She cited the persistent mismatch between housing supply and demand as a key driver, noting “the surging cost of homeownership, further fueled by rising insurance and tax expenses, is holding potential home sales back, as is evident in the slow rise in sales compared with last year.” Detached properties saw stronger price appreciation of 5.7% … [Read more…]
NEXAMortgage has sued its former president, Mat Grella, for allegedly causing the failure of a hangar-office property purchase, acting to defame the firm and his partner Mike Kortas, illegally changing corporate documents, and keeping two company cars after his termination. In response, Grella said that the allegations are a “manipulation of the truth.”
The lawsuit was filed April 29 in the Arizona Superior Court of Maricopa County. It accuses Grella and his wife, Sheridan Murray-Grella, of breaching contractual and fiduciary duties, tortious interference with business expectancies, actual fraud and defamation by false light, among other claims.
NEXA was founded in Arizona in 2017 by Kortas and Grella after they left Equity Prime Mortgage. The firm became the largest U.S. mortgage brokerage firm, with 2,477 licensed loan officers and 236 active branches as of Monday, per the Nationwide Multistate Licensing System (NMLS).
Grella was terminated from NEXA in March amid negotiations of a buyout and a lawsuit accusing Kortas of making aircraft-related purchases with company money without his consent. Kortas denies his former partner’s allegations.
The lawsuit filed by NEXA against Grella states that in March 2024, NEXA entered into a letter of intent to purchase a five-acre airplane hangar leasehold in Mesa, Arizona, for $23.95 million. The leasehold included 75,000 square feet of existing hangar and office space.
According to NEXA, the purchase would allow the company to have a “physical home base“ — which it’s currently lacking — where it could host events and save $500,000 a year on other venues. It would also consolidate company aircraft into one space and potentially increase income through renting aircraft space to others.
NEXA leases aircraft hangar space, and it owns and operates a charter company, which generates revenue from charter flights and offers tax advantages for aircraft ownership, per the lawsuit. The company said that Grella was fully informed and had authorized these moves.
According to the lawsuit, Grella sent messages to the hangar’s broker, seller and title company that were “disparaging, knowingly untrue,“ stating that NEXA was not authorized to purchase the property. This caused the transaction to fail and harmed the company, NEXA alleges.
Grella told HousingWire that the purchase “doesn’t fit the needs of NEXA“ as the brokerage firm focuses on mortgages. Grella added that NEXA “started growing exponentially as a remote company,“ meaning it does not need an office space. Also, he had not acknowledged or consented to the transaction that he believed would “almost entirely deplete the firm’s cash account.“
In a message to HousingWire, James Brody, a senior partner at Garris Horn LLP and attorney for NEXA, said that it’s important to ask “whether there could have been concern that monies might get tied up that would potentially affect monies available for the buyout, which in my opinion was the true catalyst for the disputes at issue.“
Still, “at the end of the day, we are hopeful that the parties can find a way to amicably resolve these disputes,“ Brody said.
Other allegations
The NEXA complaint also discusses the brokerage firm’s ownership structure. NEXA’s lawsuit states that, per the company’s operating agreement signed in 2019, Kortas is its sole manager, with a 50.5% ownership stake, followed by Grella’s 49.5% stake.
But on March 22, Grella reportedly submitted documents to the Arizona Corporation Commission stating that he was NEXA’s “new manager,“ including only his signature. NEXA, which attached the document to the lawsuit, said Grella “attempted to usurp the manager’s powers.“
Grella, in his complaint against Kortas, said his partner converted NEXA funds and made unauthorized credit card purchases, which have reduced Kortas’ ownership percentage to below that of Grella’s, such that Grella is “now the majority owner of Nexa.“ In addition, the complaint states that he added his name as co-manager and did not change Kortas’ manager status from the documents.
Brody said a change of manager or the addition of a co-manager would have required a vote of members, and since there was no such vote, “it’s difficult to understand how any such filing by Grella with the Arizona Corp. Commission was not done improperly.“
The company’s lawsuit states that, “On account of Grella’s actions in causing harm to the company and his impending buyout, he was terminated from the employment of NEXA.“
According to the NEXA complaint, Grella required documents after his termination that only employees could access. He also “contacted different states’ licensing departments with claims that NEXA is operating without a qualified individual for mortgage license,“ which the company said is untrue.
Grella said he contacted NEXA employees and state regulatory agencies to update his status as a former employee, since NEXA had not updated it by March 23. He has “never harmed or sought to harm NEXA, and hopes to see the company run effectively in the near future, for the sake of all of NEXA’s stakeholders.“
Brody said NEXA did not terminate the relationships in NMLS regarding Grella’s ownership, which would have been improper, as “many states require the registration of owners in the NMLS, even if they are not employees.“
NEXA is also accusing Grella of selling a Cadillac Escalade in 2022 without authorization. The company bought the car in 2019 for $76,500 as an exclusive benefit to the owners while they were company employees. But “Grella kept or otherwise diverted the funds received for the trade,“ the lawsuit states. The company also seeks the return of a 2019 Nissan GT-R bought for company purposes for $104,490.50.
Grella said the company’s vehicles were kept at the partners’ residences, with Kortas having two other company cars. Early in the buyout negotiations, however, the partners agreed to keep the vehicles in their possession. “Kortas was to keep the Maserati and the Range Rover, and I, the Escalade and the Nissan GTR. I remain an owner of approximately half of NEXA and its assets,“ Grella said.
According to Brody, the company understands that the vehicles were intended for use during the partners’ tenures as NEXA employees, which was the case for Grella early in the buyout negotiations.
In the lawsuit, NEXA asks, among other things, for an injunction against Grella, ordering that he cease any further public statements about NEXA or Kortas.
Purchasing U.S. Treasury securities are often considered to be a dependable and less-risky way to increase income and grow wealth over time. Building a Treasury ladder can be a smart move for investors looking for a way to maximize profits while controlling interest rate risk. Investing in a Treasury ladder allows investors to spread out the risk and return associated with holding fixed-income securities by buying a sequence of securities with varying maturities.
In this article we delve into the complexities of U.S. Treasury ladders, going over their advantages, construction techniques, and things to think about for investors trying to assemble a reliable and well-rounded portfolio.
What Is a Treasury Bill Ladder?
An investing strategy known as a “Treasury Bill ladder” involves buying a sequence of Treasury Bills with varying maturities. The United States government issues Treasury Bills, sometimes known as T-bills, which are short-term debt securities with maturities varying from a few days to a year. Investors can spread out the maturity dates of their investments by building a Treasury Bill ladder, which preserves liquidity and generates a consistent income stream.
With this approach, investors can benefit from fluctuating interest rates and make sure that a part of their portfolio is always maturing, giving them flexibility in terms of withdrawal or reinvestment. Treasury Bills are also regarded as some of the least-risky investment options.
What Is a Treasury Bond Ladder?
A Treasury Bond ladder is similar to a Treasury Bill ladder in that it emphasizes longer-term investing and both involve staggering maturities. The United States government issues Treasury Bonds, which are long-term debt instruments with maturities ranging from 10 to 30 years.
A Treasury Bond ladder works similarly to a Treasury Bill ladder in that it distributes the risk and returns of investing in fixed-income securities by buying bonds with different maturities. Still, there are some significant distinctions between the two approaches. Because they are investments with a longer maturity period than Treasury Bills, Treasury Bonds usually provide greater yields.
Treasury Bond ladders are often favored by investors seeking higher income potential and are willing to accept the associated interest rate risk. Changes in interest rates may have an effect on the market value of Treasury Bonds. Notwithstanding these differences, Treasury Bill and Treasury Bond ladders are equally useful instruments for addressing the varied inclinations and goals of investors while controlling interest rate risk, producing income, and preserving portfolio diversification.
How Can You Build a Treasury Ladder?
Several important factors must be taken into account while building a Treasury ladder in order to minimize risk and maximize returns.
The first stage is to decide on the ladder’s ideal configuration, which includes the number of rungs and the assets’ staggered maturities. The term “rungs” refers to the individual assets that make up the ladder; based on the investor’s investment horizon and preferences, these securities may include Treasury Bonds, Treasury Notes, or Treasury Bills. By ensuring that a part of the portfolio matures on a regular basis, staggered maturities offer liquidity and flexibility for withdrawal or reinvestment.
To maximize the performance of a Treasury ladder, investors should also take the yield curve and current interest rates into account. Longer-dated securities often provide greater yields in order to offset the duration and interest rate risk. Nonetheless, investors may decide to add assets with shorter maturities to increase liquidity or to capitalize on future changes in interest rates.
When choosing the Treasury securities to include in the ladder, investors should consider their time horizon, investing goals, and risk tolerance. While Treasury Notes and Bonds offer higher returns and are appropriate for longer-term investment objectives, Treasury Bills are best suited for investors with short-term liquidity needs or a conservative risk profile.
After the ladder is put in place, investors should keep a close eye on it, rebalance the portfolio as needed to preserve the intended asset allocation, and modify the ladder’s maturity structure in response to shifting market conditions.
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What’s an Example of a T-Bill Ladder?
Buying T-Bills with varying maturities over a predetermined time frame, like a year, is an example of a T-Bill ladder.
An investor could, for example, build a three-rung T-Bill ladder, where each rung represents a T-Bill with a different maturity date. T-Bills that mature in three months, six months, and nine months, respectively, might be found on the first rung, second rung, and third rung.
