Typically, you pay a premium if you select a 30-year fixed mortgage versus an adjustable-rate mortgage.
The reason is simple – the interest rate is locked in and will not change during the entire loan term, which is a full 30 years, or 360 months.
Conversely, if you choose to go with an adjustable-rate mortgage, such as a 5/1 ARM or a 7/1 ARM, you only receive the benefit of a fixed rate for the first five or seven years, respectively.
It is then subject to change annually during the remaining 23 or 25 years of the loan term.
As such, you should be entitled to a discount on your mortgage rate during that initial fixed period to make up for the risk of the interest rate resetting higher once the fixed period ends.
This spread can change over time depending on what’s going on in the economy and secondary market, along with lender/investor appetite for certain products.
Today’s Menu: 30-Year Fixed or Bust
Mortgage rates are usually highest on the 30-year fixed
Because borrowers receive a fixed interest rate for a full three decades
Discounts are typically given on riskier products like ARMs or shorter-term loans like the 15-year fixed
But right now lenders aren’t passing along the usual discounts
At the moment, anything that isn’t a 30-year fixed mortgage is basically out of favor.
This is probably even more true with nonbank lenders and those who sell off their mortgages, as opposed to keeping them in their own bank portfolio.
This explains why you’re no longer seeing the usual discounts offered for loan products like ARMs, and in some cases, even shorter-term fixed-rate mortgages, including the 15-year fixed.
Once again, I traveled across the internet to see what mortgage lenders were advertising for their popular loan programs, and this trend is pretty clear.
Lender
ARM or 15-Year Fixed Rate
30-Year Fixed Rate
Bank of America
3.375% (10/1 ARM)
3.375%
BB&T
3.375% (15-year fixed)
3.375%
Chase
3.49% (7/1 ARM)
3.125%
Citi
4.75% (7/1 ARM)
3.875%
Citizens Bank
3.375% (7/1 ARM)
3.375%
Navy Federal
2.375% (5/5 ARM)
2.875%
Quicken Loans
3.125% (10/1 ARM)
3.375%
USAA
*3.50% (VA 5/1 ARM)
3.50%
Wells Fargo
3.625% (5/1 ARM)
3.375%
Bank of America is advertising a 30-year fixed for 3.375% with 0.786% discount points, and a 10/1 ARM for the same rate with 0.971% discount points. In this example, it’s actually more expensive to take the riskier loan product.
BB&T is charging the same 3.375% for a 30-year or 15-year fixed refinance rate, yet the APR is slightly higher on the 15-year.
Chase will give you a 30-year fixed for 3.125%, or a 5/1 ARM for the same price. If you want a 7/1 ARM, the rate jumps up to 3.49%. More risk for more money…that’s a sign of a messed-up mortgage market.
Citi is showing super wild mortgage rates, with the 30-year fixed 3.875% with 0.125% points, and the 7/1 ARM pricing at 4.75% with a full point charged. You’d be crazy to go with the ARM.
Over at Citizens Bank, they’re advertising a 30-year fixed for 3.375% with .50% discount points. Meanwhile, their 7/1 ARM features the same exact rate with .125% discount points.
So slightly cheaper in terms of closing costs, but the same exact rate. It wouldn’t make much sense for most folks to go with the ARM unless they absolutely knew they’d be selling before those seven years were up.
And right now, there’s not a whole lot of certainty in terms of what’s next for anyone.
Some mortgage lenders aren’t advertising or possibly even offering ARMs at the moment, including Better Mortgage and Guaranteed Rate.
Navy Federal seems relatively normal, with their 30-year fixed 2.875% with 1.25 points, and their 5/5 ARM pricing at 2.375% with 0.25% points.
That’s a discount of a half a percent, which is more of what you’d expect to see based on the risk profiles of both loan programs. This might be because they keep the loans they originate.
At Quicken Loans, you can get a slight discount on a 10-year ARM vs. a 30-year fixed, 3.125% instead of 3.375%.
Then there’s USAA, which is advertising a 30-year fixed VA loan for 3.50% with negative mortgage points of 0.375%, and a 5/1 ARM with “APR typically around 3.500%.” You have to call to get the scoop, but it doesn’t sound much cheaper.
Lastly, Wells Fargo is offering a 5/1 ARM for 3.625%, and a 30-year fixed for a cheaper 3.375%.
So again, you’d be better off taking the 30-year fixed, not only because the interest rate is lower, but it’s also fixed for the full mortgage term.
It’s All About the Plain Vanilla Home Loan Right Now
Mortgage lenders are very skittish at the moment like all other businesses
As such they’re sticking to their safest products like the 30-year fixed while also tightening underwriting standards
This is partially because it’s easier to sell these types of loans on the secondary market to investors
Expect it to be more difficult to find a home loan with exotic features for the foreseeable future
In summary, mortgage lenders are grappling with a lot of uncertainty, just like everyone else thanks to the coronavirus (COVID-19).
And when that happens, they flock to the safety and security of the 30-year fixed, similar to how investors flee the stock market and head toward government bonds, which are guaranteed to be paid back.
Speaking of being paid back, the Fed’s QE4 program targets agency mortgage-backed securities, such as those backed by Fannie Mae and Freddie Mac.
At the moment, banks and lenders are eschewing anything that isn’t super vanilla, aka basic and low-risk.
Those who are offering ARMs, jumbo loans and other traditionally riskier products are charging a premium in many cases since they don’t have the benefit of the Fed as a buyer.
Others are just removing them from their product menu, perhaps until the dust settles.
It’s reminiscent of the mortgage crisis that took place in the early 2000s, when lenders only originated boring old fixed-rate mortgages and ditched all the aggressive option ARMs, interest-only loans, and so on.
To make matters worse for some borrowers, they’re also upping minimum credit score requirements and getting tougher with their underwriting, whether it’s a lower max DTI ratio or a lower max loan-to-value ratio (LTV).
The name of the game is less risk, so if you’ve got a questionable loan scenario, it might be difficult to get funding right now.
Hopefully this is a short-term phenomenon, but no one knows for sure how long it will last.
Read more: What mortgage has the best interest rate?
Growing up, my parents taught me very little about financial responsibility. It wasn’t until college, when my parents expected me to pay my own car insurance, that I was forced to learn the basics of budgeting. It was just one bill, but it was traumatic to me since I’d never paid for anything myself until that point. Looking back, the lesson was introduced too late. It didn’t “take”.
Had I understood budgeting earlier in life, some of my financial choices might have been different. Obviously, this isn’t the only reason I accumulated a mountain of debt, but it’s an example of the lack of financial education I received as a kid. (Fortunately, now thousands of dollars in debt are gone after a lot of planning and sacrifice — and of course, using coupons.) My husband and I want to teach our boys smart financial habits at a much younger age than we learned them.
An 11-Year-Old’s View of Money
For Christmas, our 11-year old son, T, wanted wanted a cell phone. Actually, when the new iPhone 4G hit the market, he suggested that he could take my 3G to use so I could get the new 4G. (His generosity knows no bounds!) While his suggestion gave his parents quite a laugh, we seized the opportunity to teach him a financial lesson. Here’s a bit of that conversation:
Me: “T, even if you did get an iPhone, the monthly plan is expensive. Who would pay for that?” T: “You can just add me onto your plan, Mom.” Me: “You didn’t answer my question, who would pay for that?” T: “Well, you would. It’s only a few extra dollars a month. You and Dad work, so that’s nothing.”
The last statement set me off a bit! My husband and I do not want our kids to think that just because money is earned means it has to be spent. We also don’t want them to think that just because their friends have the newest fill in the blank that they need it too. After this conversation with my son, we decided to teach him a financial lesson.
An 11-Year-Old’s First Budget
s Christmas rolled around, T kept mentioning the cell phone. He really wanted it. So, we sat down and had a more detailed discussion about budgeting.
Since the cell phone would be T’s first and and only bill, we talked about his cash flow. He makes $44 a month for doing his chores (with potential to make more money each month for doing other things). We broke down his current expenses. I know he’s only 11 years old, but we really wanted this lesson to impress the importance of budgeting and giving.
I suggested that if he could find a phone plan that cost 50% or less of his monthly income, we’d consider the phone. The only limit to his search was that we needed a monthly payment plan without a contract. If he didn’t pay, we didn’t want to be bound to a contract we were paying for and not using. No payment means he simply wouldn’t have a phone to use (after all, a cell phone is a want and not a necessity).
Being eleven years old and not knowing how to find the information, I came up with a list of websites for him to review (with my guidance for some online safety measures). He browsed the sites, wrote down options, and noted which carriers offered a monthly service plan option.
After his review, he gave me his analysis and recommendation. I wasn’t surprised at the suggestion since I’d done some preliminary research myself. The lowest monthly payment plan was $25, and it did offer the monthly payment option that we required. Even though this was $3 over his $22 budget, we decided it was the best financial option meeting the requirements.
As we were going over the numbers again with the $25 cost, we discussed all of T’s expenses that his $44 monthly income was expected to cover. During this talk, we reminded him about tithing, and ensuring that 10% of his income is set aside for our church.
T’s response to this didn’t surprise me: “That’s easy. I make $44 and will spend $25 on my phone bill. That leaves me with $19. So 10% of $19 is $2.” While I appreciated his stellar math skills, we also took the time to remind him that the 10% giving was before he paid any bills. For us, that lesson was equally important in his understanding of financial generosity.
Family Financial Responsibility
Going through this budgeting process was eye-opening for all of us. While some parents are worried about having “the talk,” I was equally concerned with having this budgeting talk. This was a great lesson to teach T, but we hope that dad’s jacked up car and his first-hand look at poverty also show him reasons why we make the choice to manage our money wise in the first place.
Maybe 2011 is the year you take control of your finances and say good-bye to debt. For our family, 2011 is the year that we, as a family unit, focus on financial responsibility. And it started by teaching an 11-year-old how to budget for a cell phone.
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The question of whether a car is an asset or a liability has been debated for decades.
The reason for the debate is that there are many types of cars in the world and each car serves different purposes.
In the past, many people bought cars that were used and old to save money, because they believed it was cheaper in the long run than purchasing new ones every few years. This mindset shifted after some studies showed that replacing your car more often actually costs you less over time in terms of maintenance cost and depreciation on your vehicle value when compared to keeping a newer model longer.
Nowadays, most consumers are aware that the car is an asset and are more willing to pay for a new one.
However, there is a huge caveat on how you purchase the car, the age of the car, and the purposes of the vehicle.
All in all, depreciation can eat into your car’s worth.
What’s your take on this debate?
What is Considered an Asset?
The definition of an asset is broad and includes most things that have value. Assets are tangible or intangible property such as land, buildings, equipment, intellectual property such as patents and trademarks, or stocks.
