For a 30-year fixed-rate mortgage, the average rate you’ll pay is 6.94% today, a decrease of -0.14% over the last week. The average rate for a 15-year fixed mortgage is 6.41%, which is a decrease of -0.13% since last week. For a look at mortgage rate movement, see the chart below.
The Federal Reserve has been postponing interest rate cuts because inflation has been slow to improve. While experts still expect mortgage rates to gradually move lower in the coming months, housing market predictions can always change in response to economic data, geopolitical events and more.
Today’s average mortgage rates
Today’s average mortgage rates on Jul. 15, 2024, compared with one week ago. We use rate data collected by Bankrate as reported by lenders across the US.
Mortgage rates are expected to slowly decline in 2024. You can take advantage by comparing loan offers from multiple lenders to get the lowest rate. Start by entering your information below to get a custom quote from one of CNET’s partner lenders.
About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool features partner rates from lenders that you can use when comparing multiple mortgage rates.
What are the different mortgage types?
Each mortgage has a loan term, or payment schedule. The most common mortgage terms are 15 and 30 years, although 10-, 20- and 40-year mortgages also exist. With a fixed-rate mortgage, the interest rate is set for the duration of the loan, offering stability. With an adjustable-rate mortgage, the interest rate is only fixed for a certain amount of time (commonly five, seven or 10 years), after which the rate adjusts annually based on the market. Fixed-rate mortgages are a better option if you plan to live in a home in the long term, but adjustable-rate mortgages may offer lower interest rates upfront.
30-year fixed-rate mortgages
The average interest rate for a standard 30-year fixed mortgage is 6.94% today. A 30-year fixed mortgage is the most common loan term. It will often have a higher interest rate than a 15-year mortgage, but you’ll have a lower monthly payment.
15-year fixed-rate mortgages
Today, the average rate for a 15-year, fixed mortgage is 6.41%. Though you’ll have a bigger monthly payment than a 30-year fixed mortgage, a 15-year loan usually comes with a lower interest rate, allowing you to pay less interest in the long run and pay off your mortgage sooner.
5/1 adjustable-rate mortgages
A 5/1 ARM has an average rate of 6.59% today. You’ll typically get a lower introductory interest rate with a 5/1 ARM in the first five years of the mortgage. But you could pay more after that period, depending on how the rate adjusts annually. If you plan to sell or refinance your house within five years, an ARM could be a good option.
What’s behind today’s high mortgage rates?
At the start of the pandemic, mortgage rates were near record lows, around 3%. That all changed as inflation began to surge and the Federal Reserve kicked off a series of aggressive interest rate hikes starting in March 2022 to slow the economy, which indirectly drove up mortgage rates.
Now, more than two years later, mortgage rates are still around 7%. Over the last several months, mortgage rates have fluctuated in response to economic data and investors’ expectations as to when the Fed will start to lower rates.
Today’s homebuyers have less room in their budget to afford the cost of a home due to elevated mortgage rates and steep home prices. Limited housing inventory and low wage growth are also contributing to the affordability crisis and keeping mortgage demand down.
Will we see lower mortgage rates in 2024?
Most experts predict mortgage rates will fall below 7% in the coming months. However, a sustained downward trend will depend on several factors, including upcoming inflation and labor data.
The Fed hasn’t hiked interest rates in almost a year, but an actual rate cut doesn’t appear imminent. Some experts say the first cut could come as early as July, though it’s more likely we see the Fed lower rates in September or November.
“If the Fed makes any moves later this year, the signal would be sufficient for the mortgage market, and mortgage rates would start falling,” said Selma Hepp, chief economist at CoreLogic. “In that case, we could see the mortgage rates around 6.5% at the year-end.”
One thing is for sure: Homebuyers won’t see lower mortgage overnight, and a return to the 2-3% mortgage rates from just a few years ago is unlikely.
Here’s a look at where some major housing authorities expect average mortgage rates to land.
Calculate your monthly mortgage payment
Getting a mortgage should always depend on your financial situation and long-term goals. The most important thing is to make a budget and try to stay within your means. CNET’s mortgage calculator below can help homebuyers prepare for monthly mortgage payments.
How can I get the lowest mortgage rates?
Though mortgage rates and home prices are high, the housing market won’t be unaffordable forever. It’s always a good time to save for a down payment and improve your credit score to help you secure a competitive mortgage rate when the time is right.
Save for a bigger down payment: Though a 20% down payment isn’t required, a larger upfront payment means taking out a smaller mortgage, which will help you save in interest.
Boost your credit score: You can qualify for a conventional mortgage with a 620 credit score, but a higher score of at least 740 will get you better rates.
Pay off debt: Experts recommend a debt-to-income ratio of 36% or less to help you qualify for the best rates. Not carrying other debt will put you in a better position to handle your monthly payments.
Research loans and assistance: Government-sponsored loans have more flexible borrowing requirements than conventional loans. Some government-sponsored or private programs can also help with your down payment and closing costs.
Shop around for lenders: Researching and comparing multiple loan offers from different lenders can help you secure the lowest mortgage rate for your situation.
Want to win more listings? Catch today’s podcast with Davis Bartels and you will! First, Davis shares several quick tips that will immediately improve your rapport with sellers. Later in the show, he outlines his entire process, including what happens before—and after—meeting with a potential client. Plus, Shelby and Davis offer solutions to the biggest problems real agents have when trying to lock down listings.
Listen to today’s show and learn:
What you’ll learn in today’s Real Estate Rockstars Podcast [0:00]
Growing your sphere to grow your business [2:03]
How to ensure that you embody real estate [3:11]
The first thing to do after connecting with a potential client [6:34]
What to do (and not to do) when consulting with a seller [8:12]
What sellers actually care about [10:07]
The last part of Davis’ listing consultation [12:11]
What to mail sellers prior to a listing presentation [14:27]
Why Davis does his own comps every time [16:20]
Get Davis’ pre-listing email from the Agent Success Toolbox [22:19]
Tips on starting your listing presentation off right [22:51]
A tip on when to do your listing presentation when competing with other agents [25:52]
Davis’ two-step process for listing presentations [26:47]
More tips that will help you crush your next listing presentation [29:49]
What to cover in your listing presentation [35:26]
How to cover comps like a pro [42:25]
When and how to propose a list price [44:34]
How to follow up after a listing appointment [48:00]
The best way to get contact information at an open house [51:39]
What the future holds for Davis Bartels [54:45]
Shelby Johnson’s real estate portfolio [56:43]
How the short-term-rental game has changed [58:46]
How Shelby’s thoughts on real estate investing have changed [1:00:12]
What the future holds for Shelby Johnson [1:02:09]
Davis’ favorite real estate tools and events [1:05:01]
Where to find and follow Davis Bartels [1:06:13]
Davis Bartels
Davis’s goal is to provide full service, front to back real estate services for their clients. They represent Sellers, buyers, landlords, tenants, and investors.
No matter the task, if it is in Residential Real Estate, Davis can help.
Davis Bartels’ personal career began during the Real Estate downturn in 2009. He began his journey by managing and negotiating high-level loan modifications and short sale transactions. As the market began to return to a healthy state, Davis’s focus shifted from helping distressed homeowners and sellers to helping those selling on a more traditional basis. Currently with Pinnacle Estate Properties in Westlake Village.
Along the way, they founded Oak Canyon Property Management. Their firm offers full-service property management. They manage on short-term, mid-term and long-term basis.
They are uniquely positioned to fully serve their clients across the real estate spectrum, no matter the task. Having the experience and tools allows them to offer their clients perspective from multiple viewpoints regarding their assets in order to ensure that they’re set up in the most effective manner to reach their long-term goals.
Davis has been married to his wife, Jessica, for 8 years and they have 2 girls (Everly-7 and Violet-2) and 1 more girl on the way. They love their Lab, Molly. Aside from real estate, Davis enjoys watching and playing sports (basketball and baseball), he enjoys cooking for friends and he is a car (and speed) enthusiast.
Related Links and Resources:
It might go without saying, but I’m going to say it anyway: We really value listeners like you. We’re constantly working to improve the show, so why not leave us a review? If you love the content and can’t stand the thought of missing the nuggets our Rockstar guests share every week, please subscribe; it’ll get you instant access to our latest episodes and is the best way to support your favorite real estate podcast. Have questions? Suggestions? Want to say hi? Shoot me a message via Twitter, Instagram, Facebook, or Email.
Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. In this episode:
Discover career growth strategies to boost your income, including negotiating raises and navigating promotions and mentorship.
What are some of the best ways to increase your income?
What are strategies for negotiating a higher salary and excelling in your current role?
Hosts Sean Pyles and Alana Benson discuss career growth techniques and salary negotiation strategies to help you understand how to maximize your earnings and achieve financial stability. They begin with a discussion of the importance of increasing your income rather than solely focusing on cutting expenses, breaking down the long-term financial difference that seemingly small increases in your income can make over the course of your career.
Then, “The Job Doctor” Tessa White joins Alana to discuss how to excel in your current role and position yourself for promotions and raises within an organization. They discuss the necessity of understanding the true expectations of your role, measuring your contributions through tangible metrics and effectively communicating your value to your organization. Additionally, they explore the importance of informal mentorship and how to enhance your skills by observing and learning from those who excel in specific areas.
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:
You’ve heard it one million times, “Just cut out the daily Starbucks run and you’ll be rich.” But more often than not, your financial situation is going to be better aided by fixing what’s coming into your budget versus what’s going out.
Tessa White:
If you’re, say, 35 years old and you negotiate an extra $5,000 for your job, it’s not just $5,000 because in lifetime earnings, that’s several hundred thousand dollars in lifetime earnings. And if you invested that difference, it’s even more.
Sean Pyles:
Welcome to NerdWallet’s Smart Money Podcast. I’m Sean Pyles.
Alana Benson:
And I’m Alana Benson.
Sean Pyles:
This episode kicks off our Nerdy deep dive into what we are calling investing in your income. Another way to say that is investing in yourself by seeking out more ways to make more money.
Alana Benson:
Yeah, Sean, you alluded to this at the beginning, but there’s just so much advice out there giving people flack for spending on straight-up normal stuff like going to Starbucks, or getting some tacos at a food truck instead of making them in your kitchen. And yes, technically all of these things can have a negative impact on your bottom line, but like, you have to live.
Sean Pyles:
Absolutely. And I mean, we’ve had a foot in this camp on the show advising people to take a hard look at their expenses and see what they can pare back in an effort to get themselves to a better financial situation. We haven’t told people to forego a morning latte, but there certainly is a time and place for examining your spending habits. That said, there is another way to affect that bottom line.
Alana Benson:
Exactly, and that is to just make more money.
Sean Pyles:
Yes. Okay. So Alana, you pitched this series to us. What prompted you to start thinking about this?
Alana Benson:
I’ve talked about this on here before, but before I started working at NerdWallet, I worked at a small company where I was making less than $30,000 a year with no benefits. So I actually tried to negotiate to $32,500 and I was told that I was “greedy and selfish.”
Sean Pyles:
Wow. The gall you must have had-
Alana Benson:
I know. How dare I?
Sean Pyles:
… to ask for that much more money, yeah.
Alana Benson:
But it messed me up for a long time. And to any listeners who have been told something similar, I want to tell you right now that you are not any of those things. I had to check my bank account every time before I went grocery shopping at that job, and I felt stressed about money all the time. And then when I finally started working at NerdWallet, overnight I went from that stressed out lifestyle to being able to save for retirement and a down payment on a house, which was just like a fever dream before then, and then it was a reality.
Sean Pyles:
Right. Well, we wish everyone could work for NerdWallet, but for those who are looking for other ways to have that kind of income jump, let’s talk about what they need to be considering.
Alana Benson:
Yeah, Sean. And this is not to say that this is easy. These are a little more difficult, they may not happen overnight, but there are some really critical factors that make increasing your income almost imperative if you want to meet particular financial goals. If that’s buying a house, if you’re making a college fund, investing for retirement, these are all the things that you usually do after you fill out your emergency fund, or you pay down high-interest debt and cover your day-to-day expenses. And by those metrics, it just makes it really hard for a lot of people to ever get to the point where they can afford to save and invest for those long-term goals. And for a lot of folks, increasing their income is literally the only way they’re going to be able to afford to invest for retirement.
