budgeting apps Archives - Page 4 of 9

Apache is functioning normally

May 25, 2023 by Brett Tams

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The savings offers that appear on this site are from companies from which MoneyCrashers.com receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MoneyCrashers.com does not include all savings companies or all savings offers available in the marketplace.

Years ago, finding a bank meant heading downtown and choosing from whichever options were available there. The Internet dramatically lessened the importance of physical branches and made it possible to bank from anywhere at any time.

Virtually all banks with physical locations have online portals, but a growing number now do the bulk of their business online. Some have ties to community banks and may have physical branches in select regions. Others exist only in the digital realm and have no physical branches.

What follows is a list of the best online banks on the market today.

Best Online Banks of May 2023

These are the best online banks on the market right now.

Each does at least one thing really well, whether it’s offering a potent lineup of budgeting and money management tools or delivering savings and CD rates well above the national average. Our top pick offers the most value for the greatest number of potential customers, in our opinion.

Unless otherwise noted, all the accounts on this list come with FDIC insurance up to $250,000 per account.

Best Overall: American Express® National Bank, Member FDIC

The American Express® High Yield Savings Account has a solid yield on all balances with $0 maintenance fees, a $0 minimum opening deposit, and a $0 minimum balance. The current savings yield is 3.90% Annual percentage Yield (APY) as of May 16, 2023.

Want to tie up your money for a while at a higher interest rate? Choose from seven CD options ranging from six months to five years.

CD yields are very good across the board: 3.00% Annual Percentage Yield (APY) on the longest-term product (60 months or 5 years) and 4.25% on the 12-month CD. Early withdrawal penalties are:

90 days’ interest for terms under 12 months
270 days’ interest for terms between 12 and 48 months (four years)
365 days’ interest for terms between 48 and 60 months (five years)
540 days’ interest for terms of 60 months or longer

Additional features:

Extensive lineup of personal credit products, including premium credit cards like The Platinum Card® from American Express
Move money between up to three external bank accounts in short order
24/7 customer service

Apply Now

Best Credit Union: Alliant Credit Union

When is an online bank not an online bank? When it’s an online credit union.

There’s no better branchless option than Alliant Credit Union. As a credit union, Alliant exists for its members rather than stockholders so they will always put you first.

Alliant has a comprehensive lineup of checking and savings accounts, like:

High-Rate Savings, a high yield savings account for goal-oriented savers (currently 3.10% APY¹)
High-Rate Checking, a checking account with competitive interest rates
Certificates of Deposit, which help you earn more with set interest rates for a fixed period of time (currently yielding 5.00% APY)
Kids Savings, a custodial account that helps you teach sound money management concepts to kids 12 and younger
Teen Checking, a joint account for kids aged 13 to 17 — there when you’re ready to loosen the reins

Additional features:

Get access to over 80,000 in-network ATMs with Alliant
No monthly service fee with eStatements
Low minimum deposit and balance requirements
Bank anywhere, anytime with the Alliant mobile app

Sign Up for Alliant Savings

Insured by NCUA

(¹For important additional disclosures, please refer to the corresponding footnote at the Sign Up link directly above.)

Best for High Yields: CIT Bank

CIT Bank offers several different accounts with category-leading yields:

Savings Connect has one of the best yields of any bank account, online or off: 4.50% APY.
Platinum Savings has an outstanding yield when you maintain a balance of $5,000 or more (4.75% APY) and a so-so yield when you don’t (0.25% APY).
Savings Builder yields up to 1.00% APY for accountholders who can meet minimum balance or deposit requirements.
The CIT Bank Money Market account has a very good yield on all balances (currently 1.55% APY) with no monthly maintenance or service fees.
Multiple CIT Bank CDs offer above-average yields, led by the 11-month CIT No Penalty CD at 4.80%

Additional features:

No monthly service fee
No early withdrawal penalty for No Penalty CDs
No ATM fees in-network
CIT may reimburse up to $30 in outside ATM fees
Earn interest on eligible eChecking funds

Sign up for CIT Bank

Best for Investors: Wealthfront

Wealthfront is a next-generation banking service that’s ideal for day-to-day money management. Its Cash Account features high-interest checking, no account fees, and a host of value-added features — and you can open an account with just $1.

But Wealthfront made its name in the investment business, and there’s where it continues to shine. Key features include:

Build semi-customized, automatically rebalanced, globally diversified portfolios of low-cost index funds optimized with daily tax-loss harvesting
Just $500 minimum to invest
Pay an annualized management fee of 0.25% assets under management (AUM) on all balances
Choose from individual and joint taxable accounts, IRAs, and 529 college savings plan accounts
Portfolio line of credit that lets you tap up to 30% of your account value once you have $25,000 or more under management
Consolidated view of all your accounts through Wealthfront’s free DIY financial planning tool

Additional features of the Wealthfront Cash Account include:

4.55% APY (variable) on all balances
$1 minimum opening deposit
No account fees
No overdraft fees
FDIC insurance on balances up to $5 million
Get paid up to two days early with direct deposit
Put your money to work in the market within minutes when you use your Cash Account to invest in a Wealthfront Investment Account
Mobile check deposit
Free bill pay and peer-to-peer (P2P) transfers
Complimentary debit card and free in-network ATM access
For a limited time, get $30 bonus cash when you open a Wealthfront Cash Account and fund your new account with at least $500 in new money. Terms apply.

Sign Up for Wealthfront

Money Crashers, LLC receives cash compensation from Wealthfront Advisers LLC (“Wealthfront Advisers”) for each new client that applies for a Wealthfront Automated Investing Account through our links. This creates an incentive that results in a material conflict of interest. Money Crashers, LLC is not a Wealthfront Advisers client, and this is a paid endorsement. More information is available via our links to Wealthfront Advisers.

Best for Customer Support: Albert

Albert is a powerful financial app that makes spending, saving, and investing easy. It’s among the growing crop of financial solutions that offer early payday with eligible direct deposit, and its automated savings and investing features put it well ahead of the pack.

But where Albert really shines is on the customer service front. The platform has a dedicated team of in-house financial experts — called Geniuses — to help you make sense of your money. That puts it heads and shoulders above its crop of fellow digital money management apps.

Additional features:

Albert Cash. This is the place to manage your day-to-day spending money with Albert. Earn up to 20% back on eligible debit card purchases and get paid up to two days early with qualifying direct deposit. Use the Albert Instant cash advance feature to get up to $250 from your next paycheck with no hidden fees.
Albert Savings. Albert’s Smart savings engine sizes up your cash flow and sets aside funds automatically so that you’re always moving toward your financial goals. Set specific goals within the app, such as building an emergency fund or saving for your next vacation. And get cash bonuses on your Albert Savings every year.
Albert Investing. Start investing with as little as $1 using Albert’s guided investment platform. Choose your own stocks or themes, or have Albert do it for you.

Sign Up for Albert

Best for Debit Card Rewards: GO2bank

GO2bank is a low-friction online bank with a mobile-friendly bank account (no monthly fee with eligible direct deposit) and impressive yields on savings (4.50% APY²on savings up to $5,000).

Eligible electronic gift card purchases in the app earn up to 7% cash back; Amazon eGift Card purchases in the app earn 3% cash back. Terms and conditions apply.

Additional features:

No minimum opening deposit or ongoing balance requirement
Avoid the $5 monthly fee with an eligible direct deposit
Get paid up to two days early with ASAP Direct Deposit^{TM 3}
Deposit cash at participating retail stores, subject to fees and deposit limits
Enjoy up to $200 in overdraft protection with opt-in and eligible direct deposit.*
Earn 4.50% APY paid quarterly on savings up to $5,000 — over 10 times the national average savings rate²

* $15 fee may apply to each purchase transaction not repaid within 24 hours of authorization of the first transaction that overdrafts your account. Overdrafts paid at GO2bank’s discretion.

Sign Up for GO2Bank

¹Active GO2bank account required to receive an eGift Card. eGift Card merchants subject to change.

²GO2bank, Member FDIC. Interest paid quarterly on the average daily balance of savings during the quarter up to a $5,000 balance and if the account is in good standing. 4.50% Annual Percentage Yield (APY) as of April 2023. APY may change before or after you open an account. The average national savings account interest rate of 0.39% is determined by the FDIC as of 4/18/23. Visit https://www.fdic.gov/regulations/resources/rates/ to learn more. Fees on your primary deposit account may reduce earnings on your savings account.

