Whether it’s going to bed before midnight, eating broccoli, or dealing with your finances, doing the “right” thing can sometimes feel like a herculean effort.
Similar to an erratic sleep schedule or an aversion to eating green things, there are consequences to delaying wise financial moves. If you avoid creating a budget, putting your bills on autopay or learning how to invest, your financial life may become more stressful.
But knowing something is good for you isn’t always enough to make you do it. Many people have complicated feelings around money, and for good reason. Getting to the bottom of those feelings may be the most effective way to deal with avoidant tendencies.
Uncovering your financial beliefs
To get to the root of your financial anxieties, it may be helpful to learn about your “money scripts,” a term that’s a registered trademark of the Financial Psychology Institute. Money scripts are what financial therapists call the unconscious beliefs we hold about money. Often, these beliefs are rooted in our childhood and continue to shape our financial lives as adults.
Rick Kahler, a certified financial therapist and founder of the Kahler Financial Group in Rapid City, South Dakota, had one client who struggled to save despite being a high-earning professional. Through several interviews, Kahler learned that the client’s parents had filed for bankruptcy when she was a child, and in the process, she lost her own savings.
“She just knew that all her money that she worked hard to save disappeared. And so the lesson she took away from that was ‘don’t save money, because it will disappear,’” says Kahler.
Georgia Lee Hussey, a certified financial planner and founder of Modernist Financial, a B Corp wealth management firm in Portland, Oregon, says that taking what may seem to be a logical step, such as investing just a small amount, before unearthing your deeper emotions may sometimes do more harm than good.
“The small step to get closer to the logical action is actually a reinforcement of the mega story,” says Hussey.
Tools you can use
While uncovering your money scripts may feel daunting, there are a lot of tools out there that can help you get started. You can take the Klontz Money Script Inventory-Revised (KMSI-R), which is a free short quiz that helps you identify your dominant money scripts and offers actionable advice. The KMSI-R evaluation is offered by Your Mental Wealth Advisors, a financial advisor firm based in Burlingame, California, that focuses on overall financial health. Hussey’s firm offers a similar reflective experience you can download for free that can help you facilitate a conversation about your money history.
And if you’re able, it may be worth working with a financial therapist in conjunction with these tools.
“Working with a financial therapist can really help,” says Kahler. “But if a person doesn’t want to do that, they may want to employ journaling or mindfulness meditation that is specifically geared to money scripts. But typically, people can make pretty good progress in really focusing on their personal situation, and a financial therapist can help with that.”
Be ok with baby steps
After doing some deep work on your money story, and on how your long-held beliefs came to be, you may be feeling ready to take some small steps toward a better financial future.
A few baby steps you can consider could include moving your money into a high-yield savings account instead of a standard savings account. If you have a 401(k) with an employer match, you could also look into contributing enough to receive that match.
But be ready for those old stories to come up, because even an account type like a 401(k) may become an emotional stumbling block.
“One of my favorites from the Great Recession is, ‘I’m not going to invest in a 401(k) because my uncle lost all of his money in his 401(k),’” says Hussey. “It wasn’t the 401(k) that was the problem. It was your uncle, who in the middle of the night got freaked out and sold everything in his 401(k) at the bottom of the market. That’s actually what was wrong. It was the human making an emotional decision. The 401(k) itself is just a tax wrapper. It has no personality. It doesn’t do things to anybody. So let’s unpack what that story is about.”
Hussey encourages people to deeply investigate where the stories they’ve heard about investing came from.
“I think those kinds of questions like, ‘What am I telling myself? Where’s it coming from? Who told it? What was the location I heard that? Where do you think they heard that from?’ That’s how we start to unpack these stories about investing and saving,” says Hussey.
This article was written by NerdWallet and was originally published by The Associated Press.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
American spending habits fluctuate by generation. In 2023, Gen Z spent most of their money on food and clothes while baby boomers prioritized healthcare.
American spending habits fluctuate based on factors like the economy, average cost of living and global events. Interestingly, spending trends don’t always move in predictable patterns—NPR reported elevated spending in 2023 despite rising inflation costs.
Here, we’ll review American spending habits to paint a clearer picture of our potential expenses in the near future. We’ll also share personal finance resources that can help you refine your budget and reach your savings goals.
Table of contents:
Overview of American spending habits
According to the Bureau of Labor Statistics (BLS), Americans spent an average of $72,967 in 2022. This number suggests a 9 percent increase in American spending habits from 2021 (wherein the average annual expenditure was $66,400) to 2022. How much we spend makes a lot more sense when we break down what exactly our money is going toward.
What do Americans spend the most money on?
Expenditure
Cost
Housing
$24,298
Transportation
$12,295
Food
$9,343
Personal Insurance and Pensions
$8,742
Healthcare
$5,850
Entertainment
$3,458
All Other Expenditures
$2,080
Cash Contributions
$2,755
Apparel and Services
$1,945
Education
$1,335
Personal Care Products and Services
$866
Source: Bureau of Labor Statistics
In 2022, the BLS noted a 7.5 percent increase in income to coincide with a 9 percent increase in expenditures. Among the different categories, spending on food increased by 12.7 percent from 2021 to 2022. Vehicle purchases and entertainment expenses dropped by 6.9 percent and 3.1 percent, respectively.
These numbers fluctuate depending on the circumstances of a particular household. For example, the BLS found that 39.4 percent of a one-person household’s expenses go toward housing costs, while 32.1 percent of a two-person household’s funds are spent on housing.
To better understand American spending habits, we can examine the average expenditures of various groups based on factors such as age and education.
Teen spending habits
According to the United States Census Bureau, more than 43 million teenagers live in America. Gaining a better understanding of teen spending habits is important, as teens spend about $63 billion each year.
More than 50 percent of young adults (16 to 24) were employed in 2023. Some of the top brands that teens spend their new income on include Chick-fil-A, Netflix and Snapchat. In 2024, the BLS anticipates that more teenagers will prioritize school attendance over traditional means of employment—which could affect where and how often they’re spending money.
College student spending habits
College student spending habits fluctuate as changes to the American education system become more widespread. Four years in college is no longer the norm—many students take anywhere between an extra semester to a few extra years to graduate. This extra time incurs additional costs (like tuition and rent) that impact spending habits.
In addition to money spent on tuition, college students are purchasing new tech, tickets to festivals and events and lots of food. Older students with more life experience also have to balance school expenses with other mandatory purchases like groceries for the household.
Gen Z spending habits
Generation Z includes anyone born between 1997 and 2012. Gen Z spending habits reportedly differ even more than their older millennial counterparts. This generation grew up completely immersed in the digital era and is very likely to shop online.
A 2021 study by Elmira Djafarova and Tamar Bowes found that 41 percent of Gen Zers are impulse buyers. Quality and value are of the utmost importance to this generation. They may be quick to switch brands if they believe they’re getting better overall value from a different company.
Millennial spending habits
Millennials are generally defined as the generation born between 1981 and 1996. This group is known for making financial decisions that are strikingly different from those that came before them.
Millennial spending habits include increased online shopping, a preference for experiences over material things and an openness to generic brands if the choice saves money.
Baby boomer spending habits
Baby boomers are those born between 1946 and 1964. This group is filled with people who are close to or already in their retirement years. In contrast to their parents, who were born in the Great Depression, boomers expect to have a fun retirement.
They’re looking forward to experiencing new places and trying new things. However, many baby boomers are facing retirement issues due to a lack of savings and mounting debt. Despite it all, baby boomer spending habits indicate that this generation holds more than 50 percent of the wealth in the United States.
Enhance your credit with Lexington Law Firm
American spending habits can fluctuate based on a person’s background, but credit scores impact all of us in many ways. At Lexington Law Firm, we can help you understand the nuances of credit. Get your free credit snapshot now to see your credit score and get a free credit assessment to help you get started.
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Supervising Attorney
Alexis Peacock was born in Santa Cruz, California and raised in Scottsdale, Arizona.
In 2013, she earned her Bachelor of Science in Criminal Justice and Criminology, graduating cum laude from Arizona State University. Ms. Peacock received her Juris Doctor from Arizona Summit Law School and graduated in 2016. Prior to joining Lexington Law Firm, Ms. Peacock worked in Criminal Defense as both a paralegal and practicing attorney. Ms. Peacock represented clients in criminal matters varying from minor traffic infractions to serious felony cases. Alexis is licensed to practice law in Arizona. She is located in the Phoenix office.
