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    Tag: Automatic Transfer

    How to Manage Your First Salary and Grow Your Savings

    by Marjorie Lowe

    February 10, 2021

    11:59 pm

    Leave a comment on How to Manage Your First Salary and Grow Your Savings

    Budgeting, Credit Cards

    401k, Automatic Transfer, away, Banking, Budget, Budgeting, build, building, Buy, car, Career, Career & Education, Career Tips, Checking Account, Compound Interest, credit, credit card, Credit Card Debt, debt, Direct Deposit, Emergency Fund, Extra Income, Family, Fees, Finance, Financial Education, Financial Goals, Financial Planning, Financial Wize, FinancialWize, Grow, High-yield Accounts, How To, interest rates, keep, Life, Life Events, Loans, Long-term Saving, Managing Your Money, money, Money-saving Tips, Mortgage, Online Savings Account, Personal Finance, rate, Retirement, Retirement Planning, Salary, Save Money, Saving, Saving for Retirement, saving money, savings, Savings Account, savings accounts, Savings Strategies, Savings Tips, security, Spending, Starting Out, student, student debt, Student Loans, tips, will, Work Life

    After months spent scouring career boards and hours of networking, interviewing and submitting applications, landing your first job is a major relief—and a big accomplishment. It also brings new responsibilities as you learn how to manage your first salary, budget for your lifestyle and develop the smart savings habits that will serve you your entire life.

    As you prepare for your first day, it’s critical to start thinking about how much of your paycheck you should save.

    To help you find the answer, financial experts provide tips on how to manage your first salary, offer strategies to help you save money at your first job and explain how to adjust your savings as your career flourishes.

    Learning how to manage your first salary can make a major difference as you advance through the rest of your career.

    Save money at your first job: The case for starting now

    You may feel intimidated by the commitment to save money at your first job, especially if you’re carrying student debt or feeling like you aren’t making quite enough. Joy Liu, head trainer at personal finance company Financial Gym, certainly felt that way.

    “When I got my first job, I made $35,000 a year,” Liu says. “It was easy to just throw my hands up and say, ‘I can’t save right now on this salary.’” But she urges young savers to reconsider.

    “Looking back, with the knowledge that I have now, I could have made it work if I knew that saving was something I needed to do,” she says.

    In fact, saving money at your first job will put you in a better place when you’re a seasoned professional, Liu says. When you deposit some of your paycheck into a savings account, you’ll earn interest on the balance. Your now larger balance will itself earn interest (you’ve got compound interest to thank for that). The earlier in your career you start to save, the more time you’ll have for your money to grow exponentially.

    When learning how to save money at your first job, it's easier to build good habits without large financial commitments.

    Saving money at your first job might also make sense because you likely aren’t juggling the large financial commitments you’ll face later in life.

    “You may have student loans, you may have some credit card debt, but you most likely don’t have a mortgage, which is a huge lifelong commitment,” says Ashley Dixon, a CFP® and lead planner at financial planning firm Gen Y Planning.

    Determine how much of your paycheck you should save

    You now know you need to sock away part of your earnings from your new job, but how much of your paycheck should you save?

    While your specific savings rate will depend on your goals and circumstances, Dixon recommends saving 20 percent of your monthly take-home pay. If that’s too challenging, start with 10 percent, Liu says.

    If you don’t think you have enough to save, review your essential expenses, like rent, student loan payments, utilities and groceries. Save from whatever cash is “left over” each month, and see how close you can get to that 10 to 20 percent goal.

    When determining how much of your paycheck you should save, you might initially find that there isn’t enough cash left over. If that’s the case, create a budget to keep your spending and savings on track, or review your existing budget to see which unnecessary expenses you can cut.

    “Being mindful of where you’re spending your money and keeping track of spending in real time is the hardest part and is where people struggle the most,” Liu says. “But knowing where your money is at any given point is how you stay on track, whether that’s creating a spreadsheet or using a budgeting app.”

    How much of your paycheck should you save? Experts recommend starting with 10 to 20 percent.

    If you’re not able to hit these savings benchmarks right away, don’t sweat it. The key is to save what you can, and you can gradually work to increase your savings over time.

    Define your savings goals to gain momentum

    To help you get in a groove saving money at your first job, define exactly what you’re saving for. Need some ideas?

    When learning how to manage your first salary, Liu recommends prioritizing an emergency fund. A top reason you need an emergency fund is the stability and peace of mind that this stockpile can offer, Dixon says. Should you face an unexpected expense like a costly car repair or lose your job in the future, you’ll then have a backup fund to dip into.

    “If you’re young and single, you should try to strive to save six months of living expenses in your emergency fund as a guideline, but that can be different for every individual depending on where they live and family situations,” Dixon says.

    Consider your emergency fund one of multiple savings accounts, or buckets. “You want to have all of these different buckets of money set aside for different goals, and move and prioritize how much money you save for each goal based on their priority level to you and what is realistic within your budget,” Liu says.

    As you learn how to manage your first salary, don't forget to build up an emergency fund.

    In addition to your emergency fund bucket for life’s surprises, you can also save money at your first job and contribute to other funds that align with your financial goals, like a car fund to help you buy new wheels or a vacation fund to save up for a getaway.

