Home » Posts tagged 'Budgeting'
Tag Archives: Budgeting
Budgeting Tips for the Sandwich Generation: How to Care for Kids and Parents
Everyone knows that raising kids can put a serious squeeze on your budget. Beyond covering day-to-day living expenses, there are all of those extras to considerâsports, after-school activities, braces, a first car. Oh, and don’t forget about college.
Add caring for elderly parents to the mix, and balancing your financial and family obligations could become even more difficult.
“It can be an emotional and financial roller coaster, being pushed and pulled in multiple directions at the same time,” says financial life planner and author Michael F. Kay.
The “sandwich generation”âwhich describes people that are raising children and taking care of aging parentsâis growing as Baby Boomers continue to age.
According to the Center for Retirement Research at Boston College, 17 percent of adult children serve as caregivers for their parents at some point in their lives. Aside from a time commitment, you may also be committing part of your budget to caregiving expenses like food, medications and doctor’s appointments.
When you’re caught in the caregiving crunch, you might be wondering: How do I take care of my parents and kids without going broke?
The answer lies in how you approach budgeting and saving. These money strategies for the sandwich generation and budgeting tips for the sandwich generation can help you balance your financial and family priorities:
Communicate with parents
Quentara Costa, a certified financial planner and founder of investment advisory service POWWOW, LLC, served as caregiver for her father, who was diagnosed with Alzheimer’s disease, while also managing a career and starting a family. That experience taught her two very important budgeting tips for the sandwich generation.
First, communication is key, and a money strategy for the sandwich generation is to talk with your parents about what they need in terms of care. “It should all start with a frank discussion and plan, preferably prior to any significant health crisis,” Costa says.
Second, run the numbers so you have a realistic understanding of caregiving costs, including how much parents will cover financially and what you can afford to contribute.
.block-quote_5back { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2017/09/5back-730×500.jpg); } @media (min-width: 730px) { .block-quote_5back { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2017/09/5back-1600×600.jpg); } }
17 percent of adult children serve as caregivers for their parents at some point in their lives.
Involve kids in financial discussions
While you’re talking over expectations with your parents, take time to do the same with your kids. Caregiving for your parents may be part of the discussion, but these talks can also be an opportunity for you and your children to talk about your family’s bigger financial picture.
With younger kids, for example, that might involve talking about how an allowance can be earned and used. You could teach kids about money using a savings account and discuss the difference between needs and wants. These lessons can help lay a solid money foundation as they as move into their tween and teen years when discussions might become more complex.
If your teen is on the verge of getting their driver’s license, for example, their expectation might be that you’ll help them buy a car or help with insurance and registration costs. Communicating about who will be contributing to these types of large expenses is a good money strategy for the sandwich generation.
The same goes for college, which can easily be one of the biggest expenses for parents and important when learning how to budget for the sandwich generation. If your budget as a caregiver can’t also accommodate full college tuition, your kids need to know that early on to help with their educational choices.
Talking over expectationsâyours and theirsâcan help you determine which schools are within reach financially, what scholarship or grant options may be available and whether your student is able to contribute to their education costs through work-study or a part-time job.
Consider the impact of caregiving on your income
When thinking about how to budget for the sandwich generation, consider that caring for aging parents can directly affect your earning potential if you have to cut back on the number of hours you work. The impact to your income will be more significant if you are the primary caregiver and not leveraging other care options, such as an in-home nurse, senior care facility or help from another adult child.
Costa says taking time away from work can be difficult if you’re the primary breadwinner or if your family is dual-income dependent. Losing some or all of your income, even temporarily, could make it challenging to meet your everyday expenses.
.block-quote_100back { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2017/09/100back-730×500.jpg); } @media (min-width: 730px) { .block-quote_100back { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2017/09/100back-1600×600.jpg); } }
“Very rarely do I recommend putting caregiving ahead of the client’s own cash reserve and retirement.”
When you’re facing a reduced income, how to budget for the sandwich generation is really about getting clear on needs versus wants. Start with a thorough spending review.
Are there expenses you might be able to reduce or eliminate while you’re providing care? How much do you need to earn each month to maintain your family’s standard of living? Keeping your family’s needs in focus and shaping your budget around them is a money strategy for the sandwich generation that can keep you from overextending yourself financially.
“Protect your capital from poor decisions made from emotions,” financial life planner Kay says. “It’s too easy when you’re stretched beyond reason to make in-the-heat-of-the-moment decisions that ultimately are not in anyone’s best interest.”
Keep saving in sight
One of the most important money strategies for the sandwich generation is continuing to save for short- and long-term financial goals.
“Very rarely do I recommend putting caregiving ahead of the client’s own cash reserve and retirement,” financial planner Costa says. “While the intention to put others before ourselves is noble, you may actually be pulling the next generation backwards due to your lack of self-planning.”