Welcome to the charming city of Springfield, where the Ozarks meet urban sophistication. With its picturesque landscapes, lively arts scene, and friendly community, Springfield offers a unique blend of natural beauty and city living. So whether you’re searching for the perfect apartment in Springfield or eyeing a cozy home for rent, you’ve come to the right place.
In this ApartmentGuide article, we’ll cut to the chase, breaking down the pros and cons of moving to Springfield. Let’s get started and see what awaits in this delightful city.
Pros of living in Springfield
1. Affordable cost of living
One of the major advantages of living in Springfield is the affordable cost of living. The average rent for apartments in Springfield, is between $775 and $927 in 2024. Residents can enjoy a comfortable lifestyle without breaking the bank, as housing, groceries, and other daily expenses are relatively budget-friendly. This makes Springfield an attractive option for individuals and families looking to stretch their dollars without sacrificing quality of life.
2. Rich cultural heritage
Springfield boasts a rich cultural heritage, with a strong emphasis on the arts, music, and history. The city is home to numerous art galleries, museums, and performance venues, providing ample opportunities for residents to immerse themselves in the local culture. From the Springfield Art Museum to the historic Gillioz Theatre, there’s no shortage of cultural experiences to enjoy in this vibrant community.
3. Outdoor recreational opportunities
For nature enthusiasts, Springfield offers a plethora of outdoor recreational opportunities. With its close proximity to the Ozark Mountains, residents can easily access hiking trails, fishing spots, and camping grounds. The city also features beautiful parks and green spaces. Such as Nathanael Greene/Close Memorial Park, where locals can enjoy picnics, sports, and leisurely strolls amidst scenic natural surroundings.
4. Diverse dining scene
Springfield is known for its diverse dining scene, offering a wide array of culinary options to suit every palate. From farm-to-table eateries and international cuisine to food trucks and local diners, residents can indulge in a variety of delicious dishes without having to travel far. The city’s food culture reflects its vibrant community, with a focus on fresh, locally-sourced ingredients and innovative culinary creations.
5. Strong sense of community
Residents of Springfield benefit from a strong sense of community, characterized by friendly neighbors, local events, and a welcoming atmosphere. The city’s close-knit neighborhoods and active community organizations foster a supportive environment where individuals can connect, collaborate, and contribute to the overall well-being of the community. Whether it’s volunteering at a local charity or attending a neighborhood block party, there are numerous ways to get involved and build meaningful relationships in Springfield.
6. Access to quality healthcare
Springfield is home to a number of reputable healthcare facilities and medical professionals, ensuring that residents have access to quality healthcare services. From hospitals and clinics to specialized treatment centers, the city’s healthcare infrastructure is well-equipped to meet the diverse needs of its population. This provides peace of mind for individuals, knowing that they can receive reliable medical care within their own community.
7. Thriving job market
With a diverse economy and a range of industries, Springfield offers a thriving job market with opportunities in healthcare, education, manufacturing, and technology. The city’s business-friendly environment and entrepreneurial spirit make it an attractive destination for professionals seeking career growth and stability. Whether it’s starting a new venture or joining an established company, residents can find fulfilling employment options in Springfield.
Cons of living in Springfield
1. Limited public transportation options
One of the challenges of living in Springfield is the limited public transportation options. The city’s public transit system is not as extensive as in larger metropolitan areas, which can pose difficulties for residents who rely on alternative modes of transportation. While efforts are being made to improve public transit, individuals may find it challenging to navigate the city without a personal vehicle.
2. Extreme weather conditions
Springfield experiences a wide range of weather conditions. Including hot summers, cold winters, and the occasional severe weather events such as tornadoes. While the changing seasons can be appealing to some, others may find it challenging to adapt to the extreme temperatures and weather fluctuations. It’s important for residents to be prepared for varying climate conditions and to take necessary precautions.
3. Limited cultural diversity
Despite its rich cultural heritage, Springfield has a relatively limited cultural diversity compared to larger cities. This can impact the availability of international cuisines, cultural events, and diverse perspectives within the community. Individuals seeking a more cosmopolitan environment with a wide range of cultural influences may find Springfield’s cultural landscape to be somewhat homogenous in comparison.
4. Traffic congestion
As the population of Springfield continues to grow, traffic congestion has become a concern for residents. The city’s road infrastructure is experiencing increased pressure, leading to traffic delays and congestion during peak hours. While efforts are underway to address these issues, individuals commuting within the city may encounter challenges related to traffic flow and transportation efficiency.
5. Limited nightlife options
For those seeking a vibrant nightlife scene, Springfield may offer limited options compared to larger urban centers. While the city has a variety of bars, pubs, and entertainment venues, the overall nightlife experience may not be as extensive or diverse as in metropolitan areas. Residents looking for a bustling nightlife with a wide range of entertainment choices may find Springfield’s offerings to be more subdued in comparison.
6. Educational funding challenges
Springfield faces challenges related to educational funding, which can impact the resources and opportunities available to students and educators. The city’s public school system, like many others, grapples with budget constraints and funding issues that may affect the quality of education and extracurricular programs. This is an important consideration for those who prioritize access to high-quality education.
7. Limited professional networking opportunities
While Springfield offers a thriving job market, individuals seeking extensive professional networking opportunities may find the city’s business community to be more limited. Residents may find the availability of industry-specific networking events, conferences, and professional development resources to be relatively constrained. This can impact individuals looking to expand their professional connections and advance their careers within their chosen fields.
Are you looking for ways to get paid to walk? Getting paid to walk is a side hustle with the benefits of getting daily exercise and even getting paid for it. There are tons of ways to get paid to walk including getting paid for steps, losing weight, and even picking up trash. I have…
Are you looking for ways to get paid to walk?
Getting paid to walk is a side hustle with the benefits of getting daily exercise and even getting paid for it. There are tons of ways to get paid to walk including getting paid for steps, losing weight, and even picking up trash.
I have personally been paid to walk, and it’s great!
How To Get Paid To Walk
Below are 19 ways to get paid to walk.
Recommended reading: 19 Ways To Get Paid To Workout
1. CashWalk
CashWalk is a free app that pays you to earn money just for running or walking outside or on a treadmill. You earn coins and can exchange them for gift cards to places like Amazon, Walmart, Apple, Starbucks, and more.
This pedometer app is designed to motivate you to achieve fitness goals and help build healthy exercise habits.
You won’t get rich with CashWalk, but it’s an easy way to make money by doing what you already do, which is walking.
You can sign up for CashWalk by clicking here. Also, you can get a free 100 points by using the referral code ESPU5.
2. Sweatcoin
Sweatcoin is a free app that helps motivate you to walk by rewarding your daily steps. This pedometer app only counts outdoor steps right from your phone (such as your iPhone or Android device), so if you’re a treadmill walker, those steps will not count in the app.
Once you accumulate enough coins, you can redeem them for products or donate to charity. The products that can be redeemed change regularly. You may see things such as Amazon credits, electronics, and other popular products. If you’re feeling generous, you can donate your earnings to charities like Save The Children, The African Wildlife Foundation, or Cancer Research.
3. Walk dogs
Rover is an app that connects you with pet owners who need help with pet sitting, dog walking, and drop-in visits. If you’re an animal lover, this is a great side hustle to try.
I was a Rover dog walker for several pet owners and it’s still one of my favorite side hustles to date. The app works on both Android and iOS devices.
How much money you earn on the Rover app varies on how many pets you’re walking, your experience, and what you set your rates at. Some pet sitters make $40,000 a year, while the top dog walkers in the field earn $100,000+. You can expect to earn between $15 and $25 per hour on Rover, with that rate being more depending on how many dogs you’re walking at one time.
Finding jobs is relatively easy because there are so many pet parents out there looking for a pet sitter or someone to walk their dog.
Click here to sign up for Rover.
Learn more at 7 Best Dog Walking Apps To Make Extra Money (another popular pet walking app that you can learn about is Wag!).
4. Get paid to pick up trash
A great way to help clean the environment, get exercise in, and get paid is by picking up trash. Many businesses want their property and parking lots to be clean so customers are shopping at a clean property.
Getting paid to pick up trash is a small business that you can start entirely on your own. Picking up trash can pay between $30-$50 an hour. There is a ton of trash to pick up in the world. Tools you will need include a broom, dustpan, and grabber tools.
You can learn more at Get Paid $30 – $50 Per Hour To Pick Up Trash.
5. Stepbet
Stepbet is a popular fitness app that pays you for walking. The app is user-friendly and even lets you connect your fitness tracker (such as your Fitbit, Google Fit, Samsung Health, or Apple Watch). Stepbet is a great way to stay motivated to complete your daily step goal and even get paid for doing this.
