Change has to start somewhere, and for many people that change is easier to make if the starting point has some meaning. It can be a birthday, an anniversary, or any other date with some symbolic weight. Most commonly, people choose the beginning of the new year.
If you’re looking for some New Year’s resolutions that will truly change your life, consider adjusting your financial strategy. Here are five things you can do in 2021 to take your money game to the next level.
Refinance Loans
Interest rates are at near-historic lows, which makes this the perfect time to refinance your debt. Refinancing means switching your loans from your current lender to a new lender in order to take advantage of a lower interest rate. Refinancing can save you thousands of dollars, depending on the original interest rate and total balance.
 For example, letâs say you have a $200,000 30-year mortgage with a 5% interest rate, and you refinance to a 3% interest rate. Your monthly payment will be $244 lower, and youâll save $31,173 in total interest over the life of the loan.Â
You can refinance auto loans, personal loans, and even student loans. However, if you have federal student loans, you may want to hold off on refinancing. Refinancing a federal student loan converts it into a private student loan. This means youâll give up extra perks and benefits like income-driven repayment plans and deferment and forbearance options.
Transfer Credit Card Debt
If you have credit card debt, you can pay less interest by transferring the balance to a new card with 0% APR on balance transfers. These special discounts usually last between 12 to 18 months, during which time you wonât be charged interest on the credit card balance.
For instance, letâs say you have a $5,000 balance on a card with a 17% APR. If you only make the minimum payments, youâll pay $1,223.61 in total interest. If you transfer that balance to a card with 0% APR for 12 months and repay the balance in that time, you wonât pay any interest.
There is often a small fee associated with balance transfers, around 3% of balance transfers. For example, if you transfer $5,000, youâll pay a $150 fee. That still leaves a net savings of $1,073.61 in the scenario outlined above.
Decrease Your Fixed Expenses
One of the best things to do for your budget in 2021 is to decrease fixed expenses like your car insurance, internet, cable, and cell phone. Call those providers and try to negotiate a lower rate.
 Go through your transactions for the past few months and write down all the recurring subscriptions like Netflix, Amazon Prime, and DoorDash. Then, group them into categories like âfrequently use,â âsporadically useâ and ârarely useâ. Consider canceling anything you rarely use.
 See if you can get a better deal on your most popular subscriptions. For example, if you and your significant other both pay for Spotify Premium, get a Spotify Duo account instead, and save yourself $83.88 a year.
Open a Better Bank Account
Most people are missing out on an easy way to earn money through your bank account. You could be leaving hundreds of dollars on the table if you still have a traditional savings account.
According to the FDIC, the current average interest rate on a savings account is 0.05%. Many high-yield savings accounts offer rates between .40% and .60%.Â
Letâs say you have $10,000 in a savings account with .05% interest. After one year, youâll have earned $5.04 in interest. If you moved that amount to a high-yield savings account with .5% interest, you would earn $49.92 in interest over that same time period.
Start Investing
If you’re not investing for retirement yet, this might be the most important financial resolution you can make. Thanks to the power of compound interest, you can start investing now and see huge growth by the time youâre ready to retire.
IRAs and 401(k)s are the two main retirement accounts. Anyone can open an IRA, while only those who have access to an employer-sponsored 401(k) can open one.
 If you’re not sure how to invest in your retirement account, consider hiring a qualified financial planner through the National Association of Personal Financial Advisors (NAPFA).
If youâre not ready to work with a financial planner, you can use a robo advisor like Betterment or Wealthfront, which will create a portfolio based on your age, income, and expected retirement age. Robo advisors have low fees and are designed to help beginner investors.
How to Keep Financial Resolutions
First, start small. Pick one habit to change at a time. If you try to accomplish five goals at once, you’ll burn out quickly and give up.Â
When you decide on a resolution, break it up into smaller, more manageable tasks. For example, if your goal is to talk to a financial planner about investing, break it down into the following steps:
1) Research financial planners through NAPFA
2) Send introductory emails to three financial planners
3) Choose the one that seems like the best fit
4) Schedule a consultation
Give yourself a deadline to accomplish each of these tasks, and ask a friend to hold you accountable.
Another tip is to tie your resolutions to a bigger goal. Like dieting or starting a new exercise plan, changing your financial habits is hard. If you’re used to grabbing lunch with your co-workers every day, bringing leftovers from home instead will seem like a huge change.
The key is to imagine the future version of yourself who will benefit from the changes you make today. If your goal is to open and contribute to a retirement account, imagine yourself as a senior citizen living comfortably.
When youâre tempted to skip this monthâs retirement contribution to buy concert tickets, think about your future self, what youâd want for them and how they would appreciate your sacrifice. It can also help to remember some of the financial mistakes you’ve made in the past, and how much easier your life would be right now if you had made a different choice.
The post The 5 Best Financial New Year’s Resolutions appeared first on MintLife Blog.
If you’re thinking about how much is enough for retirement, you’re probably contemplating a retirement and need to know how to pay for it. If you are, that’s good because one of the challenges we face is how we’re going to fund our retirement.
Determining then how much retirement savings is enough depends on a number of factors, including your lifestyle and your current income. Either way, you want to make sure that you have plenty of money in your retirement savings so you don’t work too hard, or work at all, during your golden years.
If you’re already thinking about retirement and you’re not sure whether your savings is in good shape, it may make sense to speak with a financial advisor to help you set up a savings plan.
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How Much Is Enough For Retirement?
Your needs and expectations might be different in retirement than others. Because of that, there’s no magic number out there. In other words, how much is enough for retirement depends on a myriad of personal factors.
However, the conventional wisdom out there is that you should have $1 million to $1.5 million, or that your retirement savings should be 10 to 12 times your current income.
Even $1 million may not be enough to retire comfortably. According to a report from a major personal finance website, GoBankingRates, you could easily blow $1 million in as little as 12 years.
GoBankingRates concludes that a better way to figure out how long $1 million will last you largely depends on your state. For example, if you live in California, the report found, “$1 Million will last you 14 years, 3 months, 7 days.” Whereas if you live in Mississippi, “$1 Million will last you 23 years, 2 months, 2 days.” In other words, how much is enough for retirement largely depends on the state you reside.
For some, coming up with that much money to retire comfortably can be scary, especially if you haven’t saved any money for retirement, or, if your savings is not where it’s supposed to be.
Related topics:
How to Become a 401(k) Millionaire
Early Retirement: 7 Steps to Retire Early
5 Reasons Why You Will Retire Broke
Your current lifestyle and expected lifestyle?
What is your current lifestyle? To determine how much you need to save for retirement, you should determine how much your expenses are currently now and whether you intend to keep the current lifestyle during retirement.
So, if you’re making $110,000 and live off of $90,000, then multiply $90,000 by 20 ($1,800,000). With that number in mind, start working toward a retirement saving goals. However, if you intend to eat and spend lavishly during retirement, then you’ll obviously have to save more. And the same is true if you intend to reduce your expenses during retirement: you can save less money now.
The best way to start saving for retirement is to contribute to a tax-advantaged retirement account. It can be a Roth IRA, a traditional IRA or a 401(k) account. A 401k account should be your best choice, because the amount you can contribute every year is much more than a Roth IRA and traditional IRA.
1. See if you can max out your 401k. If you’re lucky enough to have a 401k plan at your job, you should contribute to it or max it out if you’re able to. The contribution limit for a 401k plan if you’re under 50 years old is $19,000 in 2019. If you’re funding a Roth IRA or a traditional IRA, the limit is $6,000. For more information, see How to Become a 401(k) Millionaire.
2. Automate your retirement savings. If you’re contributing to an employer 401k plan, that money automatically gets deducted from your paycheck. But if you’re funding a Roth IRA or a traditional IRA, you have to do it yourself. So set up an automatic deposit for your retirement account from a savings account. If your employer offers direct deposit, you can have a portion of your paycheck deposited directly into that savings account.
