school… So from the outset, as adults, we feel vulnerable and intimidated about money,” she says.

With high fees, scandals and impersonal customer service, many of the big banks exasperate these feelings. “Generally and broadly, there’s a lack of trust among millennials in the financial industry, and it’s deserved,” financial planner Ariel Anderson told Fast Company.

“We constantly read headlines about the missteps of banks like Wells Fargo; we lived through the financial crisis,” states Anderson.

One such millennial is Valerie Stimac, a travel writer for Space Tourism Guide. At her traditional bank, she paid an estimated $7.95 per month to maintain her checking account.

“It felt like they were taking advantage of me, rather than providing a service. “It was frustrating to have a bank I felt like I couldn’t trust,” says Stimac.

It Doesn’t Have to Be This Way

One Gallup poll found that, at the least trusted bank, a mere 12% of customers strongly believed the company had their best interests at heart. At the most trusted bank, more than five times that number (64%) felt the same way.

Clearly, where you bank matters, and not all banks are built the same way. (Some never even charge fees.) Sassen, the financial coach, says a trustworthy bank “can be your friend” and “help you create a good safety cushion.”

In search of that “friend,” travel writer Stimac left her bank after more than a decade.

“Switching banks has been the best decision I’ve made,” she says.

“[Now] I trust my bank to look out for me as a customer — and to look out for my money, which is the foundation of my financial future.”

Stimac is far from alone when it comes to switching banks. Dan Pierson, founder of Bolt Travel, says he “got really tired of paying $12 a month for my checking account, then getting hit with $35 overdraft fees on $2.50 coffee purchases.”

So, after moving to a new city where his brick-and-mortar had no physical branches, Pierson switched to an online-only bank.

“My banking has been much simpler since moving online, and the customer service is significantly improved. It feels great to be backed by a bank that’s aligned with my financial goals,” he says.

Ready to Break Up With Your Bank?

Banking doesn’t have to be a miserable, fee-ridden chore. It can be free, and easy – and maybe even fun.

Obviously we’re biased, but we think Chime is all that — and more. By charging zero fees, offering early direct deposit, and encouraging automatic saving, we strive to overturn the negative experiences you may have had with other institutions.

We thrive off trust and transparency; on working with you, rather than against you. And we want you to like us as much as we like you.

In our opinion, that’s the way every relationship — whether it’s with a business or a human — should be. Don’t you agree?

 

How to Be Financially Productive in the Winter

If you live in many parts of the country, the winter seems to drag on. Instead of weekends at the beach or picnics in the park, you may be stuck inside, huddled in front of a fire and binging on yet another Netflix series.

But why not use these cold days to be financially productive? To help you figure out ways to improve your finances during the winter, take a look at these four tried-and-true tips.

1. Organize your taxes

Before you let out a long groan, we’re right there with you: Preparing your taxes is no fun. But, wouldn’t you rather be doing this now – when it’s dark by 6 pm and freezing outside – than in April when you could be having fun in the sun?

So, take the time now to organize your necessary tax forms, fill out a tax organizer, itemize any tax deductions, and figure out how much you can contribute to a retirement plan. If you have a salaried job and received a W-2 form, your tax prep may be pretty straightforward. But if you have a side hustle or are self-employed, your tax organization may take a bit longer. The key here is: Don’t wait until April 14 to file your taxes by the April 15 deadline. Besides, if you get ahead of the game, you can get your refund sooner.

Pro tip: Open a Chime bank account and get your tax refund via direct deposit. All you have to do is select “direct deposit” on your online tax return software and fill in your Chime Spending Account and routing number. As soon as your refund is automatically deposited into your account, you’ll receive a text alert and email from Chime. Cha-ching!

2. Audit your bank account and find ways to save

I don’t know about you, but I am much more eager to be out of the house when the weather is warm. So, what to do on a day when you just don’t feel like braving the harsh weather? Audit your bank account and see where you can save money. This way you’ll have more cash for a summer road trip, your emergency fund or your other savings goals.

Start by spending an hour on a cold winter day and looking through your monthly spending for the past three months (or elect to audit just the past month or some other time frame.) Take a close look at what you’re spending money on and where you’re spending it. Even if you think you know exactly how you spend your cash, you’ll be surprised by what you discover.

Here are a couple of examples of what I found on a recent bank account audit: My cable bill had crept up for the past three months, my spending on groceries seemed out of whack, and I still had my husband on my gym membership even though he never goes.

It was time to do something about this. So, I ended up switching from my cable provider to a fiber-optic network (long story short: we can’t cut the cable or fiber optic cord entirely because my husband won’t give up his local sports channels.) This will save us $50 a month right off the bat. Not only that but the new provider threw in a free year of Amazon Prime, Amazon Echo and two $50 Visa gift cards. Score!