By reinvesting the proceeds from each maturing T-Bill into new ones with longer maturities, the investor can preserve the ladder’s structure and create a steady flow of income. By delaying the maturity dates of their investments, this technique helps investors spread out their exposure to reinvestment risk while capturing changing interest rates over time.
An investor would receive interest income of $50 from the first T-Bill after three months, $100 from the second T-Bill after six months, and $150 from the third T-Bill after nine months, for instance, if they initially purchase $10,000 worth of T-Bills with staggered maturities of three, six, and nine months, and each T-Bill offers an annualized yield of 2%.
In order to preserve the ladder’s structure and gradually produce a consistent income stream, the investor may reinvest the principal and interest into further T-Bills upon maturity.
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How Do You Buy Treasury Bonds and Bills?
Purchasing Treasury Bills and Bonds is a simple process that may be carried out via a number of methods.
One popular way is via a brokerage account, where investors can buy Treasury securities through a broker-dealer. Or investors can buy directly from the U.S. Department of the Treasury. Treasury securities are easily accessible through a number of online brokerage platforms, enabling investors to buy and sell them with a few clicks.
Banks and other financial organizations that take part in Treasury auctions are another source for investors to purchase Treasury securities. Investors can place bids for the required quantity and yield at regular auctions held by the U.S. Department of the Treasury for Treasury securities, such as Treasury Bills, notes, and bonds.
Additionally, investors may purchase Treasury securities indirectly by investing in a diverse portfolio of Treasury securities through exchange-traded funds (ETFs) or mutual funds with a Treasury concentration. Investors can easily obtain exposure to Treasury securities through these products without having to buy individual bonds or bills.
Is it Worth it to Build a Treasury Ladder?
Creating a Treasury ladder may have certain advantages for investors:
• Possible protection against inflation: Treasury Inflation-Protected Securities (TIPS) within the ladder may help safeguard against the erosive effects of inflation by adjusting the principal value in line with changes in the Consumer Price Index (CPI).
• Revenue and cash flow: Treasury securities offer a steady income stream in the form of interest payments, which can be especially attractive to retirees or those looking for consistent cash flow. In order to provide liquidity for reinvestment or other financial needs, staggered maturities create a steady stream of maturing securities.
• Diversification: Treasury ladders distribute assets across several Treasury security types and maturities, providing diversification and lowering total portfolio risk.
• Security and less risk: Because they pay principal and interest on time by the U.S. government, U.S. Treasury securities are among the least risky investments available.
Are There Risks Associated with Treasury Bill and Bond Ladders?
Bond and Treasury bill ladders are typically regarded as low-risk investment techniques, but investors should be aware of certain potential risks.
Interest rate risk is one of the main risks connected to Treasury securities. Treasury securities’ market value can change inversely with changes in interest rates. This implies that the market value of current Treasury securities may decrease if interest rates rise, possibly resulting in a loss if the investor sells before maturity. On the other hand, investors who retain Treasury securities until maturity may benefit if interest rates decline and the market value of the securities rises.
Reinvestment risk is another thing to think about. Investors must reinvest the revenues from maturing assets into new securities because Treasury ladders feature staggered maturities. Investors may end up investing at lower rates if interest rates have dropped since the first investment, which might affect the ladder’s overall yield. On the other hand, investors might be able to reinvest at higher rates if interest rates have increased, which would raise the ladder’s total yield.
Even though Treasury securities are among the least risky investments available since they are backed by the full faith and credit of the United States government, there is always a small but constant risk of default. The purchase power of the principal and interest payments of Treasury inflation-protected securities (TIPS) can be impacted by changes in inflation, so investors should be aware that TIPS involve an inflation risk.
Can You Set Up a Ladder Using ETFs?
ETFs that specialize in Treasury securities allow investors to indirectly build up a Treasury ladder. Treasury-focused ETFs offer investors exposure to a variety of Treasury Bills, notes, and bonds by holding a diversified portfolio of Treasury securities with different maturities.
Without having to buy individual assets, investors can obtain a comparable result to a Treasury ladder by investing in these ETFs.
When building a Treasury ladder, investors can benefit from a number of ETF features. They offer diversification over a wide array of Treasury securities, helping reduce credit risk as well as interest rate risk. Also, a wider range of investors can invest in ETFs since they usually have lower investment minimums than buying individual Treasury securities. ETFs also trade on stock exchanges, giving investors flexibility and liquidity to purchase and sell shares at any time during the trading day.
That’s not to say that ETFs don’t, generally, have some downsides, though. ETFs may experience tracking errors, for instance, and have associated trading costs. There may be other types of risk, too – just some things to keep in mind.
Treasury-focused ETFs frequently provide extra characteristics, such as improved yield strategies or inflation protection, to meet the unique requirements and preferences of investors. To make sure that ETFs match their investment goals and risk tolerance, investors should carefully consider the expense ratios and liquidity of the funds before making an investment.
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The Takeaway
Building a Treasury ladder may be a tool for investors looking for a way to maximize profits while controlling interest rate risk. And, as noted, investing in a Treasury ladder allows investors to spread out the risk and return associated with holding fixed-income securities.
Overall, the combination of potential inflation protection, minimized interest-rate risk, reliable income, diversification benefits, and lower relative risk make building a Treasury ladder a compelling investment strategy for many investors, particularly those with a conservative risk tolerance or seeking stable returns over time.
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FAQ
Is laddering Treasury bills a good idea?
A T-Bill ladder distributes investments over a range of maturity dates, which helps investors diversify their holdings. It can aid in reducing interest rate risk.
Are Treasury ladders taxable?
Yes, you pay federal taxes on Treasury Bills at your marginal income tax rate, but state and local income taxes do not apply to them.
Is it better to buy a CD or a Treasury bill?
Depending on the length of term you desire, you can choose between Treasuries and a CD. Treasuries are a preferable option because rates are close enough for both one- to six-month and ten-year maturities. Right now, CDs are paying more for durations of one to five years, and the difference is significant enough to give them the advantage.
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Have you ever wondered, “Should I move to Reno, NV?” Known as “The Biggest Little City in the World,” Reno is famous for its vibrant nightlife, world-class entertainment, and thriving arts and culture scene. Residents enjoy easy access to Lake Tahoe, as well as a wide range of outdoor activities like hiking, skiing and water sports. From the neon lights of its famous casinos to the serene parks and rivers that crisscross the city, Reno offers a unique mix of excitement and tranquility that’s hard to find anywhere else. In this article, we’ll breakdown the pros and cons of living in Reno to help you decide if it’s the right place for you. Let’s go.
Reno at a Glance
Walk Score: 40 | Bike Score: 52 | Transit Score: 24
Median Sale Price: $550,000 | Average Rent for 1-Bedroom Apartment: $1,400
Reno neighborhoods | Houses for rent in Reno | Apartments for rent in Reno | Homes for sale in Reno
Pro: Excellent arts and culture scene
Reno is often overshadowed by its glitzy neighbor Las Vegas. However, this city boasts a surprisingly vibrant arts and culture scene of its own. The annual Burning Man festival, while held in the Black Rock Desert, leaves a lasting impact on Reno’s local culture, with numerous art installations and events throughout the year. The city is also home to the Nevada Museum of Art. This museum showcases a wide range of exhibitions and is the only accredited art museum in the state. Additionally, the Midtown District is bursting with murals, galleries, and boutiques, making Reno a hidden gem for art lovers.
Con: Air quality concerns
Reno faces significant air quality issues, particularly during the summer months. This is when wildfires in the region can cause smoke and particulate matter to blanket the city. This not only obscures the beautiful views of the surrounding Sierra Nevada mountains, but can also pose health risks to some residents. The city’s location in a valley further exacerbates these issues. Pollutants can become trapped, leading to days or even weeks of poor air quality.
Pro: Proximity to outdoor recreation
One of Reno’s most appealing aspects is its proximity to a plethora of outdoor recreational activities. Located just a short drive from Lake Tahoe, residents and visitors can enjoy world-class skiing, snowboarding, hiking, and water sports within a 45-minute drive from the city. The Truckee River, which runs through the heart of Reno, offers kayaking, fishing, and even a whitewater park for enthusiasts. This easy access to diverse landscapes makes Reno an ideal location for outdoor adventurers.
Con: Limited public transportation options
Reno’s public transportation system struggles because of its limited routes and infrequent schedules, particularly in the evenings and on weekends. With a Transit Score of 24, it can be difficult for those without personal vehicles to navigate the city efficiently. The reliance on cars contributes to traffic congestion and environmental concerns, highlighting a need for improved and more sustainable transportation options.
Pro: Growing culinary scene
Reno’s culinary scene has been experiencing a renaissance. Recently, there’s been an influx of new restaurants, bars, and cafes opening their doors to the public. From food trucks offering gourmet options to high-end dining experiences featuring locally sourced ingredients, Reno has begun to establish itself as a foodie destination. The city also hosts several food festivals throughout the year. These events celebrate everything from craft beer to international cuisine, further cementing the city’s status as a culinary hotspot.
Con: Housing market pressures
With Reno’s rising popularity and influx of new residents, the housing market has become increasingly competitive and expensive. Home sale prices are about $100,000 more than the national average and rents have risen sharply. This lack of affordability can make it challenging for some homebuyers to find affordable housing options within the city, contributing to a growing concern over the cost of living in Reno.
Pro: Educational opportunities
Reno is home to a major public research university, the University of Nevada, Reno (UNR). The university offers a wide range of undergraduate, graduate, and doctoral programs. UNR is particularly renowned for its research and education in environmental science, engineering, and journalism. The presence of the university contributes to the city’s community and provides numerous educational opportunities for residents looking to advance their careers or pursue higher education.
