Tag: Saving

 

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 10% 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.

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.

 

Beware of These 6 Holiday Budget Breakers

Classic Christmas movies like to depict the holidays as a time of cheer, warmth, and blissed-out festivities with loved ones.

But the reality? Holiday blues can emerge full-throttle. Plus, awkward scenarios with the fam and the stress of travel and last-minute shopping can up the anxiety levels. And when it comes to your pocketbook, the holidays can be a season of utmost terror. In 2017, Americans racked up more than $1,000 in holiday debt, according to a survey.

What’s worse, only half of those surveyed said they planned to pay down their debt in less than three months. The rest? They expected that debt to linger for five months or more. Frightening? You betcha.

But there’s a silver lining: By being mindful of common culprits that devour your money, you can avoid the plunging depths of holiday debt hangover (HDH).

Here are 6 budget breakers to beware of – and how you can avoid them.

Pumpkin Spice Lattes

Oh, these autumn treats are so-very-delicious, yet dangerous to thee pocketbook. Whether it’s a Jack Skellington Latte, apple cider donuts, or pumpkin scones, these seasonal favorite drinks and goodies can really do you in financially. Even five bucks a day during the week for two months adds up to $200.

We get it. The colder climes may send you into cozy nesting mode, making it even more tempting to splurge on sugary, warm libations. Plus, since you’re donning heavier coats and oversized sweaters, who will even notice that bit of extra padding around your waistline?

How to Avoid HDH: While it’s unrealistic to deny yourself a pumpkin spice latte during the season, set limits. For instance, commit to just one drink a week. Or load up a gift card to your favorite coffee shop, and indulge in seasonal goodies until you’re out of funds.

If you’re afraid of overdoing it, turn on notifications for transactions you make on your Chime debit card. This will keep you in check.

Impromptu Holiday Gatherings

A company holiday party is one thing, but those last-minute happy hour hangs and spur-of-the-moment gatherings with out-of-town friends can really add up. And it’s not just your food and drinks that can be pricey. Because you’re in the giving spirit, you may treat folks to rounds of drinks you may not be able to afford. Plus, to look your festive best, you may want to buy new garb for those holiday soirees.

How to Avoid HDH: Be selective in the gatherings you attend. We all experience bouts of FOMO, but make sure you won’t be paying for that nice dinner six months later. And there’s nothing wrong with suggesting a cheaper alternative, such as lunch instead of dinner, or a happy hour.

And when it comes to your attire? Sure, you want to look awesome for the gram. But take it from someone who wore the same four dollar sale dress as a maid of honor and officiant for two weddings. Most people won’t notice if you dust off an outfit.

Another option: Try mixing and matching an outfit that’s already in your closet with inexpensive accessories like a fun tie, cuff links, or perhaps a glittery wrap or stand-out neckpiece. There’s no shortage of discount retailers, from Poshmark to eBay to Nordstrom Rack. And you can also find stylish finds at a thrift store or consignment shop.

Last-Minute Gifts

Yes, I am one of those nerdy people who creates a spreadsheet for holiday gifts. But guess what? It comes in super handy when you’re trying to stick to a holiday spending plan. My spreadsheet includes gift ideas, added costs like shipping, and the amount I can spend for each giftee. So, for a last-minute gift, I first check to make sure I can afford it. If not, I can make adjustments in my current list and free up the cash that way.

How to Avoid HDH: Check that list, and see where you can consolidate. For instance, instead of buying a gift for your Aunt Jenie, Uncle Fred, and three kids, would it be appropo to buy a single gift for the entire fam bam? And instead of getting something for each of your co-workers, what about baking goodies for the entire office to share?

Another way to cut down on your holiday gift-giving is to come up with a no-gift pact. Over the years I’ve done this with my friends and some family members. It prevents any hard feelings, and we can all breathe a shared sigh of relief. My extended family also has a no-gift policy for adults. We just give gifts for the kids.

Obligatory Gifts

We all have people that we feel like we have to buy gifts for. It may be that aunt we see only once a year. Or that cousin we secretly dislike. But if we don’t get them gifts for the holidays? We might be met with awkward silence or “how could you” glares from family members on Christmas morning.