    However you define your goals, the important thing is that they’re clear to you and that you’re actively saving money at your first job. This positive momentum can guide smart savings habits even once your first day of work is a distant memory.

    Use automation to make saving a habit

    Even with the best savings goals and intentions, it can be easy to get tripped up. Enter automation. By automating your savings, you reduce your chances of overspending or skipping savings altogether.

    There are a couple ways you can use automation to help manage your first salary. You could set up a weekly or a monthly automatic transfer from your checking account to your savings account, Liu suggests. Or, you could ask if your company’s payroll department allows you to split your direct deposit, sending some of each paycheck into your checking account and some into savings.

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    Choose a high-yield savings account

    Another consideration when learning how to manage your first salary is where you’ll keep your hard-earned funds. Many people opt to open a savings account from the same bank where they have their checking account, but Dixon says that’s not always the best approach.

    “You want to look for a high-yield savings account,” she says.

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    By keeping your money in a high-yield savings account, it will earn a higher-than-average interest rate. Remember compound interest? The higher your interest rate, the more your money will be able to grow over time.

    As you do your research to find the right savings account for saving money at your first job, Dixon recommends comparing interest rates from different banks.

    “Typically, online banks offer higher interest rates than traditional brick-and-mortar banks,” Dixon says. “Most online banks don’t have an actual storefront for you to visit so they’re saving overhead costs and are able to pass that interest down to the customer.”

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    In addition to contributing to your savings account, enroll in your employer-sponsored 401(k) plan and take advantage of employer matches if they’re offered.

    – Joy Liu, head trainer at Financial Gym

    In addition to interest rates, pay attention to fees and required minimum balances, says Liu. Fees can eat away at interest earnings, and you may not want to worry about keeping a minimum balance when you’ve just landed your first job and are gradually ramping up your savings.

    Lastly, consider your access to your funds. “Because your savings account is separate from your checking account, consider how long it may take to get your funds,” Dixon says.

    If you’re looking for a high-yield savings account, the Discover Online Savings Account has no minimum balance requirement and no fees1, so you can turn your savings from your first job into something meaningful—without any hassle or stress.

    Keep retirement in mind

    As you manage your first salary, saving for emergencies and other short- and medium-term goals is essential. But you also want to start saving for retirement, even if that seems like ages away. Thanks again to compound interest, time is on your side, Dixon says.

    “When you’re in your 20s, you don’t see the large effect compound interest will have because you are just starting your savings; all you see is the money sitting there,” she says. “But when you get to your 60s, that account’s going to glow because it’s been growing over time.”

    In addition to contributing to your savings account, enroll in your employer-sponsored 401(k) plan and take advantage of employer matches if they’re offered, Liu says. Your 401(k) contributions automatically come out of your paycheck, so you won’t even have time to miss the funds.

    How much you save for retirement depends on your goals and age, but when it comes to benchmarks for 401(k) contributions, many personal finance experts recommend saving 10 to 15 percent of your income, according to the Financial Gym. That said, be careful to not overfill your retirement “bucket” and run the risk of locking away money you may need in the short term for your emergency fund or other priorities.

    Adjust your savings strategy as your career flourishes

    As you advance in your career, you’ll likely see an uptick in your take-home pay. After a bonus, promotion or new job, your first inclination may be to spend more because you’re earning more.

    “You don’t want to create a lifestyle that you can’t keep up or maintain,” Dixon says.

    As your career evolves, the answer to "How much of your paycheck should you save?" will naturally change too.

    While you deserve to celebrate your career wins, determine how you can maintain (or even accelerate) your savings progress as you increase your earning potential.

    If you’re earning more and you’re maintaining a manageable cost of living, Dixon recommends putting extra income toward your 401(k) or another savings goal—like going from renter to homeowner—rather than spending.

    If you keep these tips on how to save money at your first job—and beyond—in mind, you’ll gain financial security and be prepared to hit all or your financial goals.

    Now that you know how to manage your first salary, learn how to negotiate your next one. Here are four tips to successfully negotiate your salary as your career grows.

    Articles may contain information from third-parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third-party or information.

    1 Outgoing wire transfers are subject to a service charge.

    The post How to Manage Your First Salary and Grow Your Savings appeared first on Discover Bank – Banking Topics Blog.

    Source: discover.com

    How to Use Your Debit Card Cash Back to the Fullest

    by Marjorie Lowe

    February 10, 2021

    10:22 pm

    Leave a comment on How to Use Your Debit Card Cash Back to the Fullest

    Apartment Life, Budgeting, Frugal Living

    ATM, Auto, Automatic Transfer, away, Banking, Banking 101, Budget, Budgeting, Cash Back, Children, College, credit, credit card, credit cards, date night, Debit Card, debt, Emergency Fund, Family, Fees, Financial Goals, Financial Wize, FinancialWize, Frugal Living, fun, Grow, holidays, How To, Kids & Money, Life, Loans, money, Money Management, money market, money market accounts, Mortgage, Online Checking Account, Online Savings Account, Paying Down Debt, Quick Tips, Relationships, Rewards Checking Account, Saving, savings, Savings Account, Spending, student, Student Loans, things to do, Video, will

    What if you could pay for your next date night or trip to the grocery store—without having to dip into your budget? If you use cash back to your advantage, these benefits could become a reality.

