In October I published my most recent update in what I call “The Digit + Axos Invest Experiment”.
Since February has come and gone I thought this might be a good time to do my review of the experiment after 1 year – to see just how much I was able to save, and invest, over that time.
The Experiment
The series of posts was designed to show just how easy it can be to save and invest using today’s free and automated saving and investing solutions.
To facilitate the experiment I opened two new accounts, both with free automated services that I discovered just over a year ago
The first account was an free online savings account from Digit, an account that helps take the busy work out of saving. It analyzes your checking account daily and at regular intervals it saves small amounts of money from your checking and puts it into your Digit savings account – without your intervention. It allows you to save money, a little bit at a time, without even realizing it.
The second account is a free automated investment adviser from the folks at Axos Invest. When you have an investment account from Axos Invest, their system will allow you to regularly invest in a taxable or tax-advantaged retirement account, and it will automatically invest your funds in a portfolio of low-cost ETF index funds. It’s a great new long term investing site, along the lines of Betterment or Wealthfront, but without any account management costs.
Digit and Axos Invest are both big on the idea of automating things in order to make them more efficient, more cost-effective and better for your bottom line. I liked the idea behind both sites, and after signing up, a year ago I decided to take both services on a trial run, and to run an experiment.
Just how much could I save automatically for the year using Digit’s tools? How much would I be able to invest at no cost using Axos Invest? How much intervention would I need to have – and just how much could I save over time? First, let’s take a brief look at these two accounts.
Digit Savings Account
According to Ethan Bloch, the founder of Digit, the company was started to help people, “maximize their money, while at the same time driving the amount of time and effort it takes to do so as close to 0 minutes per year as possible”
So how does Digit work? You sign up for an account, and link your checking account. Digit will then analyze your income and expenses, find patterns and then find small amounts that it can set aside for you – without any pain for you.
So once you sign up and turn on auto-savings, every 2 or 3 days Digit will transfer some money from your checking to your savings, usually somewhere between $5-$50. Digit won’t overdraft your account, and they have a “no overdraft guarantee that states they’ll pay any overdraft fees if they accidentally overdraft your account.
Open Your Digit Savings Account
Axos Invest Investing Account
Axos Invest launched with the goal of being the world’s first completely free financial advisor. Their founders had a mission “to ensure everyone can achieve their financial goals, which starts with investing as early as possible. This is why there is no minimum to start and we do not charge fees.”
Axos Invest’s founders understood that one of the drags on the typical person’s portfolios is the fees that they’re paying to invest, as well as the friction point of having to invest thousands of dollars to start. They changed that with no minimums to invest, and no fees charged for investing. Axos Invest will be releasing some premium add-on products for their users, which they will charge for, but a basic investing account will not cost anything beyond the mutual fund expense ratios associated with your investments.
What do you invest in with Axos Invest? Axos Invest will invest your funds based on Modern Portfolio Theory (MPT). Your investments will be diversified, low cost and recognize the value of long term passive investing by investing in ETF index funds. Plus, when you sign up now, you’ll get a $20 Signup Bonus!
Open Your Axos Invest Investing Account and Get A $20 Bonus!
The Digit + Axos Invest Experiment (D+AI Experiment)
So for my Digit + Axos Invest Experiment, the goal was not only to take these two free products for a spin, but also to show just how easy (and low cost) it can be to invest. There really should be no excuse to not get started.
When I started in February 2015 my goal was to allow Digit to automatically pull money from my checking account and put it into my Digit savings. Whenever the amount in my Digit savings reached $75 or more I would transfer that money over to my Axos Invest account and invest it in their highly diversified set of ETF index funds.
Why was I doing it this way? I did it this way because Axos Invest has no minimums and you can buy fractional shares, so why not? I can transfer money in small chunks, and engage in a bit of dollar-cost averaging while I’m at it.
So how are things going now that I’ve been doing the experiment for an entire year? Let’s take a look.
The Experiment 1 Year In Progress
After setting up my Digit and Axos Invest accounts I put the plan in action and allowed my Digit account to start saving on my behalf.
Digit started saving small amounts in my account when I first began. $5 here, $15 there. Over time multiple transfers and deposits ended up adding up to larger amounts in my Digit account. My first transfer to my investment account was about $186.
From then on every time the amount reached around $75-$100 or more, I transfered the money to Axos Invest.
Amounts Saved And Invested In One Year
I’m now just over 1 year into my little experiment, and I’ve withdrawn my Digit savings balance and invested it in my Axos Invest Roth IRA 25 times.
Here are the amounts that I have withdrawn and invested, with the most recent investment first:
$541.21
$230.47
$296.95
$350.92
$306.40
$445.21
$173.84
$419.66
$112.68
$155.20
$142.02
$74.36
$79.76
$121.75
$82.03
$95.67
$81.27*
$93.28
$109.47
$76.20
$99.08
$99.32
$90.88
$74.72
$186.00
A total of $4538.55 was saved by my Digit account over the 12 months I did this experiment. I invested $3347.68 of that in my Roth IRA. (the last couple of months in the experiment a large tax bill came due and some of the Digit savings went to that instead of my Roth IRA)
Here’s a screenshot from my Digit account showing my latest $541.21 withdrawal for the purpose of investing.
After withdrawing the money I then transfer it from my checking account over to Axos Invest. Deposits can be used to purchase fractional shares of the ETF index funds used in the account.
I currently have $3298.83 invested at Axos Invest, from the $3347.68 I have deposited. The investments (and the markets) have gone down about 1.5% since I started, so that accounts for the losses.
Here’s my portfolio’s asset allocation in my Axos Invest account. It is a bit more aggressive than in my other retirement accounts.
The funds that Axos Invest currently uses, and their expenses, are shown below (but are subject to change)
Vanguard Total Stock Market ETF (VTI): 0.05%
Vanguard FTSE Developed Markets ETF (VEA): 0.09%
Vanguard FTSE Emerging Markets ETF (VWO): 0.15%
Vanguard Intmdte Tm Govt Bd ETF (VGIT): 0.12%
Vanguard Short-Term Government Bond Index ETF (VGSH): 0.12%
iShares Investment Grade Corporate Bond ETF (LQD): 0.15%
State Street Global Advisors Barclays Short Term High Yield Bond Index ETF (SJNK): 0.40%
iShares Barclays TIPS Bond Fund (ETF) (TIP): 0.20%
Vanguard REIT Index Fund (VNQ): 0.10%
We’ll see what kind of returns my account sees over the coming months/years, but I’m sure it will be close to what the market does. Since I’m not paying any account management fees to invest, I’ll be coming out ahead as compared to some other automated investment advisers.
A Recap Of My Progress After 1 Year
So how has the experiment gone now that I’ve made it an entire year? In my book it’s been a rousing success. I’ve saved $4538.55 over the 12 month period via Digit. If we divide that over 12 months, it means an average saved of about $378.21/month.
If you look at that $4538 amount, it’s about 83% of the annual $5500 contribution limit for a Roth IRA. So essentially, almost all of my year’s Roth IRA contributions are happening without me having to actually think about it.
The money is slowly coming out of my accounts – usually in amounts that don’t even really register. The savings amounts tend to be in the $10-50 range, although a few have been $100+. It’s amazing how fast those small amounts really add up!
The Power Of Investing Over Time
Let’s say you were in your 20s and you were to do something similar to what I’m doing with this experiment. You could end up with a pretty nice start to your nest egg over time.
Just setup automated savings and investments, and in my case that $4538 contribution for the year when extrapolated out over 30 years at an average 8% interest, will end up as just over $567,300 over 30 years.
To me that’s the power of long term investing. You can take small savings and investment amounts like this, and make it grow. In the end those small amounts end up adding up to a large lump sum in retirement. That’s pretty powerful. Why not get started now?
Join In The Digit & Axos Invest Experiment
Interested in joining the “Digit and Axos Invest Experiment” for year 2? I invite you to join in!
Open your accounts here:
After your accounts are open, sit back and wait for the savings to pile up – then invest! Piece of cake! Give it a shot and let us know how it goes!
Back in March I published the first post in what I call “The Digit + Axos Invest Experiment“.
The series of posts was designed to show just how easy it can be to save and invest using today’s automated saving and investing solutions.
To facilitate the experiment I opened two new accounts, both with free automated services that I discovered earlier this year.
The first account was an free online savings account from Digit, an account that helps take the busy work out of saving. It analyzes your checking account daily and at regular intervals it saves small amounts of money from your checking and puts it into your Digit savings account – without your intervention. It allows you to save money, a little bit at a time, without even realizing it.
The second account is a free automated investment adviser from the folks at Axos Invest. When you have an investment account from Axos Invest, their system will allow you to regularly invest in a taxable or tax advantaged retirement account, and it will automatically invest your funds in a portfolio of low cost ETF index funds. It’s a great new long term investing site, along the lines of Betterment or Wealthfront, but without any account management costs.
Digit and Axos Invest are both big on the idea of automating things in order to make them more efficient, more cost-effective and better for your bottom line. I liked the idea behind both sites, and after signing up I decided to take them on a trial run and to run an experiment.
Just how much could I save automatically for the year using Digit’s tools? How much would I be able to invest at no cost using Axos Invest? How much intervention would I need to have – and just how much could I save over time? First, let’s take a brief look at these two accounts.
Digit Savings Account
According to Ethan Bloch, the founder of Digit, the company was started to help people, “maximize their money, while at the same time driving the amount of time and effort it takes to do so as close to 0 minutes per year as possible”
So how does Digit work? You sign up for an account, and link your checking account. Digit will then analyze your income and expenses, find patterns and then find small amounts that it can set aside for you – without any pain for you.
So once you sign up and turn on auto-savings, every 2 or 3 days Digit will transfer some money from your checking to your savings, usually somewhere between $5-$50. Digit won’t overdraft your account, and they have a “no overdraft guarantee that states they’ll pay any overdraft fees if they accidentally overdraft your account.
Open Your Digit Savings Account
Axos Invest Investing Account
Axos Invest launched with the goal of being the world’s first completely free financial advisor. Their founders had a mission “to ensure everyone can achieve their financial goals, which starts with investing as early as possible. This is why there is no minimum to start and we do not charge fees.”
Axos Invest’s founders understood that one of the drags on the typical person’s portfolios is the fees that they’re paying to invest, as well as the friction point of having to invest thousands of dollars to start. They changed that with no minimums to invest, and no fees charged for investing. Axos Invest will be releasing some premium add-on products for their users, which they will charge for, but a basic investing account will not cost anything beyond the mutual fund expense ratios associated with your investments.
What do you invest in with Axos Invest? Axos Invest will invest your funds based on Modern Portfolio Theory (MPT). Your investments will be diversified, low cost and recognize the value of long term passive investing by investing in ETF index funds. Plus, when you sign up now, you’ll get a $20 Signup Bonus!
Open Your Axos Invest Investing Account And Get A $20 Bonus
The Digit + Axos Invest Experiment (D+AI Experiment)
So for my Digit + Axos Invest Experiment, the goal was not only to take these two free products for a spin, but also to show just how easy (and low cost) it can be to invest. There really should be no excuse to not get started.
When I started in early February my goal was to allow Digit to automatically pull money from my checking account and put it into my Digit savings. Whenever the amount in my Digit savings reached $75 I would transfer that money over to my Axos Invest account and invest it in their highly diversified set of ETF index funds.
Why was I doing it this way? I did it this way because Axos Invest has no minimums and you can buy fractional shares, so why not? I can transfer money in small chunks, and engage in a bit of dollar-cost averaging while I’m at it.
So how are things going now that we’re in the 4th quarter?
The Experiment In Progress
After setting up my Digit and Axos Invest accounts I put the plan in action and allowed my Digit account to start saving on my behalf.
Digit started saving small amounts in my account when I first began. $5 here, $15 there. Over time multiple transfers and deposits ended up adding up to larger amounts in my Digit account. My first transfer to my investment account was about $186.
From then on every time the amount reached around $75-$100 or more, I transferred the money to Axos Invest.
Amounts Withdrawn And Invested So Far
I’m now around 8 months into my little experiment, and I’ve withdrawn my Digit savings balance and invested it in my Axos Invest Roth IRA 20 times.
Here are the amounts that I have withdrawn and invested, with the most recent investment first:
$445.41
$173.84
$419.66
$112.68
$155.20
$142.02
$74.36
$79.76
$121.75
$82.03
$95.67
$81.27*
$93.28
$109.47
$76.20
$99.08
$99.32
$90.88
$74.72
$186.00
A total of $2812.60 has been invested in my Roth IRA over these months.
Here’s a screenshot from my Digit account showing my latest $445.41 withdrawal for the purpose of investing.
After withdrawing the money I then transfer it from my checking account over to Axos Invest. Here’s a screenshot from my latest deposit with Axos Invest. The screenshot shows how deposits can be used to purchase fractional shares of the ETF index funds used in the account.
Now that the latest deposit of $445.41 has gone through, I have $2,750.06 invested at Axos Invest, slightly less than the amount deposited since the investments (and the markets) have gone down almost 2.5% since I started.
Here’s my portfolio’s asset allocation in my Axos Invest account. It is a bit more aggressive than in my other retirement accounts.
The funds that Axos Invest currently uses, and their expenses, are shown below (but are subject to change)
Vanguard Total Stock Market ETF (VTI): 0.05%
Vanguard FTSE Developed Markets ETF (VEA): 0.09%
Vanguard FTSE Emerging Markets ETF (VWO): 0.15%
Vanguard Intmdte Tm Govt Bd ETF (VGIT): 0.12%
Vanguard Short-Term Government Bond Index ETF (VGSH): 0.12%
iShares Investment Grade Corporate Bond ETF (LQD): 0.15%
State Street Global Advisors Barclays Short Term High Yield Bond Index ETF (SJNK): 0.40%
iShares Barclays TIPS Bond Fund (ETF) (TIP): 0.20%
Vanguard REIT Index Fund (VNQ): 0.10%
We’ll see what kind of returns my account sees over the coming months/years, but I’m sure it will be close to what the market does. Since I’m not paying any account management fees to invest, I’ll be coming out ahead as compared to some other automated investment advisers.
A Recap Of My Progress So Far
So how is the experiment going 3/4 of the way through the year? In my book it’s been a rousing success. I’ve saved $2812.60 over the 8 month period. If we divide that over 8 months, it means an average saved of about $351.58/month.
