UK homeowners are renting out a room in their house as a way of making some extra money amid the cost of living crisis that has pushed mortgage rates to record highs.
Over one in every 10 (12%) London homeowners have started renting out a room in their house in the past year to generate additional income, according to Barclays Consumer Spend report.
The trend is not exclusive to the capital, as some 3% of homeowners across the UK have also rented out a room in their property to make a bit more money.
UK homeowners have been particularly hit by cost of living woes, with the average rate on a two-year fixed deal currently stands at 5.74%, while for a five-year deal, rates are around 5.24%, according to figures from Uswitch.
Borrowers would need to spread their home loans over more than 70 years to be able to afford the same mortgages on offer just two years ago, banks have said.
Mortgage rates have risen substantially as the Bank of England increased interest rates to a 16-year high in a bid to tackle inflation.
The data from the Barclays report showed that one in six (16%) aren’t confident about their ability to meet their mortgage or rental payments, and 18% of those with mortgage or rent payments are adjusting their spending habits to cope with rising housing costs.
Still, consumers’ confidence in their general household finances remained steady in March, at 67%.
Jack Meaning, chief UK economist at Barclays, said: “With an expectation that the Bank of England will cut interest rates from June, and banks responding by reducing mortgage rates, our research suggests that the housing costs that have been a drag on consumers for over a year are on the cusp of a turn, and will become a boost to spending from H2 and beyond. Today’s data shows this transition happening in real time.”
Higher mortgage rates have also hit the property market, as house prices fell for the first time in six months in March amid rising mortgage rates, according to Britain’s biggest mortgage lender.
A typical home now costs £288,430, around £2,900 less than last month, said Halifax.
Household spending such as DIY and electronics fell 5.2% in March, with one in six (16%) holding off home renovations due to current economic pressures.
Bad weather hits consumer spending
Consumer card spending growth flatlined in March as wet weather dampened both retail and restaurant sales.
Retail spending remained almost flat at 0.7%, brought down by falling in-store spending. Face-to-face retail (excluding groceries) was down 2.1% and clothing fell -1.8%, as spring showers deterred shoppers from visiting the high street. Meanwhile, restaurants had another challenging month, down 12.6%, consistent with the fall witnessed in February (13.4%), Barclays said.
This comes as 45% of consumers said they were continuing to rein in discretionary spending, with the majority (53%) of this group cutting back on clothing and accessory purchases, and nearly half (47%) spending less on dining out.
Britons are more concerned than ever about the cost of every day items, with concerns about general inflation shooting up to 87%.
Karen Johnson, head of retail at Barclays, said: “Retailers were braced for a more subdued start to 2024, and recent figures are in line with expectations. The wet weather has been a key factor in the slowdown in discretionary spending, as it’s meant fewer visits to the high street and to hospitality venues.
“However, in spite of this initial lull, many retailers are confident that spending will rebound in the coming months, particularly in anticipation of better weather, the energy price cap drop, an uplift in the National Minimum Wage, and the buzz around major events such as Taylor Swift’s Eras Tour and the Paris 2024 Olympics.”
Easter helps retail sales after difficult start to year
A separate report by the British Retail Consortium (BRC) and KPMG Retail showed a more optimistic view on the UK retail sector in March.
Total UK retail sales were up by 3.5% on last March, above the three-month average of 2.1% and the 12-month average of 2.9%, according to the British Retail Consortium (BRC)-KPMG Retail Sales Monitor.
Food sales increased by 6.8% year on year, driven by Easter falling unusually early and the subsequent uplift ahead of the long weekend.
Easter also boosted sales of products such as cookware and tableware, as people readied themselves to host family and friends. Home textiles such as throws and pillows were also popular as consumers sought to spruce up their homes ahead of spring.
Elsewhere, wet weather dampened sales of garden furniture, barbecues, DIY products, and clothing and footwear.
Online sales continued to slide, falling by 1.4% despite strong performances in home accessories, health, beauty, and homewares.
BRC chief executive Helen Dickinson said: “After a difficult start to the year, retailers are hopeful that with warmer weather around the corner, consumer confidence will spring back up.
“A strong retail industry can boost investment across our towns and cities, and as we gear up for a general election, it is essential the next government recognises this and rethinks the burdensome costs imposed on retailers.”
Watch: London house prices pull ahead in reversal of ‘race for space’
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The median pay for professional photographers is $40,170 per year, according to the most recent data from the Bureau of Labor Statistics. That said, there is a broad range of earning possible, depending on what kind of photographer a person is and where they live.
Photography may become a more in-demand skill in the future, given what a visual culture exists today. Over the next decade, it’s anticipated that photographers will see job demand increase by 5% between 2022 and 2032, which is greater than the average for all professions.
Read on to learn more about the salary and other facets of a career as a photographer.
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What Are Photographers?
A photographer combines technical expertise with creativity and composition skills to produce photographic images. Photographers can get paid to take wedding, family, or pet portraits; cover news events; work for businesses and brands shooting products; or create art — among many other types of photography work.
Many photographers are also skilled in editing photos. If a photographer works for themselves, they can also be responsible for running their business and everything that entails, from advertising to accounting to operations. There are so many directions a photographer’s career can take. Some photographers also teach the art of photography, help plan creative direction for photo shoots, or use drone technology to capture shots from the sky. 💡 Quick Tip: Online tools make tracking your spending a breeze: You can easily set up budgets, then get instant updates on your progress, spot upcoming bills, analyze your spending habits, and more.
How Much Do Starting Photographers Make a Year?
When they are earning an entry-level salary, how much money a photographer makes is typically on the low end of the spectrum. Their earnings will likely grow as they gain skills and experience and make connections in the industry.
The lowest 10% of photographers earn less than $12.98 per hourly pay. That may be a good starting point if you are wondering about starting salaries.
Keep in mind that photographers in different locations and areas of focus will make an array of salaries. For instance, someone who takes baby portraits for new parents in a small town will likely never earn as much as a high-fashion photographer in a major city who is being paid by corporate clients. The latter could make $100,000 a year or considerably more.
Recommended: What Trade Makes the Most Money?
What is the Average Salary for a Photographer?
The average salary for a photographer can depend a lot, as already noted, on where someone lives. While the median annual income for this role is $40,170, the following table illustrates how the state a photographer chooses to work in can impact their potential earnings and determine if it’s a high-paying job.
What is the Average Photographer Salary by State for 2023
State
Annual Salary
Monthly Pay
Weekly Pay
Hourly Wage
Oregon
$48,870
$4,072
$939
$23.50
Alaska
$48,629
$4,052
$935
$23.38
North Dakota
$48,622
$4,051
$935
$23.38
Massachusetts
$48,041
$4,003
$923
$23.10
Hawaii
$47,595
$3,966
$915
$22.88
Washington
$46,501
$3,875
$894
$22.36
Nevada
$45,979
$3,831
$884
$22.11
South Dakota
$45,953
$3,829
$883
$22.09
Colorado
$45,377
$3,781
$872
$21.82
Rhode Island
$45,265
$3,772
$870
$21.76
New York
$43,131
$3,594
$829
$20.74
Delaware
$42,656
$3,554
$820
$20.51
Vermont
$42,118
$3,509
$809
$20.25
Virginia
$42,039
$3,503
$808
$20.21
Illinois
$42,025
$3,502
$808
$20.20
Maryland
$41,311
$3,442
$794
$19.86
Nebraska
$40,429
$3,369
$777
$19.44
Missouri
$40,178
$3,348
$772
$19.32
California
$40,067
$3,338
$770
$19.26
South Carolina
$39,831
$3,319
$765
$19.15
Pennsylvania
$39,512
$3,292
$759
$19.00
New Jersey
$39,430
$3,285
$758
$18.96
Oklahoma
$39,153
$3,262
$752
$18.82
Maine
$39,132
$3,261
$752
$18.81
Wisconsin
$39,049
$3,254
$750
$18.77
North Carolina
$39,009
$3,250
$750
$18.75
New Hampshire
$38,424
$3,202
$738
$18.47
Idaho
$38,328
$3,194
$737
$18.43
Texas
$38,071
$3,172
$732
$18.30
Kentucky
$37,948
$3,162
$729
$18.24
Wyoming
$37,814
$3,151
$727
$18.18
Minnesota
$37,716
$3,143
$725
$18.13
Michigan
$37,565
$3,130
$722
$18.06
New Mexico
$37,504
$3,125
$721
$18.03
Indiana
$37,314
$3,109
$717
$17.94
Ohio
$36,661
$3,055
$705
$17.63
Arizona
$36,543
$3,045
$702
$17.57
Connecticut
$36,357
$3,029
$699
$17.48
Mississippi
$36,102
$3,008
$694
$17.36
Iowa
$36,056
$3,004
$693
$17.34
Montana
$35,992
$2,999
$692
$17.30
Arkansas
$35,860
$2,988
$689
$17.24
Alabama
$35,543
$2,961
$683
$17.09
Utah
$35,026
$2,918
$673
$16.84
Tennessee
$35,001
$2,916
$673
$16.83
Kansas
$33,992
$2,832
$653
$16.34
Georgia
$33,110
$2,759
$636
$15.92
Louisiana
$32,930
$2,744
$633
$15.83
West Virginia
$30,515
$2,542
$586
$14.67
Florida
$29,303
$2,441
$563
$14.09
💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.
Photographer Job Considerations for Pay & Benefits
While photographers can often choose to set their own rates, they are also usually self-employed and therefore responsible for securing their own benefits. For instance, they won’t have access to an employer-sponsored 401(k) plan or healthcare benefits. There are some exceptions to this rule. For example, if a photographer works for a large corporation or photo studio, they may receive access to traditional employee benefits like paid time off and a retirement plan contribution match.
Other considerations can be how a career as a photographer can impact your lifestyle. If you are a news photographer, you may find that you have to be available for extended periods, whenever a situation comes up that needs documenting. If you are a travel photographer, which can sound like a dream job, you likely won’t have a typical week-to-week schedule. And if you are a wedding photographer, you will likely be spending many weekends shooting ceremonies vs. kicking back with your family.
