If you’ve heard it once, you’ve heard it a thousand times: older Americans overwhelmingly support aging in place in their own homes, with some recent survey data indicating at or over 90% of seniors supporting retirement living in their own homes.
But sometimes the cost of renovations can exceed the amount of cash that a retiree has access to, particularly for the majority of older Americans living on fixed incomes and relying on benefit programs like Social Security.
To that end, a recent column published in U.S. News & World Report asked a number of seniors aging in place and experts about the best and most effective renovations they can make to meet their goals for remaining in their own homes.
Dak Kopec, a professor at the University of Nevada, Las Vegas explained that the age of the property itself is a big determinant of the costs associated with aging in place renovations.
“Widening doorways, enlarging bathrooms and installing stair lifts in an older home can quickly become expensive,” the column said based on his input, but there are still less expensive options that can go a long way. Some of the least expensive additions to support aging in place include grab bars and support railings that are available from major home improvement stores.
While some may be turned off by cheaper additions since they can draw attention to the concept that the occupant of a home is getting older, making targeted changes can help, and it’s not always a given that certain things must be changed in a home. Stairs are often targets of scrutiny, but it also depends on the person, Kopec said.
“Don’t automatically think you have to do away with stairs,” the column said based on Kopec’s input. “In his experience, older adults who continue to use stairs maintain their knee and leg strength longer.”
Home remodeling site Fixr told the outlet that the national average cost of aging-in-place renovations can run the gamut between $3,000 and $15,000, depending on the work performed. More drastic renovations can double or even triple that figure. But a group of retirees were consistent in targeting one room of the home in particular: the bathroom.
Those with limited mobility face challenges to their safety and physical well-being when adding water on slick surfaces into the mix, and investing in accessibility fixes there can have a big impact on both safety and mental outlook.
“It was terrifying to get into the shower by myself,” said a 67-year old retiree interviewed for the piece.
Another senior, interior designer Nancy Bean, described the challenges for her older husband — afflicted with Parkinson’s disease — who is afraid of falling in or out of the bathtub due to issues with his balance.
“Low-entry or curbless showers are game-changers for those with limited mobility. But it’s also crucial to have the proper tiling or mats on the floor to avoid slips and falls,” according to input from Bean.
Earlier this year, a story published by the Associated Press (AP) detailed the pivot that some major home improvement retailers were making toward aging-in-place. Some of the chains reporting increased renovation and modification activity include The Home Depot and Lowe’s, two of the largest home improvement retailers in the U.S.
The Home Depot is refreshing an in-house brand with accessibility in mind for things like grab bars and easier-to-use faucets. Meanwhile, in 2021, Lowe’s established a single stop for items including wheelchair ramps and shower benches, the story explained.
The best time to rent an apartment for lower rates is during winter (October to April) when rates and demand are lowest, especially from January to March.
The best time to look for an apartment before moving is in the middle of the month before your official move month.
The real estate market is seasonal, so being aware of these patterns can impact the ease of your search and the rental price you’ll pay.
Whether you’re moving to an apartment in LA during the summer or looking for a rental in NYC in the winter, timing can significantly impact your apartment rental experience. The real estate market is both cyclical and seasonal, with variations that affect rental prices and availability.
While winter is best for lower rental rates and less competition, summer is best for a larger selection of available apartments. Whether you’re looking to save money or have a wider selection to choose from, it all comes down to your priorities, and understanding these market trends can help you make an informed decision.
Winter is best for lower rental rates
Winter is the ideal time to find lower rental rates and secure budget-friendly deals on apartments. From October through April, the demand for apartments significantly drops. This decrease in demand leads to reduced rental prices as landlords and property managers strive to fill vacant units. During these slower months, they are often more willing to negotiate and offer attractive incentives to attract tenants.
For example, in January, the average rental price in New York was approximately $4,064. In contrast, during the summer, prices increased to around $4,726 in June, which is an increase of $662, or roughly 16.3%. Therefore, if cost savings are your top priority, winter is the best time to start your apartment search.
Summer is best for more rental listings
Summer is the peak season for apartment hunting, offering a broader selection of available apartments. From May to September, the rental market experiences significant turnover as many leases end and new ones begin, resulting in higher inventory. This influx of available units provides renters with a wide variety of options to choose from, including different sizes, styles, and locations.
While rental rates tend to be higher during these months due to increased demand, the abundance of listings makes it easier to find a place that meets your specific needs and preferences. Additionally, moving during the summer months can be more convenient due to longer daylight hours and more predictable weather. For those prioritizing selection and variety, summer is the optimal time to search for an apartment.
Renting an apartment in the Fall or Spring? Here are the pros and cons
Renting apartments in the Fall
Pros:
Lower rental rates: As the peak rental season winds down, landlords may be more willing to negotiate lower rents or offer incentives such as a free month’s rent or reduced security deposits to fill vacancies before the slower winter months.
Lower competition: There are fewer people moving during the fall compared to the summer, which means less competition for available units. This can give you more time to consider your options without the pressure of making a quick decision.
Mild weather: The weather in the fall is generally mild, making the moving process more comfortable compared to the extreme heat of summer or the cold of winter.
Cons:
Limited inventory: The number of available listings tends to decrease after the peak summer season, which can limit your options for finding the perfect apartment.
Lease overlap: If you are currently in a lease that ends in the summer, moving in the fall may require you to break your existing lease or manage a period of overlapping leases, which can be costly.
Renting apartments in the Spring
Pros:
Increased inventory: Spring marks the beginning of the peak rental season, with many leases ending in the summer. This results in a higher number of available listings, providing you with a wide variety of options to choose from.
Best weather: Spring offers pleasant weather conditions, making it an ideal time for moving and apartment hunting. You can explore neighborhoods and visit potential apartments without the discomfort of extreme temperatures.
Cons:
Higher rental rates: As demand increases during the spring, rental rates tend to rise. Landlords are less likely to offer discounts or incentives, and you may end up paying a premium for your new apartment.
Increased competition: The influx of renters looking to move in the summer means more competition for available units. You may need to act quickly and be prepared to make decisions on the spot to secure a desirable apartment.
Remember: Different cities have different peak times
The general trends for when to rent an apartment hold true, but peak rental seasons can vary significantly depending on the city. For instance in college towns, the best time to look for an apartment is often right after the school year starts in September, with many leases becoming available at the end of the school year in early spring.
In cities like New York, peak rental activity occurs in the summer, while in places like Miami and Atlanta, the high season extends from May through November and may not see as intense of a spike. Understanding these regional differences can help you strategically plan your apartment search to find the best deals and most suitable options for your needs.
Best time to rent and apartment FAQs
What time of year is rent the cheapest?
If your main concern is saving money, the cheapest time to rent an apartment is during the winter, especially in November. During the holiday season, less people are moving, resulting in lower demand and rental rates. While you might have fewer choices of available apartments since most leases end in the summer, landlords are often more willing to offer lower rental rates and concessions, such as skipping the security deposit or offering better deals on utilities, to avoid having units sit empty.
What is the best time of the month for apartment hunting?
The best time of the month for apartment hunting is generally in the middle of the month. This timing is strategic because many leases end at the end of the month, and landlords start listing new vacancies and preparing units for new tenants around the middle of the month. By beginning your search mid-month, you can get a head start on newly available listings. This helps you avoid the rush at the end of the month when many others are also looking to secure new rentals.
What time of the month do most apartments become available?
Most apartments become available at the beginning of the month. This is primarily because leases typically end on the last day of the month, and new tenants often move in at the start of the new month. Consequently, landlords and property managers prepare for turnover during this period, listing new vacancies and getting units ready for incoming tenants. To maximize your chances of finding an available apartment, it is beneficial to start your search a few weeks before the end of the month and be ready to act quickly as new listings appear.
How early should you look for an apartment?
You should start looking for an apartment about 30 to 60 days before your desired move-in date. This time frame allows you to explore various options, complete necessary paperwork, and arrange for any needed moving logistics without feeling rushed.
What is the best time of day to search the rental market?
If you want to get really specific, the best time to check online listings is between 9 and 10 a.m. Why? That’s when property managers are most likely to post new apartment listings for recently vacated rentals. You can strike while the iron is hot.
Rental data and prices is from Redfin and was pulled in June 2024
The 8th U.S. Circuit Court of Appeals has blocked the income-driven student loan repayment plan Saving on a Valuable Education (SAVE). As a result, SAVE borrowers won’t owe payments until the legal situation is resolved, which could take months.
