Tag: Saving

 

How To Spend $100 On Back-To-School This Year

The average parent will spend around $500 per child of their hard-earned money on back-to-school supplies.

For many parents, this price-tag seems daunting. But here’s the good news: you can still get your kids the school supplies they need without spending anywhere near $500. In fact, with careful planning, you can spend $100 (or less) on back-to-school necessities this year. Take a look at our 5 tips below and start saving money right now.

1. Shop Your Home

Before you even set foot inside a store, take inventory of what you have at home. Do you have binders that are in good shape? Do you have boxes of crayons, markers, or pencils that your child can use instead of new ones? Shop your home first by seeing what supplies you already have available. Then, cross off the items, gather them together, and make a list of all the remaining school supplies that you still need to buy.

2. Buy Only What’s Needed

If you’ve received a list from your school district stating what you need to buy for your child this year, only buy the items on the list. And, unless the list states a specific brand or size, choose the cheapest option available. As long as the particular item will serve its purpose and get your child through the school year, there’s no need to pay extra for the brand name. For example, in the Midwest, Crayola Crayons cost about $4.98 for a pack of 24 crayons. Yet, store brands from Target or Walmart only cost $2.98 for the same 24-pack.

Remember, you only have a $100 budget. If you want to make sure you don’t go over that amount and you’re only buying what you absolutely need, go shopping with only $100 in your checking account (you can always move money to your savings account and then back to your checking account later.). While some banks may charge you for dipping below a certain amount, in your checking account, you can always switch to a no fee bank to avoid that.

If your child needs more crayons (or any other school supplies) throughout the year, purchase them when the time comes. And remember: if you purchase extra items that aren’t on the list provided by your school, they may sit around your house all year. Wasted money.

3. Buy Online

Along with only buying what you need, you can receive significant savings on back-to-school supplies by shopping online. Not only does this save you time, but different stores will typically offer online only deals on school supplies.

Popular stores like Staples, Walmart, Target, and even Amazon will send out emails about back-to-school deals. If you haven’t signed up for these email lists, now is a great time to do this. This way you can get deals delivered right to your email in-box.

Another great reason to shop online for back-to-school supplies is that you’ll often qualify for free shipping straight to your home, or even to your local store if you’d rather pick up there. The items you find and pay for online are still eligible for returns, so there is no risk to you if you choose to shop online for back-to-school supplies. Instead, it’s just another way to save money, time and energy.

4. Use Coupons

If you have to buy brand name items, or if you want to save even more money, coupons, price matching deals, and savings found on apps can shave even more dollars off your back-to-school shopping bill. Almost all major retailers offer price matching, so if you find a product cheaper somewhere else, you can alert the store you’re purchasing from and they will match the price. The major retailers want your business, so don’t be shy. Take advantage of price matching to get the best deal for you.

If you decide to use coupons, remember to read and understand the store’s policy on how you can use your coupons. Each store is different, and it’s better to know the policy up front so you aren’t wasting time later. For example, some stores will not accept a store coupon on top of a manufacturer’s coupon. So, if you have a store coupon and manufacturer coupon for the same item, you may only be able to use one. The bottom line: read the policy, get your coupons in order, and make sure you have everything squared away before using them.

Even if you don’t use price matching or coupons, you can still save money or earn money back through your purchases. Apps and websites such as Ebates, Ibotta, and Checkout 51 all give you cash back for purchasing certain items or shopping at particular retailers. All you have to do is submit your receipt and the cash back or savings is then added to your account.

Also, if you use your Chime Visa® Debit Card, your purchases will round up with each transaction, thus adding more money into your savings account without having to think about it..

5. Check Out Discount Stores

Last but not least, don’t be afraid to check out discount stores or thrift stores. These stores aren’t just for cheap clothing or household items. You can find a plethora of back-to-school supplies for $1 or less. Plus, if your local thrift store offers discount days or extra coupons, you can use those to save even more.

If you decide to shop at a discount store, it’s important to remember that you may not find name brand items. However, if that’s not important to you, a discount store like the Dollar Tree can help you spend just one dollar or less on each item you buy. In other words, if you buy 40 items you may get away with spending only $40, which is well under your new $100 budget for back-to-school supplies.

Don’t Bust Your Back-To-School Budget

While the average parent may spend $500 on back-to-school supplies, you don’t have to spend anywhere close to this much money. It is possible to stick to a $100 budget for your child’s school supplies. All it takes is a little planning and willingness to shop around for the best deals.

 

We Asked College Aid Experts How to Pay for School

While it’s hard to deny the value of a college education, rising costs have made it harder for students to afford their degrees. Average tuition at public, four-year schools surged to $9,970 for the 2017-18 school year and those costs rise to $20,770 per year when you add room and board, according to the College Board. A private school or an advanced degree, will cost you even more.

With these figures in mind, it’s important to know you don’t have to follow the crowd when it comes to earning a degree. You can plot a different path by looking for ways to reduce the cost of admission or by attending a different school.

