Category: Financial Wellness

13 Ways to Save Money on a Tight Budget

If you’re one of the many Americans living paycheck to paycheck since COVID-19 struck, you likely haven’t thought much about saving for the future over the past 12 months. And you may be wondering how to live on a budget and save money at the same time. Believe it or not, there are many ways to save money on a tight budget without impacting your ability to pay your bills or put food on the table. 

Every donut lover knows the value of a baker’s dozen, so grab a cup of coffee (brewed at home to save money, of course) and sit down to discover 13 deliciously simple ways to save money on a small income.

1. Save First, Spend Second

As you make, revisit and revise your monthly budget (and yes, you should have a monthly budget — here’s how to budget and save money on a small income), first put down the amount you want to save each month. Do this before listing your rent or mortgage, before the car payment and streaming services, and even before the amount you plan to spend on groceries. This way, instead of saving only if there’s money left at the end of the month, you’re making saving a priority. By adjusting your spending accordingly, you’ll be more likely to actually save money each and every month. 

2. Make Your Coffee and Tea at Home

A box of high-quality green or English breakfast tea costs about $6 for 50 bags. That’s 50 cups of tea for the equivalent of just two from a coffee shop! Making your own coffee and tea at home could easily save you hundreds of dollars each month — that’s money that can be saved! Getting into the habit of making your hot morning beverages at home instead of paying for them through the drive-thru is one of the first ways you can save money on a budget.

3. Take the Pantry Challenge

At least one day each week, go without spending any money on food or beverages by using only what’s already in your pantry (and freezer/fridge) to prepare breakfast, lunch, dinner, snacks and dessert for you and your loved ones. Not only will this challenge free up money to be saved instead of spent, it will help you become resourceful and self-sufficient in the kitchen, and potentially eliminate food waste, all of which could have positive long-term impacts on your budget. 

4. Round-up Savings

One of the clever technological tricks to saving money without realizing it or feeling its impact in your checking account is to take advantage of round-up savings. Often called microsaving, your purchases are rounded-up to the nearest whole dollar and, whether through a third-party savings app (note: beware of monthly fees for these services) or through your own bank, like Bank of America’s Keep the Change Savings Program, watch as that spare change is deposited directly into a savings account. Rounding up is one of the simplest ways to save money on a tight budget. 

5. Lose Your Loyalty

Being brand loyal can cost you extra money at the grocery store. Instead of paying top dollar for your favorite brands each week, only buy them when they’re on sale. During non-sale weeks, buy what is discounted. You’ll save money and may just find new favorites in the process!

6. Adjust the Temperature

Small tweaks to your home’s temperature can dramatically reduce your utility bill. According to the U.S. Department of Energy, you can save as much as 10 percent per year on heating and cooling by simply turning your thermostat back 7 to 10° for eight hours a day from its normal setting. So put on a sweater and your favorite fuzzy socks, and invest in a programmable thermostat, because this is how to live on a budget and save money every month!

7. Make the Movie/Game an At-Home Event

If you have a sizable flatscreen TV at home, it’s likely that watching a new movie, concert or your favorite team’s game from the comfort of home will actually be more enjoyable than lining up to get into a theater, stadium or arena (once we’re able to do so again). One thing’s for sure, it’ll certainly be cheaper! You’ll pay no parking fees, buy no overpriced drinks and food, and of course, no expensive tickets are required. Pop some popcorn, prepare a cheese and cracker board, and put out a hummus and veggies platter, because enjoying movies, concert streams and sporting events at home is one of the easiest ways to save money on a tight budget.

8. Choose Filtered Over Bottled Water

Not only will this decision help save the environment, it’ll also save you money. A simple pitcher with replaceable filters and a reusable bottle will go a long way toward keeping your beverage costs down from month to month. Additionally, consider drinking more water and less soda to become healthier physically and financially!

9. Get Thrifty

Local thrift stores are overflowing with barely used jeans, cute sweaters, comfy shorts, gently worn sneakers, like-new accessories and so much more. Starting to buy some of your own, but especially your still-growing kids’, clothes and shoes secondhand for 25–50% of the cost of purchasing them new is sound advice for budgeting on a low income.

