Author: Lauren Schwahn

Shopping Experts Predict What’s in Store for Black Friday 2022

Posted on by Lauren Schwahn

Black Friday, the day after Thanksgiving, lands on Nov. 25 this year. While that’s still a ways off, holiday sales have already started. But they’ve only begun to scratch the surface. There’s still plenty of season — and chances to save money — left to go. Looking ahead to Black Friday, what can shoppers expect amid rising prices and other concerns?

Here’s how experts predict the shopping event will shape up this year.

Inflation will impact deals

Inflation has driven up the cost of all goods by 8.2% between September 2021 and September 2022, according to data from the Bureau of Labor Statistics. Holiday shoppers are counting on discounts to provide much-needed relief. But inflation has taken a toll on retailers, too.

“Stores are suffering,” says Priya Raghubir, professor of marketing at New York University’s Stern School of Business. “Their fixed costs remain high, and the revenue is shrinking. So they can’t afford to offer deep deals.”

Inflation has hit certain categories harder than others. For example, food prices have increased more than clothing prices. Shoppers may find the quality of deals will depend on what they buy. Many experts say that while retailers will still tout plenty of bargains, the savings may not live up to the hype.

“I think that we will see higher prices this year than we have in the past, and certainly promotions can try to help offset that,” says Heather Dougherty, vice president of success at Lexer, a customer data platform for retailers. “But inflation is definitely pushing higher prices for retailers, and they have to pass that cost on to the end consumer.”

In some cases, the impact will be subtle. Retailers may charge higher delivery fees or shoppers may get less for their money through shrinkflation, in which a product’s price remains the same but its size or quantity is reduced. For example, a lotion bottle may contain an ounce or two less than before.

Supply chain issues could resurface

Shipping backlogs and product shortages made for a challenging holiday shopping season last year. While inflation may be the headline-grabber this year, supply concerns aren’t completely behind us.

“The entire supply chain is currently a huge question mark,” Raghubir says. “A lot of that is due to the war [in Ukraine] and how it has impacted the whole world: shipping, the price of oil and gas, supply lines from China.”

However, retailers may be better prepared to avoid empty shelves this time around. Many have adjusted their ordering strategies and timelines to compensate for possible hiccups, says Katherine Cullen, senior director of industry and consumer insights for the National Retail Federation.

Supply chain snags could also benefit bargain hunters. In recent months, delayed shipment arrivals coupled with declining consumer demand have left some stores with excess inventory.

“Retailers, some of them, are stuck with inventory that the consumers are unwilling to buy. Those will probably be things that go on deepest discounts, but they’re not your ideal Black Friday gift shopping. These are so-last-season kinds of things,” Raghubir says.

Sales will happen early and often

The day after Thanksgiving used to mark the start of the holiday shopping season. But Black Friday sales have crept up earlier and earlier over the last few years, and this year is no exception. Target launched its holiday season savings with the Target Deal Days event on Oct. 6, several days earlier than in 2021. Amazon held a members-only Prime Early Access Sale Oct. 11 and 12. More events like these will pop up later in October and early in November.

“Much of this is in response to when consumers want to shop,” Cullen says. “Retailers have seen that consumers like to take some of the pressure off of having to complete all of their holiday shopping towards the end of the season.”

Sales will continue throughout the next couple of months, giving shoppers plenty of opportunities to find deals. Experts expect that while some retailers will sit on some of their best promotions until closer to Black Friday, there’s no need to wait.

“It really probably is in consumers’ best interest to at least start thinking about shopping early so that when they see something at a price that’s great for them, they can make a move on it and avoid it either selling out or not being as discounted later in the season,” Cullen says.

Early shopping can help strapped customers spread out their spending and spare their holiday budgets. Plus some retailers, like Target, are allowing shoppers to request a price match if an item they buy goes on sale for less later in the season.

Loyalty will pay off

As shoppers deal with concerns over inflation and rising interest rates, retailers are focusing more on retention as a way to bring in dollars.

“Consumers that are members of loyalty programs will probably really benefit from exclusive offers, early access to sales, special discounts, gifts with purchase and all sorts of other types of benefits,” Dougherty says.

Watch for communications from the retailers you plan to shop with. Consider signing up for memberships, or use the ones you already have, to take advantage of special perks. If there’s a fee associated with a loyalty program, make sure to weigh the cost versus potential savings before you commit.

Lauren Schwahn writes for NerdWallet.