This can be anything from a physical asset such as a house or equipment, to a more intangible asset such as a strong brand name or a loyal customer base.
Is a car an asset or liability?
A car is an asset to its owner because it took money to buy the vehicle. It is also a liability in that the cost of maintaining the car can be high, and depreciation on a new vehicle can eat into a person’s savings.
There is no definitive answer as to whether a car is an asset or a liability. It depends on the specific situation and the person’s circumstances.
For example, if someone needs a car to get to work, then the car would be considered an asset. However, if someone only uses their car for recreational activities, then the car would be viewed as a liability.
On the whole, cars are considered liabilities. They require regular maintenance, insurance, and other associated costs. However, there are a few exceptions. For instance, in some cases, a car can be used as collateral for a loan or as an investment vehicle.
Is a Car a Depreciating Asset?
A car is a depreciating asset because its value decreases over time. The depreciation of a car is based on a number of factors such as the age of the car, the make and model of the car, the condition of the car, and the miles on the car.
Cars are assets, but not smart investments as they will depreciate over time.
Reason # 1 – Wear and tear
Cars require a great deal of care and maintenance in order to keep them running smoothly. This includes everything from regular oil changes and tune-ups, to replacing worn-out parts and fixing dents and scratches.
In addition, cars depreciate in value over time due to normal wear and tear.
Reason # 2- Higher Mileage
The value of a mile decreases the more it is used. This is because the value of something depends on its rarity and when something becomes common, its value decreases.
The average car is only good for 200,000 miles. This is because of both the increased mileage and the cost of repairs as a car gets older.
Reason # 3- Cars become obsolete
Cars are becoming obsolete because new models and makes are constantly being released. This means that people want the newest and latest model, so they trade in their old car for a newer one.
Plus many of the parts for older cars become harder and harder to find. Thus, causing the cost to repair to escalate.
Reason # 4- Cars are not investments
Some people may argue if a house is an investment as well.
When you think of an investment, you want a certain rate of return on your money.
Most people use the stock market as a benchmark of earning 8% of the initial outlay of money. Thus, a car is an investment that depreciates over time. It will lose value as it gets older and the parts wear out.
If you want a return on your money, you should be asking is now a good time to buy stocks?
Can a Car Appreciate?
Yes, vintage cars and luxury sports cars have always been the exception. There are select vehicles that are in pristine condition with little to no mileage. These collector cars have a special fan base willing to spend money on these appreciating collections.
However, for the average car, the answer has always been a resounding NO!
Well, that was up until 2020, when used vehicles started to increase in value due to lack of microchips availability has been scarce causing the production of new cars to be halted. Thus, the supply and demand for new cars have been skewed causing an increase in car worth.
As the supply chain gets back to normal production, this appreciation in our sedans, trucks, and SUVs will be short-lived.
How To Calculate Car Value
Car value is the estimated worth of a car. There are two main methods for calculating this:
The trade-in method, which takes your vehicle’s current market value and divides it by its estimated remaining life span.
The resale method takes your vehicle’s current market price and then subtracts the depreciation rate from that value to get a car’s market value.
To calculate the value of a car, you need to know its make, model, year, and condition.
Personally, I like finding the worth of a car based on its Kelley Blue Book (KBB) value. This is the resource my dad used when he worked in the car industry, so I can trust the information.
The KBB value is updated monthly and takes into account recent sales and modifications.
When it comes time to buy, sell, or trade-in your car, you’ll need to know a fair price.
You can use a variety of methods to calculate your car’s worth, including using online tools, checking with dealerships and other buyers in your area, and looking at recent sales data. Remember to factor in your car’s condition and mileage when calculating its worth–prices will vary depending on the location and condition of your car.
Car Value Deprecation Curve
Before you head out and purchase your car, car value depreciation is a real consideration in your decision.
As KBB states, the first year of owning a brand new car will depreciate the most. While it feels great to drive off the lot in a brand new SUV, you can watch hundred dollar bills float behind you with how quickly the car depreciates.
To calculate the depreciation of a car, it varies depending on the make and model.
However, here is a car value depreciation chart to estimate based on.
In year one, most models will depreciate at least 20% or more.
From years 2-4, the car depreciates about 10% each year.
After five years, a car will depreciate about 60% of the original purchase price.
Car Value Deprecation Curve Example
For example, let’s take the average price of a new car of $47,077 according to Car and Driver.
1st year = car lost $9415.40 in value and is now worth $37,661.
2nd year = car lost another $3,766 in value and is now worth $33,895.
3rd year = car lost another $3,389 in value and is now worth $30,505.
4th year = car lost another $3,050 in value and is now worth $27,464.
After 5th year, the car has lost an estimated $28,246 in value and is now worth about $18,830
That is the reason most people do not believe a car is an asset.
That is a depreciating asset. Would you consider an investment if you knew 60% would be wiped away in less than five years? Probably not.
This is why most thrifty people look for cars that are at least 5 years old and lost most of the depreciation. Personally, I have never purchased a new car; everything I owned was new-to-me used vehicle. Even growing up as a daughter of a car salesman and manager, my parents never purchased a brand new car due to deprecation.
Another reason beater cars are super popular!
How Your Car Is An Asset
There are a variety of ways to define what an asset is, and whether or not a car falls into that category depends on the definition used.
In general, most people would say that a car is an asset because it has value and can be sold for money.
However, there are other definitions of assets that may not include cars. For example, some people might say that an asset is something that generates income or increases in price.
A car can be an asset for someone who is making money off of it. For instance, an Uber driver uses his or her car as a business asset. The car is providing them with income, and thus it can be considered an asset.
On the other hand, most people use their vehicles for personal use as a mode of transportation and do not make money off of it. If your car was purchased with cash or paid off, then you can consider it an asset.
Is a paid off car an asset? Yes.
Why is a car not an asset?
A car is not an asset because it depreciates in value the moment you drive it off the dealership lot. While it may be a necessary expense, it is not an asset that increases in worth over time.
Is a leased car an asset?
No, a leased car is not an asset because the asset (car in this case) is the asset of the leasing company. This is 100% liability for you and a monthly payment which you must make.
Leasing a vehicle allows you to drive it for the length of your lease term without the risk of buying and then selling or trading in at the end of your lease. Once the lease expires and if you decide to purchase the car, then it would be considered an asset on your net worth.
How Your Car Is Considered A Liability
The car is considered a liability if the debt exceeds the car’s value.
Simply put… If you have an auto loan, your car would be considered a liability.
Given that most people believe car loans are a part of being an adult, many view cars as a liability and monthly payments normal.
In addition, a car is a liability because, like any other depreciating asset, it will lose its value over time.
The longer you own it, the more money you will likely have to spend on repairs and general upkeep. This means that your car is not only costing you money every month in terms of payments and insurance, but also in terms of the decreasing worth of the asset itself.
Is a car loan an asset?
A car loan is a type of debt that is incurred when borrowing money to buy a new or used car. Thus, the car loans are considered liabilities and the car itself would be considered collateral.
Should I Include My Car in My Net Worth Calculation?
The answer to this question depends on how much your car is worth.
Personally, at Money Bliss, we recommend counting the vehicle as an asset and any auto loan as a liability. That means you would include both in your net worth calculations.
The reason why to include in net worth is if you had to sell your car immediately, you would be in one of two situations:
You have instant access to cash if needed.
You owe more in your car loan and thus, have negative equity. Meaning you would have to pay additional money to get out of your car loan and sell your car.
To keep your net worth accurate, you should adjust the price of your vehicles as they decrease over time.
Is Having a Car the worst investment of your Money?
There are a lot of factors to consider when answering this question.
Owning a car can be a major expense, and there are a lot of costs that come with owning a car, such as insurance, registration, and maintenance. However, a car can also provide a lot of benefits, such as convenience, freedom, and security.
Ultimately, it depends on your individual circumstances.
Know someone else that needs this, too? Then, please share!!
Today, I have an inspiring story from a blogger. Cassie paid off $10,000 in debt in 10 weeks and shows how you can make this a reality too. Enjoy!
In September of 2015, my wife and I officially tied the knot and, as perfect as it all was, when we returned to our home after our honeymoon we had to take a serious look at our finances. What we found shocked us.
We had known from the get-go that we both had student debt. We both attended a private, Christian college where we met and we both continued on to receive our master’s degrees. While we knew we had student debt, we had always assumed that we would simply pay the minimum until it was gone and that would be that.
What did we find when we did the math? It turns out that my wife and I owe a grand total of almost $200,000 in debt (OUCH!). Even worse? The minimum payments don’t even begin to cover the interest which means that no matter how many payments we make, we will never escape from this debt’s grasp.
Unless…
One of my favorite Dr. Seuss quotes comes from the Lorax, “Unless someone like you cares a whole awful lot, nothing is going to get better. It’s not.”
Related posts:
Now, I know that this quote is referring to saving the world, but I think it’s applicable to paying off debt too. Debt can be all-consuming and debilitating, but unless you care about fixing it, it’s not going to get any better.
The thing with debt is that unless you truly work toward eliminating the problem, the problem is not going to go away. It’s certainly not an easy-fix sort of thing. Unless you truly care about getting the weight of debt off your shoulders, you’ll be trapped.
My wife and I do care about paying off our debt because we realize how much it is holding us back – we are unable to afford a house, put money into retirement, or start a family.
That’s why we made the decision to begin aggressively paying off our debt. Do you know what happened when we made that decision? We began crushing the debt that had been, only recently, crushing us.
In our first ten weeks of debt repayment, we paid off a whopping total of almost $10,000! How did we do it? Well, it’s simple: create a budget and a plan, develop a side income, and learn how to live frugally.
Related tip: Check your credit score with Credit Sesame for free!
Creating a Budget & a Plan
Developing a budget was the first step. My wife and I spent an entire month simply monitoring our spending without changing our habits. Why did we do this? Well, we wanted to see where our money was going.
What we realized is that our money was going everywhere. We were spending outrageous amounts of money for things that we didn’t even realize we were getting! Sure, some of it was important (food, certain bills, etc.), but there was so much that was unnecessary. The couple of dollars here and there for snacks and beverages (when we have these at home), the fast food or restaurants in place of dinner at home, or the subscriptions that we had forgotten we had that were still charging us monthly.
Once we realized that our money was everywhere, we knew we needed to put it into place. We created an excel document to organize our income, budgets, and debts (I love organizing things). We determined what we needed to keep to survive, what the minimum payments for our debt were, and other costs we absolutely have to have.
We wrote it all down and made important decisions as to how much we would spend on food, how much we were willing to pay for gas, etc. This was our budget. If we followed our budget, we knew we could put a significant amount of extra cash toward our debt (which is exactly what we want to do).