As for the high grocery bills, I decided to try a meal delivery service with a discount code for $80 off the first month. I loved it so much much that I’m now paying the regular $55 a week for three meals a week. But, get this: I was spending $600 a month on groceries for my husband and I. That is now reduced to $250 a month. Add to that $220 per month for the meal service. This means our monthly grocery nut is now $470 a month, a $130 savings each month! Plus, cooking at home is now easier and more convenient, so we don’t order takeout or go out to dinner nearly as frequently. And you guessed it: This saves us even more money.

Lastly, I called my gym and removed my husband from my membership, saving me $30 a month. That’s what I call easy money in the bank.

The takeaway: You can find ways to save money on a cold winter day – simply by spending an hour auditing your bank account.

3. Budget better

Is your budget working for you? If not, don’t give up. There are lots of budgeting methods and the one you’re using now may not be a good fit for you.

What to do? Spend an afternoon researching different types of budgeting methods, including the 50/30/20 budget, the envelope method, and the zero-based budget. Figure out whether a different kind of budget would work better for your spending and savings habits. Factor in whether you need to save more money into an emergency fund or free up cash to pay down your debt. Think of this time of year as a great opportunity to dive in and make any necessary changes to your budgeting method.

4. Automate your savings

By now you’ve probably heard a thing or two about the benefits of automating. But are you taking advantage of this?

If not, sit down and implement simple financial changes that will allow you to automate your money, enabling you to save more cash without even thinking about it. For example, now may be a good time to switch to a bank that will help you level up your savings account. If you’re a Chime member, for instance, all of your purchases on your debit card can be rounded up to the nearest dollar. And this round up amount is then automatically deposited into your Savings account. On top of this, Chime will automatically deposit 10% of your paycheck into your Chime Savings account.

Chill out

We get it: Winter can be miserable. But instead of complaining about the weather, you can turn those cold, snowy days into financial opportunities. By following the four tips here, you’ll be able to get your tax refund sooner, create a budget that works, and find new ways to save money. And just think: Before you know it, you’ll be enjoying the spring with less financial stress!

 

Where Do Our Taxes Go? A Breakdown With the Help of Cardi B

As the saying goes, nothing in life is certain except for death and taxes. And every year when you file your tax returns, you may be scratching your head, thinking “Where the heck does the money go?”

Cardi B wants to know, too. Last year the superstar rapper, on an Instagram video that went viral, asked, “So you know the government is taking 40% of my taxes. And Uncle Sam, I want to know what you’re doing with my f***kin tax money.”

This is a great question, and the answer: It’s complicated. To keep things simple, here are some figures from an article at The Hill: The federal government spent $33,054 per household and collected $26,198 in taxes. What’s the budget deficit? We’re talking $6,856 per household.

Based on this $33,054 household amount, here’s where the money went:

Social Security/Medicare: $12,401. This comes out of your paycheck, and the 15.3 percent for Social Security and Medicare is divided evenly between you and your employer. Note: If you’re self-employed, you’re responsible for the entire 15.3 percent.

Anti-Poverty Programs: $6,112. This comprises assistance programs to help the less fortunate, like aid for low-income families. Some of these programs include Medicaid, Temporary Assistance for Needy Families (TANF), food stamps, housing subsidies, child care subsidies, Supplemental Security Income (SSI) and low-income tax credits.

Defense: $5,046. This is everything from military paychecks, operations in the Middle East, and the R&D and acquisition of new technologies and equipment.

Interest on the National Debt: $2,434. Just like how you pay interest fees on credit cards, mortgages and car loans, our government pays interest on the national deficit.

Veteran’s Benefits: $1,390. This includes income and health benefits provided to our veterans. 

Federal Employee Retirement Benefits: $1,098. This goes toward retirement benefits for federal employees.

Justice Administration: $546.  This is earmarked toward law-enforcement grant programs, and paying for federal attorneys and prisons.

Education: $536. While the majority of education spending comes from a city and state level, nine percent of K-12 education spending comes from the federal government. Where does the money go exactly? The lion’s share goes to low-income school districts, college student financial aid, and special education.

Health Research and Regulation: $533. This goes toward dozens of grant programs for health providers, as well as the National Institute of Health (NIH), Centers for Disease Control (CDC), and the Food and Drug Administration (FDA).

Highways and Mass Transit: $487. This is funded primarily by the 18.4 cent per gallon tax you pay on gas.

International Affairs: $371. This includes contributions to the UN, operation of American embassies abroad, and economic and military assistance to other countries.

Disaster Relief: $338. This amount provided assistance and relief to hurricanes and natural disasters.

Miscellaneous: $1,761. If you’ve been crunching the numbers, you might have noticed that there’s $1,761 still left to be spent. This remainder is distributed to federal programs that aren’t listed, such as unemployment benefits, social services, natural resources, farm subsidies, and space exploration.

Tax Filing Tips

Now that you have a basic idea of where the money paid from your federal taxes goes, how can you best prepare to file your tax return in 2019? Take a look at some of these tips:

Get Started Early. With all the changes from the Tax Cuts and Jobs Act and this historic, epic government shutdown, filing a return for the 2019 tax year might be a tad more complicated than in previous years. So, it’s important to get a jump on tax prepping as soon as you can.

