If you’re looking to save money for a short, intermediate or long-term goal, such as retirement, you need to find a safe place to park it, earn interest, and have fairly access to your money.
But, how do you find such a safe place?
The good news is that there are several places to put your hard-earned savings.
Besides a savings account, three of the most common accounts available to you are mutual funds, index funds and certificate of deposits.
We will discuss the advantages and disadvantages of these short and long-term investments below.
Before we go in detail with the differences between these accounts, you might be wondering about mutual fund.
You may have heard a lot about certificate of deposits, but you may not know a lot about mutual funds.
But one thing you should know is that the question of ‘what is a mutual fund?’ is searched online more than 16,000 each month.
So people are actively looking for the definition. This is what a mutual fund is:
What is a mutual fund?
A mutual fund is an investment vehicle, where investors pool their money together to buy shares.
A professional manager manages the fund. They invest the money for you in securities such as stocks and bonds.
However, a mutual fund differs from an index fund, a certificate of deposit, or Vanguard CDs.
CDs are safer than mutual funds and index funds, because mutual funds and index funds invest in stocks and bonds. One type of mutual fund, money market fund, invests in money and is quite safe.
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Nonetheless, mutual funds and index funds in general are safe for various reasons (more on this below).
One thing for sure is that in most cases, you can expect a higher return on your investment with a mutual fund and index fund than a certificate of deposit.
However, be ready to come up with a bigger minimum deposit with a mutual fund and index fund.
Mutual funds vs index funds vs certificate of deposits: what’s the difference?
All of these accounts are safe comparing to investing in individual stocks. However, there are key differences between mutual funds, index funds and certificate of deposits.
First of all, most mutual funds and index funds invest in stocks or bonds — with the exception of money market funds, which invest in “money.”
Even though there is a possibility that shares in a mutual fund and index fund can drop significantly due to volatility of the stock market, mutual funds and index funds return a much higher yield than a certificate of deposit.
However, index funds deliver a better return than mutual funds.
Index funds, unlike mutual funds, are managed by a computer. An index fund simply invests to match the performance of an index such as the Standard & Poor’s 500 index of 500 large U.S. company stocks.
So, they stay invested and thus deliver better returns.
Unlike certificate of deposits, mutual funds and index funds do not require you to keep money for a specific period of time.
With a mutual fund, just like an index fund, you are free to withdraw your money at anytime you want. In other words, there is no penalty for selling your share in a mutual funds.
However, CDs have something that mutual funds and index funds lack. They are insured by the federal government (FDIC insurance) for up to $250,000. That means your money is always protected.
Having said, mutual funds that invests in stocks or bonds are still safe due to their diversification.
Mutual funds are safe, because they invest in dozens of stocks (from large, mid, and small size companies) across different and multiple industries.
Advantages and disadvantages of mutual funds vs index funds vs CDs
To understand better how these products can grow your money, it’s important to know their pros and cons. Here they are:
Generally, mutual funds offer higher returns than certificate of deposit.
Higher returns: Compared with CDs and savings account, expect a a higher return on your money.
Accessibility: You can easily sell your shares, either via your fund company’s website online or via their toll-free number. Also, most money market funds offer check-writing privileges.
Diversification: while most mutual funds can be risky (especially those that invest in stocks), their diversification make them a safer investment. Most mutual funds own stocks or bonds from dozens of companies across multiple industries. So, if one stock is not doing well, another stock can balance it out.
Less safe: Unlike CDs which are FDIC insured, mutual funds are not. If you want to make sure that you don’t lose your money because you want it in the short term, stick with money market funds. Although, they too are not federally insured, they are considered very safe.
Initial investment minimum: Most mutual funds have high minimum investment requirements compared with saving accounts and certificate of deposits. Many mutual funds have minimums of $3,000 or more.
Index funds, unlike mutual funds, are passive. That means they are managed by a computer and not actively managed by a fund manager.
Index funds seek to track the performance of a particular index, such as the Standard & Poorâs 500 index of 500 large U.S. company stocks or the CRSP US Small Cap Index.
Index funds donât jump around; they stayed invested in the market.
Easy to purchase: Just like mutual funds, you can buy index funds through fund companies like Vanguard and Fidelity.
Expense is low: Like mutual funds, index funds have low-cost, which is usually less than 1% annually. This lower operating expenses help boost your returns.
Diversification: Another benefit of index funds is that they are diversified. Like mutual funds, they invest in multiple companies, thus spreading out the risk.
Tax-friendlier: When you invest in index funds in non-retirement accounts, you are taxed less than you would in mutual funds.
Because mutual fund managers are actively buying and selling in an attempt to increase returns, that increase a fund’s taxable capital gains distributions. Index funds are traded less frequently.
One of the downside with index funds, is that they wonât outperform the market they track.
Certificate of Deposit
If you need safety and a competitive yield on your money, CD is a good place for you. But you will need to agree to leave a certain amount of money with a bank for a specific period of time.
If you withdraw your money before the agreed period of time, you will end up paying a penalty.
Depending on the length of the CD and the amount of money you put in, you might earn a higher return than a regular savings account, but not a mutual fund.
Safety: CDs like savings accounts are federally insured up to $250,000. That means your money is protected.
Interest rate: CDs pay a higher interest rate than savings account.
No fees: Unless you don’t withdraw your money before maturity, there is no fee.
Low accessibility: When you invest in a CD, the money is not easily accessible. You can withdraw the money, but a penalty will apply.
Penalty: if you withdraw your money before it becomes “due” or before it “matures,” then you will pay a penalty.
However, there are some banks that offer CDs with no penalty. But these CDs usually come with lower APYs.
Who should benefits from mutual funds, index funds and CDs?
Choosing among a mutual fund, index fund, and CDs depend on your goals (whether short-term and long term) and your current financial situation.
If you don’t have a lot of money, it might make sense to start with a CD, since some CDs have minimum deposit requirement as low as $1000 or less.
A CD investment can be used as short-term investment as well.
If you’re thinking of buying a house in 2 years and want the money for the down payment, a CD is a good choice.
But if you’re thinking of tapping into your money at any time, then a savings account can be a better option.
On the other hand, if you want to save for retirement, mutual funds and index funds are good long-term investments.
These investment vehicles are the most aggressive because they invest in stocks and bonds. More specifically, they are good for you if:
don’t expect to tap your money for 5 years or more;
you want to maximize your income and are willing to tolerate the stock market volatility.
How to use mutual funds, index funds, and CDs for your saving goals
These accounts can help you save money for different type of goals.
If you invest money for long-term goals, such as retirement, index funds and mutual funds are great choices.
So, don’t use these funds to invest money you plan to use in the next 5 years or so, because the stock market can drop significantly and you can lose your money.
For short-term goals, consider CDs. As mentioned, CDs are a safe, higher-yielding alternative to savings accounts.
Best Index Funds
So what are the best index funds?
No doubt, Vanguard has some of the best index funds. Among them is the Vanguard S&P 500 Index Admiral (VFIAX).
This fund invest in 500 of largest U.S. companies with a few a midsize stocks. Some of the big companies in this index fund includes Apple (AAPL), Microsoft (MSFT), and Google/Alphabet (GOOGL).
Moreover, this Vanguard index fund has a pretty low cost, (0.04%) if not the lowest of all the index funds.
Plus, the initial minimum investment is also low ($3,000).
So if youâre looking for an index fund that maintains low operating expenses while enjoying a good rate of return, the Vanguard S&P 500 Index Admiral is for you.
Best Mutual Funds
We are big fan of Vanguard Mutual funds. The reason is simply because they are of high quality, reasonably cheap, professionally managed and are cost-efficient.
