Advertiser Disclosure

News

Best Places for Women Entrepreneurs

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

start-up business loans
Source: iStock

While women have been making strides in the world of business leadership in the past decade, American companies are still far from progressive and equal in this regard. Of incorporated businesses across the top 50 metropolitan areas in the U.S., just 30% are led by women, according to a new study by MagnifyMoney.

But where are women entrepreneurs seeing the most success? We surveyed the 50 largest U.S. cities to find the best places for women who want to be their own boss, launch a business — or both.

To create our rankings, we looked at data about women entrepreneurs across four different categories. The first two related to raw income and were double weighted in our analysis, while the last two related to the number of women entrepreneurs and business owners in the metro area.

What we considered in our analysis:

Business income for self-employed women. We ranked cities on both median and mean business income of self-employed women. By including both metrics, the rankings “capture both the more common experience of self-employed women as well as monetary success overall,” said Kali McFadden, senior research analyst at MagnifyMoney.

Ideally, both numbers would be in the higher end. A wide range between the two, however, could indicate a broader range of potential earnings for self-employed women in that area.

Business earnings for self-employed women compared with wage earners. We also ranked metro areas on the difference in earnings between self-employed women and those working for wages (both median and mean).

In general, self-employed women do earn less median and average incomes than people with earned income. “But a smaller gap between each group’s income implies better a potential upside for those going into business for themselves,” McFadden said.

The rate of self-employed and “incorporated” women. The rankings considered the percentage of employed women who work for themselves. “A higher rate of self-employment suggests that the city’s opportunities and ease of entry into business are better for women,” said McFadden.

Additionally, we looked at how many of those self-employed women have an incorporated business. “A higher number means that more women are seeing enough success and permanence to think about the legal and tax implications” of the businesses they own, McFadden pointed out.

Parity of business ownership between women and men. We looked at the percentage of total self-employed workers and incorporated business owners who are women.

Cities with higher percentages of self-employed women and women business owners could indicate a more even playing field, “where women are seeing the opportunities and conditions to break out on their own,” McFadden said.

Key findings:

  • San Francisco is the best metro for women entrepreneurs by a wide margin. Austin, Texas came in the second spot, and San Jose (Silicon Valley) was third. Cleveland, Pittsburgh, and Philadelphia came in last for women entrepreneurs.
  • Women entrepreneurs are set up for success on the West Coast. Five out of the top 10 metros are in California, with another in Washington. Tennessee is also hospitable to women entrepreneurs, with two metros in the Volunteer State landing on our list at the 4th and 5th spots.
  • There is a long way to go before we reach entrepreneurial parity — meaning an equal number of women and men starting and heading up young businesses. The average percentage of self-employed people on our list of metros who are women is a scant 37%, and the number is even lower among people with incorporated businesses: 30%.
  • Most self-employed women are not getting by on their business income. The highest median income we uncovered for women-led businesses is just over $10,000 and the lowest is zero. And across the 50 metros we reviewed, median business incomes amount to just 10% of the local median wages for women. “This is not surprising,” McFadden noted, “as self-employment could mean anything from having an Etsy store or offering a few hours of labor on TaskRabbit, to owning a bed-and-breakfast or gas station, to being a high-dollar commercial realtor or blockbuster novelist.”

The top 10 places for women entrepreneurs

In the best cities for women entrepreneurs, women who work for themselves are more likely to earn a decent living by doing so.

These cities also tend to have higher rates of women who are self-employed, a sign that the conditions could be favorable to workers ready to go at it alone.

Here’s a deeper look at the best U.S. cities for women entrepreneurs.

1. San Francisco

At No.1, San Francisco ranked at the top largely due to having the highest business incomes earned by women working there. The median business income is $10,378 among women in this city, and women’s average business income is $31,880.

In addition to their higher business incomes, women entrepreneurs are also more common in the San Francisco. Just over 10% of San Francisco’s women earners work for themselves. Looking at business owners, 41.7% of the city’s self-employed workers are women, and 32.1% of incorporated businesses are owned by women.

2. Austin, Texas

Women’s business earnings in Austin were on the higher end in terms of dollars, with the median at $8,262 and the average at $25,345.

But they’re among the highest when comparing women’s business income with the women’s earnings through wages. The average self-employed woman or business owner in Austin, for instance, makes nearly half (48.1%) what the average income for women in the city.

3. San Jose

A neighbor to San Francisco, San Jose is a similarly ideal place for women entrepreneurs. The city has one of the highest average business incomes for women, at $30,344 per year.

San Jose also has higher rates of women who are self-employed (41.1%) as well as incorporated businesses owned by women (32.2%).

4. Memphis, Tenn.

Memphis stands out for the higher median business incomes; most women entrepreneurs make around $9,068 in business income, second only to San Francisco. Plus, Memphis women have the highest business incomes when compared with local women’s earned income, earning about 25% of a typical woman’s wage in this city.

However, the average business income for women in Memphis is just twice as high as the median, “suggesting that the range of income isn’t that great,” McFadden said.

5. Nashville, Tenn.

Next is another Tennessee metro, Nashville, which is a standout when it comes to average business incomes for women. At $23,373, self-employed women in this city make just under half a typical women worker’s earned income. This is a sign that striking out on their own is a viable way for women to earn a decent living in Nashville.

That’s great news, given that Nashville has fewer women working for themselves and incorporating. Seven percent of women workers are self-employed, but just one in five of self-employed women have an incorporated business.

6. Los Angeles

Then there’s Los Angeles, which has the highest portion of self-employed women workers of any city on this list — 10.9%. Women entrepreneurs in LA can also expect a business income on the higher end, with the median at $7,758 and an average of $20,945.

7. San Diego

The next major California city to make the list is San Diego, which offers women a similarly attractive business landscape. Among women earning a business income in San Diego, the median is $8,060 and the average is $20,949 (both slightly higher than what LA’s women entrepreneurs bring in).

San Diego also has high rates of self-employment among women. One in 10 women workers in the city is self-employed, and 39.3% of self-employed workers are women.

8. Sacramento, Calif.

Sacramento lands at No. 8 by faring above average in most ranking factors, showing it’s a solid place for women entrepreneurs to take the leap into starting a business.

Take women’s business incomes as proof; the median at $7,053 and the average at $23,596 show Sacramento’s women entrepreneurs are able to outearn similar cohorts in other major U.S. cities.

9. Seattle

In Seattle, the average income for self-employed women is five times higher than the median — $22,713 to $4,534, respectively. “[This] suggests that while most self-employed women aren’t making much money, those who are are doing well are doing very well,” McFadden said.

Another factor backs up this insight: Among the top 10, Seattle has the highest rate (30.6%) of self-employed women who are incorporated. Plus, the city has high rates of parity in women business ownership: 42.1% of self-employed workers are women, as are nearly one-third of incorporated businesses owners.

10. Cincinnati

Rounding out the list of the best cities for women entrepreneurs is Cincinnati. Self-employed women earn decent business incomes in this Ohio city, with the median at $7,556 and an average of $21,432.

These earnings are high enough to compensate for lackluster rates of women working for themselves. Just 5.4% of Cincinnati’s women workers are self-employed, and these women account for 35.4% of all self-employed workers in the city.

In the 10 cities that ranked last on our list, self-employed women are earning far less than their counterparts in other cities. Take a look at the worst city, Cleveland, where women’s median business income is $0 — meaning at least half of self-employed women there don’t make anything at all.

The worst cities also have fewer women who have incorporated a business or taken the plunge into self-employment. This might make it harder for entrepreneurial women in these metro areas to find women mentors and women-centered entrepreneurial networks that can provide support vital to a new and developing business.

Placement at the bottom of this list could also signal that these cities are inhospitable to self-employed workers or new business owners in general — for both men and women alike.

That’s not to say it’s impossible for women entrepreneurs to start and build successful businesses in these cities.

Women living in these worst cities shouldn’t assume that their business endeavor will be doomed before it even begins. But they would be wise to practice extra caution in their plans to transition to self-employment or business ownership.

How women business owners can beat the odds

Living in one of the best cities won’t guarantee automatic success any more than a woman starting a business in one of the worst cities will fail. Wherever they live, women entrepreneurs must overcome obstacles and chart their own path to self-employment.

For women ready to take their first steps toward entrepreneurship, these steps can help them get further faster.

  • Start small but dream big. Even if you’re not ready to quit your job and hustle full time, don’t put your entrepreneurial goals on the back burner. Build out a timeline to get you closer to self-employment or starting a business, filled with small and actionable steps you can start taking now. A side hustle can be the perfect way to get a feel for being your own boss without giving up your main source of income.
  • Explore the business landscape of your specific city. Research local regulations and bylaws that could be pertinent to your business idea. For example, you can start checking out everything from business licensing laws to local small business tax breaks to help build out your business plan. You can also research local small businesses to see which are doing well and why, to get insights into how to set your own venture up for success.
  • Seek out local resources for women entrepreneurs. Many cities recognize the important role small businesses, startups and self-employed workers play in fueling local economies. And some have responded with support systems designed to foster growing businesses — and women entrepreneurs who lead them. One example is San Francisco-based Girls in Tech, a nonprofit founded by Adriana Gascoigne,which seeks to empower and educate women (including entrepreneurs) in the tech industry. Even the bottom-ranked city, Cleveland, has local organizations focused on supporting women entrepreneurs, such as women -focused business development courses from Aviatra Accelerators and an annual Female Entrepreneur Summit.
  • Network with other self-employed women. Don’t underestimate the power of meeting, working with and learning from like-minded, entrepreneurial women. The local organizations mentioned above can be the perfect way to connect with other women entrepreneurs in your area and find a new friend, mentor or even a future business partner. You can also look for co-working spaces, entrepreneurship-centered meetups or social events for local businesswomen to grow your network.

