The information provided on this website does not, and is not intended to, actas legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
When things get lean, it’s natural to want to tighten your belt and save money wherever possible. But should you stop investing completely? It’s an entirely personal decision. Get some facts and insights about investing during a recession below to help you determine what will work for you.
Is It a Good Idea to Invest During a Recession?
It depends on a few factors, including what you’re referring to when you say “investing.” If you’re talking about funding a 401(k), you probably want to continue doing so unless you would be unable to pay your necessary bills and living expenses.
But if investing means the stock market or other similar options, you should seriously consider your financial situation. If you already have emergency savings and have disposable income to risk, investing can be an option. This is especially true if you won’t be touching your portfolio for a while, so you have time to weather the ups and downs associated with a recession economy.
But you do want to be aware of the bear market trap so you don’t fall into it. Bear traps occur when a lot of investors have bought into certain stock. This increases the selling pressure, which just means that there are buyers for the stock but not a lot of stock to be had.
Institutions that want the stock to move higher may push prices lower via short sales or other strategies, making it appear as if the prices are falling. That can scare people into selling the stock. In the long run, however, the stock maintains its price or increases in value, so selling early can mean losing out on future gains. This is just one reason you might want to work with a professional advisor when investing.
7 Tips for Investing During a Recession
1. Be Patient and Think Long-Term
Buying and selling stocks rapidly to turn huge profits is mostly an event seen in movies and television. And while it’s not impossible for pros to luck into a big win, this is not typically how individuals should look at investing. It may take time for your investments to pay off, especially if the economy as a whole is struggling, so it’s important to avoid being guided by emotions and rely on logic and sound financial advice.
2. Commit to a Personal Investment Plan
A personal investment plan is a written document that includes your financial goals and what types of limitations you might have, such as what you can afford to spend on investing. Creating such a document ensures you have a logical, well-thought-out guide to turn to when things do get tricky. If you feel tempted by a seemingly perfect investment, for example, your plan can remind you what you can realistically put into this new investment.
3. Use the Dollar-Cost Averaging Strategy
Dollar-cost averaging is a strategy used by many investors, including some professionals. Its goal is to potentially reduce the volatile nature of a single purchase. The DCA strategy works like this:
You decide how much you’re going to invest in certain assets within a set period
You divide that budget over that time and make periodic purchases of the asset
You do this despite the price of the asset at any given time
The goal is to build up the investment for a long-term gain strategy. This is actually how most 401(k) investments are managed.
4. Focus on Quality Over Quantity
But don’t think that you have to buy tons of assets to be investing for the future. If you have limited funds to invest with, it can be tempting to buy up stock that is cheap just to get some quantity. But cheap stock isn’t always a great investment, and it might be better to buy a smaller number of shares in a well-trusted company with a history of strong stock performance.
5. Consider Funds Instead of Individual Stocks
Another option is to consider funds, which spread your investment over numerous stocks. You’ve probably heard that you have to diversify your portfolio. That just means investing in numerous types of assets so that if one doesn’t perform well, you have other gains to make up for the loss.
A mutual fund is an investment option that’s already diversified, for example. Plus, it’s a convenient way to add numerous assets to your equity portfolio without buying and managing numerous stocks yourself.
6. Rebalance When Necessary
While investing is a long-term strategy, active investing can’t be a set-and-forget strategy. You have to make efforts to rebalance your portfolio—or ensure someone is doing that for you—from time to time.
Rebalancing just means aligning your assets with your target goals. For example, you might have a goal of 60% in stocks and 40% in other assets. But if your stocks gain rapidly during a few years, outpacing the gains of your other assets, you could have a 70/30 split. If your goal is still 60/40, you would rebalance by selling stock, purchasing other assets or both.
7. Invest in Recession-Resistant Industries
Recession-resistant industries are those that don’t tend to succumb to downturns in the economy, often because they’re necessary. Examples of industries that have historically weathered recessions well include healthcare, technology, beauty, retail, construction and pet products.
Note that because a company is in a recession-resistant industry doesn’t mean that company itself is necessarily resistant. It’s always important to be discerning about which stocks you invest in. For example, if the company doesn’t have strong financial leadership or has known money problems, it may not matter what industry it’s in.
Review Your Finances and Decide What’s Best for You
Ultimately, only you can decide whether investing during a recession is right for you. Start by reviewing your own finances. Some things you might want to look at include:
What kind of savings you have. Having emergency savings is important, especially in a recession. Before you start investing, you may want to build yours.
Your income and expenses. You need disposable income before you can invest. That means that your income should be more than your expenses.
Your credit history. Buying stocks and investing typically doesn’t rely on you having good credit. But before you start building wealth, get a good look at your credit reports to ensure there’s nothing lurking that you might need to attend to. If you find any surprises, consider reaching out to Lexington Law for help disputing inaccurate items and working to make a positive impact on your credit.
And if you do decide to invest—during a recession or otherwise—consider working with a financial advisor to help you navigate the complexities of managing your portfolio.
Reviewed by John Heath, Directing Attorney of Lexington Law Firm. Written by Lexington Law.
Born and raised in Salt Lake City, John Heath earned his BA from the University of Utah and his Juris Doctor from Ohio Northern University. John has been the Directing Attorney of Lexington Law Firm since 2004. The firm focuses primarily on consumer credit report repair, but also practices family law, criminal law, general consumer litigation and collection defense on behalf of consumer debtors. John is admitted to practice law in Utah, Colorado, Washington D. C., Georgia, Texas and New York.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
One pint of blood can save three lives. That alone is what drives people to roll up their sleeves and get that needle prick. But there’s another good reason to sign up to be a regular blood donor: Gift cards.
You get a lot more than a T-shirt and some peanut butter crackers these days when you donate blood. Blood collection organizations routinely give out $20 worth of gift cards to Amazon, restaurants and major retailers at blood drives. You can give blood every 56 days, or six times a year.
So, a couple can average $240 in perks and save 36 lives in one year. For a family of four with kids above 16 and old enough to donate, that’s about $500 in gift cards per year and 72 lives saved.
“One time we went to Kohl’s and there was a blood drive in the parking lot,” said Beverly Mattis of Wake Forest, N.C. “They gave us each a $20 Kohl’s gift card so my daughter and I went in and did some shopping afterward.”
Exavier Jones shows off his $10 gift certificate after donating blood at a OneBlood Big Red Bus in St. Petersburg, Fla. Chris Zuppa/The Penny Hoarder
Exavier Jones gave blood recently at a OneBlood mobile collection bus outside casual dining restaurant Carrabba’s Italian Grill in St. Petersburg.
“I’m type O. That’s always needed, so I try to give as often as I can,” he said, explaining that any blood type can accept type O blood. He received a $10 Carrabba’s gift card and a $10 e-gift card to use at one of a variety of retailers.
How to Get the Perks of Being a Regular Blood Donor
If you register to be a blood donor with the blood collection organization in your area, you will receive texts or emails with dates of upcoming blood drives and the perks. There are many blood collection organizations around the country. Here are three of the biggest, and how to register:
There’s no requirement that you give a certain number of times a year, but there is encouragement.
OneBlood, which collects blood in the Southeast, partnered with Carrabba’s to give $10 gift cards each time someone donated between January and April. Those who gave twice received an additional $25 gift card along with the two $10 cards.
“I got $10. I’m going to go inside and have a lasagna dinner tonight,” said Bill Howard after donating at the Carrabba’s in St. Petersburg.
The gift cards are nice for sure, he said, but the main reason he gives regularly is because he was stabbed during the Vietnam War and needed a lot of blood to survive. He wants to save others like a stranger’s blood once saved him.
Bill Howard donates blood regularly because his life was saved by a person who donated blood after he was stabbed in the Vietnam War. Chris Zuppa/The Penny Hoarder
“I would say most of the time at almost all of our drives our intention is to have a donor gift,” said Pat Michaels, OneBlood director of media relations. “It could be Carrabba’s, Publix, Red Lobster. We have built up some wonderful partners,” he said.
OneBlood also gives out tickets donated by the Miami Dolphins, Tampa Bay Buccaneers, Jacksonville Jaguars, the Daytona 500 and Carowinds amusement park near Charlotte, N.C.
Along with gift cards and tickets, many blood collection groups also give out swag such as beach towels, fleece blankets, car sun shades and insulated water bottles.
Vitalant, which is based in Scottsdale, Ariz., is the largest nonprofit blood service provider in the country serving 40 states. It hosts more than 30,000 blood drives a year and offers a variety of perks and incentives for blood donors.
Vitalant is partnering with the Arizona Diamondbacks to encourage high school students there to organize blood drives at school. The team will host more than 1,000 students from blood drive committees. Organizers from the two schools who achieve the most donations will share a party suite at a Diamondbacks game.
Vitalant is also encouraging women to organize a blood drive with friends the same as they might host a party at their homes selling jewelry or clothes. An organizer can invite eight friends to a private party at a collection center that’s catered with fun food where donors receive gift cards and other swag.
For donors with a sweet tooth, Vitalant recently promoted a pint-for-a-pint offer. Donors who gave a pint of blood received a voucher for a free pint of frozen custard at Culver’s.
The American Red Cross recently offered $5 Amazon gift cards to some donors, and their names were entered for a chance to win a trip for four to the 2022 Indianapolis 500. Winners will receive pit credentials, airfare, hotel accommodations and a $500 gift card. Other Red Cross blood drives enter donors’ names in a drawing for a chance to win a $1,000 e-Gift card to one of several stores.
More Perks for Donating Platelets
Platelets are small cells that stop bleeding by forming clots. Donated platelets are used for cancer patients, transplants, burn patients and traumatic injuries.
When someone donates platelets, a machine extracts them from whole blood then returns the rest of the blood back to the donor. The process takes about three hours.