So, if you’re in the market for the best Vanguard funds, you have many options to choose from. One is the Vanguard Total Stock Market Admiral (VTSAX).
This Vanguard fund gives long term investors a broad exposure to the entire US equity market, including large, mid, and small cap growth stocks.
Some of the largest stocks include Apple, Facebook, Johnson And Johnson, Alphabet, Berkshire Hathaway, etc…
Note this Vanguard fund invests exclusively in stock. So itâs the most aggressive Vanguard fund around. You need a minimum of $3000 to invest in this fund. The expenses are 0.04%, which is extremely low.
Vanguard CDs are the best out there. But you should know that Vanguard only offers brokered CDs.
Banks issue brokered CDs. Banks sell them in bulk to brokerage firms such as Vanguard and Fidelity.
Vanguard CDs are some of the best, because they offer higher rates than most Bank CDs.
In conclusion, there are several options to choose from when it comes to finding a safe place to save and invest your hard-earned money.
Speak with the Right Financial Advisor
If you have questions beyond investing in index funds, mutual funds and CDs, you can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc).
Find one who meets your needs with SmartAssetâs free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.
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The post Grow Your Money: Mutual Funds, Index Funds, & CDs appeared first on GrowthRapidly.
For individuals who are young and in good health, shopping for life insurance is often easy and stress-free. Most of the time, young people only need to decide how much coverage they want and apply for a free quote online. Some companies that market term life insurance coverage even let qualified applicants start their policies without a medical exam.
Once you have reached the age of 50, however, your options for life insurance may not be quite so robust. You may have to buy a lower amount of coverage in order to secure a monthly premium you can afford, and itâs more likely youâll need to undergo a medical exam and face increased scrutiny over your life insurance application.
Fortunately, you can get life insurance in your 50âs and even in your 60âs. Youâll just need to adjust your expectations, and you should be willing to shop around to ensure youâre getting the most coverage for a price you can afford.
Unique Challenges for Individuals Over 50 Buying Life Insurance
As you start shopping for a life insurance policy, youâll probably notice a few factors that are working against you. These factors arenât your fault, but they still affect your ability to qualify for life insurance coverage or affordable monthly premiums.
Your Age: Where life insurance can be downright cheap when youâre young and healthy, policies only get more expensive as you age. Once youâve surpassed the age of 50, the price youâll pay for a meaningful amount of coverage can easily balloon. This is why itâs more important than ever to spend time shopping around and comparing life insurance quotes.
Your Health: The older you are, the more likely you will have acquired a chronic health condition that can make getting life insurance coverage a challenge. Youâll need to answer health questions when you apply for a life insurance policy, and the answers you provide could set off alarm bells with the life insurance provider or bar you from purchasing a policy at all.
Policy Length: Another issue when youâre older is the term of coverage you can qualify for and purchase. A 30-year term policy will likely be fairly expensive if youâre already 55, for example, whereas a 10-year term policy that only provides a decade of coverage will likely be more affordable. Many older individuals opt to buy permanent coverage that lasts a lifetime, yet permanent coverage like whole life or universal life can also be incredibly expensive.
How and Where to Find a Life Insurance Policy if Youâre Over the Age of 50
Regardless of the challenges youâll face while buying life insurance over the age of 50, you can still purchase this important coverage. With that being said, youâll never know which insurance company is best unless you compare the best life insurance companies, such as Banner Life Rates.
When working with only one insurer, you are locked into just that insurance companyâs underwriting requirements â as well as that insurerâs prices. And, while it may sound strange, not all life insurance coverage is underwritten or priced identically.
For example, an applicant who applies to one insurance company may be accepted as a âstandardâ policyholder and charged an average premium rate, while he or she may be accepted only as a âsubstandardâ policyholder at another carrier and charged a higher rate of premium â even though they submitted the same answers to the questions on the application for coverage.
This is why it is essential to work with an expert in the insurance field that can submit your information to numerous insurance carriers. Just like when shopping for any other important item, itâs always best to compare prior to making your final determination.
This is where we come in. When shopping for insurance, we can help you compare dozens of plans and companies in a matter of minutes. This way, you can compare pricing and coverage amounts without having to apply with each individual insurer.
Regardless of your age or health, itâs important that you get the insurance coverage that your family will need. You can start comparing quotes from the best life insurance companies by clicking your state below.
No matter where exactly you are in your 50âs, we can definitely get a policy that meets your needs. We know that planning for your death is not a fun task, but itâs one of the most important things that you can do. You donât want to leave your family struggling to cover your final expenses at a time when they should be grieving and celebrating your life.
Do People Over the Age of 50 Still Need Life Insurance?
You may be wondering if people still need life insurance coverage once theyâre in their 50âs. After all, life insurance coverage is geared to people who need income replacement during their working years, as well as those with children and other dependents at home. By the age of 50, you should be winding down your working years, and itâs possible your kids have moved out to begin their adult lives. Why would you need life insurance at this point?
The thing is, consumers can easily need life insurance at any age, and this includes those who are over 50. Although your children may be grown and are no longer depending on your income for their living expenses and needs, there are numerous other reasons for having â or for keeping â this essential financial protection.
Some of the most important reasons can include:
Burial Insurance: Regardless of your age, youâll eventually need burial insurance to cover your final expenses. Today, the average cost of a funeral can easily exceed $10,000 when factoring in items such as the funeral service, burial plot, headstone, transportation, flowers, and a casket or urn. If there are final medical and hospice costs incurred, this could add significantly to the total.
Estate Taxes: Estate taxes are another potential area of concern for those who are over age 50. For those who are faced with having to pay estate tax upon death, this liability can erode up to 50% or more of a decedentâs assets. If there is no plan in place, such as life insurance proceeds, for paying these taxes, survivors could end up selling off other assets such as retirement investments or even precious family heirlooms in order to come up with the money. And unfortunately, when such assets are sold in this manner, they are often done so at far below market value.
Pension or Retirement Income Replacement: When a retiree dies, their pension may not continue on for their spouse. Buying a life insurance policy can ensure your spouse has some income to keep up with living expenses and enjoy life once youâre gone.
Business Succession: Life insurance can help business owners who are over age 50 to use as a business succession tool. Proceeds from a life insurance policy could be used to keep a company running while a replacement owner or partner is located, or while a suitable buyer for the business is found.
These are just a few of the reasons individuals over the age of 50 may want to purchase life insurance, but there are plenty of others. Just keep in mind that, no matter what age you are, itâs only natural to want to leave something behind. A life insurance policy can help you do exactly that, which is why consumers in nearly every age group purchase this important protection each year.
Which Type of Life Insurance is Best if Youâre Over the Age of 50?
When shopping for a life insurance policy at any age, itâs easy to become overwhelmed by all the options youâll find online. Before you commit to shopping for life insurance policies, you should know and understand how each type of coverage works.
Term Life Insurance
Term life insurance is sold for a certain length of time or a âterm,â which means that the policy will cover you for only a certain period before it expires. Most term policies are sold for 10 years, 15 years, 20 years, or 30 years. With a term life insurance policy, you are purchasing basic âno frillsâ coverage. This means that you are obtaining pure death benefit coverage without any cash value or savings component.
Even though the coverage on a cheap term life insurance policy runs out after a given period, these policies can be beneficial in certain situations. For example, term policies are often considered for âtemporaryâ needs such as providing protection during the length of a 15- or a 30-year mortgage balance. In other words, if an individual wanted to make sure that the balance of their home mortgage was paid off for his or her survivors in the event of death, they could purchase a term life policy for the same length of time in which they will have a remaining mortgage balance.
If a term life insurance policyholder wishes to continue their coverage upon the policyâs expiration, they will need to reapply at their current age and health condition. This will typically mean that the premium amount for the new coverage will be higher, and thatâs true even if the face amount of the policy remains the same. For many people, this is no problem because the premiums on term policies are much lower than the alternative options.