    In the past, you had to swipe a credit card to earn cash back. But with Discover Cashback Debit, you can earn cash back by spending with your debit card (you read that right: debit card), allowing you to reach your financial goals without the risk of going into debt.

    To best use this budget bonus, you might be wondering, “What should I do with my debit card cash back?” According to Eric Rosenberg, financial consultant and founder of the website Personal Profitability, “You could put [your cash back] into savings or treat yourself to something from your wish list.”

    Read on for things to do with cash back to help you achieve the right balance of responsibility and fun:

    1. Save for a rainy day

    Sometimes it seems like everything goes wrong all at once: You get a flat tire. The sink starts leaking (ugh, again!). You get a parking ticket. Since life can throw unexpected, costly curveballs your way, it’s important to have an emergency fund. Also known as a rainy day fund, an emergency fund is cash that’s set aside to cover unplanned, yet crucial, expenses.

    If you're not sure how to use your debit card cash back, consider adding it to your rainy day fund.

    “So many people can’t afford the cost of an emergency from their savings,” Rosenberg says. If you don’t have this type of fund to fall back on, starting an emergency fund (or adding to an existing fund) could be a top priority when evaluating what to do with your cash back from a debit card.

    When thinking about building an emergency fund as a thing to do with cash back, note that experts typically recommend putting aside at least three to six months of living expenses for this purpose. To maximize your emergency fund, you may want to consider moving these savings (and the cash back you’re putting toward this fund) to a high-yield savings account. That way, your emergency fund can steadily grow with interest until you need it. (P.S. More to come on how to automatically move your cash back into savings.)

    2. Pay down your debt

    If you owe, it can be tough to climb your way out of debt. Whether it’s from credit cards, student loans or a mortgage, interest is accruing and costing you money. Learning how to use your debit card cash back to offset debt can help you save on those interest payments down the road.

    Learning how to use your debit card cash back to offset debt can help you in the long run.

    According to consumer money-saving expert Andrea Woroch, when you’re focusing on paying off debt, “It’s natural to cut back where you can. But you may eventually hit a wall where you can’t find ways to tackle expenses any further,” she says. That’s where learning how to use debit card cash back comes into play. Since a debit card with a cash back feature can allow you to earn for your everyday spending, those earnings can become a new source for paying down debt, Woroch adds.

    3. Shore up for those special moments

    You know you’d like to have more nights out, but they don’t come cheap. What to do with your cash back could include spending on special outings, Woroch says. Is there a restaurant you and your significant other have been dying to try? Is there a concert the whole family is super eager to see? There may also be larger events with family and friends to think about—planning a milestone birthday or anniversary or that getaway with college buds. You can set aside your debit card cash back and earmark it for your relationships to create memories that will last a lifetime.

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    “You could put [your cash back] into savings or treat yourself to something from your wish list.”

    – Eric Rosenberg, financial consultant and founder of Personal Profitability

    4. Support your children’s allowance

    If you have kids, you’ve probably heard this one before: “Mom, Dad, can I have some money?” Sometimes it can feel like you’re a walking ATM. One thing to do with cash back is to set aside an allowance for your kids. You can then use this cash to teach your children good savings habits and how to manage money on a monthly basis for the things they need and want, says Rosenberg of Personal Profitability. The best part: The money isn’t really coming out of your budget since you’re earning it for your everyday expenses and from money you’d be spending anyways. Win-win.

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    5. Stockpile funds for the holidays

    In thinking about what to do with your cash back, spending it on gift-giving and holiday expenses may be a good goal. “Some people go into debt during the holidays. To help avoid that circumstance, use your cash back to get ahead,” Woroch says.

    And, really do think ahead if holiday spending is on your list of things to do with your cash back. The earlier you stash your cash back away for the holidays, the longer it will have time to accrue if you put it in a savings account for safekeeping. Season’s greetings may be the last thing on your mind while you’re flipping burgers on the 4th, but planning ahead could really impact your end-of-year festive spending.

    How to maximize your cash back

    Now that you know what to do with your cash back—whether it’s going to work for your emergency fund or funding emergency holiday gifts—consider steps you can take to get the most out of your extra dough. For example, find a rewards program that matches your spending style. With Discover Cashback Debit, you can earn 1% cash back on up to $3,000 in debit card purchases each month.1 That’s up to $360 a year. Not too bad for just going about your daily debit card spending.

    Get 1% cashback on Debit from Discover. 1% cashback on up to $3000 in debit card purchases every month. Limitations apply. Excludes Money market accounts.Discover Bank,Member FDIC.Learn More

    To make the process of saving that extra cash even easier, consider opening a Discover Online Savings Account. If you sign up for Auto Redemption to Savings, your cash back will be automatically deposited into your savings account every month.

    “The hardest part about saving for many people is remembering to make a transfer or take the cash to the bank,” Rosenberg says. “If you can automate it, you are setting yourself up for success. It’s like saving while you sleep.”