Because it takes longer than donating whole blood, more perks are offered for people who give platelets, which can be donated every seven days. OneBlood recently challenged platelet donors to a two-month program offering gift cards valued at $25 for their second donation, $50 for their third and $75 for their fourth.
It is also promoting a three month challenge, offering gift cards valued at $25 for the second donation, $50 for the third, $75 for the fourth, $100 for the fifth and $125 for the sixth. That’s a total of $375 in gift cards in three months.
According to Givingblood.org, only 37% of the U.S. population can donate blood. Less than 10 percent of those people donate blood at least once a year. Chris Zuppa/The Penny Hoarder
Constant Need Increased During the Pandemic
Even in typical times, blood collection organizations are constantly trying to recruit more donors. Only 37% of the U.S. population is eligible to donate blood, and less than 10 percent of those people do so at least once a year, according to Givingblood.org.
Numerous impacts of COVID-19 made it even harder to reach and encourage donors, according to Michaels at OneBlood.
“There has been every reason for there to be a shortage of blood drives,” he said. Blood drives at colleges, high schools and office buildings were cancelled for months on end because they were closed.
“We had to recover by creating new partnerships,” Michaels said. OneBlood worked with county elections offices across the country as well as hundreds of homeowners associations to connect with groups of people who would sign up for blood drives, he said.
Saving for retirement is difficult, but it’s an important part of everyone’s financial life. There are a number of ways to make saving for retirement easier, such as using tax-advantaged accounts like individual retirement accounts (IRAs) and 401(k) plans.
One special type of tax-advantaged account, the health savings account (HSA), isn’t specifically designed to help people save for their retirement. However, its unique benefits make it one of the most powerful tax-advantaged accounts out there.
If you have access to an HSA, it can be one of the best ways to set money aside for retirement.
What Is an HSA?
A health savings account (HSA) is a special type of account that is designed to help people save money to pay for medical bills. HSAs are only available to people who have certain types of health insurance plans called high-deductible health plans (HDHPs).
Like retirement accounts, HSAs offer tax advantages that make it easier to set aside money to pay for medical bills. If your employer offers eligible insurance plans, they may also make contributions to your HSA on your behalf, similar to 401(k) matching.
The unique tax benefits of HSAs are what make them potent vehicles for saving for both medical expenses and retirement.
Pro tip: If you’re thinking about opening an HSA, you can get started through Lively. There are no hidden fees and you’ll be able to set up recurring contributions.
How Do HSAs Work?
Understanding how HSAs work is essential to making the most of them when it comes to saving for both health care and your retirement. You risk paying penalties if you fail to follow the rules.
Insurance Requirements
First, not everyone can open an HSA. They’re only available to people who have a qualifying high-deductible health plan.
An insurance plan’s deductible is the amount that you pay before your insurance kicks and starts covering costs. For example, if you have a $2,000 deductible, you have to pay $2,000 toward your health care expenses before your insurance pays any of the cost.
For an insurance policy to qualify as an HDHP, it must meet the following requirements:
It charges a higher annual deductible than typical health plans (for 2020, the minimum is $1,400 for individuals and $2,800 for families).
It has a maximum limit on the sum of the annual deductible and out-of-pocket medical expenses that you must pay for covered expenses (for 2020, the maximum is $6,750 for individuals and $13,500 for families).
It may, but is not required to, provide preventative care without a deductible or with a lower deductible.
Other Qualifications
The exact requirements for qualifying for an HSA are:
You are covered by an HDHP.
You have no other health insurance coverage, with the following exceptions:
Liabilities incurred under workers’ compensation laws, tort liabilities, or liabilities related to ownership or use of property.
A specific disease or illness.
A fixed amount per day (or other period) of hospitalization.
Coverage for accidents, disability, dental care, vision care, and long-term care.
You aren’t enrolled in Medicare.
You aren’t claimed as a dependent on anyone else’s tax return.
If you meet the requirements, you can open an HSA.
Contribution Limits
Like other tax-advantaged accounts, you cannot make unlimited contributions to an HSA. There is a limit on how much you can contribute each year.
For 2020, the limit is $3,550 for individual plans and $7,100 for family plans.
Some employers that offer HDHPs make contributions to their employees’ HSAs as an employee benefit. Employer contributions count toward these limits, so make sure you don’t exceed the contribution limit with your contributions and your employer’s contributions combined.
Tax Advantages
The primary reason that people use HSA for savings is the tax advantages. Like traditional IRAs and 401(k)s, the money you contribute to an HSA is contributed before tax. That means you can deduct the amount you add to the account from your income when filing your taxes.
If you have a taxable income of $50,000 and put $5,000 in your HSA, you can report your taxable income as just $45,000. That will save you about $1,100 on your tax bill, meaning your $5,000 contribution only costs you $3,900 out of pocket.
With a traditional IRA or 401(k), you pay income tax on the money that you withdraw from the account. HSAs are different. If you use the money in the account for qualified health expenses, you pay no taxes on the withdrawals either. This makes them doubly tax-advantaged.
If you have extra money in your HSA after you turn 65, you can begin making withdrawals from the account for nonmedical expenses too. If you do, you pay income tax on the amount you withdraw, but no penalties, just like a retirement account.
Penalties
Typically, you can only withdraw money from an HSA for qualified medical expenses. The IRS outlines all qualified expenses in its Publication 502, but it includes most things you’d expect, including:
Ambulance fees
Birth control
Body scans like MRIs or X-rays
Contact lenses
Dental treatment
Drug addiction care
Eye exams
Hearing aids
Hospital services
Physical exams
Prescriptions
Surgery
If you withdraw money from an HSA for a nonmedical expense and you are under age 65, you pay a 20% penalty on the amount withdrawn. You also have to pay income tax on your withdrawal, meaning you are doubly punished for using the money for nonmedical expenses when you’re under 65.
Once you reach age 65, however, you can use HSA funds for nonmedical expenses penalty-free, but will still have to pay income tax on the amount withdrawn.
Although you generally don’t have to prove that you’ve used your HSA money for qualified medical expenses when you file your taxes, you should always save your receipts so that you can show how much you spent compared to how much you withdraw. The receipts will come in handy if you wind up getting audited.
How to Use an HSA for Retirement Savings
HSAs are useful for saving for health care expenses, but they’re one of the most powerful retirement accounts available to Americans. If you want to use your HSA to save for retirement, these tips can help.
1. Contribute as Much as You Can
If you want to use your HSA for retirement savings, the first thing to do is contribute as much as you can to the account.
Typically, you want to contribute to your 401(k) until you max out the amount that your employer will match. Getting employer matching contributions is like getting a raise, so it’s worth getting as much in matching funds as possible.
After that, you can focus on putting money in your HSA until you max it out.
2. Invest Your Balance
The name “health savings account” might make you think that your HSA is a simple savings account. Savings accounts pay interest, but they’re not great for long-term wealth building because you usually wind up losing spending power to inflation.
Depending on your HSA provider, you likely have the option to invest your HSA in the stock market. That means that you can use the money in your HSA to build an investment portfolio like you do in your retirement and taxable brokerage accounts. Building a portfolio of low-cost index funds is a great way to help your HSA’s balance grow.
Just remember to keep some of the money in cash if you plan on using the HSA to cover health expenses as well.
3. Wait Until You’re 65
Once you’ve opened your HSA, made contributions, and invested your money, all you have to do is wait. Once you turn 65, you can withdraw money from the account as if it were a 401(k) or IRA. There’s no requirement that you use the money for health care expenses.
The only downside of this strategy is that IRAs and 401(k)s are slightly more flexible when it comes to withdrawals. You can start taking money from those accounts, penalty-free, when you turn 59 ½.
4. Save Your Receipts
Even if you don’t plan to use your HSA to cover health care expenses, you should make sure that you save every medical-related receipt that you get.
The reason to save every receipt is that there is no time limit for withdrawing money from your HSA after you incur a qualified medical expense.
Consider this example: you injure your leg while out for a run and have to go to the hospital for surgery. After you recover, you get the hospital bill and have to pay $5,000.
You can withdraw money from the HSA now to pay the bill, or you can pay the bill out of pocket, leaving your money in the HSA to grow, tax-free. You decide to pay the bill out of pocket.
Because there’s no time limit on withdrawals, you can take $5,000 out of your HSA, tax-free and penalty-free, any time you want. You can make the withdrawal tomorrow, next year, 10 years from now, or when you retire.
This is better than simply waiting until you turn 65 because withdrawals for nonmedical expenses still incur income taxes. If you pay for medical expenses out of pocket but save your receipts, you can withdraw from your HSA without paying any tax at all, up to the total amount of your qualified medical expenses that you’ve incurred over the years.
This makes HSAs more powerful than standard retirement accounts because you pay no tax on contributions or qualified distributions.
The full list of qualifying medical expenses is long, and some might surprise you. Over time, you’ll likely build up plenty of qualified expenses, which will make it easy for you to make tax-free withdrawals when you need to.
Advantages of Using an HSA for Retirement Savings
HSAs are one of the most powerful tax-advantaged accounts when used properly, so there are a lot of perks to using one for retirement savings.
1. Tax Benefits Add Up
One of the primary reasons to use an HSA for retirement savings is the tax benefits. If you use the account properly and save your medical receipts you can ultimately pay no tax on any of the money you contribute or withdraw from the account.
Even if you don’t have enough medical expenses to withdraw the entire amount tax-free, you have the backup plan of paying taxes on penalty-free withdrawals after you turn 65, effectively making the account into a second IRA or 401(k). Over the long term, the amount that you save in taxes can be huge.
