Tag: savings

Advertiser Disclosure

Best of, Earning Interest

The Best Credit Union CD Rates – September 2017

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

The top credit union CD rates
Source: iStock

Certificates of deposit (CDs) are a great way to safely store your savings at a financial institution, as they offer a guaranteed rate of return, and CD rates tend to be higher than those on traditional savings accounts. Maybe you’ve even heard that credit union CD rates offer higher returns—but is that really the case? On average, yes. As of June 2017, the average one-year credit union CD had a 0.58% annual percentage yield (APY), compared to the 0.48% APY average among one-year bank CDs. (You may also want to view our picks for the overall best CD rates.)

Using data from our sister site DepositAccounts.com, we identified the top one-year credit union CD rates, as of Sept. 5. We then eliminated any credit union with a health rating lower than a B and identified the top three offerings in three categories: restricted, no cost, and best banking app. If there was a tie by APY, we went with the product with the lower minimum deposit. Here are the best one-year credit union CD rates.

Best CD rates for credit unions with no cost to join

The thing about credit unions is that they’re not usually just open to anyone. You usually need to meet some membership criteria in order to get in and get access to all of their really nice products. These credit unions, however, will let you in for free regardless of your personal details. (Note: Only two credit unions met our criteria for this list.)

 

Unify Financial Credit Union – 1-Year Share Certificate, 0.85% APY, min. deposit $1,000

Unify FCU offers the highest interest rates on CDs (which it calls share certificates) of any credit union with no cost to join. The interest rate on their 12-month CD, for example, is 0.85%, compared to the national average of 0.597% in August. You would earn $8.50 on a $1,000 deposit. If you withdraw your money early, however, you’ll face a penalty of 90 days’ worth of interest.

NASA Federal Credit Union – 1-Year Share Certificate, 0.55% APY, min. deposit $1,000

If the rigid inflexibility of CDs makes you leery, NASA FCU might be your best bet. They have a lot of flexible certificates, such as add-on certificates that let you start with as little as $250, and bump-rate certificates that let you opt for a one-time interest rate increase if rates go up. You can even take out a loan from your certificate should you need the cash before it’s matured. You can join NASA FCU with a complimentary membership to the National Space Society.

If you do need to make an early withdrawal, you will face a penalty of 180 days’ worth of interest.

Best credit union CD rates with restricted memberships or membership fees

Each of these credit unions have restricted membership criteria, but don’t let that scare you away. If you don’t meet their membership criteria, it’s possible to make a small donation to their charity of choice in order to become eligible for membership. Furthermore, these credit union CD rates offer some of the highest-returning share certificates out of any category.

 

Air Force Federal Credit Union – 1-Year Certificate, 1.56% APY, min. deposit $1,000

Members and family members of the military, civilian contractors, and certain employees are eligible to join the Air Force FCU, along with anyone willing to join the Airman Heritage Foundation ($25 annual membership fee).

This credit union comes in first place overall for highest interest rates for 12-month CDs. You can earn $15.60 by depositing a minimum of $1,000 in a 12-month CD, with an APY of 1.56%. You can also use your CD as collateral to earn a lower interest rate on a loan, and membership comes with a host of discounts for parks and businesses in the San Antonio, Texas area. Watch out for the early withdrawal penalties, however, worth half of whatever you would have earned between when you withdrew the funds and when it would have matured.

Andrews Federal Credit Union – 1-Year Share Certificate, 1.41% APY, min. deposit $1,000

Andrews FCU comes in just behind the Air Force Federal Credit Union in terms of the highest CD interest rates of any credit union on our list. With just a $1,000 minimum deposit, these CDs are much more attainable if you don’t have a lot to spare. You’ll earn $14.10 in interest on a 12-month CD, and if you withdraw your money early, you’ll face a penalty of 90 days’ worth of dividends (for CDs of less than 2 years), or 180 days’ worth of dividends (for CDs of 2 years of more).

Anyone can join Andrews FCU with a one-time $5 donation to the American Consumer Council, a national financial literacy organization.

Connexus Credit Union – 1-Year Certificate, 1.40% APY, min. deposit $5,000

If you don’t meet Connexus CU’s regular membership criteria, you can always join by making a one-time $5 donation to the Connexus Association, the credit union’s education wing. Once in, you can take advantage of the one of the highest credit union CD rates. There’s just one catch: You’ll need more money than most credit unions require to open up a share certificate—$5,000. If you’re able to swing that much, you can earn $70 with just a 12-month CD. The early withdrawal penalty is 180 days’ worth of dividends on the amount you withdraw.

Alliant Credit Union – 1-Year Share Certificate, 1.35% APY, min. deposit $1,000

You can join Alliant Credit Union by making a $10 donation to Foster Care To Success, a nonprofit that helps teenagers aging out of the foster care system, if you don’t meet their other membership criteria. A 12-month CD at Alliant CU earns 1.35% APY (still far above the national average of 0.597% APY), meaning you can earn $13.50 on a $1,000 deposit. Alliant CU is unique among credit unions in that they’ll allow you to withdraw your monthly dividends (not the whole CD) without penalty, although this will reduce your earnings.

Best CD rates for credit unions with the best mobile apps

By their very nature, CDs aren’t something that require constant attention, poking, and prodding. It’s a set-it-and-forget-it kind of a deal, so you won’t need any spiffy banking apps to use CDs.

But, if you’d like to switch all of your banking to the same institution that holds your CDs, it might be a wise idea to consider one of these credit unions if you’re a digital junkie. Most credit unions lag behind their bank compatriots in terms of mobile banking apps, but these credit unions offer top-notch mobile apps, according to MagnifyMoney’s 2016 mobile banking app analysis.

 

Wright-Patt Credit Union – 1-Year Certificate, 1.34% APY, min. deposit $500

Unlike many credit unions, you can’t just make a simple donation to join Wright-Patt CU if you fail to meet their membership criteria. You need to live in certain areas of Ohio, be associated with Wright-Patterson Air Force Base, or be an employee of their select employer group, among other options.

You can earn $6.70 on a 12-month CD with just a relatively small $500 deposit. Early withdrawal penalties vary depending on the original term of your CD, however they’ll be anywhere between 5-12 months’ worth of dividends.

Eastman Credit Union – 1-Year Investment Certificate, 1.25% APY, min. deposit $1,000

Eastman Credit Union also has pretty restrictive membership requirements. You’ll have to be an employee (or a family member of an employee) of one of their select employers, or live in certain parts of Tennessee, Texas, or Virginia.

Eastman CU is another one of the rare credit unions that allow you to withdraw your dividends penalty-free before the maturity date, although again, doing so will lower your total returns. Currently, you can earn an interest rate of 1.25% on a 12-month CD. With a minimum deposit of $1,000, that translates into earnings of $12.50 after one year. If you withdraw your money before the CD matures, you’ll owe a penalty fee of anywhere between seven days’ worth of dividend earnings or all of your dividend earnings.

Delta Community Credit Union – 1-Year Certificate, 0.75% APY, min. deposit $1,000

There are many ways to join Delta Community CU, such as living in certain parts of Georgia, being a member of one of their select employers, or being a member of one of their partner organizations. Interestingly, citizens of many countries like Argentina, France, and Peru are also eligible to join.

At 0.75% APY for a 12-month CD, Delta Community CU ranks as one of the lowest-earning credit unions on our list—not much above the current national average of 0.597% APY. You’ll earn $7.50 on a 12-month CD with the minimum deposit of $1,000. Early withdrawal penalties range are 90 days worth of interest on a 12-month CD.

3 questions to consider before opening a credit union CD

Banks are more likely to call their products certificates of deposit, while credit unions often refer to them as share certificates. Aside from the name, the biggest difference between the two is that credit unions have higher average annual percentage yields (APYs), as of June 2017. That’s good news: It means more money back in your pocket when the CD matures (i.e., reaches the end of its term and is available for withdrawal).

There really is no difference in safety between depositing money in a CD with a credit union versus a bank, as long as they participate in either the National Credit Union Administration (NCUA) for credit unions, or the Federal Deposit Insurance Corporation (FDIC) for banks.