Many college aid professionals and counselors wish you would consider alternative options. When it comes to paying for college, here’s what the experts have to say.

Pricey schools don’t always pay off

Ben Luthi, college expert for Student Loan Hero, says you can get a quality education without paying a premium. To accomplish this goal, you may have to consider a different school than the one you want to attend.

“The name of your school might help you get your first job, but it likely won’t matter for the rest of your career,” he said. That’s why you should make sure you include more affordable schools in your college search.

“And if you’re already in school and you’re overwhelmed with the cost, consider transferring. I’ve worked with countless people who went to colleges that I’ve never heard of,” he said.

Joe Orsolini, who serves as president of College Aid Planners, says many students and parents get hung up on college rankings or where a school lands on a best-of list. As a result, they make poor decisions regarding their undergraduate education.

“The reality is that nobody cares where you got your undergraduate degree,” he said. “Do you know where your doctor earned their undergraduate degree?” Probably not.

Focus on your return on investment

Robert Farrington, founder of The College Investor, says too many people think of college as a time to find themselves without thinking of the long-term consequences of their student debt.

“Students need to think of college as an investment, and so they need to focus on the ROI of that investment,” he said. “Why are they going to college? What will it cost? What can they expect to make after graduation in their first job? Based on those answers, students can get a good glimpse of their potential ROI.”

When you focus on your return on investment and think of college as a business transaction, you can avoid borrowing too much to pursue a degree that won’t pay off. Farrington suggests making sure you never borrow more in student loans than you can earn in your first year after graduation.

“That will allow you to realize an ROI on your education and keep your student loan debt at a manageable level,” he said.

You can save if you don’t live on campus

Debbie Schwartz, founder of Road2College.com, says students who have the option to live off campus or at home should consider it (just remember you’ll need renters insurance if you live in an apartment).

“In many cases, room and board can be more expensive than tuition,” she said. If you can live with your parents or another family member or share an inexpensive apartment or house with other students, you can reduce the amount of cash you need to borrow for school.

Take the right courses in high school

Kathy Hart, a California-based scholarship consultant and college coach, says many students assume harder courses will help them get into college. Unfortunately, this isn’t always the case.

“Take classes in high school that allow you to be successful,” she said. In other words, don’t fall victim to the pressure of having to take Advanced Placement coursework if you know if you can’t earn an A. If you can’t, an AP class could hurt your chances of getting into the school you want.

Apply early for scholarships

Jocelyn Paonita Pearson, scholarship expert and founder of The Scholarship System, believes all students can secure scholarships. She also believes they should start searching for grants as early as sophomore or junior year in high school and apply for every scholarship for which they qualify.

“Despite the majority of stories we hear, there are many students out there that manage to graduate debt-free,” she said. The key to earning scholarships is taking the time to find them and applying, and unfortunately this can require a big investment of time and effort.

Pam Andrews, college admissions coach for The Scholarship Shark, says it’s important to think about other types of aid as well – including federal or state grants and merit scholarships. Merit aid can be especially lucrative if you have excellent grades.

“Know what the college offers in merit aid, how you can qualify for it and what it takes to maintain it,” she said. “It is also important to know the application deadlines to apply for merit aid. Sometimes those deadlines are before a college’s application for admissions deadlines.”

Never assume you won’t qualify for a scholarship. Andrews says it’s important to approach the scholarship system with an open mind and without any limiting beliefs.

“If you don’t feel like you can succeed then you’re less likely to act or even think about acting,” she said. “Having the right attitude towards winning scholarships is the first step because it then moves the student to take action.”

Tuition may keep rising, but some states and colleges have made tuition free. Here’s where.


This article originally appeared on Policygenius.com.

 

Over 60% of Americans Don’t Know What They Need to Retire

A recent study found that 61% of Americans don’t know how much money they need to retire. This concerning statistic highlights a major problem with retirement savings in the United States. A huge number of Americans have little to no retirement savings despite advice to stash away cash for a comfortable future. Let’s look at some important retirement savings rules to make sure you are not part of this scary statistic.

Americans don’t know how much money they need for retirement

A new study from Bankrate found that six in ten Americans do not know how much money they need to retire. With a large wave of Baby Boomers reaching their golden years and preparing to leave the workforce, millions of Americans may be in for a big surprise when the regular paychecks stop flowing in.

While Social Security or an increasingly rare pension plan can offer a safety net to aging Americans, most of us need much more than we will get from the government to maintain the same standard of living in retirement.

The study went beyond asking what people need to retire. Older Americans fared slightly better than Millennials in the survey and fewer than 2 in 5 non-retirees indicated that they feel their retirement savings are not on track.

Using the 15% rule to save for retirement

To avoid a ramen diet in retirement, you should follow best practices for retirement savings today. That may include contributing the maximum allowed amount to an IRA or Roth IRA in addition to participating in an employer-sponsored retirement plan like a 401(k).