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What Student Loan Cancellation Could Mean for Your Budget

Posted on by Lauren Schwahn

The Biden administration announced plans for federal student loan relief last month. The plans include the cancellation of up to $10,000 in debt for borrowers who meet income requirements and up to $20,000 for Pell Grant recipients. Beyond cancellation, the proposal also extended the pause on loan repayment through the end of the year and introduced a new income-driven repayment plan aimed at lowering monthly payments.

For now, these plans are just, well, plans. And plans can change. Many experts expect the proposal to face legal challenges, so don’t make any big money moves just yet. Here’s what you can do now to prepare for relief, and what it could mean for your budget.

There’s still uncertainty

If the proposal moves forward unchanged, it could still take time for your budget to feel the effects. Loan forgiveness should be automatic for roughly 8 million people because they’ve already supplied income data, according to the Department of Education. The Biden administration aims to make an application available for everyone else by early October. Relief is estimated to come four to six weeks after completing the application.

“There’s still a lot of unanswered questions,” says Kyle Liseno, head of the student loan department at the nonprofit agency American Consumer Credit Counseling. “I’ve been telling people, just kind of stay tuned to studentaid.gov, which is the Department of Education website.” You can also sign up for application notifications on the Department of Education’s subscription page. The application deadline is Dec. 31, 2023. But borrowers are advised to apply before Nov. 15 of this year to get relief before the payment pause ends.

Here’s what could happen if relief withstands legal challenges

It could free up more money for expenses and goals

The newly announced relief plans could erase or reduce a substantial amount of your federal loan debt. (Private student loans are not covered.) The impact on your budget could be massive, especially during a time of heightened inflation and interest rates.

“$10,000 could be a great amount for someone, and it could really help them in terms of just getting back on their feet and getting rid of financial debt,” says Maggie Klokkenga, a certified financial planner in Morton, Illinois.

If you don’t qualify for forgiveness, you’ll still benefit from the pause on loan payments, which has been extended through Dec. 31, 2022 — interest-free. If you keep making payments during the pause, your balance will drop. If you hold off, you can put some of the money you previously spent on payments toward more urgent expenses, such as rent or high-interest debt.

But even if you’re eligible, you won’t be handed a $10,000 check. Klokkenga suggests looking at your previous student loan statements to remind yourself of the minimum payment amount. Then, you can allocate some or all of that amount (depending on how relief impacts your balance) toward saving for an emergency fund and other financial goals, “whether it’s vacation, short term, or whether it’s retirement, long term,” Klokkenga says. “And then you can still have some fun with it, but it’s not to say this is a windfall or that you just won the lottery.”

Liseno says he’s already seen many people pursue financial goals while payments have been paused. “All this deferment has shown that when student loans are off the table, young people are buying homes now. They’re buying cars. That money is going into the economy,” he says.

Think of what you would do with the extra cash if your $300 minimum monthly payment got slashed to $150. Or $0. Klokkenga says using an online tool, such as Utah State University Extension’s PowerPay, can help you create a debt payment or spending plan based on your student loan savings.

You might not feel a difference

Federal student loan payments have been on pause since March 2020. This latest extension should feel familiar.

The relief plan “is going to help a lot of Americans with … their future budgets,” Liseno says. “Because most people haven’t had to pay in almost three years.”

If you took advantage of the pause, you’ve likely already moved money around elsewhere in your budget. Or, if you’ve been responsibly socking the monthly payment amount away in savings, you’ll be accustomed to parting with that money if you still have a balance to pay come January.

Student loan relief plans are still up in the air. It may be tough to predict what will happen with your finances until there’s a clear resolution. In the meantime, stay on top of news and do your best to prepare for different outcomes.

Lauren Schwahn writes for NerdWallet.

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4 Items for Your Midyear Money Checklist

Posted on by Lauren Schwahn

A lot can happen in six months. That’s why, as we close out the first half of the year, it makes sense to check in on your financial life.

“With inflation, I think people this year are more heavily impacted than they probably have been in many years leading up to this point,” says Jason Dall’Acqua, a certified financial planner and founder of Crest Wealth Advisors in Annapolis, Maryland. “So it’s a good time to see how things have been going … as well as plan for what lies ahead in the remainder of the year.”

So where should you start? Add these four items to your midyear money checklist.

1. Review your income, expenses and goals

You don’t have to tally up every penny you’ve made and spent over the last six months. But taking a few minutes to check a bank or budget app can help you better understand your finances and course-correct if necessary.

“Right now with inflation, even if you had a budget back in January, it probably is not the same as it is today. There are some things that are going to need to be changed. So it’s just really resetting and figuring out where you stand today versus where you thought you were going to stand today,” says Kayla Welte, a CFP with District Capital Management who lives in Denver.

