9 Things to Remember When Using Your First Credit Card

Getting your first credit card is a significant financial milestone. After sorting through an endless array of program options and promotional offers, you made your choice, filled out the application, and saw those two magic words: You’re approved!

After the initial excitement wears off, it’s important to remember that just like your first car, your first credit card comes with a lot of responsibility. While it may be tempting to grab some friends to take the new plastic for a test drive, it’s a good time to exercise a little restraint. The financial decisions you make now will have long-term effects. Like a misspelled tattoo, it only takes a momentary lapse in judgment to make a mistake that will follow you for years to come.

So, before you start exercising your newfound financial freedom, here are a few tips to make sure your first credit card experience is positive:

  1. Pay attention to the fine print.
    Even if you don’t need readers, you may want to have some handy. Companies like to sneak stuff in the small print. Introductory interest rates can be attractive, but once those offers expire, you could be left paying higher interest on your purchases.

  2. Don’t be a card counter.
    If you have multiple cards, it can be tempting to spend more than you intended. Also, it makes your wallet fat which makes for uneven seating and back problems down the line. Simplify your life, stick to a single card, and keep the credit limit sensible.

  3. Consistency Pays Off.
    This simple step will help you avoid additional interest charges, and it’s an effective way to build an excellent credit rating.

  4. Always pay your bill on time.
    Late payment charges are usually more expensive than your minimum payment, which can make it hard to keep up with your bill. If you’re worried that you’ll forget the due date, most cards offer an automatic payment option. Use it.

  5. It’s your budget, don’t fudge it.
    Try to think of your credit card as for emergencies only. Do your best to continue using your checking account or cash to cover everyday expenses. Your credit card is like that friend you call when you need help moving or a ride to the airport. There when you need it, but not to be overused.

  6. Steer clear of cash advances.
    These advances usually charge a higher interest rate than regular credit card purchases. 
    The convenience isn’t worth the cost.

  7. Keep your monthly credit card payments less than 20% of your income.
    Once your bill exceeds that amount, it becomes exponentially more difficult to stick to a sensible, reasonable budget.

  8. Review your credit card statements each month. In addition to being a smart way to track your spending, regular monitoring is the most effective way to combat credit card fraud and identity theft.

  9. Be honest with yourself.
    If you find that your spending gets out of hand, there’s no shame in putting your credit card away (or getting rid of it all together) until you correct your bad financial habits.  

Credit cards can be useful tools for emergencies, and when used properly, they can help you maintain a strong credit rating. But with so many card options available today, it is essential to choose the one that’s right for you. If you haven’t secured your first card yet and are wondering where to find a trustworthy offer, Scient Federal Credit Union offers carefully selected credit card programs. That’s a great place to start.

Fact vs. Fiction: What Really Impacts Your Credit Score?

When it comes to credit scores, it can seem like everyone’s an expert. Ask a random group of people what factors affect your score the most, and you’ll likely get a different response from each person. And the most frustrating part is they’ll probably all be right—and wrong.

Credit scores are calculated based on a variety of factors, so they tend to feel like a secret code. Fortunately, this code is easy to crack. All you have to do is separate fact from fiction. Once you understand the specifics of how your score is determined, it will be easier to sort through all the misinformation.

Focus on the Facts

There are three primary credit reporting bureaus—Equifax, Experian, and Transunion, but the most trusted credit ratings come from the Fair Isaac Corporation (FICO). While some lenders and creditors look at a combination of scores from the various reports, the FICO score is widely considered the most reliable. According to FICO experts, your credit score is calculated based on five main categories:

  • Payment history (35%)
    Creditors want to be sure of two things: You pay your bills, and you pay them on time.
  • Amount owed (30%)
    To maintain an ideal credit score, aim to keep your overall debt under 30% of your total available credit.
  • Length of credit history (15%)
    Lenders want to see consistency in credit management. This category looks at how long you’ve had established accounts. The longer, the better.
  • Credit mix (10%)
    Credit scores factor in a wide range of accounts, from credit cards and retail accounts to mortgages and installment loans.
  • New credit (10%)
    Opening new credit accounts isn’t always a bad thing but applying for several all at once can have a negative impact on your score.