This is how the app works:
You choose a game to set your step goals
Bet a certain amount of money into the pot to join the game
If you meet the weekly step goal, you can split the pot with others who also completed their goals and get your bet back plus more.
6. HealthyWage
HealthyWage is a popular fitness app that pays you to lose weight. To get started, go to HealthyWage and enter how much weight you want to lose, how long you’ll have to complete the weight loss goal, and how much money you want to bet.
Let’s say I wanted to lose 30 pounds in 9 months or less and I bet $60 of my own money. The website shows my prize range would be between $588 and $1,116.
HealthyWage has weekly weigh-ins and support from other people who are also trying to lose weight. The purpose of HealthyWage is to motivate you to lose weight by using a financial incentive, which makes it more motivating to complete your weight loss goal.
7. DietBet
DietBet is a fun and unique app that makes fitness fun and motivating. DietBet works by you choosing a game/challenge to complete. For example, there are current weight loss challenges where you bet $40 and have to lose 10% of your body weight within 6 months to win the shared pot of money.
This is how it works:
You get started by choosing a challenge and betting money into the pot
Two days before the challenge begins, you must weigh in which involves taking two photos (one of you standing on the scale with lightweight clothing, and the second photo of the scale and weight)
The challenge will share how much weight you have to lose to win the pot of money at the end of the challenge.
8. Fit For Bucks
Fit For Bucks is an app that lets you earn rewards for being active. You can earn points by doing things like walking to the grocery store, hitting the gym, going for a hike, dancing, and more.
Rewards you can redeem include things like coffee, fitness classes, massages, haircuts, wine, and more. Using this app is a fantastic way to stay motivated to get more movement in while also getting rewarded for your hard work.
9. Charity Miles
Charity Miles is the app for you if you love giving back and being generous. Instead of giving rewards to you, the app lets you give your rewards to a charity of your choice. Every mile you walk earns a credit to be used as a donation to a charity.
One of my favorite charities, Save The Children, is on Charity Miles. So my daily walking that I already do helps me donate more money to my charity of choice.
10. Guided walking tours
If you’re an extrovert and have knowledge about your local town, you may want to become a walking tour guide. As a guided walking tour operator, you can create your own unique walking route and showcase special landmarks and sites to tourists. You must have in-depth knowledge of the area and provide excellent customer service.
I recommend researching what similar tours are charging to get an idea of what you should charge. You should also think about factors such as the duration of the tour, the experience you have, and any additional services you’ll include when deciding how much the walking tour will cost.
Having a website and/or social presence for your tour company is a great way to get new customers interested in your tours. Network with local hotels, travel websites, and tourism organizations to promote your tours. You may even want to offer a special discount or promotion to attract new customers.
11. Evidation
Evidation is an app that lets you earn points and rewards for actions like walking, sleeping, and more. Participating in this app helps contribute to research and new health findings that will benefit everyone.
For example, one of the current programs in the Evidation app gives you 300 points for joining a program focused on the flu. The app monitors your activity and can alert you when it sees a change that suggests you may be feeling under the weather.
You can connect all kinds of fitness electronics to the Evidation app, including but not limited to Fitbit, Garmin, Google Fit, and Dexcom.
12. MyWalgreens (Walgreens Balance Rewards)
MyWalgreens is a program run by Walgreens with the purpose of getting people to make healthier decisions.
You can earn points in the program by walking and tracking other fitness activities. You can even earn points for tracking your blood pressure, blood glucose, sleep, and other health markers.
13. Gigwalk
Gigwalk is an app that connects gig workers with quick tasks like going to a store, reviewing product displays, checking prices, availability of products, and conditions. You get to choose which gigs you choose and get to decide your schedule and how often you work.
Here’s how Gigwalk works:
First, you download the app on your phone.
Then, you look for gigs nearby.
Choose a gig that you like.
After you finish the job, you get paid.
Money is sent directly to your PayPal account and each gig pays differently. It typically can range anywhere from $3 to over $100 – the time to complete a gig can vary from 5 minutes to a few hours.
14. Runtopia
Runtopia pays you to get fit by providing a motivational incentive to get moving.
The app has benefits like letting you record activities with GPS, data analysis to improve your performance, connecting with friends, and getting rewarded for various activities.
15. PK Rewards
PK Rewards is an app that rewards you for tracking all kinds of workouts. Your workouts get converted into coins which can be redeemed for cool prizes from brands like Lululemon, Nike, Amazon, and more. You earn coins based on the effort you put in.
Workouts can include pretty much anything from going to the gym, cycling, dancing, walking, and more. You can set personal goals in the app, compete with friends, and track your progress all within the app. You can even see your effort over time as you use the app.
16. Instacart
Instacart is a platform that connects customers with Instacart Shoppers who grocery shop and deliver food to customers. This job requires a lot of walking and physical activity and allows you to control your schedule and how often you work.
Signing up to become an Instacart Shopper is straightforward. Download the Instacart Shopper app and apply as a Shopper. Once your application is accepted, you can use the app to find orders, pick an order you like, and go to the store and start grocery shopping for the customer. When you’re done grocery shopping, deliver the groceries to the customer.
You earn money with each delivery and the more you deliver, the more job opportunities you’ll have available. Giving great service to your customers can lead to better tips, so customer service is important.
You can click here to sign up to be an Instacart Shopper.
Learn more at Instacart Shopper Review: How much do Instacart Shoppers earn?
17. DoorDash
Working for DoorDash is an active gig job that requires you to deliver restaurant meals to customers. This side hustle can require a lot of walking and physical activity depending on how you’re delivering food. You may decide to deliver food by car or by bike.
The benefits of working for DoorDash include choosing the hours you work and deciding where you want to work. The app is user-friendly and allows you to take orders, where to go, and how to get there. Each delivery earns between $2-$10, plus tips.
Please click here to sign up for DoorDash.
18. Distribute flyers
A side hustle that requires a lot of walking is getting paid to distribute flyers. To find jobs distributing flyers, check online job platforms like Indeed or Craigslist, and also search for jobs in newspapers, and community bulletin boards. Search for jobs using the keywords “flyer distribution”, or “leaflet distribution”.
You can also create a profile on gig platforms like TaskRabbit, Gigwalk, or Thumbtack and post or search for flyer distribution jobs. Make sure to check local events, trade shows, and festivals as these events always need promotional material to be distributed.
Before accepting any jobs, make sure to clarify pay rates and the schedule from the employer. This job is likely going to take a lot of daily steps and physical activity.
19. Mystery shopping
Mystery shopping is a tool companies use to learn ways to improve their customer experience. Mystery shoppers can get jobs in person, online, or on the phone. Jobs are different and may require you to buy something, sit down at a restaurant and eat, or even get your hair done in a salon. If you are required to buy something, make sure to keep your receipts as you will need them to complete your questionnaire.
My sister was a mystery shopper and I got to go with her on one of her gigs. We got to visit a restaurant for free as long as she gave her honest opinion after. Mystery shopping also involves going to stores such as Best Buy, salons, car dealerships, movie theaters, makeup counters, and more.
BestMark is a popular mystery shopping website that connects you with opportunities to earn money while helping companies improve their customer service.
Recommended reading: How To Become A Mystery Shopper
Frequently Asked Questions
Below are answers to common questions about ways to get paid to walk.
Can I get paid for walking?
There are tons of ways to get paid for walking including via fitness apps like SweatCoin and CashWalk that reward you for meeting daily step goals or participating in walking challenges. Rewards include things like gift cards, discounts, cash, and free stuff.
Besides using fitness apps that reward you for walking, you can also make money walking by working as a gig worker for TaskRabbit and DoorDash. These jobs include tasks like delivering food, running errands, and other jobs that require walking.
One of my favorite ways to make money walking is working as a Rover dog walker. If you love spending time with animals, you should consider becoming a dog walker.
What is the best app that pays you to walk?
Many activity tracker apps pay you to walk and each has its pros and cons. The most popular walking apps include CashWalk, Sweatcoin, Charity Miles, and StepBet. Each of these apps is user-friendly, easy to use, and rewards people for their movement. You get to choose from many rewards including gift cards, fitness gear, or donating your money to the chosen charity of your choice.
Is Sweatcoin real money?
Sweatcoin is not real money, but instead digital currency used in the Sweatcoin app. Sweatcoin users earn Sweatcoins based on how much they walk per day. As you take steps, digital coins are accumulated and can be redeemed for different rewards in the app like products, services, and discounts.
