These Caregiver Jobs Are in Demand — No Medical Training Required

Job seekers can find immediate openings in most areas across the country as companions for retirees. No medical training is required, though most applicants need to have a driver’s license and their own transportation.

“Right now, there is a crisis for caregivers. The demand is so high. We all need them,” said Elaine Poker-Yount, director of care management for the Visiting Angels franchise in Mesa, Ariz. “It’s not just us. There is strong demand for all caregiver positions.”

Visiting Angels has more than 600 franchises in 50 states employing caregivers who help seniors with transportation, easy meal preparation, light housekeeping, other activities of daily living and mostly being a friend.

Some Visiting Angels franchises as well as many other senior care program employers around the country are also hiring home health aides or personal care aides. They tend to help with additional tasks such as teeth brushing, bathing and toileting.

These Caregiver Jobs Are in Demand

Home Health Aides

Typically, these aides need a high school diploma or equivalent and must complete formal training and pass an exam. This career often doesn’t require you to have your own transportation while being a companion does usually require driving.

Home health aides earned a median annual salary of $27,080 or about $13 per hour in 2020, according to the U.S. Bureau of Labor Statistics. It expects the overall employment of these caregiver jobs to grow 33% in the next eight years as Baby Boomers age.

BizInsure, a marketplace for business insurance, reports that many home health aide training programs last just two weeks. Training programs cost between $200 and $1,000. Because there is such a shortage of people to fill caregiver jobs, some employers will pay for new hires to get their caregiver certification.

Most community colleges offer training and exam prep for these caregiver jobs.

The course and exam are more about knowing how to care for people than medical training.


Many job seekers who aren’t up for bathing and toileting assistance already have skills that can be put to good use as a full-time or part-time companion.

“We look for someone with empathy, not sympathy. Someone who can walk in someone else’s shoes and see the world from their point of view,” Poker-Yount said. “We look for that respect piece, that they really want to make a difference in somebody’s life.”

Pro Tip

Search here to see if Visiting Angels is filling caregiver jobs in your zip code.

Because each Visiting Angels franchise has a different owner, there is no set pay scale. Many offer competitive pay of two or more dollars per hour above the state’s minimum wage. Employees with more experience may be compensated more than that, Poker-Yount said. Some offer benefits. You can work full time as a companion or as little as one four-hour shift a week in most cases.

Each state’s licensing or association requirements for caregiver jobs are different, though it’s not uncommon for companions to undergo criminal background checks and provide references. Some programs also require CPR training.

Who Typically Works as a Caregiver?

Some caregivers are students going through medical school or working to become a physical therapist, but many are caring people with no specific academic or medical training wanting to work part time or full time.

Poker-Yount doesn’t require job applicants to have prior care working with seniors in a professional setting. She does look for employees who have cared for a family member at some time in their life for six months or more.

“Somebody who took care of a little sister who had Down syndrome, or cared for someone with intellectual development difficulties or who took care of their spouse makes a wonderful companion,” she said. “We have found family caregiving is the best experience for providing well-rounded care.”

Poker-Yount is certified to train companions to care for clients with dementia.

“Not everybody is comfortable caregiving in a dementia world, whether because they lived in it or because they haven’t had experience and it daunts them,” she said. “When the caregiver has zero to little dementia experience and gets a client (with dementia) they grow with them. They become phenomenal. It’s baby steps along the way.”

Employers make sure the caregiver is comfortable with the older adult and so that the client and caregiver are a good match and it’s a good work environment.

Katherine Snow Smith is a staff writer for The Penny Hoarder.




OhmConnect Could Help You Skip Your Electricity Bill for a Year

How much do you spend each month on your electricity bill? Between blasting the AC during the summer and cranking the heat during the winter, you’re likely spending more than a thousand dollars each year just to keep your lights on.

Wouldn’t it be nice if you could skip that bill — for the whole year?

Thanks to a company called OhmConnect, you might be able to.

How to Skip Your Power Bill for a Year

OhmConnect is a free service that works with all the major power companies in California to pay people for saving energy when it matters most to the power grid and the environment.

When you create an account with OhmConnect and link your utility account, you’ll get a text about once a week when a lot of people in your area are using power, asking you to cut back on your power usage for an hour. If you save energy, OhmConnect pays you cash.

Even easier: Let a smart plug do the work for you. So long as you are using less energy than usual during these OhmHours, you’ll get paid — not to mention you’ll likely see a lower power bill each month.

One couple, Michael and Tiffany Edgerle, of Bakersfield, California, was able to earn more than $1,200 in just three months using OhmConnect — enough to pay for their entire power bill for the year.

“When we hit $1,000 in less than three months, I couldn’t believe it” says Michael. “We’ve made this amount of money from something we didn’t even know about a few weeks ago!”