The hardest part about developing a budget, though, is not actually the planning, but the sticking to it. The problem we have is that when we try to follow our budget with our debit cards, we somehow always end up off. This time, we knew that we had to do our budgeting right. We pulled out some business envelopes, withdrew some cash, and began using the cash envelope system for our budget.
Almost like magic we were able to stick to our budget – better than ever before. The reality is that plastic money is easy to overspend, but when you have cold, hard cash in your hands, it’s hard to not notice it leaving. When it’s gone, it’s gone.
Developing a Side Income
The second step we took toward aggressively paying off our student debt was to develop a source of income on the side. For me, that meant blogging. I worked as hard as I could to develop a blog that focused on my goals, that inspired people, and that helped people to reach their dreams of becoming financially free.
My wife and I both work with a caterer as we are able in order to earn a little extra money. Each event lasts around six-seven hours and pays us each $100, but we can only score around one to three events per month. Jobs such as dog walking, house / babysitting, and even renting out space are great ways to make a few extra bucks within your community.
We also have started freelancing and taking up positions in the virtual assistant world. My wife has started working longer hours and taking “on-call” shifts. We sell items from our home that we no longer need and we utilize companies that offer legitimate ways to make money online. I test them out and share them on my blog for my readers to see and utilize.
Basically, we are doing whatever it takes to earn an extra income and then ensuring that the entirety of that income goes straight toward our debt repayment goals.
Related tip: You can answer surveys and make extra money! The companies I recommend include: American Consumer Opinion, Swagbucks, Survey Junkie, Pinecone Research, Prize Rebel, and Harris Poll Online. They’re free to join and free to use! You get paid to answer surveys and to test products. It’s best to sign up for as many as you can as that way you can receive the most surveys and make the most money.
Learning How to Live Frugally
Earning an extra income can only get you so far if your spending is too high. Therefore, we also spent a lot of time learning how to live frugally and sharing it on the blog. We are learning new ways each and every day to reduce our spending and live our lives to the fullest on a frugal budget.
Some of our favorites in the kitchen include baking our own bread (which saves us over $250), making our own pasta (which saves us over $100), growing our own vegetables (which saves us hundreds), and learning how to can (which saves us tons)! While each of these individually may not seem like a lot, when added together the savings can be incredible.
The frugal living tips don’t have to end in the kitchen, though. My wife and I are learning great ways to save thousands per month by cutting the cord on cable and other subscriptions, reducing our cell phone bill, and even finding new ways to entertain ourselves that don’t cost money.
As Dave Ramsey so eloquently puts it: “Live like no one else, so later on you can live like no one else.”
Living a frugal lifestyle means making cleaning supplies and hygiene products instead of buying them, making food from scratch instead of eating out, and playing board games instead of going to the clubs. It’s a lot of cutting now, but by living like we are broke, we are putting money toward debt so that later we can live the way we want to live.
How We Paid Off Almost $10,000 in Debt in 10 Weeks
Ever since we started paying off our debt aggressively, we have been competing against ourselves. When we paid off $3,000 in one month, we knew that we could do better the next month and so we did.
It took ten weeks before we had paid off almost $10,000, but the next ten weeks will be even better, we can assure you of that. How? Because we are working as hard as we can to budget, to be frugal, and to earn extra money – no matter what it takes.
The ultimate goal here is to pay off our debt as quickly as possible and that’s exactly what we are doing. We are not putting a date on our debt repayment because we don’t want to limit ourselves to that date. We want to work to surpass any dates that could have been put down and by sticking to our budget, earning side incomes, and living frugally, we can do it.
Author bio: Cassie Jahn is the author of a DIY blog devoted to living life to the fullest on a frugal budget. DIY Jahn began to help Cassie to stick to her plan to aggressively pay off her student loans, in hopes to inspire others to do the same.
How much debt do you have? Are you trying to eliminate it?
If you are new to Making Sense of Cents, I am all about finding ways to make and save more money. Here are some of my favorite sites and products that may help you out:
Find ways to make extra money – Here are over 75 different ways to make extra money.
Cut your TV bill. Cut your cable, satellite, etc. Even go as far to go without Netflix or Hulu as well. Buy a digital antenna (this is the one we have) and enjoy free TV for life.
Start a blog. Blogging is how I make a living and just a few years ago I never thought it would be possible. I earn over $100,000 a month online through my blog and you can read more about this in my monthly online income reports. You can create your own blog here with my easy-to-use tutorial. You can start your blog for as low as $2.75 per month plus you get a free domain if you sign-up through my tutorial. Also, I have a free How To Start A Blog email course that I recommend signing up for.
You should know your credit score – Check your credit score with Credit Sesame for free!
Answer surveys. Survey companies I recommend include Swagbucks, Survey Junkie, American Consumer Opinion, Pinecone Research, Opinion Outpost, Prize Rebel, and Harris Poll Online. They’re free to join and free to use! You get paid to answer surveys and to test products. It’s best to sign up for as many as you can as that way you can receive the most surveys and make the most money.
You can save money and get cash back at the grocery store. Read my review and learn how to here.
Sign up for a website like Ebates where you can earn CASH BACK for just spending like how you normally would online. The service is free too! Plus, when you sign up through my link, you also receive a free $10 cash back too!
Save money on food. I recently joined $5 Meal Plan in order to help me eat at home more and cut my food spending. It’s only $5 a month and you get meal plans sent straight to you along with the exact shopping list you need in order to create the meals. Each meal costs around $2 per person or less. This allows you to save time because you won’t have to meal plan anymore, and it will save you money as well!
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The Federal Reserve hiked its benchmark lending rate this week for the seventh time this year, capping a year of intense pressure on the housing market that pushed mortgage rates above 7% for the first time since 2002.
But now that the Fed has signaled a softer approach to cooling the economy instead of rolling out bumper rate hikes, potential home buyers are left to wonder: Will mortgage rates come back down? Or have buyers missed their chance?
No one knows exactly where mortgage rates will go in the months ahead. But most experts agree that we have seen the end of 3% mortgages for some time.
Mortgage rates have run up so far and so fast this year that many would-be homebuyers can no longer afford to buy a home. At the end of 2022, when rates were at 3%, few predicted that just a year later rates around this week’s 6.33% would come as a relief, having dropped from over 7%.
After starting the year at an average 3.22%, according to Freddie Mac, the 30-year fixed-rate mortgage took off last spring as the Federal Reserve embarked on a historic campaign to battle decades-high inflation by raising interest rates. By fall, mortgage rates had more than doubled, eventually topping 7% in October. Rates have receded slightly in recent weeks, but loans are still expensive — especially compared to the historically low rates buyers were getting during the pandemic.
Home shoppers have watched their buying power evaporate, with higher rates adding hundreds of dollars onto what they would pay each month.
High mortgage rates remain the primary impediment to home buying, according to a recent buyer and seller sentiment survey conducted by Fannie Mae. Homebuying and home-selling sentiment are both significantly lower than they were last year.
Based on the survey, people in the real estate market continue to expect mortgage rates to rise but home prices to decline, said Doug Duncan, Fannie Mae senior vice president and chief economist.
He said he expects mortgage demand to be dampened by affordability challenges, while “homeowners with significantly lower-than-current mortgage rates may be discouraged from listing their property and potentially taking on a new, much higher mortgage rate.”
Is this the new normal?
While the Fed’s rate hikes are expected to continue, many analysts anticipate they will be smaller than the recent bout of three-quarter-point hikes and will start to taper off as inflation starts to cool, which should mean mortgage rates will likely come down too.
The Fed does not set the interest rates borrowers pay on mortgages directly. But its actions influence them. Mortgage rates tend to track the yield on 10-year US Treasury bonds, which move based on a combination of anticipation about the Fed’s actions, what the Fed actually does and investors’ reactions. When Treasury yields go up, so do mortgage rates; when they go down, mortgage rates tend to follow.
If rates do drop, just how low will they go?
“If inflation continues to decelerate over the next several months, mortgage rates will likely stabilize below 7%,” said Nadia Evangelou, senior economist and director of forecasting at the National Association of Realtors. “That’s still double the previous year’s rate, but it’s better than an 8% rate, which is the historical average for the 30-year fixed mortgage.”
Looking ahead, Melissa Cohn, regional vice president at William Raveis Mortgage, said buyers should expect rates to level off in 2023 around where they were in the years before the pandemic — around 4% or 5%.
“We had an active and healthy real estate market then,” she said.
But Cohn said she does not expect a “meaningful” decline in mortgage rates until the third or fourth quarter of 2023. “Mortgage rates will drop a bit in December, we’ll see a brief flurry of activity, but there are likely to be more increases in the new year.”
And don’t expect to see rates drop at the same speed at which they rose this year, she said.
“We have to remember mortgage rates come down much slower than they go up,” said Cohn. “Banks will want to see proof that rates are meaningfully coming down and not a one-shot wonder.”
The weekly swings in mortgage rates this year have been about three times the size of those seen in a typical year, said Danielle Hale, chief economist at Realtor.com. The Fed’s extra-large rate hikes aren’t the only thing causing that.
Economic uncertainty is creating a larger gap or “spread” between the 10-year Treasury yield and mortgage rates. Typically, mortgage rates are about two percentage points above the 10-year Treasury yield, but recently the gap has been wider.
The main driver of the widening spread is greater interest rate risk, according to a recent report from the Urban Institute.
“The uncertainty about the effects of Fed policy to date and about the trajectory of future policy has resulted in large movements in interest rates,” wrote Laurie Goodman and Michael Neal, the report’s authors.
Consumer mortgages are packaged and sold off to investors. The higher myeortgage rates are, the more money investors can make. But as rates fall, more homeowners will choose to prepay their mortgages or refinance, making the loans less attractive to investors.
“Volatility increases the level of mortgage rates, compared to Treasury rates, because of the prepayment option,” said Chester Spatt, professor of finance at Carnegie Mellon University’s Tepper School of Business. “If you’re in a new loan at 7% and rates go to 6%, you may choose to prepay and refinance into a lower rate.”
It is abnormal to have such a large spread, said Lawrence Yun, chief economist for NAR, adding that other times when the spread was wider were during the 2008 financial crisis and the early days of the pandemic.
“Hopefully this large spread will dissipate by the spring home buying season,” he said. “If so, maybe buyers will face mortgage rates in the 5’s.”
What buyers can expect
Lisa Sturtevant, chief economist at Bright MLS, a multiple listing service in the mid-Atlantic region, also expects mortgage rates to fall further in 2023, but she doesn’t expect them to drop quickly.
“We were in unprecedented territory with rates under 3%,” she said. “There is no reason to suggest we will be back there. But they will be down from where we’ve been.”
