Compound Interest

How to Harness The Power of Compound Interest

When asked what mankind’s greatest invention was, Albert Einstein replied: “Compound Interest”. He has also been quoted as saying that compound interest is the “eighth wonder of the world.”

In this article, I want to help explain the real power of compound interest, how you can take advantage of it, and what it could mean for your financial situation. But before we get there, let’s first understand what compound interest is.

What is compound interest?

There is no better way to explain compound interest than Benjamin Franklin’s quote: “money makes money. And the money that money makes, makes money.” Feel free to read that a few times over and really soak it in, and then let’s hop into an example.

Imagine you start with $100, and you have that money invested in an index fund full of different stocks. On average, the total world stock index returns 7% per year. So, at the end of the first year, your original $100 worth of index funds is now valued at $107. This is where the magic happens – in the second year you gain another 7%, but instead of gaining 7% of $100 (which would be another $7) you gain 7% of $107, which comes out to an additional $7.49.

It might seem like a minimal gain initially, BUT the real power of compound interest starts to shine over time. In this same example, after 30 years of compounding, your initial $100 is worth a whopping $761 compared to just $310 if your money was not compounding. That is more than doubling your end result with the power of compound interest! Add a couple of zeros to this calculation, and you can quickly see why this is the eighth wonder of the world.

Here is a nice graphic from the Visual Capitalist (with a couple more zeros) to help you visualize this example to highlight the power of compound interest.

Compound Interest

Created by Visual capitalist

As you can see, over time the interest, and the interest earned on the interest, really starts to add up.

I think it is worth explaining that when people say compound “interest”, it doesn’t always mean that you are earning “interest”. In this last example, you purchased an index fund that appreciated in value over time – you didn’t actually gain any “interest” on your index fund, but as it appreciated by 7% each year, that growth of 7% continued on the new, higher-value each year. Now let’s explore just how much of a difference compounding can make in your financial situation.

The power of compound excitement.

The true power of compound interest shows itself over time. To help understand the relationship between time and compounding, let’s look at another example from the Visual Capitalist.

Compound Interest

By Visual Capitalist

In this example, you have Jessica on the left and Newman on the right. Jessica starts saving ten years before Newman, at the age of 25. On the other hand, Newman waits until he is 35 to begin investing. BUT he invests twice as much as Jessica every year from when he starts to when they both turn 65. Any bets on who has more money when it is all said and done?

If you guessed Jessica, then you are CORRECT!

Despite having saved only half the amount that Newman did, Jessica still ends up with a larger investment balance simply because she got started ten years earlier and put compound interest to work on her behalf!

Compound Interest

By Visual Capitalist

I hope this is starting to help connect the dots.

The earlier you start saving and investing, the more powerful compound interest becomes.

So all that being said, what can you do to take advantage of the power of compound interest?

How to harness the power of compound interest?

This is as simple as it gets: start saving and investing TODAY. The sooner you start, the easier it is. I think one of the biggest areas that people fail with personal finance is thinking that they have to have everything perfectly figured out before they get started. This means they end up waiting a lot longer than they should to start investing. My challenge to you is to figure out what amount you could set aside right now to get started! Realize that the best time to start investing was yesterday, and the second-best time is today. By getting started now, you can harness the incredible power of compound interest and put your money to work. 

Think about this: you have to save nearly twice as much money to get to the same end result for every ten years that you wait to start investing. So put another way, the sooner you start, the less you need to save to reach the same level of wealth. 

To continue to drive home the point, here is another graphic from the Visual Capitalist. This shows how much money you would need to invest to end up with 1 million dollars at the end of each time period. The results are staggering. At the top, you can see that if you want to be a millionaire in 15 years, you will need to invest $33k PER YEAR. But what if you start when you are 20 years old and want to be a millionaire by 65? That gives you 45 years to let the power of compounding work on your behalf, and you would only need to invest $3k per year! 

Compound Interest

By Visual Capitalist

Now that you understand what compound interest is, the true power, and how to harness it. Let’s talk a bit about what it could mean for your financial situation.

What compound interest can do for your financial situation.

Armed with the knowledge of compounding, you start to see why it can be so powerful to start saving and investing while you are young. Referencing the graphic above, if you have 50 years to save and invest, you can become a millionaire by only investing $107,500. Contrast that with someone who delays saving for retirement and only has 20 years to save; they would need to invest $419,000 to reach that same $1 million mark. Plain and simple, start early, and the money will do the work for you. Start later, and you will need to do a lot of the work to get there.

Putting it all together.

To sum it all up, compound interest is the interest you earn on the interest that you have earned. It is a multiplying force that will propel you to financial independence and put your money to work on your behalf. By understanding the relationship between compound interest and time, you can see the real value in getting started young with your savings and investments. By delaying saving and investing, you lose some of the power of compounding. This will result in you having to put forth more of the effort rather than letting your money work on your behalf. Remember, the best time to start saving was yesterday, and the second-best time is today. Do not delay, and do not hesitate to share this with any young people in your life that are wondering if they should start investing now or if they should wait.

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Do you need life insurance?

Should you buy life insurance? At some point in your financial journey, you are going to come across this question. Maybe you heard a friend or family member talking about the importance of life insurance. Perhaps you have heard someone talking about life insurance as an investment. Maybe you are even just curious how it should fit into your financial plan. Whatever the reason might be, in this post, I am going to help you crack the code of whether or not you need life insurance, what type of life insurance you should consider, and of course, how much? Before we dive into all of that, I want to first explain the purpose of life insurance.

What’s the point of history insurance?

The easiest way to answer this question is to ask yourself: does anyone depend on me for my income? If the answer is yes, then odds are you should have life insurance. If the answer is no, it might still make sense to purchase life insurance, but most of the time, it won’t be necessary, but more on that to come. Ok, so someone depends on you for your income – maybe you have a family and you and your spouse both work, perhaps you are the primary breadwinner for your household, or perhaps you support your parents or siblings. Whatever the case may be, if someone depends on you for your income and you were to pass away, they are truly left out to dry. That is where life insurance comes in. Life insurance is there to supplement your dependents by replacing the income you were making or merely covering the expenses after you are gone. Easy enough, right?

When to buy vs. not to buy

Let’s now exDo you Need life insurance?plore some of the nuances of when to buy vs. not buy life insurance. What if mom works full time as the primary breadwinner and dad stays home with the kids – who needs life insurance? Mom definitely needs life insurance because if she were to pass away, they would need to replace her income, but what about dad? Just because dad’s work in the home is not “Paid” does not mean that dad doesn’t need life insurance as well, because if dad were to pass away, mom would need to either cut back at work to take care of the kids, or hire help to come into the home, and both of those situations would cost them money. So yeah, mom and dad both need life insurance in this situation.

Now, what about a single person with no dependents – should they still buy life insurance? Ultimately, it is up to you, but you likely do not need life insurance unless you are planning to support someone in the future. For example, let’s say you have some nieces and nephews that you would like to help send to college – if you were to pass away, you wouldn’t be able to make that contribution, but if you had life insurance, you could make sure that some of the proceeds went towards helping them out with college costs. At the end of the day, who needs life insurance is an incredibly personal decision, but the best way to start the conversation is to think about who depends on you for your income, either now or in the future. Alright, now that you’ve decided whether you need life insurance or not, let’s talk about which type of life insurance.

