Some, but not all, SBA loans require a down payment or an investment of money from the borrower at the start of the loan term — typically figured as a percentage of the total loan amount. A down payment can be an indication to the SBA and the lender that you are willing to invest your own money in your business and intend to repay your loan according to the terms of the agreement.
SBA loan down payment requirements
SBA loan program
Maximum loan amount
Down payment
Standard 7(a) loans
$5 million.
10% minimum.
CDC/504 loans
$5.5 million.
10% to 20%.
Microloans
$5 million.
Export loans
$500,000 or $5 million, depending on the specific loan program.
SBA disaster loans
$2 million.
*Down payment requirements and other loan terms can vary by lender.
SBA 7(a) loan down payment
SBA 7(a) loans can be used for working capital, to refinance debt, to start a business or to buy another business, real estate or equipment. Some subcategories of SBA 7(a) loans can have borrower investment, or down payment, requirements:
SBA standard 7(a): This loan type can require at least a 10% down payment when the loan is used to buy a business. In other situations, the requirement for a down payment can be left up to the lender. Standard SBA 7(a) loans offer amounts up to $5 million.
SBA Express loans: The decision on whether to require a down payment on an SBA Express loan is left to the lender. However, if the lender requires a down payment on non-SBA commercial loans, it must also require it for SBA loans. This type of SBA 7(a) loan typically has a faster loan approval time, but it’s capped at a $350,000 maximum loan amount.
There are a few specialized 7(a) loan programs that will be covered below that typically don’t have down payment requirements.
SBA CDC/504 loan down payment
SBA CDC/504 loans typically require a down payment of at least 10% from the borrower. The SBA partners with Certified Development Companies to offer these loans, which are specifically for the purchase, renovation or building of commercial real estate or purchase of heavy equipment. Loan amounts can reach up to $5.5 million.
This loan combines two types of lenders and a down payment to fully fund the loan.
Up to 50% of the loan will come from a traditional bank, credit union or other lender.
Another 40% will come from the CDC or Certified Development Company.
The final 10% of the loan is typically funded through an owner down payment.
To be eligible for an SBA 504 loan, a business needs to operate as a for-profit business in the U.S. or its territories, have a tangible net worth of less than $15 million and an average net income of less than $5 million after taxes for the past two years.
SBA loans with no down payment requirement
There are some loan programs available through the SBA, including some specialized 7(a) loans, where you may be able to avoid a down payment requirement. This is typically because the amount of money being provided is relatively small or because the loan programs are designed for very specific purposes.
SBA microloan
For businesses looking for a small amount of funding, an SBA microloan may be a good choice. SBA microloans are offered up to $50,000 and are available to for-profit businesses and certain nonprofit child care centers.
SBA microloans are available to rebuild, repair or expand your small business and the funds can be used for things such as working capital, inventory, supplies, furniture, equipment and machinery. However, the loan proceeds can’t be used to purchase real estate or pay off existing debt.
Generally, you must have some type of collateral to be eligible for an SBA microloan, but each lender will have its own lending and credit requirements. You can apply for an SBA microloan at specific nonprofit community-based organizations that the SBA has designated as intermediary lenders for the program.
SBA CAPLines program
The SBA CAPLines program, a subcategory of 7(a) loans, offers lines of credit to small businesses to meet their cyclical or short-term working capital needs. These SBA lines of credit can be as high as $5 million.
To be eligible for SBA CAPLines, your business must meet the standard SBA Loan 7(a) requirements. There may be some additional requirements depending on the specific CAPLines product that you’re applying for.
SBA export loans
SBA export loans, another type of 7(a) loan, are designed to help small businesses expand their exports, engage in international transactions and enter new foreign markets.
To be eligible for an SBA export loan, your business must be involved in exporting goods or services to foreign countries or need to modernize your operation to compete with foreign companies.
SBA disaster loans
An SBA disaster loan can be used by a business to recover from a declared disaster or the loss of a crucial employee. There are three types of SBA disaster loans, none of which require a down payment.
When is a down payment required for an SBA loan?
Down payment requirements can depend on the loan program and the use of funds. For example, the SBA sets a minimum down payment of 10% for a standard 7(a) loan when it’s used to buy a business. However, this isn’t always the case. In the Express loan program, the SBA lets the lender determine if a borrower needs to make a down payment — as long as the requirement would be consistent with the lender’s processing of non-SBA loans, too.
In general, the SBA likes to see borrowers invest their own money when they are starting or buying a business or when they’re buying real estate, equipment or some other asset. On the other hand, a down payment is less likely needed for lines of credit that will be used for working capital or for disaster loans which are designed to help a business recover.
Why do SBA loans require down payments?
The SBA and its partner lenders both know that when small-business owners invest their own money and time into a business venture, they are more likely to follow through with the full repayment of the loan.
Also, because of the partial guarantee arrangement, both the SBA and the intermediary lender have something significant to lose if a borrower fails to repay. Before taking this risk, both the SBA and its intermediaries want to know that a borrower has something to lose as well.
Frequently asked questions
How do you get a down payment for an SBA loan?
Some options to consider for a down payment include personal savings, a personal loan, investor or business partners, 401(k) retirement plan, Rollover for Business Startups (ROBS), sale of business assets, mortgage refinance or another type of loan.
Can you get an SBA loan with no money down?
SBA microloans, CAPLines, export loans and disaster loans don’t require down payments.
Is it hard to get approved for an SBA loan?
Generally, it can be easier to get approved for an SBA loan than a conventional bank loan, but SBA loans can still be hard to qualify for. Online business loans and microlenders are another option to consider, but they often have higher interest rates and shorter loan terms than SBA loans.
A version of this article originally appeared on Fundera, a subsidiary of NerdWallet.
If you’ve heard of Dave Ramsey, you might have come across Churchill Mortgage, which happens to be his mortgage lender of choice.
Why? Because like Dave, they believe that the real American Dream is debt-free homeownership, not a massive mortgage hanging over your head through retirement.
To that end, they do things a little differently than the rest of the industry. Let’s learn more about what makes them unique.
The History of Churchill Mortgage
Direct-to-consumer mortgage lender founded in 1992 by Mike Hardwick
Headquarters are located in Brentwood, Tennessee
Employs more than 400 people with branches in dozens of states
Does business in 46 states nationwide
Funded more than $2 billion in home loans last year
Did the most business in Tennessee, Texas, and California
Their main product pitch is the money-saving 15-year fixed mortgage
Churchill Mortgage is a privately-owned company that was founded in 1992, meaning it has been around for nearly 30 years.
In the mortgage industry, that makes it one of the older companies still standing and/or independent, given many were lost during the Great Recession.
It was founded by Lawson H. (Mike) Hardwick, III in Brentwood, Tennessee. He was previously one of the principal founders of Franklin National Bank until it was acquired by Fifth Third Bank.
Today, his company has more than 400 employees across a nationwide branch network in 46 states.
They don’t appear to do business in Delaware, Hawaii, Nevada, or New York.
In 2019, the company originated more than $2.2 billion in home loans, a record year for Churchill Mortgage.
Dave Ramsey’s Spin on Mortgages
There’s clearly a big link between Churchill Mortgage and Dave Ramsey, with the latter’s recommendations found on the former’s website.
As you can see from the illustration above, Dave believes in a few core principles.
First off, he wants you to be debt-free when it comes to consumer debt, such as credit cards, student loans, personal loans, etc.
Second, he wants you to have at least 3-6 months of cash in an emergency fund, which is also handy for meeting minimum reserve requirements with lenders.
Speaking of mortgages, he’s all about the 15-year fixed, as you might already know, given its much cheaper interest expense versus the more popular 30-year fixed.
And he expects you to come with a down payment of at least 10%, while only committing 25% of your take-home income toward a monthly mortgage payment.
What Churchill Mortgage Offers
They originate conventional, FHA, VA and USDA mortgages
You can also get a no credit score home loan
Unclear what individual loan programs are offered
They don’t advertise their mortgage rates or disclose lender fees on their website
One negative to Churchill is the lack of information regarding loan products.
While their website is filled with lots of helpful mortgage tips and how-to articles, they’re a little light on company details.
After some digging, I was able to see that they offer conventional, FHA, VA and USDA mortgages.
That’s good news because it means all the major bases are covered with regard to loan type.
But in terms of individual loan programs, such as 30-year fixed, 15-year fixed, 5/1 ARM, etc., there’s no information.
I assume they offer all the most popular loan programs, but can’t say so definitively. It’s a bit bizarre that this information isn’t readily available.
Additionally, they make no mention of mortgage rates or lender fees, so we’re also in the dark on these key factors as well.
Without knowing any of this stuff, it’s very difficult to determine how competitive Churchill is versus other mortgage lenders.
Churchill Mortgage’s No Score Loan
They offer mortgages without a credit score
Because Dave Ramsey doesn’t have a credit score and his listeners may not either
Alternative credit such as a cell phone bill or utility bill is used instead
This establishes a history of payment behavior to determine creditworthiness
However, one of their more unique mortgage offerings is their “no score loan,” which allows you to get a mortgage without a credit score.
Why would they offer this you ask? Well, once again Dave Ramsey comes into the picture. Apparently, he doesn’t have a credit score, since he eschews all credit.
And there’s a good chance many of his loyal listeners are in the same boat, yet don’t have the money to pay all-cash for a home.
That’s where their no credit score home loans come in – they rely on alternative credit, such as a cell phone bill, utility bill, insurance premium, school tuition, child care, or rent payments.
This allows an underwriter to establish a history of on-time payments using that alternative credit.
In terms of approval, they say a 15-year fixed with at least 20% down provides the best chance of getting to the finish line.
They May Recommend a 15-Year Fixed
Speaking of 15-year fixed mortgages, there’s a good chance it might be recommended to you if you apply with Churchill.
As noted, they are big proponents of Dave Ramsey and being debt-free, and paying off a mortgage in half the time is a big step in achieving that goal.
Of course, a 15-year fixed will cost you about 1.5X your typical monthly mortgage payment, so it’s not for everyone.
In fact, many won’t qualify for a 15-year fixed due to affordability constraints and DTI maximums.
If Dave were calling the shots, he’d probably say don’t buy the house unless you can afford the 15-year fixed.
It’s unclear what Churchill’s loan officers would say, but I’m sure they offer other loan products, such as the 30-year fixed.
Applying for a Loan with Churchill Mortgage
At the moment you fill out a short form on their website
Then you are connected with a loan officer from one of their branches
The rollout of Churchill Next may change that process to a fully digital one
There is also a smartphone app that allows you to upload documents and check loan status
Like many other lenders, you start by filling out a short form on their website. This include providing basic contact info, at which point you’ll be matched up with a Home Loan Specialist.
They refer to this as the “Churchill Checkup,” a 10-minute call to help align your mortgage with your personal goals.
While the company has branches nationwide, there are out-of-state branches that serve different states. So it’s possible your loan representative could be located halfway across the country.
In any case, once paired up, they will ask you what your housing goals are and then present the best loan options available to you.
This process will likely change thanks to its new initiative known as “Churchill Next,” which is their digital transformation powered by tech company Infosys.
The partnership will enable borrowers to interact with the company in any way they wish, without compromising the values and trust Churchill is built on.
In other words, in the future you might be able to apply for a home loan via the app or website without speaking to a human, if that’s your desire.
Additionally, the use of technology should lower company costs, which could translate to cheaper mortgages for its customers.
The Churchill Smartphone App
The company already offers a smartphone app via both the App Store and Google Play.
It lets users play around with mortgage calculators to determine what they can afford, or learn more about mortgages via helpful guides.
Additionally, you can get in touch with a loan officer or check loan status if you’ve already submitted an application.
It also gives you the ability to send documents securely, either by taking a picture or sending a file on your phone. So you can satisfy loan conditions on the go.
As Churchill Next gets integrated, you might be able to do just about everything via the app in the near future.
Rate Secured by Churchill Mortgage
If you’re in the market to purchase a home, Churchill lets you lock your rate for up to 90 days while you search for a property.
This is known as a pre-lock in the mortgage industry because you’re securing a mortgage rate before actually applying for a home loan.
Now if rates go up during that time, your interest rate remains unchanged.
But if rates go down, you get to take advantage of the lower rates available.
They also let you lock in the rate for an additional 90 days if you’re unable to find a home in the initial 90-day period.
This is similar to the RateShield Approval from Quicken Loans.
Churchill Certified Home Buyer Approval
Prospective home buyers can also take advantage of the so-called Churchill Certified Home Buyer pre-approval, which is stronger than your everyday pre-approval.
Instead of just submitting financial documents to a loan officer, your information is actually reviewed by a loan underwriter, who can conditionally approve you for financing on a new home.
As such, you and the home seller will have peace of mind that your mortgage will be approved if and when you find your dream home.
This can give you an edge over other buyers, and even help you compete with all-cash buyers too in hot housing markets.
And because you’ve done the bulk of the legwork up front, it should make for a smoother home buying process once you’ve found the right home.
Churchill Mortgage Reviews
I dug around some review sites to see what people thought of Churchill Mortgage. Over at the Better Business Bureau, they have an A+ rating and have been accredited since 1995.
While customer reviews aren’t factored into the BBB calculation, there were only three reviews on the BBB website. They were all one or two stars out of five. But three reviews isn’t much of a representation.
They had over 16,000 customer reviews as of this writing at SocialSurvey, with a 4.85 rating out of 5. Most customers seem extremely satisfied.
Similarly, they come highly rated at Zillow, with a 4.97 star rating out of 5, based on nearly 400 customer reviews.
So all in all, they appear to come highly recommended by past customers. And that makes sense since the company’s goal is to help you achieve the American Dream of homeownership.
Pros and Cons of Churchill Mortgage
The Good
Seem to genuinely interested in educating customers on mortgages
May recommend loan products that get you out of debt faster
Offer mortgages with no credit score
Wide array of loan programs available
Have a digital loan process via Churchill Next
Offer a free smartphone app
Can pre-lock your rate and get a pre-approval reviewed by an actual underwriter
A+ rating with Better Business Bureau
Good reviews from past customers
The Potential Bad
Not licensed in Delaware, Hawaii, Nevada, or New York
Unclear what lender fees they charge
Do not advertise their mortgage rates
Their debt-free strategies may not be a good fit for all applicants
Living off of minimum wage in this country is extremely burdensome: mentally, physically, and financially. As one Redditor puts it:
A nice dinner out with your significant other might seem like nothing to people who make more money than I do, but that is something I have to plan for. I have to pick up shifts at work and skip a meal or two in order to take someone out and feel “normal” for a few hours. But I get up and I do it every day because I have to.
However, with a little strategy applied, there are ways to alleviate your stress in the short term, multiply your earnings, and save for the long term.
Here are seven ways to improve your life and lifestyle while living on minimum wage.
