Saving Money

5 Simple Ways to Save Money During the Pandemic (& Beyond)

June 9, 2020 By Susan Paige Leave a Comment

The coronavirus epidemic has caused chaos for many families. More than 22 million people in America were claiming unemployment benefits at the start of May, and similar situations are happening across the world. Going from a full-time wage to state benefits is a shock for anyone, and many adults are struggling to adapt.

Eventually, the world will go back to normal. Still, with some experts saying that a vaccine could be over a year away, it’s unclear how long the current situation will last.

According to Greedy Rates, saving money might seem like it’s a near-impossible task, especially when you have bills to pay. So, finding ways to adapt in the short term is crucial for survival. Can you cut expenses and weather the storm? These ideas could help you do just that.

1. Cook at home

One 2018 study found that only 27% of Americans cook every day. It could be argued that the people who didn’t cook simply didn’t have the time to do so. Lockdowns have changed that.

If you’re now furloughed or unemployed, why not start cooking? Potatoes, rice, frozen vegetables, and other staples can form the foundation of affordable meals.

Cooking doesn’t have to require expensive meats and rare herbs and spices. Start simple and develop your skills. Even if you don’t keep up the habit once you go back to work, you may find that you can produce several home-cooked meals for the price of pizza delivery in the short term.

2. Check your bank statements

Are you paying for Netflix, Amazon Prime, Hulu, Spotify, or Xbox Live Gold? Do you use all those services?

Many online/subscription-based services are priced at around $10. That amount is just enough that the average person wouldn’t notice the money leaving their bank account while they were earning a full-time wage.

Now that people are feeling their earnings drop, it could be time for some of those services to get canceled.

Snack boxes and ‘loot crates’ are a subtle luxury to have delivered to your office, but do you really need them as a ‘treat’ now you’re at home? Why pay for Xbox Live Gold if you haven’t been using your console recently?

Are you getting your money’s worth out of Amazon Prime? Are you binge-watching Netflix so much that Hulu is all but forgotten?

Drop the subscriptions that you’re not using and see how much you can save each month without feeling that you’ve lost anything.

If you have a travel pass, consider canceling that too. You may not be using it for a while.

3. Call your utility companies

Are you sure that you’re paying the right price for your phone, internet, electricity, or gas? If you have a huge data package for your phone but haven’t left the house in months, why keep paying when you could drop your data package down a few tiers?

Even after cutting your budget as much as you possibly could, you may still find that you cannot afford to pay your bills. What you can do in this case is contact your service providers and they may empathize and be willing to work with you to help you keep your utilities connected. If you don’t communicate with them, they can’t help you. So why not give it a shot?

4. Seek advice

The government has useful advice for consumers who are experiencing financial difficulties due to the coronavirus situation. This includes guidance for dealing with credit companies, landlords, and banks, as well as assistance for auto loans, student loans, and other issues.

Look at the advice available online and talk to your local government’s consumer finance offices. There may be schemes at a regional level that could help you stay on your feet financially.

5. Shuffle debt payments

Under normal circumstances, the advice for people in debt is clear. Pay it off as quickly as you can to avoid paying interest. These, however, are not normal circumstances.

Faced with the option of defaulting on payments, going overdrawn, or facing late payment fees, it may make more sense to reduce your payments to the minimum on your credit cards and ask about restructuring other loans so that you can continue to make payments.

If you choose to go this route, make sure that any restructuring you do is realistically affordable in the long term. Should your finances improve, look at paying the debts off more quickly.

The coronavirus situation has given rise to a wave of scammers looking to capitalize on people’s misfortunes and desperation. Be wary of anyone who is offering to refinance debts for a fee, or promising easy income opportunities.

There are no quick fixes for the issues that so many people are facing today. Still, with planning and resourcefulness, it is possible to reduce your outgoings without feeling deprived, helping you to overcome the challenges of the coming months.

Bio: Chris Muller

Chris Muller is a financial writer and digital marketer – he started a digital marketing business in 2015 that focuses on freelance writing, content marketing, and SEO – all while working full-time and playing dad to two kids.

How Many Bank Accounts Should I Have? A Guide for Saving and Spending

May 18, 2020 By Susan Paige Leave a Comment

Nearly 94% of American households have at least one primary bank account. But are they making the most of their finances? Holding a variety of different bank accounts is one way you can better manage your money.

You might be asking yourself, “how many bank accounts should I have?” It’s a question with no clear or definitive answer. But if you know some common saving and spending strategies, you can find out which is right for you.

Not sure how to make the most of your banking experience? Here are some banking strategies that might change how you store your money.

