Self-doubt and embarrassment can creep in at a moment’s notice without warning. Insecurities, whether stemming from childhood or developing as a young adult, do not discriminate. Here are some of the most common complaints. Which would you rank number one?
1. Hair Loss
For women and men alike, early onset shedding can drain self-confidence. “I started losing my hair when I was 18. Now I keep my hair really short so it isn’t so noticeable,” one Redditor posted. “Also, lots of hats!” Now that’s looking on the bright side.
“Just remember: bald is sexy, balding is not,” an encouraging response read. “Sounds like you made the right choice! No shade on anyone who wants to rock a comb over, you do you boo.”
2. Nose Goes
From young children and teens to grown adults and baby boomers, most have wrestled with admiring their side profile.
“I hate my nose” was among the top comments regarding physical features.
3. The Number on the Scale
While being overweight can trigger a person, being underweight is equally stressful.
“My weight; I’m super skinny and find it impossible to put on any weight.”
4. Being at a Loss for Words
“Not coming up with anything to say … It’s so embarrassing because it can happen in the beginning of a conversation out of nerves. Makes me feel very uncomfortable, and that person loses interest.”
Anyone in public speaking is sure to relate.
5. Surface Level
“I have eczema (a genetic skin condition that often looks like a flaky sunburn, no matter how much lotion I put on), and I know it makes me physically less attractive. When I get turned down for dates, I can’t help but wonder, was it because of my bad skin?”
6. Wordy Worry Wort
As it turns out, keeping someone from getting a word in edgewise is a major faux pas.
“I’m so scared of being annoying or too out there.”
7. Heated Handshake
Whether the result of too much coffee, the shivers, or a touch of nervous energy, temperature changes happen to everyone.
“When people point out the shakes in my hands or my overheating… I have an autoimmune disorder that causes temperature regulation issues.”
8. Not So Pearly Whites
“I don’t have perfectly white teeth,” said one comment.
“My dang teeth. Years of bulimia messed them up royally, and now, instead of weight issues, I have far more expensive dental problems,” another posted in reply.
Coffee, red wine, and smoking are said to have contributed to stains and discoloration.
9. Hairy Human
“I have a tiny bit of a beer belly, but it also has a dark peach fuzz, which is not acceptable in women,” said one Redditor.
10. Lips with a Lisp
Speech impediments are often significant sources of insecurities plaguing teens. However, lisp is among the most common (and treatable) issues.
Source: Reddit.
We’ve all been there – sitting through a movie that we can’t help but cringe at, but somehow it still manages to hold a special place in our hearts.
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10 of the Greatest American Bands of All Time
When it comes to music, the mantra “beauty lies in the eye of the beholder” holds truer than ever. Nevertheless, we’ve worked hard to pinpoint the best American bands ever.
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10 Crazy Good Movies Where Women Are the Bad Guys
Are you looking for a movie night with a twist? Look no further than these Reddit-voted top ten films where women take on the destructive bad guy role.
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25 Extraordinary Sequels and Remakes That Outshine the Originals
Every once in a while, a movie sequel or remake surpasses the original film. After polling the internet, “Name a single movie where the sequel or remake was better than the original?” Here are the top-voted responses.
25 Extraordinary Sequels and Remakes That Outshine the Originals
Self-doubt and embarrassment can creep in at a moment’s notice without warning. Insecurities, whether stemming from childhood or developing as a young adult, do not discriminate. Here are some of the most common complaints. Which would you rank number one?
1. Hair Loss
For women and men alike, early onset shedding can drain self-confidence. “I started losing my hair when I was 18. Now I keep my hair really short so it isn’t so noticeable,” one Redditor posted. “Also, lots of hats!” Now that’s looking on the bright side.
“Just remember: bald is sexy, balding is not,” an encouraging response read. “Sounds like you made the right choice! No shade on anyone who wants to rock a comb over, you do you boo.”
2. Nose Goes
From young children and teens to grown adults and baby boomers, most have wrestled with admiring their side profile.
“I hate my nose” was among the top comments regarding physical features.
3. The Number on the Scale
While being overweight can trigger a person, being underweight is equally stressful.
“My weight; I’m super skinny and find it impossible to put on any weight.”
4. Being at a Loss for Words
“Not coming up with anything to say … It’s so embarrassing because it can happen in the beginning of a conversation out of nerves. Makes me feel very uncomfortable, and that person loses interest.”
Anyone in public speaking is sure to relate.
5. Surface Level
“I have eczema (a genetic skin condition that often looks like a flaky sunburn, no matter how much lotion I put on), and I know it makes me physically less attractive. When I get turned down for dates, I can’t help but wonder, was it because of my bad skin?”
6. Wordy Worry Wort
As it turns out, keeping someone from getting a word in edgewise is a major faux pas.
“I’m so scared of being annoying or too out there.”
7. Heated Handshake
Whether the result of too much coffee, the shivers, or a touch of nervous energy, temperature changes happen to everyone.
“When people point out the shakes in my hands or my overheating… I have an autoimmune disorder that causes temperature regulation issues.”
8. Not So Pearly Whites
“I don’t have perfectly white teeth,” said one comment.
“My dang teeth. Years of bulimia messed them up royally, and now, instead of weight issues, I have far more expensive dental problems,” another posted in reply.
Coffee, red wine, and smoking are said to have contributed to stains and discoloration.
9. Hairy Human
“I have a tiny bit of a beer belly, but it also has a dark peach fuzz, which is not acceptable in women,” said one Redditor.
10. Lips with a Lisp
Speech impediments are often significant sources of insecurities plaguing teens. However, lisp is among the most common (and treatable) issues.
Source: Reddit.
We’ve all been there – sitting through a movie that we can’t help but cringe at, but somehow it still manages to hold a special place in our hearts.
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10 Crazy Good Movies Where Women Are the Bad Guys
Are you looking for a movie night with a twist? Look no further than these Reddit-voted top ten films where women take on the destructive bad guy role.
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25 Extraordinary Sequels and Remakes That Outshine the Originals
Every once in a while, a movie sequel or remake surpasses the original film. After polling the internet, “Name a single movie where the sequel or remake was better than the original?” Here are the top-voted responses.
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As a parent of a teenager or young adult, you want to ensure that your child is financially secure and understands the importance of taxes. Filing taxes can often be confusing and intimidating, but it’s an important part of life when you start earning income. Once you know a few key concepts, filing your taxes doesn’t have to be so intimidating.
Teens and young adults need access to resources that explain the tax filing process in easy-to-understand language and walk them through their specific filing situation so they know exactly what needs to be done come tax time. Today, we’ll cover taxes from a young adult perspective and discuss how learning about this important financial component now can help prepare for future success.
Explain the basics of filing taxes and why it’s important for young adults
Filing taxes can seem daunting for young adults, but it’s an essential part of financial responsibility that shouldn’t be overlooked. Simply put, it’s a way for the government to ensure that they’re collecting the appropriate amount of money from individuals and businesses alike. When you file your taxes, you’re essentially reporting your income for the year and any applicable deductions you may have. It’s important to file because if you don’t, you could end up facing penalties. Additionally, filing can help you receive a refund if you overpaid taxes throughout the year. Even if you’re just beginning work, there could be money for you to claim.
Don’t let the tax season stress you out–it’s an opportunity to reflect on your own financial literacy throughout a calendar year.
Educate yourself on why and how we pay taxes
Sometimes the toughest part of filing taxes can be knowing where to start. Young adults need to learn if they should file, when to file, how to file, and what all those numbers across a paycheck mean.
Did you know that more income doesn’t necessarily mean a higher tax rate? It just means that only income over a certain amount will be taxed higher. What forms should you keep an eye out for in January? What can you do throughout the year to make paying your taxes easier? Sometimes, we’re left with more questions than answers, and these are just a few of the questions that are critical for building financial stability and health as your resume grows.
Knowing when and how to file
Knowing when and how to pay and file taxes is crucial to staying organized and on top of your responsibilities. It’s important to understand how you pay taxes throughout the year and when you need to file. This can depend on many factors including your job, income, or where you live. Secondly, figuring out how to file can seem overwhelming, but there are many resources available to help you navigate the process. Government websites or tax professionals can provide guidance and assist you in filling out necessary paperwork. Remember, filing taxes might seem overwhelming, but with a little research and support, you can successfully manage this responsibility – just don’t miss that Tax Day deadline!
Understanding your paycheck
A paycheck is an important part of understanding your taxes. Your paycheck outlines your gross pay, taxes deducted from your income, and the final amount of take home pay that you actually receive in cash or check form. The gross pay includes regular wages, any overtime wages. Also included on your paycheck are mandatory and optional deductions which are taken directly from your paycheck before the final amount of take home pay is calculated.
