I’m having trouble convincing my husband that we should start making investments. He thinks the stock market is a scam, but I’ve had several college classes that discussed Wall Street and several of my friends are doing OK with their portfolios.
It was a struggle to even convince him to move from a traditional savings account to a high-yielding one. I would never bet with money we could not afford. How do I convince my husband that building wealth is a risk but a worthy one?
Some people don’t invest because they truly are risk-averse. They lose sleep when the stock market has a bad day, let alone when it has a complete meltdown like the one we saw last March. Your husband could fall into this camp, particularly if he’s ever seen someone close to him lose money on a bad investment.
Sometimes it’s sheer laziness. That possibility crossed my mind for your husband. Not wanting to switch to a high-yield savings account seems less about risk and more about the fact that switching bank accounts is a pain.
Often, though, it boils down to this: We’d rather spend our money now instead of decades from now. It sounds like you’re relatively young — and when you’re young and your paychecks are stretched thin, it feels like you have all the time in the world. Investing takes a lot of discipline. So dismissing the entire stock market as a scam can be a convenient excuse for spending all of your money now.
Which do you think best describes your husband? If it’s the first scenario, he needs to understand that the bigger risk is not investing.
Suppose your goal is to retire with $500,000. You could save $1,000 a month for 40 years straight and still not get there. Your money would also be worth way less than $500,000 by that point due to inflation. But by earning average stock market returns of 8%, you could get to $500,000 by investing less than $200 a month for 40 years.
If laziness is the issue, that’s easy. You can budget an amount to automatically transfer and let a robo-adviser invest it for you based on your age, when you want to retire and how much risk you’re willing to take. Pretty much any major brokerage offers robo-investing. You don’t need to actively manage a portfolio.
If your husband is the type who wants to spend every cent today, that’s a bigger challenge. I think you’ll have the best chance of success if you and your husband can get on the same page about your long-term goals.
At the very least, does he acknowledge that he wants to retire someday? If so, does he have any ideas about how he plans to get there without investing?
You could suggest starting small with $50 or $100 a month. Perhaps if you can identify something that would be relatively painless for both of you to cut, you can start there and invest that money instead.
You’d be hard-pressed to find a wealthy person who isn’t invested in the stock market. Yet on some level, I get your husband’s skepticism.
I’m not going to tell you that the financial system is perfect. Of course, there will always be scams. But there are plenty of regulatory agencies protecting investors, including the SEC, which regulates the market, and FINRA, which sets the rules for brokerages. You can avoid scams even further by investing across the stock market using an index fund instead of just a handful of companies. Avoiding dirt-cheap penny stocks will also help you avoid being scammed.
Consistently putting money into an S&P 500 index fund is the most proven way to build wealth over time. If you’d invested at any point in the index’s history and kept your money invested for 20 years, you’d have earned a profit every time.
I’m hoping that your husband’s resistance stems from the fact that he’s unfamiliar with investing. Maybe he’ll come around once he sees your money isn’t vanishing into a slot machine each month.
What I don’t want is for you to shoulder the burden for managing your money alone, and I get the sense that may be happening. At a minimum, the two of you should sit down to review your finances once a month. You can go over your spending and talk about your bigger goals. If he still doesn’t want to invest, press him on it: How exactly does he plan to build a nest egg?
Don’t let him off the hook here. He doesn’t get to put your future at risk over his hard-headed beliefs.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].
The gig economy, supercharged by a pandemic, is breathing new life into some bygone hobbies, ones associated more with retirees than entrepreneurs.
Life indoors drove many folks to experiment with tactile hobbies like bread baking and quilting. What started as a way to pass the time could blossom into a side hustle with a little know-how.
Online platforms such as Facebook Marketplace, Etsy and Instagram as well as the revival of flea markets – often with a trendy, indie twist – offer novel ways to make money on those age-old crafts and activities.
Here’s a look at six trending hobbies that could make you serious money. These are not your grandma’s side gigs.
6 Throwback Hobbies That Make Money as Trendy Side Gigs
Buy old furniture and/or tchotchkes, then resell them for a profit. The concept is straightforward, and it’s sometimes referred to as upscaling or upcycling when you work a little magic on the item to bump up the price tag.
The Penny Hoarder spoke to Sara Chen, a master of upcycling. She focuses her efforts on flipping furniture, hunting for antique, mid-century modern dressers online via Facebook Marketplace.
When she finds a good deal, she buys it, sands it, paints it, primes it and resells it — usually for triple or quadruple the purchase price. She’s able to make $3,000 a month consistently.
Her secret (besides serious painting skills)?
“Post as many pictures from different angles as you can,” she told The Penny Hoarder, noting that taking photos is her favorite part of the flip. “It’s also probably the most important part.”
Make sure they’re high quality and in good lighting. The more the better.
It takes time for dough to rise.
Baking, because of the equipment required, is a hobby that can be difficult to scale into a side gig or a business. But over the years, The Penny Hoarder has talked with several bakers who made it work and a few who started during the pandemic. You can lean on their advice no matter what stage you’re at.
Sarah Tennant started baking as a hobby when she was 14 years old. She decided to try to earn a profit from her skills by taking ad hoc requests from friends, family and referrals.
In her guide for The Penny Hoarder, she outlined how her cakes, which she priced much lower than professionals, still brought her in $400 a month.
College roommates Sarah Chappell and Julia Finfrock found success with their sourdough side hustle called EarlyRisers. In October 2020, the duo started out selling plain sourdough for $7 a loaf. As orders increased, they started experimenting with flavors, adding chocolate-chip, rosemary, garlic and other flavors to the menu. These speciality loaves sell for up to $11.
