New York City is a place of endless possibilities and iconic landmarks. It’s a city that resonates with and entices people from all over to call NYC home. From the towering apartment buildings in Manhattan to the sprawling greenery of Central Park, this city offers a unique mixture of history and modern-day charm.
New Yorkers are known for their resilience and spirit, evident in the city’s culture, sports fandom, and unparalleled style. Here, every street corner tells a story and every subway ride introduces a new character.
Let’s dive in a bit deeper and finally answer the question, what is New York City known for?
1. Wall St.
Wall St. is synonymous with the American financial industry. Home to the New York Stock Exchange and NASDAQ, this street represents power and influence in global finance. The mere mention of Wall St. evokes images of traders bustling about, stocks being bought and sold, and fancy suits with expensive watches everywhere you look. It’s not just a street; it’s the economic engine of the city and the country.
2. Cultural melting pot
New York City is a true cultural melting pot, where people from literally every corner of the globe converge and coexist. This amalgamation shapes every aspect of city life. Walking through neighborhoods like Chinatown, Little Italy, or Jackson Heights is akin to taking a global tour without the need for a passport.
3. The five boroughs
The five boroughs—Manhattan, Brooklyn, Queens, The Bronx, and Staten Island—each have their own distinct identity and charm. Manhattan boasts the skyline; Brooklyn offers arts and innovation; Queens is the king of diversity; The Bronx is the birthplace of hip-hop; Staten Island provides a slower pace with its green spaces and suburban feel. Together, they form a complex and comprehensive portrait of New York City life.
4. Broadway
Broadway is the pinnacle of American theater. It’s the heartbeat of New York City’s performing arts scene, attracting millions of visitors each year. From groundbreaking musicals with Hollywood stars to intense dramas that launch careers, Broadway shows are a vital part of the city, reflecting both the contemporary and the classic.
5. The Yankees
The New York Yankees are more than just a baseball team; they are an institution. With a legacy of 27 World Series championships, they embody the competitive spirit of the city. Yankees Stadium, a landmark in itself, draws crowds for games and concerts in the warmer months.
6. Stand-up comedy
New York City is a hub for stand-up comedy, with numerous clubs that have launched the careers of many acclaimed comedians. Places like the Comedy Cellar or Gotham Comedy Club are where performers cut their teeth and create their style. To put it simply, In NYC, laughter is serious business.
7. Central Park
Arguably the most famous public park in the world, New York City is known for Central Park, an oasis amidst the concrete jungle. This sprawling green space, designed by Frederick Law Olmsted and Calvert Vaux, offers a refuge to residents and tourists alike.
8. Dollar slices
The concept of dollar pizza slices captures the essence of New York City’s fast-paced and accessible food scene. These quick, cheap eats are available at countless pizzerias around the city, showcasing NYC’s ability to offer something for everyone. Whether you’re rushing to a meeting or wandering home after a night out, a dollar slice is never far away.
9. The Met
The Metropolitan Museum of Art, known as The Met, is one of the world’s largest and most esteemed cultural institutions. Located along the edge of Central Park, it houses over two million works of art spanning 5,000 years of history. The Met is not just a museum; it’s a gateway to the world, offering visitors a dizzying selection of artifacts, from ancient Egyptian sculptures to American contemporary paintings.
10. NYC Skyline
The New York City skyline is perhaps the most iconic urban vista in the world, instantly recognizable with its mix of historic architectural feats and sleek modern towers. From the art deco spire of the Empire State Building to the gleaming surfaces of the One World Trade Center, the skyline tells the story of a city that has continually reached toward the sky.
Inside: Learn how to save money quickly, even on a tight budget. Get practical tips for how to save money fast on a low income. Simple savings ideas to implement today.
Saving money on a tight budget can feel like a high mountain to conquer, especially when you’re trying to do it fast.
Many people earn just enough to cover their essential costs, leaving little room for savings. However, with the right strategies, saving money fast on a low income doesn’t have to be a pipe dream.
This is something I started when we decided to pay off debt. Then, we choose to continue saving that money and investing it.
By understanding the flow of your money – where it’s coming from and where it’s going – you can make informed decisions that maximize your savings potential.
By prioritizing your spending and forecasting future expenses, budgeting can reduce the stress of financial uncertainty and introduce a sense of control and confidence in your money management skills. Thus, leading to you starting to save.
What is the best way to save money on a low income?
On a low income, the best way to save money is to thoroughly understand your expenses and prioritize your needs over wants.
In addition, by planning and tracking your finances meticulously, you can identify where each penny is going. Thus, allowing you to analyze your expenses. Once you have a clear picture of these, start looking for areas to trim down.
Remember, saving money is about being proactive and consistent. These small but steady steps can build up over time to help you save money fast, even on a low income.
How to Save Money on A Fast Income
1. Start with Clear Priorities
Before you can decide where to cut costs or how to allocate your funds, you need to know what’s most important to you.
What is your why for doing what you need to do? Is it building an emergency fund, saving for a down payment on a home, or maybe preparing for retirement?
Whatever your goals, outline them clearly. This is how you will save money.
2. Budgeting effectively to manage finances
To budget effectively on a low income, it all starts with a cold, hard look at your numbers.
Begin by listing all sources of income – that’s your foundation.
From each paycheck or income stream, subtract your non-negotiable expenses such as rent, utilities, transportation, and debt payments. What you have left is your discretionary income.
Then, it’s time to categorize and prioritize. Group your expenses into necessities and nice-to-haves. If your essentials consume most of your income, you’ll need to scrutinize the nice-to-haves list.
Every dollar saved from unnecessary splurges is a dollar that can be put towards your savings.
Use budgeting apps or tools to keep a real-time record of your spending. These can help you stay disciplined and provide a visual reminder of your progress.
3. Track and Slash Unnecessary Expenses
Now, you must meticulously and ruthlessly cut out the non-essentials.
Identify patterns and spot the recurrent, unnecessary expenses that are draining your funds.
Do you subscribe to multiple streaming platforms?
Are you forking out cash for a gym membership you barely use?
Are those daily specialty coffee drinks adding up?
It’s time to slash these expenditures.
Cutting these expenses is like giving yourself a raise.
4. Lower Housing Expenses Without Compromising Comfort
Living in smaller, more affordable housing to decrease rent or mortgage might be exactly what you need.
Opting for a smaller, more affordable space is a practical approach to significantly lower your rent or mortgage payments. When you choose to live in a compact setting, not only do you reduce the square footage costs, but often, utility and maintenance expenses decrease as well due to the reduced size of the living area.
If you are renting, try to negotiate your rent or lease terms with your landlord – they might be willing to offer a discount to keep a reliable tenant, or you may be able to agree on lower rent for a longer lease commitment.
If you’re a homeowner, explore the possibility of refinancing your mortgage to take advantage of lower interest rates. Alternatively, consider renting out a room or a portion of your living space, as the additional income can offset your mortgage or maintenance costs.
5. Save Money on Utilities with Simple Home Adjustments
Saving money on utilities might sound challenging, but you can often achieve substantial savings with a few strategic home adjustments. Let’s explore some cost-effective strategies and modifications you can make to your living space that could help reduce your bills.
Energy Efficient Appliances: Swapping out older appliances for Energy Star-rated ones leads to significant reductions in electricity use and water consumption.
Smart Thermostats: Installing a smart thermostat allows you to programmatically control your heating and cooling based on your schedule and preferences, potentially saving you a bundle on your energy bills.
LED Lighting: Switch to LED bulbs, which are more energy-efficient than traditional incandescent ones and have a longer lifespan, saving you on replacement costs as well as your electric bill.
Insulation Upgrades: Proper insulation keeps your home warm in the winter and cool in the summer, reducing the need for excessive heating or air conditioning.
Water-Saving Fixtures: Low-flow showerheads and faucet aerators reduce water usage, preserving this precious resource and lowering your water bill.
Not only do these simple home adjustments lead to savings on your utility bills, but they also contribute to a more environmentally friendly lifestyle.
6. Cooking at home instead of eating out
Cooking at home instead of dining out is an excellent way to save money, especially on a low income. When you eat at a restaurant, you’re not just paying for the food; you’re also covering the cost of service, ambiance, and the establishment’s overhead.
Plan a balance between meal prepped home-cooked meals and the occasional dinner out to keep your budget in check while still enjoying life’s little pleasures. Here are some frugal meals to get you started.
Remember, you don’t have to eliminate eating out entirely.
7. Canceling unused subscriptions and memberships
Stop draining money on services you don’t actively use. It’s surprisingly easy to forget about these auto-renewing expenses, so taking the time to audit your subscriptions can reveal opportunities for savings.
Recently, we tracked over $100 a month in my mother-in-law’s unused subscriptions and membership!
As such, it’s important to periodically evaluate your subscriptions and memberships to ensure they are still serving your interests and goals. If not, give yourself permission to cancel and save that money for something that offers tangible benefits in return.
8. Buying quality items that last longer
Investing in quality items that last longer is a strategic way to save money over time. While the initial cost may be higher, durable products can prevent the cycle of frequent replacements, ultimately contributing to long-term savings and less waste.
Remember, not every purchase necessitates the highest quality option. Examine which items you frequently use and can benefit from in the long run. For instance, driving a Toyota or buying higher quality shoes.
Once you’ve identified these, invest in quality for those and enjoy the satisfaction of a purchase that lasts.
9. Optimize Grocery Shopping
To optimize grocery shopping and manage your food budget effectively, start by thoroughly checking your current pantry supplies and making a precise shopping list to deter impulse purchases.
Utilize coupons and enroll in local store loyalty programs for exclusive discounts.
Embrace meal planning to avoid unnecessary spending.
Consider incorporating meatless meals, as this can contribute to consistent savings over time due to the typically higher cost of meat compared to vegetables and other plant-based options.
Plan meals around these cheap foods when you are broke.
By shopping smartly, you have the power to drastically lower your monthly food bill. Just remember, the key is preparation and discipline.
10. Repairing items instead of replacing them
Repairing items instead of replacing them can be a significant money-saving tactic, especially when budgets are tight. It’s often more cost-effective to fix a piece of furniture, mend a garment, or troubleshoot an appliance than it is to buy new one.
Consider the condition and value of each item before deciding to repair it. If the cost of repair approaches the price of a new item, or if it’s beyond your skill set, researching community resources or seeking professional help may be a wise choice.
11. Practicing the 30-day rule for non-essential purchases
Putting the brakes on impulsive buying can significantly boost your savings, and practicing the 30-day rule is a tried-and-true method to control those urges.
Before you make any non-essential purchase, wait 30 days.
If after a month you still feel the purchase is necessary or meaningful, then consider buying it.
Remember that the goal isn’t to deny yourself enjoyment but to ensure that each purchase is considered and valued. This conscious approach can lead to more satisfaction with the items you do choose to buy and a healthier bank balance.
12. Skip the Car Loan
Opting out of a car loan and finding alternative modes of transportation, such as cycling, walking, or using public transportation, can lead to significant financial savings.
Without a car payment, individuals can redirect the funds that would have gone towards monthly installments, insurance, and maintenance into their savings account.
This strategy can be particularly impactful for those with a goal in mind or working with a low income, as every dollar saved moves them closer to financial stability. Furthermore, the elimination of auto loan interest charges and potential debt can provide a more secure financial footing and peace of mind.
13. Using public transportation or carpooling to reduce fuel costs
Utilizing public transportation or carpooling can be significant in reducing fuel costs, particularly when you’re committed to saving money on a low income. These alternatives to solo driving not only save on fuel but also on parking fees, and wear and tear on your vehicle.
Another option is embracing car-sharing services, especially if you find that you don’t require a car on a daily basis. Services like Turo and Getaround offer the flexibility of having a car when you need one without the constant financial responsibility associated with ownership.
Remember, it’s all about what suits your lifestyle and frequency of need. By assessing how often you need a vehicle and comparing it with the total costs of ownership, car-sharing could be an excellent way to save money.
14. Selling unused or unwanted items for extra cash
Selling unused or unwanted items is a fantastic way to declutter your space and earn extra cash. You might be surprised how much money you can make by letting go of things you no longer use or need. From clothes you’ve outgrown to homeware that’s gathering dust, each item sold can inch you closer to your savings goal.