Six Common Credit Score Myths

  • Checking your credit hurts you. 
    When you apply for a new loan or credit card, the lender runs a credit inquiry. Too many of these inquiries in a short period can cause your score to dip. However, checking your own credit doesn’t damage your rating. In fact, many credit card companies allow account holders to view their FICO scores for free because regular monitoring is an effective way to spot fraudulent activity or identity theft.
  • Your income level matters. 
    While your income certainly influences your ability to pay your debts, it doesn’t factor into your score. Credit reports may list your current and former employers, but that information holds no bearing on your score.
  • Your education or occupation is important. 
    It doesn’t matter whether you went to an elite university, community college, or dropped out of high school. Your credit score measures your ability to manage debt, not your educational pedigree. Same goes for your job. Gainfully employed, under-employed, or unemployed, you can still build a good credit score.
  • Closing a credit card will help your score. 
    Even if you pay off a credit card, closing the account can hurt you more than it helps. If you’re worried that you might misuse the credit, destroy the card—but keep the account open. The available credit and length of credit history will reflect positively and help you in the long run.
  • Quick fixes can help bad credit.
    Yes, it is possible to improve your credit score—but you don’t have to pay someone else to do it for you. Because most credit repair relies on sensible, strategic steps applied over time, you can handle it on your own. Rather than paying a credit repair service, use the money you save to bring past due balances up to date or pay down your overall debt.
  • Avoiding all debt will help you keep a good credit score. 
    Your credit score is a metric that measures your ability to manage credit—not avoid it. If you don’t have any credit accounts, there’s nothing to measure. That being said, just because you qualify for credit doesn’t mean you have to max it out. You’ll help yourself more by using your credit strategically and paying off your balance each month.

While this list covers some of the most common credit score myths, there are countless others. By focusing on the facts and ignoring anything that doesn’t line up with them, you’ll find it easier to manage your credit with confidence.

Clear Up Your Tipping Confusion

Tipping. Conversation about the topic can spark lengthy debates with opinions ranging from staunch support to extreme opposition. Some consumers appreciate the opportunity to reward members of the service industry for a job well done. Others feel the practice places an unfair expectation on the patron, inflates the overall cost of goods or services, and leads to increased employee turnover.

Historically, the American tipping model allows wait staff at upscale restaurants to earn a comfortable living, but those working at small, low-end establishments often struggle to make a livable wage. The wide disparity in earning potential stems from a 1966 law that established a federal minimum wage for tipped employees. The current minimum wage for tipped employees? $2.13 an hour. If that figure sounds shocking, consider the fact that it hasn’t changed since 1991.

Should the federal minimum wage for tipped employees be raised? Perhaps. There are advocates on both sides of the issue. Are there alternate ways to create a more equitable earning system? Absolutely. But those are deep conversations for another post. For now, tipping is standard practice in restaurants across the country, but the service industry extends beyond the dining room walls. And while 15-20% seems to be the going rate for a restaurant tip, you may be wondering how much to tip in other areas.

Here are a few general rules, courtesy of DealNews, to help you tip with confidence:

Waiter/Waitress: 15-20% minimum
Tipping Tip: We’ve already covered this one, but here’s an additional reminder: if you use a coupon or discount promotion, be sure to tip on the original price—not the discounted total.

Food Delivery Driver: 10% (or $2 minimum)
Tipping Tip: If you live far away from the restaurant (20-30 minutes), consider adding a few dollars extra to help the driver cover the additional gas expense.

Hairstylist/Barber: 10-15% for standard service, 15-20% for exceptional service
Tipping Tip: It’s hard enough to find a hairstylist you like. When you finally do, tipping them well can not only show your appreciation but help establish a great relationship going forward.

Tattoo Artist: 10-20%
Tipping Tip: Like most purchases, this one can vary based on the size and detail of the tattoo you choose. As for the exact amount, if you’re pleased with the artist’s work and you have any thoughts of becoming a return customer, the goodwill you build with a solid tip is well worth it.

Bartender: $1 per drink or 15% of the bill
Tipping Tip: You can take a wait-and-see approach by tipping when you close out your tab, or you can increase your odds of getting good service by tipping ahead of time.

Car Wash Attendant: $2-3 for a basic wipe down, $5-10 for more extensive washes
Tipping Tip: If you’re going to spend money on a quality car wash, investing a few extra dollars in a tip will help you ensure your attendant pays attention to the little details that make your car shine like it should.

Uber/Lyft Driver: $2-3 for a standard trip, $5-6 for extended trips
Tipping Tip: Along with lowering their fares, most ridesharing apps have added a tip option. This should save you from navigating from the whole “So sorry…I don’t have any cash” conversation.

