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In case you missed it, last week we hosted a Twitter chat on the topic of #HowWeSpend, where we covered everything from the biggest spending trends of 2014, tips on spending wisely in 2015 to hot topics like mobile payments and millennial spending habits.
With over 128 Twitter chat contributors and 697 mentions of #HowWeSpend, the chat was packed with great content and tips from consumer financial experts, Mint partners and Minters alike.
Check out some of our favorite tips and chat highlights below, or to follow all that was shared during last week’s chat, just plug #HowWeSpend in the Twitter search bar.
Thanks again to all of you who followed along!
#HowWeSpend Twitter Chat Highlights:
Q: How do you expect spending trends to vary in 2015 vs. 2014?
I expect that there will be a rise in spending by the “IndieWoman”: 27 & older, lives alone & has no kids. – @TheBudgetnista
Many economists predict 2015 may be the year more millennials finally enter the housing market – @Glink
Low gas prices and a strong dollar will mean more travel spending. Budget travel tips: http://bit.ly/1EBacox – @hperez
Q: How are mobile payments changing #HowWeSpend?
Mobile is convenient 4 sure, but avoid impulse purchases and monitor spending. – @hperez
I pay every bill that comes in mail or email via my bank’s mobile app. Easy way to track spending. – @sharon_epperson
Pay all your bills (utility, cable, credit cards) w/the #MintBills app – it’s easier than ever to stay on top of it all – @mintbills
Q: Let’s talk millennials. How are they saving differently than their parents?
Studies show millennials less likely to have savings to cover unexpected expenses. – @CHLebedinsky
Mint survey found millennials focus on fulfilling immediate needs (like rent, student loans) more than future saving – @mint
Millennials are far more comfortable with using smartphones, apps and online tools to help spend & save – @TheBudgetnista
Q: Best tip on finding the right balance between spending vs. saving?
Think of life on both sides of the = sign. income should be >/= to expenses and if not, one side needs adjusting – @OysterRiverPart
It’s important to understand the difference between items you actually NEED & those you simply WANT – @EFXFinanceBlog
Spend, spend, spend will lead to poverty while save, save, save will lead to resentment. Be responsible but also have fun! – @Steve_Repak
Q: What’s your personal secret to financial success?
Automate savings and bill paying. Use app such as #Mint to track spending. Don’t try to keep up with Joneses – @CHLebedinsky
Make saving and budgeting into a social game and enjoy it! When your having fun you will always succeed. – @pennypinchbros
My secret to financial success: 1. (again, my) BUDGET –@TheBudgetnista
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When it comes to your financial health, what you don’t know can cost you. Just like the annual physical with your doctor keeps your body’s health on track, knowing your financial vital signs can save you money and help you keep fiscally fit. Match your financial knowledge in the categories below to see where you can shape up!
Net Worth
Do you know what your net worth is? If the answer is no, you’re not alone: most Americans don’t! But knowing your net worth, the value of your assets (your savings and retirement accounts, your house, collectibles, your car) minus your total debts (including house payments and car payments) – is key to tracking your financial health. Knowing your net worth offers a clear picture of your financial state, showing you how you spend your money. Calculate your net worth regularly—ideally once a quarter—to identify areas where there’s room for improvement.
Mortgage Rate
According to a new Bankrate.com report, a whopping 35% of Americans don’t know their mortgage interest rate. How about you? Rates have bounced around historical lows for years, yet many homeowners who could benefit from refinancing haven’t taken advantage of the potential savings because they were unaware of their current rate. With rates expected to rise from 4.2% to over 5% in 2015, now is the time to do some easy research and stop leaving thousands of dollars on the table.
Credit Score
Your credit score – a three-digit number that represents your credit risk with a number that ranges from about 300 to 850 – is looked at by everyone from lenders to landlords. The National Foundation for Credit Counseling recently found that 60% of adults hadn’t reviewed their credit score within the previous 12 months. Big mistake, particularly if you’re in the market for a loan. Why is this number so important? Score high (mid 700s) and you could save thousands of dollars in low interest rates. Score low (below 620) and when you apply for a loan you’ll be offered a higher rate, favorable terms or even worse, you may not be able to obtain financing at all. Want to know where you stand? You can get your score for free from any number of providers including Mint.com. If your score is low, work on improving it by making your payments on time (try Mint Bills to get reminders when bills are due, stay organized, and pay on the spot). Also, cut back on using credit cards; a good rule of thumb is to avoid using more than 10% of your available credit on any card.