Take advantage of this opportunity; a thorough home audit could reveal a treasure trove of sellable items right under your nose. Not only does this increase your income, but it also helps you consider future purchases more carefully.
15. Taking advantage of free entertainment and community events
Leveraging free entertainment and community events is a delightfully frugal way to enjoy yourself without breaking the bank. From concerts and exhibitions to workshops and meet-ups, there’s often a wealth of activities that won’t cost you a penny.
In fact, here at Money Bliss, I have the most popular list of things to do with no money.
With a little creativity and resourcefulness, you can uncover a variety of enjoyable and inexpensive things to do.
16. Automating savings to ensure consistent contributions
Automating your savings is a hassle-free way to ensure you consistently contribute to your financial goals.
By setting up an automatic transfer from your checking account to a savings account, you’re essentially paying your future self first.
This ‘set and forget’ approach helps grow your wealth with minimal effort.
17. Negotiating bills and asking for better rates
Many service providers are open to negotiating prices if it means retaining a customer. Whether it’s your cable package, insurance, or even a credit card interest rate, it’s worth having the conversation.
Remember, the worst they can say is no. But often, companies will offer helpful options when they realize you are considering alternatives due to cost concerns.
One phone call could save you $1000 a year – just like when I decreased my cable bill!
18. Evaluating insurance policies for potential savings
When evaluating insurance policies, it’s critical to regularly assess your coverage needs and shop around for the best rates. Comparing policies from different providers annually can reveal opportunities for lowering premiums or finding more suitable coverage.
Utilize online tools and independent insurance agents to ensure a comprehensive review of available options.
Remember to inquire about bundling policies, as this can often lead to significant savings while consolidating your insurance needs effectively.
19. Meal Planning and Prep: Strategies to Reduce Food Waste
By allocating some time each week to plan your meals, you can ensure that you only buy what you need, thereby minimizing waste and cost.
Learning to meal plan starts with looking at a calendar and a local sales flyer to find the low cost deals.
By creating a weekly plan and incorporating budget-friendly recipes, you can not only eat healthier but also avoid the costlier option of dining out.
20. Forgo single use items
By choosing reusable items over single-use ones, you cut down on waste and habitual spending on disposables. This is also known as frugal green.
For instance, investing in a reusable water bottle, rather than buying single use water bottles.
By integrating sustainable products into your life, you also promote a culture of conservation and mindfulness, inspiring others to make eco-friendly choices.
21. Shopping for groceries with a list to avoid impulse buys
This is key! Especially when shopping with kids or a significant other!
Shopping for groceries with a list is a golden rule to avoid impulse buys, which can quickly derail your budget. By planning your purchases beforehand, you stick to the essentials and resist the temptation of sale items that aren’t on your list or don’t fit your meal plan.
Bonus Tip: Remember to always shop on a full stomach – hitting the grocery store hungry is a surefire way to end up with impulse purchases that aren’t on your list!
22. Buying generic brands instead of name brands
Opting for generic brands rather than name brands is a straightforward and effective way to save money on everything from groceries to over-the-counter medications. These products are often of similar quality and effectiveness but come at a significantly lower cost.
By making the switch to generics, especially for regularly used items, the aggregate savings can be substantial over time.
23. Making bulk purchases for commonly used items to save on cost-per-unit
When you buy in larger quantities, the cost per unit typically decreases, leading to savings that add up over time. Bulk buying works best for non-perishable goods or products you use consistently.
Make a point of buying non-perishable items or products with a long shelf life in bulk to avoid waste and ensure that you truly save money with each bulk purchase.
Just make sure you are going to use it!
24. Cutting costs on personal care by DIY methods
DIY methods for personal care are not just a trend – they’re a practical and often healthier alternative to store-bought products. By creating your own beauty and personal care items, you can significantly trim costs and take control of what goes on and into your body.
Even if you’re not the crafty type, consider starting small with something like a DIY sugar scrub or homemade toothpaste. This is something I did over ten years ago. You might discover a new hobby that enhances both your well-being and your budget.
25. Regular maintenance of vehicles and appliances to prevent costly repairs
Keeping on top of maintenance schedules helps prevent major breakdowns that can lead to expensive repairs down the line.
By making regular maintenance a non-negotiable part of your routine, you protect your investments and save yourself from future financial headaches.
I keep a list in my digital to do list, so I never lose track.
26. Shopping at thrift stores, garage sales, or second-hand websites
Shopping at thrift stores, garage sales, or second-hand websites is an excellent way to acquire items at a fraction of the retail cost. Not only are you being financially savvy, but you’re also participating in the circular economy, reducing waste, and often supporting charitable causes.
Shopping second-hand first is not just about saving money—it’s a lifestyle choice. With patience and persistence, it’s amazing what quality items you can find without impacting your wallet heavily.
27. Learning basic sewing to repair clothes
Mastering the basics of sewing to mend your clothes is a skill that pays off in multiple ways. You save money by extending the life of your garments, reducing waste, and developing a practical capability that can come in handy in various situations.
Honestly, sewing a piece of clothes is a very simple thing. Something that must be learned by the younger generations.
Consider setting aside some time to learn sewing basics via online tutorials, community classes, or even from a friend or family member—it’s a practical step toward financial savings and sustainable living.
28. Utilizing coupons and discounts for shopping
Using coupons and discounts strategically can lead to significant savings on your shopping bills. With a little planning and some savvy shopping techniques, you can ensure you never pay full price for essentials and other purchases.
Remember to only use coupons for items you were already planning to purchase; otherwise, you’re not saving money, you’re just spending less on something extra.
29. Consolidating debt to reduce interest rates
Debt consolidation can be a strategic financial move to lower your overall interest rates and simplify your monthly payments. By combining your debts into one loan with a lower interest rate, you can streamline your bills and potentially save significant amounts of money over time.
Make sure to shop around for the best debt consolidation options and read the fine print. The goal is to find a consolidation plan that truly puts you on a faster track to being debt-free without any hidden costs.
30. Tackle High-Interest Debts First to Free Up More Cash
Addressing high-interest debts is paramount in optimizing your financial strategy. Such debts, often from credit cards or payday loans, can spiral out of control if not managed promptly due to their compound interest rates, which can quickly exceed the original amounts borrowed.
This is known as the debt avalanche.
By zeroing in on high-cost debts, you ensure your income is spent more effectively and not wasted on steep interest fees, accelerating your path to financial freedom.
31. Choose the Right High-Yield Savings Account for Your Emergency Fund
Selecting the right high-yield savings account for your emergency fund is an essential move for growing your savings. High-yield accounts offer interest rates significantly higher than standard accounts, ensuring your emergency fund doesn’t stagnate and keeps pace with inflation as much as possible.
This is one of the bank accounts you need.
32. Implement The Envelope System
The Envelope System is a budgeting method that involves physically dividing your cash into envelopes for different spending categories.
Utilizing the cash envelope system promotes disciplined spending by providing a tangible limit on various expense categories, ensuring you stay within your pre-determined budget and facilitating more intentional money management.
This method also offers immediate visual feedback on spending patterns, which can lead to better financial habits and incremental savings as any leftover cash from each envelope can be added directly to a savings fund, making the act of saving more rewarding and motivating.
33. Using cash -back envelopes to track spending
The use of cash-back envelopes takes the traditional envelope budgeting system a step further by rewarding yourself with savings.
Whenever you spend less than the allocated amount in a budget category, you place the cash difference into a “cash-back” envelope, which can be used for saving or investing.
Adopting the cash-back envelope strategy can provide a rewarding twist to budgeting, making it a fun challenge to spend less and save more.
Boost Your Income: Creative Side Hustles and Opportunities
Boosting your income can provide substantial financial relief, particularly when you’ve maximized your ability to cut costs and still find your expenses stretching your budget thin.
Generating extra income, be it through a side hustle or achieving a raise enhances your ability to save and invest.
With additional streams of revenue, you gain more financial flexibility to achieve goals like paying off debt faster, saving for a significant purchase, or building an emergency fund.
Finding a side hustle or part-time job for additional income
Exploring a side hustle or part-time job is a proven way to supplement your income. In today’s gig economy, there are numerous opportunities for flexible work that can be customized to fit your skills and schedule.
A side hustle can not only pad your wallet but also provide an outlet for creativity and passion, possibly even offering a new career trajectory down the line.
Explore Gig Work and Passive Income Streams
Exploring gig work and passive income streams can accelerate your savings efforts, especially when your regular income isn’t enough to reach your financial goals. These alternative income ideas often provide the flexibility to work on your terms and build up earnings over time.
These revenue channels provide a proactive approach to increasing your disposable income. Researching and choosing the best options for your skills and financial situation can help you build a sound extra income strategy.
Take Advantage of Bank Bonuses and Credit Card Bonuses
Banks often offer attractive incentives to new customers, and high-interest savings accounts can grow your deposits at a faster rate than traditional accounts. The same is true for credit card issuers offering big bonuses.
Taking time to research the best offers and account terms can net you a nice bonus and put your money to work earning more money.
Learn How to Invest Your Money
Learning how to invest your money is paramount to building wealth over time. While it can seem intimidating at first, understanding the basics of investing can enable you to take advantage of compounding interest and market growth to increase your savings exponentially.
Start small, stay disciplined, and continually educate yourself as you grow your investment portfolio. Over time, your investments can become a significant source of wealth and financial security.
Learn how to invest in stocks for beginners.
FAQs: Navigating the Path to Low-Income Savings Success
Saving money when your income barely covers your fixed expenses requires a strategic approach. Begin by scrutinizing your budget to cut any non-essential costs.
Look for ways to reduce your fixed monthly expenses, like negotiating bills or refinancing loans.
Every small change can contribute to your savings, so focus on making incremental adjustments that together can enhance your financial situation.
Even when funds are tight, saving money is possible by making small but impactful changes.
Prioritize reviewing your expenses and identifying areas to cut back, such as non-essential subscriptions or eating out.
Round up loose change or small amounts from your daily transactions into savings.
Seek free entertainment options and consider generating additional income through side hustles or selling items you no longer need.
Each penny saved is a step towards your financial cushion.
Setting Realistic Savings Goals and Celebrating Milestones
Setting realistic savings goals is a key to financial success, particularly when managing a low income.
Determine what you can feasibly save without overstretching your budget. Whether it’s $5 or $50 per week, every bit helps.
Celebrating your achievements, no matter how small, can inspire continued discipline and dedication towards your financial objectives.
Being realistic and flexible with your budget will help you manage your finances more efficiently, ensuring that you set aside money for future growth, even when funds are tight.
This is a great step towards habits of financially stable people!
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
As thousands of Chicago-area families go house-hunting this spring, the dream of homeownership continues to drift further and further away.
By Don DeBat
21-Apr-24 – Average long-term mortgage rates inched above 7 percent nationwide for the first time this year, reported Freddie Mac’s Primary Mortgage Market Survey on April 18.
Benchmark 30-year fixed-rate home loan rates hit 7.10 percent, up from 6.88 percent a week earlier. That’s its highest level since October 26, 2023, when 30-year fixed loans hit 7.79 percent. A year ago, 30-year fixed mortgage rates averaged a more affordable 6.39 percent.
“The 30-year fixed-rate mortgage surpassed 7 percent for the first time this year,” said Sam Khater (left), Freddie Mac’s Chief Economist. “As rates trend higher, potential home buyers are deciding whether to buy before rates rise even more or hold off in hopes of decreases later in the year.”
Interest charges on 15-year fixed loans on April 18 averaged 6.39 percent, up from 6.16 percent a week earlier. A year ago, 15-year fixed mortgages averaged 5.76 percent.
Khater noted that home purchase applications rose modestly the week before, but “it remains unclear how many home buyers can withstand increasing rates in the future.”
The Freddie Mac survey is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who place a down payment of 20 percent and have an excellent credit score of 740 or higher.
The truth is home buyers in Chicago and across the nation really are starting to get rate-shy. Sales of existing homes in the United States fell 4.3 percent in March to a seasonally adjusted 4.19 million, reported the National Association of Realtors (NAR). That’s the first monthly decline in sales since December 2023, and follows a nearly 10 percent monthly sales jump nationwide in February.