How to Avoid HDH: See if you can skirt around it by suggesting a Secret Santa or White Elephant exchange among the adults. Or give yourself permission to send that distant relative a card. If you’re still feeling a tinge of guilt, then consider spending a bit less than you planned to. Or if you’ve racked up a bunch of rewards points on a credit card, consider redeeming them for a gift card.

Impulse Buys for Yourself

We’ve all done it. During the manic of Black Friday or Cyber Monday, we may trick ourselves into believing we’re purely buying stuff for others. But in fact, we add a few items here and there for ourselves. How can you resist a killer deal, right?

How to Avoid HDH: Set limits. Remember: the best way to save money is not to spend any in the first place. And, once again, set alerts on your banking app for transactions you make with your debit or credit cards.

Overlooked Expenses

Those little overlooked expenses, such as Lyft rides to and from parties, buying gift wrap and bows at the last minute, and babysitting or pet sitting costs can sneak up on you.

How to Avoid HDH: When putting together your holiday budget, don’t forget to include these little expenses. Also, look for pockets of money you may have forgotten about. For instance, don’t forget about that jar of spare change in your closet. Or money you forgot you had in your Venmo or savings account. You can use that spare cash toward these expenses.

Tis the Season to Watch Your Spending

You know full well it’s far too easy to go overboard during the holidays. But, by minding these 6 budget breakers, you can avoid falling into debt. Your 2019 self will thank you.

 

America’s Most Expensive Cities: How to Save on Rent in Boston

Welcome to Expensive Cities, a new series designed to help renters find affordable apartments in the nation’s most unaffordable metros.

A post-recession boom has put Boston’s rents among the priciest in the country. With a thriving biotech industry and dozens of premier colleges and universities, Boston is currently the fifth most expensive big city for renters, according to apartment listings site Zumper. With rents in central Boston up nearly 55% since 2009, “affordability is a greater problem than ever,” according to Northeastern University’s Greater Boston Housing Report Card 2017.

Consider the South Boston waterfront. Once a bleak collection of warehouses and shipping docks, the are has been entirely redeveloped, at a cost of billions, into the hip and trendy Seaport district.

“There’s a Warby Parker, an Equinox and seasonal farmers markets. Even the barbershops are expensive,” says Wade Vaughn, a spokesperson for Zumper. One-bedroom apartments there now? A cool $3,200 a month.

How much does renting cost in Boston?

Across Boston, median rents are up to $2,300 for one-bedroom units. In posh Beacon Hill, with its Federal-style row houses, one-bedroom apartments cost $2,550 a month.

Renters in Back Bay, near the Eataly food hall in the Prudential Center and the art galleries of Newberry Street, can expect to pay $2,675. No wonder one in four Boston renters spends half their income on rent, far more than the 30% of income experts consider prudent, according to Boston Magazine.

Perhaps unsurprisingly, Boston renters don’t rate among the nation’s savviest tenants. For more on why, check our the Policygenius Renters Index.

Why is the rent in Boston so high?

In all fairness to Bostonians, they face some unique challenges that renters in other pricy cities, like Los Angeles and Chicago, are less apt to face.

If you’re apartment-hunting in Beantown, you might know some of these quirks. For one thing, there’s intense competition: About 70,000 off-campus college students badly skew the supply-demand equation, keeping rental prices inflated.

Plus, to accommodate the academic calendar, “about 70% of the apartment leases start on September 1, which means you have to sign leases, hire movers and get moving permits from the city, all extraordinarily early,” says Vaughn. To get a jump on the competition, some renters start their apartment searches as much as four months in advance. (We can help you quickly compare and buy renters insurance quotes here.)

Worst of all, it’s tough to find a no-fee apartment.

“Some 90% of the privately-owned apartments require you to pay an agent. That’s another month’s rent,” says Vaughn.

How to find affordable rent in Boston

Fortunately, there are some wallet-friendly neighborhoods that offer value and fun. If you’re on a limited budget, check out some of these expert-recommended affordable neighborhoods in Boston.

1. Cross the river to East Cambridge

If your job is in Cambridge, consider rentals in the neighborhood of East Cambridge, where a typical one-bedroom goes for about $2,000.

“For that side of the river and south of Somerville, East Cambridge is your best bet,” says Vaughn. “Great restaurants are popping up and a lot of the bars have a warm vibe in an industrial setting.”

