Personal Finance

  • How To Start Dividend Investing For Beginners

    I love watching investing videos on YouTube about dividend stock investing, and I put off doing it myself for almost two years.

    However, I know one of the biggest investing mistakes is not taking action toward a goal so in early 2020, I started an account specifically for dividend investing.

    Why Start Dividend Stock Investing?

    Are you interested in investing in dividend stocks? Do you know why people choose dividend stocks? Why should you start investing in dividend stocks?

    Let’s look at the basics of dividend stock investing!

    What is a dividend stock?

    If you are first being introduced to dividend stock investing you might wonder what exactly dividend stocks are.

    Divide stocks distribute a portion of the company’s earnings to their investors on a regular basis. Most dividend stocks pay the investors quarterly but some do it on a different payout schedule like monthly.

    When looking at dividend stocks you will see it has a dividend yield, which is the percentage of the stock’s current price that is paid out to shareholders.

    If you hold shares of a stock with a dividend yield then you will be paid out based on that number. It is important to realize that stock dividend yield’s can change over time in response to the market and companies can also suspend or decrease dividends if they need to based on earnings.

    When you receive a dividend payment it means the company things you will benefit more as a shareholder than they would by reinvesting that money. This is why newer companies tend to not have dividend payouts but older companies are more likely to pay dividends.

    Why invest in dividend stocks?

    Many people choose dividend stocks for their investing strategy when they want an investment that offers regular income.

    Divide stocks distribute a portion of the company’s earnings to their investors on a regular basis. Most dividend stocks pay the investors quarterly but some do it on a different payout schedule like monthly.

    Investing in dividend stocks mean you will be building up an income stream that is made up of those dividend payouts.

    Dividend stocks are a great option for buy-and-hold type investors who plan to reinvest the dividend because your dividend payouts will be buying more of the stock for you.

    Dividends are only one part of the stock’s total rate of return because these stocks also change in share price like every others stock. The stocks increase in return also provides growth to your overall portfolio.

    What are the benefits of dividend stocks?

    There are so many benefits of investing in dividend stocks.

    The first of course, is that income stream from dividend payouts.

    The next is that dividend stocks tend to be less volatile than growth stocks so they can help you diversify your overall strategy with a different type of risk.

    Dividend stocks like the Dividend Aristocrats can be a reliable source of income over the years. (Read more about these stocks further on!)

    Personally I chose building a dividend stock portfolio for the creation of an additional income stream that would continue to provide income in the future. I also wanted to diversify and play around with learning about specific companies since my main investments are all in index funds.

    Where To Buy Dividend Stocks

    So how do you invest in dividend stocks? How exactly do you buy this type of stock investment?

    Choose An Investing Platform

    You can invest in dividend stocks on any investing platform that allows you to open a brokerage account to buy individual stocks. Here are a few popular ones that allow you to buy stocks without any commissions.

    You can open brokerage account to buy these stocks. A brokerage account is not a retirement account so keep that in mind.

    You can also open a Roth IRA account and look into purchasing dividend stocks within your Roth IRA as well.

    How To Pick Dividend Stocks

    One area where I think many of us struggle when trying to invest is choosing what to invest in. How do you pick stocks? How do you evaluate dividend stocks?

    Here are a few considerations when trying to choose dividend stocks for your portfolio:

    • Look at the company as a whole financially. Do they have a stable history? Do they have sound financials? Are they in massive amounts of debt or have plenty of cash?
    • What’s the history of the stock? Does the company have a long history of profit growth and dividend increases?
    • Is a dividend sustainable for the company? Evaluate if you think the company is paying out too much of its profits to dividends. Personally I like to see that the dividend stocks I buy don’t pay our more than 50% of earnings as dividends. Keeping earnings allows companies to grow.
    • What is the company’s growth potential? Some companies have limited growth opportunities so you want to consider if the company you are investing in has the ability to grow continually.

    Remember that I’m not an investment advisor so this is just what has worked for me and my opinion.

    If you aren’t sure of which stocks to buy you can always turn to investing experts of a list of stocks that are traditionally known as the Dividend Aristocrats. The Dividend Aristocrats are stocks that have increased their dividends for 25 consecutive years and it can be a great place to get started when you aren’t sure how to begin.

    Here are some curerent examples of Dividend Aristocrats you’ve probably heard of who’ve had a long consecutive record of dividend growth:

    • Aflac (AFL)
    • AT&T (T)
    • Cardinal Health (CAH)
    • Clorox (CLX)
    • Coca-Cola (KO)
    • Colgate-Palmolive (CL)
    • ExxonMobil (XOM)
    • Johnson & Johnson (JNJ)
    • McDonald’s (MCD)
    • Medtronic (MDT)
    • PepsiCo (PEP)
    • Procter & Gamble (PG)
    • Sherwin-Williams (SHW)
    • Target (TGT)
    • Walmart (WMT)

    This is just a small selection of the Dividend Aristocrats and you can find the others through a quick Google search to see which companies are on the current list. The list is updated once a year in January and occasionally some companies can be removed for other reasons.

    The companies on this list have several qualifications and generally have to be large enough and have high share volume to meet demand for millions of investors. This leads companies on the list to generally be good picks because they usually remain stalwarts that are unlikely to be acquired by another company (and are usually the ones doing the acquiring).

    These can be a great place to start as a beginner to choosing dividend stocks since they are companies with a proven track record of paying out dividends.

    Investing in dividend stocks through ETFs

    Another option for buying dividend stocks is to do it through an ETF. ETFs are exchange-traded funds which means they are investment funds traded on the stock exchange just like stocks.

    ETFs can hold assets like stocks, bonds, or commodities and there are many different types including ones made up of dividend stocks. ETFs are bought and sold during the day while the stock exchange is open and this causes the price to fluctuate during the day.

    One of the benefits here is that a dividend ETF usually includes dozens if not hundreds of dividend stocks which spreads out your risk over multiple companies. This generally protects your ability to get a dividend because even if some companies cut their dividend that will have a smaller effect on the fund’s dividend overall.

    When choosing a dividend ETF you should again look to evaluate the fund you are buying:

    • Find dividend ETFs buy searching for them on your broker’s website (find a broker above in “where to buy dividend stocks”)
    • Analyze what the ETF is actually invested in and the details. Consider the actual investments, the dividend yield, the returns over the last 5-10 years, the expense ratio.

    Just like buying a dividend stock you will want to evaluate the ETF in the same way.

    Where I Do Dividend Investing

    I decided to start my dividend investing on the Robinhood App platform.

    My dividend investing portfolio is set up for the goal of achieving a dividend income for my daughter in 15 years or so.

    It’s a long term play for me which is why I buy strong stocks that pay dividends and then reinvest the dividends into my portfolio.

    How I’m Investing In Dividend Stocks

    My plan for investing in dividend stocks in my “Penny Portfolio” is a little bit different than the normal way most people invest. I will be investing a small amount monthly, but I mostly plan to use this as another impulse spending tool. I plan to fund this account irregularly in a couple different ways.

    • First way I will invest in these dividend stocks, whenever I want to impulse buy something my daughter doesn’t need like cute clothes, I will instead invest in her account. She has enough clothes to last til she goes to kindergarten so I don’t need to buy them, I just want to. Instead I plan to buy a stock share with that money and continue to create an asset that will last for decades instead of a piece of clothing she will outgrow in a few months.
    • Second way I will invest in dividend stocks is whenever I sell something of hers that is currently not being used I will invest that amount of money. I have a pile of toys that need to be out of my house soon, so when I declutter I will contribute that amount earned into the Penny Portfolio.
    • The final way I will invest in dividend stocks in this portfolio, is to contribute $10 a month in our normal budget. As you guys know, I like having small amounts like this in our budget just as a reminder of our bigger goals. While it may not be a focus, those little amounts add up in the background as we are doing other things with the majority of our money. Plus, $10 isn’t much and doesn’t hurt out budget since we’ve cut so many regular expenses and focus on free fun activities!

    Free Stocks I’ve Got On Robinhood

    The great thing about growing an account on Robinhood for dividend stocks is that referring other users allows me to earn free stocks.

    People who watch my videos and read my blog are helping build this portfolio of stocks by using my referral link to sign up for Robinhood.

    If you sign up using my link, you will get 1 free stock and I will get 1 free stock as well. So if you use my link you will be contributing to the Penny Portfolio and we will all be building this up to provide an amazing future to the cutest kid I know.

    I’ve been very blessed to get a number of free stocks on Robinhood this year. I made a video sharing some of the free stocks I received on Robinhood during that week:

    I like to share what free stocks I’m getting from Robinhood for a few reasons:

    • to show you what free stocks Robinhood is giving out these days
    • to show you what free stocks you might get for signing up with Robinhood
    • to be transparent about the fact that I am receiving stocks from referral signups (thanks guys!)

    Every single week since I’ve started I have received a few free stocks and I’m thrilled people are getting interested in investing!

    Since this portfolio is 100% focused on dividend investing I’ve sold any stocks that did not pay out dividends and used that money to buy more dividend stocks of our choosing.

    Why Dividend Stock Investing?

    I wanted to share this little dividend stock portfolio project I started in order to let you know why there was a $10 Robinhood line item in our budget for those who were curious.