    If you’re still considering how to use your debit card cash back to the fullest, Woroch suggests paying for group purchases when you’re out with family or friends. “Whether you’re going to dinner or renting a condo, cover the entire expense on your card and ask friends and family to pay you back with cash or [via mobile payment],” Woroch says. “This way you can benefit from earning more rewards.”

    When it comes to how to use your debit card cash back, the key is to make sure you have enough in your account and aren’t spending too much if you offer to temporarily foot the bill. You don’t want to overextend in order to earn, as you could be hit with overdraft fees or not have enough in your account to cover bill payments, Woroch says.

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    “Whether you’re going to dinner or renting a condo, cover the entire expense on your card and ask friends and family to pay you back with cash or [via mobile payment]. This way you can benefit from earning more rewards.”

    – Andrea Woroch, consumer money-saving expert

    Get ahead with a combination of strategies

    If you’re looking for things to do with cash back, using these tactics can help you improve your financial foundation and have some fun along the way. Understand your needs and goals to help you create a cash back plan, and then maximize your strategy with tools to help you automatically direct your cash back to savings to limit the temptation to spend the money elsewhere.

    “We are all so busy these days, and managing money is often pushed down on the to-do list,” Woroch says. Learning how to use your debit card cash back can help you put money management front and center. Start earning!

    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.

    The post How to Use Your Debit Card Cash Back to the Fullest appeared first on Discover Bank – Banking Topics Blog.

    Source: discover.com

    A Step-by-Step Guide to Prepare Your Budget for a Layoff

    by Marjorie Lowe

    January 29, 2021

    12:01 am

    Leave a comment on A Step-by-Step Guide to Prepare Your Budget for a Layoff

    Budgeting, Credit Cards

    Automatic Transfer, Banking, Budget, Budgeting, Budgeting Basics, Career, Career & Education, Career Tips, debt, Direct Deposit, Emergency Fund, Enhancing Your Budget, Extra Money, Financial Plan, Financial Wize, FinancialWize, financing, fun, go back to school, Health Insurance, Home, How To, Insurance, keep, monthly bills, Online Savings Account, rate, Retirement, Salary, Saving, savings, Savings Account, Savings Strategies, School, security, side hustle, side jobs, Spending, Work Life

    What would you do if you were laid off from your job today? This question isn’t meant to make you want to hide under your desk, but to encourage you to evaluate your circumstances. What would happen to your financial situation if you suddenly didn’t have an income to rely on?

    While it’s not exactly fun to plan ahead for life’s hardships—say, your car breaking down or losing a job—doing so can help you stay afloat financially and avoid taking on debt to remedy an already tense situation.

    What can you do to prepare your budget for a layoff? These four steps will help you prepare your budget for a layoff and survive a layoff financially:

    1. Put some of your paycheck into savings

    In order to prepare your budget for a layoff, one of the best things you can do is learn to live on less when you have your typical paychecks coming in. Living paycheck to paycheck is a reality for many, and a habit many promise to break once they earn more. If you can afford it, consider trying to live off only a portion of your paycheck. That way, you can always depend on having extra money to fall back on in the event of a hardship, like a layoff.

    One way to save for an unexpected job loss is to put some of every paycheck into your savings account.

    Jill Caponera, a consumer savings expert at coupon platform Promocodes.com, suggests paying yourself first—putting some of each paycheck into savings before you spend any of it—in order to save for an unexpected job loss.

    “Put money directly into your savings account the moment you get paid so that you’re never in a position where you’re strapped during a true financial emergency,” Caponera says. Try scheduling an automatic recurring transfer from checking to savings that hits after each payday, or create a direct deposit to savings from each paycheck through your employer.

    If living on less isn’t feasible for you right now, start small and focus on taking baby steps to prepare your budget for a layoff. You could start with a money savings challenge and a more attainable goal, like living off of 97 percent of your paycheck and saving the remaining 3 percent. This means that if your take-home pay is $4,000 a month, your goal is to put 3 percent, or $120, into savings monthly and then limit your bills and spending to $3,880. As you get accustomed to that amount, gradually increase the percentage of your paycheck you save each period. Some budgeting experts suggest saving at least 20 percent of your income and living off of the other 80 percent.

    If you devote even a small percentage of your paycheck to savings before the bills and discretionary expenses roll in, saving will eventually become habit. You’ll get used to budgeting only with your post-savings take-home pay, and you won’t miss the savings portion of your paycheck.

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    “Put money directly into your savings account the moment you get paid so that you’re never in a position where you’re strapped during a true financial emergency.”

    – Jill Caponera, consumer savings expert at Promocodes.com

    2. Save 3 to 6 months of expenses in an emergency fund

    Once you’ve gotten used to regularly saving a portion of your income, you can save for an unexpected job loss by building up a solid emergency fund over time—especially if you are using an online savings account with a high interest rate. An emergency fund is a dedicated savings account that you only touch in the event of financial hardship, such as a medical emergency or job loss.

    Sunny skies are the right time to save for a rainy day.

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    Christian Stewart, founder of financial coaching site Do Better Financial, recommends having an emergency fund of three to six months of expenses to help you survive a layoff financially.