Sunny skies are the right time to save for a rainy day.
Start an emergency fund with no minimum balance.
Start Saving

Savings
Discover Bank, Member FDIC
Making regular contributions to your 401(k), an individual retirement account or an IRA CD should still be a priority. Adding to your emergency savings each monthâeven if you have to reduce the amount you normally save to fit new caregiving expenses into your budgetâcan help prepare you for unexpected expenses or the occasional cash flow shortfall. Contributing to a 529 college savings plan or a Coverdell ESA is a budgeting tip for the sandwich generation that can help you build a cushion for your children once they’re ready for college life.
When you are learning how to budget for the sandwich generation, don’t forget about your children’s savings goals. If there’s something specific they want to save for, help them figure out how much they need to save and a timeline for reaching their goal.
.post__breaker–7106 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/02/Budgeting-Tips-for-the-Sandwich-Generation-How-to-Care-for-Kids-and-Parents_5-FULL-450×200.jpg);}@media (min-width: 450px) { .post__breaker–7106 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/02/Budgeting-Tips-for-the-Sandwich-Generation-How-to-Care-for-Kids-and-Parents_5-FULL-730×215.jpg);} }@media (min-width: 730px) { .post__breaker–7106 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/02/Budgeting-Tips-for-the-Sandwich-Generation-How-to-Care-for-Kids-and-Parents_5-FULL-992×400.jpg);} }@media (min-width: 992px) { .post__breaker–7106 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/02/Budgeting-Tips-for-the-Sandwich-Generation-How-to-Care-for-Kids-and-Parents_5-FULL-1200×400.jpg);} }@media (min-width: 1200px) { .post__breaker–7106 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/02/Budgeting-Tips-for-the-Sandwich-Generation-How-to-Care-for-Kids-and-Parents_5-FULL-1600×400.jpg);} }
Ask for help if you need it
A big part of learning how to budget for the sandwich generation is finding resources you can leverage to help balance your family commitments. In the case of aging parents, there may be state or federal programs that can help with the cost of care.
Remember to also loop in your siblings or other family members when researching budgeting tips for the sandwich generation. If you have siblings or relatives, engage them in an open discussion about what they can contribute, financially or in terms of caregiving assistance, to your parents. Getting them involved and asking them to share some of the load can help you balance caregiving for parents while still making sure that you and your family’s financial outlook remains bright.
The post Budgeting Tips for the Sandwich Generation: How to Care for Kids and Parents appeared first on Discover Bank – Banking Topics Blog.
Source: discover.com
Set Financial Goals for Yourself

Everyone wants to have more money, less debt, and greater financial freedom, but very few will attain it. Simply telling yourself that youâll earn more cash and clear more debts isnât enough to realize those goals, but writing those tasks down, setting realistic targets, and steadily working towards them can significantly increase your chances.Â
Nothing is guaranteed, but someone with clearly defined financial goals has more chances of attaining financial freedom than someone without.
Types of Personal Financial Goals
Financial goals come in many forms, but they all revolve around money and acquiring as much of it as possible. Some of the most common short and long-term goals include:
Establish a Budget
The first step to fixing your finances is to create a budget. Itâs a short-term goal and itâs also one of the simplest, but that doesnât make it any less important. Many Americans underestimate how much they spend and overestimate how much they earn, making a budget essential for adding a little clarity.
Clear Credit Card Debt
Americans have an average of $38,000 worth of debt excluding mortgages. A small percentage of this is allocated to credit card debt, but it often carries the highest interest rate and has the worst terms. Clearing this debt is an honorable and sensible goal for anyone with mounting debts.
Save Money for a Big Purchase
The average American family under the age of 35 has between $2,500 and $4,000 in savings. Thatâs barely enough to cover a used car, let alone a mortgage down payment or college education, which is what most families are saving towards.
Save for Retirement
This is the ultimate long-term financial goal. Saving for your retirement will give you something to look forward to and make life easier as you enter your old age. Many retired Americans regret not saving more money, with some experts recommending that you have at least $1 million tucked away to cover you for an average of 18 years.
Thatâs a lot of money, but it comes from a lifetime of saving and means you can enjoy plenty of cruises and vacations when you call time on your career.
Fix your Credit Score
Next to your Social Security Number, your credit score is one of the most important numbers you have and one you need to pay close attention to. Build a good score and a world of opportunities will open for you, making it easier to get low-interest loans and secure high credit limits.
Create an Emergency Fund
You can never underestimate the benefits of an emergency fund. Itâs essentially a savings account without an end goal and itâs used to cover you in the event that youâre hit with an unexpected bill or expense. It will also help if you lose your job or become ill.
Improve your Financial Situation
This incorporates many of the goals discussed above, one can be both a short-term financial goal and a long-term one. The most common goal is simply to have more money for an easier life or an early retirement, but there are also those who save so they can move abroad, start a dream business or simply become a millionaire.