Con: Seasonal weather extremes
Reno experiences a high desert climate, which means residents must prepare for hot summers and cold winters. The temperature can soar above 100°F during the summer months. Making outdoor activities uncomfortable or even dangerous without proper precautions. Conversely, winters can be harsh. Temperatures often drop well below freezing and there’s occasional heavy snowfall, particularly in areas closer to the Sierra Nevada mountains. These seasonal extremes can be a drawback for those not accustomed to such variability in weather.
The sense of community in Reno is strong, with local soften coming together to support local businesses, arts, and charitable causes. The city hosts numerous community events throughout the year, including farmers markets, art walks, and cultural festivals, which foster a sense of belonging and civic pride. This community spirit is a testament to Reno’s resilience and the warm, welcoming nature of its people, making it a great place to call home.
Con: Water scarcity
Reno, situated in the high desert, faces challenges related to water scarcity. The region’s limited water resources are under pressure from population growth and prolonged drought conditions, which can affect water quality and availability. Efforts to manage and conserve water are critical, but the ongoing concerns about sustainability and the impact of climate change make water scarcity a significant issue for Reno’s future.
Pro: Tax benefits
One of the financial advantages of living in Reno is Nevada’s favorable tax structure. The state does not impose an income tax, which can result in significant savings for residents, especially when compared to neighboring states with higher tax rates. Additionally, Nevada’s overall tax burden is relatively low, including property taxes, making Reno an attractive option for both individuals and businesses looking for a tax-friendly environment.
Jenna is a Midwest native who enjoys writing about home improvement projects and local insights. When she’s not working, you can find her cooking, crocheting, or backpacking with her fiancé.
Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. In this episode:
Explore car buying in 2024, from Carvana’s process to the electric vehicle surge and how to maximize your car’s sale value.
Budgets Beyond the Numbers: How do you manage the emotional aspects of budgeting? What’s the car buying market like in 2024? Hosts Sean Pyles and Elizabeth Ayoola discuss personal budgeting and the future of car buying to help you understand how to navigate financial decisions with confidence. They begin with a discussion of budgeting “beyond the numbers,” with tips and tricks on categorizing expenses into their emotional impacts to make budgeting feel more personal.
Today’s Money Question: Is Carvana a good service? Should you buy an electric vehicle if you’re in the market for a new car? NerdWallet autos writer Shannon Bradley joins hosts Sean Pyles and Sara Rathner to delve deeper into the future of car purchases and the electric vehicle revolution. They explore the evolution of electric vehicles, the current state of the car market for both buyers and sellers, and strategies to get the best deal when selling your vehicle. The conversation aims to provide insights on choosing the right time to buy an electric car, understanding the market dynamics, and ensuring a smooth car selling experience.
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Episode transcript
This transcript was generated from podcast audio by an AI tool.
Sean Pyles:
What’s in a budget? If you look at the 50/30/20 budget, you have your needs, wants along with extra debt payments and savings. But we all know a budget can be much more than that. We get into it this episode. Welcome to NerdWallet’s Smart Money Podcast, where we help you make smarter financial decisions, one money question at a time. I’m Sean Pyles.
Elizabeth Ayoola:
And I’m Elizabeth Ayoola.
Sean Pyles:
This episode we answer a couple listeners’ questions about car buying and selling, including what to know about the electric car market right now. But first, we’re exploring what’s really in a budget beyond the numbers and Elizabeth, this is something that you are especially interested in, right?
Elizabeth Ayoola:
I am, Sean, because budgeting gets a bad rep, but it can be fun too, especially when you have something you really want and are working towards, but it can be equally stressful. I’m not going to deny that.
Sean Pyles:
Totally. When people hear the word budget, they might just think about numbers in a spreadsheet or about restricting themselves from purchasing something that they want. Neither is really fun. And don’t get us wrong, we are still big proponents of having a budget and we think the 50/30/20 budget, where you have half of your income going towards needs, 30% going towards wants and 20% going towards extra debt, payments and savings, can be a really accessible and flexible framework for most people, but it doesn’t get to the more personal parts of our finances. So Elizabeth, you like getting into those deeper parts of a budget and you do this by breaking it into three general categories: something stressful, something exciting, and something confusing. Can you talk about why you are thinking about your budget in this way and what’s the purpose of each category?
Elizabeth Ayoola:
So I feel like by doing this, it gives our budget some personality, it creates some interesting conversation around our budgets. I think we all know that budgets can be monotonous, so breaking it up like this helps me stay engaged with my budget and also have something to feel excited about. You know what I’m saying, Sean? So the confusing one especially is a chance for me to challenge myself to untangle areas of my budget where I’m winging it or I’m just disorganized and usually I’m winging it or disorganized because I’m overwhelmed and don’t understand something.
Sean Pyles:
This reminds me of a game that I sometimes play with my friends called Rose, Thorn, and Bud. The rose is something good that happened to you, the thorn is as you might expect, something that’s a little bit thornier or unpleasant and the bud is something that is in progress or something that you are excited about. This is kind of like that, but for your finances, it’s a way to categorize items of your budget under broader themes, which can help you process them in that more personal and emotional way. Is that how you think about it too?
Elizabeth Ayoola:
Exactly. You just put it in a fancy way. Thank you, Sean.
Sean Pyles:
Thank you.
Elizabeth Ayoola:
And I also have a new game that I’m playing with my friends because I’m stealing your idea.
Sean Pyles:
Happy to hear it.
Elizabeth Ayoola:
As of recent, I’ve been asking them when I go on girlfriend dates, what’s one thing they hope happens this year? But I’m definitely going to swap it out for your idea.
Sean Pyles:
Oh, I love that. Well, to help our listeners understand this way of thinking about budgeting, Elizabeth, I would love to hear what you are finding stressful, exciting, and confusing in your budget right now?
Elizabeth Ayoola:
As a recovering over sharer, I am definitely going to share that. So let’s start with stressful. Start with the worst, a moving budget. So just please anybody rescue me on a red carpet and make sure you bring a margarita with you because moving is stressing me out. I’m trying to make the move as cost-effective as possible because it’s looking like I’m going to spend a couple of thousand dollars right now and that’s really hurting my feelings.
Sean Pyles:
Yeah, it’s a lot of money.
Elizabeth Ayoola:
So now let’s get into the exciting thing, a love sack. I don’t know if any of our listeners or you, Sean, have heard of love sacks before, but they’re essentially these giant beanbags and in my fantasy of living out the Bohemian dream in my household, I have something like a love sack where I can read books and watch Netflix and do whatever else I want to do on it. So I’ve wanted one for years, but they are pretty pricey. They can start around the $900 range and go up to a thousand dollars, but I am budgeting for that and I’m looking forward to it. The only thing I’m worried about is my son putting his Cheeto hands all over my stuff.
Sean Pyles:
That’s a fair concern. Also, you might want to wait to get that until after you’re moved because that would be just one other thing to haul across state lines.
Elizabeth Ayoola:
Oh fact, I’m definitely not buying that now, so I’m going to buy it once I move. So it’s also giving me more time to save towards it or to budget for it. Another exciting thing I’m also budgeting for is to go to Nigeria. So I am Nigerian for the listeners and I haven’t been since I had my son maybe like four or five years ago, and he’s been asking me to go. That’s kind of what inspired the trip, but it does cost a couple of thousand dollars, so I’m budgeting towards that as well, but excited. And lastly, what is confusing? Balancing business and personal budgets at the same time is very confusing for me right now.
So I’m trying to kind of figure out how much to put towards retirement saving because my expenses just keep changing and I’m also trying to ensure that I don’t commingle, which is when you’re mixing kind of your business finances with your personal because we don’t want the IRS to come knocking. So all these kind of things are just confusing and maybe a little bit stressful as well. Then lastly, my son is going to a private school in August, so my budget is going to change. I’m trying not to be hard on myself because I really like saving big chunks of money and him going to private school might mean I have to save less, but it’s all good.
Sean Pyles:
See, I feel like this really shows how your budget is being enacted to help you meet the short and long-term life goals that we talk about so much on Smart Money and also the various emotions that come with meeting your goals or trying to meet them and the compromises that are just inherent in this conversation you have with yourself and your finances. Also, Elizabeth, last week you said that you were financially boring, and I’m going to say that all of these things are interesting. I’m especially excited about your trip to Nigeria, so let me know how that goes. And also let me know where you land on your savings when your son starts private school.
Elizabeth Ayoola:
Of course, I’m going to share that with you guys, so watch out for that. It has been so long since we’ve been to Nigeria, so we’re looking forward to it. And private school, well all the listeners with kids know that kids swallow up your dollars, but I hope to get a good return on investment on this. So what are yours, Sean? Tell me about your things that are stressful, exciting, confusing.
Sean Pyles:
Okay, well this is where I reveal that I am actually boring. Something stressful is that I’m in the middle of a season of travel right now, which is not boring. It’s very exciting actually. But I went down to San Francisco for a concert a couple of weeks back and I’m about to fly out to the East coast to see some friends in New York and DC and it’s going to be great to see these friends and it was great to see San Francisco again where I lived for many years, but boy, oh boy, traveling is very expensive. It’s much more expensive than working from home day in day out and the adjustment from making my breakfast every morning and having my coffee and a nice little ritual for myself, going from that to spending $20 on the sandwich and a coffee every single morning is a little bit painful and a little bit stressful for my budget, but I’ll make it work.
