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How to Build Good Credit in 10 Painless Steps
If you want to whip your finances into shape, hereâs a good New Yearâs resolution: improving your credit score.
A lot of New Yearâs resolutions fail because theyâre so extreme. Think of all the bonkers weight-loss and money-saving goals that surface at the start of every year.
This resolution is different. No extreme measures are required. But there arenât any shortcuts. Building good credit is a goal you need to commit to 12 months a year.
How to Build Good Credit in 10 Steps
Ready to make 2021 the year you finally prove your creditworthiness? Or are you looking to recover from a 2020 setback? Hereâs how to build good credit in 10 steps.
1. Stay on Top of Your Credit Reports
Itâs essential to monitor your credit reports, especially if you received a hardship agreement from a lender due to COVID-19. Under the CARES Act rules, lenders are supposed to report your account as paid in full while the agreement is in effect, as long as you werenât already delinquent. But mistakes happen. Even in normal times, about 1 in 5 credit reports contained inaccurate information.
Through April 2021, you can get one free credit report per week from each bureau. (Typically, youâre only entitled to one free credit report per year from each bureau.) Make sure you access your reports at AnnualCreditReport.com, rather than one of the many websites that offer âfreeâ credit scores but will make you put down your credit card number to sign up for a trial. File a dispute with the bureaus if you find anything you think is inaccurate or any accounts you donât recognize.
Your credit reports wonât show you your credit score, but you can use a free credit-monitoring service to check your score. (No, checking your own credit doesnât hurt your score.) Many banks and credit card companies also give you your credit scores for free.
If the bureaus agree to remove information from your credit reports, expect to wait about 30 days until your reports are updated.
2. Pay Your Bills. On Time. Every Single Month
Yeah, you knew we were going to say this: Paying your bills on time is the No. 1 thing you can do to build good credit. Your payment history determines 35% of your score, more than any other credit factor.
Set whatever bills you can to autopay for at least the minimums to avoid missing payments. You can always pay extra if you can afford it.
A strong payment history takes time to build. If youâve made late payments, theyâll stay on your credit reports for seven years. The good news is, they do the most damage to your score in the first two years. After that, the impact starts to fade.
3. Establish Credit, Even if Youâve Made Mistakes
You typically need a credit card or loan to build a credit history. (Sorry, but all those on-time rent and utility payments are rarely reported to the credit bureaus, so they wonât help your score.)
But if you have bad credit or youâre a credit newbie, getting approved for a credit card or loan is tough. Look for cards that are specifically marketed to help people start or rebuild credit. Store credit cards, which only let you make purchases at a specific retailer, can also be a good option.
4. Open a Secured Card if You Donât Qualify for a Regular Card
Opening a secured credit card is one of our favorite ways to build a positive history when you canât get approved for a regular credit card or loan. You put down a refundable deposit, and that becomes your line of credit.
After about a year of making your payments on time, youâll typically qualify for an unsecured line of credit. Just make sure the card issuer you choose reports your payments to the credit bureaus. Look for a card with an annual fee of no more than $35. Some secured card options we like (and no, weâre not getting paid to say this):
- Discover it Secured
- OpenSky Secured Visa Card
- Secured Mastercard from Capital One

5. Ask for a Limit Increase. Pretend You Never Got It
Increasing your credit limits helps your score because it decreases your credit utilization ratio. Thatâs credit score speak for the percentage of credit youâre using. The standard recommendation is to keep this number below 30%, but really, the closer to zero the better.
If you have open credit, ask your current creditors for an increase, rather than applying for new credit. That way, youâll avoid lowering your length of credit, which could ding your score.
The downside of a higher credit limit: Youâll have more money to spend that isnât really yours. To get the biggest credit score boost from a limit increase and avoid paying more in interest, make sure you donât add to your balance.
Donât believe the myth that carrying a small credit card balance helps your credit score. Paying off your balance in full each month is best for your score, plus it saves you money on interest.
6. Prioritize Credit Card Debt Over Loans
Tackling credit card debt helps your credit score a lot more than paying down other debts, like a student loan or mortgage. The reason? Your credit utilization ratio is determined exclusively by your lines of credit.
Bonus: Paying off credit card debt first will typically save you money, because credit cards tend to have higher interest rates than other types of debt.
7. Keep Your Old Accounts Active
Provided you arenât paying ridiculous fees, keep your credit card accounts open once youâve paid off the balance. Credit scoring methods reward you for having a long credit history.
Make a purchase at least once every three months on the account, as credit card companies often close inactive accounts. Then pay it off in full.
8. Apply for New Credit Selectively
When you apply for credit, it results in a hard inquiry, which usually drops your score by a few points. So avoid applying frequently for new credit cards, as this can signal financial distress.
But if youâre in the market for a mortgage or loan, donât worry about multiple inquiries. As long as you limit your shopping to a 45-day window, credit bureaus will treat it as a single inquiry, so the impact on your score will be minimal.
9. Still Overwhelmed? A Debt Consolidation Loan Could Help
If youâre struggling with credit card debt, consolidating your credit card debt with a loan could be a good option. In a nutshell, you take out a loan to wipe out your credit card balances.
Youâll get the simplicity of a single payment, plus youâll typically pay less interest since loan interest rates tend to be lower. (If you canât get a loan that lowers your interest rate, this probably isnât a good option.)
By using a loan to pay off your credit cards, youâll also free up credit and lower your credit utilization ratio.
Many debt consolidation loans require a credit score of about 620. If your score falls below this threshold, work on improving your score for a few months before you apply for one.
10. Keep Your Credit Score in Perspective
All the credit-monitoring tools out there make it easy to obsess about your credit score. While itâs important to build good credit, look at the bigger picture. A few final thoughts:
- Your credit score isnât a report card on the state of your finances. It simply measures how risky of a borrower you are. Having an emergency fund, saving for retirement and earning a decent living are all important to your finances â but these are all things that donât affect your credit score.
- Lenders look at more than your credit score. Having a low debt-to-income ratio, decent down payment and steady paycheck all increase your odds of approval when youâre making a big purchase, even if your credit score is lackluster.
- Donât focus on your score if you canât pay for necessities. If youâre struggling and you have to choose between paying your credit card vs. paying your rent, keeping food on the table or getting medical care, paying your credit card is always the lower priority. Of course, talk to your creditors if you canât afford to pay them, as they may have options.
Focus on your overall financial picture, and youâll probably see your credit score improve, too. Remember, though, that while credit scores matter, you matter more.
Now go crush those goals in 2021 and beyond.
Robin Hartill is a certified financial planner and a senior editor at The Penny Hoarder. She writes the Dear Penny personal finance advice column. Send your tricky money questions to DearPenny@thepennyhoarder.com.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
Source: thepennyhoarder.com
Mint Money Audit 6-Month Check-In: How Did Michelle Allocate Her Windfall?
In March I offered some financial advice to Michelle, a Mint user who was struggling with debt, a lack of retirement savings and a bit of family financial drama amongst her siblings.
Michelle was anticipating a cash bonus from her company and wasnât sure if she should save the money or use it to relieve her debt.
I recommended a two-prong approach where she uses the cash to play savings catch-up in her retirement account and knock down some of her debt, which, at the time, included a $3,000 credit card balance and $52,000 in student loans.
Six months later, Iâve checked in with the 38-year-old real estate developer, to see if any of my advice was helpful and if sheâs experienced any shifts in her financial life.
We spoke via email:
Farnoosh: Have your finances have improved over the last 6 months since we last spoke? If so, what has been the biggest improvement?
Michelle: Yes. I’ve aggressively been contributing to my 401(k) â about 50% of my pay – and had hoped to reach the annual maximum of $18,000 by June, but looks like it will be more like October. I also received a $40,000 distribution from a project that I closed.
F: What aspects of your financial life still challenge you?
M: Investing for sure. I never know if I’m hoarding too much cash. I am truly traumatized from the financial downturn. I just joined an online investment platform, but it was also overwhelming. Currently I have $45,000 in a regular savings account that earns 1.5%.