Thursday’s ruling was the latest update for borrowers who have endured back-and-forth legal decisions about SAVE since June, resulting from two lawsuits filed by groups of Republican-led states. About 8 million borrowers are enrolled in SAVE, accounting for 1 in 5 student loan borrowers.
“Today’s ruling from the 8th Circuit blocking President Biden’s SAVE plan could have devastating consequences for millions of student loan borrowers crushed by unaffordable monthly payments if it remains in effect,” U.S. Education Secretary Miguel Cardona said in a Thursday evening statement. “It’s shameful that politically motivated lawsuits waged by Republican elected officials are once again standing in the way of lower payments for millions of borrowers.”
Thursday’s legal decision blocks the plan in its entirety, whereas decisions in recent weeks only blocked portions of the plan. However, the decision is also temporary — in place until the court rules on the plaintiffs’ request for a preliminary injunction.
If you’re enrolled in SAVE, here’s what you need to know.
Interest-free forbearance for SAVE borrowers
Of the 8 million federal student loan borrowers enrolled in SAVE, about 4.6 million owe $0 payments based on their income.
If you’re among the 3.4 million SAVE borrowers who do owe monthly payments, you’re off the hook for now. The Education Department is putting all SAVE borrowers into an administrative forbearance indefinitely. Payments won’t be due.
“Borrowers enrolled in the SAVE Plan will be placed in an interest-free forbearance while our administration continues to vigorously defend the SAVE Plan in court. The department will be providing regular updates to borrowers affected by these rulings in the coming days,” Cardona said.
Check that your contact information is up to date in both your studentaid.gov and student loan servicer accounts. This will help you stay informed of key SAVE updates that may impact your repayment.
The Education Department has not yet confirmed if borrowers will get credit toward income-driven repayment (IDR) loan forgiveness or Public Service Loan Forgiveness during this SAVE payment pause, but it’s likely. Borrowers typically get this credit during an administrative forbearance, including a separate July forbearance that applied to some SAVE borrowers.
The department also has not clarified if borrowers can still apply for IDR plans, including SAVE. As of Friday morning, the online IDR application on studentaid.gov/idr was inaccessible. And in a court document filed Wednesday before the plan was struck down, U.S. Solicitor General Elizabeth B. Prelogar said the Education Department would suspend online IDR and loan consolidation applications for six weeks if SAVE was blocked.
How we got here and what could come next
SAVE is more generous than other income-driven repayment (IDR) plans, which the government introduced in the 1990s. For example, SAVE offers lower monthly payments and an interest subsidy that prevents ballooning balances. It also forgives debt in as little as 10 years for those with principal balances up to $12,000, compared to forgiveness in 20 or 25 years on other IDR plans.
Portions of SAVE debuted to borrowers in August 2023. The final benefits of the plan — like capping payments on undergraduate loans at 5% of discretionary income, rather than 10% — were slated to roll out July 1. The Education Department has already forgiven $5.5 billion in student debt for 414,000 SAVE borrowers.
In March, a group of 11 Republican states led by Kansas sued to stop the SAVE plan, alleging that Biden did not have the authority to cancel student debt without congressional approval. In April, a separate group of seven Republican states led by Missouri filed a similar lawsuit.
As a result, two federal judges temporarily blocked different portions of SAVE in late June, days before reduced payments were scheduled to go into effect for millions of borrowers.
One of these rulings was lifted a week later by the 10th U.S. Circuit Court of Appeals, allowing lower payments to proceed, but not the accelerated 10-year forgiveness. However, the latest decision by the 8th Circuit on Thursday entirely blocks SAVE until a final decision can be made.
In a post on X, Missouri Attorney General Andrew Bailey called the Thursday decision a “HUGE win for every American who still believes in paying their own way.”
However, removing SAVE could leave borrowers with “intense confusion” and “significant and irreparable harm,” Prelogar said in the Wednesday court filing.
“To revert to the pre-SAVE plan approach, the department and its servicers would have to reprogram their systems, retrain their staff and recalculate monthly payments,” Prelogar said. “It would have to devote considerable staff time and other resources to the reprogramming effort, which would detract from other critical priorities.”
If the 8th Circuit finds the plan illegal and the 10th Circuit does not, these differing opinions could land SAVE in the U.S. Supreme Court, according to the Student Borrower Protection Center. A Republican coalition has already asked the high court to intervene.
This interview has been edited for length and clarity.
Flávia Furlan Nunes:How would each administration’s approach to the economy affect the mortgage industry?
Mark Calabria: You’re starting with the absolute most important aspect. While differences in housing mortgage policy are important, the overall driver will be the overall economy — predominantly the question of inflation and jobs. I recognize there are some out there who would argue that Trump will be more inflationary. He will be less, particularly given the experience we’ve had. That’s the benefit: We’ve had four years of Trump and almost four of Biden. There is actual history that compares.
Inflation will be more stable under Trump and you would see a decline in interest rates and mortgage rates more than you would under Biden. That said, of course, we’ve seen an overall decline in interest rates, even if they do remain somewhat high. It should be kept in mind that it doesn’t matter who the president is in 2025; we’re not going back to 3% mortgage rates. The difference between administrations, at most, would be a percentage point.
Nunes: What do you expect for the job market in a Biden or a Trump administration? Calabria: We are seeing a slowing in the job market, and in Biden 2.0, I would expect the slowing trend to continue. You would see a number of things done in the Trump administration that might put some additional steam back in the job market. But I recognize forecasting is tough here. That said, what you think will happen to inflation and jobs should be 80% of what you think will happen to the housing and mortgage market.
The traditional forecasting community consistently underestimated growth during the Trump years and consistently overestimated growth during the Biden years. I don’t want to get too much of a digression, but the typical macro models used in the forecast community are very much demand-driven. Things like regulation don’t enter their forecast. It’s not that they’re intentionally wrong; it’s just that they’re not capturing the whole picture.
Nunes: On the fiscal front, several provisions from the Tax Cuts and Jobs Act of 2017 are scheduled to expire at the end of 2025, barring action from Congress.
Calabria: Obviously, the corporate fiscal incentives are quasi-permanent. It’s the individual things that come up. With a Trump administration, you’re largely seeing some tweaks and extensions of the 2017 changes, and they certainly are discussing: what can you do in terms of perhaps stimulating the housing market?
One of the things Republicans are looking at, on the tax side, is some indexing, perhaps temporarily, of the capital gains relief that you see in homeownership. It hasn’t changed since 1997. And of course, $500,000 for a couple in 1997 was a lot of money. It’s a lot less now. Both administrations will be looking at tax incentives to reduce lock-in effects in the existing-home sell side. You can debate if one is more effective than the other. The Biden side seems to be more tax-credit driven. My sense on the Republican side? It is probably more likely focused on capital gains.
Nunes:Regarding monetary policy, The Wall Street Journal reported that Trump’s allies are “quietly” drafting proposals in an attempt to erode the Federal Reserve’s independence. What do you have to say about the independence of the Fed under a potential Trump administration?
Calabria: The Fed operates within the government. The Fed coordinates with administrations. The argument that Trump is somehow bringing a threat to the Fed’s independence is grossly exaggerated, if not completely false. I don’t have a lot of sympathy for that argument. My argument is not that there aren’t going to be some questions from the Trump administration about Fed behavior. My argument is, that’s how every administration behaves to some degree. They just do it differently.
Nunes: How do you see a Biden or a Trump administration addressing the affordability challenges?
Calabria: Housing has been subjected to inflationary pressures like the rest of the economy. There’s certainly a view on the Republican side that you could address inflationary pressures writ large. For instance, the same thing that has been driving up gas and grocery prices has impacted cement, lumber or labor prices. So, they’re all caught together to some extent. If you deal with the underlying inflationary issues, that will help with housing affordability. That’s one broader aspect.
When you drill down into what’s likely to happen, you haven’t seen specific proposals. Most of the Biden proposals, even though they’ll put up some pieces of paper that say “housing supply” at the top, 90% of it is housing demand. What is a $10,000 tax credit for down payments but increasing demand? That’s not going to make housing more affordable. It may make housing more affordable to the individual who gets it, but it makes overall housing less affordable.
Nunes: What else can be done to increase the housing supply?
Calabria: Certainly, on the lending side, the constraint is not you and I get a mortgage; the constraint is the builder getting construction finance. That results from 30% to 40% of community banks since Dodd-Frank having disappeared.
You’re going to see an approach under a Trump administration that’s much more looking at how we strengthen community banks. You need to be able to do that if you want to make construction financing readily available. It’s one of the reasons that you’ve seen consolidation among the builders. You have to deal with the construction lending side of it. And you would see that addressed better under a Trump administration than in the Biden administration.