And then something exciting, this might be a little bit premature because it’s not actually going to happen for nine months, but I’m getting relatively close to paying off my car. I’ve had this car loan since 2020 and I know I took a longer car loan than we typically recommend, but that’s just where my finances were at the time. And I’m kind of lucky to have a pretty affordable car payment. But I am also very excited about having that extra $350 that I pay for my car each month back in my budget, even though I will likely direct most of that into my car savings bucket. Confusing? To be honest, nothing is too confusing for me right now fortunately, but as ever, I am in this continual dialogue with myself and my ADHD impulses that tell me to buy random things that I sincerely do not need. And what’s helped me recently to shake myself from buying things online is just asking what do I expect this thing to do for me? And the answer is usually nothing meaningful. So that helps me break the spell.
Elizabeth Ayoola:
Oh, I love that. And I can relate with you re ADHD. I think in a previous episode I told y’all that I was emotional buying and I’m so glad to update y’all that that has stopped.
Sean Pyles:
Oh, congratulations.
Elizabeth Ayoola:
Thank you. No more random Zara shops every other week. So I’ve been doing pretty good and I can understand what you’re saying, re travel because I have lots of upcoming trips as well and it’s so expensive. But Sean, I’m excited about the car. $350 a month sounds really good to do something else with. And that’s about how much my payment is too. So I’m going to tap into your excitement and hopefully I will be there next year.
Sean Pyles:
Manifesting that for us, yes. Well listener, I hope this exercise has helped you think about your own budget in a new way. Before we get into this episode’s money question segment, let’s check in on our nerdy question of the month, which is what is your weird money habit, behavior, or principle that you live by?
Elizabeth Ayoola:
Here’s one weird money habit that a listener texted us. I just listened to your podcast of a person with dozens of credit cards. I’m one of those individuals too. To be clear though, the only balances I carry are those on temporary 0% promo offers and ones that are paid off monthly. My system is to carry five to six cards in my wallet and rotate them, then return those cards to the bottom of my home credit card stack. Another side gig hobby I do is entering sweepstakes online daily. It’s an easy but exciting activity that can lead to surprise winnings at any given time. My biggest win to date is $24,000 minus taxes, of course. That’s a large chunk of cash.
Sean Pyles:
Oh, that’s an interesting one. Thanks for sharing that. So listener, let us know: what is your weird money habit? Do you only use cash for all of your transactions or are you a hardcore credit card point maximizer?
Elizabeth Ayoola:
Or maybe you have 10 billion bank accounts like Sean. Okay, he just has 10. It’s not 10 billion, it’s just 10.
Sean Pyles:
I didn’t really think that was weird until recently. I was talking with a friend who was considering getting her very first high yield savings account, and she looked at me like I had two heads when I mentioned that I have 10 accounts. So maybe that’s also a good way to think about this. What is something that you do with your finances that seems maybe totally normal to you, but everyone else around you thinks is a little bit off? We want to know.
Elizabeth Ayoola:
Yes, we do. So tell us your weird money habit by texting us or leaving a voicemail on the Nerd hotline at (901) 730-6373. That’s (901) 730-N-E-R-D. Or you can email us a voice memo at [email protected].
Sean Pyles:
And while you’re at it, send us your money questions too. We know how confusing money can be and we want to help you make smarter financial decisions. And a quick reminder that we are running another book giveaway sweepstakes ahead of our Nerdy Book Club episode.
Elizabeth Ayoola:
Our next club guest is Jake Cousineau, author of How to Adult: Personal Finance for the Real World. The book offers tips to young people on how to get started with managing their money.
Sean Pyles:
To enter for a chance to win our book giveaway, send an email to [email protected] with the subject ‘book sweepstakes’ during the sweepstakes period. Entries must be received by 1159 P.M. Pacific Time on May 17th. Include the following information: your first and last name, email address, zip code, and phone number. For more information, please visit our official sweepstakes rules page. All right, now let’s get into this episode’s money question segment with our co-host, Sara Rathner, after a quick break, stay with us.
We’re back and answering your money questions to help you make smarter financial decisions. This episode we’re taking on a couple questions about cars, how to buy and sell them, and how electric vehicles fit in. And we’re joined by NerdWallet autos writer Shannon Bradley to help us navigate the winding roads of car buying in 2024. Shannon, welcome back to Smart Money.
Shannon Bradley:
Thanks for having me back. Let’s get to the first listener’s question. This comes from a voicemail.
Listener Voicemail:
Hello. The reason I’m calling is we were wondering what do you think about the company Carvana? We’re thinking about selling our vehicle to them because if we maybe try to sell it at a car dealership or something, we’re not really thinking that we’re going to get a good deal for it. But we don’t know as far as us selling a vehicle to them, not us purchasing one from them, if they’re reputable with regards to that. We’ve never used them.
Sean Pyles:
So Shannon, can you start by giving us a quick explanation of how Carvana works?
Shannon Bradley:
Yeah. Carvana is an online only car retailer and they sell and buy used cars only. They also take trade-ins. And based upon the listener’s question, I think the most important thing is that you can request an offer for your car right on the Carvana website as long as it’s a 1992 model or newer. And it’s a pretty simple process. They’re going to ask you for your 17 digit vehicle identification number, more commonly known as your VIN, or your license plate number. They’re going to ask you for mileage, the vehicle condition, vehicle options, and then if you have a loan or a lease on the car, they’ll ask you for information about that too.
Sara Rathner:
So other than Carvana’s iconic car vending machines that you see dotting the landscape in different cities, what makes it different from going to a dealership or to CarMax?
Shannon Bradley:
Well, let’s talk about CarMax first. CarMax is an online retailer too, and they’re very similar to Carvana. I think one of the biggest differences when you sell your car between the two is how you get your car to the retailer. With Carvana, you can finalize the entire sale remotely. They will come to your house, they’ll pick up your car, do the inspection there. You do have to be within one of their service areas, and there could be a small fee depending upon how far you are from their hub. CarMax, on the other hand, they offer pickup, but only at limited locations in four states.
So more than likely you’re going to have to take your car to a CarMax store for inspection. And depending upon where you live, that could be quite a distance. So if you compare these types of online retailers to a dealership, I think two of the biggest differences are convenience and being able to negotiate what’s offered for your car. Again, with Carvana, you can potentially complete the entire process of selling your car right from your home, but when you get an offer from Carvana or CarMax, it’s not negotiable. Whereas if you sell to a dealership, you can attempt to negotiate that offer.
Sean Pyles:
So car buying and selling is a notoriously frustrating process. Are there any common complaints about how Carvana handles this process that maybe are distinct from other ways of buying and selling a car?
Shannon Bradley:
On the selling side, I’m not aware of too many complaints. In fact, it was kind of funny, over the weekend I had a friend on Facebook ask this very question, and so I was monitoring responses of people and they were saying that it was a fast and easy process to sell their car to Carvana. On the buying side, I think the thing is, you have to remember that when you buy a car from Carvana, you can’t test drive it, you can’t inspect it. And on occasion, I’ve heard of people receiving a car that they didn’t feel really matched what was represented online. But I think the thing to keep in mind there is that Carvana offers a seven-day money-back guarantee with a limit of 400 miles. So when you get your car, just take that time to really test drive it and get a very thorough inspection done.
Sean Pyles:
So people go with Carvana because it seems like a really easy way to buy or sell a car and you can potentially just have the car dropped off at your front door. But that doesn’t mean that you still don’t have to do your due diligence and then get that inspection to make sure the car is as good as they are telling you it is.
Shannon Bradley:
Yes, exactly. They will allow you to, I think return up to three vehicles. There is some leeway there. And then the other thing that I was just going to mention, because I think a lot of people have heard about this because there was a lot of media coverage about it. This was in late 2022, early 2023, there was an issue with Carvana buyers. They would buy a car, they didn’t get their title in a timely manner, and so they couldn’t even register and drive the cars. And that’s something that our autos team has been monitoring. It doesn’t seem to be the issue that it has a year ago, but we still recommend for people to ask for proof of title. It’s just given that there were issues a year and a half ago, it’s just not a bad idea to do that.
Sara Rathner:
So our listener, like so many others, is interested in getting a good deal when selling their car. Do we know if places like Carvana offer better or worse deals than other places where you can sell your car?
Shannon Bradley:
Well, when you compare Carvana to CarMax, I’d say that’s kind of a toss-up. I think a lot depends on the vehicle you’re selling. Is it one that the retailer needs in their inventory at that time? And if it is, they may be more inclined to make you a better offer, but that’s why it’s so important to get more than one offer. And then you asked about dealerships. Traditionally you can get more selling your car to an individual, but of course that’s not going to be as easy as selling to someone who’s going to come right to your door and pick it up or even being able to go to the dealership down the road, but dealerships, their offers tend to be the lowest. But again, it depends on the car that you’re selling. Right now we’re seeing that both new and used cars are low inventory for Toyota. So if you have a type of car that a dealer is really needing on their lot, you may be able to negotiate a better deal.
Sean Pyles:
So the car market has been on a wild ride over the past few years, really since the pandemic began. So what is the car market looking like right now both for buyers and sellers?