10. Make Saving a Weekly Challenge

PNC Bank suggests that if you’re looking for ways to save money on a tight budget, make saving a challenge by slowly increasing (or decreasing) the amount you put away each week. For example, put $1 in savings during the first week of January. The second week, make it $2, and so on. Doing this for 52 weeks straight will result in a whopping $1,378 saved! Or, if you want to start strong, reverse the challenge by putting $52 into savings the first week of the year, followed by $51, $50, $49 etc. This method will free up money at the end of the year when you’ll likely be doing some holiday shopping.

11. Use Cashback Apps

When you’re trying to figure out how to live on a budget and save money at the same time, you should check to see if stores participate with a cashback app or service, like Rakuten, before buying anything online. It may only be 1% or 2% back on your $25 purchase (although depending on the store and the day, it could be upward of 10–15%) but just like putting nickels, dimes and quarters into a piggy bank, your cashback savings will grow steadily. Every three months, when you get a check (or Paypal), that could be a substantial amount of money to put away into your savings account. 

12. Consider Your Streams

Once upon a time, consumers wished they could pay for an a la carte cable TV package to save money and only have the channels they wanted to watch. That day arrived, sort of, but chances are you’re paying more to watch TV than ever before. This is because most people now pay for four streaming services each month, with 38% of Americans using five or more according to a Los Angeles Times report. And all that could be in addition to a cable package so many wanted to be rid of in the first place! 

The result is likely a personal budget straining to cope with the costs of television in 2021, and a lack of money being saved. One of the ways to learn how to live on a budget and save money is to consider your streams. Really think about what you actually watch and which streaming services can be canceled or at least paused while you build up an emergency savings fund, which could have been one of your financial New Year’s resolutions.

13. Save Your Tax Refund

Finally, if you’re getting a tax refund this year, make a plan to put it directly into savings. Even if you’ll need to use some of it to pay down debt or buy a new car, make sure it goes into savings first. This is because simply seeing that account balance rise, and feeling the emotional satisfaction of having money saved, may just be the impetus for a continued commitment to making saving money a part of your everyday life.

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The 9 Best Ways to Use Your Stimulus Check

Now that the $1.9 trillion American Rescue Plan has been signed, money from the third round of COVID-19 stimulus checks is arriving in millions of bank accounts. In this post we’ll look at how you might consider using your stimulus check. But first, let’s answer the one question you may be asking about the new economic relief package.

Do You Have to Pay Back the Stimulus Check?

As with the previous two rounds of COVID-19 stimulus checks, you do not have to pay back this money. These funds are not a loan or an advance on future tax refunds. This is stimulus money to help you with your financial needs and hopefully invigorate the economy. Additionally, this new stimulus check is not taxable, so there will be no unpleasant surprises caused by these funds when you file your taxes in 2022. Of course, it’s always best to consult with a tax professional about the impact of the economic stimulus checks on your specific tax situation.

The 9 Best Ways to Use the New Stimulus Check

If used wisely, money from the latest economic stimulus might help you accomplish a number of goals, both immediate and longer term. This is especially true if you’re no longer in dire straits by the time the new COVID-19 stimulus check arrives in your checking account.

With this extra money, up to $1,400 for individuals based on income levels from your most recent tax filing, you might add to or start a savings account and take care of yourself and loved ones who have been through a difficult 12 months. You could also consider using some of your stimulus check to pay down debt, shop at local small businesses and make a positive impact on your community’s most vulnerable residents. If managed correctly, you could accomplish all of the above and more with your COVID-19 stimulus money.

1. Use Your Stimulus to Stay Afloat

It’s possible that you’re still behind on important bills because of the pandemic that prompted this third round of economic stimulus checks. Maybe rent is overdue or a utility bill needs to be paid. There’s no shame in this — the past 12 months have challenged nearly everyone in one way or another — but you will now have up to $1,400 to square what you owe and plan for the future.

2. Pay Off Debt with Your COVID-19 Stimulus Checks

If you have an outstanding balance on a credit card charging you a high rate of interest, a payday loan or other bills weighing you down month to month, using your stimulus money to pay them down could be the best use of your portion of the American Rescue Plan. 

Pay down the balance of your highest interest debt first. If you can pay it off in full, that’s even better. But if not, consider a debt consolidation loan at a lower interest rate. Once paid off, consider closing your high-interest credit card in favor of one with a more favorable interest rate and no annual fee.