Related: The Best 5 Places For Your Savings Account.
Life expectancy
How long do you expect to live? Have your parents or grandparents lived through 80’s or 90’s or 100’s? If so, there is a chance you might live longer in retirement if you’re in good health. Therefore, you need to adjust your savings goal higher.
Consider seeking financial advice.
Saving money for retirement may not be your strong suit. Therefore, you may need to work with a financial advisor to boost your retirement income. For example, if you have a lot of money sitting in your retirement savings account, a financial advisor can help with investment options.
Bottom Line:
Figuring out how much is enough for retirement depends on how much retirement will cost you and what lifestyle you intend to have. Once you know the answer to these two questions, you can start working towards your savings goal.
How much money you will need in retirement? Use this retirement calculator below to determine whether you are on tract and determine how much you’ll need to save a month.
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Working With The Right Financial Advisor
You can talk to a financial advisor who can review your finances and help you reach your goals (whether it is paying off debt, investing, buying a house, planning for retirement, saving, etc). Find one who meets your needs with SmartAssetâs free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.
The post How Much Is Enough For Retirement? appeared first on GrowthRapidly.
The post Smart Moves to Make with Your Tax Refund appeared first on Penny Pinchin' Mom.
It is tax season!
You know the goal is not to get much of a refund.
However, a refund is always better than paying in!
But when that money shows in your account donât go and blow it on what you want! Make some smart moves with your refund.
Pay off debt
If you have debt then that means you should not have fun with any extra money. Nope. Every penny that you earn (beyond your regular income) should be used to pay off your debt.
While some experts will claim to pay the bill with the highest interest rate, I recommend paying the lowest balances first. The reason is you see results.
If you are getting $2,000 back and owe $500, $1500 and $2500, pay off two of your bills. Now, youâve got one payment and can roll all three monthly payments into one and pay that largest bill off more quickly.
You see progress in moving from three debts to one and that alone can be enough to keep you motivated.
Build your emergency fund
Experts used to say that your emergency fund should be three months of income for a family. After watching many struggle through the last recession, I recommend it be six-nine months instead!
I get that is a LOT of money to save up, but your tax refund can be the perfect way to build up your savings. But donât put it in your regular savings account. You donât want to be tempted to spend it.
Set up a new account at your bank. Deposit your refund into the account that is for emergencies only. Donât touch it.
Now youâve got money earmarked for your emergencies and should never touch it unless absolutely necessary.
Invest in your future
It is fun to spend money now but if your retirement accounts have taken a beating (or if they are non-existent) it is time to make that investment.
Visit with a financial expert and set up an IRA or other type of retirement savings account and invest that money. That $1,000 you fund today will be worth much more when it is time to cash it in.
Make upgrades
Look around your house for appliances or vehicles that may need to soon be replaced. When you catch a sale, make the investment now. Donât wait for it to break down completely.
If you do wait, you may be forced to pay full price and your money wonât go as far. Being proactive and replacing what needs to be when the price is right is a smart money move.
Make home improvements
Look around the house to see what needs to be repaired or updated. Is the paint starting to peel on the trim? Is the carpet wearing out?
Your house is an investment youâve made so you need to take care of it. Peeling paint can lead to dry rot. Old carpet could lead to more stains, odors or even damage to the subfloor (which could cost you even more).
Take care of your house so when the time comes to sell, it is in great shape so you can get top dollar.
Do something for yourself
There is nothing wrong with making an investment in your well-being. In fact, it could be a very smart move.
When you feel better about yourself and give yourself the opportunity to get or do things you donât normally, it changes your perspective. You get the chance to focus on you and that is a GOOD thing.
Splurge on that handbag. Go out to dinner. Set up that spa day. Just donât go too overboard.
Spend it as a family
You can also get the family to weigh in what you can do with your refund. You may have no debt; an emergency fund and retirement looks great. That means you can do something fun!
Talk with the kids about what to do with the refund. It may be a vacation or adventure. It may mean buying a basketball hoop or bikes for everyone.
Work together to determine the best way to use the money.
A tax refund is your money. Use it wisely.
The post Smart Moves to Make with Your Tax Refund appeared first on Penny Pinchin' Mom.
Jobs requiring a bachelorâs degree or higher level of education for entry are often more insulated from unemployment than others. During the COVID-19 pandemic, total unemployment for individuals 25 years and older spiked to 13.1% in April 2020. However, the highest unemployment rate over the past year for bachelorâs degree holders 25 and older was 8.4% in April 2020. As of November 2020, the national unemployment rate was 6.7% â 2.5 percentage points higher than the unemployment rate for bachelorâs degree holders.
Some jobs for bachelorâs degree holders may be even more insulated from economic changes as demand is high. In this study, we investigated the most in-demand jobs for bachelorâs degree holders. We compared a total of 131 occupations across four metrics: percentage change in average earnings from 2018 to 2019, percentage change in employment from 2018 to 2019, projected employment change from 2019 to 2029 and projected percentage change in employment from 2019 to 2029. For details on our data sources or how we put all the information together to create our final rankings, check out the Data and Methodology section below.
This is SmartAssetâs third annual study on the most in-demand jobs for bachelorâs degree holders. Check out the 2020 rankings here.
Key Findings
A list similar to last year. Almost half of the 10 most in-demand jobs for bachelorâs degree holders in 2021 were in our top 10 last year. They are computer and information systems managers, information security analysts, interpreters & translators and medical & health service managers. Of those four occupations, interpreters & translators saw the biggest jump between the two years, moving down five spots from first to sixth.
More than 30% growth expected in two occupations. On average across the 131 occupations in our study, employment is expected to grow by 5.0% between 2019 and 2029. But the expected growth is more than six times higher for two occupations â information security analysts and medical & health service managers. The Bureau of Labor Statistics (BLS) predicts employment increases of 31.2% and 31.5% for those two occupations, respectively, between 2019 and 2029.
1. Producers and Directors
The producer and director occupation ranks in the top quartile of our study for all four metrics we considered. Between 2018 and 2019, employment of producers and directors grew by almost 9%, while average earnings rose by about 5%. Moreover, the BLS projects the occupation will continue to grow. According to their estimates, the number of producers and directors will increase by 16,000, or 10.0%, from 2019 to 2029.
2. Computer and Information Systems Managers (tie)
The computer and information systems manager occupation ranks in the top 15% of occupations for three of the four metrics in our study. The occupation saw the ninth-largest percentage increase in employment from 2018 to 2019, growing by 10.87%. Between 2019 and 2029, the BLS expects it will grow by another 10.4%, adding 48,100 workers. Across all 131 occupations, that is the 19th-highest percentage increase and ninth-largest gross increase in workers.
2. Agents and Business Managers of Artists, Performers and Athletes (tie)
The occupation of agent and business manager for artists, performers and athletes ties with computer and information systems manager as the No. 2 in-demand job for bachelorâs degree holders. Between 2018 and 2019, average pay for agents and business managers for artists, performers and athletes grew by almost 7%, the seventh-highest rate across all 131 occupations. Over the same time period, employment grew by 15%, second-highest in our study for this metric.
4. Information Security Analysts
Information security analyst is the fourth most in-demand job for bachelorâs degree holders, moving up from fifth place last year. Though average earnings grew at a comparable pace year-over-year, employment increased sharply in this profession. BLS estimates show that information security analyst employment increased by 16.20%. There were about 108,100 information security analysts in 2018 and almost 125,600 in 2019.
5. Actuaries
Most actuaries work for insurance companies, assessing the financial costs of risk and uncertainty. Between 2018 and 2019, average earnings for actuaries grew by 4.06% â the 15th-highest one-year earnings increase in our study. Additionally, between 2019 and 2029, employment for this occupation is expected to grow by another 17.6%, the seventh-largest percentage change in employment in the study.