“Home sales essentially remain stuck because mortgage rates have been stable and inventory is not really rising,” said Laurence Yun (right), NAR’s Chief Economist.
Unfortunately, Yun predicted that mortgage rates are likely to rise above 7 percent in the coming weeks. Early in 2024, Yun had predicted that 30-year fixed loan rates would average 6.3 percent by the fourth quarter of this year.
The interest rate rise is a direct result of the Federal Reserve’s aggressive interest rate hikes intended to tame soaring inflation numbers not seen in 40 years.
The Fed has raised its key benchmark lending rate to a range of 5.25 to 5.50 percent, the highest level since 2007. Based on moves by the Fed, mortgage analysts say 30-year fixed home loans could reach – or surpass – the 8 percent level in the near future. Home loan rates have not hit the lofty 8 percent level since August 11, 2000, more than 23 years ago.
Searching for a better deal, some borrowers are beginning to flock to riskier adjustable-rate mortgages (ARM), lenders say.
“This week we have issued 30-year loan commitments with rates as high as 7.5 percent, depending on down payments and borrower credit scores,” said Jeremy Rose (left), Chicago-based loan consultant for Loan Depot, one of the largest lenders in the nation. “Mortgage interest rates may have gradually declined over the past two decades, but home prices have tripled.”
Today, the buyer of a $400,000 home with a credit score of 740, who places a 25 percent down payment and takes out a $300,000 mortgage for 30 years at Loan Depot, would pay a rate of 7.5 percent. If the buyer is willing to pay a 1 percent discount point, or a loan fee of $3,000, the interest rate would drop to 7.125 percent.
“The most motivated buyers will accept the current level of mortgage rates and make offers when they find a place that’s suitable,” said Holden Lewis (right), a home and mortgage expert at Nerd Wallet. “High mortgage rates aren’t holding buyers back as much as lack of inventory and high prices.”
“If you’re always waiting for the perfect market conditions to arise, you could end up missing out on a lot of great opportunities,” warned Jacob Channel, Senior Economist at Lending Tree.
Mortgage rate history
Thirty-year fixed-mortgage interest rates ended 2020 at a rock-bottom 2.65 percent – the lowest level in the Freddie Mac survey history, which began in 1971.
Home loan rates set new record lows an amazing 16 times in 2020, and tens of thousands of homeowners refinanced.
Archives of the now-defunct Federal Housing Finance Board show long-term mortgage rates in the 1960s were not much higher than the Great Depression, when lenders were charging 5 percent on five-year balloon loans.
Nearly six decades ago, between 1963 and 1965, you could get a mortgage at 5.81 to 5.94 percent. Between 1971 and 1977, the now-defunct Illinois Usury Law held rates in the 7.6-to-9 percent range.
In the early 1980s, runaway inflation caused home loan rates to skyrocket into the stratosphere. According to Freddie Mac, benchmark 30-year mortgage rates peaked at a jaw-dropping 18.45 percent in October 1981 during that Great Recession.
Rates finally fell below 10 percent in April 1986, and then bounced in the 9-to-10 percent range during the balance of the 1980s. Twenty-three years ago, in August 2000, when some of today’s Millennial borrowers were still in diapers, lenders were quoting 8.04 percent.
(Left) October 1981 issue of Inc. magazine
Between 2002 and 2011, rates bounced in the 4-to-6 percent range. They inched into the 3-to-4 percent range until 2020, when they fell into the rock-bottom 2 percent bracket.
If you are wondering how often you can apply for a credit card, the right pace will vary based on the person, their credit score, and the card issuer’s restrictions. While there’s no single hard number when it comes to that query, once every six months is a good pace.
If you have good credit, a more frequent pace can be fine. If you have poor credit, however, you might want to slow things down. Read on to learn the ins and outs of how often you can apply for a credit card.
How Applying for a Credit Card Affects Your Credit Score
If you want to apply for a new credit card, you may be concerned about whether applying for credit cards hurt credit score. Applying for a credit card can affect your credit score in a few ways, including credit utilization, new credit inquiries, the average age of your accounts, and your credit mix. Here’s a closer look.
New Credit Inquiry
There are two types of credit inquiries: hard versus soft credit inquiries. During a soft inquiry, which is also called a soft pull or a soft credit check, a credit card issuer will check your credit, but it won’t affect your credit score.
However, when you apply for a new credit card, the credit card issuer will probably do a hard credit check. Hard credit inquiries do negatively affect your credit score. Every hard inquiry can drop your credit score by up to five points. However, this impact won’t last forever. Hard inquiries remain on your credit report for up to two years but they can only impact your score for 12 months.
Credit Utilization
Credit utilization is the amount of revolving credit you are currently using divided by the total credit available to you. Credit utilization is usually expressed as a percentage. When you open a new line of credit, like a new credit card, your total credit limit increases, and your credit utilization ratio decreases. This can help build your credit score. Experts recommend keeping your credit utilization below 30%.
Credit utilization can affect your credit score. And if you are approved for a new card, when that credit limit is added to your current credit limit, your total maximum will likely increase, which can lower your utilization percentage.
Average Age of Accounts
The longer the average age of your accounts on your credit report, the higher your credit score will likely be for that category. When you open a new account, it will reduce the average age of your accounts. If you have established credit with multiple accounts that are several years old, a new account opening may not have a significant impact. If all of your accounts are new, adding additional new accounts may have a greater negative impact.
Credit Mix
Lenders like to see that borrowers have a variety of different types of credit. This shows that they can handle different types of payments. The impact of opening a new credit card has on your credit mix will depend on your current credit array. If you already have several credit cards, it may not impact your credit score much. If you don’t have any other existing credit cards, opening up a new credit card could improve your credit mix and therefore help build your credit score.
Recommended: How Many Credit Cards Should I Have?
How Often Should You Apply for a Credit Card
Now, about the question of how often you can apply for a new credit card: While there is no hard and fast rule about how often to apply for a credit card, some experts recommend waiting at least six months between credit card applications.
• Those with poor credit may need to wait even longer between applications to maximize their chances of getting approved for a new credit card.
• Those with excellent credit can probably apply for a new card more often, like every three months.
Why You Should Wait Before Applying
Here are some reasons why you should think twice and delay before applying for a new credit card:
• If you don’t know how to use a credit card responsibly, you may want to consider waiting before applying for a credit card.
Worth noting: If you have bad credit from a maxed out credit card, you may want to work on building your credit score first. Some tips:
• If your credit utilization ratio is high because you don’t have a high credit limit, you could try implementing the 15/3 credit card payment method. The 15/3 credit card payment method is when you make two payments each statement period instead of one. You pay half of your credit card statement balance 15 days before the due date on your statement, and then make another payment three days before the due date. This additional payment can help lower your credit utilization ratio throughout the month, which can also help improve your credit score.
• Other reasons you may want to wait before applying for a credit card include if you’re buying or refinancing a home currently, since applying for a new credit card can result in a higher mortgage interest rate or potentially being declined from the mortgage altogether.
• You should also evaluate the credit card benefits and welcome offer to make sure it is the right fit for you and the best offer that you can get. Credit card sign-up bonuses fluctuate throughout the year. Before applying for a credit card, you should do some research to see what the highest offer has been. If the current offer is significantly lower, consider waiting to apply for that card.
How Many Credit Cards Can You Apply for at One Time
Technically, you can apply for as many credit cards at once as you want. However, you likely won’t get approved for all of them. And you could trigger a slew of hard credit inquiries. So putting in a load of applications likely won’t be worth the negative impact on your credit score.
Credit Card Issuer Restrictions
How many credit cards you can apply for at one time will vary based on the credit card issuer. Each card issuer has its own rules and restrictions about applications. American Express, Bank of America, Capital One, Chase, Citibank, Discover, U.S. Bank and Wells Fargo all have their own issuer restrictions regarding applications, cards and welcome offers.
Credit Card Tips
Once you have been approved for an additional credit card, you need to know how to manage multiple credit cards. Try these strategies to stay in good financial health:
• Understand your obligations. There are several credit card rules to understand so that you maintain your credit score, while taking advantage of the credit card benefits. One of the more important ones is to always pay at least the minimum amount due on time.
• When you are issued your credit card, it will have an expiration date. The credit card expiration date is usually three to five years after being issued. You can find the expiration date on the credit card itself. After the card expires, the issuer will usually give you a new card, as long as your account is still active.
• However, what happens if you don’t use your credit card is that the issuer may close your account. So make sure you are using your credit card.
• Also, make sure you are using your credit card responsibly. That means keeping an eye on your credit limit, your credit utilization ratio, and when your payments are due.
Recommended: What Is a Credit Card Expiration Date?
The Takeaway
How often you should apply for a credit card will depend on a variety of factors, like your credit history, the card issuer, the current offers available, and more. It can be wise to not apply for new credit cards more often than every six months. And once you have a new credit card, make sure to use it responsibly.
Whether you’re looking to build credit, apply for a new credit card, or save money with the cards you have, it’s important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.
FAQ
How long should I wait to apply for another credit card after being approved?
Some financial experts recommend waiting at least six months between credit card applications. However, there is no hard and fast rule about how often to apply for a credit card. It will vary depending on your credit score and the restrictions from the card issuer.
Do I have to wait six months to apply for another credit card?
Waiting six months between credit card applications is not a defined requirement. If you have poor credit, you may need to wait longer than six months between applications to maximize your chances of getting approved for a new credit card. If you have excellent credit, you can probably apply for a new card more often, like every three months.
How often can I apply for a credit card without hurting my credit?
Each credit card application results in a hard inquiry, which hurts your credit score temporarily. Keep that fact in mind as you consider applying.
Photo credit: iStock/Eva-Katalin
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.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
You’ve spent weeks preparing paperwork for your mortgage application. Now that you’re pre-approved for a loan, it’s time to talk numbers.
At first glance of the document detailing the breakdown of your monthly mortgage payments, the term PMI catches your eye. It’s a little over $100 per month, and you’re not sure what it’s for.
From what you’ve read, it’s standard on loans if the borrower puts little or no money down. But before you panic, take a deep breath and read on to learn more about PMI and how it works.
What is private mortgage insurance (PMI)?
What happens when your down payment is less than 20% of the cost of your new home? You may get approved for a mortgage loan. However, you pose more risk to the mortgage lender since you’re starting with no equity in your home. And if you fall behind on monthly payments and the lender forecloses on the home, they could stand to lose on the sale.
But the down payment of 20% is a way to create instant home equity. It also provides a layer of protection for the lender if they have to sell at a discounted price to recoup losses.
So, how does the lender protect themselves if you make little to no down payment? That’s where private mortgage insurance (PMI) comes in.
PMI is a type of mortgage insurance that protects the lender from taking a loss if you default on the loan. If the lender is unable to recover the outstanding balance of the loan from the sale, PMI will kick in and pay the difference. PMI is not to be confused with homeowners insurance, which protects you against damage to your property.
Who pays for private mortgage insurance?
This protection comes at a cost to borrowers. But it allows those with a down payment of less than 20% to buy the home of their dreams. It also minimizes risk, so lenders can extend these types of mortgage loans to consumers.
Does it cover private and public lenders?
PMI is only available to private lenders. Government agencies and other public lenders have their own form of mortgage insurance.
When is private mortgage insurance required?
Mortgage lenders use the loan-to-value (LTV) ratio to determine whether a borrower has to pay PMI. Typically, you’ll only have to pay PMI premiums if your loan-to-value ratio exceeds 80%. To calculate the mortgage LTV, the lender divides the mortgage amount by the home value.
Other circumstances may cause the lender to require PMI coverage. This includes past foreclosures, a less-than-perfect credit score, or other factors the lender thinks will increase your chances of defaulting on the loan.
A few scenarios:
SCENARIO 1
SCENARIO 2
SCENARIO 3
Home Value [1]
$100,000
$200,000
$250,000
Down Payment
$10,000
$50,000
$25,000
Mortgage Amount
$90,000
$50,000
$25,000
Loan to Value Ratio
90%
75%
90%
PMI Required
Yes
No [2]
Yes
[1]: Equivalent to sales price at the time of purchase [2]: This may change if the lender determines the borrower is riskier than normal
Private Mortgage Insurance vs. Mortgage Insurance Premiums
As mentioned earlier, mortgage insurance comes in a few variations:
Private Mortgage Insurance (PMI): protects private lenders who offer conventional loans. There are two types of PMI for conventional loans: borrower-paid mortgage insurance and lender-paid mortgage insurance. In most instances, PMI only applies until your LTV reaches 80%. But there are situations where the lender will require a higher percentage for the coverage to be lifted from the loan.