What type of life insurance?

When it comes to different types of life insurance, things can quickly get much more complicated than they need to. I am going to help keep it very simple and say this: the majority of the time, term life insurance is going to be the best fit. There is another type of life insurance called “permanent” that can be beneficial in very obscure situations with estate planning for high net worth individuals, BUT in the majority of cases, the costs and complexities of permanent life insurance far outweigh the benefits. Without diving too deep into the weeds – you might come across individuals who are really selling permanent life insurance and trying to convince you of the benefits, but at the end of the day, you need to realize that the only people really pushing permanent life insurance are those that earn a hefty commission from selling it. Take a good look at the incentive structures for these salespeople and take all of the advice with a grain of salt.

So all that to say, stick with term life insurance. It is very straightforward, you pay a premium each month to be insured for a specific amount and purchase it for a specified “term,” usually 20 – 30 years. The great thing about term life insurance is that it is cheap for younger individuals because your likelihood of passing away during that period is so low!

So to recap here – diving into the details of life insurance can get tricky and complex, but for the majority of people, term life insurance is the best fit.

How much life insurance do you need?

So you have decided you need life insurance, you have decided you are going to buy term life insurance. Now you are wondering: well, how much do you actually need?

There are a few different ways to calculate how much insurance you need. You can focus on replacing your exact salary, OR you can focus on covering the household expenses. Sometimes people focus on a combination of replacing income and then paying off a large debt such as the mortgage with a lump sum as well. Here are a few other things to think about as you are making this calculation:

  • Do you plan to send your kids to college in the future, and how much will that cost?
  • Do you want a lump sum set aside as an emergency fund?
  • How much income are you trying to replace each year?
  • Are there any lump sum payments you would like to make either towards an outstanding debt OR to a specific individual?

As you answer each of these questions, you will start to gain a clear understanding of what your total life insurance needs are.

Ultimately there is no right or wrong answer, as long as you are accounting for the needs of your situation. One of the best ways to figure out your exact needs is to use an online calculator to walk you through step by step.

Where to buy term life insurance?

Alright – you’ve decided you need life insurance, you know you want term, you know how much you need – the last step is putting the rubber to the road and purchasing a term life insurance policy.

Do You need life insurance?

We are so fortunate to live in a time where we have the ability to shop around, compare quotes from a number of different companies, and make the best decision with all the available information. A fantastic company that I highly recommend for purchasing insurance of any type is PolicyGenius. They are an insurance marketplace that makes the shopping process incredibly easy and competitive by bringing the business to you. You simply fill out a questionnaire, decide how much you are looking to purchase, and they help you compare quotes from a number of different providers, without any heavy lifting on your part. I highly recommend them for your life insurance needs.

Another great place to purchase term life insurance is from a company called Ladder. They do a great job of simplifying the entire process. They have some cool features as well where they allow you to increase or decrease the amount of life insurance you have very easily as life circumstances change. 

PolicyGenius and Ladder are two great places to purchase term life insurance, but there are a number of other options that could be a good fit as well. The biggest thing to look for is a competitive price and an easy to use website.

The recap:

To sum it all up: not everyone needs life insurance, but it is a conversation that everyone should have. Term life insurance will be the best fit for most people because of its low cost and simplicity. How much life insurance is a very nuanced question, as long as you consider the main points and using a good online calculator, you can land on the right amount for your situation. Lastly, there are many good options for where you can purchase term life insurance; just make sure you compare offers and get the best deal possible.

Drop a comment below if you have questions, and don’t hesitate to share this with anyone that it might help!

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The best investing apps

The Best Investing Apps of 2020 (Top 8)

Investing used to be a complicated matter and even more complicated to figure out what your returns were. Not too long ago, you would have to call or email your financial advisor to see how your investments were doing. However, today all you have to do is click a few buttons to see how your assets are doing. If you think that is easy, it’s even easier to start investing. The hardest choice you’ll make is which investment app you should use.

All the apps on the list are the best investing apps you can be using. The only question you need to ask is, what is your goal with investing? Is it to save money for college, retirement, vacation, wedding, have money in savings, or something else? There are many different types of goals you could have, and each app could help you reach that goal.

NOTE these are not in any specific order; each app is a great choice, but each have different calculated benefits

TD Ameritrade

TD Ameritrade has been around since 1975 and is one of the country’s biggest online brokerage companies. More likely than not, you have heard about or have seen its bank somewhere in your city. If you are new to the world of stock investing or trading, then this is a place you want to consider starting. 

What Makes TD Ameritrade a great place to start is its vast Educational videos. The moment you create an account, you have access to all their educational resources, making it an excellent place for any starting investor. However, don’t that let that fool you TD is excellent even for the most experienced investor. TD offers all types of tools to help you out and making sure you can find out anything you need to about a specific investment.

Understand TD is best for those of you who are ok with being hands-on with your investments. If you don’t invest your money, it will just be sitting in your account losing value due to inflation.

Important Notes

  • Minimum Starting amount- $0
  • Fee- $0
  • Best for hands-on investors

The best investing apps

Acorn

If you are someone who struggles to save, then you might want to consider using Acorn to help you save and invest. Acorn has gained much popularity in the past couple of years, especially among young people. 

Acorn is a Robo-advisor investing platform that designs a portfolio based on your risk level. They have five modes of investing on their platform Conservative, Moderately Conservative, Moderate, Moderately Aggressive, and aggressive, making it an excellent choice for a wide range of investors. If you don’t know, Robo-advisors are computers that use algorithms and advanced software to build and manage your investment portfolio.

What makes Acorn so great is that it helps make investing automatic. By connecting it to your debit card, it rounds up all your purchases. If you purchase a coffee for 4.30, Acorn will round it up to $5.00 and invest that $0.70 into your account. Now while there are many positives to Acorn, there is one thing that should be known. The fee can range from $1 to $3 a month. Now that might not seem like a lot, however, if you spent 12 dollars on fees a year with only a $100 investment, that is a 12% fee. 

Important Notes

  • Fee $1-$3
  • Minimum starting $0
  • Best for those who don’t want to think about their investments

Robinhood

Chances are, if you have been doing any investing, there is a good chance that you have been using Robinhood. Robinhood gained popularity by being the first investing platform to offer a complete free trading platform. Unlike TD, there aren’t any fees for any trading that you do. The only downside is that you won’t be able to have access to retirement accounts, meaning you’ll mix out on tax benefits.

Robinhood is perfect for those of you who want an easy platform to use for trading and investing and even better for those of you who want an app that is user friendly, and you can start in a matter of minutes this is the app for you. Note that this app requires you to be hands-on with your investments. If you don’t have all your money invested in something, it will just be sitting in your account, not gaining anything.

Important Notes

  • Fee $0
  • Minimum starting $0
  • Best for those who are hands-on, but also want a simple software they can learn in just a few minutes

Fundrise

Real Estate is considered one of the best investments someone can make. It often brings much higher returns than any stock. While a real estate stock can be a good investment, it doesn’t bring the returns direct real estate investment brings. Used to, it was difficult to get into real estate deals unless you had thousands of dollars to invest. But now, thanks to platforms like Fundrise, that is no longer the case.