    “The goal is to make sure all your bases are covered, meaning you can pay the bills and proceed with a relatively normal life until you find another job,” Stewart says. She notes the actual amount of money you need to save for an unexpected job loss will vary based on your lifestyle, employment industry and willingness to relocate, since this can dictate how long it could take to find another job.

    To build an emergency fund and save for an unexpected job loss, Stewart recommends starting a zero-based budget. This form of budgeting gives every dollar you earn a job, such as paying a bill, funding your emergency account or financing fun and discretionary expenses. In addition to making your emergency fund a priority, this budgeting strategy helps you identify exactly how much you spend within each budget category each month. You can then find areas of careless spending—perhaps an unused subscription service—where you could stand to cut back. You could redistribute those dollars to your emergency fund.

    Having an emergency fund in place can help you survive a layoff financially.

    “In the event of a layoff, you will have a clear line of sight to regular areas of your spending that can be cut if it takes longer to find a new job,” Stewart says.

    After you’re comfortable with the size of your emergency fund and feel like you can survive a layoff financially, you can use any extra savings for a different financial goal, such as saving for retirement or a down payment on a car or home.

    3. Find income from a side hustle

    Another way to survive a layoff financially is to have a side gig in place. Contrary to what some believe, side hustles do not have to take up an onerous amount of your time. There are actually many side hustles you can do while working full time, such as freelancing in your current field, driving for a rideshare app or tutoring.

    .post__breaker–7037 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/01/A-Step-by-Step-Guide-to-Prepare-Your-Budget-for-a-Layoff_4-FULL-450×200.jpg);}@media (min-width: 450px) { .post__breaker–7037 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/01/A-Step-by-Step-Guide-to-Prepare-Your-Budget-for-a-Layoff_4-FULL-730×215.jpg);} }@media (min-width: 730px) { .post__breaker–7037 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/01/A-Step-by-Step-Guide-to-Prepare-Your-Budget-for-a-Layoff_4-FULL-992×400.jpg);} }@media (min-width: 992px) { .post__breaker–7037 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/01/A-Step-by-Step-Guide-to-Prepare-Your-Budget-for-a-Layoff_4-FULL-1200×400.jpg);} }@media (min-width: 1200px) { .post__breaker–7037 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/01/A-Step-by-Step-Guide-to-Prepare-Your-Budget-for-a-Layoff_4-FULL-1600×400.jpg);} }

    Not only do side jobs create extra cash flow to devote toward savings or debt repayment when you have a full-time job, they also give you an added layer of security to help you save for an unexpected job loss. You might not be able to replace your full-time earnings with your music lesson business, but it can provide you with some predictable cash flow while you interview for a new position.

    You could even turn your side hustle into a full-time job if you have a passion project you’ve been wanting to turn into a career. Alternatively, your side hustle turned full-time gig could help maintain your income stream if you plan to take additional time off after a layoff—if you decide to go back to school or make a move to a new industry, for example.

    4. Know where to turn for assistance

    Being laid off can be a traumatic experience, and if it does happen, it is important to know where to turn and how to make decisions that aren’t rooted in fear or emotion.

    “Sit down with a level-headed friend, spouse and/or counselor to process your new financial reality,” Stewart of Do Better Financial says. “If you’re receiving a compensation package, do yourself a favor and work out beforehand where the money will be spent and how long you need it to last.”

    Speaking of work benefits, make sure you utilize all of the benefits possible before your layoff goes into full effect, such as getting an annual physical through your health insurance plan.

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    “Sit down with a level-headed friend, spouse and/or counselor to process your new financial reality. If you’re receiving a compensation package, do yourself a favor and work out beforehand where the money will be spent and how long you need it to last.”

    – Christian Stewart, founder of Do Better Financial

    “If you’ve been laid off, or are expecting an upcoming layoff, you should immediately contact your state’s unemployment office to set up your account and start receiving your compensation,” consumer savings expert Caponera says. “While these benefits won’t pay as much as your full-time salary, these funds will certainly help to cover your monthly bills and living expenses while you continue to look for work.”

    Each state has different benefits and paperwork requirements, so make sure you’re using your state’s government website to learn more and to survive a layoff financially.

    Prepare your budget for a layoff

    Facing a layoff can be emotionally and financially draining, especially if you don’t see it coming. The most important thing is to start planning ahead, and prepare your budget for a layoff before it happens.

    The post A Step-by-Step Guide to Prepare Your Budget for a Layoff appeared first on Discover Bank – Banking Topics Blog.

    Source: discover.com

    How to Set Financial Goals—and Crush Them

    by Marjorie Lowe

    January 28, 2021

    11:07 pm

    Leave a comment on How to Set Financial Goals—and Crush Them

    Budgeting, Credit 101

    Automatic Transfer, away, Banking, Budget, Budgeting, Budgeting Basics, College, debt, Direct Deposit, Essentials, Financial Goals, Financial Independence, Financial Wize, FinancialWize, Getting Started, How To, IRA, keep, Managing Your Money, Online Bill Pay, Online Checking Account, Online Savings Account, Quick Tips, Retirement, Saving, savings, savings accounts, Savings Strategies, Shopping, Spending, Starting Out, Video

    Maybe you want to lose those stubborn 10 pounds, score a big promotion or run your first marathon. Whatever your priority, it all starts with setting a goal.