If you find yourself in a situation other than those listed above, and you’re unsure about the standard tipping rate, it’s usually safe to assume that 18% of your total bill is a quality tip. It may not qualify you as a high roller, but you certainly won’t have to deal with dirty looks on your way out.

Hey, parents—it’s back-to-school time again!

Doesn’t it seem like just yesterday that your kids were counting the days until summer vacation? Now, after a few weeks of unlimited quality time and togetherness, we have a countdown of our own, don’t we? Yep. We’re counting the days (and possibly the hours) until school starts again. The thought of our children being out of the house for six hours every day may feel like cause for celebration, but as the grown-ups, we’re expected to play it cool. We have to find something to temper our end-of-summer excitement. The looming prospect of back-to-school shopping might do the trick.

 

Ready. Set. Spend.

According to a recent consumer survey, back-to-school (B2S) spending is expected to reach $27.6 billion this year. As you would probably guess, the bulk of that money (more than 75%) will be spent on clothing and school supplies. In fact, 98% of respondents indicated they planned on purchasing these items. If you’ve ever braved the B2S shopping scene, you’re probably not shocked by those figures. What you may find surprising is the fact that planning ahead isn’t always the best way to save money.

Survey results show that shoppers who tried to beat the back-to-school rush wound up spending approximately $100 more per household (if you’re a chronic procrastinator, this informational tidbit is pure gold). This may explain why back-to-school shoppers will spend almost $18 billion between mid-July and mid-August. While last-minute sales and promotions certainly factor into the equation, the late-summer spending surge may be due to the nationwide popularity of tax free weekends.

Connecticut’s Sales Tax Holiday is coming up August 19-25! Certain back-to-school products will be exempt from taxes during this time. Be sure to click here to find a list of exempt and unexempt purchases and save smart. 

If you’re a back-to-school veteran or if your little ones are starting school for the first time, this time of year means looking for ways to save. While the total amount saved on taxes may not be large compared to the amount spent, if you’re going to buy the items on your child’s school supply list anyway, you might as well schedule your shopping and save some money.

 

Scient can help stretch those back-to-school dollars.

When you consider the average household spends $510 on assorted clothing, supplies, and gadgets per child, one thing is sure: no matter when you shop, back-to-school season comes at a price. Fortunately, we offer products and services that can make those school-related expenses much easier to manage. From low-interest signature loans that help you cover this year’s supplies to specific savings accounts that can help you prepare for next year, the solutions available at Scient can make back-to-school shopping more affordable and less stressful.

At Scient, we want to help you make the most of this back-to-school season! Contact us today to find out how we can ease the financial stress of shopping and set you up for a successful school year.

Teach Your Kids to Make a Stand—a Lemonade Stand.

Long before Beyoncé transformed it into a cultural touchpoint, lemonade was the commodity of choice for childhood business ventures. Perhaps you had a lemonade stand of your own, or maybe you just knew someone who did. Either way, the memories of ice-cold refreshment probably ride on a warm wave of nostalgia. If your enterprise was especially successful, you might even hear a faint “cha-ching” as you reminisce.

Fast forward a decade or two, and now you find yourself juggling the demands of family, friends, and career. Thanks to the latest technology, it’s easy to let your kids spend their summer vacation drifting along on a digital stream of Snapchat streaks and Fortnite marathons. In these dog days of summer, you have a perfect opportunity to shake up your child’s summertime routine with a little old school entrepreneurship. It’s time to bring back the lemonade stand.

Let your kids in on the fun.

When you were young, running a lemonade stand didn’t feel like a job—it felt like freedom. So, don’t worry that encouraging your children to work will somehow rob them of their summertime fun. The venture can be fun, and the lessons they learn from operating a small business can last a lifetime. What lessons? Glad you asked!

Goal setting

Believe it or not, this one comes pretty naturally to kids. If you ask them what they want to do with the money they earn, they’ll probably have at least one goal already in mind. It may be a video game, a bike, or new clothes, but whatever it is, their motivation won’t be hard to find. When they finally save up enough to buy what they want, the sense of accomplishment will be something you can build on for the rest of their life.