One quick and easy option to meet your retirement needs is to save at minimum 10% to 15% of your gross income (that’s your income before taxes and deductions). This is easy to do automatically in most employer retirement plans.

To reach the maximum $5,500 per year in an Individual Retirement Account (IRA) or Roth IRA, you should save $211 per pay period if paid every other week to reach the target savings rate at the end of each calendar year.

If you make $50,000 per year, that means you should save $7,500 per year, or $625 per month, at the very least to maintain the same quality of life in retirement. But remember that this is just a minimum. You can save far more for retirement if you choose!

Calculate your actual retirement needs

While saving 15% or more for retirement is a good estimate on how much to save, you should do better and estimate your actual financial need in retirement. This is a tricky thing to calculate with a ton of accuracy, as you have to estimate your retirement date, how long you will live, and how much you need per month to get your total number.

Lucky for you, a Ph.D. is not necessary to calculate your retirement need. There are a handful of useful tools that make it easy and quick to estimate your financial requirements for retirement.

This in-depth calculator from AARP gives you detailed results on your retirement readiness. The Kiplinger calculator gives you a quicker result in estimating your retirement needs, but with a little less detail.

You control your retirement destiny

If you are behind on saving for retirement, there is no one to blame but yourself. But don’t dwell on the past and savings that have yet to take place. Instead, focus on the future and boosting your retirement savings starting today. That is the only way you will get on track to reach your retirement goals.

It may seem like a long way off, but your retirement is just around the corner in the scheme of things. Take the steps you need now so you don’t end up in a difficult situation in retirement. Many older Americans find themselves stuck working in retirement or skimping at home to make ends meet. Even if you can’t start by saving a full 15% of your income, you can start with something. Some retirement savings apps let you start with as little as $1 or $5!

Start saving and get yourself on track for your dream retirement. Your future self will thank you.


This article originally appeared on Due.com.

 

Grocery Hacks: 7 Ways to Save Money at a Farmers Market

Farmers markets have a reputation for being expensive. A lot of the items for sale are typically organic and local, meaning vendors can demand a premium for them. But there are some tricks to saving a bit of money at farmers markets, just like there are tricks for saving money at a grocery store. Here are seven things you can try next weekend.

1. Go late

Heading to the farmers market early in the morning will get you the best pick of everything the vendors have to offer, just like an early trip to the grocery store. But unlike the grocery store, if you wait until an hour or so before the market closes, you have a better chance of getting some good deals on the produce and other items the vendors don’t want to pack up and take home. If they don’t offer you a discount, hold off, circle the stalls and try again just before they pack up. You can often cut your costs in half.

2. Ask for discounts

If it’s getting close to the time they pack up and they haven’t offered you a discounted price, go ahead and make them a lower offer. If the tomatoes are marked as $4, it’s easy to say “I’ll take those off your hands for $2.50 so you don’t have to pack them up.” You’re not exactly asking for a discount, and chances are they’ll take your offer or counter it.

3. Get to know the vendors

Going to the market late also gives you a chance to chat a little more with the vendors since most people have already come and gone. Ask about their operations, what if any special products they’ll have in the coming weeks. The more often you visit (and the better they recognize you) the better your chances for scoring a discount or some little extras. Also be sure to ask whether they allow visitors at the farm (or where they produce their candles, jams, etc.).

4. Visit the farms

If they do allow visits, take some time to go on a tour. It can be a fun family outing, especially if you take a picnic (or if they offer foods at the farm) and make a day of it. Be sure to mention you found them at your local market and name the person you spoke with there. It’s all about making a personal connection that could lead to specials, discounts and even freebies. (Speaking of which, we’ve rounded up some of the best summer freebies here.)

5. Buy the ‘ugly’ food

Are the greens wilted from sitting in the summer heat? See if you can talk the vendor down. Are the peaches a little beat up? Ditto. Gravitate toward produce you’ll need to use that day and see if you can get it for cheaper than it’s marked.

6. Avoid the extras

Sure, there are tempting nibbly bits and drinks at the farmers market. Sometimes there are even lovely handmade products, but these artisanal items tend to come at a greater cost than you can find elsewhere. And you can bring your own snacks and a water bottle if you think you’ll get hungry and thirsty. Stick to the fresh food items if you’re serious about saving money.

7. Take cash

Farmers markets vendors are more and more likely to accept credit cards these days, thanks to the mobile technology that makes it easy for them, but it still costs them to do so and they may pass that cost on to you. Take cash and be sure and ask if there’s a discount for paying with it. They may not offer the small price drop if you don’t ask.

If organic and artisanal foods are your fav — but hard on your budget — we’ve got some hacks for saving at Whole Foods, post-Amazon acquisition editionhere.


This article originally appeared on Policygenius.com.

 

15 Hidden Summer Expenses to Budget For

Summer is the perfect time to relax — but that doesn’t mean you should get lax with your budget, especially because there are some extra expenses that pop up during the warmer months. Here are 15 expenses you’ll want to think of as you get your budget ready for the summer.

