Whether you’re relocating to a new house in Tacoma, WA, or an apartment in Houston, TX, moving to a new city or state can be an exciting adventure, but the process of long-distance relocation can also be overwhelming. Proper planning and organization are crucial to ensuring a smooth and successful move. In this comprehensive guide, Redfin provides you with ten valuable tips to make your long-distance move stress-free and efficient.
1. Start planning early
Long-distance moves require careful planning, so start as early as possible. Ideally, begin the process at least 8 to 12 weeks before your intended move date. Create a detailed moving checklist and timeline to keep track of important tasks. This includes researching moving companies, sorting and decluttering belongings, and scheduling necessary services such as transferring utilities. Also take into account how many moving boxes you’ll need.
2. Hire a reputable moving company
Choosing the right moving company is essential for a successful long-distance move. Research several companies and read online reviews to assess their reputation and customer satisfaction. Obtain written estimates from multiple movers and compare their services and prices. Look for companies with proper licensing, insurance, and a good track record of handling long-distance moves.
3. Purge unnecessary items
Long-distance moves can be costly based on the volume of your belongings. Take this opportunity to declutter your home thoroughly. Donate, sell, or discard items you no longer need or use. Consider hosting a garage sale or selling items online to earn some extra cash for your moving expenses. Reducing the number of items to move will not only save you money but also make the packing and unpacking process much more manageable.
“Sell or donate unwanted items,” says Eshon Howard of The Hard Body Haulers. “This will free up space in your home and reduce the amount of stuff you have to move. You can even host a garage sale or sell your items online to make some extra money.”
4. Organize important documents
During a move, important documents can easily get lost or misplaced. Gather and organize essential documents such as passports, IDs, birth certificates, medical records, financial paperwork, and any contracts related to your new home. Keep them in a safe and easily accessible place, and consider carrying these documents with you personally rather than packing them in boxes.
5. Pack methodically
Packing your belongings room by room is a practical and efficient approach. Start with the items you use less frequently and work your way to daily essentials. Use high-quality packing materials to protect your belongings during transit. Invest in sturdy moving boxes, bubble wrap, packing paper, and quality tape. Fragile items should be wrapped individually to prevent damage.
Label each box with its contents and the room it belongs to. This will make unpacking a breeze and help movers place boxes in the correct rooms in your new home. Additionally, keep an inventory list of your packed items. Number the boxes and write down the contents in a notebook, or use a moving inventory app. Having a detailed list will help you ensure that nothing gets lost during transportation and will serve as a reference when filing insurance claims, if necessary.
Marcin Cwaliński of Ampol Moving, Inc suggests doing the packing yourself to stay organized and save money. “In order to keep costs down, we advise anyone who is moving to be as organized as possible,”he says. “Try to pack your own boxes, versus having a moving company to do it for you. If at all possible, bring as many items as possible to the garage or a main level of your house. This will speed things up, thus saving you money.“
6. Take inventory
“With a move of any size, it is prudent to have an accurate assessment of your property,” says Thomas Engelhart of 513 Movers. Create a detailed inventory of all your belongings before the move. It’s particularly crucial for long-distance moves, where your belongings may be transported with other items. Having an inventory will help you keep track of your possessions and ensure that everything arrives safely at your new home. It will also be beneficial for insurance purposes in case of any unforeseen accidents or damage during the move.
7. Plan your travel and accommodation
If you’re driving to your new location, plan the route in advance and make reservations for accommodations along the way if needed. Calculate the distance, travel time, and any potential stops you might want to make. Consider the best time to travel to avoid heavy traffic or inclement weather conditions.
If your move involves air travel, book your flights well ahead of time to secure the best prices. Arrange for transportation from the airport to your new home in advance. If you have pets, ensure they have proper travel arrangements as well.
8. Notify important parties
One of the critical steps in a long-distance move is notifying relevant parties of your upcoming relocation. Inform your current and new utility providers about your move-out and move-in dates to ensure a seamless transfer of services. Also, notify your banks, insurance companies, credit card providers, and any other institutions you have accounts with about your change of address.
Don’t forget to update your address with relevant government agencies such as the postal service, the Department of Motor Vehicles, and the Internal Revenue Service (IRS). Additionally, inform subscriptions, friends, family, and other contacts of your new address to continue receiving mail and packages without interruptions.
9. Pack an essentials box
Packing an essentials box is a simple yet incredibly useful step that can save you time and stress during and after your move. Pack a box with items you’ll need immediately upon arrival at your new home. This may include toiletries, a change of clothes, important documents, basic kitchen supplies, essential tools, and any items that will help you settle in comfortably during the first few days.
Keep this essentials box with you during the move, rather than having it transported with the rest of your belongings. That way, you can easily access these important items without rummaging through packed boxes when you first arrive at your new residence.
10. Stay positive and stay flexible
Lastly, remember that moving, especially long-distance, can be challenging and unpredictable. Unexpected issues may arise, but maintaining a positive attitude and staying flexible can make the process more manageable. Embrace the adventure and the new opportunities that await you in your new location.
This is a guest post by Mehdi, author of StrongLifts.com. If you enjoy this post, check out his site.
Eating healthy is important.
Eating healthy:
Lowers disease risks
Increases productivity
Gives you more energy
Makes you stronger
You probably think eating healthy is expensive. I’ll be honest — it is. But there are tricks to spare your savings account and keep it low cost. Here are sixteen ways to eat more healthy while keeping it cheap.
What is Healthy Food? Before we start, let’s define healthy food. It consists of:
Protein. The building blocks of muscles, needed for strength.
Fat. A balanced intake of omega 3, 6 & 9.
Veggies. All kinds, especially green fibrous veggies.
Fruit. Full of vitamins.
Water. 1 liter per 1000 calories you expend.
Whole grain food. Oats, rice, pasta, breads, …
On with the tips.
1. Switch to Water. I drank huge amounts of soda daily for more than 15 years. Then I started Strength Training and switched to water:
It’s healthier
It’s cheaper
Quit the soda & drink water. Take a bottle wherever you go.
2. Consume Tap Water. Check the price of water on your tap water bill. Now check the price of bottled water. Quit a difference, isn’t it? So why are you buying bottled water?
Cleaner? Not necessarily.
Better taste? No, simply a matter of Adaptation.
Bottled water companies get their supply from the same source you do: municipal water systems. It’s like selling ice to Eskimos. If you don’t trust the quality of tap water, filter it yourself. I use a Brita Pitcher. One $7 filter cleans 40 gallons water.
3. Eat Eggs. I always have eggs at breakfast:
Full of vitamins
High in proteins
Low in price
Don’t believe the Eggs & Cholesterol myth. Dietary cholesterol is not bound to blood cholesterol. Want to make it cheaper? Buy a chicken.
4. Eat Fatty Meats. Fatty meats are cheaper & more tasty than lean meats. You think it’s not healthy? Check the Fat Myths:
Fat doesn’t make you fat, excess calories do
You need a balanced intake of fats: omega 3, 6 & 9
I’m on the Anabolic Diet, I buy beef chuck instead of sirloin.
5. Get Whey. The cheapest source of protein. 70$ for a 10lbs bag lasting 4 months. Nothing beats that. Use whey in your Post Workout Shake to help recovery.
6. Tuna Cans. Canned tuna is cheap & contains as much protein as meat. Alternate tuna with eggs, meat & whey. You’ll easily get to your daily amount of protein.
7. Buy Frozen Veggies. I mostly buy frozen veggies:
Take less time to prepare
You don’t waste money if not eaten in time
Can be bought in bulk for discounts & stored in your freezer
If you can afford fresh veggies, then do it. I go frozen.
8. Use a Multivitamin. Pesticides lower the vitamin levels of your fruits & veggies. Two solutions:
Buy organic food. Expensive.
Use a multivitamin. $10 a month.
Choose what fits your wallet best. I take the multivitamin.
9. Fish Oil. Omega-3 is found in fish oil. Benefits of omega-3 consumption include:
Lowered cholesterol levels
Decreased body fat
Reduced inflammation
You need to eat fatty fish 3 times a week to get these benefits. Time consuming & expensive, I know. Try Carlson‘s Liquid Fish Oil with Lemon flavor. One teaspoon daily. You’ll be ok.
10. Buy Generic Food. The box might be less attractive, it’s certainly more attractive to your wallet. Brand-name food will always be more expensive. You’re paying for the name. Get real. Food is food. Go generic.
11. Buy in Bulk. Think long-term. Buying in bulk is more expensive at the cashier, but cheaper in the long run:
Gets you discounts
Saves time
Saves car fuel
Invest in a big freezer. Buy meats & veggies in bulk and freeze them.
12. Go to One Grocery Store. This grocery store is cheaper for meat, that grocery store is cheaper for veggies, the other grocery store is cheaper for fish… How many grocery stores are you going to, trying to find the cheapest food? Think!
Time is money. Stop losing a day shopping.
Cars don’t run on water. Lower your fuel expenses.
I get all my food in a big grocery store near my place. It hasn’t the cheapest price for all foods, but it saves me time & fuel.
13. Make a Plan. A classic, but worth repeating. Everything starts with a plan.
Make a list of what you need
Eat a solid meal, don’t go hungry
Go the grocery, get what’s on your list & get out
No need to take your partner or kids with you. This is not a recreational activity. Just get your food & get back home.
14. Take Food To Work. Ever counted how much money you throw away buying food at work daily? Start preparing your food for the day on waking up:
Get up earlier
Eat a solid breakfast (like Scrambled Eggs)
Prepare your food for work in the meanwhile
Total time 30 minutes. No stress during the day about what you’ll be eating & you get healthy food while sparing money.
15. Eat Less. This one is obvious. The less you eat, the lower your grocery bill. If you’re overweight, get on a diet. Your health & bank account will thank you.
16. Don’t Buy Junk Food. The last one. Stop buying anything that comes out of a box, it’s:
Unhealthy
Expensive
If you actually find junk food that is cheaper than whole food, think long-term. Health implications.