Shannon Bradley:
Well, I would say wild ride is kind of an understatement. As someone who’s been covering the car market for the last three years, it has been a wild ride. It is not back to where it was before the pandemic. But from a car buyer aspect, several things are improving. For one, inventory is returning to normal. And actually you have some auto manufacturers who have overshot and are overstocked and those particular manufacturers, they’re starting to offer incentives again. We’re hearing you may be able to negotiate below the manufacturer’s suggested retail price, which was really unheard of during the pandemic. And then on the downside, we all know how vehicle prices are still high. I think actually this morning I saw that the average transaction price for a new vehicle is still at $47,000. That’s not small change by any means.
Sean Pyles:
No, it’s a lot of money.
Shannon Bradley:
But you can find deals out there, especially if you’re flexible about what you’re buying. And then leasing has some good deals. And if you buy or lease an EV right now, you could qualify for the federal tax credit of up to $7,500 on top of the other incentives that are out there.
Sara Rathner:
So how about sellers in the current climate? How are things looking for people who are selling their car right now?
Shannon Bradley:
Well, I would say they’re not faring quite as well as the buyers. Depends on what you’re selling, but if you recall, during the pandemic the vehicle shortage meant that individuals were actually selling their cars for a lot more than they paid for them. And with car supplies returning to normal for most manufacturers, selling isn’t what it was during the pandemic. You shouldn’t anticipate a huge profit like we were seeing in the past several years, but you should expect to receive a fair price and you can do that by researching the current market value of your car.
Sean Pyles:
So how can people get the most money for their vehicle?
Shannon Bradley:
Well, I go back to research. Research is key. If I was selling my car right now, I definitely wouldn’t put all of my eggs in one basket. If you get only one offer, which is something a lot of people do, they just don’t want to take the time to get more than one offer, you won’t ever know if there was a better offer out there. And the thing is, nowadays, it’s easy to do your research. You have online pricing guides where you can find estimates like Edmunds or Kelley Blue Book. And as we’ve been discussing, you can request actual offers from sites like Carvana, CarMax or TrueCar. And there’s not any cost or obligation to do that. Something we recently launched at NerdWallet, we can also make an offer on your car. We now have NerdWallet Automotive and you can find that when you Google NerdWallet buy my car.
Sean Pyles:
Alrighty. Well now let’s turn to the next question, which comes from a listener’s text message. They wrote, what is the fuel of the future? I’ve been researching about buying a new car and they’re saying that cars in the future are going to be electric, but if there’s a new fuel of the future, should I just wait until the new fuel comes out or just buy an electric car now? So Shannon, if you don’t mind, please bring out your crystal ball or industry research and tell us is there a new fuel of the future or does it seem like electric vehicles are the automotive energy of the coming years?
Shannon Bradley:
Well, we’re hearing a lot about research of different alternative fuels like natural gas, propane, or hydrogen fuel cells, which is really just another way of generating electricity. But these are all really in their early stages of development and adoption. So while I think development of various ways to lower vehicle emissions will definitely continue, my crystal ball says that in the near future, the emphasis will still be on EVs.
Sara Rathner:
And is that because EVs have just been around longer and have an advantage in the market over these other fuel types?
Shannon Bradley:
Yes, Sarah, it is. Many people don’t realize that the first electric vehicles were actually introduced in the late 1800s, then they kind of fell by the wayside and interest renewed in the 1970s. So it’s actually taken a long time for us to reach a point where electricity is accepted as a fuel source as it’s becoming today. According to Kelley Blue Book, EVs represent the fastest growing car sales category, and last year nearly 1.2 million U.S. vehicle buyers went electric. We don’t expect that pace to slow down with federal and state legislation as well as so many car makers devoting many resources to the transition to EVs. I just don’t see a quick pivot to other fuel sources that are going to take more time to build that infrastructure and to build that adoption rate.
Sean Pyles:
So the EV market has been developing rapidly over the past few years, but many anxieties that would-be buyers might have around electric vehicles like range, affordability, finding chargers are pretty persistent. Have any of these issues gotten better?
Shannon Bradley:
They have gotten better. For comparison, before 2016, when you’re looking at range, the median range of a new EV was below 100 miles and the top performing option couldn’t travel 300 miles without a charge. Today you can buy an EV that has a 250-mile range for less than $40,000 and the high-end models can have a range of more than 400 miles per charge. When you’re talking about the charging infrastructure, that’s improving too. We now have about 60,000 charging stations across the country, and that’s more than twice the number that we had five years ago. And there are a lot of incentives out there to help with installing home chargers, like from some auto manufacturers or your local electric company.
Sara Rathner:
What about the price of these cars? EVs are generally more expensive than gas powered cars. Is this changing?
Shannon Bradley:
That’s improving too. I think the Tesla price drops have driven other car makers to follow suit. There are a lot of EV incentives out there to help reduce the cost. As I said earlier, you could qualify for the federal tax credit of up to $7,500 and that can usually be stacked with other incentives from car manufacturers, state and local government and electric companies. The U.S. Department of Energy actually has a site, you can find it by searching alternative fuels U.S. Department of Energy, that has a database where you can research all of the various incentives that are available. Late last year, I talked to someone who was an EV buyer in California and he used multiple incentives to knock $8,000 off the price of a Chevy Bolt. And then right now there are a lot of EV leasing deals, and that’s a great option if you’re someone who just isn’t sure that you want to go ahead and buy an EV right now.
Sean Pyles:
Okay. So Shannon, I have to ask you, as a consumer and also someone who writes about this stuff a lot, how are you thinking about electric vehicles? Have you made the jump or are you planning to?
Shannon Bradley:
I haven’t made the leap yet, but it isn’t because I don’t want one. I’m pretty frugal with my money and I bought a gas-powered car right before the pandemic, so I was able to buy it before car prices skyrocketed. And I’m in a fortunate position right now where I’m no longer supporting children. I was receiving, like everyone, stimulus funds during COVID, so I was able to pay down that car and I actually don’t have a car payment right now. I am environmentally conscious. So I think that eventually I will buy or lease an EV, but for right now, I’m enjoying taking a vacation from car payments and putting that money into my retirement savings.
Sean Pyles:
Well, that does sound like a very smart financial decision. I’ll say that. Well, Shannon, thank you so much for joining us on Smart Money.
Shannon Bradley:
Well, thanks for having me.
Sean Pyles:
And that is all we have for this episode. Remember, listener, we are here for you and your money questions. So if you have anything that you want the Nerds to help you out with, call us or text us on the Nerd hotline at (901) 730-6373. That’s (901) 730-N-E-R-D. You can also email us at [email protected]. Also visit nerdwallet.com/podcast for more info on this episode. And remember to follow, rate and review us wherever you’re getting this podcast. This episode was produced by Tess Vigeland who also helped with editing. Sara Brink mixed our audio. And a big thank you to NerdWallet’s editors for all their help.
Sara Rathner:
And here’s our brief disclaimer, we’re not financial or investment advisors. The nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.
Sean Pyles:
And with that said, until next time, turn to the Nerds.
The National Association for the Self-Employed’s membership has grown dramatically over the last few years, says Keith Hall, the group’s president and CEO. And while that growth has slowed since its COVID-era peak in 2022, he thinks flexible work is here to stay.
The boom in self-employment started when “a lot of people had to do it because of COVID. They didn’t choose to do it; they had to do it,” Hall says. “Many others saw and learned and read that you can do this. You don’t need to be tied to the desk in corporate America.”
Below is NerdWallet’s 2024 list of the 10 best U.S. metro areas for freelancers and the self-employed. Our analysis used recent metro-area data from the U.S. Census Bureau and state-level data from the Tax Foundation. The top metro areas are those where a significant percentage of the workforce is self-employed already, rent is relatively affordable, unemployment is low, worker mobility is high and state income taxes are relatively low.
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Top 10 metro areas for freelancers and the self-employed
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Once we uncover your personalized matches, our team will consult you on the process moving forward.
Key findings
Of our top 10 cities, Bridgeport-Stamford-Danbury, Connecticut, and North Port-Bradenton-Sarasota, Florida, have the largest percentages of the workforce that are already self-employed (8.5% and 8.2%, respectively). The median of all metro areas in our dataset is 5.3%.
Housing affordability continues to benefit communities like Chattanooga and Knoxville, Tennessee; Lancaster, Pennsylvania; and Portland, Maine — all places in which more than half of renters spend less than 30% of their income on rent.
Tennessee, Florida and Texas all have no state income tax, which can keep a portion of income in self-employed workers’ pockets. That said, “It’s rare when I personally hear an individual relocating states just because of the tax code,” Hall says.
Columbus, Ohio, was boosted by a significant increase in the number of people moving to the city for work between the end of 2022 and the beginning of 2023. While those people weren’t necessarily freelancers, we use this data point to better understand economic vibrancy.
Identify your self-employment goals when considering a move
What might self-employment look like for you? That depends on what you hope to get out of it.
1. Desired industry
Though some industries have shifted broadly toward remote work, others still benefit from proximity.
Brian Rood, a certified financial planner and owner of Artisan Financial Planning, knows that firsthand: He spent 27 years playing trumpet in the Kansas City Symphony before shifting to financial planning and now works primarily with artists.
In highly specialized fields like the performing arts, “you really do go where the work is,” Rood says. That might mean an industry-specific location, like New York or Los Angeles, or a small city where you landed an orchestra job and then built a network of students and professional contacts.
Seth Hodes, co-founder and managing partner at Able Wealth Management, also works primarily with artists and creatives. He says his clients often move from creative agencies to tech companies to freelance portfolios and then back again based on what opportunities arise. Living in regions that have active job markets and lots of opportunities in their industries helps facilitate such mobility.