What’s Ahead:
Create a budget
While I researched this piece, my friend Steph described a moment in the life of a minimum wage earner:
I used to love Campbell’s brand soup as a kid. Aldi stocks it right next to the generic brand soup, which is $0.40 cheaper. So I stood there for a good five minutes debating whether I could truly afford the name brand soup that I wanted. But eventually, I left the Campbell’s on the shelf.
Steph’s problem, as she put it, is that she doesn’t have a budget so she never knows how much she can really spend without feeling guilty.
It’s almost ironic that creating a budget can feel both scary and tedious at the same time. But having a budget on any wage is so critical because it provides two primary benefits:
First, budgeting ensures that you don’t overspend and end up with net zero or negative earnings at the end of the month, which can jeopardize your long-term goals of financial independence.
Second, when you create a budget, you’ll learn down to the dollar how much you can spend on nonessentials each month.
As someone who’s briefly lived on minimum wage (and no wage), I can assert that it’s really hard to live life when every non-essential purchase, like Campbell’s soup or a movie rental, is laced with guilt and fear of the unknown.
Part of designing a budget is determining how much you’ll allow yourself to spend on fun and happy things without feeling guilty. Even if it’s only $40 per month on nonessentials, that’s $40 you can spend guilt-free, which is so critical to supporting your mental health.
As for which budget to follow, consider the 50-30-20 budget:
50% of your income goes to essentials (bills, food, rent, utilities, etc.).
30%of your income goes to discretionary spending (entertainment, social life, etc.).
20%of your income goes to savings (investments, 401k, etc.).
Now, you might be thinking that well over 50% of your income is already going to your essentials. To be sure, you can use MU30’s 50-30-20 Budget Calculator to confirm your suspicions. If things are tight, consider shaving 10% off of the latter two categories so your budget plan becomes 70-20-10.
Once you’ve established a budget, it’s time to start storing your money in the right places.
Open some checking, savings, and retirement accounts
There are many American households that are either unbanked or underbanked, meaning they either have no bank accounts or they have an account, but rely upon outside/unscrupulous financial institutions like payday lenders to make ends meet.
Payday lenders are extremely dangerous places to do business and should be avoided, but more on that later.
The research found that the #1 reason why these households avoid banks is that they feel that they don’t have enough money. The #2 reason is that they simply don’t trust banks.
If you hold these beliefs, I get it. Banks do sketchy things, and overdraft fees are a pain. But the benefits of opening accounts with the right bank far outweigh the potential cons.
A checking account is critical for safely storing and accessing your money on a daily basis. It also enables you to make purchases with a credit card, which can help build positive credit. Lastly, having at least a checking account will enable you to set up direct deposit with work, which we’ll talk about below.
A savings account is a rainy day fund that accumulates a little interest (around 1.0% these days, compounded annually). If you have money that you won’t need immediately but may need before retirement, a savings account is a good place to keep it.
For a great starter mobile financial app, consider Chime®. They offer checking and savings accounts, and I don’t hesitate to recommend them to someone making minimum wage because they help you build credit and charge zero fees (their whole mission is to make money off of banks, not customers)2. Plus, they make it super easy to get started.
Finally, I strongly recommend setting up a retirement account. Even if you can only contribute a few bucks a month (or a year), that money will still multiply by a factor of 10-15 by the time you retire, so it’s much better than not having any retirement savings at all. Plus, in my experience, just knowing that I was saving something for retirement was a stress-reliever.
To open a retirement account and put a few bucks in, I recommend Betterment. It’s a “robo-advisor,” meaning it’s an AI that never sleeps, optimizing your investments 24/7. You can open an account with a $10 required minimum deposit to start investing, and Betterment charges an annual fee of just 0.25% of your account balance (so no “minimum balance” nonsense here).
2 There’s no fee for the Chime Savings Account. Cash withdrawal and Third-party fees may apply to Chime Checking Accounts. You must have a Chime Checking Account to open a Chime Savings Account.
Set up direct deposit and automated bill pay
I mentioned direct deposit earlier as a benefit of a checking account. Why is that important?
Direct deposit is where you give your employer your account info so instead of writing a check, they can just directly deposit your pay into your bank account. Direct deposit is awesome because it means no more lost checks and you can get your money two-five days faster, and anyone living paycheck-to-paycheck knows that getting cash faster can make a huge difference at the end of the month.
Next, a checking account will also enable you to set up automatic bill pay. Most banks will have online dashboards where you can input recipients like AT&T and your landlord and set up automatic payments to them each month.
Now, AT&T and your leasing company might offer to automatically withdraw from your account when your bills are due, but I wouldn’t recommend this for two reasons. Let’s say you give your account and routing numbers to AT&T so they can automatically withdraw $50 each month. Regardless of how much money is in your account, AT&T will always try to withdraw $50, which could leave you without food/rent money or worse, overdrafted. Next, AT&T might simply make a clerical mistake and withdraw $500, and it can take a lot of red tape to get it back.
So instead, keep control of your automatic payments yourself so you can always quickly turn off the taps if you need to save money.
Avoid bad debt and build good credit
Never try payday loans
If you’ve ever considered taking out a loan from a payday lender, just don’t. Beg, borrow (but don’t steal) from friends and family before you walk into one of those places, because statistically, most people who take payday loans end up owing magnitudes more than they borrowed.
If you’re short on cash and friends and family couldn’t come through, you can also try Earnin. Earnin is a community-sourced app that lets you withdraw up to $100 per day from your next paycheck amount in advance. Most crucially, they don’t charge fees or interest.
Build good credit simply by getting your credit report
Next, you’ll want to start building some good credit. Your credit score is an indicator not of your wealth, but how likely you are to pay back a loan in time. Building good credit is essential because having good credit lowers your interest rates on future loans. Improving your credit score by just 100 in your 20s can help you save thousands on your car payment, or even a mortgage.
To start, you can check your credit score for free, with no strings attached, at Credit Karma. Also, you’ve probably read in the news about unscrupulous tax filing companies that dupe Americans into paying to file their taxes when it should be free. Well, Credit Karma Tax doesn’t mess around and lets you file your taxes easily, 100% free. Put a note on your calendar to head to Credit Karma Tax next April.
Build your credit by using a credit card responsibly
Aside from paying bills and loans on time, a great way to build good credit is to put your bills and expenses on a credit card. Yes, having a credit card with a big line of credit is a slippery slope for anyone regardless of income, but as long as you stick to your 50-30-20 budget and set up autopay, you’ll be fine.
Having a credit card while you’re living on minimum wage is a good idea because it can generate cash back on your existing daily expenses. I’m a massive fan of my Chase Freedom Unlimited® for this reason; it offers cash back in every category imaginable. You’ll start by earning 5% cash back on travel booked through Chase Ultimate Rewards®, 3% on dining and drugstores, and finally, 1.5% cash back on all other purchases. So there’s a little something for every category I spend in.
Plus, you can earn an additional 1.5% on all purchases (up to $20,000 spent in the first year).
Get some government benefits
If you’re struggling to make ends meet, you may qualify for some government support. The federal and state governments offer programs that provide food, utilities, healthcare, child care, insurance, phones, and more.
To see which benefits you might qualify for, visit benefits.gov.
You may also qualify to receive some help from a local non-profit group. For example, I recently did some work with Helping Mamas in Atlanta, Georgia, who supplies food, diapers, and other critical supplies to low-income mothers in need.
Do a little research and see what non-governmental resources might be available to you locally. You can also use Reddit and Facebook to connect with other minimum wage earners in your area to learn more about where others are seeking support.
Take classes, freelance, and increase your earnings
Did you know that some states offer community college for free, and most will offer scholarships to students with financial needs?
It may seem like an exhausting prospect to take classes on top of a 60-hour workweek, but learning an in-demand skill or trade at community college is the fastest way to transform your earnings into a liveable wage. According to CNN Money, graduates of a vocational program that took less than six months to complete earned an average salary of around $38,000 after graduation. If you get a two-year associate degree in STEM, you can earn twice that.
If you’re looking for a trickle of extra cash in the short term, ask yourself: is there one skill or favor that my friends keep asking me to do? Maybe it’s video editing, photography, public speaking, writing, moving, handiwork, etc. If so, start charging! Use sites like Facebook Marketplace, Nextdoor, and Upwork to list your services and start your fees above the minimums you see so people place value on your work.
Finally, if you’re already spending a lot of time gaming on your smartphone or surfing the web, you might consider earning a little extra cash on Swagbucks. Swagbucks is a safe, secure place where you can watch videos, take surveys, even play games in exchange for gift cards. It all equates to around $2 per hour so it’s less of an income stream than a trickle, but a little time on Swagbucks per day could cover a grocery bill or two.
Set some financial goals
Once you’ve taken the above steps to regain your financial footing and recoup some mental health, let’s set some financial goals.
There are plenty of “ducks in a row” apps out there that will help you organize your finances, stick to a budget, and set a reasonable goal (i.e. save for a down payment on a house) that you can track over time. However, my personal favorite and the one I recommend for minimum wage earners is PocketSmith.
PocketSmith is like a virtual financial assistant. In addition to helping you organize a crystal clear picture of your earnings and financial outlook, its most notable feature is financial forecasting. You can tell PocketSmith that you’re considering a big purchase like a new bike or a down payment on a car and it’ll actually show you how such a decision will impact your finances and savings goals.
Best of all, it offers these services, including forecasting, for free in its Basic Plan.
Summary
Living off of minimum wage is mentally and physically draining, but with some strategy, you can alleviate the stress in the short term and achieve financial independence sooner than you think.
For more on how to cut expenses and increase your earnings while on minimum wage, check out MU30’s article: How To Save And Invest When You Make Minimum Wage.
The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.
Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. In this episode:
Learn how checking your bills can prevent you from overspending, how to manage a raise and how to build wealth early.
This Week in Your Money: Sean Pyles and Liz Weston discuss how you can prevent overspending by double-checking all your bills and share how doing so saved Sean more than $100 on just a single bill. They also discuss some surprising ways bills can demonstrate that you’re getting shortchanged.
Today’s First Money Question: Smart Money co-host Sara Rathner helps Sean and Liz answer a listener’s question about how to prioritize spending and saving after a significant salary increase. The hosts dive into the 50/30/20 budget, how to combat the temptation of “lifestyle creep” that comes with entering a new income bracket, and methods for setting financial goals and establishing a path to meet them. They also look at how to prioritize debt repayment and retirement savings when you’re in your 40s or 50s and your budget may be more stretched.
Today’s Second Money Question: Personal finance Nerd Kim Palmer joins Sean and Liz to answer a question from a 16-year-old listener about how to get an early start on setting up a bright financial future. Kim discusses options for starting to save early, the time value of money and when it may be worth considering switching banks.
Check out this episode on your favorite podcast platform, including:
NerdWallet stories related to this episode:
Episode transcript
Liz Weston: Hey, Sean. When you were 16, what were you doing to build wealth?
Sean Pyles: I can confidently say that I was doing nothing at all to build wealth.
Liz Weston: Well, today we’ll give a 16-year-old listener some ideas for how they can start to build wealth early. You’ll also learn why you should double-check all your bills and how to prioritize your spending and saving when your income increases from a pay bump.
Sean Pyles: Welcome to NerdWallet’s Smart Money podcast. I’m Sean Pyles.
Liz Weston: And I’m Liz Weston.
Sean Pyles: This month, we’re bringing back some of our most popular money tips from the last couple years, so if they sound familiar, no, it’s not just you.
Liz Weston: Today, you’ll actually hear two terrific money questions from listeners. The first one is how to manage a change in your income, and the second is about how to build wealth while you’re young. But first, here’s a story we did about why you should always double-check your bills. And, yes, that means all of them.
Sean Pyles: And listener, if you changed any of your money habits around checking your bills after you heard the story the first time we ran it, then please let us know. We’d love to hear your story. Leave us a voicemail or text us on the Nerd hotline at 901-730-6373. That’s 901-730-NERD or email a voice memo to [email protected]
Liz Weston: OK, on with the show. For medical bills, restaurant tabs and even your insurance, it’s worth giving everything you’re expected to pay a little more scrutiny. Sean, this was inspired by a recent bill you received. You want to tell us about that?
Sean Pyles: I recently received a bill for $100 more than it should have been, and that inspired me to dig into what was going on and realize that I’m actually being charged for more things than I really should be. So let’s start with this bill. Basically, I have the same medical appointment every four months. It’s pretty standard. And every time I have it, it’s covered by my insurance even though I have a high-deductible health care plan.
For the latest appointment that I had, I received this bill that was for over $100, and I looked into it a little bit. I called the billing department, I called my insurance company. I had a lot of back and forth. It turns out that they coded the wrong appointment. The code that they used was one number off from what they typically use, and after talking with them for a long time, took over two hours to get this whole thing sorted out between all of the phone calls, they ended up reissuing the bill to my insurance company and it was covered. And if I hadn’t done that, if I had just accepted the bill and thought, “Oh, bummer, got to pay this bill,” I would’ve been out over 100 bucks that I really didn’t have to pay at all.
Liz Weston: Medical bills are notorious for being incorrect, for charging you things they shouldn’t have charged you.
Sean Pyles: It’s worth being pretty punctual about this as well. The moment I got the bill, I knew it was not right and so I called and I dug into it and it was resolved within a day, which is great, but it also can be a lot more of a lengthy process for those who aren’t as well-versed in how to do this. Anytime you get a bill for any sort of medical expense, it’s worth asking a couple questions, just making sure that the billing code is correct and that you are being charged what you’re supposed to be.
Liz Weston: And I’m a huge fan of automatic payments. I have almost everything on autopay, but the downside of that is you can let things slide. Cable bills, internet and satellite radio are really notorious for jacking up the price after they’ve given you some kind of teaser intro rates. That can wind up being hundreds of dollars that you don’t need to spend.
Sean Pyles: And somewhat similar to my experience with the medical bill, I also recently had a prescription that, because I’m on this high-deductible plan, was not covered by my insurance. So I talked with my medical office and they said, “Oh, just charge it through GoodRx. Here’s the price that I’m seeing.” I’ve talked about GoodRx before, but I’d never actually used it. So I finally signed up, and I was able to save half off what the pharmacy was originally asking me to pay.
Liz Weston: That’s something about those high-deductible plans. They really inspire you to look around for some savings.
Sean Pyles: But that’s where the health savings account comes in pretty handy. So I could have just expensed it, but again, I’m trying to have as much money in there as possible so I can invest it.
Liz Weston: One of the things you can do to make sure that you’re not overpaying is keep an eye on your transactions, whether you autopay or not, making sure that you review your transactions. I try to do it every month or so. And our app, the NerdWallet app, is a really good way to keep track of a bunch of different accounts at once and look at those transactions. Is that something you do or is that something you have to remind yourself to do?
