Month: September 2020

Should You Press Pause on Private Student Loans?

Posted on by Ryan Lane

Federal student loan payments have been automatically suspended until the end of the year because of the ongoing pandemic.

If you have private student loans, however, payments remain due — unless you’ve paused them.

Roughly 5% of private loan borrowers were using forbearance as of the end of March, according to the most recent data from MeasureOne, which tracks data on private student lending.

That percentage doesn’t account for COVID-19’s economic impact since March, yet it already marked an increase of more than 136% compared with the same period last year.

If you need a break from private loan bills, forbearance can help. But you’ll pay more by using forbearance — and it’s not the only way to get a more manageable payment.

Here’s what to know about private student loan relief options.

What lenders are offering

Most private lenders will let you apply for a natural disaster forbearance due to the pandemic. This forbearance pauses your payments, typically for 90 days, but lenders’ policies differ.

For example, CommonBond is offering forbearance for the duration of the federal state of emergency. Borrowers can extend this break monthly as needed.

David Klein, CEO of CommonBond, calls the policy “the right thing to do, and we don’t see a reason to stop it.”

He adds that forbearance requests at CommonBond peaked in May or June and have sloped downward since.

Other lenders’ programs may be winding down. For example, Earnest offered borrowers three months of forbearance due to COVID-19 before June 30. Borrowers who request assistance because of the pandemic after that date can now receive one month for a limited time.

If a natural disaster forbearance is no longer available and you still can’t pay, contact your lender.

You may be able to continue pausing payments with a general forbearance. Some lenders, including Earnest, may also let you make reduced payments if you’ve already fallen behind.

When to stick with forbearance

Forbearance can make sense if you need the money from your private loan payments for something more important, like rent. But understand the costs of this option.

While federal loans are currently suspended interest-free, private loans will accrue interest in forbearance, making them more expensive.

Still, paying interest is better than ignoring payments and letting private loans default. That can lead to long-term consequences, like credit damage.

“[Default] can definitely hurt your chances of other financial goals and aspirations you have,” says Garret Colao, a certified financial planner and financial consultant at North Star Resource Group in Minneapolis. “A house, a car — all that stuff will be in trouble.”

Private loans usually default once payments are 120 days past due.

Refinancing is an alternative

If you’re using forbearance to increase your cash flow, consider refinancing to bridge the gap between no payment and your current bill instead.

Refinancing replaces your existing loan with a new loan with new terms. Unlike forbearance, refinancing can reduce your long-term costs.

“This is a good time to look to refinance at a lower interest rate,” Colao says.

Rates are at historic lows, and there’s little downside to refinancing private student loans because they don’t qualify for federal loan benefits, like the current payment suspension.

If you can qualify for a lower rate, refinancing can save you money now and in the long run.

For example, refinancing a $20,000 private loan from 10% to 5% interest would lower your monthly bills by $52 and save you $6,260 over a 10-year repayment term. Most refinancing lenders offer longer terms that can cut payments even further. At 15 years, for example, the monthly payment on that $20,000 refinanced loan would be $106 less.

You’ll need a credit score at least in the high 600s, steady employment and enough income to cover your debts to qualify. Most lenders let you apply with a co-signer if you don’t meet those criteria.

Klein says the refinancing industry has made it easy to find out if you’re eligible.

“I would implore people to take literally the few minutes to go online and look at what rate they could likely get,” he says.

The article Should You Press Pause on Private Student Loans? originally appeared on NerdWallet.

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5 Myths About High-Yield Savings Accounts During COVID-19

Posted on by Spencer Tierney

Last year’s savings rates of 2% and higher have come and gone, but that doesn’t mean high-yield savings accounts disappeared.

“There are high-yield savings accounts out there, but it’s all relative,” says Mike Schenk, chief economist for the Credit Union National Association.

When the Federal Reserve cut its benchmark rate to nearly zero in March, many banks and credit unions took their cue to lower rates on savings accounts. This affected online high-yield accounts more drastically than others. And it’s unclear when to expect rates to rise as the monthslong pandemic and related economic uncertainty continue.

If you’re thinking about getting a high-yield savings account or ditching the one you have, don’t fall for these misconceptions.

Myth 1: A high-yield savings account has the same rate over time

Not true, which can be good and bad. Savings accounts have variable rates that are subject to change, so an account you opened last week might not have the same rate this week. This means rising rates can benefit you without you doing anything. But on the flip side, rate drops can occur and, as in recent months, even become common.