³Direct deposit early availability depends on the timing of the payor’s payment instructions and fraud prevention restrictions may apply. As such, the availability or timing of early direct deposit may vary from pay period to pay period. The name and Social Security number on file with your employer or benefits provider must match your GO2bank account exactly or GO2bank will decline your deposit.

Best for No Account Fees Ever: Rewards Checking via Upgrade

Rewards Checking via Upgrade⁴ has a slew of user benefits, but its defining feature couldn’t be simpler: no account fees, ever.

That’s right. As a user, you pay no account fees — no annual fees, overdraft fees, transfer fees, or ATM fees charged by Rewards Checking by Upgrade¹.

There’s more, of course. Additional features of Rewards Checking via Upgrade include:

2% cash back on purchases at convenience stores, drugstores, restaurants, and bars, and on utility bills and certain monthly subscriptions²
Earn up to $500 cash back per year at the 2% rate
Earn 1% cash back on all other eligible purchases

Get up to five third-party ATM fee rebates each month¹
You may receive discounts on loans and cards through Upgrade³
FDIC Insured up to $250,000 through Cross River Bank, Member FDIC

Sign Up for Rewards Checking via Upgrade

1 There are no account fees, overdraft fees, annual fees, or transfer fees associated with Rewards Checking accounts. Rewards Checking charges no ATM fees, but third-party institutions may charge you a fee if you use their ATM/network or if you use your Upgrade VISA® Debit Card internationally. Upgrade will rebate any ATM fee charged by another institution for debit card withdrawals in the United States, up to five times per calendar month. To be eligible to receive third-party ATM fee rebates in any calendar month for eligible ATM withdrawals made during that month, customers must have (i) an open Rewards Checking account and (ii) either maintained an average daily balance in their account of at least $2,500 in the prior calendar month or made direct deposits into their account totaling at least $1,000 during the prior calendar month. As a courtesy to new customers, Upgrade will provide third-party ATM fee rebates for up to the first 2 calendar months after account opening regardless of account activity. Some limitations apply and terms and conditions may change. Please refer to the applicable Cross River Bank Deposit Account Agreement and Upgrade VISA® Debit Card Agreement and Disclosures for more information.

2 Rewards Checking customers accrue 2% cash back on common everyday expenses at convenience stores, drugstores, restaurants, and bars – including deliveries – and gas stations, as well as recurring payments on utilities and monthly subscriptions including phone, cable, TV and other streaming services, and 1% cash back on all other debit card charges. 2% cash back is limited to $500 in rewards per calendar year; after $500, customers accrue 1% cash back on all eligible debit card charges for the remainder of the year. Some limitations apply. Please refer to the applicable Upgrade VISA® Debit Card Agreement and Disclosures for more information.

3 The interest rate on a new loan or credit line through Upgrade may be up to 20% lower than would otherwise be applicable without this discount, as long as you have an active Rewards Checking Account. Additional terms may apply. Please refer to the applicable Truth-in-Lending Disclosure and Loan Agreement.

4 Upgrade is a financial technology company, not a bank. Rewards Checking services provided by Cross River Bank, Member FDIC. Upgrade VISA® Debit Cards issued by Cross River Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc. Personal Loans made by Upgrade’s bank partners. Personal Credit Lines are issued by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. The Upgrade Card is issued by Sutton Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc.

Best for Automated Budgeting: Douugh

Douugh is a money management app that makes it easy to stay on top of your day-to-day financial obligations while saving for a rainy day — and happier days too.

A single mobile-friendly dashboard makes it all possible.

How? That’s down to Salary Sweeper, an AI-enabled feature that automatically allocates income to two protected “jars”:

Your Bill Jar, complete with a virtual card of its own
Your Savings Jar, which is actually a customizable array of single-purpose savings buckets

The rest is yours to spend as you please using a debit card accepted by millions of merchants worldwide. Best of all, you never have to give manual budgeting a second thought.

Additional features:

Enjoy a free checking account with a Mastercard debit card
Use Apple Pay, PayPal, and other payment apps to make purchases online and IRL
Lock and unlock your card and change your PIN within the app — without calling customer service or visiting a branch.

Sign Up for Douugh

Best for Debt Refinancing: SoFi Checking and Savings

Need to refinance the student loans you’ve been carrying for years with no end in sight?

Open a SoFi Checking and Savings account, then head over to SoFi’s student loan refinancing portal to check out your options. SoFi is a category leader in the education loan refinancing business, with incredibly low rates, flexible terms, and an array of reasonable repayment options.

And since you’re also in the market for a new online bank, you’ll enjoy these great SoFi Checking and Savings perks and features:

No minimum opening deposit or balance requirement
Rate discounts on SoFi loans
Free peer-to-peer (P2P) transfers
Customized financial planning
Member-exclusive offers from SoFi partners
A referral program that pays up to $310 per successful referral
Up to 3.75% APY on eligible balances

Plus, for a limited time, sign up for SoFi Checking and Savings and earn a $250 opening bonus when you set up direct deposit of at least $1,000 into your account

Sign Up for SoFi Checking and Savings

Best for Teens and Young People: Copper Banking

Copper is a banking solution for teens age 13 and older — and their parents too.

It’s built around the Copper Card, a personalized debit card that leverages Apple Pay technology to facilitate seamless online and in-person transactions.

The Copper App allows parents to monitor spending and instantly send money in seconds. For teens, its Automatic Saving feature encourages saving — a lifelong financial habit — by automatically setting aside a portion of each paycheck or inflow.

Additional features:

Copper has a wealth of financial literacy content for parents and kids alike — it’s one of the best financial education tools around
Withdraw cash for free at over 55,000 ATMs
All Copper Accounts are FDIC-insured up to $250,000 through Evolve Bank & Trust

Sign Up for Copper

Best for Potential Returns on Savings & Spending: PrizePool

PrizePool is a truly unique financial app — the only FDIC-insured deposit account provider that offers users the chance to earn serious money based on your saving and spending habits.

PrizePool offers two ways to win:

Savings Balances: Get 1 ticket for PrizePool’s prize drawings for every $1 on deposit in your savings account, every day. So if you have $1,000 in your account, you get 1,000 tickets every day.
Debit Card Purchases: Earn 30 tickets for every $1 spent, plus get the chance to have your purchases reimbursed.

PrizePool holds a weekly drawing every Friday. There are almost 6,000 cash prizes every week, including a $10,000 grand prize drawing at least once every six weeks.

Additional features:

Earn 0.30% APY on eligible savings balances
Deposits are FDIC-insured up to $250,000
Refer new users to PrizePool and get 10% of their prize winnings forever

Sign Up for PrizePool

Best for Freelancers and Self-Employed People: Lili

Lili offers a totally free checking solution with a slew of value-added features designed to simplify your financial life.

Its core product is built with freelancers in mind, but it’s appropriate for a range of use cases, from solopreneurs to folks who supplement 9-to-5 income with side hustle revenue.

With powerful, automated tax savings and expense categorization tools, Lili eliminates the need to juggle separate bank accounts for business and personal needs — it’s just one deposit account for your entire financial life.

Additional features:

No minimum opening deposits or ongoing balance requirements and no account fees
Pay virtually anywhere with a Visa debit card that’s accepted worldwide

Lili’s Tax Bucket tool automatically sets aside funds earmarked for income tax payments
Utilize expense management and categorization tools that simplify business budgeting, cash flow management, and year-end accounting
Get real-time alerts for every transaction (and other account activities too)
Make mobile check deposits through the Lili mobile app
Make cash deposits at more than 90,000 retail locations across the U.S., including CVS, Walgreens, and Rite Aid
Get paid up to two days early with early direct deposit
Enjoy fee-free withdrawals at about 38,000 ATMs nationwide

For $9 per month, Lili Pro adds even more valuable features:

A premium Visa Business Debit Card that delivers cash-back rewards
BalanceUp, a fee-free overdraft solution that covers up to $200 in would-be overdrafts
Advanced expense tracking that helps business owners maximize their tax deductions
A savings account that pays interest

Sign Up for Lili

Best for Savers: Quontic Bank

Quontic Bank got its start as a New York City community bank that catered to thrifty types.

