Category: moneysavingtips

We’ve all heard the adage that money doesn’t buy happiness, but it definitely can add to a burden of worry and anxiety. Thankfully, you don’t have to be wealthy to cast financial care from your shoulders. A few tried-and-true guidelines can help you control your money rather than your money controlling you. Here are some ways to reduce your financial stress and stop worrying about money. 

Take A Breath

People are often very hard on themselves when trying to get on top of their financial concerns. While everyone’s financial situation is unique, know that you are not alone in your worries. Even if you’re sitting at the bottom of a hole that you dug yourself, there is always a way out. Take a moment to breathe and gain some perspective. With a calm frame of mind, try to pinpoint exactly how you’ve gotten into an unfavorable financial situation. Is it a string of medical bills? Are home appliances causing issues? Do you have spending issues that you need to get under control? It takes humility to admit a problem. Take a breath and gain that humility.

Make A Budget

It’s the most fundamental of money advice and can seem cliche, but it’s fundamental for a reason. You need to know exactly how much income you have each month and exactly where it’s being spent. Look up your revenue and expenses for the past three months, sorting your expenses into categories. You may find that you spend more money on food than you realize. Perhaps the various monthly subscriptions have added up to a higher total than anticipated. Maybe you didn’t see exactly how much of your income was going straight to mortgage and credit card payments until now. Whatever the situation, information is key to making a budget you can actually stick to.

Set Financial Goals

If you don’t have a goal, you’re always going to be treading water financially. Set a financial goal to help motivate you to stick to your budget. Remember that all goals should be SMART (Smart, Measurable, Attainable, Realistic, Time-based). Vague goals or goals without a timeline won’t get you anywhere. Some smart financial goals are to pay off your student loan balance in five years or to save up a specific amount by the end of the year to buy a new vehicle. Specific financial goals will help you keep moving forward.

Find A Better Job

It may be that no matter how much you restrict your expenses, you simply can’t get your budget out of the red. Or perhaps saving is your goal, and you don’t have enough left over each month to save how you’d like. If you can’t reduce expenses, then you have to increase your income. Check out the average compensation for your current job, and ask for a raise if necessary. If you need additional schooling, ask your employer – some companies will reimburse you for classes or training. Alternatively, consider a side gig. Even just an evening or two of delivering meals or groceries can give you enough cushion to relieve your money woes.

Build An Emergency Fund

By far, the biggest financial worry is not having enough money in savings. Make building an emergency fund one of your first financial goals. Most experts advise having a savings fund with at least three months of expenses. This can seem insurmountable, but you don’t need to get there in a week. Consider setting up your paychecks to deposit a certain amount into a separate savings account automatically. Little by little, you’ll get there.

Pay Off Debt

It can be frustrating to try to reduce your expenses and see that much of your income is getting eaten up by debt. Sure, there’s a difference between good debt and bad debt, but no debt is good if it is stealing your peace. Depending on the amount and type of debt you have, you can:

• Automate payments from your bank account to avoid late fees
• Pay more than just the minimum amount each month to reduce interest or principal
• Pay off debts with high-interest rates first
• Pay off credit cards first

A wise piece of advice is to pay each debt monthly. When the smallest debt is paid off, don’t decrease the amount you spend each month on debt – instead, add that savings to the next smallest debt. The accumulated success will help you keep chipping at the bigger ones as each debt gets paid off.

Start Investing

At some point, you’re going to want to retire. Not having a retirement plan can be a big source of anxiety and can lead to feelings of hopelessness. There are many different ways to save for retirement. Talk to a financial advisor to help determine the path that is best for your financial situation and retirement goals. This can be as small as putting money into a savings account that earns compound interest to opening a full-on 401K. Just getting this ball rolling can relieve a significant burden of stress.

Focus On What You Can Control

There is often a lot of moving pieces when it comes to money. If you’re trying to improve your financial situation, it can feel frustrating to face all of the things that are simply out of your control. Worry won’t suddenly make those things controllable, however. Instead, focus on what you can control and what you know for certain. You can control your discretionary spending. You know how much money is coming from your job and side hustles. You know when utility and debt payments are due. Focus on what is inside of your control, and it will help with feelings of overwhelm. 

Does the rule-of-thumb to “save 10% of your income” sound like a pipe dream? Does your money run out between paydays? You’re not alone – almost 75% of Americans would find it difficult to cover expenses if their paychecks were delayed by even a week, according to a survey by the American Payroll Association. Everyone’s financial situation is unique, but trying out one of the six cures below might help you bust out of the paycheck-to-paycheck rut.

1.Create A Budget

Yes, we know that you know. Everyone knows that budgets are good and necessary. But, have you actually made one yet? If so, have you stuck to it? Budgets work, and it’s easier than ever to create one with plenty of budgeting apps able to link to your bank and credit card accounts. Take time to go through the last couple of months of bank statements and categorize your expenses. Then, starting with your average expected income, start inputting your expenses. Most people work within a monthly budget, but certain line items – such as groceries, eating out, etc. – are best to break down into weekly allotments. Once you’ve made your budget, look at it – frequently! It’s not helpful to only review your budget at the end of a month. Categorize your expenses daily, if possible, to make sure that you stay on track as the days go by.