Fundrise is one of the biggest names out there when it comes to crowdfunding real estate deals. On average, investors get a 9.11% return on investment with them, and the best part of it all is they manage all your investments. Meaning that if you prefer hands-off investing Fundrise is the right choice for you.The best investing apps

Fundrise offers three different investment choices.

  • Supplemental income
  • Balance investing
  • Long term growth

Important Notes

  • Fee 1% annually
  • Minimum starting $500
  • Best for those who want to get started investing in real estate and don’t want to have to think about it too much.

Wealthfront

If you are serious about investing, then Wealthfront might be the best choice for you. Like Acorn, Wealthfront uses Robo-advisors to help create an investment portfolio for you. They offer four investment choices, depending on your specific goal.

  • Homeownership
  • Retirement 
  • Time off for travel
  • College 

Something great about Wealthfront is the college investment account they offer. Their college plan provides a 529 program to help better save for college. The money in this account is for anything that qualifies as higher educational expenses, which could include tuition, room and board, and books. And like a retirement account, the 529 plan has tax advantages that help keep more of your savings.

Important Notes

  • Fee 0.25% annually
  • Minimum starting $500
  • Best for those who have specific goals or want to start investing for retirement and get tax benefits.

Ally

If you haven’t checked out the article on online banking vs. traditional baking, you’ll want to check it out now to understand better why Ally might be the right choice for you. Wouldn’t it be nice if you could access your savings, checking, and investing all on the same app or site? If your answer to that last question is yes, then Ally might be the right choice for you.

What makes Ally such an excellent place to invest is that you have the opportunity to either do the investing yourself or give your money to managed by someone else. Making it beneficial to both hands-on and hands-off investors.

If you choose to have your money invested for you, there are four great portfolios to select.

  • Core 
  • Income 
  • Tax Optimized
  • Socially Responsible

Important Notes

  • Fee $0 for managed, and some fees apply to some trades
  • Minimum starting amount- self-managed $0 and managed accounts $100
  • Best for those who want to invest in the same place they do their banking.

Invstr

This list would be incomplete if Invstr weren’t listed. Invstr trading platform is similar to Robinhood. Invstr app is for those of you who want to be hands-on with their investment. One key difference between Invstr and Robinhood is that Invstr lets you buy a fraction of shares. Simply put, if you can’t afford a whole stock of Amazon, you could instead just buy a fraction of a share. Another notable difference is that Invstr offers a great learning program, so if you’re new to investing, they offer great educational material for you.

Even though the Invstr trading platform is excellent and their educational content is top-notch, neither of those are the reason Invstr is on this list. The reason Invstr made this list is because of their Fantasy Finance. Similar to Fantasy Football, you compete against friends, and whoever gets the highest return at the end of the month wins. Invstr also does monthly public competitions, and the top ten at the end of each month wins a cash prize. Learning a new skill like investing is always more fun with friends to do it with, and by helping each other figure out what you might be doing wrong, your skills will multiply faster than if you did it alone.

Important Notes

  • Fee $0.99 when trading fractions of shares and $2.99 for whole shares.
  • Minimum starting amount $1
  • Best for those who want to start with simulations and or want to learn how to invest with friends.

Betterment

If you are serious about investing and are in it for the long run that Betterment is the right choice for you. Betterment is similar to Wealthfront and Acorn in that Betterment uses Robo-advisors to help create your portfolio. Though one big positive compared to Wealthfront is that your required starting amount is $0 instead of $500. What make’s Betterment stand out among other investing platforms is that they give you access to Certified Financial Planners 24/7

Betterment offers a wide range of accounts that you can find one that meets your needs and goals. The accounts they offer are;

  • Roth IRA
  • Traditional IRA
  • SEP IRA
  • Trusts
  • House Down Payment Saving
  • Education Saving (NOTE this isn’t a 529 account, so there are no tax advantages.)

Like Ally, Betterment now also offers a checking and savings account that easily connects to your investment accounts, making it a perfect one-stop location for all your money needs.

Important Notes

  • Fee 0.25% to 0.40%
  • Minimum starting amount $500
  • Best for those who want to invest in the same place they do their banking or want to start preparing for retirement.

Which is best for you?

As you have seen, there are no shortages of investment apps, and the ones listed here are only a few of the hundreds out there. No one can choose for you; you have to ask yourself what are your goals, and do you want to be hands-on or have someone do all the investing for you? If you want to learn more about investing and where to start, check out our article on how to start investing.

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How to get a high credit score

How to Get High Credit Score in College

One of the most critical things in this world today is your credit score. You have to have it for housing loans, credit cards, car loans, school loans, etc. Your credit score impacts almost everything in life. Often, a problem facing college students is getting a good credit score, or even for that fact, getting credit history can be difficult for them. The average credit score of people between the ages of 18 and 24 is 630, which, while is not a bad score, it still isn’t good either. Another challenge is that it is probably one of the most dangerous things you carry in your wallet. Without even realizing it, you could take on thousands of dollars of debt and bury yourself in unnecessary debt.

My Journey to Good Credit

When I first got to college, I decided I wanted to apply for one, and after learning how I was able to get one. But I knew I had to be careful; I didn’t want to end up with a mountain of debt and accumulate thousands of dollars worth of interest on it. So I had to make a plan for how I was going to use it. While I did make a few mistakes along the way, I was always able to pay off the card at the end of the month. Because of that continued focus on making sure I paid off everything on it, I ended up with a credit score of 733 by my senior year. I am now on track to a credit score of 800, by following the steps down below.

How to get a high credit score

Warning

Understand before you can take on this challenge that getting a credit card is a heavy responsibility. It isn’t free money, you will have to pay it back, and if you pay it back late frequently, you will find that interest on credit cards aren’t your best friend. You can look up horror stories of students piling on credit card debt with their student loan debt. Those people at the credit companies are not your friends. Those points won’t help you; more than likely, you will never use them. These will require discipline and self-restraint. But if you do this right, it will help you greatly in the future, and you will be happy you did it.

How is your Credit Score Determined?

To get a high credit score, you have to understand how your credit score is determined. Your credit is broken down into several categories that are each weighted differently. If you can understand each of these categories, you are on your way to getting a higher credit score.

Payment History

Credit companies will look into past payments. They will see if you have paid your debts on time consistently or if you have a history of paying them late or even not paying them at all. 

Amount Owed

You are a liability to the company, and the more you use, the more liable you become. That’s why they will lower your credit score if you use more than a certain amount of your available credit. A lot of times, you will find that magic number to be 25%. So remember, never pass 25% of your available credit.

Length of Credit History

Someone who has a 20-year record of paying their bills on time will have a better history than someone who has been paying their bills early the past two years. How long you have had your credit accounts, then they might look at the age of it and see how much you use it. There is no getting around this part. Creating a good credit score and history is just a waiting game.

How to get a high credit score

Credit Mix

FICO will look at a combination of your credit, ranging from car payments, mortgages, installment loans, etc. Any time you paid things with debt or a payment plan, they are going to look at to see whether or not you paid back what you owe.