There are some photography jobs, such as taking pictures of a product, that may not involve that much social interaction, but many kinds of photography careers do involve working with people non-stop. For this reason, it may not be the best job for antisocial people.
Pros and Cons of Photographer Salary
The main advantage of a photographer’s salary is there is no real cap on how much they earn. For example, in-demand wedding photographers or photographers who license their images for products can all demand high rates for their work. On the flip side, their salaries are often not consistent, which can be very stressful. Also, when you are self-employed, taxes can take a bite out of your earnings.
Recommended: What Is Competitive Pay?
The Takeaway
Working as a professional photographer can be a creatively fulfilling, fun, and lucrative career. Worth considering, though: How much a photographer stands to make depends a lot on their specialty, where they live, and their level of experience.
See exactly how your money comes and goes at a glance.
FAQ
Can you make 100k a year as a Photographer?
It is possible to earn $100,000 or more a year as a photographer — the sky really is the limit when it comes to income potential in this field. However, the median annual income for this role is $40,170, but photographers can earn more over time as they gain experience and a strong reputation in their industry.
Do people like being a photographer?
Many people who pursue a career in photography do so because it is a creative pursuit they are truly passionate about. Many positions can provide flexibility and fun experiences (say, if you are a travel or wedding photographer).
Is it hard to get hired as a photographer?
It can be very hard to find a job as a photographer if you don’t have the skill set required to get the job done well. Taking some time to build a strong portfolio of your work and then marketing your business can make it much easier to get hired.
Photo credit: iStock/ivan101
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The concept of new vs. old wealth did not exist until fairly recently in human history; before that, most people could not have even imagined that they were one or the other kind of person simply because there was no such thing as cash!
Typically, old money is people with a lot of resources who are looking to pass on what they have in order to secure their future. New money, on the other hand, comprising mostly or exclusively by entrepreneurs starting from scratch.
The concept of old money vs new money has been around since the 1920s -yet many people have not given much thought to the concept.
Since most people feel like they will never belong in either group of people – old money or new money.
Are you interested in the concept of old money, but need to make it happen with new money? There are many reasons why you should give both styles of money a chance.
Over time, old money becomes new money.
A lot of people are fascinated with the idea of becoming independently wealthy quickly, right! But, what about those who want to become wealthy gradually? It takes time for old money to become new money.
There is a lot of discussions these days about the old and new money.
When you’re trying to make a big change in your life and start to build your own wealth, it can be difficult.
In order for the change to stick and grow into something more permanent, there are many steps that must take place. Lessons learned from old money.
If you are looking to improve your finances, then this post will help spark some inspiration!
What is Old Money?
The definition of “old money” is describing a social class of people we consider members of the upper class in society. This type of old money has been around for centuries and can be traced back to previous generations.
Old money is a wealth passed down from one family generation to another.
It is not “new,” and old money is a result of work that has made their first generations wealthy.
However, many people do not know about the qualities of old money because they may have been brought up as “old” money is only for a select few.
In today’s society, it is easy to identify someone as having old money because they are typically wealthy and have descended from many generations. You may look down on those who have old money for being “old-fashioned” or not “progressive” enough or just “trust fund” babies. This is a misconception.
Many of those with old money carry the wealth that has been given to them by their ancestors with dignity, insightfulness, and grace. Even when others lost everything due to greediness, they were able to withstand time periods of economic hardship.
Old Money tends to be more generous and kind than new money, which is often seen as selfish.
You can look at families such as the Vanderbilts or even the Rockefellers as old money passed down from generation to generation.
Even in Europe, the term “old money” associates with wealthy families. These families have been able to keep the wealth and power that they have passed down from generation to generation, as well as the pride of their heritage.
What is New Money?
New money is the self-made wealthy people in the world who have made it big.
New money is the recent abundance of money that has created their wealth.
It is new to them, and it took a lot of time for them to get where they are.
New money refers to self-made millionaires of the world, such as Jeff Bezos, Steve Jobs, and Mark Zuckerberg. They are rich because they were able to create a product or service that would go on to be one of the most popular products in their respective markets and quickly become successful.
Most of the new money is mainly found in occupations like technology, sports, and entertainment. These self-made millionaires of the world are entrepreneurs and innovators who have helped shape our society as we know it today.
Many of these people may have grown up poor or broke without extra money for anything. They did not have the support of old money to help them find success.
However, today, they can show that they have a lot of money.
What is the difference between old money and new money?
New money is made recently, whereas old money is made by previous generations in years prior.
Beyond that, there are some notable differences of old money vs new money behavior.
Chance to Make New Money
The biggest difference between new and old money is that new money has a lot of competition, which means there are many more opportunities to earn it.
You can make new money today.
You cannot change your heritage and family’s ability to pass down old money and wealth to you.
This is great for those with an entrepreneurial spirit. They can start to build wealth today.
Wealth Source
New money is self-made and old money is inherited.
Old and new money can be differentiated by who created the wealth.
You have old money if you inherited something from your parents or grandparents. Inheritance is when one person or business transfers part of its assets to another person at the time of death.
Earned wealth is the result of an individual’s effort and hard work, which is seen in the person’s bank account. Creating new money happens in your lifetime.
You are able to pass down that wealth and then, it becomes old money.
Tolerance for Risk
Old-money investors typically do not take on risks. So, they would not invest in something that has a 50-50 chance of working out. That’s why old money is safer than new money because it has a much lower risk factor.
Old-money investors typically invest in things they know will work out such as real estate, long-term investing, or other businesses.
New money takes on a lot of risks because you cannot rely on it as much as you would with old-money investments.
New money investors are starting from zero with nothing. They have much less to risk and the reward is much higher.
Social Perception
New money is not as elitist as old money.
People’s perception of old money is different from new money.
Old money has an attached stigma to the lifestyle they must maintain. In the United States, old wealth is more respected than recent wealth. This idea comes from the social perception of those who are wealthy for a long time and are able to maintain their status with ease.
People who come from lower-class societies often will have a hard time being accepted into high society. Thus, why old money and new money collide on many hot topics.
New money entrepreneurs may grow up poor and end up in a higher class than their parents. However, they may still be looked down on by those of Old Money because they grew through grit and ingenuity.
Differences in Spending Habits
The difference in spending habits between each group is not just limited to the amount of money they spend. Not only do different people have different tastes and needs, but there are also differences in how much people are willing to spend on certain items.
For example, there is a difference between people who buy luxury goods and those who don’t, but both groups could have the same amount of income.
There are many differences in spending habits between old money families and new money.
However, it is important to understand that they do not have a direct correlation with success or financial status.
For old money, they tend to be willing to spend money to uphold an appearance and a certain lifestyle. Yet, they are careful to make sure the family money can be passed on for generations.
Whereas, new money has wildly different spending habits. Some are frivolous with their money because they have waited so long for the opportunity and know they can always make it back again. Others are more hesitant to spend because they worked too hard to get where they are at today.
When does New Money become Old Money?
There is no clear line between old and new money, but the comparison still has value because there is still enough generational wealth to draw from.
The transition from new money to old money happens when the generational wealth is passed down.
The perception of old money was made in the early 1900s. In fact, old money is just wealth passed down and lasts another generation.
The hardest part for new money to become old money is teaching the younger generations how to manage their newfound wealth.
In addition, the common “new money” folks with net worth of over $2 million may not have the right advisors like the billionaires to properly transfer their wealth to future generations and start to build the old money way of life.
Do you know what 10 figures in money is?
Old Money vs New Money Examples
The easiest way to differentiate between old and new money is that old money is inherited from the older generation while new money is created by the current generation.
Old Money has the privilege of being passed down for generations, giving it a sense of stability and security.
New Money comes with its own set of challenges in terms of debt, lack of legacy, and lack of time-tested investment strategies for saving or spending.
New-Age millionaires are self-made wealthy families with new money, making up a large percentage of the wealthiest Americans. These people tend to be more frugal than old-money families who may have been successful for generations and acquired their wealth in the past without much effort. The current generation is acquiring its own lavish lifestyles rather than relying on inheritance. New money families are considered “new entrants” into an exclusive club for old money family members and can feel like they’re being left out due to their lack of legacy.
There are many reasons to give old money a chance, including the fact that it is more likely to be passed down than new money.
Old money is inherited while new money is created by the current generation. Old families are seen to be more educated and refined. In addition, they tend to spend less on luxuries because they know the next generation will have their hands full with managing their possessions.
Old Money is seen to be more classy than New Money.
Accordingly, Old Money families are considered a higher class, with roots going back centuries and attributed to industrialists from a previous era of wealth creation.
Why Take on an Old Money Mentality with New Money
There are many reasons why you should give “old money” a chance. Even if you were not born into inherited wealth, there are plenty of lessons to learn and pass along to your family.
Reason #1 – Financially Stable
First, the people who have old money are usually more financially stable and will be able to help out when times get tough.
They are taught how to be wise with money.
Learn if you embody one of the 32 habits of financially stable people.
Reason #2 – Life Experiences
Second, old money people are more knowledgeable and worldly than new money. They have a wealth of knowledge about the world and will be able to share it with you when hanging out with someone who is new money.
With old money, they have the resources to provide a higher level of education as well as travel to many countries.
However, you do not need money to do experience life to the fullest. One of the best ways to find immeasurable life experiences is to volunteer either locally or globally.
Reason #3 – Financial Safeguards
Third, old money people are more financial safeguards in place than new ones. So, they never worry about being broke or homeless due to the fact that they were born into wealth and their parents passed it down to them.
You can accomplish this with new money as well.
You must create financial safeguards to make sure a sizable chunk of your wealth is making a passive income. Thus, providing for your needs as well as your heirs for many years to come.
This is where a strong financial plan of how to transfer assets to the next generation is needed.
Reason #4 – Giving Back
Fourth, old money people usually give back more frequently than new money. As such, you can find many places with old money names on the building.