About half their earnings come from payments for OhmHours, and the other half comes from credits for referring people they know to the program. Michael says his family uses a smart thermostat and smart plugs to make things easy.

How to Get Started

Canceling your electricity bill isn’t an option, but making enough free money to pay it off is. Here’s how California residents who use PG&E, SDG&E or Southern California Edison can set up an account with OhmConnect.

  1. Sync it with your online utility account through PG&E, SDG&E or Southern California Edison.
  2. Receive energy usage notifications during “OhmHours” and “AutoOhms” — high-energy-consumption times that trigger non-green power plants to activate in order to support the overtaxed grid.
  3. Head outside or at least turn the TV off until the OhmHour is up. If you have a smart plug connected to any of your devices, they’ll automatically shut off during these high-usage times.
  4. That’s it! OhmConnect rewards you with cash for reducing your energy consumption and helping to prevent blackouts.

Enter your ZIP code here to get started saving energy and earning money. How much could you make this month?

Kari Faber is a staff writer at The Penny Hoarder.




Dear Penny: My Boss Sexually Harassed Me, Then Offered Me Millions

Dear Penny,

I have been in a lawsuit against my former boss, who owns the company I was employed at, for sexual harassment and wrongful termination for being fired for reporting it. There was no human resources department. A colleague finally saw a physical incident and provided me with an affidavit and disclosed what he saw in a deposition.

This was October of 2018. The state human rights department did its investigation. Now, the cases are filed against this man and his company in the court system by my attorney.

Long story short, I’ve been informed that if I settle out of court and drop the case, there is a multimillion-dollar amount to expect as per the pending agreement.

I’m not sure I want monetary results. I want him to be held accountable on public record databases. Before I agree, I need advice in terms of what to do with the funds to avoid paying 40% tax.

I have my own small business, and I have ideas of what I may want to do with some of the funding — but I was wondering if you have any information in regards to the following questions:

Where do I put the money to keep it secure and non-taxed until I decide what to do with it —  and can I access it when I need it, as opposed to waiting until I am a senior?

What type of industries or realms can I put the money into that will yield me returns on my monthly overhead in the future? Real estate is what people say but that is not specific, and I also see it as a gamble.

-Help a Single Mom Out

Dear Single Mom,

You didn’t ask for advice about whether to accept this settlement. But that part is key. Until you’ve made that decision, discussing investment and tax mitigation strategies is premature. I worry that focusing too much on financial outcomes right now could distract you from figuring out what you really want.

You didn’t ask to be in this awful situation. And you don’t owe anyone anything. It’s not your responsibility to single-handedly hold this man accountable. But think carefully about your emotional health, as well as your financial needs.

How would you feel if other allegations surfaced and you couldn’t speak up? Or if your former boss went on to abuse someone else? In no way are you responsible for his actions, of course. But you have to be comfortable with what you’re gaining and giving up. If possible, take some time to talk through your feelings with a therapist.

The tax bill is an unfortunate reality for sexual harassment survivors — though I’m not sure where the 40% you mention comes from. Whether you reach a settlement or win a lawsuit, Uncle Sam taxes the money the same. Damages related to a physical injury typically aren’t taxable. But if the damages stem from emotional distress, the IRS generally considers it taxable as ordinary income. That applies even if the distress is so severe that it makes you physically sick. (I should note that I’m not an attorney, and there’s a considerable gray area here. It’s essential that you consult with an experienced personal injury attorney.)

So suppose you received a $3 million settlement, and you paid one-third of that in attorney fees. The remaining $2 million would be taxed in ordinary income brackets, which cap out at 37%. Unless you put that money in a tax-advantaged retirement account, you wouldn’t need to wait to access it.

Should you receive a settlement or judgment, proceed with caution. When someone receives a substantial amount of money all at once — whether it’s from a settlement or an inheritance or because you won the lottery — they often feel pressure to make big, life-changing decisions. That can leave you vulnerable to people who don’t have your best interests at heart.

I think the best solution here would be to set aside a year’s worth of expenses in a savings account or certificate of deposit (CD). Then, invest the rest in an S&P 500 index fund for now. That may be a boring solution, but S&P 500 index funds have historically been a great way to build wealth. From there, you can work with a financial advisor to set specific goals and tailor your investments accordingly.

But before you agree to anything, make sure you fully understand all the terms. Ask your attorney lots of questions about what a settlement entails, as well as your options for suing your former boss. If you feel pressured to settle quickly, it’s time to find a new lawyer.

Focus on finding the best course of action for your overall well-being. Money is certainly one component, but it’s not the only factor. There isn’t a right or wrong answer here. This is about figuring out what’s right for you.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].