These goals are a little harder to achieve than simply clearing debt or have some extra money in your pocket, but theyâre not unreasonable. If you have a detailed plan and work hard to realize it, thereâs no reason why those lofty long-term financial goals canât be realized.
Why Should You Set Personal Financial Goals?
Goals give you direction and purpose. They provide a detailed outline of what you need to do, what you have achieved thus far, and what remains. This adds a sense of accountability that simply wouldnât exist without those goals.
If you simply tell yourself that youâre going to do something, youâre more prone to procrastinating and moving the goalposts whenever it suits you. If you write all your goals down and separate them into clear and manageable chunks, thereâs no room for denial or deviation.
Think of it as a visit to the grocery store. If you have a list, you buy what you need, donât forget anything, and are more inclined to focus on the purchases that are within budget and will actually be eaten and enjoyed. If you visit without a list, youâll end up with a bunch of unnecessary foods you bought just because they were on offer and will forget all the things you went there to buy.
Our minds need direction, purpose. When the road is long, itâs easier to traverse if there are milestones, checkpoints, and clearly defined borders; without all that, itâs just a chaotic mess and youâll never make it to the end.
Short vs Long-Term Goals
A short-term goal spans days, weeks or months; a long-term goal stretches things out over several years and even a decade. Itâs important to have both, but short-term goals should have priority as long-term ones can get lost and forgotten about.
As an example, letâs suppose that your goal is to save a lot of money for your retirement. A long-term goal would be as simple as:
- Save $500,000 before retirement
This doesnât really help. However, if you break it down into multiple short-term goals you can focus on each of these in turn, ticking them off as you go and motivating you to keep going. As an example:
Increase Debt-to-Income Ratio
- Cancel unused subscriptions
- Sell unwanted items
- Ask for a pay rise
- Get a part-time job
Repay Debts
- Clear credit card 1
- Clear credit card 2
- Repay student loans
- Repay personal loan
Save Money
- Open a savings account
- Save $500 a month
- Make a sound investment
You can break these debts down even further and focus on making extra cash every single day. If thatâs what gets you up in the morning and pushes you towards your long-term goal, thatâs what you need to do.
How to Track Your Progress
As the saying goes, there is an app for everything and where financial goals are concerned there are actually multiple tools and apps to help you out:
- Mint: Track activity in real-time after connecting bank accounts and credit cards. Monitor spending, create budgets, and learn how to manage your money. Mint is one of the highest-rated budgeting and financial management apps on the market and is well-deserving of the praise it has received over the years.
- Wally: A great little budgeting tool that can keep track of your savings goals and tell you when certain bills are due. Itâs free and if your goal is to save and cover your debts, it does everything you need.
- Every Dollar: A simple but useful app designed to help you escape debt and manage your finances more effectively. It literally lets you see where âevery dollarâ is being spent.
- Clarity Money: A useful app to help you manage your subscriptions. The average consumer has dozens of subscriptions and itâs easy to lose track, but Clarity Money keeps everything in one place.
- Spendee: Manage family finances with this shared budgeting app. Itâs ideal if youâre saving along with a partner or want to keep track of what everyone in your household is spending.
How to Meet Your Financial Goals
Whateverâs on your to-do list, just set a goal and start working towards it. Take a look at these tips to help you:
Debt EliminationÂ
Debt is crippling and the less you repay, the more damaging it becomes. Credit card debt, student loans, medical debt; it creeps into your life, it grows, and it never seems to go away. Before you focus on your savings and build towards a brighter future, you need to focus on clearing those debts.
Debt relief methods can help you with this, including consolidation, debt management, and debt settlement. In the first instance, however, you should try debt payoff strategies like Debt Snowball and Debt Avalanche, both of which rely on you generating extra money to meet more than your minimum.
Every time you meet the minimum payment on your debt, youâre paying a lot of interest and a little principal. The interest compounds, the debt grows, and if you keep sticking with just the minimum payments it will take forever to repay. When you repay more than the minimum, however, youâll clear more of the principal, reducing the compounding interest, amount, and term.
Emergency FundÂ
It doesnât matter how substantial your net worth is, how much money you have in the bank and what sort of long-term financial goals you have, it always helps to have an emergency fund.
An emergency fund is a sum of money put aside for a rainy day. Unlike a savings account, which might be used for retirement, a vacation or college tuition, an emergency fund has no predetermined purpose and is designed just to sit, grow, and wait for a rainy day.
An emergency fund can help you if you lose your job or have a medical crisis. We live in times of uncertainty and exist under one of the costliest healthcare systems in the world. A short stay in a hospital can bankrupt you if youâre not insured and even if you are, there are still costs to consider.
Budget to save and invest but keep some money aside to build an emergency fund and make sure youâre prepared.
