Using a Personal Cash Flow Statement

If you’re often surprised when you open up your credit card and bank statements and see how much money you spent, or you worry that your cash outflow may be exceeding your cash inflow, there could be a simple solution: A personal cash flow statement.

Creating a personal cash flow statement can give you a clear picture of your monthly cash inflow (money you earn) and your monthly cash outflow (money you spend) to determine if you have a positive or negative net cash flow.

And while it may sound intimidating, creating a personal cash flow statement is relatively simple. All you need to get started is to gather up your bank statements and bills for one month (or more). Then, it’s a matter of some basic calculations.

Once you have your personal financial statement, you’ll know where you currently stand. You’ll also be able to use your personal financial statement to help you create a budget and goals for increasing your net worth.

Here’s how to start getting your financial life back into balance.

What Is a Personal Cash Flow Statement?

“Cash flow” is a term commonly used by businesses to detail the amount of money flowing in and out of a company.

Companies can use cash flow statements to determine how well the company is generating cash to pay its debts and operating expenses.

Just like the ones used by companies, tracking your own cash flow can provide you with a snapshot of your financial condition.

You might learn, for example, that you have less leftover at the end of each month than you thought, or that you are indeed going backwards.

Once you have the numbers down in black and white, you can then make any needed changes, such as reducing costs and expenditures, increasing income, and making sure that your spending is in line with your goals.

So, how do you set up a personal finance cash flow statement?

It might seem overwhelming to get started, but these steps can simplify the process.

Listing all Your Sources of Income

A good first step when creating a personal cash flow statement is to get out all of your pay stubs, bank statements, credit card statements, and bills.

Next, you’ll want to start listing any and all sources of income–the inflow.

Cash inflows generally include: salaries, anything you make from side hustles, interest from savings accounts, income from a rental property, dividends from investments, and capital gains from the sale of financial securities like stocks and bonds.

Since a cash flow statement is designed to give a snapshot into the overall flow of where your money is coming from and where it is going, you might want to avoid listing money in accounts that aren’t available for spending.

For example, you may not want to list dividends and capital gains from investment accounts if they are being automatically reinvested, or are part of a retirement account from which you aren’t actively taking withdrawals.

Since income can vary from one month to the next, you might choose to tally inflow for the last three or six in order to come up with an average.

Once you’ve collected and listed all of your income for the month, you can then calculate the total inflow.

Listing all of Your Expenses

Now that you know how much money is coming in each month, you’ll want to use those same statements and bills, as well as any statements for any debts (such as mortgage, auto loan, or student loans) to list how much was spent during the month.

Again, if your spending tends to fluctuate quite a bit from month to month you may want to track it for several months and come up with an average.

To create a complete picture of how much of your money is flowing out each month, you’ll want to include necessities like food and gas, and also discretionary expenses, such as trips to the nail salon or your monthly streaming services.

Small expenses can add up quickly, so it’s wise to be precise.

Once you’ve compiled all of your expenses, you can calculate the total and come up with your total outflow for the month.

Determining Your Net Cash Flow

To calculate your net cash flow, all you need to do is subtract your monthly outflow from your monthly inflow. The result is your net cash flow.

A positive number means you have a surplus, while a negative means you have a deficit in your budget.

A positive cash flow is desirable, of course, since it can provide more flexibility, and can allow you to decide how to best use the surplus.

There are a variety of options. You could choose to save for an upcoming expense, make additional contributions to your retirement fund, create or add to an emergency fund, or, if your savings are in good shape, consider a splurging on something fun.

A negative cash flow can signal that you are living a more expensive life than your income can support. In the future, maintaining this habit could lead to additional debt.

It’s also possible to have net neutral cash flow (all money coming in and going out is fairly equal).

In that case, you may still want to jigger things around if you are not already putting the annual maximum into your retirement fund and/or you don’t have a comfortable emergency cushion.

The Difference Between a Personal Cash Flow Statement and a Budget

A personal cash flow statement provides a comprehensive look at what is currently coming in and going out of your bank accounts each month.

A cash flow statement tells you where you are.

A personal budget, on the other hand, helps you to get where you want to go by giving you a spending plan that is based on your income.

A budget can provide you with some general spending guidelines, such as how much you should spend on groceries, entertainment and clothing each month so that you don’t exceed your income–and end up with a negative net flow.

Creating a budget can also be a good opportunity to check in with your financial goals.

For example, are you on track for saving for retirement? Do you want to amp up your emergency fund?

Are you interested in tackling the credit card debt that has been spiraling due to high interest rates?

Perhaps you want to work toward paying off your student loans.

Whatever your goal, a well-crafted budget could serve as a roadmap to help you get there.

Using Your Personal Financial Statement to Create a Simple Budget

Because a cash flow statement provides a comprehensive look at your overall spending habits, it can be a great jumping off point to set up a simple budget.

When you’re ready to create a budget, there are a variety of resources online, from apps, like SoFi Relay®, to spreadsheet templates and printable worksheets .

A good first step in creating a budget is to organize all of your monthly expenses into categories.

Spending categories typically include necessities, such as rent or mortgage, transportation (like car expenses or public transportation costs), food, cell phone, healthcare/insurance, life insurance, childcare, and any debts (credit cards/ loans).

You’ll also need to list nonessential spending, such as cable television, streaming services, concert and movie tickets, restaurants, clothing, etc.

You may also want to include monthly contributions to a retirement plan and personal savings into the expense category as well.

And, if you don’t have emergency savings in place that could cover at least three to six months of living expenses, consider putting that on the spending list as well, so you can start putting some money towards it each month.

Once you have a sense of your monthly earnings and spending, you may want to see how your numbers line up with general budgeting guidelines. Financial counselors sometimes recommend the 50/30/20 model, which looks like this:

•  50% of money goes towards necessities such as a home, car, cell phone, or utility bills.
•  30% goes towards your wants, such as entertainment and dining out.
•  20% goes towards your savings goals, such as a retirement plan, a downpayment on a home, emergency fund, or investments.

Improving Your Net Cash Flow

If your net cash flow is not where you want it or, worse, dipping into negative territory, a budget can help bring these numbers into balance.

The key is to look closely at each one of your spending categories and see if you can find some ways to trim back.

The easiest way to change your spending habits is to trim some of your nonessential expenditures. If you’re paying for cable but mostly watch streaming services, for example, you could score some real savings by getting rid of that cable bill.

Not taking as many trips to the mall or cooking (instead of getting takeout) more often could start adding up to a big difference.

Living on a budget may also require looking at the bigger picture and finding places for more significant savings.

