7 Money Lies We Tell Ourselves

Do you think you’re telling yourself the truth about money? We may think we know the facts about our finances. But our beliefs can often overshadow the facts.

Our wishes, hopes and fears can tip the scales away from the truth. This makes it easier for us to believe what we want to about money — and it can happen without us even realizing it.

The “money lies” we tell ourselves can change the way we think and act when it comes to finances. And since most of us rarely talk about money with our friends and family, the money lies we tell ourselves stick around. That can lock us into destructive beliefs and reinforce poor financial habits.

But no matter what money lies we tell ourselves, it’s never too late to set the record straight. Let’s look at some of the most common money lies we all buy into at some point — and the truth behind them.

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1. I’ll be happier when I have $_____.

Bundles of money stick out of a bucket.Bundles of money stick out of a bucket.

“With $___ in the bank (whatever amount you think is ideal), many of my problems would go away, and I’d be happier.”

Does this sound familiar?

Goals and target numbers for earnings, savings and budgets are great. But if you make the mistake of thinking some magic number will flip a happiness switch for you, think again.

When we tell ourselves this money lie, we put too much emotion into a single number. And we may be setting ourselves up for disappointment — both if we never get $__, and if we do get $__ and realize it doesn’t make us as happy as we thought it should.

The good news? Studies show that making progress toward our goals can be incredibly satisfying, regardless of whether we hit the target.

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2. I deserve it, regardless of whether I can afford it.

A woman holds many shopping bags and looks miffed.A woman holds many shopping bags and looks miffed.

“I work hard, and I don’t treat myself often.”

“I could kick the bucket tomorrow (YOLO).”

“I’m getting a great deal!”

These are just some of the rationalizations we use to convince ourselves that it’s OK to buy something.

Whatever legs this money lie stands on, it’s usually used to soothe the sting of expensive purchases — those that aren’t really essential — and perhaps items we know, deep down, we don’t really need.

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3. I have strong financial willpower.

A woman chooses between an apple and a huge hamburger.A woman chooses between an apple and a huge hamburger.

When faced with temptation, most of us lie to ourselves that we’re great at resisting it. But, when was the last time you chose not to buy something you really wanted? When was the last time you made an impulse buy?

The average American spends at least a couple of hundred dollars a month on impulse purchases.

And we’re more likely to buy on impulse and spend more when we’re stressed. That’s probably why impulse spending shot up about 18% in 2020.

Plus, those of us who are shopping with credit cards are probably spending more on the regular basis than we realize. The average credit card shopper spends about 10% more with their cards than they would with cash. And that’s not even counting the cost of interest if the balance isn’t paid in full.

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4. I’ll save more later.

A piggy bank with a sad face lies on its side.A piggy bank with a sad face lies on its side.

Most folks focus on buying what we need and want now, and we tell ourselves we’ll start saving for the future later. If we save anything at all, it’s likely to be whatever we have left over. In fact, fewer than 1 in 6 of us are saving more than 15% of our income, and 1 in 5 aren’t saving any money.

No matter the reason, when we tell ourselves this money lie and put off saving, we’re prioritizing the present over the future.

That can catch up with us on a “rainy day” or whenever we do start thinking seriously about retiring. By that time, there can be a lot of heavy lifting to play “catch up” with our savings — or it may even be too late.

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5. I have plenty of time to plan for my financial future (& I don’t need to think about it yet).

A drawing of a clock in the sand of a beach is washed away by waves.A drawing of a clock in the sand of a beach is washed away by waves.

The future can seem really far away when we’re looking 10, 20 or even more years out. When we feel like we have a lot of room between now and then, it’s easy to make excuses to not plan or save for it.

This money lie is an excuse for procrastination. It’s the rationale we use when we have a hard time managing our negative feelings or uncertainties about our financial futures. And it makes us turn a blind eye to the years of interest that we lose out on when we don’t plan.

Benjamin Franklin may have spoken best about the truth behind this money lie when he wisely said, “by failing to prepare, you are preparing to fail.”

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6. There is good and bad debt.

A piggy bank with slips of IOUs sticking out.A piggy bank with slips of IOUs sticking out.

We tend to assign moral value to debt, thinking of mortgages and student loans as “good” debt, and considering credit card debt as “bad.”

This money lie gets us to think the wrong way about debt. All debt comes with some cost, and it’s critical to understand how every loan affects our current and future selves.

Instead of focusing on whether debt is “good” or “bad,” concentrate on the total cost of the interest over time (it’s often higher than you think) and on deciding whether the loan is really helping you achieve your goals.

About half of us seem to already be on track with that thinking, saying that we expect to be out of debt within one to five years.

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7. Wanting more is bad.

Ladders lead up into the clouds.Ladders lead up into the clouds.

While I think we can all agree that obsessive greed is wrong, it’s not a bad thing to want more for you and your loved ones.

When we tell ourselves we shouldn’t want more than we have, we agree to settle for less. And we may be tricking ourselves into thinking it’s OK that we’re not doing something (or enough) to improve our financial situation.

This money lie holds us back and can make it hard to improve our financial behaviors.

When we frame wanting more as a positive motivator, it can be easier to take the chances or do the work needed to get to that next financial level we may want.

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How to Stop Losing Out to Costly Money Lies

Hands holding one-hundred dollar billsHands holding one-hundred dollar bills

How many of these money lies sound like something you’ve told yourself?

At some point, I think we’ve all tricked ourselves with at least one of them. Maybe we were rationalizing a decision, or we were trying to make ourselves feel better about what we wanted to do with our money. And we probably didn’t make the best financial choices as a result.

Here’s the truth: Honesty goes a long way with finances.

What we tell ourselves and what we believe about money influences our financial behaviors. If we’re not telling ourselves the truth, our money lies won’t just drain our wallets. They can affect our financial awareness and inflate our confidence. And they get in the way of maintaining or growing wealth.

When we recognize the money lies that we believe, we can reset our thinking, change our mindset and start taking action. And that sets us up to make better choices and make more progress toward our big financial goals.

P.S.: Sign up for my emails to continue the conversation. My subscribers get my best insights! Just email me at ian.maxwell@revirescowealth.com, and put SUBSCRIBE in the subject field.

This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The content is developed from sources believed to be providing accurate information; no warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability or usefulness of any information. Consult your financial professional before making any investment decision. For illustrative use only.
Investment advisory services offered through Virtue Capital Management, LLC (VCM), a registered investment advisor. VCM and Reviresco Wealth Advisory are independent of each other. For a complete description of investment risks, fees and services, review the Virtue Capital Management firm brochure (ADV Part 2A) which is available from Reviresco Wealth Advisory or by contacting Virtue Capital Management.

Founder & CEO, Reviresco Wealth Advisory

Ian Maxwell is an independent fee-based fiduciary financial adviser and founder and CEO of Reviresco Wealth Advisory. He is passionate about improving quality of life for clients and developing innovative solutions that help people reconsider how to best achieve their financial goals. Maxwell is a graduate of Williams College, a former Officer in the USMC and holds his Series 6, Series 63, Series 65, and CA Life Insurance licenses.Investment Advisory Services offered through Retirement Wealth Advisors, (RWA) a Registered Investment Advisor. Reviresco Wealth Advisory and RWA are not affiliated. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Consult your financial professional before making any investment decision.

Source: kiplinger.com

5 Strategies for Paying Off Car Loan Early

Is your monthly car payment a burden to your budget? Paying off your car loan early can earn you much-needed financial freedom and save you potentially hundreds (or thousands) of dollars in would-be interest. 