1. Utilities

Your place doesn’t have to feel like a meat locker, but you’ll be boosting the air-conditioning to beat the heat. That said, here are a few ways to lower your AC bill during the summer.

2. Travel fees

There are a lot of different fees you encounter when you’re traveling that you wouldn’t otherwise, like checked baggage fees, skycap or even mobile data fees when you’re out of range. These are all things to think through ahead of time (and some may even be travel fees you don’t need to pay).

3. Banking fees

While we’re talking fees, let’s mention ATM fees and foreign transaction fees. If you travel somewhere where your bank doesn’t have ATMs and you need to get cash, you may get hit with a fee. If your credit card doesn’t waive foreign transaction fees, you’ll want to build that expense into your budget.

You can skip a lot of fees, though. Here are 14 fees you should never pay — and how to avoid them.

4. Sunscreen

Yes, I know we’re supposed to be using sunscreen on the daily, but the amount you use goes up in the summer. The good news is some FSAs will cover sunscreen as long as it’s SPF 15 or greater, so check with your provider to see if you’re eligible.

5. Bug spray

Bye, mosquitos.

6. Barbecue supplies

From propane or charcoal to cleaning brushes, you’ll certainly boost your use of the grill during the summer.

Genius tip: Instead of buying a new set of outdoor cooking tools, see what multi-purpose items you already have in your kitchen.

7. Yard care

Flowers, veggie gardens, lawn and tree care … all sorts of yard work comes with the warmer temps. Plus, everything will need to be watered, boosting your water bill.

Genius tip: If you need to have a landscaper come in, be sure to get several estimates so you don’t overpay. Vet companies online, too, so you know their track record.

8. Gasoline

Packing up and heading out on a road trip will mean you’re boosting the miles on your car, as well as your fuel bill. (A good gas credit card could at least help you net rewards on filling your tank.) Plus, when you’re on the road, you’ll probably spend more on …

9. Convenience store stops

Chips, drinks and other road trip essentials aren’t usually taking up a line item on your budget. But who can have a road trip without ’em?

Genius tip: Stock up on supplies from the grocery store before heading out. They’ll likely be less straining on your budget than gas station items.

10. Parking

While we’re talking driving, once you get to your destination, you’ll need to leave your car somewhere and that can be costly. Some hotels offer free parking to guests, while others don’t, so this may be a factor in choosing where you stay.

11. Car rental insurance

If you’re renting a car when you get to your destination, you’ll want auto insurance. That said, it’s a good idea to check ahead of time to see if you already have coverage, as your personal insurance policy or even your credit card often covers you.

12. Activities for the kids

The kids will need things to do during the day when they’re out of school but also when you’re traveling. Every summer, my Mom had new travel games or books for me for the long car rides to the lake. Whether you’re driving or flying, you’ll probably wind up buying something for the kids to do while traveling.

13. Beach rentals

Many resorts or beaches offer umbrellas, chairs or cabanas for a fee. The fee is usually pretty reasonable, and worth it if you can’t bring your own supplies, whether because you’re coming from far away or because the resort won’t allow it. Be sure to ask what the charge is, though, so you can compare apples to apples when deciding what hotel provides the best value.

14. Tipping

Being away from home often means going to restaurants or getting delivery and, unless you’re going to a Danny Meyer style restaurant, you’ll need to add in a tip. Also think about tips for maid services in hotel rooms and cruise ship gratuities when setting your vacation budget.

15. Wardrobe

Goodbye, boots and sweaters. Hello, flip flops and tank tops! Stick to the essentials and comparison-shop for must-have apparel so you don’t overspend.

Not everything you do during the season will cost more. In fact, here are 50 things you can get for free this summer.


This article originally appeared on Policygenius.com.

 

Ruined Your 2018 Budget? Here Are 4 Ways to Fix It

If you thought 2018 was the year you’d get ahead but you haven’t made sweeping changes so far, you are not alone. Most New Year’s resolutions fail within a few months.

But the year’s not over — yet. There’s plenty of time to change. Each month is a chance to start again.

Getting ahead financially requires self-restraint, good decision-making and a serious plan. Try these four budgeting methods before the year ends so you can start making progress toward your financial goals.

1. Zero-sum budgeting

If you’re someone who wants to dive into budgeting and never look back, you might want to try the most serious budgeting tactic of them all: zero-sum budgeting. This type of budget, also known as zero-based budgeting, requires you to plan out every dollar you spend on your regular bills and, well, everything else.

But there’s a kicker. In addition to planning out your spending on housing, transportation, food, entertainment and other categories, you also budget for important expenses like savings, investing and debt repayment. By prioritizing these expenses and putting them in your budget, you make sure they don’t fall to the wayside.

The goal of the zero-sum budget is finding a place for every dollar you earn. Once the month is over, you’ll move the money you need to your checking account for the next month’s budget, rinse and repeat.