Nunes: Construction finance is only one challenge. What about labor costs?
Calabria: There’s also a constraint on skilled labor. You have limitations on electricians and carpenters, some of this of course is when you increase spending in other parts of the economy — for example, the infrastructure bill. When you increase demand in the economy for construction labor, you’re increasing the cost of housing. You can argue that it’s worth it, and that’s fine — I’m an economist by training and I don’t think there are any free lunches.
You’ll see a different conversation at a national level in terms of where people should devote their careers. So much of the conversation of the Biden administration has been about student debt relief for doctors and lawyers. You’ll see a much bigger conversation in the Trump administration about how it’s a great thing to be a plumber, carpenter and electrician, and how we strengthen apprenticeship programs. It’s not to take away from doctors and lawyers, but it’s just an emphasis on you won’t get a lot of new housing built unless you can do something about the constraints in skilled labor.
Nunes: What is your opinion on the current administration’s initiatives in the mortgage space?
Calabria: There’s been a weakening of underwriting standards by this administration, not just at FHA, but also at Fannie and Freddie. If I can be slightly humorous, my description of the Biden administration’s housing policies is that they see two families competing aggressively over one house and they believe the solution is to add a third family. You’ve seen this massive expansion, high debt-to-income lending, that has been irresponsible and doesn’t do anything other than erode affordability. That has added to housing demand.
Keep in mind that you’re in an economy where you saw big increases in homeowners insurance. If you’re getting somebody into a loan with a 50 DTI, and then suddenly they’ve got an increase in their homeowners insurance, that’s not a sustainable world. There have been increases in allowable loan to value. Obviously, there’s been a lot of pressure to increase appraisals and weaken appraisal independence, which probably has inflated housing values as well.
They’ve done things that even don’t show up as directly. The CFPB has pushed for the elimination of medical debt and other things [from credit scores]. That may be the right policy, but it inflates FICO scores. If you’re not increasing the credit box to offset that, then you are knowingly decreasing the underwriting.
Nunes: Do you think that the federal government has limited means to influence housing supply, so wouldn’t it be expected to do more on the demand side?
Calabria: Washington doesn’t have a lot of levers in terms of housing supply. I understand if you feel you have to do something, most of your tools are demand-oriented. But that said, you have to recognize that increasing demand when supply is limited makes it worse, not better. There’s a lack of recognition of that.
There have been proposals on the Republican side to release some small amounts of federal land. There’s a process in Nevada, in Clark County around Las Vegas, where you can convert federal land to housing development. The proposal is to essentially allow it in other cities. The Joint Economic Committee made some estimates, and it could result in 3 million new units being built. The federal government does have land. Some of it is in urban areas, like Denver, that are facing affordability challenges but can be converted. Nobody’s talking about chopping down the redwoods or building housing in Death Valley. But it’s hard to see this administration ever thinking about federal lands to do anything other than be dirt.
Nunes:Among the steps taken by this administration, they reduced mortgage insurance premiums for FHA loans. How do you evaluate this decision?
Calabria: It only increases demand. There are things that the industry may like. Some of that is good for overall affordability. Some of it isn’t. Did housing prices go down after they did that? Did homeownership go up after that? No.
Obviously, the industry is under tremendous pressure, particularly on the nonbank side. Rather than trying to target things that look like they help the industry, if you target things to get the overall market going, that’s the better approach. For instance, on the tax side, if you allow some capital gains relief, many people with those 3% mortgages may be willing to sell their homes, which will increase the volume, increase existing-home sales and bring some of the volume back.
Nunes:What changes could we expect for the CFPB under a potential Trump administration?
Calabria: I don’t think the CFPB is going away — as much as that would be nice. But I do think you are going to see a difference in the stance, which will matter in the mortgage industry, in terms of enforcement and obligations. The Republicans’ approach to the CFPB is to say that there are wrongdoers; we will go after the bad guys. This administration says the same thing, and that’s where the overlap is. The difference is this administration also has the view that we’re going to use the CFPB to pick winners and losers to redistribute to our friends and engage in a lot of social engineering. And that’s a much different approach from just going after the bad guys.
Writ large on compliance and regulatory costs, Trump’s CFPB will be considerably lower. Post Dodd-Frank, one of the problems has been that it costs so much more to originate loans. A tremendous amount of that is because of regulatory costs. It’s not like the bad guys get to run wild; you’d still see enforcement.
Nunes: What’s the future of HUD, in your view?
Calabria: HUD is not going away. There may be some changes in some of those programs. And that’s fine, because much of what they’re doing today is just adding to demand without added supply. And of course, you’re not going to be able to deal with inflationary pressures unless you’re willing to make some changes to the budget. And if we’re going to make changes to the budget, anything, including HUD, should be on the table.
Nunes: Would a Trump administration’s goal be to resume some of its past projects, such as releasing Fannie and Freddie from conservatorship or implementing more caps on their purchases?
Calabria: There’s a much higher chance in a Trump administration of Fannie and Freddie coming out of conservatorship. You don’t need Congress to do it. Having been the guy who started it, I know a lot of work was done. There’s a road map; it’s all doable. It’s a benefit to the industry because you reduce the degree to which politics drives. You have to go back to letting Fannie and Freddie behave as businesses. It will bring a lot more certainty to the industry.
The restrictions put in place were always done to minimize disruptions to the primary purchase market. In 2020, when investment caps were put in place, everybody said the sky was falling. Did the sky fall? No. That business got picked up. It was done by other people. Trump is a developer. The guy spent his entire life in real estate. He tends to have people in the administration who understand how the housing and mortgage markets work.
Just like you saw in 2021, any constraints on Fannie and Freddie will be done to minimize disruption in the mortgage market. You can look at all these people who said in 2018 and 2019 that Calabria would kill the mortgage market. It didn’t happen. Nobody benefits from a strong Fannie and Freddie more than the mortgage industry.
Nunes: One initiative from Freddie Mac is a pilot program to purchase closed-end second mortgages. Do you support this idea?
Calabria: I would certainly expect that to get suspended. Should we be spending the portfolio on second mortgages instead of mortgages that are purchases? I recognize that the industry is hurting. Everybody wants to focus on things that bring the overall market back. But you can’t blow up Fannie and Freddie at the cost of it. That might feel good in the short run, but it’s not the right approach in the long run.
Nunes: A topic that’s been covered extensively at HousingWire is the National Association of Realtors’ settlement and changes to agent commission structures. What are your thoughts on that?
Calabria: If you remember, there was a 2020 settlement with NAR. That got thrown out the door. There’s a very high likelihood that it reverts back to the 2020 settlements. Again, that doesn’t stop some of the litigation out there. But you would see a very different stance toward the real estate industry and the kind of war on Realtors comes to an end.
Nunes: Who would you expect to lead federal housing agencies and companies under a potential second Trump term?
Calabria: It’s too early to say. But you’re likely to have people who are both experienced regulators and people with deep experience in the capital markets. You’ll have people who have experience with Trump’s style and understand how he governs. It’s less surprising, perhaps, this time around.
Nunes: Would you return to the government? If so, in what capacity?
Calabria: I believe in public service. If asked to serve in a capacity to make a difference, I would certainly be inclined to accept. But which capacity, that’s up to the president. You don’t get to choose it. My interest is broadly financial services.
Looking to save money fast? Here are the top 10 frugal living tips that will transform how you think about and handle money. These simple changes can help you save more, spend wisely, and enjoy financial freedom. Start your journey to better money management today with frugal living.
1. Wait 24 hours to Buy
Image Credit: Yaroslav Shuraev from Yaroslav Shuraev Collection.
Before buying anything, wait 24 hours. This helps you decide if you really need or want it. Often, you’ll find you don’t, saving money in the process. This is mandatory for anything over $500 for us.
2. Make a Plan for Your Money
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Plan where to save and spend your money before you get paid. This helps you prioritize savings and manage expenses, leading to better financial health.
To learn more: Budgeting Made Simple
3. Say No To Debt
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Avoid debt by saving for big purchases and paying in cash. Debt payments can hold you back, so staying debt-free helps you move forward financially.
To learn more: 7 Simplistic Habits Needed for Debt Free Living
4. Decide Where to Spend Money
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Be mindful of where you spend money. Identify what’s important to you and avoid unnecessary expenses. This helps you manage your finances better.
Start Here: No Spend Challenge: The #1 Fastest Way To Set Spending Priorities
5. Know Your Why to be Frugal
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Understand your reason for living frugally. Everyone has different money goals, so knowing your “why” helps you stay committed to saving and smart spending.