How Many Bank Accounts Should I Have?

Optimizing your financial holdings is the key to long-term financial health. For some people, the offerings of specific bank accounts are less important than the way they’re organized.

We’ll help you decide which bank account setup is right for you, starting with the most basic of account setups: Checking and savings accounts.

Checking Accounts

If you have a bank account with any financial institution, it’s probably a checking account. In this day and age, a checking account is virtually mandatory. Your checking account covers daily expenses, bills, and occasional outings.

A single checking account gets the job done. But what if you’re married? Some couples may decide to form a joint checking account.

For others, sharing their expenses removes too much of their autonomy. The solution for these married couples is to hold a joint checking account for their shared expenses but to also have personal checking accounts for their personal expenses.

Savings Accounts

In addition to at least one checking account, everyone can benefit from the addition of a savings account. A savings account allows a limited number of transactions but has significantly higher interest rates.

Rather than piling all your money in a single checking account, you’ll generate interest by stashing your savings in a savings account.

For those who have both short-term and long-term savings plans, it might be in their best interest to open multiple savings accounts. In general, your savings account should hold an emergency fund and your retirement reserves, if you’re not ready to invest them in the market.

But also, you might be saving for a vacation, a degree, or a downpayment for a house. Consider opening a savings account for each of these different purposes.

This is known as a bucket savings strategy. At most banks, you can even schedule automatic transfers. These can help you fill different accounts without any micromanagement on your end.

Multiple Bank Accounts

Don’t forget that you can hold multiple bank accounts at different banking institutions. This is especially important for savings. Before you open your first savings account, shop around for some of the best interest rates in the market.

Business Bank Accounts

You should have a checking account separate from your personal finances if you’re a freelancer or own a personal business. This is important not only for tax purposes but can help you keep track of your business’ income and expenses. Not to mention, many banks offer specific incentives for business accounts.

A business checking account might be enough if your income is small and it’s more of a side-gig. However, if you plan on seriously expanding your business, you might want to consider a business savings account as well.

If your business relies on a storefront, you’ll also want to open a merchant services account so you can accept debit and credit cards.

Does your business rely on international customers? Search now to measure risk and financial data that could impact your company.

When Should I Open New Bank Accounts?

In addition to strategically opening new bank accounts, you might want to consider transferring banking institutions under certain circumstances.

Keep in mind that every time you open an account, your credit will take a hit from a hard credit check. Don’t open too many accounts at once if you plan on taking out a loan anytime soon.

Sign Up Bonuses

Some banks offer serious payouts for opening an account with them. It’s not worthwhile to deal with the hassle of switching accounts for the usual bonus of $100. However, sometimes you can snag a deal and receive several hundred dollars.

When you come across a massive sign up bonus, it’s worth your time to open an account. You can easily make $1000 or more in a year just by looking for bank sign up bonuses. Of course, be sure that the financial institutions you choose still offer worthwhile features before you bank with them.

Additional Banking Features

Banking has come a long way. Many banks now offer mobile banking, ATMs without fees, and more. If you feel your bank is lacking in comparison, it may be time to open an account with someone else.

So long as you have an interest rate that matches the standard, it’s generally not worth the hassle of opening a savings account at a specific bank unless it’s a massive increase. To stay competitive, most banks have nearly identical rates.

How Many Bank Accounts in Total?

“How many bank accounts should I have?” The truth is there’s no easy answer. At the very least, you should have two: a savings account and a checking account. However, if you own a business or are married, that number is likely to increase.

You might also own more savings accounts for organizational purposes, or to get the most of sign-up bonuses and banking features.

Want more personal finance advice? Check out our personal finance articles.

Should You Be Shopping for Nonessential Goods Right Now?

May 4, 2020 By Amanda Blankenship Leave a Comment

Most of the United States was shut down throughout the month of April. Despite this, many people hit online stores to shop for nonessential goods during the pandemic. Is now the best time to be buying these items?

Essential vs. Nonessential Goods

The COVID-19 pandemic has made many of us question what is (and is not) essential when it comes to purchasing things. Most of us aren’t leaving the house to buy a new treadmill right now. However, because so many people are stuck at home, online retailers are holding sales, and many folks are buying things they normally wouldn’t.

According to U.S. News & World Report, there was an increase in book and magazine purchases by 292%. Video games and baby/kids items also saw an increase of 140% and 150%, respectively. While these items aren’t necessarily essential, they are making it easier for people to pass the time indoors.