From March to September 2020, the average rate across 15 online banks’ high-yield savings accounts dropped from 1.70% to 0.90% annual percentage yield, based on a NerdWallet analysis.

Despite this, having a high-yield and typically online-based savings account still blows traditional options out of the water. Their rates remain far above the national average of 0.05% for savings accounts. And if you already have a high-yield account and you’re itching to switch for a higher rate, maybe reconsider. Rates may keep dropping.

Myth 2: The most important aspect of a high-yield savings account is the rate

Not exactly. The rate has big appeal, but a high-yield account’s safety, lack of fees and easy access to funds shouldn’t be overlooked.

Like other savings options, high-yield accounts are federally insured up to the standard limit of $250,000. This ensures that a bank failure won’t rob you of your money. You can double-check that an account is insured by finding the bank on the Federal Deposit Insurance Corp.’s BankFind tool. Some online banking firms like Chime and Simple have a partner bank to provide their FDIC insurance;
check the fine print at the bottom of the website’s pages for details. Credit unions receive equivalent insurance through the National Credit Union Administration, which you can look up on NCUA’s Research a Credit Union tool.

Most high-yield savings accounts don’t have monthly fees, which can save you money. Quick access to funds is also crucial, especially if you need cash on short notice during a crisis like the current pandemic.

Myth 3: Your money is harder to access in an online savings account

That’s not true in most cases. Like traditional savings accounts, high-yield options provide ways to transfer money online to and from accounts you own at other banks. Generally, it takes a few weekdays for banks to process transfers, but some online banks also offer faster ways to access funds, such as ATM withdrawals and wire transfers.

Since online banks tend to be where the high-yield savings accounts are, chances are you’ll lose branch access in order to gain a top rate. But how often do you visit a branch, especially this year?

Myth 4: All savings accounts make your money accessible at the same speed

Nope, and this may matter. How long a bank takes to process transactions can be the reason you’re waiting for money longer than expected. Every bank has a funds availability policy that states how long it takes to settle transactions: for example, processing cash and government checks the day after a bank receives them.

But banks can make exceptions. Funds can take longer to become available, such as seven days, especially for accounts opened within the previous 30 days and for check deposits over $5,000. Switching banks may also carry an adjustment period with some processing delays. But if your bank processes transactions more slowly than others, it can be a real problem if you expect to need your money soon after depositing it.

“Ask your regular bank how long they hold funds,” says Dana Twight, certified financial planner and owner of the Seattle area-based firm Twight Financial. “I just had a call with my credit union where they were withholding an ATM deposit for three days because it came from another credit union.”

Myth 5: The main purpose of a high-yield savings account is to earn interest

It’s tempting to think so, but no. Contributing money to a savings account consistently and over time will likely raise your balance a lot more than interest payments will. And a savings account is the ideal place to grow your money with an eye toward goals, such as saving for a down payment on a house or building an emergency fund of three to six months of living expenses.

“No dollar amount is too small” to save, Twight says. Once “you have an emergency fund, you have increased your ability to make choices when hard times come.”

Your account rate may waver, but your approach toward saving matters more.

John Thompson, chief program officer at the national nonprofit Financial Health Network, says, “To save with a plan … is one of the most critical behaviors for improving and sustaining financial health.”

Spencer Tierney is a writer at NerdWallet. Email: spencer.tierney@nerdwallet.com. Twitter: @SpencerNerd.

The article 5 Myths About High-Yield Savings Accounts During COVID-19 originally appeared on NerdWallet.

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‘When Can I Shred This Check?’ and Other Online Banking FAQ

Posted on by Chanelle Bessette

As the COVID-19 pandemic leads banking customers to lean into online technology to manage their money, those trying online banking for the first time may find themselves with questions about how to handle things previously done in person or with paper documents.

If you’re stuck on how to handle some of the practical aspects of online banking, here are answers to common questions.

Should I save monthly statements?

Experian, one of the three major credit bureaus, recommends keeping bank statements for tax purposes to confirm your income or deductible expenses. If you do end up using your statements for your taxes, you may want to hang onto your statements for up to seven years in case the IRS decides to audit you. Even if your bank keeps digital records of your statements, you may want to print or download your statements just in case.

When should I shred the paper check from a mobile deposit?