3. Put Your Stimulus Check Toward Creating an Emergency Fund

Most Americans were taught a valuable financial lesson in 2020: It’s crucial to have money set aside in an emergency fund. A ‘rainy day’ savings account can help you and your family in the event of unexpected financial struggles, a job change or, as we’ve seen, a global pandemic. As you decide how to use your stimulus check, be mindful that the longer you wait to transfer the money from your checking account to your savings, the more likely you are to dip into it.

4. Take Care of Your Mental Health

If you’ve been needing or wanting to try therapy but couldn’t afford it because therapy is not covered by your health insurance, put your stimulus to work to improve your mental health. You can schedule an appointment with a therapist in person or schedule a virtual service to stay socially distant while seeking the help you deserve. 

5. Schedule Your Overdue Car Repairs

If you’ve been ignoring that pesky check engine light, putting off overdue oil changes or delaying other critical automotive work, think about using a portion of your stimulus money on repairing your ride. Scheduling the repairs your car has needed during the pandemic might end up saving you a lot of money down the road.

6. Put Your Stimulus Check to Work in Your Community

Understandably, philanthropy and charitable giving has dipped as Americans who would usually be generous with their disposable income have found themselves struggling to make ends meet and suffering through furloughs. With this new batch of COVID-19 stimulus checks, you may be in a better position to make a big difference.

There’s probably a cause or two near and dear to your heart, maybe even near you in your local area. And chances are, they could use some support right now. So, whether that’s buying canned goods for a local food bank or donating cash to the animal shelter you once adopted your pet from, using a bit of your stimulus check to do good will make you feel better today and may just help you during next tax season too (because most charitable giving is tax deductible).

7. Invest in Yourself

Thinking long term, one of the smartest ways to use a stimulus check could be investing in yourself through a degree program or going to school to gain a new skill. Additionally, making this investment in your future may have future tax benefits, too, through the Lifetime Learning Credit. 

According to the IRS, “the Lifetime Learning Credit can help pay for undergraduate, graduate and professional degree courses — including courses to acquire or improve job skills.” This credit is worth up to $2,000 per tax return and there’s no limit on the number of years you can claim it.

8. Start a Business

As you’ve been home during COVID, did you start a new hobby or find yourself crafting to pass the time? Maybe those new passions could become a viable side hustle or even full-time job now. Not only did 2020 see the largest increase in new business applications in 13 years; it also saw a 61.7% increase in the number of Etsy sellers from the year prior. 

Your COVID-19 stimulus could be the seed money you require to launch a business on Etsy or invest in equipment to record a podcast, monetize it and take it to the next level.

9. Treat Yourself with Your Economic Stimulus Money

Buying that beautiful new watch or having lunch in the independent restaurant that pivoted to curbside pickup to stay in business during the past year may seem frivolous but doing so will actually accomplish two crucial things. 

First, self-care is important. You may feel lighter and happier, and after what we’ve all been through, that’s a valid desire. 

Second, you will be putting stimulus money into the local economy, which will help businesses, keep people employed and maybe someday soon encourage hiring, and give America the boost lawmakers are hoping for with the new round of economic stimulus checks. 

Read more: 11 Ideas for What to Do with Your Tax Refund this Year

How to Save for Retirement at Any Age

When you talk to people about how to save for retirement, you’ll likely hear one of three things… I’m too young to worry about retirement. I’m too old to start. I’m already saving.

Aside from the final reply (well done!), such thoughts are incorrect but sadly all too common. People just starting on their employment journey, with an employee’s 401(k) plan and company match available to them, often don’t consider their financial situation in 30–40 years time. When you’re young, though, your money has more time to grow, making those years the very best to save! Meanwhile, older folks who have not been saving or not saving enough for retirement tend to believe that they’ve missed their opportunity to build a nest egg. 

The truth is that it’s never too early to start saving for your retirement and never too late to catch up and secure your financial future.

Important Facts About Retirement Income

  • Americans are living longer than ever before. While good news, this likely means you’ll need to have more saved to generate enough retirement income, and for a longer period of time, than you may currently imagine in order to maintain your quality of life once you stop working. 
  • While once a reliable source of retirement income, Social Security benefits alone will probably not be enough to ensure a comfortable retirement. For this, you’ll need a supplemental source of income.
  • You shouldn’t count on Medicare to fully cover the costs of assisted living or a nursing home, should you need those services later in life.
  • According to 2020 research by Investopedia, almost half of all Americans have no retirement savings whatsoever. This means that, sadly, half of the population may never be able to stop working. 