Here are some examples of what old money and new money can do:
– Give opportunities for young entrepreneurs
– Help create jobs and is an important part of the economy
– Give people a voice who don’t have many opportunities.
-Create funding for social projects that are beneficial to society
Reason #5 – Transfer Inherited Wealth
Lastly, there is something special about being able to pass down generational wealth.
This is something that comes with a lot of responsibility as you must teach your heirs how to manage money wisely.
However, you can build a lasting legacy beyond your own life.
Ready to Build New Money Wealth?
Money in the 1920s is much different than today.
Old money is usually inherited wealth or obtained through family connections. As technology increases, new money is replaced old money. However, when you look at industries like real estate where there’s not a lot of room for new money, it may be a good idea to give old money habits a chance.
When you give old money a chance in life, you will learn how much time-tested wisdom there really is behind these worldly possessions and riches.
Just because you want old money or new money, it does not greedy or extravagant. It means you know the value of a dollar and want the best for your family.
Embrace one of the many important habits of those with a background of wealth.
But the truth is, nobody likes the idea of talking about money, especially when it involves inherited wealth. So, have discussions today about long-term money decisions.
At the end of the day, it is more important to appreciate family ties over material possessions since they will last longer than any other form of wealth.
Old money offers wisdom to help new money avoid making the same mistakes.
The old money vs new money style is here to stay.
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.
Inside: Explore financial independence: Unveil why a debt-free life could be your path to riches, with practical strategies for lasting wealth without owing. Perfect for millennials or those new to managing money.
In an era where financial burdens weigh heavily on so many, adopting a lifestyle of debt-free living emerges as the modern epitome of wealth.
I’ve come to understand that true affluence isn’t just measured by the amount of dollars in your bank account, but by the freedom from the chains of debt. It’s not just about strict budgeting or cutting corners; it’s about the elevated sense of security and control that comes from owing nothing to anyone.
Encountering the peace of mind that accompanies a debt-free life has indeed propelled our financial well-being and moved us closer to our FI number.
But, the question for today, is being debt free the new rich, and the secret to true wealth. Let’s dig into that answer.
Debt-Free as the Gateway to Modern Affluence
In the past, wealth was often measured by the accumulation of material possessions and the perceived status they conferred.
Today, however, there’s a growing recognition that true affluence lies in financial freedom. Redefining wealth to include the absence of debt reflects a holistic understanding of prosperity in today’s economy.
Is being debt-free the new rich?
The question “Is being debt-free the new rich?” is more relevant than ever in a society enmeshed with credit and consumption.
Being debt-free signals a shift from traditional wealth, defined by material possessions, to a contemporary form of richness—one where financial stability and peace of mind take precedence.
Yes, being debt free will lead to increased wealth over time.
Debunking the Myth: Rich vs. Debt-Free
Many hinge their perceptions of wealth on income and assets without considering the crippling effects of debt. Being rich traditionally meant having substantial financial resources, but without considering debt, this view is incomplete.
Many individuals labor under misconceptions about living a debt-free life, believing it to be a goal that’s out of reach or mired in unrealistic sacrifices.
Let’s dispel these myths and highlight how a debt-free life is not only achievable but also a liberating choice that defies conventional financial norms.
Myth #1: You need a credit card to survive in today’s economy.
Many people believe a credit card is essential for building credit and making daily purchases. However, if you are unable to repay that credit card bill at the end of the month, then you shouldn’t use one.
Credit cards are helpful especially if you benefit from the credit card rewards. Many millionaires used the cash envelope system to get where they are at.
Myth #2: Student loans are the only path to higher education.
The notion that college is unaffordable without borrowing is widespread, yet there are numerous alternatives to student loans for funding education.
Learn how to get paid to go to school with scholarships, grants, work-study programs, and attending community college first. These are all viable strategies to pursue higher education without incurring massive debt.
Myth #3: Car payments are an unavoidable monthly expense.
Car payments are often accepted as a normal part of finance management, but it’s a myth that you’ll always have one. This one still makes me cringe – car payments are not considered normal.
By saving up and purchasing a reliable used vehicle, many can avoid the cycle of car loans, and even if a loan is necessary, paying it off quickly can relieve you from years of ongoing payments.
Myth #4: Debt is a necessary tool to achieve financial success.
Contrary to the belief that leveraging debt is how wealthy individuals build their empires, many successful people use debt strategically, if at all.
It’s possible to accumulate wealth through saving, investing wisely, and living within one’s means, all without relying on debt. Building wealth debt-free is slower but more stable and reduces the risks associated with borrowing.
Plus it increases the debt-to-income ratio.
Myth #5: Paying Off Debt is Too Hard and Takes Forever
Paying off debt utilizing strategies such as the debt snowball or avalanche method instead of waiting is crucial for several reasons.
Both approaches provide structured plans that create discipline, making it less overwhelming to tackle debt systematically. Paying off debts faster with these methods typically reduces the total interest paid over time, leading to significant savings.
Moreover, the quicker you become debt-free, the sooner you can redirect your income toward building wealth, saving for the future, or investing in opportunities. Finally, the psychological boost from witnessing debts disappear can be incredibly motivating, improving your financial confidence and relieving stress associated with high levels of debt.
Myth #6: Pointless to Pay Off Debt if Making More on the Money
Paying off debt can sometimes seem counterintuitive, especially if you’re making more on your money through investments or savings compared to the interest on your debt. While from a purely mathematical standpoint, it may make financial sense to keep the debt and grow your investments, the freedom from being debt-free transcends numbers.
However, the psychological benefits of not owing money—such as reduced stress, increased mental well-being, and the peace of mind that comes with financial security—often outweigh the potential financial gains from investing.
Debt can feel like a burden, and removing this can lead to a clearer mindset, freeing up mental energy and resources to focus on other aspects of life.
Myth #7: I’ll Be Broke Forever
Overcoming “I am broke” mindset to achieve debt freedom often requires a substantial shift in both behavior and perspective.
It involves breaking the cycle of living paycheck to paycheck and resisting instant gratification by prioritizing financial goals over immediate desires. Replacing impulsive spending habits with disciplined budgeting and intentional saving can be a challenging, yet empowering transition.
This transformation not only demands goal-setting but also a deep understanding that possessions do not measure true wealth but by financial security and the freedom it brings.
Myth #8 – Debt Won’t Limit Your Financial Freedom
Debt often acts as a chain that restricts monetary mobility.
Carrying debt means committing future earnings to past expenses, limiting the ability to invest in opportunities or save for unforeseen events.
True financial freedom can only be found when these chains are broken, unlocking the full potential to use your income to shape the life you desire. This is what you will learn here at Money Bliss.
Strategies for Achieving a Debt-Free Life
Achieving a debt-free life involves setting clear, attainable goals, exercising self-restraint to avoid unnecessary expenditures, and creating a focused plan of action to eliminate existing debts.
By embracing contentment and understanding that happiness isn’t tied to material possessions, one can redirect funds towards paying off debts, paving the way for a life with greater financial independence and security.
Tip #1 – From Calculating Debts to Making a Payoff Plan
Embarking on the journey to debt freedom begins with a clear assessment of your financial landscape. It’s essential to compile a comprehensive list of your debts, noting balances, interest rates, and minimum payments.
Armed with this information, constructing a tailored payoff plan becomes your blueprint to financial liberation. Taking this active step forward is where the climb back to solvency begins.
Tip #2 – Overcoming Social Pressures and Lifestyle Inflation
Social pressures and lifestyle inflation are formidable obstacles in the pursuit of debt freedom.
The urge to spend is often magnified by the fear of missing out (FOMO) and the desire to match others’ spending habits (aka Joneses). Overcoming these cultural norms is critical for individuals determined to maintain financial health and resist the lure of indebtedness.
Tip #3 – Budgeting, Saving, and Earning More
Budgeting is the roadmap to tracking and controlling your spending while saving ensuring you’re prepared for the future. Consider it carving a path to financial freedom.
Earning more, whether through advancement in your current role or side hustles, accelerates debt repayment. Balancing these pillars is key – spend wisely, save diligently, and earn aggressively to break the chains of debt.
Tip #4 – The Shift Towards Minimalism and Non-Materialism
A growing number of individuals are embracing minimalism, finding richness in life’s experiences over the accumulation of goods.
This paradigm shift from materialism to non-materialism spotlights the value of simplicity and intentional living. It’s a conscious choice to prioritize quality over quantity, creating space for financial freedom and personal growth.
Tip #5 – Investing and Saving: The Vehicles for Sustainable Wealth
Once debt is cleared, saving and investing become the twin engines driving the journey toward sustainable wealth. This is the #1 overlooked thing I see too often.
The idea of investing in stocks is overwhelming to too many; thus, you are doing nothing with your money.
A savings account offers a cushion against life’s uncertainties, while investments can grow your wealth exponentially over time. By harnessing the power of compound interest and diversification, you’re not just avoiding financial pitfalls but actively building your monetary legacy.
Tip #6 – The Necessary Sacrifices for Long-Term Gain
Achieving debt freedom often requires sacrifices that can test your resolve in the short term. I can attest to this over and over. But, then I see progress on my journey and I’m grateful.
Whether it’s forgoing a luxury purchase, downsizing your living space, or choosing a staycation over a lavish holiday, these decisions contribute to a greater financial objective. Embracing necessary sacrifices paves the road to long-term gain and a richer future, free from financial constraints.
Tip #7 – Leveraging a Debt-Free Status for Financial Growth
Living debt-free opens doors to financial opportunities previously blocked by loan repayments and high interest rates. You are focused on improving your liquid net worth.
This status can be leveraged for growth by increasing investments, acquiring assets, or starting a business without the drag of debt. It’s about transforming newfound liquidity into channels that foster wealth expansion and provide long-term financial security.
Real Stories: Transformations from Debt to Wealth
The tales of debt freedom resonate with hope and inspiration.
Imagine the relief of one less bill in the mailbox or the pride in finally owning your car outright. These personal anecdotes serve as powerful testaments to the life-altering impact of paying off debt.
