Fixed Expense vs Variable Expense

Budgeting is the best way to get a better handle on where your money is going — which can help you get a better handle on where you’d like to see your money go.

But before you dive into the nitty-gritty of each individual line item on your ledger, you first need to understand the difference between fixed expenses and variable expenses.

As their name suggests, fixed expenses are those that are fixed, or unchanging, each month, while variable expenses are the ones with which you can expect a little more wiggle room. However, it’s possible to make cuts on items in both the fixed and variable expense category to save money toward bigger financial goals, whether that’s an epic vacation or your eventual retirement.

Let’s take a closer look.

What Is a Fixed Expense?

Fixed expenses are those costs that you pay in the same amount each month — items like your rent or mortgage payment, insurance premiums, and your gym membership. It’s all the stuff whose amounts you know ahead of time, and which don’t change.

Fixed expenses tend to make up a large percentage of a monthly budget since housing costs, typically the largest part of a household budget, are generally fixed expenses. This means that fixed expenses present a great opportunity for saving large amounts of money on a recurring basis if you can find ways to reduce their costs, though cutting costs on fixed expenses may require bigger life changes, like moving to a different apartment — or even a different city.

Keep in mind, too, that not all fixed expenses are necessities — or big budget line items. For example, an online TV streaming service subscription, which is withdrawn in the same amount every month, is a fixed expense, but it’s also a want as opposed to a need. Subscription services can seem affordable until they start accumulating and perhaps become unaffordable.

Recommended: Are Monthly Subscriptions Ruining Your Budget?

What Is a Variable Expense?

Variable expenses, on the other hand, are those whose amounts can vary each month, depending on factors like your personal choices and behaviors as well as external circumstances like the weather.
For example, in areas with cold winters, electricity or gas bills are likely to increase during the winter months because it takes more energy to keep a house comfortably warm. Grocery costs are also variable expenses since the amount you spend on groceries can vary considerably depending on what kind of items you purchase and how much you eat.

You’ll notice, though, that both of these examples of variable costs are still necessary expenses — basic utility costs and food. The amount of money you spend on other nonessential line items, like fashion or restaurant meals, is also a variable expense. In either case, variable simply means that it’s an expense that fluctuates on a month-to-month basis, as opposed to a fixed-cost bill you expect to see in the same amount each month.

To review:

•   Fixed expenses are those that cost the same amount each month, like rent or mortgage payments, insurance premiums, and subscription services.

•   Variable expenses are those that fluctuate on a month-to-month basis, like groceries, utilities, restaurant meals, and movie theater tickets.

•   Both fixed and variable utilities can be either wants or needs — you can have fixed-expense wants, like a gym membership, and variable-expense needs, like groceries.

When budgeting, it’s possible to make cuts on both fixed and variable expenses.

Recommended: Grocery Shopping on a Budget

Benefits of Saving Money on Fixed Expenses

If you’re trying to find ways to stash some cash, finding places in your budget to make cuts is a big key. And while you can make cuts on both fixed and variable expenses, lowering your fixed expenses can pack a hefty punch, since these tend to be big line items — and since the savings automatically replicate themselves each month when that bill comes due again. (Even businesses calculate the ratio of their fixed expenses to their variable expense, for this reason, yielding a measure known as operating leverage.)

Think about it this way: if you quit your morning latte habit (a variable expense), you might save a grand total of $150 over the course of a month — not too shabby, considering its just coffee. But if you recruit a roommate or move to a less trendy neighborhood, you might slash your rent (a fixed expense) in half. Those are big savings, and savings you don’t have to think about once you’ve made the adjustment: they just automatically rack up each month.

Other ways to save money on your fixed expenses include refinancing your car (or other debt) to see if you can qualify for a lower payment… or foregoing a car entirely in favor of a bicycle if your commute allows it. Can you pare down on those multiple streaming subscriptions or hit the road for a run instead of patronizing a gym? Even small savings can add up over time when they’re consistent and effort-free — it’s like automatic savings.

Of course, orchestrating it in the first place does take effort (and sometimes considerable effort, at that — pretty much no one names moving as their favorite activity). The benefits you might reap thereafter can make it all worthwhile, though.

Saving Money on Variable Expenses

Of course, as valuable as it is to make cuts to fixed expenses, saving money on variable expenses is still useful — and depending on your habits, it could be fairly easy to make significant slashes. For example, by adjusting your grocery shopping behaviors and aiming at fresh, bulk ingredients over-packaged convenience foods, you might decrease your monthly food bill. You could even get really serious and spend a few hours each weekend scoping out the weekly flyer for sales.

If you have a spendy habit like eating out regularly or shopping for clothes frequently, it can also be possible to find places to make cuts in your variable expenses. You can also find frugal alternatives for your favorite spendy activities, whether that means DIYing your biweekly manicure to learning to whip up that gourmet pizza at home. (Or maybe you’ll find a way to save enough on fixed expenses that you won’t have to worry as much about these habits!)

The Takeaway

Fixed expenses are those costs that are in the same amount each month, whereas variable expenses can vary. Both can be trimmed if you’re trying to save money in your budget, but cutting from fixed expenses can yield bigger savings for less ongoing effort.

Great budgeting starts with a great money management platform — and a SoFi Money® cash management account can give you a bird’s-eye view that puts everything into perspective. You’ll also have access to the Vaults feature, which helps you set aside money for specific savings purposes, no matter which goals are the most important to you, all in one account.

Check out SoFi Money and how it can help you manage your financial goals.

Photo credit: iStock/LaylaBird


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Using Income Share Agreements to Pay for School

Many students end up taking out loans to finance the cost of college. As of the first quarter of 2021, Americans collectively held $1.57 trillion in student debt, up $29 billion from the previous quarter. And a significant share of borrowers were struggling with their debt burdens: Just under 6% of total student debt was 90 days or more past due or in default.

Students looking for alternatives to student loans can apply for grants and scholarships, take on work-study jobs or other part-time work, or find ways to save on expenses.

Recently, another alternative has appeared on the table for students at certain institutions: income share agreements. An income share agreement is a type of college financing in which repayment is a fixed percentage of the borrower’s future income over a specified period of time.

As this financing option grows in popularity, here are some key things to know about how these agreements operate and to help you decide whether they’re the right choice for you.

How Income Share Agreements Work

Unlike student loans, an income share agreement, also known as an income sharing agreement or ISA, doesn’t involve a contract with the government or a private lender. Rather, it’s a contract between the student and their college or university.

In exchange for receiving educational funds from the school, the student promises to pay a share of his or her future earnings to the institution for a fixed amount of time after graduation.

ISAs don’t typically charge interest, and the amount students pay usually fluctuates according to their income. Students don’t necessarily have to pay back the entire amount they borrow, as long as they make the agreed-upon payments over a set period. Though, they also may end up paying more than the amount they received.

Income share agreements only appeared on the scene in the last few years, but they are quickly expanding. Since 2016, ISA programs have launched at places like Purdue University in Indiana, Clarkson University in New York, and Lackawanna College in Pennsylvania. Each school decides on its own terms and eligibility guidelines for the programs. The school itself or outside investors may provide funds for ISAs.

Purdue University was one of the first schools to create a modern ISA program. Sophomores, juniors, and seniors who meet certain criteria, including full-time enrollment and satisfactory academic progress, are eligible to apply.

Students may have a six-month grace period after graduation to start making payments, similar to the six-month grace period for student loans, and the repayment term at Purdue is typically 10 years. For some schools, however, the repayment term ranges from two to 10 years.

The exact amount students can expect to pay depends on the amount they took out and their income. The university estimates that a junior who graduates in 2023 with a marketing major will have a starting salary of $51,000 and will see their income grow an average of 4.7% a year.

If that student borrowed $10,000 in ISA funds, he or she would be required to pay 3.39% of his or her income for a little over eight years. The total amount that student would pay back is $17,971. The repayment cap for the 2021-2022 school year is $23,100.

Again, every ISA is different and may have different requirements, so be sure to check with your college or university for all the details.

The Advantages of Income Share Agreements

ISAs aren’t for everyone, but they can be beneficial for some students. For example, students who don’t qualify for other forms of financial aid, such as undocumented immigrants, may have few other options for funding school.

For students who have already maxed out their federal loans, ISAs can be a more affordable option than Parent PLUS loans or private student loans, both of which sometimes come with relatively high interest rates and fees.

Compared to student loans, many ISAs also protect students by preventing monthly payments from becoming unaffordable. Since the amount paid is always tied to income, students should never end up owing more than a set percentage for a fixed period of time. However, a student’s field of study may impact this. Students who are high earners after college may end up paying more to repay an ISA than they would have under other financing options.

If a student has trouble finding a well-paying job, or finding one at all, payments typically shrink accordingly. For example, Purdue sets a minimum income amount below which students don’t pay anything.

In Purdue’s case, the student won’t owe anything else once the repayment period is over, compared to student loans that can multiply exponentially over time due to accrued interest.

Purdue and several other universities also set the amount and length of repayment based on a student’s major, meaning monthly payments can be more tailored to graduates’ fields and salaries than student loans are. For fortunate students who see their income rise beyond expectations, many schools ensure the student won’t pay beyond a certain cap.