You can pay off your car loan early using several effective strategies, but before you do, consider any potential penalties and effects to your credit score.

The True Cost of a Car Loan

It’s no secret that cars are our worst big-ticket investment. Unlike houses, which typically increase in value over time, and education, which theoretically opens the door to higher earning potential, cars lose their value over time. In fact, a new car depreciates in value as soon as you drive it off the lot and will lose 20% to 30% of its value in the first year.

That’s a big deal, especially given the average cost Americans are spending on new cars in 2021. According to KBB, that hard-to-swallow number is over $40,000, up more than 4% over 2020.

That means Americans are shelling out $40,000 for a car that, in a year, will be worth anywhere from $28,000 to $32,000, representing an $8,000 to $12,000 loss.

But there’s more than just the sticker price to consider. In addition to sales tax (average of 10.12% in 2020, though it varies by state), be prepared to pay interest on your car loan. Right now, the average car loan interest rate (also referred to as APR, the annual percentage rate, though there’s a difference) is over 4%.

APR includes the interest rate, in addition to other fees, like loan origination fees or mortgage insurance. You should use the APR, not the flat interest rate, when calculating what you’re paying.

Your APR will depend on the current market and your credit score. The better your credit score, the lower your APR. If you have a weak credit score and can put off buying a car, it is advisable to build up your credit score before applying for a loan.

For 2021, rates are expected to hover between 4% and 5% for 48-month (four-year) and 60-month (five-year) loans. 

Car Loan Calculator: An Example

Interest on a car loan adds up. Let’s take the $40,000 new car as an example, with a $995 dealer fee. Assume you put $2,000 down and have a tax rate of a clean 10% and an APR of 5%. You’ve agreed to pay off the loan over 60 months, or five years. (The typical car loan is anywhere from three to seven years; the shorter the loan period, the higher the monthly payment.)

In this scenario, the total cost of the vehicle after tax and dealer fees is $44,995, minus your $2,000 down payment. That leaves $42,995 to be financed. Given the 5% interest rate over 60 months, your monthly payment would be $811.37.

Over 60 months, you will end up having paid $50,682.20 (including down payment) for a car that, with taxes and dealer fees, cost just $44,995. That means, over five years, you’ve paid $5,687.20 in interest. 

And let’s just ignore the fact that, due to depreciation, that car that you’ve just paid $50,000+ on is now worth just $18,752.41 (average value of 37% of original cost after five years).

Use The Penny Hoarder’s car loan calculator to figure out how much you’ll pay with real-life numbers that match your scenario.

How Car Loan Interest Rates Work

Paying off your car loan early, if you can afford it, seems like a no-brainer then. However, before you start strategizing about how to pay off your car loan ahead of schedule, do some digging to determine what kind of car loan you have.

In an ideal world, your loan will be a simple interest loan. If you have not yet purchased your car, only consider lenders that will offer you a simple interest loan. This means the interest is calculated entirely on the principal balance of the loan.

But if your lender charges precomputed interest, that means they will calculate how much you will pay in interest over the life of the loan and include that in your total balance. That means, even if you pay off your car early, the payoff quote will include all the interest you would have paid had you kept the loan open. In this case, there are absolutely no financial savings in paying your car loan off early.

One other element of your loan to research is payoff penalties. Payoff penalties are legal in 36 states and allow lenders to charge you a penalty (usually a fixed percentage of the remaining balance) for paying off your car loan early. In this case, it may be more expensive than what you would have paid in interest over the life of the car loan.

Will Paying Off Your Car Loan Early Hurt Your Credit Score

It is not likely that paying off a car loan early will hurt your credit score, but it could be keeping you from growing your credit score. Regular, on-time payments account for roughly 35% of your FICO credit score, making it the most important factor. Making monthly payments on a car loan is a great way to show lenders you are responsible with repaying your debts.

In addition, lenders like to see a nice mix of credit (mortgage, car loan and credit cards are the big three). Keeping your car loan open also helps extend the length of your credit history. If you have no other open credit (like a credit card), keeping your car loan open may be advantageous in building up your score if you eventually intend to buy a house.

5 Strategies for Paying Off Your Car Loan Early

If you have a simple interest car loan, your credit is in good standing and your loan doesn’t have any payoff penalties, it may be wise to pay off your car loan ahead of schedule. Not only will you avoid spending heaps of money on interest, but it will also give you the financial freedom of hundreds of dollars back in your monthly budget.

The best advice for paying off a car loan early: treat it like a mortgage. If you are a homeowner, you have likely heard that making an extra (13th) payment toward your mortgage principal every year can shave years off your loan. If you pay even more toward the principal each year, you can easily get your 30-year mortgage down to 15 years—and you’ll be able to drop PMI (private mortgage insurance) costs much earlier.

Of course, home loans tend to be much bigger than vehicle loans, so the potential to save is much larger, but the logic works the same with your car loan.

These strategies for early payoff are all effective, if done right:

1. Make One Large Extra Payment Every Year

If you can count on your grandma slipping a fat check into your Christmas card every year without fail, don’t use that money to splurge on alcoholic eggnog (OK, maybe one bottle). Instead, apply it directly to your car loan as a lump sum.

If you have autopay scheduled online, you can log into your account and simply arrange to make a one-time payment. If you’re old-fashioned and pay by phone or mail, simply call your lender and let them know you’d like to make an extra, one-time payment toward the principal.

Apply this logic to any unbudgeted (aka, not-planned-for) funds, like a bonus at work or a tax refund.

2. Make a Half Payment Every Two Weeks

Talk with your lender to see if you can switch to biweekly payments, instead of monthly. If your lender allows you to pay half of your monthly loan amount every two weeks, you will wind up making 26 half payments. Divide 26 by 2, and you get 13 full months of payments, paid over 12 months. That means, by the end of the year, you will have essentially made an extra car payment.

Just check your budget first to ensure that kind of payment plan is feasible.

3. Round Up

Rounding up to the nearest $50 or even $100, if you can swing it, is a great way to add extra money every month to the principal. For example, if your monthly payment is $337, you could round up to $350 or even $400 to essentially pay an extra $13 or $63 a month. This will wind up knocking a few months off the life of your loan.

If you have autopay scheduled, log onto your loan platform and see if you can add the additional funds toward the principal each month so you don’t even have to think about it.

4. Resist the Urge to Skip a Payment

Some lenders may let you skip one or two payments a year. So kind of them, right? Wrong. They do this knowing it will extend the life of your loan, meaning they will rake in even more of your hard-earned cash in interest fees.

Unless you fall on very hard times, fight the urge to skip a payment. You will wind up paying more in the end if you do.

5. Refinance, but Exercise Caution

If you had a poor credit score when you bought your car and opted for a seven-year loan to keep payments low, it might make sense to refinance. Perhaps you’re two years into the loan, you’ve got a higher-paying job, and your credit score is in great shape. You could potentially refinance at a lower APR and build the loan out over 36 months, saving you two years and lots of money in interest.

But borrower beware: Don’t refinance to get a lower monthly payment by extending a loan, as you will end up just paying more in interest. 

When You Shouldn’t Pay Off Your Car Loan Early

As we’ve seen, it doesn’t always make sense to pay off your car loan early. But there are more reasons to hold your horses than just payoff penalties and precomputed interest.