Major banks recommend that after you’ve made a mobile deposit, you write “mobile deposit” and the date of deposit on the front of the check. Keep the check until you’ve made sure the deposit has gone through — which may take several days — and that the bank doesn’t need the original check for any reason. Once the check has been cleared in your account, it’s best to shred it.

How do I send money or pay bills through my mobile banking app?

If you want to send money to friends or family, your bank may have you covered with the Zelle money transfer service. Zelle, which is integrated with many major banks and also available as a separate app, allows registered users to receive and send money from their bank accounts.

You can also sign up for money transfer apps like Venmo or Cash App and link them to your bank account to send and receive money, as long as your sender or recipient has the same app.

To pay your bills online, your bank might have the option to set up recurring payments to services like your cell phone provider or utility company, allowing you to automate your monthly bills. Some banks can also send a check on your behalf if necessary. Wells Fargo, for example, offers online bill pay services, but you can also schedule paper checks to be sent for you if your service provider doesn’t accept electronic payments. Search your bank’s FAQs or reach out to its customer service department for details on its bill-pay features.

What should I do if my mobile banking app isn’t working?

It’s a universal truth that technology comes with occasional frustrations. Sometimes banks experience app outages, and sometimes there are problems on the user side. There are a few things you can do to diagnose the problem:

  • Make sure your login credentials are correct. Entering an incorrect username and/or password is a common stumbling block and will prevent access to your account. Some banks might even lock you out after too many failed login attempts. If you’ve forgotten your login information, contact your bank’s tech support team.
  • Check your email and your bank’s social media accounts. Your bank may have posted on its Facebook or Twitter accounts or sent an email notification about any known app problems. Many consumers today also use their banks’ platforms to flag problems themselves. If there’s an outage, your bank may post information on how long it’s expected to last and how you can access your account in the meantime. Bookmark or follow your bank’s social media accounts for quick access.
  • Update your app and/or your phone software. Your version of the app could be out of date, or your phone’s software may need updating to use a newer version of the app. Go to your phone’s app marketplace (e.g., Apple App Store or Google Play Store), search for your bank’s app and see if there’s an option to update.
  • Get technical support from your bank. For help, reach out to your bank’s customer service representatives by phone, email or chat, if available.
  • Use your desktop login or visit a branch or ATM. If your app isn’t working, you may still be able to log in on a desktop computer. If your bank has physical branches, you should be able to get in-person service, although COVID-19 precautions may mean that hours are limited or appointments required. If you’re trying to deposit a check or check your balance, you can use an ATM, as long as your bank offers use of a network.

This article was written by NerdWallet and was originally published by The Associated Press. 

Chanelle Bessette is a writer at NerdWallet. Email: cbessette@nerdwallet.com.

The article ‘When Can I Shred This Check?’ and Other Online Banking FAQ originally appeared on NerdWallet.

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Your Credit History Opens Doors — Here’s How to Build It

Posted on by Erin El Issa

Around 1 in 8 Americans (13%) say they don’t have any credit history, according to a new NerdWallet survey. They provided a variety of reasons: Some haven’t even thought about building credit, others want to do it but can’t gain traction and some are in the middle.

Building credit is wise for just about everyone, but it’s not something you can do overnight. It may take around six months for positive credit actions to have an impact on your credit score, so waiting until you’re ready to buy a house or finance a car is too late.

Even if such things aren’t in your plans, having good credit (FICO scores of 690 or higher) still expands your financial options. And while building credit isn’t always easy, it’s not as complicated as many people think.

Build credit before you need it

Among Americans without a credit history, about one-third (34%) say it’s because they don’t feel like they need it right now. And 1 in 5 (20%) say it’s because they haven’t really thought about building credit.

Building credit is about preparing for the future, and good credit means having more choices, like qualifying for loans and credit cards with better terms and lower interest rates. But the effects go well beyond your ability to borrow money — something many Americans may not know.

A good credit score can make it easier for you to rent an apartment. It can determine the kind of cell phone plan you’re eligible for, qualify you for lower auto insurance rates and allow you to get utility service without having to provide a security deposit. Many employers now check applicants’ credit, so your score can even affect your ability to earn a living.

Debt isn’t required to build credit

Close to a quarter of Americans who say they don’t have a credit history (22%) say it’s because they’re afraid of going into debt.

Being wary of debt is understandable. But you don’t have to go into debt to build credit; you just need to show a track record of making payments.

Credit card debt is notoriously expensive — but only if you carry a balance from one month to the next. And there’s no need to carry a balance to build credit. By paying your bill in full by the due date each month, and you’ll never be charged interest.