Savings Goals
Successful savings goals are built on careful planning and sacrifices. If you want a new home, you need to say no to luxury purchases, eating out, vacations, and other expenditures.Â
The average American family wastes about $1,500 a year on uneaten groceries, $3,000 on restaurants and takeout, up to $500 on gambling, and thousands more on vacations, smoking, unused subscriptions, and more.
You donât need to eliminate these expenditures entirely, just look for cheaper and more sustainable alternatives. Save on wasted groceries and dining out by going for a picnic; swap an expensive vacation abroad for a family fun staycation.Â
Once you eliminate these expenses, you can start saving towards whatever goal you have, be it a retirement fund, a car or the down payment on a house.
Achieving a Huge Net Worth
Itâs okay to scoff at this one as it does seem a little far-fetched. However, itâs a dream that countless Americans have and one that is very attainable. Of course, itâs easier if you have a talent or youâre young enough to develop one, but providing you have a good work ethic, donât spend your days procrastinating, and have the right mindset, you can build a sizeable net worth.Â
Itâs about making smart financial decisions, acquiring lots of knowledge, adopting careful investment strategies, and working endlessly. Here are some tips to help you accomplish this lofty goal:
Donât Spend Frivolously
The world of the rich and famous is awash with stories of people who adopt unbelievably frugal lifestyles despite having millions or billions in the bank. There are stories of Warren Buffet going to great lengths to use coupons to buy fast food, even though heâs one of the richest men in the world.
This kind of frugality is a little extreme, but it comes from the right place. Rappers, rock stars and sports stars like to throw money around when they have it, but theyâre the ones declaring bankruptcy and being arrested for tax debts when their careers enter a slump. Thatâs not a sustainable lifestyle for anyone, even the super-rich.
Learn how to manage money properly and accumulate as much as you can. Donât scoff at the end of saving a few dollars just because you have a few hundred; donât throw away a few hundred just because you have a few thousand.Â
Adopting this frugality will hasten your journey to becoming a millionaire. It will also allow you to manage your money effectively when you eventually make it, preventing you from being one of many sob stories of people who came into lots of money and then blew it.
Treat Life Like a Business
To become rich and successful in a way that doesnât rely on good fortune, you need to treat your life like a business. A business, for instance, is very wary of accumulating expenses and will instead try to invest additional cash into assets. These assets increase the value of the business, whereas expenses reduce it.
As an example, letâs assume that youâre 18 and have a talent for writing. A good investment would be an education in literature or creative writing, a laptop, a writing course, even a home office. An expense, however, would be a holiday, a flashy watch or lots of designer clothes. None of these things will grow your wealth and most will hinder it.
Take a look at our guide on good debt vs bad debt to learn more.
Read, Learn, Fail
Read as many books as you can on your chosen subject and on similar subjects. Youâll learn about the world, the English language, and more. All these will help to improve your reasoning, logic, and knowledge, which will help with your goals.
Learn New Skills
Knowledge doesnât just come from books and it shouldnât be limited to specific subjects. If you want to be rich and successful, you need to devote every minute of your spare time to working, learning, and acquiring new skills.Â
Learn a language, adopt a craft, research into a niche subjectâall these things can broaden your horizons and increase your earning potential.
Find a Specialty and Stick with It
While itâs good to read many different subjects and learn many different things, when it comes to actually making money, you need to stick with a single subject. The world is filled with wannabee millionaires who spend their days writing music, books, and screenplays, and their nights trying to juggle freelance careers and businesses.
Specialize in one thing, be the best you can be, and once you have the money and the success you can start venturing into other areas.
Stop Making Excuses
Generally, people who dream of becoming rich and successful will fall into one of two categories. In the first, there are those who spend their days dreaming, partying, and procrastinating. They assume that being rich is simply a case of having a great idea and then waiting for the riches to descend. In the other group, youâll find people who work every minute of the day and are always willing to take risks and make sacrifices.
If you want to accomplish great things, you need to work for it. Donât assume that all the rich and successful people you see on social media have it easy. If theyâre not working every minute of every day, thereâs a good chance they worked that much to get where they are.
Set Financial Goals for Yourself is a post from Pocket Your Dollars.
Source: pocketyourdollars.com
6 Tips for Successfully Managing a Checking Account in College
Heading off to college is exciting. Really exciting. You finally have freedom! You’re out on your own for the very first time, managing your studies, managing your social life and… managing your finances.
Despite being a big part of your newfound independence, personal finance is a subject you probably won’t find on your course schedule. If you didn’t take a personal finance class in high school and never had money lessons from your parents, you may not know how to manage a checking account as a college student.
“College students have very different needs for their checking account than their parents or other adults,” says Tommy Martin, CEO of Clear Path Financial Planning and a finance blogger at TommyMartin.com. If you live in a different city during the school year than you do during winter and summer breaks, for example, you may be after a bank for which location doesn’t matter.