According to Neal Frankle, a Los Angeles-based Certified Financial Planner with Wealth Pilgrim, deposits of up to $250,000 per financial institution are “backed by the full faith and credit of United States Government, so it’s pretty solid.”

For the most part, choosing a CD at a bank or a credit union boils down to your preference as a consumer: Do you want to be a bank customer or a member of a credit union? Here’s a primer on the differences.

The biggest advantage of credit union CDs over bank CDs is that you can likely earn more interest. But with both products, the longer the CD term, the more interest you will earn. And with a CD laddering strategy, you can have the best of both worlds: frequent access to your money, yet you can still keep it locked away in high-interest, long-term CDs.

Beyond that, the disadvantages of opening a credit union CD are the same as if you’re opening a CD with a bank. You can’t access that money without paying an early withdrawal penalty until the CD matures. While CDs do offer some of the highest rates for any financial product you’re likely to come across at a bank or credit union, they still don’t really earn great interest. If you’re investing for the long-term (like retirement savings), your money is better invested in the riskier (but higher-earning) stock or bond market.

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

TAGS: , ,

Advertiser Disclosure

Earning Interest

Best Money Market Rates & Accounts – September 2017

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Updated September 1, 2017

Traditional banks are paying very low interest rates on money market accounts. For example, Bank of America pays between 0.03% and 0.06% APY. Fortunately, you do not need to settle for such ridiculously low rates. You can easily find the best money market rates at internet banks paying 1.05% or more. If you put $50,000 into Bank of America’s account at 0.03%, you will only earn $15 of interest over one year. That same money in an account paying 1.05% would earn you $525 of interest. And you can typically open and fund an online money market account in less than 10 minutes.

MagnifyMoney has searched for money market accounts paying the highest interest rates – and this list gets updated monthly. Here are the best rates for April 2017:

1. Top Rate: UFB Direct – 1.41% APY, $5,000 minimum balance to avoid a monthly fee

UFB Direct

UFB Direct is a division of BofI Federal Bank, a federally chartered, publicly traded and FDIC-insured bank based in San Diego. In recent months, UFB Direct has become increasingly aggressive with high rates targeting big balances. The APY of 1.41% is the highest that we have found. However, there is one catch. You need to keep at least $5,000 in the account in order to avoid a monthly maintenance fee of $10.00. You will get a Visa debit card and have access to limited check writing. We think this is the best option for people with big balances that they want to keep in a money market account.

2.Favorite Online Package: Ally – 0.90% APY, no minimum deposit, and link to free checking

Ally Financial

Ally Bank is a very popular internet-only bank. Although the interest rate on the money market account is not the highest, Ally does offer a very competitive overall package – particularly if you link the account to an Ally checking account. The checking account has no minimum balance and no monthly fee. You can link your money market account to your checking account to provide overdraft protection. Money would be transferred to your checking account with no transaction fee if you ever made a mistake. You would be able to access your money market account with your Ally ATM card, which has free AllPoint access and up to $10 of non-Ally ATM fees reimbursed every month. This money market account is a nice way to provide yourself with overdraft protection while earning interest. If you don’t need check-writing capabilities on your savings, you would still be better off with Ally’s savings account.

3. Top Choice: Sallie Mae – 1.30% APY, no minimum balance and checks available

SallieMae

If you have student loan debt, you probably are not very excited to see Sallie Mae at the top of this list. However, many people are unaware that Sallie Mae also operates an internet-only FDIC-insured bank with some of the best interest rates in the country. You can earn 1.30% APY, compounded daily and paid monthly. There is no minimum balance and no monthly maintenance fees. You will have check-writing capabilities (although the standard money market limit of six per month applies to this account). The easiest (and best) way to fund and access your funds is via electronic transfer from your existing checking account. If you want a simple account with no fees and check access – this is a good bet. Sallie Mae has just recently increased the APY (it was previously 1.15%), making this one the best rates in the country.

4. High Rate: Self-Help Credit Union – up to 1.37% APY, $500 minimum deposit and minimum balance

Self Help Credit Union

Self-Help is a credit union that anyone can join. If you don’t live, work or worship in one of their eligible counties, you can join by donating $5 to the Center for Community Self-Help. The contribution is tax deductible and will make you eligible for credit union membership. (You can learn more about how to join the credit union here.) At a credit union, your funds are insured up to $250,000 – but it is by the NCUA instead of the FDIC. The money market offers an APY of 1.27% on balances from $500 to $500,000. Even better – you can earn 1.37% APY on balances above $500,000. However, you need to deposit at least $500 and the balance during the month cannot go below $500 – otherwise you will be charged a monthly maintenance fee. You are allowed 6 free withdrawals or transfers from the account each month (including checks).

5. Good Rate: EverBank – 1.31% APY, $5,000 minimum deposit (1-year intro APY)

Everbank

EverBank, recently acquired by TIAA-Cref, is a rapidly growing bank that conducts most of its business online (even though it is based in Florida). In 2017, EverBank has become very aggressive on interest rates. Its products have regularly made our list of best CD rates, and – not surprisingly – it also appears on the best money market list. This is a great product, but you should be aware of a few pieces of fine print. The APY is only valid for one year. EverBank does promise that the rate, after the first year, will “never stray from the top 5% of competitive accounts.” Just be prepared for a lower rate after 12 months. You need at least $5,000 to open the account. You will only earn the 1.31% APY on balances up to $250,000. There is no monthly account fee.

6. Good Rate for Big Deposits: Capital One 360 – 1.20% APY on balances above $10,000 (0.60% on balances below)

Capital One

Capital One has become more aggressive in recent months on the rate that it pays for online CDs and money market accounts. Capital One is focused on big balances: if you don’t have a lot of money, you can get much better deals elsewhere. But if you have a lot of cash and want another FDIC-insured account, Capital One is a strong option. You earn 0.60% APY on the first $9,999.99 that you deposit. You will then earn 1.20% APY on deposits from $10,000 up to $250,000. There is no monthly fee associated with the account.

7. High Rate: ableBanking – 1.30% APY, $250 minimum, but no check-writing

ableBanking

ableBanking is a division of Northeast Bancorp, a community bank headquartered in Maine since 1872. The bank has over $1 billion in assets, and your deposit would be FDIC insured up to the legal limit. At 1.30% APY, this is the highest money market rate that we have been able to find (from a bank) in the country. There is now a minimum deposit of $250, no monthly fee and you do not need to be a resident of Maine (any US resident can open an account). Unfortunately, the account does not come with check-writing privileges and there is no ATM access. You can deposit and access your funds via ACH (electronic transfer), which can take a couple of days. Just remember: there is a limit of 6 withdrawals per calendar month. When we called to ask questions about the account, we could reach a customer service representative very quickly. This is a good new option (just added to the list in June) from a small bank with a great high rate.

3 Questions To Ask Before Opening A Money Market Account

1. Should I open a savings account or a money market account?

Many years ago, money market accounts were higher risk and paid higher returns. The financial crisis of 2008 changed all of that. Money market accounts are now FDIC-insured up to the legal maximum ($250,000 per institution per individual). Interest rates are now very similar – and there is no material difference. In other words – choose whichever account you want.

In general, you tend to get slightly lower interest rates on money market accounts because you have check-writing capabilities. The best savings accounts pay at least 1.15% APY – very similar to the rates on this page. But at Ally, for example, you can get 1.00 APY on a savings account (no check-writing) and 0.85% on the money market account (with check writing).   

We have written a full explanation of the difference between money market and savings accounts here.

2. Am I willing to make a longer term commitment? 

Savings accounts and money market accounts pay much lower interest rates than CDs. Right now you can easily get a 1-year CD paying 1.35% APY (with only a $2,000 minimum). You can find the best CD rates here. If you build a CD ladder, you can take advantage of 5-year rates that are now as high as 2.30%.

Money market accounts are great places to keep money that you might need immediately. But the interest rate on a money market account can change right away, at the bank’s discretion. To lock in a higher interest rate, you should consider a CD. If you need to get access to your CD early, would forfeit interest (typically from 3-6 months). In most circumstances, putting more of your money into CDs can really help boost your returns.