Mortgage Insurance Premium (MIP): protects government-backed VA loans and FHA loans. You pay a portion of the premium at the close of a VA loan or FHA loan. Then, you continue to pay mortgage insurance premiums on a monthly basis for the life of the loan, even once LTV is below 80%.
The LTV ratio is computed in the same manner for both private and government-backed mortgage products.
How much does PMI cost?
Premiums vary by loan. On average, you can expect to pay between 0.5 and 1% of the loan amount annually. So, if your mortgage is $350,000 and the PMI rate is 0.8%, your annual premiums will be around $2,800, or $233.33 per month.
The insurer will analyze your profile, including your credit score and down payment, to determine your interest rate.
The type of mortgage could also impact your premium. For example, if you take out an Adjustable Rate Mortgage (ARM) with floating interest, your premium may be higher. Why so? If the interest rate increases, your monthly mortgage payment will rise. And there’s a possibility you’ll default on the loan.
The condition of the real estate market in your area could also impact your PMI premiums. If projections state home values will plummet in the future, your premiums may be higher. This is due to the likelihood of you walking away once you’re upside-down on the loan.
How are PMI premiums paid?
There are three ways to make PMI premium payments:
Borrower-Paid PMI: Most mortgage lenders make it easy to manage premiums by rolling the monthly obligation into the amount you already pay for your home. This is the method used by most borrowers.
Single Premium PMI: You can also make a single lump-sum payment at the start of the loan by paying cash or rolling sum of the premiums into the loan.
Lender Paid PMI: If you wish to lower the monthly mortgage payment, Lender Paid PMI is also an option. The lender will pay premiums on your behalf. But keep in mind that the costs will be recouped in interest. And premiums don’t automatically go away when the mortgage LTV reaches 80%.
How to Avoid Paying Private Mortgage Insurance
The easiest way to avoid paying PMI is by making a larger down payment. If you can’t afford to put 20% down, it reduces your LTV ratio. Plus, you’ll be able to drop coverage quicker.
1. Take out a second mortgage or piggyback loan
To use this strategy effectively, you’ll need to take out a mortgage for the home’s purchase price, minus 20%. The remaining loan balance, minus the down payment, is then rolled into a second mortgage or piggyback loan.
So, if you buy a home for $200,000 and make a down payment of $15,000, the first mortgage will amount to $160,000. The second mortgage will amount to $25,000 since you are making a down payment of $15,000.
With this method, you avoid PMI since the LTV ratio on the first mortgage is 80%. But keep in mind that a second mortgage comes with a higher interest rate. So, you’ll want to pay it off sooner than later to avoid spending a fortune in interest.
2. Monitor the loan-to-value ratio
When you took out the mortgage loan, your lender used the home’s purchase price to determine the LTV ratio. However, an increase in the market value of your home could mean you are no longer obligated to pay for PMI.
By law, under the Homeowner’s Protection Act, PMI has to come off once the outstanding principal reaches 78% of the original loan amount.
Prepare to provide a professional appraisal to the lender to substantiate your claim. You may spend a few hundred dollars to get it done, but the cost savings will be worth it.
3. Request PMI Cancellation
If you’re nearing the 80% mark, the lender may be willing to remove the PMI from your loan. However, there’s also a possibility that you’ve already met some other criteria that warrant a request to cancel PMI coverage.
4. Refinance your mortgage
Perhaps your credit score was in shambles, and you were forced to take out a government-backed loan that requires you to carry PMI for the duration of the loan. Or maybe you got stuck with a conventional loan from a private lender that requires PMI until the LTV ratio reaches 70%.
Either way, refinancing your loan with laxer PMI restrictions may be a better option. But be sure to run the numbers to confirm that the new loan will not cost you more over time. (Remember, extending or resetting the loan term allows the lender more time to collect interest from you).
5. Shop for a loan that doesn’t require PMI
Compare loan programs to find one that doesn’t require PMI. For example, VA loans don’t require PMI, which can save you a bundle. Additionally, explore loans insured by the Federal Housing Administration (FHA) or the U.S. Department of Agriculture (USDA). Both of them offer programs designed to make homeownership more accessible to low- and moderate-income buyers.
Some lenders also offer mortgage products that allow you to make a small down payment and not have to pay for PMI. Bank of America’s “Affordable Loan Solution” mortgage product is a great example.
6. Ask about exemptions
If you’re a physician or veteran, you could also be exempt from PMI, even if you don’t put down 20%. Ask your lender for more details to determine if you qualify.
7. Consult the lender
Still no luck? Reach out to the lender to inquire about other ways to stop paying PMI. They may know of tips and tricks on how to get rid of PMI that may not be obvious to the average borrower.
Finally, if you still have questions or don’t understand how mortgage insurance works, seek clarification before signing on the dotted line. That way, you won’t be in for any surprises later on down the line.
Frequently Asked Questions
When is private mortgage insurance required?
PMI is typically required when a borrower makes a down payment of less than 20% of the purchase price of the home.
How much does private mortgage insurance cost?
The cost of PMI can vary depending on the size of the loan and the down payment amount. Generally, the cost of PMI is between 0.5% and 1.5% of the loan amount.
How long do I have to pay PMI?
Generally, PMI is required until the loan-to-value ratio (LTV) reaches 78%. Once the LTV reaches 78%, the lender must automatically cancel the PMI.
How can I avoid PMI?
Borrowers can avoid PMI by making a down payment of at least 20% of the purchase price of the home. Additionally, some lenders offer programs that allow borrowers to put down less than 20% and still avoid PMI.
What if I want to cancel my PMI?
Borrowers can request to cancel their PMI once their loan-to-value ratio (LTV) reaches 80%. The lender may require proof that the LTV has reached 80% before canceling the PMI.
Can I deduct PMI on my taxes?
PMI is not tax-deductible as of 2019. However, borrowers may be able to deduct the interest portion of their mortgage payments, which may include PMI.
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.
A hard credit inquiry occurs when lenders look at your credit score after you apply for new credit. This process can temporarily reduce your score by a small amount. Inquiries can stay on your credit report for up to two years, but they typically only impact your score for the first six to 12 months.
If you’re wondering “what is a hard inquiry on my credit?” here’s a quick breakdown: a hard inquiry, also known as a “hard pull,” occurs when a potential lender reviews your credit report after you apply for new credit.
There are two types of credit inquiries: hard inquiries and soft inquiries. Hard inquiries stay on your credit report for up to two years and temporarily hurt your score, while soft inquiries have no impact.
Below, we’ll explore the nuances of hard credit inquiries and explain how credit repair services can help you improve your credit after it takes a hit.
Key takeaways:
Hard credit inquiries will cause your score to briefly dip.
Inquiries will stay on your credit report for 2 years, though they only affect your score for about 12 months.
FICO® will usually lump multiple inquiries of the same type together if they occur within a window of 14 to 45 days.
Table of contents:
What is a hard credit inquiry?
A hard credit inquiry is a formal request by another party to review your credit report. These requests usually come from potential lenders who want to vet your credit history before agreeing to offer you a loan. The process of looking into your credit report generates a hard inquiry.
Creditors do this to check that your credit profile meets their requirements and to look for negative items on your report, like late payments or charge-offs. The more negative items that appear on your credit report, the less likely you are to get approved for new loans or credit cards.
Hard inquiries typically occur when applying for:
Credit cards
Auto loans
Student loans
Personal loans
Mortgages
Apartment rentals
New phone or utility applications
What is a soft credit inquiry?
A soft credit inquiry is a check into your credit report that will not affect your credit score. While hard inquiries are thorough reviews of your credit history, soft inquiries are partial reviews that aren’t as extensive. For example, soft pull credit cards are typically sent in the mail by lenders who’ve already reviewed your report and preapproved you.
Soft inquiries typically occur when:
You access your credit report
You are preapproved for a credit card without request
A potential employer performs a background check
You apply for certain utilities and services
How much does a hard inquiry affect your credit score?
Typically, a single hard inquiry will not majorly impact your credit score. For example, one hard inquiry will usually decrease your credit score by a small amount, such as five to 10 points or less. When thinking about what affects your credit score, keep this in mind: new credit makes up 10 percent of your FICO credit score.
A hard credit inquiry impacts your credit score based on your credit history. FICO will usually lump multiple inquiries of the same type together if they occur within two weeks to 45 days, depending on the exact model being used. But be careful about applying for different kinds of credit in a short time span.
Hard inquiries may have a greater effect on your credit score if:
You have few or no credit accounts
You have a short credit history
You authorize many different inquiries within a short time
When do hard inquiries fall off your credit report?
A hard inquiry will stay on your credit report for two years, though it only usually impacts your credit score for about 12 months. Inquiries within the past six months affect your credit the most.
If your credit history is substantial, a few hard inquiries on your credit report will not likely have a significant impact over the two years they are on your account.
How to remove a hard inquiry from your credit report
Credit bureaus cannot remove accurate, authorized inquiries. However, you can dispute inaccurate information and unauthorized inquiries with the credit bureaus. Federal law will support credit disputes against inaccurate or suspicious information on your credit report.
Here is how you can initiate this process:
Frequently review your credit reports and challenge inaccurate or unfair items. In some cases, unauthorized hard inquiries could signal that you’ve experienced identity theft.
Write letters to credit bureaus. This is one of the first steps in the credit inquiry removal process. List all relevant information about the hard inquiry, including the date it occurred.
Wait for credit bureaus to investigate your dispute. Hard inquiries will be removed from your report if the credit bureau determines that an error has been made, which could help improve your credit.
You can contact the Consumer Financial Protection Bureau for issues concerning your credit reports, including the dispute of a hard inquiry.
Can you avoid hard credit inquiries?
It is difficult to avoid hard credit inquiries if you apply for a loan or credit card. However, hard inquiries generally don’t significantly impact your credit, so don’t let them worry you too much.
If you want to improve your credit after it has been affected by a hard inquiry, consider focusing on the other factors that play a role in determining your credit health. These factors include your payment history, your credit usage, the length of your credit history and your credit mix.
It may be easier to improve your credit by paying your bills on time, monitoring your credit card balances and clearing any collection accounts that may appear on your credit report rather than trying to avoid credit inquiries.
Work to recover from hard inquiries with Lexington Law Firm
Our credit scores can fluctuate vastly over time, but recovering from a hit is possible. Consider using our services to help you challenge inaccurate, unfair or invalid items with Experian®, Equifax® and TransUnion®. We can also help you learn more about responsible credit management to maintain your credit health moving forward.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Brittany Sifontes
Attorney
Prior to joining Lexington, Brittany practiced a mix of criminal law and family law.
Brittany began her legal career at the Maricopa County Public Defender’s Office, and then moved into private practice. Brittany represented clients with charges ranging from drug sales, to sexual related offenses, to homicides. Brittany appeared in several hundred criminal court hearings, including felony and misdemeanor trials, evidentiary hearings, and pretrial hearings. In addition to criminal cases, Brittany also represented persons and families in a variety of family court matters including dissolution of marriage, legal separation, child support, paternity, parenting time, legal decision-making (formerly “custody”), spousal maintenance, modifications and enforcement of existing orders, relocation, and orders of protection. As a result, Brittany has extensive courtroom experience. Brittany attended the University of Colorado at Boulder for her undergraduate degree and attended Arizona Summit Law School for her law degree. At Arizona Summit Law school, Brittany graduated Summa Cum Laude and ranked 11th in her graduating class.
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.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Alexis Peacock
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.
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors’ opinions or evaluations.
As we head into peak home-buying season, signs of life have begun to spring up in the housing market.
Even so, still-high mortgage rates and home prices amid historically low housing stock continue to put homeownership out of reach for many.
Moreover, the National Association of Realtors agreed to a monumental $418 million settlement on March 15 following a verdict favoring home sellers in a class action lawsuit. Still subject to court approval, the settlement requires changes to broker commissions that will upend the buying and selling model that has been in place for years.