Ok, so how do I manage my checking account in college, you ask? First, don’t get overwhelmed. Learning how to manage money while in college and getting a handle on checking account basics is simpler than you might think (oh, and the skills will serve you for years to come). Second, you can kick off your checking account education with these tips for managing a checking account in college:
1. Compare checking accounts before signing up
While your college life may center around your school campus, you should consider venturing off-campus to pick the right checking account for your lifestyle.
“Students typically sign up with a bank that’s on campus or close to campus,” says Sahil Vakil, a financial planner and president of MYRA Wealth in New Jersey. However, the nearest bank might not be the one that best fits your needs, he adds.
Instead of picking a bank based solely on proximity, consider all of your options, including banks with off-campus locations and online-only banks.
Martin agrees, saying that learning how to manage money while in college means considering all of your banking options rather than “automatically enrolling or choosing the official school bank just because it has the school logo on it.” There are other ways to show your school pride, after all.
2. Learn about checking account fees and rewards
Vakil and Martin both say a tip for managing a checking account in college is to consider an account’s fees before signing up. Costly fees can eat into your savings and spending money, which can be a blow for students who are not working full-time. When you are choosing a checking account in college, consider fees for:
- Monthly maintenance (essentially keeping your account open)
- Minimum balance (not maintaining one)
- ATM usage
- New checks
- Wire transfers
- Online bill pay
- Replacement debit cards
Martin says a checking account with no minimum balance requirement or minimum number of transactions could be a good fit for students. “It allows them to focus on their education” instead of worrying about incurring penalties, he says. “Even a $5 fee on a checking account with $60 in it can be devastating.”
.block-quote_5back { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2017/09/5back-730×500.jpg); } @media (min-width: 730px) { .block-quote_5back { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2017/09/5back-1600×600.jpg); } }
Costly fees can eat into your savings and spending money, which can be a blow for students who are not working full-time.
Martin also suggests finding an account that has a large network of no-fee ATMs located across the country to better manage your checking account as a college student. “Especially if you’re going to a school in a different state, the local bank from home might wind up costing you a lot in terms of ATM fees,” he says. If your parents plan to wire you money, find an account that doesn’t charge incoming wire fees, Martin adds.
While fees should be a focus when you are learning how to manage money while in college, don’t forget about incentives. You may be able to find a checking account that actually helps you grow your balance by paying interest or offering a cash back rewards program.
“If you have to pay for books or supplies, at least you can get some cash back and use it for a free dinner,” Martin says. Discover Cashback Debit, for example, offers 1% cash back on up to $3,000 in debit card purchases each month.1
.post__breaker–6734 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2018/09/6-Tips-for-Successfully-Managing-a-Checking-Account-in-College_3-FULL-911491230-450×200.jpg);}@media (min-width: 450px) { .post__breaker–6734 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2018/09/6-Tips-for-Successfully-Managing-a-Checking-Account-in-College_3-FULL-911491230-730×215.jpg);} }@media (min-width: 730px) { .post__breaker–6734 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2018/09/6-Tips-for-Successfully-Managing-a-Checking-Account-in-College_3-FULL-911491230-992×400.jpg);} }@media (min-width: 992px) { .post__breaker–6734 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2018/09/6-Tips-for-Successfully-Managing-a-Checking-Account-in-College_3-FULL-911491230-1200×400.jpg);} }@media (min-width: 1200px) { .post__breaker–6734 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2018/09/6-Tips-for-Successfully-Managing-a-Checking-Account-in-College_3-FULL-911491230-1600×400.jpg);} }
3. Track your checking account balance
Luckily, you don’t need to take Banking 101 to figure out your funds, and tech makes tracking your balance and account activity easier than ever. Most banks let you log in to your account online (don’t get distracted in class!), and with a bank’s mobile app you can transfer money to friends, pay bills, deposit checks and check your balanceâall while you’re on the go.
Knowing your balance at all times is a tip for managing a checking account in college because it can help you avoid overdrafts and insufficient funds fees. It can also help you forecast your income and expenses to ensure you’ll have enough money to cover future costs. Surpriseâthat’s budgeting!
There’s no one-size-fits-all budgeting program or system, though. You can go old-school and track your budget on a printed-out budget sheet, or you can go tech-savvy with a budgeting and spending app. “What’s best for you is the one you’re actually going to use,” Martin says.
If you learn how to manage money while in college and make a practice of maintaining your budget, the habit will follow you after graduation.
.block-quote_1back { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2017/09/1back-730×500.jpg); } @media (min-width: 730px) { .block-quote_1back { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2017/09/1back-1600×600.jpg); } }
âCollege students have very different needs for their checking account than their parents or other adults.â
4. Secure your account
One of Vakil’s tips for managing a checking account in college is to make sure your account stays secure. Create a unique account name and password that you use only for your checking account, and never share your credentials.