If you’re concerned about overspending, use the card only for specific recurring expenses, then set up an automatic payment from your bank account each month. For example, instead of using a credit card for daily expenses and possibly running up debt, put your monthly power bill or streaming subscription on the card. That way you aren’t spending more than you would otherwise, but you’re still building credit and avoiding interest.

How to get started

According to the survey, 20% of Americans without credit history say it’s because they aren’t sure how to start building credit. And 13% say they’ve tried to build credit but haven’t been able to get approved for anything.

A well-known catch-22 of credit-building is that good credit allows you to borrow money, but you need to be able to borrow money to establish good credit. You can start building credit by becoming an authorized user on someone else’s credit card or by getting your own secured card.

Become an authorized user

An authorized user is added to another person’s credit card account and benefits from that primary cardholder’s good credit habits. So if you have a parent, partner or someone else with good credit who’s willing to add you to one of their credit card accounts, you can start building credit without getting approved on your own. Before you go this route, have the primary cardholder confirm with the credit card issuer that it reports credit activity for authorized users to the three major credit bureaus, Equifax, Experian and TransUnion.

Get a ‘starter’ credit card

Another option is a secured credit card, which you can get on your own if you have a few hundred dollars for a deposit. Here’s how it works: You put down a cash deposit, then you get a card with a credit limit that’s usually equal to your deposit. You use the card like any other credit card, making purchases and paying your bill on time every month. Unlike with a prepaid card, your account activity is reported to the credit bureaus. Once you’ve built up your credit, you can close the account, get a regular card (or upgrade to one, if the issuer offers it) and get your original deposit back.

For more, read NerdWallet’s guide on how to build credit, which covers getting started with credit-building, practicing good credit habits and tracking your progress by monitoring your credit report.

Erin El Issa is a writer at NerdWallet. Email: erin@nerdwallet.com. Twitter: @Erin_El_Issa.

The article Your Credit History Opens Doors — Here’s How to Build It originally appeared on NerdWallet.

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You Don’t Need Perfect Credit to Get a Personal Loan

Posted on by Annie Millerbernd

A low credit score doesn’t have to stand in your way if you want to get a personal loan to cover an emergency or consolidate your debts.

Borrowers with bad credit, which is a FICO score below 630, may need to put in some extra work to qualify for a personal loan. But taking these steps can not only help you get approved, they could also get you a cheaper interest rate.

Clean up your credit, shrink your debt

Before you apply for a personal loan, get a copy of your credit report to see what the lender will see on it, says Adrienne Ross, a Washington-based certified financial planner. You can get one free copy of your report from all three major credit bureaus at annualcreditreport.com.

The details on your credit report can show you why your score is low and signal how to address the issues before a lender sees it.

For example, a past-due account is likely a red flag to a lender, but you’ll have a better chance of qualifying if you can spot it and make the payment before you apply, Ross says.

Lenders also consider the percentage of your monthly income that goes toward debt payments, called your debt-to-income ratio. You’ll need a DTI below 50% to qualify with most lenders, and lower is often better.

If you don’t urgently need the loan, pay down debt before you apply, Ross says. Not only will lower outstanding balances reduce your DTI, they will also lower your credit utilization, which is the amount of your available credit you use and a main factor in your credit score calculation.

Add a co-signer or collateral

A quicker solution may be to choose a lender that allows you to add a co-signer. A willing friend or family member with good credit and strong income can help you get approved, says Thomas Rindahl, a CFP with TruWest Wealth Management Services in Arizona.

Tread lightly with co-signed loans, he says, because the person you add to your application will be required to pay the loan if you can’t.

Some lenders may also offer secured personal loans that require you to pledge something you own such as a vehicle or savings account, he says. Borrowers with fair or bad credit may have a better chance of qualifying and getting better rates with a secured loan, but the lender can seize the collateral if you don’t make your payments.

Make a repayment plan

Choose a lender that reports your loan payments to the credit bureaus, as this can help you build credit, Ross says. This means the next time you borrow money or apply for a credit card, you could get a lower rate.

But because lenders report both on-time and missed payments, your ability to make them will determine if your credit improves or worsens.

Be prepared to ask questions about rates, terms and extra fees so you understand exactly what you’ll owe each month and when you’ll owe it, Ross says. Knowing that will help you make a plan to manage your payments.