Who this budget is good for: People who wants to account for every dollar they earn
Who should skip it: People who hate tracking their spending

2. Envelope budget

An envelope budget is a type of cash budget that works well for people who have trouble tracking their spending. This type of budget requires you to set a limit for how much you’ll spend in fluctuating budget categories like groceries, dining out and entertainment.

Once you set a limit for the month for each of your fluctuating expenses, set the money aside in separate envelopes. Yes, actual cash. From that point, you carry the envelopes of cash with you so you have money to buy what you need.

The key to getting an envelope budget to work is realizing your money can run out. If you set aside $500 for food for the month but spend every cent of cash by the 21st, you are out of luck until the next month. You will likely have to tweak your amounts as you play with this budget, but the goal is helping you spend less across the board.

Who this budget is good for: People who overspend with credit and debit and need.
Who should skip it: Anyone who detests carrying cash.

3. 50-20-30 budget

Maybe you don’t like to watch every penny you spend. In that case, a budget with looser requirements may fit the bill. The 50-20-30 budget is a proportional money plan that can help you reach your financial goals.

Here’s how this type of budget works: With a 50-20-30 budget, you’re supposed to spend 50% of your monthly income on essentials, 20% of your income on savings and 30% of your income on whatever you want.

The essentials component of your budget should pay for what you need — things like housing, utilities, groceries and transportation. Your savings bucket, on the other hand, is for savings and debt repayment. When it comes to the 30% you have left over, you can spend it how you wish. Discretionary spending includes expenses like dining out, movies, fun nights with friends and new clothes — anything you could probably live without.

This budget won’t work for everyone, but it can work for people who hate budgeting every cent they earn. And if you’re saving 20% of your income with this budget, how can you complain?

Who this budget is good for: People who hate tracking every penny and still want to live the good life.
Who should skip it: High earners, since spending 30% of their income on discretionary spending could be too much.

4. Bare-bones budget

Last but not least, sometimes you have to tear everything down before you can rebuild. This is where a bare-bones budget comes in. With a bare-bones budget, you cut everything out of your life that is non-essential to see how little you can get by on. This strategy can help you spend less and force you to re-evaluate how you’ve spent money in the past.

To create a bare-bones budget, write out the bills you have to pay every month — bills like utilities, rent, credit cards, your car payment and food. Everything else gets canceled.
Your cable television subscription? Axed. Dining out? Not right now. A daily coffee? Nope. You get the drill.

A bare-bones budget shouldn’t be forever, but it can help you save money in the short-term. You may be miserable for a while, but that may be what you need to change.

Who this budget is good for: Anyone who is ready to take drastic measures to shake up their finances.
Who should skip it: People who can’t handle too much change at once,

Curious about how other people budget? Here’s how the average American spends and what it means for your budget.


This article originally appeared on Policygenius.

 

Spending More on Overdraft Fees? You’re Not the Only One

It’s no secret that big banks are getting richer off the backs of everyday people. What’s different now is that we know just how much richer.

According to a new report from the economics research firm Moebs Services, banks made a record-setting $34.3 billion in 2017 alone. That’s more than $100 per year for every last man, woman, and child in the United States. It seems especially unfair since 75% of the people paying these fees already have problems paying their monthly bills, according to a Pew Charitable Trusts study.

About now you may be wondering how you can avoid troublesome overdraft fees. Read on to learn about these fees and how to pocket more of your hard-earned cash.

Overdraft Fee Rules Have Been Changing

Remember the 2008 financial crisis? One of the byproducts of that chaos was that banks needed to start asking for your permission to enroll you in overdraft protection services. They instead billed you for this service – in the way of fees.

Asking for your permission first was supposed to make the banking process more transparent. But, banks found sneaky ways to get around it, such as by not fully explaining your options and getting you to sign on the dotted line while you filled out a barrage of paperwork necessary to open your bank account (do you remember consenting?).

Overdraft Fees Have Been Increasing

Overdraft fees are on the rise. Back in 2000 when the Backstreet Boys were still a thing, big banks charged a median overdraft fee of $18, according to Moebs Services. If that price kept pace with inflation, today’s price should be $25. Instead, it’s $30, meaning that banks are charging more than their fair share.

Even credit unions—which are usually lauded as being more consumer-friendly—are charging increased overdraft fees. Again, back in the year 2000, most credit unions were charging a median overdraft fee of just $15, three dollars less than banks. If credit unions kept pace with inflation they should be charging $20.86 per overdraft, but instead, they are charging a median fee of $29—almost double what they were charging 18 years ago.

One glimmer of hope is that the economists from Moebs Services believe that the rise in overdraft fees has currently peaked at around $30. Of course, only time will tell.

How to Avoid Overdraft Fees

Even though overdraft fees can be a hairy trap when you’re least able to deal with these sneaky charges, there’s good news: overdraft fees are entirely avoidable. You just need to be prepared. Here are some options to steer clear of these fees altogether:

Look for a Bank That Doesn’t Charge Overdraft Fees

Believe it or not, it is possible to find a bank that doesn’t charge any overdraft fees. Because these fees add up, it can be well worth your time to switch to a fee-free bank. In addition, Chime Bank also processes your direct deposit paycheck two days earlier than most banks, which can be especially helpful during those tricky times when you’re still living paycheck-to-paycheck and most likely to incur overdraft fees.