Entrepreneurship

Operating a lemonade stand is an excellent way to help your children learn that it costs money to create something. After all, lemons and sugar aren’t free. Understanding economic concepts like cost of goods and profit margins will give your kids a valuable perspective with real-world applications. As they plan their drink prices, let them decide what to charge. Positive or negative, the lessons they learn from experience will help them with future planning.

Responsibility

Like many things in life, lemonade stands are super fun at the beginning! But after a few hours sitting in the sun or waiting out a thunderstorm, there’s a pretty good chance your little entrepreneur will want to close up shop. While it may be frustrating (for you and them), this scenario provides an excellent opportunity to teach them that you can’t just walk away when you get bored. And let’s be honest, we can all use this reminder from time to time, can’t we?

Creativity

Challenge your child to think about how to separate themselves from their competition. (Of course, this may be hypothetical competition since modern-day lemonade stands are few and far between.) Depending on their age, your little one may focus on colorful sign design at first. This focus is understandable, since making the sign is half the fun. But beyond that, feel free to offer creative suggestions. Could they provide a sugar-free alternative? Maybe offer an iced coffee alternative to appeal to more customers? How about spreading the word with a social media post? Should they accept payment through Venmo or PayPal? Like a child’s imagination, the options are limitless. So is the fun!

At this point, you may feel like opening up a lemonade stand whether your kids are interested or not! Channel that excitement and energy into helping them see the fun-filled potential of the idea, and don’t be afraid to get in there and help them when they need it. The time spent together will be even more valuable than the money earned and the lessons learned.

How to Start Building Credit Once You Turn 18

Good credit is crucial to unlocking many financial opportunities in life. When you have a great credit score, you will see lower interest rates on car loans, credit cards, and mortgages. Some employers and landlords even check credit reports before they make a job offer or approve a resident application.

Building good credit takes time, and adults as young as 18 should consider starting immediately so they have plenty of time to build up their credit score.

Here’s how to start building credit once you turn 18.

 

1. Understand the Basics of Credit

As you start to build credit, you should understand the basics of how it works.

Your credit report – maintained by credit bureaus Experian, TransUnion, and Equifax – contains data on your current and past debts, payment history, residential history, and more. This data is supplied by many of the lenders, creditors, and businesses with which you hold accounts.

The information contained in your credit report determines your credit score. Higher credit scores are more attractive to lenders and creditors. The factors that influence your score include:

  • Payment history
  • Average age of accounts
  • Credit utilization ratio
  • Account mix
  • New credit

As a new adult, some of these factors may not currently apply to you. However, they can all negatively or positively affect your score, depending on your behavior as a consumer. Educating yourself on credit now will help you avoid costly mistakes in the future.

 

2. Become an Authorized User

If you have a friend or family member who is willing to add you as an authorized user on their credit card, you can piggyback off their credit card activity to build your credit. Even if you don’t use the card, the account can still land on your credit report and boost your credit score.

This method poses some risks, both to the primary cardholder and the authorized user. If you or the primary cardholder rack up too much debt or miss payments, that activity could end up damaging the credit of both parties.

You should also verify that the credit card company reports card activity for authorized users. If they don’t, your credit won’t see any benefit.

 

3. Get a Starter Credit Card

Credit cards are one of the best tools around for building credit, but you may have trouble qualifying for one when you have no credit history. Luckily, there are a few credit card options for young people with little or no credit:

  • Secured Credit Cards: Secured credit cards require an upfront security deposit to open. Your deposit will typically equal your initial credit limit – for example, a $500 security deposit would get you a $500 credit limit. These cards are easier to qualify for, but you can use them to make purchases and build credit just like traditional credit cards.
  • Student Credit Cards: If you’re currently enrolled in school, you can apply for a student credit card. These cards typically have low credit limits, but they will help you build credit and they may even offer extra incentives for earning good grades.

 

4. Make Payments On Time

Making timely payments is the most important thing you can do to build credit, as payment history makes up 35% of your credit score. A positive payment history will help your credit score immensely.

This advice applies to credit cards, loans, utilities like cell phone services, and any other account that requires a monthly payment. No matter the account type, a late or missed payment that lands on your credit report can do significant damage to your credit score.

 

5. Maintain a Low Credit Card Balance

Your credit utilization ratio, or the amount of available credit you have tied up in debt, is another major contributor to your credit score. Most experts recommend keeping your credit card balances below 30% of the available credit limit.

Ideally, you should pay your balance off in full each month to avoid interest and keep your utilization low.