Multiply the $351.58 by 12 months and it means that if I continue this experiment for an entire year, I could expect to see somewhere in the neighborhood of $4218 saved for the year.
If you look at that $4218 amount, it’s about three quarters of the annual $5500 contribution limit for a Roth IRA. So essentially, 3/4 of my year’s Roth IRA contributions are happening without me having to actually think about it.
The money is slowly coming out of my accounts – usually in amounts that don’t even really register. The savings amounts tend to be in the $10-50 range, although a few have been $100+. It’s amazing how fast those small amounts really add up!
The Power Of Investing Over Time
Let’s say you were in your 20s and you were to do something similar to what I’m doing with this experiment. You could end up with a pretty nice start to your nest egg over time.
Just setup automated savings and investments, and in my case that $4218 contribution for the year when extrapolated out over 30 years at an average 8% interest, will end up as just over $516,000 over 30 years.
To me that’s the power of long term investing. You can take small savings and investment amounts like this, and make it grow. In the end those small amounts end up adding up to a large lump sum in retirement. That’s pretty powerful. Why not get started now?
Join In The Digit & Axos Invest Experiment
I’ll be maxing out the Roth IRA this year when taking into account my small regular auto-investments with Betterment in addition to the Roth IRA from this experiment. Not too shabby for setting things on auto-pilot, and not even noticing the saving is happening!
Interested in joining the “Digit and Axos Invest Experiment”? I invite you to join in!
Open your accounts here:
After your accounts are open, sit back and wait for the savings to pile up – then invest! Piece of cake! Give it a shot and let us know how it goes!
Would you like to open a checking account, but you’re worried that your bad credit and past banking history might get in the way? With these issues, it can be difficult to open a new bank account.
20 Best Bank Accounts for Bad Credit
Regardless of your banking history, there are numerous banks and credit unions that offer bad credit checking accounts, all with unique features and benefits.
1. Chime
Our Top Pick
No minimum opening deposit or monthly service fee
Over 60,000 fee-free1 ATMs
Get paid up to 2 days early with direct deposit2
No credit check or ChexSystems
With Chime®, a bad credit score is no longer a deal-breaker. They offer an award-winning financial app and debit card with no credit check.
You can open a Chime Checking Account online with no monthly fees. And by that, we mean no overdraft fees, no monthly maintenance fees, no foreign transaction fees, and no minimum balance fees—ever.
Chime also offers a new way to build your credit with the Chime Credit Builder Secured Visa® Credit Card7. It’s a secured credit card with no annual fees, no credit checks, and no interest1 charges.
They offer access to over 60,000 MoneyPass® and Visa® Plus Alliance ATMs. Plus, you can get your paycheck up to 2 days earlier with direct deposit. You can also deposit cash for free at over 8,500 Walgreens.
Chime is definitely the best option on this list.
2. U.S. Bank
$400 sign-up bonus
Monthly service fee can be waived
Over 40,000 fee-free ATMs
$25 minimum opening deposit
U.S. Bank is now offering the Bank Smartly® Checking account, a popular choice that can be applied for online in 26 states throughout the U.S.
If you’re based in any of the following states – AR, AZ, CA, CO, IA, ID, IL, IN, KS, KY, MN, MO, MT, NC, ND, NE, NM, NV, OH, OR, SD, TN, UT, WA, WI, or WY – you’re eligible to apply.
By opening a Bank Smartly® Checking account and a Standard Savings account, and completing qualifying activities, you have the potential to earn up to $400. Subject to certain terms and limitations. Offer valid through June 20, 2023. Member FDIC.
The account itself provides a variety of benefits, including a complimentary debit card that can be locked or unlocked if ever misplaced or stolen. U.S. Bank ATMs offer free transactions, as do over 40,000 MoneyPass Network ATMs.
Although U.S. Bank uses ChexSystems, it’s typically known to be more accommodating with its regulations than many other banks. Unless there’s a history of fraud or any money owed to U.S. Bank, opening a checking account is a possibility.
The checking account requires just a $25 minimum opening deposit, with a monthly service fee of $6.95. The monthly fee can be waived by maintaining a minimum balance of $1,500, or by having a minimum monthly Direct Deposit of $1,000.
3. GO2bank
4.50% APY on savings up to $5,000
No minimum opening deposit
Build credit with no annual fees
Overdraft protection up to $200
GO2bank is a neobank developed by Green Dot, is a neobank developed by Green Dot, a well-established fintech known for its prepaid debit cards and banking services.
The bank offers a checking account with savings subaccounts known as vaults, and the best part is that there is no minimum balance required to open an account online.
The savings account offers an attractive 4.50% APY on savings up to $5,000. Additionally, you can deposit cash at any of the 90,000 retail locations or withdraw funds from any of the 19,000 fee-free ATMs.
You can also use the mobile app’s check deposit feature to deposit checks directly into your checking account.
With direct deposit, you can even receive your pay up to 2 days early or your government benefits up to 4 days early. Opt-in for overdraft protection and be eligible for up to $200 in coverage with eligible direct deposits.
Responsible use of the GO2bank Secured Visa Credit Card can also help you build your credit over time.
If you receive a payroll or government benefits direct deposit in the previous monthly statement period, your monthly fee is waived. Otherwise, it is only $5 per month.
4. Chase
$100 bonus after 10 purchases in 60 days
No credit check or ChexSystems
Over 16,000 fee-free ATMs
$4.95 monthly fee
Chase is one of the most popular banks in the U.S. And now, they offer an account called Chase Secure Banking that doesn’t require a credit check, doesn’t use ChexSystems, and doesn’t charge overdraft fees.
Account holders also get access to over 16,000 ATMs, free online bill pay, and free money orders and cashier’s checks.
With 4,700 locations across the country, this is an excellent option for anyone who prefers having access to physical branches.
Opening a Chase Secure Banking account comes with a $100 cash bonus when you use the card for 10 purchases within 60 days.
Account approval is immediate and you’ll receive your debit card within days. There is a small monthly service fee of $4.95; however, there is no minimum deposit to get started.
5. mph.bank
Earn 4.70% APY on unlimited savings
No minimum balance to open
Get paid up to two days early
Free withdrawals at over 55,000 ATMs
mph.bank, created by Liberty Savings Bank, F.S.B. and a Member FDIC, is a banking option that truly stands out for its unique approach. MPH, which stands for ‘Makes People Happy’, is not just a slogan – it’s a philosophy that permeates every aspect of their banking services.
They offer five different bank accounts, but the standout offering is their Future Account. This account lets you earn an impressive 4.70% APY on your savings, with no minimum balance to open and no maximum balance for the rate.
Alongside this, mph.bank offers a Spend account that allows you to receive your paycheck two days earlier.
Accessing your money is easy with mph.bank, as they are part of the Allpoint network, offering you free access to over 55,000 ATMs.
In addition to these features, mph.bank has a host of financial tools available. From planning for your future to managing your finances on one page, mph.bank ensures that you have the necessary resources at your fingertips.
6. Current
No credit check or ChexSystems
No minimum deposit or maintenance fees
Get paid up to two days faster
Overdraft up to $200 without any overdraft fees
Current is one of the fastest-growing mobile banking solutions in the U.S., with over one million members. However, Current is a financial technology company, not a bank. Most importantly, Current does not use ChexSystems or pull your credit.
Some features of the Current mobile app and debit card include fee-free overdraft protection of up to $100, 40,000 fee-free Allpoint ATMs, and no minimum balance or hidden fees.
You can also get paid up to two days sooner with direct deposit and earn up to 15x points, and get cashback.
7. Walmart MoneyCard
No monthly fee with direct deposits of $500 or more
Earn up to 3% cash back on purchases
Overdraft protection covering up to $200 with eligible direct deposits
2% APY on savings
The Walmart MoneyCard is a prepaid debit card that offers a robust alternative to traditional checking accounts.
This card stands out with its cash back rewards program, offering up to 3% cash back when shopping at Walmart.com, 2% at Walmart fuel stations, and 1% at Walmart stores, up to a total of $75 each year.
Users can also enjoy the peace of mind offered by the overdraft protection feature, covering up to $200 for purchase transactions with opt-in and eligible direct deposits.
The ASAP Direct Deposit feature is another great perk, allowing users to receive their pay up to two days earlier and benefits up to four days earlier.
Additionally, with the Walmart MoneyCard, you can earn a 2% APY on savings and have chances to win cash prizes each month. The monthly fee of $5.94 can be waived with a direct deposit of $500 or more in the previous monthly period.
8. Revolut
No monthly fee
Earn up to 4.25% APY on savings
Cash withdrawals at more than 55,000 ATMs
Commission-free stock trading
Revolut is a financial app that comes with a prepaid debit card from Visa or Mastercard. However, you don’t need to wait for the physical card to get started. You can use the digital card right away on Apple Pay or Google Pay.
The Revolut debit card gets you fee-free access to over 55,000 ATMs, and no cost out-of-network ATM withdrawals up to $1,200 per month. You’ll also get 10 zero-fee international transfers per month.
This account offers cashback, discounts from top brands, a savings account, and more. Plus, your funds are insured by the FDIC for up to $250,000.
* Please note that Revolut is frequently updating its products and features, see the Revolut Terms and Conditions for the latest offerings.
* Revolut is a financial technology company. Banking services provided by Metropolitan Commercial Bank, (Member FDIC).
9. TD Ameritrade
No monthly fee
Unlimited fee refunds for U.S. ATMs
Free TD Bank debit card
Free checks and unlimited check-writing capabilities
TD Ameritrade offers a brokerage account with a comprehensive cash management checking account. As a client, you get unlimited checks. Once you open the brokerage account, you can complete the checking account application online.
A Cash Management account also gives you access to free online bill pay, as well as a free debit card with nationwide rebates on all ATM fees.
In addition, there is no monthly fee if you maintain a $100 minimum daily balance. However, it’s important to note that a TD Ameritrade checking account is not FDIC-insured or bank guaranteed.
10. Albert
No minimum balance
Cash advances up to $250
No maintenance fees
Free ATMs at over 55,000 locations
Albert is an innovative fintech banking platform that presents a powerful alternative to traditional bank accounts.
It sets itself apart with its attractive cashback rewards program attached to its free Mastercard debit card, making it your perfect shopping companion.
Moreover, it offers an around-the-clock personal finance help feature, “Ask a Genius”, ensuring you’re never in the dark about your money matters.
In addition, with Albert, you can have your paycheck up to 2 days early thanks to the direct deposit feature. This takes financial planning to a whole new level by ensuring you’re always ahead.
Albert is also a cost-saving alternative. There are no minimum balance requirements, no monthly maintenance fees, and you enjoy access to more than 55,000 ATMs, fee-free if you’re a Genius subscriber.
Finally, Albert ensures your money’s safety with FDIC protection up to $250,000. This adds an extra layer of security to your funds, allowing you to bank with confidence.
11. SoFi
With the SoFi Checking and Savings account, you won’t have to worry about being charged any overdraft fees, minimum balance fees, or monthly fees.
Plus, it offers free access to ATMs at over 55,000 locations within the Allpoint® Network. Similar to Chime and Current, you can get your paycheck up to two days sooner when you set up direct deposit.
You’ll also get a 1% APY on your checking and savings accounts and up to 15% cash back at local establishments with your SoFi debit card.
12. Navy Federal Credit Union
If you are an active-duty or retired member of the military, including the Armed Forces, National Guard, Coast Guard, or Department of Defense, you may be eligible for Navy Federal Credit Union membership.
NFCU doesn’t utilize ChexSystems or EWS. They also offer a free checking account alternative with no monthly service fees for those with qualifying direct deposits.
Additionally, NFCU offers its members convenient access to over 30,000 ATMs situated at both credit unions and retail locations across the United States and Canada through the CO-OP Network.
13. Aspiration
With the Aspiration Spend & Save account, you get an online checking account and savings account that has the potential to earn up to 5% APY.
Aspiration also offers unlimited cash withdrawals at over 55,000 ATMs. The minimum initial deposit is $10. Deposits are FDIC insured and you can get paid up to two days sooner.
The Aspiration debit card is made from recycled plastic. Deposits are 100% fossil fuel-free. And this online bank even gives you the option to plant a tree with every card swipe.
14. Southwest Financial Federal Credit Union
Southwest Financial presents a reliable banking option that prioritizes the financial wellbeing of its members. With no monthly service fees, it offers a cost-effective solution to managing your everyday finances.
Opening an account is easy and requires no minimum deposit. As a member of Southwest Financial Federal Credit Union, you enjoy the convenience of accessing your funds through a shared network of ATMs.
15. FSNB
FSNB (formerly Fort Sill National Bank) offers a hassle-free Basic Checking account to its customers, with a $5 minimum deposit requirement.
With the Basic Checking account, you need to maintain a minimum daily balance of $75. Otherwise, you’ll be charged a monthly fee of $5.50.
This account comes with a host of convenient features, including a Visa CheckCard that allows you to make purchases and withdraw cash at ATMs worldwide. Additionally, FSNB offers free online banking services, giving you access to your account from the comfort of your home or office.
16. Wells Fargo
Wells Fargo’s Clear Access Banking offers a practical, accessible checking account designed to suit various banking needs. While there is a $5 monthly service fee, this fee is waived for primary account owners aged 13 to 24.
With a minimal opening deposit of just $25, setting up Clear Access Banking is straightforward and affordable. As an account holder, you’ll have the convenience of accessing your funds through Wells Fargo’s extensive network of 13,000 ATMs and 5,300 branches across the country.
17. United Bank
United Bank has locations in Maryland, Ohio, Pennsylvania, Virginia, West Virginia, and Washington, DC. You can open a bank account with a $50 minimum initial deposit. You do not have to maintain a minimum balance and they don’t charge monthly fees.
You can also upgrade to rewards checking, where you earn cashback rewards on debit card purchases. You also get discounts on movies, theme parks, and prescriptions. The monthly service charge is $10, but you can have it waived if you reach 15 purchase transactions monthly or have a minimum of $500 in regular deposits.
18. Huntington National Bank
Huntington has locations in Arizona, Colorado, Illinois, Indiana, Michigan, Minnesota, Ohio, South Dakota, and Wisconsin.
Huntington Bank uses ChexSystems, but you can still qualify for a checking account as long as you don’t owe the bank any money. However, applicants with an EWS record may not qualify.
For Huntington’s basic account, there is no minimum opening deposit and no minimum balance requirement.