Even with a solid payment plan, you could end up late on one or two payments along the way. Since lenders don’t immediately report late payments to the credit bureaus, Ross says, make the payment as quickly as possible to avoid the hit to your credit.

Compare lenders

Comparing offers from online lenders, banks and credit unions can help you find the best rate and features for your situation.

Some online lenders offer personal loans specifically for borrowers with low credit scores. Look for reputable lenders that cap their annual percentage rates at 36%, which consumer advocates and financial experts say is the highest rate an affordable loan can have.

Bad-credit borrowers will likely qualify for rates close to a reputable lender’s rate cap, but nowhere near the 300% or higher APRs that payday lenders offer.

Online lenders may also let you pre-qualify with a soft credit check, allowing you to see what rate and loan amount you could get without hurting your credit score. Many banks and credit unions require borrowers to formally apply to see their offer, triggering a hard check that can cause a temporary dip in your score. Some online lenders can also fund a loan the same or next day, while a bank could take a week or more.

On the other hand, your community bank or credit union may be more willing to consider the circumstances if a recent misunderstanding or years-old issue is keeping your credit score down, Rindahl says.

“An online lender might have competitive rates, and it might be easy because you can do your application at home, but if you don’t fit their algorithm, you don’t fit their algorithm,” he says. “Your local institution, whether it’s a credit union or bank, is much more likely to look at the person as a whole,” he says.

Annie Millerbernd is a writer at NerdWallet. Email: amillerbernd@nerdwallet.com.

The article You Don’t Need Perfect Credit to Get a Personal Loan originally appeared on NerdWallet.

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If Doing Less Means Saving More, Try These 5 Money Moves

Posted on by Alana Benson

The coronavirus has upended countless jobs, schools and bank accounts. But while undoubtedly more people are struggling than not, those who are still working may have seen their expenses actually drop, due to canceled travel, limited dining options and more time at home.

If you’ve managed to end up with extra money during the pandemic, here’s how to take advantage of those savings.

1. Start or fill out an emergency fund

2020 has served as a stark reminder that unexpected things can happen, and when they do, it’s a good idea to be prepared.

“We say if you have a steady job, your contingency fund should be three to six months of expenses,” says Tara Unverzagt, certified financial planner and founder of South Bay Financial Partners in Torrance, California. “I would bulk it up even more because of uncertainty. I’ve never known anyone to be upset because they had too much cash, but have known lots of people who were upset they didn’t have enough.”

That level of savings is a stretch goal for many people; an extended period of reduced expenses may provide you with the opportunity to finally reach it. Establishing an emergency fund is one of the best things you can do for your future self, and if you put it in a high-yield online savings account, it will benefit from a higher interest rate than a regular savings account.

You don’t want to invest your emergency fund because your primary goal for that money is accessibility, not growth. The stock market goes up and down, and there’s a real risk that it could go down just when you need the money. At best, that could mean having to sell your investments at a loss to pull cash out. At worst, it could mean your money won’t be there when you need it most.

2. Invest for retirement

If you haven’t ventured into the world of investing yet, it may feel like a scary time to start given all the volatility in the market lately. The good news is that volatility doesn’t cause much harm when you’re investing for a long-term goal like retirement: The peaks and valleys due to the coronavirus will likely appear much smaller over time.

If you haven’t started investing, there are two easy jumping-off points: your employer’s 401(k) if it offers one and an IRA. Both are accounts that can help you invest for retirement with some tax benefits. Roth IRAs, for instance, allow your money to grow and be taken out in retirement tax-free.

Even if you’re already contributing to a 401(k) or an IRA, you may want to consider upping that contribution. Every extra bit you can put toward retirement goes a long way. Let’s say your reduced expenses mean you can save an extra $500 a month over the next year. If you have 30 years until retirement and you earn a 6% return, that $6,000 you invest could add over $34,000 to your retirement balance — a significant boost.

And because you can always change how much you’re contributing, you can decrease the amount you’re putting toward retirement if and when your spending habits return to normal.

3. Save for nonretirement goals

Retirement is a common goal, but it likely isn’t the only one you have. If you’re on track for retirement, consider putting extra funds toward other things: college for your kids, a new car or a dream vacation (which you’ll have plenty of time to save for, since most people aren’t traveling right now).

Investing can help you achieve those goals faster than just saving, but keep in mind that you generally don’t want to invest money you’ll need within five years. (Like an emergency fund, savings for near-term goals should go into safer options, like a high-yield savings account). On the other hand, if you’re starting a college fund for a newborn, that money will have approximately 18 years to take advantage of the market’s returns.