“Housing market activity will continue to be relatively sluggish — even if mortgage rates do begin to come down — since so many existing homeowners are locked into sub-3% loans and will still not be eager to move into a higher rate,” she said.
As a result, the inventory of available homes for sale will remain tight into 2023. In many markets this could guard against prices dropping by a significant amount.
“Prospective buyers may be tempted to try to ‘time’ rates to jump into the market when rates dip,” she said. “But timing rates is difficult.”
Instead, would-be buyers should shop around, getting quotes from multiple lenders, including different types like a large national bank, an online lender or a community bank or credit union.
“There is a lot of variability in rates, terms, and mortgage products in this changing market,” Sturtevant said. “It is more important than ever that buyers compare offers from different lenders to find the financing that works best for them.”
Balancing your checking account may seem like a task straight out of a bygone era, akin to winding a grandfather clock or sewing buttons onto a shirt.
However, the reality is quite different. It is an essential financial task, one that could help you dodge hefty overdraft charges, detect fraud early, and provide a true understanding of your spending patterns. So, let’s demystify this often misunderstood task.
The Importance of Balancing Your Checking Account
Regularly balancing your checking account is a cornerstone of sound money management. It’s not just about avoiding those pesky overdraft fees (though that is a significant bonus), it also provides invaluable insights into your spending habits. This will enable you to track your progress towards your money goals and make adjustments as necessary.
A balanced checkbook gives you a clear view of your financial accounts, showing you what’s going in, what’s going out, and most importantly, what’s left. By keeping track of all your transactions, you’ll be able to spot if a wrong amount has been deducted or if a direct deposit hasn’t been made. This can also help you to detect fraud at the earliest opportunity, helping to safeguard your hard-earned money.
Checking Account Basics: Understanding Key Terminologies and Concepts
To successfully balance your checking account, it’s crucial to comprehend the basic components of it. By understanding these terms, you’ll be better equipped to manage and reconcile your checking account.
Debit Card: Your bank will likely issue you a debit card that allows you to access the funds in your checking account electronically. When you make a purchase with your debit card, funds are withdrawn directly from your account. It’s important to keep track of all transactions made with your debit card to ensure your records accurately reflect your spending.
Pending Transactions: These are transactions that have been made but have not yet been fully processed by your bank. They are usually deducted from your available balance but may not be reflected in your current balance until the transaction has fully cleared.
Bank Balance: This is the amount of money in your checking account at any given time. It’s important to note that your bank balance can change frequently throughout the day as deposits and withdrawals are made.
Monthly Statement: This is a summary provided by your bank of all transactions into and out of your account over a particular period, typically a month. The monthly statement includes the dates and details of your transactions, the balance at the beginning and end of the period, and any charges incurred. It’s crucial to carefully review your monthly statement each month to identify any potential errors or fraudulent activity.
Automatic Payments: These are recurring payments set up to pay bills directly from your checking account. They are convenient for paying regular bills, such as utilities or subscriptions, but can lead to overdrafts if not properly accounted for in your balance.
Overdraft Fees: If you withdraw more money than you have available in your checking account, you’ll likely be charged an overdraft fee by your bank. Regularly balancing your checkbook can help you avoid these costly fees.
The tools you need for checkbook balancing can be as simple or as complex as you’d like them to be. The traditional approach involves using a paper checkbook register, a bank statement, a pen, and a calculator. But in our digital age, we have online and mobile banking tools at our disposal, and a host of other tools to make this process much simpler.
You might choose to use Google Sheets or another spreadsheet software to create a check register. You can also use mobile banking apps that provide real-time updates on your transactions, making it much easier to keep up with your account activity.
How to Balance Your Checking Account
So, how do you actually balance a checkbook? Here’s a step-by-step guide, using the traditional checkbook register method.
Step 1: Gathering Information
Start by gathering all your receipts, ATM slips, deposit slips, and bank statements. If you have access to online banking, make sure to check your account for any recent transactions that haven’t yet made it onto your paper statement.
Step 2: Recording Transactions
Write down every transaction in your checkbook register. This should include deposits, checks, debit card purchases, ATM withdrawals, bank fees, and any other financial transactions. Doing this ensures your records match your bank’s records, making it easier to detect any errors or discrepancies.
Step 3: Reconciling Your Check Register With Your Bank Statement
Review your bank statement for any additional charges or deposits that you might have missed. Make sure to update your check register with these transactions. Then, add up all the deposits, and subtract all the payments and withdrawals to calculate your checking account balance.
Step 4: Calculating Your Balance
The balance in your checkbook should match the current balance in your bank account. If they do not, you will need to check your calculations and go through each entry to identify any potential errors or discrepancies. This step helps you ensure the available balance matches your own records.
Step 5: Addressing Any Discrepancies
If the balances do not match, start by checking for common errors, such as transposing numbers or forgetting to record transactions. Check your receipts and the online banking portal to ensure you haven’t missed any transactions. If you find any transactions posted to your account that you did not authorize, contact your bank immediately.
Regular Maintenance and Good Habits
Balancing your checkbook is not a one-time activity. It’s a habit that needs to be developed and maintained. Aim to do this at least once a month when your bank statement arrives. For those who frequently use their debit cards, write checks, or have a lot of automated payments, weekly check-ins might be beneficial to ensure all transactions are recorded correctly.
Maintaining a balanced checkbook may also prevent you from spending more than what’s available, thereby avoiding overdraft charges. It also helps in tracking your spending habits and understanding your spending patterns, which can be instrumental in managing financial matters.
The Role of Technology in Balancing Your Checking Account
In our digital age, technology plays a significant role in simplifying the process of balancing checking accounts. Online and mobile banking apps provide a real-time view of your account, enabling you to check your current balance, deposit checks, and monitor transactions from anywhere, at any time. This gives you the flexibility to manage your financial tasks on the go, reducing the time and effort required for this task.
On the other hand, it’s crucial to understand that while these apps are incredibly handy, they should not replace the practice of keeping your own records. The balance shown on these apps might not reflect pending transactions or paper checks that haven’t cleared yet.
Conclusion
Balancing your checking account is an essential component of sound financial management. It’s not just about avoiding fees and detecting potential fraud. It’s about taking control of your money and understanding how you’re using it. With the right tools and a bit of discipline, you can make this task part of your regular financial routine.
Frequently Asked Questions
How often should I balance my checkbook?
It’s generally recommended to balance your checkbook once a month. However, if you frequently use your debit card or have numerous automatic payments, you might want to consider balancing your account on a weekly basis. Regularly keeping track of your financial transactions will help you avoid errors and keep a close eye on your spending habits.
Is it safe to balance my checkbook online?
Online and mobile banking apps are generally safe to use. Most banks provide strong encryption and security measures to protect your data. However, always ensure you’re using a secure network when accessing your bank account online and update your apps regularly to get the latest security features.
What should I do if I find a fraudulent transaction in my account?
If you notice a transaction that you did not authorize, you should report it to your bank immediately. Most banks have policies in place to protect customers from fraud, and you may not be responsible for any fraudulent charges if they’re reported in a timely manner.
What’s the difference between my current balance and my available balance?
Your current balance is the total amount in your account at the start of the business day. This includes all transactions, like deposits and withdrawals, that have been posted to your account. On the other hand, your available balance is your current balance minus any holds (like pending transactions).
How can I avoid overdraft fees?
One way to avoid overdraft fees is by keeping an accurate record of all your transactions. By knowing exactly how much money is in your account at all times, you can avoid spending more than what’s available. Some banks also offer overdraft protection services that link your checking account to a savings account or credit card to cover any overdrafts.
How can balancing my checkbook help with my budget?
Balancing your checkbook gives you a clear understanding of how much money is coming in and going out of your account. This can help you identify spending patterns, prioritize your spending, and set realistic budgets.
I rarely write checks. Do I still need to balance my checkbook?
Yes, even if you don’t write checks, balancing your checkbook is still essential. Any type of transaction, be it debit card transactions, automatic payments, or ATM withdrawals, can cause discrepancies in your account balance. By balancing your checkbook, you can ensure that your account has the correct balance and catch any errors or fraudulent transactions.
I’ve made a mistake and my account is overdrawn. What should I do?
If you realize that you’ve made a mistake and your account is overdrawn, it’s important to address it as quickly as possible. Deposit money into your account to cover the overdraft and any associated fees. Then, review your recent transactions to understand what led to the overdraft and how you can avoid it in the future.
Long, long ago, in a mystical forest with good Wi-Fi, Goldilocks opened an investing account with $3,000 to invest.
At first, she considered pouring more money into her retirement accounts (which only holds mutual fund investments). But her Roth IRA was already maxed out for the year. Moreover, she knew that she would need this money sooner than age 65.
“Too cold!” she said.
Next, she considered investing in individual stocks. But even though she’d done her due diligence, she knew that investing in individual securities can be very risky. She didn’t need to become a millionaire overnight – she just wanted to make enough money to buy a cottage in a few years.
“Too hot!” she said.
Finally, she began browsing ETFs. ETFs are generally more stable, diverse, and safe investments than individual stocks, but they’re also more accessible than your retirement account.
“Juuuuust right!” she said aloud.
10 years later, Goldilocks’ investment had paid off – thanks to a steady 10% APY, her $3,000 investment had become nearly $8,000, so she was finally able to pay restitution and legal fees to the family of bears down the way.
Thanks to inherent diversity and steady returns, ETFs are a great place to stash a few grand to help you save for a big expense years or decades down the line.
What’s Ahead:
Large-cap stock ETFs
Large-cap ETFs typically bundle together blue-chip stocks or even an entire index, providing steady, sizeable returns. Warren Buffet once famously said:
“I just think that the best thing to do is buy 90% in S&P 500 index fund.”
So I’ve included two such options on the list.
You’ll also see a lot of Vanguard funds on this list because, well, they’re just awesome all the way around. Vanguard funds are extremely popular among investors because they combine industry-leading returns with incredibly low expense ratios.
ETF
Symbol
Fund info
Expense ratio
Schwab US Large-Cap Growth ETF™
SCHG
The fund’s goal is to track as closely as possible, before fees and expenses, the total return of the Dow Jones U.S. Large-Cap Growth Total Stock Market Index.
0.04%
SPDR S&P 500 ETF
SPY
The SPDR® S&P 500® ETF Trust seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the S&P 500® Index (the “Index”).
0.0945%
Vanguard S&P 500 ETF
VOO
The Vanguard S&P 500 ETF invests in stocks in the S&P 500 Index, representing 500 of the largest U.S. companies.
0.03%
Vanguard Russell 1000 Growth ETF
VONG
The investment seeks to track the performance of the Russell 1000® Growth Index. The index is designed to measure the performance of large-capitalization growth stocks in the United States.
