Note: We’re not encouraging people to go out and sign up for credit cards, especially if you have debt or plan to carry a balance on a card. (The interest you pay will wipe out any rewards benefits.) But if you can control your spending and pay your bill on time and in full every month, Holly’s money hack may work for you. Also keep in mind that your credit score takes a hit each time you open a card, and whatever balance you have on your credit card as of the statement closing date will be reported to the credit bureaus. If you pay the balance in full before the statement closing date, your balance will be reported as $0.
Almost two years ago, we began our journey out of debt. Like the average American family, we had car loans, student loans, and consumer debt. At one point, we were making minimum payments on several credit cards and a loan I took out to buy a Kirby vacuum. I’m serious.
However, getting pregnant with our second child made us realize that we needed to get our finances together quickly. Once we committed to new financial goals, we cut out nearly everything from our life that was “enjoyable.” We said goodbye to cable TV and dinners at restaurants. We quit shopping for fun and only went to the store to get groceries and absolute necessities. Our new budget was cut down to the bare bones…so much so that I hesitated to buy almost anything.
As the months flew by, we began making huge strides against the debt that we had burdened ourselves with. Once we became debt-free, we realized that we had become addicted to our new, frugal lifestyle. Having no consumer debt had freed up a lot of cash to save and invest, and we quickly got serious about building wealth. However, having a strict budget made it difficult to do anything spontaneous like see a movie or have a date night. I began to look for a way to supplement our income with some “fun money” without ruining our short- and long-term goals. It was around that time that I got my first credit card sign-up bonus offer in the mail.
Enter credit card rewards
I couldn’t believe my eyes when I read a direct mailer from a major issuer promoting their new credit card. “Spend $500 in 3 months and earn a $100 statement credit.” Could it really be that easy? Why would they give away $100 in free money? As I read through the disclosures carefully, I determined that there was no “catch.” Truthfully, the issuer was offering a $100 bonus just to get new customers to try their card. As long as I paid off the card in full and accrued no interest, this $100 would truly be free money. Since our grocery spending approaches $500 on a normal month, I knew that we could reach the spending requirement easily and I decided to give it a try. Within the first month, we put our regularly planned spending on the card. The bonus points, equal to a $100 statement credit, were quickly credited to my account. I was hooked.
Soon after that, my husband applied for the same card and earned the $100 bonus just for doing our regular shopping. We then moved on to new cards in order to earn a new sign-up bonus. Another card from that issuer, which had better perks, required that we spend $3,000 in three months in order to earn a $400 statement credit. Since we had some upcoming expenses that could be put on credit, we each signed up. We put two family vacations and our regular monthly spending for groceries and gas on each card and easily earned $800 in statement credits. Since we were going to spend the money anyway, these bonuses were truly “free.” We used the $1,000 that we had earned up to this point on some fun activities with our children. I was also able to surprise my husband with last-minute tickets to see his favorite musical, “Les Miserables,” and a new grill for Father’s Day.
Is this wrong?
Obviously there are some people who would say that we are gaming the system. Their argument may be that the credit card bonuses are meant to secure long-term customers, not to provide some extra cash to take my family to Applebee’s. Some may feel that we are just using the banks for our own gain.
I don’t see it that way at all. Actually, to a certain extent, some of their strategies have worked. For instance, I plan on keeping the perkier card because it has no foreign transaction fees. I have also found that this particular card comes with great customer service. Calling the 1-800 number on the card quickly connects me with a real, live person at any hour of the day or night. I would have never tried the card if not for the sign-up bonus. So, in that respect, I feel that the issuer did earn a long-term customer.
I also definitely do not feel bad that I never pay interest. For every person like me who pays their balance in full every month, there are far too many people making the minimum payment. Additionally, banks earn money from retailers just because they choose to take credit cards as payment. Simply put, when I spend $100 at the grocery store, they have to pay the credit card company a certain percentage of my order.
Moving forward
In the past two months, we have moved our spending from those cards to another issuer’s premium card. Their new offer of “Spend $2,000 in 3 months and earn $250 in gift cards” was just too good to pass up…especially with Christmas just around the corner. Since we will put our gas, groceries, and our entire Christmas shopping budget on the card, we will easily reach the spending requirement and, thus, reap the rewards.
Chasing reward deals certainly isn’t for everyone. However, it has definitely made a difference in our bottom line. It has provided us with some extra money that doesn’t have to be accounted for. I can spend our rewards on gifts or something fun and not feel like I have sacrificed what is important to us. And now that we are completely out of consumer debt, I am actually finding that using credit cards helps us stay on budget. Both of the issuers have websites that make it quick and easy to track what I have spent and where.
Is this strategy right for you?
Before entertaining any credit card sign-up bonuses, I would ask myself a few questions. Are you in debt? If you are in credit card debt, then it is a bad idea to pursue credit card rewards. In fact, you might consider cutting up your cards or putting them somewhere not easily accessible. Work on getting out of debt and staying out of debt instead.
Do you have trouble tracking your spending? If so, then pursuing rewards offers may not be for you. While I tend to use one card at a time, some people try to juggle multiple offers at once and end up getting confused. If you are worried about losing track of your spending, then please skip using credit cards altogether.
Are you worried about your credit score? Remember that applying for new credit too frequently can reduce your score and make it harder for you to get the best rate for a loan. Please take into consideration how applying for credit will affect your credit score and do what is in your best interest.
Do you try to earn credit card rewards? If so, what is your favorite credit card rewards program?
The Consumer Financial Protection Bureau (CFPB) has ordered installment lender OneMain Financial to pay $20 million in redress and penalties for failing to refund interest charged to 25,000 customers who cancelled purchases within a purported “full refund period,” and for deceiving borrowers about needing to purchase add-on products to receive a loan. OneMain will pay $10 million in refunds to consumers it harmed, and an additional $10 million penalty to the CFPB’s victims relief fund.
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“OneMain pressured its employees to load up its loans with extra charges through false promises of easy cancellation with full refunds,” said CFPB Director Rohit Chopra. “We are ordering OneMain to refund borrowers it cheated and to clean up its business practices.”
OneMain is a nonbank personal loan installment lender headquartered in Evansville, Indiana and is a subsidiary of OneMain Holdings, Inc. (NYSE:OMF). OneMain is one of the largest non-depository personal installment lenders in the United States. It has a nationwide network with more than 1,400 branches across 44 states. The company offers loans and makes extra profits by upselling borrowers with products such as roadside assistance, unemployment coverage, and identity theft coverage.
OneMain expected its employees to upsell borrowers on every loan. Employees were incentivized to push more products, and company training materials directed them to upsell them even when consumers had already declined the products on previous loans. Salespeople were evaluated on the basis of their sales rate and could even be fired if they did not upsell enough.
The CFPB found that OneMain:
Tricked borrowers into signing up for optional products: OneMain customers were led to believe that they could not receive a loan without signing up for an add-on product. Some employees added the products to paperwork without verbally informing the consumer that the products were included or optional, a practice referred to internally as “pre-packing.” If the consumer identified the products and asked for their removal, employees were expected to make it seem difficult to remove the products. In other cases, employees obscured written disclosures from consumers’ view, or verbally contradicted them.
Kept $10 million in interest charges despite its “full-refund” policy: OneMain told borrowers they would receive a “full refund” on add-on purchases if they cancelled within a certain period (generally 30 days). However, OneMain unfairly failed to refund interest charges for about 25,000 borrowers who signed up for add-ons such as roadside assistance benefits, identity theft protection, or entertainment discounts. Because of how OneMain precomputed interest on some loans, customers had already been charged significant amounts of interest that the company did not refund. Over the past four years, OneMain kept approximately $10 million in interest charges attributable to add-ons cancelled within its purported “full refund period.”
Under the Consumer Financial Protection Act (CFPA), the CFPB has the authority to take enforcement action against institutions violating consumer financial laws. The CFPB found that OneMain’s practices violated the CFPA’s prohibition on unfair practices by charging and then failing to refund the full premium or fee and interest that accrued on add-on products consumers did not agree to purchase. OneMain also charged and failed to refund interest that accrued on add-on product fees during an advertised full refund period. Finally, the CFPB found OneMain was illegally interfering with consumers’ ability to understand that certain products were optional, and that OneMain charged non-refundable interest during the purported full-refund period.
The order requires OneMain to:
Adjust cancellation policies: The order requires OneMain to stop its unlawful activities, adjust its policies to make cancellation of add-on products easier, double the period in which a consumer can cancel an unused add-on product without cost from 30 to 60 days, and include interest in refunds after add-on product cancellations at any time.
Provide redress to consumers: The order requires OneMain to pay $10 million in refunds to consumers for improper charges.