Potential Pitfalls of Income Share Agreements

ISAs come with some risks and drawbacks, as well. Firstly, since the repayment amount is based on income, a student who earns a lot after graduation might end up paying more than they would have with some student loans. This is because if a student earns a high income after graduating, they’d pay more to the fund. Second, the terms of repayment can vary widely, and some programs require graduates to give up a huge chunk of their paychecks.

For example, Lambda School , an online program that trains students to be software engineers, requires alums who earn at least $50,000 to pay 17% of their income for two years (up to $30,000). This can be a burden for recent graduates, especially compared to other options like income-driven repayment, which determines the percentage of income going towards student loans based on discretionary income.

Currently, there is very little regulation of ISAs, so students should read ISA terms carefully to understand what they’re signing up for.

No matter what, income share agreements are still funding that needs to be repaid, often at a higher amount than the principal.

So you’re still paying more overall for your education compared to finding sources of income like scholarships, a part-time job, gifts from family, or reducing expenses through lifestyle changes or going to a less expensive school.

How Do Income Share Agreements Impact You?

Many schools’ ISA programs are designed to fill in gaps in funding when students do not receive enough from other sources, such as financial aid, federal or private student loans, scholarships or savings. Thus, it’s important to understand how an ISA will impact both your long-term finances and other methods to pay for college.

ISAs do not impact need-based aid like grants or scholarships. Students with loans, however, could have a more complicated repayment plan with multiple payments due each month.

With ISAs, there is less clarity as to how much you’ll end up repaying from up to 10 years of income. As your income changes, your payment will remain the same percentage unless it falls below the minimum income threshold ($1,666.67 at Purdue) or reaches a repayment cap.

Whereas students may pay more than the loan principal to reduce interest, ISAs often require reaching a repayment cap of roughly double the borrowed amount to be paid off early.

Depending on your future income and career path, an ISA could cut into potential savings and investments or serve as a safety net for a less stable occupation.

Who Should Consider An ISA?

As previously mentioned, income share agreements are an option for students who have maxed out on federal loans and scholarships. There are other circumstances when an ISA may or may not be worth considering.

Colleges may require a minimum GPA to be eligible for an ISA. For instance, Robert Morris University requires incoming students to have a 3.0 high school GPA and maintain a 2.75 GPA during their studies for continued funding eligibility. Taking stock of how an ISA aligns with your academic performance before accepting funding could reduce stress later on.

Since ISA programs structure repayment as a percentage of income, graduates who secure high-paying jobs can end up paying a significant sum compared to the borrowed amount. An ISA term could be more favorable to students planning to enter sectors with more gradual salary growth, such as civil service.

Repayment plans at income sharing agreement colleges are not uniform. Students at schools with lower payment caps and early repayment options may find ISAs more advantageous.

Considering Private Loans

Students should generally exhaust all their federal options for grants and loans before considering other types of debt. But for some students looking to fill gaps in their educational funding, private student loans may make more sense for their needs than ISAs.

Recommended: Examining the Different Types of Student Loans

In particular, students who expect to have high salaries after graduation may end up paying less based on interest for a private student loan than they would for an ISA. Some private loans can also allow you to reduce what you owe overall by repaying your debt ahead of schedule.

SoFi doesn’t charge any fees, including origination fees or late fees. Nor are there prepayment penalties for paying off your loan early. You can also qualify for a 0.25% reduction on your interest rate when you sign up for automated payments.

The Takeaway

As mentioned, an income share agreement is an alternate financing option for college. An ISA is generally used to fill in gaps in college funding. Generally, it’s an agreement between the borrower and the school that states the borrower will repay the funds based on their future salary for a set amount of time.

One alternative to an ISA could be private student loans. Keep in mind that private loans are generally only considered as an option after all other sources of federal aid, including federal student loans, have been exhausted.

If you’ve exhausted your federal loan options and need help paying for school, consider a SoFi private student loan.


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Source: sofi.com

The Best Cities for Public Transportation

If you’re looking to have an easy commute or just want to spend less time in your car, these cities are great options for using public transportation.

According to the American Public Transportation Association (APTA), Americans board public transportation 34 million times. Every. Single. Weekday.

That adds up to a whopping 9.9 billion trips per year. And why not? Beyond the obvious savings of traveling by bus, train, trolley or metro — both financial and environmental — leaving the driving to someone else allows you to kick back and text, read, work, or snooze to your heart’s content. And let’s be honest, road rage is for suckers.

If you’re one of us in-the-know commuters, you’re going to want to check out our list of the best cities in America for public transportation.

Takeaways about the best cities for public transportation

You’re used to looking at route maps, right? Yeah, we know. This is why we created this interactive map to highlight the top 150 cities for public transportation. Can you guess which cities made our top 10? You’re probably not too far off.

Dashboard 1
  • The Northeast region has the strongest representation among our top 10.
  • The No. 1 city boasts a whopping 1,148 stations across the city.
  • Providence, RI has the lowest price for a monthly unlimited pass.

These are the 10 best cities for public transportation

The best cities for public transportation are mostly urban centers with fantastic infrastructure. So, don’t expect to see a “city” like Des Moines make the cut.

And while the East Coast may have the slightest overall edge, you’ll find at least a couple of cities in every major region of the country represented here. Read on to find out which U.S. cities are the best for public transportation.

10. Minneapolis, MN

minneapolis mn

minneapolis mn

Minneapolis is serious about keeping its citizens warm and comfortable. Take, for example, the Minneapolis Skyway, a 9.5-mile network of enclosed heated walkways. And while that makes traveling on foot a breeze — even in the dead of winter — sometimes, you need to travel farther than your own two feet will take you.

And for those trips, there’s the METRO light-rail, along with 18 bus lines to choose from, including fare-free “Free Ride” buses you can hop on along Nicollet Mall.

Even for the rides that aren’t free, your public transportation budget will go far in Minneapolis — the second cheapest city in our top 10 for transport (monthly unlimited).

Think living in this half of the Twin Cities is your speed? Get the scoop on the best neighborhoods in Minneapolis, find an apartment and stock up on some serious winter wear.

9. Miami, FL

miami fl

miami fl

Is Minneapolis too chilly (OK, frigid) for your taste? Perhaps you should consider the opposite tip of the country. Down in Miami, the vibe is endless sunshine and permanent vacation mode. And while traffic is no joke (understatement), public transportation is a stress-free way to get around the city.

First, you’ve got the charming free trolleys, which come every 15 minutes. If no-charge sounds pretty good, you’ll also love the Metromover, which you can pick up in Brickell or Downtown. Trying to get down to Coral Gables, Coconut Grove or South Miami? Hop on the Metrorail. And for getting around Miami Beach, the bus is your best option. Get up to speed on everything you need to know about living in Miami and start searching for your South Florida apartment.

8. Philadelphia, PA

philadelphia pa

philadelphia pa

Living in Philly gives you all the East Coast arts, culture, education and sports you can handle — without the N.Y.C. price tag. You get a lot more bang for your buck in Philadelphia, and you’ll still find a public transportation system that rivals that of the Big Apple.

The Southeast Pennsylvania Transportation Authority (SEPTA) is the country’s sixth-largest public transit system. More than 1.3 million people ride SEPTA’s train, subway, trolley and bus lines every day. The extensive system makes it simple and convenient to explore all that both Philadelphia and the surrounding areas have to offer.

7. Providence, RI

providence rhode island

providence rhode island

If you live in Providence, you’ll enjoy the cheapest price for a monthly unlimited travel pass among our top 10. The capital of our nation’s smallest state is home to Brown University and the Rhode Island School of Design. Getting around town is a breeze for co-eds, commuters and everyone in-between.

The Rhode Island Public Transit Authority (RIPTA) provides low-cost bus and trolley services around the city. In the summer, there are even routes to the beach. Better yet, all of the buses have bike racks so you can explore Rhode Island on two wheels. And if you want to really soak up the scenery, take the hour-long ferry ride from Providence to Newport.

Plus, Providence is a stop on one of the Massachusetts Bay Transportation Authority’s (MBTA) commuter rail lines, so you can get to Boston in just over an hour.

6. Seattle, WA

seattle wa

seattle wa

Have you ever gazed out over the Puget Sound at the majestic Cascade Mountains on one of those magical sunny days in Seattle? It’s the kind of scene you don’t soon forget. And while those sunny days are somewhat rare, there’s a lot to love about living in Seattle, from the coffee culture to the ease of getting around on the fantastic public transportation system.

Grab an ORCA card and hop on the city’s easy-to-navigate streetcars, light rail and busses. Not only are there ferries from which to soak up those amazing views, but Seattle also boasts a monorail. Considering a move to Emerald City? Scope out the best neighborhoods in Seattle, then start searching for a place to live.

5. Chicago, IL

chicago il

chicago il

Even if you’ve never ridden it before, you’ve probably heard of “the L.” Short for “elevated train,” locals and visitors alike love the L because it’s both cheap and easy to use. And here in a city with two airports, easy public transportation is key.