The look of your paycheck can often explain what forms to look out for at the start of tax season. Whether you’re receiving pay stubs from an employer or submitting invoices as a freelancer, it’s important to hold on to this important paperwork to keep track of what you owe and what you’ve paid. Once all deductions are included, the net amount of your paycheck is what you will receive as take home pay.
Tax season can be stressful, but it doesn’t have to be! All it takes is some time to know what to do and why you’re doing it. In just an hour, anyone can build confidence to not feel intimidated every time tax season comes around. It’s something we’ll do for the rest of our lives – so why not take the stress out of it?
Inside: Are you struggling to manage your money? Feeling overwhelmed with debt? If so, it’s time to take action and build better habits. This guide will teach you how to create a budget and start your savings. You need these financial tips for young adults.
The importance of sound financial advice for young adults cannot be overstated.
Often, a lacuna exists in our educational system where personal finance is concerned, leaving many young adults ill-equipped for the financial decisions that await them in their adult life.
Yet, you will encounter situations that require a sound understanding of budgeting, credit usage, investment, and an array of other financial tools without any formal education in these areas.
Financial advice can act as a compass, guiding you on a path to financial health and stability.
This early orientation can help you avoid the pitfalls of needless debt accumulation, poor money management, and inefficient financial choices like I made.
That is why it is of utmost importance to start imparting knowledge and financial habits to young adults as early as possible.
Why Financial Advice is Crucial for Young Adults
Money matters! Especially when you’re young and there’s a world of financial responsibilities unveiled before you.
Understanding financial basics early on is key to smart monetary decisions in the future. Here’s why you should consider this vital:
Knowledge Burst: Understanding finance terms, the implications, and their impacts arm you with knowledge for future decisions.
Saving for Later: Early investment in savings accounts or retirement funds can maximize your funds later in life.
Debts Control: Ensuring debts are paid off faster helps avoid excessive interest in the long run.
Investment: Stock or mutual fund investment can multiply your savings in the right condition.
Remember, your financial health requires deliberate action, start early!
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
What is the best saving advice for young adults?
The best saving advice for young adults is to start early and save regularly.
This will help you build up a nest egg that you can use in the future.
Personally, this is my own regret as such it took me way too long to become financially sound.
Also, you want to be mindful of your spending and live within your means.
Best Financial Advice for Young Adults
When you’re in your 20s, the world feels like your oyster, ripe with opportunities and potential.
But among this plethora of choices, the most important decisions you make may very well relate to your finances.
While the excitement of earning and spending your hard-earned money can be exhilarating, it is crucial to remember that wise financial decisions made early on can set the stage for long-term financial success.
We have curated some of the best financial advice to help you make informed decisions and set the foundation for a secure financial future.
1. Create a Budget
Creating a budget can seem like a daunting task. However, once correctly accomplished, it can undeniably make your life a lot easier.
Below are some reasons to start budgeting from the start:
Money management: Knowing the ins and outs of your financial transactions helps manage your money efficiently. A budget gives you a clear snapshot of your income and expenses, allowing you to make strategic decisions about spending and saving. This level of control can be incredibly liberating and reassuring.
Financial discipline: Creating a budget encourages discipline when it comes to financial decisions. It can show you areas where you’re spending more than necessary, such as an underutilized gym membership, frequent dining out, or an unused streaming subscription. By addressing these expenses, you could easily save an additional $100 per month.
Alignment with goals: A budget can provide clarity and align your financial actions with your long-term goals. If you are side-tracked and lose sight of these ambitions, the budget serves as a potent reminder to guide you back to the right path.
Effective savings: A budget constitutes a robust tool that allows you to maximize your income and inculcate a savings habit. Essentially, it’s a roadmap that shows you, in real time, where you can minimize and direct those funds into savings. Those savings can then be invested toward achieving significant life goals more efficiently.
Stress reduction: Tracking income and expenditure can culminate in a stress-free financial life. For example, it helps manage unexpected emergencies or allows you to enjoy after-office drinks without any worries about overspending.
To simplify the job, various user-friendly budgeting apps are available.
These digital budgeting tools or apps offer handy features that can streamline tracking expenses and income. These tools can automatically categorize transactions, display visual charts of spending, and send alerts when you’re nearing the limit of a budget category.
Enjoy guilt-free spending and effortless saving with a friendly, flexible method for managing your finances.
Start Your Free Trial.
So, no more wondering where your money went.
With a budget in place, you get to tell your money exactly where to go, and this is an empowering shift from feeling out of control to feeling in control of your finances.
By making budgeting a consistent part of your financial routine, you adopt a proactive approach to your money, making your life easier, and your future brighter.
2. Manage Your Debt
As a young adult, managing your debt is incredibly crucial. Not only does it set the foundation for your financial future, but it also helps to keep your credit score healthy.
Here are some top-notch expert tips on how to effectively manage your debts:
Avoid credit cards whenever possible. Although credit card rewards may seem appealing, they can often lead to unwanted debts. Instead, try using cash, debit cards, or cash app cards.
Don’t finance purchases that depreciate in value over time. Rather than taking a loan for things like cars or other depreciable assets, save up and pay in full.
Minimize education-related costs. This can be achieved by going to in-state schools, considering trade school or community college, living off-campus, and exploring scholarships or work/study programs. Learn how to pay for college without loans.
Pay off your debts methodically. Consider strategies like the debt snowball or avalanche methods to strategically pay off your debts. Use a debt payoff app to find your debt free date.
Remember, being in debt can delay your financial goals.
So, learning to manage your debts early on in your life can have a significant impact on your future finances.
3. Invest Wisely
Investing wisely is a cornerstone of solid financial advice for young adults. It sets the foundation for a financially secure future.
Most people are terrified of the concept of investing and stay away from it, which is the worst decision possible.
Investing is about putting your money to work for you, expecting growth or income over time.
Consistently adding money to your investment portfolio can be more beneficial than staying away or trying to time the market.
Investing is ideally a long-term endeavor. Patience is key – you can’t expect to make big gains or reach your financial goals overnight. It’s a process of steady growth.
Simplicity is key for beginner investors. Buying and holding index funds is a good example of a simple and passive investment strategy. Or you can learn how to invest in stocks for beginners.
4. Educate Yourself about Savings and Investment Accounts
Understanding savings is a fundamental aspect of personal finance, yet many young adults ignore this.
Beginning an emergency fund, no matter how small is one of the oft-repeated mantras of personal finance experts.
Consistently making savings a non-negotiable monthly “expense” not only provides a safety net for emergencies but also contributes to various future goals such as retirement, vacation, or a down payment on a home.
A foundational aspect of mastering your finances involves learning self-control, reducing the tendency to make every purchase on credit, and understanding the importance of saving money before making a purchase.
Taking the initiative to read personal finance books and gain knowledge about managing money can greatly aid in controlling your financial future and making informed decisions about savings.
Starting saving for retirement early is essential to secure financial stability in the future.
Learn how much money should I have saved by 25.
5. Limit Your Expenses
Understanding how to limit expenses can be a game changer for your finances.
Track your daily expenses carefully, even the small ones like your morning coffee, as they can add up and provide crucial insights into your spending habits.
Keep your monthly costs, such as rent, as low as feasibly possible, as this will save you substantial amounts over time and accelerate your ability to invest in assets like a home. Learn the ideal household budget percentages.
This one makes the biggest different to spend less money…Categorize your expenses and set specific spending limits for each group, reviewing and adjusting these as needed to curb any overspending.
Regularly review your finances, specifically your bank and credit card statements, every two to three months to identify and eliminate any unnecessary expenditures.
6. Build Passive Income Streams
Okay, this one is my top financial tip!
Navigating the financial world requires strategy, and for young adults, generating passion income streams is a game-changer. With the decline of traditional 9-5 jobs, it’s crucial to adopt flexible financial strategies.
Start identifying your passions that can be monetized. Think about your hobbies, skills, or areas in which you’re an expert. It could be anything from blogging to tutoring or even food delivery services.
Find ways to make passive income. Remember, every bit of extra income counts, and data suggests diversifying income streams can secure your financial future.
Continuous learning is your power tool here. Aim to broaden your financial literacy, understand investing, explore various earning methods, and strengthen your entrepreneurial spirit.
While cutting expenses helps, growing your income using your passions gives you control over your financial destiny.
So, don’t hesitate in doubling up your day job with your passion-driven side hustles.
Expert tip: One of the best ways to make money online for beginners is a key place to start.
7. Create a Cash Reserve
Understand that surprise expenses can unsettle your financial plan, like a sudden car repair costing $700. Having a cash reserve will keep you financially stable through these unexpected turns.
Start an emergency fund: Alongside your regular savings, begin an emergency fund. Aim to save around three to six months’ worth of income.