Pay $10 million in penalties: OneMain is required to pay a $10 million penalty to the CFPB, which will be deposited into the CFPB’s victims relief fund.
Read today’s order.
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
Bank of America Premium Rewards card is offering a signup bonus of 60,000 points (worth $600 cash) after you spend $4,000 on the new card.
Card Details
Annual fee of $95 (not waived first year)
This card may not be available to you if you currently have or have had the card in the preceding 24 month period.
$100 Airline Incidental Statement Credit annually for qualifying purchases such as seat upgrades, baggage fees, in-flight services and airline lounge fees. Only applies to domestic-originated flights on certain U.S. Domestic airline carriers.
$100 airport security statement credit towards TSA Pre✓ ® or Global Entry Application fee every four year
Card earns at the following rates:
2x points for every $1 spent on travel and dining purchases
1.5x points for every $1 spent on all other purchases
No foreign transaction fees
Eligible for Bank of America Preferred Rewards, meaning you can get an additional 25-75% rewards on all purchases. Makes the card earn at the following rates with top tier status:
3.5x points per $1 spent on travel & dining purchases
2.625x points per $1 spent on all other purchases
Points are worth 1¢ each and can be redeemed for cash back as a statement credit into eligible Bank of America or Merrill Lynch accounts or to purchase travel through the Bank of America travel center or to redeem gift cards
Full card review for Bank of America Premium Rewards card can be found here.
Our Verdict
Since its launch in 2017, the offer on this card has been 50,000 points with $3,000 spend. They’re now bumping it up to 60,000 points with $4,000 spend which is nice.
If you don’t have the card, this is pretty easy $600 bonus to meet. It does have the $95 annual fee, which some might be able to offset with the $100 travel incidental credit (see what counts here).
Bank of America has also increased the Elite version of this card to $750.
We’ll add this to our List of Best Current Credit Card Signup Bonuses. Check out these Things To Know About Bank of America Credit Cards before applying.
Southwest Airlines is the nation’s largest domestic carrier, but it offers a remarkably simple frequent flier program called Rapid Rewards. You simply redeem your points for about 1.4 cents each toward any unsold seat.
The Southwest Rapid Rewards Priority card offers the most perks of any of their credit cards, but that comes at a cost.
What Is the Southwest Rapid Rewards Priority Credit Card?
The Southwest Rapid Rewards Priority Credit Card is a premium travel rewards credit card offered by Chase. With its $149 annual fee, it’s the most expensive of the three Rapid Rewards consumer credit cards offered.
As a new applicant, you can earn 60,000 Rapid Rewards points and a 30% off promo code after using your card to spend $3,000 within three months of account opening. You can use this code for a round-trip ticket with multiple passengers, and it’s valid with both cash and points bookings.
You also earn 2x points on Southwest airlines purchases and from purchases from Rapid Rewards® hotel and car rental partners. The 2x points offer is also valid for local transit and commuting purchases, including rideshare providers such as Uber and Lyft. You also earn 2x points on your internet, cable, and phone bills as well as for select streaming services.
You should expect plenty of valuable benefits from a premium travel rewards card, and this card largely delivers. For example, you receive a $75 credit toward Southwest purchases each year as well as a credit toward four upgraded boardings annually. These upgraded boardings currently sell for $30 to $80 each, depending on the flight.
This card can also help you earn elite status in the Rapid Rewards program. You earn 1,500 tier qualifying points (TQPs) toward A-List status for every $10,000 you spend, and there’s no limit on the number of TQPs you can earn.
Other perks include 25% back on in-flight purchases as well as cardholder benefits like lost and delayed baggage insurance, extended warranty coverage and a purchase protection policy.
There’s a $149 annual fee for this card, but thankfully there’s no foreign transaction fee imposed on purchases processed outside the United States. You also get a 7,500-point bonus on your account anniversary instead of flowers, which is worth about $105.
What Sets the Southwest Rapid Rewards Priority Credit Card Apart?
Nearly every airline offers several credit cards, but the Southwest Rapid Rewards Priority Credit Card is different for a few reasons. Mostly, it provides you with enough perks to help you justify its considerable annual fee. These perks include:
Big sign-up bonus. Earn 60,000 bonus points and a 30% off promo code after spending just $3,000 within three months. The promo code itself is a unique offer and can be very valuable.
Lots of bonus categories. Earn 3x points on Southwest ticket purchases plus 2x from transit, commuting, and rideshare purchases and 2x from internet, cable, and phone services and select streaming purchases. You also earn 2x when you book reservations with Southwest’s hotel and rental car partners.
Credit toward Southwest tickets. You get $75 back from your Southwest purchases each year. You also get a 7,500-point bonus on your account anniversary, which is worth about $105. For many travelers, these two features can justify this card’s annual fee.
Earn credit toward A-List status. This card lets you earn 1,500 tier qualifying points (TQPs) toward A-List status for every $10,000 you spend, and there is no limit on the number of TQPs you can earn. A-List status offers you perks such as a better boarding position and free same-day confirmed flight changes.
Four upgraded boardings per year when available. This gives you a boarding position of A1-15, which normally costs $30 to $80 per flight.
Key Features of the Southwest Rapid Rewards Priority Credit Card
The Southwest Rapid Rewards Priority Credit Card is not a very complicated credit card, but it does offer a lot of features that are worth knowing about before you apply.
Sign-Up Bonus
Earn 60,000 bonus points and a promo code for 30% off after spending just $3,000 within three months. The 30% off code has the potential to offer tremendous savings to large families who use it to book a round-trip ticket.
Earning Rewards
Earn 3x points on Southwest ticket purchases plus 2x from transit, commuting, and rideshare purchases and 2x from internet, cable and phone services, and select streaming purchases. You also earn 2x when you book reservations with Southwest’s hotel and rental car partners. You earn one point per dollar spent on all other purchases.
Redeeming Rewards
Rapid Rewards points are worth about 1.4 cents each toward airfare in any of their four fare classes. There are no restrictions on the number of seats available for redeeming rewards — you can use your points for any unsold seat.
Important Fees
This card has an $149 annual fee. No doubt, this will turn off a lot of potential applicants. However, it’s important to consider it in the context of the sign-up bonus as well as the $75 annual travel credit, 7,500-point anniversary bonus, and the four upgraded boardings each year. Fortunately, there’s no foreign transaction fee.
Credit Required
This card requires good or better credit to qualify. If your FICO score is much below 700, then you’ll likely have trouble being approved.
Advantages
This card has several key advantages that help justify its pricey annual fee.
Lots of benefits. This card offers numerous benefits, such as travel fee credits, upgraded boardings, in-flight purchase discounts and an anniversary bonus. You also get several purchase protection and travel insurance policies.
Bonus points. With all the 3x and 2x bonus categories, this card makes it easy to earn a free trip.
Big sign-up bonus. You can earn a bonus worth hundreds of dollars, and the minimum spending required is lower than many competing cards. The 30% off code can also be extremely valuable.
Easy rewards program. Other airline credit cards offer miles that can be difficult and confusing to redeem for the most value. But the Southwest Rapid Rewards program still keeps it simple.
Disadvantages
Before applying for this card, you have to consider some of its drawbacks and missing perks.
Expensive annual fee. There’s no way around the fact that you must pay $149 a year to use this card, so you have to use the rewards and benefits of this card to justify it.
No promotional financing offer. If you’re looking for a credit card with a 0% APR introductory financing offer, this isn’t it.
Forget first-class. You can’t redeem your Rapid Rewards points for a first-class seat because there are only economy seats on Southwest.
No overseas awards. Like first-class, Southwest fliers will find Europe, Asia, and much of the world out of their reach. However, Southwest does fly to Hawaii, Mexico, the Caribbean and even Central America.
How the Southwest Rapid Rewards Priority Credit Card Stacks Up
One of Southwest’s closest competitors is JetBlue, and it offers the JetBlue Plus card from Barclays. The JetBlue card has a slightly better sign-up bonus and substantially more points for airline ticket purchases. However, JetBlue points are worth about 1.2 cents each, which is significantly less than Southwest points.
Southwest Rapid Rewards Priority Credit Card
JetBlue Plus Card From Barclays
Annual Fee
$149
$99
Sign-Up Bonus
Yes
Yes
Rewards Rate
Up to 3x
Up to 6x
0% Intro APR
None
None
Foreign Transaction Fee
None
None
Credit Needed
Good or better
Good or better
Final Word
Fans of Southwest Airlines know that it’s a different type of carrier than the likes of American, Delta and United.
Instead of business-class tickets to Europe, Southwest fliers prize little perks like an upgraded boarding position and easy-to-use rewards. That’s where the Southwest Rapid Rewards Priority Card delivers.