2. Cut Certain Expenses

A budget doesn’t work if you have more expenses than income, so you’ll need to cut out expenses. Streaming services or subscription apps add up quickly, so take a hard look at them and eliminate some. Maybe you only have one streaming service going at a time, and you can switch which one you have active every couple of months. Eating out usually eats up a lot of funds – can you cut that back to once a week or less? When you go grocery shopping, make a list and absolutely stick to it. Compare insurance quotes – you may be able to find a better rate that wasn’t available when you first signed up. Call your internet provider and see if you can negotiate a lower monthly rate. Cut cable or satellite services. Do you actually use that gym membership? Could you save money by finding a way to exercise at home?

3. Start An Emergency Fund

Living paycheck to paycheck doesn’t leave anything in the balance for the unexpected medical bills, car repairs, or home repairs. You likely charge those unexpected expenses to a credit card, but now you’ve increased your monthly budget even more. Even if you’ve only got an extra $100, open an emergency savings account. Aim to save $1000 to start with, then gradually increase that amount as you’re able. Ideally, your emergency fund should be full enough to cover a couple of months of expenses if you lose your job or handle the larger unexpected bills. Make sure you stick to the definition of “emergency.” This is not a savings account you should be comfortable withdrawing from.

4. Get A Better Job

There are literally millions of jobs available right now. This is the time to switch employers if you can. Searching for a better job can feel like a full-time job in itself, but won’t it be worth it when you have more extra in your account after handling your monthly expenses? If you love your current job, or it’s simply not feasible to quit, then consider a side hustle. The various grocery or takeout delivery companies are a great way to add some extra income.

5. Live Within Your Means

This can sometimes be a hard reality check, we know. Perhaps you grew up with a higher standard of living than you can afford on your own. Maybe you had dreams of your degree opening up more income than it has. A job loss can quickly make an old lifestyle unfeasible. It’s hard, but if you want to stop living paycheck to paycheck, you’ve got to rein in expenses. Some restaurants just won’t be an option. Maybe you need to move to a less expensive apartment or downsize to a smaller house. You could trade in your luxury vehicle for something used and practical. Could your family operate on a single vehicle, at least until your financial situation changes? Buying clothing and furniture secondhand can save you hundreds of dollars. Maybe you need to reconsider how many extracurriculars your children are enrolled in. These are difficult decisions, but getting control of your finances now will reap untold benefits later.

6. Pay Off Debt

If you’re only paying the minimum monthly payments on credit cards or mortgages, you’re truly losing money. Pick one of your debts and commit to paying a little extra on it each month, even if it’s only $50. Once you knock that one out, don’t use that freed-up income on anything else! Keep using it to work on your debts. For example, let’s say you were spending $200 monthly on Debt A. Once Debt A is paid off, take that $200 and add it to the minimum payment of, say, $100 on Debt B. When Debt B is paid off, then that now $300 can be added to the minimum payment of Debt C. This is called a “debt snowball.” It doesn’t free up income immediately, as you’ll keep allocating the same amount to “debts” in your budget. But, it does lower debts faster. Once they’re gone, you’ll have significant financial freedom!

In a financial world where a credit score will either open doors for you or slam them shut, it can be disheartening to see your credit score suddenly drop. Thankfully, many hits to your credit score are temporary. Here are some things that can lower your credit score and what you can do to recover before things get out of hand.

You Applied For A New Credit Card

Each time you apply for a new credit card, the credit issuer pulls your credit report. They do this because they need to determine if you’re a good or bad candidate for credit. There are two kinds of credit checks – hard inquiries and soft inquiries. Soft inquiries don’t affect your score, but a single hard inquiry can temporarily lower your credit score by a couple of points. These hard inquiries by credit issuers will stay on your credit report for two years, but FICO only takes into consideration the ones from the last 12 months when determining your score.

But don’t let this deter you from opening a credit card account. Having and responsibly using a credit card is one of the best ways to build credit. The credit points you’ll gain from using a credit card wisely will quickly offset the small dip that getting the credit card will cause.

You can limit the number of hard inquiries on your credit by using pre-approval offers. Those offers don’t necessarily guarantee that you’ll get approved for a specific credit card, but you’ll get a good estimate of your chances.

Your Credit Utilization Rate Changed

“Credit Utilization” is the ratio of credit used to credit available. This very important credit utilization rate determines 30% of your overall credit score. If you use most of your available credit amount, your credit utilization rate will increase, and your credit score will decrease. 

This can happen easily, particularly if you use your credit card to purchase large household appliances. For example, let’s say you have a credit limit of $10,000. You typically use $1,500 of that amount monthly, giving you a credit utilization rate of 15%. But, if you purchase a new set kitchen appliance one month and wind up using $5,000 of your credit, then your credit utilization rate will jump up to 50%.

The Consumer Financial Protection Bureau suggests keeping this rate below 30% in order to keep your credit score steady. A credit utilization rate higher than that will negatively affect your credit score. Thankfully, this rate is pretty fluid! Either spread out your big purchases or know that your score will take a dip for a little while.

You Missed A Payment

Your payment history is of utmost importance in calculating your credit score. In FICO’s scoring model, it accounts for 35% of your score. Now, late payments happen sometimes. If your payment is late by only a couple of days, you won’t see that reflected in your credit score. However, if you’re late by more than 30 days, your card issuer will report it as a delinquency to the credit bureaus, and your credit score is going to take a hit.