“It was a lot of trial and error,” Finfrock told The Penny Hoarder.
Thanks to online marketplaces like Etsy and Amazon Handmade, crafting is seeing a huge comeback. And we have plenty of ideas for you to cash in on its popularity.
Local fairs and online marketplaces are ideal places to sell easy-to-make holiday decorations.
Some examples of low-cost decorations include:
- Scrap wood stocking hangers
- Sock snowmen
- Pumpkin spice soap
Of course, you’re not limited to holiday decor. You could also try your hand at DIY greeting cards or handmade wedding invitations. When you’ve decided exactly what you want to make and sell, keep costs low by finding cheap crafting supplies. Dollar stores are a good place to start.
To find a nearby market or fair to hawk your creations, search Festivalnet.
Millennials love plants, according to Money, the Huffington Post, CNBC, Business Insider, the New Yorker and apparently the entire internet.
Further proof: A plant aesthetic has blossomed on social media, especially Instagram. The hashtags #Plants and #PlantsofInstagram have tens of millions of posts. Outside of the local market scene, a lot of small-scale operations use Instagram to sell their plants.
Selling succulents probably isn’t going to allow you to quit your day job, but it may pad your savings or help you pay down debt.
One gardener, Stephanie Spicer, made $1,200 in a single season. In her guide to selling plants, she outlines exactly how to choose, fertilize, present, price, advertise and sell them.
5. Knitting, Sewing, Quilting
Boo, fast fashion trends. Yay, making and altering your own clothes. As sustainability becomes more of a conscious decision for many consumers, skills like knitting, sewing and quilting are seeing renewed demand.
If you want to start out small with handmade clothing, blankets or accessories, Amazon Handmade or Etsy are two of the best places to sell online.
If you want to lean into the gig – beyond a few online sales – there’s some money to be made. The Penny Hoarder spoke with retired geologist Pat Martinek, who found a way to monetize her weaving and spinning skills through her side business The Fyber Cafe. Martinek raked in $10,000 a year by using chiengora, aka recycled dog fur, to create garments and keepsakes.
“It is warmer than other fibers, so a scarf or sweater made with chiengora can help you withstand the most brutal temperatures,” she said.
Ella Trout, a college student at the University of Vermont, is another example of how to cash in on the handmade trend. She founded puppycatco, her sustainable fashion side hustle, a couple years ago.
She started by screenprinting her dog and cat designs onto T-shirts, but changed her business model over the years. Now, she sews and alters clothes to be more environmentally sustainable. Trout uses Instagram to sell her creations, and she told The Penny Hoarder that her handmade clothing and accessories earn her up to $1,500 per month.
6. Using the Library
Libraries are one of the only remaining places where you can just exist. For free. There’s no expectation to spend money. That alone should be reason enough to visit.
As an additional incentive, libraries offer access to a bunch of interesting things beside books that can help you launch a side gig or business. Tools, baking equipment, seeds and even high-tech are often available at no cost through a process called intra-library loans.
“Maybe you want to make a cow-shaped cake. You don’t have to buy that cake pan,” said Bob Anstett, of Broward County, Florida’s library system. “You can check it out from a library.”
In addition to the fun stuff you can rent for free at your local library, Anstett explained that libraries have expanded to home community workshops called makerspaces. Makerspaces offer up all kinds of equipment for locals to tinker with and use to hone new skills.
“You can come in and take a basic class at [our makerspace] and use our sewing machines,” Anstett said. “Used to be that you were called a knitter or a carpenter or a woodworker. Now, you’re a maker.”
Adam Hardy is a former staff writer at The Penny Hoarder.
Living in a one-income household is like being a gymnast walking on a balance beam. You have absolutely no margin for error, and the slightest misstep can spell disaster. On a single income, you have to watch every penny. Wouldn’t it be nice if you got an alert any time you’re shopping on Amazon or Walmart.com and you’re about to get ripped off? If you owe your credit card companies ,000 or less, AmOne will match you with a low-interest loan you can use to pay off every single one of your balances. Credit card debt is the most expensive kind of debt, and your credit card company is just getting rich by ripping you off with high interest rates. But a website called AmOne can help you fight back.
1. Cut Your Food Budget by Planning Ahead
No matter how strategic you are, groceries still account for a good chunk of your budget. Everybody’s got to eat. You may as well earn a little money back while your groceries are being bagged up. This goes beyond just making a shopping list. Real meal planning helps you save money because it helps you use what you buy, preventing food — and money — waste. It also prevents you from spending extra cash on emergency lunches or late-night takeout. A free app called Fetch Rewards will reward you with gift cards just for buying toilet paper and more than 250 other items at the grocery store. That’s exactly what this free service does.
2. Get Paid Every Time You Buy Toilet Paper
Here’s how it works: After you’ve downloaded the app, just take a picture of your receipt showing you purchased an item from one of the brands listed in Fetch. For your efforts, you’ll earn gift cards to places like Amazon or Walmart. The tens of millions of jobs lost to the COVID-19 pandemic have left millions of families surviving as one-income households for the first time. That’s a really hard thing to do these days, especially if you’re not used to it. You just have to answer honestly, and InboxDollars will continue to pay you every month. This might sound too good to be true, but it’s already paid its users more than million. Source: thepennyhoarder.com Groceries are a huge part of everyone’s budget, so they’re a big target for savings. Try preparing for the week ahead with some meal planning.
