Tag: Saving

 

7 Crazy Things College Students Have Done to Save Money

Being a broke college student is a rite of passage. But that doesn’t mean having no money is any fun. 

When you don’t have a lot of cash to spend, you have to get creative with your funds. And, finding outside-the-box ways to save money can help you stretch every dollar.

If you’re looking for inspiration to help pad your savings account, check out these 7 extreme money-saving stories from some formerly broke students.

1. Recycle for profit

When he was in college LaRon Hayes, marketing manager for Premier International Transportation, discovered that one man’s trash is another’s treasure – literally. 

It started when he came across a Craigslist ad from someone giving away free books. He snagged the lot, then resold them on eBay to make his first $100. From there, he started regularly picking up free items he could resell for a few extra bucks. He was able to use the money he set aside from upcycling to pay down his student loan debt after graduation. 

If you’re interested in reselling, take advantage of all the different ways you can do this to make money. For example, you can sell free or found items on:

  • eBay
  • Amazon
  • Craigslist
  • Local Facebook bargain groups

In addition, don’t count out yard sales, flea markets, thrift stores, consignment shops and used bookstores. These can be great resources for finding and reselling your wares. 

2. Take Extra Credits to Graduate Early

Cutting down what you pay for tuition is one way to save money as a student. Marc Andre, founder of VitalDollar.com, was able to trim a big chunk off his college budget by fast-tracking his way through school. 

“The base tuition was the same for 12-18 credits per semester, so I took 18 credits most semesters because it didn’t cost anything extra,” Andre says. 

He graduated a semester early and saved around $8,000 on tuition and fees to boot. 

If you’re still in school, consider whether graduating ahead of schedule is doable. Check with your registrar and financial office to find out how many hours you can take each semester and run the numbers to see if you’d save anything by getting your diploma a semester or two early.

3. Stock up on freebies

Steffa Mantilla, owner of Plantsonify, saved money in college by building a personal stockpile of free samples.

“My dentist’s office would often let me take multiple toothpastes, toothbrushes and floss,” Mantilla says. 

“Some companies will even send you samples if you email them. Combining this with using hotel shampoos, soaps and conditioners, I rarely had to purchase any toiletry items during college.” 

Assuming you spend $50 a month on toiletries in college, that could add up to $600 a year you could stash in savings. Some other ways to grab money-saving freebies include:

  • Hitting the makeup counter at your favorite department store for free samples.
  • Signing up for birthday freebies at your favorite restaurants and retailers. 
  • Take surveys or watch videos online to earn free gift cards.
  • Join a freebie website like FreeFlys.

Just remember to read the fine print on freebie websites to make sure they’re legit. 

4. Live Harry Potter-style

Communal living can be a great way to save money in college and Megan Robinson, personal finance expert at Dollarsprout, took it to the extreme.

“I lived in a one-bedroom house with two other girls, three dogs and three cats,” Robinson says.

Splitting the rent three ways allowed Robinson and her roommates to each save about $200 per month.

“I’m 90% sure my bedroom used to be a pantry or a laundry room, but the rent was cheaper than anything else in the area.” 

You don’t necessarily have to live in a pantry or broom cupboard, but if rent payments are straining your budget, consider whether taking on a roommate or two might help. Or, think about downsizing altogether and renting a single room in someone else’s home. You can get your own space at a fraction of what it might cost to rent an apartment. 

5. Skip buying textbooks

Buying textbooks can be a financial drain. Becky Beach, founder of MomBeach.com, came up with a creative solution. 

“I read all my textbooks in the campus bookstore so I didn’t have to buy them,” Beach says. 

Now, if you don’t have time to hang in your college bookstore all day, there are a few other ways you can save money on textbooks. For example, you could try:

  • Checking out a copy from the campus library.
  • Buying used textbooks online. 
  • Using digital versions instead of print versions to save money.
  • Renting textbooks on Amazon or another textbook rental site instead of buying. 
  • Sharing textbooks with a classmate.

And once you’re done with your textbooks for the semester, get some of your money back by reselling them. Get a quote on a price from the campus bookstore, then compare that to what you might be able to make by selling your books online or through a student reselling group on Facebook. 

6. Sell real estate in your spare time

Starting a side hustle in college can help bring in some extra cash. Morgan Riddle, interactive media manager at LoveYourMelon.com, took things just a bit further. 

“I was looking for a way to make money and ended up getting my New York real estate license as a junior in college,” Riddle says. 

“I sold and rented apartments on days I didn’t have class or between my classes junior and senior year.” 

When it was all said and done, Riddle ended up making over $15,000 to add to her savings account

Pro tip: If you’re considering starting a side hustle or business, think about whether you’ll need any money up front to get started. In Riddle’s case, it cost $350 to obtain a real estate license but that investment proved well worth it in the end. 

7. Lock up your savings

If you struggle to hold onto your savings, it may be best to make it untouchable. Chane Steiner, CEO of Crediful, says he knew a grad student who had a system for this.

She opened a second account at a bank that had no branches nearby and cut up her ATM card for that account. Then when she got paid, she’d write a check to the second account and deposit it using the bank’s mobile app. 

“Her savings were safe there because getting the money out was just too much of a hassle,” Steiner says. 

You could try something similar by setting up a separate account for savings if you don’t have one yet. 

Do you have a crazy savings story?