Look for opportunities to scale back if you’ve spent more than anticipated. For example, you can dine out less or cancel subscription services you rarely use. “Any excess spending that you’ve been doing, you may have to cut down to account for this higher cost of things that you absolutely have to buy,” Welte says.

If you set money resolutions or other financial goals earlier this year, check on those too. Have you saved as much toward retirement or an emergency fund as you planned? Are you on track to pay off debt?

2. Deal with debt

Debt is becoming more expensive to carry due to rising interest rates. Pay down debts sooner, particularly those with variable interest rates, to save money. These debts might include credit cards, personal loans or adjustable-rate mortgages.

Concentrate on reducing your highest-rate debt first, then move on to the next highest. Dall’Acqua also suggests switching from variable-rate to fixed-rate options by refinancing, if possible. “If you can lock in the fixed rate now, you’re likely to be saving yourself significantly in interest costs over time,” he says.

Be aware of end dates for loans in forbearance. For instance, federal student loan payments will resume on Sept. 1, barring another extension.

“At this point they have been on pause for nearly two years,” Dall’Acqua says. “So if that money has gotten lost within [people’s] overall spending, it’s going to be a big shock when they then have to resume paying.”

Setting aside money now in a separate savings fund can help soften the blow.

3. Plan holiday shopping

Inflation could make holiday gifts a little pricier this year. Create a shopping list and think about how much you can afford to spend. “Figure out what that would require for you to start saving on a weekly or monthly basis and start putting that money aside right now,” Dall’Acqua says.

Starting on shopping early can also help you manage the cost without accruing debt. Many retailers host major sale events in the summer, so you’ll find discounts well before Black Friday. Amazon’s Prime Day is coming in July. So is the Nordstrom Anniversary Sale.

4. Examine your taxes and benefits

Welte recommends using an online tax calculator to check whether you’re withholding too much or too little. This can help you avoid getting hit with a big tax bill unexpectedly or missing out on extra cash you may need now.

“If you do the math and you’re going to get a $6,000 tax refund, it would be a great time to change your W-4s, get more money in your pocket now to pay for these excess costs that are coming up with inflation rather than waiting until next April to get that refund,” Welte says.

If you need to make adjustments, fill out a new Form W-4 (you can find this on the IRS website) and submit it to your employer.

While you’re at it, evaluate your employee benefit selections. These benefits can include health insurance, life insurance, health savings accounts and flexible spending accounts, plus perks like gym memberships.

Reviewing your choices in the summer can prevent you from becoming overwhelmed in October and November, when open enrollment begins for most companies, says Joe Bautista, a CFP in Lake Oswego, Oregon.

The goal is to ensure you’re choosing the most cost-effective options that suit your needs. For example, “a PPO has higher premiums but a lower cost if you tend to use health care, lower deductibles and copays typically. But if someone doesn’t use that health care, then they can be overspending,” Bautista says.

Don’t worry about getting everything perfect right now. As Bautista says, “financial planning is dynamic, it’s not static.” Check in on your money plans periodically and update as needed.

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3 Steps to Breaking Unhealthy Financial Habits

Posted on by Lauren Schwahn

Some bad habits affect our physical health, like smoking, nail biting or eating too much junk food. But others take a toll on our financial health.

How do you know if you have unhealthy financial habits, and what can you do to build better ones? Take these three steps.

1. Dig into your relationship with money

Relationships with money are complex. It isn’t always easy to identify financially unhealthy behavior. But there are some signs you can look for. Common problem areas include spending more money than you earn, neglecting to start an emergency fund and not saving for retirement.

Taking a financial health quiz can be a good first step toward detecting weak spots. However, our struggles don’t always reflect poor habits or decision-making. Many experts say it’s important to consider the role that systemic issues can play in shaping financial health.

“Not being able to get a living wage, not having medical insurance, having student loans in a career that you can’t find a job. The fact that there’s nowhere in this country that someone who is living on minimum wage can rent a two-bedroom apartment. Those are all systemic issues,” says Saundra Davis, founder of Sage Financial Solutions, a San Francisco Bay Area-based organization focused on providing financial services for low-wealth communities.

If you’re dealing with these kinds of systemic problems, focus on finding support. United Way’s 211 service can connect you with resources if you’re struggling to pay bills or afford basic needs.

On the other hand, if your income should be enough to cover your expenses but doesn’t, that’s when you should look at your behavior, Davis says. What choices are you regularly making, and what do you have the power to control?