3. Stop Overpaying for Stuff Online
*Capital One Shopping compensates us when you get the extension using the links provided. You should shop your options every six months or so — it could save you some serious money. Let’s be real, though. It’s probably not the first thing you think about when you wake up. But it doesn’t have to be. It takes two minutes to see if you qualify for up to ,000 online. You do need to give AmOne a real phone number in order to qualify, but don’t worry — they won’t spam you with phone calls. Ready to stop worrying about money? The cost of essential purchases, like groceries and rent keeps going up, making it harder than ever for families to get by on a single income. You’re probably thinking: I don’t have the time or money for that. But this takes just minutes — and you could leave your family up to million with a company called Bestow.
4. Knock $540/Year From Your Car Insurance in Minutes
The benefit? You’ll be left with one bill to pay each month. And because personal loans have lower interest rates (AmOne rates start at 3.49% APR), you’ll get out of debt that much faster. Plus: No credit card payment this month. Just add it to your browser for free, and before you check out, it’ll check other websites, including Walmart, eBay and others to see if your item is available for cheaper. Plus, you can get coupon codes, set up price-drop alerts and even see the item’s price history. We hear people are paying as little as a month. (But every year you wait, this gets more expensive.) A website called Insure.com makes it super easy to compare car insurance prices. All you have to do is enter your ZIP code and your age, and it’ll show you your options. Every little bit helps when you live in a one-income household. But by following these seven steps, though, maybe you can build yourself a little bit of a cushion.
5. Stop Paying Your Credit Card Company
Over a million people already have, so they must be onto something. Yup. That could be 0 back in your pocket just for taking a few minutes to look at your options. You can get started in just a few clicks to see if you’re overpaying online. You can download the free Fetch Rewards app here to start getting free gift cards. Let’s say you’re shopping for a new pair of shoes, and you assume you’ve found the best price. Here’s when you’ll get a pop up letting you know if that exact pair of shoes is available elsewhere for cheaper. If there are any available coupon codes, they’ll also automatically be applied to your order.*
6. Add $225 to Your Wallet Just for Watching the News
Living in a one-income household is just a little bit easier when you can add even just a little bit more income. For example: And research companies want to pay you to keep watching. You could add up to 5 a month to your pocket by signing up for a free account with InboxDollars. They’ll present you with short news clips to choose from every day, then ask you a few questions about them. First, figure out how many meals you’re responsible for making every week. If it’s just you, your answer might be 21: seven breakfasts, lunches and dinners. If you have a family, count meals per person — a dinner for three people counts as three dinners, even if you all eat the same thing. Does all this sound familiar? If you’re in this position, we’ve got seven money moves you can start making today: Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder. He knows what it’s like to survive as a one-income household.
7. Leave Your Family up to $1M
Oh, to be a millionaire. Look, not all of us have the money to set up trust funds for our loved ones — especially living on a single income. But you could still leave them up to million in life insurance — and you don’t even need to have the money in the bank.
The possibility of student loan forgiveness is on the horizon, so should you stop making payments on your own loans?
That depends, but let’s take a look at where we stand so far:
- On the campaign trail, then-candidate Joe Biden promised to wipe out at least $10,000 for student loan borrowers.
- Now that he’s president, Biden is getting pressure from some to increase that amount to $50,000 or more. But he’s also getting pushback from other groups who aren’t in favor of wiping out any student loan debt. (More on that later.)
- An administrative forbearance that freezes interest rates and payments for federally held student loans has been extended until Sept. 30, 2021.
So what does all this mean for you, the student loan borrower?
Depending on your loans and financial situation, you might actually be better off making larger payments right now… or none at all.
Don’t worry, we’ll explain.
Is Student Loan Forgiveness Likely to Happen?
During his campaign, Biden announced that part of his Emergency Action Plan for the economic recovery would include forgiveness of at least $10,000 in student loans for borrowers, plus additional relief for those who attended public colleges or historically Black colleges and universities.
Bur remember, not all campaign promises come true.
Some groups have been pressuring the Biden administration to up the limit to $50,000 in student loan debt or wipe out all $1.7 trillion outstanding student loan debt. And there are plenty of other factions who aren’t in favor of forgiving student loans at all and instead want to focus on relief efforts for other parts of the economy.
With all these plans on the table, there’s no guarantee of anything, according to Betsy Mayotte, president of The Institute of Student Loan Advisors, a non-profit organization that offers free student loan advice and dispute resolution assistance to borrowers.
“I’ve been working in the student loan industry for over 20 years, and we’re closer to some sort of broad student loan forgiveness than we’ve ever been before,” she said. “With that said, I think the chances of broad student loan forgiveness are very, very slim still.”
And even if some sort of forgiveness does come to pass, it’s highly unlikely the federal government will simply wipe out all debt in one broad stroke.
It’s important to be realistic about which groups of people and types of loans will be forgiven, said Steve Muszynski, the founder and CEO of Splash Financial, a student loan refinancing marketplace.
“What President Biden campaigned on was a $10,000 forgiveness amount for select groups,” he said. “Select groups tend to be people that didn’t get an advanced degree, maybe make less than $125,000 a year, as an example.”
We’re closer to some sort of broad student loan forgiveness than we’ve ever been before. With that said, I think the chances of broad student loan forgiveness are very, very slim still.
However, one thing that is certain right now is that federally held student loans are in forbearance — interest rates are automatically set to 0% and all payments are suspended.
Forbearance was originally part of the Coronavirus Aid, Relief, and Economic Security Act — aka the CARES Act — passed in March 2020 and extended a few times to its current deadline of Sept. 30, 2021.
So with forbearance a sure thing and forgiveness a possibility, should you be making payments on your student loans? Let’s look at the factors that can help you decide.