New Credit

Every time you apply for credit, that company will open up your credit history. (They will look at different things for college students, which may vary depending on the card you apply for.) Be Careful, and if you apply for another credit card and fail, your credit score could go down. Can be especially damaging if you get rejected multiple times.

Categories Impact

Each area has a different percentage of how important each category is in determining your credit score.

  1. 30% goes to amounts owed
  2. 10% goes to new credit
  3. 15% Length of Credit history
  4. 35% goes to payment History
  5. 10% goes to credit mix

Credit Scores

Your Credit Score can range from 300 to 850

  1. Excellent Credit 750+
  2. Good Credit 700-749
  3. Fair Credit 650-699
  4. Poor Credit: 600-649
  5. Bad Credit: below 600

Apply for a Credit Card

Applying can be tricky, especially in college. You’re just now entering the real world and just figuring out how to be a somewhat functioning adult. Now you are trying to adult even more by applying for a credit card.

Thanks to the Card Act of 2009, credit card issuers are effectively banned from offering merchandise on campus. Also, Adults between the ages of 18 and 21 now have to show a way of repaying any loans they might accumulate before they are given a credit line. 

Look for secured credit card lines with as little as $49 and no more than $200; you can open a credit card line up. The cash you give the company acts as collateral.

What are you going to put on your credit card?

If you use that card on everything, you will end up spending more than you have, and that’s what we want to avoid here. Figure out one or two things that you will put on the credit card. Some good ones to consider are gas and groceries. But one thing I did that helped a lot was when I wanted to make a big purchase. I would save up the money for the product, and once I had it in cash, I would put it on the credit card and pay it off the very next day. 

Determine out the max amount you will put on your card.

Figure out what your max is and what you are willing to put on the card. It shouldn’t be your credit limit. In fact, you want to try to avoid using more than 25%; companies will penalize you for that and end up affecting your card. I would budget to use around 20% of your credit card at max to leave some safety areas for you. Figure out what the number is and declare that you will not spend a penny over the decided max you have created. 

Please note if you have multiple credit cards, then you are going to want to budget it differently. Say you have three credit cards (which if you are in college, you really shouldn’t), and you have a total of $5,000 credit limit altogether, then you never want to pass $1,250 between the three cards. If you do so, it is more than likely your credit score will drop significantly.

Always have cash ready to pay off your card

Make sure that by the end of the month, every month, you have the money to pay off that credit card. In reality, you want to have the money set aside for this at the start of every month. That way you don’t have to worry, but if you can’t do that, it’s ok. Just make sure you budget for it properly and get prepared to pay it off by the end of the month. If you don’t know how to budget check out this article here.

Final Thoughts

Finally, remember that a credit card is a double-edged sword. It can help you more than you can ever imagine, but at the same time, it can destroy you without a moment’s notice. Many lives have been destroyed because of credit card debt. However, if you follow these steps in this article, you’ll never have to worry about that problem.

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pros and cons of online banking

Pros and Cons of Online Banking (2020)

We live in the digital age, almost everything we do takes place online. Whether it’s sharing our photos, reading books, watching the news, or even talking face to face, all of it takes place online. So then why shouldn’t you bank online too? Are there any benefits to it, or rather any cons to it? There is no simple yes or no answer to it all; there are plenty of benefits to both online and traditional banks. What you need to figure is what is best for you. One way might be better for someone else but not for another. In this article, you will gather a greater understanding of what an online bank is and how it might differ from more traditional banks. By the end of it, you will know the pros and cons of online banking.

What is Online Banking?

Online banking is precisely as the name says, everything you can do at a regular bank you can do online as well. Now while most banks have some online tools, the big difference here is that full online banking businesses have no brick and mortar locations. They are 100% online, which brings many pros and cons to online banks.

Pros

Lower Fees and Better Rates

Online banks don’t have nearly the same overhead cost most traditional banks have. Online banks can cut back the fees on their savings and checking accounts. Traditional bank fees can range from $5 up to $20 depending on the type of account you have and the bank you choose, and the amount you have in the account. While online banks generally have no maintenance fee at all.

Now a big difference between online and traditional banking is the annual rate you’ll get. For most traditional banks, you can expect an Annual Percentage Yield (APY) of 0.01%, while online banks can have rates up to 2.25%. While that doesn’t seem like a big deal, think of it like this. If you had $100,000 in a traditional bank with 0.01 for ten years, you would have gained only a $100, that doesn’t even include the fees you might pay. While with a 2.24% rate, you will have made $25,000, and I don’t need to tell you how big of a difference that is. What is a bonus of having a higher interest rate is that, while you won’t be beating the market, you will be safe against inflation.

pros and cons of online banking

Opening An Account is Quick and Easy

If you have ever opened a bank account before you know that it can take some time. Especially when you have to factor the drive there, waiting for someone to be available, fill out the paperwork. Then finally, deposit the cash, then drive home and deal with traffic all over again. While with online banks, you can as quickly start an account right from your phone while you are sitting at Starbucks. Note it doesn’t matter what type of account you want to start; it will be as simple as 1,2,3.

More User-friendly Sites

It shouldn’t come as too much of a surprise that online banks often have much more user-friendly websites than traditional banks. Often you will find that the online bank has both a user-friendly site and mobile app that will help you stay connected wherever you are and help to manage all your accounts. Most traditional banks make this type of customer service an afterthought since they are still focused on the brick and mortar locations. However, that has begun to change; traditional banks are starting to understand the importance of an online presence in an online world.

Cons

Websites can fail

Like everything in life, there can be many goods to something but one big set back. Unlike traditional banks where if one closed down, you could go to another one of their offices nearby. However, the same can’t be said about online banks, if they need to redo their site, or it just completely breaks, then you are kind of stuck. You won’t be able to access your account online, but don’t worry, you will still be able to use a debit card and pay for things.

No relationships

One benefit is that you don’t have to drive to open an account up, but that comes with a set back as well. If you have questions or need help with your account or with a loan, you won’t be able to just go to a branch office and talk to someone. Which if you are looking for a loan can be very difficult. Even with the growth of online banking, most people still prefer to take loans out at traditional banks.

Depositing Cash Can be Tricky

With traditional banks, you just go to their office and drop off cash, and you are good to go. With online, you will need to go to an ATM that will let you deposit some money and is connected to your online bank. But often there is a fee for doing that, but if you do some research, your online bank might reimburse you. You can also have another bank account at one of your local banks and open an account there and just transfer money from there to your online bank account. There are several other ways you can do it, but will save that for another article.

pros and cons of online banking

Which Should You do?

While no one can answer that for you, it’s good to look at and figure out where you are and look at your needs, and figure out what online bank is best for you. While there are many benefits to having online banks, it might still be good to have an account with a local bank as well. So that if anything were to happen, you could easily access some cash. Yet, if you find yourself in a place where you don’t often going go to the traditional bank locations, then you might be better of saving yourself the time and just stick with online banking. It comes down do you prefer to do everything in person or online from anywhere? As you can see there plenty of pros and cons to online banking.

Hopefully, you have found this blog to be helpful and that you are now able to make an informed choice on what you should do. If this blog has helped you today, consider sharing it, and help us to continue our mission of helping people get control of their finances.