Can you earn money with a Fitbit?
While you can’t earn any rewards or money on the Fitbit app, you can connect your Fitbit to fitness apps that reward you for daily movement. Programs and apps like MyWalgreens, StepBet, and others allow you to easily connect your Fitbit to the app.
Why do apps pay you to walk?
Apps pay users to walk because they make money from advertisements when users use their apps.
19 Ways To Get Paid To Walk – Summary
I hope you enjoyed this article on how to get paid to walk.
There are many ways to make extra money and get free stuff by walking, dancing, cycling, sleeping, and other health-related activities. Take advantage of these free apps and keep your motivation up by earning points and rewards toward free things like gift cards, fitness classes, food, and more.
The walking side hustles above have health benefits and even mental health positives, plus you may be able to earn an income, cash rewards, or even money for charity donations.
Have you ever tried any of these side hustles or walking apps that pay you for steps?
A 401(k) plan is a retirement savings plan in which employees contribute to a tax-deferred account via paycheck deductions (and often with an employer match). A pension plan is a different kind of retirement savings plan in which a company sets money aside to give to future retirees.
Over the past few decades, defined-contribution plans like the 401(k) have steadily replaced pension plans as the private-sector, employer-sponsored retirement plan of choice. While both a 401(k) plan and a pension plan are employer-sponsored retirement plans, there are some significant differences between the two.
Here’s what you need to know about a 401(k) vs. pension.
What Is the Difference Between a Pension and a 401(k)?
The main distinction between a 401(k) vs. a pension plan is that pension plans are largely employer driven, while 401(k)s are employee driven.
These are some of the key differences between the two plans.
Pension
401(k)
Funding
Typically funded by employers
Funded mainly by the employee; employer may offer a partial matching contribution
Contributions
No more than $275,000 in 2024 or 100% of employee’s average compensation for the highest 3 consecutive years
$23,000 ($30,500 for those 50 and up) for 2024. Contributions from employee and employer cannot exceed $69,000 (or $76,500 for those 50 and up) in 2024
Investments
Employers choose the investments for the plan
Employees choose the investments from a list of options
Value of the Plan
Set amount designed to be guaranteed for life
Determined by how much the employee contributes, the investments they make, and the performance of the investments
Funding
Employees typically fund 401(k) plans through regular contributions from their paychecks to help save for retirement, while employers typically fund pension plans.
Investments
Employees can choose investments (from several options) in their 401(k). Employers choose the investments that fund a pension plan.
Value
The value of a 401(k) plan at retirement depends on how much the employee has saved, in addition to the performance of the investments over time. Pensions, on the other hand, are designed to guarantee an employee a set amount of income for life. 💡 Quick Tip: The advantage of opening a Roth IRA and a tax-deferred account like a 401(k) or traditional IRA is that by the time you retire, you’ll have tax-free income from your Roth, and taxable income from the tax-deferred account. This can help with tax planning.
Pension Plan Overview
A pension plan is a type of retirement savings plan where an employer contributes funds to an investment account on behalf of their employees. The earnings are paid out to the employees once they retire.
Types of Pension Plans
There are two common types of pension plans:
• Defined-benefit pension plans, also known as traditional pension plans, are the most common type of pension plans. These employer-sponsored retirement investment plans are designed to guarantee the employee will receive a set benefit amount upon retirement (usually calculated with set parameters, i.e. employee earnings and years of service). Regardless of how the investment pool performs, the employer guarantees pension payments to the retired employee. If the plan assets aren’t enough to pay out to the employee, the employer is typically on the hook for the rest of the money.
According to the IRS, contributions to a defined-benefit pension plan cannot exceed 100% of the employee’s average compensation for the highest three consecutive calendar years of their employment or $265,000 for tax year 2023 and $275,000 for 2024.
• Defined-contribution pension plans are employer-sponsored retirement plans to which employers make plan contributions on their employee’s behalf and the benefit the employee receives is based solely on the performance of the investment pool. Meaning: There is no guarantee of a set monthly payout.
Like 401(k) plans, employees can contribute to these plans, and in some cases, employers match the contribution made by the employee. Unlike defined-benefit pension plans, however, the employee is not guaranteed a certain amount of money upon retirement. Instead, the employee receives a payout based on the performance of the investments in the fund.
Recommended: What Is a Money Purchase Pension Plan (MPPP)?
When it comes to pension plan withdrawals, employees who take out funds before the age of 59 ½ must pay a 10% early withdrawal penalty as well as standard income taxes. This is similar to the penalties and taxes associated with early withdrawal from a traditional 401(k) plan.
Pros and Cons
There are benefits to and drawbacks of pension plans. It’s important to understand both in order to maximize your participation in the plan.
Advantages of a pension plan include:
Funded by employers
For employees, a pension plan is retirement income from your employer. In most cases, an employee does not need to contribute to a defined-benefit pension plan in order to get consistent payouts upon retirement.
Higher contribution limits
When compared to 401(k)s, defined-contribution pension plans have significantly higher contribution limits and, as such, present an opportunity to set aside more money for retirement.
A set amount in retirement
A pension plan typically provides employees with regular fixed payments in retirement,usually for life.
Disadvantages of a pension plan include:
Lack of control
Employees can’t choose how the money in a pension plan is invested. If the investments don’t pan out, the plan could struggle to pay out the funds.
Vesting
Employees may need to work for the employer for a set number of years to become fully vested in the plan. If you leave the company before then, you might end up forfeiting the pension funds. Find out what the vesting schedule is for your pension plan.
Earnings and years employed
How much an employee gets in retirement with a pension plan generally depends on their salary and how long they work for the employer.
401(k) Overview
A traditional 401(k) plan is a tax-advantaged defined-contribution plan where workers contribute pre-tax dollars to the investment account via automatic payroll deductions. These contributions are sometimes fully or partially matched by their employers, and withdrawals are taxed at the participant’s marginal tax rate.
With a 401(k), employees and employers may both make contributions to the account (up to a certain IRS-established limit), but employees are responsible for selecting the specific investments. They can typically choose from offerings from the employer, which may include a mixture of stocks and bonds that vary in levels of risk depending on when they plan to retire.
Recommended: 401(a) vs 401(k): What’s the Difference?
Contribution Limits and Withdrawals
To account for inflation, the IRS periodically adjusts the maximum amount an employer or employee can contribute to a 401(k) plan.
• For 2024, annual employee contributions can’t exceed $23,000 for workers under 50, and $30,500 for workers 50 and older (this includes a $7,500 catch-up contribution). The total annual contribution by employer and employee in 2024 is capped at $69,000 for workers under 50, and $76,500 for workers 50 and over.
• For 2023, annual employee contributions can’t exceed $22,500 for workers under 50, and $30,000 for workers 50 and older (this includes a $7,500 catch-up contribution). The total annual contribution paid by employer and employee in 2023 is capped at $66,000 for workers under 50, and $73,500 for workers 50 and over.
Some plans allow employees to make additional after-tax contributions to their 401(k) plan, within the contribution limits outlined above.
• Money can be withdrawn from a 401(k) in retirement without penalties. But taxes will be owed on the funds withdrawn. The IRS considers the removal of 401(k) funds before the age of 59 ½ an “early withdrawal.” The penalty for removing funds before that time is an additional tax of 10% of the withdrawal amount (there are exceptions, notably a hardship distribution, where plan participants can withdraw funds early to cover “immediate and heavy financial need”).
Pros and Cons
While a 401(k) plan might not offer as clearly-defined a retirement savings picture as a pension plan, it still comes with a number of upsides for participants who want a more active role in their retirement investments.
Advantages of a 401(k) include:
Self-directed investment opportunities
Unlike employer-directed pension plans, in which the employee has no say in the investment strategy, 401(k) plans offer participants more control over how much they invest and where the money goes (within parameters set by their employer). Plans typically offer a selection of investment options, including mutual funds, individual stocks and bonds, exchange traded funds (ETFs).
Tax advantages
Contributions to a 401(k) come from pre-tax dollars through payroll deductions, reducing the gross income of the participant, which may allow them to pay less in income taxes. Also, 401(k) contributions and earnings in the plan may grow tax-deferred.
Employer matching
Many 401(k) plan participants are eligible for an employer match up to a certain amount, which essentially means free money.
Disadvantages of a 401(k) include:
No guaranteed amount in retirement
How much you have in your 401(k) by retirement depends on how much you contributed to the plan, whether your employer offered matching funds, and how the investments you chose fared.