6 Questions to Ask Before You Stop Paying Student Loans in Forbearance
Before you start celebrating that your student loans are going to disappear, let’s do a reality check and figure out how forgiveness might affect you.
1. What Type of Student Loans Do You Have?
Not all student loans are eligible for forbearance — and it’s highly unlikely they will all be eligible for forgiveness.
The forbearance covers all loans owned by the U.S. Department of Education, which includes Direct Loans, subsidized and unsubsidized Stafford loans, Parent and Graduate Plus loans and consolidation loans.
If you have private student loans, these loans are not covered by the administrative forbearance period and there’s almost zero chance they’ll be wiped out by a mass forgiveness.
Not sure who owns your student loans or how much you owe? You can call the Federal Student Aid Information Center at (800) 433-3243 and check out this guide to help you get organized.
If you have a mix of private and federally held student loans, your best strategy may be to use the money you’d normally pay toward federal student loans to pay off more of the private loans still actively accruing interest.
If you qualify, refinancing private student loans could help you lower your interest rate and monthly payments.
“If you have anything over, say, 5 or 6% on your private loans, it doesn’t hurt to look,” Mayotte said.
2. How Much Do You Owe?
The amount you owe may help you decide if you should use the forbearance period to make a dent — or wait.
Even if $10,000 in forgiveness is on the horizon, you’d still be responsible for any remaining debt over that limit.
“If you can afford to make the payments and you owe more than $10,000, you should absolutely be taking advantage of the 0% interest period to chip away at your debt,” Mayotte said. “But there’s no harm in taking that extra amount that you would be making in payments and socking it away somewhere you could earn some interest.”
As the forbearance deadline approaches, you can then use those saved payment amounts to make a lump-sum payment.
If you have less than $10,000 in student loans? Then it might pay to wait out the forbearance period, since forgiveness could potentially be approved in this time period.
However, you should continue to set aside the extra amount you would’ve paid and make the lump sum payment at the end of forbearance — if forgiveness doesn’t end up panning out.
3. Are You on the PSLF Track?
If you’re pursuing Public Service Loan Forgiveness — you have a direct loan, you’re on an eligible repayment plan and you work for a qualifying employer — then you can and should take advantage of the relief period by making no payments.
Those zero-dollar payments still count toward your total to earn forgiveness, and if your loans happen to be forgiven during this period, all the better.
Despite their eligibility, Mayotte said she knows of numerous cases where PSFL participants have continued to make payments — which might be understandable given the numerous issues that have beleaguered PSLF over the years (like borrowers discovering years’ worth of payments didn’t count because they were on the wrong repayment plan).
If you have been making payments since March, you can reach out to your servicer to request a refund for those payments.
But if you’ve lost your job or have had your hours cut to less than the 30-hour minimum, your non-payments will not count toward forgiveness (but you still don’t have to pay while in the forbearance period).
PSLF does not require consecutive payments, so you can still pause on payments if you think you’ll return to your non-profit or public sector job.
However, if you think it’s unlikely you’ll get eligible employment again, you may want to take advantage of the forbearance period to start paying on the loan. At the very least, you should update your income (if you’ve lost your job) on your income-driven repayment plan.
4. What Kind of Degree Do You Have?
If you have loans that you took out to get an advanced degree, don’t bank on forgiveness.
“People with advanced degrees are unlikely to get mass forgiveness, if any forgiveness, from the government because you’re seen as part of a society that has greater upward mobility,” Muszynski said.
Although undergrad loan debt may still be eligible for forgiveness, your graduate Plus loans are less likely to be included in a forgiveness plan. They’re also likely to have higher interest rates, which means the forbearance period is a good time to be putting a dent in that debt.
However, as with all federally held loans, Mayotte said she’d advise against refinancing into a private loan.
“I’m running into a lot of people right now who are kicking themselves because in the last couple years they did refinance their federal loan into private,” she said. “Now they can’t get the 0% and if [the government] does forgiveness, it’s not going to happen for them.
“They’re begging for a way to take it back, and you can’t.”
5. How Close Are You to Retirement?
If you’re nearing retirement and paying on student loans — whether it’s your own loans or those you took out to pay for your kids’ education — forgiveness may potentially help you wipe out some of your loans. Focusing on saving as much as you can for retirement may be the better bet during this forbearance period.
“Retirement should always come first as far as deciding where your money goes,” Mayotte said.
If you default on student loans after forbearance ends, the loans can be sent to collections, and your wages, tax returns and Social Security benefits may be garnished up to 15% for repayment.
But solely relying on forgiveness is probably not the best strategy, especially if you have more than $10,000 in loans or took out loans to get an advanced degree. In that case, you should start preparing for a future with a fixed income by aggressively paying off the student loan debt and looking into an income-driven repayment plan.
“Understand that you might be 80 years old when the loan is finally gone but at least the payments are going to be affordable and [they’re] not going to change,” Mayotte said.
6. What Does the Rest of Your Financial Situation Look Like?
All of these strategies for getting the most bang for your buck may not mean much if you’re struggling to pay the bills. If you are in a situation where you need the money to pay for your basic needs, take advantage of the forbearance period to get yourself back on your feet and to start building an emergency fund.
Also take into account how using this time to pay off student loans might help your stress levels vs. betting on forgiveness.
“Student loan debt can feel suffocating, and getting out of it can be a mental health benefit,” Muszynski said. “It’s important for people to recognize how they think about their debt, and whether they would prefer to be rid of it so they could be healthier from a mental perspective.”
Tiffany Wendeln Connors is a staff writer/editor at The Penny Hoarder. Read her bio and other work here, then catch her on Twitter @TiffanyWendeln.