Take the L’s Blue Line to O’Hare International Airport (ORD) or the Orange Line to get to Chicago Midway International Airport (MDW). The Chicago Transit Authority also has an extensive bus system, while the Metra regional train system will take you through downtown Chicago and to the suburbs and cities beyond. Whether you’re looking to live large in a luxury apartment building, or you’re looking for a budget-conscious ‘hood, you’ll find a wide range of apartments in Chicago.

4. San Francisco, CA

san francisco ca

san francisco ca

Here’s the thing about living in San Francisco. As far as cities go, it’s fairly compact, so nothing is too far away. Which makes it seem like you’ll probably be fine on foot. But there’s one huge consideration — the hills. Depending on how big your calf muscles are, and how hard you want them to work, you’re going to need to lean on public transportation at some point to cruise you up those inclines.

Fortunately, you can travel in style on the city’s iconic trolleys. Or, take the BART (Bay Area Rapid Transit), a rail system that will take you all around the Bay Area. If you’re staying in the city, MUNI has you covered with an extensive network of trains, buses and cable cars. If there’s one place you don’t need a car, it’s San Francisco. Plus, the city is expensive enough without paying for your own set of wheels.

3. Washington, D.C.

washington dc

washington dc

OK, let’s start with the bad news: Washington, D.C. is the third-most congested city in the country. Boo. But that’s exactly why you don’t want a car here, or really need one for that matter. The best way to escape road rage? On the subway. The Metrorail is the most efficient way to get around Washington, D.C. There’s also the Metrobus and the D.C. Circulator if you want to brave the roads — and prefer your public transportation with a bit of natural sunlight.

And since there are so many sights to see, even locals can appreciate the more tourist-oriented modes of transportation. Spend a sunny day on a boat ride across the Potomac, or hop on one of D.C.’s trolley tours to soak up the sights without stress. Fancy living in the nation’s capital? Take a quiz to find out which Washington, D.C., neighborhood is best for you.

2. Boston, MA

boston ma

boston ma

Beantown is an excellent city to traverse on foot. And when you’re not walking, you’re going to want to hop on the “T.” More formally known as the Massachusetts Bay Transportation Authority (MBTA), the five-line system has subways, trains, buses and trolleys that connect you to all of downtown Boston’s neighborhoods.

And who doesn’t love water taxis? Cruise across Boston Harbor on a boat and pat yourself on the back for avoiding some of the country’s worst traffic. Warming up to the idea of an East Coast move? Get up to speed on the cost of living in Boston, then find your perfect Boston apartment.

1. New York, NY

new york ny

new york ny

No surprise here, right? New York has long been the best city for public transportation in America. Of course, there are the iconic yellow taxis, but you simply can’t get much more connected than New York’s subway system. This impressive 24-hour network goes well beyond the city to shuttle commuters to both Long Island and New Jersey. With 1,148 train stations and 1,224 station lines, New York is untouchable when it comes to public transportation.

Having a car in N.Y.C. is not only near impossible (financially and otherwise), it’s simply not necessary. Put all of the energy you save in navigating the roads into your New York apartment search. It’s no secret that the Big Apple requires a big budget, and finding an affordable apartment is going to take some research. Start by figuring out which New York neighborhood is best for your lifestyle.

Methodology

To find the best cities for public transportation, we looked at metrics related to public transportation usage, accessibility and cost.

Features were normalized and then weighted based on the following scale:

Usage: 25 points

  • Percentage of public transportation users: 25 points

Accessibility: 50 points

  • Bus Lines per density: 10 points
  • Public transit stations per density: 10 points
  • Number of tracks: 10 points
  • Transit lines per density: 10 points
  • Number of transit systems: 10 points

Cost: 25 points

  • Price for a 30-day pass: 12.5 points
  • Percentage of pass cost related to local mean income: 12.5 points

Transit system info was from citylines.co. Transit cost was from ValuePenguin. Bus lines were from a database of 8 million commercially available business listings. These listings may not reflect recent changes to bus line availability. Usage is from the U.S. Census Bureau.

Rent prices are based on a rolling weighted average from Apartment Guide and Rent.com’s multifamily rental property inventory as of October 2021. Our team uses a weighted average formula that more accurately represents price availability for each unit type and reduces the influence of seasonality on rent prices in specific markets.

The rent information included in this article is used for illustrative purposes only. The data contained herein do not constitute financial advice or a pricing guarantee for any apartment.

Source: rent.com

Options for When You Can’t Afford Your Child’s College

Every parent wants to help their child succeed. But when it comes to paying for college, it’s not always possible.

Fortunately, depending on the circumstances, you and your child may have several options to help them pay for school. First off, there are a variety of resources for students designed to help them pay for college. This includes things like federal student loans, scholarships, and grants.

Beyond that, students could look into getting a part-time job or paid internship. This could potentially boost their resume while offering an opportunity to earn money to pay for college.

From there, parents can consider options including borrowing a loan to help pay for college.

Options for Parents and Students

Parents and students can work together to create a plan to help pay for college. Here are some ways you can both work together to pay for college.

Fill Out the FAFSA

If your student is a dependent, the FAFSA® or Free Application for Federal Student Aid requires both your child’s information and yours as their parent. Work together to fill out the form. The FAFSA is used to determine eligibility for federal student aid including federal student loans, some scholarships and grants, and the federal work-study program.

The FAFSA needs to be filled out annually.

Choose a More Affordable School

Enrolling in a more affordable school may relieve some of the financial burden facing your family. Depending on your child’s interests and career goals, they may be able to enroll in a community college for the first two years of study to cut down on tuition costs.

Living at Home

If your child’s school is local, you can also offer to have them stay home, so room and board are covered. If your child’s school is not close to home, you can still review housing costs. While some schools require first-year students to live on-campus, after, students may find that living in off-campus housing may be more affordable than paying on-campus rates. Explore the realities for your student.

Options for Students

There are a variety of funding sources available to students. When triaging, focus first on the options that don’t need to be repaid, such as scholarships or grants. Then, there are things like part-time work and student loans that can be used to pay for college. Here are a few options to consider.

Applying for Scholarships and Grants

Depending on the school your child is planning to attend and their grades and activities in high school, they may be able to qualify for an academic or merit-based scholarship .

Grants, on the other hand, are generally based on your child’s financial need. Students typically aren’t required to repay scholarships or grants, so they’re a great option if you can’t pay for college on your own and want to avoid debt as much as possible.

It’s also possible to get scholarships through private organizations. Websites like Scholarships.com and FastWeb allow you to search through thousands of scholarships, making it easier to find one for which your child might qualify.

There are also scholarships available for current college students, so your child can continue to apply for those options even after he or she is enrolled.

Work-Study Program

When filling out the FAFSA, you can specify whether you are interested in participating in the work-study program. This program offers part-time jobs to students who demonstrate financial need. Depending on the school, students may be assigned a job or have the option to apply for a job.

One major perk of the work-study program is that the money earned won’t count toward income totals when filling out the FAFSA for the next school year.

Part-Time Job

Attending classes, doing homework, and establishing a social life are all important elements of a college experience. But working a few hours a week can help relieve some of the stress of dealing with the expenses that come with that experience.

For example, let’s say your child gets a job working eight hours a week and earns $10 per hour. Over the course of four years, assuming they don’t change their schedule, they could earn around $16,640. Even after taxes, that might help reduce the amount they would need to borrow or spend for college by thousands of dollars.

Borrowing Student Loans

Both federal and private student loans are available to students. The U.S. Department of Education provides student loans to college students without requiring a credit check (except for PLUS loans). And federal loans come with relatively low fixed interest rates, plus access to some special benefits — such as income-driven repayment plans or the option to pursue Public Service Loan Forgiveness.

As mentioned above, to apply students need to fill out the FAFSA each year. Undergraduate students may qualify for two types of federal loans: subsidized or unsubsidized. Direct Subsidized Loans are awarded to students based on financial need. The government subsidizes, or pays for, the interest on these loans while the borrower is enrolled in school and during the grace period and other qualifying periods of deferment.

Direct Unsubsidized Loans are not awarded based on financial need and borrowers are responsible for paying all of the interest that accrues on this type of loan.There is no credit check when applying for these types of federal student loans.

Recommended: Private vs Federal Student Loans

Students can also look into borrowing a private student loan, though it’s worth noting that these loans may lack the benefits and protections afforded to federal student loans (like income-driven repayment plans) and are therefore generally considered as a last resort option.

Private student loans are offered by private lenders and to apply, students will have to fill out an application directly with their lender of choice. Each lender may have different terms and rates so it can be worth shopping around to find the best option for your personal situation. Lenders will generally evaluate a borrower’s financial situation and creditworthiness when determining how much to lend and at what rates. If a student does not qualify for a private loan on their own, they may be able to add a cosigner to the loan.

Options for Parents

As a parent, it can be frustrating and stressful when you feel like you can’t afford your child’s college tuition. Take the time to consider what you can afford without sacrificing your own important goals, including retirement.

Here are a few actions that could help you assist your child pay for their college education.

Borrow a Loan

Parents can consider borrowing a private student loan or a federal student loan. Parent PLUS or private student loans.