Another challenge is not knowing whether to just bite the bullet and pay off my student loans or to continue to pay them monthly.  I hate that I’m still paying loans 16 years after I graduated and it’s a source of frustration [and embarrassment] for me.  I owe $36,000. Often times I have an inner monologue about the pros and cons of just paying them off but then my trauma from 2008 kicks inâ¦and I decide to keep my $45,000 nest egg safely where I can check the balance daily.
F: I recommended allocating $45,000 towards retirement. Was that helpful? What are some ways you’ve managed to save?
M: Yes, I recall you saying you recommended having a total of $100,000 towards retirement for a person my age. Currently, I have $51,000 in my 401(k), $35,000 in a traditional IRA and $17,000 in my Ellevest brokerage account, so I’ve broken the $100,000 goal.
I did add a car note to my balance sheet. My old car suffered a total loss (major electrical failure due to a sunroof leak!) and the insurance gave me a check for $9,000. I used it all towards the new vehicle (a certified used 2014 Acura) and I’m financing $18,000.
F: Your dad’s home was a source of financial stress, it seemed. Were you able to talk with your siblings and arrive at a better place with that?
M: My dad actually has passed since we last spoke. He passed in February and so his will went to probate. My siblings and I have decided not to make any decisions about the house for at least one year. Yes, this is kicking the can further down the street however, they recognize that I maintain the house and pay the real estate taxes and so they are not pressuring me to move or to sell.
The new deed has been recorded and the property is under all our names and so everyone seems ok with knowing that I can’t do anything regarding a sale or refinance unilaterally.
So, for now, I live rent free other than paying utilities, miscellaneous maintenance on the house and real estate taxes quarterly. This, too, is helping me save aggressively.
Also, the new car note has replaced the hospice nurse contribution so I’m not feeling that my budget is overburdened with the new car.
I think ultimately I will buy out at least two of my siblings and stay in the house. Verbally they have expressed being okay with this.
Have a question for Farnoosh? You can submit your questions via Twitter @Farnoosh, Facebook or email at farnoosh@farnoosh.tv (please note âMint Blogâ in the subject line).
Farnoosh Torabi is Americaâs leading personal finance authority hooked on helping Americans live their richest, happiest lives. From her early days reporting for Money Magazine to now hosting a primetime series on CNBC and writing monthly for O, The Oprah Magazine, sheâs become our favorite go-to money expert and friend.
The post Mint Money Audit 6-Month Check-In: How Did Michelle Allocate Her Windfall? appeared first on MintLife Blog.
Source: mint.intuit.com
What Are Mutual Funds? Understanding The Basics
If you’re one of those investors with very little time to research and invest in individual stocks, it might be a good idea to look into investing in mutual funds.
Whether your goal is to save money for retirement, or for a down payment to buy a house, mutual funds are low-cost and effective way to invest your money.
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What is a mutual fund?
A mutual fund is an investment vehicle in which investors, like you ad me, pool their money together. They use the money to invest in securities such as stocks and bonds. A professional manages the funds.
In addition, mutual funds are cost efficient. They offer diversification to your portfolio. They have low minimum investment requirements.
These factors make mutual funds among the best investment vehicles to use. If you’re a beginner investor, you should consider investing in mutual funds or index funds.
Investing in the stock market in general, can be intimidating. If you are just starting out and don’t feel confident in your investing knowledge, you may value the advice of a financial advisor.
Types of mutual funds
There are different types of mutual funds. They are stock funds, bond funds, and money market funds.
Which funds you choose depends on your risk tolerance. While mutual funds in general are less risky than investing in individual stocks, some funds are riskier than others.
However, you can choose a combination of these three types of funds to diversify your portfolio.
- Stock funds: a stock fund is a fund that invests heavily in stocks. However, that does not mean stock funds do not have other securities, i.e., bonds. It’s just that the majority of the money invested is in stocks.
- Bond funds: if you don’t want your portfolio to fluctuate in value as stocks do, then you should consider bond funds.
- Money market funds: money market funds are funds that you invest in if you tend to tap into your investment in the short term.
- Sector funds. As the name suggests, sector funds are funds that invests in one particular sector or industry. For example, a fund that invests only in the health care industry is a sector fund. These mutual funds lack diversification. Therefore, you should avoid them or use them in conjunction to another mutual fund.
Additional funds
- Index funds. Index funds seek to track the performance of a particular index, such as the Standard & Poorâs 500 index of 500 large U.S. company stocks or the CRSP US Small Cap Index. When you invest in the Vanguard S&P 500 Index fund, youâre essentially buying a piece of the 500 largest publicly traded US companies. Index funds donât jump around. They stay invested in the market.
- Income funds: These funds focus invest primarily in corporate bonds. They also invest in some high-dividend stocks.
- Balance funds: The portfolio of these funds have a mixed of stocks and bonds. Those funds enjoy capital growth and income dividend.
Related Article: 3 Ways to Protect Your Portfolio from the Volatile Stock Market
The advantages of mutual funds
Diversification. You’ve probably heard the popular saying “don’t put all of your eggs in one basket.” Well, it applies to mutual funds. Mutual funds invest in stocks or bonds from dozens of companies in several industries.
Thus, your risk is spread. If a stock of a company is not doing well, a stock from another company can balance it out. While most funds are diversified, some are not.
For example, sector funds which invest in a specific industry such as real estate can be risky if that industry is not doing well.
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Professional Management.
Mutual funds are professionally managed. These fund managers are well educated and experienced. Their job is to analyze data, research companies and find the best investments for the fund.
Thus, investing in mutual funds can be a huge time saver for those who have very little time and those who lack expertise in the matter.
Cost Efficiency. The operating expenses and the cost that you pay to sell or buy a fund are cheaper than trading in individual securities on your own. For example, the best Vanguard mutual funds have operating expenses as low as 0.04%. So by keeping expenses low, these funds can help boost your returns.
Low or Reasonable Minimum Investment. The majority of mutual funds, Vanguard mutual funds, for example, have a reasonable minimum requirement. Some funds even have a minimum of $1,000 and provide a monthly investment plan where you can start with as little as $50 a month.
Related Article: 7 Secrets Smart Professionals Use to Choose Financial Advisors
The disadvantage of mutual funds.
While there are several benefits to investing in mutual funds, there are some disadvantages as well.
Active Fund Management. Mutual funds are actively managed. That means fund mangers are always on the look out for the best securities to purchase. That also means they can easily make mistakes.
Cost/expenses. While cost and expenses of investing in individual stocks are significantly higher than mutual funds, cost of a mutual fund can nonetheless be significant.
High cost can have a negative effect on your investment return. These fees are deducted from your mutual fundâs balance every year. Other fees can apply as well. So always find a company with a low cost.
How you make money with mutual funds.
You make money with mutual funds the same way you would with individual stocks: dividend, capital gain and appreciation.
Dividend: Dividends are cash distributions from a company to its shareholders. Some companies offer dividends; others do not. And those who do pay out dividends are not obligated to do so. And the amount of dividends can vary from year to year.
As a mutual fund investor, you may receive dividend income on a regular basis.
Mutual funds offer dividend reinvestment plans. This means that instead of receiving a cash payment, you can reinvest your dividend income into buying more shares in the fund.
Capital gain distribution: in addition to receiving dividend income from the fund, you make money with mutual funds when you make a profit by selling a stock. This is called “capital gain.”
Capital gain occurs when the fund manager sells stocks for more he bought them for. The resulting profits can be paid out to the fund’s shareholders. Just as dividend income, you have the choice to reinvest your gains in the fund.
Appreciation: If stocks in your fund have appreciated in value, the price per share of the fund will increase as well. So whether you hold your shares for a short term or long term, you stand to make a profit when the shares rise.
Best mutual funds.
Now that you know mutual funds make excellent investments, finding the best mutual funds can be overwhelming.
Vanguard mutual funds.
Vanguard mutual funds are the best out there, because they are relatively cheaper; they are of high quality; a professional manage them; and their operating expenses are relative low.
Here is a list of the best Vanguard mutual funds that you should invest in:
- Vanguard Total Stock Market Index Funds
- Vanguard 500 Index (VFIAX)
- Total International Stock index Fund
- Vanguard Health Care Investor
Vanguard Total Stock Market Fund
If you’re looking for a diversified mutual fund, this Vanguard mutual fund is for you. The Vanguard’s VTSAX provides exposure to the entire U.S. stock market which includes stocks from large, medium and small U.S companies.