Related: How Much Does a Million Dollar Term Life Insurance Policy Cost?
Permanent Life Insurance
If you donât like the idea of your life insurance expiring, then go with a whole life insurance plan. Permanent life insurance plans never expire, but they are more expensive.
The money that accrues in a permanent life insurance policyâs cash value component can typically be borrowed or withdrawn by the policyholder for any need that he or she sees fit. This can provide the policyholder with additional funds for the down payment on a home, the purchase of a car, debt repayment, or even for supplemental retirement income in the future.
Although the premiums for permanent life insurance can be more expensive than premiums for a term policy, the amount of the premium on a permanent policy will typically be locked in for life. This means that the policyholder will not need to worry about his or her premiums increasing in the future â even if they get sick or wind up with a chronic health condition.
In addition to all of the other uses of life insurance for those who are over age 50, a permanent life insurance policy can also be used for the simple purpose of supplementing oneâs savings.
For example, a whole life insurance policy can help you to build up cash on a tax-deferred basis that can be drawn upon in the future in a number of different ways. Unlike money that is invested in the unpredictable stock market, funds that are inside of the cash value of a whole life insurance are provided with a guaranteed rate of growth. In addition, because of their tax-deferred nature, funds are allowed to compound over time with no tax due on the gain until the time they are withdrawn in the future.
This can provide not just safety, but also peace of mind in knowing that the principal is protected regardless of what is happening in the market, as well as in the economy overall. In addition, the death benefit on these life insurance plans is also tax-free to the named beneficiary (or beneficiaries). This means the money can be used by survivors for their financial needs, and all without having to hand over a portion of it to Uncle Sam.
While whole life is the most popular type of permanent life insurance coverage, you can also look into universal life insurance, variable life insurance, or even variable universal life. These niche policies tend to work better for consumers who have a specific financial goal, but they could work well for your needs depending on your situation.
Life Insurance with No Medical Exam
Many who have severe health issues may have to look into the option of no medical exam life insurance. This is often the only option for those who have been declined for life insurance in the past.
Each time an individual applies for life insurance coverage, the underlying insurer is essentially taking a risk on whether or not it will be required to pay out a claim. If the insurance carrier feels that the risk is too great, it will either charge the insured a higher rate of premium or it will deny the applicant for coverage altogether.
The good news is that people over 50 in the market for life insurance still have plenty of options â you just need to know where to look. You may assume that you wonât be able to get affordable coverage, but thatâs why we suggest that you look into a no medical exam plan from Haven Life to get your life insurance protection.
A healthy man who is 50-years-old can pay as little as less than $15 a month for $100,000 in term life insurance coverage, whereas a healthy 59-year-old can pay as little as $27 a month for the same policy. Even at the age of 59, a $400,000 policy can cost less than $100 a month. Note that these are non-smoker rates for a 10-year term policy.
If you have health conditions like cancer, heart disease, or diabetes while looking for life insurance, you can expect increased rates. Smoking will also increase the rates for life insurance for individuals who are ages 50 to 59.
The Bottom Line
At the end of the day, youâll never know how much you might need to pay for life insurance unless you shop around. And really, thatâs the main piece of advice I hope to impart on individuals ages 50 and older.
Purchasing life insurance coverage can be more challenging when youâre over the age
The post Life Insurance Over 50 appeared first on Good Financial CentsÂ®.
“Fixer Upper” fans will be in a tizzy to hear that Chip and Joanna Gaines have returned to TVâthis time to help friends renovate their first house on the premiere episode of the new Discovery+ show “First-Time Fixer.”
In the premiere episode âSalt Lake City Condo,â Chip and Jo head to Salt Lake City to give old-time pals Brittany Baker and Annie Hawkins tips on their first flip: a $305,000 midcentury condo. Baker and Hawkins have a renovation budget of only $50,000, so they’ll need a lot of help from the Gaineses to get this project done right.
Read on to find out Chip and Joanna’s best tips for these first-time flippers, which might inspire some changes around your own abode, too.
Polished concrete floors are beautifulâand easy on the budget
Baker and Hawkins need to stick to a strict budget, so they’re excited when Chip suggests they rip up the carpet and simply use the concrete floors underneath.
They remove the carpet and repair the cracks in the concrete themselves (which saves a lot of money), then they hire a professional to polish the floors.
“Weâre actually going to save a lot of money doing concrete, because itâs only going to be 2,000 bucks,” Baker says.
Once the floors are finished, the concrete looks amazing, giving the condo a cool industrial look. Who knew you could get that for cheap?
Save as many original features as possible
Chip has another money-saving tip for Baker and Hawkins: Save the bathroom vanity.
“I would keep this,” Chip says when he sees the wood vanity. “This is great quality stuff, y’all. And this is something you could do in a kind of DIY sense and save a little money.â
Hawkins and Baker are willing to fix it up, but don’t end up keeping the vanityâand for a good reason.
“Brittany discovered so much mold that we did not want to salvage it,â Hawkins explains.
They’re forced to spend money on a new vanity, but they find a new piece with similar charm and style.
Watch: This Gorgeous New Farmhouse by Chip and Jo Gaines Is No ‘Fixer Upper’
When the bathroom is finished, Chip and Jo approve of the choice. It proves that while saving an old piece can save money, sometimes it’s simply not worth it.
Call in the professionals for a polished look
With all of Chip’s talk of DIY projects, Baker and Hawkins want to do as much as they can themselves. They even cut their own baseboards and do all the painting. But after some debating, they decide to hire a professional to do the bathroom tile.
“We decided not to tile as first-timers,” Hawkins says. “We felt like it was advanced for what we wanted to do, so the money that we saved from carpet, [we] put it toward tile.â
The modern gray tile they choose fits the condo’s midcentury style and, in the end, Hawkins and Baker are happy they hired someone to make it look so good. And Baker’s learned an important lesson.
“Know your limits,” Baker says. “And maybe next time weâll try tiling.â
Sometimes the right materials cost only a little more
Sometimes the biggest renovation challenge is simply choosing the right materials, a lesson Baker and Hawkins learn when trying to design the kitchen.
The condo was built in 1964, so they want to lean into the midcentury aesthetic by using walnut in the kitchen. Right away, Joanna loves the idea.
“I love walnut,” she says. “If I walk in and see your kitchen with walnut wood, I donât think âoh they did this on the cheap.ââ
Hawkins and Baker know that walnut won’t be too pricy, but it will require taking some money out of the budget elsewhere.
They build a beautiful kitchen out of this medium-tone wood and, in the end, it pays off. These cabinets give the whole condo a midcentury look.
An open walkway can save money
Throughout the renovation, Baker and Hawkins realize they’re really cutting it close with their budgetâand it doesn’t help when they keep finding unexpected costs.
One big expense they weren’t expecting is the door to the den.
“So guess how much a freaking door costs?” Baker asks. “A freaking door costs five to six thousand dollars!â
While they want to create a private den space, they know they can’t afford to put a door there. So they get creative with glass windows and a midcentury-inspired opening. This doorway ends up working even better than a traditional door because it keeps the den open, improving the flow into the living room.
It’s a great solution to the budget issue, and it ends up being one of the more beautiful features of the home.
When Baker and Hawkins are finally finished with the renovation, they know that they’ve gone way over their timeline. While they expected the project to take only nine weeks, it ends up taking four months. Still, they don’t go too far over their budget, spending $56,000 instead of their originally planned $50,000.
In the end, these novice flippers are proud of their workâand so are Chip and Jo!
The post Chip and Joanna Gaines Are Back (With Friends) in ‘First-Time Fixer’ appeared first on Real Estate News & Insights | realtor.comÂ®.