Make Friends with Your Credit Report
Your credit report contains detailed information about your credit history including things like credit-card use, auto loans and debts that were sent for collection. For such important information, an alarming number of credit reports contain mistakes. In fact, an FTC study indicates that as many as 40 million Americans have a mistake on their credit report. Since fewer than one-in-five consumers check their reports, chances are most people don’t know about the errors. Yet if a mistake is serious, it can lower your credit score and possibly result in your being denied credit. Get a free copy of your credit report on AnnualCreditReport.com and review it carefully.
–Vera Gibbons,Mint Contributor and Personal Finance expert
This post was corrected on March 6, 2015.
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Swiping your magnetic-stripe credit card will soon become a thing of the past.
In the wake of widespread consumer data breaches like those at Target and Home Depot – plus increasing rates of counterfeit fraud – credit card companies nationwide are issuing new smart chip-enabled cards to improve payment security and provide consumers with greater protection against fraud.
Have you received your new chip-equipped credit cards in the mail yet? If not, you will soon: October 2015 is the “liability shift” deadline between banks and merchants. If a business doesn’t offer chip-enabled transactions after October, the liability for any resulting credit card fraud will fall to the business-owner and no longer the bank.
Here’s the scoop on what you need to know about chip-enabled cards, or as they are more formally known, EMV cards:
What’s EMV?
EMV cards – named after its original developers Europay, MasterCard, and Visa – are nearly identical to the typical American credit card, but they are encrypted with a small computer chip rather than a magnetic stripe. You will notice a small gold or silver metallic square on the front of your card. While this square contains the same information as magnetic stripe cards, such as name, card number, and expiration date, each transaction generates unique, dynamic data. This is the game changing technology that makes it difficult for anyone but the rightful owner to use the card, and it protects against the creation of counterfeit cards.
EMV cards have been the standard around the world for decades, but America is finally catching up: half of the world’s credit card fraud occurs in the US!
How Do EMV Cards Work?
Instead of swiping your card, you’ll insert your card into a terminal slot. This action is called “dipping”! The data then flows between the card chip and the issuing financial institution to verify the card’s legitimacy. Because these cards are read in this new, different way, you should know that the transaction is not as quick as a basic swipe; expect a slightly longer time at the point of sale. Though most of the world operates on a “chip and pin” system, Americans will still sign credit card receipts for the time being.
Keep in mind, your card will still have an magnetic stripe, too. Not all businesses will support “dipping” by October. In fact, a recent Intuit survey found that 42% of small businesses haven’t heard about the deadline yet!
Can I Still be a Victim of Fraud?
Though this new technology should give you greater peace of mind, smart-chips do not entirely eliminate credit card fraud. You will still need to monitor your credit card accounts and credit score diligently – at least once a month. That’s the best way to detect fraud in the early stages and keep your identify safe.
– Vera Gibbons,Mint Contributor and Personal Finance expert
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In addition to serving as an important reminder to honor our U.S. war veterans, Memorial Day marks the start of the summer travel season. Whether you’re an adventurer, a creature of habit, or planning your first big family vacation, here are some money saving tips you will want to consider.
Save Up
When planning summer travel, estimate your costs ahead of time for airfare, lodging, and expenses. Set a goal to save a portion every month towards that amount, using an app like Mint to track your progress. The closer you get, the closer that vacation is, and the more excited you and your travel companions will be!
One popular saving method I’ve seen online is the hoarding of five-dollar bills. A Reddit user inspired many with his post and photo captioned: “For the past year, I put away every $5 bill that came into my possession. To date, I’ve saved $3,335.”
Get a Cheaper Flight
Plan ahead: Try to book your flights around three months in advance of your planned date of travel. Finding cheap last minute airfare isn’t impossible, but it’s hard to plan that way.
Low fare alerts: Pick a few destinations you want to visit and set up “low airfare” alerts at sites like Airfare Watchdog or Kayak to be notified when prices drop below your threshold. If you’re not limited to a certain destination, Kayak’s summer travel hacker can help you choose a lower-fare location.
When to buy: If a fare seems too good to be true, BUY IT. I’ve often comparison-shopped for flights, and hesitated to purchase a really good-looking fare, then regretted it when the price went up significantly the very next day. The price-prediction app Hopper will advise you to purchase your flight now or wait because prices might drop.