    Financial priorities are no different. Whether you want to save for your child’s college education or get yourself out of debt, budgeting to help reach your financial goals allows you to determine what’s most important to you, make a plan to attain those goals and hold yourself accountable for success.

    Still, when it comes to managing your money, knowing how to set financial goals and sticking to them can feel like opposite sides of the same coin. You might even find yourself asking, “How do I create a simple budget to reach my financial goals?” If you follow these three steps, you could be crossing the finish line in record time:

    1. Pick a day to get started

    Sometimes the hardest part of tackling a new project is simply getting started, especially if your to-do list feels like it’s never ending. There’s always tomorrow, or the day after that… right? To create a simple budget to help you reach your financial goals, pick a day and time to get started. Consider picking a time when you do your best thinking, are most focused and least likely to get interrupted. Maybe it’s Sunday morning over breakfast and coffee before kicking off a day of chores or on a weeknight after the kids go to bed.

    Once you’ve landed on the best time to sit down and create a simple budget, add it to the calendar and schedule reminders on your computer or phone to hold yourself accountable.

    When you're budgeting to help reach your financial goals, it's important to schedule time to get started.

    2. Create a simple budget, however complex your finances

    Chances are your finances are pretty complicated, with lots of moving parts. Things seem to be moving along nicely with your regular expenses like rent, groceries, transportation and entertainment… and then your carburetor goes kaput in your car and you must replace it right away. Or that toothache has become unbearable and requires a root canal—and you’ll have to cover some of the expense out of pocket. Just when you’re finally making a dent in paying down your debt and getting your finances on track, life throws you some curveballs. But that doesn’t mean you can’t create a simple budget.

    One of the easiest ways to create a simple budget and stay on track is to follow the 50-20-30 rule:

    • 50 percent of your income should address your needs, such as housing, utilities, healthcare and transportation;
    • 20 percent should be put toward your financial goals, like building your savings and paying off debt;
    • 30 percent should cover your wants or discretionary expenses, like shopping, entertainment and dining out.

    When you create a simple budget using the 50-20-30 rule, you can still do the things you enjoy while you save for your goals.

    Managing your finances with the 50-20-30 is a good first step when you’re first learning how to create a budget, but trying to deal with multiple financial goals within that 20 percent bucket can be overwhelming. When it comes to budgeting to help reach your financial goals, certified financial planner Jim White suggests taking your financial goals one step at a time.

    “Make a simple plan to tackle debt—or maybe just one debt—then when that goal is accomplished, work on a simple plan for the next debt,” White suggests. “A bunch of small victories goes a long way to changing your financial discipline and gives you a boost to keep moving forward,” White adds.

    Similar to how you picked a day to begin the budgeting process, make a habit out of managing your finances by picking one day of the week and checking in with yourself at a scheduled time. After about two months, budgeting to help reach your financial goals can become habit forming. “When you focus on your goals on the same day every week, you are creating a habit, and a pattern, to follow,” says Karen Ford, financial coach and motivational speaker.

    Budgeting to help reach your financial goals becomes even more effective when you’re reviewing your priorities every seven days and making adjustments to your spending and saving as needed.

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    “Make a simple plan to tackle debt—or maybe just one debt—then when that goal is accomplished, work on a simple plan for the next debt. A bunch of small victories goes a long way to changing your financial discipline and gives you a boost to keep moving forward.”

    – Jim White, Certified Financial Planner

    3. Automate your financial plan

    Now that you know how to set financial goals—whether it’s paying down debt, saving up for a car or putting money away for retirement—what’s next? Time to get moving! One way to do that is to automate your finances. By setting up automatic bill pay and account transfers, it will be easier to stick to your plan for paying monthly expenses and contributing to savings.

    When it comes to paying your bills and learning how to set financial goals, consider automating the bills that you pay regularly, especially those that fall within the 50 percent budget category that covers your living essentials. To gain momentum with your savings progress, set up automatic transfers from your checking account to your savings account for the amount you wish to save each month. If your financial goal is retirement, you could even set up automatic transfers to an individual retirement account (IRA) so you’re consistently making progress. You could also arrange to have a portion of your paycheck automatically go into savings—before you even have time to miss it.

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    By making automatic contributions to your savings accounts, you are “subscribing to the idea of paying yourself first,” says Riley Adams, CPA and blogger for Young and the Invested, a professional’s guide to financial independence. “By doing this, it removes the temptation to spend and takes any lack of discipline out of the picture,” Adams says.

    Keep in mind that any time you automate your finances as part of creating a simple budget, you should monitor your accounts regularly. Check in to make sure your automated settings are up to date, that you always have the funds available in your accounts to cover your expenses and transfers and that your savings are growing according to your plan.

    How to set financial goals in 3 steps

    Once you find time to focus on your finances, create a simple budget and automate your payments and transfers, budgeting to help reach your financial goals is one habit that is sure to stick. By following these three rules and keeping yourself on track, you’ll be ready to build a solid foundation for your financial future.