Methodology:

Each of the 50 largest metropolitan statistical areas (“MSAs”) was scaled against each other, so that the most positive result for each factor was 100 and the most negative was 0, on the following eight factors from the U.S. Census Bureau’s American Community Survey for 2016, either available through FactFinder or calculated from microdata housed in IPUMS USA. The results for each factor were then weighted according to the notation below, and the sum was divided by eight (rounded to one decimal point), for a highest possible score of 100 and a lowest possible score of 0.

  • Median business income for self-employed women (double weight)
  • Average business income for self-employed women (double weight)
  • Ratio of median business income to median earned income for the metro (double weight)
  • Ratio of average business income to average earned income for the metro (double weight)
  • Percentage of working women who are self-employed (single weight)
  • Percentage of self-employed women who are incorporated (single weight)
  • Percentage of self-employed people who are women (single weight)
  • Percentage of incorporated people who are women (single weight)

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Elyssa Kirkham
Elyssa Kirkham |

Elyssa Kirkham is a writer at MagnifyMoney. You can email Elyssa here

TAGS: , ,

Advertiser Disclosure

News

What Midterm Election 2018 Results Mean for Your Student Loans

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

From health care to the economy, voters had many concerns in mind as they headed to the polls for this year’s midterm elections.

But one major issue that might not have gotten as much attention in news coverage was the government’s handling of student loans, a subject which impacts 44 million Americans. As our national student debt has exceeded $1.5 trillion, many borrowers are hoping for relief.

But while Democrats call for an expansion of financial aid and forgiveness programs, conservatives warn that increasing aid could be a burden for taxpayers.

Given the election results that gave the Democratic Party a majority in the House of Representatives, we might see them looking to influence the education policies moving forward. Still, they won’t have much hope for passing their own legislation without working out deals with the Republican-led Senate and White House.

On the other hand, a few ballot measures across the country and the presence of some lawmakers with a personal interest in student debt are enough to cast educational debt in a bigger spotlight.

Whether you’re a student, loan borrower or parent preparing for the costs of colleges, find out what the 2018 midterm election results could mean for you.

Democrats to weigh in on education policies

While some races are still too close to call, Democrats have locked in a majority in the House of Representatives, taking the gavel from the Republicans, while the GOP has added to its majority in the Senate.

This shift in the House could mean Democrats have greater influence when it comes to Department of Education policies, particularly those related to for-profit colleges and student loan forgiveness programs.

Critics of Secretary of Education Betsy DeVos have accused her of protecting for-profit schools at the expense of students. They have also objected to her efforts to scale back certain Obama-era protections, such as borrower defense to repayment, which discharges loans for defrauded borrowers.

Democrats have sent letters objecting to education policies under the Trump administration, but as the minority, they were unable to conduct oversight of the department. Now that they lead the House, however, Democratic members will likely be active on this front.

“Expect a Democrat-led House, for instance, to conduct hearings, demand documents and press the Trump administration on its appointment of officials with ties to for-profit colleges — and its reversal of Obama-era policies meant to crack down on the industry,” wrote Michael Stratford, education reporter for Politico on Tuesday.

Ally Bernstein, legislative counsel for the Association of Young Americans (AYA) agreed, “The [Democrats will] hold the department’s feet to the fire on its controversial rewrites of rules governing for-profit institutions, including whether federal student loan borrowers are protected from continuing to repay loans if these institutions committed fraud against them.”

The free-college movement shows up at local level

When running for president in 2016, Sen. Bernie Sanders (I-Vt.) supported the movement to provide free public college for all. In 2017, Sanders and Sen. Elizabeth Warren (D-Mass.) proposed a bill that would provide $41 billion a year to states to help eliminate tuition.

While there hasn’t been much progress on the national level, various state politicians have voiced their support for free community college during this midterm election season. For example, Ned Lamont, who won his bid for governor of Connecticut, supports two years of community college for state residents who agree to remain in state following graduation.

In fact, both the Republican incumbent Larry Hogan and his Democratic opponent for the governor’s seat of Maryland, Ben Jealous, proposed expanding Maryland’s free tuition college program, which currently provides no-cost community college to residents. Hogan, who won the race, said he supported expanding the tuition-free program to include four-year institutions.

And it’s not just the state governments. Seattle voters approved a measure to offer two free years of community college for public school students. The move will be funded by a property tax hike which the city predicts will raise over $600 million over several years.

So although the free college movement hasn’t gained much traction nationally, these city- and state-level victories could be signs of changes to come.

Politicians have student debt, too

For some politicians in this election, student loans are a personal issue. According to CNBC, one in 10 current members of Congress are repaying student loans, either for themselves or a family member.

Some of them are also trying to address the issue more broadly. Consider Rep. Tom Reed (R-N.Y.), who was re-elected to the House Tuesday.

“This is an area that affects the futures of so many young men and women, and it’s time to address the issue before it gets even worse,” Reed told Student Loan Hero in an interview earlier this year. “We’re shackling our children and grandchildren to debt if we don’t do something.” (Note: Student Loan Hero and MagnifyMoney are both part of LendingTree.)

Reed introduced a bill this year that would force some universities to use a portion of their endowments to help low- and middle-income students.

And there may be more such elected officials on the way, as millennials join the political arena and move up the ranks of state government.

Natalie Higgins of Massachusetts and Matt Lesser of Connecticut are two re-elected state representatives who have been open about their struggles with student debt.

Higgins, for example, borrowed more than $130,000 to pay for law school.

Lesser, also a student loan borrower, has made student debt a signature issue in his past few years on Connecticut’s state senate. In 2015, he sponsored a “student loan bill of rights,” aimed to make student loan companies follow consumer protection rules.

Committed to easing the burden for student borrowers, both Higgins and Lesser introduced a state bill requiring student loan servicers to abide by consumer protections.

“Having representatives who have experienced or are still experiencing student loans and understand the burdens and problems is really important,” said Ben Brown, founder of AYA.

Student loan legislation remains murky

With divided affiliations in Congress, competing visions for higher education from the Republicans and Democrats look less likely to become law.

Late last year, Republicans proposed the PROSPER Act, which would reduce regulation of for-profit schools, limit student loan forgiveness and increase funding for community colleges and apprenticeships, among other things.

Democrats, meanwhile, have proposed the Aim Higher Act, which would expand Public Service Loan Forgiveness (PSLF), increase funding for Pell Grants and revise income-driven repayment plans.

While the Republicans could pass PROSPER during the “lame duck” session before the new Democratic-majority House sits, any overhaul of the student loan system by the new Congress would require a deal between the two sides.

Student loans have become a political issue

With millions of Americans dealing with student loans, and with the cost of college higher than ever, it’s not surprising that higher education issues are increasingly part of the political conversation.

Now that Democrats have won a majority in the House, the current push to roll back Obama-era protections is likely to come under a lot more scrutiny. Likewise, previous plans for major changes to student debt through the PROSPER Act might need bipartisan consensus to move forward.

As a student loan borrower, make sure to stay informed about any changes to federal programs, such as income-driven repayment or loan forgiveness. Also know that even though the election is over, you can still make your voice heard. Contacting your elected officials is easy and can have an impact if enough people take action.

Even if these debates feel far away, they could have a very real effect on your life and finances.

This report originally appeared on Student Loan Hero. Both MagnifyMoney and Student Loan Hero are part of LendingTree.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Rebecca Safier
Rebecca Safier |

Rebecca Safier is a writer at MagnifyMoney. You can email Rebecca here

TAGS: , , ,

Advertiser Disclosure

News

Ebates for Groceries: 4 Grocery Rebate Apps Reviewed

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

iStock

People who frequently use rebate websites may have wondered if there are equivalent sites for grocery shopping — sure there are, and plenty of them.

As a quick refresher, popular sites like Ebates offer coupons and cash rebates to customers who shop at partner retailers such as Macy’s or Walmart. San Francisco-based Ebates is owned by Rakuten Inc., one of Japan’s largest online shopping malls. When you click on an Ebates link through the website or app, an email, or by installing its browser extension to start shopping, you’re eligible to receive cash back. You can also receive cash back at the store by linking a credit or debit card to your Ebates account.

Grocery store rebate apps work much the same way, with an extra step of submitting your receipts after you shop. There are a slew of such apps including Checkout 51, SavingStar and Receipt Pal, plus the four we’re reviewing below. Each of these turns your grocery receipts into cashback awards and each has its own special features, strengths and limitations.

Ibotta

Ibotta allows users to earn cash rewards for everyday purchases, both in-store and online. Partnering with almost 200 grocery store chains in the country, the Denver, Colo., based company offers rebates on a wide variety of fresh produce, liquor, processed foods and personal care products and household supplies.