0.08%
Mid-cap stock ETFs
Goldilocks’ choice – mid-cap ETFs – bundle together companies that have an exciting growth curve before them, but are established enough not to fold overnight.
If you can tolerate a little more risk in exchange for higher potential returns than an index fund, consider these top picks:
ETF
Symbol
Fund info
Expense ratio
Vanguard Mid-Cap Growth ETF
VOT
VOT seeks to track the performance of the CRSP US Mid Cap Growth Index, which measures the investment return of mid-capitalization growth stocks.
0.07%
iShares Core S&P Mid-Cap ETF
IJF
IJF seeks to track the investment results of an index composed of mid-capitalization U.S. equities.
0.05%
Vanguard Mid-Cap ETF
VO
VO seeks to track the performance of the CRSP US Mid Cap Index, which measures the investment return of mid-capitalization stocks.
0.04%
Schwab U.S. Mid-Cap ETF
SCHM
SCHM’s goal is to track as closely as possible, before fees and expenses, the total return of the Dow Jones U.S. Mid-Cap Total Stock Market Index.
0.04%
Small-cap stock ETFs
If you’ve looked at your asset portfolio recently and thought “hmm… needs a little more spice,” then a small-cap ETF might add just the right amount of kick.
These ETFs track small companies with big potential, so they present higher risk but higher potential reward than large- or mid-cap ETFs.
ETF
Symbol
Fund info
Expense ratio
Vanguard S&P Small-Cap 600 Growth ETF
VIOG
VIOG employs an indexing investment approach designed to track the performance of the S&P SmallCap 600® Growth Index, which represents the growth companies, as determined by the index sponsor, of the S&P SmallCap 600 Index.
0.15%
Vanguard Small-Cap ETF
VB
VB seeks to track the performance of the CRSP US Small Cap Index, which measures the investment return of small-capitalization stocks.
0.05%
iShares Core S&P Small-Cap ETF
IJR
IJR seeks to track the investment results of an index composed of small-capitalization U.S. equities.
0.06%
Schwab U.S. Small-Cap ETF
SCHA
SCHA’s goal is to track as closely as possible, before fees and expenses, the total return of the Dow Jones U.S. Small-Cap Total Stock Market Index.
0.04%
International stock ETFs
ETF
Symbol
Fund info
Expense ratio
Vanguard Emerging Markets ETF
VWO
VWO invests in stocks of companies located in emerging markets around the world, such as China, Brazil, Taiwan, and South Africa.
0.10%
Vanguard Total International Stock ETF
VXUS
VXUS seeks to track the performance of the FTSE Global All Cap ex US Index, which measures the investment return of stocks issued by companies located outside the United States.
0.08%
SPDR® MSCI EAFE Fossil Fuel Free ETF
EFAX
EFAX seeks to offer climate-conscious investors exposure to international equities while limiting exposure to companies owning fossil fuel reserves.
0.20%
Vanguard FTSE Developed Markets ETF
VEA
VEA provides a convenient way to match the performance of a diversified group of stocks of large-, mid-, and small-cap companies located in Canada and the major markets of Europe and the Pacific region.
0.05%
Fixed income ETFs
ETF
Symbol
Fund info
Expense ratio
iShares Core U.S. Aggregate Bond ETF
AGG
AGG seeks to track the investment results of an index composed of the total U.S. investment-grade bond market.
0.05%
Vanguard Total Bond Market ETF
BND
BND’s investment objective is to seek to track the performance of a broad, market-weighted bond index.
0.035%
Vanguard Intermediate-Term Corporate Bond ETF
VCIT
VCIT seeks to provide a moderate and sustainable level of current income by investing primarily in high-quality (investment-grade) corporate bonds.
0.05%
Schwab 1-5 Year Corporate Bond ETF
SCHJ
SCHJ’s goal is to track as closely as possible, before fees and expenses, the total return of an index that measures the performance of the short-term U.S. corporate bond market.
0.05%
What does large-cap, mid-cap, etc. mean?
To start, “cap” refers to market capitalization, or the total value of a company’s shares on the market. For example, if a company has 1 million shares on the market valued at $10 a pop, their market cap would be $10 million.
Large-cap ETFs are comprised of companies each with a market cap of $10 billion or higher. The Vanguard Mega Cap ETF (MGC), for example, contains around 250 of the biggest companies in the USA, from Amazon to Apple. Since they’re often full of blue-chip stocks that provide slow-but-steady returns, large-cap ETFs are considered a safe, long-term investment.
Mid-cap ETFsare comprised of companies each with a market cap in the $2 to $10 billion range. All ETFs are designed to succeed and make money, so mid-cap ETFs are filled with midsized companies that are in the middle of their “growth curve,” so to speak – they’re high-performing, high-potential companies that may become the next blue-chip, so mid-cap ETFs balance risk and reward.
Small-cap ETFsare comprised of companies each with a market cap of “just” $300 million to $2 billion. Fund managers who design small-cap ETFs cast a wide net, aiming to scoop up “the next big thing.” As a result, these ETFs have higher growth potential than most ETFs, but also steeper downside if the smaller companies within end up folding.
International ETFsare, as the name so subtly hints, full of non-U.S. stocks and securities. There are country-specific ETFs, foreign industry ETFs (think non-U.S. automotive stocks), and even ETFs representing emerging markets like sub-Saharan Africa and Brazil.
Fixed income ETFs, aka bond ETFs, give you access to diverse bond investments. For the uninitiated, bonds are like loans you make to companies or governments that they pay back with interest. You can read more about bonds here, but the bottom line is this: fixed-income ETFs provide steady income in the form of dividends, so they’re a good choice if you want a safe investment that gives you a paycheck!
Read more:How To Invest In ETFs
Which type of ETF is right for you?
Well, it depends on both your goals and your risk tolerance.
If you can tolerate some risk in your portfolio, and want your ETF investment to pay off sooner than later (within five years), you may want to consider small-cap and mid-cap ETFs. They’re riskier, but have higher upside potential.
If you’re looking for a safer investment that will multiply your money over a longer horizon (5+ years), a large-cap ETF is probably a fit.
If you’d like your ETF investment to provide a trickle of cashback each month, fixed income ETFs are probably your best bet.
And finally, if you don’t mind doing a little research or believe strongly in the economic performance of a foreign market, you’ll be a fan of international ETFs.
Read more: How To Determine Your Investing Risk Tolerance
About our criteria
With hundreds of commission-free ETFs available, how did these become the winners?
To make this list, ETFs had to impress in all of the following categories:
Earnings potential.Naturally, the first thing looked at was the ETF’s performance over the past five years. A good sign of a healthy ETF is how quickly it bounced back in Q3 2020 after the market panic surrounding the COVID-19 pandemic. Springboarding back and surpassing Q1 levels are a sign of investor confidence, and helped solidify the ETF’s place on this list.
Expense ratio.Next, I looked at the ETF’s expense ratio. Your expense ratio is the percentage of your investment you pay to the fund manager for having shares of the ETF. Although measured in fractions of a percent, expense ratios make a difference – 0.80% of $10,000 is $80 and 0.04% is just $4, so ETFs with an expense ratio below 0.20% were favored.
Fund reputation. You’ll see a lot of repeated names on this list because funds like Schwab, BlackRock (iShares), and especially Vanguard have a proven track record of building well-crafted, reliable ETFs with low expense ratios. Fund reputation matters in the long run because big funds attract big money, which helps to generate higher returns for you!
Solid fundamentals.ETFs aren’t just random grab bags of stock and securities – each one is a carefully curated list, with selection criteria driven by both AI and human logic. There are some wacky and unique ETFs out there – such as Millennial ETFs and Space ETFs – and I’ll cover more of them in an upcoming piece. But this list isn’t for the experimental, exciting stuff – it’s for safe, dare I say boring, places to stash and multiply your savings.
Conscious investing.Finally, this was more of a small thing in the back of my mind, but I wanted each ETF on this list to score average or above average for “conscious capitalism.” No fossil fuels, no sin stocks (learn more about sin stocks here) – and not just because it’s not the way of the future, but because investments in conscious capitalism generally outperform “sinful” investments in the long term.
Commission-free ETFs solve a big problem for young investors
Commission-free ETFs aren’t just great because they’re cheap – they actually solve a pretty serious problem plaguing young ETF investors.
You see, ETFs have heftier commissions and trade fees than stocks because ETFs can be resource-intensive to create. Let’s say you’re a fund manager and you have an idea for an ETF. The process to get your ETF approved by the SEC isn’t unlike getting your new drug approved by the FDA; you have to research a ton, understand the risks, and propose your ETF to the government.
Once your ETF is approved and available, you probably want some additional compensation for your work beyond just capital gains from your ETF.
You don’t want to charge a high percentage trade fee, because big-ticket investors will be turned off. So, instead, you charge a $10 to $20 fee per trade of your ETF.
Big-ticket investors who drop $50,000 on a trade couldn’t care less about a $20 fee, since that represents just 0.04% of their investment. But if you’re a young investor, investing maybe $50 to $100 out of each monthly paycheck, a $20 per-trade fee is way too high – basically pricing us out of ETF investing. 🙁
Thankfully, many brokerages have realized that their per-trade fees are too high for young investors and have eliminated commissions on trades of certain ETFs. At first, funds like Vanguard and Fidelity only let you trade commission-free on their own platforms, but now, they’ve expanded their commission-free goodness to wide platforms like J. P. Morgan Self-Directed Investing.
And it’s not just the junk ETFs that get traded commission-free – in fact, it’s often quite the opposite. Firms like Vanguard and Fidelity will let you trade their most successful ETFs for free – presumably because they don’t really need the commission.
Disclosure – INVESTMENT AND INSURANCE PRODUCTS ARE: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
Summary
If you’re looking for an investment vehicle falling somewhere between your boring retirement account and your exciting individual stock purchases, ETFs are an excellent choice. And now that the big funds are waiving commissions on their top-performing ETFs, there’s never been a better time to dive into the world of ETFs and inject some low- to mid-risk into your portfolio.
ETFs are also an excellent investment if you’re looking to multiply your money and cash out within 2 to 10 years. You can even leave your ETF investment until retirement, if you want, so it has plenty of time to multiply under compound interest.
Not all ETFs are made the same, however – and the SEC has approved some stinkers over the years, for sure. These ETFs, on the other hand, are universally considered top-ranked and well-supported within the investor community – and are a superb place to start.
Inside: A biweekly budget is a budget that is broken into two-week periods. Learn how to create biweekly budgets and download your free template.
Many people create budgets, but only a few budget on a biweekly basis.
That is an interesting statistic because 43% of Americans are paid on a biweekly pay period (source).