The top companies include Microsoft, Apple, Amazon. In addition, the expenses are relatively (0.04%). It has a minimum initial investment of $3,000, making it one of the best vanguard stock funds out there.
Vanguard S&P 500 (VFIAX)
The Vanguard 500 Index fund may be appropriate for you if you prefer a mutual fund that focuses on U.S. equities. This fund tracks the performance of the S&P 500, which means it holds about 500 of the largest U.S. stocks.
The largest U.S. companies included in this fund are Facebook, Alphabet/Google, Apple, and Amazon. This index fund has an expense ration of 0.04% and a reasonable minimum initial investment of $3,000.
Vanguard Total International Stock Market
You should consider the Vanguard International Stock Market fund of you prefer a mutual fund that invests in foreign stocks.
This international stock fund exposes its shareholders to over 6,000 non-U.S. stocks from several countries in both developed markets and emerging markets. The minimum investment is also $3,000 with an expense ratio of 0.11%.
Vanguard Health Care Investor
Sector funds are not usually a good idea, because the lack diversification. Sector funds are funds that invest in a specific industry like real estate or health care. However, if you want a fund to complement your portfolio, the Vanguard Health Care Investor is a good choice.
This Vanguard mutual fund offers investors exposure to U.S. and foreign equities focusing in the health care industry. The expense ration is a little bit higher, 0.34%. However, the minimum initial investment is $3,000, making it one of the cheapest Vanguard mutual funds.
Bottom Line
Mutual funds are great options for beginner investors or investors who have little time to research and invest in individual stocks. When you buy into these low cost investments, you’re essentially buying shares from companies.
Your money are pooled together with those of other investors. If you intend to invest in low cost investment funds, you must know which ones are the best. When it comes to saving money on fees and getting a good return on your investment, Vanguard mutual funds are among the best funds out there.
They provide professional management, diversity, low cost, income and price appreciation.
What’s Next: 5 Mistakes People Make When Hiring A Financial Advisor
Speak with the Right Financial Advisor
- If you have questions beyond knowing which of the best Vanguard mutual funds to invest, you can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc).
- Find one who meets your needs with SmartAssetâs free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.
*TOP CIT BANK PROMOTIONS* | ||
---|---|---|
PROMOTIONAL LINK | OFFER | REVIEW |
CIT Bank Money Market | 1.00% APY | Review |
CIT Bank Savings Builder | 0.95% APY | Review |
CIT Bank CDs | 0.75% APY 1 Year CD Term | Review |
CIT Bank No Penalty CD | 0.75% APY | Review |
The post What Are Mutual Funds? Understanding The Basics appeared first on GrowthRapidly.
Source: growthrapidly.com
20 Of The Best Entry Level Work From Home Jobs
Looking for entry level work from home jobs?
Are you wondering, “How can I work from home with no experience?”
I know it may seem like every job out there today requires several years of experience. This makes it very difficult to find a job, especially if you are brand new to the field and trying to get your start.
It can be difficult to find a way to make money from home when you are brand new, but it’s not impossible to find entry level work from home jobs.
Everyone has to start somewhere, and if you want to start working from home, then I have a great list of no experience work from home jobs for you to look into.
Now, just because these jobs, businesses, and ways to make extra money don’t require experience, it does not mean that they will be easy! Remember, good things don’t come easy.
You may have to learn a new skill, take a course, and so on.
Also, please remember that entry level means you are starting from the bottom and working up. That means it may take a while to establish yourself. Still, there is room to grow in many of these jobs.
What you’ll find in this list of entry level work from home jobs are new careers and businesses you can start without having a college degree or years of experience.
There are many ideas on this list that involve starting a freelance career by using existing skills, like if you have a good eye for spotting grammar and punctuation errors, then you may be interested in proofreading.
There are other ideas on this list that will require you to learn some new skills – all ones you can easily pick up online.
The most important part is that all of these jobs are 100% work from home ideas. Yes, these are all jobs you can work from the comfort of your own home, while you travel, etc.
Finding a work from home job can be a great way to make money.
After all, it’s what I do, and I love it!
And, there are so many different options depending on what you are looking for. You may be able to find entry level work from home jobs that are part time, full time, that work while you are traveling, and so on.
Plus, many of the entry level jobs from home on my list allow you to have a more flexible schedule, where you may be able to choose the days you work, your hours, and more.
So, if you are looking to start making extra money or if you want a new career path that lets you earn money from home, this list is especially for you.
Before you’re scared off by any of these ideas, please remember that you don’t need to be an expert in any of them right now. As with any new job, you learn as you go and can find training as well.
Related content on entry level work from home jobs:
- 12 Passive Income Ideas That Will Let You Enjoy Life More
- 15 Of My Best Working From Home Tips So You Can Succeed
- 15 Outdoor Jobs For People Who Love Being Outside
- 15 Home Business Ideas & The Free Courses You Need To Get Started
Below are 20 entry level work from home jobs.
1. Create a blog to earn an income.
If you’re looking to work from home, I recommend that you think about starting a blog.
You don’t need previous experience, and most bloggers are brand new to blogging anyways!
I was brand new when I started my blog many years ago, and I learned everything I know along the way.
I read lots of online articles written by other bloggers who were once in the same spot I was, and I have also taken several great courses to help me improve my blog over the years.
I created Making Sense of Cents in 2011, and since then, I have earned over $5,000,000 from my blog.
Blogging allows me to travel full-time, have a flexible schedule, and I earn a great income doing it.
My blog was created on a whim as a way to track my own personal finance progress. When I first started my blog, I honestly had no clue what I was doing. I didn’t even know that people could make money blogging!
One of the reasons that blogging is one of the best entry level work from home jobs is because blogging is quite affordable to start.
You can easily learn how to start a blog with my free How To Start a Blog Course.
Here’s a quick outline of what you will learn:
- Day 1: Reasons you should start a blog
- Day 2: How to determine what to blog about
- Day 3: How to create your blog (in this lesson, you will learn how to start a blog on WordPress – my tutorial makes it very easy to start a blog)
- Day 4: How to make money blogging
- Day 5: My tips for making passive income from blogging
- Day 6: How to grow your traffic and followers
- Day 7: Miscellaneous blogging tips that will help you be successful
2. Sell items through Amazon.
Yes, you read that correctly. You can sell items on Amazon while working from home.
Even if you have no experience, you can earn money selling all kinds of items on Amazon, from books, work out equipment, electronics, and more.
Amazon has many people who sell items and earn money from home. Most have no experience selling things online or have ever worked at Amazon.
Jessica Larrew, of The Selling Family, is a friend of mine, and she and her family started selling things on Amazon FBA a few years ago without any experience – they made over $100,000 profit in their first year! And, they were working less than 20 hours a week total.
Jessica now has a FREE 7 day course that will teach you everything you need to know in order to start selling on Amazon. I recommend signing up for it now!
I interviewed Jessica in How To Work From Home Selling On Amazon FBA, and we talk about:
- How Jessica started selling on Amazon FBA
- What exactly Amazon FBA is
- How to choose what to buy and sell
- How much a person can expect to earn
- The positives of selling on Amazon, and more
3. Teach English online.
This one will probably surprise you, but there are entry level work from home jobs where you teach English to kids in other countries. You don’t need to have been a teacher or speak a language other than English.
The requirements are that you have experience working with kids. That can include mentoring, tutoring, coaching, babysitting, or being a parent.
That’s a pretty easy requirement, though!
You can typically earn around $14 to $22 per hour by teaching English online.
Learning how to teach English online has become extremely popular, making it one of the best online jobs from home for many good reasons – it’s flexible, there’s a high need for teachers, and it pays pretty well.
My top three picks are ones my readers have recommended and ones I have researched:
- VIPKID
- Qkids
- Education First
Learn more at Make Extra Money By Learning How To Teach English Online.
4. Tutor from home.
To go along with the above, you can also work from home as an online tutor.