Opt Out of Overdraft Coverage

Did you know that you can actually opt out of overdraft coverage at any time? If you didn’t know this, you’re not alone: 70% of banking customers weren’t aware of this either, according to a Pew Charitable Trusts study. This means that any purchases you make that will overdraw your account will be declined. You won’t be charged for that purchase and you won’t be slapped with an overdraft fee.

Yet beware, this still isn’t a foolproof, fee-free option. If you pay for something with insufficient funds in your account, you may have to pay a non-sufficient fund (NSF) fee. Luckily, debit card transactions and ATM withdrawals aren’t subject to this tricky fee; those purchases will just be declined outright with no NSF fee.

On the other hand, if you write a check and don’t have sufficient funds to cover that transaction, banks can charge you an NSF. You can also get dinged for making a recurring electronic payment that results in a negative balance.

Keep a Close Eye on Your Budget and Checking Account

One of the most common ways people end up with overdraft fees is when they write checks and forget to reconcile their spending with their budget. Either that or they forget to check on their checking account balance altogether.

To avoid falling into this trap, it’s a good idea to both keep tabs on your checking account and update your budget every few days.

Always Carry Extra Cash or a Credit Card in Your Wallet

If you’re out and about, try to carry extra cash or a credit card for emergencies. By using your credit card, for example, you can pay off the charges in full so that you won’t owe any interest charges. At least this way you won’t be staring at overdraft or NSF fees if you inadvertently pay for something without enough funds in your bank account.

Hold Onto Your Money

Just remember, where there’s a will, there’s a way. Even though Americans are paying more in overdraft fees than any time since 2009, this doesn’t mean that you need to fall prey to these charges. You can instead follow these tips to avoid overdraft fees. You can also switch to bank that will never charge you fees. After all, it’s your money and you deserve to keep it.

 

 

Easy Ways to Stretch Your Household Budget (Without Sacrificing Convenience)

It’s no secret that stretching your family budget can go a long way.

Yet, when you think about cutting expenses, you may dread the thought of giving up lattes, foregoing dining out to eat at home, and negotiating lower rates for your Internet service. More importantly, cutting out your favorite things may not work long-term.

So, we’ve come up with other ways to save money. Check out these 6 ways to stretch your household budget.

Grocery Services

Buying groceries online is convenient and can also save you money.

For starters, when you shop for food online, you won’t have to deal with the temptation of walking through the store and picking up items that weren’t on your list. Plus, as you add food items to your virtual cart, you’ll see your total charges increasing – instead of waiting to hear the damage report at the checkout counter. This way, you can always remove items if you know you’re spending too much.

Online grocery delivery services like Amazon Fresh, Instacart, and Google Express all have garnered great reviews, but they come with monthly fees. So, if you shop at a local Walmart, Meijer, Kroger or other regional supermarket chain, find out if your store offers a free grocery pick-up service. This way, you can order and pay for your items online. From there, you can schedule a time to go to the store and pick up your groceries curbside.

Switch Your Cell Phone Provider

If your phone bill is outrageously high each month, you don’t have to ditch your phone entirely to get it under control. It may be time to look into switching to a prepaid phone service, which is often cheaper than a contract service provider.

Republic Wireless is a prepaid company that I’ve been using for three years. Their plans start at $15 per month and come with unlimited talk and text. You can also choose how much you want to pay based on the amount of data you need on a monthly basis. Plus, you can keep your smartphone if it’s compatible or use one of Republic’s Motorola or Samsung smartphones.

Other affordable prepaid phone services include Straight Talk and Boost Mobile, both of which are compatible with iPhones. As an added bonus, Boost Mobile offers affordable family plans with unlimited data, so the whole family can stay connected.

Amazon Subscribe and Save

If you shop frequently on Amazon, you may have heard about the company’s Subscribe and Save program. It allows you to choose from thousands of products and set up recurring deliveries for these items automatically within a one to six-month time frame.

This is an ideal service to use for toiletries and household items. Plus, when you sign up to receive at least five items in one month, you’ll unlock up to 15% in savings for your merchandise – on top of Amazon’s current discounts and free shipping. To make your shopping experience more convenient, Amazon sends a reminder email days before your next shipment will go out. This way you can review everything and make any necessary changes.

Baby Reward Programs

If you’re a parent, you know how expensive it is to run a household with children.

Registering with diaper and baby product companies is a sure-fire way for you to get samples, coupons, and other freebies. For example, Huggies provides coupons and discounts on diapers via its website, while Pampers has a rewards program that allows you to earn points for purchases. You can then redeem your points for free diapers and other baby products.

If you’re looking to save on other baby items, the Honest Company has subscription bundles for diapers and wipes, as well as formula and other necessities. You can automatically order product bundles every four to six weeks and cancel at any time.