Contributions are capped
The amount you can contribute to a 401(k) annually is capped by the IRS, as described above.
Less stability
How the market performs generally affects the performance of 401(k) investments. That could make it difficult to know how much money you’ll have for retirement, which could complicate retirement planning. 💡 Quick Tip: Before opening an investment account, know your investment objectives, time horizon, and risk tolerance. These fundamentals will help keep your strategy on track and with the aim of meeting your goals.
Which Is Better, a 401(k) or a Pension Plan?
When considering a 401(k) vs. pension, most people prefer the certainty that comes with a pension plan.
But for those who seek more control over their retirement savings and more investment vehicles to choose from, a 401(k) plan could be the more advantageous option.
In the case of the 401(k), it really depends on how well the investments perform over time. Without the safety net of guaranteed income that comes with a pension plan, a poorly performing 401(k) plan has a direct effect on a retiree’s nest egg.
Did 401(k)s Replace Pension Plans?
The percentage of private sector employees whose only retirement account is a defined benefit pension plan is just 4% today, versus 60% in the early 1980s. The majority of private sector companies stopped funding traditional pension plans in the last few decades, freezing the plans and shifting to defined-contribution plans like 401(k)s.
When a pension fund isn’t full enough to distribute promised payouts, the company still needs to distribute that money to plan participants. In several instances in recent decades, pension fund deficits for large enterprises like airlines and steel makers were so enormous they required government bailouts.
To avoid situations like this, many of today’s employers have shifted the burden of retirement funding to their workers.
What Happens to a 401(k) or Pension Plan If You Leave Your Job?
With a 401(k), if you leave your job, you can take your 401(k) with you by rolling it over to your new employer’s 401(k) plan or into an IRA. The process is fairly easy to do.
If you leave your job and you have a pension plan, however, the plan generally stays with your employer. You’ll need to keep track of it through the years and then apply in retirement to begin receiving your money.
The Takeaway
Pension plans are employer-sponsored, employer-funded retirement plans that are designed to guarantee a set income to participants for life. On the other hand, 401(k) accounts are employer-sponsored retirement plans through which employees make their own investment decisions and, in some cases, receive an employer match in funds. The post-retirement payout varies depending on market fluctuations.
While pension plans are far more rare today than they were in the past, if you have worked at a company that offers one, that money will still come to you after retirement even if you change jobs, as long as you stayed with the company long enough for your benefits to vest.
Some people have both pensions and 401(k) plans, but there are also other ways to take an active role in saving for retirement. An IRA is an alternative to 401(k) and pension plans that allows anyone to open a retirement savings account. IRAs have lower contribution limits but a larger selection of investments to choose from. And it’s possible to have an IRA in addition to a 401(k) or pension plan.
Ready to invest for your retirement? It’s easy to get started when you open a traditional or Roth IRA with SoFi. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).
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FAQ
Can you have both a 401(k) and a pension plan?
Yes. An individual can have both a pension plan and a 401(k) plan, though the two plans may not be from the same employer. If an employee leaves a company after becoming eligible for a pension and opens a 401(k) with a new employer, their previous employer will still typically maintain their pension. An employee can access the pension funds by applying for them in retirement.
How much should I put in my 401k if I have a pension?
If you have both a pension and a 401(k), it’s wise to contribute as much as you can to your 401(k) up to the annual contribution limit. While a pension can help supplement your retirement income, it may not be enough to cover all your retirement expenses, so contributing to your 401(k) can help fill the gap. One rule of thumb says to contribute at least 10% of your salary to a 401(k) if possible to help ensure that you’ll have enough savings for retirement.
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Welcome to the charming city of Tallahassee, where the sun shines bright, and the Southern hospitality is always in full swing. With its rich history, diverse culture, and stunning natural beauty, Tallahassee offers a unique blend of urban amenities and outdoor adventures. So whether you’re searching for the perfect apartment in Tallahassee or a cozy home for rent, you’ve come to the right place.
In this ApartmentGuide article, we’ll cut to the chase, breaking down the pros and cons of moving to Tallahassee. Let’s get started and see what awaits in the capital city of Florida.
Pros of living in Tallahassee
1. Abundant outdoor activities
Tallahassee is a haven for outdoor enthusiasts, with its proximity to numerous state parks, nature reserves, and the Apalachicola National Forest. Residents can enjoy hiking, biking, birdwatching, and kayaking in the picturesque surroundings of the city. The mild climate also allows for year-round outdoor recreation, making it an ideal destination for nature lovers.
2. Rich cultural heritage
Tallahassee boasts a rich cultural heritage, evident in its historic architecture, museums, and art galleries. The city is home to the Museum of Florida History, showcasing the state’s diverse history, and the Tallahassee Museum, which offers a glimpse into the region’s natural and cultural heritage. Residents can also explore the vibrant arts scene through local galleries, theaters, and music venues, providing a deep appreciation for the city’s cultural offerings.
3. Affordable cost of living
Compared to other cities in Florida, Tallahassee offers a more affordable cost of living, making it an attractive option for those seeking a balance between quality of life and expenses. The average rent for apartments in Tallahassee, is between $1,035 and $1,399 in 2024. Housing, groceries, and utilities are relatively affordable, allowing residents to enjoy a comfortable lifestyle without breaking the bank.
4. Strong sense of community
Tallahassee fosters a strong sense of community, with its friendly and welcoming atmosphere. Residents can engage in various community events, farmers’ markets, and local gatherings, creating a tight-knit and supportive environment. The city’s emphasis on community involvement and volunteerism further enhances the overall sense of belonging for its residents.
5. Educational opportunities
As the capital of Florida, Tallahassee is home to several prestigious educational institutions, including Florida State University and Florida A&M University. This provides residents with access to a wide range of academic and cultural resources, as well as opportunities for lifelong learning and personal growth.
6. Diverse culinary scene
Tallahassee offers a diverse culinary scene, with an array of restaurants, cafes, and food trucks serving up a variety of cuisines. From Southern comfort food to international flavors, residents can indulge in a culinary adventure without leaving the city. The local farmers’ markets also provide access to fresh, locally-sourced ingredients, contributing to the city’s vibrant food culture.
7. Proximity to beaches
Although not directly on the coast, Tallahassee is within driving distance of several stunning beaches along the Gulf of Mexico. Residents can take day trips to enjoy the sun, sand, and surf at popular spots like St. George Island and Shell Point Beach, making the city an appealing location for beach lovers.
Cons of living in Tallahassee
1. Limited public transportation options
Tallahassee’s public transportation system is relatively limited, with fewer options compared to larger metropolitan areas. With a transit score of 30, this can pose challenges for residents who rely on public transit for their daily commute or prefer not to drive. Potentially leading to transportation issues and longer travel times.
2. Humid climate
Tallahassee experiences a humid subtropical climate, characterized by hot, humid summers and mild winters. The high humidity levels can be uncomfortable for some residents, especially during the summer months, and may require adjustments in daily routines and activities to cope with the weather.
3. Limited job market
While Tallahassee is the state capital and home to government institutions and universities, the job market may be limited in certain industries. Residents seeking employment opportunities outside of these sectors may find fewer options available, requiring careful consideration when planning their career paths.
4. Seasonal weather challenges
Tallahassee is susceptible to seasonal weather challenges, including the potential for hurricanes and tropical storms during the summer and fall months. Residents need to be prepared for inclement weather and follow safety protocols, which can be a concern for some individuals.
5. Traffic congestion
As the city continues to grow, traffic congestion has become a common issue in certain areas of Tallahassee. Commuters may experience delays during peak hours, leading to longer commute times and potential frustration for those navigating the city’s roadways.
6. Limited entertainment options
While Tallahassee offers cultural and outdoor attractions, some residents may find the entertainment options to be more limited compared to larger cities. The nightlife and live music scene, in particular, may not be as extensive as in other urban centers, requiring residents to seek out alternative forms of entertainment.
7. Limited diversity in shopping options
Residents of Tallahassee may find that the city has a more limited selection of shopping options compared to larger metropolitan areas. While there are shopping centers and malls, the variety of stores and brands may not be as extensive. Potentially impacting the shopping experience for some individuals.
Building equity is one of the biggest advantages of owning a home. With a home equity loan or home equity line of credit (HELOC), you can take advantage of that equity to finance home improvements, consolidate debt or pay for other big expenses.
While getting home equity financing is a fairly simple process, it’s important to review the details before applying. Lenders have standard criteria that homeowners must follow to qualify for either loan, as well as their own specific requirements. Make sure to compare different lenders and take a look at the requirements before applying.