Avoid Airline Fees
Baggage fees: Avoid the long lines and $25 charge by packing light and flying only with carry-ons. Make sure your carry-on suitcase fits the dimensions allowed by your airline. Avoid stuffing the bag so full that it can’t fit into the bag-size tester. Summer travel often requires less clothing anyway, right?
To make sure you stay comfortable on the flight, a thin scarf – which looks fashionable and keeps the neck warm – can double as a light blanket. Wear your largest pair of shoes and bulkiest clothing on the flight (big jacket doubles as lumbar support!) so they won’t take up as much space in your suitcase.
If you travel to the same destination often (like a relative’s home) consider leaving some toiletries or clothing items like shoes or sweaters at that person’s house. My parents visit us a few times a year and usually travel with one small bag each because they have at least two full outfits in a closet in my house, including shoes!
Food and drink: Travel with an empty reusable water bottle that you fill when you get through security. Bring your own snacks and packable meals so that you don’t get tempted to charge an airline meal to your credit card. The food you pack will likely taste better, anyway. But be kind to your fellow passengers and try to avoid powerful odors like tuna or egg salad or allergens like peanut butter.
How are you saving on summer travel? Let us know in the comments below!
Kim Tracy Prince is a Los Angeles-based writer who has a husband, two little boys, and some serious wanderlust. She’ll be traveling to Connecticut this summer like she does every year.
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Shortly after graduating from New York University with a Master’s degree, Melanie Lockert turned to food stamps, as she worked her way out of $81,000 in student loans.
“There were a lot of emotions around carrying that debt. It caused a lot of stress and depression and anxiety for a long time,” she shared with me recently during an interview on my podcast.
The student loan crisis in America has reached epidemic proportions. With households across the country carrying $1.26 trillion in student loans, it is the second largest category of debt following mortgage debt.
For the class of 2016, the average student loan balance is $37,172, up six percent from the previous year, according to a new analysis by student loan expert Mark Kantrowitz published in the Wall Street Journal.
If you’re struggling to make ends meet due to student loans or wondering how you’ll ever pay off the debt in a timely manner, here are some key steps to support you along the way.
Never Pay Late. Ever.
Whoever likes to call student loans “good debt,” has probably never faced a late payment. “Falling behind on payments can cause federal loans to enter default, triggering expensive fees and collections,” says Heather Jarvis, attorney and student loan expert.
If you miss several payments and are in default, federal loan borrowers may also seize your wages, tax refunds and possibly social security benefits. And you can only imagine how all this can damage your credit score. (Keep reading for advice on what to do if you’re already in default.)
To avoid ever paying late, sign up for automatic payments with your lender. Doing so could also earn you a reduced interest rate (usually 0.25%), which could save you hundreds of dollars, maybe more, over the life of your loan.
Extend the Term
Speaking of your loan’s life, extending the term from 10 to 15 or 20 years could provide you with some payment relief since when you extend the term, your monthly payments decrease.
Bear in mind that since your interest rate remains the same this strategy may mean you’ll end up paying more to pay off the loan over time.
One way to avoid paying too much more interest is to take advantage of the smaller monthly payments for only a window of time. As soon as your finances strengthen place more than the monthly minimum towards your balance to help you get out of debt closer to your original term. Be sure to place extra payments directly towards the principal to knock down the debt even faster.
Tap Government Assistance
If you have federal student loans you may qualify for Income-Based Repayment (IBR), a government program that helps qualifying borrowers cap loan payments to a percentage of income, typically 10% of their income. The program will also forgive any remaining student loan debt after 20 or 25 years of making payments.
The Department of Education also has a program called Public Service Loan Forgiveness (PSLF). If you work full-time for a “public service” employer such as not-for-profits, AmeriCorps or PeaceCorps, the military or a government agency, PLSF may forgive your remaining federal loan debt after 10 years of employment.
If You’re Already Behind…You Have Options
If you’re in default, Jay Fleischman, a student loan and bankruptcy attorney, says you may be able to consolidate your loans under the U.S. Department of Education’s Direct Consolidation Loan Program, which is free and does not depend on creditworthiness. “You could also rehabilitate by making nine agreed-upon monthly payments over a 10-month period of time with the collector assigned to the account. Those payments may be adjusted based on your income, and payments can be as low as $5 per month,” he says.
For private student loan borrowers, “the situation is markedly different because there is no right to consolidate or rehabilitate unless the lender has a specific program to do so,” says Fleischman. Contact your loan servicer and learn about ways you may be able to reduce or eliminate payments until you get back on your feet, he says.