Sean Pyles:
Right. And increasing your income can also be far more effective than reducing expenses, particularly for those who don’t have many expenses left to cut.
Alana Benson:
Yeah, exactly. So here’s an example. If you’re making $50,000 a year, the money you actually get on your paycheck after taxes, and generally this is without state taxes and everyone’s tax situation is different, but that would come to about $42,000 a year or $3,495 per month. The average monthly mortgage payment in the U.S. is $1,768. Now factor in groceries, bills, car payments, and other necessities, and the truth becomes something that we already know, which is just that life is really expensive and most of us are not making enough to cut it, let alone save for the future, or just make enough to enjoy life and take a vacation every now and then.
Sean Pyles:
Yeah. And the average millennial owes about $6,500 in credit card debt and those in Gen Z owe more than $3,000. Cutting your daily coffee habit and getting rid of streaming services simply cannot make up the differences here. And these numbers aren’t new, but they’re sometimes presented with little information about what we can do about them. Increasing your income is one of the biggest ways you can make a dent in those numbers.
Alana Benson:
Exactly. So over this three-part series, we’re going to talk about how you can get started increasing your income, some concrete steps you can take regardless of whether you want to change jobs or not, and what you can start to do once your income does increase. We’ll be talking about everything from sprucing up your LinkedIn profile to working with a career coach, negotiating, and whether that’s for a raise at your current job or a salary bump at a new one.
Sean Pyles:
All right, well we want to hear what you think too, listeners. To share your thoughts around ways to boost your income, leave us a voicemail or text the Nerd hotline at 901-730-6373. That’s 901-730-N-E-R-D, or email a voice memo to [email protected].
So Alana, who are we hearing from today?
Alana Benson:
We are going to the doctor for a checkup, Sean.
Sean Pyles:
Oh, no. What’s the copay going to be?
Alana Benson:
Well, hopefully nothing, because today we are talking with The Job Doctor, also known as Tessa White, who spent a good chunk of her career heading up HR departments, mostly for tech companies. She’s now founder and CEO of The Job Doctor and author of The Unspoken Truths for Career Success.
Sean Pyles:
That’s coming up in a moment. Stay with us.
Alana Benson:
Tessa White, welcome to Smart Money.
Tessa White:
Hello. Thank you for having me.
Alana Benson:
In this series, we are really focusing on ways to increase your income in kind of any form. So what would you say is the easiest way that people can increase their income?
Tessa White:
Well, I think they need to be very mindful that they are their best advocate for making money. The company’s not going to magically go in and decide that they need to pay them more money, because a company’s always going to err on the side of they’ll take as much as you’ll give. So making sure that you’re advocating for yourself is probably the greatest way that you make money.
Alana Benson:
Tessa White:
Yeah, salary negotiation, asking for money, which is uncomfortable for people to do sometimes. Understanding what the value of your role is or the position that you’re applying for versus just kind of going with the first thing that people ask. I mean a little bit of discomfort on the front end of negotiating on behalf of yourself really has a massive impact on the back end.
If you’re, say, 35 years old and you negotiate an extra $5,000 for your job, it’s not just $5,000 because in lifetime earnings, that’s several hundred thousand dollars in lifetime earnings. And if you invested that difference, it’s even more. So you need to look at it a little bit differently and say, “Every penny that I can negotiate on behalf of myself is the new basis for which other offers come in and other raises is based off of.” And it really does have a cumulative effect that’s significant.
Alana Benson:
I want to go back to something that you said about increasing the value where you’re at. Some people may have tried to negotiate or they’ve hit a financial ceiling for some ways, but how can you get extra experience at your existing job? For example, if you want a role in management in the future, maybe take on some mentoring to work towards that. For people who negotiating isn’t really on the table right now, how can people get some of that extra experience?
Tessa White:
First you have to know what to ask for. One of my recommendations is that you mimic a top-performer plan. Companies typically put people in this nine box, and they have these top performers and nobody knows who they are except the top performers. They get all these extra things. Some of those extra things are exposure to experiences which are very valuable to you. That might be sitting in on an executive meeting and just seeing how things operate.
And the thing about corporate America is your manager needs help. There’s always more to do than people to do it. And so if you ask for your own top-performer plan, you can actually ask for and be very direct with your manager to say, “Can I give part of a presentation in this executive team meeting? Can I run this little piece of a project that is holding us back that we need to get over the finish line? Can I sit in and listen to how a meeting operates? Can I help develop a dashboard for our departments so that we can show progression in some of the key objectives?”
So there’s lots of different ways you can do it, but the key is you have to ask because most managers are not really great at putting together growth plans for people. They’ve got a lot of people and it gets very murky what they need. But if you actually go to your manager, and direct it and say, “Can I do this one thing? Can you help make this one thing happen or these two things happen,” then your odds go way up and your credibility goes up in the organization, your visibility goes up. And therefore, your promotability goes up.
Alana Benson:
I love what you said about visibility because I think that is so, so important, especially a lot of people are now working in remote environments and so you don’t really get that face-to-face time. And so what are some ways that people can kind of increase their visibility? Kind of like you said, talking about a presentation, but just ways to get exposure and then how does that value come back to them?
Tessa White:
Well, let’s start with something that I think people might find interesting. I’ve sat in on hundreds of promotion meetings where they decide who gets the promotions that year. And almost without fail it’s like a broken record. The people that don’t get the promotions, people will say, “Well, they sound great, but I don’t know who they are. I haven’t worked with them.”
One of the big keys to getting the promotions is visibility across the organization and being able to collaborate well with other departments. And it’s really important that when people know you, you have a greater chance of getting the promotion, and when you intersect with them. So that’s the first thing is that having that exposure is really important.
One of the first practical things that I would do in a job is to go talk to the people that intersect with my role and say, “Tell me what do you expect out of this role? What are the problems that I am helping solve for you and where are your pain points?” And I would get very, very aligned with what those people and constituents need because the job on paper is not the real job. It never is. And this helps you determine what the real job is and how you win, more importantly, how you align yourself to win. So I would be having those conversations at least twice a year because that’s what’s going to point you towards how you actually work on the things that are going to get you promoted in a company, and how are you going to get visibility for you and what you do.
Alana Benson:
I think about that a lot where I work in terms of even just posting on Slack and making sure that I post regularly in the channels that my boss, and my boss’ boss, and even my boss’ boss’ boss are because that visibility is so important. So they say, “Oh, I know who this person is, I know what they’re working on. I know they’re doing X, Y, and Z.” So what are some other ways to make sure you’re getting that managerial attention that could potentially lead to a raise or a promotion?
Tessa White:
I’m a big believer in planting seeds in an organization with other managers and other places in the organization so that you know what’s coming. Managers are planning six months, eight months in advance, sometimes a year in advance of what they need and what’s coming. And you need to be talking with them about how are you going to be evolving, what are the big problems you’re trying to solve? What are big initiatives and things that are going to help you over the next couple of years move into the next level of efficiency? And when you understand those things, then you get a better idea of how you fit into the ecosystem and you also get a better idea of maybe where you want to go in the future. And then you can begin to craft the kind of experiences that you need so that you will be somebody that they can pay attention to.
I would absolutely treat your company like a big homework assignment. And I would be trying to listen to the quarterly reports, listen to the CEO. What are the big objectives that we’re trying to accomplish? And it helps you establish that narrative. Because I get mad when people come and say, “I interviewed but it didn’t work very good,” or, “I don’t think they understood my value.” And I say, “If you don’t understand your value proposition, I promise you the company won’t.” It really is your job to figure out what your value proposition is, and in order to do that you have to have information.
Alana Benson:
So when you go into those meetings, it’s so hard to kind of know what your value is or what people call your market value. So how do we figure that out? How do you essentially see if there’s space to grow in terms of pay in your existing role? How do you figure out what you should be getting paid?
Tessa White:
Well, that’s a lot of different questions. Let me start with value proposition, first of all. It’s kind of a big word, but how do you know what value you bring to an organization? This is a really hard thing for people. But if you think about leverage, that’s what you want to have as leverage to get what you want. Leverage at its core is “I have what you need.” And so if you can define what is it that I see the company needs, where are they going and what have I done so far that shows I have that skill, and you can then turn it into numbers.
“I was able to come into my department and move the needle on these particular criteria,” then you have more leverage. But what most people do is they say, “I’m really good at working with customers.” Well, that’s, in and of itself, doesn’t mean anything. But if you say, “My customer service scores are 20% higher than most of the other people in the department,” or, “I was able to decrease call time by X and increase customer satisfaction by X,” then you actually have something that the company understands and you’re speaking their language.
So part of your job in determining your value proposition is saying, “How am I solving problems for the company? And then how do I turn what I’ve done into metrics or numbers?” That’s why I tell people, “You should go to work every day and be measuring. If you don’t have a department metric that tells you am I doing good or am I not doing good, figure out what it is and start measuring things. Because those numbers become so critical to how you position yourself for a company.”
Alana Benson:
There’s two things, figuring out what the company kind of needs from you and what you can bring to it, and then obviously what can the company do for you?
Tessa White:
Well, your market value, it’s like a house. When we put a house up for sale, we don’t have some neat, perfect numbers to what its value is. What we know is that other houses sold at this amount that were similar, and the same is true with compensation. What other companies are willing to hire this role at is a pretty good indicator that you can bring that helps determine the value of a role.
But the other thing that you have quite a bit of control over is being able to tell the company, “Here’s how I solved the problems in my last company and here’s how I’ll solve them for you.” So for recruiting, for example, let’s just take a general example. If I said, “I’m a really good recruiter, and I was able to manage a recruiting team and fill 200 positions in a year,” that doesn’t, in and of itself, mean anything. But if I understand that a company has low resources and they don’t have a lot of money to put towards recruiters, I could say, “In the last company, I turned every employee into a recruiter in our company because we didn’t have a lot of funds. And we rolled out this employee referral program that made every employee a recruiter and it increased the number of applicants that we were bringing into the company month over month by 60%.”
Then all of a sudden the company goes, “Scrappy. I need scrappy. I’m a company that doesn’t have a lot of money. I need creativity. Look what that person was able to do.” And all of a sudden your leverage went up, which means your compensation probably goes up because you have what the company needs.
Alana Benson:
Yeah, I think it’s so important to think about what are the problems that need to get solved here? And sort of apply yourself to those, and be moldable, and be able to say, “Yeah, I can help you with that.” I feel like that goes so far and feeds into the visibility thing that we were talking about earlier because then you become known as someone who can fix problems.
Tessa White:
It’s everything because on resumes, again, one of my pet peeves is a resume will say, say you take an HR person and they say, “I’m a 25-year professional who has been able to manage talent management, training and employee relations.” Well, every single resume says that, but the minute that I can tap into how do I solve the problems and I say, “I’m the person that you’d hire if you need to go fast and put in place infrastructure so that you can go public or so that you can have a high merger acquisition strategy,” for example. If I say that, then I’ve just tapped into how to solve a problem that that particular small company needs.
Alana Benson:
So much of this is difficult to do and every company is different. And I think it’s so important to get help and support along the way as you’re trying to not only be better in your role but be making more money. So what can you tell me about how you can use mentorship to further your career and help you increase your income? What can mentorship look like and how do you find a mentor?
Tessa White:
I think every single person needs to have not just a mentor, they need to have a handful of mentors, and it’s available to everybody. What most people, the mistake they make is they think they need to go up to somebody and say, “Will you be my mentor?” When in fact, the best mentorships that I know of are where you identify people who have really good skill sets in an area.
For example, everybody should have a mentor that they can look to for how do you manage people, how do you get conflict over the finish line, and how do you do it in a way that’s productive rather than destructive? Everybody should have a mentor around data and data analytics or presentations and how to give a good presentation or run a meeting. You should identify people who do that well, watch them. You don’t even need to ask, “Will you be my mentor?” Watch them. Watch what they do in that area.
And then for example, before you go give a meeting, say, “I’ve been watching you. You give really good presentations and I’ve tried to use some of the principles I see that you utilize. Will you take a look at this presentation and tell me what you’d change? Can I just give it to you? Spend 10, 15 minutes to run over the high level?” That’s how you have mentors that make a difference for you is you find people that do good things, you watch them very closely, and then you ask them when the time is right to help you make sure you’ve done that thing right. And I think that’s available to everybody. You don’t have to have a company program to do it. You don’t have to have somebody necessarily saying they’ll be your mentor. Just pick people, watch them.