So, the thought process is more people should be interested in learning knowing how to create a biweekly budget. But, in reality, most people give up on budgeting or move to a budget-by-paycheck method.
Recently, we moved over to a biweekly pay period. And thus, we quickly had to change how we focused on budgeting.
While most financial bloggers and gurus would agree, budgeting with biweekly paychecks makes the whole concept of budgeting hard.
While biweekly budgeting isn’t easy, it can be done!
This post will show you how to create an easy-to-manage and effective biweekly budget so that you can conquer your financial goals in the most efficient way possible!
We will go through the exact steps I use to create a biweekly budget to cover two weeks’ worth of expenses, get one month ahead on your bills, or adjust your planning to cover your monthly expenses.
This is a basic example, and you should use your own personal situation when developing your own budget.
Do you struggle to keep your finances on track? If so, here are some tips for creating a biweekly budget.
What is a biweekly budget?
A biweekly budget is a budget that takes into account a person collecting a paycheck every 14 days. This type of budget is beneficial for those who are paid on a biweekly schedule, as it allows them to plan their spending more effectively.
However, many people find it difficult when bills are due on a monthly basis.
Difference between biweekly and semi-monthly paychecks
When receiving paychecks twice a month happens with two types of pay schedules either biweekly or twice-per-month. The difference between these two schedules is the number of checks per year.
Those who are paid biweekly receive 26 checks per year, while those who are paid twice-per-month receive 24 checks per year.
Making a budget on a biweekly income can be difficult because the total number of checks received in a year varies depending on the pay schedule you have.
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How does a biweekly budget work?
A biweekly budget divides your budget into two parts, one for each paycheck that is received. This can be helpful for those who want to better track their spending or for those who want to save money.
It can be helpful to think of your biweekly budget as two separate budgets – one for bills and one for everything else.
When you create a biweekly budget, you are essentially creating two budgets over the span of ten months. Then, in the other two months, you will receive three paychecks; thus, need to create three budgets.
Since many monthly expenses remain the same when switching from a month budget to a biweekly budget, knowing which expenses should be increased or decreased beforehand can make the process smoother.
Additionally, it is helpful to know how much money you will need for each check. That way, you won’t have to worry about bouncing checks or accidentally overdrawing your account.
How to create a biweekly budget
Creating a biweekly budget is a great way to start getting your finances in order. You can either create your own template or use one of the many templates that are available online for free.
One popular template is ours!
Money Bliss Biweekly Budget Template (see below to get your copy). This template is available as a free download and can be used in conjunction with our budget binder. The planner allows you to track your income and expenses, as well as financial documents such as bills and bank statements.
There are a few key things to keep in mind when creating a biweekly budget:
Adjust your budget as needed.
Be flexible when adjusting to this 2 week budget style.
Compare your regular expenses to your spending from the past month.
Now, here are the steps to creating a biweekly budget that works.
Step 1: Print out a calendar
You need to print out the dates you get paid from your employer. On the biweekly paycheck, Fridays are usually pay dates; you just need to know which Fridays!
So, print out a blank calendar. Write down when you get paid along with when your bills and expenses are due.
This will help you get an idea of where you are spending your money and where you can cut back.
Many people find it helpful to color code by category and add stickers. This will help you see your budget at a glance.
Step 2: Put in a buffer
This will help ensure that you don’t have to worry about going into debt if something unexpected comes up.
Ideally, you should try to save at least two weeks’ worth of living expenses so that you know you’ll be able to cover your costs even if something goes wrong.
For us, all of our income goes into an “income checking” account. Then, at the beginning of the month, we transfer money into our “bills checking” to cover our expenses for the month.
Then, we always have at least one month of expenses on hand – just in case.
Step 3: Organize expenses
The easiest way to do this is by category. There are a few different ways to categorize your expenses, but the most common are:
Fixed or recurring expenses: These are expenses that happen every month, like rent or utilities
Variable or occasional expenses: These are expenses that happen each month but vary in amount, like groceries or entertainment
Annual or quarterly expenses: These costs are less frequent, but take a good chunk of your budget like an annual insurance payment or kid’s sports fees
One-time only expenses: These are one-time only costs and you don’t anticipate them again.
For most people, the struggle happens when organizing expenses. The expenses you “forgot” about are what blow your budget. Honestly, these are not forgotten expenses – just something you forgot to plan for.
Step 4: Focus on Zero Based Budgeting
Additionally, it’s important to use a zero-based budgeting approach.
With this method, you start by assigning every penny of income a job, whether it be for rent, groceries, or savings. This way, you can make sure that you’re not overspending each month.
A zero-based budget is a type of budget that starts with the assumption that there is nothing in your bank account.
This includes both predictable and unpredictable costs.
In the next steps, you will lay out what paycheck will cover what bills.
For example, some costs, like your rent or mortgage payment, will likely stay the same from one biweekly period to the next. By taking into account both types of expenses, you can get a more accurate picture of how much money you will need each pay period.
Learn more about zero based budgeting.
Step 5: Write your first biweekly budget
Writing a biweekly budget is the first step to creating financial stability. It’s important that you set up a plan for each paycheck to make sure your bills get paid.
When creating your first biweekly zero-based budget, you’ll want to start by paying your immediate obligations. This includes any bills or fixed expenses like rent or car payments that are due during the first pay period. After that, focus on covering your variable expenses such as groceries, gas, or eating out.
To make sure every dollar has a job, you should consider these tips:
If you have any leftover money at the end of the month, send it to your savings or make extra debt payments.
Make sure that each category in your budget has a specific amount assigned to it.
Keep track of your spending so that you can stay on track and adjust as needed.
Paying your most important bills first is a crucial step in making sure that your finances are on track.
Step 6: Write Your second biweekly budget
The second biweekly budget is a budget that’s typically created for the 2nd paycheck of the month. This budget would cover the next two weeks and may need to cover expenses at the beginning of next month before you get paid again.
Just like creating a budget plan for the 1st paycheck, you will do the same again. Prioritize any fixed expenses first, then add in variable expenses or sinking funds to contribute to.
In order to make your budget as accurate as possible, you should account for fluctuations in your expenses. This is where the buffer comes in – you put a certain amount of money aside each month to cover any unexpected costs. Then, you can start planning for them in the upcoming months.
Once again, if you have leftover money after budgeting for the two weeks, you can either send it to your savings account or start paying down your debt. If you choose to save, make sure that the money is in a place where it will earn interest and grow over time. If you choose to pay down debt, make sure that the payments are more than the minimum amount due so that you can see results quickly.
Step 7: Start tracking
Now that you have your biweekly budget template set up, it’s time to start filling in the numbers and track your budget. This part can be a little tricky, but with a little effort, you’ll be able to save money and get ahead on your debt payments.
First, take a look at your income and expenses for the month. How does this compare to what you’ve budgeted? If you’re coming in under budget in some areas, great! You can either use this extra money to bolster your savings or make extra debt payments. However, if you’re over budget in some areas, don’t worry – we’ll work through that below.
Next, take a look at your sinking funds.
These are accounts where you save money each month to cover specific expenses. How much money do you need to save each month in order to cover your bills? If you’re not sure, take a look at your past bills and use that as a guide. Once you know how much money you need to save, divide it by two and put that amount into your biweekly budget.
This will help ensure that you always have the money you need saved when the bill comes due.
If you have any leftover money after filling in your budget, send it to savings or make extra debt payments.
You can also use this extra money to invest in yourself (by taking classes, for example), but be careful not to overspend!
Creating and sticking to a biweekly budget is a great way to start saving money and getting your finances under control.
Biweekly budgeting tips
When it comes to budgeting, biweekly budgets can be a helpful way to streamline the process. By taking an hour or so at the beginning of each month to set up your budget, you can avoid potential headaches down the road.
It’s also important to remember to write everything down! This includes both fixed and variable expenses.
Tip #1 – Change Due Dates of Bills
If you’re having trouble with your bills, don’t hesitate to call companies and ask them to change the due dates.
This is something I do whenever I open a new credit card. I want the credit card date to close at the end of the month.
Tip #2 – Age Your Money
You may also want to save up for one month’s worth of expenses so that you always have a cushion in case something unexpected comes up.
This is also the first step to stop living paycheck to paycheck.
When you have a cushion of savings, you’re less likely to fall into debt if something unexpected happens.
Tip #3 – Track Your 2 Week Budget
There are plenty of tools for budgeting out there. In fact, here are the best budgeting apps available.
It offers a variety of helpful tips for getting started, as well as ways to automate time-consuming tasks. With this tool, you’ll be able to improve your budgeting and financial insights in no time!
Many popular options include a budgeting app, Excel, or Google Sheets. Pick what works best for you
Tip #4 – Focus on Your Goals & Finances
In order to be successful, you’ll need to set financial goals for yourself and make plans to achieve them.
As with any other goal, it’s easier said than done! It can take a lot of time, work, and effort to reach your goal.
If you’re not sure where to begin or what goals are right for you, here are some examples:
This is just a sample of the types of goals you can set. If you’re not sure where to start, just think about what’s important to you and your family.
What are some financial goals that you have? Write down your goals and make a plan to achieve them.
What to avoid when you’re paid biweekly
When you’re paid biweekly, there are a few things you should avoid in order to make the most of your money.
You need to learn which payment type is best if you are trying to stick to a budget.
Since biweekly budgeting can be more difficult, you need to know the pitfalls to avoid.
Pitfall #1 – Spending All your Money Too Quick
First, don’t spend your money as soon as you get it. This will leave you with nothing left for the following two weeks.
When having to use one paycheck to cover most of your big expenses like mortgage/rent or insurance, that leaves very little money for groceries or gas
Try to have a savings goal and save for that.
For example, don’t wait until the end of the month to spend all your money. This can help you save more money and have something left over at the end of the month.
Pitfall #2 – Forgetting Bills
Second, don’t forget to budget for bills and other expenses. Make sure you have enough money to cover your costs, especially those non-frequent bills like car registration.
By doing this, you’ll be able to ensure that you have enough money each week to cover what you need.
Pitful # 3 – Quit Bi-Weekly Budget Completely
Yep, I get it budgeting your paycheck over a 2-week budget is difficult. It may feel like pushing a square through a circle. It takes a different mindset and a little more planning to make it happen.
If anything, try to avoid impulse buys. Wait until the next paycheck and see if you still want the purchase. That will help you not to overspend on unnecessary items.
What to do when you have a third paycheck?
This is the BEST benefit of a biweekly paycheck. Twice a year, you will receive 3 paychecks in a month instead of just two.
Looking forward to having a third paycheck, you can either save it or spend it.
If you save it, you can use it as a down payment on a house or invest it in a retirement fund. If you spend it, you can use it to pay down debt, remodel a house, buy a new-to-you car, or go on a vacation.