If you’re in the 22% tax bracket — single earners making $39,476 to $84,200 and couples making $78,951 to $168,400 — and withdraw $10,000 per year from your HSA tax-free, you save $2,200 per year in taxes. That means needing to save about $55,000 less for retirement if you’re using the 4% rule to determine how much of your portfolio to withdraw each year.
2. HSA Contributions Don’t Count Against Retirement Contribution Limits
Using an HSA for retirement savings also increases the amount of tax-advantaged saving “cap space” you have for other retirement vehicles. IRAs and 401(k)s limit your contributions (to $6,500 per year and $19,500 per year, respectively). HSA contributions don’t count against those caps.
If you’re maxing out your tax-advantaged retirement contributions and looking for other ways to reduce your tax bill, HSAs can be an attractive option.
Disadvantages of Using an HSA for Retirement Savings
Just because you can use an HSA to save for retirement doesn’t mean that doing so is a good idea. Here are the disadvantages to consider.
1. You Might Need the Money for Medical Expenses
One reason not to use your HSA for retirement savings is the possibility that you might wind up needing that money to pay for health care expenses. Odds are good that you’ll wind up with a big medical bill at some point in your life.
If you have a high-deductible health plan, the out-of-pocket expense could be significant, and unless you have a strong emergency fund in savings, you might need to tap your HSA account to pay the bill.
If your HSA is one of your primary methods of saving for retirement, you might have to dip into your nest egg to cover a medical emergency, which is never ideal.
2. HSAs Aren’t Designed for Retirement Investing
Another drawback is that HSAs aren’t designed for retirement saving. The tax rules surrounding HSAs make them a great way to save for retirement, but that isn’t their intended purpose. HSA accounts aren’t necessarily optimized for long-term investing.
Some HSA providers might not offer the option to invest your balance at all, or might offer options that charge hefty fees for the privilege. Some HSAs limit your investment options to expensive mutual funds whose fees can eat away at your balance over the long term, meaning your savings will grow much more slowly in an HSA than a specifically designed retirement account.
By contrast, many true retirement plans have specially designed investment options, such as target-date funds, that make saving for retirement easy.
3. The Rules for HSAs Could Change
Finally, just because HSAs are great for retirement savings now doesn’t mean that they will be 20, 30, or 40 years from now. The government could change the rules for how you can use the money in the account. For example, the IRS may add a time limit for withdrawing funds after you incur a medical expense.
Future changes may make it harder to use the money you have in the account or alter the tax implications, which could limit its usefulness as a retirement savings vehicle.
Final Word
HSAs can be a good way to save for retirement, but you need to have a high-deductible health plan to be eligible for one. Furthermore, you must be able to cover out-of-pocket medical expenses by other means in order to make the most of these accounts as retirement savings vehicles.
For most people, 401(k)s and IRAs will be the main methods of saving for retirement. Don’t forget that you can also benefit from opening a taxable brokerage account if you want to invest for long-term goals beyond retirement.
Numerous college students have a trajectory in mind for navigating life after college. For some, getting a job is their top goal. But, are there other things to do after college besides work?
Beyond looking for a traditional entry-level job, there are alternative choices for new grads—including internships, volunteering, grad school, spending time abroad, or serving in Americorps.
Naturally, the options available will differ depending on each person’s situation, as not all alternatives to work come with a paycheck attached.
Here’s a look at these seven things to do after college besides work.
1. Pursuing Internships
One popular alternative to working right after college is finding an internship. Generally, internships are temporary work opportunities, which are sometimes, but not always, paid.
Internships may give recent grads a chance to build up hands-on experience in a field or industry they believe they’re interested in working in full time. For some people, it could help determine whether the reality of working in a given sector meets their expectations.
Whatever grads learn during an internship, having on-the-job experience (even for those who opt to pursue a different career path) could make a job seeker stand out afterwards. Internships can help beef up a resume, especially for recent grads who don’t have much formal job experience.
A potential perk of internships is the chance to further grow your professional network—building relationships with more experienced workers in a particular department or job. Some interns may even be able to turn their short-term internship roles into a full-time position at the same company.
Starting out in an internship can be a great way for graduates to enter the workforce, “road testing” a specific job role or company.
2. Serving with AmeriCorps
Some graduates want to spend their time after college contributing to the greater good of American society. One possible option here is the Americorps program—supported by the US Federal Government.
So, what exactly is Americorps? Americorps is a national service program dedicated to improving lives and fostering civic engagement. There are three main programs that graduates can join in AmeriCorps: AmeriCorps NCCC, AmeriCorps State and National, and AmeriCorps Vista.
There’s a wide variety of options in AmeriCorps, when it comes to how you can serve. Graduates can work in emergency management, help fight poverty, or work in a classroom.
However graduates decide to serve through AmeriCorps, it may provide them with a rewarding professional experience and insights into a potential career.
Practically, Americorps members may also qualify for benefits such as student loan deferment, a living allowance, education awards (upon finishing their service), and skills training.
It may sound a bit dramatic, but AmeriCorps’ slogan is “Be the greater good.” Giving back to society could be a powerful way to spend some time after graduating—supporting organizations in need, while also establishing new professional connections.
3. Attending Grad School
When entering the workforce, graduates may encounter job postings with detailed employment requirements.
Some jobs require just a Bachelor’s degree, while others require a Master’s–think, for instance, of being a lawyer or medical doctor. Depending on their field of study and career goals, some students may opt to go right to graduate school after receiving their undergraduate degrees.
The number of jobs that expect graduate degrees is increasing in the US. Graduates might want to research their desired career fields and see if it’s common for people in these roles to need a master’s or terminal degree.
Some students may wish to take a break in between undergrad and grad school, while others find it easier to go straight through. This choice will vary from student to student, depending on the energy they have to continue school as well as their financial ability to attend graduate school.
Graduate school will be a commitment of time, energy and money. So, it’s advisable that students feel confident that a graduate degree is necessary for the line of work they’d like to end up in before they apply or enroll.
4. Volunteering for a Cause
Volunteering could be a great way for graduates to gain some extra skills before applying for a full-time job. Doing volunteer work may help graduates polish some essential soft skills, like interpersonal communication, interacting with clients or service recipients, and time management.
Another potential benefit to volunteering is the ability to network and forge new connections outside of college. The people-to-people connections made while volunteering could lead to mentorship and job offers.
Volunteering is something graduates can do after college besides work, while still fleshing out their resume or skills.
New grads may want to volunteer at an institution or organization that syncs with their values or, perhaps, pursue opportunities in sectors of the economy where they’d like to work later on (i.e., at a hospital).
On top of all these potential plus sides, volunteering just feels good. It makes people feel happier. And, after all of the stress that accompanies finishing up college, volunteering afterward could be the perfect way to recharge.
5. Serving Abroad
Similar to the last option, volunteering abroad can be attractive to some graduates. It may help grads gain similar skills they’d learn volunteering here at home, while also giving them the opportunity to learn how to interact with people from different cultures, try to learn a new language, and see new perspectives on solving problems.
Though it can be beneficial to the volunteers, volunteering abroad isn’t always as ethical as it seems. And, not all volunteering opportunities always benefit the local community.
It could take research to find organizations that are doing ethically responsible work abroad. One key thing to look for is organizations that put the locals first and have them directly involved in the work.
6. Taking a Gap Year
According to the Gap Year Association , a gap year is “a semester or year of experiential learning, typically taken after high school and prior to career or post-secondary education, in order to deepen one’s practical, professional, and personal awareness.”
While a gap year is generally taken after high school or after college, one common purpose of the gap year is to take the time to learn more about oneself and the world at large—which can be beneficial after graduating from college and trying to figure out what to do next.
Not only might a gap year help grads build insights into what they’d like to do with their later careers, it may also help them home in on a greater purpose in life or build connections that could lead to future job opportunities.
Graduates might want to spend a gap year doing a variety of activities—including:
• trying out seasonal jobs • volunteering • interning • teaching or tutoring • traveling
A gap year can be whatever the graduate thinks will be most beneficial for them.
7. Traveling Before Working
Going on a trip after graduation is a popular choice for graduates that can afford to travel after college. Traveling can be expensive, so graduates may want to budget in advance (if they want to have this experience post-graduation.
On top of just being really fun, travel can have beneficial impacts for an individual’s stress levels and mental health. Research from Cornell University published in 2014 suggests that the anticipation of planning a trip might have the potential to increase happiness.
Traveling after graduation is a convenient time to start ticking locations off that bucket list, because graduates won’t be held back by a limited vacation time. Going abroad before working can give students more time and flexibility to travel as much as they’d like (and can afford to!).
With proper research, graduates can find more affordable ways to travel—such as a multi-country rail pass, etc. It doesn’t have to be all luxury all the time. Budget travel is possible especially when making conscious decisions, like staying in hostels and using public transportation.
If graduates are determined to travel before working, they can accomplish this by saving money and budgeting well.
Navigating Post Graduation Decisions
Whether a recent grad opt to start their careers off right away or to pursue one of the above-mentioned things to do after college besides work, student loans are something that millions of university students have taken out.
After graduating (or if you’ve dropped below half-time enrollment or left school), the reality of paying back student loans sets in. The exact moment that grads will have to begin paying off their student loans will vary by the type of loan.
For federal loans, there are a couple of different times that repayment begins. Students who took out a Direct Subsidized, Direct Unsubsidized, or Federal Family Education Loan, will all have a six month grace period before they’re required to make payments. Students who took out a Perkins loan will have a nine month grace period.
When it comes to the PLUS loan, it depends on the type of student that’s taken one out. Undergraduates will be required to start repayment as soon as the loan is paid out. Graduate and professional students with PLUS loans will be on automatic deferment while they’re in school and up to six months after graduating.