19. Varo
Varo is an online-only bank that offers a hassle-free banking experience with no monthly fees. As a Varo customer, you’ll gain access to early direct deposit payments, which means that your funds will typically be available on the same day they’re received.
Varo Bank knows that just because you need second chance banking doesn’t mean you want sub-standard service. The checking account comes with a free Visa debit card, access to over 55,000 Allpoint ATMs, and free paper check mailing.
20. Regions Bank
You’ll need a minimum opening deposit of $50 to open a Simple Checking Account at Regions Bank. This account doesn’t come with too many bells and whistles. However, it’s a suitable option for anyone with bad credit who wants a basic checking account.
Regions Bank will lower your monthly maintenance fee from $8 to $5 if you sign up for online statements. And you’ll have the option to open a savings account through Regions Bank as well.
What is a bank account for bad credit?
A bank account for bad credit is a type of account designed for people with negative banking records. These people are usually turned away from traditional banks and credit unions because of past instances of bounced checks, overdrawn accounts, or unpaid non-sufficient fund fees.
Fortunately, some financial institutions provide bad credit bank accounts that offer basic banking services such as a debit card, online banking access, and check writing privileges. Direct deposit is also available with some of these bank accounts, which makes it easy to access your income sources.
Bad credit checking accounts are typically easy to open, with minimal fees and most importantly, no credit checks or ChexSystems reports.
How do banks evaluate new account applications?
Opening a bank account can be a straightforward process, but it’s not uncommon for applicants to be turned down or offered limited options. That’s because financial institutions have criteria they use to determine who qualifies for a bank account and what type of account they can offer.
One of the most important factors that banks consider when you apply for a new account is your banking history. To assess this, most banks will check your ChexSystems report, which is a database of your past banking transactions. This report includes information such as any unpaid fees or overdrafts, closed accounts due to fraudulent activity, and other negative marks.
If you have a negative history in ChexSystems, such as unpaid fees or a history of overdrafts, it can be more challenging to open a bank account. In some cases, the bank may decline your application altogether or offer you a limited account that doesn’t allow you to write checks or use a debit card.
Another factor that banks make consider is your credit history. Some banks may pull your credit report from the three major credit bureaus Equifax, Experian, and TransUnion, but most don’t.
Your credit report is typically accessed by credit card issuers and lenders to assess your creditworthiness when you apply for loans or credit cards. But for bank accounts, your ChexSystems record is generally more important.
What is ChexSystems?
ChexSystems is a consumer reporting agency that collects user data from banks and credit unions. One of the things this data is used for is to create consumer reports that financial institutions can use to screen customers.
When attempting to open a new bank account, most financial institutions will pull your ChexSystems report. This report will show your past banking history including overdrafts, bad checks, check fraud, negative balances, or excessive withdrawals.
If you’ve had any of these issues in the past five years, it will likely be on your ChexSystems record. Fortunately, there are several reputable banks that don’t use ChexSystems or check credit to qualify customers. There are also numerous banks that offer second chance checking accounts for people with bad credit.
Can you open a bank account with no credit check?
Opening a no-credit-check bank account is easier than ever, with plenty of reliable banking services to choose from. There are two types of bank accounts for bad credit: banks that don’t use ChexSystems and second chance checking accounts.
Banks that Don’t Use ChexSystems
Some banks simply do not use ChexSystems to evaluate new accounts. These banks offer no-credit-check bank accounts for people with bad credit or a negative banking history.
The good news is that these accounts come with the same features as regular bank accounts offered to everyone else. You can expect to have access to online banking, direct deposit, and a debit card.
Second Chance Checking Account
With a second chance bank account, financial institutions may conduct a credit check or refer to ChexSystems, but they’re willing to give you a second chance regardless of your banking history. Second chance bank accounts usually come with a monthly maintenance fee.
The best second chance checking accounts still have some of the same features as ChexSystems banks and credit unions, such as overdraft protection, online banking, and bill pay. Additionally, it should be possible to upgrade to a standard checking account after demonstrating responsible banking habits.
What to Look for in a Bad Credit Checking Account
If you’re struggling with poor credit history, you might be wondering how to find a checking account that meets your needs while also helping you rebuild your financial reputation. Fortunately, there are several banks that offer checking accounts for bad credit. Here are some key factors to consider:
No Credit Checks
The first thing to look for is a bank or credit union that doesn’t look at your credit report or ChexSystems record when opening a checking account.
Many institutions also offer “second chance” or “fresh start” checking accounts designed specifically for individuals with poor credit or past banking issues. These checking accounts provide an opportunity to rebuild your financial standing, and often offer the option to upgrade to a traditional checking account after a certain period of time.
Low or No Minimum Balance Requirement
When you’re trying to rebuild your credit, every dollar counts. Look for a checking account that doesn’t require you to maintain a specified balance. This way, you won’t be charged fees for falling below a certain balance threshold. This will help you keep more money in your pocket and avoid unnecessary expenses.
Reasonable Account Fees
It’s important to be aware of the fees associated with checking accounts, especially if you have bad credit. Be sure to compare the monthly maintenance fees, overdraft fees, and any other charges associated with the account.
Many online banks offer checking accounts with no monthly fees or waive them if certain conditions are met, such as maintaining a minimum account balance or setting up direct deposit.
Online and Mobile Banking Features
In today’s digital age, having access to online and mobile banking is essential. Look for a checking account that offers a user-friendly mobile app and website, enabling you to manage your money on-the-go. These features should include the ability to check your balance, transfer money, pay bills, and deposit checks remotely.
Account Alerts and Notifications
Opt for a checking account that offers customizable account alerts and notifications. These can help you stay on top of your account activity, track your spending habits, and avoid a potential overdraft fee. You can typically set up alerts for low balance, large transactions, or unusual activity.
Overdraft Protection
Overdraft fees can be a significant burden, especially for people with bad credit. Look for a checking account that offers overdraft protection, which can help you avoid costly overdraft fees. Some banks may offer linked accounts, lines of credit, or small-dollar loans to cover overdrafts.
FDIC or NCUA insurance
Ensure that your checking account is insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). This insurance protects your cash deposits up to $250,000 per account holder in case the bank or credit union fails.
Opportunities for Financial Education
Finally, look for a financial institution that offers resources and tools to help you improve your financial literacy. This might include budgeting tools, educational articles, or workshops. The more you understand about managing your money, the better your chances of rebuilding your credit and maintaining a healthy financial future.
Bottom Line
Having poor credit doesn’t mean you can’t get a bank account. But, it does mean that your selection will be somewhat limited. We also show you how to clear your name and remove yourself from ChexSystems so that you can get a bank account anywhere.
It may take some time to get your name removed. Meanwhile, some of the banks we’ve listed above are just as good, if not better, than any account on the market right now. So, it’s a good idea to start with one of those.
Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank N.A. or Stride Bank, N.A.; Members FDIC. Credit Builder card issued by Stride Bank, N.A.
1. Out-of-network ATM withdrawal fees may apply with Chime except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.
2. Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. Chime generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.
7. To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.
In the past 5 years there have been a plethora of startups popping up that offer an easy way to invest for the smaller investor.
As I was doing some research to find my top 5 companies to invest with I found a company that will allow you to invest with as little as $5. That company is called Stash Invest.
Stash not only lets you invest with small amounts and buy fractional shares, but also gives you a variety of interesting portfolios and investments that you can purchase. In fact, Stash offers more choices than many investment companies.
Here’s a review of Stash Invest, and a look at how they can help you to jump start your retirement savings.
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Stash Invest Background
Stash was founded by Brandon Krieg and Ed Robinson as a place for first time investors to invest in a diversified portfolio, without having to have a big bankroll. After receiving all of the regulatory approvals, they launched the iOS app in October 2015. Here are the details from Wikipedia:
Stash was founded in February 2015 by Brandon Krieg and Ed Robinson. Krieg and Robinson had previously worked together at Macquarie Group, an investment banking firm. Stash was launched as an iOS app in October 2015, and was made available on Android in March 2016. Within a year of its launch, Stash had signed up 215,000 users. As of January of 2019 Stash has $530M+ in assets under management. Through January 2019, the app had approximately 3 million users.
So they’re pretty new to the scene having launched in October of 2015, but have quickly added almost 4 million users as of 2019.
Co-founder Brandon Krieg explains the idea behind the company on the company’s about page:
“My co-founder Ed and I left our jobs to start Stash because we believe everyone should have access to financial opportunity. After a combined 30+ years in the business, we saw that Wall Street can be fundamentally unfair to smaller investors as they work to accomplish their goals. Stash will change that. “
Stash should be a pretty attractive option for newer investors, so let’s see what they have to offer.
How Does Stash Work?
Stash is a micro-investing and banking app that is mainly utilized via a mobile phone app for iOS or Android. You can start investing with as little as $5.
Anyone can open an account, you just have to be 18 years old, and live in the United States.
Opening an account with Stash should only take a few minutes, and if you do it now they currently have a bonus offer. You’ll get a $5 account bonus for signing up, which is enough to start investing.
Sign Up For Stash Here – Get A $5 Bonus
To get started, you will need to answer a series of questions and provide your Social Security number, and then link an external bank account.
Based on your level of acceptable risk (conservative, moderate or aggressive) you’ll be given recommendations for portfolios.
Stash Investment Portfolios
Stash’s investments are mainly ETF index funds and they have 250+ETFs and stocks in pre-built investments that you can use to build your portfolio.
When you first open your account, the app will recommend a mix of diversified stocks that suits your level of risk.
In addition to their main 3 portfolios, there are an abundance of other investment options including funds focusing on large blue chip companies, small companies, environmentally friendly investments, technology, health care, banking, entertainment and more.
They talk about “investing in things you believe in”, and if that’s something you’re interested in doing, there are plenty of niche focused investments to partake in.
You can invest in just about anything your heart desires with Stash, just be cognizant of what the “risk level” is for each fund, and what the fund management fees are for the individual ETF funds you’re choosing as they can range from very low cost, to less so.
Stash Online Banking
Stash has an optional online banking account and Visa debit card that you can sign up for with your account. 1.
Some of the features of the account include:
Early payday (Get paid up to 2 days early)
No overdraft fees.
No monthly maintenance fees.
No minimum balance fees.
Access to thousands of fee-free ATMs.
Stock-Back® Rewards for everyday spending.
Setup automatic transfers to keep the account funded.
This account is included in the regular monthly fee, and doesn’t have additional fees.
Stash Stock-Back® Rewards
Stash introduced a cool feature a while back that they call “Stash Stock-Back® Rewards” 2. It’s a rewards program of sorts that works in conjunction with your Stash debit card and your online banking. Instead of getting cash back, however, you’re getting fractional shares of stock where eligible.
Here’s how it works. Make a purchase with your Stash Visa at any of 11 million businesses nationwide, and you’ll get rewards for that purchase in the form of a fractional share of stock for that company (or for a diversified ETF index fund if that company isn’t available).
For example, if you buy something on Amazon with your Stash debit card, you’ll earn AMZN Stock-Back® as a reward.
As soon as you make a purchase using your Stash debit card, you should get a notification of the stock that you’ve earned. You’ll earn 0.125% Stock-Back® rewards on everyday purchases, and up to $5 Stock-Back® rewards at certain merchants. The stock will be added to your taxable brokerage account within your app. 3
Other Features of Stash
Here are some other important features and functionality of the app that are important to know about.
Stash Retire: Stash recently has moved into the retirement investing space and they now offer Traditional and Roth IRA accounts.4 Those accounts have a minimum of $15 to invest.
Smart-Save: Smart-Save functionality studies your spending and income patterns to figure out when you have cash to spare. Then it automatically saves small amounts of extra cash into your Stash account. There, it earns interest, or can be invested.
ASAP Direct Deposit: Get paid up to 2 days early.5
Automated investments: Set up a regular deposit and fund your account on an automated basis.
Fractional shares: You can buy fractional shares – buying a small fractional share of a single stock.
Educational materials: They have a decent array of educational materials available for newer investors in both the app, via email, and on their website.
Tools to forecast: The app has a tool to see the impact your saving and investing might have over time. It gives you insight into how your positive choices are impacting your future.
Security: Stash’s app uses 256-bit bank grade encryption to secure your personal information. Information sent between the app and their servers use SSL encryption, and they don’t store you your bank long information.
SIPC Coverage: Your investments in your account are covered by Securities Investor Protection Corporation (SIPC) through the clearing agency used by Stash, Apex Clearing Corp. The limit of SIPC protection at any brokerage is $500,000, which includes a $250,000 limit for cash.
Stash Service Fees And Minimums
Where the rubber meets the road is just how much you’ll be paying to use Stash. What are the fees and minimums for using the service?
First of all, there is a $5 minimum in order to have an account, and you only need $5 to invest.6 So the service is accessible to just about everyone, especially if you get the $5 bonus mentioned above.
Low Monthly Fees
The service offers three monthly subscription plans. There is the Stash Beginner account for $1/month7 that includes a personal investment account, debit Visa card account access, Stock-Back® rewards program that helps you to earn stock for your normal spending, and free financial education.
The $3/month7 Growth subscription will give you everything in the basic account, but also includes access to retirement accounts.
The $9/month7 plan gives you everything in the above plans but adds in the option of custodial accounts where you can start investing for 2 kids, a metal debit card that also gives you 2x earnings on Stock-Back® rewards, as well as monthly market insights reports.
While $1/month isn’t really that much, the one caveat is that if you have a low balance account and you’re paying $1/month for the service, that fee could be a relatively large percentage of your assets in comparison to some other services. It might be something to consider. Stash becomes more cost effective in my opinion once your account reaches a higher dollar value, and at that point it’s very comparable to other investment sites like Betterment, Wealthfront and others.
Automated Investing With A Low Barrier To Entry
If you’re a newer investor and you don’t have a lot of money to start investing, Stash might be worth your time to get your feet wet. They have a low initial deposit of $5, and from there you can use dollar cost averaging to build your portfolio bit by bit. You can even start a Roth IRA or Traditional IRA and invest for retirement with Stash Growth.
Stash has a wide variety of investment options, and if you’re looking to hold a diversified portfolio, their basic mix portfolios can give you what you’re looking for.
While the fees aren’t the lowest, once the account grows to a reasonable level the fees are very comparable to other players in the space.
Try Stash for free with the currently available $5 account bonus!
Sign Up For Stash Invest Today!