Whether you’re cozying up on the couch together with a bottle of wine or headed out to the trendy restaurant everyone’s talking about, date night is an essential part of most relationships.
“Date nights are important because they give new couples a chance to get to know each other and established couples a chance to have fun or blow off some steam after a rough week,” says Holly Shaftel, a relationship expert and certified dating coach. “Penciling in a regular date can ensure that you make time for each other when your jobs and other aspects of your life might keep you busy.”
There’s just one small snag. Or, maybe it’s a big one. Date nights can get expensive. According to financial news website 24/7 Wall St., the cost of an average date consisting of two dinners, a bottle of wine and two movie tickets is about $102.
When you’re focused on improving your finances as a couple, finding ways to spend less on date night is a no-brainer. But you may be wondering: How can we save money on date night and still get that much-needed break from the daily grind?
There are plenty of ways to save money on date night by bringing just a little creativity into the mix. Here are eight suggestions to try:
1. Share common interests on the cheap
When Shaftel and her boyfriend were in the early stages of their relationship, they learned they were both active in sports. They were able to plan their date nights around low-cost (and sometimes free) sports activities, like hitting the driving range or playing tennis at their local park.
If you’re trying to find ways to spend less on date night, you can plan your own free or low-cost date nights around your and your partner’s shared interests. If you’re both avid readers, for example, even a simple afternoon browsing your local library’s shelves or a cool independent bookstore can make for a memorable time. If you’re both adventurous, check into your local sporting goods stores for organized hikes, stargazing outings or mountaineering workshops. They often post a schedule of events that are free, low-cost or discounted for members.
2. Create a low-budget date night bucket list
Dustyn Ferguson, a personal finance blogger at Dime Will Tell, suggests using the “bucket list” approach to find the best ways to save money on date night. To gather ideas, make it a game. At your next group gathering, ask guests to write down a fun, low-budget date night idea. The host then gets to read and keep all of the suggestions. When Ferguson and his girlfriend did this at a friend’s party, they submitted camping on the beach, which didn’t cost a dime.
The cost of an average date consisting of two dinners, a bottle of wine and two movie tickets is about $102.
To make your own date night bucket list with the best ways to save money on date night, sit down with your partner and come up with free or cheap activities that you normally wouldn’t think to do. Spur ideas by making it a challengeâfor instance, who can come up with the most ideas of dates you can do from the couch? According to the blog Marriage Laboratory, these “couch dates” are no-cost, low-energy things you can do together after a busy week (besides watching TV). A few good ones to get your list started: utilize fun apps (apps for lip sync battles are a real thing), grab a pencil or watercolors for an artistic endeavor or work on a puzzle. If you’re looking for even more ways to spend less on date night, take the question to social media and see what turns up.
3. Alternate paid date nights with free ones
If you’re looking for ways to spend less on date night, don’t focus on cutting costs on every single date. Instead, make half of your dates spending-free. “Go out for a nice dinner one week, and the next, go for a drive and bring a picnic,” says Bethany Palmer, a financial advisor who authors the finance blog The Money Couple, along with her husband Scott.
Getting stuff done around the house or yard may not sound all that romantic, but it can be one of the best ways to save money on date night when you’re trying to be budget-conscious. And, tackling your to-do listâlike cleaning out the garage or raking leavesâcan be much more enjoyable when you and your partner take it on together.
5. Search for off-the-wall spots
If dinner and a movie is your status quo, mix it up with some new ideas for low-cost ways to save money on date night. That might include fun things to do without spending money, like heading to your local farmer’s market, checking out free festivals or concerts in your area, geocachingâoutdoor treasure huntingâaround your hometown, heading to a free wine tasting or taking a free DIY class at your neighborhood arts and crafts store.
“Staying creative allows you to remain flexible and not bound to simply doing the same thing over and over,” Ferguson says.
6. Leverage coupons and deals
When researching the best ways to save money on date night, don’t overlook coupon and discount sites, where you can get deals on everything from food, retail and travel. These can be a great resource for finding deep discounts on activities you may not try otherwise. That’s how Palmer and her husband ended up on a date night where they played a game that combined lacrosse and bumper cars.
There are also a ton of apps on the market that can help you find ways to save money on date night. For instance, you can find apps that offer discounts at restaurants, apps that let you purchase movie theater gift cards at a reduced price and apps that help you earn cash rewards when shopping for wine or groceries if you’re planning a date night at home.
7. Join restaurant loyalty programs
If you’re a frugal foodie and have a favorite bar or restaurant where you like to spend date nights, sign up for its rewards program and newsletter as a way to spend less on date night. You could earn points toward free drinks and food through the rewards program and get access to coupons or other discounts through your inbox. Have new restaurants on your bucket list? Sign up for their rewards programs and newsletters, too. If you’re able to score a deal, it might be time to move that date up. Pronto.
8. Make a date night out of budgeting for date night
When the well runs dry, one of the best ways to save money on date night may not be the most excitingâbut it is the easiest: Devote one of your dates to a budgeting session and brainstorm ideas. Make sure to set an overall budget for what you want to spend on your dates, either weekly or monthly. Having a number and concrete plan will help you stick to your date night budget.
“Staying creative allows you to remain flexible and not bound to simply doing the same thing over and over.”
Ferguson says he and his girlfriend use two different numbers to create their date night budget: how much disposable income they have left after paying their monthly expenses and the number of date nights they want to have each month.
“You can decide how much money you can spend per date by dividing the total amount you can allocate to dates by the amount of dates you plan to go on,” Ferguson says. You may also decide you want to allot more to special occasions and less to regular get-togethers.
Put your date night savings toward shared goals
Once you’ve put these creative ways to save money on date night into practice, think about what you want to do with the cash you’re saving. Consider putting the money in a special savings account for a joint purpose you both agree on, such as planning a dream vacation, paying down debt or buying a home. Working as a team toward a common objective can get you excited about the future and make these budget-friendly date nights feel even more rewarding.
The post 8 Ways to Save Money on Date Night appeared first on Discover Bank – Banking Topics Blog.
While COVID-19 has affected all parts of daily life, the travel industry has certainly been put on hold as people have had to cancel plans and stay at home. Since most travelers plan many months in advance, this also leaves many holding tickets they can no longer use. Frequent flyers and hotel loyalty members are left wondering what recourse they have, if any, when it comes to their member status and points or miles.
We researched the major players in the hotel and airline industry to find out how these companies plan to accommodate their valued members â by extending points, status levels and more â in the wake of the coronavirus pandemic.
Coronavirus relief measures by loyalty or travel program
IHG Rewards Club
World of Hyatt
American Airlines AAdvantage
Southwest Rapid Rewards
In addition to donating up to one million rooms to medical professionals, Hilton has promised to compensate its Hilton Honors loyalty program members in a number of ways.
Lower status requirements
Hilton has cut status qualification requirements by half.
Previous status requirements
New status requirements
4 stays, 10 nights or 25,000 base points
2 stays, 5 nights or 12,500 base points
20 stays, 40 nights or 75,000 base points
10 stays, 30 nights or 37,500 base points
30 stays, 60 nights or 120,000 base points
15 stays, 30 nights or 60,000 base points
For any Silver, Gold or Diamond members that were due to downgrade in 2020 or 2021, statuses will be extended through March 31, 2022.
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Weekend night rewards on eligible Hilton credit cards that were not expired by May 1, 2020, will now be valid through August 31, 2021, and certificates issued from May 1 through Dec. 31, 2020, are valid for 24 months from the date of issuance. All free weekend night certificates issued in 2021 can be used any night of the week and expiration is extended until Dec. 31, 2022.