When it comes to deciphering the difference between essential and nonessential goods, it will differ from person to person. For instance, some individuals may not see buying a new computer monitor as a necessity, but if your computer stopped working and you need it to make a living, it is.

Should You Be Making Nonessential Purchases?

There are two concerns when it comes to shopping for nonessential goods right now. Obviously, there are some health concerns (everybody is concerned about their health right now). There is also an additional financial aspect to be considered as well.

Any time you’re making a nonessential purchase (even outside of pandemic times), you are more likely to stop and browse more nonessential items. This means you’ll spend more time in the store, exposing yourself to more surfaces and germs. Not to mention, it is fairly likely you’ll spend more money than you meant to.

Many people are also receiving stimulus checks and other government assistance that may be considered “extra” money right now. If you’re thinking about using your stimulus check on nonessential items, be sure you have your finances in order first. Ensure you have an adequate emergency fund and essentials before using it for anything else.

When it comes down to it, deciding whether or not you will go to buy nonessential goods will depend on how much you feel you need the item. It is important not to forget to protect your own financial future and security as well. Don’t allow your desire for an item hurt that!

Biggest Money Mistakes Made by New Graduates and How to Avoid Them

March 30, 2020 By Susan Paige Leave a Comment

College is one of the most fun and exciting times of any young adult’s life. In many cases, you find that this is probably the very first time most students are on their own financially. You set your agenda financially in terms of spending. After college, however, the ball game is on a whole different level. Here, you’re likely managing a full-time job, repaying the loans you took out in school, and getting acclimated to life outside the safety and security of the campus. Because of that, many fresh graduates often make major money mistakes that may have repercussions spanning years. Here are some of these mistakes and how to avoid them.

1. Not saving enough

Many, throughout college, don’t have a saving culture. They spend nearly every dime on various expenses, often with the knowledge that they’ll get more money from their guardians. After college, most students are hit with sticker shock as they are establishing their new lives outside the college. Imagine an entire paycheck being decimated on regular expenses such as rent and utilities like transport. Graduates must create a strong culture of saving; monies which can then be used as an emergency fund or invested.

2. Blowing money

For graduates, a steady paycheck equates to new-found freedom and independence. For those with money doled out in a limited form, maybe in terms of financial aid, scholarships, or allowances, this money gives them a sense of autonomy that many like to push, ending up in unreasonable spending on recreational experiences or discretionary items. Since assets either appreciate or depreciate in the real world, spending your hard-earned cash on assets such as TVs, cars, and clothes might bring some happiness, but will do nothing for your financial well-being.

3. Neglecting your loans

Most students go through college using one form of financial assistance or another. These are often low-interest loans that have very generous repayment terms. However, most students, after graduation, ‘forget’ about these loans. As a fresh graduate, you should always look to factor your student loans into your budget. Financial experts highly recommend keeping your total debt and housing payments below the 36% threshold. Since these loans often have a grace period, take advantage of them, and make the payments a fixed expenditure, so that you can never forget to service the loan. If you do accrue more debt after graduation, always make sure you’re following up. Also, always watch your spending and don’t use the card when it’s not necessary. You can click here to learn more about debt management.

4. Not starting to save for retirement immediately

When you’re fresh out of college, retirement is the last thing in your mind. Since many think there will be plenty of time to save for retirement, putting money aside now might seem trivial. Since saving for retirement and its benefits aren’t highlighted in school, you have to figure out which retirement plan suits you best. You can work with an IRA, a 401(k), or both and start saving up from your very first job. When you get used to doing this, you’ll continue saving, even as you continue to create a higher profile in your career.

5. Ignoring your personal finances

Most young adults, after graduation, aren’t bothered with the state of their finances, provided they can pay for their expenses and not lack any of the essentials they like, and life goes on without a breeze. However, it’s high time you take more interest in your finances. This, in a nutshell, means taking an active role in how you manage your finances. That means learning about financial concepts and building healthy financial habits. You can start by creating a financial plan which can detail your short, medium, and long-term financial goals and obligations and how best to get there.

6. Spending too much money on housing

After college, you have to find your own space. Once people start having a regular paycheck, they might be tempted to get a lovely apartment even though it might be a bit pricey. Since you’ve probably just started on your new job, don’t be shy to start modestly. Since the most attractive jobs are in places with high housing costs, you can either look for a roommate or find a spot outside town with an easy commute. All-in-all, experts say your total housing expenses shouldn’t surpass 28% of your salary. Money saved on housing can be used on other expenses or saved for a rainy day.