If you’re juggling multiple credit cards and loans, keeping track of all of the payments can be difficult. Thankfully, we live in a world of automatic payments. Enroll in automatic payments to keep your credit score from dipping due to recurring forgetfulness. If this becomes a frequent affair, you’ll notice an even bigger dip in your credit score. It happens to the best of us.

Note – this involves more than just credit cards! Miss payments on non-credit accounts, such as utilities, can also negatively impact your credit score.

You Closed A Credit Card

We all can picture the scene of someone taking scissors to a pile of credit cards. It’s a common vignette in websites and commercials of people climbing out of deep credit card debt. But did you know closing credit cards can actually cause your credit score to drop? This happens for two reasons.

First, closing a credit card will reduce your available credit. Remember the credit utilization ratio – with less credit available to you, your credit utilization percentage will go up unless you reduce your spending.

Secondly, your credit score takes into account the average length of your credit history. The older a credit card account is, the more it will impact your average account age when you close it. If you decide to close some credit card accounts, opt to leave your oldest accounts open.

You Got Moved To A Different Scorecard

Credit scoring models sort people into different groups, known as scorecards when calculating credit scores. Your credit profile is compared with others in the same scorecard to determine your credit score. However, if some type of negative information ages off your credit history, you might move from the top of one scorecard to the bottom of a different one.

This is completely outside of your control. It can be frustrating to see your credit score drop due to an improvement in your account. Keep paying your bills on time, and you’ll see your credit score bound back up.

You Paid Off A Loan

Wait, isn’t that a good thing? Yes! It’s good financial sense to pay off your loans. But, it will affect your credit mix.

Your credit mix accounts for 10% of your credit score on the FICO model. A full credit mix will include various types of loans and various types of credit cards. This shows that you can manage different types of debt.

It’s still wise to pay off your car or student loan, however. Your score will take a dip for a bit, but you can still build a strong credit score without having a full credit mix.

For a financial economy that relies on the credit system, it’s not particularly easy to build good credit! If you’re saddled with bad credit, you need ways to build up your credit as quickly as possible. Whether you have bad credit or no credit at all, below are some ways to use a credit builder card (otherwise known as a secured credit card) to bolster your credit score and get you working towards your financial goals. 

What Is A Secured Credit Card?

Secured credit cards give you a small line of credit when you set down an affordable, refundable security deposit. It functions similarly to a standard credit card, except for that security deposit. If you have bad or low credit, lenders may write you off as a risky borrower. Rather than simply declining your credit card application, they can give themselves a layer of protection by requiring a security deposit in case you default on your credit payments. However, if you manage your line of credit successfully and responsibly, you’ll get the full security deposit refunded to you.

How Much Is The Security Deposit?

This depends on the card itself. Some secured credit cards will have security deposits as low as $50, sometimes even less. Most cards, however, will want you to match your credit line with an equivalent deposit. If you deposit $500, then your credit limit will also be $500. Remember, these cards are intended to help you build credit. 

Why Bother With A Secured Credit Card?

So if you only receive a credit limit that matches your security deposit, what’s the point? For many people trying to build credit, it can be hard to get a standard credit card because your credit score is either too low or too limited for them to approve you. You need a credit card to build credit, but no credit card companies or banks want to risk you. It’s a tough situation to be in! The secured credit card lets lenders approve you for a card with less risk to themselves. As your credit scores rise, you’ll be able to get off a secured credit card and onto a standard credit card.

Which Secured Credit Card Should I Get?

Just like with standard credit cards, not all secured credit cards are created equal. In addition to the security deposit, some may ask you for an annual fee, monthly charges, or card insurance. Others will automatically unlock some of the perks of their standard credit card offerings as you improve your credit score. And remember, some of them require smaller security deposits than others. Research and compare, and always read the fine print. 

How Do I Use A Secured Credit Card To Build Credit?

Secured credit cards are a tool, nothing more. They will build credit depending on how you use them. Secured credit cards often come with low credit limits (making it hard to use them to finance large purchases) and high-interest rates (making it very costly to you if you decide to carry a balance). That’s fine! They aren’t intended for large purchases with extended balances. To use them as intended, you need to use responsible credit card habits.

The three fundamental habits of building good credit are:
1. Making On-Time Payments

Every month, you’ll receive a credit card balance statement containing all the purchases charged to the credit card. You don’t have to pay the balance off in full every month, but not doing that is what gets people in trouble. Interest is accrued monthly on balance carried forward. To raise your credit score, pay your balance off in full every month.
2. Keeping Your Balances Low

 To pay off the full balance monthly, it’s important not to use your credit card to spend money you don’t have. Use it to make small, everyday purchases – a grocery trip, a tank of gas, your morning coffee stop. Rather than using cash or your debit card to pay for these routine purchases, use your secured credit card and then use the cash or debit card to pay off the monthly balance.
3. Paying Off Your Debts

 If you’re currently chipping away at debt, use your secured credit card to build your credit in two ways. Rather than making payments on debit from your bank account, use your secured credit card. The on-time payment on the debt will help your credit score, regardless of how you paid it. Now, however, you also have a charge on your secured credit card. Pay that off in full when the monthly balance comes around, and you’ll have just boosted your credit score again. Two positive credit score hits from essentially one transaction? Sounds like a plan.

How Much Will A Secured Credit Card Raise My Credit Score?