Additionally, bonus points will continue to count as base points on eligible purchases through Dec. 31, 2021, and toward elite status tier qualification, including Lifetime Diamond Status.
All 2020 elite qualifying nights will be rolled over to the 2021 status year. This applies to all nights members have already completed or will complete this calendar year.
On top of that, Hilton has lowered the requirements to earn Milestone Bonuses for 2021. Previously, you could earn 10,000 bonus points every 10 nights after completing 40 nights in a calendar year. Starting in January, that requirement has been changed to 20 nights stayed to align with the new Gold qualification level. However, 60 nights will still earn you 30,000 points.
Diamond members will be able to gift Gold status for staying 30 nights in 2021 instead of 60 nights which was the previous requirement. The requirement to gift Diamond status is lowered to 60 nights instead of 100.
To ensure member safety, Hilton is providing flexible cancellations and full points refunds for all Hilton Honors experiences booked through May 31, 2021.
You can follow further updates for Hilton Honors members on the loyalty program website.
Marriott plans to compensate its Marriott Bonvoy members, although benefits may vary depending on membersâ location.
See related: Marriott data breach involves 5.2 million hotel guests
Bonvoy members who earned elite status for 2020 can now enjoy their benefits through February 2022.
Points set to expire by February 2021 will be paused, and no points will expire until after that time period.Â
Active free night awards (as part of Marriott credit cards or packages) set to expire beginning March 1, 2020, will be extended through Aug. 1, 2021. Additionally, more recent certificates set to expire before July 31, 2021, will be extended through that date as well. Suite night awards set to expire by Dec. 31, 2020, will be extended another year through Dec. 31, 2021.
Additionally, Marriott will depositÂ Elite Night Credits into Bonvoy elite membersâ accounts in the amount of 50% of the nights required for the status they earned in 2019. This can make it easier for the members to reach the next tier.
Elite Night Credits deposit breakdown
Annual tier requirements
Extra elite night credits
100 Qualifying Nights and $20,000 stay spend
50 Elite Night Credits
75 Qualifying Nights
38 Elite Night Credits
50 Qualifying Nights
25 Elite Night Credits
25 Qualifying Nights
13 Elite Night Credits
10 Qualifying Nights
5 Elite Night Credits
Stay up to date on relief measures for Bonvoy members on the companyâs COVID-19 page.
Coronavirus: What to do if youâre unemployed and have credit card debt
How to manage your credit cards during the coronavirus outbreak
IHG Rewards Club
Due to travel constraints and shortened travel periods, IHG has lowered its requirements for elite status membership by 25% or more, as well as extended statuses and points for all members (since elite membersâ points never expire).Â
Lower status requirements
Previous qualification requirements
New qualification requirements
10,000 qualifying points in a calendar year or
10 qualifying nights in a calendar year
7,000 qualifying points in a calendar year or
7 qualifying nights in a calendar year
40,000 qualifying points in a calendar year or
40 qualifying nights in a calendar year
30,000 qualifying points in a calendar year or
30 qualifying nights in a calendar year
75,000 qualifying points in a calendar year or
75 qualifying nights in a calendar year
55,000 qualifying points in a calendar year or
55 qualifying nights in a calendar year
See related: The benefits of IHG Rewards Club elite status
Program statuses will be extended through January 2022 for all members. Spire elite members will also retain their Choice benefit of 25,000 bonus points or gifting of Platinum Elite status to someone each year.
Anniversary night certificates (U.S. and U.K. only) set to expire before March 1, 2020, will be extended through the end of the year. All 2020 certificates will be redeemable for 18 months, instead of the usual 12. Some members have also reported that free night certificates expiring before Dec. 31, 2020, will be extended until August 2021.
Follow updates to IHG Rewards Club benefits on the programâs travel advisory page.
World of Hyatt
The World of Hyatt loyalty program will extend all statuses and rewards to compensate valued members.
All active elite statuses, as of March 31, 2020, will be extended through Feb. 28, 2022.Â
Forfeiting points due to inactivity will be suspended through June 30, 2021. No points will expire until that date.
Any earned rewards, such as free nights or upgrades, set to expire between March 1 and Dec. 31, 2020, will be extended through Dec. 31, 2021.
Check the updates to Hyatt relief measures on the programâs COVID-19 page.
Keep an eye on Wyndhamâs COVID-19 statement page for updates.
It took Choice some time to follow suit and join other hotel chains in extending elite statuses and offering other promotions amid the outbreak. On May 21, 2020, the company announced a series of offers to expand the benefits of its Choice Privileges loyalty program.
“Even during this crisis, our members found a number of ways to engage with us and make a difference,” saidÂ Jamie Russo, vice president, loyalty programs and customer engagement, Choice Hotels. “Some of them are essential and frontline workers who chose to stay in our small-business hotels, and others showed their generosity by donating their Choice Privileges points to aid recovery efforts. Our latest loyalty program changes tell our members that we appreciate their continued support and our hotels are here to welcome them whenever they feel safe traveling again.”
All membersâ current elite statuses will be extended through Dec. 31, 2021.
Lower status requirements
Choice is also easing requirements to qualify for elite status in 2021.
Previous status requirements
2021 status requirements
Additionally, Choice is giving current elite members a limited-time upgrade to the next tier. Gold members will be upgraded to Platinum status and Platinum members will be upgraded to Diamond. Additionally, members who stayed at least five nights by Dec. 31, 2020, will be able to keep their upgraded tier through 2021.
United has said it would compensate their MileagePlus members by extending all annual memberships, subscriptions and checked bag benefits for six months. United also plans to make status membership requirements easier and will release information later in 2020.
All MileagePlus Premier members will get to retain their 2020 status through Jan. 31, 2022.
Lower status requirements
MileagePlus Premier membership now has easier requirements, reduced 50% for each status level.
Premier qualifying flights
â¦ or PQP
All valid travel certificates issued on or after April 1, 2020, will be extended to be valid for two years for booking, as well as up to an additional 11 months to travel. All redeposit fees for flights booked through May 31, 2020, will be waived, as well as all fees for members who cancel within at least 30 days of departure.
Follow more updates to United MileagePlus on the programâs travel notice page.
Delta has stepped up to say they will compensate their Medallion members by extending their Member status.
2020 Medallion Member status will be extended through Jan. 31, 2022, and this change should be reflected on the memberâs SkyMiles account by Feb. 1, 2021. Additionally, all 2020 Medallion Qualification Miles will roll over into 2021.
Follow updates to the Delta SkyMiles program on the coronavirus travel update page.
American Airlines AAdvantage
As AAdvantage members experience reduced travel opportunities due to the coronavirus, American Airlines is offering elite status extension, lowering elite status requirements and allowing eligible cardholders to earn miles toward Million Miler status with credit card spend.
Members whose elite status expires on Jan. 31, 2021, will automatically get an extension until Jan. 31, 2022.
Lower status requirements
Members will be able to qualify for a higher elite status in 2021 with lower requirements, including Elite Qualifying Dollar (EQD), Elite Qualifying Mile (EQM) and Elite Qualifying Segment (EQS).
Gold oneworld Ruby
Platinum oneworld Sapphire
Platinum Pro oneworld Sapphire
Executive Platinum oneworld Emerald
$2,000 EQDs and 20,000 EQMs or
$2,000 EQDs and 20 EQSs
$4,500 EQDs and 40,000 EQMs or
$4,500 EQDs and 45 EQSs
$7,000 EQDs and 60,000 EQMs or
$7,000 EQDs and 70 EQSs
$12,000 EQDs and 80,000 EQMs or
$12,000 EQDs and 95 EQSs
The CitiBusiness® / AAdvantage® Platinum Select® Mastercard® cardholders who hold a companion certificate expiring Dec. 31, 2020, will receive a six-month extension as well, bringing the expiration date to June 30, 2021.