    February 2020 was the first month for this account and several months later in June 2020 I hit $1,000 invested in my dividend portfolio.

    Now that we have $1,000 in the dividend portfolio in Robinhood we will now work toward hitting $5,000 invested. The ultimate goal will be much higher than this in order to create a steady stream of income from the dividends.

    The companies we are investing in through this portfolio are all companies that we love, trust, and actually use in some way. We’ve chosen to invest in companies that we actually use on a regular basis. This includes:

    • Disney
    • Microsoft
    • Apple
    • Starbucks

    And others! We’ve also bought some shares of a Vanguard ETF that more broadly covers the markets and helps diversify our account overall.

    I’m excited to continue increasing this account and growing it so that we can eventually use the dividends as an income stream!

    This is the perfect time for a reminder that I am not an expert at all and this is just me sharing my personal experience. This is not financial advice, this is just entertainment and me sharing my experience. My stock picks are personal and never a suggestion that you should pick the same. Do your own research!

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  • I Finally Got Life Insurance & It Was Super Easy

    Among the many things I’ve learned from the recent pandemic and job instability is that I need life insurance outside of work. 

    On Youtube, I shared my experience recently applying for and getting term life insurance for myself to help cover my family in case anything happens to me. 

    Why I Got Life Insurance 

    First I want to share the reasons why I decided to get term life insurance outside of my policy I already had at work. 

    1. I knew that while I was covered at work, if I got laid off that policy wouldn’t go with me.
    2. I have a child and if something happens to me I need to know she is taken care of financially.
    3. I have a mortgage and if something happens to me and my income disappears, I want my house to be paid off for my husband.
    4. I want to make sure my family has the resources they need to survive if I’m not able to be here for them. 

    Those are the reasons I decided to get a life insurance policy at this time

    My Considerations For Life Insurance 

    I knew I wanted a few things when I applied for life insurance: 

    1. I wanted term life insurance for 20 years because that would cover til my daughter graduated college. 
    2. I wanted it to be easy to apply and get covered without jumping through hoops. 
    3. I didn’t want a medical exam. I hate medical exams and I have conditions with mental health and asthma.
    4. I wanted affordable rates. I knew that I’m not in perfect health but I wanted to find the best options available to me.
    5. I didn’t want to deal with a sales person trying to push whole life insurance that I didn’t want (this has happened the one other time I looked into getting life insurance personally).  

    Those were the five things I wanted in my particular situation in order to get life insurance. 

    Who I Used For Life Insurance 

    So let’s talk about who I ended up getting life insurance with! I ended up going with Bestow. 

    Like a few companies I use for things I found them through having my YouTube channel. I had mentioned I wanted to get life insurance a few videos back and they reached out to me about applying because they thought they would be a good fit for me.  

    They only offered term insurance and did not require a medical exam because they used complex technology to make decisions about approvals and rates. 

    It sounded good to me but I did a bit of research and read some reviews from other blogs and YouTube channels first. They had good reviews and policies were provided by a traditional company with a good rating so it felt like it was worth pursuing. 

    In the end I decided it was worth getting a quote from Bestow to see if I would qualify for affordable rates for term insurance. It took less than 10 minutes to get a quote since they only do a soft credit check. I figured it was worth getting a quote from Bestow and a couple other online life insurance companies that had similar models. 

    I did end up purchasing a policy with Bestow. In fact from start to finish the process took me 15 minutes and my husband came home from a gas station run where I told him I’d bought life insurance. I can’t be sure but I think he was a bit upset after his experience getting life insurance through a traditional company where he had multiple exams and 4 months of back and forth to get covered.  

    I had put off getting my own policy outside of work strictly because he had such a negative experience going through Zander and using a company they sent him to. I didn’t want to go through justifying my mental health history or my asthma or my weight or any number of things that I’m always working to improve but don’t look great on an application. In the end no medical exam was what felt like the best fit for me right now. 

    My new life insurance policy is for $300,000 for $33 a month. I know it’s probably not the best rate and I may be able to get a lower rate through a traditional company that underwrites policies but I’m very happy with this amount for my personal situation. It would pay off our house with less than half the money and the rest could be put aside for my daughter. I still have a policy at work as well. 

    Another reason why I liked Bestow was because I could pay online and set up auto payment for my monthly premium. Compared to my husband’s policy which forces us to pay quarterly with a check, this was so much better. 

    Getting Life Insurance Quotes 

    What I’ve learned from this experience is that it’s worth getting a life insurance quote from a couple different companies especially if they don’t require an exam. It does not affect your credit and you can compare your options easily when you aren’t going through a long medical underwriting process. 

    In my experience getting a quote and completing my policy took about 10 minutes start to finish (15 for me because I did record the experience and got distracted) and the whole process was so convenient that I’m kicking myself for not doing it sooner.  

    If you are looking for term life insurance, you can get a quote from Bestow and see if you qualify!

    It’s worth applying to see if you can get rates as low as $15 a month for $250k with no health issues. I will leave an affiliate link below if you want to apply.  

    Do you have a life insurance policy outside of work? Get your free term life insurance quote today.

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  • What’s the Right Age for Life Insurance?

    When do you need life insurance? When is the best time to purchase life insurance? Today I’m going to be looking at the different ages and if you should be purchasing life insurance at that age.

    I recently purchased my first life insurance policy and the experience encouraged me to learn more about life insurance in general – including when most people should apply for it.

    There are things to consider about buying life insurance at every stage of life, but when is the right time?

    The vast majority of people interested in life insurance obtain their policies between the ages of 20 and 40, and there are different positive aspects about life insurance depending on your situation.

    Why should you apply for life Insurance? 

    Life insurance is an amazing tool that can provide protection for your family in case of the worst situation where you would pass away.  

    Life insurance is one of those things most of us ignore for far too long for various reasons, from not having the extra money in the budget to not wanting to deal with the frustrating process of applying. It’s all too easy to push off applying for life insurance when you know you have to answer a ton of questions and have a medical exam.  

    Luckily more and more companies have realized that people are avoiding life insurance because the traditional process can be so complicated and frustrating.  

    Getting life insurance without an exam can take less than 10 minutes, which removes a lot of the barriers to getting a life insurance policy.

    Life Insurance At Ages 20-29

    Most people think of age 20 as far too young to start thinking about life insurance or anything else longer-term than dinner that night. I know personally I lived my life in 6 month increments for almost my entire 20s and life insurance was not on my radar at all.

    However, a life insurance policy can often be a prudent investment for a typical person of this age if there are children involved or there are no assets to cover your passing.

    Many people in their early 20s have amassed considerable debt due to student loans, credit cards and other expensive lifestyle choices. While their debts will not manage to outlive them, the people they love will be left to bear the consequences of covering funeral expenses which can cost $10,000. A life insurance policy can provide funds for settling debts like a mortgage as well as final expenses to ease the strain on a family.

    Another benefit of getting a life insurance policy at this age is the very, very low rates you will be given due to your age.

    Younger people are eligible for much better rates on life insurance policies than those who wait to purchase a policy at an older age. This will save thousands of dollars over the life of the policy due to lower premiums even though you are starting sooner.

    If you start a term policy in your 20s you will likely want to get a longer period of coverage to cover the next 2-3 decades where you will be getting out of debt and building wealth.

    Life Insurance At Ages 30-39

    By the time you hit your 30s you are likely already considering life insurance. By this time frame most people have children or spouses. There is more responsibility to provide for the people in your life.

    Most 30 year olds are still in fairly good health and have much of their lives before them. You likely will outlive a term policy you get at this age. Nevertheless, this is an important age range to consider life insurance.

    Because the majority of people at this age are married or have children, holding a policy that can provide for their protection in case of the unexpected becomes extremely important.

    A life insurance policy can provide for immediate expenses, pay off your mortgage, and provide a monthly income to replaced yours. This is extremely important if your family loses both you and your income.

    Although a 30 year old will have to pay a higher premium than a younger applicant, the rates are still competitive provided your health remains good.

    Life Insurance At Ages 40+

    By this age, if you haven’t gotten married or had children, you probably won’t but you may or may not have life insurance.

    If there is no one officially depending on your salary and you’ve built up substantial financial assets, then you likely don’t need life insurance.

    If you do have a family or any dependents then you need to immediately look into life insurance if it fits your situation. If you have achieved a high income then you need to make sure that income will be adequately covered if you are no longer here.

    The options for life insurance policies are much more limited and more expensive in the age range, especially if you develop health concerns as most people do as they age.

    Other situations where you might want to consider life insurance:

    • A life insurance policy can protect a business partner in case of your untimely death from years of stress-free living.
    • A life insurance policy can provide an inheritance for anyone you wish to bless regardless of if it’s needed.

    There may be a number of reasons why you want to purchase life insurance after the age of 40.

    When should you get life insurance?

    Life insurance is not right for everyone but it is important to consider several factors:

    • Does someone depend on your income?
    • Do you have assets that provide financial stability?
    • Do you have liabilities that will need to be covered?
    • If you are no longer here, will you want the money to help someone make it through?

    No one can answer those questions for you but you will have to look at your own situation and decide if life insurance is right for you in your current situation.

    Life is extremely unpredictable, and so it is best to carry a good policy as soon as you’re able. An outstanding policy will provide benefits and security for you and those you love throughout your life and even afterward. The right age to seek out a life insurance policy is debatable, but the fact that it is more expensive the longer you wait is not.