Sean Pyles: So I am a big weirdo who pays off my credit card almost daily because I used to have credit card debt years ago and it’s something that has stuck with me, this almost hawkish approach to making sure I’m keeping my spending in check. So I look at it more than maybe I should or most people would even want to, but it helps me know that what I’m paying is what I should be paying.
I actually had another similar experience to this, touching on the whole aspect of making sure you’re getting billed correctly at restaurants and bars, where I was recently going through my credit card statement and I saw a charge for a bar that I went to. I only had one drink, but I was charged over $70. And I realized that my friend was trying to close out their tab. Everything they had been charging wound up on my credit card. So we had to sort it out. It was fine in the end, but it’s a reminder to double-check everything you’re being charged because that really stood out and if I hadn’t double-checked and looked at this closely, I would’ve been paying that.
Liz Weston: And that’s not something you want to do.
Sean Pyles: No. As much as I love my friends, I don’t want to shell out $70 for their tater tots and beer. Another thing that I’ve been thinking about, I recently discovered that Target and Best Buy in particular have excellent price matching policies. So if you’re looking for something and you see that it’s a little bit more at Target, but it’s easier to shop at Target because it’s in your neighborhood and you don’t want to rely on shipping or something like that, you can say, “Hey, here’s what I’m seeing at this other retailer. Can you price match me?” And they pretty much will.
Another area folks should look into if they don’t want to be overcharged is their car insurance. While a lot of people will just be tempted to sit with their same car insurance company year after year, one analysis found that folks could save an average of $560 by shopping around for car insurance.
Liz Weston: OK, that’s some serious cash. And I know we’ve talked about this before, but again, it’s something that’s really easy to leave on autopay or leave on automatic and not realize that you can save a ton of money with just a little bit of effort.
Sean Pyles: Absolutely, and the Nerds on the insurance team found that the ideal cadence for shopping for car insurance is once a year.
Liz Weston: OK. I think I can manage to do that.
Sean Pyles: Yeah, just set aside an hour, maybe even less, on a Sunday afternoon and just knock it out. Liz, I know you recently had an experience not getting the credit you deserved for credit card purchases and points. What happened there?
Liz Weston: Yeah, well, the big one has to do with a voucher for a trip we had to cancel in 2020, and it’s a fairly substantial voucher. It’s for $2,500.
Sean Pyles: Oh, wow.
Liz Weston: Yeah, I can’t find it on the airline site and customer service is so backed up. I actually got an email when I inquired about it. It’s like, “Why isn’t this voucher on my account?” They say they’ll get back to me in 10 weeks. Excuse me?
Sean Pyles: OK.
Liz Weston: That’s kind of a outlier, but I’ve noticed when you sign up for, say, money-back offers on your credit card, you can get $50 off if you spend $250. Half the time I have to go to the customer service line and say, “Hey, I didn’t get credit for this particular purchase.” So again, the credits are inducing you, those offers are inducing you to spend money. If you do it, make sure you follow up and make sure you got that money.
Sean Pyles: Yeah, make sure they’re following through on their word.
Liz Weston: Because they don’t always do so, and again, we all get busy and it’s easy to let it slide, but this can add up to real cash.
Sean Pyles: All right, well, I think that about covers it. Let’s get on to this episode’s money question.
Liz Weston: This episode’s money question comes from a listener’s voicemail. Here it is.
Speaker 3: Hi, guys. Thank you for doing the podcast. I really appreciate it. I have a question about prioritizing. So I’m in my late 20s and I am about to have an over $200,000 pretax income after basically never having a salary before. I’m starting at a big law firm. And I have about $100,000 in debt from grad school, some of which has, I think, a 6.8% interest rate. And I just have no idea whether to start by putting any of that excess income into a 401(k), into a Roth IRA or going against my student loans. What’s the smart order to go in here? Thank you. Bye.
Sean Pyles: To help us answer our listener’s question, we are joined on this episode by our occasional Smart Money co-host Sara Rathner. Hey, Sara, welcome back on.
Sara Rathner: Thank you. It’s fun to be on the other side of the proverbial microphone today.
Sean Pyles: Yeah. Well, we are going to grill you, so I hope you’re ready for it.
Sara Rathner: Oh, boy.
Sean Pyles: Our listener is about to experience a sudden and dramatic change in their personal finances, and I think that they should probably take some steps to set themselves up for success and make sure they’re managing their money properly going into this new phase of their life and their career. And where do you think they should start?
Sara Rathner: Well, one, acknowledge that this is a very nice problem to have. Congratulations to our listener for getting this job offer coming out of law school. That’s a big deal, so you should be proud of yourself. Whenever you experience even a somewhat major life change, like an income increase or decrease or new job or relocation for work or anything like that, it’s a great time to ask all of these questions. All the questions that this listener is asking are great. And you never really want to go into these situations just thinking that “I can just keep managing my money the way I did before,” because things are different. So it is good to take stock of what you’re doing currently, if it’s working for you, what more could you be doing with your new situation? And earning $200,000 a year, even if you have substantial grad school debt, it’s the kind of thing that can give you a really nice head start in life if you play your cards right. That’s what we are here for. We’re here to help you with it.
Sean Pyles: Right. Well, one thing I was thinking is that it would be helpful for them to take stock of their income and expenses, basically getting a grip on their new budget. One tool that we like to recommend is the 50/30/20 budget, where half of your income goes to cover needs. That’s rent. Thirty percent goes towards wants. That’s kind of fun things like travel. And 20% goes towards debt payments and savings. And with a pretty hefty income that our listener has, I think they should be able to use this pretty well.
Sara Rathner: Something that’s a big adjustment when you’re new to working is figuring out how much you cost. Because your life might have been very different when you were a student. Maybe you were being supported financially by family or you were working part time while in school, living with roommates.
Sean Pyles: Living off of ramen noodles.
Sara Rathner: Living the student life, and now you are out into the world potentially taking the rein of your finances on your own for the first time possibly. And so figuring out how much do blueberries cost. You know what I mean? It’s the little things you need to know. And that’s going to take some time, but it’s OK to take a couple of months and just sort of observe your spending and formulate a budget based on where your money is going and then also where you wish it would go if it’s not going where you want it to go.
Liz Weston: Well, and if somebody is jumping from being a broke law school student to having $200,000, it’s going to be really hard not to go nuts. Buy a new car, get a great apartment, buy clothes, do everything.
Sara Rathner: Yeah. Listen, I know you want the Tesla. OK? We can talk for a second. You don’t need the Tesla yet. This is not Tesla time.
Sean Pyles: And also there are plenty of other great cars besides Teslas. Let’s say that, too.
Sara Rathner: Yeah, if you aspire to Tesla, do it. They’re beautiful. But it is just important to recognize where you are, especially when you’re going into big law. The lifestyle creep temptation has got to be significantly higher than it is in other industries because it’s one of those industries where depending on what firm you work for, what city you live in, how you look matters.
It matters to clients, it matters to the partners, and how you look is, it’s how you dress, it’s what you drive, it’s how you arrive. You know what I mean? Do you golf on weekends? That’s a very expensive hobby. Do you ski? I don’t know. These are people who do things like this. And you are entering this world. And if this was not part of the world that you grew up in, it could be a real adjustment, too.
Sean Pyles: Well, yeah, that also brings me to the point that I think our listener should think about their financial goals and they can set them for one, three, five years down the road and then actually establish a path toward meeting them.
Sara Rathner: Yeah, that’s really big. The listener in their question asked about retirement savings and they asked about student loan debt. But there’s a lot of other things you have to plan for in life. You’re not just paying off your student loans and retiring. I would hope that you do other things and those other things are going to cost you money, like potentially buying a house or traveling, or maybe you want to help family out financially. Maybe you want to have children eventually. If you are working in a big law firm, child care is definitely going to be something to budget for because you work long hours. There’s a lot of life that happens in between grad school and retirement, so it’s important to list out what those things are for you and then begin putting some numbers behind them and begin making some monthly savings goals for those things.
Liz Weston: We should also make the obvious observation that you don’t net $200,000. And when you’re up in that stratosphere, you might be a little shocked at how much comes out in taxes. So figuring out what your after-tax income is going to be will really help with the 50/30/20 budget, but it will also help you right-size some of your expectations, so about how much you have to spend for an apartment, how much you have to spend for a car.
Sean Pyles: One tool that might be helpful is having a savings bucket strategy that I’m super fond of. And, Liz, actually, you turned me onto this.
Liz Weston: Oh, cool.
Sean Pyles: For me, I have half a dozen different savings accounts with different goals attached to them, and I have a certain percentage of my income go into them each paycheck, so that way I am saving toward different goals. One of them is just fun money, and that is my general bucket of cash that I have for things like travel and gifts for friends and restaurant night outs, things like that. So you can have fun with this, but I think it’s important to give every dollar a purpose.
Sara Rathner: Yeah, that’s super helpful. And when you name your goals, I think there’s studies that back up the fact that if you have a named goal, you save more, more quickly than if it’s just, “This is my savings account. It’s for saving.”
Sean Pyles: It can help gamify it because you’re seeing how much more you’re getting each paycheck.
Sara Rathner: Right. Yeah. And that way you can say like, “Hey, in five years I’m celebrating a milestone birthday and I want to take a big vacation and I’m going to budget five grand to do that.” OK, so you have to save $1,000 a year towards your vacation. Divide that by 12, set that money aside, make an automated transfer into your vacation account, and when you’re ready to book, you have the money. You don’t have to take on debt to take that trip.
Liz Weston: And you’re doing more than one thing at a time. People can get really focused on, “I’m going to pay off all my debt and then I’ll save for retirement.” No, you do it at the same time because you want to take advantage of the time value of money and multitasking is the way to go.
Sean Pyles: But there is also a balance between multitasking and prioritizing where you put your money, which is the question that our listener had. So Sara, what are your thoughts on how to prioritize different financial goals and ways to direct money?
Sara Rathner: All right. There are the big goals like retirement, buying a house, getting married, things like that. Retirement is big. Everybody has a different vision of what they want their retirement to look like, but there will be a point in your life where you can no longer work. So even if you want to work until you’re 80, your body might have other ideas and you’ll have to quit earlier because of medical issues. That’s unfortunately really common.
You do need to plan for an eventual time period where you’re not working anymore where you might have higher medical expenses, things like that. And so you’re young, you’re just out of grad school, you’re just getting started, and Liz mentioned the time value of money. Getting started early means that you can save less every month and end up with more money when you’re in your 60s or 70s than if you wait until you’re in your 40s or 50s to try to catch up.
That’s how compound interest works. The more time you give it, the better off you’re going to be, and the less aggressively you’ll have to save. And when you’re in your 40s or 50s, you might not have the money in your budget to save that aggressively for retirement because by then you might have kids in college and your vacation home and your fleet of Teslas or whatever, and you’re just not going to have as much money every month to put into your retirement account. And so start early when your life is a little simpler and just save, save, save.
Sean Pyles: But prioritization can also be a matter of personal preference, too. Maybe our listener really doesn’t like having that six-figure student loan debt hanging over them, so that might be something they want to prioritize just because psychologically that would benefit them.
Sara Rathner: Honestly, that’s what I did with my student loans. I thankfully did not have $100,000 in debt, but I did have debt. And every year before tax time, you get a letter in the mail that tells you how much interest you paid over the year. And I remember I was making my minimum monthly payments every month, and then I get this letter and it tells me how much I paid in interest, and that letter made me mad. I was like, “I just spent this money to literally just have debt.” And I was upset. I took a hard look at my budget and I was like, “How much more can I put toward this every month?” And I put an extra $40 a month toward the principal for a while, and when I got down to the last thousand dollars, I paid it all off.
Sean Pyles: Nice.
Liz Weston: Sweet.
Sara Rathner: If having that number hanging over your head annoys you or makes you angry, that’s a good thing. That’s power. You can put that anger to work. Even if you can put an extra $25 to $50 a month into the principal, it’s something. It will chip away that debt that much faster. If you get an annual bonus, for example, from your law firm — a lot of law firms do that — it could be that you set aside a certain percentage of your annual bonus and put it toward the principal of your loan just to chip away at that faster, so that’s another way that you can prioritize that debt.
Liz Weston: The interest rate they’re paying makes me think that they probably got federal student loans. It was probably graduate PLUS loans, and if that’s the case, they’re probably going to get pitched to refinance those loans into private loans just to lower the interest rate. And I’d be really hesitant about doing that just because federal loans have a ton of protections, as we know from the pandemic pausing the payments for so long. If you lose your job, if you have any kind of economic setback, you’ve got some flexibility there, whereas private student loans don’t have that as much.
Sean Pyles: Mm-hmm.
Liz Weston: If they do happen to be private student loans, then refinancing can be a great idea because it just lowers your interest rate and you’re not losing anything. But you do lose something very substantial if you’re trying to refinance federal student loans. And this is relatively high rate debt, and I doubt that they’re getting any kind of tax break on it. Usually we say, “Don’t worry about your student loans, let them ride, you’ve got more important things to do with your money.” But in this case, I endorse paying some of that down.
Sean Pyles: That brings me to another question from our listener, which is, what is the quote “smart order” to do things in?
Sara Rathner: That’s a million dollar question, isn’t it?
Sean Pyles: Yeah. I think the answer is that there maybe isn’t one specific, perfect smart order to do things in.
Liz Weston: Yeah, I think it’s very individual. With most people, you’ve got to prioritize retirement because most of us are going to get there, most of us are going to need the money, and it takes a long time. That’s an expensive goal. But if this debt is bothering you and you want to pay it off faster, that would be the next thing for me.
Sara Rathner: Obviously, if something’s a top priority and this listener mentioned retirement and debt, sounds like that’s on their mind. That could be a good place to start. Getting yourself set up so that you have your automated payments into your student loan so you know that money’s going out every month on time. Do you want to add to those payments and overpay your loan to some extent? Go ahead and do that. You also automate your retirement savings if it’s through your employer. That comes out of your paycheck automatically. When you start your job, there’ll be some paperwork to fill out, but get that going. Don’t delay. Get that money into your retirement account, select your investments and just let that money accumulate over time.
So once you automate all those things and you learn to live without that money in your bank account every month, that’s when you can really start thinking about, “OK, well this is what I have left. What do I want to do with it?” And that’s where that 50/30/20 budget comes in. And what you want to prioritize can change from year to year. You might prioritize living super cheaply so you can save up for travel, but then the next year you finish your trip and you’re like, “I hate my apartment. I don’t want to live with roommates anymore. Now I want to prioritize finding an apartment that’s just mine that maybe is a little bit nicer.” That’s going to cost you more money. Leave room in your plan for those changes because you’re at a point in your life where a lot’s going to change from year to year.