If you’re going the DIY route, and using software to file on your own, gather all the required documents to file your taxes – starting with your wage and income statements (i.e. W-2s and 1099s). Have your receipts or credit card statements handy in case you need to include deductions. You can even try tracking some of your spending using a money management app.

If you’re working with a tax pro, ask her what documents you’ll need to gather to get the process rolling.

You can file your return as soon as it’s ready and this way you’ll get a refund sooner. And just think: This might be a nice boost to your savings as the average tax refund is $2,895 (this can vary by state.)

Consider Whether You Need an Extension. Need more time to file? You can ask for an extension. It gives you six more months to file, and pushes the deadline from April 15th to October 15th. Remember: Receiving an extension means you have more time to file, but payment for any taxes owed are still due by April 15th.

The More You Know

So there you have it. Both you and Cardi B now have a clear idea as to where those government tax dollars are going. It’s now your turn to file your tax return!

 

How Chime Offers No Fee Checking Accounts

You’ve probably heard the adage Nothing in Life is Free. Well, we’re here to debunk this. Did you know that you can get a free Chime checking account with no fees?

Chime is a mobile-only bank account that helps you save money automatically and manage your finances from anywhere. Now one of the fastest growing bank accounts in the U.S., Chime offers members a Spending Account, an optional Savings Account, and a Chime Visa® Debit Card. Rated the “Best Free Checking Account of 2018” by NerdWallet, Chime is on a mission to eliminate bank fees while empowering you to take control of your finances and save money.

Those pesky fees add up – fast. Did you know that the average U.S. household pays over $329 in bank fees annually, and that most Americans haven’t switched to a checking account with no fees? Pretty remarkable, right? If you’re ready to make the switch and kiss those fees goodbye forever, take a look at 5 reasons why Chime offers a no fee checking account, and how you can benefit.

1. Chime is committed to helping you get ahead financially

When you have to pay monthly fees just for having a checking account, this doesn’t help you pocket your hard-earned cash. Instead, banks profit off of you and Chime would rather profit with you. So, instead of charging you fees – like most traditional banks – Chime has turned the banking industry on its head. It makes no money off your no fee Spending Account, allowing you to keep all of your cash. How does Chime make money? Good question. Here’s the answer: Every time you use your debit card, Chime earns a small amount from Visa (paid by the merchant.)

2. Chime offers an awesome banking alternative to big banks

Did you know that the five largest banks in the U.S made more than $34 billion in overdraft fees alone in 2017? Chime, along with other challenger banks, want to change this with no fee checking accounts and debit cards that empower you to save money. Yet, regardless of where you bank, here’s a tip from Chime: Be sure to learn about any fees you may have to pay, including overdraft fees, savings account fees, account maintenance fees, foreign transaction fees, and more. And if you want a bank that will never rely on unfair bank fees for profit, Chime is here for you.

3. Chime offers a Spending Account that suits your lifestyle

With a Chime no fee checking account, you can do all of your banking right from the modern and intuitive mobile app. This includes depositing checks on the go, paying friends, transferring funds, paying bills and even mailing checks. Here’s how these main features work:

  • Mobile Check Deposit

To deposit a check, all you need to do is snap a quick photo with Chime’s mobile banking app, and then sit back and watch your account balance grow. No need to fill out a deposit slip, go to a brick-and-mortar bank or ATM, wait in a bank teller line, and write out a paper check and put it in the mail. You can deposit checks from anywhere in the world. Easy peasy.

  • Pay Friends

With a Chime Spending Account, you can send money instantly to friends and family, even to those that aren’t yet Chime members! Using the Pay Friends feature, you can divide up rent payments or split the bill when out to dinner with friends. And, you’ll never pay fees.

  • Automatic Savings

Now that you love your Spending Account, it’s time to automatically grow your savings with the Save When I Get Paid or Save When I Spend features. Automatically save 10% of your paycheck into your Chime Saving Account with Save When I Get Paid. You can also automatically round-up your purchases and save the different into your Savings Account with Save When I Spend.

  • Pay Bills Electronically

Using Chime’s bill pay feature, you can pay your bills, track your expenses, and keep tabs on your balance from the mobile app on any device. You can even leave your wallet at home when you go shopping as Chime supports mobile payment apps like Apple Pay, Google Pay, and Samsung Pay.

  • Mail a Check

We know mailing checks is old school. But, sometimes you gotta do it and Chime makes this task simple. It even puts the check in the mail for you. That’s right. If you have to mail a check, you can do this through the mobile app. All you have to do is let Chime know who to send a check to and for how much. Chime will then make sure your check gets to where it needs to be. Now this is what we call the best kind of virtual personal assistant.