How it works

Step 1: Find offers

Before your trip to the grocery, find offers on products from that particular grocery store listed on the app, and claim the ones you’ll need. Each deal is worth between 25 cents and $5. Some deals are only valid for items at selected stores, but there are also offers applying to products sold at any partnering grocery store. From time to time, there are rewards worth 25 or 50 cents just for submitting a receipt, even though you didn’t purchase anything eligible for cash back.

Step 2: Go shopping

You go buy groceries, including items that you’ve claimed cashback offers on. Keep the receipt.

Step 3: Redeem awards

Redeem your offers by taking a photo of your receipt via the Ibotta app. The app will match the items on the receipt to the offers previously claimed and deposit the cash into your account within 48 hours.

Note: your receipts are valid for rebates within 7 days of purchases, so don’t wait too long to submit your receipt.

You can also link your loyalty card or account with Ibotta, so that the app receives an electronic submission of your receipt to be automatically reviewed for cash rewards.

Step 4: Receive cash

Ibotta will deposit your credit within 48 hours. You can withdraw the funds from your account and transfer them to your Venmo or PayPal account every time once you’ve accumulated $20 of cash credit. Another option to use your earnings is to buy gift cards from stores partnering with Ibotta.

Where it works

Ibotta partners with nearly 200 grocery stores, drug store and wholesale markets. To name a few: Whole Foods Market, CVS, Walmart, Kroger and Costco. Find the entire list of stores where you can use Ibotta here.

Extra bonus

Beyond regular offers, you have opportunities to earn additional credit through special offers. A few examples below:

  • Once you redeem your first in-store offer, you earn an extra $2 cash from Ibotta.
  • You get a $5 bonus when a friend signs up through your referral.
  • When you reach $10 in credit, Ibotta will match the earnings with an extra $10.

Pros and cons

Pros

  • Cash rewards are straightforward and are deposited to your account within 48 hours.
  • Deals are available on a variety of groceries — it’s the only app we reviewed that offers rebates on fresh foods.
  • You can use Ibotta in some of the biggest grocery chains in the country.
  • Beyond groceries, you can earn cash credit from purchasing electronics, clothing, gifts, home and office supplies, restaurant dining both online and in-store.
  • Ibotta is the most outstanding among the four apps we reviewed when it comes to interface and design.
  • Ibotta offers generous bonus awards.

Cons

  • It takes time to browse deals every time before you go grocery shopping.
  • You can’t cash your rewards unless you reach $20, which can take a while to accumulate.
  • It doesn’t work with every grocery store — you can’t use it at mom-and-pop shops or bodegas.
  • Offers don’t last forever; sometimes they expire before you remember to redeem them in time.
  • After you claim offers, Ibotta will often ask you personal questions such as your age, gender, race and consumption references. You can’t proceed without answering, but Ibotta is not transparent as to why they are collecting such data and how they will use such information.

Receipt Hog

Receipt Hog is unique in the sense that it pays you for uploading pictures of your receipts for market research. Any receipt will work, whether it’s from a large grocery chain or corner bodega.

How it works

Step 1: Submit receipts

You earn coins from your receipts from any store, depending on the amount of money you spent. You earn:

  • 5 coins for a receipt total of less than $10
  • 10 coins for a receipt total of $10 to $50
  • 15 coins for receipt total of $50 to $100
  • 20 coins for a receipt total of more than $100

Note: A receipt must be uploaded to the app within 14 days of the transaction date. You can submit up to three receipts from the same store with the same transaction date and up to 20 receipts per week.

Step 2: Redeem points

Once you reach 1,000 coins, you’ll be eligible for a PayPal cash redemption or an Amazon gift card.

  • 1,000 coins = $5
  • 2,900 coins = $15
  • 4,300 coins = $25
  • 6,500 coins = $40

The more coins you redeem, the higher the payout — it’s worth waiting until you earn 6,500 coins to maximize your earnings. The redemption request will be approved within seven days.

Where it works

You can submit receipts from any store within the U.S., Canada and the United Kingdom.

Extra bonus

Receipt Hog offers extra points-earning opportunities:

  • You can earn additional rewards and bonuses by completing surveys or challenges, or by uploading more receipts.
  • You can connect your Receipt Hog account with your email address and Amazon to earn bonus points and awards.

Pros and cons

Pros

  • Uploading receipts is the simplest way to earn money, among these selections — you don’t need to spend time looking for eligible offers or deals with Receipt Hog.
  • It’s the most widely applicable app among the four. It can be used in all stores that sell groceries, big and small, and in three countries.
  • You won’t need waste money on items you don’t use just to get cashback rewards.
  • Receipt Hog also allows users to earn rewards from retailers that sell clothes, home improvement and furnishings, office supplies, electronics and arts and crafts and sporting equipment.
  • The company is transparent about its data collection purpose.

Cons

  • If you are a new user, you have to complete an introductory survey before you can access the cash-out page.
  • The reward system is a bit complicated: you earn points based on how much you spend on groceries on one receipt, and then you have to convert from points to dollar amounts to get rewards.
  • Because you earn points primarily by submitting receipts, your earnings from Receipt Hog may not be as substantial compared with other product- or band-oriented rebate apps.
  • There is a waiting period of up to seven days to receive funds, the longest cash-out wait of all apps reviewed.

Fetch Rewards

Unlike Ibotta, which has a limited choice of grocery stores and specific offers on products, Fetch Rewards allows you to scan any receipt from any grocery store in the U.S. Its offers are based on specific brands, not products or stores. Most of the brands partnering with Fetch Rewards are popular consumer brands that sell processed food or personal care items.

How it works

Step 1: Upload receipts

Scan your grocery receipt from any grocery store, convenience store, drug store or liquor store.

Note: Receipts must be scanned within 14 days of the transaction date. You can upload up to 14 receipts in a rolling seven day period.

Step 2: Earn points

If you have purchased a product from one of Fetch Rewards’ participating brands, you’ll earn points for that item. There are three categories of points: base, bonus and special.

Step 3: Redeem rewards

As your points accumulate, you can redeem them for gift cards to popular retailers that work with Fetch Rewards. Every 1,000 points are worth $1. There are four tiers of rewards: 5,000 points, 10,000 points, 25,000 points and 50,000 points; you can earn gift cards with a cash value of $5, $10, $25 and $50, respectively.

Where it works

Any U.S. grocery store that carries the 200+ popular brands in the app.

Extra bonus

You receive 2,000 points after you refer the app to a friend and their first receipt has been approved and accepted.

Pros and cons

Pros

  • Anyone who lives in the U.S. can potentially take advantage of the app.
  • The brands are common enough that most grocery stores carry them.
  • The gift-card options are extensive.
  • Deals don’t expire.

Cons

  • If an account is inactive for 90 days, the points will expire.
  • The deal options are limited to 200+ brands.
  • All offers are for processed foods. You won’t be able to get credit for buying fresh produce with Fetch Rewards.
  • You can’t convert points to actual cash that can be transferred to your own financial account.

BerryCart

BerryCart is a healthy answer to Fetch Rewards. Users earn rewards for buying organic, gluten-free or non-GMO foods. Rather than offering brand-based deals, BerryCart offers are based on specific products.

How it works

Step 1: Find deals

Browse BerryCart deals in the app. The deals are only valid for a certain period of time. It currently offers cashback rewards on nearly 50 items. The app tells you where the item is available near you based on your GPS location; most of the offers are worth from $0.25 to $2.

Step 2: Claim deals

In order to claim a specific deal that BerryCart offers, you have to click the “Fact” button on the offer page to learn information about that product.

Step 3: Upload receipts

After your grocery shopping trip, you can snap a picture of the receipt or the bar code to receive a rebate for the item you previously claimed. BerryCart will deposit the funds into your account within 24 hours.

Step 4: Get cash

Once your accumulated rebates reach $5, you can cash them out by transferring the money to your PayPal account, or you can buy a gift card to iTunes ($5 to $15) or Hotels.com ($10 to $20).

Where it works

You can use BerryCart in any store that carries the items BerryCart currently offers deals on.

Extra bonus

  • You can earn extra cash back by writing reviews on each product.
  • You earn $2 for each successful referral.

Pros and cons

Pros

  • If you buy mostly organic, all-natural, gluten-free and non-GMO foods, this app is for you.
  • It works at grocery stores across the country.
  • You can learn nutritional facts about the things you buy while claiming deals.
  • The credit you earn is deposited in 24 hours, the speediest among all four apps reviewed.

Cons

  • The app is limited, in that not many deals are available on BerryCart. Currently you can only earn cash back on about 50 products.
  • It requires many steps before you eventually receive the awards.
  • The BerryCart app is not very intuitive.