Course Hero is a website that has entry level work from home jobs where you help high school and college students with course-specific questions.
Course Hero was founded in 2007 and is an online learning website where students can find tutors and search by their specific school to find study guides, videos, practice problems, class notes, and step-by-step explanations.
Using the website, students connect with Course Hero tutors on a wide range of subjects and classes, which makes this a great option for people with different educational backgrounds and experience.
What might surprise you to learn is that you don’t need to have experience as a tutor, professor, or teacher in order to become a Course Hero tutor.
However, you will need to share information that proves you have expertise in the subjects you would like to help students with, such as degrees or previous work history.
Tutors earn an average of $3 for each question they answer on Course Hero. Earning between $12-$20 per hour, Course Hero tutors earn an average of $300 a week.
Here’s how this online tutoring job work:
- You apply here to become a Course Hero tutor
- When you are available to answer questions, you do so on the Course Hero website
- You get paid
Learn more at How To Make $300+ Weekly As An Online Tutor With Course Hero.
5. Become a virtual assistant.
Several years ago, I was a virtual assistant.
I had no previous experience, and I simply learned skills as I worked.
Virtual assisting is a field that is growing a lot, and there are lots of entry level work from home jobs as a virtual assistant.
Virtual assistant (VA) tasks may include social media management, formatting and editing content, scheduling appointments or travel, email management, and more. Basically, you can get paid to do any task that needs to be done in someone’s business, but doesn’t need to be done by them.
My friend Kayla is a full-time blogger, virtual assistant, and project manager who earns over $10,000 per month while working from home. She is also the founder of $10K VA, a course where she teaches exactly how you can make a consistent $10,000 per month as a virtual assistant!
Kayla used to work a full-time job as a credit analyst, earning about $2,000 per month. She was struggling to make ends meet while paying off debt, so she started a side hustle as a virtual assistant.
I interviewed her at How Kayla Earns $10K/Month From Home as a Virtual Assistant, and we talk about:
- The amount of money a beginner virtual assistant can expect to earn
- How to find your first virtual assistant job
- The steps to become a virtual assistant without previous experience
- Her best tips for being a virtual assistant
And more!
6. Evaluate Google’s search engine results.
A Search Engine Evaluator (also known as a Google Rater) is where you rate websites based on their quality and usefulness.
You are rating websites to help Google improve their search engine results.
This is one of the entry level work from home jobs that almost anyone can do – you don’t need to be a technical person in order to make money as a search engine evaluator.
Another great positive is that you can work in the language of your country, as Google operates in nearly every country around the world.
Learn more at How To Become a Search Engine Evaluator.
7. Manage Facebook advertising for small businesses.
Did you know that you can make a living from Facebook? With Facebook advertising, you can help businesses expand their reach.
And, yes, this is a skill that you can learn!
Last year, business owners spent over $88,000,000 per day on Facebook ads. This is expected to continue to grow, and it is one of the largest advertising spaces that exists.
My blogging friend Bobby Hoyt knows a lot about this topic. Bobby is a former high school teacher who paid off $40,000 of student loan debt in a year and a half. He learned how to run Facebook ads on his own to earn extra money. Bobby now runs the personal finance blog Millennial Money Man full-time, as well as a digital marketing agency for local businesses that he started in 2015.
I interviewed Bobby about entry level work from home jobs running Facebook ads, and in our interview, you will learn:
- How he started earning income through running Facebook ads
- Why small businesses want Facebook ads
- How a person can find their first Facebook ads client
- How much you can make doing this type of work – the average is around $1,000 extra a month per client
Also, Bobby has a free webinar on this topic too. His webinar (you can sign up here) will teach you how to start this business even if you’re brand new, how to find paying clients, and more.
8. Get paid to share your opinion.
This isn’t exactly a job, but it is a way to make extra money.
And, you don’t need any previous experience.
Yes, you can get paid to share your opinion!
Companies use surveys all the time to learn what their current and potential customers think of their products, services, and company. With the surveys you take, companies get valuable opinions on how to improve their products, and that’s what they are paying you for.
Below are the survey companies I recommend:
- American Consumer Opinion
- Survey Junkie
- Swagbucks
- InboxDollars
- Opinion Outpost
- OneOpinion
- Pinecone Research
- Prize Rebel
- Product Report Card
- Survey Club
9. Create an online store of your own.
This is one of the entry level work from home jobs that many people are surprised to hear about. But yes, you can start your own online store, and you don’t need to have tons of experience or a lot of money to do so. Many people start with absolutely no background.
I had the opportunity to interview Jenn Leach of E-commerce and Prosper, who explains exactly how to start an online store.
Jenn is a corporate mom turned e-commerce store owner and blogger.
She started her online business a little over three years ago, and since then, she has developed and grown three successful online e-commerce stores earning an average of $19,000 per month.
She is super successful despite only spending around 5-10 hours per week on her e-commerce business.
You can read our interview at How Jenn Makes Over $10,000 A Month With Her Online Store In Less Than 10 Hours Per Week.
10. Start a bookkeeping business.
I’m sure you’re surprised to hear that bookkeeping is an area with entry level work from home jobs, but it definitely is.
A bookkeeper is someone who tracks the finances of a business, handles billing and payments, making spreadsheets, etc., but that doesn’t mean you need to be an accountant or have any related experience.
Ben, from Bookkeeper Launch, helps people get started as bookkeepers even when they don’t have any experience. Ben is a CPA who founded his business after realizing that many businesses needed better bookkeepers.
In our interview, we talk about:
- What a bookkeeper is
- The typical clients a bookkeeper has
- How much new bookkeepers earn
- How to become a bookkeeper
- The positives and negatives of bookkeeping
You can read all of his answers and more in our interview Make Money At Home By Becoming A Bookkeeper.
Also, you can sign up here for a free series that will teach you more about running your own virtual bookkeeping business.
11. Find stuff to resell.
This is one another one of the entry level work from home jobs that anyone can start. That’s because we all have lots of stuff in our house that we can probably sell online.
Have you ever found something that you thought you may be able to resell and actually make some money?
Melissa’s family earned $133,000 in one year through buy and sell flipping, and they were working only 10-20 hours per week.
Yes, just 10-20 hours a week!
Some of the best flipped items that they’ve sold include:
- An item that they bought for $10 and flipped for $200 just 6 minutes later
- A security tower they bought for $6,200 and flipped for $25,000 just one month later
- A prosthetic leg that they bought for $30 at a flea market and sold for $1,000 on eBay the next day
You can learn more at How Melissa Made $40,000 In One Year Flipping Items.
12. Write online as a freelancer.
I know so many people who have found entry level freelance writing jobs. You don’t need a background in writing or a degree in English or creative writing.
A freelance writer is someone who writes for a number of different clients, such as websites, blogs, magazines, advertising companies, books, and more. They don’t work for one specific company, rather they work for themselves and contract out their writing.
My friend Holly from EarnMoreWriting.com (as well as the popular personal finance blog Club Thrifty) is a very successful freelance writer and has earned over $200,000 writing online!
Her freelance writing course includes nine video modules, several printable worksheets, and awesome add-ons, too. Here are some of the things you can expect to learn if you take her freelance writing course:
- Discover the #1 most important thing you can do to get paid writing jobs
- Learn how to find entry level work from home jobs as a writer and move up over time
- Learn how price affects the amount of work you get
- Learn which types of jobs help Holly earn the most pay, and where you can find them
- Find out which online platforms work best for finding paid work, and how to use them
- Learn how to structure your work day to earn six figures or more
Learn more at How I Earn $200,000+ Writing Online Content.
13. Transcribe audio or video into text.
Transcription is the art of turning any audio or video content into a text document.
There are many businesses looking for transcriptionists too – since general transcriptionists convert audio and video to text for virtually any industry, there really isn’t a typical client. Some examples include marketers, authors, filmmakers, academics, speakers, and conferences of all types.
Beginning transcriptionists earn around $15 an hour to start.
There are many transcriptionist jobs that don’t require experience, and most transcriptionists learn more and improve their skills as they work.