Saving money can sometimes be a struggle, especially in college. 

Do you have a wild savings story in your past? Or, are you doing something extreme right now to save and earn more money?

Whatever it is you’re doing, keep making saving money a priority. Setting aside money consistently is the best way to end up wealthy long after you leave college behind!

 

How to Fight Summer FOMO and Fatten Up Your Savings Account

Summertime brings warm weather — and a major temptation to spend money. From hitting the concert circuit to shopping for new clothes to taking a dream group vacation, the opportunities to spend money are endless.

Blowing through your cash may be fun but it can also put a major dent in your bank account.

The good news is: You don’t have to shut down your social calendar when the lazy days of summer set in. By following these five tips, you can keep the summer FOMO at bay – and potentially boost your savings by fall.

1. Unplug from social media

Imposing a ban on checking your social feeds can be one of your best defenses against FOMO spending.

“It’s very easy to feel like you’re missing out when scrolling through countless summer posts showing your friends enjoying themselves,” says Matt Edstrom, CMO of GoodLife Home Loans.

He says the pressure to spend only gets worse if you’re receiving invites to go out via social. The solution? Take a time out from Insta, Facebook and all the rest. If you can’t do that, be ready to make a frugal counter-offer if a friend suggests some pricey fun.

“If someone is posting about wanting to go to a particularly swanky place for happy hour, you could propose an alternate location that’s still trendy but also affordable,” says Edstrom.

Or even better, suggest a BYOB get-together at home. You could even make it a regular thing, with a different member of your circle playing host each week.

And, let your friends know from the start that you’re trying to curb your spending for summer and step up your savings. That way, if you have to say no to an outing, they’ll understand why.

2. Set up a “just for summer” savings fund

The next best thing you can do to avoid summer FOMO is to be prepared for it. That means having a special savings account just for summer fun, says Rebecca Gramuglia, personal finance expert at cash back site TopCashback.com.

“Summertime means longer days and more time for activities and sometimes those summer adventures come with a price-tag, which is why starting a summer fund is so important,” Gramuglia says.

The simplest way to create a summer fund? Set up a direct deposit from your paycheck into a separate savings account each payday. Pick a target amount you want to budget for your summer spending each month, then break that down by the number of paychecks you receive monthly. Commit to having that amount sent straight to savings, then transfer it to your checking to use as activities with friends come up.

Gramuglia says that ideally, if you start building this fund a few months before summer kicks off, you’ll have a cushion ready to go. But if you’re getting a late start, take advantage of small windfalls to build it up.

“Any time you have leftover change, bonuses or (get) cash back, add it into your summer fund,” she says.

3. Don’t spend without looking for deals and discounts first

With so many coupon apps, deal sites and money-saving apps to choose from, there’s no reason to pay full price for summer spending, whether it involves travel, dining, shopping or entertainment.

If you’re planning a trip with friends, for example, try doing it backwards, says Meghan Fox, a money-saving expert at gift card marketplace Raise.

“Find the best deals on sites like Kayak, Travelocity and Expedia, then pick a destination where you’ll get more bang for your buck.”

Sites like Skyscanner and Hopper are also good for comparing prices on airfare. Purchasing discounted gift cards is another option for saving on flights, hotels and other purchases. At Raise, for instance, you can find discounted gift cards from Hotels.com, Airbnb and Southwest Airlines.

For summer spending other than travel, visit deal and coupon sites like Groupon, LivingSocial or RetailMeNot to see what’s on tap for promo codes and coupons. You can find discounts on spa packages, restaurants, and movie tickets.

4. Plan some solo activities

If you’re worried that hanging out with friends over the summer will push your budget to the limit, schedule in some alone time. Then, fill that time with things that don’t cost a dime.

That’s something Julia Askin, a marketing coordinator with mobile app development firm Fueled does. After moving to New York City six months ago, she’s feeling the pressure on her budget to “do it all”.

“To combat FOMO and protect my budget, I commit much less to social engagements and focus instead on growing my areas of interest and passion,” Askin says.

In the summer months, this includes spending time outdoors and taking free online classes to learn new skills, both of which leave her bank account intact.

If you’re looking for free or low-cost things to do, check your local recreation center. Or, head to your library or a museum for an afternoon. Volunteer your time for a good cause. Challenge yourself to come up with as many free ideas as you can. To make it really interesting, consider doing a no-spend week over the summer to see how much you can save.

5. Create money goals to keep you motivated

It’s tough not spending money, especially if you feel a little left out of the fun. Giving yourself some clear goals can help you maintain a positive mindset.

For example, your goals might include:

  • Paying an extra $2,000 off your student loans by the end of August
  • Saving $1,500 in a baby emergency fund in a month
  • Starting your savings cushion for a down payment on a first home
  • Finally getting around to opening up an IRA to save for retirement

Your goals can be big or small, but make sure they’re S.M.A.R.T. – specific, measurable, achievable, realistic and time-bound. Any time your friends are tempting you to spend, remind yourself of your goals. This could be all you need to dodge the FOMO bullet.

Summer FOMO doesn’t have to wreck your budget

The fear of missing out on fun with friends can only sabotage your spending if you let it. Planning ahead and setting some ground rules for spending over the summer can make it easier to avoid giving into temptation.

As a bonus, you may end up with a padded savings account!

 

How to Eat Healthy on a Budget

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There’s a myth out there: Only the wealthy can eat healthy.