Look for patterns. Maybe you shop online when you’re bored or upset. Or you ignore your debt because it’s overwhelming. Maybe you tend to spend windfalls instead of using the money intentionally because your family didn’t emphasize the importance of saving growing up.

Emotions and experiences can have a major impact on our money habits. That’s why it’s also possible to develop unhealthy habits if you’re in good financial shape. For example, a person who pays all their bills on time and has plenty of savings might still feel anxiety around spending or argue about money with a partner.

“Often there’s that history of financial scarcity and loss somewhere in their background that’s unresolved that leads them to not be able to fully connect with the fact that they’re actually financially secure now,” says Ed Coambs, a certified financial planner and financial therapist in Charlotte, North Carolina.

Once you better understand what’s behind your unhealthy habits, you can begin to repair them.

2. Set personal goals

Ask yourself, “Where are you trying to go? And where are you right now? And then how do you bridge that gap?” Davis says.

Setting financial goals can put you on the path toward healthier habits. Your goals can revolve around specific dollar amounts, such as becoming debt-free or saving three months’ worth of expenses in an emergency fund, Davis says. Or, the goal might be about changing your money mindset, such as becoming more thoughtful about your spending or getting comfortable discussing money with others.

Create a plan that supports your vision of financial health. Say you want to boost your emergency savings or make credit card payments on time. Automating those transactions can help. You can transfer a specific amount from your checking account to savings each month or set up minimum credit card payments through your issuer’s website.

Coambs suggests checking in on your finances once a month or every couple of months. Review your budget and behavior to determine whether you’re on track to reach your goals.

3. Lean on resources

Breaking financial habits can be challenging. But you don’t have to do it on your own. There are people and activities you can turn to, “whether it’s journaling or having a conversation with your partner or some other mode of helping yourself feel safe again around the topic of money,” Coambs says.

There are also many professionals who can offer guidance. A financial therapist, for example, can help you unpack your money relationships.

“All of us have a money history. And if your money history is one where there’s a lot of emotional pain and chaos connected with money, then oftentimes those issues in your past need to be treated much like any other type of trauma,” Coambs says.

You may also choose to work with a financial planner or seek free advice on managing your budget, credit or debt from a nonprofit credit counseling agency.

Along your journey to improving your financial habits, learn to advocate for yourself, Davis says. “What that can do is reduce or eliminate shame, about going to get help wherever you might need it. If that means public benefits, if that means family and friends, whatever that means to you,” she says.

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

Lauren Schwahn writes for NerdWallet. Email: lschwahn@nerdwallet.com. Twitter: @lauren_schwahn.

The article 3 Steps to Breaking Unhealthy Financial Habits originally appeared on NerdWallet.

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How to Crush Your Holiday Debt

Posted on by Lauren Schwahn

The holidays have left without a trace. Well, almost. Long after the decorations have come down, you still have debt hanging around.

Don’t let it put a damper on your year. Here’s what you can do to take control of your holiday debt.

Review what you owe

First, gather a few important details about your debt. Make a list of your accounts for each type of debt you have. Perhaps you spread holiday purchases across a couple of different credit cards and a “buy now, pay later” loan, for example.

For each debt, note how much you owe, the minimum payment amount, interest rate and payment due date. Staying organized can prevent bills from sneaking up on you.

Then, look closely at the receipts from your holiday purchases, says Bruce McClary, senior vice president of communications for the National Foundation for Credit Counseling. “Compare those with what’s listed on your credit card statement to make sure that you’re accurately being charged and there are no errors that could end up being costly,” McClary says.

Fit it into your budget

Figure out how much you can afford to pay toward debt each month. The 50/30/20 budget is one framework you can use to balance your debt with your income and other expenses. With this rule, 50% of your monthly income goes toward necessities, 30% goes toward wants and 20% goes toward savings and debt repayment.

You can also use budget apps like Mint and You Need a Budget to automatically track your spending by category, says Jeff McDermott, a certified financial planner in Saint Johns, Florida.

“That just gives somebody a baseline to get a sense of, ‘What do I normally spend? What sort of cash flow should I have to start paying down some of this debt? Are there things that I’m overspending on that I should be able to reduce a little bit to free up some cash to attack the debt?’” McDermott says.

Pick a payment strategy

Once you have a solid understanding of how much you owe and what your budget is, make a repayment plan. You’ll pay off your holiday debt sooner if you make more than the minimum monthly payments.