3. Is a money market account the same as a money market fund? 

No, money market accounts (offered by FDIC-insured banks) are not the same as money market funds (most likely sold by your broker). In fact, we really don’t know why people even buy money market funds in the current environment.

For example, Vanguard offers the Prime Money Market Fund. Like other money market funds, this one “invests in short-term, high-quality securities.” Its objective is to keep the fund trading at $1 and generate a decent return. Right now that return is 0.89% – a bit lower than the returns you see from the money market accounts listed in this article. However, money market funds do not have FDIC insurance.

Most people compare the return of a money market fund (sold by their broker) to the interest rate paid by a traditional bank (0.03%, sold by their local bank teller). As a result, they are willing to take the risk of a money market fund. However, as you can see from the best money market accounts in this article, you can get FDIC insurance and beat the return of most funds. Why earn 0.89% with no FDIC-insurance when you can easily earn 1.05% and have FDIC insurance.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

TAGS: ,

Advertiser Disclosure

Strategies to Save

7 Ways to Save Money That Could End Up Backfiring

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Saving money is a noble goal. It can even become addictive, like a game. But if you’re not careful, your savings strategies might lead you to spend more money in the long run.

These seven stories will help remind you to always keep your long-term savings goal in mind. That way you aren’t blindsided by short-term “savings.”

Couponing

Source: iStock

Who hasn’t been enamored with the “Extreme Couponing” TV show, where people get carloads of groceries for free? They make coupons seem like the equivalent of cash dollars — but the only way you can use those dollars is to spend money first. This sets up a snag where overzealous consumers can easily be tricked into spending more money than they otherwise would have in the quest of using the Holy Coupon and their “savings.”

Kendal Perez, a savings expert with Coupon Sherpa, has some tips: “Coupons, Groupons, and vouchers of any kind that save you money on products, services, or experiences you wouldn’t otherwise be interested in are ones you should stay away from. Instead of clipping ‘interesting’ coupons from the Sunday circular or browsing Groupon when you’re bored, look for coupons on items you already intend to buy.”

Trying to save too much money

Source: iStock

Joseph Hogue, a chartered financial analyst and personal finance blogger, was in a familiar trap in his first professional job: He hated it and wanted to leave. So he tried saving up all of his cash so he could retire early.

“I fell into the financial equivalent of yo-yo dieting,” he says. He would take on as much work as possible before becoming burned out and blowing all of his hard-earned money in a spending spree.

He learned the hard way that it’s not enough just to make and save a ton of money. You also need to pace yourself, set realistic goals, and reward yourself along the way. Hogue’s advice? “Find something outside of work you enjoy doing to make all the effort and saving worthwhile.”

Growing your own vegetables

Source: iStock

Growing your own vegetables doesn’t seem like it would cost much money. Just throw some seeds in the ground and add water, right? Wrong.

Once you factor in everything you need to grow a garden — tools, soil amendments, fences, plants, hoses, etc. — costs can quickly spiral out of control. Still, you have to be careful about cutting corners. Joshua Crum, a personal finance blogger, found this out firsthand when he forgot to include wild-animal-proof fencing in his calculations. “I spent around $100 and tons of work on a garden. Wild animals came and ate everything I planted.”

If gardening is your thing, see if you can reduce your expenses by buying used equipment instead of new. Also consider planting cost-effective vegetables for the maximum return for your buck.

Not reading the fine print on a purchase

Source: iStock

There are a ton of ways to save money if you keep your eyes open. Receipt-scanning apps, rebates, sales, coupons, store loyalty cards — it’s a long list. The catch is that you have to carefully read the fine print so you can meet the requirements. Before you make a purchase with the intent of getting a rebate or some other discount, make sure you understand the terms and will actually benefit from the deal.

Mindy Jensen, community manager at BiggerPockets, recently found this out. She bought a ream of paper, expecting to use a rebate to have another free ream of paper shipped to her house. “I didn’t read the fine print, and the return was in the form of a store credit. I almost never shop there, so it was kind of a waste.”

In another incident she bought a bottle of alcohol specifically for a $5 rebate. “I have gotten in the habit of saying ‘No, thank you’ to receipts at the store, to save paper and the environment.” When she got home, she was stunned: “Guess what you need in order to get the rebate? A receipt. Of course, I felt like an idiot for not getting the receipt; having a proof that you purchased the product is a basic tenet to getting a rebate.”

Skimping on insurance

Source: iStock

No one likes paying their monthly insurance premium — until it comes time to make a claim.

According to Neil Richardson from the auto insurance comparison site The Zebra, getting just the minimum liability protection for your state “is simply too little financial protection to cover a number of common car insurance claims scenarios. People end up with huge bills because they wanted to save a few dollars off their premium.”

MagnifyMoney recommends checking what insurance options are available with your insurance broker. Ask yourself: Would you be able to fully cover the cost of any unfortunate events outside of the minimum coverage? If not, you might need to reconsider your insurance coverage.

Skipping doctor visits

Source: iStock

Going to the doctor is about as fun as stubbing your toe, not to mention being expensive. It’s pretty tempting to save some money by diagnosing yourself over the internet. Sometimes this works out, but it can have costly consequences if it doesn’t.

Abigail Perry, a personal finance blogger, once felt a urinary tract infection coming on but decided to treat it herself. It quickly turned into lower back pain, which was her signal that it was becoming more serious. She eventually ended up spending $75 to go to the emergency room, when a visit to her regular doctor would have had a $0 copay.

Perry’s advice is to “just go to the doctor. And if you can’t get an appointment there, find an urgent care clinic [rather than going to the emergency room, if possible]. Just be sure to bring a good book and a charge cord.”

Buying in bulk

Source: iStock

Smart shoppers know that the best way to save money is by looking at the per-unit price of each food item. This often means buying food in bulk. Even smarter shoppers know to take into account an item’s shelf life, so they can plan to use it before it goes bad.

But there’s more to it than that, like making sure you actually need what you’re buying. For example, Lisa Torres, a retired high school teacher, buys several boxes of Popsicles at a time when they go on sale during the hot New Hampshire summers. Buying Popsicles in bulk seems like a logical choice, because she’s going through a lot of them and they’ll keep for months. But Torres also likes buying fresh fruit in the summer, when some of her favorites are in season. When her family has both options as a snack, they tend to choose the Popsicles.

“The healthy fruit in the fridge goes bad because we are eating Popsicles instead of fruit,” she says. “And next week I have to buy more Popsicles.” Torres says she’s still working on making better buying decisions so she doesn’t waste food or money.

When buying in bulk, it’s always best to stop and think about whether you’ll be able to use all of the product, as well as if you have any alternatives at home. By keeping tabs on what you have at home and taking a minute to think before every purchase, you can successfully navigate these common savings pitfalls.

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

TAGS: , , ,

Advertiser Disclosure

Featured, Strategies to Save

What Your Teen Should Do With Their Summer Earnings

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Source: iStock

According to a 2017 survey released by the National Financial Educators Council, 54% of respondents (all 18 years and older) said a course in money management in high school would benefit their lives. Another survey — the most recent from the Program for International Student Assessment — reports that only about 10% of U.S. 15-year-olds are proficient in personal finance matters, falling in the middle among the 15 countries studied. The message is clear: Young Americans need to learn more about money and managing it wisely. One way to start them off is giving them hands-on experience with their own money. Enter the summer job.

Having a summer job can be a good introduction to adulthood for many reasons: The discipline, submission to management, team work, and a regular paycheck are just a few of the things a teenager will get used to with their first summer job.

It’s also a good way to introduce kids to the real world of money. Though the money your teen earns is technically theirs, as a parent, you should use summer job earnings as an opportunity to help your kids form good habits with money. There’s no better time to show them the value of money than in the crucial years before they’ll be saddled with obligations like student loans, car notes, and mortgages.

Here are a few ways to make sure your teen will get the most out of their money-making experience that will keep them money savvy for years to come.