Some graduates opt to refinance their student loans. What does that mean? Well, refinancing student loans is when a lender pays off the existing loan with another loan that has a new interest rate. Refinancing can potentially lower monthly loan repayments or reduce the amount spent on interest over the life of the loan.
Both US federal and private student loans can be refinanced, but when federal student loans are refinanced by a private lender, the borrower forfeits guaranteed federal benefits—including loan forgiveness, deferment and forbearance, and income-driven repayment options.
Refinancing student loans may reduce money paid to interest. For graduates who have secured well-paying jobs and have improved their credit score since taking out their student loan, refinancing could come with a competitive interest rate and different repayment terms.
Graduating from college means officially entering the realm of adulthood, but that transition can take many forms. There are various financial tips that recent graduates may opt to look into.
Thinking about refinancing your student loans? With SoFi, you could get prequalified in just two minutes.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement. SoFi Student Loan Refinance IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF SEPTEMBER DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION. Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation. Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners. SoFi Private Student Loans Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. SoFi Lending Corp. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed. Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
As COVID-19 swept the globe and the country, it put stress on all types of supply chains and industries. It has also put stress on the financial and health situations of many Americans.
If you’re looking back to whenever your last healthcare benefits enrollment period was and grimacing at the choices you made, you’re in luck—you might have the chance to change them. In addition to extending the tax deadline for 2020, the IRS has issued a rule modification in light of the pandemic that might allow you to change your elections mid-year instead of waiting for the next open enrollment period.
Find out more about these changes and what they might mean
for you here.
Key Points
You may be able to switch to a different healthcare
plan if your employer allows it.
You may be able to drop employer-sponsored
coverage if your employer allows it.
You may be able to change contributions to a
flexible spending account (FSA) if your employer allows it.
Employers may voluntarily extend the grace
period for using 2019 FSA funds.
A Potential Mid-Year Open-Enrollment Period
The IRS rule change allows mid-year enrollment in a
different plan that your employer offers. This means employees may be able to
make new elections to better use their income and protect themselves against healthcare
expenses.
However, employers are being given the choice of whether
they want to offer these options. The answers to the questions below all depend
on whether your employer elects to allow changes.
Can I drop my healthcare insurance altogether?
Yes, you can elect to end healthcare insurance coverage through your employer. The caveat is that you must replace that coverage with a qualifying plan through the health insurance marketplace, a spouse’s benefits or another option.
Can I switch healthcare plans?
If the employer allows it, yes, you can switch healthcare
plans outside of the normal open enrollment. This is true even for people who
have not had a qualifying event such as a job loss or a change in marital
status.
Can I get health insurance if I didn’t have it before?
Yes, if your employer allows an open enrollment period mid-year, you can elect benefits even if you previously declined them. This allows more people to get insurance that they may now want or need in light of the pandemic.
If I change plans, will I lose what I’ve paid toward my out-of-pocket deductible?
It’s probable that changing plans will reset all
benefits-related counters. That includes deductibles and out-of-pocket
expenses. If you’re considering making a change, weigh how much you’ve already
contributed toward your deductible and out-of-pocket maximum. In some cases, it
might be more financially beneficial to stick with the plan you have if you’re
close to or have already met your maximum.
Changes to FSAs
The IRS also provides a rule change that addresses flexible spending accounts. Again, these changes are dependent upon the employer choosing to participate.
If the employer does choose to participate, employees can make mid-year changes to their FSA elections. For example, you might have elected not to fund an FSA or to fund it very minimally. But in light of the health crisis, you may now want to put more money into your account to cover medical expenses. You may be able to do so.
Alternatively, perhaps your spouse lost his or her job due to COVID-19, and you’d previously elected to fund your FSA with a large amount. You might now need that money to pay for non-FSA-approved expenses. You may be able to elect to reduce your contributions.
Changes to Dependent Care Assistance Programs
The same rule change applies to section 125 cafeteria
plans used to help cover the cost of childcare programs. If your employer
allows it, you can elect to increase or decrease the contributions you’re
making to these programs.
For example, you might have previously elected to contribute enough money to pay for your children’s daycare expenses. This allows you to pay those costs with pretax dollars.
However, during the pandemic, your daycare might have closed, leaving your kids at home with you. Those contributed dollars are going nowhere and you risk losing them. If your employer allows it, you can change your contribution to stop adding money into your cafeteria plan. You can then use those funds to cover expenses related to your children being home.
Healthcare Coverage for COVID-19
The Coronavirus Aid, Relief and Economic Security Act instituted some exemptions to help ensure high-deductible plans and other insurance plans covered more services related to COVID-19. For example, the plan includes a specific exemption for telehealth services to help allow insurance providers to cover necessary telehealth treatments and appointments.
The IRS rule change allows those exemptions to be applied
retroactively up to January 1, 2020. That means if you sought telehealth or
other COVID-19-related care in the past months, you may be able to have those
claims adjudicated by your insurance plan at this time.
Reach Out to Your Employer’s Benefits Office
Understanding benefits and how they can impact your entire financial life can be difficult. Start by reaching out to your employer’s HR or benefits office to understand whether they’re going to offer the option for mid-year elections and whether they can provide information about how the options work.
Reviewed by John Heath, Directing Attorney of Lexington Law Firm. Written by Lexington Law.
Born and raised in Salt Lake City, John Heath earned his BA from the University of Utah and his Juris Doctor from Ohio Northern University. John has been the Directing Attorney of Lexington Law Firm since 2004. The firm focuses primarily on consumer credit report repair, but also practices family law, criminal law, general consumer litigation and collection defense on behalf of consumer debtors. John is admitted to practice law in Utah, Colorado, Washington D. C., Georgia, Texas and New York.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
As COVID-19 swept the globe and the country, it put stress on all types of supply chains and industries. It has also put stress on the financial and health situations of many Americans.
If you’re looking back to whenever your last healthcare benefits enrollment period was and grimacing at the choices you made, you’re in luck—you might have the chance to change them. In addition to extending the tax deadline for 2020, the IRS has issued a rule modification in light of the pandemic that might allow you to change your elections mid-year instead of waiting for the next open enrollment period.
Find out more about these changes and what they might mean
for you here.
Key Points
You may be able to switch to a different healthcare
plan if your employer allows it.
You may be able to drop employer-sponsored
coverage if your employer allows it.
You may be able to change contributions to a
flexible spending account (FSA) if your employer allows it.
Employers may voluntarily extend the grace
period for using 2019 FSA funds.
A Potential Mid-Year Open-Enrollment Period
The IRS rule change allows mid-year enrollment in a
different plan that your employer offers. This means employees may be able to
make new elections to better use their income and protect themselves against healthcare
expenses.
However, employers are being given the choice of whether
they want to offer these options. The answers to the questions below all depend
on whether your employer elects to allow changes.
Can I drop my healthcare insurance altogether?
Yes, you can elect to end healthcare insurance coverage through your employer. The caveat is that you must replace that coverage with a qualifying plan through the health insurance marketplace, a spouse’s benefits or another option.
Can I switch healthcare plans?
If the employer allows it, yes, you can switch healthcare
plans outside of the normal open enrollment. This is true even for people who
have not had a qualifying event such as a job loss or a change in marital
status.
Can I get health insurance if I didn’t have it before?
Yes, if your employer allows an open enrollment period mid-year, you can elect benefits even if you previously declined them. This allows more people to get insurance that they may now want or need in light of the pandemic.
If I change plans, will I lose what I’ve paid toward my out-of-pocket deductible?
It’s probable that changing plans will reset all
benefits-related counters. That includes deductibles and out-of-pocket
expenses. If you’re considering making a change, weigh how much you’ve already
contributed toward your deductible and out-of-pocket maximum. In some cases, it
might be more financially beneficial to stick with the plan you have if you’re
close to or have already met your maximum.
Changes to FSAs
The IRS also provides a rule change that addresses flexible spending accounts. Again, these changes are dependent upon the employer choosing to participate.
If the employer does choose to participate, employees can make mid-year changes to their FSA elections. For example, you might have elected not to fund an FSA or to fund it very minimally. But in light of the health crisis, you may now want to put more money into your account to cover medical expenses. You may be able to do so.
Alternatively, perhaps your spouse lost his or her job due to COVID-19, and you’d previously elected to fund your FSA with a large amount. You might now need that money to pay for non-FSA-approved expenses. You may be able to elect to reduce your contributions.
Changes to Dependent Care Assistance Programs
The same rule change applies to section 125 cafeteria
plans used to help cover the cost of childcare programs. If your employer
allows it, you can elect to increase or decrease the contributions you’re
making to these programs.
For example, you might have previously elected to contribute enough money to pay for your children’s daycare expenses. This allows you to pay those costs with pretax dollars.
However, during the pandemic, your daycare might have closed, leaving your kids at home with you. Those contributed dollars are going nowhere and you risk losing them. If your employer allows it, you can change your contribution to stop adding money into your cafeteria plan. You can then use those funds to cover expenses related to your children being home.
Healthcare Coverage for COVID-19
The Coronavirus Aid, Relief and Economic Security Act instituted some exemptions to help ensure high-deductible plans and other insurance plans covered more services related to COVID-19. For example, the plan includes a specific exemption for telehealth services to help allow insurance providers to cover necessary telehealth treatments and appointments.
The IRS rule change allows those exemptions to be applied
retroactively up to January 1, 2020. That means if you sought telehealth or
other COVID-19-related care in the past months, you may be able to have those
claims adjudicated by your insurance plan at this time.
Reach Out to Your Employer’s Benefits Office
Understanding benefits and how they can impact your entire financial life can be difficult. Start by reaching out to your employer’s HR or benefits office to understand whether they’re going to offer the option for mid-year elections and whether they can provide information about how the options work.
Reviewed by John Heath, Directing Attorney of Lexington Law Firm. Written by Lexington Law.