This is perpetuated by false information that unhealthy food is the only affordable option available to consumers on a budget. But did you know that is possible to eat healthy and save money at the same time. All it takes is some budget-friendly meal planning and knowing where to buy cheap yet healthy food.

Here are eight ways to start eating healthy on a budget.

1. Plan Your Meals

Weekly meal planning on a budget entails creating a menu for the week, buying just the necessary ingredients, and cooking at home. This can pay off – for your health and your wallet.

By buying only what you need, you’ll avoid overspending.

“The easiest way to save money on healthy foods is not to spend on items you don’t need or that you already have in your house. Identify exactly what you plan to cook,” says Riley Adams, a CPA and financial blogger at Young and the Invested.

“It’s when you go to the store without a plan that you end up buying extra things that you either didn’t need or won’t use for a while,” says Marissa Szabo, a certified health coach.

For the most effective meal planning, select one day a week to schedule out your meals for the next seven days. Saturday or Sunday tends to work well as you have the weekend to create your list, go grocery shopping and prep for the work week ahead.

“Be strategic with your planning; choose snacks and meals for the week that use a few ingredients several different ways. This will help keep costs down,” says Szabo.

You should also look for sales and use coupons to help structure your weekly meal plan. Depending on what’s on sale, this could influence what you cook for the week.

2. Stick to Your Grocery List

Once you’ve created your first meal plan for the week, the next step is to make a shopping list that includes healthy, whole foods.

Sticking to your grocery list once you enter the store is also important. If you struggle with this, try downloading a grocery list app to resist the temptation to spend money on needless food items and buy only what’s on your list. Some grocery apps to try include Grocery Pal, AnyList, Mealime, Out of Milk, Grocery iQ or Recipe Keeper.

Dr. John Gilmer, vice president of research and development at the iron supplement company Active Iron, also recommends that you don’t go to the store on an empty stomach.

“Most importantly, don’t go to the store hungry. It’s very easy to get side-tracked at the store buying what looks good,” he says.

3. Use a Crock-Pot to Make Healthy Dinner Recipes with Leftovers

A crock-pot is a great way to make soups or casserole-type dishes when you’re beginning to reach the end of your groceries for the week. Wasting leftovers or failing to use products before they expire can also be a big money waster.

One tip is to put all your leftover ingredients into the crock-pot in the morning and start it up. Dinner will then be ready by the time you get home from work — another way to both save money and ease your dinner-time routine.

When making soup, “simply save the scraps from the veggies you prepare, like onion skins, carrot and celery tops, garlic peels, and broccoli stems,” says Szabo.

“Toss it all in a crock-pot and cover it with water. Cook on low for six to eight hours, and you have a ton of broth,” she says.

4. Incorporate Meatless Monday

Meat is expensive and adds to your grocery bill.

For example, the average cost of lean beef was $5.20 as of February 2019, according to the Bureau of Labor Statistics. Pork is priced around $3.30 per pound, and chicken, while a bit cheaper at about $1.50 per pound, can cost up to three dollars per pound for boneless breast cuts.

The less meat you eat, the more money you’ll save on groceries. If you live in a vegetarian-friendly household, by all means, make as many meatless dishes as possible. If you prefer an omnivorous diet, prepare at least one meatless dinner per week.

“Adding a meatless Monday (or whatever day you prefer) to your week will not only help you add more vegetables to your diet, but it can also help you cut your grocery budget,” says weight loss therapist Candice Seti.

“Protein rich options like beans and mushrooms are less expensive than meat and are packed with nutrients,” she says.

Some meatless meals to try:

  • Omelets with either eggs, egg whites, or egg substitutes
  • Stir fry with a meat substitute, like tofu, beans, or bean sprouts
  • Vegetarian paella
  • Black bean burgers
  • Grilled portobello mushroom burgers

5. Stop Eating Out

One of the easiest — if not the easiest — ways to save money on food is to stop eating out. It doesn’t matter if you frequent a fast food dollar menu, or a five-star restaurant every night. Eating out can sap your budget of valuable dollars that you could be saving or spending on more important things, like healthy food at the grocery store.

Home-cooked food is almost always healthier than restaurant food. For starters, you know what’s in the meal. You can also control the amount of salt, fat and carbs you cook with, not to mention your portion sizes.

6. Buy In-Season or Frozen Fruits and Veggies

Organic isn’t always better. Not only does buying organic produce tend to be more expensive, but in-season, local fruits and vegetables can be cost-effective and equally nutrient rich.

“One way to keep on budget is to buy produce in season,” says nutritionist Jeanette Kimszal.

“Foods that are in season tend to be lower in price than those that are out of season. For example, berries are available all year, but in the winter they are often shipped from Mexico and South America. The shipping costs may be passed on to the consumer and tend to be higher in price than other produce in season,” says Kimszal.

Another option? Buy frozen vegetables. They’re cheaper, plus you can portion out the veggies you defrost and cook, and stick the rest in the freezer without fear of them going bad.

“If you are making a smoothie or a stir-fry, frozen fruits and vegetables are a great option,” says Elizabeth Girouard, a certified holistic health coach.

“Most produce is picked at its peak and flash frozen, which retains the nutrients. Since they are picked and packed in season, the cost is more reasonable, particularly for organics,” says Girouard.