Grocery delivery startup Dumpling is taking on Instacart and Shipt — and the whole gig economy — by offering grocery delivery drivers an entirely new moneymaking model.
Thanks to a surge in demand as a result of the pandemic, grocery delivery apps are more popular than ever. Since last March, Instacart and Shipt have hired more than half a million gig workers to shop and deliver food to customers who’d rather stay at home and order online.
Those hordes of gig workers, who are independent contractors, rely on grocery delivery to supplement their earnings or make up their income entirely. While this arrangement is a welcome and fast form of cash for some folks, others are finding that the income from Instacart and Shipt is unsustainable.
That’s where Dumpling comes in: capitalizing on the growing trend of grocery delivery as well as the rising concerns of delivery workers who want more control over their income by allowing them to choose who to work with and how much to charge.
Here’s a look at one of the newest grocery delivery apps on the block, and how you could use it to launch your own grocery delivery business.
What Is Dumpling?
Dumpling is a grocery delivery service founded in 2017 by Tom Schoelhammer, Nate D’Anna and Joel Shapiro, who all left corporate tech jobs to try their hands as entrepreneurs.
On the customer side, Dumpling operates much like other grocery shopping apps: You download the app, select a nearby grocery store, choose what items you want to buy, place your order and voila, a nearby personal shopper will deliver the items to your doorstep.
Where Dumpling differentiates itself is in how it’s used by delivery workers. It is essentially a suite of software and coaching services for those looking to launch their own small grocery-delivery business.
As a shopper for Dumpling, you’re considered a small business owner, not a gig worker.
According to the company, more than 2,000 small business owners from all 50 states use Dumpling to deliver groceries locally.
Dumpling markets itself aggressively as a “personal, ethical and local” alternative to Instacart and Shipt, which rely on an army of gig workers to do the shopping.
Since its launch and especially during the pandemic, Dumpling and its co-founders have become increasingly outspoken about the downsides of the gig economy.
“What can we do to help more people gain greater control, autonomy, and flexibility over the way they work?” Dumpling’s website states. “When we set out to find an answer, we didn’t know we’d eventually be taking on the gig economy.”
But does the company provide a meaningful alternative?
How It Works for Dumpling Shoppers (aka Business Owners)
As a grocery shopper for Dumpling, you’ll have more autonomy than with typical gig apps.
In a training video for new Dumpling shoppers, Bree Crawford, director of coaching at Dumpling, contrasts the company with other shopping gigs.
“As a prior Instacart shopper, I have a pretty good idea of some of the questions you’re going to run into,” she said. “With Instacart, we’re used to just sitting around waiting for batches, and it’s just stupid.”
With Dumpling, you can choose who you want to deliver to, set how much you want to charge per delivery, select the stores where you want to shop, schedule deliveries in advance and more.
But that autonomy comes at a cost.
Dumpling Shopper Fees
To start your shopping business, you need to pay a one-time fee, currently $19.99, for an activation kit. The activation kit includes:
- A Dumpling business credit card that you’ll use for your orders.
- Access to a personal shopper website hosted by Dumpling.
- 100 business cards.
- Access to the “Boss” version of the Dumpling app, which you’ll need to connect with clients.
“The Dumpling credit card works as a micro loan to business owners. When the client places an order, the credit card is funded for the business owner to shop and pay for the order,” Shapiro told The Penny Hoarder. “This system allows Dumpling business owners to shop all orders without fronting any funds themselves.”
The company also offers Pro and Tycoon monthly membership plans for business owners, which give you access to better credit-card and business-profile perks. Pro costs $49 per month, and Tycoon costs $99 per month. A standard plan is free.
You can expect the activation process to take about a week.
In addition to the activation fees, you pay two fees per grocery order: a credit card processing fee and a “platform” fee. The credit card fees are tiered based on your membership category.
Under the standard plan, you pay 3.9% of the order total, including gratuity, plus 30 cents. If you’re Pro, you pay 3.2% plus 30 cents. Tycoons pay 2.8% plus 30 cents. The platform fee is a flat 5% of the cost of groceries sans delivery and gratuity for all membership levels.
For example, if you have a $100 grocery order, plus your delivery charge of $10 (which you can customize) and a $20 tip, here’s how your earnings would break down under the free standard plan.
- Gross order earnings: $30 ($10 order charge plus $20 tip).
- Credit card processing fee: $5.26 (3.9% of $135 plus 30 cents).
- Platform fee: $5.00 (5% of $100 worth of groceries).
- Net order earnings: $19.74.
According to Shapiro, the average earnings per order are $40, “which is significantly higher than traditional gig work platforms for grocery delivery.”
Previously, you could set a fixed minimum gratuity percentage up front for every order, but Dumpling recently removed that feature, according to app store reviews.
To prevent tip baiting, a practice where some Instacart customers lure shoppers in with big tips up front only to zero them out after the order, Dumpling does not allow your customers to reduce their tips after the delivery. They can only increase it.
The trick is to find the right delivery charge. Too high, and you risk driving your customers to Instacart, Shipt or another Dumpling deliverer. Too low, and those fees eat away at your tip.
Once you set up your Dumpling account and receive your activation kit, you’re eligible for free coaching. The initial coaching session is a basic onboarding call in which a Dumpling coach will show you the ropes.
After that, you can receive additional coaching free of charge. The program includes three calls with one of Dumpling’s staff coaches, “all of whom have backgrounds in grocery delivery gig work and run successful businesses on Dumpling themselves,” Shapiro said.
The coaching program can start at any time so long as your account is active, with each session spaced out “a few weeks apart.”