Today, Quontic’s branch-based banking options represent just a small fraction of its offerings. With a nationwide digital footprint, Quontic delivers category-leading checking and savings yields for consumers and small-business owners from all walks of life — all with no monthly service fees:

Cash Rewards Checking: Earn unlimited 1.5% cash back on qualifying debit card transactions after meeting the $100 minimum opening deposit.
Bitcoin Rewards Checking: Earn 1.5% Bitcoin on qualifying debit card transactions. The minimum opening deposit is $500. This account may not be available in all states.
High Interest Checking: Make 10 or more qualifying debit card point-of-sale transactions of $10 or more per statement cycle to earn interest at competitive rates based on account balance. The minimum opening deposit is $100.
High Yield Savings: Earn interest at category-leading rates (currently 4.25%) after meeting the $100 minimum opening deposit.
Money Market: Earn solid yields (currently 4.75%) after meeting the $100 minimum.
CDs: Quontic CDs have terms ranging from six months to three years and competitive yields that generally increase in proportion to term. The minimum opening deposit is $500. Early withdrawal penalties may apply.

Additional features:

Tap to pay with the Quontic Pay Ring — the first wearable debit card
Choose from an array of home loans, including community development loans that go beyond your traditional credit profile
Take advantage of special loans for foreign nationals and recent immigrants

Sign Up for Quontic Bank

Best for Borrowers: Discover Bank

Discover Bank is a full-service online bank with a wide range of deposit accounts. It’s a great (almost) one-stop shop for your digital financial needs.

Discover Bank’s real differentiator is its comprehensive lineup of secured and unsecured credit products. That includes unsecured personal loans, which many online banks don’t bother with due to perceived risk.

You’ll find home loans, home equity products, student loans, credit cards, and personal lines of credit here too.

Discover Bank’s deposit account options include:

Cashback Debit: This checking account has no yield, but you can earn 1% cash back on up to $3,000 in qualifying debit card spending each month. There’s no monthly maintenance fee.
Online Savings Account: This account has a very strong yield on all balances — currently 3.90% APY. There’s no maintenance fee or minimum to open.
Money Market Account: With a minimum opening deposit and balance requirement of $2,500, this account has competitive yields on all balances. Its two balance tiers cleave at $100,000, but yields on higher balances barely exceed those on lower balances. Enjoy a free, optional debit card, and no maintenance fee. There’s also no minimum balance fee, despite the minimum balance requirement.
Traditional CDs: CD terms range from three months to 10 years. Yields range widely, peaking on longer-term CDs. You need $2,500 to open any CD.

Additional features:

Structure any money market or CD as a traditional, Roth, or SEP IRA
Or roll over your 401(k), 457 deferred compensation plan, annuity, or IRA from another institution
Enjoy a coast-to-coast network of 60,000 fee-free ATMs
Enjoy 24/7 support by phone, live chat, and email
Make mobile check deposits from anywhere
Enjoy free, instant P2P money transfers

Sign Up for Discover Bank

Methodology: How We Select the Best Online Banks

We use several key factors to evaluate online banks and surface the very best ones for our readers. Each relates in some way to the overall user experience, and you’ll see many represented in our “Best For” categories above.

Available Account Types

The best online banks offer a range of different deposit account types: free checking, savings, CD, and money market accounts, among many others.

Truly comprehensive online banks go even further, with less-common account offerings like savings IRAs, jumbo CDs, and more. More accounts doesn’t necessarily mean a better banking experience, but it’s helpful if you’re looking for a one-stop financial shop.

Interest Rates

Online banks tend to have higher yields — interest rates paid to the account holder — as well as lower interest rates on certain types of loans, if offered.

You shouldn’t count on that though. It’s important to shop around and choose an online bank that consistently offers significantly better rates. Not all do.

Account Minimums

The best online banks have low or no minimum balances and low or no minimum opening deposit requirements on checking, savings, and money market accounts.

CDs generally do have minimum deposit requirements, even at the best online banks, but there’s lots of variation. Look for deposits at or below the $1,000 mark, if possible.

Monthly Maintenance Fees

Free is always better than not free, right?

Not necessarily. Some of the best online banks around charge modest monthly fees. In exchange, they offer a wealth of value-added features and services that can earn or save you money (and sometimes both at the same time).

That said, we do give preference to banks that don’t charge monthly fees at all. Because everyone could use a break.

Other Account Fees

The trusty monthly maintenance fee is just the most visible bank fee. Others include:

ATM fees (in-network and out-of-network)
Wire transfer fees
Excess transaction fees
Early withdrawal penalties
Minimum balance fees

Traditional banks are notorious for nickel-and-diming their customers. By contrast, most online banks do charge at least some fees, but they’re predictable and clearly disclosed on their websites and applications.

For example, many online bank CDs come with early withdrawal penalties. These can be equivalent to as little as one month’s interest on shorter-term CDs but may range up to 24 months of interest on very long-term CDs.

All else being equal, we prefer online banks that charge few if any fees — and hidden fees are a dealbreaker.

Investment and Tax-Advantaged Options

Many online banks stick to core banking services, like checking and savings. But a growing number of online banks offer a wider array of options for people who’d like to be able to do all their banking in the same place.

We’re particularly fond of online banks that offer tax-advantaged account options, such as savings IRAs and CD IRAs. We also like online banks that have in-house investment platforms — whether they’re self-directed brokerages like Ally Invest or low-cost robo-advisors like Wealthfront.

Credit Options

All online banks have at least one deposit account product. That’s what makes them online banks.

A smaller but growing number make loans or issue lines of credit — including credit cards — as well. Common online bank credit products include:

Mortgage loans, including purchase loans and refinance loans
Home equity products, including home equity loans and lines of credit
Auto loans
Student loans and student loan refinancing products
Personal loans
Credit cards and other types of credit lines

We don’t hold it against online banks that don’t make loans — it’s a big step for many a lean bank. But we do look out for banks that have taken the leap.

Budgeting and Money Management Features

Budgeting is hard to do right. That’s why we’re big fans of online banks with built-in budgeting and money management tools.

The more automated these tools are, the better. In fact, some make our list of the top budgeting apps on the market. Truly “set it and forget it” money management saves the typical consumer hundreds if not thousands of dollars per year.

Online Banking FAQs

Still have questions about online banks and managing money online? We have answers.

How Much Does Online Banking Cost?

Online bank rates, yields, and fees are subject to change at banks’ sole discretion. For up-to-date information about specific accounts and bank policies, check their websites or call customer service.

That said, online banks are generally more affordable than traditional banks. They’re less likely to charge monthly maintenance fees on checking and savings accounts, and many have fewer hidden fees too.

What’s the Interest Rate on an Online Bank Account?

That also depends on the individual bank. But many online accounts feature higher yields relative to those of traditional banks.

That’s because online banks have less overhead than traditional banks. They don’t need to pay to keep big, centrally located branches open or pay people to work at them. Their operations are more efficient, which allows them to pass the savings on to customers via higher rates and lower fees.

How Do You Enroll in Online Banking?

It depends on the bank and how its website or app is structured, but it’s usually straightforward. In fact, with an online-only bank, enrollment is usually automatic. You don’t have to complete a separate application or even click a button to activate your account.

However, you will need to create a unique username and password to get started. You may be asked to do this as part of the initial application process or once your account is approved. You’ll also need to link at least one external funding source to transfer money into your account.

Can You Get a Mortgage From an Online Bank?

Some online banks offer home loans (mortgages) and other credit products. These banks tend to be larger online banks with high name recognition, like Ally Bank and Capital One Bank. Look for a “Mortgages” or “Home Loans” tab on the homepage or in your account dashboard.

Be aware that some online banks outsource mortgage origination to other companies. In other words, if you apply for a mortgage through your bank, your loan officer might actually work for someone else. This isn’t necessarily a bad thing, but it could mean a different level or style of service than you’re used to.

And don’t expect your online bank to offer better mortgage rates than other lenders. The mortgage loan business is highly competitive, and direct lenders with even lower overhead may be able to undercut online banks.

How to Choose the Best Online Bank — Or Several

The institutions on this list offer a great combination of FDIC-insured banking products, solid yields, open access, and helpful customer service.

Before choosing one, take a closer look at the features that set it apart from the competition: rewards checking, flexible withdrawal terms for CDs, particularly high account yields, a socially responsible corporate philosophy, and so on.

And remember that, unlike in the old days, your banking choices aren’t bound by geography or other restrictions. If you can’t settle on a single online bank, why not open accounts at multiple banks and compare your experiences?

Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.

Source: moneycrashers.com

Apache is functioning normally

May 24, 2023 by Brett Tams

This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.

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.

You are looking for the best investment app to help you save money, but all of them seem too complicated. You want something that is simple, easy to use, helpful, and even better if the app is free.

Empower is an online service for tracking your finances. Before a merger, the company began in 2009, and to this day it has been growing exponentially with a user base of over two million people.