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How to make money online

22 Ways to Make Money Online (2020)

Want more money? Wouldn’t it be nice to be able to make money online, even with this pandemic running amuck? Well, I have some good news for you. It has never been easier to start making money online. You have the whole world at your fingertips. Some of these could become full-time jobs, as long as you put in the time and effort for them. These are some of the best ways to make money online in 2020.

Freelance

You have a skill in high demand? Good, then freelancing might be the thing for you. It doesn’t matter what you do; there is some type of freelancing job out there for it. The most popular sites to hire freelancers are Upwork, Fiver, and Freelancer. If you want to be serious about this, consider making your site and business cards to help your business grow.

Blogging

One of the most popular ways to make money online is by starting your blog. You can start blogging about anything you are passionate about. However, if you want to make money off your blog, consider writing in a popular niche that is known to be profitable. There is no limit to how to monetize your blog, and this can become more than just a side hustle but can become your full-time job if you treat it like a business.

Affiliate Marketing

For those of you who already have an excellent social presence online, you might want to consider Affiliate marketing. Affiliate marketing is where you promote companies, products, services, and other offers online. You have a custom link given to you by your affiliate, and if people sign up through your link, you will earn a commission from your affiliate.

Writing an eBook

Not too long ago, publishing a book took a lot of time and a lot of rejections. You had to get a publishing company that would help you publish your book, and then hope that your book would sell and you would earn some portion of a sell. But thanks to eBooks, all you have to do is write something people require to read and get it published. If you have been needing a sign to start writing that book you have always dreamed of, this is it.

Dropshipping

Dropshipping is a way to sell products without ever needing inventory. How it works is someone places an order through your website, and once their order is complete, you order the product from a third-party site. The third-party will send the product to the customer and say it is from you. If this sounds interesting to you, then the site you want to get started at is Shopify. It is known for its dropshipping and easy to build websites.

Consulting

Another great to make money online is consulting. If you are an expert in a field or know more than the average person, it is the perfect job for you. Companies hire consultants to help them solve a problem, or they might know how to do it but don’t have the time or resources to do it. Even if you don’t have a skill or expertise right now for a field, consider finding something that is in high demand and learn as much as you can about it and then put yourself out there. Clarity is a good site to find consulting work.

Best ways to make money online 2020

Web Designing

While this could fall under freelancing, this is something that I feel should have a spot of its own. Web designing has become a high demand product. It doesn’t matter whether you choose to take the freelancing path or the traditional path; both are great options. You will want to have your own site to help show your talents, but think about putting yourself out there on the top freelancing sites as well. If you don’t know how or want to learn, there are unlimited options to choose from when it comes to learning how.

Peer to Peer

If you have taken out a loan and had to pay it back, you know that banks are making pretty decent money off of you. Wouldn’t it be nice if you could make money like that? Well, good news, you can make money by lending it. Peer to Peer lending has become popular in recent years. There are many choices for Peer-to-Peer lending, but the best two options are; Lending Club and Prosper. You will have to double-check to make sure the one you choose is allowed in your state.

Sell your photos

Do you have a camera? Good, your halfway there to make money online selling your photos. The two great sites to sell your photos are ShutterStock and iStockPhoto. This method is a great way to create passive income since you make money every time your photo used. If you want to take it a step further, market yourself to do weeding, engagement, or any other life events. While that isn’t specifically online, it is still a great way to make some extra money.

Etsy

Do you have an artistic side that just needs to be expressed, but find it hard to express yourself since you also have to pay bills? Then look no further than Etsy. Similar to Shopify, but Etsy is for handmade, vintage, or craft supplies. It is a place made by creative people for creative people. If you are already getting a lot of compliments or people asking for some of your art, then why not market it?

Social Media

Have you ever thought about having thousands of followers on Instagram or Twitter or create a popular Facebook page? Why not do it, and why not make some extra cash from it? Companies are continually promoting their new products on social media to spread the word about their product. Why shouldn’t you tape into that market too?

Youtube

If you aren’t comfortable with writing a blog, then Youtube might be the best choice for you. All you have to do is create a channel and began uploading videos. Once you have enough views and subscribers, you can start monetizing your channel. Make sure to pick the right niche, and don’t try to reinvent the wheel, instead find out what the successful YouTubers in your niche are doing and do what they are doing. Then once you have an idea of how to do it well, do something that sets you apart from the competition.

Podcasting

If being in front of a camera makes you uncomfortable or you simply don’t like it, then you are in luck, welcome to the world of podcasting. It doesn’t have to be complicated. All you need is a microphone, laptop, and free recording software. The most straightforward way to make money is by sponsorships, but there are plenty of different ways to monetize it.

Completing Survey

You bring in a decent amount of side income by taking online surveys. Though, don’t expect to be making bank from this. The majority of sites aren’t going to pay more than a couple of dollars for each survey you complete. The most popular site for this is Swagbucks.

Create an online course

If you want to go a step further than Ebook or help bring more profits to your blog, creating a course is the right way to go. Creating an online course can be a great way to generate passive income. If you don’t have a site, but want to create an online course, there is an excellent choice for you too. Udemy is one of the most popular online course sites out there. They have thousands of courses on about every subject imaginable.

Best ways to make money online

Online Stock trading

If you have a good understanding of stocks or have always wanted to learn, now would be an excellent time to learn. Stock trading is different from investing since you are only keeping the stock from a couple of days to months but never more than a year. If you are just starting and what to practice trading beforehand, check Invstr and use their practice portfolio. That will help get your feet wet and better understand what your doing.

Online Tutor

You used to be limited to how many students you could tutor or where you could tutor. However, thanks to the internet that has changed forever. You can now tutor from anywhere in the world. You might want to consider dusting off your old textbooks and start reviewing them. What you charge will depend on your experience and the subject you are teaching. Consider using sites like Tutor.com or Care.com. You could also go down to local schools and community centers to advertise your services.

Virtual Assistant

Virtual assistants are business administrative support. Some of the major work could include phone calls, email, research, data entry, bookkeeping, marketing, and the list goes on and on. You can either join a company, post on a freelance site, or start your own Virtual Assistant business. All three are great opportunities. Figure out what you would best at or be most interested in learning.

Investing

Investing is very similar to trading, but instead of only keeping your stock for a short amount of time, you are investing for the long run. The best person to think of when thinking about investing is Warren Buffet. There is no shortage of platforms you could use to start investing. Consider checking out the top investing apps for 2020.

Become a Translator or Interpreter

Do you speak another language? If so, then you have hit the jackpot of in-demand skills. With all things considered, people have transitioned to virtual meetings being the new norm. You can find job postings or freelance jobs that need someone to translate another language. Popular sites to find such work are Gengo and Smartling are great places to start.

Transcriber

If you have a knack for typing, then this is one of the easiest ways to earn some extra cash. You are often paid by the audio hour, so the faster you can transcribe audio recordings, the more you make. The average transcriber can type 75 to 100 words per minute. If this does interest, you check out Rev, one of the top places for transcriber work.

Conclusion

There is an insane amount of ways to make money online. This article only scratches the surface of ways you can make money. If you have a hobby or skill, you can bet you can make money using it somehow. You sometimes just have to be a little creative when it comes to your profit. However, if there is one thing we have learned from this pandemic is that you can’t rely solely on your job to provide for yourself. The only person you can rely on is yourself.