Related Posts




Chicken Class Action Suit Could Put Money In Your Pocket

If between 2009 and 2020, you purchased fresh or frozen raw chicken for the purposes of preparing a meal, you may be in line for an unexpected payday.

A class-action lawsuit against several chicken-processing companies has been settled to the tune of $181 million.

All you have to do to get your share is fill out a form. And then wait.

You likely won’t be alone because chicken is one popular protein. It comes in second in annual consumption to red meat, but the gap is closing.

According to the National Chicken Council, chicken consumption continues to grow in the U.S. In 2009, the first year of date range for this settlement, Americans ate 80 pounds of chicken per person. In 2020, that number grew to almost 100 pounds.

The companies named in the suit (Fieldale Farms Corporation, George’s, Mar-Jac Poultry, Peco Foods, Pilgrim’s Pride and Tyson Foods) were charged with conspiring to fix the supply of chicken to maintain a certain price level, a violation of federal and state consumer antitrust laws.

The settlement amount was announced Sept. 10, but will not be finalized until the U.S. District Court for the Northern District of Illinois gives final approval at a hearing Dec. 20, 2021.

How Much Money Can You Get?

How much will be distributed among class action participants is uncertain, but all participants in the suit are likely to be rewarded with some amount. The reason the individual payout is uncertain is because it is unknown how many consumers will file a claim. This is a fairly large settlement at $181 million but the pool of claimants could also be quite large.

Remember, Americans have eaten on average between 80 to 100 pound of chicken a year in the time frame of the suit. Some of that is nuggets and chicken sandwiches purchased at restaurants and fast-food joints, but a portion is chicken purchased to prepare at home, and that is what the suit encompasses.

As a point of reference, the cereal manufacturing giant, Kellogg, was required recently to pay $13 million because of incorrect labeling on some of its “heart healthy” or “lightly sweetened” breakfast cereals. The products were neither. It was expected that consumers who bought the cereals between 2012 and 2020 could get about $16 each if they filed claims by the deadline.

The Payout Doesn’t Cover All 50 States

According to the chicken price fixing lawsuit, anyone who was a resident of certain U.S. states between Jan. 1, 2009, and July 31, 2019 (extended into 2020 for Pilgrim’s Pride), and indirectly purchased whole chicken, chicken breasts, or wings from the settling poultry processors is eligible for a portion of the settlement.

An indirect purchase is one from a third party distributor rather than directly from the companies named in the suit. It’s likely that nearly everyone who will file a claim is in this category because it’s almost certain most of the chicken was purchased from a grocery store rather than directly from the producers.

Residents of the following states can participate: California, Florida, Hawaii, Illinois, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Wisconsin, and the District of Columbia.

Common Questions about the Settlement

Katherine Webster is settlements editor for Top Class Actions, a website which tracks class action lawsuits for consumers so they don’t have to. She’s rounded up answers for questions  that she suspects The Penny Hoarder readers will have.

How do I prove I bought chicken in the designated way during the designated period?

For this settlement, proof of purchase is not required. Class members simply need to fill out and submit a claim form by Dec. 31, 2022 (yes, 2022). However, the claims administrator may request that a claimant provide additional information or documentation later.

How can I track the progress of the settlement as it progresses?

The settlement administrator maintains a website for information about the case. And, Top Class Actions will provide updates on the settlement article itself and via email as more information becomes available.

Is it worth my time to fill out the form?

Everyone has to decide for themselves whether it’s worth their time to join a settlement, but the claims process is simple — especially with no proof of purchase required at this time. If a consumer is an eligible Class Member, they have the opportunity to receive money they are entitled to under the terms of the settlement agreement. More details here from Top Class Actions.

For this particular settlement, Class Members who file a valid claim will receive a proportionate share of the settlement fund — currently $181 million before attorneys’ fees and other costs are deducted — based on their broiler chicken purchases.

In addition, those who submit timely claim forms in this settlement will automatically participate in any future settlements with other defendants unless the Class Member chooses to opt out.

Top Class Actions follows settlements already made, open class action lawsuits and payments already made. You may be in line for a settlement amount and not know it, so take a look. Here are the settlements deadlining in September and The Penny Hoarder publishes settlement deadlines monthly provided by Top Class Actions.

Kent McDill is a veteran journalist who has specialized in personal finance topics since 2013. He is a contributor to The Penny Hoarder.




Secured Versus Unsecured Loans — And Ways You Can Wield These Powerful Tools

Sure, you could mow acres of lawn with a weedeater, dig a hole with a pitchfork or nail a screw with a hammer. You’d be turning an old adage on its head by working harder, instead of smarter, however. Like tools, loans are much more effective, and easier to maintain, when you wield the right loan product for the job at hand – whether that’s buying a new car, taking out a mortgage or consolidating high-interest credit card debt.