You can learn more about becoming a transcriptionist in the interview Make Money At Home By Becoming A Transcriptionist. The interview explains:
- What a transcriptionist is
- How you can get started as a transcriptionist
- What kind of money you can expect to make
- The type of training you need, and more
14. Find proofreading jobs online.
Finding entry level proofreading jobs online is very possible.
All you need to work as a proofreader is a laptop or tablet, an internet connection, and a good eye for pointing out mistakes.
Proofreaders look for punctuation mistakes, misspelled words, lack of consistency, and formatting errors.
In 2014, Caitlin made slightly over $43,000 by being a freelance proofreader.
You’ll learn more about this in my interview with Caitlin that I link to below, but proofreaders take content that other people have written and then go over it with a fine-tooth comb. You might be proofreading blog posts, print articles, academic articles, website copy, ad copy, books, student papers, emails, and more.
This job is for a very specific type of person who LOVES to correct grammar or makes a note of spelling mistakes on a restaurant menu… it takes a certain “eagle eye” ability to be good at proofreading!
I interviewed Caitlin on what it takes to become a proofreader, and in our interview we go over questions such as:
- What a proofreader does
- How much proofreaders earn
- How quickly a person can start making money as a proofreader
- The steps needed to become a proofreader
You can find out about entry level work from home jobs and more at How To Become A Proofreader And Work From Anywhere.
Caitlin has put together a FREE 76-minute workshop, where she answers all of the most common questions about becoming a proofreader, and she even shows you how to use the most popular tools used by proofreaders around the world. You can sign up for free here.
15. Learn how to become a scopist.
Scoping is when you are editing legal documents for court reporters. This is different from proofreading for court reporters.
I interviewed an expert on the topic – Linda from Internet Scoping School. She has been scoping for over 35 years and has taught scoping online for around 20 years.
She also has a free course that will introduce you to scoping so that you can decide if it’s one of the entry level work from home jobs you want to pursue. You can find the free course by clicking here.
Scopists who are working with an average court reporter tend to make around $30,000 to $45,000 per year working pretty much full-time.
You can learn more at How To Become A Scopist.
16. Assist with podcasts.
Currently, there’s a huge demand for podcast virtual assistants.
There are over 800,000 podcasts out there, and that number just continues to grow. Podcasts are still a pretty new area, and that opens the door for lots of new entry level work from home jobs helping with all of these new podcasts.
While the podcast host can record themselves, other tasks like editing and publication take time, so many podcasters outsource their work to freelancers or virtual assistants. Also, some podcasters may not know how to do those things, or they may choose to focus their time on other areas.
Some of the different services you could do as a podcast virtual assistant include:
- Audio editing
- Marketing and promotion
- Publication
- Distribution
- Show note creation
Learn more at How I Make $1,500 A Month As A Podcast Virtual Assistant.
Also, you can sign up here for free information on learning more about how to become a podcast VA. In this free resource, you’ll learn more about what exactly a podcast virtual assistant is, the services you can offer, and starting rates.
17. Work as a freelancer.
Freelancers are people who work for others by doing part-time jobs. A business may hire you on for one-time gigs or you may get a long-term job with a company as a freelancer.
In addition to some of the freelance jobs I’ve already mentioned (writing, proofreading, transcribing, and bookkeeping) there are even more entry level work from home jobs out there for people who are able to leverage existing skills, like:
- Graphic design
- Web design and development
- Video editing
- Sound design
- Search engine optimization (SEO)
- Programming
- Photography
This is one of the best work from home jobs because you can use a skill you already have and start finding work on job platforms like UpWork and Fiverr.
18. Find a work from home job in customer service.
Many large companies outsource their customer service departments to people who are working from home.
Customer service representatives may be responsible for a number of things, such as:
- Working at an online call center
- Working as a chat agent
- Offering technical support
- Virtual assistant tasks
- Working as a travel agent
This is becoming one of the best entry level work from home jobs because the number of large companies who need online customer service reps is growing. Companies like Apple, American Express, UHAUL, and more offer basic training for new hires.
19. Secret shop.
Funny enough, many people think that you have to “know someone” or have previous experience in order to become a mystery shopper.
But, that’s not the truth at all.
You don’t need any previous experience in order to become a secret shopper.
This won’t be a full-time job, but it can give you some extra money each month. And, yes, there are some mystery shops that can be done by phone and online.
I remember when I first heard of being a secret shopper. I was working at a retail store and we regularly had mystery shoppers come in to grade how we were doing. We never knew who the mystery shopper was, but we would get to read their report afterwards.
I thought it was so interesting that people were getting paid to shop!
Not long after hearing about it, I decided to try mystery shopping to make extra money to help pay off my student loan debt.
I regularly earned around $150 to $200 a month mystery shopping, and I earned free items/services as well, such as $100 to spend at restaurants (which I had to grade while I was there), makeup, and more.
If this sounds interesting to you, you can join Bestmark by clicking here. This is my favorite mystery shopping company, and the only one I used back when I was mystery shopping, so I know it’s legitimate.
Learn more at Want To Make An Extra $100 A Month? Learn How To Become A Mystery Shopper.
20. Become a voice over actor.
A voice over actor is the person you hear but rarely see on YouTube videos, radio ads, explainer videos, corporate narration, documentaries, e-learning courses, audiobooks, TV commercials, video games, movies, and cartoons.
This job doesn’t require previous experience or special skills – you just need to have the right kind of voice that companies are looking for.
In 2014, Carrie replaced her salaried day job to become a full-time voice over actor. People are constantly asking her how she got her start and how they can too.
So, she created a six-week online class, and it sold out. Several of her students booked voice acting jobs before the class was even over!
I was excited to learn more about this work from home job, so I interviewed Carrie to learn:
- How she got into this interesting career field
- Who the common clients are
- How much money a beginner voice over actor can expect to make
- The positives of this job
- How to find your first job
- The costs, and more
You can read my interview with her at How To Become A Voice Over Actor And Work From Anywhere.
How can I make money from home with no experience?
As you can see, there are many different options for you if you are looking for an online job or work from home business with no experience.
I hope you are able to find what works best for you and your situation.
What entry level work from home jobs would you add to the list above?
The post 20 Of The Best Entry Level Work From Home Jobs appeared first on Making Sense Of Cents.
Source: makingsenseofcents.com
How Microlearning Can Level Up Your Knowledge
If youâre looking to advance your career or pivot to a new industry, then youâre probably checking out ways you can beef up your resume. Maybe youâre considering an MBA, a bootcamp, or browsing upcoming conferences. Or perhaps youâre considering the DIY route and looking for podcast and book recommendations.Â
While any of these options will help you learn and could boost your resume, the best way to level up your career prospects is to dedicate yourself to becoming a lifelong learner, which is where microlearning comes into play.Â
Conferences and classes are bursting with information, but you may feel limited by the course schedule and teaching style. This works for some people, but it can be expensive and hard to fit into a budget or daily schedule. Microlearning can help you take charge of your education by providing bite-sized lessons. Over time, you can build up your learnings for a more thorough and robust understanding of the subject.Â
The best part is you can apply your specific lessons to your life, career, and goals to build each of these out over time and see what really works and what doesnât. Your consistent growth can improve job satisfaction and career opportunities, putting you in the spotlight for the next raise or promotion. Learn more below or jump to our infographic to get started.
What Is Microlearning?
Microlearning has become a popular workplace trend as a learning process that breaks topics into highly specific, concise lessons. This allows the learner to build understanding and confidence at their own pace.
Microlearning is great for tackling new information and closing knowledge gaps. If you already have a foundation of knowledge for a topic, then it can be frustrating to wade through the basics for the few new ideas you were looking for. Khan Academy and TED Talks are a great example of how you may fill in knowledge gaps.Â
The Benefits of Microlearning
The most important part of any lesson plan is that itâs tailored to a learnerâs needs, and that the learner is actually able to retain information. Microlearningâs flexibility for learners is one of its biggest benefits.
Here are some other reasons to consider microlearning:
- Maximize time by preparing lessons for on-the-go and fitting them in during breaks or commutes.