McClary suggests using online debt calculators or tools to estimate your debt-free date. “You can test out strategies of adding different amounts to the minimum payments to see how quickly it would pay off.”

If you’re unable to pay beyond the minimum on multiple debts right now, it’s OK to tackle it one at a time. There are two main methods for prioritizing repayment: debt snowball and debt avalanche.

With debt snowball, you pay extra on the debt with the smallest balance first, while making the minimum payments on others. Once you’ve erased that debt, roll the amount you were paying into paying off the next-smallest debt, and repeat. With debt avalanche, you focus on the account with the highest interest rate first.

“The avalanche, where you attack the highest-interest rate debt first, usually makes the most logical sense. It’s the best from a math standpoint,” McDermott says. “The one disadvantage to that: It can sometimes be hard to feel like you’re making progress if that particular card is really high.”

Which method is right for you? Pick the one that you’re going to feel more motivated to stay on track with, McDermott says.

Explore ways to ditch your holiday debt faster

Here’s what you can do to speed up the debt repayment process:

  • Consider consolidation. Debt consolidation combines multiple debts into one payment, typically through a personal loan or balance transfer card. This approach can make your debt easier to manage, and could reduce the overall interest rate you’re paying on it. Usually, you’ll need a good or excellent credit score. Before applying, McClary suggests obtaining a copy of your credit report and checking your credit scores to get an idea of whether you’ll qualify.
  • Negotiate with creditors. Picking up the phone can also pay off. “If you think the interest rate you’re being charged is not the best rate you could qualify for right now, have that conversation with your credit card company and see if there’s a lower rate that they can give you or better terms on the card,” McClary says.
  • Scrounge up extra money. An increase in income gives you the flexibility to pay down debt faster. You can earn money on the side (say through a dog-walking gig or cash-back app) or use a windfall, such as a tax refund.

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

Lauren Schwahn writes for NerdWallet. Email: lschwahn@nerdwallet.com. Twitter: @lauren_schwahn.

The article How to Crush Your Holiday Debt originally appeared on NerdWallet.

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Make a Plan to Get Your Money Resolution Back on Track

Posted on by Lauren Schwahn

We’re three months into 2021. Let’s check on those financial New Year’s resolutions. (Remember those?) Quite possibly, they’ve already gone awry.

Maybe you planned to build a $1,000 emergency fund, but the balance is still zero. Or perhaps you swore off takeout, yet you’re scraping the last bite of chow mein from a paper container as you read this.

Don’t beat yourself up. You don’t have to give up on your goal because of a setback.

“There’s nothing magical about New Year’s, and you don’t have to wait until 2022 to try again,” says Amy Hubble, a certified financial planner and founder of Radix Financial LLC in Oklahoma City.

Here’s how to salvage your money resolution.

Figure out what went wrong

Step back and examine why you couldn’t stick to your resolution in the first place. Possible culprits: the goal was vague, too ambitious or lacked a plan. For example, say your resolution was to save money. That didn’t address how much to save, how to save it and so on. A more effective resolution might have been to put $100 from each paycheck into a savings account.

Hubble recommends using the “SMART” goals framework to set resolutions. That stands for specific, measurable, achievable, relevant and timely, she says. Was your goal missing any of these elements? If so, there’s a good chance you can salvage it by restarting with this approach.

But sometimes resolutions are beyond rescuing. If your financial situation has changed since you set it — say you lost your job or unexpectedly faced a major home repair — it’s perfectly acceptable to tweak it or walk away.

“Financial planning is a process, not an event,” says Trent Porter, a certified financial planner, life coach and founder of Priority Financial Partners in Durango, Colorado. “Life’s going to change, and your goals and how you get there are going to need to adapt.”

Know your reason

Ready to give your resolution another go? Ask yourself why you’ve chosen this goal and what exactly you hope to accomplish.

“Maybe it’s less stress on your marriage or partnership, maybe it’s the ability to go on vacation once the world opens up again, and maybe it’s the ability to retire one year earlier,” Hubble says.

Having a personal reason in mind can inspire you to see it through.

Take smaller steps

If you know your “why” but struggle with how to work toward the resolution, try making “little plans within the big plan,” Hubble says. Think about what you can do on a daily, weekly or monthly basis to make reaching your 2021 goal more manageable.

For instance, if your financial resolution is to pay off $10,000 in credit card debt, calculate how much you need to pay each month to meet that goal, Hubble says. Then, focus on that smaller chunk.

Seek an accountability partner

Find someone to discuss your resolution with. A spouse, roommate, friend or co-worker can shepherd and encourage you. Consulting a partner you share finances with is especially important.