For example, maybe rent eats up 50% of your income and it’d be better to move to a less costly apartment. Or, you might want to consider trading in an expensive car lease for a less pricey or pre-owned model.

There may also be opportunities to lower some of your recurring expenses by finding a better deal or negotiating with your service providers.

You may also want to look into any ways you might be able to change the other side of the equation–the inflow.

Some options might include asking for a raise, or finding an additional income stream through some sort of side hustle.

The Takeaway

One of the most important steps towards achieving financial wellness is cash flow management–i.e., making sure that your cash outflow is not exceeding your cash inflow.

Creating a simple cash flow statement for yourself can be an extremely useful tool.

For one reason, it can show you exactly where you stand. For another, a personal cash flow statement can help you create a budget that can bring the inflow and outflow of money into a healthier balance.

Creating–and sticking with–a budget that creates a positive net cash flow, and also allows for monthly saving (for retirement, a future purchase, or a rainy day) can help you build financial security and future wealth.

If you need help with tracking your spending, a SoFi Money® cash management account may be a good option for you.

With SoFi Money, you can see your weekly spending on your dashboard, which can help you stay on top of your spending and make sure you are on track with your budget.

Check out everything a SoFi Money cash management account has to offer today!



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Source: sofi.com

Capital One Walmart Rewards Credit Card – Review

Advertiser Disclosure: This post includes references to offers from our partners. We receive compensation when you click on links to those products. However, the opinions expressed here are ours alone and at no time has the editorial content been provided, reviewed, or approved by any issuer.

Learn more about this card and find out how you can apply here.

The Capital One® Walmart Rewards™ Card, also known as the Capital One Walmart Rewards Mastercard, is a cash-back credit card with no annual fee. It’s designed for regular Walmart shoppers, especially those who frequent Walmart.com, and backed by one of the most popular credit card issuers around (Capital One).

Purchases at Walmart.com and the Walmart app, including groceries and sales marked for in-store pickup, earn unlimited 5% cash back. You earn unlimited 2% back for purchases made inside Walmart stores, at eligible restaurants and travel merchants, and at Walmart and Murphy USA gas stations — making this a solid contender for one of the best gas credit cards as well. All other purchases, including purchases at Sam’s Club locations and SamsClub.com, earn unlimited 1% cash back.

Beyond the rewards program, this card’s benefits are nothing to write home about, and the interest rates are on the high side. But the underwriting requirements are relatively loose, so this is an ideal first credit card for Walmart enthusiasts looking to build or improve their credit. With no annual fee and a rewards program that’s quite generous for Walmart and Murphy USA shoppers, the Walmart Rewards Card is worth keeping in your wallet.

Here’s how to get the most out of this card.

Key Features

These are the most important features and perks of this popular retailer credit card.

Sign-Up Bonus

For a limited time, get $50 when you spend $300 in purchases in the first 3 months. Plus, earn an additional 3% back when you use Walmart Pay for purchases made at Walmart stores for the first 12 months from account opening, for a total of 5% cash back on in-store Walmart purchases during the first 12 months.

Earning & Redeeming Cash-Back Rewards

The Walmart Rewards Card has a three-tiered cash-back program:

  • Online purchases made at Walmart.com and through the Walmart app, including grocery pickup purchases and other purchases marked for in-store pickup at any physical Walmart location, earn unlimited 5% cash back (rewards rate).
  • Purchases made at Walmart and Murphy USA gas stations (fuel stations), inside Walmart stores (store purchases completed at checkout), and with eligible restaurant and travel merchants earn unlimited 2% cash back.
  • All other purchases, including those made at Sam’s Club locations, earn unlimited 1% cash back.

Cash back is automatically delivered at the end of the billing cycle and does not expire as long as your account remains open and in good standing. Your best redemption option is to redeem accumulated cash back for statement credits against eligible purchases made during the prior 90-day period.

Possibility of Promotional Interest-Free Period

The Walmart Rewards Card does not advertise a continuous introductory interest-free or low APR purchase or balance transfer promotion. However, its terms do include mention of special promotional periods that can eliminate interest charges for as long as 24 months at a stretch.

The interest-free period may apply to specific purchases or any purchases made while the promotion is active, depending on the terms of the promotion and Walmart’s discretion. It doesn’t necessarily apply only at sign-up, making it more versatile than standard introductory interest-free promotions.

Important Fees

This card has no annual fee or foreign transaction fee.

Credit Required

This card requires an average or better credit score. Although serious credit blemishes such as recent personal bankruptcies are likely to disqualify your application, more minor issues may not. It’s therefore an ideal credit card for consumers in the process of mending their credit.

Advantages

These are the most important advantages of the Capital One Walmart Rewards Mastercard.

  1. No Annual Fee. The Walmart Rewards Card doesn’t charge an annual fee. This is great news for frugal cardholders and occasional Walmart shoppers who want to keep this card in their wallets without paying for the privilege.
  2. 5% Cash Back at Walmart.com. Frequent Walmart.com shoppers will love this card’s unlimited 5% cash back on the retail giant’s website. The same rate applies to grocery purchases and purchases marked for in-store pickup, so it’s perfect for bulky or heavy items for which shipping is costly or impractical.
  3. Potential for a Long Introductory APR Period. Although it doesn’t have a regular interest-free or low APR introductory promotion, this card does have periodic promotions that eliminate interest across the board or on specific purchases for as long as 24 months at a time. That’s great news for cardholders planning big-ticket purchases that they can’t afford to pay off right away.
  4. Loose Underwriting Requirements. This card is available to applicants with average or better credit. Although your approval is never guaranteed, you stand a better chance of making it through the application process with this card than with better-known cash-back cards that require excellent credit.
  5. Bonus Cash Back on Restaurant and Travel Purchases. This card earns 2% cash back on restaurant and travel purchases, making it a solid companion for diners and travelers without more generous travel rewards credit cards in their wallets.
  6. No Penalty APR. The Walmart Rewards Card doesn’t charge penalty interest on past-due payments. If you occasionally miss your statement due date due to irregular cash flow or unexpected expenses, you don’t have to worry about getting locked into a sky-high rate indefinitely.

Disadvantages

Consider these drawbacks before applying for a Capital One Walmart Rewards Mastercard.

  1. Only 90 Days to Redeem Cash Back for Account Credits. When redeeming cash back for account credits, you’re only allowed to offset purchases going back 90 days. If you haven’t used your card for longer than that, you’ll need to make a purchase just to redeem your cash back.
  2. No Bonus Cash Back on Purchases Made at Sam’s Club Stores. This card earns just 1% cash back on purchases made at physical Sam’s Club stores. If you prefer to shop in person at the country’s second most popular warehouse store, you won’t get any more out of this card than any other standard-issue cash-back credit card — and possibly less. Several higher-earning cards such as the Capital One Quicksilver Cash Rewards Credit Card offer unlimited 1.5% cash back on all eligible purchases.