4. Chime offers easy access to your money

While Chime is a mobile-only bank with no brick-and-mortar locations, this doesn’t mean you’re limited when it comes to ATMs. In fact, just the opposite is true. You can use your debit card to withdraw money from your no fee checking account at over 38,000 fee-free ATMs. In addition, you can use 30,000 plus cash-back locations.

Chime is part of the MoneyPass® and Visa Plus Alliance ATM networks, with locations throughout the United States. You can use the mobile app to find an in-network free ATM and then use your debit card to withdraw cash without fees. Now that’s convenience to the max.

5. Chime helps you save automatically

Now that we’ve explained Chime’s mission to help you save money with no fee bank accounts, it’s time to break down some of the key ways in which you can keep more of your money, while boosting your savings. And, remember, these money-saving features from Chime cost you nothing in fees and will help you save money without even thinking about it. Take a look:

  • Save When I Spend

    With Chime, you can save money every time you make a purchase or pay a bill with your Chime debit card. The Save When I Spend feature automatically rounds up your transactions to the nearest dollar and transfers the round-up from your Spending Account into your Savings Account.

  •  Save When I Get Paid

     This automatic savings feature allows you to save money with every paycheck. This way you can reach your financial goals faster. If you’re a Chime member, you can automatically transfer 10% of every paycheck directly into your Savings Account.

  • Get paid up to two days early with early direct deposit 

    Getting your paycheck early means you’ll have two more days to do more with your money. When you open a no fee checking account with Chime, you can set up direct deposit two ways: you can request an email with a pre-filled direct deposit form that you can give to your employer, or set it up yourself using the Account and Routing numbers listed in your Chime app. No waiting for your money while it sits in some mysterious electronic limbo, and no more worrying about lost paper checks. You’ll get your cash two days before most other traditional banks make the funds available to you. The waiting game is over!

Are you ready to open a no fee checking account?

If you’re currently paying bank fees, this means you are paying your bank for the right to hold onto your money. Ridiculous, right?

Yet, you have a choice. You can switch to a no fee bank account. Signing up for a Chime account takes less than two minutes and there is no minimum balance required to open a no fee checking account. What are you waiting for?

 

What to Do If the Stock Market Crashes

If you’ve seen the recent headlines, it seems that the next stock market crash could be around the corner. The housing market has stalled and, in December 2018, the Dow had the worst December performance since the Great Depression. All of these signs can be disconcerting, especially when you’re considering the impact to your own finances.

While this doom and gloom may make you feel as uneasy as the recession of 2008, there are some ways you can prepare yourself for a worst case scenario. Check out this guide to help you out if the stock market crashes.

Don’t panic

First things first: Do not panic. While you may freak out and consider taking all of your money out of your bank and hiding it under your mattress, this likely isn’t the wisest idea. Likewise, neither is immediately selling off your investments to avoid the volatility of the market. Why? Because if the market can crash, it can go up again.

According CNBC, if you invested in 2008 — instead of panicking — you’d be doing fairly well right now. The CNBC article states:

“In the 10 years since the crisis got rolling, the Standard & Poor’s 500 index has returned 7.8 percent, annualized, including dividends. That’s not far below the very long-term average yearly return of just under 10 percent. So a very unlucky investor who climbed into equities as they were about to careen off a cliff hasn’t been hurt too badly. A standard portfolio mix of stocks and bonds, as reflected in the Vanguard Balanced Index Fund, has returned a decent 6.8 percent over the same span, with roughly half the downside volatility experienced by the S&P 500. Clearly, the passage of time in the markets can help make up for bad timing.”

Cut back on spending

How much do you really need to live off of?

Look at your budget and evaluate areas where you can cut back. You can figure out where you can do this by looking at your bare-bones budget.

Why do this? Because if the stock market crashes, you may need to be a bit more frugal while you wait for a rebound. So, try not going out for coffee every day, but maybe only splurge for those lattes once a week. And, here’s a pro tip: Figure out how much money you need in order to pay all your bills. Once you have your budget set (rent/mortgage, food, transportation, etc.), you can look at the areas that aren’t essential and start to cut back. From there, you can figure out how much you’ve got to spend and how much you can save.

Boost your savings rate

A stock market crash can have a ripple effect on other areas of your life. For example, you may get laid off from your job, have limited access to credit or have a tough time getting clients for your side hustle. For these reasons and more, it’s important to be prepared and have cash saved up.

Experts recommend saving three to six months of expenses in an emergency fund, but you might want to boost that up to 12 months. While this may take some time, there’s no harm in starting to save more as soon as you can.

With beefed up savings, this will help you weather a storm if the stock market should crash.

Assess your risk tolerance

Investing is never a risk-free endeavor. When you’re just starting out, it’s important to determine your risk tolerance, as well as a strategy to grow your money over time.

What’s risk tolerance? Risk tolerance is how much risk you’re willing to deal with when investing. So, ask yourself this question: Are you an aggressive or conservative investor?