There are a few things you can do when you have an extra paycheck:
Use it to pay down debt: If you have high-interest debts, using your third paycheck to pay them off can save you a lot of money in the long run.
Invest it: If you’re comfortable with taking on some risk, investing your extra paycheck could lead to bigger returns down the road.
Sinking Funds: Those yearly expenses can weigh heavily on your budget. So, set extra money aside for those payments.
Put the money towards your goals: Whatever your ambition is, here is money to help you get there faster.
Spend it on something fun: Obviously, this isn’t the smartest option, but if you’ve been working hard and deserve a little treat, go for it!
Just make sure that you’re not spending more than you can afford.
Free Printable Bi weekly Budget Templates
There are a number of different printable 2 week budget templates that can help you get your finances in order. Most of them are simple and easy-to-use, and they’re not scary to look at. In addition, many of them have templates that you can download and/or punch holes into so that you can use them as binders or notebooks.
One great option is the budget tracking worksheet. This cute template is simple yet effective, and it will help you track your spending each month.
How do you make a monthly budget with biweekly pay?
There are a couple of ways to make a monthly budget if you receive biweekly paychecks. You can either budget by paycheck, divide out your expenses between biweekly paychecks, or focus on a monthly budget.
If you choose to budget by paycheck, you’ll create a new budget for each pay period and then stick to it. This method gives you a better understanding of the flow of money in your bank account and will help you keep track of your bills more carefully.
The other option is to budget monthly, which is for people who live paycheck to paycheck. In this case, you would budget off 24 paychecks and make plans for your two budget paychecks. Then, two of your paychecks would be budgeted for the monthly budget.
However, many people argue the Budget-By-Paycheck method can help reduce stress since it allows for more flexibility.
In either case, it’s important that you track your spending throughout the month so that you can make adjustments as needed.
Time to Create Your Bi weekly Budget Calendar
This budget will be a little more complicated than your monthly budget because your paychecks are not always going to be paid on the same day of the month. However, most of your bills are usually fixed and don’t change from month to month.
So, you need to plot out which bills you will pay with each paycheck ahead of time in order to make sure you have enough money to pay them all and keep them organized.
It is important to remember that when creating your budget, you need to give yourself some grace to make sure it works for you while you work on perfecting your budgeting style.
For us, having a buffer of money in our “income checking” account takes away the stress of bills and anxiety that we will run out of money. We understand that we need to use sinking funds for those variable expenses.
However, it is important to note that a biweekly budget tends to forget events such as birthdays or vacations from being considered in spending plans. So, make sure to include them.
Now that you have a good idea of how much money you make and how much money you need to live comfortably, it’s time to start creating your biweekly budget.
Also, taking time to understand your personal financial statement is important.
From all of the free and paid budgeting apps, here are our top budgeting apps to check out!
This section may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. Please read the full disclosure below.
Personal Capital Advisors Corporation (“PCAC”) compensates Money Bliss (“Company”) for new leads. (“Company”) is not an investment client of PCAC.
Personal finance and money management software allows you to manage spending, create monthly budgets, track investments, retirement and more.
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Last Updated: May 25, 2023 BY Michelle Schroeder-Gardner – 65 Comments
Disclosure: This post may contain affiliate links, meaning I get a commission if you decide to make a purchase through my links, at no cost to you. Please read my disclosure for more info.
Paying off debt is hard work. If paying off debt wasn’t hard, then everyone would be doing it.
You may come across many challenges, you may feel tired, and at points you may even feel defeated.
There are many things that may weigh you down when paying off debt. While thinking about this may seem negative, I think that today’s post can help you overcome difficulties that you may experience.
Instead of letting challenges that you face completely stop you from moving forward, you should know that many of the obstacles you come across are things that you can push past and move on from.
Too many stop their debt payoff journey because they feel as though there are no other solutions, that they are the only ones going through the process, and so on. However, that’s not true. Keep trying because you won’t get any closer to your goals if you stop now!
Plus, paying off debt is all worth it.
It may take a long amount of time and a lot of hard work, but try to remember that you can still have fun on a lower budget.
Below are some of the feelings you may experience when paying off debt and what you can do to change it around.
You may feel tired.
While you may feel tired of paying off debt right now, you need to remember that you won’t always feel this way and that it will all be worth it later.
Eventually, you will be able to get more sleep and you will be able to sleep better knowing that you won’t have debt hanging over your life.
The articles below may help you so that you are more motivated about paying off debt:
You may have to make sacrifices.
Sacrifices may need to be made when paying off debt. You may have to change your spending behaviors, avoid places like the mall, cut your expenses, and more.
While it may seem tough, especially in the beginning, it will get easier over time. If you fell into debt in the first place because your spending was out of control, then it may be even harder due to the fact that you may be used to spending more than you have.
However, that doesn’t mean that cutting back is impossible.
I recommend bookmarking your favorite debt blogs and podcasts, going on a no spend challenge, redoing your budget, looking for ways to make more money, and more.
Related:
You may be bored.
This is a feeling that many end up experiencing, but don’t let this one get you! There are many ways to have a great time on a low budget – even if you have no budget for fun at all.
You can take part in free events and festivals around your area, head outside for a hike, walk, jog, etc., go to your local library, use coupons, and more. Find more ideas at How To Have Frugal Fun.
You may feel like keeping up with the Joneses.
One thing that many find hard about paying off debt is that everyone around them is most likely still spending a lot of money.
It can be very tempting to stop your debt payoff journey and keep up with the Joneses around you. You may feel jealous and wonder why others can spend money when you cannot.
Well, looks can be deceiving. You don’t know what kind of financial situation that the other person is in. They may have more debt than you do!
There is no need to spend just to spend. You should make purchases that you actually want to make.
Next time you feel like you should spend money for no reason, you should stop and think about what’s actually bugging you and if you truly believe that spending money will cure whatever problem you are dealing with.
Paying off debt is all worth it.
Paying off debt can have many positives.
I paid off my student loan debt quickly and while it was extremely tiring, I wouldn’t change it for the world. There were many sleepless nights, 100 hour work weeks, and more, but I always reminded myself that this wouldn’t last forever and that it would be 100% worth it in the end.
There are many positives of paying off your debt. These include:
Happiness. No longer having debt means that you’ll have more money in your pocket. That makes everyone happy, right?!
No longer living paycheck to paycheck. By eliminating your debt, you will hopefully have learned better money management skill which will then allow you to start saving for other things in life such as retirement.
Feeling in control. Debt can make a person feel like they are controlled by lenders. By getting rid of debt, you will feel much more in control of your life and your financial situation.
How do you feel when you’re paying off debt? What do you do to remain positive? How do you think debt free life will be for you?
Is fear stopping you from starting a new business or side hustle?
Almost every day, I receive an email that goes something like this: “I am afraid to start my side hustle and put myself out there. How do I get over this fear?”
This is a common fear for anyone starting something new.
Today, I am interviewing my friend Christine on ways to overcome your fears when starting a new side hustle or business. Plus, I ask her other mindset and productivity questions I often hear.
Christine is a former full-time blogger turned certified life coach, freelance writer, and online marketer. She has tried a variety of side hustles and online businesses, and she is here today to share helpful advice to get you started with your business or side hustle. Christine is also the creator of The Harbor, a life coaching monthly membership specifically for online entrepreneurs.
Some of the questions I ask her include:
How can a person decide if a side hustle or business is for them?
How can someone get over their fears of starting a business and actually begin?
What’s the best planning method for productivity?
How can entrepreneurs create better work-life balance?
How can someone stop being overwhelmed when starting a new business?
What do you think a person should do if they are feeling burnout from their side hustle or business?
And more!
Starting a new business or side hustle can lead to many questions and fears, which can prevent people from pursuing their dreams and finding ways to make money.
With today’s article, you will learn how to overcome your fears and take the necessary steps towards starting a successful business or side hustle.
Please enjoy this interview.
Mindset and Productivity Tips For Starting A New Business
Please give us a little background on yourself and what led you to become a coach.
After college, I was stuck in jobs that paid barely above minimum wage. I didn’t have any valuable work experience or skills. And shockingly, my arts degree was not a money maker 😅.
Eventually, I started blogging on the weekends as a creative outlet from my soul-sucking full-time job. I eventually was able to replace my full-time job income (Thanks in part to your Making Sense of Affiliate Marketing course! I enrolled when you first launched it).
I spent four years as a full-time blogger and as my blog and I each grew and evolved, I started to feel ready for a change. My blog provided a lot of step-by-step, actionable advice. I saw over and over again that my readers weren’t creating lasting change in their lives because there wasn’t a deeper mindset shift.
This is what led me to pursue coaching. I wanted to learn how to help people use their minds to create lasting change in their lives.
Instead of keeping my blog and transitioning it to this new niche, I decided to sell it, give myself time to immerse myself in an amazing coach certification program, and start fresh with a brand new coaching business.
What side hustles and online businesses have you tried in the past?
I often feel like there’s not much I haven’t done!
I tried my hand at proofreading but realized it wasn’t for me. I’ve created low-content journals for Amazon KDP (super fun!). I’ve just barely scratched the surface of selling Canva templates on Etsy.
With my blog I pursued many forms of income:
Because of my blogging experience, I’ve been able to do some amazing side hustles.
I’ve done a good amount of freelance writing. This has been a good income source for me. However, I find it quite mentally taxing, so I can’t do a large amount of it.
I still have a few very part-time virtual assistant clients. I enjoy the variety of virtual assistant work and getting a peek into how other people run their online businesses. Plus, the pay is good!
I also do marketing work for a mid-sized literary company.
Because I was a one-woman show and did everything myself as I built my successful blog, I’ve found that I have a lot of valuable skills! My successful side hustles have come because of my blogging background.
What do your thoughts and emotions have to do with making money?
Everything! If you want to make money, learning to manage your thoughts and emotions is extremely important. Especially for side hustlers and entrepreneurs.
Here’s how our lives basically work:
Our thoughts create our emotions. Based on our emotions, we take action (or don’t). Our actions create the results we have in our lives. In this case, the result would be making money (or not).
Thought ➡️ Emotion ➡️ Actions ➡️ Result
When we talk about making money, we’re usually focused on our actions and results, right? But our actions are created based on our thoughts and emotions.
So! An example:
You want to send a series of three sales emails to your list to make money. Making money is the result that you want.
If your thoughts are things like: I don’t want to bother people, people will think I’m pushy, or tons of people will unsubscribe, you’ll probably feel timid.
When you feel timid, what actions do you think you’ll take? You might procrastinate, send one email instead of three, and come across as apologetic instead of confident.
The result of your actions is likely going to be that you don’t make much money from your email list.
