A few short weeks are left for Congress — or, perhaps, President Joe Biden — to take action and lift the debt ceiling before tick, tick, tick … boom goes the economy.
The so-called “X-date” — when the federal government can no longer meet its legal obligations — could be as early as June 1, according to a May 1 letter from U.S. Treasury Secretary Janet Yellen to Congress. Yellen reiterated the same sentiments in another letter to Congress on May 15.
“If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests,” Yellen wrote in the most recent letter. She warned of “catastrophe” in a May 11 news conference.
The Congressional Budget Office released its own projections on May 12, which left more wiggle room: somewhere in the first two weeks of June. The report also said the U.S. Treasury’s cash and extraordinary measures would be sufficient to fund the government until June 15.
While negotiations between the parties continue, we all wait to see if the federal government runs out of money to pay its bills and defaults. What comes next isn’t pretty.
A range of problems
If the default lasts for weeks or more, rather than days, it could trigger a fire-and-brimstone, Armageddon-level financial crisis for the U.S. and global economies.
A report from the White House Council of Economic Advisors in October 2021 warned of the possible effects of the U.S. defaulting, which include a worldwide recession, worldwide frozen credit markets, plunging stock markets and mass worldwide layoffs. The real gross domestic product, or GDP, could also fall to levels not seen since the Great Recession.
The U.S. has defaulted only once, in 1979, and it was an unintentional snafu — the result of a technical check-processing glitch that delayed payments to certain U.S. Treasury bondholders. The whole affair affected a few investors and was remedied within weeks.
But the 1979 default was not intentional. And from the point of view of the global markets, there’s a world of difference between a short-lived administrative snag and a full-blown default as a result of Congress failing to raise the debt limit.
A default could happen in two stages. First, payments to Social Security recipients and federal employees might be delayed. Next, the federal government would be unable to service its debt or pay interest to its bondholders. U.S. debt is sold as bonds and securities to private investors, corporations or other governments. Just the threat of default would cause market upheaval: A big drop in demand for U.S. debt as its credit rating is downgraded and sold, followed by a spike in interest rates. The U.S. would need to promise higher interest payments to justify the increased risk of buying and holding its debt.
Here’s what else you can expect if the U.S. defaults on its debt.
A sell-off of U.S. debt
A default could provoke a sell-off in debt issued by the U.S., considered among the safest and most stable securities in the world. Such a sell-off of U.S. Treasurys would have far-reaching repercussions.
Money market funds could see volatility
Money market funds are low-risk, liquid mutual funds that invest in short-term, high-credit quality debt, such as U.S. Treasury bills. Conservative investors use these funds as they typically shield against volatility and are less susceptible to changes in interest rates.
However, in the past, money market funds made up of U.S. Treasurys have seen increased volatility when the U.S. ran up against debt ceiling limits and signaled potential government default. Yields on shorter-term T-bills go up because they are impacted more compared with longer-term bonds, which gives investors more time for markets to calm down.
(Note that money market funds aren’t the same as money market deposit accounts, which are a type of federally insured savings account offered by financial institutions.)
Federal benefits would be suspended
In the event of a default, federal benefits would be delayed or suspended entirely. Those include: Social Security; Medicare and Medicaid; Supplemental Nutrition Assistance Program, or SNAP, benefits; housing assistance; and assistance for veterans.
Although a default wouldn’t affect Medicare and Medicaid recipients directly, delays in payments to providers could make them reluctant to treat Medicare and Medicaid patients.
Stock markets would roil
A default would likely trigger a downgrade of the U.S. credit rating — the S&P downgraded the nation’s credit rating only once before, in 2011, after a last-minute debt ceiling deal was reached. A credit downgrade happens when an international credit rating agency, like Standard & Poor’s, determines the country’s risk of defaulting on sovereign bonds has increased relative to other peer nations or an average, said Andrew Hanson, assistant professor of economics at the University of Tennessee, Knoxville, via email.
A default combined with the downgraded credit rating would in turn cause the markets to tank, the White House’s Council of Economic Advisors said in 2021.
If current debt ceiling talks continue for too long, the markets are likely to become more volatile. When markets are volatile, there is a risk of a run on banks — where deposit customers withdraw money because of fear their bank could collapse — in an already uncertain banking environment. If an institution isn’t able to meet the increased need for withdrawals, it could fail.
Interest rates would increase for loans
As debt ceiling negotiations linger, Americans could see rates increase on established lending products with variable loans, including personal and small-business lines of credit, credit cards and certain student loans. Issuers may also decrease existing credit lines.
Credit lenders may have less capital to lend or may tighten their standards, which would make it more difficult to get new credit.
Depending on the timing of a default and how long the effects are felt, rates could increase on new fixed auto loans, federal or private student loans and personal or small-business loans.
Credit card rates could rise
Americans could see rates increase on credit cards beyond what they’ve seen since the Fed began hiking rates in 2022. Credit cards already have higher interest rates than many other loans, so carrying a balance during these economic times is more expensive. Those with debt who are in a position to pay it off should start making moves to do so.
It’s also not uncommon for lenders to cut credit limits, close accounts or require higher credit scores for approval when the economy is in distress. Lenders took these actions during the Great Recession and early in the COVID-19 pandemic, according to a 2022 report by the Consumer Financial Protection Bureau.
Mortgage rates would likely increase
The real estate website Zillow projects that following the U.S. defaulting on its debts, mortgage rates could rise as much as two percentage points by September before declining. With that, we’d see a massive contraction of the housing market.
A debt ceiling crisis won’t impact those with fixed-rate mortgages or fixed-rate home equity loans. But adjustable-rate mortgage, or ARM, holders may feel these rising rates. Those in the fixed period of their ARM could see rates rise when reaching their first adjustment. Anyone struggling to keep up with payments is encouraged to reach out to their lender early to discuss their options. A HUD-certified housing counselor can help homeowners explore alternatives to delinquency and foreclosure.
If the prime rate (the baseline rate that lenders use to set interest rates for lines of credit) increases, borrowers with variable-rate home equity lines of credit, or HELOCs, will also see their rate climb.
Tax refunds could be delayed
If the debt ceiling isn’t raised, it could take more time for tax filers to receive their refunds — which usually come within 21 days of e-filing. If the government defaults, those who file late run a risk of a delayed refund.
Even the threat of a default can lead to a downgrade of the U.S. credit rating, but it won’t necessarily happen.
“Given the Treasury and FOMC’s commitment to honoring extant Treasuries, the chance of a U.S. credit downgrade has historically been very slim,” Hanson said.
Even if default is avoided, the uncertainty created by brinkmanship on the debt limit has “serious economic costs,” Yellen warned at a press conference in Japan on May 11.
“We could see a rise in interest rates drive up payments on mortgages, auto loans and credit cards,” Yellen said. “We are already seeing spikes in interest rates for debt due around the date that the debt limit may bind.”
Hanson said a default could make it more difficult to finance future spending with debt since fewer people would be willing to hold U.S. Treasuries rather than other sovereign bonds that have a higher credit rating. And also because yields on Treasury bonds would increase in an effort to incentivize investors to buy, at a cost to the Treasury.
NerdWallet writers Kate Ashford, Margarette Burnette, Taylor Getler, Jaime Hanson, Craig Joseph, Melissa Lambarena and Kurt Woock contributed to this article.
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Frugal green living is important for everyone because environmental issues affect all of us, not just the people who can afford to be eco-conscious.
Plus the concept of frugal green means you are saving money! And that is always helpful.
This is why I created this blog, to help people save money, find financial freedom, and have choices in life.
Reducing your carbon footprint is one of the greatest gifts you can give to yourself and the planet.
But how do you save money while also making a difference? It’s possible!
This is why choosing to be frugal green is so important!
These are all frugal ways that I have personally done or heard of other people doing as well. They are tried-and-true methods of living a more frugal life, and I hope that you will find them helpful. Plus help the environment at the same time.
This is a win-win situation.
Have you ever wondered how to be environmentally friendly?
Do you want to save money and the environment at the same time?
This article has 91+ frugal green living tips that will help! Let me know which ones are your favorites!
How to save money and be frugal green?