Housing Market Forecast for 2024
Elevated mortgage rates, out-of-reach home prices and record-low housing stock are the perennial weeds that experts say hopeful home buyers can expect to contend with this spring—and beyond.
“The housing market is likely to continue to face the dual affordability constraints of high home prices and elevated interest rates in 2024,” said Doug Duncan, senior vice president and chief economist at Fannie Mae, in an emailed statement. “Hotter-than-expected inflation data and strong payroll numbers are likely to apply more upward pressure to mortgage rates this year than we’d previously forecast.”
Despite ongoing affordability hurdles, Fannie Mae forecasts an increase in home sales transactions compared to last year. Experts also anticipate a slower rise in home prices this year compared to recent years, but price fluctuations will continue to vary regionally and depend strongly on local market supply.
U.S. home prices declined in January for the third consecutive month due to high borrowing costs, according to the latest S&P CoreLogic Case-Shiller Home Price Index. But prices year-over-year jumped 6%—the fastest annual rate since 2022.
Chief economist at First American Financial Corporation Mark Fleming predicts a “flat stretch” ahead.
“If the 2020-2021 housing market was too hot, then the 2023 market was probably too cold, but 2024 won’t yet be just right,” Fleming said in his 2024 forecast.
Will the Housing Market Finally Recover in 2024?
For a housing recovery to occur, several conditions must unfold.
“For the best possible outcome, we’d first need to see inventories of homes for sale turn considerably higher,” says Keith Gumbinger, vice president at online mortgage company HSH.com. “This additional inventory, in turn, would ease the upward pressure on home prices, leveling them off or perhaps helping them to settle back somewhat from peak or near-peak levels.”
And, of course, mortgage rates would need to cool off—which experts say is imminent despite rates edging back up toward 7%. For the week ending April 11, the 30-year fixed mortgage rate stood at 6.88%, according to Freddie Mac.
However, when mortgage rates finally go on the descent, Gumbinger says don’t hope they cool too quickly. Rapidly falling rates could create a surge of demand that wipes away any inventory gains, causing home prices to rebound.
“Better that rate reductions happen at a metered pace, incrementally improving buyer opportunities over a stretch of time, rather than all at once,” Gumbinger says.
He adds that mortgage rates returning to a more “normal” upper 4% to lower 5% range would also help the housing market, over time, return to 2014-2019 levels. Yet, Gumbinger predicts it could be a while before we return to those rates.
Nonetheless, Kuba Jewgieniew, CEO of Realty ONE Group, a real estate brokerage company, is optimistic about a recovery this year.
“[W]e’re definitely looking forward to a better housing market in 2024 as interest rates start to settle around 6% or even lower,” says Jewgieniew.
NAR Settlement Rocks the Residential Real Estate Industry
Following years of litigation, the National Association of Realtors (NAR) has agreed to pay $418 million to settle a series of antitrust lawsuits filed in 2019 on behalf of home sellers.
The plaintiffs claimed that the leading national trade association for real estate brokers and agents “conspired to require home sellers to pay the broker representing the buyer of their homes in violation of federal antitrust law.”
Though the landmark settlement is subject to court approval, most consider it a done deal.
The settlement requires NAR to enact new rules, including prohibiting offers of broker compensation on multiple listing services (MLS), the private databases that allow local real estate brokers to publish and share information about residential property listings. The rule is set to take effect in mid-July, once the settlement receives judge approval.
Moreover, sellers will no longer be required to pay buyer broker commissions and real estate agents participating in the MLS must establish written representation agreements with their buyer clients.
NAR denies any wrongdoing and maintains that its current policies benefit buyers and sellers. The organization believes it’s not liable for seller claims related to broker commissions, stating that it has never set commissions and that commissions have always been negotiable.
How Will the New Rules Impact the Buying and Selling Process?
Per the settlement’s terms, the costs associated with buying and selling a home are set to change dramatically.
“The primary things that will change are the decoupling of the seller commission and the buyer commission in the MLS,” says Rita Gibbs, a Realtor at Realty One Group Integrity in Tucson. “It’s gonna cause some chaos.”
While sellers will no longer be able to offer broker compensation in the MLS, there’s no rule prohibiting off-MLS negotiations. Because of this, Gibbs suspects buyers and sellers will continue offering broker compensation off the MLS.
The Department of Justice confirmed it will permit listing brokers to display compensation details on their websites. However, buyer agents will need to undergo the tedious task of visiting countless broker websites to find who’s offering what.
Michael Gorkowski, a Virginia-based real estate agent with Compass, is also trying to figure out how to manage the potential ruling.
“We often work with buyers for many months and sometimes years before they find exactly what they’re looking for,” Gorkowski says. “So in a case where a seller isn’t offering a co-broker commission, we will have to negotiate that the buyer pays an agreed-upon commission prior to starting their search.”
The Changes Will Impact These Home Buyers Most
“In the short term, it is absolutely going to injure buyers, especially FHA and VA buyers,” Gibbs says. “With rare exception, these buyers are not in a position to pay for their own agent.”
Gibbs says that if sellers don’t offer compensation, many buyers who can’t otherwise afford to pay a broker will choose to go unrepresented.
Gorkowski notes that veterans taking out VA loans face a unique challenge under the new rules. “[P]er the VA requirements, buyers cannot pay so it must be negotiated with the seller for now.”
As a result, NAR is calling on the U.S. Department of Veterans Affairs to revise its policies prohibiting VA buyers from paying broker commissions. Even so, there’s skepticism that the federal government will be able to implement changes in time for the July deadline.
Gibbs and Gorkowski are among the many agents especially concerned about first-time home buyers. After July, first-time and VA buyers will be required to sign a buyer-broker agreement stating that they will compensate their broker—but Gibbs says many won’t have the means to do so.
In this situation, agents would likely only show buyers homes where sellers are offering compensation.
“This is a very troubling situation,” Gorkowski says.
Housing Inventory Forecast for 2024
With many homeowners “locked in” at ultra-low interest rates or unwilling to sell due to high home prices, demand continues to outpace housing supply—and likely will for a while—even as some homeowners may finally be forced to sell due to major life events such as divorce, job changes or a growing family.
“I don’t expect to see a meaningful increase in the supply of existing homes for sale until mortgage rates are back down in the low 5% range, so probably not in 2024,” says Rick Sharga, founder and CEO of CJ Patrick Company, a market intelligence and business advisory firm.
Housing stock remains near historic lows—especially entry-level supply—which has propped up demand and sustained ultra-high home prices. Here’s what the latest home values look like around the country.
Yet, some hopeful housing stock signs have begun to sprout:
Existing inventory is showing signs of loosening as impatient buyers and sellers have begun to accept the reality of mortgage rates oscillating between 6% and 7%.
Home-builder outlook also continues to get sunnier, trending back up amid declining mortgage rates and better building conditions.
The most recent National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), which tracks builder sentiment, saw a fourth consecutive monthly rise, surpassing a crucial threshold with an increase from 48 to 51 in March. A reading of 50 or above means more builders see good conditions ahead for new construction.
At the same time, new single-family building permits ticked up 1% in February—the 13th consecutive monthly increase—according to the latest data from the U.S. Census Bureau and U.S. Department of Housing and Urban Development (HUD).
Residential Real Estate Stats: Existing, New and Pending Home Sales
Though some housing market data indicates signs of growth are in store this spring home-buying season, persistently high mortgage rates may hinder activity from fully flourishing.
Here’s what the latest home sales data has to say.
Existing-Home Sales
Existing-home sales came to life in February, shooting up 9.5% from the month before, according to the latest data from the NAR. Sales dipped 3.3% from a year ago.
Experts attribute the monthly jump to a bump in inventory.
“Additional housing supply is helping to satisfy market demand,” said Lawrence Yun, chief economist at NAR, in the report.
Existing inventory rose 5.9%—logging 1.07 million unsold homes at the end of February. However, there are still only 2.9 months of inventory at the current sales pace. Most experts consider a balanced market falling between four and six months.
Meanwhile, existing home prices continue to soar to unprecedented heights, reaching $384,500, which marks the eighth consecutive month of yearly price increases and a February median home price record.
New Home Sales
Sales of newly constructed single-family houses ticked down by a nominal 0.3% compared to January, but outpaced February 2023 sales by 5.9%, according to the latest U.S. Census Bureau and HUD data.
Amid a high percentage of homeowners still locked in to low mortgage rates, home builders have been picking up the slack.
“New construction continues to be an outsized share of the housing inventory,” said Dr. Lisa Sturtevant, chief economist at Bright MLS, in an emailed statement.
Sturtevant notes that declining new home prices are coming amid a recent trend of builders introducing smaller and more affordable homes to the market.
The median price for a new home in February was $400,500, down 7.6% from a year ago.
Source: U.S. Census Bureau and U.S. Department of Housing and Urban Development
Pending Home Sales
NAR’s Pending Homes Sales Index rose 1.6% in February from the month prior even as mortgage rates approached 7% by the end of the month. Pending transactions declined 7% year-over-year.
A pending home sale marks the point in the home sales transaction when the buyer and seller agree on price and terms. Pending home sales are considered a leading indicator of future closed sales.
The Midwest and South saw monthly transaction gains while the Northeast and West saw declines due to affordability challenges in those higher-cost regions.
“While modest sales growth might not stir excitement, it shows slow and steady progress from the lows of late last year,” said Yun, in the report.
Ongoing Affordability Challenges Could Throw Cold Water on Spring Home-Buying Hopes
Though down from its 2023 high of 7.79%, the average 30-year fixed mortgage rate in 2024 remains well over 6% amid rising home values. As a result, home buyers continue to face affordability challenges.
According to data from its first-quarter 2024 U.S. Home Affordability Report, property data provider Attom found that median-priced single-family homes remain less affordable than the historical average in over 95% of U.S. counties.
For one, the data uncovered that expenses are eating up more than 32% of the average national wage. Common lending guidelines require monthly mortgage payments, property taxes and homeowners insurance to comprise 28% or less of your gross income.
At the same time, home prices and homeownership expenses continue to outpace wage growth.
Consequently, the latest expense-to-wage ratio is hovering at one of the highest points over the past decade, according to the Attom report, despite some slight affordability improvements over the last two quarters.
“Affording a home remains a financial stretch, or a pipe dream, for so many households,” said Rob Barber, CEO at Attom.
Pro Tips for Buyers and Sellers
Here are some expert tips to increase your chances for an optimal outcome in this tight housing market.
Pro Tips for Buying in Today’s Real Estate Market
Hannah Jones, a senior economic research analyst at Realtor.com, offers this expert advice to aspiring buyers:
Know your budget. Instead of focusing on price, figure out how much you can afford as a monthly payment. Your monthly housing payment is influenced by the price of the home, your down payment, mortgage rate, loan term, home insurance and property taxes.
Be flexible about home size and location. Perhaps your budget is sufficient for a small home in your perfect neighborhood, or a larger, newer home further out. Understanding your priorities and having some flexibility can help you move quickly when a suitable home enters the market.
Keep an eye on the market where you hope to buy. Determine the area’s available inventory and price levels. Also, pay attention to how quickly homes sell. Not only will you be tuned in when something great hits the market, you can feel more confident moving forward with purchasing a well-priced home. A real estate agent can help with this.
Don’t be discouraged. Purchasing a home is one of the largest financial decisions you’ll ever make. Approaching the market confidently, armed with good information and grounded expectations will take you far. Don’t let the hustle of the market convince you to buy something that’s not in your budget, or not right for your lifestyle.
Pro Tips for Selling in Today’s Real Estate Market
Gary Ashton, founder of The Ashton Real Estate Group of RE/MAX Advantage, has this expert advice for sellers:
Research comparable home prices in your area. Sellers need to have the most up-to-date pricing intel on comparable homes selling in their market. Know the market competition and price the home competitively. In addition, understand that in some price points it’s a buyer’s market—you’ll need to be prepared to make some concessions.
Make sure your home is in top-notch shape. Homes need to be in great condition to compete and create a strong “online curb appeal.” Well-maintained homes and attractive front yards are major features that buyers look for.
Work with a local real estate agent. A real estate agent or team with a strong local marketing presence and access to major real estate portals can offer significant value and help you land a great deal.