You may also want to consider any lifestyle changes that may affect the amount of risk you can take on. For example, are you preparing to have a baby, get married, go back to school or  going through a divorce? Perhaps you’re dealing with a layoff or you switched jobs and took a pay cut?

Your risk tolerance, as well as these lifestyle factors, should be considered and you can adjust your investing strategy accordingly. For example, perhaps you can move away from a stock-heavy portfolio if having too many stocks makes you skittish. Or, perhaps you can put more of your money into savings. The key is to be diversified in a way that makes sense for you – given your risk tolerance, lifestyles and goals.

Buy and hold

A good strategy in an uncertain market is to buy and hold.

So what exactly is that? Buy and hold is when you buy stocks and just hold onto them. You don’t try to play games or get into a situation you’re not well-equipped to deal with – such as trying to time the stock market.

The ultimate goal with investing is to build wealth, and this takes time. Think of your investments as a long-term play and this way you won’t be so stressed about the possible day-to-day volatility.

Think of it as a sale

Scarcity mindset, or a survival mindset — where you think resources are scarce — can be set off with a stock market crash. You might feel scared about your money, like there will never be enough.

Instead of living in fear and holding onto your money so tightly, you may benefit from a perspective shift. Consider a market crash as a ‘sale’ and invest more. If you feel comfortable, you can use this time to invest on the cheap and reap the benefits in the long term.

Keep your options open if the worst should happen

You’ll want to have a contingency plan if the sh*&^ hits the fan.

So, think about the skills you have in case you have to take a different type of job or start a new side hustle to earn extra income.

Here are some other tips: Check into whether your loans have better payment options available. For example, federal student loan borrowers can pay zero dollars on an income-driven repayment plan if your income is at a very low level.

Final word

The financial headlines can be scary. Yet, you can take steps now to be proactive if the stock market crashes. If it does take a tumble, remember not to panic and think long-term. This way your can stay the course and keep your finances in order during the short-term.

 

Daily, Weekly, Monthly Habits to Help Your Finances

Just like dirty laundry that tends to pile up if left unintended, keeping your financial house organized can feel like a gargantuan task. As my former boss used to say before we tackled a huge project: How do you eat an elephant? One bite at a time.

As you step into the new year, boosting your finances will come down to creating manageable tasks.

Here are a handful of simple habits you can form, in both in the short- and long-term, to improve your financial situation on a daily, weekly and monthly basis. Read on to learn more.

Daily: Check Your Balance

Checking your bank balance achieves several goals: You can check for fishy transactions, make sure your transactions are accurate, and glean insights on your spending patterns and habits. More importantly, keeping tabs on your bank account balance can help you see if you’re in financial hot water or if you’re in danger of incurring overdraft fees. No bueno.

I check my bank balance through a bank app every morning. It takes all but five seconds, and gives me an idea of how much I have left to spend until the end of the month.

Daily: Auto-Save

While you technically only need to set up recurring transfers once, setting your savings to auto-pilot is something that will help you with both short- and long-term goals. I auto-save for pretty much everything: vacations, musical instruments, writing retreats, a down payment for a car, and so forth. I even auto-save into a splurge fund that I use to spend on whatever I darn please. Setting this up is easy and only takes a few minutes. Even five dollars a week adds up to $260 a year. And trust me, that money can certainly come in handy down the line.

Speaking of this: If you’re a Chime member and set up direct deposit, you can even auto-save a percentage of your paycheck.

Weekly: Create a Weekly Spending Plan

Behavioral economics have shown that you’ll gain greater control over your finances if you review your budget weekly. Because you’re dealing with fewer transactions, it’s more manageable to see what is coming in and out of your accounts. And even though a lot of bills are paid monthly, breaking up your budget into weekly increments will help you anticipate and predict your expenses. What’s more, if you get paid bi-weekly, you may have less money the second week than the first.

I budget for everything the week ahead. If I know I’ll be going out for dinner or out with friends for happy hour, I’ll factor this in and scale back on, say, how much I spend on groceries that week.

Here’s another idea: Set aside a certain amount for your recurring, predictable bills. Then divvy up the remainder for your discretionary spending. Over time, you’ll be able to gauge how much you roughly spend each month for groceries, gas, eating out, entertainment, personal items, and so forth.

Weekly: Commit to Changing One Small Thing

What’s one minor adjustment you can make to improve your finances? It might be brown-bagging it to work a few days out of the week, or perhaps taking public transit. Spend a tad too much time on Instagram following your favorite influencers and brands? Try unfollowing for a month and see if you can rein in your purchases.

Small changes I’ve made include creating a “want” list of items I’d like but don’t necessarily need. Then I wait about a month to see if I’m still feeling the urge to splurge. I’ve also stopped eating out while I’m out and about on my own. Instead, I’ll typically dine out with company.

Monthly: Do a Budget Check-In 

While it’s best to create a spending plan every week, check in at least once a month to see what tweaks you can make it the coming months. For instance, last year I realized I’m far better off paying for a series of yoga classes than joining a gym. And because I rarely used my Deskpass subscription, which is the ClassPass equivalent of co-working, I canceled my membership.