The bottom line

It’s fulfilling to earn cashback rewards just by scanning your grocery receipts. To maximize your earnings, you’ll probably want to check the apps when creating your shopping list. It’s even more gratifying if you can combine your app rebates with store discounts. But it’s also easy to overspend — squelch the impulse to buy something solely for the cash back because you may end up wasting money instead of saving it.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Shen Lu
Shen Lu |

Shen Lu is a writer at MagnifyMoney. You can email Shen Lu at shenlu@magnifymoney.com

TAGS:

Advertiser Disclosure

News

How 4 Teachers Use Side Hustles to Stay Afloat

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

iStock

It’s no secret that American educators as a whole aren’t well-compensated. Throughout 2018, in multiple states across the country, educators have publicly demanded salary increases, benefits and more funding for public education through staged walkouts and marches at state capitols. The protests have intensified a national debate about how we value teachers and the future of public education.And then there are the statistics:

  • The Bureau of Labor Statistics (BLS) reports the average annual pay was $58,780 in 2017 for the nation’s 4.2 million preschool, primary, secondary and special education teachers. The average annual expenditure per consumer — the average spending budget for American households — for 2017 was $60,060.
  • An analysis of teacher salaries by the National Education Association reports the average classroom teacher salary is up 15.2% over the past 10 years. However, after adjusting for inflation, the average salary has actually fallen by $1,823 or 3.0% over the same period.
  • In 2017, teachers earned 19% less than similarly skilled and educated professionals, what’s referred to as a “teaching penalty,” according to the Economic Policy Institute.
  • Nearly one in five teachers leave the profession because of low pay, according to the Learning Policy Institute.

Meanwhile, many teachers have taken on side hustles or second jobs as a solution to stagnant wages in their chosen profession. Some sell their expertise by sharing lesson plans and other tools to be used by other educators via platforms like Instagram and sites like TeachersPayTeachers.

Others have taken on side hustles in the gig economy. Airbnb, for example, reports nearly 10% of its U.S. hosts — more than 45,000 people — are teachers. And, based on a Brookings Institution analysis of BLS data, elementary and secondary school teachers are about 30% more likely to work a second job than non-educators.

With that in mind, MagnifyMoney spoke with four educators about what they do on the side to make ends meet at home, and to share their advice for any educators considering taking on a side hustle.

Lorri Lewis

The 12th grade English teacher worked as a driver for Uber and Lyft to fund her wedding planning business. Now she has a fully funded emergency fund and can afford to take vacations.

Lorri Lewis, 50, of Southfield, Mich., told MagnifyMoney she has always been an advocate for having multiple streams of income. So when the 12th grade English teacher and newly single mother of two saw an opening for a paid wedding coordinator at her church in 2002, she jumped at the opportunity to try out a longtime interest. Then, about five years ago, Lewis started driving for Uber and Lyft to raise the seed money she needed to launch her own wedding coordinating business. Lewis also made Instacart deliveries once her youngest son entered college.

“Having multiple streams of income is a big thing in my life now because I’m at the top of the pay scale and want to do other things in my life, like travel,” said Lewis, referring to educator salary schedules set by school districts. The educator notes because there’s no room for a raise, her pay technically decreased a couple of years ago when she and her co-workers started paying a larger portion of their health care expenses.

Earlier in 2017, Lewis ditched the gig economy in favor of running her business.

“The nice thing about being a wedding coordinator is that it allows me to work on the weekends and the summers, which is “off time” for teachers anyway,” said Lewis.

Where the side hustles help

Lewis’ teacher salary is just enough to cover the basics, including her mortgage, utilities and student loan payments. Until recently, the majority of her side income went to raising her kids as a single parent, completing necessary home repairs and funding her business. She said it was a struggle, but now that both of her sons are out of the house, Lewis has enough to build a financial cushion.

“I’m at the point now where I’m actually accumulating an emergency fund since becoming an educator,” Lewis told MagnifyMoney. Lewis’ career in education spans 20 years.

Advice to other teachers

Lewis’ main suggestion to other educators looking to start a side hustle is to find something you can do in the off-hours, like on weekends and during summers.

“Outside of the emails and phone calls, I schedule rehearsals on Fridays and weddings are on Saturdays, so I still have Sunday to regroup and organize for the new school week,” Lewis said. She added that it’s nice to do something that doesn’t involve working with students or children so teachers can get a break from their work environment.

Cecily White-Cooper

The middle school English for Speakers of Other Languages (ESOL) teacher tutors online, sells T-shirts she designs and creates teaching materials so she can travel and fund the holidays.

Image courtesy of Cecily White-Cooper

Cecily White-Cooper, 40, in Laurel, Md., told MagnifyMoney the predominant side hustle throughout her 18-year teaching career has been tutoring. It was a necessity, both when she started her career in California and when she moved to Maryland.

“I was on the bottom tier of the pay scale,” White-Cooper said. “I was not making enough money either here in Maryland or California in order to survive.”

In California, she began by finding clients on Craigslist and tutoring students at the local public library. After moving to Maryland, she tutored with a company based in Washington, D.C., until it became too much of a hassle to travel and find a babysitter after having twins in 2009. At that point, White-Cooper turned online, teaching English to students in China through VIP Kids.

Though tutoring has always been a staple side hustle, White-Cooper also has other income streams. She designs and sells T-shirts through Merch by Amazon, Redbubble and Etsy. White-Cooper also produces her own teaching material and sells that on TeachersPayTeachers.

White-Cooper’s experience as a lifelong side hustler inspired her blog, TeacherCes.com — from which she earns some advertisement income — and a podcast of the same name, where she shares advice and interviews with other moonlighting educators.

Where the side hustles help

“Initially when I started up until when I got married, every year I had to have something going on. It was hustle, hustle, hustle annually,” White-Cooper told MagnifyMoney. White-Cooper married about eight years into her teaching career. Having a dual-income household means the extra income is no longer a necessity, but she maintains her side hustles because they provide extra money she can use to travel or pay for seasonal expenses like holiday debt.

Advice to other teachers

“There will be something that will suffer,” White-Cooper said. “For me, it’s my social life.” But she makes up for the lost time with vacations once in a while, like a trip to Las Vegas with her friends.

White-Cooper added that having a side hustle and a family has also forced her to manage her time more efficiently to be successful.

“I’m very selective about what I do and where I go in order to get my tutoring projects and all of that finished,” she said. “I do my personal projects during my lunch hour. Then once the day is over at 3 p.m., I eat lunch.”

White-Cooper said she also gets to bed earlier so she can be up early on the weekends to work in her home office before the twins wake up.

Shannon Mitchell

The high school English teacher turned to multilevel marketing companies to get the money her family needed to fix their home sewer system. Now, she runs her own jewelry business.

Image courtesy of Shannon Mitchell

It was a poor housing market, low wages and a broken sewer system that drove high school English teacher Shannon Mitchell, 40, in Fredericksburg, Va., to seek side income through multilevel marketing (MLM) companies in 2013.

“With teaching, there’s no overtime — there is no other way to make money unless you get a second job,” Mitchell said.

Upon realizing there was no other option to earn the funds to fix the sewer system, she told herself, “‘Here I am, 35, and I have to ask my parents for money.’ I was like, ‘No way. I’m taking the bull by the horns.’”

Where the side hustles help

Mitchell became a representative for Rodan and Fields, where she said she quickly made the money she needed to repair the sewer system. She later worked for an MLM called Keep Collective before ending her side gigs with MLMs in 2016.

Although Mitchell says she and her husband have always generally lived beneath their means, she says the side income from her work with multilevel marketing firms helped them have a more flexible lifestyle and extra funds for life’s emergencies. Mitchell no longer has these income streams, but she started a porcelain jewelry business, which she runs outside of teaching, and hopes it will eventually become profitable.

Advice to other teachers

While many teachers seek extra-income opportunities within the world of education, Mitchell recommended not limiting yourself to the profession. She encouraged teachers to follow their interests.

“Don’t feel like it’s all or nothing with teaching,” Mitchell said. “You can be a good teacher and also explore other things as well.”

Finally, Mitchell warns any educators interested in multilevel marketing to “be smart about it” and weigh the pros and cons.

“Don’t buy into their hype,” said the MLM veteran, who mentioned that she didn’t have the control over her business the way she thought she would when participating in an MLM.

Jessica Cioffi

The 5th-grade teacher walks dogs with Wag! to fund humanitarian trips.

Jessica Cioffi, 32, an educator based in Los Angeles, told MagnifyMoney she first looked into dog walking in June 2017.

“The summer came and some of my travel plans had fallen through, so I had some extra time on my hands that I needed to fill,” said Jessica. With travel out of the picture, she said she decided to turn to her other love: dogs. She started walking dogs through an app called Wag!

Where the side hustles help

At first, dog walking was a fun way for her to exercise, hang with dogs and get paid, but when Cioffi realized the income could help her pay humanitarian trips she wanted to do, she was motivated to walk more often. She dog walks up to 8 miles a day on the weekends and in the summer.

Advice to other teachers

Cioffi advised using breaks to earn extra income with a side hustle.

“Summer is a great time to take on extra work, especially if it is something you can find joy in,” Cioffi said. “For myself, regardless of income, Wag! was a great way to interact with animals, get outside and meet incredible people.”

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Brittney Laryea
Brittney Laryea |

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

TAGS: , , , ,

Advertiser Disclosure

News

New Court Ruling Allows Obama-Era Student Loan Protections to Take Effect

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

A U.S. district court ruled Oct. 16 that Obama-era rules to protect student loan borrowers defrauded by colleges will take effect without further delay.

Initially slated for July 1, 2017, this policy was put on hold by Education Secretary Betsy DeVos, who said the rules made it too easy for borrowers to have their student loans canceled.

With this new ruling, the delay has come to an end, meaning that students who attended predatory for-profit schools might now qualify for cancellation of their student loans.

No more delays: Borrower defense to repayment will take effect

The legal decision impels the Department of Education to enact borrower defense to repayment, a policy approved during the Obama administration that offers student debt forgiveness to students found to have been misled by for-profit schools.