    How much life insurance do I need? 

    Life insurance needs vary from person to person and you need to take into account personal information about your specific situation. 

    For example if you are healthy, young, single and have no dependents then you might not need life insurance.  However, if you have a kid or four then you definitely need to get life insurance to make sure your children are taken care of if the worst happens. 

    In my personal opinion at the bare minimum life insurance should cover having your home mortgage paid off and multiple times your annual salary.  Many experts recommend 10-12 times your annual salary for life insurance.  

    When did I get life insurance?

    Personally I waited far too long to get life insurance and even went two years after my daughter was born without it. During the coronavirus pandemic of 2020, I finally realized I needed a life insurance policy outside of work for several reasons:

    1. I knew that while I was covered at work, if I got laid off that policy wouldn’t go with me.
    2. I have a child and if something happens to me I need to know she is taken care of financially.
    3. I have a mortgage and if something happens to me and my income disappears, I want my house to be paid off for my husband.
    4. I want to make sure my family has the resources they need to survive if I’m not able to be here for them. 

    Those are the reasons I decided to get a life insurance policy at this time. I was able to get an affordable rate policy while in my 30s and it will cover me during my 30s, 40s, and into my 50s. I’m happy with that solution and sleep better at night after getting my own life insurance policy.

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  • Bestow Review: Term Life Insurance With No Medical Exam

    Getting traditional life insurance can be a hassle. When my husband applied for his a couple years ago it took him months of back and forth phone calls, letters, and multiple medical exams. The whole experience was so bad it put me off from applying for life insurance because I didn’t want to go through that process too.  

    Recently I discovered many life insurance companies now use technology and big data instead of traditional underwriting methods like physical exams.They’ve made the process so easy that I finally applied for my own term life insurance outside of work. I applied through Bestow and today I’m reviewing my experience along with sharing why you should apply for life insurance and some factors to consider.  

    If you are looking for life insurance without having to do a medical exam, and are between the ages of 21 and 54, then you might want to get a free quote from Bestow. Bestow offers quotes quickly for term life insurance and the whole process is done online. Keep reading to learn about my experience and more on how they manage to do this.    

    Why I applied for life insurance 

    If I learned one thing from the recent pandemic and job uncertainty, it was the need to get life insurance outside of work. 

    For months I’ve had viewers leave comments on my YouTube channel suggesting I get life insurance outside of what I carry at my job. I brushed them off because I’m still young and my job has been very stable and very secure… until March 2020. Within a week I wondered if I would be laid off and lose not only my job, but my life insurance too. 

    I knew I needed to apply for life insurance outside of work but I’d been putting it off for a long time because I didn’t want to do a medical exam or a lot of paperwork with personal questions. My husband applied for life insurance with a traditional life insurance company a few years ago and it literally took him months to get qualified and get the policy started. Watching that experience made me drag my feet even though I knew I needed life insurance especially as a mom. 

    Because I’m a typical millennial I started looking for online life insurance companies that would offer traditional low-cost term life insurance without all of the hassle that could sometimes come  with traditional life insurance companies.  

    Why should you apply for life Insurance? 

    Life insurance is an amazing tool that can provide protection for your family in case of the worst situation where you would pass away.  

    Life insurance is one of those things most of us ignore for far too long for various reasons, from not having the extra money in the budget to not wanting to deal with the frustrating process of applying. It’s all too easy to push off applying for life insurance when you know you have to answer a ton of questions and have a medical exam.  

    Luckily more and more companies have realized that people are avoiding life insurance because the traditional process can be so complicated and frustrating.  

    Enter Bestow, a newer online company that leverages technology to give a quote in minutes for 10 and 20 year term life insurance policies.

    What is Bestow? 

    Bestow ​says it’s on a mission to make term life insurance “simpler and more human”. 

    They are working to make the process of purchasing life insurance faster and less painful for consumers by eliminating many of the traditional obstacles. Bestow focuses on big data to underwrite their insurance policies  rather than requiring medical exams and bloodwork. They use the information from your application and data about you with their algorithm to decide if you qualify and at which price.  

    The goal at Bestow is to provide life insurance to people in minutes not weeks (or months in the case of my husband’s experience with another company).  

    The policies from Bestow are provided by North American Company for Life and Health Insurance® which is rated ​A+ (Superior) by A.M. Best​, which is the second highest rating available out of the 15 categories A.M. Best rates. 

    What kinds of life insurance does Bestow offer? 

    Bestow has a  range of life insurance policy options with coverage from $50,000 to $1,000,000. They have 10 year terms and 20 year terms that are designed to fit your needs. 

    Bestow only offers term life insurance which is a plus since it’s the only kind of life insurance I would personally consider or recommend.  

    You can apply for a 20-year policy if you’re 21 to 45 and for 10-year policies, the age range is 21 to 55. 

    What if I’m not super healthy? 

    I’ll be honest, my weight and not being very healthy is something that held me back from applying to get traditional life insurance. I went with life insurance through my employer because I knew it would be automatically issued regardless of my health status. I’ve tried for years to lose weight unsuccessfully and this made me delay purchasing life insurance. 

    I encourage you to apply for life insurance through Bestow even without perfect health. The company does apply screening for major diseases like heart disease, cancer, HIV, etc, but you can apply to see if they have a policy that is right for you. If not, then traditional insurance might be the better route to take.

    How much life insurance do I need? 

    Life insurance needs vary from person to person and you need to take into account personal information about your specific situation. 

    For example if you are healthy, young, single and have no dependents then you might not need life insurance.  However, if you have a kid or four then you definitely need to get life insurance to make sure your children are taken care of if the worst happens. 

    In my personal opinion at the bare minimum life insurance should cover having your home mortgage paid off and multiple times your annual salary.  Many experts recommend 10-12 times your annual salary for life insurance.  

    How much does coverage offered by Bestow cost? 

    I personally decided to get roughly 7 times my annual salary with this policy because I do also have another life insurance policy through work and we have a mortgage balance on the lower end.  

    For me and my specific details this means my $300,000 policy will cost us roughly $33 per month. I’m very happy with this price point. It might not be the lowest rate possible but it was reasonable, something we could afford, convenient to get, and removes the worry of not having any life insurance outside of work. 

    Life insurance starts at $8/month. Worth getting a quote to see if you qualify for those kinds of rates.  

    My Application Experience With Bestow 

    The application process with Bestow took under 15 minutes from start to finish. I know because I recorded it for a video.  

    Side note: I also know that it took less time than my husband too to take a trip to the gas station. When he returned I told him I got life insurance and it was done which blew his mind after having a month long process to get his policy with another company. It was almost comical to explain I got my life insurance so easily.  

    What I liked about applying for life insurance through Bestow: – Fast quotes. It only took a few minutes to get my quotes for life insurance. – All online applications. I rarely like to do anything that requires phone calls or mailing in something so an all online life insurance application fit my preferences. This made it super convenient to apply during a statewide stay at home order too! – Affordable. The rates were less than I expected based on what I thought I’d pay with no medical exam and were very affordable. This might sound like a weird reason, but I use a lot of all online companies to get the best rates but I like to know that it’s not a fly-by-the-night company that will disappear. Policies offered by Bestow are provided by a big name in the life insurance industry – North American Company for Life and Health Insurance ®. 

    Final Thoughts On Bestow

    If you don’t have life insurance it may be worth it to get a free quote with Bestow. (Or even if you do have life insurance already – I’m making my husband get a quote to see if he can get better rates or not).  

    Applying for life insurance through Bestow might be right for you if you don’t want the hassle of a doctor’s visit, blood test, or medical exam in order to get life insurance.  If you are anything like me these things may have put you off getting life insurance for far too long.  

    Because Bestow doesn’t require a medical exam in order to get life insurance they might not be able to offer you the lowest rates possible. While Bestow is affordable, other companies might offer lower rates if they fully underwrite each quote with actual medical information from an exam. Bestow still offers competitive rates so you’ll have to check to see if you qualify for a term life insurance policy at a great rate. It is worth it to check out multiple sources if monthly premiums are your biggest concern with life insurance. 

    If you are extremely healthy you may want to shop around to find out if you can get a better rate elsewhere after providing your information and undergoing a medical exam.

    Bestow was a good fit for me and my situation but you have to weigh the options against what fits your situation personally.

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  • How Student Loan Refinancing Works

    If you have student loans you might be wondering how student loan refinancing works. This is especially helpful is you have private student loans that are not eligible for student loan forgiveness.

    I recently refinanced student loans to get the best rate so I could save money while paying off debt. After mentioning this on my YouTube channel, I thought I’d share more about student loan refinancing in general after many people reached out with questions like:

    • Why did I refinance?
    • What is student loan refinancing?
    • How does student loan refinancing work?
    • Can student loan refinancing help you save money?
    • How does student loan refinancing help you pay off debt?

    In this student loan refinancing guide I’m covering everything you need to know. I share my own experience, information about student loan refinancing, an easy explanation of student loan debt refinancing works and how it can benefit you.

    My Student Loan Refinance Experience

    I recently went through the experience of refinancing the Parent Plus student loans left from my debt snowball.