Monthly budget check-ins also help you plan for one-off expenses, like insurance premiums and spending over the holidays.

Monthly: Go on a Money Date

Carve out some dedicated time each month to go on a money date—either with yourself or with a partner or friend. It’s a great time to check on the progress of your goals and envision what you ultimately want. You can even populate a vision board with what you want to achieve with your money. For example, maybe you want to take time off to work on a passion project, manifest a magical vacation to Bora Bora, or purchase your first house.

Money dates are also a great time to iron out challenges. If you anticipate a rough financial patch, drum up solutions on how you can get through the coming months. Or, if you and your partner disagree about your financial goals, a money date is a good time to hash things out.

Monthly: Autopay Your Bills

If you can swing it, set up autopay on as many bills as possible. Of course, that’s far easier if you have a steady paycheck. If you’re a freelancer or gig economy worker, and get different income at varying times, consider syncing up your bills to retainer clients. For instance, let’s say you’re a freelance graphic designer. You have one client who pays you a certain amount each month, and the money typically drops into your bank account on the 15th of the month.

Because that’s money you can count on, assign that paycheck to your “big rock” bills (aka rent or credit card bill).

Another tactic? Get ahead one month on your bills. This means that by the end of any given month, you’ll have enough cash in your account to cover the next month’s bills. While this seems like a tall order, you can get started by saving up a month’s worth of living expenses to get the ball rolling.

Break It Down Into Bite-Sized Pieces 

Tending to financial well-being is definitely more feasible if you chunk things down. By following these tips and committing to an hour or two a month to organize your finances, you’ll be on your way to forming better money habits.

 

How to File Your Taxes Online 2019

It’s a new year. Time to get in shape, eat healthy, start a new side hustle, and…..prepare your taxes. Really? Really.

While the deadline to file 2018 taxes isn’t until April 15, now is a great time to get organized. This way, you won’t be the one stressed out and scrambling to get your taxes filed online by 11:59 pm on April 15.

Are you ready to organize your taxes and get your finances in shape? Take a look at our handy-dandy guide to filing taxes online and start the new year with a sense of accomplishment.

Figure out what income forms you’ll need

Most people will be dealing with either W-2 forms, W-9 forms or both. And, yes, the Ws can be confusing. Here’s a bit more information about these forms so you can determine which ones pertain to you.

  • If you are employed, you will get a W-2 form sometime in January. This form states the amount of money you earned in 2018, as well as how much you paid in federal and state taxes and other payroll deductions, including the amount you contributed to an employer-sponsored retirement plan. This is the main income form you’ll need when filing your tax return.
  • If you have a side hustle or started a business in 2018, you’ve likely provided your clients with W-9 forms. If you earn more than $600 with a particular client (who should have your W-9 on file), that client would then fill out a 1099-MISC form indicating how much you were paid for the year. A copy of this form will be sent to both you and the IRS. You will then report this income when you file your taxes online.

Figure out if what forms you’ll need to fill out

Form 1040

If you have a 9 to 5 job and will be receiving a W-2 this month, you may be able to take the standard deduction. For 2018, the standard deduction for individuals is $12,000 and $24,000 for married people filing jointly. If you use this standard deduction, you can’t also itemize deductions. Instead, you’ll take the standard deduction and fill out the new Form 1040 (prior to tax year 2018, there were two other options for shorter forms: Form 1040EZ and Form 1040A).

Form 1040 with schedules

If you’ve had a life change (got married, got divorced, had a child, started a business etc.), this may bump you into a different financial situation where you’ll need to take itemized deductions versus the standard deduction. If this is the case, you may need to fill out the new Form 1040, in addition to one or more of the new schedules. For example, if you have capital gains, unemployment compensation, gambling winnings, or any deductions to claim (including student loan interest deduction, self-employment tax, or educator expenses), you may want to fill out Schedule 1. To learn more about the new Form 1040 and the six schedules, check out this Q&A from the IRS.

If you will be filing schedules for 2018, then it’s important for you to prepare and organize your itemized deductions in advance. This will help you when it comes time to file your taxes online. If you’re a freelancer, you’ll definitely want to organize your deductible expenses. This can save you big bucks by lowering the amount you owe or perhaps even netting you a tax refund. Here are some of the more common itemized deductions:

  • Home mortgage interest
  • Charitable contributions
  • Medical expenses
  • Self-employment expenses
  • Home office and other associated deductions
  • Educator expenses

Figure out how you’ll file online

According to the IRS, nearly 90 percent of taxpayers now use tax software and the agency expects that the new Form 1040 and schedules will make online filing even easier. You can prepare and e-file for free using IRS Free File.

Alternatively, you can spend some money and use one of the more popular DIY tax software tools, like Intuit’s TurboTax.

If you want professional help, you can go with an authorized e-file provider in your area. To find a local tax preparer, you can do a search here with your zip code or state.