There are many ways to be frugal green and save money while helping the environment.
Plus in the long run living green costs less.
We will cover ideas for your kitchen, car, shopping and so much more. There are many other ways to be frugal green, so find what works best for you and make a difference!
These are ways to live more sustainably while saving money.
Importance of Sustainability and the Environment
You can save money and help the environment without making any major changes to your lifestyle.
Some easy ways to do this include, but are not limited to, changing your habits at home, buying used instead of new, and being more conscious about how you use energy.
Every day you can make the decision to choose to be a thrifty person.
Top 10 Best Frugal Green Living Tips
In order to save money and be more environmentally friendly, try some of these tips:
1. Reduce your use of plastics. This means bringing your own bags to the grocery store, refusing straws when you order drinks, and not using disposable utensils or plates.
2. Make Recycling a Priority. Recycling is important, and everyone should do their part to make it a part of their everyday routine. It’s not just for plastics and paper- there are many different things that can be recycled. By taking small steps like bringing a reusable coffee mug, we can all make a big difference in the long run.
3. Ride a bike or walk instead of driving. Not only is this better for the environment, but it’s also a great way to get some exercise.
4. Do the “green thing” and buy things secondhand! When you’re considering your lifestyle choices, buying things secondhand is a great way to do the “green thing.” You can save money and help reduce the amount of waste that goes into landfills.
5. Only buy what you need. Many times we buy things out of convenience or wants. Truly evaluate whether the purchase is necessary or if you can save money by buying used.
6. Compost as much as possible. Not only does this help reduce waste, but it also helps create nutrient-rich soil for plants.
7. Consider your carbon footprint. Americans use a tremendous amount of resources and impact the planet in many ways. We consume a lot of energy, materials, and water. Our lifestyles have a big environmental impact. There are many ways to be frugal and environmentally conscious, including recycling and reducing food waste.
8. Cut Out Paper and Plastic Waste. One way to be more frugal and green is to reduce the amount of paper and plastic waste you produce. Technology has greatly improved in many ways to cut down on plastic and paper consumption, so take advantage.
9. Think Before You Throw Away and Buy New. We are way too quick to toss things and replace them without even thinking. Next time before you throw it into the landfill, think about how you can reuse, repurpose, or give away the item.
10. Upcycle. The concept of upcycling has gained popularity in the past years. It is a simple way of taking something ugly and worn down, putting some TLC into it, and making it into something beautiful.
Related Reading: Top 10 Influential Frugal Living Tips with a Big Impact
Being frugal and being environmentally conscious may not always go hand in hand.
In some cases, you may have to make a choice between buying an eco-friendly item that is more expensive or sticking with a cheaper, non-sustainable option.
However, many of the aims of frugal families link to eco-friendly living.
Below are simple sustainable products to consider buying instead of their wasteful counterpart.
Reusable food bags are a great way to reduce your environmental impact while also saving money.
There are a variety of different types of food grade eco-friendly bags on the market today. They are made of safe, eco-friendly materials that will not harm the environment and they are lead-free, chloride-free, and BPA free.
Bamboo straws are a great eco-friendly alternative to plastic straws.
They are compostable, meaning they will never pollute the environment or harm animals. Bamboo straws are odorless and tasteless, so you can use them with any drink. Reusable bamboo straws make a great addition to your everyday kitchen supplies.
These dish cloths are also super absorbent and work better than microfiber cloths and paper towels for cleaning.
They are made from cellulose, which is a soft material that is gentle on your hands. They can be used for a variety of tasks, such as dishwashing, wiping down counters, and polishing furniture. And they are durable enough to be reused multiple times.
A reusable K-cup is a great way to reduce your environmental impact while enjoying your favorite cup of joe.
Works perfectly in our house! Not only do they help you save money in the long run, but they also allow you to customize your coffee experience like never before. Plus, using a reusable k-cup is an easy way to reduce waste and help preserve our planet.
Frugal Green in the Kitchen & Table
There are a number of ways to save money and be frugal green in your kitchen.
Use a Reusable Coffee Mug. So simple and easy to do. Pick your favorite up here.
Skip plastic straws. This is a simple thing to do for the environment. Buy reusable straws. And don’t forget the cleaning brush (hint… the cleaning brush will save you from throwing away your reusable straws.)
Skip the Paper Plates and Plastic Utensils. You will be shocked to see the waste this creates. Invest in quality dishes you like and don’t be afraid to wash them up.
Invest in a Water Filter. If you’re looking for ways to improve your diet and save money, consider investing in a water filter. We upgraded to an under-the-sink mount water filter and it was the BEST choice ever! This is the exact one we bought.
Cook at Home. Making your own meals can save you a lot of money in the long run. You’ll be surprised at how much money you can save by cooking simple meals yourself.
Grow a Kitchen Garden. One way to reduce your food costs is to grow some of your own fruits and vegetables. You can start with a kitchen garden, which is a small plot of land near your house where you can plant fruits, vegetables, and herbs. if you don’t have space, check out these Aerogardens.
Stop Using Plastic Wrap. To reduce your reliance on plastic wrap is to invest in some beeswax food wraps. These work just as well as plastic wrap, but because they’re made of natural materials, you can reuse them over and over again!
Air dry dishes. This is because air-drying dishes use less energy than running a dishwasher and takes up less time.
Stick With Instant Pot. When you’re cooking, try to use a microwave or pressure cooker instead of your oven. Ovens produce a lot of heat and use up a lot of energy, so using these other appliances will help conserve resources. This is the Instant Pot/Air Fryer Combo I love (and use ALL.THE.TIME)!
Frugal Green Cooking & Menu Plan
This may not seem as environmentally conscious as other areas, however, it will help your wallet more.
Buy produce at the local market. Fruits and vegetables tend to be cheaper at the market than they are at the grocery store, so this is a great way to save some cash while also doing your part for the environment. Plus you save on the costs of trucking in the produce and support local.
Join a CSA. These community-supported agricultures have become popular ways for consumers to buy local and seasonal food directly from the farm. You normally have a dollar amount buy-in or a certain number of hours worked for food.
Enjoy Organic Foods. Organic foods may be worth the extra cost – organic food has a higher nutritional value than conventional food, plus it’s better for the environment because it doesn’t require pesticides or chemical fertilizers.
Go Meatless. Americans, on average, eat twice the recommended amount of meat. Meat production is one of the leading causes of greenhouse gas emissions and climate change. Consider your carbon footprint when making dietary decisions.
Shop Grocery Weekly Ads. Start by looking out for food sales at the grocery store. This can help you save money while also being more mindful of the environmental impact your food choices have.
Meal Plan. One great way to save money on groceries is to plan your meals ahead of time. This allows you to be more strategic in your shopping and can help you avoid buying items that you don’t need.
Use Leftovers. When you’re cooking a meal, always cook a little more than you need. This way, you’ll have leftovers that can be used to make another meal or stored in a glass jar for later use.
Pantry Challenge Time! One way to save money on your groceries is to consider doing a pantry cleanse. This means eating all the foods in your pantry that are sitting there. Then, only buy groceries that you know you’ll use. This can help you avoid overspending and wasting food.
Skip Pre-Made or Boxed Mixes. Making your own is a more affordable option, as pre-made or boxed mixes can be expensive. There are many recipes online that are healthy and affordable, and by planning ahead you can save time and money.
Shop the Perimeter of the Grocery Store. A lot of people want to save money and be more environmentally friendly, but don’t know where to start. One way to do both is to try to stick to the perimeter of the grocery store. This means avoiding the center aisles, where most processed foods and extra packaging are found.
Buy Generic Brands. Generic brands are less expensive than their name-brand counterparts. This is because generic brands do not have the same marketing and advertising costs as name-brand products. Many times the quality is the same or better!
Key Frugal Green Ideas While Shopping
These are environmentally friendly ways to improve your shopping habits. Many people may call this frugal minimalism.
Donate First. It’s easy to just dispose of something when it’s no longer needed, but sometimes that thing could be reused or recycled. For example, if you have an old TV that isn’t being used, try selling it or donating it before throwing it away. There are a lot of people who might need your old TV, and you can get some money for it if you sell it.