Don’t put off issues that require attention. Prepare the home by making any repairs or improvements. Removing any objections that buyers may see helps focus the buyer on the positive attributes of the home.
Will the Housing Market Crash in 2024?
Despite some areas of the country experiencing monthly price declines, the likelihood of a housing market crash—a rapid drop in unsustainably high home prices due to waning demand—remains low for 2024.
“[T]he record low supply of houses on the market protects against a market crash,” says Tom Hutchens, executive vice president of production at Angel Oak Mortgage Solutions, a non-QM lender.
Moreover, experts point out that today’s homeowners stand on much more secure footing than those coming out of the 2008 financial crisis, with many borrowers having substantial home equity.
“In 2024, I expect we’ll see home appreciation take a step back but not plummet,” says Orphe Divounguy, senior macroeconomist at Zillow Home Loans.
This outlook aligns with what other housing market watchers expect.
“Comerica forecasts that national house prices will rise 2.9% in 2024,” said Bill Adams, chief economist at Comerica Bank, in an emailed statement.
Divounguy also notes that several factors, including Millennials entering their prime home-buying years, wage growth and financial wealth are tailwinds that will sustain housing demand in 2024.
Even so, with fewer homes selling, Dan Hnatkovskyy, co-founder and CEO of NewHomesMate, a marketplace for new construction homes, sees a price collapse within the realm of possibility, especially in markets where real estate investors scooped up numerous properties.
“If something pushes that over the edge, the consequences could be severe,” said Hnatkovskyy, in an emailed statement.
Will Foreclosures Increase in 2024?
In February, total foreclosure filings were down 1% from the previous month but up 8% from a year ago, according to Attom.
“These trends could signify evolving financial landscapes for homeowners, prompting adjustments in market strategies and lending practices,” said Barber, in a report.
Lenders began foreclosure on 22,575 properties in February, up 4% from the previous month and 11% from a year ago. Meanwhile, real estate-owned properties, or REOs, which are homes unsold at foreclosure auctions and taken over by lenders, spiked year-over-year in three states: South Carolina (up 51%), Missouri (up 50%) and Pennsylvania (up 46%).
Despite foreclosure activity trending up nationally and certain areas of the country seeing notable annual increases in REOs, experts generally don’t expect to see a wave of foreclosures in 2024.
“Foreclosure activity is still only at about 60% of pre-pandemic levels … and isn’t likely to be back to 2019 numbers until sometime in mid-to-late 2024,” says Sharga.
The biggest reasons for this, Sharga explains, are the strength of the economy—we’re still seeing low unemployment and steady wage growth—along with excellent loan quality.
Massive home price growth in homeowner equity over the past few years has also helped reduce foreclosures.
Sharga says that some 80% of today’s homeowners have more than 20% equity in their property. So, while there may be more foreclosure starts in 2024—due in part to Covid-era mortgage relief programs phasing out—foreclosure auctions and lender repossessions should remain below 2019 levels.
When Will Be the Best Time To Buy a Home in 2024?
Buying a house—in any market—is a highly personal decision. Because homes represent the largest single purchase most people will make in their lifetime, it’s crucial to be in a solid financial position before diving in.
Use a mortgage calculator to estimate your monthly housing costs based on your down. But if you’re trying to predict what might happen next year, experts say this is probably not the best home-buying strategy.
“The housing market—like so many other markets—is almost impossible to time,“ Divounguy says. “The best time for prospective buyers is when they find a home that they like, that meets their family’s current and foreseeable needs and that they can afford.”
Gumbinger agrees it’s hard to tell would-be homeowners to wait for better conditions.
“More often, it seems the case that home prices generally keep rising, so the goalposts for amassing a down payment keep moving, and there’s no guarantee that tomorrow’s conditions will be all that much better in the aggregate than today’s.”
Divounguy says “getting on the housing ladder” is worthwhile to begin building equity and net worth.
Frequently Asked Questions (FAQs)
Will declining mortgage rates cause home prices to rise?
Declining mortgage rates will likely incentivize would-be buyers anxious to own a home to jump into the market. Expect this increased demand amid today’s tight housing supply to put upward pressure on home prices.
What will happen if the housing market crashes?
Most experts do not expect a housing market crash in 2024 since many homeowners have built up significant equity in their homes. The issue is primarily an affordability crisis. High interest rates and inflated home values have made purchasing a home challenging for first-time homebuyers.
Is it smart to buy real estate before a recession?
If you’re in a financial position to buy a home you plan to live in for the long term, it won’t matter when you buy it because you will live in it through economic highs and lows. However, if you are looking to buy real estate as a short-term investment, it will come with more risk if you buy at the height before a recession.
The median annual salary for detectives is $52,120 for the most recent year reviewed, according to the Bureau of Labor Statistics.
This can be an exciting career for many people. Is there anything quite as satisfying as solving a big mystery? For anyone who is passionate about putting the puzzle pieces together until they discover the truth, working as a detective could be a dream job.
Read on to learn more about this career path. In addition to how much a detective makes a year, you can find out about the responsibilities and benefits involved.
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Track your credit score for free. Sign up and get $10.*
What Are Detectives?
Working as a private detective involves searching and piecing together financial, legal, and personal matters to help get to the root of an unanswered question. For example, private detectives can help find missing persons or investigate cybercrimes. Here’s a quick breakdown of some common on-the-job responsibilities that detectives tackle on a daily basis:
• Conduct interviews to help collect information
• Pursue evidence
• Review civil judgments and criminal history
• Plan and execute surveillance
• Search records (court, public, and online).
Some private detectives work for themselves and offer their services to a variety of clients, whereas others work for businesses, like law firms.
Regardless of where one works, being a detective can involve a good number of interviews and interpersonal interaction. For this reason, it may not be a good job for antisocial people. 💡 Quick Tip: Online tools make tracking your spending a breeze: You can easily set up budgets, then get instant updates on your progress, spot upcoming bills, analyze your spending habits, and more.
How Much Do Starting Detectives Make a Year?
In the early days of their career, detectives can expect to earn less until they gain more experience and a strong reputation for their sleuthing skills. When it comes to entry-level detective work, competitive pay can be fairly low. The lowest 10% of detective earners made less than $33,710 per year.
However, there is considerable room for improvement when it comes to salary for this role. The highest 10% earn more than $92,660 annually. This indicates that it can be possible to earn $100,000 per year as a detective.
Recommended: Work-at-Home Jobs for Retirees
What is the Average Salary for a Detective?
Some detectives earn an annual salary (a median of $52,120), but others earn an hourly wage. How much does a detective make an hour? The median hourly wage is $25.06.
How much someone earns on average working as a detective can vary based on where they live and the industry they work in. When it comes to working in different industries, these are the median annual wages for detectives in a few different industries for the most recent year available:
• Government: $64,220
• Professional, scientific, and technical services: $61,280
• Investigation, guard, and armored car services: $47,280
• Retail trade: $37,290
The state someone works in also plays a big role in their earning potential. The following table highlights how average detective wages can vary by state, with salaries listed from highest to lowest.
What is the Average Detective Salary by State for 2023
State
Annual Salary
Monthly Pay
Weekly Pay
Hourly Wage
Wisconsin
$68,202
$5,683
$1,311
$32.79
Alaska
$66,013
$5,501
$1,269
$31.74
Massachusetts
$65,834
$5,486
$1,266
$31.65
Oregon
$65,791
$5,482
$1,265
$31.63
New Mexico
$65,593
$5,466
$1,261
$31.54
North Dakota
$65,592
$5,466
$1,261
$31.53
Washington
$65,380
$5,448
$1,257
$31.43
Minnesota
$64,657
$5,388
$1,243
$31.09
Hawaii
$64,277
$5,356
$1,236
$30.90
Ohio
$63,203
$5,266
$1,215
$30.39
Colorado
$62,621
$5,218
$1,204
$30.11
Nevada
$62,417
$5,201
$1,200
$30.01
South Dakota
$61,992
$5,166
$1,192
$29.80
New York
$61,597
$5,133
$1,184
$29.61
Iowa
$61,016
$5,084
$1,173
$29.33
Rhode Island
$60,938
$5,078
$1,171
$29.30
Connecticut
$60,392
$5,032
$1,161
$29.03
Tennessee
$60,347
$5,028
$1,160
$29.01
Vermont
$60,038
$5,003
$1,154
$28.86
Utah
$59,824
$4,985
$1,150
$28.76
Mississippi
$59,304
$4,942
$1,140
$28.51
Delaware
$59,138
$4,928
$1,137
$28.43
Virginia
$58,393
$4,866
$1,122
$28.07
Illinois
$57,890
$4,824
$1,113
$27.83
Maryland
$57,300
$4,775
$1,101
$27.55
New Jersey
$56,643
$4,720
$1,089
$27.23
California
$56,576
$4,714
$1,088
$27.20
Louisiana
$56,450
$4,704
$1,085
$27.14
Pennsylvania
$56,431
$4,702
$1,085
$27.13
Nebraska
$56,157
$4,679
$1,079
$27.00
Kansas
$55,812
$4,651
$1,073
$26.83
Missouri
$55,599
$4,633
$1,069
$26.73
Maine
$55,350
$4,612
$1,064
$26.61
South Carolina
$55,077
$4,589
$1,059
$26.48
New Hampshire
$54,828
$4,569
$1,054
$26.36
Oklahoma
$54,383
$4,531
$1,045
$26.15
Idaho
$54,051
$4,504
$1,039
$25.99
Wyoming
$54,049
$4,504
$1,039
$25.99
North Carolina
$53,940
$4,495
$1,037
$25.93
Texas
$53,624
$4,468
$1,031
$25.78
Indiana
$53,401
$4,450
$1,026
$25.67
Arizona
$52,297
$4,358
$1,005
$25.14
Kentucky
$52,131
$4,344
$1,002
$25.06
Michigan
$51,864
$4,322
$997
$24.94
Montana
$51,509
$4,292
$990
$24.76
Alabama
$50,866
$4,238
$978
$24.46
Arkansas
$49,398
$4,116
$949
$23.75
Georgia
$47,386
$3,948
$911
$22.78
West Virginia
$43,583
$3,631
$838
$20.95
Florida
$41,937
$3,494
$806
$20.16
Source: ZipRecruiter
💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.
Detective Job Considerations for Pay & Benefits
Detectives who work for businesses such as large corporations or law firms on a full-time basis often receive employer-sponsored benefits as a part of their compensation package. These benefits can include paid time off, retirement accounts with employer contribution matches, and health insurance.
However, many detectives work on a part-time basis or are self-employed and then are on the hook for supplying their own benefits which can be quite expensive.
Recommended: The Highest Paying Jobs in the US
Pros and Cons of Detective Salary
Detectives can earn a very good salary, and the work can be very interesting.
However, the tradeoff may not be worth it for some. Working as a detective often involves long and varied hours due to the nature of their work — especially when they are conducting surveillance. Some people may find that working on weekends, nights, or holidays isn’t worth the salary. It simply may not align with their career goals and the desired work-life balance.
The Takeaway
Skilled detectives stand to earn a lot of money (close to six figures) as they work their way up in their industry. This can be a very exciting, but also extremely demanding role.
With SoFi, you can keep tabs on how your money comes and goes.
FAQ
Can you make 100k a year as a detective?
It is possible to make $100,000 a year or more as a detective. The top 10% of earners in this field make $92,660 or more per year. As a detective gains years of experience and improves their skills, they can expect to earn more competitive pay.
Do people like being a detective?
Many people pursue a career as a detective because they are passionate about the work they do and enjoy a lot of satisfaction from their job. It’s worth noting that this job can require a lot of personal interactions and may not be the best fit for anyone who is antisocial.
Is it hard to get hired as a detective?
Getting hired as a detective can be competitive, but there is currently anticipated to be 3,800 openings for private detectives each year until 2032. There is also a projected 6% growth in employment opportunities, so someone with the right qualifications should be able to find a job in this field.
Photo credit: Andrii Lysenko
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Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. In this episode:
Explore how to protect yourself from identity fraud, understand its emotional toll and learn fraud recovery steps.
How can you protect yourself from identity theft and fraud?
What steps should you take if you become a victim of financial fraud?