    My experience has been slightly different than a traditional student loan refinance. This is because I’m refinancing Parent Plus loans into a new loan in my name. Due to this I was unable to use certain companies. I also had to sign additional paperwork saying I was taking over the loan. Otherwise it was a similar experience to anyone else going through student loan refinancing.

    The main reason I refinanced was to get a lower rate which to save money on interest. I paid these loans off quickly but still wanted to save money during this time.

    I’ve learned a lot about student loan refinancing during this process. I learned through my own experience and with my audience sharing their stories as well.

    What is student loan refinancing?

    Student loan refinancing is when you refinance your student loans with a private lender. Most people do this in order to consolidate multiple loans or to get a lower interest rate.

    Refinancing is one way you can work to pay off your student loan debt faster.

    Student loan refinancing is good for:

    • People who have good credit.
    • People who want a lower interest rate on their loans.
    • Anyone with federal or private student loans.
    • People who have private student loans.
    • People who have a consistent monthly income.
    • Anyone who wants one monthly payment instead of multiple.
    • People who want to pay less interest on their student loans.

    Student loan refinance is not good for:

    • People with bad credit.
    • Anyone with unstable income or low income.
    • People who have low interest rates already.
    • Graduates who want to use the Public Service Loan Forgiveness program.

    Refinancing is not for everyone! You have to look at your situation and determine if student loan refinancing would actually make sense for you. For most people it does make sense but in certain situations it does not at all. Look at your specific numbers and situation to decide.

    How student loan refinancing works vs. Student loan consolidation

    If you are not sure whether you want to refinance or consolidate your loans, then it is important to understand the differences between them. You need to know how student loan refinancing works compared to student loan consolidation or forgiveness.

    First, student loan consolidation is a program from the federal government. It’s run through the Federal Student Aid off where you are able to combine multiple federal student loans into one new loan.

    Student loan consolidation can be a good option if you want to move to one payment and can achieve a lower interest rate on average. It also can keep you on the path toward various forgiveness programs offered from the government.

    Student loan refinancing allows you to combine federal loans and / or private student loans into one new loan. Refinancing your student loans is done with a private lender (you can find various lenders to compare through sites that list multiple and compare offers for you).

    Refinancing your student loans can get you an even lower interest rate than the government will offer you and that lower interest rate can help you pay off your loans faster.

    Is there a downside to refinancing student loans?

    There are a couple cons to refinancing student loans and one big downside to refinancing student loans.

    The biggest negative to refinancing student loans can be the loss of federal repayment protections. When you refinance your federal student loans you walk away with private student loans that lack the deferment and forbearance options available from the federal government.

    Refinancing also removes any potential paths to loan forgiveness from the federal government. Refinancing companies do not offer forgiveness options for student loans. So if you are counting on a forgiveness option you will be giving it up with refinancing.

    Who is eligible to refinance?

    Student loan refinancing companies require borrowers to be creditworthy with good credit scores. If you don’t have good credit then you will likely not be approved. (This is another reason to work on improving your credit!)

    To qualify for student loan refinancing you have to have good or an excellent credit score. Most refinancing companies will require a 660 or above for your credit score to qualify.

    Luckily many student loan refinance companies offer instant online rate quotes so you can see if you are eligible before going through a full application.

    How do you get approved for a student loan refinance?

    If you are trying to refinance your student loans you will want to look at the things that will help you get approved for a new loan.

    Each student loan refinance is actually creating a new student loan and these loans are approved based on each individual’s background and unique financial circumstances.

    Here are some of the things companies look at to determine if you can refinance your loans with them:

    • Credit score: do you have good credit? What’s your credit score? Refinance options are generally not available to people with bad credit so you should check your credit and work on improving your credit score if you want to refinance your loans. Aim for a 700 credit score of higher for the best chance of approval with the best rates.
    • Income: In order to get approved a lender will want to see that you have income sufficient to pay off your student loans. You’ll have to prove that you have stable recurring monthly income that an service the loans which means you will need to provide paystubs proving your income sources. If you have unstable income you will likely be denied but can improve your chances by finding a cosigner with stable income.
    • Debt-to-income ratio: Your other debts like a mortgage, credit cards, and car loans will factor into your refinance application. Lenders will want to see how much of your income you spend monthly to service your debts. Lenders focus on your debt-to-income ration which means the ratio of your total monthly income compared to your monthly debt obligations. The lower your debt-to-income ration the better you will look when you apply. To improve this before trying to refinance you can increase your income or pay off your debt or do both!
    • Employment: Just like having a stable income, lenders want to know that you have stable employment. You will need an existing job or a written job offer or contract in order to refinance your student loans. Sometimes they will require work experience but some companies will refinance your loans while you are in school or residency in special situations.

    Those are some of the things that will be considered by the company writing your new loan so these are things you can work on improving if you want to qualify for a refinance.

    Where To Find Student Loan Refinance Offers

    So where do you actually refinance student loans? One of the best options for refinancing is SoFi. They have been the leader in student loan refinancing for a few years and many people have successfully used them to refinance.

    Credible allows you to get multiple prequalified quotes from companies (including top private student loan lenders) in just a few minutes.

    Check out your student loan refinance options on Credible (does not affect credit) and get a bonus gift card if you refinance!

    Splash Financial (Dave Ramsey Endorsed)

    how student loan refinancing works with splash financial

    Splash financial uses  leading technology lets you find your new, lower interest rate for your loans in under 3 minutes. They are endorsed by Dave Ramsey which makes them pretty trustworthy and I’ve seen people have major success refinancing their loans through Splash Financial.

    Check out your student loan refinance options on Splash Financial (does not affect credit) and get a $250 check if you refinance!

    I like both of these platforms because they compare multiple rates for you and also offer bonuses if you do end up refinancing with one of the companies they have shared with you.

    Using Splash Financial lets your compare who has the best student loan refinance rates since they compare multiple student loan refinancing rates from multiple companies.

    SoFi

    how student loan refinancing works with sofi

    SoFi has established themselves as one of the top refinancing companies and a very trusted source. Most of the people I know personally and who watch my channel have refinanced their loans through SoFi.

    If you want recommendations, my comment section is full of recommendation comments like these:

    • “I went with Sofi. I paid it off in five months so the interest rate wasn’t really a concern for me. They gave me money for funding my account.” – Sandy
    • “will be going with SoFi because unemployment protection. I currently have them and they been nothing but helpful. I got this off the website and this is why the rates are slightly higher but not by much. Plus, the process is quick to refi.” – Sarah

    One benefit of SoFi is you can also create accounts to invest, get a personal loan and do more beyond just refinancing. They have expanded their offerings to go beyond just student loans.

    Another benefit is that SoFi gives out bonuses to people who refinance through them. If you use my referral link in this post you will get $100 when you refinance.

    Check your potential refinance rate at SoFi and get a $100 bonus!

    You may also want to check rates for multiple student loan refinancing offers in order to get the best deal. Below are a few companies you might want to use to get refinancing offers and compare the options for your refinance.

    Credible (Compare rates)

    how student loan refinancing works with credible

    Tips For Student Loan Refinancing

    If you are planning to refinance your student loans, here are a few tips to consider:

    • Learn how student loan refinancing works. You might be in student loan debt because you didn’t know how the loans worked. Don’t make the same mistake with refinancing. Learn everything you can before taking action.
    • Apply to multiple lenders. I like Splash Financial because they handle this for you, but applying to multiple lenders gives you the best chance to get a low rate.
    • Apply to multiple lenders within 30 days. Any time you apply for a new loan you have roughly 30 days to get different quotes so it will show as a single hard inquiry on your credit report.
    • Check your credit report before applying. Make sure you remove any errors by disputing false claims. You can get your credit reports for free through AnnualCreditReport.com.
    • Get a cosigner if you are worried you might not be approved. If you have a big negative factor against you then try to ask a spouse or family member close to you to be a co-signer. I generally recommend never cosigning for someone’s debt but this can often make the difference for many applications and many student loan lenders do offer a co-signer release which releases co-signers of financial responsibility meeting certain qualifications (check with your lender for details and requirements on this).

    Those are just a few tips to keep in mind when you are refinancing your student loans.

    Refinancing Student Loans Is NO Quick Fix

    Just because you refinance your student loans doesn’t mean they will be paid off. You are still in debt!

    I hope this post helped you understand how student loan refinancing works. It is not a quick fix to get out of debt.

    Refinancing the loan itself doesn’t get you out of debt – it just gives you a boost by either changing your payoff plan or lowering your rate to save you money.

    Refinancing is not the get-out-of-debt secret or quick fix. You need to make sure that when you are refinancing it is the right move for you and it is the next step you will be taking to get out of debt faster!

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  • How To Improve Your Credit Score

    My credit score was not great when I first started learning about money, but recently I’ve benefited from multiple refinances where my excellent credit gave me huge benefits and saved me tens of thousands of dollars

    After refinancing our mortgage AND the parent plus loans I’ve been paying, I’m more convinced than ever that you shouldn’t ignore credit. When you have bad credit you can get denied for loans or have to accept bad rates that end up costing you a lot of money.

    Instead we should work to make your credit score better without going into debt. I know not everyone agrees on credit in the personal finance world – everyone gets feisty – but it’s a fact of life for us real life every day people.