Buy Refurbished. On the other hand, if you’re in the market for a new TV, think about buying one that is refurbished instead of buying a brand-new one. Refurbished electronics often come with the same warranty as new ones and cost way less than buying a brand-new model.
Try Fixing First. Just because something is broken doesn’t mean you have to throw it away! Many times, things can be fixed very easily and cheaply. If your electronic device is leaking toxic chemicals, however, you should definitely not try to fix it yourself–take it to a professional recycler instead.
Reuse your own grocery bags. This will save both money and the environment, as disposable grocery bags often end up in landfills. Also, many stores are now charging for grocery bags, so save a few bucks at the store.
Do not buy new books. You can borrow books from the library or from friends, or you can buy them used. Buying new books wastes resources, and it’s often cheaper to buy them used.
Use the Library. The library has a wealth of books, movies, and music that you can borrow for free. Plus you can find access to tons of digital resources as well.
Shop Second-Hand Stores for your needs. These are great places to find clothes, furniture, and other household items at a fraction of the price.
Stop buying the paper version of the newspaper. Instead, get the daily news online for free. Not only will you save a few bucks each month, but you’ll also help reduce deforestation.
Shop at Sustainable Businesses. Thankfully, many companies focus on being sustainable businesses by making changes from production, to packing to shipping. As a whole, the industry could do better to create less waste. One sustainable company is the Everyone Store.
Think Twice on Gifts. Really consider what someone would want for a gift. Too many times we opt for quick and cheap gifts that are materialistic in nature and never be used. So, consider some of these money gift ideas instead.
Frugal Green Cleaning Products that Are Eco Friendly
You may not be environmentally aware of the hazards of using most cleaning products. In fact, you should check your normal cleaning products with EWG’s database and their standards.
DIY Baking Soda & Vinegar. Using green cleaning products is usually more expensive than traditional ones. Baking soda and vinegar are easy-to-find, cost-effective alternatives to environmentally unfriendly cleaners.
Use Microfiber Cloths. Personally, this is my favorite way to cut the expansive (and not-good-for-you) cleaning products. These microfiber cloths are just as effective at cleaning and will save you money in the long run.
Skip the Disposable Rags. Use up-cycled rags from old clothes to pick up spills.
Stop Using Air Fresheners. Reduce or eliminate the use of air fresheners, which release harmful chemicals into the air. Plus they are super costly!
Frugal Green & Energy Use in the Laundry Room
Use Detergent Powder. Washing your clothes in a washing powder uses less water than liquid tabs, which come in more plastic packaging. Also, the powder is a much better environmental solution and better for your body. This is the detergent powder we use and love (and those I recommended it to love it as well)!
Sniff Test. Implement the sniff test and only wash clothes when they fail the sniff test. Beware of this recommendation with teenagers!
Line Dry Clothes. Additionally, line drying clothes throughout the year can save a ton on your energy bill! Plus your clothes do not wear as quickly.
Watch Your Hot, Wash in Cold. One easy way to save money on your household bills is to reduce the amount of hot water you use. Heating water takes up a large percentage of the energy used in households, so by washing your clothes in cold water, you can cut down on your energy usage significantly.
Frugal Green in the Bathroom & Morning Routine
Use Less Shampoo or Soap. In order to save money on your grocery bill, you can use less shampoo than is recommended. If everyone did this, it would result in significant monetary and plastic savings.
Turn the water off while brushing your teeth. It is important to turn the tap off while brushing teeth in order to conserve water. Many people forget to do this, and as a result, millions of gallons of water are wasted every year.
If it’s yellow, let it mellow. If the toilet water is yellow, it’s ok to let it mellow. You don’t have to flush to turn it off every time. Thanks to auto-flush toilets in most places this is very common for people to forget to flush at home.
Take Cooler Showers. This may not be everyone’s favorite. But take a cool shower rather than a piping hot shower. Most of the energy used is the hot water heater warming up the water.
Use Every Last Drop! There are a few ways to get the most out of your products and conserve them- one way is to leave bottles upside down for a couple of hours after you’ve used them so that you can get the last bit of product out. You can also roll up toothpaste tubes to get the remaining paste out. Here is a great product to help you squeeze every expensive ounce out.
Related Reading: Billionaire Morning Routine: How To Achieve Success In Life
Green Lot with Frugal Green Landscaping
Xeroscape Your Lawn. Lawns are often seen as a status symbol, but they’re actually quite expensive and environmentally damaging. They require large amounts of water, fertilizer, and pesticides to maintain, which can leach into the groundwater and pollute the environment.
Change Mowing Schedule. Additionally, lawn mowing emits greenhouse gases that contribute to climate change.
Water Less Often. While this sounds great in theory, you may not be able to fully switch to xeriscaping your yard. If you can’t switch, then check out this Rachio to lessen your dependence on water.
Frugal Green Home Ownership
There are many ways to save money and be more environmentally conscious at the same time when owning a home.
Your home is probably one of your biggest expenses, so it’s important to take measures to conserve energy and save money. Plus there are many ways to reduce the amount of energy your home consumes!
Home Improvement Math. When considering whether or not to make an improvement to your home in order to reduce your carbon footprint, always do the math to see if the improvement will actually pay for itself. Sometimes it will and sometimes it won’t so be sure to weigh all of the options before making a decision.
Downsize Your Home. If you live in a large house, consider moving into a smaller one. This will help you save on your energy bill and make your home more efficient.
Install low-flow fixtures. One way is to install low-flow fixtures, such as showerheads and faucets. This will reduce your energy use and, in turn, your monthly bills. You can also save water by taking shorter showers.
Hang UV Blocking Curtains. By stopping the sun from heating up your house with curtains during the day, you can save on cooling costs in the summer. Using UV blocking curtains is something we did and notice a significant difference in the summer and winter.
Run Appliances with Full Loads Only. Wait until you have a full load of dishes or laundry before running the dishwasher or washing machine. You would be surprised at the amount of energy and water it takes to run those appliances.
Be Reasonable with Air Conditioning Temperature. In the summer, don’t crank up the air conditioning to save on your energy bill. You can also set your thermostat a couple of degrees higher in the summer to save money. Also, you may want to start cooling your house earlier in the day to prevent your AC unit from working overtime and consuming more energy.
Program Your Winter Heating Temperature. In the UK, A/C is not as common as it is in other countries. Central heating is used more often and is set to a lower room temperature for the summer and a higher room temperature for the winter. This is because people want to save on their energy bills.
Open Windows to Cool House. When the weather is nice, open your windows to allow for natural cooling. This is a simple and cheap way to cool your house. Especially after a nice cool thunderstorm.
Buy Energy Efficient Appliances. Energy-efficient models might be more expensive in the short term, but they will save you money in the long run and help reduce your environmental impact. However, these products should only be bought when the older model is worn out–don’t replace something just because it’s energy-efficient!
Replace Windows. On the one hand, it’s a great idea to replace your windows with more energy-efficient models if you’re staying in your home for many years. However, if you plan on moving within a few years, it might not be worth the investment. You’ll need to weigh the cost of the windows against how much money you’ll save on your monthly energy bill.
Get a programmable thermostat. Programmable thermostats are a great way to save money on your energy bill. You can set them to turn off or down when you’re not at home, or during times of the day when you don’t need as much heating or cooling.
Look for Energy Leakage. The typical older home has enough energy leakage that it’s the equivalent of leaving your front door open all year long. You can combat this by installing weather stripping and caulking around doors and windows and adding insulation to your attic. Most utility companies offer an energy audit.
Weatherize your Home. Weatherizing your home is a great way to improve energy efficiency and save money on your energy bills. There are many things you can do this and varies on the area of the world you live in.
Sustainable Frugal Green Transportation
Ditch the Car Completely. One of the biggest expenses for many people is their car. Whether you’re paying for car payments, insurance, gas, or maintenance, it can be a lot of money. You can eliminate this expense by ditching the keys and taking public transportation. Not only will you save money on your monthly expenses, but you’ll also help the environment!
Buy Hybrid Cars. Hybrids cars are expensive but they could help you save money on fuel in the long run – hybrids tend to have lower emissions than conventional cars. So, it might be time to say bye to that beater car.