Learn more about AAdvantage program updates on aa.com.
JetBlue took a bit longer to join other airlines in taking measures to support loyal customers. On May 14, 2020, JetBlue announced it’s extending Mosaic elite statuses, as well as making it easier to earn one.
All currently valid Mosaic elite statuses will be extended through Dec. 31, 2021.
Lower status requirements
JetBlue is reducing the qualifying thresholds for Mosaic status by 50% for 2021. To earn the status this year, you’ll need to earn 7,500 qualifying TrueBlue base points or 6,000 qualifying TrueBlue base points and 15 flight segments.
Alternatively, you can get the elite status by spending $50,000 in annual net purchases on the JetBlue Plus card â this spending requirement hasn’t changed for 2020.
Virgin Atlantic has also made it easier for customers to earn and maintain elite status amid the pandemic.
In March 2020, Virgin Atlantic extended status for Gold and Silver members, allowing them an additional six months to meet the requirements.
On Aug. 20, 2020, the airline added another six months to the extension, making it one year in total.
Starting Sept. 1, 2020, the Flying Club program members will be able to earn tier points on award flights, meaning they’ll be able to earn elite-qualifying points on flights where they used Flying Club miles to redeem for travel.
On top of that, Virgin Atlantic makes it easier for members to earn and redeem Companion Vouchers, Upgrade Vouchers and Clubhouse Vouchers.
Members can now use Companion Vouchers with any ticket in any booking class, regardless of status. Gold and Silver members can book their companion into any cabin for zero miles, and Red members can book their companion into Economy and Premium for zero miles or upper class at a 50% discount.
Upgrade Vouchers can also be used with any ticket in any booking class, excluding Economy Light, for a one-cabin upgrade on a return flight.
Clubhouse Vouchers can be used for one entry to any clubhouse when booked on a Virgin flight or with Air France, Delta or KLM when flying internationally. Gold members will continue to receive two vouchers.
Southwest Rapid Rewards
On April 16, Southwest announced a status extension for A-List and A-List Preferred members and companion passes. The company is also giving a points “boost” to all Rapid Rewards members.
“As we continue to navigate our way through this unprecedented time and deal with extraordinary challenges, we are committed to keeping you informed and updated on the steps we are taking to manage through the COVID-19 pandemic,” Southwest said in a message to Rapid Rewards members.
Companion Pass Members who received an extension of their earned Companion Pass benefits through June 30, 2021, will have their benefits extended for another six months. Members will be able to keep their status through Dec. 31, 2021.
Southwest is giving all Rapid Rewards members with an account opened by Dec. 31, 2020, a âboostâ of 25,000 Companion Pass qualifying points and 25 flight credits toward Companion Pass status, as well as 15,000 tier qualifying points and 10 qualifying flight credits toward A-List and A-List Preferred.
Southwest cardholders can also spend their way all the way to A-List status, with no cap on tier qualifying points (TQPs) earned through card spend. Previously, cardholders could only earn up to 15,000 TQPs per year via card spend.
Additionally, travel funds created or expiring between March 1, 2020, and Sep. 7, 2020, will now expire on Sep. 7, 2022. Alternatively, Rapid Rewards members can convert those funds into Rapid Rewards points. According to Southwest, the conversion ratio is âthe same rate you would be able to purchase a ticket with points today.â
On June 11, British Airways finally joined other airlines in extending the elite status for its members. Additionally, the carrier is reducing the number of tier points needed to reach a higher membership tier.
British Airways is extending tier status by 12 months for members who have a tier point collection end date of July 2020, through to June 2021.
Lower status requirements
The carrier has also reduced the number of points needed to retain and upgrade a membership status by 25%.
Here are the new tier qualification thresholds:
Bronze: 225 Tier Points or 18 eligible flights
Silver: 450 Tier Points or 37 eligible flights
Gold: 1125 Tier Points
Members who have earned heir Gold Upgrade Vouchers, Companion Vouchers and Travel Together Tickets with a British Airways credit card will get a 6-month expiration extension to any current vouchers.
CLEAR is a program that makes it quicker for travelers to get through airport security lanes by using biometrics for ID verification. Since many people are currently avoiding traveling due to the coronavirus outbreak, a CLEAR membership might not be useful at the moment.
Originally, CLEAR offered customers to pause their membership for three months. Now CLEAR is allowing members to request a three-month extension to their membership, which can be done by contacting the company directly. With customer service channels such as phone lines overloaded by requests, the fastest way to do so is via CLEARâs online chat. However, some users have reported experiencing difficulties finding the chat box on the website. Alternatively, you can reach CLEAR by text, email or phone.
TSA Precheck is a five-year membership that provides expedited security checks at select domestic airports in the U.S. At this time, TSA is planning to keep enrollment centers open while working to determine if any temporary closures are required. Some centers have been closed or changed hours.
If youâre planning to visit an enrollment center, itâs recommended that you schedule an appointment â as walk-ins may be deferred.
Visit TSAâs enrollment questions page for more information.
Global Entry, a program run by U.S. Customs and Border Protection that allows travelers to get expedited clearance through automatic kiosks when arriving in the U.S, has reopened its enrollment centers on Sept. 8, 2020. After a six-month hiatus, the program will finally allow conditionally approved Global Entry applicants to complete in-person interviews at most Trusted Traveler Programs enrollment centers in the U.S. The interviews must be scheduled in advance online, and their availability will vary by location.
Since the COVID-19 outbreak has also affected processing times for Global Entry renewals, CPB has increased the renewal grace period to 18 months. This means that if you apply for your Global Entry renewal before its expiration date, you’ll be able to use Global Entry for another 18 months.
As the coronavirus situation is unprecedented and changing rapidly every day, hotels and airlines continue to make updates to their travel policies, including their loyalty programs. Travelers should continue to check airline and hotel websites as the situation evolves. If they cannot find the information they need online, they should contact their hotel, airline or travel agencyâs customer service number.
The information that credit bureaus collect affects just about every aspect of your life. Whether youâre approved for a credit card, get a good mortgage rate, can rent an apartment or even get a job â they all can hinge to varying degrees on your credit score. So when a credit bureau has something wrong, itâs imperative that you tell them. The three major bureaus â Equifax, Experian and TransUnion â offer online services and prefer that you use their online forms instead of calling. But sometimes you need to talk to a live person. Hereâs how to make contact.
Why Would I Need to Contact a Credit Bureau?
The three big credit bureaus or credit reporting agencies â Equifax, Experian and TransUnion â create credit reports that reflect consumersâ creditworthiness. The reporting agencies are for-profit businesses and sell their reports to other businesses, such as insurers, credit card companies, banks and employers.
These businesses in turn factor in these credit reports when making decisions such as whether to offer you a credit card and at what interest rate. So itâs important to monitor your credit reports and make sure the information on them is correct. If you ever find a mistake, you should contact the credit bureau to correct the information. You may also need to contact to a credit bureau if you think that youâre a victim of credit fraud. That could mean placing a fraud alert on your account or freezing your credit so that no one can open a new line of credit in your name.
Talk to a Real Person at Equifax
Equifax has multiple phone numbers that you can use to speak with a real person. The number that you use will depend on what you need help with. We recommend trying to contact the correct number. If you call the wrong number, they will simply say they cannot help you and then direct you to call another number. You can find all of Equifaxâs contact information on its website, Equifax.com.
If you want to contact Equifax with a general inquiry, you can reach the company via phone at the number 800-525-6285. Just make sure to call between the hours of 9 a.m. and 5 p.m. ET, Monday through Friday.