Alana Benson:
So it doesn’t need to be nearly as formal as what a lot of people think of when they think of entering a mentorship relationship? It can be as simple as, “I saw you do this. You’re great at it. Can you help me with this one presentation?”
Tessa White:
Exactly, or this one conflict. “I have a high conflict situation and this is how I was thinking of handling it. How would you do it?” Exactly. I think that’s far more productive.
Alana Benson:
To that point, obviously a mentorship and mentoring relationship is different than working with a career coach, but how can you find a career coach who can maybe help you and how do you navigate that search? There’s obviously a wide spread of what people charge for career coaching services. Are there any certifications that people should look for when it comes to working with a career coach to make sure they’re working with someone who knows their stuff?
Tessa White:
There are plenty of different certifications, but I don’t think that one is necessarily better than another. I think it’s a lot like finding a regular therapist. You need to find somebody that you vibe with. You need to find somebody who’s been around the block and has some experience.
Probably my biggest beef with career coaching as an industry is that a lot of people with five years of career experience are calling themselves a career coach. You need somebody who has seen lots of situations in lots of different circumstances and watched how those situations play out. And I think when you have somebody that has either been in your industry or has been around the block for a while, they’re going to be able to give you a much better idea of the different choices that you have, and more importantly, the likely different outcomes of those scenarios if you handle it different ways. But somebody with five years of experience simply doesn’t have enough experience or enough behind the scenes in really high-stakes situations to be able to give, I think, information that is really, really helpful or useful.
Alana Benson:
And so aside from a lack of experience, is there anything else to kind of look out for in this industry?
Tessa White:
I would find people that know my industry. For instance, tech is a different flavor than blue collar. If I took advice from a career coach that’s a high-tech career coach and I’m in a blue collar environment, that advice is not going to play as well because there’s just different flavors to different industries. So you try and find somebody that’s the best match to the environment that you are working in, I think, and then you make sure that that person has a lot of experience as well.
Alana Benson:
Is there anything that I didn’t ask you about that seems particularly important for people to think about if they’re trying to increase their income in a role that they’re already in?
Tessa White:
I will tell you that there is a trend that I’m seeing that I think is really valuable to understand. There’s a lot of change happening right now, a lot of layoffs and a lot of people leaving companies. But those people who stay through, I call it a red zone of a company, usually have tremendous opportunities that come their way because of the people that leave and the gaps that that creates. And even though it may be an uncomfortable period of time to try and do more with less, learning how to work through red zones of companies is really teaching you to innovate and is teaching resilience. And that skill set is extraordinarily valuable.
People who stay in companies often end up with the increases and the promotions that they want because of the vacancies that are left. And so I would tell people don’t think that the grass is greener just by leaving a company through a red zone. A red zone can be a tremendous gift to you, and particularly people who are okay with taking promotions that are lateral and they learn the ecosystem of a company, that has delayed value. While it may seem like you’re going backwards or standing still if you’re not getting big raises, if you understand the ecosystem of a company by working in different departments, over time that makes you incredibly valuable to a company. And I’m seeing people use that as a career strategy that ends up paying dividends. If you look at it in a long-term, like a four-year horizon, is huge. Even when they leave that company, the ability to understand the different departments and how they work together is something that’s very, very valuable.
So don’t discount the red zone of a company and think, your brain’s going to tell you this is the wrong company, the wrong time, it’s terrible, it feels uncomfortable. But discomfort doesn’t mean you’re in the wrong company, it simply means you have to learn to do things differently. And it really is the trigger for innovation. And if you can stay through that red zone, it can be incredibly valuable to you.
Alana Benson:
Well, Tessa White, aka The Job Doctor, thank you so much for talking with us today and we really appreciate your time.
Tessa White:
Yeah, thank you so much for having me.
Sean Pyles:
Alana, I so love how you and Tessa talked about what I sometimes think of as the theater of the workplace or narrative building around your job. And I don’t mean to be flip or diminish the real work that goes into building any career, but if you aren’t good at presenting the story of your work, building a compelling cast of characters through your colleagues and advocates who support your work, and getting people excited about what you are doing, it’s going to be a lot harder to get those big opportunities in your career. Tessa described it as “planting seeds,” and I kind of think about it as foreshadowing, set building, and fleshing out your narrative arc.
Alana Benson:
Totally. And there’s so much that goes into what we do at work, and how we can grow and eventually make more money. And if you’re looking for inspiration on where exactly to figure out what type of experience you should be getting, try looking at job listings for jobs you’ll eventually want but maybe aren’t qualified for now. That will clue you into where you should start looking. For example, if you’re in a job that doesn’t currently give you management experience but you’re looking to work as a manager in the future, you could give informal mentoring a try.
Sean Pyles:
So try thinking from your future resume’s perspective. Try to think from your future resume’s perspective. What experience do you need to have to check a box on a job openings list and how can you get it now?
Alana Benson:
Yeah. And once you identify what areas you want to get more experience in, there are thousands of online courses you can take for free or for just a small amount of money to exercise those skills. You can learn how to code, you can learn about AI, how to use spreadsheets, and pretty much anything else you can think of. So think about what courses could help you out in your current role or help make the case to give you a promotion.
Sean Pyles:
And this is a great time to look at other roles again and see what particular skills they’re looking for. If you’re looking for jobs in IT support, for example, you can take a Google certification course for that. Some companies even offer financial compensation for furthering your education. So be sure to ask your manager if there are any funds available to help you pay for the education costs.
Alana Benson:
That’s a great call.
Sean Pyles:
So Alana, tell us what’s coming up in episode two of the series.
Alana Benson:
Next up, we are going to hear from an expert from LinkedIn about how to best optimize your profile so you can make the most out of a job search.
Andrew McCaskill:
I think that the number one thing that I would say to folks if you’re trying to make your profile more visible and more searchable is over 40% of recruiters say that they are searching for talent based on skills. And so you really have to put your skills in your summary, and use skills and skills language.
Sean Pyles:
For now, 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-N-E-R-D. You can also email us at [email protected]. And remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.
Alana Benson:
This episode was produced by Tess Vigeland. Sean helped with editing. Kevin Berry helped with fact checking. Sara Brink mixed our audio. And a big thank you to NerdWallet’s editors for all their help.
Sean Pyles:
Here’s our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.
Alana Benson:
And with that said, until next time, turn to the Nerd
Understand how much extra income you could get from a side hustle like DoorDash and get a budgeting and investing basics refresh.
This Week in Your Money: How much extra money can you really make from side hustles? What are budgeting and early investment strategies for young professionals? Hosts Sean Pyles and Sara Rathner discuss the realities of gig economy jobs with Tommy Tindall, a NerdWallet writer who tried working for DoorDash to see what kind of income it would give him. He shares tips and tricks on the ease of starting with DoorDash, the practical challenges involved, and how your location and lifestyle can impact your earnings.
Today’s Money Question: Host Elizabeth Ayoola joins Sean and Sara to help answer a listener question from a recent college graduate about early investment strategies. They discuss how young professionals can apply the 50/30/20 rule to their finances, the importance of setting clear savings goals, and how to start investing at a young age. They discuss the benefits of starting investments early, the differences between active and passive investing options, and the importance of automating investments to build wealth over time.
Check out this episode on your favorite podcast platform, including:
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Episode transcript
This transcript was generated from podcast audio by an AI tool.
Sean Pyles:
Have you ever gotten a food delivery or a ride in an Uber and wondered whether these gigs are really worth the effort as a side hustle? Well, this episode will deliver some answers.
Sara Rathner:
Cute. Welcome to NerdWallet’s Smart Money Podcast. I’m Sara Rathner.
Sean Pyles:
And I’m Sean Pyles. This episode, Sara and I are joined by our co-host, Elizabeth Ayoola, to answer a listener’s question about money goals, especially when you’re early on in your financial journey. How do you get a grip on your finances and set yourself up for long-term success?
Sara Rathner:
But first, we’re turning to side hustles. This month on Smart Money, we’re running a special series about how you can increase your income, whether you want more money to invest or you’re working on building up your savings, or you really just want some extra cash to spend on whatever junk appears in your social media feeds.
Sean Pyles:
And we are not here to judge you for whatever you spend your money on, but watch any social media influencer or read any article about ways to increase your income and inevitably someone mentions taking up a part-time job in the gig economy like Uber, DoorDash, Airbnb, take your pick. And I’ve always been pretty skeptical that these gigs will net you meaningful amounts of cash, especially considering all the time and effort involved.
Sara Rathner:
Absolutely. If you’re going to put miles on your car or let strangers sleep in your rental property, it needs to be worth it. And we don’t have access to a vacation house for the purposes of this podcast, but we do have a Nerd on staff at NerdWallet who actually did DoorDash for a couple of days to get a feel for whether these jobs live up to the hype. Tommy Tindall is here to share his insights with us. Tommy, welcome back to Smart Money.
Tommy Tindall:
Hey there. Thanks for having me.
Sean Pyles:
So Tommy, you recently made a really fun video for NerdWallet’s YouTube channel where you test drove DoorDash for a few days. What were your hopes and expectations going into this journalistic exercise?
Tommy Tindall:
Yeah, so I study and write quite a bit about side hustles and for this one, I really wanted to go the extra mile, get it, and test it out myself, try to make the advice a little more valuable, right? Give it a true test. And delivery driving is super popular and seemingly accessible, at least that’s what I thought, was my hypothesis, I should say, an easy way to make side money. So I really wanted to answer a couple questions that I think people have about a gig like this, and one is just how easy is it to get started? Can you really sign up on your phone, get a red bag in the mail and start driving? And spoiler alert, yes, that’s what I did. You can. And also can you make real money?
Sean Pyles:
Okay, so what were the main things that you were tracking as you weighed whether this side hustle was worth it?
Tommy Tindall:
I wanted to keep it easy, so I was just keeping a close eye on the time I spent driving while delivering, the miles I drove, and of course how much I earned and really wanted to get to what’s the real pay when you factor in the cost of driving.
Sara Rathner:
So talk with us a little bit about the experience of doing this. Was it fun? Was it boring? Did you get chased by any wild animals? Did you use this as an opportunity to catch up on episodes of Smart Money?
Tommy Tindall:
Well, I wanted it to be fun, but it was kind of hectic. I mean, I remember there were a couple moments of zen where I was just cruising, windows down, just looking outside thinking this is the life. But as soon as I started thinking that way, ding, ding, I’d get another delivery. And I think hustle is a real good term for this because it was kind of a grind. And what really got me, which I thought was interesting, was the constant interaction with my phone. It was draining. I was using maps to navigate, to take orders, and it was just a lot of interaction with the phone while driving.
At one point I, quick story had a 16-mile delivery, which was good pay. It was like $18 of base pay, which was really good. So I took it, but I was so distracted kind of trying to figure out where I was going, that I went the wrong way on 95 and was screaming, pounding the wheel, as you can imagine, and just like, efficiency. That’s what I was going for. Also, keep in mind, I was filming this experience for the video and that totally added to my stress. So maybe more practice without trying to film myself, I could be a little more efficient, get a little more time to enjoy solitude and catch up on my favorite podcasts like this one. But yeah, it was hectic.
Sean Pyles:
Yeah. But you can’t forget that this is a job, right? It’s going to have stressful, difficult moments like any job.
Tommy Tindall:
I was reminded of that quickly, that this is a job and I kind of felt the stress. When I would get a delivery, I wanted to make sure the food was hot and get there quickly, know where I was going. So I had that sense of, hey, you’re on the clock, you’re working.
Sara Rathner:
That distracted driving element is also pretty terrifying.
Sean Pyles:
Tommy Tindall:
Yeah. Now when I see people on the road, I’m wondering are they delivering right now? So before I yell “get off your phone,” I’m wondering that.
Sara Rathner:
Sean Pyles:
Sara Rathner:
They might be.
Sean Pyles:
Either way, get off your phone.
Tommy Tindall:
Sara Rathner:
Tommy Tindall:
Sara Rathner:
I know. So Tommy, you mentioned this in your video, you live in a smaller town, a more remote area. How does that affect your ability to make money from DoorDash or any other app-based job like this?