Knowing what an unsecured loan is and how it compares to a secured loan, can help you choose the right loan type, so you can do things like sand down high interest rates, hammer away at debt or take an ax to large expenses to chop them into manageable monthly payments.

So what is an unsecured loan exactly? What is a secured loan? And what’s the best way to take advantage of them?

Consider this your quick-start guide to the characteristics of secured and unsecured loans, as well as a primer on how you can use them to repair or renovate your finances.

What a Secured Loan Is — and the Best Ways to Use It

When you think of “secured loans,” think collateral. Collateral provides lenders security against non-payment, or “default.” Instead of having to navigate the legal system to recoup a loan that wasn’t paid in full, the lender can take possession of the collateral a borrower submitted to guarantee the loan.

Having to put up a car, real estate or other valuable assets as collateral for a loan is a sobering thought. But you can’t blame lenders for wanting to ensure an applicant is serious about repaying the loan.

Common types of collateral for secured loans: automobiles, real estate, investments, insurance policies and cash accounts.

Backing a loan with collateral not only affirms your commitment to repayment — it can also raise your chances of approval for that loan, especially if there’s plenty of room for your credit score to improve. With less risk to the lender, it’s often easier to land a secured loan than an unsecured loan, though the latter is still the most common type of personal loan.

Check out some of these common use cases for secured loans:

  • Financing a new car: You don’t need pristine credit to buy a car, since the car itself can serve as collateral.
  • Mortgaging a home: Just like financing a car, you can buy a home with a secured loan.
  • Building credit: If you have bad credit or none at all, you can use your own money as collateral to get a small line of credit from a bank. With responsible use, that credit line could grow.
  • Emergency money: If you need money and don’t have great credit, you can borrow money by using collateral such as a car title or jewelry.
  • Business loans: If you don’t qualify for an unsecured loan, or need more than offered, you could land a secured loan by backing it with high-value assets, such as real estate or business inventory.

Pros of Secured Loans:

  • Lower interest rates
  • The potential to borrow larger amounts
  • Easier to qualify for, since they involve less risk to the lender
  • Lower credit score requirements

Cons of Secured Loans:

  • Approval could take longer as assets are reviewed
  • Have to leverage assets, risking repossession or foreclosure in cases of loan default
  • Smaller loans or shorter terms may not be available

In the approval process for a secured loan, lenders also factor in your creditworthiness:  Your debt-to-income ratio, credit scores, the value of your assets, employment status and the health of your accounts. These factors typically weigh more in the application process for unsecured loans.

A woman hugs the steering wheel of a car she wants to buy.
Getty Images

What an Unsecured Loan Is and How to Use It

It’s what it sounds like, yet not exactly so.

Unsecured loans don’t require the security of collateral. Instead, a potential lender will review your creditworthiness to determine if they’ll extend you an unsecured loan.

While an unsecured loan doesn’t require you to put up collateral like a secured loan, the bank still has recourse to recoup the loan, should you fail to repay it in full. In their toolkits, banks have legal options, such as lawsuits and wage garnishment, which they can use to protect themselves against defaulted loans.

Here are some common use cases for taking out an unsecured loan:

  • Debt consolidation: A single lower-interest loan to consolidate all of those high-interest credit cards and other debt.
  • Emergency money: A solid emergency fund isn’t always enough, but a significant line of credit can bail you out in an emergency.
  • Big-ticket items: Spread out big purchases to fit a large item into your monthly budget.
  • Buying a car: You can use a personal line of credit to purchase an automobile from a private seller.
  • Home improvement: Homeowners can use a personal loan with a fixed interest rate to make home improvements without using the home as collateral, which is required with other options, like a HELOC.
  • Weddings: Some couples opt for a personal loan to cover large expenses, like weddings.

Pros of Unsecured Loans:

  • No need to leverage any assets as collateral
  • Faster approval process, since there’s no need to evaluate assets
  • The potential to take smaller loans

Cons of Unsecured Loans:

  • Higher interest rates
  • Higher credit scores required

How a Secured or Unsecured Loan Can Impact Your Credit Scores

While there’s usually no impact for looking into a secured loan or an unsecured loan, your credit scores could take a mild to moderate hit once you actually apply. That hit to your credit scores may come from the hard inquiry to your credit file, as well as the rise in debt that comes from using the loan.

But if you’re seriously considering a personal loan, then you probably aren’t shortsighted and can appreciate the beauty of the long game.

In the long run, that hard inquiry will fall off your credit file. And if you keep up with your loan payments, your score could begin to trend upward in a matter of months.