Born and raised in Salt Lake City, John Heath earned his BA from the University of Utah and his Juris Doctor from Ohio Northern University. John has been the Directing Attorney of Lexington Law Firm since 2004. The firm focuses primarily on consumer credit report repair, but also practices family law, criminal law, general consumer litigation and collection defense on behalf of consumer debtors. John is admitted to practice law in Utah, Colorado, Washington D. C., Georgia, Texas and New York.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
You’ve got several factors to consider — ATM access, interest rates, monthly fees, minimum balances, mobile app reviews, and more.
Another factor to consider: bank promotions. These are cash bonuses you can earn when opening a new checking or savings account with a bank or credit union during the promotion window, meeting any specific criteria and keeping the account open at least long enough to earn the extra cash.
While a savings or checking bonus shouldn’t be your top reason to choose a bank, don’t rule it out entirely. After all, wouldn’t it be nice to fund your shiny new account with some extra cash?
Many banks offer such sign-up bonuses, but often, these bonuses aren’t advertised, meaning finding the best bank account bonuses can be tricky. That’s why we did some digging for you and found some hefty cash offers.
Best Bank Promotions of May 2021
We’ve researched the best cash bonuses available this month so you don’t have to. Below, you’ll find our favorite checking and savings account bonuses.
Keep an eye on what it takes to qualify, as well as any limitations. Direct deposit and minimum balances are commonly factors in securing these bonuses. Also pay attention to any monthly fees the account might carry; over time, these could weigh out the actual cash bonus. Otherwise, happy bank bonus shopping!
1. Aspiration Account: $150
Bonus amount: $150
How to get the bonus: To earn your $150, here’s all you need to do: Open your Aspiration account and deposit at least $10. Aspiration will send you a debit card associated with the account. Use the Aspiration debit card to make at least $1,000 of cumulative transactions within the first 60 days of opening your account. There’s no need to spend extra money — just use your card to buy groceries and pay your utilities.
Where to sign up: Enter your email address here, and link your bank account.
When you’ll get the bonus: Allow up to 120 calendar days from account opening to receive the bonus; you must have completed the requirements within the first 60 days.
The fine print: With Aspiration, your money is FDIC insured and under a military-grade encryption. The account offers up to 1.00% APY on savings and allows fee-free withdrawals at more than 55,000 ATMs. There are no hidden fees with Aspiration (monthly fees are on a “Pay What is Fair” policy, and that can be zero every month!), and you’ll earn cash back when you spend at socially conscious businesses (up to 5%).
No offer expiration.
2. Aspiration Plus Account: $200
Bonus amount: $200
How to get the bonus: To earn your $200, here’s all you need to do: Open your Aspiration Plus account during signup or within the first 60 days of enrollment in the regular Aspiration Account. Deposit at least $10. Aspiration will send you a debit card associated with the account. Use the Aspiration debit card to make at least $1,000 of cumulative transactions within the first 60 days of opening your account. There’s no need to spend extra money — just use your card to buy groceries and pay your utilities.
Where to sign up: Enter your email address here, and link your bank account.
When you’ll get the bonus: Allow up to 120 calendar days from account opening to receive the bonus; you must have completed the requirements within the first 60 days.
The fine print: With Aspiration, your money is FDIC insured and under a military-grade encryption. The account offers up to 1.00% APY on savings and allows fee-free withdrawals at more than 55,000 ATMs. Unlike the typical Aspiration Account, there is a $15/month fee (or $12.50/month if you pay annually). However, you’ll earn more cash back when you spend at socially conscious businesses (up to 10%), get monthly out-of-network ATM reimbursement and receive carbon offsets for all gas purchases.
No offer expiration.
3. TD Bank Beyond Checking Account: $300
Bonus amount: $300
How to get the bonus: Open a new TD Beyond Checking account. You must receive a total of $2,500 or more via direct deposit within 60 days of opening your new account.
Where to sign up: Visit this TD Checking page. Click the orange “open account” button, and follow the instructions to open a TD Beyond Checking account.
When you’ll get the bonus: The $300 bonus will be deposited into your account within 140 days of opening.
The fine print: While this bonus offer sounds too good to be true, it is definitely attainable. However, only open the account if you regularly get sizable monthly deposits or can maintain a healthy minimum balance. That’s because the account charges a monthly maintenance fee, but TD will waive the fee if you receive monthly direct deposits of $5,000, keep a minimum daily balance of $2,500 or maintain a combined balance across all your TD bank accounts of a whopping $25,000.
TD fees—and the bank’s capacity for waiving them—extend to ATMs. You won’t face fees for making withdrawals at TD’s own ATMs, and it’ll reimburse all fees for withdrawing at non-TD ATMs as long as you keep your daily balance at $2,500 or more.
No offer expiration.
4. TD Bank Convenience Checking Account: $150
Bonus amount: $150
How to get the bonus: Open a new TD Convenience Checking account. You must receive a total of $500 or more via direct deposit within 60 days of opening your new account.
Where to sign up: Visit this TD Checking page. Click the orange “open account” button, and follow the instructions to open a TD Beyond Checking account.
When you’ll get the bonus: The $150 bonus will be deposited into your account within 140 days of opening.
The fine print: While this bonus offer sounds too good to be true, it is definitely attainable. Unlike the TD Bank Beyond Checking account, this checking account option is easier for financial beginners to manage. You only need to maintain a minimum balance of $100 to have the monthly maintenance fee waived. And if you are between the age of 17 and 23, there are no minimum balance requirements and no monthly maintenance fee.
However, the Convenience Checking account does not earn interest; the Beyond Checking account does.
No offer expiration.
Carmen Mandato/ The Penny Hoarder
5. Bank of America Advantage Banking Account: $100
Bonus amount: $100
How to get the bonus: Open a new Bank of American Advantage Banking account online using the offer code DOC100CIS. You must then set up and receive two qualifying direct deposits, each totaling $250 or more, within 90 days of opening the new account. This offer is only available to new Bank of America personal checking account customers.
Where to sign up: Visit the offer page and use the offer code DOC100CIS when opening the account.
When you’ll get the bonus: Bank of America promises to “attempt” to deposit the bonus into the account within 60 days of satisfying all requirements. Though the “attempt” disclosure seems a little suspect, we could not find traces of reviews citing unpaid bonuses.
The fine print: A qualifying direct deposit means the direct deposit must be regular monthly income, whether through salary, pension or Social Security benefits. Deposits through wire transfer, apps like Venmo or ATM transfers will not qualify.
Advantage Banking accounts come in three varieties: SafeBalance, Plus and Relationship. All three carry monthly maintenance fees that can be waived:
To waive the SafeBalance monthly maintenance fee of $4.95, enroll in Preferred Rewards.
To waive the Plus monthly maintenance fee of $12, receive a qualifying minimum direct deposit, maintain minimum daily balance requirements or enroll in Preferred Rewards.
To waive the Relationship monthly maintenance fee of $25, maintain the minimum combined balance in all linked accounts or enroll in Preferred Rewards.
Offer expires June 30, 2021.
6. Associated Bank Access Checking Account: Up to $500
Bonus amount: Up to $500
How to get the bonus: Open a new Associated Access Checking account with a minimum deposit of $25 and receive direct deposits totaling at least $500 within 90 days of opening your account. Bonus values will vary based on the sum of the average daily balance of all Associated Bank deposit accounts from days 61 to 90:
Average daily balances of $1,000 to $4,999.99 will earn a $200 bonus.
Average daily balances of $5,000 to $9,999.999 will earn a $300 bonus.
Average daily balances of $10,000 or more will earn a $500 bonus.
Where to sign up: Visit this Associated Bank account sign-up page and select the appropriate account.
When you’ll get the bonus: You will receive the bonus as a deposit to your account within 120 days of account opening.
The fine print: Must be a new Associated Access Checking customer. If easy access to a physical branch is important to you, note that the bank has locations in Illinois, Minnesota and Wisconsin, but members have free access to MoneyPass ATMs nationwide. Account must remain open for a minimum of 12 months; if you close it early, Associated Bank reserves the right to deduct the paid out bonus before account closure.
The account requires a minimum deposit of $25, charges $4 a month if you require paper statements and does not earn interest.
Offer expires May 31, 2021.
7. Associated Bank Balanced Checking Account: Up to $500
Bonus amount: Up to $500
How to get the bonus: Open a new Associated Balanced Checking account with a minimum deposit of $100 and receive direct deposits totaling at least $500 within 90 days of opening your account. Bonus values will vary based on the sum of the average daily balance of all Associated Bank deposit accounts from days 61 to 90:
Average daily balances of $1,000 to $4,999.99 will earn a $200 bonus.
Average daily balances of $5,000 to $9,999.999 will earn a $300 bonus.
Average daily balances of $10,000 or more will earn a $500 bonus.
Where to sign up: Visit this Associated Bank account sign-up page and select the appropriate account.
When you’ll get the bonus: You will receive the bonus as a deposit to your account within 120 days of account opening.
The fine print: Must be a new Associated Balanced Checking customer. If easy access to a physical branch is important to you, note that the bank has locations in Illinois, Minnesota and Wisconsin, but members have free access to MoneyPass ATMs nationwide. Account must remain open for a minimum of 12 months; if you close it early, Associated Bank reserves the right to deduct the paid out bonus before account closure.
The account requires a minimum deposit of $100 and does not earn interest.
Offer expires May 31, 2021.
8. Associated Bank Choice Checking Account: Up to $500
Bonus amount: Up to $500
How to get the bonus: Open a new Associated Choice Checking account with a minimum deposit of $100 and receive direct deposits totaling at least $500 within 90 days of opening your account. Bonus values will vary based on the sum of the average daily balance of all Associated Bank deposit accounts from days 61 to 90:
Average daily balances of $1,000 to $4,999.99 will earn a $200 bonus.