Final Word

The Capital One® Walmart Rewards™ Card is a great entry-level cash back credit card for regular Walmart shoppers and drivers who encounter Walmart and Murphy USA stations in their daily travels.

Despite its relatively loose underwriting standards, the Walmart Rewards Card isn’t for everyone. If you don’t qualify for this card, look instead to the Walmart Credit Card, a store credit card with a similar rewards scheme.

The Walmart Credit Card isn’t backed by Mastercard or any other credit card payment network, so you can’t use it at merchants other than Walmart, but it’s nevertheless a great rewards-bearing vehicle for folks looking to build credit. And, considering you can buy pretty much anything at Walmart or Walmart.com, it’s versatile enough.

Source: moneycrashers.com

Women pay higher mortgage rates in 49 states

In Mississippi, single women on average paid 3.47% on a 30-year, conventional fixed-rate mortgage in 2019. But single men on average paid 3.37%, according to the latest HMDA data available. Over the lifespan of the mortgage, the single woman in this instance will have roughly $7,000 more in mortgage payments than the single man.

Patrick Boyaggi, CEO and founder of Massachusetts-based lending startup OwnUp, says this issue hasn’t drawn enough attention in the mortgage space. His analysis of HMDA data found that women paid higher mortgage rates than men in 49 out of 50 states, the lone exception being Alaska (the analysis assumes that the loan size averaged $345,000 and the prime rate was 3.00%).

“The latest HMDA data makes it startlingly clear – women are largely being left out of the conversation,” Boyaggi said. “Recent HMDA data confirms that discrimination in the home-financing process is very real.
The main reason? Many female borrowers simply fail to shop around for the best possible rate, which translates into losing thousands of dollars over the total life of their loan.”

Boyaggi admits his analysis is not exactly revelatory – it’s been well documented that women pay higher mortgage rates, and the reasons for it are many and complex.

He said he didn’t intend to undertake a sociological study to determine all of the reasons women pay more. It’s more important to acknowledge there’s a problem and take action, he said.


Should lenders look to non-QM when the refi boom slows?

HousingWire recently sat down with Tom Hutchens, Angel Oak EVP of production, who shared how non-QM lending could be an effective way for lenders to replace lost business in the event of a refi boom slowdown.

Presented by: Angel Oak

“I am not certain everybody is aware of it or believes it’s a real issue,” Boyaggi said. “We believe it is a systemic-wide problem…women are not being treated fairly…For us, it’s really about it not being 50-50. And therefore, it’s a systemic problem. Let’s bring that to light first and let’s start worrying about the solutions versus trying to nitpick as to why it is an issue. It is an issue. We know it’s an issue. How do we make it better, versus trying to justify it or come up with some kind of rationale for it.”

According to Boyaggi’s analysis of HMDA data, the five states where women overpay most on a mortgage were Mississippi (delta of $7,077 over the course of the mortgage), Alabama (delta of $6,006), Ohio (delta of $5,856), Florida (delta of $5,591) and New Jersey (delta of $5,515).

Single women typically paid between 8 and 10 basis points higher on a mortgage. In Alaska, single women paid an average of 3.21% while single men paid 3.23%, Boyaggi found. The four other best states for women applying for mortgages were Maine, Wyoming, Montana and Oregon. Single women paid between 1 and 3 basis points more on mortgage rates in those states than single men.

An Urban Institute study from 2016 found that single women were better at paying their mortgages than single men, even though they paid higher rates. The study also found that single borrowers, particularly women, are more likely to be minorities, from lower-income areas, and they are more likely to have a mortgage that eats up a higher percentage of their income.

“One possible explanation is that women, particularly minority women, experience higher rates of subprime lending than their male peers,” the UI study said. “Another explanation is that women tend to have weaker credit profiles. We find that both these explanations are true and largely account for the higher rates.”

Though subprime lending has declined since the study’s publication, mortgage underwriting standards in general are much tougher since the financial crisis, and aren’t particularly flexible.

“There is somewhat of a plain vanilla, one-size-fits-all mortgage underwriting standard, and that’s not very good at accommodating minority borrowers in general, or anybody with any sort of a non-typical, non-generic credit profile,” Guy Cecala, CEO of Inside Mortgage Finance, told Wharton Business Radio in 2016. “Minority buyers in general are getting fewer mortgages than they did before. The good news is that they’re not getting subprime loans, because the subprime market has dried up completely, but they’re not getting mortgages at all in many cases.”

Asked if there could be a potential level of bias against women borrowers, Cecala said in the same interview, “I think there can be. The mortgage market prides itself on being color blind, and essentially using a black box, but any sort of black box basically discriminates against single borrowers, lower-income borrowers and borrowers with lower credit scores. If those happen to be predominantly women, you have to assume that they are getting that kind of treatment from the mortgage market.”

Boyaggi, whose firm Own Up helps consumers shop for mortgages and negotiates prices on their behalf, said more awareness simply needs to be raised.

“There’s a lot of things that happen in this industry where if you just looked at it you’d be like, ‘Oh 10 basis points, .010%. What are we talking about?’” he said. “But if you were to say, ‘Hey, this gas station charges women 10 cents more than men,’ we would be in an uproar. There would be stories about it everywhere, right? People would vilify that gas station, and rightly so.”

Source: housingwire.com

Could You Give Up These 7 Expenses to Save Thousands of Dollars a Year?

A happy woman who struck it rich throws cash around
ViDI Studio / Shutterstock.com

If you’ve looked over your budget and think you can’t cut it down anymore, maybe you need to look a little harder.

There are probably some expenses you still could reduce — or drop altogether — to save thousands of dollars a year.

We found some examples of these costs. Here’s how to slash them if you are really determined. If you eliminated all of these expenses, you’d save a whopping amount — around $31,665 per year, based on averages.

But even by shaving off just 10% of these expenditures, you’d be around $3,167 richer by this time next year.

1. Rent

Nikodash / Shutterstock.com

The national average rent was $1,392 per month as of January, according to real estate research company Yardi Matrix. That’s $16,704 per year.

If you were to move somewhere the cost of living is lower, or bring in a roommate, you could cut your housing costs significantly.

And if you moved in with accommodating family members, you might be able to go rent-free, at least for a time.