Sean Pyles: You kind of touched on getting things set up to begin with, and I think that’s something that is very smart to do first, if possible, because there’s a certain amount of administrative overhead involved in setting up your savings accounts. As you mentioned, getting your retirement savings and contributions and investments all organized. And that might take a good Sunday afternoon set aside to dive into, but then once that’s done, you pretty much have it going in the background and your money is going where you want it to.
Sara Rathner: Yeah, you revisit it every couple years, but for the most part, those things can run on autopilot for a while.
Sean Pyles: Right. All right, Sara, do you have any final thoughts for our listener?
Sara Rathner: Well, it’s just like we said, this is a huge change for you. You’re going from being a student to making a substantial annual salary, which is amazing, and this gives you options. Don’t sleep on how well you can set your life up with this income. This is a really great time to sit down and make a plan for yourself and really think about where you want your money to go, how hard you want it to work for you. You do work for clients as a lawyer, right? So think of it as if you are your money’s client, and it’s got to work for you or else you’re going to fire it. Well, you can’t fire it, but you know what I mean? We’re trying to make a metaphor here. Just go with it. But really the people I know who have made it to their mid-30s and later who are financially comfortable for where they are in life are people who didn’t ignore this stuff when they were in their 20s.
They’re the people that used that time to set a good foundation for themselves. The people who just kind of, well, winged it, they’re like, “I make money, I spend money, whatever, it’s all in my checking account. I don’t know,” they’re the ones who are hitting their mid-30s and they’re like, “Why can’t I afford a house? I don’t have a retirement account. Should I have a retirement account?” Yeah, yeah, you should. Because, yeah, we’re millennials. We’re not going to have any social safety net, right?
We do need to save for these things. That’s the advice I would give to you. As somebody who’s been out of school long enough and who has friends in the same boat to see all the different choose-your-own-adventure paths people have taken, I would say, “Use this time wisely.” You can still have fun. You can still do all the things you want to do, but you could do it because you know you’re also doing the things you have to do.
Liz Weston: That is an excellent point, Sara.
Sean Pyles: Well, thank you so much for talking with us.
Sara Rathner: Thanks for having me back, guys.
Sean Pyles: Before we get into the next money question, I wanted to mention that this is probably not the first time you’ve heard us suggest the 50/30/20 budget and it probably won’t be the last. The tool is a handy framework to get a grip on your spending so you can be more intentional about directing your income. If you haven’t already looked into it, then I hope you do now or maybe the next time we bring it up, and we definitely will. OK. Now let’s get on to the next money question.
This episode’s money question comes from Luca. Here it is. Hi, Wallet Nerds. I have used NerdWallet for quite some time and recently discovered your podcast, and I am a very big fan. I have a few questions I would like to ask of the show. I’m 16 and, as you can tell by me emailing you, a personal finance nerd. I want to know if there’s anything I can do now to help my financial future. I have a job, IRA, checking/savings account, and I am an authorized user on my parents’ credit card. Is there anything else I can do? Because I’m a personal finance nerd, I also like looking into various accounts. I am not very satisfied with my current bank and want to switch. Are there any cons to having multiple accounts? What about closing old accounts? I feel confident in my ability to manage them and keep track of my money. Thank you very much. Sincerely, Luca.
Liz Weston: I love Luca. Luca is our kind of nerd. Getting an early start with investing is always good, but getting started as a teenager, that is huge. Those extra years could more than double the amount that Luca can put aside for retirement. This is awesome. Anyway, to help us answer Luca’s question on this episode of the podcast, we’re joined by one of our own personal finance Nerds, Kim Palmer.
Sean Pyles: Welcome back to the podcast, Kim.
Kim Palmer: Thank you so much for having me.
Sean Pyles: Our listener, who is the youngest that we’ve ever heard from, is looking for some advice about how to jump-start their financial future. What do you think?
Kim Palmer: First, I think we have to acknowledge that they’re off to such a strong start because so many people aren’t even thinking about money yet. I think it’s really great that they’re already so far ahead. There’s one area actually that they didn’t mention and that is spending. I think it might make sense to take a deeper dive into how they’re currently spending money.
One thing I’ve noticed is that once you get in the habit of saving and of spending less than you’re earning, it’s easier to maintain. What a perfect time to start that habit when you’re a teenager. One tool we love at NerdWallet is the 50/30/20 budget, and that basically allots your take-home income into three different categories. You have 50% going toward needs, you have 30% going towards wants, and 20% going towards any debt payments and savings. Now, as a teenager, everything might not apply to you there. For example, you don’t probably have rent right now or a mortgage, but I still think it’s a useful tool just to start thinking about where your money is going.
Sean Pyles: I also think our listener should appreciate the really unique opportunity they have by starting building wealth so young. There’s the saying that youth is wasted on the young and for so many, so is their time horizon for saving for retirement and investing. But I think that Luca might be an exception to this, and as you nodded to, Kim, because they’re starting so young, they don’t have as many financial obligations. They probably don’t have student loans or a car payment or a rent, so they can maybe fudge the 50/30/20 to make it so that they can save a lot more right now.
Kim Palmer: I think that is a great idea. When it comes to investing, you do have to be 18 to actually go ahead and open up a brokerage account, but it can definitely be something that you do along with your parents and, as Liz mentioned, when you do start investing early, you have a head start. You have so much more time to grow your money.
One thing I like to do with my kids is go through a company like Stockpile and buy fractional shares of really big companies that you’re already familiar with. For example, with my kids, they can take $25 and buy Netflix or Disney and see how the stock fluctuates, and I think it can just be a way to get your head around what investing feels like, see if you like it.
Liz Weston: Yeah, because one of the problems with getting started with investing is that sometimes the buy-in is really high. Shares of companies that kids know and recognize might be $100 or more, and that’s not easy to get started with. Or if they’re looking at mutual funds, they can have an even higher minimum investment, so these fractional shares are a good way to get an early start.
Sean Pyles: But they will have to be 18 to open one of these accounts? How can they get around that? Is it that they’ll open one with their parents, and are there also any other limitations that Luca shouldn’t look out for because they are still under 18?
Kim Palmer: There is definitely a limitation in that you have to be 18 to open some of these accounts, but the easiest way around it is if you do have the help of your parent, then they can do it for you or you can do it jointly. Liz, do you think I’m missing anything else he should be thinking about?
Liz Weston: You’ve got to consider financial aid. If you think that you’re going to need financial aid to go to college, then you don’t want to have this money in the child’s name. Or you can do a workaround, which is to open a Roth IRA. Now, there are contribution limits to those, but Roth IRA and other retirement money is not counted in financial aid formulas, so that’s a way to get around that concern that your holdings could interfere with how much financial aid you get.
Sean Pyles: One thing I keep thinking about is how lucky Luca is to have parents that have encouraged their kid to start building a solid financial foundation really early on. Adding them as an authorized user on the credit card, for example, will give Luca an early start on building good credit. Kim and Liz, I’m wondering if you can share any other tips that you have as parents for how parents out there can help their kids get started like Luca’s parents did.
Liz Weston: Well, I think it’s like most things with parenting is that you start talking about it early and often so it’s not a subject that’s being brought up at the last possible minute. When you take your child shopping, you can talk about the cost of things and how you decide what to buy and what not to buy.
With our daughter, as soon as she was recognizing that money bought things, which was very early, like 3 years old, I want to say, that’s when we started her with an allowance. And that’s very early, but we had some good experiences with it. That’s something to consider.
Sean Pyles: And she seemed ready, right?
Liz Weston: Oh, yeah. Well, we’ve talked about this before. She was ready to save. She was ready to spend. She didn’t understand the sharing part. Why should she have to share her money? Then as she got older and she got jobs and started her own little business, we would match her earnings with Roth IRA contributions.
Sean Pyles: Oh, that’s cool.
Kim Palmer: That is very cool. My parents did the exact same thing, and I really think it helped me. I think it helped me learn how to save. One thing I’ve noticed with my kids is that from a very early age, like toddlerhood, they start asking for things, and they have no qualms about spending your money. The good thing about that is that it gives me a chance and parents a chance to say no and to explain the whole idea of scarcity. We can’t have everything we want. That’s really the basis of learning how to budget right there.
As they get older, it morphs into a more complex conversation. For example, with my 12-year-old, we can have a more nuanced discussion about saving and putting money aside so you can afford something bigger. And I think as the kids get older, you can start having those more nuanced conversations, but it really starts, I think, around age 2.
Liz Weston: Luca’s also wondering about switching banks. Kim, what do you think they should know when they’re shopping around?
Kim Palmer: It’s a really good question to look into switching banks. A lot of people are afraid to switch banks, and they just go with the flow of their current bank even though they’re not happy. I really encourage this line of thought to look at if another bank could serve your needs better. What you want to do when you start thinking about opening a new bank is first see what would be a good fit.
That starts with some online research. Where can we make sure we’re paying as few fees as possible? Where can we earn the highest APY? Where can we get the most for our money? Once you do that comparison and you choose a good fit with your new bank, you just go ahead and you transfer any money that you have into the new account, you close your old one. And it’s really not as complicated as I think a lot of people worry that it is.
Sean Pyles: Or as a lot of banks might want you to think it is to switch banks like that. I did this in the past year. I had had a goal for a while to go from the big national bank I’ve been using since high school to a local credit union in the Pacific Northwest, and it took me a while to actually muster up the energy to do it, and it took me five minutes. It was shockingly easy.
Liz Weston: Yeah, I think it’s more complicated when you have more bills to pay, especially if you’re autopaying through your bank account, so you may need to keep your old account open for a while for those to clear, but if you’re somebody like Luca who’s just starting out, you can choose whatever bank you’d like. And an online bank might be a good fit because they tend not to have minimums and a lot of fees. You can start with a small amount and build from there.
Sean Pyles: But, again, they’ll probably have to have their parents help to open any sort of account like this.
Liz Weston: Luca is obviously in pretty good shape today and is already saving for their future.
Kim, what else should Luca consider going forward?
Kim Palmer: Well, I think it really all goes back to getting in the habit of saving money. I think some of the habits that they’re establishing now really will last possibly their whole life. Of course, as a teenager, you might not have the same priorities that you will have in your 20s or 30s or beyond, so I think when you’re focused on saving and you have that savings cushion, it helps you have that flexibility. So wherever you turn, whatever priorities emerge over the next decade or two decades, if you have that savings habit, I think that gives you such a strong backbone to rely on.
Liz Weston: Yes. Absolutely. And I love the fact that you talked about the importance of saving while you’re young because a lot of people just keep putting it off thinking, “Well, in the future I’ll have more money. It’ll be easier in the future.” It is never easier in the future. Start now, do it now, and you’ll have a lot more flexibility down the road.
Sean Pyles: Well, Kim, thank you so much for talking with us.
Kim Palmer: Of course. Thanks for having me.
Liz Weston: So Luca gave us a chance to talk about the power of compounding, which is another of our favorite topics, and how an early start can make a huge difference in how much you can save over time. But we don’t want people to despair if they’re coming late to investing and wealth building. We want them to have some kind of hope.
Sean Pyles: Right. Because even small changes can make a big difference over time. Just getting a handle on your budget can be a great first step. And that’s all we have for this episode. Do you have a money question of your own? Turn to the Nerds and call or text us your questions at 901-730-6373. That’s 901-730-NERD. You can also email us at [email protected]
Liz Weston: Remember to follow our show on your favorite podcast app to automatically get new episodes. If you’re listening on Apple Podcasts or Spotify, then tap that five star button to rate the show. We really appreciate it.
Sean Pyles: This episode was produced by Liz Weston and Cody Gough with help from me. Kaely Monahan mixed this episode with additional audio editing by Cody. And a big thank you to the folks on the NerdWallet copy desk for all their help.
Liz Weston: And here’s our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.
Sean Pyles: And with that said, until next time, turn to the Nerds.
While Minnesota life did not make the Good Financial Cents® top 10 life insurance companies it did get an honorable mention and we have had great success working with this company.
Table of Contents
The History of Minnesota Life Insurance Company
Since 1880, Securian Financial Group has been the holding company and parent of Minnesota Life Insurance Company and Securian Life – as well as their affiliates. This financial powerhouse specializes in working with employers to offer financial, retirement, and insurance plans to their employees.
And, for more than 80 years, Minnesota Life Insurance Company has provided businesses with customized solutions to their employee benefit needs, as well as with expertise in administering large public and private employer plans to small and medium sized municipal employers. This insurer also offers individual insurance options.@media(min-width:0px)#div-gpt-ad-goodfinancialcents_com-medrectangle-3-0-asloadedmax-width:300px!important;max-height:250px!important
This insurance company insures more state plans than any other group insurer. It also counts 20 percent of the Fortune 100 companies as its clients. Also, it is proud to offer industry leading technology, such as the first mobile optimized website for group insurance transactions.
Minnesota Life Insurance Company Review
The unique brand of service that is provided by Minnesota Life Insurance Company has established the company as a valued partner and a premier provider in the group insurance coverage arena. Just some of the quality and exceptional service that Minnesota Life Insurance is known for includes the following:
100 percent of the insurer’s new clients recommend its implementation services;
The company pays out 99 percent of death claims within ten calendar days of receiving proof;
The insurer offers technological solutions to ease its policyholders’ administrative load;
The average tenure of the company’s staff is 12 years.
Its parent company, Securian, is also considered to be strong and stable. Securian has nearly 15 million customers, and more than 5,000 associates and representatives in its headquarters in St. Paul, Minnesota, as well as in sales offices around the country. Also, the company has more than $1 trillion of insurance in force, and in just the year 2014 alone, it paid out more than $4 billion in benefits to its customers.
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The Financial Strength and Ratings of Minnesota Life
The parent company of Minnesota Life Insurance Company, Securian, has been provided with extremely high ratings from the insurer ratings agencies. These include:
A+ (Superior) from A.M. Best. This is the 2nd highest of a possible 16 total ratings.
AA (Very Strong) from Fitch. This is the 3rd highest of a possible 19 total ratings.
Aa3 (Excellent) from Moody’s Investors Service. This is the 4th highest of a possible 21 total ratings.
A+ (Strong) from Standard & Poor’s. This is the 5th highest of a possible 23 total ratings.
Life Insurance Products Offered
Minnesota Life Insurance Company offers both term and cash value life insurance policies. Life insurance policies are individual and group in nature.
For the group plans that are offered, regardless of whether these are offered as basic or as voluntary plans, group life insurance products are considered to be the mainstay of most employee benefits programs – and Minnesota Life Insurance Company provides them all.
Group life insurance products that are offered through Minnesota Life include the following:@media(min-width:0px)#div-gpt-ad-goodfinancialcents_com-banner-1-0-asloadedmax-width:580px!important;max-height:400px!important
Group Term Life Insurance Coverage – Group term life insurance coverage offers life insurance protection for a set period of time. This type of life insurance will pay out a benefit only if the insured passes away during the term that the coverage is in force. With term life insurance, there is no cash value build up.