Tommy Tindall:
I mean, it matters a lot because it’s how busy it’s going to be around you. So location matters. It’s where you live, which towns you have access to with a short drive that may be more populated. So I live, it’s a smaller, more rural but kind of suburban town outside of Baltimore. And what I did before I started was I would watch the DoorDash app, the map section of the app and just kind of see where the hotspots were.
And of course areas closer to Baltimore where it’s more densely populated, more restaurants within close proximity of each other, they were regularly busy during the peak times and they were shaded in pink on the maps. That’s how you know you can go out. When the map is like pink or red, you can Dash on a whim. When it’s gray, which it was sometimes in my town, you have to wait or schedule a Dash for later. But luckily where I live during the busier lunch hour, the option to Dash now was available during the weekday when I tried this. So I was able to stay closer to home, which I think was more realistic, because if I did this, I don’t think I’d want to drive that far. I’d want to stay closer to home, so.
Sean Pyles:
You don’t want to have to commute for your side gig.
Tommy Tindall:
Exactly. You want to get out there and do it maybe on the lunch hour during work, which I was thinking, which we’ll talk about. Probably kind of hard to do because I did find myself going from one end of my town to another because it’s not that populated, so it cost me some time.
Sean Pyles:
Well, that also makes me think about wear and tear on your vehicle and other related expenses like gas. Was that a worry of yours as you were doing the side hustle?
Tommy Tindall:
Yeah, this was a big worry for me because I am somebody who loves cars and I can be a little obsessive about keeping our vehicles maintained. So just all the stop and go driving, it was just kind of giving me a nervous tick. That was on my mind the whole time. I think I kind of make that clear in the video a little bit, and I should also mention that I drive a full size Ram pickup truck, which I thought would be fun to test for this, but not the ideal gig economy vehicle. It’s inefficient, hard to maneuver.
Sean Pyles:
Yeah, lots of storage space, but maybe more than you need for a Starbucks run or something like that.
Tommy Tindall:
Oh, yeah. And the maneuverability. I think at one point I pulled off a busy road into the wrong driveway and I had to sort of Austin Powers my way out. You remember that 20 point turn he had to do in the first movie and all while the customer, the next house over was watching me. So when I finally got over there, we had a little laugh about it and I think she did tip me. I don’t know if she tipped me after the fact or not, which you can do in the app.
Sean Pyles:
You were providing some entertainment along with the delivery?
Tommy Tindall:
Oh, yeah. When I did get to interact with customers like that, I made it kind of fun. I’d be like, “Yeah, you don’t see people driving a truck very often, do you?” But yeah, I was a little anxious about my own vehicle and the wear and tear.
Sean Pyles:
Okay, so Tommy, after three days of Dashing, tell us how much time you spent driving, how far you drove, and how much you earned.
Tommy Tindall:
All right, well here are the stats. I went on three Dashes for this test and drove about six and a half hours on deliveries altogether. I put 90 miles on my personal vehicle, which was my big dump truck as I mentioned. Earned a total of $86, but factor in the 17 MPG that I was getting. And gas was I think around $3.60 a gallon when I was doing this. So less than $19 in fuel costs. True earnings are more like $67 or $10.31 cents an hour. So I mean, not a lot of money.
Sean Pyles:
So I’m going to wager that’s less than you’re making at NerdWallet on an hourly basis.
Tommy Tindall:
Yeah, yeah, yeah. Not giving up the main hustle.
Sean Pyles:
Yeah. Do you think this was worth it?
Tommy Tindall:
So yes and no, and I’ll start by saying I’m glad gigs like this exist because I was really blown away by the accessibility of this gig. I mean, I was signed up and through the background check in literal minutes, and if you, the listener, meets the basic qualifications, I mean you can probably start working and start earning, and I like that. It’s not like saying side hustle options, go be an influencer and wait a couple years to build a following before you make your first dollar. I mean, you sign up and you can make money, which I think is great. And flexibility of course is the selling point of a delivery driving job like this. But at the expense of what? I felt like I was really hustling. I didn’t make a lot of money and thinking back, I mean this would be a real grind for me to do on the side.
It’s really about where I’m in my life. I mean, I have a main job, I have a family, I have young kids in school and sports, a home that continues to break that I have to maintain, I serve in my church and I really covet kind of that little free time that I have left. So I guess all that to say, not quitting my day job. And I think doing this made me more grateful of my main hustle and reminded me that I think there’s merit in what’s become kind of an older way of thinking where you find a good company, work hard, build your skills, grow your confidence, gain expertise, and hopefully increase your salary over time. So whether it’s worth it I think depends on personal situation, because you do make money.
Sara Rathner:
So who do you think a side hustle like this is good for?
Tommy Tindall:
People who do have some extra time or need extra cash and can take advantage of the flexibility to work whenever, because again, that is the selling point of a job like this. Also people who can work the system to their advantage. And you see a lot of YouTube videos of people sort of gaming this and chasing something called peak pay, which is an incentive where you can add plus one, two, three, or more dollars to a delivery if it’s really busy. So the competitive types, which is not me, admittedly, but I do wonder if I would’ve tried this at a different time in my life, like back in college or in my first years working a job when I lived in Washington, DC, had it been available.
Sean Pyles:
Well, Tommy Tindall, thanks so much for talking with us.
Tommy Tindall:
Absolutely. Thanks for having me.
Sean Pyles:
So listener, you just heard Tommy describe an interesting way that he earned some money. Ahead of this month’s series about increasing your income, we have our new Nerdy question of the month for July, which is: what is the most creative thing that you’ve done to earn more money? Maybe you negotiated a significant raise or you’re one of those job hoppers that has a new gig every couple of years. Tell us what is the most interesting thing that you’ve done to increase your income?
Sara Rathner:
I mean, I’ve rented out my basement for a commercial shoot, so there’s that.
Sean Pyles:
Okay. Interesting.
Sara Rathner:
Made 1,400 bucks and bought new storm doors. What a day. Anyway, if you’ve done something like that or something else, call or text us on the Nerd Hotline at (901) 730-6373. That’s (901) 730-NERD, or email us at [email protected]. We might just share your story on a future episode. Maybe inspire some of our other listeners to take up an interesting side hustle.
Sean Pyles:
And while you’re at it, send us your money questions, too. It is our job as Nerds to answer whatever your money question is. So send it our way on the Nerd Hotline, (901) 730-6373 or email it to us at [email protected]. Well now let’s get into this episode’s money question segment after a quick break. Stay with us. We’re back and answering your money questions to help you make smarter financial decisions. This episode’s question comes from Adrian, who left us a voicemail. Here it is.
I’m a recent college graduate. I graduated college in June of 2023 and I am six months into my new corporate world job. I’m trying to save 25% of my income per month and I’m trying to start investing. I don’t really know what my savings goals should be. I’m down for some high risk investments, but I don’t know, I’m trying to just learn the basics of investing, how to plan for life. What would you do if you were in my shoes, if you could go back in time and be 23 and not have kids or a mortgage or anything?
Sara Rathner:
To help us answer Adrian’s question on this episode of the podcast, Sean and I are joined by our co-host, Elizabeth Ayoola. Hey Elizabeth.
Elizabethy Ayoola:
Hey, my favorite dynamic duo.
Sean Pyles:
I love getting a question from a listener who is so young because even though they’re only 10 years younger than me, it does feel like a lifetime ago that I was 23 and making these financial decisions for the very first time. One thing that I find really interesting about Adrian’s question is that while they are so early in their financial journey, their questions really can apply to anyone, because as I’m sure we all know well, plenty of people in their 30s and 40s and beyond are still trying to figure out their budgets and their financial goals. So with that in mind, I think that our listener and all listeners really could benefit from a little bit of budgeting 101. So Elizabeth, where do you think they should start?
Elizabethy Ayoola:
Basically, I think they need to start with a budget. That’s going to tell you how to slice and dice your money. You should probably maybe start with the 50/30/20 budget, which we are advocates for at NerdWallet, or it might be the 60/30/10 budget depending on your cost of living and where you are. Now, for those who don’t know what the 50/30/20 budget is, 50% go to your needs, 30% to your wants and 20% to debt, paying down debt and also saving money. I do think it’s important to know, however, these numbers are not set in stone. It really just depends on your finances and you can adjust the numbers to fit where you are in your financial life right now. I myself currently save above that 20 bucket, but luckily I don’t have that much debt, so that’s why I’m able to save more money and save more than the 20.
Sean Pyles:
Yeah. And our listener wants to save 25% of their income, which is really ambitious, especially for someone who is so young. I think when I was 23, I was saving maybe 2% of my budget, and it wasn’t even intentionally, it was just by chance, because that’s what I had left over at the end of the month.
Elizabethy Ayoola:
You were doing great, Sean, because let me tell you, I was saving 0% of my budget at 20 something. So that is ambitious. I think it’s possible, but it just again depends on where your finances are.
Sara Rathner:
I like an ambitious savings goal, especially when you’re young. Some of the best advice I was given by a CFP that I used to work with was save as aggressively as you can for as long as you can because life only gets more complicated and more expensive. So if aggressive for you is 3%, that’s great. If aggressive for you is 25%, that’s great, and if you have to change it up from month to month, that’s fine too.
Elizabethy Ayoola:
So our listener is dedicated to being a hardcore saver, and I love that for you, listener. So Sean, I know you’re also big on saving and you have some tricks for effectively saving money. What do you think?
Sean Pyles:
So I would start by encouraging Adrian to have something to save for. Again, I’m thinking a lot about myself in my early 20s, I didn’t really have any sort of short, medium, or long-term goals or priorities of any sort because I was just focusing on paying my rent and having fun. So I understand how it can be hard to understand what your priorities might be, and this is where I think something that’s very woo woo but effective can come into play. And that is a visualization exercise. Now, if you’re rolling your eyes, just bear with me because I swear it can be super helpful. So when you are 23, 33, 43, think about where you see yourself in the future in five years, in one year, in 20 years. So maybe that means do you want to move to a new city in the next year? Do you want to buy a house in five years? Do you want to retire in 40 years? Imagine where you will be at these different points in your life and think about how you can save money to get there.
Elizabethy Ayoola:
I would not even say that’s woo woo, Sean. I mean, so I definitely started doing that in my late 20s and honestly, the life I have today was a lot of the woo woo stuff. So it worked for me.
Sean Pyles:
The manifesting is real.
Elizabethy Ayoola:
It’s a real thing.
Sara Rathner:
And if you’re not really into the whole idea of manifesting as a term, that’s fine too. You could also think about it in terms of just naming your goals. Instead of just being like, I’m going to save 25% of my salary. For what? So say what the “what” is. So maybe online savings accounts like high yield savings accounts, you could actually name the account. So you could have, this is the account because I need to replace my car, or this is the account because I need to buy a new computer. Or this is the account that I’m saving up for a down payment on a home for. And then beginning to say, okay, I’m going to put this amount of money in this month for this goal and this goal. Makes it so much easier to stay organized and there’s some science behind it, making it so that you actually are more successful in terms of reaching your savings goals by just naming the goal. So if you don’t want to do the woo woo thing, you could do the practical thing and just put some names on stuff.
Sean Pyles:
Yeah. And what you’re talking about there is really the marriage of the woo woo and the super practical and tactical, where you can start with knowing what you want and then getting the accounts that can help you save the money for that. So for a lot of people, that’s going to mean starting out with an emergency fund, building up over time three to six months of the needs budget that you have. That’s like rent and medicine and groceries, things like that. And then building out the other savings buckets for things like a vacation fund, a house fund, a wedding fund. I have 10 savings accounts across all of the banks that I partner with. And they are all specifically allocated for my different goals. I know 10 is kind of a ridiculous amount, but it works for me.
And what makes it easy is that I automate my deposits into these accounts. So I don’t even have to think about it. One of my accounts is only getting $40 a month, and that’s enough for me to save, to build on that goal over time. But I don’t have to be worried about, oh, okay, am I going to have enough for when I need a new rug for my house eventually. I just know it’s already going in the background.
Sara Rathner:
Yeah, I love this. It’s that concept of reverse budgeting where you automate transfers into your various accounts for different goals every month.
Sean Pyles:
And whenever we talk about savings accounts, it can be easy for we Nerds who are steep in this to maybe even take for granted the fact that high yield savings accounts are such an amazing thing for people to have. People can be getting even around 5% back for what they have sitting in their savings. And if you think about some average returns from the stock market some years are around 7%, and that can be much riskier than just having a savings account. I really do recommend people shop around, look at some of our roundups on NerdWallet and see what sort of high yield savings account might help you meet your goals, because you’ll be getting a much greater return on your money than you would get from a traditional brick and mortar bank.