But for those who aren’t fully onboard with the way Southwest works, the $149 annual fee can be hard to swallow. It’s also not a card for those whose home airport doesn’t offer much Southwest service. And for these more casual Southwest customers, it can be worth considering the Rapid Rewards Plus and Premier cards.
But if you find yourself regularly boarding Southwest and are looking for the best card to maximize your rewards and benefits, then there’s no substitute for the Southwest Rapid Rewards Priority Credit Card.
Disclaimer: The information related to the Chase Southwest Rapid Rewards Priority Card has been collected by Money Crashers and has not been reviewed or provided by the issuer of this card.
The Verdict
Our rating
Southwest Rapid Rewards Priority Credit Card
This is Southwest’s most feature-filled credit card for consumers. It includes lot’s of opportunities to earn bonus points, and it features strong benefits. If you’re a regular Southwest flier, you need to look into this card.
Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
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Jason has been writing about personal finance, travel, and other topics on blogs across the Internet. When he is not writing, he has a career in information technology and is also a commercially rated pilot. Jason lives in Colorado with his wife and young daughter where he enjoys parenting, cycling, and other extreme sports.
Balancing your checking account may seem like a task straight out of a bygone era, akin to winding a grandfather clock or sewing buttons onto a shirt.
However, the reality is quite different. It is an essential financial task, one that could help you dodge hefty overdraft charges, detect fraud early, and provide a true understanding of your spending patterns. So, let’s demystify this often misunderstood task.
The Importance of Balancing Your Checking Account
Regularly balancing your checking account is a cornerstone of sound money management. It’s not just about avoiding those pesky overdraft fees (though that is a significant bonus), it also provides invaluable insights into your spending habits. This will enable you to track your progress towards your money goals and make adjustments as necessary.
A balanced checkbook gives you a clear view of your financial accounts, showing you what’s going in, what’s going out, and most importantly, what’s left. By keeping track of all your transactions, you’ll be able to spot if a wrong amount has been deducted or if a direct deposit hasn’t been made. This can also help you to detect fraud at the earliest opportunity, helping to safeguard your hard-earned money.
Checking Account Basics: Understanding Key Terminologies and Concepts
To successfully balance your checking account, it’s crucial to comprehend the basic components of it. By understanding these terms, you’ll be better equipped to manage and reconcile your checking account.
Debit Card: Your bank will likely issue you a debit card that allows you to access the funds in your checking account electronically. When you make a purchase with your debit card, funds are withdrawn directly from your account. It’s important to keep track of all transactions made with your debit card to ensure your records accurately reflect your spending.
Pending Transactions: These are transactions that have been made but have not yet been fully processed by your bank. They are usually deducted from your available balance but may not be reflected in your current balance until the transaction has fully cleared.
Bank Balance: This is the amount of money in your checking account at any given time. It’s important to note that your bank balance can change frequently throughout the day as deposits and withdrawals are made.
Monthly Statement: This is a summary provided by your bank of all transactions into and out of your account over a particular period, typically a month. The monthly statement includes the dates and details of your transactions, the balance at the beginning and end of the period, and any charges incurred. It’s crucial to carefully review your monthly statement each month to identify any potential errors or fraudulent activity.
Automatic Payments: These are recurring payments set up to pay bills directly from your checking account. They are convenient for paying regular bills, such as utilities or subscriptions, but can lead to overdrafts if not properly accounted for in your balance.
Overdraft Fees: If you withdraw more money than you have available in your checking account, you’ll likely be charged an overdraft fee by your bank. Regularly balancing your checkbook can help you avoid these costly fees.
The tools you need for checkbook balancing can be as simple or as complex as you’d like them to be. The traditional approach involves using a paper checkbook register, a bank statement, a pen, and a calculator. But in our digital age, we have online and mobile banking tools at our disposal, and a host of other tools to make this process much simpler.
You might choose to use Google Sheets or another spreadsheet software to create a check register. You can also use mobile banking apps that provide real-time updates on your transactions, making it much easier to keep up with your account activity.
How to Balance Your Checking Account
So, how do you actually balance a checkbook? Here’s a step-by-step guide, using the traditional checkbook register method.
Step 1: Gathering Information
Start by gathering all your receipts, ATM slips, deposit slips, and bank statements. If you have access to online banking, make sure to check your account for any recent transactions that haven’t yet made it onto your paper statement.
Step 2: Recording Transactions
Write down every transaction in your checkbook register. This should include deposits, checks, debit card purchases, ATM withdrawals, bank fees, and any other financial transactions. Doing this ensures your records match your bank’s records, making it easier to detect any errors or discrepancies.
Step 3: Reconciling Your Check Register With Your Bank Statement
Review your bank statement for any additional charges or deposits that you might have missed. Make sure to update your check register with these transactions. Then, add up all the deposits, and subtract all the payments and withdrawals to calculate your checking account balance.
Step 4: Calculating Your Balance
The balance in your checkbook should match the current balance in your bank account. If they do not, you will need to check your calculations and go through each entry to identify any potential errors or discrepancies. This step helps you ensure the available balance matches your own records.
Step 5: Addressing Any Discrepancies
If the balances do not match, start by checking for common errors, such as transposing numbers or forgetting to record transactions. Check your receipts and the online banking portal to ensure you haven’t missed any transactions. If you find any transactions posted to your account that you did not authorize, contact your bank immediately.
Regular Maintenance and Good Habits
Balancing your checkbook is not a one-time activity. It’s a habit that needs to be developed and maintained. Aim to do this at least once a month when your bank statement arrives. For those who frequently use their debit cards, write checks, or have a lot of automated payments, weekly check-ins might be beneficial to ensure all transactions are recorded correctly.
Maintaining a balanced checkbook may also prevent you from spending more than what’s available, thereby avoiding overdraft charges. It also helps in tracking your spending habits and understanding your spending patterns, which can be instrumental in managing financial matters.
The Role of Technology in Balancing Your Checking Account
In our digital age, technology plays a significant role in simplifying the process of balancing checking accounts. Online and mobile banking apps provide a real-time view of your account, enabling you to check your current balance, deposit checks, and monitor transactions from anywhere, at any time. This gives you the flexibility to manage your financial tasks on the go, reducing the time and effort required for this task.
On the other hand, it’s crucial to understand that while these apps are incredibly handy, they should not replace the practice of keeping your own records. The balance shown on these apps might not reflect pending transactions or paper checks that haven’t cleared yet.
Conclusion
Balancing your checking account is an essential component of sound financial management. It’s not just about avoiding fees and detecting potential fraud. It’s about taking control of your money and understanding how you’re using it. With the right tools and a bit of discipline, you can make this task part of your regular financial routine.
Frequently Asked Questions
How often should I balance my checkbook?
It’s generally recommended to balance your checkbook once a month. However, if you frequently use your debit card or have numerous automatic payments, you might want to consider balancing your account on a weekly basis. Regularly keeping track of your financial transactions will help you avoid errors and keep a close eye on your spending habits.
Is it safe to balance my checkbook online?
Online and mobile banking apps are generally safe to use. Most banks provide strong encryption and security measures to protect your data. However, always ensure you’re using a secure network when accessing your bank account online and update your apps regularly to get the latest security features.
What should I do if I find a fraudulent transaction in my account?
If you notice a transaction that you did not authorize, you should report it to your bank immediately. Most banks have policies in place to protect customers from fraud, and you may not be responsible for any fraudulent charges if they’re reported in a timely manner.
What’s the difference between my current balance and my available balance?
Your current balance is the total amount in your account at the start of the business day. This includes all transactions, like deposits and withdrawals, that have been posted to your account. On the other hand, your available balance is your current balance minus any holds (like pending transactions).
How can I avoid overdraft fees?
One way to avoid overdraft fees is by keeping an accurate record of all your transactions. By knowing exactly how much money is in your account at all times, you can avoid spending more than what’s available. Some banks also offer overdraft protection services that link your checking account to a savings account or credit card to cover any overdrafts.
How can balancing my checkbook help with my budget?
Balancing your checkbook gives you a clear understanding of how much money is coming in and going out of your account. This can help you identify spending patterns, prioritize your spending, and set realistic budgets.
I rarely write checks. Do I still need to balance my checkbook?
Yes, even if you don’t write checks, balancing your checkbook is still essential. Any type of transaction, be it debit card transactions, automatic payments, or ATM withdrawals, can cause discrepancies in your account balance. By balancing your checkbook, you can ensure that your account has the correct balance and catch any errors or fraudulent transactions.
I’ve made a mistake and my account is overdrawn. What should I do?