Here are some other reasons not to pay off your car loan early:

  • Lack of emergency savings. Bankrate reported early in 2021 that most Americans could not afford a $1,000 emergency. Just 39% have enough to cover such an unexpected expense. If you are a part of that 61% without a well-padded emergency fund, prioritize adding funds to a high-yield savings account to protect yourself and your family should the unthinkable happen. And it’s not just your family’s medical emergencies; you may need to cover a deductible on your renter’s insurance in the case of a break-in, the cost of an unexpected car repair or even a terrifying trip to the vet when your dog eats something he shouldn’t.
  • Higher-interest loans. If you have a reasonable interest rate on your car loan but are drowning in credit card debt, focus on the debt that has the highest interest rate. Credit cards historically have interest rates in the high teens, so they make the most sense to pay off first. If you are free of credit card debt but have a mortgage or student loans, compare those interest rates to that of your car loan to figure out which makes the most sense to pay down with extra funds.
  • Lack of credit history. If you refuse to get a credit card and don’t yet have a house, a car loan is your best bet for building your credit score. Keeping your car loan open could positively affect your credit score.
  • Investments. For most drivers, car loan APRs are not terrible. If you have some extra funds and are thinking about paying off your low-interest car loan, consider instead investing in your retirement fund or even buying a few stocks on your own. The average stock market return is about 10%. Obviously, you could wind up losing money, but in general, if you invest and hold, over time, you should expect your money to grow.

Timothy Moore is a managing editor for WDW Magazine, and a freelance writer and editor covering topics on personal finance, travel, careers, education, pet care and automotive. He has worked in the field since 2012 with publications like The Penny Hoarder, Debt.com, Ladders, Glassdoor, Aol and The News Wheel. 

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Source: thepennyhoarder.com

Recessions: 10 Facts You Must Know

It’s official. The Pandemic Recession that began in February 2020 ended in April of last year, according to the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER), which is the arbiter of these things.

Although it was the shortest downturn in U.S. history, the economy is still recovering from the nearly 21 million jobs that were lost during the slump.

And it continues to haunt us in other ways. After all, a recession is the scariest creature in the average investor’s closet of anxieties. There’s little wonder why. People fear recessions because they can mean lower home prices, lower stock prices – and, of course, unemloyment.

Any number of things can cause, or exacerbate, a recession: an exogenous shock, such as the COVID-19 crisis or the Arab oil embargo of 1973; soaring interest rates; or ill-conceived legislation, such as the Smoot-Hawley Tariff Act of 1930.

Recessions are parts of the warp and woof of a dynamic economy, albeit unpleasant ones. And if you’re prepared for the next recession, there will be plenty of opportunities when that downturn ends. Thus, the more you know about recessions, the better. Here are 10 must-know facts about recessions.

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Why Are They Called ‘Recessions’?

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Because calling them “depressions” is too scary. No, really.

After the Great Depression – a term once considered milder than “panic” or “crisis” – the term “depression” for an economic downturn seemed particularly terrifying. Economists began to use the term “recession” instead.

Currently, “depression” is used to mean an extremely sharp and intractable recession, but there is no formal definition of the term in economics. The Pandemic Recession included levels of unemployment not seen since before WWII. And the 2007-09 recession certainly had uncomfortable similarities to the Great Depression, in that it involved a financial crisis, extremely high unemployment, and falling prices for goods and services. Economists now call it the Great Recession.

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What Constitutes an Official Recession?

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Someone has to be the official arbiter of recessions and recoveries, and the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER) is that someone.

Although two quarters of consecutive GDP contraction is the standard shorthand for a recession, the NBER actually uses many indicators to determine the start and end of a recession.

In fact, GDP is not the committee’s favorite indicator: It prefers indicators of domestic production and employment instead. Other signs of recession include declines in real (inflation-adjusted) manufacturing and wholesale-retail trade sales and industrial production. Prolonged declines in production, employment, real income and other indicators also contribute to the NBER’s recession call.

In the case of the Pandemic Recession, NBER says: “The committee has determined that a trough in monthly economic activity occurred in the US economy in April 2020. The previous peak in economic activity occurred in February 2020. The recession lasted two months, which makes it the shortest US recession on record.”

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How Long Do Recessions Typically Last?

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The average length of recessions going all the way back to 1857 is less than 17.5 months. Recessions actually have been shorter and less severe since the days of the Buchanan administration. The long-term average includes the 1873 recession – a kidney stone of a downturn that lasted 65 months. It also includes the Great Depression, which lasted 43 months.

If we look at the period since World War II, recessions have become less harsh, lasting an average of 11.1 months. In part, that’s because bank failures no longer mean that you lose your life savings, thanks to the Federal Deposit Insurance Corporation, and because the Federal Reserve has gotten (somewhat) better at managing the country’s money supply.

The longest post-WWII recession was the Great Recession, which began December 2007 and ended in June 2009, a total of 18 months. Conversely, the two-month Pandemic Recession helped nudge the average length of recession down a notch. 

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How Often Do Recessions Happen?

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Again, since 1857, a recession has occurred, on average, about every three-and-a-quarter years. It used to be the government felt that letting recessions burn themselves out was the best solution for everyone concerned.

Since World War II, we’ve gone an average of 58.4 months between recessions, or nearly five years. The last economic expansion, starting at the end of the Great Recession, lasted 128 months. By that measure, we were overdue for an economic retraction when the Pandemic Recession hit.

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When Was the Harshest Recession?

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The recession of 1873 was actually known as the Great Depression until the 1929 recession rolled in.

The recession started with a financial panic in 1873 with the failure of Jay Cooke & Company, a major bank. The event caused a chain reaction of bank failures across the country and the collapse of a bubble in railroad stocks. The New York Stock Exchange shut down for 10 days in response. The recession lasted until 1877.

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What’s the Worst Effect of a Recession?

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An old economist joke is that a recession is when someone else loses their job, and a depression is when you lose your job. (Very few economists have transitioned to stand-up comedy.)

Your job is your main source of income, and that’s why it’s important to have a few months’ salary in cash as an emergency fund – especially since jobs are increasingly hard to come by in a recession.

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When Is the Best Time to Buy Stocks in a Recession?

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Historically, the best time to buy stocks is when the NBER announces the start of a recession. It takes the bureau at least six months to determine if a recession has started; occasionally, it takes longer. The average post-WWII recession lasts 11.1 months. Often, by the time the bureau has figured out the start of the recession, it’s close to the end. Many times, investors anticipate the beginning of a recovery long before the NBER does, and stocks begin to rise around the time of the actual economic turnaround.

For instance, the Great Recession was officially announced on Dec. 1, 2008 – a full year after it had started. The recession ended in June 2009; the bear market ended three months earlier, on March 6, 2009. The ensuing bull market lasted more than a decade.

In the most recent case, the NBER called the end of the Pandemic Recession on July 19, 2021, or 15 months after it ended. Meanwhile, the S&P 500 gained 50% from April 30, 2020 to July 14, 2021.

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What’s the Best Thing to Do With Your Money During a Recession?

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Pay off your credit card debt. Here’s why: Paying off a credit card that charges 18% interest is the rough equivalent of getting an 18% return on your investment, and you’re not going to get that from most other investments during a recession.

That said, bond prices typically rise in value during a recession – provided the recession isn’t sparked by rising interest rates.

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What Is the Best Early Warning Sign of a Recession?

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More than the stock market, consumer confidence or the index of leading economic indicators, an inverted yield curve has been a solid predictor of economic downturns.