Average daily balances of $5,000 to $9,999.999 will earn a $300 bonus.
Average daily balances of $10,000 or more will earn a $500 bonus.
Where to sign up: Visit this Associated Bank account sign-up page and select the appropriate account.
When you’ll get the bonus: You will receive the bonus as a deposit to your account within 120 days of account opening.
The fine print: Must be a new Associated Choice Checking customer. If easy access to a physical branch is important to you, note that the bank has locations in Illinois, Minnesota and Wisconsin, but members have free access to MoneyPass ATMs nationwide. Account must remain open for a minimum of 12 months; if you close it early, Associated Bank reserves the right to deduct the paid out bonus before account closure.
The account requires a minimum deposit of $100. This account is the only Associated option that earns interest and offers complimentary checks.
Offer expires May 31, 2021.
9. Citizens Bank Student Checking Account: Up to $400
Bonus amount: Up to $400
How to get the bonus: Open a new Student Checking account with Citizens Bank. Receive a direct deposit of $500 or more within the first 60 days to earn a $300 bonus.
Earn an additional $2 for every debit card purchase you make within the first 60 days, up to $100 total rewards (50 purchases).
Where to sign up: Visit this promotional page for Citizens Bank and choose “Open Your Account” button for the Student Checking account. The promotion only applies when opening the account via this page.
When you’ll get the bonus: If you open the account this month (May 2021), your bonus will be paid by September 30, 2021.
The fine print: Cannot have had a Citizens Bank account in the six months prior. Qualifying debit card transactions must be in person, on an app or on a merchant site; online bill payments and ATM payments do not qualify. While the account advertises a $0 monthly maintenance fee, you must be under 25 for this to apply. This account does not offer an APY.
Offer expires May 13, 2021.
Getty Images
10. Citizens Bank One Deposit Checking from Citizens: Up to $400
Bonus amount: Up to $400
How to get the bonus: Open a new One Deposit Checking from Citizens. Receive a direct deposit of $500 or more within the first 60 days to earn a $300 bonus.
Earn an additional $2 for every debit card purchase you make within the first 60 days, up to $100 total rewards (50 purchases).
Where to sign up: Visit this promotional page for Citizens Bank and choose “Open Your Account” button for One Deposit Checking from Citizens. The promotion only applies when opening the account via this page.
When you’ll get the bonus: If you open the account this month (May 2021), your bonus will be paid by September 30, 2021.
The fine print: Cannot have had a Citizens Bank account in the six months prior. Qualifying debit card transactions must be in person, on an app or on a merchant site; online bill payments and ATM payments do not qualify. There is a monthly maintenance fee of $9.99; to waive it, make one deposit each statement period. This account does not offer an APY.
Offer expires May 13, 2021.
11. Citizens Bank Platinum Checking: Up to $400
Bonus amount: Up to $400
How to get the bonus: Open a new Citizens Platinum Checking account. Receive a direct deposit of $500 or more within the first 60 days to earn a $300 bonus.
Earn an additional $2 for every debit card purchase you make within the first 60 days, up to $100 total rewards (50 purchases).
Where to sign up: Visit this promotional page for Citizens Bank and choose “Open Your Account” button for the Platinum Checking account. The promotion only applies when opening the account via this page.
When you’ll get the bonus: If you open the account this month (May 2021), your bonus will be paid by September 30, 2021.
The fine print: Cannot have had a Citizens Bank account in the six months prior. Qualifying debit card transactions must be in person, on an app or on a merchant site; online bill payments and ATM payments do not qualify. There is a monthly maintenance fee of $25; to waive it, you must have a combined monthly balance (across all Citizens deposit and investment accounts) of $25,000 or more. This account offers an APY with a variable rate, but it is quite low compared to typical online bank APYs.
Offer expires May 13, 2021.
12. Citizens Bank Platinum Plus Checking: Up to $400
Bonus amount: Up to $400
How to get the bonus: Open a new Citizens Platinum Plus Checking account. Receive a direct deposit of $500 or more within the first 60 days to earn a $300 bonus.
Earn an additional $2 for every debit card purchase you make within the first 60 days, up to $100 total rewards (50 purchases).
Where to sign up: Visit this promotional page for Citizens Bank and choose “Open Your Account” button for the Platinum Plus Checking account. The promotion only applies when opening the account via this page.
When you’ll get the bonus: If you open the account this month (May 2021), your bonus will be paid by September 30, 2021.
The fine print: Cannot have had a Citizens Bank account in the six months prior. Qualifying debit card transactions must be in person, on an app or on a merchant site; online bill payments and ATM payments do not qualify. There is a monthly maintenance fee of $25; to waive it, you must have a combined monthly balance (across all Citizens deposit and investment accounts) of $25,000 or more and make a deposit of at least $5,000 in your checking account each statement period OR maintain an average daily balance in the checking account of $10,000 or more. This account offers an APY with a variable rate, but it is quite low compared to typical online bank APYs.
Offer expires May 13, 2021.
13. PNC Virtual Wallet Account: $50
Bonus amount: $50
How to get the bonus: Open a new PNC Virtual Wallet account online or in a branch. Receive qualifying direct deposits of $500 within the first 60 days.
Where to sign up: Visit this promotional page for PNC and choose “Apply Now” for the Virtual Wallet account (either with Spend, Reserve and Growth or just Spend).
When you’ll get the bonus: After meeting the bonus criteria, you will receive the bonus (labeled “Cash Trans Promo Reward” on your monthly statement) within 60 to 90 days.
The fine print: Cannot have a current PNC account or have closed an account within the previous 90 days. Qualifying direct deposits include paychecks, Social Security, pension or other recurring monthly income that is electronically deposited by your employer or an outside agency into your account. The account carries a $7 monthly service charge that can be waived if 1) you have $500 or more in monthly direct deposits in the associated Spend account, 2) you maintain $500 or more between associated Spend and Reserve accounts, or 3) are 62 or older. This account does not earn interest.
Offer expires June 30, 2021.
14. PNC Virtual Wallet with Performance Spend Account: $200
Bonus amount: $200
How to get the bonus: Open a new PNC Virtual Wallet with a Performance Spend account online or in a branch. Receive qualifying direct deposits of $2,000 within the first 60 days.
Where to sign up: Visit this promotional page for PNC and choose “Apply Now” for the Virtual Wallet with Performance Spend account (either with Spend, Reserve and Growth or just Spend).
When you’ll get the bonus: After meeting the bonus criteria, you will receive the bonus (labeled “Cash Trans Promo Reward” on your monthly statement) within 60 to 90 days.
The fine print: Cannot have a current PNC account or have closed an account within the previous 90 days. Qualifying direct deposits include paychecks, Social Security, pension or other recurring monthly income that is electronically deposited by your employer or an outside agency into your account. The account carries a $15 monthly service charge that can be waived if 1) you have $2,000 or more in monthly direct deposits in the associated Spend account, 2) you maintain $2,000 or more between associated Spend and Reserve accounts, or 3) have at least $10,000 across all consumer PNC accounts.
Offer expires June 30, 2021.
15. PNC Virtual Wallet with Performance Select Account: $300
Bonus amount: $300
How to get the bonus: Open a new PNC Virtual Wallet with Performance Select account online or in a branch. Make qualifying direct deposits of $5,000 within the first 60 days.
Where to sign up: Visit this promotional page for PNC and choose “Apply Now” for the Virtual Wallet with Performance Select account (either with Spend, Reserve and Growth or just Spend).
When you’ll get the bonus: After meeting the bonus criteria, you will receive the bonus (labeled “Cash Trans Promo Reward” on your monthly statement) within 60 to 90 days.
The fine print: Cannot have a current PNC account or have closed an account within the previous 90 days. Qualifying direct deposits include paychecks, Social Security, pension or other recurring monthly income that is electronically deposited by your employer or an outside agency into your account. The account carries a $25 monthly service charge that can be waived if 1) you have $5,000 or more in monthly direct deposits in the associated Spend account, 2) you maintain $5,000 or more between associated Spend and Reserve accounts, or 3) have at least $25,000 across all consumer PNC accounts.
Offer expires June 30, 2021.
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How to Search for Bank Bonuses on Your Own
In the spirit of not listing approximately 193 bank promotions, we kept this list short and sweet — only highlighting the best bank promotions for checking and savings accounts.
But maybe you’re interested in banking with your local credit union, opening up a small business checking account or finding the perfect investment account? There are often bonus offers attached to these account openings, too.
The banks don’t always make finding these promotions easy, so here are a few tips to help you get your hands on that cash bonus.
Check the bank’s website first. Sometimes it’ll advertise its promotions right there. This is rare, but it’s worth a quick check — it could save you a ton of time.
If you don’t have any luck, reach out to the bank’s customer service team through phone, email or chat. Let them know you’re shopping for a new account, and you’d like to know if it’s running any promotions. More often than not, the nice representative will send you a special link.
If this doesn’t work, turn to your trusty friend Google. Look for the best bank account bonuses. Because you’ll likely dig up some offers from third-party sites, you’ll want to take a few minutes to make sure the offer:
Hasn’t expired.
Is legitimate. Make sure the bank is FDIC-insured and has a positive Better Business Bureau rating. You can even read some online reviews.
Doesn’t require outrageous qualifying activities. For example, it might not be realistic for you to maintain an average daily balance of $50,000 and carry out 60 qualifying debit card purchases or receive five direct deposits before the end of your first 30-day statement cycle.
You can also reach out to your family, friends and social network to crowdsource bank recommendations. Sometimes banks have impressive referral programs, so both you and your friend could benefit from you signing up.