1 Debit Account Services provided by and Stash Visa Debit Card issued by Green Dot Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc. Investment products and services provided by Stash Investments LLC, not Green Dot Bank, and are Not FDIC Insured, Not Bank Guaranteed, and May Lose Value. In order for a user to be eligible for a Stash debit account, they must also have opened a taxable brokerage account on Stash. Account opening of the debit account is subject to Green Dot Bank approval.
2 Stash Stock-Back® is not sponsored or endorsed by Green Dot Bank, Green Dot Corporation, Visa U.S.A., or any of their respective affiliates, and none of the foregoing has any responsibility to fulfill any stock rewards earned through this program.
3 You’ll also bear the standard fees and expenses reflected in the pricing of the ETFs in your account, plus fees for various ancillary services charged by Stash and the custodian.
4 Stash does not monitor whether a customer is eligible for a particular type of IRA, or a tax deduction, or if a reduced contribution limit applies to a customer. These are based on a customer’s individual circumstances. You should consult with a tax advisor.
5 Early access to your direct deposit depends on deposit verification and when Green Dot Bank gets notice from your employer, and may vary from pay period to pay period.
6 Other fees apply to the debit account. Please see Deposit Account Agreement for details.
7 You’ll also bear the standard fees and expenses reflected in the pricing of the ETFs in your account, plus fees for various ancillary services charged by Stash and the custodian.
Bible Money Matters is a paid Affiliate/partner of Stash. Investment advisory services offered by Stash Investments LLC, an SEC-registered investment adviser.
It’s tough out there for first-time homebuyers. They’re facing multiple challenges, including rising mortgage rates, high home prices and limited inventory. However, that doesn’t seem to scare off young Americans — in fact, 71.5% of Gen Zers plan to buy their first home in the next one to six years, according to a Rocket Mortgage survey from earlier this year.
At the same time, not every Gen Zer knows what mortgage lenders are looking at when evaluating a home loan application. On average, 33.9% of Gen-Z were wrong about the factors lenders consider when deciding whether to approve a mortgage, according to the survey.
What most mortgage lenders look at when considering your application
CNBC Select explains what factors influence mortgage approval and what young people can do to increase their chances of qualifying for a home loan.
Credit score
Most Gen Zers know that their credit score can impact their ability to secure a mortgage (73.2%). And while they’ve had less time to establish a credit history, Gen Zers have an average FICO score of 679 according to the latest data from Experian. That’s lower than that of older generations but still considered good.
The minimum credit score to qualify for a conventional mortgage is 620. Government-backed mortgages have more relaxed credit requirements. The minimum credit score for an FHA loan is 580 with a down payment of 3.5% or as low as 500 if you can put at least 10% down. USDA and VA loans don’t have set credit requirements, but lenders that offer them might.
Besides approval chances, a homebuyer’s credit affects the interest rate on the loan. A small difference in interest rates can add hundreds of dollars to a monthly mortgage payment.
It’s best to work on building credit before applying for a mortgage. Free credit monitoring services such as CreditWise® from Capital One and Experian free credit monitoring can be helpful in tracking progress and finding opportunities to improve.
CreditWise® from Capital One
Information about CreditWise has been collected independently by Select and has not been reviewed or provided by Capital One prior to publication.
Cost
Credit bureaus monitored
TransUnion and Experian
Credit scoring model used
VantageScore
Dark web scan
Identity insurance
Terms apply.
Experian Dark Web Scan + Credit Monitoring
On Experian’s secure site
Cost
Credit bureaus monitored
Credit scoring model used
Dark web scan
Yes, one-time only
Identity insurance
Terms apply.
Note that the scores credit monitoring services offer differ slightly from the scores mortgage lenders use when making their decisions. That said, they should be pretty close and provide a good idea of your overall credit health.
Debt-to-income ratio (DTI)
Almost one-third of Gen-Z didn’t name the debt-to-income ratio (DTI) as one of the factors affecting mortgage approval (32.8%). In reality, lenders evaluate this closely when determining whether to approve a mortgage and what the terms of the loan will be.
DTI is the amount of debt relative to income. To qualify for a conventional mortgage, you don’t want a DTI any higher than 43%. For USDA and VA loans, the DTI limit is typically 41%, while the FHA might allow you to go up to 50%. Remember, these are guidelines — it’s up to individual lenders to determine the cutoff for what’s an acceptable number.
Calculating your DTI
To calculate your DTI, divide your total monthly bills, such as rent and any debt payments, by your gross monthly income (how much you make before taxes).
For example, let’s say your monthly bills total $2,500 and your gross monthly earnings are $5,000.
$2,500 / $5,000 = 0.5
Multiply the result by 100 to get the percentage. In this case, your DTI would be 50%.
Down payment
When a homebuyer makes a sizeable down payment, the lender may consider them a less risky borrower. Having more money to put down increases the chance of mortgage approval and can lower the monthly mortgage payment.
According to the survey, 10.1% of Gen-Z plan to put down 20% of their home price. If they do, they’ll start off with a good amount of equity in their home and won’t have to worry about private mortgage insurance (PMI). PMI is a monthly fee rolled into the mortgage payment, designed to protect the lender if the borrower can’t pay their home loan.
That said, it’s possible to secure a mortgage without a 20% down payment. In fact, FHA loans require as little as 3.5% down with a credit score of at least 580. Qualified first-time homebuyers can also put 3% down with conventional mortgages, such as HomeReady and Home Possible. USDA and VA loans have no down payment requirement at all.
Saving up for a down payment can take some time — often, several years. Putting the funds in a high-yield savings account can help them grow a little faster. Some of CNBC Select’s favorite accounts include LendingClub High-Yield Savings and the Western Alliance Bank Savings Account for their high APYs and ease of use.
LendingClub High-Yield Savings
LendingClub Bank, N.A., Member FDIC
Annual Percentage Yield (APY)
Minimum balance
No minimum balance requirement after $100.00 to open the account
Monthly fee
Maximum transactions
Excessive transactions fee
Overdraft fees
Offer checking account?
Offer ATM card?
Western Alliance Bank Savings Account
Western Alliance Bank is a Member FDIC.
Annual Percentage Yield (APY)
Minimum balance
$1 minimum deposit
Monthly fee
Maximum transactions
Up to 6 transactions each month
Excessive transactions fee
The bank may charge fees for non-sufficient funds
Overdraft fee
The bank may charge fees for overdrafts
Offer checking account?
Offer ATM card?
Terms apply.
Employment
Current employment, as well as work history, are also factors in mortgage lending decisions. It’s not uncommon for a lender to require two years of consistent employment history. Note that it doesn’t necessarily mean working for the same company. More likely, the lender will be looking to see whether the borrower has been employed in the same line of work or career field and if there are any lengthy gaps without a job.
Showing this kind of consistency can be tricky for Gen Zers who have only just started building their careers. However, as long as the homebuyer can prove they have a stable income and are a responsible borrower, the lack of two years of work history might be something a lender can live with.
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How Gen-Z can prepare for a mortgage application
While mortgage lenders generally examine the same things when evaluating an application, they might not always agree on what’s an acceptable risk. Individual lenders also may offer different types of home loans, work with different down payment assistance programs or even have their own unique offers for first-time homebuyers.
For that reason, it’s wise to speak to several lenders before choosing one. Plus, this will also allow for interest rate shopping, which is essential to securing the best possible mortgage terms.
CNBC Select picked PNC Bank as one of the best lenders for first-time homebuyers, thanks to the variety of home loan options they can offer. Rocket Mortgage can be a good choice for borrowers with lower credit scores, and Ally Bank Mortgage can help new homebuyers save on lender fees.
PNC Bank
Annual Percentage Rate (APR)
Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
Types of loans
Conventional loans, FHA loans, VA loans, USDA loans, jumbo loans, HELOCs, Community Loan and Medical Professional Loan
Terms
10 – 30 years
Credit needed
Minimum down payment
0% if moving forward with a USDA loan
Terms apply.
Ally Bank Mortgage
Annual Percentage Rate (APR)
Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
Types of loans
Conventional loans, HomeReady loan and Jumbo loans
Terms
15 – 30 years
Credit needed
Minimum down payment
3% if moving forward with a HomeReady loan
Terms apply.
Bottom line
Gen-Z are entering a challenging housing market, but many feel up for the task and plan to buy a home in the next few years. Homeownership can be an excellent way to build wealth, but before springing into action, it’s a good idea to educate yourself on what impacts mortgage lending decisions and get your financial ducks in order based on what you’ve learned.
Catch up on CNBC Select’s in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and Twitter to stay up to date
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
By Peter Anderson12 Comments – The content of this website often contains affiliate links and I may be compensated if you buy through those links (at no cost to you!). Learn more about how we make money. Last edited August 19, 2022.
The last few years have been tough ones, with the economy going through recession, millions of people becoming unemployed and businesses going under left and right.
The economy has shown some signs of improving, but indications are we still have a lot of rough road ahead of us.
With the economy being so unsure, now is as good a time as any to start thinking about how to cut back on your regular monthly bills. For many, once you’ve cut out some of the more obvious expenditures, it doesn’t feel like there are that many other places that can be cut. The truth is, however, that most people have a lot of places that they can still cut back and save money.
Today I thought I’d look at some of the main areas of spending that people have every month – their regular monthly bills.
Often people take those monthly bills for granted, not even thinking about how they can save money on those regular expenditures, just taking it on faith that they can’t get those bills any lower.
So today’s post is all about how to save money on just about all of your regular monthly bills.
How To Save On Your Phone And Wireless Bills
There are a variety of ways that you can save on your cell phone, home phone and mobile internet charges. Here are a couple of the options that we’re using – or plan to start using in the coming year to save on our phone bills.
Landline phone service
: For years we’ve had a landline because my wife prefers talking on that versus a cell phone, and also because we needed the landline for our home security system. We recently made changes that mean we can now opt for a cheaper VOIP option for our landline service. After doing some research a lot of other bloggers are talking about the Ooma phone service, which is apparently very good. All you have to do is pay upfront to buy an Ooma Telo device for around $140, which then allows you to make unlimited calls in the U.S. for free over your existing broadband connection! All you have to pay is local taxes in your area (about $4.50 for us). You can port your current landline phone number over as well, for a $39.99 fee. Read my full review of Ooma here, and my post talking about setting Ooma up here.
Prepaid Cell Phones: One way that we’ve been saving a ton of money over the years is by using prepaid cell phone service, instead of more costly contract plans. We have no contract phone service from Republic Wireless, and we pay on average about $40/month for two phones. Both of them are Android smartphones with tons of minutes and unlimited text with 1GB/data ($20/month). The only downside is the up front cost of the cell phone – it isn’t subsidized like on contract plans. There are a variety of other low cost prepaid cell services out there that many people recommend including Tello and a Gen Mobile. Check out the related content below for a full article talking about saving on your cell phone bill using prepaid services. Want to use a traditional phone service? Check out Bill Shark, BillFixers or Rocket Money to negotiate a reduction in your monthly cell phone bills.
Low Cost Hotspots: A while ago I had a need to have Internet access on the go while traveling. At the time I settled on buying a mobile hotspot from Virgin Mobile via their prepaid wireless broadband plan. You just buy the hotspot, and then pay $35/month for 1GB of data. I was in a rush so I bought the hotspot and used it while on my trip. When I got back I became aware that there are quite a few companies that offer mobile hotspots for much lower cost, or phones and phone plans that can be used as hotspots – for much less. Do your research.
Related Content
How To Save On Your Housing Costs
One place that you can save hundreds of dollars every month is in your housing costs. Most people are aware that they could probably save by refinancing, but there are other ways you can save as well.
Refinance your mortgage: The most obvious way to save on your housing costs is simply to refinance your home mortgage. Rates are so low right now, and by refinancing you can often save hundreds of dollars off of your regular monthly payment. I’m in the middle of looking for a refinance right now, and we stand to save in the neighborhood of $200-300/month.
Appeal your property taxes: A lot of people don’t realize that you can actually appeal your property taxes in many counties by appealing the county’s tax appraisal value. I have successfully appealed our value once a couple of years ago, saving $363/year. Find out how I did it below via the related content.
Get cheaper homeowner’s insurance: I go into this more in the insurance section below, but if you shop around you can often find hundreds in savings every year just by switching insurance companies. We saved almost $1000/year by doing this just a couple of months ago.
Remove mortgage insurance: If you’re paying mortgage insurance with your regular monthly payment, and you have already reached 20% equity in your home, you may want to look into having that insurance removed by your mortgage company. It isn’t there to protect you, but the bank. Often you can have it removed after getting 20% equity in the house, and in many cases it may be required that they remove it. In some cases, if you’re a high risk borrower or if you have a FHA loan, you may need to keep the mortgage insurance longer.
Downsize your house: If you’re really trying to lower your bills a sure fire way is to downsize your house. Not only will your payment go down, but your insurance, taxes, maintenance costs and other costs will go down as well. Of course any costs associated with moving also need to be taken into account.
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How To Save On TV, Movies And Entertainment
There are a lot of ways that you can cut costs when it comes to your entertainment dollar.
Shop around and sign up for deals on premium TV: First, if you’re determined to keep your premium TV because of sports or programming only available on cable, you can at least make sure that you get the best possible deal on your cable TV package. Make sure to shop around once your introductory deal runs out and you can usually end up saving hundreds every year by switching companies! Or you can use a bill negotiation service like Bill Shark, BillFixers or Rocket Money to negotiate a reduction in your monthly bills.
Cancel un-needed services: Another thing you can do is check to make sure you’re not doubling up on any services. When we were cutting back a while ago we realized that we were paying for both Netflix streaming and Amazon Prime – which has a good video streaming option. We realized most of the same TV shows and movies were available on both sources, so we canceled Netflix – saving us $7.99/month.
Cut the cord: If you’re a bit more ambitious and aren’t very particular about receiving certain channels or waiting to see content the night it airs, you might want to make this the year that you cut the cord. Cancel your cable or satellite TV packages and move to something more affordable. Instead of paying for a TV package you can use free or low cost video streaming services like Hulu or Philo, shows streamed by the networks, and more. Use a software like Playon to stream the shows directly to your TV using an existing gaming console like the Xbox One or Playstation 4, or a cheap device like the Fire TV or Roku. The options are pretty numerous, and we’ve used options like this in the past to get most of our TV entertainment. Check out the related content below for a couple of exhaustive posts on how to set this up.