Prioritize savings: Consider your savings as a non-negotiable expense. You’ll soon realize you’ve saved enough for significant objectives like a down payment on a home.
Build a rainy day fund: This larger $10k-50k rainy day account will help in those long-term expenses or job loss.
Combat inflation: Choose a money market account to preserve the value of your savings, while ensuring quick accessibility in emergencies.
Automation is key: If you’re forgetful, set up an automatic transfer that channels funds to your savings account immediately upon salary credit.
Building up cash reverses will help you to improve your liquid net worth and have less stress around money.
8. Learn About Taxes
Taxes seem complicated, huh? Well, not grasping tax basics can give you a run for your cash. So, get started young and you might save up a fortune in the long run
Start by understanding your salary. The chunk that you take home (net pay) isn’t the whole amount (gross pay) that your employer agreed on. Learn more about gross pay vs net pay.
If you’re self-employed, remember, you’ve got to handle income taxes, and also the full FICA bundle.
Do your bit of math now and avoid an unexpected cringer next April.
9. Consider a Term Life Insurance Policy
Getting a term life insurance policy while still relatively young is a smart financial move that any savvy young adult should consider early in their career.
This safety net serves multiple purposes, especially in ensuring the protection of your future family if for any reason you’re unable to provide for them.
Term life insurance policies are typically far more affordable for young adults. The research notably reveals that the younger an individual is, the more affordable the life insurance policy tends to be. Therefore, beginning this investment in your early years enables you to lock in a lower premium rate, thereby saving significant amounts in the long run.
A life insurance policy is an important piece of your financial planning puzzle. Remember, cost increases with age so act fast!
10. Take Action and Stay With It
Taking action and sticking with it is crucial in managing finances well.
First, you’ve got to get clear about your financial goals. Want to set up a passive income stream or travel? Make them specific, feasible, and measurable.
Once you’ve set your goals, break them down into bite-size pieces. For instance, calculate the costs and set quarterly goals. Make sure to these vision board supplies to keep your goals front and center.
Ultimately, this proactive approach coupled with persistence can help you efficiently manage your funds and stay financially healthy.
FAQ
Honestly, this is completely up to you.
The better bet would be to learn about financial management topics yourself.
Finding a fee-based financial advisor will be difficult when you have no significant assets. And then, when you do, a financial advisor can put a drag on your investing portfolio.
If you decide to work with a financial advisor, find a fee-only financial planner who provides unbiased advice – since they aren’t driven by commission.
Financial planning while young—especially in your 20s—is key to future success and financial security. Here are some steps to establish strong fiscal habits:
Firstly, map out your financial goals. Do you anticipate student loans, a mortgage, or potential investments?
Secondly, budget diligently to save more money early in your career.
Next, consider eliminating outstanding debt quicker by applying saved money from part-time or full-time employment.
Lastly, explore investments such as mutual funds and stocks for optimal use of leftover money after bills are paid.
Remember, according to a study of 30,000 college graduates, 70% never took a personal finance course—making self-education critical.
Use These Personal Financial Tips for Young Adults
In conclusion, managing personal finances is a vital skill that unfortunately is not emphasized enough in our educational institutions.
It’s critical for young adults – you – to learn this skill to establish a strong financial foundation for their future. Especially if you are determined to become financially independent.
This begins by developing a sense of self-control and understanding the importance of delayed gratification.
Regularly monitoring your income and expenses, and adjusting your lifestyle to live within your means, is a crucial habit.
Additionally, the importance of starting an emergency fund and saving for retirement cannot be overstated.
By incorporating these financial tips into their lives, young adults can steer clear of unnecessary financial stress and ensure a secure and financially healthy future.
Take this Advice about Money
It is crucial to understand not just the mechanics of money, but also, the long-term implications of your financial decisions.
Take control of your financial future today, and you are sure to reap the rewards in the years to come.
Discerning financial advice from trusted sources, instead of relying on potentially misleading external influences, is also key. Remember, the sooner you start, the better off you’ll be in the long run.
Remember the data-driven fact: small changes in your everyday expenses can have as big of an impact on your finances as getting a raise.
Know someone else that needs this, too? Then, please share!!
You’d think that someone so heavily involved in the mortgage world would have a family full of homeowners, but that’s not the case with David Stevens.
Despite being the president and CEO of the Mortgage Bankers Association (MBA), and formerly the FHA Commissioner, his 27-year old daughter still rents her place, per Businessweek.
Sara Stevens is reportedly well aware of the favorable situation in housing at the moment, what with the near-record low mortgage rates, the increasing rents, and the ability to grow wealth through home equity.
But that’s not enough for her and fiancé to give up their 765-square-foot one bedroom apartment in Arlington, Virginia, which runs at a hefty $2,195 a month.
Sure, they’ve got some student loan debt, like most Millennials their age, but pops has already pledged to help her with the down payment if need be.
And with combined income of nearly $108,000, the couple could most likely afford to purchase a fairly nice home or condo, even with home prices in the D.C. area pretty steep.
The apparent issue is that they’re currently in a central location, close to a subway stop and within walking distance to popular bars and restaurants.
If they decide to buy, they’d likely need to forego those perks for a longer commute and a home/condo that isn’t as nice as their current digs.
Is She Like Any Other Person, or Is Dad Telling Her to Hold Off?
On the one hand, it appears as if Sara Stevens has seen a lot of ugly stuff during the latest housing boom and bust, which would clearly make her a lot more cautious about purchasing a property.
Ditto anyone else thnking about getting into real estate today.
She apparently had family go through “tough situations” with bad mortgages that her father tried to sort out over the past few years.
But at the same time you have to wonder if she’s just like any other young adult, wanting to live in an urban center and enjoy the relatively stress-free life renting affords.
Because at the end of the day, it’s a lot easier to rent than own a home. You don’t really have to worry about the place. You make your rent payment each month and if something goes wrong, you call the landlord. It’s their problem, not yours.
The downside to renting is that you miss out on potential home price appreciation, and forced savings via home equity building, but with what has gone on over the past decade, that’s no longer a guarantee.
Interestingly, Sara’s dad purchased a home in Denver back in 1984 at the age of 27 when 30-year fixed mortgage rates stood at 13.9%. Today, they’re closer to 4%, yet Sara is holding off. Does dad know something we don’t know, or is it purely her decision?
Now of course everyone has their own reason for buying or renting, but it does kind of speak volumes about the very strange housing market these days.
Interest rates are ridiculously low, home prices are still well off recent record highs, and rents are climbing, yet everyone seems really cautious about diving in.
But maybe that’s a good thing, because the moment everyone gets euphoric about housing again, we’re in big trouble. So I, for one, welcome the uncertainty.
Picking up and moving across the country is no easy feat. From organizing your belongings, packing up, moving yourself and making a new space a home, the whole process can be overwhelming.
The cost of a long-haul move isn’t a cheap expense, either. Costing well into the thousands, it may seem tempting to reach for a personal loan to finance the cost. But while it is helpful to some, a loan is not a one-size-fits all option.
I recently spoke with Jeremiah, a young adult who recently embarked on a cross-country move from the South to the West Coast, and asked him about his experience with paying for a move from one coast to the other.
Average cost of a long-haul move
The average cost of a cross-country move can range between $4,000 to $8,000. However, the costs can fall below or well exceed these ranges depending on the total distance traveled, the weight of your move and the amount of time it takes to transport your items. This number excludes the cost of living in a different city — also known as the cost of living index — and only takes moving-specific expenses into account.
Hindsight is 20/20: How a low-interest loan may have been helpful in easing moving anxiety, promoting caution
When Jeremiah took the leap, packed up his life and moved to California this year, he said he didn’t consider a loan since he was moving into another rental unit and had some savings. “I had saved up a little nest egg for a potential home down payment the year before,” he said. “This move would have been for a rental so I didn’t need all that cash handy and could dip into savings to afford it.”
However, he added that if he were to move again, he probably wouldn’t take out a loan if he had the same nest egg, but that he can see the appeal of taking out a low-interest loan on top of the cash for more ease of mind.
“The idea of a loan would make me a bit more cautious about the move [or] less impulsive [or would] make me really consider all the reasons why I want that adventure,” he said.
How to know when to take out a loan for moving expenses
Right now may not be the ideal time to borrow a personal loan, especially if you have unstable or low credit. Interest rates are currently at an all-time high — according to a Bankrate study, the average rate is 11.29 percent — and experts are unsure when the Fed will begin dropping rates.
With the average rate being so high, it’s possible that the interest accrual alone could amount to more than the cost of the move over the life of the loan. That being said, taking out a personal loan right now may not be the best funding option — discluding those who qualify for the lowest rates and fees.