Pay their fair share

Once your teen begins making money, you’ll to want consider how they can begin to cover certain expenses. You’ll be tempted, no doubt, to let your teen keep their hard-earned money for themselves. Trust this process. If the goal is to raise money-smart kids who become even savvier adults, there will have to be simulations of the real world that include actually paying for things

If your teen uses the car, consider having them cover a portion or all of their car insurance bill. Another option is to have them contribute to their cellphone bill or even some of the Wi-Fi they use.

Having expenses is a real part of life, so it’s better to help them understand that now rather than later when ignorance isn’t so blissful.

If the thought of making your child pay for expenses bothers you, consider a different approach: Teach them about the costs of everyday life by asking them to cover their portion of a bill, but take that money and put it away for them. You can save up all that money and, as a nice gesture, give it to them when they need it most, like when they go away to college or finally leave the nest to launch out into the real world.

Open bank accounts

Source: iStock

While many families do not have access to or elect not to participate in the traditional banking system — it’s estimated that 27% of U.S. households are unbanked or underbanked — you’d ideally want to get your teen familiar with banks and how they work. Though check use has been on the decline since the mid-1990s, it’s still important for teens to learn how to write a check, along with keeping a checkbook register. Sure, this practice probably won’t last long, as electronic payments and money management apps continue to grow, but this approach gives your kids the gist of how to keep track of their cash flow.

While your teen has a bank account, you’ll also get them used to understanding how a debit card works. They’ll get familiar with how easy it is to swipe for things they want, yet how difficult it can be to replenish their account with the money they’re making at their job.

Finally, you’ll want to make sure that your teen opens a savings account. In most states, a person can open a bank account when they become 18. For younger teens, many banks have special teen or kid accounts that a child can share with their parents. Co-owned checking accounts can be opened as young as 13, while custodial savings accounts can be opened at any age.

Developing good habits around saving and managing money takes time and some getting used to. So using their summer earnings would be a perfect opportunity to get into the groove of budgeting for expenses and managing money through a bank account.

Set money goals

Once money starts to flow into your kid’s hands, seize the moment and get them to see the bigger picture. Summer money is great, but paying for life will take much more than what your teen earns from a few hours of work in a bike shop. Begin to show them the cost of things like college, cars, homes, and luxuries like vacations or hobbies.

Once you compare the costs with their summer job earnings, it should help them come to conclusions about how money works: The more you have, the more you can do. The idea is to inspire them to increase their earning potential with tools like education or savings to invest in income-producing assets.

Another result of these conversations could be your teen realizing they’ll want to start saving up for life sooner than later. They may decide to put away money for the purpose of paying for school or their first condo.

Ron Lieber, New York Times financial columnist and author of the book The Opposite of Spoiled, says parents should prompt their kids with an immediate goal like having a college fund. “The best thing to do is to use any earnings to begin a conversation with parents about college, if your teen plans on going,” Lieber says.

Lieber suggests questions to guide the conversation:

  • How much of your college expenses will be covered by parents versus the child?
  • How much have the parents saved for the child’s college expenses?
  • How much are kids/parents willing to borrow or spend out of their current income?

According to Lieber, “The answers to these questions may cause a teen to save everything, if they think it will help them avoid debt in their effort to attend their dream college.”

No matter how temporary their summer job is, you’d do well to use it as a springboard for more conversations about money. Whatever their long-term money goals are, it’s never a bad idea to start working toward them early on.

Learn compound interest

While your teen is making all of those big money goals, you could drive the point home with a lesson in compound interest. Using a compound interest calculator, you can show your teenager many scenarios where interest can either work for or against them.

Run scenarios around savings for big-ticket items versus financing them. The math will speak volumes:

*Example APRs are used. APR will vary on factors like individual credit score, loan amount, and bank requirements.

In the above scenario, you’d end up paying a total of $226,815 in interest. That same amount ($226,815) invested for 30 years with a moderate 3.5% return yields over $636,000!

Seeing these numbers in action should motivate your teen to start a savings habit that they will maintain throughout adulthood.

If they are really excited about the prospects of compound interest working on their behalf, encourage them to open their own IRA to begin investing themselves. This way, they’ll not only understand the theory of investing but also get hands-on experience with it. After all, the time value of money works even better when you’ve got more time. Investing as a teen could set the stage for copious returns later on in life.

Create a budget

Making money can be the fun, somewhat easy part of a summer job. Figuring out how to spend it can be difficult. Make your teen prioritize needs and wants by learning to create a budget. A good practice would be to have your teen make a list of things they’ll spend money on versus how much money they will bring in. You could also introduce them to a money-management app — here are some of the best ones.

This will help them understand the finite nature of money and how their current cash flow stacks up against their current earnings.

Have fun

According to Brian Hanks, a certified financial planner in Salt Lake City, “Don’t be concerned if your teen ‘blows’ a portion of their earnings on things you consider to be worthless.” Hanks goes on to say that it’s better to make money mistakes as a youngster: “Everyone needs to learn tough money lessons in life, and learning them as a teen when the consequences are relatively small can save bigger heartache down the road.”

A summer job should be fun and low-stress, but it can also be used as a learning experience that prepares your teen for the real world. If your teen turns out to be a terrible budgeter or extreme spendthrift, give them more than a summer to learn better ways. Remember, they’ll have the rest of their lives to continue grasping and mastering money concepts.

Aja McClanahan
Aja McClanahan |

Aja McClanahan is a writer at MagnifyMoney. You can email Aja here

TAGS: , , ,

Advertiser Disclosure

Bargains and Deals, Strategies to Save

15+ Apps That Help You Make Money

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Need extra money? Your mobile device could actually unlock a world of additional income for you. There are many ways to earn money online, and they are now conveniently available on smartphones and tablet devices. Add an internet connection, and you’re set. Pursuing a side hustle can be time consuming, but if you’ve got a financial goal like getting out of debt or saving up for a down payment on a home, these apps could be a good start to boosting to your income. All the apps here are free to use via web browser and/or mobile device.

Surveys

Swagbucks

Devices: Android, iOS

The Swagbucks iOS app. Source: iTunes.

Swagbucks is a popular survey website with a couple of app counterparts (discussed below), including Swagbucks Local and SB Answers. By taking surveys, you accumulate points called Swagbucks, not actual money. These surveys usually ask about your demographics, preferences, and behaviors on topics like cereal you eat, places you shop, TV shows you watch, and other lifestyle choices. Plan to spend 15-30 minutes on each survey, though there are occasionally seven- to 10-minute surveys.

In terms of how the conversions work, one Swagbuck is about 1 cent, and you can redeem them for gift cards to places like Amazon, Starbucks, and popular retailers like Walmart and Target. You even have the option to donate your Swagbucks to more than 10 charities featured on the site.

So, how good are the payouts? A three-minute survey could offer you five Swagbucks or approximately 5 cents. A 20-minute survey pays out 80 cents on average. However, many people earn much more with the Swagbucks referral program: 500 Swagbucks (worth $5) per person once the referral is active. Plus, you’ll get 10% of your referrals’ point earnings over the lifetime of their account.

You have a few options to earn Swagbucks on your mobile device:

Surveys On The Go

Devices: Android, iOS

The Surveys On The Go iOS app. Source: iTunes

Surveys On The Go allows users to take various surveys with pretty decent payouts: You’ll get surveys for between 25 cents and $1. However, be prepared to spend time on these surveys. You can spend 15-20 minutes completing them (or more).

There also aren’t always a lot of surveys available. I’ve logged in a few times and found there were no surveys for me. The survey availability will depend on your demographic and even location. Sometimes, there are high-paying surveys ($15-$20), but it’s hard to tell when and where that will happen.

There’s no way to know how often there will be surveys available, but you can choose to receive app notifications when there is a new survey you qualify for.

Unlike Swagbucks, these surveys offer you actual money. You’ll need to earn $10 before you get a payment via PayPal. A nice thing about this app is that you get a consolation compensation of 10 cents if you start a survey and are not qualified to complete it.