Mehdi is author of StrongLifts.com , a blog about Strength Training, nutrition, lifestyle & attitude. His articles include the Anabolic Diet & the Beginner Strength Training Program. Join him at StrongLifts.com for the fascinating journey toward more strength, bigger muscles, low body fat & a better health.
Inside: Looking for the best care packages for college students? Look no further! This guide will teach you everything you need to know about choosing the right gifts and packing a care package that will make your student feel at home during their time away.
It’s that time of year again! Time to send your college student a care package. But what should you include?
We’ve got you covered with this comprehensive list of the best care packages for college students.
From food and snacks to study aids and dorm decor, we’ve got ideas for every type of student.
This year, I seem to know so many parents sending off their college students.
So whether your child is homesick or just needs a little pick-me-up, check out our list of the best care packages for college students.
What is a Care Package?
A care package is a heartfelt bundle filled with handpicked items, designed to uplift the spirits of the recipient.
A care package for a college student is a curated box filled with various items such as food, products, or novelty items, tailored to their interests, to remind them they’re loved and provide them with needed or desired items while they’re away from home.
Nonetheless, a care package can be a wonderful surprise!
What goes in a care package for a college student?
Who says that college life has to be tough?
Show your college-bound kid you’re thinking of them with an amazing care package! Here’s how:
Pamper them with toiletries like soap, body scrub, or dry shampoo. It’s practicality meeting indulgence.
Include favorite snacks like popcorn, pretzels, candies, chips, or nuts—because nothing beats study stress like mouthfuls of favorite munchies!
Throw in souvenirs from your hometown because nostalgia is a comfort blanket away from home.
Don’t forget a gift card or two. It’s the little ticket to a happy spree when the budget runs low.
And finally, a heartfelt, handwritten note to remind them they’re loved, even from miles away.
In every box, you’re not just bringing joy to your college kid, you’re sending them love and comfort!
Why Send A Care Package To A College Student?
1. A Gift of Sustenance and Comfort 2. A Way to Express Love and Support 3. A Means to Introduce New Things 4. A Way to Help College Students Cope with Stress 5. A Resource for Essential Kitchen Items 6. A Means to Stay Connected 7. A Way to Provide a Mood Booster 8. A Tool to Help College Students Transition into Life Indoors 9. A Way to Give Money 10. A Gift That Can Help College Students Get Ahead
What are some care package ideas?
Care packages are personalized boxes filled with essentials, comforting items, or little luxuries that can offer solace, promote self-care, or give a delightful surprise.
Here are some ideas to get the creative juices flowing!
Imagine delivering a box packed with their favorite homemade goodies, essential school supplies, novel books, or even a themed package for that upcoming stressful finals week or just because!
Unbox this opportunity and read on to discover unique ideas for designing amazing care packages. Excite a college student today with this heartfelt gesture!
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
What item should every care package include?
Creating a care package can be a delightful way to demonstrate your care and thoughtfulness. It combines a mixture of practical items, fun surprises, and often much-needed essentials.
What goes into each package can vary greatly, but a gift card is always a must!
Care Packages Themes for College Students
Choosing a theme for a care package can help streamline the process and reduce the stress of deciding what to include.
Themes could be traditional, humorous, or catered towards particular interests or events, such as a holiday-themed box, an orange-colored items package to signify the end of exams or a coffee-themed care package for those who love a good brew.
Regardless of the theme, here are a few items that should ideally be included in every care package:
Self-Care Items: These can include items like face masks or beauty products, scented candles, and relaxing bath products, among others. They offer the recipient the luxury of self-pampering.
Comfort Items: Usually, soft items such as socks, blankets, or even simple things like their favorite tea or coffee can provide comfort.
Snacks & Treats: These are a must-have. Include their favorite bites or homemade goods if possible.
Drinks: Depending on the recipient’s preference, you can include a variety of drinks, like coffee, tea, or hot chocolate.
Fun Things: Small games, coloring books, or novels can serve to reduce stress and provide entertainment.
Personal Care: Essential items such as toiletries or grooming products are always useful.
Cleaning Supplies: Especially for those away from home, cleaning supplies can be handy.
School Supplies or Work Essentials: Depending on the recipient’s needs, this could include notebooks, pens, sticky notes, etc.
Personal Safety Devices: Consider adding items like a mini first aid kit, a personal alarm, or a safety whistle.
Other Useful Things: Depending on the recipient’s interests, you could add items like a new book, a special photo, study aids, or sports gear.
Regardless of what you choose to include, the most important aspect of a care package is that it conveys love and care to the recipient.
Make sure you time sending your package well, and learn what time do Amazon packages arrive.
Best Care Packages for College Students
College students, often away from home for the first time, can sometimes struggle with homesickness or stress.
One of the most cherished remedies for these feelings is a thoughtful care package from home. It is an amazing way to remind them they’re loved and missed, bridging the gap between home and school.
But what really makes the best care package?
One that aligns with their interests, meets their fundamental needs and contains a surprise or two for fun.
A care package can boost their morale, make them feel less homesick, and get them through challenging times. It’s not just about what’s in the package, it’s about the thought and care that goes into it.
Here is a list to fill your care package with:
Food & Drinks:
1. Snacks: College students need fuel for their late-night study sessions. A variety of healthy snacks can give them that energy boost they need.
2. Instant coffee or tea bags: For caffeinated moments without needing to leave their dorm room.
3. Homemade Cookies or Baked Goods: Nothing says ‘care’ like homemade treats.
4. Specialty Coffees: For the coffee-lover student. Because it serves as an essential tool for late-night study sessions, helping students remain awake and energized.
5. Spirulina Powder: A superfood that’s great for a health boost.
6. Granola Bars or Oatmeal: Quick and easy to make, these are ideal for those mornings when students are running late for their classes.
7. Sugar-free chewing gum: Helps to maintain focus while studying.
8. Recipe Books: For the college student who needs help learning to cook. Even better create your own digital recipe book to pass along your family favorites!
9. Water Bottle: A reusable water bottle serves both as a health and environment-friendly gift.
10. English Breakfast Tea: This can provide a comforting, hot beverage that is easy to make in a dorm room. This electric tea kettle would be a special treat!
11. Hot Sauce: A versatile condiment like hot sauce can spice up drab, repetitive cafeteria meals.
12. Snacks & Munchies: Items like popcorn and pretzels are perfect for late-night cravings or for sharing with roommates.
13. Treats: Candies, chips, cookies, marshmallows, and nuts give students a sweet or savory option for a quick snack between classes.
14. Healthy items: Vitamins are great to keep students healthy, especially during finals when stress levels are high and sleep is compromised.
15. Fondue Set: A fun treat and a good reason to invite friends over.
Besides these food items, it would also be wonderful to include a few gift cards for local eateries or popular chains like Starbucks to give students the chance to have a meal or two outside the college cafeteria.
Self Care & Pampering:
16. Facial Masks: A fun and relaxing self-care item.
17. Natural Skin Care Products: To ensure their skin stays healthy too.
18. Cozy blanket: For those chilly nights in the dorm.
19. Candles: especially battery-powered ones, offer a relaxing ambiance without posing a potential fire hazard, making them ideal for dorms.
20. Spa Items: Think along the lines of bath bombs, Epsom salts, body lotion
21. Sheet Masks: this popular DIY spa at-home item is a must!
22. Essential Oils: These are needed as they offer a calming and uplifting aroma that can alleviate stress and contribute to an overall sense of well-being, especially in high-stress environments like colleges or workplaces.
23. Nail Care Kit: specifically items to do gel manicures at home. This is something I love to do myself!
24. Sleep Mask: To ensure a good night’s sleep.
25. Cute or neutral cozy socks: Socks provide warmth and comfort, helping individuals relax after a long day of classes or studying.
26. Shower Massager: A shower massager can provide much-needed stress relief after a day filled with classes, activities, and studying.
27. Scalp Massager: This can be an excellent tool for relaxation and stress relief, making it a perfect inclusion for a college beginning or the exam period.
28. Mini First Aid Kit: Every student should have a basic first aid kit.
To Get Moving (Health & Fitness):
29. Sports Equipment: For some physical activity.
30. Bluetooth Speaker: For listening to music or watching movies with friends.
31. Yoga Mat: It’s crucial to note that a yoga mat plays a significant role in providing comfort, reducing injury, and enhancing concentration during workouts.
32. Running Shoes: Running is one of the easiest ways to stay active. Or maybe to replace an old set of shoes.
33. Fitness resistance bands: These bands are perfect for incorporating into a student’s fitness routine, keeping them in shape even with their busy schedule.
Artsy Or Creative:
34. Coloring Book and Colored Pencils: A relaxing way to take study breaks. Or try this backward coloring book.
35. Colored Pencils: These complement the coloring books perfectly.
36. Notebooks and Stationary: Artists and writers would appreciate sets of beautiful stationery.
37. Origami Paper: tap into their creativity by providing a relaxing and enjoyable pastime that can help alleviate the stresses of academic life.
38. DIY Crafts: Handmade items for a personal touch.
39. Art Supplies: If they have an artistic side, new supplies can help fuel their creativity.
Mindfulness:
40. Stress Balls: Perfect for stressful exam periods. These are my favorite item on my desk!
41. Letters or Notes of Encouragement: Personal notes to show your love and support.
42. A Self-Care Journal: Helps to promote mindfulness and wellbeing.
43. An Inspirational Book: Can provide motivation and comfort.
44. Fidget Toy: Great for stress relief and concentration.
45. A calming lavender scented candle: This can help create a soothing environment, perfect for stress relief after a long day of lectures.
46. Zen Garden: This mini-sandbox can foster a bit of creativity and provide a mindless distraction from overwhelming studies.
47. Meditation guidebook: This can introduce a beginner to effective meditation techniques and potential benefits for mindfulness.
48. Affirmation cards: Daily positivity prompts can boost mood, and encourage a positive mindset.
49. White noise machine: This can provide calming background noise, assisting in good quality sleep and fostering mental well-being.
50. Weighted blanket: Proven to stimulate serotonin production, this blanket can increase feelings of calm and aid in better sleep.
51. Gratitude journal: This promotes the daily practice of noting down things one is grateful for, fostering a positive mindset, and reducing stress.