If you’ve found yourself in a position of privilege during this global pandemic and have been able to save some extra money, you may also want to consider increasing your charitable contributions. Keep in mind, you may be able to deduct your charitable donations when tax time rolls around.

4. Explore real estate investments

If you’re interested in investing in real estate, you don’t have to start renovating an old barn or putting up shiplap. One of the easiest ways to invest in real estate is to invest in real estate investment trusts. REITs are companies that own (and sometimes operate) real estate that generates income, such as apartment buildings. Publicly traded REITs are bought and sold on exchanges, just like stocks, and have similar liquidity, meaning you can sell them with relative ease.

5. Get some help

When you suddenly find yourself with extra money, it can be difficult to figure out the best way to put it to use. Financial advice is widely available these days, and it’s often inexpensive. Online financial advisors and robo-advisors have brought the cost of investment management and financial planning down significantly, and both are good options for when you’re feeling lost.

These advisors can also help you stay hands-off with your portfolio during turbulent times in the market by ensuring that your investments are aligned with your risk tolerance. Robo-advisors offer investment management and typically charge between 0.25% and 0.50% of your assets per year. If you need assistance developing a more comprehensive financial plan in addition to investment management, it may be a good idea to enlist the help of a financial advisor.

Alana Benson is a writer at NerdWallet. Email: abenson@nerdwallet.com.

The article If Doing Less Means Saving More, Try These 5 Money Moves originally appeared on NerdWallet.

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(How) Should I Travel for the Holidays?

Posted on by Sam Kemmis

Remember when we used to make plans? It was so long ago now you may not remember, but we actually used to start booking our holiday travel in the summer before prices rose to unaffordable levels. That’s right: We could predict what the world would be like months in advance back then.

Times have certainly changed; now, some travelers are starting to wonder whether and how to plan for the holidays. Does it make sense to buy plane tickets? What about using points and miles? And what are the chances of a second (or is it third?) wave of the pandemic?

I’ve spent the last few months wading through COVID-19 travel policies, spreadsheets full of airfare and hotel data and other boring industry effluvia so you don’t have to. And I’ve got a few nuggets of advice for anyone thinking about booking holiday travel.

For starters: Why rush?

Should I book now?

Years of conditioning have taught us all the perils of waiting until the last minute. But if you haven’t noticed, this year is not like the others, and travel demand is unlikely to reach normal no matter what happens in the next few months.

In other words: You shouldn’t feel any rush to book travel until you’re ready.

In fact, you might end up paying more if you book in advance rather than closer to your travel dates. Recently, I analyzed a bunch of hotel price data and found that the cost of booking the same room dropped dramatically when booking 15 days in advance, compared to booking four months in advance.

That is, the same rooms cost an average of $157 when booked within 15 days compared to $212 when booked four months in advance. And while this trend might not hold into the winter or through the holidays, it’s certainly a good indication that you’re unlikely to save money by booking hotel rooms now.

The trend isn’t quite as dramatic for airfare, though it’s possibly more remarkable, since booking within 15 days has historically been a recipe for getting fleeced.

Which airline should I fly?

This one’s easier: Delta.

We performed a big analysis of airline policies in response to COVID-19 and found that Delta had the best overall rating, with Southwest and Alaska hot on its heels.

I won’t bore you with all the details here, but some of the factors we took into consideration include:

  • Mask policy enforcement.
  • Blocking seats and limiting capacity.
  • Offering flexible change and cancellation policies.

This last bit is especially important when booking holiday travel this year: Make sure the tickets you purchase can be changed or canceled without incurring a fee. This has gotten significantly easier with various COVID-19 waivers and four major airlines, including Delta, all announcing the elimination of most change fees. Be aware of restrictions that remain around basic economy fares.

What about points and miles?

Hotel points and airline miles can usually offer good workarounds for sky-high holiday prices. Notice that pesky “usually.” Since cash prices are so low, using points and miles is unlikely to offer better than average value this year.

That doesn’t mean you shouldn’t use miles, just that you won’t get especially good bang for your buck from them right now.

Will it be safe?

That’s the trillion-dollar question, isn’t it? I’m no epidemiologist, so I’m reluctant to wade into these waters, but there is something important to keep in mind: Where are you planning to travel in December?