Kids on the way? You can still save! If you’re expecting, consider setting up a registry with Target. This will net you more than $50 in free items, including samples of diapers and wipes, breastfeeding storage bags, diaper rash cream, and other products from top brands like Honest and Pampers.

Online Consignment Shops

Shopping for gently-used clothing is often more affordable than going to department stores and paying full price. At the same time, shopping at thrift stores can be a time suck as it can take hours to find what you’re looking for.

This is why you may want to try out online consignment shops instead. This way, you can find the used clothing you need quickly, pay a fraction of the retail price, and have the items delivered to your door.

ThredUp is one of the top online consignment shops specializing in women’s and children’s clothing, shoes, handbags and accessories. ThredUp buys gently-used clothing and resells the merchandise on its site. So, while you’re shopping, you may also want to consider making some extra money by decluttering and selling some of your unwanted clothes.

Switch to a Bank With Lower Fees

An easy way to stretch your household budget is to check on your bank fees to see if you’re incurring any unnecessary charges.

It’s important to find a bank that offers a free checking account, free ATM withdrawals, and overdraft protection. If your current bank is costing you in fees, you can easily switch to a bank with no hidden fees and save money.

Saving Isn’t Always a Hassle

Saving money and stretching your dollars doesn’t always have to be a penny-pinching hassle.

To get a jump-start, go over your budget and identify the areas where you’re spending the most money. Then, start using some of these free tools to effortlessly cut back on your spending.

 

Does the 20% Savings Rule Actually Work?

When it comes to saving money, experts often suggest saving at least 20% of your income. While this may be a good financial rule of thumb, it doesn’t work for everyone.

To figure out whether the 20% savings rule is the best option for you, it’s first important to understand more about this method of saving money. From there, you can decide whether it’s right for you. To learn more, read on.

A Quick Review of the 50/20/30 Rule 

The 50/20/30 rule is a minimalist-style budgeting tool that refers to how much of your take-home pay you should save and how much you need to allocate for expenses and other goals.

The rule simply states that 50% of your income should be devoted to essential expenses like housing, food, and utilities. Another 30% should go toward discretionary spending on the fun stuff. This leaves 20% for your savings, which can be earmarked into a savings account,  an emergency fund, and a retirement account.

Is 20% Always the Right Amount to Save?

I know what you may be thinking. While it sounds pretty simple, saving 20% of your income can be unreasonable it you’re just starting out or trying to make ends meet.

For this reason, 20% isn’t always the magic number. If saving this amount is out of your reach, then start with a lesser amount. The most important thing is that you start somewhere and save a set amount of money that works for you.

I can remember how awful I felt when I was laid off from my job during the Great Recession and was forced to stop contributing to my retirement accounts. At the time, I had no other choice. I could either continue to invest for my future or I use that money to buy groceries. Fortunately, I knew that this time in my life would pass, and that I would be able to get a handle on my finances and start saving again. I was right. As time went by, I was able to increase my savings rate until it exceeded my original savings goals.

With this in mind, remember that the 20% savings rule is really just a rule of thumb.

Does the 20% Savings Rule Work?

Yes, the 20% rule works – at least for the most part. If it didn’t work, financial experts would not continue to praise its simplicity. So, if possible for you, it’s a good idea to start saving 20% of your income today.

The bottom line: if you can consistently devote 20% of your income to savings over the long-term (think: decades), you’ll have a better shot of retiring comfortably.

But, just because the 20% rule works, keep in mind what was discussed above: it may not work for you. If your financial situation is less than stellar due to debt or other unfortunate circumstances, you may need to find an alternate route to a healthy financial future. If you think you need another savings method, take a look at the helpful tips below:

  • Create a budget. To start saving whatever you can, it’s a smart idea to first figure out how much money is coming in and going out each month. To do this effectively, we suggest tracking your expenses and creating a budget. This way you can identify areas where you can trim the financial fat, freeing up funds to save. For instance, if you track your expenses and realize you’ve been spending an average of $400 in restaurants for the past three months, you’ve just identified something you can significantly cut back on. Not only is cooking at home good for your waistline, but it’s good for your bottom line. And that’s a win-win.
  • Automate your savings. Life can easily get in the way when it comes to saving money. Too often than not, the end of the month rolls around and you realize you didn’t set anything aside for savings. To help get around this, try making saving money automatic. In fact, Chime makes it simple with its Automatic Savings feature. Here’s how it works: each time you use your Chime debit card, your transaction is rounded up to the nearest dollar and the round up amount is deposited into your Chime Savings account. Plus, you can set up your account to automatically transfer 10% of each paycheck into your savings account. This makes saving money a no brainer!

Start Saving Money Now

There you have it: an explanation of the 20% savings rule, why it’s so popular, and what you can do if you need other savings options. Remember, there is more than one route to a healthy financial future. Are you ready to start saving more money today?