6. Interpreters and Translators
According to BLS employment projections, the number of interpreters and translators in the U.S. is expected to increase by 20.0% between 2019 and 2029, a top-five rate in our study. With that projected percentage change, employment will grow by roughly 15,500 workers, a top-30 rate. Most recently, from 2018 to 2019, average earnings for interpreters and translators grew by 3.20%, the 25th-highest rate for this metric in the study.
7. Fundraisers
The occupation of fundraiser ranks in the top third of all 131 occupations for three of the four metrics we considered. Between 2018 and 2019, employment grew by 7.87%, the 19th-highest rate. Looking forward, total employment of fundraisers is expected to grow by 14,400, or 14.3%, over the next 10 years â the 30th-largest gross increase and 11th-highest percentage increase.
8. Medical and Health Service Managers
Medical and health service managers plan and coordinate the business activities of healthcare providers. Average earnings for medical and health service managers are high and growing. In 2018 and 2019, average earnings for workers in the occupation stood at $113,730 and $115,160, respectively. Additionally, across the 131 occupations in our study, BLS expects the profession to have the third-largest gross employment increase (133,200 workers) and highest percentage employment increase (31.5%) over approximately the next decade.
9. Athletic Trainers
Between 2019 and 2029, the occupation of athletic trainer is expected to grow by 16.2%, the ninth-highest rate for this metric in our study. Athletic trainers may also see their earnings continue to grow over time. Between 2018 and 2019, average earnings for athletic trainers increased by 2.56% from about $49,300 to more than $50,500.
10. Compensation, Benefits and Job Analysis Specialists
Compensation, benefits and job analysis specialist rounds out our list of the top 10 most in-demand jobs for bachelorâs degree holders. Average earnings for compensation, benefits and job analysis specialists grew by 2.84% between 2018 and 2019, 33rd-highest in our study. The occupation ranks within the top third of the study for the other three metrics as well. It had the 26th-highest percentage change in employment from 2018 to 2019 (6.88%), the 43rd-greatest projected gross employment change from 2019 to 2029 (7,500) and the 28th-highest projected percentage employment change from 2019 to 2029 (7.9%).
Data and Methodology
To find the most in-demand jobs for bachelorâs degree holders, we looked at data for 131 occupations that the BLS classifies as typically requiring a bachelorâs degree for entry. We compared the 131 occupations across four metrics:
Percentage change in average earnings from 2018 to 2019. Data comes from BLS Occupational Employment Statistics and is for May 2018 and May 2019.
Percentage change in employment from 2018 to 2019. Data comes from BLS Occupational Employment Statistics and is for May 2018 and May 2019.
Projected employment change from 2019 to 2029 (gross figure). This is the projected change in the total number of people employed in an occupation from 2019 to 2029. Data comes from the BLS 2019 Employment Projections.
Projected employment change from 2019 to 2029 (percentage change). This is the projected percentage change in the number of people employed in an occupation from 2019 to 2029. Data comes from the BLS 2019 Employment Projections.
We ranked each occupation in every metric, giving a full weighting to all metrics. We then found each occupationâs average ranking and used that to determine a final score. The occupation with the best average ranking received a score of 100 while the occupation with the worst average ranking received a score of 0.
Tips for Making Educated Choices With Your Earnings
Invest early. With relatively high income and earnings, many bachelorâs degree workers may be able to have an early retirement. To do this, it is important to take advantage of compound interest by investing early. Take a look at our investment calculator to see how your investment in a savings account can grow over time.
Contribute to a 401(k). A 401(k) is an employer-sponsored defined contribution plan in which you divert pre-tax portions of your monthly paycheck into a retirement account. Some employers will also match your 401(k) contributions up to a certain percentage of your salary, meaning that if you chose not to contribute, you are essentially leaving money on the table. Our 401(k) calculator can help you determine what you saved for retirement so far and how much more you may need.
Consider professional help. A financial advisor can help you make smarter financial decisions to be in better control of your money. Finding the right financial advisor that doesnât have to be hard. SmartAssetâs free tool matches you with financial advisors in your area in five minutes. If youâre ready to be matched with local advisors that will help you achieve your financial goals, get started now.
Questions about our study? Contact us at press@smartasset.com.
What could be easier than getting a little money back on the things you buy every day? That’s how cash back credit cards work and what makes them appealing to some consumers.
Cash back cards come in a variety of flavors â bonus category, tiered rewards and flat percentage cash back cards â but they all pay you back. Flat percentage cash back cards are ideal for the âset it and forget it” crowd, but bonus category and tiered rewards cards can offer more rewards â if you’re willing to put in a little legwork to maximize your cash back in select spending categories.
Here we take a look at the different types of cash back cards and how they work, the key benefits of cash back cards, how to redeem cash back and how to choose the best cash back card for you.
See related:Â How to choose a credit card
How cash back cards work
So how do all of these cash back cards work? It’s simple: Cash back is essentially a rebate of a percentage of the purchases you make on the card. With flat-rate cash back credit cards, every purchase earns the same percentage cash back, while with category bonus cards and tiered bonus cards, different types of spending earn more cash back.
Card issuers can afford to pay cash back because merchants pay an interchange fee on each transaction. âWhen you pay a merchant $100 with a credit card, the merchant only receives about $97,â says Daniel Mahoney, a certified financial planner in Atlanta.
For example, a TV that costs $700 would net you $14 with a 2% cash back card. The merchant, meanwhile, paid a transaction fee of around $21 when you paid with your credit card.
âRewards or rebates may also be funded by deals between the credit card issuer and specific merchants,â Mahoney adds. An example of this is cash back earned through card-linked offers.
How do card issuers know what types of spending qualifies for which percentage of cash back? Merchant category codes are four-digit numbers denoting a business type, such as a gas station or grocery store. Merchant category codes are used by credit card networks to categorize and track purchases.
How to redeem cash back
There are a number of ways to redeem your cash back rewards, including as a statement credit, check or deposit to a bank account, toward travel, to purchase gift cards or merchandise or as a donation. How many options you have and what requirements must be met before you can redeem will vary from card to card and issuer to issuer.
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Statement credits are the most common cash back redemption method and, as the term implies, act as credits against your existing card balance. For example, if you earned $20 in cash back and redeemed your rewards as a statement credit, your card balance would be reduced by $20.
Statement credits give you a simple, convenient way to save money over time, but since they’re tied to your card account, they offer a bit less flexibility than “true” cash back in the form of a check or direct deposit, which you can save or spend however you like.
Generally speaking, redeeming your rewards is as simple as choosing your redemption method, specifying the amount you want to redeem and hitting submit. Some cards also offer automatic cash back redemption in the amount and via the method you specify once you’ve reached a specific earnings threshold.
While statement credits, checks and direct deposits tend to get you full value for your rewards (with $1 earned yielding a $1 credit or direct payment), other redemption methods like gift cards and donations may only net you a fraction of your rewards value.
On the other hand, pairing a cash back card with a higher-tier travel or rewards card can sometimes boost the value of your cash back rewards, as in the case of the so-called “Chase trifecta“.
Check with your card issuerâs rules on cash back redemption amounts and options, as some cards offer more restrictive redemption schemes than others. For example, while a card like the Chase Freedom Unlimited allows you to redeem your cash back as a statement credit, check or direct deposit in any amount, anytime, the Costco Anywhere Visa® Card by Citi only issues rewards annually as a certificate with the February statement.
Benefits of cash back credit cards
Along with the obvious benefit of allowing you to earn a bit of money back on most â if not all â of your spending, cash back cards offer a number of advantages for experienced and newbie cardholders alike.