Scott Alan Turner felt trapped by student loans for years, only to transform their financial narrative by dedicating extra payments to their debt and eventually questioning every single impulse purchase.
Each story underscores a unique journey of dedication, strategy, and eventual liberation that changes lives fundamentally.
The Ripple Effect on Families and Future Generations
Debt freedom not only transforms individual lives but also sends ripples through families and across generations.
Free from financial burdens, parents can invest in better education for their children, save for their own retirement, and instill the value of living within one’s means. Creating a new family legacy.
FAQ: Embracing a Debt-Free and Wealthy Outlook
Being truly debt-free means you have no outstanding financial obligations—no loans, no credit card balances, and no debts lingering over your head.
It reflects a clean slate of financial commitments, allowing for unrestricted use of your income and providing a robust platform for financial growth and security.
While happiness is subjective, studies consistently link less debt to higher levels of contentment. 1
People without debt often report a greater sense of peace and well-being, liberated from the anxieties and constraints associated with debt. Freeing oneself from financial liabilities allows for a lifestyle focused on experiences and personal fulfillment, factors known to enhance happiness.
It is generally advantageous to be completely debt-free, as it alleviates financial stress, increases disposable income, and contributes to a solid foundation for building wealth. Without the burden of debt repayments, individuals can allocate funds to savings, investments, or personal passions, enhancing their overall quality of life and financial stability.
Avoiding debt is often seen as countercultural because society promotes a credit-fueled economy, where debt is normalized for consumption and lifestyle enhancement.
Challenging this norm by rejecting debt goes against these ingrained beliefs, embracing financial independence and self-reliance over societal expectations and instant gratifications.
Freedom from Debts
Clearing up this confusion underscores the significance of being debt-free as a true indication of financial health and prosperity.
Embracing a debt-free life is not merely about financial stability—it’s about the profound sense of freedom and the joy that comes with it.
Being free from debt is your ticket to robust retirement savings, potentially leading to an earlier and more comfortable retirement.
The ultimate luxury lies in this liberty; the contentment from knowing you live within your means, free from the shackles of debt. Achieving this might require discipline, setting clear goals, and a commitment to self-restraint, but the payoff is unparalleled.
If this vision inspires you, why not start that journey to financial independence today? Each step, no matter how small, moves you closer to realizing your dreams without the weight of debt steering your course.
Now, the time is for you to become the next millionaire with no money.
Source
Motley Fool. “Study: The Psychological Cost of Debt.” https://www.fool.com/the-ascent/research/study-psychological-cost-debt/. Accessed March 14, 2024.
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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.
The average cost of a dozen eggs in the U.S. is $3, according to data from the U.S. Bureau of Labor Statistics (BLS). Though higher than in previous years, it’s still lower than the $4.82 consumers paid on average in January of 2023, when concerns about egg shortages sent the cost of eggs skyrocketing.
Why does knowing the cost of a dozen eggs today matter? If you’re trying to manage your household budget, then keeping food costs as low as possible might be a priority. Where you live can play a part in determining how much you’ll pay for a dozen eggs.
Table of Contents
What Is the Average Cost of a Dozen Eggs Today?
On average, Americans are paying $3 for a dozen Grade A large eggs, based on the BLS data. That price reflects the most recent Consumer Price Index (CPI) data available as of February 2024. The CPI Consumer Price Index tracks prices for a basket of consumer goods and services over time.
In tracking egg price data, the CPI looks at average numbers by city, rather than state. Prices are based on the cost of a dozen eggs only and don’t take into account pricing for smaller or larger quantities of eggs sold, or pricing for different sizes of eggs. The CPI’s egg price data offers a snapshot of how egg prices have moved up or down over time. While prices increased sharply in the beginning of 2023, the average cost of a dozen eggs has since declined. Whether you live alone or are supporting a family, these types of fluctuations can impact your grocery budget.
It’s important to keep in mind that average reflects all prices from high to low, while median reflects the middle price. Median prices for eggs or other consumer goods and services may be higher than the average price. 💡 Quick Tip: Online tools make tracking your spending a breeze: You can easily set up budgets, then get instant updates on your progress, spot upcoming bills, analyze your spending habits, and more.
Average Cost of Eggs by State for 2023
If you’re interested in what is the average cost of a dozen eggs by state, you might be surprised at just how much prices can vary from one location to the next. The following table breaks down the average cost of a dozen eggs in all 50 states, according to pricing data from Instacart collected in December 2022. Note that the figures below were captured during the egg shortage, when prices were high, and may not reflect the latest CPI price data.
State
Cost
Alabama
$6.12
Alaska
$4.61
Arizona
$6.03
Arkansa
$4.95
California
$6.05
Colorado
$5.77
Connecticut
$5.54
Delaware
$4.79
District of Columbia
$4.58
Florida
$6.36
Georgia
$5.96
Hawaii
$9.73
Idaho
$5.09
Illinois
$4.82
Indiana
$4.33
Iowa
$4.44
Kansas
$4.41
Kentucky
$4.51
Louisiana
$5.59
Maine
$5.84
Maryland
$4.78
Massachusetts
$5.20
Michigan
$4.82
Minnesota
$5.10
Mississippi
$5.04
Missouri
$4.24
Montana
$5.46
Nebraska
$4.25
Nevada
$6.07
New Hampshire
$4.91
New Jersey
$5.05
New Mexico
$5.65
New York
$5.37
North Carolina
$5.60
North Dakota
$4.83
Ohio
$4.39
Oklahoma
$4.92
Oregon
$4.81
Pennsylvania
$4.52
Rhode Island
$5.10
South Carolina
$5.76
South Dakota
$5.00
Tennessee
$5.61
Texas
$5.43
Utah
$5.67
Vermont
$5.70
Virginia
$4.96
Washington
$4.91
West Virginia
$4.64
Wisconsin
$4.78
Wyoming
$5.84
Source: Instacart
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Where the Cost of Eggs Is Highest
As evidenced by the price data, some states are more expensive than others when it comes to what you’ll pay for a dozen eggs on average. In descending order, here are the 10 states that had the highest cost overall for a dozen eggs:
• Hawaii
• Florida
• Alabama
• Nevada
• California
• Arizona
• Georgia
• Wyoming
• Maine
• Colorado
In each of those states, shoppers paid $5.70 or more on average for a dozen eggs. Hawaii is the most expensive state to buy eggs, with the average cost of a dozen eggs nearing $10.
Where the Cost of Eggs Is Lowest
Where is the average cost of a dozen eggs the cheapest? Shoppers paid the least for a dozen eggs in these states:
• Missouri
• Nebraska
• Indiana
• Ohio
• Kansas
• Iowa
• Kentucky
• Pennsylvania
• Alaska
• West Virginia
In these states, the average cost of eggs was below $5 per dozen. As you can see, most of these states are located in the central, southern, and eastern U.S., though Alaska is the outlier. Assuming food costs are lower overall in these states, the average grocery budget for a family of 5 is likely to be less compared to the states where eggs are more expensive.
Why Did the Cost of Eggs Increase
The spike in egg prices that peaked in 2022 was largely fueled by scarcity. An outbreak of avian flu sent egg production into decline as more than 43 million laying hens were lost to the disease or depopulation efforts. With fewer eggs in supply but demand not easing, egg prices began to rise. Prices began to decline as egg inventory increased following the end of the outbreak.
Prices began to decline as egg inventory increased. However, the ongoing outbreak and strong demand have helped keep prices high. Inflation can also be pointed to as a contributing factor to rising egg prices. In simple terms, inflation is a rise in prices for things consumers buy, like eggs and other household items. Knowing how to find the inflation rate and what’s considered to be a normal range matters for making the most of your money.
When inflation is higher, everything costs more and your money doesn’t go as far. A difference of a few cents in the price of a dozen eggs might not seem like much. But when everything else is going up in price too, and inflation doesn’t appear to be easing any time soon, it can take a serious toll on your wallet.
When Will the Cost of Eggs Go Down?
According to the CPI data, egg prices have declined from the peak they reached in January 2023. While eggs are more expensive than they were a couple of years ago, relief might be on the horizon. In its food price outlook, the USDA predicted that egg prices would drop 2.8% in 2024.
Monitoring prices for different goods and services can help you stay on top of your budget. Making and sticking to a spending and savings plan is one of the most basic steps for building wealth and increasing your net worth. Being able to measure your liquid net worth can give you an idea of how well you’re doing financially when it comes to accumulating assets and paying down debt.
Tips on How to Shop for Cheap Eggs
Shopping for eggs on the cheap can save you money and make it easier to live below your means. Living below your means benefits you in a few ways. For one thing, you may be less reliant on credit cards to cover expenses if you always have extra cash in your budget. And for another, it can make it easier to adapt to economic changes that can affect your budget and spending.
With that in mind, here are a few quick tips to help you pay less for eggs.
• Shop the farmer’s market. Buying eggs locally from a farmer’s market vs. a supermarket could save you money if you’re able to find lower prices. You may even be able to work out a barter or trade with a local farmer or neighbor who has a backyard flock, which could allow you to get eggs for free.
• Choose store brands. Store-brand products, including eggs, typically cost less than name-brand ones. If you’re not partial to any one egg brand, you may save a little money by choosing your local store’s brand.
• Buy eggs in bulk. Buying in bulk could save you money if you’re paying a lower unit price per egg. But the catch is that you have to be sure you’re actually going to use them all; otherwise, you could be wasting money.
• Use fewer eggs. A simple way to save money on eggs is to not consume as many. For instance, you might opt to get your daily protein from other sources or swap out your favorite baking recipes for ones that don’t incorporate eggs.
• Shop with coupons and cash back apps. Couponing may seem tedious but supermarkets make it easier by allowing you to load digital coupons to your store loyalty card. You can pair coupons with a cash back app that pays you a percentage back when you shop at partner grocery stores, which can add to your savings.
💡 Quick Tip: We love a good spreadsheet, but not everyone feels the same. An online budget planner can give you the same insight into your budgeting and spending at a glance, without the extra effort.