Critics of the decision to delay the policy say these schools target vulnerable populations such as veterans and those living in poverty, with former for-profit college enrollment officer Tressie McMillan Cottom telling NPR that these groups are the focus because they “qualify for the maximum amount of student aid.”

The policy is meant in part to address cases in which students take on debt to attend but leave without the skills or certifications they were promised or credits that could transfer to another institution. CNN cited an estimate from The Century Foundation that more than 1,400 schools closed between 2013 and 2015 and meet this description, and that their former students might now be eligible for loan forgiveness.

Almost 48,000 claims for debt forgiveness have been granted so far, most of which were processed under the Obama administration. Currently, 106,000 applicants are waiting for a decision, which should come faster with this latest ruling.

Consumer advocates celebrate ruling; conservatives uncertain

The latest court ruling is a major victory for students, according to consumer advocates.

“Today’s decision is a huge win for defrauded borrowers around the country,” said Julie Murray, an attorney who represented students who sued the Department of Education, in a statement after the announcement. “The rule is finally in effect. No more excuses. No more delays.”

Murray added, “Industry will continue to challenge the rule in court, but we will work as long as it takes to defeat those corporate interests and an administration beholden to them.”

But while students and their advocates support the ruling, it represents a defeat for DeVos and her fellow conservatives, many of whom claim loan cancellation could hurt taxpayers.

Although DeVos’ office said it wouldn’t argue against the ruling, it signaled that it intends to revise these regulations.

“Regardless of what the court decides, many provisions of the 2016 regulations are bad policy, and the department will continue the work of finalizing a new rule that protects both borrowers and taxpayers,” DeVos spokesperson Elizabeth Hill said in a statement.

The policy is one of many dealing with borrower protections that the Department of Education under DeVos has sought to roll back.

News comes on the heels of startling student loan statistics

Student protections such as the borrower defense to repayment policy are more important than ever, as the national student loan debt burden has never been heavier.

According to a report by Bloomberg based on data from the Federal Reserve, student loan debt, which stood at $1.5 trillion as of mid-2018, is the only debt category that has grown continuously since the Great Recession.

Student loan debt has increased by 157% in the past 11 years, while mortgage and credit card debt have gone down.

At the same time, rates of student loan delinquency and default have seen increases. This time last year, there were 4.6 million student borrowers in default on their educational debt.

Find ways to protect yourself as a student loan borrower

If you think you qualify for borrower defense to repayment, you can complete the application on Federal Student Aid.

You will need to provide documentation to support your case, including transcripts, enrollment agreements, promotional materials from the school and the school’s course catalog. If you have questions, contact your loan servicer or BorrowerDefense@ed.gov for guidance.

More generally, if you have student loans, educate yourself about your options for repayment and forgiveness. There are a variety of ways to get your loans discharged or forgiven, especially if you commit to working in a public service organization or a high-need area. Plus, some employers now offer a student loan repayment assistance benefit to help employees shed their debt.

Even if you don’t qualify for loan forgiveness, you could adjust your payments on an income-driven repayment plan or extended repayment plan. Or if your budget allows, you could make extra payments to get out of debt faster.

Many consider our national student debt to be a crisis, and Federal Reserve Chairman Jerome Powell has said it has long-term negative effects on borrowers and could hurt economic growth. But by finding the right strategy for your debt, you can avoid default and the harmful consequences that go with it. And hopefully, U.S. education officials will implement rules to help borrowers manage their debt and not stand in their way.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Rebecca Safier
Rebecca Safier |

Rebecca Safier is a writer at MagnifyMoney. You can email Rebecca here

TAGS: , ,

Advertiser Disclosure

News

Study Shows Student Debt Can Kill 75% of Millennials’ Average Net Worth

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

It’s no secret that millennials are swamped with student loan debt. While more millennials have obtained bachelor’s degrees than those in generations past, they also borrowed the most to earn those degrees. As of 2018, outstanding student loan debt in the U.S. surpassed $1.48 trillion, almost one-and-a-half times what Americans owe on credit cards.

According to a MagnifyMoney analysis of Federal Reserve data, all this debt is hampering millennials’ chances for long-term financial success.

In fact, this study revealed that the average net worth of a millennial with student loans is only 25% of the net worth for a fellow millennial without them. What’s more, the data suggest student loan debt is preventing some millennials from saving for retirement or buying homes.

And while it’s likely that those without student loans tend to include more people from wealthy homes, the massive disparity between those who owe and those who don’t suggests that educational debt can supercharge the difference in income.

If you’re a millennial, your financial journey since graduation has probably been an uphill battle. Here’s how student loan debt has held your generation back, along with our advice on how to conquer your debt once and for all.

Key facts

Millennial households with student loan debt have…

  • An average net worth of $29,087, compared with $114,376 for student loan-free households.
  • 46% less in their savings and checking accounts (median balance of $5,500 vs $10,180 for those without student loans).
  • $21,160 in retirement savings versus an average of $39,905 for those with no student loan debt.

 

Student loans weigh heavily on millennials’ net worth

The wealth divide between households with student loan debt and those without it has been widening over the past few decades.

In 1989, under-35 households with student loan debt had just 13% less in average net worth than households without any student loan debt.

That difference had nearly tripled by 1998, when under-35 households with student loan debt had a net worth 36% less than their debt-free peers. The former had an average net worth of $68,687, while the latter held an average of $108,146.

In 2016, the gap had grown to 75%, with student loan-saddled millennial households having an average net worth of $29,087, compared with $114,376 for student loan-free households. In other words, millennials unburdened by student loans held over $85,000 more than those who still had debt from college or graduate school.

Even though a college degree typically leads to a higher-paying job, the student loans that often go with it can significantly undermine your ability to build wealth after graduation.

Student loans mean less money in the bank (and more credit card debt)

If you’ve got student loans, you know those payments can be a struggle to make month after month. According to our analysis, millennials with student loans are putting a significant amount of their paychecks toward their debt — leaving them with less money in the bank.

In fact, holders of student loans had 46% less in their savings and checking accounts in 2016 than millennial college graduates without debt. The former group had a median bank balance of $5,500, while the median for other millennial grads was nearly twice that, at $10,180.

Perhaps because millennial borrowers have less liquid cash, they also end up taking on more credit card debt. Fifty-five percent of those with education debt also had credit card debt, compared with just 32% of those without student loans. They also carried larger balances — $2,888 — as opposed to $1,476 for debt-free millennial graduates.

If student loan bills are eating up a big part of your income, you might use credit cards to finance big purchases. But credit card debt tends to be even harder to pay off than student loan debt because of high interest rates and the temptation to overspend. Caution is key when it comes to paying with plastic.

Student loans get in the way of saving for retirement

Considering that millennials with student loans have less money in the bank, it should come as no surprise that they also have less saved for retirement. After all, once you’ve paid your student loan bill and other recurring monthly expenses, you might not have much left over to contribute to your 401(k), individual retirement account (IRA) or other nest egg account.

Our analysis found that millennials with education debt have an average of $18,745 less in retirement savings than their debtless counterparts. The average grad with debt had saved $21,160 in 2016, while those without student loans had an average of $39,905 in their retirement savings accounts.

When it comes to preparing for the future, the earlier you can start, the better. Thanks to the power of compound interest, any amount you can set aside today can grow significantly over time.

Student loans seem to be an obstacle to homeownership

When it comes to buying a home of their own, millennials can encounter many challenges.

The high cost of rent is one of them, with nearly 21 million households paying more than 30% of their income on rent, according to Harvard’s Joint Center for Housing Studies. While rent costs have gone up, wage growth has remained stagnant, even for those with college degrees. This makes it all the more difficult to save for a down payment and other costs associated with buying a home.

And student loans create further obstacles, resulting in lower rates of homeownership among millennial graduates with student loans (34%) than among those without (36%). Those who have managed to buy a home end up with a lower-value home and a bigger mortgage, compared to their contemporaries who don’t carry education loans.

According to MagnifyMoney’s analysis, the home values of millennials younger than 35 with student loan debt are 5% lower than those without student loan debt. The median value for those with student loans was $157,000 in 2016, while millennial homeowners without student debt had homes with a median value of $165,000.

What’s more, homeowners with student loans had to take on even more debt to buy their homes, possibly because they weren’t able to save as much for down payments. Their median mortgage was $104,000, versus $98,000 for those without student loans.

Not only does student loan debt get in the way of buying a home, but it also forces millennials to take on even more debt to realize their goal of owning a home.

Get proactive about reducing your student loan burden

Although you might feel you got tricked into taking on debt at a young age, burying your head in the sand about your student loans will only make a difficult situation worse. Instead of giving up hope, try to get proactive about paying off your debt.

If you can make extra payments, you can get out of debt faster and save money on interest. Create a budget to see if you can spare any extra cash each month. Look for areas where you can cut down on spending. Some people even take drastic steps, such as downsizing their apartment or selling their car, to get rid of debt as fast as possible.

If you’re working, find out what steps you can take to get a pay raise. Or consider changing jobs altogether to boost your salary. Alternatively, you might take on a side hustle, such as driving for Lyft or running errands for TaskRabbit, to increase your income and throw that extra money toward your loans.

Another option is to move into a career that could qualify for student loan forgiveness. For instance, those who work in public service fields or as teachers in qualifying schools could be eligible for federal student loan forgiveness.