 

6. Get a Loan

Getting a loan just to build credit is generally not a good idea, as you shouldn’t take on debt only for the sake of your credit score. But if you have a valid reason, such as needing a car for college, a small loan in your name can help you build credit.

Just like credit cards, loans will only build credit if you pay them on time every month. And if you also have a credit card, getting a loan will help with the account mix factor of your credit score.

 

7. Monitor Your Credit Report and Credit Score

Now that you’re building credit, you should monitor your credit report and credit score. Monitoring your credit is one of the best ways to learn what will positively or negatively impact your scores. It will also help you catch inaccuracies or signs of identity theft sooner.

You can check your credit report for free annually with each major credit bureau. As you review your report, look for any negative or inaccurate information that could be screwing up your credit.

 

8. Keep it Simple… for Now.

The more credit cards and loans you open, the higher chances you have of falling into debt. When you’re just starting out, you should probably play it safe and manage one basic credit card and/or small loan until you get the hang of things. Trying to do manage too many debts at once could get you in over your head.

Over time, you can start to add other credit cards or loans to the mix, diversifying your credit profile and adding more opportunities to build credit. And because the age of your accounts affects your credit score, just keeping accounts open will help you build credit in the long run.

 


This article originally appeared on credit.com and was written by Leslie Tayne.

4 Actionable Steps to Build a Positive Money Mindset

It’s no question that the modern entrepreneur community has become fascinated with wealth consciousness and money mindset. What used to be deemed as “woowoo hippy” content—something I would even admittedly roll my eyes at—is now considered mainstream and essential to an entrepreneur’s toolbox, making every online business owner rethink the importance of mindset work in their creative and business pursuits.

But with so many people talking about wealth consciousness, it’s allowed a lot of room for discussion without much action. This leads us to the million-dollar question: What actually is a money mindset, and how can you start adopting it so that you can actually turn it into a lucrative asset?

My definition of a money mindset is this: getting rid of all limiting beliefs that are preventing you from taking powerful action, and viewing the world through an opportunistic lens in order to achieve unlimited abundance in your life.

Now, plenty of people will tell you that this is a load of bull. “There is only one lens, Lena, and that’s the reality… I am broke!”

And sure, on the surface, this might be exactly what it looks like.

But the truth is that most people are holding onto limiting beliefs that they aren’t even fully conscious of, or that they see as fact instead of an opinion that they’ve been conditioned to believe since childhood.

For example, let’s say you were raised hearing your parents fight about money. In result, you might subconsciously associate money with conflict, anger, resentment and pain. Those same parents would also judge your uncle Joe for having a six-figure income and would call him “shallow,” which taught you that having money made you a bad, greedy and selfish person. And if your uncle Joe then lost all of his money in the stock market and ended up sleeping on said parents’ couch, you would subconsciously see money as untrustworthy, unstable and instigative.

And who would try to attract that?

Basically, most people have the worst relationship with money ever. And this is what prevents them from getting massive amounts of it, all the time.

But, here’s the secret: When you heal your relationship with money, start appreciating it instead of resenting it and see it as an unlimited resource instead of one of scarcity, your reality will naturally transform as well.

Here are four tangible steps that you can take to start strengthening your mindset muscle, raking in the dough and achieving your greatest life:

 

1. Become a money mindset sponge.

One of the simplest steps that anyone can take to begin building a healthy relationship with money is by surrounding themselves by others who are already living by those values. You are the average of the five people you spend the most time with, so when you actively absorb content created by those who are already deep in a strong money mindset, you’ll naturally adopt those qualities as well.

For those who are looking to learn about wealth consciousness in a digestible and fun way, I recommend Jen Sincero’s You Are a Badass at Making Money and The Universe Has Your Back by Gabi Bernstein. There are also dozens of other experts who regularly provide free content on the topic, such as YouTube videos, podcasts and live streams. Commit to digesting one hour of money mindset content per day, whether that’s listening to a podcast episode at the gym or giving yourself and hour to read before bed at night.

Making this simple shift will drastically disrupt your perspective and begin to eat away at those limiting beliefs that are holding you back from making money. Change the people you surround yourself with and change your life.

 

2. Identify your go-to daily affirmations.

Try to find three to five one-liners you can repeat to yourself on a daily basis to pause, get re-aligned with your money-oriented goals and take powerful action to achieve the unimaginable.