Raising credit scores takes time. Thankfully, a secured credit card gives you a way to do something about a poor credit score, but it still takes patience before you’ll see the good credit habits paying off. With due diligence, you should be able to see a boost to your credit score in under six months. Take note, however! Every time you request a hard inquiry into your credit score, sometimes called a hard pull or hard credit check, it can negatively affect your credit score. Soft credit inquiries, on the other hand, allow reviews of your credit without impacting your score. Make sure you know what route you’re using to track your results!

Credit cards get a bad reputation, and not without reason! They’re incredibly convenient, but that convenience can lead to mountains of credit card debt. However, when credit cards are used wisely, they can be a huge boost to your credit score, and the benefits of certain credit cards can really pay off! Here are some smart ways to use a credit card so that it works as a savvy financial tool, not a shortcut to debt.

Transfer Debt To A 0% APR Card

Some cards offer an introductory 0% APR (annual percentage rate) for a year or even longer. If you’re saddled with more debt than you can handle, apply for one of those credit cards. You can then transfer the balance of other credit cards or bank loans onto this new card. This lets you pay those balances off without the extra hundreds of dollars of interest that you would have paid otherwise. Be mindful, however! These 0% APR cards often jump up to a much higher interest rate once the introductory period is over. Use this card only for chipping away at existing debt – not for new purchases.

Pay Off The Monthly Balance In Full

One of the conveniences of credit cards is that you don’t have to pay off the balance each month. However, this is the slippery slope to debt mountain because not only will the balances compile, but the interest will as well. Instead, pay off the balance of each month on time and in full. No minimum payment nonsense! Not only does this keep you from a debt spiral, but it will also reflect well on your credit report. Your credit card payment history accounts for 35% of your credit score, and a good credit score opens a multitude of financial doors.

Get A Sign-Up Bonus

If you are already sitting on a great credit score, you might qualify to be approved for a credit card with a sign-up bonus. These bonuses can be anywhere from $100 to $500. Beware, however – this “free” money comes with a catch. To get that bonus, you’ll need to charge a certain amount in purchases to the card over a certain period. Usually, it’s between $500 to $3,000 within the first 90 days. If you’re not paying off your balance monthly, those quick purchases to reach the sign-up bonus can be too much debt to handle. If not paid off quickly, the interest on those purchases can even cancel out the bonus altogether. If you already have the money saved in the bank to handle those purchases outright, then opening a card with a sign-up bonus can be a savvy way to play the game and get a little extra cash.

Purchase Protection

Purchase protection is a program that many credit card issuers offer. It means that they will reimburse you up to a certain amount for certain items that you purchased with the credit card if that card is then lost, stolen, or damaged within a specific time frame. Each purchase protection program varies, so read the fine print. Purchase protection is handy when buying something more expensive, like a home appliance or electronic device. Just remember to pay off that monthly balance in full! 

Build Good Credit

For better or for worse, our financial system focuses to a substantial degree on whether you can be in debt wisely. While you can avoid credit card woes by not having one at all, it’s harder to build a good credit score that way. Your credit score will be heavily influenced by if you pay off your debts in a timely fashion. To do this, you need to have debts! Open a credit card and use it for even just one or two small purchases each month. Small purchases – like a cup of coffee or one tank of gas, or a couple of groceries. Then, pay off that small balance in full every month. Even with those few monthly purchases, you’ll see your credit score rise significantly in a short amount of time. 

Use It As A Budget Tool

Opening a credit card doesn’t have to blow your budget out of the water. On the contrary, a credit card can be a great cash flow tool. Most credit card companies will automatically categorize your spending for you. If you pay for most of your expenses with your credit card (remember – pay that balance off in full each month!), then you’ll be able to identify quickly where your money went. It’s nice to be able to see quickly how much you spent on eating out or gas at any given moment. 

Have An Emergency Line Of Credit

If you don’t trust yourself by regularly using a credit card, that’s great self-knowledge. Don’t use them. However, emergencies happen. It’s wise for everyone to have an emergency fund set aside in a bank. For college students or recent graduates that don’t have that fund filled yet, it can be peace of mind to have a credit card already applied for and opened. You can call and ask that your credit limit be lowered if the temptation is too much. Use it a couple of times a year, just so that there’s activity on the account, but otherwise, don’t even touch it. If your car gets stranded or another genuine emergency occurs, you won’t be left in a lurch. A word to the wise – be firm on your definition of “emergency.” 

We all know that it’s wise to have a savings account, but there are different ones to choose from, and this can make things tricky. Which savings account would be the best fit for you depends on your needs and your financial goals. Do you want to be able to access your money quickly? How fast do you want your savings to grow? Below, we look at the main types of savings accounts available to help you make the best choice for your needs. 

Types Of Savings Accounts

Deposit Savings Account

When you learned personal finance in school, this was likely the definition you learned for what a savings account is. Whether you go through a bank, credit union, or online alternative, these savings accounts can be opened easily with a small deposit of funds. Deposit savings accounts will all pay you some interest in its holdings, but that interest rate can vary widely from one institution to the next. You’ll want to shop around to see what interest rates are available to you, and you’ll also want to check if there are any fees involved. Some institutions will charge transaction fees or minimum deposit fees. If your savings account is something that you plan to put a lot of money into and then not touch it, most of these fees might not apply to you. But either way, if you can find an account option that has as few fees involved as possible, that’s always preferable.