    The post How to Set Financial Goals—and Crush Them appeared first on Discover Bank – Banking Topics Blog.

    Source: discover.com

    Banking for Busy Parents: 4 Essential Checking Account Features

    by Marjorie Lowe

    January 12, 2021

    4:16 am

    Leave a comment on Banking for Busy Parents: 4 Essential Checking Account Features

    Budgeting, Family Finance, First Time Home Buyers

    ATM, Auto, Automatic Transfer, Banking, Banking 101, Blog, Budget, Budgeting, Buy, Cash Back, Checking Account, College, Convenience, Debit Card, debt, Family, Family Finance, Fees, Finance, Financial Wize, FinancialWize, Managing Your Money, millennial, Mobile App, Mobile Banking, Mobile Check Deposit, News, Online Banking, Online Bill Pay, Online Checking Account, Opening an Account, Personal Finance, Raising a Family, Rewards Checking Account, savings, security, Spending

    It’s a nonstop day. The usual. You’re at the grocery store, grabbing a few things for dinner (note to self: hit the ATM on the way out!), then a much-needed coffee at the drive-through (swipe that debit card), before you drop your tween at her first day of basketball practice (remember to bring your checkbook). Phew. And you’re only halfway done.

    In the middle of it all, you certainly don’t want the nagging feeling that you can’t access your money at a moment’s notice, that you’re missing spending perks or that you’ll be hit with unnecessary fees. So a good question for you might be, “What’s the best checking account for busy families?”

    How about a checking account that matches your lifestyle? Robert Farrington, founder of millennial personal finance site The College Investor and father of two, suggests that banking for busy parents should include an account that is “conducive to an on-the-move life.”

    With everything on your plate, you may not realize that as your family’s needs change, the way you manage your money will likely need to change too. The good news is that many financial institutions offer bank accounts for busy families like yours, designed with features aimed at supporting your active lifestyle.

    The best checking account for busy families like yours should offer features that support your busy lifestyle.

    To select the checking account that best serves your needs, Farrington recommends first examining your current patterns. “Notice how you deposit money and how you spend it,” Farrington says. “Look at your banking trends and see where you’re being charged.”

    Next, identify the unique features offered by each new checking account you are considering. To help you do that, here are four key things to look for as you narrow down your search:

    1. Cash back rewards: More bang for your buck

    According to the U.S. Department of Agriculture, it costs about $12,980 a year to raise a child. Even if your kids get their share of hand-me-downs and you don’t buy them everything they want, you’re still spending a lot. The biggest costs—after housing (29 percent of child-rearing costs)—are food (18 percent) and child care/education (16 percent). None of that even includes birthdays, holidays and so on…

    If you’re trying to find the best checking account for busy families, consider that all those purchases could be a little less painful with a checking account that rewards spending, typically in the form of cash back or rewards points.

    Ashley Patrick, founder of the blog Budgets Made Easy, loves the idea of a checking account that offers rewards. Patrick, whose blog tells the story of how she paid off $45,000 of debt in 17 months, recommends that budget-conscious families use debit cards for purchases. “If those purchases were rewarded,” Patrick says, “that money would multiply.”

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    If you’re using a checking account that rewards you for debit card purchases, some of those seemingly endless expenses can actually help you save a bit of extra cash. Discover Cashback Debit, for example, lets you earn 1% cash back on up to $3,000 in debit card purchases each month.1 That means your monthly cash back earnings could yield $360 in total rewards each year. This feature of a bank account for busy families could pay for one night at your favorite family resort!

    2. Easy account access: At home or on the run

    You’re dropping off one kid, picking up the other, then have to get ready for a fundraiser. You are always on the go, so it’s time to find the best checking account for busy families that’s always right there with you. Patrick suggests opening a checking account with a bank that has a vast network of no-fee ATM locations. For example, Discover offers more than 60,000 no-fee ATMs around the U.S.

    Look for easy access to your funds when searching for the right bank account for busy families.

    “I live out in the country, about 12 to 13 miles from town, so I need an ATM nearby,” Patrick says. “I usually go to town on Fridays or Mondays, get lunch for the kids, go to the store for groceries and get cash. Everything needs to be in one location.”

    Besides getting money for day-to-day purchases, a conveniently located ATM is a must for depositing cash. Why make a special trip to visit your local branch when you can make deposits at an ATM that’s at or near a place you already frequent? Banking for busy parents is hard to imagine without this benefit.

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    “Notice how you deposit money and how you spend it. Look at your banking trends and see where you’re being charged.”

    – Robert Farrington, founder of The College Investor and father of two

    3. Online and mobile features: Save time in spades

    In fact, you may not need a brick-and-mortar bank branch at all. Another option to consider is opening a checking account with an online bank.

    The best bank account for busy families is one that offers maximum convenience. With an online checking account, all you need is a computer, tablet or smartphone to deposit a check (most online banks have a mobile app that allows you to take a photo of your check to deposit the funds). An online checking account also makes banking for busy parents effortless by allowing them to manage bills and bank statements from a device—either while at home or out and about. Save the paper for your kids’ cute drawings that you tack up on the fridge.