If your lender won’t budge, you may choose to remain in default until a settlement opportunity presents itself or until the statute of limitations for collection expires. As a last resort, you may also consider bankruptcy as a way to wipe out other debts and repay your student loans under court supervision. “Though bankruptcy may not wipe out your student loans except in limited circumstances, many people opt for bankruptcy as a way to get more control over the ways in which your loans get paid,” says Fleischman.
Tap Home Equity…With Caution
Homeowners may be eligible to use a home equity line of credit (HELOC) to pay off their remaining student loan balance. This allows them to pay off the student loan with the existing equity in their home and save money if the HELOC has a lower interest rate than the student loan.
There’s also a new program offered by online lender SoFi called the Student Loan Payoff ReFi that allows some homeowners to pay down student debt using their home’s equity. SoFi refinances the total amount of your student loans and existing mortgage at a lower rate. Through that process your student loan balance is paid off directly to the loan provider.
To qualify, SoFi says borrowers need healthy credit scores (check your free credit score to verify you qualify), a debt-to-income ratio that’s 45% or less (calculate debt-to-income ratio to see if you fall under this number) and a loan-to-value ratio that’s 80% or less (meaning you can’t be underwater on your mortgage). You can calculate your debt-to-income ratio with Turbo, and
Just keep in mind that when paying off your student loans with home equity – be it through SoFi or another lender – if you default on the consolidated loan the lender has the right to use your home as collateral and foreclose on the property. It’s a serious risk if you don’t have enough in savings or stable income to help you get by during tough times.
Remember to Deduct It
Student loans are no fun, but paying them can yield lower taxes. Each year the IRS lets borrowers deduct up to $2,500 in student loan interest from their taxable income.
Maybe Your Employer Can Help?
A growing number of companies are helping employees squash their student loans as an added perk like a 401(k) and health care.
Gradifi is a Boston-based start-up that’s working with over 200 employers to set up its student loan pay down plan, including PriceWaterhouseCoopers.
It’s a trend that’s likely to grow over the years with more than 50 percent of student loan borrowers saying they would rather receive student loan benefits than heath care from their employer.
Start a Side Hustle
While it’s important to cut back on spending to make room for paying down debt, that move alone isn’t always enough. “Pinching pennies and cutting back is really useful as an initial strategy, but at some point, there’s only so much you can cut back,” says Lockert, whose now chronicled her debt payoff strategies in the book Dear Debt: A Story About Breaking Up With Debt. Through a series of side hustles over the years, including housecleaning, event assisting and pet sitting, earning $10 to $50 per hour, Lockert managed to not only afford her living expenses, but also erase five figures worth of student loan debt.
Depending on your interests, you can find relatively easy gigs at sites like TaskRabbit, Tutor.com, GigWalk and Care.com.
Have a question for Farnoosh? You can submit your questions via Twitter @Farnoosh, Facebook or email at [email protected] (please note “Mint Blog” in the subject line).
Farnoosh Torabi is America’s leading personal finance authority hooked on helping Americans live their richest, happiest lives. From her early days reporting for Money Magazine to now hosting a primetime series on CNBC and writing monthly for O, The Oprah Magazine, she’s become our favorite go-to money expert and friend.
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Wedding season has arrived! If you’re getting married this year, there’s a decent chance you’re tying the knot soon: June remains America’s most popular month for weddings. Guys are taking a more active role in wedding planning these days, from picking out a venue to helping make a couple’s biggest wedding-related decision: setting a budget for the big day. Check out our infographic to get the scoop on wedding expenses and how you can save money.
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Let’s face it. Who doesn’t like saving time and money? While it may seem hard to do when you are paying for both auto and home insurance, there are ways to simplify and save. Here are a few ideas!
Digital ID Cards
You can do pretty much anything from your smartphone these days — including providing proof of insurance. More than half of states now accept digital forms of your insurance ID cards, via your smartphone. This means no more waiting for a new card to be sent to you or having to worry about accidentally carrying the expired version.
These are the states that accept digital insurance ID cards.
Usage Based Auto Insurance
Usage based insurance is just what it sounds like. Basically, your insurance premium is based on how you drive.
Here’s how it works:
You’ll need to install a telematics device provided by your insurance company. Your driving is then tracked through the telematics device and immediately sent to your insurance company.
Are you a good driver? Would you be willing to have a device track your driving behavior if it helped save you money?
If you answered yes to both of these questions, than usage based insurance could be a great option for you to lower insurance premiums.
