Tag: Financial Education

 

Credit 101: The Basics You Need to Know

You’ve probably heard the term credit. You may already know that this is an important part of building a solid financial future. But no one ever seems to talk about the specifics. For starters, what exactly is credit and why is it so important?

In a nutshell, building a healthy and solid credit history is an important part of your financial health. Just like it’s important to save a portion of your income, improving your credit can help you rent an apartment and get approved for a loan.

Are you ready to learn more about credit? We’ve got you covered. Here’s everything you need to know to begin understanding credit.

What exactly is credit?

When you buy something with credit, this essentially means you’re purchasing it now with the promise to pay for it later. Two common types of credit include installment loans and revolving credit. Take a look at what these credit types mean here:

Installment loans

This is when you borrow a set amount of money and use it for a specific purpose, like a car loan, a student loan, or a mortgage. When you pay for something with installment credit, you’ll make equal monthly payments that include interest.

Revolving credit

This is when a lender gives you a line of credit – up to a certain limit – and you then borrow from that amount and pay it off over time or even in one lump sum if you can. A common type of credit line comes in the form of money you spend on your credit card. In this instance, a credit company will extend to you a certain amount of credit and you can spend up to that amount. Your payments each month will fluctuate based on how much you’ve borrowed.

How does a lender decide whether to loan you money?

Let’s say you decide that it’s time to buy a car. You don’t have the cash to pay for it, so you apply for a loan. Easy peasy, right?

Not so fast. Before you can typically borrow that money, a lender needs to feel comfortable that you’re actually going to repay the money. To do this, the lender will look at a number of factors. The most important criteria is your credit history.

Credit history, credit report, credit score. What do these all mean?

Your credit history reflects how you’ve spent money over a length of time.

This may include how many credit cards and loans you have and whether you’ve paid your bills on time. If you’ve been paying for almost everything in cash and you’ve never borrowed any money, you probably won’t have much of a credit history. If you do, it will be summarized on a credit report.

There are three credit reporting companies that keep tabs on your credit history: Equifax, TransUnion, and Experian.

Lastly, a credit score is a number that is calculated based on your credit history. This three-digit figure indicates to a lender how likely you are to repay your debts. A higher credit score means you have a better credit history. A lower credit score means you have a bad credit history. Most of the time a lender will use your FICO credit score when deciding whether to lend to you. These scores range from 300-850.

If you don’t plan on borrowing money, should you really care about credit?

If you ever want to rent an apartment, get a cell phone plan, or buy a car, you’ll likely need good credit. Your landlord, utility company, or mobile phone carrier might check your credit. Your future employer might even check your credit.

Even if you don’t plan on borrowing money anytime soon, it’s still a good idea to build up your credit. You never know when you’re going to need it. For example, you might decide someday that you’d like to buy a house. If you have a solid credit history already in place, you’ll have a much easier time qualifying for a mortgage or any other type of loan.

Your credit history doesn’t only impact whether a lender will loan you money. It also impacts how much you pay in interest. Borrowers with a good credit history are considered less risky so lenders will usually offer them lower interest rates. And, lower rates can potentially save you thousands of dollars over time.

How does someone get a good credit score?

At a basic level, good credit comes from paying your bills and making your loan payments on time. But there are a few more things that go into it:

  • Don’t max out your credit. Lenders will want to see that you haven’t borrowed too much money. For example, if you have a credit card with a $10,000 credit limit, it’s a good idea to keep that balance as close to zero as possible. Experts advise keeping your balance below 30% of your credit limit. In this case, that would be $3,000.
  • Apply for credit only when you need it. Applying for multiple loans at once can signal to lenders that you’re having trouble with your money. So, try not to rush out and get a lot of credit cards at the same time.
  • Work on improving your credit history. The longer you’ve been building your credit, the better your score will be. Years of making on-time payments will show that you’re a trustworthy borrower.

How can I start building credit?

There’s a famous quote that says the best time to plant a tree was 20 years ago. The second best time is now. If you haven’t started building your credit history yet, now’s the time to begin.

Start by getting a free copy of your credit report from each of the three credit reporting agencies. You can also request a free credit report each year by going to AnnualCreditReport.com. Once you have the report, start by checking the information and making sure it’s all correct. The report will also include recommendations on how to begin improving your credit.

If you don’t have any credit history and you need to begin building it, there are a few easy ways to get started:

  • Get a secured credit card: With a secured credit card, you make an upfront deposit, which is usually your credit limit. If you make a deposit of $1,000, for example, you’ll have a credit limit of $1,000. After that, it works like a regular credit card. You use it to make purchases and then make on-time payments to build your credit score.
  • Become an authorized user. Do you have a friend or family member that has good credit? He can add you to his credit card as an authorized user. The catch is that your friend will be on the hook to pay for anything you charge and if his credit declines, this can also negatively affect your credit score.
  •  Apply for a store card. It might be easier for you to qualify for a store credit card, one that you are only able to use while shopping at that particular company. Just be aware: Store credit cards often come with higher interest rates, so be sure to pay off your balance each month.

Understand Your Credit and Improve Your Financial Future

As you can see, building good credit is a long game. Yet, if you play the game right, you’ll be on your way to a healthy financial future.

 

What’s a Good Credit Score in Your 20s?

When you’re in your 20s, you’re just beginning your financial life.

This may mean getting your first big paycheck, applying for a new credit card, and managing your checking and savings accounts. Yet, another important aspect of your financial life in your 20s is building your credit and establishing a good credit score.

Your question now may be: What is a good credit score and why is this important? Read on to learn how a good credit score can help you when you’re in your 20s.

What is a credit score?

A credit score is a three-digit number that represents how creditworthy you are. In other words, this number tells lenders how likely you are to repay your loans and if you’re a responsible borrower.

There are many different types of credit scores but the most popular is the FICO credit score. The FICO credit score range is from 300-850. The lower the score, the worse your credit is. If your credit score is high, your credit is in good shape.

What is a good credit score?

Now that we’ve reviewed credit score basics, your next question may be: What constitutes a good credit score? According to credit bureau Experian, a good credit score is 700 or above.

But if you’re in your 20s and just starting out, a score of 700 or higher may be tough as you’re just establishing your credit history. In fact, according to Credit Karma, the average credit score for 18-24 year-olds is 630 and the average credit score for 25-30 year-olds is 628.

FICO has different categorizations for credit scores and a 630 is deemed as “fair”. A “good” credit score based on FICO’s criteria is 670-739, a “very good” score is 740-799 and an “exceptional” score is 800-850.

So, given the fact that the average credit score for people in their 20s is 630 and a “good” credit score is typically around 700, it’s safe to say a good credit score in your 20s is in the high 600s or low 700s.

Keep in mind that when you’re in your 20s, you’re still establishing your credit history and your credit score takes into account the length of your credit history. Only time can help that part, so if you maintain good financial habits, the hope is that your score will elevate as you get older.

Why is a good credit score important?

Let’s be real, your credit score can seem pretty arbitrary. But it’s nonetheless important when it comes to getting your first apartment or applying for your first credit card.

Why is this? Because your credit score can make or break whether you get approved for an apartment. It can also determine whether you get approved or denied for a credit card. It can even affect the interest rate you get. This is crucial to understand because, if you take out a loan, interest can cost you a lot of money over time. Even the difference between a few percentage points can potentially cost you hundreds or thousands of dollars in interest.

So, having a good credit score can help you save money, and help you get better interest rates.

How can you improve your credit score?

What if you don’t have a good credit score quite yet? Or, perhaps you want to maintain your good credit and keep it in good standing?

There are a few simple rules to live by to boost your credit. Take a look:

  • The most important rule is to make all your payments on time. Your payment history determines 35 percent of your credit score, so it has the biggest impact.
  • The second rule of thumb is to make sure your credit utilization makes up 30 percent of your score – or less. Your credit utilization is how much of your total credit you use. Maxing out your cards each month can signal the alarms for lenders and make you look like a risk.
  • Lastly, try not to open too many new lines of credit. Opening too many lines of credit in a short period of time can look risky to lenders and lower your credit score.