If you realize that you’ve made a mistake and your account is overdrawn, it’s important to address it as quickly as possible. Deposit money into your account to cover the overdraft and any associated fees. Then, review your recent transactions to understand what led to the overdraft and how you can avoid it in the future.
Long, long ago, in a mystical forest with good Wi-Fi, Goldilocks opened an investing account with $3,000 to invest.
At first, she considered pouring more money into her retirement accounts (which only holds mutual fund investments). But her Roth IRA was already maxed out for the year. Moreover, she knew that she would need this money sooner than age 65.
“Too cold!” she said.
Next, she considered investing in individual stocks. But even though she’d done her due diligence, she knew that investing in individual securities can be very risky. She didn’t need to become a millionaire overnight – she just wanted to make enough money to buy a cottage in a few years.
“Too hot!” she said.
Finally, she began browsing ETFs. ETFs are generally more stable, diverse, and safe investments than individual stocks, but they’re also more accessible than your retirement account.
“Juuuuust right!” she said aloud.
10 years later, Goldilocks’ investment had paid off – thanks to a steady 10% APY, her $3,000 investment had become nearly $8,000, so she was finally able to pay restitution and legal fees to the family of bears down the way.
Thanks to inherent diversity and steady returns, ETFs are a great place to stash a few grand to help you save for a big expense years or decades down the line.
What’s Ahead:
Large-cap stock ETFs
Large-cap ETFs typically bundle together blue-chip stocks or even an entire index, providing steady, sizeable returns. Warren Buffet once famously said:
“I just think that the best thing to do is buy 90% in S&P 500 index fund.”
So I’ve included two such options on the list.
You’ll also see a lot of Vanguard funds on this list because, well, they’re just awesome all the way around. Vanguard funds are extremely popular among investors because they combine industry-leading returns with incredibly low expense ratios.
ETF
Symbol
Fund info
Expense ratio
Schwab US Large-Cap Growth ETF™
SCHG
The fund’s goal is to track as closely as possible, before fees and expenses, the total return of the Dow Jones U.S. Large-Cap Growth Total Stock Market Index.
0.04%
SPDR S&P 500 ETF
SPY
The SPDR® S&P 500® ETF Trust seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the S&P 500® Index (the “Index”).
0.0945%
Vanguard S&P 500 ETF
VOO
The Vanguard S&P 500 ETF invests in stocks in the S&P 500 Index, representing 500 of the largest U.S. companies.
0.03%
Vanguard Russell 1000 Growth ETF
VONG
The investment seeks to track the performance of the Russell 1000® Growth Index. The index is designed to measure the performance of large-capitalization growth stocks in the United States.
0.08%
Mid-cap stock ETFs
Goldilocks’ choice – mid-cap ETFs – bundle together companies that have an exciting growth curve before them, but are established enough not to fold overnight.
If you can tolerate a little more risk in exchange for higher potential returns than an index fund, consider these top picks:
ETF
Symbol
Fund info
Expense ratio
Vanguard Mid-Cap Growth ETF
VOT
VOT seeks to track the performance of the CRSP US Mid Cap Growth Index, which measures the investment return of mid-capitalization growth stocks.
0.07%
iShares Core S&P Mid-Cap ETF
IJF
IJF seeks to track the investment results of an index composed of mid-capitalization U.S. equities.
0.05%
Vanguard Mid-Cap ETF
VO
VO seeks to track the performance of the CRSP US Mid Cap Index, which measures the investment return of mid-capitalization stocks.
0.04%
Schwab U.S. Mid-Cap ETF
SCHM
SCHM’s goal is to track as closely as possible, before fees and expenses, the total return of the Dow Jones U.S. Mid-Cap Total Stock Market Index.
0.04%
Small-cap stock ETFs
If you’ve looked at your asset portfolio recently and thought “hmm… needs a little more spice,” then a small-cap ETF might add just the right amount of kick.
These ETFs track small companies with big potential, so they present higher risk but higher potential reward than large- or mid-cap ETFs.
ETF
Symbol
Fund info
Expense ratio
Vanguard S&P Small-Cap 600 Growth ETF
VIOG
VIOG employs an indexing investment approach designed to track the performance of the S&P SmallCap 600® Growth Index, which represents the growth companies, as determined by the index sponsor, of the S&P SmallCap 600 Index.
0.15%
Vanguard Small-Cap ETF
VB
VB seeks to track the performance of the CRSP US Small Cap Index, which measures the investment return of small-capitalization stocks.
0.05%
iShares Core S&P Small-Cap ETF
IJR
IJR seeks to track the investment results of an index composed of small-capitalization U.S. equities.
0.06%
Schwab U.S. Small-Cap ETF
SCHA
SCHA’s goal is to track as closely as possible, before fees and expenses, the total return of the Dow Jones U.S. Small-Cap Total Stock Market Index.
0.04%
International stock ETFs
ETF
Symbol
Fund info
Expense ratio
Vanguard Emerging Markets ETF
VWO
VWO invests in stocks of companies located in emerging markets around the world, such as China, Brazil, Taiwan, and South Africa.
0.10%
Vanguard Total International Stock ETF
VXUS
VXUS seeks to track the performance of the FTSE Global All Cap ex US Index, which measures the investment return of stocks issued by companies located outside the United States.
0.08%
SPDR® MSCI EAFE Fossil Fuel Free ETF
EFAX
EFAX seeks to offer climate-conscious investors exposure to international equities while limiting exposure to companies owning fossil fuel reserves.
0.20%
Vanguard FTSE Developed Markets ETF
VEA
VEA provides a convenient way to match the performance of a diversified group of stocks of large-, mid-, and small-cap companies located in Canada and the major markets of Europe and the Pacific region.
0.05%
Fixed income ETFs
ETF
Symbol
Fund info
Expense ratio
iShares Core U.S. Aggregate Bond ETF
AGG
AGG seeks to track the investment results of an index composed of the total U.S. investment-grade bond market.
0.05%
Vanguard Total Bond Market ETF
BND
BND’s investment objective is to seek to track the performance of a broad, market-weighted bond index.
0.035%
Vanguard Intermediate-Term Corporate Bond ETF
VCIT
VCIT seeks to provide a moderate and sustainable level of current income by investing primarily in high-quality (investment-grade) corporate bonds.
0.05%
Schwab 1-5 Year Corporate Bond ETF
SCHJ
SCHJ’s goal is to track as closely as possible, before fees and expenses, the total return of an index that measures the performance of the short-term U.S. corporate bond market.
0.05%
What does large-cap, mid-cap, etc. mean?
To start, “cap” refers to market capitalization, or the total value of a company’s shares on the market. For example, if a company has 1 million shares on the market valued at $10 a pop, their market cap would be $10 million.
Large-cap ETFs are comprised of companies each with a market cap of $10 billion or higher. The Vanguard Mega Cap ETF (MGC), for example, contains around 250 of the biggest companies in the USA, from Amazon to Apple. Since they’re often full of blue-chip stocks that provide slow-but-steady returns, large-cap ETFs are considered a safe, long-term investment.
Mid-cap ETFsare comprised of companies each with a market cap in the $2 to $10 billion range. All ETFs are designed to succeed and make money, so mid-cap ETFs are filled with midsized companies that are in the middle of their “growth curve,” so to speak – they’re high-performing, high-potential companies that may become the next blue-chip, so mid-cap ETFs balance risk and reward.
Small-cap ETFsare comprised of companies each with a market cap of “just” $300 million to $2 billion. Fund managers who design small-cap ETFs cast a wide net, aiming to scoop up “the next big thing.” As a result, these ETFs have higher growth potential than most ETFs, but also steeper downside if the smaller companies within end up folding.
International ETFsare, as the name so subtly hints, full of non-U.S. stocks and securities. There are country-specific ETFs, foreign industry ETFs (think non-U.S. automotive stocks), and even ETFs representing emerging markets like sub-Saharan Africa and Brazil.
Fixed income ETFs, aka bond ETFs, give you access to diverse bond investments. For the uninitiated, bonds are like loans you make to companies or governments that they pay back with interest. You can read more about bonds here, but the bottom line is this: fixed-income ETFs provide steady income in the form of dividends, so they’re a good choice if you want a safe investment that gives you a paycheck!
Read more:How To Invest In ETFs
Which type of ETF is right for you?
Well, it depends on both your goals and your risk tolerance.
If you can tolerate some risk in your portfolio, and want your ETF investment to pay off sooner than later (within five years), you may want to consider small-cap and mid-cap ETFs. They’re riskier, but have higher upside potential.
If you’re looking for a safer investment that will multiply your money over a longer horizon (5+ years), a large-cap ETF is probably a fit.