It’s important to know that carriers typically give you a discount for installing this device, but your rates are subject to go up or down (based on your driving) after the data collection period — usually one term (6 months).
Go green to save green
You can also save money by getting a green home insurance policy. If your home is Green certified (by LEED), it could qualify you for discounts — up to 5% or more in savings!
Do you have or are considering solar panels, wind or geothermal power in your home? If so, it’s time to look for a discount! Helping the environment in conjunction with saving money is pretty cool.
And when you’re on the road, driving a hybrid or an electric car can also save you on insurance.
Many insurance companies consider people who own these types of cars to be less of a risk, so there’s a good chance your premium won’t be as high as if you were to drive a traditional car instead. Plus, feel rewarded for helping out our precious environment.
Driving these types of vehicles on average saves you up to 10% on your premium!
As you can see, there are some great ways to save time and money on your auto and home insurance policies. We all know that time and money are both limited, so why not give one of these insurance trends a try?
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Did you know June is National Adopt a Cat Month? Spring is prime breeding season for cats and dogs, so shelters nationwide report an increase in kittens and puppies every summer. If you’re planning to welcome a new pet into your family soon, consider the expenses of pet ownership before visiting your local shelter. Check out our infographic to understand the costs associated with your cat or dog’s first year. If you plan ahead and save, you’ll have a new best friend in no time!
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It’s “National Splurge Day!” People who normally live modestly are encouraged to relax their boundaries and indulge in things they normally forgo. Yes, it’s one of those arbitrary holidays that someone just made up, but it’s actually a good excuse to address the topic of splurging.
I know what you’re thinking. “What the heck, Mint? You’re the place I come to for help with saving money.”
Hear me out. During the last few years I have learned that building money into my budget for little (and occasionally big) indulgences is a healthy way of keeping myself on track with my saving. It’s one good way to battle “frugal fatigue” and prevent myself from making foolish purchases on the days I’m sick of worrying about every penny all the time.
The occasional splurge approach works not only with money, but with other things we deny ourselves. My favorite splurge is taking a couple extra hours in my day for a spa pedicure, and ending with a donut. That’s indulging in time, money, and calories all in one! But a splurge might look very different to you.
Maybe there is really no room in your budget for a splurge today, but you can start preparing by putting some money aside for one in the future. If you do have some wiggle room, here are some suggestions for responsible splurging.
Fix what’s broken
Do you hate your clanky, energy-inefficient refrigerator/washing machine/dishwasher? Do you keep saying to your spouse “We really need to replace our pathetic window screens/beat-up mailbox/chipped paint job?” Are you putting off that car repair that will eventually make the difference between having a working car and taking the bus? Pick even one of these and take care of it. You’ll feel a whole lot better.
Invest in yourself
Check out local deal offers like Groupon or Living Social for discounts on gyms, art studio events, or tuition for extended learning centers. While the cost might be a splurge, the new physical fitness, artistic ability, or knowledge you gain from these classes will stay with you and increase your quality of life.
Buy some time
A very busy friend of mine likes to say that “throwing money at a problem” isn’t always a bad idea. Have a TaskRabbit or virtual assistant take care of your errands or data entry and use the saved time to do something for yourself. Pay a babysitter and go out with friends or significant other, whom you never see because you’re working and taking care of other people. Save time on meal planning by paying someone else to do the thinking for you.
Start the process
Take a bite out of a bigger splurge by setting some money aside toward the vacation that will satisfy your wanderlust or recharge you. Or finally pursue that elective medical procedure that could make your life easier: laser eye surgery, physical therapy for your aching back, even braces. Do you have a health savings account sitting around with a balance because everyone in your family is healthy? First, count your lucky stars, and then look into using your balance toward a procedure. If it’s a Flexible Spending Account, you have to spend the money by year end or you lose it, so you might as well use it for good, right?
Buy some happiness
I know that going to the movies with my kids makes all of us happy, but I almost never do it because the cost can be $40 for three tickets alone! We only go to the movies a few times a year, but when we do, the experience is fun and special. I go all out: the kids can choose any snack and drink, and we try to get to the theater early so they get their pick of seats.
What makes you happy? I hope you find a way to splurge on yourself, if not today, then when it works for your finances. It’ll make budgeting that much more rewarding.
Kim Tracy Prince is a Los Angeles-based writer who has a husband and two little boys. She often dreams of splurging on a nap and a margarita, not necessarily in that order.
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