An inverted yield curve is when short-term government securities, such as the three-month Treasury bill, yield more than the 10-year Treasury bond. This indicates that bond traders expect weaker growth in the future. The U.S. curve has inverted before each recession in the past 50 years, with just one false signal.

This indicator worked for the Pandemic Recession too. The yield curve inverted multiple times in 2019 and early 2020. On March 3, the three-month T-bill yielded 1.13%, and the 10-year T-note yielded 1.1%. (To make matters a bit more complicated, some economists prefer using the two-year T-note yield instead of the three-month T-bill.) The index of leading economic indicators is a composite of 10 indicators – including the stock market and consumer confidence – and is useful for those who want a broader view of the economic picture.

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Does the Federal Reserve Cause Recessions?

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Officially, the Fed never wants to start a recession, because part of its dual mandate is to keep the economy strong. Unfortunately, the other part of the Fed’s dual mandate is to keep inflation low. The main cure for soaring inflation is higher interest rates, which slows the economy. In 1981, the Fed hiked interest rates so high that three-month T-bills yielded more than 15%. Those rates put the brakes on the economy and ended inflation – at the price of a short but sharp recession.

Source: kiplinger.com

Easy Ways to Free Yourself From Debt

Wedding decor / Shutterstock.com

You’re ready to be debt-free. Bravo!

If you want to live free of debt, you can. And if you’re committed to the idea, you’re ready to take the next step.

Here are some steps to get started on the road to financial freedom.

1. Wipe out debt with this little-known strategy

There’s a way to dig yourself out of debt that many people don’t know about: personal loans.

With a free website called Credible, you could erase all of your credit card debt in record time. Credible gives you real prequalified rates on loans available without any impact on your credit score. Credible will match you with a low-interest loan to pay off all your credit cards at once — potentially saving you thousands in interest charges.

It’s free to check your rate online, and it only takes two minutes.

2. Find cheaper car insurance in minutes

Slashing your biggest expenses is a great way to find extra money to pay down debt.

Example? Car insurance. Simply shopping your policy could save you hundreds.

In the past, shopping for a new policy would take forever. First, you’d have to call the insurer, provide lots of information about yourself and your car, and by the time you finished there was no guarantee you’d get a better quote.

That was then. Today, finding cheaper car insurance rates is a breeze.

These days, you can use a comparison site like The Zebra to compare rates from 200 providers all at once, giving you every option possible — saving you up to $440 a year. Yep, in just two minutes you can save yourself $440 a year. Now that’s some serious savings.

Take two minutes, try it yourself, and see how much you can save.

3. Hire a professional to figure it all out

Identifying your spending patterns and where you can cut back is the key to getting ahead of your credit card debt.

A good financial adviser can help you figure out exactly how much money is coming in and going out each month, including your mortgage or rent, insurance, utilities, credit card payments and other bills.

If you need help finding a financial adviser, a great place to start is with SmartAsset’s free financial adviser matching tool, which connects you with up to three qualified financial advisers in five minutes. Each adviser is vetted by SmartAsset and is legally required to act in your best interests.

If you’re ready to be matched with local advisers who will help you reach your financial goals, get started now.

4. Pay no interest for up to 18 months

Why pay interest when you don’t have to? Unless you’re one of the relatively few people who actually pays off his or her credit card in full every month, you’re carrying an expensive balance and paying lots of interest. If that’s you, you should be using a 0% APR credit card.

The best 0% APR credit cards offer no interest on new purchases for up to 18 months. The choice is simple: Make sure you’re using one of these cards to help maximize your savings.

5. This lazy trick will save you $126 at checkout

Another way to find extra money to pay off debts? Save money whenever you shop.

Getting the best price when shopping online is a hassle. After you’ve compared prices and searched coupon codes, you end up frustrated before you even bought anything. But there’s a better way.

With just one click, a free shopping assistant called Honey instantly applies the best promo codes and discounts straight to your shopping cart in seconds — saving you an average of $126 a year. No more coupon hunting!

Listen, you’re going to buy the stuff you need. You might as well pay less. Even if it’s not huge savings, every bit gets you closer to living that debt-free life.

Start saving yourself more time and money, just add Honey — it’s free.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

Take These 4 Steps to Lower Your Cost of Living — Without Moving

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You don’t need a perfect credit score to get a loan — and comparing your options won’t affect your score at all.  Plus, AmOne keeps your information confidential and secure, which is probably why after 20 years in business, it still has an A+ rating with the Better Business Bureau.
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1. Knock $489/Year From Your Car Insurance in Minutes

If you owe your credit card companies ,000 or less, AmOne will match you with a low-interest loan you can use to pay off every single one of your balances.
The benefit? You’ll be left with one bill to pay each month. And because personal loans have lower interest rates (AmOne rates start at 3.49% APR), you’ll get out of debt that much faster. Plus: No credit card payment this month.
Just answer a few questions about your home to see how much money you’re wasting.
A website called Insure.com makes it super easy to compare car insurance prices. All you have to do is enter your ZIP code and your age, and it’ll show you your options.
So whether you live in Huntsville or The Hamptons, you can cut your cost of living anyway. Take these steps to slash your bills and give your budget a Mississippi makeover.

2. See if You’re Wasting $690/Year on Homeowners Insurance

If you’re determined to have the lowest cost of living among every other human being in the United States, move to Mississippi.
Just add it to your browser for free, and before you check out, it’ll check other websites, including Walmart, eBay and others to see if your item is available for cheaper. Plus, you can get coupon codes, set up price-drop alerts and even see the item’s price history.
Ready to stop worrying about money?
Kari Faber is a staff writer at The Penny Hoarder. She has only lived in the most expensive states the last 10 years and has definitely paid for it.
In fact, it saves users an average of 0 a year — or .50 a month. It’ll even help you break up with your old insurance company. (You’re allowed to cancel your policy at any time, and your company should issue you a refund.)
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3. Stop Paying Your Credit Card Company

You can get started in just a few clicks to see if you’re overpaying online.
The problem is, you’re paying too much. Luckily, an insurance company called Policygenius makes it easy to find out how much you’re overpaying. It finds you cheaper policies and special discounts in minutes.
This isn’t something you actively think about — you just know you’re required to have it.
Let’s say you’re shopping for a new TV, and you assume you’ve found the best price. Here’s when you’ll get a pop up letting you know if that exact TV is available elsewhere for cheaper. If there are any available coupon codes, they’ll also automatically be applied to your order.
That’s exactly what this free service does. And if you want to have a lower cost of living, you should be taking advantage of the lowest prices available on the internet.
Dollar for dollar, your cash will probably go further in the Magnolia State than if you were to live in a major urban cluster like New York, California or Florida. And you’ll definitely get more bang for your buck than if you lived in Hawaii — the state with the highest cost of living.

4. Find Out If You’re Overpaying

But packing up everything you own and moving somewhere just because it’s cheaper doesn’t actually make sense for most people. Jobs, family, friends and just plain old loving where you live means buying a piece of property outside Jackson isn’t always a viable option.
And just because you’re saving money doesn’t mean you’re skimping on coverage. Policygenius will make sure you have what you need.
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Source: thepennyhoarder.com
When’s the last time you checked car insurance prices? Unless you live in Ohio, North Carolina or New Hampshire — the cheapest states to get car insurance in 2021 — you’re probably paying too much. And that can make a big dent in your lower cost of living.
You’re probably wasting money right now. And it’s probably on something you’d never expect — your homeowners insurance policy. But if you’re living in a place where housing is more expensive, this is the one cost you can actually control.
Seriously — it has the lowest cost of living overall, taking into account grocery, housing and transportation expenses.
And the truth is, your credit card company doesn’t really care. It’s just getting rich by ripping you off with high interest rates — some up to 36%. But a website called AmOne wants to help. <!–

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Wouldn’t it be nice if you got an alert when you’re shopping online at Target and are about to overpay?