If you’d like your ETF investment to provide a trickle of cashback each month, fixed income ETFs are probably your best bet.
And finally, if you don’t mind doing a little research or believe strongly in the economic performance of a foreign market, you’ll be a fan of international ETFs.
Read more: How To Determine Your Investing Risk Tolerance
About our criteria
With hundreds of commission-free ETFs available, how did these become the winners?
To make this list, ETFs had to impress in all of the following categories:
Earnings potential.Naturally, the first thing looked at was the ETF’s performance over the past five years. A good sign of a healthy ETF is how quickly it bounced back in Q3 2020 after the market panic surrounding the COVID-19 pandemic. Springboarding back and surpassing Q1 levels are a sign of investor confidence, and helped solidify the ETF’s place on this list.
Expense ratio.Next, I looked at the ETF’s expense ratio. Your expense ratio is the percentage of your investment you pay to the fund manager for having shares of the ETF. Although measured in fractions of a percent, expense ratios make a difference – 0.80% of $10,000 is $80 and 0.04% is just $4, so ETFs with an expense ratio below 0.20% were favored.
Fund reputation. You’ll see a lot of repeated names on this list because funds like Schwab, BlackRock (iShares), and especially Vanguard have a proven track record of building well-crafted, reliable ETFs with low expense ratios. Fund reputation matters in the long run because big funds attract big money, which helps to generate higher returns for you!
Solid fundamentals.ETFs aren’t just random grab bags of stock and securities – each one is a carefully curated list, with selection criteria driven by both AI and human logic. There are some wacky and unique ETFs out there – such as Millennial ETFs and Space ETFs – and I’ll cover more of them in an upcoming piece. But this list isn’t for the experimental, exciting stuff – it’s for safe, dare I say boring, places to stash and multiply your savings.
Conscious investing.Finally, this was more of a small thing in the back of my mind, but I wanted each ETF on this list to score average or above average for “conscious capitalism.” No fossil fuels, no sin stocks (learn more about sin stocks here) – and not just because it’s not the way of the future, but because investments in conscious capitalism generally outperform “sinful” investments in the long term.
Commission-free ETFs solve a big problem for young investors
Commission-free ETFs aren’t just great because they’re cheap – they actually solve a pretty serious problem plaguing young ETF investors.
You see, ETFs have heftier commissions and trade fees than stocks because ETFs can be resource-intensive to create. Let’s say you’re a fund manager and you have an idea for an ETF. The process to get your ETF approved by the SEC isn’t unlike getting your new drug approved by the FDA; you have to research a ton, understand the risks, and propose your ETF to the government.
Once your ETF is approved and available, you probably want some additional compensation for your work beyond just capital gains from your ETF.
You don’t want to charge a high percentage trade fee, because big-ticket investors will be turned off. So, instead, you charge a $10 to $20 fee per trade of your ETF.
Big-ticket investors who drop $50,000 on a trade couldn’t care less about a $20 fee, since that represents just 0.04% of their investment. But if you’re a young investor, investing maybe $50 to $100 out of each monthly paycheck, a $20 per-trade fee is way too high – basically pricing us out of ETF investing. 🙁
Thankfully, many brokerages have realized that their per-trade fees are too high for young investors and have eliminated commissions on trades of certain ETFs. At first, funds like Vanguard and Fidelity only let you trade commission-free on their own platforms, but now, they’ve expanded their commission-free goodness to wide platforms like J. P. Morgan Self-Directed Investing.
And it’s not just the junk ETFs that get traded commission-free – in fact, it’s often quite the opposite. Firms like Vanguard and Fidelity will let you trade their most successful ETFs for free – presumably because they don’t really need the commission.
Disclosure – INVESTMENT AND INSURANCE PRODUCTS ARE: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
Summary
If you’re looking for an investment vehicle falling somewhere between your boring retirement account and your exciting individual stock purchases, ETFs are an excellent choice. And now that the big funds are waiving commissions on their top-performing ETFs, there’s never been a better time to dive into the world of ETFs and inject some low- to mid-risk into your portfolio.
ETFs are also an excellent investment if you’re looking to multiply your money and cash out within 2 to 10 years. You can even leave your ETF investment until retirement, if you want, so it has plenty of time to multiply under compound interest.
Not all ETFs are made the same, however – and the SEC has approved some stinkers over the years, for sure. These ETFs, on the other hand, are universally considered top-ranked and well-supported within the investor community – and are a superb place to start.
Renting an apartment is an exciting but crucial decision, as it often becomes your home for a significant period. To ensure you make an informed choice and avoid potential surprises, it’s essential to get the info beforehand, whether you need to know more about lease terms, amenities, responsibilities and more. We’ve gathered the top questions to ask when renting an apartment, empowering you to make a confident and well-informed decision for your future living space.
19 questions to ask when renting an apartment
Whether it’s top-of-mind questions or typically forgotten-about details, this list ensures you have your bases covered to learn about the living experience curated by an apartment.
1. What is the monthly rent?
This is arguably the most important question to ask when you’re renting an apartment so you’re aware of how much you’ll be expected to pay monthly for rent. Before you go into any apartment tour or even before you begin your apartment search, it’s a good idea to calculate how much rent you can afford. That way you can determine if the apartment you’re touring is within your budget.
2. Are utilities included in the rent? If not, what utilities am I responsible for and how much do they typically cost?
Standard utilities may include electricity, gas, water, sewage, garbage and internet/cable. The cost of utilities can vary based on factors such as apartment size, location and local rates. Knowing if utilities are included in the rent helps you accurately budget your monthly expenses. If utilities are not included, you need to account for those additional costs and accounts you’ll need to set up.
3. How long is the lease term and what are the penalties for breaking the lease?
Understanding the lease term length allows you to plan your living situation accordingly. You may have specific needs or future plans that require a shorter or longer lease term. It helps you determine if the apartment is suitable for your intended duration of stay. In the same vein, asking about the penalties for breaking the lease helps you understand the flexibility you may have in case of a situation where you need to relocate or move out.
4. Are there any additional fees or deposits required, such as a security deposit or application fee?
Most of the time, you can expect a security deposit and an application fee at the beginning of your apartment renting journey. The application fee, while it isn’t refundable, covers the cost of running the renter’s background checks and processing the application.
The purpose of a security deposit is to provide the landlord with financial protection in case the renter causes any damage to the apartment or fails to fulfill certain obligations outlined in the lease agreement.
5. Is renters insurance required?
Renters insurance isn’t always required. Some landlords or property management companies may require tenants to have renters insurance as a condition of the lease. They will include this requirement in the lease agreement and explicitly state the purpose of this coverage is for the renter’s personal belongings and liability. Sometimes renters can even purchase this insurance through a provider recommended by the apartment, making this process easy.
6. What is your subletting policy?
Subletting is a great option for renters if they are ever in need of their lease being covered. By asking about the subletting policy during a tour, you are aware of the potential to have this option in case your future plans change.
7. What should I know about parking? How many guest spots can I expect to get?
When touring an apartment, asking about parking is important because it directly affects your convenience. Parking is sometimes included in rent but there are also cases where there’s an additional fee you pay for parking. If you live in a city where parking is a little less accessible, you may have to pay for a parking garage pass.
Asking about guest parking helps you understand the availability and convenience of parking for your visitors. It is especially important to ask these questions when renting an apartment if you frequently have guests or expect to entertain visitors. This will typically either be a guest parking pass or designated guest spots/ guest floors in the parking garage.
8. Are pets allowed, and if so, do you have any weight limits or breed limits that I should know about?
Most apartments are furry-friend-friendly. You’ll most likely run into an additional pet fee you’ll pay monthly on top of your rent and monthly utilities. In conjunction with this question, asking about breed and weight limitations is equally as important. Apartment complexes often have specific policies regarding pets to ensure the well-being of both the animals and the other residents.
9. Is the apartment furnished or unfurnished?
If you’re someone who prefers convenience and doesn’t want the hassle of buying or moving furniture, a furnished apartment might be a better fit than a standard, non-furnished apartment. Knowing whether the apartment comes with furniture helps you estimate your expenses and plan your budget accordingly, or determine if the furniture is an expense you want to take on.
10. What appliances are included in the apartment?
It’s good to know what appliances are in the apartment and what appliances you’ll need to purchase depending on your individual needs. Some apartments will lack in-apartment appliances but have communal kitchen and laundry appliances that you’ll share with the rest of the building residents.
11. Is there a maintenance staff available for repairs and how quickly are maintenance requests typically addressed?
This question gives you an idea of how to handle any repairs or malfunctions that happen in your apartment and how long you may have to wait for repairs if something in the apartment needs reparation.