Equifax has also been in the news recently because it suffered a large data breach in 2017. If you have questions about whether your information was compromised in the breach, Equifax has a dedicated phone line at 888-548-7878. Again, be sure to call between 9 a.m. and 5 p.m. ET, Monday through Friday.
The table below has some common reasons why you might want to call Equifax and the number that you should call in order to speak with a representative.
How to Speak With a Real Person at Equifax Reason for Calling Phone Number General inquiries 800-525-6285 Canceling a product or service (Equifax customers) 866-640-2273 Request a copy of your credit report* 866-349-5191 Place a fraud alert on your credit card 800-525-6285 Dispute information in your credit report 866-349-5191 Place, lift or remove a freeze on your credit 888-298-0045 Dedicated phone line for information on the 2017 data breach 888-548-7878
*Donât forget: You can get a free copy of your credit report three times per year.
Talk to a Real Person at Experian
Experian makes it relatively hard to talk to a real person on the phone. The company encourages people to use its website for most things. However, there are three main phone numbers that you should know if you want to talk to someone at Experian.
Call 888-397-3742 if you want to order a credit report or if you have any questions related to fraud and identity theft. The number 888-397-3742-6 (1-888-EXPERIAN) will also work. You can place an immediate fraud/security alert on your credit with this number.
If you have a question about something on a recent credit report (such as incorrect information), you will need to have a copy of the credit report. On the report you will find a 10-digit number. This number is different for each credit report and you will need it for the representative to help with any issues related to your specific report. Once you have that number ready, you can call 714-830-7000 with questions about your report.
If you need help with anything related to your membership account with Experian, you should call the companyâs customer service at 479-343-6239. You will need to call while the Experian office is open in order to speak with someone. The hours are 9 a.m. to 11 p.m. ET, Monday to Friday, and 11 a.m. to 8 p.m. ET, Saturday and Sunday.
How to Speak With a Real Person at Experian Reason for Calling Phone Number Buying a credit report,
Placing a fraud alert on your credit file 888-397-3742 or
888-397-37426 (888-EXPERIAN) Question about a recent credit report 714-830-7000 Question about Experian membership account 479-343-6239 Talk to a Real Person at TransUnion
TransUnion has one general support number that you can use to talk to a human for help with your credit report (such as to dispute information, freeze your account, or report fraud), your credit score or any general questions. That number is 833-395-693800.
Note that a human representative is only available Monday through Friday 8 a.m. to 11 p.m. ET, Monday through Friday.
You will hear an automated service when you first call this number. Press 4 in order to speak with a representative. Then you will need to press 1 if you have a TransUnion File Number or 2 if you do not have a number.
A TransUnion File Number is a unique identification number that you can find in the top right of your TransUnion credit report. You do not need a number to speak with a representative, but you will need it to do anything related specifically to your credit report. For example, the file number is necessary for disputing incorrect information.
If you ever need to buy a credit report or address an issue on your report, you will need to contact a credit bureau. Each of the three national credit bureaus, Equifax, Experian and TransUnion, has a website where you can do most things you may need to do. In fact, they prefer that you use online forms instead of calling. But sometimes itâs comforting to speak with a real person who can answer your specific questions.
The first step is figure out what phone number you need. The credit bureaus all have multiple numbers. Not all of the numbers will allow you to solve your specific issue. Of course once you have the right number, you will also need some patience. Hold times can be long, particularly during the coronavirus slow-down. The credit bureaus have also experienced higher phone traffic since the Equifax breach in 2017.
Tips for Using a Credit Card Responsibly
Correcting inaccuracies on your credit report by contacting a credit bureau can help to improve your credit score. Another potential way to improve your score is to get another credit card. It will increase your available credit and improve your credit utilization ratio. You can find the best card for you with our credit card tool. Of course, you should only get another card if you can responsibly handle the credit you already have.
One good piece of credit card advice is always to avoid as many fees as possible. Fees can make it harder for you to keep your spending down. Higher bills, in turn, could be harder for you to pay back in full. Here are 15 credit card fees that you should avoid.
It can be tempting to keep swiping your credit card, but make a budget and stick to it. A financial advisor can help you create a road map to make sure youâre hitting your goals and not getting into debt. SmartAssetâs free matching tool can help you find a person to work with. It will connect you with up to three advisors in your area.
Around 6.1% of employed Americans worked for themselves in 2019, yet the ranks of the self-employed might increase among certain professions more than others. By 2026, the U.S. Bureau of Labor Statistics projects that self-employment will rise by nearly 8%.
Some self-employed professionals experience high pay in addition to increased flexibility. Dentists, for example, are commonly self-employed, yet they earned a median annual wage of $159,200 in 2019. Conversely, appraisers and assessors of real estate, another career where self-employment is common, earned a median annual wage of $57,010 in 2019.
When you work for yourself, you might have to jump through additional hoops to qualify for credit.
Despite high pay and job security in some industries, thereâs one area where self-employed workers can struggle â qualifying for credit. When you work for yourself, you might have to jump through additional hoops and provide a longer work history to get approved for a mortgage, take out a car loan, or qualify for another line of credit you need.
Why Being Self-Employed Matters to Creditors
Hereâs the good news: Being self-employed doesn’t directly affect your credit score. Some lenders, however, might be leery about extending credit to self-employed applicants, particularly if youâve been self-employed for a short time.
When applying for a mortgage or another type of loan, lenders consider the following criteria:
Generally speaking, lenders will confirm your income by looking at pay stubs and tax returns you submit. They can check your credit score with the credit bureaus by placing a hard inquiry on your credit report, and can confirm your debt-to-income ratio by comparing your income to the debt you currently owe. Lenders can also check to see what assets you have, either by receiving copies of your bank statements or other proof of assets.
The final factor â your employment status â can be more difficult for lenders to gauge if youâre self-employed, and managing multiple clients or jobs. After all, bringing in unpredictable streams of income from multiple sources is considerably different than earning a single paycheck from one employer who pays you a salary or a set hourly rate. If your income fluctuates or your self-employment income is seasonal, this might be considered less stable and slightly risky for lenders.
That said, being honest about your employment and other information when you apply for a loan will work out better for you overall. Most lenders will ask the status of your employment in your loan application; however, your self-employed status could already be listed with the credit bureaus. Either way, being dishonest on a credit application is a surefire way to make sure youâre denied.
Extra Steps to Get Approved for Self-Employed Workers
When you apply for a mortgage and youâre self-employed, you typically have to provide more proof of a reliable income source than the average person. Lenders are looking for proof of income stability, the location and nature of your work, the strength of your business, and the long-term viability of your business.
To prove your self-employed status wonât hurt your ability to repay your loan, youâll have to supply the following additional information:
Two years of personal tax returns
Two years of business tax returns
Documentation of your self-employed status, including a client list if asked
Documentation of your business status, including business insurance or a business license
Applying for another line of credit, like a credit card or a car loan, is considerably less intensive than applying for a mortgage â this is true whether youâre self-employed or not.
Most other types of credit require you to fill out a loan application that includes your personal information, your Social Security number, information on other debt you have like a housing payment, and details on your employment status. If your credit score and income is high enough, you might get approved for other types of credit without jumping through any additional hoops.
10 Ways the Self-Employed Can Get Credit
If you work for yourself and want to make sure you qualify for the credit you need, there are plenty of steps you can take to set yourself up for success. Consider making the following moves right away.
1. Know Where Your Credit Stands
You canât work on your credit if you donât even know where you stand. To start the process, you should absolutely check your credit score to see whether it needs work. Fortunately, there are a few ways to check your FICO credit score online and for free.
2. Apply With a Cosigner
If your credit score or income are insufficient to qualify for credit on your own, you can also apply for a loan with a cosigner. With a cosigner, you get the benefit of relying on their strong credit score and positive credit history to boost your chances of approval. If you choose this option, however, keep in mind that your cosigner is jointly responsible for repaying the loan, if you default.