Take responsibility for your credit score

As you can see, taking action and being responsible in your 20s can help you build your credit over time. So, refer back to this guide and start improving your credit score now. And, just think: This will help you land that apartment, buy a new car or get your first rewards credit card.

Are you ready to improve your credit score in your 20s and start adulting?

 

The New Rules of Personal Finance: Gig Economy Edition

Save as much as you can, spend less than you earn, invest wisely. While these pillars of personal wellness may ring true, there are some financial rules that need a facelift. You could say times are a changin’.

My friend and colleague, Kristin Wong, who is the writer and author of Get Money, recently wrote a thought-provoking piece on the new rules of personal finance. Wong takes a look at home ownership, going to college, debt repayment and investing. Yet, the new rules of money also include other facets of our financial lives and take into account how to save money and earn more in the gig economy.

Take a look at four rules we’ve put together to help you tackle your finances in today’s times.

1. Living on Steady Paychecks

Are you one of the 53.7 million Americans who are freelancing?

Then you know that paying your bills on inconsistent income is real. Cyndi Lauper might think that “money changes everything,” but in my humble opinion, variable income changes everything, my friend.

When you have a steady flow of money coming in each month, you can create a spending plan without any issue.

Instead: If your paychecks hit your bank account at different times of the month, consider syncing up paychecks to different bills. For instance, your largest paycheck, which might be relatively the same each month, could go toward rent. Maybe another paycheck from another gig could go toward your student loan and credit card debt.

Jot down when each bill is due, and how much it is. Next, assign income to bills. While some payments from jobs drop at different times of the month, the money you receive from other clients might be more consistent. In turn, this might be able to help you stay on top of your bills.

Want in on another tactic that has been a budget-saver for me? I aim to get one month ahead. So, I try to have enough in my bank account at the end of the month to cover the next month’s expenses.

Pro tip: If you’re a Chime member, try auto-saving a percentage of your paycheck every time you get paid.

2. Budget Monthly

Budgeting monthly makes sense for those who have a steady paycheck and get paid twice a month. But how about those who are gig economy workers or freelancers?

It’s hard to create a spending plan when your income changes constantly, let alone drum up a monthly budget.

Instead: Consider budgeting weekly. Seven days is a lot easier to budget for than 30 days. I personally plan out my discretionary spending a week ahead. I give myself a certain amount each week to spend on food, going out, and personal items. Then I figure out an amount I can spend each day. It’s a fun game I play. So, if $30 is my daily amount, I try to have “no-spend” days or spend less than that. By the end of the week, I’ve have “extra” money to spend.

If that’s too much math and money nerdiness for you, consider assigning an amount each week, and spend it until you reach zero. Hopefully you won’t have to replenish until the following week.

3. Save Three to Six Months in an Emergency Fund

While this remains a solid rule, it’s hard to start an emergency fund when you’ve got bills to pay, a debt load to manage, and other competing financial priorities.

Instead: Start with a rainy day fund. What’s the difference between a rainy day fund and an emergency fund?

A rainy day fund can have different rules. While you might take money out of an emergency fund for say, a major car repair or an unexpected medical bill, you can tap into a rainy day fund when you’re having a lean month and need to cover your bills.

Also, a rainy day fund typically has a smaller balance in your account than an emergency fund. Whereas a rainy day fund might have one to two months of living expenses, an emergency fund has anywhere from three to six months — sometimes more. This might seem like a Herculean task, but try auto-saving small amounts each week into a rainy day fund. Once you’ve got this down, you can work towards saving more into an emergency fund.

4. Save 10 Percent of Your Retirement

To piggyback off of Wong’s advice, it’s hard to say you should save for exactly 10 percent of your retirement, when you aren’t able to save anything at all. According to a report from the National Institute on Retirement Security, about two-thirds of folks between the ages of 21 and 32 have nothing saved for retirement.

Instead: Save what you think you’ll need in retirement. But also, save when you can. As a freelancer, after my living expenses are covered, I save a percentage for my retirement. And there’s no hard and fast rule that you need to save monthly. You could save every quarter or once a year if you need to. As long as you save something, that’s the important thing.

And keep this in mind: We live longer and carry more debt. Semi-retirement seems to be the new norm. So, you might want to consider continuing a side hustle, at least part-time, in retirement.

Take Positive Steps Today

While the same old financial rules will always ring true, it’s important to follow new money rules as well. Hopefully these four new rules of personal finance will shine a light on how you can approach your money differently and still achieve financial wellness. Godspeed!

 

Women and Money: Financial Wellness Advice From Women

In March, we celebrated Women’s History Month and now that it’s April, we’re bringing awareness to Financial Literacy Month.

We wanted to celebrate both occasions by gathering the best money tips from a cross-section of women — from successful female entrepreneurs to women working in male-dominated industries

Here are 6 women who offered up their best tips on women and money, women-owned businesses and more. Take a look.

1. Sandi Knight, Senior Vice President and Chief Human Resources Officer for HealthMarkets

Sandi Knight knows how important protecting yourself is. As the Senior Vice President and Chief Human Resources Officer for HealthMarkets, an insurance marketplace, she works to help consumers get the health coverage they need.

“I think it is important that women start young in their careers understanding finances, the need for insurance and what creates wealth – and on the opposite end, debt. Insurance, especially life insurance, is critical if they have young children and even more so if they are single parents. If something were to happen to them, how would their children be taken care of?” says Knight.

Knowing the type of coverage you need in terms of life insurance, disability insurance and more can protect you from the unthinkable. While many of us don’t want to think anything will happen to us, it’s better to be safe than sorry.

2. Mira Violet, CEO of digital agency Amethyst Design

Mira Violet is the CEO of digital agency Amethyst Design. The agency helps companies with SEO, web design and more. As a woman owned business, she is all about getting paid what you’re worth.

Many women are underpaid with the gender pay gap and it’s key to boost your pay, says Violet.

“Make sure you’re being paid fairly. Ask male co-workers in the same position and experience level what they’re being paid. Look at sites like GlassDoor to compare your income to others in your job position. The culture of not talking about our finances only serves those who seek to underpay and undervalue us,” she says.

So, it’s key to talk to your colleagues about pay. Look up salaries in your area and compare what you’re earning. At the right time, negotiate your pay so that you get paid what you deserve.

3. Deborah Sweeney, CEO at MyCorporation.com

Deborah Sweeney is the CEO of MyCorporation.com, a company that helps other businesses form an LLC or corporation. Her top women and money tip for female owned businesses is to know just how you will fund your business. Funding is the bloodline of any business and you want to be clear how you will get your money.

“Starting a business is not easy, especially if you don’t have the funds,” says Sweeney.

According to Sweeney, here are seven ways women can access funding:

1.   Angel investors

2.   Pitch your business idea to venture capitalists

3.   Apply for grants with the Small Business Administration

4.   Crowdfunding

5.   Donations from friends and family

6.   Open several credit cards and increase the limits on each one. (Remember, you’ll have to pay everything back, plus interest)

7.   Ask your bank for a business loan. (Most business loan applications get rejected. You’ll need to have a high credit score to increase your chances of acceptance. Also, you’ll need a detailed business loan plan. You need to give your loan provider an exact plan on how you will spend the money. Without this information, you will likely be rejected.)

4. Gemma Roberts, Chartered Accountant for a large non-profit organization

Gemma Roberts is an accountant and also founder of TheWorkLifeBlend.com, where she helps others build flexible lifestyles and businesses. The crux of getting your money right starts with seeing where your money goes, says Roberts.

“Carry out a full audit of your spending habits. Do you have any savings? If you had an unexpected expense, could you cover it? Do you have any loans or an overdraft?”

“Once you have a good understanding of your current situation, you can set yourself specific financial goals. It might be to pay off your debt, retire early or save for a house. This can seem like a lot of work, but it’s never been easier to improve your financial wellbeing. There are a variety of apps available that help you to budget, save money and set financial goals. Many of them can access your bank account and assess your spending habits.”