12. Is there a designated area for trash and recycling? How often is it collected?
Whether the apartment offers valet trash services, designated trash areas or coordinated trash pickups, it’s an often forgotten-about part of the renting process. Many apartments will have trash rooms, recycling collection and/or valet trash, giving residents options and designated areas to dispose of waste.
13. Are there any amenities available, such as a fitness center, pool or community room? Are there any additional fees to use these amenities?
A huge part of your apartment living experience is the amenities offered outside of your individual apartment walls. Different individuals have varying preferences and priorities when it comes to amenities, so asking about them helps you determine if the apartment meets your needs and lifestyle.
14. What is the policy on renewing the lease after the initial term?
By asking about a lease renewal, you can assess whether the apartment is suitable for your long-term needs. Most apartments will send out renewal offers months before your lease terms, giving you time to decide if renewing your lease is the best fit for your future living needs.
15. How secure is the building? Are there security measures in place?
Peace of mind is important. It’s a good idea to ask about the security measures the building and apartment staff are taking as well as apartment-friendly security measures renters can take, like installing a doorbell camera. Some apartments will even have security guards for late hours that you can contact in case of an emergency.
16. Are there any decoration restrictions like painting the walls or hanging artwork?
The goal of this question is to ensure you get your security deposit back as well as evade additional charges when moving out. Most rental agreements have specific terms and conditions regarding modifications to the property space or apartment. By knowing your restrictions, you can decorate in a damage-free way.
17. What is the policy on rent increases? How often do they occur and by how much?
Depending on the area you’re living in, rent increases can range from small to large increases. Normally, residents will see rent increases when renewal offers are given to residents. You’ll typically have a few months to decide and calculate your budget or negotiate the increase. Landlords may have different rent increase schedules, so asking before you’re contractually obligated is a safe bet.
18. What is the policy on package deliveries?
Typically, residents receive mail and smaller packages in assigned mailboxes or at their doors. More recently, apartments are starting to install package lockers where residents can register a locker for packages. Asking this question helps you know if your packages are protected or the options you have for your mail delivery.
19. Is rent payment online or in-person? Are there any late payment fees or grace periods?
Being familiar with this process helps renters know how they pay and the budget they need to personally make around payments. Grace periods and late fees can vary from one property to another, and being aware of them allows you to understand any flexibility in a worst-case scenario or money you’ll tack on if you pay late.
Asking questions and take note of the answers
By asking these questions during a tour, you can gain a clear understanding of the overall renting experience you would have living in that apartment. This knowledge will help you make an informed decision about the fit of the apartment and ensure a smoother experience during your tenancy.
There are many renting options so finding the right fit for you ensures the best living experience possible. Start your apartment-hunting journey today!
Inside: A biweekly budget is a budget that is broken into two-week periods. Learn how to create biweekly budgets and download your free template.
Many people create budgets, but only a few budget on a biweekly basis.
That is an interesting statistic because 43% of Americans are paid on a biweekly pay period (source).
So, the thought process is more people should be interested in learning knowing how to create a biweekly budget. But, in reality, most people give up on budgeting or move to a budget-by-paycheck method.
Recently, we moved over to a biweekly pay period. And thus, we quickly had to change how we focused on budgeting.
While most financial bloggers and gurus would agree, budgeting with biweekly paychecks makes the whole concept of budgeting hard.
While biweekly budgeting isn’t easy, it can be done!
This post will show you how to create an easy-to-manage and effective biweekly budget so that you can conquer your financial goals in the most efficient way possible!
We will go through the exact steps I use to create a biweekly budget to cover two weeks’ worth of expenses, get one month ahead on your bills, or adjust your planning to cover your monthly expenses.
This is a basic example, and you should use your own personal situation when developing your own budget.
Do you struggle to keep your finances on track? If so, here are some tips for creating a biweekly budget.
What is a biweekly budget?
A biweekly budget is a budget that takes into account a person collecting a paycheck every 14 days. This type of budget is beneficial for those who are paid on a biweekly schedule, as it allows them to plan their spending more effectively.
However, many people find it difficult when bills are due on a monthly basis.
Difference between biweekly and semi-monthly paychecks
When receiving paychecks twice a month happens with two types of pay schedules either biweekly or twice-per-month. The difference between these two schedules is the number of checks per year.
Those who are paid biweekly receive 26 checks per year, while those who are paid twice-per-month receive 24 checks per year.
Making a budget on a biweekly income can be difficult because the total number of checks received in a year varies depending on the pay schedule you have.
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How does a biweekly budget work?
A biweekly budget divides your budget into two parts, one for each paycheck that is received. This can be helpful for those who want to better track their spending or for those who want to save money.
It can be helpful to think of your biweekly budget as two separate budgets – one for bills and one for everything else.
When you create a biweekly budget, you are essentially creating two budgets over the span of ten months. Then, in the other two months, you will receive three paychecks; thus, need to create three budgets.
Since many monthly expenses remain the same when switching from a month budget to a biweekly budget, knowing which expenses should be increased or decreased beforehand can make the process smoother.
Additionally, it is helpful to know how much money you will need for each check. That way, you won’t have to worry about bouncing checks or accidentally overdrawing your account.
How to create a biweekly budget
Creating a biweekly budget is a great way to start getting your finances in order. You can either create your own template or use one of the many templates that are available online for free.
One popular template is ours!
Money Bliss Biweekly Budget Template (see below to get your copy). This template is available as a free download and can be used in conjunction with our budget binder. The planner allows you to track your income and expenses, as well as financial documents such as bills and bank statements.
There are a few key things to keep in mind when creating a biweekly budget:
Adjust your budget as needed.
Be flexible when adjusting to this 2 week budget style.
Compare your regular expenses to your spending from the past month.
Now, here are the steps to creating a biweekly budget that works.
Step 1: Print out a calendar
You need to print out the dates you get paid from your employer. On the biweekly paycheck, Fridays are usually pay dates; you just need to know which Fridays!
So, print out a blank calendar. Write down when you get paid along with when your bills and expenses are due.
This will help you get an idea of where you are spending your money and where you can cut back.
Many people find it helpful to color code by category and add stickers. This will help you see your budget at a glance.
Step 2: Put in a buffer
This will help ensure that you don’t have to worry about going into debt if something unexpected comes up.
Ideally, you should try to save at least two weeks’ worth of living expenses so that you know you’ll be able to cover your costs even if something goes wrong.
For us, all of our income goes into an “income checking” account. Then, at the beginning of the month, we transfer money into our “bills checking” to cover our expenses for the month.
Then, we always have at least one month of expenses on hand – just in case.
Step 3: Organize expenses
The easiest way to do this is by category. There are a few different ways to categorize your expenses, but the most common are:
Fixed or recurring expenses: These are expenses that happen every month, like rent or utilities
Variable or occasional expenses: These are expenses that happen each month but vary in amount, like groceries or entertainment
Annual or quarterly expenses: These costs are less frequent, but take a good chunk of your budget like an annual insurance payment or kid’s sports fees
One-time only expenses: These are one-time only costs and you don’t anticipate them again.
For most people, the struggle happens when organizing expenses. The expenses you “forgot” about are what blow your budget. Honestly, these are not forgotten expenses – just something you forgot to plan for.
Step 4: Focus on Zero Based Budgeting
Additionally, it’s important to use a zero-based budgeting approach.
With this method, you start by assigning every penny of income a job, whether it be for rent, groceries, or savings. This way, you can make sure that you’re not overspending each month.
A zero-based budget is a type of budget that starts with the assumption that there is nothing in your bank account.
This includes both predictable and unpredictable costs.
In the next steps, you will lay out what paycheck will cover what bills.
For example, some costs, like your rent or mortgage payment, will likely stay the same from one biweekly period to the next. By taking into account both types of expenses, you can get a more accurate picture of how much money you will need each pay period.
Learn more about zero based budgeting.
Step 5: Write your first biweekly budget
Writing a biweekly budget is the first step to creating financial stability. It’s important that you set up a plan for each paycheck to make sure your bills get paid.
When creating your first biweekly zero-based budget, you’ll want to start by paying your immediate obligations. This includes any bills or fixed expenses like rent or car payments that are due during the first pay period. After that, focus on covering your variable expenses such as groceries, gas, or eating out.
To make sure every dollar has a job, you should consider these tips:
If you have any leftover money at the end of the month, send it to your savings or make extra debt payments.
Make sure that each category in your budget has a specific amount assigned to it.
Keep track of your spending so that you can stay on track and adjust as needed.
Paying your most important bills first is a crucial step in making sure that your finances are on track.
Step 6: Write Your second biweekly budget
The second biweekly budget is a budget that’s typically created for the 2nd paycheck of the month. This budget would cover the next two weeks and may need to cover expenses at the beginning of next month before you get paid again.