Use cheap movie rental alternatives: Don’t really watch TV or movies too much – and a monthly Netflix or Amazon subscription doesn’t make sense for you? Use a cheap rental alternative like Redbox, where you can rent a new release movie for a dollar. You can often find coupon codes to get free rentals every now and then. If you rent infrequently enough for it to matter, use cheap pay per view video options on Itunes, Amazon and Xbox to rent movies without leaving the comfort of your home. Amazon often gives away free credits on social media for their MP3 and Video stores, so follow them on Twitter and Facebook to get deals!
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How To Save On Your Internet Costs
If you’re looking to save on your internet costs, the best thing you can do, similar as with TV deals, is to shop around, or use a bill negotiation company.
Search for the best deal: Find out where you can get the best deal. For us our internet options include DSL service from a couple of different companies and cable internet. You can usually find competing deals and introductory offers that you can use to hop from company to company and always have the best deal. Other times you can bundle with other services and save. It can be a pain, but it can save you a ton of money too.
Get reduced rate internet: Another thing you can do if you live in certain areas is us a free 4G internet service. Of course to do this you’d have to live in an area with good 4G coverage.
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How To Save On Insurance
The best way to save on your insurance costs is just to shop around on a regular basis. I like to do it at least every 1-2 years for my homeowner’s insurance, auto insurance, life insurance and less often for other types. We found our best deal by using an insurance broker because they were able to compare rates at multiple companies and compare quotes for us.
Within the past few weeks we shopped around for new homeowner’s insurance after the premium skyrocketed. We ended up saving almost $1000/year when we switched our homeowner’s and auto insurance to a new company. That’s not the first time we’ve been able to do that! We did the same thing about 4 years ago, comparing rates and saving over $1000 that time!
Not sure where to start in getting quotes? Check out our insurance page to get quotes from a bunch of different companies.
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Save By Getting A Better Bank Account
You may have had your old bricks and mortar checking or savings account since you were in high school, but have been noticing lately that they’ve started charging you fees for various things. You’ve also noticed that the fees for your brokerage account have gone up, and mysterious inactivity fees started popping up. Whatever the case, people often find that their bank account is no longer useful to them, and that they can save money on fees (or make more interest) by moving somewhere else.
Save money by closing old accounts: Often old accounts start charging inactivity fees for dormant accounts, or just start charging fees because they think they can get away with it. Closing an account can be a pain, but it can also save you money (and headaches) in the long run.
Sign up for better bank accounts: Signing up for a better bank account will mean not only savings because of no fees and no minimums, but also can mean you’ll end up making more money interest, cash back and other perks. For example, a while back we Chime a great online bank. We’ve saved quite a bit in account fees that we no longer pay. Our old account at a traditional bricks and mortar was charging us fees for all sorts of things, and customer service wasn’t great. We have also switched our savings account to online banks with accounts from Capital One 360 and CIT Bank Not only are we making more in interest, but the features available at those banks surpass our old bank.
Lower interest on your credit card accounts: If the interest on your credit card is getting unreasonably high, consider closing the account after signing up for a card with a lower interest rate, 0% balance transfer and no fees. Just be wary of big charges to actually transfer balances.
Different account types to consider closing if the fees or features aren’t up to snuff? Savings accounts, checking accounts, brokerage accounts, mutual fund company accounts, credit cards. Go down the list and figure out which ones just aren’t cutting it anymore.
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How To Save On Energy Bills
Saving on energy bills often can’t be done by switching to another provider because there is often only one option for water, gas or electricity in many areas. That means the savings usually has to come from being creative and saving in other ways.
Some ways to save on your energy bills:
Get a programmable thermostat
: A good portion of your utility bills every month are going to come from your heating and cooling bills. By buying a programmable thermostat like the smart Nest thermostat, you can have your heat turned down at night, turned low when you’re gone and even control it remotely. They advertise an annual savings average of $173, so it may take about 18 months to pay back the $249 cost – unless you can find it for less. Other options include regular programmable thermostats which can run $50-70 or more.
Get (slightly) out of your comfort zone: Be willing to turn the temp down slightly in the winter, and up in the summer. You can save a ton of money just by turning the temp up or down even a few degrees!
Use a power saving device: A lot of the electronic devices we use these days have phantom power drain even when you’re not using them. Get around this by getting an auto-sensing power strip that will turn off all power when the unit is off, or energy saving power plugs that have on off switches for things like coffeemakers or toasters.
Save at your water heater: The water heater can account for 14-25% of your energy bills every year. Often the heat on your water heater is turned up higher than you need it to be. A temp of 120-140 degrees is hot enough, and every 10 degrees you lower it you’ll save 3-5% on your bill. Some experts say not to go below 120 degrees, however, because bacteria can grow in the tank. You can also save by putting a fiberglass insulating blanket on the water heater to save money on heat loss.
Get a home energy audit to find energy leaks: Local utilities will often come out to do a home energy audit free of charge or a small fee to help you find where your home is leaking energy. Plug up the leaks and save!
Maintain your appliances: Doing things like cleaning your AC condensor coils or changing furnace filters regularly can save you money on your energy. If you don’t, appliances can work harder than they need to, and drain more energy.
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Save On Bills By Negotiating Them
One way you can save money on your regular, recurring monthly bills is to negotiate them.
If you have the time to do a little research, and make a few phone calls you can often reduce your monthly bills by hundreds of dollars every year.
If you don’t have the time, there are quite a few companies that will do it for you, for a small cost.
Conclusion
So there you have it, how to save money on just about all your possible monthly bills. I could probably go on, but the point is there are no shortage of ways to save money on your regular monthly expenditures. You can save on your housing costs, your phone and wireless broadband costs, your insurance costs, your energy costs, your bank accounts and even on your spending on entertainment. You just have to be creative, find cheaper alternatives and cancel un-needed services.
So what ways to save on your regular monthly bills can you suggest? Tell us your money-saving strategies in the comments!
Disclaimer: Bible Money Matters has entered into a referral and advertising arrangement with Wealthsimple US, LTD and receives compensation when you open an account or for certain qualifying activity which may include clicking links. You will not be charged a fee for this referral and Wealthsimple and Bible Money Matters are not related entities. It is a requirement to disclose that we earn these fees and also provide you with the latest Wealthsimple ADV brochure so you can learn more about them before opening an account.
In the past couple of years I’ve written about quite a few investing startups that offer easy ways to invest that take the human component out of the equation.
They’re typically simple enough for anyone to understand, low cost and try to capture market returns via low cost ETF index funds. Many people call them robo-advisors.
As I was researching some of the best robo-advisors I came across one that had previously only been available in Canada, Wealthsimple. As of earlier this year they have now crossed the border, and are now available to U.S. users (You can also get up to a $10,000 managed for free as a reader of Bible Money Matters).
Wealthsimple is a hot company, and there is a lot to like about this newer online investment manager.
Today I thought I would take a close look at this automated investment advisor in this Wealthsimple review. How does Wealthsimple work? How do they invest your money? What are the pros/cons of their service?
Wealthsimple Background
Wealthsimple was founded in September of 2014 in Toronto, Ontario Canada. Shortly thereafter it acquired ShareOwner Investments, the country’s first robo-advisor.
Wealthsimple Financial Inc. is an online investment management service focused on making “investing easier for millennials.” The firm was founded in September 2014 by Michael Katchen and is based in Toronto. As of August 2019, the firm had over C$5,000,000,000 in assets under management.
Wealthsimple has over $5 billion Canadian dollars in assets under management ($3.75 million U.S.) and over 175,000 clients as of August 2019. They’re growing at a decent rate, and with the jump to the U.S. market in January 2017, that can only accelerate.
The company has garnered several awards in it’s first few years including:
Fintech 100 – Top 100 Global Financial Technology Companies
2017 Webby Winner – Best Financial Services/Banking Website.
2016 Webby Winner – Best Financial Services/Banking Website.
2016 – Fintech Five – Hottest and most promising financial technology companies.
2015 Product Hunt Toronto – Product of the Year Award.
How Does Wealthsimple Work?
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Wealthsimple was founded on the idea of simplifying and automating investing in order to give newer and experienced investors alike a diversified long term portfolio, without any hassle.
How do they do that? They create diversified stock and bond portfolios that are typically made up of ETF index funds. The funds are low cost and diversify your holdings across different sectors of the global economy to increase your gains, and lower your risk.
When you sign up you’ll be given a personalized portfolio, based on your answers to a survey at the beginning of the process. It will be tailored to your personal level of acceptable risk, be automatically re-balanced (so that your investments stay in line with your goals) and dividends will automatically be reinvested.
In short, it’s a simplified, low cost and automatic investment portfolio that can help you to reach your long term goals.
Opening A Wealthsimple Account (Get Up To $10,000 Managed Free!)
Opening an investing account with Wealthsimple is easy, and users in the USA, Canada and UK are eligible.
To get started, and to get your sign-up bonus, just go through this process:
Go to Wealthsimple.com via this link. (Our link gives you up to a $10,000 managed for free as a bonus.)
Start the online application: From the landing page click “Claim your bonus” and follow the prompts.
Enter basic details: Enter some basic personal information, answer a few questions about your previous investment experience and e-sign one or more Investment Management Agreements.
Bank verification:Verify your banking information via one of the approved methods.
DONE!
No need to worry about providing your banking details as Wealthsimple is fully secure, using 128 bit encryption. They’re also SIPC insured up to $500,000.
After you verify your banking information, your Wealthsimple account should be up and running within 5 business days, according to their FAQ.
Wealthsimple Basic Vs. Wealthsimple Black
When you’re opening your account and making your initial deposits, one thing you may want to consider is just how much your initial deposit is. With a deposit of less than $100,000 you’ll be signed up for a Wealthsimple Basic account, which gives you everything you need to invest in a diversified portfolio, at an annual fee of 0.5%. Signing up for the Basic account will give you a $50 bonus through our link.
If you deposit more than $100,000 in your account you’ll be upgraded to a Wealthsimple Black account, which means you’ll have a lower annual fee of 0.4%, along with the following benefits:
Financial planning with a Wealthsimple advisor
Access to tax-efficiency benefits like tax-loss harvesting and tax efficient funds.
VIP Priority Pass access for you and a guest to more than 1,000 airline lounges in over 400 cities.
If you already have a large amount to transfer in, the added benefits of Wealthsimple Black are nice to have, and in many cases puts Wealthsimple ahead of the competition. In addition to the $50 bonus for opening a new Wealthsimple account, you’ll get an additional $50 bonus if you deposit over $100,000 and open a Wealthsimple Black account.
Wealthsimple Investment Portfolios
The Wealthsimple portfolios mainly invest in diversified ETF index funds and are based on Nobel Prize winning ideas behind Modern Portfolio Theory. Here’s how they explain it:
Our approach is based on Modern Portfolio Theory, introduced by the Nobel Prize-winning economist Harry Markowitz, who proved you can minimize volatility (risk) and maximize reward (money!) by diversifying your investments. We invest your money across thousands of companies using Exchange Traded Funds (ETFs) that track different sectors of the global economy. This way, you bet on bigger slices of the economy while taking advantage of market diversification, without being impacted by the growth or loss of one company. In a few easy steps, we’ll determine the right mix of investments you should have based on your personal goals. We also designed a socially-responsible portfolio that prioritizes low carbon emissions, advances cleantech innovation, and promotes sustainable growth in emerging markets.
So their portfolios are based on a proven investment strategy, and are designed to maximize reward while minimizing risk. It’s a strategy similar to the ones used by other robo-advisors, although the details are a bit different.
Available Portfolios
When signing up there are 3 main portfolios that you can choose from:
Conservative: 65% Stocks, 35% Bonds
Balanced: 50% Stocks, 50% Bonds
Growth: 80% Stocks, 20% Bonds
As of 2017, the following low cost investments are in the portfolios:
Vanguard US Total Stock Market ETF (VTI)
Vanguard Mid-Cap Value ETF (VOE)
Vanguard Small-Cap Value ETF (VBR)
Vanguard FTSE Europe ETF (VGK)
WisdomTree Japan Hedged Equity Fund (DXJ)
Vanguard FTSE Emerging Markets ETF (VWO)
iShares National Muni Bond ETF (MUB)
iShares TIPS Bond (TIP)
Vanguard Total Bond Market ETF (BND)
VanEck Vectors Fallen Angel High Yield Bond ETF (ANGL)
Socially Responsible Investing
Wealthsimple recently released socially responsible investing options for investors who want to invest with their values. Those investments include:
iShares MSCI ACWI Low Carbon Target (CRBN)
PowerShares Cleantech Portfolio (PZD)
iShares MSCI KLD 400 Social ETF (DSI)
SPDR® SSGA Gender Diversity Index ETF (SHE)
PowerShares Build America Bond Portfolio (BAB)
iShares GNMA Bond ETF (GNMA)
Socially responsible investing options will carry a slightly higher fund cost associated with managing the funds to keep the investments “socially responsible”. Keep that in mind when choosing this option.
Investments in all of the portfolios can change over time, so check for current investment mix when you sign up.
Wealthsimple Roundup
Wealthsimple added a new feature in October of 2018 called Wealthsimple Roundup that helps you to save and invest in small increments, based on your daily spending in a linked account.
Spend $4.50 at Starbucks? The amount will get rounded up to the nearest dollar, $5 in this case, and once a week your combined roundups will be invested.
How can you take advantage? From their FAQ:
If you’re already a Wealthsimple client, open your mobile app and click on “Add funds.” There will be an option to turn on Roundup. Then just select the credit and debit cards you want to connect, and the Wealthsimple account you want your roundups to go to. Bingo, you’re done. Every time you spend money with one of your linked debit or credit cards, the amount gets rounded up to the nearest dollar, and once a week that money gets invested.
Investing 50 cents at a pop may not seem like much, but when the roundups are added together it can be a surprisingly significant amount of money.
In the past when I’ve used a roundup feature it can lead to saving $100-200 in a single month if I’ve spent enough. Definitely a cool feature and one to take advantage of.
Wealthsimple Mobile Apps
Wealthsimple has beautiful mobile apps for both iOS and Android. The apps were redesigned from the ground up at the end of 2016, and are now even more beautiful and functional.
Some of the functions you can perform in the app:
View your portfolio.
Track account activity.
Setup auto deposits, or make one time deposits.
Access educational content.
Update your profile information.
Wealthsimple Service Fees And Minimums
So how much will you be paying to use Wealthsimple? What are the fees and minimums for using the service?
Wealthsimple currently has no minimums on an account, and there are no trading, account transferring or rebalancing fees either. You can start investing when you deposit $500.