If your home has an extra room, another option to offset housing costs is to rent that room to travelers. Try listing your spare space — or the entire home — on a vacation rental website like Airbnb, Homestay or Vrbo (short for “Vacation Rentals by Owner”). Read more in “Do This a Few Days Each Month and Watch Your Mortgage Disappear.”

Total annual savings if you could:

  • Give up the expense: $16,704 (based on the national average rent)
  • Reduce the expense by 10%: $1,670

2. Car payment

szefei / Shutterstock.com

The average monthly new-car loan payment was $568 as of last year, according to Edmunds. That’s $6,816 per year.

If you can, don’t buy a new car. Instead, opt for used vehicles. Cars are one of the first things cited in “You Should Never Buy These 12 Things New.”

Ideally, you would save enough money to buy a car outright instead of financing it, to avoid paying interest on the loan. If that’s not possible, at least try making a bigger down payment to lower your monthly car payment.

Getting rid of a personal vehicle and taking public transportation, walking or biking instead would be a major money-saving shift.

Or, depending on how much you drive, a ride-share service like Lyft or Uber might help you save money. You’d stand to also save on a car payment, insurance, gas and on the biggest auto expense of all, depreciation.

Total annual savings if you could:

  • Give up the expense: $6,816 (based on the average new-car loan payment)
  • Reduce the expense by 10%: $682

3. Cellphone

Man stares at cellphone
chainarong06 / Shutterstock.com

American households spent an average of $1,218 per year on cellular phone services as of 2019, the latest calendar year for which the Bureau of Labor Statistics has released consumer expenditure data.

You could cut costs by adding a few friends or family members to your plan, or by changing your plan.

Also see what you can save by comparison shopping among carriers using Money Talks News’ cellphone plan comparison tool.

If you don’t use your mobile phone a lot or are home enough to justify a landline, consider ditching your mobile service, or get a prepaid plan.

Total annual savings if you could:

  • Give up the expense: $1,218 (based on average household spending)
  • Reduce the expense by 10%: $122

4. Dining out

grocery shopper
mavo / Shutterstock.com

Sometimes you don’t feel like cooking, and that’s allowed. But let it be a habit, and it can cost a couple hundred bucks a month.

The average household in the U.S. spends $3,526 per year dining out, according to the Bureau of Labor Statistics. Cooking at home is much cheaper.

Reducing your restaurant spending can make a noticeable difference to your budget. Here are tips and tricks to help you shave costs: “12 Ways to Slice Your Next Restaurant Check in Half.”

Total annual savings if you could:

  • Give up the expense: $3,526 (based on average household spending)
  • Reduce the expense by 10%: $353

5. Cable

Minerva Studio / Shutterstock.com

If you haven’t cut the cord yet, you might want to consider it. The average household cable package costs about $217 per month as of 2020, according to DecisionData.org. That’s $2,604 per year.

Cutting the cord could cut that cost dramatically, with the many free and affordable alternatives to cable and satellite TV. “The 8 Best Money-Saving Cable Alternatives” gives pricing for some of the best TV alternatives.

Lowering your costs is great. Free is even better. For no-cost options, read about “15 Free Streaming Services to Watch While Stuck at Home.”

Total annual savings if you could:

  • Give up the expense: $2,604 (based on the average cable package)
  • Reduce the expense by 10%: $260

6. Gym membership

Daxiao Productions / Shutterstock.com

If you’re a committed gym rat who gets your money’s worth from a monthly gym membership, more power to you.

But many of us sign gym contracts in a burst of enthusiasm and quit after a few months. The gym membership contract, however, can keep you making monthly payments, whether you use the facility or not.

While membership programs and costs vary, Healthline says memberships average $58 per month, or $696 per year.

Maybe the COVID-19 pandemic already has got you exercising on your own for free. If not, give it a try. Running or walking regularly and doing a strength-training program at home, for example, lets you eliminate gym fees entirely.

We have other ways to trim costs in “8 Smart Ways to Save on a Gym Membership.”

Total annual savings if you could:

  • Give up the expense: $696 (based on the average monthly gym fee)
  • Reduce the expense by 10%: $70

7. Movie tickets

Multiethnic movie happy audience clapping
Dean Drobot / Shutterstock.com

The cost of a movie ticket averaged $9.16 in 2019, according to the latest data from the National Association of Theater Owners. Prices have been creeping steadily up at least since 1969, when a movie ticket cost $1.42, on average.

Hoping to treat the family when the pandemic has passed? Ka-ching.

If you won’t give up the movie theater entirely, there are cheaper options. For example:

  • Attend matinees.
  • Take advantage of senior discounts.
  • Look into independent cinemas that charge less for films that were released earlier in the year.

Total annual savings if you could:

  • Give up the expense: $109.92 (based on the average movie ticket cost and assuming you’re seeing one movie in theaters per month)
  • Reduce the expense by 10%: $11

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

Could You Give Up These 7 Expenses to Save Thousands of Dollars a Year?

A happy woman who struck it rich throws cash around
ViDI Studio / Shutterstock.com

If you’ve looked over your budget and think you can’t cut it down anymore, maybe you need to look a little harder.

There are probably some expenses you still could reduce — or drop altogether — to save thousands of dollars a year.

We found some examples of these costs. Here’s how to slash them if you are really determined. If you eliminated all of these expenses, you’d save a whopping amount — around $31,665 per year, based on averages.

But even by shaving off just 10% of these expenditures, you’d be around $3,167 richer by this time next year.

1. Rent

Nikodash / Shutterstock.com

The national average rent was $1,392 per month as of January, according to real estate research company Yardi Matrix. That’s $16,704 per year.

If you were to move somewhere the cost of living is lower, or bring in a roommate, you could cut your housing costs significantly.

And if you moved in with accommodating family members, you might be able to go rent-free, at least for a time.

If your home has an extra room, another option to offset housing costs is to rent that room to travelers. Try listing your spare space — or the entire home — on a vacation rental website like Airbnb, Homestay or Vrbo (short for “Vacation Rentals by Owner”). Read more in “Do This a Few Days Each Month and Watch Your Mortgage Disappear.”

Total annual savings if you could:

  • Give up the expense: $16,704 (based on the national average rent)
  • Reduce the expense by 10%: $1,670

2. Car payment

szefei / Shutterstock.com

The average monthly new-car loan payment was $568 as of last year, according to Edmunds. That’s $6,816 per year.

If you can, don’t buy a new car. Instead, opt for used vehicles. Cars are one of the first things cited in “You Should Never Buy These 12 Things New.”