Paying that loan every month will help improve your payment history. And if you’re using that loan to pay off credit card debt, you could score points by lowering your debt-to-credit ratio.

Proving you can responsibly pay off a loan is one of the more impactful things you can do to improve your credit scores. And it could help you secure even better loan terms the next time you go looking for a secured or unsecured loan.

Shopping for Secured and Unsecured Loans

So now that you’re up to speed on the key distinctions between a secured versus unsecured loan, there’s still a little more work you need to do to secure the funds you need.

You might find it tempting to jump onto the first pre-approved offer from lenders with names you’ve heard of, especially if the terms are solid, but you could be doing yourself a disservice if you don’t compare offers.

Shop for the best loan terms available for your credit profile by using a loan-comparison tool like Fiona. Fiona searches the top online lenders to match you with a personalized loan offer in less than 60 seconds.

If your credit score is at least 620, its platform can help you borrow up to $100,000, with fixed rates starting at 4.99% and terms from 24 to 84 months.

And if you’re worried you won’t qualify, it’s free to check online. It takes just two minutes. Once you choose your loan, you could see your money in just a few days. And by the way, your information is totally safe — the website uses higher encryption security than many banks.

Fiona will also show you additional offers from other lenders — because comparing your quotes can help you save even more money in the long run.




Automatic Student Loan Forgiveness Coming for Nearly Half a Million

Automatic student debt assistance is on the way for nearly half a million borrowers due to recent rule changes at the U.S. Department of Education.

In a flurry of loan relief announcements, the Education Department outlined several groups of student loan borrowers who will receive automatic aid unless they choose to opt out.

The groups include some current and former service members, borrowers with qualifying permanent disabilities that prevent them from working and attendees of the defunct ITT Tech who inadvertently took out “misleading” loans that the for-profit college chain allegedly disguised as grant money.

In total, an estimated 485,000 borrowers qualify for automatic relief.

The Education Department has identified these borrowers through data-matching agreements with several other federal agencies, including the Social Security Administration, the Department of Veterans Affairs and the Department of Defense.

All of the borrowers that the Education Department has identified qualify for longstanding student loan relief programs through the agency. Many borrowers were either unaware of the programs or weren’t able to apply. Through the data-matching partnerships, the Education Department  is able to confirm borrowers’ eligibility without the need for them to do so.

Pro Tip

If you qualify for automatic student debt relief, the Department of Education will notify you this fall. You will have a chance to opt out if you prefer. 

This latest wave of aid brings the Education Department’s student loan forgiveness tally to $9.5 billion in 2021. Those not included in this round of forgiveness may still benefit from the pause on federal student loan payments, which has been extended until Jan. 31, 2021.

Here’s a closer look at who’s receiving the automatic aid.

323,000 Borrowers With Qualifying Disabilities

For federal student loan borrowers that have qualifying total and permanent disabilities, the Department of Education is providing $5.8 billion in automatic loan forgiveness, according to an announcement from the agency.

By accessing records from the Social Security Administration and the Department of Veterans Affairs, the Education Department identified an estimated 323,000 borrowers that are eligible for its total and permanent disability (TPD) loan discharge program.

Automatic discharge qualifications include:

  • Participation in a federal student loan program (i.e. William D. Ford Federal Direct Loan program, Federal Family Education Loan program, Federal Perkins Loan program and/or the TEACH Grant service program).
  • A total and permanent disability that prevents you from working, as determined by the Social Security Administration or the Department of Veteran Affairs.

The Department said it will complete its next quarterly data match process in September and notify those who are eligible “in the weeks after the match.” The agency plans to discharge the loans by the end of the year.

Going forward, the Department told The Penny Hoarder that federal student loan borrowers who are determined to be totally and permanently disabled by the VA or SSA will be identified for automatic discharge on a quarterly basis.

Many other disabled federal student loan borrowers are eligible for a TPD discharge but will have to apply manually — a process which staff attorney Alpha Taylor of the National Consumer Law Center called “overly burdensome.”

“For now, things will remain the same for borrowers who are not eligible for a TPD discharge based on the data matching program with SSA and VA,” Taylor told The Penny Hoarder. “They will still have to complete the overly burdensome TPD application process and submit a physician certification to have their loans discharged.”

155,000 Borrowers Defrauded by ITT Technical Institute

Before ITT Technical Institute closed its doors in 2016, the for-profit school deceived some students into taking on unnecessary debt.

“The institution engaged in widespread misrepresentations about the true state of its financial health and misled students into taking out unaffordable private loans that were allegedly portrayed as grant aid,” the Department of Education announced.