To start, cash back cards can offer more simplicity than other rewards credit cards. Since you get back a percentage of your card spend, you’ll always have a pretty good sense of how much money you’re earning. Cards that earn points or miles, by contrast, often require you to calculate point values and weigh redemption options to be sure you’re getting the most out of your rewards.
âThe primary benefit of a cash back card is the simplicity,â says Roman Shteyn, owner and CEO of RewardExpert.com.
âYou donât have to think too much about how much youâre earning while using the card, and when it comes to redemption, the best cash back credit cards are pretty straightforward. Most people just deduct their cash back from their statement balance or redeem for gift cards.â
Cash back cards also stand out as a low-effort savings tool. Indeed, the typical savings account earns a measly 0.05% annual yield, while nearly all cash back cards offer at least 1% back on every purchase. Your return is even greater with cash back cards offering a flat 1.5%, 2% or more on every purchase.
And unlike the interest on your bank account, cash back comes tax-free.
âThe IRS has historically viewed credit card cash back as a nontaxable rebate on the purchase price, rather than as a taxable form of income,â says Mahoney.
Something else to think about: Cash back, if loaded back on your card, also earns its own cash back when you spend it, adds financial planner Andrew Feldman of Chicago. âItâs a fraction, but itâs still a little more cash,â he says.
Factor in that some cash back cards offer sign-up bonuses of $150 or $250, and that is even more cash for you for using the card.
See related:Â Cash back vs. points
Types of cash back cards
There are three main types of cash back credit cards: Category bonus cash back cards, which offer a high cash back rate in spending categories that change throughout the year; tiered rewards cash back cards, which offer consistent cash back in specific categories of spending; and flat-rate cash back cards, which get you cash back at the same rate on all purchases.
Category bonus cash back cards
Overview: Category bonus cash back cards offer the lure of 5% cash back from revolving spending categories. These categories are typically set by the issuer every quarter and are usually released a few months before the new quarter starts. Five percent back can be a nice haul if youâre able to max out the spending categories each quarter, but it takes a bit of work.
First, you have to register for the bonus categories every three months, and spending in the categories is capped at a set amount each quarter (typically $1,500 in purchases). Since any purchase not in the bonus category earns 1%, you may not be getting the average return you think you are.
Pros:Â These cards allow you to earn cash back at an impressive rate in a variety of different spending categories, which could be ideal for cardholders whose spending varies from month to month. If your spending habits are flexible and you’re strategic about when and where you buy, category bonus cards can offer lucrative returns.
Cons: They can be a headache to keep up with, often requiring you to manually enroll in a category each quarter and track your spending to ensure you’re maximizing your cash back in a given category. You’re also at the mercy of the issuer when it comes to which categories are eligible for bonus rewards, and categories may not line up with your spending habits or may be tough to maximize.
Top cards: Discover and Chase each offer popular category bonus cards, including the Discover it® Cash Back, Discover it® Student Cash Back and Chase Freedom Flex cards.
The Discover 2021 bonus categories have already been released and include grocery stores, gas stations, wholesale clubs, restaurants and online shopping at stores like Amazon, Target and Walmart. Chase Freedom Flex bonus categories, on the other hand, are only announced on a quarterly basis.
The U.S. Bank Cash+ Visa Signature Card is a variation on the rotating bonus category theme, but the cardholder picks the bonus categories that will earn the most cash back for the types of purchases they make most.
See related:Â Chase Freedom Flex vs. Discover it Cash Back
Tiered rewards cash back cards
Overview: Like category bonus cards, tiered rewards cards offer more cash back in select spending categories, but to maximize your earnings you have to think about which card to use with each purchase.
For example, Feldman puts all his business expenses on his tiered rewards American Express SimplyCash Plus business card and his own personal expenses on a Citi® Double Cash Card that delivers a flat 2% (1% when you buy and 1% as you pay for your purchases).
His Amex business card rewards 5% on office supply stores and wireless telephone service, 3% on gas (cardholders choose from eight categories for this tier) and 1% on everything else.
At the end of each year, Feldman calculates the rewards delivered on the total amount he spent. He says both of his cards end up delivering the same cash back on average.
âThe Amex works out to about 2%, maybe slightly under,â Feldman says. âI just donât spend enough on office supplies to max out that 5% category.â
âCould I get back another couple dollars at the end of the year by using a credit card targeted to each category of my spending?â Feldman asks. âItâs possible, but Iâd have to think about which card to use every time I made a purchase and that would make my life crazy.â
Pros: Tiered rewards cash back cards may offer a bit more consistency than category bonus cards, as bonus categories are the same year-round. You’ll know before you apply if an elevated rewards rate in a given category like travel or dining makes sense based on your spending, and you can pair a tiered rewards card with a flat-rate card to ensure you’re maximizing your earnings.
Cons: These cards tend to earn a low rate on general purchases, and people often overestimate how much they spend in a given category, like gas or airfare. You’ll have to take a close look at your spending habits to determine whether a tiered bonus category card really makes sense for you or if you’d be better off with a card that earns the same flat rate in cash back on every purchase.
Top cards: While the best choice for you will depend on how you spend, one of our top picks is the Blue Cash Preferred® Card from American Express, which offers 6% cash back at U.S. supermarkets (up to $6,000 in purchases per year, then 1%), 6% back on select U.S. streaming service subscriptions, 3% cash back at U.S. gas stations and 1% cash back on all other spending.
Supermarket purchases make up a big chunk of the average person’s spending habits, so a card that offers bonus rewards in this category should be useful to the majority of cardholders.
Flat-rate cash back cards
Overview: With simple cash back cards, also called flat-rate cash back cards, you earn a flat percentage with every purchase. Thereâs no need to track and activate bonus categories. You earn the same cash back on every purchase.
Mahoney carries the Bank of America® Travel Rewards credit card which earns 1.5 points per dollar (effectively 1.5% cash back) plus a 75% bonus for being part of the bankâs Preferred Rewards Platinum Honors program.
âThatâs effectively 2.625% cash back*,â Mahoney says (2.625% cash back referencing 1.5 points per dollar plus 75% boost for Preferred Rewards program). âThe caveat is the cash back must be used as a reimbursement for travel purchases**, but lots of things count for that, even Uber and Lyft.â
Feldman recently switched from the Capital One Quicksilver Cash Rewards Credit Card, which offers 1.5% cash back, to the Citi® Double Cash Card, which earns up to 2% cash back (1% when you buy and 1% as you pay for your purchases).
Why did he switch? â2% is better than 1.5%,â he says.
Also, âI miss the convenience of being able to log in and get my rewards in one sweep or set it up for an automatic $25 or $50,â he adds. âI like to cash in my points immediately so I donât forget about them.â
Frequent-flyer expert Gary Leff likes the Fidelity Rewards Visa and Citi Double Cash cash back cards.
With the Fidelity Rewards Visa, cardholders earn 2% on all purchases, but you need to be a Fidelity account holder with excellent credit to qualify for the card.
âMost people arenât going to beat 2% cash back, even with travel rewards,â says Leff, who blogs at View from the Wing.
Pros:Â You won’t have to track spending or enroll in bonus categories. You can simply use your card for every purchase and rest assured you’re earning cash back at a consistent rate. This makes flat-rate cards ideal for those who want to avoid the hassle of juggling multiple cards or someone who’s looking to supplement their current tiered rewards or category bonus cash back card.
Cons: While these cards offer consistent rewards on every purchase, you may be missing out on bonus rewards in a category of high spend, like groceries or dining.
Top cards:Â A top pick in this category is the Citi Double Cash card, as it offers one of the highest flat cash back rates available, charges no annual fee and can pair with a premium Citi card to make earning travel rewards a breeze. It also encourages responsible card use by only giving you the second 1% back once you’ve paid off your purchases.