52. Mini Buddha Board: With this, they can paint with water and watch it slowly evaporate, reminding them of the impermanence of life’s stressors.
For School:
53. Portable Charger: No student wants to run out of battery while on the go.
54. Noise-Canceling Headphones: A fantastic tool that can help students study in peace, even in a noisy dorm.
55. iPhone/Android Charging Cord: An extra charging cord can be a lifesaver for busy students.
56. Planner: Helps students keep track of their assignments and plans. Don’t forget these planner stickers.
57. USB Flash Drive: For backing up important assignments and projects.
58. Study Supplies: Flashcards, highlighters, sticky notes, and more.
59. Stickers: These can be used to decorate their laptops, notebooks, or other personal items, adding a fun and creative element.
For Fun:
60. Birthday decorations: For a surprise birthday celebration.
61. Flying Butterflies out of the Box: This is one of my favorites! The butterflies fly out of the box when opened! Very easy to set up too.
62. Movie Night Pack: A collection of films, popcorn, and candy for a sweet night in.
63. Mini Board Games: Something fun they can do during their free time.
64. Board Game or Playing Cards: Fun games to play with friends during downtime.
65. Funny Socks: Just to put a smile on their faces.
66. “Orange you glad exams are almost over?” care package: A box full of orange-colored items will not only be visually striking but will also offer a light-hearted joke to help reduce exam stress.
To Help Their Budget:
67. Wallet or Money Clip: To keep their money and ID safe.
68. Budget Binder: make sure they are starting out right! Here are the best budget binders.
69. Laundry Detergent Pods: This easy-to-carry, mess-free laundry solution is perfect for college students.
70. Hygiene Products: Essential toiletries like toothpaste, soap, shampoo, and conditioner can save them a trip to the store.
71. Extra set of Sheets: Comes in handy during laundry day.
72. Prepaid Visa Gift Cards: These can be for anything from their favorite stores, food places or for movie tickets.
73. CASH: Check out these money gift ideas on ways to package it.
74. Money Cake with Cake: These are extremely popular with the recipient.
Maybe it is a good reminder for them to find remote jobs for college students.
Nostalgia:
75. A DIY Scrapbook: A place to store all of your pictures and mementos.
76. Stuffed Animal: For comforting cuddles on lonely nights.
77. Postcards from Home: Reminds them of their roots while away.
78. Cute photo frames: For them to display their favorite memories.
79. Personalized Keychain: To carry a piece of home with them at all times.
How to Choose the Right Care Package for a College Student
Transitioning to college life is notoriously challenging for students.
Tackling the academic load, juggling social responsibilities, and handling homesickness can be overwhelming. That’s where a thoughtful care package comes in as a ray of hope, bringing a taste of home, a load of love, and a boost of morale.
While choosing the ideal care package, consider these critical attributes:
Personalization: Pick items aligning with their tastes and interests. The more personal, the more cherished.
Versatility: Include a variety of items, from fun snacks to useful goods. Variety is the spice of life.
Affordability: There’s no need for a high budget. Thoughtfulness doesn’t need to be expensive.
Thematic elements: Consider packages focused on upcoming holidays or exam seasons for added relevance. The more timely, the more needed.
Convenience: Prioritize products that save your student time and energy. The simpler, the better.
Remember, these packages are powerful messages of love and support. Choose wisely.
When to Send Care Packages for College Students
One of the most fitting times to send a college student a care package is at the beginning of the freshman year when they are trying to adjust to their new environment.
However, these thoughtful packages can be sent at any time throughout their college journey to remind them that they are missed and cared for back home.
Fall
Thanksgiving
Christmas
Valentine’s Day
Easter
Finals
Birthday
Or any other holiday!
Especially during stressful periods, like exam season, a care package can be a well-appreciated and timely morale booster.
Tips for Sending a Care Package to a College Student
1. Consider the Student’s Needs
Do you puzzle over what to put in a care package for your college student? You’re not alone.
Many parents struggle with creating a meaningful gift that caters to their child’s actual needs.
The key is convenience and usefulness—factors often overlooked in the thrill of care package creation. Let’s transform your approach.
Tailoring your package to their needs ensures your thoughtful gift becomes a practical blessing in their hectic college life.
2. Consider the Budget
Overspending on care packages for your college student can shock your wallet. Just like trying to figure out how much to give for high school graduation.
The wrong box size could lead to needless extras and unexpectedly high shipping costs. Thankfully, you can easily drop ship the items with Amazon Prime.
Also, think about how many times per year you plan to send a care package. That way you can spread out the fun throughout the year.
This is especially true if you want to know how to pay for college without loans.
3. Email or Call the Student to Find Out What They Need
Don’t risk sending unneeded items to your college student that end up wasting space and money.
Imagine the disappointment when they open the package to find redundant or unnecessary supplies.
But there’s an easy fix! Before assembling a care package, make a quick call or send an email asking what they actually need. This simple step ensures your thoughtful gesture aligns perfectly with their requirements.
Remember, it’s about sending useful items that your student appreciates and utilizes – making your effort truly count!
FAQ
Feeling homesick is a common challenge for many college students. Their new environment can seem excitingly novel but also distressingly foreign. But you can help alleviate this uncomfortable feeling by sending thoughtful, comforting care packages.
Snacks from Home: Local snacks can evoke a sense of nostalgia, making them feel closer to home.
Personal Mementos: Tokens like pictures of family, posters of hometown landscapes, or preserved local flowers help create a familiar space in their dormitory.
Money: An unexpected cash bonus is not just practical, but also a mood booster. Who doesn’t love a surprise windfall?
Heartfelt Note/Card: A message of love and encouragement can provide emotional resiliency in distressing times.
Remember, your care packages remind them that they’re loved and thought of, even miles away.
Sending care packages to college students is a thoughtful gesture that can be done at any frequency you prefer.
For example, once a quarter might be a good rule to ensure your student receives regular reminders of your love and support.
Supplements around finals, or during difficult times, are always appreciated. Feel free to adjust the frequency based on your student’s needs and preferences.
Sending a college girl a care package is a great way to remind her of home and boost her spirits. And typically, girls want fun things specific to them.
Here are the top 5 items to include:
Hair Accessories: Such as colorful hair ties or headbands to add a fun touch to her looks.
Socks: Choose cozy and cute ones, they’ll be perfect for chilly dorm nights.
Lip Balm: This is essential for avoiding chapped lips, consider tinted options for a dual-purpose product.
Fun Study Supplies: Including unique pens or sticky notes as they can make studying a bit more entertaining.
Face Masks: They offer a chance for self-care and relaxation, especially for those stress-induced skin flare-ups.
Time to Pack Those College Care Packages!
Transitioning to college life can be both exciting and overwhelming. Often, college students find themselves daunted by academic rigors, social pressure, and the unique environment of living away from home.
But what if there was a simple way to overcome these challenges?
Enter: the care package.
With a little bit of planning, you can easily put together a care package that will make your student smile.
So what are you waiting for? Get started today!
Know someone else that needs this, too? Then, please share!!
Fannie Mae Moderator: Good day, and welcome to the Fannie Mae Second Quarter 2023 Financial Results Conference Call. At this time, I will now turn it over to your host, Pete Bakel, Fannie Mae’s Director of External Communications.
Pete Bakel: Hello, and thank you all for joining today’s conference call to discuss Fannie Mae’s second quarter 2023 financial results. Please note this call includes forward-looking statements, including statements about Fannie Mae’s expectations related to: economic and housing market conditions; the future performance of the company and its book of business; and the company’s business plans and their impact. Future events may turn out to be very different from these statements.
The “Forward-looking Statements” section in the company’s Second Quarter 2023 Form 10-Q, filed today, and the “Risk Factors” and “Forward-Looking Statements” sections in the company’s 2022 Form 10-K, filed on February 14, 2023, describe factors that may lead to different results.
A recording of this call may be posted on the company’s website. We ask that you do not record this call for public broadcast, and that you do not publish any full transcript.
I’d now like to turn the call over to Fannie Mae Chief Executive Officer, Priscilla Almodovar, and Fannie Mae Chief Financial Officer, Chryssa C. Halley.
Priscilla Almodovar: Welcome, and thank you for joining us today. Let me begin by spending a few minutes on the economic environment before turning to our performance in the second quarter of 2023. After that, our Chief Financial Officer, Chryssa Halley, will discuss our second quarter results and current outlook for the economy.
Macroeconomic Conditions
Economic data was mixed in the second quarter, though GDP growth was stronger than anticipated. The Federal Reserve continued tightening monetary policy and raised their target Fed Funds rate twice in the past few months. One of the focal points in their decision-making has been how much housing contributes to inflation. And while overall inflation has slowed, housing’s contribution to inflation has remained elevated.
The resiliency of the housing market continued to surprise many of us, especially since mortgage rates and high home prices continue to weigh on housing affordability. The lack of housing supply is a major contributing factor. Many current homeowners are reluctant to sell their existing homes and give up their low mortgage rates they locked in in 2020 or 2021. Earlier this month, the National Association of REALTORS® reported that there were 1.08 million existing homes for sale last month compared with 1.92 million in June 2019. This lack of existing home supply drove stronger than expected home price growth. In fact, we estimate that single-family home prices rose about 5% during the first six months of the year, while many of us were anticipating a decline.
Single-family mortgage origination volumes in the overall market were about 35% lower than the same time last year, despite the estimated $120 billion increase quarter-on-quarter due to the typical spring homebuying season.
It continues to be a tough market for our lender counterparties — something we are monitoring closely.
Thanks to the dedication of our leadership and teams across the company, we continued to support an unprecedented housing market while generating strong financial results and effectively managing risk.
Second Quarter Financial Results
Now, turning to our second quarter financial performance. The strength in home prices during the quarter had a direct impact on our earnings, largely due to the decrease in our single-family allowance that Chryssa will talk about.
We reported $5 billion in net income and $7.1 billion in net revenues. As a result, through retained earnings we continued to build our net worth, which reached $69 billion as of the end of June.