“The artist freelancer has always been adaptable,” Hodes says. “It’s a grind out there — you’re going to have to survive and work up a certain kind of cultural capital.”
2. Financial goals
Self-employed workers typically need to set aside 25% to 30% of their income for tax payments.
Next, Rood adapts the 50/30/20 budget to each client; the budget is a framework that recommends spending 50% of your income on expenses, 30% on “wants” and 20% on savings. “It’s a little high on the first parts and a little low on the savings,” he says, but it’s a useful jumping-off point.
Rood encourages self-employed clients to have a larger-than-average emergency fund. For some performing artists, he recommends six to 12 months of living expenses.
That math can get difficult when the cost of living is high, and it can tempt people to move, especially if they can take work with them or are scaling back on hours.
When his clients leave a high-cost-of-living city, Rood says, “it’s because they either are going to retire, and so they want to go somewhere cheaper and they don’t need the work, or the rat race is too much and they want to do something else.”
Hall says he’s seen lots of older Americans strike out on their own, too. If your freelance work is a transition step out of full-time work, you may lean toward the place where you want to spend your retirement.
3. Identity, safety and values
Self-employment can afford you the freedom to live in a place for personal reasons, not just professional or financial ones.
For some, self-employment may support a move that lets them live more safely. According to a 2022 survey from the National Center for Transgender Equality, 5% of trans people had moved out of state due to laws targeting their community and 47% of respondents had thought about it.
And Hall says family ties and hometown memories are common reasons for relocation.
“We do hear a lot from NASE members and from small-business owners moving to a different community,” Hall says. “Maybe they grew up in a small city when they were younger and they had the need to go to the big city, because that’s where the jobs were. Now they’re going back home.”
Hodes says he works with his clients to find harmony between their financial goals and how they want to live their lives more broadly.
“You have to plan for the future, but it has to be a balance,” Hodes says. “Don’t sacrifice too much in the present.”
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Methodology
To create the Best Cities for Freelancers and Self-Employed Workers 2024 list, NerdWallet pulled data for major U.S. metropolitan areas from the U.S. Census Bureau. We also pulled state tax rates from the Tax Foundation and calculated the tax rate for a household earning the median U.S. household income. We weighted the impact of each factor depending on how important we felt that factor would be in the potential financial success of a freelancer. We excluded metro areas for which there was negative or no Job-to-Job Flows Census data.
NerdWallet’s analysis includes data from the following sources:
U.S. Census 2022 American Community Survey data for the unemployment rate, percentage of people in Census-designated metro areas who identified as self-employed in non-incorporated businesses, and percentage of renters in a Census-designated metro area who spend less than 30% of their household income on rent.
U.S. Census Q4 2022 and Q4 2023 Job-to-Job Explorer data.
The 2024 state tax rate for the median U.S. household (which earned $74,580 in 2023, according to Census data), according to the Tax Foundation.
There haven’t been many appealing options for borrowers in the last two years.
With inflation problematic, interest rates were elevated to help rein it in. And while that caused inflation to drop from a decades-high in June 2022, interest rates have been stuck at their highest level in 23 years. On Wednesday, the Federal Reserve elected to maintain that level, keeping the benchmark interest rate range unchanged between 5.25% and 5.50%. This has resulted in higher borrowing costs for everything from mortgages and auto loans to personal loans and credit cards.
One alternative that has remained cost-effective, however, has been home equity. By tapping into their equity via a home equity loan or home equity line of credit (HELOC), homeowners have gained access to large sums of money, often at much lower interest rates compared to the alternatives. But an even lower interest rate is always preferable, leading some to wonder if home equity loan rates will drop further this month. Below, we’ll break down what to expect now.
See what home equity loan rate you could secure online today.
Will home equity loan rates drop in May?
While the Federal Reserve kept interest rates unchanged this week, the implication that higher rates may be staying high for longer was clear. Even absent a formal increase in rates, rates on borrowing products like home equity loans and HELOCs may rise slightly if lenders believe that a rate hike is imminent.
So not only is it unlikely for home equity loan rates to fall in May — they may actually rise. That possibility could become more pronounced if the next inflation report, scheduled to be released on May 15, shows inflation rising yet again. If that happens, an interest rate hike becomes more likely — and rates on home equity products could rise.
Against this backdrop, then, homeowners may want to be proactive. Home equity loan rates are fixed (unlike HELOCs, which are variable). So by pursuing a home equity loan today, owners can lock in today’s low rate before it potentially rises further. And, if rates somehow drop in the months to come, owners could refinance their loan then. What they shouldn’t do, however, is rate for a better rate climate. Instead, get started now and lock in the lowest rate you can find.
Explore your home equity loan options here to learn more.
Why you should get a home equity loan now
A lower interest rate isn’t the only selling point for home equity loans now. Here are two other reasons why you may want to pursue this option today:
Access to large sums of money: The average amount of home equity is high right now, with owners potentially able to access $190,000 or more right now. Compared to the limits you can borrow with credit cards or personal loans, this substantial amount of money is an attractive feature for many, particularly when accessed at a lower rate than those alternatives.
Potential tax deductions: Using your home equity to make some summer home repairs, improvements or renovations? Then you may be eligible to deduct the interest you pay on the loan from your taxes next year. Just make sure you understand which projects qualify to secure this unique benefit.
The bottom line
Home equity loan rates are unlikely to fall in May and they could even rise as the month goes on. But because of that likelihood, and because of the low rate borrowers can secure now, it may be beneficial to act promptly. Combined with beneficial features like access to large sums of money and potential tax deductions for qualifying uses, a home equity loan can be your go-to credit option now. As with all financial products, however, be sure to weigh the pros and cons of this unique loan, as you could risk losing your home in the process if you can’t pay back what you borrow.
Matt Richardson
Matt Richardson is the managing editor for the Managing Your Money section for CBSNews.com. He writes and edits content about personal finance ranging from savings to investing to insurance.
Nestled in the heart of the Great Plains, South Dakota provides residents a unique blend of natural beauty, rich history, and tight-knit communities. Living in South Dakota means embracing a lifestyle defined by wide-open spaces, outdoor adventure, and a strong sense of community. From the city life of Sioux Falls, with its bustling downtown and vibrant cultural scene, to the historic charm of Rapid City, gateway to the Black Hills and home to iconic attractions like Mount Rushmore, South Dakota offers a diverse array of experiences. In this ApartmentGuide article, we’ll uncover the pros and cons of living in South Dakota, so you can learn what life is like in “The Mount Rushmore State.”
Renting in South Dakota snapshot
1. Pro: Expansive outdoor activities
With its diverse landscapes providing the perfect backdrop for various recreational activities, South Dakota is the perfect place for exploring. Residents can enjoy hiking in the Black Hills, fishing in the Missouri River, and camping in the state’s numerous parks and wilderness areas. For example, Custer State Park boasts scenic trails and wildlife viewing opportunities, while Badlands National Park offers unique rock formations and scenic overlooks.
2. Con: Harsh winters
South Dakota experiences harsh winters characterized by frigid temperatures, heavy snowfall, and strong winds, which can pose challenges for residents. Cities like Rapid City and Sioux Falls often contend with blizzards and extreme cold snaps, leading to hazardous driving conditions and disruptions to daily life.
3. Pro: Low cost of living
South Dakota boasts a low cost of living compared to many other states, with affordable housing, utilities, and overall expenses. Cities like Sioux Falls offer residents access to affordable housing options, with median home prices and rental rates below the national average. For instance, the median home price in Sioux Falls is $317,836 and the average rental price for a one-bedroom is $930, making housing more attainable for many South Dakotans.
4. Con: Limited entertainment options
South Dakota may have fewer entertainment options compared to more populous states, particularly in terms of nightlife, cultural attractions and restaurants. While cities like Aberdeen offer some entertainment venues and events, residents may find a lack of diversity and variety in recreational activities.
5. Pro: Strong sense of community
South Dakota is known for its strong sense of community, with residents often forming tight-knit bonds and supporting one another. Towns like Mitchell host community events and festivals that bring people together, such as the Shrine Circus, which adds to the community spirit.
6. Con: Limited public transportation
South Dakota may have limited public transportation options, especially in rural areas, which can hinder residents’ mobility and access to essential services. For instance, Sioux Falls has a transit score of 17, meaning there is minimal transit available.
7. Pro: Low traffic congestion
South Dakota enjoys low traffic congestion compared to more densely populated states, providing residents with shorter commute times and less stress on the road. Cities like Brookings have minimal traffic congestion, making it easier for residents to navigate urban areas and access amenities.
8. Con: Sparse population
South Dakota’s sparse population density, particularly in rural areas, can contribute to feelings of isolation and limited access to services and amenities. These rural towns and communities may be far removed from major urban centers and regional hubs, leading to challenges in accessing certain amenities and services.
9. Pro: Tax benefits
South Dakota’s lack of state income tax is a significant advantage for residents, allowing them to keep more of their earnings. This tax-friendly policy attracts individuals and businesses seeking to minimize their tax burden and maximize their disposable income.
10. Con: Economic dependence
South Dakota’s economy is heavily dependent on sectors such as agriculture, tourism, and healthcare, which can make it vulnerable to economic fluctuations. Deadwood and Spearfish rely on tourism and hospitality, while towns like Mitchell and Huron depend on agriculture and agribusiness. This economic dependence can lead to job insecurity and slower economic growth.