These facts make it imperative you know how to save for retirement and start saving as soon as possible, no matter your age, so that you can enjoy your later years.

Types of Retirement Accounts

Before we talk about how to save for retirement, let’s take a look at the two most commons types of accounts with which you can put money aside now to let grow. 

Employer-Sponsored Plans

The two most common employer-sponsored plans are 401(k) and 403(b). The former is offered through for-profit companies while the latter is associated with universities, hospitals and other non-profits. With each, employees have the opportunity to save a percentage of their pre-tax paycheck, which not only grows tax deferred via contributing to a 401(k) or 403(b) pre-tax, but also reduces your taxable income. This means that while you may see a $25 contribution deposited into your 401(k) on payday, for example, less than $25 will be ‘missing’ from your take-home pay because you’ve paid less in taxes. 

Many employers offer a matching contribution (or matching up to a certain percentage) to encourage participation in their retirement plan and help accelerate savings growth. Most people should not only be enrolled in their company’s 401(k) but take full advantage of any available match. And the earlier you start, the more money you’ll have saved for retirement.

In 2021, the maximum amount you can contribute to your 401(k) plan in dollar terms is $19,500. But don’t let this figure scare you away from starting. Any portion of your paycheck that you can direct to your retirement will benefit you later in life. 

According to a 2020 TDAmeritrade Report, company 401(k) plans are the preferred investment vehicle for workers between the ages of 40 and 60. 

*There are also solo 401(k) plans available to self-employed individuals. These plans are designed to help business owners save both as the employee and employer.

Individual Retirement Accounts (IRAs)

IRAs are tax-advantaged accounts that you open on your own, not through an employer. Typically, you’ll save money for retirement in an IRA through investment firms (the money invested in a combination of stocks, bonds and mutual funds of your choosing) or a bank (the money saved in a certificate of deposit or similar interest-bearing bank product).  

There are two main types of IRAs: traditional and Roth. The biggest difference between the two is when you pay taxes.

With traditional IRAs, the amount you contribute is tax deductible. Only when you start withdrawing money during retirement is the original money plus any earnings taxed as ordinary income.

The opposite is true with Roth IRAs. Your money is contributed ‘after tax,’ meaning there’s no tax deduction or tax benefit today. But, qualified withdrawals of the original money you contributed plus any earnings are tax-free when withdrawn after age 59½ and when it’s been at least five years since you first contributed to the Roth. Additionally, you always have access to your original Roth IRA contributions, with withdraws available for any reason, and at any time, with no taxes or penalties.

For the 2021 tax year, you’re able to contribute up to $6,000 to an IRA if age 49 or under — slightly more if you’re over the age of 50. Read on to discover this benefit of saving for retirement later in life.

How to Save for Retirement at Any Age

The best way to learn how to save for retirement is to start now, regardless of your age. Through a company’s 401(k) or 403(b)(7) plan, you can begin with just one or two percent of your pre-tax salary and set an automatic increase every year. Although, if you’re able, you should contribute enough to get the full employer match (if offered) right away.

The Benefits of Starting Young

Compounding interest and earnings — the concept of your earnings generating additional money, and those new earnings generating even more, and so on — make the first dollars saved possibly the most profitable because that money has longer to grow and multiply. These early retirement contributions will likely have the biggest impact on your ability to comfortably retire. 

To put this in real terms, a 25-year-old who invests $75 per month could accumulate upward of $113,000 more in retirement savings by age 65 than if he or she started investing $100 per month at age 35 — despite investing less each period, according to Merrill Edge. That’s the power of starting early and watching those dollars compound over those extra years. And this growth on top of growth can help you hit your retirement savings goals more easily.

Here’s how much Fidelity Investments says you should have saved for retirement at every age, in order to maintain your current quality of life into your retirement years:

  • By age 30: The equivalent of your annual salary (For example, if you make $55,000 a year, you should have $55,000 saved by your 30th birthday.)
  • By age 40: Three times your income
  • By age 50: Six times your income
  • By age 60: Eight times your income
  • By age 67: 10 times your income

Despite this, 28% of people in their 60s have less than $50,000 saved for retirement, meaning over a quarter of older Americans likely won’t get to slow down and enjoy what should be their retirement years. 