In order to improve your financial well-being, knowing where your money is actually going is the first step. Then you can adjust and set goals that work for you. You can even use a bank like Chime that helps you automatically save.

5. Danielle Kunkle Roberts, Co-Founder, Boomer Benefits

Danielle Kunkle Roberts is the co-founder of Boomer Benefits, an insurance agency that helps people with Medicare. She knows first-hand what it’s like to make mistakes in business. One of her top tips for female entrepreneurs is to be wise about partnering up with others.

“Don’t partner with someone you don’t know very well just because you are nervous about starting a business. I made this mistake in 2005 and it took me two years to buy out my other two partners,” saus Kunkle Roberts.

“It’s vital that you know the work ethic of anyone that you get involved with and that all parties have the same money philosophy,” she explains.

“In my scenario, I wanted to invest all the profits back into the business but my other partners wanted to take it all home every month. This left me doing the bulk of the work to generate sales while having only one-third of the profits – my own – to invest back in. Believe in yourself or partner with someone whose work ethic you are very sure about.”

It can be enticing to want to work with others but don’t use it as a crutch. Going into business with someone is like a marriage and you want to make sure you’re on the same page when it comes to your business goals and financial habits.

6. Daniella Flores, senior software engineer

Daniella Flores is a senior software engineer who works on an all-male team for a credit company. As a 20-something Hispanic and creator of blog ILikeToDabble.com, she believes that when it comes to women and money, it’s all about paying yourself first.

“Pay yourself first every time you get a paycheck and by that I mean, automate transfers into savings accounts and investment accounts so you can grow your money,” says Flores.

“Make payments towards debt every two weeks instead of every month. Automate as much as you can, but always track where your money is going.”

With a Chime bank account, for example, you can automate your savings through our round-up program and also save 10 percent with every paycheck. Putting money away for yourself first is a great way to ensure your financial wellness.

Bottom line

When it comes to women and money, it’s all about advocating for what you’re worth and going after what you deserve.

If you’re a female entrepreneur, you’ll also want to make sure your business is financially healthy, too. Just remember: Financial wellness can provide the foundation you need to weather the storms both personally and in your business life.

 

The Cliffs Notes Guide to Money 101

Have you ever hung out with a group of friends and the conversation veers toward money?

You may feel anxious as your peers discuss their savings and investment portfolios. As for you? You keep quiet as you’re completely overwhelmed.

Yet, you’re not alone when it comes to anxiety over money. In fact, many Americans feel uncomfortable talking about wealth and other financial topics. According to a global study on financial literacy conducted by the S&P Ratings Service in 2015, 43% of Americans are financially illiterate. This means that they didn’t have the basic financial knowledge required to make informed and sound decisions about their money.

The U.S. Government is also aware of this problem and designated April as National Financial Literacy Month – all with the hopes of raising financial knowledge. Luckily, gaining insight into your finances doesn’t require years of extensive study. Even a cursory understanding of money matters can have a significant impact upon your financial situation.

To help you become more financially literate, we’ve created a guide that breaks down some of the most important aspects of money management, including savings, budgeting, borrowing, and long-term financial planning. We’ve also included some financial terminology that can help you make informed decisions to boost your savings. Read on to learn more.

Savings 

If getting in shape was your No. 1 resolution for this year, saving more money may have been No. 2.

The majority of Americans desperately want to save more money, but unless you have developed consistent and actionable goals, it can seem daunting.

One simple way to effectively save more money is to enroll in an automatic savings program, like the one offered at Chime. This way, you can start saving money without even thinking about it. With a Chime account, every time you make a purchase with your Chime Visa® Debit Card, transactions are automatically rounded up to the nearest dollar and transferred into your Chime Savings Account. The program also allows you to automatically set aside 10% of each paycheck into your savings as soon as you get paid.

There are several ways to save more money and your options often depend on your personal situation and lifestyle. Yet, regardless of how much money you earn, if you have an employer-sponsored retirement plan, or a 401(k), it’s a wise idea to contribute as much money as you can – especially if you can save money directly from your paycheck. If a 401(k) plan isn’t an option for you, consider opening an individual retirement account (IRA) to start saving now for your future.

If you’re looking to pull money out of your savings before retirement and want a safe way to earn money, consider opening a money market account (MMA). According to Investopedia, money markets accounts pay interest rates that are typically higher than at savings accounts. Many banks, however, require higher minimum balances in money market accounts in order to avoid fees and earn higher interest.

Budgeting

Another crucial step to saving money is creating a budget. You can start by taking a close look at how much money is coming in and how much is going out. To further explain, your net income is essentially the money you take in each month from your job, minus taxes and deductions. Once you have that net income figure, you can make a list of all your fixed expenses, which are costs that do not change month to month. This may include your rent or mortgage, utility bills and loan payments.

With this information, you can build a budget and figure out how much you can effectively allocate to your savings account.

Bari Tessler, a financial coach and author of The Art of Money: A Life-Changing Guide to Financial Happiness, subscribes to the 50/30/20 budgeting plan, initially developed by Senator Elizabeth Warren. The plan allocates 50% of your net income to fixed expenses, 30% to discretionary spending, and the remaining 20% to savings.

Tessler says that it’s not always possible to save twenty percent, and unexpected expenses may make it impossible to save at all. She emphasizes that your relationship with money will last your entire life, and ultimately, the amount you can save is very personal and can change over time.

Borrowing and Debt

Want to borrow money to buy a car or for a personal loan?

Oya Altınkılıç, a finance professor at the Robert H. Smith School of Business at the University of Maryland, recommends understanding the borrowing process and what will be expected of you.

For instance, getting approved for a loan depends heavily upon your creditworthiness. And this can be determined in part by your credit score, a three-digit number that gives lenders a snapshot look at how likely you are to repay your debt. Lenders will also look at your current assets, which are essentially anything of value that you own that can be converted into cash, such as real estate or cars. You should have a general idea of the value of your assets, including cash.

If you have a credit card, you may think it’s a good idea to buy expensive items on your card, perhaps instead of taking out a personal loan. However, credit card debt can pile up fast, especially if your annual percentage rate (APR) is high and you are paying hefty interest charges every month.

Just remember: Borrowing money typically has a cost, and it’s best to determine that cost upfront and evaluate it against your long-term financial goals before deciding whether to proceed.

Seek Professional Advice

Professor Altınkılıç says that if you don’t feel comfortable investing or managing your finances on your own, it’s a good idea to seek advice from a financial expert.

“You cannot beat the market on your own so don’t try. It is best to hire a financial professional who understands your short- and long-term investment goals, as well as your risk tolerance.”

“The financial industry is one of the most highly-regulated industries, and you have a higher chance of being successful if you choose someone who is reputable.”

To that end, you can begin your search for a financial advisor at the National Association of Personal Finance Advisors (NAPFA).

Start Saving More Money Today

Tessler at The Art of Money explains that many financial decisions are based on beliefs about security, abundance and fear that were developed during the childhood years.

People get paralyzed by money because of shame and guilt about not having enough saved or not investing earlier. Instead of dwelling on the past, however, it’s important to create sustainable practices around money – starting today.

Are you ready to level up your financial literacy and start saving more money? We thought so.

 

4 Inspiring Stories to Motivate You to Become More Financially Literate

Let’s say you’re hanging out with a bunch of wine snobs. Everyone is talking about their favorite merlots and chardonnays and wineries. And you, a consummate beer lover, keep your mouth shut, for fear of being perceived as an uneducated philistine.

If you don’t know much about personal finance, you might behave similarly. Chances are, you don’t want to announce that there’s no money in your bank account at month’s end. You also don’t want to tell anyone that you don’t know the difference between a 401(k) and an IRA.

Your knee-jerk reaction might be to bury your head in the sand.

If you’re clueless about your finances, you’re in good company. It turns out that 32 percent of young adults have limited money management skills, according to a University of Illinois study.

But, here’s the good news: You can start taking charge of your financial situation at any time. And,  in honor of Financial Literacy month – and to give you inspiration –  we’ve rounded up stories and tips from people who went from being financially illiterate to money-saving champs. Take a look:

Get Your Side Hustle On

When Logan Allec graduated from college, he was a financial mess. At 21 years old, he had more than $35,000 in debt, no car, and zero balance in his bank account. The little money he earned straight out of college went toward rent and student loans.