Parent PLUS Loans are federal loans that are available to parents. The interest rate on these loans is a bit higher than for Direct Subsidized or Unsubsidized Loans and a credit check is required. In order to qualify, parents must not have an adverse credit history . In the case that a potential parent borrower does not qualify for a Parent PLUS loan on their own, they may be able to add an endorser to their application.

If you need extra help funding your children’s
education, you can look into private
parent student loans from SoFi.

Private lenders may also offer parent student loans. Parents can apply directly with the lender, and as mentioned above, it can be worth shopping around to see what types of rates and terms for which you may qualify. SoFi offers parent loans that can be applied for directly online and are fee free.

Cosign a Student Loan

If you do not want to borrow a loan to pay for your child’s college education and your child has exhausted their federal student loan options, you could cosign a private student loan with them. Keep in mind that, as already noted, private student loans are generally considered an option only after all other sources of aid and funding have been exhausted. This is because they don’t offer the same borrower protections as federal student loans.

Cover What You Can

Another way is to find other expenses you can cover. You may consider footing the bill for their textbooks every semester, or maybe you have enough income to help with their monthly rent or college-provided room and board fees. While covering a smaller expense may feel anticlimactic, it can still make a difference to your student.

The Takeaway

If you’re struggling to pay for tuition costs, you’re not alone. As you consider ways to help your child pay their way through college resources like scholarships, grants, work-study, and federal student loans are all options to consider. In some situations, you and your child may consider transferring or enrolling in a less expensive school or cutting costs by living at home.

If those options aren’t enough — some students and their families may consider private student loans. In the spirit of complete transparency, if you do need to resort to student loans, we want you to know that we believe you should exhaust all of your federal grant and loan options before you consider SoFi as your private loan lender.

If you do decide a private student loan is the right fit for your education, know that SoFi’s private student loan process is trusted, easy, and fast. We offer flexible payment options and terms, and there are no hidden fees.

Learn more about SoFi’s private student loans; get a rate quote to see what kind of terms you might qualify for.


SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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Source: sofi.com

Biden Tax Plan Passed by House: How the Build Back Better Act Could Affect Your Tax Bill

President Biden’s “Build Back Better” social spending and tax bill is slowly working its way through Congress. It was just passed by the House of Representatives and is now on its way to the Senate. While there’s still plenty of political wrangling to come, and additional changes are expected in the Senate, we now have a better sense of where the Democrats are headed with this budget reconciliation bill. The president’s plan calls for sharp spending increases for a wide variety of social programs that would impact childcare, health care, higher education, climate change, and more. The package also contains a number of tax law changes that would boost taxes for some people and cut them for others.

How might these changes affect your future income tax bills if the Build Back Better Act ultimately becomes law? First, the proposed legislation calls for higher taxes and fewer tax breaks for the wealthy. That’s no surprise, because Biden and Congressional Democrats have said for months that they want to make the rich pay their “fair share” of taxes and use the additional revenue to strengthen the social safety net. The bill would also extend enhancements to certain tax credits for lower- and middle-income families. These enhancements were designed to help ordinary Americans pay for some of the day-to-day expenses they incur. There are also new or improved tax breaks for higher education costs, clean energy initiatives, and expenses paid by certain workers.

At this point, it’s impossible to say which (if any) of the proposed tax law changes will survive and be enacted into law. Additional tax provisions could be added later, too. Nothing is set in stone yet. However, smart taxpayers will get up-to-speed on the Build Back Better bill’s tax proposals now, so they’re prepared if/when they make it through the legislative process. To get you started, we’ve identified some of the most common ways the Build Back Better plan could either raise or lower your taxes. After all, what you know now could save you big bucks down the road.

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Imposing a Surtax on Wealthy Americans

picture of young rich couple outside their homepicture of young rich couple outside their home

Negotiations over how to pay for the planned social spending provisions were contentious at times. There always seemed to be general agreement among the president and most Congressional Democrats that higher taxes on the wealthiest Americans should be part of the plan. But nailing down exactly how to tax them proved to be difficult. The Democrats bounced back and forth between a laundry list of proposals, including raising the top income tax rate, taxing capital gains at ordinary rates, eliminating stepped-up basis on inherited property, and a “billionaires tax” on the value of unsold assets.

The Build Back Better plan passed by the House settles on a “surtax” on millionaires and billionaires starting in 2022. The extra tax would equal 5% of modified adjusted gross income from $10 million to $25 million ($5 million to $12.5 million for married taxpayers filing a separate return). It would then jump to 8% for modified AGI above $25 million ($12.5 million for married taxpayers filing separately). Modified AGI would mean regular AGI reduced by any deduction allowed for investment interest.

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Expanding the Surtax on Net Investment Income

picture of three stock traders looking at computer screenspicture of three stock traders looking at computer screens

In addition to the capital gains tax, wealthier Americans may also be hit with an additional 3.8% surtax on net investment income (NII includes, among other things, taxable interest, dividends, gains, passive rents, annuities, and royalties.) This surtax only applies if you’re a single or head-of-household filer with a modified AGI over $200,000, a joint filer with a modified AGI over $250,000, or a married person filing a separate return with a modified AGI over $125,000.

Starting in 2022, the Build Back Better Act would expand the surtax to cover net investment income derived in the ordinary course of a trade or business for single or head-of-household filer with a modified AGI over $400,000, a joint filer with a modified AGI over $500,000, or a married person filing a separate return with a modified AGI over $250,000.

The legislation also clarifies that the surtax doesn’t apply to wages on which Social Security and Medicare payroll taxes (i.e., FICA taxes) are already imposed.

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Permanently Disallowing Excess Business Loss Deduction

picture of worried businessman looking at negative charts and graphspicture of worried businessman looking at negative charts and graphs

Another provision in the Build Back Better Act to limit business loss deductions would heap more taxes (mostly) on the rich. Under current law, non-corporate business owners can’t deduct losses exceeding $250,000 ($500,000 for joint filers) on Schedule C. Any excess losses can be treated as a net operating loss in later tax years, though.

This business loss limitation rule is currently set to expire in 2027. However, under the Build Back Better Act, the rule would be made permanent retroactively beginning with the 2021 tax year. In addition, the legislation would only allow excess losses to be treated as a deduction for the next tax year and repeal the limit on excess farm losses by farmers who received certain subsidies.

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Denying Tax Break for Sale of Small Business Stock by Wealthy Taxpayers

picture of upset rich manpicture of upset rich man

President Biden’s proposal would also choke off a tax break for higher-income Americans who invest in small businesses. Currently, there’s no tax on any gain from the sale or exchange of certain small business stock if you acquired the stock after September 27, 2010, and held it for more than five years. (For qualifying stock acquired from February 18, 2009, to September 27, 2010, 75% of the gain is tax-free.)

The Build Back Better Act would deny wealthier investors this tax break. Under the bill, the exclusion from gross income generally wouldn’t be allowed for gains from the sale or exchange of qualified small business stock after September 13, 2021, if your modified AGI is $400,000 or more. There would be one exception, though. The new rule wouldn’t apply to any sale or exchange made pursuant to a written binding contract that was in effect on September 13, 2021, and not modified in any material respect after that date.

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Curbing Mega-IRAs, Backdoor Roths and Other Retirement Savings for the Rich

picture of three eggs with IRA, Roth and 401k written on thempicture of three eggs with IRA, Roth and 401k written on them

If enacted, the Build Back Better package would curb a wealth person’s ability to stuff money in tax-advantage retirement savings accounts in a few ways. First, beginning in 2029, a new limit on IRA contributions would kick in if the total value of your IRA and defined contribution plans (e.g., 401(k), 403(b), and 457 plans) hits $10 million and your modified AGI exceeds:

  • $400,000 for single filers;
  • $425,000 for head-of-household filers; or
  • $450,000 for joint filers.

A new “required minimum distribution” (RMD) rule would be put in place for mega-IRAs and 401(k) plans starting in 2029, too. Under the proposal, a retirement plan distribution would be required if the combined total of your IRAs and defined contribution plans reached $10 million and your income exceeded the applicable threshold listed above ($400,000, $425,000, or $450,000). Generally, the distribution would equal 50% of the retirement savings over $10 million, but larger distributions could be required if savings surpass $20 million.

The Build Back Better plan would also restrict Roth conversions for wealthier Americans. First, beginning in 2022, it would put a stop to “backdoor” Roth IRA conversions. This popular tactic allows wealthier people avoid the Roth IRA contribution limits by making nondeductible contributions to a traditional IRA and then transferring those contributions to a Roth IRA later. However, under the proposed legislation, you won’t be able to convert after-tax contributions in an IRA or qualified retirement plan to a Roth account, regardless of your income. Then, starting in 2032, the proposed plan would eliminate all Roth conversions if your income exceeded the applicable threshold provided above ($400,000, $425,000, or $450,000).

6 of 14

Modifying the SALT Deduction Cap

picture of a salt shaker on its side with salt spilling out of itpicture of a salt shaker on its side with salt spilling out of it

Here’s a proposed change that goes against the grain – rolling back the state and local tax (SALT) deduction limit. It’s odd because the change would, for the most part, provide a tax cut for wealthy people.