“If their goals aren’t in alignment or they’re not supportive of what you’re trying to achieve, it’s going to make it a lot more difficult,” Porter says.

Turning to an expert, like a financial planner, is also an option. If you have a complicated financial situation or resolution, they can help you craft a customized plan.

Automate your resolution

Automating the work allows you to make strides even if you lose momentum or are prone to forgetfulness. You can set up recurring bill payments, transfer money between bank accounts or track spending with an app, for example.

If you need to pay $200 toward a credit card bill every month, have that payment automatically taken out on payday before you have a chance to overspend, Hubble says. “Make it where it’s almost harder to not pay that bill.”

Check your status

Don’t get too comfortable. Schedule quick check-ins with yourself or your supporter to monitor your progress. Once a month should suffice for most resolutions.

At each check-in, add up how much you’ve saved or spent so far and compare that with where you expected to be at this point. Note any roadblocks. Then you can decide whether to carry on or refine your technique.

Success won’t happen overnight. You’ve got roughly nine months left this year to hit your resolution goal. Leave the rough start behind and put your new plan in motion.

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

Lauren Schwahn writes for NerdWallet. Email: lschwahn@nerdwallet.com. Twitter: @lauren_schwahn.

The article Make a Plan to Get Your Money Resolution Back on Track originally appeared on NerdWallet.

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How to Nail a No-Spend Month

Posted on by Lauren Schwahn

Holiday spending always gets the best of me. The gifts, the food, the Christmas tree and decorations — sandwiched between two monthly rent payments — siphon money from my bank account. Every year I feel the sticker shock, briefly tuck my tail between my legs, then carry on like it never happened.

But this year I’m trying something different. I’m committing to a no-spend January. That means I’m freezing spending on unnecessary purchases this month to build my savings back up. Goodbye, mindless Target-app browsing. See you later, desserts.

I’m not the only one to emerge from the holiday season in less-than-ideal financial shape. More than half of 2019 holiday shoppers (55%) took on credit card debt, according to NerdWallet’s 2020 Holiday Shopping Report.

If you’re looking to shed holiday debt, boost your savings or simply manage your money better, a spending freeze can get you on track. Here’s how to embark on (and stick to) a no-spend month.

Customize it

A “no-spend month” sounds strict, but there are no hard-and-fast rules. Obviously, it’s about reducing spending. But resolving to spend no money whatsoever is unrealistic. There’s no need to take it to an extreme, especially during a pandemic when many of us have already scaled back our spending.

Everyone has expenses they can’t go without, like groceries and electricity. You get to decide which categories are untouchable and which ones to cut.

Start by defining your discretionary expenses, known as “wants.” For many of us, those include restaurant dinners, alcohol or frivolous online shopping. Leo Marte, a certified financial planner based in Huntersville, North Carolina, suggests using a budgeting app to easily identify your nonessential spending categories. Then, pick which ones to pause.

Next, choose a time frame. A no-spend challenge can last a full calendar month, 30 days, four weeks or whatever period you prefer. Some people schedule a “Frugal February” because it’s the shortest month. If that still seems too long, start with a week and see how it goes.

Know your motivation

Before diving into a no-spend month, really think about what you’re trying to achieve, says Kristin Larsen, who runs the blog Believe in a Budget. Are you planning to pay down holiday debt or student loans? Do you want to start an emergency fund or save for a trip?

“If you’re just doing a no-spend month because it’s fashionable or because you thought it was a nice idea and somebody shared it with you on social media, you’re not going to stick with it,” Marte says. 

Attaching a specific goal can create a stronger emotional connection and inspire you to carry on.

Find a support system

A no-spend challenge can feel daunting if you go it alone. Telling family and friends about it — or better yet, encouraging them to join — gives you a “built-in accountability system,” Marte says. Your squad can provide crucial tips, reassurance or even constructive criticism when you need it.

Making your journey public on social media networks or other online forums takes accountability one step further. It shines a spotlight on successes and failures, which is exactly what some people need to stay the course.

“Maybe every time you make a meal at home and don’t go out to a restaurant, you post it on Instagram. And your tribe gets excited and gives you those kudos and that recognition you need to stick it out,” Marte says.

Get creative

When Larsen goes through a no-spend period, she looks for no-cost resources to fill the void. She downloads free audiobooks through her library to get her entertainment fix. Instead of grabbing food to go, she uses a website that suggests recipes based on ingredients she already has in her pantry. (Try SuperCook or MyFridgeFood.)