Low Annual Management Fees
The account management fees with Wealthsimple are pretty easy to break down.
While the fees for the service aren’t the lowest in the industry, they are often much lower than going with a traditional human advisor or a large mutual fund company. They are very much in line with much of the industry on pricing, especially if you’re investing more than $100,000 where they include meetings with advisors, lower fees and other perks.
Simplified & Automated Investing
Wealthsimple was launched in the U.S. market in January 2017, and has quickly become one of the premier options for people looking to have a simple, effective and automated investment portfolio. (If you’re a Canadian, check out this Wealthsimple review that was written specifically for a Canadian audience.)
Their portfolios are created and based on the ideas of Modern Portfolio Theory, and those proven strategies are the sound basis for a good long term investing portfolio for anyone.
Their fees are lower than you’d likely see when using a traditonal financial advisor, and are in the range of what other providers charge (although some are lower). The fact that they’re offering a $100 sign-up bonus through our link should give you plenty of time to test the service out, before deciding if you want to use them for the long term.
I think their service is top notch, and I’d recommend giving them a try.
Sign Up For Wealthsimple, Get Up To A $10,000 Managed Free!
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When you are trying to tighten down the hatches on your spending, you are doing everything possible to stick to your budget.
You are determined to stick to your budget this time around. But, you always hear that budgeting can be hard.
Well, here are some quick budgeting tips that will make sure to stick to your budget.
As most new budgeters learn, they struggle to stick to a budget for their monthly expenses. It is a natural process everyone goes through.
Budget, if you are looking for an easy button, then learn which payment type is best if you are trying to stick to a budget.
Especially if you spend a lot of time on social media, studies have shown you are more likely to overspend. So, you must learn which payment type will have you stick to a budget.
Then, you may be wondering and wanting help deciding which payment type is best for you.
The Optimal Solution Payment Type Solution
The most efficient payment type is something that is instantaneous and there are no fees associated with the transaction.
Cash is the most efficient payment type: Cash payments are usually the most efficient and convenient way to pay for goods or services.
Credit cards can be a less favorable option: Credit cards tend to have high-interest rates and can lead to financial disaster if used irresponsibly.
Debit cards are a great way to keep your spending within your budget: Debit cards should be considered a top priority for budgeting because they keep you within your spending limits.
Developing a budget will help you avoid financial disaster: A budget helps you stay organized and make informed decisions about which payment method works best for you.
Today, there are so many options on which payment type to use in today’s online world.
1. Cash
Cash is a payment type that can be used to reduce debt spending. It is versatile and can be used for a variety of expenses, such as groceries, medical bills, and gym memberships.
Cash is an excellent choice for people just starting to budget and save.
It is more restrained than credit or debit cards. The envelope method of cash budgeting can be used to train your brain to reduce spending. Cash is the most traditional payment method and has the fewest drawbacks. However, you need a safe place to store your cash, and some stores may not accept it.
Benefits of Cash:
Cash is an excellent payment type when your financial goals are to reduce debt spending.
Cash is a finite payment method that prevents you from overspending.
You have a set amount of money to spend each month, so there’s no chance of overspending.
Easy to track with the envelope method: Utilizing the envelope method ensures that you are tracking your spending (i.e groceries, gas, medical bills) and making sure that you aren’t overspending.
Cash is a quick and easy way to pay for goods and services.
No Fees. No maintenance fees or interest rates as credit cards. Cash is just plain cash – printed paper of currency.
You can avoid high fees associated with card transactions: There are no associated fees when paying with cash, making it the cheapest option overall.
Cash discounts may be available. Since you are paying with cash many small businesses offer a cash discount of 2-5%.
You can use cash at any store: No need to carry around extra cards or checks.
It’s easy to get cash: You can easily get cash and make extra cash.
There’s no need for bank account details: No need for bank account details means you’re free from identity theft risks and other inconveniences that come with having a bank account.
Cash allows you to skirt some financial regulations: Because cash payments don’t fall under the purview of many financial regulations, businesses can take advantage of loopholes in the law that allow them to charge higher interest rates on loans or engage in shady business practices. (highly recommended to stay above book)
Cons of Cash:
Possibility of losing or stolen cash: Keep your cash in a safe place!
You need a safe place to store your money: Another disadvantage of using cash is that you may need a safe place in which to keep it – some stores don’t accept it as a payment method.
Why Choose Cash?
Total control over your money, so there’s little chance of unexpectedly running out of funds.
Cash is a great way to stay on budget, as you can easily track your spending and see where you need to cut back.
Unpleasant to spend money with cash, which can help train your brain to reduce spending.
Cash is a quick and easy way to pay: Using cash eliminates the need for banks, credit cards, or other forms of payment.
Verdict: Paying with cash is the best method for budgeting and saving.
Overall, cash is a great payment type when it comes to budgeting. You can immediately see how much money you’ve spent and what needs to be cut back.
You can’t make impulsive buying decisions with debit cards or credit cards.
With a finite amount you can spend, cash is an excellent choice to prevent overspending. According to research, paying with cash can feel unpleasant, which can train your brain to reduce spending as much as possible.
2. Credit cards
Credit cards offer a number of benefits, including convenience, cash back, and the ability to make large purchases or pay bills in case of emergency. However, credit cards also come with credit card debt and can lead to overspending and financial problems if not used carefully.
For many, credit cards are the easiest way to blow your budget because you don’t have control over how much money you spend.
It is possible to overspend with credit cards if you are not mindful of what you charge.
On the flip side, this is a preferred method as many credit cards also offer rewards programs that give you cash back or points for purchases. If you make the conscious decision to use credit cards, you must make payments on time to avoid penalties.
Benefits of Credit Cards
Credit cards are convenient: Convenient to use and don’t have to worry about losing cash.
Use a credit card if you are disciplined and have strict spending habits: If you are disciplined and have strict spending habits, then using a credit card can work well for budgeting purposes.
Flexibility on larger purchases: Some benefits that come with having a credit card include more cash flow as well as being able to make larger purchases.
Credit cards provide support in times of crisis: Many credit cards offer extended services that can help like 24-hour fraud protection, lost wallet services, traveler’s insurance, and many other benefits – check each issuer for details.
$0 Liability on Unauthorized charges: Your credit card company will not be held responsible for any charges that were not authorized by you. This means that if you did not authorize a charge in person, online, or otherwise, you will not be responsible for it.
Fraud protection: Check your credit card issuer, but many offer fraud protection.
New card introductory APR is helpful to pay down debt: The introductory APR for the new card may not last long.
Payments on balance transfer should be manageable: Make sure that the payments on your balance transfer are manageable.
Points: You can accrue points along with your spending which can be a great perk.
Credit card interest rates are significantly lower than payday loans: Interest rates on credit cards are usually much lower than payday loans.
Due Date is After your statement closes. Since your bill cycle is at least another 21 days between the closing date for your statement and the due date, it gives you flexibility. Personally, I still account for the credit card bill in the same month that it was accrued.
Cons of Credit Cards
Potential for credit card debt: When using a credit card, be aware of your credit limit and the interest rate that you will have to pay on your debt. Also one of the categories of debt.
Credit limit often leads people to spend money: The credit limit often leads people to spend money by giving them a false sense of security, when they should stick to a budget and pay attention to their credit card statement and the billing cycle.
Credit card overspending can lead to debt: Consider the purchase if it is essential or delay it if possible.
Ability to easily purchase something you cannot afford. Buying something that you don’t have the money saved up for will cost you interest fees associated and maybe even with a credit card balance transfer.
There are a number of fees associated with a balance transfer: Transfer fee, interest on new purchases charged to the card.
Your introductory APR may not be valid if you make too many payments late: If you fall more than 60 days behind on payments your introductory APR might be canceled and you may face higher interest rates.
Credit score can suffer from debt: When you carry a credit card balance or don’t pay your monthly bills on time, you will lower your credit score.
Avoid carrying a balance: Pay your statement in full each month to avoid paying interest and maximize your grace period.
Key Takeaways on Credit Cards
Make sure to pay attention to the dates: Don’t spend more than you can afford, and make sure you’re making your minimum monthly payments on time so that your debt doesn’t increase over time.
A credit card can be used for budgeting only if you’re very disciplined: If you know that overspending is NOT an issue and you pay the credit card’s monthly balance in full, then using a credit card is fine.
Credit card transactions usually take several days to register in the feedback system: Something to look out for!
You can step back into debit cards or cash if needed: If credit cards are not for you, there are other options available such as debit cards or cash
3. Debit cards
Debit cards are a good option if you want to stick to a budget because the predetermined amount of funds can help you stay within your means. Additionally, debit cards are more convenient than cash and just as accepted as credit cards in most places.
A debit card works more similarly to cash than to credit cards.
They provide an easier way to track your spending and avoid having to carry a lot of cash.
Pros of Debit Cards:
No Need to Carry Cash: A debit card is better than cash because you don’t have to carry a lot of paper money and change around, and they’re also safer.
Debit cards are faster and easier to use: Debit cards work just like credit cards – withdrawing cash, making purchases, and paying bills – but they are linked directly to your bank account, so there is no need to carry around a separate cash envelope wallet or purse for them.
A debit card is a good option if you want to stick to a budget: Debit cards come with a predetermined amount of funds that you can spend from your bank account just like cash.
Tracking payments is easy with debit cards: Your debit payments will appear on your issuer’s dashboard, which you can monitor anytime from any location.
Convenience: Debit cards are more convenient to use and faster than needing to write a check or carry around cash. Plus they don’t add to your debt.
Shopping online is easy. You can use your debit card to make online purchases with your bank account, and digital banking tools make tracking your spending easy.
Points: Some debit cardholders can earn points for spending on their cards, which can be redeemable for rewards such as cash back or gift cards. This is new to compete with credit cards.
Fraud protection is typically offered for free with most debit cards—meaning if your card is stolen or used without your permission, you can get your money back.
No impact on your credit report. When you use a debit card, the funds are actually withdrawn from checking or savings accounts so there is no credit reporting occurring.
Cons of Debit Cards:
An overdraft on a debit card can happen when a purchase exceeds the amount of money in the checking account, leading to overdraft fees.
Funds on hold with fraudulent charges. If your account gets hacked, your losses will be limited since most banks protect their users against fraudulent charges and online purchases with their accounts. However, those funds will be held while they investigate and you may be liable for $50.
No chance to improve your credit score. Since you are not borrowing money, you are unable to improve your credit score.
Debit cards are a great way to keep your spending within your budget and avoid overspending which can lead to many detrimental issues.
Regardless of the overdraft fee, debit cards are still better than cash because they’re safer and easier to carry around.
4. Checks
Checks… do people still write checks? Why yes they do!
Checks offer a few benefits as a payment method, even though they are slowly being replaced by more modern options.
This can help you keep track of your spending and make sure you do not overspend. Additionally, if you ever need to dispute a charge, having a check can be helpful in proving what you paid for.
What is a check?
A check is a written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer from the check writer’s account. The date is usually written in month/day/year format. The signature of the check writer is usually on the line below “Pay to the order of.”
There are three main types of checks:
A cashier’s check is a check guaranteed by a bank, drawn on the bank’s own funds, and signed by a cashier.
A certified check is a personal check for which the bank has verified that there are sufficient funds to cover the payment.
A personal check is one that you write yourself and that is not guaranteed by the bank.
Pros of Checks
Checks are still a payment option: Checks are one of the traditional payment methods, but it is slowly dying out because of modernization.
Physical written record. It can be helpful to have physical copies of checks in addition to digital records through the bank.
You need to make both digital and physical copies of the check: Save check stubs but also transfer the information to a budgeting system.
Cons of Checks
Saving check stubs is helpful, but you still need to transfer the information to a budgeting system: Useful for tracking spending, but you’ll likely want more detailed records than just check stubs.
Not as convenient as credit or debit cards.
5. Apple Pay or Apple Cash
Apple Pay is easy to use and convenient since you only need to connect your smartphone to your cards and bank accounts via the app.
It is easy to use since you just hold your phone up to the reader and wait for the payment screen to appear.
You can even get cash back with apple pay.
Pros of Apple Pay:
Apple Pay is easy to use and convenient: You only need to connect your iPhone to your cards and bank accounts via the app.
You don’t need to carry any extra cards or cash: No need for additional cards or cash when you’re out and about
You can use Apple Pay on different devices: You can use Apple Pay on your iPhone, iPad, and Mac.
Transactions are secure: Your transactions are secured with Touch ID or a passcode.
Set up Spending Limits for each user. This way you can make sure you (or others with authorized access) are not spending more than you intended. Learn how.
Protection of Data during transactions. Your actual credit card number is changed to a different digital number, which allows limits your card number’s exposure.
Cons of Apple Pay:
Not widely accepted (yet). This method of payment is 100 percent guaranteed. While many stores offer apple pay, not all do quite yet.
The same rules apply if you load apple pay with a debit or credit card drawbacks include late fees, interest rates, and overspending: Keep that in mind when choosing Apple Pay as your payment method.
6. Mobile wallets like Google Pay, Samsung Pay, Venmo, or Zelle
Mobile wallets are digital payment systems that allow you to pay for items with your smartphone. Many people find mobile wallets are very convenient and becoming a traditional method of payment (such as credit cards).
With mobile wallets, you are making digital payments without having to carry around cash or cards using just your smartphone.
Mobile wallets are easy to use and provide instant payment convenience, making them perfect for shopping online.
Pros of Mobile Wallets:
Mobile wallets use credit cards and debit cards: Connect your smartphone to your bank accounts and use it for digital payments.
Mobile wallets are easy to use and convenient: Instant payment convenience makes them perfect for shopping online as well.
No need for cash or cards: No need for cash or cards.
Strong secuirity features provide privacy and security features that ensure your personal information is safe from data breaches and unwanted charges.
You can make purchases without having to show your identification: You can make purchases without having to show your identification.
Additional Layer of Security. Additionally, mobile wallet data is protected with verification, such as fingerprints.
Cons of Mobile Wallets:
With Zelle and Venmo, it is easy to send money to the wrong person or add an extra zero and send more money from planned. More often than not, it is difficult to recover your money.
You need to be disciplined when using a mobile wallet: Pay attention to late fees and interest rates, as well as the amount you spend in a month.
7. Prepaid Cards or Gift Cards
A prepaid card or a gift card could be right for you. The advantage of these is the mere fact that you reached the limit is enough to deter overspending.
It can make you think twice about whether you need to purchase an item or not.