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Beginners guide to budgeting

Learn how to create a budget (beginners guide)

Beginners Guide To Budgeting 

It’s hard to build a house without some type of blueprints. In fact, a builder will take time to plan every single detail when building that house and making changes when necessary. That’s exactly what a budget is, but it can be hard to create one if you have never done it before. However, if you think of a budget only as a blueprint you miss out on using it to its full potential. A budget can also be compared to a sword and shield from your greatest enemy, Debt. A budget will help protect you from taking on more unnecessary debt and at the same time help you to defeat the debt you already have. But like any great warrior you have to be trained on how to use your sword and shield and trained on how to build your castle so that you will be safe for years to come. By reading this you will hopefully get a running start on creating your first budget.

Set a goal

It is hard to plan a trip when you don’t have a destination in mind. Same with a budget, figure out what your goals are for it. Are you wanting to pay off your debt, save more, and have extra money to invest? It doesn’t matter, but you need to figure out your financial goal at the very start. Understand over time this goal will change, because over time your needs will change as will your desires and that’s ok.

There are two types of goals you should set short term and long term goals. Short term goals should be things like paying off any debts you might have as quickly as possible and long term might be saving money for an emergency fund and for retirement. Figure your goals out and start getting to work so that you can reach them as soon as possible.

Figure out your income

Now, this part is pretty simple, but don’t worry I’ll add a twist. If you are working on salary it’s pretty easy to figure out how much you’ll bring home a month, but hour to hour could be a little more difficult, and don’t worry. So you will have to estimate at the start of each month and then figure out what the actual amount is to get an accurate idea of what happened that month with your expense. By doing so you can better prepare for the future.

As for that twist I was talking about, figure out where your passive income or extra income is coming from. Understanding passive income is money that is working for you and making money for you while you are sleeping. In today’s world, this is something important to learn. Now while, I won’t be writing about how to make passive income in this article, understand it is something you will want to learn and get, and once you get it you will become addicted to it.

As for extra income, that is money you made by doing a side hustle or random other jobs. That is just as important as the passive, money from this will help you both reach your financial goals and personal goals quicker. More on this to come in another blog post, but I will leave you with this. Ask yourself what something you love to do and ask how can you make money off that?

Beginners guide to budgeting

Figure out your expense

There are two types of expenses fixed and variable. Fixed ones are the ones that you will have to pay no matter what, while variable not so much. For example, fixed would be your house debt, while variables might be going out to eat on a Saturday night. It’s important to understand the difference if you are going to create a budget.

The first thing you want to do is figure out your fixed expenses and see what is leftover and then begin to factor in your variable. Now variables are often nonessential things, like movies, going out to eat, or snacks. It’s in these areas you want to figure out what you can cut back on and set an amount you’ll spend on each thing a month. Whatever you do try to stick to the amount you budgeted on, if you can do that, then you are well on your way to get your financial life under control. 90% of getting your finances under control is mental, and if you can win in your mind, you can win at it all.

Another thing to note, it will be important to record all your expenses throughout your month so you have an accurate idea of what all your spending. There are numerous ways you could go about doing that. You can keep receipts, write them down in your phone, or download an app that will keep track of them for you.

Make Mistakes

Be willing to make mistakes. We all make mistakes at some point in life and making a budget is no different. The first few months of your new budget will probably be a complete disaster and that’s ok. You might have budgeted too little for groceries or too much for the movies. You might begin to realize that you are spending too much in one area and need to make cuts to that area. It’s all about trial and error and you probably won’t start getting it right until month 3 or 4. The only way you fail is by giving up.

When you do feel like giving up just remember why you started this journey. What was your goal at the start of this whole thing and are you willing to give up on that goal or dream you have for your life just because things got hard? Don’t give up, you’ve come too far and deserve a better life than that of one that lives paycheck to paycheck.

Pick the type of budget you will do

There are multiple choices you can choose from, you just need to figure out the one that works best for you.

The Envelope System

This type of budgeting system is cash-based which is great for those of you who are known to overspend every month. Since you are often to spend more using a debit or credit card, this system makes you put cash into pre-labeled envelopes with the designated amount you are to spend on that category for the month.

Beginners guide to budgeting

The 50/20/30 Method

This is geared towards those who can be a little more flexible in their finances. It is for those who can pay all their bills with 50% of their income. The 20% goes towards savings or debt reduction or a little bit of both. While 30% goes to personal spending.

60/20/20 Method

Similar to that of the last one, the only real difference is that 60% of your income goes to paying the bills. While the other 20/20 go to savings and personal things.

Zero Based Budget

This one is for those who are well disciplined or want to get complete control of their financial life. The Zero-Based Budget forces you to spend every dollar you make. Not a single dollar is misplaced. You will never ask where your money is going. This is one of the best budgets to get an idea where every single dollar is going and can help you knock down your debt quicker and save up quicker. If you have done everything right, then you should have zero dollars left at the end of the month. Don’t misunderstand, this does not mean you spent all your money. Rather, you have put your saving money in your saving account and paid your expenses, and did not take on any additional debt.

Pay yourself first budget.

This is for those of you who want to prioritize saving over everything else, more than paying bills, expenses. Don’t worry in this budget you will pay everything you need to but your priorities are set on something else, something greater.

Budgeting Apps

If you aren’t the most organized person, don’t worry there is still hope for you. Thanks to technology, there are plenty of budget apps you can choose from. Just search budgeting in your app store and you will find hundreds of choices. Click here to learn the top 2020 budgeting apps.

Stay committed

Above all else, the most important step to creating your budget is staying committed. You won’t get very far if you aren’t committed 100%. Things will be tough, and you will have to say no to going out sometimes, but remember why you started this journey. Dave Ramsey once said, “live like no one else, so that later you can live like no one else”. This is a long-term game, and you have to remember that. Just think how free you will be once you pay off all your debt. It might seem impossible now but know there have been others before you who thought the same thing and were in worse situations who did it. So, what is stopping you from doing it too? The only one holding you back is you. I’ll end this by just asking will join me and millions of others on this journey of a lifetime?

Hopefully, this has helped you better understand what a budget is and how to go about creating one. But don’t worry we aren’t going to leave you to fight all alone. You’ll find at the bottom of this article an excel of a budget created by Helpful Jack himself. It follows the pay yourself first method, to get you saving money quickly. Pay yourself first, so you can start investing or paying off your debt quicker than you could have ever imagined.

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Beginners Guide to 401(k)

401(k) Basics: What You Need to Know

Intro

You should never invest in anything you don’t understand. And you definitely need to be investing if you plan to retire. Thankfully you don’t need a finance degree to understand the basics of a 401(k) and begin building a strong retirement account.

Let’s dig in so you can start building up your 401(k) today.

A 401(k) is an Employer-Sponsored Retirement Account

The first thing to know about your 401(k) is that it is an employer-sponsored account. This means that your employer offers you, their employee, an account. Don’t worry, the account and everything you personally contribute will always belong entirely to you. Your company cannot withdraw or allocate any of the funds you deposited into your account. A 401(k) is simply a benefit your company offers you as their employee – like insurance, discounts, free training, or education credits.