Types of cash back cards compared
We ran the numbers to see how flat rate, category bonus and tiered bonus cash back earnings would break down based on an average Americanâs spending (drawn from a Bureau of Labor Statistics consumer expenditures survey):
2% flat percentage
5% category bonus*
6% tiered bonus**
$21,897*** at 2%
$14,645 at 1% ($14.65)
$16,596 at 1% ($16.59)
$6,000 at 5% ($300)
$4,464 at 6% ($267.84)
$437.90 in cash back per year
$314.65 in cash back per year
$284.43 in cash back per year
* This assumes the category bonus cardholder maxes out the $1,500 in qualified quarterly spending, which is difficult to do every quarter.
** The Blue Cash Preferred from American Express offers 6% cash back at U.S. supermarkets and other tiered rewards, so total cash back will be higher.
*** This includes expenses on food, gas and oil changes, vehicle expenses, apparel and services, entertainment and other expenditures
â CreditCards.com research, March 2020
How to choose a cash back credit card
Which cash back card is right for you depends on how much thought you want to put into which card to use where.
While some cash back cards offer outsized bonuses on specific types of purchases or in rotating bonus categories, you’ll have to remember to use the right card at the right time and place. Not only will you need to pay attention to your account to see how your issuer categorized your purchase, but you may also need to manually enroll in a bonus category each quarter to reap the benefit of certain cards.
This makes such cards less than ideal if you’re looking for more of a “no-fuss” way to earn rewards. Additionally, most tiered and category bonus cards only get you 1% cash back on general purchases. This means that unless you spend heavily in a card’s bonus categories, you could be missing out on maximizing rewards on the majority of your spending.
Flat-rate cards, on the other hand, may offer a lower rewards rate in a specific category like dining or groceries, but will help you score extra rewards on general purchases that don’t fall into a specific category, boosting your average cash back rate overall. This is why it’s also worth considering pairing a flat-rate cash back card with a tiered bonus card that fits your spending habits.
Bottom line
Whether you opt for a flat-rate, tiered rewards or category bonus cash back card, you can enjoy earning cash back on all (or nearly all) of your purchases, often with minimal effort.
You may be surprised at just how much 1% or more cash back adds up to at the end of each month. Just be sure to take a close look at your spending habits and each issuer’s terms to be sure the cash back card you’re considering is a good fit for you.
*2.625% cash back referencing 1.5 points per dollar plus 75% boost for Preferred Rewards program.
Love it or hate it, many Americans are spending more time at home. The coronavirus pandemic not only accelerated the work-from-home trend to warp speed, but it also shuttered schools and summer camps, scratched travel plans and canceled brunch and dinner reservations across the country.
Jen Dawson, a certified financial planner and managing director in Chicago, found that the uncertainty and stay-at-home lifestyle created by the pandemic prompted her clients to look at their financial situations in a new light.
âI think it just gives opportunities for people and families to reflect,â Dawson says. ââWhat do we want out of life? What do we want from our money?â Those conversations are really valuable.â
As Dawsonâs clients reflect on their goals, they (and many others) are also wondering, âHow should I adjust my household budget if weâre spending more time at home?â
How to optimize your budget for the stay-at-home economy in 4 steps
Ellen Rogin, a former wealth advisor and now a speaker, author and entrepreneur, notes that people across the country were affected by the pandemic in very different ways. While many workers were able to keep their jobs as they transitioned to working from home, many were not.
âThere are people who have lost their jobs and are being forced to make difficult decisions,â Rogin says. âAnd there are people who are still employed and earning the same income they did before, who have more options as they decide how they’re spending their money now.â
Even if youâve been spared serious financial challenges, you should still consider updating or creating a household budget or spending plan. This will allow you to determine how to save more money in the stay-at-home economy.
Rogin and Dawson encourage you to use this opportunity to ensure youâre at least staying on track to meet your savings goalsâand at best, shortening your savings timelines. Itâs also a chance to make sure that your spending habits, which have likely changed as youâve spent more time at home, are maximizing your happiness.
Below, we break down insights from Rogin and Dawson into four actionable steps you can take to save money in quarantine while living the best life possible. It all starts with taking an objective look at how your spending habits changed as you transitioned to a more domestic lifestyle.
Read on to see how to save more money in the stay-at-home economy by creating a new household budget:
1. Compare your spending trends before and during quarantine
As you set about creating a household budget for an at-home lifestyle and determining how to save more money in the stay-at-home economy, start by reviewing your spending.
âMost people donât really know how much money theyâre spending, whether times are good or bad. But it can really make you feel calmer to know what it takes to run your lifestyle.â
Dawson encourages you to refer to your debit and credit card statements to analyze the differences between your spending before staying home became the norm, and after. âYou can compare it and contrast and have observations and discussions around what changed,â she says. âWhat do you like that you want to keep going, and what do you not like about it?”
All you need, Dawson says, is a spreadsheet to total up your major expenses, such as housing, utilities, transportation, food and dining, travel, shopping and entertainment. Then, subtract the sum of those costs from the money you earned (aka income) over the same timeframe.
Do this exercise for three months of spending before quarantine and then again for three months of spending during quarantine. Youâll be able to compare the data to see whether you have more or less disposable income as a member of the stay-at-home economy.
Rogin notes that it can be a little scary to examine your finances like this, but thereâs no reason to feel anxious.
âMost people donât really know how much money theyâre spending, whether times are good or bad,â she says. âBut it can really make you feel calmer to know what it takes to run your lifestyle.â
If you see that your disposable income decreased while in quarantine (or that you no longer have disposable income at all), then youâll need to find ways to cut back on spending if you want to keep your savings goals on track. If your extra cash increased and youâre actually saving more money in quarantine, then you can start to consider how you might hit some or all of your savings goals more quickly.
Either way, you still have work to do as you consider how to save more money in the stay-at-home economy. Rather than focusing on external factors that are out of your control, Rogin and Dawson recommend that, as a next step, you ask yourself what matters most to you.
2. Ask yourself how your spending habits impact your happiness
Rogin considers the distanced, more remote way of life as a chance to reflect on whatâs really important in order to create your household budget. One example she points to is how many people have been cooking at home far more often than they once did.
âMaybe youâre spending more on groceries, but thatâs less than you were spending on eating outâand you enjoy it,â she says. âYouâre spending more time with your family. Youâre eating more healthily. So it gives you the opportunity to really assess your budget in a different way.â
Another example is travel. Rogin says that some people have told her that they really miss it, but others have been surprised to find how happy they are to pump the brakes on their jet-setting ways. In addition to saving money in quarantine from reimbursed travel and no more expensive trips, itâs allowed them to slow down and enjoy their time at home with family.
For her part, Rogin found that she wore the same two pairs of shoes during quarantine because theyâre comfortable, and no one can see them when sheâs video conferencing during work. As a result, Rogin cut this expense from her stay-at-home budget.
Whether youâre facing a cash shortage or surplus from more time spent at home, Rogin says that extending this line of thinking into a âvalues-based spending planâ for the stay-at-home economy will allow you to direct your money to what matters most to you, while diverting funds away from what doesnât.
Once you add up the expenses that are no longer necessary in your stay-at-home budget, itâs time to put that money to work.
Tip: When looking at quarantine spending, donât get too granular
Dawson underscores that evaluating spending patterns can be an emotional exercise. If youâre reviewing your finances with a family member, partner or spouse, try to resist the urge to nitpick every purchase. The trends should be easy enough to spot from a birdâs-eye view.
3. Put your stay-at-home savings toward your financial goals
Dawson and Rogin recommend having a plan when youâre trying to figure out how to save more money in the stay-at-home economy. That plan should include what youâre saving for, as well as where youâll keep the funds as they add up.
Rogin recommends framing your financial goals from a positive angle. For example, when you create a household budget, instead of focusing on cutting spending, you can set a goal for how much extra money you want to save.