For example, if you struggle with the idea that people with money are greedy—therefore you subconsciously self-sabotage by keeping low-paying jobs—a good affirmation worthy of repeating might be, “Having money and being a good person are not mutually exclusive. I give more back to the world when I have more money.”

If you were raised to believe that money is a scarce resource that only certain people are entitled to, a good affirmation might be, “There is unlimited money in the world, and unlimited money is coming to me right now. I am deserving of it.”

Online platforms like Pinterest are littered with powerful affirmations that you can keep written on your bathroom mirror, your car dashboard, your wallet and your iPhone lock screen. Read them out loud daily, multiple times. And while it might seem ridiculous at first, don’t stop until you truly believe them. Repetition leads to results and what you focus on manifests into your reality, so shift your attention and get into the affirmation zone.

In fact, let’s start with this one right now (read it out loud): “I love money, and money loves me.”

 

3. Ditch the negative language.

Notice how most people spend 95 percent of their time complaining? It’s the easiest way to bond with someone, squash an awkward silence or experience some cheap, instant gratification.

Mot of these low-level conversations revolve around the same four topics: a bad work situation (bad boss, bad paycheck); a bad relationship (friends, family, romantic partner); a bad money situation (college debt, the ridiculous price of Whole Foods tomatoes, overdue rent); and a bad health situation (can’t afford a gym membership, can’t stop eating crap, can’t get off the couch).

If this is you, pause and take in the great wisdom of Jen Sincero: You have to want your dreams more than you want your drama.

Or, in other words, there are excuses and there are results. You cannot have both. And by allowing so many negative ideas to flow out of your mouth, fostering a sense of self-victimization and self-pity, you cannot take massive, powerful action and you’re keeping yourself exactly where you are.

Actively eliminate any and all negative language from your vocabulary and try to replace it with the positive flip side. For example, if you find yourself on the verge of complaining about the price of your sandwich, instead say, “Wow, this sandwich is so good! I’m so happy I went with the turkey instead of the egg salad!” Or, if you’re about to complain about how rude your boss is, say, “I’m going to give my boss the benefit of the doubt and trust that she’s going through something challenging that’s preventing her from showing up as the leader I know she can be. I’m going to talk to her about it in an open, compassionate way.”

Positive language, while seemingly cheesy at first, leads to positive beliefs and naturally attracts positive things into your life.

 

4. Get the right mentors in your corner.

Pause and think about who you typically take advice from. Your parents? Your partner? Your co-workers?

From now on, challenge yourself to only seek advice from those who have already achieved what you want to achieve, period.

Of course, that process begins with getting clear on what you want. Do you want to grow your business to seven figures in revenue? Do you want to get a new job? Find a boyfriend who thinks the world of you?

Once you do gain that clarity, actively seek mentors who have already achieved what you want to achieve and spend your time with them.

The truth is that, it’s hard to change the way you perceive the world when you’re surrounded by people who are stuck in a “meh” mindset. (Rule of thumb: If you find yourself regularly listening to rants on just about everything—from the rude salesperson at H&M to the cost of rent in Manhattan to the guy who never called your friend back—you need to switch up your friend circles.) Mentors who are truly invested in your growth activate change within you by sharing their mental roadmaps to success, helping you develop a new lens to view the world through and showing you how to turn that internal fire into strategic action.

Trust me, it’s much easier to follow in the footsteps of someone who’s already done it than trying to tackle these changes alone while listening to your college roommate rant about Kylie Jenner’s parenting ability.

Cut out the frustration, overwhelm, and trial and error that naturally accompanies massive financial change, and find the right mentors who will get you there in a fraction of the time.

As a marketer and online entrepreneur, I know that it’s normal to put the whole mindset thing to the side and instead tackle the sexy stuff, like sales funnels, copywriting and Facebook ads (or is that just me?). But trust me when I say: The entire foundation for your success is how you perceive what’s possible. If you can cement an unshakable mentality and heal your lifelong soap opera with money, you will not only achieve the good, you will achieve the unimaginable.


This article was written by Lena Elkins and originally appeared on success.com.

9 Creative Ways to Boost Your Retirement Savings

Everyone knows how important it is to save for retirement. However, actually setting aside money for your future can be challenging. When you’re short on cash and have other demands on your budget, there might be little to nothing left to put toward your nest egg. How are you supposed to save for your future when you’re completely strapped in the present?