So just to sum it up, here’s what happened:
Thought:I don’t want to bother people.
⬇️
Emotion: Timid.
⬇️
Actions: Procrastination, sending fewer emails than planned, apologetic vibe.
⬇️
Likely Result: I don’t earn much money.
But what if you had a different thought? Maybe you intentionally choose to think: What I’m sharing has the potential to help my readers immensely. That is going to lead to very different emotions, actions, and results.
Thought:What I’m sharing has the potential to help my readers immensely.
⬇️
Emotion: Excited.
⬇️
Actions: Write emails with confidence from a place of wanting to help people, send all three planned emails because I don’t want anyone to miss this valuable information.
⬇️
Result: I follow through with my plan, serve my audience, and (probably) earn money.
Our thoughts and emotions completely change how we show up for our businesses. This massively influences the amount of money we make as well as our daily experience of being an entrepreneur.
How can a person decide if a side hustle or business is for them?
I think that alignment is the key. There are endless ways to make money and everyone will tell you that their way is the best and for good reason–it worked for them! But it worked for them because it felt in alignment for them.
I am extremely introverted and have tried to follow methods from extroverted entrepreneurs for gaining clients. While I had a bit of success, I hated every second of it because it was so darn draining for me!
To decide if a side hustle or business is right for you, it’s important to think about the actual day-to-day work you will be doing, not just the result you’d like of making lots of money.
If you enjoy the daily tasks, you will be more likely to succeed. You’ll make more money AND enjoy the process.
How can someone get over their fears of starting a business and actually begin?
I love this question because I’ve seen it come up since the day I started blogging.
I’d see new bloggers spend months trying to make their website look just right and get every single little element in place and then get super panicked about making their website public.
Side note: Making your website live does not mean 10,000 people are instantly going to find you (if only!). Your website can be live the entire time you’re working on it. Almost no one is ever going to see it until you start really marketing it.
So much fear comes from perfectionism. This is not about wanting everything to be perfect because we have high standards. It’s wanting things to be perfect so that we can protect ourselves from all possible criticism.
There are two things that most experienced entrepreneurs know:
Nothing will ever be “done” or “perfect”. Your business will always be growing and changing. So press publish, share it on Facebook, and tell the world about it. Striving for perfection stops you from making money and helping people.
What you do is not for everybody. Criticism can actually be a good thing. It means that what you’re doing is not bland, safe, and boring. It is memorable and will likely help you gain raving fans!
Yes, it can feel vulnerable to start a side hustle or business. This is another reason why learning how to manage your thoughts and emotions is a powerful skill.
If you have the desire to try something, I hope you will honor that desire and do it! Nothing is ever wasted. No matter what happens with your venture, the skills you learn along the way will be valuable and may lead to bigger and better things later on.
What’s the best planning method for productivity?
I get this question a lot and the answer is: whatever works best for you in this phase of your life as long as you use the 4 keys I’ll share below.
I spent years getting epic amounts of stuff done by using time blocking to schedule my weeks. However, a year and a half ago, my husband became unable to work due to chronic illness and I became his caregiver.
Suddenly, time blocking did not work for me at all because I never knew how much assistance my husband would need each day. I needed a planning method that offered more flexibility.
Some weeks, I use a good old-fashioned to-do list. I also have developed a planning method called the Check-Boxes Method that I use quite often. And sometimes I use a more simplified version of time-blocking.
Any planning method can work, but it needs to incorporate these 4 keys:
Strategy: having an end goal for every single task on your schedule.
Prioritization: decluttering your schedule so that you’re doing the few things that make the most impact.
Working distraction-free: everyone knows they should do this, but hardly anyone does.
Daily power hours: scheduling a chunk of time each day to do all the little stuff so that you free up more time for focused work.
(I go into each of these in more detail within The Harbor’s foundations course.)
If you feel like you can’t find the right planning method for you, it’s probably because you’re missing one or more of these keys. The method matters much less than the execution.
How can entrepreneurs create better work-life balance?
The #1 most important thing to do if you want to create better work-life balance is to define what that means for you.
The term work-life balance is really vague! It conjures up images of one of those banker’s scales where you have to have exactly the same amount of weight on each side for it to be balanced. But work-life balance is more about intentional imbalance than 50/50 balance.
There are weeks when we spend tons of hours working and times when our personal lives take higher priority. The key is to have this happen on purpose.
So what does ideal work-life balance look like for you?
Is it working 35 hours per week?
Is it never working at all on the weekend?
Is it working 60 hours this week so that you can fully unplug for an upcoming vacation?
Work-life balance can be about where your thoughts are.
For me, work-life balance is mostly about my mindset and being intentional. I want to be “all in” on whatever I’m doing.
If I’m watching TV in the evening, I want to be all in. Single-tasking. Not also scrolling on Facebook or checking emails.
When I’m working, I want to fully focus on one task at a time with as many distractions eliminated as possible.
Here’s a journaling exercise for you: What do you imagine your life would look like if you had perfect work-life balance? Out of your answer, what can you do today (even if it’s little) to start incorporating better balance into your life?
This exercise is worth repeating regularly. Maybe ideal balance this month looks very different than it did last month because of the life changes you have going on.
How can someone stop being overwhelmed when starting a new business?
Learn one new skill at a time and ignore 99% of the advice out there.
It’s sooo easy to get overwhelmed when you’re starting out. There can be a lot of new skills to learn and every piece of advice will tell you 21 more things you need to do to be successful.
When I started out as a blogger, I focused completely on creating a regular posting rhythm. I just wrote and posted blog posts weekly. That’s it.
Once I felt comfortable with that, I learned Pinterest marketing and incorporated that into my schedule. So I was writing blog posts and marketing them on Pinterest. That’s it.
Each time I got comfortable with a skill, I learned something new: Creating an email list, adding affiliate links to my posts, creating digital products to sell, etc. (Not the order I would recommend doing these things in anymore, BTW.)
Whatever business you want to create, you don’t have to come out of the gate with every ideal element up and running. This is a marathon, y’all. You’ve got to be in it for the long haul.
Also, if you want to buy a course to learn a new skill, buy one course and incorporate everything you learn from that course BEFORE buying another course. One thing at a time!
What do you think a person should do if they are feeling burnout from their side hustle or business?
Oh man, this is such a big important topic for entrepreneurs! I’ll just dive into one aspect of it that I see most often in my clients.
Someone experiencing burnout should work on improving the quality of their rest and downtime. Us entrepreneurs and side hustlers have a tendency to always be half-working.
We work while we’re watching TV, check our email throughout the weekend, and respond to social media comments as we’re getting into bed.
This means that we’re never fully “off the clock” and we have a really crappy quality of rest and downtime.
Surprisingly, rest can be super uncomfortable! Our brains often tell us that it isn’t safe for us to rest. You might have thoughts like:
I should do more.
I could be doing…
I haven’t gotten enough done yet.
When you’re thinking about all of the things you could or should be doing, resting brings up underlying fear and anxiety. That’s OK! This is an opportunity to feel your emotions, allow them to be there, and then redirect your thoughts to ones that will serve you better.
Some ideas of intentional thoughts for your downtime are:
It is safe for me to relax.
I am allowed to rest.
Rest is good for me even when it doesn’t feel amazing.
Creating more separation between work and downtime helps us recharge and recover from burnout. You need time to be fully off the clock–even if it’s just for two hours before bed. The quality sometimes matters more than the quantity.
Side note: Your best business ideas will probably come to you when you’re fully disconnected from work. I get amazing ideas in the shower. When your mind is free to wander, it comes up with fabulously creative plans.
What other tips do you have for someone who wants to start side hustling or start their own business?
Just do it! 😂
Honestly, my tip is to stop looking for tips and start taking messy action. Do it wrong. Do it badly. Consider every part of it an experiment and a learning process.
You can’t research your way to success.
What can a person learn from your coaching membership? How would this benefit someone looking to start a business or side hustle? Can you tell us about some of the people who have successfully taken this?
The Harbor is for online entrepreneurs who want to step into mindful productivity. I show my clients how to earn more while doing less by zeroing in on the tasks that will truly move the needle in their businesses and then making those happen.
A huge part of this process is learning how to process your emotions and choose thoughts that serve you. It’s this deeper work that most people don’t want to do. But it leads to success that is anti-burnout and anti-busyness.
If you’re just starting your business or side hustle, you will learn so many foundational skills that will help you set up a sustainable business: reducing overwhelming, creating a doable action plan, time and energy management, taking action from an empowered mindset, and more.
Some client-favorite topics that I coach on include:
Creating Your 1-Hour Growth Plan
Quality Rest and Downtime
Setting and Sticking to Boundaries
Overcoming Procrastination
Accountability
Time Management Methods
Workbooks are included in the membership so that everyone can apply the lessons to their unique situation. Plus clients can always get one-on-one help through weekly group coaching calls and unlimited written coaching.
I work with online entrepreneurs and side hustlers just starting out as well as established entrepreneurs that are working on expanding their teams. Bloggers, virtual assistants, life coaches, writers, and more.
I’ll share a few results directly from my clients:
“In just a few months I have gone from burnt out and overwhelmed to excited about my business and working on the things that are really going to move me forward in the direction of my goals. The Harbor has really helped me to get clearer on how to balance my business and personal life.” ~ Kayla, Virtual Assistant
“Each week I left with systems to implement that freed up more of my time. With the time that I was able to reclaim, I was able to work towards getting ideal clients. Not only was I able to get two new ideal clients, but they were booked at my highest fee pricing yet.” ~ Cassie, Pinterest Manager
“I realized during our sessions that I wasn’t working strategically, and even though I was busy, I wasn’t doing the things I needed to in order to get results… My biggest wins were getting new clients and seeing that I had everything I needed to keep making that happen.” ~ Shayna, Life Coach
“I was struggling with putting too many tasks on my weekly to-do list and feeling bad about not getting more done. Now, I have a streamlined weekly schedule that makes me focus on only the most important tasks with less guilt over what I’m not getting done.” ~ Jessica, Blogger
“I struggled with figuring out how to scale my business. I was mentally exhausted and so stressed at the end of each workday, and couldn’t see how I could take on any more work or clients. I enjoy my work far more with the new systems and am scaling my business to levels I never thought possible.” ~ Erin, Email Marketing Specialist
Most entrepreneurs and side hustlers think that they need to learn a new strategy to earn more money. What they actually need is to learn skills like mindful productivity, how to overcome procrastination and overwhelm, and how to do fewer, high-impact tasks.
I often tell people that you don’t need to learn a new strategy. You know enough. You need to fully apply and incorporate what you already know. That’s what The Harbor is all about.
You can learn more about The Harbor by clicking here.
What’s holding you back? What questions do you have for Christine?