    Over the years I’ve been able to raise my low credit score to one that is considered excellent. This excellent credit score has helped save me lots of money in interest rates on my loans and has put me in a much better position financially.

    Learning how to improve my credit score took some work so I’d like to share some of the tips to improve credit scores that I learned along the way.

    Why You Should Improve Your Credit Score

    The unfortunate reality is that your credit score matters. 

    Good credit gets you access to better rates, allows you to pay less on big items like homes and cars, and even determines your ability to qualify for certain jobs or rentals. 

    You don’t have to love debt or need credit card debt to get a good credit score. In fact, I hate debt. But I also live in the real world and out here your credit score is a tool that can open up doors to a better experience in life.

    Having no credit sounds like an amazing idea but in the real world it makes things much harder. You will have access to fewer companies when you apply for a mortgage because many won’t do manual underwriting. You’ll  have access to less rental options because many landlords don’t want to (or can’t) go through the hassle of evaluating your finances and manually approving you. 

    The fact of the matter is that having good credit opens up doors for you.

    Here are a few reasons why building a good credit score is important:

    • Good credit will get you better interest rates when you need credit for financing a large purchase.
    • Good credit means you will pay less overall on those big purchases you have to make on credit.
    • Buying a home requires a credit score with most lenders and the better your credit score, the better loan you will be able to get. 
    • Having bad credit can stop you from being able to buy a home at all until you improve it.
    • Your credit score determines your ability to rent an apartment and many won’t accept below 700.
    • Your credit score can affect getting certain jobs in certain industries where you have to appear trustworthy.

    Clearly having good credit is important. It affects many areas of your life and having bad credit will force you to pay more for the same things others get at a much lower overall cost.

    The good news is your credit score is something you can work to improve!

    We have excellent credit now so we got great rates and had an easy time with our refinance. I got a great rate on our mortgage and I got to move the rate on student loans from 8.5% to just over 3%. Before that? My mom got denied for a refinance because of credit. She’s been working on her credit and debt payoff but in the real world she is still penalized by companies and forced to pay 5% more interest. Or even worse on other products.

    It’s not fair. It’s really not. When you have bad credit you have to pay more when you do need to purchase something with credit. You can also be denied certain jobs, rentals, and more. Pretending like you don’t need good credit might sound cool and counter cultural until you are the one being denied opportunities to make your life better…. because of credit.

    The good thing is that credit is something that can be fixed. It’s a game. There are known things you can do to improve your credit. And if you’re smart you can benefit from it. Pretending it doesn’t exist doesn’t work for most of us so I’m more convinced than ever it’s important to understand how credit works, learn to use it responsibly, and benefit from the concept.

    What Makes Up Your Credit Score

    In order to improve your credit scores, you need to understand what makes up your credit score.

    To help you understand how factors affect your credit score, here’s a screenshot of my info in Credit Karma while I have a 823 credit score.

    Here are the things that will affect your credit score from highest to lowest impact:

    1. Payment history – Percentage of payments you’ve made on time
    2. Credit card use – How much credit you’re using compared to your total limits
    3. Derogatory marks – Collections, tax liens, bankruptcies, civil judgements on your credit report
    4. Credit age – Average age of your open accounts
    5. Total accounts – Total open and closed accounts on your report
    6. Hard inquiries – Number of times you’ve applied for credit (in the last couple years)

    These are the things that impact your score the most. Two of them are things that you do automatically when you start budgeting and paying down your debt – you pay things on time and you use less of your available credit.

    So let’s talk more about these factors and how you can use them to actually improve your credit score.

    How To Improve Your Credit Score

    While I don’t take pride in having a great credit score, it has been something I’ve worked to improve over the years and has benefited me greatly. Ultimately a high credit score wasn’t a point of pride but a practical matter that I needed to improve to help myself and my family.

    It is possible to build your credit score but there are some things you need to know about improving your credit score. Having this knowledge is the first step to improving credit and the next will be implementing it. 

    Here are some important things to know:

    • It is possible to rebuild credit responsibly over time.
    • There is no QUICK way to fix credit. Any method will take time.
    • You do not need to pay someone else to fix your credit. You can do it.

    My own credit score went from the low 600s to the high 700s and now to the 800s. This has improved my loan interest rates and helped us get a good mortgage rate which saved us tens of thousands of dollars in interest.

    The Basics Of Improving Your Credit Score

    If you want to improve your credit score, there are some basics you need to know about how to improve your credit and therefore your credit score.

    The basics of improving your credit score:

    1. Check your credit score AND your credit report
    2. Pay your bills on time
    3. Reduce the amount of debt you owe
    4. Increase your credit limit

    Those are the very basics of building your credit over time.

    Of course, there are lots of little things to do with each item and in certain situations so we will walk through them all in the coming sections and action steps. You can do this!!

    For action steps you will want to do the following items:

    • Check your credit score for free with multiple sources.
    • Check your credit report and make sure it is accurate.
    • Pay your bills on time every month and never be late.
    • Keep your balances low on credit cards and revolving credit.
    • Do not close old accounts you don’t use.
    • Apply for and open new credit only as needed.
    • Pay off debt as you can rather than moving it from account to account.
    • Make responsible purchases on credit that you know you can pay off.
    • Don’t obsess about your score, just let it improve over time.

    These are the basics for improving your credit score. I’ll break each one down further below.

    Check your credit score for free.

    Improving your credit starts with knowing your credit score and knowing where you stand with credit. Once you know what you are working with you will know how much it can improve by implementing the basic ideas for improving a credit score.

    You can check your credit score for free from a number of sources these days. You should never have to pay to get your credit score.

    Check your credit score from 3 different sources.

    I recommend checking your credit score in at least 3 locations so you can get an average and see what different scores are saying about your credit worthiness. Different sources will report a different FICO or Vantange score so checking multiple sources gives you a clear idea of what different places are seeing.

    Here are a few places where you can check your credit score for free

    • Experian app
    • Credit Karma
    • Creditwise – offered within Capital One accounts

    Checking your score is the first step because you have to know where you are starting. It may be hard to see and face the facts if your score is very low but finding out where you start is the only way to improve.

    Check your credit report and make sure it is accurate.

    When you are trying to improve your credit you have to not only find out your credit score but also check your credit report to see what the credit bureaus are seeing.

    Luckily, once a year you can pull your credit report FOR FREE thanks to the federal laws in the United States. You can get a free copy of your credit report every 12 months from each credit reporting company from annualcreditreport.com.

    There are multiple reasons to check your credit report:

    • Checking your credit report gives you an idea where you can start improving credit.
    • Reviewing credit reports helps you catch signs of identity theft early.
    • It allows you to ensure that the information on all of your credit reports is correct and up to date.

    Here’s how you complete this step:

    Step 1: Check your credit report.

    There is ONE website in the US where you can pull your credit reports for free thanks to this law: annualcreditreport.com

    You don’t need to pay for your report from any bureau or any other website. This is the only website you need! It is the only official site explicitly directed by Federal law to provide them.

    Sign up and enter your information on the website to get your three credit reports.

    Next, review the information. If there is any incorrect information, make a note of it for the next step.

    Compare the three credit reports against each other. Do they match? Where are the discrepancies between the different bureaus? Mark these for your information for future steps.

    Step 2: Dispute and remove any incorrect information.

    Sometimes there may be mistakes on your credit report. That’s why it is important to pull and double check your credit report every year.

    Once a year you can should pull your credit report for free and make sure nothing has changed or been reported incorrectly. Staying on top of your credit makes sure when you do build good credit it will be there for you when you need it.

    Pay your bills on time every month and never be late.

    On time payments is a huge factor in your FICO score and all other credit scores. Paying your bills on time is actually one of the biggest factors in determining your credit score. FICO says it is 35% of their calculation for your score.

    Unfortunately missed payments or late payments will negatively affect your credit score. Paying your current bills on time should be the first active step you take toward improving your credit score.

    If you’re having trouble with late or missed payments, here are a few things to try to pay your bills on time:

    • Make a list of every bill you have to pay. You should have an accurate and up to date list of all bills you owe each and every month. If you have a lot of bills to pay it’s easy to let one fall through the cracks if it’s not listed. 
    • Check your credit report to make sure you’ve included every bill due on your list. Your credit report lists all lenders you owe money to so you can add any debts you’ve either missed or forgotten entirely.
    • Review your bank accounts and credit card statements for recurring bills you pay each month. This will include things like subscriptions, memberships, cell phone bills, etc.
    • Add the due dates to your list of bills to pay. You have to know when bills are due in order to pay them on time or early. 
    • Set up automatic payments for bills. It’s easy to forget a due date when your life gets busy so make sure your bills are paid automatically when it’s an option.
    • Set up payment reminders. You likely can’t pay every bill automatically so you will never to make sure you have a system for making manual payments on time. You can do this on some banks or just use your calendar. Put all your bill due dates into your calendar and set up automated reminders so you can pay the bill on time or double check autopay to make sure it was paid.

    This might seem like a lot of work but always paying your bills on time will help you maintain good relationships with companies and improve your credit score.

    Getting current on your bills and staying current without missing payments or paying lae will help you improve your credit score. The longer you pay your bills in a timely way the higher your credit score will increase and the less your past payment mistakes will count against you.