7. Not paying your bills on time

While some cases are unavoidable, you should always endeavor to pay your bills on time. Fresh graduates think that a few missed payments here and there won’t hurt. But then, the reality is each of those missed payments, especially with financial institutions, damages your credit history. In your youth, good credit doesn’t seem that important, not until you need a significant loan. With poor credit, no financial institution will lend you a substantial amount of money, and if they do, the interests will be higher because of the risk involved. What might be the result of a few late payments can cost you up to seven years to fix up.

8. Avoiding credit

While there are fresh graduates who can’t stop using their credit cards, there are those who dislike them completely. The perception some young adults have is that credit cards are bad. However, in reality, they are a great tool if you can use them responsibly. After college, you must build positive credit because it will help you later on in the future when you’re looking to get a loan for a home, car, or business. Since credit cards can be very tempting to use, strive for a balance where you can use your card comfortably and also be able to pay it all off at the end of the month.

The world of adult finance can be tricky and a bit confusing for a fresh graduate. Take things slowly and build up your knowledge of finances. When you begin healthy financial habits from a young age, you’ll accomplish your goals sooner and without falling into pitfalls others before you did.

Image source: Peter Lundberg, via Flickr.

For more great saving advice articles, consider reading these:

The 52 Week Money Challenge

The 365 Day Money Challenge

Saving Money Under The Mattress

7 Great Ways To Save This Coming Year

February 28, 2020 By Susan Paige Leave a Comment

Obligatory photo of dollars being stretched.

It is sometimes overwhelming how people tend to be a lot more conscious of themselves when the year ends and be a little cautious as the year starts anew. When you are looking at your finances specifically, you would be thinking about ways on how you would handle or change your spending habits or things that you start implementing to save and meet some of your financial goals.

Read on below the seven great ways to save money this coming year to walk you through different saving tips and help you with your financial management;

1. Change Your Mindset

If in the previous year you always felt like you can’t have fun without spending money, then you have to change your mindset. Come up with fun free activities or very low-cost activities to do. There are so many things you can do that don’t cost very much like cheap date nights, free date nights, free stuff with your kids, (if you have kids).

You don’t always need to be spending money to have fun and to go out and do things. Instead of thinking about how you can enjoy now, why not think ahead and consider your future and whatever your goals may be.

Once you have really changed your mindset and you’ve dug deep and figured out that you want to save money, you want to stop unnecessary spending and start saving for your goals.

2. Look For Coupons Online

Before you hit that check out button online, it is recommended to search google or sites like gopromocodes.com, whether there might be any coupons around. Because sometimes, especially for certain holidays, some online stores have specific promo codes like for Christmas, Labor Day, Memorial Day, and the like.

There are coupons available all year round, and you’ll never know if you don’t check. Especially if they have a newsletter, try to sign up and they might even send you some coupons. The saved cash would go a long way considering that you still have taxes and shipping fees to pay in your order online.

3. Cancel Unnecessary Subscriptions

Subscriptions such as your beauty boxes updates, streaming subscriptions, gym subscriptions, and things that interest you are hard to resist. Plus, considering that it is just five dollars a month, that would be easy for you to hit that subscribe button and add your credit card details. That’s plain and easy until it all adds up, and sooner or later, you have all these subscriptions for things you don’t need.

Look at all your finances, start breaking everything down and attend to what subscription you are not using and what does not fit in the money that you have. From that, start unsubscribing from all of those memberships.

It doesn’t mean that you would have to cut out your subscriptions forever, but specifically, if you are trying to pay off debt, things like a beauty box subscription and the likes are not a necessity. Once you are debt-free, you can re-evaluate and see if that subscription that you want can be added in again, given your budget.

4. Save Before You Buy

It is indeed alluring to visit online sites and hit those buy now buttons, but what you want to do if you wanted to save some money is to think about your purchases before you make them. Instead of making a rushed decision in buying, why not plan for it, and save for it in advance.

5. Use Cash

Using cash is a game-changer as far as day to day spending is concerned, for it keeps you on track of your spending. Furthermore, using cash is more emotional, for you will be thinking about the purchase more rather than just stacking everything on your cart and swiping your credit card when you got up the cash register.

6. Have Something To Remind You Of Your Goals

If you are serious about saving money, why not keep something that you really want, or more like a picture of what you’re saving up for in your wallet.

Maybe put it as your lock screen on your phone or have it framed at your bedside. Doing so will always remind you that you are trying to save up for something and probably make you rethink every time you want to buy something that would compromise your saving plans.

7. Pack Your Own Food

Whether at work or school, it is always a good idea to pack your own food. Try to imagine what will happen if you don’t have a packed lunch and you get hungry. If you have some extra cash in your wallet you’re going to spend it on maybe, a vending machine if you are in high school or perhaps you’re going to go and eat out.