Coaches can help you with a range of things like utilizing your business website, app functionality and marketing tips. Between sessions, coaches can help with smaller questions, too.
After the three coaching sessions, you may be able to get more assistance if needed.
“Dumpling business owners never have to pay money to access this program,” Shapiro said. “However the coaches do ask for their undivided attention and that they continue putting in the effort on their own business to remain in the program.”
Finding Your Own Customers
Perhaps the most notable difference between Dumpling and other grocery shopping gig apps is that, as a business owner, you’re responsible for finding your own customers.
There are several ways to connect with them, and Dumpling does assist you with this, but the process is not automatic.
For example, with Shipt or Instacart, you log on and wait for an order to pop up on your app. Then you can choose to accept or decline, knowing little to nothing about the customer. Or it’s possible that an order will be claimed by competing shoppers in your area before you have a chance to act.
At Dumpling, you’ll need to interact much more with customers — with the ultimate goal of scheduling them on a recurring basis. And the initial order could take some leg work.
Since Dumpling is a relatively new company with fewer customers than competitor grocery delivery apps, you may find yourself giving a sales pitch: first to explain what Dumpling is, and second, to convince the customer to schedule you for grocery orders through the app.
Customers may also find you through a ZIP code search function on the Dumpling website and app or directly from your personal Dumpling business site. But that’s assuming that one of your neighbors is already familiar with the company.
Dumpling is not for every gig worker. It takes a certain amount of risk tolerance. Given the activation and processing fees, there is a chance you could go in the red on some orders, and there’s no guarantee that you’ll get any orders in the first place.
What Dumpling does offer you is more autonomy and control over your grocery-delivery enterprise — something many gig workers, whose earnings are based on ever-changing algorithms, are craving.
Adam Hardy is a former staff writer at The Penny Hoarder.
Once you’ve built up that emergency fund, make sure you’re getting your other financial ducks in a row.
Ready to stop worrying about money?
What to Do if You’re Struggling, According to Suze Orman
When it comes to the state of our finances, the pandemic has not affected us all equally.
“Everybody should live absolutely below their means but within their needs,” Orman said. “They should not be spending what they can afford. They should be spending less than what they can afford to spend. You should be saving money and saving money, because the truth of the matter is you can never be too rich.”
Personal finance expert Suze Orman describes it as creating a situation of haves and have-nots. Some people have actually prospered over the past year with lowered spending and the bonus of stimulus money. Others are barely keeping their heads above water after becoming unemployed and depleting their savings.
Orman suggested taking advantage of federal student loan forbearance and just paying the minimum on other debt payments.
If you’re a homeowner with equity built up, consider taking out a home equity line of credit (or HELOC) — even if you don’t need to use it right away. Tapping money from a HELOC is better than taking money from a retirement account, Orman said.
“I do not want to see you take this money and pay down credit card debt with it,” she said. “I do not want to see you take this money and pay off something that you owe, whatever it might be.”
What to Do if You’re Thriving, According to Suze Orman
No matter if you’re struggling or have benefited financially during the pandemic, being conscious about how you spend your money is important. While we may be closer to the end of this pandemic than we were a year ago, there’s still a good deal of uncertainty on the horizon.
If the pandemic has put you in a situation where you’re struggling financially, Orman said your focus should be on holding tight to whatever money you can get. If you get stimulus money or unemployment checks, use that cash to meet your immediate needs and save any extra.
Besides having a steady job, Orman recommended having a 12-month emergency fund. Forget the common advice of having three to six months of expenses saved up. All that’s happened over the past year shows us we need to have a vast safety net.
Orman shared her thoughts on what both groups should do to ride out the pandemic during a virtual event hosted by Visionary Women on Feb. 3. Visionary Women is a Los Angeles-based women empowerment nonprofit. Get the Penny Hoarder Daily
You might have to seek out assistance to cover your basic needs but don’t let that bring you down.
“I don’t care if your FICO score goes down,” she said. “I care that you have the ability to feed yourself and your children.”
Suze Orman’s Pandemic Advice for Everyone
If for some reason, things go south and you end up needing to file for bankruptcy, the money in your 401(k) will be safe.
“It makes absolutely no sense to withdraw money from a 401(k),” Orman said. “Do you know that your retirement accounts are not affected in bankruptcy?”
Nicole Dow is a senior writer at The Penny Hoarder. <!–
TV personality Suze Orman speaks at the Women’s Conference Tuesday, Oct. 26, 2010, in Long Beach, Calif. Matt Sayles/AP Photo
If you’ve ever searched for a home to buy, you know the first step is mortgage pre-approval — and in today’s competitive market, you likely need to have it before you even put in an offer.
But if you’re like one-fifth of Americans, an error on your credit report could mean banks could be scared of lending to you and won’t give you a pre-approval. And even if they do, it could be for an absurd loan rate that can cost you tens of thousands of dollars or more by the time you pay off the house — yikes.
So if you didn’t see that roadblock coming, your dream house could be someone else’s before you have a chance to fix it.
That’s why you need to make sure your credit report card is free of errors and your score is in tip-top shape before you even start Zillow-ing. A free website called Credit Sesame makes it super easy to check for issues and can help you raise your score. And when you do improve, you can earn cash rewards every 30 days!1
By signing up for a free account with Credit Sesame, you’ll have quick access to your score and personalized tips on how to improve it. You’ll also get free credit monitoring and ID protection, meaning no surprises when you start the homebuying process.
It takes about 90 seconds to join the free service. And you don’t need to put in your credit card — meaning no sneaky subscriptions.