Money Market Account

A money market account is very similar to a deposit savings account and will likely pay you a higher interest rate. You’ll also be able to write checks from your money market account, although with far less frequency than you would from a checking account – usually, it’s capped at about six transactions per month. Still, that’s something you can’t do at all in a deposit savings account. However, you’ll be required to maintain a higher balance in this type of account versus a deposit savings account. Please note, as we’re walking through these different types of savings account, that a money market account is a different thing than a money market investment fund. 

Certificates Of Deposit

Certificates of deposit squirrel away your savings for a set amount of time. You won’t be able to access that money without accruing a penalty. When that time period ends, known as the “maturation of your term,” you’ll have the choice to reinvest your money in a new certificate of deposit for the same term length or withdraw your money. While being locked out of your money can seem like a huge tick in the con column, certificates of deposit traditionally have the highest interest rate of any of the savings account types. And the longer the term of the certificate, the higher your interest rate. 

High-Yields Savings Account

While certificates of deposit traditionally held the highest interest rates, a more recent type of savings account called a high-yield savings account is now available through some institutions. You’ll have to pay monthly maintenance fees and maintain a minimum balance, but the interest rates offered on these savings accounts are currently the highest available. Make sure that the monthly fees don’t eat into your interest rate too much, and these will be a great option.

Types Of Institutions

Bank Savings Accounts

Let’s shift gears from talking about the different types of savings accounts to the various institutions that offer these accounts. Traditional banks are a solid option. They typically offer lower interest rates and might have more fees involved, but your funds are accessible at any time. You may be limited to how many transactions you can make, but you always have access to your money. Banks are also pretty steady and reliable, bolstered by various federal and state governments to some level, and have multiple governing bodies. Furthermore, the Federal Deposit Insurance Corporation typically insured bank savings accounts for up to $250k per depositor. Traditional brick-and-mortar banks might not offer the flashiest savings account options, but they’re safe.

Credit Union Savings Accounts

Credit unions are member-owned, non-profit cooperatives and can be managed at the local, regional, or national level. Being member-owned, they are more member/customer-focused than traditional banks might be. They are concerned about your profits as a member, rather than administrative or company profits as a bank. Some will offer fewer fees and higher interest rates than traditional banking institutions. They usually offer fewer banking services than larger banks, but if your focus is solely on savings accounts, then credit unions are a great option. Federal credit unions will ensure your funds through the National Credit Union Administration for up to $250k of your savings account.

Online Savings Accounts

In this technology age, some banks now function completely online. If in-person banking isn’t a priority to you, then an online bank might be a good option. Since there are no buildings to maintain or staff, they typically don’t have as much of an overhead as banks and credit unions, and so they are free to lessen or eliminate transaction or maintenance fees. Some people might prefer to bank in person or sort out tangles in a face-to-face conversation, but if banking from your computer and phone-based customer service is more your cup of tea, then an online-based banking institution would suit your needs well. 

We have annual doctor checkups, annual dentist checkups – but an annual financial checkup should also be on that list of things to do regularly to keep you (financially) healthy. Although typically done at the end of the year, going through your finances at any point yearly will help you keep track of your spending, saving, financial goals, and have you in good shape for a smooth tax time. 

Pinpoint Your Goals

You can’t determine if you’ve been heading towards your financial goals if you haven’t identified what they are in the first place. Are you wanting to finish setting aside your emergency fund? Pay off the mortgage early? Move forward a set amount in your retirement plan? While there is an abundance of good advice and solid ideas, pinpoint what two or three financial goals you want to focus on. Both as the lens with which to look at the past year and the direction to head towards in the next. Think about both large and small-scale goals. Maybe a good small-scale goal to add this year is to set aside money each month to better prepare for the holiday season. 

Consider Personal Changes

A lot can change in a year – especially in a year like we just had! Take stock of any major life changes that took place during the year before or are coming up within the next. These might include a job change, divorce or marriage, buying a house, having a baby, or retiring. Any of these will affect your monthly budget and probably your saving and investing goals as well. Significant life changes also usually necessitate a change in tax filing.

Adjust Your Budget

After pinpointing goals and keeping life changes in mind, go to your monthly budget with fresh eyes. Look through your last few months of expenses, and see if you did, in fact, stick to your budget. If not, is it something you can tighten back on, or have big life changes made that number unfeasible? Are you feeding a larger family? Have gas prices changed considerably? Have your subscription services added up? 

Make End-Of-Life Plans

This may seem so far away to be out of mind, but accidents happen, and you do not want to be caught unprepared. Do you have a will? If so, it is wise to take a moment to review it during your financial checkup. The big life changes you just took stock of may come into play in your will. Now is also a good time to review your life insurance policy to make sure that it still provides the coverage you’d like. 

Review Insurances

You need to be sure your assets are protected! Read through your various insurance policies to be sure that they are still a good fit and that no changes were made. This includes homeowner’s or renter’s insurance, auto insurance, health insurance, and long-term disability insurance. After reading through the policies, review your premiums and decide if you want to make changes. Savings can often be found in changing carriers or bundling multiple insurance types in the same carrier. 

Check Your Investments

Make a list of all of your stocks, bonds, or mutual funds, and calculate the return you received from them during the past year. Are you satisfied? Do you need to make changes? Consider meeting with your stock broker to discuss your options and make decisions that reflect your financial goals. 