Approximately 155,000 former ITT students are now eligible for debt forgiveness after a new review of ITT Tech’s deceptive activity. The education department determined students who attended ITT but did not finish their degree starting as early as March 31, 2008 are now eligible for loan discharges.

To qualify for automatic discharge:

  • You attended ITT Tech on or after March 31, 2008; and
  • You took out qualifying student loans to pay for your schooling; and
  • You did not complete your degree or certificate program.

The education department will complete its data match process in this month and notify eligible borrowers in the following weeks.

ITT Tech is one of more than 50 defunct schools included in the Department of Education’s Closed School Discharge program. Other schools include The Chef’s Academy, Concordia University, Corinthian Colleges, Everest University and dozens more.

This discharge program typically provides automatic loan forgiveness to qualifying borrowers three years after a school’s closure. However, if you believe you are eligible and you don’t want to wait three years, you may apply to the program manually to receive a speedier discharge.

47,000 Current and Former Service Members

Due to a data-matching agreement — this time with the Department of Defense — the education department is retroactively waiving student loan interest for at least 47,000 current and former active-duty service members.

This benefit should not be confused with loan discharge, aka forgiveness. It affects only the interest on the loan(s).

Qualifying service members for this benefit were or are deployed to “areas that qualify them for imminent danger or hostile fire pay,” according to the Department, and must have taken out a federal student loan on or after Oct. 1, 2008.

Only a small percentage of qualifying service members have accessed the benefit. In 2019 before the data-matching agreement, the Department said it waived interest for only 4,800 service members.

“Now the Department is able to identify federal student loan borrowers who serve on active duty by matching records to DOD’s personnel records,” the Education Department stated in a news release. “As a result, the Department can automatically provide the student loan interest benefit.”

The Department of Education extended its freeze on interest rates and payments for federally held student loans through Jan. 31, 2022. This is the third extension since the beginning of the pandemic. 

What Happens When the Education Department Doesn’t Collect on Student Loan Debt?

Each time the Department of Education forgives a loan, it removes a financial burden for someone who pursued higher education. Simultaneously, the department loses out on money it was owed.

When we’re talking about 43 million borrowers who owe more than $1.7 trillion, the cost of forgiveness can add up quickly. Even the tailored relief provided by the department so far in 2021 accounts for $9.5 billion.

How does the department operate without those funds? Could loan forgiveness affect the budgets of other aid programs? What about everyone else with student loan debt?

The Department of Education did not respond when The Penny Hoarder posed those questions. However, a recent Brookings report by Adam Looney sheds some light. Looney is a nonresident senior fellow at Brookings, a former deputy assistant secretary at the U.S. Treasury Department and a tax policy expert.

“Even modest student loan forgiveness proposals are staggeringly expensive and use federal spending that could advance other goals,” Looney opens his report.

He argues that blanket student loan forgiveness tends to benefit whiter, better-educated and higher-income people who may not need the aid as badly as others. And while good natured, the cost of widespread forgiveness rivals the spending of unemployment insurance, food assistance programs and other government programs intended for Americans who need the aid the most.

Looney clearly favors more tailored loan forgiveness programs. And though President Joe Biden has voiced support for broad student loan forgiveness, his administration seems to be taking Looney’s advice.

Adam Hardy is a reporter and editor based in St. Petersburg, Florida. He covers personal finance, the gig economy, government benefits programs and other ways to make and manage money, and is a former staff writer for The Penny Hoarder. Connect with him on Twitter @hardyjournalism.




Here’s How to Create a Christmas Saving Plan

Don’t you want to scream when you see Christmas displays in the stores before Halloween? Or when “It’s Beginning to Look a Lot Like Christmas” is stuck in your head for two months because it starts playing in early November?

The Christmas creep can be annoying, but there’s at least one good reason to start thinking about the holidays before the leaves start changing color: It gives you more time to save.

With all the decorations, food, parties and gift giving, celebrating Christmas has become synonymous with spending money. The National Retail Federation found that consumers spent a collective $798.4 billion during the 2020 holiday season, up 8.3% from the year prior.

Waiting until November or December to prepare for these expenses means you’ll often end up charging your purchases and paying them off — plus interest — well into the new year. Instead, establish a Christmas savings plan to avoid debt and overspending.

Create Your Christmas Savings Plan

To save enough money to cover all your holiday expenses, figure out how much you plan to spend and divide that by the number of weeks you have until it’s time to start shopping. That will tell you how much money you need to save per week to build up your Christmas fund. In the personal finance sphere, we call this setting up a sinking fund.

To estimate your overall savings goal, first make a list that includes who you’ll be shopping for and how much you’ll spend on each person. It may be helpful to refer to what you spent last year. Or you could research the prices of items you plan to purchase for each person and total them up.