The 2017 tax reform law placed a temporary $10,000 cap on the itemized deduction for state and local taxes until 2026. By limiting the deduction, the cap tends to increase taxes paid by wealthier people, who typically pay more state and local taxes and tend to itemize instead of claiming the standard deduction. Under the Build Back Better Act, the cap would be extended through 2031. It would also be increased from $10,000 to $80,000 for 2021 to 2030 (it would go back down to $10,000 for 2031).

7 of 14

Extending the Earned Income Tax Credit Enhancements

picture of dishwasher working in a restaurantpicture of dishwasher working in a restaurant

The Build Back Better plan doesn’t just focus on rich people. Jumping to the other end of the income spectrum, the enhancements made to the 2021 earned income tax credit (EITC) that benefit childless workers would be extended for one more year under the plan. The EITC is only available to low- to middle-income workers and families, and the enhancements that would stretch into 2022 were part of the American Rescue Plan, which was enacted in March 2021.

In a nutshell, the EITC improvements for workers with no qualifying children that would be extended to 2022 include:

  • Lowering the minimum age from 25 to 19 (except for certain full-time students);
  • Eliminating the maximum age limit (65), so older people without qualifying children can also claim the credit;
  • Increasing the maximum credit from $543 to $1,502 for the 2021 tax year (the maximum would be adjusted for inflation for the 2022 tax year); and
  • Expanding eligibility rules for former foster youth and homeless youth.

You would also be allowed to base your 2022 EITC on your 2021 income (instead of your 2022 income) if that would increase your credit amount. That’s similar to the rules applicable to the 2020 and 2021 EITC that permitted use of a person’s 2019 income to calculate the credit. This would help people who are laid off, furloughed, or otherwise experienced a loss of income in 2022.

8 of 14

Extending Child Tax Credit Enhancements and Monthly Payments

picture of truck driver with his familypicture of truck driver with his family

President Biden also wants to extend enhancements to another popular tax credit for American families – the child tax credit. That would mean monthly advance payments in 2022, too. The credit would also be made fully refundable on a permanent basis. It’s fully refundable for 2021, but normally only up to $1,400-per-child is refundable, and you must have at least $2,500 of earned income. (With refundable credits, the IRS will send you a refund check if the credit is worth more than your income tax liability.) The president wants to repeal the requirement that each qualifying child have a Social Security number, too.

The American Rescue Plan pushed the amount of the child tax credit for the 2021 tax year from $2,000 to $3,000-per-child for most kids – and to $3,600 for children 5 years old and younger. Those higher credit amounts would continue through 2022 under the president’s plan. However, as with the 2021 credit, the extra $1,000 or $1,600 for 2022 would be phased-out for families with higher incomes. For people filing their tax return as a single person, the additional amount would be reduced if their AGI is above $75,000. The phase-out would start at $112,500 of AGI for head-of-household filers and $150,000 of AGI for married couples filing a joint return. The 2022 credit amount would be reduced further using the pre-2021 phase-out rules if AGI exceeds $400,000 on joint tax returns or $200,000 on single and head-of-household returns. Your 2021 AGI (rather than your 2022 income) would be used for phase-out rule purposes if you so elected.

Under the Biden plan, monthly child tax credit payments during 2022 would max out at $250-per-month for each child between six and 17 years of age, and $300-per-month for each child five years old or younger. However, unlike payments in 2021, monthly payments generally wouldn’t be sent to families in 2022 if their AGI exceeds $75,000 (single filers), $112,500 (head-of-household filers), or $150,000 (joint filers).

With regard to the “safe harbor” rules that let lower-income families keep any excess advance payments, the president’s plan calls for an exception if a child is taken into account for purposes of the advance payments through fraud or the intentional disregard of rules and regulations. The safe harbor amount would also increase from $2,000 to $3,000 ($3,600 for a child five years old or younger).

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Extending Premium Tax Credit Enhancements

picture of doctor taking a cash paymentpicture of doctor taking a cash payment

The American Rescue Plan made temporary improvements to the premiums tax credit, too. This credit helps people pay premiums for health insurance purchased through an Obamacare exchange (e.g., HealthCare.gov). The current Build Back Better Act aims to extend the current enhancements from one to four years.

Provisions that are up for extension under the plan would:

  • Lower the percentage of annual income that eligible Americans must contribute toward their premium (extend through 2025);
  • Permit people with an income above 400% of the federal poverty line to claim the credit (extend through 2025); and
  • Disregard household income exceeding 150% of the federal poverty line for people receiving unemployment benefits (extend through 2022; income exceeding 133% of the federal poverty line is disregarded for the 2021 tax year).

There are new enhancements for the 2022 to 2025 tax years in the president’s plan, too. For instance, there are various provisions in the plan that would temporarily modifies certain eligibility rules and requirements to help lower-income people qualify for the credit. The president also wants to lower the threshold used to determine whether a taxpayer has access to affordable insurance through an employer-sponsored plan or a qualified small employer health reimbursement arrangement. Under Biden’s plan, an employee’s required contribution with respect to such a plan or arrangement couldn’t exceeds 8.5% of his or her household income from 2022 to 2025 (instead of 9.5%). Other provisions would exclude certain lump-sum Social Security benefit payments and the modified AGI of certain dependents 23 years old or younger from the calculation of household income.

In a related move, the Build Back Better plan would also make the health coverage tax credit permanent (the credit currently doesn’t apply after 2021). This credit is only available if you’re (1) eligible for Trade Adjustment Assistance allowances because of a qualifying job loss, or (2) between 55 and 64 years of age with a defined-benefit pension plans that was taken over by the Pension Benefit Guaranty Corporation. The Biden plan would also increase the amount of the credit from 72.5% to 80% of the amount paid for qualified health insurance coverage.

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Adding Tax Breaks for Education

picture of small, paper graduation cap sitting on moneypicture of small, paper graduation cap sitting on money

College students would get a few additional tax breaks under President Biden’s plan. First, it would exclude federal Pell grants from gross income.

In addition, tuition and related expenses wouldn’t be reduced by the amount of any Pell grant for purposes of calculating the American Opportunity Credit or the Lifetime Learning Credit.

And, finally, students convicted of a state or felony drug offense would be allowed to claim the American Opportunity Credit. These changes would apply beginning in 2022.

11 of 14

Adding or Improving Tax Breaks for Clean Energy and Energy Efficiency

picture of solar panels on the roof of a housepicture of solar panels on the roof of a house

One of the main goals of the president’s Build Back Better plan is to address climate change. This clearly shows up in the many tax provisions in the plan designed to encourage clean energy and energy efficiency. For instance, the credit for nonbusiness energy property added to your home would be extended through 2031 (it’s currently set to expire at the end of this year). In addition, the credit amount would jump from 10% to 30% of the cost of installing qualified energy efficiency improvements, the $500 lifetime cap would be replaced by a $1,200 annual credit limit, a $600-per-item limit would be placed on credits for qualified energy property, the credit would apply to the costs of home energy audits, and more.

The credit for residential energy efficiency property would also be extended under the current Build Back Better Act – this time through 2033 (it’s current set to expire after 2023).This credit applies to the cost of solar, wind, geothermal or fuel cell technology used to generate power in your home. The president’s plan would extend the credit to cover battery storage technology. The full 30% credit would also apply through the end of 2031, then the credit would drop to 26% in 2032 and 22% in 2033. It would also be made refundable beginning in 2024.

Other green energy or conservation tax proposals that would help individuals (as opposed to businesses) include:

  • Excluding water conservation, storm water management, and wastewater management subsidies provided by public utilities, state or local governments, or storm water management providers from gross income;
  • Creating a 30% tax credit for qualified wildfire mitigation expenditures;
  • Establishing a tax credit of up to $12,500 (but not more than the cost of the car) for the purchase of a new plug-in electric motor vehicle;
  • Creating a tax credit of up to $4,000 (but not more than the cost of the car) for the purchase of a used plug-in electric motor vehicle;
  • Extending the tax credit for the purchase of a qualified fuel cell motor vehicle through 2031, but only with respect to vehicles not subject to depreciation;
  • Reinstating the exclusion from gross income for bicycle commuting benefits (they are currently suspended until 2026), and increasing the maximum benefit from $20 to $81 per month (based on 2021 inflation adjusted amounts); and
  • Establishing a tax credit of up to $900 for the purchase of an electric bicycle.

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Adding Deductions for Union Dues and Work Uniforms

picture of nurses in uniformpicture of nurses in uniform

Workers would get two temporary above-the-line deductions if the Build Back Better Act is signed into law. The first would be for up to $250 of union dues. This deduction would be available from 2022 to 2025.

The second deduction would be for up to $250 uniforms or other work clothes that are required as a condition of employment and not suitable for everyday wear. This write-off would be available from 2022 to 2024.

13 of 14

Subjecting Cryptocurrency and Other Assets to Wash Sale Rules

picture of a bitcoin smashing through a dollar billpicture of a bitcoin smashing through a dollar bill

People investing in commodities, currencies, and digital assets such as cryptocurrency would be subject to the “wash sale” rule if the Build Back Better Act becomes law. Currently, trading in those types of assets isn’t covered by the rule.

Basically, the rule states that you can’t deduct a loss from the sale or other disposition of stock or securities if you buy the same asset within 30 days before or after you sell it. Fortunately, though, if a deduction is denied because of the rule, the loss is added to the cost basis of the newly purchased stock. So, when you sell the new stock later, the tax on any gains will be lower.