The Benefits of Saving Later In Life

Current laws governing employer-sponsored retirement plans allow you to contribute an extra $6,500 each year to your 401(k) or 403(b) plan if you’re age 50 or older. With these catch-up contributions, the individual limit increases to a maximum of $26,000. If you can afford it, taking advantage of these higher limits will allow you to boost your savings.

Those age 50 and older are also permitted to contribute extra money to IRAs each year, with the limit increasing to $7,000 for 2020 and 2021. You’re also able to contribute to an IRA for the previous tax year up until the current year’s tax filing deadline date to get another deduction before filing, if needed. Keep in mind that for specific questions or concerns about filing taxes and available deductions, it’s best to consult a trusted tax professional.

No matter when you begin your retirement savings journey, it’s critical that you do so. Maybe you can consider adding another new year’s resolution to start (or start saving more) for your retirement. Making the accumulation of tax-deferred or tax-advantaged money for retirement a priority throughout your life will help ensure you’re able to enjoy your later years and that you’ll be taken care.

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Better Money Habits: 9 Steps to Developing a Positive Money Mindset

How do you feel about money? Do you feel anxious, overwhelmed or at ease when it comes to your bank account balance, monthly budget and ability to save for your future? The answers to these questions make up a part of your overall money mindset. 

It’s important to have a positive money mindset because it may help decrease stress and improve your overall well-being. It’s also the first step to becoming financially secure today and in the future. Creating a healthy mindset starts when you set goals, develop better money habits and define where you want to go financially. 

Here are 9 steps you can take to develop better money habits starting today.

1. Visualize Success

What works for athletes and other highly successful people can work for you and your money habits, too. Visualizing accomplishments is the first step in going from having bad money habits to creating a positive money mindset and achieving financial well-being. Here are some things you can visualize before actualizing:

  • There’s a four-figure balance in your savings account … and it’s growing!
  • Your highest-interest credit card is paid off — that zero balance is going to feel amazing!
  • You have extra money at the end of each month to be charitable.
  • A comfortable retirement will be a reality because the balance in your 401(k) is growing with your contributions and the maximum employer match available.
  • There’s money each month for self-care so that you can get your nails done, play a round of golf, or even buy simple things like a new bath bomb or scented candle to enjoy at home.
  • You’re on vacation at a beautiful resort that you saved for and paid for in full.

2. Be Hungry to Learn

No matter how you learn — by doing, listening or reading — there are plain-talking financial experts who share their wisdom for free. Absorbing this kind of knowledge regularly can help you develop better money habits. From personal finance websites and budgeting worksheets for good money habits to the Prosper blog and money-themed podcasts, there’s a wealth of information available to enhance your budding positive money mindset. 

Some other resources you might consider include:

3. …But Not Hungry to Eat Out (Or Often)

Is it old fashion? Yes, but eating breakfast at home, making your own coffee, and packing a lunch and snacks are some of the things that successful people with good money habits do regularly. This doesn’t mean you can never go out to eat with friends or coworkers, but when you make your own meals and brew your own coffee or tea more often than not, you will save a lot of money and be more financially well-off than ever before. 

4. Log Into Your Financial Accounts Every Morning

It’s a small step while the coffee is brewing, but as they say, knowledge is power. Every morning, bring yourself up to speed on your bank account and credit card balances. In a spreadsheet, keep track of the money coming, going and due. Doing so will eliminate surprises, reduce stress and give you a clear financial picture to start each day. This quick and easy routine will go a long way to helping you make better decisions and developing a positive money mindset.

5. Weigh Every Decision

It may seem obsessive, but when you think about it, nearly every decision you make has the ability to affect your financial life. This is one of the reasons setting a rolling three-month budget can be helpful. When you know that sticking to your budget means you’ll have a certain amount to put into your savings account in two months’ time, you’ll start to question whether you really need to spend extra money on this or that today. 

For example, you’re walking down the street and see a tempting fruit smoothie sign in a cafe window. You want one but it’s going to cost more than $6 and you have frozen fruit in your freezer and that blender you bought months ago is still sitting in your cabinet. That $6 might not seem like a big deal, but if you spend an extra $6 four times a week, that’s nearly $100 a month and $1,200 a year that could have been saved. Think about where you could go and what you could do with that money. When you consider every financial decision, you’ll develop better money habits, and better understand the value of a dollar and its impact on your money mindset. 