Pros of Prepaid Cards and Gift Cards
Easy to use: Prepaid and gift cards are easy to use and manage your finances with.
The mere fact that you reached the limit is enough to deter overspending: It can make you think twice about whether you need to purchase an item or not.
No strings attached: No need to worry about any fees associated with the prepaid card once activated.
Privacy: The prepaid card does not track your spending or use any personally identifiable information.
Credit Score Doesn’t Matter: Your credit score does not matter when obtaining a prepaid card.
Cons of Prepaid Cards or Gift Cards
Losing a prepaid card is not a fun experience. Contact the prepaid card issuer right away to protect the funds on the prepaid card.
Fraud protection: Consider whether your prepaid card issuer offers any theft or fraud protection, as not all providers offer this feature.
Prepaid cards have limits on how much money you can load onto them, which can be frustrating if you need to make a large purchase.
8. PayPal
PayPal is a very convenient way to pay for items online or in person. It is widely accepted and used by many people.
PayPal is a digital payment service that offers convenience and ease of use. You can use them to send money to people or pay for online purchases.
However, because these services can only be used online, they should not be relied on as your sole method of budgeting and tracking expenses. Instead, consider Paypal in combination with another budgeting tool, like a spreadsheet or app, to get a fuller picture of your spending.
Pros of PayPal:
PayPal is one of the most popular online payment methods: Widely accepted and used by many people.
You can use them to send money to people or pay for online purchases: Help you review your spending prior to purchase.
Cons of Paypal:
EasyTarget for phishing scams. A phishing scam is when someone tries to trick you into giving them your personal information, like your password or credit card number. They might do this by sending you an email that looks like it’s from PayPal, but it’s not. Or they might create a fake website that looks like PayPal. If you enter your information on these sites, the scammers can then use your account to make purchases or send money to themselves.
Reputation for poor customer service. This is evident in their customer service ratings, which are some of the lowest in the industry. The majority of complaints against PayPal revolve around poor service received when asking for assistance with fund freezes and account holds.
9. Cryptocurrency (ie: Bitcoin)
Cryptocurrencies offer a new and innovative way of handling payments. They’re not yet widely accepted, so there’s potential for businesses to get in on the ground floor with this new technology.
However, because cryptocurrencies are so new, it’s uncertain if they will be regulated or not. This could pose a challenge for businesses down the road.
Pros of Crypto
Not subject to the same regulations as traditional currency, which makes them appealing to those who want to avoid government intervention.
The valuation of Crypto changes rapidly. If you are smart with crtyple this is a great way to spend your crypto coins.
Cons of Crypto
Cryptocurrencies are not accepted everywhere: Cryptocurrencies are not accepted by most organizations yet, which it makes it difficult to use them in day-to-day life.
It’s unclear if cryptocurrencies will be regulated: It’s uncertain if cryptocurrencies will be strictly regulated or not. This poses a challenge for those who want to use them as a payment method.
Bitcoin and other cryptocurrencies are still in their infancy: Bitcoin and other cryptocurrencies have only been around for a few years, so they may still face challenges in the future.
Here are the most popular budget apps today:
Other Payment Methods:
ACH payments
ACH Payments is an excellent way to pay bills and other financial obligations: You can easily set up a billing cycle for recurring payments, making it safe and convenient.
Fewer people are aware of your transactions when using ACH payments, reducing the chances of fraud or theft.
Key Facts:
Fewer people know about your transactions when using ACH payments, reducing the chances of fraud or theft.
Your checking account information is not shared or accessed by the system in any way.
You can quickly pay bills and other expenses with ACH payment: Financial institutions offer this as part of their deals.
When setting up recurring bills with ACH payment, you are aying your bills on time is important for maintaining a good credit score.
Pay attention to your check account balances: Make sure you have enough funds in your check account to avoid paying overdraft fees.
Money orders
A money order is a document that orders the payment of a specified amount of money. Money orders are convenient because they can be bought at many locations, including post offices, banks, and convenience stores.
To get a money order, you will need to fill out a form with the payee’s name, the amount of the payment, and your contact information. You will then need to purchase the money order with cash or a debit card.
To cash a money order, you will need to take it to a bank or post office. You will need to show identification and sign the back of the money order. The teller will then give you the cash for the payment.
More secure than cash: Money orders are more secure than cash because they don’t require a bank to make the transaction.
Less convenient: money orders are less convenient because you must purchase them in person.
Able to trace. They are also more secure than cash because they can be traced if lost or stolen.
Wire Transfers
Wire transfers are a more secure way to transfer money than traditional methods like checks and cash. These are sent through the banking system and are usually processed within two business days.
Typically, wire transfers are used when sending and receiving large sums of money (over $10000).
More secure than cash: Wire transfers are more secure than cash as the bank verifies there is enough money to make the wire transfer.
Fees involved with using a wire transfer. Most institutions charge for handling a wire transfer.
What method of payment is best?
Cash is the most widely accepted form of payment, but debit and credit cards are very popular.
The payment method that is best for you depends on which one helps you to stick to your budget and spend less money. The goal is to be financially stable.
What method is best for sticking to a budget?
There are several different types of budgeting methods that people use in order to manage their finances. Many people focus on using the 50/30/20 method, in which each percent corresponds to a different category of expenses.
There are plenty of budgeting tools available today to make sure you stick to your budget.
You need to find what works best for you. At the end of the month, you want to spend less than you make. That is the winning combo!
1. Budgeting App
There are many budgeting tools available online, which can be helpful as it can be easier to track your progress and budget over time.
You can use various popular budgeting apps like Quicken, Qube Money, or Simplifi.
These apps can help you track your spending, set goals, and stay on track with your budget.
2. Paper and Pen or Simple Spreadsheet
Some people find that they prefer using a simple spreadsheet or paper budget. This may be due to personal preference or because they find it easier to understand and use.
Additionally, using a paper budget may help you stay more organized as you can physically see where your money is going.
Options to get you started include our own budgeting spreadsheets or using an automated system like Tiller.
3. Envelope budgeting method
The cash envelope system is a good way to stick to a budget because it is rigid and based on envelopes and cash. You can’t get more money until your cash payday. So, this system helps you track your spending and budget better.
However, using only cash can have drawbacks as having large amounts of cash on hand can be risky.
The envelope method gives you a sense of control over your spending and makes it more tedious to write down your transactions. If you find writing down your transactions tedious, the envelope method may be too much for you.
4. Know Your Budget Categories and Track expenses
Tracking expenses is essential to move ahead financially: Knowing what you have spent in each category will help you make better financial decisions.
Be specific with your budgeting categories. Don’t make it too complicated. Always remember to include household items, clothing, and groceries when tracking expenses.
5. Prioritize your Budget Plan
A budget can provide a realistic picture of your finances, help reduce stress related to money matters, and guide you toward achieving your goals.
Creating a budget can help ensure that you are able to meet your financial obligations and still have money left over for savings and other goals. A budget can also help you track your spending so that you can make adjustments if necessary.
Make a budget plan: This will help you stay on track and make sure that you are spending your money wisely.
You decide where to spend money: A budget helps you set future goals and achieve your financial goals.
Creating a budget can help reduce stress: If you tend to get stressed about money matters, creating a budget can give you peace of mind.
A budget has other benefits beyond financial ones: If you want to achieve something in life, creating a budget can help guide you in the right direction.
See where to cut back spending. You can also look at your past spending habits to see where you can cut back. Sometimes it may be necessary to save more in order to achieve long-term goals, like buying a house or having a wedding. Always be mindful of your budget when making payments and spending money.
It’s a three-step process that involves basic math: Making a budget is simple and requires only basic math skills.
Stay on track: Making a budget plan will help you stay organized and keep track of your expenses.
A budget plan will help you stay on track and make sure that you are using the best payment type for your budget.
Making a budget is an easy way to save money. By following a few simple steps, you can keep track of your expenses and make sure that you are spending your money wisely.
Which type of payment is best for sticking to a budget?
One of the main pros of using cash as a method of payment is that it is the most efficient way to keep track of your finances. This is because it is very easy to budget when you are only dealing with cash.
However, many people prefer debit or credit cards are the best type of payment. They are more convenient than cash and can help you keep track of your spending. However, if you have a bad credit history or a low credit score, credit cards may not be the best option for you.
Cash payments are the most efficient: Most convenient and easiest to keep track with cash envelopes.
Credit cards allow you to accrue points along with your spending: These are a great benefit and one that can be a perk if handled well as part of your budgeting process. As long as pay them off in full each month to avoid credit card debt, high-interest rates, and other negative consequences.
Debit cards are also a good option for sticking to a budget. They can be used like credit cards but with less risk of debt.
Cash-based payments are a newer option and are more reliable: May not have as many negative consequences as other payment methods such as credit cards or loans.
What Not to Use when you are Trying to Stick to a Budget
You need to steer clear of these types of payments if you want to be financially stable person.
Personal loans
Personal loans are a risky way to budget. However, if you need the money for an emergency or unexpected expense, a personal loan can be a lifesaver.
There are many risks to consider and other ways to lower your spending before resorting to a personal loan.
Loans can cause budgeting problems: Loans can mess up your budget and make it difficult to stick to spending plans.
Taking out a personal loan just for the sake of having money can disrupt your budgeting: Consumers often borrow money in order to pretend they’re doing better financially than they really are.
Borrowing money is usually not a good idea: When you borrow money, you may find that you cannot handle seeing low checking account balance, which can lead to deeper debt problems.
Payday Loans
Payday loans are a bad option for someone looking for a long-term solution. They are expensive, and there is a high chance that the person will not be able to pay back the loan.
The interest that is charged is also high, and it can add up quickly.
Write bullet points about what happens with a payday loan
Payday loans can trap people in a cycle of debt, as they are often unable to pay back the loan in full on the due date.
When someone takes out a payday loan, they are borrowing money from a lender in a short amount of time, usually two or three days.
Payday loans are often expensive, with interest rates that can be above 300%.
Debt Consolidation Loans
Debt consolidation can be a good way to manage your debt because it can result in a lower monthly payment and extended payments may impact your financial plan. You can use a debt consolidation calculator to estimate how much debt you can afford before taking out a consolidation loan.
Debt consolidation loans also provide convenience because they have lower interest rates than payday loans. However, be careful when consolidating your debt because it is possible to overspend and lose your introductory APR.
You may be able to pay off your debt with one monthly payment: A consolidation loan often results in a much lower monthly payment than all of your previous monthly payments combined.
Extended payments may impact your financial plan: Take a look at how these extended payments will impact your financial planning.
You can estimate how much debt you can comfortably afford: use this tool – Tally .
It is possible to overspend with debt consolidation: If you spend more money than you planned on your day-to-day expenses, this could increase your debt. Consider if the purchase is necessary or if it can be delayed.
You may lose your introductory APR: If you fall more than 60 days behind on payments, you will likely lose your introductory APR and may even trigger a penalty interest rate.
You need to be careful when transferring a balance: Transferring a balance can also forfeit your grace period and you’ll need to pay interest on new purchases charged to the new card.
What type of payment method is best for sticking to a budget?
There are a variety of payment methods available, and each has its own benefits and drawbacks. It’s important to choose the payment method that’s best suited for your business and budget.
A payment method that allows you to stick to a budget is the best option.
FAQs
There are three main types of payment methods: cash, debit cards, credit cards, and cash-based payments.
The envelope budgeting method is a simple way to create a budget. You will need envelopes and divide your money up into the different categories that you spend money on. You will then put the corresponding amount of money into each envelope. This method can be helpful if you have a hard time sticking to a budget.
The zero-based budgeting method is a more methodical way to create a budget. With this method, you track every penny that you earn and spend. This can help you to see where your money is going and make adjustments accordingly.
A debit card is a plastic card that is linked to a checking account. Customers can spend money by drawing on funds they have already deposited. An overdraft on a debit card can lead to overdraft fees, which have high-interest rates.
A credit card is a plastic card that allows customers to borrow money up to a certain limit in order to purchase items or withdraw cash. Using a credit card can help build credit or improve your credit score.
There are a few different ways to use a credit card. You can use it to check your balance and review your spending history, which can be helpful in staying accountable.
Credit cards also offer online tools which make the analysis of your spending easier which can be helpful in tracking your budget.
Finally, you can use a credit card to rebuild your credit score by using it responsibly and paying off the balance in full each month.
Which payment type can help you stick to a budget?
When it comes to choosing a payment type that will help you stick to a budget, there is no one-size-fits-all solution.
The best payment method for you will depend on your specific needs and preferences.
When you are creating a budget, it is important to consider which payment type will help you stay on budget. Different payment types work better for different people, so it is important to experiment and find the one that works best for you.
As I stated for me, I have learned how to use credit cards to maximize cash back. But, I learned how to budget with cash when first starting.
Please pay attention to your budget and how it changes over time, as different payment types may work better at different stages of your life.
Consequently, I hope that this guide has given you a better understanding of the different payment types available and helped you narrow down your options. There are a variety of payment types that can help you stick to a budget, so it’s important to research each one carefully.
I highly recommend using an app to track your expenses and know where you spend your money. By developing a budget and choosing the right payment type, you can stick to your financial goals.
Know someone else that needs this, too? Then, please share!!
I‘ve been finding ways to cut back our monthly expenses lately, and I shared some of those tips in a recent post titled, “How To Save Money On All Your Regular Monthly Bills“. One of the places I thought that most people could end up saving on their regular monthly expenses was in their phone bills.
Many people pay way more than they have to for expensive smartphone plans and landline phone service. The average cell phone bill runs close to $100 every month, and if you have a landline as well that can add on another $30-60 depending on where you live, how many features you have and how many state, local and federal taxes are being levied on your monthly bill.
A couple of years ago we addressed our overly expensive cell phone plans by dumping our regular contract service, and buying prepaid cell phones from Virgin Mobile. We now pay no more than $40-50/month for two cell phones, one of them a smartphone.
We’ve been saving a lot of money on our cell phones for the past couple of years, but we’ve still been paying for an expensive landline phone. The cost for the phone line keeps going up, and the only reason why we hadn’t dropped it yet was because we needed it for our home security system. Now that there are other options for that (cell and internet based security systems), we’ve finally decided to take the plunge and switch from a landline to VOIP service.
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Cutting The Phone Cord, Going To VOIP
When we decided to switch to a cheaper VOIP provider we looked around to find some of the better devices out there. Among the options we found were service from Vonage (still has monthly bill), Magic Jack Plus, Google Voice and Skype.