InboxDollars

Devices: Android, iOS

InboxDollars iOS app. Source: iTunes

Much like Surveys On The Go, InboxDollars offers cash rewards. The app also offers “sweep” points, which allow you enter sweepstakes for more sweeps, money, or other prizes.

This app usually has plenty of surveys to take, though they are not all optimized for mobile viewing. At times, the interface can be a little wonky and a tad clunky to navigate.

You should also know that you can get deep into a survey (say, 5-15 minutes) only to be disqualified because of your answers. Your hourly “wage” comes out to be pretty low considering you make anywhere from 20-25 cents per 20-30 minutes spent answering questions. You cannot request a payout from the app until you’ve reached the $30 minimum. A $3 processing fee applies to every payment request. Your payment options include a check, gift card from Target or Kohl’s, or a prepaid Visa card (the latter two options available to Gold members only.)

Other survey apps to explore include Panel App, QuickThoughts, and SurveyMini. Overall, if you are looking to make a living wage from taking surveys, you likely won’t come close. With payouts that amount to just a few cents an hour, you’re better off with other ways to produce extra income (unless there’s absolutely nothing else you can do to earn).

Fitness

What’s better than losing unwanted inches? Getting paid for it. There are a few apps that allow you to convert your fitness activity into financial benefits. As always, you’ll want to consult your physician before starting any fitness program.

DietBet

Devices: Android, iOS

DietBet iOS app. Source: iTunes

DietBet allows you to turn your fitness goals into money. In order to enter a bet, you have to put money up front in a game that pools the money of other people with weight-loss goals. Those who make their goals win the bet and split up the pot (minus DietBet’s 10%-25% fee) that is paid out by those who don’t make their goals. WayBetter, the company behind DietBet, also has a StepBet app that offers similar games where you put down money when you set activity goals and win the bet if you meet them.

On DietBet, you can participate in a short, four-week challenge called a Kickstarter or a six-month game called a Transformer. You can be in multiple bets at a time to maximize your earnings. The company says Kickstarter winners get back an average of 1.5-two times their bet, while the average Transformer winner takes home $325 for winning all six rounds, or $175 for winning just the final round.

DietBet and StepBet have a No Lose Guarantee, which states that if you win, you will not lose money. They’ll forfeit their cut of the pot to make this happen. Of course, if you don’t win, you don’t get anything, so there’s potential to lose money here. The average Kickstarter bet size is $30, and Transformer costs $25 a month (or $125 up front).

Sweatcoin

Devices: Android, iOS

Sweatcoin iOS app. Source: iTunes

The Sweatcoin app converts your outdoor steps into currency called Sweatcoins (SWCs), which you can redeem for products like watches, fitness apparel, and gift cards. Currently, you’ll earn .95 SWCs for every 1,000 steps you complete. The exact conversion of these coins seems to change depending on the reward: Past promotions include a $12 smoothie gift card for 150 SWCs, a $120 Actofit watch for 1,600 SWCs, and a $88 VICI Life gift card for 250 SWCs.

The items available for purchase with Sweatcoins are limited and change often based on availability and the company’s promotional schedule. This app requires access to your GPS data and location in order to verify that your steps are taken outside.

Shopping

There are many apps that reward you for doing something you’d do anyway — shop. Here’s how most of these apps work: If you purchase a product, the app developer usually gets commissions on purchases you make at their suggestion, which they split with you. In this way, they can provide you with rewards that literally pay you for shopping.

Ibotta

Devices: Android, iOS

Ibotta iOS app. Source: iTunes

Ibotta offers rebates for buying certain products in nearby stores. Once you let it access your geodata, you’ll find deals on items at retailers like Walmart, Whole Foods, Costco, and more.

Sometimes the deals are super product-specific, and other times you can see generic items like milk or eggs offered with a chance to get 25 cents back. In order to get your rewards, you’ll have to scan the item’s barcode with your phone’s camera and snap a picture of the receipt. You’ll then submit these through the app.

This can be somewhat time consuming. For example, the receipt can be long, requiring a few pictures, or you could accidentally throw away the packaging (which I’ve done on a few occasions).

This is another app with a generous referral bonus: You get $5, while your referral gets $10. You accrue referral bonuses and rebates in your Ibotta account and can request payouts via PayPal, Venmo, or a featured gift card once you meet the $20 threshold.

Ebates

Devices: Android, iOS

Ebates iOS app. Source: iTunes

Similar to Ibotta, Ebates gives you rewards for shopping through their portal and purchasing featured items, but Ebates also offers discounts. There are popular stores like Loft, Tom’s, JCPenney, Macy’s, and more. You’ll get your earnings via PayPal every three months (unless you’ve accrued less than $5.01.)

Ebates also has a great referral program. The payouts change from time to time, so you’ll need to check their referral program page for current payouts. At the moment, when you refer one friend who makes a minimum $25 purchase, you’ll get a $5 bonus, while your friend gets $10 added to their account balance after their first purchase.

Shopkick

Devices: Android, iOS

Shopkick iOS app. Source: iTunes

Shopkick pays its users points called Kicks for a variety of shopping activities.

When you open the app, it detects your location and shows you a list of nearby retailers and products that can help you earn Kicks. If you allow the app to access your GPS data, you’ll hear a cha-ching sound when you get close to a participating retailer.

Shopkick is set up to show you the best deals and popular products from retailers like Best Buy, American Eagle, Yankee Candle, and many more.

Kicks can be redeemed for gift cards to places like Best Buy, Starbucks, and Target. The referral program offers 250 Kicks for each friend who signs up and completes their first in-store action.

In terms of the conversion rate, 250 Kicks equals $1 for most rewards. You’ll need to check the rewards section of the app for conversions on specific items.

Gig economy

If you’ve got time and a certain skill set, you can make money helping someone nearby. The apps below are variations of the Uber-like work arrangement we are all getting more familiar with. Given the higher earning potential these opportunities offer, they also require more commitment: Before you can start earning money through these kinds of apps, you may have to submit an application and agree to a background check.

TaskRabbit

Devices: Android, iOS

TaskRabbit iOS app. Source: iTunes

TaskRabbit allows you to complete small tasks like errands, cleaning, or handyman work for people nearby. As a “tasker” you can choose the types of tasks you’ll complete, your rates, and your own schedule. There’s no minimum to the amount of work you can do; however, the site explains that you cannot invoice for jobs that are under one hour. TaskRabbit takes 30% of your earnings and is available in 39 U.S. metro areas.

The application process is straightforward but stringent. In addition to your general demographics, you’ll need to verify your account with official identification like a driver’s license. You will also need to complete a background check. The TaskRabbit website explains that the company receives a large amount of registrations and cannot give you a timeline on when you’ll be approved.

Fortunately, once you get going, it’s pretty easy to see tasks available, accept them, and even invoice your clients. Although earnings for individual taskers vary due to a number of factors, a report by Priceonomics puts the average monthly earnings are around $380.

GoShare

Devices: Android, iOS

GoShare iOS app. Source: iTunes

GoShare is an app for people who need moving and delivery help. You can earn money with this app if you have a vehicle for large deliveries and can lift heavy items. However, GoShare is only available in nine cities among three states: California, Georgia, and New Jersey.

GoShare users can also work with large retailers to help unload shipments and deliver items to customers. For example, someone who ordered a refrigerator from Home Depot could request a GoShare driver to deliver it.

If you live in one of the areas GoShare serves, you can apply to be a driver. Potential earnings vary by vehicle type: The website says someone who drives a small pickup truck could earn up to $47.52 an hour, while someone with a cargo van can earn up to $61.92 an hour.

Uber/Lyft

Devices: Android, iOS

Left: Uber iOS app. Right: Lyft iOs app. Source: iTunes

Probably the most popular of the bunch, Uber and Lyft offer people the opportunity to use their own car to drive people around and get paid for it. Rates are typically set by the company and depend on your location, time of day, type of car you have, whether or not a passenger will share a ride with other passengers, and a few other factors. Uber is in more than 630 cities around the world, and Lyft is in more than 550 U.S. cities.