6. Save First, Spend Later

People with positive money mindsets and better money habits don’t make savings the last item on their budget, only to be added to if there’s money leftover. Instead, put your savings goals first and foremost, and adjust the rest of your life accordingly. Do you want to buy a house or car, take that dream vacation or build an emergency fund? Great! Dedicate money every month to those savings goals first, then list all your fixed debt obligations (rent, car payment, groceries, utilities, internet and phone bill, etc) before finally seeing how much you have left for takeout and extraneous spending. 

7. Spend and Shop Smarter

One of the better money habits you can have is to shop and spend smarter for everything you want and need. This means using coupons at the grocery store, comparison shopping online for bigger ticket items, and checking the cashback available through sites like Rakuten before you buy … pretty much anything. Not only will this extra ‘effort’ while shopping save you money, it may also help reduce emotional and impulse purchases, which will save you even more money!

8. Pay Off Your Credit Cards Every Month

One of the biggest financial stresses most people face are their credit card bills. If you are going to use credit cards, which can be beneficial to maximize cashback bonuses or travel rewards, it’s crucial for your financial well-being that you learn how to manage credit card debt. Most importantly, that means not spending more than you can afford to pay off in full every month. Paying in full and on time will not only improve your credit, it’ll keep late fees and interest charges away, save you money and reduce your financial stress.

9. Consolidate Your Debt

Learning better money habits today is crucial to a happier life going forward; however, you may still be reckoning with mistakes from your past. If you have old debt spread out over a number of credit cards, medical bills and more, consolidating that debt into one loan with one monthly payment at a lower interest rate may have huge financial and emotional benefits.

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Budgeting for a Vacation Post-COVID — When to Start and How Much to Save

Summer is still months away, but no one will blame you for looking ahead toward a possible warm weather vacation. After 12 months of lockdown life, dreaming of a getaway is not only understandable, it might be just what we all need right now. And now is the time to start budgeting for a vacation post-COVID, so let’s take a look at how you can set yourself up today for a great trip when it’s safe to take one.

Where Do You Want to Go?

Before you start saving for a vacation, it’s helpful to have a target destination in mind. After all, time spent in San Antonio doesn’t come with the same costs as a trip to San Francisco. Knowing where you want to go will inform your saving decisions as you build a vacation budget planner to reach your goal of taking a memorable post-COVID vacation. Ask yourself:

  • Will I need to fly to my vacation?
  • Is a rental car needed or will I use a car-sharing service, public transit and my feet to get around?
  • Where will I stay: an all-inclusive resort, a campsite, a self-catered AirBnB, a hotel with free breakfast?
  • How long of a vacation do I want to take? And, of course, how long of a vacation can I afford?

Vacations with flights, especially if you have four or more in your traveling party, are naturally going to be significantly more expensive than a road trip. While all-inclusive resorts may cost more than a rental home or hotel room, having meals covered may ultimately save you money. 

Do your summer vacation research first, then start building your vacation budget planner!

When Should You Start Saving for a Vacation?

In short, the time to start saving for your post-COVID summer vacation is now! Whether you decide to put loose change and extra $5 and $10 bills into a piggy bank at home or open a separate vacation savings bank account with a scheduled recurring deposit, starting to save for a summer vacation today will ensure you have the money to pay for a memorable trip once it’s safe to travel again.

How Much Should You Budget for Your Summer Vacation?

Before you create a summer vacation budget, it can be useful to have a monthly budget that shows you, in advance, how much disposable income you will have to put toward budgeting for a vacation. Now, add up expected vacation costs then divide by the number of weeks between today and the start of your trip. For example:

  • If flights look to be $300 roundtrip and you have 4 members of your family going on vacation, that’s $1,200.
  • If a rental car is needed once you land for a weeklong vacation, let’s say that will be another $400 for a minivan or SUV.
  • Regarding your accommodations, let’s plan for $200 a night, as an example. That’s $1,400 for one week.
  • For food, the next biggest travel expense after transportation and lodging, you need to calculate an estimated daily breakfast, lunch and dinner budget. Hotels with free breakfasts help make vacations more affordable, but still, plan on spending $30 per person per day on food, on average. That’s $120 a day for a family of four x 7 days for a week of vacation = $840.