4 Tips to Avoid Having an At-Fault Accident Wreck Your Finances

Think you live in a safe neighborhood? Whether it’s a result of dropping your guard in familiar territory or inevitable due to frequency, most car accidents tend to happen within just a few miles of home.

You don’t have to be near your house for an accident to hit close to home, in another sense. We all know how much a fender bender can ruin your day. But what do you do when you’re at fault in an accident that could potentially ruin your financial stability?

Don’t let down your guard when you’re on the final stretch home. And don’t leave home again without reviewing these four tips protecting your finances in case you’re ever responsible for an accident.

Tip No. 1: ‘Right-Size’ Your Auto Insurance

They essentially mean the same thing, but there’s one critical distinction between “responsibility” and “liability” when it comes to auto accidents. It’s OK if you’re responsible for a car accident, as long as there’s an insurance company that’s liable for it.

Liability insurance is as essential as wearing a seatbelt when operating an automobile, because it can help you protect your assets if you’re ever responsible for property damage or bodily harm.

You need to choose enough liability coverage to pay any damages you might incur in an at-fault accident. But if you’re paying too much for auto insurance, you might be tempted to choose a low dollar amount of liability insurance.

When’s the last time you checked car insurance prices?

You should shop your options every six months or so — it could save you some serious money. Let’s be real, though. It’s probably not the first thing you think about when you wake up. But it doesn’t have to be.

A website called Insure.com makes it super easy to compare car insurance prices. All you have to do is enter your ZIP code and your age, and it’ll show you your options.

Using Insure.com, people have saved an average of $489 a year.

Yup. That could be $500 back in your pocket just for taking a few minutes to look at your options.

Tip No. 2: Cover Your Life, Not Just Your Car

Let’s just say it. Death, death, death — it’s an uncomfortable word to use, and it’s a topic many of us would rather skirt.

While it’s inevitable our time will come someday, there are preparations we can make now to help our loved ones cope in a world without us.

While there are exceptions, typically debt doesn’t disappear when you die.

Have you thought about how your family would manage without your income after you’re gone? How they’ll pay the bills? Send the kids through school?

Life insurance can help you leave money behind for your loved ones. In many states, this money is protected from lawsuits.

So now you’re probably thinking: I don’t have the time or money for life insurance. But your application can take minutes — and you could leave your family up to $1 million with a company called Bestow.

Rates start at just $16 a month. The peace of mind knowing your family is taken care of is priceless.

If you’re under the age of 54 and want to get a fast life insurance quote without a medical exam or even getting up from the couch, get a free quote from Bestow.

Tip No. 3: Gas Up Your Emergency Savings

It’s probably not likely you’ll want to tap your emergency savings to pay out a settlement if you’re at fault in an auto accident, unless the damages owed are minor. But being without a car, even temporarily, can be expensive. That’s where your emergency savings could help.

You’ve probably heard the best way to grow your money is to stick it in a savings account and leave it there for, well, ever. That’s bad advice, especially if you’re just trying to start an emergency fund or nurture a fledgling savings account.

Maybe you’re just looking for a place to safely stash it away — but still earn money. Under your mattress or in a safe will get you nothing. And a typical savings account won’t do you much better. (Ahem, 0.06% is nothing these days.)

But a debit card called Aspiration lets you earn up to 5% cashback and up to 16 times the average interest on the money in your account.

Not too shabby!

Enter your email address here, and link your bank account to see how much extra cash you can get with your free Aspiration account. And don’t worry. Your money is FDIC insured and under a military-grade encryption. That’s nerd talk for “this is totally safe.”

Tip No. 4: Carpool Your Debt with Consolidation and Refinancing

Personal loans aren’t just for bougie people who want to update every surface in their kitchen with massive granite slabs, status seekers who really shouldn’t be buying that car on that salary or the “all gas, no brakes” types that rack up massive amounts of credit card debt.

Personal loans are just that — lines of credit offered for a wide variety of personal reasons. There aren’t many better uses for a personal loan than keeping a personal injury lawyer from turning your life into a massive estate sale.

If you need a personal loan up to $50,000, AmOne can match you with a low-interest loan you can use to pay off every single one of your balances.

The benefit? You’ll be left with one bill to pay each month. And because personal loans have lower interest rates (AmOne rates start at 3.49% APR), you’ll get out of debt that much faster. Plus: No credit card payment this month.

AmOne won’t make you stand in line or call your bank, either. And if you’re worried you won’t qualify, it’s free to check online. It takes just two minutes, and it could help you pay off your debt years faster.

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Source: thepennyhoarder.com

Dear Penny: My Husband Quit Work for YouTube, but I’m Deep in Debt

Dear Penny,
I don’t want to tell him how bad it is because I’m embarrassed. I can’t stop spending. It’s like a mental illness or something. How do I stop it? 
Telling your husband about your debt is going to be hard. But ultimately, I think you’ll feel relieved once you’re no longer carrying the weight of this secret.
Before you go any further, I want to address the mental health element that you touched upon.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].
I hope you’ll discuss what you’re experiencing with your doctor. Compulsive spending isn’t an official diagnosis, but research suggests that a lot of people overspend when they’re dealing with negative emotions, like depression and anxiety. Treating any underlying disorders could be key to getting your behavior under control.
But I suspect your husband knows there’s a problem — and he doesn’t want to know how bad it is. His don’t-ask-don’t-tell approach makes things easy on him. He gets to pretend it’s your problem, not his.
Of course, part of me wonders whether your husband is a big part of the underlying problem. I don’t want to rush to judgment here without more details. But I wonder whether your current setup is more the product of your family’s child care needs or your husband’s desire for internet fame.


A credit counselor can help you determine how to address your debt. They can often work out a debt management plan. It won’t reduce the amount you owe, but it rolls your credit card debt into one lower monthly payment. While you may be able to keep one credit card open for emergencies, you’ll have to close your other accounts, which makes it harder to overspend.
Really, though, the details don’t change the fact that you need to tell him about your debt ASAP. I worry that your finances could implode soon given the current path you’re on. Once your husband depletes his savings, he’ll be even more dependent on you. Meanwhile, your overspending is no doubt pushing your monthly debt payments higher and higher. You can only stretch one paycheck so far.
It’s one thing if he’s a devoted stay-at-home dad who pursues his YouTube hobby on the side. But if your husband sees himself as a future YouTube star who just happens to watch his kid during the day, obviously, that’s much more problematic. The issues you’re dealing with will be incredibly difficult to address if everything’s all about him.
My husband knows I’m in debt. He just doesn’t know how bad. He quit his job last year. Now I’m the sole income earner. He’s using up his savings while trying to become a YouTuber and take care of our child full time. 
It’s hard to imagine who’s dreading the conversation that needs to happen more: you or your husband.
You may find that you being the sole earner isn’t enough. Your husband may need to get a job, even if that means budgeting for child care. This decision needs to be about what’s best for your family, not his YouTube channel.
Give your husband a head’s-up that you need to talk before having this conversation. Bad news is more palatable when the other person knows there’s something serious you need to discuss. Try something like, “I’m concerned about our expenses. Would you be able to talk about our bills tonight after dinner?”
Your spending is a sign of a deeper problem. You don’t want to disclose how much debt you’ve accumulated because you’re deeply ashamed.
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A good next step would be for you both to attend credit counseling. Look for a not-for-profit agency on the websites of the Financial Counseling Association of America or the National Foundation for Credit Counseling.
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Do whatever you can to make it harder to spend money. Delete shopping apps, unsubscribe from your favorite stores’ emails and only keep your debit card in your wallet.
More importantly, you and your husband need to schedule a time each week to go over your budget and spending each week. Look at all credit card and bank statements. Knowing that this check-in is coming may curb your spending.
-L.
Next, try to attend a Debtors Anonymous meeting or two. Plenty of chapters meet online. Just talking and listening to others with similar struggles may help you feel less alone.
Source: thepennyhoarder.com <!–