7. Shop the Grocery Store’s Perimeter

Ever notice that the fresh foods and healthier choices in the supermarket surround the perimeter — along each wall — of the store?

Always shop these outer areas of your store first. This is where you’ll find the most healthy foods. With that, try to ignore the middle aisles, where packaged and processed foods are found, like canned vegetables with high sodium content, fattening desserts, and carb-loaded snacks and breads.

“Use this plan to navigate the aisles of the grocery shopping, and stick to it,” says Adams of Young and the Invested.

8. Buy Healthy Food in Bulk

Buying certain items in bulk can be cheaper, especially non-perishables and canned items like tuna, beans, or pasta sauce. Boxed items like rice and quinoa can also be purchased in bulk for big savings.

“Nuts, seeds, dried fruit, chia seeds, and much more can have significantly lower prices than packaged versions of those same items,” says Seti, who advocates buying in bulk at Costco, Sam’s Club and other warehouse stores.

“Many warehouse stores are catching on to consumers’ desires for more real, whole foods and are starting to stock options for health-minded shoppers,” she says.

9. Shop at Cheaper Grocery Stores

Costco and Sam’s Club are just two places to shop for cheap, healthy food. But don’t overlook budget-friendly stores like Trader Joe’s, Food4Less, or grocery departments at discount retailers like Walmart and Target.

Personal finance blogger Marc Andre of Vital Dollar likes shopping at Aldi, the German-based discount chain with locations in several states.

“You can save a lot of money by choosing generic brands and/or shopping at discount grocery stores,” he says.

“My wife and I do most of our grocery shopping at Aldi, and they have their own private label brands for generic organic and gluten-free foods. The prices are significantly lower than what you would pay for comparable products from name brands at other grocery stores,” says Andre.

Meghann Featherstun, a registered dietitian, says that shopping the sales at stores like Aldi can make all the difference. From there, you can effectively plan low-cost and healthy meals.

“Sheet pan meals with a protein, plus a healthy starch is a fast, inexpensive, balanced meal,” says Featherstun.

The Bottom Line

By implementing these nine steps, you’ll be on your way to eating healthier and saving money.

Here’s another pro tip: Set up automatic savings through Chime to save even more money as you shop. By simply using your Chime debit card to buy food, your purchases are rounded up to the nearest dollar, and that amount is deposited into your Savings Account. Cha-ching!

 

How to Handle No Spend Sundays Like a Boss

Fun fact: Sunday is my favorite day of the week. Yes, I know it’s dangerously close to Monday. But, I still look forward to it because it’s a chance to treat myself after working for five days and then side hustling on Saturdays.

Yet, while I love Sundays, it’s easy to get caught up in my favorite day off and blow right through my budget. Let’s look at a hypothetical scenario of how quickly spending can add up on a typical Sunday:

Coffee – $5

Brunch – $50

Groceries – $75
Gas for the week – $30

Total: $160

When multiplied by four, this adds up to $640 a month or $7,680 a year. Yikes.

If this type of spending looks familiar to you, then a No Spend Sunday may be just what you need in order to boost your savings goals. If you’ve never tried one of these challenges before, don’t worry – we’ve got you covered. Keep reading to learn how to navigate a No Spend Sunday in 5 easy steps.

Step 1: Separate Wants From Needs

First, it’s important to understand the definition of a No Spend Day.

Think of it like going on a diet but for your finances. It means that you eliminate (or scale back on) anything that’s non-essential to your budget. For me, based on the above hypothetical list, I would cut out coffee, brunch and challenge myself to lower the amount I spend on groceries. Gas would remain on the list as a “need.”

Now it’s your turn: Take a step back and write down all the activities you normally do on a Sunday that cost money. Place a checkmark next to the ones that are essential and an “x” next to the spending you can do without.

Step 2: Get Creative

Kristy Runzer, CFP® and Founder of OnRoute Financial, says that the key to surviving a money challenge like a No Spend Sunday is to get creative and find things to do that will bring you happiness without the price-tag.

“So, for example, let’s say that you typically enjoy going out to eat with girlfriends to fill the need of wanting to spend time with those closest to you and simply have fun. On a (No Spend Sunday), instead of spending money at a restaurant, you could meet up with your girlfriends at the park or hang out at someone’s house. The end result is the same – you fulfill the underlying need to connect, without feeling guilty about your spending,” says Runzer.

Sami Womack, Founder of A Sunny Side Up Life, also agrees that “having fun doesn’t have to cost money.”

Some of Womack’s favorite free activities include:

  • An at-home spa day
  • Hiking
  • Reading a book
  • A movie night at home
  • Subscribing to a new podcast
  • Spring cleaning your closet
  • Doing a pantry/freezer cleanout

Step 3: Get an Accountability Partner

It’s so much easier to stay the course with just about anything when you have extra support.

If you can’t find a friend or family member who wants to hop aboard the no spend train with you, then look no further than social media. Many money coaches and personal finance bloggers host money challenges throughout the year that you can participate in. All you have to do is search #NoSpendDay or #NoSpendWeek, etc.

Step 4: Give Your Savings a Purpose

When saving money, it’s important that you save for a specific purpose. Yet, oftentimes folks miss this when they survive a savings challenge.

So, let’s say you decide not to eat out or go to the mall during your No Spend Sunday. Estimate your savings by looking at how much you would normally spend on each of these activities.