Manage Debts

An unavoidable part of any financial checkup, it’s time to tackle your debts. The first step is to calculate your debt-to-income ratio. Is it a number you’re comfortable with? From there, move on to your credit cards. Ideally, your credit card debt will have decreased over the past year. If it hasn’t, this is one of the first places to tackle. It’s hard to invest and save when saddled with credit card interest payments. How is your mortgage? Should you refinance? Lastly, pull up your credit score and see how it was affected during the past year. 

Prep For Income Taxes

If you itemize your deductibles, it’s best to keep abreast of them throughout the year rather than scramble in the spring. Look over the list of allowable deductibles, and spend some time gathering any receipts and purchase proofs you might need. You can also see how close you are to reaching any thresholds and use that information to plan your purchases. For example, medical expenses must exceed 7.5% of your income in order to be deducted. If you’re near that number but won’t necessarily reach it, do you have any medical purchases coming up that you could prepay? Making some charitable contributions would also be a wise thing to do during your financial checkup, as they are tax-deductible. 

Check Your Retirement Plans

Ideally, we keep our finances healthy now so that we can eventually retire in financial safety and be generous to those we love. But good intentions don’t just materialize overnight. Are you maxing out your company’s 401(k) plan? Work towards reaching the contribution percentage they match – otherwise, you’re just walking away from money. If your employer doesn’t offer any sort of retirement plan, get the ball rolling on opening an IRA. Perhaps you’re already retired! Take a moment to see if you have a minimum yearly required withdrawal on your IRA. 

Your child is about to leave the nest and strike out on their own, but do they have the financial knowledge to not trip right out of the gate? It is unavoidable that they will make a few financial mistakes, but you can help them to avoid the biggest pitfalls. With solid conversation, real-life calculations, and letting them test their personal finance skills while you still control the purse strings, you can help your child gain a strong financial footing before they move out.

1. Teach Them How To Make (And Stick To!) A Budget

There are many different ways to craft a budget, each with its own pros and cons. The important thing is having one and sticking to one. Sit down with your child and show them your own family budget. Remember that transparency and vulnerability with your children in financial conversations speak volumes! Explain to them how you determined different category amounts, how you track expenses throughout the month, and how you manage surplus funds or overdrawn line items. Mention that adding a bit of “fun money” every month is not irresponsible and often encourages better adherence to the budget as a whole! Have your teenager build their own budget and stick to it, using either their paychecks or allowance as income and shifting cell phone or gas payments to their responsibility.

2. Show How To Balance A Ledger

There’s something to be said for paying with cash and check, with physically writing down the total amount or seeing the bills change hands. In today’s culture, where most transactions are done digitally or using a credit or debit card, the financial exchange’s reality can become a bit abstract. Encourage your child to keep a physical ledger or check register, whether or not they use checks, and record every purchase they make when it’s made. Teach them actually to open the monthly bank statements and balance their ledger. This can avoid that sinking feeling of logging in to the bank website and seeing that funds are significantly lowered than they estimated they would be.

3. Compare and Contrast Bank Interest Rates and Fees

All banks are likely the same in the eyes of your teenager. Show them the differences in interest rates between various banks and how they would affect their savings account. Get into the weeds of financial lingo and explain what APR and APY means. Print out some of the fine print pages from different banks and show your child the bank fees and how they differ from each other. Is ordering checks going to accrue a fee? What happens if the account is overdrawn? What sorts of saving accounts do they offer?

4. Look Toward The Future With Retirement And Investing

Your teenager may scoff at the idea of preparing for retirement now, but show them the figures! Using Excel formulas or online calculator websites shows them the compounding interest value, even in a simple savings account. Show them how even small contributions to a Roth IRA now could become significant by the time they’re at retirement age. Explain what a 401(k) plan is if a future employer includes matching contributions in their benefits package. Then revisit that budget you made together – what percentage of income do they have put aside to save? Could it be increased? Could it be divided between savings and investing?

5. Illustrate debt

The biggest pitfall on the financial road of your child is a poor concept of debt. While not all debt is bad, all debt can be dangerous. If you have a mortgage, find your paperwork and show them how much of the monthly payments is interest. Work out the calculations for the interest rates on auto loans, credit cards – even their own student loan, if they’ll have one. Using credit card interest rates, show them how quickly debt can spiral. One of the most important things you can teach your teenager is how crucial it is to get out from under debt quickly.

6. Get Into The Weeds About Credit Cards

Conversations about bad debt often center around credit cards, and rightly so. However, credit cards can be a useful tool if used wisely. Whether we like it or not, credit scores are how most banks determine loan eligibility and amount. If you decide to let your teenager apply for a credit card, firmly set and explain some boundaries. Stress how crucial it is for balances to be paid off in full monthly. Give them a heads up that many retail businesses will often reward cards that are actually credit cards, and the perks are rarely worth the temptation.

7. Teach Them To Be A Smart Consumer

Sometimes money does need to be spent on a necessary purchase. Many children striking out on their own have a sizable list of necessary purchases as they buy furniture and appliances for their house. Teach them that the cheapest option isn’t always the best value – quality and longevity are things to consider as well. Help them to consider which features on appliances would actually improve their experience and which are more niche or flashy. With furniture, solid wood will cost more but last much longer, saving money on repeat purchases – and solid wood furniture can be found at second-hand stores for a fraction of the cost of even new boxed furniture!