If you have a good-to-excellent credit score, a steady income and a strong credit history, then it may be worth it to prequalify with a few lenders to see if the rates are competitive enough to make a loan worth it in the long run.
How to finance unexpected moving costs
There will always be bumps in the road and unexpected costs that arise, so the best thing you can do is to be prepared financially for any emergencies that could pop up.
For Jeremiah, some of these situations couldn’t have been more unexpected. “Unfortunate unexpected costs were related to pre-shipments being stolen [or] needing to ship myself something twice,” he said. “Thankfully I could dispute with Amazon or Ikea but some returns or disputes passed the window if I purchased too far in advance.”
A personal loan or credit card could be useful for financing emergency expenses — like paying for stolen furniture — rather than trying to pay out-of-pocket for new furnishings. However, never borrow more than you need and pay attention to the rates you’re offered; you don’t want to be paying off that new sofa and television for years down the road.
Before taking any financial action in the case of an emergency or unexpected event, it’s always best to check with the moving furniture company to see if they have a refund or replacement policy.
Pros and cons of using a loan to pay for a move
Just like every other financing option, using a loan to cover the cost of a move has both its advantages and disadvantages. Whether it’s the right choice for you depends on your immediate needs, your financial situation and whether your budget will comfortably allow for the payments in the future.
Pros
Ease of mind if emergencies arise
May help promote cautious spending
Can be used for furnishing, mover expenses and any non-discretionary costs that are involved with a road-trip or longer flight
Cons
Low interest rates are harder to get approved for
Could be paying it off for years down the road
Have to keep up with the monthly payments to limit interest accrual and credit decline
When to consider a personal loan to cover the cost of a move
If you’ve exhausted all of your other options and have decided that a credit card may not be the best option for your finances, then it may be time to look into a personal loan.
However, this is only recommended to borrowers with good credit who meet all of the lender’s minimum application requirements. Otherwise you could be offered sky-high interest rates and fees that could end up setting you back financially.
How to find the best personal loan
Since there is no universally accepted ‘best’ personal loan, compare lenders to find the best loan for you. Prequalify whenever possible and for as many lenders as you can to find out what the most competitive offer looks like for your credit situation.
What’s best for you will also depend on whether the lender offers benefits and perks that will assist you in managing your balance. For example, it’s common to see banks offer an interest rate reduction as a loyalty perk for pre-existing customers or lending institutions offer a similar perk for enrolling in autopay.
Before we fire off the gun to start the ‘Compound Return Marathon’, let’s cover some basics on what compound returns are and why you should care.
What is compound interest? You probably became familiar with the term ‘compound interest’ when you first started placing money in your bank accounts. Most of us recognize compound interest as the interest we receive from holding money in a savings account, certificate of deposit, or other low rate of return investment at the bank. Any form of compound interest is great, but this post isn’t about avoiding depreciation in cash value by earning just enough to out-pace inflation with low rate returns (which is about all no risk interest accounts are able to do). Let’s discuss a different type of compound interest.
Compound returns When you purchase index or mutual funds, you are often asked what you would like to do with any dividend or capital gains disbursements from that particular investment’s holdings. When you select that you would like to ‘re-invest’, you are, in effect, compounding your returns. The same goes for dividend producing stocks. You are offered the choice of receiving your dividend in the form of a cash payout, or re-investing the amount into more stock.
Why should I care about compound returns? When fully harnessing the power of compound returns, you can save less, make more, and retire early. There is sacrifice. You will need to start saving at a time when many of your peers are getting takeout food every night, leasing vehicles they can’t afford, and buying all the latest tech gadgets. If you’re in your 20’s or 30’s, this post should instill a sense of urgency in you. If you’re a little older, you have some making up to do, but it’s not too late. Additionally, maybe there’s a young adult in your life whom you can help get off to a financial running start with the aid compound returns.
The Compound Return Marathon Let’s take a look at five different retirement strategies in the form of five hypothetical “marathon” participants (based on personas that we are all familiar with) and crunch some numbers to see who wins. Before we test the strategies, let’s take a look at the rules:
The average annualized rate of return for U.S. stocks was 13.4% from 1926 to 2000. The worst average annual rate of return for U.S. stocks in any 65 consecutive year period has been 8.5%. For this Marathon, let’s take the average between the two, and assume our participants are able to get a 10.95% return on our investments every year for each participant that invests in stocks.
Our conservative participant invests in a CD, which will earn 5%, compounded annually.
For simplicity, we’ll ignore taxes.
Everyone invests until age 67, the projected official retirement age in the future.
And now, let’s meet the participants:
Early Bird Bob: Bob didn’t follow the urge to blow his cash flow and ‘make up for it later’. He has decided to follow his own rules to utilize the power of compound returns. He invests $5,000 per year in domestic stock funds (earning 10.95% annualized) starting at age 20, and stopping at 40. Because he sacrificed early, he’s also able to stop investing 27 years before anyone else does.
Conservative Carrie: Carrie invests $5,000 per year in certificates of deposit (earning 5% annualized) starting at age 20 until age 67. Carrie sees the value in compound interest and has the right idea in saving early. She could get a reward for her consistency, but the fear of a market crash paralyzes her willingness to invest in stocks.
Live-it-up Larry: Larry invests $10,000 yearly in domestic stock funds (earning 10.95% annualized) starting at age 30. Larry discovered the power of compound returns after living it up in his 20’s, but regrets not discovering it 10 years earlier, so he is making up for it by doubling Bob’s yearly contribution amount.
Late bloomer Bill: Bill invests $20,000 yearly in domestic stock funds (earning 10.95% annualized) starting at age 40, until age 67. Bill has a high income job and is trying to make up for lost time with huge contribution amounts. He has downgraded from a Benz to a Lexus and cut back from three times a week at the golf club to two.
Mid-life crisis Melissa: Melissa invests $40,000 yearly in domestic stock funds (earning 10.95% annualized) starting at age 50, until age 67. Melissa spent most of her money throughout life to impress her friends, but since they all left her because she was too materialistic, she now has a load of time to make extra income to apply towards retirement. Is it too late for Melissa?
You can view the results of the Compound Return Marathon in a free Google Doc. Here you can see how much each participant was able to amass up through age 67. Additionally, you can see how much money they personally contributed to their retirement efforts.
Here’s how they finished:
Early Bird Bob contributed $5,000/yr. for 20 years ($100,000 total contribution). His nest egg at age 67 is $5,938,625.
Conservative Carrie contributed $5,000/yr. for 48 years ($240,000 total contribution). Her nest egg at age 67 is $940,127.
Live it up Larry contributed $10,000/yr. for 38 years ($380,000 total contribution). His nest egg at age 67 is $4,644,805.
Late bloomer Bill contributed $20,000/yr. for 28 years ($560,000 total contribution). His nest egg at age 67 is $3,168,398.
Mid-life crisis Melissa contributed $40,000/yr. for 18 years ($720,000 total contribution). Her nest egg at age 67 is $2,005,735.
Now that the race is over, let’s see what we’ve learned.
You’re better off starting late and taking risk than starting early and taking no risk. Being risk averse is dangerous in many ways. When looking at Conservative Carrie’s results, you’ll see that despite starting earlier than three other participants and investing every year, she wound up earning the least for retirement, in dramatic fashion. With that being said, starting early and welcoming a little extra risk can pay the biggest dividends.
Even if you start extremely late (Melissa), you can still drastically impact your future. Despite investing only 18 years, Melissa is still able to triple her total contributions.
Fully taking advantage of compound returns is your only opportunity to retire early. Take a look at all participants at age 50. Bob could realistically retire at age 50 and live off the interest, at least to get him up to retirement age and social security. None of the other participants stand a chance of retiring early.
Compound returns are pretty darn powerful.Early bird Bob contributed much less than anyone else, and stopped contributing at age 40 (27 years before everyone else), yet ended up with over $1.3 million more than any other participant. He contributed much less, quit early, and still wound up beating everyone else easily. In fact, he almost made 60 times his original return. Compare that to only three times for Melissa, the latest adapter.
The Bottom line: If you’re not maxing out your contributions as early as you possibly can, you’re falling behind.
J.D.’s note: As with some of the commenters, I believe the 13.4% average annualized return isn’t realistic. I used 8% for my own article on compound interest this morning. I’ll do some research to explore the notion of compound returns over various time periods, and share the results in the next couple weeks.
One of the oldest rules of personal finance is the simple admonition to pay yourself first. All the money books tell you to do it. All the personal finance blogs say it, too. Even your parents have given you the same advice.
But it’s hard. That money could be used someplace else. You could pay the phone bill, could pay down debt, could buy a new DVD player. You’ve tried once or twice in the past, but it’s so easy to forget. You don’t keep a budget, so when payday rolls around, the money just finds its way elsewhere.