Below, we’ll cover the general criteria for home equity loans and HELOCs as well as more on how to choose the right financing option for you.
How do home equity loans and HELOCs work?
Home equity loans and HELOCs are secured loans that act as second mortgages. Both use your property as collateral for the debt.
With a home equity loan, you get access to a lump sum of cash upfront and pay it back over a period of five to 30 years at a fixed interest rate.
A HELOC is an ongoing line of credit from which you can withdraw funds as needed. With a HELOC, you have the draw period and the repayment period. During the draw period (typically 10 years), you can borrow money on a revolving basis, up to a limit, and you’ll typically pay interest only on what you’ve borrowed. During the repayment period (often 20 years), you’ll pay back both the principal and interest on the loan.
Both are good options for homeowners in need of access to cash, but there’s always a risk when you borrow against your home. If you default on your payments, you run the risk of losing your property.
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Requirements to borrow home equity
The requirements to qualify for either a home equity loan or HELOC are similar. Although each lender has its own qualifications, the following checklist provides general criteria to help you get started.
1. Have at least 15% to 20% equity in your home
Home equity refers to the ownership stake in your home. Your equity is calculated by the amount of your down payment together with all the mortgage payments you’ve already made. With each mortgage payment you make, the less you owe on your home and the more equity you have. If an appraisal increase the value of the home, that will also yield more equity.
Most lenders require you to have at least 15% to 20% equity in your home to take out a home equity loan or HELOC. If you made a 20% down payment when you purchased your property, you’ll have already met the requirement to borrow against your equity.
2. Your loan-to-value ratio shouldn’t exceed 80%
Your loan-to-value ratio, or LTV, is another factor lenders consider when deciding whether to approve you for a home equity loan or HELOC. Your LTV is determined by dividing your current mortgage balance by the home’s appraised value. Having a lower LTV means less risk for mortgage lenders.
If your home is worth $300,000 and your loan balance is $200,000, here’s how you’d calculate your LTV:
$200,000 / $300,000 = 0.67
Your LTV is expressed as a percentage. In this example, your LTV is 67%, meaning you have 33% equity in your home.
While requirements can vary across lenders, the rule of thumb is that your LTV shouldn’t exceed 80%. Making a higher down payment and paying down your mortgage are two ways to lower your LTV.
3. Have a credit score in the mid-600s or higher
Most lenders want to see a minimum credit score of 620 in order to qualify for a home equity loan or HELOC.
Lenders use your credit score to determine the likelihood that you’ll repay the loan on time, so a better score will improve your chances of getting approved for a loan with better terms. A higher credit score of 700 or more will make you eligible for a loan at a lower interest rate, which will save you a substantial amount of money over the life of the loan.
4. Your debt level shouldn’t exceed 43%
Your debt level is determined by your debt-to-income ratio, which is your monthly debt payments divided by your gross monthly income. Your DTI ratio helps lenders determine if you’re capable of paying back your loan on time and of making consistent monthly payments.
To calculate DTI, lenders tally the total monthly payment for the house — mortgage principal, interest, taxes, homeowners insurance, direct liens and homeowner association dues — and any other outstanding debt. That total debt is then divided by your monthly gross income to get your DTI ratio.
Some lenders prefer that your monthly debts don’t exceed 36% of your gross monthly income, but many others are willing to go as high as 43%. If your DTI ratio is higher than 43%, consider paying down your debts first to lower your DTI.
5. Have sufficient income
Lenders want to make sure that you can pay back the loan, so they’ll lend only to those who can prove sufficient income. If you don’t have traditional employment or a stable source of income, you may have trouble qualifying for a home equity loan or HELOC.
How much can you borrow with a home equity loan or HELOC?
The more equity you have in your home, the more you’re eligible to borrow. In general, you can borrow around 80% to 85% of the equity in your home, minus your current mortgage balance.
You can determine how much money you’ll be able to obtain from a home equity loan by starting with the current value of the home. If, for example, your home is worth $300,000 and a bank lender allows you to borrow up to 80% of the value of your home, you simply multiply the two values to get the maximum amount you can borrow, which is $240,000.
$300,000 x 0.8 = $240,000
But if you have a balance on your mortgage of $200,000, you need to subtract it from the $240,000 maximum the bank will let you borrow.
$240,000 – $200,000 = $40,000
That means you can borrow $40,000 for a home equity loan or HELOC.
Should you get a home equity loan or a HELOC?
Home equity loans and HELOCs can be used for similar purposes, but they have some important differences. Neither product is better than the other, so consider your own expenses and goals.
If you need to fund a single project with a set cost, a home equity loan may be the better option, especially if the predictability of a fixed interest rate and monthly payment appeals to you. A HELOC may make more sense if you want flexible access to funds over a long period of time rather than an upfront sum of cash.
You should get a HELOC if:
You need access to credit for an extended period of time. HELOCs have a draw period that typically last five to 10 years.
You need more time to repay the loan amount. The repayment period for HELOCs ranges from 10 to 20 years.
You aren’t sure how much money you’ll need. HELOCs give you the flexibility to withdraw money in installments and not all at once. During the draw period, you can borrow up to a limit as many times as you like, and only pay interest on what you borrow. This makes HELOCs a good option for managing variable or unpredictable costs.
You should get a home equity loan if:
Your want a predictable monthly repayment schedule. Unlike variable-rate HELOCs, home equity loans have fixed interest rates, making it relatively easy to factor into your monthly budget.
You have a specific expense in mind. You receive 100% of the funds from a home equity loan upfront, which can be useful if you need a set amount of cash to cover a home improvement project, pay off high-interest debt or another need.
Alternatives to home equity loans and HELOCs
A home equity loan or HELOC can be a good way to fund large expenses, but there are other financing options that may be a better fit for your situation. Some alternatives you may want to consider include:
A cash-out refinance. With a cash-out refinance, you are cashing out the equity you’ve built in your home over the years. You replace your existing mortgage with a new, larger one and pocket the difference as cash. The money you borrow is rolled into your new mortgage, so you’ll have only one monthly payment. A cash-out refinance is a good option if you can get a better rate than the one on your existing mortgage.
A personal loan. If you need to borrow only a small amount of money, a personal loan might be a better fit than a home equity loan or HELOC. The interest rate will typically be higher and the loan term shorter, but it’s less risky because it’s an unsecured loan. Plus, you won’t have to go through a home appraisal or pay closing costs.
A balance transfer credit card. If the main reason you’re looking to take out a loan is to consolidate other high-interest debt, balance transfer credit cards let you combine your debts into one card that has a long 0% APR introductory period. If you can pay off the debt before the 0% introductory period ends, you’ll get rid of your debt faster. Just be sure to plan ahead carefully: If you’re still carrying a balance by the end of the introductory period, you’ll be charged the regular credit card APR, which can be high.
The bottom line
A home equity loan and HELOC are two ways you can tap into the equity of your home. To qualify for either loan with reasonable terms, you should have at least 15% to 20% equity in your home, a LTV ratio of 80% or lower, a credit score of at least 620 (the higher, the better) and a DTI ratio no higher than 43%.
Though specific qualifications vary between lenders, make sure you have a reliable payment history and source of income to be eligible for a home equity loan or HELOC.
FAQs
Some lenders will provide a home equity loan or HELOC if you don’t have a job or are retired, but instead have regular income from a retirement account such as a pension. The income can also come from a spouse or partner’s employer, government assistance or alimony.
Lenders are typically seeking at least 15% to 20% equity in your home in order to qualify for a home equity loan or HELOC. However, some lenders will allow you to borrow with less equity.
Minimum credit scores vary from lender to lender, but most require you to have at least a 620 credit score. You’ll have a better chance of qualifying and getting access to lower interest rates if your credit score is 700 or above.
You can improve your credit score before you apply for a home equity loan by making payments on time, paying down the amount that’s owed on credit cards and avoiding taking out any new loans or making any major purchases.
A cup and handle pattern is something identified by stock traders or investors analyzing data related to certain securities. Traders analyzing stock charts can identify a cup and handle pattern, which comprises a period of falling values followed by a “breakout,” and use it to help inform their trading decisions.
The cup and handle pattern is one of many that investors may identify and use to help make investing decisions.
What Is a Cup and Handle Pattern?
The cup and handle security trading pattern is a bullish continuation pattern used in technical analysis. When the pattern appears on a stock chart, it shows a period of price consolidation followed by a price breakout. The pattern is called cup and handle because it has two distinct parts: the cup and the handle.