Sara Rathner:
So our listener, Adrian, is a spring chicken in the world of finance and in the world of investing, which they also mention, having a long time horizon can be one of your best assets. And if you’re in your 30s and listening to this, you still have a long time horizon. So don’t think it’s all over if you didn’t invest in your 30s. Now let’s talk about investing at a younger age. Elizabeth, what are your thoughts there?
Elizabethy Ayoola:
Oh my gosh. I totally get the feeling of being overwhelmed and not understanding where to start. But it’s really important I think, not to let that paralyze you and to just start as soon as you can. And the first step in doing that is creating a strategy. And what the strategy is going to do is it’s going to tell you what your goals are and how much you need to save to achieve them and by what timeline. Now, it doesn’t have to be over complicated because I think that’s where people get tripped up, especially because there’s so many retirement and saving calculators online to help with this. And yes, I’m going to shamelessly plug NerdWallet. We have lots of those, go check them out. But yeah, knowing what age that you want to retire and how much you need will help guide your investing strategy. It’s also going to help you decide what to invest in, the best vehicles to use, and how much to put in each. What do you think, Sara, about time horizons in that sense?
Sara Rathner:
Oh, it’s probably one of the best things you have working for you because the way compound interest works mathematically is the longer of a time horizon you have, the less you can save per month or per year and still come out with a higher amount of money in the end versus waiting an extra 10 years, an extra 15 years, then you have to invest so much more per month just to catch up and still end up with less money overall.
Sean Pyles:
And I would recommend Adrian or anyone else who’s getting started in investing or just taking it seriously for the first time, is to get a lay of the land and understand all of the different investment accounts that are out there. Because there are all these different ones, like a 401k and a Roth and a Roth IRA that people have probably heard about, but really understanding what they are and when one is more beneficial than another for your circumstances can help you make the most of your investments. And something to think about too, since Adrian is so young, is that your younger years are often the best time to take advantage of an IRA because you are getting taxed at a lower rate when you’re earning less money than you will be taxed at later on in your career. So really use these early years to your advantage.
Elizabethy Ayoola:
Yeah, I’m with you Sean. You guys also should decide for those people listening whether you want to do active or passive investing. If you are like me and you ain’t got time for that, and when I say that, I mean checking the stock market every day, then you may want to consider passive investing and some passive investing options include ETFs or robo-advisors and kind of securities like that. But yeah, once you do all those things, the most fun part is automating your investments and knowing that you’re probably growing both while you’re sleeping.
Sean Pyles:
Yeah, I think for a lot of people, sometimes the best strategy to start can be the strategy of “I want my money to make me more money.” And that’s where I started out in my mid 20s when I first started taking investing seriously. I didn’t want to spend a lot of time actively managing investments. And guess what? Actively managed investments often perform worse than passively managed investments. So passive is probably going to be the easiest thing for most people to do. And I just set up an account with a robo-advisor that was trusted and well-reviewed on nerdwallet.com, and I just have automated deposits and it makes it super simple. I’ve been doing it for years and I’m already receiving literal and metaphorical dividends from that.
Elizabethy Ayoola:
Also, you want to think about fees when you’re looking at things like that and what has low fees and performance and other things, but don’t let that stop or overwhelm you as well. Just check out some resources on how to pick an ETF also.
Sara Rathner:
Yeah, I will also add that whenever I hear somebody in their early 20s say that they are, “Down for some high risk investments,” I think somebody’s been talking to their friends about crypto and I don’t know. I mean, for all I know Adrian just means, oh, I really want to dabble in a more stock forward portfolio. Sure. Honestly, you’re probably talking about crypto, aren’t you? Before you dabble in speculative investments, things like cryptocurrency, things like, I don’t know, precious metals and real estate and all sorts of stuff like that, you want to set aside a solid foundation. Just the things that we’ve been talking about, automating transfers of money into retirement accounts, either through your employer or on your own, diversifying those investments. And then, only then, if you have money left over, then you can dabble a little bit, sprinkle a little spice onto your investments, maybe 10% of your portfolio at the most into the higher risk, like crazy stuff. But set a good foundation first. Don’t put all of your money into speculative investments and then wonder why you don’t have any money left because you probably won’t.
Sean Pyles:
And I will just quickly add for the sake of our compliance department, that we are not financial or investment advisors. If you want specific individualized investment advice, speak with a financial advisor, hopefully a fiduciary financial advisor. Okay. Now, I know we’ve been kind of talking around this question for this conversation, but I would love to hear what you two would have done differently if you could go back to when you were 23 and maybe improve your finances, knowing all that you know now?
Elizabethy Ayoola:
That’s a deep, deep, deep sigh. So honestly speaking, the first thing I thought is like, oh my God, I would’ve stopped partying and buying alcohol and save more money. But then I remembered that I was living in Nigeria earning like $400 a month, which was seen as a good salary. So I barely had any money to live, quite frankly. And I think that’s a reminder that sometimes you just ain’t got really barely enough money to save and you just need to earn more. But I definitely would have educated myself more on personal finance and I would’ve at least stashed away something into an investing account. So that’s what I would’ve done. But then again, if I started investing too early, I might be in Turks and Caicos right now instead of chatting to you all. So I guess it worked out how it was supposed to.
Sean Pyles:
I’m glad you’re here with us, but also I would be happy for you if you were traveling the world instead of doing this. Sara, what about you?
Sara Rathner:
So I think a lot of people in their early 20s are, there’s just a lot of fear and uncertainty at that point in your life, and I definitely felt that at that time where there are all these big life milestones that are coming up for you eventually and you just don’t know when they’re going to happen. And so I was so worried about whether or not I’d be able to get to that point. But you’re 23.
Knowing how fast the next 10 to 20 years will go for you, just savor it because everything else is going to pile on really, really fast. And the way you spend your weekends is going to look really different. Do take a couple of steps to improve your position in life later on and use that gift of time. But then, yeah, you should have the wants budget, you should go travel with your friends, go out with your friends. Once you all get partnered up, you’re not going to see your friends as often, so enjoy it.
Sean Pyles:
Well, as someone who definitely enjoyed themselves a lot in their early 20s, I don’t regret any of it, really, shockingly, but it did come at the expense of my financial health in some senses. I really didn’t invest until my mid 20s. I barely had a budget until around the same time. So I would go back and encourage myself to be a little bit more balanced in the having fun and the forward planning aspect of life. But you’ve got to learn your lessons as you learn them. And that’s where I was at the time.
And one thing I think is important to realize and think about as you are trying to map out what having an adult financial life looks like is that the beginning of this financial journey is always going to be the hardest because you simply don’t know what you don’t know. There’s so much to learn. When you’re 23, you’re paying rent on your own for the first time. You’re figuring out how to make meals for yourself for the first time and building these good habits does take time. So don’t feel like you have to do everything all at once, but do make that concerted goodwill effort to try to better your relationship with money and use it to build the life that you want. Well, Elizabeth, thanks so much for coming on and talking with us.
Elizabethy Ayoola:
Thanks for having me.
Sara Rathner:
And that’s all we have for this episode. Remember, we’re here for you, whatever life phase you’re in, and we want to hear your real world questions because we’re here to make you smarter about your money decisions. So 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.
Sean Pyles:
And remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts and iHeartRadio, to automatically download new episodes. This episode was produced by me. Tess Vigeland helped with editing. Sara Brink mixed our audio. And a big thank you to NerdWallet’s editors for all their help. And here’s our brief disclaimer again. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.
Sara Rathner:
And with that said, until next time, turn to Nerds.
You just got a new job offer and are wondering if $110,000 is a good salary. The truth is that in many parts of the U.S., it can be, especially for a single person. In most cases, you can probably cover your basic expenses and have some left over for savings.
Of course, there are many factors to consider when thinking about whether $110,000 is a good salary for you. Let’s dive in.
Is $110K a Good Salary?
In most cases, $110,000 is a good six-figure salary for a single person. Even when you factor in the rising costs of housing, food, and transportation, you can still comfortably afford to live in most parts of the country.
However, if you’re in an area where the cost of living is higher, you may find that you can afford the basics but not have much left over for other goals like retirement or travel. That’s why it’s crucial to look at your current spending patterns and the cost of living in your area to discern whether earning $110,000 is enough for your needs. A money tracker can give you a snapshot of your finances and provide insights into your spending and budgeting.
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Median Income in the U.S. by State in 2024
According to the latest data available from the U.S. Census Bureau, here is the median household income for all 50 U.S. states:
State
Median Household Income
Alabama
$59,609
Alaska
$86,370
Arizona
$72,581
Arkansas
$56,335
California
$91,905
Colorado
$87,598
Connecticut
$90,213
Delaware
$79,325
Florida
$67,917
Georgia
$71,355
Hawaii
$94,814
Idaho
$70,214
Illinois
$78,433
Indiana
$67,173
Iowa
$70,571
Kansas
$69,747
Kentucky
$60,183
Louisiana
$57,852
Maine
$68,251
Maryland
$98,461
Massachusetts
$96,505
Michigan
$68,505
Minnesota
$84,313
Mississippi
$52,985
Missouri
$65,920
Montana
$66,341
Nebraska
$71,772
Nevada
$71,646
New Hampshire
$90,845
New Jersey
$97,126
New Mexico
$58,722
New York
$81,386
North Carolina
$66,186
North Dakota
$73,959
Ohio
$66,990
Oklahoma
$61,364
Oregon
$76,362
Pennsylvania
$73,170
Rhode Island
$81,370
South Carolina
$63,623
South Dakota
$69,457
Tennessee
$64,035
Texas
$73,035
Utah
$86,833
Vermont
$74,014
Virginia
$87,249
Washington
$90,325
West Virginia
$55,217
Wisconsin
$72,458
Wyoming
$72,495
Recommended: Average Income by Age
Average Cost of Living in the U.S. by State in 2024
As anyone who’s ever received a paycheck knows, your salary and the amount you actually take home after taxes differ. After deducting for federal income taxes, Social Security tax, and Medicare, the average take-home pay on a $110,000 salary is around $85,544 — and that doesn’t include state taxes.
With that in mind, looking at the average cost of living in different states can help you decide whether $110,000 is a good salary. In the chart below, you can see how much a typical resident of each state spends on basics like food, transportation, utilities, and housing.
State
Personal Consumption Expenditure
Alabama
$42,391
Alaska
$59,179
Arizona
$50,123/td>
Arkansas
$42,245
California
$60,272
Colorado
$59,371
Connecticut
$60,413
Delaware
$54,532
Florida
$55,516
Georgia
$47,406
Hawaii
$54,655
Idaho
$43,508
Illinois
$54,341
Indiana
$46,579
Iowa
$45,455
Kansas
$46,069
Kentucky
$44,193
Louisiana
$45,178
Maine
$55,789
Maryland
$52,651
Massachusetts
$64,214
Michigan
$49,482
Minnesota
$52,849
Mississippi
$39,678
Missouri
$48,613
Montana
$51,913
Nebraska
$37,519
Nevada
$49,522
New Hampshire
$60,828
New Jersey
$60,082
New Mexico
$43,336
New York
$58,571
North Carolina
$47,834
North Dakota
$52,631
Ohio
$47,768
Oklahoma
$42,046
Oregon
$52,159
Pennsylvania
$53,703
Rhode Island
$52,820
South Carolina
$46,220
South Dakota
$48,997
Tennessee
$46,280
Texas
$49,082
Utah
$48,189
Vermont
$55,743
Virginia
$52,057
Washington
$56,567
West Virginia
$44,460
Wisconsin
$49,284
Wyoming
$52,403
Source: U.S. Bureau of Economic Analysis
How to Live on $110K a Year
You can live relatively well on $110,000 a year as a single person — as long as you manage your expenses carefully. First, consider what your short- and long-term goals are. Do you want to have enough money set aside for a week-long vacation each year? Are you eager to be debt-free within a certain timeframe? Or do you want to max out your contributions to your employer-sponsored 401(k)?
Balancing these goals with your everyday expenses will help ensure you can afford the necessities while taking care of your future self.