And besides: What does “pay yourself first” even mean?
To pay yourself first means simply this: Before you pay your bills, before you buy groceries, before you do anything else, set aside a portion of your income to save. Put the money into your 401(k), your Roth IRA, or your savings account. The first bill you pay each month should be to yourself. This habit, developed early, can help you build tremendous wealth.
Why Pay Yourself First?
If you’re just getting started in the Real World, saving may seem impossible. You have rent, a car payment, groceries, and maybe student loans. Sure, you’d like to save, but there’s just no money left at the end of the month. And that’s the problem: Most people save what’s left over — left over after bills and after discretionary spending.
But if you don’t develop the saving habit now, there are always going to be reasons to delay: you need dental work, you want to go to Mexico with your friends, you aren’t making enough to pay your bills. Here are three reasons to start saving now instead of waiting until next year (or the year after):
You’re Prioritizing Saving
When you pay yourself first, you’re mentally establishing saving as a priority. You’re telling yourself that you are more important than the electric company or the landlord. Building savings is a powerful motivator — it’s empowering.
You’re Developing Good Financial Habits
Paying yourself first encourages sound financial habits. Most people spend their money in the following order: bills, fun, saving. Unsurprisingly, there’s usually little left over to put in the bank. But if you bump saving to the front — saving, bills, fun — you’re able to set the money aside before you rationalize reasons to spend it.
You’re Prepared for Money Emergencies
By paying yourself first, you’re building a cash buffer with real-world applications. Regular steady contributions are an excellent way to build a nest egg. You can use the money to deal with emergencies. You can use it to purchase a house. You can use it to save for retirement. Paying yourself first gives you freedom — it opens a world of opportunity.
I’ve never met anyone who does not wish they had started saving earlier. Nobody tells themselves, “Saving was a mistake.” No matter what your age, begin saving now. And if you already save, consider boosting how much you set aside each month.
How to Pay Yourself First
The best way to develop a saving a habit is to make the process as painless as possible. Make it automatic. Make it invisible. If you arrange to have the money taken from your paycheck before you receive it, you’ll never know it’s missing.
Part of your savings plan will probably include retirement, but you should also save for intermediate goals too, such as buying a house, paying for a honeymoon, or purchasing a new car. Here are three easy ways to begin doing this yourself:
If your employer offers a retirement plan — such as a 401(k) — enroll as soon as possible, especially if the company matches your contributions. Matched contributions are like free money.
Starting a Roth IRA is one of the smartest moves a young adult can make. These accounts allow your investments to grow tax-free. Because of the extraordinary power of compound interest(and compound returns), regular investments in a Roth IRA from an early age can lead to enormous future wealth.
Open a high interest savings account at a bank like Capital One 360 or FNBO Direct. Set up automatic transfers into this account, either directly from your paycheck or from your regular bank account. Treat these transfers like you’d treat any other financial obligation. This should be your first and most important bill every month.
Putting “Pay Yourself First” into Practice
For many people, saving is tough. Between housing, utilities, groceries, transportation, credit-card debt, student loans, and other expenses, there never seems to be enough left to set aside for long-term savings. And that’s the problem. Most people try to save something out of what’s left over instead of saving first.
But what’s the best way to do it? What’s the most effective way to pay yourself first?
While I was writing Your Money: The Missing Manual, I benefited greatly from the advice of Dylan Ross, a Certified Financial Planner (from Swan Financial Planning) and a long-time GRS reader. One thing Dylan stressed over and over was that I was looking at savings wrong. I kept writing that you should take whatever money you have leftover in checking at the end of the month and move it to your savings account.
“There’s a better way,” he told me. “People often have more success if they put money into savings first, and then transfer what they need to checking.”
It took me a while to understand what he was trying to say; it seemed like he was splitting hairs. Now, however, I realize that Dylan was espousing the true spirit of “pay yourself first”.
Savings First
This probably seems a little vague to many of you. How would you actually go about following Dylan’s advice? Here’s a simple three-step process to make savings a priority instead of an afterthought:
Open a high-interest savings account. Although “high-interest” is something of a misnomer lately, eventually it’ll make a difference. I use ING Direct for my savings, but there are many other great options. (If you’re curious, you can read more than 1700 GRS reader reviews of high-yield savings accounts here.) I’m a fan of keeping my savings account at a different bank than my checking account — it just makes it that much harder for me to tap my savings on a whim.
Deposit your paycheck to your savings account. If possible, have your paycheck automatically deposited. (The more you can automate this process, the easier it will be to save.) This is the key to Dylan’s plan. By putting the money into savings instead of checking, you don’t have “extra” cash sitting in your bank account at the end of the month that can be mindlessly spent on other things. Plus, the money’s already in your savings account, so you don’t have to remember to move it.
Set up regular transfers from savings to checking. Based on whatever system you have — a detailed budget, a rough guess based on last year’s spending, whatever — schedule monthly (or weekly) transfers into your checking account to take care of routine expenses. The money left in savings stays in savings.
The difference between the checking-first and savings-first systems may seem trivial, but Dylan swears it works. As he reviewed the manuscript to my book, he flagged every every instance where I encouraged readers to save by moving money from checking to savings. “You have it backwards, J.D.!” he said.
Another Variation
I have my own method of paying myself first, and it’s similar to Dylan’s advice, but on a bigger scale. I don’t pay myself first with each paycheck; instead, I try to front-load my saving every year.
That is, for the first few months, I save as much as I can. I set money aside for retirement, taxes, and other goals. I’m more frugal during the first half of the year, and there isn’t much left over for indulgences.
Once I’ve set aside all the money I think I’ll need, I’m able to loosen up and spend more on the things I want. I still save more throughout the year, but after I’ve met my initial goals, all other savings are a “bonus”.
How to Overcome the Challenge of Saving
The real barrier to developing this habit is finding the money to save. Many people believe it’s impossible. But almost everyone can save at least 1% of their income. That’s only one penny out of every dollar. Some will argue that saving this little is meaningless. But if a skeptic will try to save just 1% of his income, he’ll usually discover the process is painless. Maybe next he’ll try to save 3%. Or 5%. As his saving rate increases, so his nest egg will grow.
If you’re struggling to find money to save, consider setting aside your next raise for the future. As your income increases, set your gains aside for retirement and savings. Once you’re contributing the maximums to your retirement (and you’ve built emergency savings), you can begin to use your raises for yourself again. Sure, this means your effective salary will stagnate for a year or three or five. But it also means you’ll force yourself to develop the saving habit.
Example: My wife is a perfect case study. She started by having 8% of her pre-tax income set aside in her employer’s retirement plan. As her salary increased, she increased the amount she saved, routing it to various retirement accounts. Because she never saw the money in her paycheck, she never missed it. Now she saves 30% of her income, and she receives a 6% employer match! How did she do this? By paying herself first. (I should note that Kris just came to me the other night for advice on how to save even more. My wife is awesome.)
5 Ways to Pay Yourself First
If you are just starting to manage your money or you simply struggle when it comes to budgeting in the first place, paying yourself first may seem like one of those personal finance concepts that sounds good in theory but is difficult to put into practice in reality.
Fortunately, you can start small, get some good habits in place, and scale up from there. Here are five strategies to help get the ball rolling so you can start paying yourself first.
Strategy 1: Reduce Your Spending and Bank the Difference
The first step in implementing this strategy is similar to how you start to budget:
1. Figure out where your money is actually going. Using an app like Mint may help you identify and categorize your major expenses. (Full disclosure: Mint is at its best if you use a debit or credit card for all your transactions. Cash spending is a little trickier, though not impossible, to track.)
2. Figure out what to cut or reduce. Maybe you downgrade your cable package to a plan that doesn’t have the premium sports channels, switch to a no-contract cell phone plan, and increase the deductible on your auto insurance to lower your premium.
Now comes the trick:
3. Bank the difference. Add up your monthly savings from the changes and set up an automatic transfer to your online savings account for that amount. After all, what is the point of saving money if you don’t actually save it?
This can be addictive! If you channel your savings into one sub-account, then as you see it grow each month, you may be inspired to make even more cuts so you can increase the amount of your transfer and watch the savings grow.
Strategy 2: Start Small
But maybe that first strategy sounds intimidating though you aren’t sure you can actually save that much each month (especially if you’re currently spending more than you earn). If you really are starting from nothing, part of the problem may just be a matter of perspective. It’s unreasonable to think that you’ll go from zero to thousands of dollars in savings overnight.
Instead, try starting with $20 per month. Surely you have that much to spare, right? Set up an automatic transfer for that amount and see how it feels. This is actually how I started to save money, although it was for a different reason.