The Institute for Health Metrics and Evaluation at the University of Washington offers public projections for the pandemic broken down by country and state. These reveal some pretty startlingly different scenarios for different parts of the country.

For example, the daily per capita infection rate in California is projected to rise from 42.6 per 100,000 today to 155 per 100,000 by December. New York state in December is projected at 30 per 100,000, up from the current 4.4. Utah’s rate is expected to skyrocket to 179 per 100,000 from today’s 13.5.

Of course, these are only projections, and nobody knows what will actually happen by December, but it’s good to keep in mind when planning travel. You don’t want to go from a relatively safe spot into a hot zone (or a hot zone into a safe spot, for that matter).

In fact, for everyone’s sake, my personal take is that we should all err on the side of staying home.

Sam Kemmis is a writer at NerdWallet. Email: skemmis@nerdwallet.com. Twitter: @samsambutdif.

The article (How) Should I Travel for the Holidays? originally appeared on NerdWallet.

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Distance Learning Can Fit Into Your Back-to-School Budget

Posted on by Lauren Schwahn

For many students, “going back to school” this fall could be just a figure of speech.

As the pandemic persists, the decision about whether to allow in-person learning or keep classrooms closed is coming down to the wire. The possibilities of distance learning are influencing how much families anticipate spending on back-to-school purchases.

Parents with children in elementary school through high school plan to spend a record $789.49 on average this year, according to an annual survey conducted in early July by the National Retail Federation. This is up from last year’s $696.70.

“As consumers get more information on how their specific school is operating and how classes will take place, they might adjust those budgets a little bit,” says Katherine Cullen, senior director of industry and consumer insights at the NRF.

Here’s how to tailor your spending for distance learning amid the uncertainty.

Expect extra purchases

This year’s back-to-school list may feature items you haven’t had to shop for in the past. Students attending school virtually — whether part-time or full-time — will likely need laptops, tablets or desktops, plus headphones and other tech accessories to access and engage with their classes.

If multiple people will be learning and working simultaneously in your household, you may have to shell out to get everyone their own device. Consider whether you’ll also need to buy any furniture or materials, like a dry-erase board, to create a functional workspace. Working parents who need support might also incorporate child care costs, tutoring or other arrangements in their budgets.

Students starting school at home could return to the classroom. Your budget should still include staples like school supplies and clothes to cover different scenarios.

“Kids grow regardless of whether or not they’re in school,” Cullen says.

Hold off on others

To offset the cost of new supplies, find out which purchases you can skip while remote learning takes place. Pens and pencils will come in handy at home, but a new backpack or lunchbox probably won’t get much use.

“Once you get that list from your teacher, ask them, ‘What are the necessary items and what are those nice-to-haves?’” says consumer savings expert Andrea Woroch.

Before you shop for necessities, take inventory of what you already have, Woroch says. You could save money by scrounging up leftover office supplies from last school year.

“Things like half-filled notebooks can still be used. Pull out the pages that have already been written on and save the rest,” Woroch says. “See what you can make do with, even if you’re just making do for the next two to three months.”

Tap into resources

Next, research ways to get help acquiring the items you don’t have. This can reduce or eliminate additional expenses from your budget.

Some schools will lend devices like laptops and mobile hotspots to students without adequate internet access. If that isn’t the case at your school, Woroch recommends checking out organizations that connect people to low-cost internet and computers. Examples include EveryoneOn and PCs for People.
Many local libraries provide free education resources such as books, tutoring services and test-prep materials. You can also use social media groups or other online forums to find free or affordable clothing and supplies from families in your community.

Shop smart

Ultimately, you’ll likely have to purchase several items this back-to-school season. Strategic shopping can stretch your dollars further.

Establishing a digital relationship with retailers can help you navigate the process, especially if you’re unable to physically shop in stores or aren’t comfortable doing so. Follow retailers on social media or subscribe to their emails to receive news and sale information.

“Many brands and retailers are trying to be very upfront with what’s in stock, what to expect if you do decide to go to the store and what you can order online,” Cullen says.

Make sure to compare prices from different sellers. Do a quick internet search and use a price-comparison tool, such as the browser extension InvisibleHand, to track down the best deals.

“Retailers are constantly fluctuating prices, and with so many people shopping online right now, they’re really trying to maximize their profits,” Woroch says.

Another savings tip? Look for open-box or refurbished tech (ideally with a warranty) instead of buying new.

Give standard shopping advice a try, too: Ask about retailer price matching and price adjustment policies, seek out coupons and loyalty program discounts, and maximize your credit card rewards.