Vakil says you can also enable two-factor authentication if your bank offers it and you’re looking for another way to improve the management of your checking account as a college student. “This additional layer of protection safeguards your sensitive financial data and strengthens the security of your account by requiring two methods of verifying your identity.”
For example, if you log in to your account from a new device, you may be sent a text message with a code that you’ll need to enter to access your account.
5. Keep an eye out for debit card holds
No matter where you bank, a merchant may place a hold on funds in your checking account when you use your debit card. Generally, a hold is placed for travel-related purchasesâsuch as at rental car companies, hotels and gas stationsâand used by merchants to protect against fraud and errors.
“Holds on a debit card can make it tricky for you to manage your finances,” Vakil says. For example, “when you rent a car, the car rental company might put a $500 hold on your account. If the balance in your account was $550, now you can only use another $50.”
Being aware of holds can be particularly important if you are managing a checking account as a college student and tend to have a low account balance.
If a merchant will be placing a hold, it will generally post a sign to notify customers. The hold will typically be removed after the funds are transferred to the merchant from your financial institution, typically within three to four days.
Knowing when a hold will be placed, the amount of the hold and how much money you have in your checking account can help you manage your checking account as a college student by avoiding overdrafts and missed bill payments due to insufficient funds.
6. Don’t let one mistake throw you off track
If you can learn how to manage a checking account as a college student, and more generally, how to manage money while in college, you can lay the groundwork for a solid financial future. Checking account mistakes may occasionally happen (oops, I didn’t budget enough for that spring break trip), but don’t let them discourage you to the point of apathy. Instead, try to continually expand your knowledge and practice healthy financial habits.
1 ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal, who also provide P2P payments) may not be eligible for cash back rewards. Apple, the Apple logo and Apple Pay are trademarks of Apple Inc., registered in the U.S. and other countries. Venmo and PayPal are registered trademarks of PayPal, Inc.
The post 6 Tips for Successfully Managing a Checking Account in College appeared first on Discover Bank – Banking Topics Blog.
Source: discover.com
4 Tricks for Budgeting on a Fluctuating Income
If you have an irregular income, you know how great the good times feelâand how difficult the lean times can be. While you can’t always control when you get paid or the size of each paycheck if you’re a freelancer, contractor or work in the gig economy, you can take control of your money by creating a budget that will help you manage these financial extremes.
Antowoine Winters, a financial planner and principal at Next Steps Financial Planning, LLC, says creating a budget with a variable income can require big-picture thinking. You may need to spend time testing out different methods when you first start budgeting, but, âif done correctly, it can really empower you to control your life,” Winters says.
How do you budget on an irregular income? Consider these four strategies to help you budget with a variable income and gain financial confidence:
1. Determine your average income and expenses
If you want to start budgeting on a fluctuating income, you need to know how much money you have coming in and how much you’re spending.
Of course, that’s the basis for any budget. But it can be particularly important if you’re trying to budget on an irregular income because you may have especially high- or low-income periods. You want to start tracking as soon as possible to build up accurate data on your average income and expenses.
For example, once you have six months’ worth of income and expenses documented, you can divide the total by six to determine your average income and expenses by month.
Many financial apps and websites can help with the tracking, including ones that can connect to your online bank and credit card accounts and automatically pull in your transactions. You may even be able to pull in previous months’ or years’ worth of data, which you can use to calculate your averages.
If you’re budgeting on a fluctuating income and apps aren’t your thing, you can use a spreadsheet or even a pen and notebook to track your cash flow. However, without automated tracking, it can be difficult to consistently keep your information up to date.
2. Try a zero-sum budget
“There are several strategies you can use to budget with an irregular income, but one of the easiest ones is the zero-sum budget,” says Holly Johnson. As a full-time freelance writer, she’s been budgeting with a variable income for over seven years and is the coauthor of the book Zero Down Your Debt.
With a zero-sum budget, your income and expenses should even out so there’s nothing left over at the end of the month. The trick is to treat your savings goals as expenses. For example, your “expenses” may include saving for an emergency, vacation or homeownership.
.block-quote_1back { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2017/09/1back-730×500.jpg); } @media (min-width: 730px) { .block-quote_1back { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2017/09/1back-1600×600.jpg); } }
“There are several strategies you can use to budget with an irregular income, but one of the easiest ones is the zero-sum budget.”
Johnson says if you’re budgeting on a fluctuating income, you can adopt the zero-sum budget by creating a “salary” for yourself. Consider your average monthly expenses (shameless plug for tip 1) and use that number as your baseline.
For example, if your monthly household bills, groceries, business expenses, savings goals and other necessities add up to $4,000, that’s your salary for the month. During months when you make over $4,000, put the extra money into a separate savings account. During months when you make less than $4,000, draw from that account to bring your salary up to $4,000.