How to Budget for a $110K Salary
Budgeting on a $110,000 salary is similar to how you would budget for other income thresholds. Consider the following strategies:
Determine Your Take-Home Pay
Assuming you make $110,000 gross, you’ll need to account for how much you’ll receive after taxes and other deductions are taken into consideration. For example, you may have to pay health insurance premiums (an average of $1,401 a year for an individual plan) or pretax retirement contributions (up to $23,000 per year). Let’s say you pay federal taxes and deductions, contribute the maximum to your 401(k), and pay the average amount for your health care, you’d be left with a take-home pay of around $61,143.
Bottom line: Once you have a clearer picture of what’s coming in, you can then budget appropriately for it. Tools like a budget planner app can help make the job easier.
Set Aside Money for Long-Term Savings
It’s fun to live in the moment, but it’s also important to think about the future. Consider using part of your income to start an emergency fund, and set aside money for larger expenses and goals. You may also want to look into savings vehicles like a high-yield savings account, which typically offers a higher interest rate than a traditional savings account.
Plan to Get Out of Debt
Using part of your salary to tackle your high-interest debt faster can be a good idea to free up funds for other pursuits. You can also consider options like refinancing or debt consolidation loans to help you reduce interest costs.
Maximizing a $110K Salary
Getting smart with your money means knowing how you can maximize the salary you earn. In general, you can aim to do so by spending only what’s necessary, investing so you can have a comfortable retirement, and saving.
You may want to consider moves like:
• Boosting your credit score to increase your chances of getting competitive interest rates
• Investing in securities that charge minimal fees
• Shopping around for loans to find the best rates and terms
• Finding a home that fits your budget
• Taking public transit when you can instead of driving a car
Quality of Life with a $110K Salary
You can have a good quality of life on a $110,000 salary depending on how you allocate your money. Even if you live in a higher cost of living area, there are ways to maximize the amount you earn to live well. Take the time to compare larger expenses like housing, insurance, and healthcare costs.
Recommended: Average Pay in the United States
Is $110,000 a Year Considered Rich?
Does earning $110,000 mean you’re considered “rich”? Well, the term is relative. It all depends on where you live and how you spend your money. For example, if you invest a good chunk of your income to help you increase your overall net worth and live in a safe area, some would consider that being rich. However, if you’re the only income earner in your family of six, then $110,000 per year is likely not enough to make you feel wealthy.
Is $110K a Year Considered Middle Class?
According to the Pew Research Center, middle-class workers earn a salary that’s two-thirds to double the national median income. By that definition, a middle-class household makes between $47,189 and $141,568, and $110k falls within that range. However, where you live will also factor into whether you’re considered middle class. That’s because different states have their own median household earnings.
Example Jobs That Make About $110,000 a Year
high-paying jobs that earn a median wage of $110,000 or more:
• Architectural and engineering managers
• Financial analysts
• Software developers
• Math and science postsecondary teachers
• Dentists and doctors
• Nuclear power reactor operators
The Takeaway
Earning $110,000 can mean you have the ability to live a good quality of life. Plus, it’s higher than the average salary in the U.S. That being said, you’ll still want to be mindful about where your money goes so you can achieve your financial goals and more.
Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.
SoFi helps you stay on top of your finances.
FAQ
Can I live comfortably making $110k a year?
It is possible to live comfortably making $110,000 per year. However, doing so largely depends on factors like whether you have dependents, where you live, and what types of necessities and luxuries you want.
How much is $110k a year hourly?
Assuming you work 40 hours per week, you’ll earn around $52.88 each hour.
How much is $110k a year monthly?
You will earn about $9,166.66 each month on a $110,000 annual salary.
How much is $110k a year daily?
Assuming you work five days a week, $110,000 per year salary equates to roughly $423.07 per day.
Photo credit: iStock/Jacob Wackerhausen
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A budget is an important tool to help you balance your income and your spending, keep your savings on track, and help you avoid debt. But like many good things, it sometimes goes off the rails. A person might start a budget with the best of intentions but then find it hard to stick to it. Or they might encounter an emergency expense and have a hard time getting back in the groove.
Learn what the common pitfalls are and how to avoid common budgeting mistakes to help your financial life thrive.
10 Budgeting Mistakes to Avoid
Here are 10 of the most common budget mistakes people make. Get familiar with them as a way to steer clear of them.
1. Not Having a Budget
Some people make the budget error of…not having a budget at all. Maybe it seems too hard, too time-consuming, or too boring; you’d rather be watching a hot new streaming series or playing with your dog.
Nevertheless, if you don’t create and follow a budget, you’re missing out on major benefits:
• You may not save enough in your bank account for your future
• You may feel stressed about reaching your long-term goals
• You might spend beyond your means, which could land you in debt and strain on your financial resources.
Recommended: Common Financial Mistakes First-Time Parents Make
2. Not Tracking Spending
Tracking your spending can be one of the more tedious tasks required for budgeting, but it’s also an incredible, truth-revealing tool. How else would you know when you are above or below your limits? You risk blowing past your limit by overspending in some categories, meaning you’ll have less (or none) for other categories. For example, overspend on eating out, and you might have less to put toward your retirement savings. Fortunately, there are an array of expense-tracking apps (many are free) that can help simplify this process.
3. Not Having Emergency Savings
The general recommendation is to save three to six months’ worth of expenses in a dedicated emergency fund. This is money you can draw on in case of emergency medical expenses and car repairs, for instance. It also provides a cash cushion should you lose your job, giving you time to get back on your feet without going into debt.
Not having an emergency fund can torpedo your budget, requiring you to draw money from other categories to cover unexpected expenses, or requiring you to take on debt.
If you don’t have a rainy day fund yet, it may be wise to set up automatic deductions monthly. Even as little as $25 can begin building a buffer. Keep your emergency cash in a separate savings account so you aren’t tempted to touch it. And if you need to dip into the account, be sure to budget additional savings until you are able to replenish it.
4. Not Considering Cheaper Alternatives
Budgeting doesn’t necessarily mean giving things up. Sometimes it can mean looking for cheaper alternatives. For example, you could swap out a pricey gym membership for one at a more budget-friendly place instead. Instead of renewing the same car insurance you’ve always had, you could shop around online for a better deal. You might even call your credit card issuer to request a lower interest rate or try to negotiate a medical bill. All of these options can free up cash in your budget that can go toward meeting other goals.
5. Thinking That You Can’t Have Fun While on a Budget
One of the reasons people don’t budget is it can feel like a real slog and a buzzkill. They assume that in order to budget successfully, they have to give up doing things they like. However, that’s not necessarily true. While a budget ensures that your necessary expenses are taken care of first, it can also provide discretionary funds that can be used however you want, from going to see a movie to booking a weekend getaway.
You may also consider making budgeting more fun by rewarding yourself when you meet certain goals. For example, you may want to treat yourself when you pay off a credit card. Just be sure you’ve already earmarked funds to pay for your reward.
6. Saving for Too Many Things Simultaneously
Another budgeting mistake involves trying to save for too many things at once. In this situation, it’s easy to stretch yourself thin. You might start to feel like you’re spinning your wheels and are unable to follow your budget.
A solution can be to narrow your focus. To prioritize your savings, first consider wants versus needs. For example, you may want to drill down on a single need, like building an emergency savings fund, rather than upgrading your mobile phone (which is a want, after all). Once your need is taken care of, then you can consider allocating funds for a want. Delaying gratification a bit can be a valuable tool when successfully managing your money.
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7. Not Adjusting Varying Expenses Every Month
Some expenses, like rent and utility bills, are relatively fixed. Others, like how much you spend on groceries can vary from month to month. If you don’t compensate for that fluctuation, you may be making a budget mistake.
If you notice you are suddenly spending more each month in a certain category, be sure to adjust your budget accordingly, or look for ways to cut back on spending in that category. To protect yourself in times of high inflation, it can be especially important to monitor this. Your food, gas, and heating expenses may well run high for a while.
8. Not Taking Into Account One-Time Expenses
One-time expenses can be real budget busters if you don’t plan for them ahead of time. Estimate the cost of the expense, and spread out your savings over a couple of months.
For example, if you plan to attend a wedding that will cost $800, you could start saving $200 a month four months in advance so you don’t end up footing the bill all at once. Or let’s say you know you’ll be needing a set of new tires soon; start stashing away cash in advance so you don’t get hit with a major bill that sends your budget spiraling. Another category many budgeters overlook is gifts; birthday and holiday presents can add up, so remember to set aside funds to afford them without a hiccup.
9. Having an Unrealistic Budget
It’s easy to be optimistic and have the best intentions when you create your budget, but make sure it’s something you can realistically stick to. Otherwise, you may have a budget mistake on your hands.
You may be overly optimistic, for instance, if you allocate 20% of your take-home pay toward one goal. If you oversave in one area, like for a downpayment on a home, for example, it may mean that you could incur credit card debt in order to buy necessities like groceries. Be honest with yourself about how much you spend and how much you can save.
10. Having the Wrong Budget Method for You
There is no one-size-fits all budgeting strategy. As we mentioned above, there are a number of different budgeting strategies you can use to help you build and stick to your budget. The best one is the one that works for you. Just because a budget strategy sounds good when you first learn about it or your best friend swears by it doesn’t mean it will work for you. It’s a budgeting error to cling to a system that isn’t working. If the technique you are using isn’t right for you, acknowledge that, and try something else.
The Takeaway
Now you know what is a common mistake made in budgeting; 10 of them, in fact. By avoiding these pitfalls, you give yourself a better chance of sticking to your budget, saving money in your bank account, and meeting your financial goals. What’s more, you’re far less likely to be derailed by debt, and interest payments that could eat into your ability to save and manage your money.
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FAQ
What are some pitfalls of budgeting?
Budgeting pitfalls that can derail your financial goals include failing to have a budget, not tracking your expenses, forgetting to account for varying monthly expenses, and not building up an emergency fund.
What is improper budgeting?
Improper budgeting can occur if your budget is incomplete, if it’s overly ambitious (not recognizing how much you actually spend, for instance), or if you don’t update it with new sources of income or expenses, you’re not budgeting correctly.
Why do people fail in budgeting?
A budget may fail for a variety of reasons, such as trying to achieve too ambitious a goal or too many goals at once; not tracking your expenses; and sticking with a budgeting strategy that doesn’t fit your needs. If the latter is the case, try multiple strategies to find the one that suits you best.
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As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
The average 30-year fixed mortgage interest rate is 7.00% today, down -0.02% compared to one week ago. The average rate for a 15-year fixed mortgage is 6.46%, which is an increase of 0.03% since last week. For a look at mortgage rate movement, see the chart below.
The Federal Reserve has been holding off on interest rate cuts because inflation has been slow to improve. While experts still expect mortgage rates to gradually move lower in the coming months, housing market predictions can always change in response to economic data, geopolitical events and more.
Today’s average mortgage rates
Today’s average mortgage rates on Jul. 04, 2024, compared with one week ago. We use rate data collected by Bankrate as reported by lenders across the US.
Lower mortgage rates make buying a home more affordable. Experts recommend shopping around with different mortgage lenders to find the best deal. Enter your information below to get a custom quote from one of CNET’s partner lenders.
About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool features partner rates from lenders that you can use when comparing multiple mortgage rates.
How can I choose a mortgage term?
Each mortgage has a loan term, or payment schedule. The most common mortgage terms are 15 and 30 years, although 10-, 20- and 40-year mortgages also exist. With a fixed-rate mortgage, the interest rate is set for the duration of the loan, offering stability. With an adjustable-rate mortgage, the interest rate is only fixed for a certain amount of time (commonly five, seven or 10 years), after which the rate adjusts annually based on the market. Fixed-rate mortgages are a better option if you plan to live in a home in the long term, but adjustable-rate mortgages may offer lower interest rates upfront.
30-year fixed-rate mortgages
The average 30-year fixed mortgage interest rate is 7.00% today. A 30-year fixed mortgage is the most common loan term. It will often have a higher interest rate than a 15-year mortgage, but you’ll have a lower monthly payment.
15-year fixed-rate mortgages
Today, the average rate for a 15-year, fixed mortgage is 6.46%. Though you’ll have a bigger monthly payment than a 30-year fixed mortgage, a 15-year loan usually comes with a lower interest rate, allowing you to pay less interest in the long run and pay off your mortgage sooner.