To learn more: 10 Must Have Financial Goals to Achieve
6. Trim Grocery Budget
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Food is a basic need, but how you shop and eat affects your budget. Focus on reducing grocery spending to save money over time.
To learn more: The 60 BEST Budget Grocery List Items for Cheap Eating
7. DIY First
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Try making things yourself before hiring help. DIY projects can save you money, and there are plenty of online tutorials to guide you.
8. Find Cheaper Alternative
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Always look for cheaper alternatives. Whether it’s price matching or waiting for a sale, finding better deals is a great way to save money.
9. Choose Free First
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Opt for free options whenever possible. From activities to items, choosing free first helps you save your income for other needs.
To find ideas: 105 Fun Things To Do With No Money
10. Think Long Term
Image Credit: Yaroslav Shuraev from The Yaroslav Shuraev Collection.
Focus on long-term financial goals. Plan what you want your money to achieve and take steps towards those goals, ensuring future financial stability.
Which Frugal Living Tip to Implement First?
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These frugal living tips can change your financial life. Start with any tip from this list to make a big impact on your finances. Embrace these habits to save money and achieve financial independence.
To learn more: Top 10 Influential Frugal Living Tips with a Big Impact
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“After job cuts in 2023, and with lenders generally less pessimistic about the economy and the direction of the mortgage market, staff sizes appear to be normalizing,” Fannie Mae chief economist Doug Duncan said in the MLSS report. “Some shared plans to increase their workforce this year and many remain focused on talent management.” Lenders’ … [Read more…]
Inside: These are the absolute best life hacks to saving money. This list of frugal living tips with a big impact with greatly improve your budget and finances.
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How to Stay Frugal
The better question is why do you want to stay frugal? What are your personal reasons for being frugal?
In this particular case, we are talking about saving money.
In all honesty, staying frugal means that you are constantly wanting to save more money. You have bigger plans in your life and don’t want to be a slave to your money. You desire to make a plan for your money and that is of utmost importance for your household.
Learning how to stay frugal will turn into a frugal lifestyle. Then, for many, it will morph into a thrifty lifestyle.
It is easy to learn how to stay frugal when you have dreams and plans in your life.
In order to fund those dreams, you need to stop living paycheck to paycheck and begin to give purpose to how you spend and save your money.
If you don’t believe me, then check out this case on why being frugal leads to a millionaire’s success story.
Top 10 Frugal Living Tips with a Big Impact
Like it was stated before, there are hundreds of frugal living tips that you can implement right now to start saving money.
However, for too many people, the list is too long and they want to see immediate progress right now.
These are the TOP 10 frugal living tips that will change how you think about money, spend money, and ultimately save money.
If you want to enjoy life and money (and maybe one day reach financial freedom), this is where you want to start. With this list. Right now. Make these easy lifestyle changes and begin a new relationship with money.
1. Wait 24 Hours to Buy
This is the simplest tip to help improve your money management.
Wait at least 24 hours before you buy something.
During that time, you will figure out whether or not you actually want or need the item. If you still want it, then you can purchase it. However, many times you realize that you didn’t need it or it wasn’t exactly what you wanted. So, you end up saving some money.
Obviously, the wait 24-hour rule applies to anything outside the realms of housing, food, gas, and utilities.
One of the smallest wins is to save $50 a week using this rule because over a year, you will save $2600!
Say what!?!?
That is a big chunk of cash that you probably even didn’t realize you were spending. Now, you are one step closer to reaching financial independence.
2. Make a Plan for Your Money
How do you want to spend your money? Have you ever considered where you want to spend your money before you spend it? Don’t worry if you said no. Most people don’t make a plan for their money.
What does it look like to make a plan for your money?
Before you are paid, you decide how and where you plan to save and spend your money. Did you catch the first part? It is the biggest hint I have for you – decide where you plan to save money first. Then second, how you plan to spend the rest.
Many people call this a budget.
The key is knowing where your priorities lie before putting in all of your variable expenses. You must plan to reach your money goals first. Then, figure out how to live on the rest.
That is called making a plan for your money.
3. Say No to Debt
There is nothing frugal about taking out debt.
Around here, we call debt – the cash flow killer.
It is extremely hard to move forward when debt (specifically the debt payment) is holding you back. It is like taking two steps forward only to be taken back a step now and three steps back in the future.
How to get around not going into debt?
You save up for big purchases, and then, you can pay in cash.
Side note… For this discussion, we are not talking about mortgage debt. In many cases, mortgage debt can be considered a “better” debt because purchasing a home may have a lower mortgage payment than current rents in the area.
4. Understand Where You want to Spend Money
Spending money isn’t a bad thing… IF you are spending money in areas that are important to you.
However, too many times we are blindly spending money and not realizing where our money went at the end of the month.
Is that what you set off to do?
Probably not, but for now, you feel like you are a slave to your bills and not being able to enjoy the fruits of your labor. The time is now to figure out where your priorities lie and the area you want to spend money.
To make this process simpler, it is easier to decide where you don’t want to spend money. For us, a no spend challenge helped us visually see where we wanted to spend money and where we actually spent money. The experience was eye-opening and very valuable.
Now, we know where we want to spend money and that has made a big impact for our finances. What could it do for you?
Just to Note… There are times where you want to spend money isn’t possible because you are barely managing to pay your basic bills. This frugal living tips with a big impact is to help you understand where your goals to spend money lie and what is unnecessary spending.
5. Know Your Reason to Live Frugally
Let’s be honest… living frugally doesn’t come with a lot of materialistic perks. You are sacrificing spending money in order to save money. It is hard to watch people mismanage their money only to get bailed out again and again.
To stick with frugal living and a desire to implement saving money hacks, then you must know your reason to live frugally.
Your answer will vary from everyone else’s answer. That is okay because we all have different money goals.
Have you thought about your reason for living frugally?
Our reason to live frugally is to travel. We don’t want to wait until we retire and the kids are grown to travel. We want to travel now and explore as much as possible while we can. Over time, that has morphed into our desire to reach financial freedom and not be a slave to our jobs. (Don’t worry… I love what I do here and don’t plan to change anything.)
What is your reason to live frugally?
6. Keep your Grocery Budget Trim
This is one of the biggest frugal living areas that will have the most immense impact – how you eat food.
Food is one of the basic expenses that you need to survive. However, how you choose to fuel your body will make a difference in your budget as well as how you choose to shop.
By becoming cognizant of grocery spending, you will learn to save money on groceries, which will make a huge impact over time.
Let’s take this example… You can save $200 a month on your grocery spending. That equates to $2,400 in one year. Almost $5000 in two years. At the end of 10 years, you saved $24,000!!
That is no small chunk of change. While spending an extra $200 a month doesn’t seem like much, over time it adds up to a greater amount. That is when you realize that implementing grocery money saving tips will have a bigger impact than you realized.
Overcoming your grocery budget is a learned trait; here are the best items on your grocery budget list.
7. DIY First
I’ll be the first to admit that making something yourself can be overwhelming when you don’t have a clue where to start.
Thankfully, there are plenty of tutorials to get you started with a simple Google search.
Frugal living tips with a big impact is knowing how to do it yourself first.
Here is one that has saved us over $10,000 in the past 10 years… I learned how to cut everyone’s hair in the house. The reason we started cutting our hair was because we were looking for ways to get out of debt faster.
The worst case scenario with DIY… if it doesn’t work out how you expected then you can always call for professional help. The best case is you just saved yourself a lot of money.
Especially if you own a home, you must learn to DIY first. Many of the skills that you would hire a handyman to do used to be taught by the generation before. Too bad that this isn’t still the case. However, thanks to YouTube, you have plenty of opportunities to learn how to do it yourself.
Another option is to trade services with a friend.
8. Find a Cheaper Alternative
One of the traits of a frugal person is searching for cheaper alternatives. This is a simple money saving hack.
This could be as simple as searching for a better price online and price matching. Or even waiting for a sale or clearance.
Finding cheaper alternatives is a great way to save money. Some options include:
Buying in bulk
Buying generic
Buy less items
Finding items that have dual purposes over single use. (like instant pot / air fryer combo)
You need to open up your eyes to finding cheaper versions or figuring out how to buy what you need at a lower price.
Another alternative is to buy used. This especially holds true for new cars since they lose most of their value within the first 5 years.
Just to Note: A cheaper alternative doesn’t always mean the quality is the same. A thrifty person would want an item that will last longer than the knockoffs.
9. Choose FREE First
Oh my! This hack is one of the best frugal living tips with a big impact.
Why choose FREE first?
Then, you don’t have to spend your hard-earned income on something that is used for a short period of time.