Drive Less and Play Your Route. Driving less is the biggest way to reduce fuel-guzzling trips. Take it a step further with UPS research on their strategic delivery methods and focus on making only right-hand turns.
Carpool Whenever Possible. carpooling is a much more green choice than driving alone.
Look Into Car Sharing. When you only need a car occasionally, or for short trips, it might be more convenient and affordable to use a car-sharing service. Car-sharing services offer the opportunity to have access to wheels when you need them, and they’re flexible and convenient for short trips.
Invest in Electric Scooter. This mode of transportation is the uber-popular. You don’t need cash for gas, money for registration fees, and completely reliable to get around quickly. Check out the best electric scooters on the market.
Ride a Bike. A commuter bike is much cheaper than a car. Plus you get the added benefits of exercise and no carbon waste. Or upgrade to an E-bike.
Telecommute. If you can do your work remotely, then telecommute more often than not. This will save on transportation costs as well as pollution.
Walk More Often. Plan your day around being able to walk places that take under 30 minutes to get there. Then, it is better to walk than drive. Plus you can hit your 10000 steps quicker. It is a triple for the win – health benefits, free exercise, and fresh air!
Don’t Run Your Engine Unnecessarily. Leaving your engine running unnecessarily while stationary can waste fuel and cause environmental damage. Make sure to turn your engine off when you’re not moving to save money and help the planet!
Drive More Efficient. When it comes to saving fuel, one of the best ways is to drive more slowly and efficiently. This will help you save petrol or diesel and reduce your carbon footprint. For example, slowly put your foot on the accelerate to maintain a speed.
Frugal Green Budgeting Per Month
Choose To Save Rather Than Spend. Every tie you actively choose to save your money rather than spend it. You help the environmental impact. We have plenty of popular money saving challenges to help you save more money today.
Pay Bills Online. When you pay bills online, you can save a lot of time, space, and money. You can also save paper by paying your bills online–instead of receiving paper statements in the mail, you can access them online.
Find Free Things to Do. This one is a win-win for frugality environmentalism. Focus on finding activities from this list of things to do with no money. Many of them are already frugal green wins.
Opt for Paperless. And finally, if you pay your bills online, you may automatically receive discounts on some of your monthly bills! Many companies now charge a $2-5 paper statement to be mailed.
Focus on Financial Independence. This may seem like a crazy idea, but it is true. The more you save, the faster you reach financial independence. In fact, this is with the Frugalwoods decided to be frugal in the first place.
Follow Simple Frugal Living Green Ideas – Way to Go Green
Reduce, reuse, recycle. This old mantra is more important than ever in today’s world. By recycling everything you can, you can help conserve resources and keep waste out of landfills.
Your Mindset is Everything. Just like with anything, if you decide to commit yourselves to become environmentally aware, then you are likely to succeed. You don’t have to become extremely frugal overnight. You just have to remember that mindset is everything in this process.
Turn off electronics when not in use. This includes televisions, computers, and other appliances. By turning them off, you’re conserving energy (and saving money). Plus some older appliances might be fire hazards if left plugged in.
Stop Junk Mail. One way to reduce the amount of junk mail you receive is to go through your postal mail and ask to be removed from lists you’re not interested in. This can be done by contacting the Direct Marketing Association (DMA) or specific companies that send you unsolicited mail.
Grab a Sweatershirt or Blanket when Cold. Instead of automatically adjusting the programmable thermostat higher, you can also save by wearing a sweater or using a blanket. Maybe turn on the fireplace before putting the heating on.
Invest in Renewable Energy. In today’s world, it is more important than ever to invest in renewable energy. There are many reasons for this:
First and foremost, using renewable energy helps to reduce our dependence on fossil fuels, which are finite and contribute to climate change.
Renewable energy also creates jobs and supports local businesses.
And finally, investing in renewables reduces our greenhouse gas emissions, helping to fight climate change.
In the long run, renewable energy can save you money and reduce emissions by providing power more reliably, often more cheaply than a traditional power source.
Are You Ready Live Life Frugal Green?
Living a more frugal lifestyle is good for the environment because it costs less.
It doesn’t take much to make small changes in your life that will have a big impact on the planet. For example, consume less and you’ll be doing the most earth-friendly thing you can do.
There are dozens of ways to save money and be more environmentally conscious which we covered in this post.
Being frugal and being green often go hand in hand.
However, most people lose steam after just a couple of weeks. So, do not attempt to do each frugal green living habit.
Pick your top 3 with the biggest impact.
Add one another 1-3 frugal living tips every month or so.
Over time, you will be surprised to see how easy it is to live frugal green, while also helping you to save money while also protecting the environment.
You can be the frugal green girl or gal with a few of these simple habits. Or choose to follow a frugal blog or frugal forum.
Know someone else that needs this, too? Then, please share!!
If you’re in the market for a conventional or Department of Veterans Affairs (VA) home loan and come from a military background, a USAA mortgage can be your best option.
This mortgage lender also offers home loans for first-time homebuyers with low down payment requirements. However, you won’t be able to get approved for a USAA mortgage if you don’t qualify for membership or want an FHA or USDA loan.
USAA overview
United Services Automobile Association (USAA) started in 1922 as an automobile insurance company for military officers. Over the decades, the organization has expanded its product offerings to include mortgages, consumer loans, banking accounts and various types of insurance.
Current members of the U.S. Armed Forces, veterans and their immediate families are eligible for USAA membership. It’s possible to apply for conventional, VA and jumbo loans to buy a house or refinance an existing mortgage.
Your mortgage options include:
Conventional: Fixed-rate purchase, low down payment purchase, rate-and-term refinance and cash-out refinance
Jumbo: Conventional purchase, VA purchase and VA jumbo IRRRL
Currently, Mr. Cooper (formerly Nationstar) services all USAA Bank mortgages, and you can mail a payment to the USAA headquarters by mail or schedule payments online or by phone.
Find the right VA loan: Best VA mortgage lenders
How to qualify for a USAA mortgage
If you’re not a USAA member yet, you’ll need to apply for membership. Membership is open to U.S. military members, veterans, their spouses and children of USAA members.
Some of the initial borrower requirements include:
Credit score of 620 or above for all loans.
Debt-to-income (DTI) ratio of 50% (lower for conventional loans). It’s variable for VA-backed loans.
Two years of tax returns.
Pay stubs for the last 30 days.
W-2 forms for the past two years.
Bank and investment account statements.
You will also need to present your Certificate of Eligibility (COE) if you’re applying for a VA-backed home loan.
The minimum loan amount is $50,000 on all products and up to $3 million with a jumbo loan.
Additional requirements may apply for a specific loan program. For example, you may need to complete a free online course for the low down payment conventional purchase loan.
How to apply for a USAA mortgage
You can apply online anytime or by calling a loan officer during the week. Depending on your circumstances, you may need to call to start the application process.
The first step is getting mortgage preapproval. USAA will do a hard pull of your credit report in order to provide a rate quote. You should also have your desired purchase price and down payment amount in mind to estimate your loan-to-value (LTV) ratio.
After comparing your loan options, you will apply to confirm your eligibility and finalize your interest rate, term and loan APR.
Many loan programs require a property appraisal to complete the application process. The VA IRRRL loans most likely won’t need an appraisal.
The average duration for the underwriting process is from 30 to 45 days on purchase and refinance loans.
Compare the average rates: Current mortgage rates
How to pay your USAA mortgage online
You can schedule one-time payments and enroll in autopay through your USAA account. You can also watch how-to videos on coordinating payments and linking your accounts at USAA’s payment support site.
Pros of a USAA mortgage
Low down payment loan options.
Positive customer service ratings.
Can apply online or by phone.
Specializes in VA home loans.
Cons of a USAA mortgage
No FHA, USDA or home equity loans.
Must contact the lender to estimate rates and fees.
Strict membership requirements.
No phone support on weekends.
USAA perks and special features
Here are some of the best aspects of getting a mortgage through USAA.
Savings and discounts
The lender doesn’t offer interest rate discounts or other incentive programs to reduce your closing costs. Like other banks, you can purchase discount points or potentially roll your lender fees into the loan which may be of benefit. Additionally, all loans have a fixed interest rate.
As many USAA members are eligible for VA loans, they can avoid common mortgage fees including private mortgage insurance (PMI). These loans also have low down payment requirements compared to a conventional loan. The lender usually won’t charge origination fees on VA purchase loans or refinances, but a one-time funding fee and origination fee (up to 1% or a maximum of $1,295) for conventional purchase and refinance loans applies.
As USAA also offers homeowners insurance and auto insurance, you might receive a 10% discount on your home insurance premium by bundling these products. However, you should compare rates and coverage from several insurance providers to find your best option.
First-time homebuyer loan
While you cannot apply for FHA loans through USAA, the lender offers first-time homebuyer loans that require a down payment of 5% or less. You’re eligible for this 30-year conventional loan when you haven’t owned a home in the past three years, but you might be required to complete an online education course to qualify.
You may also consider this loan type if you’re not eligible for a VA home purchase loan.
Easy to apply
Borrowers can apply for a mortgage online or by phone and receive hands-on help. After getting approved, you can continue to work with USAA if you start to struggle with affording your mortgage payment. You can call the mortgage assistance department (1-855-430-8489) to review your repayment options.
How USAA could improve
There are several downsides that may hinder you from getting a USAA mortgage.
Provide additional loan options
While the conventional, VA and jumbo mortgage options will suit many borrowers, not having access to FHA loans, USDA loans or adjustable-rate mortgages (ARM) can make it harder to compare your loan options.
USAA also doesn’t offer home equity loans which are a second mortgage that prevents refinancing your existing mortgage balance. To tap your equity through USAA, you must apply for a conventional or VA cash-out refinance which replaces your existing rate and term along with having higher closing costs as the loan balance is bigger.
Offer weekend phone support
While the USAA mortgage team receives consistently high marks for customer service, you can only call its loan officers on weekdays and there are no physical branches.
Other mortgage lenders might be better if you anticipate completing the application steps over the weekend. However, you can start and monitor the application process online 24/7.
Have less restrictive membership requirements
You must have military experience or be an immediate relative of a USAA member to join and apply for financing.
USAA customer service and reviews
You can speak with a USAA loan officer by phone Monday through Friday from 7 a.m. to 8 p.m. CT. Keep in mind, however, that phone support isn’t available on the weekends.
The lender has 171 mortgage-related complaints in the Consumer Financial Protection Bureau (CFPB) Consumer Complaint Database. This number is relatively low and borrowers primarily mention challenges with scheduling payments. Some also report troubles advancing through the application process without delays.
This institution has negative Better Business Bureau (BBB) and Trustpilot ratings but mainly focus on its banking and insurance products.
USAA mortgage alternatives: USAA vs. Navy Federal vs. Chase
USAA is an excellent lender for VA and conventional loans but doesn’t offer as many specialty programs. As a result, you may consider one of these two alternatives which offer more loan types with low down payment requirements or the ability to borrow from your home equity.
Navy Federal Credit Union has similar membership requirements as USAA Bank and caters to the military community. Borrowers ineligible for VA loans may consider the Homebuyers Choice or Military Choice loan programs that require no down payment or private mortgage insurance. This lender also offers home equity loans and lines of credit (HELOC).
If you don’t come from a military background or want to work with a brick-and-mortar national bank, Chase Bank is an excellent option. Its mortgage options include conventional, FHA, VA and jumbo loans. Home equity products are available too and the lender offers relationship discounts for qualified borrowers.
Frequently asked questions (FAQs)
USAA uses Mr. Cooper (formerly Nationstar) to service its mortgages although you can schedule payments through your USAA member dashboard or by contacting USAA.
No, USAA only offers conventional, VA and jumbo home purchase loans as well as mortgage refinancing.
A minimum 620 credit score is necessary for conventional and VA home loans. Other factors also apply including your DTI ratio, current income, employment history and down payment requirements.
Yes, you can get pre-approved for a USAA mortgage online or by phone after agreeing to a hard credit check and submitting the necessary initial documents such as proof of income, bank statements and recent tax returns.
One popular way people pay off debt is to use the equity in their homes. Home equity loans and home equity lines of credit (HELOCs) let borrowers use their homes as collateral in exchange for financing. Just be sure to factor in the risks if you’re considering this option. The lender can seize your home if you can’t make the payments.
Who this is best for: Borrowers who have built up equity in their homes.
Who this is not good for: Those unsure of their ability to maintain the monthly payments.
Home equity loan versus debt consolidation loan: Home equity loans and HELOCs may offer lower rates than debt consolidation loans, though they come with more risks, since your home is used as collateral.
Debt relief services
Debt relief services, including debt settlement companies, offer another way to deal with your debt if you can’t qualify for a consolidation loan. These companies reach out to creditors and debt collectors on your behalf and try to settle the debt for a lesser amount.
If you decide to pursue debt relief services (perhaps as an alternative to bankruptcy), be aware that the fees these companies charge can be steep. Take your time to fully research fees, reviews and other details before applying. It’s also wise to compare multiple debt relief companies before you commit.
Who this is best for: Borrowers who are experiencing financial hardship and cannot pay their debt.
Who this is not good for: Those with a thin credit history or less-than-stellar credit score.
Debt relief services versus debt consolidation loan: Unlike debt consolidation loans, debt relief services aim to eliminate some of your debt without you having to pay it. With that said, pursuing debt relief is a risky move, and it can damage your credit score.
Credit counseling
Another option that can help you get debt under control is credit counseling. Credit counseling companies are often (though not always) nonprofit organizations. In addition to debt counseling, these companies may offer a service known as a debt management plan, or DMP.
With a DMP, you make a single payment to a credit counseling company, which then divides that payment among your creditors. The company negotiates lower interest rates and fees on your behalf to lower your monthly debt obligation and help you pay the debts off faster.
DMPs are rarely free, though, even if they’re done by a nonprofit credit counseling service. You may have to pay a setup fee of $30 to $50, plus a monthly fee (often $20 to $75) to the credit counseling company for managing your DMP over a three- to five-year term.
Who this is best for: Borrowers who need help structuring their debt payments.
Who this is not good for: Those with little wiggle room in the budget.
Credit counseling versus debt consolidation loan:With a debt consolidation loan, you’re in control of your payoff plan, and you can often apply with few fees. With credit counseling, a third party manages your payments while charging setup fees.
Balance transfer credit card
With a balance transfer card, you shift your credit card debt to a new credit card with a 0 percent introductory rate. The goal with a balance transfer card is to pay off the balance before the introductory rate expires so that you save money on interest. When you calculate potential savings, make sure you factor in balance transfer fees.
Keep in mind that paying off existing credit card debt with a balance transfer to another credit card isn’t likely to lower your credit utilization ratio like a debt consolidation loan would.
A debt consolidation loan is also going to offer higher borrowing limits, enabling you to pay off more debt, as well as fixed monthly payments, which make it easier to budget and stay disciplined with paying off debt.
Who this is best for: Borrowers who can pay off existing debt quickly.
Who this is not good for: People with a young credit history or a less-than-average score.
Balance transfer credit card versus debt consolidation loan: Balance transfer cards are often the best choice for borrowers who have the means to pay off their debt within 18 months, which is a standard 0 percent APR period. If you need longer to pay off your debt, or if you have a lot of debt, a debt consolidation loan is a better choice.
Save more, spend smarter, and make your money go further
If you dream of having a baller bank account and the freedom to kick back without a financial worry in the world, it’s possible to hack your spending habits until you’re sitting on a comfy cushion of cash. And since studies show most of us can adopt new, long-lasting behaviors after just three weeks, you could be well on your way to a richer life by the end of the month.
Let go of any worries about your bank account balance, and start living your best life today. We challenge you to take the next 21 days to establish new spending habits! Which of these money-saving ideas will YOU commit to?
WEEK 1 – Establish a Baseline
Start the 21-Day Challenge by figuring out where you stand financially and which expenses you can temporarily trim without shocking your system.
Identify what’s dragging you down
Take a good look at last month’s expenses to get an idea of how much you spent and what you bought. Budgeting apps like Mint can help you by importing and categorizing your electronic transactions in minutes, making it easy to spot areas where you’re overspending.
Identify Unnecessary Expenses: Keep an eye out for businesses you regularly spend small sums of money with and put them on a blacklist. Keep that list on your phone or in your wallet.
Don’t Tempt Fate: Avoid temptation by not carrying cash or taking a different route to work.
Buy needs, not wants
It’s no secret that the best way to save money is to cut out impulse shopping, and only buy absolute necessities.
Feast Affordably: Go food shopping once a week and stick to the list you brought with you. Eat breakfast at home, pack your lunch for work and prepare dinner in your own oven.
Pass on Premium Products: From clothing to electronics to the type of gas you put in your tank, skip the top-shelf items in favor of their more-affordable alternatives.
Use what you’ve got
Another great way to cut expenses is to be resourceful about what you’ve got lying around the house. You don’t need to start making your own soap like you’re the newest member of Fight Club, but you’ve likely got some stuff you could be putting to good use.
Expand Your Recipe Repertoire: Make homemade meals using sites like MyFridgeFood.com that let you to plug in the ingredients you have before telling you what recipes you’re equipped to cook.
Pay in Other Ways: Don’t eat out anywhere without a coupon or gift card.
Enjoy Entertainment You Own: Skip the theater this week and dust off an old DVD instead. Or start reading a new book if it’s been a while since you cracked one open.
WEEK 2 – Cut Off Some Companies
Making a few quick phone calls during the second week of this 21-Day Challenge might save hundreds on recurring expenses, and save you a mountain of money over the years.
Explore your options
Odds are that a talking gecko and an aproned brunette have been jockeying for your insurance dollars for quite some time. Maybe one of them can save you some scratch?
Inquire about Insurance: Collect quotes from competing insurance companies to see if another company offers you a better deal.
Channel Your Inner De Niro: Test your acting skills by threatening to cancel your cable or cell service because your bill’s too high. Most companies will cut you a deal before letting you leave.
Chat up Creditors: Got credit card debt? Call up your card issuer and ask for a reduced rate, or transfer your balance if it means long-term savings.
Break up with brands
Why buy the paper towels with the highest thread count or use the same sandwich bags as the Kardashians, when brand XYZ does the same job? Choosing store-brand products is an effective cost-cutting method that can save you a bundle at checkout.
Focus on Price, Not Packaging: From paper towels and cleaning supplies to painkillers, opt for more affordable off-brand products on your next trip to the store.
Ditch some subscriptions
Now that you’ve watched Beyoncé’s Lemonade, do you still need that subscription to Tidal? Canceling your underused memberships could supercharge your savings.
List Your Memberships: Make a list of any subscriptions or memberships that renew on a monthly or annual basis. Only keep the ones you can’t live without.
Flex for Free: Instead of renewing your gym membership, exercise outdoors, or take advantage of free or donation-based classes offered by many yoga studios and gyms.
Opt Out of Annual Fees: If you have a lengthy credit history and not a lot of debt, consider canceling any credit cards with an obligatory annual fee.
WEEK 3 – Hone New Habits
The home stretch of our 21-Day Challenge is all about the little things. Making small, subtle changes in your daily life and routine can lead to big savings over time.
Slay some vampires
Cut your electricity bill by unplugging “vampire appliances” that suck up power even when they’re not being used.
Stop Paying for “Standby”: If you only use your printer, stereo, or video game console a few times a week, don’t leave those bad boys plugged in day and night. The same goes for any appliance with a digital clock or standby mode.
Unplug Your Internet: No one at home surfing the web while you’re at work? Wireless routers rack up kilowatt hours faster than just about any other appliance. Turn off or unplug your modem and router before leaving home and you could save a chunk of change.
Adjust Your Temps: Turn off your heater’s pilot light during warmer months, and learn to use your thermostat’s built-in timer to reduce your bill. Raising your refrigerator temp a few degrees can also make a measureable difference in your electricity usage.
Go swapping, not shopping
Itching for something new in your life? Instead of whipping out your wallet, tap into your network of friends, family and coworkers to find a slew of items you can breathe new life into.
Exchange Entertainment: See if any of your friends are open to trading books, DVDs or video games.
Purge, Not Splurge: Take items you haven’t worn in a year to a thrift store or consignment shop, some of which offer store credit for something new to you.
Trade Your Threads: Rather than hitting up the mall, organize a clothing swap to trade outfits and accessories with your friends.
Financial freedom starts today
Start Mint’s 21-Day Challenge today and see how much of a difference you can make on your bank account’s bottom line. Tweet or comment about your cost-reduction strategies this month, and stay tuned for our recap.
Save more, spend smarter, and make your money go further
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Loan origination software allows financial institutions to automate and manage the workflow of each step in the lending process. These steps often include loan applications, underwriting, credit approval, documentation, pricing, funding, and rejection or disbursement of the loan application. LOS also integrates with other back end and front-end applications of lenders, allowing them to exchange … [Read more…]
Last night, Kris and I had dinner with Craig and Lisa. Craig is an architect. Lisa is a technical writer who has spent the past few years as a stay-at-home mother. (Lisa contributed two GRS guest posts last year: How to find great deals on eBay and Career advice for the college graduate.)
Now that their children are a little older, Lisa has the itch to return to the workplace, to find some non-motherly pursuit to fulfill her. (She’s a great mom, by the way, but she does have other aspirations.) She’s now in her second term at a local university, studying to obtain a degree in graphic arts. She’s taking just one evening class per term, but she loves it. This is something she’s wanted to do for a long time, and she’s juggled her life to make it happen.
After Lisa finished telling us about her classes — art history and Photoshop — I mentioned that I’d been thinking about going back to school, too. “One thing about making my living as a writer,” I said, “is that it allows me freedom of hours. I can work when I want. I’m not sure I’m ready to take on another responsibility, but if I wanted to, I feel like I could pursue any degree I wanted: finance, computers, history.”
We talked about how different it is to go back to school as an adult. The four of us all attended the same small college (Willamette University) during the late eighties and early nineties, and we’ve each had some post-college education. Craig went to architecture school. Kris obtained a masters in teaching, and then took some additional science courses. A decade ago, I spent about a year studying computer programming. And now Lisa is pursuing art. College is much different as an adult than it is just after high school.
“I remember having non-trads in class and thinking they were strange,” Lisa said. “They seemed like they were from another world.”
“Yeah,” said Kris. “I always felt like they were out of touch, like they didn’t have any reference point for my life.”
“Right,” said Lisa. “But now I look at the students in my class and I realize it’s they who don’t have a reference point for my life. Now I realize that the non-traditional students did know what it was like to be young, but it’s impossible to know what it’s like to be older until you’ve lived it. I’m sure I just seem like a housewife to a lot of my classmates — they don’t understand everything that’s led to where I am now.”
“I never understood why non-trads actually went to college,” I said. “I looked down on them. But I was an idiot. Now when I see somebody our age going back to school, I think it’s awesome. I realize how difficult it is to do that, the sacrifices a person has to make for career, for family, for leisure. If you decide to go back to school as an adult, it’s a huge commitment.”
“I always wonder how they can afford it,” Craig said, and we laughed. It’s true that the financial commitment can be daunting. When you’ve been in the workplace for ten or twenty years, you have a greater appreciation for what it means to spend $5,000 or $10,000 or $20,000 on an education.
I’ve thought a lot about our conversation this morning. I realize that what I admire so much about non-traditional students is that they set goals and they pursue them. When most young adults go to college, they don’t have a clear conception of what they’re doing, what the alternatives are, and what sort of career they’d like to pursue. But when a 37-year-old mother goes back to school, she has an aim in mind. She has a purpose. Her goals keep her focused.
It’s this focus that I admire in Lisa’s return to college. Lisa’s situation reminds me of Donna Freedman, one of my editors at MSN’s Smart Spending blog. Donna is making a similar transition. She’s surviving (and thriving) on $12,000 a year while returning to school as a “mature student”. She writes:
How am I doing? Better than I ever have, thanks, despite grammar nightmares caused by the Spanish subjunctive in adverbial clauses of interdependence. I never knew life could be this busy, this overscheduled — or this rewarding.
[…] I already have everything I need and some of what I want. Some people call that “voluntary simplicity.” I think of it as living mindfully, i.e. deciding what’s really important and working toward it. For me that means finishing the degree, saving for a home and helping the people I love.
In other words, Donna has focus. She has goals, and these goals keep her happy.
I love to watch people pursue self-improvement, which is exactly what Lisa and Donna are doing. Perhaps it’s because I spent so long — fifteen years! — without goals of my own, but now when I see other people striving toward a destination, I cannot help but cheer them on.
One popular way people pay off debt is to use the equity in their homes. Home equity loans and home equity lines of credit (HELOCs) let borrowers use their homes as collateral in exchange for financing. Just be sure to factor in the risks if you’re considering this option. The lender can seize your home if you can’t make the payments.
Who this is best for: Borrowers who have built up equity in their homes.
Who this is not good for: Those unsure of their ability to maintain the monthly payments.
Home equity loan versus debt consolidation loan: Home equity loans and HELOCs may offer lower rates than debt consolidation loans, though they come with more risks, since your home is used as collateral.
Debt relief services
Debt relief services, including debt settlement companies, offer another way to deal with your debt if you can’t qualify for a consolidation loan. These companies reach out to creditors and debt collectors on your behalf and try to settle the debt for a lesser amount.
If you decide to pursue debt relief services (perhaps as an alternative to bankruptcy), be aware that the fees these companies charge can be steep. Take your time to fully research fees, reviews and other details before applying. It’s also wise to compare multiple debt relief companies before you commit.
Who this is best for: Borrowers who are experiencing financial hardship and cannot pay their debt.
Who this is not good for: Those with a thin credit history or less-than-stellar credit score.
Debt relief services versus debt consolidation loan: Unlike debt consolidation loans, debt relief services aim to eliminate some of your debt without you having to pay it. With that said, pursuing debt relief is a risky move, and it can damage your credit score.
Credit counseling
Another option that can help you get debt under control is credit counseling. Credit counseling companies are often (though not always) nonprofit organizations. In addition to debt counseling, these companies may offer a service known as a debt management plan, or DMP.
With a DMP, you make a single payment to a credit counseling company, which then divides that payment among your creditors. The company negotiates lower interest rates and fees on your behalf to lower your monthly debt obligation and help you pay the debts off faster.
DMPs are rarely free, though, even if they’re done by a nonprofit credit counseling service. You may have to pay a setup fee of $30 to $50, plus a monthly fee (often $20 to $75) to the credit counseling company for managing your DMP over a three- to five-year term.
Who this is best for: Borrowers who need help structuring their debt payments.
Who this is not good for: Those with little wiggle room in the budget.
Credit counseling versus debt consolidation loan:With a debt consolidation loan, you’re in control of your payoff plan, and you can often apply with few fees. With credit counseling, a third party manages your payments while charging setup fees.
Balance transfer credit card
With a balance transfer card, you shift your credit card debt to a new credit card with a 0 percent introductory rate. The goal with a balance transfer card is to pay off the balance before the introductory rate expires so that you save money on interest. When you calculate potential savings, make sure you factor in balance transfer fees.
Keep in mind that paying off existing credit card debt with a balance transfer to another credit card isn’t likely to lower your credit utilization ratio like a debt consolidation loan would.
A debt consolidation loan is also going to offer higher borrowing limits, enabling you to pay off more debt, as well as fixed monthly payments, which make it easier to budget and stay disciplined with paying off debt.
Who this is best for: Borrowers who can pay off existing debt quickly.
Who this is not good for: People with a young credit history or a less-than-average score.
Balance transfer credit card versus debt consolidation loan: Balance transfer cards are often the best choice for borrowers who have the means to pay off their debt within 18 months, which is a standard 0 percent APR period. If you need longer to pay off your debt, or if you have a lot of debt, a debt consolidation loan is a better choice.
It’s nice to earn predictable interest on your savings account balance or rewards on your debit or credit card transactions. But it’s not as fun as doubling your paycheck or earning tens of thousands of dollars in cash prizes for everyday financial activities.
Yotta leans into the idea that money management should be fun. Rather than pay interest or rewards points at set rates, Yotta doles out daily prize entries and instant variable cash back. With Yotta, you can earn a great deal more than you would with a traditional savings or checking account on any given day, but you’ll also come up empty quite a bit.
Over time, things even out and you’ll most likely earn at a rate that’s higher than traditional banks but not quite as good as the best online and mobile alternatives. But there’s a lot you need to know before you sign up for Yotta.
What Is Yotta?
Yotta is a financial technology app backed by Evolve Bank & Trust, member FDIC. It includes a checking account with debit card, a savings account with multiple goal-based subaccounts, and a secured credit card with no interest or fees. It also has social features, including a product roadmap that incorporates user feedback into new features and capabilities.
Unlike most traditional checking and savings accounts, Yotta’s deposit accounts don’t earn interest or rewards on balances. Instead, everyday financial activities like debit card transactions and paycheck deposits earn opportunities to win cash prizes.
Actual winnings vary, but Yotta claims the average user can earn an amount equivalent to 2.70% annual interest (APY). Yotta draws prizes daily with a maximum potential daily prize of $1 million (though this is extremely rare).
What Sets Yotta Apart?
Yotta does things differently from most financial apps. It really stands out from the competition for:
Prizes on balances and transactions rather than interest or points. Yotta’s most unusual feature is its prized-based rewards program. Debit card purchases, paycheck deposits, and other activities earn you prize entries or instant cash rewards, but there’s no way to say for sure how much you’ll earn until those entries or rewards hit your account.
Social features like the Yotta Roadmap and prize pools. Yotta is more social than the typical fintech app, and certainly more so than traditional banks. Yotta Roadmap is a standout feature that gives users a peek into Yotta’s future plans and takes user feedback. Prize pools allow groups of users to pool prize entries and share the winnings, increasing their chances of winning (and overall winnings).
Secured credit card with no interest or fees. Yotta offers a secured credit card with no annual fee or interest charges. It’s secured by your Yotta account balance and uses that balance to pay off charges automatically each month. In other words, it’s a low-risk, low-cost way to build credit.
Is Yotta Legit?
Yes, Yotta is legitimate. You can safely hold as much as $250,000 in your Yotta account because Yotta offers banking services through Evolve Bank & Trust, an FDIC member institution with full FDIC insurance coverage.
You can also count on Yotta to pay out promised prizes. Yotta’s website is thick with testimonials from real users who’ve won real money through the app. While your overall odds of doubling your purchase or paycheck value are quite low, and the average return on Yotta balances is actually a bit lower than the top high-yield savings accounts, Yotta isn’t a scam.
Key Features of Yotta
Yotta works differently than a regular old checking or savings account. To make sure it suits your needs, take a few minutes to understand how its features and capabilities fit together.
Yotta Debit Card
Yotta comes with a Mastercard debit card accepted wherever other Mastercard products are. You can use this card to withdraw cash with no surcharge at about 55,000 ATMs in Yotta’s network.
Early Direct Deposit
If your employer or benefits provider qualifies, and most do, you can get your direct deposit up to two days early with Yotta. So if you normally get paid on Friday, you get your money on Wednesday.
Yotta Credit Card
Yotta offers a secured credit card that can help you build credit over time with responsible use. It’s secured by your account balance, which is also the maximum credit limit. To increase your credit limit, just deposit more cash into your Yotta account.
Unlike most credit cards, the Yotta card charges no interest or fees. At the end of each statement cycle, Yotta automatically pays off your card balance out of your cash balance, so there’s no risk of a late payment.
Yotta Boxes (Cash-Back Rewards)
Yotta’s answer to cash-back rewards is the Yotta Box.
Every time you make a debit or credit card purchase or receive a direct deposit, you get a box with a pre-assigned amount of cash in it. You don’t know the amount until it’s in your account.
Each box can have as much as 100% of the transaction or deposit amount in it — or nothing at all. Yotta isn’t totally transparent about how it sets box amounts, but it does provide app-wide data for the past 30 days.
According to the most recent figures available (as of early May 2023), about half of all debit and credit card transactions earned some amount of cash back. About 1% earned the full transaction amount, meaning the transaction cost nothing out of pocket. About 0.3% of direct deposits earned the full deposit amount, effectively doubling the winners’ paychecks.
Yotta Tickets (Prize Drawing Entries)
Tickets are the second way Yotta rewards users. Each ticket is a separate entry into Yotta’s daily prize drawing, which doles out prizes worth up to $1 million to multiple recipients.
Most winners earn far less — a few dollars at a time — but some earn hundreds, thousands, or even tens of thousands. Yotta keeps a running winners list with testimonials from actual big-money winners.
You get tickets for simple financial activities you already do regularly:
Making debit or credit card transactions
Receiving a direct deposit
Paying bills from your Yotta account
Making a one-time or recurring savings deposit
Like the contents of each Yotta Box, the number of tickets you receive for these actions varies seemingly at random. For example, you can earn up to twice the dollar value of debit and credit card transactions in tickets, but the average is lower — about 1.15 times the transaction value, according to Yotta. On a $100 purchase, that’s 115 tickets.
Prize Pools
Yotta’s prize pools feature lets users band together to combine their tickets ahead of each daily drawing. Each pool member’s prize share is proportional to the number of tickets they allocate to the pool. You can customize your allocation as you wish — reserving some tickets for yourself and the rest for the pool, or contributing them all to the pool.
Yotta allows public and private pools. Private pools are limited only to authorized participants, like members of your immediate family or a work group. Public pools are open to anyone with a unique invite code that any member is free to share.
Savings Buckets
Yotta offers savings subaccounts called buckets. You can set up as many as you wish, each with its own goal or purpose but all with the same basic features.
Transfer funds from your Yotta spending account or a linked external bank account to an individual bucket
Split inbound transfers between as many buckets as you wish
Transfer funds between buckets
Set up recurring transfers into one or more buckets
Lock individual buckets to prevent withdrawals before you reach your goal
Mobile Features
When it first came out, Yotta was only available as a mobile app, and the experience is still better on a mobile device. Notable mobile features include mobile check deposit and peer-to-peer payments using Yotta Pay.
Yotta Roadmap
The Yotta Roadmap is a social feature that takes feedback from users, incorporates that feedback into new Yotta features (or not), and provides a look ahead at new or updated Yotta capabilities. Yotta doesn’t incorporate every user suggestion it receives or provide total visibility into its operations, but it’s still far more transparent than your standard fintech app or bank account.
Advantages
Yotta is mobile-friendly and fun to use, and it offers multiple ways to earn valuable prizes for everyday financial activities.
No maintenance fee and only a token minimum balance. Yotta has no monthly maintenance fee. The only catch is that you need to keep at least $5 in your account, otherwise Yotta reserves the right to close it. That should be no sweat for most users.
Potential to win truly valuable prizes. Yotta offers the possibility, if not the guarantee, of earning far more in prizes and random cash back than you would with a traditional rewards credit card or savings account. The daily prize jackpot is $1 million, though most winners receive a small fraction of that.
Prize pools boost winning odds. Just like pooling cash to buy lottery tickets with friends, family, or colleagues, Yotta’s prize pools increase members’ odds of winning something in each drawing. Even if you don’t win, it makes the experience more fun.
Partial transparency around prizes and winners. Yotta’s ticket allocations, box amounts, and prize drawing process are proprietary. Ordinary users have no visibility into them. But to its credit, Yotta does keep a running list of prize winners, ticket allocations, and box amounts. This builds confidence and ensures you have at least some idea of what you’re getting into.
Users have a say in Yotta’s future plans. The Yotta Roadmap is another social feature that gives users the sense that they have a stake in Yotta’s future. Even if you have no big ideas for Yotta, seeing its future (and already executed) plans mapped out is super-useful (though not all are guaranteed to come to fruition).
Mobile-first approach. Yotta is a mobile-first platform. Its mobile app came out before its desktop version, and it still looks better on a small screen. That’s good news for anyone who does some or all of their banking on the go.
Secured credit card can build credit at lower cost and risk. With no interest or fees and an automatic payment process, Yotta’s secured credit card is legitimately innovative — and consumer-friendly. If your credit needs work, it’s a good place to start.
Disadvantages
Yotta has a few important disadvantages, some of which might not be obvious to would-be applicants.
Lower yields than the top savings accounts. Yotta says its average annual savings reward works out to 2.70% APY. Basically, this is what you can expect to earn, combined, from Yotta prizes and instant cash. While better than the big banks, it’s not up to par with current yields on the best high-yield savings accounts.
Earnings aren’t predictable. Because they’re random prizes and cash rewards, Yotta account earnings aren’t as predictable as fixed interest or rewards rates. There’s no reliable way to calculate your monthly earnings in advance, as is the case with a traditional bank account or credit card.
Not all debit card and credit card purchases earn rewards. Another downside to Yotta’s rewards structure is that about half of all debit and credit card purchases earn no rewards at all. If you use your account only occasionally, you could go days or weeks without earning any cash or prizes.
How Yotta Stacks Up
Yotta is markedly different from traditional bank accounts and even most new fintech apps, but it still competes against them. Before you open an account, see how it compares to another popular mobile money management platform: Current.
Yotta
Current
Balance Requirement
$5 minimum
None
Monthly Fee
$0
$0
Yield
2.70% on average, but highly variable
4.00% APY on eligible balances
Spending Rewards
Variable, based on prize entries and instant cash
Up to 7x rewards on debit card purchases
Early Direct Deposit
Yes
Yes
Credit Card
Yes
No
Deposit Insurance
Yes, up to $250,000
Yes, up to $250,000
Final Word
Not all bank accounts are the same, but it can feel that way sometimes. That makes choosing your next bank account — or mobile money management app — a more difficult, overwhelming prospect.
Yotta is different. There’s no mistaking it for a traditional bank account, and its unusual prize-based rewards structure sets it apart from fintech apps that are otherwise quite innovative. If you’re looking for a truly novel banking experience that’s social, fun, and rewarding, it should be on your short list.
Then again, the same features that make Yotta so fun and interesting can also negatively impact your experience with it. It’s impossible to predict how much your balance or spending earns from month to month, and even by Yotta’s calculation, the expected annual return is lower than the best savings accounts. If you value predictability over serendipity, Yotta might not be right for you.
The Verdict
Our rating
Minimum Balance/Deposit: $5
Maximum Balance: None
Monthly Fee: $0
Rewards: Varies based on prize entries
Yield: 2.70% APY on average
Additional Benefits: Early direct deposit, mobile check deposit, secured credit card
Banking Services By: Evolve Bank & Trust, member FDIC
Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.
A new bill written up by California Assemblymember Bob Blumenfield (D-San Fernando Valley) calls for a $20,000 fee to be charged to banks for every foreclosure they carry out in the state.
Aimed at reducing foreclosures in the hard-hit region, Assembly Bill (AB) 935 would fine mortgage lenders or loan servicers $20,000 per foreclosure in the form of a “foreclosure mitigation charge,” creating incentives to offer loan modifications or refinance alternatives.
Blumenfield said each foreclosure costs the local governments an average of $20,000 in the form of public safety calls and arrests, unpaid property taxes, inspections, trash removal, lawn maintenance, and other expenditures.
Each borrower loses some $7,000 in fees, and each foreclosure lowers neighboring home values by one percent.
The bill would supposedly generate up to $16 billion over the next two years, as nearly 800,000 foreclosures are expected in the Golden State.
So where would the money go?
AB 935 wound send 20 percent of the proceeds to K-14 public education, 20 percent toward public safety, 20 percent to redevelopment activities, 20 percent to cities and counties to pay for mitigating the effects of foreclosures on communities, and 20 percent toward small business loans.
California has seen more foreclosures than any other state, and is expected to see two million homes go through the process between 2008-2012.
This translates to roughly $632 billion in lost home value, $3.8 billion in lost property tax revenue, and $17.4 billion in costs borne by local governments.
For Los Angeles County during the same period, 381,000 foreclosures are expected, resulting in $150 billion in lost home value, $918 million in lost property taxes, and $2.8 billion in maintenance costs to local governments.