Allec remembers sitting at his cubicle one morning, pondering what his life would look like in the future, and he suffered a minor panic attack.

“I saw future me living a life of want and need,” says Allec, who is now a CPA and owner of Money Done Right.

To turn things around, Allec focused on boosting his income while lowering his expenses. To increase his take-home pay, he worked as much overtime as possible at his day job while side hustling. To save on rent, he moved in with roommates and ended up sharing a room with three other guys, which lowered his rent by $275 a month. He also cut costs by preparing food at home instead of eating out, and opting for generic rather than brand-name items at the supermarket.

By the time he turned 22, Allec had over $10,000 in his savings and investment accounts, and was adding $2,000 to his balance each month.

Start Small

When Jon Dulin became interested in personal finance, he read books and blogs, and listened to podcasts on the topic.

“I wanted to understand how people build wealth so they could choose to work or not work,” says Dulin of MoneySmartGuides.com

Dulin found that all the money experts were saying the same thing: It starts with saving money. But he was still skeptical.

“I didn’t think that it really was this simple. I was certain there was a trick or secret no one was willing to share.”

Regardless, he started squirreling money into his workplace’s 401(k) plan.

“I was saving twenty dollars a paycheck. It felt pointless, but I did it anyway.”

To his surprise, by the end of the year he had close to $1,000 after growth and dividends. By the end of the second year, he was closing in on $2,000. Dulin was in disbelief.

“I realized it was that simple. Now I find every way I can to save money, even if it’s five dollars, because I know that it will grow into larger sums,” he says.

Pay Yourself First

A few years ago, Todd Kunsman was stuck in an apartment he could barely afford, had a high car payment and two student loans. To make matters worse, he was laid off from his job a few weeks shy before Christmas. This left Kunsman with just a few dollars each week in his checking account to scrape by on.

He started getting knee-deep in reading books, following blogs and listening to podcasts on his own time in order to learn more above finances and investing.

“I realized that becoming financially literate was on me,” says Kunsman.

“And while there is a lot of information, it’s not that hard to understand once you take time to digest the material.”

Fast forward to the present, and Kunsman has invested over $70,000, knocked out 95 percent of his student loan debt, and his car is fully paid off. Plus, he’s maintaining a 65 percent savings rate.

Kunsman also adopted the pay yourself first mindset. Each time he gets paid, he socks away a percentage for retirement and for his savings. To stay consistent, he suggests auto-saving for your money goals. And of course, be patient.

“Even if you can only save a few bucks each week, by the end of the year you’ll be amazed at your progress. We all have to start somewhere,” says Kunsman.

Track Your Spending

Camilo Maldonado grew up in poverty and was never taught how to manage money at home. But when he went to college and had to stretch his dollars and handle his own finances, he began using a money management app to track his spending. Knowing how much he spent in all areas — meals, entertainment, travel — changed everything.

“When I graduated and got my first job, I was already comfortable with living within my means. That experience in college fundamentally changed my attitude toward money,” says Maldonado, now a co-founder of The Finance Twins.

“If you don’t track where your money is going, you’ll never be able to master your personal finance situation. You also don’t have to use a fancy program if you don’t want to. You can start with your bank and credit card statements and a blank sheet of paper. It’s that simple,” he says.

Start Today

Are you ready to increase your financial literacy?

Even if you don’t feel like you know enough about your money matters, you can learn from these financial tips and take action today. In turn, you’ll start to make headway toward your money goals. What could be more motivating than growing your net worth?

 

10 Best Money Books to Improve Your Financial Literacy

Some people seem to be naturally good at managing their money – they’ve always had cash in the bank and they actually enjoy budgeting.

On the other hand, there are those people who struggle with money. Maybe it’s due to a lack of financial knowledge, a drastic amount of debt, or simply feeling overwhelmed.

If you identify with the latter, you are not alone. In fact, in a recent study conducted by Student Loan Hero, just 43 percent of respondents stated they feel like they are financially successful. This means that a whopping 57 percent said they’re not financially confident. Yikes.

But here’s the good news: There are plenty of educational resources available, including excellent books that can help you gain more insight on your finances. Whether you’re looking to pay off debt, save more money, or start investing, there is a book for you.

Not sure where to start? Check out these 10 books that can help you improve your financial literacy.

1. Best book for millennials: Broke Millennial: Stop Scraping By and Get Your Financial Life Together by Erin Lowry

Everyone has to start somewhere. Even if you’re relatively new to the financial scene, there are tons of quality books to help teach you everything you need to know. Yet, Erin Lowry’s book, Broke Millennial: Stop Scraping By and Get Your Financial Life Together, stands apart from the rest.

Lowry’s simple, conversational tone is certainly helpful, as she walks you through the basics of budgeting, picking the best bank for you, dealing with debt, preparing for retirement, and more.

2. Best book about student loans: Bye Student Loan Debt: Learn How to Empower Yourself by Eliminating Your Student Loans by Daniel J. Mendelson

Author Daniel J. Mendelson and his wife once had nearly $150,000 of student loan debt due to many years of graduate school and hefty interest rates. By creating and sticking to a simple repayment process, the couple became debt-free within five years.

In Bye Student Loan Debt, Mendelson walks you through his simple debt repayment system. And more importantly, the book will give you hope if you are feeling like you’ll never pay off your student loans.

3. Best book on frugality: 365 Ways to Live Cheap: Your Everyday Guide to Saving Money by Trent Hamm

Frugality is one way to fix your financial situation. By living on the cheap, you have more money for the things that are truly important to you.

Trent Hamm, founder of the blog The Simple Dollar, knows how to be frugal. Hamm credits frugality and mindfulness for overhauling his formerly dire financial situation. And, his book, 365 Ways to Live Cheap: Your Everyday Guide to Saving Money, offers some easy ways to save money in your day-to-day spending.

4. Best book for investing: The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns by John C. Bogle

The Little Book of Common Sense Investing is the classic guide to getting started with the stock market. And, while you may not recognize the author by name, you certainly know of him – John C. Bogle is the founder of the investment company Vanguard. Bogle believes investing is for everyone, regardless of your education, income or experience.

While the stock market has its ups and downs, Bogle’s book has withstood the test of time. It is now on its tenth anniversary edition.

5. Best book for increasing your income: Hustle Away Debt: Eliminate Your Debt by Making More Money by David Carlson

While most financial books focus on saving, Hustle Away Debt offers a fresh perspective by teaching you about the importance of increasing your income.

Author David Carlson is also the founder of the popular millenial financial blog Young Adult Money. In his book, he details his secrets to getting out of debt by increasing his income through side hustles. If you’ve ever wanted to increase your income while learning new skills, then this book is a must-read.

6. Best book on budgeting: The Money Book for the Young, Fabulous & Broke by Suze Orman

Suze Orman is one of the original financial gurus. She has seven New York Times best sellers, but you may recognize her most from her television show, The Suze Orman Show.

Orman provides to-the-point, no frills financial advice. For those just learning to budget (or learning to stick to a budget), look no further than The Money Book for the Young, Fabulous & Broke. Orman walks you through everything you need to know.

7. Best book for couples: Money Talks: The Ultimate Couple’s Guide to Communicating About Money by Talaat and Tai McNeely

Relationships and money are often a neglected topic. In fact, in a study by CreditLoan.com, over 30 percent of men and women hid a financial secret from their partners.

To say there is room for improvement is an understatement. That’s where Money Talks: The Ultimate Couple’s Guide to Communicating About Money comes in. This book hits on a sometimes sensitive topic. Not only does it provide valuable communication tips, but it teaches you how to set and achieve financial goals as a couple.

8. Best book for general financial advice: Total Money Makeover by Dave Ramsey

Dave Ramsey is one of the top financial writers out there. His book, Total Money Makeover, shows you how to take control of your finances in a simple 10 “baby-step” process, which includes paying off debt, saving for an emergency fund, starting to invest, and other financial goals.