Personal Capital is now Empower.

The app works on desktop as well as mobile devices, giving users the ability to track their spending easily wherever they go.

Empower also offers a suite of tools that help you get out more information about how you are using your money so that you can make better financial decisions.

On this Empower review, we will focus on what they do well, how it works for those who use it, and where Empower could improve.

Don’t forget… here is a list of all of the budgeting apps on the market.

If you are looking for an easier way to monitor your financials and see how healthy your finances really are, then you may want to check out what Empower has to offer.

What is Empower?

Empower is an online tool for tracking your finances.

It has been called the best financial app out there, and I agree with that statement. But, I personally use it as one of the money management tools to help guide our financial decisions.

I have used Empower to track my investments for over six years now, which probably makes me a bit of an expert on this topic because I use it on a regular basis.

Overall, Empower is a financial planning and wealth management tool that users can use to manage their net worth. The product offers tools for managing investments, retirement, debt payoff, and other personal finance goals.

How does it work?

First of all, Empower is a FREE app that helps you keep track of all your accounts. It can help you to invest better and did we mention… it is free to use!

To get the most out of this app, you’ll have to link each of your financial accounts one by one so that Empower can learn how you spend money.

It takes a couple of minutes to create an account and verify your identity.

The longest step is linking accounts to the Empower app. Just make sure you do this step within 7 days to get the most out of the app.

Features of Empower

The features of Empower include the ability to visualize your overall financial picture, keep track of your investments in a dashboard, and see which companies you are invested in.

Most people associate Empower as one of the best tools to help with investing, like a stock screener and an investment calculator.

But, there are many great features available for free including:

Net Worth Planner
Retirement Planner
Fee Analyzer
Cash Flow Management
Savings Planner
Budgeting
College Savings Planner
Investment Checkup

Pros and Cons of Empower

First of all, Empower is free to use. So, you might as well test drive the system and check out if the Empower app fits what you are looking for.

Just like any of the Empower reviews will tell you, there are positives and negatives with every type of money management app available.

You just have to decide the most important features for you. As well as what you are willing to pay.

Pros of Empower:

Free portfolio management tool.
Good for new investors who want a free-to-use tool with minimal features.
Easy to use and can be accessed on multiple platforms.
Can track investments across multiple accounts.
Tracks over 23,000 securities and over 1,000 mutual funds. – check
Offers a free app for on-the-go access.
Offers in-depth analysis and investment research on stocks, bonds, and ETFs.
Cloud-based platform
Free to use!

Cons of Empower:

Sales call from staff
Wealth management service is more expensive than a traditional advisor or simply investing in index funds.
High wealth management fee
Unable to reconcile your bank statements with Empower, but since they are coming from your bank directly, they should already be in sync.
No credit health information
Budgeting Tool needs improvement
Limited transaction management and budgeting
No import option for transactions from any platform including YNAB, Quicken or Mint
Cloud-based platform

Many people report that the Empower app requires $100,000 in investment assets to be eligible. That is untrue. In fact, it works best for those who have at least $100k in some form of investments – 401k, IRA, brokerage accounts, or even cash!

Empower is incredibly easy to use and has helpful financial planning tools.

Overall, it is one of the many great tools to help further push you to financial freedom.

Empower Pricing

While Empower is free to access personal finance tools, it does come at a small price of annoyance.

Empower is free

Empower is a free online portfolio platform that helps people save and invest their money. It offers tools to track net worth, create investment plans, compare retirement accounts, view savings goals and cash flow, and more.

This is the great part of using this app!

The downside is to make these dashboards free is they are trying to entice you to move to their wealth management services.

You do not need to invest your money with Empower to use this platform.

It is best to keep everything invested where it currently is and use their free tools to analyze and make the necessary changes.

As such, once you sign up, you will receive calls on a reoccurring basis offering you a free analysis. There is no pressure to do this. Once you have said no enough times, they will stop calling you.

Wealth management services come with fees

Empower offers fee-only financial advisory services.

For those under $1 million in investable assets, their fee is 0.89%.

As you can read in this book, there are many ways to invest yourself without paying that fee.

In fact, this is my favorite book explaining how much harder and longer you have to work by paying someone a 1% wealth management fee.

However, for a small percentage of people, this may be a more cost-effective way of receiving professional advice, as it eliminates hidden costs from this type of service.

Empower Tools

Empower is a financial management platform that provides tools to help individuals manage their personal finances. The platform offers tools for portfolio tracking, performance analysis, and retirement planning. The company also provides its users with educational resources on financial topics.

Under their free dashboard, these are the tools you can use for free.

Net Worth Calculator

This simple tool will keep track of your net worth. Very simple and always available.

Know where you stand, by downloading the free app to see your true net worth in real-time.

Understanding your personal financial statement is important.

Savings Planner

One of the most asked questions is how much I need to save for:

Retirement
Emergency Fund
To Pay Down Debt

Calculate how much to save each year with a 70% chance of reaching your retirement goals. Learn how much you are currently savings and how much you need to start saving.

Cash Flow

Cash flow is the amount of cash available for expenses at a certain time. This term used in personal finance describes the rate at which one’s income and expenses change over time.

The Cash Flow tool is easy to use because Empower automatically tracks deposits and spending. The time saver feature allows users to see their cash flow, balance sheet, net worth, asset allocation over a period of time.

Cash flow is a budgeting tool that offers limited information on spending. It provides a second check when using another program that gives you more details like Quicken or Simplfi.

Retirement Planner

This is the #1 reason I recommend Empower especially if you are looking to stay away from a financial planner.

Trying to figure out how much you need for retirement by yourself seems like picking a random number from the sky.

The retirement planner is used by millions of people to figure out how on track they are for retirement. Plus get tips on what they can do to improve their chances of success.

Budgeting

Budgeting is a method of allocating financial resources by identifying and evaluating needs, prioritizing them in order to meet goals, and monitoring the achievement of those goals.

Empower includes a budgeting section to help you set monthly spending targets and track your spending. They automatically import the information from linked accounts such as checking, savings, and credit card statements.

Using their free online financial dashboard, allows you to track your spending and investments. There are interactive charts, graphs, pie-charts, and even widgets. All to make sure your budgeting is on track.

Investment Checkup

This portfolio analysis is the process of measuring performance and risk in order to develop a strategy for capital allocation. The goal of portfolio analysis is to improve return on investment, which can be achieved by increasing return on assets, decreasing the risk of losses, or reducing the variance.

The Empower app lets you explore your entire portfolio visually. It also provides asset allocation tools and tax optimization tools to help manage a person’s financial life.

Fee Analyzer

A fee analyzer helps people to determine the annual fees they are paying in their retirement plan.

401K Analyzer also calculates how much your retirement is costing you and provides a breakdown of any hidden fees that may be present within mutual funds with which it has been linked. This Retirement Planner tool uses assumptions about account holdings and investment behavior for calculating expenses against an estimated portfolio value.

Consequently, these fees add up over time and will drastically put a drag on your portfolio and reduce your retirement savings.

Empower Dashboard is Free

Just remember, you do not need to hire an advisor to use the platform.

Empower is a free tool for individual investors.

Empower provides users with access to all of the above-mentioned advanced tools for free. In addition, they offer free financial advice through their blog and social media pages.

It allows users to track their investments and get a personalized financial plan. The service also offers apps for iOS and Android devices, which makes it easy to manage finances on the go.

Empower Wealth Management Review of Services

In addition to offering free financial tools, Empower provides wealth management services.

You get to work one-on-one with an advisor who will give you personalized advice based on your situation.

They help you to invest, save money and track your financial goals.

Their advisors start by determining your risk tolerance and goals in order to construct the best personal financial plan for you.

If you are interested in getting a better understanding of your financial situation, Empower is an excellent option. It gives users the tools to understand their investments, budgets, and cash flow all with one app.

All it requires is that you sign up for free without any obligations or commitments from them whatsoever. You do not have to agree to use their wealth management program.

Personally, I cannot comment on an Empower advisor review as I have not used this service personally.

Empower Investment Strategy

The Empower investment strategy is a simple way to invest your money for the long-term.

This means that you will be able to retire and live a comfortable life without any concern about how you will be able to live.

They employ the tactic called Smart Weighting because they invest equally across all sectors and industries, which can provide diverse returns with minimal risk. The best part of this strategy is it’s easy to use as Empower has created an interface that makes portfolio management simple for users on any device or platform.