There will be other costs too, like souvenirs and admission to museums or other attractions during your trip, airport parking costs, and possibly pet sitter’s fees back at home. And if you plan on drinking alcohol on your trip, even if just a glass of wine at dinner, then you’ll very likely spend even more per day. You should estimate these costs as well to get as full a picture as possible, keeping in mind that the examples above are the normal big ticket items for most vacations. 

Now, let’s continue with this scenario and do some more math to see how much you should be saving each week to have a completely paid for trip:

Airfare: $1,200

Car rental: $400

Hotel stay: $1,400

Food and drink: $840

Extras: $500

Total travel expenses: $4,340

Weeks until trip begins: 26

Amount needed to save each week to pay for your summer vacation: $167

Where to Find ‘Extra’ Money for Your Summer Vacation

How much do you spend on your weekly groceries? How about gas, tolls, eating out and takeaway food while at home during a normal week? All of that money you would be spending at home should be folded into your savings while budgeting for a vacation. Additionally, look for travel discounts through your AAA membership, book-now, travel-later deals due to COVID, and cashback on hotel and car rental bookings through sites like Rakuten. You might even find more affordable rental car rates through store memberships such as Costco.

Should You Pay Cash or Use a Travel Rewards Credit Card for Your Summer Vacation?

Paying with cash requires less financial discipline, as there will be no bills to pay when you get home from your vacation. However, it’s also worth considering that a travel rewards credit card can:

  • Give you up to 30 extra days to pay for your trip.
  • Kickstart your savings for your NEXT vacation!

Things to look for in a travel rewards credit card:

  • A generous sign-up bonus (X miles/rewards and/or a free hotel night each year if you spend X amount)
  • No annual fee (or an annual fee that’s at least waived for the first year)

Finally, you must have the discipline to only use the credit card for your vacation expenses you’ve been saving for. To avoid interest charges, you will also need to pay off the balance in full when the bill comes due. If you do this, you may benefit greatly with bonus reward points and miles that will help you the next time you begin budgeting for a vacation.

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5 Clever Ways to Boost Your Personal Loan Approval Chances

There may come a time when you need to borrow money. Whether it’s in a few months or a few years, boosting your personal loan approval chances now may pay dividends later. 

Maybe you’ll be buying a car, consolidating credit card debt, or making home improvements. Whatever your goal, personal loan approval could be the key to it all, but that’s not the first step in the process of borrowing money. By taking action today, you can increase your chances of being approved for a personal loan tomorrow.

1. Know Your Credit Score

The first step to improving your chances for personal loan approval is knowing your credit score and, if necessary, working to repair your credit. Put simply, your credit score is a three-digit number that summarizes your entire credit history. Lenders use it as a way to determine your creditworthiness and default risk. The better your credit score when applying for a loan, the more likely you’ll receive a personal loan approval and, possibly, the best interest rates available. Here are 6 tips for improving your credit score. 

2. Pay Off Debt

Having less revolving debt (such as credit cards or any debt with fluctuating balances and payment amounts) may increase your chances of a personal loan approval. If you can, consider paying down, or even paying off, some of your debt before applying for a personal loan. However, be aware that paying off all your debt may not be an advantage for improving your credit.

3. Close Credit Cards Strategically

Your credit score will look at both credit utilization rate (the total amount of outstanding credit card debt you have in relation to your total available credit limit) and the length of your credit history. However, smartly closing credit cards is trickier than it might appear. 

You may want to consider: 

Closing the right credit cards may clean up your credit profile without negatively impacting your credit score, which can increase your chances of receiving a personal loan approval.

4. Increase Your Income

Debt-to-income ratio is one of the factors lenders will look at before approving your personal loan. If you’re using a high percentage of your income to pay off your debt every month, you may be able to increase your personal loan approval odds by taking on a part-time job to boost your income and lower your debt-to-income ratio.

5. Line Up a Joint Applicant

Even if you take all the steps above, obtaining personal loan approval may still be challenging. In this scenario, consider lining up a joint applicant. When you apply with a joint applicant, lenders consider both of your incomes and credit histories when deciding whether to approve your application. You could also look at getting a co-signer to improve your chances of receiving personal loan approval. Your co-signer will be required to step in and make the payments should you default on the loan, so they should be a trusted person who has a good credit history and strong money management skills.

Find out how Prosper can help you apply for an online personal loan today.

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