You can also look into state-based and private programs that offer student loan repayment assistance for your private or federal student loans. And some employers even offer a student loan matching benefit to help you pay off debt.

Finally, some borrowers could benefit from refinancing their student loans. If you have decent credit and a steady income — or can apply with a cosigner who does — you could qualify for a lower interest rate than what you have now, as well as choose new repayment terms. As a result, refinancing could save you money on interest and help you pay off your student loans ahead of schedule.

Whatever you decide, make sure you’re being strategic about the best way to manage student loan repayment. Even though student debt has held back millennials in major ways, there are steps you can take to overcome this obstacle and reclaim your financial freedom.

Methodology: MagnifyMoney examined the Federal Reserve’s Survey of Consumer Finances to compare households headed by someone under age 35 with student debt versus those without. All monetary amounts are expressed in 2016 dollars (the date of the latest survey).

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Rebecca Safier
Rebecca Safier |

Rebecca Safier is a writer at MagnifyMoney. You can email Rebecca here

TAGS:

Advertiser Disclosure

News

The Best Place to Exchange Currency

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

The most affordable way to spend money in a foreign country is by using your credit card, exchange rate-wise. However, credit cards may not be widely accepted in your travel destination, or perhaps you simply want to have foreign money on hand before you arrive for peace of mind.

You can purchase foreign currency from your local bank, at an airport kiosk or from an online currency exchange. You tell them the particular amount of foreign currency you need and pay for it in U.S dollars just like buying anything else.

Not every place offers the same exchange rate, though, and some places charge extra fees. It’s important to compare rates and avoid additional fees to make sure you are not paying a high price on the foreign money.

In this post, we will compare the pros and cons, and the cost of each currency exchange option for you before, during and after your travel.

Ways to exchange currency before your trip

Bank or credit union

Exchanging foreign currency before traveling gives many people peace of mind. Ordering foreign cash from your bank or credit union is a common way to do so.

This will save you time and headaches from queuing up at money-exchange facilities at the airport and sweating over the math on the spot. Most banks and credit unions offer somewhat similar exchange rates. The trickier part is to compare fees. Some banks don’t charge fees, but others do. Fees will affect the exchange cost significantly if you don’t exchange much money in the first place.

Pros

  • Banks offer relatively competitive rates compared with retail currency exchange bureaus or airport exchange kiosks because of the bigger volume they sell and buy.
  • Some banks offer online currency order and delivery. Constraints and fees may apply. For example, Bank of America customers can order up to $10,000 in foreign currency online over 30 days. But if they need more, they have to stop by a Bank of America location.
  • You can choose to receive your order in small, large or mixed denominations depending on availability.

Cons

  • If you go to a bank branch, they may not have the amount of foreign cash you need. It would usually take a few days for the bank to get the money ready for you. Don’t wait too
    long to exchange currency. Call your bank in advance for availability of specific currencies.
  • Each institution limits on amounts. With Bank of America, for instance, your order amount must be at least $100.
  • Some banks charge additional service or delivery fees.
  • Banks offer less competitive foreign exchange rates compared with credit/debit card rates.

Costs

The difference in rates offered by different banks is small. So the major factor that will affect the efficiency of your exchange is fees. We look into the fees for four major banks (they’re the largest by assets):

Bank of America

Rate: On Sept. 19, Bank of America provided an exchange rate of 1:1.2304 between euros and U.S. dollars. Purchasing 1,000 euros would cost $1,230.40. You can check the daily rates BOA offers here.
Fees: If you choose to get the foreign currency delivered, there is a delivery fee of $7.50 on all foreign currency orders less than $1,000; this fee is waived if the currency you buy is worth $1,000 or more.
Ways to purchase: You can order online if you have a BOA checking or savings account. BOA credit card holders only can order currency at a physical bank branch, but the purchase needs to paid in cash.

Chase

Rate: The exchange rate for buying euros at Chase on the same day was 1:1.251. The cost for 1,000 euros would be $1,251.
Fees: $0.
Ways to purchase: You have to show up at a branch to make an order; you can’t order online and have to pick up the cash later if they don’t have the currency you need in stock.

Citibank

Rate: On Sept. 20, Citibank offered a rate of 1:1.2462 for you to buy euros. That means if you bought 1,000 euros, the cost in U.S. dollars would be $1,246. You can check the rate of the day by calling its 24-hour Exchange Rate Hotline: 1-800-756-7050, option #1.
Fees: If you are a client with the Citigold® or Citi Priority Account Package, there are no additional fees. But if you are not, $5 service fee will be charged if the transaction amount is $1,000 or less. Additionally, Citi charges a fee from $10-$20 to deliver to your address, depending on the delivery option.
Ways to order: You will have to be a Citi client to buy foreign currency. To order, visit your nearest Citibank branch or call 1-800-756-7050, option #2.

Wells Fargo

Rate: On Sept. 19, buying 1,000 euros would cost $1,229.80 at Wells Fargo, not much different than other major banks. You can check the rates of the day here.
Fees: No fees.
Ways to purchase: Besides physically visiting a branch, Wells Fargo clients can also exchange currency through the bank by ordering money online or by phone to get it delivered to your home or a branch near you within 2-7 days.

Order cash online

No other method can beat ordering foreign currency online in convenience. You just click buttons and purchase foreign currency at your fingertips. But the rates are slightly higher than what banks have. The major player that dominates the online currency exchange space is Travelex.

Travelex charges delivery fees if you order a small sum of foreign currency. If you are seeking the convenience of getting foreign currency delivered, you will be better off ordering foreign currency from a bank that offers free delivery or charges a lower delivery free.

Pros

  • You can exchange currency without having to step out of your house.
  • Rates are better than kiosks at airport or hotels.
  • You can earn United MileagePlus® bonus miles if you buy currency through Travelex.
  • You can pick up money in a retail facility or get currency delivered as early as the very next day after you put in an order.

Cons

  • There’s a $9.99 shipping fee if the transaction is less than $1,000.
  • You have to order in advance for delivery.
  • The exchange rates won’t beat what banks offer.
  • Travelex does not give small denominations of foreign currencies for delivery, so you’re limited to converting to round numbers in the foreign currency.
  • The minimum amount required in each order is $50.

Costs

Rate: On Sept. 19, the euro-U.S. dollar exchange rate provided by Travelex was 1:1.285. The price of 1,000 euros would be $1,284.69. That’s $54 more expensive than you would pay Bank of America for the same amount of euros.
Fees: A UPS Standard Delivery fee of $9.99 is charged if the order is less than $1,000. The fee is waived on transactions of more than $1,000.

Airport kiosks

Departure or arrival terminals at major airports all have plenty of choices for exchanging currencies. Those are the places you should avoid because the exchange rates they offer are typically higher than bank rates and online rates. And oftentimes, those kiosks levy an additional transaction or service fee, making your purchase all the more expensive.

Take Travelex as an example, its physical locations offer different rates than its online rates. And the specific rate depends on the amount of foreign currency you order. The more you buy, the better the rate you will get. In addition, a flat $9.95 service fee applies to each transaction.

However, if you need cash but did not budget enough time ahead of your trip to order foreign currency from your bank, the currency-exchange kiosks would pretty much be your last option before departure. Many of these exchange facilities also have locations in downtown areas, hotels, train and bus stations. They may or may not carry the same rate and fees as the airports. One thing you can do to save money on exchanging money at the airport is to visit the airport’s website before you get there to compare fees from different merchants.

Pros

  • They are easily accessible at airports.
  • Their opening hours are long, if not 24 hours. Many stay open from 5 a.m. to 11:00 p.m. everyday.
  • Those physical kiosks usually have more denominations available than online orders.
  • There is no minimum amount required at a physical store; you can change small amounts of cash, but the transaction fee will still apply.

Cons

  • They offer worse rates than banks and online shops.
  • You likely will have to pay an added service fee

Costs

Rate: On Sept. 19, buying 1,000 euros at a Travelex kiosk would cost $1,370. The rate was 1:1.37. This is more expensive than what you’d get via its website (1:1.285). And if you buy 600 euros at the kiosk, the rate would be even higher — 1:1.38.
Fees: There is a flat service fee of $9.95 per transaction, however little money you exchange through Travelex. If you factor in the service fee, the cost for 1,000 euros would be 12% higher than what you would pay for the same amount of currency at Bank of America.

Ways to exchange currency during your trip

ATM

The least expensive way to access any local currency in cash is by using an ATM on the ground with a checking account that has no fee for out-of-network ATMs and no foreign transaction fees.

You would get the same exchange rate you’d get if you used a credit card at a merchant. Most ATM networks use either the Visa or Mastercard exchange rate, which is the best because it’s very close to the interbank rate banks give each other.

For example, the Mastercard euro-to-U.S. dollar exchange rate on Sept. 19 was 1:1.171, and the Visa offered a pretty close rate of 1:1.172, if the credit/debit card charges 0% fees. These rates were lower than rates of U.S. banks that day.

You don’t have to make this account your primary checking account — just transfer the money you need to your no-fee account in U.S. dollars before the trip, and withdraw on location in local currency.

For security purposes, it’s safer to withdraw cash on the ground as you need it than carrying a large sum of cash with you during the trip. It’s also better to have a separate checking account just for travel. That way if there is fraud, it’s less likely to hit your main account.