    If you are truly struggling just to make ends meet or feel like you are drowning in debt, then reach out to a legitimate credit counselor or financial coach. Don’t go to a disreputable credit repair place with big promises but look for help to get out of the hole you’re in right now. This solution won’t hurt your score and will give you a plan to manage your credit by paying on time and improving slowly over time.

    Keep your balances low on credit cards and revolving credit.

    How much credit you are currently using will affect your credit score. If you are only using a small percentage of the credit you could be using then your score will be higher.

    Having a good credit score doesn’t mean you need overwhelming amounts of debt. In fact, having large debt balances usually hurts your credit score because of the credit utilization factor.

    Your credit utilization is the balance of your debt compared to the available credit you have access to. This contributes 30% to FICO score’s calculation which means it is something you need to work on asap. 

    The goal here is to pay off debt while still keeping your credit limits high. This lowers the amount of credit you are using compared to the amount you could actually use. 

    The first step of course is paying off debt so we will focus on that step here. It is one of the easiest areas to work on but it does require discipline, focus, and organization.

    Do not close old accounts you don’t use.

    While this is debated by some in the personal finance world, I found that not closing accounts helped my credit score.

    When I finished paying off a debt or simply moved on to a new credit card for rewards, I never closed the old account unless it had an annual fee.

    If a credit card did have an annual fee, I did close the account but asked the company to roll the credit limit to another card without a fee or to another existing card. This trick helps raise your credit limit drastically!

    Having old accounts still open for use will help increase your credit score since age of accounts is a big factor in your score. You don’t have to use your older credit lines often but just enough to keep them open.

    Apply for and open new credit only as needed.

    Having multiple accounts open for long periods of time can help your credit score but that doesn’t mean more is better.

    You don’t need to open 25 different accounts to get a good credit score. In fact I have less than 10 and have an excellent credit score.

    Be selective in the credit lines that you open. Don’t max yourself out with too many new open lines of credit. It will drop your credit score temporarily and it could potentially put you in a precarious situation.

    If you are in a credit building stage, then you should work on opening new cards strategically over time but never all at once. Wait 6 months or more between opening new credit lines.

    Pay off debt as you can.

    I don’t carry debt balances and pay off all my debt but still keep my credit score high so it is available for me to use if I need it.

    Paying off debt rather than moving it around with transfer balances is a smart move for your overall financial situation. It also helps your credit score because the lower your debt utilization the better your score will be.

    Paying off debt can help improve your score if you are reducing the amount you owe and freeing up space you can use. Debt utilization amounts are a part of the credit score as we discussed before. Your score will rise when you have lower amounts of debt because you are utilizing less of the credit available to you.

    Here are some practical ways to pay off debt:

    • List out all of your debts and make a plan to pay them down using either the debt snowball (lowest balance to highest) or debt avalanche (highest interest rate to lowest).
    • Pay off debt instead of moving it around. Paying off your debt will lower your overall utilization amount which will increase your score.
    • Use extra money in your budget and from side hustles to pay down your debt faster. 
    • Keep balances low on credit cards and any other revolving credit you have open. High balances on credit cards will negatively affect your score.
    • Do not close your unused credit cards when they are paid off unless there is a yearly fee for keeping them open. If you do close a credit card, ask the company to roll that credit limit to another card you have open with them.

    Always make sure you make responsible purchases on credit that you know you can pay off.

    Don’t obsess about your score, just let it improve over time.

    It might be tempting to pay someone to help improve your credit score quickly, but be cautious of these services. Many are not helpful but take your money for something you can do yourself.

    You can improve your credit score over time by following common sense credit guidelines and getting on a budget.

    The less you obsess about your credit score the better off you will be.  Ultimately a credit score isn’t the most important thing in your financial life and there are ways to operate around a bad credit score or no credit score at all.

    If you are planning to use credit less and don’t need it for a future mortgage or car loan or new job then your credit score will be less important.

    Remember that even if you are planning to use credit in the future, you can work with what you already have, pay things on time, use credit responsibly, and build your credit score from there.

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  • Living With Roommates To Save Money & House Hack

    When you are saving money to pay off debt or afford a big expense like your first home, you likely will be looking at a number of options to save money. One area where you can save a lot of money is by living with roommates.

    Why live with roommates?

    Living with roommates is actually a great way to get social interaction and save money!

    When you live with roommates you are able to save money because you are splitting your rent costs. Rent or mortgage costs are generally the largest line item in most people’s budget. Getting a roommate to cut down on that expense makes a lot of sense when you are trying to save money.

    Another benefit of living with roommates is the social interaction and community. This can be a huge positive when you have the right roommates and love the people you live with. They can greatly add value to your life, but you have to be careful because it can also go the other way.

    Those are the top two benefits I personally found when living with roommates but there are plenty of others!

    Living With Roommates

    I’ve had plenty of roommates over the years during college and after. I’ve lived with friends,  family and strangers.

    In fact, I’ve never lived alone until I briefly lived alone for 6 months in my late twenties. And even after that brief stint living alone I realized I still wanted to live with other people!

    The reality is that living with roommates is harder than living alone because you have to share space. Communication is important and resentments can come up when there are disagreements about how the space should be used. Conflicts can arise over things like chores, cleaning, and sharing food.

    Ultimately the reality of living with roommates is that it takes a lot more work on interpersonal relationships but provides benefits that greatly outweigh the level of work you must put in for most cases.

    Why I Lived With Roommates 

    So why did I still live with roommates when I know it involved a lot of extra work? Why was I willing to deal with the tradeoffs?

    I wanted to save money on rent.

    That’s it! The number one reason to live with roommates was the reason I did it. Living with roommates was the right choice for me because it was the cheapest living option. Regardless of what city I’ve lived in, or my spot in life, living with roommates has always been the cheapest living arrangement.

    Living with roommates might not always be ideal or what you expect, but I know it’s what is best option to save money!

    House Hacking With Roommates

    A popular solution to not only saving money but eliminating your mortgage is house hacking.

    House Hacking is a phrase coined by BiggerPockets podcast host Brandon Turner and it just refers to the strategy of renting out portions of your primary residence to generate rental income that is used to offset the cost of your mortgage and other expenses associated with owning a home.

    Basically, you get roommates to live with you in the house that you own and your roommates pay your mortgage! You save money, build equity, and can generate positive income in the right locations.

    House hacking is often a way to get into a more expensive home or home ownership in an expensive location where you can’t afford the home on your own. It’s also a great way to squeeze all the value possible out of owning a home so you benefit financially.

    Living with roommates in order to house hack is possibly the very best way to utilize living with other people because you achieve accelerated financial benefits from the arrangement.

    Here are some of the benefits of living with roommates in order to house hack:

    • Lowering your monthly housing cost through generating rental income
    • Renting out portions of your property means you still get to use it
    • Lowering your taxable income base by acquiring extra tax write offs (mortgage interest deduction)
    • Having the possibility of removing your mortgage payment, insurance, and maintenance expenses completely through the rental income
    • Learning how to be a landlord without as much upfront risk
    • Transitioning into the world of real estate investing again without the huge unfront risk

    There are clearly a lot of positive benefits of living with roommates and this is not even including all of them!

    Tips For Living With Roommates

    If you are single it’s a lot easier to live with roommates because you can simply move into a house with a lot of people or rent a room out from someone.

    If you are married this is still possible. It’s also an option for you to rent or buy your own place and then bring in roommates. This will give you more control as you will be in the position of power to set rules and evict the person if things go wrong.

    It always helps to have a written agreement or lease with people you are living with even if it’s just a temporary situation or you are the person moving in. This covers both parties in case something goes wrong and there are disputes to settle later. It might be awkward at first to bring up the fact that you want a written agreement to cover your roommate situation, but it’s a very smart idea in the long run!

    Additionally there are many things you can do to be a good roommate and ensure that nothing goes wrong. Be a good roommate by:

    • respecting your roommates space and privacy
    • doing the dishes and other household chores when needed
    • not being nosy about the roommates life
    • setting clear boundaries for each other and respecting them
    • picking up after yourself, especially in common areas
    • respecting the other person’s right to reserve and use common areas
    • being a happy and positive person in interactions with roommates

    Do those things and you won’t have any problems at all living with roommates. In fact, it might be the best thing you ever did!

    Help With Living With Roommates

    If you want to be extra prepared for living with roommates, or don’t know how to handle a situation that has come up, try reading books and blog posts about how to deal with roommates.

    There are several inexpensive ebooks that you can get to help you navigate the world of living with roommates. Try these to start:

    These books are a great way to learn about roommate living and learn how to solve or prevent common problems that arise among people living together. You can spend $10 on all these ebooks and save yourself from unnecessary strife.

    Good luck with your roommate living. I know it’s for me and I hope you can find a way to make it work for you too!

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  • 6 Most Profitable Digital Products To Sell Online

    I love selling digital products and I’m glad I finally started selling digital products in 2019 after years of dragging my feet. It has been an incredible and profitable income source in my online business!

    Selling Digital Products

    Selling digital products is a highly profitable way to earn money online while also helping your customers solve a problem and improve their lives. It’s truly a win for everyone.

    Selling digital products is actually my favorite way to make money online (here are the ways I make money online). I sell digital products that make me hundreds of dollars every month and sometimes even thousands in passive income. I love making products once that I can then sell thousands of times.  