Chime

Devices: iOS

Chime iOS app. Source: iTunes

Chime is a division of the popular child care site, Sittercity. Chime is a mobile app designed for people who need quick connections for child care. Again, the premise is: I’m available, you need help, let’s connect with this app. Chime is available in Boston, Chicago, New York City, New Jersey, and Washington, D.C.

According to Chime, all sitters are thoroughly vetted and have completed a background check as well as undergone ID verification. The hourly rate is set according to your local market starting from around $15-$18 per hour.

Rover

Devices: Android, iOS

Rover iOS app. Source: iTunes

The Rover app is like Chime but allows users to look for and offer house-sitting and pet care services. Once you apply to be a sitter, your profile, if accepted, takes about five days to be approve. (Note: You can opt to complete a background check through a third party, but it’s not necessary.) You should also know that you get to set your own rates for services.

Once you agree upon a price with your client and complete a job, your client pays through the Rover app. Those funds are released to you within 48 hours, less the 15% transaction fee Rover deducts. Your payments stay in your Rover account until you withdraw them.

A community forum thread on the Rover website puts part-time earnings at $500-$1,000 per month.

GreenPal

Devices: Android, iOS

GreenPal iOS app. Source: iTunes

There are a few Uber-like apps for lawn care, and GreenPal is just one of them. The only issue is that some of these apps don’t have enough users to make it worthwhile for either service seekers or gig workers (GreenPal currently serves 12 U.S. cities).

As a vendor, you’ll apply through the company’s website. Part of the vetting process is passing a criminal background check, providing client references, and confirming that you have proper lawn care equipment.

Once you are approved as a lawn care provider, you’ll get notifications of nearby jobs. You are able to upload photos of your finished work (kind of like a lawn care portfolio), and then your client will rate you.

Depending on your location and market, expect to bid anywhere from $25-$45 per job. GreenPal takes a 3% transaction fee when your client pays you.

If you have a financial goal in mind and need more earning options, apps like these can certainly help. Just remember to weigh the value of your time against the potential of earning more money before you commit to chasing income this way.

Aja McClanahan
Aja McClanahan |

Aja McClanahan is a writer at MagnifyMoney. You can email Aja here

TAGS: , , ,

Advertiser Disclosure

Strategies to Save

5 Ways to Get Your Finances in Shape Before the Year Ends

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Everyone has those New Year’s resolutions that, even with the best intentions, seem to fall by the wayside. While it might be too late for some, there’s still plenty of time left in 2017 to fulfill your financial goals.

Courtney Lindwall, 24, an editor in New York City, says she set out at the beginning of this year to spend less money eating out. While she’s been better lately, she says she didn’t start working toward the goal right away.

“Around March, I was finally like, ‘Enough,’ and have been a little stricter about it,” she says.

In fact, mid-year is the perfect time to re-evaluate your financial situation and find new motivation for saving, says Catalina Franco-Cicero, director of financial wellness and a financial coach at Fiscal Fitness Clubs of America.

“We could all say that we get really excited at the beginning of the year,” Franco-Cicero says. “Then come summertime, we think, ‘Holy cow, I didn’t do anything. I really want to get remotivated.’”

Bruce McClary, vice president of communications for the National Foundation for Credit Counseling, says he also recommends reassessing financial goals mid-year. Making financial resolutions at the new year almost seems to “curse” them, he says, and there are many events to plan for financially in the second half of the year, such as back-to-school season and the holidays.

Here are five areas to evaluate to help you become more fiscally fit in the last half of 2017.

1. Put together a status report

You need to understand your financial situation in order to set goals for improving it. Finding the money to save or pay off debt can seem doubly daunting if you don’t know how you’re spending your money each day.

Evaluate the last six months’ worth of your expenses and income so you can plan for the rest of the year. McClary suggests reviewing the following things:

  • Your budget: Determine how much you’re spending each month on your home, car, food, and other living expenses.
  • Your debts: Make a list of all your debts, how much you owe on each one, the interest rates, and any pay schedules.
  • Your savings: Take stock of your savings accounts, including retirement accounts and emergency fund. Also think of things you would like to save for.
  • Your credit score. (If you’re not sure how, you can check out our guide to getting your free credit score.)

“Really give yourself a full picture of your financial situation so you can then go in and identify your best ways to save,” McClary says.

2. Dig into your spending habits

Once you have a high-level view of your finances, take a closer look at how you’re spending your money.

Franco-Cicero says she uses Mint, a money management tool, with her clients to help them categorize their transactions — a process people can easily turn into a habit.

Then, evaluate your discretionary spending to see what’s not necessary or where you can cut back. For example, consider reducing the amount you spend on subscription services or dining out and use the savings to pay off debt or to boost a savings account.

One thing to remember is seasonal expenses, like heating and cooling, McClary says.

“You want to make sure you’re making adjustments to your budget, while at the same time, being mindful of the expense categories that can change on a seasonal basis,” he says.

3. Reassess your credit card situation

A key step in reassessing your debt is taking a look at how much of a balance you carry on credit cards each month, how much you’re paying off each month, and how long it will take you to become debt free at that rate. You can figure this out with a credit card payoff calculator.

“Say [to yourself], ‘Hey, if I continue at the rate that I am going, will I ever be debt free?’” Franco-Cicero says.

Then create a plan to pay off your debt. McClary says the most important thing is to craft it around what motivates you the most. For example, if paying off the credit card with the highest interest rate motivates you, focus on that. If paying off the card with the lowest balance motivates you more, check that off first.

And even if it seems impossible to pay it off, he says there are benefits to chipping away at your credit card balance: Your minimum payments could go down, and using less of your credit line can help your credit score.

4. Start saving for something

We all know that we should be saving, whether it is for an emergency, retirement, or vacation. However, 23% of Americans don’t save any of their income, and only 38% report making good progress toward their savings needs, according to a 2017 survey from the Consumer Federation of America.

One of the best ways to become fiscally fit is to start saving for something that motivates you. You’re more likely to stick with saving toward a goal that you set for yourself, Franco-Cicero says.

If you don’t know where to start, she recommends a so-called “curveball” account.

“Curveball” accounts are similar to emergency funds in that they can help you cover unexpected expenses. The difference is that your “curveball” account would be used for things like replacing the worn-out tires on your car versus using your emergency fund to repair a blown transmission.

Now is also a good time to focus on saving for a house, McClary says, because you’ll have six to eight months to save before the next home-buying season. You can plan how much you need to save by looking at your existing savings, the cost of buying in your desired neighborhood, your debt-to-income ratio, and your credit standing.

No matter what you’re saving toward, McClary says an ambitious goal would be to save 20% of your monthly income between now and December.

If you make $2,000 a month after taxes, that means you would put about $400 toward savings each month. If you start in August, you could save $2,000 toward your goal by the end of the year.

5. Stick to your plan

Establishing where you are and where you want to be is only half of the battle when it comes to being fiscally fit by the end of 2017. Sticking with your action plan, as with all resolutions, can be the toughest part.

To be successful, Franco-Cicero suggests automating everything you can, from paying your bills each month to putting money into your savings account. This way, you don’t have to think about making sure a portion of your paycheck goes toward savings — your bank account will do it for you.

Franco-Cicero also says you should find a “money buddy” who knows your goals and can help you stay on track. Be sure to find someone who also has a financial goal and who will stick to a schedule so you can check in with each other. It’s a good idea to pick someone with whom you feel comfortable talking about money, not someone who you feel passes judgment on your purchases.

“We can be very lenient with ourselves, so you’ve got to find somebody who will hold you accountable,” she says.

Lindwall has had success following a similar approach. She says cooking more at home with her boyfriend has helped her stay on track toward her goal of eating out less.

“The biggest thing is getting someone else on board to do less expensive things with you,” she says.

Jana Lynn French
Jana Lynn French |

Jana Lynn French is a writer at MagnifyMoney. You can email Jana Lynn here

TAGS: , , ,

Advertiser Disclosure

News, Strategies to Save

Why Banks Are Still Being Stingy With Savings and CD Rates

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Mike Stuckey is a classic “rate chaser,” moving money around every few months to earn better interest on his savings. Lately, that has meant parking cash in three-month CDs at a rather meager of 1% or so, then rolling them over, hoping rates sneak up a little more each time.