11. Pro: Sense of adventure
Whether it’s hiking to the summit of Harney Peak, the highest point in the Black Hills, or embarking on a scenic drive along the Needles Highway, there’s always something new to discover in the state. For example, the annual Buffalo Roundup in Custer State Park allows visitors to witness the thrilling sight of hundreds of bison thundering across the prairie, showcasing South Dakota’s rugged beauty and sense of adventure.
12. Con: Feeling of isolation
Methodology : The population data is from the United States Census Bureau, walkable cities are from Walk Score, and rental data is from ApartmentGuide.
If someone is applying for disability benefits, they may be relieved to learn that, yes, you can have a savings account while on Social Security disability. While there are certain financial factors that can disqualify someone from Social Security eligibility, having a savings account is not one of those factors.
But of course, there are some subtleties to be aware of with any benefits matter, so it’s important to take a closer look. Among the points to learn are the difference between SSDI (Social Security Disability Insurance) and SSI (Supplemental Security Income), who is eligible for Social Security disability benefits, and what the guidelines are for having a savings account while receiving benefits.
What Is Social Security?
There’s a reason the Social Security program is so well known: It has been providing financial support to Americans for many decades. Social Security benefits are designed to help maintain the basic well-being and protection of the American people. These benefits have been around since the 1930’s in response to the economic crisis caused by the Great Depression.
Today, one in five Americans currently receive some form of Social Security benefits — one third of those are disabled, dependents, or survivors of deceased workers. More than 10 million Americans are either disabled workers or their dependents.
💡 Quick Tip: Help your money earn more money! Opening a bank account online often gets you higher-than-average rates.
Can I Get Social Security Disability Insurance or Supplemental Security Income with a Savings Account?
You may be thinking you can’t have that kind of asset if you want to qualify for Social Security Disability funds. However, it is indeed possible to receive Social Security Disability Insurance (SSDI) or supplemental security income if you have a checking or a savings account.
Even better, it doesn’t matter how much money is held in that account. There are other program requirements that must be met to qualify for SSDI, but how much money someone has or doesn’t have in the bank isn’t one of them.
Eligibility for SSDI
In order to be eligible for SSDI benefits, the individual must have worked in a job or jobs that were covered by Social Security and have a current medical condition that meets Social Security’s definition of disability. Generally, this program can benefit those who are unable to work for a year or more due to a disability.
It provides monthly benefits until the individual is able to work again on a regular basis. If someone reaches full retirement age while receiving SSDI benefits, those benefits will automatically convert to retirement benefits maintaining the same amount of financial support.
Eligibility for SSI
If you receive Supplemental Security Income (SSI), however, there is a limit on how much you can have in savings. SSI is a federal support program that receives funding from the type of taxes known as general tax revenue, not Social Security taxes.
This program provides financial support to help recipients cover basic needs such as clothing, shelter, and food. It provides aid to those who are aged (65 or older), blind, and disabled people who have little or no income (or limited resources). To qualify, participants must be a U.S. citizen or national, or qualify as one of certain categories of noncitizens.
What You Have to Tell SS about Your Assets if You Want Benefits
There are certain assets (in this case, they’re known as resources) that must be disclosed in order to qualify for benefits through the SSI program. Typically, to receive benefits, one can’t own more than $2,000 as an individual or $3,000 as a couple in what the SSA deems “countable resources.” However, there aren’t any such limits in place for the SSDI program.
The value of someone’s resources (aka their financial assets) can help determine if they are eligible for Social Security benefits. If a recipient has more resources than allowed by the limit at the beginning of the month (when resources are counted), they won’t receive benefits for that month. They can be eligible again the next month if they use up or sell enough resources to fall below the limit.
Eligible resources can include:
• Cash
• Bank accounts (checking account, regular savings account, growth savings account; whatever you have)
• Stocks, mutual funds, and U.S. savings bonds
• Land
• Life insurance
• Personal property
• Vehicles
• Anything that can be changed to cash (and can be used for food and shelter)
• Deemed resources
The term “deemed resources” refers to the resources of a spouse, parent, parent’s spouse, sponsor of a noncitizen, or sponsor’s spouse of the Social Security benefits applicant.
A certain amount of these deemed resources are subtracted from the overall limit. For example, if a child under 18 lives with only one parent, $2,000 worth of deemed resources won’t count towards the limit. If they live with two parents, that amount rises to $3,000.
Recommended: What are the Different Types of Savings Accounts?
How Much Can I Have in My Savings Account and Receive SSI or SSDI?
For the SSI program, the total resource limit (which includes what’s in a checking account) can not be more than $2,000 for an individual or $3,000 for a couple. Again, there are no asset limits when it comes to the SSDI program. If someone is applying for the SSDI program, they can surpass that $3,000 limit, and it won’t matter as it doesn’t apply to them.
SSA Exceptions and Programs
Not every asset someone owns will count towards the SSI resource limit (remember, there is no such limit for the SSDI program). For the SSI program, there are some exceptions regarding what counts as a resource. The following assets aren’t taken into consideration:
• The home the applicant lives in and the land they live on
• One vehicle—regardless of value—if the applicant or a member of their household use it for transportation
• Household goods and personal effects
• Life insurance policies (with a combined face value of $1,500 or less)
• Burial spaces for them or their immediate family
• Burial funds for them and their spouse (each valued at $1,500 or less)
• Property they or their spouse use in a trade or business or to do their job
• If blind or disabled, any money they set aside under a Plan to Achieve Self-Support
• Up to $100,000 of funds in an Achieving a Better Life Experience account established through a State ABLE program
The Takeaway
When applying for Social Security benefits, having a savings account may or may not impact your eligibility. It depends on which program you are applying for. It is possible to have a savings account while receiving SSDI benefits. It’s also possible to have a savings account while receiving SSI, but there are limits regarding how much the value of the applicant’s assets (including what’s in their savings accounts) can be worth to qualify for support.
If you happen to be in the market for a savings account, take a look at your options.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall. Enjoy up to 4.60% APY on SoFi Checking and Savings.
FAQ
How much money can I have in a savings account while on Social Security?
Personal assets aren’t taken into account, including savings, when applying for the SSDI program. For SSI, however, countable resources (including savings accounts) are capped at $2,000 for individuals and $3,000 for couples.
Does Social Security look at your bank account?
That depends. If someone is applying for Supplemental Social Security Income (SSI) benefits, their personal assets are taken into consideration when it comes to eligibility. With Social Security Disability Insurance (SSDI), applicant assets aren’t taken into consideration.
What happens if you have more than $2,000 in the bank on SSI?
If you have more than $2,000 in the bank and are on SSI as an individual (more than $3,000 if you are part of a couple), you will not receive benefits for that month. Your finances will be evaluated the following month to see if your assets have fallen and you therefore qualify.
Does Social Security check your bank account every month?
Money in the bank doesn’t affect Social Security disability benefits. However, there is a $2,000 to $3,000 limit (varies by household) for the SSI program.
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SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
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90k salary is a good hourly wage when you think about it.
When you get a job and you are making about $24 an hour, making over $90,000 a year seems like it would provide amazing opportunities for you. Right?
The median household income is $68,703 in 2019 and increased by 6.8% from the previous year (source). Think of it as a bell curve with $68K at the top; median means half of the population makes less than that and half makes more money.
The average income in the U.S. is $48,672 for a 40-hour workweek; that is an increase of 4% from the previous year (source). That means if you take everyone’s income and divide the money out evenly between all of the people.
Obviously, $90k is well above the average and median incomes; yet, most people feel like they can barely make ends meet with this higher than average salary.
But, the question remains can you truly live off 90,000 per year in today’s society. The question you want to ask all of your friends is $90000 per year a good salary.
In this post, we are going to dive into everything that you need to know about a $90000 salary including hourly pay and a sample budget on how to spend and save your money.
These key facts will help you with money management and learn how much per hour $90k is as well as what you make per month, weekly, and biweekly.
Just like with any paycheck, it seems like money quickly goes out of your account to cover all of your bills and expenses, and you are left with a very small amount remaining. You may be disappointed that you were not able to reach your financial goals and you are left wondering…
Can I make a living on this salary?
$90000 a year is How Much an Hour?
When jumping from an hourly job to a salary for the first time, it is helpful to know how much is 90k a year hourly. That way you can decide whether or not the job is worthwhile for you.
90000 salary / 2080 hours = $43.27 per hour
$90000 a year is $43.27 per hour
Let’s breakdown how that 90000 salary to hourly number is calculated.
For our calculations to figure out how much is 90K salary hourly, we used the average five working days of 40 hours a week.
Typically, the average work week is 40 hours and you can work 52 weeks a year. Take 40 hours times 52 weeks and that equals 2,080 working hours. Then, divide the yearly salary of $90000 by 2,080 working hours and the result is $43.27 per hour.
Just above $40 an hour.
That number is the gross hourly income before taxes, insurance, 401K or anything else is taken out. Net income is how much you deposit into your bank account.
You must check with your employer on how they plan to pay you. For those on salary, typically companies pay on a monthly, semi-monthly, biweekly, or weekly basis.
What If I Increased My Salary?
Just an interesting note… if you were to increase your annual salary by $5K, it would increase your hourly wage by $2.40 per hour.
To break it down – 95k a year is how much an hour = $45.67
That isn’t a huge amount of money, but every dollar adds up to over $45 an hour.
How Much is $90K salary Per Month?
On average, the monthly amount would be $7,500.
Annual Salary of $90,000 ÷ 12 months = $7,500 per month
This is how much you make a month if you get paid 90000 a year.