Group Universal Life Insurance Coverage – A group universal life insurance plan will combine the protection of life insurance coverage along with the option to build up savings with cash value. This cash value account will earn a fixed rate of interest.
Variable Group Universal Life Insurance Coverage – A variable group universal life insurance plan will offer a death benefit, and will provide the option to invest in a variety of different investments, and will also make allocations to a guaranteed account. With a variable group universal life insurance policy, the investment “sub-accounts,” there can be some both potential risks and rates of return so that employees may “customize” their investments to meet their specific financial goals. These investments can fluctuate, and when they are redeemed, they may be worth more or less than the amount that was initially invested by the employee. These plans may be designed to include a guaranteed account that offers a fixed rate of return that is guaranteed never to fall below three percent. The guarantees for the guaranteed account are based only on the financial strength and claims-paying ability of Minnesota Life Insurance Company, which are important. However, this has no bearing on the performance of the individual investment options.
Accidental Death and Dismemberment Insurance – Accidental death and dismemberment, or AD&D, coverage provides a benefit if the insured attains bodily injuries that result in death or dismemberment as a result of an accident.
Business Travel Accident Insurance – Business Travel Accident, or BTA, insurance will provide a lump sum benefit if the insured dies or is injured due to a covered accident while he or she is traveling for business.
Critical Illness insurance – If an insured is diagnosed with a condition that is covered in a critical illness insurance policy, then the lump sum benefit may be used in any way that the insured chooses. These may include making mortgage payments, paying for child care, or paying for any out-of-pocket medical costs.
Accident insurance – The accident insurance that is provided by Minnesota Life Insurance Company will offer a payout to use in any way that the insured wishes that can cover deductibles, out-of-pocket medical expenses, or even everyday living expenses.
Other Coverage Products Offered by Minnesota Life Insurance Company
In addition to term and permanent life insurance coverage, and the accidental death and dismemberment (AD&D) insurance protection, accident insurance, and critical illness insurance to both large employers and to executive groups across the nation, this insurer also partners with Zurich International Life in order to provide group life insurance coverage for global employees.
Individual annuities are also offered by Minnesota Life Insurance Company. These can help individuals to ensure that they will have an income for the remainder of their lives, by paying out a guaranteed income stream on a regular basis, regardless of how long the person lives. Also, retirement plans are also offered through Minnesota Life Insurance Company.
They have an IncomeToday! Annuity, which is an immediate income annuity (as you can probably guess from the name). With these annuities, you pay one lump sum and then you’ll start receiving paychecks immediately. If you’re getting close to retirement, you might be worried about having enough money, but that’s where these annuities come in.@media(min-width:0px)#div-gpt-ad-goodfinancialcents_com-large-leaderboard-2-0-asloadedmax-width:300px!important;max-height:250px!important
Aside from the immediate paycheck, there are several other annuity options that you can choose. One popular is a fixed indexed deferred annuity. These are annuities that are based on the performance of the markets. That means that these annuities are going to give you guaranteed income, but there is a chance that they could earn you much more.
Another type of annuity that you can choose to supplement your retirement income is variable deferred annuities. When you invest in a variable deferred annuity, there are several options for investing your money. The investment options of the annuity can reflect your risk tolerance and you can change the investments as you get closer to retirement.
Through the parent company of Minnesota Life Insurance Company, Securian, there are many additional insurance and financial products that are offered, too. These include retirement plans, investments, and executive benefits. Because employers are this company’s key market, Securian works with groups in identifying the right plan types for their needs – from profit sharing and 401(k)s to defined benefit and cash balance plans.
The 401(k) plan design options are based primarily on employer goals, as well as the budget and demographics of the particular employer. Investment options can be selected from more than 5,800 unique investment options, and investment allocation portfolios are based on age or risk tolerance. Profit sharing and matching contribution components are also available.
While few employers offer defined benefit plans today, Securian helps companies to differentiate themselves and offer their employees the security of knowing that they’ll have an income for life with a pension income. Regardless of how the investments in the plan perform, the participants in this type of plan will be able to still receive a set amount of retirement income.
Cash balance plans are also available through Securian. These types of plans can help an employer to essentially bridge the gap between a traditional defined benefit plan and a defined contribution plan such as a 401(k). The qualified plan products that are offered by Securian are done so via a group variable annuity contract that is issued by Minnesota Life Insurance Company. While the company (Securian) works with employers of all sizes, it specializes in plans that have assets up to approximately $200 million.
The Supreme Court has blocked President Joe Biden’s student loan debt relief plan, saying his administration lacked authorization under the HEROES Act to forgive up to $20,000 in student debt per borrower.
Some 43 million borrowers won’t see a cent of the debt cancellation promised by the White House last year. Under current guidance from the Education Department, borrowers must get ready to resume student loan payments starting in October on their full student loan balance.
On Friday afternoon, Biden announced that his administration was pursuing a student debt cancellation plan B. This route leans on a different legal avenue than the one struck down by the Supreme Court, and the process could take a year or longer. But a plan B remains far from guaranteed, and there is no timeline yet. Take steps to prepare for repayment now.
“Now that we have the decision, we can move forward,” says Betsy Mayotte, president and founder of The Institute of Student Loan Advisors. “There are a lot of borrowers who have been in limbo waiting to see what was going to happen.”
What did the Supreme Court decide?
The court ruled in two cases, and struck down the cancellation through the second case. All nine justices unanimously dismissed the first case, Department of Education v. Brown, because they found the plaintiffs had no standing to sue since they “fail to establish that any injury they suffer from not having their loans forgiven is fairly traceable to the Plan.” The two plaintiffs — individuals who claim they weren’t eligible for part or all of the relief — said they were harmed by not having the opportunity to participate in a notice-and-comment period for the program.
In the second case, Biden v. Nebraska, the court found that at least one plaintiff, the state of Missouri, had the right to sue. Six states sued jointly — Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina — alleging the relief would harm tax revenue in those states in addition to the finances of certain state-based loan agencies.
With standing established, a 6-3 majority of justices declared that Biden’s student debt cancellation plan, enacted under the 2003 HEROES Act, was unconstitutional. Chief Justice John Roberts delivered the opinion of the court, joined by Justices Clarence Thomas, Samuel Alito, Brett Kavanaugh and Amy Coney Barrett.
“The Secretary asserts that the HEROES Act grants him the authority to cancel $430 billion of student loan principal. It does not,” wrote Chief Justice John Roberts in the majority opinion. “We hold today that the Act allows the Secretary to ‘waive or modify’ existing statutory or regulatory provisions applicable to financial assistance programs under the Education Act, not to rewrite that statute from the ground up.”
Justice Elena Kagan penned the dissent, joined by fellow liberal justices Sonia Sotomayor and Ketanji Brown Jackson.
How did we get here and what’s next?
President Joe Biden’s student debt cancellation plan, first unveiled in August 2022, promised to erase up to $10,000 per individual borrower earning less than $125,000 annually or per married couple earning less than $250,000, and up to $20,000 for those who received a need-based Pell Grant while in college. The White House said that 90% of the relief would go to borrowers earning less than $75,000 per year.
Roughly 26 million borrowers applied or were automatically eligible for relief — and 16 million of them were approved by the Education Department and subsequently sent to loan servicers. The White House opened debt relief applications in October but closed them a month later as lawsuits swirled. The Supreme Court soon agreed to take on two of the lawsuits and held oral arguments for student debt cancellation on Feb. 28.
If you were among the millions of borrowers counting on this relief, you still have options to lower your monthly payments and even get some of your debt forgiven. Here’s what else borrowers need to know, and how to prepare for the impending end of forbearance.
What should I do now?
Get ready to make payments
Federal student loan payments are set to resume soon, with no possibility of further forbearance extensions. Interest will start accruing again on Sept. 1, and borrowers will have to resume monthly payments on their full student loan balance starting in October.
“Take your time, get very organized, identify where your loans are, what your repayment expectations are, sit down and actually create your own budget or spending plan,” says Stacey MacPhetres, senior director of education finance at EdAssist by Bright Horizons, an education and child care company. “And then take the time to figure out what you need to do.”
If you set money aside during the payment pause, consider making a lump sum student loan payment toward your balance before Sept. 1 to avoid racking up interest.
Find your servicer and set up payments
Check to see who your servicer is. Roughly 44% of borrowers now have a different federal student loan servicer than before the pandemic, according to the Consumer Financial Protection Bureau. You can identify your servicer by logging into your studentaid.gov account with your FSA ID or calling the Federal Student Aid Information Center at 800-433-3243.
Your servicer can help you do the following:
Check that your contact information is up to date.
Determine the amount you owe, the size of your monthly payments and when your first bill will be due.
Set up auto-pay. If you had this set up before forbearance, you’ll need to sign up again.
Expect long wait times when calling your servicer, cautions Scott Buchanan, executive director of the Student Loan Servicing Alliance. You may also be able to check some of this information on your servicer’s self-service online portal to avoid the customer service bottleneck.
Ask about income-driven repayment plans
If you anticipate not being able to make your student loan payment, your servicer can set you up with different payment plans and relief options. Consider asking about income-driven repayment (IDR) plans, which cap monthly bills at a set percentage of your income and erase remaining student debt after you make payments for a set number of years. If you earn below a certain income threshold or have lost your job entirely, you could pay as little as $0 per month under an IDR plan.
And a new IDR plan is in the pipeline that could cut monthly payments in half for most borrowers with undergraduate loans, and fast-track some with lower balances to forgiveness.
“I don’t know whether that plan will be ready to go in the fall,” Mayotte says. “But I know that there is a strong desire by the administration to get that plan, whatever it looks like, up and running sooner rather than later.”
If your student loans are in default
A temporary government program called Fresh Start could help if you had student loans in default before the payment pause. The program gives these borrowers the opportunity to re-enter repayment in good standing and access IDR plans and other relief.
Though borrowers will have one year to enroll in the Fresh Start program once forbearance officially ends this fall, they should apply as soon as possible, advises Michele Shepard, senior director of college affordability at The Institute for College Access & Success. The application is already open. You can sign up for the Fresh Start program today by going to myeddebt.ed.gov and logging in to your account, or calling the Federal Student Aid Office at 1-800-621-3115.
What if I can’t repay my student loans?
Shortly after the Supreme Court announcement on June 30, Biden announced a 12-month “on-ramp” repayment program. Borrowers who can’t make payments won’t fall into default until a year of missed payments, but interest will still accrue, so you should pay if you can.
Contact your servicer before you miss a payment. Ask about your options to lower or temporarily suspend payments through student loan deferment or forbearance. Start with an IDR plan, which sets payments at a portion of your income and extends your repayment term. These options can help keep you out of student loan delinquency (when a payment is late by as little as one day) and default (when a payment is at least 270 days late).
Don’t skip student loan payments. Defaulting on your loans can set off a devastating cascade of financial consequences, says Kristen Ahlenius, director of education at workplace financial wellness company Your Money Line. This can include credit score hits, seized paychecks and more.
Other ways to get help
Some nonprofit and legal organizations can offer student loan help as you navigate a return to payments. But be aware of scams, and avoid debt relief companies and anyone offering loan forgiveness. Only the government can forgive your student loans.
Here are some vetted student loan help resources to consider for information, advice or both; they are established organizations with verified histories:
“It feels like there’s a lot of fervor and panic right now,” MacPhetres says. “But there’s time, there’s opportunity, lots of repayment options and the servicers are there to help.”
The purchase of life insurance coverage is an important part of one’s overall financial planning process. Without it, loved ones, business partners, and / or other survivors can suffer some consequences. Because of that, you need to ensure that you not only have the right amount of life insurance protection, but also the right type.
Also, another key consideration is knowing that you have purchased your life insurance policy from a life insurance company that is strong and stable from a financial standpoint. This means that the insurer is in good financial standing and that it also has a positive reputation for paying its claims to policyholders. One such company that has a long such history is Aetna.
History of Aetna Life Insurance Company
Aetna has been in the business of offering wealth building and insurance protection products to its customers since the mid-1800s. This company began as Aetna Insurance Company as an annuity fund, with the purpose of selling life insurance back in 1850. It’s name was inspired by a large volcano – which is the most active in all of Europe.
Throughout the years, Aetna continued to grow and prosper – even during times of economic downturn. For example, at the time of the U.S. Civil War, there was a surge in the purchases of life insurance protection.
By the year 1865, the company’s annual income topped $1 million, and by 1864, Aetna had increased its business by 600% over its levels in 1861. Over time, the company moved into some new products – including mortgages, health insurance, disability coverage, and liability insurance coverage. It was also one of the very first insurance carriers to offer group insurance for businesses.
During World War l, Aetna also helped to fund the U.S. war effort by buying and selling millions of dollars of Liberty Bonds. The company has also participated in many “firsts,” such as being the first insurance company to advertise on television – which eventually morphed into its “Aetna, I’m Glad I Met Ya! Advertising campaign. The company also was the first to sell an employer group long-term care insurance plan, as well as the first full-service health insurer to announce a health savings account (HSA) option.
Throughout the years, the company continued its level of expansion, not just in the U.S., but also worldwide. In 1993, Aetna opened its first offices in China. It also expanded into financial services, combining its business units into Aetna Retirement Services in 1996.
Today, approximately 46 million people rely on Aetna for decisions on their health care and their health care spending. The company also continues to provide life insurance, health care insurance, and a broad range of other insurance and related financial products. Aetna is considered to be the fifth largest insurance company in the U.S., and it is headquartered in Hartford, Connecticut.
Reviewing Aetna Life Insurance Company
Aetna has been recognized for many years as an admired company in the life and health insurance industry. It has also been recognized as one of America’s most community-minded companies. The company currently employs roughly 49,500 people across the globe. In 2015, Aetna’s revenue was approximately $60.3 billion overall.
The company is known for its values, and it strives to promote this through its employees and its community involvement. Aetna promotes Integrity, Excellence, Caring, and Inspiration by listening to its customers, and acting with insight and compassion.
Aetna’s Ratings and Better Business Bureau Grade
Aetna is considered to be a strong and stable insurer from a financial standpoint. This is shown through the ratings that it has been given by the insurer ratings agencies. These include an A from A.M. Best and an AA- from Standard & Poor’s.
Although Aetna is not an accredited company through the Better Business Bureau (BBB), the company does have a grade of A (on an overall grade scale of A to F) from this entity. Also, over the past three years, Aetna has closed 567 total complaints through the Better Business Bureau.
Of these 567 total complaints, 340 of them have focused on problems with the company’s products and / or services, 191 have centered on issues with billing and / or collections, 18 had to do with advertising and / or sales issues, 15 centered on delivery issues, and 3 focused on guarantee / warranty issues.