This could be for everything you spend money on.
Find free things to do with no money.
Source items you need in Buy Nothing Facebook groups or Nextdoor.
Choose the library over buying the actual books.
Ultimately, you’re looking at how to get things and do things for free first. This doesn’t make you cheap at all. It makes you frugal. Plus it gives you the chance to spend that money on something else that aligns with your reason to be frugal.
10. Think Long Term
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Too many times, we are so focused on living paycheck to paycheck that we don’t stop to make plans on what we want the next year to be like. Or the next 3 years? 5 years? Even 20 years away?
If you are ready to make a big impact in your life today, start by dreaming and thinking long term financial goals for all of your spending and saving.
Frugal Family Tips
Really quick, we are going to spend a little time discussing frugal family tips for your household.
Why?
Well, kids are expensive and it can be hard not to want the best for your family. And it can be easy to spend money to make that happen.
But first, why should you implement frugal family tips for your household?
Hint: so you can raise financially savvy children who make smart and wise decisions with money as adults. More is caught than today.
Kids learn by example.
So, why not be the best example for your kids with money?
The above list of the top frugal living tips with a big impact is solid money management tips that will build a solid foundation of success.
There isn’t a specific list of frugal family tips. It is taking the above life hacks and talking with your family about why you are making these money decisions. Have conversations about spending money and saving money.
In the long term, teaching frugal family tips will open the door to many opportunities.
That right there, my dear friend, is the gift that will keep on giving.
Tips for Living with Very Little Money
Typically, there are two types of people who are living with very little money and they are on opposite ends of the spectrum.
First of all, don’t compare yourself to others. That slippery slope of comparison is a trap; one which will cause you great harm, stress, and financial strain.
You are looking for tips for living with very little money.
If you are struggling living paycheck to paycheck, then you are in a tough spot right now. Remember, I said right now. You can always change your financial situation. It starts with your money mindset first.
The other person is that extremely frugal person who is consciously choosing to live with very little money. That means you are prioritizing the saving percentage you save each month.
In addition to all of the tips above, you must become EXTREMELY cognizant of your plans to spend money.
You know how and where you plan to spend every single penny that you earn before the money is in your hands.
Consistently, you are finding ways to spend less money and save more money.
A no spend challenge becomes a normal way of living for you. The key is you can’t hold a grudge on your choice of extreme frugality.
Just remember, you can lead a fabulous life with very little money. Money won’t buy your happiness. Finding contentment with your life is the target.
Which Frugal Living Tips with a Big Impact will You Try First?
Okay, so in all honesty, most of these frugal living tips are great money management tips that will completely turn your life in a completely different direction.
You are here because you want to save money with simple life hacks.
This list of the top 10 frugal living tips with a big impact will flip your life upside down for the better.
You need to make a big impact on your finances. Now, you need to embrace these saving money tips and have them become natural habits.
Regardless of income, you are capable of saving your first $10k, then saving $100,000 and ultimately being a millionaire. All it takes is thinking long-term and deciding what is most important for your family and your household.
You hold the keys to a brighter financial future. Grab them and begin to open up doors to more opportunities.
In case you want more frugality in your household, in this post, we outline over 175 + of the best frugal living tips, which are great once you master the money saving tips that will have a longer lasting impact.
For now, what frugal living tips with a big impact will you try first? Comment below and let us know!
You can become the next millionaire with no money!
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
More Northwestern Mutual advisors than ever before named to Forbes’ Top Financial Security Professionals and Best-in-State lists MILWAUKEE, July 10, 2024 /PRNewswire/ — Northwestern Mutual announced today that 650 of its financial advisors earned a spot on Forbes’ Top Financial Security Professionals and Best-in-State lists – the company’s largest-ever showing on the prestigious rankings. More … [Read more…]
Understand how much extra income you could get from a side hustle like DoorDash and get a budgeting and investing basics refresh.
This Week in Your Money: How much extra money can you really make from side hustles? What are budgeting and early investment strategies for young professionals? Hosts Sean Pyles and Sara Rathner discuss the realities of gig economy jobs with Tommy Tindall, a NerdWallet writer who tried working for DoorDash to see what kind of income it would give him. He shares tips and tricks on the ease of starting with DoorDash, the practical challenges involved, and how your location and lifestyle can impact your earnings.
Today’s Money Question: Host Elizabeth Ayoola joins Sean and Sara to help answer a listener question from a recent college graduate about early investment strategies. They discuss how young professionals can apply the 50/30/20 rule to their finances, the importance of setting clear savings goals, and how to start investing at a young age. They discuss the benefits of starting investments early, the differences between active and passive investing options, and the importance of automating investments to build wealth over time.
Check out this episode on your favorite podcast platform, including:
NerdWallet stories related to this episode:
Episode transcript
This transcript was generated from podcast audio by an AI tool.
Sean Pyles:
Have you ever gotten a food delivery or a ride in an Uber and wondered whether these gigs are really worth the effort as a side hustle? Well, this episode will deliver some answers.
Sara Rathner:
Cute. Welcome to NerdWallet’s Smart Money Podcast. I’m Sara Rathner.
Sean Pyles:
And I’m Sean Pyles. This episode, Sara and I are joined by our co-host, Elizabeth Ayoola, to answer a listener’s question about money goals, especially when you’re early on in your financial journey. How do you get a grip on your finances and set yourself up for long-term success?
Sara Rathner:
But first, we’re turning to side hustles. This month on Smart Money, we’re running a special series about how you can increase your income, whether you want more money to invest or you’re working on building up your savings, or you really just want some extra cash to spend on whatever junk appears in your social media feeds.
Sean Pyles:
And we are not here to judge you for whatever you spend your money on, but watch any social media influencer or read any article about ways to increase your income and inevitably someone mentions taking up a part-time job in the gig economy like Uber, DoorDash, Airbnb, take your pick. And I’ve always been pretty skeptical that these gigs will net you meaningful amounts of cash, especially considering all the time and effort involved.
Sara Rathner:
Absolutely. If you’re going to put miles on your car or let strangers sleep in your rental property, it needs to be worth it. And we don’t have access to a vacation house for the purposes of this podcast, but we do have a Nerd on staff at NerdWallet who actually did DoorDash for a couple of days to get a feel for whether these jobs live up to the hype. Tommy Tindall is here to share his insights with us. Tommy, welcome back to Smart Money.
Tommy Tindall:
Hey there. Thanks for having me.
Sean Pyles:
So Tommy, you recently made a really fun video for NerdWallet’s YouTube channel where you test drove DoorDash for a few days. What were your hopes and expectations going into this journalistic exercise?
Tommy Tindall:
Yeah, so I study and write quite a bit about side hustles and for this one, I really wanted to go the extra mile, get it, and test it out myself, try to make the advice a little more valuable, right? Give it a true test. And delivery driving is super popular and seemingly accessible, at least that’s what I thought, was my hypothesis, I should say, an easy way to make side money. So I really wanted to answer a couple questions that I think people have about a gig like this, and one is just how easy is it to get started? Can you really sign up on your phone, get a red bag in the mail and start driving? And spoiler alert, yes, that’s what I did. You can. And also can you make real money?
Sean Pyles:
Okay, so what were the main things that you were tracking as you weighed whether this side hustle was worth it?
Tommy Tindall:
I wanted to keep it easy, so I was just keeping a close eye on the time I spent driving while delivering, the miles I drove, and of course how much I earned and really wanted to get to what’s the real pay when you factor in the cost of driving.
Sara Rathner:
So talk with us a little bit about the experience of doing this. Was it fun? Was it boring? Did you get chased by any wild animals? Did you use this as an opportunity to catch up on episodes of Smart Money?
Tommy Tindall:
Well, I wanted it to be fun, but it was kind of hectic. I mean, I remember there were a couple moments of zen where I was just cruising, windows down, just looking outside thinking this is the life. But as soon as I started thinking that way, ding, ding, I’d get another delivery. And I think hustle is a real good term for this because it was kind of a grind. And what really got me, which I thought was interesting, was the constant interaction with my phone. It was draining. I was using maps to navigate, to take orders, and it was just a lot of interaction with the phone while driving.
At one point I, quick story had a 16-mile delivery, which was good pay. It was like $18 of base pay, which was really good. So I took it, but I was so distracted kind of trying to figure out where I was going, that I went the wrong way on 95 and was screaming, pounding the wheel, as you can imagine, and just like, efficiency. That’s what I was going for. Also, keep in mind, I was filming this experience for the video and that totally added to my stress. So maybe more practice without trying to film myself, I could be a little more efficient, get a little more time to enjoy solitude and catch up on my favorite podcasts like this one. But yeah, it was hectic.