14 of 14

Extending Time for Same-Sex Couples to File Amended Tax Returns

picture of same-sex couple working on taxespicture of same-sex couple working on taxes

In 2013, the IRS began allowing same-sex couples who were legally married under state law to file joint tax returns. The tax agency also allowed same sex-couples to amend their tax returns to change their filing status to married filing jointly if they were married before 2013. However, they were generally only allowed to file amended returns going back to 2010.

Under the Build Back Better Act, same-sex couples who were lawfully married prior to 2010 would be able to change their filing status on pre-2010 returns if they were married during the tax year at issue. This would enable many couples, who were legally married as far back as 2004, to claim or increase credits, deductions, and other tax breaks that were not fully available to them on previous tax returns because they couldn’t file a joint return.

Source: kiplinger.com

Comparing Indeed vs Craigslist for Employers

Do you need to fill a job opening? Are you looking to hire a qualified applicant with a minimum of hassles?

In that case, you’ve no doubt considered using a popular jobs board like Indeed or Craigslist. But what’s the difference between the two? Which one would be best for what you need?

A third website that competes with them is ZipRecruiter, which can post a job opening to up to 100 job boards at the same time. If neither Indeed nor Craigslist has exactly what you need, ZipRecruiter might be a better choice to find qualified candidates for your job vacancy.

As for Indeed and Craigslist, there are key differences between them. In this guide, we’ll do a side-by-side comparison between these two platforms — how they work, what they cost and what kind of job seekers they’re aimed at.

What Is Indeed?

Launched in 2004, Indeed is a free job board that also offers paid, premium options to make life easier for job seekers and employers alike.

Because it’s free, employers gain access to a diverse candidate pool that’s brimming with talent. And job seekers don’t have to pay to apply for jobs, upload their resume to Indeed’s database, or create job alerts for roles they’re interested in.

For employers, the free features of Indeed take the risk out of testing the waters of the talent pool. But its premium features, such as sponsored postings and a subscription to Indeed’s resume database, are what really make Indeed useful for employers.

Other top features of Indeed’s job board include company pages, support for third-party applicant-tracking systems and Instant Match, a tool that matches candidate resumes to your job ads.

What is Craigslist?

Founded in 1995, Craigslist is best known for being a classified-ads marketplace where people can find nearly anything — furniture, rooms to rent, missed connections and even legal help.

But a major portion of Craigslist’s business is as one of the top job search sites where job seekers can find part-time work, manual labor, side gigs and more.

How Indeed Works for Employers

Employers can post a basic job opening for free on Indeed, making it an ideal platform for hiring managers who are operating on a budget. But as great as the free option is, that also means the competition is stiff to get your job postings seen. How many other employers are competing for the eyes of qualified candidates?

Indeed’s solution to that problem is a paid job post. For as little as a few bucks a day, employers can post sponsored jobs and make sure the job postings get in front of the most applicants who are job searching. When you pay for a post, you can invite people to apply for your job after finding resume matches.

Other free solutions for employers include adding screener questions and the ability to message and virtually interview candidates. It’s not possible to repost jobs from other websites onto Indeed.

Indeed also simplifies the screening process by grouping qualified applicants to the top of a dashboard, automatically declining applicants and helping to schedule interviews all within their website.

How Craigslist Works for Employers

Craigslist Jobs is a cost-effective solution for employers looking to fill jobs. There are no subscriptions required, just a flat fee for each job posting. You don’t even need to create an account to post jobs if you don’t want to.

Craigslist job postings are strictly a no-frills experience, though. You go without flashy features like resume searches or the ability to manage applicants. Job listings won’t be syndicated to 100 other job boards like with ZipRecruiter, either. But if a hiring manager knows exactly what they’re looking for, they can upload new job openings to the Craigslist job boards in a matter of minutes.

Employers looking to hire via Craigslist job postings can get an unlimited number of emails from potential candidates. On the downside, you won’t be able to search through any sort of resume database to find qualified local candidates.

Indeed vs. Craigslist: What They Cost

Indeed starts out free. There’s no charge for posting a help-wanted ad on the site.

If you want to post jobs and attract more eyeballs to your job posting, though, it costs. Indeed has a pay-per-click model where pricing is based on user engagement with job posts. The total cost is based on the budget you set and the amount of time you choose to advertise the job.

Also, 30 resume views per month costs $100, while 100 resume views per month costs $250.

As for Craigslist, it’s by far the cheapest option for employers looking to speed up their hiring process. A 30-day job posting costs between $10 and $75, depending on the location. Individual listings can’t be swapped out for new ones — instead, employers will need to create a new posting, but they can post as many jobs as they want at any given time. All you need to do is pay with your credit card for a new listing.

Indeed vs. Craigslist: the Bottom Line

When it comes to comparing job boards, it’s important to know what you’re looking for before you make a decision on where to start.

A Craigslist job search is no-frills. Applying to a Craigslist job is similar to how people acquire things from other Craigslist posts — job searching users need to email or call the poster and hope to hear back from them. There isn’t a way to track applications or answer screening questions to make yourself stand out.

Side gigs, part-time and manual labor tend to have more options in a Craigslist job search, while job boards like Indeed or ZipRecruiter are better known for full-time positions.

If you’re a job seeker starting a job search, think about what kind of job you’re looking for. Are you looking for a side gig, or something that doesn’t require a university degree? Craigslist can be a good solution for you to land a job quickly.

Employers on a small budget will also benefit from Craigslist’s affordable job board. For as little as $10 each, you can post as many jobs as they want — but you’ll have to do a lot more leg work when it comes to sorting through unqualified applicants and manually handling the entire hiring process.

Now, with the ability to simply syndicate job postings, create sponsored jobs, boost team collaboration and take advantage of the job site’s artificial intelligence, there’s a reason why ZipRecruiter has been named the No. 1 website for employers’ hiring needs. It has a nearly perfect rating on TrustPilot, taking it to the top spot above all the other job boards.

As for people who are job searching and hoping to get plenty of resume views on their job search, ZipRecruiter has thousands of potential employers and millions of jobs to search through. And with the recruiting process made simple for a potential employer, it then makes it easier for job seekers to make it through the job search process.

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Source: thepennyhoarder.com

25 Ideas on How to Lower Electric Bill

Lastly, poor insulation can be a huge drain on energy efficiency. If you have major cracks in your window frames, walls, baseboards, and more, you are basically watching your hard-earned dollars fall through those gaps. Likewise, if doors are left open (especially the garage door or patio door) haphazardly you are bleeding cold or warm air (depending on the season) through those areas, causing your home heating or cooling to work harder, thus costing you more money on your electric bill.
Most electric bills are tabulated by multiplying the rate you pay per kilowatt of energy by the total hours of device and electricity usage that month. This gives you your total electric usage in kWh — kilowatts per hour. From this formula, we can see that electric bills are based on how many hours of electricity you use each month.
Colorado-based writer Kristin Jenny focuses on lifestyle and wellness. She is a regular contributor to The Penny Hoarder.
According to the DOE, lowering the temp to 120 degrees is perfectly fine for the majority of the population. If you or a member of your household has a chronic respiratory disease or a suppressed immune system, though, it may be best to keep your water heater set to the default temp.
To reduce your electric bill, take stock of how many hours of electricity you use a day (some things like water heaters and refrigerators will always be running, and that’s ok) for things like the dishwasher, washer and dryer, floor lamps, and accessories such as stereo equipment.

25 Ways to Reduce Your Electric Bill

This dreary news is coupled with the prediction that it may be a colder winter in many parts of the country, too.

1. Get a Free Home Energy Assessment

When the heat is high, don’t let any precious warm or cool air escape due to drafty doors and leaky windows. Seal these money-draining spaces with inexpensive draft tape, often ranging from to on popular sites like Amazon.

2. Seal Cracks and Leaks Is How to Lower Electric Bill

When you leave for work or go to sleep, turn down the thermostat. At night you can add a few more blankets to the bed or even turn up the eclectic blanket, and if you’re at work, you won’t know the difference. Turning down the thermostat by 10 degrees can save you 10% on your bill over a year.

3. Upgrade to Efficient Equipment With a Rebate

Layering your clothes is the original way to save money on your winter electric bill and lower your thermostat a few degrees. If your clothes budget is already stretched, websites like ThredUp or heading over to your local Goodwill are excellent ways to get gently used but extremely warm clothing for just a few bucks a piece.

4. If You Have a Smart Thermostat, Use It

Some electric companies charge higher rates during the day (aka peak hours) and lower rates in the evening (aka off-peak hours). It can help save a few bucks here and there to run larger appliances like dishwashers, clothing dryers, and washing means while you’re getting some shut-eye.

5. Take a Timeout on Energy Consumption

Many power providers offer free home energy assessments or home energy optimization kits. Xcel Energy, which serves much of the northern midwest and mountain regions of the U.S., provides a free virtual visit with a Home Energy Squad member, followed by a free kit to optimize your residential electrical usage.