Empower’s software is able to identify tax-loss harvesting opportunities (opportunities where the investor sells an investment after it has fallen in value and pays fewer taxes than if the sale had occurred earlier) than investing on their own.

In addition, Empower invests passively for cost efficiency which means that they don’t take any active management into account.

The best part about Empower and one of the key areas I prefer, is they include socially responsible investments as well as an investment strategy to fit any budget.

They identify which companies are doing good work for society and invest in them accordingly. This feature makes personal finance much more interesting and easier than ever before!

Wealth Management Tiers

Many people invest in various financial services and products, such as mutual funds or stocks. They are promised that these investments will generate a good return, but they do not always make the best choice. Wealth management services are a way to help people manage their personal investments. They may charge fees for their service, but that is not always the case.

Depending on your level of assets, will determine the amount of services you will receive.

Investment Services:

This is the most basic level to receive financial and retirement planning guidance from their team of experts.

$100K in investment assets
Unlimited advice from any of the available financial advisors
Managed ETF portfolio

Wealth Management:

This is where you can receive more personalized services and dedicated support to manage your money as you move through new financial challenges.

$200K minimum in investment assets
Two dedicated financial advisors
Access to specialists in real estate, stock options, and more
Regular reviews on your customized portfolio
Tax optimization

Private Client :

This is the most exclusive level at Empower to help you receive comprehensive financial planning. They will help build a customized investment plan to reach your lifestyle goals.

over $1 million in investment assets
Two dedicated financial advisors
Priority access to specialists
In-depth retirement and wealth planning

Wealth Management Fee Structure

Empower charges only an all-inclusive annual management fee at a fraction of the cost of traditional financial institutions. In addition, they do not charge hidden fees, trailing fees, or trade commissions.

First $1 million = .89%
First $3 million = .79%
Next $2 million = .69%
Next $5 million = .59%
Over $10 million = .49%

Overall, if you want a financial advisor or a second opinion, using Empower wealth management services may be for you.

Even if you don’t join, you can still use the tools for free, no questions asked.

My Empower Review from Experience

I have had a lot of experience using Empower in the past. They provide snapshot financial pictures of your personal situation that are very informative.

Plus it is a free tool to use, which is always a bonus.

Empower is one of my favorite online tools to see all your finances in one place.

It is eye-opening to see the overall picture. Also, tracking investments across multiple accounts can be overwhelming, but they make the process seamless and help you stay on top of things.

Personally, my favorite tools are the net worth, fee analyzer, and retirement planner.

I use Empower in conjunction with Quicken. Read my Quicken review.

My Empower dashboard is my overall financial picture whereas Quicken tracks all of my day-to-day spending and helps me remember when we purchased something for a return.

The app has a convenient interface that makes managing your personal financial situation easy, even if you’re not familiar with finance jargon or investing terminology. With this tool at hand, keeping track of where everything stands financially becomes easier than ever before!

Just to note… to get the best financial picture, you must include all of your accounts. The more time you spend in the Empower dashboard, the more helpful analysis you will get from the tool.

Empower Alternatives

In addition to Empower, there are other financial apps that can help you allocate your portfolio.

These include Betterment with Wealthfront also being a viable option for those who want the best of both worlds by tracking their investments in stocks and bonds. However, these alternatives have much higher fees than what is charged by Empower which makes it an appealing alternative if the fee does not bother you.

Also, if you are looking for budgeting capabilities you may want to look at Quicken, Mint, YNAB, or Simplifi.

At the end of the day, you have to decide what your goals are and what you are looking for.

From all of the free and paid budgeting apps, here are our top budgeting apps to check out!

This section may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. Please read the full disclosure below.

Personal Capital Advisors Corporation (“PCAC”) compensates Money Bliss (“Company”) for new leads. (“Company”) is not an investment client of PCAC.

Personal finance and money management software allows you to manage spending, create monthly budgets, track investments, retirement and more.

Save 40% off on new memberships.

Enjoy guilt-free spending and effortless saving with a friendly, flexible method for managing your finances.

Change your relationship with money!

Photo Credit:
www.personalcapital.com

Personal Capital is wealth management for the Internet Age. The online platform combines digital technology with highly personalized service to provide a holistic view of a unique financial picture (AKA your net worth).

Make sure to connect all of your accounts within 7 days to set up your Personal Financial dashboard.

Tiller is the only tool that automatically updates Google Sheets and Microsoft Excel with your spending, transactions, and balances each day.

Start your free trial.

Automate your financial plan with set-and-forget money tools that fit right into your daily life.

That’s why Qapital puts your goals front and center, then helps you plan your spending, saving, and investing around them.

Manage your money less in 5 minutes each week. Reach your money goals with confidence! The personal finance app gives you something to look forward to.

“The easiest, most comprehensive way to both see where your money is going and plan for future expenses.”

Your automated financial assistant and budget tracker are designed to put you back in control of your money.

Stay on top of your spending, easily track bills, cancel unwanted subscriptions, and find ways to improve!

Photo Credit:
moneybliss.org

HoneyMoney increases your awareness about your money habits. Being fully aware of your money naturally changes how you spend it.

Great way to use cash flow budgeting. Plus uses “envelopes” to budget.

Start your free trial.

Moneyspire is user-friendly personal finance and small business accounting software that brings your entire finances together in one place.

Have total control over your financial life in one click.

Is Empower right for you?

Empower is a company that offers tools for personal finance management. This app has more than one hundred different tools to help you with your finances, including monthly budgeting and investing tracking.

Empower also helps people manage their credit card debt, establish emergency funds, track retirement savings progressions, calculate their net worth, and much more!

The smartphone app integrates locations, bank accounts, and credit scores which allows users to access current information on their financial situation.

The online portal allows for comparing available investment options.

This tool allows people to plan out the future of their money as well as provides them with valuable financial information in an easy-to-read format so they can make informed decisions.

As stated before, Empower is a financial app that can help you manage your investment assets. It has many features and it’s not perfect, but it’s the best out there in terms of value for money.

You can always test drive it and see what you learn about your personal finance situation.

Now you can try it free (no credit card required!)

Source: moneybliss.org

Apache is functioning normally

May 23, 2023 by Brett Tams

Save more, spend smarter, and make your money go further

So far in our home buying series, we’ve covered some of the basics that you need to know if you want to buy a home. In Chapter 2, we went over important resources for first time home buyers. In this third chapter, we’ll go over the basics of how to save for a house.

Buying a home can be a long and arduous journey, but having a stable place to live that’s all yours will make it all worth it. But before you can make an offer on a house, you need to learn how to start saving for a house.

When you buy a home, you’re making an investment in yourself and your future. You’re building financial stability, equity, and experience. You have a place to call your own and you can customize the space just how you want. Yet, you might be wondering how to get to that point

This is why saving up is so important.

There are some upfront costs to owning a home—primarily making a down payment. Find out how much you should budget using a home loan affordability calculator and figure out how to save the amount you need. After all, the best way to save for a house is to formulate a budget that helps you work towards your saving goals step by step. Soon enough, you’ll be turning the key and stepping into a home you love.

Step 1: Calculate Your Down Payment and Timeline

When figuring out how to save for a house, you may already have a savings goal and deadline in mind. For instance, you may want to save 20 percent of your home jumbo loan cost by the end of the year. If you haven’t given this much thought, sit down and crunch the numbers. Ask yourself the following questions:

What is your ideal home cost?
What percentage would you like to contribute as a down payment?
What are your ideal monthly payments?
When would you like to purchase your home?
How long would you like your mortgage term to be?

Asking yourself these questions will reveal a realistic budget, timeline, and savings goal to work towards. For instance, say you want to buy a $250,000 house with a 20 percent down payment at a 30-year loan term length. You would need to save $50,000 as a down payment and, at a 3.5 percent interest rate, your monthly payments would come out to be $898.

How much you need to save also depends on the type of loan that you use to purchase your home. For example, conventional loans and FHA loans require you to make a down payment, but some government sponsored loans do not. Before you can buy a house, it’s important to educate yourself on the differences between FHA vs. conventional loans. FHA loan requirements are different from conventional loan requirements, so you need to figure out which is a better option for you.