As an added benefit, many employers offer to match your 401(k) contributions in some way.  We love matching because it’s free money that will grow for you until you retire. Who doesn’t like free, interest-accruing money?!

Some employers offer to match up to a certain percentage of your annual salary. Others offer to match up to a certain dollar amount. Each company is able to determine their matching guidelines, as long as they don’t exceed the IRS established maximum contributions in any given year.

Remember though, not all employers offer 401(k) matching. Be sure to check with your HR department or manager to determine what kind of matching opportunities are available to you.

Vesting Schedules

While your contributions to your 401(k) belong entirely and fully to you, your company’s contributions to your account may not. Companies often have what is called a “vesting schedule.”  A vesting schedule refers to the amount of time an employee needs to have with the company before a company’s investments into the employee’s 401(k) account belongs entirely to the employee.

This may happen gradually, or entirely on a specific date. Again, each company is able to set these guidelines for themselves. This creates an incentive for an employee to stay with an employer, to make sure they capitalize fully on their employer contributions to their 401(k).

You can learn more about vesting schedules here.

Contribution Limits

There are limits to how much both you and your employer can contribute to a 401(k) in any given year.  In 2020 the employee contribution cap is $19,500. If you’re over 50 you may contribute an additional $6,500 in “catch-up contributions.”

The IRS sets the limit for employer contributions every year as well. In 2020, your employer may contribute an additional $57,000 to your 401(k). When your employer contributions reach $57,000, no additional funds may be added to your 401(k) in that year.

The much higher cap on employer contributions is one of the main reasons you should take advantage of your employer match. You can potentially almost triple your annual contribution for free every year if your employer maxes out their contributions to your account.

401(k) Tax Benefits

A 401(k) is a tax-deferred account, meaning you receive immediate tax benefits on all your 401(k) contributions. Every dollar you contribute to your 401(k) is tax-deductible. That means that every dollar you contribute is one less dollar you must pay taxes on in that year.

For example, suppose you made $45,000 this year and contributed $10,000 to your 401(k). You would be responsible to pay taxes on only $35,000. That being said, you will eventually have to pay taxes on your 401(k) investments. Once you retire and begin pulling from the account, you will be taxed on your withdrawn-earnings.

401(k) guide

Why 401(k) Investments are Important

While the tax-deductions are nice, they’re not the real reason we love 401(k) investments. The real reason you want to be investing in your 401(k) as much as possible is a little thing called compound interest.


When you invest in your 401(k) you begin to make returns on your investments. Those returns are invested back into the market and then they begin to make interest as well. This process continues to repeat itself as long as your 401(k) has a balance. This means, assuming your investments make a return, the more you invest and the earlier you invest, the more you stand to make.

You can learn more about compound interest and how it works by checking out this blog here.

Your 401(k) Puts You In Charge of Your Retirement Future

One of the things I’m most passionate about is putting you in control of your financial situation – present and future. A 401(k) puts you in charge of your financial future. It allows you to build wealth to prepare for your eventual retirement. Social safety nets may or may not be there when it comes time for you to retire. Banking on something that you have no control over puts your financial future at risk.

Conclusion

Investing in your 401(k) is one of the easiest ways to take control of your financial future and to build yourself a strong retirement. It’s not complicated and the benefits available to you, especially if you’re able to maximize your investments from an early age, are incredible. Your 401(k) puts compound interest to work for you! 

Hopefully, you’re feeling informed and inspired and take steps today to begin making the most of your employer offered 401(k) account.

 

If so, let me know on social media!
I’d love to hear from you and to learn how this content helped you.

Thank you!

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Growing my wealth

How to Save Money and Maximize Your Financial Growth

Intro

The goal of managing your personal finances is to make sure the flow of your money is aligned with your core values and vision for your life. It’s really important that you clearly understand what you’re trying to accomplish in your financial life before you start making cuts to your budget.

A general idea that “paying off some debt” or “putting something into retirement” won’t be enough to keep you consistent with your budget. You need a clear why driving all your efforts. Your why will empower you to hang in there when temptation comes your way.

Take a minute to write down exactly why you’re cutting your budget.

Got it? Good. Let’s get started.Financial growth

Divide and Conquer

In order to determine what can stay and what needs to go, you need to know where your money is going every month. It’s hard to know what to cut if you don’t know where your money is going. Your first step will be to print out or pull up your account transaction info for the last 30 days.

Gather all your transaction data from your bank accounts and any active credit cards. Then list out every expense for the last 30 days. You can skip things like one time purchases or irregular appointments. We want to get a full picture of where your money typically goes.

Categorize Essential vs Non-Essential

Once you’re sure your list of expenses is complete, you can begin to sort which expenses are essentials and which are not. So what do we mean by essential? An essential would be anything you need to live. Essentials include things like groceries, utilities, minimum payments on your debts, rent, necessary clothing purchases, phone, internet, and transportation.

Non-essentials include things like entertainment, eating out, coffee from your favorite shop, snacks, and hobby expenses. Before you start protesting that you need to eat out to stay sane, I hear you. We’re not talking about cutting all non-essentials yet, but we’re trying to see what we need vs what we want. This process lets us see how much of our budget is being eaten up by wants instead of needs. Until we see those numbers, it’s hard for us to be objective about what we need and what we really want.

Before we move on to cutting anything, take a minute to see what non-essentials are killing your budget. Ask yourself if you’d rather make progress on your dreams, or have all those non-essential purchases.

Cut the Obvious Non-Essentials First

Before you sacrifice those non-essentials that bring you joy, let’s hone in on the easy to cut things. That subscription-based service you forgot you were even paying for? Yeah, that’s got to go. Maybe you’re paying for a massive cable package or multiple streaming services. Pick one or two services you use the most and cancel the others. Maybe consider making coffee at home instead of picking it up on your way into work.

Once you remove those things, add up those cost savings. Look how much you were spending on things that really don’t add much value to your life at all. You basically just got a raise, right? Pretty cool.

If you still feel the need or desire to cut more, here are some of our best suggestions.

Above and Beyond

If after making the above cuts you still need or want to make a bigger dent in your goals, we have a few suggestions for you. The first of which is to consider getting a side hustle. We covered several side hustles almost anyone can start today in another article. Check that out and see if you can increase your income and gain momentum that way. But if you’re already working as much as you can and you still want to make some cuts, here are some more steps you can take to really tighten your budget.

 

Shop for some new home and/or car insurance with an independent agent.

Independent agents are able to compare the rates of all the companies and get you the best deal possible, based on your insurance needs. Loyalty to a company use to be rewarded with discounts, but that’s not always the case these days.

Net worth

Change your cable, internet, and phone plans

Make sure there’s no fluff in your cable, internet, or phone plans. You could potentially save tens or even hundreds of dollars depending on your current package just by making a few phone calls.

Take up meal planning

A lot of us end up throwing out hundreds or thousands of dollars worth of spoiled food every year because we went into the grocery store without a plan. By making a detailed meal plan, you can know exactly what you need to feed everyone in your house. Someone I know saved over $200/mo by sitting down and creating a detailed meal plan every month.