Ideally, you would save enough money to buy a car outright instead of financing it, to avoid paying interest on the loan. If that’s not possible, at least try making a bigger down payment to lower your monthly car payment.

Getting rid of a personal vehicle and taking public transportation, walking or biking instead would be a major money-saving shift.

Or, depending on how much you drive, a ride-share service like Lyft or Uber might help you save money. You’d stand to also save on a car payment, insurance, gas and on the biggest auto expense of all, depreciation.

Total annual savings if you could:

  • Give up the expense: $6,816 (based on the average new-car loan payment)
  • Reduce the expense by 10%: $682

3. Cellphone

Man stares at cellphone
chainarong06 / Shutterstock.com

American households spent an average of $1,218 per year on cellular phone services as of 2019, the latest calendar year for which the Bureau of Labor Statistics has released consumer expenditure data.

You could cut costs by adding a few friends or family members to your plan, or by changing your plan.

Also see what you can save by comparison shopping among carriers using Money Talks News’ cellphone plan comparison tool.

If you don’t use your mobile phone a lot or are home enough to justify a landline, consider ditching your mobile service, or get a prepaid plan.

Total annual savings if you could:

  • Give up the expense: $1,218 (based on average household spending)
  • Reduce the expense by 10%: $122

4. Dining out

grocery shopper
mavo / Shutterstock.com

Sometimes you don’t feel like cooking, and that’s allowed. But let it be a habit, and it can cost a couple hundred bucks a month.

The average household in the U.S. spends $3,526 per year dining out, according to the Bureau of Labor Statistics. Cooking at home is much cheaper.

Reducing your restaurant spending can make a noticeable difference to your budget. Here are tips and tricks to help you shave costs: “12 Ways to Slice Your Next Restaurant Check in Half.”

Total annual savings if you could:

  • Give up the expense: $3,526 (based on average household spending)
  • Reduce the expense by 10%: $353

5. Cable

Minerva Studio / Shutterstock.com

If you haven’t cut the cord yet, you might want to consider it. The average household cable package costs about $217 per month as of 2020, according to DecisionData.org. That’s $2,604 per year.

Cutting the cord could cut that cost dramatically, with the many free and affordable alternatives to cable and satellite TV. “The 8 Best Money-Saving Cable Alternatives” gives pricing for some of the best TV alternatives.

Lowering your costs is great. Free is even better. For no-cost options, read about “15 Free Streaming Services to Watch While Stuck at Home.”

Total annual savings if you could:

  • Give up the expense: $2,604 (based on the average cable package)
  • Reduce the expense by 10%: $260

6. Gym membership

Daxiao Productions / Shutterstock.com

If you’re a committed gym rat who gets your money’s worth from a monthly gym membership, more power to you.

But many of us sign gym contracts in a burst of enthusiasm and quit after a few months. The gym membership contract, however, can keep you making monthly payments, whether you use the facility or not.

While membership programs and costs vary, Healthline says memberships average $58 per month, or $696 per year.

Maybe the COVID-19 pandemic already has got you exercising on your own for free. If not, give it a try. Running or walking regularly and doing a strength-training program at home, for example, lets you eliminate gym fees entirely.

We have other ways to trim costs in “8 Smart Ways to Save on a Gym Membership.”

Total annual savings if you could:

  • Give up the expense: $696 (based on the average monthly gym fee)
  • Reduce the expense by 10%: $70

7. Movie tickets

Multiethnic movie happy audience clapping
Dean Drobot / Shutterstock.com

The cost of a movie ticket averaged $9.16 in 2019, according to the latest data from the National Association of Theater Owners. Prices have been creeping steadily up at least since 1969, when a movie ticket cost $1.42, on average.

Hoping to treat the family when the pandemic has passed? Ka-ching.

If you won’t give up the movie theater entirely, there are cheaper options. For example:

  • Attend matinees.
  • Take advantage of senior discounts.
  • Look into independent cinemas that charge less for films that were released earlier in the year.

Total annual savings if you could:

  • Give up the expense: $109.92 (based on the average movie ticket cost and assuming you’re seeing one movie in theaters per month)
  • Reduce the expense by 10%: $11

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

Stock Market Today: Stocks Tank as Interest-Rate Fears Persist

The stock market is starting to resemble a student driver, alternating between a heavy foot on the gas pedal and hard stomps on the brakes.

Investors suffered the latter Thursday, as Wall Street largely ignored a large drop in last week’s initial unemployment filings (by 111,000 claims to 730,000) and improvement in January’s durable goods orders.

Instead, attention was directed toward a continued rise in interest rates, with the 10-year Treasury yield climbing above 1.5% for the first time in roughly a year.

“Until recently, market participants have been able to digest the upward drift in long-term rates,” says Charlie Ripley, Senior Investment Strategist for Allianz Investment Management, “but it appears that the next leg up in interest rates is a bigger bite to chew.”

The major indices finished with deep gashes. Declines in Boeing (BA, -5.5%), Intel (INTC, -4.4%) and Salesforce.com (CRM, -3.9%) helped drag the Dow Jones Industrial Average 1.8% lower from its record high to 31,402. Meanwhile, Apple (AAPL, -3.5%), Facebook (FB, -3.6%) and Tesla (TSLA, -8.1%) weighed on the Nasdaq Composite, which sank 3.5% to 13,119.

James McDonald, CEO and chief investment officer of alternative investment manager Hercules Investments, explains the continued pain in tech: “Unlike other stock sectors like cyclicals, stocks in the tech sector are valued on longer-term earnings. If bond yields and borrowing costs are rising, a company’s longer-term earnings may be negatively affected.”

Other action in the stock market today:

  • The S&P 500 declined by 2.5% to 3,829.
  • The small-cap Russell 2000 was the worst of the major indices, plunging 3.7% to 2,200.
  • GameStop (GME), which went on a roller-coaster trip courtesy of Reddit traders several weeks back, was at it again, surging 18.6% after more than doubling Wednesday. However, even that was well off the 101% gains it was tracking at Thursday’s highs.
  • U.S. crude oil futures improved by 0.5% to settle at a 13-month high of $63.53 per barrel.
  • Gold futures declined by 1.3% to $1,775.40 per ounce.
  • Bitcoin prices, at $48,712 on Wednesday, finished 0.3% higher to $48,870. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)

stock chart for 022521stock chart for 022521

The Silver Lining to Big Down Days

It’s hard to sugarcoat a day that saw every last S&P sector decline, most by more than 1%. But Jamie Cox, managing partner for Harris Financial Group, gives it a go:

“I’m glad to see yields rise because markets can see an end to the pandemic,” he says. “However, people forget that rates are still low, we still have structural unemployment, and that technical moves in bonds do not equal inflation.”