3. Go Straight to Your Local Bank or Credit Union
If you have a long-standing relationship with a credit union or a local bank, it already has a general understanding of how you manage money. With this trust established, it might be willing to extend you a line of credit when other lenders wonât.
This is especially true if youâve had a deposit account relationship with the institution for several years at minimum. Either way, itâs always a good idea to check with your existing bank or credit union when applying for a mortgage, a car loan, or another line of credit.
4. Lower Your Debt-to-Income Ratio
Debt-to-income (DTI) ratio is an important factor lenders consider when you apply for a mortgage or another type of loan. This factor represents the amount of debt you have compared to your income, and itâs represented as a percentage.
If you have a gross income of $6,000 per month and you have fixed expenses of $3,000 per month, for example, then your DTI ratio is 50%.
A DTI ratio thatâs too high might make it difficult to qualify for a mortgage or another line of credit when youâre self-employed. For mortgage qualifications, most lenders prefer to loan money to consumers with a DTI ratio of 43% or lower.
5. Check Your Credit Report for Errors
To keep your credit in the best shape possible, check your credit reports, regularly. You can request your credit reports from all three credit bureaus once every 12 months, for free, at AnnualCreditReport.com.
If you find errors on your credit report, take steps to dispute them right away. Correcting errors on your report can give your score the noticeable boost it needs.
You typically need two years of tax returns as a self-employed person to qualify for a mortgage, and you might not be able to qualify at all until you reach this threshold. For other types of credit, it can definitely help to wait until youâve earned self-employment income for at least six months before you apply.
7. Separate Business and Personal Funds
Keeping personal and business funds separate is helpful when filing your taxes, but it can also help you lessen your liability for certain debt.
For example, letâs say that you have a large amount of personal debt. If your business is structured as a corporation or LLC and you need a business loan, separating your business funds from your personal funds might make your loan application look more favorable to lenders.
Having more liquid assets is a good sign from a lenderâs perspective, so strive to build up your savings account and your investments. For example, open a high-yield savings account and save three to six months of expenses as an emergency fund.
You can also open a brokerage account and start investing on a regular basis. Either strategy will help you build up your assets, which shows lenders you have a better chance of repaying your loan despite an irregular income.
9. Provide a Larger Down Payment
Some lenders have tightened up mortgage qualification requirements, and some are even requiring a 20% down payment for home loans. Youâll also have a better chance to secure an auto loan with the best rates and terms with more money down, especially for new cars that depreciate rapidly.
Aim for 20% down on a home or a car that youâre buying. As a bonus, having a 20% down payment for your home purchase helps you avoid paying private mortgage insurance.
10. Get a Secured Loan or Credit Card
Donât forget the steps you can take to build credit now, if your credit profile is thin or youâve made mistakes in the past. One way to do this is applying for a secured credit card or a secured loan, both of which require collateral for you to get started.
The point of a secured credit card or loan is getting the chance to build your credit score and prove your creditworthiness as a self-employed worker, when you canât get approved for unsecured credit. After making sufficient on-time payments toward the secured card or loan, your credit score will increase, you can upgrade to an unsecured alternative and get your deposit or collateral back.
The Bottom Line
If youâre self-employed and worried that your work status will hurt your chances at qualifying for credit, you shouldnât be. Instead, focus your time and energy on creating a reliable self-employment income stream and building your credit score.
Once your business is established and youâve been self-employed for several years, your work status wonât matter as heavily. Keep your income high, your DTI low, and a positive credit record, youâll have a better chance of getting approved for credit.
Former NBA guard Jarrett Jack is dribbling away from hisÂ Sandy Springs, GA, mansion. The grand home is back on the market for $2.85 million.
Following a 13-year stint in the league, Jack, 37, is ready to vacate his Atlanta-area home. He first placed the home on the market in November 2019, asking $3 million, but has sliced the price steadily over the past year. The Maryland native purchased the property in 2009 for $2.15 million.
Built in 2009, the luxury build on 1.3 acres is entered via a circular drive that features tropical, landscaped grounds. With six bedrooms and 6.5 bathrooms, the interior offers a whopping 11,000 square feet of living space.
Standout features include an oversized foyer with a spiraling double staircase, high ceilings, as well as floor-to-ceiling windows throughout the home.
The chefâs kitchen offers top-of-the-line appliances including a gas range, double ovens, high-end cabinetry, a center island with seating, and an eat-in nook.
The now essential home office offers eye-catching coffered ceilings, built-ins, and large windows that provide great views and natural light.
For a buyer in need of options, the residence offers two master suites to choose from. The main level master suite offers a fireplace with a sitting area, spa tub, a huge walk-in shower, and a spacious custom walk-in closet.
The second master suite can be found on the upper level and offers several upgrades and an abundance of windows. French doors open to a large balcony overlooking the private and secluded backyard. Guest bedrooms also include private bathrooms and walk-in closets.
The home also offers a perk-packed terrace level, with an entertainment bar and hangout area, a fitness center, and a home theater.
Step outside, and youâll feel the resort style vibe from the pool and spa, to the covered cabana with seating area, and a television to keep up on hoops action in the outdoor, built-in kitchen.
The listing details note that the home is conveniently situated near Chastain Park, as well as shops and restaurants. Downtown Atlanta is a just a 16-mile commute.
In 2005, Jack broke into the NBA with the Portland Trail Blazers. After three seasons in Rip City, Jack made his way all over the league, playing with eight other squads as a dependable guard.
Jessica Cooke Scarborough with Beacham & Company Realtors holds the listing.
The post Former NBA Guard Jarrett Jack Selling $2.8M Georgia Mansion appeared first on Real Estate News & Insights | realtor.comÂ®.
Reality TV star Ty Pennington, known for changing peopleâs lives with his energetic personality onÂ the original version of Extreme Makeover: Home Edition, is now looking to cash in on his own home makeover. Pennington has just listed his house — a beautiful and bright 1927 Craftsman in Venice, Calif. — for $2,795,000.
Pennington put his home design expertise to good use and carefully restored the property earlier this year with the help of his trusted interior designer, Patrick Delanty. Delanty, also known to be Halle Berry’s designer, has long been working alongside Ty Pennington, serving as his design director for Extreme Makeover and running his on-air design segments, most notably his presence on The Oprah Winfrey Show, Rachel Ray Show, NBCâs Nightline and Good Morning America.
Just like its reality TV star owner, the home is bright, cheerful and quirky, with colorful interiors exuding creativity and style. The property is listed by Patrice Meepos of Compass.
Tucked away on a one-way street near the beach, Venice Boardwalk, canals and Abbot Kinney’s hot spots, the original 1927 dwelling has 3 beds, 3 baths, and a sizable living room with decorative fireplace, along with a sunken family room with large windows overlooking a newly landscaped, private back yard with koi pond.
The ground level hosts the kitchen, laundry room, and bedroom with direct backyard access, as well as a full bath. On the upper level, there’s a master retreat and a second bedroom.
Ty Pennington added quite a few special touches to the 2,102-square-foot home, including bamboo flooring, baths adorned in vintage-inspired ceramic tile, a master bath sporting a standalone shower and an antique cast-iron freestanding tub, kitchen with concrete countertops and a wraparound, porcelain-tiled porch. There’s also a beautiful backyard that looks like a great place to entertain guests.
While Ty Pennington did not return to host HGTV’s 2020 version of Extreme Makeover: Home Edition (which is hosted by Modern Family‘s Jesse Tyler Ferguson), you can catch the two time Emmy award winner in his other home improvement series, Trading Spaces — which recently restarted airing after a 10-year hiatus.
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