I’m proud that through our efforts, we provided $104 billion of liquidity to the single-family and multifamily markets. In doing so, we helped borrowers obtain mortgage credit for approximately 420,000 home purchases, refinances, and rental units. This included approximately 139,000 units of multifamily rental housing, a significant majority of which were affordable to households earning at or below 120% of area median income. We also helped 108,000 first-time homebuyers purchase a home.
Mission Performance
Despite challenges with housing affordability and supply, consumers’ homeownership aspirations remain high. And while Fannie Mae cannot directly control these factors, we are working to help address housing challenges consumers face — especially those that disproportionately burden underserved renters and homeowners. And we’re doing so safely and soundly. Let me touch on a few examples.
First, we advanced our mortgage pricing model. The new construct improves support for traditionally underserved borrowers while further aligning our pricing model to our capital requirements. Second, we continued to support Special Purpose Credit Programs, currently active in six markets, that are expected to make loan qualification easier for underserved borrowers. And third, we introduced a new option for lenders to verify a property’s market value and eligibility as part of our journey to make the home valuation process more effective, efficient, and unbiased.
Now, our role is not just about helping consumers get into a home — it is also about ensuring they remain stably housed. Housing stability is key to well-being, for both individuals and communities. On that note, I’m gratified that as of the end of June, we stood at less than 100,000 seriously delinquent single-family loans, coming a long way from the over 1 million seriously delinquent loans we saw in our single-family book in February of 2010. In addition to market factors, this is a testament to the enhanced underwriting policies, servicing options, and support we give to lenders and borrowers. This includes things like free counseling assistance to borrowers and renters impacted by natural disasters and free foreclosure prevention assistance to borrowers in distress. We remain focused on continuing to support renters and homeowners as they face the uncertainties of the current market.
Wrap Up
You know, this fall marks 15 years since Fannie Mae was placed in conservatorship. A lot has changed since that time. Today Fannie Mae has been transformed. Fannie Mae is safer and stronger, thanks to years of work to improve the resiliency of our business and our steadfast focus on strong risk management. Because of this, we continue to be a stabilizing force in the market and to deliver on our mission — like we did through the COVID-19 pandemic, and how we’re doing now through this challenging economic cycle. We are committed to being a reliable source of liquidity and stability to the housing finance system in the United States.
Now, I’ll turn it over to Chryssa to discuss our second quarter financial results.
Chryssa C. Halley: Second Quarter Results
Thank you, Priscilla. And good morning.
As Priscilla mentioned, we reported $5 billion in net income in the second quarter, a $1.2 billion increase compared to the first quarter of this year. Our second quarter net revenues remained strong at $7.1 billion thanks to healthy guaranty fee income. This is relatively flat compared to the prior quarter. A $1.3 billion benefit for credit losses was the primary driver of the quarter-over-quarter growth in net income. This was mainly driven by stronger than expected actual home price growth during the quarter of 3.6% that resulted in a decrease in our single-family allowance.
Let me now turn to a few highlights of our Single-Family business. Despite higher mortgage interest rates quarter-over-quarter, our single-family acquisition volumes increased by 32%, to $89 billion in the second quarter compared to $68 billion in the first quarter. However, this was still 48% lower than the $172 billion of single-family loans we acquired in the second quarter of last year. Not surprisingly given the rate environment, the purchase share of our acquisitions reached 86% in the second quarter — a level we have not seen for at least 23 years. Our overall single-family book of business remained strong, with a weighted average mark-to-market loan-to-value ratio of 51% and weighted average credit score at origination of 752. Our single-family serious delinquency rate remained at historically low levels, and as of June 30 stood at 55 basis points. We continue to manage credit risk through credit risk transfer transactions. In the second quarter, we transferred a portion of the credit risk on approximately $116 billion of mortgages through our single-family credit risk transfer programs.
Shifting to our Multifamily business, we acquired $15.1 billion of multifamily loans in the second quarter, bringing our acquisitions through June 30 to $25 billion. Our volume cap for the year is $75 billion. The overall credit profile of our multifamily book remains strong, with a weighted-average original loan-to-value ratio of 64% and a weighted-average debt service coverage ratio of 2.1 times. However, our multifamily seniors housing loans, especially those that are adjustable-rate mortgages, remain stressed. Seniors housing loans represent 4% of our multifamily book as of the end of the second quarter, but nearly 40% of these loans had a debt service coverage ratio below 1.0 as of June 30, indicating a heightened risk of default. We recorded a $152 million provision for credit losses in the second quarter in our multifamily book, primarily due to decreases in estimated property values seen in the overall multifamily sector following years of strong growth. Our multifamily serious delinquency rate increased slightly to 37 basis points as of the end of June, up from 35 basis points at the end of March. Our primary way to share risk on our multifamily book is through our unique DUS® risk-sharing model, where originating lenders typically retain approximately one-third of the credit risk on loans we acquire. In addition, in April of this year, we closed a multifamily credit insurance risk transfer transaction, transferring a portion of risk to diversified insurers and reinsurers.
Outlook
Before we close out, I’ll touch on our current economic outlook. The economy has remained more resilient than we expected earlier in the year, but we believe it is still on a decelerating path, and additional drags are likely forthcoming. While noting the probability of a “soft landing” may have increased of late, our Economic and Strategic Research Group expects the economy will enter a modest recession in the fourth quarter of this year or the first quarter of next year. The full effects of tighter monetary policy and tightening credit conditions to date have yet to be fully felt in the real economy and on consumers, and additional banking stress remains a possibility. Given current housing demand and the lack of existing homes for sale, we expect strength in new home sales and construction will support the overall economy as it exits a modest recession. We currently forecast the 30-year fixed rate mortgage rate will average 6.6% for the year.
When we spoke last quarter, we anticipated single-family home price declines on a national basis in 2023. However, given strong home price growth in the first half of the year, we now project national home price growth of 3.9% for the full year. We continue to expect regional variation in home price changes. Our expectations are based on many assumptions, and our actual results could differ materially from our current expectations.
As a reminder, we make available on our webpages a financial supplement with today’s filing that provides additional insights into our business.
Thank you for joining us today.
Fannie Mae Moderator: Thank you, everyone. That concludes today’s call. You may disconnect.
For 35 years, Bay Area finance revolutionaries have been pushing a personal investing strategy that brokers despise and hope you ignore. [This is] the story of a rebellion that’s slowly but surely putting money into the pockets of millions of Americans, winning powerful converts, and making money managers from California Street to Wall Street squirm.
So writes Mark Dowie in a recent issue of San Francisco magazine. Dowie describes how Google prepared for its IPO in 2004. Aware that hundreds of young employees would soon be millionaires, the company brought in a series of financial experts to teach them to make smart investment choices.
Stanford University’s Bill Sharpe, winner of the 1990 Nobel Prize in economics said, “Don’t try to beat the market.” He advised the Google employees to put their money into indexed mutual funds.
Burton Malkiel, author of the classic A Random Walk Down Wall Street (in which he posits that a “blindfolded monkey” could pick stocks as well as a professional money manager) and former dean of the Yale School of Management said much the same thing. “Don’t try to beat the market … and don’t believe anyone who tells you they can — not a stock broker, a friend with a hot stock tip, or a financial magazine article touting the latest mutual fund.”
Jack Bogle is the founder and retired chairman of The Vanguard Group. What did this expert on mutual funds advise? The same as the others. “Brokers and financial advisors … are there for one reason and one reason only — to take your money through exorbitant fees and transaction costs, many of which will be hidden from your view.”
These experts, and many like them, recommend the same thing: take the slow, sure path to wealth. Invest your money in index funds. Index funds are low-maintenance, low-cost mutual funds designed to follow the price fluctuations of a broader index, such as the Dow Jones Industrials or the S&P 500. They are boring investments. But they work.
Related >> How to Invest in Index Funds
Jack Bogle’s common-sense approach has inspired a loyal following among savvy investors, many of whom participate in the Vanguard Diehards discussion forum.
[This] forum is characterized by its contributors’ commitment to low cost — primarily index — mutual fund investing, its unusually civil tone, and the thoughtful replies to almost all who post a question, no matter what their level of investing knowledge.
Some of these diehards call themselves Bogleheads in tribute to their muse. Three of them recently published The Bogleheads’ Guide to Investing, which is an excellent guide to smart investment choices. In the book, the Bogleheads stress their philosophy: Make index funds the core — or all — of your portfolio.
But not everyone believes that index funds the best choice for personal investors. A week ago I shared a brief conversation about money with Sparky, a friend to whom I often go for investment advice — he reads widely on the subject, and is well-informed. He doesn’t like index funds. Also last week, Jim at Blueprint for Financial Prosperity urged his readers, “Don’t just buy index funds.” Another blogger is worried that even index funds may be getting too complicated.
Even some professionals prefer other stock investment strategies. For example, Lowell Miller wrote a well-regarded book entitled The Single Best Investment: Creating Wealth with Dividend Growth in which he touts high-quality, moderate-growth, dividend-producing stocks as the best choice. In The Only Investment Guide You’ll Ever Need, Andrew Tobias admits the virtues of index funds, noting that over time they beat the returns on nearly every other sort of investment. But he notes:
For the prudent, thoughtful investor there is now the possibility of the ultimate fund. The one you put together yourself. The Personal Fund. It is no-load, of course, because you don’t charge yourself a nickel. And not just low-expense, like an index fund, but, rather, no expense.
This “personal fund” approach is exactly what my friend Sparky was trying to describe to me in our conversation last week. I like the idea of using some portion of my portfolio for a personal mutual fund. It’s easier for me to pay attention to my investments when they’re stocks I picked myself. But I will always want the core of my investments to be in index funds.
Despite the dissenters, most experts agree: index funds are an excellent way to get rich slowly. Dowie’s article on the subject is long, but is worth reading if you’re serious about your stock investments. Bookmark it. Print it. Save it for later. But make some time to read it.
We’ve all been there — living in a cluttered, disorganized space, promising ourselves to organize it but finding it a daunting and never-ending task. It’s time to put an end to the cycle of clutter and chaos, for real this time. By breaking down organization tips by room, we’ll show you how to declutter your home and regain control over your living space. From practical tips on sorting and organizing to expert advice on letting go of sentimental items, we’ve got you covered on your journey to a cleaner home.