Also, for optimists – more specifically, optimists who still have a little cash waiting on the sideline for better prices – days like this provide a silver lining in the form of slightly less elevated valuations.

For instance, a number of the S&P 500’s best long-term bets are just too darn pricey, but strong pullbacks like these start to alleviate those excessively high valuations. Even value stocks, heavily favored by analysts in 2021, have been driven plenty higher in the year’s early innings; Thursday’s action helped cool them off a little bit.

The same goes for many COVID-recovery plays – travel and leisure stocks, battered in 2020, were popular picks heading into 2021 and have come roaring back as investors anticipate America’s economy eventually reopening. Downdrafts like today, however, provide better opportunities to get in on some of these travel names before most Americans are vaccinated and start spending their money on experiences they were denied during COVID shutdowns.

Here are five such travel stocks worth looking into.

Kyle Woodley was long BA, CRM and Bitcoin as of this writing.

Source: kiplinger.com

Should I Buy a Backup Standby Power Generator for My Home?

In October 2019, Californians experienced a series of rolling blackouts aimed at preventing wildfires. Afterward, Aaron Jagdfeld, the CEO of home generator company Generac, told CNBC its sales there had more than tripled. He also said generators were going quickly in the Northeast as homeowners sought emergency power in the wake of repeated hurricanes and ice storms.

Demand for generators tends to surge after major storms as people realize how easily they could be stuck without power for a week or more. In 2014, I learned firsthand what it was like. Over 14 days, we had eight power outages varying from a few hours to a full day. After 10 days of bitter cold and limited connection to the outside world, I found myself wondering whether we should buy a backup power generator.

But I didn’t take the plunge right away. Instead, I took the time to do some research on generators first — their downsides as well as their benefits.

If you’re thinking about buying a generator, it makes sense to do the same thing. Before you shell out the money, consider the purchase from every angle — the costs, downsides, hassle, and what you really want the generator to do. That way, if you decide to take the plunge, you’ll know how to pick the best type of generator for you and your family.

Should You Buy a Backup Power Generator?

Only certain people need a generator to make it through a disaster. How well you can manage without one depends on where you live and how much you rely on electricity at home.

For instance, Sandra Bockhorst of American Preppers Network writes that she managed just fine during a week without power in Puerto Rico after Hurricane Hortense by using stored water, kerosene lamps, and a propane grill. However, after moving to Pennsylvania, she decided to buy a generator after a series of storms took out the power to her farm and nearly cost her a freezer full of food.

To figure out whether a generator is a worthwhile investment for you, you must be able to answer several questions:

  1. How Common Are Power Outages? Only buy a generator if you’re really going to need it. If the power grid in your area goes down every time there’s a big storm, a generator could make a significant difference in your comfort — but if you’ve had one blackout in the last five years, you can probably get by without one.
  2. How Long Do They Last? Even frequent power outages are no big deal if they only last a couple of hours. A generator is much more useful for handling prolonged outages that last for days. And if blackouts in your area can last for weeks, it could be worth investing in a more expensive generator that lasts longer.
  3. How Extreme Is the Weather in Your Area? Think about the weather conditions in your area. In a mild climate, going a week without heating or cooling could be no big deal. But if you live in the Deep South, where summertime temperatures can reach over 100 degrees F with punishing humidity, a whole week with no air conditioning could be incredibly unpleasant or even unsafe. And if you live in a very cold area, you have to worry about both protecting yourself from frostbite — which you can probably manage with enough layers of clothing — and keeping the pipes in your home from freezing and bursting in the cold.
  4. Do You Have the Space? A running generator needs a spot in your yard that’s a safe distance from your home. Stationary generators have to stay in this space all the time, and portable ones also need a separate space for storage. Both types require a supply of fuel, which you must also store.
  5. Do You Have the Time? It takes a bit of work to keep a generator in good running order. And if it’s a portable generator, it takes effort to set it up and get it started during a storm. That’s a hassle that could outweigh the benefits of getting the power back on a little sooner.
  6. What’s Your Budget? Generators cost hundreds or even thousands of dollars — and that’s not even counting fuel costs. Not everyone has that much money to spare, and everyone has other things they could do with it. Consider what else you might use the money for, then think about whether a generator is really what you want most.
  7. What Are the Alternatives? The more dependent you are on electricity, the more a generator is likely to help you. Make a list of all the things you use power for at home — for example, heating, cooling, and refrigeration. For each one, ask yourself whether there’s some alternative you could rely on if the power were down for a week. If you have no other way of keeping your home warm or cool or rely on your well-stocked freezer for your food supply, then keeping the power on at your home is crucial. But if your only real concern is keeping your cellphone working, there are other options, such as solar and hand-crank chargers.

You can answer some of these questions based on previous experience. But others require a bit more information. Before you can make an informed decision, you need to know more about how generators work, their costs, the amount of space and maintenance they require, and the possible alternatives.


How Backup Generators Work

A generator works on the principle of electromagnetic induction. That means that when you move a wire through a magnetic field, it creates a current in that wire. A generator simply spins a magnet repeatedly around a wire, forcing electrons through the wire like a pump forcing water through a pipe.

To make the magnet turn, a home power generator contains a small engine, which can be powered by gasoline, liquid propane, or natural gas. The engine pushes a piston back and forth, causing the generator to turn and produce a steady electric current.

There are two main types of home power generators: portable and stationary.

Portable Generators

These smaller generators are mounted on wheels. When a power outage hits, you have to wheel the generator outside, start it, and hook it up to your home’s power system. You can plug your devices directly into the generator or hire an electrician to install a special cable called a manual transfer switch, which feeds the current into your home’s electrical system. From there, you can flip the circuit breakers to route power to the devices you need, such as the fridge and lights.

Portable generators can typically provide enough backup power to keep a few critical systems running, such as your refrigerator and a few lights.

Stationary Generators

Also known as a standby generator, a stationary generator sits in a permanent location outside your house. A stationary generator has an automatic transfer switch built in. If the power goes out, it automatically starts and feeds power into your home’s systems.

Standby generators are bigger than portable ones and can produce enough wattage to run an entire house. However, these whole-house generators are a lot more expensive than portable generators, and you have to hire a professional to install one.


Downsides of Owning a Generator

The benefits of owning a generator are easy to see.

When a storm knocks out power to your area, and all your neighbors are shivering in the dark, you’ll still have heat and lights. If the power outage continues for several days, your generator can also save hundreds of dollars’ worth of food in your fridge and freezer. And if you choose a portable generator, you can take it with you to power a few essential gadgets on a camping trip or at a tailgate party.