A toddler watches his sibling play out in the snow from the window.
Getty Images

6. Let Mother Nature Do the Work

Then, begin to see where you can limit the amount of time those home furnishings are in use. This will slowly but surely start to reduce your home electric bill.

7. Invest in One-Time Duct Cleaning

How much more? The federal government is saying we could see spikes of 54% in our heating bills compared to last year.

8. Change Your Air Filter

Any item in your house that has pipes behind it (toilets, sinks, etc.) likely is simply sitting in an open hole in the wall with no insulation. This means that in the winter warm air could be leaking out or cold air could be seeping in. Consulting with a professional to learn more about how adding insulation behind toilets and sinks can help make your home more energy efficient by eliminating these air leaks across your house.

9. Run Appliances at Night

Using the aptly named draft stopper on your doors can further prevent air leaks throughout your home. For only , you can keep prized warm air better circulating in your space without losing it to wasteful door leaks. Another painless way to save money.

10. Make the Move to LED

No, not that kind of timeout. To cheaply lower your electric bill, consider adding an outlet timer to window unit heaters. These helpful gadgets cost to and will make your home more energy efficient and limit the amount of “phantom power” (the power your devices leech from outlets even when not turned on) contributing to monthly energy bills. Or, turn down the thermostat and head to the mall or library for a few hours.

11. Replace Window Screens for Home Efficiency

Exhaust fans are those that are generally already built into your home, like the kind above a stove or shower. These fans do an exceptionally good job at circulating air and removing moisture and humidity from that air. Running these fans even when not cooking or in the shower can improve air circulation and decrease the need to crank up the heat and your power usage.

12. Insulate Hidden Areas

Speaking of fans, turn ceiling fan blades so that they rotate clockwise in the winter so that warm air is pulled upward and distributed throughout the room. If you’ve done the rotation change correctly, you should not feel any air if you stand underneath them.

13. Close the Door

While we all want a toasty home to return to after a long day, spending money heating rooms like a basement, garage, attic, or closed-in porch is a major drain on your winter electric bill. Rooms such as those tend to not be insulated with walls instead made from concrete or wood slats. With no insulation to hold in the heat, you’re essentially wasting your money trying to warm them up. Best to bundle up when in those rooms or close them off entirely during colder months.

14. Reduce Phantom Power

Air filters do just that — filter out tiny particles and debris generally undetectable to the human eye. This provides us with clean air circulating in our homes. However, these filters need to be changed about every six months in order to work properly. Clogged filters inhibit effective air flow and can lead to higher energy costs due to forcing your air systems to work harder to pump out air.

15. Add an Energy Efficient Power Strip

Some sneakier money-eaters on your electric bill are incandescent bulbs, hair dryers, and space heaters. A hair dryer consumes about 1,200 watts per hour of usage and costs 12 cents an hour to operate while a fridge generally only consumes 1,000 watts and costs 10 cents an hour to run. While you may not be using a hair dryer for an hour, you can see how daily use of such an accessory could add up.

16. Lower Hot Water Heater Temperature

For those who already have a Nest or other programmable thermostat in your home, take the time to program it. Smart thermostats offer zonal and timed heating and cooling, which on average will save most homeowners 10-12% on their heating bills and up to 15% on their cooling bills.
It’s going to cost more to heat your home this winter, thanks to global price hikes for natural gas, heating oil and other fuels.

17. Decrease Door Drafts With a Draft Stopper

If you live in a multiroom home, closing the doors to unused rooms will consolidate your heating usage to fewer rooms, and it will keep that room much warmer. Pick a room or two to hang out in for the majority of the day, and shut the doors to the others to naturally create zonal heating. A painless way to lower your electric bill.

18. Use Exhaust Fans

A major cause of ineffective or inefficient home cooling may be from clogged ductwork. Over the years, debris like dust, pet hair, and dander can accumulate in vents and make it difficult for air to flow smoothly throughout your space. Cleaner ducts = less need to turn up the heat. Fortunately, HVAC system maintenance is pretty affordable, and a one-time vent cleaning will only take 0-0 out of your home maintenance budget.
When the sun is shining, make sure that you have your blinds and curtains open to let the warmth in. Close them at night as an extra layer of insulation against the cold.

19. Go Through a Checklist

Owning or renting a home comes with all sorts of maintenance. It can be hard to keep track of what to do at what time of year in order to keep your space clean and efficient. Referring to a home checklist like this one can ensure you are ticking off the correct boxes to prepare your home for warmer months, potentially saving you some dough on electric bills throughout the winter and then next summer.

20. Rearrange Your Furniture

As we already mentioned, leveraging Mother Nature when possible to decrease your bill and your energy consumption is a great idea. In this case, replacing snared, ripped window screens with relatively inexpensive new ones can help to better insulate your windows, preventing any unwanted major cracks or gashes from emitting cold air into your home.

A woman wears multiple layers of clothes in her home.
Getty Images

21. Bundle Up

There can be many reasons as to why your electric bill is so high. One major reason could be that you leave all your appliances and furnishings plugged in all the time. This is called “phantom energy costs” or “vampire energy costs,” meaning that even when a device is not directly in use, if it is plugged in it is still using a bit of energy. There may be things that can be unplugged like computers or entertainment systems.

22. Don’t Heat Uninsulated Rooms

Incandescent bulbs release about 90% of their energy as heat. Couple that with the fact that they generally are not energy efficient and it’s enough to make the case to switch to LED bulbs. LED bulbs can save consumers as much as per month and they give off little-to-no heat.

23. Insulate Your Water Heater

We answer some of the most asked questions about electric bills and what makes them so high.

24. Use Your Kitchen

But there are some ways to keep your energy bill in check this winter (and in the summer, too), and much of that has to do with maintenance.

25. Turn Down the Thermostat

Cooking and baking at home naturally warms up the kitchen and then adjacent rooms. You can save money, too, by cooking at home rather than getting take out or going out. After you’re done using the oven and it’s turned off, you can leave the door ajar just a bit to let that dwindling heat escape. Make sure to keep children out of the area if you do this and never use an operating oven as a heat source by leaving the door wide open.

Frequently Asked Questions (FAQs) About Electric Bills

Go through the house and check to make sure that you don’t have beds, dressers, bookcases or other furniture blocking heating vents. If the vents are blocked and heat isn’t evenly distributed, this may cause you to turn up the thermostat.

How Do I Reduce My Electric Bill?

The most costly items on an electric bill are the culprits you probably already guessed: air conditioning, heating, and large home appliances come in at the top of the list. This is why it makes it all the more important that your home is energy efficient with updated models of each home appliance.
Source: thepennyhoarder.com
Although upgrading heating systems and thermostats can be pricey, many electrical companies offer rebate programs. ConEd, which serves New York City, offers rebates on smart thermostats. So does California. Check with your energy provider to see if rebates are offered in your area. This could mean more than 0 back in your pocket

Why Is My Electric Bill So High?

Another reason could be that your home is not energy efficient. If appliances such as dishwashers are decades old, it’s likely that those models are no longer the most energy or water-efficient on the market. Although no one wants to purchase a brand-new major appliance, this can save you money in the long run.
This is where a free home inspection by your local utility company may come in handy, if such a service is offered. Energy experts can let you know if your appliances are up-to-date from an energy standpoint as well as what other surprising items in your home may be contributing to an overly high electric bill.
The default temperature for water heaters is 140 degrees, which wastes between and a year, according to the Department of Energy.

What Costs the Most on My Electric Bill?

Even if something like a lamp or TV are not turned on, the fact that they remain plugged in means those items could be leeching “phantom power” from your home, and jacking up your electric bill. Phantom power refers to the electricity consumed by objects when they are off or in standby mode. This allows them to quickly turn on, but means your electric bill pays the price. Consider unplugging lamps, appliances, and more when not in use to save on your next energy payment.
Insulating your water heater can save you about 7-16% in water heating costs and eliminate standby heat losses by 25-45%. It’s pretty easy to DIY — order a water heater jacket like this one for from Amazon, or check with your local utility company to see if they offer jackets for free or with a rebate.
That’s a big jump and something that many of us will struggle to afford. For people lucky enough to use electricity for their heating systems, it’s predicted that their bills will only go up about 6%. Still, that’s money that you could use elsewhere.
While you’re unplugging unused objects, think about adding in an energy efficient power strip to cut down on your bill. Some estimate that installing energy efficient power strips (which are only to each) can decrease home power use from 20 to 48%, which translates to more than just a few dollars back in your pocket.
From bundling up to not heating uninsulated rooms to simple maintenance checks and fixes, these two dozen plus one ways to avoid sticker shock from your electric bill are worth your efforts.

What Will Cause the Next Housing Crash?

I think I finally know what’s going to cause the next major financial collapse. Crypto. Ignore the fact that the word “cry” is part of the word.

For the record, I don’t have anything against crypto, I just believe it’s a classic case of something climbing too high, too fast.

Don’t believe me? Look at silly meme coins like Doge and Shiba Inu coin, which rallied because Elon Musk recently acquired a Shiba Inu puppy.

Over time, the crypto industry could resemble something like the Internet, but similar to the Internet, growing pains will accompany its upward trajectory.

And because more and more investors are piling into cryptocurrencies, it’s just a matter of time before it all comes crashing down. The question is will it take housing with it?