If you don’t make enough money right now to set aside, there are still ways to grow your retirement savings. You just have to think outside the box.

1. Use your tax refund

Many people daydream about how they want to spend their tax refund, which is often the biggest windfall they’ll see all year. In fact, last year the average tax refund was $2,763, according to the IRS.

If you got a tax refund this year, put it to work. Rather than spending your refund on electronics or a vacation, consider depositing that money straight into your retirement fund. With the power of compound interest, that refund could grow by the thousands by the time you retire.

2. Deposit your credit card rewards

If you have a credit card that offers cash back, that cash can be a regular source of extra money for your retirement fund. If you already use your credit card for routine purchases like utilities, gas, and groceries, this is easy money. Just make sure you are paying off your credit card balance in full every month.

3. Use cash back apps

If you don’t have a cash back credit card, you can still earn money for doing the shopping you were going to do anyway. Apps like Ibotta or SavingStar let you earn cash back on grocery purchases, while sites like eBates offer a percentage back on many online purchases. You’ll earn a percentage of your purchase as cash, and a check will be mailed to you — which you can toss straight into your retirement account. It’s a low-effort way to earn extra money going about your normal routine.

4. Launch a side hustle

If you have some extra time, you can earn money in the evenings or on weekends by launching a side hustle for fast cash. From walking dogs to making deliveries, there are hundreds of side gigs you can do in just a few hours a week. That extra income can go a long way to funding your retirement.

5. Sell your clutter

Take a look around at all of the electronics, textbooks, toys, and more that you never use. You may have as much as a few thousand dollars’ worth of items collecting dust in your home. That clutter can be eliminated while netting you some money for your retirement. Sell items on sites like eBay, LetGo, and Bookscouter to get cash for your stuff. 

6. Rent out extra space

If you have an extra bedroom, you can rent it out on sites like Airbnb or VRBO. Depending on your location and the size of your space, you could charge hundreds per night. However, you don’t even need an extra room to make money. You can rent out a spare closet or storage space in the garage on Spacer, or rent out your parking spot on SpotHero. 

7. Sell photos online

If you like photography, you can earn passive income to put toward your retirement savings by selling your photos. You can try your hand at selling stock photography on sites like iStock or Shutterstock, or you could sell your artwork in an online portfolio or on arts and craft sites like Etsy. You could also try selling smartphone photos on Foap, which is an app that connects brands with photographers looking to sell their images. 

8. Let strangers drive your car

If you don’t drive your car every day, your vehicle can become a lucrative source of income. You can rent it out to tourists or business travelers on Turo and set your own daily rate. According to the company, you can make nearly $5,800 a year if your car’s market value is $20,000 and you rent it out for 12 days per month. That alone could get you to the contribution limit on an IRA.

9. Trade in clothes for cash

If you have clothes, handbags, or shoes that you don’t wear anymore, stop letting them take up precious closet space. You can sell those items on sites like Poshmark, Tradesy, and even in-person at consignment stores like Plato’s Closet or Clothes Mentor. A single bag of clothes could net you enough to send a couple hundred dollars toward your retirement account.


This article originally appeared on WiseBread and was written by Kat Tretina.

The Worst Thing You Can Do With Your Savings And What To Do Instead

This article was written by Dani Pascarella and originally appeared on Forbes.


If you’re stashing all of your savings in a checking account, you are actually losing money. Inflation is on track to hit 2% this year and the average yield on an interest-bearing checking account right now is 0.04%.

That means the prices of the things you buy are increasing at a faster rate than your money is growing.

So what should you do with your savings instead?

Pyramid

Here’s the “Savings Pyramid.” Keep in mind that personal finance is not one-size-fits-all. While this serves as a great starting point for figuring out what to do with your savings, everyone’s situation is unique and has factors that can change this order, like an employer retirement match or pressing short-term goals.

Emergency Fund

Establishing an Emergency Fund is the first thing you should do when you have some extra cash. Park it in a high-yield savings account so you can earn interest and keep adding to it until you feel confident that the balance is high enough for you to handle any financial surprises that life throws your way. 

At a minimum, that should be three months’ worth of living expenses but feel free to go higher. Some get peace of mind from being extremely prepared and have chosen to save enough to cover an entire year.

Once Emergency Fund is checked off the list, you can shift your focus to making your money work for you.