Let’s say the total is $100. At the end of the No Spend Sunday, transfer $100 into a separate savings account until you figure out what to do with it (pay down debt, put it in your summer vacay fund, etc.) This way the money isn’t just floating around in your checking accounting, tempting you to spend it on things you probably don’t need come Monday.

Step 5: Keep Building Those Healthy Money Habits

The benefit of a spending challenge is that it teaches you money mindfulness.

“Every day, but especially on weekends, it’s easy to spend money without thinking twice. You don’t realize (the damage) until the credit card bill comes and you’re left with a spending hangover,” says Runzer.

“Putting even a little bit of thought into what you’re spending or wanting to spend on and why really goes a long way. This is truly empowering because it puts the choice and the control back in your hands. You get to make money decisions from a place of knowing where things are going and what they’re doing for you,” she says.

From here, you can make incremental changes that positively affect your finances over time, rather than trying to make a drastic overnight change. This is exactly what Lauren Tucker, Founder of An Organized Life has done. She started out with a No Spend Friday, then a No Spend Week, until she worked her way up to a No Spend Month.

“It’s definitely been a process,” says Tucker.

“But starting small is the best way to introduce a new habit,” she says.

“Everyone’s definition of a no spend (challenge) can vary, but for me, it means that I refrain from purchasing anything that’s not in the budget or that I have already identified to spend in my miscellaneous spending category.”

Tucker plans out her month using a Google Keep Note where she outlines what she intends to spend with any discretionary income. She also tracks her success each day and shares her monthly results on her social media feed.

Bonus Tip: Pay Yourself First

After my husband and I completed our first no spend challenge, we realized that one of the reasons we would overspend is that we had too much money left-over in our checking account after paying our bills. That money was just hanging out, waiting to be spent.

That’s around the time I learned about the importance of paying yourself first. This means that we save first before doing anything else. By doing this, it reduces the amount of “extra money” we have left in our checking account and forces us to be more conscious of how we spend – especially on the weekends.

We still incorporate no spend challenges every now and again, especially when we have a specific money goal, like saving for a vacation.

We challenge you to try out your own No Spend Sunday for yourself and see how much money you can save!

 

How to Stop Taking Money out of Your Savings

Dipping into your savings account constantly can be a sign that you’re letting FOMO control your spending habits.

We’ve all been there. One week you’re patting yourself on the back for growing your savings. And the next week you’re trying to transfer money back to your checking before you get socked with an overdraft fee.

No need to beat yourself up over the past. But, if you want to change your money habits for the better, here are some tips to grow your savings.

Have a Separate Emergency Fund

Create a separate account devoted only to real emergencies. By real emergencies, I mean paying for a new engine for your car so you can get to work.

If you don’t have an emergency fund yet, make this your main money goal and build it up to at least $1,000. The longer you go without an emergency fund, the longer you’ll keep dipping into your primary savings account to pay for these expenses. Worse yet, you can go into credit card debt.

Identify the Trigger

Why do you keep dipping into your savings? Are you overspending when it comes to eating out? Or, maybe you forgot to save up for larger expenses like your car registration.

Identify what is causing you to spend and this way you can learn how to fix it.

For flexible spending categories, it can be easier to stick to a tight number if you limit yourself to cash. For example, say you are going out to lunch and Target with a friend. If you know you may overspend, take the exact amount of cash budgeted and leave your bank card at home. You’ll think twice before ordering an extra drink or buying that cute shirt.

Out of Sight, Out of Mind

When I wanted to stop taking cash out of my savings account, I opened up a new account at a different bank and set up automatic bi-monthly deposits. Since it was not my main bank, I grew my savings account as I was less tempted to withdraw money from another bank.

Get a New Mindset

When you buy a seven dollar burrito, you don’t ask for your money back a week later because your account is a tad short. When you made that purchase, you counted that money as gone forever.

You need to adopt a similar mindset with your savings.

So, deposit money into your savings account and consider it gone forever. This means that when you are $50 short before payday, you may have to curb your spending.

Another powerful mindset tool is to give your savings account a purpose. There is no fun in saving for a vague someday. Take time to think about why you want to save money and how much money you need to save.

For example, if you want to save $20,000 for a down payment for a house, this gives you something to really save up for. Every time you deposit $200, you’ve hit one percent of your goal. You’ll be less tempted to take money away from this goal, too. Just think: transferring $50 from this savings account to your checking account means you’re slipping further away from your home ownership dream.

Set Up Rewards or Punishments

Are you motivated by the thought of getting a reward? Do you want to avoid punishment? Knowing which one of these is a greater motivator can help you break the habit of dipping into your savings.

If rewards motivate you, for example, set up two to three savings goals and rewards. For instance, if you save $4,000, perhaps your reward is to buy a new gaming system guilt-free.

If fear of punishment motivates you, recruit your friends or family members to help. What embarrassing thing will you have to do if you don’t keep your savings account balance in check? Perhaps the thought of wearing a loud, outdated suit from your dad’s closet to work will be just the thing to keep you saving faithfully.

Let Your Bank Account Do the Work for You

Use the power of automation to make saving painless. The point is: When you don’t have to think about saving money, it’s easier to save.

So, consider automatically depositing money from your paycheck into your savings account – on the day it hits your account. Chime members can opt for a percentage of each paycheck to go into their savings.