“We call this fund the ‘boom and bust’ fund,” Johnson says. “By building up an adequate amount of savings, you will create a situation where you can pay yourself the salary you need each month.”
3. Separate your saving and spending money
Physically separating your savings from your everyday spending money may be especially important when you’re creating a budget on an irregular income. You may be tempted to pull funds from your savings goals during low-income months, and stashing your savings in a separate, high-yield savings account can force you to pause and think twice before dipping in.
You earned it.
Now earn more with it.
Online savings with no minimum balance.
Start Saving


Savings
Discover Bank, Member FDIC
An easy way to put this tip into action when creating a budget with a variable income is to have all of your income deposited into one account, then disburse it into separate savings and spending accounts. “Transfer a set amount on the first of every month to a bill-paying account and a set amount to a spending account,” Winters, the financial planner, says.
“The bill pay account is used to pay for all of the regular expenses, like rent, insurance, car payments, student loans, etc.,” Winters says. These bills generally stay the same each month. The spending account can be used for your variable expenses, such as groceries and gas.
.post__breaker–7357 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/04/GettyImages-665242810-450×200.jpg);}@media (min-width: 450px) { .post__breaker–7357 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/04/GettyImages-665242810-730×215.jpg);} }@media (min-width: 730px) { .post__breaker–7357 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/04/GettyImages-665242810-992×400.jpg);} }@media (min-width: 992px) { .post__breaker–7357 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/04/GettyImages-665242810-1200×400.jpg);} }@media (min-width: 1200px) { .post__breaker–7357 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/04/GettyImages-665242810-1600×400.jpg);} }
When considering your savings accounts, Winters also suggests funding a retirement account, such as an Individual Retirement Account (IRA).
If you’re budgeting on a fluctuating income as a contract worker or freelancer, you may also want to set money aside for taxes because the income and payroll taxes you’ll owe aren’t automatically taken out of your paychecks.
4. Build up your emergency fund
“The best way to weather low-income periods is to prepare with an adequate emergency fund,” freelancer Johnson says. An emergency fund is money you set aside for necessary expenses during an emergency, such as a medical issue or broken-down vehicle.
Generally, you’ll want to save up enough money to cover three to six months of your regular expenses. Once you build your fund, you can put extra savings toward other financial goals.
When you’re budgeting on a fluctuating income, having the emergency fund can help you feel more at ease knowing that you’ll be able to pay your necessary bills if the unexpected happens or when you’re stuck in a low-income period for longer than anticipated.
A budget can make living with a variable income easier
It can be challenging to budget on an irregular income, especially when you’re first starting. You might have to cut back on expenses for several months to start building up your savings and try multiple budgeting methods before finding the one that works best for you.
“Budgeting requires a mindset change regardless of which type of budget you try,” Johnson explains.
.block-quote_20front { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2017/09/20front-730×500.jpg); } @media (min-width: 730px) { .block-quote_20front { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2017/09/20front-1600×600.jpg); } }
“The best way to weather low-income periods is to prepare with an adequate emergency fund.”
However, once in place, a budget on an irregular income can also help free you from worrying about the boom-and-bust cycle that many variable-income workers deal with throughout the year.
The goal is to get to the point where you can budget with a variable income and don’t have to worry about when you’ll get paid next because you set your budget based on your averages, planned ahead during the high times and have savings ready for your low times.
The post 4 Tricks for Budgeting on a Fluctuating Income appeared first on Discover Bank – Banking Topics Blog.
Source: discover.com
How to Maximize Rewards on Everyday Spending

While many rewards enthusiasts focus on signing up for new credit cards to earn signup bonuses, not everyone has the time or desire to play the signup game. There is effort involved in tracking multiple cards, annual fees, and rewards programs, after all, and some people don’t want to spend their time or mental energy this way.
If you’re someone who falls into this category, you may be better off maximizing one or two cards instead of chasing rewards. Fortunately, you can earn plenty of rewards over time if you’re savvy about your card’s benefits and bonus categories.
The key to getting the most out of your rewards cards is understanding how they work and looking for opportunities to earn more points on your everyday spending. Here are some tips that can help.
Brainstorm every bill you could pay with a credit card
Because rewards cards offer points based on each dollar you spend, maximizing the amount you can spend on credit is the best way to boost your rewards haul. The smartest strategy to use here is figuring out how many of your monthly bills you can pay with a credit card.
While you may not be notified or aware, it’s possible that bills you’ve been paying with a check or debit card for years can be paid with a credit card without any fees. While your bills may vary, some expenses you should try to pay with a credit card include:
- Rent
- Utility bills like electric or gas
- Health insurance
- Cable television and internet
- Cell phone
- Taxes
- Daycare
- Auto and home insurance
- Subscription services
- College tuition or student loans
- Medical bills
- Lawn care
Keep in mind that these are just some of the bills you could be paying with credit. Depending on your situation, you could have additional, uncommon expenses to cover that could be paid with credit with ease.