    Mobile and online features are important when looking for the right banking for busy parents.

    Nermeen Ghneim, blogger at Savvy Dollar and mom of two, says the best checking account for busy families would offer a mobile app.

    “I want to be able to access everything a bank can offer through my mobile device,” Ghneim says. “It saves time, and it’s huge for a parent with a full-time job.”

    Here are some of the other online and mobile features that are key if you’re looking for the best checking account for busy families:

    • Online transfers. Farrington says the ability to transfer money between accounts is especially important. Things come up unexpectedly and you may need to quickly transfer from savings to checking, or move those cash back rewards into a college fund for the kids. If you’re moving your cash back rewards into savings, you may even be able to make that happen automatically. For example, when you enroll in Discover’s Auto Redemption to Savings, we’ll automatically deposit your cash back into a Discover Online Savings Account every month.
    • Online bill payments. With everything else on your mind, you shouldn’t have to go through a stack of bills every month. The best checking account for busy families would allow you to set up automatic bill payments, so each month’s charges are automatically debited from your checking account.
    • Balance notifications. You should never be in the middle of a transaction and see those dreaded words: Insufficient Funds. Instead, you want to get a heads-up when your balance is close to zero, so there aren’t any surprises.
    • Debit card protection. While it’s important to be able to quickly and easily use your debit card, Ghneim says it’s just as important to be able to freeze it. Some banks offer a digital feature that enables you to switch your debit card on and off, so you can instantly freeze your debit card if it’s been misplaced or you want to curb spending.
    • Connecting to other digital applications. Nowadays, busy families rely on budgeting and spending apps to help manage their finances. A good bank account for busy families would be able to easily sync with those other tools online or via your mobile device so that you can efficiently manage your money and take advantage of the features of each app.

    .post__breaker–8237 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/10/Banking-for-Busy-Parents-4-Essential-Checking-Account-Features-5-FULL-450×200.jpg);}@media (min-width: 450px) { .post__breaker–8237 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/10/Banking-for-Busy-Parents-4-Essential-Checking-Account-Features-5-FULL-730×215.jpg);} }@media (min-width: 730px) { .post__breaker–8237 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/10/Banking-for-Busy-Parents-4-Essential-Checking-Account-Features-5-FULL-992×400.jpg);} }@media (min-width: 992px) { .post__breaker–8237 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/10/Banking-for-Busy-Parents-4-Essential-Checking-Account-Features-5-FULL-1200×400.jpg);} }@media (min-width: 1200px) { .post__breaker–8237 { background-image: url(https://865cd2fc18498405a75a-f8cbe8cb758c89f0cd738fe08520ecb9.ssl.cf5.rackcdn.com/online-banking/banking-topics/wp-content/uploads/2019/10/Banking-for-Busy-Parents-4-Essential-Checking-Account-Features-5-FULL-1600×400.jpg);} }

    4. No-fee checking: A money-saving must-have

    Farrington says that when selecting the best bank account for busy families, a no-fee checking account is a must-have, so it’s worth shopping around until you find one. For example, Discover Cashback Debit has no account-related fees.2 “You shouldn’t have to pay a fee if you don’t keep a minimum balance,” Farrington says. “Parents often don’t have the bandwidth to keep track of whether they’ve made a certain number of transactions.”

    If you are getting hit with a checking account fee for any of the items below, you may want to consider a new checking account to make banking for busy parents easier:

    • Monthly maintenance
    • In-network ATM withdrawals
    • Replacement debit card
    • Standard checks
    • Online bill pay
    • Insufficient funds
    • Stop payment order
    • Official bank check

    If you’re exploring a new bank account for busy families, Ghneim advises to watch out for hidden costs. Even no-fee checking accounts will sometimes hit you with unexpected charges. “There should be no hidden fees because if a family is living off a budget, it’s very stressful to incur unexpected fees,” Ghneim says. Farrington agrees: “There are some things that might cost you money, like wire transfers, but you shouldn’t have to pay for most features these days.”

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    “There should be no hidden fees because if a family is living off a budget, it’s very stressful to incur unexpected fees.”

    – Nermeen Ghneim, blogger at Savvy Dollar and mom of two

    Banking for busy parents just got easier

    Above all, Farrington says you want to prioritize the features that are most relevant to your family’s needs and lifestyle. If you’re always on the go, you may care most about convenient, no-fee ATMs and mobile check deposits. If your schedule necessitates a lot of out-of-pocket spending, you may want to prioritize debit card cash back rewards.

    Keep in mind that when it comes to establishing the best banking for busy parents, you have options. “There are so many checking accounts being offered now,” Farrington says. As long as you’re aware of the features that are available, you can make an informed decision and choose the account that’s best for you and your family.

    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™, which 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.

    2 Outgoing wire transfers are subject to a service charge. You may be charged a fee by a non-Discover ATM if it is not part of the 60,000+ ATMs in our no-fee network.

    The post Banking for Busy Parents: 4 Essential Checking Account Features appeared first on Discover Bank – Banking Topics Blog.

    Source: discover.com

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