Hosts Sean Pyles and Sara Rathner delve into the unsettling world of identity theft and fraud prevention to help listeners safeguard their finances and wellbeing. They begin with a discussion on the various facets of identity theft, with tips and tricks on identifying fraudulent activity, enhancing personal banking security and dealing with the aftermath of having your identity compromised. Then, they discuss the differences between identity fraud and scams, the importance of good cyber hygiene, and the steps to take immediately if your personal information is breached.
Sean also speaks with John Breyault, Vice President of Public Policy, Telecommunications and Fraud at the National Consumers League, about the current trends in identity theft and the forms of fraud that are on the rise in 2024. They cover topics such as new account fraud, the impact of zero-day vulnerabilities on personal data security and the necessity for consumers to stay vigilant with software updates and report incidents promptly.
They also explore how victims can navigate the process of recovering from fraud, including freezing credit reports, changing passwords, and engaging with financial institutions and law enforcement to document the crime and seek restitution.
Check out this episode on your favorite podcast platform, including:
NerdWallet stories related to this episode:
Episode transcript
This transcript was generated from podcast audio by an AI tool.
Sean Pyles:
So there you are just going along with your life, running errands, finishing work projects, walking the dog, making lunch, paying bills, and then you realize, something is very, very wrong. Someone has gotten into your accounts and stolen your money.
Charlene MacNeil:
August 28th was a normal day. I took my cat to the vet, went and got groceries. That morning, I checked my online banking just to make sure I had enough money to do everything. It just seemed like a normal day and then everything changed that evening when I got that email.
Sean Pyles:
Welcome to NerdWallet’s Smart Money podcast. I’m Sean Pyles.
Sara Rathner:
And I’m Sara Rathner.
Sean Pyles:
We’re back with our Nerdy deep dive into identity theft, fraud, and scams, and their potentially devastating effects on your finances if you become a victim. As we said last episode, and we’ll continue to reiterate over and over, these crimes do not discriminate. Absolutely anyone can find themselves in deep water with their money situation because these financial criminals have so very many tools and options at their disposal.
Sara Rathner:
Yeah. And, Sean, I think we also want to repeat the message that this doesn’t just happen to you because you’re ignorant or careless. It happens because as our guest last week said, “We have to be 100% right all the time.” We have to be watching our accounts and changing our passwords, realizing we’re talking to someone who’s pretending to be from a bank, etc., etc. And the criminal only has to be right once to get what they’re after. So if they catch you in a moment where you’re tired or hangry, they might just do that.
Sean Pyles:
So the last thing that you should feel is embarrassed or ashamed if you do become a victim of ID theft or a scam. Angry and upset, yes, ashamed, no. The more we all talk about it, the more educated we become and the harder we make it for the thieves and scammers.
Sara Rathner:
Yes. Let’s take our power back.
Sean Pyles:
Yes. So last week we talked about identity theft, how it happens, what to be on the lookout for, and how to protect yourself as much as possible. Today we’re going to look at the next step in that process, which is the identity fraud that happens after the theft.
Sara Rathner:
It’s the credit card opened in your name. It’s the tax return that isn’t really yours. It’s the healthcare account that also isn’t yours that gets the thief medical care on your dime. Listener, we’re going to help you understand what it looks like, how to avoid it, and what to do if it happens to you.
Sean Pyles:
All right, well, we want to hear what you think too, listeners. Tell us your stories of identity theft or share how you’re working to fight it or recover from it. Leave us a voicemail or text the Nerd hotline at (901) 730-6373. That’s (901) 730-NERD, or email a voice memo to [email protected].
Sara Rathner:
So, Sean, where do we start today?
Sean Pyles:
Well, we’re going to start today with a real world tale of identity fraud. We’re hearing from Charlene MacNeil, a mom from Alberta, Canada. She’s got a story about what happened when someone was able to get into her account at BMO Bank, a subsidiary of the Bank of Montreal. Then after Charlene, we’re going to talk with an expert in ID fraud, who’s seen it all in his capacity at the National Consumers Union. Charlene MacNeil, welcome to Smart Money.
Charlene MacNeil:
Hello. Thanks for having me.
Sean Pyles:
Charlene, you experienced a form of bank account fraud. When did you first realize that something was wrong?
Charlene MacNeil:
On August 28th, I had just put my kids to bed and I got an email pop up on my cell phone saying that I had a credit limit alert from BMO and it told me that I had $33 left in my account.
Sean Pyles:
And so that was an indication that you didn’t have sufficient funds or maybe your credit was run up. What were you thinking when you first saw that?
Charlene MacNeil:
I panicked when I saw the $33. It just didn’t make sense. So I immediately went onto my online banking and noticed that my line of credit was maxed to the $15,000 mark.
Sean Pyles:
And what steps did you take once you realized that something was very wrong with your account?
Charlene MacNeil:
I immediately called BMO and just told them the email that I got and she told me that she would cancel my card right away and my account and to go to the branch immediately the next day to file a report of what had happened.
Sean Pyles:
So the next day, did you go in and talk with them about that?
Charlene MacNeil:
Yeah, I went in the next morning and I told her what had happened and she had told me that there was a text message that was sent to me like a one-time passcode, and I tried to think back to the day before because I do get text messages or calls from scammers sometimes, but that summer I felt like I had gotten quite a few, but I just kind of always ignored them, so I didn’t really think much of it. And then when she was looking at my account, she asked me if I knew the company Wise, because she noticed that’s where the money had been sent and I Googled Wise right away because I didn’t know what she was talking about.
And when I Googled it, it said international money sending. So she was, “Oh, that’s a red flag. That’s crazy.” She made me feel like we should be able to get the money back, that she would fill out this report and send it off and it should be okay. What had happened was they took my line of credit money, transferred it to my checking account, and they set up a bill payment to the company Wise, and then they sent out the money that way through a bill payment.
Sean Pyles:
So a slightly convoluted way to get the money that you had from your line of credit over to them essentially?
Charlene MacNeil:
Yes, exactly.
Sean Pyles:
And so it seems like things are maybe going, okay, this was a frustrating experience, but you thought you were going to be able to get your money back?
Charlene MacNeil:
Yeah, I went back to work and I felt relieved. “Okay, that’s done. It should be fine.”
Sean Pyles:
But that’s not what ended up happening.
Charlene MacNeil:
No. Two days later, the teller that had helped me, she called me and started the conversation with, “I have some very unfortunate news. They will not refund that money to your line of credit.” And my heart fell because I was just, “What do you mean?”
Sean Pyles:
And this was $15,000 they said they weren’t going to refund?
Charlene MacNeil:
I had a balance on there before. So really they just took whatever I had left in my line of credit and sent it out, so it was like $9,700.
Sean Pyles:
And what reason did they give you for why you wouldn’t be able to get this money back?
Charlene MacNeil:
They had told me that they tried reaching out to Wise, but the money had already been transferred. So whoever the bill was made out to through the company, they had the money and that’s it. They couldn’t get the money back, but she did say, “If you want, we could escalate this and see if there’s something else that they could do.”
Sean Pyles:
Because there have to be some kind of protections. This was an instance of fraud. You didn’t authorize this transfer of money?
Charlene MacNeil:
No, but as this continued on, they kept saying that I had gotten this one time passcode sent to me August 28th at 4:20 p.m., but I don’t recall entering this six digit code that they’re telling me that I entered. But from their records, it shows I entered the code and that it was all good.
Sean Pyles:
It’s also possible that someone could have somehow gained access to your phone number or gotten that code themselves. Correct?
Charlene MacNeil:
That’s what I am trying to explain to them. I just know that I didn’t enter this code.
Sean Pyles:
So did you end up escalating this then?
Charlene MacNeil:
I did. I escalated it three times and then I finally got a final response just saying that it’s really unfortunate, but we can’t get that money back. And they just kept telling me it’s the one-time passcode and that’s the reason why the money was sent out that I pretty much authorized it to be sent out.
Sean Pyles:
I’m really sorry to hear that. Do you know how the people were able to get into your account?
Charlene MacNeil:
I don’t know. I just have a lot of people just giving me different ideas of how maybe it could have happened. I had a conference in Vegas at the beginning of August and it was on the news that Vegas was having issues with scammers.
Sean Pyles:
Was it an issue with people getting on public Wi-Fi and logging into their bank accounts?
Charlene MacNeil:
That or people also told me that maybe somebody walked by my purse and scanned my purse, but people have told me that too, thinking it’s because of the Wi-Fi.
Sean Pyles:
So I’m wondering, Charlene, how has this experience made you feel about the safety of your money? Have you thought about switching banks, anything like that?
Charlene MacNeil:
I’m very nervous because it blows my mind to think that somebody can get onto your online banking and then move money like that without a signature or maybe voice recognition or something. I shut down my line of credit now and I’m kind of waiting to hear what’s going to happen, but I am really considering moving banks. I wish this almost happened on a credit card because I feel like credit card companies have your back more than the bank.
Sean Pyles:
Yeah. Your story brings me back to a theme which is that fraud, scams, anyone can experience these things and it’s not like you followed a typical playbook of seeing a text message come through on your phone or clicking a link in email and entering your login credentials. You don’t know how someone got your information. It just exemplifies that you could be doing everything right and somehow people could still get your information and still get into your bank.
Charlene MacNeil:
Yeah, exactly. August 28th was a normal day. I took my cat to the vet, went and got groceries. That morning, I checked my online banking just to make sure I had enough money to do everything. It just seemed like a normal day and then everything changed that evening when I got that email.
Sean Pyles:
What do you think your next steps will be?
Charlene MacNeil:
I’m not very hopeful, to be honest. It’s something that I just have to accept. And I mean, I’ve done better the last couple months, but in the beginning it was very difficult. I lost lots of sleep, missed some work. It was very stressful. And you feel like you’re the one that did something wrong.
Sean Pyles:
Well, I’m sorry that you experienced this. I’m wondering if there’s anything that you would like listeners to keep in mind as they try to protect themselves and their finances online?
Charlene MacNeil:
Yeah, I mean it’s so important to be checking your banking probably daily just to make sure everything is going as you think. Be very careful, I guess, on public Wi-Fi. I was actually just on a trip with my family to Mexico and so many people use public Wi-Fi. And I did in Vegas just to load my boarding passes.
I did not check my online banking. I know a lot of people when they hear me say that I was on public Wi-Fi in Vegas. I did not check my online banking, but I was on public Wi-Fi and I guess people can be sitting in that room and gain all of your information. So I don’t know. I don’t want people to be paranoid, but I kind of feel paranoid.
Sean Pyles:
It might not be a bad idea in the year 2024 when if you’re on a public Wi-Fi network, someone who’s also on that can get into your device very easily. That’s the truth of where we are right now.
Charlene MacNeil:
Yes, and I heard once they’re in, then they can be in there for a while. If I would’ve checked my online banking a day or two later, they could have seen me enter my codes. Yeah, it’s very invasive.
Sean Pyles:
Well, Charlene, thank you for sharing your story with us today.
Charlene MacNeil:
Well, thank you for hearing me.
Sara Rathner:
Sean, this just makes me so sad and angry that anybody has to deal with this because it’s just not fair. It’s not a fair fight against these really savvy identity thieves.
Sean Pyles:
It’s really not. And what’s so worrisome to me about Charlene’s story is that she still can’t pinpoint exactly how these criminals got into her account. Again, it just shows that this kind of fraud can happen to anyone, but as tempting as it might be to just throw up your hands and yell, “I give up,” that just feeds the beast and doesn’t do us any good.
Sara Rathner:
Well, I’m looking forward to some advice on how to avoid all of this and anything that we could do to keep it from happening to us, to me, to my loved ones, and of course to our listeners.
Sean Pyles:
Well, our next guest will walk us through some of what happens when you’re the victim of identity fraud and give advice on how to avoid it and recover from it if it does happen to you. John Breyault is Vice President of Public Policy Telecommunications and Fraud at the National Consumers League. That’s coming up. Stay with us.
John, thanks so much for joining us on Smart Money.
John Breyault:
Hey, thanks for having me on the show. I really appreciate it.