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Before you tell your husband, make sure you know how much you really owe. Don’t rely on memory or guesstimates. A lot of people buried in debt drastically underestimate how much they owe. Look at every single credit card and loan statement to figure this out to the exact cent. Quantifying your debt may seem terrifying at first if you’ve avoided it. But you may feel better once you know exactly what you’re dealing with.

Take This 7 Day Minimalism Challenge and Maximize Your Savings

Ah, the American Dream: making lots of money to buy a big house with more toilets than people living in it, then acquiring cars and lots of pretty things to look at.

But as we’ve spent more time than we ever expected in our homes with all of our stuff, we’ve found it’s not our shoe collections or hundreds of kitchen gadgets that bring us joy. It’s our connections with family and friends and creating new memories as we experience the world.

That’s why the minimalism movement has made such an impact on our lives recently. By selling and getting rid of *stuff*, we’re able to free up our cash to put into savings and investments and use it to see the people and things we care about.

So we’ve created this one-week minimalism challenge to cut the excess from our lives and maximize our money. To be able to free ourselves from physical objects weighing us down and grow our cash to be able to do the things we want.

See if you can complete the challenge in seven days!

Day 1: Cut Your Excess Bills

No, we don’t mean cancel your Netflix subscription — art is something that will continue to bring us joy, without taking up any space in our home.

But sure, if you don’t use Amazon anymore, you can cancel your Prime account (it may help you stop buying so much online), but we suggest cutting the bills that make no sense being so expensive. Like your car insurance.

When’s the last time you checked car insurance prices anyway?

You should shop your options every six months or so — it could save you some serious money. Let’s be real, though. It’s probably not the first thing you think about when you wake up. But it doesn’t have to be.

A website called Insure.com makes it super easy to compare car insurance prices. All you have to do is enter your ZIP code and your age, and it’ll show you your options.

Using Insure.com, people have saved an average of $489 a year.

Yup. That could be $500 back in your pocket just for taking a few minutes to look at your options.

Day 2: Minimize Your Online Spending

Extreme minimalism might not be up your alley, so we challenge you to alter your spending just a little to make your money go further.

For example, when you do your necessary online shopping, make sure you have an alarm ring when you’re about to overpay and save you hundreds every year.

That’s exactly what this free service does.

Just add it to your browser for free, and before you check out, it’ll check other websites, including Walmart, eBay and others to see if your item is available for cheaper. Plus, you can get coupon codes, set up price-drop alerts and even see the item’s price history.

Let’s say you’re shopping for a new TV, and you assume you’ve found the best price. Here’s when you’ll get a pop up letting you know if that exact TV is available elsewhere for cheaper. If there are any available coupon codes, they’ll also automatically be applied to your order.

In the last year, this has saved people $160 million.

You can get started in just a few clicks to see if you’re overpaying online.

Capital One Shopping compensates us when you get the extension using the links provided.

Day 3: Just Let it Go

One way people kick off their minimalist lifestyle is by doing a 30-day minimalism challenge. Here’s how it works: Every day for 30 days, get rid of something in your house that doesn’t bring you joy. That’s it.

Today is your day to start — and you can make money doing it.

The broken lamp you’ve been thinking about fixing your months/years? Trash it.

The hand-me-down baby toys your kid doesn’t play with? Give it away on your local Buy Nothing Facebook group.

The clothes hanging in your closet that don’t fit or aren’t your style anymore? Sell them! Here are a few easy ways to get cash for your stuff:

  • Order a clean-out bag from ThredUp and fill it with your clothes and shoes in good condition. Your mail carrier will pick it up for free and Thredup will pay you. It’s a pretty easy way to clean out your closet and make some cash.
  • List your high-ticket clothing items on a website like Poshmark. It takes more effort to create an account, market your items and mail them to buyers yourself, but you can potentially make more money than other resale options
  • Have other good condition items you want to get rid of? Sell them on eBay, Craigslist or  Facebook Marketplace to clean out your stuff locally.

Day 4: Say Goodbye to Credit Card Debt

Having credit card debt is a surefire way to minimize your savings. The interest rates your credit card company is charging you makes you feel like you’re never going to escape.

And the truth is, your credit card company doesn’t really care. It’s just getting rich by ripping you off with high interest rates — some up to 36%. But the sooner you get rid of your debt, the sooner you can start maximizing your money.

A website called AmOne wants to help.

If you owe your credit card companies $50,000 or less, AmOne will match you with a low-interest loan you can use to pay off every single one of your balances.

The benefit? You’ll be left with one bill to pay each month. And because personal loans have lower interest rates (AmOne rates start at 3.49% APR), you’ll get out of debt that much faster. Plus: No credit card payment this month.

You don’t need a perfect credit score to get a loan — and comparing your options won’t affect your score at all.  Plus, AmOne keeps your information confidential and secure, which is probably why after 20 years in business, it still has an A+ rating with the Better Business Bureau.

It takes less than a minute and just 10 questions to see what loans you qualify for — you don’t even need to enter your Social Security number. You do need to give AmOne a real phone number in order to qualify, but don’t worry — they won’t spam you with phone calls.

Day 5: Minimize Your Family’s Worries

Speaking of debt, even if you don’t have any now — you don’t want to create any for your family later. All your hard work to adopt a financially minimalist lifestyle could be crushed.

Have you thought about how your family would manage without your income after you’re gone? How they’ll pay the bills? Send the kids through school? Now’s a good time to start planning for the future by looking into a term life insurance policy.

You’re probably thinking: I don’t have the time or money for that. But your application can take minutes — and you could leave your family up to $1 million with a company called Bestow.

Rates start at just $16 a month. The peace of mind knowing your family is taken care of is priceless.

If you’re under the age of 54 and want to get a fast life insurance quote without a medical exam or even getting up from the couch, get a free quote from Bestow.

Day 6: Maximize Your Cash Back

No matter how much you minimize your finances, you’re still going to need to spend money. It’s just a fact!

But here’s the deal: If you’re not using Aspiration’s debit card, you’re missing out on extra cash. And who doesn’t want extra cash right now?

Yep. A debit card called Aspiration gives you up to 5% back every time you swipe.

Need to buy groceries? Extra cash.

Need to fill up the tank? Bam. Even more extra cash.

You were going to buy these things anyway — why not get this extra money in the process?

Enter your email address here, and link your bank account to see how much extra cash you can get with your free Aspiration account. And don’t worry. Your money is FDIC insured and under a military-grade encryption. That’s nerd talk for “this is totally safe.”

Day 7: Maximize Your Investments

Now that you’ve minimized your finances all week long, you’re able to maximize your future net worth — by owning a company.