Back in the day when I opened my first savings account, an automatic transfer of at least $25 per month was required for the account fees to be waived. That’s no longer the case, but the transfer was already set up, so I never changed it. See? Laziness working in my favor!
Here’s the trick with this strategy:
Once you’ve been successful doing this for a month or so, bump that amount up. Can you save $40? $50? More? You’ll realize when you’ve hit your limit. And while the amount you are saving may not seem like much in the beginning, starting easy with something you can accomplish is kind of the point. Plus, the balance will grow quicker than you think!
Strategy 3: Bank Your Side-Gig Income
So you’ve got a side gig or second job. You’re in good company! Anyone can start a side business these days. But where does the money from your supplemental income go? If the answer is to your regular checking account and you’re still not saving any money, you may be able to put those funds to better use by funneling them directly to a savings account.
If it’s a second job, then go ahead and set up direct deposit to go straight to a savings account. Out of sight, out of mind — until you log in and admire your new-found savings! If your side gig is your own business, then hopefully you’ve got a business checking and savings account set up so you’re not mixing those funds with your personal money.
Keeping personal and business funds separate can make tax time easier and help you determine whether your side gig is successful. It also makes it clear how often you are paying yourself and how much you’re earning. Better yet? When you cut yourself a paycheck from your business, deposit it into your savings account rather than your checking account. Bank it, baby!
Strategy 4: If You’re Coupled Up, Live Off One Income
This one’s simple too. If you’re a member of a dual-income couple, then try to live off only one of your incomes. In this scenario, one of you has their paychecks direct-deposited into checking, while the other (preferably the higher earner, but do what works for you) has their paychecks deposited into savings.
A true one-and-done, this strategy probably enables saving the most money, and doing so very quickly. But here’s a couple caveats to remember: Obviously, both parties should have access to both accounts, and you should both be on the same page when it comes to saving and spending goals. Communication is key here.
However, assuming that is the case, the sky’s the limit. This strategy is especially effective for those who are planning to go down to one income at some point anyway — for example, those who want one spouse to stay home with a future family. Even if you don’t have plans to become single-income in the works, an accident or illness may make the decision for you, so it’s best to be prepared.
Strategy 5: Participate in Your Employer’s Retirement Plan
OK, this one is kind of a gimme, but it bears repeating. If your employer offers a 401(k) or similar retirement plan, you should be contributing! Saving for retirement is the ultimate form of paying yourself first.
The benefits are numerous. You may reduce your taxes in the here and now. You allow compound interest to work its magic on your behalf. If your employer offers a match, you literally get free money! I’m not seeing any downsides here.
Plus, participating in a retirement plan through your employer is another one-and-done method of saving. Rather than having to remember to do something every single month, you fill out the forms, turn them into HR, and — boom! — you’re providing for your future self. What could be simpler?
Further Reading
No matter what your age, you should make it a priority to develop a regular saving plan. Establishing this habit early can lead to increased financial security later in life. But even those of us who got a late start should do our best to pay ourselves first. I didn’t begin doing this until just a few years ago. Better late than never.
Though many personal finance books briefly explore the idea of paying yourself first, David Bach’s 2003 best-seller, The Automatic Millionaire is devoted exclusively to the subject. The entire book is a step-by-step guide to developing the saving habit and making it automatic. If you’d like more ideas about how to make this work in your life, this is the place to look. Any good public library will have a copy. Finally, here’s a recent Get Rich Slowly discussion about how much you should save for retirement.
Pay yourself first, my friends. It’s a habit that you will never regret.
Get Rich Slowly Philosophy
This is the fourth of a fourteen-part series that explores my financial philosophy. These are the core tenets of Get Rich Slowly. Other parts include:
If you haven’t started your children or teens off with a kids checking account optimized for their needs, you’ll want to help your college student open a checking account before they begin school.
Opening a checking account for your child can teach them about money management and financial responsibility, along with providing them an easy way to make debit card purchases. It’s never too late to get started.
One advantage to helping your young adult open their first student checking account is they have more options than they might have when they were 16 or younger. Students over 18 can open a bank account with few restrictions.
But choosing a student checking account may give them access to higher interest rates and added features and benefits, along with fee-free checking, no monthly maintenance fees, and no minimum deposit to open an account.
12 Best Student Checking Accounts
Not surprisingly, many of the best student checking accounts come from banks that also offer some of the best checking accounts for any age. However, the products below – in most cases – are tailored for young adults from the ages of 18 to 24, with the features this age group desires most, including an intuitive mobile app and low or non-existent minimum deposit requirements.
1. Best for Students under 18: Capital One MONEY Teen
Most of the student bank accounts on our list exclude children under the age of 17 or 18. Capital One MONEY Teen checking is available to children ages 8 and up. It comes with all the benefits and security of a big bank, providing peace-of-mind. This includes access to Capital One branches and Capital One Cafes for in-person service. This account also serves as a great tool to teach your young adult the basics of banking.
Capital One MONEY Teen checking is a joint account with no monthly fee, no overdraft fees, and access to 70,000 ATMs with no fees. Plus, earn 0.10% on all balances, including those in checking.
You can link Capital One MONEY Teen checking to any other bank account through any bank or neobank, making it easy to transfer money to your teen while they are away at college. Plus, you can keep tabs on their spending with their linked account in the Capital One mobile app.
When they graduate, your teen can hold onto their MONEY account or transfer the funds into a top-rated Capital One 360 Checking account of their own.
2. Best for Working Students: Chime
Chime is not a bank. It’s a financial technology company and mobile app backed by Stride Bank, NA, and The Bancorp Bank. Many features make it perfect for working students. First, you can receive your paycheck up to two days earlier than you might at other banks with ACH deposit.
Plus, you can set up automatic transfers to your linked Chime Savings account, helping you to establish good financial habits early on. Simply set up Chime to transfer a percentage of your paycheck into your Savings Account every time you receive a direct deposit.
When you use your debit card for purchases, the “Save When You Spend” program rounds up your purchase and transfers the difference directly into savings. That small change can really add up, whether you’re saving for your first apartment after college, a new car, or your next tuition bill.
For working students looking to build their credit, Chime gives account holders access to a Credit Builder Secured Visa, with no annual fee, no credit check, and no security deposit required. Instead, the credit account is secured by your Chime checking account with monthly direct deposits.
Like many of the best student bank accounts on this list, Chime has no overdraft fee, no monthly service fee, no ATM fee for in-network ATMs, and no minimum balance requirements.
3. Best Account Opening Bonus: Chase College Checking
Chase Bank has been handing out student account opening bonuses like they hand out lollipops at their branches lately. College students ages 17 to 24 can snag a $100 bonus when they open an account online or at a local branch (students age 17 will need to visit a branch). You’ll just need to make 10 qualifying transactions within the first 60 days of opening the student bank account.
What’s a qualifying transaction? Virtually anything, according to the Chase website, including debit card purchases, online bill payments, Chase QuickDeposits, Zelle transfers, and ACH credits. Bank as you normally would, and you should easily earn that $100.
In addition to the generous sign-up bonus, Chase College Checking has no monthly fees for college students for up to five years, access to 16,000 ATMs and 4,700 branches across the U.S., and zero liability protection for unauthorized debit card purchases.
Chase Overdraft Assist covers purchases that exceed your account balance. You’ll pay no overdraft fee if you’re overdrawn by $50 or less at the end of the next business day.
4. Best for Yield: Ally Interest Checking
Ally Bank is the first bank on our list not designed specifically for students, but the vast array of features in this interest bearing checking account makes it ideal for young adults.
Ally Bank offers an APY of 0.25% on checking account balances and 4.00% APY on balances in a linked Ally Bank savings account. Neither account has any monthly fees.
Ally offers several features to help those on a tight budget manage their money. You can organize your money into spending and saving buckets, which can help you see exactly where your money goes each month. Ally will also review your bank accounts and help you find opportunities to save, and shuttle that extra money into your high yield Ally savings account.
Customers who have deposited $100 or more into their Ally checking account, or $250 via direct deposit, gain access to Ally’s CoverDraft service after 30 days. This protection covers up to $100 or $250 in charges that would overwise overdraft your account. Some purchases, including Zelle transfers, or ATM withdrawals, may be declined if they would put your account into overdraft.
Ally has no monthly maintenance fee, no overdraft fees, no ATM fee for in-network ATM transactions and no minimum balance requirement.
5. Best for Referrals to Earn Extra Cash: GO2bank
GO2bank, the digital bank associated with the top financial technology company Green Dot, offers an easy, straightforward money account with overdraft protection up to $200 with eligible direct deposits. The linked savings account pays a high 4.5% APY, with no fees for qualifying customers and no minimum balance requirement.
You can get regular ACH deposits from your job or side gigs up to two days earlier than most traditional banks. If you receive government benefits, such as Social Security, you can receive those deposits up to four days early.