Benefits of decluttering
Decluttering your home goes beyond just tidying up; it brings along a plethora of benefits that can significantly improve your physical and mental well-being. A clutter-free environment promotes better focus and productivity. A study by Princeton University researchers discovered that clutter can make it difficult to focus on a particular task.
More specifically, they discovered that a person is overwhelmed by objects not related to a particular task, making it harder to focus and complete projects efficiently. Additionally, decluttering is known to have great benefits when it comes to decreasing stress levels and anxiety. Decluttering is an essential step toward improving your overall quality of life.
The time is now
One of the hardest parts of decluttering is knowing where to start. It’s overwhelming to begin a project of decluttering and organizing your space knowing how many areas need attention. However, delaying the process only allows the clutter to grow and worsen the situation. The longer you wait, the more time and effort it will take to tackle the clutter, and it might even become a source of frustration. Starting now, going room by room through our guide, will allow you to break this process down into digestible steps so you reclaim control over your space.
How to declutter your home, by room
When going room by room, we recommend you use Marie Kondo’s KonMari Method of asking yourself, “Does this item spark joy?” If an item doesn’t bring you joy or serve a practical purpose, it’s time to say goodbye.
Bedroom
When starting the decluttering process of your bedroom, make sure to make your bed first. This helps the space look a little cleaner, encouraging you to keep treading on.
Nightstands and cabinet surfaces: Clear off nightstands, dressers and any other surfaces of any items that don’t belong. Keep only essential items like a lamp, clock or a few decorative pieces. Put any misplaced items back in their original home and store other items in drawers using organizers. Drawer/ shelf organizers
Under the bed: Pull out anything under the bed that doesn’t belong. Between clothes that have fallen, loose storage for items or even trash, this is an area that accumulates mess. By cleaning this space, you can invest in under-bed-organizers to practically store clothes, shoes or miscellaneous items without a clear category.
Dresser drawers and closet: Start going through your dresser and set aside a donate pile, a wash/dry/clean pile and a keep pile. Ask yourself with each item if you still wear it, need it or even want it. If it’s an article of clothing in decent condition and you don’t have a use for it (or haven’t worn it in a while), it makes for a great donation. Apply the same process to clothes in your closet. Hang up any loose clothing on the floor as well to tidy up this small corner as well.
Bathroom
Decluttering your bathroom is a rewarding and refreshing process. It’s a good idea to start by picking up any clothes from the floor so you can really tackle organizing the cabinets and drawers. Then, set aside two areas; one for garbage and one for items being kept.
Countertops and sink area: Remove all items from the countertops and sink area that don’t belong. It’s ideal, for decluttering purposes, to keep this area clear and organize items within cabinets or shelving. Make sure to add to the discard pile any empty or expired containers, old cosmetics and products you no longer use.
Under-the-sink cabinet, drawers and medicine cabinet storage areas: Odds are, there are quite a bit of products and containers to dispose of in these areas. Make sure to check expiration dates to help dispose of space-taking items you no longer need. Use drawer dividers and organization containers where needed to separate items by category and frequency of usage. It’s easier to keep bathroom items tidy in designated spots for them, through dividers and containers.
Shower/ bathtub: Remove any empty items from the shower or bathtub area and take note of any necessary refills you may need. Make sure to ask yourself if you need the products before purchasing replacements to keep products minimal in this area. Consider using shower caddies or wall-mounted organizers to keep the products tidy and easily accessible.
Living room
Depending on the size of your home or apartment, your living room may bleed into other areas. Consider any walkways or middle areas between your living room and other areas in this section, especially since there’s typically more space in the living room for more storage when cleaning up these undefined areas.
Floor: Start by removing any items that don’t belong in the living room and return them to their proper places in other rooms. Discard any trash items that are present.
Coffee table: Clear off any items that are not essential or decorative. Invest in a decorative tray to place on your coffee table to hold various items like remote controls, magazines, candles and other miscellaneous items that otherwise look cluttered on your coffee table.
Entertainment center: These centers are necessary but often become cluttered quickly with numerous cables and remotes. Remove outdated electronics, cables and accessories that you no longer use. Purchase a cord cover or holder to keep these cords hidden and untangled for a more polished appearance. Then neatly arrange video games and other media items and consider donating or selling any DVDs or games you no longer enjoy or use.
Other decor items: Bookshelves and other wall shelving can accumulate random items over time. Donate or sell any books you no longer read or need and clear out random decor that serves no purpose to the aesthetic of the room.
Kitchen
It’s a great idea to start decluttering this room by cleaning out the fridge and pantry of any expired or stale food. Donate any canned items and non-perishables to local food pantries.
Countertops: As they are the most visible and used spaces in the kitchen, remove all items that don’t belong on the counters, like paperwork, keys or other non-kitchen items. Put away small appliances that you rarely use, leaving only the essentials.
Cabinets and drawers: This is another great instance to use containers to organize drawers and cabinets by sorting their contents into categories.
Under the sink: This area often accumulates various cleaning supplies. Dispose of any empty or old cleaning products and use organizers or caddies to keep everything tidy. Invest in a bag dispenser to keep your reusable plastic grocery bags organized as well.
Junk drawer: We all have a notoriously cluttered junk drawer in our kitchen or dining area. While it’s fine to keep this drawer for miscellaneous items, it’s important to dispose of actual junk and only keep essential items.
Face clutter head-on
Conquering the cycle of clutter and chaos in our living spaces is not an impossible task. By taking a proactive approach and breaking down the decluttering process by room, you’ll regain control over the mess. With the urgency to start now, armed with practical tips and a modified KonMari Method, we can bid farewell to unnecessary items and embrace a clutter-free lifestyle. Begin this transformative journey today and experience the liberating power of decluttering in your dream apartment!
It can be tough to get a good handle on your finances, especially when you’re first starting out in your career or just don’t have a lot of cash to spare. Throw in student loan debt, a worldwide pandemic, and growing economic uncertainty, and it can seem especially daunting to get your financial situation on the right track.
Luckily, there are a few bad money habits that you can break that will make getting your finances in order easier. While there are many aspects of your financial situation that you can’t control, getting rid of bad money habits and forming new, responsible habits when it comes to spending and borrowing can set you up for success.
What’s Ahead:
1. Spending More than You Earn
How much you spend vs. how much you earn is one of the key factors that can make or break your financial health. You should always aim to spend less than you make each month, with the goal of saving 20% of your income each month.
While this sounds simple enough, life can get in the way sometimes, whether you have a couple of unexpected expenses that tank your budget, you lose a source of income, or you just don’t quite make enough to meet your basic needs each month. Even if you find yourself unable to spend less than you make right now, earning more money than you spend should always be your ultimate goal when it comes to setting your finances in order.
2. Living above Your Means
Living above your means can put a serious dent in your finances if you aren’t careful. While you probably don’t need to be frugal to the extreme, you should steer clear of expensive and unnecessary purchases like new cars, luxury apartments, and fancy vacations if you’re still trying to get your financial footing. This doesn’t mean you can’t treat yourself every once in a while, but it does mean you should make it work within your budget.
3. Not Sticking to a Budget
How do you know how much you can spend each month while still living within your means? The easiest way to do so is to make (and stick to) a budget.
You should include necessities like housing, utilities, groceries, and insurance, and may want to add categories for saving and discretionary “fun” spending each month if your budget allows.
Not sure where to start? Budgeting software like PocketSmith makes budgeting easy and painless.
4. Not Tracking Spending
After you set a budget, the next step is to track your spending each month to make sure that you’re sticking to it. Tracking spending can help you to make sure that you’re not going over budget in any one area. It also helps you to keep track of your finances and get a clear-eyed view of what you spend your hard-earned money on.
5. Not Educating Yourself about Personal Finance
The world of personal finance can be full of jargon and terms that are confusing for beginners. I had never studied business or accounting and found many financial terms frustratingly opaque when I first started to learn more about personal finance.
Unfortunately, poor financial literacy can have negative consequences when it comes to your financial wellbeing. Knowing enough about personal finance to make responsible and educated decisions when it comes to money is really important. Luckily, there are plenty of free resources online (including the articles here at Money Under 30!) to get you started.
6. Not Building up an Emergency Fund
A sizable safety net is another cornerstone of good financial health. After you’ve set a budget and begun to track your spending each month, you should start to put money away each month towards an emergency fund.
Most financial experts recommend that you save between three and six months worth of expenses in an emergency fund. If you’re not sure exactly how much to save, you can use MU30’s emergency fund calculator to figure it out.
7. Not Saving for Retirement
Once you’ve established a budget and stashed away some money for an emergency fund, the next step on your path to financial wellness should be to start saving for retirement. This is especially important if your employer matches retirement contributions since you’re basically leaving free money on the table if you don’t contribute up to their match limit.
If your employer doesn’t offer any retirement savings options, you can contribute to a traditional or Roth IRA (the contribution limit is $6,000 in 2020.) Once you’ve maxed out your retirement contributions for the year, you can save or invest any additional cash that’s leftover.
If you’re not sure how much you should be saving, MU30’s investment calculator can help you plan your savings goals. If you need help with the ins and outs of investing for retirement and beyond, investing services like blooom (which helps you manage your IRA or 401(k)) and Public investment app make investing accessible even for beginners.
8. Not Paying off Your Credit Card Balance in Full Each Month
I’ve certainly been there – when you’re not making enough to make ends meet and need to pay your bills each month, it can be tempting to put extra expenses on a credit card.
While credit cards provide welcome flexibility and rewards redemption opportunities, they can quickly turn into a major debt burden if you’re not careful. If it’s at all within your means, you should try to pay off your balance in full each month to avoid accumulating interest and building up debt.
9. Making Late Payments
Late payments are another common financial mistake when you’re new to personal finance. Unfortunately, they can have lasting consequences when it comes to your credit score and your wallet.
Late payments on bills often come with additional late fees and interest, and a history of late or missed payments can lower your credit score. If it’s your first time making a late payment, you should contact your creditor to see if they can forgive a one-time late payment.