Sean Pyles:
So last week we spent some time explaining identity theft and the various ways that bad actors can steal our IDs from us. And today, we’re going to explore what they do with all that information once they’ve got it. So I’d like to start by asking you to explain maybe the difference between ID fraud and scams. We’re going to talk about scams in our next episode, but what differentiates the two?
John Breyault:
Both scams and ID theft, we call fraud, right? It’s a crime where it involves typically a scammer trying to acquire information or funds that they can use for their own purposes. So identity fraud is definitely a subset of fraud overall, but it is certainly one of the biggest subsets.
So we know that, for example, the Federal Trade Commission every year puts out their Consumer Sentinel Data Book. It’s a compilation of millions of fraud complaints that they get from agencies and organizations like mine all over the country. And in 2022, which is their most recent data, they received 5.2 million fraud reports and the number one category that they heard about was identity theft. And so clearly this continues to be a major problem that the biggest enforcement agency out there is hearing about. Definitely identity theft is one of the biggest types of fraud, and one I think we continue to see consumers of every age level, every education level, every demographic be victimized by.
Sean Pyles:
And when you think about specific ways that ID fraud and scams can manifest, what makes them distinct?
John Breyault:
I think what makes each scam distinct is often, number one, what is the entry point for the scammer? Is it one where they have to interact with the victim, say by sending them a link that the consumer clicks on and then provides the data to the identity for the scammer that’s then used to commit fraud? Or is this something where the scammers can commit identity fraud really with no interaction with the victim at all?
We know, for example, that due to data breaches, that’s practically limitless information about almost every American out there on criminal forums on the dark web that can be used to basically commit identity theft as a service. With a few hundred dollars in Bitcoin, you too can hire an identity thief to do things like start bogus credit card accounts in your name or try and get healthcare benefits or unemployment insurance. These are all very common types of identity theft that’s out there, and that doesn’t require any of us to do anything.
Sean Pyles:
So you touched on this a little bit, but John, can you give us a sense of what you’re seeing out there right now? What are some of the most prevalent forms of identity fraud in 2024?
John Breyault:
Yeah, I would say some of the fastest growing types of identity theft is new account fraud. It’s not necessarily a new type of identity theft. We’ve seen scammers using information to create new credit card accounts for decades at this point, but certainly it is returning to its previous position as one of the top types of identity fraud. And it’s happening because the resources that identity thieves were devoting to government benefits fraud is going down. As those pandemic relief programs start to wind down, there’s less money for the identity thieves to steal. And so they’ve gone back to some of the tried and true types of identity fraud.
Sean Pyles:
Is there anything that’s relatively new that consumers should know about that maybe they haven’t really heard about?
John Breyault:
What we have seen over the past year has been a staggering increase in the number of data breaches attributable to what are called zero-day vulnerabilities. And if you’ve never heard of a zero-day vulnerability, that’s okay. Basically what it means is it’s a vulnerability that nobody else has identified. Think of it as having a key to a vault that nobody else has, and until the people who own that vault figure out that you have that key, they have no reason to try and solve the problem or change the lock.
Sean Pyles:
So this could be something like a weakness in our phones’ operating systems that allows a bad actor to get into our phones.
John Breyault:
Yes, exactly. It’s operating systems like Windows. It is browsers that can be hacked. It could be Microsoft Office. Really any software program can have a zero-day vulnerability. And so what’s concerning to us is just the increase in breaches that were attributable to zero days. It’s gone up. I believe the number that the ITRC cited was by more than 100% over the past 12 months.
Sean Pyles:
Do we know why this might be? Is it that software developers are maybe pushing out code a bit faster than they should and they aren’t combing through for vulnerabilities? Or is it that hackers are really zeroing in on these vulnerabilities and trying to exploit them?
John Breyault:
Well, I think that’s the $64,000 question, as they say. We have theories on how that is. One of the more worrying ones is that the scammers have learned how to automate their search for zero-day vulnerabilities using artificial intelligence. And if they’re able to search for these zero days at scale, a very low cost, that is scary because I think AI has revolutionized so many other facets of our economy and businesses and government over the past several years.
It definitely has the potential to do the same thing when it comes to fraud. I think many of us who work on fraud and identity theft on a daily basis, we are thinking of the potential of this as the same kind of potential for supercharging fraud and scams that we saw when the internet sort of became a technology that everybody was using. That’s the kind of scale of the threat that’s out there.
Sean Pyles:
And so when people get notifications on their phone saying, “Oh, you have a new software update to patch a security vulnerability,” this might be something that is being addressed. Correct? And it’s important for people to actually update their phones regularly so that they are having the most secure software possible?
John Breyault:
Yes. Cyber hygiene is definitely one of the lowest cost and easiest ways for consumers to reduce their risk of falling victim to identity fraud because once they are detected, the operating systems and browser makers are usually pretty quick to plug the hole. But that is often dependent on consumers paying attention to those little pop-up boxes that say, “Do you want to update your browser? Do you want to update windows?” And actually taking action. Definitely don’t wait to update. Make sure you do that because it really is one of the easiest ways to reduce your risk.
Sean Pyles:
So, John, walk us through some of the ways that listeners can protect themselves from identity fraud. We heard last week about protections from identity theft. So let’s assume that the theft has already happened and now we have to react to prevent the fraud. What are some first steps here?
John Breyault:
Well, number one, I would say act quickly. We know that identity theft is a crime that often relies on consumers doing nothing. If you know that your information has been compromised, take steps to reduce your risk. For many people, that’s going to start with freezing their credit report. All of the major credit reporting bureaus offer consumers the ability to freeze credit.
Number two, I would say try and limit the damage to the extent you can. For example, particularly if your primary email address has been compromised, that can be the entry point for scammers to take over lots of other accounts, your bank accounts, your social media accounts. So definitely change the password on your primary email account right away and turn on two-factor authentication as well to add an additional layer that the scammers have to get through. They’re going to try and use that entry point.
I would do the same for any financial accounts that you may have linked to that email account. In addition, call the banks and let them know what’s going on so that they can place fraud alerts on your accounts. And then finally, make sure and get a police report. Identity theft is a crime in all 50 states, but consumers, I think particularly if you start to see activity related to identity theft, having that report is often documentation that will be needed to get the kind of help from not just law enforcement, but also from banks and other entities that you’ll need.
I think, unfortunately, we know that local police departments aren’t always super excited to create those reports, so you may have to be persistent to do that, but definitely local police departments is the place I would start. And then work your way up to the State Attorney General and ultimately the Federal Trade Commission.
Sean Pyles:
Related to what you were just discussing, let’s go a step further. So let’s say someone took your information and then fraud happened before you could get to it. Who should you really go to for help? Let’s talk about reporting it and starting to deal with the fallout of fraud.
John Breyault:
Yeah. Once fraud has occurred, typically you still have rights. For example, an identity thief created a credit card in your name and started running a bunch of charges. You aren’t liable for that, but you’re going to need to take steps like have that identity theft affidavit and a police report ready to show to creditors who may wonder why you haven’t been paying your credit card bill that you just opened weeks ago. So definitely I would say getting those reports is going to be one key piece of information to have.
Also, call and talk to the entities who the identity thief is using in your name. Let them know who you are, what’s been going on, and see what you can do to address the fraud. Most of us don’t spend all day every day recovering from identity theft, but most of the financial institutions do have people who are devoted to helping you through that journey. But you’ve gotta keep records of that. Grab a notebook, create a little Word document on your computer, and start logging every communication that you have with those entities so that you can create a paper trail because you can’t just depend on them to know where you are in the process and to ensure that in one place they’re going to quickly try and use that information to commit identity theft in other places as well.
Sean Pyles:
Earlier in this episode, I spoke with a woman who experienced a form of bank fraud. A fraudster got access to her line of credit, and her bank didn’t offer much in the way of resolving the issue. She didn’t get her money back. And I’ve heard other similar stories before. What sort of recourse do people in that situation have to try to recoup their losses?
John Breyault:
Generally, if the consumer victim is not the one who is actually hitting send on the money transfer, whether it’s through a payment app or through a wire transfer from your bank, then you have protections under federal law as well as many state laws. So I think it’s important that if in a case like that where it sounds like the scammer got in because they were able to hack this woman’s credentials that she should have rights. Certainly if the bank seems unwilling to work with her, I would say your next stop should be the State Attorney General as well as groups like the Identity Theft Resource Center, which have great resources and help coach victims through recovering from these identity theft schemes.
Sean Pyles:
Yeah. And your advice just there brings up the idea of jurisdiction. The woman that I spoke with was based in Canada, where they have different rules and regulations than we do in the U.S. So I think it’s important for anyone to be familiar with what laws protect them where they’re living, whether it’s in a different country or a specific state.
John Breyault:
Yeah, absolutely. And I would say a great place to start that journey of learning what your rights are and what laws may apply is the FTC has a great website at identitytheft.gov where you can start to go through their checklist and create an identity theft recovery plan.
Sean Pyles:
Well, one final question. I’m asking this of all the experts that we’re talking with for this series, so I’ll ask you too. Have you ever fallen victim to a scam or identity theft or fraud?
John Breyault:
I definitely have. Fortunately for me, it wasn’t sort of life altering, but what got me interested in working on fraud was a trip I took to Jamaica on vacation where I was in a bar, which probably tells you the first thing that I wasn’t thinking very clearly, but one of the locals came up to me and said, “Hey, if you give me $20, I can get you cheaper drinks at the bar.” And I said, “Great.” And so I gave him the $20 and he turned around, bought some beers for him and his friends and just ignored me.
And I wasn’t about to start a fight with a bunch of guys in a bar in Jamaica. So I just said, “Okay, lesson learned.” Don’t always take what people say to you at face value and listen to your gut before you hand over your money. Unfortunately, in this country we have, when it comes to identity theft and being a victim of fraud, we often have this tendency to blame the victim.
And there’s a real stigma attached to being a victim of fraud. And we often use terms like, “You fell for a scam.” Or people say, “I can’t believe I was so stupid.” Or we use terms like, “pig butchering scams,” which suggest that somehow the victim is the one who’s culpable. I think that that is wrong. If I could have one additional message for listeners of this podcast, it’s show a little compassion the next time somebody tells you their fraud story and recognize that these are people who are victims of organized, multinational, very savvy criminals, and help them work through sort of this crime they’ve been a victim of and encourage them to report it.
Sean Pyles:
Well, John, thank you again for talking with us.
John Breyault:
I appreciate it, Sean.
Sean Pyles:
Sara, one thing that I really want listeners to remember is that the cost of experiencing identity fraud can go well beyond the money loss, which of course can be significant. People who are victimized in this way often suffer mental health consequences. Many feel ashamed or like they brought this upon themselves. So like John said, if you’ve experienced a loss like this, get help. Yes, contact the FTC and your local police, but also think about talking with a loved one or a therapist who can help you process your emotions around this.
Sara Rathner:
Yeah, know that you are not alone. You probably know people who have gone through something like this and you could commiserate with each other. The important thing is to receive nonjudgmental help from people who are on your side and will help you wrap your head around everything that’s happened to you, and you can come out the other side stronger and more determined to protect yourself in the future. Okay, Sean, tell us what’s coming up in Episode 3 of this series. I assume there are more horrors on the way.
Sean Pyles:
Unfortunately, yes. Next week we’re going to walk into the lion’s den of the scammiest people on earth. Imposter scams, romance scams, phishing, vishing, all in the name of parting you from your money.
Speaker 5:
That’s what these scammers try to do. They try to rush you into making a decision by telling you something’s urgent or an emergency like the family emergency scam, where they’ll say, “Oh, this is your grandchild and I’m overseas, and I need you to wire money fast because I’m jail or in the hospital.”
Sara Rathner:
Yikes. Well, for now at least, that’s all we have for this episode. Do you have a money question of your own? Turn to the Nerds and call or text us your questions at (901) 730-6373. That’s (901) 730-NERD. You could also email us at [email protected]. Also visit nerdwallet.com/podcast for more info on this episode. And remember to follow, rate and review us wherever you’re getting this podcast.
Sean Pyles:
This episode was produced by Tess Vigeland. I helped with editing, Kevin Berry helped with fact checking, Sara Brink mixed our audio.
Sara Rathner:
And here’s our brief disclaimer. We’re not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.
Sean Pyles:
And with that said, until next time, turn to the Nerds.