Aspiration Summit and Charles Schwab Checking are two nationally available accounts with no out-of-network ATM fees or foreign transaction fees.

With most U.S. debit cards, however, the banks levy a foreign transaction fee up to 3% of the withdrawal amount each time and a flat third-party ATM fee of $1-$5. The ATM operator may also charge a fee.

Still, ATMs would be a cheaper option than exchanging currency at banks or airport kiosks. Let’s say you withdrew 1,000 euros Sept. 19 through Visa at an ATM, if you factor in the exchange rate, the 3% transaction fee and the $5 ATM fee, the total cost would be $1,207 — less expensive than exchanging the same amount of euros at Bank of America.

To save costs on your trip, look for a debit card with low or no foreign transaction fees and no out-of-network ATM fees. If they do charge fees, try to take out a high amount of cash at one setting to avoid multiple fee payments if you need to access more cash later on.

Credit card

The reason why credit cards are the best option to spend money overseas is that a credit card’s exchange rate will certainly beat banks and kiosks, as we discussed above. More important, credit cards offer significantly better protection against fraud than debit cards. Many credit cards charge no foreign transaction fees, and even better, you may earn miles or cashback rewards by using credit cards. Here we’ve rounded up the best travel credit cards with no foreign transaction fees.

Pro tip: One of the key recommendations for international travelers is to make sure your transaction is done in the local currency, not in U.S. dollars. Your credit card will always have a better exchange rate in the local currency than what merchants can offer in U.S. dollars. Plus, a merchant may even slide in an extra fee that you might not know about.

Cash

If you have U.S. dollars in cash, you can also exchange the local currency when you are in your host country. In fact, exchanging money in your host country gives you a better exchange rate than exchanging foreign currency in the U.S. before you go.

This is because the local currency is more common than your U.S. dollar is in that country, and therefore it’s cheaper to buy there. Meanwhile, your U.S. dollars are worth more in a foreign country because it’s a less common currency. Therefore, you will get more local money for your U.S. dollars.

Banque de France, the central bank of France, showed that on Sept. 19, the euro-to-USD exchange rate was 1:1.1667. That means it would cost you $1,167 to get 1,000 euros in France, excluding fees, which is less than you would pay for the same amount of euros at a major U.S. bank.

What to do with your leftover currency after your trip

Try to use up the foreign currency before you return to the U.S. If you have leftovers after your international trip, there are several ways to handle it.

Sell it back to your bank or Travelex

Banks and Travelex will buy the major foreign currencies; but they may not be able to purchase some foreign currencies, such as Argentinian pesos (ARS) Cuban pesos (CUP) at Travelex.

The big caveat here is that you will inevitably lose money by returning the foreign currency. The banks and Travelex make money from the difference between the purchase and sale of foreign currency. The rate they would offer for buying foreign currency from you is always lower than their selling rate

For example, Chase would buy 1,000 euros for $1,085 on Sept. 19, whereas it sold 1,000 euros for $1,251. Travelex would buy 1,000 euros for $1,020 that day. But if you wanted to buy the same amount of euros from a kiosk, the cost would be $1,370.

On top of that, additional fees may be attached to your sale. Citi, for instance, charges $5 if you exchange less than $1,000. Travelex bureaus don’t charge a service fee when you return your foreign currency. However, if you choose to send your leftover currency in the mail, a $5 fee will be deducted from your final proceeds and a delivery fee may also apply.

Keep it

You will be better off keeping the leftover currency: you’ve already bought it with extra cost, and selling it at a cheaper price means you will lose even more money. Why not save the hassle and save it for your next trip?

Sell it to friends and family

Ask your friend, family and neighbors whether they have international travel plans. If they will make a trip to the country you have visited, offering to sell them the local currency at a better rate than what banks provide.

Donate it

You can donate your leftovers after you finish your vacation — brighten up someone else’s day.

On many American Airlines international flights, flight attendants pass around to collect unused currencies from travelers as donations to UNICEF “Change for Good” charity program.

“Change for Good” charity donation barrels are also available at 10 international airports. As you walk around the airport, look out for those barrels to drop your leftover currency.

If you were not able to donate your foreign currency on a flight or at an airport, you can still support the cause by sending your money to:

UNICEF USA
ATTN: Change for Good Program
125 Maiden Lane
New York, NY 10038

Key takeaway

International travel is expensive already. Finding an affordable way to exchange foreign currency can save you some money. For that, you want to look for the option with the most competitive rate and avoid extra fees. When you are on your foreign trip, use a credit card that carries no foreign transaction fees as often as possible. As far as cash goes, the best way to access foreign currency to withdraw money at an ATM using a debit card that doesn’t charge out-of-network ATM fees or foreign transaction fees when you are on the ground. If you need a small sum of cash on hand before traveling, your local bank would be your best option. Ordering foreign currency online can be convenient, but mind the delivery fee that may apply. Our last piece of advice: Avoid airport or hotel exchange kiosks whenever possible.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Shen Lu
Shen Lu |

Shen Lu is a writer at MagnifyMoney. You can email Shen Lu at shenlu@magnifymoney.com

TAGS: , ,

By clicking “See Offers” you’ll be directed to our parent company, LendingTree. You may or may not be matched with the specific lender you clicked on, but up to five different lenders based on your creditworthiness.

Advertiser Disclosure

News

Resources for Repairing Your Home After Hurricane Florence

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Hurricane Florence aftermath
iStock

Many homeowners are beginning to make repairs after Hurricane Florence’s devastating crawl across the Carolinas and Virginia in September 2018.

According to real estate data provider CoreLogic, the storm affected 624,000 homes, the vast majority unprotected by flood insurance. Standard homeowners and renters insurance policies do not cover damage from storm surges and other flooding. That requires a separate policy, typically purchased from the U.S. government, but consulting and actuarial firm Milliman said fewer than 10% of homeowners in the Carolinas had such coverage.

Many families facing large out-of-pocket costs from Hurricane Florence may be wondering what the next steps are to begin rebuilding. To help you get started, we’ve rounded up some resources available to people in the Carolinas affected by the storm.

If you’re looking for more general information on options for repairing your home after a hurricane, see our guide here.

Answers to insurance questions after Hurricane Florence

Flood insurance vs. homeowners insurance

While standard homeowners and renters insurance policies do not cover damage from storm surges or other flooding, they should cover damage from, say, a neighbor’s tree that fell on your house and left a hole on the roof where water came through. South Carolina residents with questions about claims may visit the S.C. Department of Insurance. North Carolinians can visit NCHurricClaims.com for information. Insured residential damages in that state may total as much as $7.5 billion while uninsured damages may nearly be twice as much. Total storm damage in the Carolinas and Virginia is expected to add up to $28.5 billion.

Wind insurance

Wind must be insured separately and sometimes this coverage is available only from a state-run insurer of last resort. In North Carolina, the Coastal Property Insurance Pool is available to coastal homeowners, with a similar wind pool in South Carolina.

Filing for federal disaster assistance after Hurricane Florence

If your home is in a declared presidential disaster area, you can apply for FEMA individual disaster assistance. If you do not have internet access, you can call 800-621-3362.

Coverage

Disaster aid may cover:

  • Temporary housing
  • Lodging reimbursement
  • Home repairs
  • Home replacement
  • Permanent or semi-permanent housing construction
  • Child care expenses
  • Medical and dental expenses
  • Funeral and burial expenses
  • Essential household items, clothing, tools required for your job and necessary educational materials
  • Heating fuel
  • Cleanup items
  • Damage to an essential vehicle
  • Moving and storage expenses

Disaster areas

As of this writing, DisasterAssistance.gov shows residents in the following North Carolina counties may be eligible for disaster assistance after Hurricane Florence:

  • Anson
  • Beaufort
  • Bladen
  • Brunswick
  • Carteret
  • Chatham
  • Columbus
  • Craven
  • Cumberland
  • Duplin
  • Durham
  • Greene
  • Guilford
  • Harnett
  • Hoke
  • Hyde
  • Johnston
  • Jones
  • Lee
  • Lenoir
  • Moore
  • New Hanover
  • Onslow
  • Pamlico
  • Pender
  • Pitt
  • Richmond
  • Robeson
  • Sampson
  • Scotland
  • Union
  • Wayne
  • Wilson

In South Carolina, Chesterfield, Darlington, Dillon, Florence, Georgetown, Horry, Marion and Marlboro counties are federally declared disaster areas. As of this writing, there are no declared disaster areas in Virginia.

FEMA may require you to have evidence that your insurance company declined your loss claim and will not cover your disaster-caused loss. When you apply for disaster assistance, you’ll need to provide identifying information like your Social Security number and a current mailing address.

It’s important to remember some FEMA funds are funneled through the state government, so depending on how your state allocates its resources, your reimbursement or assistance may take months. Some North Carolina survivors are still waiting on FEMA disaster assistance aid from Hurricane Matthew in 2016.

According to a FEMA spokesperson, those still waiting on aid from a previous disaster may still qualify for FEMA assistance.

Final thoughts

If you were one of the estimated 624,000 homeowners affected by Hurricane Florence, help is available. Sources of financial assistance range from your own insurance policies, to government assistance and loans, to charitable organizations, to simply borrowing from a private lender.