The Takeaway
The average cost of a dozen eggs might not be something you think about on a day-to-day basis. But knowing how much you’ll pay for eggs matters when it’s time to go to the grocery store and do your weekly shopping. Keeping an eye on egg prices and implementing some different hacks for finding cheap eggs can help you keep your food budget in check.
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FAQ
How much did a dozen eggs cost in 2023?
As of July 2023, the average cost of a dozen eggs was $2.09, according to Consumer Price Index data. Overall, egg prices were on the decline by mid-2023 after peaking at $4.82 on average per dozen at the beginning of the year.
What state has the most expensive eggs?
According to December 2022 pricing data from Instacart, Hawaii residents pay the most for a dozen eggs. On average, a dozen eggs there costs just under $10.
Do eggs last longer than sell by date?
Eggs can stay fresh past the sell by date, but there are limits on how long you’ll be able to use them. A simple way to tell if an egg is fresh is to place it in a glass or bowl of water. Eggs that float to the surface are no longer fresh, while ones that lie flat on their side are the freshest.
Photo credit: iStock/nd3000
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An authorized user is an individual added to a credit card by the owner of the account or primary cardholder. The authorized user, also referred to as the additional cardholder, can make purchases using the credit card, although the responsibility to make payments falls on the primary cardholder.
Building credit from scratch can be a difficult task, especially for those with limited credit knowledge. One way to get your feet wet with credit is by becoming an authorized user on someone else’s account. As an authorized user, you can leverage someone else’s positive credit habits to improve your own creditworthiness.
However, there are important factors to consider before becoming an authorized user yourself or adding an authorized user to your account. Read on to learn more.
Table of contents:
What is an authorized user?
An authorized user is a person added to someone else’s credit card account who has permission to make charges. The main user who owns the account is the primary cardholder, while an authorized user is sometimes referred to as an additional cardholder.
Who can be an authorized user?
Anyone can be an authorized user, provided they meet the card issuer’s requirements and the primary cardholder adds them to the account. Typically, the primary cardholder and authorized user have an established, trusted relationship.
Here are the most common scenarios where adding an individual to your account is beneficial.
Parent/child: Parents may add their children as authorized users to their account to help them build credit history and give them access to the line of credit for emergencies or family expenses.
Employer/employee: Business owners may add trusted employees as authorized users for business-related expenses.
Couples: Couples may designate one spouse as the primary cardholder and the other spouse as the authorized user, especially when one partner has a higher credit score than the other.
Is an authorized user responsible for credit card debt?
No, being an authorized user doesn’t make you responsible for paying credit card debt. While an authorized user can make purchases, payment responsibilities fall to the primary cardholder. Authorized users have no legal responsibility to make payments.
How does being an authorized user affect your credit?
Accounts you’re an authorized user of are typically included in your credit report, which can help you build credit history. Also known as piggybacking credit, this allows you to use the primary cardholder’s positive credit habits to build your credit.
While being an authorized user can help increase your credit score, it can also have the opposite effect. If the primary cardholder falls behind on payments or maintains a high credit utilization ratio, this can negatively impact your credit.
It’s important to note that not all credit card issuers report authorized user activity to the three major credit bureaus. Consider checking with the primary cardholder’s issuer before becoming an authorized user to make sure they report to the credit bureaus.
How to add an authorized user
To add an authorized user, reach out to your credit card company online, by phone or in-person. Your credit card company will likely require the authorized user’s name, address, birth date and Social Security number to add them to the account.
Once you add someone as an authorized user, your credit card company will mail you a second card that the authorized user can use, although you can decide whether or not you give it to them. Keep in mind that you don’t need to give the authorized user a physical card for them to receive the credit-building benefits.
Here are additional tips to remember when adding an authorized user:
Only add authorized users you trust since they will have access to your credit line.
If your credit card company offers this option, consider setting up spending limits for authorized users to prevent overspending.
Set up alerts to notify you when an authorized user makes a purchase.
How to remove an authorized user
You can easily remove an authorized user if your circumstances have changed. Similarly to adding an authorized user, just contact your credit card company and request the authorized user be removed from the account. Consider also contacting the authorized user to notify them that you’re removing them from the account.
Here are some circumstances in which you may want to remove an authorized user from your account:
There’s been a change in relationship: For example, if your partner is an authorized user on your account and you break up
The account has been misused: If an authorized user is overspending on your account and negatively affecting your finances. For example, if your teen’s spending habits are out of control
There are also scenarios in which you may want to remove yourself as an authorized user from someone else’s account, such as:
You achieved financial independence: If you’ve established a credit history and no longer need access to the account, consider removing yourself to manage your finances independently.
The primary cardholder’s poor credit habits are affecting your credit score: If the primary cardholder is falling behind on payments, your credit could also take a hit, so it’s best to cut ties.
Joint credit card vs. authorized user
A joint credit card allows two people to share one account equally. The main difference between an authorized user and a joint credit card is who is legally obligated to make payments. While both parties are responsible for paying debt on a joint card, an authorized user isn’t required to make payments.
Keep in mind that fewer credit card issuers are offering joint accounts since companies prefer that only one individual is liable for the account. Meanwhile, most credit card issuers offer the option to add authorized users.
Authorized user FAQ
Still unsure whether becoming an authorized user is right for you? We’ve answered some common questions below.
How old do you have to be to be an authorized user on a credit card?
Some credit card issuers have age requirements ranging from 13 to 16, while others have no minimum age requirement.
How long does it take for authorized user accounts to show on your credit report?
Authorized user accounts will typically appear on your credit report within 30 to 45 days after you’re added to the account, as long as your credit card issuer reports to the credit bureaus.
What is the difference between having a cosigner and becoming an authorized user?
A cosigner shares responsibility for repaying the debt, while an authorized user isn’t legally obligated to make payments.
Monitoring your credit as an authorized user
Becoming an authorized user is a great way to kick-start your credit journey. As you start to build credit, it’s important to monitor your credit and ensure that no inaccurate negative items are impacting your score.
When you sign up for a free credit assessment with Lexington Law Firm, you’ll receive your credit score, credit report summary and a credit repair recommendation. View your credit snapshot today.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Brittany Sifontes
Attorney
Prior to joining Lexington, Brittany practiced a mix of criminal law and family law.
Brittany began her legal career at the Maricopa County Public Defender’s Office, and then moved into private practice. Brittany represented clients with charges ranging from drug sales, to sexual related offenses, to homicides. Brittany appeared in several hundred criminal court hearings, including felony and misdemeanor trials, evidentiary hearings, and pretrial hearings. In addition to criminal cases, Brittany also represented persons and families in a variety of family court matters including dissolution of marriage, legal separation, child support, paternity, parenting time, legal decision-making (formerly “custody”), spousal maintenance, modifications and enforcement of existing orders, relocation, and orders of protection. As a result, Brittany has extensive courtroom experience. Brittany attended the University of Colorado at Boulder for her undergraduate degree and attended Arizona Summit Law School for her law degree. At Arizona Summit Law school, Brittany graduated Summa Cum Laude and ranked 11th in her graduating class.
Inside: Discover the keys to successful budgeting with our guide on budget tools, adjusting strategies, and setting financial goals for transformative money management. Creating budgets with your expenses allows you freedom.
Budgeting is one of the parts of managing money that everyone dreads. However, a well-thought-out budget lays the groundwork for mindful spending that reflects your values and paves the way toward accumulating significant wealth.
So, you need to learn the key components of a successful budget.
Budgeting is the cornerstone of building a sustainable financial future where every dollar is assigned a purpose, ensuring that saving and investing become routine, not afterthoughts.
By committing to the principles of disciplined budget tracking and adjustment, you can craft a monetary trajectory that systematically demolishes debt and expands your assets.
Thus, inching you closer to the coveted millionaire status that started with no money with every financial decision you make.
Mastering the art of budgeting requires patience, insight, and the will to see your financial goals come to fruition.
What is the key to good budgeting?
The cornerstone of good budgeting lies in understanding your monetary landscape and wielding control over it.
This means not just noting down numbers, but analyzing your income, expenses, and financial objectives. It’s about crafting a financial map that leads you to your desired destination, be it debt freedom, investment, or saving for something grand.
Remember, a sturdy budget plan is your ally in the financial journey—it helps you stay disciplined, steer clear of fiscal pitfalls, and ensure that your hard-earned money is working for you.
How Mastering Your Finances Can Transform Your Life
First of all, I can attest to starting a budget, sticking to the process, and how my life is now much different than I started. It was hard work and always not fun. But, now, I can experience time freedom like never before.
The magic of mastering your finances is that it does more than just balance your books; it has the potential to utterly transform your life.
Empowered by financial knowledge and a well-executed budget, you can pave the path to your dreams, whether that’s retiring early, traveling the world, or providing a stable future for your loved ones. It instills a sense of financial confidence and peace of mind, knowing that you are in control of your financial destiny.
Element 1: Set Clear Financial Objectives
Setting clear financial goals is like having a compass that guides you through your journey. It involves delineating what you aspire to achieve with your money both in the short term and long term.
You need to plan for and consider variables like inflation and economic shifts.
Identifying Short-Term and Long-Term Financial Goals
To cover your bases, you need to address both immediate and future needs:
Identifying short-term financial goals, typically achievable within one to three years like saving for a vacation or paying off credit card debt.
Long-term financial goals, are usually set for five years or more, such as saving for retirement or a child’s education.
The Role of Specific Goals in Successful Budgeting
Having specific financial goals ensures that each dollar in your budget is assigned a clear purpose, enhancing the likelihood of sticking to your budgeting plan and achieving financial stability.
You can set precise targets such as saving a particular amount for a home down payment and measure your progress and adjust your spending habits accordingly. Thus, making the budgeting process more effective and goal-oriented.
Element 2: Track Your Income and Expenses Religiously
Tracking my income and expenses allows me to identify patterns in my financial behavior. Thus, I can make informed decisions to ensure I adhere to my budget and achieve my monetary goals.
This forms a clear roadmap for financial growth and stability.
Tools and Strategies for Keeping Tabs on Financial Flow
You need to find a way to track your money.