Step 2: Budget for the Extra Expenses

Just like a new rental, your home will have fees, taxes, and utilities that need to be budgeted for. Homeowners insurance, closing costs, and property taxes are a few examples of cash expenses. Not to mention the cost of utilities, repairs, renovation work, and furniture. Here are a few more expenses you may have to save for:

Appraisal costs: Appraisals assess the home’s value and are usually ordered by your mortgage lender. They can cost anywhere from $312 to $405 for a single-family home.
Home inspection: A home inspection typically costs $279 to $399 for a single-family home. Prices vary depending on what you need inspected and how thorough you want the report to be. For instance, if you want an expert to look at your foundation, there will likely be an additional cost.
Realtor fees: In some states, the realtor fee is 5.45 percent of the home’s purchase price. Depending on the market, the seller might pay for your realtor fee. In other places, it might be more common to contract a lawyer to look over your purchase agreement, which is usually cheaper than a realtor.
Closing costs: Closing costs are typically about 3% to 6% of the house’s price. Some closing costs may be negotiable with the seller but others will fall solely on your shoulders as the buyer.

Step 3: Maximize Your Savings Contributions

Saving for a new home is easier said than done. To stay on track, consider creating a savings account that has a high yield if possible. Then, check in on your monthly savings goal to set up automatic contributions. By setting up automatic savings payments, you may treat this payment as a regular monthly expense.

In addition to saving more, spend less. Evaluate your budget to see what areas you could cut down or live without. For instance, creating your own workout studio at home could save you $200 a month on a gym class membership.

Step 4: Work Hard for a Raise

One of the simplest ways to boost your savings is to increase your earnings. If you already have a job you love, put in the extra time and effort to earn a raise. Learning new skills by attending in-person or virtual training seminars or learning a new language could increase your earning potential. Not only could you land a raise, but you could add these skills to your resume.

Sometimes, putting in the extra effort doesn’t always land you a raise, and that’s okay! When getting a raise is out of the question, consider looking at other opportunities. Figure out which industry suits you and your skillset and start applying. You may end up finding your dream job, along with your desired pay.

Step 5: Create More Streams of Income

Establishing different income streams could help your house savings budget. If one source of income unexpectedly goes dry, having other sources to cut the slack is helpful. You won’t have to worry about the sudden income change when paying your monthly mortgage.

For example, creating an online course as a passive income project may earn you only $5 this month. As traffic picks up, your monthly earnings from this project could surpass your regular monthly income. To create an abundant financial portfolio, there are a few different steps you can take:

Create an online course: Write about something you’re passionate about and share your skills online. Sell your digital products on Etsy or Shopify to earn supplemental income.
Grow a YouTube channel: Start a YouTube channel and share your skills to help others within your industry of expertise. For instance, “How to start a YouTube channel” could be its own hit.
Explore low-risk investments: From CD’s to money market funds, there are a few types of investments that could grow your cash with minimal risk.

Step 6: Pay Off Your Biggest Debts

Another way that you can start saving for a home is by paying off your debts. Before taking on more debt like a mortgage, it’s important to free up your credit usage. Credit utilization is the percentage of available credit you have open compared to what you have used. If you have $200 in debt, but $1,000 available on your credit card, you’re only using 20 percent of your credit utilization.

A higher credit utilization could potentially hinder your credit score over time. Not only can paying off debt feel satisfying, but it could also increase your credit score and prepare you for this next big purchase.

To pay off your debts, create an action plan. Write out all your debt accounts, how much you still owe, and their payment due dates. From there, consider increasing your payments on your smallest debt. Once you pay off your smallest debt in full, you may feel more motivated to pay off your next debt account.

Keep up with these good habits as you take on your mortgage account.

Another factor that mortgage lenders will look at when determining your eligibility for a loan is your debt-to-income ratio. Your debt-to-income ratio measures your gross monthly income compared to your total monthly debt payments. This number will affect how lenders determine how much house you can afford because it will tell them whether you have enough income to cover your new mortgage payments and any existing debts.

So before you consider buying a home, make sure you calculate your debt-to-income ratio.

In addition to your debt-to-income ratio, lenders will also look at your residential mortgage credit report, which is a comprehensive study of all your credit reports. You should look at your credit report before you apply for a mortgage so you can figure out if you need to increase your credit score.

Step 7: Don’t Be Afraid to Ask for Help

Whether you’re touring homes or want help adjusting your budget, don’t hesitate to ask for help. If you’re trying to figure out what your budget should look like, research budgeting apps like Mint to build a successful financial plan.

If you’re curious about additional mortgage expenses, your budget, or investment opportunities, reach out to a trusted professional or utilize government resources. Not only are they able to help you prepare for your next big step, but they could also help you and your finances in the long term.

Getting help, whether it’s from a realtor or a financial professional, can help you secure your dream home at a price you’re comfortable with. Realtors can help with everything from finding you a home to negotiating the price of the home, so don’t be afraid to ask for help. You probably need it more than you think.

Saving for a house can be an intimidating process, so you also shouldn’t be afraid to ask questions. There are many important questions to ask your mortgage lender, like the difference between pre-qualified and pre-approved or the credit score you need to buy a house. Asking the right questions could end up saving you thousands of dollars with your mortgage, so go ahead and ask away.

Step 8: Store Your Savings in a High Yield Saving Account

While you may have a perfect budget and a home savings goal, it’s time to make every dollar count. Before you add to your account, research different savings accounts and their monthly yields. The higher the yield, the more your savings could grow as long as your account is open.

Also consider the effects of inflation on home prices, home appreciation, and interest rates. As inflation rises, so do home prices. This means it’s even more important to have a sufficient amount of money saved up so you can manage a bigger down payment and pay less in interest over time.

In Summary: Set Your Goals and Get Started

When saving for a house, you may want to consider having a plan in place. By following the above tips for saving for a house, you can be more prepared to buy your dream home. To summarize, here are some of the key elements to remember when it comes to saving for a home:

First, set a savings goal to match your estimated down payment and mortgage monthly payments. Then consider adding your contributions to a high yield savings account to grow your money over time.
Don’t forget to budget for extra mortgage expenses like appraisal costs, home inspections, realtor fees, or closing costs. Keep in mind, your monthly utilities and fees may also be more expensive than your current living situation.
Prepare for the additional costs by increasing your earning potential and optimizing additional income stream opportunities.
Free up your credit utilization by paying off as much debt as possible before buying a house. Keep up these good habits throughout the length of your mortgage term.

When you purchase a home, you’re building a piggy bank for your future. Every month you pay your mortgage, you pay part of it to yourself because you own the home. Instead of paying rent to someone else, you reap your own investment when you sell. Most importantly, though, you’ll have a place that’s truly your own.

So now that we’ve covered various tips for saving for a house, you hopefully feel more prepared going into your home buying journey. In this series, we’ll be going over first time home buying resources, steps to buying a house, and more. If you’re interested in learning more about the home buying process, continue reading on to Chapter 4 in the series, which covers what credit score is needed to buy a house.

Sources: HomeAdvisor 1 | HomeAdvisor 2 | Clever | Rocket Mortgage | USA.gov

Save more, spend smarter, and make your money go further

Previous Post
Chapter 05: What Is Proof of Income?
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Chapter 02: Resources for First Time Home Buyers

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May 17, 2023 by Brett Tams

Does it seem as if the second you earn money, it goes flying off to pay for food, gas, utility bills, dining out, student loans, and everything else on your plate?

It can be hard to track where your hard-earned cash goes, and that’s where a budget can help. A budget provides a framework to see how much is coming in and what it’s being spent on, and it gives you the chance to recalibrate so you can, say, put more into savings.

Zero-based budgeting is one method that can help you account for every collar so you better understand your cash flow situation. This in turn can help you better manage your money and hit your financial goals.

How Zero-Based Budgeting Works

When building a zero-based budget, your income minus your expenses should equal zero. In other words, with zero-based budgeting, every dollar of your income has purpose.

This doesn’t mean you won’t have any money in your bank account, since you might want to allocate some of your budget to savings. Rather, using this method could help you know exactly how much you will spend, save, and invest in any given month. And depending on your monthly needs, these figures may change or stay the same.

Recommended: How to Switch Banks

How to Build a Zero-Based Budget

As with most budgeting techniques, you might want to start the zero-based budgeting process by making a list of your expenses. Start with your fixed and necessary expenses first, such rent, utilities, groceries, transportation, insurance payments, and debt payments.

You know that these payments have to be covered each month, so you could allocate income to each necessary expense. Tally these expenses and subtract them from your total income. The resulting figure could be the amount available for discretionary expenses.

Next, you could allocate those remaining discretionary funds. These expenses could include money that you pay to yourself to save for short-term goals such as an emergency fund.

Or you might target longer-term goals such as stocking an online retirement account, or other farther-along savings goals, such as a down payment on a house.

Other expenses might include entertainment, clothing, and non-essential items.