Sean Pyles:
Yeah. But you can’t forget that this is a job, right? It’s going to have stressful, difficult moments like any job.
Tommy Tindall:
I was reminded of that quickly, that this is a job and I kind of felt the stress. When I would get a delivery, I wanted to make sure the food was hot and get there quickly, know where I was going. So I had that sense of, hey, you’re on the clock, you’re working.
Sara Rathner:
That distracted driving element is also pretty terrifying.
Sean Pyles:
Tommy Tindall:
Yeah. Now when I see people on the road, I’m wondering are they delivering right now? So before I yell “get off your phone,” I’m wondering that.
Sara Rathner:
Sean Pyles:
Sara Rathner:
They might be.
Sean Pyles:
Either way, get off your phone.
Tommy Tindall:
Sara Rathner:
Tommy Tindall:
Sara Rathner:
I know. So Tommy, you mentioned this in your video, you live in a smaller town, a more remote area. How does that affect your ability to make money from DoorDash or any other app-based job like this?
Tommy Tindall:
I mean, it matters a lot because it’s how busy it’s going to be around you. So location matters. It’s where you live, which towns you have access to with a short drive that may be more populated. So I live, it’s a smaller, more rural but kind of suburban town outside of Baltimore. And what I did before I started was I would watch the DoorDash app, the map section of the app and just kind of see where the hotspots were.
And of course areas closer to Baltimore where it’s more densely populated, more restaurants within close proximity of each other, they were regularly busy during the peak times and they were shaded in pink on the maps. That’s how you know you can go out. When the map is like pink or red, you can Dash on a whim. When it’s gray, which it was sometimes in my town, you have to wait or schedule a Dash for later. But luckily where I live during the busier lunch hour, the option to Dash now was available during the weekday when I tried this. So I was able to stay closer to home, which I think was more realistic, because if I did this, I don’t think I’d want to drive that far. I’d want to stay closer to home, so.
Sean Pyles:
You don’t want to have to commute for your side gig.
Tommy Tindall:
Exactly. You want to get out there and do it maybe on the lunch hour during work, which I was thinking, which we’ll talk about. Probably kind of hard to do because I did find myself going from one end of my town to another because it’s not that populated, so it cost me some time.
Sean Pyles:
Well, that also makes me think about wear and tear on your vehicle and other related expenses like gas. Was that a worry of yours as you were doing the side hustle?
Tommy Tindall:
Yeah, this was a big worry for me because I am somebody who loves cars and I can be a little obsessive about keeping our vehicles maintained. So just all the stop and go driving, it was just kind of giving me a nervous tick. That was on my mind the whole time. I think I kind of make that clear in the video a little bit, and I should also mention that I drive a full size Ram pickup truck, which I thought would be fun to test for this, but not the ideal gig economy vehicle. It’s inefficient, hard to maneuver.
Sean Pyles:
Yeah, lots of storage space, but maybe more than you need for a Starbucks run or something like that.
Tommy Tindall:
Oh, yeah. And the maneuverability. I think at one point I pulled off a busy road into the wrong driveway and I had to sort of Austin Powers my way out. You remember that 20 point turn he had to do in the first movie and all while the customer, the next house over was watching me. So when I finally got over there, we had a little laugh about it and I think she did tip me. I don’t know if she tipped me after the fact or not, which you can do in the app.
Sean Pyles:
You were providing some entertainment along with the delivery?
Tommy Tindall:
Oh, yeah. When I did get to interact with customers like that, I made it kind of fun. I’d be like, “Yeah, you don’t see people driving a truck very often, do you?” But yeah, I was a little anxious about my own vehicle and the wear and tear.
Sean Pyles:
Okay, so Tommy, after three days of Dashing, tell us how much time you spent driving, how far you drove, and how much you earned.
Tommy Tindall:
All right, well here are the stats. I went on three Dashes for this test and drove about six and a half hours on deliveries altogether. I put 90 miles on my personal vehicle, which was my big dump truck as I mentioned. Earned a total of $86, but factor in the 17 MPG that I was getting. And gas was I think around $3.60 a gallon when I was doing this. So less than $19 in fuel costs. True earnings are more like $67 or $10.31 cents an hour. So I mean, not a lot of money.
Sean Pyles:
So I’m going to wager that’s less than you’re making at NerdWallet on an hourly basis.
Tommy Tindall:
Yeah, yeah, yeah. Not giving up the main hustle.
Sean Pyles:
Yeah. Do you think this was worth it?
Tommy Tindall:
So yes and no, and I’ll start by saying I’m glad gigs like this exist because I was really blown away by the accessibility of this gig. I mean, I was signed up and through the background check in literal minutes, and if you, the listener, meets the basic qualifications, I mean you can probably start working and start earning, and I like that. It’s not like saying side hustle options, go be an influencer and wait a couple years to build a following before you make your first dollar. I mean, you sign up and you can make money, which I think is great. And flexibility of course is the selling point of a delivery driving job like this. But at the expense of what? I felt like I was really hustling. I didn’t make a lot of money and thinking back, I mean this would be a real grind for me to do on the side.
It’s really about where I’m in my life. I mean, I have a main job, I have a family, I have young kids in school and sports, a home that continues to break that I have to maintain, I serve in my church and I really covet kind of that little free time that I have left. So I guess all that to say, not quitting my day job. And I think doing this made me more grateful of my main hustle and reminded me that I think there’s merit in what’s become kind of an older way of thinking where you find a good company, work hard, build your skills, grow your confidence, gain expertise, and hopefully increase your salary over time. So whether it’s worth it I think depends on personal situation, because you do make money.
Sara Rathner:
So who do you think a side hustle like this is good for?
Tommy Tindall:
People who do have some extra time or need extra cash and can take advantage of the flexibility to work whenever, because again, that is the selling point of a job like this. Also people who can work the system to their advantage. And you see a lot of YouTube videos of people sort of gaming this and chasing something called peak pay, which is an incentive where you can add plus one, two, three, or more dollars to a delivery if it’s really busy. So the competitive types, which is not me, admittedly, but I do wonder if I would’ve tried this at a different time in my life, like back in college or in my first years working a job when I lived in Washington, DC, had it been available.
Sean Pyles:
Well, Tommy Tindall, thanks so much for talking with us.
Tommy Tindall:
Absolutely. Thanks for having me.
Sean Pyles:
So listener, you just heard Tommy describe an interesting way that he earned some money. Ahead of this month’s series about increasing your income, we have our new Nerdy question of the month for July, which is: what is the most creative thing that you’ve done to earn more money? Maybe you negotiated a significant raise or you’re one of those job hoppers that has a new gig every couple of years. Tell us what is the most interesting thing that you’ve done to increase your income?
Sara Rathner:
I mean, I’ve rented out my basement for a commercial shoot, so there’s that.
Sean Pyles:
Okay. Interesting.
Sara Rathner:
Made 1,400 bucks and bought new storm doors. What a day. Anyway, if you’ve done something like that or something else, call or text us on the Nerd Hotline at (901) 730-6373. That’s (901) 730-NERD, or email us at [email protected]. We might just share your story on a future episode. Maybe inspire some of our other listeners to take up an interesting side hustle.
Sean Pyles:
And while you’re at it, send us your money questions, too. It is our job as Nerds to answer whatever your money question is. So send it our way on the Nerd Hotline, (901) 730-6373 or email it to us at [email protected]. Well now let’s get into this episode’s money question segment after a quick break. Stay with us. We’re back and answering your money questions to help you make smarter financial decisions. This episode’s question comes from Adrian, who left us a voicemail. Here it is.
I’m a recent college graduate. I graduated college in June of 2023 and I am six months into my new corporate world job. I’m trying to save 25% of my income per month and I’m trying to start investing. I don’t really know what my savings goals should be. I’m down for some high risk investments, but I don’t know, I’m trying to just learn the basics of investing, how to plan for life. What would you do if you were in my shoes, if you could go back in time and be 23 and not have kids or a mortgage or anything?
Sara Rathner:
To help us answer Adrian’s question on this episode of the podcast, Sean and I are joined by our co-host, Elizabeth Ayoola. Hey Elizabeth.
Elizabethy Ayoola:
Hey, my favorite dynamic duo.
Sean Pyles:
I love getting a question from a listener who is so young because even though they’re only 10 years younger than me, it does feel like a lifetime ago that I was 23 and making these financial decisions for the very first time. One thing that I find really interesting about Adrian’s question is that while they are so early in their financial journey, their questions really can apply to anyone, because as I’m sure we all know well, plenty of people in their 30s and 40s and beyond are still trying to figure out their budgets and their financial goals. So with that in mind, I think that our listener and all listeners really could benefit from a little bit of budgeting 101. So Elizabeth, where do you think they should start?