If you have children or live with a partner or spouse, Dawson notes that this goal-oriented approach can help get them involved. The objective might be to start an emergency fund to ride out unexpected headwinds. Or, the focus could be on saving up for a big vacation to look forward to when travel restrictions ease.
When deciding where to keep your savings, a standard checking account wonât allow your money to grow like a high-yield online savings account will. Rather than pooling the money youâve saved in quarantine into one account, Dawson suggests opening multiple savings accounts, one for each of your savings goals.
âBe really clear about what each savings account is for,â she says. âThen youâre more likely to fund it.â
Of course, luxury savings goals like a vacation should not take priority over your long-term savings goals, such as retirement or college funds.
4. When saving money in quarantine, remember to support those in need if you can
If you are saving money in quarantine, Rogin suggests considering all the benefits of earmarking extra cash for philanthropic causes. It could go directly to the local small businesses you love that are hurting for revenue. Or it could go to any number of nonprofit organizations that are doing good in the world.
âSo many people are in need now,â Rogin says. âThere are so many beautiful ways that can help you feel like youâre making a difference for people by reallocating some of that money towards causes and people that you want to support.â
How will you start saving money in quarantine?
The stay-at home lifestyle may not have been in your plans, but you have the opportunity to gain control of your finances inside your home by creating a household budget that works for you in this new reality.
When you analyze, assess and optimize your spending and consider how to save money in quarantine, youâll be in as strong a financial position as possible when life gets back to normal.
If youâve been fortunate enough to save money in quarantine, consider starting or adding to your emergency fund. Not sure where to store your savings? Check out the four best places to keep your emergency fund.
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.
The post How to Save More Money in the Stay-at-Home Economy by Focusing on What Matters Most appeared first on Discover Bank – Banking Topics Blog.
If you’re looking for a new bank account that allows you to easily store as well as access your cash, you might be thinking about opening a money market account or checking account. But how do you know which to choose? Decisions, decisions. Both types of accounts have unique advantages, depending on your savings and spending goals.
âThink about how you will be using the money within the account,” says Jill Emanuel, lead financial coach at Fiscal Fitness. “Is this money for daily, weekly or monthly use? Or is it money that will not be needed regularly?”
You’ll probably need a little more to go on before answering the question, “How do I decide between a money market account or checking account?” No worries. Our roundup delves into the features of both types of accounts to help you determine which one could be right for your financial plans, or if there’s room for both in your money mix.
Get easy access to your funds with a checking account
In simple terms, a checking account allows you to write checks and make purchases with a debit card from the money you deposit into the account. That debit card can also be used to withdraw cash from the account via an ATM.
When deciding between a money market account or checking account, Emanuel says most people use a checking account for the primary management of their monthly income (i.e., where a portion of your paycheck is deposited) and daily expenses (often small and frequent transactions). âA checking account makes the most sense as the account where the majority of your transactions occur,” she adds. This is because a checking account typically comes with an unlimited number of transactionsâwhether you’re withdrawing cash from an ATM, transferring money to a savings account or swiping your debit card.
While a checking account is a good home base for your finances and a go-to if you need to easily and quickly access your funds, this account type typically earns little to no interest. Spoiler: This is one key difference when you compare a money market account vs. a checking account.
âIf you plan to use your account for monthly bill payments and day-to-day transactions, you would be better suited with a checking account, as these support daily and frequent use.â
Grow your balance with a money market account
When you’re comparing a money market account vs. a checking account, think of a money market account as a savings vehicle that allows you to earn interest on the balance you keep in the account.
“A money market account is an interest-bearing bank account that typically has a higher interest rate than a checking account,” says Bola Sokunbi, certified financial education instructor and founder of Clever Girl Finance.
With some money market accounts, you can even earn more interest with a higher balance. Thanks to its interest-earning potential, a money market account can be the way to go if you’re looking for an account to help you reach your savings goals and priorities.
If you’re deciding between a money market account or checking account, you may think that a money market account seems like a typical savings account with your ability to earn, but it also has some features similar to a checking account. With a money market account, for example, you can withdraw cash from an ATM and use a debit card or checks to access money from the account. There are no limits on ATM withdrawals or official checks mailed to you.
Before you decide to use this account for your regular bills and your morning caffeine habit, know that federal law limits certain types of withdrawals and transfers from money market accounts to a combined total of six per calendar month per account. If you go over these limitations on more than an occasional basis, your financial institution may choose to close the account.
Don’t need regular access to your funds and want your money to grow until you do need it? Then the benefits of a money market account could be for you.
Deciding between a money market account or checking account
Still debating money market account or checking account? Here are some financial scenarios to help you determine which account may best suit your current needs and goals:
Go with a checking account if…
You want to keep your funds liquid. If you’re thinking money market account or checking account, know that a checking account is built for very regular access to your funds. âIf you plan to use your account for monthly bill payments and day-to-day transactions, you would be better suited with a checking account, as these support daily and frequent use,” Sokunbi says. Think rent, cable, utilities, groceries, gas, maybe that morning caffeine craving. You get the idea.
You want to earn rewards for your spending. When you’re comparing money market account vs. checking account, consider that with some checking accountsâlike Discover Cashback Debitâyou can earn cash back for your debit card purchases. The best part is you are earning cash back as you keep up with your regular expensesâno hoops to jump through or extra account activity needed. Then put that cashback toward fun things like date night, lunch at your favorite spot or a savings fund dedicated to something special.
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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
You want to deposit and withdraw without the stress of a balance requirement. If you do your research when comparing money market accounts vs. checking accounts, you’ll find that some checking accounts don’t require a minimum balance (or much of one). However, you may be required to maintain a minimum balance (and potentially a higher one) with a money market account in order to avoid a fee. If you’re accessing your money frequently and need to make large withdrawals, a checking account with no minimum balance requirement is a convenient option.
Go with a money market account if…
You want to earn interest. âIf your money is just sitting there, it should be earning money,” Emanuel says of the money market account or checking account question. âI spoke with a woman recently who told me she’d had around $50,000 sitting in her checking account for at least the last 10 years, if not longer. If that money had been in a money market account for the same period of time, she would have earned thousands of dollars on it. Instead she earned nothing,” Emanuel says.
You want to put short-term savings in a different account. If you have some short-term savings goals in mind (way to go!), you may benefit from keeping your savings separate from your more transactional checking account so you don’t dip into them for a different purpose. That whole out of sight, out of mind thing. âA money market account is the perfect place for money that will be accessed less frequently, such as an emergency fund [a.k.a. rainy day fund], a vacation fund or a place to park money after you’ve received an inheritance or proceeds from selling a home,” Emanuel says.
You need an account to fund your overdraft protection. If you’re comparing money market account vs. checking account, consider that a money market account could also cross over to support spending goals. One way is in the form of overdraft protection. If you enroll in overdraft protection for your checking account, for example, you could designate that funds be pulled from your money market account to cover a balance shortfall.
âA money market account is the perfect place for money that will be accessed less frequently, such as an emergency fund [a.k.a. rainy day fund], a vacation fund or a place to park money after you’ve received an inheritance or proceeds from selling a home.â
Using both accounts to achieve your financial goals
Speaking of crossover. Both spending and saving are vying for your attention, right? Consider leveraging both types of accounts if you have needs from the checking and money market account lists above.
“Personally, I use my checking account for bill payments, my day-to-day spending, writing checks and for any automatic debits I have each month,” Sokunbi says. She’s added a money market account to the mix “because of the higher interest rateâto store my savings for short-term goals, for investing or for money I’ll be needing soon,” she explains. Maybe it’s not about deciding between a money market account or a checking account, but getting the best of both worlds.