    Whether you are a blogger, YouTuber, or online business owner, selling digital products is a great way to earn money online in 2020 and beyond.

    Even if it is not your main revenue it can become a great side income that helps you earn money to pay for items you need.

    Why Should I Sell Digital Products?

    Maybe you are wondering if you should even sell digital products or why digital products are such a great way to earn money online. 

    There are a ton of reasons why you might want to start selling digital products. Here are a few:

    • Passive income – create products once and sell an infinite number
    • No physical inventory to worry about – everything is done online
    • Low start up costs – you can create digital products with free programs
    • Easy to create products – time to create digital products can be low
    • Easy to sell – plenty of avenues to sell your products 
    • Easy to create products for multiple niches & interests

    These are very compelling reasons for why every person wanting to create an income online should be making and selling digital products. It is a fantastic opportunity to create passive income for yourself while also creating useful products for others. 

    How to Sell Digital Products Online

    There are many different ways to sell digital products online and each have their pros and cons. 

    You can sell on sites like Etsy where you don’t own your platform but can reach a huge amount of customers quickly. 

    You can sell on your own website as well which takes more work to setup but you keep more of the money and have more control over your products. 

    First, you will need your own website or at least a domain for selling on your own website. See how to start a website or blog here. 

    Next you will want an e-commerce platform that will allow you to both take payments and deliver your digital products to your customers. There are many different e-commerce platforms that make this possible so let’s look at the best ones for selling digital products specifically.

    Etsy – I love selling on Etsy because you don’t have to find people to buy your digital products – they are already on the platform and Etsy is bringing them to you! It’s easy for beginners to start and Etsy shop and you can get 40 free listings through this link.

    Podia –  Podia is a more robust platform that will allow you to not only sell digital downloads but also offer memberships and online courses. If you have plans to grow a full online business it’s the ideal platform to use to keep everything in one place. Get a 14 day free trial of Podia here

    SendOwl – This platform is specifically designed for selling digital products. You upload the digital products and start selling immediately. This platform is just $9 per month with no additional fees taken our from sales you make. Get a free trial of SendOwl here.   

    Woocommerce – WooCommerce integrates easily with existing WordPress websites to sell digital downloads. WooCommerce is not specifically for digital downloads but they have made the process super simple for sellers and do not take additional fees from sales. I currently use WooCommerce to sell my digital downloads on my website. Get started with WooCommerce.

    How To Determine Profitable Digital Products

    There are tons of digital products you can sell online but if you are looking for maximum profitability from your efforts then you need to think about your end customer.

    If you are aiming for a market of people who don’t have much money then you can’t price your items that high. If you are looking to sell to a group of people that won’t get anything besides personal satisfaction from your product that drops the level of profit for you as well. The customer you are targeting will determine how profitable your item will be.

    You want to look for markets where your future customer is going to gain high rewards from your products therefore they will be willing to spend more which increases your profit.

    The most profitable items help someone earn money or achieve a goal especially if it financially benefits them more. An example of this is selling editable marketing materials to real estate agents. These products are profitable because you can charge more for them because the customer is willing to spend more to save time in creating these materials and will make money in their business from them.

    Next let’s look at some of the most profitable product ideas and examples of each.  

    6 Most Profitable Digital Products To Sell Online

    If you are planning to add digital product sales to your online income streams, then you likely want to make sure you choose the most profitable digital products to sell so your time is used wisely.

    Below are my top picks for the best digital products to sell in 2020 and beyond. 

    1. Ebook templates
    2. Marketing templates
    3. Swipe files
    4. Spreadsheets templates
    5. Online courses
    6. Elements for creators 

    These are incredibly profitable areas of digital products because they are things that help other people make money. Generally people with money or making money are the ones who are willing to spend more. 

    There are dozens if not hundreds of other digital product ideas for things you could sell online, in fact I’ve shared more than 60 digital product ideas you can sell online!

    Regardless of which digital product you decide to sell, your profits for creating a digital product will always be higher than a traditional product because you are creating a product once you can sell again and again.

    Growing A Digital Product Business On Etsy

    Etsy has downsides but it’s also an amazing place to build a business and earn an income.

    If you want to grow a business selling digital downloads on Etsy I recommend my friend Sharon’s Etsy Entrepreneur course where she walks you through the process of setting up an Etsy shop and growing it to make $1,000 a month or more. She grew her Etsy store of digital downloads to more than $1,000 a month and has inspired many people to do the same.

    Remember that your business growth will depend on being consistent and growing over time adding valuable products. For most of us we begin with one product and grow over time building on what works.

    Over time you will learn tips and tricks to grow your digital products shop and find that success can be far beyond you expected when you focus on profitable digital products.

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  • Trying New Budgeting Styles | April Paycheck Budget

    Our April paycheck budget has a ton of new changes because our lives are different now and it felt like a good time to change up the budget as well! We are now trying out a pay yourself first method which we will soon combine with a percentage based style like 80/20 or 50/30/20. I’ll be sharing more about these as we try new stuff out!

    While our lives are so different as we navigate the current financial crisis and global pandemic we’ve adjusted our goals for the year and it felt like a good time to change up how we budget because everything else is different too!

    Our main focus for paying ourselves first is our savings for our emergency fund and building up 3 months of expenses because $1,000 is not an emergency fund.

    Budget With Me!

    In the video you can budget along with me as we cover the budget necessities: bills, fixed expenses, variable expenses, debt payments, and sinking funds.

    This is the first time we have implemented the pay yourself first method where we put all of our goals first and make sure those are covered before anything else. That means savings, investing, and debt repayment comes first in our budget before bills of expenses like food and fun.

    If you are new to watching our budgets, here’s a little run down of our situation! We both work full time, I do freelance work and earn income from my YouTube channel and this is our take home income that I am budgeting. I cover bills, variable spending expenses, sinking funds and the goals for the month. This month we are super focused on increasing our emergency fund which we are trying to cover 3 months of expenses and eventually even more.

    April Paycheck Budget Setup

    During this paycheck our main goal was to continue building our emergency fund.

    April monthly goals:

    • Save $2,000 for our emergency fund
    • Don’t do unnecessary online shopping

    Goals for this paycheck for me were:

    • starting a new type of budget
    • setting up business payments biweekly
    • emergency fund growth

    With that in mind we broke down our April 2020 monthly budget into a more specific way for this paycheck budget.

    April 2020 Monthly Budget

    Here’s the breakdown of the paycheck budget for the first half of April 2020.

    Salary$2,599
    Extra Income$26
    Pennies Not Perfection$400
    Total Income$3,259

    With $3,259 in planned income for the month we broke it down this way.

    Pay Yourself First:

    Emergency Fund$1,130
    Student Loan$220
    Roth IRA$50
    Robinhood$10
    Ellevest$10

    Fixed Expenses:

    Mortgage$600
    Therapy$130
    Netflix$15

    Sinking Funds:

    Phone$50
    Life Insurance$35
    Car Insurance$75
    Car Repairs$50
    House$25
    Christmas$25
    Emergency Fund Extra$45

    Variable Expenses:

    Food$350
    Gas$50
    Medication$30
    Birthday$50
    J Personal$100
    M Personal$50
    Giving$100
    Misc$50
    Buffer in Acct$9

    Paying Yourself First

    Paying ourselves first is super exciting! Let’s be real, it’s fun to save money and invest money once you realize what that money can do for your in the future.

    Paying yourself first isn’t hard it just means prioritizing things like saving, investing, and paying off high interest debt. Paying yourself by doing these things before anything else in your budget is a great way to hit goals.

    We plan to continue trying this style of budgeting and see how it helps us better hit all our many goals!

    Our Emergency Fund Savings

    Because we aren’t playing many different expenses like daycare or going out to eat or going to events or throwing parties (the list goes on) we are able to save a lot more money in our emergency fund!

    We recently determined what we need for our emergency fund to equal 3-6 months of expenses.

    Looking at our monthly expenses and cutting out many things for an emergency situation means we need roughly $3,000 a month for our expenses. This means for a 3 month emergency fund we will need $9,000 saved. For a 6 month emergency fund we will want to stock up $18,000.

    We have a plan for our emergency fund and hopefully things go well and we can save it up with our extra income coming in and big paychecks from the government.

    Now with planning to save $2,000 a month we will also be adding a lot of our regular income to our emergency fund. This means we will be able to save up to $9,000 much quicker than I originally expected.

    This paycheck we were able to save over $1,000 to the emergency fund which moves us even closer to our goals.

    Investing To Hit Goals

    While we are prioritizing savings during this time due to potential job security, we are also continuing to invest small amounts into the market and dollar cost average our investments.

    One of my goals this year is to max out my Roth IRA and because I haven’t started on that goal yet it felt like a good time to get going on that goal.

    I’ve been investing for a long time now and I love investing when markets are going up and when markets are going down. In fact, my shortest time frame investments are for at least 15-16 years from now when I want to use the dividends to help my daughter.

    Because I am not investing money for the short term I don’t worry much about the markets year to year ups and downs because I know that in a long time frame that money will continue to grow. That’s why I’m still investing small amounts even when I have bigger goals to achieve, because I know small amounts I won’t miss now will add up to huge amounts later.