Being prepared before you put an offer on the corner lot starts with a clean credit report and a high credit score. Just enter your email address here to sign up for your free account with Credit Sesame. It could be the first step toward your dream home.
Kari Faber is a staff writer at The Penny Hoarder.
1 This is a limited time offer. To be eligible for cash rewards, a deposit of $25.00, every 30 days, must be made into your Sesame Cash account. Rewards earnings are available for credit score improvements of ten points or more within a 30-day reward cycle. Improvements are calculated from your baseline credit score, as determined by Credit Sesame. Please review the full program terms for more details.
You can buy shampoo for $3 and you can buy it for $30. They’ll both get the job done — so what’s the difference?
Do you really need to spend a small fortune to get good results, or is it possible to find inexpensive shampoo that leaves your hair healthy and happy?
We spoke to dermatologists and hair experts for their best tips on identifying quality shampoo that’ll keep your locks clean and healthy.
Here’s What Shampoo Actually Is…
Shampoo consists of two basic components: water and surfactants, which are responsible for the lathering and cleansing.
Those two elements comprise between 50-80% of the contents, says Nikki Goddard, a certified hair stylist and shampoo expert from San Jose, and senior editor at The Right Hairstyles magazine.
The rest includes silicone, thickening agents, perfume, natural oils and extracts.
…and Here’s Why Some of Them Are So Expensive
Both cheap and inexpensive products contain surfactants that remove oil and dirt almost equally well. So why are some of them so outrageously expensive, while others cost less than $5?
Sometimes the higher prices are simply due to marketing, says Anna Chacon, a board-certified dermatologist based in South Florida.
“Other times, I think it could be due to imported materials or products that may come with their own unique high costs,” she said.
The shampoos may also have fragrances and conditioning agents to leave hair feeling soft and smelling good, says Vanessa Thomas, a cosmetic chemist, founder of Freelance Formulations.
And some professional product lines made for hair salons can include components and formulations that actually do improve the health of the hair and the scalp, says Goddard. For example, she says sulfate-free and all-natural products usually cost more, but she believes the higher price is justified.
Shampoo Ingredients to Seek Out — and Ones to Avoid
You can get a sense of which inexpensive shampoos will be of good quality by checking out the ingredient list. Look for these ingredients, all of which serve a purpose in keeping your hair clean and healthy:
- Moisturizing agents (glycerin, hyaluronic acid, lanolin)
- Anti-sebum ingredients (ketoconazole, piroctone olamine, zinc)
“Note that adding vitamins, fruit acids, antioxidants, SPF agents and less than 25-30% herbal extracts makes no point,” Goddard said. “They won’t penetrate and nourish hair.”
If you see superficially active substances (SAS) like magnesium laureth sulfate, decyl glucoside, lauryl glucoside along with those moisturizing agents, you can safely assume the shampoo will be an effective product.
Of course, you should also take your own specific needs into consideration.
If you have skin-related conditions, like eczema or dandruff, you’ll want to look for shampoos that contain ketoconazole, selenium sulfide and/or pyrithione zinc, which are antifungal agents that can help treat itching, flaking and dry skin on your scalp, says Dawn Clemens, founder of Larwe Hair.
On the other hand, try to avoid sulfates, paraffins, silicones and peroxides within haircare products, as they add frizz and can damage your hair, Chacon said.
Make sure that a cheap shampoo does not include toxic SAS (which includes the majority of sulfates, cetrimonium chloride, lauramide DEA, and PEG-150 distearate), mineral oil, BHA and BHT, Goddard said.
You should also try to avoid formaldehyde, triclosan, dimethicone, cocamide MEA and artificial perfume agents, Goddard said. These chemicals have come under scrutiny for a variety of reasons. For instance, the FDA banned triclosan for use in hand and body washes in 2016, while formaldehyde can pose a problem for people with sensitive skin.
Should You Ever Opt for More Expensive Shampoo?
Women who have specific hair concerns may need to opt for something a little pricier. Typically, cheaper shampoo brands sell products that aren’t necessarily geared toward a specific hair type, Thomas said.
If you have specific needs for your hair, here’s what you should look for when shopping for shampoo:
- Dry, damaged hair: Avoid clarifying shampoo, which are clear shampoos focused on removing oil from the scalp. Instead, opt for shampoos and conditioners with moisturizing ingredients like glycerin and avocado oil.
- Fine hair: Avoid heavy moisturizing shampoos, especially those containing silicones, which will weigh down the hair. Silicones are best for controlling frizz, as they coat the hair follicle, locking out moisture.
- Thick, coarse hair: Opt for a product containing oils and humectants in a creamy formula, and avoid volumizing shampoos, Thomas says. Because Black hair tends to be dryer and textured, Black women typically wash their hair once per week or may co-wash, which is washing your hair using only a conditioner. If you have dry, brittle hair that’s washed too often, it may be bad for your hair’s health.
3 of the Best Cheap Shampoos That Pass the Ingredient Test
Here are three inexpensive shampoos that have the ingredients you want — and none of the ones you don’t.
- Dove Daily Moisture Shampoo: It’s got glycerin to keep hair super moisturized and soft, and the scent is nice and subtle. ($3.49 at Target)
- Pantene Fortifying Damage Repair Shampoo with Castor Oil Got some damage? This will strengthen your hair, thanks to the castor oil. ($8.69 at CVS)
- Neutrogena Shampoo The Anti-Residue Shampoo Use this just once a week to remove up to 90% of residue caused by your products and other shampoos. It’s made for every hair type. ($6.99 at Neutrogena)
Danielle Braff is a contributor to The Penny Hoarder.