Heads up: Your Christmas savings plan needs to cover more than gifts. So add estimated costs for decorations, food and holiday events to your shopping list. Between special events where you contribute a bottle of wine, gifts for your kids’ friends or an office Secret Santa, plus the bounty of food on the actual holiday, these “extras” can really add up.

Total everything and divide it by the amount of weeks left until you’ll hit the stores. Unless you’re a fan of last-minute shopping, this means giving yourself some wiggle room before December 25.

To make things easier, we’ve laid out how much you need to save per week over a 12-week period to come up with anywhere from $200 to $1,000 in extra money for the holiday season.

A graphic that shows how much money you should save in a period of twelve weeks for your Christmas Sinking Fund. If you want to save $200, you’ll need to save $17 per week. If you want to save $250, you’ll need to save $21 per week. If you want to save $300, you’ll need to save $25 per week. If you want to save $350, you’ll need to save $30 per week. If you want to save $400, you’ll need to save $34 per week. If you want to save $450, you’ll need to save $38 per week. If you want to save $500, you’ll need to save $42 per week. If you want to save $600, you’ll need to save $50 per week. If you want to save $700, you’ll need to save $59 per week. If you want to save $800, you’ll need to save $67 per week. If you want to save $900, you’ll need to save $75 per week. If you want to save $1,000, you’ll need to save $84 per week.

If your Christmas budget is $450, you’ll need to save $38 per week for 12 weeks. If you want to save $800 to meet your Christmas savings plan goals, you’ve got to put aside $67 per week for 12 weeks.

Another tactic for holiday saving is to determine how much money you’re able to save and create your holiday budget based on that. For example, if you’re only able to save $25 a week to go toward your Christmas savings, you’d save $300 in 12 weeks. That would be your limit for all your holiday spending.

If you think you’ll need more money to pay for all your Christmas expenses and still emerge debt free, you’ll need to start saving earlier so you have more weeks to save up. In fact, you can implement your Christmas saving plan anytime during the year.

As you start saving for Christmas, it’s good to keep your holiday savings apart from the rest of your money so you don’t accidentally spend your stash on everyday expenses. If you use a sub-savings account at your bank or credit union, set up automatic savings transfers each week to ensure you stay consistent.

If you take the cash envelope route, make sure you have an envelope exclusively dedicated to holiday expenses and not other short-term goals. Set weekly calendar reminders to nudge you to put the money aside.

Tips to Help You Save Money for the Holiday Season

Trimming the fat from your weekly spending is a good way to find extra cash to put toward Christmas gifts. Take out your budget and highlight all the nonessential recurring expenses. Identify a few — like fast food dining or trips to the nail salon — that you can give up until you’ve finished your holiday shopping.

If you want to increase your savings fast, try a no-spend challenge. Or cut your grocery budget by doing the pantry challenge and do meal planning with what’s already at home.

Saving money for the holiday season isn’t all about making cuts. You can temporarily increase your income by getting a part-time holiday gig (bonus if you get a company discount) or doing odd jobs on Fiverr or TaskRabbit. Make room for the new gifts you’ll get by cleaning out your closets and selling stuff online.

Getty Images

How to Spend Less on Gifts During the Holiday Shopping Season

In addition to a Christmas savings plan, you also need to set a Christmas budget that’s financially comfortable for you.

Here are six ways to spend less this holiday season:

1. Make Your Own Gifts.

Get crafty and DIY some Christmas gifts for your friends and family. Try one of these  12 DIY Christmas gift ideas.

2. Shop Early and Take Advantage of Sales.

Rather than wait until you’ve reached your Christmas savings goal, you can use the money you’ve been saving up to buy gifts early whenever you catch something on sale. Bonus if you’ve saved any coupons.

3. Use Old Gift Cards.

It’s easy to forget about gift cards you’ve gotten long ago that still have a balance. Dig out your cards and check the balance. Buying presents with your gift cards will free up cash to use for something else.

4. Cash in Your Credit Card Rewards.

If you get cash back or points for swiping your credit card, save those up in order to use them for your holiday spending. Just be responsible with your credit card so you can triumph in a debt-free Christmas.

5. Implement the Four-Gift Rule.

Save money by restricting the amount of presents you give your kids. The four-gift rule focuses on getting each kid just four things: something they want, something they need, something to wear and something to read.

6. Comparison Shop Online.

Do your holiday shopping online and compare prices to get the best deal. Some browser extensions will even do the work of saving for you. Be aware of shipping costs when shopping online. These stores offer free shipping with no minimum order.

Nicole Dow is a senior writer at The Penny Hoarder.


5 Things You Must Do to Prepare for a Stock Market Crash

The S&P 500 index is hovering around record highs as of August 2021. But plenty of things could disrupt the economy, like the delta variant of COVID-19 and the supply shortages that are making prices of just about everything soar. With so much uncertainty, you may be worried that the stock market will crash again.