10. Not Investigating All Your Options when it Comes to Financial Products
It can be easy to go with the path of least resistance when it comes to personal finance products like bank accounts, credit cards, and loans. Whether you get a recommendation from a family member or friend, get a flyer in the mail, or see an ad online, you may be tempted to go with the first available option.
Resist that temptation – you should always compare different financial products in order to ensure you’re getting the best deal possible.
11. Spending Too Much on Groceries
Groceries are definitely one of the biggest weaknesses in my budget! It’s so easy to spend more than you mean to at the grocery store, especially if you love to cook and eat delicious food.
If cooking at home and eating well is important to you, it’s okay to budget a little extra in the grocery department. But you should try your best to reign it in and stick to a reasonable monthly goal when possible. I’ve found it also helps to plan meals in advance, shop at bulk stores like Costco, and invest in shelf-stable staples like rice and lentils to stretch my budget even further.
12. Buying Everything New
If you’re trying to save money and get your finances under control, buying everything new can siphon off hundreds of dollars in savings each year. No matter what you’re looking to buy, from cars to clothing and everything in between, there are probably cheaper gently used options.
I love trawling Craigslist, yard sales, and thrift stores for hidden gems! While you probably won’t be able to find absolutely everything you need, it’s still a good idea to check out your options before you buy any brand new items at the sticker price.
13. Not Investing in Insurance
When your budget is already tight, it can be tempting to forgo insurance in favor of making ends meet. But going without insurance can put you in an even worse financial situation when you need help the most.
If you’re able to, you should invest in insurance including health insurance, home or renters insurance, and auto insurance to make sure that you’re covered in the event of an emergency. Insurance marketplaces like Policygenius can help you to find an affordable insurance policy that works for you.
14. Ignoring Your Student Loans
Like many Millennials, I have a pretty sizable student loan burden racked up over the course of undergrad and graduate school. Making student loan payments on time each month can be a major strain on your budget, but failing to pay off your loans can have even worse consequences.
Luckily, there are some options to make paying down your loans more bearable. When it comes to federal student loans, you may be eligible for an income-based repayment plan that could drastically reduce your monthly payment. And for private student loans, you may qualify to refinance your loans at a lower rate and save on interest.
15. Spending More than You have to on Phone Plans
Phone plans are another common monthly expense that can add up fast if you’re not careful. When purchasing a phone plan, you should think about what services and data you really need before automatically selecting an expensive plan.
It can be helpful to look back at old billing statements and see how much data you really used each month. You may also want to consider getting on a family plan with family members, friends, or roommates to save money each month.
16. Not Shopping around for Auto Insurance
If you haven’t changed your auto insurance policy in a while, there’s a good chance that you could be saving money each month if you make a switch. That might sound like an auto insurance sales pitch, but it’s true!
Your rates are likely to be lower after you switch if it’s been a long time since you’ve been in an accident, or just because you’ve gotten older and are viewed as a less risky driver by insurance companies. Some car insurance companies, like Metromile, charge you based on how many miles you drive each month, which can be a boon if you’re mostly working from home.
If you’re happy with your insurance provider and don’t want to make a switch, ask them if they can reevaluate your monthly rate or match quotes from the competition.
17. Subscription Bloat
Subscription services have proliferated in recent years, from popular software like Adobe Creative Cloud to monthly subscriptions for everything from TV channels to cute underwear. While it’s easy to sign up for a subscription and forget about it, especially if it only costs a few dollars a month, they can really add up over time.
One way to cut down on subscriptions is to survey your bank statement at the end of each month and evaluate which subscription charges are truly worth it.
If you don’t want to take the time to do this yourself, you can set up an account with Trim, a service dedicated to helping you clear out your unused subscriptions. They’ll even negotiate your bills for you on your behalf!
18. Lifestyle Inflation
Whether you just got a pay raise or started a lucrative side hustle, it can feel incredibly freeing to have a little extra cash left over at the end of each month. While it’s tempting to treat yourself and celebrate your new success, you shouldn’t let lifestyle inflation eat into your budget. By living within your means and socking away any additional money you earn into savings and investments, you can set yourself up for a bright financial future.
19. Not Having a Career Plan
While reducing your expenses, saving, and investing are all good strategies toward sound financial health, one of the most effective ways to jumpstart your finances is to earn more money. This isn’t always as difficult as it sounds!
By planning out your career path, you can work toward earning more in the future. If you think you’re not being compensated enough at your current job, you might want to consider asking for a raise or applying to better-compensated positions at other companies.
20. Not Setting Financial Goals
Earning, budgeting, and saving money is a lot easier to do if you have concrete goals in mind. Whether your goal is to be debt-free, save up for a major expense like a new car or a wedding ring, buy a house, or even retire early, setting financial goals can motivate you to break bad money habits and create new, healthy habits that help you achieve your dreams.
Personally, I’m saving up for a little house in the countryside with a big vegetable garden and a little chicken coop.
21. Not Setting Personal Goals
Financial goals are usually pretty tightly interwoven with personal goals. Maybe your personal goal is to work part-time and spend more time with family, or maybe you dream of saving up money to travel the world.
Maybe you’re happy making less money at a job that you believe in and that makes the world a better place, or maybe you prefer a low-stress job with decent pay that allows you to devote time to creative projects. It’s a good idea to get a firm sense of your personal goals so that you can then use them to inform your professional and financial goals.
Personal finance doesn’t take place in a vacuum, and there are plenty of factors outside our control when it comes to making and saving money. If there’s a cause you care about that has an impact on personal finance, like equitable worker compensation, universal healthcare, predatory lending, or other issues, you should consider getting involved.
While one person might not be able to change these big issues alone, many people working together can have a positive impact that stretches far beyond your own bank account.
Summary
The flip side to breaking bad habits when it comes to money is forming better ones in their place. This can be especially hard if you’re struggling financially, but every little step you take in the present will pay off dividends in the future.
Do you ever have trouble keeping up with when bills are due and paying them on time? Welcome to the club. It can be a challenge for many busy people, but paying bills on time is important. Doing so helps you dodge those pricey late fees and maintain your credit score.
For many people, a solution to this challenge is to set up automatic bill payments. This can be done through an automatic payment system, usually referred to as “autopay.” This means that, without needing to remember any dates, write any checks, or click on any payment links, your recurring bills are seamlessly taken care of.
This can be a game-changer that helps you enjoy stronger financial management status and less money stress. But it might not be right for everyone. As with most financial tools, there are pros and cons to using autopay.
So what is autopay? And how do you set it up? Learn the answers to these questions, along with the pros and cons of autopay, so you can determine whether to consider using this option.
What Is Autopay?
What many people call “autopay” is a scheduled, regular transfer of money, usually monthly. These payments are generally transferred from the payer’s bank account (or credit card) to a vendor, or what is known as a payee.
When you link an account to a particular bill or vendor, autopay usually works over an electronic payment system called ACH.
Autopay is typically set up in one of two ways.
• The first is through the company receiving the payment.
• The second is through a bank’s online bill-pay portal.
When you link an account to a particular bill or vendor, autopay usually works over an electronic payment system called Automated Clearing House (ACH). Sometimes automatic payments are referred to as “ACH payments” instead of autopay. If you were to use your credit card, the recurring payment would simply show up as a charge on your card. 💡 Quick Tip: Don’t think too hard about your money. Automate your budgeting, saving, and spending with SoFi’s seamless and secure online banking app.
How Does Autopay Work?
Here’s a closer look at how autopay works. When autopay is set up, you are authorizing debits to occur on a regular basis. You will not be responsible for sending the funds. Some people may see this, however, as not being in control of their money.
When autopay is set up, either the payee is authorized to deduct funds from your bank account or your bank will send the funds for you.
You do need to pay attention to when your funds are whisked out of your account. If you aren’t on top of your finances, you could wind up in overdraft and getting assessed overdraft or NSF fees, plus late charges.
Autopay vs. Scheduled Payments
You may hear the terms autopay and scheduled payments used interchangeably but they are actually quite different.
• Autopay means that payments have been set up in advance to happen regularly on a certain date. You establish the date and the frequency and then don’t need to do anything else to transfer the funds on a recurring basis.
• With a scheduled payment, however, you are manually setting when you want a payment to be made and for how much. You can do this regularly, of course, but it requires more effort on your part to transfer funds.
Autopay vs. Bill Pay
Here’s another situation in which you may hear two terms (autopay and bill pay) used interchangeably. There is a slight difference, however.
Bill pay refers to the process in which your bank initiates payments from your account to the payee. In other words, the payee is not authorized to go in and deduct the money; your bank is instead providing this service.
Setting Up Autopay
Here is some more detail on setting up autopay so you can have your bills taken care of more easily.
1. Looking at Vendor Requirements
You can think of autopay as either pushing money from your account to the vendor, or the vendor pulling money from your account.
Many vendors require you to set up autopay through their website, so your first step may be to look into their requirements. If you are currently receiving a paper bill, they often include instructions on where you can go online to set up autopay — looking there is a good place to start.
For example, if you have a $1,800 monthly mortgage payment, you may be able to provide your mortgage company with your checking account information (such as your bank account number and routing number). They can pull the money for payment automatically. This is the “pull” version of automated payments as the vendor is pulling the money out.
2. Choosing the Day Your Payment Is Made
You generally get to choose the day that the payment is made — you could consider doing this a few days before the bill is due. This should give the automated payment time to move through the ACH system, including when the due date lands on a weekend.
Also, you’ll likely want to be cognizant that you aren’t setting up any automatic payments until you’re sure that any necessary deposits are made. For example, if you need your paycheck to cash before making a rent payment, making sure to give your paycheck at least a few days to settle in your account may be the pragmatic choice. Or you could see if the payee is willing to move your bill’s due date slightly to better accommodate your needs.
Setting Up ACH Payments
Another potential option is to set up an ACH transfer through your bank; this is the bill pay option mentioned above. Doing this typically requires logging onto your bank account’s website and navigating to the bill pay section.
If you go through your bank, you may need to provide them with the information for the vendor, such as the account number and mailing address. You can usually find this information on your bill or monthly statements.