Whether it is utilizing financial software/budgeting apps or paper and pencils. Either allows for efficient tracking of expenses and income, ensuring that you maintain a clear view of your cash flow.
Start with how to budget with a low income.
Differentiating Between Essential and Non-Essential Spending
When creating a budget, it’s vital to differentiate between fixed spending on necessities like housing, utilities, groceries, and transportation, and non-essential spending on items such as dining out, entertainment, and other luxury items.
Essential expenses are critical for maintaining your basic living standards and meeting financial obligations.
Whereas non-essential expenses are discretionary and can often be adjusted or eliminated to achieve financial goals.
By tracking actual expenditure and distinguishing between these two categories, you can prioritize funding towards essentials and savings, ensuring financial stability and progress towards long-term objectives. Just like I have.
Element 3: Prioritize Saving and Prepare for Emergencies
By prioritizing savings, I am investing in my future, taking advantage of compound interest, and building a foundation that helps secure my long-term financial goals. Unfortunately, this took me a while to learn, and the most important financial advice for young adults.
Putting a portion of my income into savings consistently is like paying a bill that benefits my future self, which in turn provides peace of mind and financial independence.
Deciding How Much to Save and Where to Allocate Funds
Apply the 50/30/20 budgeting rule to allocate funds wisely, directing at least 20% of your income towards savings.
The goal is to increase your savings percentage each year. To maximize your savings, analyze your expenses frequently, dividing them by necessity and frequency, to ensure that your saving goals are met without compromising your essential needs.
The Significance of an Emergency Fund in Financial Planning
An emergency fund is a financial lifeline, offering stability in the face of unforeseen circumstances such as job loss or medical emergencies, ensuring that such events don’t derail your financial plans.
Additionally, an emergency fund contributes to peace of mind, knowing they have a monetary cushion to fall back on.
A rainy day fund, or holding three to six months’ worth of living expenses, this fund acts as a buffer against debt, reducing the need to rely on credit cards or loans during crises.
Element 4: Regularly Monitor and Adjust Your Budget
I regularly monitor and adjust my budget to maintain a clear understanding of my financial health and to catch any discrepancies between my planned and actual expenditures. This consistent review allows me to quickly identify areas where I can optimize spending or need to reallocate funds.
Then, I ensure my financial goals remain within reach and adaptable to life’s changing circumstances.
Techniques for Reviewing Budget Performance Over Time
Implement a system for tracking financial transactions that aligns with your budget categories, which provides clear data to analyze spending habits and make informed adjustments as needed.
To effectively review budget performance over time, I recommend scheduling routine assessments, such as monthly or quarterly reviews.
Compare actual expenses with your budgeted figures to pinpoint variances and trends.
Dealing with Financial Changes and Maintaining Budget Discipline
Life’s unpredictable nature means financial conditions can fluctuate, demanding swift adjustments to your budget for events such as a new addition to the family or changes in employment.
These changes could be an increase in income or an unplanned decrease in annual net income.
You must embrace flexibility while holding onto your long-term objectives allowing you to navigate unexpected financial changes without deviating from the path of fiscal responsibility and discipline.
Element 5: Embrace Technology and Automation in Budgeting
I use Quicken to manage my budgeting because it provides an all-encompassing financial picture by integrating income, expenses, investments, and retirement accounts in one place.
The software automates expense tracking and categorization, making it easier for me to monitor my financial health and adjust my spending habits accordingly.
Budgeting Apps and Digital Tools That Simplify Managing Finances
Budgeting apps like YNAB leverage technology to automatically track user expenses by linking to bank accounts, simplifying the process of managing personal finances with features such as expense categorization and financial planning tools.
With features such as bill reminders, debt payoff calculators, and investment trackers, these budgeting apps not only streamline financial oversight but also assist users in setting and achieving their financial goals.
The Advantages of Automating Savings and Bill Payments
This is something I do all the time! Automate your bills and contribute to your savings.
As such, this is a highly efficient method to streamline your finances and ensure that you consistently put your money to work like you planned.
This approach not only helps in avoiding late fees by timely paying bills but also reduces the risk of human error or forgetfulness.
FAQ: Unwrapping the Mysteries of Budgeting
The first method is to start a no spend challenge. This will help you cut back on non-essential spending, such as dining out or premium entertainment subscriptions.
Next, start to live on a shoestring budget. This will help you to compare and negotiate rates for recurring bills like utilities, insurance, and phone plans to secure lower payments.
Additionally, employing cost-saving methods such as utilizing coupons, buying in bulk, and opting for generic brands can significantly decrease monthly grocery expenses.
It’s wise to review and adjust your budget at least once a year or with any major changes. This helps ensure your budget stays aligned with any shifts in income, unexpected expenses, or alterations to your financial goals.
If your lifestyle or income varies significantly, more frequent adjustments might be necessary.
Just remember, it will take a few months for your budget to work.
If you find sticking to your budget is a constant struggle, it might be time to reach out for help. Consider partnering with a budgeting buddy or joining an online community for accountability.
Aim to understand what triggers your spending and devise strategies to avoid these pitfalls. Adjust your budget where needed and prioritize building a buffer for unforeseen expenses.
Creating a budget helps manage finances with a clear view of income and expenses, reduces unnecessary spending, and facilitates goal setting.
It acts as a roadmap for managing monthly financial flows, encourages disciplined spending, and aids in achieving long-term financial aspirations with less stress.
Elements of Budgeting You Will Embrace?
You might wonder, is always keeping a close eye on your finances truly worth it? The answer is a resounding yes.
Gaining mastery over your personal finances is like being the captain of your destiny in the vast sea of economic uncertainty. It’s not just about surviving; it’s about thriving. The result is often an enriched life, free from the shackles of financial stress.
Financial literacy allows you to make smarter choices and enables you to capitalize on opportunities that come your way.
Imagine breaking free from living paycheck to paycheck or being able to take that dream vacation without plunging into debt. These are not just dreams. They can become your reality with financial mastery. It’s about creating a life where you call the shots, secure from the economic twists and turns life may throw at you.
Find success with the zero based budgeting method.
I have done it. And you can too.
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.
You don’t necessarily need a four-year degree to have a rewarding career that pays well. In fact, there are plenty of jobs out there that don’t require a bachelor’s degree and meet a wide variety of talents and interests, from nursing to mechanical technicians.
Here’s an explainer of what exactly is a “trade job,” plus a list of 25 of the highest-paying trade jobs as of 2022, which is the latest data available from the Bureau of Labor Statistics.
What Is a Trade Job?
A trade job is a career that requires advanced training and skill that can be acquired outside a four-year bachelor’s degree. Instead, experience can be acquired through on-the-job instruction, apprenticeship, or vocational schooling. 💡 Quick Tip: Online tools make tracking your spending a breeze: You can easily set up budgets, then get instant updates on your progress, spot upcoming bills, analyze your spending habits, and more.
Highest-Paying Trade Jobs
If you’re interested in a job that doesn’t require a college degree, or you love working with your hands, consider this list of some of the highest-paying trade jobs in the U.S. The compilation shows average annual salary and was compiled from the Bureau of Labor Statistics.
By the way, most if not all trade jobs require workers to be on site. Working remotely is not an option.
1. Power Plant Operator, Distributor, and Dispatcher – $97,570
Requirements: High school diploma or equivalent, long-term on-the-job training
Duties: Control power plants and the flow of electricity from plants to substations, which then deliver power to homes and businesses.
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2. Real Estate Broker – $52,030
Requirements: High school diploma or equivalent. Must complete some real estate courses to be eligible for licensure.
Duties: Help people buy and sell properties.
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3. Registered Nurse – $81,220
Requirements: Bachelor’s degree in Nursing, Associate degree in Nursing, or a diploma from an approved nursing program. Registered nurses must be licensed.
Duties: Help provide and coordinate patient care.
4. Dental Hygienist – $81,400
Requirements: Associate degree
Duties: Provide preventive dental care and examine patients for signs of oral diseases.
5. Water Transportation Worker – $66,100
Requirements: Will vary by job. For example, there are no requirements for entry-level sailors, while other workers might need to complete Coast Guard–approved training.
Duties: Operate and maintain vessels that carry cargo and people on the water.
6. Diagnostic Medical Sonographer – $78,210
Requirements: Associate degree
Duties: Operate special imaging equipment to create images of patients’ internal organs or to conduct tests.
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7. Farmer, Rancher, or Other Agricultural Manager – $75,760
Requirements: High school diploma or equivalent
Duties: Run farms and other establishments that produce livestock, dairy products, or crops.
8. Gas Plant Operator – $79,460
Requirements: High school diploma
Duties: Help distribute or process gas for utility companies by controlling the compressors on main gas pipelines.
9. Pile Driver Operator – $70,220
Requirements: High school diploma and vocational training can be helpful.
Duties: Operate machines that drive pilings for retaining walls, bulkheads, and foundations of buildings, bridges, and piers.
10. First-Line Supervisor of Construction Trades and Extraction Workers – $77,650
Requirements: High school diploma and five years or more work experience
Duties: Directly supervise and coordinate the activities of construction or extraction workers, such as miners or those drilling for minerals.
11. First-Line Supervisor of Mechanics, Installers, and Repairers – $76,020
Requirements: High school diploma, some work experience
Duties: Directly supervise and coordinate mechanics, installers, and repairers. They may also advise customers seeking recommendations for services.
12. Legal Support Worker – $59,200
Requirements: Associate degree
Duties: Perform a variety of tasks to support attorneys such as interviewing clients, legal research, and case summaries.
13. Locomotive Engineer – $73,850
Requirements: High school diploma
Duties: Operate passenger and freight trains safely. May also coordinate train activities or control rail yard signals and switches.
14. Subway and Streetcar Operator – $75,880
Requirements: High school diploma or equivalent
Duties: Operate subways or elevated suburban trains that don’t have a separate locomotive, or may operate an electric-powered streetcar. May handle fares.