Also, remember that these additional bills should be paid with credit on top of your everyday expenses like groceries, dining out, gas or bus fare, and miscellaneous spending. Every time you buy something in person or online, you should strive to pay with your rewards card if you can.
Leverage your rewards card bonus categories
It’s also important to leverage your favorite card bonus categories, whatever they may be. This is especially important if you have a few cards with different bonus categories since you’ll want to make sure you’re using the right card for bills that let you earn bonus points.
Let’s say you have a travel credit card that earns 3x points on dining and travel and another card that earns 6x points at the grocery store. In that case, you would be smart to use the travel card for dining and travel purchases and your other card when you stock up on food. While the amount of rewards you earn with individual purchases may seem nominal, using the right card for the right purchase can help you earn a lot more rewards over time.
Set up auto-pay bills to be paid with credit
Most of us have bills set up to be paid automatically, whether it’s our Netflix and Hulu subscriptions, gym membership, or utility bills. Make sure each bill you have set up to be paid automatically is set up to be paid with your rewards card and not a debit card. This way, you can earn rewards points on those expenses every month.
Use shopping portals and dining clubs
Many flexible rewards programs, frequent flyer programs, and hotel loyalty programs have shopping portals you can access to earn extra points. Major airlines like American, Delta, and United also have shopping portals that work similarly. (See also: How to Maximize Rewards Through Credit Card Shopping Portals)
Some programs like Southwest and Delta also offer dining clubs. These programs let you earn additional points or miles just for dining at participating restaurants in your area. It’s easy and it’s free to join, so you may as well earn extra miles on your spending if you’re going to dine out anyway. (See also: Everything You Need to Know About Airline Dining Rewards Programs)
How much the average family can earn
If you are skeptical the average family can rack up meaningful rewards without signing up for new cards over and over again, look at how this might work in real life. For example, imagine a family of four with two rewards card-toting adults. Across the two of them, they have:
- A cash back card that earns 2% back
- A travel credit card that earns 3% on dining and travel
- A rewards card that earns 6% cash back at the grocery store on up to $6,000 in spending each year
To figure out how much this family might earn, we used Bureau of Labor Statistics spending averages from 2017. Here’s a rundown of that data for the year plus how much a family could earn in rewards over 12 months based on average expenses:
- Food at home ($4,363): $261.78 in rewards at 6%
- Food away from home ($3,365): $100.95 at 3%
- Utilities, fuels, and public services ($3,836): $76.72 at 2%
- Household operations ($1,412): $28.24 at 2%
- Household supplies ($755): $45.30 at 6%
- Household furnishings and equipment ($1,987): $39.74 at 2%
- Apparel and services ($1,833): $36.66 at 2%
- Gasoline and motor oil ($1,968): $39.36 at 2%
- Other vehicle expenses ($2,842): $56.84 at 2%
- Healthcare ($4,928): $98.56 at 2%
- Entertainment ($3,203): $64.06 at 2%
- Personal care products ($762): $45.72 at 6%
- Education ($1,491): $29.82 at 2%
Total rewards: $923.75
While $900+ is a lot to earn in rewards within a year, you have the potential to earn a lot more. After all, these are just some of the expenses the average family faces and not all of them. If you could pay some additional big bills with credit each month like daycare or your rent, you could significantly add to your bottom line.
What to watch out for
While maximizing rewards cards is a smart idea if you’re using them already anyway, there are always pitfalls to be aware of when you’re using a credit card. Here’s what to watch out for during your quest for more cash back and travel rewards.
Fees for using credit
While there are many bills you can pay with credit without a fee, some vendors, merchants, and service providers charge a fee to use a credit card as payment. Fees are especially prevalent on bills such as utilities, cable or internet, rent, and insurance. Make sure to verify you aren’t being charged a fee to use credit before you proceed.
Annual fees
Don’t forget that some rewards cards charge annual fees. These fees may be worth it depending on your spending and rewards haul, but you should always factor them into the equation to make sure each fee is worth paying. If you’re against paying annual fees, look for rewards cards that don’t charge one.
Budgeting mishaps
Using a credit card for all your expenses may simplify your financial life, but it could also cause your budget to fall out of whack. Make sure you’re only spending on purchases you planned to make anyway, and that you’re tracking your spending and paying off your credit cards regularly.
Debt
Never use credit cards for purchases you can’t afford to repay if you’re pursuing rewards. The interest you’ll pay will always be much more than the rewards you earn. If you’re worried using credit will cause you to rack up debt you can’t afford to repay, you’re better off sticking to cash or debit instead.
Like this article? Pin it!








Source: feeds.killeraces.com