Total Money Makeover provides foolproof, no-nonsense advice for anyone looking to improve their financial situation.

9. Best book for saving: Rich Dad Poor Dad: What the Rich Teach Their Kids About Money – That the Poor and Middle Class Do Not! by Robert T. Kiyosaki

In the book Rich Dad Poor Dad, author Robert Kiyosaki outlines the lives of two men: his father, who was constantly broke, and his father’s friend, a wealthy entrepreneur. He believes “street smarts” can often be more valuable than a more traditional education.

Rich Dad Poor Dad challenges the conventional ideas of saving by providing information on how your current view of money can affect your future finances.

10. Best book for early retirement: How to Retire Early: Your Guide to Getting Rich Slowly and Retiring on Less by Robert and Robin Charlton

At the age of just 43, Robert and Robin Charlton were able to retire from their full-time jobs. They had worked a collective total of just 15 years. They now run a website, WhereWeBe.com while traveling the world.

Their book, How to Retire Early: Your Guide to Getting Rich Slowly and Retiring on Less, is designed to help others do the same thing they did. They outline repeatable steps that anyone with a full-time job can implement. Overall, they aim to communicate that retirement is not just a dream. It’s achievable.

 

What Is Financial Literacy? And Why Should You Care?

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The majority of Americans are illiterate.

Not in terms of basic reading — most of us can do that — but in terms of our finances.

When the FINRA Education Investor Foundation asked more than 25,000 Americans six simple questions about personal finance, 63% failed. Millennials fared the worst, with a passing rate of just 24%.

This lack of financial literacy is, understandably, having a huge impact on our country. Many of us are paying high bank fees, falling behind on our bills, drowning in debt, and failing to save for retirement. Clearly, something needs to change.

We’re here to help by breaking down what financial literacy means, why it matters, and how you can improve yours. Read on to learn more.

What Is Financial Literacy?

Financial literacy is the ability to understand your money.

When you’re financially literate, you have a grasp on concepts like budgeting, saving, investing, credit, debt, insurance, and interest. And, with a bit of basic knowledge, you’re able to make smart financial decisions about taxes, retirement, real estate, and college.

To Jill Fopiano, CEO of O’Brien Wealth Partners LLC, financial literacy means “the ability to understand and manage important areas of your finances so that you can meet your financial goals.”

This includes financial jargon, too.

“It is as important to be an educated consumer of financial products as it as for any other major purchase,” says Fopiano.

Knowing the difference between a Roth and traditional IRA, or compound and simple interest, for example, can significantly affect your financial future.

Why Does Financial Literacy Matter?

You may think personal finance is boring or unimportant. If you whole family is “bad with money,” you may even think you’re doomed to follow in their footsteps. But the truth is you can transform your life by learning basic financial concepts.

“Financial literacy is the foundation of a life where you feel secure and safe enough to do what you want,” explains Bobbi Rebell, a certified financial planner and host of the Financial Grownup and Money in the Morning podcasts.

“If you don’t have the information, you can’t create a path to your goals,” says Rebell.

For many, one of those goals is retirement. Whereas most Americans used to receive post-retirement benefits from their employers, fewer than 20% of today’s private sector jobs come with pensions. This means you’re responsible for your own future. And, this isn’t something that’s easy to do. In fact, the median amount of retirement savings for a working family is a paltry $5,000.

In addition to affecting your future, financial illiteracy can harm you in the present, too. Take a look:

  • In 2018, the average American lost $1,230 due to a lack of knowledge about personal finance.
  • A shocking 39% of millennial women do not pay their bills on time, resulting in costly late fees and interest charges.
  • A dearth of general financial knowledge, according to one study, cost investors $200 billion over the past 20 years.

“Financial literacy is really about empowerment,” says Fopiano.

“The more you know, the more able you are to make good decisions, avoid sketchy offers, and secure your own future.”

Four Steps to Increase Your Financial Literacy

Since only 17 states require high schools to teach personal finance, it’s important to take your education into your own hands. Here are four steps to help you get started.

1. Devour financial media

As Rebell says, “Becoming financially literate is easier than ever because of the incredible resources we all have access to.”

Feel free to consume information in a way that suits you best. Maybe you’d like to listen to podcasts during your commute; maybe you’d rather watch videos on your days off.

Here are some recommended resources:

2. Take it slowly

Financial literacy is like a tall mountain: You’re not going to reach the summit right away — or maybe ever. The best you can do is take it slowly, tackling one topic at a time.

While you should get a basic grip of personal finance as soon as possible, don’t dive deep into every topic at once. That would be overwhelming, and could discourage you from progressing further.

“Pick an area that is particularly relevant to you — say, budgeting — and commit to mastering it over the next three months. Once you have accomplished that, move on to the next area,” says Fopiano.

3. Ask for help

You probably wouldn’t try to fix your plumbing on your own. Or try to learn chemistry without a teacher. The same goes for money. Although teaching yourself is a fantastic way to get started, you may eventually need some professional assistance.

“This doesn’t have to be a self-study course,” says Fopiano.

“If you are really serious about getting your financial future in order, and could benefit from a sound financial plan, seek out a certified financial planner,” she says.

If you’re not ready for human help yet, turn to financial technology. Use Mint to create a budget and track spending, Charlie to monitor your finances as a whole, Credit Karma to track your credit scores, and Chime to save automatically.

4. Stay curious

The key to financial literacy is, of course, education.

If you dream of becoming financially secure, and stable, and maybe even wealthy, you should keep learning. You should continue your education by reading about personal finance, seeking professional help, and using technology that simplifies the process.

This is your money, after all, and it affects every single aspect of your life.

“Financial literacy is about knowing the right questions to ask. None of us have all the answers, but if we have the right questions we can get there,” says Rebell.

 

Overdraft Protection: What to Know & How to Avoid Fees

Have you ever swiped your debit card and worried that you might not have enough money in your account? If this sounds like you, you might consider overdraft protection to save you from such a predicament.

But is it worth it? Read on to learn all about overdraft protection and overdraft fees.

What is overdraft protection and how does it work?

In general, if you make a purchase with your debit card and don’t have enough funds in your account, the purchase won’t go through. This is typically called an overdraft — which is when you go below your account balance and dip into the negative territory. This situation can be awkward for you and the person behind the cash register. It also can be highly inconvenient if you need whatever you’re purchasing like now.

This is where overdraft protection comes in. Overdraft protection essentially protects you from overdrafting. So, instead of getting your card declined and leading to an uncomfortable situation, your card will go through like normal – even if you don’t have enough money in your account to cover that purchase.

But overdraft protection comes at a price, in the form of overdraft fees which can add up (more on that later). So, while overdraft protection, on the surface, can seem like a great solution to a temporary problem, it’s not all it’s cracked up to be.

So, what does overdraft protection do?

Overdraft protection is a safety net that helps you avoid overdrawing your account. In short, it’s a type of financial protection that will help float you money if you have insufficient funds. So if you swipe your debit card or try to get cash out of an ATM, you may be able to do so even if you technically don’t have enough money in your account.

If interested in this protection, you’d want to talk to your bank and enroll in the program. Additionally, it’s important to know all the upfront costs such as overdraft fees, credit line limits, etc.

Pros of overdraft protection

The main pro of overdraft protection is convenience. Overdraft protection allows purchases to go through, even if you don’t have enough funds in your account. This can save you embarrassment, inconvenience and time. You don’t have to deal with your card getting declined in public or being unable to access cash when you really need it.

How do I use my overdraft protection?

If you want to use overdraft protection, first make sure it’s something you’re signed up for. As noted above, your bank must get consent from you first to enroll you in overdraft protection.

Once you are enrolled, see if you have to link another account or a credit card to complete the process. Each bank may have different policies and procedures.

When it’s set up, overdraft protection will be in place if you overdraw your account. But remember: The hope is that you never have to use it! If you do, this means you’ve run out of money in your account, which is no fun.