Discovering that you owe the IRS money is never a good feeling. If you’re staring down a tax bill you can’t afford to pay from 2020, you’re no doubt in good company.
Countless people have turned to gig work to survive, which can result in surprise tax bills. Expanded jobless benefits have been a lifeline to millions, but even unemployment benefits are taxable. With confusion about PPP loans, the CARES Act retirement rules and the payroll tax “holiday”, it’s a safe bet that this year’s tax season will be even more migraine-inducing than ever.
4 Smart Strategies for Dealing With a Tax Bill You Can’t Afford
The most important thing to know if you owe: You do have options. But it’s essential that you take action. Here are four mistakes to avoid — and what to do instead.
Mistake #1: You don’t file a tax return because you can’t pay your bill.
The smart strategy: File a return, even if you can’t afford to pay.
The penalties for not filing a tax return are much tougher than the penalties for not paying on time. Here’s how it works:
- If you don’t file a tax return: You’ll pay a 5% monthly late fee, up to 25% of the tax bill, plus interest.
- If you file your tax return on time but don’t pay: Your late fee is just 0.5% per month, also capped at 25% of the bill, plus interest.
Note that filing for a tax extension only gives you more time to file. It doesn’t give you more time to pay taxes if you owe. But if you ask for an extension by April 15 and file your return by the Oct. 15 deadline, you’ll only be paying the lower late payment fee instead of the 5% monthly fee for filing a late return.
When you don’t file a tax return, the IRS can file a substitute return on your behalf. If that happens, you’ll still want to file your own return. The substitute return won’t include tax deductions and tax credits that could potentially lower your bill.
Mistake #2: Using a credit card or cash advance to pay your taxes.
The smart strategy: Apply for an IRS payment plan.
This one’s a head-scratcher because even the IRS suggests paying taxes you can’t afford with a credit card or cash advance. Apparently, the IRS doesn’t realize its own generosity as a creditor.
A much better option is to apply for an IRS installment plan. You’ll still accrue penalties and interest. But when you sign up for an installment plan, the monthly 0.5% late fee drops to 0.25%. With interest, that works out to 6% annually.
By comparison, a typical credit card APR hovers above 16%. Cash advance APRs are a gut-punching 25% on average, plus they often come with additional fees.
Typically, the IRS will automatically approve your agreement if you owe less than $10,000 and you agree to pay off your bill within three years, with no monthly payments required. If you owe more or need more time to pay, the IRS could technically ask for more financial information. But as long as your balance is $50,000 or less, odds are still high that you’ll be automatically approved. The maximum repayment time frame is 72 months, so your monthly payments can be as low as 1/72 of your balance.
Agree to the lowest monthly payment the IRS will accept and then pay extra each month if you can.
You’ll pay a $31 fee if you apply online and have money automatically withdrawn from your bank account each month. The fees are higher if you set up the plan by phone, in person or by mail, or if you choose a different payment method. Setup fees can be waived if the IRS considers you low income, which means your income is below 250% of the federal poverty level for your state.
While you’re in a payment plan, any future tax refunds will be applied to your balance until you’ve paid it off. But the IRS won’t take further action, like garnishing your wages or placing a lien on your property, as long as you’re paying as agreed.
Mistake #3: Hiring a tax settlement company.
The smart strategy: Negotiating with the IRS yourself.
If you’re seriously delinquent on taxes, you may need professional help. If you fall in this camp, only an attorney, a CPA or a type of tax adviser called an enrolled agent can represent you before the IRS. But most people who owe taxes won’t need the help of a pro.
Be extremely wary of companies that claim they can stop wage garnishments or settle your debt for a fraction of what you owe. The FTC warns that the vast majority of taxpayers don’t qualify for the programs they’re hawking. Many people who use these companies don’t get tax relief. Instead, they wind up deeper in debt due to high upfront fees and unauthorized charges.
You typically don’t need assistance to set up a payment plan. But even if you can’t afford to start paying your bill or your installment agreement isn’t approved, you do have options for negotiating with the IRS.
One option is to ask for currently not collectible status, which means the IRS will pause collection efforts until your financial situation improves. You’ll still owe taxes, and interest and penalties will continue to accrue. The IRS will require you to show proof of significant hardship and document your income, spending and assets.
Another possibility is an offer in compromise, which allows you to settle your tax debt for less than you owe. You can do this either with a lump-sum payment or with monthly installment payments. The IRS rejects most applications for an offer in compromise. Typically, your tax bill has to be large enough that the IRS agrees it can’t realistically collect what you owe. Use the IRS Offer in Compromise pre-qualifying screener to determine whether this could be an option.
Mistake #4: Taking a 401(k) withdrawal.
The smart solution: If you must touch your retirement money, stick with a 401(k) loan or your Roth IRA contributions.
We’d recommend an installment plan hands-down over touching your retirement money. But if that’s not an option — or if you’re determined to get rid of this tax debt ASAP at any cost — an early 401(k) withdrawal should only be the last option..
With an early 401(k) withdrawal, you’ll be racking up more taxes just to pay your taxes. Your distribution will be taxed as ordinary income, plus you’ll pay a 10% penalty.
A 401(k) loan may be a better option since you won’t be penalized. But it’s still risky. If you left your job for any reason, you’d have to repay the loan in full when you file your tax return the next year. Otherwise, it’s treated as an early withdrawal.
If you’re using retirement money to pay taxes, start with your Roth IRA if you have one. If you can limit your withdrawals to your contributions, you won’t pay taxes or a penalty, since that money has already been taxed.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. She writes the Dear Penny personal finance advice column. Send your tricky money questions to [email protected]