Staples Center Becomes Crypto.com Arena

In the latest piece of ominous news, the long-named Staples Center will become known as Crypto.com Arena in a 20-year deal.

Apparently, Crypto.com shelled out more than $700 million for the naming rights, which makes it one of the most expensive deals in sports history.

The arena’s new logo will debut on Christmas day when the Los Angeles Lakers host the Brooklyn Nets.

And all of Staples Center signage is expected to be replaced with the new brand by around June 2022.

When I saw the news, it just kind of hit me that this whole crypto thing is getting out of control. Even my wife shared the news, and the tone was decidedly dubious.

There’s just something that smells off about the whole thing, even if the company is perfectly sound and a long-term winner.

If you remember the dot-com era, the toys.com, the pets.com, and so on, you might be feeling similar vibes today.

As noted, this doesn’t mean the whole idea is wrong or destined to fail, it’s just that a major correction will probably take place.

But what’s interesting is the concentration of investment in crypto, which is also probably super leveraged, has the ability to take down the entire financial system.

This could mean that crypto inadvertently stops the housing market bull run in its tracks, even if housing is otherwise sound.

Risks to the Housing Market

I started compiling a list of risks to the housing market a few months ago because I expect things to cool off in a couple years.

While I don’t think real estate is going down anytime soon, I do believe it will at least begin to face resistance in late 2023 and more so in 2024.

As I wrote yesterday, investors are still super bullish on real estate so chances are everyday Joes will also be buying for some time.

But if and when that takes a turn, we could see home prices flatten and eventually fall.

The crypto piece is definitely interesting, and before this Staples Center name change a friend told me another interesting trend.

He’s a real estate photographer who keeps a close eye on who’s buying real estate in Southern California.

I forget all the different “phases” of buyers he mentioned, but I believe there were the regular folk, the Instagram/YouTube and all-around influencer people, and the latest the crypto investors.

So the individuals buying the expensive homes of late are the crypto winners. That gave me pause knowing how fickle this nascent industry can be.

Other than a hypothetical crypto bust, I see these other potential risks:

  • Forbearance ending (COVID-related job losses)
  • Single-family home investors selling all at once
  • A spike in mortgage rates
  • Eventual overbuilding (zoning changes and pent up building)
  • Climate change
  • Contentious presidential election

There are plenty of potential dangers lurking in the housing market’s path, and it could be a combination that leads to the next housing crash.

As I’ve said before, I see the next housing crash happening around 2024, or at least beginning around that time.

Sprinkle in a U.S. presidential election that is likely to be a real barn burner, and well, it starts to make a lot of sense.

Why is doesn’t happen earlier might be a celebratory year related to us getting through COVID, hopefully.

How Bad Will the Next Housing Crash Be?

While I do see another financial collapse on the horizon, it may not actually be that bad. And housing could actually hold up pretty well.

If you look back at the dot-com bubble, Bay Area home prices fell about 10% after the technology stock market rout.

Of course, the pullback was pretty short-lived and eventually home prices were back on their merry way in 2002 and beyond.

Back then, it wasn’t housing’s fault, and this next time around that could be true as well.

While home prices are a lot more expensive than they were just a few years ago, or heck even last year, the housing market still mostly makes sense.

There is a short supply of homes available that exceeds demand. And mortgage rates are super low, which drives prices up but keeps mortgage payments affordable for buyers.

Sure, home buyers don’t want to spend this much on a house, but most can afford it and weather any storm that comes along.

Back in 2008, this wasn’t the case, which explained the massive real estate market collapse.

In other words, if you’re sitting back waiting for that next big opportunity, you might be disappointed.

Home prices will probably come down at some point relatively soon, but the discount might not be worth the wait.

Source: thetruthaboutmortgage.com

How to Write a Rent Increase Letter To Your Tenants

Follow this process to notify your tenant of an upcoming rent increase.

Increasing rent each year is a common practice for many property managers. And when the time comes, you need to write a rent increase letter to tenants informing them of the change.

Many states have rental laws that stipulate how much you can raise a tenant’s rent, when you can increase rent and how and when you’re required to notify tenants that their rent is going up. Standardizing this process will help you apply rent increases consistently and equitably for all your tenants.

Not sure how to write a rent increase letter? Here’s an overview of what the letter should include, how to send it and when to deliver the notice to your tenant.

Reasons to raise a tenant’s rent

If you’re planning to raise rent sometime soon, you’re not alone. Over the past year, rent prices have crept up about 20 percent nationwide, according to ApartmentGuide. The reason is that there are fewer rental properties available and a large number of renters are looking for affordable properties. Keeping up with the local real estate market is one reason property owners increase rent each year.

You might also raise the rent if there’s a rise in property taxes, insurance, homeowners association fees or utility prices. Another reason is if you made significant upgrades or repairs to the home. Increasing rent can help cover some of these expenses.

You can’t increase rent for retaliatory or discriminatory reasons, however. The federal Fair Housing Act prohibits discrimination in housing based on race, religion, color, national origin, family status, sex or disability. Raising rent based on how many children a family has could violate this law, for example. Many states prohibit rent increases solely because you had a negative interaction with the renter.

Man working on a calculator

Man working on a calculator

How much can I raise the rent?

In October 2021, rent for a one-bedroom apartment averaged $1,660 nationally and $1,964 for a two-bedroom. The average rent increase is usually 3 percent to 5 percent a year. If rent is $1,660 a month, an increase would be $49 to $83.

In most cases, property owners can technically increase the rent as much as they want, but only by a reasonable amount. Raising rent too much could turn off a great tenant, and it will likely cost more to have the apartment sitting vacant.

When deciding how much to increase a tenant’s rent, it’s best to start with your local landlord-tenant laws. Some states or municipalities may cap rent increases or not allow rent to exceed a certain amount, especially if the property is rent-controlled.

When is the best time to increase the rent?

Property managers can’t raise the rent on a whim or in the middle of a lease term. When a tenant signs a lease, they agree to a specific rent amount for a certain timeframe. Some leases specify how rent increases work and how much rent will go up. Rent increases should occur once the lease term ends, which is usually every 12 months.

You can propose a rent increase ahead of a lease ending with it going into effect once the term expires — however, the tenant doesn’t have to agree to it. The renter can choose not to renew the lease with higher rent and move out. If they stay in the home after the lease expires, you have the right to go through the eviction process.

When to send a rent increase letter

You must provide tenants with written notice before raising the rent. State laws specify the timeframe for when you should send the notice, but it’s usually 30 days before a lease term ends or when the increase will take effect. Then, give renters time to respond to the notice — if they agree to the rent increase and will renew their lease or they’re not renewing and plan to move out.

Woman putting. a letter into an envelope

Woman putting. a letter into an envelope

How to write a rent increase letter to tenants

A rent increase letter serves two purposes. It notifies tenants that their rent is going up and is official documentation that you notified them of the increase within the required timeframe.

When writing a rent increase letter, keep the tone professional but friendly — and be clear and direct. Make sure your letter includes these elements:

  • Name of the tenant
  • Property address
  • Name and contact information for the property manager (or property owner)
  • Date of the letter
  • Date the rent increase will go into effect
  • Amount of the rent increase
  • Amount of the current rent
  • Date first new rent payment will be due
  • Mention the current lease agreement’s expiration date
  • Include a timeframe for when the tenant must notify you that they’re not renewing their lease

Sample rent increase letter to tenants

Here’s a rent increase letter template that you can use to notify your tenants. Simply update anything in brackets. You can also download a PDF or word document of this file.

[Property manager or owner name]
[Address]
[City, state, ZIP Code]
[Phone number and email address]

[Date of notice]

[Tenant’s name]
[Property address]
[City, state, ZIP Code]

Dear [Tenant’s name],

This notice is to inform you that beginning [date the rent will increase], the monthly rent that you pay to occupy the unit at [property address] will increase if you choose to renew your lease. Your current lease expires on [date of lease expiration].

The current monthly rent is [amount of current rent] and your new rent amount will be [amount of new rent]. The first payment at the new monthly rent amount will be due [include date payment is due].

Please let us know if you agree to this increase. Check one of the boxes below and sign and return this notice to the address provided by [date to return the notice]:

I agree to the rent increase of [amount of new rent] effective [date the rent will increase]. Please send me a lease renewal.

I do not agree to the rent increase and will vacate the unit by [date to move out], as specified in the lease agreement.

Please let us know if you have any questions about this notice.

Sincerely,

[Property owner/manager’s name]
[Property owner/manager’s signature]
[Tenant’s signature]

How to deliver the rent increase letter

Check with your local laws to see if you’re required to deliver a rent increase notice via a certain method. You can hand-deliver the notice by leaving it on the tenant’s front door.

If you mail the rent increase letter, send it certified mail, which provides confirmation that the tenant received it. Email is another option. Just make sure you include a read receipt to ensure they received the message.

Play by the rules

Increasing rent is a standard part of running a rental property. You just need to make sure you’re following all state and local laws regarding how much and when you can raise rent and how to notify tenants.

When you list the property with Rent.com, you can collect rent online, as well as accept applications and screen tenants.

Source: rent.com