Your GO2bank account will have a monthly service fee that costs $5 per month, unless you have a qualifying direct deposit that month. You will also pay fees for transfers from a linked debit card from another bank or fintech, mobile check deposits, and cash deposits.
If you are the type of person with friends who come to you for advice, you can earn $50 for each friend you refer to GO2bank who signs up with direct deposit. Your friend will also earn $50. You can use this offer for up to 30 friends, yielding $1,500 annually. This makes a GO2bank account great for social media influencers or college students with a large friend group.
6. Best for Full-Service Banking: Bank of America Advantage SafeBalance Banking
Bank of America Advantage checking accounts offer options for people in various stages of their financial life. College students might be best to start out with Bank of America Advantage SafeBalance banking, a straightforward money account with no overdraft fee and no checks.
The account has no monthly fee for students under the age of 25 or customers under the age of 18. Preferred Rewards customers also receive free checking. There is a $25 minimum deposit to open an account.
New Bank of America customers can earn a $100 account opening bonus when they open an account and set up direct deposits of $1,000 or more within 90 days.
7. Best for Comprehensive Money Management: PNC Virtual Wallet Student
Money Magazine named the PNC Virtual Wallet on its best banks for students list three years running. PNC Bank divides this mobile account into three separate accounts for everyday spending, “reserve,” or short-term savings, and “growth” for long-term savings.
The account has no monthly service fee for students for up to six years, along with all the benefits of a regular PNC Virtual Wallet. Additionally, students receive a courtesy refund of your first overdraft fee on your Spend account, one free incoming domestic or international wire transfer per statement period, and free paper statements if you opt in to receive them.
Once six years have passed or you are no longer a student, your account converts into a regular PNC Virtual Wallet, which may have associated monthly fees. Check the PNC website at that time to determine the fees and how you can waive them.
Your PNC Virtual Student Wallet pays a 0.01% APY on money in your Reserve account, and .02% on account balances up to $2,499 in your Growth account, with .03% APY on balances over $2,500. These may not be the best rates available, but the reputation of PNC Bank, along with the money management features in a Virtual Wallet Student account, make this an account worth considering for students just learning to budget.
8. Best for Establishing Savings Habits.: Wells Fargo Clear Access Banking
As one of the Big Four banks in the U.S., Wells Fargo offers a reliable and safe place to store your money, plus access to thousands of branches nationwide.
The Wells Fargo Clear Access banking account is great for teens and college students, since it’s available for account holders ages 13 to 24. Anyone under the age of 18 will need to open their account in a branch and anyone younger than 17 must have an adult aged 18+ as a joint account holder. The account has no monthly maintenance fee for anyone 24 or younger. A $25 minimum opening deposit is required.
Wells Fargo Clear Access banking is a simple, straightforward money account with no checks and personalized service at Wells Fargo branches. There are no overdraft fees with the account, but also no overdraft protection. Transactions that exceed the account or minimum balance amount will be declined, which helps put teens and young adults in charge of their money.
You can link your Clear Access bank account to a Way2Save Savings account and earn a 0.15% APY. You can establish good money habits by setting up automatic savings. Wells Fargo will transfer $1 from your Clear Access account into your checking account each time you use online bill pay or use your debit card for a one-time purchase. You can also transfer as little as $25 per month or $1 per day into your account to see your savings grow even faster.
9. Best for Cash Back: Discover Cashback Debit
The Discover Cashback Debit account may not be marketed to teens and students, by name. But, it’s enticing to anyone looking for a standard checking account with no monthly service fees and 1% cashback on debit card purchases, up to $3,000 per month. It’s highly unlikely for most college students to max out that free money (unless they are putting housing, tuition, and car expenses on their card).
Discover Cashback! debit card offers many of the benefits you’d expect from these top-rated money accounts, including early direct deposit, 60,000+ no-fee ATMs, and overdraft protection from your linked Discover Savings with no fees. Discover charges no fees for insufficient funds, bank checks, regular checks, or expedited delivery of a replacement debit card.
These features make it one of the most convenient accounts you can hold. Plus, you don’t have to worry about “aging out” of the account and facing fees for a non-student bank account. Your Discover Cashback Debit account will be free no matter your age. Link it to a Discover Savings Account to earn 4.0% APY with no minimum deposit required.
10. Best for Unlimited Out-of-Network ATM Fee Reimbursement – Axos Bank Rewards Checking
Another bank account not marketed to students but meeting all their needs is the Axos Bank Rewards Checking account. This account has no monthly fees. It also reimburses ATM fees for out-of-network ATMs nationwide, which is great for students who travel domestically or who don’t have ATMs in their network on campus.
Pay no overdraft fee or non-sufficient funds fees with this account. Best of all, earn an APY of 0.40% on your checking balance if you receive monthly direct deposits of $1,500-plus. Young investors can ramp up their interest rate by 1% with an average daily balance of $2,500 in an Axos Invest Managed Portfolio Account, plus another 1% by holding $2,500 in a self-directed trading account. If you take out a loan through Axos, you can add another 0.60% to your APY.
College students likely won’t regret opening an Axos Bank account to take them through adulthood, especially with options for investing, low mortgage rates, car loans, and more.
Plus, earn a welcome bonus when you open an account and have direct deposits of at least $1,500 within a single calendar month during the first three months of account opening.
11. Best Credit Union: Alliant Credit Union Teen Checking
Alliant Credit Union offers a teen checking account for minors ages 13 to 17. The account is insured up to $250,000 per account holder by the National Credit Union Administration (NCUA). The adult account holder must be an Alliant Credit Union member. But it’s easy to join by depositing $5 into an Alliant Credit Union saving account. Alliant Savings earns an APY of 0.25%.
The teen checking account has no overdraft fees or non-sufficient funds fee. It also has no monthly fees or minimum balance requirements. Account holders gain access to 80,000+ fee free ATMs nationwide plus $20 per month in ATM fee reimbursement for out-of-network ATM use. This is an interest earning checking account which also pays 0.25% APY on all balances as long as you have at least one deposit, via ACH direct deposit, mobile check deposit, or transfer from another bank or credit union, each month.
12. Best for Young Shoppers: Varo Bank
Varo Bank is another account not necessarily marketed to college students but definitely optimized for their needs. The Varo Bank debit card delivers up to 6% cash back, with money deposited into your Varo account as soon as you accrue $5 in rewards.
Like many of the best student accounts on this list, Varo has no monthly fee, no minimum balance requirements, and no overdraft fee. If you need money before payday, you can use Varo Advance, an interest-fee program that allows you to borrow up to $250 and pay it back within 30 days. You will not pay fees to borrow less than $20. Borrowing up to $250 comes with fees that can be as high as $15, depending on the amount of cash advance you need.
Varo Bank uses the Allpoint network of ATMs, with fee free access to 55,000+ ATMs nationwide. Using other bank ATMs could result in charges up to $3 from Varo and fees charged by the other banks, as well.
It pays to open a linked Varo Bank savings to take advantage of a high 3% APY. Account holders with direct deposits equal to $1,000 per month and a positive balance in their Varo checking and savings can earn up to 4% APY.
One of the best things about a Varo account is it can grow with you. You won’t pay additional fees as an adult out of college, so you can keep the same bank account you started with for your entire life if you want.
Methodology: How We Select the Best Student Checking Accounts
To find the best student checking accounts, we evaluated the monthly maintenance fees, ATM fees, minimum deposit requirements, features, benefits, banking services provided, along with customer service and mobile app access at several of the biggest and most well-known banks and credit unions.
ATM Network
Most banks have ATM networks or partner ATM networks of 20,000 or more ATMs nationwide where you can use your debit card with no ATM fees. You might be surprised to learn that even online banks and financial technology companies that are not a bank provide access to thousands of ATMs nationwide through partner programs.
Nationwide availability (physical locations or mobile access)
College students often split time between their college campus and the home where they grew up. Finding a bank with physical locations in the areas they live or an online bank that provides a mobile banking app with fee free mobile banking from anywhere is important.
Fees and minimum requirements
Bank fees no longer have to be a way of life for today’s young adults. We chose financial institutions with no monthly maintenance fees or easy ways to waive maintenance fees.
Benefits such as high APY, cash-back rewards, or other additional perks
Student checking accounts today are more than just “bare bones” places to store your cash. Many student bank accounts offer perks, benefits, and high-yield savings or an interest bearing checking account to provide added value.
Overdraft fees
Cash management mistakes happen, especially when young adults first start learning to budget and manage their finances. Many banks have no overdraft fees and some offer overdraft protection to help out in a pinch.