Personal finance is an area of life that many Americans say they could use some guidance. From budgeting to planning for the kids’ college to other large expenses, learning how to manage money is an endeavor some find hard to navigate. Knowing who to ask for advice, along with not wanting to spend money to learn how to save money, are two major roadblocks to moving forward with finance education. Thankfully, there are some free online classes about personal finance that exist for the taking. These courses are all wise options for anyone considering how to better prepare for the future while not breaking the bank in that pursuit. 

1. Financial Literacy Courses, Alison 

Alison offers a variety of personal finance courses, many of them free of charge. Topics such as budgeting, saving, paying off credit card debt, insurance, and retirement planning are covered in their basic financial literacy course. They also offer additional courses for those looking to expand their knowledge about a particular piece of the financial puzzle, including a class about life insurance and retirement. A quick search on their website will lead you to a variety of courses in this niche that can help with financial goals and literacy. 

2. Smart About Money Courses

Created by the National Endowment for Financial Education, an independent, non-profit operating out of Denver, Smart About Money courses are designed for a variety of ages, including high schoolers. With options for teenagers, college students, and adults, this option offers a wide variety of education for a cross-section of the population. Additionally, they dive into subjects such as stocks and mutual funds, making Smart About Money a viable option when searching out free online education in the personal finance realm.

3. Udemy Finance Class

Online Educational Powerhouse, Udemy, offers a class entitled Personal Finance 101: Everything You Need to Know. In this free course, they tackle issues like building good credit, investing, vehicle purchases, saving for college, retirement plans, and more. They even broach a difficult subject like dating and marriage finances. It is a great start for anyone looking to increase their personal finance knowledge in a wide array of topics. 

4. Personal and Family Financial Planning, Coursera

Created by the University of Florida and marketed to help people with their financial planning while in school or at any stage in their career. This course is one that deserves a spot on the list of classes worth looking into. They tout their expertise on various financial management topics and are dedicated to helping their students solidify positive and long-lasting habits in this part of their lives. 

5. Personal Finance Planning, Edex

This course answers common questions about how investments work, the relevance of various insurance options, how to maximize retirement savings, how credit works, and more. The premise of this class is that people often find themselves in conversations, or even decision-making scenarios, in which their knowledge about finances is lacking. The education Edex provides in these areas will afford the average person the ability to carry on intelligent conversations and make wise financial decisions. Both of these are helpful and relevant in their own right, but it can be said that the former is often overlooked. Keep in mind, when networking in the professional world, knowledge about a wide array of topics, especially finance, can help with conversation and with career development.

6. My Financial Mountain: Understanding Your Path to a Solid Financial Foundation, Skillshare

The purpose of this course is to educate users about how to gain financial ground that provides long-lasting stability. Slightly different in scope from the course by Edex, Skillshare’s goal is to provide information that will perpetuate financial literacy and a subsequent foundation upon which a life of financial stability can be built. Their website maintains that a person may not walk away from the class of a financial guru but will have all he needs for a stable future built on age-old financial truths. 

7. Brigham Young University’s Personal Finance Courses

This University offers classes at the beginner, intermediate, and advanced levels, providing a place for everyone on the financial literacy spectrum. This allows anyone who takes the course to consider where they are on this spectrum and educate themselves accordingly. This is helpful in that no one is in the same place in their financial prowess, and these courses cater to that truth. Whether the goal is financial stability or simple, base knowledge about stocks, this course is worth considering at the level that makes the most sense.

8. Khan Academy

Khan Academy came on the scene years ago and quickly made a name for themselves in the arena of free education. From helping teenagers study for the ACT to assisting adults in their navigation of personal finance, they are a sort of one-stop-shop for education. Their videos are known for being easy to understand and navigate, and their finance classes are no different. They offer courses in housing, personal investment, taxes, and more. Visit their website to learn about what they offer and what might best serve your needs.

9. Planning for a Secure Retirement Course, Purdue University

Retirement is something that many don’t consider until it’s looming closer and sooner than anyone expects. Courses about how to navigate successful retirement are wise to consider and worth pursuing, especially when they are free. Purdue’s course is located on the Agriculture page of their website and includes ten modules which should help in successful retirement planning. Most retirees will claim they wish they would have planned earlier and more wisely than they did. Educating yourself puts you in a position to be ahead of the game when the time comes to think about retirement. 

10. “Money Skills” by MRUniversity 

Questions about whether to rent or to buy, along with inquiries into investment dealings, can be answered in this course. Taught by two economics professors, “Money Skills” is a personal finance class that is perfect for those with no prior financial knowledge. Truly a beginner course, it’s for those who want to learn the basics about budgeting and making wise decisions about homeownership and investments.

11. Personal Finance Course on iTunes, Missouri State University

This course also presupposes no previous financial knowledge and is convenient in its availability on iTunes. The format they chose makes it easy to navigate, portable and utilizes a platform that is familiar to most. This course ranks high in ease-of-use and covers goal setting, budgeting, credit, insurance, investing, annuities, and the time value of money. This latter section is one that is sometimes overlooked but is important in understanding the ins and outs of personal finance. 

This list is a gathering of some of the best minds in the financial industry, making it fairly comprehensive in scope. However, there are a variety of other websites and entities that tout stellar financial knowledge in the personal finance arena that are also worth pursuing. Those looking to glean knowledge about finances and establish long-lasting financial stability can enroll in any of the above free courses or search out a different one similar in scope and reliability. Of all of the ways the young and old alike can plan for their future stability, it may be argued that moving personal finance to the top of the list is not only wise but necessary. 