The cup pattern forms after an advance and looks like a bowl with a round bottom. It forms after a price advance. After that pattern forms, a “handle” forms to the right of the cup within a trading range. Finally, there is a breakout above the range of the handle, showing a bullish continuation of the prior advance.
Stock broker William O’Neil identified the cup and handle stock pattern and introduced it in his 1988 book, How to Make Money in Stocks.
💡 Quick Tip: When you’re actively investing in stocks, it’s important to ask what types of fees you might have to pay. For example, brokers may charge a flat fee for trading stocks, or require some commission for every trade. Taking the time to manage investment costs can be beneficial over the long term.
How the Cup and Handle Works
The cup-and-handle candlestick pattern starts with the formation of the “cup,” which looks like a bowl. The two sides of the cup are not always the same height but in a perfect scenario they would be. Once the cup forms, the stock price pulls back, forming a “handle” out to the right of the cup. The handle shows price consolidation happening before a price breakout occurs.
The handle is smaller than the cup and generally doesn’t retrace more than ⅓ of the cup’s advance, staying in the upper part of the cup range. It can also form a triangle shape. If the handle forms at the bottom price range of the cup, the pattern may indicate that this is not a good time to trade. It may take six months or longer for the cup pattern to form, but the handle forms much faster, ideally within four weeks.
The entire pattern can also form within minutes or days. Technical analysts watching the cup-and-handle pattern try to buy when the price breaks out from the handle. This is marked by when the price moves above the old resistance level, which is the top of the right side of the cup. The more volume in the breakout the stronger the buy signal.
To estimate the price target the stock might hit after the breakout, a trader would measure the distance from the bottom of the cup to the top of the right side of the cup and then add that number to the buy signal point. If the left and right sides of the cup are different heights, the smaller side would give a more conservative price target, and the taller would be a more aggressive target.
What Does a Cup and Handle Pattern Tell Traders?
The cup-and-handle is a candlestick pattern that indicates a cup-shaped price consolidation. This involves a downward price movement, a stabilization period, then a price increase of about the same amount as the downward movement.
This is followed by a sideways pullback between the high and low of the cup shape, forming the handle. Then, a price breakout indicates increasing trade volume. However, as with any trading pattern, a cup-and-handle pattern does not guarantee the stock price will continue on a bullish trajectory, it’s just a trading indicator.
The cup and handle is a bullish pattern that can show a continuation or a reversal from a bearish trend into a bullish trend. Either way it indicates that the stock price will likely rise following the pattern.
Example of a Cup and Handle Pattern
An example of a cup and handle pattern would be if a cup shape forms between $48 and $50. A handle should then form between $49 and $50, ideally closer to $50. Then the price should break out above the price range of the handle.
💡 Quick Tip: Look for an online brokerage with low trading commissions as well as no account minimum. Higher fees can cut into investment returns over time.
Does the Cup and Handle Pattern Work?
The cup-and-handle pattern is one strategy that traders can use to get a sense of the market and inform their investing decisions. However, it is not a perfect tool.
Like any trading pattern, the cup and handle should be used in conjunction with other trend indicators and signals to make informed trading decisions. Although the cup and handle pattern can be a useful and easy to understand pattern to find entry and exit points, it does have some drawbacks.
The cup-and-handle pattern may form over the course of a day, weeks, months, or even a year. This makes it challenging to figure out exactly when to place a purchase order. Generally it forms over a month to a year, but identifying the exact breakout point is not easy.
Also, the depth of the cup can be a confusing part of the pattern. A shallow or a deep cup might be a false signal. The cup also doesn’t always form a handle at all, and the liquidity of the stock also affects the strength of the trading signal.
How to Trade a Cup and Handle Pattern
Traders wait for the handle pattern to form, which may either be in the shape of a sideways handle or a triangle. When the stock price breaks out above the top of the handle, that indicates completion of the cup-and-handle pattern, and creates a signal that stock price could continue to rise.
Although the cup-and-handle pattern can be a strong buy indicator, it does not guarantee that prices will go up. The stock price may rise, fall again, then continue to rise. Or it might rise and then simply fall.
One way to avoid significant losses when this happens is to set a stop-loss on trades with your broker. Day traders may want to close out the trade before the market closes.
Cup-and-Handle Patterns in Crypto
While the cup-and-handle pattern has traditionally been used for stock trading, it can also be used in crypto trading. Cup and handle patterns have formed in Bitcoin and Ethereum charts in recent years. Bitcoin formed a cup and handle pattern in 2019, and Ethereum formed one in 2021. The basic guidelines and indicators are the same for crypto as for stocks.
Recommended: Crypto Technical Analysis: What It Is & How to Do One
The Takeaway
Stock patterns are signals that form a certain recognizable shape when charted graphically, making them easy to spot and trade. They can help traders find entry or exit points, estimate price targets and potential risk. The cup-and-handle pattern is a useful and easy to follow trading pattern to help traders spot entry points for bullish trades.
Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).
For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.
FAQ
Is cup and handle pattern bullish?
Yes, the cup and handle pattern is considered a bullish market signal, and investors may take it as a sign that they should go “long” on an investment or specific market position.
How reliable is cup and handle pattern?
The cup and handle pattern is merely an indicator, and not a promise or sure sign that something is going to happen. As such, investors should be careful not to take it as a sure thing. That said, investors may do well to use it in conjunction with other trading strategies and methods, and along with other trend markers.
What are the rules for the cup and handle pattern?
The cup and handle pattern doesn’t have “rules” per se, but instead, is a pattern that forms on a stock chart. That form shows a stock price decreasing in price over a short period of time, then stabilizing, forming a “cup,” which is then followed by a rise in value, creating the “handle.”
What is the weekly timeframe for the cup and handle pattern?
Cup and handle patterns can emerge on a stock chart over several months, but many times, over a handful of weeks.
Photo credit: iStock/jacoblund
SoFi Invest® INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below:
Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.
Claw Promotion: Customer must fund their Active Invest account with at least $25 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.
Welcome to the charming city of Eugene, where the stunning natural beauty of the Pacific Northwest meets a vibrant and eclectic community. With its lush greenery, proximity to outdoor adventures, and a thriving arts and culture scene, Eugene offers a unique blend of urban amenities and outdoor recreation. Residents here enjoy a laid-back lifestyle, with a strong emphasis on sustainability and environmental consciousness. So whether you’re searching for the perfect apartment in Eugene or a cozy home for rent, you’ve come to the right place.
In this ApartmentGuide article, we’ll cut to the chase, breaking down the pros and cons of moving to Eugene. Let’s get started and see what awaits in this nature-lover’s paradise.
Pros of living in Eugene
1. Outdoor paradise
Eugene is a haven for outdoor enthusiasts, with its proximity to the Cascade Mountains, the Oregon Coast, and numerous hiking trails. Residents can enjoy activities such as hiking, mountain biking, and kayaking in the beautiful natural surroundings. The city also boasts several parks and green spaces, including Alton Baker Park and Hendricks Park, providing ample opportunities for picnics, birdwatching, and relaxation.
2. Sustainable living
Eugene is known for its commitment to sustainability and eco-friendly practices. The city has a strong focus on recycling, composting, and reducing waste, making it an ideal place for environmentally conscious individuals. Residents can also take advantage of the city’s extensive network of bike paths and public transportation options, promoting a greener way of life.
3. Thriving arts scene
Eugene has a vibrant arts and culture scene, with numerous galleries, theaters, and music venues showcasing local talent. The city hosts events such as the Eugene Symphony performances, the Oregon Bach Festival, and the First Friday ArtWalk, providing residents with a rich cultural experience. Additionally, the University of Oregon’s influence brings in a diverse range of artistic and intellectual activities to the city.
4. Craft beer culture
Eugene is a mecca for craft beer enthusiasts, with a plethora of local breweries and taprooms offering a wide variety of unique and flavorful brews. Residents can explore the city’s beer scene through brewery tours, beer festivals, and tasting events, immersing themselves in the craft beer culture that Eugene is known for.
5. Cost of living
One of the pros of living in Eugene is its relatively affordable cost of living compared to other cities in Oregon. The average rent for apartments in Eugene, is between $995 and $1,860 in 2024. Housing, groceries, and utilities are generally more budget-friendly, allowing residents to enjoy a comfortable lifestyle without breaking the bank.
6. Community spirit
Eugene has a strong sense of community, with residents actively participating in local events, volunteer opportunities, and neighborhood gatherings. The city’s friendly and welcoming atmosphere fosters a sense of belonging and connection, making it an ideal place for those seeking a tight-knit community.