5/1 adjustable-rate mortgages
A 5/1 adjustable-rate mortgage has an average rate of 6.66% today. You’ll typically get a lower introductory interest rate with a 5/1 ARM in the first five years of the mortgage. But you could pay more after that period, depending on how the rate adjusts annually. If you plan to sell or refinance your house within five years, an ARM could be a good option.
Why are mortgage rates so high right now?
At the start of the pandemic, mortgage rates were near record lows, around 3%. That all changed as inflation began to surge and the Federal Reserve kicked off a series of aggressive interest rate hikes starting in March 2022 to slow the economy, which indirectly drove up mortgage rates.
Now, more than two years later, mortgage rates are still around 7%. Over the last several months, mortgage rates have fluctuated in response to economic data and investors’ expectations as to when the Fed will start to lower rates.
Today’s homebuyers have less room in their budget to afford the cost of a home due to elevated mortgage rates and steep home prices. Limited housing inventory and low wage growth are also contributing to the affordability crisis and keeping mortgage demand down.
Will mortgage rates drop this year?
Most experts predict mortgage rates will fall below 7% in the coming months. However, a sustained downward trend will depend on several factors, including upcoming inflation and labor data.
The Fed hasn’t hiked interest rates in almost a year, but an actual rate cut doesn’t appear imminent. Some experts say the first cut could come as early as July, though it’s more likely we see the Fed lower rates in September or November.
“If the Fed makes any moves later this year, the signal would be sufficient for the mortgage market, and mortgage rates would start falling,” said Selma Hepp, chief economist at CoreLogic. “In that case, we could see the mortgage rates around 6.5% at the year-end.”
One thing is for sure: Homebuyers won’t see lower mortgage overnight, and a return to the 2-3% mortgage rates from just a few years ago is unlikely.
Here’s a look at where some major housing authorities expect average mortgage rates to land.
Calculate your monthly mortgage payment
Getting a mortgage should always depend on your financial situation and long-term goals. The most important thing is to make a budget and try to stay within your means. CNET’s mortgage calculator below can help homebuyers prepare for monthly mortgage payments.
Where can I find the best mortgage rates?
Though mortgage rates and home prices are high, the housing market won’t be unaffordable forever. It’s always a good time to save for a down payment and improve your credit score to help you secure a competitive mortgage rate when the time is right.
Save for a bigger down payment: Though a 20% down payment isn’t required, a larger upfront payment means taking out a smaller mortgage, which will help you save in interest.
Boost your credit score: You can qualify for a conventional mortgage with a 620 credit score, but a higher score of at least 740 will get you better rates.
Pay off debt: Experts recommend a debt-to-income ratio of 36% or less to help you qualify for the best rates. Not carrying other debt will put you in a better position to handle your monthly payments.
Research loans and assistance: Government-sponsored loans have more flexible borrowing requirements than conventional loans. Some government-sponsored or private programs can also help with your down payment and closing costs.
Shop around for lenders: Researching and comparing multiple loan offers from different lenders can help you secure the lowest mortgage rate for your situation.
“We need to be able to prep people accordingly for those balloons or for those variable rate increases on their interest rates,” DePaolo added. Upfront costs for land can be similar to, or lower than, those for a standard home purchase, but construction costs can increase substantially. Additionally, some clients might qualify for the land purchase but not the construction, necessitating careful discussions about long-term goals.
“What are their long-term goals? And although they can buy the land, can they also build on it later?” asked DePaolo. “Taking into consideration wells, and electricity, septic systems, and if those were already present on the land itself, because if they’re not those can be very costly.”
Due diligence is key
Speaking to MPA, DePaolo recounted instances where clients had to go off-grid or adopt alternative water systems due to unforeseen difficulties, underscoring the need for thorough due diligence. And, when asked whether her work mainly involves single parcels of land for individual homeowners or larger parcels for developers, DePaolo reveals they actually do both.
“My team and I focus on one parcel of land or multiple parcels of land multifamily,” she said. “We’ve had people looking at land and they wanted to build the home, and then potentially a commercial restaurant down the road. So we’ve had a lot of different options for people and I’ve addressed all of it.”
With a broad perspective across diverse real estate markets, DePaolo notes regional variations in borrower needs.
Some of the best budgeting methods include proportional budgeting, zero-based budgeting, and reverse budgeting.
This article was originally published on Arrest Your Debt and has been republished here with permission.
A budget method sets out how an individual, company, or organization plans to spend money over time. Budgeting for beginners can be an extensive process, but a failure to budget is a quick path to long-lasting debt problems.
Multiple budgeting methods address different needs—some people might only need to set a budget for a specific purchase, while others might be looking for long-term financial strategies. Here, we’ll explore several different budgeting methods and valuable personal finance resources to help you address future financial questions.
The Traditional Budgeting Method
The traditional way to budget is rooted in the business and corporate world. Those who are willing to invest the time can use this method to handle their personal finances.
With this method, you study the income and expense figures from a previous month or year to help you plan out an upcoming period. You subtract the expenses from your take-home income, the funds in your checking account, or cash in your savings account. With this method, you’ll also need to account for inflation and any significant changes to your income.
Track Your Expenses
Check with your bank for options to get spending reports, and use banking apps to help streamline this process. You can then update your expenses daily or weekly for the most accurate results.
This type of accounting helps you understand what you’ve brought in, what you’ve spent, and what you have left each period. You can then decide where you may need to trim spending—especially if you find that your funds are running low each month. For example, you might see opportunities to lower food expenses by:
Using store-label or generic brand groceries rather than national name brands
Cooking more and eating out less
Opting for water instead of sodas at the restaurant
Change Your Shopping Habits
Switching up your shopping habits based on sales and price hikes is an excellent way to save money. Some common habits to target include:
Driving less can help lower your monthly gas or EV charging expenses.
Ordering online, especially if you can avoid shipping and handling charges.
Purchase foods that can serve multiple meals to reduce the time and money spent at grocery stores.
Wait to grab extra supplies until you’re already commuting from work or running errands.
Zero-Based Budgeting Method: AKA Zero-Sum Budget
In this approach, you give a task to every dollar you bring home. Since you account for every dollar of income, you should not have any money left over in your budget at the end of the month.
Here, you don’t simply rely upon expense categories. However, you would identify specific categories for food spending and then set funds aside for that distinct purpose.
Below is an example of a zero-based budgeting system for a particular month:
Total Monthly Income: $3,000.00
(-) Expenses:
Rent – $700.00
Electrical – $100.00
Water – $50.00
Cable and Internet – $175.00
Wireless/Cell Phone – $200.00
Grocery Shopping – $400.00
Dine out – $75.00
Car Payment – $200.00
Gasoline – $200.00
Car Insurance – $150.00
Credit Card 1 – $75.00
Credit Card 2 – $100.00
Doctor’s Visit – $25.00
Church Offering – $100.00
Deposit to Savings Account – $450.00
(=) $0 leftover after paying all expenses
You have all of your $3,000 in take-home pay allocated to various expenses and items in this example.
The zero-based method might not involve as much detail and time as you think. Remember that you have many fixed expenses such as mortgage or rent, car payments, and phone or cable bills. If one-time expenses crop up that are high priority, you can briefly pull funds from non-essential items.
Proportional Budgeting Systems
In a proportional budget, you devote a certain amount of your monthly income to specific categories. Unlike the zero-based method, you focus less on specific items. Instead, general areas of expenses guide the budgeting process.
The 50/30/20 Budget Method
The 50/20/30 method calls for you to reserve 50% of your funds for fixed expenses (i.e. rent & car notes), 20% for emergencies, long-term savings goals, and paying extra on your debts. The remaining 30% can then go to your wants.
Suppose you have a monthly after-tax income of $3,000. In the 50/20/30 budget, you distribute your money as follows:
(50%) Essentials: $1,500
(20%) Savings, Retirement, Emergency-Fund: $600
(30%) Discretionary: $900
The 50/30/20 helps you keep long-term savings in mind, but it might not be effective if your income is low and inflation is high. When the cost of living increases, it’s easy for the essential budget to exceed 50% of your monthly income.
The 60/40 Budgeting Style
The one-time MSN Money Editor-in-Chief Richard Jenkins developed another proportional budget. In the 60/40 approach, you spend 60% of your net income on committed expenses. This categorization of spending includes mandatory expenses and non-essentials to which you commit.
You then dedicate savings and money that might not have any utility beyond “fun” to the remaining 40%. Ideally, you can distribute these funds in 10% increments across three 401(k) or retirement plans, including a tax-free account. In developing his budgeting plan, Jenkins expressed a strong preference for saving well above the recommended 5% of income.
With enough income and the ability to shave expenses from your committed expenses, you might reach significant savings goals and future spending power in a few years.
Proportional Budgets for Would-Be Homeowners
If you plan to buy a home, your monthly debt payments should not exceed 43% of gross (pretax) monthly income. In calculating this debt-to-income ratio, you include car loans, student loans, credit card debt, and the anticipated monthly mortgage payment in debt. For example, your debt payments should stay at or below $2,580 per month on a monthly gross income of $6,000.
Also, consider the cost of maintaining your home. Some financial or home experts suggest budgeting 1% of your home’s price for maintenance. Other advisors include maintenance costs with mortgage payments and suggest that your housing costs do not exceed one-fourth of your income.
Reverse Budgeting: AKA Pay Yourself First Budget
Reverse budgeting makes saving the top priority. Most budgets have you start with mandatory expenses such as debt payments, food, and utilities. When you put the budget in reverse, you first decide how much to save and then set funds aside for your other expenses.
Reverse budgets should include a mixture of short-term and long-term savings goals. If you’re planning to buy a home or car or save a certain amount for college or retirement, start the process by estimating the cost of the particular benchmark.
Envelope Budget AKA Cash Envelope Method
Many budgeting techniques focus on determining how much to spend on particular categories depending on your financial goals. With the cash envelope system, you’re mentally forcing yourself into a planned spending limit.
Specifically, you label envelopes according to spending categories. Your take-home pay goes into particular envelopes based on your budget for each category. To that end, you might use some of the methods we’ve discussed, especially a proportional budget method, to decide how to allocate the money.
As you want or need to pay for something, you take money out of the envelope for that category and pay for the items with cash. Once you have emptied the envelope, you no longer spend on that category. With discipline and commitment, you resist the urge to borrow from another category.
Calendar Budgeting
Calendar budgeting encourages you to base your spending on your paydays and your monthly due dates. For example, if you get paid on the first and the fifteenth of each month, you would mark down those days on your budget along with the amount you expect to receive.
Next, you can mark down each fixed payment that will be due during your payment periods. If you receive $1,500 on the first and you have an $80 smartphone payment due on the 10th, you’ll want to jot down $1,500-$80 on your budget. Knowing how to read your paycheck stub is vital to effectively using this method.
Value Proposition Budgeting
Value proposition budgeting, also called “priority-based budgeting,” prompts people to measure the importance of every item they spend money on. The more integral an expense is, the more it’s justifiable if a large percentage of your budget is spent on it.
Businesses and entrepreneurs might favor this method, as it illustrates which expenses are worth their weight in revenue and which you can trim down. Using this method before applying for small business loans can also help you stay within your limit.
Budgeting Methods FAQ
A lot of questions can surface when you’re building out a budget. Here are some of the most common questions we’ve encountered.
What is the best budgeting model?
Budgeting isn’t a one-size-fits-all process, so there isn’t one model that beats the rest. It helps to learn about as many different budgeting strategies as possible to help you construct a plan that suits your specific needs.
The following information will highlight some of the most prominent budgeting methods people use. However, incorporating ideas and budgeting categories from multiple different methods is also a fantastic strategy.
What Things Do I Need to Include in My Budget?
Excel spreadsheets, Google Sheets, a printable monthly budget template, or a budgeting app can all help you account for your income and expenses. Start by listing your take-home pay and other income you received in a given period. If you’re basing the budget on a year, find your W-2 form and subtract all of the taxes withheld from the gross income. As an easier approach, use your final pay stub for the calendar year or total the paystubs in the particular previous month.
Next, list your common expenses for each month. You might have debt payments such as mortgage, car, student loan debt, and credit cards. Other categories of expenses include transportation, food, clothing, utilities, entertainment, television, and other media and insurance.