How to Choose the Best Bank for College Students
We’ve offered 12 solid options to help you choose the best student checking account. Before you open a student bank account, it’s a good idea to think about what you need in your primary checking account and a linked savings.
The list below makes it easy to review your must-haves and nice-to-haves when you choose your first bank account as a college student.
Best student checking account interest rates
If you’re looking to earn interest on your standard checking account, many banks offer this feature. Review annual percentage yield (APY) figures for your top choices.
Remember, a higher savings interest rate might benefit you more, since money in your checking account tends to fluctuate based on paychecks, bills, and expenses. The best checking account may not pay interest, but can save you money in other ways.
Annual Percentage Yield (APY)
Likewise, you can put money in your pocket with an account with linked savings offering a high annual percentage yield (APY).
Mobile Check Deposit
If you get paid via paper checks, you’ll want to find an account with a mobile app that offers mobile check deposit. Find out how fast deposits clear, and if mobile banking services are fee free.
No Monthly Maintenance Fees
Many banks today make it easy to find a free checking account with no maintenance fees. If you have to pay a monthly maintenance fee, find out exactly what you’re getting for your money. Find out if the perks and benefits, such as a cash back debit card or reimbursement of ATM fees make the maintenance fees worthwhile.
Minimum Deposit and Minimum Balance Requirements
When you’re just getting started, cash may be tight. It’s important to find an account with no minimum deposit to open.
Banking Services Provided
Accounts should have customer service online, by phone or in branches, plus an easy-to-use mobile app and a debit card with no ATM fees.
FAQs About Student Checking Accounts
Read what people are asking about the best student checking accounts, including minimum deposit requirements and benefits of a student checking account.
What are the benefits of a student bank account?
A bank account tailored for students gives young adults a head start on their financial future and learning how to manage money. For students who work, they can receive direct deposits in their student account, pay bills online, and send money to friends and family using Zelle.
How to get a student checking account bonus?
Several student checking accounts, including Chase, provide sign-up bonuses. Make sure to read the fine print and complete the requirements, which may include setting up direct deposit or making a minimum opening deposit, to collect the bonus.
Can I open a student checking account without a deposit?
To open a student checking account without a minimum deposit amount, simply look for a bank account, like Varo, that has no minimum opening deposit.
Are there any downsides to opening a student checking account?
When you open a student checking account, you’ll want to make sure you won’t pay monthly maintenance fees. Some student checking accounts convert to a regular account once the student graduates, and there may be fees associated with the regular account.
Is there an age limit on a student checking account?
Most student checking accounts are open to students from the age of 18 to 24 without a joint account holder. Customers under the age of 18 may be able to open an account with a joint owner.
Can minors open student checking accounts?
Accounts like Capital One Money Teen are available to children ages 8 and up with a joint account holder. Some other accounts require students to be 18 or older.
What happens to your student checking account when you graduate?
Many of the student bank accounts on this list won’t change when you graduate college. Others offer the option to convert your account to one of the bank’s regular checking products. A Chase College Checking Account has no monthly fees for your first five years in college, but if you graduate or exceed that time frame, you might pay a $6 monthly maintenance fee unless you meet other requirements.
Once seen as the death knell for single-family-home neighborhoods in California, a new law meant to create more duplexes has instead done little to encourage construction in some of the largest cities in the state, according to a new report published Wednesday.
Senate Bill 9 was introduced two years ago as a way to help solve California’s severe housing crunch by allowing homeowners to convert their homes into duplexes on a single-family lot or divide the parcel in half to build another duplex for a total of four units. The law went into effect at the start of 2022.
The bill received bipartisan support and ignited fierce debate between its backers, who said SB 9 was a much-needed tool to add housing options for middle-income Californians, and critics, who blasted it as a radical one-size-fits-all policy that undermined local government control.
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Neither argument has so far proved to be true.
Across 13 cities in the state, SB 9 projects are “limited or nonexistent,” according to a new study by the UC Berkeley Terner Center for Housing Innovation.
The report focused on cities considered high-opportunity areas for duplexes because they’ve reported significant increases in the construction of accessory dwelling units — also known as granny flats, casitas or ADUs — in recent years and have available single-family properties for possible divided lots. ADUs are small, free-standing homes most often built in the backyards of existing single-family homes.
The cities are Anaheim, Bakersfield, Berkeley, Burbank, Danville, Long Beach, Los Angeles, Sacramento, San Diego, San Francisco, San Jose, Santa Maria and Saratoga.
By the end of November, the cities had collectively received 282 applications for SB 9 projects, and had approved only 53. Los Angeles accounted for the bulk of applications with 211 submitted and 38 approved, according to the report. San Francisco received 25 applications and had approved four, while San Diego received seven and had approved none.
Three cities received one application, and in Bakersfield, Danville and Santa Maria, zero were submitted.
Applications for dividing lots seem to be even less popular than for building duplexes. Just 100 applications were submitted, the report noted, and 28 had been approved.
David Garcia, Terner Center’s policy director, said SB 9 is only in its first year of implementation and should be given more time before it’s judged as ineffective. But he added that lawmakers should consider whether the law needs tweaking.
“It doesn’t seem like Senate Bill 9 in its first year has resulted in very meaningful amounts of new housing,” Garcia said. “Pretty much everywhere you look, Senate Bill 9 activity is very marginal. It is nonexistent in some places.”
Homeowners right now have an easier time building an ADU than a duplex, thanks to local and state laws that have eased barriers to construction in recent years, Garcia said. It took multiple rounds of legislation to see productive ADU development, and the same will probably be true for SB 9 projects, he said.
Recognizing that more was needed to speed up housing construction in California, the Legislature began overhauling state ADU laws in 2016, and cities followed suit with their own local ordinances to clear red tape in the building process, which has inspired a widespread ADU movement.
Between the start of 2017 and January 2023, the city of Los Angeles reported receiving 35,098 applications for ADUs. It has issued permits for 25,881 and 13,640 have been granted certificates of occupancy.
Heidi Vonblum, San Diego’s planning director, said the law is new and barriers to development are still being worked out. At the same time, the city has an ADU program that “has been very attractive to property owners,” Vonblum said, while updated zoning rules and community plans have eliminated “the need to rely on other programs.”
It’s a similar situation in Sacramento, where homeowners are allowed to build up to two ADUs on their properties, said Kevin Colin, the city’s zoning administrator. Colin’s team handles one to two ADU applications “each working day,” he said, because there’s such high interest in the projects.
To replicate that success, the Terner Center report suggested cutting fees associated with new duplex development, or adding more uniform standards for SB 9 projects to ensure local governments can’t attach subjective criteria that discourage applications, such as architectural design requirements or stringent landscaping rules. It also proposed revising a mandate that homeowners who split their lots must live in one of the units for at least three years, a key concession lawmakers made to reduce opposition from organizations worried about gentrification.
Senate President Pro Tem Toni Atkins (D-San Diego), author of the legislation, said SB 9 was “never intended to be an overnight fix to our housing shortage.”
“We always said not every homeowner would be able, or want, to utilize the tools provided by the bill on Day One,” Atkins said in a statement. “Subdividing a lot, or even just adding an ADU, is a big investment. This bill was never intended to be a sledgehammer approach — it was meant to increase the housing supply over time, and as awareness of the law increases and more homeowners have the ability to embrace the tools, I’m confident that we will see results.”
Garcia and other housing experts said slow progress could also be attributed to the effects of the COVID-19 pandemic, when prices for building materials shot up and homeowners and buyers faced significant market uncertainty. That was followed by high inflation and interest rates.
But other factors could be contributing to sluggish SB 9 interest.
Matthew Lewis, spokesperson for California YIMBY, a housing advocacy organization that supported SB 9, said both ADUs and duplexes have their financial and logistical pros and cons.
ADUs are an ideal way to generate some “passive income” from a renter, Lewis said, and make great homes for aging parents or young adult children. Duplexes are good for that too, but the additional units can be sold separately for even greater economic opportunity.
On the other hand, ADUs are typically a property extension of the main home, so it can be difficult or even impossible to separately sell the extra unit. Duplexes require significantly more financing, and the addition of a separate sewer line and water service.
“The reality is people will follow the path of least resistance to building the house they want,” Lewis said, adding that it could be worth going back to the drawing board to ensure local governments are doing what they can to ease burdens to duplex development.
Although the Terner Center report offers legislators a limited snapshot of how SB 9 has worked so far, the state is also expected to have more robust data available this summer.
Any attempt to modify SB 9 this year, however, is sure to reignite opposition from many of the dozens of cities and neighborhood associations that tried to block its passage in 2021. Since then, some cities have gone to great lengths to avoid implementing the law, including the Silicon Valley suburb of Woodside, which declared itself a mountain lion sanctuary and invited a stern warning for compliance by the state attorney general’s office.