Lunch may cost around $8 and imagine if you’re spending $8 every single day even if it’s just for four days it’s going to add up. That money that you are paying for food could have gone through whatever you’re saving for.

Conclusion

If you want to buy something and aren’t able to do so, it makes you frustrated that it continually reminds you to save money. Never let yourself suffer the same frustrations again by taking the seven helpful ways to save money mentioned above, thoughtfully, and stick to it. If followed these ways diligently, you would never have to worry about not having that thing or goal that you have for you are confident that you have the money, you worked hard for it, and had saved for it.

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Image source: Pictures of Money, via Flickr

How To Save Money On Your Mortgage

February 11, 2020 By Susan Paige Leave a Comment

Picture of all the cash you can save on your mortgage.

For the average American, a mortgage is the only feasible roadmap to owning a home. Instead of paying off someone else’s mortgage through rent, you could be paying your own while living in the house of your dreams. However, mortgages can take forever to repay. Moreover, since you will also be paying interest, the amount could easily end up being the largest portion of your monthly bills.

However, did you know that you can save money on your mortgage and pay it off faster? That’s right. By following the tips below, you will not have to spend 30 years of your life laboring for a mortgage. If you do things right, you could shave off five or even ten years of the term.

Read on to find out how to save money on your mortgage.

Trim Your Budget and Stick to It

To begin, re-evaluate your budget. Come up with a detailed budget and follow it to the tee. Most people tend to spend money on things they don’t necessarily need. This is referred to as impulsive shopping.

Figure out your weakness when it comes to spending and try to make things right. For example, if you usually go to the movies every weekend, perhaps you could make it once a month? If you eat out a lot, how about cooking at home every now and then? It’s not like you need culinary skills to boil a bowl of instant noodles or scramble an egg.

You don’t have to be too frugal to the extent of leading a tasteless life. However, you also need to be objective. The same savings you make by ditching poor spending habits will add up fast. After a year, you won’t believe how much you have saved in your “pay off the mortgage early” fund. Allocate these extra savings into your principal. The lower the principal, the less you have to pay every month.

Make Extra Payments Yearly

If your financial situation improves, consider making additional payments on your mortgage every year. This is an effective way of saving money on the mortgage. If your finances are tight, try to uncover where you can make adjustments that will enable you to make extra payments over the years.

Paying as little as $3000 in extra payment will make a whole lot of difference on your mortgage. After five years, you would have put down $15,000 on the principal.

Is it possible to allocate $3000 annually for the mortgage when you have other obligations? The idea is to make the payment a yearly thing. You don’t have to pay the amount as a lump sum. You can save all year long on little things, such as going out less, taking the subway, and walking rather than driving.

A Bi-Weekly Payment Plan

A bi-weekly payment plan is an option if you have a limited budget. This is the best strategy for borrowers that cannot make extra payments for their mortgage.

With a bi-weekly payment plan, you will be making payments for the mortgage every fortnight rather than once a month. This means you will be making half of the intended payments, which will still lighten your mortgage burden.

However, discuss with your lender about this payment plan and find out whether you will be liable to pay any extra fees. If there is a fee to be paid, then the plan won’t be worth it.

Petition your PMI

The worst type of mortgage is one that you are approved for without a meaningful down payment. When you do not provide a substantial down payment, you may be forced to pay private mortgage insurance (PMI) to protect the lender.

Usually, negotiating the PMI is not easy. However, if you are already paying PMI, show consistency and eagerness to clear it by making extra payments annually. Once the loan is down to 80% or less, you can petition the lender to cancel the insurance. This could save you hundreds of dollars on your total payments every year.

Get Your Home Reassessed

If you believe that the value of properties in your locale has depreciated, petition for a reassessment of your home as soon as possible. You could end up saving hundreds a year in property taxes just by having your tax lowered.

Your Mortgage Is Tax-Deductible

You can also save money on your mortgage by claiming deductible expenses. Knowing what to deduct will save you some money on taxes. Mortgage interest rates are deductible up to $750,000. To claim deductions, you have to file Form 1040 and itemize your expenses. Claiming deductions would reduce your interest rates and save you a few hundred dollars a year.

Before applying for a mortgage to buy your first home, find out how you can lower your costs. Implementing the above strategies can end up saving you thousands of dollars in the long run.

For more of our great articles, consider reading these:

The 365 day money challenge

The 52 week money challenge

Steps To Reaching Your Financial Goals

Image Credit: Photos of Money, via Flickr.