Just like creating a budget plan for the 1st paycheck, you will do the same again. Prioritize any fixed expenses first, then add in variable expenses or sinking funds to contribute to.
In order to make your budget as accurate as possible, you should account for fluctuations in your expenses. This is where the buffer comes in – you put a certain amount of money aside each month to cover any unexpected costs. Then, you can start planning for them in the upcoming months.
Once again, if you have leftover money after budgeting for the two weeks, you can either send it to your savings account or start paying down your debt. If you choose to save, make sure that the money is in a place where it will earn interest and grow over time. If you choose to pay down debt, make sure that the payments are more than the minimum amount due so that you can see results quickly.
Step 7: Start tracking
Now that you have your biweekly budget template set up, it’s time to start filling in the numbers and track your budget. This part can be a little tricky, but with a little effort, you’ll be able to save money and get ahead on your debt payments.
First, take a look at your income and expenses for the month. How does this compare to what you’ve budgeted? If you’re coming in under budget in some areas, great! You can either use this extra money to bolster your savings or make extra debt payments. However, if you’re over budget in some areas, don’t worry – we’ll work through that below.
Next, take a look at your sinking funds.
These are accounts where you save money each month to cover specific expenses. How much money do you need to save each month in order to cover your bills? If you’re not sure, take a look at your past bills and use that as a guide. Once you know how much money you need to save, divide it by two and put that amount into your biweekly budget.
This will help ensure that you always have the money you need saved when the bill comes due.
If you have any leftover money after filling in your budget, send it to savings or make extra debt payments.
You can also use this extra money to invest in yourself (by taking classes, for example), but be careful not to overspend!
Creating and sticking to a biweekly budget is a great way to start saving money and getting your finances under control.
Biweekly budgeting tips
When it comes to budgeting, biweekly budgets can be a helpful way to streamline the process. By taking an hour or so at the beginning of each month to set up your budget, you can avoid potential headaches down the road.
It’s also important to remember to write everything down! This includes both fixed and variable expenses.
Tip #1 – Change Due Dates of Bills
If you’re having trouble with your bills, don’t hesitate to call companies and ask them to change the due dates.
This is something I do whenever I open a new credit card. I want the credit card date to close at the end of the month.
Tip #2 – Age Your Money
You may also want to save up for one month’s worth of expenses so that you always have a cushion in case something unexpected comes up.
This is also the first step to stop living paycheck to paycheck.
When you have a cushion of savings, you’re less likely to fall into debt if something unexpected happens.
Tip #3 – Track Your 2 Week Budget
There are plenty of tools for budgeting out there. In fact, here are the best budgeting apps available.
It offers a variety of helpful tips for getting started, as well as ways to automate time-consuming tasks. With this tool, you’ll be able to improve your budgeting and financial insights in no time!
Many popular options include a budgeting app, Excel, or Google Sheets. Pick what works best for you
Tip #4 – Focus on Your Goals & Finances
In order to be successful, you’ll need to set financial goals for yourself and make plans to achieve them.
As with any other goal, it’s easier said than done! It can take a lot of time, work, and effort to reach your goal.
If you’re not sure where to begin or what goals are right for you, here are some examples:
This is just a sample of the types of goals you can set. If you’re not sure where to start, just think about what’s important to you and your family.
What are some financial goals that you have? Write down your goals and make a plan to achieve them.
What to avoid when you’re paid biweekly
When you’re paid biweekly, there are a few things you should avoid in order to make the most of your money.
You need to learn which payment type is best if you are trying to stick to a budget.
Since biweekly budgeting can be more difficult, you need to know the pitfalls to avoid.
Pitfall #1 – Spending All your Money Too Quick
First, don’t spend your money as soon as you get it. This will leave you with nothing left for the following two weeks.
When having to use one paycheck to cover most of your big expenses like mortgage/rent or insurance, that leaves very little money for groceries or gas
Try to have a savings goal and save for that.
For example, don’t wait until the end of the month to spend all your money. This can help you save more money and have something left over at the end of the month.
Pitfall #2 – Forgetting Bills
Second, don’t forget to budget for bills and other expenses. Make sure you have enough money to cover your costs, especially those non-frequent bills like car registration.
By doing this, you’ll be able to ensure that you have enough money each week to cover what you need.
Pitful # 3 – Quit Bi-Weekly Budget Completely
Yep, I get it budgeting your paycheck over a 2-week budget is difficult. It may feel like pushing a square through a circle. It takes a different mindset and a little more planning to make it happen.
If anything, try to avoid impulse buys. Wait until the next paycheck and see if you still want the purchase. That will help you not to overspend on unnecessary items.
What to do when you have a third paycheck?
This is the BEST benefit of a biweekly paycheck. Twice a year, you will receive 3 paychecks in a month instead of just two.
Looking forward to having a third paycheck, you can either save it or spend it.
If you save it, you can use it as a down payment on a house or invest it in a retirement fund. If you spend it, you can use it to pay down debt, remodel a house, buy a new-to-you car, or go on a vacation.
There are a few things you can do when you have an extra paycheck:
Use it to pay down debt: If you have high-interest debts, using your third paycheck to pay them off can save you a lot of money in the long run.
Invest it: If you’re comfortable with taking on some risk, investing your extra paycheck could lead to bigger returns down the road.
Sinking Funds: Those yearly expenses can weigh heavily on your budget. So, set extra money aside for those payments.
Put the money towards your goals: Whatever your ambition is, here is money to help you get there faster.
Spend it on something fun: Obviously, this isn’t the smartest option, but if you’ve been working hard and deserve a little treat, go for it!
Just make sure that you’re not spending more than you can afford.
Free Printable Bi weekly Budget Templates
There are a number of different printable 2 week budget templates that can help you get your finances in order. Most of them are simple and easy-to-use, and they’re not scary to look at. In addition, many of them have templates that you can download and/or punch holes into so that you can use them as binders or notebooks.
One great option is the budget tracking worksheet. This cute template is simple yet effective, and it will help you track your spending each month.
How do you make a monthly budget with biweekly pay?
There are a couple of ways to make a monthly budget if you receive biweekly paychecks. You can either budget by paycheck, divide out your expenses between biweekly paychecks, or focus on a monthly budget.
If you choose to budget by paycheck, you’ll create a new budget for each pay period and then stick to it. This method gives you a better understanding of the flow of money in your bank account and will help you keep track of your bills more carefully.
The other option is to budget monthly, which is for people who live paycheck to paycheck. In this case, you would budget off 24 paychecks and make plans for your two budget paychecks. Then, two of your paychecks would be budgeted for the monthly budget.
However, many people argue the Budget-By-Paycheck method can help reduce stress since it allows for more flexibility.
In either case, it’s important that you track your spending throughout the month so that you can make adjustments as needed.
Time to Create Your Bi weekly Budget Calendar
This budget will be a little more complicated than your monthly budget because your paychecks are not always going to be paid on the same day of the month. However, most of your bills are usually fixed and don’t change from month to month.
So, you need to plot out which bills you will pay with each paycheck ahead of time in order to make sure you have enough money to pay them all and keep them organized.
It is important to remember that when creating your budget, you need to give yourself some grace to make sure it works for you while you work on perfecting your budgeting style.
For us, having a buffer of money in our “income checking” account takes away the stress of bills and anxiety that we will run out of money. We understand that we need to use sinking funds for those variable expenses.
However, it is important to note that a biweekly budget tends to forget events such as birthdays or vacations from being considered in spending plans. So, make sure to include them.
Now that you have a good idea of how much money you make and how much money you need to live comfortably, it’s time to start creating your biweekly budget.
Also, taking time to understand your personal financial statement is important.
From all of the free and paid budgeting apps, here are our top budgeting apps to check out!
This section may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. Please read the full disclosure below.
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A return to a more traditional market? Last week, Fannie Mae predicted that 2022 will be a transitional year for markets as pre-COVID economic trends gradually return. And with rent prices and mortgage rates rising across the board, now is an important time to evaluate your options and act quickly. Let’s cover the latest news and more in this week’s Mortgage Monday update.
Rates Update
For the week ending Thursday, January 20, Freddie Mac reported general mortgage rate increases in their Primary Mortgage Market Survey. Since the start of this dramatic upward trend, mortgage rates have seen increases of nearly half of a percent – a rise that is only projected to continue throughout 2022. They may have leveled out by the end of last week, but the current rates likely won’t remain the same for long.
With rates at their highest in the past two years and experts commonly predicting a return to a “new normal,” the window to finance a home with long-term savings is closing. Contact your Total Mortgage loan officer now before the increase continues!