However, that doesn’t mean everybody should rush out to buy one. Owning a generator has its share of downsides, including cost, space, maintenance, noise, and safety considerations.

Cost

Home generators aren’t cheap. According to Consumer Reports, the smallest portable models are good for powering your fridge, a sump pump, a few lights, and maybe a TV, and they cost at least $400. Larger portable models can run bigger appliances, such as an air conditioner, and can cost up to $1,500.

Standby generators are more convenient to use but usually run at least $2,000. On top of that, you have to pay a professional installer to hook them up. According to Consumer Reports, generator installation can cost anywhere from a few thousand to over $10,000.

Space

It can be hard to find a place to use a portable generator. It has to be on level ground and at least 20 feet from your house — but close enough to connect to it with an extension cord.

You also have to protect it from the weather because it could electrocute you if it gets wet. But you can’t put it inside a shed. It’s unsafe to run in an enclosed space. And between uses, you have to find a place to store it to protect it from harsh weather and theft.

Stationary units live in the same spot in your yard year-round, so you don’t need to worry about storing them. However, they take up a fair bit of space and can be unattractive.

You also need to store fuel for your generator. That’s easy if you have a home standby generator that runs on natural gas, but you must store gasoline and propane outside your home for safety reasons. That said, you must keep the fuel locked up to protect it from thieves and vandals, which means adding a shed or detached garage unless you already have one.

Maintenance

Like any appliance, a generator needs regular maintenance to keep it running well. You have to keep it fueled and check the oil, filters, and spark plugs regularly. You also need to start it monthly and run it for about 20 minutes to keep the battery charged and the fuel lines free of moisture.

You also have to maintain your fuel supplies. Gasoline can go bad over time, so you must add a fuel stabilizer and refill your cans every year or so. Regular maintenance is necessary if you want to be able to count on your generator to work when an emergency strikes.

Noise

Generators are loud. The best ones are quiet enough to avoid bothering you while you’re indoors, but you could still get complaints from the neighbors. Some towns even have anti-noise ordinances that restrict how loud your generator can be or at what times you can use it.

Safety

You have to be careful when using a portable generator. It must be properly ventilated to avoid causing a fire or producing deadly carbon monoxide. HuffPost reports that during Hurricane Sandy, generators were responsible for at least nine deaths, mostly from carbon monoxide poisoning.

Even a properly vented generator gives off some fumes. So ensure it is at least 20 feet from all doors and windows to avoid letting any harmful fumes into the house. Burning gas or propane produces carbon dioxide, which is toxic to humans. It’s also the main gas responsible for climate change. That means the more you run your generator, the more you increase your carbon footprint.


Alternatives to Owning a Generator

Despite the many drawbacks of owning an emergency generator, some people think they have no choice because it’s the only way to keep the power on. But there are other ways to provide power for a few of your devices — or to get by with no backup power source at all.

In many cases, it’s possible to stay safe and comfortable for at least a few days without electricity.

Portable Power Stations

If your power needs are modest, you can meet them with a device called a portable power station. These backup power mini-systems are basically large batteries inside protective cases with built-in AC outlets and other ports for plugging in your various devices.

According to Wirecutter, they weigh around 50 pounds and can store anywhere from 100 to 1,800 watts of energy. That’s enough to keep key electronics, such as a phone or laptop, running for hours or even days at a time.

Unlike generators, portable power stations run silently and don’t require a backup supply of fuel. You can charge them with ordinary household current or, in some cases, with a solar panel.

However, they typically cost more than portable generators, and their power output is insufficient to run your central air conditioning or any large appliance. And even if you’re using them only for electronic devices, fans, or medical equipment, such as a CPAP machine (breathing mask), they can’t store enough juice to get you through a weeklong blackout.

Cooling Methods

There are many ways to stay cool without air conditioning. You can block out the sun’s hot rays with curtains and reflective window film and keep your home well insulated to prevent it from heating up as quickly. At night, when it’s cooler, you can open windows to let in the breeze.

You can also cool yourself, rather than the space around you. Taking a cold shower or applying cold compresses lowers your body temperature directly. Or if your home has a basement, you can retreat down there during the day to take advantage of the cooler temperature.

Heating Sources

Most heating systems depend on electricity to either create heat or distribute it throughout the house. So if a winter storm takes out the power to your home, you need some way to stay warm until the power comes back on.

You can heat an indoor space with a wood-burning or gas-burning fireplace, wood stove, pellet stove, or kerosene heater. Like a generator, all these fuel-burning appliances need proper ventilation for safety.

And if the winters in your area aren’t all that cold, you might be able to get away with bundling up in your warmest clothing and piling on the blankets at night.

Water Supply

If your home is hooked up to the municipal water and sewer lines, a power outage shouldn’t disrupt your water supply. But if you have a well that works with an electric pump, you need another source of water for bathing, drinking, and flushing your toilets.

One solution is to store water in jugs to get you through an emergency. The Centers for Disease Control and Prevention recommends keeping at least 1 gallon of water per day for each person and each pet in the house in your family emergency kit. Ideally, you should have a total of 14 gallons per person — enough to get you through two weeks without water.

You can also use rainwater collected in buckets or a water barrel for washing or flushing toilets.

Backup Power for Sump Pumps

Many homes rely on a sump pump to keep the basement from flooding. But if a storm knocks out the power, it can disable the pump when you need it the most.

To avoid this problem, you can choose a pump with a battery backup, which uses a car or boat battery to keep it going while the power is out. If you’re on the municipal water system, another option is to install a backup pump that relies on water pressure rather than electricity.

Food Storage

During a prolonged power outage, keeping your refrigerator door closed as much as possible helps the food stay fresh. Food stored in a full freezer should stay safe for up to 48 hours without power, according to the U.S. Department of Agriculture. However, food in the refrigerator will go bad much faster.

Packing the fridge with blocks of ice or dry ice can keep food safe to eat for a couple of days. Alternatively, you can transfer perishable food to a cooler, which requires less ice to pack. A good rule of thumb is to eat all your perishable food first, before it goes bad. After that, you can rely on shelf-stable foods, such as canned goods, cereal, pasta, dry beans, crackers, peanut butter, and powdered or ultra-pasteurized milk.

Cooking Methods

If you have a gas stove, you can continue to use it during a power outage. Most modern stoves use electric igniters, but you can always light them the old-fashioned way — with a match.

You can also cook outdoors on a grill, portable camp stove, or solar cooker. If you have a wood-burning stove or fireplace, you can do some cooking on that.