Cons of overdraft protection

Overdraft protection seems good in theory but it can cost you in the long run. The fees can vary from bank to bank and your financial institution can decide what to charge. And it’s not just one charge either. You can continue getting hit with overdraft fees if your account is overdrawn.

We found that consumers can get hit with four to six overdraft fees per day. In some cases, that number can be as high as 12. What’s more: Consumers who frequently overdraft end up paying more fees than those who do not opt into overdraft protection. In fact, The Consumer Financial Protection Bureau (CFPB) found that frequent overdrafters who opt into this coverage pay nearly $450 more in fees.

On top of that, if you accrue enough overdraft fees and stay in the negative, you’re at risk of your account being closed. Having your account closed by your bank is more than just a pain, but a major inconvenience on your financial life. Just think about all the bills that are connected to that account, or not having access to your money for a period of time.

All of these are major cons of overdraft protection and should be considered carefully.

The reality of overdraft fees

Overdraft fees – by and large – are big business for many banks. In fact, the average overdraft fee is around $35. In 2017, consumers paid 34.3 billion dollars in overdraft fees in 2017, a number which has been on the rise since the Great Recession.

Even credit unions, which are often thought of as more community-minded and consumer friendly have jumped on the overdraft fee bandwagon. Overdraft fees at credit unions have nearly doubled from $15 in 2000 to $29 in 2017.

In short, overdraft fees are the bread and butter for many financial institutions. They give banks a way to make money off consumers by positioning overdraft protection as a useful service.

What does overdraft protection mean for your credit?

As noted above, in some cases your bank may offer you a line of credit or link your overdraft protection to a credit card. If linked to a credit card, you could end up paying more. Why? Because some card issuers might consider the overdraft a form of “cash advance,” which has its own set of fees, not to mention higher interest rates.

Can you overdraft if you have no money?

To get overdraft protection, your bank will typically connect a savings account and move over funds to cover the overdraft. If you don’t have any money in savings, the protection may not work.

However, other banks have overdraft lines of credit. If eligible, the bank will loan you a line of credit so that your purchases are covered, even if you don’t have enough money in your account. Of course, you will still have to pay it back, with interest, like any other line of credit.

Can you withdraw money from an ATM if you have a negative balance?

If you’re headed to the ATM to get cash, and end up taking out more than you have in your account, you will overdraft. The overdraft definition means that you “overdraw” on your account, which means taking more than you have available.

If you have overdraft protection, you will likely be able to withdraw money from your account and you’d have a negative balance.

But of course, there will be an overdraft fee attached. So while you may get the cash you need, if you don’t have the funds in your account, it will cost more in the long-run.

How can I avoid overdraft protection?

Before 2010, many consumers were unaware that they were being “opted in” to overdraft protection programs. However, starting in 2010, federal regulations shifted and required that banks get consumers’ consent to opt into overdraft protection.

To make things simple, however, you can avoid overdraft protection by not signing up for it with your bank. If you’re currently enrolled in this service, you can cancel it. This way, if you don’t have enough in your account, your purchase or transaction will get declined. While you won’t be able to make the purchase, you also won’t be hit you with an overdraft fee.

Another option is to open a bank account at Chime, which has no overdraft fees.

Lastly, to avoid this problem altogether, keep a buffer of money in your checking account. This can help you avoid dipping into the negative. Check your account balances daily and monitor your bill due dates and auto-drafts. This way you’ll know when money is coming out of your account.

Final word

There are certainly pros and cons with overdraft protection.

It can be convenient, yet costly. It can save you embarrassment and time, but also take a bite out of your hard-earned money. So, weigh these pros and cons carefully.

Final tip: If you never want to worry about an overdraft fee again, consider switching to a no-fee bank account.

 

101 Ways to Save Money

Looking for savings tips but don’t know where to start?

Well, you’re in luck. We’ve rounded up 101 savings tips all in one place. Whether you’re looking for ways to save money on housing, food, travel or even pets, we’ve got you covered. Check out our guide on ways to save money, broken down into nine categories.

Easy Ways to Save Money Today

1. Go on a cash diet

Put a pause on your credit card use and go on a cash diet. Using only cash will ensure you spend only what you have. This can help you save money and avoid debt.

2. Pay off high interest debt first

If you have multiple loans, pay off your high interest debt first. This is commonly referred to as the “avalanche method”. You put extra money toward your high interest loans while paying the minimum toward your other loans. This can help you save money on interest.

3. Avoid fees

Fees can pop up everywhere. Avoid overdraft fees and monthly maintenance fees by switching to a no-fee bank. Pro tip: Chime has no fees at all.

4. Know your spending triggers

We all have spending triggers. Spending triggers can be certain emotions or places that encourage you to spend. For example, if you can’t go by a Starbucks without spending money there, that’s a trigger. If you indulge in retail therapy after a crappy day, that’s a trigger. Knowing your spending triggers can help you avoid spending when you don’t need to.

5. Refinance student loans

If you feel like you’re paying too much in student loan interest, you might want to consider student loan refinancing. This can be a smart move but it’s important to note that not everyone will qualify. You need to have good credit and consistent income. Additionally, you will give up important and lucrative federal protections like income-driven repayment and student loan forgiveness. Here’s a good place to learn about refinancing options for student loans.

6. Use autopay on your student loans

Many student loan servicers offer a .25% interest rate reduction if you sign up for autopay. Autopay automatically withdraws your student loan payment each month. So, if you time it right and have money in your account, this can save you money on interest.

7. Make bi-weekly student loan payments

Your student loan interest accrues daily. In order to combat this, you can make bi-weekly student loan payments. Instead of making one monthly payment, cut that in half and pay it every two weeks. You’ll save money on interest this way.

8. Pay your credit card balance in full

Interest rates on credit cards can be high. Paying off your credit card balance in full each month can help you avoid paying interest charges.

9. Start investing

One way to build wealth in the long-term and beat the cost of inflation is to start investing. You can invest in the stock market with exchange-traded funds, index funds, or other investment vehicles. The point is to put money aside and let the magic of compounding help it grow.

10. Switch banks

Does your bank charge fees for everything? Say G-O-O-D-B-Y-E. You can switch to a bank like Chime that has no fees. Your financial institution should have your back and not tack on fees everywhere you look.

11. Dispute errors on your credit report

Your credit report has information on it that affects your credit score. Your credit score, in turn,  can determine what interest rates you get on auto loans, credit cards and more. You can check your credit score on Credit Sesame or Credit Karma and check your credit report at AnnualCreditReport.com. If you see any errors, dispute them right away to make sure you aren’t getting locked into higher rates due to mistakes or inaccuracies.

12. Use credit card rewards

Do you have a credit card that has rewards? If you have a cash-back credit card, use your cash-back to fund your savings or help offset your budget. If you get miles, use them to save money on travel. Just be sure to read about any restrictions or limitations.

13. Take advantage of balance transfer cards

If you’re in credit card debt and have decent credit, taking advantage of a balance transfer credit card can help you save money. A balance transfer card offers zero percent APR for a period of time on balances that you transfer. So, if you can pay off your debt within the promotional period and don’t accrue more debt, you can save money on interest. Just be aware of potential balance transfer fees.

14. Adjust your tax withholding

If you get a big tax refund every year, you might want to consider adjusting your tax withholding. Adjusting your tax withholding could score you more money now and boost your paycheck. You can also put extra money into your savings.

15. Pay bills on time

Sounds simple, but pay your bills on time. Late fees can add up and catch you off-guard if you’re not careful. Keep track of due dates in your calendar and sign up for alerts.

16. Borrow only what you need

If you take out a student loan or other type of loan, try to only borrow what you need. Sometimes you get approved for much more but don’t let that tempt you. This can help you save money on your debt repayment.

17. Track expenses

A key to mastering your finances is tracking your expenses. You can track your spending using Mint or some other budgeting app. You can also do it manually with pen and paper for at least 30 days. Tracking your expenses can help you save money by making you more aware of where your money is going.

18. Sign up for bank and credit alerts

Signing up for bank and credit alerts can help you stay on top of your finances. If there are any fraudulent charges, you’ll get notified right away. If someone opens a new credit account in your name, it can trigger an alert. You can also sign up for alerts with your bank.