Keep in mind that some expenses might be seasonal, such as vacations or holiday gifts. You might want to determine how you’d like to save for these expenses. You may choose to allocate funds in a single month, or it may make sense to set aside a small amount over each monthly period. It might take a little bit of extra planning to figure out how much you’ll need and how to divide up the cost.

Some expenses may also be variable — for example, say you’re hit with an unexpected bill when your car needs a new transmission — and these can be tricky to deal with. One way you could build them into the budget is to have a line item such as “savings for variable expenses” to help you cover them. This line item would be different from your other savings.

A simple example of a zero-based budget for someone who makes $6,000 a month might look like this:

Rent/Housing	$3,500
Utilities	$200
Car payment	$300
Gas	$200
Groceries	$400
Savings	$750
Eating out	$200
Entertainment	$150
Student loan payments	$200
Credit card payments	$100
Total	$6,000

In this example, the person’s income less their total expenses — $6,000 minus $6,000 — equals $0. As mentioned above, every dollar has a job to do.

Finally, remember that with a zero-based budget every dollar should have a purpose. So if at the end of figuring out your expenses, you find yourself with some extra cash, it needs to go somewhere. You might want to put a little extra toward savings or pay off some debt quicker.

But if you don’t allocate the funds, they might get spent. The problem is you may not know where you spent that money, and keeping track of it is the whole point of this exercise.

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Tracking Your Budget

You might want to keep an eye on your spending throughout the month to make sure you’re sticking to your budget. This process could be dynamic. If you find that you don’t need to spend as much on one budget item one month, you could shift that extra cash into another category the next month.

If you find yourself needing extra money to cover an expense, you could look for places to save. If you find yourself with little wiggle room in your budget and need to add to or boost your existing expenses, you might want to increase your budget with extra sources of income, like a side hustle.

A Zero-Based Budget on an Irregular Income

Many people earn a variable income, whether that means being a seasonal worker or a freelancer whose earnings ebb and flow. A variable income can pose some challenges to building a zero-based budget, but they’re not insurmountable. First, you could consider maintaining a buffer of cash, or a cash cushion, to help cover your expenses as your income expands and contracts.

You could then use your previous month’s budget as a base for the current month, using the buffer to cover any shortfalls. You might want to replenish this buffer when you have extra money in a month. You may also try building your budget based on a low estimate of your monthly income to increase the odds that you’ll be able to stay within your budget.

An irregular income means that you might spend more time adjusting your budget as you income fluctuates.

Recommended: How to Transfer Money

Other Budgeting Strategies to Consider

There are other budgeting methods that may be worth a try. One rule of thumb, called the 50-30-20 rule, allocates percentages of your income to different categories. When using this rule, 50% of income goes to necessities, like housing, utilities, and food. The next 30% of income goes to discretionary spending, and the final 20% is allocated to retirement accounts and savings.

You may also consider a budgeting system known as reverse budgeting, in which you focus on savings goals rather than expenses. To use this method, you might want to determine your short- and long-term savings goals, such as a downpayment on a house, paying down student loan debt, and retirement.

You could figure out how much you need to save for those goals and then automate the savings. The money could be taken from your checking account and put into a savings account each month. You might use the money left in your checking account to pay for necessary expenses first, and the rest you could use however you’d like.

The Takeaway

Budgeting can help you take a closer look at how you’re spending your money and how you want to be spending it. By taking time to work through a budget, you could make sure that your money is going exactly where it needs to go.

Budgeting can also help you stop spending on things that aren’t important to you (things you may not even realize you are spending money on) and can help you fund the things you care about most.

It’s a good idea to find a budgeting strategy that works for you and that you’ll stick with. Budgeting apps can be a good solution to help you track your purchases, and some financial institutions offer excellent ones. An online account like SoFi Checking and Savings is one example: You spend and save in one convenient place and can keep track of your money on the dashboard. What’s more, your money earns a competitive annual percentage yield (APY) and you pay no account fees, both of which can help your money grow faster.

Bank smarter with SoFi.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.

The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with direct deposit can earn up to 4.20% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 1.20% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 4/25/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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Source: sofi.com

Apache is functioning normally

May 13, 2023 by Brett Tams

Save more, spend smarter, and make your money go further

If you dream of having a baller bank account and the freedom to kick back without a financial worry in the world, it’s possible to hack your spending habits until you’re sitting on a comfy cushion of cash. And since studies show most of us can adopt new, long-lasting behaviors after just three weeks, you could be well on your way to a richer life by the end of the month.

Let go of any worries about your bank account balance, and start living your best life today. We challenge you to take the next 21 days to establish new spending habits! Which of these money-saving ideas will YOU commit to?

WEEK 1 – Establish a Baseline

Start the 21-Day Challenge by figuring out where you stand financially and which expenses you can temporarily trim without shocking your system.

Identify what’s dragging you down

Take a good look at last month’s expenses to get an idea of how much you spent and what you bought. Budgeting apps like Mint can help you by importing and categorizing your electronic transactions in minutes, making it easy to spot areas where you’re overspending.

Identify Unnecessary Expenses: Keep an eye out for businesses you regularly spend small sums of money with and put them on a blacklist. Keep that list on your phone or in your wallet.
Don’t Tempt Fate: Avoid temptation by not carrying cash or taking a different route to work.

Buy needs, not wants

It’s no secret that the best way to save money is to cut out impulse shopping, and only buy absolute necessities.

Feast Affordably: Go food shopping once a week and stick to the list you brought with you. Eat breakfast at home, pack your lunch for work and prepare dinner in your own oven.
Pass on Premium Products: From clothing to electronics to the type of gas you put in your tank, skip the top-shelf items in favor of their more-affordable alternatives.

Use what you’ve got

Another great way to cut expenses is to be resourceful about what you’ve got lying around the house. You don’t need to start making your own soap like you’re the newest member of Fight Club, but you’ve likely got some stuff you could be putting to good use.

Expand Your Recipe Repertoire: Make homemade meals using sites like MyFridgeFood.com that let you to plug in the ingredients you have before telling you what recipes you’re equipped to cook.
Pay in Other Ways: Don’t eat out anywhere without a coupon or gift card.
Enjoy Entertainment You Own: Skip the theater this week and dust off an old DVD instead. Or start reading a new book if it’s been a while since you cracked one open.

WEEK 2 – Cut Off Some Companies

Making a few quick phone calls during the second week of this 21-Day Challenge might save hundreds on recurring expenses, and save you a mountain of money over the years.

Explore your options

Odds are that a talking gecko and an aproned brunette have been jockeying for your insurance dollars for quite some time. Maybe one of them can save you some scratch?

Inquire about Insurance: Collect quotes from competing insurance companies to see if another company offers you a better deal.
Channel Your Inner De Niro: Test your acting skills by threatening to cancel your cable or cell service because your bill’s too high. Most companies will cut you a deal before letting you leave.
Chat up Creditors: Got credit card debt? Call up your card issuer and ask for a reduced rate, or transfer your balance if it means long-term savings.

Break up with brands

Why buy the paper towels with the highest thread count or use the same sandwich bags as the Kardashians, when brand XYZ does the same job? Choosing store-brand products is an effective cost-cutting method that can save you a bundle at checkout.

Focus on Price, Not Packaging: From paper towels and cleaning supplies to painkillers, opt for more affordable off-brand products on your next trip to the store.

Ditch some subscriptions

Now that you’ve watched Beyoncé’s Lemonade, do you still need that subscription to Tidal? Canceling your underused memberships could supercharge your savings.

List Your Memberships: Make a list of any subscriptions or memberships that renew on a monthly or annual basis. Only keep the ones you can’t live without.
Flex for Free: Instead of renewing your gym membership, exercise outdoors, or take advantage of free or donation-based classes offered by many yoga studios and gyms.
Opt Out of Annual Fees: If you have a lengthy credit history and not a lot of debt, consider canceling any credit cards with an obligatory annual fee.

WEEK 3 – Hone New Habits

The home stretch of our 21-Day Challenge is all about the little things. Making small, subtle changes in your daily life and routine can lead to big savings over time.

Slay some vampires

Cut your electricity bill by unplugging “vampire appliances” that suck up power even when they’re not being used.

Stop Paying for “Standby”: If you only use your printer, stereo, or video game console a few times a week, don’t leave those bad boys plugged in day and night. The same goes for any appliance with a digital clock or standby mode.
Unplug Your Internet: No one at home surfing the web while you’re at work? Wireless routers rack up kilowatt hours faster than just about any other appliance. Turn off or unplug your modem and router before leaving home and you could save a chunk of change.
Adjust Your Temps: Turn off your heater’s pilot light during warmer months, and learn to use your thermostat’s built-in timer to reduce your bill. Raising your refrigerator temp a few degrees can also make a measureable difference in your electricity usage.