Another way Chime helps streamline your savings is with the Chime Visa® debit card. Just use your debit card to spend as you usually do, and Chime will round up the transaction to the nearest dollar. The difference is then transferred to your Savings Account.

Max Out Your Transfer Allowance

The Federal Reserve Board sets a limit of six transactions per month on certain transfers and withdrawals from your savings account. The reason? To encourage you to use your savings to actually save money – and not spend it.

Some Chime members use this rule to their advantage to cut out the temptation to dip into their savings. How? They initiate six one-cent transfers at the beginning of the month from their Savings Account to their Spending Account. After the six transfers, they can only transfer money to their savings, but they cannot withdraw it.

Every savings account has this same rule, so you can use this hack at any bank. However, it’s important for you to understand your bank’s rules to ensure you don’t get dinged with unnecessary fees if you try to make a seventh withdrawal for the month. Along these lines, Chime will never charge you fees, so you may want to consider switching to a bank that will actually help you get ahead financially.

You Can Do It

Breaking bad money habits takes time and effort.

But, as you can see, there are many ways you can develop healthy money habits to save more money. Why not start right now by setting yourself up to get paid early?

 

How to Save Money for a Car

According to the vehicle appraisal website Kelley Blue Book, the average cost of a new car in 2018 was more than $35,000. There’s no denying it: Cars are expensive.

Furthermore, it costs an average of $8,469 per year to keep and maintain a car. This includes fuel, car payments, maintenance, parking, and other vehicle-related expenses. Ouch.

And while there are many more affordable alternatives to vehicles, like public transportation, carpooling, and even walking, this simply isn’t realistic for everyone. If you do need a car, there are ways you can save money to purchase one, and then afford the ongoing expenses.

Here are six strategies to help you save enough money to buy a car.

Consider your budget

You probably already know that the newest and nicest cars don’t come cheap.

But this doesn’t mean you have to spend more than you can afford to get a car with a leather interior, moonroof, and other fancy bells and whistles. It’s more important that you create a budget and stick to it.

Start by considering both your income and what you can realistically afford. For instance, if you can only afford a $300 per month car payment, then don’t buy a vehicle that will cost you $600 a month.

To get an idea of how much car you can afford, check out this free calculator from Money Under 30. And, CreditDonkey suggests spending no more than 20 percent of your income on car-related expenses. Of course, the less you spend, the more money you will have for other things, including savings.

Make a list of needs versus wants

There’s no shame in wanting every luxury feature a new car has to offer. However, those additional gizmos and gadgets come at a steep cost. So, focus on keeping you priorities in check.

For instance, maybe it’s most important to have a car with a high safety rating. Whereas a red car with a hatchback seems like a great idea, that’s simply not as important as getting a safe car.

Remember, with some wise budgeting you can purchase what you really need, but you won’t ever be able to afford all of your wants. It’s all about prioritization!

Don’t forget about additional expenses

Unfortunately, the initial car purchase is only part of the cost. Gas, parking fees, insurance, and maintenance is part of the package, too. And these expenses are costly!

To save money over the long-term, gas mileage is particularly important. Fuel prices are largely uncontrollable, so by choosing a car that gets low gas mileage, you can save money over time. Check out this list from Carmax of 10 cars with great gas mileage.

Save for a down payment

When you go to purchase a new or used vehicle from a dealership, it will require you to make a down payment. A down payment is money you pay upfront for your purchase. After that, you’ll typically take out a loan to pay for the rest of the cost – and make monthly payments to pay off that loan. Autotrader suggests aiming to put at least 20% down on the total cost of a car.

While it may be tempting to purchase a car before you have an adequate down payment saved up, think about it this way: The more you can put down, the less you’ll pay over time in car payments in order to pay off your car loan. Plus, car loans accrue interest, and the more money you borrow, the more you will theoretically owe in interest over the lifetime of your loan.

Establish a realistic timeline

In order to save up for a car, it’s important to create a realistic savings timeline.

One easy way to estimate a timeline is to take the total cost of the vehicle you are considering. Multiply the total cost by 20%. This will show you what 20% of your total vehicle cost will be, and this will also give you an amount to save for your down payment. So, say your dream vehicle is $25,000. Then you should plan to save at least 20%, or $5,000, for a down payment.

From here, it’s time to look at your budget. If you can set aside $500 a month, you can have enough for a solid down payment in 10 months’ time. However, if you can only save $100 a month, you may find you need to look at more affordable vehicles. Of course, remember the more you save up front, the less you will owe over time.

Make your savings automatic

Now that you have your savings plan in place, you need to figure out where to put that money.

The best place to park your hard-earned cash for a short-term goal is in a specific savings account. And, Chime gives you a savings edge through its automatic savings program.

With Chime, there are two ways you can automatically save money. First off, you can download the easy-to-use Chime app and set your savings goal. Chime members can automatically transfer 10 percent of every paycheck directly into their Savings Account, allowing you to save for that new car even faster.

Secondly, Chime helps you save money every time you make a purchase with your Chime Visa® Debit Card. How? Chime’s Save When You Spend program automatically rounds up your transactions to the nearest dollar. Then, it transfers that round up amount to your Savings Account. The more you use your Chime card, the more funds you can add to your savings.

Are you ready to save up to buy a car?

 

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. It’s easy to get a quick tip on retirement plans like Roth IRAs, grab some general free financial advice, and even read what people who have achieved financial independence suggest.