Many expenses have free alternatives. See what clever workarounds you can come up with.

Build in a buffer for cheat days

Mistakes and surprises happen. Planning for them will help you avoid feeling shame or throwing in the towel.

“You could decide, ‘I’m not going to eat out at any restaurants this month, but I’m going to put in the budget for a takeout night in case we have a bad day at work and don’t want to cook,’” Marte says.

It’s also OK to set aside a little reward money in your budget for when things go well. But it’s important to set limits in advance so you don’t go overboard.

“If you’re earning money or you have some money to spend, you should be able to enjoy it,” Larsen says. “But I think there’s definitely a difference between binging or splurging versus treating yourself.”

Creating a “cheat day fund” rather than scheduling a specific day of the month to spend willy-nilly can curb a major setback.

It’s up to you to decide whether you want to return to your regular spending habits when the month is up. If a spending freeze works well, try to keep the momentum going.

I’m ready to crush it. Are you?

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

Lauren Schwahn writes for NerdWallet. Email: lschwahn@nerdwallet.com. Twitter: @lauren_schwahn.

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Picking a Pandemic Side Gig Takes Hustle

Posted on by Lauren Schwahn

Side gig. Side job. Side hustle. It goes by many names and serves many purposes. For some, it’s a way to keep the lights on. For others, it’s an opportunity to save for a goal or follow a passion.

Since the onset of the COVID-19 pandemic, millions of Americans have become unemployed. Many are turning to the gig economy to make money. And it’s booming.

“Obviously online shopping has become huge, and so delivery services are packed. You’ve got Amazon Flex trucks practically ramming into each other,” says Kathy Kristof, editor at SideHusl.com, a website that reviews hundreds of online moneymaking platforms.

Before you rush into a side gig, scrutinize the risks, the pay and other important details. Here’s how to choose the right pandemic side job for you.

Assess yourself first

As you begin searching for a side hustle, think about your experience, skills and interests. But more importantly, consider what you’re comfortable doing.

Are you willing to be in close contact with other people, or would you prefer a socially distant position? Are you part of a high-risk group for COVID-19? What would happen if you got sick and couldn’t work? The answers to these questions will help you decide what jobs to pursue.

If either your health or financial life could be ravaged by illness, you’re going to have to be more careful than the people without those risks, Kristof says.

“Somebody who doesn’t have that same sort of risk might feel completely comfortable doing contact-free deliveries for Grubhub or Dumpling or any of these other delivery services,” Kristof says. “But somebody who is high risk, you want an online job like online tutoring.”

Expand your definition of ‘side gig’

“Side gig” has become synonymous with a handful of jobs: dog walking, delivering groceries and driving for Uber or Lyft. But these aren’t the only opportunities occupying the space.

You can teach a virtual yoga class, for example, sell clothing online or work as a freelance designer. Through services like TaskRabbit, you can get paid to do odd jobs like yardwork and assembling furniture.

Side and part-time jobs tend to rise during economically uncertain times, according to Brie Weiler Reynolds, career development manager at FlexJobs, a job-search site for remote and flexible jobs. Chances are there’s something up your alley.

Roles outside the gig economy can be worth exploring, too. Features typically associated with side gigs, including flexible schedules and the ability to work from home, are increasingly spilling over into professional roles. Remote jobs posted on FlexJobs in career categories such as marketing, sales and project management have increased over 50% since March, according to a recent analysis from the site.

“Because we’ve never had to do this from home before, there was never as much acceptance. Now you’re getting widespread acceptance from the whole of corporate America,” Kristof says.

Protect yourself and your finances

Once you narrow down your choices, dig into the details. Get a sense for what it’s like to work in a role, what the requirements are and how much you’re likely to earn before you commit.

You can avoid surprises by looking up a company’s Better Business Bureau rating, reading through the fine print on its website and checking out reviews on sites like SideHusl and Indeed.

“Let’s say you’re interested in delivery jobs, and you’ve got DoorDash, Instacart and Postmates. You want to look at each site and see what the fees are,” Weiler Reynolds says.

Many platforms charge registration, listing or commission fees, which can cut into your earnings. Some gigs also require you to pay expenses like gas and insurance for your vehicle. If you’re a rideshare driver, delivery driver or mover, your personal auto insurance policy doesn’t cover you for commercial risk, Kristof says.

“Some online platforms automatically cover you with a commercial policy. Others do not. So you should always look for that if you’re working for an online platform,” Kristof says.