Elizabethy Ayoola:
Basically, I think they need to start with a budget. That’s going to tell you how to slice and dice your money. You should probably maybe start with the 50/30/20 budget, which we are advocates for at NerdWallet, or it might be the 60/30/10 budget depending on your cost of living and where you are. Now, for those who don’t know what the 50/30/20 budget is, 50% go to your needs, 30% to your wants and 20% to debt, paying down debt and also saving money. I do think it’s important to know, however, these numbers are not set in stone. It really just depends on your finances and you can adjust the numbers to fit where you are in your financial life right now. I myself currently save above that 20 bucket, but luckily I don’t have that much debt, so that’s why I’m able to save more money and save more than the 20.
Sean Pyles:
Yeah. And our listener wants to save 25% of their income, which is really ambitious, especially for someone who is so young. I think when I was 23, I was saving maybe 2% of my budget, and it wasn’t even intentionally, it was just by chance, because that’s what I had left over at the end of the month.
Elizabethy Ayoola:
You were doing great, Sean, because let me tell you, I was saving 0% of my budget at 20 something. So that is ambitious. I think it’s possible, but it just again depends on where your finances are.
Sara Rathner:
I like an ambitious savings goal, especially when you’re young. Some of the best advice I was given by a CFP that I used to work with was save as aggressively as you can for as long as you can because life only gets more complicated and more expensive. So if aggressive for you is 3%, that’s great. If aggressive for you is 25%, that’s great, and if you have to change it up from month to month, that’s fine too.
Elizabethy Ayoola:
So our listener is dedicated to being a hardcore saver, and I love that for you, listener. So Sean, I know you’re also big on saving and you have some tricks for effectively saving money. What do you think?
Sean Pyles:
So I would start by encouraging Adrian to have something to save for. Again, I’m thinking a lot about myself in my early 20s, I didn’t really have any sort of short, medium, or long-term goals or priorities of any sort because I was just focusing on paying my rent and having fun. So I understand how it can be hard to understand what your priorities might be, and this is where I think something that’s very woo woo but effective can come into play. And that is a visualization exercise. Now, if you’re rolling your eyes, just bear with me because I swear it can be super helpful. So when you are 23, 33, 43, think about where you see yourself in the future in five years, in one year, in 20 years. So maybe that means do you want to move to a new city in the next year? Do you want to buy a house in five years? Do you want to retire in 40 years? Imagine where you will be at these different points in your life and think about how you can save money to get there.
Elizabethy Ayoola:
I would not even say that’s woo woo, Sean. I mean, so I definitely started doing that in my late 20s and honestly, the life I have today was a lot of the woo woo stuff. So it worked for me.
Sean Pyles:
The manifesting is real.
Elizabethy Ayoola:
It’s a real thing.
Sara Rathner:
And if you’re not really into the whole idea of manifesting as a term, that’s fine too. You could also think about it in terms of just naming your goals. Instead of just being like, I’m going to save 25% of my salary. For what? So say what the “what” is. So maybe online savings accounts like high yield savings accounts, you could actually name the account. So you could have, this is the account because I need to replace my car, or this is the account because I need to buy a new computer. Or this is the account that I’m saving up for a down payment on a home for. And then beginning to say, okay, I’m going to put this amount of money in this month for this goal and this goal. Makes it so much easier to stay organized and there’s some science behind it, making it so that you actually are more successful in terms of reaching your savings goals by just naming the goal. So if you don’t want to do the woo woo thing, you could do the practical thing and just put some names on stuff.
Sean Pyles:
Yeah. And what you’re talking about there is really the marriage of the woo woo and the super practical and tactical, where you can start with knowing what you want and then getting the accounts that can help you save the money for that. So for a lot of people, that’s going to mean starting out with an emergency fund, building up over time three to six months of the needs budget that you have. That’s like rent and medicine and groceries, things like that. And then building out the other savings buckets for things like a vacation fund, a house fund, a wedding fund. I have 10 savings accounts across all of the banks that I partner with. And they are all specifically allocated for my different goals. I know 10 is kind of a ridiculous amount, but it works for me.
And what makes it easy is that I automate my deposits into these accounts. So I don’t even have to think about it. One of my accounts is only getting $40 a month, and that’s enough for me to save, to build on that goal over time. But I don’t have to be worried about, oh, okay, am I going to have enough for when I need a new rug for my house eventually. I just know it’s already going in the background.
Sara Rathner:
Yeah, I love this. It’s that concept of reverse budgeting where you automate transfers into your various accounts for different goals every month.
Sean Pyles:
And whenever we talk about savings accounts, it can be easy for we Nerds who are steep in this to maybe even take for granted the fact that high yield savings accounts are such an amazing thing for people to have. People can be getting even around 5% back for what they have sitting in their savings. And if you think about some average returns from the stock market some years are around 7%, and that can be much riskier than just having a savings account. I really do recommend people shop around, look at some of our roundups on NerdWallet and see what sort of high yield savings account might help you meet your goals, because you’ll be getting a much greater return on your money than you would get from a traditional brick and mortar bank.
Sara Rathner:
So our listener, Adrian, is a spring chicken in the world of finance and in the world of investing, which they also mention, having a long time horizon can be one of your best assets. And if you’re in your 30s and listening to this, you still have a long time horizon. So don’t think it’s all over if you didn’t invest in your 30s. Now let’s talk about investing at a younger age. Elizabeth, what are your thoughts there?
Elizabethy Ayoola:
Oh my gosh. I totally get the feeling of being overwhelmed and not understanding where to start. But it’s really important I think, not to let that paralyze you and to just start as soon as you can. And the first step in doing that is creating a strategy. And what the strategy is going to do is it’s going to tell you what your goals are and how much you need to save to achieve them and by what timeline. Now, it doesn’t have to be over complicated because I think that’s where people get tripped up, especially because there’s so many retirement and saving calculators online to help with this. And yes, I’m going to shamelessly plug NerdWallet. We have lots of those, go check them out. But yeah, knowing what age that you want to retire and how much you need will help guide your investing strategy. It’s also going to help you decide what to invest in, the best vehicles to use, and how much to put in each. What do you think, Sara, about time horizons in that sense?
Sara Rathner:
Oh, it’s probably one of the best things you have working for you because the way compound interest works mathematically is the longer of a time horizon you have, the less you can save per month or per year and still come out with a higher amount of money in the end versus waiting an extra 10 years, an extra 15 years, then you have to invest so much more per month just to catch up and still end up with less money overall.
Sean Pyles:
And I would recommend Adrian or anyone else who’s getting started in investing or just taking it seriously for the first time, is to get a lay of the land and understand all of the different investment accounts that are out there. Because there are all these different ones, like a 401k and a Roth and a Roth IRA that people have probably heard about, but really understanding what they are and when one is more beneficial than another for your circumstances can help you make the most of your investments. And something to think about too, since Adrian is so young, is that your younger years are often the best time to take advantage of an IRA because you are getting taxed at a lower rate when you’re earning less money than you will be taxed at later on in your career. So really use these early years to your advantage.
Elizabethy Ayoola:
Yeah, I’m with you Sean. You guys also should decide for those people listening whether you want to do active or passive investing. If you are like me and you ain’t got time for that, and when I say that, I mean checking the stock market every day, then you may want to consider passive investing and some passive investing options include ETFs or robo-advisors and kind of securities like that. But yeah, once you do all those things, the most fun part is automating your investments and knowing that you’re probably growing both while you’re sleeping.
Sean Pyles:
Yeah, I think for a lot of people, sometimes the best strategy to start can be the strategy of “I want my money to make me more money.” And that’s where I started out in my mid 20s when I first started taking investing seriously. I didn’t want to spend a lot of time actively managing investments. And guess what? Actively managed investments often perform worse than passively managed investments. So passive is probably going to be the easiest thing for most people to do. And I just set up an account with a robo-advisor that was trusted and well-reviewed on nerdwallet.com, and I just have automated deposits and it makes it super simple. I’ve been doing it for years and I’m already receiving literal and metaphorical dividends from that.
Elizabethy Ayoola:
Also, you want to think about fees when you’re looking at things like that and what has low fees and performance and other things, but don’t let that stop or overwhelm you as well. Just check out some resources on how to pick an ETF also.