That may sound expensive at first glance — we’re not Warren Buffet or Elon Musk — but with just a few dollars to start, it’s not totally out of reach when you use an app called Stash.

Stash lets you be a part of something that’s normally exclusive to the richest of the rich — on Stash you can buy pieces of other companies for as little as $1.

That’s right — you can invest in pieces of well-known companies, such as Amazon, Google, Apple and more for as little as $1. The best part? If these companies profit, so can you. Some companies even send you a check every quarter for your share of the profits, called dividends.1

It takes two minutes to sign up, and it’s totally secure. With Stash, all your investments are protected by the Securities Investor Protection Corporation (SIPC) — that’s industry talk for, “Your money’s safe.”2

Plus, when you use the link above, Stash will give you a $5 sign-up bonus once you deposit $5 into your account.*

1Not all stocks pay out dividends, and there is no guarantee that dividends will be paid each year.

2To note, SIPC coverage does not insure against the potential loss of market value.

For Securities priced over $1,000, purchase of fractional shares starts at $0.05.

*Offer is subject to Promotion Terms and Conditions. To be eligible to participate in this Promotion and receive the bonus, you must successfully open an individual brokerage account in good standing, link a funding account to your Invest account AND deposit $5.00 into your Invest account.

The Penny Hoarder is a Paid Affiliate/partner of Stash. 

Investment advisory services offered by Stash Investments LLC, an SEC registered investment adviser. This material has been distributed for informational and educational purposes only, and is not intended as investment, legal, accounting, or tax advice. Investing involves risk.

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Source: thepennyhoarder.com

5 Being a ‘Failure’ Could Push You Toward Your Full Potential

It’s inevitable. Everyone fails at something. But thankfully, most of those failures won’t show up on your permanent record. We fail at things so often and so grandly that many of us routinely label big-picture victories as losses, by mistake.

Wringing ringless fingers? Expecting to be expectant? Working hard to finally work for yourself?

Your failure to reach some of life’s most heralded milestones, or even basic self-sufficiency, may leave you feeling as if you just can’t keep pace with the pack. Chin up — you’re probably doing better than you think. Find out if any of these seven “failures” could actually put you on the inside track to getting ahead in life and reaching your full potential.

‘Failure’ No. 1: Not Having a Picture-Perfect Wedding

Trust us — you’re not a failure if you lack the resources to pour into pulling off a picture-perfect wedding.

The most important thing is that you’ve found someone to spend the rest of your life with. You can make up for a lack of funds with a little creativity and technology.

If there’s one thing the COVID-19 pandemic has taught us, it’s that just about any event can be conducted completely online. Adding a virtual component to your wedding festivities could help you afford to include everyone on your guest list, if you just don’t have the budget for a blockbuster wedding.

About 43% of newlyweds added a virtual option to their wedding last year, according to the 2021 WeddingWire Newlywed Report.

Along with scaling back the ceremony and accommodating virtual guests, you could also earn a little extra cash on the side to help offset costs. If you don’t have the time or energy for another job, we found a more effortless way to earn some extra cash.

A research company called InboxDollars will pay you to watch short video clips online. All you have to do is choose which videos you want to watch and answer a few quick questions about them afterward.

It’s possible to earn up to $225 a month without having to get another job.

Unlike other sites, InboxDollars pays you in cash — no points or gift cards. It’s already paid its users more than $56 million.

It takes about one minute to sign up, and you’ll immediately get a $5 bonus to get you started.

‘Failure’ No. 2: Not Buying a Brand New Car

If you want to feel like you’re on top of the world, finance as nice of a car as you can afford. And if you want to feel the weight of the world, watch how fast it depreciates.

Yes, driving a brand new car is one of those conventional signs of success, but the average person can’t tell the difference between model years, if the cars are part of the same generation. The average car generation contains about five to seven model years.

Buying a “like new” instead of “brand new” can help keep your budget intact and goals in sight. And you could spend even less on your new car by reviewing your credit scores before you buy.

If you have an error on your credit report (one out of five reports do), you could end up paying more for a car than you should.

Thankfully, a website called Credit Sesame will help you detect any errors — for free. It’ll even help you dispute them.

Salome Buitureria, a working mom in Louisiana, found a major error on her report this way. Using Credit Sesame, she was able to fix the mistake and take additional steps to raise her credit score from 524 to nearly 700.

Now she and her husband feel like they’re in a better position for their biggest goal — purchasing a house.

It only takes about 90 seconds to sign up.

‘Failure’ No. 3. Not Buying a House Before a Certain Age 

Is it ever worth it to be “house poor” — that is, you dump so much money into your house (downpayment, mortgage, closing costs, moving expenses) that you have little to no cash on hand?

It might be a safer, less stressful venture to get more aggressive in saving to bolster your retirement accounts to their full potential. But if you’re hellbent on investing in real estate, there are more attainable avenues you can venture down.

If you don’t have the time or money to buy a house yet, you may want to look into real estate investment trusts (REITs). These are funds pooled together from thousands of investors to invest in one property, like a mutual fund.

There are several ways you can invest in REITs, but perhaps the easiest is through an app called Stash. You might have heard of it. It helps folks invest and save small amounts of change. It also helps us invest small amounts into real estate.

If you don’t already use Stash, sign up here.

When you invest your first $5, you’ll get another $5 bonus to invest.* Now, you’ll have access to all of Stash’s tools, including its real estate investments. The app costs $1 a month.

‘Failure’ No. 4: Not  Being Out of Debt Yet 

Debt isn’t always a bad thing, especially when there’s not a lot of interest attached to it and it gives you the flexibility to address other financial issues. Yet, you might feel like you’re failing if you can’t seem to make any meaningful dents in your debt.

Imagine waking up with no credit card debt. Whether you’re stressed about being in debt forever or you’re just sick of the extra monthly bill, this would be a huge relief.

Impossible, right? But with help from a free website called AmOne, you could wipe out all of your credit card debt by the end of the week.

It will match you with a low-interest loan to pay off all your credit cards at once. Its interest rates start at 3.49% — way lower than the 20% or more you’re probably paying your credit card company. That could save you thousands in the long run.

Plus, you’ll be debt-free that much faster.

AmOne keeps your information confidential and secure, which is probably why after 20 years in business, it still has an A+ rating with the Better Business Bureau.

It takes two minutes to see if you qualify for up to $50,000 online.

‘Failure’ No. 5: Not Getting That Big Promotion 

You might feel like you’re failing or falling short of your full potential if you just can’t ever get a hold of that promotion your job has been dangling on a stick in front of you.

While you might not ever get that particular title you’ve been grooming yourself to earn, you can give yourself a promotion and even get a new title: bookkeeper.

You don’t have to be an accountant or good at math to start your own bookkeeping business. As long as you’re motivated, a company called Bookkeepers.com will teach you everything you need to know. It’s one of the leading training courses in the field, and it’ll even give you the first three classes for free.

It’s helped thousands of people launch their own businesses, including Daniel Honan, a military veteran in his 30s. He never considered starting his own company, but he signed up for Bookkeepers.com, and now he’s making around $50,000 a year keeping track of business expenses for his 10 clients.

It only took him three months to get started, taking one class a week. Oh, and he makes his own schedule and is able to spend more time with his wife than ever.

If you’re just a little curious, you just have to submit your email address here to take the first free classes. If you stick with it, you could be running your own business in just a few months.

Quinten Plummer is a staff writer at The Penny Hoarder.