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?

 

 

5 Money Questions Every 35-Year-Old Should Ask Themselves

Everyone has that magic moment where they decide to double down on their financial health — or risk meeting long-term life and money goals. After all, wealth rarely builds itself. If you’re unsure of how to get or stay financially fit, here are five money questions every 35-year-old should ask themselves.

1. What is my credit score?

Your credit is uber-important to your financial health, as a solid score qualifies you for better rates on home loans, insurance policies, cell phone plans and more. That’s why credit monitoring isn’t one-and-done. In fact, you should check your digits regularly, ideally once a month, not just right before you apply for a loan. Added incentive to stay on stop of your credit standing: Errors on credit reports, along with instances of identity theft, are more common than you may think.

Fortunately, you can check your credit reports from the major bureaus for free every 12 months via AnnualCreditReport.com and you can monitor your credit score sans charge via certain credit card issuers or certain personal finance websites, like Credit Sesame.

2. What is my net worth?

Your net worth is the sum of your assets (investments, savings, home equity), minus your liabilities (mortgage, credit card debt, student loans). It’s also probably the best gauge of your financial health at any given time. If your liabilities outpace your assets, you’ve got some work to do — and you can prioritize what debt or issue to tackle first. If your assets outpace your liabilities, you can explore the best ways to put your money to work.

Your net worth is also a great benchmark when you’re ready to put a financial protection plan in place. Case in point …

3. How much life insurance do I need?

If you have dependents — or plan to have dependents — life insurance is a key component to your family planning … well, plan. A policy allows your loved ones to cover their expenses and liabilities were you to pass away while they are still reliant on you. It can also cover big-ticket items in your family’s future, like college tuition. Life insurance rates increase as you age or develop health conditions so it’s important to get coverage when you are young and healthy.

Most people are best-served by a term life insurance policy, which covers you for a set number of years, then expires, though there are a few instances that call for whole life insurance, which lasts until you die and comes with a forced-savings component. Policygenius can help you compare and buy life insurance, starting with a tailored online recommendation.

4. Am I paying myself first?

That’s a fancy way of asking if you are saving enough for a rainy day? Basic rule of thumb says everyone should bank at least three-to-four months of expenses away in emergency savings.

If your cash-on-hand falls short of that stat, try auto-depositing a small amount of your paycheck into a high-yield online savings account. Those dollars will eventually add up. You can also tap a budgeting app or tool to find places to pare back. This simple budgeting spreadsheet, for instance, has line for “savings contribution” all ready for you.

5. Do I need to save more for retirement?

Most people do. In fact, a recent survey from Northwestern Mutual found one in five Americans (21%) have no retirement savings at all and nearly half (46%) haven’t taken any steps to prepare for the likelihood that they could outlive their savings. That’s unfortunate, because there are a few easy ways to boost your nest egg.

Start by upping your 401(k) contributions, even by as a little as 1%. (A small increase can make a difference, thanks to compound interest.) Where possible, take advantage of other employer-sponsored benefits to lower your taxable income, like flexible spending accounts, commuter benefits and health savings accounts. Bonus: HSAs often double as de facto supplemental retirement account because you can make penalty-free withdrawals for any reason once you turn 65.

Finally, consider opening a Roth individual retirement account. Here’s why.


This article originally appeared on Policygenius.com.

 

9 Ways to Make the Most out of Payday

There’s no day like payday … to start overhauling your financial life! Said very few people. Ever. But a paycheck is actually a great reminder of all the little money things you should do — or stay on top of — in order to maintain solid financial health.

Here are nine ways to maximize your next payday.

1. Scrutinize your tax withholding

Big changes to the tax code went into effect on Jan. 1, 2018 — and, per a recent report from the U.S. Treasury, there’s a chance your employer isn’t taking enough money (known as “withholding” in tax jargon) out of your checks to pay Uncle Sam. If that’s the case, you could face a big tax bill at the end of the year.

Fortunately, there’s still time to avoid owing way more than you can pay in April. The Internal Revenue Service has a calculator that tells you how much you should withhold from each check, based on the current tax code and information on your paycheck. Head over to its website to see if you need to fill out a new W-4, the form instructing your employer how to much to withhold each pay period. Here are a few other ways to avoid an year-end tax crisis.

2. Tackle high-interest debt

High interest credit card debt, in particular, does big damage to your financial health, so if you’re carrying tons of it, put as much money as you can toward your balance with the highest annual percentate rate ASAP. Be sure to make the minimums on all your other accounts, though. Once you’ve paid that balance, move to the one with the next highest APR. If you’re really floundering, check out our full explainer on getting out of credit card debt faster.

3. Pay yourself first(ish)

That’s code for saving a chunk of the check that just hit your bank account before arranging, say, a big night out. As a general goal, aim to save at least 20% of your paycheck. Keep yourself on task by sending some money straight into savings via auto-deposit.

4. Redraft your budget

If you’re having trouble with tasks two and three, review your budget. You can often “find” some extra dollars by auditing your financial statements for clear money-wasters, like old subscriptions you’re no longer using, or big spending hikes that’ll indicate where you can pare back (All. Those. Rideshares.). Also, consider renegotiating a long-term service contract. Certain providers, like cable, cell phone and utility companies and auto insurers, change prices all the time and you may be paying more now than you were as a new customer. See if you can score a better price by asking for one … or shopping around.