    I’ve talked a bit about the investing platforms I use for different purposes and here are the ones I plan to use this month:

    Because all of thee accounts have different goals and allow me to try out the more popular investing platforms I’m able to try different things and also work toward multiple goals in the far off future.

    Trying New Budgeting Styles

    I don’t call myself a budgeting expert and probably never will because there are too many styles of budgeting. What works for me for a while doesn’t work for me at another time. What works for me may never work for you.

    The thing is that creating a budget and following it during times of uncertainty and times of stability both helps you create a sense of calm and control. And if budgeting doesn’t feel like it’s working for you? Try a different method!

    Some people love budgeting by paycheck. Some people love Dave Ramsey’s method. Some people adore YNAB. Some people do 50/30/20 percentage based budgeting. There really are many styles of budgeting and one size does not fit all!

    I plant to go through a few more styles of budgeting to see if we can improve on what already works for us. I think it is great to take the best bits of advice from various sources and make them work for you. Best practices from others can improve your life very quickly and that includes with budgeting!

    No matter what your goals are, continue with budgeting and using your money wisely and consistently to hit your goals. You don’t have to be perfect with your money but you do need to be consistent!

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  • Is $1,000 Enough For An Emergency Fund?

    Certain financial experts suggest you start bettering your financial life with saving up $1,000, and while that is a good start, most people have expenses far beyond $1,000. But is $1,000 enough for an emergency fund?

    While a starter emergency fund of $1,000 can help many people get started, it’s important to consider whether or not $1,000 is enough for an emergency fund.

    Why do you need an emergency fund?

    Why exactly do you need to keep money in savings for an emergency? Generally when things are going well and income is flowing in most people do not prioritize an emergency fund (myself included!). However, ignoring an emergency fund only ends up hurting you when you finally encounter an emergency.

    An emergency fund is absolutely critical for anyone who wants to be prepared for handling the ups and downs of life. Life is filled with unplanned events and an emergency fund allows you to walk through things that pop up with lots of peace.

    What type of events might be considered an emergency? These are things that come up during a month that you weren’t expecting but are a normal part of life. That includes many things like the following that run close to over over $1,000.

    • Emergency: a dental office visit that ends up costing hundreds up dollars or even up to $1,200 or more for an emergency
    • Emergency: flat tires where you end up needing to replace 1 or even 4 tires that can costs from $400 – $1,000
    • Emergency: medical event where you have to visit the ER which could cost $500 with your deductible and more for ambulance services or follow up appointments

    There are a number of different types of emergencies but many of them cost hundreds of dollars that you likely don’t have included in your current budget. Having one of these expenses pop up could destroy your budget and send you into debt if you do not have an emergency fund.

    If you can’t pay for the emergency expense with your income during the month then you might turn to credit cards or borrowing from friends and family. Either situation increases debt and makes your life harder in the long run. Being able to cover an emergency expense with your emergency fund makes things easier and less stressful.

    An unfortunate fact of life is that “emergencies” do happen and they will happen to you. That is why having an emergency fund is something you must do if you want to maintain your quality of life and go through life without being stressed by each new emergency.

    How Would You Pay For $1,000 Emergency Expense?

    Let’s start at the beginning… Can you afford an emergency expense that is $1,000? As I shared before, many common emergency expenses can be $1,000 or even more. Sadly according to many studies and polls, almost half of American can afford a $1,000 emergency expense but unfortunately that means half can’t cover that unexpected bill.

    Most people who responded to the poll linked above would pay for a $1,000 expense like a cap repair by dipping into savings like an emergency fund.

    Others responded to say they would pay for an emergency expense by using a credit card, taking out a personal loan, or asking family for help to cover the unexpected expense.

    The Federal Reserve has backed up this type of response with survey results that said 61% of Americans said they would pay for an unexpected $400 expense with cash, savings or a credit card. In their poll only 12% said they would not be able to cover it.

    Between savings, credit, and help from family most people at least have an idea of how they would want to cover an unexpected expense.

    Is $1,000 Enough For An Emergency Fund?

    In most cases, $1,000 is not enough for an emergency for most people.

    On average a general emergency for people is more than $1,000 and Bankrate found that the average unexpected expense for survey respondents was about $3,500.

    So what happens when you’ve only saved up $1,000 for emergencies and then you encounter the typical $3,500 emergency? Unfortunately that means you have $2,500 you need to find a way to pay for and many people then turn toward credit cards or worse, payday loans. Those options can be a very high cost solution since the average credit card rate is 17%.

    One thing to remember when thinking about emergencies: they will eventually happen. In any given year probably a quarter or the people you know will need to find a way to pay for a financial emergency.

    So if we know emergencies will happen, those emergencies on average are $3,500, and any given year it might be us that has an emergency, what do we do with this information? We plan to save more than $1,000 in an emergency fund so that we will not have to turn toward high cost solutions to cover emergency expenses.

    When $1,000 Isn’t Enough

    You might want to know some specific situations where $1,000 is enough for you and when it is not.

    When $1,000 is enough for your emergency fund:

    • you are a student and live with family and have very limited expenses
    • you have a very stable income that is guaranteed and multiple sources of that income

    In some cases where you have very low or no expenses or if you have multiple sources of guaranteed income then you may be able to get by with just $1,000 in savings.

    When $1,000 is not enough for your emergency fund:

    • if you have children and are the sole provider for them
    • if you own a home and need to cover any unexpected repairs
    • if you are self-employed or have commission based inconsistent income
    • if you work in an industry prone to layoff
    • if you have chronic health problems and will likely have medical expenses
    • if you have multiple pets especially if older or unhealthy

    As you can see, there are many life situations where there could be a need for more than $1,000 in an emergency fund. If you are more likely to encounter “unexpected” expenses regularly, then you should work to build a larger emergency fund.

    How much should I have in my emergency fund?

    Since we clearly know $1,000 is not enough for an adequate emergency fund, how much do you need to save?

    This exact number of savings you need will vary from person to person and will depend on a few factors.

    Your emergency fund will depend on:

    • your monthly income
    • your monthly expenses
    • the stability of your income
    • your risk tolerance

    You will need to take into account all of those factors to determine how much you want to save up for your emergency fund.

    Let’s say you earn $3,000 a month but your expenses per month are only $2,000. You have a stable job but you are a single person so if you lose your income you will not have a backup plan besides unemployment.

    In this case you would want to save up 6 months of expenses, so 6 x $2,000, or $12,000 would be your emergency fund number.

    If you have a spouse and you both work then you might air on the side of saving up just 3 months of expenses.

    The more unstable your income is the more your will want to save up. If you are a business owner or work on commission then you might want to save up 6 months of expenses or even more in order to feel secure.

    For us we both work so we decided to save up 3 months of expenses. That meant we needed 3 months of $3,000 in expenses, or $9,000. We plan to save up even more eventually but having $9,000 means we feel secure enough to weather most emergencies that come along.

    You will have to look at all of the factors in your unique situation and then decide what makes the most sense for you and what gives you the most peace. Finding the peace of mind number for your situation will depend on both the numbers and how you feel about the numbers. Remember that this is a very personally choice and won’t necessarily match the numbers of other people who may have different factors involved!

    Tips For Saving An Emergency Fund

    Savings can be challenging when you are trying to juggle debt repayment, mortgages or high rents, and lower paying wages than previous generations. However, despite the circumstances we need to be more focused than ever because we know that $1,000 is not enough to cover emergencies.

    If you have struggled to save in the past then saving for emergencies might be something you need to try multiple tactics to achieve. Here are a few ways people have found success in saving consistently to build an emergency fund:

    You can try one or more of these tactics in order to start saving and keep building your emergency fund savings accounts.

    Where To Save Your Emergency Fund

    Where should you save your emergency fund? What’s the best place to keep your savings?

    I personally use and recommend an online savings account with a high interest rate. There are many online bank accounts you can open at placed like Capital One, Ally, or SoFi where you get a high interest on your savings with no fees.

    Reasons I like these types of accounts for your emergency fund:

    • You don’t have account minimums so you can start your emergency fund from the very beginning with just $1 or $5 or whatever you can spare. If you watch my Transfer Tuesday videos then you know $5 of consistent action adds up!
    • They are easy to open and generally very user friendly. These banks are not complicated and they make the process very easy and also don’t charge fees that traditional banks may charge.
    • Online only banks make it more inconvenient to withdraw the whole amount in your emergency fund which means you will be more likely to only use it in a real emergency.
    • You can keep your savings account separate from your regular checking account. If you want you can open an account at one of these banks you don’t normally use so your money is safe and not immediately accessible to put into your checking account.

    Online bank savings accounts are my personal favorite way to save but you can also save in any other savings account. Just make sure there is not a minimum balance requirement in case you need to use all the money and that there are no fees.

    Most savings accounts, even the ones with the highest return will not give you much return for your money. That is totally ok because you are not looking to make this money “work for you” as an investment.

    Your emergency fund is not meant to be an investment. It is meant to be an insurance policy so that it is there when you need it. You should not invest your emergency fund in the stock market since there is no guarantee the money will be there when you need it.

    Remember that whether you are starting with $5 or $500, keep saving your money!

    You may only be able to saving $5 a week but being consistent over time adds up and that consistency is more important than perfection!

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