Life Insurance Products Offered Through Aetna
Life insurance coverage through Aetna is available via employer-sponsored plans, and it is not available for individual sale. However, supplemental life insurance may be able to be purchased. This can help to boost the benefits that are available to loved ones and survivors in case of the unexpected. These plans include both basic life insurance coverage and supplemental life insurance.
Plan options include:
Accelerated Death Benefit – If, while covered under a program of life insurance, a person becomes terminally ill, they may request this plan so that additional benefits are paid out to loved ones.
Accidental Death and Personal Loss – This type of coverage offers benefits if an insured is injured in an accident or if they die due to injuries that are sustained. The amount of the benefit is determined by some criteria, which include the coverage amount, as well as the type of injury that is suffered.
Plans may include some or all of the following provisions:
Conversion – When an insured stops working and / or is no longer in an eligible insured class, or they are retired, then there may be an option to convert over to an individual plan from a group life insurance plan.
Premium Waiver – If a plan has a premium waiver, then coverage may be able to continue without the insured having to make any more premium payments.
Portability – This feature allows an individual to take their coverage with them when they leave their employer.
Child Care Benefit – This benefit will help in covering the cost that is associated with child care in a state licensed child care center in the event of the parent’s death.
Educational Benefit – This benefit can help to provide a dependent child with payment for higher education when an insured parent’s income has been lost. For spouses, this benefit can help to provide the opportunity for employment training in order to obtain income.
Repatriation of Remains Benefit – If an insured dies while he or she is more than 200 miles away from home, then this benefit will help to pay for the return of the deceased’s body to a mortuary.
Passenger Restraint and Airbag Benefit – If an insured is properly using a restraint device or if an airbag has been activated – but neither helps to save the person’s life – then this benefit will supplement the accidental death benefit amount.
Coma Benefit – If the insured or a dependent remains in a coma for more than 30 days after an accident has occurred, then they may be paid a percentage of their AD&PL benefit each month. This can occur for a pre-determined number of months.
Other Coverage Offered Through Aetna Insurance Company
Aetna offers a number of products in addition to life insurance. Just some of these include the following:
Where to Find the Best Life Insurance Premium Quotes
If you are looking to find the best life insurance premium quotes for a policy or trying to find a final expense insurance policy, then it is a good idea to work with either an agency or a company that has access to more than just one single life insurance carrier. This way, you will be better able to compare policies, benefits, and premiums – and from there, you will be able to determine which of the plans will be the best for you and your specific needs. Working with an agency who offers many quotes is not only a great idea for your purchase of life insurance but for other forms of insurance as well such as auto insurance coverage and health!
When you are ready to move forward with comparing life insurance policies and quotes, we can help. We work with many of the top life insurers in the marketplace, and we can assist you with getting the best quotes. To proceed, fill out the form on the side of this page.
We know that the purchase of life insurance can sometimes seem confusing. There are a lot of different types of policies out there to choose from – and many insurance carriers in the industry. You want to be sure that you are getting the right type and amount of coverage for your needs so that the people you love and care about can move on. Working with an expert can help you to ensure that this can happen. So, contact us today – we’re here to help.
Inside: Working mothers face many challenges when balancing work and family life. This guide offers the best jobs for moms. Find out how to maximize your career opportunities while raising children.
Moms often feel like they can’t have a successful career and be a good moms at the same time.
I completely feel that way too. I struggled to be a stay-at-home mom when my kids were little because I wanted to help out financially to help pay down debt. It took me a few years, but I soon realized there are great ways to make a mom and be a great mom!
I have uncovered plenty of jobs for moms with no degree that offers flexible hours, good pay, and satisfying work.
The best jobs for moms with no degree are ones that offer flexibility, good pay, and room for growth.
It can be tough to balance family and career, but it is possible to find a job that fits your lifestyle.
Here are the best jobs for moms with no degree or with a degree.
What jobs are good as a mom?
As a mom, finding a job that allows for flexibility and growth can be challenging, especially if you don’t have a college degree.
However, there are still plenty of opportunities out there that can help you balance your family and career.
Most importantly, you need to find a job that you LOVE! An environment that you thrive in!
With flexible schedules, remote work options, and potential for growth, these jobs can provide the stability and income moms need while still being able to prioritize their families.
Whether you’re looking for a part-time job or a full-time career, there are plenty of opportunities out there for moms.
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What are the best careers for current stay-at-home moms?
Stay-at-home moms face the challenge of balancing their family responsibilities with the desire to pursue a career.
With the high cost of child care, you need to find a job that allows you to take your kids or one that offers flexibility to work around your kid’s schedules.
Hello- that is me! I am a blogger and day trader when I’m not taxing my kids around.
Your best bet is to check out how to make money online for beginners. That is where you will find the most job options that can be done from home or offer flexible schedules, making it possible to have the best of both worlds.
What are the best careers for former stay-at-home moms?
Returning to the workforce after being a stay-at-home mom can be a daunting task, but there are many careers that are best suited for moms.
You still want careers that offer flexibility, high earning potential, and a good work-life balance.
You need to consider your previous employment, any education or certificates you hold, or skills and/or interests.
As such, the answer will vary for each person reading this post. So, consider any one of these past ideas.
Best Jobs for Moms
There are plenty of great jobs for working moms.
The key is to find a position that offers the right mix of income, hours, and flexibility.
Preferably, you want a low-stress job that pays well without a degree.
Here are jobs to consider if you’re a working mom with no degree.
1. Web developer
Web development is a highly flexible and lucrative career option that is ideal for working moms who may not have a college degree. With the ability to work remotely or part-time, web development is a perfect fit for moms who need a flexible schedule.
This field is rapidly growing and in high demand, making it an excellent choice for those looking for a career change.
To become a successful web developer, proficiency in programming languages like HTML, CSS, and JavaScript is essential. Additionally, knowledge of website design and development tools is crucial to create visually appealing and functional websites.
The skills required for web development can be learned through online courses or boot camps, making it accessible to anyone with an interest in technology and design.
Benefits:
Many web developers work from home or have flexible schedules, making it easier for moms to balance work and family life.
The demand for web developers is expected to grow, making it a stable and secure career option.
Web development is a field that allows for creativity and self-expression.
Pay: The salary for a web developer varies greatly on experience, but it is possible to make six figures.
2. Customer Service Representative
Customer service representative is an excellent career option for working moms who do not hold a college degree.
As a customer service representative, you will be the primary point of contact between customers and the organization, providing information about products and services, taking orders, responding to customer complaints, and processing returns.
You can work from home part-time or full-time, and many times the work takes place remotely. To succeed in this role, you will need to have strong communication and negotiation skills, patience, and the ability to multitask.
Benefits:
The work environment is flexible, and you can work from the comfort of your home.
Job offers great work-life balance and schedule options, making it an ideal choice for working moms.
Pay: As a customer service representative, you can expect to make from minimum wage to $20 an hour.
3. Proofreader
Being a proofreader can be a rewarding and fulfilling career for individuals who have a way with words and a keen eye for grammar. As a proofreader, your primary responsibility would be to review and correct spelling, grammar, and punctuation errors in various types of written content, such as books, websites, and social media posts.
Moreover, the earning potential as a proofreader can be quite lucrative. For instance, Caitlin Pyle, a successful proofreader, made $43,000 in one year working part-time.
To get started as a proofreader, it is important to develop the necessary skills. You can start by attending a free introductory workshop or enrolling in a course that teaches the skills needed to become a freelance proofreader.
Benefits:
Great flexibility as you work on a project basis.
The significant earning potential in the field of proofreading, especially for those who are dedicated and skilled in their craft.
Rewarding career path for individuals with a passion for language and a meticulous eye for detail.
Pay: In terms of salary, the median pay for a proofreader ranges from $15.22 to $26 an hour, depending on experience and the project you are working on. Many other proofreaders earn between $1,000 to $4,000 per month.
4. Flight Attendant
A flight attendant is a career that does not require a college degree but extensive training and certification. It is an ideal job for working moms due to its non-traditional scheduling that allows them to work part-time, take extended periods off, and get out of the house.
Flight attendants can take on trips when they know they have child care covered, and stay at home for days at a time.
Benefits:
Enjoy the perks of travel.
Flexible schedules.
Great health benefits.
Pay: The pay ranges by airline, but the median salary is $65000 per year.
5. Blogger
For moms who are looking for a flexible work-from-home job that doesn’t require a degree, becoming a blogger could be the perfect fit.
With the rise of the internet, there is an increasing demand for content writers and bloggers. These jobs allow you to work from home, set your own schedule, and choose the topics you want to write about. Additionally, these jobs don’t require a degree, making them accessible to anyone who has a passion for writing and a way with words.
Blogging is another option for those who want to write about specific topics they are passionate about and share their insights with others.
Benefits:
Be your own boss.
Flexibility blogging offers – work as much or as little as you want.
Work from home.
Choose the topics you want to write about.
Pay: As a blogger, you are creating passive income through ads, affiliating marketing, and paid sponsorships.
6. Engineer
Returning to work as a mom can be a challenging transition, but leveraging your engineering degree can open up a range of opportunities for you. With your technical skills and problem-solving abilities, there are several career paths that can offer a healthy work-life balance and flexibility to accommodate your family responsibilities.
Here are ways to utilize your degree and still have the flexibility you crave:
Pursue freelance work in your field. As a freelance engineer, you have the freedom to determine your own schedule and take on projects that align with your interests and availability. Platforms like Upwork provide a space for engineers to connect with clients and offer their services on a project basis. This allows you to work on engineering projects from the comfort of your own home, giving you the flexibility to balance work and family life.
Explore part-time or remote positions with engineering firms or companies that value work-life balance. Many engineering firms recognize the importance of accommodating working parents and offer flexible work arrangements. With your engineering background, you can contribute to projects and collaborate with teams remotely, allowing you to work from home and adjust your schedule to meet the needs of your family.
Pursue a career in technical writing or content creation. Many companies and organizations require technical documentation, manuals, and instructional materials to accompany their products or services. With your engineering background, you can leverage your expertise to create clear and concise technical content.
Work as an engineering consultant. As a consultant, you can offer your specialized knowledge and expertise to clients on a project basis. Consulting also provides the opportunity to work remotely or have a flexible work arrangement, making it an ideal option for moms returning to work.
By expanding your knowledge and skill set, you can position yourself for more opportunities and increase your marketability in the engineering field.
Benefits:
This can be done on a freelance basis or as a remote employee, allowing you to work from home and have more control over your schedule.
Take on projects that align with your skills and interests.
Have a fulfilling career that allows you to balance work and motherhood successfully.
Pay: Additionally, engineering offers high earning potential, which can help support a family and provide financial stability. Most engineers earn over $100000 a year.
7. Virtual Assistant
For working moms with no degree, finding a job that balances well with their family life can be a challenge. However, virtual assistant jobs can be the perfect solution.
As a virtual assistant with no experience, you can work from home, set your own schedule, and earn a good income.
A virtual assistant provides administrative support remotely, handling tasks such as email and social media management, scheduling appointments, data collection, customer service, and event planning. The skills required for this job include strong multi-tasking, organizational, and time-management skills, as well as basic computer skills.
Here is a virtual assistant checklist to see if you would enjoy this job possibility.
Benefits:
Be the boss of your own schedule.
Build your own small business if you desire.
Earn significant income
Pay: Most virtual assistants can earn $21 an hour or more pending experience.
8. Teacher
Teaching can be an excellent option for moms who want to work in a field that values education and have the same schedule as their kids.
Plus you can take on one of these summer jobs for teachers to extra cash.
Another option is to become a teacher’s aide that assists teachers in the classroom, helping with tasks such as grading papers, supervising students, and preparing materials. To become a teacher’s aide, you need to have a high school diploma or GED.
Benefits:
Same work hours as your children.
Work in a field that values empathy and care for children, while also providing financial stability and work-life balance.
Most teacher retirement plans are well worth working your full 30 years for that ongoing income post-retirement.
Pay: Unfortunately, teachers are one of the lowest paid salaries for the fantastic work they do. Find out if teachers get paid in the summer.
9. Substitute teacher
Substitute teaching can be an excellent job option for working moms who don’t have a degree. It offers flexibility, a chance to get teaching experience, and a decent daily rate of pay.
A substitute teacher fills in for full-time teachers when they are absent.
This experience can be helpful if you decide to pursue a permanent teaching position in the future.
Benefits:
Allows you to work when your schedule permits. You can note your availability and work as much or as little as you like.
Gain teaching experience without committing to a full school year.
Rewarding job option for some.
Pay: As of right now, there is a shortage of teachers, so the pay for substitute teachers has increased immensely. Substitute teachers can earn a daily rate ranging from $60 to $200, depending on the school district and the region with most substitutes making $22 an hour or more.
10. Consultant
As a consultant, you can use your prior work or life experience to offer solutions and advice to clients in a wide range of areas, including sales, marketing, operations, and management.
Furthermore, consulting can be an ideal way to transition your prior work or life experience into a new career and shorten the time spent in school, making it a great option.
To become a successful consultant, you need to have strong communication skills, the ability to work independently, and experience in your field to run a successful business.
Benefits:
As a consultant, you can enjoy flexible work hours.
The potential to work from home.
Ability to control your schedule.
Pay: The hourly rate for consultants varies depending on the type of consultant and the industry, with some earning high salaries.
11. Day Trader
Swing or day trading is a popular option for individuals who want to work from home and make a living from the stock market. Day traders buy and sell securities within the same day, aiming to make a profit from small price movements.
This job requires a certain set of skills and investing knowledge, as well as specific equipment and software.
It is possible to make money with stocks fast.
Day trading can be a good option for working moms with no degree because it offers flexibility and the potential for high earnings. Personally, I love trading stocks and options. I learned from Teri Ijeoma.
Benefits:
Unlike traditional jobs, day trading allows individuals to work from home and set their own schedules.
Successful traders can make a significant amount of money, with some earning six-figure or seven-figure incomes.
While a degree is not required for day trading, I highly recommend taking this investing course to jumpstart your learning.
Pay: Widely variable as it depends on your risk. You can lose money or make $1000 a day.
12. Claims adjuster
As a claims adjuster, you will be responsible for investigating insurance claims, negotiating settlements, and collaborating with other professionals such as lawyers and medical experts. To become a claims adjuster, you will need to possess relevant experience, strong communication abilities, and proficiency in data analysis.
The work environment can be fast-paced and stressful, but the potential for career growth and the flexibility to work remotely make this an attractive option for many working moms.
Claims adjusters must also maintain accurate records and documentation of all claims activities.
Benefits:
While the work environment can be fast-paced and stressful, the potential for career growth is likely.
Flexibility to work remotely make this an attractive option for many working moms.
Pay: Claims adjusters can advance to higher positions within the insurance industry, such as senior claims adjuster or claims manager. Additionally, many claims adjusters work as independent contractors or consultants, providing even more flexibility and potential for career growth.