Build a Better Budget with Credit.com
The budgeting method that works best for you is a personal preference and depends on your financial situation, goals, and ability to be detail-oriented. Whatever you use to create your budget, budgeting should enhance your financial literacy, help you find approaches to debt repayment and other financial goals, and afford you discipline and structure in your spending habits.
A successful budget involves total buy-in and a belief that you can achieve financial independence and finally fix your debt payoff problems. Choose one of these simple budgeting methods to take control of your financial future and reduce your overall money stress.
Check out Credit.com’s guide for managing debt if you need help recovering from a financial setback. When you’ve got the funds, our investing guide can help you learn more ways to strategically increase your income.
Are you wondering what the best passive income apps are? The best passive income apps can help you make money and build wealth while sleeping, on vacation, and more. With passive income apps, you can make money using just your phone or computer. These apps help you earn money in different ways, like investing in…
Are you wondering what the best passive income apps are? The best passive income apps can help you make money and build wealth while sleeping, on vacation, and more.
With passive income apps, you can make money using just your phone or computer. These apps help you earn money in different ways, like investing in stocks, getting cash back when you shop automatically, or renting out your things.
Passive income is money you earn without having to work all the time. You might need to do some work at the start, but after that, the money keeps coming in with little effort.
You don’t need to spend hours every day to see results. Many of these apps are easy to use and free, so they are a great way to improve your finances with little effort.
Using the right mix of passive income apps can help you make extra money regularly or even make a full-time income.
Recommended reading: 18 Passive Income Ideas To Earn $1,000+ Each Month
Best Passive Income Apps
Below are the best passive income apps:
1. Freecash
Freecash is a popular passive income app that helps you make some extra money with little effort. You can earn by completing tasks, such as taking surveys or downloading apps.
Another way that you can earn passive income with this app is by referring people to the app. You can earn up to 30% of your referral’s earnings for as long as they are a member. Your referral earnings start at 5% and can go up from there, all dependent on your affiliate earnings.
I have personally earned over $300 in passive income referral earnings from this platform (in addition to affiliate income), so I know that this is real.
Click here to sign up for Freecash.
2. RVshare
RVshare is a money making app where you can rent out your RV to others. This can help you make extra money every month. Many people use RVshare to turn their RV into a good source of passive income.
If you have an RV that you’re not using, you could make $100 to $300 a day, or more, by renting it out to others through RVshare.
RVshare is a great app for making money because it helps travelers save by renting RVs directly from owners, without a middleman. It’s like Airbnb, but for RVs.
You can rent many types of RVs on RVshare, such as:
Class B camper vans
Travel trailers
Pop-ups
Class C Motorhome
Class A Motorhome
Toy hauler
RVshare handles all payments securely and sends money to your bank account one business day after each rental starts.
You can learn more about RVshare here.
3. Neighbor
Neighbor is a self-storage app that lets you rent out extra space in your home. You can make money by offering spots like your garage, driveway, or even a spare room.
You can use this website to rent out your unused space and make up to $15,000 a year. With Neighbor, you can rent out your garage, driveway, basement, parking lot, shed, warehouse, carport, attic, street parking, or even a closet.
You can choose your own prices and decide which reservations you want to accept and host.
Neighbor provides $1,000,000 in host liability protection for your peace of mind. You also receive automatic monthly deposits directly to your bank account for fast payment.
Here’s how Neighbor works:
List your space: Describe your space and set your earning goals on Neighbor.
Respond to renters: Review requests from renters interested in your ad. You can see what they want to store and when, and decide whether to approve or decline.
Schedule move-in: Once you approve a renter, schedule their move-in date.
You can sign up for Neighbor for free here.
You can also learn more about Neighbor at Neighbor Review: How To Make Money Renting Your Storage Space.
4. Swagbucks
Swagbucks is a popular app that lets you earn money for doing simple tasks online. You can use it on both your phone and computer.
You earn points, called Swagbucks (also known as SB), for activities like taking surveys, watching videos, and browsing the web. These points can be redeemed for gift cards or cash via PayPal.
I have personally received over 110 gift cards from Swagbucks (I like to redeem my points personally for free Amazon gift cards).
Here are some ways to earn on Swagbucks:
Surveys – Share your opinions on various topics and earn points.
Videos – Watch short video clips and earn a few points for each one.
Shopping – Do your usual online shopping through the app’s links and get cash back.
Web browsing – Use the Swagbucks search engine and earn points just for searching.
Referral program – You can refer friends and family to Swagbucks and earn points.
Swagbucks is free to join and use, making it a great choice for anyone looking to make some extra money with little effort.
You can join Swagbucks through my referral link, and receive a $10 bonus.
5. Fundrise
Fundrise is one of the highest-paying passive income apps that lets you invest in real estate with income generating assets. You can start with as little as $10 and get started in around 5 minutes.
Fundrise pools your money with other investors to buy properties, such as single family homes, apartments, and industrial properties. You earn money from rent and property sales.
Investing in real estate can be risky, so make sure you understand what you’re getting into. Fundrise has an easy-to-use app and detailed updates on your investments.
Remember, your money is tied up for a while, so this is for long-term goals. Fundrise makes real estate investing simple and accessible.
You can sign up for Fundrise here.
6. Honeygain
Honeygain is a popular passive income app that lets you earn money effortlessly just by sharing your unused internet bandwidth and your internet connection. You can install it on your desktop or mobile device.
Here’s how Honeygain works:
You keep the app running in the background.
The app uses your unused internet resources.
You get paid for the data shared.
You earn money based on the amount of internet traffic routed through your connection. Honeygain pays $1 for every 10 GB of traffic.
7. Ibotta
Ibotta is a free cash-back app that helps you save money when you shop. You get rewards from shopping both in-store and online.
With the Ibotta app, you sign up for an account, unlock rebates and rewards, shop at stores like Walmart, Target, Kroger, and more, verify your purchases, and then earn cash. You can redeem rebates from hundreds of stores, and it doesn’t cost you anything – it’s free money!
Plus, Ibotta lets you earn cash back both online and in-store, setting it apart from other companies.
Ibotta stands out as one of the easiest passive income apps because you earn money while shopping as usual. It pays you in cash or gift cards for stores like Amazon and Starbucks.
Please click here to join Ibotta.
8. Airbnb
Airbnb can be a great way to earn passive income with minimal effort. By renting out properties short-term, you can make extra cash without much day-to-day work.
Whether you have an extra room, a vacation home, or even just a spare couch, Airbnb lets you list your space for short-term rentals, transforming unused real estate into a regular income source.
Airbnb manages bookings, payments, and provides insurance coverage, making it convenient for hosts once everything is set up. With its worldwide presence and easy-to-use platform, Airbnb continues to be a leading choice for earning passive income through property rentals.
9. Acorns
Acorns is a popular app that helps you save and invest your money without effort. It rounds up your everyday purchases to the nearest dollar. Then it invests the spare change into a diversified portfolio.
For example, if you buy a coffee for $3.50, Acorns rounds it up to $4.00. The extra $0.50 is invested.
You can click here to sign up for Acorns.
10. Rakuten
Rakuten is an easy-to-use app that helps you earn cash back from your shopping. You don’t need to do anything special. Just shop at over 2,500 stores and retailers through the app, the Rakuten website, or by downloading the Rakuten browser extension, and you can earn payouts.
Simply choose a store from their extensive list (including Kohl’s, REI, Toys”R”Us, and more), shop online as usual, and earn cash back effortlessly.
Rakuten earns a commission for directing you to the store where you shop, and they share a portion of that commission with you as a reward.
You can join Rakuten here.
11. Capital One Shopping
Capital One Shopping is an app that helps you save money while you shop online.
You don’t need to be a Capital One customer to use it. Just download the browser extension and start using it right away.
This automatic savings app stands out because it requires no extra effort on your part. The Capital One Shopping app automatically searches for and applies the best coupon codes as you check out, making sure that you get the most savings possible on your purchases.
You can learn more about Capital One Shopping here.
12. Fetch Rewards
Fetch Rewards is a fun way to earn rewards from your shopping receipts. You just take pictures of your receipts using the app and you get points.
I use Fetch Rewards all the time and it takes less than one minute to earn points. This mobile app is incredibly user-friendly and one of my favorites. I’ve been using it for a while now, and it’s super easy to earn rewards on the shopping you’re already doing.
With Fetch Rewards, you earn points by scanning receipts from any store – whether it’s a grocery store, clothing store, restaurant, or gas station. Then, you can redeem your points for gift cards to places like Target or Amazon, as well as other rewards.
Here’s how Fetch Rewards works:
Shop like you normally would.
Scan your receipt after you’re done.
Earn points on Fetch Rewards.
You can sign up for Fetch Rewards here.
You can also read my review at My Honest Fetch Rewards Review.
13. Robinhood
Robinhood is a popular app for investing in stocks, cryptocurrency, options, and exchange-traded funds (ETFs). It’s easy to use and has no fees or commissions, which makes it great for beginners.
Plus, Robinhood’s app is simple and clean. You can see your investments and track their performance easily.
Robinhood also allows you to buy fractional shares. This means you can invest in expensive stocks with just a few dollars.
You can even invest in dividend-paying stocks on Robinhood.
When you invest in dividend-paying stocks, you’re buying a piece of a company that gives you money regularly. Think of it like getting a small thank you for holding on to the company’s stock. These payments usually come from the company’s profits and they’re called dividends.
Here’s a vehicle I rented on Turo when I was visiting Hawaii. The person I rented from had many, many vehicles listed on the site and it seemed to be a good passive income stream for them.
14. Turo
Turo is an app that lets you rent out your car to make extra money. It is a peer-to-peer program where you cut out the middle person and rent out your car.
With Turo, you can earn about $500 or more per month with just one car. If you own a couple of cars, you might make over $2,000 per month. Your earnings depend on the type of car and how often it’s rented.
Just like renting out your RV when you’re not using it, you can also rent out your car!
It’s a cost-effective option compared to traditional rental car companies for customers, and it’s a great way to earn extra money if you’re working from home and your car isn’t in use or if you have a two-car household.
I have rented cars a few times on Turo and I have always had a good experience. It looks like a possibly good way for a person to make money.
15. M1 Finance
M1 Finance is an app where you can earn passive income.
Some of the ways you can earn passive income through this app are by investing your money in the stock market (you can customize your investment portfolio with over 6,000 stocks and ETFs) as well as saving your money in their high-yield account (at the time of this writing, their high-yield savings account rate was 5.00%).
16. Masterworks
Masterworks is an app that lets you invest in fine art.
You don’t need to be wealthy to own a piece of famous art. Masterworks purchases valuable paintings and you can buy shares in these artworks. When the painting is eventually sold, you receive a portion of the profit.
Frequently Asked Questions
Below are answers to common questions about passive income apps.
How can I make $1000 a month passively?
There are many ways to make $1,000 a month passively, such as by renting out a space on Airbnb or Neighbor, renting out a car or RV, investing in an investment app such as Masterworks or Robinhood, and more.
Can you make passive income from an app?
Yes, you can make passive income from an app. Some passive income apps include Neighbor, RVshare, Freecash, and M1 Finance.
How can I make passive income from my phone?
You can make passive income from your phone by installing apps that pay you for different things, such as renting out your stuff, getting cash back, or investing your money. For instance, Honeygain pays you for sharing your internet data, while Rakuten gives you cash back for shopping. These apps run in the background, requiring minimal effort from you once set up.
How to make $5,000 a month passively?
You can make $5,000 a month passively by investing more of your money in different kinds of investments, such as stocks and rentals. It may take some time to get to $5,000 a month in passive income, but it is possible.
What are the highest-paying passive income apps?
The highest-paying passive income apps depend on how much time, effort, and money you put into it. But, generally, passive income apps where you are investing your money (such as in the stock market) or renting out things you own (like a property rental or vehicle rental) typically pay the most.
What are some free passive income apps?
Free passive income apps include Freecash, RVshare, Neighbor, Airbnb, Honeygain, Rakuten, and Acorns.
Best Passive Income Apps – Summary
I hope you enjoyed this article on the best passive income apps.
As you can see, there are many ways to make money with passive income apps. Some will allow you to earn simply some spare cash, whereas others you may be able to build up and eventually earn a full-time income.
Some may require you to invest your money up front (like Fundrise), and some of them are free passive income apps (like Honeygain or Fetch Rewards).
The best passive income app depends on what you are looking for, the amount of time you have, and the amount of risk that you want to take on.