File early. Get your refund early.

If you think you may be getting a tax refund for 2018, this is more of an incentive to prepare your taxes and e-file early. The sooner you file, the sooner you’ll get your refund and you know what this means – more money in the bank. And, if you want your cash as fast as possible, make sure you use direct deposit. In fact, eight out of 10 taxpayers get their refund via direct deposit through the IRS.

Pro tip: Chime makes it simple for you to get your money early. Here’s how to get your tax refund faster with direct deposit:

  • Open a Chime bank account
  • Select “direct deposit” on your tax return software and include your Chime Spending Account and routing numbers. Make sure all information is accurate.
  • Sit back, relax and wait for your refund to appear in your bank account. According to the IRS, nine out of 10 direct deposit refunds are issued within 21 days (it typically takes eight weeks via snail mail). Better yet, you’ll get a text alert and email from Chime the second your refund hits your account.

Final word

We know that taxes are no fun. But, before the very thought of organizing your taxes causes you to break out in a sweat, take a look at the guide and resources here. (Pro tip: if you need more expert help, it’s advisable to seek out an accountant or tax professional).

Before you know it, you’ll be ready to file your taxes and set your sights on other financial goals this year.

 

These Facts About Overdraft Fees Will Shock You

In the All Things Pesky universe, overdraft fees rank right up there with mismatched socks and next-door neighbors who vacuum in the dead of the night.

However, these bank fees are not just minor annoyances. They can put a serious dent in your pocketbook. Not only can overdraft fees be expensive, but they can potentially impact your credit. (FYI: Chime doesn’t ever charge its members overdraft fees. Never ever.)

Here are 5 shocking facts about overdraft fees that will send you reeling (don’t say we didn’t warn ya):

1. Americans pay more than $300 in bank fees every year

According to data from BankFeeFinder.com, Americans pay an average of $329 in bank fees annually. What’s worse, one in 10 pay a whopping $1,000 a year in fees. This includes fees for non-sufficient funds (NSF), monthly maintenance fees, ATM fees, overdraft charges and more. Just think: This money could go toward your living expenses, emergency fund, that awesome vacay—anything is better than paying your bank for holding onto your money.

2. Overdraft fees have been on the rise since the recession

Based on recent data released by the FDIC, the 10 largest banks in America collected $11.45 billion in overdraft and NSF fees from American consumers in 2017. What’s more, a recent survey by Moebs Services reveals that consumers paid a whopping $34.3 billion in overdraft fees in 2017 (this includes overdraft fees from big banks, smaller banks, and credit unions). This is the highest since the Great Recession in 2009, and a three percent increase from 2016.

With that much money going toward mere overdraft fees, you may think twice before reaching for your debit card to make transactions. In our age of money micro-transfers, a small misstep can oftentimes result in a series of overdraft fees. I know because this has happened to me. For instance, you can get dinged financially for not having enough in your checking account when an automatic investment hits, or even when you buy groceries at the market.

According to Moebs Services, the median overdraft fee in 2000 was $18. It’s now at $30 (most of the big banks charge an average of $35.) And credit unions aren’t much better. In 2000 credit unions charged a median price of $15; in 2017 that fee is up to $29. It’s a sad reality when credit unions, typically known for lower fees, aren’t cutting consumers any slack when it comes to overdraft fees.

3. Big banks still engage in abusive practices

According to analysis from the non-profit Center for Responsible Lending, at least one of the top 10 big banks do the following: charge extended overdraft fees on top of per-transaction overdraft fees, use high-to-low transaction processing for some forms of debit transactions, and allow five or more overdraft fees to be charged per day to its customers. Indeed, some of the big banks are still manipulating transactions to wrangle as much money in fees from you as possible.

4. Banks leave customers in the dark about overdraft protection programs

Many customers who incur overdraft fees aren’t well informed about how overdraft protections work, according to a recent study by Pew Research. As It turns out, many consumers aren’t aware that if they don’t have enough funds to cover a transaction, they can actually decline the purchase and not have to pay an NSF fee.

The same Pew Research study also showed that banks ineffectively communicate with consumers about overdraft protection programs. What’s worse, even among customers who had a straight-up convo with their bank, their understanding of exactly how overdraft programs work was pretty low. This cloud of confusion can result in even higher bank fees.

Case in point: Per the Pew research on overdraft programs, one in three of those who overdrafted treat these overdraft programs as a type of loan. For example, when they don’t have enough funds in their bank account to pay for those groceries, they use overdraft programs as way to borrow small amounts of cash.

5. Those who opt-in to overdraft protection pay more in fees

Indeed, overdraft programs are not loans and they don’t save you money. As it turns out, people with overdraft protection usually pay $450 more in bank fees, per a recent study by the Consumer Financial Protection Bureau (CFPB).

It’s no surprise that many of those who frequently incur overdraft fees are also financially vulnerable – meaning they tend to have lower credit scores and account balances than those who don’t overdraft as often.