“It’s at least something on large balances and keeps you poised to catch the rising tide,” says the 60-year-old Seattle-area resident.

Rate chasers like Stuckey still don’t have much to chase, however. The Federal Reserve has raised its benchmark interest rates four times since December 2015, and banks have correspondingly increased the rates they charge some customers to borrow, but many still aren’t passing along the increases to savers.

Why? There’s an unlikely answer: Banking consumers are simply saving too much money. Banks are “flush” in cash, hidden away in savings accounts by risk-averse consumers, says Ken Tumin, co-founder of DepositAccounts.com. Bank of America announced in its latest quarterly earnings report its average deposits are up 9% in the past year, for example – despite the bank’s dismal rates.

“In that situation, there’s less of a need to raise deposit rates,” Tumin says. “In the last couple of years, we are seeing deposits grow faster than loans.”

Banks don’t give away something for nothing, of course. They only raise rates when they need to attract more cash so they can lend more cash.

As a result, savings rates remain stubbornly slow to rise. How slow? Average rates “jumped” from 0.184% in June to 0.185% in July, according to DepositAccounts.com. (Disclosure: DepositAccounts.com is a subsidiary of LendingTree Inc., which is also the parent company of MagnifyMoney.com.)

And while the average yield on CD rates is the highest it’s been in five years, no one is getting rich off of them. Average one-year CD rates have “soared” from 0.482% in April 2016 to 0.567% in July. Locking up money long term doesn’t help much either – five-year CD rates are up from 1.392% to 1.504%.

There’s another reason savings and CD rates remain low, something economists call asynchronous price adjustment. That’s a fancy way of saying that companies are more price-sensitive than consumers.

It’s why gas stations are quicker to raise prices than lower prices as the price of oil goes up or down. Same for airline tickets. Consumers eventually catch on, but it takes them longer. So for now, banks are enjoying a little extra profit as they raise the cost of lending but keep their cost of cash relatively flat.

Time to Ditch Your Savings Account? Not Quite.

For that kind of change, is rate chasing worth it?

For perspective, a 0.1% interest rate increase (10 basis points) on $10,000 is worth only about $10 annually.

It’s, of course, up to consumers whether or not the promise of a little more cash in their savings accounts is worth the effort of closing one account and opening another.

Stuckey says rate chasing doesn’t have to be hard.

“I don’t really find it anything to manage at all,” he says. “(My CDs) are in a Schwab IRA, so I have access to hundreds of choices. They mature at various times, and Schwab always sends a notice, so I just buy another one.”

The low-rate environment has impacted Stuckey’s retirement planning, but he’s philosophical about it.

“I have mixed feelings. In 2008, as I planned to retire, I was getting 5.5% and more in money market accounts. High-quality bonds paid 6 and 7%. So lower rates have had an effect on my finances,” Stuckey says. “But … it has been nice to see young people able to afford nice homes because of the low rates. My first mortgage started at 10.5%.”

When will more consumers sit up and notice higher savings rates – and perhaps start pulling cash out of big banks, putting pressure on them to join the party?

“I think 2% will be a big milestone,” Tumin says. “That will be a big change we haven’t seen in five years.”

If you’re really frustrated by low rates from traditional savings accounts and CDs, Tumin recommends considering high-yield checking accounts, a relatively new creation. These accounts can earn consumers up to 4%-5% on a limited balance – perhaps on the first $25,000 deposited. The accounts come with strings attached, however, such as a minimum number of debit card transactions each month.

“If you don’t mind a little extra work … you are rewarded nicely,” Tumin says.

Bob Sullivan
Bob Sullivan |

Bob Sullivan is a writer at MagnifyMoney. You can email Bob here

TAGS: , , ,

Advertiser Disclosure

Featured, News, Strategies to Save

6 Things You Need to Know About Amazon Prime Day

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Online shoppers are gearing up for Amazon’s third annual Prime Day — a period of deep discounts on many Amazon items in mid-July. Since the company began Prime Day three years ago, it’s become the summertime answer to Black Friday.

But what’s all the fuss really about? In years past, there have been complaints that the site’s sale items aren’t all that exciting, with the hottest items selling out too quickly for many to take advantage of the deals.

Amazon hasn’t said much about what 2017’s Prime Day will look like, but to help you prepare, here are some things you need to know.

Q: When is Amazon Prime Day?

A: July 10-11

Prime Day kicks off at 9 p.m. EST on July 10, when the best deals will be posted online, and run for the next 30 hours.

New deals will be offered every five minutes, according to Amazon.

Q: Where can I find the best deals on Amazon Prime Day?

Electronics

Benjamin Glaser, features editor at DealNews, says that last year, Amazon Prime shoppers saved about 30% to 40% on electronics. Globally, people bought over 90,000 TVs, and in the U.S., people bought over 200,000 headphones during the 2016 Prime Day, according to an Amazon press release. However, Glaser cautions that TV deals tend to sell out fast.

It’s a safe bet that the best deals will be on Amazon-branded electronics, such as the Echo, Kindle, Fire tablets, and Fire TV products.

Glaser is anticipating seeing $15 off of the Fire TV Stick, which is currently at $39.99. The Echo, priced at $179.99, dropped to $129.99 on Monday June 26 for the day — the best deal on it this year.

It’s also likely that there will be deals on electronics that tie into the Amazon Alexa ecosystem, such as Philips Hue smart lights products — the starter kit is priced at $173.99 — and smart thermostats such as Nest, which is currently $246.85 (at the time of this writing).

Toys and more

Also, considering that 2 million toys and 1 million pairs of shoes were bought globally last Prime Day, it’s also likely there will be deals in those departments.

For example, among the best deals last year was $699 for the Segway miniPRO Smart Self Balancing Personal Transporter, which at the time was the lowest price for it on Amazon by $300, according to DealNews. The game Exploding Kittens: A Card Game was also on sale for $15, the lowest price on Amazon by $9 at the time.

Expect some products to have record low prices for Amazon.

“We have confirmed over the last two years that a lot of the prices rival the best prices we see on the site all year,” Glaser says.

Q: How long will deals last on Amazon Prime Day?

A: Amazon promises new deals every 5 minutes starting at 9 p.m. EST on July 10.

Some deals will expire in mere minutes, while others will last several hours, and some will last for the duration of the sale event. Each deal will have a timer that shows how long it is available.

Q: How do I know when an item goes on sale?

A: The Amazon App specifically includes a feature called “Watch a Deal” that will let you know when a deal you’re interested in is about to go live.

You also can join a waitlist (by selecting that button on the page) for deals that are 100% claimed.

Q: Do I need to be an Amazon Prime member?

A: You must be an Amazon Prime member to access the Prime Day deals. A Prime membership costs $99 a year or $10.99 per month and includes a number of other perks. Recently, Amazon announced a reduced price for Prime membership for low-income households.

“So, if that [$10.99] is less than what you think you’ll save on the stuff you want to buy [on Prime Day], then it’s a worthwhile investment,” Glaser says.

Amazon also offers a 30-day free trial, so if you haven’t had Prime before, you can use that to participate in Prime Day.

“This might be a good month to give Prime a test drive and see if you get good value out of it,” Glaser says.

Q: How will I know when they announce deals?

A: Glaser says Amazon will likely soon start releasing ads for some of the deals, so keep an eye out for them. Look particularly at Amazon products, electronics, small kitchen appliances, and shoes. Plan what you want to buy and set a shopping budget.

Since some deals will only be available for a certain time, you might want to set alerts for items. If you don’t already have an app that you use to track prices on Amazon, Glaser recommends the free apps CamelCamelCamel or If This Then That.

With all of the deals, it will be easy to buy things you weren’t planning on and don’t need. Glaser cautions against getting swept up in these deals and recommends sticking to your budget on Prime Day.

“If you see something that’s 95% off, you might spring to buy it and not really think about how much money you’re still spending, and whether it’s something you actually want,” Glaser says.