Using the same example as above, you would enter the information for your mortgage lender into your bank’s bill pay portal. Similarly, the money would be sent via ACH on the date you’ve picked to send the money to the vendor.
You may want to consider selecting a date a few days prior to the due date to avoid a late payment. This is the “push” method of automated payments as you are pushing the money out of your account to the vendor.
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Pros and Cons of Autopay
Autopay can be a wonderful tool for many people looking to simplify their finances. But it won’t be for everyone. Here’s a look at some of the pros and cons of using autopay.
Pros of Autopay
Consider these upsides of autopay:
Convenience: Gone are the days of sitting down to write a check for every last outstanding bill. In fact, these days you don’t even need to log into a computer every time a bill comes due. With autopay, you can pay all or most of your bills without lifting a finger.
This means no more having to log online to pay bills while you’re on vacation or busy with work or family. There is something beautiful about the convenience of the “set it and forget it” method to financial management, if you can make it work.
Improving Your Finances: We don’t need to tell you that it is a smart idea to pay your bills on time.
Not only can autopay help you to avoid frustrating late fees, but taking care of your bills right away may help you to avoid agonizing or allowing it to take up precious room on your to-do list.
Paying your bills on time may help your credit score.
Also, paying your bills on time may positively impact your credit score. Currently, debt payment history is the single biggest factor in terms of determining your score. It makes up 35% of a FICO®️ Score.
That means that paying debt-related bills, such as a mortgage, car loan, or credit card bill, on time, could potentially positively impact your FICO®️ Score.
Learning Good Behavior: If you can take the philosophy behind automatically paying your bills and apply it to your savings strategy, this may help your overall financial success. Just as you can automate the payment of your bills, you can automate your savings to retirement and other savings accounts.
If you don’t automatically set money aside, it can be far too easy to spend the money that lands in your checking account. Warren Buffett famously recommended that people “spend what is left after saving, do not save what is left after spending.”
Other ways to use automatic payments? Pay down debt aggressively or save for your future (even beyond a 401(k) if you have one). In either of these scenarios, you could simply set up an automatic transfer of funds as you would with autopay, but direct the funds toward your financial goal.
That way, the money is whisked from your checking account before you’ve even had the chance to consider spending it.
Potentially Saving Money: Vendors and service providers want to get paid on time. Therefore, some vendors or service providers offer a discount for customers that set up autopay, which could save you money.
For example, you may receive an interest rate discount if you set up autopay for a loan. Other vendors may provide a discount on their product or service if you use autopay.
Recommended: Understanding ACH Transfer Limits
Cons of AutoPay
Now, for the potential downsides:
Possible Overdraft Fees: If there isn’t enough money in your account to cover a bill, an ill-timed automatic payment could cause your account to overdraft. According to the FDIC (Federal Deposit Insurance Corporation), overdraft fees can average $35 a pop, depending on your bank.
You’d need to be especially careful if you leverage multiple checking or savings accounts with fluctuating balances or tend to keep your account balance close to zero. In the latter situation, you might benefit from keeping a cash cushion in your account.
Late Fees: Consider the transaction time when setting up your autopay in order to avoid annoying late fees. Late payment fees will vary by vendor but could be costly.
While giving yourself, for example, a four-day buffer could be a good start, it’s important to check with each vendor to determine their recommended timeline. Finally, after you’ve set up autopay, monitoring payments during the first few months to be sure they happen on time can help ease the transition.
Potentially Reinforcing Bad Habits: For some people and in some specific cases, it may not be a good idea to have your finances on autopilot. For example, those who are actively paying off credit card debt may want more control over how much they pay towards their debt each month.
There is almost always an option to autopay the “minimum payment” on a credit card, which may be tempting. There is no penalty when you pay the minimum payment, so it is certainly better than doing nothing.
But, it is much better to pay off the balance in full, if possible. When you do not pay the balance in full, the card will accrue interest, costing you money over time.
If you aren’t at a place where you can pay off the entire balance quite yet, you may want to try and set your autopay for an amount that’s more than the minimum payment so you can make progress on the balance. (And you may want to try to stop using your card in the meantime if this is the case.) If this won’t work for you, you may want to remain in manual control of payments.
Paying for Things You Don’t Need: Subscription services are sneaky. Amounts may seem small and you hardly notice them on a monthly basis, but they can wreak havoc on your annual budget. It is too easy to forget that you are paying for something, especially when you don’t use the service.
If you take advantage of the perks of autopay, don’t forget to reassess your subscriptions every few months to determine whether you actually need the thing you’re paying for. One example: You might not realize how much entertainment you are signed up for, and could save money on streaming services by dropping a platform or two.
Potentially Less Monitoring of Your Accounts: One issue with using autopay could be that you develop a sense of false security that your personal finances are running just fine. You might not check in with your money and review your spending as often as you might. This could have a negative impact. How often should you monitor your checking account? For many people, a couple or a few times a week is a good pace. 💡 Quick Tip: Most savings accounts only earn a fraction of a percentage in interest. Not at SoFi. Our high-yield savings account can help you make meaningful progress towards your financial goals.
Should You Use Autopay?
The digital age can be confusing and overwhelming, but this is one case where it may help to simplify our lives. Managing money can be a tedious task, and paying bills is just one part of it.
By streamlining the bills portion, you may find that using autopay gives you more freedom to focus your attention on other financial goals.
That said, autopay won’t be right for everyone and in every circumstance. For example, autopay might not be a great idea for those who haven’t organized their bills and tend to overdraft their accounts. It may not make sense for someone who is between jobs or out of work.
Autopay could potentially be difficult to manage for freelancers or other workers with variable income throughout the month. Ideally, a person would have some cash buffer for bills in any of these scenarios, but that is not the way it always works out in the real world. 💡 Quick Tip: When you overdraft your checking account, you’ll likely pay a non-sufficient fund fee of, say, $35. Look into linking a savings account to your checking account as a backup to avoid that, or shop around for a bank that doesn’t charge you for overdrafting.
The Takeaway
Autopay can be a convenient way to get your bills taken care of with less time, energy, and stress. However, in some cases, it can have its downsides, so it’s wise to know the pros and cons and continue to monitor your money carefully if you do sign up for autopay.
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FAQ
What should you not put on autopay?
It can be wise not to put bills that fluctuate on autopay. You are less likely to wind up with an overdraft situation that way. For instance, if your energy bill is usually $100 a month but goes up to double that during the winter or summer, that might throw off your personal finances if you autopay your bills.
When should I set up autopay?
It can be wise to set up autopay when you are familiar with your finances and cash flow and feel confident that automating your payments won’t lead to an overdraft situation. You might also consider signing up if there is a bonus or perk for you, such as a discount or a lower interest rate.
Why do people not use autopay?
Some people do not feel comfortable with autopay; they would rather be in control of making payments individually and maintaining that control over their finances. Also, some people may have bills that fluctuate considerably and they may therefore prefer to pay manually to avoid overdrafting.
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In this day and age when you buy something, it always comes with an extended warranty.
It usually costs extra but the intent is to give you peace of mind for the lifetime of that product.
Unfortunately, many of these extended warranties only last maybe another three, four, or five years.
What if you could buy a product that offered a 30-year guarantee?
Would that give you the peace of mind that you need?
When buying life insurance, if purchasing a 30-year term life insurance policy, it will do just that.
So many things can happen in our lives; new kids, new jobs, new homes, more stress. A lot of life situations can lead to drastic changes in our health.
Where you may be a fit triathlete today, who knows what can happen tomorrow?
Why not have the peace of mind of locking in a 30-year term life insurance policy when you’re at your best health?
I’m amazed when I talk to young individuals that only want to purchase a 10-year term life insurance policy, or sometimes a 20-year term life insurance policy. The most common reason I hear is they want to save money.
Well they might be saving money in the short term, they don’t realize what could happen in the long term. I’ve seen several instances of individuals that were what my friend would call “superfit” and easily qualify for a preferred plus rating, but circumstances beyond their control lead to a deterioration of health.
So if they want to renew the policy, when their other term policies are coming to an end, they’re now going to have to pay a much higher rate if they can get any insurance coverage at all. It seems to me the most common item overlooked when buying a 30-year term policy is that if your needs change where you don’t need it anymore, then you just stop paying it. A 30-year term policy does not mean that you are locked in for a 30-year contract. It just means that you have the right to be insured for that time period. So if your needs ever change, it’s as simple as not making the payment anymore.
30 year life insurance with big savings.
Before buying a 30-year term policy, it’s important to compare all the different options and all the different insurance carriers at once. If you’re going to buy a contract for that period of time, you want to make sure that you’re buying it with the highest rated carrier possible. One measure that you can use is A.M. Best’s rating scale to see how the insurance company compares to its peers. When comparing rates, if you can save $10 a month by purchasing an insurance carrier with an A- A.M. Best rating versus an A.M. Best A+ rating, it would behoove you to pay the extra money to go with the more highly rated carrier.
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What if you have pre-existing conditions?
Another common fear that individuals have in purchasing a 30-year term life insurance policy is that if they have health conditions, will that prevent them from not getting approved? Absolutely not. Just because you have high blood pressure, high cholesterol, diabetes, or any other high-risk condition, does not mean that you’ll get denied when applying for a 30-year term life insurance policy. What that does mean is that you may pay a higher rate.
When applying for the life insurance policy, make sure to be transparent with the underwriters in sharing everything that you can about your condition.
The more you share in the beginning will help your case when trying to get the approved coverage.
Can you get a 30-year term policy without a medical exam?
You sure can. This is sometimes called simplified issue or guaranteed acceptance life insurance policies. While you can qualify for these, it will most often be much cheaper to go the traditional underwriting route, but if you want to avoid the six- to eight-week process and you’ve never been denied for insurance, then getting a simplified issued policy will be as simple as answering a few questions and getting your policy delivered in approximately three business days.
There are a view advantages and disadvantages of these plans that you should be aware of before you purchase a plan without a medical exam. The first advantage is that anyone can purchase theses insurance policies, regardless of health or any preexisting conditions. Regardless of your health, you shouldn’t have to go without life insurance protection.