7. Educational opportunities
With the University of Oregon located in Eugene, the city offers a wealth of educational opportunities for residents. From public lectures and workshops to cultural events and academic resources, the university enriches the community with a diverse range of learning experiences.
Cons of living in Eugene
1. Rainy climate
Eugene experiences frequent rainfall, which may deter those preferring drier climates. This wet weather often brings overcast skies and damp conditions, impacting outdoor activities and mood. However, residents find ways to embrace the rain, enjoying indoor activities or exploring Eugene’s lush greenery thriving in the moist climate.
2. Limited job market
While Eugene offers a thriving arts and culture scene, the job market may be limited in certain industries. Residents seeking employment in specialized fields may find fewer opportunities compared to larger metropolitan areas, requiring them to explore remote work or commute to nearby cities.
3. Traffic congestion
As the population of Eugene continues to grow, traffic congestion has become a common issue, especially during peak hours. The city’s infrastructure may struggle to accommodate the increasing number of vehicles, leading to longer commute times and potential frustration for residents.
4. Limited public transportation options
While Eugene promotes sustainable living, the public transportation options may be limited compared to larger cities. Residents relying on public transit may find it less extensive, requiring careful planning and potential adjustments to their routines. Eugene’s transit score of 32 suggests available services, but coverage may be less comprehensive than in cities with stronger transit systems.
5. Seasonal allergies
Eugene’s lush greenery and diverse flora contribute to high pollen counts at certain times of the year, causing seasonal allergies for some residents. Those sensitive to pollen and other allergens may experience discomfort during peak allergy seasons, usually in spring and early summer.
6. Limited nightlife options
For those seeking a bustling nightlife scene, Eugene may offer fewer options compared to larger urban centers. The city’s nightlife may be more subdued, with fewer late-night entertainment venues and activities available for residents seeking vibrant nightlife experiences.
A central counterparty clearing house (CCP), or Central Counterparty, is a financial institution that facilitates trading activities in European equity and derivative markets. Regional banks typically operate CCPs which are an important part of the international financial system.
CCPs maintain stability and efficiency across financial markets and reduce risks including counterparty, default, and market risks. In the United States, CCPs are called Derivatives Clearing Organizations (DCO) and are regulated by the Commodity Futures Trading Commission (CFTC).
Defining Central Counterparty Clearing Houses
The Bank for International Settlements (BIS) defines a CCP as “a clearing house that interposes itself between counterparties to contracts traded in one or more financial markets, becoming the buyer to every seller and the seller to every buyer and thereby ensuring the future performance of open contracts.” The Eurex is a well known CCP.
Central Counterparty Clearing Houses act as intermediaries between buyers and sellers in financial transactions. They handle clearing and settlements in various types of securities and derivatives transactions to reduce credit risk in the markets. Clearinghouses have existed for more than a century, and act as a way to reduce the risk of OTC derivative transactions.
💡 Quick Tip: How do you decide if a certain trading platform or app is right for you? Ideally, the investment platform you choose offers the features that you need for your investment goals or strategy, e.g., an easy-to-use interface, data analysis, educational tools.
How Central Counterparty Clearing Houses Work
Central Counterparty Clearing Houses guarantee trade terms for buyers and sellers. They help reduce risk for investors by taking on credit risk involved in transactions, so even if a buyer or seller defaults on a transaction the other party doesn’t have as much loss as they might have without the CCP.
When buyers and sellers enter into transactions, they each deposit money with the CCP to cover the amount of the transaction. All CCP users must have a margin account.
In a process called “novation,” the CCP enters into two different contracts, one with the buyer and one with the seller. This provides a guarantee to the other party that if one side doesn’t follow through with the agreement the other side will still receive payment. CCPs typically use margin calls to settle trades if one party does not have the funds in their account.
If the trade falls through, the CCP completes the trade at the current market price. CCPs are for-profit businesses that generate revenue from their members and their transactions. They also work with parent exchanges that require them to remain profitable. Just like other types of businesses, CCPs each operate differently and have different business strategies to attract customers and earn revenue.
For instance, there are different types of derivative products that a CCP might choose to offer. One common business model for CCPs is to cross-margin products in a single netting pool. Parent exchanges place obligations on CCPs, so they need to earn enough revenue to meet those.
The specific financial products offered by a CCP, as well as its risk level, fee structure, and other features lead to different types of members, organizational structure, regulations, and rules for margin balances.
CCPs continue to evolve, offer new products, and become more sophisticated over time. Regulations are also evolving for CCPs which may change how they operate in the future.
Uses of a Central Counterparty Clearing House
CCPs maintain the anonymity of investors’ identities to protect their privacy. They also maintain the privacy of trading firms from buyers and sellers by using electronic order books and protect brokerage firms from the risk of buyers and sellers defaulting on their end of options such as calls or puts.
Another use of CCPs is to lower the number of transactions settled in order to move funds efficiently between investors.
💡 Quick Tip: How to manage potential risk factors in a self-directed investment account? Doing your research and employing strategies like dollar-cost averaging and diversification may help mitigate financial risk when trading stocks.
CCP Members
Financial institutions that want to clear trades through a central counterparty can become members of a particular CCP. Membership allows them to reduce credit risk for their customers and themselves. There are CCPs for different types of financial transactions, so financial institutions can choose the appropriate CCP to apply to for their needs.
CCPs want members that have a significant transaction volume, are creditworthy, and have a trading operation that works efficiently with the system run by the CCP. CCPs also want members to contribute funds to their default fund and secure collateral for their transactions. Each CCP has somewhat different criteria and requirements for membership, and membership information is not always publicly available.
Pros and Cons of CCPs
There are benefits and drawbacks to CCPs. Here are a few important ones to understand:
Pros
CCPs benefit investors in the following ways:
• Reduce counterparty risk
• Maintain stability in financial markets
• Increase efficiency of transactions
• Maintains privacy of customers
Cons
There are also some drawbacks to CCPs for investors, including the following:
• Participation fees
• May not be able to process non-standard transactions
• Some CCPs may not have adequate scale
CCPs and Blockchain
CCPs are now being used with blockchain technology, made popular in cryptocurrency markets, to further reduce risk and costs. An international group of clearing houses launched the Post Trade Distributed Ledger Group launched in 2015. The group studies ways to use blockchain technology for transactions.
Since its formation, the group has expanded to include about 40 global financial institutions collaborating to bring CCPs together with blockchain. The goal of using blockchain technology with CCPs is to reduce margin requirements and risk, reduce operational costs, improve regulatory oversight, and increase the efficiency of trade settlements. Ideally blockchain can help support better settlements, clearing processes, and reporting.
Decentralized exchanges already operate similarly to CCPs as a third party that handles transactions.
The Takeaway
Central counterparty clearing houses help reduce the risk of trading derivatives and securities. They became more popular after the financial crisis as a way for investors to minimize counterparty risk.
While CCPs may help maintain stability in financial markets and increase efficiency, they may also involve participation fees, or may not be able to process non-standard transactions. Understanding the ins and outs of CCPs can be helpful to investors as they learn to navigate the markets.
Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).
For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.
FAQ
What is the difference between a clearing house and a central counterparty?
While a CCP acts as a clearing house for transactions, it has an additional step involved before doing so. The two parties involved in a transaction agree upon transaction terms, then the CCP must agree to the terms before they clear the transaction.
What is the CCP margin?
CCPs require customers to make collateral deposits, known as margin deposits, before entering into transactions. This provides them with funds they can use to guarantee trades in the event that one party defaults on an agreement. The initial margin required depends on the customer, the type of financial product, and the particular trade agreement.
Does central clearing reduce counterparty risk?
Central clearing reduces counterparty risk by guaranteeing trades for buyers and sellers. They take on the credit risk involved in transactions by becoming the buyer to every seller and the seller to every buyer.
Photo credit: iStock/vm
SoFi Invest® INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below:
Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Before an investor begins trading options they should familiarize themselves with the Characteristics and Risks of Standardized Options . Tax considerations with options transactions are unique, investors should consult with their tax advisor to understand the impact to their taxes. *Borrow at 10%. Utilizing a margin loan is generally considered more appropriate for experienced investors as there are additional costs and risks associated. It is possible to lose more than your initial investment when using margin. Please see SoFi.com/wealth/assets/documents/brokerage-margin-disclosure-statement.pdf for detailed disclosure information. Claw Promotion: Customer must fund their Active Invest account with at least $25 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.