19. Automatically save 10 percent with every paycheck

Pay yourself first is a common adage in personal finance. If you have a Chime bank account, this is super easy. You can start now by automatically saving 10 percent every payday.

20. Create a budget

A budget can help save you money because you know where every dollar is going. Look at your after-tax income and create a budget for all your needs and wants. You can use apps like Mint or Tiller to help you get started.

21. Check your insurance deductible

If you want to save money on your insurance, you might consider boosting your deductible. High deductible insurance plans can save you money in the long run, especially if you don’t use your insurance often.

22. Write off charitable donations

Do you make any charitable donations? Save your receipts as you may be able to take a tax deduction. And always check with a tax advisor if you’re unsure about how you can benefit financially from your donations.

23. Save with a Traditional IRA

Want to save for retirement and save money on taxes? You may qualify for a tax deduction by saving for retirement with a Traditional IRA. Contributions to a Traditional IRA are tax deductible, which can lead to some tax savings.

How to Save Money on Shopping

24. Have a no-spend day

Commit to having at least one no-spend day each week. A no-spend day is when you spend absolutely no money. Make sure you have food and toiletries on hand and plan ahead. Having one, or several no-spend days can help you lower your spending and thus save you money.

25. Use paper coupons

You can still get some savings by looking at the paper coupons you get in the mail. Give it a quick look to see if you can score some savings. And, here’s another tip: If you shop at CVS, make sure you use the reams of coupons you get with your receipts.

26. Use Ebates or Honey

Shopping online? Use Ebates which offers cash back on certain stores when you buy online. You can also use Honey, which is an extension that automatically applies discount codes to your online purchases.

27. Buy generic

You don’t have to buy name-brand products all the time. You can buy generic prescriptions, generic dish soap, etc. This can save you money and in many cases, these products are exactly the same as the brand name counterparts.

28. Use free shipping codes

Look for free shipping codes or free shipping altogether. You can check out RetailMeNot for free shipping codes. You can also sign up for a free Amazon Prime trial and get free shipping (just make sure you cancel after the trial if you are no longer interested in Prime).

29. Buy in bulk

There are certain staples like toilet paper or rice that just make sense to buy in bulk. If you know that you always use a certain product or item, consider buying it in bulk at Costco or another wholesale club.

30. Shop off-season

The best time to shop for a specific holiday is after the specific holiday. I just saw 70% off Valentine’s Day items. I remember seeing the same thing for Christmas and Halloween. If you have room to stock up on items ahead of time, shopping off-season can score you huge savings.

31. Buy used

There’s no need to buy everything new. You can buy used clothing, used electronics and more. You can go to Goodwill or check out OfferUp or Craigslist for used deals.

32. Comparison shop

Always comparison shop! It’s easy to be lazy if you find something you like, but check two other places to make sure you’re getting the best deal.

33. Make gifts

Do you have a knack for making things? Make gifts instead of buying them. This can help you save money and give the recipient something special and unique.

34. Repair items

In today’s disposable culture, if something is broken, it’s easy to throw it away and buy a new one. If possible, however, repair your items. Sew your clothing, repair your lamp, etc. You can check out YouTube tutorials and try to fix it yourself before throwing down some extra cash for something new.

35. Read the fine print

Always read the fine print. You don’t want to have a “gotcha” moment and be caught off guard. For example, if a travel rewards credit card has a spending minimum before a certain amount of time, you’ll want to reach that before the time is up. If you cancel your gym membership, you might be hit with a cancelation fee. So, read the fine print to avoid extra costs.

36. Buy discounted gift cards

You don’t have to pay full price for gift cards. You can check out sites like CardPool and Raise to score gift cards at a lower price.

37. Create a spending delay

Are you dying to buy some new amazing thing that you’re convinced will change your life? Put a 48 hour hold on any big purchases. Wait to see if you’re still as pumped about it in two days. Delayed gratification can help you save money and spend less.

38. Ask for hand-me-down clothes for kids

Save money with hand-me-down clothes for your kids. Instead of buying new items every couple of months, ask friends and family if their kids have outgrown clothes or even toys. If they can pass them down to you, you’ll save big bucks.

39. Get money from recycling

Save money on your purchases and recycle them to get some cash back.

40. Don’t save your credit card info on websites

Saving your credit card info on websites can seem like a great convenience. But it can be a trap and a slippery slope to spending more. Entering in your credit card number manually every time you want to buy something can create a delay and make you think twice about spending.

41. Block tempting websites

There may be some tempting websites that entice you to spend more. You can block those websites when you’re online so you can’t access them. How? Try the Block Site website blocker for Chrome to get started.

42. Sign up for rewards programs

Do you shop at a specific place all the time? Or use a particular product or service? See if there is a loyalty or rewards program. You may be able to score free items or earn points by signing up.

43. Limit your laundry

We’re not encouraging you to wear dirty clothes, but really ask yourself how often you need to wash your clothes. Limiting laundry can save you money and may help keep your clothes in better shape, too.

44. Read instructions on special garments

Before you do laundry, read the care instructions on any special garments. You don’t want to ruin a cashmere sweater or wash something that should be dry clean only. Keeping your clothes in good shape will save you money as you won’t have to shop as frequently for new threads.

45. Shop at the dollar store

Nearly everywhere has some sort of dollar store. Check out the dollar store in your area and see if you can find deals on items you buy anyway.

46. Cut down on vices

We all have our vices. Whether you drink or smoke, eat too much sugar or drink too much soda, cut down on your vices. Vices can be expensive and bad for your health! You don’t have to give things up completely, but make an effort to cut down so you can curb your costs.

47. Do a clothing swap

Organize a clothing swap in your neighborhood. Each person brings clothes they no longer want and you can swap with other people. It’s a great way to reuse clothes and get something fresh, without spending money buying clothes.

48. Do a toy exchange

If you’re friends with other families with kids, arrange a toy exchange. There may be a toy that your child no longer uses but would be a good fit for a family nearby. Or perhaps your kids can gain new toys without you having to go out and buy them.

49. Get alerts for price-drops

Want to know when the right time to buy is? Use Price Tracker and Price Drop extension by Chrome to notify you when there’s been a price drop on a product you have your eye on.

50. Unsubscribe from sales emails

If you’re like most people, you’re getting sales emails every day. Unsubscribe from sales emails to get rid of temptation. Sometimes sales can encourage you to spend, even though you had no plans on buying anything.

How to Save Money on Your Car

51. Use GasBuddy

To save money on gas, use GasBuddy.com to see which gas stations have the most affordable prices near you.

52. Walk

If possible, save money on gas altogether by walking! Walking instead of driving is also good for your health.

53. Take public transportation

Consider taking public transportation if your destination is not in walking distance. Public transportation in your area may be more cost-effective than driving. It can help you save money on gas, parking and tolls.

54. Get your oil changed

To avoid any major mishaps with your car, it’s important to keep it in good shape. Get your oil changed on a regular basis so you can save money by avoiding much more costly mechanical issues.

55. Put air in your tires

Having the right amount of air in your tires can help your car be more gas efficient. Be sure to check the air pressure and fill up your tires as needed.

56. Clean out your car

Does your car feel like a closet and trash can in one? If so, it’s time to clean it out. First off, extra weight in your car can make your gas usage inefficient. On top of that, having a lot of items in your car can be a signal for thieves to roam through your stuff. I once left a nice-looking bag in my car and the next morning my window was bashed in and the bag was gone. I had to pay to get the window repaired.

57. Look for free parking

Parking fees can really add up. Before you head to your destination, do some research and look for free parking spots. You may be able to find free parking spots using the parking app SpotAngels.

58. Carpool

Reduce your transportation costs by carpooling. You can do this with co-workers, friends or even take a Lyft Line or Uber Pool when using a ride-sharing service.

How to Save Money on Your House or Apartment

59. Negotiate your rent

Many people think that your rent can’t be negotiated. Not true. If there’s a rental increase and you’ve been a good tenant, consider negotiating your rent. Tell your landlord why you’ve been a good tenant and explain your case. It’s expensive for apartment managers to find new tenants so don’t be afraid to attempt to negotiate your rent.