- Go in-depth to build a solid learning foundation and improve retention with practice.Â
- Find what works by experimenting with videos, articles, or podcasts to find what format works best for you.Â
- Save money with free resources like TED Talks, YouTube, and expert podcast hosts who provide episodic insights and lessons for you to follow.Â
- Fill knowledge gaps with lessons targeting exactly what you need to know instead of wading through beginner resources.Â
The Disadvantages of Microlearning
Microlearning is great for career development, employee training, and specific topics that you could use a refresher on. However, theyâre not a total replacement for other learning systems, and you should keep these in mind when you get started:
- Itâs not immediate and microlearning is about regular commitments to learning.
- It isnât easier, but it may feel easier. This is actually a benefit unless you assume it will be easy. You still have to actively learn and practice your lessons.Â
- Some topics just donât work, including complicated topics like global economics. Itâs great for learning about things like mortgages, but you likely wonât become an expert on personal finance in just a few lessons.Â
- Thereâs work upfront to finding and compiling the resources that fit your needs and that you trust. This work pays off in the long-run, though, with easy-to-access lessons.Â
5 Ways to Begin Microlearning
You may not realize it, but youâve probably already prioritized microlearning in your day-to-day life. If youâve watched a YouTube video to learn how to change your oil or customize a spreadsheet, then you know exactly how beneficial short, specific, and detailed lessons can be.Â
Here are some ways you can get started using microlearning as part of your professional development:
1. Game Groups
Gamifying your learning helps make the topic fun and builds a positive relationship with studying. You can get started by setting goals and rewards, or inviting peers to join you with a competitive leaderboard or a trivia night.Â
2. Video Clips
Videos are designed to be relatively short and engaging, and YouTube has made learning largely accessible from anywhere. While YouTube playlists are a great place to learn, make sure youâve done your research on any channels or personalities youâre watching to ensure your lessons are accurate.Â
3. Podcast Playlists
Like videos, podcasts are a great way to consume information on the go and from personalities you enjoy and trust. Theyâve become hugely popular because theyâre easy to listen to while driving, working, or exercising, but itâs important that you give your playlist your active attention if you hope to learn effectively.Â
4. Quiz Collections
Considering a quiz may bring flashbacks of test anxiety and stressful finals weeks, but in this scenario, quizzing isnât about checking a box that you learned something new. Instead, itâs a means to practice your memory recall and retention so you can count on it when you need it most.Â
5. Team Talks
Having a team to study with is not only great for motivation, but it can also improve your lesson retention. Active learning is the process of working or chatting through a subject or problem, and studies show this is the best way to learn and practice your skills.Â
Keeping up with your professional development is the best way to impress your employer and expand your job prospects. Whether you want to climb the career ladder or ease your daily workload, How Microlearning Can Level Up Your Knowledge appeared first on MintLife Blog.
Source: mint.intuit.com
8 Ways You Could Get Stimulus Money With Your 2020 Tax Refund
If your coronavirus checks are long gone, you could have more stimulus money coming your way, even if Congress doesnât do another thing. And if you didnât qualify for a check based on your past tax return, you could get stimulus money if you file a tax return for 2020 that shows youâre eligible.
Hereâs why: Both the first stimulus check and the second stimulus check are an advance on a temporary 2020 tax credit. But because of the urgency of the situation, the IRS was directed to get us that money ASAP, using information from our 2018 or 2019 returns.
That means if your tax situation changed through the course of the year, you could get stimulus money if your 2020 return shows that youâre eligible.
8 Reasons You Could Get Stimulus Money With Your 2020 Refund
If one or more of these scenarios apply, you might get more coronavirus money in 2021 by submitting a tax return. And relax: You wonât owe more at tax time or get a smaller refund as the result of receiving a check.
1. Youâre No Longer Claimed as a Dependent
Attention, Class of 2020: If your parents or someone else claimed you as a dependent in 2019 but they donât in 2020, you could get an $1,800 credit â $1,200 from the first check and $600 from the second one â provided that you file a tax return.
Generally, you can be claimed as a dependent if youâre under 19, or youâre under 24 and a student, if your parents provide at least half of your support.
2. You Had a Child in 2020
The parents of any bundle of joy who arrives in 2020 will be eligible for an $1,100 child coronavirus credit: $500 from the first round and $600 from the second. Theyâll have to wait until they file their 2020 tax return, since the IRS doesnât have record of these new additions yet.
3. Your Child Was Born in 2019, but You Took Advantage of the Tax Extension
If you had a child in 2019 but got a late start on filing your 2019 return due to the coronavirus tax extension or you filed on paper, the IRS probably processed your first payment using your 2018 return. Youâll get the extra $500 child credit next year when your 2020 return is accepted. But provided that your 2019 return has been accepted, you may receive $600 for your child from the latest round with your second stimulus check.
4. You Get Social Security or SSI Benefits and Have a Dependent Child
The IRS automatically processed coronavirus checks for people who arenât required to file a tax return and receive Social Security, Railroad Retirement, SSDI, SSI or VA benefits.
But in many of these situations, the IRS only received the information needed to send the recipient the $1,200. They didnât get information about dependent children who qualified for $500 coronavirus child credits unless the recipient provided it using the non-filer tool on the IRS website within a pretty narrow timeframe.
If you got a $1,200 payment for yourself but didnât receive the extra payments for dependent children under 17, youâll need to file a 2020 tax return to get the extra $500, even if you donât normally need to file. The same applies if you donât get the $600 credit with your payment in the latest round.
5. Your Income Dropped in 2020
A lot of people will no doubt have a lot less income to report in 2020 than they did in 2018 or 2019. If you didnât qualify for the first check because your previous income was above the $99,000 threshold for singles or $198,000 for married couples, you could qualify based on your 2020 income. The second check has a lower phaseout because itâs smaller, so you wonât receive one if youâre single with an income above $87,000 or married with an income above $174,000.
Likewise, if your payment was reduced because your income was above $75,000 if youâre single or $150,000 if youâre married, youâd get the difference when you file your 2020 return.
6. You and Your Childâs Other Parent Take Turns Claiming Them for Taxes
The Washington Postâs Michelle Singletary reported on this odd quirk of stimulus payments: It appears that in situations where divorced, separated and never-married parents take turns claiming their dependent children on taxes, each parent could wind up with a $500 payment.
Whoever claimed the child for 2019 probably received both the $500 and $600 payments with their stimulus check. But since the payments are technically a credit for 2020 taxes, there could be a loophole that allows the other parent to get the credit for the same child when they file next year.
7. You Increased Your Retirement Contributions in 2020
Suppose youâre a single filer who earned $80,000 in 2019 and your income stays the same in 2020. You would have gotten a $950 coronavirus check in the first round, because payments are reduced by 5 cents for every $1 of income over $75,000 if youâre single. In the second round, youâd get $350.
But if you reduced your 2020 taxable income to $75,000 by contributing an extra $5,000 to your 401(k) or traditional IRA (sorry, a Roth IRA wonât work), youâd get the additional $250 coronavirus payment from both rounds, so $500 total.
8. Youâre Married to Someone Without a Social Security Number
If you have a Social Security number but youâre married and file a joint tax return with someone who doesnât have one, neither of you initially qualified for a stimulus check under the CARES Act. But the latest relief bill changes the rules so that anyone in the household with a Social Security number will qualify for the second payment â and it also makes the change retroactive to the first round.
That means if youâre in a mixed-status household, you could get a $1,200 credit for yourself, plus $500 for each dependent child 16 and younger who has a Social Security number.
Robin Hartill is a certified financial planner and a senior editor at The Penny Hoarder. She writes the Dear Penny personal finance advice column. Send your tricky money questions to DearPenny@thepennyhoarder.com.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
Source: thepennyhoarder.com
8 Safe Investments for People Who Hate Risking Their Money
Think back to what the stock market looked like to you in March 2020, aka, the apocalypse. Did it look like:
A.) The biggest bargain sale youâve ever seen in your lifetime?Â
or
B.) A burning pit of money that was about to incinerate your lifeâs savings?
If you answered âB,â you probably have a low risk tolerance. You worry more about losing money than missing out on the opportunity to make more of it.
Being cautious about how you invest your money is a good thing. But if youâre so risk-averse that you avoid investing altogether, youâre putting your money at greater risk than you think.