Overall, be smart. Don’t let that promise of an account bonus blind you. Also, read the fine print so you don’t get stuck paying high monthly fees, interest rates or closing penalties.
Will Opening a Bank Account Hurt Your Credit Score?
If you’re worried that opening a new bank account or closing an old one will hurt your credit score, don’t be. Your bank accounts are not included in your credit report and therefore have no effect on your credit score, unless you have an outstanding negative balance that the bank turns over to a collection agency.
Sometimes when you go to open a new bank account, banks will do a soft credit check. However, that won’t affect your credit score.
Now, go enjoy your fresh new bank account and that nice cash bonus you’re about to pocket. Add it to your savings account, put it toward student loan payments or, heck, treat yourself!
Editorial Disclosure: This content is not provided by the bank advertiser. Opinions expressed here are the author’s alone, not those of the bank advertiser. This site may be compensated through the bank advertiser Affiliate Program.
Investing is an important part of saving for the future, but many people are wary of putting their money into the stock market. Stocks can be volatile, with prices that change every day. If you can’t handle the volatility and risk of stocks or want to diversify your portfolio into a less risky investment, bonds are a good way to do so.
As with many types of investments, you can invest in bonds through a mutual fund, which gives you easy diversification and professional portfolio management — for a fee.
Are bond mutual funds a good addition to your portfolio? Here are the basics of these investment vehicles.
What Is a Bond?
A bond is a type of debt security. When organizations such as national and local governments, government agencies, or companies want to borrow money, one of the ways they can get the loan they need is by issuing a bond.
Investors purchase bonds from the organizations issuing them. Typically, bonds come with an interest rate and a maturity. For example, a company might sell bonds with an interest rate of 5% and a maturity of 20 years.
The investor would pay the company $1,000 for a $1,000 bond. Each year, that investor receives an interest payment of $50 (5% of $1,000). After 20 years, the investor receives a final interest payment plus the $1,000 they paid to buy the bond.
What Is a Mutual Fund?
A mutual fund is a way for investors to invest in a diverse portfolio while only having to purchase a single security.
Mutual funds pool money from many investors and use that money to buy bonds, stocks, and other securities. Each investor in the fund effectively owns a portion of the fund’s portfolio, so an investor can buy shares in one mutual fund to get exposure to hundreds of stocks or bonds.
This makes it easy for investors to diversify their portfolios.
Mutual fund managers make sure the fund’s portfolio follows their stated strategy and work towards the fund’s stated goal. Mutual funds charge a fee, called an expense ratio, for their services, which is important for investors to keep in mind when comparing funds.
Pro tip: Most mutual funds can be purchased through the individual fund family or through an online broker like Robinhood or Public.
Types of Bond Mutual Funds
There are many types of bond mutual funds that people can invest in.
1. Government
Government bond funds invest most of their money into bonds issued by different governments. Most American government bond funds invest primarily in bonds issued by the U.S. Treasury.
U.S. government debt is seen as some of the safest debt available. There is very little chance that the United States will default on its payments. That security can be appealing for investors, but also translates to lower interest rates than other bonds.
2. Corporate
Corporate bond funds invest most of their assets into bonds issued by companies.
Just like individuals, businesses receive credit ratings that affect how much interest they have to pay to lenders — in this case, investors looking to buy their bonds. Most corporate bond funds buy “investment-grade” bonds, which include the highest-rated bonds from the most creditworthy companies.
The lower a bond’s credit rating, the higher the interest rate it will pay. However, lower credit ratings also translate to a higher risk of default, so corporate bond funds will hold a mixture of bonds from a variety of companies to help diversify their risks.
3. Municipal
Municipal bonds are bonds issued by state and local governments, as well as government agencies.
Like businesses, different municipalities can have different credit ratings, which impacts the interest they must pay to sell their bonds. Municipal bond funds own a mixture of different bonds to help reduce the risk of any one issuer defaulting on its payments.
One unique perk of municipal bonds is that some or all of the interest that investors earn can be tax-free. The tax treatment of the returns depends on the precise holdings of the fund and where the investor lives.
Some mutual fund companies design special municipal bond funds for different states, giving investors from those states an option that provides completely tax-free yields.
The tax advantages municipal bond funds offer can make their effective yields higher than other bond funds that don’t offer tax-free yields. For example, someone in the 24% tax bracket would need to earn just under 4% on a taxable bond fund to get the equivalent return of a tax-free municipal bond fund offering 3%.
4. High-Yield
High-yield bond funds invest in bonds that offer higher interest rates than other bonds, like municipal bonds and government bonds.
Typically, this means buying bonds from issuers with lower credit ratings than investment-grade bonds. These bonds are sometimes called junk bonds. Their name comes from the fact that they are significantly riskier than other types of bonds, so there’s a higher chance that the issuer defaults and stops making interest payments.
Bond mutual funds diversify by buying bonds from hundreds of different issuers, which can help reduce this risk, but there’s still a good chance that some of the bonds in the fund’s portfolio will go into default, which can drag down the fund’s performance.
5. International
Foreign governments and companies need to borrow money just like American companies and governments. There’s nothing stopping Americans from investing in foreign bonds, so there are some mutual funds that focus on buying international bonds.
Each country and company has a credit rating that impacts the interest rate it has to pay. Many stable governments are seen as highly safe, much like the United States, but smaller or less economically developed nations sometimes have lower credit ratings, leading them to pay higher interest rates.
Another factor to keep in mind with international bonds is the currency they’re denominated in.
With American bonds, you buy the bond in dollars and get interest payments in dollars. If you buy a British bond, you might have to convert your dollars to pounds to buy the bond and receive your interest payments in pounds. This adds some currency risk to the equation, which can make investing in international bond funds more complex.
6. Mixed
Some bond mutual funds don’t specialize in any single type of bond. Instead, they hold a variety of bonds, foreign and domestic, government and corporate. This lets the fund managers focus on buying high-quality bonds with solid yields instead of restricting themselves to a specific class of bonds.
Why Invest in Bond Mutual Funds?
There are a few reasons for investors to consider investing in bond mutual funds.
Reduce Portfolio Risk and Volatility
One advantage of investing in bonds is that they tend to be much less risky and volatile than stocks.
Investing in stocks or mutual funds that hold stocks is an effective way to grow your investment portfolio. The S&P 500, for example, has averaged returns of almost 10% per year over the past century. However, in some years, the index has moved almost 40% upward or downward.
Over the long term, it’s easier to handle the volatility of stocks, but some people don’t have long-term investing goals. For example, people in retirement are more concerned with producing income and maintaining their spending power.
Putting some of your portfolio into bonds can reduce the impact of volatile stocks on your portfolio. This can be good for more risk-averse investors or those who have shorter time horizons for their investments.
There are some mutual funds, called target-date mutual funds, that hold a mix of stocks and bonds and increase their bond holdings over time, reducing risk as the target date nears.
Income
Bonds make regular interest payments to their holders and the majority of bond funds use some of the money they receive to make payments to their investors. This makes bond mutual funds popular among investors who want to make their investment portfolio a source of passive income.
You can look at different bond mutual funds and their annual yields to get an idea of how much income they’ll provide each year. For example, if a mutual fund offers a yield of 2.5%, investors can expect to receive $250 each year for every $10,000 they invest in the fund.
Pro tip: Have you considered hiring a financial advisor but don’t want to pay the high fees? Enter Vanguard Personal Advisor Services. When you sign up you’ll work closely with an advisor to create a custom investment plan that can help you meet your financial goals. Read our Vanguard Personal Advisor Services review.
Risks of Bond Funds
Before investing in bonds or bond mutual funds, you should consider the risks of investing in bonds.
Interest Rate Risk
One of the primary risks of fixed-income investing — whether you’re investing in bonds or bond funds — is interest rate risk.
Investors can buy and sell most bonds on the open market in addition to buying newly issued bonds directly from the issuing company or government. The market value of a bond will change with market interest rates.
In general, if market rates rise, the value of existing bonds falls. Conversely, if market rates fall, the value of existing bonds rises.
To understand why this happens, consider this example. Say you purchased a BBB-rated corporate bond with an interest rate of 2% for $1,000. Since you bought the bond, market rates have increased, so now BBB-rated companies now have to pay 3% to convince investors to buy their bonds.
If someone can buy a new $1,000 bond paying 3% interest, why would they pay you the same amount for your $1,000 bond paying 2% interest? If you want to sell your bond, you’ll have to sell it at a discount because investors can get a better deal on newly issued bonds.
Of course, the opposite is true if interest rates fall. In the above example, if market rates fell to 1%, you could command a premium for your bond paying 2% because investors can’t find new bonds of the same quality that pay that much anymore.
Interest rate risk applies to bond funds just as it applies to individual bonds. As rates rise, the share price of the fund tends to fall and vice versa.
Generally, the longer the bond’s maturity, the greater the effect a change in market interest rates will have on the bond’s value. Short-term bonds have much less interest rate risk than long-term bonds. Bond funds usually list the average time to maturity of bonds in their portfolio, which can help you assess a fund’s interest rate risk.
Credit Risk
Bonds are debt securities, meaning they’re reliant on the bond issuer being able to pay its debts.
Just like people, companies and governments can go bankrupt or default on their loan payments. If this happens, the people who own those bonds won’t get the money they lent back.
Bond mutual funds hold thousands of bonds, but if one of the issuers defaults, some of the fund’s bonds become worthless, reducing the value of the investors’ shares in the fund.
Bonds issued by organizations with higher credit ratings are generally less risky than those with poor credit ratings. For example, most people would consider U.S. government bonds to have a very low credit risk. A junk bond fund would have much more credit risk.
Foreign Exchange Risk
If you’re buying shares in a bond fund that invests in foreign bonds, you should consider foreign exchange risk.