15. Line Installer and Repairer – $82,340
Requirements: High school diploma or equivalent
Duties: Install and repair lines for electrical power systems, telecommunications, and fiber optics.
16. Computer Network Support Specialist – $59,660
Requirements: Entry-level requirements may vary, but network support specialists usually need to have an associate degree. Applicants to these jobs may qualify with high school diploma and information technology certifications.
Duties: Provide technical support to computer users while also maintaining computer networks.
17. Claims Adjuster, Examiner, and Investigator – $72,040
Requirements: High school diploma or equivalent
Duties: Evaluate insurance claims and act as an intermediary between claimants and the insurance company.
18. Electrical and Electronics Installer and Repairer for Transportation Equipment – $71,740
Requirements: Specialized training at a technical college
Duties: Install and maintain mobile electronics communication equipment on trains, watercraft, or other mobile equipment.
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19. Avionics Technician – $70,740
Requirements: Some may obtain a degree or certificate from a Federal Aviation Administration–approved aviation maintenance technician school, while other candidates may be trained on the job or in the military.
Duties: Repair and perform scheduled maintenance on aircraft.
20. Fire Inspector and Investigator – $65,800
Requirements: High school diploma, on-the-job training, and typically some experience as a firefighter
Duties: Fire inspectors help ensure buildings meet federal, state, and local fire codes and inspect buildings for potential fire hazards.
21. Transit and Railroad Police – $76,380
Requirements: Typically you must have a high school diploma or equivalent, complete a transit and railroad police training program, and receive a passing grade on a law enforcement exam from your state.
Duties: Help protect employees, passengers, and railroad and transit property.
22. Insurance Sales Agent – $57,860
Requirements: High school diploma or equivalent
Duties: Work with clients and customers to explain and sell various types of insurance.
23. Media and Communication Equipment Worker – $74,490
Requirements: High school diploma or equivalent
Duties: Install, repair, and maintain audio and visual systems across various industries, such as corporate offices and the film industry.
24. Boilermaker – $66,920
Requirements: High school diploma or equivalent
Duties: Install, maintain, and repair boilers.
25. Construction and Building Inspector – $64,480
Requirements: High school diploma or equivalent
Duties: Inspects buildings to ensure they are structurally sound and in compliance with specifications, building codes, and other regulations. May focus on a specific area such as plumbing or electrical systems. 💡 Quick Tip: When you have questions about what you can and can’t afford, a spending tracker app can show you the answer. With no guilt trip or hourly fee.
The Takeaway
On the high end, trade workers can make $90,000 or more at a career that doesn’t require a college education. That’s well above the $59,540 that represents the annual median income of U.S. full-time workers. And with a diverse range of career options to choose from, individuals who choose a trade job have a good chance at finding a fulfilling career that matches their interests and personality.
As your career takes off and you start earning a salary, you’ll likely want to begin budget planning and setting financial goals like paying down debt and saving for your future.
Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.
See exactly how your money comes and goes at a glance.
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Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
There is a difference between being rich and wealthy.
However, most people combine rich and wealthy into one bucket because they both seem so far off and unreachable.
It is important that you understand the distinction because what one person considers “rich” might actually be considered “wealthy.”
There is a huge difference between the two words, no matter how they are used.
Earning a lot of money does not automatically lead to happiness and success because when one achieves happiness when it can be reflected in the fulfillment of ambition.
Being rich usually means that you have an abundance of material things such as money and expensive items.
Being independently wealthy can be seen as someone who has a lot of money, but it also means that they have enough money that will last the test of time.
There is a difference between being rich and being wealthy, but they are both can be seen as positive things.
Let’s discuss the different types of wealth and how they are defined in order to help differentiate these two concepts.
The real key of Rich vs Wealthy is the discussion on which one you should be striving to be.
So, is it better to be rich or wealthy?
What is a Rich Person?
A rich person is someone who has a lot of money and assets. This may be a businessperson, an investor, or just someone who has been very successful in their field.
This rich person has probably created new money vs old money.
Rich people tend to barely save any money and spend excessively, meaning they run out of cash quickly. For example, a rich person might earn $10,000 in a month while spending $12,000 to wind up with a negative $2000 when the month is over.
The amount of debt for a rich person tends to be higher. They are willing to keep up the lifestyle rather than tell others about their debts.
To be rich you have to be able to take the risk of having money to invest and time to wait for the windfall.
What is a Wealthy Person?
A wealthy person is someone who has a lot of money for their lifestyle standards.
Since a wealthy person is consistently growing their money because they save and are wise with what they have. They tend to think of the future and put away some cash for it rather than spending everything.
Their goal is to take their large sum of money and grow that money even more through active or passive income.
A wealthy person does not have to be a number-crunching billionaire or someone who is living lavishly.
It is all about the decisions that you make and how those decisions can lead to wealth.
You can start to build wealth when you hit your first $100k in investments. When you have a salary of over $100k a year, this is much easier to do fast.
Wealthy people are those who have a lot more money than you do, but they work hard every day in order to keep it.
Rich vs Wealthy Money Habits
Rich people tend to spend more money than wealthy people.
The difference between rich people and wealthy people is that rich people have money habits that often lead to debt. Rich people are not usually frugal, and they tend to spend a lot of money.
Also, rich people have the ability to earn more if they choose something different in the future.
Rich people are usually defined as those with a net worth of over $10 million, but there is no set number for how much money someone has to be considered rich.
Wealthy people, on the other hand, have an annual income of $150,000 or more. Their wealth comes from hard work and saving money to slowly increase their net worth.
Broke People Habits:
Spend time watching TV and playing video games
Keep up with the Joneses’
Blame others for failures
The concept of change is too overwhelming
Too afraid of setting goals because they don’t want to be accountable
Deep in debt
Feel their situation will never change
Never save money
Willing to get a credit card just for a discount
Think bank fees and overdraft fees are a part of life
No emergency fund
Rich Habits:
Earns a lot of money
Spends a lot of money
Enjoys a flashy lifestyle
Okay being in debt
Focuses on the short term
Not big savers of their money
They frown upon being frugal
Prefer a challenge to make more money
Takes on bigger risks
Their inner circle is people exactly like them
Very impulse with decision making
Wealthy Habits:
Set long term goals
Creates an action plan to reach their goals
Take responsibility for their actions
Saves money consistently
Understands that passive income will grow their wealth
Constantly learning
Spend time reading
Enjoys the fact they have options
Lives below their means
Embraces frugal
Shy away from debt
Finds a mentor
How to Go from Rich to Wealthy
Many people feel the need to be rich because they have the idea that being rich is key to success.
However, many times, wealthy people are wealthier than their counterparts who are both richer and wealthier.
If you are rich, then it is important that you are not frugal because many times, being wealthy means having a lot of money and saving the rest. If you have a lot of money and are not frugal with it, then you could end up broke.
However, if your goal is to become wealthy meaning having a lot of money AND saving, then you are on the right path to financial freedom.
This is the difference between being rich and wealthy.
Rich vs Wealthy Mindset
First of all, the definitions of each of these are really close.
A rich mindset is a state of mind that knows that there are no limits to what you can achieve.
A wealthy mindset believes that success and wealth come from hard work and dedication.
Honestly, both money mindsets are needed to keep pushing yourself to reach financial freedom and enjoy time freedom.
You need a rich mindset to grow your money, but a wealthy mindset to keep that wealth.
The wealthy are more likely to have a growth mindset than the poor because they know that money is merely an instrument for achieving their goals.
Whereas, rich people often spend too much time worrying about what others think of them and why they aren’t as successful or wealthy as other people in society.
How to Become Wealthy
This is a question that has been asked many times, and finding the answer depends on how you define wealth.
In general, becoming wealthy means having enough money to support yourself without any outside help.
You have enough money to cover your expenses without the need for an additional influx of money. For many people, that means they need at least $1 million dollars, so they can live off the investments gains and dividends. If you are single, then $500k may be enough.
As such, becoming wealthy is one of the most difficult things to do.
If you are constantly struggling to make ends meet and never saving money, then becoming wealthy will be even harder for you to accomplish!
Here is what you need to do to move from well off vs rich vs wealthy.
Step #1 – Get out of debt
For people who are in debt, the solution is simple: get out of debt.
But for a lot of people, they need to make some changes before they can do that.
It’s important to get out of debt and that takes time. The more debt you have, the longer it will take.
However, I will tell you from personal experience. Until we paid off our debt, we didn’t make any progress financially. We were stuck on a hamster wheel. Since paying off our debt, we reach our financial goals so much easier.
Track your progress, set goals, and stay motivated while getting out of debt.
Step #2 – Stop comparing yourself
Although comparisons can be helpful and may indicate which side is doing better or worse, they are not always accurate. Sometimes comparing yourself to others will make you feel inferior and frustrated.
Keep in mind that you are not just the sum of your accomplishments.
Stop comparing yourself to other people and start focusing on the things that make you happy.
Conversely, spending time with people who inspire you will help cultivate a wealthy mindset. It can be anyone from your family members to celebrities, but it is important that these individuals are inspirational and not toxic for your mental health.
Step #3 – Become Your Own Boss
This doesn’t mean you can’t keep your 9-5 job. It means you are looking for ways to make money outside the traditional “job.”
An entrepreneur is a person who organizes and runs a business, typically with manageable risk and a small amount of capital, in order to turn it into a profitable venture.
Become creative with ways to bring in extra money. Some ideas include day trading, dropshipping, starting an Etsy shop, driving for Uber, or walking dogs.
Here are great ways to make money on the side:
It is possible to make more money on your business than you make more money in your current job or career.
Step #4 – Be Generous
Be generous to others.
Being wealthy means living a comfortable life and being able to help others.
Giving away money can be a way to build wealth, but it is not the only way. This helps you realize the impact you can have on the world.
Your small contribution can help shape and change the lives of so many.
Consequently, giving and helping others will motivate you to work harder and continue building your wealth.
Step #5 – Think Long Term & Set Goals
Life goals have exploded in recent years and many of us are now focused on growing our own wealth.
The truth of the matter is both wealth and richness are great.