No overdraft fees with Chime

If you want to avoid overdraft fees entirely, look toward Chime. Chime’s fee-free structure means you won’t ever have to incur bank fees. You won’t have to pay overdraft fees, monthly maintenance fees, foreign transaction fees, or minimum balance fees. Plus, you can enjoy ATM withdrawals sans fees from over 38,000 MoneyPass ATMs.

Overdraft terminology 101

To help you better understand the lingo, check out this basic overdraft fee glossary:

Overdraft

An overdraft occurs when you don’t have enough funds in your account to cover a transaction. In turn, your financial institution (i.e. bank or credit union) pays for that transaction. A fee may be charged for this service. You can overdraw your account by paying for bills, writing checks, withdrawing money from ATMs and shopping online.

Overdraft protection

In the case that your bank account balance falls under zero, overdraft protection provides a guarantee that your debit card transaction will clear. When you opt-in to overdraft protection, the financial institution takes money from a linked account to cover the transfer. A fee is often tacked onto the transaction.

Non-sufficient funds

Non-sufficient funds (NSF) is a common banking term that means you don’t have enough money in your checking account to cover a check, online bill payment, or debit card transaction.

 

How Long Does it Take to Get a Tax Refund?

Waiting for your tax refund to hit your bank account is no fun. In fact, you may be wondering whether there’s a faster way to get your money.

The answer is: yes. There is a faster way to get your tax refund and there are actual steps you can take to speed up the whole process. To help you get your money in the bank, take a look at how the tax refund process works. From here, you can take the necessary steps to receive your tax refund faster.

How long do tax refunds usually take?

The answer to this question is: It depends.

If you e-filed your return, you can expect to receive a faster refund through direct deposit. The IRS states that it can pay out most tax refunds within 21 calendar days after submission. Yet,  nine out of 10 people who e-file receive their tax refunds in three weeks or less..

If you prefer to file an old-school paper tax return, you can expect a longer processing period. The IRS states it takes about six to eight weeks to process a refund once it receives your tax return. So, if you want to get your refund faster, e-file with direct deposit. You may want to consider filing online through websites like TurboTax, TaxAct, and E-file.

Once you’ve e-filed your taxes, you will need to setup how you will receive your payment. And, if you want to make sure you get your refund as fast as possible, set up direct deposit (eight out of 10 tax refunds are received via direct deposit). If you’re a Chime member, all you have to do is choose “direct deposit” on your tax return software. You then can input your Chime Spending Account number and corresponding routing number.

From there, you just have to wait for your refund to show up in your bank account. Once your refund hits your account, Chime will send you a text alert and email. This way you will know that the money is there the second you receive it.

Tips for getting your refund faster

While there isn’t any way to guarantee exactly when your tax refund will arrive, there are a couple of ways to get it even faster.

First, file your completed tax return right away if possible (the deadline is April 15, 2019.) If you are missing W-2 forms (or 1099 forms if you are an independent contractor), then the process can take longer. So, at the beginning of January in any given tax year, be on the lookout for any forms you expect to receive. If you do not receive them by January 31, reach out to your employer or client and ask them to send these forms to you.

Furthermore, make sure you have the rest of your vital tax documents available and prepared in the event you need them.

Lastly, consider filing your taxes with a tax professional. While going to a professional won’t guarantee a faster tax refund, an expert is versed in the ins and outs of filing taxes and can  advise you on making the best decisions for your particular situation.

The most important takeaway: The sooner you file your taxes, the sooner you can receive your tax refund.

What to do if you still haven’t received your refund

If you still haven’t received your tax refund after three weeks’ time, there may be a few reasons why.

First, your tax return may have included errors, such as misspelled names, incorrect social security numbers, unsigned forms and more. To avoid errors, make sure to carefully review your tax return before you click submit. Another reason for a potential hold-up: Perhaps you were a victim of identity fraud. In this situation, the IRS may hold onto your return until it can work with you to rectify the situation.

If you still feel like things are moving slowly, here are three additional steps you can take:

  1. Use the IRS’ “Where’s My Refund?” online tool. It’s a quick and easy way to check the status of your tax refund. All you have to do is login to the IRS’ secure website. To access the system, you will need to input your tax filing status, your social security number and the amount you declared on your tax refund.
  2. Call the IRS to check on the status of your refund. To call the IRS, you can dial the hotline at 800-829-1964. Again, you will need to be prepared and provide your social security number, tax filing status and the amount of the refund you are expecting.
  3. Use the free IRS app, called IRS2Go. Similar to the online platform, you’ll need to enter the required information into the mobile tool. It’s never been easier to check your tax status while on the go.

Be smart with your refund

Before you receive your tax refund, be sure to create a plan for spending or saving your newfound cash.

While spending it on a vacation or new clothes sounds appealing, it may be wiser to save your tax refund for future use. To get the most bang for your buck, consider opening a savings account through Chime. This way you can continue to grow your cash.

 

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