Refinance Opportunities are Down; Rent Prices High
January’s mortgage rate increases have not come without consequences. With spikes to 30-year fixed loan options, the number of refinance candidates has been cut nearly in half since the start of the year. The volume of applications to refinance has also been subsequently halved, illustrating fewer opportunities to save by securing a lower rate. Should mortgage rates continue to rise, we’ll likely see further declines in overall refinance volumes as a result.
On the other hand, Redfin reported a 14 percent increase in average rent prices since December 2021 (with some US cities reaching upwards of 40 percent increases!). These are some of the highest numbers recorded in over two years and should serve as a warning to any prospective homebuyers. If you’re in the market for a new home, act now; buyers everywhere are now faced with the choice of securing a low rate (before they continue to increase) or settling for ever-increasing rent prices. Contact your Total Mortgage loan officer to begin your path to homeownership quickly.
Older, but Still Important News
The Federal Housing Finance Agency (FHFA) announced upcoming fee increases for certain Fannie Mae and Freddie Mac home loans. Effective April 1, 2022, upfront fees for these options will have the following increases:
Upfront fees for high-balance loans will increase between 0.25 and 0.75 percent.
Upfront costs for second home loans (non-primary residence) will increase between 1.125 and 3.875 percent.
These increases will ultimately depend on each product’s loan-to-value ratio. “High-balance” loans qualify as any that go above the conforming baseline limit introduced on January 1 – more information on that below.
At the start of January, the borrowing limits for Conventional and Federal Housing Administration (FHA) loan options saw significant increases to help buyers combat rising market prices. The conforming limit for single-unit home loans is now $647,200 – an 18.05 percent increase from last year’s limit. To learn more about these changes and your new borrowing options, get in touch with your Total Mortgage loan officer.
In Closing
With continued rate increases, it’s only a matter of time until this projected “new normal” arrives. Of course, the rate at which the market transitions to pre-pandemic levels will likely be determined by the pandemic itself; how it develops, how we react, and (most importantly) how the markets react. For now, our best recommendation is to review your options and act quickly. Our team of experienced loan officers is ready to help you secure your home financing before the rate increase continues – contact us at any time to get started!
In the meantime, we’ll continue to monitor our industry news and provide updates as they come. The Federal Reserve is set to meet later this week, which will likely result in some form of a market reaction. Follow us online to stay informed with the next weekly update!
Today we’ll check out “Compass Mortgage,” a direct lender based out of Chicagoland that is one of the top mortgage companies in Illinois.
They do nearly all of their business in the Land of Lincoln, putting them near the top-20 for all mortgage lenders in the state.
So if you’re a homeowner or prospective home buyer in Illinois, there’s a good chance you’ve heard of them.
What sets them apart is their dedication to customer service, with a big focus on creating a personal home loan experience, with you guessed it, real people.
That means being treated like family, instead of relying on a chat bot to get your loan. Read on to learn more.
Compass Mortgage Fast Facts
Retail, direct-to-consumer mortgage lender
Offers home purchase loans and refinances
Founded in, headquartered near Chicago, IL
Licensed to do business in 15 states
Funded $3.2 billion in home loans last year
Roughly 90% of total production comes from state of Illinois
Compass Mortgage is a retail, direct-to-consumer mortgage lender that offers home purchase loans and mortgage refinances.
This means you can apply remotely via their website, or visit a physical branch if one is located near you (they’re mostly in the Midwest).
The company was founded by Dan Graham in 2002 and is located in Warrenville, Illinois, which is about 30 miles west of Chicago.
For the record, they are not affiliated with the Compass real estate brokerage, which is based out of New York City.
While Compass Mortgage is licensed in 15 states across the nation, roughly 90% of total loan volume comes from their home state of Illinois.
That made them a near top-20 mortgage lender in the state of Illinois, mostly beat out by the mega banks, Guaranteed Rate, Rocket Mortgage, and so on.
The other states where they’re licensed include Arizona, California, Colorado, Florida, Georgia, Indiana, Iowa, Kentucky, Michigan, Minnesota, North Carolina, Ohio, Oregon, South Carolina, Tennessee, Texas, Virginia, and Wisconsin.
Last year, Compass funded $3.2 billion in home loans, with about two-thirds of volume consisting of mortgage refinances and the rest purchase loans.
That means they are probably well-suited for both existing homeowners and those looking to buy a property.
How to Apply with Compass Mortgage
To begin, you can either call them up, visit a physical branch, or simply head over to the website and go the self-serve route.
Your best bet might be to speak with a loan officer first to discuss loan pricing and eligibility, then apply.
Either way, it’s possible to apply without speaking to anyone if you’re a self-starter.
Once at the website, select your transaction type (e.g. refinance or purchase), then you’ll be asked if you know your loan officer by name or don’t have one/remember.
There is a loan officer directory on their website if you wish to read bios or if you simply need a reminder of who you were working with/referred to.
If you know the individual, you can select them from a drop-down list to ensure you’re paired with the correct person.
If not, you’ll be assigned a loan officer after you submit your loan application.
Their digital mortgage application is powered by Blend, a leader in the mortgage fintech world.
It allows you to complete the app electronically, link bank accounts using login credentials, eSign disclosures, upload paperwork, and more.
Once your loan is submitted, your loan team will guide you throughout the process. You’ll also be able to log on to the borrower portal 24/7 to check loan status and satisfy outstanding conditions.
Compass Mortgage makes it easy to apply for a home loan and stay abreast of what’s going on from start to finish.
If you’re a prospective home buyer, they offer their “Get Committed” mortgage pre-approval, which is a more robust loan commitment.
It is fully-underwritten and includes the ability to lock your loan before you find a property (pre-lock).
This shows home sellers you’re a serious, well-qualified buyer and can make your offer stand out in a bidding war or even compete with cash buyers.
Loan Programs Offered by Compass Mortgage
Home purchase loans
Renovation loans
Construction loans
Refinance loans: rate and term, cash out, streamline
Conforming loans backed by Fannie Mae and Freddie Mac
Jumbo loans
FHA loans
VA loans
USDA loans
Down Payment Assistance (DPA) programs
Bridge loans
Lot/Land loans
Compass Mortgage offers a wide selection of home loan options to suit just about any borrower in any situation.
This includes home purchase loans, refinance loans, and construction and renovation loans, such as the FHA 203k program.
All the major loan types are available, including conforming, jumbo, government loans (FHA/VA/USDA), and even bridge loans.
Those who are short on funds can take advantage of their Down Payment Assistance (DPA) programs, including grants and forgivable loans.
They lend on all property types, including primary residences, vacation homes, multi-unit investment properties, and condos/townhomes.
Both fixed-rate and adjustable-rate mortgages are available in a variety of loan terms including the 15-year fixed and 7/1 ARM.
Simply put, you shouldn’t be limited when it comes to loan choice.
Compass Mortgage Rates
One area that’s light on information is their mortgage rates and lender fees.
Compass Mortgage doesn’t publicize these details on their website, so it’s hard to know how competitive they are on the pricing front.
As such, you’ll need to get in touch with a human first to discuss interest rates and inquire about any fees.
It’s unclear if they charge a loan application fee, loan origination fee, underwriting fee, and so on.
Be sure to get all the details and your mortgage APR so you can compare it to quotes from other banks, lenders, and mortgage brokers.
Compass Mortgage Reviews
On Zillow, Compass Mortgage has a 4.99-rating out of a possible 5 from about 400 customer reviews.
That’s pretty much as close to perfection as you can get, and a testament to their mission to provide a “Better Mortgage Experience.”
A good chunk of those reviews indicate that the interest rate and/or closing costs were lower than expected. So that at least provides a clue to their pricing.
They also have a 4.9-star rating on Google from nearly 800 reviews, another sign of their strength in the customer satisfaction department. And a 4.5-star rating on Yelp from over 50 reviews.
Lastly, while they’re not an accredited business, they hold an ‘A+’ BBB rating based on complaint history, of which there are none currently on file.
To summarize, Compass Mortgage seems to be really big on customer service, and could be a good choice for a first-time home buyer who wants hands-on service throughout the loan process.
They could also work for an existing homeowner looking to refi – just pay attention to rates and fees to ensure they’re competitive.
Compass Mortgage Pros and Cons
The Good Stuff
Can apply for a home loan online in minutes
Offer a digital, paperless loan application process
Also have brick-and-mortar branches in the Midwest
Lots of loan programs to choose from
Offer fully-underwritten pre-approvals to help you win a bidding war
Can pre-lock your rate before you find a property
Excellent customer reviews across ratings sites
A+ BBB rating
Free online mortgage guides, mortgage calculators, and mortgage glossary