Wealth enables a person to live life on his own terms and allows them to achieve the things they have dreamed of.
But, getting there does not just magically appear.
It takes a plan of action to reach those smart financial goals.
By consistently saving money, you will slowly build your net worth. Step by step you are building the foundation to become wealthy.
Baby steps to becoming wealthy.
Rich vs Wealthy Quotes
This rich vs wealthy quote from Stephen Swid is one of my favorite all-time quotes.
This quote quickly summarizes the difference between the wealthy vs rich definition.
“Being rich is having money; being wealthy is having time.”
As an American businessman and investor, Stephen Swid spent countless hours on various deal negotiations and build his own wealth. He understood the wealthy vs rich meaning.
This quote is something I focus on when making decisions of what next steps to take.
What does this quote mean to you?
What is considered being wealthy?
Being wealthy is a subjective term that can be interpreted in many ways. The definition of the term is different for everyone, so it’s hard to answer this question definitively.
Many people believe you need 7 figures or even 10 figures.
One could be considered to be wealthy or poor based on their country’s standards, their personal spending habits, and the types of investments they have.
The richest people are those who have made their wealth through investments and not necessarily the ones that have spent a lot of money.
The definition of wealthy is different for everyone, but it’s generally considered to be someone who has a lot of money and financial stability.
Being wealthy is measured by how much money you accumulate and save.
It is understanding your personal finances to budget, track savings, contribute to retirement, and grow liquid net worth.
A wealthy person is someone who has made wise decisions. Wealth does not have anything to do with how much money you have in your bank account.
Do you Fit the Definition of Wealthy vs Rich?
Now, we have covered the difference between the wealthy and the rich. If you’re wondering what is the difference between rich and wealthy, it’s not that complicated.
Rich people are those who have saved, invested, and built net worth through their income or assets. Wealthy people can follow these three simple steps to build your own wealth: save money in a savings account or investment account; invest in stocks, bonds, or other securities for growth; create an asset such as real estate by purchasing property with borrowed funds on low-interest rates
The key distinction between being rich or wealthy is the mindset.
Rich people might have more money in their bank accounts or assets, but they don’t think of themselves as rich because they are worried about their appearance and keeping up with their elite society. Wealthy individuals are those who see value in accumulating wealth primarily through investing and growing their financial portfolio with investments over time.
A rich person is someone who has more money than the average person but may not wealthy. They are always looking to make more money and spend more because they believe that there is not enough time or money in this world for them to enjoy.
Wealthy individuals are those who can afford to buy things and choose not to because it helps them increase their net worth and become more wealthy.
The only way to be wealthy is by being smart on your investments and having time for yourself in order to find happiness.
Being rich may or may not be something you should aspire to be. The more money you have, the more responsibilities you get.
There are many rich and wealthy people who are unhappy because they are so busy trying to keep up with society’s expectations.
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.
If you’re wondering, “Can you write a check from a savings account?” the short answer is no. You can’t write checks from a savings account; instead, you can do so from a checking account, which is designed to provide that specific financial service. Savings accounts are primarily for earning interest on your deposits and transferring money occasionally.
Checks might seem like an old-fashioned payment method, but they are vital in specific transactions. For instance, you might need to pay the deposit for an apartment rental by check. In addition, personal checks are more secure for mailing payments than cash.
While you may want to draw funds from a savings account, that’s really not its purpose. Here, you’ll learn the details on this situation and also a possible work-around or two.
Key Points
• Writing checks from a savings account is not possible; it can only be done from a checking account.
• Savings accounts are primarily for earning interest and occasional money transfers, not for check-writing.
• Checks are still important for certain transactions, such as apartment rental deposits and secure mailing of payments.
• Savings accounts are designed for saving money, earning interest, and providing security for future needs.
• While payments cannot be made directly from a savings account using checks, automatic transfers and mobile banking can be used for certain transactions.
Why You Can’t Write Checks from a Savings Account?
You can’t write checks from a savings account because these accounts are for earning interest on cash you leave alone. Federal law, in fact, prohibits check-writing from such accounts and may restrict how often you can transfer money out of a savings account, too.
Part of the way a bank makes money is to lend out your funds on deposit in a savings account for other purposes. You earn an annual percentage yield, or APY, on your deposit for giving the bank the privilege of using your money that’s in a savings account. In other words, your financial institution is depending on some savings-account money staying put, not being regularly transferred out via checks.
Checking accounts, however, are designed to allow customers to write checks and make purchases. They may not make much or any interest, but you can move your money out of these accounts via checks and electronic transfers. You can even write a check to yourself to access your money.
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What Accounts Can You Write a Check From?
One of the ways that checking accounts vs. savings accounts differ is that you can’t write checks from a savings account. However, both checking accounts and money market accounts can let you move funds out via checks. You can choose from the following types:
• Standard checking. This account typically provides a checkbook and debit card to make purchases. You might earn meager or no interest, but you can access your cash quickly. And, as with most kinds of checking accounts, you’ll be able to get cashier’s checks and certified checks if needed.
• Premium checking. This is a checking account on steroids, with better interest rates, rewards programs, and customer perks. In addition, these accounts might have monthly fees or steep minimum balance requirements in order to get those enhanced benefits, so check your customer agreement carefully.
• Rewards checking. Think of rewards checking as akin to a premium checking account but focuses on providing cash back for debit card usage. Again, it’s crucial to read the fine print for these accounts, as they usually require specific spending habits to be worthwhile.
• High-interest checking. This kind of account, also known as high-yield checking, blends saving and checking together by providing higher interest rates while allowing you to write checks and use your debit card.
While this account attempts to provide the best of both worlds, you’ll likely receive a lower interest rate than a savings account. You also might have to fulfill strict requirements (such as a monthly high account balance or transaction count).
• Student checking. High school and college students can access banking through these accounts. Student checking accounts typically provide leniency for overdrafts and promotional rewards for new customers. However, your account will change to a standard checking account when you lose student status, meaning you may lose the advantages of a student account.
• Second chance checking. Customers with less than perfect banking histories can struggle to find a bank that will provide them with an account. Unpaid bank fees and repeated overdrafts can cast a shadow over your banking record, making financial institutions hesitant to work with you. Fortunately, numerous institutions offer second chance checking to give customers another shot at banking. These accounts might restrict spending or charge monthly fees to cover their risk but can help you get back on your feet.
• Money market account. Many money market accounts also combine some of the features of savings and checking accounts. For example, money market accounts can earn higher interest than typical checking accounts (making them more like savings accounts) but allow you to write checks, as with a checking account.
Recommended: How to Sign Over a Check to Someone Else
What You Can Do With a Savings Account
While you can’t write checks with a savings account, the different types of savings accounts offer these functions and benefits:
• Security. You can safely save for the future, whether that means building an emergency fund or saving for a down payment on a house. If you bank at a Federal Deposit Insurance Corporation (FDIC)- or National Credit Union Administration (NCUA)-insured institution, you will have up to $250,000 per depositor or shareholder, per insured institution for each account category.
• Interest. As noted above, you’ll earn interest. The annual percentage yield (APY) will help your money grow.
• Convenience. You can also use mobile banking with a savings account. This feature allows you to access your account from your phone to deposit checks, transfer money, and view monthly statements.
• Perks. You may be able to snag some perks by opening a savings account, such as some banking fees being waived or a one-time cash bonus.
• Automated savings. You can set up automatic transfers from your checking account to savings to help increase your savings in an effortless way.
• Account linking. You can link your savings account as a backup to your checking to help avoid overdrafting.
Quick Money Tip: If you’re saving for a short-term goal — whether it’s a vacation, a wedding, or the down payment on a house — consider opening a high-yield savings account. The higher APY that you’ll earn will help your money grow faster, but the funds stay liquid, so they are easy to access when you reach your goal.
Tips for Using a Savings Account to Make Payments
If your goal is to make payments from a savings account, you can’t use a check, as you’ve learned above. Plus, saving accounts may often have monthly transaction limits, meaning you can’t move money from the account for every monthly expense and random bill that may pop up. Generally, you can transfer money from a savings account six times a month.
You can, however, set up a small number of automatic transfers out of your savings account. Follow these tips:
• Have your account details handy. Double-check your account and routing numbers to make sure you are transferring funds out of the right account.
• Limit the bills you pay with your savings account. The less information is out there, the less likely it is to fall into a thief’s hands.
• Don’t attempt more than your account’s transaction limit. Usually, plan on paying no more than six monthly bills with your savings account. Check with your financial institution, however, to find out your exact transaction limits.
• Maintain an adequate balance. Transferring money from your checking account and depositing cash or paychecks into your savings account will help ensure you don’t overdraft the account.
Banking With SoFi
Savings accounts are excellent tools for earning interest and working towards your financial goals. However, they are less suitable for making payments because you can’t write checks from a savings account. Although you can make payments from savings accounts in a pinch, it’s better to use checking accounts for these transactions. After all, it’s what checking accounts are designed for.
If you’re looking for a banking partner who can provide the best of both checking and savings accounts, see what SoFi offers. When you open an online bank account, you’ll have the convenience of spending and saving in one place. Plus, with our Checking and Savings, you’ll earn a competitive APY and pay no account fees, two features that can help your money grow faster. Plus, you’ll receive both paper checks and a debit card to help you make payments.
Better banking is here with up to 4.60% APY on SoFi Checking and Savings.
FAQ
Why do checks come from checking accounts?
Checks come from checking accounts because banks intend payments to flow frequently from these accounts. In addition, checking accounts are the most convenient way to deposit and withdraw money from a bank because you can withdraw money an unlimited amount of times per month.
Why can I not write checks with a savings account?
You can’t write checks with a savings account because the account is for saving money and earning interest payments. Banks don’t provide checks for a savings account because the intention is for you to save money and leave at least a chunk of it untouched in the account. On the other hand, checking accounts allow you to write checks.
Can I write any check from a savings account?
You can’t write a check from a savings account because that is not how they operate according to federal guidelines. You can save money and earn interest with a savings account, while a checking account allows you to write checks.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.