Sara Rathner:
Yeah, I will also add that whenever I hear somebody in their early 20s say that they are, “Down for some high risk investments,” I think somebody’s been talking to their friends about crypto and I don’t know. I mean, for all I know Adrian just means, oh, I really want to dabble in a more stock forward portfolio. Sure. Honestly, you’re probably talking about crypto, aren’t you? Before you dabble in speculative investments, things like cryptocurrency, things like, I don’t know, precious metals and real estate and all sorts of stuff like that, you want to set aside a solid foundation. Just the things that we’ve been talking about, automating transfers of money into retirement accounts, either through your employer or on your own, diversifying those investments. And then, only then, if you have money left over, then you can dabble a little bit, sprinkle a little spice onto your investments, maybe 10% of your portfolio at the most into the higher risk, like crazy stuff. But set a good foundation first. Don’t put all of your money into speculative investments and then wonder why you don’t have any money left because you probably won’t.
Sean Pyles:
And I will just quickly add for the sake of our compliance department, that we are not financial or investment advisors. If you want specific individualized investment advice, speak with a financial advisor, hopefully a fiduciary financial advisor. Okay. Now, I know we’ve been kind of talking around this question for this conversation, but I would love to hear what you two would have done differently if you could go back to when you were 23 and maybe improve your finances, knowing all that you know now?
Elizabethy Ayoola:
That’s a deep, deep, deep sigh. So honestly speaking, the first thing I thought is like, oh my God, I would’ve stopped partying and buying alcohol and save more money. But then I remembered that I was living in Nigeria earning like $400 a month, which was seen as a good salary. So I barely had any money to live, quite frankly. And I think that’s a reminder that sometimes you just ain’t got really barely enough money to save and you just need to earn more. But I definitely would have educated myself more on personal finance and I would’ve at least stashed away something into an investing account. So that’s what I would’ve done. But then again, if I started investing too early, I might be in Turks and Caicos right now instead of chatting to you all. So I guess it worked out how it was supposed to.
Sean Pyles:
I’m glad you’re here with us, but also I would be happy for you if you were traveling the world instead of doing this. Sara, what about you?
Sara Rathner:
So I think a lot of people in their early 20s are, there’s just a lot of fear and uncertainty at that point in your life, and I definitely felt that at that time where there are all these big life milestones that are coming up for you eventually and you just don’t know when they’re going to happen. And so I was so worried about whether or not I’d be able to get to that point. But you’re 23.
Knowing how fast the next 10 to 20 years will go for you, just savor it because everything else is going to pile on really, really fast. And the way you spend your weekends is going to look really different. Do take a couple of steps to improve your position in life later on and use that gift of time. But then, yeah, you should have the wants budget, you should go travel with your friends, go out with your friends. Once you all get partnered up, you’re not going to see your friends as often, so enjoy it.
Sean Pyles:
Well, as someone who definitely enjoyed themselves a lot in their early 20s, I don’t regret any of it, really, shockingly, but it did come at the expense of my financial health in some senses. I really didn’t invest until my mid 20s. I barely had a budget until around the same time. So I would go back and encourage myself to be a little bit more balanced in the having fun and the forward planning aspect of life. But you’ve got to learn your lessons as you learn them. And that’s where I was at the time.
And one thing I think is important to realize and think about as you are trying to map out what having an adult financial life looks like is that the beginning of this financial journey is always going to be the hardest because you simply don’t know what you don’t know. There’s so much to learn. When you’re 23, you’re paying rent on your own for the first time. You’re figuring out how to make meals for yourself for the first time and building these good habits does take time. So don’t feel like you have to do everything all at once, but do make that concerted goodwill effort to try to better your relationship with money and use it to build the life that you want. Well, Elizabeth, thanks so much for coming on and talking with us.
Elizabethy Ayoola:
Thanks for having me.
Sara Rathner:
And that’s all we have for this episode. Remember, we’re here for you, whatever life phase you’re in, and we want to hear your real world questions because we’re here to make you smarter about your money decisions. So turn to the Nerds and call or text us your questions at (901) 730-6373. That’s (901) 730-NERD. You could also email us at [email protected]. Also visit nerdwallet.com/podcast for more info on this episode.
Sean Pyles:
And remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts and iHeartRadio, to automatically download new episodes. This episode was produced by me. Tess Vigeland helped with editing. Sara Brink mixed our audio. And a big thank you to NerdWallet’s editors for all their help. And here’s our brief disclaimer again. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.
Sara Rathner:
And with that said, until next time, turn to Nerds.
The typical cost of residential solar panels in Florida, before the federal solar tax credit, was $33,673 in the second half of 2023. This is lower than the national average of $34,122. The average system size is 14.3 kWs, compared to the national average of 11.6 kWs.
Florida’s primarily humid subtropical climate requires a lot of energy for air conditioning. Installing larger systems makes sense in a state that has one-to-one net metering, which allows customers to offset more of their energy bills with solar. The state’s net metering policies and abundant year-round sunshine have fueled strong adoption of residential solar. Florida has few state tax rebates and solar incentives compared to other states, but customers there may still qualify for the federal tax credit
N.C. Clean Energy Technology Center at N.C. State University. Programs. Accessed Jun 28, 2024.
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Solar costs in Florida at a glance
Typical cost of home solar system before federal solar tax credit
Typical cost of home solar system after federal solar tax credit
Median cost per watt
Average system size
Source: EnergySage, a solar and home energy product comparison marketplace founded in 2012. Data is from the second half of 2023.
Costs and trends in Florida
Solar has been having a moment in Florida, part of a general upward trend in interest and installations.
“Florida is ranked third nationally in solar growth, and it is continuing to grow in popularity,” said Wendy Parker, executive director of the Florida Solar Energy Industries Association (FLASEIA), in an email
. “Most of the state still has net metering, which makes it very favorable to homeowners.”
System sizes are high in Florida compared to other states, at 14.3 kW on average in the second half of 2023. A contributing factor is the falling cost of solar installations, which went from $2.45 per watt in Florida in early 2023 to $2.35 per watt in the second half of 2023.
System size is also often tied to average monthly energy consumption, which is comparatively high at 883kWh per month in Florida.
“In the past year, prices have been trending down, and levelizing some. Certain equipment has come down in price, and extra competition in Florida has driven costs down from some companies. We’ll have to see what the tariffs do, potentially driving prices back up,” says Dan Massaad, CEO of Guardian Home, an energy-efficient home services and solar installation business in Florida.
Florida established statewide renewable energy goals in 2022 but repealed them in May 2024
,. Legislation and incentives may vary with the future priorities of new political administrations.
Tax incentives and rebates in Florida
Net metering. Florida adopted net metering in 2008, as well as guidelines to allow residential solar to interconnect with utility grids. Net metering allows homeowners to sell excess electricity to the local utility.
Property tax breaks. Florida has a property tax incentive for renewable technologies. It ignores the increase in property value due to the installation of solar panels. This savings can add up over time
.
Tax credits. Florida doesn’t offer state and local rebates or incentives on rooftop solar panels. However, customers may qualify for the federal tax credit.
Low-cost loans. Some cities offer solar loan programs. For instance, the City of Tallahassee Utilities offered a 5% loan with a 10-year term for solar panel installations, with a maximum loan amount of $20,000
.
Related equipment rebates. Providers like the Fort Pierce Utilities Authority also offer flat rebates on solar water heaters. If you intend to include a solar water heater in addition to a solar panel system, check for this type of incentive in your area
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“Florida is a net metering friendly state,” Massaad says. “A lot of the big utility companies give you a true 1-to-1 credit on whatever you overproduce, so it makes a lot of sense for many clients to go solar.”
Energy storage in Florida
Floridians often use the grid as their backup, but interest in battery storage is on the rise.
“In Florida, the battery storage is often for clients who are more concerned with power outages, like with hurricanes, and those clients have some control to either operate a room or a few circuits, or a whole home backup,” Massaad says.
The average cost of battery backup was $16,887 in Florida in June 2024 before the federal tax credit. However, a small battery for key circuits in one part of the house may cost less and can help cool one part of a home during extreme heat or keep important medical equipment running during a power outage.
Frequently asked questions
How should you pick a solar panel installer in Florida?
In addition to installation price, find out how long a solar panel company has been in business and read reviews. “The absolute cheapest company may not be building a sustainable, service business for the client, so do your research and make sure you’re asking questions about longevity,” Massaad says.
What kind of roof makes installing solar panels more complex?
Most roof types can work with standard solar panel mounting, but clay tile roofs are occasionally used in Florida. The solar mounting supplies can break the fragile tiles, so prepare to pay for additional labor to keep the roof tile safe.