 

How to Find the Right Emergency Fund Formula For You

Did you know that only about 39 percent of Americans had enough money in savings to cover a $1,000 emergency?  According to that same survey, another 19 percent of respondents planned to pay for their emergencies with a credit card.

It may seem obvious, but to avoid going into more debt, you should have an emergency fund.

Yet, regardless of whether you’re fresh out of school or in the middle of your career, starting an emergency fund from scratch can be a bit daunting. You may be wondering how much you should be saving each month or whether you need to aim for a certain amount. To help you sort it all out, take a look at our basic primer on the ins and outs of saving enough into your emergency fund.

What is an emergency fund?

An emergency fund is a bank account that is set up to help cover large, unexpected expenses. This can include car repairs, medical bills, or living expenses in the event of a job loss. An emergency fund is almost always kept in a separate savings account and the money is typically off-limits unless you need it for a true emergency.

How much should I save?

There are a myriad of opinions on how much you should have in your emergency fund at any given time. Some experts recommend setting aside at least three to six months worth of living expenses. But it may work better for you to start small – with a dollar figure that you can achieve. Here are a couple of different strategies to help you start saving:

Aim to save $1,000 and go from there

In this case, think of your emergency fund in terms of saving up a certain goal. This will help you stay motivated. Some financial experts, including Dave Ramsey, suggest starting with a goal of $1,000. To stay accountable, you can create a line item in your budget to help you earmark funds toward this monetary goal.

To help you save up even faster, you can try automating. With a Chime bank account, this is easy as you can save money automatically. For example, each time you make a transaction with your Chime Visa Debit card, the amount will be rounded up to the nearest dollar. That round up amount is then deposited into your Savings Account. Taking things a step further, you can elect to automatically move 10 percent of each paycheck straight into your Chime Savings Account.

Use the 3/6/9 rule

Once you’ve banked your first $1,000 into a designated emergency fund, you may want to try saving, even more, using Learnvest’s 3/6/9 rule. This rule helps you determine how much to save based on your particular situation.

For example, saving three months worth of your take-home pay may be the ideal amount to sock away if you’re a single renter with a steady paycheck. However, if you’re a married homeowner with children and you and your spouse both work, you should probably aim to save up to six months of the higher earner’s take-home pay.

But what if you or your spouse is self-employed? While some months may be lucrative, other months may be more of a struggle. If this is the case, then it likely makes the most sense to save nine months worth of your average take-home pay. Simply put, the more volatile and unstable your income, the more you should be saving to help give you peace of mind.

Calculating a precise amount for your emergency fund

Interested in figuring out exactly how much you need to have in your emergency fund? You may want to check out this formula from a Money Under 30 blogger, as reported in U.S. News & World Report.

This takes into account four factors: your monthly expenses, your income volatility, your income commutability (how long it would take you to find a similar job if you lose your job), and the amount you have currently saved up. Here’s a breakdown of how to figure out your job volatility and income commutability.

  • Job volatility. To find your personal income volatility “score”, you’ll need to look at your last 12 months of income and hone in on your highest and lowest earning months. Let’s assume you earned $6,000 in your most lucrative month and $2,000 in your slowest month. You would then use this formula to figure out your volatility number: $6,000 (highest) – $2,000 (lowest) = $4,000. Then, take the $4,000 and divide it by your lowest earning month. So, this would be $4,000 divided by $2,000 = 2. Voila! Your income volatility number is 2.
  • Income commutability. To zero in on this figure, you’ll need to take the total years you’ve been working and multiply that number by .5. After that, you’ll add in another .5 for every $10,000 you earn over $40,000 each year. So, if you earn $40,000, you’d add 0. If you earn $50,000 you’ll add .5. If you earn $60,000 you’d add 1 and so on.

As an example, let’s assume you’ve been employed for 10 years and earn $60,000. You would then use this formula to figure out your income commutability: 10 (years worked) multiplied by .5 = 5. Then take 5 and add the amount that represents how much you earn over $40,000. In this case that would be $60,000 – $40,000 = $20,000. So that would be 5 + 1 = 6. And there you go. Your income commutability would be 6.

With these figures at your fingertips, you can now figure out how much you should have in your emergency fund by plugging your numbers into the following formula: (Minimum monthly expenses multiplied by income volatility multiplied by income commutability) – existing savings = your ideal emergency fund amount.

For example, let’s assume your minimum monthly expenses are $3,000 and you currently have $4,000 in your emergency fund. Using the income volatility and commutability figures from above, you’d plug the numbers in here to figure out your ideal emergency fund: $3,000 (minimum monthly expenses ) multiplied by 1 (income volatility) multiplied by 6 (income commutability) = $18,000. Then take $18,000 and subtract how much you currently have in your emergency fund. So this would be $18,000 – $4,000 = $14,000. This means you should aim to save $14,000 into your emergency fund.

What’s the right amount?

With a lot of different advice floating around, it’s hard to determine the best method for calculating how much to save into your emergency fund. The most important thing is to start saving as soon as possible. This way, you’ll have funds available when you need the money the most.

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