Power for Phones

If you have an old-fashioned landline phone — the kind that runs on actual copper cable — it will probably still work during a power outage. If not, there are several ways to recharge your cellphone when the electricity is out.

For $25 to $80, you can buy a solar phone charger that can top up your phone battery after about half an hour in direct sunlight. There are also inexpensive hand-crank chargers, which often double as emergency flashlights or portable radios. And finally, you can conserve your phone’s battery power by keeping it switched off in between calls.

Lighting Sources

At night, you can keep your home lit with candles, flashlights, or battery-powered lanterns. Modern LED technology makes it possible for a lantern or flashlight to last a lot longer on one set of batteries. However, it’s worth keeping extra batteries on hand in case the power outage goes on for weeks.

Entertainment

In the modern world, we tend to rely a lot on electronic gadgets — TVs, smartphones, computer games — to keep us amused. During a power outage, you have to fall back on more old-fashioned diversions, such as books. Besides reading to yourself, you can take turns reading aloud with your family members to entertain each other.

You can also work on jigsaw puzzles or play tabletop games, such as board games, card games, and party games like charades.


Final Word

In the end, my husband and I decided not to invest in a generator.

Instead, we opted to find other ways to prepare for winter storms. We installed a gas fireplace for heat, bought a hand-cranked radio that could also charge our cellphones, and got an LED lantern for lighting. These supplies — plus a gas stove and plenty of water, nonperishable food, and books — give us the confidence we can make it through another long stretch without power if we have to.

And in the end, that’s the most critical consideration: peace of mind. If you can’t sleep easy without a generator or some other backup power source to get you through a lengthy power outage, then a generator is a worthwhile investment, regardless of what the numbers say.

But if you decide the expense and effort of owning a generator outweigh the benefits, there are plenty of other ways to weather a natural disaster.

Source: moneycrashers.com

How to Track Your Spending on the Chase Freedom Flex 5% Cap

One of the key benefits of the Chase Freedom Flex℠ credit card is a rotating 5% earning category. Every quarter, cardholders will earn 5% cash back on up to $1,500 in combined purchases in select categories. That’s up to $300 cash back each year.

The catch? Once you pass the $1,500 spending threshold, you’ll only earn 1% cash back on further purchases in these categories. So, it’s important to know how much you’ve spent toward the limit. That way you can switch to using a credit card that provides a higher return on spending once you hit the cap.

Here’s how to track your spending on the Chase Freedom Flex℠.

The Chase Freedom Flex℠ 5% earning categories

Between January and March 2021, Chase Freedom Flex℠ cardholders earn 5% on:

  • Wholesale club purchases.

  • Internet, cable and phone services.

  • Select streaming services.

However, the rest of the 2021 bonus categories won’t be announced until less than three weeks before the start of the quarter.

This makes it hard to plan your credit card strategy for the year. However, it allows Chase to remain flexible and offer categories that are especially relevant for the time — from department stores around the holidays to select streaming services during the pandemic.

For reference, recent bonus categories have included:

  • Q4 2020: Walmart and purchases through PayPal.

  • Q3 2020: Amazon and Whole Foods.

  • Q2 2020: Grocery stores, fitness club and gym memberships, and select streaming services.

  • Q1 2020: Gas stations; internet, cable and phone services; and select streaming services.

3 steps to monitoring your category spending

1. First, check if you’ve activated cash-back earnings for the quarter

LOG IN AND HEAD TO CHASE ULTIMATE REWARDS®

First, log in to your Chase account and navigate to the Chase Ultimate Rewards® landing page. If you have multiple Chase Ultimate Rewards®-earning Chase cards, you’ll need to select your Chase Freedom Flex℠ from the list.

NAVIGATE TO THE 5% CATEGORIES SECTION

Once logged in, click the menu button (represented by three lines) at the top left corner of the page. Then select “5% Categories” from the menu list.

CONFIRM ACTIVATION

On this page, Chase shows whether or not you’ve activated your 5% cash back for the quarter and the following quarter if registration is open. Do so if you haven’t already. Right below the activation button for the current quarter, you’ll find that quarter’s spending tracker.

This bar will give you a visual approximation of how close you are to the spending cap for the quarter. However, it doesn’t give details on your exact progress. Instead, you’ll need to check another page.

There’s only one place we’ve found that Chase provides an exact figure of how much you’ve spent toward the quarterly $1,500 spending cap.

2. Find the Rewards Activity page

Navigate to the Rewards Activity page. Then, click the “5% cash back” tab on the top menu to scroll down to the tracker.

Here, you’ll find details on how much cash back you’ve earned toward the $75 cap. However, the figures can be a bit confusing. The values listed for each merchant represent the 4% cash-back bonus for the quarter, and the 1% base earning is listed separately.

You don’t have to add up these values to see your bonus category cash-back earnings, though. In the example above, the cardholder has earned $58.48 of their $75 maximum cash back for the quarter.

3. Figure out how much you can still spend toward the cap

It takes a few calculations to determine how much you can still spend before hitting the spending cap.

Nerd tip: Subtract the amount of cash-back earnings so far from $75; you’ll need to divide this amount by 5% (0.05) to find out how much more you can spend before hitting the cap.

In the example above, we need to subtract $58.48 from $75. Then, we divide the $16.52 result by 5%, which gets us $330.40. This is the amount the cardholder can spend in bonus categories this quarter to maximize their cash-back return.

Other bonus categories of the Chase Freedom Flex℠

While the two cards share similar names, the Chase Freedom Flex℠ is a substantial improvement over the Chase Freedom®.

The Chase Freedom® also earns 5% cash back on up to $1,500 in combined purchases each quarter in select categories, but only 1% cash back on all other purchases. The Chase Freedom Flex℠, however, improves on this by offering the following earning categories:

  • 5% on travel purchased through Chase Ultimate Rewards®.

  • 3% on dining at restaurants, including takeout and eligible delivery services.

  • 3% on drugstore purchases.

Even if you opt to swap this card for one with a higher return after you reach the $1,500 spending cap in a quarter, it is wise to keep it handy for any of the above purchases.

The bottom line

To get the most out of your Chase Freedom Flex℠, you’ll want to max out your 5% cash-back earnings each quarter. But, there are plenty of cards that earn better than 1% cash back on spending. So, you’ll want to switch to using another card once you hit the $1,500 limit.

To improve your chances of maximizing your cash-back earnings, continually monitor your progress toward hitting the spending cap each quarter from your Chase account.

How to Maximize Your Rewards

You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2021, including those best for:

Source: nerdwallet.com