After searching around for reviews of the different services I found quite a few favorable reviews of the Ooma phone service using the Ooma Telo device. Ryan from CashMoneyLife mentioned that he had signed up for Ooma and had been happy with it. G.E. Miller at 20somethingfinance.com talked about how he’s been using the Ooma service for years. Both were saving hundreds of dollars by using Ooma. The reason? There are no regular monthly phone bills if you sign up for their basic service. All you pay for is the hardware which you connect to an existing internet connection.
Almost all of the recent reviews that I read of Ooma were very positive. The only negatives I saw were from people having issues with their particular router or modem not working with the Ooma device, or a few people complaining about short outages. With all that in mind we decided to jump in and purchase the Ooma Telo pictured above.
Save Hundreds By Using Ooma
So just how much money can you save by switching from traditional phone service to a device like the ones available from Ooma? Hundreds of dollars if our situation is any indication.
Cost of our old phone service
Centurylink landline – $43.38/month: We pay $43.38/month after service fees, taxes, or $520.56/year. Included on that phone is voicemail, call waiting and caller ID.
It was actually more expensive than I realized. For quite a while I had thought we were paying somewhere closer to $30. Taxes really bump the price up a notch!
So how much will we save by moving to Ooma – where we’ll have more features available than our old phone line?
Costs of Ooma VOIP phone service
Ooma Telo device – $76.25: The device itself used to cost $299.99 when they originally launched, but it has dropped in the last year or two. As of this writing, the normal everyday price on Amazon is currently $76.25. We got a referral code and when we bought it the cost was $139.99 for us direct from Ooma. (You can find it for less than $100 reliably now)
Fees, service charges and taxes – $4.53/month: The only monthly fees you’ll ever pay are the fees associated with having 911 service on the device, and then state and local taxes. For our zip code it came out to only $4.53/month or about $54/year. Find out how much you’d pay a month here: Ooma Tax Calculator.
So for us with the initial up front cost of $139.99, plus the monthly taxes and fees of less than $5/month, we’ll have paid for our unit in less than 4 months of service. After that we’ll be saving around $40/month. That adds up quick!
Ooma has a savings calculator on their site that gives you an approximate amount you’ll be saving if you switch to them. It showed that by the end of the first year we will have saved over $288. By the end of the second year we’ll have saved over $756!
How Ooma Works
Setting up the Ooma service sounds pretty simple according to what I’ve read. For most people it takes around 15-20 minutes to setup their new Ooma Telo device.
Since I haven’t received and installed my Ooma yet, I can’t vouch for just how simple it truly is in practice, but it certainly sounds easy.
Activate your device online using the activation code found on the bottom of your Ooma Telo device.
Choose a phone number. You can port your old phone number later on if you’d like.
Enter your contact information, including a second phone number and a physical address for 911 purposes.
Enter billing information to pay for fees and taxes, or for premier service if you sign up for that.
Account registration.
After you’ve done all that it’s just a matter of plugging in the device and running an ethernet cable to the device from your modem or router. Once you plug it in it may need to download any necessary updates, but after that you should be set to go. Just plugin your regular old phone and go to town!
Read my post talking about setting up Ooma here. It really is easy!
Ooma Features
So what are some of the features that you get with an Ooma account and the Telo device? With the basic free service, you can get all that you’d expect from your regular landline service, and more.
Basic Ooma Service Features
Free U.S. calling.
Voicemail that you can access from any phone or web browser.
Caller ID and call waiting.
Great HD call clarity.
911 service (despite it not being a landline) and 911 email and text alerts when someone calls for emergency help.
Porting of your landline phone number.
Online account where you can check call logs, listen to voicemail and set preferences.
Low cost international calls. (I would probably just use Skype if I had to do this)
So we’ll be getting everything we had with the old service on the basic plan with Ooma, and more like the online voicemail. With the premier service with Ooma, which costs $9.99/month, you get a whole lot of other features included with your account.
Premier Ooma Service Features
Three way conferencing.
Do not disturb setting so calls roll into voicemail without the phone ringing.
Community blacklist access to block known telemarketers and solicitors.
Personal blacklist to block calls from numbers you don’t want to talk to.
Call forwarding so you can even forward your calls to your cell phone or another phone.
Ooma mobile app access to make wi-fi calls on the go with the Iphone app.
Voicemail to email forwarding so that you can listen to your messages in your email.
Instant second line so that you can make a second call without missing a beat.
Backup number to forward calls to in case your phone goes down.
Call screening to listen to a message and pickup if you decide you want to talk to the person.
Anonymous call blocking.
Multi-ring so that your phone system rings your cell phone and home phone simultaneously.
Having A Smooth Transition – Keeping Your Old Phone Number
One thing I love about Ooma is that we’re able to port our old home phone number to the new Ooma Telo device. All you have to do once you setup your system is request that they port the number over from the old phone company. There is a $39.99 charge if you decide to do this, although it’s free if you opt for a year of the paid $10/month premium service. It can take 3-4 weeks or more depending on how quick your old provider moves making the change.
To check if your phone number can be ported to Ooma, go here.
Once you’ve got an Ooma home phone system your phone number can then be portable wherever you go. If you move, like we plan on doing in the next year, you just take your Ooma with you and plug it in at the new house and you’re all set to go. No turning service on and off. You can also take it with you on vacation, or on a long trip. Anywhere you can plug it into an internet connection you should be able to make calls. Just make sure to change your 911 service address on your online account if you do move.
Where Can You Get The Best Deal On Ooma?
So where can you find the best deal on Ooma?
For me the best deal that I found on the Ooma right now was by buying it from Amazon.com has the unit available everyday for a price of $76.25. Costco also sells the unit and members can sometimes find specials on the Ooma system. Some people have reported getting it for as little as $50 for refurbished units.
The key is to do your homework when buying the device, find out what specials and promotions are currently available, and find the best possible deal!
Are you already using Ooma at your house? Tell us what your experience has been in the comments!
For most people contributing to a 401(k) retirement plan at their workplace is the main way they’re investing for the future.
Sometimes those retirement plans are easy to understand, low cost, and offer great options to invest, but other times they’re confusing and complicated.
Blooom is an automated investment advisor and advice engine that can make managing your 401(k) a little bit easier.
Blooom is a robo-advisor for your 401(k). Let’s take a look at who Blooom is, and what they do.
Blooom History
Blooom was founded in March 2013 in Overland Park, Kansas by three friends, co-founders Chris Costello, Kevin Conard and Randy AufDerHeide.
The idea behind the company was to help give better advice and management for 401(k) plans, for regular people.
The firm’s researchers analyzed close to 90,000 401(k)s, with over $3 billion in total assets, and they found that over 80% of them were managed poorly.
That’s where Blooom decided to step in.
Blooom helps people to manage their employer sponsored retirement plans. They can manage your 401(k), no matter where your plan is held, or who your employer is.
They’ll give you good advice, and manage the 401(k) in your best interest, since they are a fiduciary and are required to by law.
Here’s an overview of the company from the folks at Blooom:
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What Does Blooom Do?
Blooom will automatically manage your 401(k) retirement account for you. It is a robo-advisor that will help you to maximize returns within your company sponsored retirement plan.
If you work for a company that has a 401(k) plan, often the company won’t give you much advice on how to manage your investments, once you’re signed up for a plan.
They basically tell you there’s a plan, that they’ll match your contributions up to a certain level, and give you a login for your account.
Simple enough. But what happens once you start contributing money? Where does that money go, and what should you invest in? What are the expense ratios on the different funds?
If you’re in your 20s and just starting out these concepts can be a bit difficult to grasp, especially if you’re more focused on building a career.
Blooom can step into this knowledge gap and help you to make sure your investments are aligned with your future goals.
They’ll find out some basic information from you like your age, target retirement date and a few other things, and then Blooom will recommend an allocation for your portfolio.
For younger people they’ll typically recommend a 100% stock allocation, and as you age the portfolio will begin to be more heavily weighted towards bonds. In other words, you’ll be taking on more risk in your early earning years, and move towards more stable investments as you age. If you don’t like their recommendation you can opt for a different ratio of stocks to bonds.
Whenever possible Blooom wil select a low cost index fund to help you meet your goals, and if you’re someone who has accidentally selected high cost mutual funds, this could bring some significant savings for you right off the bat. They’re looking to get you into investments that will be low cost, and track the performance of the market.
Based on their algorithm, Blooom will rebalance your portfolio every 90 days to make sure your desired stock to bond ratio is maintained. If you want to adjust your allocations, or target retirement date, you can do that at any time as well.
In addition to managing your 401(k) account, Blooom will allow users to ask financial questions from experts and real advisors. Should you invest or pay extra towards your mortgage? Should you be worried about market downturns? Ask them and they’ll be happy to help.
Get Started With A Free 401(k) Checkup
Blooom offers a free 401(k) checkup before you even sign up for their services, no promo code needed.
They’ll take you through a quick questionnaire where they ask you for your name, date of birth and when you expect to retire.
Next, they’ll ask you for an email address and password to secure your account.
Third they’ll confirm that you do in fact have a 401(k), 401(a), 403(b), 457 or TSP account, and ask you to link that account.
Finally they’ll analyze your retirement account, and you’ll see how your account is doing, and what you might be able to do better. It will show you how you can do better with fees, with allocation, and with the diversity within your portfolio.
Finally it will give you a summary of your 401(k) checkup telling you just how much Blooom can save you, and how they can help.
To get started with your free 401(k) checkup, head on over through our link here:
After Your Free Checkup
After your free 401(k) analysis, if you choose to continue with Blooom within 30 days they’ll adjust the investments in your account so that it aligns with your goals.
the average Blooom client cuts their hidden investment fees by 44%. (Based on Blooom clients‘ median pre-Blooom expense ratios and median post-Blooom expense ratios as of August 5, 2018)
First they’ll check your 401(k) and remove any funds that aren’t worth having. They’ll prioritize index funds, and typically only use actively managed funds to gain investment exposure in an area that you’re light.
Then Blooom will use their algorithm to select the best portfolio based on costs and manager experience.
Any time a change is made, they’ll advise you of the changes, and you’ll get a full break down of what has changed with your investments, how your investments look now and how you can save more.
Finally, every 90 days or so Blooom will check your account for opportunities to rebalance your portfolio. If the investments are out of balance, Blooom will rebalance them. Regular rebalancing can add an additional 0.5% to the annual returns on investment.
What Types Of Accounts Will Blooom Manage?
Blooom only manages employer-sponsored retirement accounts at the current time. That means that you can sign up and use them if you have one of these types of retirement account:
401k
403b
401a
457
TSP
IRAs, Roth IRAs and other taxable account types need not apply.
Blooom Security
If you’re concerned about the security of Blooom, and whether or not your retirement accounts are safeguarded, they are. Here is how they’re protecting your information:
256 bit encryption, bank level security: The website is secured with secure socket layer encryption, and bank level security. Their servers are secure and encrypted to ensure private online transactions.
Third party verification: They take extra measures to ensure you are really who you say you are any time changes are requested.
What Is The Cost To Use Blooom?
What does it cost to use Blooom?
Currently it costs only $10/month to have Blooom manage your 401(k). If you have additional 401(k) accounts to manage under the same login it is an additional $7.50 per account.
Depending on how much you have invested, the fee may be a large percentage of your portfolio, or it could be an extremely reasonable fee. Let’s look at why that is.
The more you have in your 401(k) account, the better deal Blooom will be for you. For example, let’s compare Blooom to the fees charged for assets under management by Wealthfront or Betterment. They both charge 0.25% annual fee for assets under management. On the other hand a human financial advisor will often charge somewhere around 1%.
Let’s say you have $1000 invested in your 401(k) (not very much), then the $10 monthly fee will come out to $120/yr, or a 12% fee. That’s not going to make much sense for most people.
If you have a larger account, however, say $100,000, the $10/month fee will come out to about a 0.12% fee. At $50,000 it will be a 0.24% fee.
Once you reach a certain level it’s very reasonable and low cost to have your 401(k) fully managed by Blooom. The more you have in your 401(k), the more cost effective it is.
Reasons To Use Blooom
There are a lot of reasons to like Blooom, and to give them a try:
They’ll give your 401(k) a free once over: Even before you pay for their service, they’ll analyze your 401(k) for free, and give you some recommendations. If you don’t like the recommendations, don’t sign up.
Their service is unique, and helpful: They are one of the only full service 401(k) management services available, and what they’re offering is helpful, and at a reasonable price.
Cancel the service at any time: There are no long term management contracts. Just cancel through your blooom account before your next billing cycle and you won’t pay additional fees.
Fees are paid directly with credit or debit card: Often investment companies will take their fees directly from your investments, decreasing returns you might gain. Blooom will charge your linked card for the $10 monthly fee.
Their analysis will give insight into your plan’s fees, funds: Once they analyze your plan, they’ll give you insights into our investment options in the 401(k) plan that you may not have had before. Things like which funds have the lowest expense ratios.
You have access to a real advisor through email and chat: Not only will you get the automated financial advice, you’ll also have access to a real person through email and chat if you have questions. It doesn’t necessarily have to be about your 401(k).
Reasons To Not Use Blooom
There are a few reasons to avoid Blooom. They may not be for you if:
Have a non employer sponsored type retirement account: If you don’t have a 401(k), 401(a), 403(b), 457 or TSP account, you won’t be able to work with Blooom.
Don’t agree with their aggressive stock allocations for younger investors: Most investors under the age of 40 receive a stock allocation of 100%. If that’s too aggressive for you this might not be for you.
If your account is too small to make the fee worthwhile: If your account is small enough the fee may be too large or a percentage of your assets under management. You’re probably better off managing it yourself for the time being, and working hard to max out your contributions. Sign up later.
Blooom Is The Low Cost Robo-Advisor For Your 401(k)
Blooom is a low cost automated investment advisor for your 401(k).
Most people will contribute to a 401(k), but aren’t really fully aware of what they’re investing in, or why. If you don’t have the time or the inclination to research your 401(k), it can be like fishing in the dark. Which funds are the best for my situation?
Blooom can step in, and fill in the gap. They have the expertise, knowledge and the technology tools in order to turn your 401(k) around.
They’ll analyze your account for fees, allocations and diversity of investments. They’ll find ways that you can improve your investments and then help you to implement their suggestions.
In short, they’ll manage your 401(k) and allow you to focus on things that are more important to you.