The next advantage is that you can get insurance protection much quicker than you would with a traditional insurance plan that requires you to take a medical exam before getting coverage. Because you don’t have to wait to take the medical exam or wait for the results, you can get insurance protection in a matter of days versus up to a month with a traditional insurance plan.
Just like every other type of plan, there are pitfalls that come along with these plans. One of them is the cost. A no exam plan is going to cost much more than a plan that requires the medical exam before you get approved for coverage. Because the insurance company doesn’t get as much information about your health, they are taking more of a risk by insuring you. They are going to offset that risk by charging you more every month. If you want to get the most affordable life insurance plan, you’ll want to choose a plan that requires a medical exam.
Another disadvantage to these plans is that there is a limit on how much coverage you can get. With a 30 year no medical exam, you’re going to be drastically limited on the amount of coverage you can get with your life insurance plan.
Quotes on a 30-year term life insurance.
A 30-year term life insurance policy does not cost as much as you think it would. Many people just assume that since it’s such a long term, that the costs are astronomical. It’s far from it.
Here are some examples of how much a 30-year term policy costs for both males and females.
$250,000 30 Term Policy Rates
$500,000 30 Term Policy Rates
$1,000,000 30 Term Policy Rates
SEX
AGE
30YR TERM POLICY
COMPANY 1
COMPANY 2
COMPANY 3
MALE
25
$1,000,000 FACE AMOUNT
BANNER LIFE $645
NORTH AMERICAN CO. $645
TRANSAMERICA $650
MALE
35
$1,000,000 FACE AMOUNT
BANNER LIFE $795
GENWORTH FINANCIAL $804
VOYA (FORMERLY ING) $808
MALE
45
$1,000,000 FACE AMOUNT
BANNER LIFE $1,885
GENWORTH FINANCIAL $1891
AMERICAN GENERAL $1,894
FEMALE
25
$1,000,000 FACE AMOUNT
AMERICAN GENERAL $514
NORTH AMERICAN CO. $515
SBLI $520
FEMALE
35
$1,000,000 FACE AMOUNT
SBLI $640
AMERICAN GENERAL $694
GENWORTH FINANCIAL $695
FEMALE
45
$1,000,000 FACE AMOUNT
SBLI $1,450
BANNER LIFE $1,455
AMERICAN GENERAL $1,456
As you can see, one of the biggest determining factors in calculating your monthly premiums is how much coverage you’re going to pay. It’s vital that you get enough life insurance coverage for your family.
I graduated from college with a bachelor’s degree in English in business management, so I knew a great deal about metaphors, marketing, and even Russian literature. What I didn’t know was how to manage my money.
Although I’ve learned a lot about personal finance since then, I’ve also realized that many graduates enter the workforce feeling just as lost as I did. “Should I get a credit card?” “How much should I spend on groceries?” “Do I really need to start saving for retirement?”
Providing for your own financial needs and responsibilities can be overwhelming at first, but there are plenty of practices you can implement now to manage your money well! Here are seven healthy financial tips I wish someone had shared with me after I graduated from college.
What’s Ahead:
Consider a Variety of Jobs
After college, my dream was to become a writer. Plan B was “pastry chef” (I watched one-too-many baking shows in high school). And yet, despite my aspirations, my first job was as an admissions counselor—at my alma mater.
For many careers, it isn’t easy to find your dream job immediately after graduating. You might need to start with an internship. Or, perhaps you’ll find an entry-level position in an industry or company where you could rise to the job you want.
Fortunately, there are multiple ways to make a living and pursue your dream job. My position in admissions may not have been a direct step towards a writing profession, but the experience I gained in sales ultimately prepared me for my job today as a writer in marketing. I also gained some “real-world,” office experience, and a clearer understanding of how a business operates—which could help me manage my own bakery in the future!
All this said, don’t be so focused on finding the perfect job that you miss a unique opportunity to advance your career.
Learn to Budget
Early on in our relationship, my husband, Steve, and I were giddy to discover our personalities were quite alike. But, for all our similarities, we did not share the same approach to personal finance. He’s the saver, and I, sadly, am the spender.
Steve and I recognized early, however, that consistent budgeting would protect both our money and our marriage. Every month, we sit down with a cup of tea or glass of wine and review our expenses. It has taken years to nail down a budget and routine that works well for us, but I can say with certainty that the habit has spared us many arguments.
Whether you’re single or in a relationship, budgeting is essential for maintaining financial health. However, thanks to tools like YNAB, you don’t have to be an expert at money management to do it well. YNAB allows you to set up categories to plan and track your spending. It’s unique take allows you to “live on last month’s income” so you can break the paycheck-to-paycheck cycle. You’ll always know exactly how much money you have to spend.
Check out our full YNAB review here.
Start paying student loans NOW
Many college graduates receive a six-month grace period, during which they don’t have to start paying back loans—but that doesn’t mean they shouldn’t.
Experts suggest you start paying back loans immediately, if you’re able—even before graduation! By paying that debt down sooner, you can decrease your principal and potentially save thousands of dollars in interest over time.
You may also be able to save money by refinancing your loan(s) to a lower interest rate. Try researching options through Credible, an online marketplace that lets you compare rates from multiple lenders. Each quote is based on your unique credit profile, and rates are updated in real-time so you can get an accurate assessment of your offers.
Credible Credit Disclosure – Requesting prequalified rates on Credible is free and doesn’t affect your credit score. However, applying for or closing a loan will involve a hard credit pull that impacts your credit score and closing a loan will result in costs to you.
Build an emergency fund
It’s easy to see the value of an emergency fund, and yet more than half of Americans could not afford a $400 surprise expense.
The trouble is many people don’t understand the significance of an emergency fund until they need it. Only a few months after I married Steve, I got a ticket for running a red light. I was mortified and ashamed and embarrassed—until Steve reminded me that we had an emergency fund. In a moment, all my stress slipped away.
To help you build your own emergency fund, consider a resource like the Wealthfront Cash Account. You can earn 4.55%APY on all of your cash—which is five times the interest from your average savings account! Wealthfront can even get your paycheck to you up to two days early, when you set up a direct deposit, so you can reap the rewards of that rate ASAP! As you start to save towards specific goals, organize them into buckets to track your progress.
Wealthfront is also a great option for individuals who want an easy segue from saving to investing. Many financial advisors won’t even talk with you, let alone manage your investments unless you have tens of thousands of dollars to work with. Wealthfront, on the other hand, lets you start investing with as little as $500 and will diversify your portfolio to match your unique risk tolerance. You can also integrate your Cash Account with your investment portfolio and have any leftover income automatically invested to maximize your time in the market.
Live on less
After receiving your first paycheck, you might assume you need that full amount each month to live comfortably—but every person is different, as is every salary.
My brother graduated from college this year with a degree in computational engineering (nerd alert!). His first job pays nearly three times what my first job paid me! So, before he splurged on a new TV, car, computer, etc., I gave him one small piece of advice: learn to live on less.
Instead of determining how much you can spend based on your salary, start with small budget categories and alter them when necessary. Steve and I began budgeting early in our marriage and thought we would need $200 each month for groceries, based on how much we’d spent on our own. As the months progressed, we recognized $200 wouldn’t meet our needs (and also that I love cooking), so, we added a little more every month until we reached a total that worked for us.
Those first few years out of college will set the stage for your financial health (or lack of) decades into the future, so start by learning to live on less. It will be much easier to increase your budget categories later, rather than limiting yourself in the future.
Begin saving for retirement
If you’re anything like I was at 22 years old, retirement might feel like a topic that’s easy to ignore. However, saving for retirement early can mean thousands of additional dollars for you and your family later in life.
Fortunately, there are companies that understand young people like us. For example, blooom is a retirement management company that provides a free analysis of your IRA and/or employer-sponsored retirement plan—whether you decide to sign up and pay for their services or not. After answering a few questions on their site, blooom offers professional advice on how you can adjust the allocation of your funds to avoid hidden fees and save more for the future.
Another reason blooom is especially useful for 20-somethings is that, unlike many investment management companies, they don’t require a minimum investment to manage your retirement plan. In other words, if you’ve just started your first job out of college and have barely contributed to your retirement plan, blooom is still ready to help. They can also manage your funds no matter where they’re located, so you won’t have to move your employer-sponsored plan to utilize their services.
Get a credit card
Let me be clear: what I am NOT suggesting is that you drive down to your favorite department store and sign up for their fancy rewards card that offers 10% off on your first purchase.
While a credit card can certainly have its perks, the better benefit for college graduates is its effect on your credit score—if you use it well. A good credit score can impact your ability to get a home mortgage loan or qualify for auto insurance. It may even influence a potential employer’s decision to hire you!
Start with just one card, at least for the first year. Search for options with low interest rates that require low spending levels to receive rewards. Finally, once you begin using the card, set up automatic payments with your bank and continue to monitor your transactions and payments often.
Remember that merely possessing a credit card does not improve your credit score; it’s how you use it. Credit cards can have a negative or positive impact on your life, so make sure you choose and use them wisely.
Summary
Taking steps toward healthy money management as a college graduate doesn’t have to be complicated—you just have to start off on the right foot.
As you search for jobs, consider a wide variety of options. Building a career takes time, and your dream job may require some entry-level positions or even an internship for you to get started. Once you’re settled into the workforce and begin receiving paychecks, develop a budget immediately! Be sure to include important goals like paying off your student loan(s) and saving for retirement. Finally, create habits like living on less and saving for unexpected expenses to help you better prepare for situations, expected or not, in your future.
Procrastination may have served you well in college, but it won’t help you achieve financial health. Act intentionally. Learning to manage your money well now will help you provide for your family, pursue new experiences, and prepare for whatever lies ahead.
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MoneyUnder30 receives cash compensation from Wealthfront Advisers LLC (“Wealthfront Advisers”) for each new client that applies for a Wealthfront Automated Investing Account through our links. This creates an incentive that results in a material conflict of interest. MoneyUnder30 is not a Wealthfront Advisers client, and this is a paid endorsement. More information is available via our links to Wealthfront Advisers.