Currencies constantly fluctuate in value. Over the past five years, $1 could buy anywhere between 0.80 and 0.96 euros.
To maximize returns, investors want to buy foreign bonds when the dollar is strong and receive interest payments and return of principal when the dollar is weak.
However, it’s incredibly hard to predict how currencies’ values will change over time, so investors in foreign bonds should consider how changing currency values will affect their returns.
Some bond funds use different strategies to hedge against this risk, using tools like currency futures or buying dollar-denominated bonds from foreign entities.
Fees
Mutual funds charge fees, which they commonly express as an expense ratio.
A fund’s expense ratio is the percentage of your invested assets that you pay each year. For example, someone who invests $10,000 in a mutual fund with a 1% expense ratio will pay $100 in fees each year.
Expense ratio fees are included when calculating the fund’s share price each day, so you don’t have to worry about having cash on hand to pay the fee. The fees are taken directly out of the fund’s share price, almost imperceptibly. Still, it’s important to understand the impact fees have on your overall returns.
If you invest $10,000 in a fund that produces an annual return of 5% and has a 0.25% expense ratio, after 20 years you’ll have $25,297.68. If that same fund had an expense ratio of 0.50%, you’d finish the 20 years with $24,117.14 instead.
In this example, a difference of 0.25% in fees would cost you more than $1,000.
If you find two bond funds with similar holdings and strategies, the one with the lower fees tends to be the better choice.
Final Word
Bond mutual funds are a popular way for investors to get exposure to bonds in their portfolios. Just as there are many different types of stocks, there are many types of bonds, each with advantages and disadvantages.
If you don’t want to pick and choose bonds to invest in, bond funds offer instant diversification and professional management. If you want an even more hands-off investing experience, working with a financial advisor or robo-advisor that handles your entire portfolio may be worth considering.
There isn’t an Easy Button for doing your due diligence. It’s really a time-consuming process, and few people have any idea what to do.
Purchasing and owning real estate is always high risk — whether it’s a single family home that you’ll occupy or a 50-unit apartment building for income. You’ll hear experts say to make sure to “do your due diligence” when buying property, butwhat does that actually mean? What is due diligence?
The truth is, there isn’t an “easy button” for doing your due diligence. It’s really a time-consuming process, and few people have any idea what to do. So here is what it means and some of the steps you should consider and perform.
Do your homework
Due diligence means taking caution, performing calculations, reviewing documents, procuring insurance, walking the property, etc. — essentially doing your homework for the property BEFORE you actually make the purchase. If there are too many issues with the property — and that means too much potential risk and cost — then you can cancel your purchase agreement and look for a better property.
Here are just a few of the steps that apply to both personal residences and investment properties, although some may only apply to one.
Shop the marketplace
Make sure you know what the market has to offer. Too many people look at just a few properties, put in an offer and purchase. You should spend several months looking at properties before you buy.
Mortgage financing
Make sure the mortgage deal you get is fair and in line with competitors. Probably less than 20 percent of people get two bids for their financing, so they don’t know whether they’ve received a fair deal.
Pencil out your investment
If you’re buying an investment property, it’s vital to pencil out your deal. How do you know whether it’s a good deal if you haven’t done the math and compared it to other opportunities?
Property inspection
You probably had an inspection, but did you go to it? Did you review the inspector’s remarks on all the work that needs to be done? Then did you call a contractor or go to a home repair store to see how much it will cost to put the property in the shape you desire? Renovating properties is hugely expensive and high risk, so make sure you get estimates for the work before you decide to move forward with a purchase.
Insurance
Did you check to see whether an insurance policy can be written for the property? How much will it cost? Some areas, such as fire-prone or hurricane-prone areas, might not even be able to get a policy. And even if they do, it might be prohibitively expensive. Get some bids before you’re too far along in your purchasing process.
Homeowners association
Do you know how to review the HOA documents to avoid communities that are in disastrous shape, out of money or have significant construction issues? This is actually a pretty complicated task, but you don’t want to buy into a total mess of an HOA. If you do, you will feel some discomfort as the years go by and you have to deal with the issues and special assessments that you will be required to pay.
Title insurance & plat
Did you look at the title abstract and insurance policy? This will help you see if there are some issues that should concern you. Talk to the title insurance company agent and lawyer to help you review the documents. Also look at the plat of the property, have the easements plotted by title and walk the property for encumbrances.
Those are just a few of the many items that make up due diligence when buying real estate. Remember, you have to do these before you close escrow on the property. If you fail to do the proper tasks, problems might arise that were preventable, and might make your real estate experience less than palatable, or downright life changing! Or they might cause you to lose all the money you’ve put into the property.
Saving money is great, but it won’t make you rich.
No matter how many dollars you put into a savings account, the national average .05% interest you’d earn won’t expedite your millionaire status.
And cutting your costs can only go so far, explains Certified Financial Planner Robin Hartill (who is also an editor and financial advice columnist here at The Penny Hoarder).
It can definitely help with your short term goals, she says, but if you want to be truly richer, sometimes you need to spend money to make money. By diverting some of your cash into these assets, you’ll be on a faster path to your financial goals.
1. Spend $1 to Own a Piece of Amazon, Google or Other Companies
Investing is a smart way to make you richer. “Spending money by investing it in the stock market and earning returns can compound into even more money,” Hartill says.
While the stock market does go up and down over days, weeks and months, over time, the returns tend to rise.
If you haven’t started investing and have some money to spare, you can start small, then build your way up. In fact, you can get started with as little as $1 with an app called Stash.
We like Stash because it lets you choose from hundreds of stocks and funds to build your own investment portfolio. But it makes it simple by breaking them down into categories based on your personal goals. Want to invest conservatively right now? Totally get it! Want to dip in with moderate or aggressive risk? Do what you feel.
Plus, with Stash, you’re able to invest in fractions of shares, which means you can invest in funds you wouldn’t normally be able to afford.
It takes two minutes to sign up, and it’s totally secure. With Stash, all your investments are protected by the Securities Investor Protection Corporation (SIPC) — that’s industry talk for, “Your money’s safe.”2
Plus, when you use the link above, Stash will give you a $5 sign-up bonus once you deposit $5 into your account.*
2. Spend as Little as $16/Month to Secure Up to $1 Million in Life Insurance For Your Family
This is one of those occasions when spending a little bit of money each month can pay off later.
Have you thought about how your family would manage without your income after you’re gone? How they’d pay the bills? Send the kids through school? Now’s a good time to start planning for the future by looking into a term life insurance policy.
You’re probably thinking: I don’t have the time or money for that. But your application can take minutes — and you could leave your family up to $1 million with a company called Bestow.
Rates start at just $16 a month. The peace of mind knowing your family is taken care of is priceless.
If you’re under the age of 54 and want to get a fast life insurance quote without a medical exam or even getting up from the couch, get a free quote from Bestow.
3. Invest in Your 401(k) — But Use This Company’s Money, Instead
Setting aside money from your paycheck to put into your 401(k) is literally one of the smartest things you can do for your future. And if your employer matches each contribution, that could mean hundreds of thousands of extra dollars in your account when you retire. It’s free money!
But if you can’t take advantage of this employer benefit because you need all of your paycheck every month, a company called Lendtable will give you the cash.
We know it sounds too good to be true. But if your employer has a 401(k) match program, this is money they already have earmarked for you. By using Lendtable, you’ll be able to unlock that free cash.
Let’s say you make $50k a year and your employer matches your 401(k) contribution up to 4%. If you put $0 in your retirement account this year, you get $0 from your boss. If Lendtable lends you the 4% of your salary your employer is willing to match, you get $2,000 from your boss, minus Lendtable’s fee. (This comes from the extra money you’ve earned, so there’s no sacrifice on your part.)
It takes three minutes to answer a few questions about your eligibility and sign up for an account.
Once you’ve gotten your full match amount from your employer, LendTable will take the money they lent you back, plus a small share of your profit. If there’s a penalty from your retirement account provider for taking money out, Lendtable will cover that, too.
The risk for you is basically nonexistent, so not taking advantage of your employer match with Lendtable’s offer would make Future Millionaire You bow your head in shame. Get started here.
4. Pay Off Your Credit Card Debt Faster — But Cheaper
To stay out of debt, you need to spend less than you earn, but if you’re already battling credit card balances, Hartill says a debt-consolidation loan can help you shed that debt faster.
You might be wondering how it makes sense to get a loan when you already have out-of-control credit card balances. The answer lies in lower interest rates — way lower than the 36% some credit cards charge — and a website called AmOne wants to help.
If you owe your credit card companies $50,000 or less, AmOne will match you with a low-interest loan you can use to pay off every single one of your balances.
The benefit? You’ll be left with one bill to pay each month. And because personal loans have lower interest rates (AmOne rates start at 3.49% APR), you’ll get out of debt that much faster. Plus: No credit card payment this month.
AmOne won’t make you stand in line or call your bank, either. And if you’re worried you won’t qualify, it’s free to check online. It takes just two minutes, and it could help you pay off your debt years faster.
Kari Faber is a staff writer at The Penny Hoarder.
1Not all stocks pay out dividends, and there is no guarantee that dividends will be paid each year.
2To note, SIPC coverage does not insure against the potential loss of market value.
For Securities priced over $1,000, purchase of fractional shares starts at $0.05.
*Offer is subject to Promotion Terms and Conditions. To be eligible to participate in this Promotion and receive the bonus, you must successfully open an individual brokerage account in good standing, link a funding account to your Invest account AND deposit $5.00 into your Invest account.
The Penny Hoarder is a Paid Affiliate/partner of Stash.
Investment advisory services offered by Stash Investments LLC, an SEC registered investment adviser. This material has been distributed for informational and educational purposes only, and is not intended as investment, legal, accounting, or tax advice. Investing involves risk.