Close to Kendall Square and the multitude of eateries along Cambridge Street, East Cambridge has deals as low as $1,800 a month if you’re willing to take a basement unit. For ground-level apartments, expect to pay a minimum of $1,930, Vaughn says. Act quickly, though, as he predicts rents will increase to $2,150 by September 1.

2. For near-beach living, head to Telegraph Hill

Telegraph Hill is another affordable option. Located in South Boston, or “Southie,” this neighborhood is extremely walkable, with a mix of low-rise apartment buildings and condos near the water. You’ll have access to authentic Italian food, without being swarmed by tourists in the North End.

“For the four or five months out of the year that it’s not snowing, you can go to the beach!” Vaughn says.

Typical one-bedrooms rent for around $2,100, though a recent search turned up a listing for a sunny one-bedroom, with in-unit laundry, for $1,800, including heat and hot water.

3. Consider the Streetcar Suburb Jamaica Plain

“JP,” as everyone calls Jamaica Plain, is a progressive, family-friendly part of town with lots of green space, including portions of the Emerald Necklace Conservancy parks designed by Frederick Law Olmsted in the late 19th century. The neighborhood was one of the U.S.’s first streetcar suburbs to develop after the Civil War.

Many of the units are in former single-family-houses that have been converted into three-unit apartments, says Vaughn.

“While JP feels more suburban than other neighborhoods in Boston, it’s still relatively close to downtown,” says Joshua Clark, an economist at HotPads, a map-based apartment search website that is part of Zillow Group. One-bedroom units rent for around $1,750.

4. The best neighborhoods for students? Allston & Brighton

The adjacent neighborhoods of Brighton and Allston are popular with millennials and students alike. Median rents for one-bedrooms range from $1,835 to $1,920.

“These areas are affordable, with great nightlife and public transit access to downtown, which can appeal to younger professionals and recent graduates as well,” says Clark.

With excellent walk and bike scores, easy access to transit and plenty of entertainment options, Allston-Brighton jointly ranked as one of the 20 hottest urban neighborhoods in the country, according to study from Chicago-based Hotspot Rentals.

5. Bonus tip: Arrive prepared

Whichever neighborhood suits your needs, one thing is certain. With the Boston apartment market so competitive, you’ll want to move decisively once you find an affordable place that you like. Be sure to bring along your essential documents — credit score, paystubs, references and checkbook — so you’re prepared to secure the apartment of your dreams.

Wondering what neighborhood in Beantown pays the most? Check out our list of the highest-paying ZIP codes in each state.


This article originally appeared on Policygenius.com.

 

How To Manage Your Money With Chime’s Mobile Banking App

Let’s face it — managing your money isn’t something that you’re taught in school (but learning about isosceles triangles sure came in handy.) Yet, learning how to manage finances is key to proper adulting.

Indeed, the best way to manage money can seem like a process of trial and error. But here’s a secret: using the right tools can make it much easier. That’s right. There are financial tools out there that can help you learn how to manage money and simplify the whole process.

Where should you start? With your bank. You may not realize it but your bank account is part of the foundation of your financial life. If your bank isn’t helping you manage your money, you can feel lost at sea. But with the right bank account app? You can get on the path of financial freedom and be the boss of your money.

Perhaps the best example of this is with Chime Bank. So, let’s dive in and find out how the Chime bank account app can help you manage your money.

1. Take control of your financial life

It’s time to take control of your financial life and make money moves that will benefit you now and in the future. Unfortunately, traditional banks make going to the bank seem like a pain. You may not like going to in-person branches, waiting in lines and dealing with tellers that treat you like a number. And, while traditional banks may have online banking apps, many of them are clunky and not very user-friendly.

When it comes to online banking apps, you’ll want to look for one that’s flexible, convenient and accessible. It’s also important that the app is intuitive and just makes sense. Chime’s online banking app fits the bill. It’s easy to use and works with your lifestyle so you can take control of your financial life.

Some other perks: you can cash checks on the go and easily transfer money from your Spending Account to your Savings Account. Plus, if you’re out to dinner and need to pay back a friend, you can easily transfer money to that friend using the Chime banking app.

Chime can help you stay on top of your financial life and make managing your money easier and convenient. No more bank visits, frustrating online apps or confusing websites. Chime has one of the best mobile banking apps, giving you the power to take charge of your money.