This article was written by NerdWallet and was originally published by The Associated Press.

Lauren Schwahn is a writer at NerdWallet. Email: lschwahn@nerdwallet.com. Twitter: @lauren_schwahn.

The article Distance Learning Can Fit Into Your Back-to-School Budget originally appeared on NerdWallet.

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6 Great Recession Money Lessons That Still Apply Today

Posted on by Melissa Lambarena

The Great Recession demolished jobs across the U.S., and it eventually came for mine, too. After graduating in 2009, I worked four months as an entry-level executive assistant at a nonprofit before being laid off.

I had limited financial knowledge, a short work history and a lot to prove to break into the field of journalism, my ultimate goal. Along the way, I picked up valuable lessons that might help you manage your finances during the coronavirus-related recession.

1. Save what you can

My short work history disqualified me from receiving unemployment benefits, so I relied on my savings account. Even a small emergency fund of $500 can prevent you from falling into debt, and I had socked away enough to cover a few months of expenses.

If you’re still employed, “pay yourself first,” said Samuel Deane, a financial planner at Deane Financial in New York. “Even if it’s $20 every time you get paid, make sure you put that $20 away first and then live your lifestyle with the remainder.” Automate it with direct deposit if you can.

If you’ve lost your job, saving will obviously be tougher. Apply for unemployment if you qualify, and contact your landlord, creditors, area nonprofits and family members to seek relief. If you’re still employed but have had your salary cut, consider a side gig and work on trimming expenses.

2. Think twice before rejecting job offers

After many interviews and dead ends, I applied for an administrative role at an accounting firm and got hired in December 2009. It paid about $7,000 less than my previous salary. I knew it wouldn’t put my career on track, but it would cover most of my bills, so I took it.

Amanda Grossman, now a certified financial education instructor in El Paso, Texas, made similar compromises after being laid off as a market researcher in Florida in 2008. She took a career counselor’s advice and relocated to Texas for a lower-paying job in the environmental industry.

“[The counselor] said, ‘Look, the economy is not doing well. You need to take that job, it’s going to keep going down; you’re not going to be able to find work,’” Grossman said.

If your sector is hurting and unemployment benefits or savings are lacking, even a less-than-ideal role can help you ride out a recession.

3. Get smart about money

You’ll find a myriad of financial literacy resources online and at your local library, assuming it is open and safe to visit during the pandemic.

I struggled to save money on a lower salary. Credit cards became my emergency fund. I don’t recommend this approach, but times were tough. Had I learned about financial hardship programs, student loan repayment options or balance transfer credit cards, I would have saved heaps on interest and ditched debt faster.

4. Establish multiple streams of income

I still wanted journalism experience and extra income, so on top of my new full-time job, I learned to shoot and edit video. I began freelancing in 2010. A year later, I also launched a small social media consulting business.

Grossman, too, had other goals. “I’ve always wanted to be a writer and I love, love, love talking about money,” she said.

While she was unemployed in Florida, she launched the blog “Frugal Confessions.” She learned new writing skills from books and sought feedback from editors at newspapers. In 2013, she left her environmental job in Texas to run her blog full time.

5. Protect your credit — but protect yourself first

In a crisis like COVID-19, many normal financial rules don’t apply. You may need to carry a credit card balance to buy groceries or address an emergency. You may need to make only the minimum payment to cover rent. You may even need to contact your card issuer and ask for relief options like payment deferrals.

Even with three jobs, I struggled at times to make the minimum payments on my credit cards due to high balances and interest rates. I never defaulted, but I did stress and scramble over it. I wanted a record of on-time payments and the good credit they build so that I could qualify for future low-interest rate offers.

That’s a worthy goal, but in times of emergency, prioritize getting back on your feet first. Once you do, you’ll have time to address your credit scores.

6. Make calculated money moves

Eventually, I left my apartment and moved in with roommates. I also read the post-recession climate and, in successive jobs, learned how to ask for a raise. Every year that my workload and responsibilities increased, I made a case for a higher salary. Asking is uncomfortable at first, but it gets easier. The extra money eventually paid off my debts.

A recession’s impact is largely out of your control, but your reaction isn’t. With strategic steps, you can insulate yourself and create new opportunities.

This article was written by NerdWallet and was originally published by The Associated Press. 

The article 6 Great Recession Money Lessons That Still Apply Today originally appeared on NerdWallet.

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