13. Bookkeeper
As a bookkeeper, one is responsible for monitoring a company’s cash flow by keeping track of transactions and preserving copies of receipts. The job requires great attention to detail, excellent organizational skills, and an ability to analyze and interpret financial data.
This job can be done virtually, making it an excellent position for moms who want to improve their work-life balance.
Bookkeeping does not require a degree and one can earn a decent hourly pay or salary. To become a bookkeeper, one must have bookkeeping skills, which can be learned from online courses.
Benefits:
Flexible working hours, allowing them to work whenever suits them.
Great for someone who loves analytics.
Pay: Most bookkeepers enjoy relatively high hourly salaries. They can work as independent contractors or be paid as a salaried employee.
14. Nanny
Being a nanny is an excellent option for moms who want to balance work and family life.
As a nanny, you would be responsible for taking care of children, cooking, cleaning, and running errands. The best part about being a nanny is the flexible hours, which allow you to work part-time or full-time while still being present for your family.
Finding a job that allows moms to work while still being present for their families is crucial, and being a nanny provides the perfect solution.
Benefits:
Be able to care for your own children at the same time.
Find a nanny job that works for your circumstances.
Stay young and playful while working with kids!
Pay: The pay varies widely for a nanny, but once you have experience and great references, you can earn good money.
15. Marketing Specialist
Marketing can be an excellent job choice for moms looking for flexibility, potential job growth, and the opportunity to work remotely. With the advancement of digital marketing, moms can now pursue a career in marketing without having to leave their homes or work in a traditional office setting.
As a digital marketer, there are various specializations and skills that can be honed to advance in the field. These include SEO (search engine optimization), web development, content creation, and marketing strategies.
By continuously learning and improving these skills, moms can enhance their professional reputation and open doors to new opportunities within the marketing industry.
Benefits:
Ability to work from home.
Work flexible work hours that can be adjusted to fit their family’s needs.
Digital marketing also offers potential job growth and career development.
Pay: As a marketing specialist, the pay can vary greatly if you work as a freelancer or a bigger corporation.
16. Financial Advisor
Financial advising can be an excellent career path for working moms without a degree, offering flexibility and opportunities for growth.
Honestly, I know many people who have successfully entered the workforce as financial advisors.
The first step towards becoming a financial advisor is to obtain relevant certifications and licenses, such as the Certified Financial Planner (CFP) designation. Once certified, financial advisors can work for a firm or start their own business, providing financial advice to clients.
Pursuing a career as a financial advisor can offer a good salary and work-life balance, making it a great option for working moms.
Benefits:
Help others pursue a life of financial independence.
Perfect for someone who loves numbers!
Pay: The pay for a financial advisor varies greatly, but the median salary is $75000 a year.
17. Writer
Becoming a writer can be a great career choice for moms who want to work from home and have a passion for writing. With flexibility, the potential for a decent income, and no degree required, it’s an accessible and rewarding career path.
Highly recommended to take this writing course to jumpstart your networking opportunities.
As a writer, you can work as a content writer, staff writer, or freelance writer.
Content writers produce content for websites, such as blogs, news aggregators, and e-commerce sites.
Staff writers write articles for publications, such as magazines or newspapers.
Freelance writers write for clients without being permanent employees.
What’s more important is having a way with words, strong research skills, and a passion for writing.
Benefits:
Flexibility to work on a story when you are able to.
For those with a love of English, this is a great way to express yourself.
Pay: While the average hourly rate for writers and bloggers varies, it’s possible to earn a decent income in these fields.
17. Social Media Specialist
As a social media specialist, you will manage social media accounts, create and post content, increase engagement, analyze data, and monitor social media. This role requires skills such as graphic design, writing appealing content, an eye for design, and flexibility.
Moms possess many of these skills naturally, such as multitasking, creativity, and communication. These skills can be applied to social media management, including content creation, scheduling, and community management.
Social media management is also a growing field. As a result, this job can provide moms with a stable income and career growth opportunities while allowing them to prioritize their family life.
Benefits:
Great for those who personally love social media.
Easy to work anywhere.
Pay: With an average salary of $52000 a year, this job can be done from home, making it a perfect fit for moms.
18. Human resources manager
Work-life balance is crucial for working moms, and a career as a human resources manager can provide just that.
Human resources managers are responsible for managing employee benefits, overseeing hiring processes, and handling employee relations. This job offers flexibility, including the ability to work remotely or part-time.
A career in human resources management can positively impact a working mom’s family life by providing a consistent schedule that doesn’t involve weekends or holidays.
Benefits:
HR managers are in high demand in many industries, as every organization requires HR expertise to manage its workforce effectively.
Opportunities for personal and professional growth.
Make a positive impact on employees’ lives.
Ample networking opportunities with employees, upper management, and external stakeholders.
Pay: Human resource managers often receive competitive salaries, with average annual earnings exceeding $120,000.
19. Sell on Printables on Etsy
In recent years, the demand for printable products has grown tremendously, making Etsy a great platform for working moms without a degree to earn a steady income from home.
Printables are digital files that customers can download and print at home, such as wall art, planners, calendars, and invitations.
The best part is that once you create a printable, you can sell it repeatedly without having to invest more time or money.
Check out the list of the most popular printables you can create.
Benefits:
A flexible job that allows you to work from home and set your own hours.
Earn a steady income from a single printable, which means you can focus on creating new products and growing your business.
Able to start s small business.
Pay: This is a passive income. Learn how much these sellers have made.
20. Retail associate
Many moms become retail associates to get a discount from the retailer!
Working in retail can be a rewarding and dynamic career choice. Retail jobs are generally physically demanding, as employees are often on their feet for long periods and may need to lift and move heavy items.
The nature of retail work can also be stressful, especially during busy periods such as holidays or sales events. However, it can also be an opportunity to develop and utilize various skills, particularly when interacting with customers.
Benefits:
Working part-time hours while your children are at school.
Discounts to the retailer you work.
Flexible scheduling hours.
Pay: This is a minimum wage job earning $13 an hour to $18 an hour.
21. Nursing
Nursing is a fulfilling career for moms who enjoy taking care of others.
While most nursing positions require a degree, there are also entry-level jobs available for those without a degree. Certified nursing assistant (CNA) and licensed practical nurse (LPN) are two such positions.
Both positions require certification and training, which can be completed in a matter of months. Pursuing a career in nursing as a working mom without a degree offers the flexibility to balance work and family while also providing the opportunity for career advancement.
Benefits:
Flexible scheduling around what works best for your family.
Ability to work part-time or full-time.
Great career option to take fewer hours while your children are little and more hours when they are in school.
Pay: The average hourly rate for nursing varies depending on where you work. Most certified nurses make between $32 an hour to $50 an hour.
22. Transcriber
As a transcriber, you will listen to audio files and create a document that contains an accurate record of what was said. This is one of the best jobs for moms with no degree, as most transcription companies just require you to pass their test before they give you work.
To become a successful transcriber, you will need fast typing skills, attention to detail, and the ability to sit for long periods of time. You may also need to purchase special transcribing equipment, depending on the company you work for. Most transcription jobs will require the ability to type 75 WPM or more.
This is a great non phone work from home job.
With the right skills and tools, you can become a successful transcriber and earn a decent income. So if you are a fast typer with an eye for detail, consider taking a free mini-course to find out if this is the right job for you.
Benefits:
Transcription jobs from home are available remotely and work as many hours as you want.
Set your own schedule.
Make money by meeting deadlines.
Pay: Generally, transcriptionists earn around $19 per hour in the US, but this can be more depending on your employer.
23. Graphic Designer
Graphic design is an excellent job for working moms with no degree, as it allows for significant flexibility in working hours and can be done from home.
As a graphic designer, you will be responsible for creating logos, designing websites, and developing marketing materials such as brochures and flyers. To succeed in this field, you’ll need to be creative, detail-oriented, and able to work with clients to meet their specific needs.
Benefits:
Balance their family responsibilities with a fulfilling and rewarding career.
Perfect to showcase your creative side.
Pay: With a median annual wage of $48000 per year, graphic design is a lucrative career that offers plenty of room for growth and advancement.
24. Online Coach
Being an online coach is a great job for individuals who are looking to earn money online without a degree. While some online coaches do gain certifications, it is not always necessary.
There are several types of coaching fields to enter, including career coaching, life coaching, health coaching, family coaching, and fitness coaching. It is advisable to choose a field that you have experience in or feel comfortable handling.
As a life coach, for example, you can assist clients in achieving their goals, dealing with self-esteem issues, or working on relationships.
Benefits:
Freedom to set your own schedule and work from home, which allows you to balance work and family responsibilities.
Potential to earn a good income, especially if you specialize in a high-demand niche and build a strong client base.
Viable career option for working moms without a degree.
Work remotely from their computers and communicate with clients online.
Pay: Most coaches make between $30 an hour – 100 an hour pending experience.
25. Counselor
Counseling is indeed a vital service that plays a crucial role in helping individuals and families overcome difficult challenges.
As a counselor, you work closely with clients to address various issues and support them in achieving their personal and professional goals.
Counselors can work in diverse settings, including private practices, mental health centers, schools, substance abuse centers, or government institutions. This allows for a wide range of opportunities and flexibility in terms of work environment and schedule. Additionally, advancements in technology have made it possible for counselors to provide their services online, further expanding the accessibility and convenience of counseling.
Benefits:
Flexibility to work part-time or full-time.
Making a positive impact on the lives of others and contributing to their well-being is a significant aspect of counseling that attracts many individuals, including moms, to pursue this profession.
Offers a fulfilling and financially rewarding career path.
Pay: The average hourly rate for counselors is $39 an hour.
Other Jobs Options to Consider:
Home Health Aide: Care for patients in their own homes. Many opportunities for part-time work.
Personal Care Aide: Assist clients with daily tasks such as bathing, dressing, and grooming. Flexible schedules are available.
Event Planner: Plan and organize events such as weddings, conferences, and parties. Can often work on a freelance or contract basis.
Photographer: Take photographs for a variety of purposes such as weddings, events, or marketing materials. Can often work on a freelance basis.
Personal Trainer: Help clients achieve fitness goals through exercise and nutrition coaching. Can often work on a freelance or contract basis.
House Cleaner: Clean homes or businesses on a regular basis. Offers flexibility in terms of schedule and workload.
Online Tutor: This job involves teaching students online in various subjects. Skills required include teaching ability, subject expertise, and communication. To balance work and family life, set a schedule and prioritize family time.
Translator: This job involves translating written or spoken content from one language to another. Skills required include fluency in multiple languages, attention to detail, and communication. To balance work and family life, set a schedule and prioritize family time.
Pet Sitter/Dog Walker: This job involves caring for pets while their owners are away. Skills required include love for animals, responsibility, and time management. To balance work and family life, set a schedule and communicate with clients to ensure availability.
Personal Shopper: This job involves shopping for clients and delivering their purchases. Skills required include organization, communication, and time management. To balance work and family life, set a schedule and communicate with clients to ensure availability.
What to consider when choosing a job for working moms without a degree?
Working mothers without a degree face many challenges when it comes to finding a job.
They need to find a balance between their family and career commitments, and they also need to find a job that is flexible enough to accommodate their schedule. Here are the things to consider when looking for a new job.
1. Hours and Shiftwork
For working moms being able to control their own schedules allows them to be present for their children’s needs while also earning an income is extremely important. It is important to consider the hours you have available to dedicate to a job along with the shiftwork necessary when choosing a job.
Think about whether you want to go part-time or full-time.
Also, weekend shifts are also an option for those who need to work around their family’s schedule. Even better, remote work has become increasingly popular and offers even more flexibility.
2. Salary
Salary considerations play a significant role in achieving this stability a mom desires.
It is essential to explore different salary options and negotiate to ensure that you are being fairly compensated for your skills and experience.
Consider starting salary, the potential for growth, benefits packages, and negotiation when exploring job options.
3. Responsibility and Stress
As any working mom can tell you, being a working mom can be an incredibly stressful experience. Mothers often have to balance their work responsibilities with household chores and childcare, which can be overwhelming.
Finding a job that balances responsibility and stress is crucial for working moms to maintain their mental and physical health, and to be able to provide for their families.
4. Level of Education Required
As a working mom, it is important to consider the level of education required when choosing a job.
Plus, it is crucial to research job requirements and considers personal interests and skills when selecting a job. By doing so, working moms can find a job that offers flexibility, decent pay, and job satisfaction.
5. Professional Licenses and Certifications
Obtaining, professional licenses and certifications is an excellent way for working moms without a degree to increase their job opportunities, earn higher salaries, and improve job security.
These certifications and licenses are often required for specific industries, such as healthcare, education, and law enforcement.
With so many options available, it’s important for working moms to explore the various certifications and licenses that are relevant to their industry and career goals.
6. Work-Life Balance
Balancing work and family life is a challenge for anyone, but it can be particularly daunting for working moms.
However, there are several factors to consider when choosing a job that can help achieve a work-life balance:
Flexible Work Hours: A job with flexible work hours can help working moms without a degree balance their work and family responsibilities. This can include part-time work, remote work, or jobs that allow for flexible scheduling.
Remote Work Options: Remote work can be an excellent option for working moms without a degree who need to work from home.
Company Culture: A supportive company culture can make all the difference for working moms. Look for companies that offer family-friendly policies such as paid time off, flexible work schedules, and on-site childcare.
By prioritizing work-life balance, working moms can achieve success in both their personal and professional lives.
7. Vacation and Time Off
For working moms without a degree, vacation and time off are crucial benefits to consider when evaluating a potential job offer.
Here are three factors to consider when reviewing a company’s vacation and time off policy:
The number of vacation days offered, including paid time off for sick days and personal days.
The flexibility of the policy, such as the ability to take time off for family emergencies or unexpected events.
The potential for extended leave, such as maternity or paternity leave.
8. Career Advancement
When considering a job as a mom, career advancement is an important consideration. It is essential to choose an employer and a job that offers opportunities for growth and progression in your chosen field.
Advancing in your career not only allows you to achieve personal and professional goals but also provides financial stability and job satisfaction.
Don’t underestimate the power of setting clear career goals and actively working towards them.
By investing in your skills, building a strong network, and setting clear career goals, you can pave the way for a successful and fulfilling career as a mom.
9. Job Security
Job security is especially significant for working moms, who may face more challenges in finding and keeping a job.
Typically, working moms are limited in their job options.
So, look for careers that provide financial security as well as companies with a solid track history.
This is the perfect side hustle if you don’t have much time, experience, or money.
Many earn over $10,000 in a year selling printables on Etsy. Learn how to get started by watching this free workshop.
If you’ve ever wanted to make a full-time income while working from home, you’re in the right place!