Jana Lynn French
Jana Lynn French |

Jana Lynn French is a writer at MagnifyMoney. You can email Jana Lynn here

TAGS: , , ,

Advertiser Disclosure

Featured

11 Sephora Savings Hacks Everyone Needs to Know

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

If you can name your top 5 favorite beauty vloggers on YouTube, you’ve probably heard of a little makeup wonderland called Sephora. Bonus points if you’ve ever walked into the makeup emporium to touch up your brows with a free sample and left half an hour later and $100 poorer.

The LVMH-owned beauty store has been fairly successful since it first opened in 1969. It currently boasts 2,000 retail stores worldwide and around 15,000 of your favorite products. All of that revenue doesn’t have to come at the expense of your wallet.

We’ve done some digging to find 12 ways you can save money the next time the smell of perfume whisks you into your local Sephora retailer’s checkout counter with your credit card in hand.

  1. Loyalty Pays

Sephora is good to those who are loyal to the brand. Save on products and services when you sign up for the retailer’s loyalty program, Sephora Beauty Insider.

When you sign up, you’ll get points for each dollar spent in-store and online. The program has three tiers: Beauty Insider, VIB, and VIB Rouge, depending on how much money you spend with the leading makeup retailer.

Beauty Insiders — aka Sephora shoppers who spend less than $350 a year — get a free birthday gift and free classes, plus the option to pay $10 a year for unlimited free shipping privileges. VIBs, or Very Important Beauty Insiders, get all of the above plus additional exclusive savings and one free custom makeover for an annual $350 spent on merchandise.

Spend $1,000 a year in merchandise purchases, and you’re rewarded with the VIB Rouge level. Rouge offers all of the aforementioned perks, but you won’t need to pay the additional $10 a year for unlimited free shipping. You’ll also get other exclusive perks like unlimited custom makeovers.

  1. Get freebies by scanning the Beauty Deals page

Sephora has an entire page of its website dedicated to savvy shoppers like yourself. It’s appropriately titled Beauty Deals. It’s a little tricky to find the deals page as there isn’t a direct link to the page on Sephora’s home page, so make sure to bookmark www.sephora.com/beauty-deals.

It’s where you’re sure to find all of Sephora’s promotional codes for additional discounts and samples. You’re allowed a maximum of three free samples at checkout.

  1. Buy gift sets to save on individual products

If you’re going to purchase one or two items from a product line, you might be better off just buying a gift set. For example, the Yves Saint Laurent Black Opium Beauty Gift Set will run you $100 and comes with the Black Opium Eau de Parfum ($91), Rouge Pur Couture lipstick ($37), and Mascara Volume Effet Faux Cils ($32).

$91 + $37 + $32 = $160 value.

By getting the set, you’d save $60.

  1. Size up and save

If you buy something regularly, purchase the value size rather than smaller sizes. You’ll almost always spend less per ounce that way. For example, the regular 4.2-oz. bottle of Clinique’s Dramatically Different Gel will run you about $6.24 per ounce, whereas the smaller, half-ounce travel size option costs about $10 per ounce.

  1. Stock up on free samples in store

If you want to try out a product that’s way, way, out of your normal price range, get a free sample in-store to try before you buy. That way you won’t waste the full-size perfume you bought because of the brand more than the scent.

You are allowed up to three free samples per department in-store, and can get even more freebies online with beauty deals. Make sure to take home a sample of that expensive foundation to see if you can apply it as smoothly in your bathroom as the artist did in the store’s lighting.

Samples can also come handy when you’re traveling. So stop by Sephora and stock up on samples instead of travel-size bottles for short vacations.

  1. You can and should return products you don’t like

If you didn’t follow amazing aforementioned advice to try before you buy, it’s OK, I don’t listen to my mom either. What’s great is that at Sephora, you CAN make returns, even on makeup. Learn the return policy: you can return opened goods within 60 days in gently used condition.

  1. Shop out to in, bottom to top

Like at grocery stores, products are arranged at Sephora so that you see what costs the most, first. Check out items on the outer edges and on the bottom shelves first. They are typically cheaper than the ones you’ll see displayed at eye level according to Real Simple.

  1. Shop semi-annual sales

Sephora holds major semi-annual sales twice a year. This is another instance where your loyalty pays. Only Beauty Insiders get access to the major sale, when products are up to 20% off. The semi-annual sales typically happen in the spring and fall, usually mid-April or mid-November, and the sales normally last a few days.

  1. Use discounted gift cards

Purchase a gift card someone else is getting rid of at a discount before you shop. You can buy discounted gift cards for Sephora or department stores like Macy’s or JC Penney’s with in-store Sephora counters.

To find discounted gift cards, use sites like Gift Card Granny, which aggregates discounted gift card offers from around the web for you. Other great resources are Raise, WalletWhiz, and Cardpool.

Right now, we found Sephora gift cards available for up to 9% off through Gift Card Granny.

  1. Download a rebates app

You can get even more of the money you spent at Sephora when you shop using rebate smartphone apps like Ibotta or Checkout 51. For example, when you take a picture of your receipt after spending at least $50 at Sephora, you get $5 back on Ibotta.

With Checkout 51, you’ll browse local offers at stores, then take a picture of your receipt, and your savings will be credited to your account. When your account hits $20, you can cash out.

  1. Learn to DIY

You can save a lot of time and money on makeovers at Sephora by learning a few of the artist’s tricks yourself. Learn how to sculpt the perfect brow or apply flawless foundation at one of the retailer’s free 2-hour beauty classes.

Check online or ask the manager at your local Sephora for find out when and how to sign up for classes. If you have about 15 minutes and want a more personal experience, you can have a professional explain their process to you during a mini-makeover any day.

  1. Like, follow, subscribe

Following Sephora on its social media channels is the most obvious and easiest way to save on goods and snag freebies. Look out for posts on Sephora’s Facebook and Pinterest accounts to hear first about current sales and free samples.

 

 

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at brittney@magnifymoney.com

TAGS: , , , ,

Advertiser Disclosure

Featured

Cats vs. Dogs — Which Pet Is More Affordable?

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

So you think you’re ready to bring a fluffy bundle of joy home, but you can’t decide between getting a cat or a dog?

MagnifyMoney might be able to help, at least where your budget is concerned. We broke down the costs of owning a cat and a dog, so you can decide which of the most popular pets in the U.S. you’d like to bring home next.

We didn’t just stop at determining the annual cost of kibble or Fancy Feast.

We looked at how much a dog and cat costs in the first year of ownership — and how much each pet costs over their lifetime.

Check out our findings below.

Upfront Costs

These are the initial start-up costs of getting a cat or a dog — adoption fees; accessories like leashes and food dishes; and veterinary services like spaying/neutering and vaccinations. To get these estimates, we used the latest data from Petfinder.com

UpfrontCosts (1)

The Winner: Cats

Your first-year expenses as a cat or dog owner could range anywhere from $125 to a little more than $1,000 depending on the size, breed, and accommodations your new pet would require, according to Petfinder.

Overall, you’d shell out less for a cat up front — as little as a $125 if you take advantage of savings during adoption, shop around to save on your initial veterinary costs, and use coupons when buying accessories or toys for your furball. On the high end, if your kitty is an expensive breed or you simply like to splurge on your feline companion, you’d spend around $635 during the first year.

Recurring Annual Costs

The costs don’t end after you bring Fido (or Fluffy) home. You should budget about $1,125 yearly on vet visits, food, boarding, toys, and grooming for a cat, and about $1,641 on a dog, according to the American Pet Products Association’s most recent National Pet Owners Survey.

RecurringCosts (2)

THE OVERALL WINNER: CATS

If the decision came down to your wallet, cats are significantly cheaper than dogs, costing about $13,625 to $17,510 in a lifetime, compared to dogs at $16,607 to $22,423.

We based the lifetime costs on the average lifespan of dogs (10-13 years) and cats (12-15 years).

But even though cats typically live two to three years longer than dogs, they still come out more affordable in the end.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at brittney@magnifymoney.com

TAGS: , , ,