60. Limit heat/AC use

In the dead of winter and heat of summer, heat and AC costs can be brutal. So, consider only using heaters and AC when you’re home or setting the heat down a few degrees and scheduling the AC to only go on when the room temp reaches a certain degree.

61. Pay yearly instead of monthly

Some types of insurance can be more cost-effective if you pay annually instead of monthly. For example, I save money paying for my rental insurance in one annual payment.

62. Switch cell carriers

If you’re not in a contractor can get out of your current agreement, consider switching cell carriers. Sometimes cell carriers offer new customer specials so you can save money by switching.

63. Downsize

Do you have much more apartment or home than you need? Is your car way too big for your needs? Downsize! You are paying for that extra space and if you don’t need it, you can save money by downsizing.

64. Get rental insurance

Rental insurance can save you money if your apartment is damaged due to some types of disasters or burglary. It can also help you recover costs if one of your items is stolen, even if it’s not at your apartment. For example, if a laptop was stolen at a coffee shop, your renters insurance may cover the replacement cost.

65. Keep the lights off

Be mindful of your electricity use and only use the lights when you really need them. Keeping lights off more often may help reduce your electricity expenses.

66. Get a roommate

Housing can be a major cost. If you have extra space but don’t want to downsize, consider getting a roommate. A roommate can help offset some of your rent or mortgage payments.

How to Save Money on Food

67. Meal plan

Map out your meals a week in advance so you know what you’re cooking and can avoid the “What are we having for dinner tonight?” discussion and the temptations of take-out.

68. Avoid packaged foods

Packaged food may be convenient but it comes at a price. Save money by buying whole foods and not processed or packaged foods.

69. Use Ibotta

Use coupon app Ibotta to help you save money on groceries. You can get cash-back on purchases on specific food items. Just be sure to only buy things you actually need.

70. Use Groupon for restaurant deals

Want to go out to eat but not spend a fortune? Look on deal site Groupon first. You can find meal deals for a fraction of the cost.

71. Eat less meat

Meat can be more expensive than other types of foods, so to save money, limit your meat consumption. You don’t need to go full on vegan but cutting down even a little can reduce your grocery expenses.

72. Make coffee at home

Instead of a daily Starbucks run, make coffee at home. Doing so can save you $2-$5 per day, depending on the type of drink you usually get. You can even invest in coffee beans and creamer and it will still be more cost-effective than going out for coffee.

73. Host a potluck

Want to get together with friends but also save money? Host a potluck. Ask everyone to bring a different dish and enjoy many different foods, while saving money by avoiding eating out.

74. Grow herbs

You can grow some of your own herbs, spice up your cooking and save money. To start, you can buy inexpensive seeds or herb plants at Trader Joe’s or Home Depot.

75. Don’t shop hungry

The cardinal rule for grocery shopping is don’t shop hungry! You are likely to spend more because your eyes and stomach will be doing the shopping, not your brain.

76. Buy wine at Trader Joe’s

Trader Joe’s has a great affordable wine selection. You don’t have to go without good wine while trying to save money and going to TJ’s is a good savings hack. If you don’t have a Trader Joe’s in your area, try Costco. Yes, you’ll buy in bulk but the amount you’ll spend per bottle works out to be lower than a singular bottle of the same brand at a liquor store.

77. Ditch sugary drinks

Swap out your soda or frappuccino for some ice water. Ditching sugary drinks can cut down on unnecessary expenses, plus drinking more water keeps you hydrated.

78. Always have snacks

Keep a granola bar in your purse or car at all times. Having snacks on hand can help you avoid spending extra money when you’re super hungry.

Save Money on Your Pets

79. Do a pet sitting swap

Hiring pet sitters can add up fast. See if there’s a neighbor that you can do a pet sitting swap with. They will watch your pets when you’re gone and you’ll do the same when they’re gone.

80. Buy pet items in bulk

If you know you need items like cat litter or cat food, why not buy in bulk? You can score some additional savings by buying your must-have items in bulk at wholesale clubs like Costco.

81. Get regular check ups for your pets

Vet visits don’t come cheap but prevention is a great way to save money and lower costs. Getting regular check ups for your pets can keep them healthy and hopefully help you avoid major issues and expenses down the line.

Save Money on Beauty and Health

82. Get a haircut at a beauty school

You can save money on a haircut by going to a beauty school. It may take a bit longer but the savings can be significant.

83. Trim your own hair

Need just a quick trim? If you have a steady hand and good eye, consider doing it yourself. I’ve been trimming my own hair for the past two years. I just cut off the ends and it’s worked out pretty well for me.

84. Get your exercise in

Exercising can help you stay healthy and avoid additional medical costs down the line. Bonus: when you’re exercising, there’s less time to spend money.

85. Manage your stress

Stress can lead to a lot of additional expenses related to medical costs, stress-spending, stress-eating and more. So, manage your stress and this way you can keep your expenses in check.

Save Money on Entertainment

86. Cancel unused subscriptions

If there are subscriptions you don’t use anymore or ones that you don’t use often, cancel them. No need to spend money each month unnecessarily.

87. Use Goldstar for entertainment deals

You can score entertainment for a fraction of the cost using a site like Goldstar. You can buy tickets to concerts, sports games, theater shows and more at a discount. You can also find similar deals on Groupon.

88. Go to museums on free days

Many museums have free days certain times of year. Some have “by donation” days as well. So, get your museum fix by going on the free or pay-what-you-can days.

89. Borrow books from the library

Yes, buying new books on Amazon Prime can be addicting. But you can save money by borrowing books from the library for free!

90. Go to free cultural events

Many cities offer cultural activities that are free and open to the public. These can range from parades to concerts, speaker series to celebrations. Check your local community calendar to see what might be coming up.

91. Streamline entertainment

Do you have cable, Netflix, Hulu, and Prime Video? It may be time to cut back and stick with one. Having multiple streaming services and packages can add up, so cut down and streamline your entertainment.

92. Take free classes online

You don’t have to take on student loan debt or pay an arm or a leg to take some classes. You can take free classes online. You can also watch how-tos on YouTube or practice your language skills on DuoLingo.

93. Volunteer as an usher

One way to cut entertainment costs is to become an usher at a theater. Volunteer and see the show for free!

94. Volunteer to work at events

If there’s a retreat, conference, talk or festival coming to your city, inquire about volunteering. This is a great way to meet new people and save money on admission.

Save Money on Travel

95. Buy flights on Tuesday

Ready to book a flight for your next trip? Book on a Tuesday, the most affordable day to purchase a flight from the United States.

96. Stay in affordable accommodations

When traveling, accommodations can add up. Consider couchsurfing, staying in a hostel, a cheap AirBnB, or staying with a friend. Hotels can cost hundreds per night so opting for one of these options can score you some savings.

97. Avoid foreign transaction fees

Traveling abroad? You could get hit with foreign transaction fees when you spend money. Get a credit card that offers no foreign transaction fees so you can save your hard-earned dough.

98. Use Skype and WhatsApp

Traveling internationally can result in hefty call charges and international roaming. When communicating from a palazzo in Florence or the beaches of Bali, use Skype and WhatsApp to communicate for free.

99. Go camping

Looking for some peace and quiet? Go camping! It’s an affordable way to travel and can get you back to being one with nature.

100. Book holiday flights in advance

Many people make the mistake of booking holiday travel at the last-minute. That’s a big no-no if you’re trying to save money! Book far in advance, preferably no later than September for holiday travel in November and December.

101. Fly on a holiday

You can score additional savings by actually flying on a holiday. If you don’t mind this, you can save money by flying on Thanksgiving or Christmas. I’ve used this tactic to save over $100 on my flight.

Start saving now

Using these 101 savings tips, you can start to reduce your expenses in nearly all aspects of your life.

Focusing on your top expenses like housing, food and transportation can give you the biggest wins. The biggest perk: These tips can pad your savings account so you can save for your future and have money set aside for a rainy day.

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