Once you’ve made adjustments, redraft your budget. We’ve got a simple spreadsheet that can help.

5. Up your 401(k) contributions

Payday is a great reminder to save more for retirement. If your employer offers a 401(k), aim to max it out. In 2018, the IRS allows you put up to $18,500 (or $24,500 if you’re 50 years or older) into that account. If that’s a stretch, aim to at least meet your employer’s match. And if that’s a stretch, try increasing your contributions by 1%. It’ll make a difference, thanks to compound interest.

6. Protect your income

As we’ve said before, you can’t bank money if you don’t make money. Disability insurance is designed to protect payday specifically. It covers your income in the event you become too ill or injured to work. Consider applying for a policy, even if you get some disability insurance through work. Those long-term policies are generally pretty slim. We can help you compare and buy disability insurance to get adequate protection.

7. Update your beneficiaries

If you have some life insurance, disability insurance, a 401(k) and other benefits through work, check who will get any money associated with those accounts, should something unfortunate happen. Many people set and forget their employer-sponsored benefits, but your financial situation or lifestyle may have changed since you started your job. Make sure your accounts reflect any of these changes. For instance, if you got married, you might want to make your spouse your beneficiary in lieu of a sibling.

8. Set up an separate emergency savings account

Everyone should aim to have three-to-six months of expenses socked away for a rainy day. One secret for actually getting there? Open an online savings account. These accounts generally tout higher annual percentage yields (APYs) and are more difficult to draw from — meaning you’ll be less inclined to tap that money for non-emergencies.

9. Check your credit

Your credit plays a big role in every aspect of your life — from getting a mortgage to renting an apartment or securing lower insurance premiums. You want to know where you stand and check for signs of fraud throughout the year. You can do so by pulling your credit reports for free every 12 months via AnnualCreditReport.com and checking your credit scores for free more frequently via certain credit card issuers or credit education sites.

Don’t like what you see? There are ways to improve your credit in 30 days or less.


This article originally appeared on Policygenius.com.

 

Budget for Vices: What Percent of Your Income Do You Spend on Vices?

Do you budget for vices? A recent study found that households earning less than $30,000 per year spend 13% of their income on things like lottery tickets, prepared drinks, and restaurants. The same low-income families spend an average of 4x as much on lottery tickets as households bringing in $75,000 or more in annual income. Spending on vices can be fine from time to time, but only if your budget for vices and can make them work with your more important personal finance goals.

How much people spend in financial vices

My first job after college was as a bank branch manager. I remember a few specific cases of people coming in after winding up with hundreds of dollars in overdraft fees, asking for relief. One woman came in, statements in hand, very upset about her overdrafts that happened at the grocery store and gas station. Groceries and gas are two areas that most reasonable budgets include, and I waived a large portion of her fees.

Another customer came in, a middle-aged man, angry about his fees. In addition to rudeness and blaming the bank for his money woes, this particular person spent a lot of money at casinos, liquor stores, and tobacco shops. His overdrafts all took place at casino ATMs and on alcohol purchases. Let’s just say I was a bit less forgiving in this situation.

While it is easy to blame others for financial woes, it is important to first look in the mirror. No one made that man put his ATM card in the machine to withdraw cash at a casino. And his life would probably be better if he drank a little less. But those are life choices. You can spend your money however you want. What’s important is that you budget to spend how you want so you don’t end up in a worse situation for spending on vices.

A September 2018 study from Bankrate found that 38% of Americans dine out at least 3 times per week, 25% buy prepared drinks at least 3 times per week, and 10% buy lottery tickets at least 3 times per week.

Budget for vicesvia Bankrate

Building a budget for vices

The average American spends just under $3,000 per year on luxuries. That is $250 per month. Depending on your income, a $250 per month budget on fun purchases, luxuries, and vices could be just fine. But you certainly don’t want to spend money in these areas if you can’t afford it.

If you have high credit card balances or stress about money on a regular basis, it may be time for a budgeting reality check. You may even find that a budgeting process that includes a budget for vices is easier than you realized. A budget isn’t something that holds you back from spending, it gives you a financial blueprint to make the right spending choices for your needs and long-term goals.

If you have high-cost consumer debt or want to turn around a bad financial situation, the first place to go is your budget. You can absolutely include a budget for vices if it makes sense, but you need to start with the most important things: mortgage/rent, groceries, transportation, and savings. Once those priorities are covered, you can add in lines for additional categories.

When you finish your budget, every dollar that you earn should have a job. Put them to work first for thing things that make your life better and put your budget for vices at the very bottom of the priority list. Keep in mind that the average family needs to save at minimum 10% to 15% of their total income to maintain the same lifestyle in retirement.

The lottery is not a retirement plan

During college, a friend joked that his long-term financial plan was to win the PowerBall. But the odds of bringing home one of those massive jackpots is around 1 in 175 million. You are more likely to become an Academy Award winning movie star, die in a plane crash, get killed by a vending machine, get attacked by a shark, get elected President of the United States, have identical quadruplets, win an Olympic gold medal, get struck by lightning, or get hit by a part of a plane falling from the sky. In other words: probably not happening.

Don’t waste your time “investing” in an unlikely lottery win or other vice. Instead, put those dollars to use in a way that will give you a better long-run result. You’ll be glad you did.


This article originally appeared on Due.com.

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