This intensive training combines thousands of hours of research, years of experience in growing a virtual assistant business, and the power of a coach who has helped thousands of students launch and grow their own business from scratch.
FAQ
You can search for remote jobs, part-time jobs, or freelance gigs.
You can also look for companies that have flexible policies in place. Also, reach out to your network and ask if anyone knows of any openings that are flexible.
Stay-at-home moms can find a variety of jobs that can be done from home and offer flexibility to work around their schedule. Here are some of the options available:
Working from home offers the benefit of having a better work-life balance and the ability to be present for their families while still earning an income.
Which Job for Moms will You Choose?
For moms who want to balance family and career, finding a job that offers work-life balance and career growth is crucial.
Not only can working increase income, but it can also lead to career advancement and personal fulfillment.
Above, we listed many great jobs for moms. You can choose a job that allows you to work from home, or one that provides flexible hours. Also, many moms like me prefer one of these early morning jobs.
Whatever you choose, make sure you find a job that you enjoy and that allows you to spend time with your family.
Know someone else that needs this, too? Then, please share!!
Hedging, Loan Production, Auditing, QC, Broker Marketing Products; Primer on the Cost to Hedge
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Hedging, Loan Production, Auditing, QC, Broker Marketing Products; Primer on the Cost to Hedge
By: Rob Chrisman
8 Hours, 39 Min ago
A “crisis” is a time of intense difficulty, trouble, or danger. Think calamity, catastrophe, or disaster. The word makes for attention-grabbing headlines, and a scan through the news shows a mental health crisis, child care crisis, migrant crisis, China property crisis, a climate change crisis, an opioid crisis, a housing crisis… Eventually people become immune to seeing the word, and it loses its effectiveness, especially when nothing pans out from the “crisis.” I mention this because, despite a lot of predictions to the contrary, the banking “crisis” from March seems to have been contained to a few well-known banks. (Let’s hope so.) The Federal Reserve Board, released its results of annual bank stress test, which demonstrates that “large banks are well positioned to weather a severe recession and continue to lend to households and businesses even during a severe recession.” Of course, not every bank is large, and Ken Sonner telexed over the “The 100 Largest U.S. Banks by Consolidated Assets” which is of interest to anyone who has money in a bank or has a bank for a client. Yes, Chase now equals Wells Fargo plus Citi. (Today’s podcast can be found here and is sponsored by Visio Lending. Visio is the nation’s premier lender for buy and hold investors with over 2.5 billion closed loans for single-family rental properties, including vacation rentals. Through its top-rated Broker Program, Visio brokers can earn up to 5 percent. Hear an interview with Optimal Blue’s Erin Wester on both Product and Pricing Engines (PPE) and how pricing in the secondary market flows into the primary market.)
Lender and Broker Services, Products, and Software
In 2021, Procter & Gamble won the title of largest advertiser in the world, spending a jaw-dropping $8.1 billion on ads. While the company’s monumental ad budget is impressive, enterprising individuals who find creative ways to succeed with limited resources are doubly inspiring. Mortgage brokers are a perfect example of these types, as the majority of these lone wolves have to juggle customer service, relationship management, marketing, processing, compliance and more. To help brokers run their one-person show more effectively, Surefire by Black Knight has compiled an eBook detailing the marketing strategies and tools needed to succeed in a high-cost market. Download A Mortgage Broker’s Comprehensive Guide to Mortgage Marketing now for free.
“Learn About Current QC Trends and Industry Insights in Our Latest Webinar! With upcoming QC requirements on the horizon, now is the time to familiarize yourself with how they will impact your business. In our highly anticipated webinar, you will hear from ACES Quality Management’s President, Phillip McCall and EVP, Nick Volpe on an analysis of recent Mortgage QC Industry Trends Report, a deep dive into mortgage quality control trend reporting and how it aligns with the current state of the industry, and industry insights and how to best navigate through the volatile financial landscape. Walk away with a better understanding of what’s to come and how you can best prepare for the future. Watch Now.
“Experience unrivaled mortgage lending expertise for your next audit. At Richey May, we don’t just hire from the mortgage industry, we have the top experts who build it. We have defined what it means to be a mortgage expert for almost 40 years and are proud of our team members like Jennifer Hannah, CPA, AMP, who leads our Mortgage Banking Audit practice. As leaders in the mortgage lending industry, we provide extensive education for our clients while forging genuine relationships, communicating effectively, and resolving issues before they become problems. Our team’s extensive knowledge in mortgage technical accounting and audit acumen ensures top-quality service delivery. Guided by strong values, we strive to significantly impact our clients’ success. Reach out or visit our website to learn more about how we can help your audit drive growth, not just check a box.”
Products and Tools for Loan Production
Interest rates may tick up again next month, with experts predicting that mortgage rates will remain around mid-6 percent in the near term, but buyers are still out there. The loan officers with the right tools in place will be the ones to secure their business. With Percy’s homeownership engagement solutions, you can maintain connection with customers even after they’ve closed on a home. Percy’s captivating Equity Insights offer details on a home’s value and show how this value can be leveraged to fund home improvement projects or finance the next move. Need to work more with agents? Percy has 250,000 agents waiting to work with you. With Percy in place, our clients are reaping an average 400 percent ROI… and you can too. Learn more here about how you can use Percy to gain a competitive edge.
“In California, Golden State Finance Authority (GSFA) celebrates 30 years paving a path to homeownership for low-and-moderate income California households, having helped over 85,000 individuals and families to purchase a home and provided more than $660 million in down payment and closing cost assistance. Join us this June and July as we showcase our beginning, our mission, and the many achievements of the past three decades. ‘Golden State Finance Authority, Where Affordability Meets Flexibility®.’ Join our lending team! Start helping more homebuyers in California to Achieve the Dream. Visit www.gsfahome.org and follow us on Facebook, LinkedIn or our YouTube channel.”
“Did you know that OptifiNow provides wholesale Account Executives with an amazing tool that can double their funding volume? OptifiNow TPO is a CRM that expertly manages your wholesale lending sales team, but our Loan Scenario Ticketing Module is an absolute game changer. This module integrates with many popular Product and Pricing Engines (PPE) to enable your AEs to provide instant quotes to broker loan scenarios. OptifiNow automatically emails loan scenario quotes to brokers and follows up with them using a sequence of emails or SMS messages designed to ensure consistent engagement. Every Loan Scenario Ticket is tracked, so you know how frequently brokers are engaging with your AE, the types of products they are interested in and the pricing that was available at that time. AEs using OptifiNow’s Loan Scenario Ticketing module have been shown to double their monthly fundings. Interested? Contact OptifiNow for more information.”
The Fabled “Cost of Hedge”
Home lending is one of the few industries where the customer can lock in a future rate & price. Put another way, if you went to the local gas station, or grocery store, and told them you wanted to pay now for a gallon of petroleum or milk two months from now, you’d be stared at in disbelief. But the futures market is alive and well with companies and individuals locking in prices now for things like bacon, orange juice, wheat, gold, and corn in the future, hedging any impact of prices on their profits. There is a cost, usually the bid/ask price spread, the drop in price from one month to the next, and commissions paid in actually trading the contracts.
I periodically receive questions about the “cost to hedge” for mortgage bankers with locked pipelines. It is not an easy question to answer, like the cost of unleaded gas down at the corner. Hedging is a loan level activity where each loan’s program, interest rate, lock period, etc., is analyzed. It is tricky because company policies like extensions and renegotiations enter into it. Specifically, extensions and renegotiations increase it, and while the production team is helped, the capital markets department usually incurs the expense. And the price drop in the securities market often changes during the lock period. And then there’s always the “what is the cost of a loan that falls out?”
Capital markets vet James Hedvall recently weighed in. “Manufacturing loans faster, and bringing loans to market quicker, reduces a lender’s interest rate exposure to some degree. Thus, the reason bond loans can be an issue for some lenders. Unfortunately, I think many hedge vendors look at the problem 2-demonsionally, when it’s a 3-D issue. The problem isn’t necessarily all “speed-to-originate,” but rather “hedge model efficiency.” What assumptions are being made about the duration/beta of the hedge instrument, and pull through, broken down by product groups and cross referencing at what stage in the loan life cycle loans have fallen out in the past. Volatility in the To Be Announced (TBA) markets will kill a lender’s gain on sale. Lenders can be profitable in a rising rate environment, and profitable in a falling rate environment, but sudden swings in the bond market, and therefore interest rates, will kill you every time and all models break down.
“The cost to hedge is constantly changing. Viewed in a vacuum, I can say right now our hedge cost is around $X per loan, while the market is behaving rationally and my pull through acts as it has historically. This is also assuming I’m sending loans to market at the right time, I’m using broker/dealers that aren’t trying to pick off an additional +, and all the while having a stable ‘best efforts to mandatory’ spread. Ask me in six months how much my hedge is running and I’ll no doubt have a different answer. I believe that the real value of originating the loan quicker is a reduction in your finance fees from your warehouse bank, and not necessarily on your hedge side.” Thank you, James.
Capital Markets
Are long onboarding processes stopping you from making a switch? In a recent case study, NBH Bank describes their process getting started with MCT and how they were able to get mortgage pipeline hedging and best execution loan sales up and running in just ten days. “MCT exceeded our expectations for this onboarding process,” said Ajay Timothy, Vice President and Director of Secondary and Capital Markets at NBH Bank. “We were in a compromised position with our previous hedge provider and needed to get this done quickly…we got this done in about 10 days.” NBH Bank relied on MCT to come together with multiple teams to support them in a safe, effective way outside of normal processing times to ensure there were no gaps in their hedge coverage. Download the case study to learn how MCT is innovating the onboarding experience for clients.
Rate-wise, the main economic headline yesterday was Fed Chairman Powell’s remarks at an ECB event in Portugal, where he said that core U.S. inflation won’t hit 2 percent until 2025. He also said that there is significant disinflation in the pipeline, but that the dot plot is projecting another couple rate hikes. On a separate note, as noted in the opening paragraph, the Federal Reserve released the results of its annual stress test of banks and Wall Street’s biggest banks passed, clearing a key hurdle for returning billions of dollars to investors. The 23 largest U.S. lenders showed they can withstand a severe global recession and turmoil in real estate markets.
Fed Chair Powell once again spoke in Europe before the open to kick off today’s economic calendar. Besides Chair Powell, Atlanta’s Bostic is scheduled to speak and Sweden’s Riksbank will also be out with its latest monetary policy decision where a 25-basis points hike is expected. We’ve also received the final look at Q1 GDP (+4.1 percent) and weekly jobless claims (down to 239k, down 26k, very strong; continuing claims 1.742 million). The core PCE (personal consumption) deflator came in at +4.2. Later this morning brings the Pending Home Sales Index for May, Freddie Mac’s Primary Mortgage Markets Survey. We begin the day with Agency MBS prices worse .250-.375 and the 10-year yielding 3.79 after closing yesterday at 3.71 percent; the 2-year is up to 4.84, up .13 on the news.
Jobs
“PrimeLending LOs “tell all” at our first ever Loan Officer Roundtable! Join us for a live webinar on July 11th at 1:00 PM Eastern, where you’ll gain invaluable insights from our top mortgage loan originators. You can learn firsthand why PrimeLending could be your next best professional move. Hear personal stories, explore our work culture, and get answers to your burning questions about a career at PrimeLending. This exclusive (and anonymous) event is designed for loan officers like you, seeking a career boost. Contact Nic Hartke today to secure your spot at this one-of-a-kind opportunity to get the inside scoop from your peers. What are you waiting for?”
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School’s almost out for the summer, but for some parents, the homework might be just beginning. For those hoping to move before school starts next year but aren’t sure where to go, a new survey can point you in some smart directions—that is, if you can afford it.
WalletHub has just released its 2023 Best & Worst Places to Raise a Family report, ranking how America’s 180 biggest cities stack up by analyzing 45 key metrics that matter to parents. They include local school quality, crime rates, economic factors such as income and unemployment, as well as access to child care, health care, and recreation.
The most family-friendly city of all this year is Fremont, CA, which ranks No. 1 in terms of education and child care, and No. 2 for health and safety. And despite being located in the pricey San Francisco Bay Area, Fremont comes in 18th on the list for affordability, which means it’s a relative bargain for the area.
In fact, five of the top 10 kid-friendly metros are in California. However, decent options are scattered far and wide, and some surprising locales made the list, with Overland Park, KS, coming in at No. 2.
At the bottom—that is, the worst for families—is Cleveland, OH, which ranks dead last for socioeconomics and very low for education, health, and affordability. Right behind Cleveland is Memphis, TN, flagged as the worst in the data set for violent crime.
The family-friendly premium: How much parents pay
What these rankings make abundantly clear is that parents who want the best for their kids might find they’ll have to make some trade-offs. For instance, Overland Park was tops for affordability, but only 115th for “family fun”—a category that includes access to playgrounds, parks, ice rinks, and other amenities.
Meanwhile, Los Angeles ranks No. 1 for family fun but No. 174 for affordability. The high cost of housing is a large part of the problem, with Realtor.com® data showing that the median listing price here hovers at $1.2 million.
Aside from housing, taxes—particularly for public schools—is another big piece of the financial burden families must shoulder if they want the best education and opportunities for their kids.
“Quality schooling and affordable housing are key factors families should consider when setting down roots,” says Susan J. Paik, a professor at the School of Educational Studies of Claremont Graduate University and one of WalletHub’s experts for the report. “The cost of living, especially housing options, matters for growing families.”
For a closer look at what “family-friendly” will cost in terms of housing, here are the WalletHub rankings along with Realtor.com data on the median home prices for each area.
10 most family-friendly cities
Fremont, CA: $1.25 million
Overland Park, KS: $638,950
Irvine, CA: $1.4 million
Plano, TX: $550,000
South Burlington, VT: $564,000
San Diego, CA: $999,000
San Jose, CA: $1.25 million
Scottsdale, AZ: $939,000
Gilbert, AZ: $600,000
San Francisco, CA: $1.46 million
Does a family-friendly city make a difference?
Parents have good reason to weigh all pertinent factors when they decide where to raise their families, due to a growing body of research that finds just how malleable kids’ minds are to their surroundings.
“There is a growing body of research suggesting that a child’s development and a family’s quality of life are influenced greatly by the city in which they live,” says Cristina Santamaría Graff, an associate professor of education at Indiana University Purdue University and one of the experts consulted for this report. “More than ever, local officials need to consider the well-being of families inclusive of economic, physical, social, emotional, and environmental factors.”
So what should parents be thinking about as they peruse the WalletHub report?
“Families should strongly reflect on how places connect with and support their values as a family,” says Sherrill W. Hayes, director of the School of Data Science and Analytics at Kennesaw State University in Georgia. “This is sometimes a difficult question for young parents since they may just be figuring themselves out as adults, but location determines access to jobs, activities, educational opportunities, social networks, and other intangibles.”