The financial analysis and fallout of the current COVID-19 pandemic are changing almost faster than the knowledge about the virus itself. With such an unsteady foundation, how are we to implement financial strategies that are effective and reliable? Here are a few things experts are touting as go-to strategies to weather the current crisis. 

Smart Budgeting  

Budgeting has always been important to any financial strategy, but now more than ever, budgeting needs to be high on the priority list when planning for the future. With so much up in the air, it’s important to take control of what you can. And, contrary to what the spending habits of the average American tell us, you can control where you spend your money and what you spend it on.

Don’t Spend Money on Unused Things

There are a few things you may have previously spent money on that will need to be removed from your budget plan. For example, if you have a gym membership, and your gym is closed, you shouldn’t be paying that fee. Likewise, if your private pool never opened and is still withdrawing money from your account, you should probably cancel it. Businesses are hurting all over the country, and many times are short-staffed. It is possible that accounts are still being charged that shouldn’t so be sure to check on all of your automatic withdrawals.

Move Money Around Where Appropriate 

In these unprecedented times, the budget might (and probably should) look different from the times of old. If you find you aren’t eating out as much, you might want to re-appropriate that money into a grocery line item, since that would likely mean you are making most of your meals at home. If you find your gas tank is staying full for more than a week, because your morning commute was commuted (no pun intended) from twenty miles to twenty feet, it might be wise to stick the extra money in savings account for a rainy day. This brings us to our next important strategic move. 

Build an Emergency Fund

It’s hard to imagine building an emergency fund in the midst of an emergency, but as most financial advisors will attest to, there is always a way to save a little – and a little becomes a lot with the right amount of consistency. The strategy of doing this sounds simple but tends to elude a lot of people. It looks like this: once you have re-structured your budget, find those things that are truly non-essential, and save that money in an emergency fund. There may be some non-essential online shopping that has happened in your home as a result of everything else in the world closing down for a time – now is a good opportunity to curb that spending and save it instead.

How Much Should You Save?

There are a couple of factors that go into figuring how much money should be kept in an emergency fund, namely the stability of your income and the bills you need to pay. Most experts recommend an emergency fund that will pay the bills for 3-6 months, but it may be smart to double that while navigating the COVID-19 pandemic. If you work on commission or are self-employed, it is better to inch toward the higher end of the emergency fund range. If you are a two-income family, with stable salaries in essential businesses, then the lower end of that scale should suffice. 

Why Save?

Emergency funds are called such for a reason. They are not a fun investment, nor are they there to reward you later with a vacation or a new car (although, funds for these things are helpful and should make it into your budgeting efforts if they are goals of yours.) Instead, emergency funds are there to provide peace of mind and stability if the financial reliability of your current life situation takes a turn for the worse. Think of it as medical insurance – you might never need it, but it’s worth its weight in gold when you do. 

Look at Refinancing Your Mortgage

No one likes paying any more interest than they have to, and now is the perfect time to reduce this payout. The Federal Reserve has lowered interest rates, making it a prime time to refinance your mortgage if you have one. Along with reducing monthly payments, you may be able to shorten the length of your loan. Condensing your mortgage from the twenty years you have left to fifteen is a smart way to save money and free up cash in the long run, well after the COVID crisis has come and gone. 

Consolidate Debt

Another reason refinancing might make sense, along with those listed above, is the consolidation of debt. During a refinance, it is possible to turn a portion of your house equity into cash, which would allow you to pay off debt that is accruing higher interest. Credit cards, for example, have a much higher interest rate than a mortgage. If you take some cash from your home’s equity and use it to pay off the credit card debt, you can then merge that debt with your mortgage, which will carry an interest rate that is a fraction of that of credit card companies. 

Other Ways to Consolidate Debt

Debt can be consolidated via other methods if you are not in a position to refinance a mortgage. The smartest way to achieve this is to pay off the small debts first and then begin to put that amount into paying off a larger debt. For example, if you have two credit cards, and one has a $50 monthly payment, and one has a $200 monthly payment, pay the minimum on the higher payment and work harder toward paying off the $50 per month card. Then, when that debt is paid off, take that $50 and add it to the $200 bill, making your payment $250 per month. This is a smart method that works toward consolidating and eliminating debt, all in the same financial strategy. 

If you find yourself in a precarious financial position with more debt than you can consolidate on your own, there are credit consolidation experts who can walk you through other options. No matter the route you choose, the fact remains that consolidating debt creates a more predictable and stable future, which is important as we navigate COVID-19 and its economic fallout.

Try to Donate Where You Can

Financial strategies aside, there are likely people worse off than you during this trying season. The fact is, COVID-19 is a worldwide catastrophe that is affecting millions. Whether it be a food bank or a school teacher in need of extra cleaning supplies, any amount you can give that helps alleviate someone else’s burden is a win. Don’t forget to write off any donations that are tax-deductible…your pocketbook will thank you come next April. 

Finally…

Financial strategies shift with the ages, and it seems as though there is always a new guru with “tried and true” methods that will create financial stability for you and your family. Right now, with the financial foundation shifting beneath our feet every day, it may be wise to adhere to these basic principles in order to achieve long-lasting predictability and stability in your finances.