2. Know where your money is going

Wondering how to manage money? The first step is knowing where your money is going. But tracking can be tedious. Using the Chime mobile wallet, you know where you stand with your money at all times and where your cash is going.

You can get instant transaction alerts when you use your debit card. Not only that, but Chime sends you daily updates on your bank account balance.

So there will be no “OH MY GOSH how did my bank account balance get so low?!” moments. You won’t be left in the dark.

3. Avoid hidden fees

Benjamin Franklin said “Beware of little expenses. A small leak will sink a great ship.”

Perhaps the most annoying little expense is a hidden fee that you didn’t know about. This includes monthly maintenance fees from traditional banks — like, aren’t they supposed to maintain your account anyway regardless of how much is in your account? Isn’t that a bank’s job?

But at traditional banks, fees are everywhere. From monthly maintenance fees to overdraft fees, to ATM fees and foreign transaction fees. All of those fees can add up and cost you. In fact, the average household in the U.S. pays an astonishing $329 in bank fees every year.

When you’re trying to get your money right, you need to keep all the coins you can. Keep in mind: you’re the one trying to pay down your student loans, get out of credit card debt and save for that trip to Aruba you’ve been dreaming about.

With Chime online mobile banking, you can ditch fees forever. Seriously. No fees. No surprises. You can take that money and put it toward debt, savings, or something fun just for yourself. All of that money adds up and can make a difference.

4. Make the most out of payday

What’s your favorite day? When asked that question, most people would say “payday.” There’s something exhilarating and calming about knowing that money is hitting your bank account. It’s your reward for your hard work and a job well done. And, it also helps you pay your bills.

Imagine if you could get paid two days before payday. How exciting would that be? What could that do for your cash flow, your ability to pay bills faster and save more money? At Chime, we know the benefit of getting paid early. This is why we’ve created Early Direct Deposit. When you sign up for this option, you can get paid up to two days before your payday.

Your funds won’t be held hostage and you won’t have to deal with pesky physical checks. Getting your money early can help you take action on your financial goals.

Pay bills. Save money. Spend on the stuff that matters to you most. All without waiting for the money that you earned. Sounds like a win, right?

5. Supercharge your savings

You want to save for a rainy day. Save for your future. Save for your friend’s wedding next summer. Save for a ticket to Burning Man. It can all seem so overwhelming if you’re trying to figure out how to manage finances.

Using Chime’s online mobile banking app, you can save easily and effortlessly for everything you want. We have a Save When You Spend feature which rounds up your transactions to the nearest dollar and transfers that money from your Spending Account to your Savings Account.

So, if you go out for coffee and get a cappuccino for $3.75, that figure will be rounded up to $4 and twenty five cents will be transferred to your Savings Account. While that may not seem like a lot, your collective transactions add up and you’ll save a good chunk of change before you know it.

On top of that, you can automatically save 10 percent of each paycheck with Chime. This way, when you get paid, you know you’re already saving money without extra work on your part. Boom. Savings just got easier. Your goals just got closer.

6. Protect your hard-earned dough

If you lose your debit card it can be quite scary. After all, your card links straight to your checking account and this is where your money is housed. So, what can you do if you lose your debit card or it gets into the wrong hands?

Instead of waiting in a long line to talk to a customer service rep and answer a million questions, you can use the Chime app and put a halt to your transactions immediately. Simply open your Chime bank account app and block transactions on your debit card. This will prevent any new transactions or withdrawals from your account.

Additionally, Chime has a Zero Liability policy so you won’t be held responsible for any unauthorized charges. In an environment ripe for data breaches and identity theft, being protected is crucial. We take an extra security measure and require two-factor authentication and also have fingerprint authentication.

Final word

Ready to finally learn how to manage your money? A bank account like Chime and it’s mobile wallet features can help you both manage your money and reach your financial goals.

Life is more than just paying bills and working. With one of the best mobile banking apps on the market, Chime aims to make managing your money simple and even, well, fun. Isn’t it time you lived a less stressful life?

Banking Services provided by The Bancorp Bank, Member FDIC. The Chime Visa® Debit Card is issued by The Bancorp Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted. Chime and The Bancorp Bank, neither endorse nor guarantee any of the information, recommendations, optional programs, products, or services advertised, offered by, or made available through the external website ("Products and Services") and disclaim any liability for any failure of the Products and Services.