Do Safe Investments Actually Exist?
When you think about the risks of investing, you probably think about losing principal, i.e., the original amount you invested. If you keep your money in a bank account, thereâs virtually no chance of that happening because deposits of up to $250,000 are FDIC insured.Â
But consider that the average savings account pays just 0.05% APY, while in 2019, inflation was about 2.3%.
So while youâre not at risk of losing principal, you still face purchasing power risk, which is the risk that your money loses value. Your money needs to earn enough to keep up with inflation to avoid losing purchasing power. If inflation continues at 2.3%, buying $100 worth of groceries will cost you $102.30 a year from now. If youâre saving over decades toward retirement, youâll be able to buy a whole lot less groceries in your golden years.
Thereâs also the risk of missed opportunity. By playing it too safe, youâre unlikely to earn the returns you need to grow into a sufficient nest egg.
Though thereâs no such thing as a risk-free investment, there are plenty of safe ways to invest your money.
8 Low-Risk Investments for People Who Hate Losing Money
Here are eight options that are good for conservative investors. (Spoiler: Gold, bitcoin and penny stocks did not make our list.
1. CDs
If you have cash you wonât need for a while, investing in a CD, or certificate of deposit, is a good way to earn more interest than youâd get with a regular bank account.
You get a fixed interest rate as long as you donât withdraw your money before the maturity date. Typically, the longer the duration, the higher the interest rate.Â
Since theyâre FDIC insured, CDs are among the safest investments in existence. But low risk translates to low rewards. Those low interest rates for borrowers translate to lower APYs for money we save at a bank. Even for five-year CDs, the best APYs are just over 1%.
You also risk losing your interest and even some principal if you need to withdraw money early.
2. Money Market Funds
Not to be confused with money market accounts, money market funds are actually mutual funds that invest in low-risk, short-term debts, such as CDs and U.S. Treasurys. (More on those shortly.)
The returns are often on par with CD interest rates. One advantage: Itâs a liquid investment, which means you can cash out at any time. But because they arenât FDIC insured, they can technically lose principal, though theyâre considered extraordinarily safe.
3. Treasury Inflation Protected Securities (TIPS)
The U.S. government finances its debt by issuing Treasurys. When you buy Treasurys, youâre investing in bonds backed by the âfull faith and credit of the U.S. government.â Unless the federal government defaults on its debt for the first time in history, investors get paid.
The price of that safety: pathetically low yields that often donât keep up with inflation.
TIPS offer built-in inflation protection â as the name âTreasury Inflation Protected Securitiesâ implies. Available in five-, 10- and 30-year increments, their principal is adjusted based on changes to the Consumer Price Index. The twice-a-year interest payments are adjusted accordingly, as well.
If your principal is $1,000 and the CPI showed inflation of 3%, your new principal is $1,030, and your interest payment is based on the adjusted amount.Â
On the flip side, if thereâs deflation, your principal is adjusted downward.
4. Municipal Bonds
Municipal bonds, or âmunis,â are bonds issued by a state or local government. Theyâre popular with retirees because the income they generate is tax-free at the federal level. Sometimes when you buy muni bonds in your state, the state doesnât tax them either.
There are two basic types of munis: General obligation bonds, which are issued for general public works projects, and revenue bonds, which are backed by specific projects, like a hospital or toll road.
General obligation bonds have the lowest risk because the issuing government pledges to raise taxes if necessary to make sure bondholders get paid. With revenue bonds, bondholders get paid from the income generated by the project, so thereâs a higher risk of default.
5. Investment-Grade Bonds
Bonds issued by corporations are inherently riskier than bonds issued by governments, because even a stable corporation is at higher risk of defaulting on its debt. But you can mitigate the risks by choosing investment-grade bonds, which are issued by corporations with good to excellent credit ratings.
Because investment-grade bonds are low risk, the yields are low compared to higher-risk âjunk bonds.â Thatâs because corporations with low credit ratings have to pay investors more to compensate them for the extra risk.
6. Target-Date Funds
When you compare bonds vs. stocks, bonds are generally safer, while stocks offer more growth. Thatâs why as a general rule, your retirement portfolio starts out mostly invested in stocks and then gradually allocates more to bonds.
Target-date funds make that reallocation automatic. Theyâre commonly found in 401(k)s, IRAs and 529 plans. You choose the date thatâs closest to the year you plan to retire or send your child to college. Then the fund gradually shifts more toward safer investments, like bonds and money market funds as that date gets nearer.
7. Total Market ETFs
While having a small percentage of your money in super low-risk investments like CDs,
money market funds and Treasurys is OK, there really is no avoiding the stock market if
you want your money to grow.
If youâre playing day trader, the stock market is a risky place. But when youâre committed to investing in stocks for the long haul, youâre way less exposed to risk. While downturns can cause you to lose money in the short term, the stock market historically ticks upward over time.
A total stock market exchange-traded fund will invest you in hundreds or thousands of companies. Usually, they reflect the makeup of a major stock index, like the Wilshire 5000. If the stock market is up 5%, youâd expect your investment to be up by roughly the same amount. Same goes for if the market drops 5%.
By investing in a huge range of companies, you get an instantly diversified portfolio, which is far less risky than picking your own stocks.
8. Dividend Stocks
If you opt to invest in individual companies, sticking with dividend-paying stock is a smart move. When a companyâs board of directors votes to approve a dividend, theyâre redistributing part of the profit back to investors.
Dividends are commonly offered by companies that are stable and have a track record of earning a profit. Younger companies are less likely to offer a dividend because they need to reinvest their profits. They have more growth potential, but theyâre also a higher risk because theyâre less-established.
The best part: Many companies allow shareholders to automatically reinvest their dividends, which means even more compound returns.
Robin Hartill is a certified financial planner and a senior editor at The Penny Hoarder. She writes the Dear Penny personal finance advice column. Send your tricky money questions to DearPenny@thepennyhoarder.com.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
Source: thepennyhoarder.com
6 Tips for Successfully Managing a Checking Account in College
Heading off to college is exciting. Really exciting. You finally have freedom! You’re out on your own for the very first time, managing your studies, managing your social life and… managing your finances.
Despite being a big part of your newfound independence, personal finance is a subject you probably won’t find on your course schedule. If you didn’t take a personal finance class in high school and never had money lessons from your parents, you may not know how to manage a checking account as a college student.
“College students have very different needs for their checking account than their parents or other adults,” says Tommy Martin, CEO of Clear Path Financial Planning and a finance blogger at TommyMartin.com. If you live in a different city during the school year than you do during winter and summer breaks, for example, you may be after a bank for which location doesn’t matter.
Ok, so how do I manage my checking account in college, you ask? First, don’t get overwhelmed. Learning how to manage money while in college and getting a handle on checking account basics is simpler than you might think (oh, and the skills will serve you for years to come). Second, you can kick off your checking account education with these tips for managing a checking account in college:
1. Compare checking accounts before signing up
While your college life may center around your school campus, you should consider venturing off-campus to pick the right checking account for your lifestyle.
“Students typically sign up with a bank that’s on campus or close to campus,” says Sahil Vakil, a financial planner and president of MYRA Wealth in New Jersey. However, the nearest bank might not be the one that best fits your needs, he adds.
Instead of picking a bank based solely on proximity, consider all of your options, including banks with off-campus locations and online-only banks.
Martin agrees, saying that learning how to manage money while in college means considering all of your banking options rather than “automatically enrolling or choosing the official school bank just because it has the school logo on it.” There are other ways to show your school pride, after all.
2. Learn about checking account fees and rewards
Vakil and Martin both say a tip for managing a checking account in college is to consider an account’s fees before signing up. Costly fees can eat into your savings and spending money, which can be a blow for students who are not working full-time. When you are choosing a checking account in college, consider fees for:
- Monthly maintenance (essentially keeping your account open)
- Minimum balance (not maintaining one)
- ATM usage
- New checks
- Wire transfers
- Online bill pay
- Replacement debit cards
Martin says a checking account with no minimum balance requirement or minimum number of transactions could be a good fit for students. “It allows them to focus on their education” instead of worrying about incurring penalties, he says. “Even a $5 fee on a checking account with $60 in it can be devastating.”