Go swapping, not shopping

Itching for something new in your life? Instead of whipping out your wallet, tap into your network of friends, family and coworkers to find a slew of items you can breathe new life into.

Exchange Entertainment: See if any of your friends are open to trading books, DVDs or video games.
Purge, Not Splurge: Take items you haven’t worn in a year to a thrift store or consignment shop, some of which offer store credit for something new to you.
Trade Your Threads: Rather than hitting up the mall, organize a clothing swap to trade outfits and accessories with your friends.

Financial freedom starts today

Start Mint’s 21-Day Challenge today and see how much of a difference you can make on your bank account’s bottom line. Tweet or comment about your cost-reduction strategies this month, and stay tuned for our recap.

Save more, spend smarter, and make your money go further

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Apache is functioning normally

May 9, 2023 by Brett Tams

How to Save for a House in 8 Steps

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down payment. Find out how much you should budget using a home loan affordability calculator and figure out how to save the amount you need. After all, the best way to save for a house is to formulate a budget that helps you work towards your house saving goals step by step. Soon enough, you’ll be turning the key and stepping into a home you love.

Step 1: Calculate Your Down Payment and Timeline

When figuring out how to save for a house, you may already have a savings goal and deadline in mind. For instance, you may want to save 20 percent of your home loan cost by the end of the year. If you haven’t given this much thought, sit down and crunch the numbers. Ask yourself the following questions:

What is your ideal home cost?
What percentage would you like to contribute as a down payment?
What are your ideal monthly payments?
When would you like to purchase your home?
How long would you like your term mortgage to be?

Asking yourself these questions will reveal a realistic budget, timeline, and savings goal to work towards. For instance, say you want to buy a $250,000 house with a 20 percent down payment at a 30-year loan term length. You would need to save $50,000 as a down payment; at a 3.5 percent interest rate, your monthly payments would come out to be $898.

Step 2: Budget for the Extra Expenses

Just like a new rental, your home will have fees, taxes, and utilities that need to be budgeted for. Homeowners insurance, closing costs, and property taxes are a few examples of cash expenses. Not to mention, the cost of utilities, repairs, renovation work, and furniture. Here are a few more expenses you may have to save for:

Appraisal costs: Appraisals assess the home’s value and are usually ordered by your mortgage lender. They can cost anywhere from $312 to $405 for a single-family home.
Home inspection: A home inspection typically costs $279 to $399 for a single-family home. Prices vary depending on what you need inspected and how thorough you want the report to be. For instance, if you want an expert to look at your foundation, there will likely be an additional cost.
Realtor fees: In some states, the realtor fee is 5.45 percent of the home’s purchase price. Depending on the market, the seller might pay for your realtor fee. In other places, it might be more common to contract a lawyer to look over your purchase agreement, which is usually cheaper than a realtor.
Appraisal and closing costs: Appraisals assess the home’s value and are usually ordered by your mortgage lender. They can cost anywhere between $300 and $400 for a single-family home.

Step 3: Maximize Your Savings Contributions

Saving for a new home is easier said than done. To stay on track, first create a savings account that has a high yield if possible. Then, check in on your monthly savings goal to set up automatic contributions. By setting up automatic savings payments, you may treat this payment as a regular monthly expense.

In addition to saving more, spend less. Evaluate your budget to see what areas you could cut down or live without. For instance, creating your own workout studio at home could save you $200 a month on a gym class membership.

Step 4: Work Hard for a Raise

One of the best ways to boost your savings is to increase your earnings. If you already have a job you love, put in the extra time and effort to earn a raise. Learning new skills by attending in-person or virtual training seminars or learning a new language could increase your earning potential. Not only could you land a raise, but you could add these skills to your resume.

Sometimes, putting in the extra effort doesn’t always land you a raise, and that’s okay! When getting a raise is out of the question, consider looking at other opportunities. Figure out which industry suits you and your skillset and start applying. You may end up finding your dream job, along with your desired pay.

Step 5: Create More Streams of Income

Establishing different income streams could help your house savings budget. If one source of income unexpectedly goes dry, having other sources to cut the slack is helpful. You won’t have to worry about the sudden income change when paying your monthly mortgage.

For example, creating an online course as a passive income project may earn you only $5 this month. As traffic picks up, your monthly earnings could surpass your monthly income. To create an abundant financial portfolio, there are a few different ways to do so:

Create an online course: Write about something you’re passionate about and share your skills online. Sell your digital products on Etsy or Shopify to earn supplemental income.
Grow a YouTube channel: Start a YouTube channel and share your skills to help others within your industry of expertise. For instance, “How to start a YouTube channel” could be its own hit.
Invest in low-risk investments: From CD’s to money market funds, there are a few types of investments that could grow your cash with low risk.

Step 6: Pay Off Your Biggest Debts

Before taking on more debt like a mortgage, it’s important to free up your credit usage. Credit utilization is the percentage of available credit you have open compared to what you have used. If you have $200 in debt, but $1,000 available on your credit card, you’re only using 20 percent of your credit utilization. A higher credit utilization could potentially hinder your credit score over time. Not only can paying off debts feel satisfying, but it could also increase your credit score and prepare you for this next big purchase.

To pay off your debts, create an action plan. Write out all your debt accounts, how much you still owe, and their payment due dates. From there, start increasing your payments on your smallest debt. Once you pay off your smallest debt in full, you may feel more motivated to pay off your next debt account. Keep up with these good habits as you take on your mortgage account.

Step 7: Don’t Be Afraid to Ask For Help

Whether your touring homes or want help adjusting your budget, don’t hesitate to ask for help. If you’re trying to figure out what your budget should look like, research budgeting apps like Mint to build a successful financial plan.

If you’re curious about additional mortgage expenses, your budget, or investment opportunities, reach out to a trusted professional or utilize government resources. Not only are they able to help you prepare for your next big step, but they could also help you and your finances in the long term.

Step 8: Store Your Savings in a High Yield Saving Account

While you may have a perfect budget and a home savings goal, it’s time to make every dollar count. Before you add to your account, research different savings accounts and their monthly yields. The higher the yield, the more your savings could grow as long as your account is open.

In September of 2020, the national average interest rate on savings accounts was capped at 0.8 percent. If you were to deposit only $100 into a high yield savings account with an APY of 0.8 percent, you could earn $80 off your investment over the year. This helps you save extra money by just putting your money into a savings account.

In Summary

First, set a savings goal to match your estimated down payment and mortgage monthly payments. Then add your contributions to a high yield savings account to grow your money overtime.
Don’t forget to budget for extra mortgage expenses like appraisal costs, home inspections, realtor fees, or closing costs. Keep in mind, your monthly utilities and fees may also be more expensive than your current living situation.
Prepare for the additional costs by increasing your earning potential and optimizing additional income stream opportunities.
Free up your credit utilization by paying off as much debt as possible before buying a house. Keep up these good habits throughout the length of your mortgage term.

When you purchase a home, you’re building a piggy bank for your future. Every month you pay your mortgage, you pay part of it to yourself because you own the home. Instead of paying rent to someone else, you reap your own investment when you sell. Most importantly, though, you’ll have a place that’s truly your own.

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Best Credit Union: Alliant Credit Union

Best for High Yields: CIT Bank

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Step 1: Calculate Your Down Payment and Timeline

Step 2: Budget for the Extra Expenses

Step 3: Maximize Your Savings Contributions

Step 4: Work Hard for a Raise

Step 5: Create More Streams of Income

Step 6: Pay Off Your Biggest Debts

Step 7: Don’t Be Afraid to Ask for Help

Step 8: Store Your Savings in a High Yield Saving Account

In Summary: Set Your Goals and Get Started

Browse Related Articles

How Zero-Based Budgeting Works

How to Build a Zero-Based Budget

Ready for a Better Banking Experience?

Open a SoFi Checking and Savings Account and start earning up to 4.20% APY on your cash!

Tracking Your Budget

A Zero-Based Budget on an Irregular Income

Other Budgeting Strategies to Consider

The Takeaway

WEEK 1 – Establish a Baseline

Identify what’s dragging you down

Buy needs, not wants

Use what you’ve got

WEEK 2 – Cut Off Some Companies

Explore your options

Break up with brands