Before opening a money market account or checking account, do your research and compare your options to see which bank offers the best package of low or no fees and customer service, in addition to what you need from an interest and access to cash perspective.
The post Money Market Account or Checking Account: Which Is Best For You? appeared first on Discover Bank – Banking Topics Blog.
CIT Bank is an online only-bank, so, unfortunately, they do not have any physical locations.
However, if you’re looking to know how to open a CIT Bank account beyond wondering if they have a location what are their current products and offers, then you have come to the right place.
*TOP CIT BANK PROMOTIONS*
PROMOTIONAL LINK
OFFER
REVIEW
CIT Bank Money Market
1.00% APY
Review
CIT Bank Savings Builder
0.95% APY
Review
CIT Bank CDs
0.75% APY 1 Year CD Term
Review
CIT Bank No Penalty CD
0.75% APY
Review
CIT Bank Locations
CIT Bank has one office. It’s their headquarters located in southern California in Pasadena.
The address is: 75 North Fair Oaks Ave, Pasadena, California 91103. However, you cannot just walk in there to do business, opening an account, etc.
There is also no ATMs. Everything is done online.
With their “echecking” account, CIT Bank will provide you with a card where you can use it at another bank’s ATM.
However, CIT bank does not charge you any ATM fee. And if the bank charges you a fee, CIT Bank will reimburse you up to $15 every month.
CIT Bank’s Products & Current Promotions
While CIT Bank has no physical locations, it’s a great bank for those who are willing to have their savings online.
So, if you’re looking to have access to branches, then CIT Bank is not for you.
CIT Bank offers high yield savings accounts, money market accounts and CD accounts. They also have an “echecking” account.Â
CIT Savings Builder – Earn 0.85% APY. Here’s how it works: Make at least a $100 minimum deposit every month. Or Maintain a minimum balance of $25k. Member FDIC. Click Here to Learn More.
They offer competitive APYs, especially on their Savings Builder account, which is almost 20 times more than what a typical savings account would offer.
The money market account is also very competitive, but it does not offer checking-writing privileges or a debit card.
Their CDs also provide higher yields, offering both a fixed and variable-rate, including a no-penalty CD.
CIT Bank Savings Builder
Because CIT Bank has no locations, CIT Bank Savings Builder accounts are offered online, where you can earn a competitively high yield.
The CIT Bank Savings Builder will allow you to earn 0.85% APY, but only if you make at least one monthly deposit of $100 or more.
Or, if you keep a balance of at least $25,000. Interest in this high-yield savings account compounds daily to boost your earning.
Click here to learn more about CIT Bankâs Savings Builder.
CIT Bank Money Market Account
The CIT Bank money market account is one of the best ones out there. Currently, the money market account offers a 1.0% APY.
This is very competitive comparing to other MMAs. Moreover, CIT Bankâs MMA has a required account minimum of only $100.
Open a CIT Bank Money Market Account.
CIT Bank Certificate of Deposits (CDs)
CIT Bank has several terms CDs, which range from 6 months to 5 years.
There is also a no penalty 11-month term, where customers can withdraw money with no penalty.
CIT Bank also offers jumbo CDs, ranging from two to five years. You can open a term CD, including the no-penalty CD, with a minimum of $1,000.
The Jumbo CDs require a minimum of $100,000.
Click here to learn more about CIT Bank CDs.
Contacting CIT Bank
Given that CIT Bank has no locations, the best way to speak with a representative is by telephone or online.
For online, simply go through their homepage.
By telephone, call 1) 855-462-2652 (within U.S.) and 626-535-8964 (outside U.S.).
Customer service is available from Monday through Friday from 9:00 a.m. to 9:00 p.m. ET; on Saturday from 10:00 a.m. to 6:00 pm ET.
They closed on Sunday.
Advantages and disadvantages of CIT Bank Savings Accounts
Advantages:
No monthly fees on deposit accounts;
a minimum deposit requirement of $100;
Refunds ATM fees â because the bank does not have ATMs, it does not charge customers who use another bankâs ATMs. And if there is a fee, CIT will refund you up to $15 per month.
Disadvantages:
No CIT Bank physical locations or ATM;
No 24/7 customer support â as with all high yield savings accounts, most inquiries are handled online. While live telephone is available, hours are limited.
How to open a CIT Bank Savings account?
As mentioned above, CIT Bank has no physical locations. So to open an account, simply go online through the CIT Bank homepage, and create the account there.
Youâll need to provide your name, address, phone number, and ID. Youâll also need to provide your social security number.
Note that CIT does not have any branches. Everything must be done online.
If youâre opening a CIT Bank Builder Savings account, you will need to make an initial minimum deposit of $100.
Bottom Line
CIT Bank has no locations. So, everything is done online. CIT Bank offers competitive rates on its products. Its Saving Builder account is one of the most popular accounts out there, offering a 0.85% APY. This yield is 15 to 20 times higher than what a regular savings account offer.
Speak with the Right Financial Advisor
If you have questions beyond CIT Bank locations, you can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc). Find one who meets your needs with SmartAssetâs free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.
*TOP CIT BANK PROMOTIONS*
PROMOTIONAL LINK
OFFER
REVIEW
CIT Bank Money Market
1.00% APY
Review
CIT Bank Savings Builder
0.95% APY
Review
CIT Bank CDs
0.75% APY 1 Year CD Term
Review
CIT Bank No Penalty CD
0.75% APY
Review
The post CIT Bank Locations? Where Are They? appeared first on GrowthRapidly.
A Health Savings Account (HSA) is a convenient way to store funds specifically for medical expenses. If you qualify for an HSA, you will get to enjoy a few tax advantages as well. While this might sound like an ideal setup, not everyone is eligible for a health savings account. To qualify for a health savings account, you must be enrolled in a high-deductible health insurance plan (HDHP). The details of these plans are revised every year by the Internal Service Revenue (IRS), which sets the bar for:
The minimum deductible a plan must have to be considered a HDHP.
The maximum amount that a customer who purchases a plan is able to spend out-of-pocket.
The benefits of a health savings account
Here are some of the key advantages of having a health savings account:
It covers a large variety of medical expenses: There are many different kinds of medical expenses that are eligible, such as medical, dental and mental health services.
Pretty much anyone can make contributions: Contributions to your health savings account donât have to be made by you or your spouse. Employers, relatives, friends or anyone who would like to contribute to your account can do so. There are limits, however. For example, in 2019, the limit for individuals was $3,500 and $7,000 for families.
Pre-tax contributions: Since contributions are generally made at your employer pre-taxes, they are not considered to be part of your gross income and are not federally taxed. This is usually the same case when it comes to state level taxes as well.
After-tax contributions are tax-deductible: Any contributions made after taxes are deductible from your gross income on your tax return. Doing so minimizes the amount you would owe on taxes for that year.
Tax-free withdrawals: You can withdrawal money from your account for approved health care costs without having to worry about federal taxes. Most states do not tax, either.
Annual rollover: Any unused HSA funds that are left over by the end of the year get rolled over to the following year.
Portability: Even if you change health insurance plans, employers, or retire, the money in your health savings account will continue to be available for qualifying health care expenses.
Having a health savings account is convenient: Most of the time, you will receive a debit card that is connected to your health savings account. This way, you can use your debit card to start paying for eligible expenses and prescription drugs on the spot.
The drawbacks to having a health savings account
While there are many advantages to having a health savings account, there are a few things to consider. For one, in order to qualify for an HSA, you must hold a high-deductible health insurance plan. The tax benefits might entice you to purposely sign up for insurance coverage under one of these health plans but think before doing this. Here are some of the disadvantages to having a health savings account:
The High-Deductible Health Plan: These types of health plans can end up being a lot more expensive in the long run, even with an HSA. If you have other options for health insurance that offer lower deductible, definitely consider those and donât only choose a High-Deductible plan so that you can open an HSA.