*Offer is subject to Promotion Terms and Conditions. To be eligible to participate in this Promotion and receive the bonus, you must successfully open an individual brokerage account in good standing, link a funding account to your Invest account AND deposit $5.00 into your Invest account.

The Penny Hoarder is a Paid Affiliate/partner of Stash. 

Investment advisory services offered by Stash Investments LLC, an SEC registered investment adviser. This material has been distributed for informational and educational purposes only, and is not intended as investment, legal, accounting, or tax advice. Investing involves risk.

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Source: thepennyhoarder.com

Cash-Out Refi 101: How Cash-Out Refinancing Works

A cash-out refinance is one way for homeowners to access a lump-sum of cash. The process involves borrowing a new mortgage for a larger amount than the existing mortgage. The borrower receives the difference in cash. It is only possible to do a cash-out refinance if the borrower has sufficient equity (ownership) in their home. Generally, lenders limit cash-out refinances to 80% of the equity a borrower has built in their home.

The Basics of How Cash-Out Refi Works

Here’s a hypothetical scenario to illustrate how a cash-out refinance could work:

Let’s say you have a home valued at $300,000. You owe $100,000 on your current mortgage and have $200,000 in equity. In this case, you want to borrow $40,000, so you apply for a cash-out refinance for $140,000.

In this scenario, $100,000 of the refinanced mortgage would go toward paying off your existing mortgage along with applicable costs (if any) due at closing, with the remaining $40,000 received in cash.

Upon closing on the cash-out refi, you will have a completely new mortgage and the terms, including the interest rate, term, and monthly payment may all be different than the previous mortgage.

If you’re in need of cash for home repairs or for any other reason, a cash-out refinance is not your only option. Here, we will examine the cash-out refi process, the pros and cons of a cash-out refi, and other options for getting a lump sum loan.

What Is Cash-Out Refinancing Used For?

Technically, a cash-out refinance can be used for just about anything. Some uses for a cash-out refinancing include home renovations, funding a downpayment for a second home, or paying off credit card debt or other high-interest debt.

Ideally, a cash-out refi would result in a lower interest rate than the existing mortgage; however, it’s important to examine your personal financial situation to determine the best outcome for you.

If a lower interest rate is your goal, but you are unable to get it, there are other options that may be worth considering.

Cash-Out Refinancing Eligibility

In addition to having equity in the home, lenders consider a variety of factors to determine eligibility for a cash-out refi. Here are a few examples of what lenders may look at:

Credit score: A higher credit score could help borrowers secure a more competitive interest rate on their cash-out refi.

Loan-to-value (LTV) ratio: This is a percentage reflecting the difference between the outstanding principal balance of the current mortgage versus the current appraised value of your home. Using the example from above, a person with a home with an appraised value of $300,000 and a $150,000 remaining principal balance on their existing mortgage has a 50% loan-to-value ratio. ($150,000 / $300,000 = 50%.)

Appraisal value: Some refinances will require a property valuation—typically a recent appraisal. However, some lenders may find an alternative to a full appraisal, like a virtual valuation, so confirm requirements with the lender.

Seasoning: Seasoning relates to the age of a mortgage. If a mortgage is at least 12 months old, lenders generally consider the mortgage “seasoned.” If a mortgage is not considered fully seasoned, it may not be possible to apply for a cash-out refi.

Pros of Cash-Out Refinancing

Potentially lower rates: Borrowers with a strong, established credit history may be able to refinance to a lower interest rate than they might secure with other types of loans like a home equity line of credit.

Improved credit score: If the money is used to pay off higher-interest debt like credit cards, this could potentially offer a credit score boost.

Mortgage interest deductions: Mortgage interest for cash-out refinance loans may be tax deductible, depending on what the money is used for. Consult with a tax professional for more details as they apply to your unique situation.

Cons of Cash-Out Refinancing

A reduction in equity: Increasing the secured lien on your home reduces the amount of available equity. Downward market fluctuations can further reduce the amount of available equity in your home. These are important considerations when determining the purpose and amount of a cash-out refi.

Length of loan: If the term on the cash-out refi is longer than the remaining term on the current loan, this could extend the overall length of repayment, which could result in increased interest over the life of the loan.

Risk of foreclosure: Anytime someone uses their home as collateral, it’s at an increased risk. In the event there are issues with making payments, the bank could foreclose on the home.

Closing Costs: Borrowers will often have to pay closing costs, anywhere from 3% to 5% of the total loan amount (including the old loan and the amount that is cashed out) , which can add up quickly.

Are There Other Options?

A cash-out refinance isn’t the only option if a homeowner is in need of cash. Here are a few to consider.

Home Equity Line of Credit (HELOC)

A Home Equity Line of Credit (HELOC) is a revolving line of credit that uses the borrower’s house as collateral. Borrowers typically don’t take a lump sum HELOC unless they know they can pay it back. Instead, with a HELOC, the borrower is given a credit limit, and because the credit is revolving, they can use it, pay it back, and then tap into it again. HELOCs typically offer variable rates that could change over the course of the loan.

Home Equity Loan

A home equity loan also uses the borrower’s house as collateral, but offers a lump sum payment. Home equity loans often have a fixed interest rate, and are typically chosen when a borrower knows how much cash they will need up-front. A home equity loan is separate from the mortgage and often offers different terms.

Personal Loan

Personal loans are typically unsecured, which means that they do not require existing assets (like your home) as collateral. This usually means higher interest rates than loans that are secured by collateral.

Making the Right Choice for Your Finances

When determining the right option for you, consider your decision from a few angles. One of the factors in determining the right loan for you is the amount of time it will take to pay back the additional funds needed. No matter what you choose, it’s wise to consider the all-in costs of each possible option.

There are many important factors to consider when taking cash out of your home. Determine what you need the money for, and for how long. Compare the costs to the money potentially saved by refinancing to a lower interest rate. And shop around to find the right option for you.

Cash-Out Refinancing FAQs

Here are some of the most frequently asked questions when it comes to cash-out refinancing.

Are There Limitations on What the Cash Can Be Used For?

With a cash-out refinance, the money can be used for pretty much any purpose. While the money from a cash-out refinance can be used for anything, remember that borrowing a cash-out refinance loan means removing equity and using your home as collateral. So, while you can use the money for anything, some uses are wiser than others.

How Much Can you Cash Out?

Generally, lenders will limit borrowers to 80% of the equity they have in their home. Keep in mind that this may vary based on a lender’s policies. VA loans are an exception to this, they allow borrowers to take out 100% of the equity in their home.

Does a Borrower’s Credit Score Affect How Much They Can Cash Out

A borrower’s credit score may influence how much they are able to borrow. In general, to borrow a cash-out refinance, lenders will expect a minimum credit score in between 600 and 640. Some lenders may offer cash-out refi loans to borrowers with lower credit scores as well. Each lender will have their own requirements around minimum credit scores, so compare options.

The Takeaway

Cash-out refinancing is an option that allows homeowners to tap into the equity in their home. The general process involves borrowing a new mortgage where borrowers can use their existing equity to secure a lump-sum payment.

The money can be used for nearly any expense, from paying off high interest debt to financing a renovation.

Borrowing a cash-out refinance does come with risk, importantly that the borrower is removing equity from their home and the house is used as collateral.

Other alternatives to consider depending on individual financial circumstances include a HELOC, personal loan, or home equity loan.

Curious about SoFi’s competitive cash-out mortgage refinancing rates? Learn more.


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