Still, that won’t necessarily cover you in all circumstances, such as when you’re en route to pick up an order. Talk to your insurance company to ensure you get the proper protection.

You’ll also want to find out whether you’ll be classified as an employee or independent contractor. This determines how you’ll pay taxes and whether or not you’ll be entitled to certain benefits. Independent contractors need to set aside a portion of their pay for taxes themselves. Employers automatically withhold income taxes for employees and usually offer health insurance, 401(k) matches or paid time off.

Weiler Reynolds says freelancers or contractors may also have to pay taxes quarterly, which can be a bigger time investment.

Don’t forget to make safety a priority. Find out what protective measures the company or local government requires while you’re on the job. If you’re unable to avoid contact with others, prepare to take appropriate precautions, such as wearing a mask or gloves.

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 Picking a Pandemic Side Gig Takes Hustle 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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4 Expert Tips to Get Hired From Home

Posted on by Lauren Schwahn

Job hunting has always been a little stressful. OK, a lot stressful. A pandemic certainly hasn’t remedied that.

Rather, it’s changing the landscape.

For one, it’s heating up competition. Millions of newly out-of-work Americans are chasing employment simultaneously. Applicant pools are also expanding geographically as remote work becomes widespread.

Plus, navigating the entire hiring process from home presents its own obstacles. If you’re in a community that hasn’t fully reopened or are seeking a permanent work-from-home job, it’s likely the new reality.

Here are four ways to fine-tune your at-home job hunt.

Build your skills

These uncertain times boast at least one advantage for job seekers: Many resources for online learning are now free or more affordable in response to impacts of the COVID-19 outbreak. So make yourself more marketable by learning or developing a skill, or getting a certification (think mastering Excel or dipping a toe into project management). You can find courses for just about any topic on platforms like Coursera and Udemy.

“Then, put that bullet point on your resume. Even if they don’t have a formal certification process, that’s still a big deal to say you invested that amount of time in yourself,” says Julie Kratz, founder of Next Pivot Point, a leadership training organization.

This step can be even more impactful if you’ve had a gap in work experience during the pandemic.

Give yourself credit

Maybe you don’t meet 100 percent of the listed requirements for a position or you’re considering a new career path. Don’t let that stop you from applying.

Be confident and try not to apologize for or otherwise call attention to anything you’re lacking, says Jeannie Kim, vice president of content at career site The Muse.

“What you should do instead is really play up the things that you do have. Play up the skills you have that are in the job description. Play up the background that you have, and make sure that you’re telling the story of how you’re qualified to do the actual responsibilities of the job.”

Highlight your adaptability

Businesses across the country are settling into new normals. That might involve reconfiguring workspaces or learning to operate remotely. You’ll make a good impression by demonstrating you can roll with changes. How do you do that? Showcase personality traits and attitudes like flexibility, empathy and creativity, known as soft skills.

“With people not able to be in the same place as their coworkers, being able to show that you have strong communication and collaboration skills is really important right now,” Kim says.

Resumes and application forms often revolve around hard skills: the technical, measurable skills like proficiency in a particular software or programming language. But your cover letter and interview can be suitable places to insert soft skills.

Transferable skills are also crucial to mention, especially if you’re looking to change roles or industries. Those are skills that apply to a wide variety of roles and can include both soft and hard skills, such as sales, writing or leadership.

Previous telecommuting experience can give you a leg up, too.

“Experience managing a remote team would be huge right now because very few managers have managed like this,” Kratz says. “But even having successfully contributed to a virtual team, especially if you can lead with the accomplishments you achieved on that team, would go really well.”

Prepare for virtual interviews

The interview process could be mostly, or entirely, virtual — even if the job itself isn’t slated to be. Standard interview advice still applies: Dress professionally, ask smart questions and so on. But you should also adopt a few new best practices.

If you’re granted an interview, ask the company what the process will look like. How long will it take? Who will you meet with? Will it be over Zoom, Google, Skype or something else?

Then, do a dry run. Test the audio, video and internet connection on your device. Make sure there’s nothing distracting or inappropriate in the visible background (a ceiling-high stack of dirty dishes isn’t a good look). Get familiar with the software so you’ll know where the controls are located.

“You don’t want to have your first experience with that software or that platform be struggling to log onto it while you know that a recruiter is waiting,” Kim says.

For good measure, set up a mock interview with a friend who can let you know how everything looks and sounds on the other end. Finally, tell the people you live with when you’ll need access to shared equipment and quiet, uninterrupted time.

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 4 Expert Tips to Get Hired From Home originally appeared on NerdWallet.

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