High-Interest Debt

If you have high-interest debt, you should pay it off before climbing the “Savings Pyramid” any further, aka starting to invest your money.

That’s because historically, U.S. stocks have delivered an average annualized total return of about 9.8%. That means for every dollar you invest, you’d likely be making a return on investment (ROI) of 9.8% or less over time.

On the flipside, the average interest rate on a credit card is more than 16%. So every dollar you put towards paying off your balance is generating around a 16% return because you no longer have to pay that interest to your card issuer. That’s a much higher return than what you’d get from investing.

Retirement

Now that your Emergency Fund is fully stocked and you’ve eliminated high-interest debt, you’ve earned the right to start investing.

The first step is to focus on retirement. If you want to maintain your standard of living in your golden years, you should be saving at least 10% of your salary in a retirement account like a 401(k) or IRA. These account types come along with tax advantages that will help you get more bang for your buck.

While saving for retirement doesn’t sound like the most exciting thing to do with your money, especially when you’re young and retirement is decades away, it’s extremely important. Think of it as making sure the “future you” is well taken care of and living comfortably.

Taxable Investments

You probably have a lot of big goals between now and retirement that will take years to achieve, like buying a home or starting a business. A taxable investment account is a great place to save for these goals because it allows you to generate returns while you continue to save up. 

A major difference between a taxable investment account and a retirement account is accessibility. With retirement accounts, it’s generally difficult to access that money without consequences before you reach retirement age.

With a taxable investment account, you can liquidate your investments and use them for whatever you want, whenever you want.

Speculation

If you still have money left over after taking care of all of the previously mentioned items, then you can gamble with speculative investments—if it’s something you’re interested in doing.

Speculative investments are high risk/high reward; you either win big or lose big. Some examples include investing in a friend’s startup, buying cryptocurrency, and day-trading options.

Yes, you could make a fortune and your friend’s startup could be the next Facebook. But it could also fail and your shares could become completely worthless. So before you make a speculative investment you need to be completely comfortable with the possibility that your investment may go all the way down to $0.

3 Reasons It Makes Sense to Buy a House Right Now

If you’ve followed real estate news over the last couple years, you’ve probably heard people talking about a “seller’s market.” Maybe you’re asking yourself, “What does that even mean?” It’s just an easy way of saying the number of people looking for houses is high, and the number of available houses is low. It’s a real-world example of the Law of Supply and Demand you learned about in your high school Government and Economics class. So sure, it may be a seller’s market, but that doesn’t mean a buyer can’t get in on the fun! If you’ve been thinking about buying a home, there are many reasons to start house hunting today. Let’s take a closer look at three of them:

  • Mortgage programs offer money-saving options. If you’re currently renting, you probably remember how tough it was to come up with the first and last months’ rent that was due at lease signing. Because of that, you may be worried you’ll never be able to save enough money for the down payment on a home purchase. Fortunately, there’s good news! One of the benefits of a hot real estate market is that mortgage lenders are competing to help more people experience the benefits of homeownership. In addition to traditional fixed-rate and variable-rate mortgages, many lenders now offer programs that may include incentives like low- or no-down-payment options. There’s never been a better time to see what programs are available to you!
  • Mortgage rates are going up. You’ve heard the saying, “What goes up must come down.” Unfortunately, gravity doesn’t apply to interest rates. In fact, experts are predicting that rather than coming down, rates are about to do the exact opposite. After more than four years of historically low interest rates, mortgage experts are predicting that the current upward trend will continue. Since they’re bouncing back from record-setting lows, mortgage rates are still quite affordable. But with expected rate hikes on the horizon, waiting to see if the rates defy predictions could be a costly gamble. Locking in a fixed-rate mortgage loan now is a fantastic way to avoid rising rates in the future.
  • Summer’s just around the corner. This reason is more practical than financial. If you have kids, you know how difficult it can be to navigate the school registration process. If you’ve ever tried to change schools during the middle of a school year, you know why making a move during the summer makes good sense. If you’re buying a house in a new school zone, making the change during the summer months can save you the frustration of making a mid-year transition. Your kids will thank you. Your school administrator will thank you. Your sanity will thank you.

Whether you’re buying a home for one of the reasons listed above—or a different reason altogether, we have a mortgage program to meet your needs. If you’re already a homeowner, but you want to save money by refinancing to a lower rate, we can help with that as well. Contact a Scient mortgage specialist today to find the best solution for your house hunting needs!