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Costly fees can eat into your savings and spending money, which can be a blow for students who are not working full-time.
Martin also suggests finding an account that has a large network of no-fee ATMs located across the country to better manage your checking account as a college student. “Especially if you’re going to a school in a different state, the local bank from home might wind up costing you a lot in terms of ATM fees,” he says. If your parents plan to wire you money, find an account that doesn’t charge incoming wire fees, Martin adds.
While fees should be a focus when you are learning how to manage money while in college, don’t forget about incentives. You may be able to find a checking account that actually helps you grow your balance by paying interest or offering a cash back rewards program.
“If you have to pay for books or supplies, at least you can get some cash back and use it for a free dinner,” Martin says. Discover Cashback Debit, for example, offers 1% cash back on up to $3,000 in debit card purchases each month.1
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3. Track your checking account balance
Luckily, you don’t need to take Banking 101 to figure out your funds, and tech makes tracking your balance and account activity easier than ever. Most banks let you log in to your account online (don’t get distracted in class!), and with a bank’s mobile app you can transfer money to friends, pay bills, deposit checks and check your balanceâall while you’re on the go.
Knowing your balance at all times is a tip for managing a checking account in college because it can help you avoid overdrafts and insufficient funds fees. It can also help you forecast your income and expenses to ensure you’ll have enough money to cover future costs. Surpriseâthat’s budgeting!
There’s no one-size-fits-all budgeting program or system, though. You can go old-school and track your budget on a printed-out budget sheet, or you can go tech-savvy with a budgeting and spending app. “What’s best for you is the one you’re actually going to use,” Martin says.
If you learn how to manage money while in college and make a practice of maintaining your budget, the habit will follow you after graduation.
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âCollege students have very different needs for their checking account than their parents or other adults.â
4. Secure your account
One of Vakil’s tips for managing a checking account in college is to make sure your account stays secure. Create a unique account name and password that you use only for your checking account, and never share your credentials.
Vakil says you can also enable two-factor authentication if your bank offers it and you’re looking for another way to improve the management of your checking account as a college student. “This additional layer of protection safeguards your sensitive financial data and strengthens the security of your account by requiring two methods of verifying your identity.”
For example, if you log in to your account from a new device, you may be sent a text message with a code that you’ll need to enter to access your account.
5. Keep an eye out for debit card holds
No matter where you bank, a merchant may place a hold on funds in your checking account when you use your debit card. Generally, a hold is placed for travel-related purchasesâsuch as at rental car companies, hotels and gas stationsâand used by merchants to protect against fraud and errors.
“Holds on a debit card can make it tricky for you to manage your finances,” Vakil says. For example, “when you rent a car, the car rental company might put a $500 hold on your account. If the balance in your account was $550, now you can only use another $50.”
Being aware of holds can be particularly important if you are managing a checking account as a college student and tend to have a low account balance.
If a merchant will be placing a hold, it will generally post a sign to notify customers. The hold will typically be removed after the funds are transferred to the merchant from your financial institution, typically within three to four days.
Knowing when a hold will be placed, the amount of the hold and how much money you have in your checking account can help you manage your checking account as a college student by avoiding overdrafts and missed bill payments due to insufficient funds.
6. Don’t let one mistake throw you off track
If you can learn how to manage a checking account as a college student, and more generally, how to manage money while in college, you can lay the groundwork for a solid financial future. Checking account mistakes may occasionally happen (oops, I didn’t budget enough for that spring break trip), but don’t let them discourage you to the point of apathy. Instead, try to continually expand your knowledge and practice healthy financial habits.
1 ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal, who also provide P2P payments) may not be eligible for cash back rewards. Apple, the Apple logo and Apple Pay are trademarks of Apple Inc., registered in the U.S. and other countries. Venmo and PayPal are registered trademarks of PayPal, Inc.
The post 6 Tips for Successfully Managing a Checking Account in College appeared first on Discover Bank – Banking Topics Blog.
Source: discover.com
Financial Lessons Learned During the Pandemic
2020 has shaped all of us in some way or another financially. Whether it is being reminded of the importance of living within our means or saving for a rainy day, these positive financial habits and lessons are timeless and ones we can take into the new year.Â
While everyone is on a very unique financial journey, we can still learn from each other. As we wrap up this year, it’s important to reflect on some of these positive financial habits and lessons and take the ones we need into 2021. Here are some of the top financial lessons:
Living Within Your Means
Itâs been said for years, centuries even, that one should live within one’s means. Well, I think a lot of people were reminded of this financial principle given the year weâve had. Living within your means is another way of saying donât spend more than you earn. I would take it one step further to say, set up your financial budget so you pay yourself first. Then only spend what is leftover on all the fun or variable items.
Setting up your budget in the Mint app or updating your budget in Mint to reflect the changes in your income or expenses is a great activity to do before the year ends. Follow the 50/20/30Â rule of thumb and ask yourself these questions:
- Are you spending more than you earn?
- Are there fixed bills you can reduce so you can save more for your financial goals?Â
- Can you reduce your variable spending and save that money instead?
The idea is to find a balance that allows you to pay for your fixed bills, save automatically every month and then only spend what is left over. If you donât have the money, then you cannot use debt to buy something. This is a great way to get back in touch with reality and also appreciate your money more.Â
Have a Cash Cushion
Having a cash cushion gives you peace of mind since you know that if anything unexpected comes up, which of course always happens in life, you have money that is easy to liquidate to pay for it versus paying it with debt or taking from long-term investments. Having an adequate cash cushion this year offered some people a huge sigh of relief when they lost their job or perhaps had reduced income for a few months. With a cash cushion or rainy day fund, they were still able to cover their bills with their savings.
Many people are making it their 2021 goal to build, replenish, or maintain their cash cushion. Typically, you want a cash cushion of about 3- 6 months of your core expenses. Your cash cushion is usually held in a high-yield saving account that you can access immediately if needed. However, you want to think of it almost as out of sight out of mind so it’s really there for bigger emergencies or opportunities that come up.
Asset AllocationÂ
Having the right asset allocation and understanding your risk tolerance and timeframe of your investments is always important. With a lot of uncertainty and volatility in the stock market this year, more and more people are paying attention to their portfolio allocation and learning what that really means when it comes to risk and returns. Learning more about which investments you actually hold within your 401(k) or IRA is always important. I think the lesson this year reminded everybody that itâs your money and it’s up to you to know.
Even if you have an investment manager helping you, you still need to understand how your portfolio is allocated and what that means in terms of risk and what you can expect in portfolio volatility (ups and downs) versus the overall stock market. A lot of people watch the news and hear the stock market is going up or down, but fail to realize that may not be how your portfolio is actually performing. So get clear. Make sure that your portfolio matches your long term goal of retirement and risk tolerance and donât make any irrational short term decisions with your long-term money based on the stock market volatility or what the news and media are showcasing.
Right Insurance Coverage
We have all been reminded of the importance of health this year. Our own health and the health of our loved ones should be a top priority. It’s also an extremely important part of financial success over time. It is said, insurance is the glue that can hold everything together in your financial life if something catastrophic happens. Insurances such as health, auto, home, disability, life, long-term care, business, etc. are really important but having the right insurance policy and coverage in place for each is the most important part.
Take time and review all the insurance coverage you have and make sure it is up to date and still accurate given your life circumstances and wishes. Sometimes you may have a life insurance policy in place for years but fail to realize there is now a better product in the marketplace with more coverage or better terms. With any insurance, it is wise to never cancel a policy before you a full review and new policy to replace it already in place. The last thing you want is to be uninsured. Make sure you also have an adequate estate plan whether itâs a trust or will that showcases your wishes very clearly. This way, you can communicate that with your trust/will executorâs, beneficiaries, family members, etc. so they are clear on everything as well.Â
Financial lessons will always be there. Year after year, life throws us challenges and successes to remind us of what is most important. Take time, reflect, and get a game plan in place for 2021 that takes everything you have learned up until now into account. This will help you set the tone for an abundant and thriving new financial year.Â
The post Financial Lessons Learned During the Pandemic appeared first on MintLife Blog.
Source: mint.intuit.com