You need to stay on top of your spending: If you have an HSA, you need to be willing to hold yourself responsible for recordkeeping. Keep track of all of your receipts so that you can prove you spent your HSA funds on eligible expenses.
Taxes and penalties: Using money from your HSA on other expenses that do not qualify as eligible health care expenses could result in you owing taxes. If you do this before the age of 65, you will have to pay taxes with a 20% penalty tacked on. If you are 65 or older, you will be responsible for paying taxes, but the penalty gets waived.
Fees: Sometimes, health savings accounts will charge additional fees, either per month or per transaction. Check with your HSA institution for more information on extra fees.
How an HSA works
In many cases, if your employer offers high-deductible health plans, they probably offer health savings accounts as well. Talk to your employer to find out what they offer. If your employer doesnât offer HSAs, then you can sign up for a separate one through a different institution.
You get to decide how much you would like to contribute to your HSA annually, but keep in mind that you cannot exceed the HSA contribution limit. Once you are set up with an account, you will either receive a debit card or a series of checks that are linked to your HSA. Right away, you will be able to use the funds in your account for:
Deductibles
Copays
Coinsurance
Other eligible health care expenses that your insurance does not cover.
Generally, you cannot use HSA funds to pay your insurance premiums. HSAs are not the same as flexible spending accounts, because HSAs rollover. Once you turn 65, you are no longer eligible to make contributions to your account, but you can still use the available funds for eligible out-of-pocket expenses. If you use the funds for non-eligible expenses, you will owe taxes on these amounts.
Investment Opportunities
Another benefit of HSA that you may or may not have heard of is that you can invest the money in mutual funds and stocks. If this is something that you are interested in, seek advice from a financial advisor for more information.
What is a Health Savings Account (HSA)? is a post from Pocket Your Dollars.
Some of us know it as I.R.A while others pronounce it âeye-ruh.â No matter if youâre team âI-R-Aâ or team âeye-ruhâ, you should definitely know what it means!Â
These letters stand for Individual Retirement Account.Â
Donât roll your eyes! I know âretirementâ sounds like something you should only worry about when youâre much older, but I promise, youâll be thankful you learned all about this. Itâll help you learn a couple tips on smart tax moves and ultimately help out your future self!Â
You probably have a bank account where you put your money, right? So this is still relevant to you! Now, the question is: how much is the money sitting in your account growing each year? If youâre lucky, the answer is somewhere around 2% in the year 2020 (for a high yield savings account). But most people donât have that. Most people have a checking account that doesnât pay them any interest at all or a traditional savings account that offers an average of 0.09% in interest per year. That may not sound like a big difference – 2% versus .09% – but trust me: IT IS!Â
The BreakdownÂ
After 10 years of saving $100 every month (or $50 from each biweekly paycheck), a bank account with .09% interest rate or annual percentage rate (also called APR) will have a total of $12,059.56, while a high yield savings account growing at a 2% APR will have a total of $13,402.46. Thatâs a difference of over $1,000 of FREE MONEY! And, whatâs even more eye-opening is that the longer you invest and the more the interest compounds, the bigger the effect. So over a 40 year period of time, which is a typical American working career, the difference is more than $25,000!
What does any of this have to do with that Individual Retirement Account I mentioned earlier? Patience, weâre getting there!
When it comes to money, growth is key. How much can you grow your money in a year? In 10 years? In your working career? With a bank, your money is safe and protected, but it doesnât really grow that much. Thatâs where the stock market comes in! Itâs a good idea to put the money you may need for an emergency into a bank account for easy and guaranteed access, but also consider putting at least 5% of your earnings into an investment account for long term goals such as retirement.Â
For example, a 401k through your job allows you to invest your money in the stock market. If you donât have access to a 401k through your job, then you can open up an Individual Retirement Account (IRA) that also allows you to invest your money in the stock market. Similarly, a pension plan (if you can even get one of those in the 21st century!) also invests your money in the stock market.Â
So why do all of these fancy accounts put our hard-earned money in the stock market? The answer is: over the long term, (not just one year, but over many, many years) the stock market has a history of providing higher rates of return, thereby growing peopleâs money much faster than any bank!Â
When your job doesnât offer any workplace retirement benefits, then you can open an Individual Retirement Account on your own. Let me break down the basics for you:
Who: You!Â
What: Opening an IRA
Where: At a brokerage firm of your choice
When: Anytime you want
Why: Because your money can grow more in an IRA than it would in the bank over the long run
Now, letâs talk about the âhow.â First, choose whether you want to pay taxes on the money youâll be investing when you file your taxes next or if youâd rather pay them in the future when you file taxes for the year you took the money out. That will determine whether you open a Roth IRA or a traditional IRA.
Roth IRA vs. Traditional IRA
Roth IRA: Investment account that lets you put money away for your retirement. Money invested here is after taxes have been paid, so you donât have to worry about paying taxes ever again. Also, any profits you earn over time will never be taxed, and thatâs a BIG deal! Available only if you earn under a certain income level.Â
Traditional IRA: Investment account that lets you put money away for retirement, but claim a tax break on the amount invested when you file your taxes. Since you get a tax break now, when you take the money out in the future youâll have to pay taxes on your invested dollars and the profits earned. Available no matter what income level you fall under. Â
People who earn too much money for a Roth IRA tend to choose a traditional IRA (the limits for how much you can earn to have a Roth IRA changes every year.) Also, people who predict that they will earn less money in the future (at retirement) also like to choose a Traditional IRA because they like the idea of paying less in taxes as a result of being in a lower tax bracket.Â
Once youâve chosen the IRA type that you prefer, youâre ready to choose a brokerage firm. Choosing a brokerage firm is similar to choosing a bank. Make sure that you know what the fees are, what the customer service experience is like, what account types they offer, and what in-person versus web-based services or platforms they have. You can call them up or go online and create your account. Heads up: Youâll have to link the investment account (the IRA) to your bank account so that you can transfer money and begin to invest in the account you created.Â
What Do I Put Into My IRA?
Now, the toughest question of them all: What investments do I invest the dollars within my IRA into? The short answer is that it really depends on what your goals are. If youâre not trying to retire anytime soon, then you can afford to be risky. You can have mostly stocks and little to no bonds in the IRA. If you plan on retiring very soon, youâll want to make sure you have most of your money in more secure investments that donât change unpredictably in the market, such as bonds. The general rule of thumb when it comes to deciding how much to put in stocks versus bonds looks like this:Â
120 – your age = percentage of investment that should be stocks
So for example, A 30-year-old in 2020 should have 90% stocks in their IRA and 10% in bonds because 120 – 30 = 90.Â
Keep in mind that this can vary if youâre comfortable being more aggressive (more stocks) or more conservative (more bonds) with your investments. Itâs simply a good rule of thumb to get you started.Â
One final analogy to help you remember how this works, and then youâre on your way! The brokerage firm is kind of like your bank. Itâs where you open the account and do business. Your IRA is like the type of account you open at that bank. It has rules you need to follow and the rules change each year, so do your research. (When can you touch the money? How much money are you allowed to invest per year? Are there income limits on this account?) If you break the rules, then you may pay fees or maybe even penalty taxes. So make sure you understand the rules!Â
Stocks, bonds, mutual funds and ETFâs are what your dollars can buy and are held within the account. Finally, the annual rate of return is like your APR. While at the bank, the rate of growth or APR is offered to you upfront, thatâs not really possible with an IRA or any other investment account because the stock market is highly unpredictable. But remember, historical data shows that it averages much more growth than bank accounts do over the long run, so donât be afraid to put money aside for the long term if you can afford to.
Now, off you go! Youâre ready to open that IRA if you donât already have one!Â
The post IRA: #RealMoneyTalk, What Is That? appeared first on MintLife Blog.