First, the bad news: Yes, the stock market will crash again at some point. Stock market crashes are completely normal. The stock market has crashed 21 times — defined as a drop of 20% or more from its peak — since the Wall Street crash of 1929. It’s inevitable that it will crash at some point. We just don’t know when.

Now the good news: Historically, though, the stock market has always recovered over time.

If you start preparing now, your finances will bounce back next time the market crashes as well.

5 Ways to Prepare for a Stock Market Crash

The problem is that many people don’t start thinking about how to prepare for a stock market crash until after the market has already crashed. But if you take action now, you’ll mitigate the damage later.

1. Don’t Try to Time Your Way Out

Some people attempt what’s known as market timing, which means they try to cash out their investments before the market crashes. Or they don’t invest when stocks are surging because they think the market is overpriced.

The problem is that even the best minds on Wall Street can’t predict the market’s highs and lows. The stock market could stay hot for a long time. If you avoid investing out of fear or because you’re hoping to invest when the market dips, you could miss out on significant gains.

A better strategy is to practice dollar-cost averaging, which means you invest a set amount at regular intervals. If you invest in a 401(k) or a similar employer-sponsored retirement account, you’re already doing this since you’re investing money from each paycheck. The same goes for if you automatically invest each month in a Roth IRA or traditional IRA. Over time, dollar-cost averaging tends to produce better returns than trying to time the market.

2. Build Your Emergency Fund

An emergency fund is the best investment you can make if you’re worried about a stock market crash. You need a cash cushion in case you’re hit with a big expense or a job loss right after the market has tanked. Otherwise, you may have to dip into your 401(k) or other investments before they’ve had time to recover. If you’re younger than 59 ½, you could also face early withdrawal penalties.

If you don’t have at least a six-month emergency fund, make building one a high priority. Of course, this is a long-term goal that may take years to achieve. But any safety net you’re able to build is a win.

Try to budget at least 10% of your paycheck for emergency savings. If that’s not doable or you want to speed up your progress, taking on a side hustle to build your reserves is a good strategy.

If you’re approaching retirement or you’ve already retired, it’s especially important to make sure you have ample cash reserves. An ill-timed crash can devastate your retirement plans by forcing you to sell investments before they’ve recovered or claim Social Security too early.

Consider meeting with a fee-based financial adviser if you’re retired or plan to retire in the next five years. They can help you determine how much cash you should have on hand and whether you have the right ratio of stocks vs. bonds.

3. Limit Individual Stocks to 5% of Your Portfolio

Maintaining a diversified portfolio is essential to weathering a stock market crash. If you invest in stocks of individual companies, try to limit any single investment to no more than 5% of your overall portfolio.

Whenever you invest in stocks, you risk losing money just because the market is down. But the risks of investing in individual stocks are greater compared to investing in index funds that move up and down with the overall stock market. For example, there’s the risk that one industry will be hit especially hard, as occurred with tech stocks during the dot-com crash, and risks specific to a company, like poor management decisions or increased competition.

4. Rethink Risky Investments

If you’ve made a lot of money on risky investments like meme stocks (think GameStop and AMC), penny stocks or Dogecoin, think very carefully about whether it’s time to sell. There’s nothing wrong with investing a small amount of money in a high-risk investment, provided that you have adequate savings and you don’t have high-interest debt. But these investments are highly volatile, so your losses could be especially steep.

5. Decide Now if You Want to Invest More

A stock market crash can be a great opportunity to invest more if you have the stomach for it. Provided that you have a solid emergency fund and you’re investing for retirement, you could set aside extra money to invest when the stock market crashes.

Because it’s natural to panic when stocks nosedive, make a plan now. For example, you could decide that you’ll invest $X extra if the S&P 500 index falls below 4,000. Or if there’s a stock you want to buy, you could decide that you’ll buy it if the price drops below a certain level.

This may seem counterintuitive to what we said about not trying to time the market. To be clear, saving money to invest when stock dips is a strategy you should use only if you’re already dollar-cost averaging by investing for retirement. But if your finances are in good shape and it fits with your risk tolerance, it’s OK to prepare for some bargain hunting next time stocks crash.

What Should You Do When the Market Crashes?

Probably nothing. A stock market crash is panic-inducing, but it’s best not to make major decisions about money from a place of fear. Keep investing in your 401(k) after a crash unless your financial situation has drastically changed. Avoid checking your account daily.

It’s never pleasant to see your net worth nosedive. But if you don’t sell your investments at a loss, you really haven’t lost money. With time and patience, your finances will eventually recover.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder.