Do you feel like you are stuck in a never-ending debt cycle?
Perhaps you keep getting out of debt, only to fall back into it shortly after. That is what a debt cycle is, and many people fall into this cycle and can’t seem to get out.
Falling into debt over and over again can lead to insane amounts of stress, unhappiness, sadness, and feelings of hopelessness. No one wants to experience these feelings.
But, I want to tell you that it IS possible to get out of the debt cycle.
Today, I will help you finally escape the debt cycle so that you can live the life you want.
Face your problem
Before we continue, you need to realize why you keep falling into a debt cycle. You should think about the answers to the questions below:
Do you feel like you deserve everything you buy?
Are you trying to keep up with the Joneses?
Do you have an emotional spending problem?
Are you afraid to face how much debt you have?
Do you feel like debt makes things seem more affordable?
Are you unprepared for emergencies?
Do you truly understand how debt and interest rates work?
Are you living paycheck to paycheck?
Do you live beyond your means?
Do you have credit card spending problems?
To get out of a debt cycle, you need to realize why you keep falling into debt. By understanding why you are falling into debt, you can begin to prevent yourself from falling back into a debt cycle.
However, until you dig deep and realize this, the debt cycle will never end.
Side note: I highly recommend that you check out Personal Capital if you are interested in gaining control of your financial situation. Personal Capital is very similar to Mint.com but 100 times better. Personal Capital allows you to aggregate your financial accounts so that you can easily see your financial situation. You can connect accounts such as your mortgage, bank accounts, credit card accounts, investment accounts, retirement accounts, and more. And, it is FREE.
Add up your total debt
This is related to facing your problem, as adding up your total amount of debt will help you realize how to gain control of your debt. This will help you to truly understand how much debt you are dealing with.
Plus, most people have no idea how much debt they have. By adding it up, you will have a more realistic view of your debt problem.
Create a budget
Most people have student loans, credit card debt, a mortgage, car loans, and sometimes many other forms of debt. However, not many people have a budget.
According to a survey done by Gallup, 68% of households in the U.S. do not have a budget.
Budgeting can help you take control of your financial situation so that you can stop the revolving debt cycle.
Read more at The Complete Budgeting Guide: How To Create A Budget That Works.
Pay off debt
In order to get out of the debt cycle, you’ll have to pay off your debt!
No surprise there.
Paying off your debt can lessen your stress levels, allow you to have more money to put towards something else (such as retirement), stop paying interest fees, and more.
Read more at How To Eliminate Your Debt.
Create a vision board
Having your financial goal displayed in front of you can make it that much more real, plus it’s nice to have a constant reminder of what you’re working towards.
Various ways to make your financial goal visual include:
Create a graphic that demonstrates your financial goal. I did some research and found a blog post on A Cultivated Nest about many creative ways to do this.
Keep a picture of your goal on hand. You could even go all out and create a vision board on Pinterest, or you can create a poster board of all of the things that debt freedom will allow you to do.
Write down what debt free life will be like for you.
Start an emergency fund
An emergency fund is something that everyone should have. However, according to a report by Bankrate.com, 26% of Americans have no emergency fund whatsoever. This same report found that only 40% of families have enough in savings to cover three months of expenses, with an even lower percentage having the recommended six months worth of savings.
This is scary to me, as having an emergency fund can greatly help you get through hard and unexpected situations that may arise.
An emergency fund can help if you:
Lose your job
Have your hours cut back
When your car breaks down
If you have a medical expense, and so on.
Plus, an emergency fund can help you get out of the revolving debt cycle. This is because if an emergency does arise, you won’t be forced to rely on debt in order to solve your situation. Instead, you’ll have your emergency fund to bail you out!
Read more at Everything You Need To Know About Emergency Funds.
Spend less than you earn
Too many people live paycheck to paycheck. This can lead to credit card debt, high interest rates, and more.
You should always be spending less than you earn. If you aren’t, then you need to find ways to cut your budget and/or increase the amount of money you earn.
Save more money
Finding ways to save more money may allow you to pay off your debt a little faster, improve your financial habits, help you reach your dream sooner, and more.
Read more at 30+ Ways To Save Money Each Month.
Make extra money
I believe that earning extra income can completely change your life in a positive way. You can stop living paycheck to paycheck, pay off your debt, and more, all by earning extra money.
In fact, because of extra income and my blog, I was able to pay off $38,000 in student loans within 7 months, leave my day job in order to pursue my passion, travel full-time, and more!
Making extra money can do something similar for you as well. It can help you break out of the debt cycle as you’ll be able to put more money towards your debt, and you will be able to spend less than you earn.
Related articles:
Try using just cash
If your problem with debt is that you don’t know how to correctly use credit cards, or credit cards or too tempting for you, then you may want to get rid of your credit cards and try using cash.
A cash budget is when you pay for the majority of your purchases in cash. Of course, there are certain expenses, like a mortgage payment, that you may not be able to do that for or that you may not want to do that for. For the most part, any and almost all spending is done with cash when a person is taking part in a cash budget.
A cash budget can help because:
It forces you to think about where your money is going
It can prevent impulse shopping and clutter
Spending actual cash “hurts” more than spending money with a credit card
Don’t keep up with the Joneses
Whether you are a young child and want that new toy everyone is playing with, or if you are a parent and are feeling the need to upgrade your house, car, etc., everyone has experienced wanting to keep up with someone else.
The problem with this is that keeping up with the Joneses can make you broke and fall into a revolving debt cycle.
When trying to keep up with the Joneses, you might spend money you do not have. You might put expenses on credit cards to, in a pretend world, “afford” things. You might even buy things you don’t really care about. The problems can go on and on.
This can then lead to a lot of debt and potentially set your financial goals back years, if not decades.
You should stop caring about what other people are buying, and, instead, only do what makes you happy.
Are you stuck in the revolving debt cycle? What are you doing so that you can get out?
When I worked for my old brokerage firm, I was a W-2 employee and the retirement plan options were simple. I had the 401k and could also do a Traditional or Roth IRA outside of it. Things changed a bit when I started my own company.
I officially became a small business owner and had man more choices on retirement plans. What options do hands-on owner-operators have and which one is the best for you? If you have a small company and want a retirement program, you want to consider these plan choices.
Traditional or Roth IRA
I know what you’re thinking. A traditional or Roth IRA isn’t exactly a “business retirement plan”. But, if you are self-employed or own a business, you can still take advantage of these retirement accounts. An IRA is an Individual Retirement Account and can be a great way to save for retirement while also taking advantage of tax benefits.
There are two types of IRAs: traditional and Roth. With a traditional IRA, you will make your contributions with pre-tax dollars, reducing your taxable income for the year. The money will then grow tax-free until you withdraw it in retirement, at which point all of the withdrawals are taxed as ordinary income. With a Roth IRA, you will make contributions with after tax dollars (reducing your take home pay). The money will still grow tax-free until you withdraw it in retirement, but the difference is that all of your withdrawals are tax free.
With either type of IRA, there are contribution limits and other rules you should be aware of before setting up an account. It’s also important to do research on different providers so you can find an IRA with low fees and good investment options.
Feature
Roth IRA
Traditional IRA
Tax Treatment
Contributions are made with after-tax dollars and grow tax-free. Distributions in retirement are tax-free.
Contributions are made with pre-tax dollars, reducing your taxable income. Distributions in retirement are taxed as ordinary income.
Income Limits
Contributions are limited based on income. In 2023, the phase-out range for single filers is $130,000-$145,000 and for married filers is $195,000-$205,000.
There are no income limits for contributions, but there are limits on tax deductions based on income and participation in an employer-sponsored retirement plan.
Required Minimum Distributions
Roth IRAs do not have required minimum distributions (RMDs) during the account owner’s lifetime.
Traditional IRAs have RMDs starting at age 72, which require the account owner to take a certain amount of money out of the account each year.
Early Withdrawals
Contributions can be withdrawn at any time without penalty. Earnings can be withdrawn penalty-free after age 59 1/2 and after 5 years of account ownership.
Early withdrawals before age 59 1/2 may be subject to a 10% penalty, in addition to income taxes.
Contribution Limits
In 2023, the contribution limit is $6,500 per year ($7,000 for those age 50 or older).
In 2023, the contribution limit is $6,500 per year ($7,000 for those age 50 or older).
The SIMPLE IRA
These plans are very easy to create, and they have very low administrative costs and no annual IRS reporting requirements. You set up traditional IRAs for each eligible employee; they can contribute to the IRA on a tax-deferred basis (via payroll deductions, and you can either match the contributions of plan participants or contribute a fixed percentage of all eligible employees’ pay. The employees own the money in their IRAs.
I had considered going with the Simple IRA initially, but the one item I didn’t like is that it has a 25% early withdraw penalty for the first two years. This is well over the standard 10% all other plans have. In the event I did get into a bind, I didn’t like the idea of having to pay the extra to get it out.
The SEP IRA
A Simplified Employee Pension plan lets you make contributions toward your retirement and your employees’ retirements. (You can even have a SEP and another kind of retirement plan at your business simultaneously.) A SEP allows business owners annual tax-deductible contributions equal to 25% of your compensation (if you have a corporation) or 20% of self-employment income (for a sole proprietor).
This is currently what I have and should satisfy me for a few more years. I even opened up two separate accounts so I could invest with Betterment and another where I control my own investments. Pretty soon I hope to graduate to the next level…
The Solo 401(k)
Are you ready to fly solo? As in a “Solo” 401(k). Yes, you can have a 401(k) when you are self-employed. A business owner may establish one and include their spouse in the plan, provided the spouse is an employee of the business. A solo 401(k) throws in a profit-sharing twist on the standard 401(k). Solo 401ks may be funded by the employee (deferred compensation) and the business (a percentage of profit).
As an employee of your business, you can contribute an amount up to the standard yearly 401(k) contribution limit (catch-up contributions permissible if you are 50 or older). Additionally, solo 401(k) plans allow you to make tax-deductible profit-sharing contributions equal to 25% of your compensation (corporate entity) or 20% of self-employment income (sole proprietor). It is even possible to have a solo Roth 401(k). These plans do require a TPA (third-party administrator).
Ultimately, the Solo 401(k) will allow me to contribute the most pre-tax, but my income has to get me there first 🙂
Profit-sharing plans
Here’s one way to compete with larger companies for prime employees. Contributions are usually deductible at both the federal and state levels, with contribution limits equivalent to a SEP. Contributions aren’t mandatory. If your business has a bad year, you don’t have to make them. The assets placed within the plan grow tax-deferred. Again, annual tax-deductible contributions may be made according to the 25%/20% rule depending on your business entity.
New comparability plans
Basically, this is a form of profit-sharing plan that rewards senior or key employees more than others. The classic situation for this plan is when you have a small business whose multiple owners take home similar earnings but are of different ages. The plan must be tested to meet Internal Revenue Code nondiscrimination requirements, of course. It allows different levels of compensation to different groups within a small business.
Plan Type
Description
Contribution Limits
Employer Contributions
Employee Contributions
Eligibility Requirements
401(k) plan
An employer-sponsored retirement plan that allows employees to save for retirement on a pre-tax or after-tax basis.
$22,500 per year (2023), with catch-up contributions allowed for those over 50.
Employers can choose to match employee contributions up to a certain amount, or make a profit-sharing contribution.
Employee contributions can be made on a pre-tax or after-tax basis.
Available to any business, including self-employed individuals.
Traditional IRA
An individual retirement account that allows individuals to save for retirement on a pre-tax basis.
$6,500 per year (2023), with catch-up contributions allowed for those over 50.
None, but some employers may offer a SIMPLE IRA option for employees.
Contributions are made by the individual.
Available to anyone under age 70 1/2 who has earned income.
Roth IRA
An individual retirement account that allows individuals to save for retirement on an after-tax basis.
$6,500 per year (2023), with catch-up contributions allowed for those over 50.
None, but some employers may offer a SIMPLE IRA option for employees.
Contributions are made by the individual.
Available to anyone with earned income below a certain threshold.
SEP IRA
A Simplified Employee Pension Plan that allows employers to make tax-deductible contributions to a traditional IRA for each eligible employee.
The lesser of $66,000 or 25% of employee compensation for the year.
Contributions are made by the employer.
None, but employees can contribute to a traditional IRA outside of the SEP plan.
Available to any business, including self-employed individuals.
SIMPLE IRA
A Savings Incentive Match Plan for Employees that allows employers and employees to make contributions to a traditional IRA.
$15,500 per year (2023), with catch-up contributions allowed for those over 50.
Employers can choose to match employee contributions up to a certain amount, or make a non-elective contribution.
Contributions are made by the employee.
Available to businesses with 100 or fewer employees.
Defined Benefit Plan
A retirement plan that provides a specific benefit amount at retirement, based on factors such as salary and years of service.
Contributions are determined by an actuary based on funding requirements.
Contributions are made by the employer.
None, but employees may be required to meet certain eligibility requirements, such as a certain length of service.
Generally available to larger businesses with the ability to fund ongoing plan obligations.
What plan is best for your business?
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If you are reading this, you are probably thinking about putting a plan into place or switching to a retirement program more easily administered than the one you have now? But which one should you choose – and what is the next step? Take a big step today and take advantage of all that is available in the marketplace – consult an independent financial professional and a CPA to review your options and find the program that fits your needs.
If you are looking for ways to make extra cash at home on a flexible schedule, then I recommend checking out Branded Surveys.
This honest review of Branded Surveys is going to explain what Branded Surveys is, how Branded Surveys works, and how you can make extra money on Branded Surveys each month.
Now, I do want to start by saying that Branded Surveys will not make you rich. No survey site will do that. But, you can easily earn a little extra money in your spare time from home.
The PayPal cash and Amazon gift cards that you can earn from survey sites can help you to have a little bit extra spending money, but still not have to sacrifice too much of your time. Plus, you can take surveys while you’re watching TV or doing some other task that does not need your full attention.
All you need is an internet connection and a device (phone, laptop, computer, or tablet).
In today’s Branded Surveys review, you are going to learn about one of the most popular survey companies – Branded Surveys.
Branded Surveys has already paid out over $37,793,794.07 to their members.
Plus, it’s free to sign up and only takes a few minutes to get started answering surveys.
This Branded Surveys review is going to answer common questions, such as:
Why does Branded Surveys pay you?
How do I earn points on Branded Surveys?
How much money can you make using Branded Surveys?
What kind of questions are asked in paid online surveys?
Can you make $1,000 each week from surveys?
My Branded Surveys review is going to answer all of those questions, as well as talk about paid online surveys a little more at the end, in case you have any other questions about them.
Get the inside scoop below on this online survey site with this in-depth Branded Surveys review. Learn about the platform’s features, earning potential, and user reviews to decide if it’s the right online survey site for you. Read now to make a smart decision and start earning extra cash and gift cards right away.
You can sign up for Branded Surveys here and receive a free 100 point sign up bonus.
Branded Surveys Review
What is Branded Surveys?
Branded Surveys is one of the most popular online survey platforms and they were started in 2012.
Branded Surveys pays you to take surveys, and they have over 3,000,000 users. You can sign up for free and get paid through cash or redeem your points with over 100 different gift card options.
On Branded Surveys, you can make around $0.50 to $5 for each survey you take (depends on the length of the survey).
Branded Surveys is available to people in the United States, Canada, and the United Kingdom.
Also, you only have to be 16 years old to answer surveys on Branded Surveys, whereas most other online survey sites ask you to be 18 years old.
You can sign up for Branded Surveys here and receive a free 100 point sign up bonus.
Why does Branded Surveys pay you?
Branded Surveys and other market research companies pay you to answer online surveys because they are collecting research.
Companies hire market research businesses to learn what real customers, like you and me, actually think of their products and business. They can use the survey data that is collected to improve their product and business, or even create a whole new product that better suits the needs of their customers.
What kind of questions are asked in surveys?
Are you wondering what kind of questions you might be asked when you answer paid online survey sites?
Well, the type of questions that you receive can vary depending on the survey, but generally, they ask for your opinions on products or services, your preferences on certain topics, and sometimes even personal information such as do you have a dog or children.
For example, here are some survey questions that you may see:
How often do you go to a restaurant in a month?
How important is the price when considering a particular product or service?
What features do you look for when purchasing a _____?
How often do you use a ______?
What is your annual income?
How do you usually spend your spare time?
Have you recently purchased any new electronics or appliances? If so, what did you buy and why?
Do you usually research a particular product before buying?
How often do you shop for groceries each month?
How many hours per week do you spend watching TV shows or movies?
As you can see, they are easy. It is not rocket science!
These are just a few examples of the kind of questions that you may see when you answer a survey. Some surveys may be more focused on a specific product, whereas others may want to learn more about you.
Many times they simply want to just learn more about you, because this can help them figure out why you need a certain product or service.
How does Branded Surveys work?
The sign-up process is easy for Branded Surveys. Here are the steps:
Sign up for Branded Surveys here and receive a free 100 point sign up bonus. You can create a log in or log in with just your Facebook account.
Then, you will be asked to create your profile. This is so that they know what surveys to best match you with. Here, you will be asked your age, if you have children, what your education level is, and more.
Once you match with a survey, you will receive an invite from Branded Surveys that you can take. You will receive survey notifications in your email inbox or by logging into Branded Surveys and looking at your dashboard to see what surveys are available.
Complete the survey and earn points
After you have enough points, you can redeem your points for payout options such as cash or gift cards.
And that is all!
It is easy.
How to earn points on Branded Surveys
You can earn survey points in four main ways on Branded Surveys. The ways include:
By taking surveys. When you first create your account, you will earn points by simply building your profile. After that, you will earn points by answering real surveys.
Inviting friends can earn you 50 points once your referrals earn a silver badge. You will receive a referral link to share.
Answering the daily poll will earn you 5 points. These polls take less than a minute to answer and are asking you a very easy question.
Branded Surveys also has a leaderboard for whoever gets the most points on a daily, weekly, or monthly basis. For daily leaderboard winners, you get 50 bonus points. For weekly leaderboard winners, you receive 200 points. For monthly leaderboard winners, you get 300 points.
Unlike other survey platforms, Branded Surveys sole focus is just surveys. They’ll even give you bonuses for answering the most surveys!
How much is 1,000 points on Branded Surveys?
Each point on Branded Surveys is worth $0.01.
1,000 points are equal to $10.
500 Branded Surveys points are equal to $5.
Once you have earned a minimum of 500 points, you can redeem your points for rewards. Or, you can save your points and get a bigger reward.
How fast can you make money on Branded Surveys? How much money can you make using Branded Surveys?
On Branded Surveys, you can make around $0.50 to $5 for each survey you take.
Each survey on Branded Surveys typically takes around 5 to 20 minutes to complete. Before you start a survey, Branded Surveys will tell you the estimated amount of time – so you can see before you begin if you think it is worthwhile. Remember, this is just an estimate and sometimes you may spend more time or less time answering a survey.
How many surveys can you do a day on Branded Surveys?
If you are invited to a survey and start it before it becomes full, then you can do as many surveys as you want on Branded Surveys.
The main Branded Surveys problems are that you may not qualify for a ton of surveys, or you may be disqualified from taking a survey. This can be annoying to some people (this is typically the most common area for Branded Surveys complaints), but survey companies do this for a reason. Survey companies often send shorter surveys to see if you will qualify for a full survey. This is to ensure that you are a good fit for the survey.
Can Branded Surveys be trusted? Is Branded Surveys a scam?
Yes, Branded Surveys can be trusted, and they are not a scam.
You can find other reviews of Branded Surveys at Branded Surveys Trustpilot. There are over 74,000 Branded Surveys reviews there with an average score of 4.2 out of 5 stars.
Also, in case you want to look for even older Branded Surveys reviews, Branded Survey used to be called Mintvine.
The Branded Surveys mobile app is available in the App Store as well as the Google Play Store. Or, survey takers can answer surveys right from their desktop computer or laptop.
This is the Branded Surveys dashboard when you first sign up.
Does Branded Surveys actually pay you?
Yes, Branded Surveys does actually pay you. Branded Surveys payout options including being able to receive payment via bank transfer, which is done via direct deposit within just 1 business day.
Or, you can choose to get paid via PayPal cash.
They also have gift cards to places such as Airbnb, Amazon, Apple, Barnes & Noble, Best Buy, Delta Air Lines, Disney, Kroger, Lowe’s, REI, Sephora, Starbucks, Target, Walmart, and so many other retailers.
There is also Branded Pay, which is another way to get cash directly to your bank account. You will receive your payment in around 48 hours.
Another option that they have is you can choose to donate your earnings to a charity.
What is the Branded Elite program?
Branded Elite is a special loyalty program offered by Branded Surveys. It is their way of rewarding members for consistently answering their online surveys with the opportunity to earn more points.
Throughout each month, as you take surveys on Branded Surveys, you can get to the Bronze, Silver, and Gold badge levels. You can pass through each level after completing at least 12 surveys each week and you will be awarded bonus points weekly (on top of what you are already earning for taking each survey).
Here is more information on each tier and the extra points you can earn:
For the Bronze level (you reach the Bronze badge once you complete 2+ surveys each month), you will receive a 5% bonus once you complete at least 12 surveys each week.
For the Silver level (you become a Silver member once you complete 10+ surveys each month), you will receive a 10% bonus once you complete at least 12 surveys each week, a 12% bonus once you complete at least 20 surveys each week, and a 14% bonus once you complete at least 30 surveys each week
For Gold members (you reach the Gold tier once you complete 25+ surveys each month), you will receive a 15% bonus once you complete at least 12 surveys each week, a 17% bonus once you complete at least 20 surveys each week, and a 19% bonus once you complete at least 30 surveys each week.
Is Branded Surveys free?
Yes, Branded Surveys is free.
Legit survey sites are always free. I don’t know of any legitimate survey sites that charge you money to sign up. And, they shouldn’t!
Branded Surveys is free – they don’t charge you to sign up, take surveys, or stay a member.
Can you make $1,000 a week from surveys?
No!
If you are looking for a paid survey site to pay you $1,000 a week, you will not find that because it does not exist.
Legit survey sites do not make you any promises to make you rich. They exist to give you some spare spending money in a flexible way, and that is all.
You will most likely earn around $10 or less to answer surveys in your spare time.
How much can you realistically make with surveys?
You will most likely earn less than $100 a month by taking surveys. They don’t take up a lot of your time, and they are not a scam.
If a paid survey site says you can make $1,000 a week, I would be extremely cautious because I have not heard of this yet.
To make the most money by taking online surveys, you will want to sign up for as many survey sites as you can.
Do survey sites actually pay you to take surveys?
Yes, websites do pay you to take online surveys. The paid survey sites below may pay you in gift cards, PayPal cash, and even by check.
Over the years, I have received over 110 gift cards to places such as Amazon, checks in the mail, and PayPal cash for answering online surveys.
There are many other legit survey sites that will pay you as well. I recommend signing up for as many as you can because they all have different surveys that they invite you to, so this can increase the amount of money you can make taking surveys.
Below are some other popular survey sites that I recommend:
American Consumer Opinion
Survey Junkie
InboxDollars
Pinecone Research
Prize Rebel
User Interviews – This one pays the most, with many paying over $100 an hour.
What other reviews on survey sites do you have?
If you are looking to learn more about each online survey website, I have in-depth reviews on several of them. You can find them below:
Branded Surveys Review – Is Branded Surveys Legit?
I hope you enjoyed this Branded Surveys review.
If you are looking to earn a little extra money but you do not want to commit to a lot of hours or another job, then answering surveys at home may be an option for you to look into.
Plus, Branded Surveys is available to people in the U.S., Canada, and the UK, for anyone 16 years old and older.
Branded Surveys is a legitimate survey platform that pays you to complete surveys, and that’s their only focus. They have plenty of surveys for you to answer. There are a lot of ways to redeem your points, such as many different gift card options and even straight cash.
So, if you are looking for a survey company to join, then Branded Surveys is a survey site definitely worth considering.
You can sign up for Branded Surveys and receive a free 100 point sign-up bonus here.
Do you take online surveys? What other questions do you want me to answer in my Branded Surveys review?
Auctions can be great fun, as well as places for genuine bargains. The key is to know how the auction process works and to take advantage of a bargain if it fits your plans.
Prior to attending an auction, potential buyers should try to find out as much as possible about specific properties they are interested in. While most real estate auctions allow prospective buyers some inspection rights, direct contact with the administrator of the auction is frequently needed to arrange personal inspections.
Know The Property
Be sure to check the features, location and condition of the property. Attempt to discern the current market value of the property by looking at sales of comparable properties in the same area. Compare properties with the same number of rooms, particularly bedrooms and bathrooms, but be sure to allow for price differences due to “extras”-swimming pools or decks, garages, etc. Arriving at an auction well prepared will help you determine your bid price and even help you decide whether to bid on a specific property at all.
A property is put up for sale through an auction format for any number of reasons – a foreclosure action, a tax deed application, a court-ordered sale, provisions in a contract, a divorce resolution, a provision to satisfy the needs of an estate, a dissolution of a partnership or trust or because the owner chooses the auction as a means to quickly dispose of the property.
Get Familiar With Auction Process
Real estate auctioneers employ a variety of auction formats and bidding procedures. Many factors play a part in determining which methods will be used. Following are some of the more common real estate auction formats and bidding procedures used today.
An absolute auction is an auction in which the property is sold to the highest bidder, regardless of how low that bid might be. This type of real estate auction typically attracts the most bidders since the public knows that the property has to sell.
A reserve auction also referred to as a minimum bid auction, sets a pre-determined minimum bid amount prior to the start of the auction.
A subject to owner withdrawal auction allows the seller to bid on the property for himself or herself or to withdraw the property from the auction outright if he or she does not like the amount of money bid.
A silent or sealed bid auction allows bids to be made in advance and submitted for review. No one knows what anyone else is bidding.
In the case of a foreclosure or other court-ordered sale, state laws generally establish a period of time over which the property must be advertised prior to the sale. This serves several different goals. The most important is to give ample notice to draw prospective buyers. The other main reason for such announcement of the auction is to give all interested parties sufficient time to react to protect their interests. However, even with advance notice and advertising, it is rare for an auction to draw many prospective buyers.
Have a Talk….With Yourself
Once you understand how the auction works, you need to ask yourself: Is this for me? It can be fun to bid, but it can be costly. Never bid because you get caught up in the fever of the moment. Some auctions can be very intimidating. It’s a good idea to go to a few as a spectator, so you get used to the speed of the bidding and terminology used.
There will always be a degree of risk when buying a home at an auction, but with a little due diligence, potential homebuyers could save a lot of money buying in this manner.
Excerpted, in part, from The Real Estate Investor’s Answer Book by Jack Cummings, a McGraw-Hill publication.
A credit union is a nonprofit institution that’s owned by its members. Compared to a traditional bank, a credit union tends to offer more personalized service.
You can turn to a credit union for a variety of financial products, like checking and savings accounts, credit cards, car loans, and mortgages. Some regional and federal credit unions also offer wealth management services and other extras.
A typical credit union only accepts members who live in a specific region or work for an eligible employer. For example, they may require that you’re a resident of Atlanta, Georgia or work as a teacher.
The good news is some credit unions require less and make it easy for just about anyone to join. If you’d like to join a credit union but don’t want to worry about the strict membership requirements at most institutions, you’ve come to the right place.
38 Best Credit Unions Anyone Can Join
There are hundreds of credit unions that anyone can join, but we’ve done the heavy lifting and found the best ones for you. The credit unions below, which are overseen by the National Credit Union Administration (NCUA) may be an option for you, regardless of what you do for a living or where you’re located.
Just keep in mind that you may have to make a donation, join an organization, live in a certain state, or meet some other eligibility requirement. We encourage you to explore this lengthy to list of credit unions anyone can join so you can hone in on the ideal credit union for your unique situation.
1. Alliant Credit Union
Alliant Credit Union made its debut in 1935 to serve the employees of United Airlines. It stands out for it high-interest savings and checking accounts with low minimum opening deposits as well as excellent customer service.
You’ll also receive access to more than 80,000 free ATMs across the U.S. and get reimbursed up to $20 in out-of-network ATM charges per month. Since it only has two brick-and-mortar locations, you should feel comfortable with online banking. If you’d like to join Alliant Credit Union, make a $5 donation to Foster Care to Success.
2. Connexus Credit Union
Connexus Credit Union was founded in 1935 and has a widespread presence in Wisconsin as well as more than 54,000 ATMs across the country. It couldn’t be easier to join the credit union as all you have to do is pay a one-time $5 fee to the Connexus Association, which supports financial education through college scholarships.
As a member, you can open one of its three checking options with high APYs and a traditional savings account or one that’s specifically designed for the holidays.
3. Pentagon Federal Credit Union
Pentagon Federal Credit Union, or PenFed, was founded in 1935 as a credit union for military and civilian government. Today, this Virginia-based credit union has opened it doors to anyone as long as they open a savings account and deposit a minimum of $5. It offers two savings accounts, including the Regular Savings and Premium Online Savings.
In addition, you can find checking accounts, CDs, and money market accounts. Other products include Coverdell Education Savings Certificates, IRAs, credit cards, mortgages, home equity loans, and student loans. Plus, you can enjoy modern perks like mobile check deposits, online bill pay, and instant transfers.
4. First Tech Federal Credit Union
First Tech Federal Credit Union is headquartered in California. The credit union offers many benefits, such as excellent customer service, many branches throughout the U.S. and Puerto Rico, online banking, and mobile banking.
It also has the Dividend Rewards Checking Account, which gives you 1.00% APY on balances below $1,000. You don’t have to live in California to join as long as you donate to a nonprofit called the Financial Fitness Association.
5. Consumers Credit Union
Consumers Credit Union was established in 1951 as a local credit union. Based in Illinois, it’s one of the largest credit unions in the state with over 100,000 members and more than $1.2 billion in assets.
You can join it, even if you don’t live in Illinois. All you have to do is donate the $5 membership free to an affiliated nonprofit. You can open almost all of its accounts online, except for the checking accounts and IRAs. The credit union also offers a high-yield checking account that offers high interest if you meet certain criteria.
6. Langley Federal Credit Union
Langley Federal Credit Union is based in Virginia and made its inception in 1936. At that time, members of the National Advisory Committee for Aeronautics, the predecessor to NASA, chartered the credit union.
Today, Langley offers membership to anyone who pays a fee to support an important cause in Virginia and deposits at least $5 into a savings account. You can choose from a checking account without a monthly fee, a variety of no-fee savings accounts with competitive interest compounds monthly, and Visa Cards with cash back rewards.
7. Lake Michigan Credit Union
Lake Michigan Credit Union made its debut in 1933 by a group of teachers. Headquartered in Grand Rapids, Michigan, it has 51 branches in Michigan and southwest Florida. Since it’s part of the Allpoint ATM network, members can enjoy free access to more than 55,000 free ATM.
To join, donate $5 to the ALS Foundation and deposit $5 into a Member Savings account. Once you do, you can earn perks through the MORE rewards program and redeem them for complimentary checks and free out-of-network ATM transactions.
You may also open the free, no frills Max Checking account. Note that the Member Savings account, which you must open to become a member, requires a minimum daily balance of $300 or you’ll be charged a $5 monthly fee.
8. Lafayette Federal Credit Union
Lafayette Federal Credit Union was founded in 1935 as an alternative to traditional banks. It offers numerous perks, like no minimum balance requirement or monthly maintenance fees, online banking, mobile deposits, free direct deposit, and special discounts.
You can join it if you live, work, worship, or attend school in Washington D.C. If you live outside the D.C. area, you may still become a member as long as you invest in a lifetime Home Ownership Financial Literacy Council (HOFLC) membership for only $10. This nonprofit focuses on helping consumers navigate the path to homeownership.
9. Affinity Plus Federal Credit Union
Affinity Plus Federal Credit Union has 26 branch locations across Minnesota. APFCU offers MyPlus Rewards that gives you points if you keep a certain amount of money in your bank account or use its debit or credit card.
To be eligible to join, all you have to do is donate $25 to the Affinity Plus Foundation and open a basic savings account. If you live and work in Minnesota or have a family member in the state, there are other ways to become a member.
10. Chevron Credit Union
Chevron Credit Union has been around since 1935 and has 19 branches that span six states, including California, Louisiana, Mississippi, Texas, Utah and Virginia. It operates under two brands: Chevron Federal Credit Union and Spectrum Credit Union.
To become a member, join one of its nonprofit partner organizations, such as the Contra Costa County Historical Society. You’ll also need to deposit $25 into a primary savings account and maintain a $25 minimum balance.
Chevron also offers a second chance checking account called New Solutions for those who need help rebuilding their banking history.
11. Ascend Credit Union
Since its inception in 1951, Ascend Credit Union has offered a variety of products, like checking and savings accounts, a money market account, Christmas Club account, youth accounts, credit cards, and loans.
If you’re interested in these services, join The Nature Conservancy, Tennessee Chapter and you’ll be eligible automatically. Note that there is a one-time fee of $25.
12. Hope Credit Union
Hope Credit Union is a black-owned credit union that was organized in 1995 by the Anderson United Methodist Church in Mississippi. You can join if you pay a $10 membership fee and show a foreign passport, permanent resident card, or Matricula Consular. Plus, you may use an ITIN number instead of a Social Security number.
Hope Credit Union provides a number of personal bank accounts, business banking accounts, and transformational deposits. With its transformational deposits, you can participate in socially responsible investing.
13. Boeing Employees Credit Union
Boeing Employees Credit Union, or BECU, was established in 1935 for Boeing employees and currently caters to more than 1 million members. But despite its name, you don’t have to work at Boeing to join.
Its products and services are available to you if you become a member or donor to the KEXP, which is a nonprofit art organization or the Sea Hawkers Central Council. The most noteworthy benefit of joining is the first-time homebuyer grant in which you can receive $7,500 toward your down payment and closing costs.
14. Hiway Credit Union
Hiway Credit Union made its debut in 1931 to serve employees of the Minnesota Department of Transportation. It offers a free checking account with no monthly fee or minimum balance requirements, a free money market account with a $500 minimum deposit, credit cards, and loans.
You can qualify for a Hiway Federal Credit Union membership if you donate to the Minnesota Recreation and Park Foundation for $10 per year or the Association of the U.S. Army, which costs $40 for two years.
15. GreenState Credit Union
GreenState Credit Union was founded in 1938. It provides its members with personal accounts, business accounts, credit cards, loans insurance, wealth management services, and more.
GreenState was named one of the fastest growing credit unions in 2021. As long as you live or work in the state of Iowa, you can become a member and take advantage of its services without any issues.
16. Cascade Credit Union
Cascade Credit Union made its debut in 1952 to serve employees of the Cascade Division of the Great Northern Railway. Today, it’s open to many people and offers great perks like members-only sweepstakes, competitive rates, online banking tools, financial counseling, and group insurance benefits.
If you’d like to join, simply become a member of the Great Northern & Cascade Railway Association (GNCR) and pay an annual membership cost of $40. The credit union can help you fill out your application online or in-person at a local branch.
17. Wildfire Credit Union
Wildfire Credit Union began in 1937 as Saginaw Telephone Employees Credit Union, its original credit union name. Its first location was in the basement of the home of Hank Kosk, the credit union’s treasurer.
After some office upgrades, the credit union opened the doors to its current location on Bay Road in Saginaw and merged with Flint Telephone Employees Credit Union that same year. Today, Wildfire Credit Union offers several deposit accounts as well as personal banking and business banking services. You can join if you live, work, worship, or attend school in Michigan.
18. Nextmark Credit Union
Nextmark Credit Union made its debut in 1958. Its offerings include personal and business checking, home equity loans, personal loans, credit cards, gift cards, and more.
To join, you must live in a qualifying county in Virginia or make a donation to Herndon Elementary PTA, a Title I school.
19. Technology Credit Union
Technology Credit Union, or Tech CU, was established in 1960. It’s based in Silicon Valley and provides its members with no shortage of benefits. These include competitive rates, online banking, access to fee-free ATMs, free credit score monitoring, conference room space, and easy online appointment booking. To become a member, join Financial Fitness Association for only $8.
20. Veridian Credit Union
Veridian Credit Union was established in 1934. Most of its members are those who live or work in Iowa or certain counties of Nebraska. However, it’s open to anyone who is a registered user of Dwolla, a financial technology company. This means you can join as long as you sign up for a personal account at Dwolla.
You’ll also need to open a savings account and deposit at least $5. If you’re already a member of a credit union or bank but would like to switch to Veridian Credit Union, the switch kit may be helpful.
21. Harborstone Credit Union
Harborstone Credit Union’s roots date back to 1955, when it was known as McChord Federal Credit Union and served airmen on the McChord Air Force Base. In 1996, the credit union expanded its membership to anyone in the state of Washington and changed its name as a result.
As long as you live, work, or worship in Washington, you may join Harborstone Credit Union and enjoy a variety of financial products and digital tools.
22. NASA Federal Credit Union
NASA Federal Credit Union began in 1949 to serve NASA employees. Since then, it’s grown to more than 177,000 members. While the credit union is headquartered in Upper Marlboro, Massachusetts, there are 12 branches in Maryland, Virginia, and Washington, DC.
Its product lineup includes a simple checking account with no minimum opening deposit, a savings account with a great rate, and several CDs. You can also monitor your credit score and make deposits with the mobile app. If you don’t work for NASA, you can still join. Simply sign up for a one-year membership at the National Space Society (NSS).
Hanscom Federal Credit Union opened in 1953. The credit union has over 20 branches in and around Boston as well as one in McLean, Virginia. It offers fee-free checking accounts, savings accounts with rewards, credit cards, and loans.
To join, you’ll need to support one of its partner organizations, such as the Burlington Players, a volunteer theater group. In addition, you’ll be required to deposit $25 into a free primary savings account.
24. Pen Air Federal Credit Union
Pen Air Federal Credit Union was founded in 1936 to support civil service employees of Naval Air Station Pensacola. It has 16 locations in northwest Florida and southeast Alabama. You may be surprised to learn that you don’t have to be an active duty or retired military member to join.
You’ll be able to take advantage of Pen Air Federal Credit Union if you become a member of the Friends of the Navy-Marine Corps Relief Society and deposit a minimum of $25 into a savings account. As a member, you can enjoy the Pen Air Platinum Mastercard, Share Savings account with the Round It program, and more.
25. State Department Federal Credit Union
State Department Federal Credit Union was founded in 1935. To join, you can become a member of the American Consumer Council for $8. This is a non-profit organization with a focus on consumer education and financial literacy.
The State Department Credit Union offers a long list of products and services, including basic, advantage, and privilege checking, a money market account, share certificate accounts, individual retirement accounts (IRAs), credit cards, and loans.
26. United Nations Federal Credit Union
United Nations Credit Union made its debut in 1947. As long as you join the United Nations Association of the United States of America, you can become a member.
UNFCU has a vast product lineup that includes a checking account, membership savings account, credit cards, debit cards, and loans, like car loans and debt consolidation loans.
Other membership perks include loyalty rewards, credit card rewards, and the member referral program.
27. Premier Members Credit Union
Premier Members Credit Union was established in 1959 for members of the Boulder Valley School District. You’re eligible to join if you make a donation to Impact on Education, a charity in the Boulder Valley School District, and open an online savings account or youth savings account.
As a member, you can expect perks, such as high interest rates on checking accounts, no monthly service fee, no overdraft fees, and free overdraft protection. The credit union also offers an extensive network of branches and ATMs for your convenience.
28. SRI Federal Credit Union
SRI Federal Credit Union is headquartered in Menlo Park, California. It was founded in 1957 and offers membership to anyone who joins the Financial Fitness Association for $8 per year.
The credit union’s account offerings include a checking and savings account, money market account, IRA, health savings account, and youth, teen, and gradate accounts.
29. United States Senate Federal Credit Union
United States Senate Federal Credit Union has been around since 1935. Its mission is to “improve the financial wellness of members throughout all stages and circumstances of life.” Its products are similar to what most credit unions offer.
As a member, you can enjoy access to a number of checking and credit union savings accounts, mortgage loans, personal loans, auto loans, Visa debit cards, and business advisory services. To join, you’ll need to become a member of the U.S. Capitol Historical Society for $65.
30. Wings Financial Credit Union
Wings Financial Credit Union was founded in 1938 by seven employees from Northwest Airlines. To date, it serves more than 320,000 members with more than $7.5 billion in assets. You can join if you donate $5 to the Wings Financial Foundation, even if you don’t work in the aviation industry.
There are no fees on its basic banking accounts, including its checking and savings accounts, a money market account, and CDs. Its high yield savings and checking accounts offer competitive rates to help you grow your money.
31. Skyward Credit Union
Skyward Credit Union was chartered in 1941. It offers a share savings account with competitive rates, an aim higher checking account with no monthly fees or minimum balance requirements, affordable mortgage and home equity loans.
It also offers online banking, a variety of insurance products, and access to over 30,000 surcharge-free ATMs. Like most credit unions require membership, so does this one. To become a member, join the Kansas Aviation Museum.
32. San Diego County Credit Union
San Diego County Credit Union has been around since 1938 and has over 430,000 credit union members. It’s considered the largest locally owned financial intuition in San Diego.
As a member, you can enjoy a free checking account, secured and unsecured credit cards, a wide range of account options with no service fees, and access to over 30,000 ATMs without ATM fees. To join San Diego County Credit Union, become a member of the Financial Fitness Association.
33. Bellco Credit Union
Bellco Credit Union is a Denver-based credit union that opened its doors in 1936. You can join it even if you don’t live in Colorado as long as you donate at least $10 to the Bellco Foundation, pay a one-time $5 membership fee, and deposit at least $25 in a savings account.
Once you do, you’ll have access to several noteworthy products, like the Boost Interest Checking account, which offers a competitive interest rate, the Premier Money Market Account, and two, no-fee credit cards.
34. Bethpage Federal Credit Union
Bethpage Federal Credit Union was founded in 1941 and currently has over 30 branches across Long Island and New York City. It has a reputation for competitive rates on it money market accounts and certificates of deposit (CDs).
The credit union also offers three checking accounts, a few savings accounts, retirement planning services, IRAs, insurance, and more. You don’t have to live in New York to join if you open a $5 savings account. As a member, you may meet with credit union staff virtually and bank on the go with a handy mobile app.
35. First South Financial Credit Union
First South Financial Credit Union opened its doors in 1957 to serve those on the Millington base. Since then, it has become of the safest financial institutions in the U.S., as stated by independent rating agencies. While the credit union has locations throughout Tennessee and Mississippi, its online banking services make it a suitable option if you live elsewhere.
Like other credit unions, it offers a full suite of checking, savings, CDs, and IRA accounts. To join, become a member of the Courage Thru Cancer Association, which supports St. Jude Children’s Research Hospital.
36. Dow Credit Union
Dow Credit Union was founded in 1937 in Midland, Michigan. It provides numerous products, including checking and savings accounts, certificates of deposit (CDs), HSAs, deposit trust accounts, and loans.
Fortunately, you don’t have to work at Dow Chemical to take advantage of them. To join, make a $10 donation to the Dow Chemical Employees’ Credit Union Endowed Scholarship Fund.
37. Blue Federal Credit Union
Blue Federal Credit Union was chartered in 1951 as Warren Federal Credit Union. If you’re looking for a high-yield checking account, you’ll appreciate its Blue Extreme Checking Account with no minimum opening deposit or monthly service fees.
Other perks include a tiered membership rewards program and round-the-clock customer service. The easiest way to become a member is to donate $5 to the Blue Foundation and open a Membership Share Savings Account with $5.
38. Digital Federal Credit Union
Digital Federal Credit Union (DCU), based in Marlborough, Massachusetts, was established in 1979. Today, it is known for its comprehensive range of financial products that includes checking and savings accounts, auto loans, mortgages, personal loans, credit cards, and wealth management services.
Perhaps one of DCU’s standout features is its commitment to digital banking, offering robust online and mobile platforms that compete with larger, nationwide banks. This makes DCU a fitting choice for those who prefer online banking, no matter where they live.
Membership is open to those who are a part of participating organizations or live, work, worship, or attend school in eligible communities. If you don’t fit those criteria, you can still join by becoming a member of a participating nonprofit organization, such as Reach Out for Schools, which requires a nominal donation.
See also: Best Nationwide Credit Unions of 2023
Bottom Line
Not all credit unions are created equal. Some have strict membership criteria, while others are more flexible. Before you join a credit union (or several credit unions) on this list, be sure to consider numerous factors.
You’ll want to look at eligibility requirements, branch location, monthly maintenance fees, accounts offered, interest rates, mobile banking, digital banking, reputation, and customer service. Best of luck as you explore the best credit unions and search for the perfect credit union.
Frequently Asked Questions
Can civilians join Navy Federal Credit Union?
Yes, civilians can join the Navy Federal Credit Union (NFCU), the largest credit union in the U.S. However, this is limited to immediate family members of service members in all branches of the armed forces. This broad eligibility criteria is one of the reasons why NFCU has grown to be the largest credit union in the country.
Can anyone join American Airlines Credit Union?
No, not anyone can join the American Airlines Credit Union. Membership is limited to those who work in the air transportation industry, including airlines, airports, and related businesses, as well as their family members. While this broadens the scope beyond just American Airlines employees, it still doesn’t include everyone.
We all know that saving money is important, and asking yourself “how much money should I save?” can be a difficult question to answer when beginning. Being a personal finance expert, I am asked this question a lot.
Between saving for emergencies, retirement, vacations, etc. there are a lot of things to consider. And, knowing how much to save is something that many people don’t often talk about. When it does come up, it can seem like there is no straight answer.
I’ve talked a lot about savings on this blog, and in my post 56% Of Americans Have Less Than $10,000 Saved For Retirement, I stated that 56% of Americans have less than an average of $10,000 in retirement savings and 33% have no retirement savings at all. This is something incredibly important to address!
Other interesting statistics mentioned in this article include:
42% of millennials have not begun saving for retirement.
52% of Gen Xers have less than $10,000 in retirement savings.
About 30% of respondents age 55 and over have no retirement savings whatsoever.
Nearly 75% of Americans over 40 are behind on saving for retirement.
There are many reasons for why a person may not save money each month, which I discuss further in the article.
However, one of the biggest reasons I’ve noticed is that people don’t realize that they should be saving more – because they think they’re “invincible” (they think they don’t need to save at the moment, they think they’ll never leave their job, etc), because they truly do think that they are saving enough money, or because they are so overwhelmed by the idea of saving money that they just don’t save any money at all.
Really, all of these reasons get back to the question I began with, “how much money should I save?” If you find that you are asking that question and not getting any straight answers, I am here to help you figure that out today.
Articles related to “how much money should I save?”:
So, how much money should I save each month?
According to the U.S. Bureau of Economic Analysis, the personal savings rate has averaged around 5% in the past year, and averaged 8.33% from 1959 until 2016.
There are a lot of people that think saving between 1% and 5% of their income is enough to be on track for retirement.
Sadly, it’s unlikely that amount will be enough to retire.
While 5% is better than nothing, just one small emergency each year could easily and completely wipe out that savings.
Further, saving just 5% means it will take you a very long time to retire.
With just a 1% savings rate, it would take you 98.9 working years until you reach retirement.
A 5% savings rate means that it would take you 66 working years to retire.
A 20% savings rate means that it would take you 37 working years to retire.
A 50% savings rate means that it would take you 17 working years to retire.
A 75% savings rate means that it would take you 7 working years to retire.
So, by saving more of your money, you are likely to retire sooner. Makes sense, right?
Related content: Do You Know Your Net Worth?
Now, all of those statistics are dependant on how much you make, but for the average person, I recommend saving at least 20% of your income. That would still be around 37 years of working.
However, there is no perfect percentage.
If you have a high income, then you should probably save more of your income so that you aren’t just wastefully spending your money. For example, we save over 80% of our income each month after personal and business expenses.
On the other hand, if 20% just seems like a crazy high percentage for you to save, then just start somewhere, anywhere! Saving something is better than saving nothing (please head to the section below “Still think you can’t any save money?” for more information).
And, everyone has different financial goals. If you want to retire early, then you’ll most likely have to save more than 20% of your income.
Recommended reading: The 6 Steps To Take To Invest Your First Dollar – Yes, It’s Really This Easy!
Think about your goals when understanding “How much money should I save?”
One person’s answer to “how much money should I save?” will most likely be completely different from the next.
Due to that, your savings percentage goal can vary depending on your specific goals. Retirement calculators can be great and all, but you really need to make sure you are thinking about your own goals.
Remember though, it’s not always just about retirement. There are other things in your life that you may want to save for.
When asking yourself “how much money should I save?” you will want to think about your:
Short-term goals – What are you saving for that you may purchase in the next year? This could be a vacation, an event you want to attend, holiday gifts, etc.
Mid-term goals – Think of a goal that you want to reach in the next decade. This may include saving for a down payment on a house, buying a car, building up an emergency fund, etc.
Long-term goals -This will most likely be your retirement goal, paying off your mortgage completely, etc.
Yes, that’s a lot to think about. And, this is why I always recommend saving as much as you realistically can.
Pay yourself first.
To make reaching your savings goals easier, I recommend starting to pay yourself first.
If you are unfamiliar with the idea, it’s basically setting aside money in savings before you pay any other bills. I also know someone who pays themselves first by putting extra money towards their debt before paying any other bills.
Paying yourself first before you pay your monthly expenses may be a scary thought. No one wants to over withdraw from their checking account or be unable to pay their monthly bills.
However, your future is just as important too, so it is much better to think about saving money as a need instead of something that can be pushed aside. Or, you can look at it this way, saving money is a bill you pay to yourself.
Paying yourself first becomes the first thing you do with each paycheck – you don’t even pay your other bills first. When you turn savings into a budget line item, rather than just putting what’s leftover into savings, it really can help you save more money. Yes, it may be difficult at first, but you will get used to living on less money.
For this to become part of your answer to the question “how much money should I save?” you may have to do some cutbacks with your budget or find ways to make more money. But, by only having a limited amount of money to spend each month, you will find that you are more closely watching your spending.
This may allow you to really see what is a need and what is just a want.
Here are my tips so that you can pay yourself first:
Take a look at how much you are currently saving and spending each month. Start tracking your spending a little more closely and see how much of that is actually unneeded. Calculate how much money you should be saving each month and set that aside at the beginning of each month.
Make it automatic. To make it easier and to simplify your finances, you may want to autopay a certain amount of money for savings each month.
If you feel uncomfortable with paying yourself first, then you may want to find ways to cut your budget back or make more money.
Still think you can’t save any money?
Okay, so now you may be thinking “How much money should I save, if I don’t have much money?!”
Thinking about that recommended 20% savings number can be frustrating if you are already having a hard time paying your bills and/or living paycheck to paycheck.
However, I recommend saving as much money as you realistically can. This may be nowhere near 20% at first, heck, this might not even be 5%, but any little bit will help. If you are not able to save that much, just save something! Start with $25 a month if you have to – seriously, every little bit does help.
Even if it’s just $1 a day, set that amount aside and start saving it.
So, no matter how you are doing right now, just start with something, no matter how small. Then, work your way up until you are saving a percentage of your income that you are happy with.
Start small and work your way towards your savings goal. And, if you are currently paying off debt, keep in mind that it counts too! Just keep moving in a positive direction and keep getting closer and closer to reaching your financial goals.
Remember that 5% of your income most likely won’t be enough for the average person to retire, so you will want to continue to improve that percentage well into the future so that you will be able to retire one day.
I understand that some people have financial situations in which they may not be able to save as much money as they would like. Living paycheck to paycheck, being in medical debt, or having a major unexpected expense can wreck a person’s financial situation and their goals, and I understand that.
However, you will need to find a way out of that. To find a way out, you may want to find ways to cut your spending, make more money (learn ways to make extra money), and more. You will have to challenge yourself, and it may not be easy. However, it will all be worth it once you reach your financial goals!
By spending less money, you’ll decrease the amount of money you need for the future, including money for emergency funds, retirement, and more.
Just think about it: If you are currently living a frugal lifestyle, then you will be used to living on less in the future. This means that your saved retirement amount doesn’t need to be as large, which means it may be easier to reach that savings goal.
Also, if you start saving now, you can take advantage of compound interest, which I’ll talk about next.
Here are some great articles that I recommend reading that will help you learn how to save money and make extra money:
The power of compound interest.
Saving for retirement as soon as you can is a great thing, especially because of compound interest.
With compound interest, time is on your side- meaning you should start saving money as early as you can.
Compound interest is when your interest is earning interest. This can turn the amount of money you have saved into a much larger amount years later.
This is important to note because $100 today will not be worth $100 in the future if you just let it sit under a mattress or in a checking account. However, if you invest through your retirement account, then you can actually turn your $100 into something more. When you invest, your money is working for you and growing your savings.
For example: If you put $1,000 into a retirement account with an annual 8% return, 40 years later you will have $21,724. If you started with that same $1,000 and put an extra $1,000 in it for the next 40 years at an annual 8% return, that would then turn into $301,505. If you started with $10,000 and put an extra $10,000 in it for the next 40 years at an annual 8% return, that would grow into $3,015,055.
So, if you are wondering “How much money should I save for retirement?” you should also focus on the reasons for saving for retirement now, such as:
It can help make sure you aren’t working for the rest of your life.
You can retire sooner rather than later.
You can lead a good life well after you finish working.
Compound interest means the earlier you save the more you earn.
You won’t have to rely on your children or others in order to survive.
As you can see, learning how much money you should save, such as for retirement, is very important.
Side note: I recommend you check out Personal Capital if you are interested in gaining control of your financial situation. Personal Capital is similar to Mint.com, but much better. Personal Capital is free, and it allows you to aggregate your financial accounts so that you can easily see your whole financial situation, including investments.
So, what’s your answer for when a person asks “How much money should I save?” What are you currently saving for? What percentage of your income do you save?
The average person probably wants to learn how to get rich.
While many think figuring how to get rich may be impossible, I’m here to tell you that it isn’t. And no, you don’t need to win the lottery or become a professional athlete.
The meaning of wealth and being rich means something different to everyone. For some, it means having lots of money, for others it may mean having a positive net worth, and for others it may be to retire one day.
Whatever your definition of “rich” is, everyone has the potential to build and improve their financial situation.
If you want to be rich one day, then you’ll have to form good financial habits now, work hard, and reach outside of the norm.
Learning how to get rich won’t be easy – but what good things come easy anyways?
For many people, learning how to get rich may seem impossible and completely unattainable, but that’s simply not true.
Building wealth and learning how to get rich is about your mindset, and figuring out how to get rich now is better than waiting any longer.
Related posts about how to get rich:
Here’s how to get rich– for anyone and at any age.
Don’t wait until tomorrow to learn how to get rich.
Instead of thinking that you’re invincible and that you have all the time in the world to improve your finances, you should stop procrastinating and learn how to build your wealth now.
Many people push things off and/or spend their money carelessly because they think they can start tomorrow, start next month, and so on. However, for everyday that you push off improving your finances the further away and harder you’ll have to work towards your goal.
Stop wasting time and take control of your financial situation now.
Related tip: I recommend looking into Digit if you want to trick yourself into saving more money. Digit is a service that looks at your spending and transfers money to a savings account for you. Digit makes everything easy so that you can start saving money with very little effort.
Be better than average if you want to learn how to get rich.
If you want to build your wealth, whatever that might mean to you, then you’re going to have to go outside the norm, be better than the average, and do new things.
When learning how to get rich, you should always strive to do your best as sometimes “average” is not good enough for you to build wealth. Keep in mind that the average person is not the greatest with money, and many are wrecked with stress and hardship due to their unfortunate financial situation.
68% of people live paycheck to paycheck.
26% have no emergency savings.
The median amount saved for retirement is less than $60,000.
The average household has $7,283 in credit card debt.
The average student loan debt is $32,264.
To be better than average, you’ll have to work hard, learn how to manage your money better, and perhaps take some risks (such as starting a business or applying for your dream job) as well.
Give yourself great goals.
Those who set goals are much more likely to be successful than those who do not. Due to that, if you want to be rich, you’ll want to start setting goals for yourself.
Setting goals is important because without a goal, how do you know where you’re heading? Goals can keep you motivated and striving for your best.
When building your wealth, you should always make sure that any goal you set is SMART.
A SMART goal is:
Specific – What is your goal? Is it specific enough or is it too broad? What needs to be done for you to achieve your goal? Why do you want to reach your goal?
Measurable – How can you measure your progress? How will you know if you’re on track?
Attainable – Is this a goal that can be achieved?
Realistic/relevant – Can you achieve your goal? Is the goal worth it?
Time – What’s your time frame for reaching your goal?
To reach your financial goals and learn how to get rich, you’ll want to:
Write down your goals and objectives.
Create a plan to reach your life goals.
Break your goal apart into smaller goals.
Keep track of your goal setting progress and make changes (if needed).
Find small ways to stick to your goal.
Find ways to motivate yourself when setting goals.
Make reaching your goal a friendly competition.
Read further at The Best Way To Set Goals And Reach Success in 2017.
Create a realistic budget.
To learn how to get rich, you’ll want to create a budget. Yes, even the rich have budgets!
The average person has a lot of financial stress and may be dealing with student loans, credit card debt, a mortgage, car loans, and sometimes even other forms of debt.
However, not many people have a budget. In fact, more than 60% of households in the U.S. do not have a budget.
Budgets are great, because they keep you mindful of your income and expenses. With a monthly budget, you will know exactly how much you can spend in a category each month, how much you have to work with, what spending areas need to be evaluated, among other things.
Remember, even those with high incomes have a budget. The rich stay rich because they have learned how to manage their money better than the average person, which includes being aware of your spending and saving.
When creating your budget, be sure to include all of your income and expenses.
Here are some expenses you may want to include when creating a budget, but don’t forget any expenses you have that aren’t listed:
Home – House payment, rent, maintenance, utilities, insurance, property taxes, etc.
Car – Monthly car payment, gas, maintenance, insurance, license plate fees, and so on.
Television, cable, Netflix, Hulu, etc.
Cell phone.
Internet.
Food – Groceries, restaurant spending, snacks, etc.
Clothing.
Entertainment – Entertainment can include many things, such as going to the movies, going out for drinks, concert tickets, sports, and so on.
Charity – If you regularly donate to charity, then this should be an area you budget for.
Savings funds – This can be for your retirement fund, wedding, travel, etc.
Taxes – If you are self-employed, then taxes may consist of a large part of your budget.
Health insurance.
Miscellaneous – Pet expenses, fees, childcare, school, gifts, etc.
You can get a free budget printable by signing up below.
Realize that a good life can be affordable.
As you all know, I really dislike the myth that people who save money are boring. That’s not true at all.
I believe that you can balance living a good life along with saving a comfortable amount of money.
There are plenty of ways to live an awesome life while saving money. Yes, you can still see your friends, have fun with your loved ones, go on vacations, and more, all while staying on a realistic budget.
Here’s a list of some great early retirees who are leading great lives. I definitely recommend reading about them:
If you want to learn how to get rich, then learning how to be happy with yourself and figuring out affordable ways to enjoy life are key.
Related: How To Become Rich – It’s More Than Millions In The Bank
Pay off your debt if you want to learn how to get rich.
If you want to learn how to get rich, then you’ll most likely want to figure out how to eliminate any debt that is preventing you from reaching your financial goals. For the average person, this probably means any high interest debt, any debt that’s causing you stress, and so on.
Paying off your debt can lessen your stress levels, allow you to have more money to put towards something else (such as retirement), stop paying interest fees, and more.
The first step to eliminating debt is to realize why you have debt in the first place. I believe that if you don’t understand where your problem with debt stems from, then it would be hard to make a positive change.
Yes, it is great to just start attacking your debt, but you also don’t want to fall into the same cycle of going into debt over and over again.
After you realize why you are in debt (or why you keep going back into debt), the next step is to figure out how you will eliminate it. There are many different ways to attack your debt, and I prefer a mixture of everything.
To pay off your debt and learn how to get rich, you should:
Quit adding more debt to your life. You may want to cancel or freeze your credit card, think harder before your next purchase, and avoid spending temptations like the mall.
Be realistic with your income and spending. If you have debt, then you either have an income or spending problem. You may need to start earning more money and/or start spending less if you want to learn how to become wealthy.
Decrease your spending and expenses. Depending on how quickly you want to get rid of your debt, there are different things that you may want to cut out. You could cut out Starbucks (I know, I know), lower your restaurant spending, find a cheaper way to workout, sell your car for something cheaper/more affordable, cook from scratch, and so on.
Make more money. The extra money that you earn can be put towards your debt to help you pay it off more quickly.
Pay more than the minimum. If you have debt, you should always be paying more than the minimum so that you can lower the amount you are paying towards interest.
Put little amounts toward your debt. For example, whenever you get an extra $25 (such as by selling something), then you should just throw that extra money (that you won’t even miss!) towards your debt.
Related: How To Take A 10 Day Trip To Hawaii For $22.40 – Flights & Accommodations Included
Start investing as one of the ways to get rich.
One of the best ways to figure out how to get rich is to start investing. After all, you need to have your money work for you!
The sooner you start saving, the more it becomes a habit and the easier it becomes. By investing money now, you will learn good investing habits that will help you well into the future.
I always say that the first thing you need to do if you want to start investing is to just jump in. However, what if you don’t even know how to start investing?
If you are like many out there, you may not know how to start investing your money.
Investing your money can be a scary, stressful, and overwhelming topic to tackle. You want to invest so that you can:
Retire one day.
Prepare for unexpected events in the future.
Allow your money to grow over time.
Learn how to get rich.
Remember, time is on your side, and due to the powerful impact of compound interest it can change your life. This means the sooner you invest, the more you will earn.
Compound interest is when your interest is earning interest. This can turn the amount of money you have saved into a much larger amount years later.
This is important to note because $100 today will not be worth $100 in the future if you just let it sit under a mattress or in a checking account. However, if you invest, then you can actually turn your $100 into something more. When you invest, your money is working for you and hopefully earning you income.
For example: If you put $1,000 into a retirement account that has an annual 8% return, 40 years later that would turn into $21,724. If you started with that same $1,000 and put an extra $1,000 in it for the next 40 years at an annual 8% return, that would then turn into $301,505. If you started with $10,000 and put an extra $10,000 in it for the next 40 years at an annual 8% return, that would then turn into $3,015,055.
A great article that explains the power of compound interest is Mr. Money Mustache’s The Shockingly Simple Math Behind Early Retirement.
Here are the easy steps to take so that you can start investing your money:
Start saving your money. In order to invest your money, you need to start setting aside money specifically for it. The amount of money you save for investing is entirely up to you, but in general, the more the better.
Do your research. Before you start dumping your money into the stock market and other investments, it’s a good idea to know what you’re putting your money towards. Reading about various investment-related tips and research will help you become more informed about your investing decisions, which will then help you make better decisions well into the future.
Find an online brokerage or someone to manage your investments. There are two main ways to invest your money. You can either invest your money yourself through a brokerage or you can find someone to manage your investment portfolio for you. You will need to take part in one of these options to actually start investing your money. Personally, I like to do everything myself through Vanguard.
Decide how you will invest. Now that you’ve opened an investment account, you will want to decide where you will put your investments. How you invest depends on your risk tolerance, the time period for which you are investing (when will you retire?), and more. Generally, the sooner you need your funds the less risk you will take on, whereas the longer your time period is, then the more risk you may be willing to take on.
Track your investment portfolio. The next step when learning how to get rich by investing is to regularly track the things you have invested in. This is important because you may eventually have to change what you are invested in, put more money towards your investments, and so on.
Continue the steps above over and over again. To invest for years and years to come, you will want to continue the steps above over and over again. Now that you know the steps it takes to invest your money, it only gets easier.
Related tip: I recommend using Motif Investing if you are looking to invest your money. Motif Investing allows individuals to invest affordably. This approachable investing platform makes it easy to buy a portfolio of up to 30 stocks, bonds or ETFs for just $9.95 total commission.
Start making more money.
Figuring out how to get rich usually means that you’ll have to find ways to make more money than you currently do.
On Making Sense of Cents, I talk a lot about how to make extra income because I believe that earning extra income can completely change your life. You can stop living paycheck to paycheck, you can pay off your debt, and more- all by learning about the many different ways to make money.
Trust me when I say that making more money is important. I was able to pay off $38,000 in student loans within 7 months, I was able to leave my day job in order to pursue my passion, travel full-time, and more!
The great thing about finding ways to make more money is that your income potential is unlimited. There’s no cap on how much money you can make- it all depends on what you decide to do and how much time you plan on devoting to it.
Making more money can change your life in great ways, such as:
You can pay off your debt.
Save for big purchases, such as a vacation.
Stop living paycheck to paycheck.
Reach retirement sooner.
Become more diversified with your income sources.
Whether you have just one free hour a day or if you are willing to work 40 to 50 hours a week on top of your full-time job, there are many options when it comes to earning more money. Finding ways to make more money will only help you as you learn how to become rich.
Some ways to make more money include:
Find a part-time job.
Make money online such as creating a blog, becoming a virtual assistant, etc.
Become an Uber or Lyft driver – Spending your spare time driving others around can be a great money maker. Read more about this in my post How To Become An Uber Or Lyft Driver. Click here to join Uber and start making money ASAP.
Maintain and clean yards. You can make money by mowing lawns, killing/removing weeds, cleaning gutters, raking leaves, and so on.
Answer surveys. Survey companies I recommend include Swagbucks, Survey Junkie, Clear Voice Surveys, VIP Voice, Pinecone Research, Opinion Outpost, Survey Spot, and Harris Poll Online. They’re free to join and free to use! You get paid to answer surveys and to test products. It’s best to sign up for as many as you can as that way you can receive the most surveys and make the most money.
Move furniture and find jobs on Craigslist. Movers can earn a broad range when it comes to hourly pay, but it’s usually somewhere around $50 an hour if you run your own business.
If you love animals, then you may want to look into how to make extra money by walking dogs or pet sitting. With this side hustle, you may be going over to your client’s home to check in a few times a day, you may be staying at their house, or the animals may be staying with you. Rover is a great company to sign up with in order to become a dog walker and pet sitter. Learn more about this at Rover – A Great Way To Make Money And Play With Animals.
Babysit and/or nanny children.
Sell your stuff.
Rent a spare room in your home to someone else.
As you can see, the list is endless when it comes to making more money.
Related posts on how to make extra money:
Diversify your income streams to learn how to be rich.
One thing that separates the rich from those who aren’t is that the rich and successful tend to have many different forms of income streams.
They may have a day job, a business, rental properties, dividend income, and more. This allows them to bring in more money.
They also do this because the rich know that one source of income may not last forever, and they are also able to lessen their risk by having multiple income streams.
So, if you want to learn how to get rich, then you may want to add more income streams to your life.
If you ever feel too reliant on one source of income, then you know how important this is. Maybe you are afraid that one day you will lose your job or that something will happen to your main source of income.
If you work towards building up multiple income streams and diversifying your income, then you won’t have to worry as much if something happens to one of your income streams.
By diversifying your income with multiple income streams you will have a backup plan, you may be able to retire easier, you will learn how to get rich, and so on.
Note: I recommend that you check out Personal Capital (a free service) if you are interested in gaining control of your financial situation. Personal Capital is very similar to Mint.com, but 100 times better as it allows you to gain control of your investment and retirement accounts, whereas Mint.com does not. Personal Capital allows you to aggregate your financial accounts so that you can easily see your financial situation, your cash flow, detailed graphs, and more. You can connect accounts such as your mortgage, bank accounts, credit card accounts, investment accounts, retirement accounts, and more, and it’s FREE.
Even the rich find ways to save money.
Finding ways to save more money may allow you to pay off your debt a little faster, improve your financial habits, help you reach your dream sooner, and more.
And yes, even the rich find ways to save money.
Sure, there are stories about rich people who spend their money like crazy and end up in bankruptcy. But surprisingly, the average millionaire is frugal, and they know how to manage their money well.
Don’t believe me? Here are some examples of millionaires and billionaires who still find ways to save money:
Warren Buffett lives in a house that he bought in 1958 for around $30,000.
Mark Zuckerberg drives an Acura.
John Caudwell (worth $2.7 billion) rides his bike 14 miles to work every day and even cuts his own hair.
Jim C. Walton (son of Walmart founder) drives an old truck with no air conditioning.
Another interesting statistic is that the average couponer is someone who earns over $100,000 a year. Surprisingly, those who earn less than $100,000 a year rarely use coupons compared to those with high incomes!
By finding ways to save money, you’ll be able to keep more of your money, learn how to get rich, add more to your investments, and so on. You worked hard for your money, so you may as well find ways to keep more of it!
Find ways to save money at 30+ Ways To Save Money Each Month.
Stop trying to impress others.
When was the last time you bought something that was mainly purchased to impress someone else?
Sadly, this is something that the average person does quite often.
If you want to start building wealth and understand how to get rich, then you’ll want to stop trying to impress others and start living your own life.
The rich tend to live below their means. Yes, many of them still spend money extravagantly, but many aren’t living paycheck to paycheck in order to do so. Many millionaires buy items used, they drive “normal” cars like Toyotas, and they aren’t buying things with the sole purpose of impressing others.
This is drastically different from those who aren’t rich.
Many people try to keep up with others and fall for lifestyle inflation, which can prevent a person from being a good money manager.
When trying to keep up with the Joneses, you might spend money you do not have. You might put expenses on credit cards so that you can (in a pretend world) “afford” things. You might buy things that you do not care about. The problems can go on and on.
Instead, you should focus on what you want and need. This will help you to save more money, be more realistic with your income and spending, and to build wealth.
Do you want to learn how to get rich? What does “rich” mean to you?
When I was considering leaving my full-time job, I had some concerns. My main concern? Health insurance. And it wasn’t just me. Since my husband didn’t have health insurance coverage through his job, he had been covered under my policy for years. Plus, we were going to be adding kids to our family, so we needed to think about them too.
First, we took care of my husband’s needs. About a year ago, he started looking for a private health insurance plan — and since he is a healthy guy, he found an inexpensive one rather easily. And once we adopted the kids, they could also go on his plan with no problems.
So that left me. If I quit my job, I had a few options: 1. Find my own private health insurance plan 2. Go without insurance 3. COBRA 4. Find a non-insurance alternative.
A history of cancer, although it was a very minor case, eliminated finding my own private health insurance plan…at least for 2013. The Affordable Care Act would have eliminated that, of course, but not until 2014. Going without insurance seemed like a crazy choice, especially since medical bills are the number one cause of bankruptcy. For approximately $1,000 per month, I also could have gone on COBRA. I strongly considered using COBRA as a “bridge” to help me make it to the day when my preexisting condition would be covered. However, the last option, finding a non-insurance alternative, was the one I chose. Here is why, how it works, and what I think of it so far.
Although I do not have health insurance, what I do have is an eligible option under the Affordable Care Act. It’s a medical cost-sharing plan that is available to Christians who follow certain guidelines including moderate use of alcohol, and no tobacco or illegal drug use. Although I was unable to find similar options available to people who weren’t Christians, I think creating something like this would be amazing. Like, the vegetarian medical-cost-sharing plan, or the Paleo cost-sharing plan, or basically any overall healthy group. But I digress.
How It Works
When I signed up, I had to choose a level which determined the amount of money that I pay each month. The highest level requires the member to pay $500 per incident. An incident could include surgery, a broken bone, or pregnancy. For instance, if I needed to have my appendix removed, I would be responsible for the first $500 of all doctor/hospital/lab bills, but that’s it. On the other hand, if I have an annual physical that costs $400 with associated labs and testing, I would pay for all of it because I didn’t exceed $500 per incident. Ditto for the next incident. The other levels are less expensive, but require more member financial responsibility.
So each month, I send in my voluntary gift amount (not called a premium since this is not health insurance). This money gets sent to an escrow account, which is then distributed to other members, according to their eligible medical expenses. Certain medical expenses are not eligible, including more recent preexisting conditions. Each month, I get a newsletter that lists members who have ineligible expenses. If I want to, I can send extra money to be used for their expenses.
I’ll be honest: After over a decade of having regular health insurance, this felt like a scary option. But I have seen it work. As I have mentioned several times, my father had terminal cancer years ago. He had multiple surgeries, chemotherapy, radiation therapy, visits to the Mayo Clinic, and many other tests. And he had the same medical-cost-sharing plan as well. His bills were paid, so I knew the plan worked for him. I just hoped that it would work for me.
What I Think so Far
Wouldn’t you know, I had an incident about 10 weeks after signing up. I have paid almost $1,000 in bills so far with more to come, but I have submitted all my itemized bills to the organization, and I am waiting to be reimbursed for all my expenses, minus the first $500. (Just FYI, they do not recommend personally paying bills that are over $1,000. Instead, they recommend that these bills are submitted directly to the organization.) Additionally, I was not required to pay more than $500, but it can take 60 to 90 days for bills to be paid. Since we had the money in savings, I preferred to pay the bills and wait for reimbursements. But that’s just me.)
Another marked difference is my role in my health care now. I didn’t bother to shop around for my medical care before, because no matter which hospital or doctor I chose, I incurred the same costs. But now, I shop around. For instance, when I needed some lab testing, I could have chosen to go to my usual hospital lab or I could have gone to an independent lab, which was half the cost. I chose the independent lab.
Since I am officially a self-pay patient, I have also asked all my providers for discounts. Every time (except once), I did get a discount off my bill, all the way up to 20 percent off. I thought it would be awkward, since I hate negotiating, but it hasn’t been a big deal at all. I just simply say, “Do you offer discounts for self-pay patients?” If they do, super. If not, I deal with it. I also don’t feel bad about it, because insurance companies don’t pay the full price either. In fact, my doctor’s office is small and doesn’t have a standard discount for self-pay patients, so they bill me at the Blue Cross/Blue Shield contract rates.
We were notified that my husband’s and children’s insurance costs are going to double effective January 1, 2014, so I am also considering signing them up too. Our monthly costs, should all of us be on this plan, would be about half of what it would be otherwise. Other than financial benefits, I feel like I am more involved in my health care, and it hasn’t felt more complicated…yet. And this probably sounds really idiotic (like, why wouldn’t I have done this anyway?), but since I am on the hook for more of my costs, I am trying to be more healthful in general so my costs stay down over time.
If interested, here are some medical-cost-sharing websites for further research:
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How many times have you thought about how much FI would it take to retire?
It’s a question that can be frustrating, especially since the answer is different for everyone.
What if there was an easy way to calculate your personal FI number and find out what kind of portfolio you need based on your spending habits? That’s where this handy calculator comes in!
Calculating your FI number is not as difficult as it sounds.
This is an important personal finance number to know.
If you desire to do something else or are just looking forward to retirement, you need to know how much money you need!
What is FI number?
FI number is the amount of money needed to retire.
It can be calculated using your salary, interest rate, and the time period in which you need to save for retirement.
The 4% figure is a reasonable place to start. The 4% rule is a conservative estimate, with the expectation that Social Security will play a larger role in retirement income.
Why Choose Financial independence?
Financial Independence, or “FI”, is a term used to describe the state of not needing to work for a living because your passive income from investments or savings can cover your living expenses.
It doesn’t mean you have to stop working altogether, it just means you’re no longer tied down by the need to earn a certain amount of money each month.
FI is an attractive proposition for many people because it allows them the freedom and flexibility to pursue their passions or hobbies without having to worry about financial constraints. And if you have money saved up, you can live comfortably off your savings or investments!
How to calculate your FI number?
There are a few different ways to calculate your FI number. The easiest way is to use an online calculator. This will give you a ballpark estimate of what you need to save in order to achieve financial independence.
Option #1 – Using Yearly Spending
One way to calculate your FI number is by multiplying your annual spending by 25. This will give you the amount you need in savings to have 25 times your annual spending available each year without having to touch the principal.
FI Number = yearly spending * 25
For example, if you spend $50000 a year, your FI number would be $1,250,000.
Option #2 – Using a Safe Withdrawal Rate of 4%
Another way to calculate your FI number is by using the safe withdrawal rate of 4%. In fact, many studies believe that 4% is the too old way of thinking and 3.3% is a better safe withdrawal rate (SWR).
You can calculate either way. If you prefer to pull more money out at retirement, then stick with 4%.
FI Number = yearly spending / Safe Withdrawal Rate
For example, if you spend $50000 a year and choose a 4% Safe withdrawal rate, your FI number would be $1,250,000.
Using a 3% safe withdrawal rate, your FI number would be $1,666,666.
The Financial Independence Formula
Do you know your FI number?
It’s a question people are often too embarrassed to ask, but if you don’t have an idea of what it is or where it comes from, you might be spending too much of your money.
Let’s start with the basics and work our way up to where we are today in terms of financial independence!
Calculate Your Spending
In order to calculate your spending, you need to know how much money you spend in a year. To do this, simply multiply your monthly spending by 12. This will give you an estimate of how much money you spend on an annual basis.
It’s important to have a detailed zero based budget before calculating your Financial Independence Formula. This way, you can be sure that you are including all of your regular expenses (and irregular expenses) in your calculations.
The FI Formula is based on conservative retirement calculations, so it’s important to include all of your regular expenses in the formula. The more accurate your figures are, the better idea you’ll have of how much money you’ll need for retirement.
Find Your FI Number
In order to achieve financial independence, you need to find your FI number.
This is determined by two factors: spending and withdrawal rate. The safe withdrawal rate (SWR) determines how much money you are able to withdraw each year without running out of savings in your lifetime. You divide your current spending by SWR to find out how much wealth you need in order to reach a certain financial target.
FI Number = yearly spending / Safe Withdrawal Rate
Everyone will have different FI numbs.
Determine Years to Financial Independence
The Financial Independence Formula may help estimate how much time it will take to reach financial independence. The formula is only a rough estimate, and you must adjust it as needed for more accurate calculations for your own savings plan.
The Financial Independence Formula factors in how much you need to save each year to become financially independent.
The goal of the Financial Independence Formula is to achieve financial independence before the typical retirement age of 45.
Years to FI = (FI Number – Amount Already Saved) / Yearly Saving
Using the example above, we calculated your FI number to be $1.25 million. You have already saved $450,000 and currently saving $25000 a year.
32 Years to FI = (1250000 – 450000) / 25000
However, if you increase your savings rate to $80000, then
10 Years to FI = (1250000 – 450000) / 80000
As you can tell, the more you are able to save and invest, the quicker you will reach FI.
For the amount already saved, you need to use the amount saved in retirement plans as well as any taxable accounts that will fund your lifestyle.
A commonly asked question is… should I include my house value? Honestly, the answer is no – unless part of your FI plan includes selling your house and moving to a lower cost of living area. Then, you would use the difference of your appreciated house value minus the cost of a cheaper home.
How to FI – Create a Plan
One of the most important aspects of actually achieving financial independence is to create an action plan.
Without action, you will be spinning on the same cycle over and over.
So, take an hour and start making your plan.
Step #1 – Figure out Numbers
The first step is figuring out your FI number and how many years away you can be.
There are many ways to make variations on finding your FI number. So, make sure you take into account how many years it will take for you to reach financial independence at your current savings rate.
This is the most important step!
Step #2 – Pick a Realistic Date
This is when most people get motivated when they pick a realistic date to retire early.
Every single decision you make will take you one step closer to your goal.
You are working backward from your “selected” date.
Step #3 – Take Action to Enjoy Life
The hardest step for actually making the decision to FI is to take action.
There are so many factors going into what you need to do once your know your FI number.
You can’t just sit back and do nothing once you know your FI number. You have to follow the steps below on saving and investing to reach financial independence.
For many people, this is choosing to live a frugal green lifestyle while saving money.
How to FI – Saving to Achieve Financial Independence
The FI Number Calculator is a simple tool that helps you calculate how much it will take to reach financial independence when investing in the stock market and using your savings rate as well.
But there are certain steps you must take to be able to save more money to jumpstart your path to financial independence. While many of our money saving challenges will help you, you need to find ways to save more money.
Step #1: Pay Off Debt
When you’re working to achieve Financial Independence, it’s important to address your debt. Paying off debt will help you achieve financial independence faster.
There are two types of debt that are especially important to pay off:
Credit card debt
Student loan debt
Credit card companies have high interest rates, so it’s important to consolidate your credit card debt by using Tally or an equivalent service. This can help you find a lower monthly payment and reduce the amount of time it takes to pay off your debt.
Before seeking to consolidate your credit card debt, make a plan for how you’ll avoid future use of this type of loan!
Debt is a cash flow drain while pursuing Financial Independence.
Step #2: Reduce Expenses
There are many ways to reduce expenses and achieve financial independence faster.
One potential area for savings is housing, which can be achieved through refinancing, house hacking, or downsizing.
Other options include trading in your new car for a beater car, scaling back on eating out or cutting back on your streaming services.
Typically those who budget consistently have an easier time reducing their expenses. Using a budget binder will help you find ways to reduce your expenses.
Step #3: Boost your income
This is probably the most important step to be able to increase your saving percentage significantly!
There are many ways to boost your income and save more money.
For example:
Find ways to increase your income from your 9-5 job.
Develop skills or get promoted to earn a better job with higher pay.
Side hustling can help you earn a decent income every month.
Find passive income streams as ways to start earning more money without any effort on your part.
Sell your old stuff on websites like eBay or Amazon for some quick cash infusion into your savings account.
Finding ways to make money fast is important during your FI journey.
You must search for additional sources of income, as they can help you save more and invest more in the future.
Step #4: Invest Money
It’s important to invest money in order to grow your wealth. You can do this automatically by investing through most online brokers.
This way, you’ll avoid making any rash decisions based on fear or greed. Investing consistently is a great way to get an average of 8-12% returns on your investments.
The idea is to save as much as possible and invest in assets that provide a high return on investment. This could include buying stocks, real estate, or other investments that offer long-term stability and growth potential.
Learn how to invest $100 to make $1000 a day.
How to FI – Investing to Reach Financial Independence
Now is a good time to start investing for financial independence.
When you’re ready to invest, it’s important to make sure the investment risk matches what you can handle. A portfolio must match your risk tolerance and long-term goals if you want to achieve financial independence.
We will cover various options on how to use investing to help you reach FI sooner.
Step#1: Make Investments Automatic
When you invest your money automatically, you don’t have to think about it and you can take advantage of dollar-cost averaging.
This means that over time, you’ll get a better price for your investments since you’re buying them in small batches instead of all at once.
In layman’s terms, that means investing a certain amount of money each month.
Step #2: Choose an Index Portfolio
Creating a lazy index portfolio is one of the best ways to invest your money.
This type of portfolio is made up of low-cost index funds or ETFs, which means that you don’t have to worry about timing the market or trying to pick stocks that will outperform the rest.
All you need to do is hold on for the long term and let the market do its thing – in good times and bad.
Step #3: Track Your Progress
As you save and invest your money, it’s important to track your progress so that you can see how well you’re doing and whether or not you’re on track to reach Financial Independence.
This can be done easily by creating a budget and tracking your net worth, both of which will give you great insight into where you are with your finances.
Also, track your liquid net worth separately.
Seeing this progress in black and white is often motivating enough to encourage people to keep saving and investing!
Empower is a comprehensive suite of financial tools that offers a FREE way to track your investment and cash accounts. You can connect all of your accounts so you can see an overview of all of your finances in one place, and the best part is that it’s free! Check out my Empower Review.
Empower Personal Wealth, LLC (“EPW”) compensates Money Bliss for new leads. Money Bliss is not an investment client of Personal Capital Advisors Corporation or Empower Advisory Group, LLC.
FI Number Calculator
The Financial Independence Number Calculator uses a range of variables to calculate the length of time it would take to save for FI. This information can be helpful in developing a savings plan that is tailored specifically to your individual needs.
Here is a simple FI number calculator.
As you can imagine, there are many different scenarios for finding your FI number.
For starters, get a ballpark range and amount you need to save each year to reach your goal. As you get closer to actually, hitting that switch and becoming fully financially independent, then you can refine your FI number.
Remember, while this formula provides a ballpark estimate, more precise results are possible by using a financial independence calculator such as Networthify’s model.
Saving for Retirement or More Savings to Quit work?
If you have some money saved already, the time to reach FI will be shorter than if you are starting from zero. Saving at a high rate is important to reach FI in the shortest time possible; saving at a lower rate or not saving anything makes reaching FI impossible.
Financial Independence is reached by saving a certain amount each year.
This number can vary depending on your unique circumstances, such as income and expenses.
There are a variety of reasons people are pursuing FI – more than likely it is because I hate my job or you want to spend your time doing something else.
The FI Number formula is just a starting point: remember that there are many other variables that could impact your individual savings plans, such as debt load, income, and monthly spending habits.
While using this formula can provide helpful insight into when you might achieve financial independence, it’s important to remember that there is no one-size-fits-all answer.
Every person’s situation is different, so it’s important to tailor your savings plan to your own needs and goals.
Know someone else that needs this, too? Then, please share!!
Is love enough for a healthy and happy relationship, especially when it comes to financial troubles? What if your partner was hiding a secret account or was lying about their spending? Are those issues you could work past?
Unfortunately, negative issues with money and relationships are incredibly common. I actually receive lots and lots of emails from readers who are struggling with some of these exact issues. Hardly a day goes by when I don’t get a question or comment from a reader who has concerns about the bad spending or savings habits of their partner.
Here are a few of the situations I’ve been asked about:
My partner earns $50,000 a year and wants to buy a $900,000 house, and we have NO savings. How do I explain why this won’t work?
My partner has the mistaken idea that if he has a coupon for Best Buy, Bed Bath and Beyond, etc. that he must absolutely buy something because he’s “losing money if I don’t use the coupon.” He is a hoarder and spends all of his money on stuff that he will never use. How do I help him work past his issues before it’s too late for us?
My partner spends over $1,000 a month on entertainment but we have a lot of debt. How should I approach them about it?
My partner is hiding her spending from me and I know it’s happening. How do we work through this?
My partner isn’t trying to find a job but we desperately need the money. What should we do?
If these situations sound familiar, you’re not alone. In fact, 35% of Americans named money as the number one thing causing friction in their marriage. CNBC reported on a money and relationships study done by SunTrust Bank, and here are a few more findings:
In 2 out of every 5 couples, someone lies about money.
31% said that they have a secret credit card or bank account.
75% said that financial deception has hurt their marriage.
It’s no surprise that money issues are one of the leading causes of divorce.
And, according to a recent story on NPR, even couples who managed their money well together in the beginning can still struggle with financial infidelity. This is especially true if one partner earns significantly more than the other, if one spouse is laid off, etc.
Related content to money and relationships:
Now, if you’re in a relationship with someone whose financial beliefs and practices oppose your own, does that mean you’re doomed and should end it all?
Not necessarily.
There are ways you can work towards resolving your financial differences and improving the behaviors that affect your money and relationships. Before calling it quits due to financial stress, you should:
Be honest and stop keeping money secrets from your partner.
Stop ignoring the problem.
Make a budget and start following it.
Make money conversations a priority, even if they have been difficult in the past.
Me and my husband have been together for over 12 years, and we are always trying to work at our financial situation as a team. We’ve had a lot of major changes in the past few years, like selling our house and moving onto an RV and now sailboat, and because each of these changes had a lot to do with money, we’ve had to share a lot of our feelings with one another.
And, every couple is going to handle money and relationships a little differently. We all have different spending habits, and in a marriage it’s important to come together to see how your behaviors affect your shared life.
Working together is key for a happy relationship, especially when you want to meet your financial goals.
If your relationship is struggling because of financial differences, here are some steps that you may want to take.
Here is my advice for handling money and relationships
Have regular money check ins.
A relationship that has regular money talks and budget meetings is more likely to be financially successful and happier than a relationship that doesn’t. That’s because regularly communicating about money is an important step for healthy relationships.
Being open about your money situation can help prevent any surprises, it will ensure that both people in the relationship are aware of what’s going on, and so on.
Here are some of the ways for these check ins to help you with your marriage and finances:
You can work together and succeed.If you are both putting effort towards your financial goals, you can tackle them as a team and are much more likely to have a positive outcome. You can motivate one another, troubleshoot together, and brainstorm for ways to work towards your goals.
Knowing your financial situation will help you keep a budget. Understanding your financial situation means you can create and keep a budget that works for the both of you. You will know more about the amount of money you are spending, whether you are living paycheck to paycheck, and more.
Being aware may prevent everything from falling on one person. Both you and your partner should be aware of your financial situation. It’s not fair for one person to manage it all, and you would be in for a rude awakening if something were to happen to that person. You both should know how much money you make, how much debt you have, when bills need to be paid, etc.
Being involved can help you with your family’s goals.It would be quite difficult for a person to work towards their family’s financial goals if they weren’t aware of their financial situation. Being involved will keep everyone motivated and working in the same direction.
Regular money talks can lead to less fighting. When you are open about money in your relationship, you are less likely to have financial surprises and money fights. This is because conducting regular money talks and budget meetings means you will both be aware of what’s going on.
Recommended reading: Family Budget Meetings – Yes, You Need To Have Them
Be open about money.
Talking about money is seen as taboo, even among married couples. But, according to money and relationship studies reported by Policy Genius, nearly 30% of couples don’t know each other’s salaries.
I have personally met spouses who had no idea what their monthly mortgage payment was, how much student loan debt they had, and so on and so on. For some reason, it is the “norm” for one spouse to be completely clueless about their financial situation, while the other spouse handles the finances. However, this is definitely something that should change.
To become better with this money and relationships issues, you and your partner should sit down on a regular basis, like once and week or once a month, and be honest about where you are currently at. You could even use this time to pay your bills together, discuss future purchases, and more.
But, to make the most out of these money meetings you will have to go in with an open mind and be willing to share where you are at. You money meetings should include:
Your financial goals, money values, and more.
How the two of you are doing financially.
What changes may need to be made.
Any financial problems, and so on.
The key here is that both of you are up-to-date on what is going on with your marriage and finances so that everyone can work together on your family’s financial goals.
Always be honest about money in relationships.
In a money and relationships article on CNBC, it was reported that only 52% of people in relationships believe their partner is being completely honest about money. And, only 61% of people say that they are totally honest with their partner about money.
What I see there is that in many, many relationships, there are some serious trust issues when it comes to talking about money.
The problem with financial infidelity is that it can lead to even bigger financial problems (like debt piling up beyond what’s imaginable), stress, unhappiness, it may start impacting other areas of a your life (such as work), and it may even lead to divorce.
Unfortunately, it’s possible that you may already be a victim of financial infidelity without even knowing it. Here’s how to recognize the signs of financial infidelity:
You haven’t noticed any bills in the mail. This could be a sign that someone is hiding the bills.
You are getting calls from debt collectors. These may actually be legitimate calls!
Your credit cards are being declined. This could be a sign that someone is overspending without your knowledge.
Your partner no longer wants to talk about money. This could be a sign that your partner is too afraid to talk about money with you because they fear that you will uncover the truth.
Lying about money and relationships is very serious, but it’s important to realize that it’s an issue that both partners should work towards improving. While being honest with your partner is important, you should also make sure that your partner feels comfortable telling you when they are struggling.
Set spending limits for each other.
Spending limits shouldn’t be looked as limitations or rules – think about them as guidelines that help you work towards larger goals. That’s because spending limits are really just there to help you stay on track with your budget.
You can set limits however you would like, and some couples tell each other about every single purchase they make, whether they buy something for $1 or if they buy something for $1,000.
Others only tell their spouse if they reach a certain amount, such as $100.
Whatever you decide, it’s a good idea to sit down with your spouse and determine what kind of limits you should set for your specific situation.
Doing this can help keep the communication lines open with your marriage and finances so there are fewer arguments about money.
Learn how to improve your financial situation.
For anyone needing help with money and relationships, one of the best things you can do is learn how to improve your financial situation. It can be an empowering thing for you to work towards with your partner and it can bring you both closer together.
If you want to improve your financial situation, here are some of the things you may want to do:
Read financial blogs. Reading financial blogs can help you see what other people like yourself may be doing to improve their financial habits. While it may not always be perfect and/or applicable, it can be helpful to see real life examples.
Listen to financial podcasts. You can learn a lot about money and relationships by listening to others talk about their own situations and topics relevant to your life. And, there are so many amazing financial podcasts out there ‒ take your pick!
Read financial books. 17 Personal Finance Books That Will Change Your Life is a great read if you are looking for financial books to help you with money and relationships. That list shows books that will help you to pay off debt, find side hustles, manage your money better, figure out retirement, and more.
Attend money workshops. There are in-person workshops on the topic of personal finance, huge conferences, money meet-ups, and more.
Join money-related Facebook groups. I have a free Facebook community that you can find here, and another favorite of mine is ChooseFI.
The key here with this and any other money and relationships advice is to do it together. I think learning more about money can usually help get a person more motivated about improving their financial situation, so if your spouse is having a hard time managing money, this can be a good way to get them more involved.
Reevaluate your situation.
Should money break a relationship?
Some will say no, and others will say yes.
For me, I do believe that money can break a relationship. However, that doesn’t mean that divorce or separation should be the first place you go when you are struggling with financial infidelity or other issues affecting money and relationships. You will need to work on your issues together before deciding that it’s time to call it quits.
Being on the same page is so very important, and if your partner is the complete opposite of you, you may be fighting constantly, you may both be unhappy, and more. If that’s where you are at, then reevaluating your relationship may be an important next step.
Only you can determine what goes on in this step, as it’s a very personal decision and no one knows the exact issues you’ve been through and how they’ve affected your relationship.
What money and relationships advice do you have to share? What would you do with a partner who was bad with money?