One Person’s Trash is Another’s Treasure.

When people think of tightening their budgets, they rarely think about selling things to get a little momentum towards their goal. We often have numerous possessions that add little to no value to our lives that others would gladly pay for. Consider selling anything valuable that you’ve not used in the last 1-3 months. This can include everything from expensive things like phones, video games & consoles, computers, and unused electronics to name brand clothing, shoes, tools, or hobby related supplies.

Don’t waste your time though.

Set a specific value threshold on everything you consider selling. You want to make sure you’re respecting your time. A good threshold might be a minimum of $10-20 dollars. Once you set your threshold, comb your apartment or house looking for anything that you haven’t used in the last 1-3 months. It’s not uncommon for people to find $250 worth of things collecting dust in their homes.

Create a budget that works for you

Ultimately you’re the one who has to live with your budget. Sometimes in our enthusiasm, we create ambitious plans that we can’t stick to. If you budget too tightly, you might find yourself facing incredible temptation to break out of the budget and buy something. If this sounds like you, consider loosening your budget a little bit. You can incorporate planned for, measured treats along the way. 

It’s YOUR budget.

If you’re a real coffee snob, consider adding a 12 oz bag of your favorite, high-quality beans to your monthly budget so that you’re not only drinking the discount beans. Or if eating out a couple of times a month as a reward will keep you motivated, budget for your favorite meals and drinks so that you have controlled expenses vs. spontaneous, unaccounted for expenses.

Remember: The best budget is the one that aligns with your values AND that you can stick to.

What are your biggest cost-saving tips? Let us know on social media!
We’d love to hear what works for you.

Side hustles

3 Flexible Side Hustles Almost Anyone Can Start Today

Intro

Whether you’re paying off debt, saving for a downpayment on a home, or looking to throw more into your investment account, every penny counts. It’s all part of the wealth-building process. One of the best ways to increase your wealth-building potential is to pick up a side hustle. A consistent side hustle can add hundreds of dollars to your monthly budget.

In this article, we’ll explore 3 flexible side hustles almost anyone can do today.

Side Hustle Idea #1: Become a Delivery Driver

Over the last few years, many new companies have been created around the idea of delivering all kinds of things to people’s doorsteps. These companies have decided to offer flexible, pick up schedules to contractors to carry out these deliveries as opposed to hiring a team of full-time employees to handle the deliveries. That’s where you come in! 

Working as a delivery driver is one of the most flexible side gigs out there. As long as you have a working vehicle and car insurance this idea can work for you. Depending on your willingness and availability you can even stack these gigs together to maximize your earning potential. Many people work independently as delivery drivers using this method.

So who can you work for? We’ll focus on national companies, but do your own local research to see what other options you have in your area. To learn more about each of these companies, click on their link, and check out their website.

Grocery Delivery
Instacart
Shipt

Restaurant Delivery
Door Dash
Grub Hub
Uber Eats

Packages
Amazon Flex

Side Hustle Idea #2: Become a Freelancer 

Take your full-time job and leverage it as a freelancer. 

Whether you’re a carpenter or a database programmer, someone out there is looking for someone with your skills to help them with a project. Even if you’re relatively inexperienced, there’s often someone willing to pay a fair price looking to offload some grunt work to a novice. You could be landing jobs by the end of the day as all of these websites offer simple, quick, and easy profile creation processes.

Extra Money

Able to work remotely?

If your work is technology-based, and you’re able to do it remotely, we suggest you check our websites like Upwork & Fiverr. Both of these sites work to bring freelancers and those people & companies with needs together. But each of them approaches that process differently.

Upwork

Upwork serves as a platform where potential clients post their job complete with a description, expected timeframe for completion, and usually a budget. This allows you, as the freelancer, to decide whether or not a job fits within your schedule before you apply. Companies can search the website for freelancers, but most often freelancers search for clients using their very thorough search feature.

Upwork also serves as a go-between for payment, offering protections for both the freelancer and the hiring client. Anyone who has worked as a freelancer knows how frustrating it can be to complete a job and to be told they will be paid “soon.” With Upwork, once a milestone is reached, or hours are submitted, Upwork handles the rest – ensuring clients pay for your work.

Of course, this process comes with fees which the freelancer pays. These fees are a percentage of the overall project. The exact percentage depends on how frequently you do business with a client. The more you work with a client through Upwork, the lower the percentage becomes.

Learn more about Upwork and get started here.

Flexible Side Hustles

Fiverr

While Upwork is primarily focused on presenting potential jobs to freelancers, Fiverr presents potential freelancers to clients. On Fiverr, freelancers list out a number of packages they offer for a variety of prices. Clients then search Fiverr, looking for packages from freelancers that fit their needs. Having a complete and professional package, priced competitively is the best way to stand out on Fiverr.

Like Upwork, Fiverr will also handle all of the financial aspects for both the client and the freelancer. However, unlike Upwork, Fiverr charges the freelancer a fixed rate of 20% of the total price of the package. There is no scaling rate on Fiverr.

The nice thing about Fiverr is that once you do the hard work of building out high-quality packages, clients approach YOU with work. If you don’t want to spend any time submitting proposals and chasing down leads, Fiverr might be the better option for you.

To learn more about Fiverr and to get started, check out their website.

Are you more hands-on?

If you’re more of a hands-on person, don’t worry there are websites that can help you find your groove too!

TaskRabbit

TaskRabbit is the most popular website of its kind. On TaskRabbit, people in your community can upload jobs ranging from cleaning someone’s kitchen to complex plumbing jobs. So whether you’re relatively new to your trade, or an expert with years of experience, there are jobs waiting for your expertise.

Ask a “Tasker” (the name given to freelancers on TaskRabbit) you get to set your hourly rate. Just like the other two services mentioned in this article, TaskRabbit will take a percentage of your fees as commission for matching you with a client in need of your services. That being said, TaskRabbit has a great reputation and many handy people use the service as their full-time income source.

Learn more about TaskRabbit on their website and get started today.

Ask Friends and Family

There’s no shame in the hustle! Be sure to let friends and family know you’re offering your services. You never know who might need a hand at home or in their office. People really prefer to work with freelancers and handymen & women they know and the best clients come from word of mouth marketing!

Side Hustle Idea #3: Become a Content Creator

Get paid to create content about the things you enjoy most!

While this side hustle doesn’t come with an immediate payoff, the idea is that over the long haul being a content creator can generate passive income from your library of pre-existing content. And while the pay may not be great at first, the sky is the limit to your potential earned income.

Whether you create video content on YouTube or Twitch, start a blog on WordPress, or work to become an influence on social media channels like Twitter, Facebook, or Instagram the opportunity is out there if you’re willing to put in the work. Thousands of people make a full-time living talking about and sharing their favorite things. Why not join them?

No Excuses – Start Today!

So there you have it! Regardless of your area of expertise or skill level, you could be making $200-$300 extra this month. Who knows, you might even replace your current job with the job of your dreams, working for yourself. The sky really is the limit if you’re willing to learn and put in the work.

Of these three side hustles, which one is your favorite?
Do you have any experience working with any of these companies?
If so, let us know on social. We’d love to know how much you’ve made and how that’s helped you accomplish your money goals!