Rebuilding may be costly and seem overwhelming, so look to resources like United Policyholders and the Insurance Information Institute or your state’s emergency management office. North Carolina residents may visit ReadyNC. South Carolina residents may go here.

If you need advice when deciding between options, consult a fee-only financial professional who has experience working with homeowners following a disaster.

If you are considering bankruptcy, it’s recommended you speak with a bankruptcy lawyer about the options available to you and any protections provided by your state.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Brittney Laryea
Brittney Laryea |

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

TAGS:

By clicking “See Offers” you’ll be directed to our parent company, LendingTree. You may or may not be matched with the specific lender you clicked on, but up to five different lenders based on your creditworthiness.

Advertiser Disclosure

News

Student Loans vs. Mortgages: Which Weigh Heaviest?

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

iStock

Student loan debt has mushroomed dramatically over the last two decades. The total amount of outstanding student debt just passed $1.5 trillion earlier this year, putting it second only to mortgages as the type of loan on which Americans owe the most.

The amount of average student debt per person has also exploded, with a substantial number of borrowers owing mortgage-like sums above $100,000, according to a recent student debt study from MagnifyMoney parent company LendingTree.

But, as the study also noted, this student loan burden isn’t spread evenly across the country.

“Student loan debt varies pretty widely between metros,” said LendingTree senior research analyst Kali McFadden. “With student loan balances shooting up, we wanted to know how these types of debt stacked up against mortgages for people who carry both.”

To find out, we compared student debt to mortgage debt, using borrower data from the 50 biggest metros. Specifically, we wanted to identify cities where borrowers’ student loans are more likely to rival — or even surpass — their mortgages.

Key takeaways:

  • Across all 50 metro areas surveyed, 5.7% of borrowers have a larger balance on their student loans than on their mortgage. The average student loan balance across these cities was $18,435.
  • In just 6 of the 50 metros we reviewed, more than 10% of borrowers carry a larger debt load on their student loans than on their mortgage. The Rust Belt and the South regions dominate the top of this list.
  • A whopping 12.6% of borrowers in Pittsburgh owe more for their educations than they do for their homes. Rounding up the top three are Buffalo, N.Y. (12.2% owe more on student loans) and Cleveland (11.7%).
  • The West Coast occupies the other end of the spectrum. In both Seattle and Sacramento, California, just 1.4% of borrowers owe more in student loans than on their mortgages. Los Angeles and San Diego are tied for third place, at 1.6%.

The 11 cities where student loan debt exceeds mortgage debt

The cities with the highest student loan debt compared to mortgage debt (looking only at borrowers that hold both types of loans) aren’t necessarily just the ones with the cheapest real estate, and therefore the lowest mortgages.

“Clearly, property values pay a part in the ratio of student loan to mortgage debt … [however] we do see that higher student loan balances are a factor where more people owe more for their educations than they do for their houses,” said McFadden.

Of course, the blend of these two influences — heavy school debt and low home prices — is different for each city. However, when student debt balances are high compared to mortgage debt, it does suggest a tough environment for student loan borrowers.

Here’s a look at these top-ranking metro areas.

1. Pittsburgh

People who owe more on student debt than mortgage debt: 12.6%

Pittsburgh tops our list, and for good reason — 1 in 8 borrowers owes more on their student loans than on their mortgage. Specifically, the median ratio of student debt to mortgage debt is 22.3%.

Here, the culprit could be the low median home price of $125,000, as reported by Kiplinger — tied for the lowest of the 50 metro areas we compared. This likely results in lower mortgage balances for Pittsburgh relative to the median student loan balance of $18,927.

2. Buffalo, N.Y.

People who owe more on student debt than mortgage debt: 12.2%

Buffalo joins Pittsburgh at the bottom of the median home-price rankings of the metro areas covered in this study, at $125,000. These borrowers are likely to owe less on their home and also have below-average student debt, at a median balance at $17,256.

It’s no surprise, then, to see that a typical Buffalo borrower’s student loan balance is equal to 21.9% of their mortgage debt.

3. Cleveland

People who owe more on student debt than mortgage debt: 11.7%

Cleveland borrowers have a median student loan balance of $18,743, compared to an average home price of $135,000, according to Kiplinger. With above-average student loan balances and lower home prices, a typical Cleveland borrower’s student loan balance is nearly a quarter (23.2%) of their mortgage debt.

4. Memphis, Tenn.

People who owe more on student debt than mortgage debt: 11.0%

Borrowers in Memphis have the highest student loan balances relative to mortgage debt in any city we studied. In fact, the median $18,866 student loan balance is equal to 24.2% the median mortgage debt. Memphis is also among the cities with lower median home prices, at $137,000.

5. Birmingham, Ala. (tie)

People who owe more on student debt than mortgage debt: 10.2%

One of the main factors putting Birmingham at the top of this list is the high average student loan balance. A typical borrower in this metro owes $20,679, the fifth-highest median student loan balance among any of the cities we surveyed.

This amount is equal to 21.8% of the median mortgage debt balance in Birmingham, where the median home price is $131,000.

5. Detroit (tie)

People who owe more on student debt than mortgage debt: 10.2%

Detroit and Birmingham have the same percentage of borrowers who owe more on student loans than they do on their mortgages. However, borrowers in Detroit have a lower ratio of student debt to mortgage debt, at 19.9%.

This reflects both the lower student loan balances in this city, with the median at $18,552, as well as higher home prices (the median is $145,000, per Kiplinger).

7. Atlanta (tie)

People who owe more on student debt than mortgage debt: 9.5%

Atlanta tied with Oklahoma City for the No. 7 spot, due largely to borrowers with some of the highest student loan balances.

The city’s median student loan balance of $22,232 is second only to Washington, D.C. This high level of student debt is due largely to loftier levels of educational attainment among Atlanta residents.

These large student debt loads are high even when compared to Atlanta’s median home price of $190,000. For a typical borrower here, their student debt is about one-fifth (19.6%) of the balance on their mortgage.

7. Oklahoma City (tie)

People who owe more on student debt than mortgage debt: 9.5%

Oklahoma City residents have below-average student debt, with the median balance at $17,278. Overall, this median student debt is equal to 18.4% of the local median mortgage debt.

9. St. Louis

People who owe more on student debt than mortgage debt: 8.9%

The local median student loan balance in St. Louis is a relatively large $19,229, while the local median home price is $155,000, according to Kiplinger. Overall, a typical St. Louis borrower’s student debt is equal to 18.5% of their mortgage debt.

10. New Orleans (tie)

People who owe more on student debt than mortgage debt: 8.3%

The median student debt among New Orleans borrowers is $18,592, about on par with the average across all cities. This debt is equal to 19.0% of the median balance on borrowers’ mortgages.

10. San Antonio (tie)

People who owe more on student debt than mortgage debt: 8.3%

Borrowers in San Antonio have some of the smallest student loan balances overall among these cities in these rankings, with the median at $17,089. However, that balance is still 17.1% of the median mortgage debt for local borrowers who have both.

Cities where student debt is lowest, compared to mortgage debt

A look at the cities where student loan balances are smallest, compared to mortgage debt, also reveals some insights.

Not surprisingly, the list includes cities with some of the highest home prices in the nation. San Francisco, for example, has a median home price of $750,000. Los Angeles homes come in at $605,000, while San Diego’s median home prices is $530,000, and Seattle’s is $417,000, reports Kiplinger.

These significantly higher home prices mean that many local borrowers are taking out mortgages with much higher balances that overshadow their student debt.

But while higher home prices result in more mortgage debt, the high cost of living doesn’t necessarily affect how much local residents borrow in student loans.

In fact, borrowers in these 10 cities also tended to have lower median student loan balances overall. Providence, R.I., for example, had the lowest median student loan balance of the group, at $15,025, and Seattle and San Diego had median student loan balances of $16,003 and $15,984, respectively.

Dealing with high student loan balances

Mortgage debt is still larger than student debt for most Americans, both at the national and individual level. However, the results of this study show that in some places, a relatively large proportion of people face student debt that outweighs even their mortgage, which can be a significant financial burden.

No matter how your own mortgage debt compares to your student loans, you can benefit from taking steps to more effectively manage your school debt. It could be wise to pay off student loans faster, if you can afford to do so. You can also explore options such as student loan refinancing or pursuing student loan forgiveness.

On the other hand, it’s encouraging to see that many borrowers are buying homes while repaying student debt — even when they have enough student loans to eclipse their housing debt. While rising student loans are slowing the financial progress of many, it’s not stopping them in their tracks.

Methodology

We looked a sample of over 90,000 anonymized users who logged into My LendingTree (LendingTree is our parent company) in July 2018 and who had both active student loan balances of any size and mortgage balances greater or equal to $10,000 to calculate the ratio of student to mortgage balances. Median student loan balances were calculated using a sample of users who logged into My LendingTree during Q1 2018, and were originally reported here. These results were then aggregated with the 100 largest metropolitan statistical areas by population. My LendingTree has more than 9 million users. Credit report information is provided by TransUnion.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Elyssa Kirkham
Elyssa Kirkham |

Elyssa Kirkham is a writer at MagnifyMoney. You can email Elyssa here

TAGS:

By clicking “See Offers” you’ll be directed to our parent company, LendingTree. You may or may not be matched with the specific lender you clicked on, but up to five different lenders based on your creditworthiness.