$90k a year is how much a week?
This is a great number to know! How much do I make each week? When I roll out of bed and do my job of $90k salary a year, how much can I expect to make at the end of the week for my effort?
Once again, the assumption is 40 hours worked.
Annual Salary of$90000/52 weeks = $1,731 per week.
$90000 a year is how much biweekly?
For this calculation, take the average weekly pay of $1,731 and double it.
This depends on how many hours you work in a day. For this example, we are going to use an eight hour work day.
8 hours x 52 weeks = 260 working days
Annual Salary of$90000 / 260 working days = $346 per day
If you work a 10 hour day on 208 days throughout the year, you make $433 per day.
$90000 Salary is…
$90000 Salary – Full Time
Total Income
Yearly Salary (52 weeks)
$90,000
Monthly Salary
$7,500
Weekly Wage (40 Hours)
$1,731
Bi-Weekly Salary (80 Hours)
$3,462
Daily Wage (8 Hours)
$346
Daily Wage (10 Hours)
$433
Hourly Wage
$43.27
Net Estimated Monthly Income
$5,726
Net Estimated Hourly Income
$33.04
**These are assumptions based on simple scenarios.
90k A Year Is How Much An Hour After Taxes
Income taxes is one of the biggest culprits of reducing your take-home pay as well as FICA and Social Security. This is a true fact across the board with an all salary range up to $142,800.
When you start getting into a higher salary range, the more you make, the more money that you have to pay in taxes.
Every single tax situation is different.
On the basic level, let’s assume a 12% federal tax rate and 4% state rate. Plus a percentage is taken out for Social Security and Medicare (FICA) of 7.65%.
So, how much an hour is 90000 a year after taxes?
Gross Annual Salary: $90,000
Federal Taxes of 12%: $10,800
State Taxes of 4%: $3,600
Social Security and Medicare of 7.65%: $6,885
$90k Per Year After Taxes is $68,715.
This would be your net annual salary after taxes.
To turn that back into an hourly wage, the assumption is working 2,080 hours.
$68,715 ÷ 2,080 hours = $33.04 per hour
After estimated taxes and FICA, you are netting $68715 per year, which is a whopping $21,285 per year less than what you expect.
***This is a very high-level example and can vary greatly depending on your personal situation and potential deductions. Therefore, here is a great tool to help you figure out how much your net paycheck would be.***
Taxes Based On Your State
In addition, if you live in a heavily taxed state like California or New York, then you have to pay way more money than somebody that lives in a no tax state like Texas or Florida. This is the debate of HCOL vs LCOL.
Thus, your yearly gross $90000 income can range from $61,515 to $72,315 depending on your state income taxes.
That is why it is important to realize the impact income taxes can have on your take home pay. It is one of those things that you should acknowledge and obviously you need to pay taxes. But, it can also put a huge dent in your ability to live the lifestyle you want on a $90,000 income.
We calculated how much $90,000 a year is how much an hour with 40 hours a week. But, more than likely, you work more or fewer hours per week.
How Much is $90k Salary To Hourly Calculator
So, here is a handy calculator to figure out your exact hourly salary wage.
In fact, a real estate investment trusts may be a good career path to make this salary higher.
90k salary lifestyle
Every person reading this post has a different upbringing and a different belief system about money. Therefore, what would be a lavish lifestyle to one person, maybe a frugal lifestyle to another person. And there’s no wrong or right, it is what works best for you.
One of the biggest factors to consider is your cost of living.
In another post, we detailed the differences between living in an HCOL vs LCOL vs MCOL area. When you live in big cities, trying to maintain your lifestyle of $90,000 a year is going to be much more difficult because your basic expenses, housing, transportation, food, and clothing are going to be much more expensive than you would find in a lower-cost area.
To stretch your dollar further in the high cost of living area, you would have to probably live a very frugal lifestyle and prioritize where you want to spend money and where you do not. Whereas, if you live in a low cost of living area, you can live a much more lavish lifestyle because the cost of living is less. Thus, you have more fun spending left in your account each month.
As we noted earlier in the post, $90,000 a year is just above the median income of $30000 that you would find in the United States. Thus, you are able to live an above-average lifestyle here in America.
What a $90,000 lifestyle will buy you:
If you are debt free and utilize smart money management skills, then you are able to enjoy the lifestyle you want.
You are able to afford a home in a great neighborhood in MCOL city.
You should be able easily meet your expenses each and every month.
Saving at least 20% of your income each month.
Working to increase your savings percentage every year.
Able to afford vacations on a fairly regular basis; of course by using your vacation fund.
When A $90,000 Salary Will Hold you Back:
However, if you are riddled with debt or unable to break the paycheck to paycheck cycle, then living off of 90k a year is going to be pretty darn difficult.
There are two factors that will keep holding you back:
You must pay off debt and cut all fun spending until that happens.
Break the paycheck to paycheck cycle.
Live a lifestyle that you can afford.
It is possible to get ahead with money!
It just comes with proper money management skills and a desire to have less stress around money. That is a winning combination regardless of your income level.
$90K a year Budget – Example
As always, here at Money Bliss, we focus on covering our basic expenses plus saving and giving first, and then our goal is to eliminate debt. The rest of the money leftover is left for fun spending.
If you want to know how to manage 90k salary the best, then this is a prime example for you to compare your spending.
You can compare your budget to the ideal household budget percentages.
recommended budget percentages based on $90000 a year salary:
Category
Ideal Percentages
Sample Monthly Budget
Giving
10%
$750
Savings
15-25%
$1500
Housing
20-30%
$1800
Utilities
4-7%
$188
Groceries
5-12%
$506
Clothing
1-4%
$38
Transportation
4-10%
$225
Medical
5-12%
$375
Life Insurance
1%
$19
Education
1-4%
$26
Personal
2-7%
$113
Recreation / Entertainment
3-8%
$188
Debts
0% – Goal
$0
Government Tax (including Income Taxes, Social Security & Medicare)
15-25%
$1744
Total Gross Income
$7,500
**In this budget, prioritization was given to savings, basic expenses, and no debt.
Is $90,000 a year a Good Salary?
As we stated earlier if you are able to make $90,000 a year, that is a good salary. You are making more money than the average American and slightly less on the bell curve on the median income.
You shouldn’t be questioning yourself if 90000 is a good salary.
However, too many times people get stuck in the lifestyle trap of trying to keep up with the Joneses, and their lifestyle desires get out of hand compared to their salary. And what they thought used to be a great salary actually is not making ends meet at this time.
This $90k salary would be considered a upper-middle class salary. This salary is something that you can live on very comfortably.
Check: Are you in the middle class?
In fact, this income level in the United States has enough buying power to put you in the top 91 percentile globally for per person income (source).
The question you need to ask yourself with your 90k salary is:
Am I maxed at the top of my career?
Is there more income potential?
What obstacles do I face if I want to try to increase my income?
In the future years and with possible inflation, in some expensive cities, 90000 dollars a year is not a good salary because the cost of living is so high, whereas these are some of the cities where you can make a comfortable living at 90,000 per year.
If you are looking for a career change, you want to find jobs paying over six figures.
Is 90k a good salary for a Single Person?
Simply put, yes.
You can stretch your salary much further because you are only worried about your own expenses. A single person will spend much less than if you need to provide for someone else.
Your living expenses and ideal budget are much less. Thus, you can live extremely comfortably on $90000 per year.
And… most of us probably regret how much money wasted when we were single. Oh well, lesson learned.
Is 90k a good salary for a family?
Many of the same principles apply above on whether $90000 is a good salary. The main difference with a family, you have more people to provide for than when you are single or have just one other person in your household.
The cost of raising a child is expensive! Any of us can relate to that!
Did you know raising a child born in 2015 is $233,610 (source). That is from birth to the age of 17 and this does not include college.
Each child can put a dent in your income, specifically $12,980 annually per child.
That means that amount of money is coming out of the income that you earned.
So, the question really remains is can you provide a good life for your family making $90,000 a year? This is the hardest part because each family has different choices, priorities, and values.
More or less, it comes down to two things:
The location where you live in.
Your lifestyle choices.
You can live comfortably as a family on this salary, but you will not be able to afford everything you want.
Many times when raising a family, it is helpful to have a dual-income household. That way you are able to provide the necessary expenses if both parties were making 90,000 per year, then the combined income for the household would be $180,000. Thus making your combined salary a very good income.
Learn how much money a family of 4 needs in each state.
Can you Live on $90000 Per Year?
As we outlined earlier in the post, $90,000 a year:
$43.27 Per Hour
$346-433 Per Day (depending on length of day worked)
$1731 Per Week
$3462 Per Biweekly
$7500 Per Month
Next up is making $100000 a year! Time for six figures!!
Like anything else in life, you get to decide how to spend, save and give your money.
That is the difference for each person on whether or not you can live a middle-class lifestyle depends on many potential factors. If you live in California or New Jersey you are gonna have a tougher time than Oklahoma or even Texas.
In addition, if you are early in your career, starting out around 55,000 a year, that is a great place to be getting your career. However, if you have been in your career for over 20 years and making $90K, then you probably need to look at asking for pay increases, pick up a second job, or find a different career path.
Regardless of the wage that you make, if you are not able to live the lifestyle that you want, then you have to find ways to make it work for you. Everybody has choices to make.
But one of the things that can help you the most is to stick to our ideal household budget percentages to make sure you stay on track.
Learn exactly how much do I make per year…
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